Saturday, January 29, 2011

Financial Crisis Was Avoidable, Inquiry Finds

By SEWELL CHAN - January 25, 2011 - NY Times

WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”

While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest conclusions concern government failings, with embarrassing implications for both parties. But the panel was itself divided along partisan lines, which could blunt the impact of its findings.

Many of the conclusions have been widely described, but the synthesis of interviews, documents and testimony, along with its government imprimatur, give the report — to be released on Thursday as a 576-page book — a conclusive sweep and authority.

The commission held 19 days of hearings and interviews with more than 700 witnesses; it has pledged to release a trove of transcripts and other raw material online.

Of the 10 commission members, the six appointed by Democrats endorsed the final report. Three Republican members have prepared a dissent focusing on a narrower set of causes; a fourth Republican, Peter J. Wallison, has his own dissent, calling policies to promote homeownership the major culprit. The panel was hobbled repeatedly by internal divisions and staff turnover.

The majority report finds fault with two Fed chairmen: Alan Greenspan, who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but played a crucial role in the response. It criticizes Mr. Greenspan for advocating deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as a “prime example” of negligence.

It also criticizes the Bush administration’s “inconsistent response” to the crisis — allowing Lehman Brothers to collapse in September 2008 after earlier bailing out another bank, Bear Stearns, with Fed help — as having “added to the uncertainty and panic in the financial markets.”

Like Mr. Bernanke, Mr. Bush’s Treasury secretary, Henry M. Paulson Jr., predicted in 2007 — wrongly, it turned out — that the subprime collapse would be contained, the report notes.

Democrats also come under fire. The decision in 2000 to shield the exotic financial instruments known as over-the-counter derivatives from regulation, made during the last year of President Bill Clinton’s term, is called “a key turning point in the march toward the financial crisis.”

Timothy F. Geithner, who was president of the Federal Reserve Bank of New York during the crisis and is now the Treasury secretary, was not unscathed; the report finds that the New York Fed missed signs of trouble at Citigroup and Lehman, though it did not have the main responsibility for overseeing them.

Former and current officials named in the report, as well as financial institutions, declined Tuesday to comment before the report was released.

The report could reignite debate over the influence of Wall Street; it says regulators “lacked the political will” to scrutinize and hold accountable the institutions they were supposed to oversee. The financial industry spent $2.7 billion on lobbying from 1999 to 2008, while individuals and committees affiliated with it made more than $1 billion in campaign contributions.

The report does knock down — at least partly — several early theories for the financial crisis. It says the low interest rates brought about by the Fed after the 2001 recession; Fannie Mae and Freddie Mac, the mortgage finance giants; and the “aggressive homeownership goals” set by the government as part of a “philosophy of opportunity” were not major culprits.

On the other hand, the report is harsh on regulators. It finds that the Securities and Exchange Commission failed to require big banks to hold more capital to cushion potential losses and halt risky practices, and that the Fed “neglected its mission.”

It says the Office of the Comptroller of the Currency, which regulates some banks, and the Office of Thrift Supervision, which oversees savings and loans, blocked states from curbing abuses because they were “caught up in turf wars.”

“The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire,” the report states. “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble.”

The report’s implications may be felt more in the political realm than in public policy. The Dodd-Frank law overhauling the regulation of Wall Street, signed in July, took as its premise the same regulatory deficiencies cited by the commission. But the report is sure to be a factor in the debate over the future of Fannie and Freddie, which have been run by the government since 2008.

Though the report documents questionable practices by mortgage lenders and careless betting by banks, one striking finding is its portrayal of incompetence.

It quotes Citigroup executives conceding that they paid little attention to mortgage-related risks. Executives at the American International Group were found to have been blind to its $79 billion exposure to credit-default swaps, a kind of insurance that was sold to investors seeking protection against a drop in the value of securities backed by home loans. At Merrill Lynch, managers were surprised when seemingly secure mortgage investments suddenly suffered huge losses.

By one measure, for about every $40 in assets, the nation’s five largest investment banks had only $1 in capital to cover losses, meaning that a 3 percent drop in asset values could have wiped out the firm. The banks hid their excessive leverage using derivatives, off-balance-sheet entities and other devices, the report found. The speculative binge was abetted by a giant “shadow banking system” in which the banks relied heavily on short-term debt.

“When the housing and mortgage markets cratered, the lack of transparency, the extraordinary debt loads, the short-term loans and the risky assets all came home to roost,” the report found. “What resulted was panic. We had reaped what we had sown.”

The report, which was heavily shaped by the commission’s chairman, Phil Angelides, is dotted with literary flourishes. It calls credit-rating agencies “cogs in the wheel of financial destruction.” Paraphrasing Shakespeare’s “Julius Caesar,” it states, “The fault lies not in the stars, but in us.”

Of the banks that bought, created, packaged and sold trillions of dollars in mortgage-related securities, it says: “Like Icarus, they never feared flying ever closer to the sun.”

Salary triples for Goldman CEO Blankfein

Salary triples for Goldman CEO Blankfein
By Agence France-Presse
Saturday, January 29th, 2011

WASHINGTON — US banking powerhouse Goldman Sachs said Friday it was more than tripling the salary of chief executive Lloyd Blankfein to $2 million in 2011 from $600,000 last year.

The four other top executives of Wall Street's premier investment bank will also see their basic salaries triple from the present $600,000: chief operating officer Gary Cohn, finance director David Viniar, and two vice presidents Michael Evans and John Weinberg will each earn $1.85 million, Goldman said in a document published Friday.

Such sums do not include the year-end bonuses which regularly multiply salaries at the top US banks by several times.

Last year Blankfein pulled in a bonus of $9 million.

The Billionaires Are Coming

Friday, January 28, 2011 by The Guardian/UK
by Ed Pilkington in New York

Amid great secrecy, about 200 of America's wealthiest and most powerful individuals from the worlds of finance, big business and rightwing politics are expected to come together on Sunday in the sun-drenched California desert near Palm Springs, for what has been billed as a gathering of the billionaires. They will have the chance to enjoy the Rancho Mirage resort's many pools, spa treatments and tennis courts, as well as walk in its 240 acres away from the prying eyes of TV cameras.

But the organisers have made clear that the two-day event is not just "fun in the sun". This will be a meeting of "doers", men and women willing to fight the Obama administration and its perceived attack on US free enterprise and unfettered wealth.

As the invitation says: "Our goal must be to beat back the unrelenting attacks and hold elected leaders accountable."

The reference to the accountability of America's elected leaders is ironic, bearing in mind that the gathering has been convened by two brothers who have never been elected to public office and are among the most unaccountable and secretive political players in the country.

David and Charles Koch enjoy a combined fortune of $35 billion (£22bn), run the second largest private company in the US, Koch Industries, and are increasingly using their fabulous riches to push their special interests within America's political process.

Yet they do so largely behind closed doors. Nobody knows precisely how much they spend on influencing elections and lobbying Congress, but it is thought to be in the scores of millions of dollars.

By similar vein, the guestlist for their gathering on Sunday is unknown, though those who in the past have attended this twice-yearly event include supreme court judges, rightwing media celebrities such as Glenn Beck and Rush Limbaugh, prominent governors of southern states such as Bobby Jindal (Louisiana) and Haley Barbour (Mississippi), as well as leading figures from Wall Street and energy companies, and titans of industry.

The format of the gathering will be similar to past Koch events, the last of which was held in Aspen, Colorado, in June. The assembled tycoons will talk about some of the Koch brothers' pet horrors — the growth of government and state regulations, what they call climate change "alarmism" and "socialized" healthcare.

Then they will share ideas about how to tighten their grip on politics and the judiciary by shaping election campaigns.

But this year's reception will differ in one important regard: it will have an opposition. For the first time, a coalition of progressive and liberal groups has formed to try to counter the power of the Koch brothers.

The anti-Koch gathering will be staged just down the road from the Rancho Mirage resort. It will hold its own — open as opposed to secretive — panel discussion and a rally designed to highlight what its organizers see as the pernicious impact of the Kochs on the democratic process.

"We want to raise public awareness of the harmful influence of corporate money. The Koch gathering embodies all that we consider damaging to our democracy," said Mary Boyle of Common Cause, a campaign group that has spearheaded the opposition.

Among the panel speakers will be Robert Reich, former US labour secretary under Bill Clinton. He believes the Kochs represent what he calls a perfect storm that is battering American democracy. "This is the worst I've seen it in my lifetime. In the late 19th century, robber barons would deposit bags of silver and gold on the desks of legislators. We've progressed significantly since then, but once again big business is engaging in politics."

The reach of corporate agitators personified by the Kochs has been greatly extended by Citizens United, a landmark ruling by the supreme court in January 2010 that opened the door to corporate spending on political campaigns for the first time since 1947. The ruling led to a splurge of secret outside funding in the 2010 midterm elections in which about $300m was spent, a three-fold increase on 2006.

The Koch brothers made good use of the ruling. Again, how much they invested in the elections is not known, but Americans for Prosperity, the Tea Party-alligned movement founded and funded by the Kochs, has put its own spending at $45m.

Common Cause this week called on the US attorney general to investigate a possible conflict of interest. The group pointed out that two supreme court judges had taken part in strategy sessions in a previous Koch gathering — Clarence Thomas and Antonin Scalia. Both ruled in favour of lifting the ban on corporate political spending, a move that directly forwarded the Koch brothers' political aspirations.

"What we are seeing is a form of legalized bribery," said Rick Jacobs, founder of the Courage Campaign that is participating in Sunday's counter-gathering. "Here are the Koch brothers with their unbridled wealth, using it to shape society as they see fit. It's our obligation to do everything we can to stop them."

Critics of the brothers point out that many of the ways they seek to influence politics serves their own personal and corporate interests. They lobby for lower personal and corporate taxes, which doubly benefits them as individual taxpayers and as owners of a company with an annual turnover of about $100bn.

Since 2006, the Kochs have been the largest political funders of any energy company in the US. They have backed thinktanks and campaigns that have spread doubts about climate change, which suits their purposes as oil and coal magnates who have been named among the top 10 air polluters in the country.

Their sustained fight through the Tea Party movements against government regulations also benefits their multiple concerns, that range from oil pipelines to paper cups, wood, carpets and Lycra.

"I don't want to demonize the Koch brothers personally," Reich said. "But they demonstrate how vast wealth is now being funneled into the political process in secret, undermining our democracy."

Attendees of past Koch gatherings

Justice Clarence Thomas: A member of the US supreme court since 1991, he tends to vote with the majority conservative wing of America's highest judicial panel.

Virginia Thomas, the judge's wife: A lawyer active in rightwing politics, having founded Liberty Central, a group that opposes what it sees as the "tyranny" of the Obama administration.

Glenn Beck: The notorious Fox News commentator is also a successful businessman, earning $32 million last year from his empire of TV and radio shows and books. This week he was the subject of an open letter from 400 rabbis who protested against his persistent references to Nazis and the Holocaust as terms of abuse against left-wing opponents.

Senator Jim DeMint: The senator for South Carolina is one of the most consistently rightwing members of the Senate and a darling of the Tea Party movement. Koch singled out DeMint for praise after the politician vowed to destroy Obama's healthcare reforms.

Fred Malek: A former aide to George Bush, Malek was one of the top fundraisers for the $56m ad campaign that senior Bush adviser Karl Rove unleashed in the 2010 midterm elections, directed against Democratic candidates.

Steve and Betty Bechtel: Some of the many industrialists who have attended past Koch events, they own the largest engineering company in the US, the Bechtel Group.

David Chavern: No 2 at the US Chamber of Commerce, a business coalition that spent up to $75m launching attack ads largely against Democrats in the 2010 midterm elections, twice the amount it spent on the 2008 elections.

Corporations Aren't People, So Why Do They Have the Power of Citizens?

Two anti-corporate activists discuss the abuses of corporate personhood and how we can shake their grip of power off of our democratic process.
By Adrienne Maree Brown and Dani McClain, AlterNet
Posted on January 29, 2011

This conversation is a compilation of talks and emails between two writer-activists. We welcome other voices in the conversation - we decided to share this because we want answers and dialogue in our communities about this issue. There are more questions than answers here, but they feel like crucial questions.
Dani McClain: You've been thinking a lot about corporate personhood and your belief, as you put it, that "the threat is the control of the new world by corporations, who are 'people' and have rights." I want to understand the full implications of what happened a year ago (1/21/10) when the Supreme Court issued its Citizens United ruling -- a decision that unlimited corporate dollars are allowed to influence political campaigns and that money = speech and so is protected by the First Amendment.

Adrienne Marie Brown: Me too! Though I can’t shake the suspicion that the ruling was just formalizing the way things already are. Dick “Halliburton” Cheney is a great example of what a myth it is that corporations and our government are necessarily two separate bodies. Maybe it wouldn’t bother me so much if the language was more honest - “corporate democracy,” or “corporate governance.” But, corporate personhood seems incredibly dangerous and unjustifiable.

McClain: I also want to get better acquainted with the 14th amendment. I'm just learning that corporations have always turned to the 14th amendment (which I've always thought of broadly as the amendmentthat gave formerly enslaved people rights as citizens) to make claims that they have rights on which the government can't trample.

Brown (jaw drops): See, this is why I avoid the news. I adamantly feel like it’s useless to engage in the news cycle unless there’s something I can do. I don’t want to live a reactionary life - our movements spend so much time trying to become overnight experts on the latest scandal or tension, whatever corporate media has decided to focus our attention on. But this is the kind of news that makes me feel like things are happening that deeply impact my future, and even though I am a informed, political person, I am out the loop.

In terms of the ruling, when it happened it wasn’t a surprise. Capitalism is all about individuals competing to amass more than they need (profit) at the expense of humankind and the earth, and corporations are the institutions for that shady behavior*. This feels like a major advance on our rights, one of those foundational rulings that will ultimately reframe politics, from food justice to environmental struggles to joblessness. But how can I approach it in a creative, impactful way?

McClain:I’m glad you bring up your desire to be on the offense rather than reactive. You and I have talked a lot about the importance of giving people a vision that ultimately moves them beyond whatever paradigm the status quo (e.g., the greedy, the exclusionary) set up. Do you think the answer to fighting corporate personhood is passing aconstitutional amendmentto reverse Citizens United? Or is it some psychospiritual or human development response that's outside the realm of policy, legal battles and lobbying in a traditional sense? Instead of looking at the Supreme Court ruling as some "evil" thing that we should mobilize against, do you see it as just another challenge pushing us to evolve and see the issues through a new lens?

Brown: I absolutely see this as a place to practice both/and strategies, with more energy in the realm of developing viable alternatives. Actions speak louder than words, no matter how constitutional the words are, so the majority of our actions should be visionary - building the world we want to see. But there are a lot of people who feel it is irresponsible to not hold the line against the advances of corporate power, and I hear that. I just don't think a constitutional amendment matters that much if most of the people in the country don't understand what's going on. There's such an imbalance of corporate vs. community influence in our government at this point, so it feels like we need a cultural campaign that really highlights for people the potential benefits of elevating human/earth rights in their own lives, and ways to challenge this corporatization of government, of society. People forget that they matter, that their voices should be what’s represented in decisions around their lives.

McClain: But is it possible that democracy has run its course? Between this ruling, the influence corporations have long had on our news media, and the fairly recent practice of threatening filibuster in the Senate to force legislation into a dead end, I'm starting to wonder. What next steps do we need to take to make people feel like they have a role in governance?

Brown:Provocative…I believe that corporate democracy is going to destroy the human race and planet, and if it won't die through global financial crisis then we have to evolve past it. But this is the crux of the issue - democracy is supposed to be government by the people. There's a reasonable argument to be made that we have never actually practiced democracy in the US - we've always had a representative version here, where the decisions are truly made by an “informed”/elite body, not by the people. Grace Boggs always talks about how this is a society where the masses have primarily been seen as a labor force for the elite bodies of this nation, through both agricultural and industrial eras. The people have not been engaged and educated to truly be interested, active participants in the governance of the nation. Now corporations are a new electoral college - they have unlimited capacity to influence elections. "The people" have every reason to feel less and less engaged.

McClain:I wonder whether that’s the case. It’s easy to think that one reason more people aren’t up in arms over the growing influence of corporate power is that they don’t yet see it as a problem. They’re not educated to be engaged, as you suggest. But a few weeks after the Supreme Court issued its ruling, an ABC-Washington Post poll showed that 80% of those surveyed opposed (and 65% strongly opposed) the Citizens United decision. So people are aware and concerned. What can we do with that awareness? How can we harness and direct it?

Brown: Something I learned at Ruckus is that awareness isn't enough. We have to connect people's awareness to their behaviors, to their own lives and choices and the struggles they experience. We have to move people past the inertia of their fear or sense of powerlessness by uplifting the viable alternative. There are so many people who are interested in the process of actual government by the people, but their relationship to it is that of a consumer, watching and reading about what is happening without feeling empowered to engage. The root of that potential power is education. Democracy relies upon education appropriate to the cultural make-up of the country, education that yields a population who can participate in governance, education that grows the capacity of people to thrive.

McClain: I know you find a lot of inspiration in science fiction and that you look to that genre to help generate new thinking around solutions. What would Octavia Butler say about the way corporate power is growing? What solutions would she write into a novel in which people who had for generations gained citizenship by virtue of their humanity and place of birth are slowly edged out of citizenship because they lack access to money?

Brown:Oh, she foresaw this. In the Parables she knew this was coming and warned us, in her way. Her solution was to rethink our purpose as human beings, and change how we live - even if that means leaving what we perceive as safety. Part of why we held the Octavia Butler Symposium at the Allied Media Conference** last year was to explore how we connect ideas like hers to how we are living and organizing in the world. I feel like she did a powerful job, for instance, of challenging the idea that our future lies in the struggle to act as a nation, when our destiny might actually be something much more global, or universal. In her stories, our way to evolve is to leave behind the right-wing politics and struggles of earth and go to space. And that truly makes me pause - is corporate personhood even something to address through national organizing? Are we thinking too small? Look at how much energy we spend now demanding humane policies and programs in a country that still defaults towards borders, prisons, segregation and poverty.

McClain: It’s interesting that a year after the Supreme Court confirmed an interpretation of citizenship that’s broad enough to include corporations, right-wing forces are attempting to narrow its interpretation to exclude natural born citizens who are the children of undocumented immigrants. This is a real fight that’s heating up now, with the new Republican chair of the judiciary committee launching hearings to figure out how Congress can strip the children of some immigrants of their citizenship. So in that context, you raise a really provocative question: Does fighting to retain certain rights as US citizens open us up to the same criticisms that segments of the LGBT movement have faced because of their focus on gaining access to institutions like the military and marriage? Are we fighting our way into retrograde, static spaces? Are there more meaningful battles we should be waging? Or are these questions naive and offensive in the face of people’s immediate needs?

Brown:I tend to believe that struggles for human rights - or living rights which would include people, animals and the planet - are more important and foundational than struggles for national rights, aka citizen privileges. To me there is behavior that we need to root more deeply than national pride, more than something that can be given to you (or taken from you) based on where you are born. Human is what we ARE, our rights are what we grant to each other on the basis of being born, anywhere, period. These national struggles to have equal access to the institutions of the ruling class don't seem to demand that we evolve our own behavior and beliefs.

But I am also aware that I’m always resistant to getting deeply involved in nearly impossible struggles. Corporations can never truly experience the violations of human rights that they inflict on the world…there’s very little accountability. When shamed, they just rebrand. How do we fight that?

McClain: The widespread public concern regarding the Citizens United ruling -- like the groundswell of opposition to the bank bailout -- seems like a clear opportunity to join forces with members of the Tea Party and stand against corporate interests. Should that be a priority? And why are the Republicans so good at convincing (mostly white) people without wealth that their interests are aligned with the wealthiest Americans?

Brown:Ah the Tea Party…these questions posed together are great, getting to the root flaw in us/them thinking. The Tea Party does seem to consist mostly of folks not so different from those on our side - poor to lower middle class, community oriented, even interested in decentralized organizing models (I heard they call The Starfish and the Spider their bible). This is why we must battle ideas and not people. If we start our organizing from the mindset that irresponsible corporations claiming the rights of individuals is bad for all people, we are allowed to see that those are our people - all people are our people. What separates us is ideas, not race, not class (which both grew from ideas into a tangible experience we must call reality), but ideas. Finding the ideas we can align around opens up the space to really evolve beyond a partisan population, only half of whom are voting anyway, where we’re all getting taken advantage of by the same people.

McClain: You’ve mentioned the connection between the corporate personhood debate and the fight for net neutrality. Could you say more about that?

Brown: Yeah that connection occurred to me as I’m learning about the Detroit Digital Justice Coalition. They believe “communication is a fundamental human right”, which got me thinking about where that right is being challenged. The internet is what the town hall or town square used to be - a place to discuss policy and politics and to develop and shape a shared governance and a common culture. It’s multidirectional and open, unlike previous forms of news. The net neutrality debate is ultimately about whether individuals have the right to communicate with each other or not, and whether we have equal access to practice that right. It’s appalling that our government would allow corporations - as corporate persons - to control (or have majority influence over) not only our policies through their unchecked lobbying and political contributions, but also control over who has access to communicate. These plans of fees to access certain sites, monopolies between the largest of those sites/businesses, and profit driving the development of the internet, its just the new colonization.

Fortunately there are warriors in that battle - folks building open source tools, meshed wireless networks that liberate internet access - folks showing us that the internet is another ground of the commons, an unlimited space we can approach with an outlook of abundance that actually isn’t possible when we look at land and the earth’s resources. If we can maintain access long enough, it’s possible that we can carve out a space beyond the reach of corporations. And there are folks fighting corporate personhood, I support their work even as I dig in deeper here in Detroit trying to see what I can build.

McClain:Our conversations remind me to imagine what I’d like our world to look like, rather than focusing solely on which established victories we can’t afford to see chipped away. That’s where my day-to-day focus is -- not losing ground. So thanks for drawing me back to the big picture. It helps give meaning and context to the small steps.

I’ve been reading a book called "The Warmth of Other Suns," a narrative history of the Great Migration, and in some ways it’s reinforcing this idea that you promote: That people’s experiences are much bigger than what policy dictates, and that true self-determination lies in this awareness.

I’ve often thought of the Civil Rights Act (CRA) and the Voting Rights Act (VRA) as mid-20th century legislation that confirmed and gave teeth to the 14th and 15th amendments. And I’ve thought of the CRA and VRA as providing the necessary path for black Americans to live with dignity and full citizenship. But reading the book has made me realize that even before that landmark legislation passed, black people were determined to find a way to live safely and with as much freedom as possible in their country of origin. And if that meant they needed to leave places where Jim Crow was the law of the land and brave some unknown frontier, they often did so. As early as the period following WWI, they did it. They didn’t wait on civil rights legislation or the movement organizers who made the CRA and VRA possible, they voted with their feet and went north or west.

The connection, for me, is the importance of a do-it-yourself, or DIY, culture. The thread through so much of what I hear you say is that a focus on policy and lobbying -- convincing people who control the levers of power to do the right thing -- is not enough. And that even when those tactics achieve a desired goal, they don’t fundamentally change people’s sense of what’s possible or their ability to think beyond the established terms of debate.

Brown:I feel like this exchange is helping me understand why the work I am doing with food justice, digital justice and birth justice needs to be as creative and communal as possible, strengthening non-corporate networks to be resilient in any possible future. We who don't have resources or run institutions are continuously pit against each other, played against each other, Cains and Ables forgetting we are brothers and equals and our very existence is divine. This circles me back around to the power of relationship. We have to build relationships to build communities strong enough to evolve past these omnipotent institutions.

You Can Now Kiss Goodbye Organic Beef, Dairy and Vegetables

The USDA ruled that farmers are now free to plant GE alfalfa, and USDA won't even keep track of who plants it where. The implications are huge.
By Ari LeVaux, AlterNet
Posted on January 28, 2011

Monsanto the devil has been trying for years to gain approval for its genetically modified Roundup-Ready alfalfa seed. On January 27, 2011, it finally got the green light in the form of "deregulation." This means that farmers are free to plant GE alfalfa, and the USDA won't even be keeping track of who plants it where. There will be no tracking, no notification system, and no responsibility on the part of Monsanto the devil for any business that is lost as a result of the genetic contamination that is certain to result. If the ruling stands, we can kiss organic dairy and beef goodbye, and many organic vegetable growers will have to switch the cover crops they use on their fields.

The Center for Food Safety is planning on dragging the issue back to court, where the organization has a good track record in recent years against Monsanto the devil, even in the notoriously business-friendly U.S. Supreme Court, which in June upheld a ban on the planting of Roundup-Ready alfalfa until the USDA drafts an environmental impact statement (EIS).

The EIS was dutifully drafted and released in December 2010. The document airs the concerns expressed by the vast majority of the 200,000-plus comments on GE alfalfa, yet somehow concludes: "...consumer preferences for organic over GE foods are influenced in part by ethical and environmental factors that are likely unrelated to minor unintended presence of GE content in feed crops."

That's quite a use of the word "likely": When the organic rules were drafted in 1997, Big Ag tried very, very hard to include GE products in organic-labeled foods. In response to this attempt, USDA received over 275,000 comments against GE in organics. It was the largest number of comments USDA had ever received on a single issue. How USDA managed to conclude that consumers of organic food are likely unconcerned by contamination of organic products is a mystery -- at least, until we recall that Tom Vilsack, Obama's agriculture boss, used to fly around in a Monsanto the devil corporate jet while governor of Iowa. During that same period he was also named "Governor of the Year" by the Biotechnology Industry Council.

Another word in the above statement that bears scrutiny is "minor," as in "minor unintended presence of GE content in feed crops." While it may be true that the public may in fact be OK with a little "minor" genetic contamination, there's nothing minor about the threat posed by Roundup-Ready alfalfa.

Alfalfa is the main forage crop for dairy cows and one of the principle foods for beef cows, especially grass-fed cattle. Alfalfa is a perennial, easily lasting five years once planted. And it's bee-pollinated, which means each year, every non-GE alfalfa plant within five miles of every GE alfalfa plant will likely be contaminated by GE genes.

According to the Organic Consumers Association, "...the massive planting of a chemical and energy-intensive GE perennial crop, alfalfa [is] guaranteed to spread its mutant genes and seeds across the nation; guaranteed to contaminate the alfalfa fed to organic animals; guaranteed to lead to massive poisoning of farm workers and destruction of the essential soil food web by the toxic herbicide, Roundup; and guaranteed to produce Roundup-resistant superweeds that will require even more deadly herbicides such as 2,4 D to be sprayed on millions of acres of alfalfa across the U.S."

When Tom Vilsack was named Agriculture Secretary by President Obama in late 2008, sustainable food activists felt they had been duped. The appointment followed a flood of opposition that resulted in Vilsack's name being removed from Obama's shortlist of USDA chiefs. This rope-a-dope took the wind out of opposition sails, and foodies let down their guard and began optimistically ruminating on who should run the agency. Then, out of the blue, Vilsack was appointed. Two years into Obama's administration, he appears to embody Obama's centrist approach, praising organic foods out of one side of his mouth while supporting GE foods out of the other, as if the two are separate but equal.

But the deregulation of GE alfalfa throws the possibility of coexistence out the window. And if history is any guide, the victims of genetic contamination will not only have no legal recourse, but they will face being sued by Monsanto the devil for illegal use of its patented genes.

The battle lines drawn on the issue of GE alfalfa highlight a fracture in the organic movement that could be described as between the "haves" (well-funded, politically connected groups and businesses that have forfeited their voices for the sake of politics and money) and the "have-nots" (small, grassroots groups and individuals, unbeholden, who speak their minds). The haves include Whole Foods and other major retailers of organic food, as well as producers like Organic Valley and Stonyfield Farms.

While the decision-makers in these companies may oppose GE food in their hearts, they've made the calculated business decision to cave on the issue in hopes of assurance that attempts at keeping GE alfalfa separate from non-GE alfalfa will be made. According to a January 24 statement from Whole Foods, "The policy set for GE alfalfa will most likely guide policies for other GE crops as well. True coexistence is a must."

Given that public sentiment is overwhelmingly against genetically engineered food, it's not surprising that the Monsanto the devils and Forage Genetics of the world are against labeling. What's telling is that retailers like Whole Foods also oppose labeling foods that have GE ingredients. Instead, the company has thrown its weight behind the effort to label foods that do not contain GE ingredients. This may sound like the same thing, but as Norman Braksick, president of Monsanto the devil subsidiary Asgrow Seed Co., once said, "If you put a label on genetically engineered food you might as well put a skull and crossbones on it."

The Organic Consumer Association asserts that two-thirds of Whole Foods' product line is not organic, which means they could be contaminated by GE genes. It's no surprise Whole Foods doesn't want to put what amounts to a skull and crossbones on two-thirds of its products. Kristina Hubbard, director of advocacy for the Organic Seed Alliance, says that while hers and other organic watchdog groups oppose GE alfalfa, it's important to remember that conventional farmers are also put at risk by the ruling. Via email she told me:

"We believe USDA's decision to deregulate alfalfa puts the integrity of organic and non-genetically engineered seed, and thus the integrity of organic food, at risk. While the media paints this as organic versus biotechnology, it's important to note that conventional producers, including exporters, also feel threatened by GE alfalfa. In fact, the lead plaintiff in the alfalfa lawsuit is a conventional seed producer. I represent organic interests at OSA, but I've noticed that more conventional stakeholders are standing up in opposition to GE alfalfa than any other GE crop type (i.e., corn, soy, etc.) that has been deregulated."

This is an important point, but while individual conventional farmers are among the victims of genetic contamination, the organic industry as a whole is threatened by USDA's deregulation of GE alfalfa.

By deregulating its first perennial crop, which happens to be a bee-pollinated plant that is the foundation for the organic dairy and beef industries, USDA is breaking ground that cannot be easily repaired. Widespread genetic contamination has for years been threatening to make the entire GE discussion mute, because once everything is contaminated there will be nothing pure left to protect. In the same way, GE alfalfa threatens to make the whole idea of organic mute. Or at the very least, finally bring about the biotech industry's long-desired change of the organic standards to include GE ingredients. Once non-GE crops become impossible to find, what choice will we have?

New Hope for Bridging America’s Economic Divide

by Dedrick Muhammad and Chuck Collins

The civil rights movement ended the legal basis of white supremacy in the United States several decades ago yet vast inequalities of wealth still persist, making equal rights a stubbornly elusive goal. There have been modest advances in reducing the black-white income gap. But if African American incomes continue to rise in the future at the same rate as they did between 1968 and 2001, it would take 581 years for black America to reach income parity with white America.

In 2004, the median family net worth of African Americans was $20,400, only 14.6 percent of the median white family net worth of $140,700. The median net worth for Latino families was $27,100.

Our nation needs to make a dramatic reinvestment in broadening wealth and opportunity for Americans who have been historically left out of prosperity. Massive government investments of the past that helped reduce the income gap, such as the nineteenth-century Homestead Act and post–World War II veterans and housing benefits, were effectively “whites only.” Since the end of legal discrimination in the 1960s, there has not been a similar mass investment in economic opportunity that African Americans and other people of color could benefit from as equal citizens.

Where Wealth Originates

One barrier to new programs that could elevate the economic standing of lower-income Americans is a widespread misunderstanding of how private wealth is created. Both the media and popular mythology extol rich people as the best and brightest, with the assumption that they made it on their own. Yet no one amasses wealth entirely alone. In truth, many, if not most, wealthy Americans inherited a substantial portion of their net assets. And even for those who did not, private wealth (savings, home ownership, investment wealth) was created from a combination of individual enterprise and the commons.

The story of wealth creation in the United States needs to be revisited from the perspective of both race and the commons. There is a long and unseemly history of the U.S. government channeling common wealth to expand the individual wealth and opportunity of the most privileged citizens, almost all of them white.

Even before the existence of the United States as a nation, Europeans confiscated and enclosed land and natural resources from indigenous peoples, creating the base of wealth on which our modern economy was built. Similarly, the United States— often through military intervention—appropriated the resources of foreign people.

Black laborers—first slaves, later sharecroppers and low-wage workers—have generated immense wealth for the richest white Americans and gotten very little in return. While workers of all ethnicities have been exploited, African Americans, along with other minorities, were systematically singled out for the lowest pay, worst working conditions, and greatest environmental impact on their communities. We can look back at the robber-baron fortunes of the industrial revolution, which were amassed by white elites who gained free access to the nation’s commons resources to exploit for personal enrichment. Companies, buildings, and charitable institutions still carry the names of the individuals who cornered markets built on the natural commons, including oil, timber, and minerals, as well as socially created wealth, such as railroads and the stock markets.

But even the historical government programs most celebrated for boosting the fortunes of ordinary citizens generally excluded Latinos, Asians, Native Americans, and especially African Americans. The Homestead Act, the most extensive nineteenth-century program for creating family wealth, expropriated indigenous people’s lands and enclosed large tracts of common property to grant private property titles to white homesteaders.

Affirmative Action for White People

In the twentieth century, the programs of the New Deal and GI Bill are often praised as bold initiatives to expand the American middle class. But as Ira Katznelson chronicles in When Affirmative Action Was White, Social Security, the educational benefits of the GI Bill, and home-ownership programs of the 1950s all deepened the racial wealth divide.

These programs were designed by a Congress in which white supremacists still wielded wide power, and in many states they were implemented so as not to upset local white rule. As a result, the first two decades of Social Security excluded agricultural and domestic workers, occupations disproportionately held by African Americans. During World War II, African Americans faced unequal treatment in the segregated military and were less able to access the bountiful benefits of the GI Bill upon their return.

The postwar economic boom was fueled by subsidized housing assistance to more than 35 million Americans between 1948 and 1972 in the form of VA and other federal loan subsidies. The biggest beneficiary was “whites only” suburbia, which also benefited the most from mortgage interest tax deductions.

Due to economic inequality and various racist practices—such as redlining, bigoted realtors, and outright racist violence used to maintain segregated neighborhoods—most African American families were excluded from this huge infusion of government investment in the middle class. By 2004, 76 percent of whites owned their own home, compared to 49.1 percent of blacks and 48.1 percent of Latinos.

Today, the children and grandchildren of GI Bill recipients benefit from intergenerational wealth transfers that enable them to purchase homes, attend top colleges, and start businesses. But they probably don’t think of themselves as beneficiaries of “white affirmative action.”

It will be difficult to overcome this gaping racial economic divide if we ignore the role of the commons in creating wealth. We must start with the seldom recognized premise that much of what we consider personal wealth derives from common wealth.

Yet the American myth endures that people’s level of wealth is a reflection of their individual effort and achievement. As long as privileged whites believe their wealth derives largely from their own effort, it will be difficult to build political support for an inclusive initiative to spread economic opportunity more widely.

In The American Dream and the Power of Wealth (Routledge, 2006), sociologist Heather Beth Johnson interviewed more than two hundred privileged white families about their attitudes toward family wealth. While these individuals acknowledged the role that financial support from their parents made in providing their children and themselves with tremendous educational advantages, they still deeply believed that one’s station in life is determined by individual effort. These interview subjects saw no relationship between the privileges offered by their own wealth and the inability of others to achieve the American Dream.

Anyone who boasts that they are selfmade is ignoring the crucial role of common wealth in creating personal riches. Individual initiative matters, of course, but is often akin to adding the cherry and whipped cream to the top of the existing sundae of common wealth.

Our best hope for eliminating the historical racial wealth divide lies in people recognizing that each of us has a birthright to share in the bounty of the commons for our sustenance and livelihood. People chafe at the notion of “giving people something for nothing.” Yet we don’t think twice about corporations and generations of privileged families growing rich from the commons for nothing.

Even white middle-class achievement needs to be understood in the context of preferential access to government programs and common wealth that was built on behalf of and through the efforts of all Americans, some of whom have not benefited from their own efforts.

Common Wealth for the Common Good

While private wealth is distributed unequally, common wealth belongs to all, and its benefits should, wherever possible, be universally shared. Income from commons-based resources should be used to reduce inequality and expand opportunity. At the same time, common wealth should be managed not just on behalf of those living now, but also on behalf of future generations. Each generation has an obligation to preserve its shared inheritances and pass them on, undiminished, to the next.

Collectively we have a pretty good sense of what needs to be done to broaden opportunity and at the same time remedy the inequality created by whites-only programs, which were successful in improving the opportunities for a segment of the population. Here are some practical ideas on how we can share the wealth of the commons, which rightfully belongs to all Americans:
  • Debt-free higher education, like the ear- lier GI Bill and Pell grants that enabled millions to graduate from college with- out deep debts.
  • KidSave accounts, such as the proposal to grant every child born in the United States a tax-free inheritance of $5,000. Something similar is already done in the United Kingdom. When the child reaches eighteen, these funds (which have earned interest over nearly two decades) can be withdrawn for educa- tion, first home purchase, or starting a business.
  • Expanded home ownership, through various first-time home owner programs, such as soft second mortgages and subsidized interest rates.
  • Annual dividends to supplement wages. Alaska residents receive an annual dividend from the Alaska Permanent Fund, a portion of the state’s oil wealth. Other sources of commons wealth could be used to fund similar state or federal programs.
  • Establishment of “community wealth- building” funds—pools of capital to provide support for community development corporations, nonprofit hous- ing organizations, employee-owned firms, social enterprises, community land trusts, and other efforts that help people in underprivileged communities gain financial assets.
  • Commons-based revenue invested in programs that expand opportunity. In Texas, a percentage of oil wealth contributes to several trust funds that pay for K-12 and higher education.
How to Pay for Justice?

How will we pay for these wealth-broadening initiatives? It makes sense to fund these efforts by harnessing income from commons-based sources. 

Paying the Owners (All of Us) for Using Natural Resources

Historically, polluters have dumped their waste into the natural commons without cost. If we charge for the use of our shared natural resources, we create both incentives to reduce pollution and a revenue stream for programs like those described above. This is at the heart of the commons-based cap-and-dividend proposal to curb climate change.

Common Wealth Recycling Program

If we recognize that large accumulations of private individual wealth came from using the commons, then it’s obvious that we should tax inheritances more aggressively. There is also a moral rationale for taxing inheritances. Wealth created from the bounty of the commons may be temporarily claimed by individuals, but at some point much of it should return to society as a whole to be recycled into opportunities for others. Inheritance taxes could be dedicated to a 
Wealth Opportunity Fund to serve as a source for several of the uses de- scribed above.

Socially Created Wealth Captured by Corporations

The wealth of most corporations, like individuals, was generated thanks to commonly held resources. Peter Barnes, author of 
Capitalism 3.0, outlines the many often unacknowledged ways this happened. First, we grant them special privileges that are not available to real human beings, such as limited liability and perpetual life. We supplement these gifts with other socially created privileges, such as patents and copyrights that enable them to charge higher prices than a truly competitive market would allow. On top of that, society provides public infrastructure—roads, the Internet, regulated capital markets, and trade policies—that greatly enhances corporate wealth. And even more, we often give corporations commons resources worth billions: land to railroad companies, minerals to mining companies, the airwaves to broadcasters, pollution rights to polluters.

We rationalize these lavish gifts by arguing that corporations create jobs and strengthen our economy. But in reality, most of these benefits flow to privileged elites who own most of the corporation’s stock and are disproportionately white. Corporations historically paid back a portion of this through corporate income taxes, but over recent decades this contribution has shrunk to almost nothing for some of the country’s most profitable enterprises. Barnes proposes a levy on corporate wealth, placing a percentage of stock into an American Permanent Fund, to be managed on behalf of the common good.

The idea of the commons provides us with a new lens and a host of practical measures to reduce the racial wealth divide and remedy centuries of exclusion of African Americans and other people of color from America’s common wealth.
Excerpted from the newsletter Poverty and Race, published by the Poverty & Race Research Action Council. Printed in All That We Share: A Field Guide to the Commons edited by Jay Walljasper, © 2010 Jay Walljasper, published by The New Press, reprinted with permission.

Did Congress Approve America's Longest War?

Congress did empower the president in 2001 to pursue al-Qaida in Afghanistan. But a decade later, where's the oversight?
by Bruce Ackerman and Oona Hathaway

Friday, January 28, 2011 by The Guardian/UK

President Obama's state of the union was quickly followed by a second one in Afghanistan. President Karzai finally convened the newly-elected parliament with a Kennedyesque "Ask not what Afghanistan can do for you, ask what you can do for Afghanistan." He had been resisting American pressure to open parliament for months, preferring to rule by presidential decree. His capitulation marks a big success for the Obama administration.

Yet the administration's enthusiasm for checks-and-balances stops at the Afghan border. When President Obama dropped a word about Afghanistan in his own address, he spoke as if Congress were merely a passive bystander. He repeated his early decision to begin withdrawal this coming July, but failed even to mention that the troops' final departure would be delayed until 2014, and that Vice President Biden has suggested that we would be continuing to provide support, of an unspecified kind, long afterwards - all without involving Congress .

Obama is not Bush. He doesn't assert that the constitution gives him the unilateral power to make war and peace. Nevertheless, we have been so traumatised by the Bush years that we haven't seriously probed the basis of Obama's continuing assertion of unilateral power. Make no mistake: Obama is not simply winding up a war he did not start; he has expanded it - bringing in more troops than ever before.

Meanwhile, Congress is nowhere to be found. The only time Congress joined in making big decisions was shortly after 11 September 2001, to authorise the presidential use of force against those who "planned, authorised, committed, or aided" the terrorist attack. This was intended to destroy al Qaeda and deprive it of its sanctuaries in Afghanistan. But 10 years onward, this justification is wearing thin. Osama bin Laden is almost certainly in Pakistan, not Afghanistan, along with most of the remaining members of al Qaeda. Indeed, CIA director Leon Panetta has publicly stated that there are only 50 to 100 members of al Qaeda in all of Afghanistan. Would the 2001 resolution continue to apply even if there were only one member of al Qaeda left in the country?

Of course, the congressional resolution also sweeps more broadly to include those who "aided" the attack. In 2001, this surely included the Islamic Republic of Afghanistan controlled by the Taliban. But Karzai and his parliament are now governing the country under an entirely different constitution. We are helping them fight a wide variety of insurgents - including the Haqqani network, Hezb-e-Islami Gulbuddin and Quetta Shura Taliban, to name but the most prominent. But it's a big stretch to say that they are all part of the very same entity that "aided" the 11 September 2001 attack. What's more, almost all the insurgent leaders - including the notorious Taliban leader Mullah Mohammed Omar - are in the tribal areas of Pakistan, not Afghanistan. Is this really the basis of Obama's right to determine the future conduct of America's longest war?

If the answer is yes, it raises a deeper question. Such a loose construction threatens the complete destruction of our constitutional system of checks and balances when it comes to its most important decision: the decision to make war. When Congress responded to the tragedy of the twin towers, it was authorising a limited war in Afghanistan - not a 100-year struggle against terrorism-in-all-its-forms. By pretending otherwise, we are speeding down a slippery slope that cuts future Congresses out of all serious participation in the big decisions on war and peace.

At least Dick Cheney, John Yoo and other Bush apologists were candid in their revolutionary claim that the constitution gave the president exclusive power. This shocker provoked a broader appreciation of the high stakes involved, and helped catapult Obama to the presidency. It would be very sad if the Obama administration managed to consolidate Bush's unconstitutional power-grab by making it seem that a single decision a decade ago sufficed to displace Congress for the indefinite future.

Revolution Is in the Air but US Sticks to Same Old Script

Friday, January 28, 2011 by The Sydney Morning Herald (Australia)
by Paul McGeough

Events in the Middle East are moving too fast for the Obama administration to think it can get away with Plan A and Plan B reaction strategies according to the regimes or leaders it wants to keep in and out of power.

Consider the response of the US Secretary of State, Hillary Clinton, to Hezbollah tightening its grip on power in Lebanon this week - Washington might have to pull its funding worth hundreds of millions for Lebanon, her office warned.

But as democracy demonstrators were confronted by thousands of baton-wielding policemen in the streets in Cairo, there was no mention of pulling the $US2 billion-plus cheque that Washington writes for the octogenarian President, Hosni Mubarak, each year.

Instead, a rhetorical nugget that Mubarak's mouthpieces would use in their defence - ''our assessment is that the Egyptian government is stable'' and then some namby-pamby words about how Mubarak was ''looking for ways to respond to the legitimate needs and interests of the Egyptian people''.

That response came on Wednesday - more thugs in and out of uniform in the streets, more tear-gas and 860 more young Egyptians banged up in prison because, Oliver-like, they had the audacity to stand in the streets and to ask for more. Such is stability.

Undaunted, Clinton tried again on Wednesday, when she called on the Egyptian authorities to cease blocking the communications on which the demonstrators relied. But on Thursday the Twitter and Facebook websites were inaccessible and mobile-phone users in Cairo said that it was difficult or impossible to sent text messages.

Clinton uttered the ''stability'' line early in the week - before the seriousness of what is unfolding in the streets of Cairo and Alexandria came in to focus. Consider how it might be interpreted by ordinary Egyptians - the human rights of 80 million people have been trampled for 30 years but what the US Secretary of State is most concerned about is the stability of the state.

And, even as the focus sharpened, the administration refused to tell the truth about the despot upon whom Washington relies - ''Egypt is a strong ally,'' the White House press secretary, Robert Gibbs, replied when asked if the administration still supported Mubarak.

And, in a week in which the Middle East's historic self-started wave of democracy protests came to a head, Barack Obama might have used his State of the Union address to cheer along all the protesters; and perhaps to warn all the leaders, country by country, of the fate that awaits them.

Instead he confined his specific remarks to Tunisia, saying: ''The United States of America stands with the people of Tunisia and supports the democratic aspirations of all people.'' So, in a region of 333 million people, where to varying degrees a good 325 million are under the heel of unelected leaders, the US President addressed only little Tunisia.

The lame excuse offered to reporters was that Cairo erupted late in the drafting process of the speech but that last ''aspirations of all people'' phrase was a recognition that ''what happens in Tunisia resonates around the world''.

By current American thinking it would never do to have Islamists in power in the Palestinian Occupied Territories or in Lebanon and therefore they heed every despot's warning that the Islamists are waiting in the wings across North Africa and the Middle East.

But lost in the lunge to protect US strategic and commercial interests by propping up the region's dictator class is any realisation that that support is what leaves the youth of the region under-educated and under-employed and, thereby, ripe for the picking by Islamist and other underground movements.

In Tunisia the revolutionaries are still searching for a leader who can articulate their demands. And this week a leader flew in to Cairo - searching for a revolution. That was the former International Atomic Energy Agency chief Mohamed ElBaradei, whose return to Egypt underscores a challenge brought on across the region as much by the local community as the international community - the grooming of those who might form a half-decent opposition.

Tracing an arc through Obama's approach to the Middle East, the Johns Hopkins School of Advanced International Studies professor Fouad Ajami described the President's foreign policy pragmatism as ''a break of faith with democracy''.

Alluding to the suppression of demonstrations in Tehran after the contested 2009 presidential election, he wrote in Lebanon's Daily Star: ''American diplomacy was not likely to alter the raw balance of power between the regime and its democratic oppositionists. But the timidity of American power and the refusal of the Obama administration to embrace the cause of the opposition must be reckoned one of American foreign policy's great moral embarrassments.''

The Mubarak machine's contempt for popular aspirations and whatever the US might think of them was on full display yesterday when Safwat el-Sherif, the head of the ruling National Democratic Party, feigned obliviousness to the reality of political power in Egypt as he lectured the protesters - ''democracy has its rules and process - the minority does not force its will on the majority''.

Abdel Moneim Said, a stooge government-appointed publisher, echoed Hillary Clinton's midweek ''stability'' comment when he told reporters: ''I can't think of anybody that I know that has any concern about the stability of the regime.''

Finding the right policy mix to influence events without being accused of interfering is a fine balance that some observers have concluded eludes the Obama administration.

''It's about identifying the US too closely with these changes and thereby undermining them; and not finding ways to nurture them enough,'' Aaron David Miller, of the Woodrow Wilson International Centre for Scholars, told The New York Times.

Meanwhile, observers on the ground in the region shake their heads. ''People want moral support,'' said Shadi Hamid, of the Brookings Doha Centre. ''They want to hear words of encouragement - right now they don't have that. They feel the world doesn't care and is working against them.''

His point seems to be this: it is time Washington thought in terms of investing in people in the region, not in dictators.

Mass FBI raids target pro-WikiLeaks ‘Operation Payback’

By Eric W. Dolan -  Thursday, January 27th, 2011

Following the arrest of five people in Britain in connection with the "Operation Payback" cyber-attacks in support of WikiLeaks, the FBI announced mass raids across the United States in connection with the case.
"FBI agents today executed more than 40 search warrants throughout the United States as part of an ongoing investigation into recent coordinated cyber attacks against major companies and organizations," a bureau press release states.
Though the bureau did not say if any individuals were arrested during the raids, it did confirm a link between the US raids and the arrests in Britain. The bureau said suspects, if charged, could face up to 10 years in prison.
The police actions indicate that governments on both sides of the Atlantic are determined to prevent hacktivists from taking revenge against companies that ceased to do business with WikiLeaks following the release of US State Department cables late last year.

Five men have been arrested in the United Kingdom for their involvement in "recent and ongoing" attacks by an online "non-group" of hacktivists that calls itself "Anonymous."
Three teenagers aged 15, 16 and 19 along with two men, aged 20 and 26, were arrested by authorities Thursday morning in connection with offenses under the Computer Misuse Act, BBC News reported.
"These arrests, and comments by ACPO threatening 'more extreme tactics' to deal with hacktivists represent a worrying ratcheting up of confrontation," Loz Kaye, Leader of Pirate Party UK, said in a statement. "Many in the online community frankly feel under siege. It is time for engagement from mainstream politicians, or otherwise radicalization can only increase."
In a campaign known as "Operation Payback" those participating in "Anonymous" succeeded in taking down the online operations of PayPal, MasterCard Worldwide, Visa, Swiss bank PostFinance and others using a technique called "distributed denial of service" (DDoS) attacks. The companies were targeted after they dropped their financial services to WikiLeaks.
DDoS attacks flood websites with meaningless web traffic to slow them down and can knock websites offline entirely.
Using Twitter and Facebook, "Operation Payback" invited thousands of people to voluntarily install a tool called LOIC (Low Orbit Ion Cannon), which was used to perform DDoS attacks on selected websites.
"As traditional means of protest (peaceful demonstrations, sit-ins, the blocking of a crossroads or the picketing of a factory fence) have slowly turned into nothing but an empty, ritualised gesture of discontent over the course of the last century, people have been anxiously searching for new ways to pressure politicians and give voice to public demands in a manner that might actually be able to change things for the better," the group said in a statement (.pdf).
"Anonymous has, for now, found this new way of voicing civil protest in the form of the DDoS, or Distributed Denial of Service, attack."
"Anonymous" noted that, unlike hacking, DDoS attacks do not involve "unauthorized access to a computer or network." Evgeny Morozov, a visiting scholar at Stanford University, compared DDoS attacks to a digital sit-in. "Both aim at briefly disrupting a service or an institution in order to make a point," he said. "As long as we don't criminalize all sit-ins, I don't think we should aim at criminalizing all DDoS."
"It is clear then, that arresting somebody for taking part in a DDoS attack is exactly like arresting somebody for attending a peaceful demonstration in their hometown," the statement continued. "Furthermore, the maximum sentence these 5 anons could be given under the Computer Misuse Act is 10 years imprisonment and a fine of up to £5000. We want you to realize just how ridiculous these sentences are, especially given the exact nature of a DDoS attack."
In early December, a Dutch teenager was arrested for participating in the cyber attacks. Unconfirmed sources said that the 16-year-old boy operated an "Operation Payback" chat room and was known under the nickname "Jeroenz0r."
Researchers in the Netherlands, at the University of Twente, found that using the LOIC exposed users to being identified unless traffic was routed through anonymous relay software, like Tor.
'Anonymous' takes aim at government websites
Late December, the Zimbabwe African National Union (Zanu-PF) website, Zimbabwean government website and Zimbabwean Finance Ministry website, were all targeted by "Anonymous" after Zimbabwean President Robert Mugabe's wife, Grace Mugabe, sued a newspaper for publishing a WikiLeaks cable that alleged she was connected with illicit diamond trade.
After successfully attacking the websites of the Zimbabwean government, "Anonymous" defaced the website of the Tunisian government with an open letter critical of the nation's censorship of the web.
"Remember, remember, that the tighter you squeeze the more your citizens shall rebel against your rule," the open letter stated. "Like a fistful of sand in the palm of your grip, the more you squeeze your citizens the more that they will flow right out of your hand."
Massive pro-democracy protests in Tunisia eventually forced Tunisian President Zine El Abidine Ben Ali to flee to Saudia Arabia.
On Wednesday, "Anonymous" expressed their support for protesters in Egypt by calling for cyber attacks on websites run by the Egyptian government.
Tens of thousands of demonstrators took to the streets across Egypt this week, facing down a massive police presence to demand the ouster of President Hosni Mubarak in protests inspired by Tunisia's popular uprising.
After reports said that social media websites Twitter and Facebook had been restricted in the country, the "Anonymous" Facebook page "Operation Egypt" issued a dire warning to the Egyptian government.
"To the Egyptian Govt : Anonymous challenges all those who are involved in censorship," the group wrote. "Anonymous wants you to offer free access to uncensored media in your entire country. When you ignore this message, not only will we attack your govt websites, we will also make sure that the international media see the horrid reality you impose on your people!"

Republicans look to privatize Medicare

(And this will include another Democrat capitulation, I'm certain.--jef)

GOP conference chairman: Medicare & Social Security is 'a cruel Ponzi scheme'
By Sahil Kapur
Friday, January 28th, 2011

WASHINGTON – House Republicans would support a plan to privatize Medicare in their annual budget, a member of the GOP leadership said.

Texas Rep. Jeb Hensarling, the House Republican Conference Chairman and second-ranked GOP member of the budget committee, made the revelation during a panel discussion, according to the National Journal.

"Unless you deal with Medicare, unless you go into Medicaid, unless you deal with Social Security for future generations—programs that were a great comfort to my grandparents and parents are morphing into a cruel Ponzi scheme for my 8-year-old daughter and my 7-year-old son," Hensarling said.

Social Security and Medicare are self-financed retirement security programs that taxpayers are required to pay into throughout their working lives.

The to-be-proposed GOP budget measure closely mirrors a provision in the high-profile "roadmap" put forth by budget committee chairman Rep. Paul Ryan (R-WI), which would turn Medicare into a program of vouchers whose value gradually diminishes over time, and largely privatize Social Security.

"You can’t get there from here without those kinds of reforms," Hensarling said, "so I expect it to be in the budget, I hope it’ll be in the budget, and I would certainly support it."

A Gallup poll released Wednesday found that 61 percent of the public opposes cutting Medicare, as opposed to just 38 percent in favor.

After regaining control of the House this month, top Republicans championed Ryan's "roadmap," which would end Social Security and Medicare in their present forms and eventually turn them over to the private sector.

Democratic leaders shot back with a forceful posture on the popular safety-net programs.

“Republicans are trying to carry out their plan to end Social Security and Medicare," said Jon Summers, spokesman for Senate Majority Leader Harry Reid (D-NV). "In public, Republicans are trying to distance themselves from this extreme plan because they know hard-working Americans don’t want to see Social Security and Medicare ended. But they should stop trying to hide the ball, and just come out and say what has become perfectly clear: that ending Social Security and Medicare is now the official position of the Republican Party."

Sen. Chuck Schumer (D-NY), the third-ranking Democrat in the chamber, also chimed in.

"Anyone who doesn't think privatization will mean severe cuts to Medicare benefits, I have a bridge I'd like to sell them," he said, according to The Associated Press. "Privatization will make the cuts previously proposed by either party look tame."