Saturday, February 5, 2011

Ron Paul Announces Subcommittee Hearing On The Federal Reserve’s Impact on Unemployment

Ron Paul Announces Subcommittee Hearing On The Federal Reserve’s Impact on Unemployment
February 2, 2011

WASHINGTON: Domestic Monetary Policy and Technology Subcommittee Chairman Ron Paul announced today the Subcommittee will meet for a hearing to examine the impact of Federal Reserve policies on job creation and the unemployment rate. The hearing will be held on Wednesday, February 9th at 10 am in room 2128 Rayburn.

Subcommittee Chairman Paul said, “I’m very pleased to hold our first subcommittee hearing in the new Congress on a topic that could not be more critical, namely unemployment. Despite enormous amounts of monetary and credit expansion by the Federal Reserve in recent years, the nation’s unemployment picture remains bleak. While many focus on the impact of fiscal policies on employment, the effect of monetary policy often goes unexamined. In my view we are now experiencing the bust that inevitably results from the misallocation of capital and human resources in a period of artificially cheap credit. It is important to understand the Federal Reserve’s role in creating today’s unemployment crisis, while also highlighting that high unemployment and low economic growth can persist even in the face of tremendous monetary inflation.”

The Federal Reserve has taken unprecedented action to provide liquidity to financial markets and some U.S. corporations; however, unemployment remains above 9 percent. The hearing, entitled Can Monetary Policy Really Create Jobs?, will focus on the Fed’s recent actions, the likelihood those actions will reduce unemployment, and the critical role of the private sector in job creation.

While the Obama administration and Democrats in Congress believe increased government spending will improve the nation’s economy, Republicans on the Financial Services Committee know economic growth depends on providing the private sector, especially small businesses, with the certainty they need to create jobs. The Fed’s policies, as well as the Obama administration’s unsustainable debt and spending, continue to prevent small business owners from growing and hiring because of continued uncertainty over new taxes, higher interest rates, and the expanding role of government in the economy.

On November 3, 2010, the Federal Reserve announced that it planned to purchase $600 billion in long-term Treasuries (dubbed “QE2”). This is the second time since the 2008 financial crisis that the Federal Reserve has engaged in quantitative easing. The latest round of quantitative easing, along with the Fed’s action to bailout financial companies, has added trillions of dollars to the government balance sheet.
Witnesses will be announced at a later date.

Persons Not In Labor Force Who Want Job Now Jumps To All Time Record

by Tyler Durden on 02/04/2011

Probably the last chart to bury any doubt about just how truly horrible today's employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12.8% if they were in the labor force (and, as indicated, looking for a job).

How to Get America Back to Full Employment

Why a high employment economy is the best tool for fighting poverty.
By Robert Pollin, Boston Review
Posted on February 4, 2011

Employment conditions in the United States today, in the aftermath of the 2008–09 Wall Street collapse and worldwide Great Recession, remain disastrous -- worse than at any time since the Depression of the 1930s.

Since Barack Obama entered office in January 2009, the official unemployment rate has averaged more than 9.5 percent, representing some fifteen million people in a labor force of about 154 million. By a broader definition, including people employed for fewer hours than they would like and those discouraged from looking for work, the unemployment rate has been far higher -- 16.5 percent, on average. Still worse, if we count people who have dropped out of the labor force, unemployment would rise to nearly 20 percent, or 30 million people, roughly twice the combined populations of New York, Los Angeles, and Chicago.

The first major act of the Obama administration was the economic stimulus -- the American Recovery and Reinvestment Act -- which focused on fighting the recession and mass unemployment. This $787 billion program of tax cuts and government spending measures aimed to brace the economy’s rickety floor and thereby preserve existing jobs as well as generate new ones in both the public and private sectors. The stimulus program did succeed in preventing a full-scale 1930s-style depression. A Wall Street Journal survey found that 75 percent of economists agreed that the stimulus succeeded in reducing unemployment. A detailed study by Alan Blinder, a Princeton economist and former Federal Reserve Vice Chair, and Mark Zandi, Chief Economist at Moody’s Analytics and an advisor to John McCain’s Presidential campaign, found that unemployment would likely have risen to nearly 17 percent in the absence of the stimulus.

But the stimulus has clearly proven inadequate for fully reversing the effects of the Wall Street collapse. Combined with the huge decline in tax revenues tied to the recession, the stimulus spending has also generated federal fiscal deficits of a magnitude the United States hasn’t seen since World War II -- around $1.4 trillion in 2009 and 2010, or 10 percent of GDP each year. Bringing the U.S. economy, along with most of the rest of the world, out of the deep ditch into which Wall Street has shoved it will clearly be a long, hard struggle.

New rounds of major job-generating measures are crucial to the task of reversing the recession and driving down unemployment. These measures will involve both government spending and, equally important, financial-market regulations and incentives intended to force credit markets away from hyper-speculative practices and toward productive, high-employment investments. Such proposals fly in the face of the rising mantra in Washington and Europe in favor of fiscal austerity and business deregulation.

But beyond the challenges in advancing such short-term programs, there is a broader and longer-term goal that is not even on the agenda: creating and sustaining a full-employment economy in the United States. Especially at this historical juncture, as we attempt to grope our way out of the Great Recession and onto some kind of new growth trajectory, we need to be clear on the centrality of full employment as a policy goal. That is, we need to think about what exactly we mean by full employment; on why, properly defined, full employment is so fundamental to building a decent society; and on what kind of longer-term policy innovations will be needed both to get the U.S. economy to full employment and, once there, to stay. Success in answering these questions will necessarily engage large numbers of people coming at the issue from a wide range of perspectives. My proposals here are aimed at energizing this broader debate in fresh and constructive directions.

Why Full Employment?

There are good reasons to seek full employment -- good reasons for individuals, families, and the economy as a whole. Equally important, as we will see later, creating a full-employment economy can be joined effectively with another fundamental policy aim: ending our dependence on fossil fuels and creating an economy powered by clean energy.

From the individual’s standpoint, whether one can get a job -- and if so, whether that job offers decent pay and benefits, a clean and safe environment, and fair treatment for oneself and one’s coworkers -- matters a lot. Money is the most obvious consideration. But beyond the money, a job is also crucial for establishing a person’s sense of security and self-worth, health and safety, ability to raise a family, and chances to participate in the life of the community.

An abundance of job opportunities is also crucial to an economy’s overall health. As employment levels rise, so does total purchasing power in the economy since people have more money in their pockets to spend. This means more buoyant markets, greater business opportunities for both small and large firms, and strong incentives for private businesses to expand their operations. An economy that supports an abundance of decent jobs will also promote individual opportunity and equality because this kind of economy offers everyone the chance to provide for themselves and for their families.

For these reasons, a high-employment economy is also the best tool for fighting poverty. We saw this vividly in the United States in the late 1960s when the Kennedy-Johnson tax cut and Vietnam-related government spending brought unemployment below 4 percent. This high-employment economy brought rising wages across the board, better working conditions, and less job discrimination against women, African Americans, and other historically marginalized populations.

An economy operating at full employment has the capacity to deliver great individual and social benefits. Why then doesn’t everybody agree that this should be a fundamental goal of public policy, with debates focused on the narrower question of the most effective means of achieving it?

In fact, after the Great Depression and World War II, creating full-employment conditions was the focus of economic policy throughout the world. The level of commitment to this goal did vary substantially according to country and political parties in power, but it was not until the high-inflation period of the 1970s and subsequent neoliberal revolution -- marked most decisively by the elections of Margaret Thatcher as U.K. prime minister in 1979 and Ronald Reagan as U.S. president in 1980 -- that full employment was supplanted as the centerpiece of economic policy. The new framework was friendlier to Wall Street and global capitalists. Neoliberals advanced macroeconomic policies aimed at maintaining low inflation rather than full employment; reducing the public sector, including welfare-state programs; eliminating or weakening pro-worker labor laws; eliminating barriers to international trade; and deregulating financial markets. Coming out of the Great Recession, our challenge is to create a new, workable full-employment policy, not simply to patch up and restart the failed neoliberal model.

Defining full employment is a more difficult task than one might imagine. This point was pounded into me when I was working in Bolivia in 1990 as part of an economic-advising team led by Keith Griffin of the University of California, Riverside. Griffin’s assignment was to develop a program that would address the human devastation wrought by the “shock therapy” program designed by economist Jeffrey Sachs to end the Bolivian hyperinflation of the 1980s. Sachs’s neoliberal approach consisted of massive cuts in government spending and public-sector layoffs.

Griffin asked me to examine employment policies, so I paid a visit to the economists at the Ministry of Planning. When I suggested that we discuss the country’s unemployment problem, they explained that the country had no unemployment problem. I asked about the people begging, shining shoes, or hawking batteries and Chiclets in the street below the window where we stood. The economists responded that those people were employed.

In the United States today, as in Bolivia in 1990, full employment has to be understood more precisely. It is not simply a matter of everyone spending their days trying to scratch out a living somehow. A workable definition of full employment should refer to an abundance of decent jobs. Defined in this way, a policy of full employment is most certainly a challenge to the prerogatives of capitalists and the logic of neoliberalism. How much of a challenge has been widely debated.

The Challenge to Capitalism

Ever since Karl Marx published his magnum opus, Capital, in 1867, debates about unemployment have centered on whether it is an inevitable feature of a capitalist economy; whether full employment with decent wages and working conditions is achievable; and, if so, at what cost.

Much depends on how people understand the sources of unemployment. Debates typically identify three types of unemployment: voluntary unemployment, when people are out of work because they choose to be; frictional unemployment, when people are between jobs, receiving job training, or relocating; and involuntary unemployment, when people are making significant but unsuccessful efforts to find work. In principle, unemployment becomes a serious concern only when it is involuntary, but the distinctions between the three categories are not always evident, and the major theorists of unemployment have defined the boundaries in different ways.

Marx concluded that a high level of involuntary unemployment plays a significant role in the operations of a capitalist economy. In the justly famous 25th chapter of Volume I of Capital, “The General Law of Capitalist Accumulation,” Marx argued that in a free market–capitalist economy, capitalists gain higher profits because of their relatively strong bargaining position with respect to wages. Workers typically have less power because they have no other means of sustenance if they fail to get hired. Marx stressed that workers’ bargaining power diminishes further when unemployment and underemployment are high because the employed can be readily replaced by the “reserve army” of the unemployed outside the office, mine, or factory gates. When an economy is growing rapidly enough to deplete the reserve army, workers will utilize their increased bargaining power to raise wages. But profits are correspondingly squeezed and businesses invest less in new projects. Job creation falls, which, in turn, replenishes the reserve army.

There is an unlikely parallel on this issue between Marx and the late conservative economist Milton Friedman. Like Marx, Friedman held that high unemployment results when workers can flex their bargaining muscles. Friedman made this claim by looking at a labor market without unions or pro-worker government regulations such as minimum-wage standards. In that context Friedman found a perfect balance: market competition forces businesses to hire workers at a wage exactly equal to the amount that they are worth. If wages are too low, businesses will not be able to attract qualified employees, and will fail. If wages are too high, businesses will see profits disappear, and will fail. In Friedman’s scheme anyone who chooses not to work at the appropriate wage is voluntarily unemployed. As such, for Friedman, the “natural rate” (a term he coined) of involuntary unemployment is always effectively zero in a free-market economy.

So, for Friedman, strong labor unions and minimum-wage mandates are themselves the most basic barriers to a full-employment economy. This Friedmanite argument has been the defining theoretical proposition of the neoliberal approach to unemployment. It represents a dramatic reversal of the perspectives that were dominant in the aftermath of the 1930s Depression and into the 1970s.

Those once-ascendant conceptions were associated with the economist John Maynard Keynes. Keynes would have agreed with Friedman that full employment -- that is, zero involuntary unemployment -- is attainable under capitalism. But Keynes, who developed his argument during the Depression, understood the causes of mass involuntary unemployment in dramatically different terms. He blamed insufficiency in total spending in the economy -- private investment, household and government spending, and imbalances of imports and exports -- for mass involuntary unemployment. Keynes believed private investment decisions were especially important because they were subject to wide fluctuations at any given time, based on what he called private investors’ “animal spirits.” Animal spirits could fall for a number of reasons, including rising wages, import competition, or the bursting of a stock market bubble. Whatever the immediate cause of declining animal spirits, the impact would be a contraction of private investment. This in turn would produce mass involuntary unemployment.

Keynes believed that well-designed policies could counteract this tendency and thereby create and sustain full employment under capitalism. The Keynesian approach centered on macroeconomic policy. This included the idea that central governments could use fiscal policy to produce deficits and surpluses, and monetary policy to adjust interest rates and the availability of credit. The effective combination of fiscal and monetary policy would be used to maintain a level of overall demand in the economy that supports full employment.

Keynes’s arguments had a powerful impact. The Keynesian toolkit was critical to the full-employment goals of governments in advanced capitalist societies from the end of World War II until the rise of neoliberalism.

During this time Friedmanites on the right naturally challenged the Keynesian approach. But so did leftist critics, most forcefully Michał Kalecki, a Polish socialist economist and contemporary of Keynes. Kalecki argued that Keynes gave us sufficient technical understanding of capitalist economies to devise policies for sustaining full employment as well as business profits. But Kalecki suggested that the fundamental obstacles to full employment under capitalism were political, not technical: even though businesses could gain from full employment, they would nonetheless oppose it because it would embolden workers excessively, threatening capitalists’ control over the workplace, the pace and direction of economic activity, and even a society’s political institutions.

These arguments led Kalecki to a striking conclusion: full employment was achievable under capitalism, but the most effective way of doing so while maintaining capitalists’ social and political dominance was through fascism. Whether or not Kalecki was correct, he underscored dramatically the social and political challenges tied to building a full-employment economy.

The Challenge of Inflation

The Swedes developed the most effective answer to date to Kalecki’s challenge -- a non-fascist policy that can manage the conflicts that inevitably emerge between workers and capitalists in a full-employment economy. Their success turned on a solution to the most common argument against trying to operate an economy at full employment: the fear of excessive inflation.

In 1958 the British economist A.W. Phillips observed a long-term relationship between unemployment and inflation. Inflation, he found, goes up when unemployment goes down, and vice versa. This relationship has come to be known as the “Phillips Curve.” The logic behind the Phillips Curve follows readily from Marx’s idea that workers are able to bargain up wages when unemployment is low, causing profits to fall, which in turn means less business investment and a new round of rising unemployment. But Phillips suggested that business profits need not be squeezed at high employment: businesses could pass on higher labor costs to customers through price increases, causing a wage-price spiral, i.e. continuing inflation.

Indeed, it was the failure of the advanced capitalist economies -- in North America, Western Europe, and Japan -- to contain inflation in the 1970s that allowed the full-employment goal to be eclipsed by Friedman’s natural-rate theory. Economic policymakers worldwide became convinced that inflation resulting from low unemployment had become severe and uncontrollable.

But this global march toward Friedmanite economics misread the primary cause of high inflation in the 1970s, which was not low unemployment, but the two oil price shocks: the three-fold jump in 1973–74 and a similar spike in 1979. Nonetheless, those who would build a full-employment economy must address the issue of inflation.

Sweden is one country that did so. Its successful long-term model emerged from the work of the economists Rudolf Meidner and Gösta Rehn. Meidner and Rehn recommended using macroeconomic policy to stimulate overall demand in the economy and thereby expand the number of decent-paying jobs. But they understood that unacceptably high inflation could result if stimulus were the only tool for achieving zero involuntary unemployment. So they also favored limiting such policy interventions and settled for a more modest unemployment target of 3 percent. They believed some slack in the economy would keep upward wage pressure from producing headlong inflation.

Alongside restraints on job-stimulus policies, Meidner and Rehn supported the government’s active labor-market interventions to help as many as possible of the remaining unemployed workers into jobs. These interventions included travel and relocation allowances, retraining programs, and other measures targeted at mopping up frictional unemployment.

The policy functioned with the cooperation of working people and their union representatives. Sweden’s main unions accepted restrictions on job stimulus and their own wage demands in order to help fight excessive inflation as full employment approached. Sweden thus succeeded at maintaining unemployment at an average rate of 2.1 percent between 1960 and 1989. Inflation averaged a fairly high 6.7 percent, but this period includes the consequences of the 1970s’ oil shocks. The shocks no doubt undermined the effectiveness of Sweden’s approach, but the model worked for many years because of the unions’ restraint in wage bargaining.

This approach could not be transplanted intact into the U.S. economy today, since the current U.S. labor movement is far less powerful than the Swedish movement of the 1960s–1970s. But the lessons from Sweden for American labor are more about general principles than specific historical conditions. The U.S. labor movement should take it upon itself to design a workable full-employment program today, recognizing in that program the importance of inflation control. The unions should be specific as to how they could help achieve and maintain full employment with low inflation, building in relevant methods from the Swedish model. Through such measures, the representatives of U.S. workers could bring significant new voices to the debate over inflation as well as employment, rather than giving free rein over the management of inflation to the Federal Reserve and Wall Street.

Yet even if the Swedish model were modified to American realities, it is not clear that it would work. Despite their success, the Swedes largely abandoned their commitment to a full-employment economy in the early 1990s, shifting their priority much more toward inflation control. Between 1993 and 2006, unemployment rose to an average of 7.6 percent, while inflation fell sharply, to an average of 1.5 percent. Economist Helen Ginsburg and social worker Marguerite Rosenthal attribute the shift to “the growing power of Swedish business, pressures from globalization and the race to join the European Union, with its requirements for low budget deficits and inflation but none for low unemployment.” Meidner himself explained that as Sweden prepared to apply for E.U. membership at “the beginning of the 1990s . . . the Social Democratic government explicitly changed its priorities. The main objective was shifted from full employment to price stability.” The question, then, is whether the model has become unworkable in our contemporary globalized economy.

The Challenge of Globalization

Actually, the issue for the United States (and Sweden) today is not globalization per se, but the neoliberal policy framework that has defined the process of globalization for the past 35 years.

In the U.S. labor market, neoliberal policy has exposed working people to the credible threat of increased competition from workers in poor countries. Effectively, the reserve army of labor for jobs done by U.S. workers has expanded even though Americans consume -- and will continue to consume -- trillions of dollars of domestically manufactured products. The U.S. economy remains a nearly $15 trillion operation, employing 140 million people. But U.S. workers could increasingly be supplanted by workers in poor countries willing to accept much lower wages. Employers can tell workers, “If you won’t accept a pay cut, we’ll move.” Or, “If you want a union, fine. We’ll start buying what you make from China.”

The drop in average wages since 1973 suggests the seriousness of this problem. In 2009 the average non-supervisory worker in the United States earned $18.62 an hour (in 2009 dollars) -- 7 percent below the 1972 peak of $20.20 per hour (also in 2009 dollars). But this is only half the story. While wages fell, average labor productivity in the United States rose by 105 percent. In exchange for being twice as productive as they were in 1972, American workers took a 7 percent pay cut.

Unless our policy environment changes dramatically, these threat effects will become more pronounced. This point was brought home in a 2006 Foreign Affairs article by Blinder, the Princeton economist. Blinder argues that 20–30 percent of U.S. jobs (up to 40 million jobs) can be performed by workers in poor countries. He includes all manufacturing jobs as well as what he calls “impersonal service” jobs, which can be performed over the Internet -- the work of, among others, back-office accountants, lawyers, engineers, architects, and laboratory technicians, as well as their support staff. This doesn’t mean that anything like 40 million jobs will actually be outsourced. The point is that the employers of these 40 million workers gain leverage over wages and working conditions from credible threats to outsource.

But while outsourcing is a critical challenge, globalization need not take a toll on high-quality domestic employment. Despite intense pressures from globalization in the late 1990s, unemployment in the United States fell below 4 percent for the first time since 1969. The long-term decline in wages then temporarily reversed itself. Workers attained better health and pension benefits. The poverty rate declined. The patterns we observed in the 1960s quickly began to reassert themselves.

The experience of the late 1990s doesn’t provide a usable model for full employment since the economic growth that drove employment was based on an unsustainable stock-market bubble much like the housing bubble that we’re still recovering from. But it does suggest some important lessons.

One notable feature of the 1990s experience is that the United States reached near-full employment while the share of immigrant workers in the labor force was roughly equal to today’s. This puts lie to the increasingly vocal perspective that the current jobs crisis is a result of immigrants taking jobs that should be filled by native workers and suggests that immigration would not be a barrier to full employment.

Another misconception about unemployment is that it is increased by the trade deficit -- the value of imports minus exports. The current U.S. trade deficit is similar to that of the late 1990s. Yet now, one popular, bipartisan job-creation strategy calls for increasing exports of U.S. goods and services while importing less. This would lower the value of the U.S. dollar relative to the euro, yen, British pound, and yuan, making U.S. exports cheaper on foreign markets and foreign imports more expensive in the United States. Of course, other countries are equally interested in creating more jobs at home by increasing exports and lowering imports and are prepared to retaliate against U.S. actions to lower the value of the dollar. The most likely effect of such efforts is a series of currency skirmishes between countries whose workers would see little benefit.

The lesson is clear: we can approach full employment with rising wages even after allowing for current levels of global integration, immigration, and trade deficits. The problem, then, is not globalization itself but the absence of a full-employment agenda designed to address the challenges of globalization.

Creating Jobs: Education and Clean Energy

What kind of full-employment policy could work in our globalized age?

At its foundation, such a policy would channel more public and private investment in the United States toward those industries that efficiently generate an abundance of good domestic jobs. Using data I developed with colleagues at the Political Economy Research Institute (working directly from the industrial surveys and input-output tables of the U.S. Department of Commerce) we can ascertain the job-creating effects of spending in various sectors of the U.S. economy. Consider four possible areas of investment: education, the military, clean energy, and fossil-fuel energy. By a significant margin, education is the most effective source of job creation among these alternatives -- roughly 29 jobs per $1 million in spending. Clean-energy investments are second, with about seventeen jobs per $1 million of spending. The U.S. military creates about twelve jobs, while spending within the fossil-fuel sector creates about five jobs per $1 million.

These figures combine three categories of job creation: direct, indirect, and induced. Direct jobs are those created by an activity itself, such as building a wind turbine, hiring school teachers, opening a military base in Afghanistan, or transporting oil from the Persian Gulf to Houston. Indirect jobs are those generated by businesses providing equipment to support the direct activities, such as steel manufacturers supplying a wind turbine manufacturer, or a paper company providing office supplies to a school, military base, or an oil company’s corporate headquarters. An induced job is generated when people who are newly hired -- either through direct or indirect job creation -- spend the money they have begun to earn. This is frequently termed the “multiplier effect” of direct and indirect job creation. Small businesses, in particular, benefit from such multiplier effects thanks to the market opportunities that direct and indirect job creation can generate -- think of a lunch counter at a wind-energy work site.

Two main factors account for the differences in job creation across sectors. The first is relative labor intensity, i.e., how much of the investment is expended on hiring as opposed to plant. For example, a clean energy–investment program utilizes far more of its overall budget on hiring than on acquiring machines, supplies, property (either on- or offshore), and energy itself. The second factor is relative domestic content per overall spending. The clean-energy sector relies much more than the fossil-fuel sector on economic activities taking place within the United States -- such as retrofitting homes or upgrading the electrical system -- and less on imports. While average wages in both education and clean energy are 10–20 percent lower than those in the military and fossil-fuel sectors, the absolute numbers of jobs created in education and clean energy are so much higher than in the other sectors that these investments produce far more high-paying as well as low- paying jobs.

What would happen if we transfer 25 percent of total spending in the military ($690 billion) and fossil-fuel ($635 billion) sectors -- that is, about $330 billion per year -- in equal shares to education and clean energy?

Before assessing the effect that this shift in spending priorities would have on employment, we should also recognize its crucial and complementary political and environmental benefits. Reducing the Pentagon’s budget by 25 percent would return military funding to its pre-Iraq and Afghanistan levels, which is consistent with the Obama administration’s stated commitment to ending those wars while otherwise maintaining the military at roughly the level that prevailed at the end of the Clinton presidency.

Meanwhile, cutting spending on fossil fuels and transferring it to clean energy furthers the imperative of controlling carbon-dioxide emissions to fight global climate change. If we are going to meet the widely recognized minimum reduction target necessary to stabilize average global temperatures at acceptable levels -- 80 percent below our 2000 level by 2050 -- we will need to reduce fossil-fuel spending by far more than the $165 billion per year proposed here.

Finally, transferring that same amount each year into spending on education could, for example, drop the average classroom size nationwide from 23 to nineteen students, increase the average financial-aid award for college students by $1,500, and enable substantial improvements in school buildings. There are many appropriate combinations of these and other priorities.

Returning to employment effects, by redirecting $330 billion annually from the military and fossil-fuel sectors to education and clean energy, we would create about 4.8 million more jobs assuming no change in total spending. The job expansion would be across all sectors and activities: there would be new opportunities for highly paid engineers, researchers, lawyers, and business consultants as well as for elementary school teachers, carpenters, bus drivers, cleaning staff at hotels, and lunch-counter workers at wind-energy construction sites.

With 4.8 million new jobs, the present unemployment rate would decrease by about one-third, from 9.6 to 6.5 percent. This kind of large-scale shift in spending will not occur rapidly enough to affect unemployment right now, but it would change the overall employment picture over the next few years. For example, assume that through some combination of normal recovery and interventions from the Obama administration and the Fed the unemployment rate would fall over the next two years to 7 percent. If a shift in spending created 4.8 million additional jobs, that 7 percent unemployment rate would fall to about 3.9 percent. Remember that when unemployment dropped below 4 percent in the 1960s and 1990s, workers also saw major gains in bargaining power and rising real wages. Poverty also fell significantly in both periods.

The Political Challenge

We cannot assume that everything else about the U.S. labor market would stay the same after 4.8 million new jobs were created through this kind of policy initiative. There would no doubt be skill shortages in some areas and labor gluts in other areas. There would also be a rise in inflationary pressures. These pressures would have to be managed creatively, with labor representatives playing a leading role.

More broadly, setting full employment as the centerpiece of economic policy would entail a fundamental break from the Friedmanite/neoliberal model. The Great Recession is the disastrous, if logical, culmination of the neoliberal project. Putting an end to neoliberalism will require nothing less than an epoch-defining reallocation of political power away from the interests of big business and Wall Street and toward the middle class, working people, and the poor, while mounting a strong defense of the environment. Businesses will still be able to earn healthy profits in a full-employment, low-carbon U.S. economy.

Much else must be in place in order to achieve these aims. Pressingly, we need a financial-regulatory regime that channels private funding toward productive, employment-generating activities -- not the Wall Street Casino. But rather than addressing every social and political force prevailing on issues of employment, it is enough to focus on two fundamental points: full employment remains a moral imperative for creating a decent society, and full employment is attainable in the United States today. And here I mean full employment that looks something like Sweden’s in the 1960s and 1970s, not fascist or Bolivian full employment.

Whether full employment is ever achieved in the United States is a matter of political will. Is there the political will, in the United States, to fight for something as basic as the right to a decent job? This is the gigantic political question before us, as we struggle our way out of the Great Recession.

The Jobs Report, and America’s Two Economies

by Robert Reich

At a time when corporate profits are through the roof, the Dow is flirting with 12,000, Wall Street paychecks are fat again, and big corporations are sitting on more than $1 trillion in cash, you’d expect jobs be coming back. But you’d be wrong.

The U.S. economy added just 36,000 jobs in January, according to today’s report from the Bureau of Labor Statistics. Remember, 125,000 are needed just to keep up with the increase in population of Americans wanting and needing work. And 300,000 a month are needed continuously for five years if we’re to get back to anything like the employment we had before the Great Recession.

In other words, today’s employment report should be sending alarm bells all over official Washington. This economy is still terribly sick.

We have two economies. The first is in recovery. The second is in a continuous depression.

The first is a professional, college-educated, high-wage economy centered in New York and Washington, that’s living well off of global corporate profits. Corporations continue to make money by selling abroad from their foreign operations while cutting costs (especially labor) here at home. Wall Street is making money by taking the Fed’s free money and speculating with it. The richest 10 percent of Americans, holding 90 percent of all financial assets, are riding the wave. And their upscale spending has given high-end retailers and producers a bounce.

The second is most of the rest of America, and it’s still struggling with a mountain of debt, declining home prices, and job losses. In coming months most Americans will also be contending with sharply rising prices of food and fuel.

Our representatives in Washington see and hear mostly the first economy. The business press reports mainly on the first economy. Corporate and Wall Street economists are concerned largely with the first economy.

But the second economy will determine our politics in 2012 and beyond.

Obama Broke Pledge to Force Banks to Help Homeowners, Dems say

Friday, February 4, 2011 by Pro Publica
by Paul Kiel and Olga Pierce

Before he took office, President Obama repeatedly promised voters and Democrats in Congress that he'd fight for changes to bankruptcy laws to help homeowners-a tough approach that would force banks to modify mortgages.

Candidate Obama had portrayed homeowners in a sympathetic light. But the president struck a cautious note when he unveiled the plan in February 2009. While the government had been relatively undiscriminating in its bank bailout, it would carefully vet homeowners seeking help. HAMP was written to exclude homeowners seen as undeserving, limiting the program’s reach to between 3 million and 4 million homes.

"I will change our bankruptcy laws to make it easier for families to stay in their homes," Obama told supporters at a Colorado rally on September 16, 2008, the same day as the bailout of AIG.

Bankruptcy judges have long been barred from lowering mortgage payments on primary residences, though they could do it with nearly all other types of debt, even mortgages on vacation homes. Obama promised to change that, describing it as exactly "the kind of out-of-touch Washington loophole that makes no sense."

But when it came time to fight for the measure, he didn't show up. Some Democrats now say his administration actually undermined it behind the scenes.

"Their behavior did not well serve the country," said Rep. Zoe Lofgren (D-CA), who led House negotiations to enact the change, known as "cramdown." It was "extremely disappointing."

Instead, the administration has relied on a voluntary program with few sticks, that simply offers banks incentives to modify mortgages. Known as Home Affordable Modification Program, or HAMP, the program was modeled after an industry plan. The administration also wrote it carefully to exclude millions of homeowners seen as undeserving.

The administration launched the program with a promise that it would help 3 million to 4 million homeowners avoid foreclosure, but it's likely to fall far short of that goal. The Congressional Oversight Panel now estimates [1] fewer than 800,000 homeowners will ultimately get lasting mortgage modifications.

Over the past year, ProPublica has been exploring why the program has helped so few homeowners. Last week, we reported how the Treasury Department has allowed banks to break the program's rules with few ramifications [2]. The series is based on newly released data, lobbying disclosures, and dozens of interviews with insiders, members of Congress and others.

As the foreclosure crisis grew through 2008, the large banks that handle most mortgages were slow to offer modifications to struggling homeowners. Homeowners were left to navigate an onerous process that usually did not actually lower their mortgage payment. More than half of modifications kept the homeowner's payment the same or actually increased it.

Many in Congress and elsewhere thought that mortgage servicers, the largest of which are the four largest banks, would make modifications only if they were pressured to do so.

Servicers work as intermediaries, handling homeowners' mortgage payments on behalf of investors who own the loans. Since servicers don't own the vast majority of the loans they service, they don't take the loss if a home goes to foreclosure, making them reluctant to make the investments necessary to fulfill their obligations to help homeowners.

To force those servicers to modify mortgages, advocates pushed for a change to bankruptcy law giving judges the power not just to change interest rates but to reduce the overall amount owed on the loan, something servicers are loath to do [3].

Congressional Democrats had long been pushing a bill to enact cramdown and were encouraged by the fact that Obama had supported it, both in the Senate and on the campaign trail.

They thought cramdowns would serve as a stick, pushing banks to make modifications on their own.

"That was always the thought," said Rep. Brad Miller (D-NC), "that judicial modifications would make voluntary modifications work. There would be the consequence that if the lenders didn't [modify the loan], it might be done to them."

When Obama unveiled his proposal to stem foreclosures a month after taking office, cramdown was a part of the package [4]. But proponents say he'd already damaged cramdown's chances of becoming law.

In the fall of 2008, Democrats saw a good opportunity to pass cramdown. The $700 billion TARP legislation was being considered, and lawmakers thought that with banks getting bailed out, the bill would be an ideal vehicle for also helping homeowners. But Obama, weeks away from his coming election, opposed that approach and instead pushed for a delay. He promised congressional Democrats that down the line he would "push hard to get cramdown into the law," recalled Rep. Miller.

Four months later, the stimulus bill presented another potential vehicle for cramdown. But lawmakers say the White House again asked them to hold off, promising to push it later.

An attempt to include cramdown in a continuing resolution got the same response from the president.

"We would propose that this stuff be included and they kept punting," said former Rep. Jim Marshall, a moderate Democrat from Georgia who had worked to sway other members of the moderate Blue Dog caucus [5] on the issue.

"We got the impression this was an issue [the White House] would not go to the mat for as they did with health care reform," said Bill Hampel, chief economist for the Credit Union National Association, which opposed cramdown and participated in Senate negotiations on the issue.

Privately, administration officials were ambivalent about the idea. At a Democratic caucus meeting weeks before the House voted on a bill that included cramdown, Treasury Secretary Tim Geithner "was really dismissive as to the utility of it," said Rep. Lofgren.

Larry Summers, then the president's chief economic adviser, also expressed doubts in private meetings, she said. "He was not supportive of this."

The White House and Summers did not respond to requests for comment.

Treasury staffers began conversations with congressional aides by saying the administration supported cramdown and would then "follow up with a whole bunch of reasons" why it wasn't a good idea, said an aide to a senior Democratic senator.

Homeowners, Treasury staffers argued, would take advantage of bankruptcy to get help they didn't need. Treasury also stressed the effects of cramdown on the nation's biggest banks, which were still fragile. The banks' books could take a beating if too many consumers lured into bankruptcy by cramdown also had their home equity loans and credit card debt written down.

While the Obama administration was silent, the banking industry had long been mobilizing massive opposition to the measure.

"Every now and again an issue comes along that we believe would so fundamentally undermine the nature of the financial system that we have to take major efforts to oppose, and this is one of them," Floyd Stoner, the head lobbyist for the American Bankers Association, told an industry magazine.

With big banks hugely unpopular, the key opponents of cramdown were the nation's community bankers, who argued that the law would force them to raise mortgage rates to cover the potential losses. Democratic leaders offered to exempt the politically popular smaller banks from the cramdown law, but no deal was reached.

"When you're dealing with something like the bankruptcy issue, where all lenders stand pretty much in the same shoes, it shouldn't be a surprise when the smaller and larger banks find common cause," said Steve Verdier, a lobbyist for the Independent Community Bankers Association.

The lobbying by the community banks and credit unions proved fatal to the measure, lawmakers say. "The community banks went bonkers on this issue," said former Sen. Chris Dodd (D-CT). With their opposition, he said, "you don't win much."

"It was a pitched battle to get it out of the House," said Rep. Miller, with "all the effort coming from the Democratic leadership, not the Obama administration."

The measure faced stark conservative opposition. It was opposed by Republicans in Congress and earlier by the Bush administration, who argued that government interference to change mortgage contracts would reduce the security of all kinds of future contracts.

"It undermines the foundation of the capitalist economy," said Phillip Swagel, a Bush Treasury official. "What separates us from [Russian Prime Minister Vladimir] Putin is not retroactively changing contracts."

After narrowly passing the House, cramdown was defeated when 12 Democrats joined Republicans [6] to vote against it.

Many Democrats in Congress said they saw this as the death knell for the modification program, which would now have to rely on the cooperation of banks and other mortgage servicers to help homeowners.

"I never thought that it would work on a voluntary basis," said Rep. Lofgren.

At the time that the new administration was frustrating proponents of cramdown, the administration was putting its energies into creating a voluntary program, turning to a plan already endorsed by the banking industry. Crafted in late 2008, the industry plan gave banks almost complete freedom in deciding which mortgages to modify and how.

The proposal was drafted by the Hope Now Alliance, a group billed as a broad coalition of the players affected by the mortgage crisis, including consumer groups, housing counselors, and banks. In fact, the Hope Now Alliance was headquartered in the offices of the Financial Services Roundtable, a powerful banking industry trade group. Hope Now's lobbying disclosures were filed jointly with the Roundtable, and they show efforts to defeat cramdown and other mortgage bills supported by consumer groups.

The Hope Now plan aimed to boost the number of modifications by streamlining the process for calculating the new homeowner payments. In practice, because it was voluntary, it permitted servicers to continue offering few or unaffordable modifications.

The plan was replaced by the administration's program after just a few months, but it proved influential. "The groundwork was already laid," said Christine Eldarrat, an executive adviser at the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac. "Servicers were onboard, and we knew their feelings about certain guidelines."

As an official Treasury Department account of its housing programs later put it, "The Obama Administration recognized the momentum in the private sector reflected in Hope Now's efforts and sought to build upon it." It makes no mention of cramdown as being needed to compel compliance.

Ultimately, HAMP kept the streamlined evaluation process of the Hope Now plan but made changes that would, in theory, push servicers to make more affordable modifications. If servicers chose to participate, they would receive incentive payments, up to $4,000, for each modification, and the private investors and lenders who owned the loans would also receive subsidies. In exchange, servicers would agree to follow rules for handling homeowner applications and make deeper cuts in mortgage payments. Servicers who chose not to participate could handle delinquent homeowners however they chose.

The program had to be voluntary, Treasury officials say, because the bailout bill did not contain the authority to compel banks to modify loans or follow any rules. A mandatory program requires congressional approval. The prospects for that were, and remain, dim, said Dodd. "Not even close."

"The ideal would have been both [cramdown and HAMP]," said Rep. Barney Frank (D-MA), then the chairman of the House Financial Services Committee. But given the political constraints, HAMP on its own was "better than nothing."

"We designed elegant programs that seemed to get all the incentives right to solve the problem," said Karen Dynan, a former senior economist at the Federal Reserve. "What we learned is that the world is a really complicated place."

The program was further limited by the administration's concerns about using taxpayer dollars to help the wrong homeowners. The now-famous "rant" by a CNBC reporter [7], which fueled the creation of the Tea Party movement, was prompted by the idea that homeowners who had borrowed too much money might get help.

Candidate Obama had portrayed homeowners in a sympathetic light. But the president struck a cautious note when he unveiled the plan in February 2009 [8]. The program will "not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans," said Obama. "It will not reward folks who bought homes they knew from the beginning they would never be able to afford."

While the government had been relatively undiscriminating in its bank bailout [9], it would carefully vet homeowners seeking help. HAMP was written to exclude homeowners seen as undeserving, limiting the program's reach to between 3 million and 4 million homes.

In order to prove their income was neither too high nor too low for the program, homeowners were asked to send in more documents than servicers had required previously, further taxing servicers' limited capacity. As a result, some servicers say eligible homeowners have been kept out. According to one industry estimate [10], as many as 30 percent more homeowners would have received modifications without the additional demands for documentation.

A lot of the program is focused on "weeding out bad apples," said Steven Horne, former Director of Servicing Risk Strategy at Fannie Mae. "Ninety percent is not focused on keeping more borrowers in their homes."

Lawyer in Charge of Gulf Compensation Fund 'Acting in BP's Interest'

Friday, February 4, 2011 by The Independent/UK
by Stephen Foley

BP's attempts to quantify and quickly resolve billions of dollars in compensation claims from the Gulf of Mexico oil spill have been undercut by a ruling in a Louisiana court, which questioned the independence of the $20bn claims fund established by the British oil giant last year.

Kenneth Feinberg, the lawyer in charge of the fund, cannot claim to be neutral, a judge said, and is in fact acting in BP's interests.

The ruling throws open the possibility that thousands of people who suffered personal injury or lost their livelihoods as a result of the worst-ever oil spill might now bypass the claims fund and instead seek redress in the courts.

Analysts fear that protracted court action will dramatically increase the costs of the oil spill for BP, not least because of the legal fees involved. It also promises to prolong the uncertainty over the final bill for the spill. An estimated 5 million barrels of oil spewed into the ocean from a ruptured well for almost three months after a fire sank the Deepwater Horizon rig last April, hitting fishing, oyster farming, tourism and other industries along the Gulf coast.

At the height of the public anger over the spill in June, the White House pressured BP into setting up an independent claims fund, under the aegis of Mr Feinberg, the lawyer who previously oversaw claims to victims of the 9/11 terrorist attacks. However, Mr Feinberg's fees are paid directly by BP and he has numerous obligations to consult and provide information to the oil giant throughout the process, Judge Carl Barbier said. Mr Feinberg's firm is paid $850,000 a month for its work.

"A full disclosure of the relationship between Mr Feinberg, the claims fund and BP will at least make transparent that it is BP's interests... that are being promoted," the judge ruled.

Lawyers acting for thousands of claimants have been fighting Mr Feinberg's assertion that people would be better off seeking redress through his fund. They want as many as possible to join a class action against BP in the Louisiana courts.

"Today is a good day for the thousands of victims of the Deepwater Horizon tragedy," said Jim Roy, a lawyer for oil spill victims. "With this ruling, the court is protecting the rights of the thousands of victims of this preventable tragedy, and has unequivocally stated that Mr Feinberg no longer has carte blanche to mislead the public on BP's behalf."

BP's latest estimate of the costs of the spill at $41bn, including compensation for victims and the bill for fixing the well and cleaning up the oil. Earlier this week it reinstated the dividend for shareholders, after having axed it in the wake of the spill. It is trying to recoup many billions of dollars of the costs from its business partners, including other investors in the Deepwater Horizon project and its sub-contractors on the rig.

Mr Feinberg, meanwhile, has so far disbursed $3.5bn in compensation. Speaking before the Louisiana court ruling on Wednesday, he said he expected the Gulf coast to have fully recovered from the disaster within the next two or three years.

Local residents and politicians have rounded on Mr Feinberg, saying it is unfair claimants must waive their right to sue BP if they accept a claims fund settlement, and charging Mr Feinberg with underestimating the scale of the economic damage.

Mr Feinberg said he had "canvassed the universe" to reach a scientific consensus on the speed of recovery from the spill. "If people feel that I have misread the available data or have underestimated the long term data don't take the final payment," he said.

Who is Kenneth Feinberg?

Massachusetts-born Kenneth Feinberg considered a career in acting before studying law in New York in the 1960s. He now boasts an illustrious CV.

After a stint as Senator Ted Kennedy's Chief of Staff in the late 1970s, Mr Feinberg started his own law firm (now called Feinberg Rozen LLP).

Dubbed America's "compensation tsar", he is best known for handling the $180m (£110m) settlement between the manufacturers of Agent Orange and Vietnam veterans, the $7bn federal compensation fund for victims of 9/11 and the memorial fund for the families of victims of the 2007 Virginia Tech massacre.

In 2010, it was no surprise when President Obama named Mr Feinberg independent administrator of the $20bn compensation fund set up by BP for victims of the Gulf of Mexico oil spill.

Global Food Prices Hit New Record High

Global food prices have hit a new record high, amid fears that the escalating cost of bread and meat is adding to the turmoil in the Middle East.
Thursday, February 3, 2011 by the Telegraph/UK
by Harry Wallop

The United Nations Food and Agriculture Organization (UN FAO) gave warning that the high prices, already above levels in 2008 which sparked riots, were likely to rise further.

The FAO measures food prices from an index made up of a basket of key commodities such as wheat, milk, oil and sugar, and is widely watched by economists and politicians around the world as the first indicator of whether prices will end up higher on shop shelves.

The index hit averaged 230.7 points in January, up from 223.1 points in December and 206 in November. The index highlights how food prices, which throughout most of the last two decades have been stable, have taken off in alarming fashion in the last three years. In 2000 the index stood at 90 and did not break through 100 until 2004.

Surging food prices have come back into the spotlight after they helped fuelled protests that toppled Tunisia's president in January. Food inflation has also been among the root causes of protests in Egypt and Jordan, raising speculation other nations in the region would secure grain stocks to reassure their populations.

Abdolreza Abbassian, an economist at the FAO, said: "The new figures clearly show that the upward pressure on world food prices is not abating.

"These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food."

Experts point out that, in theory, the situation is not as bad as in 2007 to 2008, when the world faced a genuine shortage of food. This time around there are plenty of stocks, particularly wheat, that are being stored. In Britain arable farmers have been sitting on grain from last year's harvest and been able to sell wheat at £200 a ton, double the price of just a few years ago.

Experts said that hoarding of food by some governments was making the problem worse.

In the run-up to the 2007/2008 food price crisis, the World Bank estimated that some 870 million people in developing countries were hungry or malnourished. The FAO estimates that number has increased to 900 million.

Robert Zoellick, the president of the World Bank, urged global leaders to "put food first" and wake up to the need to curb increased price volatility.

"2008 should have been a wake-up call, but I'm not yet sure all the countries in the world that we need to support this have woken up to it," he said.

Indonesia, southeast Asia's biggest economy, last week bought 820,000 tonnes of rice, nearly five times what it had originally set out to buy, lifting rice prices - although rice is one commodity that remains well below its 2008 prices. It has also suspended import duties on rice, soybeans and wheat.

Algeria last week said it had bought almost a million tonnes of wheat, bringing its bread wheat purchases to at least 1.75 million since the start of January, and ordered an urgent speeding up of grain imports, a move aimed at building stocks.

Wayne Gordon, a grains analyst for Rabobank, said: "Some of the demand story is centred around high food prices then tend to lead to hoarding by a number of countries into their strategic reserves.

"So not only are they purchasing for current consumption, but they are also trying to build up strategic reserves, which basically are a bit of a double-barrelled demand event."

Severe drought in the Black Sea last year, heavy rains in Australia and dry weather in Argentina and anticipation of a spike in demand after unrest in north Africa and the Middle East has also helped drive grain prices even higher.

The FAO's Sugar Price Index soared to a record high of 420.2 points from 398.4 points in December.

Its Cereals Price Index, which includes prices of main food staples such as wheat, rice and corn, rose to an average of 244.8 points in January, the highest level since July 2008 but below its peak in April 2008, the data showed.

The Oils Price Index rose to 277.7 points in January from 263.0 points in December and came close to the June 2008 record level.

Another Whitewash for Wall Street

The FCIC Report 


Maybe "whitewash" is too bland of a term to apply to the Financial Crisis Inquiry Commission's (FCIC) report, but it certainly doesn't break any new ground. Nor does it achieve its real purpose, which is to figure out what triggered the financial meltdown and (hopefully) restore confidence in the system. It fails on both counts, and it's not hard to see why. The investigative panel was clearly instructed to point out the dangers of insufficient regulation rather than focus on the massive incidents of fraud that were perpetrated by the bankers and other financial kingpins. It's a clever way of blaming the system instead of the people who were responsible.

Here's an excerpt from the report that's been widely circulated in the media. It exposes the FCIC's real agenda and shows that the commission is little more than a cover up.
"We conclude this financial crisis was avoidable. The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. 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. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us."
While this seems like an admission that crimes were committed, it's really just the opposite. The authors are saying "We're all to blame", which is pure baloney. The "captains of finance" didn't simply "ignore warnings" or "fail to question, understand, and manage evolving risks". They deliberately stole a great deal of money from a great many people. Period. That's a crime and they need to be held accountable. Unfortunately, the Commission uses the report to obfuscate the facts and confuse the public about what really needs to be done.

There's a very good summary of the Commission's approach via e mail on the Naked Capitalism website. It was written by Matt Stoller. Here's an excerpt:
"I was on a conference call today with Phil Angelides and Brooksley Born, two commissioners of the Financial Crisis Inquiry Commission. During their unveiling of the FCIC report, they used words like deregulation, leverage, imprudent risk-taking, reckless behavior, failures at credit agencies, and failed regulators. Left out were words like crime, fraud, looting, or a specialized form of looting known as control fraud. At every point reporters asked about their referrals of criminal cases, which someone leaked before the report came out, they demurred. "We are not prosecutors", said Angelides.
I asked about the criminal nature of the crisis. I said I didn't want to know about any specific case, but whether they thought that fraud or crime was a core cause of the crisis. This is an important distinction, because the real question at hand is whether you trust the system to correct itself, or whether you believe that the people running the system are the problem and must be removed before we can fix the system. It's obvious, as you'll see, that Born and Angelides believe the former.
Neither Born nor Angelides would answer whether accounting fraud or crime was a primal cause of the crisis. The gist of the response was "it's all in the report," along with an attempt to pretend like they had discovered the systemic mortgage origination fraud that the FBI discussed in 2004. Born also repeated that they wouldn't disclose specific cases of criminal referrals, even though I had specifically said that I was not interested in such disclosures. It was a filibuster, and an obvious one at that. I kept pressing, and asked them repeatedly to answer my question, and after the third follow-up Angelides finally said they had to go.
With that, the FCIC has completed the final act of oversight for the last Democratic Congress, and it held true to what Democrats in the last Congress believed. Everyone was at fault for the crisis, but no one is to blame. This was Bush's line in 2008, that "Wall Street got drunk", and Obama's line throughout the Dodd-Frank mark-up. The Republicans went after the GSEs and "regulation", and the Democrats sadly lamented the tragedy of the crisis. Again, everyone's at fault, and no one is to blame. I saw high-ranking Democrat Carolyn Maloney brag yesterday about her vote for TARP in the hearing on foreclosures, noting that the Dow busted through 12,000 as a sign of prosperity. This is what they believe, in their bones. There was no theft, only tragedy....("The FCIC, in Lockstep with the Officialdom, Refuses to Use the "C" Word", Naked Capitalism)
So, the report is actually a cover up, a way of going over the events in excruciating detail without assigning blame. The whole 500-page rehash could be summarized in two words, "shit happens". Maybe that's the best the commission could do, but it's going to take more than that to restore the public's confidence in the system. 

Market analyst, Jonathan Weil, takes a similar view in an article on Bloomberg last week. Here's what he says:
"The report's conclusions were obvious: The financial crisis was man-made and avoidable. Regulators and credit-rating companies blew it. Banks and homeowners borrowed too much. Companies such as AIG and Lehman Brothers had horrible governance. Ethics and accountability broke down. The government panicked when the crisis hit in 2008. And so forth.
The lack of new insights dovetailed with the commission's non-confrontational approach. More than 700 people granted interviews, most behind closed doors. Only seldom did the panel issue subpoenas...." ("Wall Street's Collapse to Be Mystery Forever", Bloomberg)
See? It's just old wine in new bottles. So, what can we extrapolate from this?
Just what its authors intended, of course. Predatory lending is bad, ethics matter, corporate governance needs watching, and regulations need to be tightened. While this is all true, it doesn't get to the heart of the matter: Who's responsible? That's what the public wants to know. They don't want to know who sold what CDO to whom. They want justice. That's all.

Besides, the window for passing new regulations has closed. Much of the Dodd-Frank Bill has already been gutted and, with a new GOP majority in congress, there's no appetite for new rules to reign in Wall Street. Too Big To Fail banks and financial institutions have gotten bigger, securitization and derivatives remain largely unscathed, the banks will be allowed to write their own guidelines on how they intend to follow the Volcker Rule, and--just last week--the banks won a major victory that will allow them to continue to cook their books into perpetuity. Here's a clip from the Wall Street Journal:
"The banks got what they wanted. Accounting rule makers on Tuesday dropped a plan to require banks to value loans using market prices.
That means investors will remain reliant on banks' own views of the worth of their assets. Those judgments proved seriously flawed during the financial crisis and left many with insufficient capital. Taxpayers, who as a result were called upon to bail out numerous institutions, also are left more vulnerable....
Banks generally oppose the use of market prices because, they say, it makes their results more volatile. Their intense lobbying efforts against the proposal likely got a leg up after FASB Chairman Robert Herz, who had supported the plan, unexpectedly departed in August. FASB cited strong opposition it received in public comments in changing course." ("Banks Have Their Way With FASB", Wall Street Journal)
So, the banks can continue to deceive shareholders and investors just like before, and anyone who opposes them, like ex-FASB Chairman Robert Herz, will get the boot. This is a system that no longer has the capacity for course-correction, which is why another crisis cannot be far off.

Here's one last blurp from Bloomberg's Susan Antilla from an article "The Rich Rest Up as Markets Forget Crisis Lessons":
"Investor protection is out. Remember all the talk about making the markets safe for investors? Well, get over it. Dodd-Frank instructed the Securities and Exchange Commission to set up five new offices, including one to handle whistleblower cases, and a committee to represent the interests of investors on issues like fees and disclosure. But on Dec. 2, the agency put those efforts on hold because of "budget uncertainty."
A frozen budget has also forced the SEC to scale back its plans to get up to speed with the dynamics that resulted in the so-called flash crash on May 6, 2010, when the Dow Jones Industrial Average fell almost 1,000 points in a matter of minutes. The agency had planned to hire five math whizzes acquainted with the sorts of financial algorithms involved in the instant meltdown. Instead, it's settled for one...
Pandering to business is in. Darrell Issa, the car- alarm millionaire twice accused of auto theft (both charges were dropped), and now the California Republican who is chairman of the House Oversight and Government Reform Committee, sent letters to 150 companies and business trade groups in December asking them which regulations and rules might be restraining job growth. He didn't really have to ask, because we all know that the answer, of course, is: "All of them." ("The Rich Rest Up as Markets Forget Crisis Lessons", Bloomberg)
And, Darrell Issa is not the exception either. He's the rule, and now he can count on the support of the White House, too. Obama's anti-regulation rant in the Wall Street Journal last week is a sign that the president is snuggling even closer to big finance. In fact, Obama deliberately timed his WSJ screed to torpedo the FCIC's report and preempt renewed demands for regulation. What are friends for anyway?

So, the FCIC report can be consigned to the dustbin where it belongs and all the blather about subpoenas, indictments, arrests or prison sentences can end once and for all. It doesn't take 500 pages to remind people that the law does not apply to the rich and powerful. They already know that.

American Hypocrisy in the Middle East

Things Have to Change in Order to Remain the Same

The hypocrisy of the US government is yet again demonstrated in full bore force. The US government invaded Iraq and Afghanistan, laid waste to much of the countries including entire villages and towns, and massacred untold numbers of civilians in order "to bring democracy" to Iraq and Afghanistan. Now after days of Egyptians in the streets demanding "Mubarak must go," the US government remains aligned with its puppet Egyptian ruler, even suggesting that Mubarak, after running a police state for three decades, is the appropriate person to implement democracy in Egypt.

On January 30, US Secretary of State Hillary Clinton declared that "freedom and democracy" America neither seeks nor supports the ouster of the Egyptian dictator. Israeli prime minister Netanyahu told the US and Europe that criticism of Mubarak must be curbed in order "to preserve stability in the region."

By "stability" Netanyahu means the unimpeded ability of Israel to continue oppressing the Palestinians and stealing their country. Mubarak has been for three decades the well-paid enforcer for the US and Israel, sealing off Gaza from the outside world and preventing aid flows across the Egyptian border. Mubarak and his family have become multi-billionaires, thanks to the American taxpayer, and the US government, both Republicans and Democrats, do not want to lose their heavy investment in Mubarak.

The US government has long corrupted Arab governments by paying rulers installed by the US to represent US/Israeli interests rather than the interest of Arab peoples. Arabs put up with American-financed oppression for many years, but now are showing signs of rebellion.

The murderous American-installed dictator in Tunis was overthrown by people taking to the streets. Rebellion has spread to Egypt and there are also street protests against the US-supported rulers in Yemen and Jordan.

These uprisings might succeed in ousting puppet rulers, but will the result be anything more than the exchange of a new American puppet ruler for the old? Mubarak might go, but whoever takes his place is likely to find himself wearing the same American harness.

What dictators do is to eliminate alternative leadership. Potential leaders are either assassinated, exiled, or imprisoned. Moreover, anything short of a full-fledge revolution, such as the Iranian one, leaves in place a bureaucracy accustomed to business as usual. In addition, Egypt and the country's military have grown accustomed to American support and will want the money to keep flowing. It is the flow of this money that ensures the purchase of the replacement government.

Because the US dollar is the world reserve currency, the US government has financial dominance and the ability to financially isolate other countries, such as Iran. To break free of America's grip, one of two things would have to happen. Revolution would have to sweep the Arab world and result in an economic unity that could foster indigenous economic development, or the US dollar has to fail as world currency.

Arab disunity has long been the means by which the Western countries have dominated the Middle East. Without this disunity, Israel and the US could not abuse the Palestinians in the manner in which they have for decades, and without this disunity the US could not have invaded Iraq. It is unlikely that the Arabs will suddenly unite themselves.

The collapse of the dollar is more likely. Indeed, the policy of the US government to maximize both budget and trade deficits, and the policy of the Federal Reserve to monetize the budget deficit and the fraudulent paper assets of the large banks, have the dollar heading for demise.

As the supply of dollars grows, the value diminishes. Perhaps the time is not far off when rulers cease to sell out their peoples for American money.

Americans are Oppressed, Too

When We Gonna Wake Up ...

Police in the US now rival criminals, and exceed terrorists, as the greatest threat to the American public. Rogelio Serrato is the latest case to be in the news of an innocent person murdered by the police. Serrato was the wrong man, but the Monterey County, California, SWAT team killed the 31-year old father of four and left the family home a charred ruin.

The fact that SWAT teams often go to the wrong door shows the carelessness with which excessive force is used. In one instance the police even confused the town's mayor with a drug dealer, broke into his home, shot dead the family's pet dogs, and held the mayor and his wife and children at gun point. But most cases of police brutality never make the news.

Most who suffer abuse from the police don't bother to complain. They know that to make an enemy of the police brings a lifetime of troubles. Those who do file complaints find that police departments tend to be self-protective and that the naive and gullible public tends to side with the police.

However, you can find plenty of examples of police brutality on youtube, more than you can watch in a lifetime. I have just searched google for "youtube police brutality" and the result is: "497,000 results." There's everything from police shooting a guy in a wheelchair to body slamming a befuddled 89-year old great grandmother to tasering kids and mothers with small children. The fat goon cops love to beat up on women, kids, and old people.

The 497,000 google results may contain duplicates as more than one person might have posted a video of the same event, and the incidents occurred over more than one year. However, probably only a small percentage of incidents are captured on video by onlookers, and many incidents of police brutality have no witnesses. What the videos reveal is that a large percentage of police move with alacrity to assault the public. The number of incidences could be very high. One million annually would not be an exaggeration.

In contrast, according to the U.S. Department of Justice, in 2009 (the most recent year for which data is compiled), there were 806,000 aggravated assaults (not including assaults by police against the public) by criminals against the public, of which 216,814 were committed by hands and feet and not by weapons. (In the U.S. if you merely push a person or grab his arm, you have committed assault. "Freedom and democracy" America uses any excuse to multiply the number of felons.)

Considering the data, one might conclude that the police are a greater danger to the public than are criminals.

Indeed, the trauma from police assault can be worse than from assault by criminals. The public thinks the police are there to protect them. Thus, the emotional and psychological shock from assault by police is greater than the trauma from being mugged because you stupidly wandered into the wrong part of town.

Why are the police so aggressive toward the public?

In part because their ranks attract bullies, sociopaths and psychopaths. Even normal cops are proud of their authority and expect deference. Even cops who are not primed to be set off can turn nasty in a heartbeat.

In part because police are not accountable. The effort decades ago to have civilian police review boards was beat back by "law and order" conservatives.

In part because the police have been militarized by the federal government, equipped with military weapons, and trained to view the public as the enemy.

In part because the Bush/Cheney/Obama regimes have made every American a suspect. The only civil liberty that has any force in the U.S. today is the law against racial discrimination. This law requires that every American citizen be treated as if he were a Muslim terrorist. The Transportation Security Administration rigorously enforces the refusal to discriminate between terrorist and citizen at airports and is now taking its gestapo violations of privacy into every form of travel and congregation: trucking, bus and train travel, sports events, and, without doubt, shopping centers and automobile traffic.

This despite the fact that there have been no terrorist incidents that could be used to justify such an expansive intrusion into privacy and freedom of movement.

The TSA has not caught a single terrorist. However, it has abused and inconvenienced several hundred thousand innocent American citizens.

The abuse happens, because people with authority are dying to use the authority. The absence of terrorists means that the TSA turns innocent Americans into terrorists. There have been so many absurd cases. One woman traveling with her ill and dying mother, who required special food, had contacted the TSA prior to the flight, explained the situation, and was given permission to take the special food onboard. But when she went through "security," the food was taken away, and when she protested she was arrested and hauled off, leaving the elderly mother in a wheelchair deserted.

Others have been arrested because a member of the household used a suitcase or carry bag to take guns and ammunition to the gun club or on a hunting trip and forgot to remove all the ammo, or the explosives test detected gunpowder residuals. Boy Scouts forgot to remove pocket knives from backpacks that they took on camping trips. Lactating mothers forced to give up breast milk. And so on.

These are the "great dangers" that the TSA protect the american sheeple from, and the sheeple submit, even servilely thanking their oppressors for protecting them.

Submission is what the government and the police want. Anyone who argues with TSA or the police will be abused. An American who stands up for his rights is likely to be beaten to a pulp. TSA has announced that such Americans are "suspects" and will be held in indefinite detention.

And "our" government assures us that we have "freedom and democracy." We have a police state, and everyone who forgets it is in deep trouble.

The Amerikan police state is closely allied with police states all over the world--Egypt, Yemen, Jordan, Saudi Arabia and Israel in the Middle East and former constituent parts of the Soviet Empire in Central Asia. The U.S. government never lifts a finger in behalf of democracy anywhere. In fact, the U.S. government quickly moves to overthrow democracy wherever it rears its head, as the U.S. recently did in Honduras. Before Honduras it was Palestine where the U.S. overturned the election that brought Hamas to power. Now Washington is targeting Lebanon where Hisbollah has gained.

Everywhere on earth the U.S.government prefers an autocracy that it can purchase to free elections that bring to power candidates unwilling to serve as American puppets.

The U.S. government is the most determined foe of democracy in the world. Yet, Washington lectures China, which has more civil liberties than Bush/Cheney/Obama permit Americans.

If Americans ever find the emotional strength to acknowledge the oppression under which they live, they, too, will be in the streets.

Monsanto the devil: Democracy's Terminator Gene

Obama Greenlights GE Alfalfa

As we watch millions of Tunisians, Egyptians, and Yemenis organize and challenge their respective dictators, many of us will be thankful that such oppression and turmoil don't exist in our country. Yet the Department of Agriculture's decision on Thursday to approve the planting of genetically modified alfalfa should give us all reason to question the state of our democracy as well.

Genetically modified alfalfa doesn't sound as important as "the economy," "healthcare," or "jobs." Yet our fourth largest crop, a major feed for dairy cows, has a direct impact on the quality of our milk. By allowing Monsanto the devil to freely modify something so crucial, but so unfamiliar, the Department of Agriculture is facilitating the quiet modification of the American diet without popular consent or notice. More importantly, the company receiving free reign over our food supply is a predatory one, one that collaborates with cigarette companies, makes bestselling pesticides like Roundup—which the alfalfa is bred to resist—and runs small organic farmers out of business by suing them for using patented GM seeds that entered their fields on the wind.

But the greater danger isn't posed to dairy consumers, or even to organic farmers whose fields face contamination. Free societies are built on the awareness of an informed public that has the power to exercise free choice. Genetically modified foods are, by their very nature, against the idea of free choice. They are engineered to replicate a chosen result in our food, regardless of the will of nature, farmers, or consumers, who are all forced to take submissive roles in the food chain. And so, in endorsing the planting of GM alfalfa, the Department of Agriculture has endorsed the denial of free choice on several levels, the least of which is the disregard for public participation during the process.

Agriculture Secretary Tom Vilsack told reporters that "the decision reached [Thursday] is a reflection of our commitment to choice and trust."

The problem is, he's right.

In fact, as long as our federal government permits one company to disseminate a product that assumes the role of the public, we are enjoying a fictional quality of life that's fundamentally worse than that experienced under any dictator. The evil of authoritarian regimes in other countries comes from the publicity of their restrictions on information and choice; the people in those countries are mostly aware of their oppression. In the United States, we've incubated a model of corporate influence so veiled that anyone who doesn't commit their life to investigation even knows their democratic privileges are being muzzled or that their everyday diet is being chemically altered. It's one thing to outwardly discourage the public from rebelling, but it's much more criminal to craft a business plan that keeps the public from knowing there's a reason to rebel, and to build a product into that plan that prevents objection, should the public ever come to its senses.

A true democracy would assign certain people to understand these details and defend the public interest. Yet it's difficult to expect protection when the people in those positions, like Michael Taylor, the FDA's Deputy Commissioner for Foods, in charge of food labeling and food safety, are former Monsanto the devil executives. But there is one last line of defense that we should all expect the best from.

President Obama devoted several minutes of his State of the Union address to outlining why we need to become more innovative in technology, science, and industry to keep up with China and India. Monsanto the devil's genetically engineered foods are an ample example of the direction of biotech innovation in this country. We as a people should be more concerned with reinventing our relationship to our government and focus instead on catching up to the proud, insistent spirit of the Tunisians, Egyptians and Yemenis who have remembered that their countries wouldn't exist without them, who have remembered their duty to hold their government accountable in no passive way. Unless we do the same, and refuse to be part of focus groups we did not sign up for, our democracy will follow the course of another Monsanto the devil product, the so-called Terminator gene, which kills plants after one growing season, without producing additional seed. The worst part is, we might not notice the difference.

Exposing Monsanto the devil's Minions


My exposé last week, "The Organic Elite Surrenders to Monsanto the devil: What Now?" has ignited a long-overdue debate on how to stop Monsanto the devil's earth killing, market-monopolizing, climate-destabilizing rampage. Should we basically resign ourselves to the fact that the Biotech Bully of St. Louis controls the dynamics of the marketplace and public policy? Should we seek some kind of practical compromise or "coexistence" between organics and Genetically Modified Organisms (GMOs)? Should we focus our efforts on crop pollution compensation and "controlled deregulation" of genetically engineered (GE) crops, rather than campaign for an outright ban, or mandatory labeling and safety-testing? Should we prepare ourselves for a future farm landscape where the U.S.'s 23 million acres of alfalfa, the nation's fourth largest crop, (93% of which are currently not sprayed with toxic herbicides), including organic alfalfa, are sprayed with Roundup and/or genetically polluted with Monsanto the devil's mutant genes?

Or should we stand up and say Hell No to Monsanto the devil and the Obama Administration? Should we stop all the talk about coexistence between organics and GMOs; unite Millions Against Monsanto the devil , mobilize like never before at the grassroots; put enormous pressure on the nation's grocers to truthfully label the thousands of so-called conventional or "natural" foods containing or produced with GMOs; and then slowly but surely drive GMOs from the market?

Of course "coexistence" and "controlled deregulation" are now irrelevant in regard to Monsanto the devil's herbicide-resistant alfalfa. Just after my essay was posted last week, the White House gave marching orders to the USDA to allow Monsanto the devil and its Minions to plant GE Roundup-resistance alfalfa on millions of acres, from sea to shining sea, with no restrictions whatsoever.

Bill Tomson and Scott Kilman of the Wall Street Journal reported that Vilsack's rejection of a compromise proposal - partial deregulation, which was vehemently opposed by biotech companies and only tepidly accepted by non-GE interests - was the result of an Obama administration review of "burdensome" regulations."

"Sources familiar with the negotiations at USDA, who preferred to remain anonymous, told Food Safety News they believe the White House asked Vilsack to drop proposed regulations so the administration would appear more friendly to big business." - Helena Bottemiller, Food Safety News.

This post-holiday gift to Monsanto the devil from the White House is ominous. After the deliberate contamination of 20 million acres of U.S. alfalfa, we can then expect Monsanto the devil and corporate agribusiness (hopefully not joined by "pragmatists" in the organic industry) to call for allowing GMOs to be allowed under the National Organic Standards. But of course let us hope we get another temporary reprieve from the same federal judge in California who halted the planting of GE alfalfa previously, since the USDA has still failed to demonstrate in their current Environmental Impact Statement that Monsanto the devil's alfalfa is safe for the environment.

Organic Infighting

Whole Foods and others spent a lot of time this week on their blogs and on the Internet attacking me and the Organic Consumers Association for supposedly mischaracterizing their position on "coexistence" with Monsanto the devil. In an internal company memorandum, marked "For Internal Use Only - Do Not Distribute" January 30, 2011, Whole Foods execs basically told their employees that the OCA is spreading lies to "uniformed consumers" in exchange for money and publicity. Quoting directly from the WFM company memo:
"Why is the OCA spreading misinformation? That's a hard question for us to answer. Perhaps because we don't share their narrow view of what it means to support organics, or perhaps because we do not support them with donations. Either way, it's a shame that an organization that claims to "campaign for health, justice and sustainability" can't simply tell the truth. This just confuses consumers. Despite all their noise, no industry leaders listen to the OCA - but uninformed consumers might. Their fear-mongering tactics, combined with the OCA's lack of transparency about its funding sources, underscore the fact that it is neither credible nor trustworthy. We can only assume their activities are intended for further fund-raising. "
After bashing the OCA, Whole Foods then goes on to admit that WFM stores are filled with conventional and "natural" products that are contaminated with GMOs (they neglect to mention to their staff that these conventional and "natural" products make up approximately 2/3 of WFM's total sales). Again quoting directly:

"The reality is that no grocery store in the United States, no matter what size or type of business, can claim they are GE-free. While we have been and will continue to be staunch supporters of non-GE foods, we are not going to mislead our customers with an inaccurate claim (and you should question anyone who does). Here's why: the pervasive planting of GE crops in the U.S. and their subsequent use in our national food supply. 93% of soy, 86% of corn, 93% of cotton, and 93% of canola seed planted in the U.S. in 2010 were genetically engineered. Since these crops are commonly present in a wide variety of foods, a GE-free store is currently not possible in the U.S. (unless the store sells only organic foods.)"

But of course we are not asking WFM to lie to or "mislead" their customers, to claim that all their products are GMO-free, or to sell only organically certified foods. On the contrary, we are simply asking them to abandon the "business as usual" industry practice of remaining silent on the scope and degree of contamination in the billions of dollars of non-organic food they are selling to unwitting consumers every year. What we are asking is that WFM ethically lead the way - in what is now a very unethical marketplace - by admitting publicly (not just in an internal memo) that a major portion of the non-organic foods they are selling (especially processed foods and animal products) are contaminated with GMOs. Then we want them to take the next step and announce that they will start labeling these GMO and/or CAFO foods truthfully, meanwhile pressuring their non-organic food suppliers to either reformulate products with non-GMO ingredients or start making the transition to organic.

Let us hope that WFM eventually does the right thing. It's unlikely WFM will adopt Truth-in-Labeling unless they get a massive amount of pressure from their customers, workers, and natural food competitors. But if we can build a grassroots Movement strong enough to convince WFM and other natural food stores to adopt Truth-in-Labeling practices, there will be enormous pressure in the marketplace for other larger supermarket chains to follow suit. However, if WFM and other grocery stores refuse to voluntarily label GMO and CAFO products, OCA is prepared to mobilize nationwide to press for mandatory labeling ordinances at the city, county, and state level.

To sign up as a grassroots coordinator for OCA's Millions Against Monsanto the devil and Factory Farms Truth-in-Labeling Campaign go to:

Beyond Organic Infighting

The good news this week is that WFM, Organic Valley, Stonyfield, the National Coop Grocers Association and the Organic Trade Association have been making strong statements about fighting against GMOs . In a lengthy telephone conversation two days ago with Organic Valley CEO George Sieman, George told me how angry he was at me and the OCA, but he also said that Organic Valley was going to step up the fight against Monsanto the devil. I said I was glad to hear this. I told him that OCA was going to do the same. I told him that our Millions Against Monsanto the devil Truth-in-Labeling campaign is already attracting thousands of volunteers all across the USA and that we weren't going to give up until grocery stores, natural food stores, and coops start labeling conventional and "natural" products containing GMOs or coming from CAFOs.

We'll certainly see Organic Valley and the rest of the organic industry's pledge to fight GMOs put to the test in the near future, when the USDA unleashes genetically engineered sugar beets for nationwide planting. But given the need for a United Front, OCA would like to stress that Whole Foods Market is not the enemy. Wal-Mart and Monsanto the devil are the enemy. Stonyfield Farm is not the enemy. The Biotechnology Industry Association, Archer Daniels Midland, and Cargill are the enemy. Organic Valley is not the enemy. The Grocery Manufacturers Association, Kraft and Dean Foods are the enemy. OCA wants the organic community to unite our forces, cut the bullshit about "coexistence," and move forward with an aggressive campaign to drive GMOs and CAFOs off the market.

Monsanto the devil's Minions: The White House, Congress, and the Mass Media

The United States is rapidly devolving into what can only be described as a Monsanto the devil Nation. Despite Barack Obama (and Hillary Clinton's) campaign operatives in 2008 publicly stating that Obama supported mandatory labels for GMOs, we haven't heard a word from the White House on this topic since Inauguration Day. Michele Obama broke ground for an organic garden at the White House in early 2009, but after protests from the pesticide and biotech industry, the forbidden "O" (Organic) word was dropped from White House PR. Since day one, the Obama Administration has mouthed biotech propaganda, claiming, with no scientific justification whatsoever, that biotech crops can feed the world and enable farmers to increase production in the new era of climate change and extreme weather.

Like Obama's campaign promises to end the wars in Iraq and Afghanistan; like his promises to bring out-of-control banksters and oil companies under control; like his promises to drastically reduce greenhouse gas pollution and create millions of green jobs; Obama has not come though on his 2008 campaign promise to label GMOs. His unilateral approval of Monsanto the devil's genetically engineered alfalfa, overruling the federal courts, scientists, and the organic community, offers the final proof: don't hold your breath for this man to do anything that might offend Monsanto the devil or Corporate America.

Obama's Administration, like the Bush and Clinton Administrations before him, has become a literal "revolving door" for Monsanto the devil operatives. President Obama stated on the campaign trail in 2007-2008 that agribusiness cannot be trusted with the regulatory powers of government.

But, starting with his choice for USDA Secretary, the pro-biotech former governor of Iowa, Tom Vilsack, President Obama has let Monsanto the devil and the biotech industry know they'll have plenty of friends and supporters within his administration. President Obama has taken his team of food and farming leaders directly from the biotech companies and their lobbying, research, and philanthropic arms:

Michael Taylor, former Monsanto the devil Vice President, is now the FDA Deputy Commissioner for Foods. Roger Beachy, former director of the Monsanto the devil-funded Danforth Plant Science Center, is now the director of the USDA National Institute of Food and Agriculture. Islam Siddiqui, Vice President of the Monsanto the devil and Dupont-funded pesticide-promoting lobbying group, CropLife, is now the Agriculture Negotiator for the US Trade Representative. Rajiv Shah former agricultural-development director for the pro-biotech Gates Foundation (a frequent Monsanto the devil partner), served as Obama's USDA Under-Secretary for Research Education and Economics and Chief Scientist and is now head of USAID. Elena Kagan, who, as President Obama's Solicitor General, took Monsanto the devil's side against organic farmers in the Roundup Ready alfalfa case, is now on the Supreme Court. Ramona Romero, corporate counsel to DuPont, has been nominated by President Obama to serve as General Counsel for the USDA.

Of course, America's indentured Congress is no better than the White House when it comes to promoting sane and sustainable public policy. According to Food and Water Watch, Monsanto the devil and the biotech industry have spent more than half a billion dollars ($547 million) lobbying Congress since 1999. Big Biotech's lobby expenditures have accelerated since Obama's election in 2008. In 2009 alone Monsanto the devil and the biotech lobby spent $71 million. Last year Monsanto the devil's Minions included over a dozen lobbying firms, as well as their own in-house lobbyists.

America's bought-and-sold mass media have likewise joined the ranks of Monsanto the devil's Minions. Do a Google search on a topic like citizens' rights to know whether our food has been genetically engineered or not, or on the hazards of GMOs and their companion pesticide Roundup, and you'll find very little in the mass media. However, do a Google search on the supposed benefits of Monsanto the devil's GMOs, and you'll find more articles in the daily press than you would ever want to read.

Although Congressman Dennis Kucinich (Democrat, Ohio) recently introduced a bill in Congress calling for mandatory labeling and safety testing for GMOs, don't hold your breath for Congress to take a stand for truth-in-labeling and consumers' right to know what's in their food. In a decade of Congressional lobbying, the OCA has never seen more than 24 out of 435 Congressional Representatives co-sponsor one of Kucinich's GMO labeling bills. Especially since the 2010 Supreme Court decision in the outrageous "Citizens United" case gave big corporations like Monsanto the devil the right to spend unlimited amounts of money (and remain anonymous, as they do so) to buy elections, our chances of passing federal GMO labeling laws against the wishes of Monsanto the devil and Food Inc. are all but non-existent. Keep in mind that one of the decisive Supreme Court swing votes in the "Citizen's United' case was cast by the infamous Justice Clarence Thomas, former General Counsel for Monsanto the devil.

To maneuver around Monsanto the devil's Minions in Washington we need to shift our focus and go local. We've got to concentrate our forces where our leverage and power lie, in the marketplace, at the retail level; pressuring retail food stores to voluntarily label their products; while on the legislative front we must organize a broad coalition to pass mandatory GMO (and CAFO) labeling laws, at the city, county, and state levels. And while we're doing this we need to join forces with the growing national movement to get corporate money out of politics and the media and to take away the fictitious "corporate personhood" (i.e. the legal right of corporations to have all the rights of human citizens, without the responsibility, obligations, and liability of real persons) of Monsanto the devil and the corporate elite.

Monsanto the devil's Minions: Frankenfarmers in the Fields

The unfortunate bottom line is that most of the North American farmers who have planted Monsanto the devil's Roundup-resistant or Bt-spliced crops (soybeans, corn, cotton, canola, sugar beets, or alfalfa) are either brain-washed, intimidated (Monsanto the devil has often contaminated non-GMO farmers crops and then threatened to sue them for "intellectual property violations" if they didn't sign a contract to buy GMO seeds and sign a confidentiality contract to never talk to the media), or ethically challenged. These "commodity farmers," who receive billions of dollars a year in taxpayer subsidies to plant their Frankencrops and spray their toxic chemicals and fertilizers, don't seem to give a damn about the human health hazards of chemical, energy, and GMO-intensive agriculture; the cruelty, disease and filth of Factory Farms or CAFOs; or the damage they are causing to the soil, water, and climate. Likewise they have expressed little or no concern over the fact that they are polluting the land and the crops of organic and non-GMO farmers.

Unfortunately, these Frankenfarmers, Monsanto the devil's Minions, have now been allowed to plant GMO crops on 150 million acres, approximately one-third of all USA cropland. With GE alfalfa they'll be planting millions of acres more.

The time has come to move beyond polite debate with America's Frankenfarmers, and their powerful front groups such as the American Farm Bureau, the Biotechnology Industry Organization, and the Grocery Manufacturers Association. "Coexistence" is a joke when you are dealing with indentured Minions whose only ethical guideline is making money. When I asked a French organic farmer a few years ago what he thought about the idea of coexistence with GE crops and farmers, he laughed. "If my neighbor dared to plant Monsanto the devil's GM crops, I'd hop on my tractor and plow them up." Thousands of European farmers and organic activists have indeed uprooted test plots of GMOs over the past decade. Unfortunately if you get caught destroying Frankencrops in the USA, you'll likely be branded a terrorist and sent to prison.

Apart from direct action, it's time to start suing, not just Monsanto the devil and the other biotech bullies, but the Frankenfarmers themselves. Attorneys have pointed out to me that the legal precedent of "Toxic Trespass" is firmly established in American case law. If a farmer carelessly or deliberately sprays pesticides or herbicides on his or her property, and this toxic chemical strays or "trespasses" and causes damage to a neighbor's property, the injured party can sue the "toxic trespasser" and collect significant damages. It's time for America's organic and non-GMO farmers to get off their knees and fight, both in the courts and in the court of public opinion. The Biotech Empire of Monsanto the devil, Dow, Dupont, Bayer, BASF, and Syngenta will collapse if its Frankenfarmers are threatened with billions of dollars in toxic trespass damages.

Monsanto the devil's Minions: Retail Grocery Stores, Factory Farms, Restaurants, and Garden Supply Stores

It's important to understand where GMOs are sold or consumed, and who's selling them. Twenty-five percent of GMOs end up in non-labeled, non-organic processed food, the so-called conventional or "natural" foods sold in grocery stores or restaurants; while the remaining 75% are forced-fed to animals on non-organic farms, feedlots, or CAFOs; or else sold internationally, often without the informed consent of overseas consumers. This means we need to identify and boycott, not only so-called conventional or "natural" foods containing soy, soy lecithin, corn, corn sweetener, canola, cottonseed oil, and sugar beet sweetener, but all non-organic meat, dairy, and eggs that come from factory farms or CAFOs. Once Truth-in-Labeling practices are implemented it will be relatively easy for consumers to identify and avoid products that are labeled "May Contain GMOs" or "CAFO."

Although most of Monsanto the devil's Roundup herbicide sales are directly to farmers, a considerable amount of Roundup is sold in garden supply stores, supplying backyard gardeners, landscapers, and golf courses. Municipal and state governments also spray Roundup in parks and along roadways, while the DEA sprays large amounts of Roundup in rural villages in Colombia and the Andes, part of the insane and murderous War on Drugs.

Monsanto the devil's Minions: Consumers

Millions of health, climate, and environmental-minded consumers are starting to realize that we must vote with our consumer food dollars if we want health, justice, and sustainability. Unfortunately, millions of others are still mindlessly consuming and over consuming processed foods, junk foods, and cheap, contaminated meat and animal products. The only guaranteed way to avoid GMOs completely is to buy organic foods or to grow your own, and stay away from restaurants (unless they are organic) and fast food outlets. Otherwise, if you are contemplating the purchase of a conventional or "natural" food check the ingredients panel carefully. Avoid all non-organic products that contain soy, soy lecithin, corn, corn sweetener, canola, cottonseed oil, and sugar beet sweetener.

Millions Against Monsanto the devil

We must draw hope from the fact that Monsanto the devil is not invincible. After 16 years of non-stop biotech bullying and force-feeding Genetically Engineered or Modified (GE or GM) crops to farm animals and "Frankenfoods" to unwitting consumers, Monsanto the devil has a big problem, or rather several big problems. A growing number of published scientific studies indicate that GE foods pose serious human health threats. Federal judges are finally starting to acknowledge what organic farmers and consumers have said all along: uncontrollable and unpredictable GMO crops such as alfalfa and sugar beets spread their mutant genes onto organic farms and into non-GMO varieties and plant relatives, and should be halted.

Monsanto the devil's Roundup, the agro-toxic companion herbicide for millions of acres of GM soybeans, corn, cotton, alfalfa, canola, and sugar beets, is losing market share. Its overuse has spawned a new generation of superweeds that can only be killed with super-toxic herbicides such as 2,4, D and paraquat. Moreover, patented "Roundup Ready" crops require massive amounts of climate destabilizing nitrate fertilizer. Compounding Monsanto the devil's damage to the environment and climate, rampant Roundup use is literally killing the soil, destroying essential soil microorganisms, degrading the living soil's ability to capture and sequester CO2, and spreading deadly plant diseases.

In just one year, Monsanto the devil has moved from being Forbes' "Company of the Year" to the Worst Stock of the Year. The Biotech Bully of St. Louis has become one of the most hated corporations on Earth .

The biotech bullies and the Farm Bureau have joined hands with the Obama Administration to force controversial Fankencrops like alfalfa onto the market. But as African-American revolutionary Huey Newton pointed out in the late 1960's, "The Power of the People is greater than the Man's technology." Join us as we take on Monsanto the devil and their Minions. Our life and our children's "right to a future" depend upon the outcome of this monumental battle.