Saturday, May 7, 2011

Hi, I'm a Marvel, I'm a DC

In honor of today being "Free Comic Book Day," I present this:

Friday, May 6, 2011

NASA Announces Results of Epic Space-Time Experiment

Author: Dr. Tony Phillips - NASA

May 4, 2011: Einstein was right again. There is a space-time vortex around Earth, and its shape precisely matches the predictions of Einstein's theory of gravity.

Researchers confirmed these points at a press conference today at NASA headquarters where they announced the long-awaited results of Gravity Probe B (GP-B).

"The space-time around Earth appears to be distorted just as general relativity predicts," says Stanford University physicist Francis Everitt, principal investigator of the Gravity Probe B mission.

GP-B (twist, 550px)
An artist's concept of GP-B measuring the curved spacetime around Earth. [more]

"This is an epic result," adds Clifford Will of Washington University in St. Louis. An expert in Einstein's theories, Will chairs an independent panel of the National Research Council set up by NASA in 1998 to monitor and review the results of Gravity Probe B. "One day," he predicts, "this will be written up in textbooks as one of the classic experiments in the history of physics."

Time and space, according to Einstein's theories of relativity, are woven together, forming a four-dimensional fabric called "space-time." The mass of Earth dimples this fabric, much like a heavy person sitting in the middle of a trampoline. Gravity, says Einstein, is simply the motion of objects following the curvaceous lines of the dimple.

If Earth were stationary, that would be the end of the story. But Earth is not stationary. Our planet spins, and the spin should twist the dimple, slightly, pulling it around into a 4-dimensional swirl. This is what GP-B went to space in 2004 to check.

The idea behind the experiment is simple:

Put a spinning gyroscope into orbit around the Earth, with the spin axis pointed toward some distant star as a fixed reference point. Free from external forces, the gyroscope's axis should continue pointing at the star--forever. But if space is twisted, the direction of the gyroscope's axis should drift over time. By noting this change in direction relative to the star, the twists of space-time could be measured.

In practice, the experiment is tremendously difficult.
GP-B (gyro, 200px)
One of the super-spherical gyroscopes
of Gravity Probe B. [more]

The four gyroscopes in GP-B are the most perfect spheres ever made by humans. These ping pong-sized balls of fused quartz and silicon are 1.5 inches across and never vary from a perfect sphere by more than 40 atomic layers. If the gyroscopes weren't so spherical, their spin axes would wobble even without the effects of relativity.

According to calculations, the twisted space-time around Earth should cause the axes of the gyros to drift merely 0.041 arcseconds over a year. An arcsecond is 1/3600th of a degree. To measure this angle reasonably well, GP-B needed a fantastic precision of 0.0005 arcseconds. It's like measuring the thickness of a sheet of paper held edge-on 100 miles away.

"GP-B researchers had to invent whole new technologies to make this possible," notes Will.
They developed a "drag free" satellite that could brush against the outer layers of Earth's atmosphere without disturbing the gyros. They figured out how to keep Earth's magnetic field from penetrating the spacecraft. And they created a device to measure the spin of a gyro--without touching the gyro. More information about these technologies may be found in the Science@NASA story "A Pocket of Near-Perfection." 

Pulling off the experiment was an exceptional challenge. But after a year of data-taking and nearly five years of analysis, the GP-B scientists appear to have done it.

"We measured a geodetic precession of 6.600 plus or minus 0.017 arcseconds and a frame dragging effect of 0.039 plus or minus 0.007 arcseconds," says Everitt.

For readers who are not experts in relativity: Geodetic precession is the amount of wobble caused by the static mass of the Earth (the dimple in spacetime) and the frame dragging effect is the amount of wobble caused by the spin of the Earth (the twist in spacetime). Both values are in precise accord with Einstein's predictions.

"In the opinion of the committee that I chair, this effort was truly heroic. We were just blown away," says Will.
GP-B (black hole, 200px)
An artist's concept of twisted spacetime around 
a black hole. Credit: Joe Bergeron of Sky 
& Telescope magazine.
The results of Gravity Probe B give physicists renewed confidence that the strange predictions of Einstein's theory are indeed correct, and that these predictions may be applied elsewhere. The type of spacetime vortex that exists around Earth is duplicated and magnified elsewhere in the cosmos--around massive neutron stars, black holes, and active galactic nuclei.

"If you tried to spin a gyroscope in the severely twisted space-time around a black hole," says Will, "it wouldn't just gently precess by a fraction of a degree. It would wobble crazily and possibly even flip over."

In binary black hole systems--that is, where one black hole orbits another black hole--the black holes themselves are spinning and thus behave like gyroscopes. Imagine a system of orbiting, spinning, wobbling, flipping black holes! That's the sort of thing general relativity predicts and which GP-B tells us can really be true.

The scientific legacy of GP-B isn't limited to general relativity. The project also touched the lives of hundreds of young scientists:

"Because it was based at a university many students were able to work on the project," says Everitt. "More than 86 PhD theses at Stanford plus 14 more at other Universities were granted to students working on GP-B. Several hundred undergraduates and 55 high-school students also participated, including astronaut Sally Ride and eventual Nobel Laureate Eric Cornell."

NASA funding for Gravity Probe B began in the fall of 1963. That means Everitt and some colleagues have been planning, promoting, building, operating, and analyzing data from the experiment for more than 47 years—truly, an epic effort.

What's next?

Everitt recalls some advice given to him by his thesis advisor and Nobel Laureate Patrick M.S. Blackett: "If you can't think of what physics to do next, invent some new technology, and it will lead to new physics."

"Well," says Everitt, "we invented 13 new technologies for Gravity Probe B. Who knows where they will take us?"

This epic might just be getting started, after all….

Thursday, May 5, 2011

Citizens United Decision Profoundly Affects Political Landscape

by Spencer MacColl

Unprecedented political spending. Secret donors. New ways for unions and corporations to spend money on politics.

An analysis by the Center for Responsive Politics reveals that the Citizens United v. Federal Election Commission Supreme Court ruling of January 2010 has profoundly affected the nation's political landscape. 

Small Business Owners Demand Repeal of Bush Tax Cuts for the Rich

by Zach Carter 
WASHINGTON -- Michael Teahan, like his father, mother, and uncles before him, is a small business owner. The 52-year-old has spent most of his adult life running his own businesses: a restaurant, a coffee bar and various companies involved in the espresso machine business.
"I was the only person in my family to go to college, because that’s not what we did -- we all opened up businesses," Teahan says. "For some people, that’s a big hurdle ... for us, it was like having lunch."

Teahan currently operates Espresso Resource, a company that imports espresso machine parts from Europe to sell to U.S. restaurants and coffee shops. And he’s doing very well for himself: The two-man operation clears about $1 million a year in total sales, Teahan says -- enough to secure himself annual income in excess of $250,000.

That makes Teahan one of the few small business owners to actually benefit from the Bush administration's tax cuts for the wealthy. He says the cuts save him about $12,000 a year, compared to what he paid before they were enacted. But as debates over the federal budget deficit have intensified, Teahan has found the political discussion increasingly divorced from the reality of his experience as a small business owner.

Tax cuts for the wealthy, according to Teahan, will do nothing to bolster his firm. They won’t affect his hiring decisions, they won’t encourage him to buy new equipment or help him move into a bigger warehouse. He says all of those decisions -- the nuts and bolts of actually running a small company -- depend on the his customers' economic conditions, not his personal tax rate.

"What we do in business, how we spend our money, how we allocate our resources -- that has very little to do with tax policy," Teahan says. "I map my business based on my customers, and what my customers want to buy, and what they can afford to buy."

It’s a common complaint from small business owners. While congressional Republicans and entrenched corporate lobbying groups like the U.S. Chamber of Commerce -- which is holding a Wednesday meeting on small business priorities -- and the National Federation of Independent Business (NFIB) have been pushing hard to preserve the Bush tax cuts for the wealthy by touting the interests of small firms, much of the small business community is demanding that those very tax cuts be repealed. The tax breaks for the wealthy will add $700 billion to the debt over the next 10 years, according to the White House's Office of Management and Budget. And many small firms say that money would be better spent on direct aid to the middle class.

"We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."

Poore emphasizes, however, that -- like the vast majority of small business owners -- he isn't among the elite class of taxpayers making $250,000 a year or more. He and his wife take in a combined $80,000 a year from their business. Teahan is an outlier, because most small businesses don’t make nearly enough to benefit from the Bush tax cuts for the wealthy.

"Most small business owners make less than $250,000 and so the tax cuts don’t benefit most of us, and they’re really taking important valuable resources away from the federal budget," says ReShonda Young, corporate vice president and operations manager for Alpha Express, a Waterloo, Iowa-based company that specializes in transportation services and snow removal.

Young also serves on the executive board of Main Street Alliance, a coalition of small firms. Main Street Alliance notes that 98 percent of small businesses will not be affected by the Bush tax cuts in any way.

"The reality is that most businesses don’t pay the top marginal tax rate,” notes John Irons, an economist with the left-leaning Economic Policy Institute. "Most small businesses won’t be affected at all by a reversal of Bush tax cuts for the rich.”

For his part, Poore, the screen-printer, sees some dark humor in the entire notion of wealthy small business owners. He says that any accountant "that allows $250,000 in profit to get through to my bottom line would be fired."

Teahan emphasizes that even the few firms that do qualify for the Bush tax cuts don't boost their hiring in response to the Bush tax cuts. For decades, small companies have been able to secure tax breaks on the expenses that actually affect their bottom line -- labor, rent, equipment and other necessary costs. The Bush tax cuts for the wealthy, by contrast, only affect how much of a firm's total profit owners keep for themselves.

"The economic premise, that people won’t hire because they might have to pay more taxes if they make more money, is beyond laughable,” says Lew Prince, owner of the Vintage Vinyl record store in St. Louis, Mo. "You hire when you think there’s a way you can make more money with that hire. The percentage the government takes out of it has almost nothing to do with it.”

So what really affects small businesses? High health care costs, which will likely be ameliorated by President Barack Obama’s health care reform, and limited access to credit in the wake of the financial crisis. Just as important to Teahan, Poore, Prince and other small business owners are federal economic policies that directly benefit their middle class customers. If extending tax breaks to millionaires means denying aid to the middle class, their firms will suffer.

"My customers work for a living,” Teahan says. "They’re working on espresso machines and selling coffee. They’re not these uber-rich Wall Street bankers. [My customers] need the money. If they’ve got money, then I'm doing great."

The upper-end Bush tax cuts are not corporate taxes -- they’re taxes on wealthy individuals. Many small firms are not corporations, and owners report their profits as the individual income of their owners. Some firms, like Teahan’s, choose to incorporate, though they never officially report a profit because all excess earnings are paid out to the owners.

The U.S. Chamber and the NFIB say that, because these business profits are reported as individual income, allowing tax hikes for wealthy individuals will hurt small business. The U.S. Chamber declined to comment for this story but NFIB spokesman Kevan Chapman says his organization has repeatedly polled its members and found that they favor the Bush tax cuts.
"We have over 300,000 members who would disagree with the notion that we don’t represent small business. The last time we balloted this measure was in November, and 89 percent said the federal government should extend those tax breaks," Chapman said.

There were 26.9 million small businesses in the United States in 2008, according to the Small Business Administration, though that figure includes millions of people who work on contract for employers but have no business, in the traditional sense, of their own. There were 6 million small firms with at least one employee.

Another small business groups beg to differ with the NFIB. The American Sustainable Business Council, which represents 70,000 small firms and social groups, maintains that "there is a strong business case for letting the tax relief for the wealthiest expire,” noting that doing so would "reduce the federal budget deficit and lessen the crisis with state and local budgets around the country.”

Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce has written on the Bush tax cuts issue for The Huffington Post. He emphasizes that many of the people who report business income on their personal income tax returns are bond traders, partners in corporate law firms, lobbyists and hedge fund managers -- not the kind of activity that most people think of as "small business.”

These alternative small business groups say that the debate over the Bush tax cuts has been heavily skewed by talking points from the NFIB and the Chamber. The Chamber has a long track-record of backing the economic priorities of corporate elites, while the NFIB has increasingly become a partisan wing of the Republican Party, as HuffPost detailed in January.
While the NFIB continues to support the indefinite extension of the Bush tax cuts for the rich, it opted last year not to fight for a bill that would expand lending to small firms. The tax cuts are like termites, eating away at our economy and our nation’s future,” says Holly Sklar, the executive director of Business for Shared Prosperity.

"Any small businessman who is in the NFIB is paying his enemies to stab him in the back,” says Prince, the record store owner.

Alpha Express VP Young agrees. "It's the corporate interests and the wealthy stealing our name to further their agenda," she argues.

While the upper-end Bush tax cuts would increase the federal debt by $700 billion over the next 10 years, the broader class of Bush tax cuts, which affect many middle-class taxpayers, would cost $3.1 trillion over the next decade, according to the Congressional Budget Office.

"We should have learned from the last decade that slashing taxes for the richest Americans is a great way to grow the national debt –- not jobs," says Holly Sklar, the executive director of Business for Shared Prosperity, a non-partisan small-business group funded predominantly by the Ford Foundation. "Few small businesses benefit from the top rate tax cuts, but many lose from a shrinking middle class and deepening budget cuts in everything from the Small Business Administration and education to vital infrastructure repair and modernization. The tax cuts are like termites, eating away at our economy and our nation’s future.”

With Liberty and Justice for… Corporations?

On April 27, 2011, the Supreme Court of the United States once again ruled in favor of big business.  In the highly anticipated case of AT&T Mobility v. Concepcion, the Roberts led conservative block of the Supreme Court ruled 5-4 that federal law trumps state law in allowing companies to use arbitration clauses to prohibit consumers from joining class actions against the companies.

The case involved a California couple, Vincent and Liza Concepcion, who were charged $30.22 sales tax on the full retail price of a cellphone that was advertised as “free.”  They filed a lawsuit against AT&T for deceptive practices on behalf of a class of consumers who had also overpaid.  But the couple, along with their fellow plaintiffs, had signed a contract with AT&T that contained a “mandatory arbitration clause” which required them to settle any disputes through arbitration (a private legal proceeding) and barred them from seeking class-action treatment with other consumers, whether through arbitration or in a lawsuit brought in a traditional court.

Initially, both a federal district court and the Ninth Circuit Court sided with the Concepcions, saying it was unfair under a 2005 California Supreme Court ruling, for contracts to ban class-action litigation.  However, this was overturned by the recent Supreme Court decision, which says federal law, specifically the Federal Arbitration Act of 1925, trumps state law.

Aside from the fact that the conservative Justices who purport to be staunch defenders of “states rights” abandoned their principles for corporate interests, this ruling has chilling implications for future corporate accountability.  Corporations are now free to legally bar victims of their abuse from collectively suing in a court of law if the abused have signed a contract that includes a mandatory arbitration clause, regardless of state laws to the contrary.  This could literally render companies immune from class actions and overall accountability.

At first glance, it seems reasonable to conclude that individuals should simply steer clear of these types of contracts in order to avoid waiving their rights.  But most people are unaware that mandatory arbitration clauses are commonly used in product and service contracts, and sometimes in employment contracts – usually found buried in the fine print of billing inserts, employment handbooks, health insurance plans, and dealership agreements.

In a statement after the ruling, Deepak Gupta, a lawyer with the public interest group Public Citizen who argued the case on behalf of the Concepcions, called the decision a “crushing blow to American consumers and employees, ruling that companies can ban class actions in the fine print of contracts. Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices. Class actions are an essential tool for justice in our society. Brown v. Board of Education was a class action. The fate of class actions should not be decided through the fine print of take-it-or-leave-it contracts.”

Pro-Business groups, most notably the US Chamber of Commerce’s Institute for Legal Reform, argue that arbitration is an efficient, effective, and less expensive means of resolving disputes for consumers as well as businesses.  Of course, what they mean is that it’s efficient, effective and less expensive for corporations, since companies are far less likely to use arbitration clauses in contracts with each other than they are in contracts with consumers.   And if arbitration is truly superior to the courts, it should be up to consumers and employees to voluntarily choose their preferred method of redress should a dispute arise.

In reality, arbitration is a closed, private process often with little or no written record.

When California changed its law to require that arbitration results be publicly recorded, Public Citizen reviewed 34,000 California cases, and the results were stunning.  The study found that consumers had lost more than 94 percent of cases in an arbitrations plagued by conflicts of interest, with arbitrators benefiting financially from ruling in favor of businesses.  Overall, they found that forced arbitration creates a systemic bias in favor of businesses while offering few, if any, meaningful deterrents against negligence or even foul play.

Needless to say, these contracts are intended to undermine consumer protection, civil rights, and other laws that level the playing field between big business and individuals. And because arbitration clauses are presented on a take-it-or-leave-it basis, individuals are left with no choice but to waive their rights.  Given these circumstances, it’s no suprise that AT&T had the backing of the Chamber of Commerce, Comcast, Dell, and DirectTV.  A clear pattern of the Supreme Court’s conservative majority ruling in favor of corporations while stripping away the power of individuals has emerged, and AT&T Mobility is icing on the Chamber’s eight layer cake.

In an article that appeared in Mother Jones late last year, Stephanie Mencimer quoted Paul Bland, a lawyer with the public interest law firm Public Justice, who argued that “In Concepcion, AT&T and the Chamber of Commerce are asking the Supreme Court to do the same thing for consumer protection that Citizens United did for election law…the Chamber wants the Court to overturn a number of precedents and eliminate the most important safeguards that have limited corporate abuse in the past.”

Mencimer points out that the Chamber has been systematically fighting to limit consumers access to the courts for years, particularly through class actions.  She goes on to say, “In 2005, it finally succeeded in winning legislation that made it much harder to bring such cases in state courts, after investing more than $20 million in lobbying Congress. But it didn’t stop there. It has defended the right of big companies to use contracts to wipe out whatever legal rights for consumers remained.”

At the behest of their corporate overlords, the Supremes have stripped away consumers last remaining recourse against corporate wrongdoing: class actions.  Corporations are actively rigging our civil justice system to shield themselves from accountability for fraud, discrimination, and other illegal practices, and so far they have been successful.

If you believe the effects of these contracts are isolated to small dollar rip-offs, then think again.  There are a plethora of horror stories about individuals that have been victimized by forced arbitration.  Take the case of Jamie Leigh Jones.  She was 19 when she signed a job contract with Halliburton and went to work in Iraq, where she was drugged and gang raped by her co-workers.  After actively participating in the cover-up, Halliburton used the mandatory arbitration clause in her contract against her filing suit, eventually leading to legislation ordering the federal government not to work with contractors who force employes to sign arbitration agreements involving cases of sexual assault or Title VII violations.

In an article for the Boston Globe, Beth Healy highlights the heart-wrenching plight of Philip Grossman, who committed suicide after his family lost much of their savings from its encounter with a Bank of America broker.  The family tried to sue Bank of America but was denied access to the court because of an arbitration clause in Mr. Grossman’s brokerage account documents.  As Healy observed, “The Grossmans’ case shows how entrenched arbitration has become in the financial industry, demonstrating that even in an extreme case alleging wrongful death, aggrieved clients have no recourse other than a system that critics say favors investment firms.”

Keep in mind these cases took place before the current ruling.  In the aftermath of AT&T Mobility v. Concepcion, class action waiver provisions in arbitration agreements will almost always be found enforceable.  Except that now, these types of abuses are likely to be system-wide, since companies have no reason to fear potential class actions, and therefore little incentive to act ethically from the get-go.

Corporate attorneys recognize the significance of this ruling and are advising their clients to include class action bans in their arbitration clause.  This explains why companies, thrilled at the opportunity to avoid liability, are rushing to review and revise existing arbitration clauses in standard contracts to include class action bans.

The good news is efforts are underway to reverse this disgraceful Supreme Court ruling.  Senators Al Franken (D-MN) and Richard Blumenthal (D-CT), along with Rep. Hank Johnson (D-GA), have announced their plan to reintroduce the Arbitration Fairness Act. The bill, which was first introduced in 2007, would ban forced arbitration clauses in employment, consumer, and civil rights cases, and immediately faced heavy opposition from business interests, including the Chamber of Commerce.

Another ray of hope is Elizabeth Warren, head of the Consumer Financial Protection Bureau (CFPB).  According to Reuters, the Dodd-Frank law gives Warren’s consumer agency the power to regulate arbitration in consumer financial-services contracts, and the agency could conclude that class-action bans are harmful to consumers.  Given Warren’s vocal support of consumer safeguards, businesses are already nervously anticipating what her new agency may have in store.

In the meantime, I suggest you visit Fair Arbitration Now for ways to join fight against forced arbitration and end the abuse once and for all.

Health Insurers Are Writing Health Reform Regulations

One of the reasons I wanted to return to journalism after a long career as an insurance company PR man was to keep an eye on the implementation of the new health reform law. Many journalists who covered the reform debate have moved on, and some consider the writing of regulations to implement the legislation boring and of little interest to the public.

But insurance company lobbyists know the media are not paying much attention. And so they are able to influence what the regulations actually look like -- and how the law will be enforced -- with little scrutiny, much less awareness.

At a January meeting of several hundred patient and consumer advocates in Washington, a top aide to Health and Human Services Secretary Kathleen Sebelius all but pleaded with those in the audience to bombard the Obama Administration with messages insisting that the law be implemented as Congress intended. Rest assured, he told them, that the insurance industry's lobbyists were relentless in their demands that the regulations be written to give them the maximum slack.

One example: a section of the law expanding the rights of consumers to appeal adverse decisions made by their health plans.

"The Affordable Care Act will help support and protect consumers and end some of the worst insurance company abuses," read an Obama administration fact sheet from last summer.

The fact sheet went on to assure us that the new rules would guarantee consumer access to both internal and external appeals processes "that are clearly defined, impartial, and designed to ensure that, when health care is needed and covered, consumers get it."

"In implementing this law, we have worked to end the worst insurance company abuses, preserve existing options and slow premium increases," an administration official said. "Through it all, protecting consumers has been -- and remains -- our top priority."

The rules, originally scheduled to go into effect July 1, 2011, were actually written by the National Association of Insurance Commissioners (NAIC), which was tasked by Congress to develop several important regulations required by the law. If the law is implemented as the NAIC recommends, patients will be able to get an external appeal of a broad range of coverage denials, including denials that result from an insurer's decision to rescind, or cancel, a patient's policy -- not just denials made on the basis of "medical necessity" as determined by the insurer.

The NAIC's standards also say that insurers must provide consumers with clear information about their rights to both internal and external appeals, and that the companies must expedite the appeals process in urgent or emergency situations.

Insurers Push Back Hard; White House Capitulating

Well, surprise, insurers don't like being told what to do by regulators. So they're pushing back hard. Consumer advocates who have been in meetings at the White House in recent weeks say they believe the administration is bending over backward to accommodate the insurers.

"We have reason to fear that the external appeal regs won't be very consumer friendly," said Stephen Finan, senior director of policy for the American Cancer Society Action Network.

Finan and representatives of several other consumer and patient rights organizations, including Consumers Union, the National Partnership for Women and Families and the American Diabetes Association, wrote officials in the Departments of Labor and Health and Human Services in late January pleading with them to "stand firm for consumers" in rejecting several of the insurance industry's demands.

They expressed concern that the final regulations would allow insurers to stack the decks against patients by allowing health plans to deem a second-level internal appeal of a denial as meeting the requirement for an independent external appeal. They're also worried that health plans will not be required to provide clear and understandable information to policyholders about their denial decisions, that the plans will not provide adequate translation of written communications into other languages (insurers are claiming this would be too burdensome), and that they will be able to take as long as 72 hours (instead of the recommended 24) to decide an urgent appeal.

Equally as frustrating for the consumer advocates is the administration's indication that they will give the insurers until January 1, 2012, rather than July 1, 2011, to comply with the regulations.

Consumer advocates say the administration has told them that the reason it is proposing to delay the effective date of the new rules for half a year is to accommodate the health plans' enrollment cycles and marketing needs. Health plans do need adequate lead time to make changes to their systems and to prepare materials to inform their customers of new procedures, especially in multiple languages, so some of their push back is understandable. The new regulations will also add to the insurers' administrative costs, and the new law limits how much they can spend on overhead.

But the consumer groups believe the administration itself has caused some of the problems by taking so long to finalize the regulations. The NAIC got its work done comparatively swiftly.

"There is a clear pattern of leaning toward the insurance industry more than consumers," one of the patient advocates told me.

Industry Lobbyists Outnumber Consumer Advocates 100 to 1

The consumer advocates, most of whom not so long ago were applauding the Democrats for getting reform enacted, even if it fell short of their original goals, are becoming increasingly discouraged, partly because there are so many more lobbyists for the insurers than for consumers. It's hard to compete with them.

"We're outnumbered 100 to 1," said one of the consumer advocates.

"It's clear," he added, "that the insurers are willing to make life more difficult for patients" by trying to weaken and delay the consumer protections.

It's also clear that, at least for now, the insurers seem to have the upper hand in dealing with the White House.

Obama Plans Corporate Tax Cut In Year Of Record Profits

As nationwide budget protests continue this week, Treasury Secretary Timothy Geithner is prepared to unveil the Obama administration’s plan to lower the top corporate tax rate from the current 35 percent to less than 30 percent, and as low as 26 percent.

In order to pay for the cuts, the proposal calls for closing loopholes and slashing exemptions. Politico reports that Geithner has already begun meeting privately with CEOs, academics, labor unions, and liberal and conservative think tanks, and his aides say he is “encouraged by the response.”

Part of that optimism stems from the fact that Democrats and Republicans are both allies of the business world.
One top business lobbyist, speaking on condition of anonymity, said corporate tax reform should be “the easiest piece” of a complex fiscal bargain “because you have people in both parties in the business community.”
Meanwhile, the number of people who filed new applications for jobless benefits leaped 43,000 last week to 474,000, the highest level in almost nine months.

The surge in unemployment comes at a time when U.S. corporations are more profitable than ever. The end of 2010 saw some of the biggest gains in the business world, according to data from the federal Bureau of Economic Analysis. Corporations reported an annualized profit of $1.68 trillion in the fourth quarter, up from the previous record of $1.65 trillion in the third quarter of 2006.

In the first quarter of 2011, Exxon-Mobil, the world’s biggest and most profitable corporation, raked in $10.7 billion. That’s a 69 percent increase over the same quarter last year, and the highest quarterly profit since 2008. This is happening during a time when citizens are searching underneath the couch cushions to scrape together enough change in order to fill their gas tanks so they can go file for unemployment benefits.

Exxon also happens to be one of US Uncut’s top targets. The oil giant uses offshore subsidiaries in the Caribbean to avoid paying taxes in the United States. The company paid zero U.S. income tax in 2009, while enjoying billions in taxpayer-funded subsidies and its CEO’s total compensation reached over $29 million.

Now, in addition to raking in record profits by sheltering revenue in foreign tax havens, Exxon and its Fortune 500 comrades, rest on the brink of enjoying more sweeteners in the form of tax breaks.
Of course, tax havens are only one part of a rigged system that allows corporations to make bank during economic recession. There are also the practices of government subsidies, (read: taxpayer subsidies) outsourcing jobs, and buying off politicians that allow top corporations and their CEOs to flourish while one in four American children survives on food stamps.

While I was watching CNN this morning, a talking head made the comment that the corporations were forced to “go lean” during the recession, but now that the economy is recovering, they refuse to hire simply because they like being lean! Why wouldn’t they? Corporate America is enjoying record profits, so there are no incentives to hire an expensive American worker (with their pesky unions’ minimum wage demands, rational work schedule, and health benefits) when they can outsource the same job for cheap labor overseas.

Another alternative is to just bust unions and treat workers like they’re employed in the third world, a path chosen by Wal-mart, which secured a spot at the top of the Fortune 500 list released today.
Then there’s the problem of corporate lobbying and bribery. Corporate America dominated Washington’s lobbying spending in the first quarter of 2011, according to a report from the Center for Responsive Politics. The US Chamber of Commerce spent just over $17 million in the three-month period. Next was General Electric (the “King of Tax Dodgers”) with just over $9 million, and AT&T with spending just over $6.8 million.

Corporations learn to grease the wheels early, which is why their financial support of political candidates is so bipartisan. Before the presidential election, John McCain received three times more money from the oil industry than President Obama. However, Obama received more in campaign cash than McCain from the employees of some of the biggest oil companies: Exxon, Chevron, and BP, three companies that routinely grace the top echelons of the Fortune 500 list.
It’s no wonder that the big companies with the most money buy the most access and win the most favorable pieces of legislation.

The Obama administration is considering these corporate tax cuts during a time when almost every state is experiencing some kind of budget cut protest. Teachers, police, fire-fighters, unions, students, and their supporters have occupied state Capitols and campuses to demand a one-tier America where everyone (citizens and corporations, alike) sacrifice during times of fiscal crisis.

How Does Big Oil Gouge Us? Let Us Count the Ways

It's not just at the gas pump. The oil companies don't pay much in federal income taxes, either. Over the past five years Exxon has paid at a 3.6% rate (federal tax as a percentage of total pre-tax profits). Chevron was little better at 5.6%. Marathon paid 12%, Conoco Phillips 17%.

They use American research, infrastructure, and national security to make record profits. ExxonMobil, BP, Shell, Chevron, and ConocoPhillips realized a combined 42% increase in profits in the first quarter of 2011. Together, the five biggest oil companies made almost $1 trillion in profits over the past decade.

Goldman Sachs noted that speculation on oil prices is causing the price at the pump to go up. But according to the Huffington Post, the resulting oil company profits "are not finding their way back into the communities from which they came; are not being used to create more jobs; and are not being invested in new equipment and exploration." Instead, the money is going to dividends and stock buybacks. "They're basically enriching themselves," said Daniel J. Weiss, a senior fellow at the Center for American Progress.

The big profits are certainly not being used to create jobs and stimulate the economy, or to pursue alternative energy research. The Wall Street Journal reports that the big five oil firms are holding $70 billion in cash. Meanwhile, they're paying an average of $15 million apiece in annual salaries to their CEOs. Occidental and Chesapeake each paid over $100 million to their CEOs in 2009.

And then we have the continued flow of taxpayer subsidies to the oil industry, totaling about $4 billion a year. We just awarded a $42 million no-bid contract to BP to supply fuel to the Air Force, even as a criminal investigation continues over its Gulf of Mexico ineptitude. Why no-bid? Because the contract was called "an unusual and compelling urgency," which made it a national security issue.

Adding insult to gougery is the attitude of oil company executives, who have apparently convinced themselves of their righteous ways. An Exxon VP referred to his company as "a leading U.S. taxpayer." An American Petroleum Institute spokesman said that "everyday Americans," including teachers and firefighters, benefit from oil industry profits.

What they're saying, in effect, is that it's good not to pay taxes, because that leaves more money to invest in America. Gouging us again, in doublespeak.

Economists and Job Creation

The Old Economic Textbook

In the wake of the recession brought on by the collapse of the housing bubble many people have called for a new economics. There are certainly grounds for arguing that we need a new economics, but the bigger problem is that economists will not even adhere to the old economics, or at least not when it runs against the accepted thinking in political circles.

This is perhaps most obvious in the response by economists, or lack thereof, to the large U.S. trade deficit. In a system of floating exchange rates, the adjustment to a large and persistent trade deficit is supposed to be a decline in the value of the currency. That is 100 percent economic orthodoxy.

Economists ridicule the people who worry about jobs being lost to imports by telling them that new jobs will be created in other sectors of the economy. There is some logic to this story, but an essential part of the picture is supposed to be a decline in the value of the dollar.

Suppose the United States starts buying $100 billion of imported manufactured goods each year that replace $100 billion worth of goods that had formerly been produced domestically. The story is supposed to be that this means that we have increased the supply of dollars on international currency markets by $100 billion a year, while not increasing the demand at all. With a greater supply of dollars and no change in the demand, the price of the dollar will fall measured in foreign currencies.

A lower-priced dollar makes U.S. exports cheaper for people living in other countries, leading to an increase in exports. A lower-valued dollar also makes imports from other countries more expensive, leading us to import less. If we export more and import less, net exports will rise, creating jobs and moving trade back toward balance. That is the textbook story and the reason that good free traders don't worry when we lose jobs to imports.

However, what happens when the dollar is not allowed to fall? In the last decade many countries, most notably China, have explicitly pegged their currency to the dollar. They do this by buying dollars on international currency markets when their trade surplus (our trade deficit) leads to an excess supply of dollars. In effect, the action of these governments are preventing the normal adjustment process that would bring trade back toward balance and keep the U.S. economy close to full employment.

Without this adjustment process, the "free trade" crew has no real argument. It is entirely plausible that increased imports will lead to higher unemployment since the adjustment mechanism that is supposed to bring the economy back to full employment is not working. This is all straight traditional economics textbook stuff.

Now it is possible to have other channels to fill the gap, but these are by no means automatic. For example, we could have the government run big budget deficits, creating demand either by increased spending or lower taxes. However there is no guarantee that the government will take this route, especially when the deficit hawks rule Washington.

The other possibility is that the Fed will lower interest rates and thereby stimulate demand. This is a mixed blessing even in the best of times. Investment is only modestly responsive to lower interest rates. By far, lower interest rates will have their largest impact on consumption. When this low interest rate channel works, it means that people will borrow lots of money to buy things, and in that way fill the gap in demand created by the trade deficit. This leaves us with heavily indebted households who have nothing saved for retirement; sound familiar?

Of course when the federal funds rate is already at zero, as is the case now, this low interest rate route for boosting demand will not work at all. In principle, the Fed could take more dramatic steps, like its quantitative easing policy, but there is little appetite in Washington for pushing these extraordinary measures very far.

This brings us back to the exchange rates. Mainstream economists, who believe their own economics, should be yelling about the over-valued dollar and demanding action to bring the dollar down to a level more consistent with balanced trade. However, economists have been largely silent on the issue.

We get a lot of feeble comments about how China should raise the value of its currency against the dollar, but China is a big country and they don't want to do this, so too bad. Of course the United States is not in fact the most helpless country in the world, especially when it comes to lowering the value of the dollar in international currency markets.

Joe Gagnon and Gary Hufbauer, both of the 100 percent mainstream Peterson Institute for International Economics, developed a very simple proposal that will put serious pressure on China to reduce its holdings of dollars. They call for taxing China's dollar holdings at a 20 percent annual rate. This can be done in a way that is 100 percent legal under U.S. trade agreements and has no obvious negative side effects.

The question this proposal should raise is why don't all economists support the Gagnon-Hufbauer proposal or some comparable measure. The over-valued dollar is a major obstacle to restoring a normal economic balance with near full employment levels of output. This is an issue where all mainstream economists should pretty much agree.

Of course there are powerful interest groups that don't necessarily want to see the dollar fall. Goldman Sachs, J.P. Morgan and other banks are probably happy to have their dollars go further in buying up Chinese assets. Similarly, Wal-Mart and other major retailers probably are not anxious to see the prices of the goods they import increase by large amounts. And Pfizer, Apple, and Time-Warner would probably be worried that if we anger the Chinese government over its currency policy it might be less anxious to protect their patent and copyright claims.

If this were a case argued on the economics - the mainstream economics that everyone learns as undergrads and grad students - the economics profession should be lined up solidly behind Gagnon and Hufbauer. However, the interests of those with money and power seem to be on the other side and that's where we find most economists.

So, the story here is that we may or may not need a new economics, but first and foremost we need honest economists. We don't seem to have many right now and it is not clear how a new economics would change this fact.

Economy Hanging by a Thread

Party Like It's 1929

A bleak jobs report sent stocks and commodities tumbling on Wednesday, while new signs of distress gripped the service industries index. An updated report from the ADP showed that private sector hiring slowed more than expected from March to April as companies struggled to meet rising raw material costs and flagging consumer demand. The service industry index (ISM) --which "ranges from utilities and retailing to health care, finance and transportation"--slumped to its lowest level since August signaling widespread deceleration and a progressive deterioration in the fundamentals. The turnaround has forced economists to rethink their projections for 2nd Quarter GDP and to watch more vigilantly for signs of contraction. This is from the New York Times:
"The economy lost steam in the first quarter. Growth in personal consumption — the single largest component of the economy — slowed markedly. Business-related construction cratered and residential construction fell. Exports stumbled. The only unambiguous plus was continued business investment in equipment and software, which is necessary but not sufficient for overall growth.
In all, economic growth slowed from an annual rate of 3.1 percent in the fourth quarter of 2010 to 1.8 percent in the first quarter of 2011....
When lauding the economy, Mr. Bernanke and many other economists and politicians point out, correctly, that the unemployment rate has declined from a recession high of 10.1 percent in late 2009 to 8.8 percent now. That would be encouraging news if it indicated robust hiring for good jobs. It does not.
Over the last year, the number of new hires has been outstripped by the masses who have either given up looking for work or who have not undertaken a consistent job search, say, after graduating from high school or college. Those missing millions are not counted in the official jobless rate; if they were, unemployment today would be 9.8 percent. The rate would be 15.7 percent if it included those who took part-time jobs in lieu of full-time ones." ("The Economy Slows" New York Times)
So, even the New York Times agrees that unemployment would be nearly 16 percent if the figures were correctly calculated. Those are Depression numbers. 14 million people are out of work (with 11 million underemployed) and record numbers of people are on food stamps (44 million)

Wednesday's down-market sent commodities plunging as signs of emerging deflation pushed investors into Treasuries. Gold and silver fell sharply. Troubles in Japan, China and the eurozone have intensified fears of a global slowdown and perhaps another bout of recession. The dollar strengthened for the third straight session, in spite of the Fed's zero rates and $600 billion bond buying program. Trillions of dollars in monetary and fiscal stimulus have jolted stocks back to life, but debt-deflation dynamics in the broader economy are as strong as ever. 

Unemployment remains stubbornly high, consumer retrenchment has reduced discretionary spending, and housing continues its inexorable nosedive. The stock market continues to inch higher buoyed by central bank liquidity and margin debt, but investors are increasingly skittish and searching for direction.

The soaring price of gas has shifted consumer spending from retail to energy consumption, the opposite of what the Fed had intended. This from Early Warning:
"I doubt energy prices can go a whole lot higher without triggering another recession, so it depends on whether the world can scrape up a few more mbd of oil to keep growth going without prices rising too much more. We will be watching oil production statistics closely...
...We are in an era where the availability of natural resources is not sufficient to support the wealth levels that the developed world has grown accustomed to, along with the speed of growth with which the developing world is trying to approach those same levels..... the global economy keeps trying to grow in a way that is inconsistent with the resource constraints, and then some part of the system tears and gives way....
I would argue that this data is at least consistent with the narrative that, in the post 1973 era, energy is consistently in somewhat problematic supply, and you can think of many of the recessions as showing a pattern in which energy prices are rising as the world overshoots what can currently be supplied, or what can currently be supplied drops as a result of geopolitical events, and energy prices rise until some pre-existing weakness in the global economic fabric tears in the course of a recession, and prices fall back again...." ("Energy prices and recessions", Early Warning)
Welcome to Peak Oil; the era of resource scarcity has begun. Today's troubles will to be a recurrent theme in the years ahead as the economy goes from boom to bust and previous levels of growth become more short-lived and unsustainable. Naturally, our leaders have settled on a strategy for addressing the impending energy shortages; endless war disguised as humanitarian intervention. This is the type of shortsightedness that passes as policy.

The main economic indicators are still turned up, but just barely. The economy is hanging by a thread. Loan demand is weak, wages are flat, and markets are on a knife-edge. Here's a clip from The Big Picture:
"...the real problem is loan demand (confirmed while speaking to bank organizations in half a dozen states over the past year). Loans have to be repaid, meaning that the money must be used to finance the acquisition of employees or equipment that will "pay back" the loan. Common sense. But record numbers of owners (as high as 28%) have reported that "weak sales" is their top business problem while only 4% reported "financing" as a top problem..... Ninety-three percent reported all their credit needs met in March, including 53 percent who said they were not even interested in a loan. No customers means no need for a loan to finance hiring, inventory purchases or expansion (only survival – not a good bank loan!).
But they don't get it in Washington D.C. And not understanding the problem produces bad policy, and there has been plenty of that. If lending is picking up, it is because customers are showing up and there is a reason to invest and hire. The reverse doesn't work – you can't force feed the credit to owners and have more customers suddenly show up ....That's "pushing on a string". Just ask the banks." ("Loan Demand, Not Credit, Is the Problem", The Big Picture)
There's no demand for credit because consumers are in the red and need to balance their accounts. ("93 percent reported all their credit needs met in March.") It's pointless to focus on getting the banks to lend, when people are broke and don't want to borrow regardless of rates. Just like its pointless to dump monetary stimulus into the stock market if it pushes up food and energy prices (headline inflation) reducing consumers ability to spend on other things. This isn't hard to figure out; it's Econ 101. So, why is the policy upside-down?

That said, the stock market should continue to trend upward for another couple months until the Fed's bond buying program ends and investors realize that the real economy is stuck in the ditch. But, for now, it's "Party like it's 1929". Bernanke's punch bowl is overflowing and there's still plenty of time to make money. The hangover comes later.

Scotland to seek independence from UK

Wed May 4, 2011 PressTV

The Scottish election campaign has entered its final peaks as voters prepare to cast their ballots on Thursday amid mounting calls for Scotland's independence from the UK.

It is the fourth election since Edinburgh's Holyrood powerhouse was formed in 1999, with main contender Alex Salmond promising to hold an independence referendum by 2015 if he wins Thursday's polls.

The First Minister of Scotland claimed during a leaders' debate at the state-run BBC that victory in May 5 election would give him “moral authority” to pursue independence.

Salmond said he wanted the Scottish people to vote on breaking up the UK "in the second half of the [upcoming] parliament."

"I believe this country is good enough, big enough and rich enough to be independent”, he has said earlier in an independence rallying call.

However, Salmond's call for an independence referendum has been dismissed by Iain Gray, the Scottish Labour leader, who put the economy as his party's first priority.

"The priority is to get our economy growing again, to create jobs and to create opportunities for our young people,” said the Labour Party candidate.

After all, Scotland's four main party leaders fielded questions on free bus passes, tuition fees and Scotland's drive to generate more green power. Meanwhile, they all agreed that it was necessary to tackle bigotry and religious hatred at a national basis.

The Conservatives and the Liberal Democrats will both start the day on a high, with Tory leader Annabel Goldie unveiling a giant peach ballot paper on Edinburgh's Calton Hill to urge voters to back her party on the peach-coloured second ballot.

Meanwhile, Lib Dem leader Tavish Scott will join candidate for Midlothian South, Tweeddale and Lauderdale Jeremy Purvis to ride the downhill mountain biking track at Innerleithen.

Finally, Green Lothians candidate Alison Johnstone will meet students outside Edinburgh University's George Square Library with Edinburgh Young Greens convener Dominic Hinde distributing leaflets encouraging students to back them with their second vote.

The latest TNS-BMRB poll put Alex Salmond on course to form the second SNP Scottish government. The survey puts the party 18 points clear of nearest challengers Labour in the constituency vote and 13 points ahead in the regional vote.

MSPs have responsibility for matters including health, education and law. Other issues such as foreign policy and defence remain reserved to MPs at Westminster in London.

Texas to make TSA pat-downs felony crimes

Thursday, May 05, 2011 by J. D. Heyes

(NaturalNews) - Well, it was bound to happen. Someone has finally gotten so tired of the X-rated pat-downs at airports they are trying to criminalize it.

Tired of waiting for the federal government to do the right thing and uphold Americans' Fourth Amendment right to privacy and protections against unreasonable searches and seizures, Texas lawmakers are moving to make invasive pat-downs by Transportation Security Administration screeners a felony.

A bill moving through the state Legislature would make it illegal to intentionally touch a person's private areas, even above clothing, unless the screener had probable cause the passenger was hiding something - and by that, it means something dangerous.

Rep. David Simpson, R-Austin, said the measure - HB 1937 - aims to restore some dignity to the act of traveling. A second proposal, HB 1938, seeks to prohibit the use of full-body scanners in Texas airports. A vast majority of Texas state lawmakers support the legislation.

Few Americans doubt the need for increased security at airports, given the tragedy of 9/11. Most reasonable people understand the government's interest in preventing similar attacks. But feeling up 6-year-old girls? Molesting a former Miss America? And what about the TSA agent in Philly who was recently arrested on charges he was in possession of child pornography? That's not even the first time that's happened.

The Texas legislation may just be the beginning. There is a backlash growing against the overly invasive TSA pat-down procedures. Both pilots - who are also subject to such searches - as well as passengers, in growing numbers, have had enough. Even airports are opting out of using the TSA for airport "security."

The legislation in Texas may not hold up to a constitutional challenge from the U.S. Justice Department, which is sure to come if state lawmakers pass it and Gov. Rick Perry signs it into law. But the point is clear: People have had enough, and it's time for the government to listen.

There are better ways to provide airport security other than violating the constitutional rights of young passengers, beauty queens and everyone else in between.

Comedy Club - Louis CK


Medical marijuana 'cures' 2 yr old cancer patient

Boy, two, with brain cancer is 'cured' after secretly being fed medical marijuana by his father
By Daily Mail Reporter
4th May 2011

A desperate father whose son was suffering from a life-threatening brain tumour has revealed he gave him cannabis oil to ease his pain. And he has now apparently made a full recovery.

Cash Hyde, known as Cashy, was a perfectly healthy baby when he was born in June 2008 but became sick shortly before his second birthday.

At first he was misdiagnosed with glandular fever before his parents Mike and Kalli, from Missoula in Montana, were given the devastating news he had a serious brain tumour.

The little boy had to have arduous chemotherapy treatment to reduce the growth, which had drastic side effects including seizures and a blood infection.

His distraught parents were repeatedly told he was likely to succumb to the illness because the condition was so bad.

After one bout of high-dose chemotherapy, Cash was so weak he could not lift his head and was too sick to eat any solid food for 40 days.

It was at this point that Mr Hyde decided to take action and go down the route of medical marijuana to try to help his young son.

Cash's doctors refused to even discuss the option but his father went and sought authorization elsewhere and then secretly administered it through his son's feeding tube.

He also told doctors to stop giving Cash the cocktail of anti-nausea drugs he had been taking - although he never told them what he was doing.

Mr Hyde told KXLY News that his son started looking better right away.

Mr Hyde said: 'He hadn't eaten a thing in 40 days - and, it was really incredible to watch him take a bite of a piece of cheese. It shows that he wants to live'.

He credits the cannabis oil with helping his son get through the chemo, and say Cash has now been declared cancer free by doctors.

The boy is now back and home and living the life of a typical young boy, playing with his elder brother Colty.

Medical marijuana is legal in some states, including Montana, but its use for children is poorly understood and quite rare.

The US federal government does not recognize the legality of using the drug for medical reasons and frequently clashes with states over the issue.

Mr Hyde told KXLY: 'It's very controversial, it's very scary. But, there's nothing more scary than losing your child.'

Xe Services (Blackwater)’s New Ethics Chief: John Ashcroft

By Spencer Ackerman WIRED
May 4, 2011

The consortium in charge of restructuring the world’s most infamous private-security firm just added a new chief in charge of keeping the company on the straight and narrow. Yes, John Ashcroft, the former U.S. attorney general, is now an “independent director” of Xe Services, formerly known as Blackwater.

Ashcroft will head Xe’s new “subcommittee on governance,” its backers announced early Wednesday in a statement. The subcommittee is designed to “maximize governance, compliance and accountability” and “promote the highest degrees of ethics and professionalism within the private-security industry.”

In other words, no more shooting civilians in Iraq and Afghanistan, no more signing for weapons its guards aren’t authorized to carry in war zones, no more impersonations of cartoon characters to acquire said weaponry, and no more ‘roids and coke on the job.

Ashcroft’s arrival at Xe is yet another clear signal it’s not giving up the quest for lucrative government security contracts now that it’s no longer owned by founder Erik Prince, even as it emphasizes the side of its business that trains law enforcement officers. In September, it won part of a $10 billion State Department contract to protect diplomats, starting with the U.S. consulate in Jerusalem.

Ashcroft, a U.S. senator before becoming attorney general in the Bush administration, is a very known quantity to the federal officials that Xe will pitch. Even if he’s not lobbying for Blackwater, Ashcroft’s addition on the board is meant to inspire confidence in government officials of its newfound rectitude.

To some, Ashcroft will be forever known as the face of Bush-era counterterrorism: the official who vigorously defended the Patriot Act’s sweeping surveillance powers; told civil libertarians that their dissents “only aid terrorists,” and covered up the Spirit of Justice’s boob. At the same time, when Ashcroft was critically ill in 2005, he resisted a White House mission to his hospital bed entreating him to reauthorize warrantless surveillance in defiance of the acting attorney general.

“This is a company with a strong history of service to its country, and a reputation of best-in-class offerings to its public and private customers,” Ashcroft said in a statement. “I look forward to helping USTC enhance its governance and oversight capabilities as the company moves forward,” referring to U.S. Training Center, another of Blackwater’s many names. Like scores of other senior security officials, Ashcroft has spent his post-government career running a Washington consulting firm.

Xe is still sorting out its leadership and searching for a permanent CEO. For now, the investor team that bought the company in December assembled and empowered a board of directors to run the shop along with the existing management. That board includes former National Security Agency director Bobby Ray Inman. Its chairman is Clear Channel co-founder Red McCombs.

Ashcroft and his new subcommittee will report to the board. “With the formation of this subcommittee, and with Ashcroft as its chair,” the firm says in the statement, “USTC aims to set the bar for industry standards against which all other companies will be measured.”

DOJ plan to arrest state licensers, tax dispensaries to doom medical marijuana

By Stephen C. Webster - RAW Story
Wednesday, May 4th, 2011

A recent letter from the Department of Justice (DOJ), threatening state employees in charge of implmenting medical marijuana laws with prosecution, has forced some governors to re-evaluate and even veto popular legislation -- all seemingly in violation of what the medical marijauana community thought was a cease-fire with the federal government.

Facing the threat of seeing otherwise innocent state employees thrown in jail, lawmakers are responding in an entirely human fashion: what Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws (NORML), called "the old need to CYA -- cover your ass."

Ultimately, the administration's confusing legal position has led to a stagnation of medical marijuana reform efforts, with some states simply deciding it's not worth the risk.

It also represents a significant change in momentum for the prohibition reform movement as a whole, and one that's taken them almost entirely by surprise.

In 2009, Attorney General Eric Holder's Justice Department issued a memo stating that it would not prosecute medical marijuana patients, suppliers or caregivers in states that have passed voter initiatives to legalize the drug's use -- so long as they were all abiding by that state's laws.

Earlier this month, however, the Justice Department sent a letter to the governor of Washington, warning that state employees may be prosecuted if they are in any way involved in the licensing of production or distribution of marijuana.

"The prosecution of individuals and organizations involved in the trade of any illegal drugs and the disruption of drug trafficking organizations is a core priority of the Department," department attorneys wrote. "This core priority includes prosecution of business enterprises that unlawfully market and sell marijuana."

The letter did not state the laws they would be in violation of, but NORML director St. Pierre told Raw Story in an interview Tuesday that he believed feds would try to prosecute state employees under the The Racketeer Influenced and Corrupt Organizations Act.

Reacting to this highly specific language, Gov. Chris Gregoire vetoed the bill, but maintained that she supports moving the drug's classification to Schedule 2, similar to other potent and potentially addictive painkillers used in hospitals.

Similarly, New Jersey Governor Chris Christie (R) is reportedly hesitant to implement portions of his state's medical marijuana provisions, which passed the legislature before he took office. New rules drafted by Christie's administration would make New Jersey's medical marijuana system the most restrictive in the nation, but it requires the involvement of state employees. New Jersey's health department named in March just six private producers it would grant licenses to.

But now that's been delayed too, and the legislature has stalled as it debates whether to rewrite Christie's plans.

Meanwhile, the DOJ's letters are expected in other states too, posing a sobering argument that if governors are wary of waging legal battles with the feds to keep their employees out of jail, they should instead keep them far away from any and all private producers of medical marijuana.

NORML speculated in February that if the Obama administration followed Gov. Gregoire's lead and reclassify marijuana as Schedule 2 -- or potentially expand the definition of Schedule 3 to include pharmacological products -- major corporations are waiting in the wings to take over the market with cannabis-based drugs, like the liquefied marijuana medicine Sativex, from GW Pharmaceuticals plc.

So far, 15 states and the District of Colombia have passed laws permitting marijuana to be used as medicine.

But it's not just state workers who DOJ is currently targeting in its efforts to end the sale of marijuana for medical uses. As previously reported, the DOJ is coming after licensed growers and dispensaries with a very old tool: the tax code.

NORML's executive director St. Pierre told Raw Story that this marked a change in tactics for the Justice Department.

Chasing after medical marijuana dispensaries not with SWAT teams, but with tax attorneys, he said, was "like what they did to Al Capone" and represented a significant change in tactics for the DOJ.

To this effect, the Internal Revenue Service (IRS) sees § 280E of the federal tax code as license to come after businesses that sell marijuana if and when they file their taxes, as it prohibits any deductions for companies "trafficking in controlled substances."

"Every transaction you engage in is a separate offense and you are literally writing your own indictment every day on the registry of your cashier's tape," St. Pierre explained.

"The real quandary for these people who thought they had legitimate businesses is whether they can take tax exemptions," St. Pierre went on. "If they can do that, then that industry will continue to grow. If, however, if [a key court decision goes against producers], then for all intents and purposes, that is probably it for retail businesses that sell marijuana for another person."

He concluded: "Absent the federal government changing these laws, the razor blade this administration has now created for itself to crawl across is becoming pretty evident each week. It's hard to maintain both positions."

The “Real” Long-term Unemployment Report.

The March Employment Report was again pumped as another victory in the war against unemployment. But for millions of long-term unemployed, it’s still a brutal battle to find work. That’s why it’s unfortunate that most main stream media outlets and politicos seem incapable of understanding, or chose to ignore the “real” unemployment numbers.

The BLS reported that unemployment (U3) for March was 8.8%, which is a slight improvement from February’s 8.9%. 216,000 jobs were created, but that’s a relatively small monthly number of jobs for what is supposedly a strong economic recovery from the Great Recession. In comparison, during the 2004 economic recovery, 338,000 jobs were created in March.

The Obama administration and media mouthpieces seem preoccupied with the U3, 8.8% measure of unemployment, but you need to dig into the numbers to reveal the “real” state of unemployment.

A disconnected news media conveniently forgets to mention that the US needs to create about 125,000 jobs a month to simply keep up with new entrants to the workforce. If you subtract 125,000 from 216,000 jobs created in March, you end up with 91,000 “extra” jobs for 13.5 million unemployed.

Underemployment remained quite high at 15.7%, or 11 million workers who want full-time work, but are forced to work part-time jobs of 34 hours a week or less. Yes, full-time work is considered 35 hours or more per week, although many “real world” workers consider jobs of less than 40 hours a week as part-time.

But what was most striking about the March jobs report was the continuing increase in the number of long-term unemployed. According to the BLS, March showed 1,899,000 workers who have been out of work for 99 weeks or more, an increase of 127,000 from February. The real 99er population is growing quickly and shows no signs of abating.

NELP estimates (PDF) that “throughout 2010, 3.9 million unemployed workers exhausted all of their unemployment benefits without finding new work.” Exhausting unemployment benefits also includes those unemployed that exhausted benefits after 60, 73, 79, or 93 weeks, so NELP’s estimate is larger than the BLS estimate for those out of work 99 weeks or more.

Not only are more unemployed out of work 99 weeks or longer, but those out of work 52 and 27 weeks or more are increasing as well. Those out of work 27 weeks or more now accounts for a record 45.5% (6.14 million) of all unemployed, while for those out of work 52 weeks or more the rate is 31.5% (4.25 million) of all unemployed; again a record high.

The participation rate is another employment issue rarely discussed on the national media stage. According to the BLS, “the participation rate is the share of the population 16 years and older working or seeking work.”
The labor force participation rate was unchanged, 64.2%, the same as the previous two months. This is the lowest labor participation rate since March 1984.
The March Employment Report showed some job gains, but not nearly enough jobs were created to put a dent in the long-term unemployment problem. Media talking heads and politicians looking for 2012 votes touted the March jobs report as a winner, but it was a loser for millions of increasingly desperate long-term unemployed who are struggling without jobs or unemployment benefits. Let’s not hang those “Mission Accomplished” banners just yet…

8 Unemployed for Every Job Opening

By Joshua Holland

There are now approximately 14 million Americans who want a job and can't find one. According to the National Employment Law Project (NELP), if they stood side by side, they'd stretch from Bangor, Maine to Los Angeles, California and back. Added to that figure are 11 million more "underemployed."

While plenty of ink has been dedicated to distant crises in the Middle East and Japan, and a wholly trumped up “deficit crisis” that haunts the sleep of the Beltway media, this disaster occurring right here at home has received far less attention than it should.

Those who have been out of work for an extended period of time face not only extreme economic suffering, but also unique barriers to getting back into the workforce. Yet the political establishment has all but ignored the pain being felt by this broad swath of working America. Economist Paul Krugman called them the “forgotten millions,” and warned that “we’re well on the way to creating a permanent underclass of the jobless.”

That disconnect has left a gap that some individuals and grassroots organizations have attempted to fill. Their efforts are commendable, and at times innovative, but a number of activists interviewed by AlterNet said that absent a serious effort by the federal government, they are merely tinkering around the edges of a deep and avoidable catastrophe.

36 Weeks

In February, the average length of joblessness for all unemployed workers was a record 36 weeks. Many of those people relied on their unemployment insurance to get by until it ran out and still haven't found work -- they've come to be known as "99ers," as extended unemployment benefits in many states last a maximum of 99 weeks. NELP researchers estimate there were 3.9 million 99ers out of work last year, and project a similar number for 2011.

“It's pretty tragic out there for a lot of people,” says Mike Thornton, a writer and activist who runs a Web site dedicated to providing information and resources for the jobless called the LayoffList. “The long-term unemployed are discriminated against for being long-term unemployed,” he said. Employers are hesitant to hire those who have been out of work for a lengthy period of time because they think there must be something wrong with workers who haven't been picked up by another firm by now, but the reality is that there are now five unemployed people for each job opening. According to NELP, when you include people who are working part-time while looking for a full-time gig, that ratio jumps to eight to one.

Making matters worse, extended periods of unemployment crush people's sense of self-worth. “There are a lot of self-esteem issues there,” says John Dodds, director of the Philadelphia Unemployment Project. “There are obviously issues of maintaining the basic necessities – people are losing their homes. It's a very depressing situation for the long-term unemployed – they have to worry about their benefits running out, and many of them have.”

“It's not easy on anyone,” says Mitchell Hirsch, who was out of work for more than six months after being laid off from his retail job of over 20 years and has since become an organizer with NELP. “The first thing that hit me,” Hirsch said, “is just the loss of the place to go. Whether people have worked in an office or a factory or a store or a restaurant, most working people go to work at a place, and when that place no longer exists, it's like a part of your soul is removed,” he said, adding, “You find yourself very much alone.” Despite the number of Americans who don't have a job, “people unemployed these days feel virtually invisible.”

“Age is another factor,” Thornton told AlterNet. “You know, people over 45 years old seem to have a more difficult time finding positions the longer they've been out of work." That claim is born out by the numbers – the average length of unemployment is 44.1 weeks for those between 55 and 64 years of age, compared with 29.2 weeks for those 20 to 24.

Many people who have been out of work for a lengthy period of time – especially those whose unemployment benefits have expired – have had to max out their credit cards to keep afloat, or have missed mortgage payments or other bills. “I can speak for myself here,” said Nicole Sandler, a talk-radio host who started the Web site and who has herself been “underemployed” for over a year. “I've basically lost my house. I stopped paying my mortgage and moved in with my boyfriend six months ago.” Sandler says she's found a buyer and will do a "short sale" – getting less than she paid for the property – but, she adds, “my credit is shot, and we know that potential employers can check your credit, and if you have bad credit that's another reason for employers not to hire you. And once you're in this vicious cycle, it's very hard to get out of it.”

The unemployment crisis also has an impact on those who are able find work after being laid off. In an employers' market, over half of all full-time workers laid off after three years at the same job return to the workforce with lower wages. According to the Wall Street Journal, more than a third of them lose 20 percent or more of their previous income.

What many don't understand about the grim reality of the American labor market is that its impact on workers who have faced extended unemployment can reverberate for decades – long after the economy has recovered. Columbia University labor economist Till von Wachter studied the fortunes of workers who faced sudden lay-offs during the 1981-1982 recession in the period since that time. He found that even after 15 to 20 years, those workers' wages were still 20 percent lower than comparable workers who had held onto their jobs in the early 1980s downturn.

According to the Journal, the impact of this kind of joblessness can span generations:
Research shows that children of workers who lose jobs and go back to work at lower wages appear to suffer from lower wages, too. In a 2008 study, a group of economists tracked the wages of 60,000 father-child pairs from 1978 to 1999. Children whose fathers went through mass layoffs in the 1982 recession ended up with 9% lower earnings than similar children whose fathers didn't experience the job cuts.
Into the Chasm

Joe Carbone heads Workplace Inc., a non-profit that does research on the labor market and provides services to struggling workers in Connecticut. He told AlterNet the organization judges success “not just by people getting a job, but really getting empowered through credentials and knowledge so that they can traverse the system and make their way into the middle class.”

Carbone says that since the recession began he's seen a surge in demand for his organization's services. “What it's done is completely stressed out the capacity of our system,” he said. The stimulus package helped, but, says Carbone, “we had that funding for two years, but now that's gone. So, we've got the same numbers in terms of the people who have a need for our system, but we've gone back to the 2009 funding levels that we had before the worst of the recession.”

Carbone's organization is launching a project, in tandem with the private sector, to ease 99ers back into the grind of the workplace and overcome the discrimination they face among employers. “We're developing an instrument whereby for $6,000 per person, these 99ers would be given an opportunity to work for a business for eight weeks while they were officially employed by Workplace, Inc.,” he said. “There would be no liability, no risk on the part of business – it would be an eight-week trial period to see if we could establish a good comfort level between that person and whatever company we assign them to.”

Carbone says he “doesn't expect a federal response to this,” and is going to foundations and various family trusts in order to launch a pilot program for the first 100 workers this summer.
Radio host Sandler says she was inspired to start after getting an email from a listener whose benefits had just expired begging her to report on their plight. “It was right around the time that Obama negotiated with the GOP to extend the Bush tax cuts, and yet so little was being done for the 99ers,” she says. “And here was this group, growing in numbers and being ignored.”

Sandler describes as a “message board to put people who have needs – who are out of work, have exhausted their benefits and have nowhere else to turn – to put out their stories, and a place where people who have the means and compassion to help can get in touch with them directly. There's no middle-man involved, no foundation that people have to go through.”

She says the project has been slow to take off, but some connections have been made, including a man who sent a space heater to a woman in upstate New York who was unable to pay her heating bill. “I know that some people have gotten help with rent – a couple of people got their rent paid for a month or more – at least a handful of people have gotten help.”

Like Workplace, Inc., the Philadelphia Unemployment Project (PUP) has been around for a while – since 1975 – but has seen a surge in its clientele. “We do have a lot more people around,” says John Dodd. “We have a computer lab for job searches that is always packed. We have about a dozen computers that are always taken by people looking for work.”

Dodd says his organization offers “housing counselors, a job developer, a jobs club, a health-care navigator – helps people access health care – and we help people with unemployment appeals.” PUP has also organized to help people threatened with foreclosure stay in their homes.

“The fact that people are organized and working together is something that makes people feel better,” Dodd told AlterNet. “We have regular committees that meet on the unemployment issue, on the foreclosure issue, so in a way we provide some support so people don't feel all alone.”

According to Mitchell Hirsch of NELP, 40 percent of eligible workers don't file for benefits. NELP, in addition to its political advocacy on behalf of working America, runs, which Hirsch describes as a place “to get information about benefits availability, a resource that allows you to speak out and tell your story and a resource of news and information” for the jobless, “all of which is ultimately a way for us to organize unemployed workers and their supporters on behalf of things that matter for working people.” The site gathered over 100,000 signatures for a petition urging Congress to re-authorize the extended unemployment benefits program.

These efforts, and others that have popped up across the country, provide valuable assistance to the relatively small number of jobless workers who take advantage of them, but all of those interviewed by AlterNet agreed that the depth of the jobs crisis plaguing the U.S. merits a massive response from policy-makers. They lamented the fact that a second stimulus package, direct, WPA-style job programs like those established during the Great Depression and much more help transitioning the long-term unemployed back into the workforce had never been on the table in any serious way.

Some members of Congress have taken a few small steps. Reps. Barbara Lee, D-California, and Bobby Scott, D-Virginia, introduced legislation that would extend benefits for 14 more weeks, and Rep Hank Johnson, D-Georgia, has a (difficult to enforce) bill that would make it illegal to discriminate against workers for being unemployed.

But both bills face a steep hill in the GOP-controlled legislature. A previous effort to get an additional extension of benefits was killed when it faced opposition from Republicans and Blue Dog Democrats last year. Meanwhile, Missouri lawmakers are filibustering an extension in federal benefits that wouldn't cost the state a dime – they're willing to sacrifice the well-being of 23,000 Missourians in order to “send a message to Washington” about the deficit. And in Michigan, conservatives are opposing a technical fix to the extended benefits program that, if defeated, would leave 150,000 state residents without eligibility for federal benefits.