Friday, May 20, 2011

Obama's Orwellian Turn: Whistle-Blowing=Treason

by Abby Zimet

Candidate Obama championed transparency; President Obama has used the 1917 Espionage Act to preside over "the most draconian crackdown on leaks in our history," prosecuting more national security leak cases than all previous Administrations combined. The New Yorker's Jane Mayer looks at the case of Thomas Drake, a GOP National Security Agency whistleblower who faces 35 years in prison for allegedly leaking information to a reporter about NSA waste and bureaucracy. To Jack Balkin, a Yale law professor, the increase in post 9/11 leak prosecutions represents "the bipartisan normalization and legitimization of a national-surveillance state.” To Drake, the turn toward secrecy is "Orwellian."

"This was a violation of everything I knew and believed as an American. We were making the Nixon Administration look like pikers.”

America’s Healthcare Crisis is Getting Worse

by Roger Bybee

Gas at $4 per gallon (or higher) has left working families very cautious about using their cars during a time of falling wages, food-price increases and widespread economic insecurity.
Similarly, millions of Americans with health insurance are now afraid to actually use their insurance to seek treatment.

"I don’t think the American people want shared sacrifice. I think that they want shared prosperity."—John Watson of Chevron, testifying this month against a proposed $2 billion cut in oil-companies' annual tax breaks in a year when they are on track to make $100 billion in profits The reason: Employers have successfully shifted a huge portion of costs to their workers, so working families face such a daunting barrier of high deductibles and co-pays that they have become reluctant to go to the doctor or the hospital or request a particular course of treatment.

The New York Times’ Reed Abelson concisely captured the cruel reality that working families now confront while insurers rake in record profits and CEOs collect record salaries and bonuses:
The nation’s major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.
The plight of typical patients was outlined in a Times interview with a California grocery worker:
For someone like Shannon Hardin of California, whose hours at a grocery store have been erratic, there is simply no spare cash to see the doctor when she isn’t feeling well or to get the $350 dental crowns she has been putting off since last year. Even with insurance, she said, “I can’t afford to use it.”
In just nine years, the cost of family coverage has doubled, from $9,235  in 2002 to $19,393 in 2011, Maxwell Strachan reported in the Huffington Post:
Take away costs paid by employers, and the employee's share of costs has still doubled. In 2010, the average employee paid $8,008 for his family's healthcare, up from $3,634 in 2002…. Of that $1,319 increase [in the last year], employers … paid for 48.6 percent of the increase, while the additional 51.6 percent was the responsibility of employees.
That $8,008 may easily consume 20 percent of many working families' incomes, meaning that rising health costs are fattening the profits of insurers while forcing families to cut back severely on spending, even for necessities.

For-profit health insurance is a product that is “both defective and unreliable,” as Dr. Steffie Woolhandler of Harvard Medical School aptly depicted it.

Particularly disturbing is the growing trend toward high-deductible insurance, which provides no insurance until a very high level of expenses has been paid by the hapless family stuck with such a policy. These policies are spreading rapidly:
In 2010, about 10 percent of people covered by their employer had a deductible of at least $2,000, according to the Kaiser Family Foundation, a nonprofit research group, compared with just 5 percent of covered workers in 2008.
But while it is the worst of times for some, it is the best of time for those in the healthcare insurance industry.

Thanks to what CIGNA called “lower usage” that allow insurers to retain more premium income; profits are once again on a trajectory to set ever-higher profits.

Thus, insurers are directly profiting from Americans avoiding needed tests on troubling or suspicious health conditions, leading inevitably to patients being in a far more acute state when they can no longer put off seeking treatment.

Further, for-profit insurers continue to aggressively “purge” small-business accounts from coverage whenever someone in the group comes down with an illness that is expensive to treat, observes Wendell Potter, former CIGNA public-relation director and author of Deadly Spin. As Potter explains:
The purging of less profitable accounts through intentionally unrealistic rate increases helps explain why the number of small businesses offering coverage to their employees has been declining for several years and why the number of Americans without coverage reached a record high of nearly 51 million last year.
According to the National Small Business Association, the number of small businesses that provide health insurance to their employees fell from 61 percent in 1993 to 38%.... Along with “rescinding” (cancelling) the policies of individuals who become seriously ill, purging small businesses that employ workers who get sick is a tried-and-true way of meeting Wall Street's expectations.
But even when seemingly sitting on top of the world with an ever-growing streak of record profits and the prospect of 30 million new customers required to buy insurance under the Affordable Care Act (ACA) passed into law last year, the for-profit insurers are pushing for more. As the Times' Abelson noted,
Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends…Because they say they expect costs to rebound, insurers have not been shy about asking for higher rates.
In Oregon, for example, Regence BlueCross BlueShield, a nonprofit insurer that is the state’s largest, is asking for a 22 percent increase for policies sold to individuals.
The writing on the wall could not be clearer: the health insurance industry is not interested in either “shared sacrifice” via lower profits (i.e. lower premiums) or “shared prosperity” through covering the uninsured.

In sharp contrast to the incredibly slow implementation of the Affordable Care Act passed by the Democrats last year (it won't be fully implemented until 2014), Medicare managed to be up and running 11 months after passage in 1965, a feat all the more astonishing given the lack of computers were not universally available.

America's healthcare crisis—acutely felt by both the insured and uninsured—is getting worse. It will continue to do so, and even with the ACA in full effect, isn't likely to reverse course.

Congressional Leaders Reach Patriot Act Deal

(FUCKERS! Constitution-violating FUCKERS!--jef)

Friday, May 20, 2011 by
Leaders Reach Patriot Act Deal
by Jake Sherman and John Bresnahan

Top lawmakers in the House and Senate reached a deal to extend the Patriot Act for four years, a week before key provisions were set to expire.

 The pieces of the law that allow the federal government to compel businesses to release records, issue roving wiretaps, and monitor so-called “lone wolf” terror suspects were set to run out on May 27. The outline of the deal between Speaker John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) still needs to pass both chambers in the next seven days to avoid a lapse in the law.

Reid went to the Senate floor on Thursday afternoon to file cloture on the bill, setting up a vote for Monday night.

“Sens. Reid and McConnell have introduced a clean, four-year extension of the Patriot Act, one of the critical tools the intelligence community has to keep America safe. The Senate will consider this legislation next week,” said Michael Brumas, a McConnell spokesman.

Extending the Bush-era surveillance law has not been a slam dunk for House GOP leaders this year. In fact, Republicans were unable to muster enough votes to fast-track the bill through the House earlier this year because of objections from lawmakers ranging from libertarian-minded conservatives to liberal Democrats. When a 90-day extension passed earlier this year, Republicans needed Democrats to carry it across the finish line.

House Republicans were readying to push through their own, more ambitious, bill this week. They were going to take up Rep. Jim Sensenbrenner’s (R-Wis.) bill, which extended the business records and roving wiretap provisions for six years, and the “lone wolf” element permanently. Several House Republicans were averse to extending anything permanently, including conservative House Republicans like Rep. Mike Pence of Indiana.

If the bill is amended in either body, its changes will need to be adopted by both chambers. The House is only scheduled to be in session through Thursday and the law expires Friday, making time of the essence.

Before their week-long recess this week, House Republicans had started the hard sell on the Patriot Act. They had a closed briefing with Federal Bureau of Investigation Director Robert Mueller, and heard stern warnings from House Majority Whip Kevin McCarthy (R-Cailf.) that they should get their questions answered before voting “no.” GOP aides and lawmakers were also saying that the death of Osama bin Laden should give urgency to extending the law, although the Patriot Act deals with domestic surveillance, not foreign.

Another plus for both parties: the four-year compromise places the vote in 2015 — which is not an election year.

Civil liberties groups reacted with anger to the news of a four-year extension for the controversial law without committee review.

“That is how the Patriot Act first came into being 10 years ago—without meaningful debate,” said the Bill of Rights Defense Committee in a statement issued on Thursday night.

“Today, despite the prior approval of the Senate Judiciary Committee of a bill introduced by Senator Patrick Leahy (D-VT) to impose some (albeit inadequate) reforms, the congressional leadership is dictating the result of a long overdue policy debate that has never happened.”

Comic Books as a Path to Prison Reform: An Interview With Activist Lois Ahrens

"Comic books place an individual's experience in a political context by describing how the prison system is built on racism, sexism, and economic inequality," Ahrens says.
By , Angola 3 News
Posted on May  20, 2011

Lois Ahrens is the Founder/Director of The Real Cost of Prisons Project (RCPP) and has been an activist/organizer for more than 40 years. First started in 2001, RCPP brings together justice activists, artists, justice policy researchers and people directly experiencing the impact of mass incarceration to work together to end the U.S. prison nation. RCPP created workshops, a website that includes sections of writing and ‘comix’ by prisoners, a daily news blog focused on mass incarceration and three comic books that were first created in 2005: Prisoners Town: Paying the Price, by artist Kevin Pyle and writer Craig Gilmore; Prisoners of the War on Drugs, by artist Sabrina Jones and writers Ellen Miller-Mack and Lois Ahrens; and Prisoners of a Hard Life: Women and Their Children by artist Susan Willmarth and writers Ellen Miller-Mack and Lois Ahrens.

Hundreds of organizations around the country use the comix in workshops, outreach and organizing. 135,000 have been printed, while over 115,000 have been sent, free of charge, to organizations and thousands of people held in prisons and jails. Due to lack of funding, Prison Town is now out of print and Prisoners of A Hard Life will soon be as well. Prisoners of the War on Drugs is still available. Print-ready versions of all three are available to view and download here.

In 2008, the three comix were published in an anthology, edited by Ahrens, entitled The Real Cost of Prisons Comix, (PM Press, 2008). Through the RCPP, Ahrens has been fortunate to have built an extensive correspondence with prisoners, which has grown into working relationships and friendships. In Massachusetts where she lives, Ahrens is involved in working to stop the state from charging $5/day jail fees to convicted prisoners and those held "pretrial." She is also working to stop new "3 Strikes" legislation from being passed.

Angola 3 News: Who is your target audience and what is the message that you are communicating with the comix?

Lois Ahrens: The comic books were created to communicate complex ideas in language that could be easily understood despite the fact that they are filled with information, research, analysis and a glossary. We wanted them to look and feel like comic books since people are not intimidated by comic books.

Initially, my goal was to create useful materials for organizers working to challenge and change punitive and destructive drug policies, activists opposing the building of new prisons and jails, as well as educators, and health workers. After publishing the comic books, we realized that prisoners were extremely interested. Comic books have been sent to prisoners every day since April 2005, with many requesting that comics be sent to family members and other prisoners.

The comic books place an individual’s experience in a political context by describing how the prison system is built on racism, sexism, and economic inequality. They include alternatives to the current reality so that readers can strategize and act to make change no matter where they are. The goal of the comic books is to politicize.

A3N: Have you ever had problems from prison authorities when sending comic books to prisoners?

LA: Yes. I think of this as the “tyranny of the mail room.” Often an individual working in a mail room sends the comic books back. Generally, I have found county jails are the worst in turning back comic books. For prisoners who are in “administrative segregation” there are often rules against receiving materials. Because the Real Cost of Prisons is the publisher of the comic books, usually, after a phone call, or an appeal letter, comic books do get in. Since comic books have been sent to prisoners in every state, I always cite many examples of other prisons within that system where they have been accepted. I appeal every refusal.

Interestingly, women’s prisons are more apt to return comic books; however, once I write and say that a prison for men in that state has accepted them, they do get in.

A3N: In your 2008 book The Real Cost of Prisons Comix you wrote that “every year from 1947 through the beginning of the 1970s, approximately 200,000 people were incarcerated in the US. Today, there are more than 2.3 million men and women incarcerated [now 2.4 million], with more than 5 million more on parole and probation.” Subsequently, the US has become the world’s #1 jailer. According to the International Center for Prison Studies at King's College London, only China, with 1,620,000 prisoners, and the Russian Federation, with 819,200 prisoners, have a total prison population that is remotely close to the US.

Furthermore, with 751 out of 100,000 people, and one out of every 100 adults in prison or jail, the US also has the highest incarceration rate in the world. The Russian Federation is second with 577 per 100,000 and China is 116th with 120 per 100,000. How do you explain this astonishing level of mass imprisonment in the US during the last 40 years? What are the forces behind this and why have they employed this particular strategy?

LA: In the workshops we first developed, in our trainings, and in the comic books, we wanted to create a bigger picture about how we came to this place. To do this, I think we need to understand how Ronald Reagan and the neo-liberal agenda came to power in 1980 by using covert and overt racist messages fabricating the myth of the welfare queen, capitalizing on fears of affirmative action, tearing away at the gains made in civil rights movement---specifically voting rights—while fostering alarm about rampant crime.

The racist sub-text of the neo-liberal political agenda succeeded in creating acceptance of mass incarceration while simultaneously creating the laws and industries to police, prosecute, cage and control millions of people—almost all poor people and people of color.

Neo-liberal policies have been in place for more than thirty years. As a result many people are not aware that our current political and economic situation is not the result of a natural course of events, but rather, of a systemically created ideology that has pervaded every aspect of our daily lives. Deregulation and globalization have caused: the loss of U.S. manufacturing by outsourcing; corporate agriculture and the disappearance of the family farm; reduction of protections for workers; huge decreases in number of unionized workers; privatization of hospitals, water, education, prisons, and the military; drastic cuts in public spending for welfare, public schools, public transportation, housing, and job training. These policies have created huge disparities in wealth.

Democrats and Republicans capitalized on this “perfect storm”. They ran and won on “tough on crime” platforms and passed legislation that has resulted in one in 31 people now under the thumb of the criminal justice system.

A3N: The corporate media’s support for the prison system has ranged from stoking public fears by over-reporting crime, to portraying prisoners as pampered and over-privileged. The comic books, therefore, provide an important counter-narrative. A major focus of the comic books has been the so-called “war on drugs.” Why do you feel that this issue is so important?

LA: Of the more than 2.4 million people imprisoned, more than one million are African Americans. Almost 5 million men and women are on probation and parole, a disproportionate number due to the “war on drugs.” (According to a Pew Report in March 2009, “One in 11 African-Americans are under correctional control, one in 27 Latinos, and one in 45 white people are in prison, jail, or under correctional supervision.”)

The war on drugs includes aggressive policing, centralized data bases for people stopped and frisked for no cause, surveillance cameras in streets and buildings, police or security in schools, and SWAT teams for communities as small as 25,000, and long and punitive mandatory sentences.

From its inception, African-Americans and their communities were the primary target of the war on drugs. In terms of drug use: African Americans constitute 13% of the nation’s monthly drug users, 37% of drug possession arrests, 56% of drug possession convictions, and 74% of those sentenced to prison for drug possession.

There are mandatory sentences for drug convictions and disproportionate sentencing for crack vs. powder cocaine. After years of organizing against this, the sentencing disparity between crack and powder cocaine has changed from 100 to 1 to 18 to 1, with no retroactivity for those already convicted under the old law. 80% of people sentenced to crack cocaine charges are African American.

A3N: What have been the consequences of this mass incarceration, fueled by the war on drugs?

LA: The consequences for individuals, families and communities are huge, cumulative, and long-lasting. According to Dina Rose and Todd Clear, in African American communities where 15 to 20% of adults are incarcerated community stability is undermined, resulting in more crime instead of less crime, especially when aggressive policing is added. In addition to less safety, what are the effects of removing the earning and spending power of so many who are incarcerated? What are the long term costs of the disruption of the family as both an economic and emotional unit?

There are other costs and consequences of the punitive legislation especially directed at people with felony drug convictions---read African Americans---that prevent them from creating a sustainable life once they leave prison. These include, for some, a ban on higher education and vocational training, as well as a ban on receiving Temporary Assistance for Needy Families (TANF) if convicted of possessing or selling drugs, although some states have opted out. Legislation in 1996 and 1998 also prevented people with felony drug convictions and their families from federally subsidized housing, serving to increase homelessness and make family reunification much more difficult—for women especially. For women who are incarcerated, there is always the possibility of losing custody of their children.

A3N: How has the corporate media presented the war on drugs? Strategically speaking, how do you think activists can best confront this and work to publicly discredit the war on drugs?

LA: The media has portrayed the war on drugs as a fantasy of good vs. evil. There is little or no acknowledgement of the truth about who is targeted and why, of the system’s cruelty and destructiveness, nor of its lasting consequences to people’s lives, the evisceration of communities, and the bankrupting of governments. Only now, with huge state budget deficits, have some states begun to look at what 40 years of these policies have created; not because they think they are unconscionable, but because they are no longer financial sustainable. If they could find a way to continue to finance the bloated prisons and jails, I don’t think they would be looking for alternatives.

Despite this, I do think there is a small opening now to look at the catastrophic “war on drugs.” Michelle Alexander, in her book The New Jim Crow: Mass Incarceration in the Age of Color Blindness, details how in many ways, the war on drugs has created a more potent, strangulating and oppressive system than the old Jim Crow.

I agree with her and think this framework can re-energize people who took part in the Civil Rights and Black Empowerment movements of the 1960’s and millions who did not. I believe that what is important about her book is that she articulates the convergence of economic, legal, legislative, governmental policies and political forces which led to the mass incarceration of African Americans.

To overturn these policies and the beliefs on which they were built, we must understand the complexities of why and how they have been put in place. Then we can build the new and strong movement we need now.

A3N: Alongside the printed comic books, how do you use the RCPP?

LA: Early on, we developed a website and a little after that a news blog. Together, every day they receive a minimum of 2000 unique visitors. The website is filled with new research, links to hundreds of organizations, and the comic books. A few years ago I began adding political writing and comix by prisoners. This is now a big part of the website. People inside and outside the country are now using the comix and essays in other publications, which is how I had hoped it would work.

As the website has developed, so has a list-serve that keeps me connected to hundreds of organizers, as well as the media and family members of prisoners.

A3N: Of the many news stories featured on the website in the last couple years, could you tell us about a few important stories that you think were the most under-reported and/or misreported by the corporate media?

LA: There are thousands of stories because the true story about prisons is almost completely missing from not only the corporate media, but the left media as well.
First, there is almost no coverage at all about the growth of solitary confinement in the U.S. The best website for this is Solitary Watch and the RCPP website and blog publishes writing and comix from prisoners in solitary.

Second, there are a number of stories involving prisoners organizing, notably the Georgia Prisoners strike and the hunger strike in Lucasville, Ohio. There are a number of stories posted on the RCPP blog. The Human Rights Coalition (PA) is working to bridge the divide between outside and inside organizing (see The Movement).

Third includes "How prisons and jails are becoming debtors prisons," “Criminal Justice Debt: A Barrier to Reentry” by the Brennan Center, and “In For a Penny: The Rise of America's New Debtors' Prisons” by the ACLU .

Finally, the excellent work by The National Advocates for Pregnant Women, whose groundbreaking work brings together issues of women, reproductive rights, criminal justice, and racism.

A3N: Besides the website, how else has the RCPP evolved since the first comic book was published?

LA: The RCPP has evolved greatly since its beginning in 2000. When I started, I barely knew anyone in prison. That began to change once we started conducting our workshops and created a Train the Trainers program which involved many people who had been incarcerated.

Then, the comic books started flying out the door and the daily stacks of letters began arriving. Reading thousands of letters and beginning long-lasting correspondence-relationships with many prisoners, my focus shifted to their efforts to connect and remain a part of the world outside of prison. I saw how the longer someone’s sentence is, the more difficult it becomes to maintain connections—especially after a loved one has passed away.

Because of my daily connections with prisoners, I have become much more involved in conditions of confinement, sentences of life without the possibility of parole, the lengthening of sentences, the parole process or lack of it, and the non-use of compassionate release—even in states where it is policy.

I am constantly aware of the daily cruelties and indignities that men and women endure at the hands of others. I witness how so many people (against circumstances designed to dehumanize and crush their body and mind) manage to overcome and create lives of meaning to themselves and others.

A3N: What do you focus most of your energy on these days?

LA: In addition to sending out comic books, answering mail, and updating the website, I spend some part of everyday attempting to track down research, contacts, and other information for a large number of prisoners who are writers, researchers and activists/organizers.

In Massachusetts, where I am located, I have led an effort to stop the jails from charging fees to prisoners who are convicted and “pre-sentenced.” We are now waiting for a report that will hopefully recommend against these outrageous fees. I am engaged in various efforts to stop “three strikes” legislation from being law in MA. I regularly write and speak to classes and organizations about what is going on all around them, if they will allow themselves to look.

A3N: In your opinion, what are the best forms of practical action that those of us living outside the prison walls can do to help to improve present conditions for those incarcerated, and to challenge the broader criminal “justice” system, with abolition as the long-term goal?

LA: As abolitionists we must find smaller and larger steps along the way to stay engaged and connected to activists inside and out. There’s a lot of work to do:

--Connect to prisoners via books through bars projects and pen pal programs.

--Create true community-based alternatives programs that are not affiliated with sheriff’s departments and other law enforcement, for people with non-violent convictions to stay at home, connected to family and communities, and not go to jail.

--Create bail reform programs so that jails are not debtors prisons- examples include unsecured appearance bonds, setting lower amounts of bail and lowering bail based on the circumstances of someone’s life. For example, do they have children they are taking care of? Do they have a job that will be jeopardized? Many people plead guilty and then end up jail because they know they can’t make bail.

--Create affirmative action campaigns for people with criminal records, based on models of other affirmative action categories, to begin a conversation with employers about the need for second chances. Expand the campaign to housing fairness.

--Talk about the growth of solitary confinement in the U.S. People will be disbelieving but Solitary Watch is a great resource for information and activism.

--Work to expand parole, rather than restricting it! Attend parole hearings and write letters in behalf of people seeking parole

--Communicate with your governor to reinstate commutation. Most governors no longer commute sentences, although this used to be standard practice. Actively support people seeing commutation through letter writing campaigns and public events.

--Work to end the unnecessary and costly systems designed to send parolees back to prison based on minor violations. Strategically speaking, right now with state budget deficits, is a good time to focus attention on this.

--Challenge the drug laws that criminalize addiction and work with “harm reductionists” to provide needle exchange, safe injection sites, community education.

--Decriminalize sex work by joining forces with organizations of sex workers and make public the harassment from the police suffered by sex workers.

--Work with organizations such as Families Against Mandatory Minimums nationally and in your state to end mandatory minimum drug sentences.

--Begin a conversation with state legislators on the extreme length of sentences, not only for people convicted of non-violent offenses, but for those convicted of violent offenses as well. The new report by the Justice Policy Institute, "Finding Direction: Expanding Criminal Justice Options by Considering Policies of Other Nations,” provides models of what other countries are doing.

--Model the successful organizing strategies and legislation in NY State to end the shackling of women in labor and childbirth.

--Join with family groups and others organizing to end “life without the possibility of parole.” Introduce parole review for everyone beginning at 15 years.

--Make compassionate release real for states where it is already a law. Work with faith-based groups and involve faith-based communities in organizing for compassionate release.

--Work with Families to Amend California's Three Strikes (FACTS) and other organizations to end three strikes and habitual offender sentences.

--Join forces with community-based mental health and addiction treatment centers to advocate for money needed for treatment in communities, rather than jails and prisons filled with people suffering from untreated mental illness and no drug treatment. Drug addiction is a mental illness.

--Question the propaganda about who is criminal and the unchanging nature of people who have committed crimes and how they are portrayed in the media.

--Finally, each of us must fight racism wherever we find it. Fighting racism is a blow to mass incarceration.

A3N: How can our readers support your work?

LA: Your readers can support the work of the RCPP by becoming actively engaged in any areas I suggest in the previous answer. People need to know that they can spend a few hours a week and it can have political meaning.

They can financially support effective grassroots organizations that receive no funding or little funding, including of course, the Real Cost of Prisons Project. Our total yearly budget is approximately $4,000 which provides postage, envelopes and maintaining the website. You can make a donation here.

Mostly, I believe people need to wake-up and get engaged wherever they live in whatever they find most compelling. The fact that there is so much to do is not a reason to do nothing.

Secret Corporate $$$ Determining Elections

Let's End the Arms Race of Secret, Corporate Money in Our Elections
By Katrina vanden Heuvel, The Nation
Posted on May 19, 2011

The post-Citizens United drive for secret money is now a veritable arms race.

As a New York Times editorial recently noted, Bill Burton, former White House deputy press secretary, is leading a group called Priorities USA to “raise unlimited money from undisclosed sources to aid in the president’s re-election campaign.

While I’m sympathetic to the notion that Democrats cannot afford to cede ground in these exorbitant, no-holds-barred campaigns—as one colleague put it, “You don’t fight with one hand tied behind your back”—this isn’t news to be welcomed by pro-democracy reformers. By accepting the same opaque money they are arguing against, the Democrats’ case for campaign finance reform becomes morally ambiguous at best.

Instead, Democrats could use this moment to seize the overwhelming bipartisan sentiment across this country that we need to curb the influence of money in our elections—even 62 percent of Republican voters and 60 percent of Tea Partiers agree!

Democrats are already on record—unlike nearly every Republican—to make campaigns cleaner and more democratic. Whether supporting the DISCLOSE Act, Fair Elections Now Act, or state clean election laws, Democrats have demonstrated their commitment in rhetoric and votes. Some are even speaking out for a constitutional amendment to overturn the Citizens United decision granting corporations the “right” to spend unlimited money influencing elections.

Yet leadership on public financing and clean elections needs to begin at the top. President Obama’s rhetoric has been tremendous on occasion—his campaign language, response to the Citizens United decision, statements on the DISCLOSE Act—but he could also do more to forcibly push for the Fair Elections Now Act, a Presidential public financing fix, and passing the DISCLOSE Act which was defeated by a Republican filibuster.

He could immediately draw a stark contrast between the parties by signing his draft executive order requiring any company vying for a government contract to disclose details of its political giving. Not surprisingly, the GOP and its gravy train (aka Chamber of Commerce) have already gone bonkers over this little bit of sunlight, calling it “pay-to-play” politics, according to the Baltimore Sun. Seriously, let’s keep those political gifts in the dark, that way everyone will know that corporations aren’t receiving any favors in return. Say what?

This represents a canyon-wide opening for President Obama to drive home his original campaign message—remember that one—about changing the culture of Washington. Indeed the need and political opportunity for all Democrats to step up couldn’t be clearer.

Across the nation, conservative courts, Republican legislatures, and corporate front groups are attempting to reverse hard-fought pro-democracy gains. In Arizona, GOP legislative leaders and the Chamber of Commerce are pressing for a repeal of that state’s effective clean elections law, despite the fact that 79 percent of Arizonans support it. In Maine, Republican Governor Paul LePage has gone after his state’s clean election law—attempting to defund it, repeal its use in gubernatorial races, and more than tripling the private contribution limit for gubernatorial candidates. (Here’s hoping the 80 percent of Mainers who support the law have the last word.)

“The bottom line is that people want a political system that is responsive to their needs,” says Nick Nyhart, president and CEO of Public Campaign. “Elected officials who stand in the way of that could pay a price down the line.”

The fight for campaign finance reform can’t be separated from the fight to preserve collective bargaining rights, prevent restrictive voter ID laws, and protect an already tattered safety net from an onslaught of pro-rich/anti-everyone else budgets. These fights are all about power and voice in our democracy.

“Our country’s biggest problems won’t be solved for the many if the process is fixed by the money,” says Nyhart.

Instead of traveling down the worn path of pay-to-play politics with Republicans, Democrats—led by President Obama—should double-down on the high road. Most Americans are already there waiting for them.

The Big Squeeze: Americans Crushed by Financial Insecurity & Doubt

Americans are living lives of lowered expectation and intensified financial uncertainty.
By David Rosen, AlterNet
Posted on May 19, 2011, Printed on May 20, 2011

The Great Recession officially started in December 2007 and "ended" in June 2009 (not because of the actual economic numbers, which place us deeper into a depression, but because a panel of "experts" said so). It was the gravest financial crisis the nation has faced since the Great Depression of the 1930s. Sadly, most Americans have yet to recover.

It fostered what many call the “new normal,” the unspoken sense that America is stuck in decline. This new sensibility bears profound consequences; foremost is the recognition that Americans are living lives of lowered expectation and intensified financial uncertainty.

The “American Century” is over. The great historical phase of America’s domestic prosperity and global hegemony is withering. In the decades following the Second World War, American capitalism fashioned the postmodern, and increasingly globalized, world order. In the process, it abandoned America and the American people.

We first witnessed the transfer of jobs overseas, rationalized as “throwaway” or low-skilled jobs. Then came the growing dependency of foreign borrowing, rationalized by the U.S.’s ostensible credit worthiness. Now, America’s great corporations, like GE and GM, are earning more overseas than at home, accompanied by generous domestic tax breaks. More disturbing, the U.S. military-industrial-political establishment repeatedly embarks on doomed “great war” campaigns that rob the nation of its young, its wealth and its ideals.

Domestically, over the last three decades the rich have systematically expropriated the middle-class’s sizable and hard-earned wealth. It has been the most massive transfer of wealth in the nation’s history, with the gravest consequences. It has been a period of legalized robbery.

The decades following WWII witnessed the middle-class accumulating significant wealth as measured in the pride of home ownership, the glamour of a new car, the accomplishment of sending one’s kid to college, the security of good health and assured retirement. It was a period marked by the narrowest income gap separating the rich and the poor in the nation’s history. It fostered the great social, legal, technological and cultural movements that distinguish the post-war era -- civil rights, Roe v. Wade, a man on the moon and the counterculture.

Today, the U.S. is stuck, confronting an historical sea change. Most Americans live at the intersection of earning the next dollar and paying the latest bill. This is the powerful vice of the Big Squeeze, of financial uncertainty and doubt, of living holding one’s breath.

Nearly everyone feels squeezed by the Big Squeeze, except, of course, those rolling in dough or too naïve to care. A November 2010 Rasmussen poll found that just over one-third (37 percent) of respondents believe America’s best days are still ahead; sadly, nearly half (47 percent) said the nation’s best days were in the past. A recent New York Times front-page article announced: “New Poll Shows Darkening Mood Across America.” [NYT, April 22, 2011]

Capitalism is being restructured, and in the process, Americans are being disciplined, forced to accept a poorer quality of life. The process of social and personal “reeducation” now being imposed on the vast majority of Americans is the Great Squeeze, it is the process of accepting a qualitatively more miserable life.

* * *

Big Squeeze is revealed in many ways. The clearest examples are the key economic indicators, particularly those detailing the growing income gap and the resulting social consequences. In a recent report, the Economic Policy Institute (EPI) finds that, "since 1983 the top 5% of wealth holders consistently held more than 50% of all wealth, but the share increased from 56.1% in 1983 to 63.5% in 2009. The bottom 80% of wealth holders consistently held less than 20% of all wealth, but the share declined from 18.7% in 1983 to 12.8% in 2009."

In simplest terms, the rich have gotten richer, amassing an ever-greater share of social wealth, while the rest of us, especially the poor, have gotten poorer.

EPI’s findings lay out the broad terrain on which the Big Squeeze is played out. More disturbing are the innumerable ways it is experienced in the lives of ordinary Americans.

First and foremost of these ways is the growing wage gap. The U.S. Census Bureau found that while the GDP increased nearly three-fold between 1970 and 2000 (from $3.8 trillion to $9.8 trillion), the average "real weekly wage" fell by 14 percent between 1970 and 1996. The following table documents this income stagnation.
Sector --______________ 1970 --------- 2003 -------- Gain
Poorest - lowest 20%     $15,126  $17,984              18.9%
Median (50%)              $35,832  $43,318             20.9%
Wealthiest (top 5%)      $95,090   $154,120            62.1%
Source: U.S. Census Bureau, 2004

As EPI notes, “the typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s.” In the wake of the Great Recession, this situation has only gotten worse.

To compensate for the erosion of earnings among male head-of-household workers, American society adjusted. First, women entered the workforce in ever growing numbers, helping launch the second-generation women’s movement and normalizing the two-income household. Second, Americans went into debt, big-time.

The U.S. Labor Department estimates the female workforce participation grew from two-fifths (40 percent) in 1975 to three-fifth (60 percent) in 2008. It reminds us: “The long-term increase in the female labor force largely reflects the greater frequency of paid work among mothers.”

The income stagnation that affected the vast majority of Americans and characterized the period between 1970 and 2000 was hidden in the gluttony of consumerism. Average consumption per person increased 66 percent during this three-decade period. To pay for this fictitious luxury, Americans went into debt.

During the latter decades of the 20th century, personal debt incurred in home mortgages, car loans, tuition loans and credit-card purchases soared. The Federal Reserve estimated total household debt in 2010 at $13.4 trillion or 116 percent of disposable income; reflecting the Big Squeeze, household debt has declined from the peak year of 2007 – the year before the bubble burst -- when it reached 130 percent. Debt should continue to erode as people hold onto the little they make.

The days of consumer gluttony are over. The ranks of the unemployed and the underemployed are estimated at 25 million. Older workers, including those with a college degree, are especially vulnerable, even those willing to take lower-wage jobs to simply hold on. Lower-skilled younger adults between 18 to 34 years, especially minority people, have witnessed the largest jump in poverty. This has led many to double-up in housing with parents, friends and loved ones, let alone growing numbers calling their car home and, finally, the increasing number of the homeless.

The Big Squeeze is taking its toll on all aspects of the lives of a growing number of Americans. Home ownership is down, as is the savings rate. However, there has been a significant increase in the number of U.S. households receiving food stamps and visiting food banks.

The area of personal life taking the biggest hit is health care, as reflected in the rise in the uninsured and emergency room visits. A 2009 report by the American Optometric Association found more than a third (36 percent) of Americans are limiting their doctor visits, including 63 percent cutting dental visits, 59 percent cutting visits to primary care physician and 52 percent cutting visits to eye doctors. Two years later, things have surely gotten worse. The failure to provide quality health care to a growing segment of Americans will have the gravest impact on the nation’s long-term development.

* * *
Progressive resistance to the Big Squeeze has been slow in coming. The Tea Party movement expressed the first round of popular rage, reflecting the genuine fears of a segment of the aging, insecure, white (often racist) and conservative Christian populace. It screamed loud and was heard.

However, having been organized and funded by well-financed conservative and Republican operatives, the politicians and legislative solutions it championed are turning out to only make worse the lives of an increasing number of the more vulnerable Tea Party proponents. Tea Party ideology and politics is being exposed as a con job.

The response among more self-conscious progressives, the broad moderate citizenry (i.e., the majority of the voting public) and decent, apolitical Americans, has been slow to come to a boil. In light of the uprising in Madison and the growing number of angry constituents greeting Republican Congressmen throughout the country, political resistance is beginning to bubble up.

There is, however, a form of resistance that takes place everyday, but is invisible to the media and traditional political analysis. It occurs at the friction points of the Big Squeeze, where the values and/or authority of the more middle-class or managerial sector rubs up against the reality lived by poor and low-wage working Americans. These are the junctures where everyday class power is exercised and inchoate social struggle is waged.

Lisa Dodson’s recent book, The Moral Underground, analyzes the friction points played out in the social relations that define low-wage jobs, in the classroom and in healthcare institutions. They are the settings where Americans confront profound, often deeply perplexing, moral challenges. These moral confrontations involve those on both sides of the economic and power divide.

Dodson calls these points of resistance to the Big Squeeze the “moral underground.” Everyday, those with power, including managers, supervisors, teachers and health care professionals – and the list can go on and on – make decisions that determine the fate of employees, students or the ill and their families. Dodson sees these points of friction serving as moments for moral resistance to the dictates of business-as-usual. For those in authority, subverting corporate protocols and procedures can involve risking their jobs. And they are doing it.

Resistance to the Big Squeeze will likely intensify over the next two years as the nation builds to the 2012 election. The most visible form of this resistance will likely be protest marches, strikes and other public demonstrations. A new, emboldened progressive movement may well take shape.

As this occurs, we shouldn’t lose sight of the more invisible, but mounting, resistance of the moral underground. As it grows, it may undermine one of the great social fictions grounding American capitalism: That one leaves one’s morals and politics at the office, factory or store door when one enters the job site. This fiction is based on the well-propagated notion that when one sells one’s labor power one leaves one’s personal beliefs and values at home. This social fiction is crumbling under the pressure of the Big Squeeze.

Perhaps a Nuclear Rapture?

(Obviously, we all hope this is just a worst-case scenario. But Increasingly, I'm seeing more and more articles like this coming from more and more respected sources. It seems there are fewer "we're blowing this out of proportion" articles being submitted. CW has changed from molehill to real big freaking mountain, but I hope CW is wrong.--jef)

Fukushima's Apocalyptic Threat


Fukushima may be in an apocalyptic downward spiral.

Forget the corporate-induced media coma that says otherwise…or nothing at all.

Lethal radiation is spewing unabated. Emission levels could seriously escalate. There is no end in sight. The potential is many times worse than Chernobyl.

Containing this disaster may be beyond the abilities of Tokyo Electric or the Japanese government.

There is no reason to incur further unnecessary risk. With all needed resources, it's time for the world's best scientists and engineers to take charge.

Even then the outcome is unclear.

For a brief but terrifying overview, consult Dr. Chris Busby as interviewed by RT/TV.

Fukushima Units One, Two and Three are all in various stages of melting down.

Molten fuel at Unit One may have burned through its reactor pressure vessel, with water poured in to cool it merely pouring out the bottom.

A growing pond of highly radioactive liquid is softening the ground and draining into the ocean.

There is no way to predict where these molten masses of fuel will yet go.

Especially in the event of an aftershock, steam and hydrogen explosions could blow out what's left of the containments.

The extra plutonium in the MOX fuel at Unit Three is an added liability.

At least one spent fuel pool has been on fire.

The site has already suffered at least two hydrogen explosions. Some believe a fission explosion may also have occurred.

All have weakened the structures and support systems on site.

These shocks and the soft ground may be why Unit Four has partially sunk and is tipping, possibly on the brink of collapse. Even a relatively minor aftershock could mean catastrophe.

More explosions are possible. More leaks are virtually certain.

Escalated radiation levels from any one of the reactors could force all workers to evacuate, leaving the entire site to chance.

The New York Times has now reported that critical valve failures that contributed to the Fukushima disaster are likely at numerous US reactors.

Significant radioactive debris has been found thousands of yards from the plant. Radiation levels in Tokyo, nearly 200 miles away, have risen. Fallout has been detected in North America and throughout Europe.

Radiation pouring into the sea has begun to spread worldwide.

There is much more, none of it good.

Japan and Germany have had the good survival sense to abandon future reactor construction, and to shut some existing sites.

But here, the corporate media blackout is virtually complete. Out of sight, out of mind seems the strategy for an industry desperate for federal loan guarantees and continued operation of a rickety fleet of decaying old reactors.

The Obama Administration has ended radiation monitoring of seafood in the Pacific. It does not provide reliable, systematic radiological or medical data on fallout coming to the United States.

We may all be in unprecedented danger. After two months of all-out effort, four reactors and at least that many spent fuel pools remain at risk. Whatever technical, scientific and material resources are available to our species, that's what needs to go there.

Thursday, May 19, 2011

Is China Headed for a High Speed Crash?

Dr. Doom and the Chinese EconomyBy PETER LEE

China's Ministry of Railways recently announced its high-speed trains will run slower in order to cope with problems of high operating costs and low passenger figures. This was promptly seized upon as a matter of important symbolism ... for the United States.

Charles Lane, an irregular contributor to the Washington Post's famously right-wing op-ed page, echoed the view of many conservative pundits when he wrote that the Chinese move vindicated Republican opposition to President Barack Obama's plans for high-speed rail in the United States.

Lane wrote:

Meanwhile, in the United States, Obama's high-speed rail plan, originally set at $53 billion over six years, has gotten a thorough democratic vetting. Three freshly elected Republican governors spurned federal dollars for high-speed rail, fearing a long-term burden on their budgets; homeowners in liberal Northern California are fighting construction through their neighborhoods; and the president agreed with Congress to trim current-year spending as part of a budget deal.

On the whole, I'd say China should envy us. [1]

In Lane's view, partisan gridlock will allow the United States to avoid the perils of socialist big-government planning and enjoy the enviable economic trifecta of decaying infrastructure, sluggish growth, and high employment.

By way of instructive contrast, the financial year 2011 cost of US military operations in Iraq and Afghanistan is expected to exceed US$171 billion (for a cumulative total of over $1.2 trillion to date). Fortunately this exercise in financially irresponsible big-government paternalism is discretely piling up corpses and blasting holes overseas, instead of affronting the eyes of value-conscious American taxpayers with the infuriating spectacle of shiny new high speed trains in their backyards. [2]

Nouriel Roubini observed the same Chinese trains and was able to extract some useful lessons for the Chinese economy.

China has grown for the last few decades on the back of export-led industrialization and a weak currency, which have resulted in high corporate and household savings rates and reliance on net exports and fixed investment (infrastructure, real estate, and industrial capacity for import-competing and export sectors). When net exports collapsed in 2008-2009 from 11% of GDP [gross domestic product] to 5%, China's leader reacted by further increasing the fixed-investment share of GDP from 42% to 47%.

Thus, China did not suffer a severe recession - as occurred in Japan, Germany, and elsewhere in emerging Asia in 2009 - only because fixed investment exploded. And the fixed-investment share of GDP has increased further in 2010-2011, to almost 50%.

The problem, of course, is that no country can be productive enough to reinvest 50% of GDP in new capital stock without eventually facing immense overcapacity and a staggering non-performing loan problem. China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging further. In the short run, the investment boom will fuel inflation, owing to the highly resource-intensive character of growth. But overcapacity will lead inevitably to serious deflationary pressures, starting with the manufacturing and real-estate sectors.

Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment - including East Asia in the 1990s - have ended with a financial crisis and/or a long period of slow growth. [3]

The views of Dr Roubini, a professor at New York University and lord of an extensive econometrics and punditry empire, carry significant weight in China because of his reputation as "Dr Doom" - the economist who, as early as 2005-6 and virtually alone among his peers, predicted the catastrophic popping of the US real estate bubble and the subsequent unraveling of the world financial system.

Dr Doom's diagnosis of the problem is widely accepted. China engaged in an orgy of infrastructure building to stimulate industrial - as opposed to consumer - demand in order to dodge the 2008 recessionary bullet.

China's extravagances, most notably in the area of high-speed rail, do need some paring back.

As for the prognosis - that China will finally, in 2013, experience the hard landing that economists have continually predicted since the economy of the People's Republic kicked into high gear - views are considerably more mixed.

Morgan Stanley's analysts weighed in with an optimistic prediction that the Chinese consumer will, at long last, step up and drive the restructuring of the Chinese economy away from export-oriented industries and immense infrastructure projects that generate much more prestige than cash flow:

Most controversially perhaps, the analysts predict what they call "a golden age of consumption". China's consumption as percentage of GDP is currently among the lowest in the world, which many analysts attribute to cautious Chinese families saving money for their retirements or to pay for healthcare bills. But Mr Wang says Chinese consumers aren't waiting for the government to build a new social safety net before they spend more. They're waiting to make more money, which they'll do as labor demand boosts wages over the coming decade. Consumer spending zoomed in [South] Korea and Japan after those countries reached the $7,000 mark. [4]

Shaun Rein of the China Marketing Group put some factual - or at least statistical - meat on the rhetorical bones in an an op-ed for CNBC:
My firm interviewed 5,000 Chinese in 15 cities last year. It is true consumers over the age of 60 reported savings rates near 60% because they feared soaring medical and housing costs. After living through decades of upheaval and missing out on the recent economic boom, they remain thrifty. Little can be done to change decades of ingrained habits.
Our research suggests the key metric Roubini misses is shifts in how younger Chinese spend. Respondents under 32 years old had effective savings rates of zero. They remain confident about their money-making potential. Secretaries earning $600 a month commonly save two month's salary to buy the latest Apple iPhone or Estee Lauder cosmetics.
Consumer finance reforms are also spurring more consumption for younger Chinese. Total credit cards in circulation rose from 13.5 million in 2005 to 240 million in 2010 and will rise 22% annually for five years. More than 80% of the 18 million auto sales there last year were paid 100% up front. Brands like Toyota and General Motors are starting to push financing options, which will further unlock consumption. The data dispels the myth that Chinese are culturally high savers. [5]

Xinhua took note of Roubini's arguments and the rebuttals in a Chinese-language article.

The basic theme was polite skepticism, pointing out that China's growing economy had in the past defied predictions of overbuilding by catching up to the infrastructure and productive capacity poured into the economy.

But as for the future...
However, Roubini is perhaps quite correct in one respect. He believes that China's infatuation with excessive investment will lead to enormous waste and a significant decrease in the growth rate in the future. This view of his is very persuasive. [6]

A Caixin article picked up on the "future" theme, pointing out that the 2008 infrastructure investment bulge was a temporary measure to counteract the global economic slump.
An academic at Beijing Normal University, Li Shi, was interviewed by Caixin. He also pinned his hopes on the Chinese consumer. According to Li:
In the past, increases in individual incomes have lagged behind GDP growth. However, the 12th Five Year Plan intends to change this. It should be said it can be changed, because in the coming years there will be a major change in China's entire economic structure. If the economic structure can change, urbanization will accelerate, excess labor capacity in the villages will be mopped. It is possible that within three to five years, if the labor market experiences conditions of demand exceeding supply, worker's wage growth will accelerate. This would change the problem of excessively low personal incomes.
Also, China has been continually upgrading the social safety net ... which will, to a certain extent, contribute to an increase in individual consumption..
Maintaining 7% growth and maintaining relatively full employment while at the same time the government structurally adjusts its outlays and use a greater proportion to meet the demands for improved people's well-being, all can increase personal consumption.
Lot of conditionals, ifs, cans, coulds, and shoulds in Mr Li's observations. [7]

Roubini identifies some deeply embedded structural issues for the Chinese economy that he defines as critical and fears will take "two decades" to reform, rendering moot hopes of a soft landing in the next couple years:

To ease the constraints on household income, China needs more rapid exchange-rate appreciation, liberalization of interest rates, and a much sharper increase in wage growth. More importantly, China needs either to privatize its SOEs [state-owned enterprises], so that their profits become income for households, or to tax their profits at a far higher rate and transfer the fiscal gains to households. Instead, on top of household savings, the savings - or retained earnings - of the corporate sector, mostly SOEs, tie up another 25% of GDP.

But boosting the share of income that goes to the household sector could be hugely disruptive, as it could bankrupt a large number of SOEs, export-oriented firms, and provincial governments, all of which are politically powerful. As a result, China will invest even more under the current Five-Year Plan.

Continuing down the investment-led growth path will exacerbate the visible glut of capacity in manufacturing, real estate, and infrastructure, and thus will intensify the coming economic slowdown once further fixed-investment growth becomes impossible. Until the change of political leadership in 2012-2013, China's policymakers may be able to maintain high growth rates, but at a very high foreseeable cost.

Dr Roubini has a point. The 12th Five-Year Plan is not a glorious political and economic document. Its apparent priority is to kick the can down the road rather than risk the big reforms that might upset the applecart prior to the leadership handover.

Instead of moving openly and aggressively on the issue of the real estate bubble - thereby gutting the finances of the SOEs and local governments that rely on the real estate boom for significant revenues - the Five-Year Plan puts a political band-aid on the problem by mandating the construction of low-income housing for citizens priced out of the private sector residential market.

The perpetual lure of the bubble, combined with access to virtually cost-free money courtesy of China's inflation-beleaguered individual depositors, continues to drive runaway bank lending, despite government efforts to cool things down by raising interest rates, boosting reserve requirements, limiting the leverage available to buyers of first and second homes - and trying to reduce local government dependence on revenues from real estate boondoggles by introducing a property tax.

As Reuters reported:
"Net interest margins for the quarter were higher, and that's the most important factor for Chinese banks," said James Antos, a banking analyst with Mizuho Securities. [8]

Higher "net interest margins" translated into expected average profit margin gains of 29% for the banking sector in just one quarter over last year.
The undervalued yuan is still one of the best bargains on the planet, especially since the burgeoning Chinese economy offers plenty of places to invest it. China's exchange rate policy continues to suck in dollars - hot money and investment dollars as well as export earnings - that contribute to the real estate and stock market bubbles.

China's forex reserves are ballooning to ridiculous levels - ridiculous as in $3 trillion. The immense reserves - and the exchange rate policy that enabled them - are no longer a source of reflexive national pride. They are a source of anxiety, as Zhou Xiaochuan, the head of the People's Bank of China, conceded:
"Foreign-exchange reserves have exceeded the reasonable levels that we actually need," Zhou said. "The rapid increase in reserves may have led to excessive liquidity and has exerted significant sterilization pressure. If the government doesn't strike the right balance with its policies, the build-up could cause big risks," he said, without elaborating. [9]

In the current environment, an ever-growing mountain of foreign exchange represents a double headache. Forex inflows have to be purchased using yuan, and then yuan bonds issued to sop up the excessive liquidity - the sterilization pressure Zhou is talking about, and a most unwelcome contributor to China's worrisome inflation rate. Meanwhile, the forex has to generate some kind of return, but there's no good place to put $3 trillion - thanks in part to the inrush of Chinese dollars, the rate on short term US Treasury paper is near zero.

Raising interest rates in a global environment of rock-bottom interest rates is not a recipe for success, as Brazil is learning. Rapid appreciation of the yuan is emerging as a possible measure to curb inflation and cool the economy.

Even so, allowing rapid yuan appreciation in order to put China's financial and forex policy on an even keel is an unnerving leap into an unknown of diminishing exports and growing unemployment that the Chinese government is still hesitant to make.

In sum, China's response to its overheating and structurally unbalanced economy is not a profile in courage. Maybe it's a disaster waiting to happen. Over at the quant-hive Seeking Alpha, Craig Pirrong pontificated:

... whether Chinese economic management can avoid the kind of catastrophe that Roubini and I consider to be likely depends on your view of the efficacy of centralized economic management of the type that China practices. The Thomas Friedmans of the world, and arguably Obama, believe that such dirigisme is superior to the messy, decentralized, unplanned and non-centrally coordinated actions of greedy individuals in markets. People like me, conversely, believe that the visible hands of greedy, largely ignorant, and short-sighted politicians and bureaucrats is likely to lead to inferior outcomes.

Pirrong's smug celebration of free-market omniscience is a little harder to digest when one remembers that, in 2006-2008, the invisible hand was not efficiently allocating capital. Instead it was engaged in busy, sticky self-gratification as hedge funds and investment banks pumped subprime debt into the financial markets to give them an excuse to sell more derivatives and borrow more money until leverage was over 35:1... so they could buy and sell more derivatives.

The credit default swap (CDS) market grew to $60 trillion - or $38 trillion, depending on how you keep score (for comparison purposes, total US GDP is $14 trillion).

A delicious vagueness was part of the whole CDS magic. The swaps were almost entirely synthetic, written and purchased by financial institutions that had no exposure to the underlying security or commodity. The market was unregulated, open only to the so-called "experienced", ie deep-pocketed investors, and characterized by fearsome information asymmetries.

Despite declarations of its defenders that the existence of this global casino promoted efficiency and liquidity, the global market's fundamental lack of transparency came back to bite it. As the real estate market finally soured, a spasm of panic and mistrust in 2008 caused the entire financial system to seize up; the market lost the ability to price the complex and opaque swaps, capital flowed out of the financial companies, and credit was unobtainable. Titanic leveraging converted into titanic deleveraging and the financial markets were overwhelmed.

The financial companies thereupon slunk back to the public trough like whipped hounds to convert to bank holding companies to avail themselves of government-insured deposits, or to obtain government assumption of toxic waste debt in order to enable mergers between stronger firms and their crippled rivals.

The public - the "little guys" who were disqualified from participating in the derivatives financial orgy in the first place - were not allowed to simply play the role of fascinated and eventually horrified bystanders. When the mess unraveled, they paid the toll in lost retirement savings, lost homes, lost jobs, and the cutbacks in public services that came with collapse of tax revenues in the recession.

The only force to survive intact was the industry's invincible self-regard, made possible only by its convenient and conveniently short memory, the tender mercy of bespoke politicians and regulators worldwide, and the co-dependent driveling of the fanboy financial press.

In contrast to the United States, China's financial system is biased toward regulation, government management, keeping a lid on international capital flows, and ignoring calls for financial innovation that serve primarily to enlarge and fatten the profits of the financial sector.

China's wishlist for reform of the international financial system is incorporated in the April 14 declaration at Sanya, Hainan, after a summit of the leaders of Brazil, Russia, China, India and South Africa - the BRICS group of nations.

The declaration makes it clear that the PRC believes that the current default attitude - ignoring the role of the sizable Chinese government stimulus in averting a global recession and finger-wagging China for its exchange-rate peccadilloes while disregarding the Western world's colossal financial fail - should be abandoned.

Instead, the PRC is yearning for an endorsement of China's government-knows-best financial policy on a global scale: a coordinated international effort to make the international flow of capital and trade in derivatives more transparent and susceptible to multilateral intervention.

The conclusion that the United States, by reason of its serial regulatory and fiscal transgressions, is no longer fit to lead the international financial system (or impose fealty to its free-market nostrums) is also made clear by the call for a new reserve currency protected from the machinations of the US Federal Reserve.
16. Recognizing that the international financial crisis has exposed the inadequacies and deficiencies of the existing international monetary and financial system, we support the reform and improvement of the international monetary system, with a broad-based international reserve currency system providing stability and certainty. We welcome the current discussion about the role of the SDR [the special drawing rights of the International Monetary Fund] in the existing international monetary system including the composition of SDR's basket of currencies. We call for more attention to the risks of massive cross-border capital flows now faced by the emerging economies. We call for further international financial regulatory oversight and reform, strengthening policy coordination and financial regulation and supervision cooperation, and promoting the sound development of global financial markets and banking systems.
17. Excessive volatility in commodity prices, particularly those for food and energy, poses new risks for the ongoing recovery of the world economy. We support the international community in strengthening cooperation to ensure stability and strong development of physical market by reducing distortion and further regulate financial market. The international community should work together to increase production capacity, strengthen producer-consumer dialogue to balance supply and demand, and increase support to the developing countries in terms of funding and technologies. The regulation of the derivatives market for commodities should be accordingly strengthened to prevent activities capable of destabilizing markets. We also should address the problem of shortage of reliable and timely information on demand and supply at international, regional and national levels. The BRICS will carry out closer cooperation on food security. [10]

Good luck with that.

The counterintuitive lesson that the US and Europe seem to have derived from the financial meltdown is that debt, stimulus, reform, and regulation are only going to make matters worse. With an unwillingness to regulate capital and derivative markets domestically, the will to regulate them internationally is non-existent.

The most interesting social experiment in the world today is communist China's attempt to manage economic stresses through classic national Keynsianism, while the United States gyrates in an apparent death spiral of deregulation, austerity, and defunding of its national and local government services.

To be sure, China has to date displayed a distinct aversion to the hard choices that would reform its economy and put it on a firm footing for sustainable growth - such as pricking the real estate bubble and undertaking a major and risky appreciation of the yuan.

The difference is that Chinese Keynesianism retains the fiscal, regulatory, and political means for intervention, adjustment, redirection, and if desirable, deregulation and privatization.

In the United States, once the revenue and regulatory apparatus is gutted as a result of political calculation and national disillusionment, will there be any turning back?

Perhaps that's the real approaching train wreck.

1. China's train wreck, Washington Post, Apr 21, 2011.
2. Estimated War-Related Costs, Iraq and Afghanistan, Infoplease, by end of the fiscal year of 2011.
3. China's bad growth bet, Aljazeera, Apr 18, 2011.
4. Great China Debate Continues: How Fast, How Long?, Wall Street Journal, Apr 25, 2011.
5. Why Nouriel Roubini Is Wrong on China's Economy, Apr 19, 2011.
6. Click Here for the Chinese text of Xinhua.
7. Click Here for the Chinese text on
8. Hefty Chinese bank profits expected despite govt tightening, Reuters, Apr 25, 2011.
9. Zhou Says $3 Trillion China Reserves Have Risen Beyond 'Reasonable' Level, Bloomberg, Apr 19, 2011.
10. Sanya Declaration of the BRICS Leaders Meeting, Chinese Embassy in Norway, Apr 14, 2011.

Jon Stewart and Bill O'Reilly Talk It Out, Part 2

Wednesday, May 18, 2011

CDC Warns Public to Prepare for 'Zombie Apocalypse'

(Zombies are both my monster and Apocalypse preference. Maybe it will coincide with the Rapture this Saturday. Wouldn't that be cool? A rapture followed by a Zombie Apocalypse for those of us left behind? I'm SO stocking up on ammo! Bring it on! Gotta love a clever ad campaign, I guess.--jef)


By Joshua Rhett Miller
Published May 18, 2011 |

Are you prepared for the impending zombie invasion?

That's the question posed by the Centers for Diseases Control and Prevention in a Monday blog posting gruesomely titled, "Preparedness 101: Zombie Apocalypse." And while it's no joke, CDC officials say it's all about emergency preparation.

"There are all kinds of emergencies out there that we can prepare for," the posting reads. "Take a zombie apocalypse for example. That's right, I said z-o-m-b-i-e a-p-o-c-a-l-y-p-s-e. You may laugh now, but when it happens you'll be happy you read this, and hey, maybe you'll even learn a thing or two about how to prepare for a real emergency."

The post, written by Assistant Surgeon General Ali Khan, instructs readers how to prepare for "flesh-eating zombies" much like how they appeared in Hollywood hits like Night of the Living Dead and video games like Resident Evil. Perhaps surprisingly, the same steps you'd take in preparation for an onslaught of ravenous monsters are similar to those suggested in advance of a hurricane or pandemic.

"First of all, you should have an emergency kit in your house," the posting continues. "This includes things like water, food, and other supplies to get you through the first couple of days before you can locate a zombie-free refugee camp (or in the event of a natural disaster, it will buy you some time until you are able to make your way to an evacuation shelter or utility lines are restored)."

Other items to be stashed in such a kit include medications, duct tape, a battery-powered radio, clothes, copies of important documents and first aid supplies.

"Once you've made your emergency kit, you should sit down with your family and come up with an emergency plan," the posting continues. "This includes where you would go and who you would call if zombies started appearing outside your doorstep. You can also implement this plan if there is a flood, earthquake or other emergency."

The idea behind the campaign stemmed from concerns of radiation fears following the earthquake and tsunami that rocked Japan in March. CDC spokesman Dave Daigle told that someone had asked CDC officials if zombies would be a concern due to radiation fears in Japan and traffic spiked following that mention.

"It's kind of a tongue-in-cheek campaign," Daigle said Wednesday. "We were talking about hurricane preparedness and someone bemoaned that we kept putting out the same messages."

While metrics for the post are not yet available, Daigle said it has become the most popular CDC blog entry in just two days.

"People are so tuned into zombies," he said. "People are really dialed in on zombies. The idea is we're reaching an audience or a segment we'd never reach with typical messages."

Editor's Note: The link to the posting at was not working as of Wednesday evening. Please check back for updates.

Bonin the Barbarian


Fort Worth Explosions

(Last week--May 10--our local population experienced some pretty brutal storms over about 5 or 6 days--not nearly so brutal as the good folks of Alabama & Mississippi endured last month--but those tornadoes that hit them might have been born here. Check out the two interactive maps linked at the bottom of this post. Thanks to Jason from whom I got the video link.

Here was part of our aftermath, not so dangerous as much as it was cool looking.--jef)

Interactive map showing path and timeline of the tornadoes

And as morbid as it is interesting, an interactive map chronicling the death and destruction of the tornado onslaught from this year, the deadliest year in US weather since 1974.

Were Stalin and Mengele behind Roswell UFOs?

(Oh, man, this story is even better than the whole alien bit. I hope it's true. I mean, the part with Mengele and the deformed kids is twisted and sad, but it happened long enough ago that mourning for them passes quickly, unfortunately. 

But I've never bought into the whole "UFOs are space aliens" theory. I'd love it if they were coming here, it would add an air of mystique to our mundane existences, but I just don't buy it. This actually makes sense, and it's funny, though not so much "ha ha" funny.  Wow!--jef)

'Area 51' book says Stalin enlisted infamous Nazi Dr. Josef Mengele in plan to scare US
By Mark Russell, News Staff
Posted May 16, 2011

(Newser) – Roswell and Area 51 have long been the focus of alien-hunting conspiracy theorists—and a new book's theory is likely to disappoint them. Annie Jacobsen's Area 51, a history of the top-secret base based on interviews with scientists and engineers who worked there, presents an explanation for the famous "flying disc" that crashed in Roswell in 1947—and it's nearly as crazy as the UFO theory. Jacobson writes that Josef Stalin was inspired by Orson Welles' famous 1938 radio broadcast of War of the Worlds, and wanted to throw the United States into a similar panic.

So Stalin enlisted Nazi doctor Josef Mengele, who had fled to South America after World War II, to create a crew of "grotesque, child-size aviators" to fly in a Horton Ho 229 plane the Soviets had seized from Germany; in exchange, he would get a eugenics lab. Actually, children, ages 12 and 13 and described by Jacobsen as having "unusually large heads and abnormally shaped oversize eyes," did not fly the plane; instead it was piloted remotely. But the Horton crashed in the New Mexico desert and authorities decided to hush up the incident, according the Telegraph.



A new book suggests that a favorite incident of UFO conspiracy theorists was really just a Cold War attempt to scare Americans!

UFO conspiracy theorists may be in for a letdown. A new book —Area 51 by Annie Jacobsen — says no alien spacecraft crashed to Earth in the famous so-called Roswell Incident of 1947. According to Britain's Telegraph, Jacobsen says the craft that smashed into the desert in a terrible storm was actually a top-secret Soviet plane with "grotesque, child-size aviators" bred in horrific human experiments and sent by Josef Stalin to create panic in the U.S. Is that possible — or is this story even harder to believe than tales of shipwrecked aliens?

On the Soviet human experiments her source told her about

"The child-sized aviators in this craft [that crashed in New Mexico] were the result of a Soviet human experimentation program, and they had been made to look like aliens a la Orson Welles' War of the Worlds, and it was a warning shot over President Truman's bow, so to speak. In 1947, when this would have originally happened, the Soviets did not yet have the nuclear bomb, and Stalin and Truman were locked in horns with one another, and Stalin couldn't compete in nuclear weaponry yet, but he certainly could compete in the world of black propaganda — and that was his aim, according to my source. ...

"What is firsthand information is that he worked with these bodies [of the pilots] and he was an eyewitness to the horror of seeing them and working with them. Where they actually came from is obviously the subject of debate. But if you look at the timeline with Josef Mengele, he left Auschwitz in January of 1945 and disappeared for a while, and the suggestion by the source is that Mengele had already cut his losses with the Third Reich at that point and was working with Stalin."

On why the Soviets would have undertaken such a hoax

"The plan, according to my source, was to create panic in the United States with this belief that a UFO had landed with aliens inside of it. And one of the most interesting documents is the second CIA director, Walter Bedell Smith, memos back and forth to the National Security Council talking about how the fear is that the Soviets could make a hoax against America involving a UFO and overload our early air-defense warning system, making America vulnerable to an attack."

Area 51: Never Before Seen Photos of America's Secret Base

The crash of a disc-shaped aircraft in Roswell, New Mexico, in July 1947 kicked off UFO speculation worldwide. In fact, the disc was a Russia spy plane -- one of many eye-opening revelations in AREA 51: An Uncensored History of America’s Top Secret Military Base
Alleged to be Stalin’s secret UFO study team are (standing left to right)
Sergei Korolev, chief missile designer and inventor of Sputnik; Igor Kurchatov,
father of Russia’s atomic bomb; and Mstislav Keldysh, mathematician, theoretician,
and space pioneers
In her new book AREA 51: An Uncensored History of America’s Top Secret Military Base, which goes on sale May 17, Annie Jacobsen offers for the first time an inside look at the history of America's top secret military base. It is the first book based on interviews with the scientist, pilots, and engineers -- 74 in total -- who for the first time reveal what really went on in the Nevada desert, from testing nuclear reactions to building super-secret supersonic jets to pursuing the war on terror.

Jacobsen, a contributing editor and investigative reporter at the Los Angeles Times Magazine, interviewed the former Area 51 employees in 2008 and 2009, shortly after the CIA declassified much of the work they had done, including countless pages of redacted memos and declassified reports. Area 51 is still officially a military secret, unmentioned by name, Jacobsen notes.

In this exclusive excerpt, Jacobsen reveals some of the wild research that went on in the 1970s at Area 51 -- where the military built the U-2 spy plane, rather than harboring crashed UFOs.

Part of a U-2 spy plane seen in 1955 coming out of a transport airplane at Area 51 -- where the secret craft was designed and perfected. The CIA’s first spy plane was so secret that Air Force pilots transporting it to Area 51 in pieces inside larger airplanes, would fly to a set of coordinates over the Mojave Desert and contact a UHF frequency called Sage Control for orders. Only when the aircraft was a few hundred feet off the ground would runway lights flash on.

"Operation Paperclip" scientists at Fort Bliss, Texas, in 1946. Until 1945, these men worked for Adolf Hitler, but as soon as the war ended these “rare minds” began working for the American military and various intelligence organizations, the details of which remain largely classified. Rocket scientist Wernher von Braun is in the front row, seventh from the right with his hand in his pocket.

Operation Plumbbob

In the summer and fall of 1957, a series of atmospheric nuclear tests — called Operation Plumbbob — were conducted above ground at the Nevada testing and training range, located just outside of Area 51. Twenty-nine explosions were set off while tests were conducted on troop readiness, accidental detonations and the effects of flying debris on living targets, according to documents declassified by the Department of Energy that Jacobsen details in her book.

During the explosions, security officer Richard Mingus stood guard outside many of the weapons-testing sites, including one with the largest atmospheric bomb that has ever exploded in the United States.

"The bomb goes off. Richard Mingus is at ground zero, safe away in a bunker somewhere, and suddenly someone realizes, 'My God, Area 51 is unsecured,' " Jacobsen says. "And so they send Richard Mingus through ground zero, 45 minutes to an hour after this nuclear bomb has exploded, so that he can get to Area 51 to guard the gate."

Mingus survived, as did many other atomic veterans who stood close to ground zero during other Plumbbob tests.

In Area 12 of the Nevada Test Site -- a separate though related nearby military facility --
workmen enter an underground atomic bomb tunnel through its mouth, summer 1957.
"You can absolutely drive through an atmospheric bomb test and not be affected," Jacobsen says. "Richard Mingus also stood guard at a test at a sub parcel of Area 51 ... [during] a dirty bomb test."

During the dirty bomb test, the Department of Defense and the Atomic Energy Commission simulated a plane crash where plutonium was dispersed on the ground, to see what would happen if an aircraft carrying a nuclear weapon were to crash on American soil. The resulting fallout and structural damage made much of the land uninhabitable.

"The area out at Area 51 that was part of the Operation Plumbbob test continues to be contaminated," she says. "It was not cleaned up until the '80s. And at that point, they sent in men in hazmat suits to scrape the land."