Sex at Dawn
By Dr. SUSAN BLOCK
What is it about the nature of human sexuality that virtually all civilizations throughout history have tried like the dickens to suppress? Why is sex so often such a problem when it really *should* be a pleasure? Why might your otherwise devoted husband rather masturbate to porn than have sex with you? Why might your normally modest wife fantasize about being consensually gangbanged by the Brazilian soccer team? Why do so many happily married people risk everything they love and cherish to go off and have an affair?
These are some of the big questions that Drs. Christopher Ryan, Ph.D. and Cacilda Jethá, M.D. address in their hot new book, Sex at Dawn: The Prehistoric Origins of Modern Sexuality. With provocative wit, yet intense seriousness of purpose, they gather together up-to-date research from various scientific disciplines to reveal a side of ourselves that is wild, scary, exhilarating, egalitarian and, without a doubt, non-monogamous.
Sex at Dawn also addresses some of the little questions like: Why does a man tend to thrust during intercourse (to displace a rival’s sperm through active suction)? Why does a woman tend to moan (to let other possible partners know she’s hot)? Is there a way to understand our non-monogamous sexual urges and fantasies as natural and useful instead of perverse, immoral or dysfunctional? Ryan and Jethá say yes.
The evidence is voluminous, but the repression of it is tremendous. So…are we ready to confront such scandalous biological truths about our hunter/gather sexual nature? Since Sex at Dawn recently hit the the New York Times Best-Seller List, it seems that yes, by golly, we are. At least, some of us are, from Newsweek’s Kate Dailey, who calls the book “a scandal in the best sense,” to Seattle-based sex guru Dan Savage, who has dubbed Sex at Dawn “the single most important book about human sexuality since the Kinsey Report.” Then again, Australia’s Sunrise on 7 tried to paint the book as a threat to marriage, morality and all that society holds dear, which, considering the source, only proves the irrefutable power of its message.
A Promiscuous Dawn
I discovered Sex at Dawn on Twitter—where the cyber-hunter/gatherers meet and feast on each other’s tweets—thanks to Bonobo Handshake author Vanessa Woods (a previous guest on The Dr. Susan Block Show). It’s appropriate that our kissin’ cousins the bonobos led me, swinging from Twitter tree to tree, to Sex at Dawn. In fact, the bonobos themselves, as well as the Bonobo Way of peace through pleasure, all but embody Ryan and Jethá’s concept of a prehistoric human forager community where “fierce egalitarianism” once ruled, war was virtually unknown, paternity was not an issue and possessiveness was not a problem—after all, what is there to possess when you’re always on the move and U-hauls haven’t been invented?
Most otherwise topnotch evolutionary psychologists, primatologists and anthropologists—like Drs. Helen Fisher, David Buss, Frans de Waal, Owen Lovejoy, Matt Ridley, Steven Pinker, Robert Wright and such notables—come up with flip, vague or convoluted ways to explain away unpopular evidence. They seem to be trying to squeeze the square peg of monogamy into the round hole of humanity. Ryan and Jethá have chosen a more well-rounded term to characterize the essence of human sexuality as practiced by our prehistoric progenitors: promiscuity.
That’s a loaded word in common parlance, but when Ryan and Jethá say “promiscuous,” they don’t mean reckless, uncaring, libertine screwing around. Rather they impart the sense of its Latin root, “miscere,” which means “to mix,” implying that our ancestors enjoyed what biologist Alan F. Dickson called “multi-male/multi-female mating systems,” involving ongoing erotic, caring relationships with a mix of selected members of their close-knit tribe. I imagine this promiscuity could take many different forms; perhaps one approach might involve serial romances with three or four partners at any given time, erotic skin-to-skin encounters with several others and an orgy around the fire every Saturday night. Sound like fun to you?
It did to me, so I asked Ryan to send me a review copy in preparation for our radioSUZY1 interview which would take place, appropriately enough, at dawn in Barcelona where he and wife/co-author Jethá reside. As soon as the 400-page tome arrived at the Institute, I devoured it like a hungry forager who had just stumbled upon the Tree of Knowledge, laden with luscious fruit. Then I read it again, slowly, savoring the pages like an after-dinner liqueur. Sex at Dawn is a sheer pleasure to peruse, and not only because it eloquently backs up theories I’ve been espousing for years with mountains of carefully compiled evidence (which I can now use to thwart enemies of pleasure). This is a book whose time has come…and with all the reverberating tweets, excited postings and passionate reactions (I’m not the only one who’s reading it twice), it seems to be coming again and again…
Farmers and Golddiggers
But back to Ryan and Jethá’s thesis: homo sapiens (that’s us) did not evolve in monogamous, Flintstonesque, nuclear families, with or without the white picket fences, as so many people, corporations and institutions in the “Marital Industrial Complex”—from couples counselors to congressmen, religious preachers to science teachers—preach and teach. Rather, we evolved in 20-150 person hunter-gatherer groups in which nobody owned property (nor much of anything at all), and normal adults would have been engaged in multiple ongoing sexual relationships with different group members at any given time, quite like our closest living relatives: common chimps and bonobos.
Why is the sexuality of our ancestors some 100,000-200,000 years ago such a huge deal to us now—even to those of us who don’t care about history, let alone prehistory? Because the human body (featuring, of course, the human brain inside that body) evolved under these prehistoric conditions to be, essentially, what it is today: a highly social, communicative and very sexy beast.
So how in civilized tarnation did we come up with monogamy? With blood, sweat and a lot of tears. After hundreds of thousands of years of nomadic, promiscuous foraging, some 10,000-12,000 years ago, a human revolution took place that spread throughout the planet. This was a revolution like no other before or since; though it didn’t alter human anatomy, it fostered a monumental change in the human way of life. This revolution was the advent of agriculture.
With agriculture came a relatively reliable source of food for which you didn’t have to hunt or search. You simply had to cultivate it. Sounds awesome, huh? Seems like it would make life a lot easier now that you didn’t have to chase down your lunch through the bushes every day. That’s a fine theory. The reality is that farming didn’t make life easier at all, say Ryan and Jethá. On the contrary, the Great Agricultural Revolution spawned a much more demanding, oppressive, property-oriented, greed-driven, envy-stricken, brutal, stressful lifestyle.
Of course, it also meant that a lot more babies would survive than did in hunter-gatherer days. Farming increased fertility and lowered the rate of infant mortality, generating population explosions that led to the creation of great cities and elaborate cultures. Yet, the host of new diseases farming unleashed, coupled with the less varied nutritional diet, actually worsened adult human health.
Farming also generated a need for a military, to protect “your” property and/or make war on your neighbors if you felt like taking their property. It spawned governing bureaucracies to make property-conscious laws against stealing and adultery. And it favored certain aggressive individuals (almost always men) who took “possession” of land, resources and animals, including their fellow homo sapiens. Yes indeed, the agricultural revolution involved the domestication of human beings—a farmer’s slaves and hired workers, as well as his “own” children and his “own” wife or wives—right along with his other domesticated animals.
I’ve said it before and I’ll say it again, this time while standing up on Ryan and Jethá’s mammoth mountain of evidence: Farming is the root of all evil.
Or as Sex at Dawn so eloquently explains: The Bible got it backwards. Adam and Eve weren’t kicked out of a Garden into the wilderness as punishment for their sins. They were kicked into one. Upon eating from the Tree of Knowledge and learning the mysteries of agriculture, humanity was swept out of the wilderness, the wild jungles, forests, savannas and untamed coastlines and plopped down behind a Neolithic lawn mower in a garden, aka: The Family Farm.
With farming, the “family” was born, complete with Father knowing best and Mother being barefoot and preggers, presumably with only Father’s offspring. Before the agricultural revolution, paternity was not an issue. Since prehistoric human females, like bonobos, hid their estrus, the mechanics of conception were a mystery. Nobody could be sure whose father was whose, just as no chimpanzee male knows whose baby his current favorite female is carrying (this, by the way, is how chimp kids escape infanticide).
Ryan and Jethá theorize that our prehistoric ancestors may have believed that it took several men’s sperm to make one baby (studies show that some forager tribes still believe this). Thus, all the men in any given tribe felt more or less the same level of responsibility for and kinship with all the children (also like bonobos and common chimps).
As soon as farmers started breeding plants and domesticated animals, learning exactly how “sex makes babies,” they applied this knowledge to their own sexual relationships. Paternity went from being a great unknown to being a great big deal. One of Ryan and Jethá’s main points here is that the male obsession with paternity and the female obsession with finding a breadwinner are not innate human sexual nature. They are not as old as humanity. They are a reaction to the modern, post-Neolithic world.
Choosy or Floozy?
With this newfound knowledge of paternity, men cultivated ownership of “their” women and children. The elite practiced polygamy while the majority developed monogamy, in order to “guarantee” paternity. This way, you knew your kids were “yours” and you could force them to work on your farm and then pass that farm down to them—the lucky little bastards—so that you might feel some sense of immortality, as you died prematurely, victim of diseases from which your forager ancestors never suffered.
With the Agricultural Revolution, the natural promiscuity of “mixing” lovers was turned into the grave sin of “cheating” or “infidelity,” for which the punishment—especially for women—ranged from ostracism to torture to public execution.
Thus chastened, ladies learned to hide their desire, along with their lovers. And civilization developed the notion that human females are naturally “choosy” and reserved about sex. Ryan and Jethá reference Advice Goddess Amy Alcon’s over-confident statement that “ancestral women who successfully passed their genes onto us...[were] choosy [about] weeding the dads from the cads” as a prime example of an ill-informed “sexpert” writing about sex; they then proceed to utterly demolish it with illustrations and recent studies from 12 different branches of science.
Though you’d think it would have been dashed by common sense. If females are indeed the “choosier,” more sexually reserved gender by nature, why would men throughout history have gone to such great lengths to control the female libido?
And isn’t it funny how we generally don’t assume that motherly love should be confined to one child. So why do we believe that sexual love must be confined to one lover?
Pleasure, Violence & The New Promiscuity (Much Like the Old Promiscuity)
Sex at Dawn doesn’t present any brand new findings or even any particularly new ideas. It’s the way in which Ryan and Jethá bring together old and recent findings and ideas to support their thesis that is so valuable and extraordinary.
I was particularly delighted to read their reference to my favorite developmental neuropsychologist and mentor, Dr. James Prescott, whose landmark 1975 paper, “Body Pleasure and the Origins of Violence,” demonstrated that the deprivation of pleasurable physical touch, especially during the infant and adolescent years, leads people to violence and war in 49 cultures.
Ryan and Jethá also quote The Lifestyle: Erotic Rites of Swingers, by my old friend Terry Gould, with regard to the WWII Air Force officers and wives who started the modern swinging couples “lifestyle” in 1940s suburban America with their secret “key clubs.” (Gould devotes another chapter in The Lifestyle to following me and my Bonobo Gang of friends and lovers around a 1996 Lifestyles Convention as we party and discuss Ethical Hedonism and the Bonobo Way.)
That same year, Gould introduced me to the concept of the “sperm wars” that go on inside a woman’s vagina (explained more thoroughly in “Sperm Wars: Cuckolds, Hot Wives and Evolutionary Biology”). So even if women aren’t so “choosy” about with whom we have sex, at least our reproductive tract is somewhat selective. That is, through a series of biological hurdles and the phenomenon of sperm wars, the female genital system only allows the strongest—or best positioned—sperm to win the prize of fertilizing the egg. Of course, this assumes that a woman has sperm from more than one man inside her—or, at least, that she is anatomically built for that purpose—which flows right into Ryan and Jethá’s thesis that the human body has evolved to practice promiscuity.
And they weave it all together—stats and studies on everything from porn to prairie voles, balls to bukkake, vibrators to vampire bats, cuckolds to cougars, Melanesian Wedding Orgies to Victorian morality, instant lust to lasting love—to support their idea (which holds very close to my idea) that the human body and the human mind and that general all-around crazy thing that we call human behavior all reflect both our true highly sexual nature and our very promiscuous prehistoric past—one which seems to have also been a relatively peaceful past, much like the Bonobo Way of peace through pleasure suggests that it would have been…
This is not to suggest that we should all live in polyamorous households. Personally, I love being married—to just one husband. And the Sex at Dawn authors, themselves married for over 10 years, aren’t overtly advocating anything except opening our minds to the evidence of our innate promiscuity and the way in which it influences our lives.
But that doesn’t mean that others won’t use Sex at Dawn to validate their open marriages and polyamorous adventures.
More power to them.
Saturday, August 21, 2010
Israel, Big Money and Obama
Mr. Crown and the President
By MARGARET KIMBERLEY
Lester Crown is a Chicagoan with a net worth of four billion dollars. He owns a large stake in and is a former president and board chairman of defense contractor General Dynamics. He also has held large holdings in Hilton Hotels, Maytag (now Whirlpool), and the Chicago Bulls and New York Yankees.
Crown was an early supporter of Barack Obama’s candidacy first for the U.S. Senate, and then for president. He is one of the first and one of his most prodigious fundraisers. As the Obama presidential campaign website says, the candidate “… systematically built a sophisticated, and in many ways quite conventional, money machine.” The Crowns were an integral part of that machinery. One of Lester Crown’s children, James Crown, personally bundled $500,000 in campaign contributions for Obama and served as chairman of the Illinois fund raising effort. Lester Crown and his wife Renee hosted a fundraiser for Obama in 2007 at their home. The event invitation made it clear; their support for Obama was due to his support of Israel, its “right to exist“ and his willingness to strike militarily against Iran.
Every American president has wealthy individuals and families dedicated to getting them elected. The reliance of candidates for public office on the largesse of the rich may be common and expected, but it is nonetheless extremely dangerous. This corruption insures access for the rich, which guarantees that their interests are at the top of any president’s agenda, usually at the expense of what is good for everyone else.
For Lester Crown the top issue on his agenda is Israel. As he has said himself, "While my involvement in politics is motivated by a variety of issues, there is one issue that is fundamental: My deep commitment to Israel and to a strong U.S.-Israel relationship that strengthens both Israel's security and its efforts to seek peace."
According to a recently published article in The Atlantic, Israeli general Amos Yadlin traveled to Chicago in an effort to enlist Crown’s help in convincing the administration to attack Iran. White House visitor logs show that Crown did in fact visit the White House in April of this year to meet with Obama adviser Valerie Jarrett. The Israeli newspaper Haaretz reported that Prime Minister Benjamin Netanyahu applied “hidden pressure” on Obama which came “from Chicago.”
When asked about this report, Crown denied only that Yadlin traveled to Chicago. He confirmed that the two spoke and were in agreement about wanting the United States to attack Iran. “ ‘I support the president,” Crown said. ‘But I wish [administration officials] were a little more outgoing in the way they have talked. I would feel more comfortable if I knew that they had the will to use military force, as a last resort. You cannot threaten someone as a bluff. There has to be a will to do it.’ ”
Lester Crown’s opinions are not like anyone else’s two cents. He is a defense contractor, meaning he has a personal interest in maintaining the state of permanent war for the United States. He is also a very wealthy man who worked hard to get Barack Obama elected. Crown’s October 1, 2007 fundraiser was directed primarily at Jewish contributors who may have been insufficiently convinced of Obama‘s support for maintaining the status quo in America‘s relations with Israel. The event invitation read in part, “The purpose of the evening is to show Barack how appreciative we are of his steadfast, honest and proud support of Israel.”
Those are the words out of Crown’s own mouth. No one should be squeamish about questioning his actions and his motives and the very fact that a private citizen conducts foreign policy in secret. Lester Crown was not elected to any office, he was not appointed to pursue foreign policy on behalf of the government, he hasn‘t been confirmed by the United States Senate. If congress had even a small amount of courage, Crown would be subpoenaed to testify about his communications with Yadlin and with the president and his advisors.
The story of a presidential campaign contributor’s contacts with a general of a foreign nation’s military ought to be front page news. Sadly, that lack of coverage is not surprising. The corporate controlled media would reveal too much about themselves if they told us the truth about the little bit of democracy we have left. No one becomes a serious presidential contender without first passing muster with the Lester Crowns of the world. All of which means that American style democracy is little more than a sham. Iowans and New Hampshirites don’t determine who will be president. The Crowns and their ilk are the ones who get to choose before anyone pulls a lever in a voting booth.
The story of Lester Crown’s foray into foreign policy will not make headlines as it should. Congress will not question him under oath. Only individuals who are interested enough and savvy enough will know a little of the tale of how a nation’s people gave up their rights so the rich might have their way. The issue at hand for Lester Crown is Israel, but the CEOs and board chairmen of other industries hold sway in their spheres as much as Lester Crown does in his.
There will always be people of great wealth who influence what happens to people in the rest of world. Today Israel, tomorrow big pharma, and big oil the day after that. BP poisons the Gulf of Mexico with impunity and Lester Crown wants to commit a crime of his own. The only crime worse than an attack on Iran is acquiescence in the face of corporate control of our lives.
By MARGARET KIMBERLEY
“Barack Obama has established a strong record as a true friend of Israel, a stalwart defender of Israel’s security, and an effective advocate of strengthening the steadfast U.S.-Israel relationship, publicly stating that Israel’s right to exist as a Jewish state should never be challenged.”
– Lester Crown
Lester Crown is a Chicagoan with a net worth of four billion dollars. He owns a large stake in and is a former president and board chairman of defense contractor General Dynamics. He also has held large holdings in Hilton Hotels, Maytag (now Whirlpool), and the Chicago Bulls and New York Yankees.
Crown was an early supporter of Barack Obama’s candidacy first for the U.S. Senate, and then for president. He is one of the first and one of his most prodigious fundraisers. As the Obama presidential campaign website says, the candidate “… systematically built a sophisticated, and in many ways quite conventional, money machine.” The Crowns were an integral part of that machinery. One of Lester Crown’s children, James Crown, personally bundled $500,000 in campaign contributions for Obama and served as chairman of the Illinois fund raising effort. Lester Crown and his wife Renee hosted a fundraiser for Obama in 2007 at their home. The event invitation made it clear; their support for Obama was due to his support of Israel, its “right to exist“ and his willingness to strike militarily against Iran.
Every American president has wealthy individuals and families dedicated to getting them elected. The reliance of candidates for public office on the largesse of the rich may be common and expected, but it is nonetheless extremely dangerous. This corruption insures access for the rich, which guarantees that their interests are at the top of any president’s agenda, usually at the expense of what is good for everyone else.
For Lester Crown the top issue on his agenda is Israel. As he has said himself, "While my involvement in politics is motivated by a variety of issues, there is one issue that is fundamental: My deep commitment to Israel and to a strong U.S.-Israel relationship that strengthens both Israel's security and its efforts to seek peace."
According to a recently published article in The Atlantic, Israeli general Amos Yadlin traveled to Chicago in an effort to enlist Crown’s help in convincing the administration to attack Iran. White House visitor logs show that Crown did in fact visit the White House in April of this year to meet with Obama adviser Valerie Jarrett. The Israeli newspaper Haaretz reported that Prime Minister Benjamin Netanyahu applied “hidden pressure” on Obama which came “from Chicago.”
When asked about this report, Crown denied only that Yadlin traveled to Chicago. He confirmed that the two spoke and were in agreement about wanting the United States to attack Iran. “ ‘I support the president,” Crown said. ‘But I wish [administration officials] were a little more outgoing in the way they have talked. I would feel more comfortable if I knew that they had the will to use military force, as a last resort. You cannot threaten someone as a bluff. There has to be a will to do it.’ ”
Lester Crown’s opinions are not like anyone else’s two cents. He is a defense contractor, meaning he has a personal interest in maintaining the state of permanent war for the United States. He is also a very wealthy man who worked hard to get Barack Obama elected. Crown’s October 1, 2007 fundraiser was directed primarily at Jewish contributors who may have been insufficiently convinced of Obama‘s support for maintaining the status quo in America‘s relations with Israel. The event invitation read in part, “The purpose of the evening is to show Barack how appreciative we are of his steadfast, honest and proud support of Israel.”
Those are the words out of Crown’s own mouth. No one should be squeamish about questioning his actions and his motives and the very fact that a private citizen conducts foreign policy in secret. Lester Crown was not elected to any office, he was not appointed to pursue foreign policy on behalf of the government, he hasn‘t been confirmed by the United States Senate. If congress had even a small amount of courage, Crown would be subpoenaed to testify about his communications with Yadlin and with the president and his advisors.
The story of a presidential campaign contributor’s contacts with a general of a foreign nation’s military ought to be front page news. Sadly, that lack of coverage is not surprising. The corporate controlled media would reveal too much about themselves if they told us the truth about the little bit of democracy we have left. No one becomes a serious presidential contender without first passing muster with the Lester Crowns of the world. All of which means that American style democracy is little more than a sham. Iowans and New Hampshirites don’t determine who will be president. The Crowns and their ilk are the ones who get to choose before anyone pulls a lever in a voting booth.
The story of Lester Crown’s foray into foreign policy will not make headlines as it should. Congress will not question him under oath. Only individuals who are interested enough and savvy enough will know a little of the tale of how a nation’s people gave up their rights so the rich might have their way. The issue at hand for Lester Crown is Israel, but the CEOs and board chairmen of other industries hold sway in their spheres as much as Lester Crown does in his.
There will always be people of great wealth who influence what happens to people in the rest of world. Today Israel, tomorrow big pharma, and big oil the day after that. BP poisons the Gulf of Mexico with impunity and Lester Crown wants to commit a crime of his own. The only crime worse than an attack on Iran is acquiescence in the face of corporate control of our lives.
The Myth of "Credibility Markets"
The Obama Team's Perverse Economics
By MARSHALL AUERBACK
It is time to distinguish between the truths and the myths propagated by Wall Street, among them the hoary old stand-by, that “if you don’t do anything with spending cuts, it doesn’t get you credibility.”
This, in a word, encapsulates the Administration’s perverse Wall Street-centric thinking. Credibility with the American people takes a back seat to this amorphous concept called “the markets”, and the corresponding need to maintain “credibility”.
But how are we to divine the true aspirations of the markets? Is this really a legitimate basis for government policy? Private portfolio preference shifts (which are manifested daily in the capital markets) are probably the area least amenable to economic analysis. There are no cookie cutter models here (and economists LOVE models).
Consider the case of a currency: How does one respond to a weaker currency? The conventional response seems to be, “Raise interest rates and eventually you’ll re-attract the capital because you will re-establish ‘credibility’ with the markets”. That was essentially the IMF advice to East Asia in 1997. But, as that experience demonstrated, sometimes raising rates can actually trigger additional capital flight if it is perceived to be a panicked reaction to something. And Japan today clearly demonstrates that low rates per se do not necessarily prefigure a weaker currency. What does a 10 year Japanese government bond yielding less than 1% tell us about “the markets”? Does it reflect approval with a country that has a public debt to GDP ratio about 2.5 times higher than the US?
To paraphrase Milton (the poet, not Friedman), sometimes they also serve who only stand and wait!
Markets are an amorphous concept, which reflect heterogeneity of viewpoints. Some people today are buying gold because they foresee a Weimar style hyperinflation emerging in the face of all of this government spending. Some buy it because they envisage the death of fiat currencies and view the yellow metal as the ultimate insurance policy. Some invest because they consider gold the only real form of money. Some people view it as a barbarous relic and ignore it altogether. How does a government respond to these varying points of view? What’s the right policy response?
The myth that markets, not governments, ultimately determine rates has, of course, been legitimized to some degree by virtue of the fact that our institutional monetary arrangements still reflect archaic gold standard type thinking (whereby a certain amount of gold on hand was required to fund government operations). But we went off the gold standard decades ago. Still we have laws which mandate that all net government spending is matched $-for-$ by borrowing from the private market. So net spending appears to be “fully funded” (in the erroneous neo-liberal terminology) by the market. But in fact, all that is actually happening is that the Government is coincidentally draining the same amount from reserves as it adds to the banks each day and swapping cash in reserves for government paper.
The resultant bond market drain is there to ensure that the central bank maintains control of its reserve rate. It has nothing to do with “funding” government operations itself.
If you think that sounds radical then consider the following question posed by Professor Bill Mitchell: If a government bond auction “fails” (i.e. the government doesn’t find enough buyers for the paper it issues during that particular sale), does this mean that your Social Security cheque is going to bounce? Will national infrastructure projects be suddenly halted because the net spending is not “funded”? Do we have to stop fighting a war in Afghanistan? The answer to all of these questions is the same: Of course not! The net spending will go wherever the Government intends it to go - after all the Government needs no funds to spend because it first creates the currency which is ultimately required to be spent in the real economy. The private sector does not produce dollars (if it did, it would represent a jailable offence called counterfeiting).
More fundamentally, how does one presume that the private sector can net save (in this case, dollars) something it cannot net produce?
Isn’t it true that the government is in a unique position because only it has the capacity to create new net financial assets? Now, granted, this simple observation does not readily apply to the euro zone because the individual countries concerned have effectively ceded that authority, thereby circumscribing an adequate fiscal response to their crisis . But when the operations of government are examined in this light, it establishes that the Obama Administration’s ongoing fixation with “long term deficit reduction” and “establishing credibility with the markets” is as foolhardy as conducting human sacrifices to placate a deity.
Yet government policy responses today on issues like Social Security or Medicare reflect a misguided belief system and a genuine failure to understand the basis of modern money. Scaling back Social Security will certainly drive unemployment up higher than it is already going becomes it robs people of the very income required to sustain growth. Not a very sensible strategy if you truly care about implementing “change that people can believe in”.
Unfortunately, until these Wall Street-centric beliefs are fully exposed for the myths that they are, we can expect to see more dispiriting headlines of the sort reflected in Mike Allen’s latest politico playbook.
By MARSHALL AUERBACK
It is time to distinguish between the truths and the myths propagated by Wall Street, among them the hoary old stand-by, that “if you don’t do anything with spending cuts, it doesn’t get you credibility.”
This, in a word, encapsulates the Administration’s perverse Wall Street-centric thinking. Credibility with the American people takes a back seat to this amorphous concept called “the markets”, and the corresponding need to maintain “credibility”.
But how are we to divine the true aspirations of the markets? Is this really a legitimate basis for government policy? Private portfolio preference shifts (which are manifested daily in the capital markets) are probably the area least amenable to economic analysis. There are no cookie cutter models here (and economists LOVE models).
Consider the case of a currency: How does one respond to a weaker currency? The conventional response seems to be, “Raise interest rates and eventually you’ll re-attract the capital because you will re-establish ‘credibility’ with the markets”. That was essentially the IMF advice to East Asia in 1997. But, as that experience demonstrated, sometimes raising rates can actually trigger additional capital flight if it is perceived to be a panicked reaction to something. And Japan today clearly demonstrates that low rates per se do not necessarily prefigure a weaker currency. What does a 10 year Japanese government bond yielding less than 1% tell us about “the markets”? Does it reflect approval with a country that has a public debt to GDP ratio about 2.5 times higher than the US?
To paraphrase Milton (the poet, not Friedman), sometimes they also serve who only stand and wait!
Markets are an amorphous concept, which reflect heterogeneity of viewpoints. Some people today are buying gold because they foresee a Weimar style hyperinflation emerging in the face of all of this government spending. Some buy it because they envisage the death of fiat currencies and view the yellow metal as the ultimate insurance policy. Some invest because they consider gold the only real form of money. Some people view it as a barbarous relic and ignore it altogether. How does a government respond to these varying points of view? What’s the right policy response?
The myth that markets, not governments, ultimately determine rates has, of course, been legitimized to some degree by virtue of the fact that our institutional monetary arrangements still reflect archaic gold standard type thinking (whereby a certain amount of gold on hand was required to fund government operations). But we went off the gold standard decades ago. Still we have laws which mandate that all net government spending is matched $-for-$ by borrowing from the private market. So net spending appears to be “fully funded” (in the erroneous neo-liberal terminology) by the market. But in fact, all that is actually happening is that the Government is coincidentally draining the same amount from reserves as it adds to the banks each day and swapping cash in reserves for government paper.
The resultant bond market drain is there to ensure that the central bank maintains control of its reserve rate. It has nothing to do with “funding” government operations itself.
If you think that sounds radical then consider the following question posed by Professor Bill Mitchell: If a government bond auction “fails” (i.e. the government doesn’t find enough buyers for the paper it issues during that particular sale), does this mean that your Social Security cheque is going to bounce? Will national infrastructure projects be suddenly halted because the net spending is not “funded”? Do we have to stop fighting a war in Afghanistan? The answer to all of these questions is the same: Of course not! The net spending will go wherever the Government intends it to go - after all the Government needs no funds to spend because it first creates the currency which is ultimately required to be spent in the real economy. The private sector does not produce dollars (if it did, it would represent a jailable offence called counterfeiting).
More fundamentally, how does one presume that the private sector can net save (in this case, dollars) something it cannot net produce?
Isn’t it true that the government is in a unique position because only it has the capacity to create new net financial assets? Now, granted, this simple observation does not readily apply to the euro zone because the individual countries concerned have effectively ceded that authority, thereby circumscribing an adequate fiscal response to their crisis . But when the operations of government are examined in this light, it establishes that the Obama Administration’s ongoing fixation with “long term deficit reduction” and “establishing credibility with the markets” is as foolhardy as conducting human sacrifices to placate a deity.
Yet government policy responses today on issues like Social Security or Medicare reflect a misguided belief system and a genuine failure to understand the basis of modern money. Scaling back Social Security will certainly drive unemployment up higher than it is already going becomes it robs people of the very income required to sustain growth. Not a very sensible strategy if you truly care about implementing “change that people can believe in”.
Unfortunately, until these Wall Street-centric beliefs are fully exposed for the myths that they are, we can expect to see more dispiriting headlines of the sort reflected in Mike Allen’s latest politico playbook.
Whacking the Middle Class
When Wall Street Rules, We Get Wall Street Rules
By DEAN BAKER
The middle class is getting whacked by the Great Recession. Fifteen million people are out of work, another 9 million workers can only find part-time jobs, and millions more have given up looking for work altogether. Those lucky enough to be employed are unlikely to see any substantial wage gains for years to come.
Millions of homeowners are facing the loss of their home and more than 10 million are underwater in their mortgage. Most of the huge baby boom cohort is approaching retirement with little other than Social Security to support them, now that the collapse of the housing bubble has destroyed their home equity and much of the rest of their savings.
This pain is infuriating for two reasons. First, this was an entirely preventable disaster. The housing bubble was easy to see. Competent economists had long warned of its dangers.
The second reason why the current situation is infuriating is that we know how to get the economy out of this mess. We just need to boost demand. This can be done either with much more government stimulus, more aggressive monetary policy from the Fed, or pushing the dollar down to boost exports.
If this disaster were preventable and we knew how to get out of it, why didn't our leaders try to stop it before it happened? Why don't they take the steps necessary now to get the economy moving again?
The answer to both these questions is simple: The politicians work for someone else. On Election Day, the politicians might need our votes, but they won't get to be serious contenders unless they've gotten the campaign contributions of the big money crew. And the moneyed elite has been using its control of the political process to ensure that an ever larger share of the economy's output is redistributed upward in their direction.
The reason that there was little interest in cracking down on the housing bubble is that Goldman Sachs, Citigroup and the rest were making a fortune from the financial shenanigans that fueled the bubble. Former Treasury Secretary Robert Rubin personally pocketed over $100 million from this fun. Why would they want the government to rein it in?
Of course, when the bubble did finally blow and threaten their banks with bankruptcy, the Wall Street crew just ran to the government for help. And they got trillions of dollars in loans and loan guarantees to ensure that they would not be victims of the crisis they had created. Now that they are back on their feet, with Wall Street profits and bonuses both again at near record levels, they see little reason to concern themselves with the measures that might set the economy right for the rest of us.
After all, the steps necessary to revitalize the economy could mean some inflation. This would reduce the value of the debt owned by the wealthy. And the wealthy don't see any reason that they should risk any of their wealth just for the good of the economy.
We have enormous ground to cover to restore an economy that works for the vast majority, but the first step is to know where we are. The upward redistribution of the last three decades has nothing to do with the market and a belief in "market fundamentalism." This is about a process where the rich and powerful have rewritten the rules to make themselves richer and more powerful.
For example, they wrote trade rules that were designed to put downward pressure on the wages of the bulk of the U.S. workforce by placing manufacturing workers in direct competition with low-paid workers in China and other developing countries. This had nothing to do with a belief in "free trade." They did not try to subject lawyers, doctors or other highly paid workers to the same sort of international competition. They only wanted international competition to put downward pressure on the wages of workers in the middle and bottom, not those at the top.
This elite has instituted a system of corporate governance that allows top executives to pilfer companies at the expense of their shareholders and its workers. Top executives are overseen only by a board of directors who owe their hugely overpaid sinecures to the executives they supervise. And of course the Wall Street barons themselves are given a license to gamble with the implicit promise that government picks up their tab when they lose.
No progressive movement will make any progress until we understand the battle we are fighting. Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees. That is their target.
We have to fight back using the same logic. Their income is our cost -- the multimillion dollar bonuses for the Wall Street wizards is a direct drain on the economy. So are the bloated paychecks of top executives and their lackey boards. Progressives must be prepared to use all the same tactics to bring down the income of the rich and powerful that they have used to reduce the income of everyone else.
This means restructuring the rules of corporate governance to put serious downward pressure on the pay of top executives. The highest paid workers (doctors, lawyers, and economists) must be subjected to international competition in the same way as manufacturing workers have been subjected to international competition. And, we should sharply limit the extent of the patent or copyright protections that are exploited by the drug industry and the entertainment and software industries.
We have to put the focus on the ways the rich have rigged the rules and place this at the center of political debate. The three decade-long battle over tax cuts for the rich is important, but at the end of the day it is a side show. If we let them steal all the money at the onset, it really doesn't make much difference if they end up letting us tax a little of it back.
By DEAN BAKER
The middle class is getting whacked by the Great Recession. Fifteen million people are out of work, another 9 million workers can only find part-time jobs, and millions more have given up looking for work altogether. Those lucky enough to be employed are unlikely to see any substantial wage gains for years to come.
Millions of homeowners are facing the loss of their home and more than 10 million are underwater in their mortgage. Most of the huge baby boom cohort is approaching retirement with little other than Social Security to support them, now that the collapse of the housing bubble has destroyed their home equity and much of the rest of their savings.
This pain is infuriating for two reasons. First, this was an entirely preventable disaster. The housing bubble was easy to see. Competent economists had long warned of its dangers.
The second reason why the current situation is infuriating is that we know how to get the economy out of this mess. We just need to boost demand. This can be done either with much more government stimulus, more aggressive monetary policy from the Fed, or pushing the dollar down to boost exports.
If this disaster were preventable and we knew how to get out of it, why didn't our leaders try to stop it before it happened? Why don't they take the steps necessary now to get the economy moving again?
The answer to both these questions is simple: The politicians work for someone else. On Election Day, the politicians might need our votes, but they won't get to be serious contenders unless they've gotten the campaign contributions of the big money crew. And the moneyed elite has been using its control of the political process to ensure that an ever larger share of the economy's output is redistributed upward in their direction.
The reason that there was little interest in cracking down on the housing bubble is that Goldman Sachs, Citigroup and the rest were making a fortune from the financial shenanigans that fueled the bubble. Former Treasury Secretary Robert Rubin personally pocketed over $100 million from this fun. Why would they want the government to rein it in?
Of course, when the bubble did finally blow and threaten their banks with bankruptcy, the Wall Street crew just ran to the government for help. And they got trillions of dollars in loans and loan guarantees to ensure that they would not be victims of the crisis they had created. Now that they are back on their feet, with Wall Street profits and bonuses both again at near record levels, they see little reason to concern themselves with the measures that might set the economy right for the rest of us.
After all, the steps necessary to revitalize the economy could mean some inflation. This would reduce the value of the debt owned by the wealthy. And the wealthy don't see any reason that they should risk any of their wealth just for the good of the economy.
We have enormous ground to cover to restore an economy that works for the vast majority, but the first step is to know where we are. The upward redistribution of the last three decades has nothing to do with the market and a belief in "market fundamentalism." This is about a process where the rich and powerful have rewritten the rules to make themselves richer and more powerful.
For example, they wrote trade rules that were designed to put downward pressure on the wages of the bulk of the U.S. workforce by placing manufacturing workers in direct competition with low-paid workers in China and other developing countries. This had nothing to do with a belief in "free trade." They did not try to subject lawyers, doctors or other highly paid workers to the same sort of international competition. They only wanted international competition to put downward pressure on the wages of workers in the middle and bottom, not those at the top.
This elite has instituted a system of corporate governance that allows top executives to pilfer companies at the expense of their shareholders and its workers. Top executives are overseen only by a board of directors who owe their hugely overpaid sinecures to the executives they supervise. And of course the Wall Street barons themselves are given a license to gamble with the implicit promise that government picks up their tab when they lose.
No progressive movement will make any progress until we understand the battle we are fighting. Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees. That is their target.
We have to fight back using the same logic. Their income is our cost -- the multimillion dollar bonuses for the Wall Street wizards is a direct drain on the economy. So are the bloated paychecks of top executives and their lackey boards. Progressives must be prepared to use all the same tactics to bring down the income of the rich and powerful that they have used to reduce the income of everyone else.
This means restructuring the rules of corporate governance to put serious downward pressure on the pay of top executives. The highest paid workers (doctors, lawyers, and economists) must be subjected to international competition in the same way as manufacturing workers have been subjected to international competition. And, we should sharply limit the extent of the patent or copyright protections that are exploited by the drug industry and the entertainment and software industries.
We have to put the focus on the ways the rich have rigged the rules and place this at the center of political debate. The three decade-long battle over tax cuts for the rich is important, but at the end of the day it is a side show. If we let them steal all the money at the onset, it really doesn't make much difference if they end up letting us tax a little of it back.
The Economy is in Big Trouble
Down the Drain
By MIKE WHITNEY
Imagine the reaction at the White House when the Department of Labor released its weekly unemployment figures on Thursday. Jobless claims rose by 12,000 to 500,000 in the second week of August. There's been no improvement in the jobs market in 9 months and now unemployment is edging upwards again. This wasn't supposed to happen. The Obama administration had bet everything that the economy had turned the corner and would gradually get better. Many economists saw less than a 10 per cent chance that the economy would tip back into recession. After all, double dip recessions are "extremely rare". Now more people are losing their jobs and Team Obama is caught in the headlights. There is no back-up plan, no Plan B. The Democrats will face the midterms with no stimulus to create new jobs and with an economy that is steadily deteriorating. It's going to be a massacre and they know it.
Obama and his lieutenants have stopped talking about austerity measures. The plan to dismantle Social Security has been put on hold,( though the Commission headed by the appalling former Senator Alan Simpson grinds on with its mission of destruction.) No one wants to hear about belt tightening when the future is uncertain and they're worried about losing their jobs. Obama will have to shift-gears again; switch from promoting the elitist "privatize everything" agenda to his "I feel your pain" routine. He might want to dig up some archived video of B. Clinton chewing his lip and blinking back the tears.
All of the economic data is being revised downwards. The economy is in big trouble and the politicians are just starting to catch on. Stocks fell sharply on Thursday (Dow down 144 points) on news that manufacturing (Philly Fed Index) shrank in August beyond analysts expectations. Nearly every category fell including shipments and new orders. The Dow Jones is off 10 per cent since April 23, more than a 1,000 point loss in the last 4 months. Also, Moody's reported that commercial real estate prices slipped another 4 per cent in June. According to Calculated risk website, "Commercial real estate values are now down 41.3 per cent from the peak in late 2007." It's a bloodbath.
Bond yields on US Treasuries continue to tumble as investor pessimism grows and increasingly bleak news feeds the fears of another slump. The two-year note has been setting records nearly every day. The benchmark 10-year which peaked at 3.99 per cent in April has since descended into Bernanke's inferno. It was last seen parachuting to terra firma at 2.61 per cent. If it continues to plunge at this rate, it will be below 2 per cent by year-end. Welcome to Japan.
Try to grasp the significance of bond yields. The business media spins the news and tries to dress up the data with all kinds of happy talk. Bond yields reflect cold hard reality. Investors only plunk their money into low-yielding liquid assets when they're sure things are going to get worse. Much worse. The rumors of a "bond bubble" is all nonsense. These aren't leveraged assets; there's no risk. People accept modest returns because they're afraid to put their money anywhere else. It's a referendum on failed monetary policy.
30-year mortgage rates are pinned to the 10-year which is why rates are lower now than any time in history. Still, housing inventory continues to build. Realtors are finding that they can't giveaway homes at any price. So much for the American dream.
Policymakers at the Fed, the Treasury, the White House and the Congress now look on as the foundations of the so-called recovery crack before their very eyes. Many of their careers will undoubtedly follow the economy down the drain. As the stimulus runs out, unemployment will rise, deleveraging and debt liquidation will gain momentum, and the economy will succumb to a second vicious contraction. Digging out will not be easy.
By MIKE WHITNEY
Imagine the reaction at the White House when the Department of Labor released its weekly unemployment figures on Thursday. Jobless claims rose by 12,000 to 500,000 in the second week of August. There's been no improvement in the jobs market in 9 months and now unemployment is edging upwards again. This wasn't supposed to happen. The Obama administration had bet everything that the economy had turned the corner and would gradually get better. Many economists saw less than a 10 per cent chance that the economy would tip back into recession. After all, double dip recessions are "extremely rare". Now more people are losing their jobs and Team Obama is caught in the headlights. There is no back-up plan, no Plan B. The Democrats will face the midterms with no stimulus to create new jobs and with an economy that is steadily deteriorating. It's going to be a massacre and they know it.
Obama and his lieutenants have stopped talking about austerity measures. The plan to dismantle Social Security has been put on hold,( though the Commission headed by the appalling former Senator Alan Simpson grinds on with its mission of destruction.) No one wants to hear about belt tightening when the future is uncertain and they're worried about losing their jobs. Obama will have to shift-gears again; switch from promoting the elitist "privatize everything" agenda to his "I feel your pain" routine. He might want to dig up some archived video of B. Clinton chewing his lip and blinking back the tears.
All of the economic data is being revised downwards. The economy is in big trouble and the politicians are just starting to catch on. Stocks fell sharply on Thursday (Dow down 144 points) on news that manufacturing (Philly Fed Index) shrank in August beyond analysts expectations. Nearly every category fell including shipments and new orders. The Dow Jones is off 10 per cent since April 23, more than a 1,000 point loss in the last 4 months. Also, Moody's reported that commercial real estate prices slipped another 4 per cent in June. According to Calculated risk website, "Commercial real estate values are now down 41.3 per cent from the peak in late 2007." It's a bloodbath.
Bond yields on US Treasuries continue to tumble as investor pessimism grows and increasingly bleak news feeds the fears of another slump. The two-year note has been setting records nearly every day. The benchmark 10-year which peaked at 3.99 per cent in April has since descended into Bernanke's inferno. It was last seen parachuting to terra firma at 2.61 per cent. If it continues to plunge at this rate, it will be below 2 per cent by year-end. Welcome to Japan.
Try to grasp the significance of bond yields. The business media spins the news and tries to dress up the data with all kinds of happy talk. Bond yields reflect cold hard reality. Investors only plunk their money into low-yielding liquid assets when they're sure things are going to get worse. Much worse. The rumors of a "bond bubble" is all nonsense. These aren't leveraged assets; there's no risk. People accept modest returns because they're afraid to put their money anywhere else. It's a referendum on failed monetary policy.
30-year mortgage rates are pinned to the 10-year which is why rates are lower now than any time in history. Still, housing inventory continues to build. Realtors are finding that they can't giveaway homes at any price. So much for the American dream.
Policymakers at the Fed, the Treasury, the White House and the Congress now look on as the foundations of the so-called recovery crack before their very eyes. Many of their careers will undoubtedly follow the economy down the drain. As the stimulus runs out, unemployment will rise, deleveraging and debt liquidation will gain momentum, and the economy will succumb to a second vicious contraction. Digging out will not be easy.
A Homeowners' Rebellion
Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.
MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.
That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.
California Precedent
The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:
Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.
In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). The court concluded:
Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.
The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:
This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.
While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.
What Could This Mean for Homeowners?
Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.
An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is thisperjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.
In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:
Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.
Criminal Charges?
Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”
Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.
By Their Own Sword: MERS’ Role in the Financial Crisis
MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”
MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:
Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept....
After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible .... The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.
Axing the Bankers’ Money Tree
If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko decision:
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .
Nationalization of these giant banks might be the next logical step—a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.
The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.
With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.
Wednesday, August 18, 2010
Neptune Finally Makes First Orbit Around the Sun Since Discovery In 1846
By Geoff Gaherty | 18 August 2010
The planet Neptune will be in opposition — when the sun, Earth, and a planet fall in a straight line on Aug. 20. The planet will be exactly opposite the sun in the sky, being highest in the sky at local midnight. Usually this is also the point where the planet is closest to the Earth.
This opposition is special because Neptune will be returning close to the spot where it was discovered in 1846, marking its first complete trip around the sun since its discovery.
Coincidentally opposition in 1846 also fell on Aug. 20, although the planet wasn't actually spotted until over a month later, on Sept. 23.
This Neptune sky map shoes where to find the planet as it completes its first orbit since astronomers first discovered it.
Strange path to discovery
The discovery of Neptune has an interesting prehistory.
The planet Uranus was discovered more or less by accident in 1781 by Sir William Herschel, in the course of his search for deep sky objects. As time went by, Uranus' position wasn't quite what astronomer's predicted, and mathematical astronomers began to suspect that there was another planet out there whose gravity was influencing Uranus' motion.
In the mid-1840s an Englishman named John Couch Adams and a Frenchman named Urbain Le Verrier independently calculated where this new planet would have to be located to have the observed effect on Uranus, but both had trouble getting observational astronomers interested in looking for it.
Finally the German astronomer Johann Galle actually looked at the predicted location and discovered the tiny blue-green disk of the planet that eventually came to be known as Neptune. The date was Sept. 23, 1846. This led to a drawn out battle between French and English astronomers as to who pointed to Neptune first; in the end, a three-way tie was declared and Adams, Le Verrier, and Galle share the honor of discovering Neptune.
Ironically, Galle was not the first person to observe Neptune. That honor goes to none other than Galileo Galilei, who twice observed Neptune but mistook it for a star, on December 28, 1612, and January 27, 1613. Galileo had two strikes against him: first, the small size and poor quality of his telescopes, and secondly he happened to observe Neptune when it was stationary, as happens to all planets from time to time because of the relative motions of the planet and Earth.
For nearly a century Neptune was the planet farthest from the sun, only losing that honor when tiny Pluto was discovered by Clyde Tombaugh in 1930. Now that the International Astronomical Union has downgraded Pluto's status, Neptune is once again the farthest known planet from the sun — at least in our solar system.
Because of its great distance from the sun, 30 astronomical units out (1 AU is the distance from the sun to Earth), and its relatively small diameter (30,800 miles/49,500 km), Neptune is a dim and tiny object in amateur telescopes. While Uranus can just be glimpsed with the naked eye under perfect dark sky conditions, Neptune requires binoculars or a small telescope to be seen.
Finding Neptune now
For somewhat seasoned backyard astronomers, this Neptune map can help to locate the planet.
Around 1 a.m. this week look for the large but faint triangle of Capricornus, to the left of Sagittarius and the Milky Way. The two stars at the left end of the triangle point the way to Neptune, just a little bit short of and above the star Iota in the neighboring constellation Aquarius.
In a small telescope, Neptune will look just like a star; what gives it away is its distinctive blue-green color.
Although tiny in a telescope and dwarfed by giants Jupiter and Saturn, Neptune is still four times the diameter of the Earth. Like all the gas giant planets, it shows only an atmosphere, in this case fairly featureless. When the Voyager 2 passed by in 1986 it photographed a huge "Blue Spot" in Neptune's upper atmosphere, perhaps similar to the Great Red Spot on Jupiter. Like all the gas giants, Neptune has a system of rings, but these are far fainter than Saturn's famous rings.
Although Neptune's face appears serene, its atmosphere boasts winds which travel almost at supersonic speeds. Its 13 moons range in size from what are little more than boulders up to Triton, 1680 miles (2700 km.) in diameter.
The planet Neptune will be in opposition — when the sun, Earth, and a planet fall in a straight line on Aug. 20. The planet will be exactly opposite the sun in the sky, being highest in the sky at local midnight. Usually this is also the point where the planet is closest to the Earth.
This opposition is special because Neptune will be returning close to the spot where it was discovered in 1846, marking its first complete trip around the sun since its discovery.
Coincidentally opposition in 1846 also fell on Aug. 20, although the planet wasn't actually spotted until over a month later, on Sept. 23.
This Neptune sky map shoes where to find the planet as it completes its first orbit since astronomers first discovered it.
Strange path to discovery
The discovery of Neptune has an interesting prehistory.
The planet Uranus was discovered more or less by accident in 1781 by Sir William Herschel, in the course of his search for deep sky objects. As time went by, Uranus' position wasn't quite what astronomer's predicted, and mathematical astronomers began to suspect that there was another planet out there whose gravity was influencing Uranus' motion.
In the mid-1840s an Englishman named John Couch Adams and a Frenchman named Urbain Le Verrier independently calculated where this new planet would have to be located to have the observed effect on Uranus, but both had trouble getting observational astronomers interested in looking for it.
Finally the German astronomer Johann Galle actually looked at the predicted location and discovered the tiny blue-green disk of the planet that eventually came to be known as Neptune. The date was Sept. 23, 1846. This led to a drawn out battle between French and English astronomers as to who pointed to Neptune first; in the end, a three-way tie was declared and Adams, Le Verrier, and Galle share the honor of discovering Neptune.
Ironically, Galle was not the first person to observe Neptune. That honor goes to none other than Galileo Galilei, who twice observed Neptune but mistook it for a star, on December 28, 1612, and January 27, 1613. Galileo had two strikes against him: first, the small size and poor quality of his telescopes, and secondly he happened to observe Neptune when it was stationary, as happens to all planets from time to time because of the relative motions of the planet and Earth.
For nearly a century Neptune was the planet farthest from the sun, only losing that honor when tiny Pluto was discovered by Clyde Tombaugh in 1930. Now that the International Astronomical Union has downgraded Pluto's status, Neptune is once again the farthest known planet from the sun — at least in our solar system.
Because of its great distance from the sun, 30 astronomical units out (1 AU is the distance from the sun to Earth), and its relatively small diameter (30,800 miles/49,500 km), Neptune is a dim and tiny object in amateur telescopes. While Uranus can just be glimpsed with the naked eye under perfect dark sky conditions, Neptune requires binoculars or a small telescope to be seen.
Finding Neptune now
For somewhat seasoned backyard astronomers, this Neptune map can help to locate the planet.
Around 1 a.m. this week look for the large but faint triangle of Capricornus, to the left of Sagittarius and the Milky Way. The two stars at the left end of the triangle point the way to Neptune, just a little bit short of and above the star Iota in the neighboring constellation Aquarius.
In a small telescope, Neptune will look just like a star; what gives it away is its distinctive blue-green color.
Although tiny in a telescope and dwarfed by giants Jupiter and Saturn, Neptune is still four times the diameter of the Earth. Like all the gas giant planets, it shows only an atmosphere, in this case fairly featureless. When the Voyager 2 passed by in 1986 it photographed a huge "Blue Spot" in Neptune's upper atmosphere, perhaps similar to the Great Red Spot on Jupiter. Like all the gas giants, Neptune has a system of rings, but these are far fainter than Saturn's famous rings.
Although Neptune's face appears serene, its atmosphere boasts winds which travel almost at supersonic speeds. Its 13 moons range in size from what are little more than boulders up to Triton, 1680 miles (2700 km.) in diameter.
Democrats Go All Republican on Tax Cuts
Meandering Into the Midterm Elections
By ANTHONY DiMAGGIO
President Obama supports letting many of the Bush tax cuts expire. He’s defending the passage of a new round of tax cuts, promised to benefit America’s middle and working classes. These cuts, however, would continue to benefit the affluent, or those individuals earning more than $170,000 a year. CNN Money reports that the tax cuts promoted by Obama for the middle class would also reduce taxes for those making between $171,850 and $195,550. This group would now fall into a “sweet spot” that would reduce their payments from the 33 percent tax bracket down to the 28 percent tax bracket. In contrast, those individuals who make more than $200,000 would see their payments increase from the 36 percent bracket to the 39.6 percent bracket.
The increase in taxes for those making more than $200,000 is misleading, however. While these individuals would legally be required to pay more in terms of their tax bracket, they would nonetheless qualify for other tax reductions under Obama’s plan.
The details are provided by the Center on Budget and Policy Priorities (CBPP). The organization reports that under Obama’s plan, “people making more than $1 million will receive more than five times the tax cut benefit, in dollar terms, as a middle class family making $50,000 to $75,000. The wealthy would qualify for cuts under the proposed extension of the income tax rate reductions and married filers’ reductions. In relation to the income tax, the CBPP estimates that those in the $200,000 to $500,000 income category would receive, on average, an 83 percent greater tax cut than those immediately below them earning more than $100,000 but less than $200,000. Those earning between $500,000 and $1 million would receive, on average, a 13 percent greater tax cut than those immediately below them making between $200,000 and $500,000. Finally, individuals earning more than $1 million would benefit from a 15 percent greater cut than those immediately below them making between $500,000 and $1 million. These numbers may sound confusing, but the major theme is really quite simple: as an individual’s (or a household’s) earnings increase into the six figures and beyond, they will be entitled to increasingly larger tax cuts under the Obama plan when compared to middle, working class, and poor Americans.
The Obama tax cuts, while clearly benefitting the middle class in many ways, will also represent a major pay day for America’s upper class. This apparently isn’t enough for Republicans in Congress, however. They complain that the rich should benefit from all the tax cuts granted under Bush, not merely some of them. They feel that any tax increases (relatively to the cuts the rich received in the last few years) are illegitimate. Nowhere is this position more clearly declared than by House of Representatives Republican Minority Leader John Boehner, who defends the Bush era tax cuts, which went overwhelmingly to the wealthiest one to five percent of Americans.
Boehner complains that “you can’t raise taxes in the middle of a weak economy without risking the double-dip in this recession…You cannot get the economy going again by raising taxes on those people who we expect to create jobs in America and to get the economy going again. If we want to solve the budget problem, we’ve got to have a healthy economy and we have to get our arms around the runaway spending that’s going on in Washington, D.C.”
The supply side notion (first advocated by the Reagan administration) claims that economic growth only comes from massive tax cuts directed toward the rich. This theory, although promising prosperity for America’s middle class and poor, has done little to deliver benefits to the masses. A careful study from the Economic Policy Institute finds that “the economy has little to show for the $860 billion in tax cuts” passed under Bush from 2001 to 2005. In this EPI report, Lee Price concludes that “by virtually every measure the economy has performed worse in this business cycle than was typical in past ones, including that of the early 1990s, which saw major tax increases.” The EPI compares the 2001 to 2005 business cycle to other cycles in history (a cycle being defined in economics as a period beginning with a contraction in national GDP, a trough period when contraction ends and expansion begins, a sustained expansion period, and a peak of growth). EPI finds that, in spite of the 2001 and 2003 tax cuts, “almost every broad measure of economic activity – GDP, jobs, personal income, and business investment, among others – has fared worse over the last four and a half years (again, 2001 to 2005) than in past cycles.”
The EPI’s findings raise serious questions about the effectiveness of tax cuts aimed at the rich in bringing about economic recovery. The worthlessness of tax cuts for the rich in assuring middle class prosperity has been reinforced over the last few years as well. The Bush tax cuts are set to expire this year. Since the 2008 economic collapse and ensuing recession, the Bush tax cuts (in addition to the massive infusion of TARP funds for American “too big to fail” banks) have not been sufficient to push the U.S. into a serious economic recovery at a time when those who still have jobs are working harder and harder for declining wages. It was not until this year that the recession formally ended (a recession being defined as two consecutive quarters of negative growth), and economic growth has been rather anemic, at just over one percent for the second quarter of 2010.
One would think that all these negative signs would be enough to convince Republicans (and conservative Democrats) not to renew tax cuts for the wealthy. This, however, has not been the case. The Republican Party – aided by reactionary pundits in the media – continues to push tax cuts for the rich. They do this, not because these cuts promote strong recovery and prosperity for middle America, but because they subsidize Republicans’ primary constituency – the rich. Democrats have long been reliant on, and supportive of corporate power as well, so their relatively weaker support for tax cuts for the rich is not surprising either.
Rather than asking what the Democrats and Republicans should be doing to reduce the size of government (as both parties’ leaders are doing), we should be asking how the government should be expanding its efforts to help the needy during times of economic desperation. The Democratic expansion of Medicaid under the 2010 health care reform bill will certainly help America’s poor in terms of increasing the size of the social welfare state, but a far larger (and much needed) expansion in the form of establishing a universal health care, Medicare-for-all system, would do a lot more in reducing the suffering of vulnerable Americans. What also would help the country (in addition to the recent extensions of unemployment and state school funds passed by Democrats in Congress) is another stimulus, which should be passed prior to the 2010 midterm elections.
The Democratic Party has gone Republican in at two ways when it comes to the tax cuts: 1. by pushing for a market solution over expanding government social welfare services; and 2. by continuing the tax cuts to the rich, even if in a reduced form from the far larger, more extreme amount preferred by conservatives. The choice to promote tax cuts over increased social spending (on food subsidies for the poor and on a new stimulus) signals a privileging of the well off over the truly needy. Instead of helping preserve the jobs of state educators and other public employees through massive stimulus spending, the Democrats have instead chosen to grant tax cuts to those who already have jobs. Why this group should be prioritized over the unemployed is anyone’s guess. The Democratic approach signifies the party’s increasing embrace of the Republican themes that “the government is the problem,” and that the best way to promote economic recovery is to reduce government revenues, and “give the people more of their own money,” rather than use that money to help those who are the most desperate.
There are penalties to be paid for going Republican at a time when Republicans are just as unpopular as the Democrats in the public mind. The Democratic Party’s emphasis on unnecessary tax cuts, and its timidity in pushing for an expansion of government stimulus has left us in the desperate economic position we are in today. The party is willing to promote at least limited welfare spending, passing $34 billion in unemployment extension benefits, and an additional $26 billion to help states fill their deficits and stave off cuts in education and Medicare. These most recent education and Medicaid packages, however, came along with $10 billion worth of cuts in food aid to the poor. The recent Medicaid, school, and unemployment bills also total just $50 billion for the year (after adjusting for the food aid cuts), and this represents a small fraction of the hole in state deficits that needs to be filled.
The state deficits for 2010 were estimated to total $192 billion, according to the CBPP. State deficits for 2011 are estimated at approximately $120 billion. Allowing all the Bush era tax cuts to expire would produce an additional $217 billion in revenues for the federal government throughout 2010 and 2011, according to a recent study by the Brookings Institute and the Urban Institute. This amount is more than enough to plug in the $120 billion hole in the 2011 state budget deficits. It’s unlikely that the Democratic Party will take this route, however, in light of its increasing support for Republican mantras about the holiness of tax cuts as a means of economic stimulation.
Democrats could single handedly end the state budget crises that will (sadly) continue to grip the country over the next year. Instead, they will continue to meander throughout the rest of 2010, refusing to push any sort of stimulus on par with the $787 billion stimulus package passed in 2009. Democratic refusals to pass a second stimulus will all but guarantee continued economic stagnation – and possibly decline. The party’s incompetence and preference for the rich will likely come back to haunt it in the 2010 election, in which the American public will angrily (and rightly) throw out many Democrats due to their mishandling of the economic crisis.
By ANTHONY DiMAGGIO
President Obama supports letting many of the Bush tax cuts expire. He’s defending the passage of a new round of tax cuts, promised to benefit America’s middle and working classes. These cuts, however, would continue to benefit the affluent, or those individuals earning more than $170,000 a year. CNN Money reports that the tax cuts promoted by Obama for the middle class would also reduce taxes for those making between $171,850 and $195,550. This group would now fall into a “sweet spot” that would reduce their payments from the 33 percent tax bracket down to the 28 percent tax bracket. In contrast, those individuals who make more than $200,000 would see their payments increase from the 36 percent bracket to the 39.6 percent bracket.
The increase in taxes for those making more than $200,000 is misleading, however. While these individuals would legally be required to pay more in terms of their tax bracket, they would nonetheless qualify for other tax reductions under Obama’s plan.
The details are provided by the Center on Budget and Policy Priorities (CBPP). The organization reports that under Obama’s plan, “people making more than $1 million will receive more than five times the tax cut benefit, in dollar terms, as a middle class family making $50,000 to $75,000. The wealthy would qualify for cuts under the proposed extension of the income tax rate reductions and married filers’ reductions. In relation to the income tax, the CBPP estimates that those in the $200,000 to $500,000 income category would receive, on average, an 83 percent greater tax cut than those immediately below them earning more than $100,000 but less than $200,000. Those earning between $500,000 and $1 million would receive, on average, a 13 percent greater tax cut than those immediately below them making between $200,000 and $500,000. Finally, individuals earning more than $1 million would benefit from a 15 percent greater cut than those immediately below them making between $500,000 and $1 million. These numbers may sound confusing, but the major theme is really quite simple: as an individual’s (or a household’s) earnings increase into the six figures and beyond, they will be entitled to increasingly larger tax cuts under the Obama plan when compared to middle, working class, and poor Americans.
The Obama tax cuts, while clearly benefitting the middle class in many ways, will also represent a major pay day for America’s upper class. This apparently isn’t enough for Republicans in Congress, however. They complain that the rich should benefit from all the tax cuts granted under Bush, not merely some of them. They feel that any tax increases (relatively to the cuts the rich received in the last few years) are illegitimate. Nowhere is this position more clearly declared than by House of Representatives Republican Minority Leader John Boehner, who defends the Bush era tax cuts, which went overwhelmingly to the wealthiest one to five percent of Americans.
Boehner complains that “you can’t raise taxes in the middle of a weak economy without risking the double-dip in this recession…You cannot get the economy going again by raising taxes on those people who we expect to create jobs in America and to get the economy going again. If we want to solve the budget problem, we’ve got to have a healthy economy and we have to get our arms around the runaway spending that’s going on in Washington, D.C.”
The supply side notion (first advocated by the Reagan administration) claims that economic growth only comes from massive tax cuts directed toward the rich. This theory, although promising prosperity for America’s middle class and poor, has done little to deliver benefits to the masses. A careful study from the Economic Policy Institute finds that “the economy has little to show for the $860 billion in tax cuts” passed under Bush from 2001 to 2005. In this EPI report, Lee Price concludes that “by virtually every measure the economy has performed worse in this business cycle than was typical in past ones, including that of the early 1990s, which saw major tax increases.” The EPI compares the 2001 to 2005 business cycle to other cycles in history (a cycle being defined in economics as a period beginning with a contraction in national GDP, a trough period when contraction ends and expansion begins, a sustained expansion period, and a peak of growth). EPI finds that, in spite of the 2001 and 2003 tax cuts, “almost every broad measure of economic activity – GDP, jobs, personal income, and business investment, among others – has fared worse over the last four and a half years (again, 2001 to 2005) than in past cycles.”
The EPI’s findings raise serious questions about the effectiveness of tax cuts aimed at the rich in bringing about economic recovery. The worthlessness of tax cuts for the rich in assuring middle class prosperity has been reinforced over the last few years as well. The Bush tax cuts are set to expire this year. Since the 2008 economic collapse and ensuing recession, the Bush tax cuts (in addition to the massive infusion of TARP funds for American “too big to fail” banks) have not been sufficient to push the U.S. into a serious economic recovery at a time when those who still have jobs are working harder and harder for declining wages. It was not until this year that the recession formally ended (a recession being defined as two consecutive quarters of negative growth), and economic growth has been rather anemic, at just over one percent for the second quarter of 2010.
One would think that all these negative signs would be enough to convince Republicans (and conservative Democrats) not to renew tax cuts for the wealthy. This, however, has not been the case. The Republican Party – aided by reactionary pundits in the media – continues to push tax cuts for the rich. They do this, not because these cuts promote strong recovery and prosperity for middle America, but because they subsidize Republicans’ primary constituency – the rich. Democrats have long been reliant on, and supportive of corporate power as well, so their relatively weaker support for tax cuts for the rich is not surprising either.
Rather than asking what the Democrats and Republicans should be doing to reduce the size of government (as both parties’ leaders are doing), we should be asking how the government should be expanding its efforts to help the needy during times of economic desperation. The Democratic expansion of Medicaid under the 2010 health care reform bill will certainly help America’s poor in terms of increasing the size of the social welfare state, but a far larger (and much needed) expansion in the form of establishing a universal health care, Medicare-for-all system, would do a lot more in reducing the suffering of vulnerable Americans. What also would help the country (in addition to the recent extensions of unemployment and state school funds passed by Democrats in Congress) is another stimulus, which should be passed prior to the 2010 midterm elections.
The Democratic Party has gone Republican in at two ways when it comes to the tax cuts: 1. by pushing for a market solution over expanding government social welfare services; and 2. by continuing the tax cuts to the rich, even if in a reduced form from the far larger, more extreme amount preferred by conservatives. The choice to promote tax cuts over increased social spending (on food subsidies for the poor and on a new stimulus) signals a privileging of the well off over the truly needy. Instead of helping preserve the jobs of state educators and other public employees through massive stimulus spending, the Democrats have instead chosen to grant tax cuts to those who already have jobs. Why this group should be prioritized over the unemployed is anyone’s guess. The Democratic approach signifies the party’s increasing embrace of the Republican themes that “the government is the problem,” and that the best way to promote economic recovery is to reduce government revenues, and “give the people more of their own money,” rather than use that money to help those who are the most desperate.
There are penalties to be paid for going Republican at a time when Republicans are just as unpopular as the Democrats in the public mind. The Democratic Party’s emphasis on unnecessary tax cuts, and its timidity in pushing for an expansion of government stimulus has left us in the desperate economic position we are in today. The party is willing to promote at least limited welfare spending, passing $34 billion in unemployment extension benefits, and an additional $26 billion to help states fill their deficits and stave off cuts in education and Medicare. These most recent education and Medicaid packages, however, came along with $10 billion worth of cuts in food aid to the poor. The recent Medicaid, school, and unemployment bills also total just $50 billion for the year (after adjusting for the food aid cuts), and this represents a small fraction of the hole in state deficits that needs to be filled.
The state deficits for 2010 were estimated to total $192 billion, according to the CBPP. State deficits for 2011 are estimated at approximately $120 billion. Allowing all the Bush era tax cuts to expire would produce an additional $217 billion in revenues for the federal government throughout 2010 and 2011, according to a recent study by the Brookings Institute and the Urban Institute. This amount is more than enough to plug in the $120 billion hole in the 2011 state budget deficits. It’s unlikely that the Democratic Party will take this route, however, in light of its increasing support for Republican mantras about the holiness of tax cuts as a means of economic stimulation.
Democrats could single handedly end the state budget crises that will (sadly) continue to grip the country over the next year. Instead, they will continue to meander throughout the rest of 2010, refusing to push any sort of stimulus on par with the $787 billion stimulus package passed in 2009. Democratic refusals to pass a second stimulus will all but guarantee continued economic stagnation – and possibly decline. The party’s incompetence and preference for the rich will likely come back to haunt it in the 2010 election, in which the American public will angrily (and rightly) throw out many Democrats due to their mishandling of the economic crisis.
Deceptive Economic Statistics
While Economists Lied, the Economy Died
By PAUL CRAIG ROBERTS
On August 17, Bloomberg reported a US government release that industrial production rose twice as much as forecast, climbing 1 percent. Bloomberg interpreted this to mean that “increased business investment is propelling the gains in manufacturing, which accounts for 11 percent of the world’s largest economy.”
The stock market rose.
Let’s look at this through the lens of statistician John Williams of shadowstats.com.
Williams reports that “the primary driver of a 1.0% monthly gain in seasonally-adjusted July industrial production” was “warped seasonal factors” caused by “the irregular patterns in U.S. auto production in the last two years.” Industrial production “shrank by 1.0% before seasonal adjustments.”
If the government and Bloomberg had announced that industrial production fell by 1.0% in July, would the stock market have risen 104 points on August 17?
Notice that Bloomberg reports that manufacturing accounts for 11 percent of the US economy. I remember when manufacturing accounted for 18% of the US economy. The decline of 39% is due to jobs offshoring.
Think about that. Wall Street and shareholders and executives of transnational corporations have made billions by moving 39% of US manufacturing offshore to boost the GDP and employment of foreign countries, such as China, while impoverishing their former American work force. Congress and the economics profession have cheered this on as “the New Economy.”
Bought-and-paid-for-economists told us that “the new economy” would make us all rich, and so did the financial press. We were well rid, they claimed, of the “old” industries and manufactures, the departure of which destroyed the tax base of so many American cities and states and the livelihood of millions of Americans.
The bought-and-paid-for-economists got all the media forums for a decade. While they lied, the US economy died.
Now, back to statistical deception. On August 17 the census Bureau reported a small gain in July 2010 residential construction housing starts. More hope orchestrated. In fact, the “gain,” as John Williams reports, was due to a large downward revision” in June’s reporting. The reported July “gain” would “have been a contraction” without the downward revision in June’s “gain.”
So, the overestimate of June housing not only made June look good, but also the downward correction of the June number makes July look good, because starts rose above the corrected June number. The same manipulation is likely to happen again next month.
If the government will lie to you about Iraqi weapons of mass production, Iranian nukes, and 9/11, why won’t they lie to you about the economy?
We now have an all-time high of Americans on food stamps, 40.8 million people, about 14% of the population. By next year the government estimates that food stamp dependency will rise to 43 million Americans. So last week Congress cut food stamp benefits. Let them eat cake.
Wherever one looks--food stamps, home foreclosures, bankrupted states, mounting joblessness, the message to long-suffering Americans from “their government” is the same: go eat cake, while we fight wars for Israel that enrich the military/security complex and while we bail out banksters whose annual incomes are in the tens of millions of dollars and up.
It is impossible to get any truth out of the US government about anything. If private companies used US government accounting, the executives would be prosecuted, convicted, and incarcerated.
“Our government” is committed to fighting wars to enrich the military/security complex and Israel’s territorial expansion at the expense of cuts in Social Security and Medicare.
All most members of Congress, especially Republicans, want to do is to pay for the pointless wars by cutting Social Security and Medicare.
When they worry about the deficit, it is usually Social Security and Medicare--so-called “entitlements” that are in the crosshairs.
You don’t have to be smart to see that Wall Street’s and the government’s response to the amazing US budget deficit is not to stop the senseless wars and bailouts of mega-millionaires, but to cut “entitlements.”
I will end this column on unemployment. “Our government” tells us that the unemployment rate is just under 10 percent, a figure that would have wrecked any post-Great Depression administration. But, again, “our government” is lying. The reported unemployment rate is just below 10% because the US government no longer counts Americans who have been unemployed for longer than one year. Once the unemployed hit one year and one day, they are dropped from the unemployment roles and no longer counted as unemployed.
Compare this fact with the number you read from the financial press. Right now, if measured according to the methodology of 1980, the US unemployment rate is about 22%. Thus, the reported rate of unemployment hides more than half of the unemployed.
And Secretary Treasury Tim Geithner welcomed us in the August 2 NewYork Times to “the recovery.”
Utterly amazing.
By PAUL CRAIG ROBERTS
On August 17, Bloomberg reported a US government release that industrial production rose twice as much as forecast, climbing 1 percent. Bloomberg interpreted this to mean that “increased business investment is propelling the gains in manufacturing, which accounts for 11 percent of the world’s largest economy.”
The stock market rose.
Let’s look at this through the lens of statistician John Williams of shadowstats.com.
Williams reports that “the primary driver of a 1.0% monthly gain in seasonally-adjusted July industrial production” was “warped seasonal factors” caused by “the irregular patterns in U.S. auto production in the last two years.” Industrial production “shrank by 1.0% before seasonal adjustments.”
If the government and Bloomberg had announced that industrial production fell by 1.0% in July, would the stock market have risen 104 points on August 17?
Notice that Bloomberg reports that manufacturing accounts for 11 percent of the US economy. I remember when manufacturing accounted for 18% of the US economy. The decline of 39% is due to jobs offshoring.
Think about that. Wall Street and shareholders and executives of transnational corporations have made billions by moving 39% of US manufacturing offshore to boost the GDP and employment of foreign countries, such as China, while impoverishing their former American work force. Congress and the economics profession have cheered this on as “the New Economy.”
Bought-and-paid-for-economists told us that “the new economy” would make us all rich, and so did the financial press. We were well rid, they claimed, of the “old” industries and manufactures, the departure of which destroyed the tax base of so many American cities and states and the livelihood of millions of Americans.
The bought-and-paid-for-economists got all the media forums for a decade. While they lied, the US economy died.
Now, back to statistical deception. On August 17 the census Bureau reported a small gain in July 2010 residential construction housing starts. More hope orchestrated. In fact, the “gain,” as John Williams reports, was due to a large downward revision” in June’s reporting. The reported July “gain” would “have been a contraction” without the downward revision in June’s “gain.”
So, the overestimate of June housing not only made June look good, but also the downward correction of the June number makes July look good, because starts rose above the corrected June number. The same manipulation is likely to happen again next month.
If the government will lie to you about Iraqi weapons of mass production, Iranian nukes, and 9/11, why won’t they lie to you about the economy?
We now have an all-time high of Americans on food stamps, 40.8 million people, about 14% of the population. By next year the government estimates that food stamp dependency will rise to 43 million Americans. So last week Congress cut food stamp benefits. Let them eat cake.
Wherever one looks--food stamps, home foreclosures, bankrupted states, mounting joblessness, the message to long-suffering Americans from “their government” is the same: go eat cake, while we fight wars for Israel that enrich the military/security complex and while we bail out banksters whose annual incomes are in the tens of millions of dollars and up.
It is impossible to get any truth out of the US government about anything. If private companies used US government accounting, the executives would be prosecuted, convicted, and incarcerated.
“Our government” is committed to fighting wars to enrich the military/security complex and Israel’s territorial expansion at the expense of cuts in Social Security and Medicare.
All most members of Congress, especially Republicans, want to do is to pay for the pointless wars by cutting Social Security and Medicare.
When they worry about the deficit, it is usually Social Security and Medicare--so-called “entitlements” that are in the crosshairs.
You don’t have to be smart to see that Wall Street’s and the government’s response to the amazing US budget deficit is not to stop the senseless wars and bailouts of mega-millionaires, but to cut “entitlements.”
I will end this column on unemployment. “Our government” tells us that the unemployment rate is just under 10 percent, a figure that would have wrecked any post-Great Depression administration. But, again, “our government” is lying. The reported unemployment rate is just below 10% because the US government no longer counts Americans who have been unemployed for longer than one year. Once the unemployed hit one year and one day, they are dropped from the unemployment roles and no longer counted as unemployed.
Compare this fact with the number you read from the financial press. Right now, if measured according to the methodology of 1980, the US unemployment rate is about 22%. Thus, the reported rate of unemployment hides more than half of the unemployed.
And Secretary Treasury Tim Geithner welcomed us in the August 2 NewYork Times to “the recovery.”
Utterly amazing.
Your fears confirmed: "Up to" broadband speeds are bogus
| Ars Technica
Broadband providers in the US have long hawked theirwares in "up to" terms. You know—"up to" 10Mbps, where "up to" sits like a tiny pebble beside the huge font size of the raw number.
In reality, no one gets these speeds. That's not news to the techno-literate, of course, but a new Federal Communications Commission report (PDF) shines a probing flashlight on the issue and makes a sharp conclusion: broadband users get, on average, a mere 50 percent of that "up to" speed they had hoped to achieve.
After crunching the data, FCC wonks have concluded that ISPs advertised an average (mean) "up to" download speed of 6.7Mbps in 2009. That's not what broadband users got, though.
"However, FCC analysis shows that the median actual speed consumers experienced in the first half of 2009 was roughly 3 Mbps, while the average (mean) actual speed was approximately 4 Mbps," says the report. "Therefore actual download speeds experienced by US consumers appear to lag advertised speeds by roughly 50 percent."
The agency used metrics data from Akamai and comScore to make this determination, though a more accurate direct measurement is currently taking place under FCC auspices. The more accurate measurement will put small boxes in people's homes for weeks at a time, recording actual line speeds in thousands of US homes at all times of the day and night. But, until that data set is complete, Internet traffic data from Akamai and comScore will have to suffice.
When you look at actual speeds, most Americans have fairly slow service
Data source: FCC
The gap between advertisement and reality isn't a function of technology—it applied to all kinds of broadband connections, from cable to DSL to fiber. The less-than-ideal speeds aren't necessarily the "fault" of the ISP, either; crufty computers, poky routers, misconfigured WiFi, transient line noise, and Internet congestion all play a role.
Whatever the cause, though, the FCC has concluded that advertising the "up to" speed is so inaccurate (and so confusing to consumers) that something better should be tried, sort of a "nutrition label" for Internet access. The National Broadband Plan suggested something along these lines and the new FCC report supports the idea, recommending that a standard truth-in-labeling form should be drafted by the FCC, "the National Institute of Standards and Technology, consumer groups, industry and other technical experts."
The FCC has proposed a few example labels of its own:
Example broadband labels (source: FCC)
The New America Foundation last year proposed a standardized "truth-in-labeling" box with far more detail, and it used the new FCC report as a way to pitch its idea once more.
New America Foundation's prototype Schumer Box for broadband customers
For now, broadband buyers should just expect their connections to offer about half the promised maximum speed. If that gets you down, just remember: you aren't in this alone. UK broadband users also see speeds only half as fast as advertised.
Broadband providers in the US have long hawked theirwares in "up to" terms. You know—"up to" 10Mbps, where "up to" sits like a tiny pebble beside the huge font size of the raw number.
In reality, no one gets these speeds. That's not news to the techno-literate, of course, but a new Federal Communications Commission report (PDF) shines a probing flashlight on the issue and makes a sharp conclusion: broadband users get, on average, a mere 50 percent of that "up to" speed they had hoped to achieve.
After crunching the data, FCC wonks have concluded that ISPs advertised an average (mean) "up to" download speed of 6.7Mbps in 2009. That's not what broadband users got, though.
"However, FCC analysis shows that the median actual speed consumers experienced in the first half of 2009 was roughly 3 Mbps, while the average (mean) actual speed was approximately 4 Mbps," says the report. "Therefore actual download speeds experienced by US consumers appear to lag advertised speeds by roughly 50 percent."
The agency used metrics data from Akamai and comScore to make this determination, though a more accurate direct measurement is currently taking place under FCC auspices. The more accurate measurement will put small boxes in people's homes for weeks at a time, recording actual line speeds in thousands of US homes at all times of the day and night. But, until that data set is complete, Internet traffic data from Akamai and comScore will have to suffice.
When you look at actual speeds, most Americans have fairly slow service
Data source: FCC
The gap between advertisement and reality isn't a function of technology—it applied to all kinds of broadband connections, from cable to DSL to fiber. The less-than-ideal speeds aren't necessarily the "fault" of the ISP, either; crufty computers, poky routers, misconfigured WiFi, transient line noise, and Internet congestion all play a role.
Whatever the cause, though, the FCC has concluded that advertising the "up to" speed is so inaccurate (and so confusing to consumers) that something better should be tried, sort of a "nutrition label" for Internet access. The National Broadband Plan suggested something along these lines and the new FCC report supports the idea, recommending that a standard truth-in-labeling form should be drafted by the FCC, "the National Institute of Standards and Technology, consumer groups, industry and other technical experts."
The FCC has proposed a few example labels of its own:
Example broadband labels (source: FCC)
The New America Foundation last year proposed a standardized "truth-in-labeling" box with far more detail, and it used the new FCC report as a way to pitch its idea once more.
New America Foundation's prototype Schumer Box for broadband customers
For now, broadband buyers should just expect their connections to offer about half the promised maximum speed. If that gets you down, just remember: you aren't in this alone. UK broadband users also see speeds only half as fast as advertised.
Guaranteeing the American Dream with Expanded Social Security
New Study Identifies Revenues for Doubling of Social Security Payout
by Stephen Hill | Wednesday, August 18, 2010 by CommonDreams.org
For millions of Americans, the dream of a secure retirement has been threatened by the Great Recession. Since WWII, retirement has been conceived as a "three-legged stool," with the three legs being Social Security, pensions, and personal savings centered around homeownership.
Instead of cutting back Social Security, what we need to do is expand it by doubling the individual payout.
But today most private sector employers have quit providing pensions, and state and local government’s public pensions are drastically underfunded. In addition, a collapsed housing and stock market, combined with increased inequality even before the Great Recession, have drastically reduced Americans’ personal savings.
In short, the "retirement stool" no longer is stable and secure, and suddenly Social Security, which always has been viewed as a supplement to private savings, is the only leg left for hundreds of millions of Americans. Studies show that people in the bottom two income quartiles depend on Social Security for 84 percent of their retirement income, and even the second richest quartile depends on Social Security for 55 percent of its retirement income. Only the richest 25% of Americans don't rely on Social Security.
Despite Social Security's new role as a de facto national retirement plan, many budget deficit hawks are calling for cuts to it to decrease America's indebtedness. But that would only make things worse for retiring Americans. The real problem with Social Security is that it is not robust enough to play this role as retirement security of last resort, though not for the reasons most critics say. Contrary to gloomy predictions about its future collapse, the program is on solid footing, with the Congressional Budget Office projecting that Social Security can pay all scheduled benefits out of its own tax revenue stream for the next 40 years.
The bigger problem is that its payout is so meager. Currently it replaces only about 33 to 40 percent of a worker’s average wage from the year prior to retirement. That is simply not enough money to live on when it is your primary -- perhaps your only -- source of retirement income.
Instead of cutting back Social Security, what we need to do is expand it by doubling the individual payout. That would cost about $650 billion annually for the 51 million Americans who receive benefits. This expanded version -- call it Social Security Plus -- could be paid for with revenues identified in a new study (pdf) published by the New America Foundation. Here’s how.
First, lift Social Security's payroll cap that disproportionately favors the wealthy. Currently Social Security only taxes wages up to $106,800 a year, and any income earned above that is not taxed. The net result is that poor, middle class, and even moderately upper middle class Americans are taxed 12.4 percent (split between employee and employer) on 100 percent of their income, but the wealthiest Americans pay a much lower percentage. A lawyer making $500,000 a year effectively pays only 2.5 percent, and millionaire bankers pay a paltry 1.2 percent.
Removing the income cap and making all income levels pay the same percentage -- which is how Medicare works -- would be a popular reform. Polls show most Americans think that if they pay Social Security tax on their full salary, others should too. Taxing all income brackets equally would raise about $377 billion, which is nearly sixty percent of the revenue needed to double the payout.
Second, with all Americans receiving Social Security Plus, employers would be freed from providing retirement for their employees. So they no longer would need to receive the substantial federal deductions they currently accrue for providing employees’ retirement plans. These deductions total an estimated $126 billion annually.
Third, we could reduce or eliminate other unfair deductions in the tax code that allow higher income people to reap generous deductions that low and moderate income Americans can’t enjoy. These include deductions for private retirement savings, homeownership, health care and education. For example, individuals who have enough income to divert for savings or investment are allowed considerable tax deductions for their 401(k)s, IRAs and pensions. Similarly the homeownership deduction for mortgage interest only benefits people with sufficient income to buy a home. But the poor and working class rarely can take advantage of these since they don’t make enough to itemize deductions. Consequently, the majority of these benefits go to the top 20 percent of income earners; in 2010 the mortgage interest deduction alone will amount to about $108 billion.
These three revenue streams -- lifting the payroll cap, eliminating the employer tax deduction for providing retirement, and capping or eliminating various wealth deductions -- would raise 100 percent of the revenue needed for doubling the payout of Social Security Plus. It could be implemented in stages, targeting first those who are most in need.
An expansion of Social Security -- one of the most successful, stable and popular programs in U.S. history currently celebrating its 75th year -- not only would be good for retirees but also for the macro-economy. It would keep money in retirees’ pockets and stimulate consumer demand; act as an “automatic stabilizer” during economic downturns; and make retiree benefits portable when changing from one job to another. It also would help American businesses trying to compete with foreign companies that don’t provide pensions to their employees, since those countries already have generous national retirement plans. And it would be broadly fair, since even those higher income Americans who are losing their tax deductions would see part of it returned to them in the form of a greater Social Security payout.
In short, Social Security Plus would provide a stable, secure retirement for every American and contribute greatly toward a solid foundation from which to build a strong and vibrant 21st century economy.
by Stephen Hill | Wednesday, August 18, 2010 by CommonDreams.org
For millions of Americans, the dream of a secure retirement has been threatened by the Great Recession. Since WWII, retirement has been conceived as a "three-legged stool," with the three legs being Social Security, pensions, and personal savings centered around homeownership.
Instead of cutting back Social Security, what we need to do is expand it by doubling the individual payout.
But today most private sector employers have quit providing pensions, and state and local government’s public pensions are drastically underfunded. In addition, a collapsed housing and stock market, combined with increased inequality even before the Great Recession, have drastically reduced Americans’ personal savings.
In short, the "retirement stool" no longer is stable and secure, and suddenly Social Security, which always has been viewed as a supplement to private savings, is the only leg left for hundreds of millions of Americans. Studies show that people in the bottom two income quartiles depend on Social Security for 84 percent of their retirement income, and even the second richest quartile depends on Social Security for 55 percent of its retirement income. Only the richest 25% of Americans don't rely on Social Security.
Despite Social Security's new role as a de facto national retirement plan, many budget deficit hawks are calling for cuts to it to decrease America's indebtedness. But that would only make things worse for retiring Americans. The real problem with Social Security is that it is not robust enough to play this role as retirement security of last resort, though not for the reasons most critics say. Contrary to gloomy predictions about its future collapse, the program is on solid footing, with the Congressional Budget Office projecting that Social Security can pay all scheduled benefits out of its own tax revenue stream for the next 40 years.
The bigger problem is that its payout is so meager. Currently it replaces only about 33 to 40 percent of a worker’s average wage from the year prior to retirement. That is simply not enough money to live on when it is your primary -- perhaps your only -- source of retirement income.
Instead of cutting back Social Security, what we need to do is expand it by doubling the individual payout. That would cost about $650 billion annually for the 51 million Americans who receive benefits. This expanded version -- call it Social Security Plus -- could be paid for with revenues identified in a new study (pdf) published by the New America Foundation. Here’s how.
First, lift Social Security's payroll cap that disproportionately favors the wealthy. Currently Social Security only taxes wages up to $106,800 a year, and any income earned above that is not taxed. The net result is that poor, middle class, and even moderately upper middle class Americans are taxed 12.4 percent (split between employee and employer) on 100 percent of their income, but the wealthiest Americans pay a much lower percentage. A lawyer making $500,000 a year effectively pays only 2.5 percent, and millionaire bankers pay a paltry 1.2 percent.
Removing the income cap and making all income levels pay the same percentage -- which is how Medicare works -- would be a popular reform. Polls show most Americans think that if they pay Social Security tax on their full salary, others should too. Taxing all income brackets equally would raise about $377 billion, which is nearly sixty percent of the revenue needed to double the payout.
Second, with all Americans receiving Social Security Plus, employers would be freed from providing retirement for their employees. So they no longer would need to receive the substantial federal deductions they currently accrue for providing employees’ retirement plans. These deductions total an estimated $126 billion annually.
Third, we could reduce or eliminate other unfair deductions in the tax code that allow higher income people to reap generous deductions that low and moderate income Americans can’t enjoy. These include deductions for private retirement savings, homeownership, health care and education. For example, individuals who have enough income to divert for savings or investment are allowed considerable tax deductions for their 401(k)s, IRAs and pensions. Similarly the homeownership deduction for mortgage interest only benefits people with sufficient income to buy a home. But the poor and working class rarely can take advantage of these since they don’t make enough to itemize deductions. Consequently, the majority of these benefits go to the top 20 percent of income earners; in 2010 the mortgage interest deduction alone will amount to about $108 billion.
These three revenue streams -- lifting the payroll cap, eliminating the employer tax deduction for providing retirement, and capping or eliminating various wealth deductions -- would raise 100 percent of the revenue needed for doubling the payout of Social Security Plus. It could be implemented in stages, targeting first those who are most in need.
An expansion of Social Security -- one of the most successful, stable and popular programs in U.S. history currently celebrating its 75th year -- not only would be good for retirees but also for the macro-economy. It would keep money in retirees’ pockets and stimulate consumer demand; act as an “automatic stabilizer” during economic downturns; and make retiree benefits portable when changing from one job to another. It also would help American businesses trying to compete with foreign companies that don’t provide pensions to their employees, since those countries already have generous national retirement plans. And it would be broadly fair, since even those higher income Americans who are losing their tax deductions would see part of it returned to them in the form of a greater Social Security payout.
In short, Social Security Plus would provide a stable, secure retirement for every American and contribute greatly toward a solid foundation from which to build a strong and vibrant 21st century economy.
Progressives Need to Fight the Corporate-Obama-Geithner-Petraeus State
The role of the left should not be to uphold or defend a government increasingly at odds with the interests of the people, but to change it, drastically and from the ground up.
By Barbara Ehrenreich, The Nation
Posted on August 17, 2010
So a black man finally wins the presidency, only to discover that it's about as useful as a 32 cent stamp. According to Eric Alterman, the federal government, avatar of liberal hope for at least a century, has become hopelessly undemocratic, poisoned by corruption and structurally snarled by partisan divisions. Poor Barack Obama, who steps up to the plate and gets handed a foam bat!
The government, as Alterman convincingly describes it, is not only expensive, "bloated" and all the rest. It has become a handmaid to corporate power—a hiring hall from which compliant officials are selected for vastly more lucrative private-sector jobs, as well as an emergency cash reserve for companies that fall on hard times. No wonder so many Americans unthinkingly conflate "big government" and "big corporations." This is not the kind of government that hires unemployed people to paint murals on post office walls. And, as everyone knows, when the bank decides to repossess your home, it's a public employee who will kick in the door.
All that should be enough to sour liberals' trust in government as a tool for progressive social change. But the situation is much worse than Alterman acknowledges. In the years since government—state and local as well as federal—has shed its role as a kindly change agent, it has assumed a new one as über-cop: building more penitentiaries, snapping up stoners, harassing blacks and Latino-looking people on the streets. Nonviolent protests have dwindled, not only because of activists' lingering deference toward Obama but because the police response to any outdoor gathering so resembles the assault on Falluja.
Even the more helpful government programs have become agents of an increasingly repressive state. Food stamp offices, public housing complexes and homeless shelters are the sites of "warrant searches" used to gather up people who might have missed a court date concerning an unpaid debt. Public housing residents are subjected to drug tests; in many states, the process of applying for what remains of welfare (Temporary Assistance to Needy Families) parallels that of being booked by the police, complete with mug shots and fingerprints. Although you won't find them out campaigning against ICE raids and urban stop-and-frisk programs, some of the Tea Partyers seem to dimly understand this, with one handmade poster at last year's 9/12 demonstration in Washington saying, for example, GOVERNMENT HEALTH CARE = PEE IN A CUP.
And what is a liberal to make of the city of Maywood, California, which more or less disbanded itself in June, outsourcing all municipal functions—sounds like a liberal nightmare, right? Until you read that the now-defunct police department was found by the state in 2009 to be "permeated with sexual innuendo, harassment, vulgarity...and a lack of cultural, racial and ethnic sensitivity and respect.''
Alterman acknowledges the problem only tentatively, observing that "one might argue that this [Democratic] faith in government's ability to improve people's lives is misplaced." You betcha. The role of the left should not be to uphold or defend the government, meaning, for now, the corpo-Obama-Geithner-Petraeus state, but to change it, drastically and from the ground up. That may sound overly radical to Alterman, who seems to want "progressives who think of themselves as left of liberal" to abandon even that tiny distinction. But as the Tea Partyers keep reminding us in their nasty and demented ways, these are revolutionary times.
By Barbara Ehrenreich, The Nation
Posted on August 17, 2010
So a black man finally wins the presidency, only to discover that it's about as useful as a 32 cent stamp. According to Eric Alterman, the federal government, avatar of liberal hope for at least a century, has become hopelessly undemocratic, poisoned by corruption and structurally snarled by partisan divisions. Poor Barack Obama, who steps up to the plate and gets handed a foam bat!
The government, as Alterman convincingly describes it, is not only expensive, "bloated" and all the rest. It has become a handmaid to corporate power—a hiring hall from which compliant officials are selected for vastly more lucrative private-sector jobs, as well as an emergency cash reserve for companies that fall on hard times. No wonder so many Americans unthinkingly conflate "big government" and "big corporations." This is not the kind of government that hires unemployed people to paint murals on post office walls. And, as everyone knows, when the bank decides to repossess your home, it's a public employee who will kick in the door.
All that should be enough to sour liberals' trust in government as a tool for progressive social change. But the situation is much worse than Alterman acknowledges. In the years since government—state and local as well as federal—has shed its role as a kindly change agent, it has assumed a new one as über-cop: building more penitentiaries, snapping up stoners, harassing blacks and Latino-looking people on the streets. Nonviolent protests have dwindled, not only because of activists' lingering deference toward Obama but because the police response to any outdoor gathering so resembles the assault on Falluja.
Even the more helpful government programs have become agents of an increasingly repressive state. Food stamp offices, public housing complexes and homeless shelters are the sites of "warrant searches" used to gather up people who might have missed a court date concerning an unpaid debt. Public housing residents are subjected to drug tests; in many states, the process of applying for what remains of welfare (Temporary Assistance to Needy Families) parallels that of being booked by the police, complete with mug shots and fingerprints. Although you won't find them out campaigning against ICE raids and urban stop-and-frisk programs, some of the Tea Partyers seem to dimly understand this, with one handmade poster at last year's 9/12 demonstration in Washington saying, for example, GOVERNMENT HEALTH CARE = PEE IN A CUP.
And what is a liberal to make of the city of Maywood, California, which more or less disbanded itself in June, outsourcing all municipal functions—sounds like a liberal nightmare, right? Until you read that the now-defunct police department was found by the state in 2009 to be "permeated with sexual innuendo, harassment, vulgarity...and a lack of cultural, racial and ethnic sensitivity and respect.''
Alterman acknowledges the problem only tentatively, observing that "one might argue that this [Democratic] faith in government's ability to improve people's lives is misplaced." You betcha. The role of the left should not be to uphold or defend the government, meaning, for now, the corpo-Obama-Geithner-Petraeus state, but to change it, drastically and from the ground up. That may sound overly radical to Alterman, who seems to want "progressives who think of themselves as left of liberal" to abandon even that tiny distinction. But as the Tea Partyers keep reminding us in their nasty and demented ways, these are revolutionary times.
It's the Beginning of the End for the American Empire
Thirty-five years from now, America's official century of being top dog (1945-2045) will have come to an end; its time may, in fact, be running out right now.
By Chalmers Johnson, Tomdispatch.com
Posted on August 17, 2010
In 1962, the historian Barbara Tuchman published a book about the start of World War I and called it The Guns of August. It went on to win a Pulitzer Prize. She was, of course, looking back at events that had occurred almost 50 years earlier and had at her disposal documents and information not available to participants. They were acting, as Vietnam-era Secretary of Defense Robert McNamara put it, in the fog of war.
So where are we this August of 2010, with guns blazing in one war in Afghanistan even as we try to extricate ourselves from another in Iraq? Where are we, as we impose sanctions on Iran and North Korea (and threaten worse), while sending our latest wonder weapons, pilotless drones armed with bombs and missiles, into Pakistan's tribal borderlands, Yemen, and who knows where else, tasked with endless "targeted killings" which, in blunter times, used to be called assassinations? Where exactly are we, as we continue to garrison much of the globe even as our country finds itself incapable of paying for basic services?
I wish I had a crystal ball to peer into and see what historians will make of our own guns of August in 2060. The fog of war, after all, is just a stand-in for what might be called "the fog of the future," the inability of humans to peer with any accuracy far into the world to come. Let me nonetheless try to offer a few glimpses of what that foggy landscape some years ahead might reveal, and even hazard a few predictions about what possibilities await still-imperial America.
Let me begin by asking: What harm would befall the United States if we actually decided, against all odds, to close those hundreds and hundreds of bases, large and small, that we garrison around the world? What if we actually dismantled our empire, and came home? Would Genghis Khan-like hordes descend on us? Not likely. Neither a land nor a sea invasion of the U.S. is even conceivable.
Would 9/11-type attacks accelerate? It seems far likelier to me that, as our overseas profile shrank, the possibility of such attacks would shrink with it.
Would various countries we've invaded, sometimes occupied, and tried to set on the path of righteousness and democracy decline into "failed states?" Probably some would, and preventing or controlling this should be the function of the United Nations or of neighboring states. (It is well to remember that the murderous Cambodian regime of Pol Pot was finally brought to an end not by us, but by neighboring Vietnam.)
Sagging Empire
In other words, the main fears you might hear in Washington -- if anyone even bothered to wonder what would happen, should we begin to dismantle our empire -- would prove but chimeras. They would, in fact, be remarkably similar to Washington's dire predictions in the 1970s about states all over Asia, then Africa, and beyond falling, like so many dominoes, to communist domination if we did not win the war in Vietnam.
What, then, would the world be like if the U.S. lost control globally -- Washington's greatest fear and deepest reflection of its own overblown sense of self-worth -- as is in fact happening now despite our best efforts? What would that world be like if the U.S. just gave it all up? What would happen to us if we were no longer the "sole superpower" or the world's self-appointed policeman?
In fact, we would still be a large and powerful nation-state with a host of internal and external problems. An immigration and drug crisis on our southern border, soaring health-care costs, a weakening education system, an aging population, an aging infrastructure, an unending recession -- none of these are likely to go away soon, nor are any of them likely to be tackled in a serious or successful way as long as we continue to spend our wealth on armies, weapons, wars, global garrisons, and bribes for petty dictators.
Even without our interference, the Middle East would continue to export oil, and if China has been buying up an ever larger share of what remains underground in those lands, perhaps that should spur us into conserving more and moving more rapidly into the field of alternative energies.
Rising Power
Meanwhile, whether we dismantle our empire or not, China will become (if it isn't already) the world's next superpower. It, too, faces a host of internal problems, including many of the same ones we have. However, it has a booming economy, a favorable balance of payments vis-à-vis much of the rest of the world (particularly the U.S., which is currently running an annual trade deficit with China of $227 billion), and a government and population determined to develop the country into a powerful, economically dominant nation-state.
Fifty years ago, when I began my academic career as a scholar of China and Japan, I was fascinated by the modern history of both countries. My first book dealt with the way the Japanese invasion of China in the 1930s spurred Mao Zedong and the Chinese Communist Party he headed on a trajectory to power, thanks to its nationalist resistance to that foreign invader. Incidentally, it is not difficult to find many examples of this process in which a domestic political group gains power because it champions resistance to foreign troops. In the immediate post-WWII period, it occurred in Vietnam, Indonesia, and Malaysia; with the collapse of the Soviet Union in 1991, all over Eastern Europe; and today, it is surely occurring in Afghanistan and probably in Iraq as well.
Once the Cultural Revolution began in China in 1966, I temporarily lost interest in studying the country. I thought I knew where that disastrous internal upheaval was taking China and so turned back to Japan, which by then was well launched on its amazing recovery from World War II, thanks to state-guided, but not state-owned, economic growth.
This pattern of economic development, sometimes called the "developmental state," differed fundamentally from both Soviet-type control of the economy and the laissez-faire approach of the U.S. Despite Japan's success, by the 1990s its increasingly sclerotic bureaucracy had led the country into a prolonged period of deflation and stagnation. Meanwhile, post-U.S.S.R. Russia, briefly in thrall to U.S. economic advice, fell captive to rapacious oligarchs who dismantled the command economy only to enrich themselves.
In China, Communist Party leader Deng Xiaoping and his successors were able to watch developments in Japan and Russia, learning from them both. They have clearly adopted effective aspects of both systems for their economy and society. With a modicum of luck, economic and otherwise, and a continuation of its present well-informed, rational leadership, China should continue to prosper without either threatening its neighbors or the United States.
To imagine that China might want to start a war with the U.S. -- even over an issue as deeply emotional as the ultimate political status of Taiwan -- would mean projecting a very different path for that country than the one it is currently embarked on.
Lowering the Flag on the American Century
Thirty-five years from now, America's official century of being top dog (1945-2045) will have come to an end; its time may, in fact, be running out right now. We are likely to begin to look ever more like a giant version of England at the end of its imperial run, as we come face-to-face with, if not necessarily to terms with, our aging infrastructure, declining international clout, and sagging economy. It may, for all we know, still be Hollywood's century decades from now, and so we may still make waves on the cultural scene, just as Britain did in the 1960s with the Beatles and Twiggy. Tourists will undoubtedly still visit some of our natural wonders and perhaps a few of our less scruffy cities, partly because the dollar-exchange rate is likely to be in their favor.
If, however, we were to dismantle our empire of military bases and redirect our economy toward productive, instead of destructive, industries; if we maintained our volunteer armed forces primarily to defend our own shores (and perhaps to be used at the behest of the United Nations); if we began to invest in our infrastructure, education, health care, and savings, then we might have a chance to reinvent ourselves as a productive, normal nation. Unfortunately, I don't see that happening. Peering into that foggy future, I simply can't imagine the U.S. dismantling its empire voluntarily, which doesn't mean that, like all sets of imperial garrisons, our bases won't go someday.
Instead, I foresee the U.S. drifting along, much as the Obama administration seems to be drifting along in the war in Afghanistan. The common talk among economists today is that high unemployment may linger for another decade. Add in low investment and depressed spending (except perhaps by the government) and I fear T.S. Eliot had it right when he wrote: "This is the way the world ends, not with a bang but a whimper."
I have always been a political analyst rather than an activist. That is one reason why I briefly became a consultant to the CIA's top analytical branch, and why I now favor disbanding the Agency. Not only has the CIA lost its raison d'être by allowing its intelligence gathering to become politically tainted, but its clandestine operations have created a climate of impunity in which the U.S. can assassinate, torture, and imprison people at will worldwide.
Just as I lost interest in China when that country's leadership headed so blindly down the wrong path during the Cultural Revolution, so I'm afraid I'm losing interest in continuing to analyze and dissect the prospects for the U.S. over the next few years. I applaud the efforts of young journalists to tell it like it is, and of scholars to assemble the data that will one day enable historians to describe where and when we went astray. I especially admire insights from the inside, such as those of ex-military men like Andrew Bacevich and Chuck Spinney. And I am filled with awe by men and women who are willing to risk their careers, incomes, freedom, and even lives to protest -- such as the priests and nuns of SOA Watch, who regularly picket the School of the Americas and call attention to the presence of American military bases and misbehavior in South America.
I'm impressed as well with Pfc. Bradley Manning, if he is indeed the person responsible for potentially making public 92,000 secret documents about the war in Afghanistan. Daniel Ellsberg has long been calling for someone to do what he himself did when he released the Pentagon Papers during the Vietnam War. He must be surprised that his call has now been answered -- and in such an unlikely way.
My own role these past 20 years has been that of Cassandra, whom the gods gave the gift of foreseeing the future, but also cursed because no one believed her. I wish I could be more optimistic about what's in store for the U.S. Instead, there isn't a day that our own guns of August don't continue to haunt me.
By Chalmers Johnson, Tomdispatch.com
Posted on August 17, 2010
In 1962, the historian Barbara Tuchman published a book about the start of World War I and called it The Guns of August. It went on to win a Pulitzer Prize. She was, of course, looking back at events that had occurred almost 50 years earlier and had at her disposal documents and information not available to participants. They were acting, as Vietnam-era Secretary of Defense Robert McNamara put it, in the fog of war.
So where are we this August of 2010, with guns blazing in one war in Afghanistan even as we try to extricate ourselves from another in Iraq? Where are we, as we impose sanctions on Iran and North Korea (and threaten worse), while sending our latest wonder weapons, pilotless drones armed with bombs and missiles, into Pakistan's tribal borderlands, Yemen, and who knows where else, tasked with endless "targeted killings" which, in blunter times, used to be called assassinations? Where exactly are we, as we continue to garrison much of the globe even as our country finds itself incapable of paying for basic services?
I wish I had a crystal ball to peer into and see what historians will make of our own guns of August in 2060. The fog of war, after all, is just a stand-in for what might be called "the fog of the future," the inability of humans to peer with any accuracy far into the world to come. Let me nonetheless try to offer a few glimpses of what that foggy landscape some years ahead might reveal, and even hazard a few predictions about what possibilities await still-imperial America.
Let me begin by asking: What harm would befall the United States if we actually decided, against all odds, to close those hundreds and hundreds of bases, large and small, that we garrison around the world? What if we actually dismantled our empire, and came home? Would Genghis Khan-like hordes descend on us? Not likely. Neither a land nor a sea invasion of the U.S. is even conceivable.
Would 9/11-type attacks accelerate? It seems far likelier to me that, as our overseas profile shrank, the possibility of such attacks would shrink with it.
Would various countries we've invaded, sometimes occupied, and tried to set on the path of righteousness and democracy decline into "failed states?" Probably some would, and preventing or controlling this should be the function of the United Nations or of neighboring states. (It is well to remember that the murderous Cambodian regime of Pol Pot was finally brought to an end not by us, but by neighboring Vietnam.)
Sagging Empire
In other words, the main fears you might hear in Washington -- if anyone even bothered to wonder what would happen, should we begin to dismantle our empire -- would prove but chimeras. They would, in fact, be remarkably similar to Washington's dire predictions in the 1970s about states all over Asia, then Africa, and beyond falling, like so many dominoes, to communist domination if we did not win the war in Vietnam.
What, then, would the world be like if the U.S. lost control globally -- Washington's greatest fear and deepest reflection of its own overblown sense of self-worth -- as is in fact happening now despite our best efforts? What would that world be like if the U.S. just gave it all up? What would happen to us if we were no longer the "sole superpower" or the world's self-appointed policeman?
In fact, we would still be a large and powerful nation-state with a host of internal and external problems. An immigration and drug crisis on our southern border, soaring health-care costs, a weakening education system, an aging population, an aging infrastructure, an unending recession -- none of these are likely to go away soon, nor are any of them likely to be tackled in a serious or successful way as long as we continue to spend our wealth on armies, weapons, wars, global garrisons, and bribes for petty dictators.
Even without our interference, the Middle East would continue to export oil, and if China has been buying up an ever larger share of what remains underground in those lands, perhaps that should spur us into conserving more and moving more rapidly into the field of alternative energies.
Rising Power
Meanwhile, whether we dismantle our empire or not, China will become (if it isn't already) the world's next superpower. It, too, faces a host of internal problems, including many of the same ones we have. However, it has a booming economy, a favorable balance of payments vis-à-vis much of the rest of the world (particularly the U.S., which is currently running an annual trade deficit with China of $227 billion), and a government and population determined to develop the country into a powerful, economically dominant nation-state.
Fifty years ago, when I began my academic career as a scholar of China and Japan, I was fascinated by the modern history of both countries. My first book dealt with the way the Japanese invasion of China in the 1930s spurred Mao Zedong and the Chinese Communist Party he headed on a trajectory to power, thanks to its nationalist resistance to that foreign invader. Incidentally, it is not difficult to find many examples of this process in which a domestic political group gains power because it champions resistance to foreign troops. In the immediate post-WWII period, it occurred in Vietnam, Indonesia, and Malaysia; with the collapse of the Soviet Union in 1991, all over Eastern Europe; and today, it is surely occurring in Afghanistan and probably in Iraq as well.
Once the Cultural Revolution began in China in 1966, I temporarily lost interest in studying the country. I thought I knew where that disastrous internal upheaval was taking China and so turned back to Japan, which by then was well launched on its amazing recovery from World War II, thanks to state-guided, but not state-owned, economic growth.
This pattern of economic development, sometimes called the "developmental state," differed fundamentally from both Soviet-type control of the economy and the laissez-faire approach of the U.S. Despite Japan's success, by the 1990s its increasingly sclerotic bureaucracy had led the country into a prolonged period of deflation and stagnation. Meanwhile, post-U.S.S.R. Russia, briefly in thrall to U.S. economic advice, fell captive to rapacious oligarchs who dismantled the command economy only to enrich themselves.
In China, Communist Party leader Deng Xiaoping and his successors were able to watch developments in Japan and Russia, learning from them both. They have clearly adopted effective aspects of both systems for their economy and society. With a modicum of luck, economic and otherwise, and a continuation of its present well-informed, rational leadership, China should continue to prosper without either threatening its neighbors or the United States.
To imagine that China might want to start a war with the U.S. -- even over an issue as deeply emotional as the ultimate political status of Taiwan -- would mean projecting a very different path for that country than the one it is currently embarked on.
Lowering the Flag on the American Century
Thirty-five years from now, America's official century of being top dog (1945-2045) will have come to an end; its time may, in fact, be running out right now. We are likely to begin to look ever more like a giant version of England at the end of its imperial run, as we come face-to-face with, if not necessarily to terms with, our aging infrastructure, declining international clout, and sagging economy. It may, for all we know, still be Hollywood's century decades from now, and so we may still make waves on the cultural scene, just as Britain did in the 1960s with the Beatles and Twiggy. Tourists will undoubtedly still visit some of our natural wonders and perhaps a few of our less scruffy cities, partly because the dollar-exchange rate is likely to be in their favor.
If, however, we were to dismantle our empire of military bases and redirect our economy toward productive, instead of destructive, industries; if we maintained our volunteer armed forces primarily to defend our own shores (and perhaps to be used at the behest of the United Nations); if we began to invest in our infrastructure, education, health care, and savings, then we might have a chance to reinvent ourselves as a productive, normal nation. Unfortunately, I don't see that happening. Peering into that foggy future, I simply can't imagine the U.S. dismantling its empire voluntarily, which doesn't mean that, like all sets of imperial garrisons, our bases won't go someday.
Instead, I foresee the U.S. drifting along, much as the Obama administration seems to be drifting along in the war in Afghanistan. The common talk among economists today is that high unemployment may linger for another decade. Add in low investment and depressed spending (except perhaps by the government) and I fear T.S. Eliot had it right when he wrote: "This is the way the world ends, not with a bang but a whimper."
I have always been a political analyst rather than an activist. That is one reason why I briefly became a consultant to the CIA's top analytical branch, and why I now favor disbanding the Agency. Not only has the CIA lost its raison d'être by allowing its intelligence gathering to become politically tainted, but its clandestine operations have created a climate of impunity in which the U.S. can assassinate, torture, and imprison people at will worldwide.
Just as I lost interest in China when that country's leadership headed so blindly down the wrong path during the Cultural Revolution, so I'm afraid I'm losing interest in continuing to analyze and dissect the prospects for the U.S. over the next few years. I applaud the efforts of young journalists to tell it like it is, and of scholars to assemble the data that will one day enable historians to describe where and when we went astray. I especially admire insights from the inside, such as those of ex-military men like Andrew Bacevich and Chuck Spinney. And I am filled with awe by men and women who are willing to risk their careers, incomes, freedom, and even lives to protest -- such as the priests and nuns of SOA Watch, who regularly picket the School of the Americas and call attention to the presence of American military bases and misbehavior in South America.
I'm impressed as well with Pfc. Bradley Manning, if he is indeed the person responsible for potentially making public 92,000 secret documents about the war in Afghanistan. Daniel Ellsberg has long been calling for someone to do what he himself did when he released the Pentagon Papers during the Vietnam War. He must be surprised that his call has now been answered -- and in such an unlikely way.
My own role these past 20 years has been that of Cassandra, whom the gods gave the gift of foreseeing the future, but also cursed because no one believed her. I wish I could be more optimistic about what's in store for the U.S. Instead, there isn't a day that our own guns of August don't continue to haunt me.
Federal Government is Lucrative "Industry"
The Bureau of Economic Analysis latest release of industry compensation levels shows that the average federal worker ranks up at the top along with employees in the finance and energy industries.
The BEA presents compensation data for 72 industries that span the U.S. economy. Figure 1 shows the 20 industries with the highest levels of average compensation, which includes wages and benefits. It also shows the average for all U.S. private industries and the average for the industry with the lowest compensation. (The names of the industries have been simplified in some cases).
Federal civilian workers have the sixth highest average compensation of the 72 industries:
The BEA presents compensation data for 72 industries that span the U.S. economy. Figure 1 shows the 20 industries with the highest levels of average compensation, which includes wages and benefits. It also shows the average for all U.S. private industries and the average for the industry with the lowest compensation. (The names of the industries have been simplified in some cases).
Federal civilian workers have the sixth highest average compensation of the 72 industries:
As yesterday’s post showed, federal employee compensation has exploded over the course of the decade. Figure 2 shows that this federal employee compensation growth has been the fifth highest of the 72 industries measured by the BEA:
WHO cancels its false alarm
Kevin Libin August 11, 2010
The World Health Organization (WHO) announced on Tuesday that the H1N1 “swine flu” pandemic was officially over. The declaration came only about six months after virtually everybody else in the Western world realized that nothing like a pandemic, as we normally understand the term, had ever really begun.
Thirteen months ago, the WHO raised the swine flu threat to a Level 6 pandemic alert, the highest possible. “It is all of humanity that is under threat,” warned Margaret Chan, the WHO director-general. The organization projected millions of souls might be struck down by the virus; the WHO’s assistant director-general drew comparisons to the Spanish Flu, which had wiped out upwards of 20 million people by 1919.
It quickly became apparent that H1N1 would be nothing like that. And never will be. The WHO says this is now just another “seasonal influenza.” As those bugs go, it appears a milder strain. More common varieties kill 250,000 to 500,000 people worldwide every year. The total confirmed death toll of the Great Swine Flu Pandemic: 18,000.
The world’s most authoritative body suddenly seems far less authoritative, particularly as it resists acknowledging unnecessarily triggering worldwide fear. “We have never had a moment’s doubt of whether this is a pandemic or not,” insisted one official recently.
But then, the agency looks at these things very differently than most people — many of whom surely have grave doubts about how the so-called Swine Flu pandemic was handled from the start.
The WHO, after all, considers all pandemics potential threats to humanity. Its scientists also have a distinct way of establishing a pandemic. Any virus that jumps from animals to human-to-human transmission “leading to community wide outbreaks” in two countries triggers warnings. In recent years, the organization stopped requiring “several, simultaneous epidemics worldwide with enormous numbers of deaths and illness”; now pandemics “can be either mild or severe.” To qualify, a virus, until 2008, needed to “shift,” and spawn subtypes. This criteria, too, was removed.
“Although this change seems subtle, it is a significant change, and is a potential problem with the new WHO pandemic definition,” cautioned an editorial in the British Medical Journal’s Clinical Evidence last year.
But the UN-run health body has hardly exercised caution in communicating such semantic technicalities. Instead, it has sounded the pandemic alarm loudly and dramatically. Dr. Chan says it was “pure good luck” H1N1 didn’t confound our vaccines and antiviral drugs and deliver widespread death. If that’s luck, then humanity is on some streak: in 2005, the WHO predicted 150 million dead from the H5N1 Avian Flu, though the confirmed toll never reached even 100; the Global Health Council anticipated the 2003 SARS outbreak wiping out 60 million lives, but the final tally ended up below 800.
In every case, people and economies have been more afflicted by contagious panic — closed borders, travel bans, shuttered schools and businesses, edgy consumers, mass livestock culls, and billions spent by taxpayers on protection programs — than by contagious disease.
This is not the concern of Dr. Chan, who has argued, anyway, that believing modern, liberalized trade improves living conditions and health worldwide is mistaken. Such systems “favour those who are already well off,” she told the Regional Committee for Europe, last September. Progress comes, rather, from redistribution: “Gaps in Health outcomes will be reduced, and health systems will strive for fairness only when equity is an explicit policy objective, also in sectors well beyond health,” she said. We need “changes in the functioning of the global economy.”
With that philosophy, it makes sense that Dr. Chan might mistake for “pure luck” what is more likely the fruit of progress, driven largely by liberalized commerce. WHO officials suggest devastating pandemics are inevitably cyclical: After the millions of deaths caused by the Spanish Flu, the Asian Flu (1957) and the Hong Kong Flu (1968), the next is due “any time now” they’ve promised. But in each subsequent pandemic, the world was a richer, better-fed, generally healthier place — and each time, mortality rates grew smaller.
Epidemiologists know influenza viruses prove deadliest in victims weakened by pre-existing complications. Since the Spanish Flu, public health is incalculably better: we’ve developed and commercialized sulfa drugs and penicillin; we’ve improved vaccines; malnutrition levels in the developing world are half what they were 40 years ago. The fact that H1N1 did not outfox human vaccines and anti-virals might seem lucky to those lacking faith that human enterprise and innovation can also prove ingeniously adaptable and potent.
It may be there will never be another decimating flu plague on the scale of past ones again.
Predictably, though, the WHO has only taken its massive Swine Flu misjudgment to warn against growing “complacent,” as another threat could one day come. But the false alarms have only bred doubt about the WHO’s own trustworthiness, popularizing theories that the agency colludes with Big Pharma while nourishing skeptics who convince the gullible that vaccinations are a dangerous scam. Even the Parliamentary Assembly of the Council of Europe called this a “faked pandemic.”
If we do ever become complacent about genuine viral pandemic threats, it may be the unfortunate result of the World Health Organization’s emerging pattern of needless panics.
The World Health Organization (WHO) announced on Tuesday that the H1N1 “swine flu” pandemic was officially over. The declaration came only about six months after virtually everybody else in the Western world realized that nothing like a pandemic, as we normally understand the term, had ever really begun.
Thirteen months ago, the WHO raised the swine flu threat to a Level 6 pandemic alert, the highest possible. “It is all of humanity that is under threat,” warned Margaret Chan, the WHO director-general. The organization projected millions of souls might be struck down by the virus; the WHO’s assistant director-general drew comparisons to the Spanish Flu, which had wiped out upwards of 20 million people by 1919.
It quickly became apparent that H1N1 would be nothing like that. And never will be. The WHO says this is now just another “seasonal influenza.” As those bugs go, it appears a milder strain. More common varieties kill 250,000 to 500,000 people worldwide every year. The total confirmed death toll of the Great Swine Flu Pandemic: 18,000.
The world’s most authoritative body suddenly seems far less authoritative, particularly as it resists acknowledging unnecessarily triggering worldwide fear. “We have never had a moment’s doubt of whether this is a pandemic or not,” insisted one official recently.
But then, the agency looks at these things very differently than most people — many of whom surely have grave doubts about how the so-called Swine Flu pandemic was handled from the start.
The WHO, after all, considers all pandemics potential threats to humanity. Its scientists also have a distinct way of establishing a pandemic. Any virus that jumps from animals to human-to-human transmission “leading to community wide outbreaks” in two countries triggers warnings. In recent years, the organization stopped requiring “several, simultaneous epidemics worldwide with enormous numbers of deaths and illness”; now pandemics “can be either mild or severe.” To qualify, a virus, until 2008, needed to “shift,” and spawn subtypes. This criteria, too, was removed.
“Although this change seems subtle, it is a significant change, and is a potential problem with the new WHO pandemic definition,” cautioned an editorial in the British Medical Journal’s Clinical Evidence last year.
But the UN-run health body has hardly exercised caution in communicating such semantic technicalities. Instead, it has sounded the pandemic alarm loudly and dramatically. Dr. Chan says it was “pure good luck” H1N1 didn’t confound our vaccines and antiviral drugs and deliver widespread death. If that’s luck, then humanity is on some streak: in 2005, the WHO predicted 150 million dead from the H5N1 Avian Flu, though the confirmed toll never reached even 100; the Global Health Council anticipated the 2003 SARS outbreak wiping out 60 million lives, but the final tally ended up below 800.
In every case, people and economies have been more afflicted by contagious panic — closed borders, travel bans, shuttered schools and businesses, edgy consumers, mass livestock culls, and billions spent by taxpayers on protection programs — than by contagious disease.
This is not the concern of Dr. Chan, who has argued, anyway, that believing modern, liberalized trade improves living conditions and health worldwide is mistaken. Such systems “favour those who are already well off,” she told the Regional Committee for Europe, last September. Progress comes, rather, from redistribution: “Gaps in Health outcomes will be reduced, and health systems will strive for fairness only when equity is an explicit policy objective, also in sectors well beyond health,” she said. We need “changes in the functioning of the global economy.”
With that philosophy, it makes sense that Dr. Chan might mistake for “pure luck” what is more likely the fruit of progress, driven largely by liberalized commerce. WHO officials suggest devastating pandemics are inevitably cyclical: After the millions of deaths caused by the Spanish Flu, the Asian Flu (1957) and the Hong Kong Flu (1968), the next is due “any time now” they’ve promised. But in each subsequent pandemic, the world was a richer, better-fed, generally healthier place — and each time, mortality rates grew smaller.
Epidemiologists know influenza viruses prove deadliest in victims weakened by pre-existing complications. Since the Spanish Flu, public health is incalculably better: we’ve developed and commercialized sulfa drugs and penicillin; we’ve improved vaccines; malnutrition levels in the developing world are half what they were 40 years ago. The fact that H1N1 did not outfox human vaccines and anti-virals might seem lucky to those lacking faith that human enterprise and innovation can also prove ingeniously adaptable and potent.
It may be there will never be another decimating flu plague on the scale of past ones again.
Predictably, though, the WHO has only taken its massive Swine Flu misjudgment to warn against growing “complacent,” as another threat could one day come. But the false alarms have only bred doubt about the WHO’s own trustworthiness, popularizing theories that the agency colludes with Big Pharma while nourishing skeptics who convince the gullible that vaccinations are a dangerous scam. Even the Parliamentary Assembly of the Council of Europe called this a “faked pandemic.”
If we do ever become complacent about genuine viral pandemic threats, it may be the unfortunate result of the World Health Organization’s emerging pattern of needless panics.
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