No Class Warfare Here!

(So you don't think the banks and financial sector are out to fuck the working man in the ass? Here, read this, shut up!--jef)

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Saturday, July 16, 2011 by The American Prospect

by Harold Meyerson

 

Whenever liberals note that the rich are getting richer while everyone else is either treading water or sinking, or that profits are up while wages are down, or, worse yet, that profits are up because wages are down, those liberals are invariably accused by conservatives of fomenting class warfare.

Well, goodness knows, we at the Prospect would never stoop so low. We would, however, refer our readers to the July 11 “Eye on the Market” report by J.P. Morgan Chase Chief Investment Officer Michael Cembalest, which demonstrates conclusively that, well, profits are up because wages are down. (“Eye on the Market” is a newsletter that Chase circulates to its large investors.)

The subject of the July 11 report is corporate profits, in particular, the pre-tax profit margins of the S&P 500, the 500 largest publicly-traded companies based in the U.S. Those profit margins, you’ll be glad to know, are close to record highs, nearing 13 percent of company revenues - their highest levels since the mid-1960s. And since medical costs are far higher today than they were back then, how, you may wonder, have those companies climbed back to the profit margins of those earlier, lest costly, more innocent times?

To answer that question, Cembalest looked at the rise in profit margins “from peak to peak” - that is, from their highpoint in 2000, just before the dot-com bust, to their highpoint in 2007, just before the financial crisis. In those seven years, profit margins rose by roughly 1.3 percent - from just under 11 percent of the S&P 500’s revenues to just over 12 percent. (Today, after dipping in the months after the crash, they’re up to near 13 percent, as we noted above.)

Why did they increase from 2000 to 2007? “There are a lot of moving parts in the margin equation,” Cembalest notes, but “reductions in wages and benefits explain the majority of the net improvement in margins. [Emphasis is Cembalest’s.] This trend has continued; as we have shown several times over the last two years, U.S. labor compensation is now at a 50-year low relative to both company sales and U.S. GDP.”

According to Cembalest’s calculations, the reduction in wages and benefits as a percentage of company revenue is responsible for about 75 percent of the increase in those companies’ profit margins. You can read the report, complete with graphs and charts, here.

In other words, medical costs may be rising, but companies are passing those cost increases on to their workers - that is, if they covering their workers’ medical expenses at all. And wages increases? What are they?

Cembalest notes that bringing 2 billion Asians into the global labor force has had a downward effect on American workers’ wages. He neglects to note that the virtual elimination of unions from the private-sector economy has had a negative effect on wage and benefit levels, too. If no one represents workers when it comes time to divide up company revenues, those workers don’t come out very well. Wealth is redistributed from labor to capital.

I realize we’re getting dangerously close to fomenting class warfare here, but don’t blame us. We’re just reporting the view from J.P. Morgan Chase.

‘Let ‘Em Eat Peas’: An Elitist Mantra for Our Age

Sunday, July 17, 2011 by CommonDreams.org

by Donna Smith

The elite of this nation have largely forgotten the rest of us. Wall Street was bailed out; Main Street was sold out.

It has been a challenging week for many people.  While our elected officials have been broadly reported to be at odds about exactly how to raise the debt ceiling or not, millions of Americans have no work, are running out of ways to keep their homes – rented or owned, and struggle even to keep the basic necessities for themselves and their families.

Nurses served soup to hungry folks in Lansing, Michigan. There was a stampede of people hoping to secure low-cost housing in Dallas.

Yet in a glaring display of the inability of this nation’s elected leaders to publicly recognize and address the suffering happening across the country – in every Congressional District and in every state – those who have the power to alleviate some of that suffering have decided it’s time to cut the social safety nets of Medicaid, Medicare and Social Security rather than protect and enhance it.  How that will help the economy is unclear to me.  No one has yet explained to me how allowing more people to go belly up helps us now or in the longer term.

People who are not working, who don’t have homes, who don’t have a weekly paycheck – no matter how meager, who don’t have adequate retirement protection and income, who don’t have healthcare, who don’t have access to healthy foods,  and who may not have a health environment , have a very hard time contributing much at all to their local economies.  It is common sense to me that tax revenues fall ever lower, local and state governments are having budget difficulties unlike those ever seen before, and the entities least able to absorb large losses and a weakened economy are hurting most.

Earlier this week, while chastising the Republicans for not agreeing to a debt ceiling deal that would include his suggestions to cut Medicare and Social Security benefits, President Obama said Congressional members needed to do their work, reach a deal and just “eat their peas.”    That’s insulting not only to the peas but to every one of us who worries that both Republicans and Democrats have so lost their way that cutting benefits that will harm real people in very real ways has now become just another “man up” photo-op moment in a political struggle instead of the horrific and damaging action that it really is.  It was a diminishment of the seriousness of the actions both parties are about to take that will cause great and terrible harm to millions.

While no one knows for sure if Marie Antoinette ever really said, “Let them eat cake,” we do know the elite in France all those years ago in the 1700s were clueless to the cries of people who couldn’t afford bread much less the cake they had been admonished to eat.  It appears that in 2011 in the United States of America, we can now replace that admonition with our own:  “Let them eat their peas.”    That’s just about the size of things from Washington, DC, from my view.

The elite of this nation have largely forgotten the rest of us.   We’ve already sacrificed.  There was no sharing of peas or anything else.  Wall Street was bailed out; Main Street was sold out. And the march goes on to call for “shared sacrifice.”  It’s a ruse of the most horrible kind, and it dishonors those who have gone before us.

Obama Snubs Elizabeth Warren (2 articles)

(Proving Obama is a president for the bankers, of the bankers and by the bankers, the fix is in: Elizabeth Warren--long thought, by everyone who is NOT deeply entrenched in Wall Street, to be the ideal and most qualified candidate with the most integrity to head the CFPB--gets snubbed for former Ohio attorney general Richard Cordray, a career politician. Obama sucks, man.--jef)

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Sunday, July 17, 2011 by The Daily Beast
After a months-long guessing game, the president has chosen Richard Cordray to helm his new consumer protection agency—passing over the woman who proposed it in the first place.

by Gary Rivlin
 

Barack Obama finally named his nominee to head the new Consumer Financial Protection Bureau. And his name isn’t Elizabeth Warren.

The White House press office on Sunday announced that the president had chosen Richard Cordray, the former attorney general of Ohio to head his new agency, and not Elizabeth Warren who had proved controversial for championing the rights of consumers over bankers.

The White House press office on Sunday announced that the president had chosen Richard Cordray, the former attorney general of Ohio to head his new agency, created when he signed the sweeping Dodd-Frank financial reform package into law last July.

The move will likely hurt the president’s relationships with those who wanted him to push for Warren, a plain-spoken consumer champion who first proposed the new bureau. In the wake of the financial crisis, Warren envisioned an agency that better protected Americans against suspect financial products ranging from mortgages and credit cards to fringe financial services like check-cashing and payday loans.

The president pleased his left flank last summer when he appointed Warren to create this new bureau—but he stopped short of nominating her as its permanent director. Several other names surfaced over the months as possible nominees, including Cordray and also Ted Strickland, the former governor of Ohio, and Jennifer Granholm, former governor of Michigan. But whatever the liberal bonafides of these and other choices, Warren remained the overwhelming pick among consumer champions, especially those involved in the fight against predatory lending.

A permanent director, who would be appointed to a five-year term, needs Senate confirmation. When in May word spread that the president would appoint Warren to head the agency through a recess appointment (the disadvantage of that maneuver being that Warren would serve only for the remainder of Obama’s term, rather than a full five-year stint), Senate Republicans responded by refusing to adjourn for its traditional Memorial Day recess.

"There was always something outsider about her that scared people here,” said one high-ranking Obama appointee of Warren. “They couldn’t trust her because she wasn’t one of them."

“I really like Elizabeth and think she would have been a great choice, but there was always something outsider about her that scared people here [in Washington],” said one high-ranking Obama appointee, herself a woman. Warren taught at Harvard Law and had only gotten involved in politics a few years earlier. “They couldn’t trust her because she wasn’t one of them.”

Yet whether the Senate approves Cordray remains to be seen. These days, it takes 60 votes to get anything done in the Senate—and in May, 44 of the Senate’s 47 Republicans vowed to block any nominee unless the president agreed to a watered down agency, which stands as Dodd-Frank’s most significant and controversial provision.

A career politician, Cordray served a partial term as Ohio’s attorney general (he filled the term of a fellow Democrat caught up in a sex scandal) before losing a race for reelection in November 2010. The next month, Warren chose him to head up the agency’s enforcement division—in no small part, no doubt, because in his two years as attorney general he aggressively sought punishment of those guilty of foreclosure fraud in his state.

In response to today’s news, Warren issued a statement saying: “Rich has always had my strong support because he is tough and he is smart—and that’s exactly the combination this new agency needs. He was one of the first senior leaders I recruited for the agency, and his work and commitment have made it clear that he will make a stellar Director.”

Under Dodd-Frank, the Consumer Financial Protection Bureau goes live this Thursday—one year to the day that the president signed the bill into law. Until the Senate confirms a permanent director, though, the agency’s powers are limited. The bureau can start regulating the country’s largest banks, but it will have limited rule-making authority and won't have jurisdiction over payday lenders, debt collectors, or other non-bank financial institutions until a permanent director is in place.

Obama will announce his choice at a White House event on Monday.

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07.17.11 - 5:24 PM
Too Good, Too Smart, Too Able for Wall Street Approval 
by Ralph Nader

Statement by Ralph Nader on the rejection of Elizabeth Warren by President Barack Obama to be the Director of the new Consumer Financial Regulatory Bureau.

To dump Elizabeth Warren, the most qualified, most motivated and most articulate candidate for the directorship of the Consumer Financial Regulatory Bureau is an act of political cowardliness by President Obama and a boon to anti-consumer Republicans and their corporate paymasters in Wall Street.

Elizabeth Warren apparently is just too good, too smart, and too able to arouse the just concerns of millions of American families about the need to put the law-and-order wood to the corporate criminals, defrauders and reckless speculators with the savings and pensions of millions of Americans.

President Obama should realize that his back-of-the-hand attitude to his liberal and progressive supporters – who sent him to the White House – can have consequences. He believes they have no where to go. But they do. They can stay home in 2012, as so many did in 2010 to the detriment of the Democrats and many Congressional races.

How Gravity Works (A Different Theory)

(heard this guy on the radio earlier this evening and found his theories interesting.--jef)

(I don't know how legitimate his theories are, but his examples made sense on a rudimentary level. For more info, click on the images which are linked to his site.--jef)

TSA Violated Federal Law by Not Taking Public Comments on Airport Scanners

By: Kevin Gosztola Friday July 15, 2011

Court: TSA Violated Federal Law by Not Taking Public Comments on Airport Scanners

A court has ruled, in a lawsuit filed by the Electronic Privacy Information Center (EPIC), the Transporation Security Administration (TSA) violated federal law when it went ahead and installed airport body scanners without seeking comments from the public.

The DC Circuit Court of Appeals concluded TSA “has not justified its failure to initiate notice-and-comment rulemaking before announcing it would use AIT scanners for primary screening.” And, the court ruled that under the Administrative Procedures Act federal agencies are required to provide notice and opportunity for comment when implementing rules that affect the rights of the public.

The ruling was not a complete victory for the privacy rights group. While Judge Douglas H. Ginsburg did agree the machines produce an image of an unclothed passenger and thus the body scanner intrudes upon personal privacy “in a way a magnetometer does not,” the court did not conclude that the scanners violate the Constitution.

Marc Rotenberg, president of EPIC and lead counsel in the case, reacted, “The TSA is now subject to the same rules as other government agencies that help ensure transparency and accountability. Many Americans object to the airport body scanner program. Now, they will have an opportunity to express their views to the TSA and the agency must take their views into account as a matter of law.”

Rotenberg finds that not only does this indicate the government is obligated to begin a process for taking “public comments” on the process, but the result also indicates “travelers have a legal right to opt-out of the body scanner search” and they should be free to exercise that right “without coercion.”


The lawsuit filed in November 2010, just after TSA scanners became operational in a number of airports across the country, shows EPIC sought to demonstrate the scanners violated a Department of Homeland Security statute by “eroding privacy protections by sanctioning the nationwide development of FBS devices in tandem with a systemized collection of airline passengers’ personal information.” The lawsuit also sought to prove the scanners violated the Privacy Act by “creating an indexed system of records containing air traveler’s personally identifiable information without publishing a system of records notice,” and they also violated the Religious Freedom Restoration Act by “substantially burdening the free exercise of religion of those airline passengers who embrace sincerely held religious beliefs requiring preservation of modesty.”

Finally, the lawsuit argued by “systematically capturing images” of the “private area of the individual” including “the naked or undergarment clad genitals, pubic area, buttocks, [and] female breasts,” the TSA violated the Video Voyeurism Prevention.

It does not appear that the court ruled on these individual issues, although they did rule on the constitutionality of the scanners.

The ruling comes just as CBS News reports TSA’s decision to “streamline the airport security checkpoint process for frequent fliers” is “one of the most dangerous things,” according to aviation consultant Michael Boyd.

The TSA would like to make it so that “frequent fliers” can go through less rigorous screening. They may even be able to keep their shoes on and leave laptops in carry-on bags. However, they would have to be a specially selected “frequent flier” and have to pass a “background check” by Customs and Border Protection.
Boyd concludes:

The program) will give (TSA) time to focus on the untrusted travelers, which means if you don’t go through a government background check, you are going to be untrusted. … You’re going to have to go through the same security either way, but what really scares me is you’re not going to be a trusted person unless you go through a government background check — that’s scary.

The TSA is not a professionally-managed organization,” he said. “The problem with it is we have politics involved. We have go and show — the other day they announced they found a bag with 13 knives in it. I’m not impressed. The reality of this is, this is show and it’s not going to improve anything.

Here’s a recap for those of you not following along. In the last thirty days, TSA has:

• Asked a 95-year-old woman to remove her adult diaper (then denied ever asking her to do such a thing)
  
• Singled out a woman for a hair search probably because she was African-American
  
• After announcing they would try to avoid patting down children, let TSA pat down a 6-year-old boy twice
  
• Missed a man who stowed away on a flight from New York to Los Angeles
  
• Dismissed concerns about increased risk of cancer from the scanners (although these concerns have been coming from scientists since TSA began to use the scanners)
  
• Arrested a mom for refusing to let TSA search her daughter
  
• Let a stun gun get on a JetBlue flight to Boston. A cleaning crew found it.
  
• And, finally, couldn’t stop a scorpion from getting on a plane to sting a man
  

The outcome of this lawsuit isn’t just an occasion to get the public a chance to register comments on scanners in airports. It’s also a chance to get rid of TSA Chief John Pistole.

Here’s Keith Olbermann explaining why he’s got to go:

This Modern World: The Debt Ceiling/Budget Cuts Debate

Debt Political Theater Diverts Attention While Americans' Wealth Is Stolen

Friday, July 15, 2011 by CommonDreams.org
by Dennis Kucinich

The rancorous debate over the debt belies a fundamental truth of our economy -- that it is run for the few at the expense of the many, that our entire government has been turned into a machine which takes the wealth of a mass of Americans and accelerates it into the hands of the few. Let me give you some examples.

Take war. War takes the money from the American people and puts it into the hands of arms manufacturers, war profiteers, and private armies. The war in Iraq, based on lies: $3 trillion will be the cost of that war. The war in Afghanistan; based on a misreading of history; half a trillion dollars in expenses already. The war against Libya will be $1 billion by September.


Fifty percent of our discretionary spending goes for the Pentagon. A massive transfer of wealth into the hands of a few while the American people lack sufficient jobs, health care, housing, retirement security.

Our energy policies take the wealth from the American people and put it into the hands of the oil companies. We could be looking at $150 a barrel for oil in the near future.

Our environmental policy takes the wealth of the people -- clean air, clean water -- and puts it in the hands of the polluters. It's a transfer of wealth, not only from the present but from future generations as our environment is ruined.

Insurance companies, what do they do? They take the wealth from the American people in terms of what they charge people for health insurance and they put it into the hands of the few.

We have to realize what this country's economy has become. Our monetary policy, through the Federal Reserve Act of 1913, privatized the money supply, gathers the wealth, puts it in the hands of the few while the Federal Reserve can create money out of nothing, give it to banks to park at the Fed while our small businesses are starving for capital.

Mark my words -- Wall Street cashes in whether we have a default or not. And the same type of thinking that created billions in bailouts for Wall Street and more than $1 trillion in giveaways by the Federal Reserve today leaves 26 million Americans either underemployed or unemployed. And nine out of ten Americans over the age of 65 are facing cuts in their Social Security in order to pay for a debt which grew from tax cuts for the rich and for endless wars.

There is a massive transfer of wealth from the American people to the hands of a few and it's going on right now as America's eyes are misdirected to the political theater of these histrionic debt negotiations, threats to shut down the government, and willingness to make the most Americans pay dearly for debts they did not create.

These are symptoms of a government which has lost its way, and they are a challenge to the legitimacy of the two-party system.

The Audacity of "Free Trade" Agreements

Friday, July 15, 2011 by Foreign Policy In Focus

by Laura Carlsen

 

Congress could vote any day now to strike a new blow against already-battered U.S. workers and the unemployed. 

Committees in the House and Senate recently marked up the Colombia, Panama, and South Korea Free Trade Agreements (FTAs). The Obama administration is urging passage of all three relics of the Bush administration before the summer recess.

The full-court press on the FTAs represents a reversal for a president elected on a trade reform platform. During the presidential campaign, Barack Obama proclaimed his opposition to the NAFTA-style FTAs and boasted of his stance against the devastating North American and Central American agreements. As candidate Obama, he carefully distanced himself from the open-market, pro-corporate policies of his predecessor, calling for significant changes to the NAFTA model, including enforceable labor and environmental standards, and consumer protections.

The Global Crisis
In the three years since Obama wooed voters with talk of bold changes in trade policy, the need for reforms has reached crisis proportions. The global economic crisis left the United States with skyrocketing un- and under-employment rates. The government paid billions of dollars in bailout money to the corporations who caused the crisis. These corporations then turned around to post record profits and hand out astronomical executive pay bonuses. The evidence that FTA-fueled outsourcing benefits those corporations while putting Americans out of work has piled up, and polls show that a majority of U.S. citizens oppose NAFTA-style FTAs.

Abroad, labor violations and increasing inequality have exacerbated the plight of poor and working people in FTA countries, while creating a new class of mega-rich that often control national economies.

This would seem to be precisely the moment to make good on the promises to fix trade and investment policy, and to give workers everywhere a fair shake in a globalized economy that has been severely skewed toward the interests of powerful corporations -- to devastating effect.

Instead, the Obama administration has gone from the audacity of hope to the audacity of presenting three pro-corporate trade agreements to a public suffering from a nearly 20% real unemployment rate. As United Steel Workers President Leo Gerard concludes in a letter to Congress opposing the trade agreements, “Trade deals force working Americans to assume all the risk and encourage big multinationals to reap all the rewards.”

NAFTA Look-alikes
The new agreements look nearly identical to the NAFTA model, despite some tweaks and promises of advances that are mostly left outside the actual text of the agreements. Some of the most noxious elements that persist in the FTAs before Congress are: prohibitions on financial sector regulation and capital controls, foreign investment incentives that encourage off-shoring, separate legal regimes in which corporations can sue governments in specialized tribunals, weak environmental standards, vague and toothless labor standards, and intellectual property rules that monopolize knowledge needed for the public good.

The Economic Policy Institute calculates that the South Korean FTA alone will cost 159,000 U.S. jobs. Department of Commerce data shows that over the past decade of free trade policy multinational corporations cut their U.S. workforce by 2.9 million and increased overseas employment by 2.4 million. Under these trade and investment regimes, U.S. workers clearly suffer, which is why voters have supported candidates critical of NAFTA-style free trade. Although job displacement is frequently viewed as a zero-sum system where workers of different nations compete, the reality is that decent jobs -- with dignified working conditions and real labor rights -- are lost everywhere. FTAs turn the world into a global labor bazaar for corporations to bargain-hunt.

Labor unions in the countries purportedly hungering for a U.S. FTA overwhelmingly oppose them. Colombian labor organizations have consistently taken a stand against the Colombia FTA, asserting that it creates binding terms between two vastly unequal economies; would negatively affect agriculture, manufacturing, medicines and other vital sectors; would generate few if any net jobs; and would place thousands of local businesses in jeopardy. A group of Korean unions, farmers, and civil society groups traveled to Washington last January to “prevent the negative consequences that the Korea-US FTA will have on both of our countries.”
Both groups have presented their testimony to the U.S. Congress, exploding another myth: that FTAs are a “reward” to be bestowed on deserving allies. Powerful economic interests in these nations – typically over-represented by their governments — have brought tremendous pressure to bear in favor of the agreements. Meanwhile, the poor, workers, small farmers, the displaced, and indigenous and ethnic organizations nearly unanimously oppose them.

Colombians Against the FTA
A letter to the U.S. Congress signed by 431 U.S. and Colombian organizations urges members to reject the U.S.-Colombia FTA, citing “serious labor, human rights, Afro-Colombian, indigenous, and environmental concerns in Colombia.” The letter points out that Colombia continues to be “the most dangerous country in the world for trade union activists” and cites a 94 percent impunity rate for assassins of labor leaders. Fifty-one trade unionists were killed in 2010, and killings continue unabated in 2011.

An Action Plan developed between the U.S. and Colombian governments to assuage concerns does not form part of the binding text of the agreement. At this stage, the plan amounts to good intentions without establishing a firm basis for collective bargaining for cooperative members, or clear benchmarks for reducing violence, abuses, and impunity.

Promoters have countered criticisms of the Colombian government’s labor practices by asserting that increased U.S. investment can serve as a positive force in upholding workers’ rights. This argument has not been borne out in practice. In Guatemala, unionist murders increased following passage of CAFTA. The logic is simple. With more powerful economic interests in the country competing in a globalized economy, companies too often view workers’ rights as economic liabilities.

The debate on the Colombian FTA has also ignored the need to assess the effects of increased foreign investment on the continued armed conflict in Colombia. NAFTA proved that FTAs have much more to do with revamping investment regimes for multinational corporations than with the exchange of goods and services.

These investments also direct money into paramilitaries involved in drug export, money-laundering, and other crimes. There is ample evidence of these shady relations in the past, most notably the recent case of Chiquita’s payoffs to paramilitary organizations as part of “doing business” in Colombia. Such investments, associated with huge agricultural projects and mining ventures, often go hand in hand with violence and displacement. A report on Inter-American Development Bank megaprojects by the Americas Program and the National Alliance of Latin American and Caribbean Communities showed the correlation between the expansion of palm oil mono-crops and forced displacement. At a recent prayer breakfast, Lisa Haugaard of the Latin American Working Group spoke of her experience gathering evidence of landowners expanding cattle ranching or mining operations at the point of a gun.

The many attacks on Afro-Colombian populations as part of this process led 24 members of Congress to write President Obama on July 6 stating, “We are concerned that the FTA would stimulate business development in Colombia at the expense of these vulnerable populations.” The congressional members also notes that an estimated 5.2 million people in the country are already displaced – more than one out of nine Colombians. .

Jobs First
The Colombia FTA provides the clearest case of why free trade in the context of inequity and violence not only does not help but exacerbates the problems. The question of whether Colombia “deserves” the FTA can be easily answered . No population deserves an international agreement that directly or indirectly promotes displacement, violence, targeted murder, and the continued violation of the rights of indigenous and Afro-American populations.
Labor, human rights, and faith-based organizations are pushing back hard against the FTA onslaught, and offer tools for citizens to make their voices heard over the din of corporate lobbies.

For Congress to turn a deaf ear to those at greatest risk and in greatest need — both in the United States, and in the countries affected by the toxic trio of FTAs now making the rounds — would contradict U.S. values and U.S. public opinion. Especially now, as the U.S. economy still struggles to regain its footing, the best way to rebuild stability is to learn from mistakes of the past and strive for greater equity. A necessary step is to reject the Colombia, South Korea, and Panama Free Trade Agreements.

The Rise of the Wrecking-Ball Right

Friday, July 15, 2011 by RobertReich.org
by Robert Reich

Recently I debated a conservative Republican who insisted the best way to revive the American economy was to shrink the size of government. When I asked him to explain his logic he said, simply, “government is the source of all our problems.” When I noted government spending had brought the economy out of the previous eight economic downturns, including the Great Depression, he disagreed. “The Depression ended because of World War Two,” he pronounced, as if government had played no part in it.

A few days later I was confronted by another conservative Republican who blamed the nation’s high unemployment rate on the availability of unemployment benefits. “If you pay someone not to work, they won’t,” he said. When I pointed out unemployment benefits couldn’t possibly be the cause of joblessness because there are now about five job seekers for every job opening, he scoffed. “Government always makes things worse.”

Government-haters seem to be everywhere.

Congressional Republicans, now led by House Majority Leader Eric Cantor, hate government so much they’re ready to sacrifice the full faith and credit of the United States in order to shrink it.

Taming the deficit isn’t their aim. They rejected Obama’s offer to cut $3 trillion of spending over the decade – including major reductions in entitlement programs – because his plan would also entail $1 trillion of tax increases. Their ultimate goal, in the words of their guru Grover Norquist, is to take government down to “the size where we can drown it in the bathtub.”

Where did this wrecking crew come from? And why do so many Americans seem to support them? To answer “the tea party” begs the question because the tea party itself is a product of this rage.

Credit the economic fears and insecurities now felt by a broad swathe of the public who want to find a villain for what they’re going through. Wall Street is too abstract and the financial games that brought on the Great Recession almost impossible for most Americans to grasp. But the government bailout of the Street was a specific act almost everyone could instinctively understand – and to most Americans it seemed perversely wrong.

It’s no coincidence that the emergence of the tea party coincided with the Wall Street bailout. An acquaintance who has embraced the tea party explained to me she hates government “because it’s always captured by the powerful, who take our taxes and eat our lunch.”

At the same time most of what government does that helps average people is now so deeply woven into the thread of daily life that it’s no longer recognizable as government. Think of the indignant voters who showed up at congressional town meetings to protest Obama’s health care bill shouting “don’t take away my Medicare!”

A recent paper by Cornell political scientist Suzanne Mettler surveyed how many recipients of government benefits don’t really believe they have received any benefits. She found that over 44% of Social Security recipients say they “have not used a government social program.” More than half of families receiving government-backed student loans said the same thing, as did 60% of those who get the home mortgage interest deduction, 43% of unemployment insurance beneficiaries, and almost 30% of recipients of Social Security Disability.

Add in the relentlessly snide government-hating and baiting of Fox News and Rush Limbaugh and his imitators on rage radio; include more than thirty years of Ronald Reagan’s repeated refrain that government is the problem; pile on hundreds of millions of dollars from the likes of oil tycoons Charles and David Koch intent on convincing the public that government is evil, and you have all the ingredients for the emergence of a wrecking-ball right that’s intent on destroying government as we know it.

The final critical ingredient has been the abject failure of the Democratic Party – from the President on down – to make the case for why government is necessary.

One would have thought the last few years of mine disasters, exploding oil rigs, nuclear meltdowns, malfeasance on Wall Street, wildly-escalating costs of health insurance, rip-roaring CEO pay, and mass layoffs would have offered a singular opportunity to explain why the nation’s collective well-being requires a strong and effective government representing the interests of average people.

Yet the case has not been made. Perhaps that’s because, even under the Democrats, the interests of average people have not been sufficiently attended to.

Why Americans Can't Afford to Eat Healthy

Friday, July 15, 2011 by Salon.com
The real reason Big Macs are cheaper than more nutritious alternatives? Government subsidies
by David Sirota

The easiest way to explain Gallup's discovery that millions of Americans are eating fewer fruits and vegetables than they ate last year is to simply crack a snarky joke about Whole Foods really being "Whole Paycheck." Rooted in the old limousine liberal iconography, the quip conjures the notion that only Birkenstock-wearing trust-funders can afford to eat right in tough times.

It seems a tidy explanation for a disturbing trend, implying that healthy food is inherently more expensive, and thus can only be for wealthy Endive Elitists when the economy falters. But if the talking point's carefully crafted mix of faux populism and oversimplification seems a bit facile -- if the glib explanation seems almost too perfectly sculpted for your local right-wing radio blowhard -- that's because it dishonestly omits the most important part of the story. The part about how healthy food could easily be more affordable for everyone right now, if not for those ultimate elitists: agribusiness CEOs, their lobbyists and the politicians they own.

As with most issues in this new Gilded Age, the tale of the American diet is a story of the worst form of corporatism -- the kind whereby the government uses public monies to protect private profit.

In this chapter of that larger tragicomedy, lawmakers whose campaigns are underwritten by agribusinesses have used billions of taxpayer dollars to subsidize those agribusinesses' specific commodities (corn, soybeans, wheat, etc.) that are the key ingredients of unhealthy food. Not surprisingly, the subsidies have manufactured a price inequality that helps junk food undersell nutritious-but-unsubsidized foodstuffs like fruits and vegetables. The end result is that recession-battered consumers are increasingly forced by economic circumstance to "choose" the lower-priced junk food that their taxes support.

Corn -- which is processed into the junk-food staple corn syrup and which feeds the livestock that produce meat -- exemplifies the scheme.

"Over the past decade, the federal government has poured more than $50 billion into the corn industry, keeping prices for the crop ... artificially low," reports Time magazine. "That's why McDonald's can sell you a Big Mac, fries and a Coke for around $5 -- a bargain."

Yes, it is a bargain, but one created by deliberate government policy that serves the corn industry titans, not by any genetic advantage that makes corn derivatives automatically more affordable for the budget-strapped commoner.

The aggregate effect of such market manipulation across the agriculture industry, notes Time, is "that a dollar [can] buy 1,200 calories of potato chips or 875 calories of soda but just 250 calories of vegetables or 170 calories of fresh fruit."

So while it may be amusing to use Americans' worsening recession-era diet as another excuse to promote cultural stereotypes, the nutrition crisis costing us billions in unnecessary healthcare costs is more about public policy and powerful special interests than it is about epicurean snobs and affluent tastes. Indeed, this is a problem not of individual proclivities or of agricultural biology that supposedly makes nutrition naturally unaffordable -- it is a problem of rigged economics and corrupt policymaking.

Solving the crisis, then, requires everything from recalibrating our subsidies to halting the low-income school lunch program's support for the pizza and French fry lobby (yes, they have a powerful lobby). It requires, in other words, a new level of maturity, a better appreciation for the nuanced politics of food and a commitment to changing those politics for the future.

Impossible? Hardly. A country that can engineer the seemingly unattainable economics of a $5 McDonald's feast certainly has the capacity to produce a healthy meal for the same price. It's just a matter of will -- or won't.

Greed, Excess and America's Gaping Class Divide

Thursday, July 14, 2011 by Rolling Stone

by Matt Taibbi

 

Courtesy of good friend and Supreme Court of Assholedom justice David Sirota comes this revolting list of Marie Antoinette-oid moments from recent years, in an article called "The New 'Let Them Eat Cake!'"

Some of the moments on the list are easily recalled – Berkshire Hathaway gazillionaire Charlie Munger's famous "suck it up and cope" quote, coming from a guy whose company was heavily invested in bailed-out banks, was an obvious inclusion – but others are quite shocking.
For instance, I was completely floored by the New York Times' pseudo-ironic take on the government's response to the financial crisis, a piece entitled "You Try to Live on $500K in This Town." 

This came at a time when President Obama was considering curtailing compensation for bailed-out bankers at $500,000. The piece was sort of meant to be taken half as a joke, but it is not hard to detect an element of demented earnestness in the fashion section article, an honest argument that with mortgages and private school tuition and co-op fees and taxes, it really was very hard for a certain kind of New Yorker to get by on half a million a year.

The proposed salary cap -- remember, this cap was only going to be for banks that had fucked up badly enough to need a federal bailout -- became the cassus belli for a propaganda war launched from the general direction of Wall Street, where the notion that the government should restrict the salaries of exactly the irresponsible greedheads who caused a global financial crisis was met with blunt outrage.

Sirota's list highlights another bizarre aspect of the $500k story. During the debate over the proposed cap, one of the things we started to hear from the Antoinette class was a general sense of wonder at the notion that anyone considered them rich. It turns out that a great many of the people who make big six-figure incomes consider themselves middle class. A University of Chicago professor arguing against the repeal of the Bush tax cuts made waves by saying he was "just getting by" with his $250,000 income, while ABC's Charlie Gibson and CNN reporter Kiran Chetry in recent years suggested that $200-$250,000 is middle class (Chetry's exact quote was that "in some parts of the country," $250K "is middle class").

All of this is a testament to the amazing (and rapidly expanding) cultural divide that exists in this country, where the poor and the rich seldom cross paths at all, and the rich, in particular, simply have no concept what being broke and poor really means. It is true that if you make $300,000 in America, you won't feel like you're so very rich once you get finished paying your taxes, your mortgage, your medical bills and so on.

For this reason, a lot of people who make that kind of money believe they are the modern middle class: house in the burbs, a car, a kid in college, a trip to Europe once a year, what's the big deal? They'd be right, were it not for the relative comparison -- for the fact that out there, in that thin little ithsmus between the Upper East Side and Beverly Hills, things are so fucked that public school teachers and garbagemen making $60k with benefits are being targeted with pitchfork-bearing mobs as paragons of greed and excess. Wealth, in places outside Manhattan, southern California, northern Virginia and a few other locales, is rapidly becoming defined as belonging to anyone who has any form of job security at all. Any kind of retirement plan, or better-than-minimum health coverage, is also increasingly looked at as an upper-class affectation.

That the Tea Party and their Republican allies in congress have so successfully made government workers with their New Deal benefits out to be the kulak class of modern America says a lot about the unique brand of two-way class blindness we have in this country. It's not just that the rich don't know the poor exist, and genuinely think a half a million a year is "not a lot of money," as one "compensation consultant" told the New York Times after the crash.

It also works the other way -- the poor have no idea what real rich people are like. They apparently never see them, which is why the political champions of middle America are at this very minute campaigning in congress to extract more revenue from elderly retirees and broke-ass students while simultaneously fighting to preserve a slew of tax loopholes for the rich, including the carried-interest tax break that allows hedge fund billionaires to pay about half the tax rate of most Americans.

This is also going on because both parties are betraying the desires of the actual voters, who by and large actually do favor taxing the wealthy (they favor it intellectually anyway, when asked by pollsters). But we don't see mobs on the street demanding Stevie Cohen and John Paulson and George Soros give up their special 15% tax rate, because no actual people have ever seen Stevie Cohen, John Paulson or George Soros in the wild.

To most people, the undeserving rich guy is the ex-police lieutenant down the street who's been collecting a six-figure pension for years after spending two decades writing traffic tickets before retiring at 43. Seeing that guy lounging in the dugout pool you paid for with your constantly rising property taxes is enough to piss anyone off, which is why it's not hard to understand where a lot of that Tea Party anger is coming from.

But if you want to see a real asshole, you have to somehow get invited to things like the $5 million birthday party of another guy on Sirota's list, private equity creep Steven Schwarzman. After throwing his elaborate fete for himself, Schwarzman -- who is said to make $400 million a year, and made $600 million when his company went public -- compared Barack Obama to Hitler for even considering rolling back his carried-interest exemption, which, again, allows him to pay 15% taxes while some of the rest of us pay twice that or more. "It's a war," he said. "It's like when Hitler invaded Poland."

If you think your local Andy Griffith is a greedy pig because he retired in his forties and built an addition to his garage with your tax money, try hanging out with a guy who eats $400 crabs, throws himself $5 million parties where he is serenaded by Rod Stewart and Patti Labelle (who sang "Happy Birthday"), and then compares the president to Hitler when word leaks out that he might have to pay taxes at the same rate as a firefighter or a kindergarten teacher.

But America never gets to meet that guy, because all of those parties are invite-only, and the only reporters that go tend to do so with knee pads on -- like the extraordinary Andrew Ross Sorkin, who as Sirota notes, predictably wrote a slurpilicious "In Defense of Schwarzman" piece after the event (his thesis, to the extent that I could make it out, seemed to be that there are even bigger assholes than Schwarzman). As a result, the popular outrage gets steered toward state employees greedily living off their own pensions, not toward the truly deserving targets hiding in the Hamptons and Gstaad and St. Tropez.

Anyway, definitely advise checking out David's piece. You'll be grinding your teeth by the time you finish. (part of it is below)

***************

Pleading Poverty at $500,000 a Year

 

As Mother Jones has reported, the average American family in the bottom 90 percent of income earners makes just $31,244 a year -- and, to reiterate, that's the average, meaning many make far less. Similarly, the median net worth of American families is a mere $120,000 -- and remember, "net worth" means the sum value of all of a family's assets liquid or otherwise, from income to home to car to furniture to the kids' dirty undies.

So when you see a newspaper article during the recession about how difficult it is to live on far more than the average American's income, you can be forgiven for thinking you are reading either (a) the Onion, (b) the in-house newsletter of 18th-century Versailles or (c) an old clip of NBA guard Latrell Sprewell infamously saying a $7-million-a-year contract was an insult because "I have a family to feed." But in 2009 two such articles appeared in a pair of our nation's supposed journalistic beacons.

The Washington Post's article headlined "Squeaking By on $300,000" was absurd enough, but a Sunday Styles piece in the New York Times took that cheeky, gee-whiz journalism a step further. Daring readers to attempt the supposed hardships of affluence, the piece was titled "You Try to Live on 500K in This Town." (The story naturally fails to mention that the city's median household income is about $38,000 a year, meaning that most New Yorkers take the headline's challenge on a yearly basis.) Instead, it reported on a proposal to limit bailed-out bank salaries to a half million dollars a year, and then proceeded to try to cheekily illustrate how impossible that would be in the Big Apple.

According to the Times' "cold hard math," this is virtually untenable given expenses that include $32,000-a-kid private school bills, $96,000-a-year mortgages, $96,000-a-year co-op maintenance fees, $45,000-a-year nanny tabs, and, of course, the undebatable requirement that very rich people take "at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes." And mind you, the Times was quick to inform us, this doesn't even include other "prerequisites" to living in New York City like "restaurants, dry cleaning... kennels for the dog when the family is away, summer camp, spas and other grooming" and $1,000 suits from Brooks Brothers.

ALEC Exposed: How Corporations Are Taking Over Our Democracy

Thursday, July 14, 2011 by The Progressive
by Ruth Conniff

Today the Center for Media and Democracy rolled out a new web site, ALEC Exposed, based on a massive leak of information from the American Legislative Exchange Council, the powerful coalition of corporations, right-wing foundations, and state legislators who have been literally writing the laws at the state level to push their pro-business, anti- democracy agenda.

For many years, big corporations, including Kraft, Pfizer, WalMart, and AT&T, to name a few, have been paying hefty dues to belong to a group that gives them access to state legislators. The legislators, for a much smaller fee, get to attend annual conferences, receive briefings from ALEC, and get the honor of putting their names on boilerplate legislation the groups drafts.

One of the many new pieces of information to emerge from the impressive ALEC Exposed project is that the corporate members of this group vote these bills out of their own, corporate committees before passing them on to their pet legislators.

"We've discovered through a whistleblower that these corporations actually vote on these bills behind closed doors, before legislators or the people they represent even hear about them," Lisa Graves, the director of the Center for Media and Democracy said today.

If you live in a state like Wisconsin, the results of this coordinated assault on democracy are all too evident.

Much of the group's legislation--privatizing the public schools, taking away collective bargaining rights, loosening environmental regulation, even suppressing the vote--got a huge boost when ALEC foot soldiers, including Governor Scott Walker and the heads of both of Wisconsin's legislative chambers, took power. The group's hard work and careful planning for just such an opportunity over the last two decades accounts for the head-spinning all-fronts attack ordinary citizens are currently enduring in Wisconsin.

State representative (and Progressive magazine blogger) Mark Pocan went "behind enemy lines" to write a piece about attending an ALEC conference for The Progressive Magazine back in March 2008, in a darkly comic piece titled "Through the Corporate Looking Glass".

That piece is more relevant--and less funny--now that ALEC has become even more powerful.

A big controversy erupted when Professor William Cronon at the University of Wisconsin-Madison, blogged about ALEC's corporate takeover of the state and became the target of Republican attacks and had his emails seized by Governor Scott Walker's administration.

Walker and Co. will be even less pleased when they see ALEC Exposed.

The site, which posts and analyzes more than 800 bills produced by ALEC, is a treasure trove of information, including never-released text of the actual ALEC bills broken down and organized by topic, information about the corporate membership of ALEC's task forces on particular issues, the names of ALEC's state chairmen, and the effects of the bills: on working people, schools, the environment, consumer rights, and our democracy.

"We know that we are standing on the shoulders of some tremendous investigative work," Lisa Graves said in a press conference on the roll-out, "But we believe this is a special contribution."

Reporters and citizens can now look at bills that were introduced in their states under the names of their elected officials, and trace the actual, corporate origins of these profoundly anti-democratic efforts.

"We know, for example, that Kraft has been the head of the task force for ALEC responsible for anti-union bills," Graves said.

On the schools issue, which I wrote about in a Progressive cover story a couple of months ago, it turns out that Connections Academy, the company that runs Wisconsin's virtual charter schools, which are poised to displace bricks-and-mortar public schools throughout the rural parts of the state under a Republican proposal, is the head of ALEC's task force on education.

The Center for Media and Democracy deserves a lot of credit for this tremendous addition to our understanding of what is happening to our states. Now, as ALEC Exposed puts it, it's up to us to dig in and spread the word.

Pentagon Declares the Internet a Domain of War

Thursday, July 14, 2011 by The Hill (Washington, DC)
by John T. Bennett

The Pentagon released a long-promised cybersecurity plan Thursday that declares the Internet a domain of war.

The plan notably does not spell out how the U.S. military would use the Web for offensive strikes.

The Defense Department’s first-ever plan for cyberspace calls on the DoD to expand its ability to thwart attacks from other nations and groups, beef up its cyber workforce and expand collaboration with the private sector.

Like major corporations and the rest of the federal government, the military “depends on cyberspace to function,” the DoD plan says. The U.S. military uses cyberspace for everything from carrying out military operations to sharing intelligence data internally to managing personnel.

“The department and the nation have vulnerabilities in cyberspace,” the document states. “Our reliance on cyberspace stands in stark contrast to the inadequacy of our cybersecurity.”

Other nations “are working to exploit DoD unclassified and classified networks, and some foreign intelligence organizations have already acquired the capacity to disrupt elements of DoD’s information infrastructure,” the plan states. “Moreover, non-state actors increasingly threaten to penetrate and disrupt DoD networks and systems.”

Groups are capable of this largely because “small-scale technologies” that have “an impact disproportionate to their size” are relatively inexpensive and readily available.

The Pentagon plans to focus heavily on three areas under the new strategy: the theft or exploitation of data; attempts to deny or disrupt access to U.S. military networks; and any attempts to “destroy or degrade networks or connected systems.”

One problem highlighted in the strategy is a baked-in threat: “The majority of information technology products used in the United States are manufactured and assembled overseas.”

DoD laid out a multi-pronged approach to address those issues.

As foreshadowed by Pentagon officials’ comments in recent years, the plan etches in stone that cyberspace is now an “operational domain” for the military, just as land, air, sea and space have been for decades.

“This allows DOD to organize, train and equip for cyberspace” as in those other areas, the plan states. It also noting the 2010 establishment of U.S. Cyber Command to oversee all DOD work in the cyber realm.

The second leg of the plan is to employ new defensive ways of operating in cyberspace, first by enhancing the DoD’s “cyber hygiene.” That term covers ensuring data on military networks remains secure, using the Internet wisely, and designing systems and networks to guard against cyber strikes.

The military will continue its “active cyber defense” approach of “using sensors, software, and intelligence to detect and stop malicious activity before it can affect DOD networks and systems.” It also will look for new “approaches and paradigms” that will include “development and integration … of mobile media and secure cloud computing.”

The plan underscores efforts long underway at the Pentagon to work with other government agencies and the private sector. It also says the Pentagon will continue strong cyber R&D spending, even in a time of declining national security budgets.

Notably, it calls the Department of Homeland Security the lead for “interagency efforts to identify and mitigate cyber vulnerabilities in the nation’s critical infrastructure.” Some experts have warned against DOD overstepping on domestic cyber matters.

The Pentagon also announced a new pilot program with industry designed to encourage companies to “voluntarily [opt] into increased sharing of information about malicious or unauthorized cyber activity.”

The strategy calls for a larger DoD cyber workforce.

One challenge, Pentagon experts say, will be attracting top IT talent because the private sector can pay much larger salaries — especially in times of shrinking Defense budgets. To that end, “DOD will focus on the establishment of dynamic programs to attract talent early,” the plan states.

On IT acquisition, the plan lays out several changes, including: faster delivery of systems; moving to incremental development and upgrading instead of waiting to buy “large, complex systems”; and improved security measures.

Finally, the strategy states an intention to work more closely with “small- and medium-sized business” and “entrepreneurs in Silicon Valley and other U.S. technology innovation hubs.”

How the US Govt Uses Its Corporate Media Servants to Attack Real Journalism

Friday, July 15, 2011 by Salon.com

by Glenn Greenwald

"The US has stopped running its global network of secret prisons, CIA director Leon Panetta has announced. 'CIA no longer operates detention facilities or black sites,' Mr Panetta said in a letter to staff" - BBC, April 9, 2009

Earlier this week, the truly intrepid investigative journalist Jeremy Scahill published in The Nation one of the most significant political exposés of the year.  Entitled "the CIA's Secret Sites in Somalia," the article documented that the CIA uses and effectively controls a secret prison in Mogadishu, where foreign nationals who are rendered off the streets of their countries (at the direction of the U.S.) are taken (along with Somali nationals) to be imprisoned with no due process and interrogated (by U.S. agents).  Although Somali government agents technically operate the facility, that is an obvious ruse: "US intelligence personnel pay the salaries of intelligence agents and also directly interrogate prisoners" and are "there full-time," Scahill reported.  On Democracy Now on Wednesday, the International Committee of the Red Cross confirmed it has no knowledge of this secret prison.

This arrangement, as Scahill told me yesterday, is consistent with standard Obama administration practice: "they continue even the most controversial Bush terrorism policies by having some other government technically operate it so they can keep their fingerprints off it."  Indeed, the administration has even resorted to this playbook by using "torture by proxy" -- as we saw when the Kuwait government, with at least the complicity if not direction of the U.S., detained and beat American teenager Gulet Mohamed during interrogation sessions.  Just yesterday, a federal judge "reacted skeptically" to the Obama DOJ's demands for dismissal of a lawsuit (on secrecy grounds) brought by an American citizen imprisoned for four months in Africa, where "U.S. officials threatened him with torture, forced disappearance and other serious harm unless he confessed to ties with al-Qaida in Somalia."

Scahill's discovery of this secret prison in Mogadishu -- this black site -- calls into serious doubt the Obama administration's claims to have ended such practices and establishes a serious human rights violation on its own.  As Harper's Scott Horton put it, the Nation article underscores how the CIA is "maintaining a series of 'special relationships' under which cooperating governments maintain proxy prisons for the CIA," and "raises important questions" about "whether the CIA is using a proxy regime there to skirt Obama's executive order" banning black sites and torture.

Despite the significance of this revelation -- or, more accurately, because of it -- the U.S. establishment media has almost entirely ignored this story.  Scahill thus far has given a grand total of two television interviews: on Democracy Now and Al Jazeera.  No major television news network -- including MSNBC -- has even mentioned his story.  Generally speaking, Republicans don't care that the worst abuses of the Bush era are continuing, and Democrats (who widely celebrated Dana Priest's 2006 Pulitzer Prize winning story about Bush's CIA black cites) don't want to hear that it's true.

Meanwhile, the CIA has been insisting that discussion of this Mogadishu site could jeopardize its operations in Somalia, and while that typical, manipulative tactic didn't stop Scahill from informing the citizenry about this illicit behavior, it has (as usual) led government-subservient American media stars to refrain from discussing it.  Indeed, Scahill said that this site is such common knowledge in Mogadishu (where even ordinary residents call it "that CIA building") that he'd be "very surprised" if international reporters who cover Somalia were unaware of it; he has confirmed with certainty that at least one correspondent covering East Africa for one of the world's leading media outlets was aware of, but never reported, the CIA's role at this secret prison.

While the establishment media has been largely ignoring Scahill's revelations, a few particularly government-pleasing journalists have been dutifully following the CIA's script in order to undermine the credibility of Scahill's story.  CNN's long-time Pentagon correspondent Barbara Starr -- one of the most reliable DoD stenographers in the nation (she actually announced that the real Abu Ghraib scandal was the unauthorized release of the photographs, not the abuse they depicted) -- has been predictably tapped by the CIA to take the lead in this effort.  Earlier this week, Starr filed a truly incredible report -- based exclusively on a "U.S. official" to whom she naturally granted anonymity -- that had no purpose other than to refute Scahill's report even though Starr never once mentioned that report:

CIA operatives have secretly traveled to Mogadishu, Somalia, to help interrogate terrorism suspects about operations in East Africa and Yemen, a senior U.S. official told CNN Tuesday.

The official, who was not authorized to speak publicly, stressed any suspects were under the control of Somali forces and the CIA was present only in "support" of interrogations in recent months. He described the number of times the CIA was present as "very small," adding that he would only say it was "one or two times."

"Only on very rare occasion does the CIA support debriefings of suspected terrorists who are in TFG (Transitional Federal Government) custody," the official told CNN.

Starr pretended that this was a headline-making scoop for CNN -- that a CIA official had bravely revealed some sort of unauthorized secret to her: that the CIA "helps" interrogate a "very small" number of Terrorism suspects in Somalia in a "support" role -- when it was plainly nothing more than an effort to undermine Scahill's report by claiming that the CIA's role was extremely limited (nothing more than a little help given to the Somalis) and that it was Somalia that controlled, ran and maintained responsibility for the prison.  Not only did Starr never mention the key facts -- that this prison is kept secret from the ICRC and imprisons detainees without due process who are rendered from other nations at the behest of the U.S. and that the CIA pays the agents there -- but she also helpfully wrote down that "the CIA gets assurances from the [Somali government] that detainees will not be mistreated," and then added that the real significance of the story is that it "underscores the growing U.S. concern about the rise of terrorist networks in the region."

In sum, Starr was handed a CIA press release that falsely denied the key elements of Scahill's story, which she then disguised as an anonymous unauthorized leak that she uncovered.  She slothfully and obediently disseminated CIA claims designed to minimize its role in this prison without lifting a finger to resolve the differences between those denials and the numerous facts Scahill uncovered which proved how extensive the CIA's control of the prison (and the rendition program that fills it) actually is.

It's not just lazy but deceitful: uncritically printing anonymous government denials while dressing it up as her own discovery (once Nation representatives complained to CNN, she tacked on this sentence at the end: "Parts of the story initially appeared in the magazine The Nation on Tuesday").  Whether it was Starr who contacted the CIA to obtain this "story" (unlikely) or the CIA which tapped Starr on the head and directed her to print this and she then dutifully complied (far more likely), this was a joint effort by the U.S. Government and its CNN servant to undermine Scahill and his story while appearing not to do so.

Serving the same purpose was this ABC News report by Luis Martinez, which at least has the virtue of being more honest than Starr's report:  ABC doesn't pretend to do anything other than serve as obedient stenographer to the CIA by uncritically writing down and passing on the statements of an anonymous Government official in denying Scahill's report.  Leaving aside the slovenly practice of granting anonymity to government officials to do nothing other than issue official government claims -- so common a tactic of journalistic malpractice as to not merit comment at this point -- the article does nothing other than print the same CIA claims without expending a molecule of energy to determine if the claims are true.

Worse, ABC allows the CIA to depict Scahill's report as false by uncritically printing the blatant strawmen against which the CIA rails ("CIA Doesn’t Run Secret Prison in Somalia" . . . CIA "refutes a report that the agency runs a secret prison in that unstable country" . . . "A story published in The Nation said that the CIA was running a secret prison to house and interrogate terror suspects").  The whole point of Scahill's article is that while the Somalis exercise nominal control over the prison, that's merely a "plausible deniability" ruse to allow the U.S. to use it at will, as evidenced by the fact that the CIA pays those agents and is continuously present.  The "denials" uncritically printed by ABC confirm and bolster Scahill's story, not "refute" it.

Worse still, the ABC report justifies the CIA program by quoting the anonymous CIA official as describing the program as "the logical and prudent thing to do."  ABC then helpfully adds that "senior U.S. officials have expressed concern that al Shabab may be trying to expand its terror operations beyond Somalia" and that " U.S. government officials worry that those lawless regions might become a safe haven for al Shabab and other terror groups."  There is no discussion -- zero -- of the illegal aspects of maintaining a secret prison, the dangers of allowing unchecked renditions of prisoners to Somalia hidden from international human rights monitoring, or the likely violations of Obama's highly-touted Executive Orders.  Like Starr's CNN report, this article is nothing more than a CIA Press Release masquerading as an ABC News "news article," the by-product of a joint effort by the CIA and another establishment news outlet to make Scahill's report look erroneous, sloppy and irrelevant.

Just consider what happened here.  Scahill uncovered this secret prison because he went to Mogadishu -- dangerously unembedded, as very few journalists are willing to do -- and spent 9 days there aggressively digging around.  By contrast, Starr published her report by being handed a CIA script which she blindly read from without any other work, and ABC's Martinez then did the same.  But it's CNN and ABC that are considered -- by themselves and establishment D.C. mavens -- to be the Serious Journalists, while Scahill's report is heard only on Democracy Now and Al Jazeera.  That's because "Serious Journalism" in Washington means writing down what government officials tell you to say, and granting them anonymity to ensure they have no accountability.

Through this method, the U.S. Government need not directly attack real journalists.  They simply activate their journalistic servants to do it for them, and those servants then dutifully comply, this ensuring that they will continue to be chosen as vessels for future official messages.

Debt Roulette

The Big Rollback
 By MICHAEL BRENNER

Washington is hyper-ventilating at the prospect of a failure to meet the deadline for raising the national debt limit. Technically speaking, that indeed would create a grave situation with immeasurable consequences. For the United States will have no legal authority to pay its bills – including the interest on its trillions of debt. A large portion of that debt is in the form of Treasury securities and is held by foreign governments, most notably China and Japan. The commonly held view is that this dire state of affairs is due to partisan party conflict with both Democrats and Republicans holding the national interest hostage to their own selfish interests. This depiction of things, which is purveyed by all the media, has been reinforced even by President Obama who, for his own personal political reasons in posing as the intrepid defender of the national welfare who stands above the squabbling politicians on both sides. The White House imprimatur notwithstanding, this is a false representation of what is happening.

The grim truth is that one political party (and only one) – the Republican – has broken with the ethic of responsibility that until now has governed thinking and behavior on the public debt. The Federal government's obligation to meet its financial obligations to honor debt never before has been questioned. The notion that some partisan faction should threaten the solvency of the United States by blocking technical requirements unless its parochial aims were accepted did not enter the mind of legislators.

Times have changed. The radical reactionaries who now control the Republican Party (e.g. Eric Cantor) are threatening in effect to bring down the financial structure of the United States. They insist that their agenda of drastic measures to return the American economy, and large swaths of social policy too, to the postulated heyday of the 1920s be enacted. Remarkably, they have succeeded in getting the country to see this reckless ploy in terms of a contest between the two parties rather than as the Republicans playing fast and loose with America's health and well-being. Moreover, they have intimidated the Democrats in Congress into a reticence that permits the Republicans to get away with this historic and unprecedented power grab. (reason #987 why I am not a Democrat...or Republican--jef)

As for President Obama, he has played along insofar as he has declined to condemn in stark terms the Republican blackmail - or even state what their reckless game is. Instead, he has bought the formulation that the crisis is all about budget deficits and the needs for long-term spending cuts. This makes no sense politically or in terms of economic policy since it is a guaranteed formula for ensuring a decade at least of economic anemia. Above all, it absolves the Republicans of accountability for their unconscionable conduct. It seems that Obama's overriding consideration is that this spin strategy will improve his chances for reelection. Whether that appraisal is correct or not, it does not auger well for the health of the Republic. He only benefit so long as most voters remain ignorant of the dismaying truth that they are being taken for a ride.

For Mr. Obama already has agreed to sacrifice Social Security, Medicare and Medicaid. He has done so on specious financial grounds. Those dedicated trust funds are not in deficit; they do not contribute one dollar to the current deficits. Quite the contrary. The accounting device (legal) built into the federal budget numbers consolidates the standard budget, which draws its revenues from the IRS and makes expenditures through legislative appropriations, with those first two trust funds. The latter are financed by the FICA withholdings and make automatic payments according to stipulated formulas. They receive more than they expend. When that flow begins to reverse, there will still be a surplus in the Social Security Trust Fund to last until 2040 – even without modest adjustments like raising the earnings ceiling for FICA withholdings. But the siphoning of monies from the trust funds to the standard budget also will reverse itself.

The way the dodge has worked is that money taken from the Social Security and Medicare Trust Funds is replaced by Treasury IOUs. Since we have a consolidated budget, the numbers we see about deficits are misstated since they do not register those borrowings and IOUs as expenditures. They implicitly suppose that we'll never have to make good on them. The budget in fact is not truly consolidated since those Trust Funds have a separate legal and financial standing from tax revenues and expenditures. The hope of our politicos is that we never will have to honor the IOUs if we can keep claims for Social Security and Medicare at an artificially low level and thereby access only the funds remaining after we SUBTRACT the IOUs. That's the story behind the scare campaign that the Trust Funds are insolvent. The SS Trust fund is solvent and will remain so for decades beyond that if we simply made marginal changes. Medicare is in more trouble due to spiraling medical costs about which the Obama legislation did nothing. By raising retirement ages, by doing away with the COLA increase, and by simply reducing benefits (as many states are doing on the pensions owed public workers), the Treasury may never have to honor its IOUs. The money then is available for Afghanistan or whatever other pastime tickles our politicians' fancy - while more elderly Americans may make their sacrifice for the cause of freedom by adding dog food to their staple diet.

The attack on these programs, therefore, is inspired by a combination of a reactionary, and regressive, social ideology and the imperative the uncomfortable accounting fact that the standard budget immediately will balloon as soon as the IOUs placed in the Trust funds begin to be redeemed. So long as we maintain the nominal consolidated budget as our fiscal point of reference, the 'IOU' transfers are treated as if the Treasury is transferring bonds to itself. In fact, when we separate the two budgets - revenue/expenditure and Trust funds – we must recalibrate the budget so as to account for those bonds as expenditures. Then, the funds' surpluses no longer mask the full discrepancy between government revenues and expenditures with the corollary need that taxes on the rich absolutely must go back to 2000 levels. That is the game our masters have been playing. By cutting Social Security and other dedicated programs, the surplus in those trust funds can continue to be diverted to other purposes. This is massive deceit even if it is not legally fraud.


American wage earners have been played for fools and now are becoming the victims of a swindle – by President Obama, by Congress, by our political class, by the corporate mainstream media, by Washington's policy intellectuals who all have observed omerta about these goings-on. That is a harsh judgment - one that conforms to our sad reality, though.

So debt roulette not only plays fast and loose with the solvency of the United States; it also has coerced the country into silent acquiescence in the rollback of the greatest accomplishment of the 20th century.

Why I Hate Texas

(Here is the Texas model put succinctly: high tech well paying jobs shipped overseas to lower wage countries and replaced by minimum wage jobs (which is why McDonalds is responsible for 1 of every 4 new hires currently). Job creation should not be about quantity (total number of jobs), but about quality (well paying jobs)--creating low wage jobs is not going to get us out of this depression.--jef)
 

The Race to Rock Bottom
By JACK RANDOM

"If you care about putting people back to work when nearly 14 million are unemployed, maybe Texas has something to teach us."
Rick Wartzman, LA Times 7/3/11

The same economic geniuses that gave us the Great Recession and nearly crashed the global economy are back with a vengeance and a new message: We ought to be following the Texas model of job creation.

Those of us who have memories longer than an Alzheimers patient will recall that these are the same chefs who cooked up the deadly brew of Free Trade, deregulation, evisceration of anti-trust laws and unlimited corporate power. To everyone on the working end of the economic strata it was an unmitigated catastrophe and one that may haunt us for decades. But to those whose idea of labor is handing down dictums from the executive suite it all worked out fine. We paid the bill and they got multi-million dollar bonuses.

Those of us with memories longer than a crack addict will also recall the last time the nation adopted the Texas model: based on a fictional success derived from skewed data, the country was saddled with No Child Left Behind.

To everyone engaged in public education NCLB is a disaster on par with Free Trade economic policies but to those who created and promoted it as reasonable reform it is working as designed: As it destroys public education it opens the door to privatization.

As it is with education so it is with Texas economics.

The crux of the current argument is that in these difficult times Texas is the national leader in job creation. The argument is as flawed as a high school engineering project. On the global scale, China and India are the leaders in job creation. Should we adopt the Chinese model?

The reasons jobs are migrating to Texas, Mississippi and North Dakota are the same reasons American jobs are moving to India: Low wages, minimal health and retirement benefits, an unregulated working environment and a virtual prohibition of unions.

Texas is among twenty-two Right to Work states and according to the US Bureau of Labor a disproportionate fifteen of those states are among the top twenty-five in job creation over the last decade. The exceptions to the rule are the rust belt states that continue to hemorrhage jobs regardless of Right to Work status.

For the uninitiated Right to Work is the most effective legislative means of union busting ever invented. In a Right to Work state no worker can be required to join a union, pay union dues or pay an equivalent amount to charity. Because unions depend on worker unity in negotiations with management, Right to Work laws have a crippling effect. Since it would be discriminatory and therefore illegal to pay some workers a different wage than others, under the mandates of Right to Work, a non-union worker is allowed to freeload on the backs of union workers. When a union engages in collective bargaining, all workers benefit. If a union goes out on strike, non-union workers can break the strike and scabs can be hired without consequence beyond the individual conscience. The union is rendered powerless and therefore less able to attract new members.

Just as non-union workers benefit at a cost to union workers, Right to Work states are empowered to steal jobs from states that honor the Rights of Labor (including the Right to Organize in the workplace) by offering lower costs to corporate employers.

Ultimately, Right to Work as public policy is a zero sum gain. If all states followed the Texas model, job creation would be spread evenly but there would be no net increase in jobs. It would however unleash a race to the bottom as organized labor ceased to exist and jobs would offer ever lower wages and benefits.

Like a serpent that discovers its tail and consumes itself, the Texas model on a national scale would end catastrophically because the already dying middle class would be dead and buried and consumption of unnecessary goods would shrivel like a raisin in the sun. Our consumer-based economy would inevitably collapse.

Do we really want to become a nation where corporate treasures are built on the backs of cheap labor?

This is a classic case of pound-foolish and penny-wise. It is the age-old strategy of dividing workers against themselves. It is Starve the Beast in its most cynical form.

The difficulty with economic issues is that the language required to explain them is so convoluted it becomes incomprehensible. It is like the variable rate home mortgage loan with a bubble payment that no one would sign if it were properly explained.

It should be sufficient to say that these Texas model pimps are the same folks who screwed us out of our homes. These are the same brain trusts that shipped our well-paid jobs overseas and replaced them with minimum wage labor. These are the same folks who gave us mass foreclosures and rendered our properties less than worthless for their own gain. These are the same people that crushed the American Dream and replaced it with a nightmare of debt, default and depression.

Now they want to finish the job and Texas will show us the way.

The Texas model is a Trojan Horse. It is paraded before us in all its sequined glory. We are expected to bow down and pay tribute. On the surface it appears to offer great rewards but once we let it in the gates, the enemy inside will emerge to destroy us.

Texas is a place where government is controlled from the corporate boardrooms and the only function of government is to do corporate bidding. Instead of following Texas on the road to ruin, the twenty-eight states that still believe in the rights of labor should take counter measures.

In so many ways we have been following Texas for far too long. Texas gave us deregulation of oil and gas and the $50 billion west coast energy fraud. Texas gave us Enron and Anderson Accounting. Texas gave us Karl Rove and George W. Bush. Texas gave us war for oil in the Middle East. Texas gave us chemical-hydraulic fracturing to extract natural gas deposits deep in the earth, poisoning drinking water throughout the west. Texas gave us No Child Left Behind.

It seems to me Texas has been waging a cold war against the rest of us for a very long time. Maybe it's time we started fighting back.

Governor Rick Perry made some cavalier comments in April 2009 about Texas withdrawing from the union to which I reply: Go ahead. Make my day.