How the Right Wing Hijacked Rage Over the Economic Collapse and Swindled America

One of the most important political developments of the Obama presidency:
how the crash of 2008 served to strengthen the political right.

By Jefferson Morley, Salon
Posted on December 28, 2011

In his new book, Pity the Billionaire, Tom Frank turns his mordant eye on the unlikeliest political development of the Obama presidency: how the crash of 2008 served to strengthen the political right. The deregulation of Wall Street, championed for 30 years by right-wing leaders, had led to an economic catastrophe so frightening that the country elected a liberal Democrat to the presidency. Yet two years later, the most radically conservative and manufactured faction of the Republican Party, the Tea Party, had taken effective control of the House of Representatives, the regulation of Wall Street had stalled, and the champions of economic deregulation in Washington had emerged stronger than ever.

Frank, author of the bestselling book What’s the Matter With Kansas? provides a pithy and nuanced explanation of what he calls the “hard-times swindle.” He spoke with Salon from his father’s home in Kansas City, Mo.

Early in the book, you describe the moment in the spring of 2009 when free-market economics had been so thoroughly discredited that Newsweek could run a cover story proclaiming, “We’re all socialists now.” What happened? Why did that moment dissipate?
I saw that cover so many times [at Tea Party events]. For these people, that rang the alarm bell. I think the AIG moment [when the bailed-out insurance behemoth used taxpayer relief to dole out huge bonuses to its executives] was in some ways the high point of the crisis, when [the politics] could have gone either way. There was this amazing public outrage, and that for me was the turning point. Newsweek had another cover, “Thinking Man’s Guide to Populism,” and I remember this feeling around the country, that people were just furious. Somehow the right captured the sense of anger. They completely captured it. You could say they had no right to it, but they did. And one of the reasons they were able to do it was because the liberals were not interested in that anger.

I’m speaking here of the liberal culture in Washington, D.C. There was no Occupy Wall Street movement [at that time] and there was only people like me on the fringes talking about it. The liberals had their leader in Barack Obama … they had their various people in Congress. But these people are completely unfamiliar with populist anger. It’s an alien thing to them. They don’t trust it, and they have trouble speaking to it. I like Barack Obama, but at the end of the day he’s a very professorial kind of guy. The liberals totally missed the opportunity, and the right was able to grab it.

Looking back on it, I feel like people like myself were part of the problem. We sort of assumed with the Democrats in power, the system would correct itself.
One of the problems with liberalism in this country is that it’s headquartered in Washington and its leaders are a very comfortable class of people. Washington is one of the richest cities in the country, maybe the richest. It’s not a place that feels the crisis, that feels the economic downturn. By and large, the real estate market stayed OK. The city continued to boom. The contracts continued to flow. What we’re talking about here is the failure of modern liberalism. At one time it was a movement of working-class people. The idea that liberals wouldn’t feel economic pain was ridiculous. That’s who liberals were. No more.

You write that after Obama took office, “market populism was the only utopian scheme available to disgruntled Americans.” There was no liberal utopian scheme that said, “Here’s how we get out of this.”
There wasn’t even a Rooseveltian scheme, which was not utopian but very practical. Just to talk about Roosevelt would have been fantastic. One of the research points in the book that I thought was really interesting … was the history of the bailouts in 1932 and 1933 — when the Hoover administration did a lot of bailouts. We don’t remember that. [These bailouts] were massively unpopular for the same reason they were unpopular this time around: really blatant cronyism. We don’t remember that a big part of Franklin Roosevelt’s campaign [in 1932] was to be against these bailouts. There were maybe five newspaper articles in 2008 that mentioned this pre-history of the bailouts. It just never came up.

It was like the party’s muscle memory of the New Deal was lost. With Obama the muscle memory of the Democratic Party is the Clintonian technocracy of the 1990s.
That’s exactly right. Their message was: The technocratic way is going to solve our problems. Just leave it up to the experts who are going to figure a way out. [Obama and the Democrats]  seemed to think they didn’t need to dirty their hands by making a populist appeal. They did a lot of good things — the stimulus package of 2008 was good thing — but they didn’t realize you have to sell something like that. They were like, “We know what the answer is: Keynesian stimulus. So let’s just do it.” They didn’t understand that this nation only adopted Keynesian stimulus spending back in the 1930s amidst this terrible wrenching experience, the Depression, and an enormous campaign [by FDR] to tell the nation why this was necessary.

If you don’t sell it — if you just do this spending — well, people have a lot of suspicion of government handouts. Government debt bothers people for very obvious reasons. [Obama] didn’t make any effort to make the argument. It was just “listen to the experts.” I have a quote from [Obama economic advisor] Christy Roemer where she says, “Things would be better if we listened to the experts.” And she’s one of the good guys, one of the best people in the Obama administration. That’s their view.

You have an interesting discussion about how the Tea Party movement mimics what was once the left-wing style. This seems to be the dominant mode: The right is saying, “We’re the revolutionaries. We’re taking on the powers that be.”
At first I thought it was a peculiarity of Glenn Beck, and then I noticed it across the board. They picked up this 1930s style and language, complete with utopianism, with this intense faith in an economic system that will solve all your problems and that represents you perfectly, this miraculous economic system … So [the right] is constantly talking about this infernal elite that controls  government, controls corporations, and controls the academy, and that we have to wrench ourselves free.

So maybe it is true that the Obama technocracy is the infernal elite. Maybe not in the hellish way it is portrayed on the right, but in the sense that these are the defenders of bailouts, the defenders of the system.
I wouldn’t go too far with that, because I don’t think that is a way of understanding our modern world that can bear a lot of the weight. It is true that the Democrats completely imagine themselves as being the party of the professional class, and that is an elite. It’s not the elite, but it is an elite. The Democrats very definitely identify with academia. That’s the home of the professions, where they come from.

Still, I think that the conservative idea of revolting against the ruling class by holding up the market as an ideal is completely backwards. There is a ruling class in this country. But the notion that the free market is an act of rebellion against it seems pretty fanciful.  I can say it stronger than that. It is absolutely preposterous.

At one point you talk about “a cognitive withdrawal from the shared world.” It seems like the modern digital communication revolution encourages this. “A cognitive withdrawal from the shared world” — that sounds like a description of the Internet.
This is where we’re going. You can now believe things that are demonstrably false and never be challenged, directly or indirectly. You can withdraw. That’s the end that the Internet is constantly pushing us toward. That’s what modern marketing is all about.

So it’s a technological phenomenon, but it’s also an ideological phenomenon, a product of the times we’re in. You saw this in the ’30s, especially on the left. People would be so committed to this economic utopia [communism]. They believed in it, and their faith in it was so great … It is a product of economic collapse. People are desperate. They think their entire way of life is crumbling around them, and they reach for … a utopian system where everything is explained.

This is the genius of Fox News. It is fun to watch, and if you agree with them, it’s very gratifying to watch — and on a level deeper than most TV entertainment. The message is “You’ve worked really hard. You played by the rules and now they’re disrespecting you. They won’t let you say the word ‘Christmas.’”

You finished this book around the time Occupy Wall Street started. Were you surprised by the emergence of the movement?
I was surprised. I thought the left’s moment had passed. That was almost exactly three years after the crash of September 2008, and it seemed like the expiration date had come and gone. I’m very pleased, but in a lot of ways the horse has already left the barn.

Is it possible for the Occupy movement to reverse the gains of the right?
I hope so, but I honestly don’t know. At the end of the day I doubt it. My liberal friends have been doubting the right for decades. They’re always saying, “There’s no way these guys can recover now after this screw-up. People will never come back to them after this.” But they keep coming back.

The right does seems to be a little bit on the defensive at the moment. The dominant narrative of last summer — government spending is the problem — has been lost. Occupy Wall Street has injected a change in discourse. People aren’t defensive when they talk about inequality.
Tell me about it. When I started writing about inequality 10 years ago, it … was not something for NPR Book Talk. It was not quite within the bounds of the acceptable. Now it is. And that’s a huge change.

The main thing that has to change is that Democrats and liberals have to be able to speak to the outrage, and that requires a complete change in the way they look at the world. The problem is that they’ve been going the other direction for 30 years. Ever since the right-wing backlash began, liberals have been making their own move to professionalism. [To voice outrage] would require them to reverse course. I would like to see that happen, but I don’t know how it’s going to happen.

I think one thing has happened: Middle-class or upper-middle-class liberals in Washington, all of a sudden we realize we are insecure. The system is not just screwed up for people out there who we sympathize with. It’s screwed up for us. Economic insecurity is now pervasive even in the professional class.
Professionals are feeling the heat. They’re not insulated from market forces, like the way the professions are supposed to be. The system is not working like that anymore. Maybe that is where the change will come from.

Another thing that I think changed things was the debt-ceiling debacle last summer. That scared everybody, and it was so patently the doing of the Tea Party Republicans in the House. That was a huge turning point.

The hostage taking?
They were holding a gun to the head of the nation’s economy. They did ruin the nation’s bond rating. And you could have had an unthinkable catastrophe if they had done what they were threatening to do. Things like that should be off the table in our politics. That was an outrage in its own way as great as the bailouts. It was a shocking moment.

Yet at the end of the book, you contemplate the right wing in power, and you suggest they might do exactly that — take actions they know would ruin the economy.
They might. They see the financial crisis as something we deserve, that we’ve spent beyond our means, and now we have to pay. In their minds, we need a recession to get back on track. They think we’re due for something like the 1930s, so why not make it happen?

You conclude by saying say that the problems that editorialists fret about — inequality, global warming and financial bubbles — will endure, but so will this utopian market populism, which you describe as chasing “the dream more vivid than life itself.” You have shown how entrenched those impulses are in American politics. Maybe part of the American pursuit of happiness is to “chase the dream more vivid than life itself.“
The right has discovered the magic against relativism. They have long inveighed against relativism, but now they’ve discovered they can say anything. They can endlessly withdraw into this world of utopian fiction and everything can be explained away. It’s like some kid discovering a new video game. It’s so awesome.

So what gives you hope?
I was out in Wisconsin earlier this year, when you had thousands of people surrounding the capitol every day. There were big days when they had a hundred thousand people, and then there were the off days where you had “only” a couple of thousand — and this went for day after day. That was really a hopeful moment for me. It was the predecessor to the Occupy movement. Let’s see if they can make a comeback when it gets warm again. I would love to see it happen.

Our Economy Has Failed -- Until We Admit That, We're Screwed

Industries, communities, natural resources, even sports leagues have collapsed as Ronald Reagan’s corrosive vision has become dominant.
By Kai Wright, ColorLines
Posted on December 30, 2011

At the foot of Manhattan’s Broadway Ave., just below Wall Street, stands one of the city’s most reliable tourism draws: Arturo Di Modica’s 3.5-ton statue of a charging bull. Since 1989, the sculpture has been an iconic symbol of American wealth, of the aggressive capitalist spirit that, it is argued, made this country great and powerful. Visitors flock from around the world to rub the bull’s horns for good luck. Or they used to, at least. Now, tourists snap pictures from behind police barricades.

For more than two months, the raging bull of wealth has sat caged, facing eye-to-eye with a New York Police Department cruiser as cops have worked around the clock to protect it from the Occupy Wall Street movement. The park’s administrator has called the security “Orwellian.” That’s to say the least.

If you’re looking for visuals to encapsulate 2011, look no further than the bizarre scene at Di Modica’s bull. Daily, the country’s largest police force mobilizes to protect the idea of American prosperity from an imagined threat, while the actual economy lays gored and gutted by demonstrable and ongoing crimes.

In the immediate, this perversity results from a spectacular failure of political leadership.

We traveled a long, winding road to the point at which no-brainers like a modest payroll tax cut and an extension of unemployment benefits demand political brinksmanship. People of varying ideologies and partisan affiliations may debate endlessly who’s more at fault, but to do so is to truly miss the forest for the trees. The ugly reality is no leader in either party has yet shown the mettle to rise and meet the enormity of today’s challenges.

That’s not to suggest moral equivalencies. Republican leaders have been openly obstructionist, preferring a broken economy to a successful Barack Obama presidency. Their cynicism has rarely been as bald as the recent House vote on the payroll tax cut, but they’ve never made much effort to conceal it.

Still, even if President Obama had been given a willing Congress, the solutions he has championed aren’t nearly on par with the problem. Like his congressional opponents, he insists the structural foundation of our economy remains strong. Rather than confront the core issues—inequity and instability—Obama has thrashed around with Republicans in the margins—over how to control debt, over the degree to which health care should be a commodity rather than a right, over which borrowers were the least irresponsible and thus deserving of help. Meanwhile, at each crucial juncture in his reform-branded presidency, Obama has left financial players to voluntarily take responsibility for their behavior. They remain steadfast in their refusal to do so.

These bipartisan leadership failures have prolonged the immediate crisis, which dates back to 2007, when the foreclosures that would bring down the system first began consuming working-class communities of color in particular. Four years later, Republicans and Democrats alike are still working off of the optimistic notion that we need only contain the immediate problem until we can get back to growth—that we need only protect the bull with barricades until those pesky protesters disappear and allow its charge to resume. With each year that our chosen leaders have indulged this fantasy, a cancer has spread. Each year has brought new records in the poverty, hunger and inequality that will ultimately consume this country.

But that’s just the immediate crisis. As we move into an election year, in which U.S. residents will have prolonged debate over our collective priorities and values, we must pursue answers to a broader question. Since at least 1981, when the Reagan revolution overtook public policy, we have built an economy on two related fictions. 

1. The first is that boundless growth is sustainable. 
2. The second is that unrestrained capitalism, particularly in the financial sector, will create wealth for everyone. 

These are discredited ideas, and the question of 2012 must be how we begin building a society based on something different.

This broader question is crucial because, in truth, the problem extends past the economy.

Look around and you’ll find one broken institution after another, each of them buckling under the weight of the late 20th century consensus that greed is good, that a winner-takes-all individualism will somehow improve our collective endeavors. Industries, communities, natural resources, even sports leagues have collapsed as Ronald Reagan’s corrosive vision has become dominant.

Meanwhile, racism and racial injustice remain rooted in our society in no small part because they are necessary to explain why unrestrained capitalism and unfettered growth fail so spectacularly in creating widespread wealth. The entrenched, generational poverty that has gripped so many black communities and the yawning racial gaps that persist in wealth and income, among other things, can only be explained if they are blamed on the individuals hurt by them. Thus “welfare queens” and “super predator” youth and cheating “illegals” and “lazy Indians” and on and on. These caricatures continue to inform public policy on poverty, education, immigration and more. They continue to explain away inequity and provide villians against which struggling whites can define themselves without questioning the larger system. Martin Luther King, Jr.’s quote about slave owners—the original unrestrained capitalists—still rings true: “The Southern aristocracy took the world and gave the poor white man Jim Crow.”

Di Modica offered a quote on capitalism, too. In November, Newark’s Star-Ledger asked the artist what he thought about the security around his statue. He didn’t like it. “The bull is for the people,” he declared. “The bull is for everyone, the people with money and the people with no money.” If only it were so.

Wall Street’s bull markets have proven to be for the benefit of a very few. But as the financial industry’s largest players have been unleashed to pursue profit for themselves at all costs, the dreadful consequences have surely impacted everyone. Pensions have been wiped out. Family homes have been stripped of value, many taken away altogether. Small businesses have been locked out of credit markets. More than 14 million people are exiled from the labor force. A galling one in three black children and nearly as many Latino children are growing up in poverty right now, while the president brags about ferreting out fraud in the food stamp program rather than getting more money for it.

Our chosen political leaders have tolerated all of this in order to maintain the fiction that our economic system still works, that the organizing principles of our society remain valid. So the central question of 2012’s likely all-consuming political debate must be simple: How do we acknowledge that our current economy is built on lies and then start erecting a new one based on equity and sustainability?

Obama Signs New Iran Sanctions Into Law

Saturday, December 31, 2011 by Agence France-Presse
Move could intensify a brewing Gulf showdown
by Stephen Collinson

HONOLULU, Hawaii - US President Barack Obama Saturday signed into law tough new sanctions targeting Iran's central bank and financial sector, in a move that could intensify a brewing Gulf showdown.

The measures, meant to punish Iran for its nuclear program, were contained in a mammoth $662 billion defense bill, which Obama signed despite having reservations that it ties his hands on setting foreign policy.

The sanctions are meant to hit Iran's crucial oil sector and require foreign firms to make a choice between doing business with Tehran's financial sector and central bank or the mighty US economy and financial sector.

Foreign central banks which deal with the Iranian central bank on oil transactions could also face restrictions, sparking fears of damage to US ties with key nations such as Russia and China which trade with Iran.

Obama signed the bill in Hawaii where he is on vacation, at a time of rising tension with Tehran, which has threatened to block the Strait of Hormuz -- through which more than a third of the world's tanker-borne oil passes.

The United States has warned it will "not tolerate" such an interruption.

In comments reported Saturday, Tehran's top nuclear negotiator Saeed Jalili warned that Iran would "give a resounding and many-pronged response to any threat" made against it.

But Jalili also said Iran was ready to rejoin EU-led talks with major powers on assuaging Western concerns over its nuclear program.

The White House held intense negotiations with Congress on the terms of the law's implementation, given concern that sanctions on Iran's central bank could spark chaos in the global financial system and hike the price of oil.

Obama said in a statement issued as he signed the bill that he was concerned the measure would interfere with his constitutional authority to conduct foreign relations by tying his hands in dealings with foreign governments.

The bill, which passed with wide majorities in Congress, did reserve some wiggle room for Obama, granting him the power to grant 120-day waivers if he judges it to be in the national security interests of the United States.

Earlier this month, Treasury Secretary Timothy Geithner wrote to Congress to express concern against an earlier, tougher sanctions measure along the same lines saying it could harm the US push with its partners to isolate Iran.

Geithner argued that foreign allies could resent the new US measures and make it less likely they would cooperate and the sanctions would have the "opposite effect" of their intended purpose of isolating Iran.

Senior US officials said Saturday that they would try to implement the new sanctions guidelines in a way that protected the global economy and US foreign policy priorities, in a way which would still inflict pain on Iran.

There are fears that increased sanctions on Iran's central bank could force the global price of oil to suddenly soar, and actually give Tehran a financial windfall on its existing oil sales.

Rising oil prices could also crimp the fragile economic recovery in the United States and inflict pain on American voters in gas stations -- at a time when Obama is running for reelection next year.

The Obama administration argues that it has imposed the toughest-ever sanctions on Iran by the United States and its allies and says the measures are now having a punishing impact on the Iranian economy and petroleum sector.

The West alleges Tehran is seeking to acquire a weapons capability under the guise of its nuclear research program. Iran denies any such ambition and says its work is only for civil energy and medical purposes.

In recent weeks, Iranian officials have insisted the country was ready to face new sanctions against the oil sector and central bank.

The Wall Street Journal reported this month that US and European officials were seeking assurances from major oil producers, such as Saudi Arabia, Kuwait and the United Arab Emirates, that they would increase exports to the West and Asian nations if tighter sanctions on Tehran's energy exports are enforced.

How We Got Here With the Economy and How to Get Out

Sunday, January 1, 2012 by CommonDreams.org
by Robert Freeman

It’s easy to get fixated with small-bore issues on the economy, even if they don’t seem so small-bore at the time. Stimulus packages. Bailouts. Debt ceilings. Deficit commissions. Payroll tax-cut extensions. They seem like life and death issues while they’re being fought out.

But, in fact, they are distractions from the one real question that dominates all others, which is this: for whom should the economy be run? Should it be operated “to promote the general welfare” of 297 million people, the 99 percent? Or should it be run to benefit 3 million, the one percent?

Right now, the answer is that the economy is a machine, with the government as its operator, for transferring two hundred years of accumulated national wealth to those who are already the most wealthy, the one percent. And we should be clear about two things: this is a choice; and it’s working. The rich are getting much richer while everyone else is being stripped of their incomes, their assets, their retirement security, and all the elements of the social safety net enacted since the Great Depression.

Until we confront the fact that the collective impoverishment of the many for the selective enrichment of the few is a choice — the consequence of an explicit policy regime going back 30 years — nothing will change. But if we can muster the maturity to confront this fact, that we are here by choice, and find the courage to act on it, we might yet be able to save the country. If we do not, then we are surely lost.

To understand how we got here, we need to quickly review the economic history of the last sixty years. Then we can discuss what to do going forward.

At the end of World War II, the U.S. bestrode the world like a colossus. Its only industrial rival, Europe, had blown its brains out 30 years before, in World War I. And it did it again, in World War II, with Japan joining in. In the history of the world, there has never been such asymmetry in power between one country and all the rest.

It was U.S. capital that rebuilt its allies’ economies, through the Marshall Plan in Europe, and through military spending in Asia. U.S. factories boomed, to service not only its own vast and ravenous market, but those of all the rest of the world. All the equipment (and much of the food) to rebuild the industrial world came from America.

It was truly the Golden Age. There was enough wealth so that capital, labor, and government could all drink deeply from the seemingly inexhaustible spring of capitalism.

But by the 1960s something began to go wrong. Our allies’ economies had by then been rebuilt, and with the newest equipment and technologies. Theirs were more efficient than ours. The Volkswagens and Toyotas that would later become a tsunami began to trickle in. Same with the Sonys and Panasonics in consumer electronics. Shipbuilding, steel, machine tools, industrial electronics and other major industries began to migrate out of the U.S. and into the hands of foreign companies.

At the same time, the then-99% began to place serious claims on national resources, and to insist on being a player in major national decisions.

Lyndon Johnson launched the Great Society program withthe goal of eradicating poverty. The women’s rights movement, the civil rights movement, the anti-Vietnam War movement, and the environmental movement all proved dramatically effective in redirecting national priorities and resources away from those favored by the wealthy elites and toward those of the rest of the people.

In other words, at exactly the time the profits of corporations were under assault by growing international competition, the people began to claim a greater share of society’s fruits. It couldn’t square. There was not enough output from the faltering economy to both satisfy people’s expectations of middle class affluence and economic security and capital’s demands for higher and higher returns. Something had to give.

Equally, the elites who had run the country for decades were indignant at the presumption of a mangy mob of un-bathed, pot-smoking, long-haired, bra-less, draft card-burning, tree-hugging hooligans who didn’t even have a job but wanted a seat at the table of national decision-making (sound familiar?). They were certainly never again going to allow such a scabrous cabal to decide that the country should not fight a major war (Vietnam) that was so enriching to the elites who had lied the country into it.

So the elites decided to take “their” country back.

The election of 1980 was the real watershed in modern American history. Ronald Reagan ran for president promising to cut taxes, increase military spending, and balance the budget — all at the same time. He called it “supply side economics.” His rival for the Republican nomination, George H.W. Bush, called it “voodoo economics” which, of course, it was. But people bought it and Reagan proceeded to rearrange economic power more substantially than at any time since Roosevelt enacted the New Deal.

Reagan cut marginal tax rates on the wealthy from 75% to 35%. At the same time, he dramatically increased military spending. The result was entirely predictable: with less money coming in but more going out, the government began to run massive deficits. Where Jimmy Carter’s worst deficit was $79 billion, Reagan was soon running deficits of $150 billion a year, year after year and increasing.

By 1992, the end of George H.W. Bush’s presidency, the annual deficit had reached $292 billion. In only 12 years, the supply side “revolution” had quadrupled the nation’s debt, from $1 trillion to $4 trillion. And this, in a time of peace and prosperity.

But that was always the hidden intention of supply side economics, to bind the nation to massive debts, debts from which it would never be released. Despite their sanctimonious pretenses, Republicans love debt because they are lenders. When there is more demand for debt, as when the government borrows hundred of billions of dollar a year, it commands a higher price, which is interest. This is simply supply and demand. And if you’re a lender, higher interest rates are better. This is why, even though Republicans controlled the White House for 26 of the past 40 years, they never once in any of those years produced a single balanced budget.

Bill Clinton came to power in 1993 but proved an ambiguous leader, at least from standpoint of economics. He once described himself as “an Eisenhower Republican” which seems fair. He did raise marginal tax rates on the rich, but only from 36% to 39%. (They were at 75% under the real Eisenhower.) For this, he was pilloried as a socialist. Worse, after the fall of the Soviet Union he cut military spending as a percent of GDP to the lowest level since before Vietnam.

With lower military spending, slightly higher taxes on the rich, and a technology-driven economic boom, Clinton was able to pay down the deficits left to him by Bush I. By 1997, the government actually produced budgetary surpluses, the first since the 1960s. The consequence was a 40% fall in long term interest rates. Again, it was simply supply and demand. With less demand for borrowed money, rates fell.

This is the real reason Clinton was so relentlessly hounded by the right. It wasn’t because he was being serviced by a stalking intern, though he played into that one with astonishing recklessness. It was because he interfered with the three primary mechanisms for transferring wealth to the already-wealthy: tax cuts, massive military spending, and skyrocketing national debt.

The rest of Clinton’s economic legacy is far less positive. He pushed through NAFTA, pitting blue collar workers from the industrial Midwest against workers in Mexico making $1 an hour. He “ended welfare as we know it,” destroying an essential element of the social safety net. He enacted telecommunications “reform” that ended up as grotesque consolidation in the nation’s media, to where five companies now control more than 80% of the nation’s media.

But by far the most damaging of Clinton’s economic accomplishments was the deregulation of the finance industry. He overturned Glass-Steagall, the Depression-era law that separated commercial and investment banking. Together with his deregulation of derivatives, what Warren Buffet called “financial weapons of mass destruction,” this opened the economy to what would be the financial mad house of the first decade of the twenty-first century.

George W. Bush took office in 2001 and would serve the very wealthy in six important ways:

• First, he cut their taxes substantially, first in 2001 and again in 2003. Over their life, the Bush Tax Cuts for the top 1% will cost more than it would take to restore Social Security to solvency forever.

• Second, he massively increased military spending with his fraudulently-justified and incompetently-prosecuted War in Iraq, and his equally-over-hyped and phony Global War on Terror.

• As with Reagan, these two actions produced his third gift to his “base,” as he called the rich: massive deficits. He turned Clinton’s budget surpluses into deficits within one year. He would eventually double the national debt in only eight years, from $5.6 trillion to $12 trillion.

• Fourth, he helped major industrial corporations move some seven million high paying manufacturing jobs out of the country, to low-wage countries where they could pay less for labor while putting downward pressure on American wages.

• Fifth, he turned a blind eye as the financial industry carried out one of the greatest economic frauds in American history: the housing bubble. 

• Sixth, and most drastically, he bailed out the banks and their owners.

Bush’s ideological soul-mate, Alan Greenspan, Chairman of the Federal Reserve, held interest rates at historically low levels to induce a boom in housing. This created illusory “wealth” that served to distract and pacify the working class as their jobs were being shipped overseas. He turned a blind eye to massive fraud in mortgage lending so that busboys, bartenders, gardeners, and day workers could buy homes they could never hope to afford. And he encouraged the securitzation of mortgages so that banks could offload the toxic sludge to unsuspecting buyers around the world. It was all so carefully engineered.

However, as had happened in the 1960s, something started to go wrong. Incomes began to fall as jobs were shipped overseas. The Iraq war caused oil prices to jump from $26 a barrel the day Bush took office to over $100 a barrel. It was a massive gain for the oil companies, his family’s business, but the inflationary effect coursed through everything in the economy. The busboys couldn’t make the notes on their houses, so started unloading them. But there were no “greater fools” left to buy them so prices started a downward avalanche which is still under way.

Since the height of the bubble in 2006, more than $8 trillion of housing wealth has been wiped out. Eleven million homes have been lost to foreclosure. More than one in four mortgages are underwater, with more owed on them than the home is worth. The share of home equity owned by homeowners themselves is now at the lowest level it has been since World War II. The balance has been transferred from the owners to the mortgage holders, the banks.

But the banks, in an almost psychotic orgy of greed, had leveraged their equity 30-to-1. They borrowed 30 dollars for every one dollar they held in capital. It makes for prodigious profits when prices are rising. If they go up only 3% (1/30) you double your investment! But if prices fall by 3%, your capital is wiped out. That is what actually happened. Housing prices, inflated far beyond what a rational market could bear, fell for the first time in American history. The banks went bankrupt. That was the financial collapse of late 2008.

Fortunately for the banks, Bush and his Treasury Secretary, Henry Paulson, formerly head of Goldman Sachs, were there to bestow the sixth and greatest gift on the wealthy: they bailed out the banks and their owners.

They arranged for the Treasury and the Federal Reserve to buy the banks’ toxic sludge so they wouldn’t have to take any losses on it. They paid 100 cents on the dollar for crap securities that that couldn’t fetch 20 cents on the dollar in open markets. They gave the banks trillions of dollars of loans at effectively no interest. And they allowed the banks to print trillions of dollars which they then used to inflate commodity and stock markets around the world, greatly enriching their wealthy owners.

What Bush and company didn’t do was require any givebacks from the banks. No equity. No firings. No changes in bonuses. No regulation of explosive derivatives. No restructuring of “too big to fail.” No settlements with consumers for intentionally defective mortgages. No re-investment in the economy they had plundered. And certainly, no prosecutions for any of the willful perpetrators of the Greatest Economic Collapse Since the Great Depression.

By 2009, Barack Obama inherited an economy in free fall, for which he is perhaps owed some sympathy. But his policy responses have been inept at best, complicit at worst.

He carried through with Bush’s bailout of the banks, passed phony “financial reform” which changed nothing, and studiously refused to prosecute any wrong-doing. He pushed through a tepid stimulus package where fully one third went to tax cuts for the wealthy. And he groveled to get a payroll tax cut that, in fact, does more to damage Social Security than anything any Republican president has ever managed.

In many other ways, however, Obama has proven to be Clinton II, or Bush III. He staffed his economic team with the very intellectual lights — Robert Rubin, Larry Summers, Tim Geithner, Ben Bernanke — who had engineered the Collapse, ensuring that capital’s right to pillage would not be qustioned. He went back on his word to fight for a public option that would have lowered the cost of health care insurance. He waved through the Bush tax cuts, not once but twice.

He never attempted anything so ambitious as a Rooseveltian jobs program. He made sure the Copenhagen climate talks failed so as to not burden American industrialists. He more than tripled Bush II’s deficits. And in his most damning assault on the economic security of more than 80 million Americans, he “put Social Security on the table” as part of his budget negotiations. With “friends” like this we should pray for enemies. At least we would know them for what they are.

Which brings us to today.

Over 56 million people are in poverty. The Census Bureau reports that half of all Americans (!) are in or near poverty. Almost 30% of those in the middle class have fallen out of it, and the rate of collapse is accelerating. A smaller share of men have jobs today than at any time since World War II. The past ten year’s wage gains have been the worst for any ten year period in the nation’s history, even worse than during the Great Depression.

The national debt that stood at $1 trillion when Reagan took office now exceeds $15 trillion. Debt as a percent of GDP is higher than it was in 1929, the year before the Great Depression. Meanwhile, corporate profits are at record highs, with corporations sitting on $2 trillion in cash, not investing it in the economy. They have $1.3 trillion parked in offshore tax havens like the Cayman Islands, out of reach of U.S. tax collectors.

Who could have imagined we could have fallen so far, and so quickly? Actually, in retrospect, it all makes sense. As wealth was steadily transferred upward and incomes were undermined, the damaging effects were masked by increased recourse to debt, both public and private. And the debt itself served to both accelerate and consolidate the transfer. But eventually the burden of payments became too much for an enfeebled workforce to carry and the whole thing came crashing down.

Any meaningful recovery will require a major investment by the federal government. The combination of lost incomes and lost consumer wealth have undercut the ability of consumers to generate demand, leaving the government as the only agent in the economy with the capacity to do the job. Clearly, private markets are not going to do it. Indeed, corporations have learned how to prosper mightily by crushing their American workers, a truly dysfunctional state of affairs that cannot stand.

The government should invest in the nation’s infrastructure which the American Society of Civil Engineers rates a “D”, down from “D+” only three years ago. This would employ potentially millions of now-unemployed workers, turning unemployment checks into tax payments to the Treasury. It would also bring the platform on which all the rest of the economy operates up to twenty-first century standards. Fortunately, the government can borrow long term at 2%, a fraction of the payback from such investments.

I’ve written elsewhere about a Manhattan Project-like investment in a green economy. Such an investment would revive employment, restore American competitiveness, help pay down the national debt, reduce our crippling dependency on middle east oil, and reduce carbon emissions into the environment. In all of these ways, it would be a win for virtually everybody in the economy, everybody in the nation, and for much of the planet.

I say “virtually” because it would not benefit those who have wrecked the economy and profited so mightily in the process: the money lenders, who would see less demand for borrowed money; the weapons makers, who would face a less hostile world; and the oil companies, whose crippling grip on the economy would be reduced. And we shouldn’t have any illusions about how hard these forces will fight to ensure that nothing changes. They will, and unless we fight back, well, nothing will change.

It is important to state once again that virtually all of the predation, all of the plunder of the last thirty years has been a policy choice, primarily enacted by Republicans, but more and more abetted by Democrats who have thrown in for a piece of the action. It’s also important to understand that nothing has changed in carrying out the agenda. Obama is as much about true “Hope” and “Change” as Bush was about “Compassionate Conservatism.” In fact, he and his wealthy masters are accelerating the looting.

Military spending is still growing at almost double digit rates after a decade of such increases. He is clearly going to put the knife into Social Security and Medicare when re-elected. He clearly has no plan, no “grand narrative” to restore the nation to prosperity. He clearly will not, can not, go after the banking industry, his biggest underwriter. And he gives all the signals of starting a war with Iran, which will make Iraq look like a silly child’s board-game gone awry.

The wealthy elites, fronted by Obama, have effectively abandoned the U.S. economy and the American people who are trapped inside. What this means is that the elections of 2012 are the last chance for the American people to reclaim their economic security, to fight off the neo-feudal servitude that is being foisted on them, and reclaim their political self-determination. As you can see from the above, most of the damage to the economy is the result of political decisions made to carry out nefarious economic ends. And they’ve worked.

We desperately need to elect a reliably progressive Congress to serve as an effective counterweight to the hopelessly corrupt, craven, and cowardly Obama and company. We need to demonstrate that it is people, not money, and not rigged voting machines, that still matter most in American elections. We need every man, woman, and child on deck with a sense of existential urgency that if we do not reclaim our country now, it will be lost forever. For it will.

In the American Revolution, Thomas Paine declared, “We have the chance to make the world anew.”

He was thinking of the escape from the European world of economic feudalism, social privilege, and political autocracy. Today, we have one last chance to save that “new world” from the retrograde civilization it pulled itself out of, but whose claim on it has never been renounced.

If we can muster a Paine-like courage to fight and win this new Revolution, the Revolution to Save the Country, we shall be worthy of respect equal to that which we reserve for Paine and his fellow Founders. If we do not, we will get what we deserve. As with so much of the past thirty years, it’s our choice.

A World in Denial of What It Knows

Sunday, January 1, 2012 by the New York Times
by Geoffrey Wheatcroft

COULD there be a single phrase that explains the woes of our time, this dismal age of political miscalculations and deceptions, of reckless and disastrous wars, of financial boom and bust and downright criminality? Maybe there is, and we owe it to Fintan O’Toole. That trenchant Irish commentator is a biographer and theater critic, and a critic also of his country’s crimes and follies, as in his gripping if horrifying book, Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger.

He reminds us of the famous if gnomic saying by Donald H. Rumsfeld, then the United States secretary of defense, that “There are known knowns... there are known unknowns ... there are also unknown unknowns.” But the Irish problem, says Mr. O’Toole, was none of the above. It was “unknown knowns.”

What he means is something different from denial, or evasion, irrational exuberance or excess optimism. Unknown knowns were things that were not at all inevitable, and were easily knowable, or indeed known, but which people chose to “unknow.”

Unknown knowns were everywhere, from Wall Street to Brussels, from the Pentagon to Penn State. Ireland merely happened to offer an extreme case, where “everyone knew.”

They just chose to forget that they knew — about the way that Irish banks ran wild, how easy credit fueled a monstrous explosion of property prices and speculative house-building. Bertie Ahern, the Irish prime minister at the time of the rapid economic growth, merely boasted, “The boom is getting boomier,” preferring to unknow the truth that booms always go bust.

Beginning in 2008, the skies were lighted up by financial conflagrations, from Lehman Brothers to the Royal Bank of Scotland. These were dramatic enough — but were they unforeseeable or unknowable? What kind of willful obtusity ever suggested that subprime mortgages were a good idea? An intelligent child would have known that there is no good time to lend money to people who obviously can never repay it.

Or recall how we were taken into the Iraq war. That was the origin of Mr. Rumsfeld’s curious words 10 years ago. When he murmured about “things we do not know we don’t know,” he was touching on the unconventional weapons that Saddam Hussein might — or might not — have held.

In a sense, Mr. Rumsfeld was more right than he realized. Those of us who opposed the war may be asked to this day whether we knew what weaponry Iraq possessed, to which the answer is that of course we didn’t. Nor, as it transpired, did President George W. Bush, Vice President Dick Cheney, Mr. Rumsfeld or Prime Minister Tony Blair of Britain.

But that was the wrong question. It should have been not “what weaponry does Saddam Hussein possess?” but “Is Saddam Hussein’s weaponry, whatever it may be, the real reason for the war, or is it a pretext confected after a decision for war had already been taken?” The answer to that was obvious and could have been known to all, but too many people chose to unknow it.

Then there was another unknown known: the likely consequences of an invasion. Shortly before it began, Mr. Blair met President Jacques Chirac of France. As well as reiterating his opposition to the coming war, Mr. Chirac offered the prime minister specific warnings. Mr. Blair and his friends in Washington seemed to think that they would be welcomed with open arms in Iraq, Mr. Chirac said, but that they shouldn’t count on it. It was foolish to think of creating a modern democracy in an artificial country with a divided society like Iraq. And Mr. Chirac asked whether Mr. Blair realized that, by invading Iraq, they might yet precipitate a civil war.

This has been described in a BBC documentary by someone present, Sir Stephen Wall, a Foreign Office man then attached to Downing Street. As the British team was leaving, Mr. Blair turned and said, “Poor old Jacques, he just doesn’t get it,” to which Sir Stephen now adds dryly that he turned out to get it rather better than “we” did.

At that time, Mr. Chirac was reviled in America, and his career has just ended in disgrace, with a court conviction for embezzlement. But who was right about Iraq? All the calamities that followed the invasion were not only foreseeable, they were foreseen. And yet for Mr. Blair, as well as Washington, they were unknown knowns.

One more such, bitter as it is to say so when many people have been ruined, was the Bernard L. Madoff fraud. For years, his investors gratefully and unquestioningly accepted returns that were strictly incredible. Loud warning voices sounded. Harry Markopolos, a former investment officer, exhaustively back-analyzed Mr. Madoff’s supposed figures by computer. He spent nearly nine years repeatedly trying to explain to the Securities and Exchange Commission that these figures were not merely incredible but mathematically impossible. And still the SEC chose to unknow it. Leos Janacek wrote a harrowing opera called “The Makropulos Affair”; Peter Gelb at the Met should commission someone to write “The Markopolos Affair” as a fable for our times.

In a very different kind of scandal, not everyone at Penn State, and certainly not every fan, knew what had happened in the showers. But quite enough was known by people who could have acted. They chose instead to unknow. And so to another classic unknown known, the euro. The recent summit in Brussels turned into a silly melodrama, with a British prime minister, David Cameron this time, once more playing the pantomime villain. But Mr. Cameron was right, if for the wrong reasons, to oppose the European Union’s latest frantic (and doomed) plan to prop up the euro.

If truth be told (but it so rarely is!), the euro cannot work and could never have worked. That is, a single currency embracing countries as diverse in social culture, productivity, work practices and taxation as Germany and Greece, or the Netherlands and Portugal, is economically impossible without much closer fiscal and financial union — which is politically impossible. Anyone could have known that at the time the euro was introduced, but for the rulers of the European Union it was their very own unknown known.

“The Cloud of Unknowing” is a medieval classic of mystical writing, and unknowing still hangs over us. It will be a happier new year if we can dispel some of that cloud, try to unknow less, and know a little more.

Companies getting very creative with data about you

By Candice Choi, Associated Press

NEW YORK – Companies are getting smarter at predicting your next move

As it becomes easier to gather information on consumers, businesses are crunching personal data in new ways to forecast a wide variety of behavior. In much the same way that credit scores predict how likely you are to pay your bills, a new generation of scores now rate the likelihood that you'll take your medications or redeem a specific coupon.

In some cases, transactions that were traditionally considered off the books — such as rent payments and payday loans — are being incorporated into the growing body of information used to size up customers.

The new uses of personal data raise a host of concerns for consumer advocates, who question the reliability of the scoring models and the accuracy of the information on which they rely. Also troubling is that many consumers are oblivious that they've been tagged with these numbers, notes Chi Chi Wu, an attorney with the National Consumer Law Center. In many cases, consumers have no way to learn what their so-called consumer scores are.

"If this score is about me, I should be entitled to it," Wu said.

With credit scores, for example, lenders are required to disclose a score if it was used to deny a loan or assign a higher interest rate. Those who aren't actively seeking a loan can also pay to learn their credit scores from Fair Isaac Corp., which also goes by the name of its widely used FICO score.

If you're wondering how else businesses are rating you, here's a look at four recently introduced scores you may not know about:

Mortgage scores

Anyone who has applied for a mortgage understands the importance of credit scores. The three-digit figures not only help determine whether a bank will approve a loan, but its interest rate as well.

Now a company called CoreLogic is developing a score it says will zero in on predicting a borrower's likelihood of repaying a mortgage. The score will be based on a new breed of credit reports the company released last month.

These reports gather information that isn't typically listed on credit reports, including information from CoreLogic's in-house databases of rental records and payday loan applications. Also included are public court records, such as property liens, evictions and child support judgments.

The new score is intended to give lenders a more "complete picture" of mortgage applicants, said Tim Grace, a CoreLogic executive. He said that should lead to better lending decisions and reduced delinquencies for banks.

The exact formula for the score is still being developed with FICO. But once they're available in March, Grace said consumers will be able to purchase their scores for a price yet to be determined. For now, CoreLogic is required by law to provide customers with a free annual copy of the more detailed credit reports the company introduced last month. Consumers can request their reports by calling 877-532-8778.

Medication scores

The business of scoring consumers isn't limited to financial matters. A score that was introduced this summer seeks to predict the likelihood that patients will take their medications. An individual's score can even vary depending on the condition; the score is available for hypertension, diabetes, high cholesterol, depression and asthma.

FICO says its Medication Adherence Score is intended to help health care providers flag patients at risk of ignoring doctor's orders. The idea is to improve overall patient outcomes and reduce health care costs. The score is not available to individuals.

Interestingly, a patient's health and credit data are not used to determine the score. Instead, FICO says it can predict compliance based on demographic information such as household size; those who live alone are more at risk of skipping their medications. Owning a car, by contrast, is a good indicator for health care providers, as is being neither very young nor very old.

And as it turns out, FICO says men are more likely to take their medications than women. Other information thrown into the formula includes the rate of bankruptcies in a patient's region and purchase histories culled from the same databases retailers use to target households for catalogs.

FICO, which notes that the scores can't be used for insurance underwriting purposes, declined to say whether the score is being used by any clients yet. But the company has estimated that 2 million to 3 million Americans would be scored by this year, with that number set to rise to around 10 million by the end of next summer.

Income scores

Asking a person how much he or she earns for a living is off limits in most circles. But credit card issuers and other companies can get a good idea of how much you make through an outside source.

Experian, one of the three national credit reporting agencies, in March introduced a product that predicts an individual's annual wages rounded to the nearest thousand dollars. The Income Insight W2 is based on the borrower's credit report.

"The intuitive explanation is that if you can maintain a mortgage or credit card payment at a certain level each month, you're earning a minimum amount," said Brannan Johnston, vice president of income and assets at Experian.

The W2 is a variation of an income forecaster the company rolled out in 2009, which predicted total household income, including investment income and spousal income. The singling out of the individual's wages was a response to new credit card regulations last year that require card issuers to assess card applicants' ability to afford their credit lines.

Although credit card issuers are the most common users of the Income Insight W2, Johnston notes that many other companies — including debt collectors — also use it to gauge how much individuals are earning.

Shopping scores

The items you put in your shopping cart aren't free from scrutiny either. FICO says it has helped a third of the top 100 largest U.S. retailers target their marketing based on customer buying patterns.

FICO declined to detail its roster of retail clients. But the warehouse discount club Sam's Club says it worked with the company to develop its eValues program introduced about two years ago that offers premium members personalized discounts.

Sam's Club uses its vast database of member transactions to determine "propensity scores," which gauge the likelihood that a customer would act on a particular discount. The scores even factor in the best time to offer that discount. For example, a customer who just bought three boxes of bulk cereal wouldn't be offered a discount on the same items right away.

So far, the program seems to be working. The company says that premium membership — which costs $100 a year, compared with $40 a year for standard membership — has more than doubled since eValues was launched. Customers who redeem an eValue discount also make more than twice as many trips to the store and tend to buy far more items during each visit, according to the company.

Although the scores aren't available to members, the company notes that shoppers are clearly benefiting from them.

"It's kind of like the eHarmony of couponing — we find the very best offers for the customer," said Catherine Corley, vice president of member program development at the company.

Are Your Clothes Making You Sick?

Anthony Gucciardi

Natural Society - December 29, 2011

With every form of industry slashing costs and utilizing potentially dangerous new manufacturing technologies in an attempt to monetize and reduce workload, many of these companies are putting your health at risk. Such is the case with the clothing industry according to new research, which asks the question as to whether or not your clothes may be making you sick.

Some corporations have begun embedding something known as antimicrobial compounds into a number of common products including toothpaste, hand soaps, and even items within the clothing industry. The antimicrobial compounds are added to kill germs and odors, which appears to be beneficial at first glance. The truth of the matter, however, is that scientists have found that these antimicrobial chemicals may actually be damaging your thyroid in addition to your hormonal system.

Triclosan, Nanoparticles Added to Clothing Pose Health Risk

Furthermore, these antimicrobial compounds do not really pack a powerful anti-odor or anti-germ punch. In fact, the antimicrobials added into premium brand name clothing items are actually the same as washing with soap and water. These products are sometimes loaded with harsh antibacterial agents such as triclosan, and trichlorocarban.

These two chemicals were found to begin washing out of the clothing quickly, and within around 10 washes half of the triclosan and triclocarban washed out. What this means is that the chemicals could easily be absorbed into your skin as a result of sweating or even from water touching the antimicrobial clothing. Washed out chemicals can also negatively impact the environment after passing through water treatment plants, posing a risk to wildlife, humans, and the food supply. The Swedish Chemical Agency, where researchers conducted the tests, also warned that children could absorb the microbial compounds which could negatively impact their developing bodies.

Silver can also be used in nanoparticle form, which are tiny particles that can cross the blood-brain barrier. Prominent health professionals have warned against products containing nanoparticles due to the fact that the technology has never been thoroughly tested for effects on human health.

How to Avoid These Products

Luckily, there are key indicators to look for that will help you avoid clothing loaded with antimicrobial compounds. Avoid homeware products and clothing marketed as anti-odor, antimicrobial, or antibacterial, and avoid personal care products that list triclosan or trichlorocarban on the ingredients label.

For optimum results, purchase 100% organic personal care products and clothing if possible. You can vote with your dollar, and you can deliver a message to companies adding health-threatening chemicals to their products by simply not buying them.

Beware Corporate Psychopaths

They are still occupying positions of power
by Brian Basham - Thursday 29 December 2011

Over the years I've met my fair share of monsters – rogue individuals, for the most part. But as regulation in the UK and the US has loosened its restraints, the monsters have proliferated.

In a paper recently published in the Journal of Business Ethics entitled "The Corporate Psychopaths: Theory of the Global Financial Crisis", Clive R Boddy identifies these people as psychopaths.

"They are," he says, "simply the 1 per cent of people who have no conscience or empathy." And he argues: "Psychopaths, rising to key senior positions within modern financial corporations, where they are able to influence the moral climate of the whole organisation and yield considerable power, have largely caused the [banking] crisis'.

And Mr Boddy is not alone. In Jon Ronson's widely acclaimed book The Psychopath Test, Professor Robert Hare told the author: "I should have spent some time inside the Stock Exchange as well. Serial killer psychopaths ruin families. Corporate and political and religious psychopaths ruin economies. They ruin societies."

Cut to a pleasantly warm evening in Bahrain. My companion, a senior UK investment banker and I, are discussing the most successful banking types we know and what makes them tick. I argue that they often conform to the characteristics displayed by social psychopaths. To my surprise, my friend agrees.

He then makes an astonishing confession: "At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles."

Here was one of the biggest investment banks in the world seeking psychopaths as recruits.

Mr Ronson spoke to scores of psychologists about their understanding of the damage that psychopaths could do to society. None of those psychologists could have imagined, I'm sure, the existence of a bank that used the science of spotting them as a recruiting mechanism.

I've never met Dick Fuld, the former CEO of Lehman Brothers and the architect of its downfall, but I've seen him on video and it's terrifying. He snarled to Lehman staff that he wanted to "rip out their [his competitors] hearts and eat them before they died". So how did someone like Mr Fuld get to the top of Lehman? You don't need to see the video to conclude he was weird; you could take a little more time and read a 2,200-page report by Anton Valukas, the Chicago-based lawyer hired by a US court to investigate Lehman's failure. Mr Valukas revealed systemic chicanery within the bank; he described management failures and a destructive, internal culture of reckless risk-taking worthy of any psychopath.

So why wasn't Mr Fuld spotted and stopped? I've concluded it's the good old question of nature and nurture but with a new interpretation. As I see it, in its search for never-ending growth, the financial services sector has actively sought out monsters with natures like Mr Fuld and nurtured them with bonuses and praise.

We all understand that sometimes businesses have to be cut back to ensure their survival, and where those cuts should fall is as relevant to a company as it is, today, to the UK economy; should it bear down upon the rich or the poor?

Making those cuts doesn't make psychopaths of the cutters, but the financial sector's lack of remorse for the pain it encourages people to inflict is purely psychopathic. Surely the action of cutting should be a matter for sorrow and regret? People's lives are damaged, even destroyed. However, that's not how the financial sector sees it.

Take Sir Fred Goodwin of RBS, for example. Before he racked up a corporate loss of £24.1bn, the highest in UK history, he was idolised by the City. In recognition of his work in ruthlessly cutting costs at Clydesdale Bank he got the nickname "Fred the Shred", and he played that for all it was worth. He was later described as "a corporate Attila", a title of which any psychopath would be proud.

Mr Ronson reports: "Justice departments and parole boards all over the world have accepted Hare's contention that psychopaths are quite simply incurable and everyone should concentrate their energies instead on learning how to root them out."

But, far from being rooted out, they are still in place and often in positions of even greater power.

As Mr Boddy warns: "The very same corporate psychopaths, who probably caused the crisis by their self-seeking greed and avarice, are now advising governments on how to get out of the crisis. Further, if the corporate psychopaths theory of the global financial crisis is correct, then we are now far from the end of the crisis. Indeed, it is only the end of the beginning."

I became familiar with psychopaths early in life. They were the hard men who terrorised south-east London when I was growing up. People like "Mad" Frankie Fraser and the Richardson brothers. They were what we used to call "red haze" men, and they were frightening because they attacked with neither fear, mercy nor remorse.

Regarding Messrs Hare, Ronson, Boddy and others, I've realised that some psychopaths "forge careers in corporations. The group is called Corporate Psychopaths". They are polished and plausible, but that doesn't make them any less dangerous.

In attempting to understand the complexities of what went wrong in the years leading to 2008, I've developed a rule: "In an unregulated world, the least-principled people rise to the top." And there are none who are less principled than corporate psychopaths.

New Year’s Eve: OWS Retake Wall Street as NYPD focus on Times Square

Sunday, January 1, 2012 by the Sunday Mail/UK

'Whose Year? Our Year'

Celebration: Protesters returned to the park en masse shortly before midnight in downtown Manhattan. The Occupy Wall Street movement made a surprise invasion of Zuccotti Park last night while the police focused on New Year's Eve celebrations elsewhere in New York.

Around 800 demonstators piled up metal barricades, hoisting American flags and banners while scuffles broke out between activists and police.

Shortly before midnight, 100 NYPD officers had surrounded the park in downtown Manhattan with reports of pepper spray being used.

One individual was arrested after an officer was stabbed in the hand with scissors. The policeman was taken to Bellevue Hospital and believed to be in a stable condition.

Zuccotti Park hasn't been occupied since police cleared it on November 15 in an early morning raid. The movement escalated at 8pm last night, when around 100 protesters entered the park and erected a small tent.

The New York Times reported: 'By about 10.30 pm, there were more than 300 people inside... One man carried a big white placard that read - New Years Revolution.'

Shortly before midnight, OWS protesters announced on Twitter that they had reclaimed the park and unfurled a huge hand-painted banner reading 'OCCUPY WALL STREET'.

They tweeted: 'Barricades being torn down at liberty [Zuccotti] park...Happy new years!!'

As the new year was welcomed around the city, demonstrators chanted: 'Whose year? Our year.'

On Occupy Wall Street's official website it stated: '2011 was an amazing awakening. Let's start 2012 off right! Come celebrate with thousands of other members of the 99%, at our park and in the streets, as we make our special New Years Revolution together.'

Police in riot gear entered the park at 1:30am where 150 people remained and arrested five demonstrators. Authorities closed the park until 9am this morning.

Activists had been camped out in Zuccotti Park since September 17 to protest against the unjust distribution of wealth in the U.S. and the excessive influence of big business on government.

The movement spread to other U.S. cities including Los Angeles and Portland as well as Australia, Britain, Germany, Italy, Spain, Ireland and Portugal.

Mayor Michael Bloomberg ordered the protest to be cleared in November because health and safety conditions had become 'intolerable' in the crowded plaza.

One million revellers filled Times Square to welcome in the new year last night amid tight security. More than 1,500 members of the NYPD were patrolling the massive 17-block party to ensure everyone’s safety. They also used more than 3,000 cameras and numerous check-points with bag inspections. Alcohol was banned from the event.

3.5 Million Homeless and 18.5 Million Vacant Homes in the US

By Diane Sweet  December 30, 2011

 

The National Economic and Social Rights Initiative along with Amnesty International are asking the U.S. to step up its efforts to address the foreclosure crisis, including by giving serious consideration to the growing call for a foreclosure moratorium and other forms of relief for those at risk, and establishing a housing finance system that fulfills human rights obligations.

New government census reports have revealed disturbing information that details the cold, hard numbers of Americans who have been deeply affected by the state of our economy, and bank foreclosure practices:

In the last few days, the U.S. government census figures have revealed that 1 in 2 Americans have fallen into poverty or are struggling to live on low incomes. And we know that the financial hardships faced by our neighbors, colleagues, and others in our communities will be all the more acutely felt over the holiday season.

Along with poverty and low incomes, the foreclosure rate has created its own crisis situation as the number of families removed from their homes has skyrocketed.

Since 2007, banks have foreclosed around eight million homes. It is estimated that another eight to ten million homes will be foreclosed before the financial crisis is over. This approach to resolving one part of the financial crisis means many, many families are living without adequate and secure housing. In addition, approximately 3.5 million people in the U.S. are homeless, many of them veterans. It is worth noting that, at the same time, there are 18.5 million vacant homes in the country.

The stark realities that persist mean that millions of families will be facing the holidays in temporary homes, or homes under threat, and far too many children will be wishing for an end to the uncertainty and distress their family is facing rather than an Xbox or Barbie doll.

Housing is a basic human need and a fundamental human right. Yet every day in the United States, banks are foreclosing on more than 10,000 mortgages and ordering evictions of individuals and families residing in foreclosed homes. The U.S. government’s steps to address the foreclosure crisis to date have been partial at best.

The depth and severity of the foreclosure crisis is a clear illustration of the urgent need for the U.S. government to put in place a system that respects, protects and fulfills human rights, including the right to housing. This includes implementing real protections to ensure that other actors, such as financial institutions, do not undermine or abuse human rights.

There is a link available at the Amnesty International website for anyone who is interested and would like to join the call on the Obama administration and Congress to urgently step up efforts to address the foreclosure crisis, including by seriously considering the growing call for a foreclosure moratorium and other forms of relief, and establishing a housing finance system that fulfills human rights obligations.

Oppose Government, Lose Citizenship, Go Straight to Gitmo

Barbara H. Peterson
Farm Wars
 
The question of the day is, does the National Defense Authorization Act for Fiscal Year 2012, nicknamed the Indefinite Detention Bill, actually call for the arrest and indefinite detention of American citizens on American soil? According to Devvy Kidd, it doesn’t:

I don’t seem to be able to find the text in either the final enrolled House or Senate bills that explicitly says U.S. citizens will be indefinitely detained without charge.
Now, I’m not a lawyer, but I have been reading bills from both the state houses and Congress going on two decades. In both bills (House & Senate), I found language that is plain and specific regarding U.S. citizens. In the original bill (S. 1867) here is the section on page 361 which deals with detainees and U.S. citizens:
SEC. 1032. REQUIREMENT FOR MILITARY CUSTODY continues over to page 362:
(b) APPLICABILITY TO UNITED STATES CITIZENS AND LAWFUL RESIDENT ALIENS.
(1) UNITED STATES CITIZENS. The requirement to detain a person in military custody under this section does not extend to citizens of the United States.
Unless I’m missing something, that subprovision says detention by military does not apply to U.S. citizens. Words have meaning in the law and that sentence appears to be easily read. That language remains in the final bill (Enrolled):
Again, page 428 begins section 1032, but here is page 430:
(b) APPLICABILITY TO UNITED STATES CITIZENS AND LAWFUL RESIDENT ALIENS.-
10 (1) UNITED STATES CITIZENS.-The requirement to detain a person in military custody under this section does not extend to citizens of the United States.
Now over to the House. The full text of the bill passed by the House (Enrolled Bill):
H.R.1540 – National Defense Authorization Act for Fiscal Year 2012
Page 265:
SEC. 1021. AFFIRMATION OF AUTHORITY OF THE ARMED FORCES OF THE UNITED STATES TO DETAIN COVERED PERSONS PURSUANT TO THE AUTHORIZATION FOR USE OF MILITARY FORCE.
(e) AUTHORITIES.-Nothing in this section shall be construed to affect existing law or authorities relating to the detention of United States citizens, lawful resident aliens of the United States, or any other persons who are captured or arrested in the United States.
At this link is the Congressional Record for December 12, 2011, beginning on page H8356; the day after the final vote on House bill 1540. Scroll down to page 81 (H8436) on your screen and see this under Sec. 1022:
SEC. 1022. MILITARY CUSTODY FOR FOREIGN ALQAEDA TERRORISTS.
(b) APPLICABILITY TO UNITED STATES CITIZENS AND LAWFUL RESIDENT ALIENS.-
1. UNITED STATES CITIZENS.-The requirement to detain a person in military custody under this section does not extend to citizens of the United States.
(Devvy Kidd)

At first glance, it seems that there is a specific clause which eliminates American citizens from the provisions of the bill. However, consider the following bill that Joe Lieberman and Charles Dent are trying to get through called the Enemy Expatriation Act:

S 1698 A bill to add engaging in or supporting hostilities against the United States to the list of acts for which United States nationals would lose their nationality.
Bill Text:

A BILL
To add engaging in or supporting hostilities against the United States to the list of acts for which United States nationals would lose their nationality.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘Enemy Expatriation Act’.
SEC. 2. LOSS OF NATIONALITY.
(a) In General- Section 349 of the Immigration and Nationality Act (8 U.S.C. 1481) is amended–
(1) in subsection (a)–
(A) in each of paragraphs (1) through (6), by striking ‘or’ at the end;
(B) in paragraph (7), by striking the period at the end and inserting ‘; or’; and
(C) by adding at the end the following:
‘(8) engaging in, or purposefully and materially supporting, hostilities against the United States.’; and
(2) by adding at the end the following:
‘(c) For purposes of this section, the term ‘hostilities’ means any conflict subject to the laws of war.’.
(b) Technical Amendment- Section 351(a) of the Immigration and Nationality Act (8 U.S.C. 1483(a)) is amended by striking ‘(6) and (7)’ and inserting ‘(6), (7), and (8)’.

Here is a House version link sponsored by Charles Dent.

Who can be deemed as “engaging in, or purposefully and materially supporting hostilities against the United States? You tell me. In 2009, USA Today reported that the government’s “Terrorist Watch List” had no specific rules “for who goes on the list, [and] it’s too bloated to be effective, says Tim Sparapani, a lawyer with the American Civil Liberties Union.” No specific rules for who goes on the list? What? Oh, okay, I get it. Suspicion. That’s all it takes. Boom, on the list you go.

(HOMELAND SECURITY NEWSWIRE) Now a single tip about a terror link will be enough for inclusion in the watch list for U.S. security officials, who have also evolved a quicker system to share the database of potential terrorists among screening agencies.

The master watch list of individuals with suspected links to terrorism is used to screen people seeking to obtain a visa, cross a U.S. border, or board a plane in or destined for the United States. Officials say they have made it easier to add individuals’ names to the watch list and improved the government’s ability to thwart terrorist attacks, the Washington Post reported. (Federal Jack)

So, who is immune from being labeled a potential terrorist? Only the guys at the top. The ones who are setting up the lists. The ones putting the labels on us. And just how far a leap would it take for this list to lead to accusations, expatriation and indefinite detention for American citizens on American soil?

I’m a RACIST for criticizing Obama. I’m a TERRORIST because I’m not afraid to stand up for what’s right. I’m a LIBERAL for supporting the Constitution. I’m a TROUBLEMAKER for asking unanswered questions. I’m a TRAITOR for blowing the whistle on my corrupt government. I’m a CONSPIRACY THEORIST for presenting documented facts. I’m a TROLL for uploading news, videos, quotes and U.S. atrocities. I’m ANTI-AMERICAN for supporting Constitutionalists. Yep, GUILTY! (Guido)

Connecting the Dots

Are you beginning to get the picture? The Indefinite Detention bill does not have to include a specific provision for indefinite detention of American citizens for it to happen. All that needs to happen is for the Enemy Expatriation Act to go through. Remember what Dirty Harry Reid did to get the Food Safety travesty passed? If not, I’ll remind you:

“Then, on the floor of the Senate in the late afternoon, early evening of Sunday, December 19, Senator Reid called the Recycling bill for a vote and there was no objection from the two other Senators who were on the floor. So by unanimous consent HR 2751 was passed. Then Senator Reid moved for reconsideration with the vote to be tabled. This was granted by the same unanimous consent because there was no other Senator on the floor. Then Senator Reid offered without objection amendment number 4890 which substituted S. 510 the Food Safety Bill for the Recycling Bill. Without objection, then the amendment was passed and the Food Safety Bill had been substituted for the Recycling Bill. Reid moved that the bill be read for the third time and asked for the question. Without objection, the bill passed, and the Food Safety Bill was on the way back to the House.” (Fred Kelly Grant)

If history is any indicator, should we expect the provisions of the Enemy Expatriation Act to end up in another bill, and passed by unanimous consent in a one person vote like dirty Harry Reid did? I wouldn’t doubt it for a minute. And if it does, how convenient that these expatriated American “terrorists” can then be subject to Indefinite Detention on American soil.

Tyranny is being implemented in increments, one step at a time, making it difficult to piece together at the time it is happening. One piece of legislation here, another there – links of a chain that when added together on down the road, form the entire unit.

As with everything, a closer look is needed. Add these two bills together – the National Defense Authorization Act and the Enemy Expatriation Act – and American citizens can be stripped of their citizenship, which allows them to fall under the indefinite detention clause. A two-part mix.

Wiretap Suits OKd Against US, Not Telecoms

Friday, December 30, 2011 by The San Francisco Chronicle
by Bob Egelko

The nation's telecommunications companies can't be sued for cooperating with the Bush administration's secret surveillance program, but their customers can sue the government for allegedly intercepting their phone calls and e-mails without a warrant, a federal appeals court ruled Thursday.

In a pair of decisions, the Ninth U.S. Circuit Court of Appeals in San Francisco upheld a 2008 law immunizing AT&T and other companies for their roles in wiretapping calls to alleged foreign terrorists, but revived a suit that accused the government of illegally intercepting millions of messages from U.S. residents.

That lawsuit was partly based on testimony in 2003 by former AT&T technician Mark Klein about equipment in the company's office on Folsom Street in San Francisco that allowed Internet traffic to be routed to the government.

'Dragnet' surveillance

The Electronic Frontier Foundation, a privacy-rights organization representing AT&T customers, claimed the company had similar installations in other cities and used them for "dragnet" surveillance of everyday e-mails and phone calls, which the National Security Agency purportedly screened electronically for connections to terrorism.

"We look forward to proving the program is an unconstitutional and illegal violation of the rights of millions of ordinary Americans," said Cindy Cohn, the foundation's legal director.

Justice Department spokesman Dean Boyd declined comment.

President George W. Bush acknowledged in 2005 that his administration had eavesdropped on calls to suspected foreign terrorists without the warrants required by federal law, but his Justice Department denied the existence of a dragnet surveillance program.

Dozens of suits challenging the surveillance were transferred to San Francisco. In one case, then-Chief U.S. District Judge Vaughn Walker ruled in March 2010 that federal agents had illegally wiretapped an Islamic organization, which was accidentally sent a copy of the surveillance documents. The Obama administration, which inherited the case, is appealing the ruling.

Obama backed law

Walker also allowed suits against telecommunications companies that allegedly took part in illegal surveillance, but Bush then signed a law, supported by then-Sen. Barack Obama, that immunized companies cooperating in presidentially approved antiterrorism intelligence-gathering.

The appeals court upheld that law in a 3-0 ruling, rejecting arguments that Congress had interfered improperly in ongoing lawsuits and had delegated excessive power to Bush's attorney general, who certified the companies' eligibility for immunity in a confidential filing.

The Obama administration defended the law and also sought to dismiss the customers' suit against the government, arguing that it was based on speculation about wiretapping and involved political and national-security issues that were exempt from judicial review. The appeals court disagreed.

"Although the claims arise from political conduct and in a context that has been highly politicized, they present straightforward claims of statutory and constitutional rights" of customers who allege their messages were intercepted, said Judge Margaret McKeown in the 3-0 ruling.

Defense Act Affirms Indefinite Detention of US Citizens

Friday, December 30, 2011 by Inter Press Service

by Matthew Cardinale 

 

ATLANTA, Georgia - Civil liberties groups and many citizen activists are outraged over language in the National Defense Authorization Act of 2011 (NDAA) that appears to lay the legal groundwork for indefinite detention of U.S. citizens without trial.

David Gespass, president of the National Lawyers Guild, called it an "enormous attack on the U.S. and our heritage" and a "significant step" towards fascism, in an interview with IPS.

"For a very long time the U.S. has been moving towards what I personally think of as fascist - the integration of monopoly capital with state power, that's combined with an increased repression at home and greater aggression around the world. I don't think we're there yet, but I do see that we're going in that direction," Gespass said. "I think the... act is a significant step in that direction."

"It's quite severe. If this continues, people will not be able to count on constitutional protections at all," Debra Sweet, national director of the group World Can't Wait, told IPS.

Subtitle D of the act contains several controversial provisions on indefinite detention of terrorism suspects.

The executive branch - starting with the George W. Bush administration shortly after Sept. 11, 2001 - began indefinitely detaining terrorism suspects without trial at Guantanamo Bay, Cuba.
When those detentions were challenged in the courts, the federal government argued that the Authorization for Use of Military Force (AUMF), passed by the U.S. Congress on Sep. 18, 2001, allowed for the detentions to occur. In 2004, the Supreme Court agreed in Hamdi v. Rumsfeld.

"I know a lot of people who voted in favour of it (AUMF) back then didn't think they voted in favor of what ended up happening, but what it said is the president is authorized (to do) whatever is necessary," Gespass said. "The language as I recall it is not at all restrictive."

The current language in the NDAA seeks to legislatively affirm that the U.S. has the right to detain people, even though the courts already ruled, at least in the case of Hamdi, a prisoner captured during armed conflict in Afghanistan, that it already has that power.

Section 1021 defines who can be detained by the military.

The definition of "covered persons" under the provision includes not only those who planned, authorized, committed, or aided the terrorist attacks of Sept. 11, 2011, but also "a person who was a part of or substantially supported al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners, including anyone who has committed a belligerent act or has directly supported such hostilities in aid of such enemy forces."

Critics say problems with this language include the vagueness of the terms "substantial support", "belligerent act", or "directly supported".

Moreover, because the act allows for individuals suspected of support or belligerence to be held indefinitely without trial - until the end of the "war on terror", which could be never - there could be no opportunities for these individuals to challenge the vagueness of the charges against them.

Section 1021(e) says the act does not alter any rights of U.S. citizens, meaning that the Bill of Rights of the Constitution remains "intact." It might be up to the courts, however, to eventually determine whether the application of these NDAA provisions to a U.S. citizen would be constitutional.

However, if they are being detained indefinitely with no lawyer, then how does anyone know they are there, to appeal to the civilian courts on their behalf?

Another section says "the requirement to detain a person in military custody under this section does not extend to citizens of the United States". It does not say military custody is not an option; merely that it is not required.

The NDAA, as negotiated between the U.S. House and Senate, passed the U.S. House 283-136 on Dec. 14. It passed the U.S. Senate, in a vote of 86 to 13, on Dec. 15, with both Democrats and Republicans among those opposing it.

The bill was presented to President Barack Obama on Dec. 21 and signed Dec. 31, 2011.

However, numerous members of Congress have raised concerns.

Prior to its passage, on Dec. 12, Representatives Hank Johnson, Martin Heinrich and 30 others sent a letter to the chairs and ranking members of the U.S. House and Senate's respective Armed Services Committees.

They expressed their opposition to "an expansive authorization for detention of and use of military force against broadly defined adversaries substantially exceeding the scope of such authorizations already in law."

"The expanded authority has no geographical limits, provides authority for open-ended armed conflict, and is unacceptably broad," they wrote.

The NDAA "authorizes indefinite military detention of suspected terrorists without protecting U.S. citizens' right to trial," they wrote.
"We are deeply concerned that this provision could undermine the Fourth, Fifth, Sixth, Seventh, and Eighth amendment rights of U.S. citizens who might be subjects of detention or prosecution by the military," they wrote.

On Dec. 15, Senator Dianne Feinstein introduced the Due Process Guarantee Act of 2011 (DPGA), with 15 co-sponsors.

This legislation states, "An authorization to use military force, a declaration of war, or any similar authority shall not authorize the detention without charge or trial of a citizen or lawful permanent resident of the United States apprehended in the United States, unless an Act of Congress expressly authorizes such detention."

A companion piece was introduced in the U.S. House on Dec. 16; it has 29 co-sponsors.

Meanwhile, in Montana, activists have begun an effort to recall their entire Congressional delegation for supporting the NDAA.