The US Military Approves Bombing Children

The Nation

Robert Dreyfuss on December 4, 2012

In October, I blogged about an incident in Afghanistan in which three small children were killed in a US airstrike.

In that one small incident, which drew little attention at the time and since, three children aged 12, 10 and 8 were blown to smithereens in a NATO bombing while they were out gathering dung for fuel.

Now, in a despicable article in Military Times, the US military says that children are legitimate targets in the war in Afghanistan because sometimes the Taliban and other insurgents use kids.

In the original incident, which I cited in October, The New York Times reported it this way:

The…case of three children allegedly killed in a coalition strike was reported by local officials in Helmand Province’s Nawa district. The officials said that the children were killed in a NATO strike on Sunday afternoon as they were gathering dung to burn as fuel, a common practice in the desert reaches of southern Afghanistan where there are few trees.

“When we reached the area I saw the three bodies of children, two boys and one girl, ages 8 to 12 years old. They were from the same family,” said Haji Hayatullah, a member of the tribal council in the Nawa district. Their family is in the livestock business and raises goats and sheep on government land, he said.

Mr. Hayatullah added: “They had been collecting the animal dung and were heading home. I saw a sack of dung and another sack that was contaminated with their blood, and I saw three to four holes in the area. It seems the insurgents were digging them to plant mines, but I did not see any men’s bodies.”

The children were identified as Borjan, 12; Sardar Wali, 10; and Khan Bibi, 8, said Haji Abdul Manaf Khan, the governor of the neighboring Marja district. The deaths occurred near the border of the Marja and Nawa districts.

The Marja governor said that NATO forces watched as improvised explosive devices were being planted, and targeted the insurgents planting them. “As a result two I.E.D. planters were killed and the shrapnel killed the three children who were wandering nearby,” he said. Other reports said that three insurgents had been killed.

A spokesman for the international forces, Maj. Adam Wojack, said that the coalition forces were aware of the allegations and that the episode was being investigated. “I.S.A.F. did conduct a precision airstrike on three insurgents in Nawa district, and the strike killed all three insurgents,” he said.

“None of our reporting shows any civilian casualties or any children.”

But on December 3 Gannett, which owns Military Times, ran an article headlined: “Some Afghan Kids Aren’t Bystanders.” It said:

When Marines in Helmand province sized up shadowy figures that appeared to be emplacing an improvised explosive device, it looked like a straightforward mission. They got clearance for an airstrike, a Marine official said, and took out the targets.

It wasn’t that simple, however. Three individuals hit were 12, 10 and 8 years old, leading the International Security Assistance Force in Kabul to say it may have “accidentally killed three innocent Afghan civilians.”

But a Marine official here raised questions about whether the children were “innocent.” Before calling for the M142 High Mobility Artillery Rocket System mission in mid-October, Marines observed the children digging a hole in a dirt road in Nawa district, the official said, and the Taliban may have recruited the children to carry out the mission.

Shockingly, the article quotes a senior officer saying that the military isn’t just out to bomb “military age males,” anymore, but kids, too:

“It kind of opens our aperture,” said Army Lt. Col. Marion “Ced” Carrington, whose unit, 1st Battalion, 508th Parachute Infantry Regiment, was assisting the Afghan police. “In addition to looking for military-age males, it’s looking for children with potential hostile intent.”

“Opens our aperture,” indeed.

The article:

 Some Afghan kids aren’t bystanders

By Dan Lamothe and Joe Gould - Staff writers
Monday Dec 3, 2012

CAMP LEATHERNECK, Afghanistan — When Marines in Helmand province sized up shadowy figures that appeared to be emplacing an improvised explosive device, it looked like a straightforward mission. They got clearance for an airstrike, a Marine official said, and took out the targets.

It wasn’t that simple, however. Three individuals hit were 12, 10 and 8 years old, leading the International Security Assistance Force in Kabul to say it may have “accidentally killed three innocent Afghan civilians.”

But a Marine official here raised questions about whether the children were “innocent.” Before calling for the M142 High Mobility Artillery Rocket System mission in mid-October, Marines observed the children digging a hole in a dirt road in Nawa district, the official said, and the Taliban may have recruited the children to carry out the mission.

The incident underscores a continuing problem across Afghanistan. The use of children by the Taliban — through recruitment and as human shields — complicates coalition forces’ efforts to eliminate enemy fighters from the battlefield without angering civilians.

The New York Times reported that the dead children’s family members said they had been sent to gather dung, which farmers use for fuel. Taliban fighters were laying the bombs near the children, who were mistakenly killed, they said.

Regardless, it’s one of many times the children have been involved in the war. In a case this year, Afghan National Police in Kandahar province’s Zharay district found two boys, ages 9 and 11, with a male 18-year-old carrying 1-liter soda bottles full of enough potassium chlorate to kill coalition forces on a foot patrol.

“It kind of opens our aperture,” said Army Lt. Col. Marion “Ced” Carrington, whose unit, 1st Battalion, 508th Parachute Infantry Regiment, was assisting the Afghan police. “In addition to looking for military-age males, it’s looking for children with potential hostile intent.”

There were 316 documented cases of underage recruitment in the war last year, most of them attributed to the Taliban and other armed groups like the Haqqani network, according to a U.N. report released in April. Eleven children, including an 8-year-old girl, were killed in Afghanistan last year carrying out suicide attacks, the report said.

Marines in Helmand say the Taliban regularly recruit children to serve as spotters, letting armed insurgents know when U.S. or Afghan forces reach designated points on a patrol so they can prepare an ambush.

An ISAF spokesman, Lt. Col. Jimmie Cummings, said insurgents continue to use children as suicide bombers and IED emplacers, even though Taliban leader Mullah Omar has ordered them to stop harming civilians.

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But isn't the point to be less evil than the people we are fighting? If they use children to carry out their goals, does that mean we now have carte blanche in killing children? Does this not seem evil to anybody?

Obama administration considering ways to overturn marijuana legalization in Washington and Colorado

"States' rights trump federal rights every time." ~ Barack Obama, before he was president, when he just wanted the job and said anything to get elected.

Published: 07 December, 2012

New legislation in Washington state went into effect this week that legalizes for the first time in ages the possession of marijuana. Federal law still says otherwise, though, setting up the Justice Department to make some serious determinations.

Even as smoking up became protected by state law in Washington starting Thursday, coast-to-coast prohibition as provided by a long-standing federal ruling remains on the books. For marijuana advocates in the Pacific Northwest, the lifting of the ban is a pretty big victory. That doesn’t mean that the Justice Department has ruled out an intervention, though.

Since voters in Washington and Colorado opted on Election Day to legalize small amounts of marijuana for recreational use, the Department of Justice has been relatively quiet over how it will handle what is likely to become a heated debate regarding states’ rights. In an article published by The New York Times this week, reporter Charlie Savage says senior White House and Justice Department officials are already attempting to tackle how to handle the new marijuana laws, and are amid deliberations right now that will determine when, where and how national law enforcement can intervene.

Savage cites anonymous sources familiar with the discussions in DC, whom he says are considering plans for legal action against the states of Colorado and Washington. Meanwhile this week the Obama administration once again chimed in on the topic, but as with earlier abbreviated statements, the only words out of the nation’s capital forecast an ominous battle likely to brew for some time.

When the results of the legislations up for vote in both states trickled through on the evening of Election Day, the Justice Department dispatched a short statement clarifying the federal classification of marijuana as an illegal substance. This week, the United States attorney for Seattle, WA once again warned that federal law is still on the books.

“In enacting the Controlled Substances Act, Congress determined that marijuana is a Schedule I controlled substance,” state attorney Jenny A. Durkan announced in a statement. “Regardless of any changes in state law, including the change that will go into effect on December 6 in Washington State, growing, selling or possessing any amount of marijuana remains illegal under federal law.”

Additionally, the New York Times quotes Durkan as saying the Justice Department maintains that its "responsibility to enforce the Controlled Substances Act remains unchanged," meaning federal law enforcement isn’t necessarily interested in adhering to local rules.

A similar legislation approved during last month’s Election Day is expected to go on the books in Colorado in the coming weeks. Even before becoming official, however, some important state institutions have announced that they won’t be cooperating with the end of prohibition.

"In order not to lose federal funds, we need to comply with federal law," University of Colorado at Boulder spokeswoman Malinda Hiller-Huey told The Denver Post.

Speaking to NBC, Colorado Governor John Hickenlooper acknowledged even before the new law was approved that it would be an uphill battle for local marijuana advocates given the feds’ insistence in playing by their own rules.

"It's probably going to pass, but it's still illegal on a federal basis. If we can't make it legal here because of federal laws, we certainly want to decriminalize it,” he said.

Seattle City Attorney Pete Holmes tells NPR station KUOW that in his state, residents should be thankful that local law enforcement won’t be tasked with what is largely considered not just a non-issue, but an expensive endeavor. Whereas schools and universities in Colorado aren’t considering the new law for the sake of saving money, Holmes says the legislation in Washington will actually save the state bundles.

"I think that they should acknowledge this newfound right," he says to KUOW. "I think they should celebrate in the privacy of their homes if they choose to do so. And be thankful that we’re no longer arresting some 10,000 Washingtonians a year in the state of Washington and spending well over $100 million in law enforcement resources on that."

Meanwhile, more liberal minded lawmakers in the District are hoping to iron out a way to ensure that state laws are protected before federal agents can have their way. Rep. Diana DeGette (D-Colorado) introduced a bipartisan legislation before Congress that will amend the US Controlled Substances Act to provide that federal law shall not preempt state marijuana laws.

"I am proud to join with colleagues from both sides of the aisle on the 'Respect States' and Citizens' Rights Act' to protect states' rights and immediately resolve any conflict with the federal government," Rep. DeGette said upon introducing House Bill 6606. "In Colorado we've witnessed the aggressive policies of the federal government in their treatment of legal medicinal marijuana providers. My constituents have spoken and I don't want the federal government denying money to Colorado or taking other punitive steps that would undermine the will of our citizens."

According to a recent survey conducted by Public Policy Polling, nearly six out of ten Americans want marijuana legalization on a widespread scale. In a separate Angus Reid Public Opinion poll published last week, over 60 percent of Americans surveyed said they expect marijuana to be federally permitted within the next decade.

The Plutocrats and the Placeholder President

*Sigh* Yes, the Democrats suck just as hard ads the Republicans do. Obama will bend over for the Republicans' bullshit 'the sky is falling' austerity and cut deep gouges out of social security and other important programs even though it's unnecessary. (Hint) just let the Bush tax cuts expire, end the wars, bring the troops home, and cut the military budget. A conventional military is outdated and unneeded in this age of warfare. Problem solved.--jef

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Austerity, Obama-Style
by ROB URIE


In Quentin Tarantino’s movie ‘Jackie Brown’ the illegal arms dealer played by Samuel L. Jackson laughs as he recounts the sales slogan used by the manufacturer of the ‘Tech Nine’ semi-automatic weapon—“the most popular gun in American crime, like they proud of that shit.” Mere weeks after Barack Obama was re-elected, farce is added to tragedy with his supporters complaining that while the Republican proposal to cut Federal government spending and social insurance programs is all bluster and misdirection, their guy (Mr. Obama) has a real plan to do so—like they’re proud of that shit. Thanks just the same folks, but I’ll take the fake plan.

The moment when the New Deal as we knew it became history by bi-partisan consensus was a long time coming. A trans-generational core of inherited wealth and right-wing cranks has been trying to undo the New Deal since Social Security became fact in 1935. Ronald Reagan echoed anti-New Deal cries of ‘socialism,’ first as a paid spokesperson of the AMA (American Medical Association) against the implementation of Medicare and Medicaid, and later through his racist caricature of the ‘welfare queen’ living fat on public largesse. Despite the fact that Social Security is an insurance program paid for by its participants, much the same as private insurance but without the executive looting, the charge has always been of an undeserving public sucking on “a milk cow with 310 million tits.”

Democrats first joined the effort in earnest with Bill Clinton’s plan to partially privatize Social Security. The idea was to let our good friends on Wall Street manage a bit of the money for us, for a fee of course. That proposal faltered when Mr. Clinton was impeached. As was the fashion in European Central Bank circles in 2009, Mr. Obama took up the torch of fiscal austerity of his own initiative by creating his very own deficit commission. This should have come as no surprise to anyone paying attention—Mr. Obama publicly stated his intention to ‘fix’ Social Security, Medicare and Medicaid when he allied himself with the Wall Street friendly ‘Hamilton Project’ in 2006.

(In Between Democrats Clinton and Obama came Republican George W. Bush who also tried to partially privatize Social Security. Mr. Bush quickly retreated when he saw the depth of political opposition to the effort. As the saying goes, it takes a Democrat to gut the New Deal).

For the uninitiated, the Hamilton Project is the demon spawn of the Clintonite contingent of the Democratic Party led by former Treasury Secretary and disgraced Citicorp Board member Robert Rubin. The kindest take on the Wall Street lootocracy populating the organization is that they don’t know how money is created (the U.S. has a fiat currency), making them morons. The less kind take is that their greed has no limits. Whichever is more applicable (neither is mutually exclusive), if one group of Wall Street politicos bears responsibility for the economic catastrophe that an unregulated Wall Street has visited upon the world in recent years, the Hamilton Project is it.

Never one to let the wish list of the entrenched plutocracy go unfulfilled, Barack Obama chose Democrat, inheritance baby and Wall Street ‘welfare queen’ Erskine Bowles, to co-head his (Mr. Obama’s) very own ‘deficit commission.’ Of course Mr. Obama knew nothing of Mr. Bowles experience leading the earlier effort to (partially) privatize Social Security when he appointed him to the position. In his speech welcoming the Hamilton Project into existence (link above), Mr. Obama additionally described himself as an enthusiastic ‘free trader’ committed to globalization. And of current relevance, he ascribed fiscal ‘discipline’ as the proximate cause of the Clinton economic ‘boom,’ deftly ignoring the greatest stock market bubble (as measured by price / earnings ratio—twice that of 1929) in human history.

One could be forgiven for believing that Mr. Obama, or any other placeholder Democrat for that matter, has something of a point regarding ‘entitlement’ spending if his words are the only that are listened to. People in the U.S. are living longer and a strapped citizenry simply cannot afford the lavish promises made in an earlier age of plenty goes the toxic bullshit. By leaving out class divisions this formulation simply furthers the shift in social resources upward from poor to rich. As economist Paul Krugman has effectively argued, the rich are living longer and the working class and poor are not. Additionally, unless those in the ‘gap’ years between the old and new eligibility ages for Medicare simply forgo health care, the change will force them to purchase private health insurance under whatever terms the ‘market’ will bear. But of course, private insurance companies always act in the public interest when people’s backs are to the wall.

At the end of the day this charade is a struggle over social resources. The ‘too-big-to-fail’ guarantee of the banks, which is the only reason why insolvent, predatory Wall Street remains in business, is an entitlement program for connected bankers—for which they pay nothing. The bloated, murderous, military industry that lobbies the U.S. into unnecessary wars for their own benefit and that of corporate welfare receiving multi-national corporations is an entitlement program. And the aforementioned corporate welfare that perpetuates the puffy, gray corporate executives behind the ‘Fix the Debt’ campaign for whom official Washington now apparently works is an entitlement program. So if we want to have a public ‘discussion’ of entitlement spending, by all means let’s do so.

And as far as entitlement programs go, government guarantees and redistribution schemes are only a starting point. As economist Dean Baker has argued, America’s professional class retains monopoly pricing power for their labor through trade restrictions while the working class has been thrown to the wolves. The Federal Reserve has spent upwards of four trillion dollars to entitle the fortunes of the investor class since 2008, returning the already rich to their former wealth. And corporate executives have entitled themselves to robber-baron sized paychecks through the combination of trade policies that have so reduced the fortunes of the working class, tax abatements that have bled the public weal for some forty years, and through the financialization of the economy that has favored, along with Federal Reserve policies, the financial wealth that executives pay themselves with. All of these and more are entitlement programs that have redistributed ever more social wealth from the working class and poor up to the Washington establishment’s beloved plutocrats.

But the trillions of dollars in health care expenditures that we deadbeats intend to sponge off of the blessedly deserving rich is the really big money, right? When Erskine Bowles wakes with night terrors, it is my herniated disk and your gall bladder operation that will sink the country, right? The U.S. pays 30% – 50% more per person than other first world nations for health care that is of substantially lower quality because we have a largely private health care system. Were the system totally public—Medicare for all, we would realize some material proportion of these savings and most likely vastly improve the health of the citizenry. Were the monopoly entitlements of doctors and pharmaceutical companies reduced or eliminated, further cost reductions would be realized. So quickly, who are the main beneficiaries of America’s ‘bloated’ entitlement programs?

As Mr. Obama will offer, his proposals include reducing payments to health care providers and negotiating lower prices for prescription drugs. However, the private health care system in America is the global leader in shifting costs to those with the least social power. Cuts in public payments to private providers have a long history of popping up elsewhere, as health insurer profits will attest. For instance, Mr. Obama’s health care ‘reform’ program, the ACA (Affordable Care Act), requires insurance companies to spend fixed percentages of their revenues providing health care or to rebate the difference to their customers. As corporations constitute the majority of their ‘customers,’ corporations apparently now have an incentive to shop around for health insurers that provide the lowest proportion of health care to their employees to maximize the rebates. (The central business of insurers was already to provide the appearance of coverage without providing actual coverage). And health insurance providers can gain market share, if at lower margins, by doing exactly this. Welcome to America.

Last, any honest discussion of ‘entitlements’ would be to the benefit of America’s poor and working classes. The globetrotting plutocrats behind current ‘discussions’ see working class product as their due. This is the very definition of entitlement. We can either disabuse them of this notion or roll over and play dead. Or better yet, roll over and vote Democrat.

Tamoxifen Makes Women Live Longer (Says Pfizer, AstraZeneca)

 The medical establishment, guided by the corrupt profiteering of Big Pharma, makes sick people sicker and kills more people than the diseases they "attempt" (profit from) to cure.--jef

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Pfizer’s Elixir of Youth?
by MARTHA ROSENBERG


It was a great moment in Pharma funded physician “education.” At a symposium at the American Psychiatric Association’s 2010 meeting called “Mood, Memory and Myths: What Really Happens at Menopause,” two Wyeth/Pfizer funded speakers tried to resurrect the benefits of cancer-linked hormone therapy. But the mostly-female audience was having none of it: what can we do about our “tamoxifen brain” from the cancer we already have, they wanted to know.

Women are to be forgiven if they are cynical about this week’s news about the cancer drug tamoxifen saving lives. Since the 1940s women were told they needed to be on hormone replacement therapy (HRT) for the rest of their lives only to find in 2002 it was causing breast cancer, heart disease, strokes and blood clots. Studies that looked as solid as this week’s tamoxifen study assured women that lifelong HRT would prevent heart disease, dementia and other blights –when it turned out to be just the opposite.

The harm from HRT, recommended by the medical mainstream for decades, was so dramatic, when women quit HRT in 2002, the incidence of US breast cancer fell 15 percent among women with estrogen-fed cancer. Fourteen thousand women who were expected to get breast cancer didn’t because they eliminated the source, said news reports. Rather than a “cure” for breast cancer, this was a literal “cause.” Unfortunately, women, their clinicians and the medical press have already forgotten this man-made cause of cancer and HRT is making a comeback.

Why should women be cynical about this week’s study in the Lancet that finds women who stay on the blockerbuster cancer drug Nolvadex/tamoxifen for 10 years instead of the usual five years are less likely to die and have cancer recur? (Inspiring some to already suggest women should stay on tamoxifen, “for life.”)

The first reason is because the study was partially funded by AstraZeneca who makes Nolvadex or tamoxifen. AstraZeneca, formerly Zeneca, co-founded National Breast Cancer Awareness Month as a “public relations scam” says the Center for Media and Democracy’s SourceWatch, even as its parent company, ICI Pharmaceuticals/Imperial Chemicals Industries, manufactured pesticides and organophosphates linked to breast cancer. Some accused the drug giant of literally playing both sides of the street, especially since tamoxifen shares some chemical properties with endocrine disrupting pesticides.

The second reason for cynicism is: tamoxifen carries its own risks which are not such a great trade off (unless you are Big Pharma). “Treatment with 5 years of tamoxifen can cause side-effects such as endometrial cancer and thromboembolic disease and continuing tamoxifen for an additional 5 years is likely to increase these side-effects,” says the Lancet article. 3.1 percent of women undergoing the extra 5 years of tamoxifen therapy got endometrial cancer in the study versus 1.6 percent who did have extra years of the drug.

There is an increasing backlash among women breast cancer survivors against tamoxifen and such trade-offs. “My cancer had a one percent chance or recurring and I was told tamoxifen would cut my chances in half,” says Kay, a Chicago fitness instructor who underwent surgery and radiation for ductal carcinoma in situ (DCIS) at the age of 50. “That means if I exposed myself to the risks and side effects of tamoxifen, my chance of recurrence would be .5 percent. No thinking women would agree to that.”

And there is a another source of cynicism for women beyond the downside of tamoxifen and the external causes of cancer, including prescribed hormones, being ignored. In November the New England Journal of Medicine published a study estimating that mammograms have caused more than a million American women to be diagnosed with early stage breast cancers, in the last three decades, that would not have proved fatal if left undetected and untreated. The millions, perhaps billions, spent in health care dollars because of such overdiagnosis and overtreatment and the suffering of women have yet to be fully quantified.

“There is more money in treating breast cancer than preventing it,” declares Kay who says she studied profiteering on the disease or what she calls “Breast Cancer Inc” since her own diagnosis. “That is why they call DCIS which is stage 0, precancer–’cancer.‘ There is more money in treating it.”

The Obscenely Rich Men Bent on Shredding the Safety Net

They want to cut social security and medicare to line their own pockets, not to address the budget deficit/national debt.--jef

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CEOs talk about shared sacrifice, but the only thing they want to share is your retirement money with their wealthy friends. 

By Lynn Stuart Parramore | AlterNet

New York magazine calls it a “Mass Movement for Millionaires.” The New York Times' Paul Krugman sums up the idea: “Hey, sacrifice is for the little people.”

The Campaign to Fix the Debt is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and to cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the "fixers" have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter.

This new Wall Street movement, which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda. The group aims to seize the moment of the so-called "fiscal cliff" debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net. The group includes Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon, Honeywell’s David Cote, Aetna’s Mark Bertolini, Delta Airlines’ Richard Anderson, Boeing’s W. James McNerney, and over 100 other influential business honchos and their supporters.

Corporations represented by the fixers have collected massive bailouts from taxpayers and gigantic subsidies from the government, and they enjoy tax loopholes that in many cases bring their tax bills down to zero. Sometimes their creative accountants even manage to get money back from Uncle Sam. For instance, according to Citizens for Tax Justice, Boeing has paid a negative 6.5 percent tax rate for the last decade, even though it was profitable every year from 2002 through 2011.

These CEOs talk about shared sacrifice, but it seems that they don’t intend to share anything but your retirement money with their wealthy friends. As New York mag reports:

“Most on-the-record comments are a mishmash of platitudes about shared sacrifice and working together for the good of the country. But interviews with a number of organizers and CEO council members point to a massive networking effort among one-percenters — one that relies on strategically exploiting existing business relationships and appealing to patriotic and economic instincts."

As the Fix the Debt gang moves around the country spreading their message, they are starting to attract public protests. On November 27, they were greeted in North Carolina with a rally  from NC Progress, which called for an end to the Bush tax cuts for the wealthiest 2 percent and told the group to keep its hands off the middle-class wallet. The fixers are often vague about their mission, and they tend to speak in coded language that conceals their actual goals. Let’s have some blunt talk about what the fixers want to do and why they want to do it – talk you're unlikely to hear in mainstream media supported by corporate advertising.

1. “Fix” means cut: When they say “fix” Social Security, they mean cut Social Security. Fixers want to convince the public that a well-managed, hugely popular program that does not add to the deficit (it’s self-funded) is somehow in crisis and requires intervention in the form of various cutting schemes. They seek this because many of the rich do not want to pay taxes for Social Security, and financiers want very much to move toward privatization of retirement accounts so they can collect fees on such accounts.

2. “Reform” means rob. When the say “reform” the tax code, they mean “make taxes even lower for the rich.” The wealthy do not pay their fair share of taxes in the United States, which is a major reason there is a large deficit in the first place. When the very wealthy pay lower tax rates than ordinary working people, the result is an increasing redistribution of income upward that puts the U.S. in the top 30 percent in income inequality out of 140 nations, according to the Central Intelligence Agency [7]. We’re a shameful #42. Income inequality is not only unfair, it’s dangerous and makes society unstable.

3.“Bipartisan” means all of the rich. Fix the Debt is a pro-business ideological movement pretending to be a bipartisan group of concerned citizens. But the group is really just a coalition for the greedy, unpatriotic rich. There are plenty of financiers and other 1 percenters in the Democratic Party, and some of them have decided to join forces with their GOP counterparts to work toward a goal that means a great deal to all of them: Making the rich even richer.

4. “Concern” means covet. There was a time, a couple of generations ago, when business leaders would not dare to go public with their desire to increase income inequality and stick it to hard-working Americans. When Owen D. Young, CEO of General Electric in the '20s and '40s, spoke to an audience at Harvard Business School in 1927, he emphasized that the purpose of a corporation was to provide a good life not only to owners, but also to employees. Corporations, he said, were meant to serve the larger goals of the nation:

“Here in America, we have raised the standard of political equality. Shall we be able to add to that, full equality of economic opportunity? No man is wholly free unless he is both politically and economically free.”

Fast forward to 2012: Jeffrey Immelt, the current CEO of GE, is a member of the Fix the Debt Campaign, which is designed to lower the expectations of hard-working Americans. Goldman Sachs honcho Lloyd Blankfein explained this recently in a CBS interview:

 “You’re going to have to do something, undoubtedly, to lower people’s expectations of what they’re going to get, the entitlements, and what people think they’re going to get, because you’re not going to get it.” ~ Goldman Sachs CEOLloyd Blankfein

5. “Fiscal conservative” means economically confused. Longtime Wall Street executive Steve Rattner, one of Obama’s auto bailout czars, has been using his influence to attract tycoons from the financial industry to the Fix the Debt movement. Over the last year, Rattner has been on a crusade to convince Americans that they should put aside their worries about real crises like unemployment to focus on the deficit. Rattner, like many of his cohorts, poses as a moderate whose thinking is needed to counter the advice of respected economists like Nobel Prize-winners Paul Krugman and Joseph Stiglitz, who have long been warning that defict hysteria is not only counterproductive, but based on a lack of understanding of how the economy actually works.

Political economist Thomas Ferguson, who teaches at UMass Boston and is a senior fellow at the Roosevelt Institute, described the dubious policies the fixers defend:

“Talk about the audacity of hope! The people who brought you the Great Recession by pushing deregulation and financial leverage to insane dimensions are back. Now they propose to ‘fix the debt’ by throwing average Americans who generously bailed them out in 2008-09 over the fiscal cliff.

One trusts that even in our money-driven political system, their transparently self-interested nonsense will be firmly rejected. There is no reason why anyone needs to do anything at all about Social Security for a long time; as even Peter Orszag admits in the fine print. It just isn't a driver of the deficit.

The U.S. does need to reduce its spending on defense and it certainly needs to aggressively contain medical costs. But you do both of those the old fashioned way. In the case of defense, you stop plunging into wars and attend carefully to what actually is needed to defend America. In the case of medical spending, you end ‘fee for service’ schemes that reward endless tests and procedures and you vigorously pursue anti-trust and regulatory remedies. You don't simply cut Americans off from health care. It's ridiculous that we have ‘single payer’ for ailing banks, but not citizens. If you are worried about the deficit, just let tax rates rise back to the levels of the Clinton era, when growth ran far ahead of today's economy, and tax dividends, carried interest, and capital gains at the rates working Americans pay. And don't, absolutely don't, let American companies escape taxation by stashing their money abroad.”

6. "Strip-mining is not leadership." Fixers present themselves as magnanimous, responsible leaders doing what they believe is best for the country. But that’s a tough sell when you’re advocating policies that mainly benefit…yourself.

Economist Rob Johnson, director of the Institute for New Economic Thinking and also a senior fellow at the Roosevelt Institute, shared his view of the Campaign to Fix the Debt in an email. As he memorably put it, "strip-mining is not leadership":

“I believe that a convincing argument depends upon the demonstrated self-sacrifice of the leader offering a vision. This group does not appear to be doing something for the nation. They are doing something for their own self-interest (tax liability). There is confusion between: 1) what is good for business and therefore jobs, something we all should be concerned about; and 2) the personal benefit of CEOs based on who bears the burden of the debt reduction plan. This group does not seem to gain the credibility that comes from generous contribution through self sacrifice. As a result they will arouse great suspicion rather than inspire us as 'leaders' who are guiding the design of a just, productive and coherent society.  

With all of the suspicion of leadership in America,  business, media, scholars and politicians have to lead in a credible way. This just looks like guys defending their self-interest in a dysfunctional period of our nation's history because elites take so much for themselves.”

It's no secret that the wealthy have done extremely well over the last several decades, even since the Wall Street-driven financial crash that devastated millions of Americans. In 2010, the top 1 percent of U.S. families raked in as much as 93 percent of the country’s income growth, according to Emmanuel Saez, a UC Berkeley economist who looked at IRS data.

Which raises several important questions for Bowles, Simpson, Blankfein, Rattner & Co.: How much is enough? How far are you willing to tip the balance of income in the country toward the wealthy? What concern do you really have about the deficit, or for that matter, the future of America? Inquiring minds want to know. 

America's Staggering Wealth Divide

One of the Most Unequal Countries in the World

Inequality in America is even worse than it seems, with personal debt papering over the true state of affairs.

December 3, 2012  |  AlterNet  |  By Paul Bucheit

 

Most people associate inequality with the income gap. As distorted as the distribution of income may be, our wealth distribution is even more extreme. Americans are beginning to realize that years of preferential tax treatment for the rich, under the guise of "supply-side job creation" nonsense, have bloated the fortunes of the super-rich to a level that would make Rockefeller and Carnegie envious.

1. We're close to being the most unequal country in the world.

Among countries with at least a quarter-million adults, only Russia, Ukraine, and Lebanon are more unequal, according to the most recent figures ] from Credit Suisse Research .

An earlier report  by the same research team had indicated that Denmark and Switzerland were more unequal than the United States. While Switzerland is still high in the new data listing, ranking 18th, Denmark is actually rather equal relative to other countries, and received its dubious earlier position due to its own accurate reporting of household debt, as will be noted in Fact 5 below.

2. Wealth accumulation has been rigged for the rich.

The richest quintile of Americans owns 93% of non-home wealth. For Americans with incomes over $10 million, nearly half of their income comes from capital gains and dividends, on most of which they pay only a 15% tax. From 2002 to 2007, two-thirds  of all income went to the richest 1%. Then, in the first year after the recession, a startling 93% of all new income went to the richest 1%.

Massive wealth holdings have accumulated for the richest Americans not only because of their appropriation of income, but also because of their manipulation of the tax code. The 15% capital gains tax is their proudest accomplishment. Other ploys include carried interest, performance-related pay, stock options, and deferred compensation.

The imaginary 'work' of financial gain gets taxed at a much lower rate than real work. Through the years, as the rich have fattened up on stocks and other financial assets, the stock market has grown three times faster than the GDP. Yet American workers have not benefited from their own productivity. Their wages have flatlined  while the fruits of their labor have gone to investors.

3. As tax rates have gone down, income for the rich has gone up.

A Business Insider chart depicts the remarkable - yet reasonable - negative correlation between tax rates and the wealth of the super-rich. Over the past hundred years, every time tax rates have been decreased, the income percentage of the richest .01% has increased, and vice versa. Other  sources  confirm that changes in the tax rate have little to do with economic growth, and that the top tax rate can - and should - be much higher, up to 83%.

The Reagan-era myth of "higher taxes, less revenue" has been debunked. It's enough to convince any thinking American outside of Congress that our budget problems are rooted in an extraordinary degree of tax avoidance at the top.

4. "We should all cheer for the stock market" is a big scam.

The mainstream media would have us believe that the whole country depends on a rising stock market. But the lowest-earning three-fifths of Americans -- 60% of the population -- own just .2%  (one-fifth of one percent) of all wealth outside the home.

The Heritage Foundation and the American Enterprise Institute claim that wealth inequality has remained steady over the past century, even in the last 30 years. Both organizations cite a paper by Kopczuk and Saez , which shows that the share of wealth owned by the top 1% has decreased from the early 1900s to the early 2000s, possibly because the "democratization of stock ownership...now spreads stock market gains and losses much more widely than in the past."

While it's true that the percentages of net worth and financial wealth for the top 1% barely budged from 1983 to 2007, the percentages for the rest of the richest 5% increased by almost 20%. And the percentages for the poorest 80% of the population DECREASED by almost 20%.

In other words, the share of wealth owned by the top 1% leveled off because the "democratization of stock ownership" spread the wealth among just 5% of the population, those earning an average of $500,000 per year. A few people -- 5 out of 100 -- got very rich, but everyone else lost ground.

5. Debt has masked wealth inequality for 30 years

The authors of the Global Wealth Report  state: "Rising household debt...began around 1975. Before this date, the ratio of household debt to annual disposable income within countries remained fairly stable over time and rarely rose above 75%." Today, Americans are burdened with over $11 trillion  in consumer debt, including mortgages, student loans, and credit card liabilities. As the very rich have accumulated income and wealth, the middle class has kept up appearances by taking out loans.

However, that's only half the story. Private debt appears to be more manageable when public debt is low. Denmark has the highest household debt to wealth ratio in the world, but its government debt amounts to just 3% of the financial wealth of Danish households. The U.S. is at 32%. And our government debt as a percentage of GDP is 103%, one of the highest percentages in the world.

Conclusion: Where is all the wealth coming from?

According to the authors of the Global Wealth Report , the world's wealth has doubled in ten years, from $113 trillion to $223 trillion, and is expected to reach $330 trillion by 2017.

The UN definition of wealth  includes (1) natural capital: land, forests, fossil fuels, and minerals; (2) physical capital: buildings and infrastructure; and (3) human capital: the population's education and skills.

We need to add a 4th category: the magical creation of wealth by the financial industry.

Bush tax cuts and wars account for half the public debt by 2019

Mr. Burns explains the fiscal cliff: Give the rich money or we’ll kill the economy

25% of All Republicans Want To Secede from the US, poll says

One Quarter Of Republicans Want To Secede | Twenty five percent of registered Republicans want their state to secede from the United States, according to a new poll from Public Policy Polling. This new statistic comes just weeks after Mitt Romney’s loss prompted secession petitions from all 50 states on the White House website. Signatures grew into the hundreds of thousands on these petitions, with the state of Texas in the lead. GOP governors, however, have indicated that they will not be looking to leave the Union any time soon.

+++++

 

Police Can Record Video Inside Your Home Without A Warrant, Appeals Court Says

By Nicole Flatow on Dec 3, 2012 
ThinkProgress

Earlier this year, the U.S. Supreme Court provided some comfort to those fearing the seemingly limitless potential of new technologies to enable government privacy invasion. In holding that police could not attach a GPS device to a car and track it for 30 days without a warrant, the court said, “At bottom, we must ‘assur[e] preservation of that degree of privacy against government that existed when the Fourth Amendment was adopted.’”

But don’t get too comfortable. A federal appeals court ruled last week that police can secretly videotape a suspect’s home without a warrant. In a case about the suspected sale of bald eagle feathers and pelts – a misdemeanor crime — the U.S. Court of Appeals for the Ninth Circuit held that undercover police admitted into the suspect’s home as interested buyers of pelts did not violate the Fourth Amendment when they secretly videotaped the suspect’s home:

We are persuaded that it is not “constitutionally relevant” whether an informant utilizes an audio-video device, rather than merely an audio recording device, to record activities occurring inside a home, into which the informer has been invited. When Wahchumwah invited Agent Romero into his home, he forfeited his expectation of privacy as to those areas that were “knowingly expose[d] to” Agent Romero. Wahchumwah cannot reasonably argue that the recording violates his legitimate privacy interests when it reveals no more than what was already visible to the agent.

The decision doesn’t entirely break new ground. At least one other federal appeals court has upheld the use of video recordings inside the home, and just last month, a lower federal court reached a similar conclusion.

But the case raises the same sorts of concerns that several concurring justices emphasized in the U.S. Supreme Court’s decision last term in United States v. Jones: What scope of surveillance will not violate our present understanding of a “reasonable expectation of privacy”? At what point are we, as Justice Sonia Sotomayor cautions in Jones, “making available at a relatively low cost such a substantial quantum of intimate information about any person whom the Government, in its unfettered discretion, chooses to track, may ‘alter the relationship between citizen and government in a way that is inimical to democratic society’”? Electronic Frontier Foundation staff attorney Hanni Fakhoury elaborates on this concern:

[T]he sad truth is that as technology continues to advance, surveillance becomes “voluntary” only by virtue of the fact we live in a modern society where technology is becoming cheaper, easier and more invasive. The Wahchumwah case exemplifies this: on suspicion of nothing more than the benign misdemeanor of selling eagle feathers, the government got to intrude inside the home and record every intimate detail it could: books on a shelf, letters on a coffee table, pictures on a wall. And we’re entering an age where criminal suspicion is no longer even necessary. Whether you’re calling a friend’s stolen cell phone and landing on the NYPD massive database of call logs, driving into one of the increasing number of cities using licenseplatescanners to record who comes in or out, or walking somewhere close to hovering drones, innocent people are running the risk of having their personal details stored in criminal databases for years to come.

The fractured majority in United States v. Jones didn’t provide much guidance about where the court will draw future lines on surveillance, relying instead upon the fact that the Jones case involved a physical trespass — a type of privacy violation of particular constitutional concern. Of course, the Ninth Circuit case involved a physical intrusion in the place subject to the greatest Fourth Amendment protection – the home. Whether it became something other than a trespass — and sufficient grounds to authorize invasive surveillance – because the suspect unknowingly admitted the undercover officer into his home is another question that may be for ripe for Supreme Court consideration.

The Healing Power of Marijuana Has Barely Been Tapped

By Allan Badiner | Alternet

Medical marijuana is now legal in 18 states, but it's clear we've discovered a fraction of its potential for health.

 

There are now legal medical cannabis programs in 18 states plus Washington, DC, with pot fully legal for adults in two other states. Ironically, however, the actual healing power of the plant has barely been tapped. Smoking marijuana with THC (tetrahydrocannabinol), or better, vaporizing it (using a device to bake the plant material and inhale the active ingredients), has an indisputably palliative effect and can be medically useful for pain relief, calming and appetite stimulation. It already has confirmed benefits against glaucoma, epilepsy and other specific diseases and disorders. It also gets people high. THC triggers cannabinoid receptors in the brain and this produces the sensation of being stoned. These receptors are found in the parts of the brain linked to pleasure, memory, concentration, and time perception.

But, based mostly on research overseas there is an increasing consensus that the medicinal benefits of psychoactive THC pale in comparison to the non-psychoactive cannabidiol (CBD) from the leaves of the same plant--raw and unheated. Depending on the strain, some plants are high in CBD but also contain a lesser amount of THC which is said to enhance the healing potentiality. CBD does not make people feel “stoned” and actually counters some of the effects of THC (for example, suppressing the appetite vs. stimulating it). CBD is beginning to be recognized by researchers at mainstream medical institutions around the world as a potentially very powerful weapon against cancer.  

 

Researchers Sean D. McAllister and Pierre Desprez, who conducted studies of CBD's effect on cancer cells for California Pacific Medical Center, suggest that these non-psychoactive compounds from the cannabis plant might, in short order, render chemotherapy and radiation distant second and third options for cancer patients. Based on a more recent study, McAllister and Desprez feel that CBD's "could stop breast cancer from spreading."

 

Dr. Donald Abrams, a cancer specialist and professor of integrative medicine at UCSF, conducted early trials involving THC medical cannabis, and now he is excited about the powerful impacts of CBD on cancer cells. The National Cancer Institute was busy researching this in the 1970s, Abrams explains, but restrictions on the use of cannabis for research in the United States resulted in most of the research on this subject disappearing in the U.S., and being picked up in other countries, such as Israel, Spain and Italy. He says existing studies point to a remarkable ability of CBD to arrest cancer cell division, cell migration, metastasis, and invasiveness. 

 

Other studies point to CBD as having great promise as a defense against Alzheimer’s disease. In a 2006 study published in Molecular Pharmaceutics, a team of University of Connecticut researchers reported that cannabis “could be considerably better at suppressing the abnormal clumping of malformed proteins that is a hallmark of Alzheimer’s disease than any currently approved prescription.” The research team predicted that cannabinoid-based medications "will be the new breakout medicine treatments of the near future.” 

 

Medical cannabis has a long history of use, starting in India, and then in China and the Middle East some 6,000 years ago. It came to the West in the 1800s, where it was listed in the U.S. Pharmacopeia until the 1930s. Used for over 100 ailments, cannabis was a favorite of our grandparents for cough remedies, analgesics, and tonics and was available over the counter at every local drugstore as well as companies such as Sears, Roebuck and Co. Banned in 1937 via the Marijuana Tax Act as part of a politically and racially driven prohibition craze, it was gradually removed from the pharmacopeia and research was discouraged and later prohibited via drug scheduling. The FBI linked the herb with insanity and claimed a direct correlation between cannabis and violence, and even death, especially when used by people of color.

Currently, science increasingly recognizes the role that cannabinoids play in almost every major life function in the human body. It wasn't until 1990 that endocannabinoids, produced by the human body, were discovered to act as a bio-regulatory mechanism for most human life processes and have receptors sites throughout the human body. CB2 receptors are found almost exclusively in the immune system, with the greatest density in the spleen. These CB2 receptors appear to be responsible for the anti-inflammatory and other newly recognized and very significant therapeutic effects of cannabis. 

 

Cannabis medicine has distinct advantages. CBD, as well as THC, can be given in massive doses with no side effects. In fact, it has performed very effectively as an anti-psychotic when given in high doses. CBD selectively targets and destroys tumor cells while leaving normal healthy cells unmolested. On the other hand, chemotherapy and radiation are highly toxic and indiscriminately injure healthy cells in the brain and the body. Industrial hemp is often high in healing CBD and very low in THC. Hemp CBD is a waste product -- it's thrown out by the ton every year when it could easily be harvested for tumor shrinking.  

 

Medical cannabis farm Tikun Olam in Israel has been developing a strain of cannabis that is high in CBD (15.8%) but very low in THC (1%). This new strain is called Avidekel and seems to have the highest CBD to THC ratio of any other variant strain. Zack Klein of Tikun Olam told Reuters: “Sometimes the high is not always what is needed. Sometimes it is an unwanted side effect. For some of the people it’s not even pleasant.”

 

The THC industry and its users worry that once CBD medicine grows in popularity, the medical badge might be torn from the sticky buds that makes being "stoned" possible. Aside from THC's significant medical benefits, surely its ability to make people feel happier and less stressed should not be considered without therapeutic value. More likely, all options will thrive, and 1,000 cannabis flowers will blossom: Indica, Sativa, CBD + THC, CBD Only, etc.

 

Meanwhile, it's useful to note that since 2003, the U.S. federal government has held a "medical patent" for the marketing of cannabinoids as antioxidants or neuroprotective agents. The patent states that cannabinoids are "useful in the treatment and prophylaxis of wide variety of oxidation associated diseases such as inflammatory and autoimmune diseases. The cannabinoids are found to have particular application as neuroprotectants, for example in limiting neurological damage following ischemic insults, such as stroke and trauma, or in the treatment of neurodegenerative diseases, such as Alzheimer's disease, Parkinson's disease and HIV dementia."

 

However, stoners may have it all wrong, medically speaking. It is unlikely a person can get a sufficient level of cannabidiol (pronounced kan-nəbə-dī'-ˌȯl) from smoking the raw plant to impact diseases like cancer in a curative manner, says Desprez. The marijuana plant offers many uses, but it may come as a surprise to most users that you have to choose early in a plant's life if you want it to make you high or to heal you. Research suggests that cannabis is most beneficial when the whole spectrum of cannabinoids are represented, including some THC. It is the ratio of cannabinoids in a specific strain of cannabis that most determines its therapeutic potential. Juicing the cannabis leaves raw, along with some carrots or other green veggies, has proven very beneficial as it involves the ingestion of the acid form of cannabinoids, which are non-psychoactive (even the THC). Cannabis oil also has enthusiastic fans who claim it has cured their cancers.

 

In India there are still large numbers of people who partake in an ancient practice of having a fresh raw cannabis drink called "Thandai"  in which fresh cannabis leaves are made into a paste along with almonds, milk and sugar. This tasty drink is often consumed at religious festivals, and in some cities the government maintains distribution points for cannabis. A rolled sweet ball with similar ingredients is called "Bhang," familiar for over a century to many Western seekers walking the ghats of sacred Banaras.

 

Cannabis edibles in the West are emerging as one of the fastest growing new sectors of the food industry. Dispensaries in 18 states offer such goodies as ice cream, cough drops, peanut butter, honey, saliva tea, and myriad baked goods and savory snacks--all dosed with THC.  Given the huge potential market for non-psychoactive cannabis, the introduction of CBD-rich medicine at the dispensary level has been surprisingly sluggish. Owners have been reluctant to stock CBD-rich strains or edibles because their present customers are seeking —or are not adverse to— cannabis that provides euphoria or sedation. THC content is a known seller. Once the medical benefits of non-psychoactive cannabis become more widely known, one can only imagine the variety and volume of CBD-rich foods that will rush to market.

 

Smoking, as opposed to vaporization, may be the least effective method of using cannabis as a medicine. But many raw cannabis users are convinced that CBD is the source of medical miracles. Restrictions on research have impacted the accuracy with which we can prescribe cannabis and determine the most effective and least harmful ways to utilize its benefits. Perhaps in the very near future, instead of smoking cannabis to reduce nausea from chemotherapy, cancer patients will be consuming raw non-psychoactive cannabis, and be healed without having to suffer the additional damage of radiation and chemotherapy at all.

 

The Trans-Pacific Partnership: What "Free Trade" Actually Means

Saturday, 01 December 2012
By Andrew Gavin Marshall, Occupy.com | News Analysis

To discuss “free trade agreements” or the “free market,” we must first identify the theoretical versus the functional definitions of these terms – because theoretical definitions look at what those terms should mean, whereas functional definitions look at what the terms mean actually.

The theoretical definition of a “free market” is one in which every individual actor in the realm of exchange exists in a state of equality of opportunity; where all compete with one another to produce the best products at the cheapest prices for consumers, thus the most innovative and efficient producers succeed while others fail, unregulated - and unhelped - by the state. Within “free markets,” what we call “free trade agreements” are meant to reduce barriers such as tariffs, subsidies and regulations so that market "competitors" can freely move products and goods across borders and compete in an ever-expanding global “free market."

The functional, or technical, definition of a “free market” is one in which the state regulates the market – the realm of economic exchange and activity – for the benefit of large transnational corporations and banks.

Barriers to profits, such as environmental, labor, safety and financial regulations, are dismantled. Meanwhile, subsidies and legal rights and protections are granted to major corporations, undermining competition and supporting monopolization. So while the rhetoric of “free markets” tends to be all about reducing state interference in the economy, in actuality state interference increases - but only for the benefit of large corporations and banks.

At the same time, state “interference” decreases in sectors that benefit the actual population, such as welfare, social services, pensions, healthcare, education, labor protections and so on. In the actual "free market," these protections are dismantled, subjecting populations to “market discipline” quite unlike the large corporations and banks that receive direct protection against “market discipline.” The most obvious example of this is the post-2008 bank bailouts.

In a theoretical “free market,” all the banks that gambled badly would have failed and collapsed. But with the functional “free market” we have today, the banks went to the state and got bailed out with trillions of dollars of taxpayer money.

The same dichotomy exists for the term “free trade agreement,” which in theory is the opposite of “protectionism,” where states intervene in the market by establishing tariffs, regulations, subsidies and protections for various imports and exports, thus undermining the “free market.”

The technical definition, however, is one in which protectionism is rampant, with enormous subsidies and protective barriers, and very often includes thousands of pages of regulations and provisions. But because all of this is done to protect corporate and financial interests, it is called “free trade.” It is “protectionism” if the barriers, regulations and protections benefit the nation or population and prevent transnational corporations and banks from having unhindered access to the “market”?

Likewise, is it “free trade” if the barriers, regulations, and protections benefit corporations and banks at the expense of the nation and population? In actuality, so-called “free trade” is a drain on the economy, creates enormous national debts, undermines labor, creates poverty and exploitation, wastes natural resources and devastates the environment. However, it is very profitable for banks and corporations, so is endlessly repeated as something “good” and “necessary.”

In theory, “free trade” would enhance competition because it would allow all parties to compete on an even playing field internationally, thus companies would have to find ways to lower their costs of production while increasing their product standards, ultimately decreasing the final price to consumers. In this theoretical form of "free trade," the best and cheapest product, the company that made it, and the consumer and society as a whole would all benefit.

The reality is the exact opposite: the production cycle is broken up (this is commonly called “offshoring”), which increases the use of transportation, resources and the overall cost of production, making the final product more expensive to consumers. Case in point is the North American Free Trade Agreement (NAFTA), where competition between corporations is undermined while access to resources and markets is enhanced, subsidized and protected.

Corporate cooperation with each other and the state is enhanced while the poor, working and middle classes of Canada, the United States and Mexico are put in direct competition with each other. Corporations in Canada and the U.S. close their factories and move them to Mexico where labor is cheaper, increasing unemployment and poverty, destroying unions and labor protections, and forcing down wages while costs and corporate profits increase.

The role of the state is to regulate these markets and agreements for the benefit of the corporations and banks, and to force the populations to compete with each other in a race to the bottom: market monopolization for the elite, and market discipline for the population.

The break-up of the production cycle, especially from the late 1980s onward, has redefined what “trade” actually is. Typically, we think of trade as a system where countries export and import products or goods. With the era of “free trade,” the production cycle was no longer confined within national borders, and was broken up between several countries.

The result was that a large percentage of what we call “trade” is actually one corporation moving parts or goods to a subsidiary or another corporation in a different country, to continue the production cycle until it returns to the home country as a finished product for consumption.

This is referred to as “intra-industry trade” (transporting parts or goods between corporations) or “intra-firm trade” (transporting parts or goods between a corporation and its subsidiaries). When the parts move across borders, often several times before the final product is created, customs agents at borders register the cumulative value of those products as a “traded” good, and these numbers are then used to determine the “actual contribution” of that good to the economy.

For example, a product which has parts manufactured in Canada, assembled in Mexico, and sold in the United States, would have to cross borders several times before it becomes a final product. Each time the parts cross a border, the total value of those parts at that time of transport gets registered as an import/export, instead of differentiating between the value added at each part of the production cycle. Thus, the statistics of exports and imports become heavily skewed and inflated since they do not account for “value-added.” While the production cycle is broken up over several countries, the determination of “value” is not broken up to fit the actual trading system as it exists.

For a hypothetical comparison to reveal how absurd this process is, imagine a country that attempts to measure the total education of its population by including in its statistics the degrees and credentials of all the tourists who entered the country for short periods of time. The recorded education level of the country’s population would be enormously inflated, since the educated tourists entering the nation would not be staying and contributing their education to the benefit of the society. Something similar happens when parts move across borders several times before they become a finished product, yet have their total value registered each time they cross a border.

According to a report from a Canadian think tank, the Conference Board of Canada, if countries were to apply a “value-added” measurement of trade instead of using inflated numbers applied to the cumulative value of a good, the actual contribution of trade to a country would rapidly diminish. In conventional measurements, trade accounts for 35% of Canada’s economy, but with the value-added measurement, it drops to 24%. These manipulations are important because they serve as a basis for claiming that countries like Canada are “trade dependent” nations, which justify implementing more “free trade” agreements.

When a country imports more than it exports, it builds up a large amount of debt called a trade deficit. When a country exports more than it imports, it establishes a trade surplus. However, because the process of determining the value of imports and exports is enormously inflated and misleading, countries are saddled with inflated and inaccurate debts. They are then pressured into reducing those debts through austerity measures, which punish those countries' populations into poverty.

Apple is a great example of this process, often hailed as one of the great corporate success stories, being enormously profitable and therefore “good for the economy.” As the Asian Development Bank Institute in Tokyo reported in 2010, while Apple is a U.S.-based company, the iPhone is itself considered to be a Chinese export to the U.S. The iPhone is produced in many different pieces and parts through several Asian and European countries, which are then transported to China where they are assembled and shipped to the United States and elsewhere.

The estimated value of the Chinese laborers in assembling the iPhone was 3.6% (or $6.50) of the total value of the finished product, estimated at $178.96 in 2009. Yet, the wholesale cost of the shipped iPhone is credited to China as an export. China was merely the last stop in the production cycle, but China records the total value of the finished product as an export, while the United States records it as an import. Thus, the researchers at the Asian Development Bank Institute concluded that “even high-tech products invented by U.S. companies will not increase U.S. exports.”

Pascal Lamy, director-general of the World Trade Organization (WTO), commented, “What we call ‘Made in China’ is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries... The concept of country of origin for manufactured goods has gradually become obsolete.”

If trade statistics were adjusted to reflect the actual value contributed to a given product by a country, the U.S. trade deficit with China (which in 2010 stood at $226.88 billion) would likely be cut in half. In 2009, the iPhone left the United States with a $1.9 billion trade deficit with China, but if the value-added approach to determining trade statistics were applied, the United States would have a $48 million trade surplus with China (in relation to the iPhone alone).

With the production cycle broken up and scattered around the globe, this adds enormous costs to transportation of equipment, machinery, goods and products between these nations, which in turn requires enormous quantities of oil and fuel to facilitate this transport system, and thus produces unnecessary amounts of pollution. Because of the high costs of transportation, fuel, and assembly, the value of the end product goes up, making it far more costly than if it were simply produced in one or two countries.

With countries determining their exports and imports based on inflated and inaccurate statistics, populations are saddled with enormous debts and thus the financial cost of breaking up the production cycle lands on the shoulders of the population, who were already subjected to increased competition between labor forces, reduced environmental and social protections, dismantled subsidies and regulations, increased personal debt and poverty.

So if “free trade agreements” are bad for people, bad for labor – at home and abroad – and bad for the environment and the nation as a whole, why are they pursued?

The answer is simple: they create enormous profits for banks and corporations, whose losses are subsidized by the state. In an actual “free market,” breaking up the production cycle would be far too costly to be a rational choice for a corporation, but because the state takes on the cost of doing so (largely through its trade deficit), the process continues.

When it comes to agreements like the Trans-Pacific Partnership, it is not difficult to see what the results will be: increased subsidies, protections and regulations for the benefit of large corporations and banks (notably the 600 corporations involved in secretly drafting the agreement over recent years) and decreased protections, subsidies and regulations that benefit the population, environment and society as a whole.

The TPP advances corporate monopolistic protections through intellectual property rights; undermines labor protections, putting the working class of 11 different nations in direct competition with one another; dismantles environmental protections and financial regulations; and expands corporate rights and privileges to allow undemocratic corporate institutions to challenge national laws through an unaccountable international tribunal of corporate lawyers who are given powers to overturn national laws or demand immense compensation from any nations that hinder those corporations' “potential profits,” thus further increasing the heavy cost of “free trade.”

The Occupy movement and other activists have a strong mandate to oppose the TPP and all related “free trade agreements.” Popular opinion is swinging against “free trade” as people seem instinctively to recognize – even without all the details – that such agreements undermine labor, increase debt and benefit only the rich.

But while public opinion may oppose the TPP in principle, the bigger problem is that "the public" does not know the TPP even exists. This is a challenge that the Occupy movement can step up to: promoting an educational campaign that crosses borders, organizing international protests and actions against the TPP, and establishing a “free market” of resistance based upon the “free trade” of information.

As corporate rights expand and democratic rights decrease, so must people demand an end to the TPP. Organized resistance, information and action have stopped “free trade agreements” in the past, and they can – and must – do so in the future. The coming corporate tyranny of the Trans-Pacific Partnership can only be defeated through a democratic movement of Transnational People Power.

Our already frail and dying democratic institutions lack the capacity to take up the challenge, so the challenge now rests with the people alone.

Our Collapsing Economy and Currency

By: Paul Craig Roberts| December 1, 2012 | 

Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries--wars that have benefited only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

The hoax is the propaganda that the fiscal cliff can be avoided by reneging on promised Social Security and Medicare benefits that people have paid for with the payroll tax and by cutting back all aspects of the social safety net from food stamps to unemployment benefits to Medicaid, to housing subsidies. The right-wing has been trying to get rid of the social safety net ever since Franklin D. Roosevelt constructed it, out of fear or compassion or both, during the Great Depression.

Washington’s response to the fiscal cliff is austerity: spending cuts and tax increases. The Republicans say they will vote for the Democrats’ tax increases if the Democrats vote for the Republican’s assault on the social safety net. What bipartisan compromise means is a double-barreled dose of austerity.

Ever since John Maynard Keynes, economists have understood that tax increases and spending cuts suppress, not stimulate, economic activity. This is especially the case in an economy such as the American one, which is driven by consumer spending. When spending declines, so does the economy. When the economy declines, the budget deficit rises.

This is especially the case when an economy is weak and already in decline. A declining economy means less sales, less employment, less tax revenues. This works against the effort to close the federal budget deficit with austerity measures. Instead of strengthening the economy, the austerity measures weaken it further. To cut unemployment benefits and food stamps when unemployment is high or rising would be to provoke social and political instability.

Some economists, such as Robert Barro at Harvard University, claim that stimulative measures, the opposite of austerity, don’t work, because consumers anticipate the higher taxes that will be needed to cover the budget deficit and, therefore, reduce their spending and increase their saving in order to be able to pay the anticipated higher taxes.

In other words, the Keynesian effort to stimulate spending causes consumers to reduce their spending. I don’t know of any empirical evidence for this claim.

Regardless, the situation on the ground at the present time is that for the majority of people, incomes are stretched to the limit and beyond. Many cannot pay their bills, their mortgages, their car payments, their student loans. They are drowning in debt, and there is nothing that they can cut back in order to save money with which to pay higher taxes.

Many commentators are complaining that Congress will refuse to face the difficult issues and kick the can down the road, leaving the fiscal cliff looming. This would probably be the best outcome. As the fiscal cliff is a result, not a cause, to focus on the fiscal cliff is to focus on the symptoms rather than the disease.

The US economy has two serious diseases, and neither one is too much welfare spending.

One disease is the offshoring of US middle class jobs, both manufacturing jobs and professional service jobs such as engineering, research, design, and information technology, jobs that formerly were filled by US university graduates, but which today are sent abroad or are filled by foreigners brought in on H-1B work visas at two-thirds of the salary.

The other disease is the deregulation, especially the financial deregulation, that caused the ongoing financial crisis and created banks too big to fail, which has prevented capitalism from working and closing down insolvent corporations.

The Federal Reserve’s policy is focused on saving the banks, not on saving the economy. The Federal Reserve is purchasing not only new Treasury bonds issued to finance the more than one trillion dollar annual federal deficit but also the banks’ underwater financial instruments, taking them off the banks’ books and putting them on the Federal Reserve’s books.

Normally, debt monetization of this amount results in rising inflation, but the money that the Federal Reserve is creating in its attempt to manage the public debt and the banks’ private debt is hung up in the banking system as excess reserves and is not finding its way into the economy. The banks are too busted to lend, and consumers are too indebted to borrow.

However, the debt monetization poses a second threat that is capable of biting the US economy and consumer living standards very hard. Foreign central banks, foreign investors in US stocks and financial instruments, and Americans themselves observing the Federal Reserve’s continuous monetization of US debt cannot avoid concern about the dollar’s value as the supply of ever more dollars continues to pour out of the Federal Reserve.

Already there is evidence of central banks and individuals moving out of dollars into gold and silver bullion and into other currencies of countries that are not hemorrhaging debt and money. According to John Williams of Shadowstats.com, the US dollar as a percentage of global holdings of reserve assets has declined from 36.6% in 2006 to 28.7% in 2012. Gold has increased from 10.5% to 12.8% and other foreign currencies except the euro increased from 38.4% to 44.4%.

Russia, China, Brazil, India, and South Africa intend to conduct trade among themselves in their own currencies without use of the dollar as reserve currency. The EU countries conduct their trade with one another in euros, and although not reported in the US media, Asian countries are discussing a new common currency for trade among themselves.

The world is abandoning the use of the dollar to settle international accounts, and the demand for dollars is falling as the Federal Reserve increases the supply of dollars.

This means that the price of the dollar is threatened.

Concern over the dollar means concern over dollar-denominated financial instruments such as stocks and bonds. The Chinese hold some $2 trillion in US financial instruments. The Japanese hold about $1 trillion in US Treasuries. The Saudis and the oil emirates also hold large quantities of US dollar financial instruments. At some point the move away from the dollar also means a move away from US financial instruments. The dumping of US stocks and bonds would destabilize US financial markets and wipe out the remainder of US wealth.

As I have previously written, the Federal Reserve can create new money with which to purchase the dumped financial instruments, thus maintaining their prices. But the Federal Reserve cannot print gold or foreign currencies with which to buy up the dollars that foreigners are paid for their US stocks and bonds. When the dollars in turn are dumped, the exchange value of the dollar will collapse, and US inflation will explode.

The onset of hyperinflation can be as sudden as the collapse of a currency’s exchange value.

The real crisis facing the US is the impending collapse of the US dollar’s foreign exchange value. The US dollar’s value in relation to silver and gold has already collapsed. In the past ten years, gold’s price in US dollars has increased from $250 per ounce to $1,750 per ounce, an increase of $1,500. Silver’s price has risen from $4 per ounce to $34 per ounce. These price rises are not due to a sudden scarcity of gold and silver, but to a flight from the dollar into the two forms of historical money that cannot be created with the printing press.

The price of oil has risen from $20 a barrel ten years ago to as high as $120 per barrel earlier this year and currently $90 a barrel. This price rise has come about despite a weak world economy and without any supply restrictions other than those caused by the attempted US occupation of Iraq, the Western assault on Libya, and the self-harming Western sanctions on Iran, impacts most likely offset by the Saudis, still Washington’s faithful puppet, a country that pumps out its precious life fluid in order to save the West from its own mistakes. The moronic neoconservatives wish to overthrow the Saudi Arabian government, but what more faithful servant has Washington ever had than the Saudi royal house?

What can be done? For a number of years I have pointed out that the problem is the loss of US employment, consumer income, GDP, and tax base to offshoring. The solution is to reverse the outward flow of jobs and to bring them back to the US. This can be done, as Ralph Gomory has made clear, by taxing corporations according to where they add value to their product. If the value is added abroad, corporations would have a high tax rate. If they add value domestically with US labor, they would face a low tax rate. The difference in tax rates can be calculated to offset the benefit of the lower cost of foreign labor.

As all offshored production that is brought to the US to be marketed to Americans counts as imports, relocating the production in the US would decrease the trade deficit, thus strengthening belief in the dollar. The increase in US consumer incomes would raise tax revenues, thus lowering the budget deficit. It is a win-win solution.

The second part to the solution is to end the expensive unfunded wars that have ruined the federal budget for the past 11 years as well as future budgets due to the cost of veterans’ hospital care and benefits. According to ABC World News, “In the decade since the Sept. 11, 2001 terrorist attacks on the World Trade Center, 2,333,972 American military personnel have been deployed to Iraq, Afghanistan or both, as of Aug. 30, 2011 [more than a year ago].” These 2.3 million veterans have rights to various unfunded benefits including life-long health care. Already, according to ABC, 711,986 have used Veterans Administration health care between fiscal year 2002 and the third-quarter of fiscal year 2011. http://abcnews.go.com/Politics/us-veterans-numbers/story?id=14928136#1

The Republicans are determined to continue the gratuitous wars and to make the 99 percent pay for the neoconservatives’ Wars of Hegemony while protecting the 1 percent from tax increases.

The Democrats are little different.

No one in the White House and no more than one dozen members of the 535 member US Congress represents the American people. This is the reason that despite obvious remedies nothing can be done. America is going to crash big time.

And the rest of the world will be thankful. America along with Israel is the world’s most hated country. Don’t expect any foreign bailouts of the failed “superpower.”