Divided We Fall: a Tale of Two Economic Realities

The American Economy Continues to Slide, But There’s Plenty of Optimism at the Top
by JASON HIRTHLER


“Teach these boys and girls nothing but Facts. Facts alone are wanted in life.” These lines from schoolmaster Thomas Gradgrind open Charles Dickens’ Hard Times, which satirized the quantitative ethics of 19th century utilitarians. The simple premise of utilitarianism pioneered by Jeremy Bentham was that an action or policy should be judged by a single criterion: whether or not it contributed to the greatest happiness of the greatest number. It can feel, living in the early 21st century, that our leaders are operating on a principle of anti-utility, seeking the greatest happiness of the numerical few. The Washington establishment would dispute the truth of this claim, but then, as three examples will suggest, elites answer to a separate reality. To paraphrase Scott Fitzgerald, let me tell you about the very rich. Their facts are different from yours and mine.

The C-Suite and Main Street

Earlier this month, March job figures coughed up a slim volume of 85,000 new jobs, and the unemployment rate ticked down to 7.6 percent from 7.7 percent in February. As happens every month in this comical pantomime, the facts are shotgunned into the public consciousness by venerable propagandists like The New York Times and Washington Post, and the semi-articulate cable networks. The State Department then steps forward to impart a few rosy sentiments, although providing the necessary cautionary language lest our optimism overwhelm us.

The positivity of the official interpretation of the jobs report was belied by the 663,000 more citizen-consumers who slipped behind the black curtain of idle despair (47 percent of them women), not even bothering to seek work. According to Mike Gimbel, an analyst for socialist weekly Workers World, adding the decrease in the active labor force to the number of workers with insufficient part-time work, the unemployment rates skyrockets north of 20 percent. Nearly 90 million American adults are now out of the labor market, a new threshold of despair. (That’s nine times the number of unemployed at the height of the Great Depression, when there were only 123 million people in the country.) The jobs report complemented the specter of the sequester or a grand bargain still swirling overhead, promising to slice four trillion dollars from the economy over the next decade.

Yet a recent Financial Times survey of 400 global senior executives reports new optimism among business leaders, who project economic and industry improvements in the next six months. This peculiar optimism of corporate leadership, even amid the collapsing scenery of American society, is revealing on two levels. First, it evinces the degree to which Fortune 500s have uncoupled themselves from the American consumer market. The United States may be sliding toward Third World conditions, but expanding segments of Brazil and China are racing toward First World abundance. These markets, not ours, have laid claim to the attentions of corporate profiteers. What does it matter to the multinational if median income in the U.S. has climbed a mere $59 since 1966, when Brazil’s per capita income has nearly doubled since 1999? One salient example: Nearly seventy percent of Coca-Cola’s revenue comes from outside the U.S. In the first quarter of 2013, its international sales volume grew three times as fast as its American volume. Over the next five years, Coke plans to spend $30 billion on international expansion in China, India, Russian, and the Middle East. So long as one continent is in the ascendant, the fall of another is of little interest.

Second, the survey elicits the degree to which Wall Street financial markets have untethered themselves from Main Street industry. Industrial manufacturing has been in heavy decline as a percentage of American GDP, from a peak of 34 percent in the fifties to about 11 percent now. Perhaps as corollary, the GDP share held by the financial sector is on a steady uptick, now over eight percent and rising, while the total turnover of financial markets is many times our GDP. Derivatives, exempted from tepid Dodd Frank controls, are being purchased in bulk every month by the Fed, which is also holding interest rates at zero, ensuring banks can borrow for nothing, swivel on a dime and fleece credit card desperados at 18% a month. Why should corporate leaders care that it is slowly gaining a huge reserve army of American labor, to use Karl Marx’s term, which it can one day play off against some arriviste working class in a BRIC country?

Madison Ave and the 90 Million

Much like the heady delirium in the boardroom, these shadow facts too infrequently penetrate the optimistic consciousness of our vast marketing industry. As oil pipelines hemorrhage and radioactive waters sieve into the soil, we are admonished by a new nationally broadcast ad for the Acura RXL: “You wake up in your luxury bed and slide out of your luxury sheets. You get into your luxury shower and dry off with your luxury towel. You put on your luxury suit and your luxury watch. You grab your luxury coffee from your luxury coffee maker, and add some luxury sugar. You step out of your luxury house and step into your luxury car…which makes everything else seem ordinary.” Another class of commercials trots out sonorous-voiced actors like Tommy Lee Jones to lean on farm fences and talk about retirement planning, while Matt Damon’s soothing voice reminds how “common sense” is all we need to build a halcyon tomorrow. It always seems a healthy number of the wide-grinned retirees portrayed zooming down the California coast are minorities, often the African-Americans who lost half their wealth during the housing collapse.

What must the mass unemployed think as the television drones forth with this condescending drivel? The Boston Globe reports on a study by the Urban Institute that claims Generation X and Y—the two generations following the Boomers—have saved less than their parents did in their early adulthood: “Stagnant wages, diminishing job opportunities, and lost home values are behind the issue and have kept young Americans from saving even as the economy doubled from the early 1980s, the study found.”

The drear state of the economy is compound by what the young do to counteract it—take out loans. The Globe story notes, ‘’‘People in my generation are of the opinion that it’s OK to take out tens of thousands of dollars in student loans,’’ said Young, who graduated in May 2012. ‘‘That puts them in debt right away.’’’ The article concludes that, with no savings, Gen X and Y will rely more on the social safety net, the very programs millionaires Barack Obama and John Boehner are so anxious to cut. But millionaires can afford to be utopian, hence the blandishments about the road to a stronger America.

If the actor in the Acura commercial were a genuine luxury guy living a genuine luxury life, and his address were placed on a title screen at the end of the ad, I suspect a large mob drawn from the 90 million unemployed would soon descend on his luxury house. As Obama rather imperiously told a frightened assembly of derivatives kingpins during the collapse, “I’m the only thing standing between you and the pitchforks.” Of course, the commercial is just another tawdry piece of condescension foisted on the masses from Madison Avenue, but it artlessly demonstrates the second disconnect in our storyline—between the media and the masses. The Acura RXL lists at $48,450. Average per capita debt is $47,500.

The White House and the Poor House

It was Freud who said that if you wanted to know human nature, simply reverse its clearest moral injunctions. If we are forbidden to steal, it is because we are thieves. If adultery is verboten, it is because we are covetous. By that measure, perhaps we can discern the aims of Washington by reversing the desires of the American public. (Much like we can find countries that receive the most American aid by seeking out the nations with the most egregious human rights abuses.)

Testing Freud’s formula bears some interesting results. According to relentlessly consistent polling numbers, we oppose cuts to social spending such as education and Social Security and favor national health insurance provided by the government. Yet the policies we receive from either wing of the Business Party are healthcare reform that will leave millions still uninsured (but usefully fined), higher defense spending, lower education spending, and aggressive interventions across the planet. Far less than half of Americans want to prioritize immigration and gun control, but these topics dominate media coverage. We want jobs and a strong economy before a level deficit. Yet we get an austerity package designed to slow the economy and job growth. Even though our paychecks have flatlined for forty years, and our schools are growing poorer and our prescriptions dearer. Even though sixty percent of the jobs created by the stimulus were part time, and the piddling median wage in 2011 was $26,965.

At a macro level, the Freudian formula works the same. The Journal of the Academy of Arts & Sciences recently reported on the disparity between public opinion and policy. In polling, large majorities have favored federal policies to cut greenhouse emissions, even supporting tax breaks for corporations that reduce emissions—a stance that reflects global consensus on the reality of climate change and the need to do something about it. In fact, 118 countries have set national targets for renewable energy (RET). As the formula predicts, the U.S. has no national renewable energy target, placing it on the regressive right of the global political spectrum.

While nearly two thirds of Americans favorable developing renewables over oil, gas, and coal, we churn ahead with oil, gas, and coal exploration and encourage states to draft their own environmental targets. Extraction is keeping the federal government too busy to deal with such peripheral concerns. Substitute your own favorite federal failing and watch the formula work for you. Rather than prosperity, austerity. Rather than due process, solitary confinement. Instead of higher wages for Main Street, higher earnings for Wall Street. In lieu of jobs, offshoring. Instead of substance, rhetoric.

Here lies our third disconnect, between government and the people. Like the Wall Street and Madison Avenue realities, individuals in the highest echelons of federal power are wildly prosperous, moving seamlessly between the precincts of the state and the serene towers of global enterprise. They are showered with the patronage of both while employed by either, such that the distinctions between the two become opaque and nominal. The goals are common—dominion. The profits are shared—the costs socialized. And the media continually rehabilitates the profile of power like the Soviets rehabbed victims of the gulag—ex post facto. The facts of life for the obscenely rich are not like the facts for the majority. They are doing fabulously. Witness the outpouring of mawkishness in the wake of Margaret Thatcher’s death. In her first decade in power, she cut taxes on the wealthy by half while the income of the poor plummeted by forty percent. Who penned those lavish encomiums to sit atop Thatcher’s grave? Who but the survivors?

Interesting that the quote from Fitzgerald, about the rich being different from the rest of us, was from a set of short stories called All the Sad Young Men, largely about the rich and the shimmering anomie of the world they inhabited. Yet if the surveys, media, and policies on offer are any indication, all the sad young men have shed their survivor’s guilt and moved on. Life is a fairy tale waiting to be bought. Darker realities, like the distant wail of an ambulance, hardly register anymore.

Obama’s Absurd Sequester Scheme

Making a Terrible Situation Worse
by DEAN BAKER


The big talk in Washington this month is the sequester cuts. These cuts are roughly 8 percent of most areas of discretionary spending, both military and domestic. While the cuts became effective at the start of March, many will first begin to pinch this month since government contracts generally require 30 day advance notice for leaves or furloughs. This means that cuts in areas such as airport security, food inspectors, and air traffic controllers are just now taking effect.

The Democrats have been yelling loudly about the damage that these cuts will inflict on specific programs and the economy as a whole. They do have a case. The cuts will whittle back spending in a wide variety of areas. Some of these, like the cuts to airport security and food inspections will have an immediate impact. We will see longer lines at airports and are more likely to find ourselves eating contaminated meat.

The impact of other cuts, like reductions in spending on infrastructure maintenance and medical research, will only be seen over the long-term. We will see a gradual worsening in the quality of the infrastructure and less medical progress.

In addition, the reduction in spending at a time when the economy is already weak will further slow growth and weaken job creation. The March jobs report helped to remind everyone of this problem. The economy created just 88,000 jobs in March, less the number needed just to keep pace with the growth of the labor force.
For some bizarre reason, prior to the release of the report many economists were making bold claims about how the economy had turned the corner and the recovery was picking up steam. It’s not clear what these folks had been smoking.

The economy was growing at just a 1.7 percent annual rate in the second half of last year. The most recent data on new orders for equipment showed that investment was just even with its year ago pace. And the rate of job creation over the prior five months was actually down by an average of 40,000 from the same months a year earlier.
None of this looked like a story of accelerating growth. Thankfully the March jobs report helped bring the discussion of the economy back to reality. The experts again recognized that we have a problem of a seriously depressed economy that is at best just growing rapidly enough to keep pace with its underlying potential, meaning that it is making up none of the lost ground from the downturn.

In this context, the hit from the sequester is clearly bad news. The Congressional Budget Office projects that it will reduce growth in 2013 by 0.5 percentage points costing as many as 700,000 jobs. With the sequester in place there is a high probability that the unemployment rate will be higher at the end of the year than it was at the beginning.

But there is a limit to how much President Obama and the Democrats can really complain about the sequester. The reason is that President Obama himself set a course for large cuts in discretionary spending. His budget for 2012, which was put out before the deal with the Republican Congress, called for discretionary spending to be 7 percent less in 2021 than it had been in 2010, in nominal dollars. This budget would have implied cuts in services of more than 40 percent since the economy was projected to be more than 60 percent larger in 2021 than in 2012. This means that most of the bad stories that we are hearing about from the sequester cuts likely would have been the result of the cuts that President Obama had laid out himself, even if they would have been phased in more slowly.

The furloughs and layoffs of public sector workers also have their roots with President Obama. After all, it was his idea to freeze the pay of federal employees back in 2011, implying that we have a problem with overpaid government workers. Is it a surprise that the Republicans want to push the attack one step further?

And President Obama basically accepted the Republicans’ framing of the story of the downturn which turned reality on its head with the line about out of control budget deficits. Fans of arithmetic know that the large budget deficits are the result of the economic collapse. In fact budget deficits were modest prior to the downturn and were projected to remain small even if the Bush tax cuts were no allowed to expire at the end of 2010 as originally scheduled.

In this context, it is a bit hard to get too excited about the sequester. Yes, it is very bad news, but we were looking at the prospect of large cuts to the budget even before the sequester. And yes, it will slow growth and increase unemployment, but we were already looking at a government that seemed content to allow the country to needlessly lumber through a prolonged period of high unemployment.

The sequester makes a terrible situation somewhat worse, but the idea that everything would be just fine if we just stopped the sequester is nuts. We should be talking about reversing the austerity agenda more generally. The Democrats’ hysterics about the sequester should be recognized as the theater it is.

Even worse the idea pushed by President Obama, that we should be prepared to accept large cuts to Social Security and Medicare to get back to the slow motion sequester is almost too absurd for words. If he raised this plan anywhere other than Washington he would have been laughed out of town. Certainly those of us who do not work for hacks and hedge funds should treat this scheme with the derision it deserves.

It's funny cuz it's sad...

The Fed, Apple, and Trickle-Down Economics: A Story for May Day

by robert reich


The Fed’s policy of keeping interest rates near zero is another form of trickle-down economics.

For evidence, look no further than Apple’s decision to borrow a whopping $17 billion and turn it over to its investors in the form of dividends and stock buy-backs.

Apple is already sitting on $145 billion. But with interest rates so low, it’s cheaper to borrow. This also lets Apple avoid U.S. taxes on its cash horde socked away overseas where taxes are lower.

Other big companies are doing much the same on a smaller scale.

Who gains from all this? The richest 10 percent of Americans who own 90 percent of all shares of stock.

But little or nothing is trickling down. The average American can’t borrow at nearly the low rates Apple or any other big company can. Most Americans no longer have a credit rating that allows them to borrow much of anything.

It would be one thing if Apple and other giant companies were borrowing in order to expand operations and create new jobs. But that’s not what’s going on. Apple, remember, is still sitting on $145 billion.

The reason big companies aren’t creating more jobs is consumers aren’t buying enough to justify the expansion. And government is cutting back on spending.

Big corporations are borrowing simply in order to push stock prices up and reward their investors.

It’s a sump pump with the Fed on one end buying up bonds to keep interest rates low, and shareholders on the other end raking in the returns.

Get it? Easy money from the Fed can’t get the economy out of first gear when the rest of government is in reverse.

Trickle-down economics is the first cousin of austerity economics. Austerity is nuts when so many millions are out of work. And as we’ve learned before, trickle-down is a fraud. Nothing ever trickles down.

The effects of unchecked criminalization: Teen charged with felony for science experiment

By Sesali Bowen | Published: May 1, 2013

When we talk about the criminalization of communities and people of color, especially African Americans and Latinos in America, we often talk about the criminal justice system in America that disproportionately targets those communities.Schools are often the major accomplices in making this system run with the school to prison pipeline. Nothing exemplifies this more than what is happening to 16 year old Kiera Wilmot in Florida. According to the Miami New Times,

 ”7 a.m. on Monday, the 16 year-old mixed some common household chemicals in a small 8 oz water bottle on the grounds of Bartow High School in Bartow, Florida. The reaction caused a small explosion that caused the top to pop up and produced some smoke. No one was hurt and no damage was caused.
…Wilmot told police that she was merely conducting a science experiment. Though her teachers knew nothing of the specific project, her principal seems to agree.
‘She made a bad choice. Honestly, I don’t think she meant to ever hurt anyone,’ principal Ron Pritchard told the station. ‘She wanted to see what would happen [when the chemicals mixed] and was shocked by what it did. Her mother is shocked, too.’“

This sounds like a harmless instance of experimentation gone wrong. No harm, no foul right? Even the principle thinks it was simply a poor decision. A week of detention, maybe even suspension, was in order no doubt. So why did it go down like this?

“After the explosion Wilmot was taken into custody by a school resources officer and charged with possession/discharge of a weapon on school grounds and discharging a destructive device. She will be tried as an adult.
She was then taken to a juvenile assessment center. She was also expelled from school and will be forced to complete her diploma through an expulsion program.”

The school released the following statement:

“Anytime a student makes a bad choice it is disappointing to us. Unfortunately, the incident that occurred at Bartow High School yesterday was a serious breach of conduct. In order to maintain a safe and orderly learning environment, we simply must uphold our code of conduct rules. We urge our parents to join us in conveying the message that there are consequences to actions. We will not compromise the safety and security of our students and staff.”

I call bullshit. This is not about the “safety and security” of students and staff at Bartow High School. This was about setting an example, at the expense of Wilmot, and sending a message that even (mis)perceived threats will be dealt with swiftly and harshly. The unfortunate truth is that in America, those perceptions are heavily tied up in notions of race, class, and gender.

Those perceptions may have helped them come to the conclusion that Wilmot’s concoction was indeed a weapon. The code of conduct clearly states that “intention” is a factor in whether or not there has been a breach of that specific rule. But somehow the principal managed to defend the girls intentions but still expel and have her arrested.

Is the perceived threat to the safety of her classmates and teachers also the reason why Wilmot is being tried as an adult with a felony? A student with good grades and no behavioral problems to speak of should be followed with a felony because she was curious about a chemical reaction? She has been ushered into the criminal justice system with this decision. Access to employment, education, housing, etc. will all be limited to Wilmot with a felony on her record.

As a graduate of a Chicago Public School I am very familiar with teachers not being interested in nurturing the minds of students. Instead, they create a mindless generation that simply does what they’re told, no questions asked, all in the interest of maintaining an orderly “classroom”. Sending students to prisons is the solution for those who can’t be “controlled”. I have witnessed the policing that happens when school staff and administration fears its students, of color. Let me be clear, zero tolerance policies are not about keeping schools safe. They exist to keep school administrators from being held accountable for the environment they create in their institution and making contextual judgement calls.

Why does Washington worry more about air delays than the millions of unemployed?

by Jim Tankersley on April 26, 2013 | Washington Post

The rest of the country understands how badly the economy continues to hurt ordinary Americans. Washington apparently doesn’t. The federal government has failed for several years now to pass meaningful legislation to boost growth and job creation, a partisan paralysis that holds while well over 12 million people look for work but can’t find it – but which vanishes in a matter of days when it comes to fixing delays at the nation’s airports.

Americans feel this disconnect. They’ve felt it for years. They’ve grown accustomed to the federal government being unable or unwilling to respond to the hurricane forces of lost jobs, falling wealth and stagnating incomes. And they’ve grown pessimistic and angry about it.

No, seriously, we really need jobs.

These are the conclusions you draw after reading the recent book Working Scared (Or Not at All) from political scientist Carl Van Horn. He directs the John J. Heldrich Center for Workforce Development at Rutgers University; since 1998, he and fellow researchers have interviewed almost 25,000 Americans, employed and unemployed, about their economic situation. The picture that emerges from their research is grim, and Washington should look hard at it.

“What really explains Americans’ dissatisfaction with the Congress, the president, etc., is the lack of performance in the economy,” Van Horn said in an interview this week. “People don’t really care about debt deals… they don’t follow these debates in Washington. But what they do follow is what’s happening to them in the economy. They judge the political system based on performance, and for them, the performance is not good.”

Van Horn’s book quantifies the economic pain and anxiety that piled up over the last decade and proliferated during and after the Great Recession. There are chapters on the forces undermining job security and satisfaction across the workforce. Van Horn lingers particularly on the struggles of America’s oldest workers, whipsawed by rapid changes and in many cases forced into a sort of permanent joblessness, and of its youngest workers, graduating into a labor market that offers much less opportunity than they were promised.

The power in Working Scared isn’t its data; it’s the voices of workers, venting, lamenting and often resigned.

One man, nearing retirement, unnamed in the book: “Being unemployed is frustrating, demeaning, and, at this point, frightening. Articles in the paper say we ‘baby boomers’ will have to work for a few more years especially since so many of us have lost half if not more in retirement ‘funds’. Now, you tell me, how can I work for a few more years if I can’t even get a job interview?”

An unemployed banker: “I have been unemployed for over two years. It shames me to even type those words on a keyboard… I have very little hope for my future. My biggest concern is what will the future hold for my seven year old daughter?”

A woman named Lyn: “I have no savings, no investment, no health insurance, no life insurance – all I got is me. I don’t have a family. I’m here, myself, just making a living.”

Friday’s GDP report, which fell below projections, gives those workers even more reason for pessimism. As my colleague Neil Irwin puts it, “We’re still stuck in the muck.” Americans feel that, acutely.

Do lawmakers?

Recovery for the 7 Percent

April 28, 2013 — Paul Craig Roberts

“From the end of the recession in 2009 through 2011 (the last year for which Census Bureau wealth data are available), the 8 million households in the U.S. with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $600 billion.” ~ Pew Research, An Uneven Recovery, by Richard Fry and Paul Taylor.

Since the recession was officially declared to be over in June 2009, I have assured readers that there has been no recovery. Gerald Celente, John Williams (shadowstats.com), and no doubt others have also made it clear that the alleged recovery is an artifact of an understated inflation rate that produces an image of real economic growth.

Now comes the Pew Research Center with its conclusion that the recession ended only for the top 7 percent of households that have substantial holdings of stocks and bonds. The other 93% of the American population is still in recession.

The Pew report attributes the recovery for the affluent to the rise in the stock and bond markets, but does not say what caused these markets to rise.

The stock market’s recovery does not reflect rising consumer purchasing power and retail sales. The labor force is shrinking, not growing. Job growth lags population growth, and the few jobs that are created are primarily dead-end jobs in lowly paid domestic services. Retail sales adjusted for inflation and real median household income have been bottom bouncing since 2009.

To the extent that there is profit growth in US corporations, it comes from labor cost savings from offshoring US jobs and from bringing in foreign workers on work visas. By lowering labor costs, corporations boost profits and thereby capital gains for those 7 percent who have large holdings of financial assets. Those in the 93 percent who are displaced by foreign workers experience income reductions. This transfer of the incomes of the 93 percent to the 7 percent via jobs offshoring and work visas is the reason for the stark rise in US income inequality.
Another source of the stock market’s rise is the Federal Reserve’s policy of quantitative easing, that is, the printing of $1,000 billion dollars annually with which to support the too-big-to-fail banks’ balance sheets and to finance the federal budget deficit. The cash that the Fed is pouring into the banks is not finding its way into business and consumer loans, but the money is available for the banks to speculate in derivatives and stock market futures. Thus, the Fed’s policy, which is directed at keeping afloat a few oversized banks, also benefits the 7 percent by driving up the value of their stock portfolios.

The reason bond prices are so high that real interest rates are negative is that the Fed is purchasing $1,000 billion of mortgage-backed “securities” and US Treasury debt annually. The lower the Fed forces interest rates, the higher go bond prices. If you are among the 7 percent, the Fed has produced capital gains for your bond portfolio. But if you are a saver among the 93 percent, you are losing purchasing power because the interest you receive is less than the rate of inflation.

The Pew report puts it this way: Since the “recovery” that began in June 2009, wealthy households experienced a 28 percent rise in their net worth, while everyone else lost 4 percent of their assets.

Is this the profile of a democracy in which government serves the public interest, or is it the profile of a financial aristocracy that uses government to grind the population under foot?

Back to Recession

From Spring Swoon to the Big Crash
by MIKE WHITNEY


The media is calling it a “Spring swoon”, but it’s really just the next phase of the long slump.

After a strong showing in the first quarter (Q1), the economy is starting to lose steam for the forth year in a row. The main cause for the slowdown is –what Bloomberg calls–”the biggest federal-budget tightening in more than 60 years”. The impact of the budget cuts can already be seen in retail sales, personal consumption and consumer confidence. Eventually, they’ll be felt throughout the entire economy pushing unemployment higher and shrinking GDP by 1.6 percent or more.
Economists warned policymakers not to reduce government spending while the economy was still weak, but Congress shrugged off their advice and cleared the way for another slowdown. Activity is likely to fall off sharply as already over-stretched households try to muddle through on paychecks that are now 2 percent smaller following the restoration of the payroll tax. The deceleration should intensify into the summer months impacting other areas of the economy and, ultimately, widening the deficits due to lower tax receipts. This illustrates the futility of austerity measures, they only serve to make matters worse.

Let’s face it; the economy has never gotten better, not for working people at least. And now it’s getting worse; should we be surprised?

Not at all. The system is performing the way it’s set to perform; providing unlimited sums of money for speculators and moneybags friends of Obama, and table scraps for everyone else. Here’s a blurb from the Wall Street Journal that just confirms what everyone already knows:

“From 2009 to 2011, the average wealth of America’s richest 7% — the 8 million households with a net worth north of about $800,000 — rose nearly 30% to $3.2 million from $2.5 million, according to a Pew Research Center report that analyzed recent Census data. By contrast, the average wealth of America’s remaining 93%, some 111 million households, actually dropped by 4% to $134,000 from $140,000. Wealth is the value of what a household owns minus what it owes.”

So all the money is going upwards, but we’re expected to believe that that’s not what policymakers had in mind to begin with; that it’s all just one big accident?

Uh, huh. As Robert Reich points out, there’s never been a recovery, not really. Here’s how he puts it in his latest blog-post:

“Four years into a so-called recovery and we’re still below recession levels in every important respect except the stock market. A measly 88,000 jobs were created in March, and total employment remains some 3 million below its pre-recession level. Labor-force participation is its lowest since 1979.

Businesses won’t hire and expand unless they have more customers, but most Americans can’t spend more. Last Friday’s retail sales report showed sales down .4 percent in March. Consumer sentiment has fallen to its lowest level in nine months.

The underlying problem is the vast middle class is running out of money. They can’t borrow more — and shouldn’t, given what happened after the last borrowing binge.

Real annual median household income keeps falling. It’s down to $45,018, from $51,144 in 2010. All the gains from the recovery continue to go to the top.” (“Why This is the Worst Recovery on Record“, Robert Reich’s blog)

Okay, so you’ve heard it all a million times before. But it’s about to get worse, so you might want to know some of the details. You see, the economy was already slowing down before

Obama’s budget cuts. Retail sales are off, manufacturing is sputtering, earnings are weak, existing home sales are dropping, and durable goods are in the tank. Here’s more from the WSJ:

“U.S. orders for long-lasting manufactured goods fell sharply in March as businesses cut investment, suggesting that economic growth has cooled since the start of the year.

Durable goods orders decreased 5.7% from the prior month to a seasonally adjusted $216.28 billion, the Commerce Department said Wednesday. Economists surveyed by Dow Jones Newswires expected a 2.9% drop in March orders.

Durable goods are usually big-ticket items designed to last at least three years. Businesses and consumers typically make such purchases when they are confident about the economy….

Wednesday’s report echoes other recent data suggesting solid but slowing growth through the first quarter of the year as consumers and businesses became increasingly cautious.”

Problems in the US are compounded by growing troubles abroad, notably the slowdown in China and the ongoing Depression in Europe. Here’s more from the WSJ:

“Troubles overseas are threatening the U.S. recovery for the fourth year in a row. This time it’s weakening economies abroad, rather than tumbling financial markets, signaling turbulence ahead.

U.S. exports of goods to the European Union are declining outright. Growth in overall U.S. exports has been sputtering for months, after a three-year postrecession surge. And major U.S. companies are reporting increasingly dour overseas outlooks tied to the recession-plagued euro zone and slowing growth in other leading economies such as China.

The renewed fears of a global slowdown come after months of hope that a stronger recovery was finally taking shape.”

So, don’t expect any help from overseas–like an uptick in exports–because it ain’t gonna happen. China’s investment-heavy economic model is beginning to crack beneath its prodigious debt-load and the slump in Europe will persist until EU elites achieve their goal, which is to decimate the social model that provides health care, pensions and labor protections for the people in the 17-member Eurozone. That’s what this is all about. Once the EU’s working population has been reduced to third world poverty, then policymakers will return to a pro-growth strategy, but not before. But that’s going to take a while, so don’t hold your breath.

So, what’s in store for the US economy?

First we need to summarize what’s going on right now. Just take a quick look at these charts from analyst Lance Roberts at Street Talk Live in a post titled “Economy In Pictures: Have We Seen The Peak?”

This will help you see the present trajectory of the economy vis a vis wages, consumer spending, output, employment and GDP.

Wages and Salaries

Incomes are the lifeblood of the economy. In order for consumers to consume (which makes up roughly 70% of the economy currently) wages must rise at a rate to support increases in consumption.

Consumer Spending

As state above, personal consumption expenditures (PCE) comprise about 70% of the gross domestic product calculation. As PCE goes – so goes the economy.

Production and Manufacturing

The chart below is the STA Economic Output Composite Index which is an index comprised of the Chicago Fed National Activity Report, ISM Composite, several Fed regional manufacturing surveys, Chicago ISM PMI, and the NFIB Small Business Survey. This is a very broad measure of the economy.

Employment

The chart below shows both the seasonally adjustment employment levels compared to a 12-month moving average of the non-seasonally adjusted data.

GDP

Do you see any glimmer of light in these charts?

I don’t. The fact is, everything is headed in the wrong direction. And this is just “big picture” stuff. If you wanted to get into the weeds and really dig through the data on other sectors, you’d see the same thing, that is, that things are progressively getting worse. And, of course, Obama’s budget cuts will further intensify the downturn, which appears to be what the politicians really want.

Have you seen this Bloomberg video of Nouriel Roubini explaining what we can expect when the sequester cuts kick in?

Here’s a clip. Nouriel Roubini:

“I’m quite concerned about the US economy. People underestimated how much…the sequester would effect the economy. …fiscal drag of 1.7%….We’re doing the wrong kind of fiscal consolidation. It’s way too frontloaded….will have a drag on consumption…so, US will have subpar growth, below trend..and unemployment will remain high. …The Fed’s QE has already created froth in asset and credit markets that could lead to another significant bubble …So, you’ll have a big party in asset prices for the next couple years, (while rates stay low) followed by a crash bigger than before.” (Bloomberg)

Oh good. So the asset bubbles are already forming, but the economy is still flat on its back. So–chances are–we’ll suffer a meltdown before the anticipated recovery ever takes hold. Doesn’t that sound like a policy that needs to be revisited?

Let’s not kid ourselves, none of this is accidental. This whole permanent Depression-thing is just part of the plan. How could it not be? I mean, is there anyone dumb enough to believe in austerity anymore? Even the right-wing Washington Post has given belt tightening the old heave-ho. Just look at this excerpt from a recent editorial:

”There’s basically no evidence that fast austerity programs, or ones undertaken during economic downturns, are even good at reducing the debt burden. It’s very clear they’re bad for growth. Austerity through spending cuts may help growth in the long run, but so do a lot of things, and if those cuts are to things known to boost growth, like early childhood education or research, they could be counterproductive. But for the time being, austerity is the wrong prescription for advanced economies.”

Even Fox on 15th Street is admitting defeat and running up the white flag. Can you believe it?

But it doesn’t matter how discredited the policy is, the politicians are going to keep ratcheting up the pressure until they get what they want, which is, more privatization of public assets, more busting up federal unions and more dismantling critical safetynet programs. (particularly, SS, Medicare, Medicaid) Present policy has nothing to do with growing the economy or putting people back to work. It’s just plain old class warfare.
So, how bad will it get?

Nobody really knows for sure, but with factory output already dropping, retail sales flagging, existing home sales down, new payrolls flatlining, consumers spending less and saving more, and the global economy on life-support, it’s hard to see how we’re going to get out of the doldrums, especially since the full effect of the tax hikes and budget cuts have yet to be felt. Clearly, the downside risks have increased exponentially, which means that any unexpected shock will push the economy back into recession.

Nestle CEO: Water Is Not A Human Right, Should Be Privatized

April 26, 2013 | True Activist

Is water a free and basic human right, or should all the water on the planet belong to major corporations and be treated as a product? Should the poor who cannot afford to pay these corporations suffer from starvation due to their lack of financial wealth? According to the former CEO and now Chairman of Nestle, the largest food product manufacturer in the world, corporations should own every drop of water on the planet — and you’re not getting any unless you pay up.

The company notorious for sending out hordes of ‘internet warriors’ to defend the company and its actions online in comments and message boards (perhaps we’ll find some below) even takes a firm stance behind Monsanto the devil’s GMOs and their ‘proven safety’. In fact, the former Nestle CEO actually says that his idea of water privatization is very similar to Monsanto the devil’s GMOs. In a video interview, Nestle Chairman Peter Brabeck-Letmathe states that there has never been ‘one illness’ ever caused from the consumption of GMOs.

Watch the video below for yourself:

The way in which this sociopath clearly has zero regard for the human race outside of his own wealth and the development of Nestle, who has been caught funding attacks against GMO labeling, can be witnessed when watching and listening to his talk on the issue. This is a company that actually goes into struggling rural areas and extracts the groundwater for their bottled water products, completely destroying the water supply of the area without any compensation. In fact, they actually make rural areas in the United States foot the bill.

As reported by Corporate Watch, Nestle and former CEO Peter Brabeck-Letmathe have a long history of disregarding public health and abusing the environment to take part in the profit of an astounding $35 billion in annual profit from water bottle sales alone. The report states:

“Nestlé production of mineral water involves the abuse of vulnerable water resources. In the Serra da Mantiqueira region of Brazil, home to the “circuit of waters” park whose groundwater has a high mineral content and medicinal properties, over-pumping has resulted in depletion and long-term damage.”

Nestle has also come under fire over the assertion that they are actually conducting business with massive slavery rings. Another Corporate Watch entry details:

“In 2001, Nestlé faced criticism for buying cocoa from the Ivory Coast and Ghana, which may have been produced using child slaves. According to an investigative report by the BBC, hundreds of thousands of children in Mali, Burkina Faso and Togo were being purchased from their destitute parents and shipped to the Ivory Coast, to be sold as slaves to cocoa farms.”

So is water a human right, or should it be owned by big corporations? Well, if water is not here for all of us, then perhaps air should be owned by major corporations as well. And as for crops, Monsanto the devil is already working hard to make sure their monopoly on our staple crops and beyond is well situated. It should really come as no surprise that this Nestle Chairman fights to keep Monsanto the devil’s GMOs alive and well in the food supply, as his ideology lines right up with that of Monsanto the devil.

Roundup Herbicide Could Be Linked To Parkinson's, Cancer And Other Health Issues

Reuters  |  Posted: 04/25/2013 

 April 25 (Reuters) - Heavy use of the world's most popular herbicide, Roundup, could be linked to a range of health problems and diseases, including Parkinson's, infertility and cancers, according to a new study.

The peer-reviewed report, published last week in the scientific journal Entropy, said evidence indicates that residues of "glyphosate," the chief ingredient in Roundup weed killer, which is sprayed over millions of acres of crops, has been found in food.

Those residues enhance the damaging effects of other food-borne chemical residues and toxins in the environment to disrupt normal body functions and induce disease, according to the report, authored by Stephanie Seneff, a research scientist at the Massachusetts Institute of Technology, and Anthony Samsel, a retired science consultant from Arthur D. Little, Inc. Samsel is a former private environmental government contractor as well as a member of the Union of Concerned Scientists.

"Negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body," the study says.

We "have hit upon something very important that needs to be taken seriously and further investigated," Seneff said.

Environmentalists, consumer groups and plant scientists from several countries have warned that heavy use of glyphosate is causing problems for plants, people and animals.

The EPA is conducting a standard registration review of glyphosate and has set a deadline of 2015 for determining if glyphosate use should be limited. The study is among many comments submitted to the agency.

Monsanto the devil is the developer of both Roundup herbicide and a suite of crops that are genetically altered to withstand being sprayed with the Roundup weed killer.

These biotech crops, including corn, soybeans, canola and sugarbeets, are planted on millions of acres in the United States annually. Farmers like them because they can spray Roundup weed killer directly on the crops to kill weeds in the fields without harming the crops.

Roundup is also popularly used on lawns, gardens and golf courses.

Monsanto the devil and other leading industry experts have said for years that glyphosate is proven safe, and has a less damaging impact on the environment than other commonly used chemicals.

Jerry Steiner, Monsanto the devil's executive vice president of sustainability, reiterated that in a recent interview when questioned about the study.

"We are very confident in the long track record that glyphosate has. It has been very, very extensively studied," he said.

Of the more than two dozen top herbicides on the market, glyphosate is the most popular. In 2007, as much as 185 million pounds of glyphosate was used by U.S. farmers, double the amount used six years ago, according to Environmental Protection Agency (EPA) data.

Exploding the Debt Threshold Myth

Friday, 26 April 2013 | By Salvatore Babones, Truthout | Op-Ed

In January 2010, two prominent Harvard University economists, Carmen Reinhart and Kenneth Rogoff, published a highly influential paper in which they argued that high levels of government debt are associated with low levels of economic growth.

They concluded that above the threshold where government debt exceeds 90 percent of national income, "median growth rates fall by one percent, and average growth falls considerably more."

Following on the heels of the 2008 global financial crisis and the associated spike in government borrowing in Europe and the United States, the Reinhart-Rogoff paper quickly became a touchstone for the small-government crowd. Austerity is the order of the day. Reinhart and Rogoff are its prophets.

Now three economists at the decidedly less upscale University of Massachusetts - Thomas Herndon, Michael Ash and Robert Pollin - have uncovered a series of errors and outright blunders in the Reinhart-Rogoff results.

Not only did the trio show that Reinhart and Rogoff misinterpreted and misanalyzed their data, they also found a simple spreadsheet error that dramatically changed the statistical results. Austerity, it turns out, only works if you don't know how to use Excel.

Reinhart and Rogoff have acknowledged their errors, though they are at pains to stress that the errors are largely immaterial to their overall conclusions that government debt levels of more than 90 percent of national income are associated with low levels of economic growth.

They also disingenuously point out that "We are very careful in all our papers to speak of 'association' and not 'causality.' " Disingenuously, since their pro-austerity stance shines through all their work. After all, the title of their 2010 paper was "Growth in a Time of Debt," not "Debt in a Time of Recession."

Especially misleading is a chart in their paper that shows US economic growth rates for four different levels of US government debt, with the bars becoming alarmingly redder as the debt levels increased.

Reinhart and Rogoff analyzed 220 years of US economic history to conclude that, on average, the US economy has consistently grown at rates over 3 percent per year at all levels of government debt from 0 percent to 90 percent of national income. But when US government debt has risen above 90 percent, the US economy has contracted, they found.

Nowhere in their paper do they mention just when it was that US government debt rose above 90 percent of national income. Was it the Great Depression? No. The Bush or Obama years? No. Perhaps back in the 19th century? No.

In fact, in its 220-year recorded economic history, the United States has only ever experienced four years in which federal government debt exceeded 90 percent of US national income: 1944, 1945, 1946 and 1947.

In those four years, real economic growth was 8.1 percent, -1.1 percent, -10.9 percent and -0.9 percent, respectively. Which tells us absolutely nothing, except that after a huge world war it takes some time for an economy to readjust to peacetime production. Anyone who says that America's sudden recession in 1946 was due to government debt, not the end of the war, is either crazy, deceitful or stupid.

Carmen Reinhart is the Minos A. Zombanakis Professor of the International Financial System at Harvard's Kennedy School of Government. Kenneth Rogoff is the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University. You be the judge.

Actually, Reinhart and Rogoff do recognize the warping effects of World War II - on Australia and New Zealand. In those two countries Reinhart and Rogoff found that high debt was actually associated with stronger than average economic growth. But they (correctly) wrote this off as a distortion caused by the war.

In fact, of the 20 rich countries studied by Reinhart and Rogoff, only one example shows negative growth resulting from high debt: the United States after World War II. But despite the fact that they are American, live in America and mainly study the US economy, they fail to note that the only period of high debt coupled with recession in US history was the 1946 demobilization after World War II.

Apparently war distorts the data when it makes debt look good, but war isn't worth mentioning when it makes debt look bad.

It gets worse. University of Southern California professor Richard Green raises an even bigger issue. In a column for Forbes magazine, he suggests that it may be the case that debt doesn't cause low growth. It may be that low growth causes governments to go into debt.
Green presents very preliminary statistical results in his column based on a standard econometric technique called the Granger causality test. His results suggest that the impact of high debt on economic growth is either positive or neutral, while the impact of economic growth on high debt is either negative or neutral.

This is strong first-look evidence that recessions cause debt, not the other way around. But no one - Green included - expects to solve this complex statistical issue in a 600-word column. The travesty is that Reinhart and Rogoff didn't even raise the issue in a 25-page academic paper.

Lies, damned lies, and statistics. It is easy to massage data. For example, why should one expect high government debt to have an immediate impact on economic growth? Reinhart and Rogoff could just as well have studied the impact of government debt on growth rates several years later.

If they had, they might have found that in the United States, high government debt was associated with rapid economic growth. US government debt peaked in 1945 at 112.7 percent of national income. Five years later, in 1950, the US economy was racing ahead at an 8.7 percent growth rate.

The potential lesson for today? If we borrow heavily in 2013, we can enjoy a huge growth dividend in 2018.

Of course, that lesson is no more valid than Reinhart and Rogoff's austerity lesson. But it's no less valid.

If we borrow now to invest in education, job training and infrastructure, it's likely we will have robust growth in 2018. But we don't know that from Reinhart and Rogoff's historical data. We know that from common sense.

Even if the expected economic growth doesn't materialize, we will still have the education, the job training and the infrastructure to show for our spending. That's something.

At a time when the US government can borrow for five years for less than 1 percent annual interest and for 30 years for less then 3 percent annual interest, it's crazy to be cutting government spending instead of investing in our future. Well, it's either crazy, deceitful or stupid. You be the judge.

Beyond Obamacare: How a Single-Payer System Can Save US Health Care

Wednesday, April 24, 2013 by Common Dreams
by Dave Dvorak, MD

As physicians, health care leaders and legislators grapple with the complex changes brought by the Affordable Care Act (ACA), many are concerned that even after the law is fully implemented, hundreds of thousands of people will remain uninsured while health care costs continue to spiral.

What if there were a simple, streamlined solution that would guarantee health coverage while saving billions of dollars? A growing number of physicians are endorsing what they consider to be such a solution: single-payer health care. Weary of having to comply with hundreds of different insurance plans’ administrative requirements while their patients are denied needed tests and treatments, these physicians are drawn to the simplicity, cost-effectiveness and truly universal coverage offered by a single-payer system.

Their views were supported by an independent analysis last year demonstrating that with a state-based single-payer system, every person could have comprehensive coverage while the state would save billions annually.

A deeply flawed system

The desire for meaningful reform comes in the face of the U.S. health care system’s long-recognized dysfunction. Despite health care accounting for 18 percent of the nation’s economy—twice that of other wealthy democracies—48 million Americans lack health coverage. Another 29 million are underinsured, having poor coverage that exposes them to unaffordable out-of-pocket expenses. Health insurance premiums have doubled over the past decade, with the average annual cost for family coverage now exceeding $15,700; and health care costs now account for two-thirds of personal bankruptcy filings in the United States.

At the root of these problems is the fact that we have a fragmented, highly inefficient system. Employed Americans younger than 65 years of age have job- based insurance, if their employer chose to provide it; the elderly and disabled are covered through Medicare; the poor by Medicaid; military veterans through the Veterans Administration; and American Indians through the Indian Health Service. Persons who do not fall into any of those categories must try to purchase individual coverage in the private market, where it is often prohibitively expensive or unobtainable if they have a pre-existing health condition.

Owing largely to this fragmentation and inefficiency, a staggering 31 percent of U.S. health care spending goes toward administrative costs, rather than care itself. Inefficiency exists at both the provider and payer level. To care for their patients and get paid for their work, physicians and hospitals must contend with the intricacies of numerous insurance plans—which tests and procedures they cover, which drugs are on their formularies, which providers are in their network. Meanwhile, private health insurance companies divert a considerable share of the premiums they collect toward advertising and marketing, sales teams, underwriters, lobbyists, executive salaries and shareholder profits. The top five private insurers in the United States paid out $12.2 billion in profits to investors in 2009, a year when nearly 3 million Americans lost their health coverage.

The ACA of 2010, known widely as Obamacare, is expected to extend coverage to 32 million more Americans But it accomplishes this goal primarily by expanding the current fragmented, inefficient system and maintaining the central role of the private insurance industry in providing coverage. As a result, the ACA is expected to do little to rein in health care spending. Furthermore, it will fall far short of achieving universal coverage, as tens of millions of Americans will remain uninsured after its full implementation.

The solution

The central feature of a single-payer health care system would be one health plan that covers all citizens, regardless of their employment status, age, income or health status. Having a public fund that pays for care would slash administrative inefficiencies and eliminate profit-taking by the private insurance industry.

Under a single-payer system, the way society pays for health care would change, but the market-based health care delivery system would remain. Physicians and hospitals would continue to compete with one another based on service, quality of care and reputation. The chief difference is that they would bill a single entity for their services, rather than numerous insurers.

Individuals would benefit immensely by having continuous coverage that is decoupled from their employment. This would alleviate “job lock,” in which people remain in undesirable employment situations in order to maintain coverage. In a single-payer system, individuals could choose to see any provider, in contrast to the current system in which choice is restricted to those who are in-network. Deductibles and copays would be minimal or eliminated, removing cost as a barrier to obtaining needed care.

A single-payer system would be funded through savings on administrative costs, along with modest taxes that would replace the premiums and out-of-pocket expenses currently paid by individuals and businesses. The cost savings to individuals, businesses and government would be considerable. The nonpartisan U.S. General Accounting Office concluded that single- payer health care would save the United States nearly $400 billion per year, enough to cover all of the uninsured.

Physician support for a simplified, universal health care system is robust and growing. A 2008 survey published in Annals of Internal Medicine found that 59 percent of physicians supported a national health insurance system—up from 49 percent in 2002. Physicians for a National Health Program, a national organization advocating for single-payer reform, reports a membership of 18,000. In Minnesota, single payer has been formally endorsed by nearly 800 physicians, other providers and medical students.

Recognizing the implausibility of achieving single-payer reform at the national level in the current political climate, many single-payer advocates have turned their attention to state-level reform. The ACA provides for “state innovation waivers” to be granted beginning in 2017, allowing states to implement creative plans they believe would work best for them. With this in mind, organized single-payer movements have taken root in states as varied as Colorado, Hawaii, Illinois, New York, California, Oregon and Vermont. Vermont’s governor and Legislature passed a law in 2011 setting the path for the state to move toward single payer.

Conclusion

With nearly 50 million uninsured people in the United States and skyrocketing health costs, the need for profound reform of our health system could not be more clear. The ACA is a start, but it will fall far short of achieving universal coverage, and it allows unsustainable spending growth to continue. Single-payer health care would eliminate administrative waste and inefficiency, thereby creating an opportunity to achieve truly universal, cost-effective health care.

Deadly Human-Made 'Cocktail' Threatening World’s Insect Pollinators (mostly Bees)

Tuesday, April 23, 2013 by Common Dreams
Decline of 'unsung heroes' will have drastic impacts on world's ecosystems, food supply
- Jacob Chamberlain, staff writer


A "cocktail" of human-made "pressures" are threatening insect pollinators across the world, whose decline will have "profound environmental, human health and economic consequences," according to a new report released Monday by the Insect Pollinators Initiative.

Insect pollinators such as bees provide pollination for up to 75% of crops and enable reproduction in up to 94% of wild flowering plants, meaning their current decline greatly "threatens human food supplies and ecosystem function" around the world, the group urges.

According to the study Threats to an Ecosystem Service: Pressures on Pollinators, published in Frontiers in Ecology and the Environment, the steady disappearance of these essential creatures cannot be tied to one factor, but to a multitude of anthropogenic reasons such as "the loss of food resources in intensively-farmed landscapes," pesticides, climate change, and "the spread of alien species and diseases."

Dr. Adam Vanbergen from the UK’s Center for Ecology & Hydrology and science coordinator of the IPI led the review and stated:

There is no single smoking gun behind pollinator declines, instead there is a cocktail of multiple pressures that can combine to threaten these insects. For example, the loss of food resources in intensively-farmed landscapes, pesticides and diseases are individually important threats, but are also likely to combine and exacerbate the negative impacts on pollinators.

“Pollinators are the unsung heroes of the insect world and ensure our crops are properly pollinated so we have a secure supply of nutritious food in our shops," said co-author Professor Simon Potts from the University of Reading. "The costs of taking action now to tackle the multiple threats to pollinators is much smaller than the long-term costs to our food security and ecosystem stability. Failure by governments to take decisive steps now only sets us up for bigger problems in the future.”

CISPA in limbo thanks to Senate apathy

RT, April 23, 2013

Despite an $84 million lobbying effort, CISPA, the controversial bill aimed at making it easier for corporations to share customers' personal information with the government, faces an uncertain future after approval in the US House of Representatives.

The next step for the Cyber Intelligence Sharing and Protection Act, or CISPA, after passing by a 288 to 127 margin in the House, is a Senate vote. However, the Senate has yet to debate the bill and has given no indication that the proposal is a priority, as major issues including gun control and immigration linger in the national consciousness.

CISPA co-sponsor Rep. Mike Rogers (R-Mich.) of the House Intelligence Committee has maintained that the law would help corporations defend against supposedly inevitable cyber-attacks by striking “that right balance between our privacy, civil liberties and stopping bad guys in their tracks from ruining what is one-sixth of the US economy,” as quoted by the Associated Press.
If CISPA were to become law it would grant businesses and the government an unprecedented ability to share data without the need to consider anti-trust or classification laws. Hacked businesses would be granted legal immunity if they acted in “good faith” to protect their networks, thanks to a part of the bill whose broad language has drawn the ire of consumer and privacy advocates.

An initial version of the bill passed in the House of Representatives in 2012 but faded after a Senate filibuster. Last year only 40 Democrats supported the bill – though that number nearly doubled to 92 who voted for it in 2013. That seemingly sudden ideological shift followed an $84 million lobbying effort from major sponsors like Viacom, Time Warner, Verizon Wireless, and others, according to the Daily Tech.

The Electronic Frontier Foundation and American Civil Liberties Union, two of CISPA’s chief opponents, have warned that the legislation would reveal health records, credit information, and other information to the government without first being scrubbed by the companies turning over those files. The National Security Agency could then be granted access to those transmissions when investigating foreign hackers.

Google, Yahoo and Microsoft are among the tech companies that have supported the bill, but public backing has slowly eroded after Facebook revoked its support and a series of amendments in the House Intelligence Committee failed to sway the ACLU.

US President Barack Obama threatened to veto CISPA in 2012 and, citing privacy concerns, has kept his position with the current language of the bill. If CISPA overcomes the odds in the Senate, a presidential veto would again doom the law to months of debate in the House.

Insider Trading by the Legislative and Executive Branches of Govt.

The Sorta Funnies

Police State on Display

Boston Offers Grim Preview of Coming Attractions
by DAVE LINDORFF


The Boston Marathon bombing has already demonstrated the best and the worst of America for all the world to see.

First, let’s talk about the best. When the bombs detonated, despite the shock and the horror of the blown-off legs and arms, and the blood on street and sidewalk, and without knowing what else might be coming, ordinary citizens jumped into action to try and help the gravely wounded and the dying. Average people with no experience in this kind of mayhem stepped up without hesitation to care for strangers, applying tourniquets, carrying people who couldn’t walk to hospital tents, or just holding a hand and calling for help.

People pored over their cellphone photo records and camera files, looking for photos that could help identify the killers. Without their volunteer actions, the police and federal agencies would have had no clue who they were looking for. With them, it was quick work pinpointing and identifying the two men who appear to have placed the two bombs.

Later, while police failed to catch one of the brothers suspected of having been a bomber, despite placing all of metropolitan Boston under a kind of martial law, it was a citizen who, after the so-called “lock-down” of the city had been lifted, spotted the suspect and alerted police.

Now for the worst.

Let’s start with the martial law. Okay, it wasn’t a declaration, but with police and the Mayor ordering everyone in Boston and its suburbs to stay inside and lock their doors, “answering only to police,” it was virtually the same thing. Cops, FBI, ATF and DEA agents were everywhere, and the streets were being patrolled too by National Guard troops and armored personnel carriers equipped with machine guns — this in pursuit of a single wounded 19-year-old on the run on foot! Talk about overkill. We’re lucky that police in this amped up man-hunt didn’t gun down anyone who might have been unaware of the “stay-inside” order, or who decided he or she needed a beer or an ice-cream and ventured outside. Look what the LAPD did to the Latina mother and daughter newspaper delivery team when they thought the pick-up they were driving was the truck of the rogue cop they were hunting — peppering it from behind without warning with over a hundred shots from pistols and automatic rifles. (As it is, the several cops who responded to the 911 call about a man hiding in a boat nearly blew away the chance to question him about his motive by mindlessly blasting away at him though he was pinned down inside the boat, until a federal agent ordered them to quit firing.)

The argument that the lock-down might have spared people from being shot by the fleeing Dzhokhar Tsarnaev is absurd. Considered armed and dangerous, he might, instead of slipping inside a canvas-covered boat, have broken into a home and taken a family hostage. In fact, arguably had people been out and about, Tsarnaev would probably never have managed to escape unnoticed on foot from the 20-block perimeter police had established around the scene of the initial shootout in Watertown. People would have noticed him wounded and running. Instead, they were all huddled inside their locked homes.

Worse is the precedent that was just set. Now when police have a “situation” anywhere in the country, it’s a good bet they’ll adopt the new Boston model as the option of choice, “locking down” (note that this is a prison term used to describe the tactic of locking all prisoners in their cells during disturbances — a pretty unsavory concept to apply to a community in a supposedly free society) whole towns or cities to give police a free hand.

Because Bostonians had been suitably frightened by the breathless coverage of the manhunt for the Tsarnaev brothers, people were, at least for the relatively short time the “lock-down” was in effect, willing to obey orders and stay inside, but had Dzhokhar not been found so quickly, and had authorities decided to extend the de facto martial law, it would have been illuminating to see how police would have responded to those people who did get tired of being cooped up and decided to go outside and run some errands, or go visit friends. Would they have been harassed? Probably. Arrested and taken in? Maybe. There were reports of people who stuck their heads out of doors being “yelled at” by police and “ordered” back inside.

And then we have the federal government’s response since Tsarnaev’s capture. The White House and Justice Department have announced that he will not be read his Miranda warning, which tells those who are arrested for a crime that they have the right not to answer questions from police, and the right to an attorney. Miranda warnings, the Supreme Court has long ruled, are an important part of upholding the intent of the Fifth Amendment which protects everyone in this country against being compelled to testify against themselves — one of the main grievances that led the colonists to fight to throw off British rule.

President Obama, by secret executive order two years ago, gutted that protection, saying that it would be okay to ignore the Miranda warning in the case of suspected terrorists. Will he be subjected to torture to get him to tell police whether he had any confederates beside his dead brother? We don’t know. The government has reserved the right to use coercive measures against alleged “terrorists” (even though experts have warned that statements obtained under torture are notoriously unreliable).

Note that the gutting of the Miranda rule for terrorists was not a court ruling. Nor was it a change in the Constitution. It was simply a presidential executive order. It and countless others are secret; we only know about that one because it was leaked.

We don’t know that Dzhokhar Tsarnaev is a terrorist, unless you are of the view that any whack-job who kills a bunch of people is a terrorist. As far as we know, he was no different from Jared Lee Loughner, the guy who fired into a crowd of people coming to meet Rep. Gabrielle Giffords in Arizona, killing 6 and seriously wounding 13, including the congresswoman herself, or from James Holmes, who slaughtered 14 people in a Colorado movie theater. Mass murderers, yes. But terrorists? I don’t think so, if the word is to have any meaning.

Fascists like Sens. Lindsay Graham (R-SC) and John McCain (R-AZ) are calling for the US to forget the Constitution altogether, and to declare American citizen Tsarnaev an “enemy combatant,” thus depriving him of the right even to a trial, forget the Miranda thing. They want him run through some kangaroo military tribunal and then executed.

What’s happening is that US the government, and a disturbingly large segment of the American public, is losing patience with the wheels of justice in a free society. We’ve entered an Alice in Wonderland world where what is wanted is “sentence first, verdict later,” and where the trial part, with its presumption of innocence and its jury of peers, is either for show, or is simply left out entirely. (Remember, they have trials in China, Cuba, and even Myanmar, but they certainly don’t have justice.)

The thing is, if the only time we adhere to the concept of “innocent until proven guilty,” and the only time we require police to follow the Miranda procedure of advising those they arrest of their right to remain silent until they have an attorney is in cases like traffic violations and petty crimes, but we ignore those protections when it really matters, in the case of serious crimes, then we no longer have those critical protections against tyranny.

At that point, we are in a police state.

What we are seeing in Boston is a preview of that police state — a kind of “coming attractions” look at it. The mindless post-capture applause for the army of police who implemented the “lock-down” of the city after the marathon bombing was part and parcel of that police state.

Someday, those cheering images will make a great clip in some Leni Riefenstahl-style propaganda film glorifying whoever is the current maximum leader of the American dictatorship.

Corporate Terrorism in West, Texas

The Full Weight of Justice
by RUSSELL MOKHIBER


In his first statement in response to the Boston bombings, President Obama said that “Michelle and I send our deepest thoughts and prayers to the families of the victims in the wake of this senseless loss.”

In the his first statement in response to the explosion outside Waco, Texas, President Obama said that “our prayers go out to the people of West, Texas in the aftermath of last night’s deadly explosion at a fertilizer plant.”

In his statement on Boston, President Obama said that “any responsible individuals, any responsible groups will feel the full weight of justice.”

But when it came to the explosion in Texas, President Obama said nothing about responsible individuals, responsible groups or the full weight of justice.

Why not?

Because when it comes to street crime, President Obama is the top cop.

When it comes to apparent corporate crime and violence, he’s the enabler in chief.

Make no mistake, if it becomes clear that the Texas explosion was triggered by a terrorist attack, a la the Oklahoma City bombing, then Obama will begin talking about “the full weight of justice.”

But if the focus is corporate crime and violence, corporate recklessness, workplace safety, “full weight of justice” rhetoric won’t see the light of day.

After all, it was Obama’s Justice Department that in December 2011 settled the case of the April 2010 Massey Energy Upper Big Branch explosion, which killed 29 miners, with a “non prosecution agreement.”

Outrageously, the Justice Department said it would not criminally prosecute Massey even though the Labor Department concluded that Massey’s “unlawful policies and practices” were the “root cause of this tragedy.”

Massey had a track record of skirting the law and even kept two sets of books for at Upper Big Branch — one for internal use, which kept track of workplace hazards — and one for law enforcement, which did not.

David Uhlmann, the former head of the Department of Justice’s Environmental Crimes Section, and now a Professor at the University of Michigan Law School, says had he been in charge of the Massey Energy case, he would have criminally prosecuted Massey.

In his tenure at the Justice Department, he criminally prosecuted many major corporations for wrongdoing arguably less serious than one that results in the deaths of 29 workers.

And he says that the Massey non prosecution agreement is just part of a disturbing trend, one that has accelerated under the Obama administration, toward settling major corporate crime cases with deferred and non prosecution agreements.

Long Past Due: Time for a Sales Tax on Wall Street Financial Transactions (2 articles)

The Robin Hood Tax Campaign
by RALPH NADER


Here are some questions to consider: What do the Wall Street firms do that is so vital for the national interest? How does speculation contribute to our society? It’s time for Wall Street to step up and provide some answers.

The reckless actions of Wall Street institutions led to the collapse of the the U.S. economy and the deep recession of 2008-09. The Wall Street firms looted and gambled trillions in worker pensions and mutual fund savings. The Wall Street traders made billions of dollars in speculative money — bets on bets — holding hostage the real economy where money is made by providing goods and services. And the actions of Wall Street resulted in the loss of more than 8 million jobs.
Despite all the lasting harm caused by the casino capitalists, the big banks are now bigger, richer and more powerful than they were when they were bailed out in late 2008. The only ones who were punished were the U.S. taxpayers, who footed the $600 billion bill for the excesses of Wall Street. Brazenly, many firms still continue to gamble with other people’s money.

Something needs to change. One necessary change lies in a financial transaction tax — often referred to as the “Robin Hood Tax.” The Robin Hood Tax movement began in the United Kingdom in 2010 with the support of hundreds of economists, prominent public figures and social justice organizations.

Yesterday, Rep. Keith Ellison (D-Minn.) reintroduced The Inclusive Prosperity Act — inspired by the Robin Hood Tax. If passed, the bill (H.R. 1579) would create a minuscule tax on the purchase and sale of derivatives, options and stocks. The tax would be small, half a percent or less of the transaction value, depending on the product. This amounts to half a penny or less per dollar.

Consider this fact: American consumers in most states pay sales taxes on the necessities they purchase — cars, appliances, clothes, etc. The rate of such sales tax is, in some areas, as high as 7 percent. For example, a schoolteacher or police officer who buys a $100 pair of shoes pays up to $7 in sales taxes. Most people accept the idea of paying such a tax. But what about the folks on Wall Street? A trader can buy and sell millions of dollars of financial products each day without paying a cent in sales taxes. Why should financial transactions be exempt from a small sales tax?

A financial transaction tax could raise $350 billion annually — money that could be used to repair critical infrastructure, create decent paying jobs, reduce the tax burden on individuals and start to rein in frivolous high-volume trading.

At the news conference announcing the legislation, Rep. Ellison said: “This is a small tax on financial transactions that will allow us to meet the needs of our nation. And didn’t America step up, on very short notice, for Wall Street when it needed help? Well, now the American people need help.”

Critics of a financial transaction tax have all sorts of excuses. They argue it would harm ordinary investors; it wouldn’t, there are protections in place for small investors. Some say it would drive trading to offshore tax havens; but forty countries already have such a tax in place with little compelling evidence showing an adverse effect.

It’s obvious that the casino capitalists won’t give an ounce of their moral obligation without a fight. However, the endorsement of more than a thousand economists speaks volumes. One supporter, the Capital Institute’s John Fullerton (a former managing director at JPMorgan), has stated that a financial transaction tax could have significant impact in lessening the use of high-frequency trading. He has estimated that nearly 70 percent of equity-trading volume falls under this category of highly speculative trading. In June 2012, Fullerton and over 50 other financial industry professionals wrote a letter to the G20 and European leaders advocating for small financial transaction taxes.

The United States had a financial transaction tax from 1914 until 1966. It imposed a tax of 2 cents on every $100 sale or transfer of stock.

The question I posed at the outset was: What does Wall Street do that is so vital for the national interest? To begin to answer it, they can start paying this small tax. As the Robin Hood tax website succinctly puts it with their slogan, it would be “small change for the banks and big change for the people.” The $350 billion raised annually with a financial transaction tax would go a long way in helping American workers and bolstering the economy.

If you agree, stop practicing futility. Show a civic pulse. Write and call your Congressional Representative. Tell them you support “The Inclusive Prosperity Act” and they should support it as well. National Nurses United, the largest union and professional association of registered nurses in the United States, has already done this and much more with their national Robin Hood Tax campaign.

Visit robinhoodtax.org to learn more.

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A Wall Street Tax
by DEBORAH BURGER


The nation is now considering cuts to Social Security that would take away a week’s grocery money from elderly women, many already living at the margins. They will join some of the nation’s children eating less, as 10 percent of U.S. households with children are “food insecure” during the year, according to government data. Last month the percentage of men in the workforce aged 45 to 54 reached its lowest point on record. Cuts to housing subsidies are expected to add 140,000 families to the ranks of the homeless next year, on top of the growing numbers of homeless young adults. Sharp increases in risk of heart attack linked to unemployment are now being reported, as well as rising numbers of suicide attempts tied to foreclosures. Nurses see more children with stress disorders normally associated with the adult population. Children, young adults, middle-aged Americans and the elderly are linked together in a downward spiral.

That’s why nurses helped organize the U.S. Robin Hood Tax Campaign, now with more than 140 endorsing organizations, and are supporting the “Inclusive Prosperity Act,” H.R. 1579, reintroduced by Rep. Keith Ellison (D-MN) last week, legislation that embodies Robin’s goals and principles.

The Ellison bill is a small sales tax on Wall Street trading—0.5 percent on stocks, 0.1 percent on bonds and .005 percent on derivatives and other trades. This financial transaction tax (FTT) could raise hundreds of billions of dollars in revenue in the U.S. each year, a feasible amount that can make a very real difference.

The new revenue would serve the entire nation, creating millions of new jobs by rebuilding infrastructure and transitioning to a cleaner environment, providing quality healthcare and schools; subsidies for housing, child care, student tuition assistance and to secure the social safety net. The measure also calls for stepped up funding for international efforts in HIV/AIDS treatment and research and to address climate change.

For millions of Americans the recovery promised after the bank bailout of 2008 simply never materialized. But prosperity did return to the financial institutions made whole with our tax dollars. For them, last year was the second best on record, behind 2006. “We are the richest nation in the history of the world – richer now than we’ve ever been,” wrote former Labor Secretary Robert Reich last month. “But an increasing share of that wealth is held by a smaller and smaller share of the population….” The 1 percent owns fully half the country’s stocks, bonds and mutual funds. The bottom 50 percent, in contrast, own just 0.5 percent of these investments. The tax falls on those who can well afford it.

We all pay sales tax on shoes, school supplies and SUVs, but financial transactions remain untaxed. “Everyone shopping on Main Street today pays sales taxes when they buy things,” said University of Massachusetts-Amherst economist Robert Pollin. “It’s time for Wall Street traders to face up to similar obligations.” Pollin is one of the more than 1,000 economists who endorse an FTT, as do some of our nation’s leading business executives.

There are other very significant reasons to join Robin Hood in supporting H.R. 1579. The markets are dominated by high-frequency trading– some estimates put it as high as 70 percent of market activity. The new tax aims to put a brake on these trades, which have caused financial bubbles, market crashes and the sidelining of capital that ought to be put to productive uses. And the Ellison bill lowers costs in fuel and food, tied to speculation.

The Ellison bill protects average Americans, holding exchanges and brokers primarily responsible for paying the new sales tax, leaving sensible, long-term investors unaffected.

Economist Pollin and others underscore new revenue would serve to raise confidence in the economy overall and induce corporations to invest some of an estimated $2 trillion they are holding in their coffers, capital that would speed a national recovery.

The Ellison bill will add the U.S. to the ranks of nations already collecting financial transaction taxes. Twenty-three nations, and all the major exchanges outside the U.S., collect these taxes. (Americans trading abroad pay these taxes to the treasuries of other countries.) Next year, 11 European countries – France, Germany and Italy among them – will together institute an FTT. “There is now a historical opportunity for the international community to join forces,” wrote Philippe Douste-Blazy, Under-Secretary General of the UN this year. “The successful ‘Robin Hood Tax’ campaign shows that an FTT has enormous grassroots support around the world.”

The time is now for the U.S. to join these forces, support H.R. 1579 and let the national healing begin.

CISPA is a bad deal for Americans