House Passes Overhaul of Food Laws

December 21, 2010
By WILLIAM NEUMAN-NY Times
The House of Representatives gave final approval on Tuesday to a long-awaited modernization of the nation’s food safety laws, voting 215 to 144 to grant the Food and Drug Administration greater authority over food production.

The bill, which President Obama has indicated he will sign, is meant to change the mission of the F.D.A., focusing it on preventing food-borne illnesses rather than reacting after an outbreak occurs. The overhaul comes after several major outbreaks and food recalls in recent years involving salmonella in eggs and peanuts, and E. coli in spinach and other leafy greens.

Under the legislation, food manufacturers will be required to examine their processing systems to identify possible ways that food products can become contaminated and to develop detailed plans to keep that from happening. Companies must share those plans with the F.D.A., and provide the agency with records, including product test results, showing how effectively they carry them out.

The agency, which has sometimes been criticized for its failure to check up on risky food producers, will be required to conduct more frequent inspections in the United States and abroad. The law will also give the F.D.A. the power to order food recalls. Currently, it can only request a recall, even when there is evidence that tainted food has made people sick or represents a clear health hazard.

While the legislation contains many changes that advocates had long pursued, many of its important provisions, including the requirement that companies put in place food safety plans, do not go into effect for as long as 18 months. The agency will use much of that time to write rules that it needs to carry out the law.

In addition, the increased inspection of food manufacturers will happen only gradually, with regulators given up to five years to visit high-risk facilities. After that, high-risk plants must be inspected every three years.

“The F.D.A. asked for and was given a very long lead time for implementation,” said Caroline Smith DeWaal, food safety director for the Center for Science in the Public Interest, an advocacy group. “But it’s still a vast improvement over what we have today.”

Ultimately, the agency’s ability to carry out and enforce the law will depend on how much money it has available to pay inspectors and maintain or increase its staff. Republicans will gain control of the House next year and have vowed to cut spending on many domestic programs. Deep cuts could hobble the F.D.A. just as it gains the new authority.

“It’s going to be crucial for the next Congress to recognize that F.D.A. can’t fulfill the promise of this new law without the resources it needs to do the job,” said Erik D. Olson, who heads food policy for the Pew Health Group, an advocacy organization.

The bill was supported by consumer and public health advocates and major industry groups, which have seen the harm that huge recalls can do to sales.

“The food and beverage industry is committed to partnering with Congress, the administration and the F.D.A. to strengthen and modernize our nation’s food safety system,” the Grocery Manufacturers Association said in a statement praising the bill’s passage.

The law includes exemptions for small food processors and farmers, many of which feared it would be too costly and burdensome. The exemptions were crucial to pushing the bill through the Senate, although critics said the changes weakened the law, since small producers have been linked to serious outbreaks of illness.

The exemptions undercut support in the House, however. Just 10 Republicans joined Democrats in voting for the bill, with some opposing it because of the exemptions.

The law will affect the 80 percent of the food supply that is regulated by the F.D.A. However, it does not apply to most meat and poultry products, which are regulated by the Agriculture Department.

Over time, the law will require the F.D.A. to increase inspection of food processing plants in this country and also plants in other countries where food is prepared for export to the United States.

Low-risk plants in this country must be inspected within seven years after the bill becomes law. After that, they must be inspected once every five years.

The law will require 600 inspections of overseas facilities in the first year, although food safety experts said that may not represent an increase over current levels. Over the next five years, the number of foreign inspections must double each year.

The law will also give the F.D.A. the ability to set nationwide standards for growing and harvesting produce, with the goal of reducing the chances of contamination in the fields.

The agency’s new mandatory recall powers received a lot of attention in debate over the bill, but in reality, they may get little use, since companies rarely refuse F.D.A. requests for voluntary recalls.

Dr. Margaret Hamburg, the head of the F.D.A., said in a statement that the passage of the bill “has laid the critical foundation for a prevention-based 21st-century food safety system.”

Advocates said the F.D.A. had a spotty record in introducing new regulations and enforcing them. For example, it took the agency years to come up with new rules meant to keep eggs safe. When they were put into effect over the summer, it was too late to stop a huge salmonella outbreak from tainted eggs traced to Iowa farms owned by Austin J. DeCoster.

“We will spend the next several years prodding, pushing and nagging F.D.A. to embrace the new program enthusiastically,” said Carol L. Tucker-Foreman, a food policy expert at the Consumer Federation of America.

Although the bill had bipartisan support, a rarity in Congress during the last two years, passage was long in coming. The House passed a stronger version of the law last year. The Senate passed its version last month, and since there was not time in the lame-duck session of Congress to work out a compromise that melded the two versions, lawmakers expected the House to hold another vote approving the Senate bill.

But the Senate had erred by including tax provisions in its bill, which under the Constitution must originate in the House. To keep the legislation alive, the House then inserted the Senate version into a budget bill. When the budget bill did not advance in the Senate, the food safety law appeared doomed.

Then, to the surprise of most observers, Republican and Democratic leaders in the Senate unanimously agreed on Sunday to pass a revised version of the bill, without the troublesome tax language. That cleared the way for the House to approve it one more time.

Stop Secret Election Spending: A Nonpartisan Goal

Secret spending will only balloon in the 2012 elections if Congress doesn't stop it in its tracks.
Tuesday, December 21, 2010 by OtherWords
by Michael B. Keegan

Whatever you thought of the outcome of November's elections, you were probably, like me, relieved to see the end of an unusually nasty season of political ads. An unprecedented 1.5 million political ads aired in October alone--many of them false or misleading attack ads paid for by anonymous special interest groups.

Congress will have the opportunity, when it gathers again in January, both to put some of the bitterness of the 2010 elections behind it and to eliminate these anonymous campaign ads from our democracy. By passing the DISCLOSE Act, a bill requiring groups that spend money in elections to disclose the identities of their donors, members of the new Congress would show that they are willing to work across party lines to do what is right for voters and for democracy.

What the DISCLOSE Act does is simple: it would require organizations that spend money to influence elections to disclose the sources of major campaign contributions. The disclosure rules would apply equally to conservative and progressive groups. Under the DISCLOSE Act, voters would go to the polls armed with more information, and wealthy individuals and corporations paying for political advertisements would be held accountable for their claims.

The 2010 election cycle made clear the need for greater transparency of campaign spending. When the Supreme Court ruled earlier this year that corporations could spend unlimited amounts of money on political ads, it opened the door for groups to funnel huge sums from corporations and wealthy individuals to fund campaign ads, without disclosing the identity of the donors. Because the people and corporations behind these groups remained in the shadows, voters had no way of knowing who was trying to sway their vote and to what end. According to the Sunlight Foundation, these secretive groups spent a whopping $126 million on federal elections this year.

Take, for instance, American Crossroads, a group founded by Bush political advisor Karl Rove. Its affiliate, Crossroads GPS, spent almost $17 million on ads attacking Democratic candidates throughout the country. They didn't have to disclose the source of a single penny. A reporter later found that Crossroads GPS received significant funding from Wall Street bankers--and then turned around and used its money to buy ads criticizing lawmakers who voted for the extremely unpopular Wall Street bailout.

These ads ultimately served the interest of Wall Street by helping to elect pro-corporate, anti-regulation candidates, and did a disservice to voters, who had no way of tracking the ads' origins or intentions.

Some argue that making groups disclose their donors limits those donors' free expression. But even the Supreme Court justices who ruled to allow corporations to spend unlimited money on elections recognized that voters have an interest in knowing who is spending that money, and who they're spending it. Whatever your opinion of campaign spending limits, there's no reasonable explanation for allowing the wealthiest and most powerful in our society to pull strings in our elections in secret, while voters are left in the dark.

Covert spending will only balloon in the 2012 elections if Congress doesn't stop it in its tracks. Republicans in Congress, who benefitted from the vast majority of this shadowy spending in 2010, made sure that the DISCLOSE Act didn't make it into law before the midterm elections.

Obama's Tax Deal: Read the Small Print

It's been heralded by some as a 'second stimulus', but check the numbers: it's a recipe for slow growth and high unemployment
Tuesday, December 21, 2010 by The Guardian/UK
by Dean Baker

The enthusiasm of the US business press for the compromise tax package worked out by President Obama and Republicans in Congress led to a mini-euphoria of upbeat economic projections for 2011. While the economy will do better with this tax package than if no deal were forthcoming, much of the discussion has exaggerated the potential stimulus to the economy.

First, it is important to remember that although the total package is scored as costing almost $900bn over two years, almost everything in this package simply leaves in place current tax rates and spending. The biggest portion of the tax cut continues the tax rates put in place by President Bush in 2001. The continuation of these tax cuts, including a lower estate tax rate, accounts for almost $400bn of the $900bn.

Adding in the cost of a technical fix to the Alternative Minimum Tax, which is done every year, and the continuation of a series of smaller tax breaks, brings the total to $670bn. This portion of the package buys exactly zero stimulus, since it simply amounts to continuing tax policies already in place. Had these tax breaks not continued, it would have been a drag on growth, but their continuation does not provide any additional momentum to the economy. The $60bn cost of extending unemployment insurance for another year can also be put in this category.

The only net stimulus in this package comes from replacing the $60bn Making Work Pay tax credit in 2011 with a $110bn reduction in the payroll tax and the allowance full expensing of new investment. The latter is projected to cost $55bn a year for the next two years. The full expensing in this deal replaces a provision of the 2009 stimulus package that provided for 50% expensing, which means that the net boost to the economy is half this size.

In sum, the net stimulus for the economy from this package in 2011 will be in the range of $70bn, or about 0.5% of GDP. This is not likely to provide a substantial boost to growth.

While the tax deal will be a net positive to growth for 2011, there are many other factors that are pushing in the opposite direction. First, much of the spending in the original stimulus package will be coming to an end in the first two quarters of 2011. This includes both infrastructure spending for projects that will be nearing completion, and also assistance to state governments that allowed them to better weather difficult fiscal times.

State and local governments continue to face large budget shortfalls. They are finding it increasingly difficult to paper over their budgetary gaps (most state and local governments are required to run balanced budgets), and will have to resort to further cutbacks and tax increases in the year ahead.

House prices are once again falling, with the most recent data showing an 8.5% annual rate of decline. This pace is likely to accelerate in the months ahead. The housing market had been supported through the first half of 2010 by a first-time buyers' tax credit. This had the effect of pulling many purchases forward from the second half of the year or 2011. As a result, sales have fallen by almost one third. As inventories build up again, many homeowners will be forced to make substantial price cuts to sell their houses.

Declining house prices will be another blow to consumption as homeowners recognise that they have lost even more wealth than their had previously believed. The current pace of decline implies a loss of more than $1tn in wealth over the course of a year. The actual loss of wealth could easily be twice as large if the rate of price decline accelerates.

Another factor depressing consumption is the recent bump in interest rates. While interest rates are still extremely low in both real and nominal terms, the current 10-year Treasury rate is close to a full percentage point above the lows hit in the late summer. This rise in interest rates will bring to an end the wave of mortgage refinancing that had helped to free up tens of billions of dollars for consumption. Relatively few homeowners will see much gain in refinancing at current mortgage rates.

It is also important to recognize just how slow the underlying rate of growth in the economy actually is. Most analysts have highlighted the overall GDP growth figure. But this number has been inflated over the last year by a rapid build-up of inventories. Over the last four quarters, GDP growth averaged 3.2%. However, final demand growth averaged just 1.3% over this period. In the most recent quarter, inventories were accumulating at almost the fastest rate on record. It is unlikely that the rate of inventory accumulation will accelerate further. Rather, the rate is likely to slow – meaning that inventories will be a net drag on growth in coming quarters.

In sum, there is every reason to expect that 2011 will be another year of weak growth, with little, if any, decline in the unemployment rate. The economy will be somewhat stronger as a result of this tax package being put in place, compared to a scenario in which nothing was done, but this is very far from the fabled "second stimulus" that some are acclaiming.

GOP Senator Tom Coburn To Block 9/11 Responders Bill

Tuesday, December 21, 2010 by Huffington Post
by Nick Wing

Sen. Tom Coburn (R-Okla.) plans to block legislation that would provide additional aid to cover the health care costs of 9/11 first responders, one of the senator's aides told The Wall Street Journal Tuesday morning.

Senate Republicans have opposed the measure, also called the Zadroga bill, first over concerns that it would take precedence over a plan to extend the Bush tax cuts -- a deal that has since been reached -- and now due to issues with the cost-control measures and $7.4 billion cost of the legislation. That money would go toward covering the medical bills of 9/11 emergency workers who have suffered from health complications following the inhalation of toxic chemicals at Ground Zero.

The current offset proposal would enact three small taxes and fees that are meant to target companies that rely on outsourcing jobs in order to provide goods and services. Coburn said Tuesday, however, that he wants the offsets to come through spending cuts, and would prefer to see the legislation reach a floor vote through committee, rather than being fast-tracked, an action that has been taken to allow a vote on the bill to come before the end of the session.

Support for the measure had apparently been growing before Coburn's announcement. New York Democratic Senators Chuck Schumer and Kirsten Gillibrand, two of the bill's sponsors, both claimed Monday that the bill finally had the votes to pass. That contention appeared to be supported by the recent comments of a some of key Republicans who had encouraged a Senate détente in order to send the package through to the President.

On Tuesday, former New York City Mayor Rudy Giuliani became the latest name on that list.

"This should not be seen as a Democratic or Republican issue. It shouldn't even been seen as a fiscal issue. This is a matter of morality, it's a matter of obligation," Giuliani said on an appearance on a local Fox affiliate.

And last week, former Arkansas Gov. Mike Huckabee said that "every Republican should vote for this bill."

Current New York City Mayor Michael Bloomberg, an independent, also urged the Senate to reach an agreement, saying Monday that the "time for excuses is over."

The Most Important Free Speech Issue of Our Time

tuesday, December 21, 2010 by The Huffington Post
by Sen. Al Franken

This Tuesday is an important day in the fight to save the Internet.

As a source of innovation, an engine of our economy, and a forum for our political discourse, the Internet can only work if it's a truly level playing field. Small businesses should have the same ability to reach customers as powerful corporations. A blogger should have the same ability to find an audience as a media conglomerate.

This principle is called "net neutrality" -- and it's under attack. Internet service giants like Comcast and Verizon want to offer premium and privileged access to the Internet for corporations who can afford to pay for it.

The good news is that the Federal Communications Commission has the power to issue regulations that protect net neutrality. The bad news is that draft regulations written by FCC Chairman Julius Genachowski don't do that at all. They're worse than nothing.

That's why Tuesday is such an important day. The FCC will be meeting to discuss those regulations, and we must make sure that its members understand that allowing corporations to control the Internet is simply unacceptable.

Although Chairman Genachowski's draft Order has not been made public, early reports make clear that it falls far short of protecting net neutrality.

For many Americans -- particularly those who live in rural areas -- the future of the Internet lies in mobile services. But the draft Order would effectively permit Internet providers to block lawful content, applications, and devices on mobile Internet connections.

Mobile networks like AT&T and Verizon Wireless would be able to shut off your access to content or applications for any reason. For instance, Verizon could prevent you from accessing Google Maps on your phone, forcing you to use their own mapping program, Verizon Navigator, even if it costs money to use and isn't nearly as good. Or a mobile provider with a political agenda could prevent you from downloading an app that connects you with the Obama campaign (or, for that matter, a Tea Party group in your area).

It gets worse. The FCC has never before explicitly allowed discrimination on the Internet -- but the draft Order takes a step backwards, merely stating that so-called "paid prioritization" (the creation of a "fast lane" for big corporations who can afford to pay for it) is cause for concern.

It sure is -- but that's exactly why the FCC should ban it. Instead, the draft Order would have the effect of actually relaxing restrictions on this kind of discrimination.

What's more, even the protections that are established in the draft Order would be weak because it defines "broadband Internet access service" too narrowly, making it easy for powerful corporations to get around the rules.

Here's what's most troubling of all. Chairman Genachowski and President Obama -- who nominated him -- have argued convincingly that they support net neutrality.

But grassroots supporters of net neutrality are beginning to wonder if we've been had. Instead of proposing regulations that would truly protect net neutrality, reports indicate that Chairman Genachowski has been calling the CEOs of major Internet corporations seeking their public endorsement of this draft proposal, which would destroy it.

No chairman should be soliciting sign-off from the corporations that his agency is supposed to regulate -- and no true advocate of a free and open Internet should be seeking the permission of large media conglomerates before issuing new rules.

After all, just look at Comcast -- this Internet monolith has reportedly imposed a new, recurring fee on Level 3 Communications, the company slated to be the primary online delivery provider for Netflix. That's the same Netflix that represents Comcast's biggest competition in video services.

Imagine if Comcast customers couldn't watch Netflix, but were limited only to Comcast's Video On Demand service. Imagine if a cable news network could get its website to load faster on your computer than your favorite local political blog. Imagine if big corporations with their own agenda could decide who wins or loses online. The Internet as we know it would cease to exist.

That's why net neutrality is the most important free speech issue of our time. And that's why, this Tuesday, when the FCC meets to discuss this badly flawed proposal, I'll be watching. If they approve it as is, I'll be outraged. And you should be, too.

End Corporate Domination: More Than Advocacy We Must Resist

Monday, December 20, 2010 by CommonDreams.org
by Margaret Flowers

On December 16, 2009, I stood in the atrium of the Hart Senate Office Building with about a dozen single payer supporters. We were holding signs and standing vigil on the eve of the first time in U.S. history that a single payer bill would make it to the floor of either body in Congress. Senators Sanders, Brown and Burris introduced an amendment that would have substituted a national single payer health insurance for the health bill being created in the Senate at that time.

We celebrated that night because it was a victory, though a small one. Despite all of the corporate dollars and the teams of industry lobbyists opposing single payer, our persistence in pushing for the amendment, which included lobbying, letters, emails and protests at the Senate building, had paid off. The amendment was introduced on the floor of the Senate on December 17th, although it was pulled before it came to a vote.

One year later to the day, I am standing in the snow with hundreds of people, my arms linked behind the bars of the fence in front of the White House. Inside, the President is holding a press conference to report the progress being made in Afghanistan which we know is based on lies. Outside, we are protesting to end the wars in the largest veteran led act of civil disobedience since the beginning of the war on Afghanistan. In all, 131 people were arrested.

We can make some progress working within Congress, but we will never achieve our goals of peace and social and economic justice this way. There are a few like Senator Sanders who are willing to speak out against injustice, but their voices are mere whimpers against the giant winds of the corporate political and media machines. No politician, no matter how strong their understanding of and desire for real social change, can succeed in this hostile environment.

To succeed in creating the social change that we desperately need will require acts of protest and civil disobedience, a new culture of resistance as called for by leaders such as Mike Ferner of Veterans for Peace. It is time to recognize that our advocacy for peace, jobs, education, health, housing, human rights and environmental and economic justice is insufficient. We face the same fundamental obstacle: corporate control of our country.

Together we have the strength and the resources to shift power away from the rich corporations to the people and we can demand social justice. We have the solutions, but they are not being heard. We must cause enough disruption that our voices and our solutions cannot be ignored. And we must organize actions of nonviolent civil resistance. Otherwise growing public discontent in this nation may turn to violent means.

That is why I stood in solidarity with the veterans on December 16th, 2010 and joined them in the action that led to our arrest. As I sat that day in handcuffs on the cold concrete floor of a holding area in Anacostia, a veteran turned to me and said, “It means a lot to me that you are here doctor because you don’t have to do this.”

The truth is that I do have to do this. For me it is a matter of professional integrity to refuse to cooperate with the current system that results in the growing wealth of a few at the cost of great human suffering and death at home and around the world. I call on you, if you love your country, if you want a peaceful and healthy future for your children and grandchildren, to join in the culture of resistance.

Speak out about injustice wherever you see it. Join or organize actions of nonviolent protest to demand the change that we require. Speak out against the wars that cause so much human suffering and undermine our economic and national security. You can fight foreclosures, the closing of health centers, the closing of schools and poisoning of our air, land and water by factories and power plants. There is much to do. Your voice is needed.

2010: The Year Business Won (Again) and Workers Lost (Again)

The Year Washington Became More “Business Friendly”
Tuesday, December 21, 2010 by RobertReich.org
by Robert Reich

History will record 2010 as the year Washington became "business friendly."

Not that it was all that unfriendly before. Some would say the bailouts of Wall Street, AIG, GM, and Chysler were about as friendly as it can get. In addition, Washington gave windfalls to drug companies and health insurers in the new health bill, subsidies to energy companies in the stimulus package, and billions to domestic and military contractors.

GM is now making more cars in China than in the United States. And GM has just signed a deal with its Chinese partner to try to crack India’s potentially huge auto market. Meanwhile, back home in the U.S., GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers.

But for corporate America it still wasn’t friendly enough. Before the midterm elections, Verizon CEO and Business Roundtable chair Ivan Seidenberg accused the President of creating a hostile environment for investment and job-creation. In the midterms, business leaders overwhelmingly threw their support to Republicans.

So the White House caved in on the Bush tax cuts for the wealthy, and is telling CEOs it will be on their side from now on. As the President recently told a group of CEOs, the choice “is not between Democrats and Republicans. It’s between America and our competitors around the world. We can win the competition.”

There’s only one problem. America’s big businesses are less and less American. They’re going abroad for sales and employees. That’s one reason they’ve showed record-breaking profits in 2010 while creating almost no American jobs.

Consider one of most popular Christmas products of all time – Apple’s iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone whose wholesale price is around $179.00 to determine where the money actually goes.

Some shows up in Apple’s profits, which are soaring.

About $61 of the $179 price goes to Japanese workers who make key iPhone components, $30 to German workers who supply other pieces, and $23 to South Korean workers who provide still others. Around $6 goes to the Chinese workers who assemble it. Most of the rest goes to workers elsewhere around the globe who make other bits.

Only about $11 of that iPhone goes to American workers, mostly researchers and designers.

Even old-tech American companies made big money abroad in 2010 – and created scads of jobs there. General Motors, for example, is now turning a nice profit and American investors bullish about its future.

That doesn’t mean GM will be creating lots more blue-collar jobs in America, though. 2010 was a banner year for GM’s foreign sales — already two-thirds of its total sales, and rising. In October, GM became first automaker to sell more than 2 million cars a year in China. The company is now making more cars in China than in the United States. And GM has just signed a deal with its Chinese partner to try to crack India’s potentially huge auto market.

Meanwhile, back home in the U.S., GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all GM’s U.S. suppliers have also cut their payrolls.

It’s much the same even for America’s biggest retailers. 2010 wasn’t an especially good year for Wal-Mart in the United States. Its third-quarter sales fell, as U.S. shoppers continued to hold back.

But Wal-Mart International is contributing mightily to its bottom line. Its UK business, Asda, will be adding 7,500 new jobs next year. Wal-Mart is also doing well in Japan and Brazil, and hiring like mad in both countries.

So when President Obama tells American CEOs our biggest challenge comes from abroad, you’ve got to wonder. The leaders of American business are already abroad, and doing quite nicely.

Just after the midterm elections, the President’s chief economic advisor, Larry Summers, told a group of top U.S. CEOs that the election was partly a “rejection of elites…that were seen as more citizens of Davos than of their countries.” American CEOs, Summers warned, should “think very hard about their obligations as citizens of this country.”

Yes, they’re citizens. But first and foremost they’re CEOs. And CEOs have to show profits – wherever those profits come from. Under American-style capitalism, profits matter. Jobs don’t.

2010 was the year Washington became even more “business friendly.” The result has been more and better jobs – but not in America.

Net Neutrality Advocates Decry FCC 'False' Solution and 'Squandered Opportunity'

Statements by Free Press and ACLU
Tuesday, December 21, 2010 by CommonDreams.org

WASHINGTON - The media advocacy group Free Press released the following statement in response to actions by the FCC today:

By a 3-2 vote Tuesday, the Federal Communications Commission approved new rules intended to prevent Internet providers like AT&T, Comcast and Verizon from acting as gatekeepers on the Web. The rules, however, heavily favor the industry they are intended to regulate, and leave consumers with minimal protections. Democratic Commissioners Mignon Clyburn and Michael Copps voted with Chairman Julius Genachowski, while Republican Commissioners Robert McDowell and Meredith Attwell Baker voted against.

Free Press Managing Director Craig Aaron made the following statement:

“We are deeply disappointed that the chairman chose to ignore the overwhelming public support for real Net Neutrality, instead moving forward with industry-written rules that will for the first time in Internet history allow discrimination online. This proceeding was a squandered opportunity to enact clear, meaningful rules to safeguard the Internet’s level playing field and protect consumers.

“The new rules are riddled with loopholes, evidence that the chairman sought approval from AT&T instead of listening to the millions of Americans who asked for real Net Neutrality. These rules don't do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination. No longer can you get to the same Internet via your mobile device as you can via your laptop. The rules pave the way for AT&T to block your access to third-party applications and to require you to use its own preferred applications.

“Chairman Genachowski ignored President Obama's promise to the American people to take a 'back seat to no one' on Net Neutrality. He ignored the 2 million voices who petitioned for real Net Neutrality and the hundreds who came to public hearings across the country to ask him to protect the open Internet. And he ignored policymakers who urged him to protect consumers and maintain the Internet as a platform for innovation. It’s unfortunate that the only voices he chose to listen to were those coming from the very industry he’s charged with overseeing."

The American Civil Liberties Union released this statement:

The Federal Communications Commission (FCC) today passed a new rule clarifying the legal authority of the FCC to enforce network neutrality principles. Network neutrality principles protect free speech online by prohibiting the owner of a network from prioritizing some content on the Internet while slowing other content.

The rule approved today by the FCC includes full network neutrality protections for the wired Internet, which includes cable and DSL service to homes and businesses, but provides lesser protections for wireless broadband service and may allow wireless broadband providers to block certain applications and services that compete with their own applications and services. The American Civil Liberties Union has called for network neutrality protections on both the wired and wireless Internet as important safeguards for free speech.

"Network neutrality principles are essential to protecting the First Amendment rights of Americans who rely on the Internet as a forum for free speech. While the new FCC rule creates stronger network neutrality protections for Americans who use the wired Internet, it fails to provide adequate protections for Americans who rely on wireless broadband service," said Chris Calabrese, ACLU Legislative Counsel. "By creating two sets of regulations – one for the wired Internet and one for wireless broadband – and failing to ground them in the strongest legal protections available, the FCC has failed to protect free speech and Internet openness for all users. The ACLU will continue to fight for full network neutrality protections. Internet openness is key to protecting our First Amendment rights."

The rule passed by the FCC today does not reclassify wireless broadband service as a telecommunications service, which the ACLU and other proponents of network neutrality have long urged. Treating broadband access as similar to phone service would have allowed the FCC to rely on its broader regulatory authority under Title II of the Communications Act to enforce network neutrality principles.

Police State: Cops Can Throw People in Jail for Sitting on a Sidewalk?

Propelled by wealthy donors and business interests, a new sit-lie ordinance in San Francisco gives police the power to fine and arrest people for resting on the sidewalk.
By Tana Ganeva, AlterNet
Posted on December 20, 2010

When Jon Paul, a 69-year-old who's been homeless for 39 years, pulls off his cowboy hat and bows his head, I think he's being chivalrous. Instead he knocks on his forehead to show me his steel plate. He got it in Vietnam about 39 years ago. He says that when he came back from that war he had to live on the street because he "couldn't stand to be inside anymore."

In addition to the metal in his forehead, Paul's stint in Vietnam earned him a whopping $400 a month, or just enough to pay for about two weeks in a SRO (single residence occupancy). So partly through choice ("I like being out here because I can help people") and partly through necessity, he sleeps on the street in San Francisco's Mission District.

Starting last Friday, Paul and the rest of the city's homeless (numbering between 7,000 and 10,000) won't legally be allowed to do that anymore, a development that leaves him shaking his head in bewilderment, saying “fuck that.” On November 2, as the GOP swept into a majority in the House on Tea Party juice, voters in freewheeling San Francisco -- one of the liberal utopias bookending dreaded “flyover country” -- passed Proposition L, a sit-lie ordinance that outlaws sleeping (or resting or sitting) on a public sidewalk between 7am and 11pm.

Police are supposed to give a warning, but after that they can issue a citation that carries a $50-$100 dollar fine. A repeat offense within 24 hours earns the unrepentant sitter a $300-$500 ticket, and/or up to 10 days in jail. If caught sitting or reclining again within 120 days of the original conviction, the individual can be fined $400-$500 dollars and end up in jail for 30 days.

So what does the city of San Francisco have against sitting down in public? Nothing, obviously, as long as you don't look like you're prone to criminal behavior (e.g., homeless).

“If the law were enforced the way it is on the books," the ACLU of Northern California's legal director Allan Schlosser tells AlterNet, “We'd be living in a police state." But as Schlosser explains, the sit-lie ordinance is unlikely to be enforced against, say, the millions of tourists who flood the city with billions of dollars in annual revenues.

Police officials have basically admitted as much. At a March public safety hearing in which the measure was discussed, public defender Jeff Adachi presented a series of slides showing people engaged in the offensive behavior: an attractive (white) woman sitting on a nice suitcase, a (white) kid holding his skateboard on the curb, and a couple of tourists. But the shots were interspersed with pictures of homeless people. Adachi wondered if they'd all be criminals under the new law.

In his rebuttal, assistant police chief Kevin Cashman assured the board that the “good” people depicted in the slides would be warned first and were unlikely to end up getting citations, saying, "Obviously, common sense is going to be part of the training with enforcement of this statute." An earlier PowerPoint presentation by Cashman also contained the creepy promise that the law "Enables Preventative Intervention, Before Accident or Crime Occurs." As Greg Kamin noted on Fog City Journal, Cashman emphasized the law's Minority Report aspect further by adding that sit-lie would "prevent a criminal act from occurring in the first place.”

Actually, what the law is most likely to do is exacerbate the city's horrific homelessness problem. As Jennifer Friedenbach, executive director of Coalition on Homelessness pointed out in a phone interview with AlterNet, homeless people are not eligible for housing programs if they have a criminal record. "People wait for years to get housing and then they get knocked out. It's depressing as hell." Since sit-lie carries criminal penalties, a measure designed in part to manage the city's homeless actually plants obstacles to getting them off the streets.

Clearly aware of the optics of a law that fights pre-crime and targets people for the way they look, the city is being mindful of how the ordinance is rolled out. Sgt. Michael Andraychak told AlterNet that although the measure took effect last Friday, the SFPD is still formulating an enforcement policy. Once a game plan is drafted, the department will train officers in the proper use of the ordinance. Andraychak says the law will likely not be enforced until February 1 of next year.

But Bob Offer-Westort of the Coalition on Homelessness says there have already been incidences of individual police officers wielding the rule to hassle the city's homeless -- even before the ordinance became law. As early as election night, Offer-Westort claims there were multiple reports from the Haight and the Castro of police telling homeless youth they weren't allowed to sit on the sidewalk anymore. Offer-Westort says he witnessed a police officer tell a young guy he'd better "move along" because of the new law. Was the guy doing anything to attract police attention? "No. He was sitting cross-legged, hands tucked into his sleeves, because it was a cold day."

Over the course of the campaign, proponents of the measure -- which included Mayor Gavin Newsom, police chief George Gascon (who'd spearheaded a similar campaign targeted at Los Angeles' Skid Row) and other high-level police department representatives -- insisted the law would not be used to harass the city's poorest residents. As homeless advocates raised concerns over the impact of the discriminatory measure on San Francisco's most vulnerable, the Yes on L campaign spokespeople claimed police needed the law to curb aggressive and dangerous behavior by the city's homeless (even though San Francisco has plenty of laws that target people living on the street -- Jennifer Freidenbach says there are about 34 laws aimed at the homeless population).

In fact, the campaign for sit-lie allegedly grew out of efforts to manage a small population of homeless that mass around the Haight. As the story goes, Mayor Gavin Newsom was taking a walk with his daughter down Haight Street last February when he saw someone smoking crack on the sidewalk. The scandalized Newsom announced soon after that he would put a sit-lie measure to the board (but neglected to submit a police report).

Newsom's sudden realization that some homeless people use hard drugs was not the beginning of the push for sit-lie though; a well-oiled PR operation had already been cranking out reports of dangerous, aggressive street culture overtaking the Haight. In the six months leading up to the vote for Prop L, C.W. Nevius, a conservative columnist and former Republican fundraiser, wrote 20 fearmongering op-eds pushing for a sit-lie law. In Nevius' overheated columns, crazed thugs terrorized the neighborhood's law-abiding citizens, and the police were powerless to stop them. "The problem is that in the last year or so, the Haight has gone through an unpleasant transformation," he wrote. “Instead of the usual drowsy drunks and affable stoners, a new group has taken over the sidewalks. They're young, aggressive bullies who confront residents, sit on the sidewalks with pit bulls, and even prey on small-time marijuana dealers." So intimidating were the Haight's street kids, wrote Nevius, that residents were too scared to report crimes to the police.

Teresa Barrett, then police chief of Park Station, which oversees the Haight, held a series of community meetings with Haight residents in which she drummed up fears about rising crime in the neighborhood. (During the course of the campaign Barrett ran afoul of ethics rules when she appeared in an ad for the measure in her police uniform.) Like Nevius, Barrett claimed the police did not have enough authority to curb violent behavior in the area.

But despite dire reports of assault and aggressive behavior, crime stats in the area hadn't increased. At least one of the stories promoted by Nevius turned out to be bogus -- he wrote about a man who was jumped by a homeless man, but the district attorney found that the fight was mutual and ended up dismissing the charges.

Of course, jumping peaceful residents already tends to be illegal. So are many of the other behaviors cited by Nevius, Barrett, Gascon, and others campaigning for sit-lie. Aggressive panhandling and sidewalk obstruction are against the law. The city has strict laws against loitering. In fact, San Francisco was named the seventh "Meanest" city in its treatment of the homeless in a report by the National Law Center on Homelessness and Poverty and the National Coalition for the Homeless. The SFPD issues around 10,000 citations each year for "quality of life" crimes such camping and blocking the sidewalk. Religious Witness for the Homeless found that the city used up $9,847,027 on 56,567 such citations between 2004-2008. (That money, they determined, could be used to house "492 people, put 300 people in a three-month detox center, or pay the salaries of 113 psychiatric outreach workers.)

One of the main arguments for sit-lie was that current laws were inadequate because they required a third party to report threatening behavior. But in a review of local and state laws, the Lawyer's Committee for Civil Rights in San Francisco and the Bay Area found that a third party was not necessary for police to get involved. "As this report makes clear, these laws can be enforced by police officers without requiring citizens to complain of violations prior to their enforcement," they concluded.

Many of these questions were raised by the San Francisco Board of Supervisors, which voted overwhelmingly (8-3) against the measure on June 8. "I've got to believe that we can do better than this law and do something that's more meaningful for the public," said Supervisor Bevan Dufty.

Undeterred by the board's vote, Newsom put sit-lie on the ballot as Proposition L, optimistically termed "Civil Sidewalks" by advocates. While some Haight Street business owners and residents who voiced complaints about aggressive street behavior supported the measure, the Prop L campaign was, for the most part, promoted not by the community but by high-level figures in the police department and government, the city's financial interests and its wealthiest residents.

The SF Chamber of Commerce lobbied for the measure and pushed businesses to give money, including the owners of the San Francisco 49ers. Other business interests, few of which have a direct presence in the allegedly dangerous streets of the Haight, followed suit, including the Building Owners and Managers Association of SF, Coalition for SF Neighborhoods, Cole Valley Improvement Association, Mission Merchants Association, Polk District Merchants, and the San Francisco Apartment Association.

The campaign was flush with cash from the city's wealthiest residents. Investor Ron Conway, beloved in Silicon Valley for bankrolling pretty much every big startup to come over the last 20 years, donated a total of $55,000 to the Civil Sidewalks campaign. Conway even lobbied for the measure in a speech at the Bay Area Council Dinner. Other generous donations came from Charles Schwab ($25,000), 49ers President Jed York ($10,000), Kevin Lynch, of Adobe Systems ($1,000) and Jeff Fluhr, the CEO of StubHub ($500). Overall the Yes on L campaign amassed about $280,000 -- cash that went to slick consultants and TV advertising, with ads running during the heavily viewed Giants playoffs.

"It was a classic 'buy the election' campaign," says Friedenbach. The opposition had only $7,802.

The results of the election were also telling. In an analysis of votes by precinct, Chris Roberts of the SF Appeal found that the city's wealthiest neighborhoods were instrumental in passing the legislation, while less affluent areas mostly voted against. "Sit/Lie fared poorly in most voting precincts where one can actually find homeless people sitting on the street," wrote Roberts. The measure failed in the precinct that includes the Haight.

Beyond the many non-Haight business interests and wealthy conservatives that propelled the measure in San Francisco, sit-lie advocates also got help from as far away as New York. The right-wing Manhattan Institute's Heather MacDonald penned an almost 7,000-word screed in favor of a measure in a city across the country, painting the homeless in the Haight as spoiled, violent vagrants and denouncing homeless advocates and progressives as weaklings whose inaction would sink the city (when tourists suddenly decide to stop coming to San Francisco because of the mean homeless people, an argument that would later crop up in Nevius' columns).

The Manhattan Institute has promoted laws targeting the homeless before. In the early 2000s senior fellow George L. Kelling got $500,000 to consult on the campaign for L.A.'s Skid Row sit-lie law, which was spearheaded by current San Francisco police chief Gascon. Over the years, the conservative think-tank has been instrumental in promoting the "broken windows" theory of local governance, which calls on police to patrol poor neighborhoods for low-level "quality of life" crimes. Scrubbing the bad elements is supposed to trigger magical neighborhood rejuvenation; tax dollars go to police, not all those pesky social programs.

In sit-lie measures, which have cropped up all over the country, including Seattle, L.A., Miami and Chicago, that theory reaches perfection -- criminalizing the poor without the bother of waiting for them to commit a crime.

"We have to look at this in the big-picture context," said Friedenbach. "When the federal government created the homelessness crisis, local governments did not have the means of addressing the issue. So they use the police to manage homeless people's presence." Fueling this is the standard conservative mindset that paints people who have fallen on hard times as weak, criminal and subhuman. "They have to set up a framework to understand homelessness that it's not about systemic causes, but about the person."

An older guy who calls himself Birdman, who resides near Valencia Street in the Mission, articulated the humiliating dehumanization inherent in laws like sit-lie in a self-published flyer: "What if ur homeless and broke and have nowhere to go? Are u forced to stand like in Abu prison? While a DOG is free to sit or lie?

Why Listening to Music Makes You Smarter

By Sharon Burch, AlterNet
Posted on December 21, 2010

In past generations, singing and playing instruments was an integral part of family life. A great way to express and entertain yourself and others. We did not realize it, but we were also exercising our brain while we played, causing us to be creative, more vibrant, smarter, etc. In our current generation, we tend to be passive listeners and consumers as a society, and as a result, shorting our mental development and our children the opportunity to reach their mental potential.

Humans are "wired" for music. Until recently, scientists did not know how music affected the brain. The advancement in technology allows scientists to actually "see" brain activity via PET scans and MRI imaging scanning the blood flow in the brain. Our brains are "wired" with neural pathways. Most activities only cause a portion of the brain to "light up" with activity; thus, the saying, right brain/left brain, etc. But there are actually four parts to the brain and music makes ALL of the areas "light up" and create new neural pathways as a person is learning and playing an instrument. Those neural pathways remain in tact and can be used for other things besides music.

Norman Doidge, in his book, The Brain That Changes Itself, shares case after case of people forcing their brain to change and adapt either voluntarily with discipline, or involuntarily due to odd incidences. Studies confirm that our brain has plasticity. "You can't teach an old dog new tricks" is proven to be a case of "can't want to," rather than too old to change.

Daniel Levitin passionately explores the connection between Music and the Brain in his book of the same name. Google his name, watch video clips on YouTube, or go to his website. It's an exciting time of discovering how little we know and how much there is to learn. There is definitely enough evidence to recognize it is not in a music teacher's imagination. Music has a huge impact on activity in the brain. You can physically/visually see the growth and changes that happen inside the brain. The possibilities are endless. The implications for music therapy and music education are profound. Just check out PBS video "The Music Instinct." Neurologist and author, Oliver Sacks relays a true story from his book, Musicophilia, where a man was indirectly struck by lightning through a telephone and three weeks later composing and playing the piano for the first time. Sacks believes the man was "re-wired" through that experience. The list goes on and on.

But even if you are still skeptical about music making kids smarter, let's look at the other benefits. Socially, music is an ageless hobby creating interaction with great people. Take a look at any school band or orchestra or top-ranking choir and you will find a huge percentage of the members are in the top 10 percent of their class and college bound. Striving for excellence is a given in a musical group. Everyone has to perfect their part for the group to perform at their best--NObody "sits on the bench." Everyone has to pull their weight or the whole group suffers. Creativity, especially in jazz groups is developed, honed and embraced. Who couldn't use more creativity in their workforce? Creativity is what makes the difference and gives any company the cutting edge.

There are many benefits of being involved in making music, but the neural pathways drives home the point and gets our attention. Scientists are reluctant to state that playing a musical instrument makes you smarter, but all the indicators are there, so let's look at it from the opposite angle. Instead of trying to prove that music makes you smarter or good for you and your child, try to prove that it is not. I can't think of a single reason how learning a musical instrument is detrimental, can you?

Give your child every opportunity and advantage you can. Enroll them in music lessons and watch them grow and mentally develop as they play, create, express, and struggle through the rigors of the discipline mastering an instrument. You will discover a more creative, brighter and mature person in the making.

Time for a New Theory of Money

We as a community can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we're always borrowing from Peter to pay Paul.
By Ellen Brown, YES! Magazine
Posted on December 21, 2010

The reason our financial system has routinely gotten into trouble, with periodic waves of depression like the one we’re battling now, may be due to a flawed perception not just of the roles of banking and credit but of the nature of money itself. In our economic adolescence, we have regarded money as a “thing”—something independent of the relationship it facilitates. But today there is no gold or silver backing our money. Instead, it’s created by banks when they make loans (that includes Federal Reserve Notes or dollar bills, which are created by the Federal Reserve, a privately-owned banking corporation, and lent into the economy). Virtually all money today originates as credit, or debt, which is simply a legal agreement to pay in the future.

Money as Relationship

In an illuminating dissertation called “Toward a General Theory of Credit and Money” in The Review of Austrian Economics, Mostafa Moini, Professor of Economics at Oklahoma City University, argues that money has never actually been a “commodity” or “thing.” It has always been merely a “relation,” a legal agreement, a credit/debit arrangement, an acknowledgment of a debt owed and a promise to repay.

The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. Money did not begin with gold coins and evolve into a sophisticated accounting system. It began as an accounting system and evolved into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) predated money as a “store of value” (a commodity or thing) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems—operated by the government the way that courts, libraries, and post offices are operated as public services today.

In the payment system of ancient Sumeria, goods were given a value in terms of weight and were measured in these units against each other. The unit of weight was the “shekel,” something that was not originally a coin but a standardized measure. She was the word for barley, suggesting the original unit of measure was a weight of grain. This was valued against other commodities by weight: So many shekels of wheat equaled so many cows equaled so many shekels of silver, etc. Prices of major commodities were fixed by the government; Hammurabi, Babylonian king and lawmaker, has detailed tables of these. Interest was also fixed and invariable, making economic life very predictable.

Grain was stored in granaries, which served as a form of “bank.” But grain was perishable, so silver eventually became the standard tally representing sums owed. A farmer could go to market and exchange his perishable goods for a weight of silver, and come back at his leisure to redeem this market credit in other goods as needed. But it was still simply a tally of a debt owed and a right to make good on it later. Eventually, silver tallies became wooden tallies became paper tallies became electronic tallies.

The Credit Revolution

The problem with gold coins was that they could not expand to meet the needs of trade. The revolutionary advance of medieval bankers was that they succeeded in creating a flexible money supply, one that could keep pace with a vigorously expanding mercantile trade. They did this through the use of credit, something they created by allowing overdrafts in the accounts of their depositors. Under what came to be called “fractional reserve” banking, the bankers would issue paper receipts called banknotes for more gold than they actually had. Their shipping clients would sail away with their wares and return with silver or gold, settling accounts and allowing the bankers’ books to balance. The credit thus created was in high demand in the rapidly expanding economy; but because it was based on the presumption that money was a “thing” (gold), the bankers had to engage in a shell game that periodically got them into trouble. They were gambling that their customers would not all come for their gold at the same time; but when they miscalculated, or when people got suspicious for some reason, there would be a run on the banks, the financial system would collapse, and the economy would sink into depression.

Today, paper money is no longer redeemable in gold, but money is still perceived as a “thing” that has to “be there” before credit can be advanced. Banks still engage in money creation by advancing bank credit, which becomes a deposit in the borrower’s account, which becomes checkbook money. In order for their outgoing checks to clear, however, the banks have to borrow from a pool of money deposited by their customers. If they don’t have enough deposits, they have to borrow from the money market or other banks.

As British author Ann Pettifor observes: "the banking system... has failed in its primary purpose: to act as a machine for lending into the real economy. Instead the banking system has been turned on its head, and become a borrowing machine."

The banks suck up cheap money and return it as more expensive money, if they return it at all. The banks control the money spigots and can deny credit to small players, who wind up defaulting on their loans, allowing the big players with access to cheap credit to buy up the underlying assets very cheaply.

That’s one systemic flaw in the current scheme. Another is that the borrowed money backing the bank’s loans usually comes from shorter-term loans. Like Jimmy Stewart’s beleaguered savings and loan in It’s a Wonderful Life, the banks are “borrowing short to lend long,” and if the money market suddenly dries up, the banks will be in trouble. That is what happened in September 2008: According to Rep. Paul Kanjorski, speaking on C-Span in February 2009, there was a $550 billion run on the money markets.

Securitization: “Monetizing” Loans Not with Gold But with Homes

The money markets are part of the “shadow banking system,” where large institutional investors park their funds. The shadow banking system allows banks to get around the capital and reserve requirements now imposed on depository institutions by moving loans off their books.

Large institutional investors use the shadow banking system because the conventional banking system guarantees deposits only up to $250,000, and large institutional investors have much more than that to move around on a daily basis. The money market is very liquid, and what protects it in place of FDIC insurance is that it is “securitized,” or backed by securities of some sort. Often, the collateral consists of mortgage-backed securities (MBS), the securitized units into which American real estate has been sliced and packaged, sausage-fashion.

Like with the gold that was lent many times over in the 17th century, the same home may be pledged as “security” for several different investor groups at the same time. This is all done behind an electronic curtain called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.), which has allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws.

As in the 17th century, however, the scheme has run into trouble when more than one investor group has tried to foreclose at the same time. And the securitization model has now crashed against the hard rock of hundreds of years of state real estate law, which has certain requirements that the banks have not met—and cannot meet, if they are to comply with the tax laws for mortgage-backed securities. (For more on this, see here.)

The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent (although that cannot be ruled out), but because they have been required to in order to come up with the commodities (in this case real estate) to back their loans. It is the way our system is set up: The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates. In the shadow banking system, they are sucking up our real estate and lending it back to our pension funds and mutual funds at compound interest. The result is a mathematically impossible pyramid scheme, which is inherently prone to systemic failure.

The Public Credit Solution

We as a community can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we’re always borrowing from Peter to pay Paul at compound interest.

The flaws in the current scheme are now being exposed in the major media, and it may well be coming down. The question then is what to replace it with. What is the next logical phase in our economic evolution?

Credit needs to come first. We as a community can create our own credit, without having to engage in the sort of impossible pyramid scheme in which we’re always borrowing from Peter to pay Paul at compound interest. We can avoid the pitfalls of privately-issued credit with a public credit system, a system banking on the future productivity of its members, guaranteed not by “things” shuffled around furtively in a shell game vulnerable to exposure, but by the community itself.

The simplest public credit model is the electronic community currency system. Consider, for example, one called “Friendly Favors.” The participating Internet community does not have to begin with a fund of capital or reserves, as is now required of private banking institutions. Nor do members borrow from a pool of pre-existing money on which they pay interest to the pool’s owners. They create their own credit, simply by debiting their own accounts and crediting someone else’s. If Jane bakes cookies for Sue, Sue credits Jane’s account with 5 “favors” and debits her own with 5. They have “created” money in the same way that banks do, but the result is not inflationary. Jane’s plus-5 is balanced against Sue’s minus-5, and when Sue pays her debt by doing something for someone else, it all nets out. It is a zero-sum game.

Community currency systems can be very functional on a small scale, but because they do not trade in the national currency, they tend to be too limited for large-scale businesses and projects. If they were to grow substantially larger, they could run up against the sort of exchange rate problems afflicting small countries. They are basically barter systems, not really designed for advancing credit on a major scale.

The functional equivalent of a community currency system can be achieved using the national currency, by forming a publicly owned bank. By turning banking into a public utility operated for the benefit of the community, the virtues of the expandable credit system of the medieval bankers can be retained, while avoiding the parasitic exploitation to which private banking schemes are prone. Profits generated by the community can be returned to the community.

A public bank that generates credit in the national currency could be established by a community or group of any size, but as long as we have capital and reserve requirements and other stringent banking laws, a state is the most feasible option. It can easily meet those requirements without jeopardizing the solvency of its collective owners.

For capital, a state bank could use some of the money stashed in a variety of public funds. This money need not be spent. It can just be shifted from the Wall Street investments where it is parked now into the state’s own bank. There is precedent establishing that a state-owned bank can be both a very sound and a very lucrative investment. The Bank of North Dakota, currently the nation’s only state-owned bank, is rated AA and recently returned a 26 percent profit to the state. A decentralized movement has been growing in the United States to explore and implement this option. [For more information, see public-banking.com.]

We have emerged from the financial crisis with new clarity: Money today is simply credit. When the credit is advanced by a bank, when the bank is owned by the community, and when the profits return to the community, the result can be a functional, efficient, and sustainable system of finance.

• Whose Bank? Public Investment, Not Private Debt: The public bank concept is gaining ground on the state level, attracting proponents across the political spectrum.
• New Economy, New Ways to Do Finance: As mega-finance crumbles, many farsighted
• individuals are putting their money in enterprises and financial institutions that benefit working Americans and the places they live.
• Move Your Money and Save: Big banks don't just undermine local economies—they're bad for your wallet, too.

How Comcast and Huge Telecom Players' Latest Gambit Could Destroy the Internet as We Know It

The telecom wars are heating up and the American Internet user is the proverbial pig on the spit.
By David Rosen, AlterNet
Posted on December 21, 2010

On December 21st, the Federal Communications Commission issued new rules governing Internet transmission. In essence, they effectively divide broadband content distribution between wireline and wireless transmission, providing nominal “net neutrality” protection over content distributed over telephone and cable lines, but deregulating such content sent through the airwaves.

As Timothy Karr of FreePress wrote in the Huffington Post:

“The rule is so riddled with loopholes that it's become clear that this FCC chairman crafted it with the sole purpose of winning the endorsement of AT&T and cable lobbyists, and not defending the interests of the tens of millions of Internet users.”

While Karr and others are focusing on the front story and the FCC’s capitulation to corporate interests, there is a more compelling back story as to how this regulatory farce came about. It is this story that maps out the underlying fictions that provide the rationale for the FCC’s actions and the likely long-term consequences for telecommunications in America.

* * *

As the telecom wars heat up, the American Internet user is the proverbial pig on the spit. A series of recent developments have drawn public attention to major challenges that are redefining the Internet. And it doesn’t look good for those championing Internet freedom, meaningful competition, improved quality of service or an end to conglomerate integration. Sadly, the fix is in.

In May, the DC Court of Appeals handed down a decision to what is popularly know as the BitTorrent case, Comcast v FCC. Originally, Comcast had blocked BitTorrent transmissions over its network and BitTorrent complained. The FCC investigated Comcast's traffic management of BitTorrent and ordered it to end its "discriminatory" practices. However, the Court ruled that Comcast has the right to limit the Internet connections of its customers who were using BitTorrent’s peer-to-peer (p2p) services on the grounds that such limiting falls under the role of network maintenance. More critical, the Court raised serious questions as to whether the FCC has the ability to regulate broadband Internet access altogether.

A few months later, Level 3 Communications drew the public’s attention to an effort by Comcast to impose a new pricing tier or “toll booth” on its transport of Netflix’s streaming video. This comes amidst deliberations by the FCC and Justice Department over Comcast’s bid to acquire NBC-Universal and a string of other questionable actions, including censorship charges, leveled against the company.

The BitTorrent and Level 3 actions were trial balloons pointing to deeper issues related to the future of broadband Internet. On one level, they reveal how key players in “content” – and especially video content – delivery are lining up against one another over, what else, money, or how the fees they charge are to be allocated.

More significantly, the battle puts into stark relief the issues of who controls the wires and wireless spectrum, the backbone of America’s communications infrastructure. Internet traffic, whether that of BitTorrent, Netflix or your email, is transmitted over the primary wires and spectrum controlled by AT&T, Comcast, Verizon and other networks and wireless services. The Internet rides over these wires and airwaves, and these companies control the access points.

The battle lines are being drawn over three key issues. First, will the current distribution model known for an open Internet, with “net neutrality” safeguards, persist – in other words, will all data continue to travel over telecom networks at the same rate and remain uncensored by Internet Service Providers (ISPs), excluding “illegal” content like child pornography?

Second, will the current consolidation of ISPs persist with giant, integrated conglomerates like Comcast and Time Warner controlling both the network and the content -- or will there be a renewed commitment to “open architecture,” to an Internet promoting meaningful competition among multiple access and content providers on the basis of services offered and prices charged?

Third, will the FCC further extend its 2002 reclassification of broadband service as an “information service,” thus further removing data transport from traditional “common carriage” obligations? Will it further collapse the difference between the Internet as a distribution network from the content or applications it supports?

FCC chairman Julius Genachowski December 21st announcement is a fictions compromise, like Obama’s plan to extend the Bush-era tax give-a-ways, and will only serve to further commercialize Internet traffic. His support for "usage-based pricing" will permit wireline ISPs to charge extra fees to heavy Internet users, like Level 3, who transport lots of video or videogames. And, in keeping with the Obama spirit of compromise, he opposes ISPs from “throttling” or slowing data traffic, thus protecting one aspect of net neutrality.

The FCC proposal is another example of how Washington politicians and their dutiful bureaucrats capitulate to big capital to the determinant of ordinary Americans and the long-term erosion of the U.S. economy. The FCC’s plan will set the stage for another round of federal give-a-ways to the giant telecoms, accompanied by an increase in customer charges and a further erosion of service.

* * *

At the heart of the FCC proposed new pricing models for the Internet is the shibboleth of network data traffic congestion. It is an alarm being raised by many within the telecommunications industry and is based on the false assumption that, as video becomes an increasing larger proportion of data traffic on the Web, the network is in jeopardy of collapse. The myth of congestion provides the rationale for a new pricing model as well as the need to end net neutrality and restrict ISP competition.

The Internet and Web consists of four interlinked components: (i) the phone or cable company that provides the “last mile” facilitating the consumer’s broadband connectivity through the residential telephone company’s digital subscriber line (DSL) or cable modem fiber line; (ii) the ISP that connects the customer to the PoP (point-of-presence) on the Internet and World Wide Web, (iii) the “middle mile” provider that links the customer to wider network; and (iv) the provider of long distance, high-speed connections to the network “backbone.”

While the middle mile and backbone utilize high-capacity fiber networks, the crunch comes at the last mile. And it is this piece of the grid that reflects the telecom trust’s failure to upgrade its networks. They have pocketed billions of dollars in subsides and tax breaks and have little to improve their networks. As with most American industrial sectors, the demands for short-term profits makes telecommunications providers unable to meet long-term market demands. No wonder the U.S. ranks 15th among developed counties in terms of broadband utilization.

According to a recent report from Cisco Systems, by the end of 2010, worldwide global online video users are projected to surpass 1 billion and video is projected to account for 40 percent of consumer Internet traffic. The traffic includes Internet video from YouTube, TV programs from Hulu, video-on-demand like Netflix movies and p2p sharing like BitTorrent. Enhanced video quality like 3D and HD only further compounds the video signal.

Online traffic grew 45 percent during 2009 to 176 exabytes per year (an exabyte consists of a million trillion bytes) and is projected to reach 767 exabytes per year by 2014. According to Cisco, this means: “The average monthly traffic in 2014 will be equivalent to 32 million people streaming Avatar in 3D, continuously for the entire month.”

Determining U.S. Internet video traffic is much trickier. Sandvine, an Ontario-based network services company, found that in the August-September 2010 period, North Americans gobbled up only one-third as much broadband video as users in the Asia-Pacific region; North Americans consumed an estimated 4 Gigabytes per month of Internet bandwidth whereas those in Asia-Pacific region used 12 Gigabytes. Sandvine also found that Netflix, with nearly 17 million subscribers, accounted for more than 20 percent of downstream Internet traffic during the primetime TV viewing hours of 8 to 10 p.m.

ComScore, a Reston, VA, market research firm, offers a different take on Internet video usage. It found, in May 2010, that 183 million U.S. Internet users watched nearly 34 billion online videos. Google sites, especially YouTube, account for 14.6 billion videos, representing 43.1 percent of all videos viewed online. Hulu, a joint venture of NBC and FOX and aggregating videos from nearly 200 content providers, came in second with 1.2 billion videos (3.5%), with other sites trailing behind.

Champions of the telecom trust rallied to the Sandvine findings as proof of network congestion and the basis to impose a new pricing model. This model goes by a variety of names, "usage-based pricing,” "paid prioritization" and “pay-as-you-go Internet access,” among others. Kyle McSlarrow, president, Nation Cable and Telecommunications Association, a trade group, recently wrote that the cable industry backs the new pricing model: "A usage-based pricing model, for instance, might help spur adoption by price-sensitive consumers at the lower end of the socioeconomic ladder," he wrote. Craig Moffett, an analyst at Bernstein Research, chimed in with an investor’s glee: "Usage-based pricing will preserve, and even enhance, the economics of cable's infrastructure . . . even if consumers eventually get some, or even all, of their video content over the Web."

Peter Burrows, of Bloomberg Businessweek, takes the argument one step further. Drawing upon research from Juniper Networks, he insists that, based on a "revenue-per-bit" model, the big telecom conglomerates like AT&T and Comcast “will see [their] Internet revenues grow by 5 percent a year through 2020,” but traffic will “surge by 27 percent annually.” “By this math,” he insists, “the carriers' business models break down in 2014.” Or does it?

* * *

Freud once famously noted, “"Sometimes a pipe is just a pipe." And sometimes it isn’t. This is the same with Internet traffic congestion.

The Internet has evolved through three phases and each has been defined by “congestion.” The first phase, during the pre-1990s when the Internet had yet become a mass-market phenomenon, congestion was experienced in email delays, limits to bulk file transfers and low bit rate interactive sessions. The second phase of the 1990s saw rapid Internet adoption with dial-up accounts offering 56.6 kb/s rates and congestion taking the form of a slow system with only intermittent connectivity. In a famous 1995 case, the phone companies attempted to block companies offering the new service, Voice-over-Internet-Protocol (VoIP), on the base of, yes, congestion; companies like Vonage would not exist today had the telecoms had their way. The third phase began around 2000 and saw the wide-scale adoption of broadband. It eliminated the dialup bottleneck with complementary advances in “upstream” capabilities (e.g., more powerful multimedia-capable PCs) and downstream content delivery (e.g., “rich” and interactive media content).

Internet traffic has grown due to four principal factors: (i) an increase in the number of online subscribers, (ii) the amount of time each subscriber spends online, (iii) the growing mix of wireline and wireless distribution options and (iv) the differences and complexity of applications (especially video-based apps) carried online.

However, as Andrew Odlyzko, a professor at the University of Minnesota and former AT&T Labs researcher, argues, “there is no evidence of wireline Internet traffic growing so fast as to require intrusive traffic interference to control it. … traffic growth rates have been declining, to levels slower than the rate of improvement of latest transmission equipment.”

Adding to this critique, three MIT scholars, Steven Bauer, David Clark and William Lehr, recently released an invaluable study on web traffic, “The Evolution of Internet Congestion,” and offer the following warning: “It is certainly possible that network operators, under the guise of managing congestion, may exploit their control over the network pipes in ways that are socially undesirable ….” Their warning should be the starting point for linking alleged congestion to changes in pricing and overall control of the Internet.

Comcast, like AT&T, Verizon or other dominant controller of distribution, has gained ever-increasing control over access by and to its subscribers. In order for a subscriber to reach the Internet, and for content providers to reach the consumer, they have to pass through an ISP's last-mile network, whether over the phone line or airwaves. The ISP is the gatekeeper. This situation gets more troubling when one recalls that in addition to being a last-mile gatekeeper serving residential, business and wholesale customers, Comcast, like the others dominant players in the telecom trust, also operates a powerful backbone network and is now moving in to content.

Comcast is seeking, like other dominant carriers, to be both “vertically” integrated, i.e., control connectivity from the last-mile to the backbone, as well as “horizontally” integrated, i.e., control available content or applications like NBC-U. Its two-dimensional system of integration pushes beyond the iPhone “walled garden” model by which Apple controls the applications available to the consumer. This two-dimensional integration suggests the real, long-term danger that the FCC and Congress refuse to recognize.

The real drama being played out in terms of Internet congestion and changing pricing models needs to be seen as part of a more profound and systemic change in the control of the nation’s telecommunications infrastructure, especially the Internet. Comcast and other conglomerates that make up the telecommunications trust, like the trusts that dominate the oil and gas sector, health care or financial services, are aggressively pushing to control all aspects of the market sector. Unless the debate over congestion and pricing is opened up, refocused to the larger question of industry consolidation, the FCC December 21st proposal will only make the problem worse.

Stay tuned – the worst is yet to come.

Secrets of the Ruling Class

Exposing the Think Tank Culture
By SAM SMITH

While Wikileaks has begun to reveal some important state secrets, that's not the only thing that is making the establishment extremely nervous. Another huge problem is that the documents are providing a chain of evidence illustrating that the people running our government are not only frequently stupid, corrupt, and/or dishonest, but that in certain fields such as foreign policy, this is dominant rather than deviant behavior. Thus it is not just secrecy that is under attack but a whole culture of impunity.

While this is already a widely held view among many ordinary folk, from the perspective of the ruling class, documentation is much more dangerous than mere opinion. Paper work is truly scary.

If this all sounds slightly familiar, a description of an old movie may help:

"Upon their triumphant return to the Emerald City, Toto exposes the Wizard as a fraud, opening a curtain and revealing a non-magical man operating a giant console of wheels and levers."

Not a bad description of the way Washington works these days.

To be sure, Wikileaks also reveals some honest people trying to do honest things.

But the rules of the game are that power and honesty are generally mutually exclusive, a point gently made by the Independent describing Britain's former drug czar's conversion to legalization: "Mr Ainsworth said his departure from the frontbenches now gave him the freedom to express his view that the 'war on drugs has been nothing short of a disaster.'"

In other words, while holding public office he was not allowed to reveal that the war on drugs has been nothing short of a disaster. It is hard to fit such a rule into a definition of functioning democracy.

To make such a prohibition truly work, however, you need to have only a relatively few people in on the secret and not, say, two million military personnel with the proper Internet passwords.

This is the further damage that Wikileaks has done. It turns out that a private in Iraq can know more state secrets than most members of the club known as the Washington establishment. All those years in the Ivy League, all those lunches at the Metropolitan Club, all those boring lectures at think tanks undone by a few CDs and USB drives.

Washington's culture has long been premised on a small number of people sharing power, lunch and secrets, projecting - with the aid of the sycophantic scribes of the media - an aura of competence and wisdom.

This is a culture which causes the thoroughly embedded Daily Beast to lead a story with the line, "As the world mourns Ambassador Richard Holbrooke. . ."

To imagine that "the world" mourning Richard Holbrooke requires a global perspective that borders on the microscopic, but that is how America's ruling class thinks.

The idea that a mere private in the military and some Australian nut could so thoroughly blow their comfortable cover is, to it, truly shaking.

Wikileaks has thus not only exposed state secrets but also the Wizards of Washington, and it's probably the latter revelation that these wizards hate the most.

Waiting for a New Economic Theory

The Economic Crisis and the State of Economics
By SASAN FAYAZMANESH

Economic theories, for the most part, have emerged in response to particular social situations or governmental policies. For example, Francoise Quesnay’s 18th century Tableau Economique came into being in reaction to the plight of the French peasantry, excessive taxation, and government regulation that followed mercantilist teachings. Adam Smith’s “invisible hand” theory similarly appeared as a response to mercantilist restrictions. It also corresponded to the early stages of the Industrial Revolution, when inventions and innovations made England relatively prosperous. Thomas Robert Malthus’s population and glut theories emerged in the midst of the Industrial Revolution, when migration of peasants to the cities, unemployment, and poverty became rampant. Karl Marx’s version of the labor theory of value was a response to the revolutionary movements in 19th century Europe, as exemplified by the 1848 uprising and the 1871 Paris Commune. John Maynard Keynes’s “general theory” was developed in the midst of the Great Depression and was a response to the laissez faire economics and policies that prevailed at the time.

It is too early to see if the recent economic crisis—which started in the financial sector of the economy and spread to the productive side—will produce any novel theories. What we have seen so far is different economists reciting some old theories and advocating corresponding remedies. This is exemplified by three groups of economists, ranging from the most ardent supporters of laissez faire to those who see no future for capitalism.

The free market advocates still fall back on the marginalist or “neoclassical” theories that have dominated economic teaching since the end of the 19th century (the term “neoclassical” is a misnomer, but it is widely used). This unreal, a-historical theory started not with analyzing any real economy or human behavior, but with certain concepts in mathematical physics. The marginalists’ bizarre point of departure then led to a peculiar concept of the market that the proponents of laissez faire found quite useful. A market in this theory consists of two curves, a supply curve and a demand curve. “Equilibrium price” is where these two curves meet. Left alone, all such markets will self-adjust and bring about the equilibrium price. This holds for the “labor market” as well, where the equilibrium real wage will bring about full employment. It also holds for the so-called capital market, where the interest rate is determined. Given this self-adjusting mechanism, anything that interferes with the market, such as government or central bank intervention, is considered to be undesirable. Government deficit spending merely results in higher interest rates, and monetary policy ends with price changes, particularly inflation, if the money supply increases. In either case, the “real variables,” such as the level of employment or real output of goods and services, remain intact. In this happy, serene world there is never any crisis, especially a monetary crisis. Actually, in such a world there is no need for money, since all variables are real and money is just a “veil.” Also, in this tranquil and trouble-free land there are no classes, no workers no capitalists; there are only consumers and producers, getting along happily ever after.

When the current crisis began and the capitalist world economy appeared to be on the brink of another disaster, the proponents of the neoclassical theory trembled at first. They retreated and abandoned their usual arguments concerning the glory of unfettered markets. However, now that falling into the abyss of another depression appears less likely, they are back to the theories of leaving the market alone, reducing taxes for the captains of industry and finance and cutting spending when it comes to the working class.

At odds with these free marketeers are various shades of economists whose roots can be traced to Keynes. Keynes clearly saw the incompatibility between the neoclassical theories and the real world, particularly during the Great Depression. He criticized certain laissez faire aspects of these theories and ultimately advocated for fiscal and monetary policies. Yet, since he was educated in the same neoclassical school, his criticism of these theories was halfhearted and did not shake the foundation of the school. A few critical notes at the beginning of The General Theory of Employment, Interest and Money (1936) were followed by some theories that were incomplete, underdeveloped and ambiguous. The result was many possible interpretations of his theories and their ultimate subsumption under the “neoclassical synthesis,” a combination of the old-fashioned neoclassical theories, called microeconomics, and Keynesian theories, called macroeconomics. This hodgepodge of theories became, and continues to be, the regular staple of economics students.

The ambiguities and lacunae in The General Theory also allowed for very different policy prescriptions. Take, for example, Keynes’s theory of the “multiplier,” a theory that looks at the stimulating effect of spending, particularly government expenditures, on output and employment. The theory was ambiguous enough when Keynes borrowed it from another economist, R. F. Kahn, but Keynes added to the ambiguity by stating:

If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again . . . there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.

This seemed to imply that it made no difference if government spending was on useful things or wasteful things. Actually, a number of other comments in The General Theory support this indifference. For example, just before the above passage Keynes simply stated: “Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.” Such statements made “military Keynesianism,” or warfare, an acceptable form of economic policy. To this day, the followers of Keynes are unclear as to whether going to war is good for the economy and a stimulant or bad for the economy and a drag. Thus, we see some individuals advocating the start of yet another war in the Middle East as a way to rescue the US economy and some opposing the wars already in progress by pointing out their overall costs and how such costs are destroying the economy.

In addition, the silences in The General Theory allowed for the simultaneous existence of different types of Keynesian economists. Even though all such economists agree on the need for fiscal and monetary policy, they do not agree on the limit of such policies and the exact method of pursuing them. For example, liberal Keynesians—such as the “Post-Keynesians” who try to distance themselves from the neoclassical teachings—and conservative Keynesians—such as the “New Keynesians” who are quite eclectic in their theories—are often at odds with one another as to how high the deficit can go or what steps the Federal Reserve System should take. They also disagree over such matters as how much regulation the financial sector of the economy needs. Yet, the squabbles between different types of Keynesians are quarrels within the family. All Keynesians, similar to Keynes, believe in saving capitalism from itself; reform, and not revolution, is their aim.

This brings us to the Marxist economists who, when it comes to solving the ills of the capitalist society, believe in revolution and not just reform. For these economists a little more or a little less deficit spending, or tinkering with the money supply, will not solve the long-term problems of capitalism, particularly when it comes to the current worldwide economic crisis. Neither would the financial woes of the capitalist economy be solved by more regulation.

In their arguments, most Marxist economists fall back on Marx’s mature writings, particularly his Capital, the first volume of which was published in 1867. Setting aside the fact that Marx’s economic project was never finished and that his labor theory of value has always been the subject of controversy, Marx’s work is one of the few economic writings that actually tries to address the issue of economic crises. In Capital there are two major theories of crisis, one cyclical and another secular. The first deals with disproportionality or imbalances between different sectors of the economy, that is, between the sectors that produce “capital goods” and “consumer goods.” Marx’s second theory deals with the tendency for the rate of profit to fall over the long haul. However, neither of these theories explains the current economic crisis. It is, of course, true that in Marx’s theory of capitalist economy money plays a central role in production and could therefore cause crisis at various moments. But, there is no detailed and comprehensive theory of money and credit in his theory that would enable us to deal with modern monetary problems.

Of course, one should not expect theories that were developed in the middle of the 19th century to explain unique economic crises in the 21st century. This is particularly true if one believes, as any good Marxist economist should, that capitalism continuously evolves and poses new problems. Thus, any theory trying to explain an evolving economy must itself evolve and grow. That, however, does not appear to be the case when it comes to Marxian economics. Very little has changed in this field since Marx wrote his Capital, as is evident from various books that have been recently published by Marxist economists, as well as the discussions and debates that are going on between these economists.

There is another major problem with the application of Marx’s theory to the recent economic crisis. Given the period in which it was written, Marx’s Capital was not about reform, but was about revolution, a socialist revolution. The work was meant to sound the death knell of “capitalist private property,” the expropriation of “expropriators.” And the sound was supposed to be heard in the most advanced capitalist country, where forces of production had grown so much that they were no longer compatible with the relations of production. Presumably, this would have been England, where the workers would have established the first socialist economy. What a socialist economy might look like, however, was never delineated by Marx beyond a short and vague sketch in the Gotha Program written in 1875. Such a revolution never happened, and a socialist society was never established (setting aside, of course, the Russian Revolution of 1917, when in a relatively less developed country some revolutionary intellectuals, in the name of workers, came to power and presumably established “state capitalism”).

Nearly a century and a half later, there is no sign of workers’ uprisings in any part of the globe, particularly in advanced capitalist countries. We also have no idea, beyond that discussed in the Gotha Program, what a socialist society might look like. Thus, waiting for the working class to rise, put an end to a chronically sick social system, and establish a new order does not appear to be feasible in the near future, unless one has a strong set of religious beliefs, as some “Marxists” do.

What is to be done? Should we leave the markets alone, as marginalist economists argue, even though we know that their two-curve markets have never existed and, historically, when markets were left alone they always fell into crisis? Or should we rely on increasing budget deficit and easy money policy to get us out of the present economic conundrum, as Keynesians advocate? In the latter case, which Keynesians should we listen to and why, knowing full well that none of the renowned Keynesians of our time predicted the 2008 crisis that brought the US economy to the brink of depression? Or should we wait and hope for workers’ uprisings to end the ills of the capitalist economy once and for all, as some Marxist economists are still hoping for, even though there are no signs of such uprisings anywhere in the world?

It seems that none of the prevailing economic theories provide a viable option for understanding and dealing with the current economic woes. Looking back at the history of economic thought and emergence of new theories at particular historical conjunctions, one can only hope that the current worldwide economic slump will generate new ways of thinking and new theories.