Friday, March 4, 2011

Please Read This, Charlie Sheen!

(Because the bruhaha caused by Charlie Sheen has taken precedence over everything else in the world, according to the corporate mainstream media and even the fringe media--poor, poor Alex Jones thinks Sheen is clean! That's just sad. Here is an article I found entitled "Please Read Charlie Sheen." I had to share.--jef)

Mad King Crank
By DAYLA HEPTING

Crank has been known by many names. Crank, I suppose, is what it comes down to. Cranks your motor. Revs it up to 10,000 rpm, knocks a piston through the block, blows your head gasket, then your brains leak out. You can crank that engine til your face turns blue and that engine will never fire again. Dead as a doorknob.

Methamphetamine was the beginning of this story. Hitler’s big brain scientists cooked it up. It was given to pilots and the troops to keep them alert and focused. It quickly found its way into the field issue packs of the American military. Although my brother-in-law tells me that when he worked in supply in Da Nang it was not in the service packs of those soldiers because he methodically took it out of every pack. I suppose he was doing it for their own good so they would not turn into crankers.

What we call crank now is a totally different thing. Sometimes it is made with a mishmash of chemicals — sometimes they cheat and just use a concentrated powder form of ephedrine. Ephedrine came from ephedra. It was a plant the Indians made a tea of. A mild stimulant. When Brigham Young brought the Mormons to the Salt Lake Valley he found coffee to be in short supply so the Mormons started drinking Indian tea. It’s a spindly desert plant with no leaves that grows in the early spring. It looks like knotted bamboo growing in a tiny bush. When the Mormons started drinking it the travelers who came through the valley on the way to the golden hills of California took to calling it Brigham tea or Mormon tea. If you look in your herbal dictionary you will see these names listed.

Soon the scientists had extracted the active ingredient and made a synthetic form of ephedrine no longer dependent on finding a scarce desert plant with a short growing period. It was merchandised in cold medicines because it dried the sinuses as well as provided a feeling of renewed energy.

Lately the crankers have taken to buying up all the Sudafed in Walgreen’s and cooking it up again into a more concentrated form that can be shot up, snorted or smoked like crack.

Ephedrine, however, is mostly a motor stimulant. Methedrine is something else entirely. Meth is a brain stimulant. Therein lies the great dividing line. Eventually both stimulants consume you from the inside out until you collapse into yourself and become half of your original self. If even that.

But the pathway is slightly different.

I should add that before meth hit the scene there was dexedrine — called “dexies,” I believe, by the cool hipsters and jazz men of the late forties/early fifties. Dexies worked as an antidote to the land of nod (heroin for those who don’t know). You could shoot a nice balloon of Mexican yellow then slam-dunk a handful of dexies so you could find your way to the stage and play a riff or two of god’s own music.

Those were the days. The days of Lenny Bruce, Bill Evans, the great Art Pepper, Coltrane, Miles Davis. The cool fifties, not the fifties they remember in country music. No, not at all. The real fifties. Black and white. The Man with the Golden Arm. Lenny Bruce and his old lady — I forgot her name, Honey? Yeah, Honey that was it — walking around North Beach, his eyes so dark and full of sharp pain that he tortured his thoughts into barbs to sting the rich. Mike’s Pool Hall where Big Daddy Nord wore a white apron and held court. The room full of smoke and jazz men black and white hipsters, the pool tables always backed up with quarters. 8-balls slamming into a pocket, good beer, strong coffee, huge beef sandwiches on real San Francisco sour dough bread baked every day up Grant Street in small shops by Italian men and women who never quite got over to America without dragging old Italy with them. To our delight.

I got in on the tail end of all that. When I arrived in San Francisco it was still possible to see Lenny Bruce in Vesuvio’s, still possible to attend all-night parties (a gentle word for what actually happened) with Allen Ginsberg, Michael McClure, Phillip Whalen, Bob Kaufman and a whole stage full of unknown, hopeful poets like myself. It was the death of the beats, and the hippy thing had not yet come into to being. I always heard stories about if I had only been here five years ago. I never got to see the Anxious Asp. But I knew the Cafe Trieste, the Enigma and of course Vesuvio’s, which is still there.

About the time I first came to the Beach a new drug was coming up. Liquid methamphetamine. I had taken my share of bennies and dexies and smoked pot everyday (which was required otherwise you would be a narc). None of it was my bag. But I tried to be hip. I had a copy of Howl, later discarded for Aleister Crowley. I wore tights or a pair of skin tight 501s with a button fly so you could cram your butt into them one button at a time. I wore huge sweatshirts and Jesus sandals hand-made in a sandal shop on Grant by a huge man with a big bushy beard. He actually worked in Venice Beach at one time, I think, or at least there was a man just like him, huge and bushy bearded, who used to make sandals on the boardwalk at Venice Beach. Am I wrong? Or does anyone remember?

In a pot dazed confusion one day I met a cool black jazz guy named Zack. We went up to his room in the Swiss American, which I think was the name of the hotel that was above Carol Doda’s blinking tits. His room was at the front, over the sign, so blinking tits constantly reflected on the walls all night. He used only candles — no electric light. Incense was burning patchouli in my brain, everlasting patchouli.

He took out an ampoule and broke the top off the neck. Then he poured it into a syringe and shot us both up. A great power rushed through me and when it hit my heart I thought it would burst into flame, but instead it slammed shut and stopped up and I waited to die, my mouth wide open like a fish hoping for air until suddenly it kicked in again and rapidly caught up to speed. My mind opened wide like my heart and a new vision came to me. I was stronger than god. I was more alive than alive. I had the will, the mind and the extraordinary vision of the gods. I could see through walls. I could do anything I dreamed of doing. I could speak to the dead. I could save the living…

Or so I thought. I never smoked pot again. I drifted in a methedrine haze for years. My poetry went away. The gods went away. Even liquid meth went away. It was replaced by crystal meth, which they said was what was left over after you made liquid meth, but crystal meth was a grinding scene, trapped in rooms with cranked up maniacs, hoping to live another day. Dry streets, sad broken lives.

This is all that it came to.

But I did survive because one day I decided king heroin could put an end to this endless sleepless bright crackling glass methedrine world. So I put sweet morphia into my arm and escaped into a dream which quickly became a nightmare that few of you would ever be able to understand.

I ended up in Synanon as most people know and so here I am today. A survivor — so to speak.

Crank is a wintertime drug. Anderson Valley. California, is a place of gawd-awful winters. Just as here, in Salt Lake where I recently moved. In both towns you see the crankers grinding about their daily missions of no consequence. Pathetic rat-like creatures spinning endlessly in a cage of their own creation.

I used to laugh out loud when I drove by Navarro — the “deep end” of Anderson Valley — and saw the arc lights of a speed freak welder as he dismantled cars and remantled cars endlessly to no end. Every project abandoned mid-way to start another that seems more urgent at the moment. The lights that were rigged over a great hole in Navarro so crankers could dig for old bottles because those old bottles (from the logging days) were worth millions on the Antique Road Show.

Or so they imagined.

It was the Navarro cranksters’ version of the old gold rush. Shreds of glass held to the light. Empty marvels of endless crank. After all, it is a motor activator. It is a working drug. It was designed to increase worker productivity. Catch-22. Only for so long. Then it devolves into endless searching and abandoning and searching and eating your own tail.

What does all this tell you?

Nothing.

Those who are caught in the thrall of crank will crank until they finally rev it up a notch too hard. Some will die. Others will be survivors like me. We all know each other. I can look at any stranger and tell you if they have been down that road before. I know because they have big holes in their brains, a certain worn look to them. A history in their eyes.

I, of course, don’t imagine myself to look that way, but maybe I do to them, because I always see a little glimmer of pleasure and recognition in their eyes when we meet. Like we are kindred spirits, survivors of our own generation’s holocaust.

Proposed: A March on the Capitol in Washington, D.C. to Peacefully Overthrow the Govt.

Peaceful Overthrow of the US Govt
by Spiderlegs

That title get your attention? I hope so. I usually post a lot of articles on my blog and every now and then post something of my own, and here is that every now and then. The bulk of those who read my blog are on Google Buzz, so shout out to the Buzzers.

This summer, I propose we the people make a march on the Capitol in Washington, D.C., like it's been done so many times before, as a protest to the govt budget cuts directed by the corporate interests which have obviously taken over the govt. Here's the deal:

The purpose of the march is a "Peaceful Overthrow of the Govt.," similar to what happened in Egypt. We demand that Congress steps down, the president steps down and that the armed forces don't step up. Ideally, we would set up new elections and such, but this is obviously a symbolic event to get corporate influence out of govt.

The point we'll make is that corporations no longer get to influence budgets, since they don't pay taxes, they are stripped of their corporate "personhood", they cannot fund election campaigns, and their lobbying status is removed. And this is where it gets hairy. We demand this while we are there and we won't leave until laws are written and passed that remove corporate influence from government completely.

That means corporate lobbyists no longer write our laws with loopholes that favor the corporations directly affected by those laws. It means that corporations cannot buy politicians to favor their interests at the expense of the people. Anyone remember "...Government of the people, by the people, for the people, shall not perish from the Earth."Well, it has perished here in Corporate America. And it will only get worse until we finally man-up take responsibility for our country. 

Our budget deficits are rooted in 3 things, none of which are caused by the objects of deficit hawks with their pruning knives:
  • Corporations don't pay their taxes and the IRS doesn't pursue them for it. Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a study by the Government Accountability Office. This is a projected loss of a minimum of $100 billion a year in lost taxes--just in offshore tax havens. Oh, and they have outsourced many of our jobs overseas, in addition to not paying their taxes. Oh, and all the companies which received billions in federal bailout money? GM and the Wall Street banks--none of them have paid taxes in that period. Screw them!
  • The Bush Tax Cuts don't do any of the things those who pushed for it say they did. No job creation, no trickle down, no re-investment, they are just sitting on it. Corporations made record profits in 2010. RECORD PROFITS, and we have the highest unemployment numbers since the Great Depression. What it HAS done is to widen the wealth disparity of this country to pre-Federal Reserve era numbers. The wealthiest 1% control 30% of the total wealth, while the top 20% control 85% of the total wealth, and pardon my language, that is FUCKED UP! Over the next 10 years (to 2020), total tax-cut costs will equal $3.9 trillion, reaching nearly $600 billion or 3.3% of the economy in 2014 alone. Over the 10-year period from 2005 through 2014, the direct costs of the enacted  tax cuts will total $2.8 trillion.  The cost equals 2.1 percent of the economy in 2014. From 2005 through 2014, the increased interest payments on the debt that result from the tax cuts would amount to $1.1 trillion.  The tax cuts increase deficits by nearly $4 trillion between 2005 and 2014. The cost of these tax cuts are more than the combined shortfall in the Social Security and Medicare Hospital Insurance trust funds, which are in danger of being cut--to afford the Bush Tax cuts.
  • And of course, there are the two never-ending wars in Afghanistan and Iraq which have cost $1 trillion since 2001 (according to the CBO). By the end of the decade, assuming the wars will still be going--and what has given any indication that they won't?--even with a drastic reduction in troops, just those wars will cost another $1 trillion. This doesn't even include the regular Pentagon budget which averages about $700 billion/yr, not including the black budget.
Do the math: by 2020, those 3 huge deficit whore programs will cost us:

Lost corporate tax revenue (2005-2020): $1.5 trillion
Bush Tax cuts (2005-2020):                       $4 trillion
Iraq/Afghan Wars:                                        $2 trillion
                                                                       $7.5 trillion

We can't bury ourselves in distractions anymore. Some of us won't be able to stay for long, and in fact, none of us can afford it, with costs being so high, but the cost of doing nothing is more than we can ever afford to pay. We have to do this. We have to demand our govt be free from the corporate agenda which has done everything to destroy the people of this country, and I want to tell you something personal about me: I'm a patriotic person. I don't care about the flag, about our history, good and bad, about our wars, about our politics (as such), but what I care about are the two things that make America great: it's people and their freedom.

This protest will let our govt know there will be a retribution at the polls in 2012. If you are a Republican, typically, vote in the primary for the opponent to your GOP representatives and senators. If there isn't one, vote libertarian. But for just this coming election in 2012, don't vote Republican or Democrat.

Democrats, you can vote green or libertarian or progressive, just don't vote for a Republican or Democrat. I wish more than anything (even more than I wish for a flying car and a laser gun), that it would just "click" with everyone to vote out the two party system, that is essentially a single harlequin wearing both his "happy" and "sad" masks on either side of his head. Their interests are not ours, and thus, our protest to "peacefully overthrow the govt" is based on that: we the people are not fairly represented by those we elect, and therefore, their service is rendered null and void by we, the electorate. The president sucks too. They all have since Eisenhower, and he wasn't "all that."

If the future of the corporate role in our government concerns you; if you look to the future and only see darkness; if you love the people and the freedom of this country, and take that love seriously, I'm going to ask that you please reshare this one post from me in order to cause a discussion about logistics (dates and locations and such). I wrote it, it's not spam (though, I admit to hoping it becomes a meme), and I will not ask for you to reshare anything else I post, unless it pertains to a specific protest in Washington against the corporate control of our govt. It is my burning issue. It is my bogeyman, my paranoid conspiracy theory come true. I don't believe in the Illuminati, I don't believe the Freemasons have much to do with much, I don't believe in UFOs or Bigfoot or Nessie or anything of the sort. I do believe that the people who run the global corporations are, to a man/woman, corrupted by greed so much they can't be saved--like pedophiles. No amount of therapy--of basic moral understanding--will convince them to abandon their control of the govt. They are a cancer that must be removed if we are ever going to experience the freedom we thought we had as described by the Constitution, a beautifully flawed document that was supposed to keep us from having to do what we must do in order to preserve it. We need to set a date really soon.

If no one cares, then that's my answer, and I thank you for reading this to the end of the post.

"...Government of the people, by the people, for the people, shall not perish from the Earth."--Abraham Lincoln

Peace and non-violence.

--jef

North Carolina Tells Working Class People to Get Screwed

Robbing Us With Their Fountain Pens
By RON JACOBS
"Some men rob you with a six gun/And some with a fountain pen"
      --Woody Guthrie

In her 2011 opening address to the North Carolina state legislature, Governor Bev Perdue called for a two percent reduction of the state's corporate income tax, a move that would reduce the state's tax receipts by more than a half a billion dollars over the next two years. This call from Perdue, a Democrat, is one that has been championed by the Republicans of North Carolina for a long time. Besides being one more bit of proof that there is very little difference between the Democrats and the GOP when it comes to kissing corporate tail, this call flies in the face of logic.

Like most other places in the US and elsewhere around the world, the state of North Carolina is facing millions of dollars in cuts. Libraries are being closed, public employees are being laid off and positions are not being filled. Schools are increasing class sizes, laying off teachers and threatening some districts with closures. Even police and other law enforcement (usually untouchable) are concerned about layoffs. Yet, Perdue and the legislature want to cut corporate taxes. Already, the income tax surcharge on North Carolina's wealthiest taxpayers ended with the 2010 tax cycle. So, what are they thinking? Why is it that working people are expected to take cuts to their pay and benefits while the wealthy are not expected to take cuts and, in addition, are given a break ?

The rationale behind this call to reduce corporate taxes is as old as the tax system. According to those who champion this nonsensical idea, the reason North Carolina isn't creating jobs is because corporations do not want to pay the 6.99% tax in North Carolina. If that tax is reduced, the tax cut's proponents claim that more businesses will set up shop in the state. Ronald Reagan used a similar argument when he was president. He called it the trickle-down theory. (As far as I can tell, it felt a lot more like getting trickled on). The most recent national politician to make this idea into law is President Obama when he extended the tax cuts for the wealthy.

The big problem with this theory is that it doesn't work. Jobs have been leaving this country by the millions since Reagan instituted his tax cuts and they haven't come back. Corporations don't want a tax cut. They want no taxes at all. Their bottom line is profit and most of them will go where that profit is the greatest. In other words, where labor costs are minimal and taxes are even less. It is the people of North Carolina that work in North Carolina's factories and buy the corporations' products, yet the politicians would have us believe that the corporations are doing us a favor by being here, and should therefore have to pay a lower rate of tax than the rest of us.

It should not be the duty of the government to facilitate a race to the economic bottom for those who live and work in North Carolina or any other state. Nor should it be the function of any government entity to enhance the coffers of its corporations at the expense of its citizens. Yet, by lowering the tax rate on corporations, this is exactly what North Carolina is doing. With less tax monies, there will be less money for services like schools. Already corporations come to North Carolina looking to pay lower wages, given the lack of unionized labor there. They should not also benefit from paying a lower rate of taxes than those who work for them.

The scenario described above is one that rightwing forces (with no small amount of acquiescence from liberals) have been putting into place nationwide for decades. The cost of this endeavor has been the safety and health of workers; the impoverishment of entire neighborhoods in the United States and nations around the world; and the impending destruction of the educational system, to name the first that come to mind. If this scenario comes true, it may never reverse.

The point being made here is that working people deserve a decent life just as much as those that employ them do. Just working is not enough. The worker uprising in Wisconsin is a recognition of this. As for those who tell private sector workers that it is the public sector workers' fault for the current economic mess--that is, pure and simple, a lie. It is the rapaciousness of Wall Street and the governments that work for it that are to blame. These and other lies pitting workers against each other are just one more attempt by those in power to divide those who are feeling the pain of neoliberal capitalism's heartless and avaricious greed. It's a testimony to who controls the conversation around corporate taxation when merely demanding that they pay taxes at a rate comparable to the rate individuals pay is considered a radical proposal. It is also a testimony to the need to change that dynamic. Worker protests like that in Wisconsin are a good beginning.

The Great "Budget Repair" Swindle

Deficit Reduction and the War on the Working Class
By ANTHONY DiMAGGIO

It’s certainly clichéd to claim that “those who cannot remember the past are doomed to repeat it.” This dictum, however, remains as relevant today as ever, particular with regard to the state budget “crises.” Conservative claims that tax cuts for the rich are the only way of ensuring economic recovery have been tested in the past; this policy approach has failed miserably. Sadly, in the United States of Amnesia, few are aware of their own country’s basic political-economic history. Furthermore, few possess the policy expertise or knowledge needed to challenge the specifics undergirding the bi-partisan attack on state unions – undertaken in the name of promoting “balanced budgets.”

On the one hand, the public (and protestors I’ve spoken with in Madison, Wisconsin) deserve credit for rejecting claims that the “repair” of state budgets can only be achieved by eviscerating unions, public pensions, and basic health care services. On the other hand, few throughout the country seem to be aware of the specific problems with the policy arguments made by Wisconsin Governor Scott Walker (and other political leaders) with regard to the economic crisis.

Most Americans seem to share a vague distrust of conservative public policies (and of the political system more generally), understanding that they, as members of the working class, serve to lose in the latest neoliberal policy wave that targets any programs serving the poor and middle class. A more thorough exploration of the absurdities of conservative propaganda, however, is clearly in order. I’m thinking most specifically of the claims that collective bargaining is bankrupting the states, and promises that tax cuts (targeted at business elites and the rich) are the only effective or acceptable means of promoting economic recovery. Neither claim is even remotely grounded in available empirical evidence.

During my multiple visits to Madison and my participation in the protests against Governor Walker (during the week of February 21st to 26th), I routinely engaged with protestors who rejected claims that the elimination of collective bargaining is necessary in order to reduce growing state deficits. Few I spoke with expressed any sort of thorough or all encompassing understanding of the exact causes of the economic crisis. They were, however, intimately familiar with the political context surrounding Governor Walker’s war on unions and public services, and I was thoroughly impressed with how well they understood the unfairness of conservative demands that they pay the price for an economic crisis that they did nothing to create. I was also impressed with their ability to recognize a manufactured crisis. These protesters were angry at Walker (among other reasons) because of his false sincerity with regard to “balancing budgets.” After all, why cut taxes for businesses by more than $100 million dollars in the middle of a budget crisis? Why contribute significantly to the size of the deficit if one is truly interested in cutting it?

What seemed to make most protestors so angry was their clear understanding that the question of short term concessions (with regard to health care and pension costs) could be separated from the larger issue of collective bargaining rights. They were outraged that Governor Walker was stubbornly refusing to do separate the issues, primarily due to his longstanding ideological commitment to dismantling public sector unions. Walker has a lot of contempt for the people of Wisconsin. He’s shown that contempt with his assumption that state workers can be fooled into thinking that collective bargaining is the cause of the contemporary economic crisis and growing budget deficits.

There is little merit to the claim that Americans can no longer “afford” basic union protections due to growing budget deficits. With regard to union rights, a close examination shows that there is no relationship between the presence or absence of collective bargaining and growing state deficits. Analyzing data from the Center on Budget and Policy Priorities, one sees that those states without collective bargaining (Virginia, Georgia, North Carolina, South Carolina, and Texas) actually have higher deficits than states with collective bargaining. These five states’ projected deficits for fiscal year 2011 averaged 19 percent of their budget, compared to states with collective bargaining, whose deficits averaged just 14 percent of their budget. If Governor Walker is right that Wisconsin (and other states) can no longer “afford” collective bargaining, one would expect to see the exact opposite of these findings. That states outlawing collective bargaining are actually in worse fiscal shape speaks poorly of Governor Walker’s claims.

Then, of course, there is the issue of the tax cuts for the rich, so widely celebrated by Republicans (and a growing number of Democrats) as the only means for promoting economic growth and widespread prosperity. These claims are entirely lacking in empirical validity. Previous data collected by the Economic Policy Institute (EPI) clearly demonstrate that tax cuts for the rich are a poor means of promoting economic growth. Closely examining previous economic cycles (characterized by periods of recession and then by economic recovery/growth), EPI finds that the 2001 Bush tax cuts (passed during the 2001 recession) were followed by a weak economic recovery, in fact the weakest recovery, when compared to the recoveries seen in the previous four economic cycles. EPI concludes that “by virtually every measure, the economy (following the 2001 recession and tax cuts) has performed worse in this business cycle than was typical of past ones.” EPI does not stand alone in this conclusion. A recent study from the Center on Budget and Policy Priorities finds that tax cuts (as directed at the rich) are actually the least effective means of economic stimulus, when compared to other means of stimulus such as the extension of unemployment benefits, cuts in payroll taxes (aimed at the working class), and national fiscal assistance to states (as seen in Obama’s 2009 stimulus). These alternative options are actually far more effective in promoting economic growth because they focus on a far larger segment of the American public – a segment that is much more likely to immediately pump any money it gets into the economy in order to provide their own basic needs. Tax cuts for the rich, in contrast, may be a boon for corporate elites, but they do little to promote widespread economic growth and prosperity.

Conservatives hold it as a religion that tax cuts for the rich promote growth. As the theory goes, such cuts allow businesses the extra reserves they need to invest in hiring additional workers, therefore increasing employment, and stimulating aggregate consumer demand, economic growth, and personal incomes. None of these claims withstand basic empirical testing. Data from the Center on Budget and Policy Priorities (CBPP) spanning back to the mid-1990s through the post-2000 period demonstrate the utter bankruptcy of conservative claims. This data documents the changing national and state economic conditions as the country emerged from recession during the early 1990s, and as a number of states decided to pursue large tax cuts in the name of “promoting economic growth.”

The data from the CBPP is illuminating. It shows that the sixteen states that pursued large tax cuts actually suffered the highest growth in unemployment, experienced the weakest growth in personal incomes, witnessed the greatest declines in spending on public services, and saw the largest growth in their deficits. The “top sixteen” tax cutting states saw an average growth in unemployment of 1.4 percent, compared to the other 34 states, which saw a growth in unemployment of just one percent. The top sixteen saw a growth in personal incomes of 4.4 percent, compared to the 5.8 percent growth in the other 34 states. In the case of public services, the top sixteen saw services decline by an average 2.5 percent, compared to the other 34 states, which saw a decline in services of just 1.1 percent. With regard to state deficits, the top sixteen saw their deficits increase by an average 14.9 percent, compared to the other 34 states, whose deficits grew by just 8.9 percent. This last finding is hardly surprising, considering that large and tax cuts remove vital funding needed to sustain state spending and budgets.

There’s little room for interpretation in the above figures. Those states pursuing a conservative policy of tax cuts see their economic situations and indebtedness become qualitatively worse. There’s little reason to think that the same won’t happen again if state governors follow Wisconsin’s path, cutting taxes for the rich, while gutting basic welfare services and worker protections for most Americans.

State and national attacks on social services will also harm working class Americans. Goldman Sachs caused quite a bit of anger among Republicans when it called them out for seeking to cut spending on social services. Goldman’s recent public policy report warns against the $61 billion in proposed Republican cuts in the national budget – those seeking to force cuts in the areas of education spending, nutritional programs, housing and heating subsidies for the poor, and environmental protection. Goldman predicted that the cuts would reduce growth by as much as two percentage points through the end of the year, cutting in half annual growth projections. As Moody Analytics reports, the cuts would reduce prospects for growth by eliminating an estimated 700,000 jobs, thereby reducing aggregate consumer demand and spending. Such cuts will inevitably exact a powerful toll on a public that has been left reeling due to massive declines in personal worth and savings, in addition to suffering under growing unemployment, stagnating wages, falling home prices, skyrocketing consumer debt, and lingering economic instability.

The data above paint a stark picture. The Republican state and national political agenda, if successful, will greatly harm the American people. Tax cuts for the rich (as passed by Obama and Congressional Republicans) will not ensure sufficient economic growth, although they will greatly benefit the wealthy. The pay freeze for federal workers recently declared by Obama functions like a tax increase on the American people (after taking into account the declining value of federal workers’ pay due to inflation). At a time when the Obama administration is hypocritically cutting taxes for the rich, the pay freeze looks like a classic example of class war. Attacks on public service workers will greatly reduce Americans’ standard of living, while doing nothing to “balance budgets” and “reduce deficits” at a time when Republicans are pushing massive, budget-busting tax cuts for the rich. Deep cuts in national spending will depress economic growth, while reducing personal income and eviscerating basic public services. It is difficult to see how these changes will in any way benefit the working class.

The assault on public unions, social welfare services and environmental protections, and the obsession with tax cuts for the rich are all part of a larger neoliberal class war, declared by both parties against the American people. The sooner we master the specifics of these reactionary policies, the better position we will be in not only combating them, but in demanding better policies that ensure prosperity for the American worker.

Most Americans know that their political officials are not working in favor of the common good. We need to move beyond such a vague distrust, however, and begin to grasp the specific policy problems that confront us. The protests in Wisconsin are a major step in the right direction, as those who are demonstrating against Walker have developed an impressive knowledge of the policy details at hand. Their success shows that the rest of the American public can, and must become better educated if they are to work toward democratic, progressive change.

The Spending Cut Fallacy

(...sigh...--jef)

Why Slashing the Budget Won't Help 25 Million Americans Looking for Work
By DEAN BAKER

The politicians in Washington and the media have been busy setting the scene for a great battle over the 2011 budget. The newly empowered congressional Republicans are demanding large cuts to get spending under control. President Obama and the Democrats in the Senate promise to defend important public programs. This heated political contest is taking place against a backdrop of a possible government shutdown, just like two soldiers crossing swords in a burning building.

Yes, this is exciting theater. Meanwhile, no one is paying attention to the fact that 25 million people are unemployed, underemployed or have given up looking for work altogether. The reason for so much unemployment is not a secret; we don't have enough demand in the economy. The housing bubble had been driving the economy until it collapsed beginning in 2007. When the bubble burst, the millions of jobs created by the bubble-driven construction boom disappeared. The plunge in house prices also brought an end to the consumption boom, which had been driven by housing wealth. Together, the drop in construction and consumption led to a falloff in annual demand of more than $1.2 trillion, almost 10% of the economy.

The private sector will not replace this demand any time soon. And that means we need additional government spending to generate jobs, or we are left with very high rates of unemployment. Note that this fact has nothing to do with whether we like the government or like the private sector more. Private businesses are not going to start expanding and hiring people because we cut government spending. Just go ask your nearest storeowner how many more people she will hire if the government cuts its spending.

Businesses will expand and hire people when they see that there is more demand for their products. The federal government is the only force with the ability to create enough demand to get the economy back on its feet right now. The stimulus package Congress enacted was a step in the right direction, but it was nowhere near large enough. When you cut through the hype, the size of the annual stimulus in 2009 and 2010 was about $300 billion a year. Roughly half of this was offset by cutbacks at the state and local level. Translation: We were trying to fill a $1.2 trillion hole with a net stimulus from the government sector of $150 billion. While research shows the stimulus was actually more effective than predicted, we need much more to get the unemployment rate down to normal levels. Unfortunately, the politicians in Washington are too scared to say the simple truth: We need more spending to get the economy back on its feet, not less.

This is why the public has already lost the budget debate. The elites who dominate the national political agenda have entirely written jobs out of the picture. They have created a bogeyman in the form of the national debt and told everyone that we have to worry about. Now we have both President Obama and Republican leadership telling us how concerned they are to control the debt and trying to score points with the media in the process. The public can only lose in this picture.

On the one side we may end up with status quo budgets, which will give us unemployment rates above 6 percent for the next five years, according to both Obama and the Congressional Budget Office. Or we get a Republican budget with large cuts that will slow growth further and lead to even higher rates of unemployment. In addition, this will reduce spending in areas like cancer research and make it harder for kids to go to college. This all could be entertaining if there weren't tens of millions of people having their lives ruined because the breadwinner(s) in the families can't find a job or can't work enough hours to pay the bills.

The only way the public wins in this sort of budget standoff is if we force both parties to stop playing games and start taking measures to boost the economy and create jobs.

Wall Street Trash

More Trouble in Squanderville
By MIKE WHITNEY
Bob, Frank and Freddie all bought identical houses in the same neighborhood in 2004. Each man paid $300,000 for his home.

Bob paid the whole $300,000 in cash. Frank put down 10% (or $30,000) and took out a $270,000 mortgage. Freddie paid $0-down on a 100% mortgage.

In 2005, home prices rose by 10% which means that Bob made 10% (or $30,000) on his original investment. Frank made 100% on the $30,000 he put down. Freddie made the biggest windfall of all--he made $30,000 in "pure profit".

Question: Which one these three men is most likely to be the banker?

If you guessed "Freddie", you're right. Banks don't like committing capital because it limits profitability. This is why the big banks have fought so ferociously for deregulation, so they're not constrained in the amount of money they can make (via credit creation) with little capital. Of course, when the banking system is propped atop tiny specks of capital, it becomes more wobbly and crisis prone. And, if asset prices suddenly nosedive--as they did when the subprimes exploded--the whole shebang can come crashing down.

The real root of the financial crisis was leverage. The banks were massively over-leveraged (some of them 40 to 1) just like our friend Freddie. This is no longer a matter of dispute. In testimony he gave to the Financial Crisis Investigation Commission (FCIC), Ben Bernanke admitted that 12 of the country's 13 largest banks were underwater.

"If you look at the firms that came under pressure in that period... only one... was not at serious risk of failure," Bernanke told the commission.

So, the banks borrowed too much and were gravely under-capitalized. So when asset prices fell, they were wiped out and the financial system crashed. It was not "the perfect storm" as Wall Street cheerleaders like to say. It was the inevitable outcome of risky behavior. There's nothing unusual about a bank run, especially when the banks are capital-depleted and acting like lunatics.

The housing market would not have collapsed if everyone had acted like Bob. (and paid in cash) In fact, things probably would have been fine if people merely put 10%-down, like Frank. The problem is Freddie. 0-down loans are inherently unsafe because they give the borrower an option to "walk away" if the market tumbles. If housing prices drop 15%, for example, the best business decision for Freddie is to leave the keys on the kitchen counter and find a cheap place to rent. In other words, 0-down creates an incentive to default. And, that's exactly what's happened.

When banks act like Freddie (over-leveraged), the situation is even more dangerous, because a run on the banks can crash the financial system and lead to a Depression. When subprime blew up, institutional investors tried to dump their mortgage-backed securities (MBS) at the same time. Trading stopped as everyone ran for the exits. The secondary market froze and the global financial system suffered a massive heart. Nearly three years later, and the patient is still in ICU on a drip-feed of zero-rates and QE2-nitro. 

So, what did the banks learn from that near-death experience?

Nothing. In fact, they've rebuilt the same exact system that blew up less than 3 years ago. And, Ben Bernanke, Timothy Geithner and Barack Obama have helped them every step of the way. This is from Bloomberg:
"Bankers are fiercely resisting the suggestion that they use more equity (capital) and less debt in funding, even though this would reduce their dangerous degree of leverage...
Fixation with return on equity (ROE) also contributes to bankers' love of leverage because higher leverage mechanically increases ROE, whether or not true value is generated. This is because higher leverage increases the risk of equity, and thus its required return. Focus on ROE is also a reason bankers find hybrid securities, such as debt that converts to equity under some conditions, more attractive than equity....
...the structure of current capital requirements distorts banks' decisions. The structure, which is focused on the ratio of equity to so-called risk- weighted assets, might induce banks to choose investments in securities over lending, because securities with high credit ratings require less capital and thus allow more debt funding...
The proposed solutions that regulators in the U.S. are focused on, such as resolution mechanisms, bail-ins, contingent capital and living wills, are based on false hopes. They can't be relied on to prevent a crisis. Increasing equity funding is simpler and better than these pie-in-the-sky ideas." ("-Fed Runs Scared With Boost to Bank Dividends", Bloomberg)
What does this mean? It means that there are strong incentives for the banks to maximize borrowing and put the system at greater risk. It means that banks can't be as profitable by issuing loans to small businesses and homeowners. It means they would rather dabble in all manner of complex paper assets (so they can skim off huge salaries and bonuses) then provide money for productive activity that that creates jobs and revitalizes the country. It means that the financial system in its present configuration is just as dodgy and unstable as before. It means that we are headed for another meltdown.

Wall Street has a word for all of this. It's called "regulatory arbitrage", a fancy expression that means avoiding the rules and doing whatever-the-hell you want. This explains the widespread use of off-balance sheet operations, SIVs (structured investment vehicles), securitization, exotic derivatives contracts, and all of the other opaque debt-instruments that fall under the cheery rubric of "innovation."

All of these so-called innovations have one goal in mind, to maximize leverage so that profits can be derived from infinitesimal specks capital. The problem is, that when financial institutions are highly-geared (leveraged), it only takes the smallest downturn in the market to wipe them out. (Bloomberg: "If 95 percent of a bank's assets are funded with debt, even a 3 percent decline in the asset value raises concerns about solvency and can lead to disruption".)

And, guess what? The banks are still up to their old tricks. Take this for example (from the New York Times):
"When the mortgage securitization market collapsed amid a flood of defaults and foreclosures — many of them on loans that should not have been made — the cry arose for lenders to have "skin in the game." To properly align incentives, the argument went, those who make loans must suffer if the loan goes bad.
That principle was enacted by Congress last year in the Dodd-Frank law, but the mortgage industry managed to persuade legislators to insert an ill-defined loophole that would allow at least some mortgage loans — and perhaps nearly all of them — to escape the requirement that banks retain at least 5 percent of the risk....
Much of the banking industry has been pushing for an expansive definition that would leave few, if any, conventional loans subject to the skin-in-the-game requirement. To hear them tell it, there is virtually no way that any bank would make a mortgage loan at a reasonable rate if it had to share in any losses."
("Looks Like Banks Lose on Risk Plea", Floyd Norris, New York Times)
Got that? The banks still do not want to put one stinking dime behind the garbage paper they are creating. They are still fighting to securitize loans with no skin-in-the-game. See? They're all Freddies. 

After the trillions in bail outs, one would think that the banks would be grateful. But, no. In fact, if the capital requirements are implemented, many of the banks may just pack up and leave. Here's the story in the Wall Street Journal:
"Some foreign banks are moving to restructure their U.S. operations to avoid one of the most-burdensome requirements of the new Dodd-Frank law.
In November, Barclays PLC quietly changed the legal classification of the U.K. bank's main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.
The maneuver allows them to escape a provision of the financial-overhaul law that forces the pumping of billions of dollars of new capital into the U.S. entities, known as bank-holding companies.
"It's just not worth it to have all that capital trapped" in the holding company, said a New York lawyer who is advising banks on how to restructure....
Policy makers are demanding banks hold more capital and cash to help prevent a repeat of the financial crisis. But bank executives are worried that all the changes will crimp profits without making the financial system safer." ("Banks Find Loophole on Capital Rule", Wall Street Journal)
"Ingratitude, the marble-hearted beast!". Shakespeare must have known a few bankers in his day, too. 

And, here's the corker; the banks are still broke. Aside from the fact that housing prices are falling sharply (increasing the banks loan losses) and that there will another 2 million foreclosures in 2011, the real condition of the banks books are still hidden from public view. Here's a glimpse from the WSJ's Michael Rapoport,:
"During the financial crisis, investors fretted over "toxic," hard-to-value assets that banks were carrying. Those fears have faded as bank profits have rebounded, loan delinquencies have declined, and bank stocks have soared 25% in the past five months.
But banks still hold plenty of the bad assets that once spooked investors: mortgage-backed securities, collateralized debt obligations and other risky instruments. Their potential impact concerns some accounting and banking observers.
In part due to those bad assets, the top 10 U.S.-owned banks had $13.8 billion in "unrealized losses" that have lasted at least a year in their investment portfolios as of Sept. 30, according to a Wall Street Journal analysis. Such losses are baked into banks' book value, but don't get counted against earnings as long as the banks believe the investments will later rebound. If those losses were assessed against earnings, it would have reduced the banks' pretax income for the first nine months of 2010 by 21%, according to the Journal analysis.
Unrealized losses are just one way in which the troubled assets obscure banks' true financial condition, accounting experts say....Another problem: Even when banks do take real charges because of their securities losses, accounting rules allow them to keep some of those charges from hurting their bottom line.
Making the picture even murkier, the value of many risky assets are based solely on the banks' own estimates—leaving valuations uncertain and, some critics say, overstated....
One problem centers largely on "Level 3" securities, illiquid investments that can't be easily valued using market prices. According to the Journal analysis, as of Sept. 30, the top 10 banks had $360.7 billion in "Level 3" securities. That amounts to 42.6% of the banks' shareholder equity, a pile of assets whose value is hard to verify." ("Toxic' Assets Still Lurking at Banks", Michael Rapoport, Wall Street Journal)
"$360.7 billion" in garbage assets and financial stocks are still in the stratosphere?!? No wonder Bernie Madoff called the whole thing a "Ponzi scheme". 

No one knows the true condition of the banks books because the accounting fraud is so thick that's it's impossible to see through it. Here's the scoop from the WSJ on how the Financial Accounting Standards Board (FASB) caved in to Wall Street and gave them the go-ahead to lie as much as they want:
"The banks got what they wanted. Accounting rule makers on Tuesday dropped a plan to require banks to value loans using market prices.
That means investors will remain reliant on banks' own views of the worth of their assets. Those judgments proved seriously flawed during the financial crisis and left many with insufficient capital. Taxpayers, who as a result were called upon to bail out numerous institutions, also are left more vulnerable.
The Financial Accounting Standards Board's original proposal, put forward last spring, had called for banks to reflect market values in the total worth of their assets, which would affect their equity....Banks generally oppose the use of market prices because, they say, it makes their results more volatile. Their intense lobbying efforts against the proposal likely got a leg up after FASB Chairman Robert Herz, who had supported the plan, unexpectedly departed in August. FASB cited strong opposition it received in public comments in changing course.
Its decision means banks largely will continue to value loans as they do today, basing values on their original cost less a reserve to reflect the possibility of loss. FASB has yet to decide if the market value for loans will be disclosed on the balance sheet or buried in the footnotes, as they are now." ("Banks get the green-light to cook the books", Wall Street Journal)
So, imagine that you, dear reader, took out a loan at the bank by posting your $2.5 million dollar home in Beverly Hills and your custom Maserati for collateral. Now imagine that the banker decided to check up on your claim and found that you actually rode a rusty Schwinn bike to your job of collecting cans by the side of the freeway and lived in a cardboard lean-to next to the sewage-treatment plant. How long do you think it would take before the bank recalled your loan? Of course, if you were a banker and had an army of lobbyists working for you, you could lie to your heart's content and no one would be the wiser. But the truth remains: the banks are broke. The rest is smoke and mirrors.

One last thing: Along with the accounting shenanigans, the toxic assets, the non performing loans and the gigantic leverage, the banks are also hiding millions of REOs "off market" to keep housing prices from plunging even further. This "shadow inventory" will continue to be a drain on bank resources while keeping house prices "bouncing along the bottom" for years to come. Here's a clip from an article by Mark Whitehouse:
"Banks' vast pile of foreclosed homes doesn't appear to be diminishing. That's a troubling sign for the future of the housing market.
Back in April, this column tallied up all the foreclosed homes sitting in banks' inventory, as well as the "shadow" inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all.
Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.
The numbers aren't exactly comparable to the April analysis, as the providers of data have changed. The inventory data now come from RealtyTrac, the shadow inventory data from LPS Applied Analytics, and the sales data from Core Logic. But no matter how you slice it, the housing market faces almost nine years of foreclosure hangover.....
The mountain of foreclosed homes casts a long shadow." ("Number of the Week: 107 Months to Clear Banks' Housing Backlog", Mark Whitehouse, Wall Street Journal)
The dismal plight of the housing market hasn't changed much since Whitehouse wrote this article a couple months ago. The bleeding continues and prices are falling fast. If Obama doesn't come up with a remedy soon, the banks will be back on the front steps of the US Treasury with their begging bowls in hand. You can bet on it.

Botton line: The people who caused the financial crisis have reassembled the same system piece by piece paving the way for another massive meltdown.

Lies and Truth in Wisconsin - The Future (3 articles)

Fact-Checking Gov. Walker
By WALTER M. BRASCH

Historian Thomas Carlyle said "a lie cannot live." However, Mark Twain casually remarked, "It shows that he did not know how to tell them."

More than a century later, newly-elected Gov. Scott Walker and the Republican-dominated Wisconsin legislature have proven themselves to be "quick studies," having learned how to tell whoppers about the working class and unions. Here are just a few.

LIE: The public workers' pensions are what caused much of the financial crisis not just in Wisconsin but throughout the country. Gov. Walker has repeatedly said, "We're broke . . . We don't have any money."

FACTS: Wisconsin had a $120 million surplus whenWalker came into office in January. Had the newly-elected Republican-dominated Legislature in January not given about $140 million in special tax breaks (also known as "corporate welfare") to business, the state could have had a surplus, according to the Legislative Fiscal Bureau. About two-thirds of all Wisconsin corporations pay no taxes at all, according to the Wisconsin Department of Revenue.

Wisconsin could also save significant expenses by having state-employed fiscal analysts, not Wall Street investment counselors, handle the entire pension investment portfolio. Wisconsin pays about $28 million to state managers to handle about half the portfolio; it pays about $195 million to Wall Street investment brokers to handle the other half, according to the 2010 annual report of the Wisconsin Investment Board.

Noam Chomsky, in an interview with Amy Goodman of "Democracy Now," correctly points out, "the population in the United States is angry, frustrated, full of fear and irrational hatreds. And the folks not far from you on Wall Street are just doing fine. They're the ones who created the current crisis." The Great Recession has also cost states revenue, not because of the workers' salaries and pensions but because the values went down because of lax oversight primarily during a Republican administration. Even with the Wall Street crisis, and lower-than-expected revenue, the Wisconsin pension fund is fully funded, able to meet its obligation for several years, according to the independent PEW Center for the States.

Columnist Robert Greenwald says the "shortfall" would be wiped out if Wisconsin brought home only 151 troops from the war in Afghanistan. If the U.S. left Afghanistan completely, the state would save $1.7 billion, according to Greenwald's analysis.

LIE: The reason the Republicans throughout the country want to end collective bargaining by the public service unions bargaining is to bring fiscal responsibility to the states.

TRUTH: In January 2010, the Supreme Court by a 5–4 decision along party lines declared that corporations enjoy the protection of the First Amendment. This meant that companies could increase funding and advertising for candidates. As expected, the Chamber of Commerce and corporate America gave vast amounts of money to Republican and conservative candidates; labor donated to liberal and Democratic candidates, who traditionally support the working class. In the 2010 mid-term election, seven of the top 10 donors contributed to conservative and Republican candidates. The other three in the Top 10 were labor political action committees. Eliminating collective bargaining for public sector workers would destroy the union movement and significantly reduce the influence of labor in campaigns. Walker has already shown his colors and intent when he was caught in a radio prank. On Feb. 23, Ian Murphy, editor of The Buffalo Beast, pretended to be billionaire David Koch, a supporter of far-right causes, and a major contributor to Walker's gubernatorial campaign. Punked by the 20-minute call, Walker seemed to be little more than a sycophant for Big Business. The Republicans' reaction? Instead of worrying about possible ethics violations by the governor, the Republicans planted a bill into the legislature to criminalize prank phone calls

LIE: The unions are greedy and won't budge.

FACTS: The 267,000 Wisconsin public sector workers, as well as all elected officials, Democrat and Republican, do pay very little to their pensions. However, the unions have already said they'd be willing to pay a higher contribution, essentially taking an 8 percent pay cut, and negotiate fairly other parts of the contracts. Gov. Walker not only refused to budge on his autocratic stand, he refused to take calls from elected Democrats and bluntly told the Milwaukee Journal, "I don't have anything to negotiate."

LIE: Gov. Walker's proposal affects every union in Wisconsin.

TRUTH: He exempted firefighters and police from his draconian assault upon unions, possibly because he was attempting to get support from the first responders, while mining sympathy from the public. What he didn't count on was that the firefighters and police unions are firm in their opposition to the abolishment of collective bargaining.

LIE: Gov. Walker says he's just helping the worker when he argues for elimination of the "dues check-off," saying the workers would have more disposable income.

TRUTH: Eliminating dues check-off would cripple unions, which would have to rely solely upon voluntary contributions.

MYTH: Gov. Walker enjoys wide-spread support for his stand against the unions.

TRUTH: Walker has been governor less than two months. If the election were repeated, he'd receive only about 45 percent of the vote, according to the independent Public Policy Polling (PPP) of Raleigh, N.C. More important, while only 3 percent of Republicans voted for Tom Barratt, the Democratic candidate in the November election, 10 percent of the Republicans say they'd vote for him in a new election, according to PPP. The Republican governors of Florida, Michigan, Pennsylvania, and Indiana have said they will not follow Walker's lead, and will support the rights of public workers to bargain collectively. The massive protests in Wisconsin—more than 100,000 in Madison on the same day—and throughout the nation give evidence that Walker doesn't have the popularity he and his supporters believe. A New York Times/CBS poll, released March 1, indicates only about one-third of the nation supports the campaign against public sector collective bargaining. A week earlier, an independent USA Today/Gallup poll had almost the same results.

LIE: The protestors are unruly, and should be arrested for violating the law.

TRUTH: The First Amendment gives people the right to assemble peacefully. There have been no arrests because there have been no crimes committed by the protestors. Further, when the governor and the Legislature demanded that protestors be thrown out of the state capitol, and not allowed to stay overnight, the chief of the Capitol Police refused to do so, believing the order was a violation of Constitutional rights. In contrast, Walker had actually considered, then rejected, the idea of planting troublemakers among the protestors—a "dirty trick" that dates back to the '60s.

LIE: Public sector union workers are overpaid.


TRUTH: A USA Today analysis, published March 1, shows that, on average, public service workers, with wages and benefits included, are paid about $2,500 more per year than those in the private sector. In Wisconsin, the difference is only about $1,800. However, government workers usually are "older and substantially better educated than private sector workers," according to researchers Robert Pollin and Jeffrey Thompson, professors of economics at the University of Massachusetts. But, again contrary to the lies spewed by the anti-worker Rabid Right, individual union workers, when compared to the same criteria as private sector workers, actually earn 4 percent less income, according to the Center for Economic Policy Research. In Wisconsin, public sector union workers actually earn 4.8 percent less total compensation, according to research published in February by the Economic Policy Institute. One statistic stands out. "The average member of AFSCME, our largest public-sector union, earns less than $45,000 a year," says author/journalist Bill Press, "and retires after a career in public service with a whopping pension of $19,000 per year."

LIE: Public service union workers are lazier than non-unionized private sector workers.


TRUTH: Strong labor unions generally have higher productivity, according to independent research done by Harley Shalen of the University of California, because there is less turnover, better worker communication, better work conditions, and a better-educated workforce."

+++++

The Battle Lines in Wisconsin
Should Public Workers Make Concessions? 
By SHAMUS COOKE

As workers all over the U.S. become inspired by the massive demonstrations in Wisconsin, a dangerous idea is being voiced by some working-class allies that could unravel it all. The threat lies in the following argument: to protect the bargaining rights of unions, state and city workers must be prepared to make concessions over wages, benefits, etc. This line of reasoning is not only false to the core, it's suicidal. 

Take for example a recent New York Times article on the battle in Wisconsin:
"It is not yet clear whether Gov. Scott Walker of Wisconsin will succeed in his quest to strip public employee unions of most of their bargaining rights. But by simply pressing the issue, he has already won major concessions that would have been unthinkable just a month ago."
This is extraordinary: The Governor makes a radically anti-union threat, and some union leaders are ready to give him EVERYTHING, just not the kitchen sink. 

The article continues:
"Some of Wisconsin's major public sector unions, faced with what they see as a threat to their existence, have decided to accept concessions that they had been vigorously fighting...translating into a pay cut of around 7 percent...But Mr. Walker is not settling for that. He said that those concessions were "an interesting development, because a week ago they said that's not acceptable." (February 28, 2011).
So the anti-union Governor is making the unacceptable acceptable, merely by voicing a threat. If this precedent were established, what future do unions have? Especially when one considers that state budget deficits are projected to continue for years. 

Imagine the following scenario: A war is declared by a foreign army and the defending General responds by announcing to the invaders, "I will only fight one battle to preserve this particular parcel of land (bargaining rights), and will wave the white flag over all other territory (wages, benefits, etc.). 

Of course the foreign army would conclude "the enemy is already defeated!" And fight without mercy for total victory. 

This is the situation in Wisconsin and other states. War has been declared on unions and some labor leaders are pretending that they can offer concessions to appease their attackers. Unfortunately, this strategy has failed for years, and is in fact why the right wing felt confident enough to officially declare war. 

Every time unions agree to lower wages and benefits -- as they have been doing for years -- they weaken themselves internally, thus opening the way for further, deeper attacks. The right-wing attack on bargaining rights did not appear from nowhere; it was the result of years of concessionary bargaining, which inevitably leads to worker demoralization within the union. An army which concedes every battle will be composed of demoralized soldiers. 

The union policy of concessionary bargaining is the policy of committing slow suicide, and after years of providing their executioners with nooses, some labor leaders act stunned when their hanging is announced. They believed that they could befriend the hangman, as long as they didn't create too much trouble by aggressive protesting or well-planned strikes.
But hangmen are hangmen, and they must be treated accordingly. 

Labor unions must mobilize the entire community in every state to demand "No Concessions" for all public workers. The fight to save collective bargaining can only be won if workers believe that collective bargaining will save their wages and benefits; the two cannot be separated.
Contrary to what the mainstream media and politicians constantly tells us, the general public would support such a fight. A recent CBS News/New York Times poll found that "Those surveyed said they opposed, 56 percent to 37 percent, cutting the pay or benefits of public employees to reduce deficits." (March 1, 2011). 

The battle in Wisconsin proves that private-sector workers do not hate their public-sector brothers and sisters, they passionately support them. 

How can labor unions mobilize the general public towards a pro-worker solution to the state budget deficits? By exposing another media lie: that Americans are against ALL tax increases. In fact, the same pollsters discovered in 2009 that 74 percent of respondents "support higher taxes on the rich." (April 6, 2009). 

Labor unions must place this demand at the head of their campaign to save collective bargaining rights and workers wages and benefits. Workers will be further encouraged to fight for their wages and benefits when they see that there is a solution to the budget crisis.
Rose Ann DeMoro of National Nurses United agrees:
"So it's time for all of us to say it loud: No More Cuts in Public Sector Pay, Pensions, or Health Benefits; Balance Budgets By Closing Corporate Tax Loopholes, Restoring Fair Share Taxes on Corporations and Wealthy Individuals; Guarantee Retirement Security and Healthcare for All."
++++++++++

Madison is a Foretaste of Things to Come

By DAVE LINDORFF

The dramatic occupation of the Wisconsin State House in Madison by angry public workers and their supporters over the past few weeks is an exciting preview of what we can expect to see in the halls of Congress before long, as right-wing forces, funded by corporate lobbies and corporate-funded think-tanks push hard for cutbacks in Social Security and Medicare.

The drive to undermine these two critically important social programs is moving into high gear as the 79-million Baby Boomers this year start to reach eligibility, even as their other assets--their homes and their investment portfolios--are still shriveled by the Wall Street heist known as the "fiscal crisis" and Great Recession.

For years, the right has been gravely warning of the supposedly looming "bankruptcy" of Social Security and the even more imminent "bankruptcy" of Medicare, as though these twin disasters for the elderly were an actuarial imperative. In fact, both programs are political creations, whose problems have political causes and political solutions.

Social Security is starting to draw down the huge reserves it had built up, because the share of national income that is subject to the tax has fallen, from 90% back in the 1980s, to just 84% now as the wealthy have taken an increasingly large share of the total national income. If more of the income of the rich were slapped with the FICA tax, to bring the total share of income taxed back to 90%, there would be plenty of money to pay promised benefits into the foreseeable future. The same can be said of Medicare. More taxes on the rich would ensure the funding of that program too.

There is no inherent reason why only the first $106,000 of a person's income should be subject to the FICA tax. It could be the first $200,000, or the first $500,000, and if it were the latter, we could be talking about improving benefits for retirees, not just preserving current levels. Benefits could be better still if investment income were no longer exempted from a FICA tax (and Medicare tax).

But here's the big point: Corporate America, and its political lackeys in the Republican and Democratic Parties, know that they are about to confront a dramatically more powerful protagonist in their campaign to kill Social Security and Medicare: the Boomer Retirees.

The so-called Senior Lobby is already enormously powerful. That's why Social Security has so far largely defied concerted efforts by Presidents Ronald Reagan and George W. Bush to undermine it, and it's why Republicans and conservative Democrats running for national office always hasten to claim they are not going to threaten Social Security or Medicare, or at least that they won't threaten "current beneficiaries." It's why they call Social Security the "third rail" of American politics: touch it and you die (for those of you unfortunate enough to live where there are no subways, the third rail is the "hot" rail that carries the electricity to power the electric trains).

But a Boomer retiree population will be two times the size of the current retiree population. That means that just in terms of the number of potential voters, it will be two times as powerful. But that's only part of the story. The new generation of retirees are the people who came of political age in the late 1950s during the Civil Rights movement, and the 1960s and '70s during the anti-war movement and the feminist movement. We are veterans of both engaged electoral politics (witness that support our generation gave to the insurgent campaigns of Eugene McCarthy, Robert Kennedy and George McGovern, as well as a host of more successful Congressional campaigns), and of powerful and of successful militant street politics.

What we showed back then in our youth and our formative young-adult years was that when our interests were on the line, as they were with the draft, or when we saw a gross injustice, as was the case with Jim Crow, we knew how to fight politically. And both our personal interests and our sense of justice are on the line when it comes to Social Security and Medicare.

My prediction: As the number of Boomers nearing or entering retirement soars, and the number anticipating or signing up for Medicare soars over the next few years, we will see massive national campaigns grow around not just saving these programs but expanding and improving them. With traditional pensions vanishing, and with IRAs and 401(k) plans having been exposed as the shams they are, we are going to see an irresistable demand grow for Social Security benefits to be raised, particularly for poorer retirees, so that all Americans can have a secure old age. And we will see another irresistable political drive to have Medicare not just improved but broadened to cover all Americans, as we Boomers recognize that it makes no sense at all to have a program that only covers the oldest and sickest of Americans, and not the younger and healthier population (our own kids and grandkids!). We will realize that it is in our interest to have all Americans invested fully in supporting a well-funded national Medicare program.

And if we don't get it, we will be ready and willing to do what the public employees of Wisconsin are doing now.

Hold on to your seats (and your walkers)! The new Boomer retirees are coming!

(Regarding the "Boomers" aren't they the ones in charge and creating all this mess? The Koch bros are boomers. Bush cronies are Boomers or even older. Non-hippy boomers seem to loathe everyone who isn't made of money. They are dangerous to the US. --jef)

How TV Ruined Your Life

I posted about this show a while back. A friend turned me on to it, and we decided last night that  it has become our favorite show. Thank you England, and thank you Charlie Brooker!



Thursday, March 3, 2011

Ethos

Go, Woody! A less crazy way of presenting this particular case:

God's Angry Man -- Gene Scott

Sacrifices must be made!

Don't the schoolteachers and janitors understand that? 


How Koch Industries Makes Billions Corrupting Government

The Koch's Tea Party libertarianism is actually a thin veneer for the company's long-running history of manipulating the market to pad Koch profits.
By Lee Fang, Think Progress
Posted on March 2, 2011,

Koch Industries, the international conglomerate owned by Charles and David Koch, is not only the second largest private company in America, it is the most politically active. As ThinkProgress has carefully documented over the last three years, Koch groups have spent tens of millions to influence government policy — from financing the Tea Parties, to funding junk academic studies, to undisclosed attack ads against Democrats, to groups promoting climate change denial, to a large network of state-based and national think tanks. In an opinion column for the Wall Street Journal Tuesday, Koch Industries CEO Charles Koch fired back at his critics, who have grown more vocal as it has become clear that Koch groups are providing the political muscle for Gov. Scott Walker’s (R-WI) union-busting power grab.

In his piece, Charles portrays himself as simply an ideological advocate, and says his money to political groups is only meant to “enhance true economic freedom.” He chides special interests that have “successfully lobbied for special favors,” claiming “crony capitalism is much easier than competing in an open market.” But in reality, the focus of the Koch political machine is geared towards “crony capitalism” — corrupting government to make Charles and his brother David Koch richer. Koch’s Tea Party libertarianism is actually a thin veneer for the company’s long running history of winning special deals from the government and manipulating the market to pad Koch profits:
– The dirty secret of Koch Industries is its birth under the centrally planned Soviet Union. Fred Koch, the founder of the company and father of David and Charles, helped construct fifteen oil refineries for Joseph Stalin before expanding the business in the United States.

– As Yasha Levine has reported, Koch exploits a number of government programs for profit. For instance, Georgia Pacific, a timber company subsidiary of Koch Industries, uses taxpayer money provided by the U.S. Forestry Service to provide their loggers with taxpayer-funded roads and access to virgin growth forests. “Logging companies such as Georgia-Pacific strip lands bare, destroy vast acreages and pay only a small fee to the federal government in proportion to what they take from the public,” according to the Institute for Public Accuracy. Levine also notes that Koch’s cattle ranching company, Matador Cattle Company, uses a New Deal program to profit off federal land for free.

– Koch Industries won massive government contracts using their close relationship with the Bush administration. The Bush administration, in a deal even conservatives alleged was a quid pro quo because of Koch’s campaign donations, handed Koch Industries a lucrative contract to supply the nation’s Strategic Petroleum Reserve with 8 million barrels of crude oil. The SPR deal, done initially in 2002, was renewed in 2004 by Bush administration officials. During the occupation of Iraq, Koch won significant contracts to buy Iraqi crude oil.

– Although Koch campaigned vigorously against health reform — running attack ads, sponsoring anti-health reform Tea Parties, and comparing health reform to the Holocaust — Koch Industries applied for health reform subsidies made possible by the Obama administration.

– The Koch brothers have claimed that they oppose government intervention in the market, but Koch Industries lobbies aggressively for taxpayer handouts. In Alaska, blogger Andrew Halcro reported that a Koch subsidiary in Fairbanks asked Gov. Sarah Palin’s administration to use taxpayer money to bail out one of their failing refineries.

– SolveClimate recently reported that Koch Industries will reap huge profits from the proposed Keystone XL Pipeline, which runs from Koch-owned tar sands mining centers in Canada to Koch-owned refineries in Texas. To build the pipeline, politicians throughout the Midwest, many of whom have received large Koch campaign donations, have used eminent domain — government seizures of private land. In Kansas, where Koch-funded officials advise Gov. Sam Brownback (R-KS) and the Republican legislature, the Keystone XL Pipeline is likely to receive a property tax exemption of ten years, a special loophole that will cost Kansas taxpayers about $50 million.

– Koch Industries has been the recipient of about $85 million in federal government contracts mostly from the Department of Defense. Koch also benefits directly from billions in taxpayer subsidies for oil companies and ethanol production.

Charles has compared himself to a libertarian “Martin Luther,” evangelizing to the world for their supply side cause. However, the tens of millions in campaign donations and the dozens of front groups funded by Koch work in tandem to promoting the business interests of Koch Industries.

Koch funds both socially conservative groups and socially liberal groups. However, Koch’s financing of front groups and political organizations all have one thing in common: every single Koch group attacks workers’ rights, promotes deregulation, and argues for radical supply side economics. Not only do the Kochs' front groups pad Koch Industries’ bottom line, they supply the Koch brother’s talking points. In fact, for his opinion piece, Charles heavily relied on front groups he finances for statistics. The “freedom index” cited by Charles is a creation of the Koch-funded Heritage Foundation, and the erroneous “unfunded liabilities” claim was supplied by the Koch-funded National Center for Policy Analysis.

How the Rich Soaked the Rest of Us

The astonishing story of the last few decades is a massive redistribution of wealth, as the rich have shifted the tax burden

by Richard Wolff
 
Over the last half century, the richest Americans have shifted the burden of the federal individual income tax off themselves and onto everybody else. The three convenient and accurate Wikipedia graphs below show the details. The first graph compares the official tax rates paid by the top and bottom income earners. Note especially that from the end of the second world war into the early 1960s, the highest income earners paid a tax rate over 90% for many years. Today, the top earners pay a rate of only 35%. Note also how the gap between the rates paid by the richest and the poorest has narrowed. If we take into account the many loopholes the rich can and do use far more than the poor, the gap narrows even more.When the Cadillac Eldorado made its debut in the 1950s, wealthy Americans were paying a top rate of tax of 90%; today, the top rate of tax is 35%.

One conclusion is clear and obvious: the richest Americans have dramatically lowered their income tax burden since 1945, both absolutely and relative to the tax burdens of the middle income groups and the poor.

Consider two further points based on this graph: first, if the highest income earners today were required to pay the same rate that they paid for many years after 1945, the federal government would need far lower deficits to support the private economy through its current crisis; and second, those tax-the-rich years after 1945 experienced far lower unemployment and far faster economic growth than we have had for years.
Richard Wolff graph on tax rates
Historical tax rates for the highest and lowest income earners

The lower taxes the rich got for themselves are one reason why they have become so much richer over the last half century. Just as their tax rates started to come down from their 1960s heights, so their shares of the total national income began their rise. As the two other Wikipedia graphs below show, we have now returned to the extreme inequality of income that characterised the US a century ago.

The graph above shows the portion/percentage of total national income taken by the top 1%, the top tenth of a percent, and the top 100th of a percent of individuals and families: the richest of the rich. The third graph compares what happened to the after-tax household incomes of Americans from 1979 to 2005 (adjusted for inflation). The bottom fifth of poorest citizens saw their income barely rise at all. The middle fifth of income earners saw their after-tax household income rise by less than 25%. Meanwhile, the top 1 % of households saw their after-tax household incomes rise by 175%.

In simplest terms, the richest Americans have done by far the best over the last 30 years, they are more able to pay taxes today than they have been in many decades, and they are more able to pay than other Americans by a far wider margin. At a time of national economic crisis, especially, they can and should contribute far more in taxes.

Instead, a rather vicious cycle has been at work for years. Reduced taxes on the rich leave them with more money to influence politicians and politics. Their influence wins them further tax reductions, which gives them still more money to put to political use. When the loss of tax revenue from the rich worsens already strained government budgets, the rich press politicians to cut public services and government jobs and not even debate a return to the higher taxes the rich used to pay. So it goes – from Washington, to Wisconsin, to New York City.

Richard Wolff economics graph 2
Share of national income taken by top tranches of earners


How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs, etc. But do they? In fact, cutting rich people's taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People's Republic of China.

Third, the richest Americans take the money they don't pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans, and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

Richard Wolff economics graph 3
Relative increases in net household incomes of Americans from 1979 to 2005


The one kind of significant wealth average Americans own, if they own any, is their individual home. And home values remain deeply depressed: no recovery there.

Cutting the taxes on the rich in no way guarantees social benefits from what they may choose to do with their money. Indeed, their choices can worsen economic conditions for the mass of people. These days, that is exactly what they are doing.

The Phony Budget Crisis


Forget Austerity, Tax the Rich
 
Everywhere you look, from the federal government to the states to your hometown, budget crises abound. Services are being slashed. Politicians and pundits from both parties tell us that the good times are over, that we’ve got to start living within our means.
 
It’s a lie.

Two case studies have made news lately: California, where new/old governor Jerry Brown is trying to close a $25 billion shortfall with a combination of draconian cuts in public services and a series of regressive tax increases, and Wisconsin, where right-winger Scott Walker says getting rid of unions would eliminate the state’s $137 million deficit.

Never mind the economists, most of whom say an economic death spiral is exactly the worst possible time for government to cut spending. Pro-austerity propaganda has won the day with the American public. A new Rasmussen poll funds that 58 percent of likely voters would approve of a shutdown until Democrats and Republicans can agree on what spending to cut.

The budget “crisis” is a phony construction, the result of right-wing “starve the beast” ideology. There is plenty of money out there—but the pols don’t want it.

There is no need to lay off a single teacher, close a single library for an extra hour, or raise a single fee by one red cent.

Every government can not only balance its budget, but wind up with a surplus.

The solution is simple: tax the rich.

Over the last 50 years tax rates for the bottom 80 percent of wage earners have remained almost static. Meanwhile the rich have received tax cut after tax cut after tax cut. For example, the rate paid by the top 0.01 percent—people who currently get more than $6.5 million a year—fell by half (from 70 to 35 percent).

Times are tough. Someone has to pay. Why not start with those who can most afford it?
Europe has the world’s best food, its best healthcare system and its best vacation policy. It also has one of the fairest ways to generate revenue for government: a wealth tax. In Norway, for example, you pay one percent of your net worth in addition to income tax.

What if we imposed a Norwegian-style wealth tax on the top one percent of U.S.
households? We’re not talking upper middle class here: the poorest among them is worth a mere $8.3 million. This top one percent owns 35 percent of all wealth in the United States.
“Such a wealth tax…would raise $191.1 billion each year (one percent of $19.1 trillion), a significant attack on the deficit,” Leon Friedman writes in The Nation. “If we extended the tax to the top 5 percent, we could raise $338.5 billion a year (one percent of 62 percent of $54.6 trillion).”

But that’s just the beginning. Wealthy individuals are nothing next to America’s money-sucking corporations.

Business shills whine that America’s corporate tax rate—35 percent—is one of the world’s highest. But that’s pure theory. Our real corporate rate—the rate companies actually pay after taking advantages of loopholes and deductions—is among the world’s lowest.

According to The New York Times, Boeing paid a total tax rate of 4.5 percent over the last five years. (This includes federal, state, local and foreign taxes.) Yahoo paid seven percent. GE paid 14.3 percent. Southwest Airlines paid 6.3 percent. “GE is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm’s,” reports the Times‘ David Leonhardt. “One common strategy is maximizing the amount of profit that is officially earned in countries with low tax rates.”

America’s low effective corporate tax rates have left big business swimming in cash while the country goes bust. As of March 2010 non-financial corporations in the U.S. had $26.2 trillion in assets. Seven percent of that was in cash.

The national debt is $14.1 trillion.

Which is a lot. And, you see, entirely by choice.