Saturday, November 17, 2012
God May Have to Cause "A Complete Economic Collapse" to Save Nation From Obama~Franklin Graham
OK, Republicans...for the real reason you've lost two presidential elections in a row, look no further than this guy and those like him who say similar bullshit. Who votes for obvious insanity? We like our insanity safely suppressed so that when it forces its way out later, the damage will be more extensive. --jef
Some
conservatives are having a tough time with President Barack Obama's
reelection. Take social conservative leader Franklin Graham. In an interview with Newsmax.com,
the Rev. Graham, a prominent evangelist and son of top-dog evangelist
Billy Graham, maintained that Obama's victory will put the country
further along a "path of destruction." And he suggested it would take a
"complete economic collapse" to place the United States on a better
course and return it to godliness.
Graham equated the Obama years with a national rejection of God. "In the last four years, we have begun to turn our backs on God," he said. "We have taken God out of our education system. We have taken him out of government. You have lawyers that sue you every time you mention the name of Jesus Christ in any kind of a public forum." Oddly, Graham ignored the fact that he and other shepherds of the Christian right have griped about such matters for much longer than four years. It didn't start with Obama.
Graham equated the Obama years with a national rejection of God. "In the last four years, we have begun to turn our backs on God," he said. "We have taken God out of our education system. We have taken him out of government. You have lawyers that sue you every time you mention the name of Jesus Christ in any kind of a public forum." Oddly, Graham ignored the fact that he and other shepherds of the Christian right have griped about such matters for much longer than four years. It didn't start with Obama.
As Graham denounced the Obama years, Newsmax's Kathleen Walter asked, "So we've become too secular a nation? How do we bring God back into government?" Graham replied:
Graham has been no stranger to controversy. Earlier this year, he had to apologize after questioning Obama's faith and saying on MSNBC that the president "seems more concerned about [Muslims] than the Christians that are being murdered in the Muslim countries." He has often decried the entire religion of Islam, at one point calling it "a very evil and wicked religion." Two years ago, he was disinvited from the Pentagon's National Day of Prayer event when a fuss developed over his anti-Muslim comments.
In his Newsmax interview, Graham wasn't quite advocating that God wreak total economic havoc upon the United States. But he did come close. He also noted that his father "likes the president personally." The problem, Graham explained, is that "the radical left" has "taken over the White House."
Despite his harsh feelings concerning Obama's leadership, Graham said God commands him and Christians to "pray for those in authority." Consequently, he said, "I would encourage everyone to pray for the president…We need to bathe him prayer"—presumably, before the final (economic) days come.
Maybe God will have to bring our nation down to our knees—to where you just have a complete economic collapse. And maybe at that point, maybe people will again begin to call upon the name of almighty God.Economic calamity was the one option Graham mentioned—as if only such a disaster could move the United States in the right direction.
Graham has been no stranger to controversy. Earlier this year, he had to apologize after questioning Obama's faith and saying on MSNBC that the president "seems more concerned about [Muslims] than the Christians that are being murdered in the Muslim countries." He has often decried the entire religion of Islam, at one point calling it "a very evil and wicked religion." Two years ago, he was disinvited from the Pentagon's National Day of Prayer event when a fuss developed over his anti-Muslim comments.
In his Newsmax interview, Graham wasn't quite advocating that God wreak total economic havoc upon the United States. But he did come close. He also noted that his father "likes the president personally." The problem, Graham explained, is that "the radical left" has "taken over the White House."
Despite his harsh feelings concerning Obama's leadership, Graham said God commands him and Christians to "pray for those in authority." Consequently, he said, "I would encourage everyone to pray for the president…We need to bathe him prayer"—presumably, before the final (economic) days come.
Big Brother, Kill Lists, and Secrecy
What to Expect from Obama’s Second Term
Following Barack Obama’s significant electoral victory, the ways in which the President will interpret his new “mandate” are still very much up for debate. While pundits, many of whom got the election seriously wrong, fumble to come up with new predictions, an analysis of Obama’s track record and statements on national security policy can be quite illuminating. Two momentous stories of the past few weeks can help us evaluate current and future prospects for our Constitutional rights, a year after Osama bin Laden’s death and a decade after 9/11. One grim harbinger of what’s to continue: a nighttime drone strike in Yemen that killed three “al-Qaida militants” was carried out within 24 hours of Obama’s victory speech.
But even more important was the bombshell story that appeared in the Washington Post on October 23, revealing the existence of a new database within the National Counterterrorism Center (NCTC) that will list suspected terrorists and militants slated for extrajudicial assassination. The article details the creation of a “next-generation targeting list called the ‘disposition matrix’” which “contains the names of terrorism suspects arrayed against an accounting of the resources being marshaled” to kill them, including the ability to map “plans for the ‘disposition’ of suspects beyond the reach of American drones.”
Additionally, on October 29, the Supreme Court heard oral arguments in Amnesty v. Clapper, evaluating a lawsuit filed by journalists, human rights workers, and lawyers, who claimed that their jobs are unnecessarily hampered by the specter of the National Security Agency eavesdropping on their communications with clients overseas. As described by the Electronic Frontier Foundation (EFF), “the [Supreme] Court will essentially determine whether any court… can rule on whether the [National Security Agency]’s targeted warrantless surveillance of Americans’ international communications violates the Constitution.”
What do NSA’s warrantless wiretapping program and the Obama administration’s recently developed “disposition matrix” have to do with one another? Two points resound in particular. First, both are only able to function in an environment of total secrecy. Also, they represent significant advances in the codification of a new norm for U.S. national security policy—one very much at odds with the constitutionally limited Commander-in-Chief of common lore.
Perhaps even more ominously, the infrastructure development of the Obama administration’s policy of targeted killing signals a creeping move toward domestic application. As drone technology continues to be imported home, the convergence of the kill-list(s) within the NCTC bureaucracy—which houses huge repositories of both domestic and foreign intelligence with no probable cause of criminality—is a foreboding development in this saga of eroding checks and disappearing balance.
Climbing Out of the Abyss, Jumping Back In
Unknown to the American people and to much of their government until the late 1970’s, NSA has enjoyed free rein to intercept the electronic communications of Americans and foreigners since its secret inception in 1952. To those who were familiar with it, the uniform joke was that NSA stood for “No Such Agency,” an indication of its covert and prized status within the intelligence community.
After media revelations of intelligence abuses by the Nixon administration began to mount in the wake of Watergate, NSA became the subject of Congressional ire in the form of the United States Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities—commonly known as the “Church Committee” after its chair, Senator Frank Church (D-ID)—established on January 17, 1975. This ad-hoc investigative body found itself unearthing troves of classified records from the FBI, NSA, CIA and Pentagon that detailed the murky pursuits of each during the first decades of the Cold War. Under the mantle of defeating communism, internal documents confirmed the executive branch’s use of said agencies in some of the most fiendish acts of human imagination (including refined psychological torture techniques), particularly by the Central Intelligence Agency.
The Cold War mindset had incurably infected the nation’s security apparatus, establishing extralegal subversion efforts at home and brutish control abroad. It was revealed that the FBI undertook a war to destroy homegrown movements such as the Black Liberation Movement (including Martin Luther King, Jr.), and that NSA had indiscriminately intercepted the communications of Americans without warrant, even without the President’s knowledge. When confronted with such nefarious enterprises, Congress sought to rein in the excesses of the intelligence community, notably those directed at the American public.
The committee chair, Senator Frank Church, then issued this warning about NSA’s power:
The reforms that followed, as enshrined in the Foreign Intelligence Surveillance Act (FISA) of 1978, included the establishment of the Foreign Intelligence Surveillance Court (FISC): a specially-designated panel of judges who are allowed to review evidence before giving NSA a warrant to spy on Americans (only in the case of overseas communication). Hardly a contentious check or balance, FISC rejected zero warrant requests between its inception in 1979 and 2000, only asking that two warrants be “modified” out of an estimated 13,000.
In spite of FISC’s rubberstamping, following 9/11 the Bush administration began deliberately bypassing the court, because even its minimal evidentiary standard was too high a burden of proof for the blanket surveillance they wanted. So began the dragnet monitoring of the American public by tapping the country’s major electronic communication chokepoints in collusion with the nation’s largest telecommunications companies.
When confronted with the criminal conspiracy undertaken by the Bush administration and telecoms, Congress confirmed why it retains the lowest approval rating of any major American institution by “reforming” the statute to accommodate the massive law breaking. The 2008 FISA Amendments Act [FAA] entrenched the policy of mass eavesdropping and granted the telecoms retroactive immunity for their criminality, withdrawing even the negligible individual protections in effect since 1979. Despite initial opposition, then-presidential candidate Barack Obama voted for the act as one of his last deeds in the Senate. A few brave (and unsuccessful) lawsuits later, this policy remains the status quo.
Seemingly Impossible to Stand (Up For Your Rights)
The latest challenge to government snooping, Amnesty v. Clapper, isn’t even about Big Brother’s legality in the first place. The defendants are appealing a federal circuit court’s decision that granted legitimate “standing” to the plaintiffs to bring suit disputing the electronic surveillance program’s constitutionality.
The Justice Department maintains that the plaintiffs don’t have standing to challenge the powers granted in the FAA because they are unable to claim with certainty that they were specifically wiretapped in the first place. Such a determination is impossible to make because all attempts to gather said information have hitherto been quashed by federal courts. They have overwhelmingly agreed with the government’s assertion that disclosing such information would divulge state secrets. Thus the only way to prove aggrieved status, and then challenge government snooping, is through government admission.
Despite pledges to use the privilege sparingly, Barack Obama’s administration has enshrined the Kafkaesque nature of American judicial proceedings in the War on Terror: the government claims it is a state secret whether you’ve been targeted for surveillance, thereby invalidating any legal challenges you may present because you can’t even prove you’ve been a victim.
As Justice Sonia Sotomayor put it ten seconds into the Solicitor General’s argument: “General [Donald Verrelli], is there anybody who has standing?”
The Supreme Court’s decision in Amnesty v. Clapper has the potential to determine how far the government can extend the cloak of secrecy over its national security activities. Notwithstanding the tough questioning by Sotomayor and her liberal colleagues on the bench, legal scholars note that the court usually doesn’t hear a case unless it sees legitimate ground to overturn a circuit court’s decision—which in this case would mean denying that the plaintiffs had standing to bring suit.
National Clearinghouse for Treasonous Contentions
Surreal judicial machinations aside, what are the real threats of the government collecting all the communications and personal data that fall into NSA’s surveillance net?
The National Counterterrorism Center (NCTC) is a freshly minted bureaucracy—within the Office of the Director of National Intelligence (ODNI)—that houses and evaluates “terrorism” intelligence from the nation’s 16 other spy agencies, including NSA. It was created to streamline interagency intelligence sharing but ironically, or perhaps indicatively, has led to even more red tape.
Thanks to a series of new “guidelines” issued by the Attorney General, Director of National Intelligence (DNI), and head of NCTC in March of 2012, the center now also acquires information mined from any government database (ranging from local law-enforcement data to employment history and student records). It can also buy data from private sector aggregators—including millions upon millions of lawful commercial transactions over the past decade.
Previously, as the American Civil Liberties Union (ACLU) noted, “the intelligence community was barred from collecting information about ordinary Americans unless the person was a terror suspect or part of an actual investigation.” When the NCTC acquired non-terrorism related data, such as that described above, it had to identify and discard it within 180 days. That regulation was scrapped in the new guidelines, which allow NCTC to collect innocuous data and “continually assess” information concerning innocent Americans for up to five years. The ACLU goes on to mention:
As revealed in a recent Washington Post expose, we now know the NCTC also coordinates counterterrorism operations such as the CIA’s targeted assassination program. As one anonymous official told the Post, “[i]t is the keeper of the criteria” that determine who is killed by the President. How is this designation reached? Presumably through the same ineffective algorithms and data-mining technology mentioned above.
FML: What Once Was TMI For TIA is Now A-OK
Immediately following 9/11, the Pentagon unveiled the closest thing to an actual “Big Brother” program that had ever earnestly been considered in the United States: Total Information Awareness (TIA). A pilot scheme designed to collate as much information as possible about as many people as possible within one massive database, TIA would have been accessible to government officials who could then extract actionable information about potential terrorists.
In 2003, Congress shut down the program after bipartisan objections to this massive domestic surveillance proposal reached a fever pitch. Among the concerns voiced was the need to protect the privacy of millions of Americans whose personal information – including “huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records”– would be stored and perused by deficient computer programs aimed at detecting suspicious activity patterns, without any probable cause to suspect criminal wrongdoing.
Regardless of the corporate rush to massage “big data” in order to target consumers, when such data-mining technologies are placed at the disposal of the state, the result is to contravene the protection against “unreasonable searches and seizures” enshrined in the Bill of Rights. The Fourth Amendment forbids the issuing of “warrants” that do not specify who is to be searched and for what purpose. But technological ubiquity and interconnectedness have called this fundamental Constitutional protection into question.
Despite the Congressional backlash against TIA, the government’s current data-mining operations represent the realization of TIA’s core purpose: the acquisition and storage of massive amounts of personal data that can be mined to determine everything the government would ever want to know about a person. By utilizing pattern recognition software, it can even lay out a timeline of your life’s activities: everything you’ve ever done since the program was initiated, with predictive (albeit fallible) algorithms used to foresee where or what you’ll be doing in the future.
The news of the Obama administration’s “disposition matrix” adds new icing to the cake. The Post’s article implies that the information culled from these databases can be used not just to track you, but to determine your “disposition” toward violence against the U.S. government: your predilection for terrorist activities—what could amount to a death sentence for crimes that have yet to be committed.
The only types of intelligence within these databases that can possibly be used to predict future criminal activity are suspicious commercial transactions (large bank transfers or the purchase of bomb-making materials, for example) or alarming speech. Despite assurances from the Obama administration that they’re simply targeting “bad guys,” the adoption of preventive counterterror measures requires the (currently secret) deployment of evidence against a suspect before they commit a crime. To borrow a phrase from the science-fiction dystopia Minority Report, it requires conviction of a “pre-crime.”
Because there have been notably few successful terrorist attacks on US interests (outside of declared war zones, like Iraq and Afghanistan, where the label “terrorist” lacks any objective meaning) since 9/11, it cannot conceivably be argued (nor has it) that the people the president is assassinating in Yemen and Pakistan have actually committed any acts of terrorism. So how did they get onto the list to begin with? Here, a close look at the most-discussed case arising from the targeted killing program is instructive.
I Left My Heart—and Right to Due Process—in Albuquerque?
Anwar al-Awlaki—the radical Islamist preacher from New Mexico who joined al-Qaeda in the Arabian Peninsula (AQAP)—was assassinated by a drone strike in Yemen on September 30, 2011. His case has been a centerpiece of debate regarding the kill-list because of his status as an American citizen outside a declared war zone, which many argue should make applicable Constitutional protections like the right to due process of law.
Less often discussed, because they can never be definitively known, are the criteria leading to his placement on the kill list. Few claim that Awlaki was an innocent bystander—he openly preached for violence against the US military in retaliation for what he saw as unbridled aggression against Muslims across the world—but aside from anonymous assertions made in the press and the flourish of speeches from the White House, no government official has ever presented any evidence that he was an “operational commander” in the organization. That is to say, it has never been determined or even legitimately claimed that he committed an act of terrorism or engaged in a conspiracy to commit such an act.
What we do know is this: he was a remarkably successful recruiter of Western Muslims to the cause of al-Qaeda. His English fluency in particular made his sermons and speeches quite palatable to disaffected Muslims in the U.S. and Great Britain, including (allegedly) the Fort Hood shooter and the Underwear Bomber.
Many will say, “But surely incitement to violence of this sort is a crime, right?” Well, the lack of charges against him notwithstanding, it depends.
In 1969 the Supreme Court heard the case of Brandenburg v. Ohio, in which an Ohio-based Klansman was arrested for making a speech that advocated violence against government officials who, along with various minorities, “suppress[ed] the white, Caucasian race.” The statute he allegedly violated was a remnant of the 1919 Red Scare that prohibited advocating for violence to achieve political or industrial reform.
Brandenburg’s lower-court conviction was overturned because his speech failed three elements of what later became known as “the Brandenburg test” for criminal incitement—intent, imminence, and likelihood. To hastily summarize, urging criminal activity against specific persons in a situation where it can be reasonably conceived such action will take place is a crime. However, championing violence as a general method of achieving political goals without a clear target, subjective intention, or reasonable presumption of accomplishment is not a crime and is protected under the First Amendment.
So, where does Awlaki figure into this precedent? To our knowledge, his speech did not meet the criteria set forth in the Brandenburg decision, and is thus protected by the Constitution.
Which adds another layer of intrigue to the equation: could he have been added to the kill list not because of his criminal actions but because what he was doing—as threatening as it was—was not illegal under the law? Was assassination a convenient method of bypassing an arduous, and potentially unsuccessful, prosecution while demonstrating that anyone who challenges US power can and will be killed?
We will never definitively know the answers to those questions because they were eviscerated with Anwar al-Awlaki’s flesh following the explosion of a Hellfire missile in Yemen 13 months ago. And not even the whisper campaign being conducted in the media against the dead cleric can explain why his son, an American minor, was killed in a separate drone strike some two weeks later.
Enter the Legal Labyrinth
Because the Obama administration insists on keeping its national security policies furtive, the criteria for placement on the kill list remain off-limits in a court of law. Even if those placed on such a list somehow found out about it, they would be unable to challenge it in court—since, according to the Catch-22 interpretation of the government’s state-secrets privilege, knowledge of that designation can be considered a state secret.
Prior to al-Awlaki’s assassination, the ACLU and Nasser al-Awlaki, the slain preacher’s father, brought suit to have the government disclose its reasoning in putting his son on a kill list. Although narrowly focused, the court’s decisions, as well as the procedural hurdles faced by the plaintiffs, are an enlightening model of how such cases tend to be adjudicated in the federal judiciary.
Ten days after Nasser al-Awlaki retained counsel on his son’s behalf, the Treasury Department’s Office of Foreign Asset Control (OFAC) placed the son, Anwar, on a list that labeled him a “specially designated global terrorist.” Placement there made “it a crime for lawyers to provide representation for his benefit without first seeking a license from OFAC.” Only after OFAC reluctantly gave lawyers the right to sue on behalf of their client (after being sued itself), was the case allowed to proceed.
The court determined that the elder Awlaki didn’t have standing to ask why his son was listed as a “specially designated global terrorist,” because technically Nasser wasn’t the party subject to assassination. The judge presiding over the case also found that cases like this could not be adjudicated the way retroactive habeas cases arising from Guantanamo Bay are, because of the “[im]propriety of a judge doing so in advance of what he characterizes as a military decision,” as noted by Adam Serwer of The American Prospect. In sum, it was decided the court couldn’t determine the legality of extrajudicial state murder until it occurs.
To recap: you are placed on a kill list, making your assassination a priority of the state. First, you must fight in court to receive permission to even have legal representation. Then you must present yourself and file suit in federal court, thereby disclosing your location and possibly enabling the very murder you’re trying to halt (or, in this case, simply trying to figure out the justifications for). Moreover, the court cannot suspend your execution order because doing so would be preemptively second-guessing the executive.
And even if you get that far, the government can still assert the state-secrets privilege to withhold vital information from the court and prevent meaningful challenge. If this warren of procedural minutiae and legal dilemmas seems designed to obstruct and preclude accountability, that’s because it is.
Same Wine, Different Bottles
Due process of law, as it pertains to national security, has now become a fictive concept only seen in the movies. “Pre-crime,” whether determined by computer algorithm or physical activity, is now a reality punishable by death.
With the knowledge that some of the nation’s largest domestic data-mining programs are now housed under the same roof as the “disposition matrix” for determining who is threatening enough to kill by Hellfire missile, Americans should be acutely aware of the danger this presents. The potential for abuse is grave, and will remain so until the legislative and judicial branches of government tasked with checking executive power re-assert their Constitutional prerogatives.
The partisan duopoly enjoyed by the Democrats and Republicans recently gave the American public a choice between two candidates who embraced a vast majority of the same policies, yet struck different tones and styles in their rhetorical delivery. Both parties have endorsed George W. Bush’s once-controversial executive power grab. It is up to the people to begin a process that will stop this wholesale violation of the Fourth Amendment’s “right of the people to be secure in their persons, houses, papers, and effects,” and the Fifth and Fourteenth Amendments’ due process clause: “nor shall any person . . . be deprived of life, liberty, or property, without due process of law….”
Referencing the temporary suspension of habeas corpus in Britain during WWII, Winston Churchill famously remarked:
George W. Bush, despite having a bust of the great English statesman, violated this maxim (and American law) by establishing a legal black hole for terrorism suspects at Guantanamo Bay, Cuba. Barack Obama doesn’t even bother with the challenges involved in kidnapping persons without due process; he just kills them.
With neither major political party willing to address this fundamental issue of our government’s relationship to its citizenry, and no endpoint in sight for the War on Terror that is used to justify the excesses of our current surveillance state, we may very well ask ourselves: What was this election for, anyway?
By Christian Stork on Nov 14, 2012
Following Barack Obama’s significant electoral victory, the ways in which the President will interpret his new “mandate” are still very much up for debate. While pundits, many of whom got the election seriously wrong, fumble to come up with new predictions, an analysis of Obama’s track record and statements on national security policy can be quite illuminating. Two momentous stories of the past few weeks can help us evaluate current and future prospects for our Constitutional rights, a year after Osama bin Laden’s death and a decade after 9/11. One grim harbinger of what’s to continue: a nighttime drone strike in Yemen that killed three “al-Qaida militants” was carried out within 24 hours of Obama’s victory speech.
But even more important was the bombshell story that appeared in the Washington Post on October 23, revealing the existence of a new database within the National Counterterrorism Center (NCTC) that will list suspected terrorists and militants slated for extrajudicial assassination. The article details the creation of a “next-generation targeting list called the ‘disposition matrix’” which “contains the names of terrorism suspects arrayed against an accounting of the resources being marshaled” to kill them, including the ability to map “plans for the ‘disposition’ of suspects beyond the reach of American drones.”
Additionally, on October 29, the Supreme Court heard oral arguments in Amnesty v. Clapper, evaluating a lawsuit filed by journalists, human rights workers, and lawyers, who claimed that their jobs are unnecessarily hampered by the specter of the National Security Agency eavesdropping on their communications with clients overseas. As described by the Electronic Frontier Foundation (EFF), “the [Supreme] Court will essentially determine whether any court… can rule on whether the [National Security Agency]’s targeted warrantless surveillance of Americans’ international communications violates the Constitution.”
What do NSA’s warrantless wiretapping program and the Obama administration’s recently developed “disposition matrix” have to do with one another? Two points resound in particular. First, both are only able to function in an environment of total secrecy. Also, they represent significant advances in the codification of a new norm for U.S. national security policy—one very much at odds with the constitutionally limited Commander-in-Chief of common lore.
Perhaps even more ominously, the infrastructure development of the Obama administration’s policy of targeted killing signals a creeping move toward domestic application. As drone technology continues to be imported home, the convergence of the kill-list(s) within the NCTC bureaucracy—which houses huge repositories of both domestic and foreign intelligence with no probable cause of criminality—is a foreboding development in this saga of eroding checks and disappearing balance.
Climbing Out of the Abyss, Jumping Back In
Unknown to the American people and to much of their government until the late 1970’s, NSA has enjoyed free rein to intercept the electronic communications of Americans and foreigners since its secret inception in 1952. To those who were familiar with it, the uniform joke was that NSA stood for “No Such Agency,” an indication of its covert and prized status within the intelligence community.
After media revelations of intelligence abuses by the Nixon administration began to mount in the wake of Watergate, NSA became the subject of Congressional ire in the form of the United States Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities—commonly known as the “Church Committee” after its chair, Senator Frank Church (D-ID)—established on January 17, 1975. This ad-hoc investigative body found itself unearthing troves of classified records from the FBI, NSA, CIA and Pentagon that detailed the murky pursuits of each during the first decades of the Cold War. Under the mantle of defeating communism, internal documents confirmed the executive branch’s use of said agencies in some of the most fiendish acts of human imagination (including refined psychological torture techniques), particularly by the Central Intelligence Agency.
The Cold War mindset had incurably infected the nation’s security apparatus, establishing extralegal subversion efforts at home and brutish control abroad. It was revealed that the FBI undertook a war to destroy homegrown movements such as the Black Liberation Movement (including Martin Luther King, Jr.), and that NSA had indiscriminately intercepted the communications of Americans without warrant, even without the President’s knowledge. When confronted with such nefarious enterprises, Congress sought to rein in the excesses of the intelligence community, notably those directed at the American public.
The committee chair, Senator Frank Church, then issued this warning about NSA’s power:
That capability at any time could be turned around on the American people and no American would have any privacy left, such is the capability to monitor everything. Telephone conversations, telegrams, it doesn’t matter. There would be no place to hide. If this government ever became a tyranny, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny, and there would be no way to fight back, because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within the reach of the government to know. Such is the capability of this technology. I don’t want to see this country ever go across the bridge. I know the capability that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return.
In spite of FISC’s rubberstamping, following 9/11 the Bush administration began deliberately bypassing the court, because even its minimal evidentiary standard was too high a burden of proof for the blanket surveillance they wanted. So began the dragnet monitoring of the American public by tapping the country’s major electronic communication chokepoints in collusion with the nation’s largest telecommunications companies.
When confronted with the criminal conspiracy undertaken by the Bush administration and telecoms, Congress confirmed why it retains the lowest approval rating of any major American institution by “reforming” the statute to accommodate the massive law breaking. The 2008 FISA Amendments Act [FAA] entrenched the policy of mass eavesdropping and granted the telecoms retroactive immunity for their criminality, withdrawing even the negligible individual protections in effect since 1979. Despite initial opposition, then-presidential candidate Barack Obama voted for the act as one of his last deeds in the Senate. A few brave (and unsuccessful) lawsuits later, this policy remains the status quo.
Seemingly Impossible to Stand (Up For Your Rights)
The latest challenge to government snooping, Amnesty v. Clapper, isn’t even about Big Brother’s legality in the first place. The defendants are appealing a federal circuit court’s decision that granted legitimate “standing” to the plaintiffs to bring suit disputing the electronic surveillance program’s constitutionality.
The Justice Department maintains that the plaintiffs don’t have standing to challenge the powers granted in the FAA because they are unable to claim with certainty that they were specifically wiretapped in the first place. Such a determination is impossible to make because all attempts to gather said information have hitherto been quashed by federal courts. They have overwhelmingly agreed with the government’s assertion that disclosing such information would divulge state secrets. Thus the only way to prove aggrieved status, and then challenge government snooping, is through government admission.
Despite pledges to use the privilege sparingly, Barack Obama’s administration has enshrined the Kafkaesque nature of American judicial proceedings in the War on Terror: the government claims it is a state secret whether you’ve been targeted for surveillance, thereby invalidating any legal challenges you may present because you can’t even prove you’ve been a victim.
As Justice Sonia Sotomayor put it ten seconds into the Solicitor General’s argument: “General [Donald Verrelli], is there anybody who has standing?”
The Supreme Court’s decision in Amnesty v. Clapper has the potential to determine how far the government can extend the cloak of secrecy over its national security activities. Notwithstanding the tough questioning by Sotomayor and her liberal colleagues on the bench, legal scholars note that the court usually doesn’t hear a case unless it sees legitimate ground to overturn a circuit court’s decision—which in this case would mean denying that the plaintiffs had standing to bring suit.
National Clearinghouse for Treasonous Contentions
Surreal judicial machinations aside, what are the real threats of the government collecting all the communications and personal data that fall into NSA’s surveillance net?
The National Counterterrorism Center (NCTC) is a freshly minted bureaucracy—within the Office of the Director of National Intelligence (ODNI)—that houses and evaluates “terrorism” intelligence from the nation’s 16 other spy agencies, including NSA. It was created to streamline interagency intelligence sharing but ironically, or perhaps indicatively, has led to even more red tape.
Thanks to a series of new “guidelines” issued by the Attorney General, Director of National Intelligence (DNI), and head of NCTC in March of 2012, the center now also acquires information mined from any government database (ranging from local law-enforcement data to employment history and student records). It can also buy data from private sector aggregators—including millions upon millions of lawful commercial transactions over the past decade.
Previously, as the American Civil Liberties Union (ACLU) noted, “the intelligence community was barred from collecting information about ordinary Americans unless the person was a terror suspect or part of an actual investigation.” When the NCTC acquired non-terrorism related data, such as that described above, it had to identify and discard it within 180 days. That regulation was scrapped in the new guidelines, which allow NCTC to collect innocuous data and “continually assess” information concerning innocent Americans for up to five years. The ACLU goes on to mention:
Perhaps most disturbing, once information is gathered (not necessarily connected to terrorism), in many cases it can be shared with “a federal, state, local, tribal or foreign or international entity, or to an individual or entity not part of a government”—literally anyone.
FML: What Once Was TMI For TIA is Now A-OK
Immediately following 9/11, the Pentagon unveiled the closest thing to an actual “Big Brother” program that had ever earnestly been considered in the United States: Total Information Awareness (TIA). A pilot scheme designed to collate as much information as possible about as many people as possible within one massive database, TIA would have been accessible to government officials who could then extract actionable information about potential terrorists.
In 2003, Congress shut down the program after bipartisan objections to this massive domestic surveillance proposal reached a fever pitch. Among the concerns voiced was the need to protect the privacy of millions of Americans whose personal information – including “huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records”– would be stored and perused by deficient computer programs aimed at detecting suspicious activity patterns, without any probable cause to suspect criminal wrongdoing.
Regardless of the corporate rush to massage “big data” in order to target consumers, when such data-mining technologies are placed at the disposal of the state, the result is to contravene the protection against “unreasonable searches and seizures” enshrined in the Bill of Rights. The Fourth Amendment forbids the issuing of “warrants” that do not specify who is to be searched and for what purpose. But technological ubiquity and interconnectedness have called this fundamental Constitutional protection into question.
Despite the Congressional backlash against TIA, the government’s current data-mining operations represent the realization of TIA’s core purpose: the acquisition and storage of massive amounts of personal data that can be mined to determine everything the government would ever want to know about a person. By utilizing pattern recognition software, it can even lay out a timeline of your life’s activities: everything you’ve ever done since the program was initiated, with predictive (albeit fallible) algorithms used to foresee where or what you’ll be doing in the future.
The news of the Obama administration’s “disposition matrix” adds new icing to the cake. The Post’s article implies that the information culled from these databases can be used not just to track you, but to determine your “disposition” toward violence against the U.S. government: your predilection for terrorist activities—what could amount to a death sentence for crimes that have yet to be committed.
The only types of intelligence within these databases that can possibly be used to predict future criminal activity are suspicious commercial transactions (large bank transfers or the purchase of bomb-making materials, for example) or alarming speech. Despite assurances from the Obama administration that they’re simply targeting “bad guys,” the adoption of preventive counterterror measures requires the (currently secret) deployment of evidence against a suspect before they commit a crime. To borrow a phrase from the science-fiction dystopia Minority Report, it requires conviction of a “pre-crime.”
Because there have been notably few successful terrorist attacks on US interests (outside of declared war zones, like Iraq and Afghanistan, where the label “terrorist” lacks any objective meaning) since 9/11, it cannot conceivably be argued (nor has it) that the people the president is assassinating in Yemen and Pakistan have actually committed any acts of terrorism. So how did they get onto the list to begin with? Here, a close look at the most-discussed case arising from the targeted killing program is instructive.
I Left My Heart—and Right to Due Process—in Albuquerque?
Anwar al-Awlaki—the radical Islamist preacher from New Mexico who joined al-Qaeda in the Arabian Peninsula (AQAP)—was assassinated by a drone strike in Yemen on September 30, 2011. His case has been a centerpiece of debate regarding the kill-list because of his status as an American citizen outside a declared war zone, which many argue should make applicable Constitutional protections like the right to due process of law.
Less often discussed, because they can never be definitively known, are the criteria leading to his placement on the kill list. Few claim that Awlaki was an innocent bystander—he openly preached for violence against the US military in retaliation for what he saw as unbridled aggression against Muslims across the world—but aside from anonymous assertions made in the press and the flourish of speeches from the White House, no government official has ever presented any evidence that he was an “operational commander” in the organization. That is to say, it has never been determined or even legitimately claimed that he committed an act of terrorism or engaged in a conspiracy to commit such an act.
What we do know is this: he was a remarkably successful recruiter of Western Muslims to the cause of al-Qaeda. His English fluency in particular made his sermons and speeches quite palatable to disaffected Muslims in the U.S. and Great Britain, including (allegedly) the Fort Hood shooter and the Underwear Bomber.
Many will say, “But surely incitement to violence of this sort is a crime, right?” Well, the lack of charges against him notwithstanding, it depends.
In 1969 the Supreme Court heard the case of Brandenburg v. Ohio, in which an Ohio-based Klansman was arrested for making a speech that advocated violence against government officials who, along with various minorities, “suppress[ed] the white, Caucasian race.” The statute he allegedly violated was a remnant of the 1919 Red Scare that prohibited advocating for violence to achieve political or industrial reform.
Brandenburg’s lower-court conviction was overturned because his speech failed three elements of what later became known as “the Brandenburg test” for criminal incitement—intent, imminence, and likelihood. To hastily summarize, urging criminal activity against specific persons in a situation where it can be reasonably conceived such action will take place is a crime. However, championing violence as a general method of achieving political goals without a clear target, subjective intention, or reasonable presumption of accomplishment is not a crime and is protected under the First Amendment.
So, where does Awlaki figure into this precedent? To our knowledge, his speech did not meet the criteria set forth in the Brandenburg decision, and is thus protected by the Constitution.
Which adds another layer of intrigue to the equation: could he have been added to the kill list not because of his criminal actions but because what he was doing—as threatening as it was—was not illegal under the law? Was assassination a convenient method of bypassing an arduous, and potentially unsuccessful, prosecution while demonstrating that anyone who challenges US power can and will be killed?
We will never definitively know the answers to those questions because they were eviscerated with Anwar al-Awlaki’s flesh following the explosion of a Hellfire missile in Yemen 13 months ago. And not even the whisper campaign being conducted in the media against the dead cleric can explain why his son, an American minor, was killed in a separate drone strike some two weeks later.
Enter the Legal Labyrinth
Because the Obama administration insists on keeping its national security policies furtive, the criteria for placement on the kill list remain off-limits in a court of law. Even if those placed on such a list somehow found out about it, they would be unable to challenge it in court—since, according to the Catch-22 interpretation of the government’s state-secrets privilege, knowledge of that designation can be considered a state secret.
Prior to al-Awlaki’s assassination, the ACLU and Nasser al-Awlaki, the slain preacher’s father, brought suit to have the government disclose its reasoning in putting his son on a kill list. Although narrowly focused, the court’s decisions, as well as the procedural hurdles faced by the plaintiffs, are an enlightening model of how such cases tend to be adjudicated in the federal judiciary.
Ten days after Nasser al-Awlaki retained counsel on his son’s behalf, the Treasury Department’s Office of Foreign Asset Control (OFAC) placed the son, Anwar, on a list that labeled him a “specially designated global terrorist.” Placement there made “it a crime for lawyers to provide representation for his benefit without first seeking a license from OFAC.” Only after OFAC reluctantly gave lawyers the right to sue on behalf of their client (after being sued itself), was the case allowed to proceed.
The court determined that the elder Awlaki didn’t have standing to ask why his son was listed as a “specially designated global terrorist,” because technically Nasser wasn’t the party subject to assassination. The judge presiding over the case also found that cases like this could not be adjudicated the way retroactive habeas cases arising from Guantanamo Bay are, because of the “[im]propriety of a judge doing so in advance of what he characterizes as a military decision,” as noted by Adam Serwer of The American Prospect. In sum, it was decided the court couldn’t determine the legality of extrajudicial state murder until it occurs.
To recap: you are placed on a kill list, making your assassination a priority of the state. First, you must fight in court to receive permission to even have legal representation. Then you must present yourself and file suit in federal court, thereby disclosing your location and possibly enabling the very murder you’re trying to halt (or, in this case, simply trying to figure out the justifications for). Moreover, the court cannot suspend your execution order because doing so would be preemptively second-guessing the executive.
And even if you get that far, the government can still assert the state-secrets privilege to withhold vital information from the court and prevent meaningful challenge. If this warren of procedural minutiae and legal dilemmas seems designed to obstruct and preclude accountability, that’s because it is.
Same Wine, Different Bottles
Due process of law, as it pertains to national security, has now become a fictive concept only seen in the movies. “Pre-crime,” whether determined by computer algorithm or physical activity, is now a reality punishable by death.
With the knowledge that some of the nation’s largest domestic data-mining programs are now housed under the same roof as the “disposition matrix” for determining who is threatening enough to kill by Hellfire missile, Americans should be acutely aware of the danger this presents. The potential for abuse is grave, and will remain so until the legislative and judicial branches of government tasked with checking executive power re-assert their Constitutional prerogatives.
The partisan duopoly enjoyed by the Democrats and Republicans recently gave the American public a choice between two candidates who embraced a vast majority of the same policies, yet struck different tones and styles in their rhetorical delivery. Both parties have endorsed George W. Bush’s once-controversial executive power grab. It is up to the people to begin a process that will stop this wholesale violation of the Fourth Amendment’s “right of the people to be secure in their persons, houses, papers, and effects,” and the Fifth and Fourteenth Amendments’ due process clause: “nor shall any person . . . be deprived of life, liberty, or property, without due process of law….”
Referencing the temporary suspension of habeas corpus in Britain during WWII, Winston Churchill famously remarked:
The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist.
With neither major political party willing to address this fundamental issue of our government’s relationship to its citizenry, and no endpoint in sight for the War on Terror that is used to justify the excesses of our current surveillance state, we may very well ask ourselves: What was this election for, anyway?
Wednesday, November 14, 2012
More Jobs with Lousy Wages...
...and the Desertion of Non-College White Men From the Democratic Party
Friday, November 2, 2012
robertreich.org
Friday, November 2, 2012
robertreich.org
The two most important
trends, confirmed in Friday’s jobs report from the Bureau of Labor
Statistics, are that (1) jobs slowly continue to return, and (2) those
jobs are paying less and less.
Today’s report showed 171,000 workers were added to
payrolls in October, up from 148,000 in September. At the same time,
unemployment rose to 7.9 percent from 7.8 percent last month. The reason
for the seeming disparity: As jobs have begun to return, more people
have been entering the labor force seeking employment. The household
survey, on which the unemployment percentage is based, counts as
“unemployed” only people who are looking for work.
As I’ve said, you have to take a single month’s
report with a grain of salt because the job reports bounce around a
great deal, and are often revised. Last month the BLS announced that
114,000 new jobs were created in September. Today the BLS revised that
September figure upward to 148,000.
Overall, the jobs trend is in the right direction. The President and Democrats can take some comfort.
The most disturbing aspect of today’s report is the
continuing decline of wages. Average hourly earnings climbed 1.6
percent in October from the same time last year. That’s not enough to
match the rate of inflation – meaning that hourly earnings continue to
drop in real terms.
It’s also the smallest gain since comparable
year-over-year records began in 2007, before the Great Recession.
Earnings for production workers – about 80 percent of the workforce —
rose only 1.1 percent in the 12 months to October. That’s way behind
inflation, and the weakest wage growth since the BLS began keeping
records on wages in 1965.
The biggest challenge ahead isn’t just to get jobs back. They’re coming back. It’s to raise the wages of most Americans.
This isn’t a new challenge. The median wage has
been flat for three decades, when you adjust for inflation. Since 2000
it’s been dropping.
What does all of this have to do with the upcoming
election? Plenty. Some of the biggest wage losses over the last several
decades have been among white men who haven’t attended college. And, not
coincidentally, they’re the ones who have been abandoning the Democrats
in droves.
Three decades ago, non-college white men were
solidly Democratic. Many of them were unionized. They had jobs that
delivered good middle-class incomes.
But over the last three decades they stopped believing the Democratic Party could deliver good jobs at decent wages.
Republicans have done no better for them on the
wages — in fact many policies touted by the GOP, such as its attack on
unions, have accelerated the downward wage trend.
But Republicans have offered white non-college
males the scapegoats of racism and immigration — blaming, directly or
indirectly, blacks and Latinos — and the solace of right-wing
evangelical Christianity. Absent any bold leadership from Democrats,
these have been enough.
The Difference Between "Broadening the Tax Base" and Raising Taxes on the Rich
The President's Opening Bid on the Grand Bargain (III)
Not a chance. True enough, such “base broadening,” as Republicans like to call it, could conceivably generate $1.6 trillion in additional tax revenues over the next decade.
But, wait. Didn’t the President just win a second term? The major issue decided in last week’s election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans.
“Broadening the base” has nothing whatever to do with the rich paying more. That’s because a lot of tax credits and deductions help the middle class and the poor.
If we end the Earned Income Tax Credit, for example, some of the poorest Americans will end up sacrificing. That tab was $63 billion last year.
Or if the “loophole” is tax-free employee health care, or the home mortgage tax deduction, or tax-deferred 401K accounts, most of the added tax revenues will come out of the pockets of the middle class.
So when Republicans talk about “broadening the base,” watch your wallets. Now that the President has set his goal on $1.6 trillion in additional taxes, the question is whether the rich are going to cough up $1.6 trillion more.
There’s no way that $1.6 trillion can come out of the pockets of the wealthy merely by capping the deductions the wealthy take advantage of.
If Republicans won’t budge on raising tax rates but insist on broadening the base, Democrats should take aim at the biggest tax loophole of all for America’s wealthy: the preference for capital gains.
Capital gains are now taxed at only 15 percent (the major reason Mitt Romney pays a rate of under 14 percent on over $20 million of annual income). Capital gains should be taxed the same as ordinary income. That way, under a progressive tax system, the wealthy would pay far more — on the way to $1.6 trillion.
++++
With the election behind us I had hoped we’d get beyond games of chicken. No such luck.
But first you need to understand that the game of chicken isn’t about how much or when we cut the budget deficit. Or even whether the upcoming “fiscal cliff” poses a danger to the economy.
The non-partisan Congressional Budget Office on Thursday warned that the automatic tax increases and spending cuts scheduled to start in January amount to too much deficit reduction, too soon. They’d put the economy back into recession, and push unemployment to about 9 percent. But the CBO also warned of an economic crisis ahead if the United States doesn’t stem the growth of the nation’s exploding deficit.
Get it? Reduce the budget deficit too quickly, and we’re in trouble. But fail to address the deficit, and we’re also in trouble. It’s really a matter of timing. That’s why I think any deal should include a trigger mechanism that begins to cut spending and raise taxes when the economy has two consecutive quarters of 6 percent unemployment or less, and 3 percent annualized growth or more.
In reality, though, the upcoming game of chicken isn’t about any of this. It’s over the clearest issue President Obama and Mitt Romney fought over: whether taxes should be raised on the rich.
Democrats and Republicans are now maneuvering to maximize their bargaining leverage when they sit down next year to decide this.
On Friday the President called on called on Congress to immediately make permanent the tax cuts for Americans who make less than $250,000 a year, while at the same time allowing tax rates to rise for wealthy Americans — and then making those rates part of a broader deal next year.
The President knows congressional Republicans won’t agree, but he needed to set out his central demand because it’s the one thing that can fairly be interpreted as a mandate from the election.
So what’s going to happen? Bear with me, because this gets interesting.
Some Democrats (and some White House strategists) figure they’ll have most bargaining leverage in next year’s deal if they do nothing now – allowing tax rates to rise automatically on everyone after the first of the year. Then they plan to offer Republicans a deal that reduces taxes on people earning less than $250,000 – which would be retroactive to January 1st.
Republicans would have to choose between a tax cut on the middle class or no tax cut at all. Democrats believe Republicans would have to take the deal. Even Grover Norquist would be hard-pressed to come up with an argument against it.
Some Republicans, meanwhile, figure they’ll have more bargaining leverage if they keep things as they are until late January or February.
What’s magical about late January and February? That’s when the debt ceiling has to be raised again, which means that’s when Republicans can once again threaten to vote against raising it. (In theory, we’ll hit the ceiling at the start of January, but the government can juggle payments and take various “extraordinary measures” for another month or two beyond that – maybe even until March – before it could no longer be able to borrow enough money to pay its bills.)
This is the thinking behind House Speaker John Boehner’s proposal earlier Friday that all the tax cuts — including those for the rich — should be extended until next year, until there’s a deal. “I’m proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us,’’ Boehner said.
So who blinks first? Democrats who don’t mind going over the cliff because they’ll get a better final deal – and the deal will be retroactive to January 1st so it’s not really a cliff at all but more like a little hill? Or Republicans who want to extend the Bush tax cuts beyond January 1st, until we get sufficiently close to the debt ceiling that they can once again threaten the full faith and credit of America?
As I said before, I had naively assumed the election would put an end to these games, but obviously not. Yet Obama and the Democrats are holding most of the cards now. Let’s hope they use them.
But first you need to understand that the game of chicken isn’t about how much or when we cut the budget deficit. Or even whether the upcoming “fiscal cliff” poses a danger to the economy.
The non-partisan Congressional Budget Office on Thursday warned that the automatic tax increases and spending cuts scheduled to start in January amount to too much deficit reduction, too soon. They’d put the economy back into recession, and push unemployment to about 9 percent. But the CBO also warned of an economic crisis ahead if the United States doesn’t stem the growth of the nation’s exploding deficit.
Get it? Reduce the budget deficit too quickly, and we’re in trouble. But fail to address the deficit, and we’re also in trouble. It’s really a matter of timing. That’s why I think any deal should include a trigger mechanism that begins to cut spending and raise taxes when the economy has two consecutive quarters of 6 percent unemployment or less, and 3 percent annualized growth or more.
In reality, though, the upcoming game of chicken isn’t about any of this. It’s over the clearest issue President Obama and Mitt Romney fought over: whether taxes should be raised on the rich.
Democrats and Republicans are now maneuvering to maximize their bargaining leverage when they sit down next year to decide this.
On Friday the President called on called on Congress to immediately make permanent the tax cuts for Americans who make less than $250,000 a year, while at the same time allowing tax rates to rise for wealthy Americans — and then making those rates part of a broader deal next year.
The President knows congressional Republicans won’t agree, but he needed to set out his central demand because it’s the one thing that can fairly be interpreted as a mandate from the election.
So what’s going to happen? Bear with me, because this gets interesting.
Some Democrats (and some White House strategists) figure they’ll have most bargaining leverage in next year’s deal if they do nothing now – allowing tax rates to rise automatically on everyone after the first of the year. Then they plan to offer Republicans a deal that reduces taxes on people earning less than $250,000 – which would be retroactive to January 1st.
Republicans would have to choose between a tax cut on the middle class or no tax cut at all. Democrats believe Republicans would have to take the deal. Even Grover Norquist would be hard-pressed to come up with an argument against it.
Some Republicans, meanwhile, figure they’ll have more bargaining leverage if they keep things as they are until late January or February.
What’s magical about late January and February? That’s when the debt ceiling has to be raised again, which means that’s when Republicans can once again threaten to vote against raising it. (In theory, we’ll hit the ceiling at the start of January, but the government can juggle payments and take various “extraordinary measures” for another month or two beyond that – maybe even until March – before it could no longer be able to borrow enough money to pay its bills.)
This is the thinking behind House Speaker John Boehner’s proposal earlier Friday that all the tax cuts — including those for the rich — should be extended until next year, until there’s a deal. “I’m proposing that we avert the fiscal cliff together in a manner that ensures that 2013 is finally the year that our government comes to grips with the major problems that are facing us,’’ Boehner said.
So who blinks first? Democrats who don’t mind going over the cliff because they’ll get a better final deal – and the deal will be retroactive to January 1st so it’s not really a cliff at all but more like a little hill? Or Republicans who want to extend the Bush tax cuts beyond January 1st, until we get sufficiently close to the debt ceiling that they can once again threaten the full faith and credit of America?
As I said before, I had naively assumed the election would put an end to these games, but obviously not. Yet Obama and the Democrats are holding most of the cards now. Let’s hope they use them.
The Poor Will Be the First Over the Fiscal Cliff
Bryce Covert
The fiscal cliff may not be a real cliff, but jumping off it could be a
catastrophe for the poor.
Absent action from Congress and President Obama, come January 1, 2013, the Bush tax cuts, Obama’s payroll tax cut and extended unemployment insurance expire just as spending cuts from the sequester kick in. (To recap, in order to get Congress to lift the debt ceiling last year, President Obama formed a Congressional committee that was supposed to recommend ways to cut $1.5 trillion from the deficit. If it failed, “sequestration” would kick in—$1 trillion in automatic spending cuts split evenly between defense and non-defense spending, with Social Security, Medicaid and Medicare mostly protected, coinciding perfectly with the other expirations on January 1. The committee never came through, so now we’re facing down the cuts.)
It’s not a pretty picture, although some have found silver linings. My Roosevelt Institute colleague Mark Schmitt is hopeful that real tax reform waits on the other side of the big leap.
Jonathan Chait argues that the impact will be gradual enough that Obama can delay or cancel out most of it. Some Democrats, including Representative Peter Welch of Vermont and Howard Dean, think it’s worth going over the cliff in order to force Congress’s hand in getting the budgetary house in order.
These are all potential upsides of going over the fiscal cliff, but the downside for the country’s poorest would likely be very harsh. First, the budget cuts from sequestration will hit the poor incredibly hard—even if they will not represent a majority of the revenue raised. The term “non-defense discretionary spending” will warm few cockles of the heart. But it’s an incredibly important portion of the budget. Ethan Pollack of the Economic Policy Institute broke it down in the graph below:
As you can see, this money represents public investment: in education, transportation, children’s health, etc. And many of these programs directly impact the poor. Housing assistance, child care and education, nutrition assistance, home heating assistance and income security for the blind, disabled and aged all together make up 17 percent of this spending—more than the largest category in that chart. This money goes to job training, Title X family planning services and Head Start, among other things. It’s anything but discretionary for those who rely on these critical programs.
And they’ll get pummeled by these automatic cuts. According to a letter from the Obama administration released in July, the cuts will mean nearly 100,000 children losing Head Start services and the elimination of child care assistance for 80,000 others, for starters. That’s a lot of pain and suffering on the other side of the cliff.
But the impact on the poor doesn’t stop there. They’ll also be hurt by the tax cuts that are set to expire at the same time. Overall, the loss of the Bush tax cuts for income, capital gains and the estate tax will hit rich people harder, as the top 20 percent would see their effective tax rate increase an average 5.8 percentage points, while the bottom 20 percent would see an increase of only 3.7 points. But the Child Tax Credit and Earned Income Tax Credit, credits aimed at low- and moderate-income Americans, were expanded under the 2009 stimulus, with the former aimed in particular at low-income families. Those expansions will expire, too, if we tumble over the cliff.
This all means that while the richest will experience a larger increase in rates, the poor will actually feel the biggest hit to their bottom lines. The bottom 20 percent of Americans will see their taxes go up by an average of $209, reducing their after-tax income by nearly 2 percent. The top 40 percent, however, will only see their after-tax income dinged by .1 percent. That’s a lot of money to come from those already struggling to make ends meet.
There’s another group of vulnerable people who get smacked as well: the unemployed. As the recession began in June of 2008, President Bush signed into law the Emergency Unemployment Compensation program, which has since been reauthorized ten times. The National Employment Law Project reports that the unemployment rate is more than 40 percent higher now than when it was first enacted, and the percentage of the unemployed who have been out of work for more than six months has jumped by over 20 points. If Congress doesn’t reauthorize the EUC and the extended benefits expire along with everything else, 2 million workers currently collecting federal benefits will be cut off immediately and a million more will run out of state benefits by the end of the first quarter in 2013. That’s an actual cliff, not a gradual slope.
If a “grand bargain” is reached to avert some of this chaos that includes cuts to the social safety net, including the entitlements that are currently protected from the sequestration, poor people will of course still get hit hard. So that’s even more reason to favor solutions such as raising taxes on high income so that we can do what Katrina vanden Heuvel suggests will put us on a sustainable path: invest in our country. Revive manufacturing and lead in green jobs, invest in public education and affordable college and reign in Wall Street and CEOs’ excesses. It’s what voters want—they didn’t side with austerity to fix our problems. And it’s certainly what the poorest and most vulnerable among us need.
Absent action from Congress and President Obama, come January 1, 2013, the Bush tax cuts, Obama’s payroll tax cut and extended unemployment insurance expire just as spending cuts from the sequester kick in. (To recap, in order to get Congress to lift the debt ceiling last year, President Obama formed a Congressional committee that was supposed to recommend ways to cut $1.5 trillion from the deficit. If it failed, “sequestration” would kick in—$1 trillion in automatic spending cuts split evenly between defense and non-defense spending, with Social Security, Medicaid and Medicare mostly protected, coinciding perfectly with the other expirations on January 1. The committee never came through, so now we’re facing down the cuts.)
It’s not a pretty picture, although some have found silver linings. My Roosevelt Institute colleague Mark Schmitt is hopeful that real tax reform waits on the other side of the big leap.
Jonathan Chait argues that the impact will be gradual enough that Obama can delay or cancel out most of it. Some Democrats, including Representative Peter Welch of Vermont and Howard Dean, think it’s worth going over the cliff in order to force Congress’s hand in getting the budgetary house in order.
These are all potential upsides of going over the fiscal cliff, but the downside for the country’s poorest would likely be very harsh. First, the budget cuts from sequestration will hit the poor incredibly hard—even if they will not represent a majority of the revenue raised. The term “non-defense discretionary spending” will warm few cockles of the heart. But it’s an incredibly important portion of the budget. Ethan Pollack of the Economic Policy Institute broke it down in the graph below:
As you can see, this money represents public investment: in education, transportation, children’s health, etc. And many of these programs directly impact the poor. Housing assistance, child care and education, nutrition assistance, home heating assistance and income security for the blind, disabled and aged all together make up 17 percent of this spending—more than the largest category in that chart. This money goes to job training, Title X family planning services and Head Start, among other things. It’s anything but discretionary for those who rely on these critical programs.
And they’ll get pummeled by these automatic cuts. According to a letter from the Obama administration released in July, the cuts will mean nearly 100,000 children losing Head Start services and the elimination of child care assistance for 80,000 others, for starters. That’s a lot of pain and suffering on the other side of the cliff.
But the impact on the poor doesn’t stop there. They’ll also be hurt by the tax cuts that are set to expire at the same time. Overall, the loss of the Bush tax cuts for income, capital gains and the estate tax will hit rich people harder, as the top 20 percent would see their effective tax rate increase an average 5.8 percentage points, while the bottom 20 percent would see an increase of only 3.7 points. But the Child Tax Credit and Earned Income Tax Credit, credits aimed at low- and moderate-income Americans, were expanded under the 2009 stimulus, with the former aimed in particular at low-income families. Those expansions will expire, too, if we tumble over the cliff.
This all means that while the richest will experience a larger increase in rates, the poor will actually feel the biggest hit to their bottom lines. The bottom 20 percent of Americans will see their taxes go up by an average of $209, reducing their after-tax income by nearly 2 percent. The top 40 percent, however, will only see their after-tax income dinged by .1 percent. That’s a lot of money to come from those already struggling to make ends meet.
There’s another group of vulnerable people who get smacked as well: the unemployed. As the recession began in June of 2008, President Bush signed into law the Emergency Unemployment Compensation program, which has since been reauthorized ten times. The National Employment Law Project reports that the unemployment rate is more than 40 percent higher now than when it was first enacted, and the percentage of the unemployed who have been out of work for more than six months has jumped by over 20 points. If Congress doesn’t reauthorize the EUC and the extended benefits expire along with everything else, 2 million workers currently collecting federal benefits will be cut off immediately and a million more will run out of state benefits by the end of the first quarter in 2013. That’s an actual cliff, not a gradual slope.
If a “grand bargain” is reached to avert some of this chaos that includes cuts to the social safety net, including the entitlements that are currently protected from the sequestration, poor people will of course still get hit hard. So that’s even more reason to favor solutions such as raising taxes on high income so that we can do what Katrina vanden Heuvel suggests will put us on a sustainable path: invest in our country. Revive manufacturing and lead in green jobs, invest in public education and affordable college and reign in Wall Street and CEOs’ excesses. It’s what voters want—they didn’t side with austerity to fix our problems. And it’s certainly what the poorest and most vulnerable among us need.
Making Cents
Damon Krukowski of Galaxie 500 and Damon & Naomi breaks down the meager royalties currently being paid out to bands by streaming services and explains what the music business' headlong quest for capital means for artists today.
By Damon Krukowski, November 14, 2012
Pitchfork
By Damon Krukowski, November 14, 2012
Pitchfork
I'm
sure each generation of musicians feels they've lived through a time of
tremendous change, but the shifts I've witnessed in my relatively short
music career-- from morphing formats to dissolving business models-- do
seem extraordinary. The first album I made was originally released on
LP only, in 1988-- and my next will likely only be pressed on LP again.
But in between, the music industry seems to have done everything it
could to screw up that simple model of exchange; today it is no longer
possible for most of us to earn even a modest wage through our
recordings.
Not that I am naively nostalgic for
the old days-- we weren't paid for that first album, either. (The record
label we were signed to at the time, Rough Trade, declared bankruptcy
before cutting us even one royalty check.) But the ways in which
musicians are screwed have changed qualitatively, from individualized
swindles to systemic ones. And with those changes, a potential end-run
around the industry's problems seems less and less possible, even for
bands who have managed to hold on to 100% of their rights and royalties,
as we have.
"Galaxie 500's 'Tugboat' was played 7,800 times on Pandora in the first quarter of 2012, for which its three songwriters were paid a collective total of 21 cents, or seven cents each."
Consider
Pandora and Spotify, the streaming music services that are becoming
ever more integrated into our daily listening habits. My BMI royalty
check arrived recently, reporting songwriting earnings from the first
quarter of 2012, and I was glad to see that our music is being listened
to via these services. Galaxie 500's "Tugboat", for example, was played
7,800 times on Pandora that quarter, for which its three songwriters
were paid a collective total of 21 cents, or seven cents each.
Spotify pays better: For the 5,960 times "Tugboat" was played there,
Galaxie 500's songwriters went collectively into triple digits: $1.05
(35 cents each).
To put this into
perspective: Since we own our own recordings, by my calculation it would
take songwriting royalties for roughly 312,000 plays on Pandora to earn
us the profit of one-- one-- LP sale. (On Spotify, one LP is equivalent to 47,680 plays.)
Or
to put it in historical perspective: The "Tugboat" 7" single, Galaxie
500's very first release, cost us $980.22 for 1,000 copies-- including
shipping! (Naomi kept the receipts)-- or 98 cents each. I no longer
remember what we sold them for, but obviously it was easy to turn at
least a couple bucks' profit on each. Which means we earned more from
every one of those 7"s we sold than from the song's recent 13,760 plays
on Pandora and Spotify. Here's yet another way to look at it: Pressing
1,000 singles in 1988 gave us the earning potential of more than 13
million streams in 2012. (And people say the internet is a bonanza for
young bands...)
To be fair, because we are
singer-songwriters, and because we own all of our rights, these
streaming services end up paying us a second royalty, each for a
different reason and each through a different channel. Pandora is
considered "non-terrestrial radio," and consequently must pay the
musicians who play on the recordings it streams, as well as the
songwriters. These musicians' royalties are collected by SoundExchange,
a non-profit created by the government when satellite radio came into
existence. SoundExchange doesn't break our earnings down by service per
song, but it does tell us that last quarter, Pandora paid a total of
$64.17 for use of the entire Galaxie 500 catalogue. We have 64 Galaxie
500 recordings registered with them, so that averages neatly to one
dollar per track, or another 33 cents for each member of the trio.
"When I started making records, the model of economic exchange was simple; now, it seems closer to financial speculation."
Pandora
in fact considers this additional musicians' royalty an extraordinary
financial burden, and they are aggressively lobbying for a new law--
it's now a bill before the U.S. Congress-- designed to relieve them of
it. You can read all about it in a series of helpful blog posts by Ben Sisario of The New York Times,
or if you prefer your propaganda unmediated, you can listen to Pandora
founder Tim Westergren's own explanation of the Orwellian Internet Radio Fairness Act.
As
for Spotify, since it is not considered radio, either of this world or
any other, they have a different additional royalty to pay. Like any
non-broadcast use of recordings, they require a license from the
rightsholder. They negotiate this individually with each record label,
at terms not made public. I'm happy to make ours public, however:
It is the going "indie" rate of .005 cents per play. (Actually, when I
do the math, that rate seems to truly pay out at .004611 cents-- I hope
someone got a bonus for saving the company four ten-thousandths of a
cent on each stream!) We didn't negotiate this, exactly; for a
band-owned label like ours, it's take it or leave it. We took it, which
means for 5,960 plays of "Tugboat", Spotify theoretically owes our
record label $29.80.
I say theoretically, because in
practice Spotify's .004611 cent rate turns out to have a lot of small,
invisible print attached to it. It seems this rate is adjusted for each
stream, according to an algorithm (not shared by Spotify, at least not
with us) that factors in variables such as frequency of play, the outlet
that channeled the play to Spotify, the type of subscription held by
the user, and so on. What's more, try as I might through the documents
available to us, I cannot get the number of plays Spotify reports to our
record label to equal the number of plays reported by the BMI.
Bottom line: The payments actually received by our label from Spotify
for streams of "Tugboat" in that same quarter, as best I can figure:
$9.18.
"Well, that's still not bad," you might
say. (I'm not sure who would really say that, but let's presume someone
might.) After all, these are immaterial goods-- it costs us nothing to
have our music on these services: no pressing, no printing, no shipping,
no file space to save a paper receipt for 25 years. All true. But immaterial goods turn out to generate equally immaterial income.
Which
gets to the heart of the problem. When I started making records, the
model of economic exchange was exceedingly simple: make something, price
it for more than it costs to manufacture, and sell it if you can. It
was industrial capitalism, on a 7" scale. The model now seems
closer to financial speculation. Pandora and Spotify are not selling
goods; they are selling access, a piece of the action. Sign on, and
we'll all benefit. (I'm struck by the way that even crowd-sourcing
mimics this "investment" model of contemporary capitalism: You buy in to
what doesn't yet exist.)
But here's the rub:
Pandora and Spotify are not earning any income from their services,
either. In the first quarter of 2012, Pandora-- the same company that
paid Galaxie 500 a total of $1.21 for their use of "Tugboat"-- reported a net loss of more than $20 million dollars. As for Spotify, their latest annual report revealed a loss in 2011 of $56 million.
Leaving aside why these companies are bothering to chisel 10,000ths
of a cent from already ridiculously low "royalties," or paying
lobbyists to work a bill through Congress that would lower those rates
even further-- let's instead ask a question they themselves might
consider relevant: Why are they in business at all?
"Pandora and Spotify are doing nothing for the business of music-- except undermining the simple cottage industry of pressing ideas onto vinyl, and selling them for more than they cost to manufacture."
The
answer is capital, which is what Pandora and Spotify have and what they
generate. These aren't record companies-- they don't make records, or
anything else; apparently not even income. They exist to attract
speculative capital. And for those who have a claim to ownership of that
capital, they are earning millions-- in 2012, Pandora's executives sold $63 million of personal stock in the company. Or as Spotify's CEO Daniel Ek has put it, "The
question of when we'll be profitable actually feels irrelevant. Our
focus is all on growth. That is priority one, two, three, four and
five."
Growth of the music business? I think not. Daniel Ek means growth of his company, i.e., its capitalization. Which
is the closest I can come to understanding the fundamental change I've
witnessed in the music industry, from my first LP in 1988 to the one I
am working on now. In between, the sale of recorded music has become
irrelevant to the dominant business models I have to contend with as a
working musician. Indeed, music itself seems to be irrelevant to these
businesses-- it is just another form of information, the same as any
other that might entice us to click a link or a buy button on a stock
exchange.
As businesses, Pandora and Spotify are
divorced from music. To me, it's a short logical step to observe that
they are doing nothing for the business of music-- except undermining
the simple cottage industry of pressing ideas onto vinyl, and selling
them for more than they cost to manufacture. I am no Luddite-- I
am not smashing iPhones or sabotaging software. In fact, I subscribe to
Spotify for $9.99 a month (the equivalent of 680,462 annual plays of
"Tugboat") because I love music, and the access it gives me to music of
all kinds is incredible.
But I have simply stopped
looking to these business models to do anything for me financially as a
musician. As for sharing our music without a business model of any kind,
that's exactly how I got into this-- we called it punk rock. Which is
why we are streaming all of our recordings, completely free, on the
Bandcamp sites we set up for Galaxie 500 and Damon & Naomi. Enjoy.
++++
And it's why Spiderlegs music has always been free to download. Getting your music into more people's hands, hearts and minds is worth more than a few cents for 1000 plays.--jef
Spiderlegs Merch (Just in time to Exploit the Holidays...)
Just click the pic and be magically transported to the Spiderlegs Store.
Post Election Commentary: Winners and Losers
Some of us don't see the 2012 election as being so much for Obama but rather so much against Romney. I voted for a 3rd (or 4th or 5th) party candidate because I do not live in a battle ground state (which is about to change soon...yay!). But this election wasn't a rubber-stamp of approval for Obama's schizophrenic policies, most of which he campaigned against in 2008. It was a complete rejection of whatever Mitt Romney threw against the wall and hoped would stick which seemed to change on a daily basis. The man stood for one thing and one thing only: He really wanted to be president. His reasons are every bit as suspect as the policies he championed one day and reversed his opinion on the next. Mitt Romney stood for "Mitt Romney for President." And the electorate, for once, saw right through him.- The Republicans underestimated that visible aspect of an obviously pandering campaign. What doesn't change is the fact that the two major parties are not ruled by conscience or ideology, but something more sinister and dangerous: corporate money. So, we are not out of the woods yet...-jef
Blackout on Corporate Crime Enforcement
Lawyers Behind Closed Doors
Put top corporate crime law enforcement officials and defense
attorneys behind closed doors for two days at a posh resort outside of
Washington, D.C.
Call it the American Conference Institute’s National Conference on the Foreign Corrupt Practices Act (FCPA).
Charge $2,000 to $4,000 per person to attend.
And for 90 percent of the conference sessions, slam the door shut on the press.
Is that any way to discuss foreign bribery in a democracy?
Probably not.
But that’s what’s happening at the Gaylord National Resort just south of Washington, D.C. later this week.
Reporters will be allowed to cover the keynote address by Justice Department Criminal Division Chief Lanny Breuer and two other sessions.
But they will not be allowed to cover twenty other sessions, including ones where top FCPA law enforcement officials will be speaking.
So, for example, Tracy Price, the assistant director of the Securities and Exchange Commission’s (SEC) FCPA unit, will speak on Friday at a session titled “FCPA Internal Controls amid Increased SEC Expectations: What Your Books and Records Need to Accomplish.”
Reporters are not allowed to cover her talk.
Sean McKessy, the SEC’s top whistleblower official, will be speaking on Thursday at a session called “Creating a Home for the Whistleblower: How to Facilitate Open Communication and Appropriately Respond to Allegations in a Bounty Hunter Environment.”
Reporters are not allowed to cover his talk.
Nathaniel B. Edmonds, assistant chief at the Criminal Division’s Fraud Section will be speaking at a session called “Friend or Foe?: A Dissection of a Monitorship from Start to Finish.”
Reporters are not allowed to cover his talk.
James M. Koukios is another assistant chief at the Fraud Section.
He’ll be speaking at a session titled “Where Companies Go Wrong on FCPA Compliance: What Not To Do and Lessons Learned from the Most Costly Mistakes.”
Reporters are not allowed to cover his talk.
Jason Jones, another assistant chief of the Fraud Section, will be speaking at a session titled “10 Trip Wires to Avoid When Conducting an FCPA Internal Investigation.”
Reporters are not allowed to cover his talk.
The American Bar Association (ABA) has never prohibited press from covering their sessions – including last month when the ABA held it’s Foreign Corrupt Practices Act 2012 Conference at the Westin Hotel in Georgetown.
In fact, according to the ABA’s Earnestine Murphy, the ABA has an open meetings policy – which means that all conference sessions – with the exception of business meetings – are open to the media.
Mike Koehler, who runs the FCPA Professor blog and is an Assistant Professor of Law at Southern Illinois University, recently questioned the wisdom of putting law enforcement officials and corporate defense attorneys behind closed doors to discuss FCPA policy.
“Should public servants be allowed to speak at private conferences and events that charge thousands of dollars to attend?” Koehler asked. “Should public servants be used as pawns by corporate conference organizers to boost attendance and thus revenue? Should the enforcement agencies release all speeches, comments and remarks, including answers to questions posed by the audience? Do small to medium size enterprises have the resources to attend such events?”
Call it the American Conference Institute’s National Conference on the Foreign Corrupt Practices Act (FCPA).
Charge $2,000 to $4,000 per person to attend.
And for 90 percent of the conference sessions, slam the door shut on the press.
Is that any way to discuss foreign bribery in a democracy?
Probably not.
But that’s what’s happening at the Gaylord National Resort just south of Washington, D.C. later this week.
Reporters will be allowed to cover the keynote address by Justice Department Criminal Division Chief Lanny Breuer and two other sessions.
But they will not be allowed to cover twenty other sessions, including ones where top FCPA law enforcement officials will be speaking.
So, for example, Tracy Price, the assistant director of the Securities and Exchange Commission’s (SEC) FCPA unit, will speak on Friday at a session titled “FCPA Internal Controls amid Increased SEC Expectations: What Your Books and Records Need to Accomplish.”
Reporters are not allowed to cover her talk.
Sean McKessy, the SEC’s top whistleblower official, will be speaking on Thursday at a session called “Creating a Home for the Whistleblower: How to Facilitate Open Communication and Appropriately Respond to Allegations in a Bounty Hunter Environment.”
Reporters are not allowed to cover his talk.
Nathaniel B. Edmonds, assistant chief at the Criminal Division’s Fraud Section will be speaking at a session called “Friend or Foe?: A Dissection of a Monitorship from Start to Finish.”
Reporters are not allowed to cover his talk.
James M. Koukios is another assistant chief at the Fraud Section.
He’ll be speaking at a session titled “Where Companies Go Wrong on FCPA Compliance: What Not To Do and Lessons Learned from the Most Costly Mistakes.”
Reporters are not allowed to cover his talk.
Jason Jones, another assistant chief of the Fraud Section, will be speaking at a session titled “10 Trip Wires to Avoid When Conducting an FCPA Internal Investigation.”
Reporters are not allowed to cover his talk.
The American Bar Association (ABA) has never prohibited press from covering their sessions – including last month when the ABA held it’s Foreign Corrupt Practices Act 2012 Conference at the Westin Hotel in Georgetown.
In fact, according to the ABA’s Earnestine Murphy, the ABA has an open meetings policy – which means that all conference sessions – with the exception of business meetings – are open to the media.
Mike Koehler, who runs the FCPA Professor blog and is an Assistant Professor of Law at Southern Illinois University, recently questioned the wisdom of putting law enforcement officials and corporate defense attorneys behind closed doors to discuss FCPA policy.
“Should public servants be allowed to speak at private conferences and events that charge thousands of dollars to attend?” Koehler asked. “Should public servants be used as pawns by corporate conference organizers to boost attendance and thus revenue? Should the enforcement agencies release all speeches, comments and remarks, including answers to questions posed by the audience? Do small to medium size enterprises have the resources to attend such events?”
The Deficit Hawk Industry
In a weak economy, there are more important issues for us to spend money on than the deficit.--jef
The gang for gutting Social Security and Medicare (aka “The
Campaign to Fix the Debt”) are running in high gear. During the long
election campaign they gathered dollars, corporate CEOs and washed up
politicians for a full-fledged push in the final months of the year.
They are hoping that the hype around the budget standoff (aka “fiscal
cliff”) can be used for a grand bargain that eviscerates the country’s
two most important social programs, Social Security and Medicare.
They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.
It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.
As we all know, the large budget deficits of the last four years are entirely due to the economic downturn caused by the collapse of the housing bubble. The budget deficit was slightly over 1.0 percent of GDP in 2007 and the Congressional Budget Office (CBO) projections showed it remaining low for the near-term future. The origin of the large deficits of the last few years is not a debatable point among serious people, even though talk of “trillion dollar deficits, with a ‘t’” is very good for scaring the children.
However, the big stick for the deficit hawks was their story of huge deficits in the longer term. They attributed these to the rising cost of “entitlements,” which are known to the rest of us as Social Security, Medicare, and Medicaid.
While they like to push the notion that the aging of the population threatened to impose an unbearable burden on future generations, the reality is that most of the horror story of huge deficits was driven by projections of exploding private sector health care costs. Since Medicare and Medicaid mostly pay for private sector health care, an explosion in private sector health care costs would eventually make these programs unaffordable.
As some of us have long pointed out, there are serious grounds for questioning the plausibility of projections that the health care sector would rise to 30 or 40 percent of GDP over the rest of the century. Recently a paper from the Federal Reserve Board documented this argument in considerable detail.
Even more important than the professional argument over health care cost projections is the recent trend in health care costs. While the CBO projections assume that age-adjusted health care costs rise considerably more rapidly than per capita income, in the last four years they have been roughly keeping pace with per capita income.
In fact, in the last year nominal spending on health care services, the sector that comprises almost two-thirds of health care costs, rose by just 1.7 percent. This is far below the rate of nominal GDP growth over this period, which was more than 4.0 percent. While at least some of this slowing in health care costs is undoubtedly due to the downturn, it is hard to believe that it is not at least partially attributable to a slower underlying rate of health care cost growth.
CBO and other budget forecasters can ignore economic reality for a period of time (they ignored the housing bubble until after its collapse wrecked the economy), but if it continues, at some point they will have to incorporate the trend of slower health care cost growth into their projections. When this happens, the really scary long-term deficit numbers will disappear.
A projection that assumes that health care costs will only rise as a result of the aging of the population, and otherwise move in step with per capita income, will lop tens of trillions of dollars off the most commonly cited long-term deficit projections. It would cost some deficit hawks, like National Public Radio, more than $100 trillion of their long-term deficit story. This would be a real disaster for the deficit hawk industry.
This is why the Campaign to Fix the Debt and the rest of the deficit hawk industry will be operating at full speed at least until a budget deal is reached over the current impasse. If CBO adjusts its long-term health care cost projections downward then their whole rationale for gutting Social Security and Medicare will disappear. Now that is really a crisis.
They made a point of keeping this plan out of election year politics because they know it is a huge loser with the electorate. People across the political and ideological spectrums strongly support these programs and are opposed to cuts. Politicians who advocated cuts would have been likely losers on Election Day. But now that the voters are out of the way, the Wall Street gang and the CEOs see their opportunity.
It is especially important that they act now, because one of the pillars of their deficit horror story could be collapsing. Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high level policy positions.
As we all know, the large budget deficits of the last four years are entirely due to the economic downturn caused by the collapse of the housing bubble. The budget deficit was slightly over 1.0 percent of GDP in 2007 and the Congressional Budget Office (CBO) projections showed it remaining low for the near-term future. The origin of the large deficits of the last few years is not a debatable point among serious people, even though talk of “trillion dollar deficits, with a ‘t’” is very good for scaring the children.
However, the big stick for the deficit hawks was their story of huge deficits in the longer term. They attributed these to the rising cost of “entitlements,” which are known to the rest of us as Social Security, Medicare, and Medicaid.
While they like to push the notion that the aging of the population threatened to impose an unbearable burden on future generations, the reality is that most of the horror story of huge deficits was driven by projections of exploding private sector health care costs. Since Medicare and Medicaid mostly pay for private sector health care, an explosion in private sector health care costs would eventually make these programs unaffordable.
As some of us have long pointed out, there are serious grounds for questioning the plausibility of projections that the health care sector would rise to 30 or 40 percent of GDP over the rest of the century. Recently a paper from the Federal Reserve Board documented this argument in considerable detail.
Even more important than the professional argument over health care cost projections is the recent trend in health care costs. While the CBO projections assume that age-adjusted health care costs rise considerably more rapidly than per capita income, in the last four years they have been roughly keeping pace with per capita income.
In fact, in the last year nominal spending on health care services, the sector that comprises almost two-thirds of health care costs, rose by just 1.7 percent. This is far below the rate of nominal GDP growth over this period, which was more than 4.0 percent. While at least some of this slowing in health care costs is undoubtedly due to the downturn, it is hard to believe that it is not at least partially attributable to a slower underlying rate of health care cost growth.
CBO and other budget forecasters can ignore economic reality for a period of time (they ignored the housing bubble until after its collapse wrecked the economy), but if it continues, at some point they will have to incorporate the trend of slower health care cost growth into their projections. When this happens, the really scary long-term deficit numbers will disappear.
A projection that assumes that health care costs will only rise as a result of the aging of the population, and otherwise move in step with per capita income, will lop tens of trillions of dollars off the most commonly cited long-term deficit projections. It would cost some deficit hawks, like National Public Radio, more than $100 trillion of their long-term deficit story. This would be a real disaster for the deficit hawk industry.
This is why the Campaign to Fix the Debt and the rest of the deficit hawk industry will be operating at full speed at least until a budget deal is reached over the current impasse. If CBO adjusts its long-term health care cost projections downward then their whole rationale for gutting Social Security and Medicare will disappear. Now that is really a crisis.
Sunday, November 11, 2012
Roubini: Global Economy faces uncertain Future--including possible double dip--in 2013
Roubini: The Global Economy faces an uncertain Future in 2013
The American Economist Nouriel Roubini (Dr. Doom) predicted an uncertain scenario for the world economy in 2013, a year in which Europe could deepen its crisis, while China slow their growth and United States would fall into a situation of stagnation. The Economist was in the Argentina and during his talk highlighted as a favorable factor in the situation of globalization that promotes sharing and investments.
Nobel Prize in economics 2009 and famous for having predicted the crisis of 2007, Roubini spoke yesterday at the World Business Forum which took place in Buenos Aires last week. The American economist born in Turkey also drew attention to the risk posed the possibility of a confrontation between Israel and Iran for the world economy and that match the rest of its forecasts, it set a 'perfect storm' next year.
In the United States, the latest economic data – including a weak labor market – confirm that growth is anemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6% annual gain recorded in January-June. And, given America’s political polarization and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether President Barack Obama is reelected in November. On the contrary, we should expect agreement only on the path of least political resistance: avoidance of tough fiscal choices until the bond vigilantes eventually wake up, spike long rates, and force fiscal adjustment on the political system. - in project-syndicate
"It became clear in 2012 that this game of `kicking the can down the road` is a zero-sum game," he wrote in an article published on the Financial Times website "By 2013 at the latest, but possibly already in 2012, a perfect storm of a double-dip recession in the U.S., a disorderly scenario in the euro zone and a hard landing in China could materialize," he added - via CNBC
I've been reading and listening to Dr. Doom (Roubini), Paul C. Roberts, and Gerald Celente, among others, since 2005, and I credit them totally that my wife and I were well aware ahead of time that the economic crisis which hit us in late 2007 was coming. Not like we had an overwhelming investment portfolio to secure, but our lives didn't get turned upside down by it and we didn't lose any money because of it, and we were able to warn friends and family it was coming. Whether or not they took us seriously or thought we were crazy is up for debate, but we still listen to them, and if Roubini says another one is coming, I believe him and you should too.--jef
The American Economist Nouriel Roubini (Dr. Doom) predicted an uncertain scenario for the world economy in 2013, a year in which Europe could deepen its crisis, while China slow their growth and United States would fall into a situation of stagnation. The Economist was in the Argentina and during his talk highlighted as a favorable factor in the situation of globalization that promotes sharing and investments.
Nobel Prize in economics 2009 and famous for having predicted the crisis of 2007, Roubini spoke yesterday at the World Business Forum which took place in Buenos Aires last week. The American economist born in Turkey also drew attention to the risk posed the possibility of a confrontation between Israel and Iran for the world economy and that match the rest of its forecasts, it set a 'perfect storm' next year.
Roubini: "My prediction for the perfect storm is not this year but 2013 , because everybody is kicking the can down the road , we going to have a problem in the US after the election if we do not resolve our fiscal problem , China is overheating and at fix investment of 60 percent of GDP eventually it going to get a hard landing, The Europeans are pushing their problems but Greece Ireland Portugal need to restructure their debt they are insolvent that's going to be on 2013 , Japan is going to shorten its stimulus it is going to slack again in a year from now , so I se every country in the world trying to push their problems to the future , we started with private debt public debt super national debt we are kicking the can down the road and eventually all this is going to come to a an end in 2013." - in CNBC
In the United States, the latest economic data – including a weak labor market – confirm that growth is anemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6% annual gain recorded in January-June. And, given America’s political polarization and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether President Barack Obama is reelected in November. On the contrary, we should expect agreement only on the path of least political resistance: avoidance of tough fiscal choices until the bond vigilantes eventually wake up, spike long rates, and force fiscal adjustment on the political system. - in project-syndicate
"It became clear in 2012 that this game of `kicking the can down the road` is a zero-sum game," he wrote in an article published on the Financial Times website "By 2013 at the latest, but possibly already in 2012, a perfect storm of a double-dip recession in the U.S., a disorderly scenario in the euro zone and a hard landing in China could materialize," he added - via CNBC
+++++++
I've been reading and listening to Dr. Doom (Roubini), Paul C. Roberts, and Gerald Celente, among others, since 2005, and I credit them totally that my wife and I were well aware ahead of time that the economic crisis which hit us in late 2007 was coming. Not like we had an overwhelming investment portfolio to secure, but our lives didn't get turned upside down by it and we didn't lose any money because of it, and we were able to warn friends and family it was coming. Whether or not they took us seriously or thought we were crazy is up for debate, but we still listen to them, and if Roubini says another one is coming, I believe him and you should too.--jef
What's with the larger than Normal High Level Resignations, lately?
NEW: BBC General Director George Entwistle resigns over elitist child sex ring allegations
CIA director David Petraeus resigns in wake of extramarital affair:
[link to www.thestar.com]
Hillary Clinton stepping down:
[link to theweek.com]
Eric Holder (Attorney General):
[link to washington.cbslocal.com]
Frank Stronach steps down from Magna board chairmanship:
[link to www.theglobeandmail.com]
Roger Ortiz’ resignation official, Cameron Co. searches for replace…
[link to www.valleycentral.com]
Lockheed Martin’s incoming CEO resigns; replacement named:
[link to www.latimes.com]
PetroShale Announces Resignation of Director:
[link to www.stockhouse.com]
And at least 6 high level resignations in Canada alone.
CIA director David Petraeus resigns in wake of extramarital affair:
[link to www.thestar.com]
Hillary Clinton stepping down:
[link to theweek.com]
Eric Holder (Attorney General):
[link to washington.cbslocal.com]
Frank Stronach steps down from Magna board chairmanship:
[link to www.theglobeandmail.com]
Roger Ortiz’ resignation official, Cameron Co. searches for replace…
[link to www.valleycentral.com]
Lockheed Martin’s incoming CEO resigns; replacement named:
[link to www.latimes.com]
PetroShale Announces Resignation of Director:
[link to www.stockhouse.com]
And at least 6 high level resignations in Canada alone.
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