The Age of Austerity

States Brace for Coming Cuts
by SHAMUS COOKE


The Great Recession has quietly devastated public services on a state-by-state basis, with Republican and Democratic governors taking turns leading the charge. Public education has been decimated, as well as health care, welfare, and the wages and benefits of public sector workers. The public sector itself is being smashed. Since the recession began, states have made combined austerity cuts of at least $337 billion, according to the Center of Budget and Policy Priorities

The 2012-2013 budget deficits for 34 states resulted in $55 billion in cuts, according to the Center of Budget and Policy Priorities. The coming budgets for 2013-2014 that begins on July 1st is becoming clear as well, and the deficits are rolling in by the billions: Connecticut, Minnesota, Maryland, New York, Oregon, Washington, and many others have large deficits projected.

You’d expect after years of austerity cuts to public services, state politicians would think of new ways to raise revenue from those who can afford it — the wealthy and corporations. Not so. The cuts that began as a consequence of the 2008 recession are set to continue; raising revenue from the wealthy is “off the table” for Republicans and Democrats alike.
The pattern of budget cuts has revealed that the age-old distinction between Republican and Democrat has evaporated on the state level. The state budget trends — what’s getting funded and what’s not — are similarly aligned across the country. Both parties have merged their state-level agendas into a singular focus on “economic growth,” a bi-partisan euphemism meaning “corporate profits.”

Below is the bi-partisan funding trends for the states that began with the 2008 recession and continue to this day:

1) The Attack on Public Employees and Pension “Reform”

It wasn’t long ago that everyone understood that the states’ budget crises was caused in part by the recession, itself caused by the big banks and greedy corporations, and in part by the politicians continuing willingness to lower taxes on the rich. Now the corporate media and politicians have re-written history: suddenly it’s “greedy” public workers and their “lavish” pensions that are bankrupting the states. Two years ago it was the health care of public employees that was bankrupting the states, which resulted in large cuts to workers in many states.

The pre-recession pension system was working fine, but it, too, suffered under the bank-caused financial crisis; pension returns sank and right-wing economists projected ruin for the states in the future (they conveniently assumed that recession era rates would continue forever, thus under-funding the system).

Democratic governors are now as eager as their Republican counterparts to destroy the pensions of public employees. Democratic politicians in Oregon, Washington, California, New Jersey, Illinois, Rhode Island, New Hampshire, Maryland, Massachusetts, and several other states are leading the charge to erode the last bastion of retirement security for working people, while continuing to lay off public employees by the thousands. This national shrinkage of state governments is a long-standing right-wing dream: the smaller the state, the greater the “growth opportunities” for corporations that take over privatized public services and the lower their taxes since a smaller state requires less revenue for operating expenses.

2) Education Reform

The National Governors Association (NGA) spoke for both political parties when announcing a renewed focus on education funding for the states during the annual “state of the states” address. The funding is necessary because schools across the country are expecting an influx of students, while school districts everywhere have been starved funds by the ongoing austerity cuts; the system has been literally crumbling. But the new funding is to be used for the undermining and destruction of public education, since it is based on Obama’s pro-corporate Race to the Top education “reform” where charter schools replace public schools.

Democrats and Republicans are in complete agreement over Obama’s education policy, which closes “failing schools,” (those in poor neighborhoods), opens privately run, non-union charter schools, and fires “bad teachers,” (typically those who teach poor students). The whole system is based on standardized testing, which poorer students will spend most of their education preparing for, (those who don’t drop out from sheer boredom). Bi-partisan education reform targets teacher unions while privatizing education — the Democrats have adopted the ideas from the right-wing think tanks of the 1990s.

3) Raising Revenue – But Not From the Wealthy or Corporations

Many states have implemented — or are planning to implement — a variety of taxes that disproportionally affect working and poor people, including increased sales taxes, alcohol, tobacco and other “sin” taxes, not to mention increases in different fees, from state parks to driver registration.

At the same time that these taxes have been upped, a consistent clamor has been raised by the media and politicians to lower the taxes for corporations, give them new subsidies or “freeze” their already-low taxes so that future tax increases will be impossible. In Oregon the Democratic governor declared a “special session” emergency in order to ensure that NIKE’s super low tax status would be frozen in place for decades, outside the reach of the public, which might want to raise corporate taxes to fund public services.

Democrat and Republican controlled states are equally competing for the adoration of corporations by lavishing a never-ending flow of taxpayer money on them, while “guaranteeing” them “investment security,” i.e., promising low taxes and an open spigot of taxpayer money. This is the basis for several states implementing “right to work” laws that target unions for destruction, while also attempting to “revamp the tax code,” which is a euphemism for lowering corporate taxes.

4) Welfare Reform: Attacking the Safety Net

Waging war against the safety net is like picking a fight with road kill — the states’ safety net is already disfigured beyond recognition, but the bi-partisan assault nevertheless continues. Bill Clinton started welfare “reform” as president, and the 2008 Great Recession accelerated the attack on those in poverty. The year 2011 was a devastating one for welfare, now called Temporary Assistance to Needy Families (TANF).

According to the Center on Budget and Policy Priorities:

In 2011, states implemented some of the harshest cuts in recent history for many of the nation’s most vulnerable families with children who are receiving assistance through [TANF] … The cuts affect 700,000 low-income families that include 1.3 million children; these families represent over one-third of all low-income families receiving TANF nationwide.

But these TANF “reforms” continue, to the detriment of the neediest. Newly released budgets in several states — including California and Oregon — further tighten the program, a relentless boa-like constriction that’s already suffocated millions of the country’s poorest citizens. Typically TANF reform either lowers the monthly payment, shortens the time one can receive benefits, or raises the standards for staying in the program.

Before the giant TANF cuts in 2011, the program was already shrunken such that TANF only assisted 28 families for every 100 in poverty — the ludicrous definition of “poverty” being a family of four that makes only $22,000 or less.

There is a direct link between the assault on TANF and the rising poverty levels in the United States. Cutting TANF in a time of mass unemployment means consciously consigning millions of families to grinding poverty, hunger, homelessness, and the many other barbarisms associated with extreme poverty.

It wasn’t long ago that the Democrats understood that the government can and should create jobs, especially during a recession. But now the Democratic Party has fully adopted the economics of Reaganism. As a result, the only “job creators” now recognized are the corporations. This bi-partisan agreement not to tax the rich and use the revenue for public spending to create jobs — hiring more teachers, firefighters, roads and parks workers, etc. — is unnecessarily prolonging the job crisis, ensuring more years of deficits and a deeper gouging of the public sector.

These cuts are having a devastating effect on public sector unions, the last bastion of union strength in the country. These unions are being weakened to such an extent that stripping them of their right to collectively bargain — the nail in the coffin — becomes a real possibility. No state is safe from this threat.

If unions don’t unite with community groups to demand that public services be fully funded by taxing the wealthy and corporations, the cuts will continue, communities will feel helpless, inequality will continue to spiral out of control, and working people will be further subjected to the policies of the 1%, now implemented in chorus by Republicans and Democrats alike. But, of course, this means that the unions will have to break with the suicidal strategy of relying on the Democrats for handouts. Time and again the Democrats have demonstrated their willingness to sacrifice the needs of working people in order to curry favor with the rich and corporations, their greatest benefactors when it comes to election campaign contributions.

It Has Happened Here

February 7, 2013 | Paul Craig Roberts 


the police state is real

The Bush regime’s response to 9/11 and the Obama regime’s validation of this response have destroyed accountable democratic government in the United States. So much unaccountable power has been concentrated in the executive branch that the US Constitution is no longer an operable document.

The response to 9/11 was to create an open-ended “war on terror” and a police state. It is extraordinary that so many Americans believe that “it can’t happen here” when it already has.

We have had a decade of highly visible evidence of the construction of a police state: the PATRIOT Act, illegal spying on Americans in violation of the Foreign Intelligence Surveillance Act, the initiation of wars of aggression–war crimes under the Nuremberg Standard–based on intentional lies, the Justice Department’s concocted legal memos justifying the executive branch’s violation of domestic and international laws against torture, the indefinite detention of US citizens in violation of the constitutionally protected rights of habeas corpus and due process, the use of secret evidence and secret “expert witnesses” who cannot be cross-examined against defendants in trials, the creation of military tribunals in order to evade federal courts, secret legal memos giving the president authority to launch preemptive cyber attacks on any country without providing evidence that the country constitutes a threat, and the Obama regime’s murder of US citizens without evidence or due process.

As if this were not enough, the Obama regime now creates new presidential powers by crafting secret laws, refusing to disclose the legal reasoning on which the asserted power rests. In other words, laws now originate in secret executive branch memos and not in acts of Congress. Congress? We don’t need no stinking Congress.
Despite laws protecting whistleblowers and the media and the US Military Code which requires soldiers to report war crimes, whistleblowers such as CIA agent John Kiriakou, media such as Julian Assange, and soldiers such as Bradley Manning are persecuted and prosecuted for revealing US government crimes. http://www.informationclearinghouse.info/article33804.htm The criminals go free, and those who report the crimes are punished.

The justification for the American police state is the “war on terror,” a hoax kept alive by the FBI’s “sting operations.” Normally speaking, a sting operation is when a policewoman poses as a prostitute in order to ensnare a “John,” or a police officer poses as a drug dealer or user in order to ensnare drug users or dealers. The FBI’s “sting operation” goes beyond these victimless crimes that fill up US prisons.

The FBI’s sting operations are different. They are just as victimless as no plot ever happens, but the FBI doesn’t pose as bomb makers for terrorists who have a plot but lack the weapon. Instead, the FBI has the plot and looks for a hapless or demented person or group, or for a Muslim enraged over the latest Washington insult to him and/or his religion. When the FBI locates its victim, its agents approach the selected perpetrator pretending to be Al-Qaeda or some such and ply the selected perpetrator with money, the promise of fame, or threats until the victim signs on to the FBI’s plot and is arrested.

Trevor Aaronson in his book, The Terror Factory: Inside the FBI’s War on Terrorism, documents that the FBI has so far concocted 150 “terrorist plots” and that almost all of the other “terrorist cases” are cases unrelated to terrorism, such as immigration, with a terror charge tacked on. http://www.youtube.com/watch?feature=player_embedded&v=LpTOrNQ3G9Q#! The presstitute American media doesn’t ask why, if there is so much real terrorism requiring an American war against it, the FBI has to invent and solicit terrorist plots.

Neither does the media inquire how the Taliban, which resists the US invasion and attempted occupation of Afghanistan, fighting the US superpower to a standstill after 11 years, came to be designated as terrorists. Nor does the US presstitute media want to know how tribesmen in remote regions of Pakistan came to be designated as “terrorists” deserving of US drone attacks on the citizens, schools and medical clinics of a country with which the US is not at war.

Instead the media protects and perpetrates the hoax that has given America the police state. The American media has become Leni Riefenstahl, as has Hollywood with the anti-Muslim propaganda film, Zero Dark Thirty. This propaganda film is a hate crime that spreads Islamophobia. Nevertheless, the film is likely to win awards and to sink Americans into a hundred-year war in the name of fighting the Muslim threat.

What I learned many years ago as a professor is that movies are important molders of Americans‘ attitudes. Once, after giving a thorough explanation of the Russian Revolution that led to communist rule, a student raised his hand and said: “That’s not the way it happened in the movie.”

At first I thought he was making a witty joke, but then I realized that he thought that the truth resided in the movie, not in the professor who was well versed in the subject. Ever since I have been puzzled how the US has survived for so long, considering the ignorance of its population. Americans have lived in the power of the US economy. Now that this power is waning, sooner or later Americans will have to come to terms with reality.

It is a reality that will be unfamiliar to them.

Some Americans claim that we have had police states during other wartimes and that once the war on terror is won, the police state will be dismantled. Others claim that government will be judicious in its use of the power and that if you are doing nothing wrong you have nothing to fear.

These are reassurances from the deluded. The Bush/Obama police state is far more comprehensive than Lincoln’s, Wilson’s, or Roosevelt’s, and the war on terror is open-ended and is already three times longer than World War II. The Police State is acquiring “squatter’s rights.”

Moreover, the government needs the police state in order to protect itself from accountability for its crimes, lies, and squandering of taxpayers‘ money. New precedents for executive power have been created in conjunction with the Federalist Society which, independent of the war on terror, advocates the “unitary executive” theory, which claims the president has powers not subject to check by Congress and the Judiciary. In other words, the president is a dictator if he prefers to be.

The Obama regime is taking advantage of this Republican theory. The regime has used the Republican desire for a strong executive outside the traditional checks and balances together with the fear factor to complete the creation of the Bush/Cheney police state.

As Lawrence M. Stratton and I documented in our book, The Tyranny Of Good Intentions, prior to 9/11 law as a shield of the people was already losing ground to law as a weapon in the hands of the government. If the government wanted to get you, there were few if any barriers to a defendant being framed and convicted, least of all a brainwashed jury fearful of crime.

I cannot say whether the US justice system has ever served justice better than it has served the ambition of prosecutors. Already in the 1930s and 1940s US Supreme Court Justice George Sutherland and US Attorney General Robert Jackson were warning against prosecutors who sacrifice “fair dealing to build up statistics of success.” Certainly it is difficult to find in the ranks of federal prosecutors today Jackson’s “prosecutor who tempers zeal with human kindness, who seeks truth and not victims, who serves the law and not factional purposes, and who approaches his task with humility.”

Just consider the wrongful conviction of Alabama’s Democratic governor, Don Siegelman by what apparently was a Karl Rove plot to rid the South of Democratic governors. The “Democratic” Obama regime has not investigated this false prosecution or given clemency to its innocent own. Remember how quickly Bush removed the prison sentence of Cheney’s operative who revealed the name of a CIA undercover agent? The Democrats are a cowed and cowardly political party, fearful of justice, and as much a part of the corrupt police state as the Republicans.

Today the purpose of a prosecution is to serve the prosecutor’s career and that of the party that appoints him or her. A prosecutor’s career is served by high conviction rates, which require plea bargains in which the evidence against a defendant is never tested in court or before a jury, and by high profile cases, which can launch a prosecutor into a political career, as Rudy Giuliana achieved with his frame-up of Michael Milken.

Glenn Greenwald explained how Internet freedom advocate Aaron Swartz was driven to his death by the ambition of two federal prosecutors, US Attorney Carmen Ortiz and Assistant US Attorney Stephen Heymann, who had no aversion to destroying an innocent person with ridiculous and trumped-up charges in order to advance their careers. http://www.guardian.co.uk/commentisfree/2013/jan/16/ortiz-heymann-swartz-accountability-abuse

It is rare for a prosecutor to suffer any consequence for bringing false charges, for consciously using and even paying for false evidence, and for lying to judge and jury. As prosecutors are rarely held accountable, they employ illegal and unethical methods and routinely abuse their power. As judges are mainly concerned with clearing their court dockets, justice is rarely served in America, which explains why the US has not only a larger percentage of its citizens in prison than any other country on earth, but also the largest absolute number of prisoners. The US actually has more of its citizens in prison than “authoritarian” China which has a population four times larger than the US. The US, possibly the greatest human rights abuser in history, is constantly bringing human rights charges against China. Where are the human rights charges against Washington?

In America the collapse of law has gone beyond corrupt prosecutors and their concocted false prosecutions. Unless it needs or desires a show trial, a police state does not need prosecutors and courts. By producing legal memos that the president can both throw people into prison without a trial and execute them without a trial simply by stating that some official in the executive branch thinks the person has a possible or potential connection to terrorism, tyranny’s friends in the Justice (sic) Department have dispensed with the need for courts, prosecutors and trials.The Bush/Obama regime has made the executive branch judge, juror, and executioner. All that is needed is an unproven assertion by some executive branch official. Here we have the epitome of evil.

Evidence is no longer required for the president of the US to imprison people for life or to deprive them of their life. A secret Justice Department memo has been leaked to NBC News that reveals the tyrannical reasoning that authorizes the executive branch to execute American citizens on the basis of belief alone without the requirement of evidence that they are terrorists or associated with terrorists. http://openchannel.nbcnews.com/_news/2013/02/04/16843014-exclusive-justice-department-memo-reveals-legal-case-for-drone-strikes-on-americans?lite

In “freedom and democracy” America, innocent until proven guilty is no longer the operative legal principle. If the government says you are guilty, you are. Period. No evidence required for your termination. Even Stalin pretended to have evidence.

The United States government is working its way step by step toward the determination that any and every critic of the government is guilty of providing “aid and comfort” to Washington’s “terrorist enemies,” which includes the elected Hamas government in Gaza. The only critics exempted from this rule-in-the-making are the neoconservatives who criticize the US government for being too slow to throttle both its critics and “anti-semites,” such as former US President Jimmy Carter, who criticize the Israeli government’s illegal appropriation of Palestinian lands. Most of Palestine has been stolen by Israel with Washington acquiesce and aid. Therefore, nothing is left for a “two-state solution.”

There is no doubt whatsoever that the Israeli government’s theft of Palestine is illegal; yet, Washington, on which Israel is totally dependent, does nothing about law. Law, we don’t need no stinking law.” Washington has might. Might is right. Get used to it.

Not only for Palestinians has law ceased to exist, but also for Americans, and for Washington’s NATO puppets in the UK and Europe, pitiful remnants of once great nations now complicit in Washington’s crimes against humanity. The Open Society Justice Initiative, a NGO based in New York, has issued a report that documents that 54 governments are involved in Washington’s rendition and torture program. Twenty-five of the governments that help Washington to kidnap, disappear, and torture people are European. http://www.guardian.co.uk/world/2013/feb/05/cia-rendition-report-uk-court

The opening decade of the 21st century has seen the destruction of all the law that was devised to protect the innocent and the vulnerable since the rise of the now defunct moral conscience of the West. The West’s moral conscience never applied outside of itself. What happened to people in Europe’s colonies and to native inhabitants of the US and Australia is a very different story.

Nevertheless, despite its lack of coverage to the powerless, the principle of the rule of law was a promising principle. Now America under Bush and Obama, two peas of the same pod, has abandoned the principle itself.

Glenn Greenwald writes that “the most extremist power any political leader can assert is the power to target his own citizens for execution without any charges or due process, far from any battlefield. The Obama administration has not only asserted exactly that power in theory, but has exercised it in practice.” http://www.informationclearinghouse.info/article33847.htm

This is the power of a dictator. That Saddam Hussein and Muammar Gaddafi were said to have this power was part of their demonization as “brutal dictators,” a justification for overthrowing their governments and murdering the dictators and their supporters.

Ironic, isn’t it, that the president of the United States now murders his political opponents just as Saddam Hussein murdered his. How long before critics move from the no-fly list to the extermination list?

Corpocrisy: The Systematic Betrayal of American Workers

Monday, February 4, 2013 by Common Dreams

by Paul Buchheit

Free market idealists argue that capitalism works for anyone with a little initiative and a willingness to work hard. That might be true if job opportunities were available to everyone. But the facts reveal a lack of opportunity, largely because the very system of capitalism that's supposed to work for everyone is betraying its most productive members.

It's a step-by-step process of hypocrisy disguised as free enterprise:

1. Let the public pay for the research.

Since World War 2 our federal government has played the dominant role in the research of new technologies, with an emphasis on the long-term basic research that painstakingly perfects design while not yet producing revenue. Corporate R&D, on the other hand, is heavy on the profit-making late stages of development.

Government has contributed significantly to the development of today's most modern technologies. Business has taken full advantage. Even during the frenetic growth of the 1990s, industry funding for computer research declined dramatically while government research funding continued to climb. As of 2009 universities were still receiving ten times more science & engineering funding from government than from industry.

2. Use the publicly-funded technologies to double profits in 8 years.

From 2003 to 2011 total corporate profits more than doubled from $900 billion to almost $2 trillion.

A big part of that is the financial industry, which has adapted the (nationally built) Internet to fashion trillion-dollar trading schemes. Up until 1985 financial firms never earned more than 16 percent of domestic corporate profits. Their share recently reached 41 percent.

3. Use the recession as an excuse to cut taxes in half.

For the twenty years prior to the 2008 recession, corporations paid an average annual rate of 22.5% in federal taxes. Since then the average has been 10%.

4. Quietly hoard all the excess money.

Anywhere from $2.2 trillion to $3.4 trillion in cash is being held by non-financial corporations, who have chosen to fatten stockholders rather than invest in new production facilities and the employees needed to make them profitable.

Once again, the financial industry leads the way. Just 12 large banks hold 69 percent of industry assets, close to $8 trillion. But they're not making their money available to consumers or small businesses. According to the Federal Reserve Bank of Dallas, community banks, which hold less than one-fifth of industry assets, provide over half of all small business loans.

5. Pay existing workers what they earned in 1970.

Less, actually. Average real wages were $17.42 in 2007, down from $19.34 in 1972 (based on 2007 dollars). Wages as a percentage of the economy, at 44% of GDP, are at an all-time low.

Jobs that remain are increasingly low-wage positions. Apple is a good example of the race to the bottom for wages, with an estimated $420,000 profit per employee and a $12 per hour pay rate for its store workers.

6. Eliminate all the other people who helped increase productivity.

Not only are "job creators" failing to create jobs with their cash hoards, but they're also cutting jobs in order to 'streamline' their operations. Evidence comes from The Nation, Market Watch, and Business Insider.

-- Verizon, which made $38 billion in 2008-11 and paid no tax, cut 41,100 jobs.
-- AT&T, which made $9 billion in 20011 and paid no tax, cut 54,000 jobs.
-- Merck, which made $34 billion in 2008-11 and paid a 7% tax, cut 13,000 jobs.

Other leading job-cutters:

-- Citigroup, which made a $28 billion profit in 2010-11 and paid no tax.
-- Boeing, which made $15 billion in profits in 2008-11 and paid no tax.
-- IBM, which made $75 billion in profits in 2008-11 and paid less than 2% in taxes.
-- HP, which $40 billion in profits in 2008-11 and paid an 11% tax.
-- Pepsico, which made a $10 billion profit in 2011 and paid a 6.3% tax.
-- Proctor & Gamble, which made almost $60 billion in profits in 2008-11 and paid 11% in taxes.
-- Google, which avoided about $2 billion in 2011 taxes by shifting revenue to a Bermuda tax haven.

7. Ignore the facts.

And do nothing to address the mistreatment of American workers. CEOs, Congress, and the media are all skilled at this final step of betrayal.

Chilling Legal Memo From Obama DOJ Justifies Assassination of US Citizens

Tuesday, February 5, 2013 by The Guardian
The president's partisan lawyers purport to vest him with the most extreme power a political leader can seize
by Glenn Greenwald


The most extremist power any political leader can assert is the power to target his own citizens for execution without any charges or due process, far from any battlefield. The Obama administration has not only asserted exactly that power in theory, but has exercised it in practice. In September 2011, it killed US citizen Anwar Awlaki in a drone strike in Yemen, along with US citizen Samir Khan, and then, in circumstances that are still unexplained, two weeks later killed Awlaki's 16-year-old American son Abdulrahman with a separate drone strike in Yemen.

Since then, senior Obama officials including Attorney General Eric Holder and John Brennan, Obama's top terrorism adviser and his current nominee to lead the CIA, have explicitly argued that the president is and should be vested with this power. Meanwhile, a Washington Post article from October reported that the administration is formally institutionalizing this president's power to decide who dies under the Orwellian title "disposition matrix".

When the New York Times back in April, 2010 first confirmed the existence of Obama's hit list, it made clear just what an extremist power this is, noting: "It is extremely rare, if not unprecedented, for an American to be approved for targeted killing." The NYT quoted a Bush intelligence official as saying "he did not know of any American who was approved for targeted killing under the former president". When the existence of Obama's hit list was first reported several months earlier by the Washington Post's Dana Priest, she wrote that the "list includes three Americans".

What has made these actions all the more radical is the absolute secrecy with which Obama has draped all of this. Not only is the entire process carried out solely within the Executive branch - with no checks or oversight of any kind - but there is zero transparency and zero accountability. The president's underlings compile their proposed lists of who should be executed, and the president - at a charming weekly event dubbed by White House aides as "Terror Tuesday" - then chooses from "baseball cards" and decrees in total secrecy who should die. The power of accuser, prosecutor, judge, jury, and executioner are all consolidated in this one man, and those powers are exercised in the dark.

In fact, The Most Transparent Administration Ever™ has been so fixated on secrecy that they have refused even to disclose the legal memoranda prepared by Obama lawyers setting forth their legal rationale for why the president has this power. During the Bush years, when Bush refused to disclose the memoranda from his Office of Legal Counsel (OLC) that legally authorized torture, rendition, warrantless eavesdropping and the like, leading Democratic lawyers such as Dawn Johnsen (Obama's first choice to lead the OLC) vehemently denounced this practice as a grave threat, warning that "the Bush Administration's excessive reliance on 'secret law' threatens the effective functioning of American democracy" and "the withholding from Congress and the public of legal interpretations by the [OLC] upsets the system of checks and balances between the executive and legislative branches of government."

But when it comes to Obama's assassination power, this is exactly what his administration has done. It has repeatedly refused to disclose the principal legal memoranda prepared by Obama OLC lawyers that justified his kill list. It is, right now, vigorously resisting lawsuits from the New York Times and the ACLU to obtain that OLC memorandum. In sum, Obama not only claims he has the power to order US citizens killed with no transparency, but that even the documents explaining the legal rationale for this power are to be concealed. He's maintaining secret law on the most extremist power he can assert.

Last night, NBC News' Michael Isikoff released a 16-page "white paper" prepared by the Obama DOJ that purports to justify Obama's power to target even Americans for assassination without due process (the memo is embedded in full below). This is not the primary OLC memo justifying Obama's kill list - that is still concealed - but it appears to track the reasoning of that memo as anonymously described to the New York Times in October 2011.

This new memo is entitled: "Lawfulness of a Lethal Operation Directed Against a US Citizen Who is a Senior Operational Leader of Al-Qa'ida or An Associated Force". It claims its conclusion is "reached with recognition of the extraordinary seriousness of a lethal operation by the United States against a US citizen". Yet it is every bit as chilling as the Bush OLC torture memos in how its clinical, legalistic tone completely sanitizes the radical and dangerous power it purports to authorize.

I've written many times at length about why the Obama assassination program is such an extreme and radical threat - see here for one of the most comprehensive discussions, with documentation of how completely all of this violates Obama and Holder's statements before obtaining power - and won't repeat those arguments here. Instead, there are numerous points that should be emphasized about the fundamentally misleading nature of this new memo:

1. Equating government accusations with guilt

The core distortion of the War on Terror under both Bush and Obama is the Orwellian practice of equating government accusations of terrorism with proof of guilt. One constantly hears US government defenders referring to "terrorists" when what they actually mean is: those accused by the government of terrorism. This entire memo is grounded in this deceit.

Time and again, it emphasizes that the authorized assassinations are carried out "against a senior operational leader of al-Qaida or its associated forces who poses an imminent threat of violent attack against the United States." Undoubtedly fearing that this document would one day be public, Obama lawyers made certain to incorporate this deceit into the title itself: "Lawfulness of a Lethal Operation Directed Against a US Citizen Who is a Senior Operational Leader of al-Qaida or An Associated Force."

This ensures that huge numbers of citizens - those who spend little time thinking about such things and/or authoritarians who assume all government claims are true - will instinctively justify what is being done here on the ground that we must kill the Terrorists or joining al-Qaida means you should be killed. That's the "reasoning" process that has driven the War on Terror since it commenced: if the US government simply asserts without evidence or trial that someone is a terrorist, then they are assumed to be, and they can then be punished as such - with indefinite imprisonment or death.

But of course, when this memo refers to "a Senior Operational Leader of al-Qaida", what it actually means is this: someone whom the President - in total secrecy and with no due process - has accused of being that. Indeed, the memo itself makes this clear, as it baldly states that presidential assassinations are justified when "an informed, high-level official of the US government has determined that the targeted individual poses an imminent threat of violent attack against the US".

This is the crucial point: the memo isn't justifying the due-process-free execution of senior al-Qaida leaders who pose an imminent threat to the US. It is justifying the due-process-free execution of people secretly accused by the president and his underlings, with no due process, of being that. The distinction between (a) government accusations and (b) proof of guilt is central to every free society, by definition, yet this memo - and those who defend Obama's assassination power - willfully ignore it.

Those who justify all of this by arguing that Obama can and should kill al-Qaida leaders who are trying to kill Americans are engaged in supreme question-begging. Without any due process, transparency or oversight, there is no way to know who is a "senior al-Qaida leader" and who is posing an "imminent threat" to Americans. All that can be known is who Obama, in total secrecy, accuses of this.

(Indeed, membership in al-Qaida is not even required to be assassinated, as one can be a member of a group deemed to be an "associated force" of al-Qaida, whatever that might mean: a formulation so broad and ill-defined that, as Law Professor Kevin Jon Heller argues, it means the memo "authorizes the use of lethal force against individuals whose targeting is, without more, prohibited by international law".)

The definition of an extreme authoritarian is one who is willing blindly to assume that government accusations are true without any evidence presented or opportunity to contest those accusations. This memo - and the entire theory justifying Obama's kill list - centrally relies on this authoritarian conflation of government accusations and valid proof of guilt.

They are not the same and never have been. Political leaders who decree guilt in secret and with no oversight inevitably succumb to error and/or abuse of power. Such unchecked accusatory decrees are inherently untrustworthy (indeed, Yemen experts have vehemently contested the claim that Awlaki himself was a senior al-Qaida leader posing an imminent threat to the US). That's why due process is guaranteed in the Constitution and why judicial review of government accusations has been a staple of western justice since the Magna Carta: because leaders can't be trusted to decree guilt and punish citizens without evidence and an adversarial process. That is the age-old basic right on which this memo, and the Obama presidency, is waging war.

2. Creating a ceiling, not a floor

The most vital fact to note about this memorandum is that it is not purporting to impose requirements on the president's power to assassinate US citizens. When it concludes that the president has the authority to assassinate "a Senior Operational Leader of al-Qaida" who "poses an imminent threat of violent attack against the US" where capture is "infeasible", it is not concluding that assassinations are permissible only in those circumstances. To the contrary, the memo expressly makes clear that presidential assassinations may be permitted even when none of those circumstances prevail: "This paper does not attempt to determine the minimum requirements necessary to render such an operation lawful." Instead, as the last line of the memo states: "it concludes only that the stated conditions would be sufficient to make lawful a lethal operation" - not that such conditions are necessary to find these assassinations legal. The memo explicitly leaves open the possibility that presidential assassinations of US citizens may be permissible even when the target is not a senior al-Qaida leader posing an imminent threat and/or when capture is feasible.

Critically, the rationale of the memo - that the US is engaged in a global war against al-Qaida and "associated forces" - can be easily used to justify presidential assassinations of US citizens in circumstances far beyond the ones described in this memo. If you believe the president has the power to execute US citizens based on the accusation that the citizen has joined al-Qaida, what possible limiting principle can you cite as to why that shouldn't apply to a low-level al-Qaida member, including ones found in places where capture may be feasible (including US soil)? The purported limitations on this power set forth in this memo, aside from being incredibly vague, can be easily discarded once the central theory of presidential power is embraced.

3. Relies on the core Bush/Cheney theory of a global battlefield

The primary theory embraced by the Bush administration to justify its War on Terror policies was that the "battlefield" is no longer confined to identifiable geographical areas, but instead, the entire globe is now one big, unlimited "battlefield". That theory is both radical and dangerous because a president's powers are basically omnipotent on a "battlefield". There, state power is shielded from law, from courts, from constitutional guarantees, from all forms of accountability: anyone on a battlefield can be killed or imprisoned without charges. Thus, to posit the world as a battlefield is, by definition, to create an imperial, omnipotent presidency. That is the radical theory that unleashed all the rest of the controversial and lawless Bush/Cheney policies.

This "world-is-a-battlefield" theory was once highly controversial among Democrats. John Kerry famously denounced it when running for president, arguing instead that the effort against terrorism is "primarily an intelligence and law enforcement operation that requires cooperation around the world".

But this global-war theory is exactly what lies at heart of the Obama approach to Terrorism generally and this memo specifically. It is impossible to defend Obama's assassination powers without embracing it (which is why key Obama officials have consistently done so). That's because these assassinations are taking place in countries far from any war zone, such as Yemen and Somalia. You can't defend the application of "war powers" in these countries without embracing the once-very-controversial Bush/Cheney view that the whole is now a "battlefield" and the president's war powers thus exist without geographic limits.

This new memo makes clear that this Bush/Cheney worldview is at the heart of the Obama presidency. The president, it claims, "retains authority to use force against al-Qaida and associated forces outside the area of active hostilities". In other words: there are, subject to the entirely optional "feasibility of capture" element, no geographic limits to the president's authority to kill anyone he wants. This power applies not only to war zones, but everywhere in the world that he claims a member of al-Qaida is found. This memo embraces and institutionalizes the core Bush/Cheney theory that justified the entire panoply of policies Democrats back then pretended to find so objectionable.

4. Expanding the concept of "imminence" beyond recognition

The memo claims that the president's assassination power applies to a senior al-Qaida member who "poses an imminent threat of violent attack against the United States". That is designed to convince citizens to accept this power by leading them to believe it's similar to common and familiar domestic uses of lethal force on US soil: if, for instance, an armed criminal is in the process of robbing a bank or is about to shoot hostages, then the "imminence" of the threat he poses justifies the use of lethal force against him by the police.

But this rhetorical tactic is totally misleading. The memo is authorizing assassinations against citizens in circumstances far beyond this understanding of "imminence". Indeed, the memo expressly states that it is inventing "a broader concept of imminence" than is typically used in domestic law. Specifically, the president's assassination power "does not require that the US have clear evidence that a specific attack . . . will take place in the immediate future". The US routinely assassinates its targets not when they are engaged in or plotting attacks but when they are at home, with family members, riding in a car, at work, at funerals, rescuing other drone victims, etc.

Many of the early objections to this new memo have focused on this warped and incredibly broad definition of "imminence". The ACLU's Jameel Jaffer told Isikoff that the memo "redefines the word imminence in a way that deprives the word of its ordinary meaning". Law Professor Kevin Jon Heller called Jaffer's objection "an understatement", noting that the memo's understanding of "imminence" is "wildly overbroad" under international law.

Crucially, Heller points out what I noted above: once you accept the memo's reasoning - that the US is engaged in a global war, that the world is a battlefield, and the president has the power to assassinate any member of al-Qaida or associated forces - then there is no way coherent way to limit this power to places where capture is infeasible or to persons posing an "imminent" threat. The legal framework adopted by the memo means the president can kill anyone he claims is a member of al-Qaida regardless of where they are found or what they are doing.

The only reason to add these limitations of "imminence" and "feasibility of capture" is, as Heller said, purely political: to make the theories more politically palatable. But the definitions for these terms are so vague and broad that they provide no real limits on the president's assassination power. As the ACLU's Jaffer says: "This is a chilling document" because "it argues that the government has the right to carry out the extrajudicial killing of an American citizen" and the purported limits "are elastic and vaguely defined, and it's easy to see how they could be manipulated."

5. Converting Obama underlings into objective courts

This memo is not a judicial opinion. It was not written by anyone independent of the president. To the contrary, it was written by life-long partisan lackeys: lawyers whose careerist interests depend upon staying in the good graces of Obama and the Democrats, almost certainly Marty Lederman and David Barron. Treating this document as though it confers any authority on Obama is like treating the statements of one's lawyer as a judicial finding or jury verdict.

Indeed, recall the primary excuse used to shield Bush officials from prosecution for their crimes of torture and illegal eavesdropping: namely, they got Bush-appointed lawyers in the DOJ to say that their conduct was legal, and therefore, it should be treated as such. This tactic - getting partisan lawyers and underlings of the president to say that the president's conduct is legal - was appropriately treated with scorn when invoked by Bush officials to justify their radical programs. As Digby wrote about Bush officials who pointed to the OLC memos it got its lawyers to issue about torture and eavesdropping, such a practice amounts to:

"validating the idea that obscure Justice Department officials can be granted the authority to essentially immunize officials at all levels of the government, from the president down to the lowest field officer, by issuing a secret memo. This is a very important new development in western jurisprudence and one that surely requires more study and consideration. If Richard Nixon and Ronald Reagan had known about this, they could have saved themselves a lot of trouble."

Life-long Democratic Party lawyers are not going to oppose the terrorism policies of the president who appointed them. A president can always find underlings and political appointees to endorse whatever he wants to do. That's all this memo is: the by-product of obsequious lawyers telling their Party's leader that he is (of course) free to do exactly that which he wants to do, in exactly the same way that Bush got John Yoo to tell him that torture was not torture, and that even it if were, it was legal.

That's why courts, not the president's partisan lawyers, should be making these determinations. But when the ACLU tried to obtain a judicial determination as to whether Obama is actually authorized to assassinate US citizens, the Obama DOJ went to extreme lengths to block the court from ruling on that question. They didn't want independent judges to determine the law. They wanted their own lawyers to do so.

That's all this memo is: Obama-loyal appointees telling their leader that he has the authority to do what he wants. But in the warped world of US politics, this - secret memos from partisan lackeys - has replaced judicial review as the means to determine the legality of the president's conduct.

6. Making a mockery of "due process"

The core freedom most under attack by the War on Terror is the Fifth Amendment's guarantee of due process. It provides that "no person shall be . . . deprived of life . . . without due process of law". Like putting people in cages for life on island prisons with no trial, claiming that the president has the right to assassinate US citizens far from any battlefield without any charges or trial is the supreme evisceration of this right.

The memo pays lip service to the right it is destroying: "Under the traditional due process balancing analysis . . . . we recognize that there is no private interest more weighty than a person's interest in his life." But it nonetheless argues that a "balancing test" is necessary to determine the extent of the process that is due before the president can deprive someone of their life, and further argues that, as the New York Times put it when this theory was first unveiled: "while the Fifth Amendment's guarantee of due process applied, it could be satisfied by internal deliberations in the executive branch."

Stephen Colbert perfectly mocked this theory when Eric Holder first unveiled it to defend the president's assassination program. At the time, Holder actually said: "due process and judicial process are not one and the same." Colbert interpreted that claim as follows:

"Trial by jury, trial by fire, rock, paper scissors, who cares? Due process just means that there is a process that you do. The current process is apparently, first the president meets with his advisers and decides who he can kill. Then he kills them."

It is fitting indeed that the memo expressly embraces two core Bush/Cheney theories to justify this view of what "due process" requires. First, it cites the Bush DOJ's core view, as enunciated by John Yoo, that courts have no role to play in what the president does in the War on Terror because judicial review constitutes "judicial encroachment" on the "judgments by the President and his national security advisers as to when and how to use force". And then it cites the Bush DOJ's mostly successful arguments in the 2004 Hamdi case that the president has the authority even to imprison US citizens without trial provided that he accuses them of being a terrorist.

The reason this is so fitting is because, as I've detailed many times, it was these same early Bush/Cheney theories that made me want to begin writing about politics, all driven by my perception that the US government was becoming extremist and dangerous. During the early Bush years, the very idea that the US government asserted the power to imprison US citizens without charges and due process (or to eavesdrop on them) was so radical that, at the time, I could hardly believe they were being asserted out in the open.

Yet here we are almost a full decade later. And we have the current president asserting the power not merely to imprison or eavesdrop on US citizens without charges or trial, but to order them executed - and to do so in total secrecy, with no checks or oversight. If you believe the president has the power to order US citizens executed far from any battlefield with no charges or trial, then it's truly hard to conceive of any asserted power you would find objectionable.

DOJ White Paper

Lawfulness of a Lethal Operation Directed Against a U.S. Citizen who is a Senior Operational Leader of Al Q... by

Lawfulness of a Lethal Operation Directed Against a U.S. Citizen who is a Senior Operational Leader of Al Q... by

Corporate Personhood and the Culture of Pathology

Morality Turned Upside Down
by NOZOMI HAYASE


With drone attacks, torture and drug money laundering, the interlocking network of the corporate military-industrial complex and banking cartels continue the age-old Western pattern of colonization around the world. From Iraq to Afghanistan; from Lybia to Mali, bloody resource wars are camouflaged behind the fear-based rhetoric of ‘national security’ and ‘humanitarian intervention’.

Western societies are rapidly losing their moral center. The employment of reason in the majority of society now seems divorced from the basic capacity for empathy. Government war criminals walk free, while whistleblowers reporting their crimes are punished. Bankers who commit massive fraud are bailed out while taxpayers have their futures foreclosed. When a culture rewards selfish deeds and immunizes the criminal acts of its leaders, it skews the norm toward depravity. How has this happened? How is it that Western civilization has devolved into something like a global rouge state?

Michael Nagler, professor and peace activist once said, “There is something deeper than our culture (at the root of the problem) and that is our spiritual predisposition, which means who we think we are”. We have seen deeply embedded racism, growing exploitation and militarism and an explosion of the gap between the rich and poor. So many social problems that have manifested in the world throughout the last century seem to have radiated from a particular view of humanity.

The State of Power 2013 report reveals the concentration of wealth and power in the world. Fewer than 1% of the world’s transnational corporations, mostly banks, control 40% of global businesses. .001% of the population control assets worth $14.6 trillion — or over 20% of the world’s annual GDP. Corporate institutions, with a narrow mandate of maximizing profit at great human or environmental cost are the real governing forces in most countries, controlling health, safety, environment, monetary systems and food supplies. This is affecting all aspects of our lives.

We are born into a corporate state. Children as early as three are prey to corporate marketing. Education in America and abroad has become a dumbing-down of creativity and reduced to a simple vocational training. Critical thinking is discouraged and most schools just offer skills for serving the corporate work force. The corporate-consumer mindset has grown exponentially and has insidiously worked itself into the very fabric of life.

The first beginnings of this ever-increasing spread of corporate power can be traced back to a pivotal moment in US history, when a little known Supreme Court clerk made a notation from an off-hand comment of a Supreme Court Judge in 1886, which launched the legal fiction of corporate personhood. Economist and author, David Korten (2000) outlined this crucial turning point:

“In 1886, . . . in the case of Santa Clara County v. Southern Pacific Railroad Company, the U.S. Supreme Court decided that a private corporation is a person and entitled to the legal rights and protections the Constitutions affords to any person. …Thus it was that a two-sentence [off hand] assertion by a single judge elevated corporations to the status of persons under the law, prepared the way for the rise of global corporate rule, and thereby changed the course of history”. (pp. 185-186)

With this ruling, corporations were granted the Constitutional rights of personhood under the equal protection clause of the Constitution. Ever since then, corporations and the men that serve them have successfully drawn the notion of “We the People” in a direction determined by corporate motives of ‘profit at any cost.’ By defining these entities as artificial persons (corporations are not actual human beings), no one can be held accountable for their actions. Yet, they are afforded the freedoms and protections that the Constitution guarantees for each person, while wielding enormous power and resources not available to any one person.

Corporations were initially granted existence with short-term charters meant to serve the community. They often involved large projects such as building a bridge or a railroad. Then over time, through a series of legal maneuvers and this constructed fiction of corporate personhood, the tendency to monopolize markets through ever-expanding growth was cemented. Then, self-preservation was incorporated into their very structure. When the law of limited-liability and hierarchical style of management were implemented, the corporate character became prone to excess.

The ‘corporate mentality’ that has evolved now serves only selfish and narrow interests. The system filters out those CEOs and board members who don’t exhibit this kind of ruthless character. Thus, the people at the top tend to be those who have developed this limited mentality. The end result is a small number of giant companies that gain more money and power than whole countries.

The transnational corporation, with limited liability, an ethos of profit at any cost and the drive for insatiable expansion has become a callous machine. When these patterns of behavior are carefully examined, they can be seen as pathological in nature. The 2003 documentary film The Corporation  psychoanalyzed the actions and patterns of this historically unique entity as if it were a person. It examined the personality and characteristic attributes of the corporation and concluded that its psychological orientation is a textbook example of a psychopath. It consistently meets the diagnostic criteria of psychopaths designated in the DSM-IV, namely a lack of empathy, conscience, the incapacity to feel guilt, as well as a callous disregard for safety of others.

Psychoanalyst Adolf Guggenbuhl-Craig (1990) said the defining characteristic of the psychopath is someone that does not have a capacity to feel guilt. He described how an element that “connects us to our environment” (p. 89) is lacking, then, manipulation, control and domination will take over (p. 92). He noted that many researchers recognized this lack of connection as primary characteristic of psychopathy.

Aside from the psychopathic element, the behaviors of corporate entities seem to consistently exhibit behavioral traits of a soul driven to addiction. In the thirst for ever-expanding material accumulation, we can see an internal hunger that is seemingly never satisfied. Like addicts that engage in destructive behaviors, lust for greed and power becomes an uncontrollable force and in many cases spins out of control.

Canadian physician Gabor Maté used the Buddhist mandala, the wheel of life as metaphor. He described addicts as inhabitants of the realm of hungry ghosts or the Buddhist version of hell:

“…. the creatures in it are depicted as people with large empty bellies, small mouths and scrawny thin necks. They can never get enough satisfaction. They can never fill their bellies. They’re always hungry, always empty, always seeking it from the outside. That speaks to a part of us that I have and everybody in our society has, where we want satisfaction from the outside, where we’re empty, where we want to be soothed by something in the short term, but we can never feel that or fulfill that insatiety from the outside. The addicts are in that realm all the time”.

Corporate personhood sucks people into this false caricature of humanity and tends to shape their wills within the restricted neuro-pathways that repeat a vicious circle of obsessive pursuit of profits. Hungry ghosts, with their pathological need to fill ever-empty stomachs, will do anything for that goal at the expense of all others. Anyone who has lived with an addict understands how destructive their behaviors can be to those around them.

Huge segments of society have become cogs in the corporate machine. They are trained to execute efficiency through blocking feelings for their environment and care for others. This process divorces them from the development of social morality and they remain cut off from the consequences of their actions.

On January 21, 2010, the increase of corporate influence in political and social life reached a zenith in the US, with the ruling in Citizens United v. Federal Election Commission. The Supreme Court proclaimed that corporations are persons, entitled by the U.S. Constitution with their massive wealth to buy elections and run governments from behind a curtain of anonymity.

Unchecked corporate power is expanding around the globe. It seems to have morphed into a force of exploitation, similar to colonialism. Transnational corporations jump between countries; to China and Mexico for cheap labor and to occupation Green Zones like the Las Vegas of Baghdad, where the water of life decays into the Black-water of death. The corporate-state subverts laws and political structures and has turned the living earth into a materialized playground for consumption and exploitation. It seduces people to the vapid and soulless pursuit of power and preaches eternal life in the material kingdom. This artificial person pulls human beings into a false conception of their own humanity, one that is essentially inhuman.

When culture becomes pathological, morality is turned upside down. Cruelty and dehumanizing behaviors are rewarded, while kindness, justice and compassion are punished. Maté (2010) described the root cause of addictive behaviors: “At the core of all addictions there lies a spiritual void.” (p. 83). He explained how “Addiction floods in where self-knowledge — and therefore divine knowledge — are missing. To fill the unendurable void, we become attached to things of the world that cannot possibly compensate us for the loss of who we are.” (p. 413).

Maybe the true nature of corporate power is that of a rootless orphan whose destructive sociopathic behavior is a desperate call to be understood. When culture becomes pathological, restoring sanity starts from each person deeply connecting with what makes them truly human; what makes them real. Only then can we transform and heal our brutal, pathological society and create a humane culture embedded in communal values and connection to the earth.

References:
Guggenbuhl-Craig, A. (1999). The emptied soul: On the nature of the psychopath. Woodstock, CT: Spring.
Korten D. (2000). The post- corporate world, life after capitalism. SF: Berrett Koehler Publishers.
Mate, G. (2010). In the realm of hungry ghosts: Close encounters with addiction. Berkeley, CA: North Atlantic Books.

Want to Fix the Economy? Spend More Money

Can't Get No Stimulation
by MIKE WHITNEY


The economy operates on a simple principle: When people spend money, the economy grows. That means the goal of economic policy should be to maintain a level of spending that keeps the economy growing and minimizes the unavoidable peaks and valleys of the business cycle. This can’t be done without government intervention, mainly because free market capitalism tends to be too erratic (spending can fall sharply) and crisis prone. (See: Lehman Brothers 2008). Dramatic fluctuations in the markets, typically result in anemic business investment which leads to higher unemployment, slower growth and weaker demand. This problem was largely solved by British economist John Maynard Keynes. Keynes understood that when private sector spending dropped off, public sector (government) spending had to increase or output would shrink, unemployment would rise, and the economy would begin to sputter.

Interestingly, all of the main players who are currently setting policy in the Obama administration and at the Federal Reserve have some understanding of Keynes’ theories and how they can be used to put the economy back on track. The fact that Keynes remedies have been rejected in favor of unconventional and ineffective theories like QE (Quantitative Easing), suggests that the supporters of these policies are less interested in reviving the economy and putting people back to work, then they are with rewarding powerful constituents. 5 years of experimentation, has resulted in chronic high unemployment, droopy consumer confidence, negative wage growth, sky-high foreclosures and personal bankruptcies, record food stamp usage, and a sharp increase in extreme poverty. At the same time, the 3 main stock indicies have more than doubled in value while financial institutions and corporations are raking in record profits. There’s no doubt that QE has served the interests of the few while hurting the interests of the many.

The reason Keynes theories experienced a “comeback” in 2009 is not hard to grasp. Congress and the White House were afraid that the financial system was about to collapse. That’s why Obama’s team of economics advisors–led by Lawrence Summers–pushed through the $800 billion American Recovery and Reinvestment Act (ARRA), because, when the chips were down, economists turned to the tried-and-true remedies of John Maynard Keynes. And they worked, too, the only drawback was that the amount of the stimulus was too small to produce the recovery that had been promised. (For the latest on the effectiveness of the stimulus, see: “Joe Scarborough’s Attack on Stimulus“, Dean Baker, CEPR)

Critics of Obama’s fiscal stimulus say that “It didn’t work”, but the claim is ridiculous. How could it not work? Stimulus is not some magic elixir that works on one subject and not on another. It’s spending. Spending is activity, spending is growth, spending is demand, spending is hiring, spending is stimulus. Spending is everything. When the government spends money, it has the same effect as when a consumer spends money or a business spends money. Therefore, the stimulus worked.

The economy is not a sentient being. The economy doesn’t care if private citizens do the spending or the government does the spending. It doesn’t care if the money comes from personal bank accounts or budget deficits. The economy doesn’t care if the money is spent on cancer research or pet rocks. It doesn’t matter, because all spending increases activity, strengthens demand, and leads to more hiring. Saving has the opposite effect. While saving may be the necessary and sensible choice for an individual, it’s poison for the economy. When people save, the velocity of money decreases, demand weakens and growth slows. This whole question of saving vs spending is basic to Keynes’ view of how the economy works. Here’s an example which helps to explain:

“Let’s imagine there are only two people in the world, you and your friend…..You make $100 a week by selling milk to your friend at $1 a bottle, and he makes $100 a week because you buy chocolate from him at $1 a bar. The entire income in this economy (its Gross Domestic Product or GDP) is $200, which corresponds to 100 bottles of milk and 100 bars of chocolate.

One day you make a decision to save $20 out of your $100 and hold it in cash. Consequently, my income falls to $80, and the sum income in the economy is now $180, and the economy produces 20 chocolate bars less than before. In the subsequent week, I only have $80 to spend, hence your takings also fall to $80, and you buy a smaller amount of my milk.

In the end, you and your friend’s incomes are smaller and you are producing and consuming less than is potentially possible. Your economy has fallen into recession.

So now we have a recession but how do we get out of it? Well the neoclassical free market thinking is that you simply do nothing and the forex market will correct itself. In our example you will reduce the price of milk until you are selling 100 bottles again. Your friend does the same and he is now selling 100 bars of chocolate again. The recession is over.

However, this doesn’t happen overnight and could take a while, months even years. So Keynes advocates intervention by the state. Say the state printed $20 and bought your unsold produce, then you would be back to a monthly income of $100 and so would your friend because your income is his income. Full production is immediate therefore no recession and no reduction in GDP.” (“The Basics of Keynesian Economics”, etoro.com)

While imperfect, this analogy helps us get a better fix on what’s going on in the economy today. Presently, output is below what it should be by more than $1 trillion per year, thus, unemployment is high and growth is weak. At the same time, personal savings have risen from near-zero in 2007 to almost 4 percent today. The increase in savings has decreased spending which, in turn, has reduced activity and demand. According to Keynes, the state should step in and boost its spending to employ more of the economy’s resources and put more people back to work. Then, as the recovery gains momentum, the state can reduce its contribution and trim the deficits.

The GOP deficit hawks in Congress want to do the exact opposite. They want to want to reduce the deficits by cutting public spending on popular social programs like Medicare and Social Security. This is a mistake that will only deepen the crisis and pave the way for another slump. It is fairly easy to see what’s wrong with this view by looking at last week’s Commerce Department report on GDP. On Thursday, the Commerce Department reported that 4th Quarter growth (2012) had slipped into negative territory due to a sharp reduction in business inventories and defense spending. This sent off alarms across the country. Was the report a “one off” or is the economy really headed back into recession? That’s what everyone wants to know. (A recession is defined as two consecutive quarters of negative growth)

Now many people think that less money going to fatcat defense contractors is a good thing, and I agree. But as we said earlier, the economy doesn’t make value judgements like that. Spending is spending, and when government spending falls (as it did), the economy edges closer to recession. Now apply this same rule to the recommendations of the GOP deficit hawks. The hawks say they want “fiscal responsibility”, but what they’re opting for is another slump because the trillion dollar deficits (which represent $1 trillion of additional government spending) are the only thing keeping the economy from sliding back into recession. (See the breakdown of GDP report here).

So how do we reduce the deficits without pushing the economy back into recession?

Increase personal consumption? That seems like the logical choice, after all, if consumers go on another spending spree, then businesses will hire more workers, the economy will grow, federal revenues will balloon, and the deficits will vanish automatically. Problem solved, right?

The only thing is that–according to the data—personal consumption is just about back to normal now. That suggests that the problem isn’t consumption, the problem is that people are not spending as much as they did during the bubble years when residential construction was at its peak and homeowners were feeling flush due to rising housing prices. That hyper-spending was a result of fictitious equity, lax lending standards, low interest rates and massive fraud. The goal of policy should not be to create those same conditions again, (and increase the probability of another meltdown!) but to look for solutions elsewhere.

So, where do we look if not to more personal consumption? Business investment?

It’s unreasonable to expect businesses to make more products when demand is weak. They’d rather issue bigger dividends or buyback more of their own stock (which they have been doing) instead of building more widgets that will just sit on warehouse shelves.

So if neither consumers nor businesses can fill the gap (and reduce the deficits), then what about the government? In the short-term, that’s the best choice, especially since money is so cheap. Presently, the gov can borrow money at historic low rates–(10-year US Treasuries are currently below 2%). The administration should take advantage of these low rates and deploy more stimulus to kickstart the economy. As the economy gets back to full-steam, the deficits will shrink on their own and policymakers can work on a plan for long-term debt reduction.

So what should Obama be doing?

The Obama administration should launch an aggressive government-funded jobs program aimed at lowering unemployment by rebuilding the nation’s dilapidated infrastructure. The commitment of trillions of dollars in fiscal stimulus to the stated project would push the dollar lower which would reduce the trade deficit (US exports would become more competitive) while increasing domestic national savings. Full employment would put more money in the hands of people who would spent it quickly which would increase activity, demand and growth.

So the way to fix the economy is to use government resources to put people back to work. As Keynes opined in his masterpiece “The General Theory of Employment, Interest and Money”: “I am now somewhat sceptical of the success of a merely monetary policy directed towards influencing the rate of interest. I expect to see the State… taking an ever greater responsibility for directly organising investment; since it seems likely that the fluctuations in the market estimation of the marginal efficiency of different types of capital…. will be too great to be offset by any practicable changes in the rate of interest.”

In other words, interest rates and monetary policy alone, won’t get the job done. (Isn’t that obvious after 5 years of zero interest rate policy, ZIRP, and QE??) The government has to take the lead in directing investment to produce a strong and sustainable recovery. That’s what Obama should be doing.

Genetic Roulette - The Gamble of Our Lives

Funnies

Published clinical trials shown to be misleading

Comparison of internal and public reports about Pfizer’s drug Neurontin reveals many discrepancies 
By Rachel Ehrenberg
ScienceNews
January 29, 2013

Editor's note: This story was updated on January 31 with comment from Pfizer.

A rare peek into drug company documents reveals troubling differences between publicly available information and materials the company holds close to its chest. In comparing public and private descriptions of drug trials conducted by pharmaceutical giant Pfizer, researchers discovered discrepancies including changes in the number of study participants and inconsistent definitions of protocols and analyses.

The researchers, led by Kay Dickersin, director of the Center for Clinical Trials at the Johns Hopkins Bloomberg School of Public Health, gained access to internal Pfizer reports after a lawsuit made them available. Dickersin and her colleagues compared the internal documents with 10 publications in peer-reviewed journals about randomized trials of Pfizer’s anti-epilepsy drug gabapentin (brand name Neurontin) that tested its effectiveness for treating other disorders. The results, the researchers say, suggest that the published trials were biased and misleading, even though they read as if standard protocols were followed. That lack of transparency could mean that clinicians prescribe drugs based on incomplete or incorrect information.

"We could see all of the biases right in front of us all at once,” says Dickersin, who was an expert witness in the suit, which was brought by a health insurer against Pfizer. Pfizer lost the case in 2010, and a judge ruled it should pay $142 million in damages for violating federal racketeering laws in promoting Neurontin for treating migraines and bipolar disorder.

Pfizer had in 2004 settled a case and paid $430 million in civil fines and criminal penalties for promoting Neurontin for unapproved use.

The study's results, published January 29 in PLOS Medicine, show that publications about drug trials don’t always reflect the research that was conducted, says Lisa Bero of the University of California, San Francisco, an expert in methods to assess bias in scientific publishing “We know that entire studies don’t get published and that what does get published is more likely to make a drug look favorable,” she says. “This adds another layer.”

In three of the 10 trials, the numbers of study participants in the published results didn’t match those in the internal documents. In one case, data from 40 percent of the participants were not included in the published trial. Dickersin and her colleagues also tried to directly compare several other aspects of the studies. But they found so many differences in definitions and in the analyses and protocols that the comparisons turned out to be difficult, she says.

“When we tried to draw a flow chart of who dropped out [of a trial], who stayed in — well, we couldn’t do it,” she says. “You can’t even judge if they did the right thing if you can’t figure out what they did.”

Pfizer did not immediately respond to requests for comment. The company outlined its policies for making clinical trial data public in a statement provided to Science News on January 30, concluding that the company reports on studies "in an objective, accurate, balanced and complete manner." The Johns Hopkins analysis highlights the need for standard definitions and protocols and greater transparency in reporting clinical trials, says Bero, a longtime advocate of making raw data from clinical trials publicly available. “You’re kind of held hostage to the paper that you are reading,” she says.

The New National Identification System Is Coming

by David Bier on February 1, 2013
OpenMarket.org



“Maybe we should just brand all the babies.” With this joke, Ronald Reagan swatted down a national identification card — or an enhanced Social Security card — proposed by his attorney general in 1981. For more than three decades since, attempts to implement the proposal have all met with failure, but now national ID is back, and it’s worse than ever.

As in 1981, immigration restrictions have provided the justification. In the name of stopping illegal employment, proposals floated by a bipartisan group of senators would create both a physical national ID — an “enhanced” Social Security card — and even more menacingly an Internet-based, electronic ID that could be accessed anywhere to confirm identity.

After the election, Sen. Chuck Schumer (D-NY), who is leading the Democrats immigration push, told NBC News that one of his top priorities was to “make sure that there is a non-forgeable document” for all employees. After years of pushing for one, Sen. Schumer may have broken through GOP opposition. “We’re going to have to come up with something, but the principle we all agree on,” Sen. Chuck Schumer said this week.

Sen. John McCain (R-AZ) told Politico that he was for “a super Social Security card that would have some sort of biometric things like a fingerprint in it.” Sen. Lindsay Graham (R-SC)—also, a longtime supporter of national ID — agrees. “You’ll have documents that can’t be faked,” he told CBS News after the election.

This path was the inevitable consequence of America’s broken immigration system. First, Congress made it prohibitively difficult to come. Then, unable to enforce that, they conscripted businessmen to police their workforce for them. Now that document fraud has ruined this scheme, the government wants even more surveillance.

But national ID is more than just a card with a name and number — it is a system. It must contain data collected by the government on every legal worker that compares that name and number to you. This means the federal government must start collecting biometric information: pictures, fingerprints, retina scans, DNA, and whatever else is needed to make the system work.

Even worse than a physical card, the Department of Homeland Security (DHS) and Social Security Administration (SSA) has created an electronic national ID called electronic employment verification (EEV). The current rendition is known as E-Verify, which has combined DHS’s immigration database with the SSA’s database, containing your name, address, legal status, work authorization, and social security number.

The Senate immigration bill will mandate all employers use E-Verify to check the immigration status of their employees. Right now, employers can voluntarily submit the employee’s name and number to check if they match the name and number in the system. If the names or numbers don’t match, you must take further steps to prove your identity at SSA offices.

The system creates a guilty-until-proven-innocent approach to employment that also allows DHS to monitor every worker throughout the country. Some proposed mandates would require employees who work multiple jobs to automatically visit SSA offices — the new DMVs of employment — to prove that they really do work both jobs.

“People say ‘National ID,’ ” Sen. Schumer told Politico. “[But] that’s a card that you’d have to show whenever anyone, a police officer or anyone came up to you.” Actually, that’s not true. National ID is any mandatory system that could identify you at any given time. E-Verify combined with biometrics from state DMVs or elsewhere would meet that definition.

National ID need not be shown every time you go outside — it could just be used at checkpoints, airports, and toll booths or to access the Internet, firearms, prescription drugs, jobsites, or apartment buildings. Both the federal government and several states already prohibit renting to unauthorized immigrants. Potential tenants may soon be required to pass E-Verify to obtain housing with a similar “multiple homes” check.

To argue that the same expansion of use — already being applied to the SS card — will not also apply to E-Verify is not believable. The calls for a national ID — electronic or otherwise — by these senators undermine their credibility when they claim their plan will actually stop illegal entries at the border. If it did, national ID and E-Verify would be unnecessary. America needs immigration reform, but what it doesn’t need is more bureaucracy and universal surveillance.

Congress Will Battle Over Internet Privacy in 2013

Saturday, February 2, 2013 by Deeplinks Blog / EFF  
by Mark M. Jaycox

Last year, we saw more battles in Congress over Internet freedom than we have in many years as user protests stopped two dangerous bills, the censorship-oriented SOPA, and the privacy-invasive Cybersecurity Act of 2012. But Congress ended the year by ramming through a domestic spying bill and weakening the Video Privacy Protection Act.

In 2013, Congress will tackle several bills—both good and bad—that could shape Internet privacy for the next decade. Some were introduced last year, and some will be completely new. For now, here's what's ahead in the upcoming Congress:

Reforming Draconian Computer Crime Law

The Computer Fraud and Abust Act (CFAA), was one of the key laws the government used in its relentless and unjust prosecution of Aaron Swartz. Zoe Lofgren has proposed "Aaron's Law," which ensures that breaking a terms of service or other contractual obligation does not amount to a CFAA violation. Lofgren's reforms are a terrific start and will be introduced in Congress over the coming weeks. EFF has also proposed revisions to Lofgren's language and overall reform to the CFAA that reduces the draconian penalties and clarifies key definitions in the statute. The proposed reforms will go a long way in preventing a similar situation from happening to a freedom fighter like Aaron again. It's unclear where the language stands in the Senate, but Senators like Ron Wyden have voiced support for Lofgren's bill and should take up CFAA reform. You can take action and email your members of Congress to tell them to support reform of the Computer Fraud and Abuse Act here.

Update to the Electronic Communications Privacy Act (ECPA)

Once again, the 113th Congress will try to update the archaic Electronic Communications Privacy Act. The law, which was passed in 1986, lays out procedures for when the government can obtain your private electronic messages, like email or Facebook messages, from service providers. ECPA states that the government doesn’t need a warrant for emails when they are older than 180 days—even though the Sixth Circuit held that this “180-day rule” violates the Fourth Amendment. Despite the ruling, the Justice Department continues to argue that the DOJ does not have to obtain a warrant.

Last Congress Senator Leahy successfully moved the Senate Judiciary Committee to approve an ECPA amendment mandating warrants for all private electronic communications, but the bill didn’t get to the full Senate. This year, both Senator Leahy and House Reps. Goodlatte and Lofgren will introduce similar legislation to ensure that the same protections that apply to physical private messages also apply to virtual private messages.

Congress should take the lead from the courts and move the legislation forward.

Restricting Government and Corporate Use of your Cell Phone GPS Info

Updating ECPA is also about protecting users geolocation information, especially after the Supreme Court’s decision in the GPS case, United States v. Jones. Senator Wyden and Rep. Chaffetz's GPS Act mandates that the government obtain a warrant before it seeks a user's geolocation information. Currently, the government can obtain such information without a warrant or probable cause, which is something the government has done at a staggering rate.

But the government isn't the only entity spying on cell phone users. Over and over, users are learning the hard way that private companies surreptitiously collect information from users' mobile devices and often share that data with unknown third parties. That's why Congressmen like Rep. Markey and Senator Franken introduced legislation last Congress that requires clear notification and disclosures when a company collects and shares user information with third parties. Both Congressmen plan to reintroduce and move the legislation forward in the 113th Congress.

Cybersecurity Legislation

Congressmen are also girding for another fight on Cybersecurity. Along with more warnings of an upcoming "cyber-Pearl Harbor," Congressmen named cybersecurity a priority in 2013 and are planning to reintroduce a new version of an “information sharing” cybersecurity bill called CISPA, which as EFF described at the time, carved a giant and vague “cybersecurity” loophole into all US privacy laws, while alsogranting new powers and legal immunity to companies.

The Internet community helped defeat the Cybersecurity legislation and Congress needs to craft any new bill with the utmost concern for privacy.

FBI Silent About Wanting To “Back Door" the Web

Lastly, there are rumors that the Obama Administration will propose a new Internet surveillance law, which will expand the Communications Assistance to Law Enforcement Act (CALEA), which forces telephone companies to build wiretap-friendly backdoors into all their technology—but not social networks and other web-based communications services.In 2005, the FBI pushed the FCC to rule that VOIP and "facilities-based internet access providers" had to abide by CALEA requirements. Now they want even more power. This expansion is in spite of the fact that the FBI has yet to respond adequately to EFF's FOIA lawsuit seeking records that would justify the need to expand federal surveillance laws, given they have a myriad of ways to get such data already (Google’s transparency report shows the government requests for user data is skyrocketing).

The White House and the FBI have not released what is in the proposed legislation, but one report states the FBI wants to require Internet companies, like Google, Facebook, and Twitter to build the same type of backdoors for real-time government surveillance. This would not only create a huge Internet security problem, making the Internet less safe just as Congress pushes for a cybersecurity bill, but threatens basic privacy on the web.

The potential for the 113th Congress to introduce backwards bills like CISPA and CALEA is great. But Congress, and especially new members, should take note of the Internet community's strong—and successful—opposition to bills like SOPA.

It's time to curry favor with everyday constituents, and not with giant corporations or overreaching law enforcement.