Pouring the Red Ink Down the Sink

September 1, 2011

The Politics of Debt Repudiation

by MIKE WHITNEY

The US consumer’s decade-long spending spree has ended, but there’s still an ocean of red ink left to mop up. And with housing prices falling and unemployment tipping 9 per cent, it will take longer to clear the family balance sheet than many had anticipated.


Traditionally, the government has helped to ease the pain of deleveraging by providing fiscal stimulus to boost economic activity and lower the real cost of debt. But Capitol Hill is now in the grips of deficit hawks who frown on such Keynesian remedies, so households and consumers will have to fend for themselves and pay-down debts as best as they can or default when repayment is no longer possible . That’s bad news for the economy that depends on consumers for 71 percent of GDP. Without a healthy consumer, the economy will face years of sluggishness and stagnation.


U.S. household debt as a share of annual disposable income is currently 115 percent, down from the peak of 135 percent in 2008. But, while consumers are making headway in paring down their debts, there’s still a lot of work to do. Economists believe that the figure will eventually return to its historic range of 75 percent, which means slower growth for years to come unless someone else makes up the difference in spending.


But what sector is big enough to make up for the loss in consumer spending? Business? Government?


Business spending is still significantly below pre-crisis levels of investment. Naturally, businesses aren’t going hire more workers and produce more products if demand is weak. And, demand is bound to stay weak if there’s no rebound in consumption.  But how can the consumer rebound when he’s buried under a mountain of debt and making every effort to increase his savings? Surely, if wages were growing, then it would be easier to pay down debts while increasing spending at the same time. But wages aren’t growing, in fact, they are falling in inflation-adjusted terms. So personal consumption–which typically leads the way out of recession–will continue to disappoint. This is from an article by Stephen Roach titled “One Number Says it All”:

“There are two distinct phases to this period of unprecedented US consumer weakness. From the first quarter of 2008 through the second period of 2009, consumer demand fell for six consecutive quarters at a 2.2 per cent annual rate. Not surprisingly, the contraction was most acute during the depths of the Great Crisis, when consumption plunged at a 4.5 per cent rate in the third and fourth quarters of 2008.

As the US economy bottomed out in mid-2009, consumers entered a second phase – a very subdued recovery. Annualized real consumption growth over the subsequent eight-quarter period from the third quarter of 2009 through the second quarter of 2011 averaged 2.1 per cent. That is the most anemic consumer recovery on record – fully 1.5 percentage points slower than the 12-year pre-crisis trend of 3.6 per cent that prevailed between 1996 and 2007.

These figures are a good deal weaker than originally stated. As part of the annual reworking of the US National Income and Product Accounts that was released in July 2011, Commerce Department statisticians slashed their earlier estimates of consumer spending. The 14-quarter growth trend from early 2008 to mid-2011 was cut from 0.5 per cent to 0.2 per cent; the bulk of the downward revision was concentrated in the first six quarters of this period – for which the estimate of the annualized consumption decline was doubled, from 1.1 per cent to 2.2 per cent.

I have been tracking these so-called benchmark revisions for about 40 years. This is, by far, one of the most significant I have ever seen. We all knew it was tough for the American consumer – but this revision portrays the crisis-induced cutbacks and subsequent anemic recovery in a much dimmer light.” (“One Number Says it All”, Stephen S. Roach, Project Syndicate)

Roach’s timeline is key to understanding what’s going on. He says: “the subsequent eight-quarter period from the third quarter of 2009 through the second quarter of 2011 averaged 2.1 per cent.” The period that Roach calls a “very subdued recovery” coincides with the implementation of the $787 billion fiscal stimulus (ARRA).


Absent the Obama administration’s fiscal intervention, there would have been no recovery. This is worth considering in view of the fact that households continue to pay-down debts and will do so for the forseeable future. If the government doesn’t provide additional stimulus, then the economy will slip back into negative territory. And that’s precisely what’s happening now. Here’s an excerpt from an article by John P. Hussman, Ph.D, Hussman Funds who connects the dots drawing from recent data:

“It is now urgent for investors to recognize that the set of economic evidence we observe reflects a unique signature of recessions comprising deterioration in financial and economic measures that is always and only observed during or immediately prior to U.S. recessions. These include a widening of credit spreads on corporate debt versus 6 months prior, the S&P 500 below its level of 6 months prior, the Treasury yield curve flatter than 2.5 per cent…, year-over-year GDP growth below 2 per cent, ISM Purchasing Managers Index below 54, year-over-year growth in total nonfarm payrolls below 1 per cent, as well as important corroborating indicators such as plunging consumer confidence. There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100 per cent sensitivity (these conditions have always been observed during or just prior to each U.S. recession) and 100 per cent specificity (the only time we observe the full set of these conditions is during or just prior to U.S. recessions). This doesn’t mean that the U.S. economy cannot possibly avoid a recession, but to expect that outcome relies on the hope that “this time is different.” (“A Reprieve from Misguided Recklessness”, John P. Hussman, Ph.D, Hussman Funds)

Policy should be based on more than hope. It should be grounded in a firm grasp of macroeconomics and a commitment to the common good.


Keep in mind, that during the peak bubble years of 2000 to 2007 households nearly doubled their “outstanding debt to $13.8 trillion” and “personal consumption grew by 44 per cent from $6.9 trillion to $9.9 trillion”. Also, from 2003 to the third quarter 2008 US households extracted $2.3 trillion of equity from their homes in the form of home equity loans and cash-out refinancings” (figures from “Will US Consumer Debt Cripple the Recovery”, McKinsey Global Institute)


$2.3 trillion! Think about that. That’s nearly $500 billion that was being pumped into the economy every year, which is more than Obama’s $787 stimulus distributed over a two-year period. That’s why unemployment stayed low while housing prices ballooned, because loose lending standards and easy money inflated the biggest credit bubble of all time. But now the trend has reversed itself and debt-deflation dynamics are in play forcing consumers to cut spending, increase saving, and pay down their debts. Only the federal government has the ability and the wherewithal to support the flagging economy while the process continues. The government must boost its spending, increase the deficits, and assist in the deleveraging process. This is from an article by economist Laura Tyson titled “Recovering from a Balance-Sheet Recession”:

“In other recoveries during the last 50 years, public-sector employment increased. This time it is falling: during the last year the private sector added 1.8 million jobs while the public sector cut 550,000.

What should policy makers do to combat the large and lingering job losses that result from a financial crisis and balance-sheet recession? Mr. Koo, whose book on Japan’s experience should be required reading for members of Congress, showed that when the private sector is curtailing spending, fiscal stimulus to increase growth and reduce unemployment is the most effective way to reduce the private-sector debt overhang choking private spending.

When the Japanese government tried fiscal consolidation to slow the growth of government debt in response to International Monetary Fund advice in 1997, the results were economic contraction and an increase in the government deficit. In contrast, when the Japanese government increased government spending, the pace of recovery strengthened and the deficit as a share of gross domestic product declined….” (“Recovering from a Balance-Sheet Recession”, Laura D’Andrea Tyson, New York Times)

Did you catch that? When the Japanese government tried to decrease the deficits by slashing spending, they increased the deficits. This is the lesson that every country in the EU –which has applied the ECB-IMF austerity measures—has learned. Cutting spending when the economy is weak is bad policy and bad economics. Struggling economies must "growth" their way out off of recession by spending liberally and putting people back to work, thus adding to government revenues. Here’s Tyson again explaining why this is so:

“The market understands that the most important driver of the fiscal deficit in the short to medium run is weak tax revenues, reflecting slow growth and high unemployment, and that additional fiscal measures to put people back to work are the most effective way to reduce the deficit.

“Every one percentage point of growth adds about $2.5 trillion in government revenue. An extra percentage point of growth over the next five years would do more to reduce the deficit during that period than any of the spending cuts currently under discussion. And faster growth would make it easier for the private sector to reduce its debt burden….Under these conditions, slow growth leads to a higher debt ratio, not vice versa…” (“Recovering from a Balance-Sheet Recession”, Laura D’Andrea Tyson, New York Times)

So, how do we speed up the deleveraging process so the economy can get back on track?


First, the government must be committed to long-term “sustained” fiscal stimulus until the share of household debt to disposable income returns to normal. Second, there should be a restructuring of household and personal debts “including”,– as economist Carmen Reinhart says– “debt forgiveness for low-income Americans”….


“Until we deal head-on with the fact that some of those debts are not ever going to be repaid, we will continue to have this shadow over growth”, Reinhart told Bloomberg News last weekend.


Debt repudiation, principle write-downs on underwater mortgages and amnesty on delinquent student loans should all be added to the mix of stimulants to future growth.


Finally–along with federally-funded government jobs programs (a revised WPA, etc)–Congress needs to address the chronic supply-demand imbalance that has emerged from Labor’s dwindling share in corporate profits. The imbalance has now reached historic levels which has widened gross inequality and threatens to keep the economy in a semi-permanent state of Depression. Here’s a quick summary from Barry Ritholtz’s “The Big Picture”:

“Labor share averaged 64.3 percent from 1947 to 2000. Labor share has declined over the past decade, falling to its lowest point in the third quarter of 2010, 57.8 percent. The change in labor share from one period to the next has become a major factor contributing to the compensation–productivity gap in the nonfarm business sector….

While Labor Share has recently plummeted to all-time lows since record keeping began, Median Household Income has stagnated for the past 12 years. In the last recession (2001), incomes had only begun to decline…. One decade later, Labor Share has collapsed, incomes have gone nowhere, and credit availability… has all but vanished except for the most creditworthy…” (“The Heart of the Matter”, The Big Picture)

Not only is labor getting a smaller and smaller piece of the pie, but, also, financial engineering–spurred-on by low interest rates and deregulation–has given rise to consecutive credit bubbles which have transferred a larger share of pension and retirement fund-wealth to Wall Street speculators. So, working people are not just getting screwed on their labor, the government and central bank are actually helping to facilitate the pilfering of their savings.


At the same time, corporate profits have continued to skyrocket. As the Wall Street Journal’s Kelly Evans notes, “Since the recession ended in mid-2009, U.S. corporate profits have jumped by about 43 per cent to a record $1.45 trillion as of the first quarter, after taxes, inventory and accounting adjustments, according to the Commerce Department.” (“More Liquidity Only Douses Growth Sparks”, Wall Street Journal)


So, despite sky-high unemployment, household deleveraging, historic inequality and slow growth; profits keep rising. Is there any doubt about whose interests are being served.


The only way out of the mess that workers find themselves in, is through politics. And–on that score–FDR said it best:

“We cannot allow our economic life to be controlled by that small group of men whose chief outlook upon the social welfare is tinctured by the fact that they can make huge profits from the lending of money and the marketing of securities–an outlook which deserves the adjectives ‘selfish’ and ‘opportunist.’” –Franklin Delano Roosevelt, “FDR Explains the Crisis: Why it feels like 1932″, Pam Martens, CounterPunch.

American Decline: Causes and Consequences

by Noam Chomskyal-Akhbar, August 24, 2011

In the 2011 summer issue of the journal of the American Academy of Political Science, we read that it is "a common theme" that the United States, which "only a few years ago was hailed to stride the world as a colossus with unparalleled power and unmatched appeal -- is in decline, ominously facing the prospect of its final decay." It is indeed a common theme, widely believed, and with some reason. But an appraisal of US foreign policy and influence abroad and the strength of its domestic economy and political institutions at home suggests that a number of qualifications are in order. To begin with, the decline has in fact been proceeding since the high point of US power shortly after World War II, and the remarkable rhetoric of the several years of triumphalism in the 1990s was mostly self-delusion.

Furthermore, the commonly drawn corollary -- that power will shift to China and India -- is highly dubious. They are poor countries with severe internal problems. The world is surely becoming more diverse, but despite America's decline, in the foreseeable future there is no competitor for global hegemonic power.

To review briefly some of the relevant history: During World War II, US planners recognized that the US would emerge from the war in a position of overwhelming power. It is quite clear from the documentary record that "President Roosevelt was aiming at United States hegemony in the postwar world," to quote the assessment of diplomatic historian Geoffrey Warner. Plans were developed to control what was called a Grand Area, a region encompassing the Western Hemisphere, the Far East, the former British empire -- including the crucial Middle East oil reserves -- and as much of Eurasia as possible, or at the very least its core industrial regions in Western Europe and the southern European states. The latter were regarded as essential for ensuring control of Middle East energy resources. Within these expansive domains, the US was to maintain "unquestioned power" with "military and economic supremacy," while ensuring the "limitation of any exercise of sovereignty" by states that might interfere with its global designs. The doctrines still prevail, though their reach has declined.

Wartime plans, soon to be carefully implemented, were not unrealistic. The US had long been by far the richest country in the world. The war ended the Depression and US industrial capacity almost quadrupled, while rivals were decimated. At the war's end, the US had half the world's wealth and unmatched security. Each region of the Grand Area was assigned its 'function' within the global system. The ensuing 'Cold War' consisted largely of efforts by the two superpowers to enforce order on their own domains: for the USSR, Eastern Europe; for the US, most of the world. By 1949, the Grand Area was already seriously eroding with "the loss of China," as it is routinely called. The phrase is interesting: one can only 'lose' what one possesses. Shortly after, Southeast Asia began to fall out of control, leading to Washington's horrendous Indochina wars and the huge massacres in Indonesia in 1965 as US dominance was restored. Meanwhile, subversion and massive violence continued elsewhere in the effort to maintain what is called 'stability,' meaning conformity to US demands.

But decline was inevitable, as the industrial world reconstructed and decolonization pursued its agonizing course. By 1970, US share of world wealth had declined to about 25%, still colossal but sharply reduced. The industrial world was becoming 'tripolar,' with major centers in the US, Europe, and Asia -- then Japan-centered -- already becoming the most dynamic region.

Twenty years later the USSR collapsed. Washington's reaction teaches us a good deal about the reality of the Cold War. The Bush I administration, then in office, immediately declared that policies would remain pretty much unchanged, but under different pretexts. The huge military establishment would be maintained, but not for defense against the Russians; rather, to confront the "technological sophistication" of third world powers. Similarly, they reasoned, it would be necessary to maintain "the defense industrial base," a euphemism for advanced industry, highly reliant on government subsidy and initiative. Intervention forces still had to be aimed at the Middle East, where the serious problems "could not be laid at the Kremlin's door," contrary to half a century of deceit. It was quietly conceded that the problems had always been "radical nationalism," that is, attempts by countries to pursue an independent course in violation of Grand Area principles. These policy fundamentals were not modified. The Clinton administration declared that the US has the right to use military force unilaterally to ensure "uninhibited access to key markets, energy supplies, and strategic resources." It also declared that military forces must be "forward deployed" in Europe and Asia "in order to shape people's opinions about us," not by gentle persuasion, and "to shape events that will affect our livelihood and our security." Instead of being reduced or eliminated, as propaganda would have led one to expect, NATO was expanded to the East. This was in violation of verbal pledges to Mikhail Gorbachev when he agreed to allow a unified Germany to join NATO.

Today, NATO has become a global intervention force under US command, with the official task of controlling the international energy system, sea lanes, pipelines, and whatever else the hegemonic power determines.

There was indeed a period of euphoria after the collapse of the superpower enemy, with excited tales about "the end of history" and awed acclaim for Clinton's foreign policy. Prominent intellectuals declared the onset of a "noble phase" with a "saintly glow," as for the first time in history a nation was guided by "altruism" and dedicated to "principles and values;" and nothing stood in the way of the "idealistic New World bent on ending inhumanity," which could at last carry forward unhindered the emerging international norm of humanitarian intervention.

Not all were so enraptured. The traditional victims, the Global South, bitterly condemned "the so-called 'right' of humanitarian intervention," recognizing it to be just the old "right" of imperial domination. More sober voices at home among the policy elite could perceive that for much of the world, the US was "becoming the rogue superpower," considered "the single greatest external threat to their societies," and that "the prime rogue state today is the United States." After Bush Jr. took over, increasingly hostile world opinion could scarcely be ignored. In the Arab world particularly, Bush's approval ratings plummeted. Obama has achieved the impressive feat of sinking still lower, down to 5% in Egypt and not much higher elsewhere in the region.

Meanwhile, decline continued. In the past decade, South America has been 'lost.' The 'threat' of losing South America had loomed decades earlier. As the Nixon administration was planning the destruction of Chilean democracy, and the installation of a US-backed Pinochet dictatorship -- the National Security Council warned that if the US could not control Latin America, it could not expect "to achieve a successful order elsewhere in the world."

But far more serious would be moves towards independence in the Middle East. Post WWII planning recognized that control of the incomparable energy reserves of the Middle East would yield "substantial control of the world," in the words of the influential Roosevelt advisor A.A. Berle. Correspondingly, that loss of control would threaten the project of global dominance that was clearly articulated during World War II and has been sustained in the face of major changes in world order ever since.

A further danger to US hegemony was the possibility of meaningful moves towards democracy. New York Times executive editor Bill Keller writes movingly of Washington's "yearning to embrace the aspiring democrats across North Africa and the Middle East." But recent polls of Arab opinion reveal very clearly that functioning democracy where public opinion influences policy would be disastrous for Washington. Not surprisingly, the first few steps in Egypt's foreign policy after ousting Mubarak have been strongly opposed by the US and its Israeli client.

While longstanding US policies remain stable, with tactical adjustments, under Obama there have been some significant changes. Military analyst Yochi Dreazen observes in the Atlantic that Bush's policy was to capture (and torture) suspects, while Obama simply assassinates them, with a rapid increase in terror weapons (drones) and the use of Special Forces, many of them assassination teams. Special Forces are scheduled to operate in 120 countries. Now as large as Canada's entire military, these forces are, in effect, a private army of the president, a matter discussed in detail by American investigative journalist Nick Turse on the website Tomdispatch. The team that Obama dispatched to assassinate Osama bin Laden had already carried out perhaps a dozen similar missions in Pakistan.

As these and many other developments illustrate, though America's hegemony has declined, its ambition has not.

Another common theme, at least among those who are not willfully blind, is that American decline is in no small measure self-inflicted. The comic opera in Washington this summer, which disgusts the country (a large majority think that Congress should just be disbanded) and bewilders the world, has few analogues in the annals of parliamentary democracy. The spectacle is even coming to frighten the sponsors of the charade. Corporate power is now concerned that the extremists they helped put in office in Congress may choose to bring down the edifice on which their own wealth and privilege relies, the powerful nanny state that caters to their interests.

The eminent American philosopher John Dewey once described politics as "the shadow cast on society by big business," warning that "attenuation of the shadow will not change the substance." Since the 1970s, the shadow has become a dark cloud enveloping society and the political system. Corporate power, by now largely financial capital, has reached the point that both political organizations, which now barely resemble traditional parties, are far to the right of the population on the major issues under debate.

For the public, the primary domestic concern, rightly, is the severe crisis of unemployment. Under current circumstances, that critical problem can be overcome only by a significant government stimulus, well beyond the recent one, which barely matched decline in state and local spending, though even that limited initiative did probably save millions of jobs. For financial institutions the primary concern is the deficit. Therefore, only the deficit is under discussion. A large majority of the population favor addressing the deficit by taxing the very rich (72% for, 21% opposed). Cutting health programs is opposed by overwhelming majorities (69% Medicaid, 79% Medicare). The likely outcome is therefore the opposite.

Reporting the results of a study of how the public would eliminate the deficit, its director, Steven Kull, writes that "clearly both the administration and the Republican-led House are out of step with the public's values and priorities in regard to the budget…The biggest difference in spending is that the public favored deep cuts in defense spending, while the administration and the House propose modest increases…The public also favored more spending on job training, education, and pollution control than did either the administration or the House."

The costs of the Bush-Obama wars in Iraq and Afghanistan are now estimated to run as high as $4.4 trillion -- a major victory for Osama bin Laden, whose announced goal was to bankrupt America by drawing it into a trap. The 2011 military budget -- almost matching that of the rest of the world combined -- is higher in real terms than at any time since World War II and is slated to go even higher . The deficit crisis is largely manufactured as a weapon to destroy hated social programs on which a large part of the population relies. Economics correspondent Martin Wolf of the London Financial Times writes that "it is not that tackling the US fiscal position is urgent…. The US is able to borrow on easy terms, with yields on 10-year bonds close to 3 percent, as the few non-hysterics predicted. The fiscal challenge is long term, not immediate." Very significantly, he adds: "The astonishing feature of the federal fiscal position is that revenues are forecast to be a mere 14.4 percent of GDP in 2011, far below their postwar average of close to 18 percent. Individual income tax is forecast to be a mere 6.3 percent of GDP in 2011. This non-American cannot understand what the fuss is about: in 1988, at the end of Ronald Reagan's term, receipts were 18.2 percent of GDP. Tax revenue has to rise substantially if the deficit is to close." Astonishing indeed, but it is the demand of the financial institutions and the super-rich, and in a rapidly declining democracy, that's what counts.

Though the deficit crisis is manufactured for reasons of savage class war, the long-term debt crisis is serious, and has been ever since Ronald Reagan's fiscal irresponsibility turned the US from the world's leading creditor to the world's leading debtor, tripling national debt and raising threats to the economy that were rapidly escalated by George W. Bush. But for now, it is the crisis of unemployment that is the gravest concern.

The final 'compromise' on the crisis -- more accurately, a capitulation to the far right -- is the opposite of what the public wants throughout, and is almost certain to lead to slower growth and long-term harm to all but the rich and corporations, which are enjoying record profits. Few serious economists would disagree with Harvard economist Lawrence Summers that "America's current problem is much more a jobs and growth deficit than an excessive budget deficit," and that the deal reached in Washington in August, though preferable to a highly unlikely default, is likely to cause further harm to a deteriorating economy.

Not even discussed is the fact that the deficit would be eliminated if the dysfunctional privatized health care system in the US were replaced by one similar to other industrial societies, which have half the per person costs and at least comparable health outcomes. The financial institutions and pharmaceutical industry are far too powerful for such options even to be considered, though the thought seems hardly Utopian. Off the agenda for similar reasons are other economically sensible options, such as a small financial transactions tax.

Meanwhile, new gifts are regularly lavished on Wall Street. The House Appropriations Committee cut the budget request for the Securities and Exchange Commission, the prime barrier against financial fraud. The Consumer Protection Agency is unlikely to survive intact. And Congress wields other weapons in its battle against future generations. In the face of Republican opposition to environmental protection, "A major American utility is shelving the nation's most prominent effort to capture carbon dioxide from an existing coal-burning power plant, dealing a severe blow to efforts to rein in emissions responsible for global warming," the New York Times reports.

The self-inflicted blows, while increasingly powerful, are not a recent innovation. They trace back to the 1970s, when the national political economy underwent major transformations, bringing to an end what is commonly called "the Golden Age" of (state) capitalism. Two major elements were financialization and offshoring of production, both related to the decline in rate of profit in manufacturing, and the dismantling of the post-war Bretton Woods system of capital controls and regulated currencies. The ideological triumph of "free market doctrines," highly selective as always, administered further blows, as they were translated into deregulation, rules of corporate governance linking huge CEO rewards to short-term profit, and other such policy decisions. The resulting concentration of wealth yielded greater political power, accelerating a vicious cycle that has led to extraordinary wealth for a tenth of one percent of the population, mainly CEOs of major corporations, hedge fund managers, and the like, while for the large majority real incomes have virtually stagnated.

In parallel, the cost of elections skyrocketed, driving both parties even deeper into corporate pockets. What remains of political democracy has been undermined further as both parties have turned to auctioning congressional leadership positions. Political economist Thomas Ferguson observes that "uniquely among legislatures in the developed world, U.S. congressional parties now post prices for key slots in the lawmaking process." The legislators who fund the party get the posts, virtually compelling them to become servants of private capital even beyond the norm. The result, Ferguson continues, is that debates "rely heavily on the endless repetition of a handful of slogans that have been battle tested for their appeal to national investor blocs and interest groups that the leadership relies on for resources."

The post-Golden Age economy is enacting a nightmare envisaged by the classical economists, Adam Smith and David Ricardo. Both recognized that if British merchants and manufacturers invested abroad and relied on imports, they would profit, but England would suffer. Both hoped that these consequences would be averted by home bias, a preference to do business in the home country and see it grow and develop. Ricardo hoped that thanks to home bias, most men of property would "be satisfied with the low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations.

In the past 30 years, the "masters of mankind," as Smith called them, have abandoned any sentimental concern for the welfare of their own society, concentrating instead on short-term gain and huge bonuses, the country be damned -- as long as the powerful nanny state remains intact to serve their interests.

A graphic illustration appeared on the front page of the New York Times on August 4. Two major stories appear side by side. One discusses how Republicans fervently oppose any deal "that involves increased revenues" -- a euphemism for taxes on the rich. The other is headlined "Even Marked Up, Luxury Goods Fly Off Shelves." The pretext for cutting taxes on the rich and corporations to ridiculous lows is that they will invest in creating jobs -- which they cannot do now as their pockets are bulging with record profits.

The developing picture is aptly described in a brochure for investors produced by banking giant Citigroup. The bank's analysts describe a global society that is dividing into two blocs: the plutonomy and the rest. In such a world, growth is powered by the wealthy few, and largely consumed by them. Then there are the 'non-rich,' the vast majority, now sometimes called the global precariat, the workforce living a precarious existence. In the US, they are subject to "growing worker insecurity," the basis for a healthy economy, as Federal Reserve chair Alan Greenspan explained to Congress while lauding his performance in economic management. This is the real shift of power in global society.

The Citigroup analysts advise investors to focus on the very rich, where the action is. Their "Plutonomy Stock Basket," as they call it, far outperformed the world index of developed markets since 1985, when the Reagan-Thatcher economic programs of enriching the very wealthy were really taking off.

Before the 2007 crash for which the new post-Golden Age financial institutions were largely responsible, these institutions had gained startling economic power, more than tripling their share of corporate profits. After the crash, a number of economists began to inquire into their function in purely economic terms. Nobel laureate in economics Robert Solow concludes that their general impact is probably negative: "the successes probably add little or nothing to the efficiency of the real economy, while the disasters transfer wealth from taxpayers to financiers."

By shredding the remnants of political democracy, they lay the basis for carrying the lethal process forward -- as long as their victims are willing to suffer in silence.

Google Confirms It Aims to Own Your Online ID

Amid a furor over Google+'s ban on pseudonymity and anonymity, Google Chairman Eric Schmidt just admitted the company intends to be an 'identity service"

By Mathew Ingram
Ever since Google (GOOG) launched its new Google+ social network, we and others have pointed out that the search giant clearly has more in mind than just providing a nice place for people to share photos of their pets. For one thing, Google needs to tap into the “social signals” that people provide through networks such as Facebook so it can improve its search results. There’s a larger motive, too: As Chairman and former Chief Executive Officer Eric Schmidt admitted during an interview in Edinburgh over the weekend, Google is taking a hard line on the real-name issue because it sees Google+ as an “identity service” or platform on which it can build other products.

Schmidt’s comments came during an interview with Andy Carvin, the National Public Radio digital editor who has become a one-man newswire during the Arab Spring revolutions.

Carvin asked the Google chairman about the company’s reasoning for pushing its real-name policies on Google+—a policy that many have criticized (including us) because it excludes potentially valuable viewpoints that might be expressed by political dissidents and others who prefer to remain anonymous. In effect, Schmidt said Google isn’t interested in changing its policies to accommodate those kinds of users: If people want to remain anonymous, he said, then they shouldn’t use Google+.

Google+ is primarily an “identity service”It was the former Google CEO’s remarks about the rationale for this policy that were most interesting: He didn’t just say—as Vic Gundotra, the Google executive in charge of the new social network has—that having real names maintains a certain tone of behavior that is preferable to anonymous forums (an argument that online-community pioneer Derek Powazek has also made). According to Carvin, Schmidt said the reason Google needs users with real names is that the company sees Google+ as the core of an identity platform it is building that can be used for other things:

He (Eric) replied by saying that G+ was built primarily as an identity service, so fundamentally it depends on people using their real names if they’re going to build future products that leverage that information.

As Union Square Ventures partner Fred Wilson noted in a blog post in response to Schmidt’s comments, this is an admission by the company that it wants to be an identity gatekeeper.

Others have made similar observations since the launch of Google+. Programmer and online veteran Dave Winer, for example, said—when the real-name policy first started to become a hot-button issue—that Google’s purpose was clearly to “provide identity in a commerce-ready way. And to give them information about what you do on the Internet, without obfuscation of pseudonyms.” In his blog post, Fred Wilson said:

It begs the question of whom Google built this service for? You or them. And the answer to why you need to use your real name in the service is because they need you to.

Real names are more valuable to advertisersAs I tried to outline in a recent GigaOM Pro research report entitled “How social search is changing the search industry” (subscription required), there’s an obvious search-related rationale for launching a social network such as Google+ because indexing and mining that kind of activity can help the company provide better “social search” results. But the real-name issue has more to do with Google’s other business: namely, advertising. Users who are anonymous or pseudonymous are arguably a lot less valuable to advertisers than those who choose to attach their real identitie—including their age, gender, location, and further demographic details—to their accounts.

What kind of services is Schmidt referring to when he says that Google is looking at Google+ as an identity platform that could support other services? Dave Winer thinks the company wants to effectively become a bank—something he suspects Apple (AAPL) and Amazon (AMZN) are interested in as well. Apple and Google both seem interested in NFC technology (near-field communication), which turns mobile devices into electronic wallets; having a social network tied to an individual user’s identity would come in handy. Ross Dawson says Google wants to build a “reputation engine,” using Google+ as a platform.

Whatever its specific interests, Google clearly sees Facebook as a competitive threat, not just because it has developed a gigantic social network with hundreds of millions of devoted users, but because it has also become a kind of identity gatekeeper—with tens of millions of those devoted users happily logging into other websites and services with their Facebook credentials, thus sending Facebook valuable data about what they are doing and where they are doing it. The ubiquitous “like” button provides even further data, something Google is also trying to mimic with its +1 buttons.

Google needs a horse in the identity raceThe bottom line is that Google needs to have a horse in this identity race. It has been unable to create one so far. The growth of Google+ provides a reason for people to create Google profiles, and that data—along with their activity on the network and through +1 buttons—goes into the vast Google cyberplex where it can be crunched and indexed and codified in a hundred ways. The more people who decide to do it, the better it gets, both for Google and for its advertising strategy. As the saying goes: If you’re not paying for it, then you’re the product being sold.

That’s the obvious background to the real-name issue, something Eric Schmidt has effectively confirmed with his remarks in Edinburgh. It remains to be seen if users like the position that puts them in.

Harold Simmons, the Shady Mega-Billionaire Pouring Money into Rick Perry's Coffers

Most Americans have never heard of Harold Simmons, despite his fantastic wealth, because he wisely keeps his head low. 

By Joe Conason, AlterNet
Posted on August 31, 2011


Like so many Republican officials of the tea party persuasion, Rick Perry despises the Environmental Protection Agency—a feeling he has expressed repeatedly in speeches, lawsuits, legislation and even a book titled “Fed Up!” Perhaps that is only natural for the governor of Texas, a “dirty energy” state where the protection of air, water and human health rank well below the defense of oil company profits for most politicians.

But Perry has at least one other reason for smacking down those bureaucrats so eagerly. When environmental regulators do their job properly, that can mean serious trouble for Perry’s largest political donors.

The outstanding example is Harold Simmons, a Dallas mega-billionaire industrialist who has donated well over a million dollars to Perry’s campaign committees recently. With Perry’s eager assistance—and despite warnings from Texas environmental officials—Simmons has gotten approval to build an enormous radioactive waste dump on top of a crucial underground water supply.

“We first had to change the law to where a private company can own a license, and we did that,” Simmons boasted in 2006, after the Texas Legislature and the governor rubber-stamped initial legislation and approvals for the project. “Then we got another law passed that said (the state) can only issue one license. Of course, we were the only ones that applied.”

Most Americans have never heard of Simmons, despite his fantastic wealth, because he wisely keeps his head low, generally refusing press interviews and avoiding media coverage. Last year, a local monthly in his hometown published the headline “Dallas’ Evil Genius” over a scathing and fascinating investigative profile that examined not only the peculiar history of litigation between Simmons and his children (who no longer speak to him), but his political machinations, corporate raiding and continuing corporate penchant for pollution.

In D magazine, reporter Laray Polk explained how Simmons and a company he owns—innocuously named Waste Control Systems—manipulated state and federal law to allow him to build a nuclear-waste disposal site in West Texas. But construction has been delayed for years in part because the site appears to overlay the Oglalla Aquifer, an underground water supply that serves 1.9 million people in nine states, raising obvious concerns over radioactive contamination. In the Simmons profile and subsequent posts on the Investigative Fund website last year, Polk explored the controversy over the proposed WCS facility, including strong objections by staff analysts at the Texas Commission on Environmental Quality who found evidence that atomic waste might indeed leach into a huge pool of drinking water.

Now reporters for The Los Angeles Times have revived, advanced and updated the WCS story with much additional detail, including interviews with the Texas environmental officials who oversaw the approval process for the facility. For a period last summer, that process appeared to have been slowed down to allow serious consideration of the scientific data collected by the commission’s staff.

In other words, the regulators were trying to do their job, which meant expensive delays and perhaps an eventual ruling against the nuclear waste site. That would have protected the Oglalla Aquifer and cost Simmons hundreds of millions in lost investment and profit. But then Perry’s appointees on the commission voted by two to one to issue licenses for the WCS site.

This year, officials on another Texas commission appointed by Perry—who oversee low-level radioactive waste in the state—voted to allow the WCS site to accept nuclear waste from 34 other states in a highly controversial decision later ratified by the state Legislature and signed by Perry himself. Not long after that, according to The Los Angeles Times’ report, Simmons gave $100,000 to Americans for Rick Perry, an “independent” committee supporting his presidential candidacy. (Back in 2004, Simmons was a major contributor to another “independent” political committee, the notorious Swift Boat Veterans group that distorted Democratic presidential nominee John Kerry’s war record in a series of TV ads.)

According to a spokesman for WCS, the Texas governor’s happy and lucrative relationship with Simmons did nothing to help the company except to turn the billionaire into “an easy target. ... It made the state redouble its efforts to be thorough.” But the Texas officials who opposed the approval on principle have since quit their jobs with the state. As one of them told the L.A. Times reporters, “This is a stunningly horrible public policy to grant a license to this company for that site ... . Something had to happen to overcome the quite blatant shortcoming of that application. ... The only thing I know in Texas that has the potential to do that is money in politics.”

As for the Texas official (and Perry appointee) who overruled his own scientists and approved the deal, he left state government, too—to work as a lobbyist for Simmons. He says that no undue influence led to the favorable outcome for his new employer.

Texas must be the only place on earth where anyone would believe that.

War Crimes & Deceit of Shakespearean Proportions (2 articles)

Wednesday, August 31, 2011 by TruthDig.com

by Robert Scheer

 

Former Vice President Dick Cheney 

Behold this unctuous knave, a disgrace to his nation as few before him, yet boasting unvarnished virtue. The deceit of Dick Cheney is indeed of Shakespearean proportions, as evidenced in his new memoir. For the former vice president, lying comes so easily that one must assume he takes the pursuit of truth to be nothing more than a reckless indulgence.

Here is a man who, more than anyone else in the Bush administration, trafficked in the campaign of deceit that caused tens of thousands to die, wasted trillions of dollars in resources and indelibly sullied the legacy of this nation through the practice of torture, which Cheney defends to this day. Still this villain claims that, despite the overwhelming evidence to the contrary, the horrid methods he endorsed were a necessary response to the threat of Osama bin Laden. How convenient to ignore that it was Barack Obama, a resolutely anti-torture president, who made good on the promise of Cheney and the previous administration to take down the al-Qaida leader. 

Not to mention that bin Laden was killed in his hiding place in Pakistan, a nation that the Bush administration had befriended after 9/11 by lifting the sanctions previously imposed in retaliation for Pakistan’s nuclear weapons program, a program connected with the proliferation of nuclear weapons know-how and the sale of nuclear material to North Korea, Libya and Iran.

Pakistan joined with only two other nations, Saudi Arabia and the United Arab Emirates, in granting diplomatic recognition to the Taliban government that provided a safe haven for al-Qaida as bin Laden orchestrated the 9/11 attack. But instead of focusing on the source of the problem, Cheney led the effort to overthrow Saddam Hussein, who had ruthlessly hounded any al-Qaida operatives who dared function in Iraq.

You don’t have to slog too deeply through Dick Cheney’s advertisement for himself to grasp not only the wicked cynicism of the man but also how shallow are his perceptions. He recalls his college years in the 1960s, when he was a draft-deferred young Republican during America’s murderous adventure in Vietnam—in which more than 3 million Indochinese and 59,000 Americans were killed—as a time of career advancement through strategic Washington appointments.

The war that left Martin Luther King Jr. condemning his own government as “the greatest purveyor of violence in the world today” is condemned in Cheney’s memoir only for the reactive violence that he attributes to anti-war student protesters. We are told, in a reminiscence of his days as a graduate student at the University of Wisconsin, that “in May 1969, students threw rocks and bottles at police trying to shut down a party on Mifflin Street,” but there is nothing of napalmed Vietnamese or U.S. troops in body bags.

That same May, young Cheney’s Republican contacts in Washington would pay off when he secured an appointment in the Nixon administration working for none other than Donald Rumsfeld. Cheney recalls that he didn’t know he was “signing up for a forty-year career in politics and government—but that was exactly the right call.”

Those 40 years, interrupted by a lucrative stint at defense contractor Halliburton, saw Cheney rise to become secretary of defense and later vice president, presiding over wars that put him in considerable conflict with Colin Powell. It is Powell—who was experiencing the reality of war in Vietnam at the time Cheney was winning bureaucratic battles in Washington—who is scorned in Cheney’s memoir as the hopeless dove.

It was the more cautious war veteran Powell who, as chairman of the Joint Chiefs of Staff during the first Iraq war, proved to be far more effective as a leader than Cheney, who was then secretary of defense. What is confirmed by Cheney’s memoir is that he seized upon the second Iraq invasion as a way of settling scores with his adversary by assuming the role of an ultra-militarist.

Powell, who, inside the administration, clearly opposed the invasion of Iraq—“If you break it, you own it”—was cast as a puppet who in a dramatic appearance before the United Nations lied to the world when he said Iraq possessed weapons of mass destruction. But despite Powell’s woefully misplaced sense of loyalty to President George W. Bush, Cheney is merciless in condemning the general for allegedly undermining the administration. Powell has fired back at what he termed Cheney’s “cheap shots” and reminds us that “Mr. Cheney and many of his colleagues did not prepare for what happened after the fall of Baghdad.”

It is not clear that Cheney is a true believer in military mayhem as much as he is an uncontrollable careerist who finds war talk a convenient tool for advancement. He seems to have no real sense of the cost of the Iraq War beyond what it might have done to hurt his own legacy. If his memoir has any enduring value, it is not as another offering of hollow excuses for an unjustifiable war but rather as a study in what the famed historian of European fascism, Hannah Arendt, termed the “banality of evil.”

++++

Wednesday, August 31, 2011 by Raw Story

Former Bush Official Promises to Testify if Someone Will ‘Pinochet’ Cheney

by David Edwards 

The former chief of staff to Secretary of State Colin Powell pledged Tuesday to testify against former Vice President Dick Cheney if he is ever tried for war crimes.

Col. Lawrence Wilkerson told Democracy Now‘s Amy Goodman that he would participate in a trial even if it meant personal repercussions.

“I, unfortunately — and I’ve admitted to this a number of times, publicly and privately — was the person who put together Colin Powell’s presentation at the United Nations Security Council on 5 February, 2003,” Wilkerson said. “It was probably the biggest mistake of my life. I regret it to this day. I regret not having resigned over it.”

In an interview that aired on NBC Monday, Cheney told Jamie Gangel that unlike President George W. Bush, he did not have a “sickening feeling” when they discovered there were no weapons of mass destruction after the invasion of Iraq.

“I think we did the right thing,” Cheney said.

Joining Wilkerson and Goodman to discuss Cheney’s new book “In My Time,” Salon’s Glenn Greenwald said that it was disturbing to see the former vice president treated simply as an “elder statesman.”

“The evidence is overwhelming… that Dick Cheney is not just a political figure with controversial views, but is an actual criminal, that he was centrally involved in a whole variety not just of war crimes in Iraq, but of domestic crimes, as well, including the authorization of warrantless eavesdropping on American citizens in violation of FISA, which says that you go to jail for five years for each offense, as well as the authorization and implementation of a worldwide torture regime that, according to General Barry McCaffrey, resulted in the murder — his word — of dozens of detainees, far beyond just the three or four cases of waterboarding that media figures typically ask Cheney about,” Greenwald explained.

“And as a result, Dick Cheney goes around the country profiting off of this, you know, sleazy, sensationalistic, self-serving book, basically profiting from his crimes, and at the same time normalizing the idea that these kind of policies, though maybe in the view of some wrongheaded, are perfectly legitimate political choices to make. And I think that’s the really damaging legacy from all of this.”

“Colonel Wilkerson, do you think the Bush administration officials should be held accountable in the way that Glenn Greenwald is talking about?” Goodman asked.

“I certainly do,” Wilkerson replied. “And I’d be willing to testify, and I’d be willing to take any punishment I’m due. And I have to say, I agree with almost everything [Greenwald] just said. And I think that explains the aggressiveness, to a large extent, of the Cheney attack and of the words like ‘exploding heads all over Washington.’ This is a book written out of fear, fear that one day someone will ‘Pinochet’ Dick Cheney.”

Wilkerson was referring to former Chilean dictator Augusto Pinochet, who was arrested in London in 1998 after being indicted for crimes against humanity. It was the first time the principle of universal jurisdiction had been applied to a former foreign head of state.

Watch this video from Democracy Now, broadcast Aug. 30, 2011.

Guy Fawkes = Time Warner

Guy Fawkes = Time Warner

 

It seems every time an Anonymous protester buys and wears the Guy Fawkes mask made famous by the rogue anarchist in the film V for Vendetta, massive corporate conglomerate Time-Warner - which owns the rights to the image - makes a buck or so. Oops.

EL EMPLEO (Employment)

www.opusbou.com.ar
info@opusbou.com.ar

Cortometraje de animación / animated short film
Ganador de 98 premios internacionales / Winner of 98 international awards.

Dirección / Direction: Santiago 'Bou' Grasso
Idea: Patricio Plaza
Animación / Animation: Santiago Grasso / Patricio Plaza
Diseño de títulos / Titles design: Natalia Acosta
Productora / Production company: Opusbou

Thousands of Public Employees Laid Off in 2010

Wednesday, August 31, 2011 by Rueters

Local and state governments axed more than 200,000 jobs in 2010, according to U.S. Census data released on Tuesday that showed the growing threat of public employee layoffs to the economic recovery.

According to the Census, local and state governments had 203,321 fewer full-time equivalent employees in 2010 than in 2009 and 27,567 fewer part-time employees. 

Most local governments cut full-time jobs in 2010, with the biggest decline in Rhode Island, where the workforce shrank 7.7 percent. Those in North Dakota, one of few states to go through the 2007-09 recession unscathed, added jobs in 2010, with its full-time workforce growing 7.5 percent in 2010.

It was the second year local governments lost part-time employees, with cities, counties and authorities in California shedding the most, 47,620.

The job losses have continued this year. John Lonski, chief economist for Moody's Capital Markets Research told Reuters this month that "we are looking at the worst contraction of state and local government employment since 1981."

Analysts polled by Reuters expect a report on Friday to show governments dropped another 30,000 jobs in August, marking the ninth consecutive month of contraction.

Public employees outnumber those in manufacturing, health and other areas typically considered engines of the economy. Local government provides the bulk of those jobs. In 2010, local governments had 12.2 million full-time equivalent employees, while state governments had 4.4 million.

The housing bust, financial crisis and recession devastated state and local tax revenues. For more than three years, states, cities and counties have cut spending, hiked taxes, borrowed and turned to the federal government for help in keeping their budgets balanced.
 
"Most state governments saw small decreases in full-time or full-time equivalent employment between 2009 and 2010," the Census said.

Rhode Island, Idaho and Connecticut state governments had the largest declines, each losing 5 percent of their workforces.

The tiny state of Rhode Island has endured pension funding problems and other budget headaches. Earlier this month its city of Central Falls filed for bankruptcy. Now the New England state is recovering from Hurricane Irene.

Most state governments increased their part-time workforces, especially Wisconsin, which picked up 5,063 jobs. Florida shed the most part-time positions, 3,555, or 7.5 percent of the jobs.

Some US Firms Paid More to CEOs and/or Lobbyists Than Taxes

Wednesday, August 31, 2011 by Reuters

by Nanette Byrnes 

 

WASHINGTON - Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study said on Wednesday.

It also found many of the companies spent more on lobbying than they did on taxes.

At a time when lawmakers are facing tough choices in a quest to slash the national debt, the report from the Institute for Policy Studies (IPS), a left-leaning Washington think tank, quickly hit a nerve.

After reading it, Democratic Representative Elijah Cummings, ranking member of the Committee on Oversight and Government Reform, called for hearings on executive compensation.

In a letter to that committee's chairman, Republican Darrell Issa, Cummings asked "to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."

He also asked "why CEO pay and corporate profits are skyrocketing while worker pay stagnates and unemployment remains unacceptably high," and "the extent to which our tax code may be encouraging these growing disparities."

In putting together its study, IPS chose to compare CEO pay to current U.S. taxes paid, excluding foreign and state and local taxes that may have been paid, as well as deferred taxes which can often be far larger than current taxes paid.

The group's rationale was that deferred taxes may or may not be paid, and that current U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year.

$16.7 MILLION AVERAGE

Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:

• eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.
• Boeing, which paid CEO Jim McNerney $13.8 billion, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending
• General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.

Though the companies come from different industries, their tax breaks fall into two primary areas.

Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg. The remaining companies benefited from accelerated depreciation.

Shareholders have responded favorably when companies in which they invest keep a tax bill low through legal methods, thereby benefiting earnings. But Chuck Collins, an IPS senior scholar and co-author of the report, said that is a mistake.

"I think it's an exposure of weakness in a company if their profitability is dependent on their accounting department and not on making better widgets," he said.

In prior reports, Collins said, out-sized CEO pay was often a red flag of bigger problems to come. The IPS has been putting a pay report together for 18 years. Among those whose leaders have made the high pay list in years past, only to have their businesses falter: Tyco, Enron and WorldCom.

Justice Dept. to Block AT&T's T-Mobile Deal

Wednesday, August 31, 2011 by CNET

by Don Reisinger 

 

The U.S. Department of Justice has filed suit in a federal court in Washington, D.C., to block AT&T's proposed takeover of T-Mobile USA.

The Justice Department said today in its filing with the U.S. District Court for the District of Columbia that the deal would "substantially lessen competition" in the wireless industry, and thus, should be blocked from approval. The lawsuit went on to say that the deal could potentially cause "higher prices, poorer quality services, fewer choices and fewer innovative products for the millions of American consumers who rely on mobile wireless services in their everyday lives."

"The combination of AT&T and T-Mobile would result in tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services," Deputy Attorney General James M. Cole said in a statement announcing the decision. "Consumers across the country, including those in rural areas and those with lower incomes, benefit from competition among the nation's wireless carriers, particularly the four remaining national carriers. This lawsuit seeks to ensure that everyone can continue to receive the benefits of that competition."

AT&T came out quickly against the Justice Department's decision. In an e-mailed statement to CNET, the company's senior executive vice president and general counsel, Wayne Watts, said that the company was blindsided by the Justice Department's decision.

"We are surprised and disappointed by today's action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated," Watts said. "At the end of the day, we believe facts will guide any final decision and the facts are clear. This merger will help solve our nation's spectrum exhaust situation and improve wireless service for millions; allow AT&T to expand 4G mobile broadband to another 55 million Americans, or 97 percent of the population; [and] result in billions of additional investment and tens of thousands of jobs, at a time when our nation needs them most."

Bloomberg was first to report on the news.

Earlier this year, AT&T announced its plans to acquire T-Mobile USA from Deutsche Telekom in a deal valued at $39 billion. As soon as the deal was announced, critics chimed in, saying that it could stifle competition in the marketplace and ultimately hurt both consumers and competitors. Sprint, which could be dwarfed by the combined AT&T and T-Mobile, was especially outspoken about the deal, saying that it would fight it to the end.

"Sprint urges the United States government to block this anticompetitive acquisition," the company said in a statement following the announcement of the deal. "This transaction will harm consumers and harm competition at a time when this country can least afford it. So on behalf of our customers, our industry, and our country, Sprint will fight this attempt by AT&T to undo the progress of the past 25 years and create a new Ma Bell duopoly."

Morrissey as superhero: Smiths songs are transformed into comics

US publisher hopes to create a series of comic-book stories based on songs by Morrissey and Johnny Marr

The Smiths' songs as comics – in pictures

Sean Michaels
guardian.co.uk, Wednesday 3 August 2011 

 
Unite and Take Over re-imagines Smiths songs as comic strips. Photograph: Jason Pedersen
 
What if the Smiths' songs were comics? An American publisher is taking that idea to the printing-press, organising a new anthology that transforms songs such as Girlfriend in a Coma and How Soon Is Now? into comic-book stories. Each tune will unspool as a four-to-eight-page comic strip, with the whole thing published in November. Unite and Take Over: Comic Stories Inspired by the Smiths is the brainchild of Shawn Demumbrum, a Phoenix, Arizona comics geek who clearly likes his Batman with a dash of melancholy. Instead of imagining Morrissey and Johnny Marr as vinyl-wielding superheroes who seek out happiness and, er, destroy it, the Smiths' influence on Unite and Take Over is subtle. "What's the story that plays in your head when you listen to your favourite Smiths songs?" he explains in a promotional video. The book's authors use these songs as "an inspiration, a jumping-off point, a theme or a mood". In an email to the Guardian, he added: "As a teen in the 80s, one of my favourite soundtracks was the Pretty in Pink soundtrack. While training for cross country, I played the cassette over and over on my Walkman as I ran. There was always something about the Smiths' Please Please Please Let Me Get What I Want. It tapped into my teenage psyche, a combination of loneliness and yet hopeful optimism, that only Morrissey's vocals seem to capture." Demumbrum is funding the project on the crowdsourcing website Kickstarter, hoping to raise $3,000 (£1,841) toward printing costs and ISBN codes, as well as to license song lyrics from the Smiths themselves. He has already gathered 13 writer/artist teams, each of whom will take on a different Smiths classic. Although the anthology lacks any major names, most of the contributors are indie comics veterans, including Christian Vilaire, Henry Barajas, Jeff Pina and Shelby Robertson. The finished product, which will run to at least 72 illustrated pages, is due out at the upcoming Tucson Comic-Con.

This October - The Walking Dead - Season 2 Trailer

The San Diego ComiCon Trailer

Perry Sought Profits from "Dead Peasants" Insurance on Elderly Texas Teachers

Rick Perry Sought State Profits From Teacher Life Insurance Scheme
First Posted: 8/25/11 - HuffPo

WASHINGTON -- Two weeks before Thanksgiving in 2003, top officials from Texas Governor Rick Perry's office pitched an unusual offer to the state's retired teachers: Let's get into the death business.

Perry's budget director, Mike Morrissey, laid out a pitch that was both ambitious and risky, according to notes summarizing the meeting provided to The Huffington Post.

According to the notes, which were authenticated by a meeting participant, the Perry administration wanted to help Wall Street investors gamble on how long retired Texas teachers would live. Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation.

All they had to do was convince retirees to let UBS buy life insurance policies on them. When the retirees died, those policies would pay out benefits to Wall Street speculators, and the state, supposedly, would get paid for arranging the bets. The families of the deceased former teachers would get nothing.

The meeting notes offer the most direct evidence that the Perry administration was not only intimately involved with the insurance scheme, but a leading driver of the plan.

It was a back-room deal at odds with Perry's public persona as a career politician who had successfully sold Texans on his vision of minimal government intrusion. And it still is. Nearly eight years after the meeting, when Perry formally announced his run for the presidency in Charleston, S.C., he honed that vision into the perfect applause line: "I'll promise you this," he had said in his West Texas drawl. "I'll work every day to try to make Washington, D.C. as inconsequential in your life as I can."

Death in Texas, on the other hand, is another matter. That first meeting with teacher groups and retirement plan officials in November 2003, recalled one attendee, was an effort by Perry's office to solicit support for the life insurance idea from teacher associations. There was little question who was promoting the plan.

"His office was pushing it," the source said. "It was like, 'We've got to do whatever we can. ... Here's an innovative idea. We really want you on board.'"

The governor's office was even prepared to put down a little cash up front. If retirees balked at the notion of the state profiting from their deaths, Perry's budget men suggested they could be persuaded for the cost of a pair of shoes, according to the meeting notes. If a retiree signed a contract allowing the state's teacher pension fund to buy life insurance on them, the governor was prepared to give them between $50 and $100.

"Precious little for what they were giving up," said the meeting attendee.

The notes make clear that the governor's proposal deliberately targeted the elderly. The state was only seeking to take out life insurance on people between the ages of 75 and 90. At a separate meeting five days later, the plan's proponents discussed the "mental capacity" of these retirees to grant consent as one of three major technical obstacles to the plan, according to notes from that meeting.

At the first meeting, Morrissey said it could take 10 to 12 years for Texas to "earn" money from the scheme, but insisted the deal could be worth up to $700 million for the state if the retirement fund could sign up 40,000 retired teachers.

The meeting notes show Insurance Commissioner Jose Montemayor, a Perry appointee, joined Morrissey in the sales pitch, claiming that "this arrangement" was already being utilized by "some very rich people" who had set up similar plans to benefit the University of Texas and Texas A&M.

"It was a pretty hard sell: 'This is something you need to get on board with,'" the source said, paraphrasing officials' comments at the meeting.

The source says the claim involving a similar program benefiting the Texas universities turned out to be untrue -- the "rich people" had taken out the policies themselves with the intent of sharing any life insurance payments with the universities. Montemayor, as insurance commissioner, would have had to waive "insurable interest" regulations to allow the schools to buy life insurance on their professors. There is no public record that he did so. The University of Texas and Texas A&M did not return requests for comment.

The aggressive push from the Perry administration differs remarkably from its later public characterization of its involvement in the deal. When the proposal leaked to the press that winter, the governor's spokespeople attempted to tamp down any notion that Perry was the engine behind the plan -- and said if there ever was a plan, it was nowhere near final.

That December, spokesman Gene Acuna told the Dallas Morning News that the plan was merely "a concept." "Questions are being answered, questions are being raised," he said. "Depending on the answers to those questions, plus input from all affected parties ... that will determine the next step."

In a January story in the Fort Worth Star-Telegram, another Perry spokesman attempted to create more distance between the governor and the plan. "We never endorsed any concept," said Robert Black. "The governor's opinion is that it's prudent to look at ideas and concepts ... particularly when it won't result in a loss of benefits or raising taxes to shore up the retirement system."

Messages left for Perry spokespeople requesting comment for this story were not returned. But the behind-the scenes meeting notes reveal Perry's office had not only endorsed the concept, but had already formulated a plan to implement it. That first meeting on Nov. 12 was run by Perry's staff. The man who would become the fall guy for the controversy -- former senator-turned-financier Phil Gramm -- was not even present.

THE GRAMM BARGAINGramm had made six-figure campaign contributions to Perry's campaign and had been -- and may still be -- one of Perry's most trusted political allies and personal mentors. "Perry worships at [Gramm's] feet, intellectually," said one semi-retired political consultant in Austin. "He considers Gramm an economic genius."

After lending political aid to Perry, Gramm was poised to make a fortune from the life insurance deal. His role in the scheme had the appearance of banal corruption and cronyism.

Although Gramm wasn't in on the first meeting with teacher groups, he played an active role in subsequent efforts to push the scheme.

It was Gramm who could make the plan a financial reality. He left the U.S. Senate in November 2002 for a lucrative vice president post at UBS. After Morrissey, Montemayor and Perry budget aide Brian Guthrie first articulated the plan on Nov. 12, Gramm came to Austin to help push the deal. That move eventually prompted Texas Democrats to file an ethics complaint against Gramm for making a the pitch without registering as a lobbyist.

Gramm was hoping to put together a new package of complex assets for speculators to gamble on. Corporations had been using mass purchases of life insurance policies on their employees for years as part of an elaborate tax avoidance scheme (the government doesn't tax insurance premiums or death benefits). The employees themselves -- affectionately referred to as "dead peasants" among insurance experts -- received no benefit. Only the companies who bought the policies would receive payouts when these "peasants" died. Gramm wanted to convince investors to bet on peoples' lives by purchasing pools of life insurance and annuities taken out on individuals.

Gramm and UBS had concocted a gruesome combination of what are now regarded as two of the most infamous Wall Street scams on record. The resulting package closely resembled the growing market for mortgage-backed securities, but instead of allowing Wall Street to bet on peoples' homes, it would enable bets on peoples' lives.

Nat Geo Infomercial: 'Why Didn't We Know This?' Wonders George Bush After 9/11

August 29, 2011 - By David @Video Cafe

DOWNLOADS: (5)

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In an interview that aired Sunday night, President Bush told National Geographic Channel's Peter Schnall that after 9/11, he didn't want to blame intelligence agencies for failing to predict the attacks.

"At some point in time in the immediate aftermath of the attacks, I thought about why didn't we know this?" Bush recalled.

"I knew we needed to figure out what went wrong to prevent other attacks but I didn't want to start the finger pointing and say to our intelligence communities, 'You fouled up. You should have caught this. Why didn't you know?'"

On Aug. 6, 2001 -- more than a month before the attacks -- Bush received a presidential daily briefing entitled "Bin Laden Determined to Strike in U.S."

"Clandestine, foreign government, and media reports indicate bin Laden since 1997 has wanted to conduct terrorist attacks in the US," the briefing said. "Bin Laden implied in U.S. television interviews in 1997 and 1998 that his followers would follow the example of World Trade Center bomber Ramzi Yousef and 'bring the fighting to America.'"

"FBI information since that time indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York."

The day after receiving the report while vacationing on his ranch, "Bush seemed carefree as he spoke about the books he was reading, the work he was doing on his nearby ranch, his love of hot-weather jogging, his golf game and his 55th birthday," according to The Washington Post.

UPDATE: John Amato: Heather posted about Rupert Murdoch's infomercial for George Bush yesterday, but I didn't think there would be much news coming out of it. Guess I was mistaken. Who can forget Ben-Veniste's questioning of Condi Rice during the 9/11 Commission over the Bin Laden PDB?

RICE: I remember very well that the president was aware that there were issues inside the United States. He talked to people about this. But I don't remember the al Qaeda cells as being something that we were told we needed to do something about.

BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6 PDB warned against possible attacks in this country? And I ask you whether you recall the title of that PDB?

RICE: I believe the title was, "Bin Laden Determined to Attack Inside the United States." Now, the...

BEN-VENISTE: Thank you.

And in September of 2007, Bill Moyers covered this PDB quite thoroughly:

BILL MOYERS: The system was blinking red but the 9/11 Commission report says the American people were not warned. Where were the President's national security advisers?

RICE: No, Mr. Ben-Veniste, you…

BEN-VENISTE: I will get into the…

RICE: I would like to finish my point here.

BEN-VENISTE: I didn't know there was a point.

RICE: Given that you asked me whether or not it warned of attacks…

BEN-VENISTE: I asked you what the title was.

RICE: What the August 6th PDB said, and perhaps I should read it to you…

BEN-VENISTE: We would be happy to have it declassified in full at this time, including its title.

MOYERS: Two days after Rice's testimony and after the Commission's most heated showdown with the Bush Administration over access to classified information — the PDB, heavily blacked out — is released on the Saturday night before Easter.

The President had been informed that, quote: "Bin Laden told followers he wanted to retaliate in Washington."

The President had been informed that FBI information, quote, "indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York."

And the President had been informed of reports that a group of bin Laden supporters are, quote, "in the U.S. planning attacks."

But the President stays at his Texas ranch for 23 more days. His National Security Adviser does not convene a Cabinet-level meeting to discuss the urgent warnings.

ROEMER: Not once do the principals ever sit down. You, in your job description as the national security adviser, the secretary of State, the secretary of Defense, the President of the United States and meet solely on terrorism to discuss, in the spring and the summer, when these threats are coming in; when you've known since the transition that al Qaeda cells are in the United States; when, as the PDB said on August 6th, "Bin Laden Determined to Attack the United States."

RICE: The PDB does not say the United States is going to be attacked. It says bin Laden would like to attack the United States. I don't think you, frankly, had to have that report to know that bin Laden would like to attack the United States. The threat reporting… the threat reporting…

ROEMER: So why aren't you doing something about that earlier than August 6th, then?

MOYERS: The Commission never gets a satisfactory answer to that question.