The Snowden Testimony

The European Spy Bazaar
by BINOY KAMPMARK

If you want to help me, help me by helping everyone: declare that the indiscriminate, bulk collection of private data by governments is a violation of our rights and must end.

-Edward Snowden, Testimony, Mar 7, 2014

The case of Edward Snowden is an object study about why whistleblowers have mountains to climb when it comes to revealing abuses within a system. Last Friday1, Snowden detailed a series of answers to submitted questions from the European Parliament outlining what those mountains were.

One particularly troubling one is the pressure exerted by the US intelligence community to spread the web of surveillance through its allies, notably by means of a “European bazaar” of intelligence transfer and sharing. “One of the foremost activities of the NSA’s FAD, or Foreign Affairs Division, is to pressure or incentivize EU member states to change their laws to enable mass surveillance.” Legal teams at the NSA and Britain’s GCHQ “work very hard to search for loopholes in laws and constitutional protections that they can use to justify indiscriminate, dragnet surveillance operations that were at best unwittingly authorised by lawmakers.”

Specific examples include pressure on Germany to degrade its G-10 law “to appease the NSA”, the effect of which would diminish civil liberties protected under the Constitution. Agreements are then made with various countries that seemingly protect their citizens while allowing the NSA to spy on others. Just because the NSA promises not to spy on German citizens in Germany does not mean they will not do so from Denmark. The noose is thereby tightened. Each “individual contribution is enabling the greater patchwork of mass surveillance against ordinary citizens as a whole.”

Snowden ventured no less than 10 times2 to make formal complaints about the various government spy programs before releasing information. The National Security Agency disputes3 such efforts claiming that, “after extensive investigation, including interviews with former NSA supervisors and co-workers, we have not found any evidence to support Mr. Snowden’s contention that he brought these matters to anyone’s attention.”

Presidential Policy Directive 194, a measure that supposedly grants federal employees scope to question classified programs, did not prove very useful. At a news conference in August, President Obama pointed out that Snowden might well have availed himself of “other avenues”, suggesting that PPD 194 was one.

The directive itself “prohibits retaliation against employees for reporting waste, fraud and abuse” and protects employees serving in the Intelligence community or those “eligible for access to classified information”. As with any of these directives, the measure is designed to avoid any disclosure outside the structured channels advocated by the President, keeping it within the remit of the Office of the Director of National Intelligence.

The impediment to Snowden was one that private contractors with access to government information find – the protective loop is simply not there. Governments can effectively evade the internal restrictions placed on their employees via an outsourcing mechanism. “As an employee of a private company rather than a direct employee of the US government, I was not protected by US whistleblower laws, and I would not have been protected from retaliation and legal sanction for revealing classified information about law breaking in accordance with the recommended process.”

The intelligence fraternity, like any other bound by oaths, is bound by self-assumptions of archaic loyalty and sinister practice. The very idea that aspects of it might be questioned is highly problematic. Snowden’s descriptions of reactions to his concerns fell into two camps. The first involved “well-meaning but hushed warnings not to ‘rock the boat’.” Remember the fates, he was cautioned, of those other NSA whistleblowers, such as Wiebe, Binney and Drake. “Everyone in the Intelligence Community is aware of what happens to people who report concerns about unlawful but authorised operations.” The second response tended to be the dismissive one – it was someone else’s problem. Besides, complaining about it would not necessarily result in ending the unlawful program while more than likely ending a career.

Snowden’s testimony put more meat on the body of the security states whose complexes he has so spectacularly exposed. It demonstrates the intelligence communities in question are not so much interested to abide by rules than evade them through agreements, forum shopping and outsourcing. They do so, of course, at the behest of their executives and not-so-bright parliamentarians.

While these programs have the effect of chipping away at the corpus of civil liberties, they are fundamentally worthless – “no western government has been able to present evidence showing that such programs are necessary.” People have tended to be saved, as Snowden ventures with the example of the Underwear Bomber, Umar Farouk Abdulmutallab, not through mass surveillance as good, old fashioned incompetence. Things as they stand are “the inevitable result of subordinating the rights of the voting public to the prerogatives of State Security Bureaus”.

Notes

1 http://site.d66.nl/intveld/document/testimony_snowden/f=/vjhvekoen1ww.pdf
2 http://www.washingtonpost.com/blogs/the-switch/wp/2014/03/07/snowden-i-raised-nsa-concerns-internally-over-10-times-before-going-rogue/

3 http://www.washingtonpost.com/world/national-security/edward-snowden-after-months-of-nsa-revelations-says-his-missions-accomplished/2013/12/23/49fc36de-6c1c-11e3-a523-fe73f0ff6b8d_story.html

4 http://www.fas.org/irp/offdocs/ppd/ppd-19.pdf

Sunday Talking Heads and a Handbook for Homophobes

No Jobs, No Economy, No Prospects For Life

Paul Craig Roberts

Over the decades various administrations, seeking to improve their economic record, monkeyed with economic statistics to the point that the statistics are no longer meaningful.  

According to Friday's (March 7) payroll jobs report, the US economy created 175,000 new jobs in February.  If you believe that, I have a bridge in Brooklyn that I'll let you have at a good price. 

Even if 175,000 jobs were created in February--remember now, February was a cold month whose low temperatures are used to explain poor housing and retail sales performance, yet somehow created 40,000 more jobs than needed to keep up with population growth--that is an insufficient amount to drop the unemployment rate.

To see how screwed up US economic statistics are, consider the reported unemployment rate (U.3) of 6.7 percent in comparison with the fact that there are about 6 million Americans who have been unable to find a job and are no longer counted as unemployed. These millions of unemployed are not included in the reported rate of unemployment.

John Williams (shadowstats.com) reports that the true rate of US unemployment is around 23 percent.  

Rather than examine the issue, the presstitute financial media trumpets the government's propaganda. In America there is no more of a financial media, except for Pam Martens and Nomi Prins, than a print and TV media.

The Economic Policy Institute reports that there are 1,360,000 unemployed men and women under 25, 2,8000,000 unemployed men and women aged 25-54, and 1,640,000 unemployed men and women 55 and over who are not counted as unemployed, because they have been unable to find a job after searching a long time and have given up looking.

Just as "your" government and "your" prostitute media lie to you about Ukraine, Putin, Saddam Hussein, Gaddafi, Iran, Pakistan, Yemen, Palestine, NSA, spying, torture, 9/11, Obamacare, and literally everything under the sun, "your" government lies to you about the economy and hides from you the perilous state of your economic existence.  If you are not among the One Percent, you have no future in America.

Let us have a look at the 175,000 claimed jobs. Are these the promised high-paying jobs of the "New Economy" that Washington and its economists pimps guaranteed us would take the place of the offshored manufacturing and tradable professional service jobs?

Afraid not.  In the many years that I have been observing the monthly payroll jobs reports and the BLS's future jobs projections, I have never seen even one of the "New Economy" jobs.  They simply do not exist.  Yet, the economics profession, an extremely deluded collection of morons, still believes in these jobs.

Again--how many times have I reported this same result--here are the jobs of the "New Economy":   

Of the 175,000 jobs claimed, 13,000 are taxpayer-supported government jobs.

Of the 162,000 private sector jobs claimed, a mere 22,000 or 13.6% are goods producing jobs or which 15,000 or 68% are in construction  The other 140,000 are service jobs.

Are these service jobs the promised high-pay "New Economy" jobs?  No, but judge for yourself.  14,800 are jobs in wholesale trade. Food and beverage stores accounted for 12,000 new jobs. The Federal Reserve accounted for 7,800 jobs in order to continue rigging every financial market, thus replacing capitalism with Federal Reserve Central Planning.

Accounting and bookkeeping services (it is tax time) gave the economy a short-lived 15,700 jobs. There were 24,400 temporary help jobs. The old standby, education and health services, delivered 33,000 jobs. Leisure and hospitality produced 25,000 jobs of which 21,200 are waitresses and bartenders who live on tips.

This has been the jobs profile of the "world's only superpower" for the entirely of the 21st century. Washington, wallowing in its arrogance and hubris, is unconcerned with its economic base. Washington believes its own propaganda about the (non-existent) recovery and America's economic power.  

Funny Ha Ha's

Psychiatry Now Admits It's Been Wrong in Big Ways - But Can It Change?

Wednesday, 05 March 2014 10:05 By Bruce E Levine, Truthout | 


When I interviewed investigative reporter Robert Whitaker in 2010 after the publication of his book Anatomy of an Epidemic: Magic Bullets, Psychiatric Drugs, and the Astonishing Rise of Mental Illness in America, he was not exactly a beloved figure within the psychiatry establishment. Whitaker had documented evidence that standard drug treatments were making many patients worse over the long term, and he detailed the lack of science behind these treatments.

Whitaker's sincerity about seeking better treatment options, his command of the facts, and his lack of anti-drug dogma compelled all but the most dogmatic psychiatrists to take him seriously.

For Anatomy of an Epidemic, Whitaker won the 2010 Investigative Reporters and Editors Book Award for best investigative journalism. This and other acclaim made it difficult for establishment psychiatry to ignore him, so he was invited to speak at many of their bastions, including a Harvard Medical School Grand Rounds at Massachusetts General Hospital, where he faced hostile audiences. However, Whitaker's sincerity about seeking better treatment options, his command of the facts and his lack of anti-drug dogma compelled all but the most dogmatic psychiatrists to take him seriously.

In the past four years, the psychiatry establishment has pivoted from first ignoring Whitaker to then debating him and attempting to discredit him to currently agreeing with many of his conclusions. But will Whitaker's success in changing minds result in a change for the better in treatment practices?

I was curious about Whitaker's take on the recent U-turns by major figures in the psychiatry establishment with respect to antipsychotic drug treatment, the validity of the "chemical imbalance" theory of mental illness and the validity of the DSM, psychiatry's diagnostic bible. And I was curious about Whitaker's sense of psychiatry's future direction.

Bruce Levine: In 2013, the director of the National Institute of Mental Health (NIMH), Thomas Insel, announced - without mentioning you -  that he agreed with your conclusion that psychiatry's standard treatment for people diagnosed with schizophrenia and other psychoses needs to change so as to better reflect the diversity in this population. Citing long-term treatment studies that you had previously documented, Insel came to the same conclusion that you had: In the long-term, not all, but many individuals who have been diagnosed with psychosis actually do better without antipsychotic medication. Was it gratifying for you to see the US government's highest-ranking mental health official agreeing with you? 

Robert Whitaker: Shortly before Thomas Insel wrote that blog, I had posted my own on madinamerica.com, related to a recent study by Lex Wunderink from the Netherlands. Wunderink had followed patients diagnosed with a psychotic disorder for seven years, and he reported that those randomized, at an early date, to a treatment protocol that involved tapering down to a very low dose or withdrawing from the medication altogether had much higher recovery rates than those maintained on a regular dose of an antipsychotic.

I wrote that in the wake of Wunderink's randomized study, if psychiatry wanted to maintain its claim that its treatments were evidence-based, and thus maintain any sort of moral authority over this medical domain, then it needed to amend its treatment protocols for antipsychotics. I don't know if Dr. Insel read my blog, but his post did nevertheless serve as a reply, and as you write, he did basically come to the same conclusion that I had been writing about for some time.

I suppose I took some measure of personal gratification from his blog, for it did provide a sense of a public acknowledgment that I had indeed been "right." But more important, I felt a new sense of optimism, hopeful that maybe psychiatry would now really address this issue, which is so important to the lives of so many people. A short while ago, The New York Times published a feature story on Dr. Insel, noting that he had recently raised a question about the long-term use of antipsychotics, which had caused a stir in psychiatry because it contradicted conventional wisdom. That is a sign that perhaps a new discussion is really opening up.

In Anatomy of an Epidemic, you also discussed the pseudoscience behind the "chemical imbalance" theories of mental illness - theories that made it easy to sell psychiatric drugs. In the last few years, I've noticed establishment psychiatry figures doing some major backpedaling on these chemical imbalance theories. For example, Ronald Pies, editor-in-chief emeritus of the Psychiatric Times stated in 2011, "In truth, the ‘chemical imbalance' notion was always a kind of urban legend - never a theory seriously propounded by well-informed psychiatrists." What's your take on this?

 

The "disease model," as a basis for making psychiatric diagnoses, has failed.

This is quite interesting and revealing, I would say. In a sense, Ronald Pies is right.Those psychiatrists who were "well informed" about investigations into the chemical imbalance theory of mental disorders knew it hadn't really panned out, with such findings dating back to the late 1970s and early 1980s. But why, then, did we as a society come to believe that mental disorders were due to chemical imbalances, which were then fixed by the drugs?

Dr. Pies puts the blame on the drug companies. But if you track the rise of this belief, it is easy to see that the American Psychiatric Association promoted it in some of their promotional materials to the public and that "well informed" psychiatrists often spoke of this metaphor in their interviews with the media. So what you find in this statement by Dr. Pies is a remarkable confession: Psychiatry, all along, knew that the evidence wasn't really there to support the chemical imbalance notion, that it was a hypothesis that hadn't panned out, and yet psychiatry failed to inform the public of that crucial fact.

The low-serotonin theory of depression has been so completely discredited by leading researchers that maintaining the story with the public has just become untenable.

By doing so, psychiatry allowed a "little white lie" to take hold in the public mind, which helped sell drugs and, of course, made it seem that psychiatry had magic bullets for psychiatric disorders. That is an astonishing betrayal of the trust that the public puts in a medical discipline; we don't expect to be misled in such a basic way.

But why now? Why are we hearing these admissions from Dr. Pies and others now? I am not sure, but I think there are two reasons.

One, the low-serotonin theory of depression has been so completely discredited by leading researchers that maintaining the story with the public has just become untenable. It is too easy for critics and the public to point to the scientific findings that contradict it.

Second, a number of pharmaceutical companies have shut down their research into psychiatric drugs [see Science, 2010], and they are doing so because, as they note, there is a lack of science providing good molecular targets for drug development. Even the drug companies are moving away from the chemical-imbalance story, and thus, what we are seeing now is the public collapse of a fabrication, which can no longer be maintained. In the statement by Dr. Pies, you see an effort by psychiatry to distance itself from that fabrication, putting the blame instead on the drug companies.

Challenging the validity of DSM is, in many ways, potentially much more of a paradigm-changer than are the scientific reports that detail how the medications may be causing long-term harm.

And recently, establishment psychiatrists have even been challenging the validity of psychiatry's diagnostic bible, the DSM. Last year, NIMH director Insel, citing the DSM's lack of scientific validity, stated that the "NIMH will be re-orienting its research away from DSM categories." And psychiatrist Allen Frances, the former chair of the DSM-4 task force, has been talking about how the DSM is a money machine for drug companies ("Last Plea To DSM-5: Save Grief From the Drug Companies"), and Frances thoroughly trashed the DSM-5 in his 2013 book Saving Normal.

I think this challenging of the validity of DSM is, in many ways, potentially much more of a paradigm-changer than are the scientific reports that detail how the medications may be causing long-term harm. Our current drug-based paradigm of care, which presents drugs as treatments for the symptoms of a "disease," stems from DSM III. The APA [American Psychiatric Association] and its leaders boasted that when DSM III was published in 1980, that the field had now adopted a "medical model," and thus its manual was now "scientific" in kind.

In fact, the APA had adopted a "disease model," and if you carefully read the DSM III manual, you saw that the authors acknowledged that very few of the diagnoses had been "validated." The APA's hope and expectation was that future research would validate the disorders, but that hasn't happened. Researchers haven't identified a characteristic pathology for the major mental disorders; no specific genes for the disorders have been found; and there isn't evidence that neatly separates one disorder from the next. The "disease model," as a basis for making psychiatric diagnoses, has failed.

We are now witnessing, in Insel's statements and those by Allen Frances, an acknowledgment of this failure. And here is why this is potentially such a paradigm-changer: The foundation of any medical specialty begins with its diagnostic manual, which should be both reliable and valid. If the disorders listed in a manual haven't been validated, then you can't conclude they are "real," in the sense of the disorders being unique illnesses, and the diagnoses being useful for prescribing an appropriate treatment.

Thus, when Insel states that the disorders haven't been validated, he is stating that the entire edifice that modern psychiatry is built upon is flawed, and unsupported by science. This is like the King of Psychiatry saying that the discipline has no clothes. If the public loses faith in the DSM and comes to see it as unscientific, then psychiatry has a real credibility problem on its hands, and that could prove to be fertile ground for real change.

So do you feel you have accomplished your mission? And can dissident mental health professionals - who have for years been talking about invalid diagnoses, pseudoscientific theories of mental illness, and drug treatments that cause moderate and acute problems to become severe and chronic ones - now have reasons to be optimistic about their profession? Or are you pessimistic that the recent admissions of establishment psychiatry will result in substantive changes in treatment? 

My "mission" would be to see that our society would actually build a system of care that was truly "science" based, particularly in its use of psychiatric drugs.

This is a good question, and I vacillate in my personal response between guarded optimism and complete pessimism. From an intellectual, scientific standpoint, I think psychiatry is facing a deep crisis. There is an understanding, within psychiatric research circles, that the DSM diagnoses haven't, in fact, been validated. And, at the very least, there is a recognition that psychiatry's drug treatments are inadequate. In 2009, Insel wrote an article stating: "For too many people, antipsychotics and antidepressants are not effective, and even when they are helpful, they reduce symptoms without eliciting recovery." And I do think that my book Anatomy of an Epidemic has contributed to an awareness of the limitations of the drugs, and at least a discussion, in some psychiatric circles, that the drugs may be worsening long-term outcomes.

But in terms of accomplishing my mission, well, I guess my "mission" would be to see that our society would actually build a system of care that was truly science-based, particularly in its use of psychiatric drugs. I think this is such an important story for our society and one of extraordinary moral importance when it comes to medicating children and adolescents, none of whom could be said to have really "consented" to such treatment. I turned madinamerica.com into a webzine with the hope that by providing a forum for a community of writers interested in "rethinking psychiatry" and combining their voices with reports of research that provide a foundation for such rethinking, it could become a real force for change. We'll see if that happens, but our readership is steadily increasing.

I should note, as you say, that dissident mental health professionals have been plugging away at promoting such change for a long time. I hope that madinamerica.com is providing that community a forum for voicing their criticisms and making them known to a larger audience.

And now for why I can be so pessimistic. Even as the intellectual foundation for our drug-based paradigm of care is collapsing, starting with the diagnostics, our society's use of these medications is increasing; the percentage of children and youth being medicated is increasing; and states are expanding their authority to forcibly treat people in outpatient settings with antipsychotics drugs. Disability numbers due to mental illness go up and up, and we don't see that as reason to change either. History does show that paradigms of psychiatric care can change, but, in a big-picture sense, I don't know how much is really changing here in the United States.

I think dissident mental health professionals also have to confront this question. Can they be hopeful that their professions will change their ways, and their teachings? I think so, but there is so much that needs to be done.

Any medical specialty has guild interests, meaning that it needs to protect the market value of its treatments.

Is it really possible for psychiatry to reform in any meaningful way given their complete embrace of the "medical model of mental illness," their idea that emotional and behavioral problems are caused by a bio-chemical defect of some type? Can they really reform when their profession as a financial enterprise rests on drug prescribing, electroshock and other bio-chemical-electrical treatments? Can psychiatry do anything but pay lip service to a more holistic/integrative view that includes psychological, spiritual, social, cultural and political realities?

I think we have to appreciate this fact: any medical specialty has guild interests, meaning that it needs to protect the market value of its treatments. If it is going to abandon one form of treatment, it needs to be able to replace it with another. It can't change if there is no replacement in the offing.

When the APA published DSM III, it basically ceded talk therapy to psychologists, counselors, social workers and so forth. Psychiatry's three domains, in the marketplace, were diagnostics, research and the prescribing of drugs. Now, 34 years later, we see that its diagnostics are being dismissed as invalid; its research has failed to identify the biology of mental disorders to validate its diagnostics; and its drug treatments are increasingly being seen as not very effective or even harmful. That is the story of a profession that has reason to feel insecure about its place in the marketplace.

Yet, as you suggest, this is why it is going to be so hard for psychiatry to reform. Diagnosis and the prescribing of drugs constitute the main function of psychiatrists today in our society. From a guild perspective, the profession needs to maintain the public's belief in the value of that function. So I don't believe it will be possible for psychiatry to change unless it identifies a new function that would be marketable, so to speak. Psychiatry needs to identify a change that would be consistent with its interests as a guild.
The one faint possibility I see - and this may seem counterintuitive - is for psychiatry to become the profession that provides a critical view of psychiatric drugs. Family doctors do most of the prescribing of psychiatric drugs today, without any real sense of their risks and benefits, and so psychiatrists could stake out a role as being the experts who know how to use the drugs in a very selective, cautious manner, and the experts who know how to incorporate such drug treatment into a holistic, integrated form of care. If the public sees the drugs as quite problematic, as medications that can serve a purpose - but only if prescribed in a very nuanced way - then it will want to turn to physicians who understand well the problems with the drugs and their limitations.

That is what I think must happen for psychiatry to change. Psychiatry must see a financial benefit from a proposed change, one consistent with guild interests.  

The Group of Thirty, Financial Crisis Kingpins

February 26, 2014

By Andrew Gavin Marshall

   

Following parts one, two and three of the Global Power Project's Group of Thirty series, this fourth and final installment focuses on a few of the G30 members who have played outsized roles both in creating and managing various financial crises, providing a window on to the ideas, institutions and individuals who help steer this powerful global group.



The Assassin of Argentina

Prior to 2008, one of the most notable examples of a highly destructive financial crisis took place in Argentina which, heavily in debt, faced a large default and was brutally punished by financial markets and the speculative assault of global finance, otherwise known as "capital flight." Less known in the story of Argentina’s 1998 to 2002 economic catastrophe was the significant role played by just one man: Domingo Cavallo.

A longtime member of the Group of Thirty, Cavallo formerly served both as Governor of the Central Bank and Minister of Economy in Argentina. He has been referred to by Pulitzer Prize-winning economic researcher Daniel Yergin as “one of the most influential figures in recasting the relationship of state and marketplace in Latin America.”

Between 1976 and 1983, Argentina, ruled by a ruthless military dictatorship, was marred by excessive human rights abuses and persecution of intellectuals and dissidents during the so-called "Dirty War" in which as many as 30,000 people were killed or disappeared. The terror was reminiscent of nearby Chile, where a coup that brought dictator Augusto Pinochet to power in 1973, with the help of the CIA, provided a petri-dish experiment in the implementation of neoliberal "reforms." It was Chile’s dictatorship that set the example, and Argentina’s soon followed.

In a 2002 interview, Domingo Cavallo noted that, “The experience of Chile during the '80s was very instructive, I think, for most Latin American economies, and many politicians in Latin America, because Chile was successful by opening up and trying to expand their exports and in general their foreign trade and getting more integrated into the world economy... And of course we used, particularly here in Argentina, the experience of Chile to go ahead with our own reforms.”

Asked about the association between economic "reforms" in Chile and the ruthless dictatorship that implemented them, Cavallo explained, “There were discussions on the feasibility of implementing market reforms in a democracy. But in 1990... the first democratic president after Pinochet maintained the reforms and also tried to improve on them [and] it was demonstrated that itwould be possible to implement similar reforms under a democratic regime.”

What specific reforms was Cavallo referring to? Under Argentina's military dictatorship, Cavallo served for one year as Governor of the Central Bank in 1982, where he was responsible for implementing a state bailout of corporations and banks. After, Cavallo returned to academic life. But all that changed with the election of Carlos Menem in 1989, who served as president until 1999. In 1991, Menem appointed Cavallo as Minister for Economy, a position he held until 1996.

Cavallo led the neoliberal restructuring of Argentina: pegging the Argentine peso to the U.S. dollar, trying to reduce inflation, undertaking massive privatizations while opening up the economy to “free trade,” and deregulating financial markets. The New York Times in 1996 heaped praise on Cavallo for his “constructive” role in leading the economy “back to vitality and international respectability,” despite the fact that his reforms “brought high unemployment and painful reductions in social programs.”

Another NYT article credited Cavallo for the “stability” brought to Argentina through his “economic miracle,” while noting, without irony, that Cavallo’s miracle had “left million of Argentines... without a safety net” and with record-high unemployment, the emergence of urban slums, abandoned street children, over-crowded food banks, homeless shelters in churches, and even some people who were forced to eat cats in desperation. The "miracle” was so great, in fact, that despite all of the so-called stability it facilitated, President Menem ultimately dismissed Cavallo to the jubilation of tens of thousands of protesters in the streets. Though the people were pleased, financial markets expressed their disapproval.

With multiple economic and financial crises erupting around the world and in neighboring nations, Argentina, which pegged its currency to the U.S. dollar, found it could no longer compete. The touted neoliberal reforms were taking a toll as the country plunged into recession. Menem was replaced in 1999 by President Fernando De la Rua, who quickly sought support from the IMF to help repay the country’s debts owed to foreign – largely American – banks.

But Cavallo wasn't out. In 2001, he was re-appointed as the country's Minister of Economy just in time to receive emergency powers enabling him handle the country’s ongoing financial crisis that he helped to create. At that point, financial markets felt Argentina could not be trusted to repay its debt and the IMF refused to provide further loans, on the basis that the country had not implemented enough neoliberal reforms to meet its demands. The economy crashed and the “much-hated” Cavallo had to resign, as did the President, who fled by helicopter from the Casa Rosada as Argentines protested en masse.

Even the Federal Reserve Bank of San Francisco noted in 2002 that there was “some truth” to the view that “Argentina’s debt position would have been sustainable if only market uncertainty had not triggered a crisis." But, it added, had Argentina made the effort asked of it to reduce its debt, it could have avoided “potentially destabilizing shifts in market sentiment."


America’s Crisis-Causers

The role played by former Federal Reserve Chairman Alan Greenspan in creating the conditions that led to the 2008 global financial meltdown is known to many. What is less known is that Greenspan, too, is a former member of the Group of Thirty. Greenspan did not work alone, of course, in his efforts to deregulate the financial system and spur the growth of the derivatives markets, which laid the groundwork for the worst financial crisis in modern times. Larry Summers, who then served as deputy secretary and later Secretary of Treasury under Bill Clinton, was also very helpful in this regard. Summers, too, is a current member of the Group of Thirty.

Currently serving as President Emeritus and as a professor at Harvard University, Summers was the former director of President Obama’s National Economic Council from 2009 to 2011. Previously, he was President of Harvard (2001 to 2009) and, prior to his positions during the Clinton administration he was Chief Economist at the World Bank (1991 to 1993). Currently, Summers is a member not only of the G30 but of the Council on Foreign Relations, the Trilateral Commission, and he was also a member of the Steering Committee of the Bilderberg Group.

While Chief Economist at the World Bank, Summers signed an infamous 1991 memo in which it was suggested that rich countries should dump their toxic waste and pollutants in the poorest African nations — because by the time the toxins spurred the growth of cancer in the local population, they would already statistically be dead due to already high mortality rates. The memo noted: “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

When Summers later went to work for the Clinton administration under Treasury Secretary Robert Rubin, he along with Rubin and Fed Chairman Greenspan formed the "Three Marketeers," as Time referred to them, dedicated to “inventing a 21st century financial system” where they placed their “faith [in] financial markets.”

In the final two years of the Clinton presidency, Summers served as the Treasury Secretary alongside his deputy and protégé, Timothy Geithner, another member of the G30 who would go on to make a mark on the financial crisis — largely by convincing President Obama to bail out the Wall Street banks that crashed the economy, with zero penalty to them. Under the Obama administration, Summers served for nearly two years as Chair of the National Economic Council and was a highly influential policymaker. In 2009, he had spoken at the highly influential ultra-conservative think tank, the Peterson Institute for International Economics, where he explained the administration’s approach to the economic recovery, noting that, “Our approach sought to go as much as possible with the grain of the market” as opposed to regulating markets.

When Summers left the Obama administration in late 2010, he returned to Wall Street and made a fortune working for the hedge fund D. E. Shaw & Co. and Citigroup. This past summer, he was considered Obama’s favorite pick to replace Ben Bernanke as Fed Chairman, but faced such stiff opposition within the Democratic Party that he withdrew his name, leaving Janet Yellen – the Vice Chair of the Fed and herself a former member of the Group of Thirty – to step in.

What we see, in this analysis of the Group of Thirty, are the connections between those in positions of power to respond to and manage economic and financial crises, and those in positions of power who created such crises. Naturally, as well, the G30's membership includes numerous bankers who, as fortune had it, shared handsomely in the profits of those crises. Put simply, the G30 can be thought above all as an exclusive club of financial crisis kingpins. And it is a club, no doubt, that will continue to play a significant and not altogether helpful role in global financial management for years to come — or until something is done to stop them.

The Real Job Killers

Saturday, March 1, 2014 by RobertReich.org
by Robert Reich

House Speaker John Boehner says raising the minimum wage is “bad policy” because it will cause job losses.

The U.S. Chamber of Commerce (conservative think tank) says a minimum wage increase would be a job killer. Republicans and the Chamber also say unions are job killers, workplace safety regulations are job killers, environmental regulations are job killers, and the Affordable Care Act is a job killer. The California Chamber of Commerce even publishes an annual list of “job killers,” including almost any measures that lift wages or protect workers and the environment.

Most of this is bunk.

When in 1996 I recommended the minimum wage be raised, Republicans and the Chamber screamed it would “kill jobs.” In fact, in the four years after it was raised, the U.S. economy created more jobs than were ever created in any four-year period.

For one thing, a higher minimum wage doesn’t necessarily increase business costs. It draws more job applicants into the labor market, giving employers more choice of whom to hire. As a result, employers often get more reliable workers who remain longer – thereby saving employers at least as much money as they spend on higher wages.

A higher wage can also help build employee morale, resulting in better performance. Gap, America’s largest clothing retailer, recently announced it would boost its hourly wage to $10. Wall Street approved. “You treat people well, they’ll treat your customers well,” said Dorothy Lakner, a Wall Street analyst. “Gap had a strong year last year compared to a lot of their peers. That sends a pretty strong message to employees that, ‘we had a good year, but you’re going to be rewarded too.’”

Even when raising the minimum wage — or bargaining for higher wages and better working conditions, or requiring businesses to provide safer workplaces or a cleaner environment — increases the cost of business, this doesn’t necessarily kill jobs.

Most companies today can easily absorb such costs without reducing payrolls. Corporate profits now account for the largest percentage of the economy on record. Large companies are sitting on more than $1.5 trillion in cash they don’t even know what to do with. Many are using their cash to buy back their own shares of stock – artificially increasing share value by reducing the number of shares traded on the market.

Walmart spent $7.6 billion last year buying back shares of its own stock — a move that papered over its falling profits. Had it used that money on wages instead, it could have given its workers a raise from around $9 an hour to almost $15. Arguably, that would have been a better use of the money over the long-term – not only improving worker loyalty and morale but also giving workers enough to buy more goods from Walmart (reminiscent of Henry Ford’s pay strategy a century ago).

There’s also a deeper issue here. Even assuming some of these measures might cause some job losses, does that mean we shouldn’t proceed with them?

Americans need jobs, but we also need minimally decent jobs. The nation could create millions of jobs tomorrow if we eliminated the minimum wage altogether and allowed employers to pay workers $1 an hour or less. But do we really want to do that?

Likewise, America could create lots of jobs if all health and safety regulations were repealed, but that would subject millions of workers to severe illness and injury.

Lots of jobs could be added if all environmental rules were eliminated, but that would result in the kind of air and water pollution that many people in poor nations have to contend with daily.

If the Affordable Care Act were repealed, hundreds of thousands of Americans would have to go back to working at jobs they don’t want but feel compelled to do in order to get health insurance.

We’d create jobs, but not progress. Progress requires creating more jobs that pay well, are safe, sustain the environment, and provide a modicum of security. If seeking to achieve a minimum level of decency ends up “killing” some jobs, then maybe those aren’t the kind of jobs we ought to try to preserve in the first place.

Finally, it’s important to remember the real source of job creation. Businesses hire more workers only when they have more customers. When they have fewer customers, they lay off workers. So the real job creators are consumers with enough money to buy.

Even Walmart may be starting to understand this. The company is “looking at” whether to support a minimum wage increase. David Tovar, a Walmart spokesman, noted that such a move would increase the company’s payroll costs but would also put more money in the pockets of some of Walmart’s customers.

In other words, forget what you’re hearing from the Republicans and the Chamber of Commerce. The real job killers in America are lousy jobs at lousy wages.

Obama’s Dumbest Plan Yet: Neo-Nazi Coup in Ukraine

by MIKE WHITNEY

“Washington and Brussels … used a Nazi coup, carried out by insurgents, terrorists and politicians of Euromaidan to serve the geopolitical interests of the West.”
– Natalia Vitrenko, The Progressive Socialist Party of Ukraine

The United States helped defeat Nazism in World War 2. Obama helped bring it back.

As you probably know by now, Obama and Co. have ousted Ukraine’s democratically-elected president, Viktor Yanukovych, with the help of ultra-right, paramilitary, neo-Nazi gangs who seized and burned government offices, killed riot police, and spread mayhem and terror across the country. These are America’s new allies in the Great Game, the grand plan to “pivot to Asia” by pushing further eastward, toppling peaceful governments, securing vital pipeline corridors, accessing scarce oil and natural gas reserves and dismantling the Russian Federation consistent with the strategy proposed by geopolitical mastermind, Zbigniew Brzezinski. Brzezinski’s magnum opus–”The Grand Chessboard: American Primacy and it’s Geostrategic Imperatives” has become the Mein Kampf for aspiring western imperialists. It provides the basic blueprint for establishing US military-political-economic hegemony in the century’s most promising and prosperous region, Asia. In an article in Foreign Affairs Brzezinski laid out his ideas about neutralizing Russia by splitting the country into smaller parts, thus, allowing the US to maintain its dominant role in the region without threat of challenge or interference. Here’s an excerpt from the article:

“Given (Russia’s) size and diversity, a decentralized political system and free-market economics would be most likely to unleash the creative potential of the Russian people and Russia’s vast natural resources. A loosely confederated Russia — composed of a European Russia, a Siberian Republic, and a Far Eastern Republic — would also find it easier to cultivate closer economic relations with its neighbors. Each of the confederated entitles would be able to tap its local creative potential, stifled for centuries by Moscow’s heavy bureaucratic hand. In turn, a decentralized Russia would be less susceptible to imperial mobilization.” (Zbigniew Brzezinski,“A Geostrategy for Eurasia”)

Moscow is keenly aware of Washington’s divide and conquer strategy, but has downplayed the issue in order to avoid a confrontation. The US-backed coup in Ukraine means that that option is no longer feasible. Russia will have to respond to a provocation that threatens both its security and vital interests. Early reports suggest that Putin has already mobilized troops to the East and –according to Reuters “put fighter jets along its western borders on combat alert.” Here’s more from Reuters:

“The United States says any Russian military action would be a grave mistake. But Russia’s foreign ministry said in a statement that Moscow would defend the rights of its compatriots and react without compromise to any violation of those rights.” (Reuters)

There’s going to be a confrontation, it’s just a matter of whether the fighting will escalate or not.
In order to topple Yanukovych, the US had to tacitly support fanatical groups of neo-Nazi thugs and anti-Semites. And, even though “Interim Ukrainian President Oleksander Tuchynov has pledged to do everything in his power to protect the country’s Jewish community”; reports on the ground are not so encouraging. Here’s an excerpt from a statement by Natalia Vitrenko, of The Progressive Socialist Party of Ukraine that suggests the situation is much worse than what is being reported in the news:

“Across the country… People are being beaten and stoned, while undesirable members of the Verkhovna Rada of Ukraine are subject to mass intimidation and local officials see their families and children targeted by death threats if they do not support the installation of this new political power. The new Ukrainian authorities are massively burning the offices of political parties they do not like, and have publicly announced the threat of criminal prosecution and prohibition of political parties and public organizations that do not share the ideology and goals of the new regime.” (“USA and EU Are Erecting a Nazi Regime on Ukrainian Territory”, Natalia Vitrenko)

Earlier in the week, Israeli newspaper Haaretz reported that a Ukranian synagogue had been firebombed although the “Molotov cocktails struck the synagogue’s exterior stone walls and caused little damage”.
Another article in Haaretz referred to recent developments as “the new dilemma for Jews in Ukraine”. Here’s an excerpt from the article:

“The greatest worry now is not the uptick in anti-Semitic incidents but the major presence of ultra-nationalist movements, especially the prominence of the Svoboda party and Pravy Sektor (right sector) members among the demonstrators. Many of them are calling their political opponents “Zhids” and flying flags with neo-Nazi symbols. There have also been reports, from reliable sources, of these movements distributing freshly translated editions of Mein Kampf and the Protocols of the Elders of Zion in Independence Square.” (“Anti-Semitism, though a real threat, is being used by the Kremlin as a political football”, Haaretz)

Then there’s this, from Dr. Inna Rogatchi in Arutz Sheva:

“There is no secret concerning the real political agenda and programs of ultra-nationalist parties in Ukraine – there is nothing close to European values and goals there. One just should open existing documents and hear what the representatives of those parties proclaim daily. They are sharply anti-European, and highly racist. They have nothing to do with the values and practices of the civilized world…
Ukrainian Jewry is facing a real and serious threat….To empower the openly neo-Nazi movements in Europe by ignoring the threat they pose is an utterly risky business. People should not have to pay a terrible price – again – for the meekness and indifference of their leaders. As Ukraine today has become the tragic show-case for all of Europe with regards to breeding and allowing race-hatred to become a violent and uncontrollable force, it is impertive to handle the situation there in accordance with existing international law and norms of civilization.” (“Tea With Neo-Nazis: The Violent Nationalism in Ukraine“, Arutz Sheva)

Here’s a little more background on the topic by progressive analyst Stephen Lendmen from a February 25 post titled “New York Times: Supporting US Imperial Lawlessness”:

“Washington openly backs fascist Svoboda party leader Oleh Tyahnybok…In 2004, Tyahnybok was expelled from former President Viktor Yushchenko’s parliamentary faction. He was condemned for urging Ukrainians to fight against a “Muscovite-Jewish mafia.”
In 2005, he denounced “criminal activities” of “organized Jewry.” He outrageously claimed they plan “genocide” against Ukrainians.”…
Tyahnybok extremism didn’t deter Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland. On February 6, she met openly with him and other anti-government leaders.
In early January, 15,000 ultranationalists held a torchlight march through Kiev. They did so to honor Nazi-era collaborator/mass murderer Stepan Bandera. Some wore uniforms a Wehrmacht Ukrainian division used in WW II. Others chanted “Ukraine above all” and “Bandera, come and bring order.” (Steve Lendman blog)

Of course, the US media has downplayed the fascistic-neo-Nazi “ethnic purity” element of the Ukrainian coup in order to focus on– what they think — are more “positive themes”, like the knocking down of statues of Lenin or banning Communist party members from participating in Parliament. As far as the media is concerned, these are all signs of progress.

Ukraine is gradually succumbing to the loving embrace of the New World Order where it will serve as another profit-generating cog in Wall Street’s wheel. That’s the theory, at least. It hasn’t occurred to the boneheads at the New York Times or Washington Post that Ukraine is rapidly descending into Mad Max-type anarchy which could spill over its borders into neighboring countries triggering violent conflagrations, social upheaval, regional instability or–god-help-us– WW3. The MSM sees nothing but silver linings as if everything was going according to plan. All of Eurasia, the Middle East and beyond are being pacified and integrated into one world government overseen by the unitary executive who defers to no one but the corporations and financial institutions who control the levers of power behind imperial shoji-screen.

What could go wrong?

Naturally, Russia is worried about developments in Ukraine, but is unsure how to react. Here’s how Russian PM Dmitry Medvedev summed it up the other day:

“We do not understand what is going on there. A real threat to our interests (exists) and to the lives and health of our citizens. Strictly speaking, today there is no one there to communicate with … If you think that people in black masks waving Kalashnikovs (represent) a government, then it will be difficult for us to work with such a government.”

Clearly, Moscow is confused and worried. No one expects the world’s only superpower to behave this irrationally, to hop-scotch across the planet creating one failed state after another, fomenting revolt, breeding hatred, and spreading misery wherever it goes. At present, the Obama team is operating at full-throttle trying to topple regimes in Syria, Venezuela, Ukraine, and god-knows where else. At the same time, failed operations in Afghanistan, Iraq and Libya have left all three countries in dire straights, ruled by regional warlords and armed militias. Medvedev has every right to be concerned.

Who wouldn’t be? The US has gone off the rails, stark raving mad. The architecture for global security has collapsed while the basic principals of international law have been jettisoned. The rampaging US juggernaut lurches from one violent confrontation to the next without rhyme or reason, destroying everything in its path, forcing millions to flee their own countries, and pushing the world closer to the abyss. Isn’t that reason enough to be concerned?

Now Obama has thrown-in with the Nazis. It’s just the icing on the cake.

Check out this blurb from Max Blumenthal’s latest titled “Is the U.S. Backing Neo-Nazis in Ukraine?”:

“Right Sector is a shadowy syndicate of self-described ‘autonomous nationalists’ identified by their skinhead style of dress, ascetic lifestyle, and fascination with street violence. Armed with riot shields and clubs, the group’s cadres have manned the front lines of the Euromaidan battles this month, filling the air with their signature chant: ‘Ukraine above all!’ In a recent Right Sector propaganda video the group promised to fight ‘against degeneration and totalitarian liberalism, for traditional national morality and family values.’
With Svoboda linked to a constellation of international neo-fascist parties through the Alliance of European National Movements, Right Sector is promising to lead its army of aimless, disillusioned young men on “a great European Reconquest.” (“Is the U.S. Backing Neo-Nazis in Ukraine?—Exposing troubling ties in the U.S. to overt Nazi and fascist protesters in Ukraine“, Max Blumenthal, AlterNet)

“Family values”? Where have we heard that before?

It’s clear, that Obama and his brainiac advisors think they have a handle on this thing and can train this den of vipers to click their heels and follow Washington’s directives, but it sounds like a bad bet to me. These are hard-core, died-in-the-wool, Nazi-extremists. They won’t be bought-off, co-opted or intimidated. They have an agenda and they aim to pursue that agenda to their last, dying breath.

Of all the dumb plans Washington has come up with in the couple years, this is the dumbest.

Reasons Monsanto's "Science" Doesn't Add Up

Monday, 03 March 2014
By Katherine Paul and Ronnie Cummins, Organic Consumers Association 

 

To hear the pesticide and junk food marketers of the world tell it, anyone who questions the value, legitimacy or safety of GMO crops is naïve, anti-science and irrational to the point of hysteria.

But how long can Monsanto ignore the mounting actual scientific evidence that their technology is not only failing to live up to its promises, it’s putting public health at risk?

Jim Goodman, farmer, activist and member of the Organic Consumers Association policy advisory board, recently wrote about Monsanto’s deceptive use of the expression “sound science.”

But, ‘sound science’ has no scientific definition. It does not mean peer reviewed, or well documented research. ‘Sound science’ is only a term, an ideological term, used to support a particular point of view, policy statement or a technology. ‘Sound science’ is little more than the opinions of so-called “experts” representing corporate interests.

Simply put, ‘sound science’ always supports the position of industry over people, corporate profit over food safety, the environment and public health.

Here are five new reports and studies, published in the last two months, that blow huge holes in Monsanto’s “sound science” story. Reports of everything from Monsanto’s Roundup causing fatal, chronic kidney disease to how, contrary to industry claims, Roundup persists for years, contaminating soil, air and water. And oh-by-the-way, no, GMO crops will not feed the world, nor have they reduced the use of herbicides and pesticides.

1.   Monsanto’s Roundup linked to fatal, chronic kidney disease.
Article in Journal of Environmental Research and Public Health, February 2014

What happens when you mix glyphosate, the key active ingredient in Monsanto’s Roundup, with “hard” water? That is, water that contains metals, such as calcium, magnesium, strontium and iron, either found naturally in the soil, or resulting from the use of chemical fertilizers?

The glyphosate becomes “extremely toxic” to the kidneys.

That’s the theory put forth by researchers trying to uncover the mystery of thousands of deaths from chronic kidney disease among people in farming areas of Sri Lanka, El Salvador and Nicaragua.

2.   Monsanto’s Roundup persists in soil and water. U.S. Geological Survey report in Environmental Toxicology and Chemistry, February 2014

Monsanto has always insisted (despite evidence to the contrary) that its Roundup herbicide is benign, that its toxicity doesn’t persist.

But that’s only half the story, according to a study published this month in Environmental Toxicology and Chemistry. Researchers now say that if you study only the key active ingredient, glyphosate, you might, as Monsanto claims, determine that Roundup is benign.

But there are other ingredients in Roundup, including one called Aminomethylphosphonic acid, or AMPA. The study, called "Pesticides in Mississippi air and rain: A comparison between 1995 and 2007," found that glyphosate and its still-toxic byproduct, AMPA, were found in over 75 percent of the air and rain samples tested from Mississippi in 2007.

What does that mean for you? According to one analysis, “if you were breathing in the sampled air you would be inhaling approximately 2.5 nanograms of glyphosate per cubic meter of air. It has been estimated the average adult inhales approximately 388 cubic feet or 11 cubic meters of air per day, which would equal to 27.5 nanograms (billionths of a gram) of glyphosate a day.” Gasp.

3.   GMO crops have led to an increase in use of pesticides and herbicides. U.S. Department of Agriculture (USDA) report, February 2014.

The USDA, which gauging from its track record has never met a GMO crop it didn’t like, published a report substantiating what responsible, independent scientists have been saying along. Genetic engineering does not result in increased yields (as industry would have us believe)—but it has led to the increased (not decreased, as industry claims) use of pesticides and herbicides.

To be fair, the report gives overall favorable reviews to GMO crops. Not surprising, given the agency’s cozy relationship with Monsanto. But that makes it all the more telling that the once staunch-defender of GMO crops is now raising questions about industry’s long-term, decidedly unproven and unscientific, claims that biotechnology is the best thing since sliced (GMO wheat) bread.

Sustainable Pulse does a good job of sifting through the USDA’s report to reveal the agency’s criticisms of GMO crops.

4.   Pesticides are more dangerous than we thought.  Article in BioMed Research International, February 2014

More bad news on pesticides. A study published in BioMed Research International this month says that it’s not just the toxic chemicals we need to worry about in pesticides. It’s the inert ingredients, and how they interact with the active, toxic ingredients.

Typically, studies conducted to determine the safety of pesticides focus exclusively on the active ingredients. But scientists at the University of Caen tested eight commercial products, including Roundup, and found that nine of them were hundreds of times more toxic than their active ingredient alone.

Which product won the “Most Toxic” award? Monsanto’s Roundup, which was found to be “by far the most toxic of the herbicides and insecticides tested,” according to the study.

5. Small-Scale, organic farming needed to feed the world. U.N. Commission on Trade and Development (UNCTAD), Wake Up Before It Is Too Late, December 2013

In December 2013, the U.N. Commission on Trade and Development (UNCTAD) released the results of a lengthy, in-depth study that blows a huge hole in one of Monsanto’s favorite claims, that we need GMOs to feed the world. The study, entitled Wake Up Before it is Too Late, concluded with this warning: Small-scale organic farming is the only way to feed the world.

According to an analysis by one of the report’s contributors, the report contains in-depth sections on the shift toward more sustainable, resilient agriculture; livestock production and climate change; the importance of research and extension; the role of land use; and the role of reforming global trade rules.

More than 60 experts from around the world contributed to the report.

Clearly the evidence—real, scientific evidence—against GMO crops is mounting, when five new anti-GMO studies and reports surface in a matter of a couple of months.

How much more will it take before the USDA, U.S. Food & Drug Administration (FDA) and the U.S. Environmental Protection Agency stop supporting an industry under attack from the scientific community? And start putting public health before corporate profits?

In December, more than 200 scientists, physicians, and experts from relevant fields, signed a statement declaring that the biotech industry is deceiving the public when it claims that GMOs are safe. There is, the group said, no “scientific consensus” to support industry’s claims that GMOs are safe.

But as new studies surface every day, it’s become increasingly clear that among credible physicians and scientists, the consensus is that we’d better wake up, soon, to the risks and threats posed by a reckless technology that has been allowed to dominate our food and farming systems, unchecked, for far too long.

How Govt. Hides the Poor:--Formula for Measuring Poverty Dates to When a Loaf of Bread Cost 22 Cents

Depressing stats.
By Steven Rosenfeld
February 24, 2014 |

Why is Congress still measuring poverty based on a 1963 trip to the grocery store?

To determine who is officially poor in America, the federal government compares a family’s annual cash income to a figure produced by an arcane formula that's based on the price of food [3] in 1963, when a loaf of bread was 22 cents and a burger less than a quarter. Starting under President Lyndon Johnson, the government's official way of defining who is poor comes from calculating [4] a minimum food budget for a family of four, tripling that figure to cover other living costs, and then indexing it annually for inflation.

The result is the federal poverty level. For 2014, that threshold was $23,850 for a family of four. Smaller families can subtract $4,060 per person. Individuals making $11,670 or less in 2014 were officially poor. Many government programs, from School Lunch to the Earned Income Tax Credit to Obamacare's subsidies, decide eligibility by comparing one’s annual cash income to the official poverty level—or to a multiple of it, say 150 percent.

Cities, states, advocates and academics have known for years that this measure of who is poor undercounts millions of Americans. They know that the 1960s-based formula ignores modern living costs, such as today's cheaper food but higher housing and other expenses. And they have developed [5] alternative ways to track living costs that confirm poverty and economic insecurity of households just above the poverty line is far more widespread than Congress wants to admit.

But the 1960s poverty formula persists, and not without other pernicious effects. This heads-in-the-sand approach works against Congress spending more on current programs because lawmakers aren't using numbers that honestly depict the extent of economic insecurities. And an outdated methodology pre-empts a contemporary discussion of what a basic, dignified living standard costs, based on variables such as family size, one’s age and stage in life, and location.

“In the 1960s, the poverty measure was a focal point for the nation’s growing concern about poverty,” an April 2013 report [5] by New York City’s Center for Economic Opportunity said, recounting this history and shortcomings. “Over the decades, society evolved and policies have shifted, but the official poverty measure remains frozen in time. As a result it has lost its credibility and usefulness.”

“In 2011, our poverty line for the two-adult, two-child family comes to $30,945,” the NYC agency said [5], after using a more sophisticated modern formula. “The 2011 official [federal] poverty threshold for the corresponding family was $22,811.”

Looking back to 2005, New York City found that its poverty rate consistently was 2 percent higher than the official federal rate. The federal formula did not just ignore changes in real life expenses, but also decades of government programs that didn’t pay out cash but kept more money in poorer people’s pockets.

“In recent years an increasing share of what government programs do to support low-income families takes the form of tax credits and in-kind benefits," the Center for Economic Opportunity said. "If policymakers or the public want to know how these programs affect poverty, the official measure cannot provide an answer.”

There have been notable efforts in recent decades by government institutions, including Congress, to update, expand and replace the 1963 formula. But those efforts, while drawing a more realistic picture of who is poor in America, still aren’t framing federal policy. That’s because when it comes to Congress, better metrics aren’t used to create policy and law. One result is that anti-poverty advocates continually urge Congress to look at real living costs, and use more up-to-date numbers.

“Policymakers considering changes to social insurance programs such as Social Security and Medicare must consider the economic realities confronting older Americans,” a 2013 report [6] by the Economic Policy Institute said, in one such example. EPI based its analysis on a more comprehensive but unofficial measure used by the Census Bureau—the same one used by New York City. Not surprisingly, EPI found that poverty and near-poverty were more widespread among the elderly than the government admitted.

“Many of America’s 41 million seniors are just one bad economic shock away from significant material hardship,” it reported [6]. “Most seniors live on modest retirement incomes, which are often barely adequate—and sometimes inadequate—to cover the costs of basic necessities and support a simple, yet dignified, quality of life.”

But official Washington holds firm, using its arcane 1960s formula instead of adopting a more honest measure of tracking poverty and economically insecure Americans.

A Better Baseline

Social scientists have known for decades that the 1963-based poverty line didn’t include necessities such as shelter, utilities, healthcare, childcare, clothes, commuting and other out-of-pocket costs. In 1995, Congress asked the National Academy of Sciences (NAS) to create a formula including those factors. It did, but for years that sat on the shelf. It was used for academic research but not to recalibrate government policy and actions.

However, a decade after it was created, the NAS formula was adopted [5] by several cities and states. Starting in 2005, New York, Philadelphia, Connecticut, Georgia, Illinois, Masachusetts, Minnesota and Wisconsin used the NAS formula and soon found out there were many more households living just above and below the poverty line.

Starting in March 2010, the Census Bureau started applying [7] the 1995 formula, which it called the Supplemental Poverty Measure (SPM), and started issuing reports comparing the official and unofficial measures. For 2012, the “official measure” of poverty level income for “two-adult, two-child” households was $23,283, while the SPM was $31,060. For seniors, the Census Bureau said [7], “Note that poverty rates for those 65 years of age and over were higher under the SPM measure compared with the official measure.”

This Obama administration initiative, which was not embraced by the Congress, was noticed and praised by New York City Mayor Michael Bloomberg, who encouraged his city’s Center for Economic Opportunity to do a better job measuring poverty even if it meant acknowledging that New York had more poor people than previously thought.

“If we are going to successfully fight poverty, we need data that captures the challenges that poor households face as well as the benefits conveyed by our most significant government supports,” he said in 2011, when the Census released its first report using the NAS formula. “The decision to adopt this measure is not one that was made lightly; we know that a greater proportion of the American people are poor under this Supplemental Measure, and this is, if course an attention-grabbing finding. But it is important to have a measure that can accurately tell us what is going on.”

What’s going on, as Bloomberg puts it, is that Congress is in the dark about the extent of economic insecurity and the role of government programs to offset it. Perhaps the best example is Social Security, which is not just an anti-poverty program paying the elderly a monthly benefit, but also helps millions [8] of people with disabilities as well as children in families who lose a parent.

A recent Boston College study [9] found that the country’s latest generation of retirees lack $6.6 trillion to maintain current lifestyles as they age, underscoring just how important Social Security will be for their quality of life. For millions of baby boomers, especially people of color and women, it will make up 90 percent or more of retirement income, according to experts like the non-partisan National Academy of Social Insurance.

In June 2013, the Social Security Administration said [8] that there were 37 million retirees receiving benefits. Of those recipients, 23 percent of married couples and 46 percent of unmarried individuals relied on Social Security for 90 percent or more of their income. Those percentages are expected to grow in coming years, advocates say.

Washington’s current budget debate highlights this omission. President Obama is pushing to raise the minimum wage to $10.10 a hour, or $21,000 a year—saying that's a living wage. But absent from public debate is what it costs to keep vulnerable Americans, young and old, from falling into poverty or hovering above it by paying for household necessities.

How Much Is Needed?

When EPI experts Elise Gould and David Cooper looked [6] at replacing the official poverty line with the more modern Supplemental Poverty Measure, they found that seniors with a household income (via any mix of social insurance benefits or savings) that was less than double the SPM could be thrown into poverty by a “single economic shock.”

“There is a large share of elderly Americans who are economicaly vulnerable; a single shock could push them precariously close to or into outright material deprivation,” they wrote [6]. “With nearly half of all seniors in the United States falling below the threshold of economic vulnerability, policymakers must be especially careful when considering changes to social insurance programs—predominantly Social Security and Medicare—that protect this group.”

EPI’s conclusion that elderly Americans needed a monthly income twice that of the SPM is backed up ny an even more detailed poverty-line tool developed by the Washington-based advocacy group, Wider Opportunities for Women [10]. It has an online index [11] where anyone, from families with children to seniors, can plug in information on family type, income, location, savings and other expenses to calculate basic living costs below which [12] one becomes impoverished—not being able to pay for necessities.

All of these tools and indices—the Supplemental Poverty Measure, EPI’s finding that elderly Americans need to earn double the SPM to weather inevitable crises, WOW’s economic security index—are a far cry from the official federal poverty threshold. They suggest that Congress and the White House should be looking at a different big picture: what it costs to live today and how far social insurance programs fall short of that line.

There's no need to measure poverty and economic insecurity by indexing family food budgets based on large eggs costing 45 cents a dozen and macaroni-and-cheese dinners 39 cents, as they did in Wisconsin in 1963.

The Next Big Economic Bubble Is About to Pop

February 25, 2014 | Guardian
By Ha-Joon Chang

According to the stock market, the U.K. economy is in a boom. Not just any old boom, but a historic one. On 28 October 2013, the FTSE 100 index hit 6,734, breaching the level achieved at the height of the economic boom before the 2008 global financial crisis (that was 6,730, recorded in October 2007).

Since then, it has had ups and downs, but on Feb. 21, 2014 the FTSE 100 climbed to a new height of 6,838. At this rate, it may soon surpass the highest ever level reached since the index began in 1984 — that was 6,930, recorded in December 1999, during the heady days of the dotcom bubble.

The current levels of share prices are extraordinary considering the U.K. economy has not yet recovered the ground lost since the 2008 crash; per capita income in the U.K. today is still lower than it was in 2007. And let us not forget that share prices back in 2007 were themselves definitely in bubble territory of the first order.

The situation is even more worrying in the U.S. In March 2013, the Standard & Poor 500 stock market index reached the highest ever level [4], surpassing the 2007 peak (which was higher than the peak during the dotcom boom), despite the fact that the country's per capita income had not yet recovered to its 2007 level. Since then, the index has risen about 20 percent, although the U.S. per capita income has not increased even by two percent during the same period. This is definitely the biggest stock market bubble in modern history.

Even more extraordinary than the inflated prices is that, unlike in the two previous share price booms, no one is offering a plausible narrative explaining why the evidently unsustainable levels of share prices are actually justified.

During the dotcom bubble, the predominant view was that the new information technology was about to completely revolutionise our economies for good. Given this, it was argued, stock markets would keep rising (possibly forever) and reach unprecedented levels. The title of the book, Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, published in the autumn of 1999 when the Dow Jones index was not even 10,000, very well sums up the spirit of the time.

Similarly, in the runup to the 2008 crisis, inflated asset prices were justified in terms of the supposed progresses in financial innovation and in the techniques of economic policy.

It was argued that financial innovation — manifested in the alphabet soup of derivatives and structured financial assets, such as MBS, CDO, and CDS — had vastly improved the ability of financial markets to "price" risk correctly, eliminating the possibility of irrational bubbles. On this belief, at the height of the U.S. housing market bubble in 2005, both Alan Greenspan (the then chairman of the Federal Reserve Board) and Ben Bernanke (the then chairman of the Council of Economic Advisers to the President and later Greenspan's successor) publicly denied the existence of a housing market bubble — perhaps except for some "froth" in a few localities, according to Greenspan.

At the same time, better economic theory — and thus better techniques of economic policy — was argued to have allowed policymakers to iron out those few wrinkles that markets themselves cannot eliminate. Robert Lucas, the leading free-market economist and winner of the 1995 Nobel prize in economics, proudly declared in 2003 that "the problem of depression prevention has been solved." In 2004, Ben Bernanke (yes, it's him again) argued that, probably thanks to better theory of monetary policy, the world had entered the era of "great moderation", in which the volatility of prices and outputs is minimised.

This time around, no one is offering a new narrative justifying the new bubbles because, well, there isn't any plausible story. Those stories that are generated to encourage the share price to climb to the next level have been decidedly unambitious in scale and ephemeral in nature: higher-than-expected growth rates or number of new jobs created; brighter-than-expected outlook in Japan, China, or wherever; the arrival of the "super-dove" Janet Yellen [5] as the new chair of the Fed; or, indeed, anything else that may suggest the world is not going to end tomorrow.

Few stock market investors really believe in these stories. Most investors know that current levels of share prices are unsustainable; it is said that George Soros has already started betting against the U.S. stock market [6]. They are aware that share prices are high mainly because of the huge amount of money sloshing around thanks to quantitative easing (QE), not because of the strength of the underlying real economy. This is why they react so nervously to any slight sign that QE may be wound down on a significant scale.

However, stock market investors pretend to believe — or even have to pretend to believe — in those feeble and ephemeral stories because they need those stories to justify (to themselves and their clients) staying in the stock market, given the low returns everywhere else.

The result, unfortunately, is that stock market bubbles of historic proportion are developing in the U.S. and the U.K., the two most important stock markets in the world, threatening to create yet another financial crash. One obvious way of dealing with these bubbles is to take the excessive liquidity that is inflating them out of the system through a combination of tighter monetary policy and better financial regulation against stock market speculation (such as a ban on shorting or restrictions on high-frequency trading). Of course, the danger here is that these policies may prick the bubble and create a mess.

In the longer run, however, the best way to deal with these bubbles is to revive the real economy; after all, "bubble" is a relative concept and even a very high price can be justified if it is based on a strong economy. This will require a more sustainable increase in consumption based on rising wages rather than debts, greater productive investments that will expand the economy's ability to produce, and the introduction of financial regulation that will make banks lend more to productive enterprises than to consumers. Unfortunately, these are exactly the things that the current policymakers in the U.S. and the U.K. don't want to do.

We are heading for trouble.

Unfunnies

I'm for second amendment rights, but these "Stand Your Ground" laws are way too fucking insane and racist.

 

Florida is crazier than Texas! Yay, we're not the craziest anymore!

Bleak Retail Reports Continue With Sears and Best Buy

(please stop calling this depression a recovery)
NYTIMES
By ELIZABETH A. HARRIS    FEB. 27, 2014

Sears Holdings announced dismal fourth-quarter earnings on Thursday, which included a holiday season that the company’s chairman described as “tough to terrible” for Sears and many other retailers. Best Buy also released results Thursday, swinging to a profit from its previous fourth quarter.

At Sears, the net loss for the year was $1.4 billion. For the quarter, Sears lost $358 million, compared with $489 million for the year-ago quarter. Sales at American stores open at least a year dropped 7.8 percent, while comparable sales at Kmart stores fell 5.1 percent.

In an attempt to reverse its fortunes, Sears has been transforming itself from a traditional retailer to a company that focuses on members, through its Shop Your Way rewards program. This year, 69 percent of Sears full-line and Kmart sales came from Shop Your Way, up from 59 percent last year.

“Our full-year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures while we invest in our Shop Your Way program and integrated retail strategy,” said the Sears chairman, Edward S. Lampert. “We have been investing hundreds of millions of dollars annually in our transformation and will continue to invest in the future of the company.”

Best Buy reported earnings of $310 million for the quarter, compared with a net loss of $461 million during the fourth quarter of last year. The company’s profits were better than analysts had expected.

Sales at American stores open for at least a year were down 1.2 percent for the quarter; during the same period last year, sales at comparable stores were up 0.9 percent.

“As we said in our holiday sales release, the fourth quarter was an environment of declining retail traffic, intense promotion, fewer holiday shopping days and severe weather,” Hubert Joly, Best Buy’s chief executive, said in a statement. “In the face of these unusual circumstances, our strategy to be price competitive and provide an improved customer experience resulted in market share gains in a weaker-than-expected consumer electronics market.”

Funny Papers