Why the Hunger Continues ...
By JIM GOODMAN
The food crisis of 2008 never really ended, it was ignored and forgotten. The rich and powerful are well fed; they had no food crisis, no shortage, so in the West, it was little more than a short lived sound bite, tragic but forgettable. To the poor in the developing world, whose ability to afford food is no better now than in 2008, the hunger continues.
Hunger can have many contributing factors; natural disaster, discrimination, war, poor infrastructure. So why, regardless of the situation, is high tech agriculture always assumed to be the only the solution? This premise is put forward and supported by those who would benefit financially if their “solution” were implemented. Corporations peddle their high technology genetically engineered seed and chemical packages, their genetically altered animals, always with the “promise” of feeding the world.
Politicians and philanthropists, who may mean well, jump on the high technology band wagon. Could the promise of financial support or investment return fuel their apparent compassion?
The Alliance for a Green Revolution in Africa (AGRA) an initiative of the Bill and Melinda Gates Foundation and the Rockefeller Foundation supposedly works to achieve a food secure and prosperous Africa. While these sentiments and goals may be philanthropy at its best, some of the coalition partners have a different agenda.
One of the key players in AGRA, Monsanto (the devil), hopes to spread its genetically engineered seed throughout Africa by promising better yields, drought resistance, an end to hunger, etc. etc. Could a New Green Revolution succeed where the original Green Revolution had failed? Or was the whole concept of a Green Revolution a pig in a poke to begin with?
Monsanto (the devil) giving free seed to poor small holder farmers sounds great, or are they just setting the hook? Remember, next year those farmers will have to buy their seed. Interesting to note that the Gates Foundation purchased $23.1 million worth of Monsanto (the devil) stock in the second quarter of 2010. Do they also see the food crisis in Africa as a potential to turn a nice profit? Every corporation has one overriding interest--- self-interest, but surely not charitable foundations?
Food shortages are seldom about a lack of food, there is plenty of food in the world, the shortages occur because of the inability to get food where it is needed and the inability of the hungry to afford it. These two problems are principally caused by, as Francis Moore Lappe' put it, a lack of justice. There are also ethical considerations, a higher value should be placed on people than on corporate profit, this must be at the forefront, not an afterthought.
In 2008, there were shortages of food, in some places, for some people. There was never a shortage of food in 2008 on a global basis, nor is there currently. True, some countries, in Africa for example, do not have enough food where it is needed, yet people with money have their fill no matter where they live.
The current food riots in Mozambique were a result of increased wheat prices on the world market. The UN Food and Agriculture organization, (FAO) estimates the world is on course to the third largest wheat harvest in history, so increasing wheat prices were not caused by actual shortages, but rather by speculation on the price of wheat in the international market.
While millions of people go hungry in India, thousands of kilos of grain rot in storage. Unable to afford the grain, the hungry depend on the government to distribute food. Apparently that's not going so well.
Not everyone living in a poor country goes hungry, those with money eat. Not everyone living in rich country is well fed, those without money go hungry. We in the US are said to have the safest and most abundant food supply in the world, yet even here, surrounded by an over abundance of food, there are plenty of hungry people and their numbers are growing. Do we too have a food crisis, concurrent with an obesity crisis?
Why is there widespread hunger? Is food a right? Is profit taking through speculation that drives food prices out of the reach of the poor a right? Is pushing high technology agriculture on an entire continent at that could feed itself a (corporate) right?
In developing countries, those with hunger and poor food distribution, the small farmers, most of whom are women, have little say in agricultural policy. The framework of international trade and the rules imposed by the International Monetary Fund and World Bank on developing countries, places emphasis on crops for export, not crops for feeding a hungry population.
Despite what we hope are the best intentions of the Gates Foundation, a New Green Revolution based on genetically engineered crops, imported fertilizer and government imposed agricultural policy will not feed the world. Women, not Monsanto (the devil), feed most of the worlds population, and the greatest portion of the worlds diet still relies on crops and farming systems developed and cultivated by the indigenous for centuries, systems that still work, systems that offer real promise.
The report of 400 experts from around the world, The International Assessment of Agricultural Science and Technology for Development, is ignored by the proponents of a New Green Revolution, precisely because it shows that the best hope for ending hunger lies with local, traditional, farmer controlled agricultural production, not high tech industrial agriculture.
To feed the world, fair methods of land distribution must be considered. A fair and just food system depends on small holder farmers having access to land. The function of a just farming system is to insure that everyone gets to eat, industrial agriculture functions to insure those corporations controlling the system make a profit.
The ultimate cause of hunger is not a lack of Western agricultural technology, rather hunger results when people are not allowed to participate in a food system of their choosing. Civil wars, structural adjustment policies, inadequate distribution systems, international commodity speculation and corporate control of food from seed to table--- these are the causes of hunger, the stimulus for food crises.
If the Gates Foundation is serious about ending hunger in Africa, they need to read the IAASTD report, not Monsanto's (the devil) quarterly profit report. Then they can decide how their money might best be spent.
Saturday, September 18, 2010
The Future of the Internet
Net Neutrality, Free Speech and the Net
By MARK WEISBROT
The mass media remains, in the 21st century, one of the most powerful forces blocking social and economic progress. It is because of the mass media that tens of millions of Americans are convinced that budget deficits are more important than the lives ruined by unemployment, or that Social Security won’t be there for them when they retire. Or that their government’s occupation of Afghanistan, and its hundreds of military bases around the world, are protecting the “national security” of U.S. citizens.
All of these destructive myths – and many more – could be dispelled within a relatively short time if there were a free marketplace of ideas, instead of the “free press for those who own it” model currently in place. Of course, other falsehoods would persist for much longer; ideas, once widely accepted, can have great inertia. But during the last two decades the Internet has introduced a degree of competition in the world of mass communications, which although still quantitatively small, is nonetheless unprecedented. An interactive process has been set in motion, whereby the Internet and the blogosphere act as a check on the mass media, sometimes breaking important news that would otherwise go unnoticed or unreported (in systems with direct censorship such as China and also in limited democracies like the United States); and sometimes influencing the journalists who produce the mass media. This process has the potential to accelerate with the development and spread of Internet technology, for example with Internet television; and of course with advances in literacy and education.
This is rare in the history of technology, and especially in the technology of communications. Almost all prior innovations -- radio, television and motion pictures – have mostly made it easier for the few to control the many – like pilotless drone military planes.
This progressive contribution of the Internet is reliant on the principle of “net neutrality”: that Internet service providers treat all packets of data the same. An individual blogger’s challenge to the Washington Post can be downloaded by anyone at the same speed as the content of the multi-billion dollar corporate newspaper itself. Intelligent readers can decide for themselves who is correct.
The Federal Communications Commission has been considering what its role and rules should be for enforcing net neutrality, and in early August Google and Verizon put forth their own proposal on these issues. These two big corporations, along with others, are likely to have a considerable influence on the FCC and Congress, and their proposal has elicited a torrent of criticism. It exempts wireless and other “online services” from net neutrality, and has other big loopholes.
There is now a clear and present danger that the road will be paved to a fragmented Internet where service providers can determine what people will see on the Web, and carve out a “non-neutral” sector. As Senator Al Franken from Minnesota has noted, defending net neutrality is “the First Amendment issue of our time.”
America’s great concentrations of wealth – more concentrated than at any time since the 1920s – already dominate the Internet. But not nearly as much as they dominate the vast majority of information that Americans receive from more monopolized info-tainment/ news outlets such as TV, radio and what remains of the newspaper industry.
A coalition of organizations including MoveOn.org, Color of Change, Free Press and Credo Action is calling on Americans to lend a hand and preserve this one remaining mass medium of free speech and equal rights, before it is remade in accordance with corporate needs. We the people need the Internet as we know it in the battle of ideas; we had better fight for it.
By MARK WEISBROT
The mass media remains, in the 21st century, one of the most powerful forces blocking social and economic progress. It is because of the mass media that tens of millions of Americans are convinced that budget deficits are more important than the lives ruined by unemployment, or that Social Security won’t be there for them when they retire. Or that their government’s occupation of Afghanistan, and its hundreds of military bases around the world, are protecting the “national security” of U.S. citizens.
All of these destructive myths – and many more – could be dispelled within a relatively short time if there were a free marketplace of ideas, instead of the “free press for those who own it” model currently in place. Of course, other falsehoods would persist for much longer; ideas, once widely accepted, can have great inertia. But during the last two decades the Internet has introduced a degree of competition in the world of mass communications, which although still quantitatively small, is nonetheless unprecedented. An interactive process has been set in motion, whereby the Internet and the blogosphere act as a check on the mass media, sometimes breaking important news that would otherwise go unnoticed or unreported (in systems with direct censorship such as China and also in limited democracies like the United States); and sometimes influencing the journalists who produce the mass media. This process has the potential to accelerate with the development and spread of Internet technology, for example with Internet television; and of course with advances in literacy and education.
This is rare in the history of technology, and especially in the technology of communications. Almost all prior innovations -- radio, television and motion pictures – have mostly made it easier for the few to control the many – like pilotless drone military planes.
This progressive contribution of the Internet is reliant on the principle of “net neutrality”: that Internet service providers treat all packets of data the same. An individual blogger’s challenge to the Washington Post can be downloaded by anyone at the same speed as the content of the multi-billion dollar corporate newspaper itself. Intelligent readers can decide for themselves who is correct.
The Federal Communications Commission has been considering what its role and rules should be for enforcing net neutrality, and in early August Google and Verizon put forth their own proposal on these issues. These two big corporations, along with others, are likely to have a considerable influence on the FCC and Congress, and their proposal has elicited a torrent of criticism. It exempts wireless and other “online services” from net neutrality, and has other big loopholes.
There is now a clear and present danger that the road will be paved to a fragmented Internet where service providers can determine what people will see on the Web, and carve out a “non-neutral” sector. As Senator Al Franken from Minnesota has noted, defending net neutrality is “the First Amendment issue of our time.”
America’s great concentrations of wealth – more concentrated than at any time since the 1920s – already dominate the Internet. But not nearly as much as they dominate the vast majority of information that Americans receive from more monopolized info-tainment/ news outlets such as TV, radio and what remains of the newspaper industry.
A coalition of organizations including MoveOn.org, Color of Change, Free Press and Credo Action is calling on Americans to lend a hand and preserve this one remaining mass medium of free speech and equal rights, before it is remade in accordance with corporate needs. We the people need the Internet as we know it in the battle of ideas; we had better fight for it.
Housing Prices Will Plunge ... Again
The Swelling Backlog
By MIKE WHITNEY
Home ownership has become an albatross. Prices are falling, demand is weak, foreclosures are soaring, and inventory is backed up to the moon. If there's an upside, it's a mystery to me.
Many of the people who bought homes in the last 6 to 7 years, realize now that they were caught in a massive mortgage laundering scam. The banks lured unqualified applicants into "easy-term" loans to so they could peddle their "fishwrap" mortgage paper to clueless investors. The con worked so well, that housing prices doubled or--in some cases--tripled in value. But the inflated prices did not reflect supply/demand fundamentals. They reflected fraud-- industrial-scale fraud that created an $8 trillion housing bubble. Now the bubble has burst and prices are returning to trend. That means foreclosures will rise while millions of homeowners will slip deeper into the red.
This is from Bloomberg News:
This is from CNBC's Diana Olick:
As prices continue to tumble, people will want to know why the Fed's $1.25 trillion Quantitative Easing (QE) program didn't stabilize prices as Fed chairman Ben Bernanke said it would.
The fact is, Bernanke's QE program had no effect on prices. Prices are a function of supply and demand. The banks simply withheld supply while the exchange of assets took place ($1.25 trillion reserves for the banks non performing loans and mortgage-backed securities) so the bailout could go forward without inciting too much public rage. (The last thing Bernanke wanted, was another TARP firestorm.) But QE did not increase demand, decrease supply, improve sales or lower interest rates. In fact, interest rates have fallen further since the program ended. Some pundits say that the deal was a "wash", that the Fed merely exchanged illiquid assets for liquid assets. But this is misleading, too. The bottom line is, the banks are now stuffed with a trillion in reserves while while the Fed's balance sheet is loaded with downgraded, toxic assets for which there is no market. It's not hard to figure out who got the better end of the deal.
Now that the banks have beefed up their equity, they don't need to play-along anymore, which is why they've started dumping their housing stockpile on the market. Here's a clip from an article in the Wall Street Journal that helps to fill out the details:
This is from the WSJ:
By MIKE WHITNEY
Home ownership has become an albatross. Prices are falling, demand is weak, foreclosures are soaring, and inventory is backed up to the moon. If there's an upside, it's a mystery to me.
Many of the people who bought homes in the last 6 to 7 years, realize now that they were caught in a massive mortgage laundering scam. The banks lured unqualified applicants into "easy-term" loans to so they could peddle their "fishwrap" mortgage paper to clueless investors. The con worked so well, that housing prices doubled or--in some cases--tripled in value. But the inflated prices did not reflect supply/demand fundamentals. They reflected fraud-- industrial-scale fraud that created an $8 trillion housing bubble. Now the bubble has burst and prices are returning to trend. That means foreclosures will rise while millions of homeowners will slip deeper into the red.
This is from Bloomberg News:
"The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market. Shadow inventory---the supply of homes in default or foreclosure that may be offered for sale---is preventing prices from bottoming after a 28 percent plunge from 2006, according to analysts from Moody’s Analytics Inc., Fannie Mae, Morgan Stanley and Barclays Plc. Those properties are in addition to houses that are vacant or that may soon be put on the market by owners.The Obama administration has tried everything to boost housing sales--incentives, subsidies, tax breaks, even record-low interest rates--but nothing has worked. Now it looks like they're ready to throw in the towel and let prices fall, but that presents risks, too. Presently, there's a backlog of 4 million homes listed with brokers. (At the current pace, it would take 12 months to sell that number of homes.) However, as Bloomberg notes, there's another 12 million properties that have been kept off the market. As those homes gradually come on-line, demand will weaken and prices will fall.
“The best thing that could happen is for prices to get to a level that clears the market,” said Joshua Shapiro chief U.S. economist of Maria Fiorini Ramirez Inc, who predicts prices may fall another 10 percent to 15 percent. “Right now, buyers know it hasn’t hit bottom, so they’re sitting on the sidelines.” (U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms, John Gittlesohn and Kathleen Howley, Bloomberg)
This is from CNBC's Diana Olick:
Prices have been recovering since last Fall, largely thanks to the artificial stimulus of the $8000/$6500 home buyer tax credit. But prices were also benefiting from a slight bump in confidence in the housing market, fed by an apparent drop in the foreclosure numbers. In reality, the foreclosure numbers were dropping only because banks and states were delaying the process, as they tried to cram as many borrowers as possible into what we now know is a largely unsuccessful government-backed mortgage modification program....Actually, prices have begun to double dip already. According to CoreLogic:
Now home buyer confidence is back in the dumps, which is clear from another report out today showing that for the 3rd straight month the percentage of home sellers on the market who have slashed their asking prices at least once has gone up....Unless we see a marked, widespread increase in home sales over the next several months, prices will go from flat to down once again. ("Home price double dip begins, Diana Olick, CNBC)
"The majority of states experienced price declines and price declines are spreading across more geographies relative to a few months ago. Home prices fell in 36 states in July, nearly twice the number in May and the highest since last November when national home prices were declining," said Mark Fleming, chief economist for CoreLogic."Now that the administration's incentives programs have ended, the underlying trend has started to reassert itself. Experts figure that prices could slide another 10 to 20 percent, but no one knows for sure.
As prices continue to tumble, people will want to know why the Fed's $1.25 trillion Quantitative Easing (QE) program didn't stabilize prices as Fed chairman Ben Bernanke said it would.
The fact is, Bernanke's QE program had no effect on prices. Prices are a function of supply and demand. The banks simply withheld supply while the exchange of assets took place ($1.25 trillion reserves for the banks non performing loans and mortgage-backed securities) so the bailout could go forward without inciting too much public rage. (The last thing Bernanke wanted, was another TARP firestorm.) But QE did not increase demand, decrease supply, improve sales or lower interest rates. In fact, interest rates have fallen further since the program ended. Some pundits say that the deal was a "wash", that the Fed merely exchanged illiquid assets for liquid assets. But this is misleading, too. The bottom line is, the banks are now stuffed with a trillion in reserves while while the Fed's balance sheet is loaded with downgraded, toxic assets for which there is no market. It's not hard to figure out who got the better end of the deal.
Now that the banks have beefed up their equity, they don't need to play-along anymore, which is why they've started dumping their housing stockpile on the market. Here's a clip from an article in the Wall Street Journal that helps to fill out the details:
"The Home Affordable Modification Program has fallen short of its goals. So far, fewer than 500,000 loans have been modified, below the target of three million to four million. Yet the program served as a “closet moratorium” on foreclosures that stanched the flow of bank-owned homes to the market, said Ronald Temple, portfolio manager at Lazard Asset Management."Of course, the HAMP program failed. It was designed to fail. It was a stalling device like the other foreclosure moratoria. All of the subsidies, incentives and tax credits were designed to run-out-the-clock while the banks offloaded their garbage loans onto the Fed's balance sheet. Now that the Fed has successfully transferred the reserves, there's no reason to continue the charade. The great housing inventory purge can resume with gusto. And, it has. Servicers have already picked up the pace of foreclosures while "home seizures reached a record for the third time in five months in August" according to RealtyTrac Inc.
This is from the WSJ:
“We see the perfect storm brewing with rising supply and falling demand,” said Ivy Zelman, chief executive of research firm Zelman & Associates and one of the first to warn of trouble five years ago. She estimated that distressed sales could account for half of the market by year-end if traditional sales didn’t rebound….."Homeowners have already seen prices drop 30% from their bubble-highs in 2006. Another sharp dip would be disastrous for people facing retirement or living on fixed income. If Obama's got something up his sleeve--like emergency cramdown legislation that will force banks to lower the face-value of the mortgage---he'd better get to it. Things could get ugly fast.
The Banks and Their Protectors
Elizabeth Warren's Challenge
By JAMES B. RULE
Remember The Sorcerer’s Apprentice? The wannabee enchanter sets a spell to get his broom to carry water to the magician’s workshop, but his skills don’t extend to stopping the process. By the time the boss gets back, the place is awash.
Something similar may be happening to your money. And if so, you’d better hope that the Obama administration gives its fullest support to Elizabeth Warren, its shadow appointment as consumer affairs czarina.
Late last year, I discovered that I was no longer required to make a regular monthly payment I’d authorized from my Wells-Fargo checking account. I went into my branch office in Berkeley and instructed them to cancel the order. After waiting through their scripted happy-talk, I got an astounding response. Depositors cannot cancel such monthly deductions; such arrangements can only be stopped by the recipients of the payments.
After years of studying how government and corporate bureaucracies deal with the public, I thought I’d heard it all. But here my bank was telling me that, once I’d agreed to pay another party from my account, I had no power to stop such payments on my own. In this case, I quickly solved the problem through other means. But what if the payee had refused to turn off the tap drawing my funds? Who would enforce the seemingly transparent right of any depositor to cease payments from his or her personal account? I decided to learn what I could.
The federal agency responsible for oversight of banks like Wells-Fargo, it seems, is the Office of the Comptroller of the Currency. This body has established something called the OCC Ombudsman, who maintains a website with the promising address www.HelpWithMyBank.gov I dutifully submitted a detailed complaint via the website, triggering an acknowledgment assigning my complaint a number. It bore the admonition: “Please do not reply to this e-mail. We are unable to respond to messages sent to this address.”
It seems that they have trouble responding any other way, as well. My complaint yielded no response for more than six months—at which point the OCC simply suggested that I take my business elsewhere. But the cyberspace Ombudsman did, apparently, refer my words to Wells Fargo, who responded promptly. “Electronic debits are established between the customer and the payee; as a result, we cannot cancel them” wrote a Ms.Debbie Hein from the Customer Correspondence Department. Not even breathing hard after this energetic leap of logic, she went on: “Please contact the source of the debit [i.e., the people debiting my account] to cancel the payment.” Ms. Hein did go on to note that I had the option of placing a cancel payment order against these deductions—at that cost of $29.00, renewable every six month. That seemed like a lot to pay for the privilege of hanging on to my own money.
Exasperated, I decided to write my elected representatives. I banged out three detailed letters, with documentation of my communications with the OCC and Wells Fargo. These I sent to Senators Feinstein and Boxer and to my Congresswoman, Barbara Lee—taking heart from word on Ms. Lee’s website of her membership on the House Subcommittee on Financial Services. “This is to request your help in changing some predatory and unjust banking practices that affect me and countless other consumers,” I started out, and went on to detail my experiences. Take that, OCC and Wells-Fargo! Your day of accountability is just around the corner! Or so I thought last February, when I faxed the letters from my home in Berkeley.
Neither Senator Boxer nor Representative Lee has ever replied—either to my original inquiry, nor to follow-up letters two months later. Senator Feinstein did send a response, but its quality proved something of a disappointment: “The Office of the Comptroller of the Currency has already responded to your request and issued a decision on your case,” she wrote. “My office cannot overturn the agency’s decision or assist you with any appeal you might pursue.” My reply to the Senator pointing out that the OCC had not issued any decision on my complaint—or even a comment on it—went unanswered.
Identifying myself as a UC Berkeley researcher, I e-mailed the OCC’s Washington office with a request for their position on Wells-Fargo’s policy. A press officer pinpointed the Federal Reserve’s Regulation E as governing cases like mine. Under the heading “Consumer’s Right To Stop Payment”, that regulation reads “The financial institution must honor an oral stop-payment order made at least three business days before a scheduled debit. If the debit is resubmitted, the institution must continue to honor the stop-payment order…. Once a financial institution has been notified that the consumer’s authorization is no longer valid, it must block all future payment for the particular debit …”.
Incredulous at the disconnect between the regulations and Wells-Fargo’s practice, I ultimately reached a couple of the bank’s Senior Vice Presidents. At first, the response wasn’t much different from Wells Fargo’s original letter: “Only the merchant and the customer can cancel or change the [automatic payment] agreement,” stated Mr. Chris Hammond, a media relations spokesman. But what if the party receiving the payments refused to play ball?
Any responsible organization would stop making deductions at the consumer’s request, averred the second Senior V-P, Mr. Chris Huppert--as I thought of the bills and credit card charges I’d received over the years for services I’d long since declined. “The bank is just a passive agent in the transaction,” he added. I persisted: what about situations where recipients contended that they had a right to those monthly payments, and continued drawing them? Well, Mr. Huppert allowed, there was a path open to depositors in such cases: they should re-contact the bank, report the recipient’s refusal to cease the deductions, and sign a written statement to that effect. In this case, he assured me, future deductions would be refused. But how many consumers know that this recourse even exists?
And what about the Federal Reserve’s Regulation E, whose plain language affirms the right of consumers to stop payments easily, at their own instance? Mr. Huppert insisted that Wells Fargo’s practices were consistent with Automated Clearing House rules observed by nearly all banks—and “right in synch” with Federal Reserve regulations. No one is Washington or anywhere else, apparently, has been inclined to enforce another interpretation.
We live in a world where financial transactions happen less and less in face-to-face encounters, and more and more with impersonal bureaucracies, public and private. Increasingly, these new billings and payments take place via the internet. Organizations of all kinds prefer to get paid electronically, directly from our computerized accounts. It’s far cheaper and more expedient for them to avoid paper billing and access customer’s funds automatically. And often it’s easier for consumers, as well—so long as all parties agree on who owes what to whom.
But disagreements inevitably occur—with cell phone companies, internet service providers, even the gym you’ve signed up with for a monthly fee. As every consumer will have noticed, many service providers are enormously easy to communicate with when one wants to open an account—and virtually impossible to reach, when something goes wrong. Sometimes it is impossible even to get a human being on the phone. There has to be an easy, cost-free way for customers to pull the plug on such arrangements, when their bank accounts are hemorrhaging, and no one at the other end is listening. The alternative is to leave consumers at the mercy of any organization they may once have agreed to pay—and to leave the organizations with no incentive to clean up their acts.
My tussle with Wells Fargo has taught me a bit about the position of bank customers—both the formal rights stipulated by the Federal Reserve, and about the extreme difficulty of getting anyone to enforce them. One has to wonder what hope there could be for an ordinary consumer of limited time and patience, confronted by bank practices as one-sided as these. My own file of electronic and postal correspondence over the last six months with Wells Fargo, its alleged regulators in Washington, and my elected representatives has taken on the proportions of a phone book for a respectable-sized town. Most consumers are obviously not remotely in a position to do this—nor should they attempt to, if the systems for deflecting or simply ignoring such queries are as efficient as they appear.
The country and the world are now struggling to recover from a near-collapse of America’s financial system caused, in part, by banks’ irresponsible management of relations with their customers. In what many consider an unduly mild response, the administration has sought to create the consumer financial protection agency that Elizabeth Warren has finally been picked to organize—if not, officially, to preside over. The reason for her back-door non-appointment, of course, is the intensity of industry opposition to any serious reform. According to The Huffington Post, the OCC and its industry allies have bitterly fought the proposed consumer protection agency on grounds that it would “always prevail” in clashes with banks.
If my inquiries are any guide, I think the banks and their protectors in government have a way to go before they reach that point.
By JAMES B. RULE
Remember The Sorcerer’s Apprentice? The wannabee enchanter sets a spell to get his broom to carry water to the magician’s workshop, but his skills don’t extend to stopping the process. By the time the boss gets back, the place is awash.
Something similar may be happening to your money. And if so, you’d better hope that the Obama administration gives its fullest support to Elizabeth Warren, its shadow appointment as consumer affairs czarina.
Late last year, I discovered that I was no longer required to make a regular monthly payment I’d authorized from my Wells-Fargo checking account. I went into my branch office in Berkeley and instructed them to cancel the order. After waiting through their scripted happy-talk, I got an astounding response. Depositors cannot cancel such monthly deductions; such arrangements can only be stopped by the recipients of the payments.
After years of studying how government and corporate bureaucracies deal with the public, I thought I’d heard it all. But here my bank was telling me that, once I’d agreed to pay another party from my account, I had no power to stop such payments on my own. In this case, I quickly solved the problem through other means. But what if the payee had refused to turn off the tap drawing my funds? Who would enforce the seemingly transparent right of any depositor to cease payments from his or her personal account? I decided to learn what I could.
The federal agency responsible for oversight of banks like Wells-Fargo, it seems, is the Office of the Comptroller of the Currency. This body has established something called the OCC Ombudsman, who maintains a website with the promising address www.HelpWithMyBank.gov I dutifully submitted a detailed complaint via the website, triggering an acknowledgment assigning my complaint a number. It bore the admonition: “Please do not reply to this e-mail. We are unable to respond to messages sent to this address.”
It seems that they have trouble responding any other way, as well. My complaint yielded no response for more than six months—at which point the OCC simply suggested that I take my business elsewhere. But the cyberspace Ombudsman did, apparently, refer my words to Wells Fargo, who responded promptly. “Electronic debits are established between the customer and the payee; as a result, we cannot cancel them” wrote a Ms.Debbie Hein from the Customer Correspondence Department. Not even breathing hard after this energetic leap of logic, she went on: “Please contact the source of the debit [i.e., the people debiting my account] to cancel the payment.” Ms. Hein did go on to note that I had the option of placing a cancel payment order against these deductions—at that cost of $29.00, renewable every six month. That seemed like a lot to pay for the privilege of hanging on to my own money.
Exasperated, I decided to write my elected representatives. I banged out three detailed letters, with documentation of my communications with the OCC and Wells Fargo. These I sent to Senators Feinstein and Boxer and to my Congresswoman, Barbara Lee—taking heart from word on Ms. Lee’s website of her membership on the House Subcommittee on Financial Services. “This is to request your help in changing some predatory and unjust banking practices that affect me and countless other consumers,” I started out, and went on to detail my experiences. Take that, OCC and Wells-Fargo! Your day of accountability is just around the corner! Or so I thought last February, when I faxed the letters from my home in Berkeley.
Neither Senator Boxer nor Representative Lee has ever replied—either to my original inquiry, nor to follow-up letters two months later. Senator Feinstein did send a response, but its quality proved something of a disappointment: “The Office of the Comptroller of the Currency has already responded to your request and issued a decision on your case,” she wrote. “My office cannot overturn the agency’s decision or assist you with any appeal you might pursue.” My reply to the Senator pointing out that the OCC had not issued any decision on my complaint—or even a comment on it—went unanswered.
Identifying myself as a UC Berkeley researcher, I e-mailed the OCC’s Washington office with a request for their position on Wells-Fargo’s policy. A press officer pinpointed the Federal Reserve’s Regulation E as governing cases like mine. Under the heading “Consumer’s Right To Stop Payment”, that regulation reads “The financial institution must honor an oral stop-payment order made at least three business days before a scheduled debit. If the debit is resubmitted, the institution must continue to honor the stop-payment order…. Once a financial institution has been notified that the consumer’s authorization is no longer valid, it must block all future payment for the particular debit …”.
Incredulous at the disconnect between the regulations and Wells-Fargo’s practice, I ultimately reached a couple of the bank’s Senior Vice Presidents. At first, the response wasn’t much different from Wells Fargo’s original letter: “Only the merchant and the customer can cancel or change the [automatic payment] agreement,” stated Mr. Chris Hammond, a media relations spokesman. But what if the party receiving the payments refused to play ball?
Any responsible organization would stop making deductions at the consumer’s request, averred the second Senior V-P, Mr. Chris Huppert--as I thought of the bills and credit card charges I’d received over the years for services I’d long since declined. “The bank is just a passive agent in the transaction,” he added. I persisted: what about situations where recipients contended that they had a right to those monthly payments, and continued drawing them? Well, Mr. Huppert allowed, there was a path open to depositors in such cases: they should re-contact the bank, report the recipient’s refusal to cease the deductions, and sign a written statement to that effect. In this case, he assured me, future deductions would be refused. But how many consumers know that this recourse even exists?
And what about the Federal Reserve’s Regulation E, whose plain language affirms the right of consumers to stop payments easily, at their own instance? Mr. Huppert insisted that Wells Fargo’s practices were consistent with Automated Clearing House rules observed by nearly all banks—and “right in synch” with Federal Reserve regulations. No one is Washington or anywhere else, apparently, has been inclined to enforce another interpretation.
We live in a world where financial transactions happen less and less in face-to-face encounters, and more and more with impersonal bureaucracies, public and private. Increasingly, these new billings and payments take place via the internet. Organizations of all kinds prefer to get paid electronically, directly from our computerized accounts. It’s far cheaper and more expedient for them to avoid paper billing and access customer’s funds automatically. And often it’s easier for consumers, as well—so long as all parties agree on who owes what to whom.
But disagreements inevitably occur—with cell phone companies, internet service providers, even the gym you’ve signed up with for a monthly fee. As every consumer will have noticed, many service providers are enormously easy to communicate with when one wants to open an account—and virtually impossible to reach, when something goes wrong. Sometimes it is impossible even to get a human being on the phone. There has to be an easy, cost-free way for customers to pull the plug on such arrangements, when their bank accounts are hemorrhaging, and no one at the other end is listening. The alternative is to leave consumers at the mercy of any organization they may once have agreed to pay—and to leave the organizations with no incentive to clean up their acts.
My tussle with Wells Fargo has taught me a bit about the position of bank customers—both the formal rights stipulated by the Federal Reserve, and about the extreme difficulty of getting anyone to enforce them. One has to wonder what hope there could be for an ordinary consumer of limited time and patience, confronted by bank practices as one-sided as these. My own file of electronic and postal correspondence over the last six months with Wells Fargo, its alleged regulators in Washington, and my elected representatives has taken on the proportions of a phone book for a respectable-sized town. Most consumers are obviously not remotely in a position to do this—nor should they attempt to, if the systems for deflecting or simply ignoring such queries are as efficient as they appear.
The country and the world are now struggling to recover from a near-collapse of America’s financial system caused, in part, by banks’ irresponsible management of relations with their customers. In what many consider an unduly mild response, the administration has sought to create the consumer financial protection agency that Elizabeth Warren has finally been picked to organize—if not, officially, to preside over. The reason for her back-door non-appointment, of course, is the intensity of industry opposition to any serious reform. According to The Huffington Post, the OCC and its industry allies have bitterly fought the proposed consumer protection agency on grounds that it would “always prevail” in clashes with banks.
If my inquiries are any guide, I think the banks and their protectors in government have a way to go before they reach that point.
Thursday, September 16, 2010
GOP Civil War: Establishment vs Tea Party
Evan McMorris-Santoro | September 15, 2010
Add Rush Limbaugh to the list of prominent conservatives tearing into Karl Rove's hide today. As Rove continued his tour slamming freshly minted Delaware Republican Senate nominee Christine O'Donnell over the considerable number of skeletons in her closet, Rush was almost literally beside himself with frustration at the idea that anyone -- much less The Architect -- would dare violate the 11th Commandment so brazenly.
O'Donnell's nomination has created deep divisions between the Republican Party and right-wing activists. Last night, Rove bashedO'Donnell -- and her chances of being elected -- and insisted that she's said a lot of "nutty things." He was attacked by some right-wingers for those comments. O'Donnell whacked him back in a televised interview this morning. And then Rove responded to O'Donnell and his right-wing critics, daring them to 'prove me wrong'. Then Palin slammed Rove. Now it's Limbaugh's turn.
"If 51 seats was really the objective -- if getting the majority is really that important, then let's go balls to the wall for Christine O'Donnell!" Limbaugh screamed on his radio show today after playing a clip of Rove's already infamousanti-O'Donnell interview on Hannity last night.
"Why not fight for it?" Limbaugh asked. "Why not fight for it? Castle's OK as the 51st vote but this woman isn't?"
Rush seemed in danger of having an aneurysm at the idea that Rove would do something as heretical as point out that O'Donnell has more than a few very serious character flaws and -- as the polls show -- is a serious underdog against her Democratic opponent in November, in a race that Republicans had once thought was theirs for the taking.
"Everyone I know that saw this was just--they were perplexed and said, 'What's going on? Why is he so mad at a Republican?'" Rush said of Rove. "Where was this anger directed at a Democrat ever?"
Limbaugh then freaked out over all the horrible character flaws about Democrats -- the late Ted Kennedy and President Obama were mentioned -- that Rove has supposedly never pointed out in an interview.
"Our Vice President Joe Biden is a known plagiarist," Rush said. "We're going to talk about Christine O'Donnell's baggage? Where is this criticism of Democrats? Where has it been?"
Add Rush Limbaugh to the list of prominent conservatives tearing into Karl Rove's hide today. As Rove continued his tour slamming freshly minted Delaware Republican Senate nominee Christine O'Donnell over the considerable number of skeletons in her closet, Rush was almost literally beside himself with frustration at the idea that anyone -- much less The Architect -- would dare violate the 11th Commandment so brazenly.
O'Donnell's nomination has created deep divisions between the Republican Party and right-wing activists. Last night, Rove bashedO'Donnell -- and her chances of being elected -- and insisted that she's said a lot of "nutty things." He was attacked by some right-wingers for those comments. O'Donnell whacked him back in a televised interview this morning. And then Rove responded to O'Donnell and his right-wing critics, daring them to 'prove me wrong'. Then Palin slammed Rove. Now it's Limbaugh's turn.
"If 51 seats was really the objective -- if getting the majority is really that important, then let's go balls to the wall for Christine O'Donnell!" Limbaugh screamed on his radio show today after playing a clip of Rove's already infamousanti-O'Donnell interview on Hannity last night.
"Why not fight for it?" Limbaugh asked. "Why not fight for it? Castle's OK as the 51st vote but this woman isn't?"
Rush seemed in danger of having an aneurysm at the idea that Rove would do something as heretical as point out that O'Donnell has more than a few very serious character flaws and -- as the polls show -- is a serious underdog against her Democratic opponent in November, in a race that Republicans had once thought was theirs for the taking.
"Everyone I know that saw this was just--they were perplexed and said, 'What's going on? Why is he so mad at a Republican?'" Rush said of Rove. "Where was this anger directed at a Democrat ever?"
Limbaugh then freaked out over all the horrible character flaws about Democrats -- the late Ted Kennedy and President Obama were mentioned -- that Rove has supposedly never pointed out in an interview.
"Our Vice President Joe Biden is a known plagiarist," Rush said. "We're going to talk about Christine O'Donnell's baggage? Where is this criticism of Democrats? Where has it been?"
What Lies in Store for Third-Party Game Retailers?
By Becky Jones - Wednesday September 15, 2010
Potential bad news for gamers: that used copy of Assassin’s Creed II you just bought for PS3? It may not be legally yours. In a surprise ruling on September 10th, The US Court of Appeals for the Ninth Circuit ruled against defendant and software consumer, Timothy Vernor, in favor of software mogul, Autodesk, Inc. The software company claimed that Vernor, who purchased unopened copies of the design software, AutoCAD, at local garage and office sales and then sold the software on eBay, is in violation of Autodesk’s intellectual property rights, as he did not purchase the product from its true owner, Autodesk, Inc.
The company submitted an appeal after a District Court ruled in favor of the defendant. In the preceding trial, Vernor’s defense maintained that the resale of the product in question was protected under the First Sale Doctrine, a law originating in 1908 which states that copyright holders can’t prevent a buyer from reselling or renting an item purchased from the owner, as long as copies aren’t made. In their appeal, Autodesk, Inc. disputed the admissibility of this claim, as Vernor did not purchase the software from its owner.
In the appeal, the company also referenced its licensing agreement contract, to which all users must agree, before using the AutoCAD software. Although Vernor never signed or accepted any virtual contract, because he never actually used AutoCAD, the court ruled this license reference admissible, because they claim that the contract, itself, is the legal property of Autodesk, Inc., and is theirs to interpret as they see fit.
The decision raises concerns for consumers in whether or not they may “own” anything that is considered to be the intellectual property of the publisher/producer. The re-sale of movies, books, music, computer software, and video games may face significant impending changes due to this ruling.
It would seem that the definition of true “ownership” is at a crossroads. Can you truly own the brainchild of another person? If you buy a painting from an artist, are you legally bound to give that painting back when you don’t want it anymore, or can you sell it to your neighbor at your yard sale for $15?
The debate here is whether or not it is ethical to re-sell intellectual property that, according to this ruling, now technically “belongs” to the producer. This could have a potentially crippling affect on the used-game industry, particularly for stores like GameStop, whose inventory stock seems to be practically 50% used games. Currently, a game developer makes a percentage of the initial sale of the game, and a small commission whenever the game is rented. Technically, the developer does not make commission on used games sold by a third-party distributor, but that’s not to say that they don’t see any benefits from the used-game market.
Think about your copy of Halo 3, Mass Effect 2, Dragon Age, or Fallout 3. How much money did you spend on map packs, add-ons and story-continuations? While someone may not have paid the full $60 for a new copy of a game, they may be sending extra cash the developer’s way through online gaming marketplaces like the PlayStation Network, the Xbox LIVE Marketplace, or the Wii Shop Channel. Even developers of Massively-Multiplayer Online Role-Playing Games (MMORPGs) are able to forgo the $15-per-month standard in favor of being free-to-play, because they know players will be willing to buy items in-game if they aren’t charged a regular, monthly rate. Furthermore, not only can used games boost the sale of online add-ons (that sometimes come close to equaling the price of the game), but by being able to offer games at a lower cost, used games encourage gamers to try out new developers and genres that they normally wouldn’t pick up at full-price.
Someone who is usually only interested in first-person-shooters, for example, may walk into GameStop one day, and find a used copy of Mistwalker’s Lost Odyssey. Enticed by the cheaper price tag, they decide to branch-out and buy it. If it turns out that this person loves the game, or even mildly enjoys it, they are much more likely to pick up the developers preceding and subsequent releases at full price, which they never would have bought before.
Someone who has a positive experience with a game isn’t going to want to wait for the slightly-cheaper used copy of the sequel to hit the shelves; they’re going to buy it new. That one initial purchase, even though it may not immediately benefit the developer, will earn them money in the end. Aside from the impact that the court ruling may have on developers, this ruling may yet prove to be a double-edged sword.
Although the banning of used games from retailers may potentially cut-out an entire consumer market for those who may only be able to afford games at the lower, used rate, this may also potentially mean that developers will have more robust funding to create better, more intuitive games; but for whom are they developing? Only for gamers who are able to keep up with the $60-a-game status quo?
I see two potential outcomes of this ruling on the way in which games are transferred from developer to consumer. The most probable outcome is already emerging as the latest trend in media: the digital download. This shift is not only becoming well-established in the gaming industry via online marketplaces, but in the music (iTunes), literature (e-readers), and movie (instant-queue Netflix) industries as well.
The digital download knocks-out the potential for third-party re-sales by removing a physical product. With programs like iTunes, you do not physically own the media that you download; you just pay a price to unlock the ability to play it in your iPod or laptop. The downfall for the developer, though, is that with digital downloads, come hackers. There already exist countless game torrents, easily playable with a few console modifications and hacks like the Homebrew channel on the Nintendo Wii. With stricter regulation comes the black market; this is proven to be true time and time again.
In a second possible outcome, game companies may decide to take a different route that would allow them to retain their used-game market-base, and earn income off of their second-hand products at the same time. This scenario would either eliminate the third-party by having the game developer, themselves, buy and sell used copies of their games online, or by creating a law that retailers like GameStop must pay a commission on all used sales. Obviously this would not stop personal transactions like that which began this debate.
Whether or not the gaming industry will start cracking-down on elderly couples selling their grandson’s copy of DOOM II that he left at their house fourteen years ago, is yet to be seen. One thing’s for sure, though, and that’s that the intellectual property market, and the impending laws that come with it, are going to change and evolve as media does. Vernor and his defense are now seeking an 11-judge review of the recent decision, and will apply to the Supreme Court if necessary.
Potential bad news for gamers: that used copy of Assassin’s Creed II you just bought for PS3? It may not be legally yours. In a surprise ruling on September 10th, The US Court of Appeals for the Ninth Circuit ruled against defendant and software consumer, Timothy Vernor, in favor of software mogul, Autodesk, Inc. The software company claimed that Vernor, who purchased unopened copies of the design software, AutoCAD, at local garage and office sales and then sold the software on eBay, is in violation of Autodesk’s intellectual property rights, as he did not purchase the product from its true owner, Autodesk, Inc.
The company submitted an appeal after a District Court ruled in favor of the defendant. In the preceding trial, Vernor’s defense maintained that the resale of the product in question was protected under the First Sale Doctrine, a law originating in 1908 which states that copyright holders can’t prevent a buyer from reselling or renting an item purchased from the owner, as long as copies aren’t made. In their appeal, Autodesk, Inc. disputed the admissibility of this claim, as Vernor did not purchase the software from its owner.
In the appeal, the company also referenced its licensing agreement contract, to which all users must agree, before using the AutoCAD software. Although Vernor never signed or accepted any virtual contract, because he never actually used AutoCAD, the court ruled this license reference admissible, because they claim that the contract, itself, is the legal property of Autodesk, Inc., and is theirs to interpret as they see fit.
The decision raises concerns for consumers in whether or not they may “own” anything that is considered to be the intellectual property of the publisher/producer. The re-sale of movies, books, music, computer software, and video games may face significant impending changes due to this ruling.
It would seem that the definition of true “ownership” is at a crossroads. Can you truly own the brainchild of another person? If you buy a painting from an artist, are you legally bound to give that painting back when you don’t want it anymore, or can you sell it to your neighbor at your yard sale for $15?
The debate here is whether or not it is ethical to re-sell intellectual property that, according to this ruling, now technically “belongs” to the producer. This could have a potentially crippling affect on the used-game industry, particularly for stores like GameStop, whose inventory stock seems to be practically 50% used games. Currently, a game developer makes a percentage of the initial sale of the game, and a small commission whenever the game is rented. Technically, the developer does not make commission on used games sold by a third-party distributor, but that’s not to say that they don’t see any benefits from the used-game market.
Think about your copy of Halo 3, Mass Effect 2, Dragon Age, or Fallout 3. How much money did you spend on map packs, add-ons and story-continuations? While someone may not have paid the full $60 for a new copy of a game, they may be sending extra cash the developer’s way through online gaming marketplaces like the PlayStation Network, the Xbox LIVE Marketplace, or the Wii Shop Channel. Even developers of Massively-Multiplayer Online Role-Playing Games (MMORPGs) are able to forgo the $15-per-month standard in favor of being free-to-play, because they know players will be willing to buy items in-game if they aren’t charged a regular, monthly rate. Furthermore, not only can used games boost the sale of online add-ons (that sometimes come close to equaling the price of the game), but by being able to offer games at a lower cost, used games encourage gamers to try out new developers and genres that they normally wouldn’t pick up at full-price.
Someone who is usually only interested in first-person-shooters, for example, may walk into GameStop one day, and find a used copy of Mistwalker’s Lost Odyssey. Enticed by the cheaper price tag, they decide to branch-out and buy it. If it turns out that this person loves the game, or even mildly enjoys it, they are much more likely to pick up the developers preceding and subsequent releases at full price, which they never would have bought before.
Someone who has a positive experience with a game isn’t going to want to wait for the slightly-cheaper used copy of the sequel to hit the shelves; they’re going to buy it new. That one initial purchase, even though it may not immediately benefit the developer, will earn them money in the end. Aside from the impact that the court ruling may have on developers, this ruling may yet prove to be a double-edged sword.
Although the banning of used games from retailers may potentially cut-out an entire consumer market for those who may only be able to afford games at the lower, used rate, this may also potentially mean that developers will have more robust funding to create better, more intuitive games; but for whom are they developing? Only for gamers who are able to keep up with the $60-a-game status quo?
I see two potential outcomes of this ruling on the way in which games are transferred from developer to consumer. The most probable outcome is already emerging as the latest trend in media: the digital download. This shift is not only becoming well-established in the gaming industry via online marketplaces, but in the music (iTunes), literature (e-readers), and movie (instant-queue Netflix) industries as well.
The digital download knocks-out the potential for third-party re-sales by removing a physical product. With programs like iTunes, you do not physically own the media that you download; you just pay a price to unlock the ability to play it in your iPod or laptop. The downfall for the developer, though, is that with digital downloads, come hackers. There already exist countless game torrents, easily playable with a few console modifications and hacks like the Homebrew channel on the Nintendo Wii. With stricter regulation comes the black market; this is proven to be true time and time again.
In a second possible outcome, game companies may decide to take a different route that would allow them to retain their used-game market-base, and earn income off of their second-hand products at the same time. This scenario would either eliminate the third-party by having the game developer, themselves, buy and sell used copies of their games online, or by creating a law that retailers like GameStop must pay a commission on all used sales. Obviously this would not stop personal transactions like that which began this debate.
Whether or not the gaming industry will start cracking-down on elderly couples selling their grandson’s copy of DOOM II that he left at their house fourteen years ago, is yet to be seen. One thing’s for sure, though, and that’s that the intellectual property market, and the impending laws that come with it, are going to change and evolve as media does. Vernor and his defense are now seeking an 11-judge review of the recent decision, and will apply to the Supreme Court if necessary.
Third world America
Sep 14, 2010 by Luiza Ch. Savage
In February, the board of commissioners of Ohio’s Ashtabula County faced a scene familiar to local governments across America: a budget shortfall. They began to cut spending and reduced the sheriff’s budget by 20 per cent. A law enforcement agency staff that only a few years ago numbered 112, and had subsequently been pared down to 70, was cut again to 49 people and just one squad car for a county of 1,900 sq. km along the shore of Lake Erie. The sheriff’s department adapted. “We have no patrol units. There is no one on the streets. We respond to only crimes in progress. We don’t respond to property crimes,” deputy sheriff Ron Fenton told Maclean’s. The county once had a “very proactive” detective division in narcotics. Now, there is no detective division. “We are down to one evidence officer and he just runs the evidence room in case someone wants to claim property,” said Fenton. “People are getting property stolen, their houses broken into, and there is no one investigating. We are basically just writing up a report for the insurance company.”
If a county without police seems like a weird throwback to an earlier, frontier-like moment in American history, it is not the only one. “Back to the Stone Age” is the name of a seminar organized in March by civil engineers at Indiana’s Purdue University for local county supervisors interested in saving money by breaking up paved roads and turning them back to gravel. While only some paved roads in the state have been broken up, “There are a substantial number of conversations going on,” John Habermann, who manages a program at Purdue that helps local governments take care of infrastructure, told Maclean’s. “We presented a lot of talking points so that the county supervisors can talk logically back to elected officials when the question is posed,” he said. The state of Michigan had similar conversations. It has converted at least 50 miles of paved road to gravel in the last few years.
Welcome to the ground level of America’s economic crisis. The U.S. unemployment rate is 9.5 per cent. One in 10 homeowners are behind on their mortgage payments. Home sales are at record lows. While the economy has been growing for several quarters, the growth is anemic—only 1.6 per cent in the second quarter of this year—and producing few new jobs.
Even with interest rates at unprecedented lows, there is anxiety about the possibility of a double-dip recession. Sales of existing homes are at their lowest level in 15 years, and new home sales plummeted this summer to the lowest levels on record. Property and sales tax revenues have shrunk. And nowhere is this more apparent than at the local government level, where officials are being forced to roll back the everyday hallmarks of modern civilization.
Cincinnati, Ohio, is cutting back on trash collection and snow removal and filling fewer potholes.
The city of Dallas is not picking up litter in public parks. Flint, Mich., laid off 23 of 88 firefighters and closed two fire stations. In some places it’s almost literally the dark ages: the city of Shelton in Washington state decided to follow the example of numerous other localities and last week turned off 114 of its 860 street lights. Others have axed bus service and cut back on library hours. Class sizes are being increased and teachers are being laid off. School districts around the country are cutting the school day or the school week or the school year—effectively furloughing students. The National Association of Counties estimates that local governments will eliminate roughly half a million employees in the next fiscal year, with public safety, public works, public health, social services, and parks and recreation hardest hit by the cutbacks. A July survey by the association of counties, the National League of Cities, and the U.S. Conference of Mayors of 270 local governments found that 63 per cent of localities are cutting back on public safety and 60 per cent are cutting public works.
In August, the U.S. Congress passed a US$26-billion stimulus extension bill, aimed in part at saving teacher jobs. But it’s a finger in the dike. Jacqueline Byers, director of research for the counties association, said many local governments have yet to confront the full impact of the real estate crisis on government revenues because they do tax assessments only every third year. A fundamental transformation is under way. “When we come out of this recession we’re going to see government functioning very differently,” says Byers. “We are seeing more public-private partnership than we ever had for things like recreation and parks. We are seeing some of them privatize libraries. They lease the library to a private corporation that employs the workers who don’t carry retirement or health benefits.” Or they could wind up like Hood River County, Ore., which in August closed its three libraries altogether.
Some governments are looking for creative ways to replace plummeting property and sales tax revenues. Facing a US$1-billion budget shortfall, Montgomery County in Maryland appealed for corporate sponsors to step up and adopt porta-potties in its public parks. In the end, the privies were saved by a combination of park employees taking early retirement, a few private sponsorships, and a negotiated discount from the supplier, Don’s Johns. Meanwhile, Montgomery County’s school system, banking on its reputation for high standards and test scores, took the unusual step of selling its curriculum to a private textbook publisher, Pearson, for US$2.3 million and royalties of up to three per cent on sales. As part of the deal, county classrooms can be used as “showrooms”—which critics said effectively turns students and teachers into salesmen for a corporation. But the superintendent, Jerry Weast, told the Washington Post, “I tend to look at this from the perspective that we are broke.”
These cuts in infrastructure and education are more than just a temporary belt-tightening in response to a recession. They threaten long-term damage to American’s economic foundation—a foundation that has long been eroding. When the eight-lane Interstate 35 bridge collapsed in Minneapolis in 2009, killing 13 people and injuring 145, the American Society of Civil Engineers warned that the infrastructure deficit of aging postwar highways and bridges amounted to US$1.6 trillion. More than a quarter of America’s bridges were rated structurally deficient or functionally obsolete. Steam pipes have exploded in New York City and the levees failed in New Orleans.
Despite its position as the world’s unrivalled superpower, international comparisons show the U.S. slipping on a number of fronts. On education, the United States has been falling behind, in everything from science and engineering to basic literacy. The U.S. once had the world’s highest proportion of young adults with post-secondary degrees; now it ranks 12th, according to the College Board, an association of education institutions. (Canada is now number one.) In 2001, the U.S. ranked fourth in the world in per capita broadband Internet use; it now ranks 15th out of 30 nations, according to the Organisation for Economic Co-operation and Development. “We have been involved for three decades now in paring back public commitments and public spending, and that started with the Reagan revolution. We are living with the outcomes and consequences,” says Michael Bernstein, an economic historian at Tulane University in New Orleans.
Meanwhile, prolonged rates of high unemployment are taking a toll on families today, and will for years to come. Studies have shown that the longer a person is unemployed, the more difficult it is to find a job—partly because skills deteriorate, and partly because employers become suspicious of why someone hasn’t worked for a year. “The United States is expanding its underclass of a whole group of individuals who will become less employable, less integrated, more subject to criminal and other deviant behaviour—and probably become part of the larger problem of structural poverty in America as well,” says Sherle Shenninger, director of the economic growth program at the New America Foundation, a Washington think tank.
Arianna Huffington sees an even starker big picture emerging from the reams of bad economic news. “As we watch the middle class crumbling, for me this is a major indication that we are turning into a Third World country,” said Huffington, founder of the Huffington Post, in an interview. “The distinguishing characteristic of the Third World country is you have the people at the top and the rest—you don’t have a thriving middle class,” says Huffington, whose new book is entitled Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.
America is moving “from the Jetsons to the Flintstones,” she argues. “The American dream was already based on the idea you could work hard and do well and your children will do better. Now we are confronted with downward mobility across the board. You have the phenomenon of unprecedented numbers of college grads who can’t get jobs.” The current public sector cutbacks in education and infrastructure will only make things worse, Huffington says. “You are both hurting people in the present, and basically undercutting your economic growth and prosperity in the future.”
But the problem isn’t simply a product of the current recession or the 2008 financial crisis. It is now well understood that for years Americans lived beyond their means on borrowed money.
The real estate bubble enabled many homeowners to borrow against inflated house prices, giving families the feeling that their wealth was increasing. It was all a mirage. Low interest rates and easy credit allowed consumers to spend enthusiastically, masking the fact that the standard of living and incomes were stagnating, and public and private investment was lagging.
Over the past decade, private sector job growth was sluggish. Combined with recession job losses, there are now only as many private sector jobs as there were in early 1999, a decade ago, while the population continues to grow. And incomes stagnated for a full decade—the longest such period since the U.S. Census Bureau has been keeping track of household income.
“There is certainly a serious erosion of both the American social contract and the American dream for a great majority of Americans,” says Shenninger. “There is a worrying trend that the private sector has not been able to generate jobs for now more than a decade.”
While business productivity increased—workers created more output per hour of work—that did not follow the traditional model of translating into higher wages. “Eighty to 90 per cent of productivity gains went to corporate profitability—which means that in order to make up for the gap in demand, working families resorted to relying on rising housing prices and debt,” says Shenninger. Workers lost the ability to bargain for wage increases as they competed with lower-wage workers in Europe, Asia and other emerging markets. Meanwhile, corporate earnings exploded.
Clyde Prestowitz, a former Reagan administration trade official and president of the Economic Strategy Institute, says the scope of the problem came into focus for him one day last year when he read, in the same newspaper, that China was launching a new 240-mile-an-hour high-speed train, and then an article about city leaders in Pittsburgh considering a tax on university tuitions in order to fund the municipal employees’ retirement pension plan. “I thought, the Chinese are building world-record trains and we’re taxing kids who go to school!” says Prestowitz. “We’ve been in decline for quite some time—we haven’t recognized it and have been fooling ourselves. But we’ve gotten to the point it’s hard to not see.”
There are numerous theories about the path America took to get where it is. Prestowitz blames the American approach to trade and globalization. A former trade negotiator who worked on NAFTA and advised Ronald Reagan’s commerce secretary, he argues that at the root of the problem is a long-term American naïveté about global trade, a case he makes in his book The Betrayal of American Prosperity.
American jobs are being lost not only to low-wage competition from emerging economies, but to strategic policies by foreign governments to dominate critical sectors of the economy, or to keep their currency values low to promote exports. “Other countries recognize the importance of economies of scale and promote the development of certain industries, whether solar panels, or semiconductors, and we don’t,” says Prestowitz.
High-tech plants and research labs of companies such as Intel, Applied Materials, General Electric and BP have been moving to China because the Chinese are offering subsidies in the form of free energy, free infrastructure, reduced taxes and discounted utilities. Prestowitz made the argument earlier this year to a meeting of White House economists who were debating the administration’s funding for alternative energies such as battery technologies. “My position was, if you spend all this money and not do anything about currency manipulation by China, South Korea, Singapore, Taiwan, Malaysia, Thailand, if you don’t do anything about the investment incentives being offered to companies like Applied Materials, if you don’t deal with all those things and just give money to some battery company—forget it, that’s money down the rathole.”
Prestowitz accuses successive American administrations of sacrificing trade issues to geopolitics. “The highest priority for the U.S. government is national security. We need a base somewhere or a vote at the UN, and we make an economic concession,” he says. Exhibit A: “The Obama administration has bent over backwards to avoid calling China a currency manipulator,” he noted.
Huffington blames politicians’ domestic economic policies: first, Republicans for tax cuts and deregulation that favoured top earners and corporations, and now Democrats for failing to undo the damage. As a candidate, Barack Obama accused George W. Bush of ignoring the middle class, she notes. But now Huffington criticizes Obama for campaigning on prioritizing the middle class and then failing to do so in the White House. “What happened is he picked an economic team whose primary focus has been Wall Street and who dramatically underestimated the depth of the crisis,” she says. “The emphasis has been on fixing Wall Street, which was bailed out without any strings attached, and which turned around and cut lending instead of lend more.”
Shenninger points in part to foreign policy: waging expensive wars overseas rather than spending the money at home. “Our priorities are horribly distorted,” he says. “We spent billions on new energy plants in Iraq and most of the money got siphoned off. We are spending billions of dollars trying to build schools in Afghanistan. But we are not willing to borrow at historically low rates to keep teachers at work or improve public infrastructure at home.”
Whatever the causes, the way out is not clear. While some critics are calling for a major program of reinvestment in public infrastructure and reviving parts of the U.S. manufacturing base, the politics do not favour it. In a speech in Milwaukee on Monday, Obama asked Congress to pass a US$50-billion infrastructure spending program to refurbish roads, runways and railways. But concerns about government deficits among Republicans and some Democrats make it unlikely that any large spending package could pass Congress—especially after the gains the GOP is widely expected to make in the mid-term elections on Nov. 2.
Republicans are calling for aggressive spending cuts. When Democrats pushed through their spending bill for local governments, Republicans called it a “bailout” of profligate local governments that overindulged public sector unions with generous salaries and benefits. House Republican whip Eric Cantor called Obama’s latest call for infrastructure spending “another play called from the same failed Keynesian playbook,” adding, “We need to cut spending immediately and end the environment of uncertainty that continues to impede real private-sector job creation and growth.” The GOP members on the House budget committee have identified US$1.3 trillion in potential cuts to federal spending. House minority leader John Boehner calls federal spending “a job killing agenda.” “ We have to remember that, even when spending is not at record-setting levels, each dollar the government collects is taken directly out of the private sector,” Boehner said in a recent economic speech. He added: “I’m not afraid to tell you there’s no money left. In fact, we’re broke.”
But where does that leave people like the good citizens of Ashtabula County, Ohio? How can they be safe from criminals without a fully staffed local police force, TV station WKYC asked a local judge in April. “Arm yourselves,” came the reply from Ashtabula County Common Pleas Judge Alfred Mackey. “Be very careful, be vigilant, get in touch with your neighbors, because we’re going to have to look after each other.”
And so they did. In July, a group of farmers removed the safeties from their shotgun triggers and surrounded a trailer in which a suspected house robber was hiding while they waited for the county’s last, lone squad car to arrive.
In February, the board of commissioners of Ohio’s Ashtabula County faced a scene familiar to local governments across America: a budget shortfall. They began to cut spending and reduced the sheriff’s budget by 20 per cent. A law enforcement agency staff that only a few years ago numbered 112, and had subsequently been pared down to 70, was cut again to 49 people and just one squad car for a county of 1,900 sq. km along the shore of Lake Erie. The sheriff’s department adapted. “We have no patrol units. There is no one on the streets. We respond to only crimes in progress. We don’t respond to property crimes,” deputy sheriff Ron Fenton told Maclean’s. The county once had a “very proactive” detective division in narcotics. Now, there is no detective division. “We are down to one evidence officer and he just runs the evidence room in case someone wants to claim property,” said Fenton. “People are getting property stolen, their houses broken into, and there is no one investigating. We are basically just writing up a report for the insurance company.”
If a county without police seems like a weird throwback to an earlier, frontier-like moment in American history, it is not the only one. “Back to the Stone Age” is the name of a seminar organized in March by civil engineers at Indiana’s Purdue University for local county supervisors interested in saving money by breaking up paved roads and turning them back to gravel. While only some paved roads in the state have been broken up, “There are a substantial number of conversations going on,” John Habermann, who manages a program at Purdue that helps local governments take care of infrastructure, told Maclean’s. “We presented a lot of talking points so that the county supervisors can talk logically back to elected officials when the question is posed,” he said. The state of Michigan had similar conversations. It has converted at least 50 miles of paved road to gravel in the last few years.
Welcome to the ground level of America’s economic crisis. The U.S. unemployment rate is 9.5 per cent. One in 10 homeowners are behind on their mortgage payments. Home sales are at record lows. While the economy has been growing for several quarters, the growth is anemic—only 1.6 per cent in the second quarter of this year—and producing few new jobs.
Even with interest rates at unprecedented lows, there is anxiety about the possibility of a double-dip recession. Sales of existing homes are at their lowest level in 15 years, and new home sales plummeted this summer to the lowest levels on record. Property and sales tax revenues have shrunk. And nowhere is this more apparent than at the local government level, where officials are being forced to roll back the everyday hallmarks of modern civilization.
Cincinnati, Ohio, is cutting back on trash collection and snow removal and filling fewer potholes.
The city of Dallas is not picking up litter in public parks. Flint, Mich., laid off 23 of 88 firefighters and closed two fire stations. In some places it’s almost literally the dark ages: the city of Shelton in Washington state decided to follow the example of numerous other localities and last week turned off 114 of its 860 street lights. Others have axed bus service and cut back on library hours. Class sizes are being increased and teachers are being laid off. School districts around the country are cutting the school day or the school week or the school year—effectively furloughing students. The National Association of Counties estimates that local governments will eliminate roughly half a million employees in the next fiscal year, with public safety, public works, public health, social services, and parks and recreation hardest hit by the cutbacks. A July survey by the association of counties, the National League of Cities, and the U.S. Conference of Mayors of 270 local governments found that 63 per cent of localities are cutting back on public safety and 60 per cent are cutting public works.
In August, the U.S. Congress passed a US$26-billion stimulus extension bill, aimed in part at saving teacher jobs. But it’s a finger in the dike. Jacqueline Byers, director of research for the counties association, said many local governments have yet to confront the full impact of the real estate crisis on government revenues because they do tax assessments only every third year. A fundamental transformation is under way. “When we come out of this recession we’re going to see government functioning very differently,” says Byers. “We are seeing more public-private partnership than we ever had for things like recreation and parks. We are seeing some of them privatize libraries. They lease the library to a private corporation that employs the workers who don’t carry retirement or health benefits.” Or they could wind up like Hood River County, Ore., which in August closed its three libraries altogether.
Some governments are looking for creative ways to replace plummeting property and sales tax revenues. Facing a US$1-billion budget shortfall, Montgomery County in Maryland appealed for corporate sponsors to step up and adopt porta-potties in its public parks. In the end, the privies were saved by a combination of park employees taking early retirement, a few private sponsorships, and a negotiated discount from the supplier, Don’s Johns. Meanwhile, Montgomery County’s school system, banking on its reputation for high standards and test scores, took the unusual step of selling its curriculum to a private textbook publisher, Pearson, for US$2.3 million and royalties of up to three per cent on sales. As part of the deal, county classrooms can be used as “showrooms”—which critics said effectively turns students and teachers into salesmen for a corporation. But the superintendent, Jerry Weast, told the Washington Post, “I tend to look at this from the perspective that we are broke.”
These cuts in infrastructure and education are more than just a temporary belt-tightening in response to a recession. They threaten long-term damage to American’s economic foundation—a foundation that has long been eroding. When the eight-lane Interstate 35 bridge collapsed in Minneapolis in 2009, killing 13 people and injuring 145, the American Society of Civil Engineers warned that the infrastructure deficit of aging postwar highways and bridges amounted to US$1.6 trillion. More than a quarter of America’s bridges were rated structurally deficient or functionally obsolete. Steam pipes have exploded in New York City and the levees failed in New Orleans.
Despite its position as the world’s unrivalled superpower, international comparisons show the U.S. slipping on a number of fronts. On education, the United States has been falling behind, in everything from science and engineering to basic literacy. The U.S. once had the world’s highest proportion of young adults with post-secondary degrees; now it ranks 12th, according to the College Board, an association of education institutions. (Canada is now number one.) In 2001, the U.S. ranked fourth in the world in per capita broadband Internet use; it now ranks 15th out of 30 nations, according to the Organisation for Economic Co-operation and Development. “We have been involved for three decades now in paring back public commitments and public spending, and that started with the Reagan revolution. We are living with the outcomes and consequences,” says Michael Bernstein, an economic historian at Tulane University in New Orleans.
Meanwhile, prolonged rates of high unemployment are taking a toll on families today, and will for years to come. Studies have shown that the longer a person is unemployed, the more difficult it is to find a job—partly because skills deteriorate, and partly because employers become suspicious of why someone hasn’t worked for a year. “The United States is expanding its underclass of a whole group of individuals who will become less employable, less integrated, more subject to criminal and other deviant behaviour—and probably become part of the larger problem of structural poverty in America as well,” says Sherle Shenninger, director of the economic growth program at the New America Foundation, a Washington think tank.
Arianna Huffington sees an even starker big picture emerging from the reams of bad economic news. “As we watch the middle class crumbling, for me this is a major indication that we are turning into a Third World country,” said Huffington, founder of the Huffington Post, in an interview. “The distinguishing characteristic of the Third World country is you have the people at the top and the rest—you don’t have a thriving middle class,” says Huffington, whose new book is entitled Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.
America is moving “from the Jetsons to the Flintstones,” she argues. “The American dream was already based on the idea you could work hard and do well and your children will do better. Now we are confronted with downward mobility across the board. You have the phenomenon of unprecedented numbers of college grads who can’t get jobs.” The current public sector cutbacks in education and infrastructure will only make things worse, Huffington says. “You are both hurting people in the present, and basically undercutting your economic growth and prosperity in the future.”
But the problem isn’t simply a product of the current recession or the 2008 financial crisis. It is now well understood that for years Americans lived beyond their means on borrowed money.
The real estate bubble enabled many homeowners to borrow against inflated house prices, giving families the feeling that their wealth was increasing. It was all a mirage. Low interest rates and easy credit allowed consumers to spend enthusiastically, masking the fact that the standard of living and incomes were stagnating, and public and private investment was lagging.
Over the past decade, private sector job growth was sluggish. Combined with recession job losses, there are now only as many private sector jobs as there were in early 1999, a decade ago, while the population continues to grow. And incomes stagnated for a full decade—the longest such period since the U.S. Census Bureau has been keeping track of household income.
“There is certainly a serious erosion of both the American social contract and the American dream for a great majority of Americans,” says Shenninger. “There is a worrying trend that the private sector has not been able to generate jobs for now more than a decade.”
While business productivity increased—workers created more output per hour of work—that did not follow the traditional model of translating into higher wages. “Eighty to 90 per cent of productivity gains went to corporate profitability—which means that in order to make up for the gap in demand, working families resorted to relying on rising housing prices and debt,” says Shenninger. Workers lost the ability to bargain for wage increases as they competed with lower-wage workers in Europe, Asia and other emerging markets. Meanwhile, corporate earnings exploded.
Clyde Prestowitz, a former Reagan administration trade official and president of the Economic Strategy Institute, says the scope of the problem came into focus for him one day last year when he read, in the same newspaper, that China was launching a new 240-mile-an-hour high-speed train, and then an article about city leaders in Pittsburgh considering a tax on university tuitions in order to fund the municipal employees’ retirement pension plan. “I thought, the Chinese are building world-record trains and we’re taxing kids who go to school!” says Prestowitz. “We’ve been in decline for quite some time—we haven’t recognized it and have been fooling ourselves. But we’ve gotten to the point it’s hard to not see.”
There are numerous theories about the path America took to get where it is. Prestowitz blames the American approach to trade and globalization. A former trade negotiator who worked on NAFTA and advised Ronald Reagan’s commerce secretary, he argues that at the root of the problem is a long-term American naïveté about global trade, a case he makes in his book The Betrayal of American Prosperity.
American jobs are being lost not only to low-wage competition from emerging economies, but to strategic policies by foreign governments to dominate critical sectors of the economy, or to keep their currency values low to promote exports. “Other countries recognize the importance of economies of scale and promote the development of certain industries, whether solar panels, or semiconductors, and we don’t,” says Prestowitz.
High-tech plants and research labs of companies such as Intel, Applied Materials, General Electric and BP have been moving to China because the Chinese are offering subsidies in the form of free energy, free infrastructure, reduced taxes and discounted utilities. Prestowitz made the argument earlier this year to a meeting of White House economists who were debating the administration’s funding for alternative energies such as battery technologies. “My position was, if you spend all this money and not do anything about currency manipulation by China, South Korea, Singapore, Taiwan, Malaysia, Thailand, if you don’t do anything about the investment incentives being offered to companies like Applied Materials, if you don’t deal with all those things and just give money to some battery company—forget it, that’s money down the rathole.”
Prestowitz accuses successive American administrations of sacrificing trade issues to geopolitics. “The highest priority for the U.S. government is national security. We need a base somewhere or a vote at the UN, and we make an economic concession,” he says. Exhibit A: “The Obama administration has bent over backwards to avoid calling China a currency manipulator,” he noted.
Huffington blames politicians’ domestic economic policies: first, Republicans for tax cuts and deregulation that favoured top earners and corporations, and now Democrats for failing to undo the damage. As a candidate, Barack Obama accused George W. Bush of ignoring the middle class, she notes. But now Huffington criticizes Obama for campaigning on prioritizing the middle class and then failing to do so in the White House. “What happened is he picked an economic team whose primary focus has been Wall Street and who dramatically underestimated the depth of the crisis,” she says. “The emphasis has been on fixing Wall Street, which was bailed out without any strings attached, and which turned around and cut lending instead of lend more.”
Shenninger points in part to foreign policy: waging expensive wars overseas rather than spending the money at home. “Our priorities are horribly distorted,” he says. “We spent billions on new energy plants in Iraq and most of the money got siphoned off. We are spending billions of dollars trying to build schools in Afghanistan. But we are not willing to borrow at historically low rates to keep teachers at work or improve public infrastructure at home.”
Whatever the causes, the way out is not clear. While some critics are calling for a major program of reinvestment in public infrastructure and reviving parts of the U.S. manufacturing base, the politics do not favour it. In a speech in Milwaukee on Monday, Obama asked Congress to pass a US$50-billion infrastructure spending program to refurbish roads, runways and railways. But concerns about government deficits among Republicans and some Democrats make it unlikely that any large spending package could pass Congress—especially after the gains the GOP is widely expected to make in the mid-term elections on Nov. 2.
Republicans are calling for aggressive spending cuts. When Democrats pushed through their spending bill for local governments, Republicans called it a “bailout” of profligate local governments that overindulged public sector unions with generous salaries and benefits. House Republican whip Eric Cantor called Obama’s latest call for infrastructure spending “another play called from the same failed Keynesian playbook,” adding, “We need to cut spending immediately and end the environment of uncertainty that continues to impede real private-sector job creation and growth.” The GOP members on the House budget committee have identified US$1.3 trillion in potential cuts to federal spending. House minority leader John Boehner calls federal spending “a job killing agenda.” “ We have to remember that, even when spending is not at record-setting levels, each dollar the government collects is taken directly out of the private sector,” Boehner said in a recent economic speech. He added: “I’m not afraid to tell you there’s no money left. In fact, we’re broke.”
But where does that leave people like the good citizens of Ashtabula County, Ohio? How can they be safe from criminals without a fully staffed local police force, TV station WKYC asked a local judge in April. “Arm yourselves,” came the reply from Ashtabula County Common Pleas Judge Alfred Mackey. “Be very careful, be vigilant, get in touch with your neighbors, because we’re going to have to look after each other.”
And so they did. In July, a group of farmers removed the safeties from their shotgun triggers and surrounded a trailer in which a suspected house robber was hiding while they waited for the county’s last, lone squad car to arrive.
Pope arrives in Britain warning of 'atheist extremism'
By Ian Dunt - Thursday, 16, Sep 2010
Pope Benedict XV has arrived in Britain promoting an outspoken anti-secular message sure to further anger his opponents.
In a speech outside Holyrood House, the Pope warned against "aggressive forms of secularism" and "atheist extremism".
The comments had strong overtones of those which came from his advisor, Cardinal Walter Kasper, who stepped out of the trip yesterday after a German magazine quoted him saying the UK was in the grip of "a new and aggressive atheism".
Papal visit: All the quotes
The Pope's decision to deliver a highly political speech while stood next to the Queen will enhance the sense that he has come with a warning about the direction of British society.
Concluding a passage on the Nazis, he said: "As we reflect on the sobering lessons of the atheist extremism of the Twentieth Century, let us never forget how the exclusion of God, religion and virtue from public life leads ultimately to a truncated vision of man and of society and thus to a reductive vision of the person and his destiny."
He added: "Today, the United Kingdom strives to be a modern and multicultural society. In this challenging enterprise, may it always maintain its respect for those traditional values and cultural expressions that more aggressive forms of secularism no longer value or even tolerate.
Poll: Should the Pope be making political speeches?
"Let it not obscure the Christian foundation that underpins its freedoms; and may that patrimony, which has always served the nation well, constantly inform the example your government and people set before the two billion members of the Commonwealth and the great family of English-speaking nations throughout the world."
The comments instantly triggered an angry response from secular groups, who took particular exception to a mention of the Nazi's earlier in the speech.
"The notion that it was the atheism of Nazis that led to their extremist and hateful views or that somehow fuels intolerance in Britain today is a terrible libel against those who do not believe in God," said a spokesperson from the British Humanist Association (BHS).
Pope speech in full
"The notion that it is non-religious people in the UK today who want to force their views on others, coming from a man whose organisation exerts itself internationally to impose its narrow and exclusive form of morality and undermine the human rights of women, children, gay people and many others is surreal."
It is the first ever official state visit to the UK from the head of the Vatican, but the trip has been hounded by controversy and protest.
It is the first papal visit of any sort since 1982, when Pope John Paul II visited at the invitation of Catholics in the UK.
Pope Benedict XVI's arrival as a head of state rather than a religious leader has angered many protestors, who say the Vatican's status as a nation state is merely a useful and arbitrary fiction reflecting the disproportionate power of the church.
They are also enraged by the pope's alleged role covering up child abuse by Catholic priests and his views on a host of moral issues, including homosexuality and abortion.
The antipathy towards him was not made any easier by Cardinal Walter Kasper's comments to a German magazine branding the UK a "Third World country" because of its multiculturalism.
Pope adviser brands UK 'Third World country'
He has now pulled out the trip citing a medical condition, but it prompted the head of the Scottish Catholic Church to demand an apology.
Top Scottish Catholic demands apology for 'Third World' comment
The Pope landed in Edinburgh, where he met the Queen at Holyrood House. He shook hands with deputy prime minister Nick Clegg and Scottish first minister Alex Salmond.
"I am delighted to welcome you to the UK, and particularly to Scotland, on your first visit as Pope," the Queen said during a speech outside Holyrood House.
"Much has changes in the world during the nearly 30 years since Pope John Paul II's visit.
"The Holy See continues to have an important role in international issues," she continued.
"Your presence here today reminds us of our common Christian heritage.
"On behalf of the people of the UK I wish you a most fruitful and memorable visit."
Thousands of people gathered in Glasgow later for an open-air mass.
Some analysts believe the visit to the UK reflects Vatican concerns about the lack of church attendance in the country. Many figures within the Vatican view Britain as a secular stronghold and want a 'bridge-building' trip to increase the role of faith in the society.
Tory party chairman Sayeeda Warsi seemed happy to compliment that mission statement when she told Church of England bishops the coalition government does "do God".
Warsi: The coalition 'does God'
The phrase comes from Alastair Campbell, who famously told journalists the Labour government "doesn't do God", despite Tony Blair's faith.
Baroness Warsi wants a greater role for faith groups in public service provision, but many of her Liberal Democrat coalition partners are committed atheists.
That includes deputy prime minister Mr Clegg, who will spend ten minutes discussing climate change with the Pope later in the trip.
Mr Clegg will be on his best behaviour though. His Spanish wife, Miriam, is a Roman Catholic.
Pope Benedict XV has arrived in Britain promoting an outspoken anti-secular message sure to further anger his opponents.
In a speech outside Holyrood House, the Pope warned against "aggressive forms of secularism" and "atheist extremism".
The comments had strong overtones of those which came from his advisor, Cardinal Walter Kasper, who stepped out of the trip yesterday after a German magazine quoted him saying the UK was in the grip of "a new and aggressive atheism".
Papal visit: All the quotes
The Pope's decision to deliver a highly political speech while stood next to the Queen will enhance the sense that he has come with a warning about the direction of British society.
Concluding a passage on the Nazis, he said: "As we reflect on the sobering lessons of the atheist extremism of the Twentieth Century, let us never forget how the exclusion of God, religion and virtue from public life leads ultimately to a truncated vision of man and of society and thus to a reductive vision of the person and his destiny."
He added: "Today, the United Kingdom strives to be a modern and multicultural society. In this challenging enterprise, may it always maintain its respect for those traditional values and cultural expressions that more aggressive forms of secularism no longer value or even tolerate.
Poll: Should the Pope be making political speeches?
"Let it not obscure the Christian foundation that underpins its freedoms; and may that patrimony, which has always served the nation well, constantly inform the example your government and people set before the two billion members of the Commonwealth and the great family of English-speaking nations throughout the world."
The comments instantly triggered an angry response from secular groups, who took particular exception to a mention of the Nazi's earlier in the speech.
"The notion that it was the atheism of Nazis that led to their extremist and hateful views or that somehow fuels intolerance in Britain today is a terrible libel against those who do not believe in God," said a spokesperson from the British Humanist Association (BHS).
Pope speech in full
"The notion that it is non-religious people in the UK today who want to force their views on others, coming from a man whose organisation exerts itself internationally to impose its narrow and exclusive form of morality and undermine the human rights of women, children, gay people and many others is surreal."
It is the first ever official state visit to the UK from the head of the Vatican, but the trip has been hounded by controversy and protest.
It is the first papal visit of any sort since 1982, when Pope John Paul II visited at the invitation of Catholics in the UK.
Pope Benedict XVI's arrival as a head of state rather than a religious leader has angered many protestors, who say the Vatican's status as a nation state is merely a useful and arbitrary fiction reflecting the disproportionate power of the church.
They are also enraged by the pope's alleged role covering up child abuse by Catholic priests and his views on a host of moral issues, including homosexuality and abortion.
The antipathy towards him was not made any easier by Cardinal Walter Kasper's comments to a German magazine branding the UK a "Third World country" because of its multiculturalism.
Pope adviser brands UK 'Third World country'
He has now pulled out the trip citing a medical condition, but it prompted the head of the Scottish Catholic Church to demand an apology.
Top Scottish Catholic demands apology for 'Third World' comment
The Pope landed in Edinburgh, where he met the Queen at Holyrood House. He shook hands with deputy prime minister Nick Clegg and Scottish first minister Alex Salmond.
"I am delighted to welcome you to the UK, and particularly to Scotland, on your first visit as Pope," the Queen said during a speech outside Holyrood House.
"Much has changes in the world during the nearly 30 years since Pope John Paul II's visit.
"The Holy See continues to have an important role in international issues," she continued.
"Your presence here today reminds us of our common Christian heritage.
"On behalf of the people of the UK I wish you a most fruitful and memorable visit."
Thousands of people gathered in Glasgow later for an open-air mass.
Some analysts believe the visit to the UK reflects Vatican concerns about the lack of church attendance in the country. Many figures within the Vatican view Britain as a secular stronghold and want a 'bridge-building' trip to increase the role of faith in the society.
Tory party chairman Sayeeda Warsi seemed happy to compliment that mission statement when she told Church of England bishops the coalition government does "do God".
Warsi: The coalition 'does God'
The phrase comes from Alastair Campbell, who famously told journalists the Labour government "doesn't do God", despite Tony Blair's faith.
Baroness Warsi wants a greater role for faith groups in public service provision, but many of her Liberal Democrat coalition partners are committed atheists.
That includes deputy prime minister Mr Clegg, who will spend ten minutes discussing climate change with the Pope later in the trip.
Mr Clegg will be on his best behaviour though. His Spanish wife, Miriam, is a Roman Catholic.
Become Dangerous
By Paul Bonneau on September 16, 2010
You know who you are. You're a "philosophical libertarian" or "philosophical anarchist." You might think of yourself as a bit bookish or intellectual. You tend to express yourself through words rather than action.
You have a philosophical agreement, perhaps including some discomfort, with the right to bear arms. You either don't own a gun, or the only one you have is an old .22 rifle you inherited from your grandfather which you shot once 15 years ago; it is now sitting forlorn, rusting in the closet.
You are not a full-blown pacifist (all such may check out at this point). You have run certain scenarios through your head and they have all come out badly, when you are honest about it.
Your problem is that you are not dangerous. This article is intended to help you remedy that. I know, this sounds ambitious; but bear with me.
OK, why be dangerous? Isn't non-violence always better?
I am not arguing for violence on your part, but for the capacity for violence, when such is called for. There is some difference there. To bring up an example, think of the stereotypical peaceful kung-fu master from TV or the movies, walking around spreading good and kindness. He avoids or deflects any dispute he can, but finally there is no way to get out of the climactic fight, usually to protect a weaker or smaller person.
After all, what are you going to do if someone breaks into your house (remember those scenarios that turned out badly)? What is a man for, if not for defending his family? I would go so far as to say that is his primary function for his family.
Strange though it may seem, one does not give up being peaceful by becoming dangerous. In fact, the reverse is usually true.
Even Gandhi, the individual most cited by peaceful people, wrote, "Among the many misdeeds of British rule in India, history will look upon the Act depriving a whole nation of arms as the blackest." His genius of course, was taking these lemons the British handed him, and turning them into lemonade. Nonviolence worked so well there because Indians were basically rendered incapable of responding violently to British provocations (which might have short-circuited any gains made nonviolently).
Another reason to become dangerous: we may be thought by the ruling class to be their farm animals, but they will treat us better if we are dangerous, than if we are not. As Machiavelli put it, "Among other evils caused by being disarmed, it renders you contemptible." It's definitely not good to be thought contemptible. Being thought dangerous usually forestalls the worst outrages. Imagine some significant percentage of the population heavily armed. Now imagine the same population disarmed. Quite a difference.
But let's finish with the philosophical arguments and get on with it. I'm assuming you will at least entertain the notion of becoming dangerous, but have not a clue where to start. This former high-school science nerd will give you a hand, by cutting through the massive amounts of bullshit and controversy in the world of gun-nuttery, and giving you just what you need to get started. I hope so, anyway.
Oh, and we are talking guns, after all. "Be not afraid of any man, No matter what his size. When danger threatens, call on me And I will equalize." This 1880's-vintage Colt advertising slogan suggests a freedom technology, personal firearms, every bit as significant as Gutenberg's printing press or the Internet. It's time you got up to speed on it.
What are we "shooting" for? Basic competence in handgun and rifle. This is not very difficult. We are not talking anywhere near the commitment needed to get a black belt in karate. That is why this technology is so revolutionary--the smallest woman or the weakest old fart can no longer be intimidated by the largest, meanest thug. Firearms competitions are almost the only kind of sport where women can compete directly against men. That's saying something.
The Tools
On gun forums you will see interminable arguments about what works best, but I suggest you bypass this unless you find you enjoy being drawn into gun-nuttery, as has been known to happen. Instead, buy these three tools:
The purpose of the .22 is to get you familiar with shooting and gun handling of a semi-auto. Even a $60 Marlin will do. The .22 is also the most insanely useful cartridge on the planet, despite its ancient lineage. Also it's way cheap.
The AR-15 has become almost a commodity by now; just pick any reputable manufacturer. Most gun shops will not sell you schlock, if they want your repeat business (and they do). Stick with a lightweight 20 inch barrel and make it a "flat-top" (no carry handle). The point of a flattop is to put modern optics on the gun; iron sights are silly these days--it's time to move out of the 19th Century! You don't have to go overboard with the optics. Some people sneer at anything less than $150 for rings and $1,000 for the scope, but that is more gun nuttery (a $200, maybe $150 scope should do). You won't be throwing your rifle on the road and driving over it, will you? The scope should be in the 1x4 range (that is, a variable with a low of around 1 power and a high around 4 power). You need the low 1 power for city work, which covers 90% of the population, and for in-house defense. Always leave the scope set at 1x, and only dial it up for the odd long-range shot. A lighted scope reticle is nice if you ever need to shoot in the dark. For the gun, I don't like barrels shorter than 20 inches, despite the small disadvantage for in-house use, because shooting inside a house (e.g., self defense) even with a 20 inch barrel will damage your hearing, and the 16 inchers are pure evil for muzzle blast. But hey, it's your hearing (do use hearing and sight protection for all practice sessions, of course).
For the pistol, ignore the .40 and .45 caliber snobs. The 9mm (9x19 AKA "Parabellum" AKA "Luger," not "Makarov" or "Largo") is the world standard, and substantially cheaper to shoot. For self defense (unlike practice), stick with quality hollowpoints, and shoot enough of them to be sure they feed properly in your gun. Many recommend Glock, great if you plan on driving a truck over it. They have light, sucky triggers. Light is for experts in my opinion, sucky is for lawsuit avoidance. I use a CZ. Just go into the shop and find one that fits your hand well and has a heavier but smooth trigger (a Kahr, maybe?). Don't get too wrapped around this choice; if you don't like it, you can swap it for something else without too huge a loss. It's a tool, that's all.
Practice a reasonable amount with the pistol, using cheap "ball" ammo (and for Heaven's sake, learn the difference between "bullet" and "cartridge," otherwise you will be immediately marked as the tyro). The gun nuts insist on your taking multiple classes from nationally recognized trainers before you can be considered competent, completely missing the point of this technology, which is that you can avoid black-belt level expertise but still get the job done. Any criminal you encounter won't care about your training because he will be running away the instant you haul out a gun.
With the AR-15, you won't be hunting deer with this cartridge (the .223 Remington AKA 5.56 NATO--it's too small a cartridge) but just imagine you are. The kill zone in a deer is roughly a 12 inch circle, so make paper targets like that. Could you reliably kill a deer at 300 yards using field positions? Keep at it until you can; by then you will be ahead of half the military (or more). It is reasonable competence.
Don't have the cash for this? Out of a job? One can find old "police turn in" .38 Special Colt or Smith & Wesson revolvers, used to be $200 but like everything the price has gone up. Try hunting estate sales, as you might get lucky. For rifles, some call the SKS the "poor man's battle carbine," but if you are going to make compromises, I'd rather point you in the direction of a used, scoped bolt action deer rifle. The Wehrmacht did pretty well in WWII using a bolt gun without a scope, so they are not to be sneered at. For caliber, the .308 Winchester is preferred (as it is also a common military caliber); avoid at all costs any kind of Magnum caliber. Anyway, do what you can with what you have.
To be honest, a scoped .308 Win bolt gun might be substituted for the AR-15 even if you are not poor, although gun nuts would be scandalized to hear it (and the government won't think of you as so dangerous--silly them). It's just not an inside-the-house defense gun; far too much penetration (not nice for the neighbors) and not enough speed in reloading. But penetration can be an advantage if you are trying to shoot through cover. The .308 striking power is much greater than the .223, and it is a better long-range gun.
I hope this helps.
You know who you are. You're a "philosophical libertarian" or "philosophical anarchist." You might think of yourself as a bit bookish or intellectual. You tend to express yourself through words rather than action.
You have a philosophical agreement, perhaps including some discomfort, with the right to bear arms. You either don't own a gun, or the only one you have is an old .22 rifle you inherited from your grandfather which you shot once 15 years ago; it is now sitting forlorn, rusting in the closet.
You are not a full-blown pacifist (all such may check out at this point). You have run certain scenarios through your head and they have all come out badly, when you are honest about it.
Your problem is that you are not dangerous. This article is intended to help you remedy that. I know, this sounds ambitious; but bear with me.
OK, why be dangerous? Isn't non-violence always better?
I am not arguing for violence on your part, but for the capacity for violence, when such is called for. There is some difference there. To bring up an example, think of the stereotypical peaceful kung-fu master from TV or the movies, walking around spreading good and kindness. He avoids or deflects any dispute he can, but finally there is no way to get out of the climactic fight, usually to protect a weaker or smaller person.
After all, what are you going to do if someone breaks into your house (remember those scenarios that turned out badly)? What is a man for, if not for defending his family? I would go so far as to say that is his primary function for his family.
Strange though it may seem, one does not give up being peaceful by becoming dangerous. In fact, the reverse is usually true.
Even Gandhi, the individual most cited by peaceful people, wrote, "Among the many misdeeds of British rule in India, history will look upon the Act depriving a whole nation of arms as the blackest." His genius of course, was taking these lemons the British handed him, and turning them into lemonade. Nonviolence worked so well there because Indians were basically rendered incapable of responding violently to British provocations (which might have short-circuited any gains made nonviolently).
Another reason to become dangerous: we may be thought by the ruling class to be their farm animals, but they will treat us better if we are dangerous, than if we are not. As Machiavelli put it, "Among other evils caused by being disarmed, it renders you contemptible." It's definitely not good to be thought contemptible. Being thought dangerous usually forestalls the worst outrages. Imagine some significant percentage of the population heavily armed. Now imagine the same population disarmed. Quite a difference.
But let's finish with the philosophical arguments and get on with it. I'm assuming you will at least entertain the notion of becoming dangerous, but have not a clue where to start. This former high-school science nerd will give you a hand, by cutting through the massive amounts of bullshit and controversy in the world of gun-nuttery, and giving you just what you need to get started. I hope so, anyway.
Oh, and we are talking guns, after all. "Be not afraid of any man, No matter what his size. When danger threatens, call on me And I will equalize." This 1880's-vintage Colt advertising slogan suggests a freedom technology, personal firearms, every bit as significant as Gutenberg's printing press or the Internet. It's time you got up to speed on it.
What are we "shooting" for? Basic competence in handgun and rifle. This is not very difficult. We are not talking anywhere near the commitment needed to get a black belt in karate. That is why this technology is so revolutionary--the smallest woman or the weakest old fart can no longer be intimidated by the largest, meanest thug. Firearms competitions are almost the only kind of sport where women can compete directly against men. That's saying something.
The Tools
On gun forums you will see interminable arguments about what works best, but I suggest you bypass this unless you find you enjoy being drawn into gun-nuttery, as has been known to happen. Instead, buy these three tools:
1) Any semi-auto .22LR rifleBefore you go shopping however, burn into your memory, forwards and backwards, Cooper's Four Rules of safety. Go buy yourself Cooper's The Art of the Rifle.
2) Any quality 9mm handgun, your choice (no Ravens, etc.)
3) AR-15 rifle
The purpose of the .22 is to get you familiar with shooting and gun handling of a semi-auto. Even a $60 Marlin will do. The .22 is also the most insanely useful cartridge on the planet, despite its ancient lineage. Also it's way cheap.
The AR-15 has become almost a commodity by now; just pick any reputable manufacturer. Most gun shops will not sell you schlock, if they want your repeat business (and they do). Stick with a lightweight 20 inch barrel and make it a "flat-top" (no carry handle). The point of a flattop is to put modern optics on the gun; iron sights are silly these days--it's time to move out of the 19th Century! You don't have to go overboard with the optics. Some people sneer at anything less than $150 for rings and $1,000 for the scope, but that is more gun nuttery (a $200, maybe $150 scope should do). You won't be throwing your rifle on the road and driving over it, will you? The scope should be in the 1x4 range (that is, a variable with a low of around 1 power and a high around 4 power). You need the low 1 power for city work, which covers 90% of the population, and for in-house defense. Always leave the scope set at 1x, and only dial it up for the odd long-range shot. A lighted scope reticle is nice if you ever need to shoot in the dark. For the gun, I don't like barrels shorter than 20 inches, despite the small disadvantage for in-house use, because shooting inside a house (e.g., self defense) even with a 20 inch barrel will damage your hearing, and the 16 inchers are pure evil for muzzle blast. But hey, it's your hearing (do use hearing and sight protection for all practice sessions, of course).
For the pistol, ignore the .40 and .45 caliber snobs. The 9mm (9x19 AKA "Parabellum" AKA "Luger," not "Makarov" or "Largo") is the world standard, and substantially cheaper to shoot. For self defense (unlike practice), stick with quality hollowpoints, and shoot enough of them to be sure they feed properly in your gun. Many recommend Glock, great if you plan on driving a truck over it. They have light, sucky triggers. Light is for experts in my opinion, sucky is for lawsuit avoidance. I use a CZ. Just go into the shop and find one that fits your hand well and has a heavier but smooth trigger (a Kahr, maybe?). Don't get too wrapped around this choice; if you don't like it, you can swap it for something else without too huge a loss. It's a tool, that's all.
Practice a reasonable amount with the pistol, using cheap "ball" ammo (and for Heaven's sake, learn the difference between "bullet" and "cartridge," otherwise you will be immediately marked as the tyro). The gun nuts insist on your taking multiple classes from nationally recognized trainers before you can be considered competent, completely missing the point of this technology, which is that you can avoid black-belt level expertise but still get the job done. Any criminal you encounter won't care about your training because he will be running away the instant you haul out a gun.
With the AR-15, you won't be hunting deer with this cartridge (the .223 Remington AKA 5.56 NATO--it's too small a cartridge) but just imagine you are. The kill zone in a deer is roughly a 12 inch circle, so make paper targets like that. Could you reliably kill a deer at 300 yards using field positions? Keep at it until you can; by then you will be ahead of half the military (or more). It is reasonable competence.
Don't have the cash for this? Out of a job? One can find old "police turn in" .38 Special Colt or Smith & Wesson revolvers, used to be $200 but like everything the price has gone up. Try hunting estate sales, as you might get lucky. For rifles, some call the SKS the "poor man's battle carbine," but if you are going to make compromises, I'd rather point you in the direction of a used, scoped bolt action deer rifle. The Wehrmacht did pretty well in WWII using a bolt gun without a scope, so they are not to be sneered at. For caliber, the .308 Winchester is preferred (as it is also a common military caliber); avoid at all costs any kind of Magnum caliber. Anyway, do what you can with what you have.
To be honest, a scoped .308 Win bolt gun might be substituted for the AR-15 even if you are not poor, although gun nuts would be scandalized to hear it (and the government won't think of you as so dangerous--silly them). It's just not an inside-the-house defense gun; far too much penetration (not nice for the neighbors) and not enough speed in reloading. But penetration can be an advantage if you are trying to shoot through cover. The .308 striking power is much greater than the .223, and it is a better long-range gun.
I hope this helps.
"Personal weapons are what raised mankind out of the mud, and the rifle is the queen of personal weapons." ~ Jeff Cooper
Homeland Security works for the oil & gas companies
Published on 09-15-2010 - Source: Tech Eye
The US Department of Homeland Security has been spying on people who don't like gas drilling and handing on the data to the oil companies.
According to recently leaked documents, the Pennsylvania Office of Homeland Security has been using high-tech tracking of anti-gas drilling groups and their meetings.
It has then sent bulletins to gas companies drilling in the Marcellus Shale.
The local State Homeland Security Director James Powers said the Oil Companies needed to have all the data because there have been "five to 10" incidents of vandalism around the state related to the natural gas industry.
He said that the briefings are sent to local coppers and the owners and operators of "critical infrastructure."
However once the information has been sent to the oil companies they have been sharing the data and publishing it on pro-drilling internet site and disseminated among anti-drilling activists.
Powers admitted that was a cock-up and said he had emailed the woman who posted it.
In that email, which confusingly ended up in the paws of the anti-drilling groups, he was quoted as saying Homeland Security wanted to continue providing this support to the Marcellus Shale formation natural gas stakeholders, while not feeding those groups fomenting dissent against those same companies.
The status that Homeland Security is giving the anti-drilling movement is somewhat strange. The bulletin also includes information on anarchists, "black power radicals," Ramadan, the "Jewish High Holiday season" and anti-war activists.
He confirmed to the local press that "someone" was monitoring the web traffic of the anti-drilling groups.
The protesters point out that the only thing Homeland Security has not given the oil companies is a "An enemies-of-gas-drilling" compiled by the government so that police can keep an eye on them.
They are calling for the government to investigate why public money was being used to spy for private companies.
They are not going to get much support from their local governor. His spokesman has gone on record saying that it was part of Homeland Security's responsibility to "alert local law enforcement, local officials and potential victims" to any possible problems.
The US Department of Homeland Security has been spying on people who don't like gas drilling and handing on the data to the oil companies.
According to recently leaked documents, the Pennsylvania Office of Homeland Security has been using high-tech tracking of anti-gas drilling groups and their meetings.
It has then sent bulletins to gas companies drilling in the Marcellus Shale.
The local State Homeland Security Director James Powers said the Oil Companies needed to have all the data because there have been "five to 10" incidents of vandalism around the state related to the natural gas industry.
He said that the briefings are sent to local coppers and the owners and operators of "critical infrastructure."
However once the information has been sent to the oil companies they have been sharing the data and publishing it on pro-drilling internet site and disseminated among anti-drilling activists.
Powers admitted that was a cock-up and said he had emailed the woman who posted it.
In that email, which confusingly ended up in the paws of the anti-drilling groups, he was quoted as saying Homeland Security wanted to continue providing this support to the Marcellus Shale formation natural gas stakeholders, while not feeding those groups fomenting dissent against those same companies.
The status that Homeland Security is giving the anti-drilling movement is somewhat strange. The bulletin also includes information on anarchists, "black power radicals," Ramadan, the "Jewish High Holiday season" and anti-war activists.
He confirmed to the local press that "someone" was monitoring the web traffic of the anti-drilling groups.
The protesters point out that the only thing Homeland Security has not given the oil companies is a "An enemies-of-gas-drilling" compiled by the government so that police can keep an eye on them.
They are calling for the government to investigate why public money was being used to spy for private companies.
They are not going to get much support from their local governor. His spokesman has gone on record saying that it was part of Homeland Security's responsibility to "alert local law enforcement, local officials and potential victims" to any possible problems.
Fed Issues More Debt Than It Needs
Published on 09-16-2010
On Friday, September 10, 2010, Horizon Bank, Bradenton, FL was closed by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
As we pointed out in our last issue the administration will attempt to have $643 billion in stimulus passed by Congress between November 5th, and the end of the legislative session, this in the midst of 52.4% unemployment of people between 16 and 24 years old. No one needs to remind politicians and those who control them that this is the age group that fight wars and start revolutions. The corporations, which would receive tax breaks of $300 billion are making record profits and are sitting on over $1.5 trillion in cash. These are the same corporations that continue to fatten their bottom line by laying off workers. Far be it for us to call this a political payoff, especially with the elections only seven weeks away. This reminds us of five years ago when Congress allowed American transnational conglomerates, the same companies that have cost America eight million jobs over the past nine years, via offshoring and outsourcing, to bring home $350 billion from their hideaway in the Cayman Islands. The deal was that these corporations would bring home their loot at a tax rate of 5-1/4% instead of paying the regular 35%. For this they would create jobs. Needless to say, few jobs were created. These are the kind of sweetheart deals our politicians arrange for those who pay them off. Incidentally, the tax scam is still flourishing and the corporations now have $1.6 trillion sitting offshore waiting for another dispensation. Some things never change and what the administration proposes is just more of the same. A reward for those destroying our country. Wall Street, of course, looks at this quite differently, because they have an attention span and time horizon of 30 seconds, or the time needed to make the next trade or to create the next scandal. We were 28 years on Wall Street and we didn’t miss much. Incidentally, administrations pull this, let’s payback our masters, about every 2-1/2 years, thus, if you take the time to look you will find this is nothing new. Another question is where did the $868 billion in the first stimulus program go too? We have seen no accounting and sources in Washington tell us $275 billion still hasn’t been spent. Perhaps it has ended up in the hands of some labor union.
The real help is needed for creating jobs, not adding to profits of transnational conglomerates. Hasn’t anyone told the President real unemployment is 21-3/8% and the jobless between 16 and 24 years old is 52.4%? These are the youth that demonstrate and cause revolutions. Could we be setting up a repeat of 1789’s French Revolution? This is the lowest employment level for this group since statistics began to be compiled in 1948. In spite of stimulus one, hiring intentions are 50% lower than they were 1-1/2 years ago. In fact, large corporations intend to lay off even more workers. These are the same corporations that will receive, if passed, $300 billion in tax breaks, even though they have trillions in cash. In spite of the fact that Wall Street, banking, government, economists and analysts think all this is normal, it is not normal, this is a depression. Government is sustaining the depression along with the Fed. In spite of these efforts every economic statistic is lower today than it was almost three years ago. Everything is not fine and that is why the President has been told to inject $650 billion into the economy and that is why the Fed is again going to engage in quantitative easing of almost $2 trillion. The facts speak for themselves. Retail sales are 4% lower, housing starts 47% lower with an admitted 12-month inventory when in fact it is considerably higher, GDP has fallen 1% and employment has fallen 6% and is still falling. How far away can the riots be?
Some of the latest news is that a record number of loan resolutions in August softened the effect of $3.1 billion in new delinquencies. Recent defaults on five loans greater than $100 million contributed to a 23-basis point net increase taking the US CMBC delinquency rate to 8.48%. Those three giant loan failures are Innkeepers Portfolio $825.4 million, Hyatt Regency, Bethesda, Maryland for $140 million and Lynnewood Gardens for $129.5 million. More than 200 loans totaling $2.1 billion in delinquency in July did not appear in the August list. Three of those loans were for more for over $100 million.
Fitch’s ratings delinquency index includes 2,931 loans totaling $37 billion over 60 days overdue.
The administration has done a very poor job over 21 months. One in seven Americans are in poverty, that is 14.3%. Child poverty has risen from 19% to 20%, and in the 18-64 year group it has jumped from 11.7% to 12.4%. This takes us back to the War on Poverty and the late 1950s. The current anticipated poverty rate increase has moved from 13.2% to 15%. Forty-four million of Americans are on food stamps and 45 million live in poverty. Wall Street and banking get bailed out, but no jobs are created for the average American.
The formation of the European Union and the euro zone have taught us that putting together different countries as a group does not work. This lofty failure has been exacerbated by free trade and globalization, a benefit of WTO, the World Trade organization. With all the huffing and puffing about recovery, second quarter euro zone growth was 1% and that was the highest in four years. Taxes were recently raised and the zone is now imposing austerity due to excessive debt, the result of which can only be depression. They figure paying the bankers is far better than assisting the economy and the public. Sovereign debt ratings are being cut, and Europeans are rushing to buy gold, silver and Swiss francs. The 10-year Swiss franc note is yielding a puny 1%. We guess the real question is can Europe and England be worse than the US? We do not know, but what we do know is it’s all bad.
Then there is Greece, Europe’s poster child of failure. Mostly peaceful demonstrations abound as more and more workers are laid off. The IMF loan formula for $140 billion is deep austerity. As the people starve, PM George Papandreou, Bilderberg and Illuminist, wants taxes on corporations cut from 24% to 20%, so corporations will invest. The problem is if they get the tax cut there is no guarantee that they will use the money to increase plant and equipment, do research, or hire people. And, if the past is prologue then they will simply keep the difference for themselves. Unfortunately, that has been our experience. The budget deficit has to be cut from 13.6% of GDP to 8.1% over just seven months, which is economic and financial suicide, just to pay back European bankers and governments, which should have never made the loans initially. Cuts yes, but not in that time frame. They should be spread out over 3 to 4 years. Do not forget that this problem has existed for years. As the layoffs deepen tax revenues fall. Forty percent of judicial procedures presently in court concern tax disputes. Just like in Spain, $56 billion in environmentally friendly projects are underway, which will end in failure. Greece should just walk away from the bankers and default, dump their government and the IMF, leave the euro, reintroduce a cheap drachma, cut taxes and cut government spending 30% or over 3 or 4 years. Five years of depression is a lot better than 30 to 50 years under IMF dictates.
As we have seen already as stimulus programs abound and quantitative easing holds forth, this debt and monetary debasement is forcing the middle class and the populace as a whole into the arms of government dependence. This process is destroying the middle class worldwide. As consolidation takes place in order to form monopolies, middle sized and smaller companies are driven out of business and business formation comes to an end.
Personal taxes are rising, as are taxes on the sale of your home, and in the form of higher fees at all governmental levels. It doesn’t look like the Bush tax cuts will be canceled, but other taxes are being instituted every day. The new taxes passed within the Health Care Reform are some 19 in number and employers will pay 30% more in premiums, unless they opt out by paying a large penalty tax.
What has happened to America is that the private sector only is allowed to exist to keep banking in business and to supply funds for government, bureaucrats, other criminals and the elitists who actually run your country. Who wants to start or maintain a business under these conditions? Is it any wonder that there are few new jobs? Business at the middle and lower levels have no voice in Washington. Like in Germany in the 1930s, America is run by monopoly capitalists. A marriage of transnational conglomerates and government known as corporatist fascism. They are deliberately killing small business just as we have seen for 65 years in Europe. Next comes the jackbooted thugs from Homeland Security to keep order. Those with no place to live and without jobs will be relocated to interment camps and those who criticize the regime, like us, will be eliminated.
The current depression did not just happen – it was planned that way to bring the citizens of the US and Europe to their knees economically and financially to bring about world government and the enslavement of all the world’s people. You might call this the triumph of the parasites. Over the next few years, taxation will increase until it reaches levels now seen of 60 to 83 percent in Europe. That is how they intend to strangle us just as they have Europe, with very high income taxes and value added taxes. Our industrial sector will migrate just as it is doing in Europe to the second and third worlds to bring about the great socialist leveling. The VAT tax is all consuming and in the end deeply retards growth. Just look at Europe, it is not capable of recovery. Their citizens are simply taxed to death. It’s all about control and that is what world government is all about. Taxation saps incentive and that is how countries and economies fail. There will be no end to government regulations and interference.
This all leads to a small coterie of the rich, a shrinking middle class and those with jobs and those without jobs. This gap, our President tells us, will be closed with his new $650 billion stimulus plan. Whether the items pass remains to be seen. We do know the employer of last resorts has been the federal government. We do know federal employees make double state and private workers and privately employed workers are three times more likely to be terminated. Federal workers are a privileged class, which could eventually start social conflict. Conflict federal workers could not win. That gap between federal and private employees is widening. Ninety percent of government employees receive lifetime pension benefits, while only 18% of private employees receive them.
Then there is the endemic political corruption at the federal level, although corruption is certainly present at the State level. Unions and corporate interests are the moving parties that manifest the corruption. In many states retirement benefits alone are growing at 15% annually. Worse yet, it is almost impossible to fire a public service employer. What do you do when you are broke and you must by law pay benefits? These problems go on and on and can only lead to a breakdown in society. This is what socialism and fascism have brought to America and it is not pretty.
Last week saw the Dow rise 0.1%, S&P rose 0.4%, the Russell 2000 fell 1.1% and the Nasdaq 100 gained 1.2%. Banks fell 0.2%; broker/dealer fell 0.2%; cyclicals fell 0.8% and transports added 0.3%. High tech rose 0.4%; semis fell 3.8%; the Internet rose 0.4% and biotechs jumped 1.5%. Gold bullion was little changed, the gold index, the HUI fell 1.1% as silver fell 0.3% and the USDX rose 1% to 82.87.
Two-year T-bills rose 5 bps to 0.54%; the 10-year T-note rose 10 bps to 2.80% and the 10-year German bunds rose 5 bps to 2.40%.
Federal Reserve credit was little changed at $2.287 trillion. It is up $66.7 billion YTD, and 10.5% YOY. Fed foreign holdings of Treasury, Agency debt jumped another $9.9 billion. Custody holdings for foreign central banks increased $265 billion YTD, and 13.9% YOY.
M2, narrow money supply, jumped $30.7 billion to $8.690 trillion. It has increased $265 billion YTD, or 2.7% YOY, it is up 3.1%.
Total money market funds increased by $10.6 billion to $2.839 trillion.
Total commercial paper fell 5.5 billion to $1.059 trillion.
Last week we opined that someone is rigging the stock market to prevent an autumn debacle. It is possible that the rig is a political scheme to help avert a GOP tsunami in November. If this hypothesis is correct, look out after November 2.
The Fed continues to issue more debt than they need. The August deficit was $90.5 billion, versus $103.6 bullion YOY. The bottom line is debt issuance was more than double what was needed.
Recently corporate insiders bought only $5 million in securities, but sold $332 million worth of shares.
Americans’ self-reported average daily spending in stores, restaurants, gas stations, and online averaged $63 per day during August — down $5 from July, and down $2 compared with August 2009. http://www.gallup.com/poll/142913/Consumer-Spending-Across-Income-Groups-Down-August.aspx
For years we have noted that the US Treasury has regularly issued much more debt than the stated official US deficit in a given year. Our conclusion was and remains that the real US deficit is the amount of new debt issuance adjusted for cash on hand. And because cash on hand at the Treasury has been declining, the real deficit has been and continues to dwarf the stated budget deficit.
Last week we opined that Obama’s proposed Stimulus Lite (or Stimulus Parcels) with class warfare- inspired extended Bush tax cuts for the middle class was primarily a political scheme that would force Republicans to vote against a middle-class tax cut ahead of the November elections.
On Sunday, GOP House leader John Boehner (R-OH) made his “Sophie’s Choice” in favor of the middle-class, class warfare tax cuts. The WH immediately screamed ‘foul’ because its brain trust didn’t foresee
Boehner’s Choice and his qualification that he would vote for the class warfare tax cut because it was better than no tax cut.
http://www.politico.com/news/stories/0910/42037.html
On Friday, September 10, 2010, Horizon Bank, Bradenton, FL was closed by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
As we pointed out in our last issue the administration will attempt to have $643 billion in stimulus passed by Congress between November 5th, and the end of the legislative session, this in the midst of 52.4% unemployment of people between 16 and 24 years old. No one needs to remind politicians and those who control them that this is the age group that fight wars and start revolutions. The corporations, which would receive tax breaks of $300 billion are making record profits and are sitting on over $1.5 trillion in cash. These are the same corporations that continue to fatten their bottom line by laying off workers. Far be it for us to call this a political payoff, especially with the elections only seven weeks away. This reminds us of five years ago when Congress allowed American transnational conglomerates, the same companies that have cost America eight million jobs over the past nine years, via offshoring and outsourcing, to bring home $350 billion from their hideaway in the Cayman Islands. The deal was that these corporations would bring home their loot at a tax rate of 5-1/4% instead of paying the regular 35%. For this they would create jobs. Needless to say, few jobs were created. These are the kind of sweetheart deals our politicians arrange for those who pay them off. Incidentally, the tax scam is still flourishing and the corporations now have $1.6 trillion sitting offshore waiting for another dispensation. Some things never change and what the administration proposes is just more of the same. A reward for those destroying our country. Wall Street, of course, looks at this quite differently, because they have an attention span and time horizon of 30 seconds, or the time needed to make the next trade or to create the next scandal. We were 28 years on Wall Street and we didn’t miss much. Incidentally, administrations pull this, let’s payback our masters, about every 2-1/2 years, thus, if you take the time to look you will find this is nothing new. Another question is where did the $868 billion in the first stimulus program go too? We have seen no accounting and sources in Washington tell us $275 billion still hasn’t been spent. Perhaps it has ended up in the hands of some labor union.
The real help is needed for creating jobs, not adding to profits of transnational conglomerates. Hasn’t anyone told the President real unemployment is 21-3/8% and the jobless between 16 and 24 years old is 52.4%? These are the youth that demonstrate and cause revolutions. Could we be setting up a repeat of 1789’s French Revolution? This is the lowest employment level for this group since statistics began to be compiled in 1948. In spite of stimulus one, hiring intentions are 50% lower than they were 1-1/2 years ago. In fact, large corporations intend to lay off even more workers. These are the same corporations that will receive, if passed, $300 billion in tax breaks, even though they have trillions in cash. In spite of the fact that Wall Street, banking, government, economists and analysts think all this is normal, it is not normal, this is a depression. Government is sustaining the depression along with the Fed. In spite of these efforts every economic statistic is lower today than it was almost three years ago. Everything is not fine and that is why the President has been told to inject $650 billion into the economy and that is why the Fed is again going to engage in quantitative easing of almost $2 trillion. The facts speak for themselves. Retail sales are 4% lower, housing starts 47% lower with an admitted 12-month inventory when in fact it is considerably higher, GDP has fallen 1% and employment has fallen 6% and is still falling. How far away can the riots be?
Some of the latest news is that a record number of loan resolutions in August softened the effect of $3.1 billion in new delinquencies. Recent defaults on five loans greater than $100 million contributed to a 23-basis point net increase taking the US CMBC delinquency rate to 8.48%. Those three giant loan failures are Innkeepers Portfolio $825.4 million, Hyatt Regency, Bethesda, Maryland for $140 million and Lynnewood Gardens for $129.5 million. More than 200 loans totaling $2.1 billion in delinquency in July did not appear in the August list. Three of those loans were for more for over $100 million.
Fitch’s ratings delinquency index includes 2,931 loans totaling $37 billion over 60 days overdue.
The administration has done a very poor job over 21 months. One in seven Americans are in poverty, that is 14.3%. Child poverty has risen from 19% to 20%, and in the 18-64 year group it has jumped from 11.7% to 12.4%. This takes us back to the War on Poverty and the late 1950s. The current anticipated poverty rate increase has moved from 13.2% to 15%. Forty-four million of Americans are on food stamps and 45 million live in poverty. Wall Street and banking get bailed out, but no jobs are created for the average American.
The formation of the European Union and the euro zone have taught us that putting together different countries as a group does not work. This lofty failure has been exacerbated by free trade and globalization, a benefit of WTO, the World Trade organization. With all the huffing and puffing about recovery, second quarter euro zone growth was 1% and that was the highest in four years. Taxes were recently raised and the zone is now imposing austerity due to excessive debt, the result of which can only be depression. They figure paying the bankers is far better than assisting the economy and the public. Sovereign debt ratings are being cut, and Europeans are rushing to buy gold, silver and Swiss francs. The 10-year Swiss franc note is yielding a puny 1%. We guess the real question is can Europe and England be worse than the US? We do not know, but what we do know is it’s all bad.
Then there is Greece, Europe’s poster child of failure. Mostly peaceful demonstrations abound as more and more workers are laid off. The IMF loan formula for $140 billion is deep austerity. As the people starve, PM George Papandreou, Bilderberg and Illuminist, wants taxes on corporations cut from 24% to 20%, so corporations will invest. The problem is if they get the tax cut there is no guarantee that they will use the money to increase plant and equipment, do research, or hire people. And, if the past is prologue then they will simply keep the difference for themselves. Unfortunately, that has been our experience. The budget deficit has to be cut from 13.6% of GDP to 8.1% over just seven months, which is economic and financial suicide, just to pay back European bankers and governments, which should have never made the loans initially. Cuts yes, but not in that time frame. They should be spread out over 3 to 4 years. Do not forget that this problem has existed for years. As the layoffs deepen tax revenues fall. Forty percent of judicial procedures presently in court concern tax disputes. Just like in Spain, $56 billion in environmentally friendly projects are underway, which will end in failure. Greece should just walk away from the bankers and default, dump their government and the IMF, leave the euro, reintroduce a cheap drachma, cut taxes and cut government spending 30% or over 3 or 4 years. Five years of depression is a lot better than 30 to 50 years under IMF dictates.
As we have seen already as stimulus programs abound and quantitative easing holds forth, this debt and monetary debasement is forcing the middle class and the populace as a whole into the arms of government dependence. This process is destroying the middle class worldwide. As consolidation takes place in order to form monopolies, middle sized and smaller companies are driven out of business and business formation comes to an end.
Personal taxes are rising, as are taxes on the sale of your home, and in the form of higher fees at all governmental levels. It doesn’t look like the Bush tax cuts will be canceled, but other taxes are being instituted every day. The new taxes passed within the Health Care Reform are some 19 in number and employers will pay 30% more in premiums, unless they opt out by paying a large penalty tax.
What has happened to America is that the private sector only is allowed to exist to keep banking in business and to supply funds for government, bureaucrats, other criminals and the elitists who actually run your country. Who wants to start or maintain a business under these conditions? Is it any wonder that there are few new jobs? Business at the middle and lower levels have no voice in Washington. Like in Germany in the 1930s, America is run by monopoly capitalists. A marriage of transnational conglomerates and government known as corporatist fascism. They are deliberately killing small business just as we have seen for 65 years in Europe. Next comes the jackbooted thugs from Homeland Security to keep order. Those with no place to live and without jobs will be relocated to interment camps and those who criticize the regime, like us, will be eliminated.
The current depression did not just happen – it was planned that way to bring the citizens of the US and Europe to their knees economically and financially to bring about world government and the enslavement of all the world’s people. You might call this the triumph of the parasites. Over the next few years, taxation will increase until it reaches levels now seen of 60 to 83 percent in Europe. That is how they intend to strangle us just as they have Europe, with very high income taxes and value added taxes. Our industrial sector will migrate just as it is doing in Europe to the second and third worlds to bring about the great socialist leveling. The VAT tax is all consuming and in the end deeply retards growth. Just look at Europe, it is not capable of recovery. Their citizens are simply taxed to death. It’s all about control and that is what world government is all about. Taxation saps incentive and that is how countries and economies fail. There will be no end to government regulations and interference.
This all leads to a small coterie of the rich, a shrinking middle class and those with jobs and those without jobs. This gap, our President tells us, will be closed with his new $650 billion stimulus plan. Whether the items pass remains to be seen. We do know the employer of last resorts has been the federal government. We do know federal employees make double state and private workers and privately employed workers are three times more likely to be terminated. Federal workers are a privileged class, which could eventually start social conflict. Conflict federal workers could not win. That gap between federal and private employees is widening. Ninety percent of government employees receive lifetime pension benefits, while only 18% of private employees receive them.
Then there is the endemic political corruption at the federal level, although corruption is certainly present at the State level. Unions and corporate interests are the moving parties that manifest the corruption. In many states retirement benefits alone are growing at 15% annually. Worse yet, it is almost impossible to fire a public service employer. What do you do when you are broke and you must by law pay benefits? These problems go on and on and can only lead to a breakdown in society. This is what socialism and fascism have brought to America and it is not pretty.
Last week saw the Dow rise 0.1%, S&P rose 0.4%, the Russell 2000 fell 1.1% and the Nasdaq 100 gained 1.2%. Banks fell 0.2%; broker/dealer fell 0.2%; cyclicals fell 0.8% and transports added 0.3%. High tech rose 0.4%; semis fell 3.8%; the Internet rose 0.4% and biotechs jumped 1.5%. Gold bullion was little changed, the gold index, the HUI fell 1.1% as silver fell 0.3% and the USDX rose 1% to 82.87.
Two-year T-bills rose 5 bps to 0.54%; the 10-year T-note rose 10 bps to 2.80% and the 10-year German bunds rose 5 bps to 2.40%.
Federal Reserve credit was little changed at $2.287 trillion. It is up $66.7 billion YTD, and 10.5% YOY. Fed foreign holdings of Treasury, Agency debt jumped another $9.9 billion. Custody holdings for foreign central banks increased $265 billion YTD, and 13.9% YOY.
M2, narrow money supply, jumped $30.7 billion to $8.690 trillion. It has increased $265 billion YTD, or 2.7% YOY, it is up 3.1%.
Total money market funds increased by $10.6 billion to $2.839 trillion.
Total commercial paper fell 5.5 billion to $1.059 trillion.
Last week we opined that someone is rigging the stock market to prevent an autumn debacle. It is possible that the rig is a political scheme to help avert a GOP tsunami in November. If this hypothesis is correct, look out after November 2.
The Fed continues to issue more debt than they need. The August deficit was $90.5 billion, versus $103.6 bullion YOY. The bottom line is debt issuance was more than double what was needed.
Recently corporate insiders bought only $5 million in securities, but sold $332 million worth of shares.
Americans’ self-reported average daily spending in stores, restaurants, gas stations, and online averaged $63 per day during August — down $5 from July, and down $2 compared with August 2009. http://www.gallup.com/poll/142913/Consumer-Spending-Across-Income-Groups-Down-August.aspx
For years we have noted that the US Treasury has regularly issued much more debt than the stated official US deficit in a given year. Our conclusion was and remains that the real US deficit is the amount of new debt issuance adjusted for cash on hand. And because cash on hand at the Treasury has been declining, the real deficit has been and continues to dwarf the stated budget deficit.
Last week we opined that Obama’s proposed Stimulus Lite (or Stimulus Parcels) with class warfare- inspired extended Bush tax cuts for the middle class was primarily a political scheme that would force Republicans to vote against a middle-class tax cut ahead of the November elections.
On Sunday, GOP House leader John Boehner (R-OH) made his “Sophie’s Choice” in favor of the middle-class, class warfare tax cuts. The WH immediately screamed ‘foul’ because its brain trust didn’t foresee
Boehner’s Choice and his qualification that he would vote for the class warfare tax cut because it was better than no tax cut.
http://www.politico.com/news/stories/0910/42037.html
Reasons to Let the Bush Tax Cuts for the Rich Expire
by Chuck Collins - Thursday, September 16, 2010 by CommonDreams.org
Congress is actively debating whether to retain President Bush’s 2001 and 2003 tax cuts for the wealthy that are due to expire at the end of this year. President Obama supports extending tax cuts for households with incomes under $250,000, but ending the tax breaks for higher income households.
Here are five good reasons for Congress to let them go.
Congress is actively debating whether to retain President Bush’s 2001 and 2003 tax cuts for the wealthy that are due to expire at the end of this year. President Obama supports extending tax cuts for households with incomes under $250,000, but ending the tax breaks for higher income households.
Here are five good reasons for Congress to let them go.
1. Borrowing to Give the Rich Tax Breaks is a Really Bad Idea. We’ve already borrowed $700 billion since 2001 to pay for these tax cuts. Maintaining them for another decade would cost an estimated $700 billion, plus interest on the national debt estimated at $126 billion. Does it really make sense to send interest payments to China and millionaire bond-holders in the U.S. –so that we can cut taxes for U.S. millionaires and billionaires?A final reason is that the U.S. public supports letting these tax cuts for the rich expire. A recent Gallup Poll reveals that 57 percent of the population support letting the tax cuts for the rich expire –while 37 percent support extending them. Polls rarely reveal support for any form of taxation –which indicates that a majority of Americans –including those who will pay the hire taxes – recognize the imprudence of extending them. Alan Greenspan, who supported the tax cuts in 2001, has now reversed his position and believes the time has come to raise taxes.
2. There are 700 Billion Better Ways to Use the Money. Consider the superior ways to spend $700 billion. We could use a portion to reduce budget deficits. We could make long overdue investments in infrastructure such as bridges, roadways, railroads, water treatment facilities, retrofitting buildings –things that make our economy strong and competitive. We could direct funds to make the transition to the new economy that is less dependent on foreign oil. In the short-term, all these investments would create millions of jobs. In the long term, it would put the economy on better footing for the future. There are a billion better ways to use the money.
3. Restores Balance to Tax Code. Over the last half century, Congress has steadily reduced tax obligations for the very rich and global corporations. Between 1960 and 2004, the top 0.1 percent of U.S. taxpayers –the wealthiest one in one thousand –have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent. Restoring the tax rates to pre-2001 levels would be a very slight increase, yet begin the process of rebalancing the tax code.
4. It Won’t Hurt the Economy. You’ve heard the blather about how taxing the rich is going to hurt the economy. But cutting the taxes for the wealthy are an ineffective way to help the economy. A recent analysis by the Congressional Budget Service ranked 11 strategies to spur the economy and create jobs. Cutting taxes for the rich was the worst ranked strategy. Here’ the reality: Taxing the rich is different than taxing the middle class. The rich save more of their tax cuts while working people and middle class spend it in the economy. Over the last decade, the top wealth holders have shifted trillions of dollars into speculative investments that have hurt the economy.
5. Reduces the Dangerous Concentration of Wealth and Power. We’re living in a period of unprecedented economic inequality. A recent series in the online journal Slate examined the “Growing Divergence” of wealth and income.
Subscribe to:
Posts (Atom)