A Fraudulent JOBS Bill

Let Them Eat Money
by ROB URIE


One of the businesses of Wall Street in the 1980s was the “bucket shop;” firms with networks of stockbrokers who defrauded senior citizens with phony stories about the businesses and prospects of the companies whose stocks they were selling. The companies for the most part existed only on paper, but they were legally registered with the SEC (Securities and Exchange Commission) leaving gullible and / or desperate “investors” with the impression that they were legally sanctioned by the government and therefore legitimate. And in fact, this business model moved to the mainstream of Wall Street in the tech bubble of the late 1990s and was only temporarily shut down with threats of prison terms.

With this history behind it Barack Obama and both political parties in Congress recently passed the misleadingly named JOBS bill that legalizes and institutionalizes the bucket shop business model. Matt Taibbi does a good takedown of the bill in his Rolling Stone blog, but the question that even he fails to answer is why? Why would removing legal barriers to fraud make sense to anyone? Or more precisely, to whom would doing so make sense?

The purported purpose of the bill is to make it easier for startup companies to raise capital in capital markets. Fair enough, but then why legalize fraud? The bill explicitly legalizes the telling of stories about a company’s prospects divergent from the truth in order to sell stock. In the 1980s a few of the more egregious and / or less politically connected bucket shops were shut down and their executives sent to prison for doing exactly this. So again, to whom would it be deemed legitimate to tell lies to people to part them from their money?

Readers who don’t work on Wall Street or who aren’t Barack Obama can be forgiven if no answer readily leaps to mind. So please consider the following question—what has been the source of the astounding wealth that has been concentrated in so few hands over the last forty years? There were never enough gullible seniors in all of history to pay Wall Street’s way, so there must be other ways that the money was made? By way of economic parables, I provide three different explanations below and then tie them together:

• In the movie “Tommy Boy” the predatory car parts executive played by Dan Aykroyd explains to the accidental savior of a car parts factory, played by Chris Farley, that what he wants in buying the factory and firing its workforce is “the box,” the company name, so that he can sell his lower quality car parts for the premium price that the factory’s high quality products commanded. Although the movie is fiction, the strategy of making struggling companies profitable by scamming consumers into paying more for low quality products by attaching premium names to them was part and parcel of the 1980s leveraged buyouts that purported to revive American industry while making bankers and company executives fabulously rich.

As this scam can’t run-on forever without people catching on, the next step was:

• Apple Computer has recently become one of the most “profitable” companies in the world by outsourcing its manufacturing to low wage manufacturers in China (primarily Foxconn). The word profitable is in scare quotes because there is no theory of capitalism that supports the claim that systematically paying labor less than its product (what labor produces less a market rate of profit) produces profits. What is produced are returns to economic power called economic rents, a form of extortion so odious to the theorists of capitalism that “capitalism” was invented to end their existence. While to most contemporary Americans the difference between profits and economic rents may seem a matter of mere semantics, so then is the difference between legal and criminal behavior when criminals write the laws.

• Third, one of the main reasons why banks in the West have historically been heavily regulated is that they have been given the right to create money. (If you don’t know this then (1) you qualify to be a professor of economics at an Ivy League university and (2) the MMT (Modern Money Theory) crowd has expositions explaining banks and money all over the web). In exchange for this right to create money banks were regulated like utilities with strict rules regarding under what conditions, and to whom, loans could be made. And they were forbidden from engaging in financial speculation that might put depositors’ funds at risk. When banking regulations were effectively eliminated in the late 1990s and early 2000s bankers quickly set about writing themselves massive paychecks with the money they had been granted the right to create.

These three corporate strategies, knowingly defrauding consumers (example: The Insurance Hoax By David Dietz and Darrell Preston Bloomberg Markets September 2007), using economic / political power to systematically underpay labor here and abroad and using a deregulated financial system premised on heavy regulation to facilitate unlimited withdrawals of social wealth by connected insiders define the methods of expropriation used by American business over the last forty years. But none of these tactics individually would account for the amount of money expropriated by plutocrats.

The linchpin in this system of expropriation is “financialization,” the modes of monetizing social wealth so that it can be effectively expropriated. Banks create money directly by making loans. Investment banks create financial instruments, such as stocks and bonds, which become monetized social wealth when they are exchanged for money. A company can be looted by granting stock options to executives that represent a substantial ownership interest in the firm. Creating the stock options requires an investment bank and creating the money to buy them (monetize them) from executives requires a commercial bank to make a loan to buy the stock, say, to the same company. (This explanation is simplistic but it captures the basic truths of what is being described).

The motivation for defrauding consumers and systematically underpaying labor that this system creates is that both increase the profits on which the value of stock granted to connected insiders is based. Should this seem legitimate, imprisoning the overpaid executives and hiring competent management at wages commensurate with what other labor earns would have this same effect and would be much more broadly socially beneficial. But this system is set up to push social wealth into ever fewer hands. And it has been used to buy our political system, to destroy labor and other organized resistance and to create a police / surveillance state that is designed to maintain this system of expropriation. Now add to this one more tool for expropriation: Barack Obama’s JOBS bill.

It is no accident that the phenomenal accumulation of expropriated wealth that has taken place in recent decades has coincided with the declining wealth and prospects of the middle and lower classes. Government policies since the early 1970s have been designed to destroy organized labor so that predator-capitalists can again underpay labor. Consumer protections have been systematically dismantled so that bait and switch tactics and outright theft by corporations face no recourse. And any legitimate “deregulation” of finance would have rescinded the right of unregulated banks to create money and any guarantees of rescue should banks fail.

The facts are that the new plutocrats are rich because they took what belonged to working people, the middle and lower classes, including wealth, incomes, social organization and our ability to act for the common good through economic, political and social cooperation and put it into their own pockets. Plutocrats argue that consumer and environmental regulations are burdensome, but burdensome to whom? If they profit from the systematic taking from consumers and the ability to destroy the environment that we depend on, then straightforwardly they profit from our loss. Fabulously well-paid bankers required a multi-trillion dollar bailout—more money than these banks earned in the entirety of their existences, less than a decade after they were given free rein to act in their own interest. And again, “freedom” to systematically underpay labor is thievery under any theory of capitalism.

So finally, why do Barack Obama and a bipartisan Congress believe that legalizing fraud is legitimate? The immediate answer is because that is all that they know. They exist in a self-legitimizing universe where if you have something it is because you earned it. The broader answer is that an economic system based on exploitation (capitalism) isn’t set up to differentiate between socially productive behavior and radically socially destructive behavior.

And notice please, Washington isn’t working to eliminate all laws, just the ones that impede the progress of social wealth from those who create it up to the plutocracy. With respect to protecting the wealth and privilege of the plutocrats, Washington (and Brussels and London) is all about laws. With strip searches and indefinite detention priority one for Washington, we are a nation of laws by the rich for the rest of us. But remember where the wealth came from. To turn a phrase, let them eat money. Strike!

World’s Apex Bully Leads World Into Lawlessness

Globalism's Perverse Rewards
by PAUL CRAIG ROBERTS


The US government pretends to live under the rule of law, to respect human rights, and to provide freedom and democracy to citizens. Washington’s pretense and the stark reality are diametrically opposed.

US government officials routinely criticize other governments for being undemocratic and for violating human rights. Yet, no other country except Israel sends bombs, missiles, and drones into sovereign countries to murder civilian populations. The torture prisons of Abu Gahraib, Guantanamo, and CIA secret rendition sites are the contributions of the Bush/Obama regimes to human rights.

Washington violates the human rights of its own citizens. Washington has suspended the civil liberties guaranteed in the US Constitution and declared its intention to detain US citizens indefinitely without due process of law. President Obama has announced that he, at his discretion, can murder US citizens whom he regards as a threat to the US.

Congress did not respond to these extraordinary announcements with impeachment proceedings. There was no uproar from the federal courts, law schools, or bar associations. Glenn Greenwald reports that the Department of Homeland Security harasses journalists who refuse to be presstitutes, and we have seen videos of the brutal police oppression of peaceful OWS protestors. Chris Floyd has described on CounterPunch the torture-perverts who rule the US.

Now Washington is forcing as much of the world as it can to overthrow international treaties and international law. Washington has issued a ukase that its word alone is international law. Any country, except those who receive Washington’s dispensation, that engages in trade with Iran or purchases Iran’s oil will be sanctioned by the US. These countries will be cut off from US markets, and their banking systems will not be able to use banks that process international payments. In other words, Washington’s “sanctions against Iran” apply not to Iran but to countries that defy Washington and meet their energy needs with Iranian oil.

According to the Christian Science Monitor, so far Washington has granted special privileges to Japan and 10 European Union countries to continue purchasing Iranian oil. Requiring countries to shut down their economies in order to comply with Washington’s vendetta against Iran, a vendetta that has been ongoing ever since the Iranians overthrew the Washington-installed puppet, the Shah of Iran, more than three decades ago, was more than Washington could get away with. Washington has permitted Japan to keep importing between 78-85 per cent of its normal oil imports from Iran.

Washington’s dispensations, however, are arbitrary. Dispensations have not been granted to China, India, Turkey, and South Korea. India and China are the largest importers of Iranian oil, and Turkey and South Korea are among the top ten importers. Before looking at possible unintended consequences of Washington’s vendetta against Iran, what is Washington’s case against Iran?

Frankly, Washington has no case. It is the hoax of “weapons of mass destruction” all over again. Iran, unlike Israel, signed the non-proliferation treaty. All countries that sign the treaty have the right to nuclear energy. Washington claims that Iran is violating the treaty by developing a nuclear weapon. There is no evidence whatsoever for Washington’s assertion. Washington’s own 16 intelligence agencies are unanimous that Iran has had no nuclear weapons program since 2003. Moreover, the International Atomic Energy Agency’s weapons inspectors are in Iran and have reported consistently that there is no diversion of nuclear material from the energy program to a weapons program.

On the rare occasion when Washington is reminded of the facts, Washington makes a different case. Washington asserts that Iran’s rights under the non-proliferation treaty notwithstanding, Iran cannot have a nuclear energy program, because Iran would then have learned enough to be able at some future time to make a bomb. The world’s apex bully has unilaterally decided that the possibility that Iran might one day decide to make a nuke is too great a risk to take. It is better, Washington says, to drive up the oil price, disrupt the world economy, violate international law, and risk a major war than to have to worry that a future Iranian government will make a nuclear weapon. This is the Jeremy Bentham tyrannical approach to law that was repudiated by the Anglo-American legal system.

It is difficult to characterize Washington’s position as one of good judgment. Moreover, Washington has never explained the huge risk Washington sees in the possibility of an Iranian nuke. Why is this risk so much greater than the risk associated with Soviet nukes or with the nukes of the US, Russia, China, Israel, Pakistan, India, and North Korea today? Iran is a relatively small country. It does not have Washington’s world ambitions. Unlike Washington, Iran is not at war with a half dozen countries. Why is Washington destroying America’s reputation as a country that respects law and risking a major war and economic dislocation over some possible future development, the probability of which is unknown?

There is no good answer to this question. Lacking evidence for a case against Iran, Washington and Israel have substituted demonization. The lie has been established as truth that the current president of Iran intends to wipe Israel off the face of the earth.

This lie has succeeded as propaganda even though numerous language experts have proven that the intention attributed to the Iranian president by American-Israeli propaganda is a gross mistranslation of what the president of Iran said. Once again, for Washington and its presstitutes, facts do not count. The agenda is all that counts, and any lie will be used to advance the agenda.

Washington’s sanctions could end up biting Washington harder than they bite Iran. What will Washington do if India, China, Turkey and South Korea do not succumb to Washington’s threats?

According to recent news reports, India and China are not inclined to inconvenience themselves and to harm their economic development in order to support Washington’s vendetta against Iran. Having watched China’s rapid rise and having observed North Korea’s immunity to American attack, South Korea might be wondering how much longer it intends to remain Washington’s puppet state. Turkey, where the civilian and somewhat Islamist government has managed to become independent of the US- controlled Turkish military, appears to be slowly coming to the realization that Washington and NATO have Turkey in a “service role” in which Turkey is Washington’s agent against its own kind.

The Turkish government appears to be reassessing the benefits of being Washington’s pawn.

What Turkey and South Korea face is basically a decision whether they will be independent countries or be subsumed within Washington’s empire. The success of the American-Israeli assault on Iran’s independence depends on India and China.

If India and China give the bird to Washington, what can Washington do? Absolutely nothing. What if Washington, drowning in its gigantic hubris, announced sanctions against India and China?

Wal-Mart’s shelves would be empty, and America’s largest retailer would be hammering on the White House door.

Apple Computer and innumerable powerful US corporations, which have offshored their production for the American market to China, would see their profits evaporate. Together with their Wall Street allies, these powerful corporations would assault America with more force than the Red Army. The Chinese trade surplus would cease to flow into US Treasury debt. The offshored-to-India back office operations of banks, credit card companies, and customer service departments of utilities throughout the US would cease to function.
In America, chaos would reign. Such are the rewards to the Empire of globalism.

Obama and the neoconservative and Israeli warmongers who urge him on to more wars do not understand that the US is no longer an independent country. America is owned by offshoring corporations and the foreign countries in which the corporations have located their production for US markets. Sanctions on China and India (and South Korea) mean sanctions on US corporations. Sanctions on Turkey mean sanctions on a NATO ally.

Do China, India, South Korea and Turkey realize that they hold the winning cards? Do they understand that they can give the bird to the American Empire and bring it down in collapse, or are they brainwashed like Europe and the rest of the world that the powerful Americans cannot be resisted?

Will China and India exercise their power over the US, or will the two countries fudge the issue and adopt a pose that saves face for Washington while they continue to purchase Iranian oil?

The answer to this question is: how much will Washington pay China and India in secret concessions, such as eviction of the US from the South China Sea, for their pretense that China and India acknowledge Washington’s dictatorial powers over the rest of the world?

Without concession to China and India, Washington is likely to be ignored while it watches its power evaporate. A country that cannot produce industrial and manufactured goods, but can only print debt instruments and money is not a powerful country. It is a washed-up two-bit punk that can continue to strut around until the proverbial boy says: “the Emperor has no clothes”.

The Comic Book Gets Behind the Truth

and exposes it fully with few the wiser for its intent...

This Modern World

Romney: Santorum ‘on my list’ for VP

By David Edwards - RAW Story 
Thursday, April 12, 2012


It seems like probable Republican nominee Mitt Romney has already forgotten that former rival Rick Santorum recently called him a liar and the “worst Republican in the country.”

During a town hall-style event in Warwick, Rhode Island on Wednesday, Romney insisted that he had not ruled out the former Pennsylvania senator as a vice presidential nominee.

“Everybody is on my list,” the candidate told a man who asked if Santorum would be considered as a vice presidential candidate. “I’m not taking anybody off the list.”

Romney clarified: “I actually don’t have a list yet. So, I can’t say that someone is on or off my list, but I can tell you that the people that I had the privilege of running against would surely be among those I’d consider. The criteria has to be first and foremost is this a person who could be president of the United States if that were needed? And do people recognize that and see that as the kind of person who has that qualification.”

“And so he — I’ve said this before: If any of the people I ran against happened to become the nominee, I would have endorsed them and supported them for president. So, of course they’d be on that list, and he among others.”

Over the course of a bitter primary, Santorum had suggested that Romney was “lying” about his health care record, called him the “ultimate flip-flopper,” said that the country “might as well stay with” President Barack Obama, insisted that the Massachusetts Republican was a “weak candidate” and charged that he was the “worst Republican in the country.”

On Wednesday, Romney predicted that Santorum would eventually join him on the campaign trail.

“You’ll see us all come together in a powerful way, but the time for that will happen down the road as we spend more time together and hit the trail together,” Romney told Fox News. “You will see our part more united than it’s been in a long, long time in part because President Obama has taken America in such a different course than we have ever gone as a nation before.”

Watch to the video below from CNN, broadcast on April 11, 2012.

How the richest of the rich stay on top.

Wealth Defense Industry: The Real Reason America's Oligarchs Can Squeeze the Rest of Us

By Jeffrey A. Winters, In These Times
Posted on April 9, 2012

In 2005, Citigroup offered its high net-worth clients in the United States a concise statement of the threats they and their money faced.

The report told them they were the leaders of a “plutonomy,” an economy driven by the spending of its ultra-rich citizens. “At the heart of plutonomy is income inequality,” which is made possible by “capitalist-friendly governments and tax regimes.”

The danger, according to Citigroup’s analysts, is that “personal taxation rates could rise – dividends, capital gains, and inheritance taxes would hurt the plutonomy.”

But the ultra-rich already knew that. In fact, even as America’s income distribution has skewed to favor the upper classes, the very richest have successfully managed to reduce their overall tax burden. Look no further than Republican presidential contender Mitt Romney, who in 2010 paid 13.9 percent of his $21.6 million income in taxes that year, the same tax rate as an individual who earned a mere $8,500 to $34,500.

How is that possible? How can a country make so much progress toward equality on other fronts – race, gender, sexual orientation and disability – but run the opposite way in its policy on taxing the rich?

In 2004, the American Political Science Association (APSA) tried to answer that very question. The explanation they came up with viewed the problem as a classic case of democratic participation: While the poor have overwhelming numbers, the wealthy have higher rates of political participation, more advanced skills and greater access to resources and information. In short, APSA said, the wealthy use their social capital to offset their minority status at the ballot box.

But this explanation has one major flaw. Regardless of the Occupy movement’s rhetoric, most of the growth in the wealth gap has actually gone to a tiny sliver of the 1% – one-tenth of it, or even one-one-hundredth.

Even more shockingly, that 1 percent of the 1% has shifted its tax burden not to the middle class or poor, but to rich households in the 85th to 99th percentile range. In 2007, the effective income tax rate for the richest 400 Americans was below 17 percent, while the “mass affluent” 1% paid nearly 24 percent.

Disparities in Social Security taxes were even greater, with the merely rich paying 12.4 percent of their income, while the super-rich paid only one-one-thousandth of a percent.

It’s one thing for the poor to lose the democratic participation game, but APSA has no explanation for why the majority of the upper class – which has no shortage of government-influencing social capital – should fall so far behind the very top earners. (Of course, relative to middle- and lower-class earners, they’ve done just fine.)

For a better explanation, we need to look more closely at the relationship between wealth and political power. I propose an updated theory of “oligarchy,” the same lens developed by Plato and Aristotle when they studied the same problem in their own times.

A quick review
First, let’s review what we think we know about power in America.

We begin with a theory of “democratic pluralism,” which posits that democracy is basically a tug-of-war with different interest groups trying to pull government policy toward an outcome. In this framework, the rich are just one group among many competing “special interests.”

Of course, it’s hard not to notice that some groups can tug better than others. So in the 1950s, social scientists, like C. Wright Mills, author of The Power Elite, developed another theory of “elites” – those who wield more pull thanks to factors like education, social networks and ethnicity. In this view, wealth is just one of many factors that might help someone become the leader of a major business or gain a government position, thereby joining the elite.

But neither theory explains how the super-rich are turning public policy to their benefit even at the expense of the moderately rich. The mass affluent vastly outnumber the super-rich, and the super-rich aren’t necessarily better-educated, more skilled or more able to participate in politics; nor do the super-rich dominate the top posts of American government – our representatives tend to be among the slightly lower rungs of the upper class who are losing the tax battle.

Also, neither theory takes into account the unique power that comes with enormous wealth – the kind found in that one-tenth of the 1%. Whether or not the super-rich hold any official position in business or government, they remain powerful.

Only when we separate wealth from all other kinds of power can we begin to understand why our tax system looks the way it does – and, by extension, how the top one-tenth of 1% of the income distribution has distorted American democracy.

Enormous wealth is the heart of oligarchy.

So what’s an oligarchy?
Across all political spectrums, oligarchs are people (never corporations or other organizations) who command massive concentrations of material resources (that is, wealth) that can be deployed to defend or enhance their own property and interests, even if they don’t own those resources personally. Without this massive concentration of wealth, there are no oligarchs.

In any society, of course, an extremely unequal wealth distribution provokes conflict. Oligarchy is the politics of the defense of this wealth, propagated by the richest members of society.

Wealth defense can take many forms. In ancient Greece and Rome, the wealthiest citizens cooperated to run institutionalized states that defended their property rights. In Suharto’s Indonesia, a single oligarch led a despotic regime that mostly used state power to support other oligarchs. In medieval Europe, the rich built castles and raised private armies to defend themselves against each other and deter peasants tempted by their masters’ vaults. In all of these cases oligarchs are directly engaged in rule. They literally embody the law and play an active role in coercion as part of their wealth defense strategy.

Contemporary America (along with other capitalist states) instead houses a kind of “civil oligarchy.” The big difference is that property rights are now guaranteed by the impersonal laws of an armed state. Even oligarchs, who can be disarmed for the first time in history and no longer need to rule directly, must submit to the rule of law for this modern “civil” arrangement to work. When oligarchs do enter government, it is more for vanity than to rule as or for oligarchs. Good examples are New York City Mayor Michael Bloomberg, former presidential candidate Ross Perot and former Massachusetts Governor Mitt Romney.

Another feature of American oligarchy is that it allows oligarchs to hire skilled professionals, middle- and upper-class worker bees, to labor year-round as salaried, full-time political advocates and defenders of the oligarchy. Unlike those backing ordinary politicians, the oligarchs’ professional forces require no ideological invigoration to keep going. In other words, they function as a very well-paid mercenary army.

Whatever views and interests may divide the very rich, they are united in being materially focused and materially empowered. The social and political tensions associated with extreme wealth bond oligarchs together even if they never meet, and sets in motion the complex dynamics of wealth defense. Oligarchs do overlap with each other in certain social circles that theorists of the elite worked hard to map. But such networks are not vital to their power and effectiveness. Oligarchic theory requires no conspiracies or backroom deals. It is the minions oligarchs hire who provide structure and continuity to America’s civil oligarchy.

 The US Wealth Defense Industry
The threats to wealth that oligarchs face, and want to overcome, create the enormous profit-making opportunities that motivate the wealth defense industry, or WDI. In American oligarchy, it consists of two components.

The first is the mercenary army of professionals – lawyers, accountants, wealth management agencies – who use highly specialized knowledge to navigate 72,000 pages of tax code and generate a range of tax “products” and advice, enabling oligarchs to collectively save scores of billions of dollars, every year, that would otherwise have to be surrendered to the state. While most of us are what I call “TurboTaxpayers,” buying cheap tax software to navigate our returns and make routine deductions, oligarchs purchase complex “tax opinion letters” from professional firms. These letters are drafted to justify enormous nonpayments of taxes if the IRS ever questions how certain transactions produce losses, or how other accounting gymnastics make it appear that no gains or compensation occurred. The letters can cost up to $3 million each, but can save an oligarch tens or hundreds of millions of dollars in a given year.

Written by some of the most high-powered attorneys and firms in the industry, tax letters serve to intimidate the legal department of the IRS even before a prosecution is contemplated.

The Senate is aware of these letters – noting in a 2003 report on the “tax shelter industry” that “respected professional firms are spending substantial resources … to design, market, and implement hundreds of complex tax shelters, some of which are illegal and improperly deny the U.S. Treasury of billions of dollars in tax revenues” – but getting specific information about them is extremely difficult, since the IRS rarely prosecutes oligarchs. When it does, most cases are sealed, and oligarchs who work with tax attorneys can invoke attorney-client privilege. But in 2003, there was a breach of this fortress of secrecy when the Senate published detailed reports about illegal tax shelters created by the accounting firm KPMG.

According to the Senate, the KPMG tax shelters created “phony paper losses for taxpayers, using a series of complex, orchestrated transactions involving shell corporations, structured finance, purported multi-million dollar loans, and deliberately obscure investments” for 350 clients between 1997 and 2001. The fake losses totaled about $8.4 billion, or $24 million per client; applied against their incomes, these losses reduced the taxes of each oligarch by an average of $8.3 million, or $2.9 billion for the group.

One of the reasons this case was exposed is that it was all rather down-market, using cheap cookie-cutter tax opinion letters priced at a mere $350,000 each.

Not only did all the firms and banks conspiring on behalf of these 350 oligarchs – and the oligarchs themselves – know that the investments “had no reasonable potential for profit,” but KPMG calculated that even if it was fined for failing to disclose the shelters, it would still earn far more in fees than it would pay in fines. The firm was fined $456 million. Even more incredibly, more than a dozen KPMG clients sued the firm for the taxes and penalties incurred after being discovered – the suits claim that KPMG bungled its job of creating shelters for tax evasion with zero legal risks for oligarchs. It’s tantamount to suing your hit man for a sloppy murder.

The second component of the WDI is the nitty-gritty legwork that keeps the tax system sufficiently porous, complex and uncertain enough to be manipulated. Some oligarchs do this work themselves, speed dialing public officials to directly complain about laws and regulations, but most do not. Instead, WDI professionals, motivated to earn a share of annual oligarchic gains, constitute a highly coherent and aggressive network for political pressure. These lobbyists fight to insert favorable material into the tax code, cut sections that cause problems, and block threats on the horizon.

Apologists for havens
Discussions about money in politics often begin with campaign finance reform. Advocates argue that a small fraction of wealthy Americans constitute a powerful donor class that provides the vast majority of candidates’ funds. Long before ordinary citizens get to vote, they say, their choices are reduced to politicians deemed acceptable by the richest Americans via a “wealth primary,” in which candidates straying from a narrow economic agenda are shut out of campaign funding.

“For all their influence at the polls, guys like Joe the Plumber aren’t typically campaign contributors,” explains Sheila Krumholz, executive director of the Center for Responsive Politics. “You’re more likely to see John the Bond Trader bankrolling these campaigns.” And she’s right: Of the roughly 1.4 million individual contributions of $200 or more during the 2008 elections, three-fourths of the money came from a mere one-fifth of the donors, who in turn comprised one-tenth of 1 percent of American adults.

But while this fraction does coincide with our approximation of the size of the American oligarchy, campaign donations are not oligarchs’ primary or even most effective strategy for political influence. Academics Michael Graetz and Ian Shapiro explain this in their 2005 book, Death by a Thousand Cuts: The Fight over Taxing Inherited Wealth.

“Campaign contributions, soft money, spending limits for political candidates and the like have become controversial issues,” they admit, “but they mattered little in the estate tax fight.” The battle was between smaller oligarchs and the biggest players at the top. Believing it unlikely that the elimination of the estate tax could be extended indefinitely, a significant number of wealthy Americans with a net worth between $5 and $15 million wanted the threshold moved up to exempt their estate tax. In exchange, they supported a higher estate tax rate on everyone above the threshold. Big oligarchs took the opposite position. They wanted no estate tax at all. But if Congress was going to bring it back, the ultra-rich supported a lower exemption in exchange for a lower overall rate.

The big oligarchs won again – but not because of campaign finance. “Money mattered more fundamentally in shifting the tectonic plates underlying American tax debates,” Graetz and Shapiro suggest. And this is precisely where oligarchs deploy their resources in the WDI.

Oligarchs’ “three decades of investments in activist, conservative think tanks” has blazed an ideological path that drones in the WDI follow. Activists at institutions like the Heritage Foundation supply “ideological ammunition to the lobbyists and interest groups … who work relentlessly … to keep up the tax-cutting pressure on the Hill.”

This pressure was hard at work in President Obama’s feeble attempt to curtail offshore tax havens in 2009. In the middle of massive public bailouts to the financial system and large bonuses on Wall Street, the president proposed stronger measures to fight against who he called “tax cheats,” the individuals using offshore tax havens to deny the government nearly $70 billion a year – a level equal to about seven cents on every dollar of taxes paid honestly.

But Obama’s proposals were less aggressive than his rhetoric. The president urged Congress to support efforts to sanction nations that maintained secrecy on bank accounts and corporate entities, and sought to hire 800 additional IRS agents “to detect and pursue American tax evaders abroad”; these measures were projected to save a mere $8.7 billion over 10 years – about one percent of the losses from offshore accounts. Despite the timidity, the proposals received only a lukewarm response from Democrats and outright hostility from Republicans, who argued that they would cripple American corporations’ ability to compete globally.

Dan Mitchell, a senior fellow (i.e. mercenary) at the Cato Institute (a think tank financed by American oligarchs), defended tax havens as “outposts of freedom.” If Americans are concerned that “individuals are moving their money to countries with better tax law, that should be a lesson to us that we should fix our tax law.”

In other words: Let’s decrease taxes on the super-rich.

The WDI, arising naturally from the opportunities and risks created by enormous wealth, has spawned its own pile of these opinion-makers, free to spread their ideas through a compliant corporate media while oligarchs themselves are free to look on.

Oligarchy, or Democracy?
To argue that the United States is a thriving oligarchy does not imply that our democracy is a sham: There are many policies about which oligarchs have no shared interests. Their influence in these areas is either small or mutually canceling.

Though it may strike at the heart of elitism, greater democratic participation is not an antidote to oligarchic power. It is merely a potential threat. Only when participation challenges material inequality – when extreme wealth is redistributed – do oligarchy and democracy finally clash.

The answer to the question of inequality, then, is troubling. Wars and revolutions have destroyed oligarchies by forcibly dispersing their wealth, but a democracy never has.

Democracy and the rule of law can, however, tame oligarchs.

A campaign to tame oligarchs is a struggle unlikely to fire the spirits of those outraged by the profound injustices between rich and poor. However, to those enduring the economic and political burdens of living among wild oligarchs, it is an achievement that can improve the absolute welfare of average citizens, even if the relative gap between them and oligarchs widens rather than narrows.

A graduate student in one of my seminars – resisting my terminology – once declared that the “U.S. has rich people, not oligarchs.” More than anything else, that statement claims that somehow American democracy has managed to do something no other political system in history ever has: strip the holders of extreme wealth of their inherent power resources and the political interests linked to protecting those fortunes.
Of course, this hasn’t happened.

But it is endlessly fascinating that we’re now in a moment when Americans are once again asking fundamental questions about how the oligarchic power of wealth distorts and outflanks the democratic power of participation.

Democracy in America Today

Why the Voting Booth is the Last Place to Look for Political Change
by ANDREW LEVINE

What a miserable prospect: a presidential election between a lackluster incumbent unable any longer to conjure up even an illusion of hope and the foremost chameleon in national politics who happens also to be by far the least colorful candidate in the Republican circus. Not all the propaganda money can buy – and we’re talking about quite a lot of money — can make a race between those two rise even to the level of boring.

Add to that the nauseating spectacle, already underway, of liberals rallying to defend President Drone, continuator of the Bush-Cheney assault on civil liberties and the rule of law and champion of a Grand Compromise with the Tea Party. Under his leadership, had the other side not been so sublimely (and stupidly) obstinate, we might already be living though the undoing of Social Security and Medicare.

It could still happen in a second term: making the man whom liberals once thought of as the Second Coming of FDR the most successful Reaganite president of all. Because only a Democrat can bring Democrats along, neither of the Bushes nor the Gipper himself could do much to put the New Deal and Great Society to rest. Obama’s only serious rival in that regard was Bill Clinton. In his zeal to do Wall Street’s bidding, that irrepressible rascal might well have done in the last remnants of what we still have in the way of an affirmative state had not certain distracting peccadillos of a prurient nature gotten in his way.

Were there not still a chance that real politics will break out again this spring, as it did last fall, this would be a fine time for anyone wanting to maintain a semblance of sanity to hop onto a slow boat to China – except that all the boats to China these days operate at full speed both ways, exporting wherewithal for super-exploited workers to turn into crap that we can import for Wal-Mart to sell. For this sad state of affairs, we have the machinations of neo-liberal globalists and vulture capitalists to thank. We have one of each to choose from this November.

Does anything ride on the choice? Probably not, if Mitt Romney can still etch-a-sketch his way back to his former Governor of Massachusetts persona. Then it will take a keen eye to discern light between his politics and Barack Obama’s. Most likely, though, after this primary season, he won’t be able to pull it off; Tea Partiers and other theocrats don’t forget quickly enough. And so Obama will be up against someone whose public face is that of a Rick Santorum – neocon wannabe, but without Santorum’s surreal risibility and without the neocon’s unflinching conviction.

In that scenario, the empire’s current steward will cakewalk his way back into a second term. This will give new meaning to talk about “no drama Obama.” No drama; and therefore an electoral contest of no interest at all.

How did it come to this? How did democracy in America degenerate into a mind-numbing absurdity?

The answer, in a word, is money. It has transformed what has always been a profound dissociation between what democratic theory promises and the real world of American democracy into a yawning divide.

* * *

Despite what students are told in civics classes (where they still exist) and what normative theories of democracy propose, democracy in America today has almost nothing to do with rational deliberation and debate, and very little to do with aggregating preferences or reconciling conflicting interests. It is about legitimating government of, by and for the corporate malefactors and Wall Street banksters who own Congress and the White House along with an obscenely large chunk of the nation’s wealth.

The Occupy movement has driven this point home, but it was widely appreciated long before Zuccotti Park entered the national consciousness. Why then is there no legitimation crisis here in the Land of the Free? The answer, in short, is that we hold competitive elections and, for the most part, abide by their results. Evidently, that suffices.

Thanks to centuries of struggle, we are all today at some level democrats, no matter how removed our political system is from anything like real democracy – rule by the demos, the popular masses (as distinct from economic and social elites). Democratic commitments run so deep that almost anything that smacks of real democracy becomes invested with extraordinary powers of legitimation.

This is why competitive elections have the power to legitimate even regimes like ours in which elites plainly do rule a disempowered ninety-nine percent plus of the population. Competitive elections embody a shard of what real democracy is supposed to be, and that evidently is good enough for us.

Let pass the class content that defined “democracy” from the time of Greek antiquity, and say, along with the major political theorists of recent centuries, that a democracy is a form of government in which the (undifferentiated) people are sovereign; in other words, in which the people who comprise a state and are subject to its authority are the supreme authority within that state.

Competitive elections give institutional expression to that idea. So long as they are free and fair, the outcome, the social choice, is a function of individuals’ choices for the alternatives in contention. The social choice is then the peoples’ choice. The sovereign “speaks” through their votes.

In principle, therefore, the method of majority rule is the ideal voting procedure in a democracy, the one that is most responsive to individuals’ choices. To require more than a bare majority of voters is to invest a minority with the power to veto the popular will. Super-majority rule voting is therefore less than ideal because it accords a kind of dictatorial power to voters in the minority. If, for example, it takes two-thirds of the voters to enact a law, one-third plus one can block its passage.

This would introduce a bias in favor of the status quo that detracts from the idea that social choices are functions of individuals’ choices only.

It may be wise to introduce conservative biases, especially on matters of grave import where individuals’ rights or the basic structure of the political system are involved. The writers of the American Constitution thought so. They concocted all sorts of obstacles in the way of direct popular rule. What they contrived was not a democracy at all, except in a very attenuated sense; instead, it was, as they emphasized, a “republic.”

They had reasons for wanting to limit democracy by making positive change difficult or, in the case of basic rights and liberties, impossible. But it could be argued that these reasons ultimately have to do with the deeper interests of the sovereign people — that they allow the people to achieve by indirection what they cannot reliably be counted on to accomplish directly – and therefore that the founders were democrats after all. This kind of indirection has many precedents in our philosophical tradition.

Aristotle thought that mercy was a necessary corrective for justice. In much the same way, defenders of our constitutional system argued that introducing biases that favor the status quo, conservative biases, are a corrective to the untrammeled operations of majority rule voting. Justice, for Aristotle, remained the core virtue of public institutions. In much the same spirit, our founders saw democracy as the ultimate legitimating principle underlying even the deviations from direct democratic rule that they contrived.

They therefore made regular competitive elections mandatory – and so we ultimately have them to thank for the dreary contest ahead. Although it was hardly what the founders had in mind, the fraction of the one percent that are sure to win in November, the fraction that always wins, therefore have them to thank as well.

Of course, as mentioned, it is not enough just that there be elections — elections must also at least seem to be free and fair. That is the theory. In practice, we have always cut our institutions a great deal of slack.

Slaves were not citizens, and neither were the indigenous peoples who survived the European conquest. Arguably, therefore, their exclusion from the republic’s electoral processes still left elections free and fair. Not so, the way full-fledged citizens were treated.

From the beginning, there were severe restrictions on the franchise; before 1920, women were even forbidden by law to vote. This was only the most egregious offense; there were others. Indeed, it has only been since 1965, with the passage of the Voting Rights Act, that de facto restrictions on the rights of descendants of emancipated slaves and other persons of color to have their say in our elections were finally abolished.

There is some danger now that the pendulum will swing back as Republicans launch voter suppression efforts aimed at categories of persons likely to vote for Democrats. Their efforts are widely berated and it remains to be seen how successful they will be. It is telling, though, that the idea that voter suppression might undo the legitimacy of electoral outcomes is rarely even suggested.

Perhaps this is because we Americans have grown inured to elections that are unfree and unfair. After all, our founders did see to it that our institutions block expressions of popular sovereignty, especially at the national level.

The Electoral College system and the idea that every state, regardless of size, gets two and only two Senators undoes any pretense of “one person, one vote.” Until the passage of the Seventeenth Amendment, we didn’t even have direct elections for Senators; they were appointed instead by their state legislatures. Add to this the power of states to gerrymander Congressional districts and there is, in the end, not much for voters to decide.

Gerrymandering Congressional districts is only one of the many ways that our two semi-established parties see to it that it is difficult to break their duopoly hold. This would not be so bad if the Republicans and Democrats were still “catch all” parties – ecumenical enough to incorporate a wide range of views within their respective folds.

This was never really the case. But not long ago, the description was at least approximately apt. Arguably, it still holds for the Democrats, though, after Clinton and Obama, the party’s leftwing, such as it is, has been much reduced and effectively marginalized. The situation is worse in the GOP where ideological uniformity reigns.

The result is that our two parties are now more polarized than at any time in recent history. Paradoxically, though, because they are each bought and paid for by more or less the same interests, their overall policy orientations are as uniform as ever.

Therefore anything that falls outside the “bipartisan” (really uni-partisan) consensus is marginalized – in ways that ought to make the claim that our elections are free and fair ring hollow. Even to the extent that voting does generate a social choice out of individuals’ choices for the alternatives in contention, the paucity and uniformity of the alternatives disenfranchises many, perhaps most, voters.

And as if that weren’t bad enough, there is the additional obstacle of judicial review. Constitutional courts are an American invention, and for a long time, it was only in the United States that courts had almost unlimited powers to “check and balance” legislatures.

In certain historical periods, this arrangement has had beneficial consequences; it was certainly instrumental for deepening and extending the scope of civil rights. For the most part, though, throughout our history, the court’s rulings have not been beneficial.

But, even when they were, the idea that unelected and unaccountable judges can nullify democratically rendered laws plainly offends the idea of democratic governance.

It is no wonder, therefore, that elites in other countries have introduced similar institutional arrangements, and that constitutional courts have become a common feature of constitutions written since World War II. Even to this day, however, the American case is extreme.

The offense to democracy would be mitigated if the courts restrained themselves — intervening only rarely and then mainly to protect individuals’ rights. This used to be the norm in our Supreme Court. But decades of right-wing court packing are now working their deleterious effects.

The Supreme Court today is a highly politicized institution that reflects the asymmetrical character of our duopolistic party system: rightwing judges installed by Republicans are unabashedly obstinate and radical, while judges installed by Democrats are generally “reasonable” to a fault and insipidly liberal.

And so the Supreme Court made George W. Bush president in 2000, notwithstanding the popular vote and what would have been the vote of the Electoral College had the Justices allowed all the votes in Florida to be recounted fairly.

In violation of ample precedent and sane jurisprudential reasoning, the Supreme Court has since gone on to permit unrestricted campaign contributions by corporate “persons”, allegedly to protect their rights to free speech. The American system of campaign finance has made a mockery of democratic governance from time immemorial. But thanks to the Citizens’ United ruling of 2010, even the pretense that governance is not about what can be bought and paid for is now thoroughly shot.

* * *

So much for rational deliberation or combining autonomously formed choices; our politics is about buying votes – not directly, but through the techniques advertisers use to market their clients’ wares. This involves dumbing down voters, not enlightening them through reasoned discourse; and instilling wants, not encouraging their self-directed development and combining them fairly.

In other words, our politics has no more to do with democracy than the public discourse registered in the media that report on it, on the “horse race” it has become, has to do with a marketplace of ideas. There is only enough intimation of democratic procedures to give the system the de facto legitimacy economic elites need to keep everything working for benefit. Our politics is about buying influence with politicians who then buy votes. It has been reduced to hucksterism pure and simple.

Whether the election goes to Obama, as now seems likely, or to Romney, the real winner will, in either case, be the same: the fraction of the one percent that always wins.

And so, come November 6, Americans will be asked to choose a president from among two choices, neither of whom anybody wants except perhaps for lesser evil reasons. This is what democracy in America today has come to.

A miserable prospect indeed, but there are silver clouds.

At least this time, no one will think that, if only the right candidate were on offer, the mess would somehow fix itself. The best thing Obama did in his first term has been to shatter that illusion for a long time to come.

And perhaps too the plain irrelevance of the electoral process for the kinds of changes liberals thought they would get through Obama’s election will finally dawn on the national consciousness.

Electoral efforts, like Jill’s Stein’s in the Green Party, can be helpful for educating voters in ways that enhance democracy in America; and, at the state and local level, Democratic victories can be indispensable for fighting back against Republican overreach. The impending recall election of Wisconsin Governor Scott Walker is a case in point. But, in the end, elections that alter the course of business as usual – whether for good or ill — only ratify transformations in the political landscape forged outside the electoral arena. For an engine of “change we can believe in” the voting booth is the last place to look.

Media Madness

Chronic Biases
by RALPH NADER

March Madness comes once a year. Media Madness is year-round. What the mass media choose to cover and feature try to turn the priorities of any sane society upside down.

People of vice, war, money, spectator sports and business receive media attention – oftentimes ad nausem. People of virtue, peace, civics, health, labor and community engagement have to beg for media attention. Which of these two groups represents the most basic values of a civilized society that would restrain the excesses of the other group? You can guess!

There are many reasons for this chronic bias, beyond the power of commercial advertisers. The media believe that wrongdoing and greed and violence get readers and ratings while their opposites are dull soup.

But aren’t these opposites vital to the survival and well-being of a just society? Aren’t people who wage peace to prevent war, or demand health/safety over sickness/injury, more newsworthy when they expose people or companies that cause danger, damage and deaths?

Big-Time Greed is headline material, while Big-Time Thrift (e.g. efficiency for consumers) is boring, even when it concentrates on exposing Big-Time Greed. Aetna, Pfizer and avaricious middlemen are sometimes in the news when they exhibit gouging practices. But have you ever heard of Harvard researcher/lecturer Malcolm Sparrow, who for years has shown that at least ten percent of your healthcare spending goes down the drain due to preventable, computerized billing fraud and abuse? That amounts to $270 billion this year alone!

When news editors are asked why the media overwhelmingly cover the utterances of warmongers like William Kristol (The Weekly Standard) but ignore peace-advocates like Coleman McCarthy (The Nation and Progressive Magazine), they respond that Kristol has more influence.

But who gave Kristol influence? Why, the media who quote and interview him incessantly. Coleman McCarthy, a formerly syndicated columnist for the Washington Post, works to have colleges and high schools around the country adopt peace studies. He could give a lively interview on Meet the Press or This Week on the superiority of waging peace over waging war in advancing national security in countries around the world.

The New York Times reports the crazed outbursts of bigots such as Ann Coulter and Pam Geller, even devoting entire pages, with numerous photographs, to both of them in one October 2010 Sunday edition. Yet the great labor advocate, writer and pamphleteer, Harry Kelber, has been on top of the most important worker-management issues of our time for a mere 75 years and remains unknown to New York Times readers, even though he resides in New York City, just like the Times.

These contrasts were at work at our Control the Corporation conference –held in Washington, DC earlier this month. The all-day event consisted of several panels on timely and important topics. The panelists discussed: how to counter the impact of corporate control of the electoral process, how to hold corporations accountable for their crimes, how to protect the “commons” from the insatiable advocates of privatization, what are future actions of the Occupy movement, how to create economic models and initiatives for creating jobs and raising the minimum wage, and what are the strategies to employ for mobilizing sustained action toward a more just democratic society.

The presenters were among the most experienced and articulate activists in the country regarding these important areas of American concerns. The media were informed in advance, yet no major news reporters, feature writers or columnists showed up.

Among the many leaders in fields of corporate injustice who spoke at the conference were: Harvey Wasserman, Rob Richie, Patrick Burns, Robert Weissman, Phineas Baxandall, David Morris, Wenonah Hauter, Jamie Love, Margaret Flowers, Greg LeRoy, Gayle McLaughlin, Michael Gecan, Russell Mokhiber, Chris Hedges and David Freeman.

Ever hear of them? Do you know how much better, safer, economically-secure, freer and more influential your lives would be were these and other civic leaders given print and airtime like the scoundrels and distracters that daily fill the screens and pages of newspapers, television and radio?

Well, visit the Center for Study of Responsive Law’s website for the concise biographies of the presenters and start following the great works of those who interest you.

Should you be interested in results beyond our borders, look up Jamie Love, the economist whose tireless global travels to less-developed countries exposed the prohibitive prices of AIDS drugs ($10,000 per person per year) and led to his persuading Cipla, a drug company in India, to make and sell these drugs for $300 per person per year for AIDS patients in South Africa. More than any single person, his incisive advocacy and action coalitions broke the grip of the politically connected Big Pharma and overcame its determination that obscene profits on AIDS drugs must trump human lives.

A philosopher once said that we honor those we reward. Whom do we reward? Whom do we note? Business, sports and entertainment figures. The names of people advancing the great values of a society, like health, safety, clean elections – are largely unknown. The media like to trivialize, tantalize and entertain, but they rarely acknowledge those advancing solutions to our society’s most pressing problems. It is well beyond the time for the mass media to redefine what is important and get serious about very critical matters for this and future generations.

Profiling the Supremes

Politics & Personalities on Display in Arguments Over ObamaCare
by ELAINE CASSEL


As a lawyer and teacher of psychology, I have more than a passing interest in the intersection of behavior and the law. Three days of Supreme Court hearings on the Affordable Care Act (ACA) were an intellectual feast for me. The first time I listened to the audio tapes, the day of their release, I was riveted by the legal arguments, which ran the gamut from profound and compelling, to specious and ridiculous. On second listening, more leisurely and over the weekend via C-Span Radio, I was struck by how personality traits were conveyed in the justices’ comments and questioning.

This was particularly apparent in the arguments in the afternoon of Day 3, when the state of Florida argued that the required Medicaid expansion was so coercive that it had to be stricken (unless, of course, the court threw out the entire law, in which case the argument is moot). Little attention has been paid to this afternoon of argument, perhaps because the issue was not as sexy as the individual mandate and severability. In short, the law requires the states to significantly expand access to Medicaid. The federal government will pay 90% of the cost. If the states don’t expand access, the Secretary of Health and Human Services, who administers Medicaid, may withdraw funds from the states for services not included in the ACA.

At the outset of the argument, Justices Kagan and Sotomoyer’s empathy and compassion for “poor people,” shown through. Why would the states not want to accept a gift from the federal government that would be good for their citizens, they argued? Because, attorneys for Florida argued, it amounted to coercion.

When lawyers talk about coercion, the analogy of the proverbial gun to the head comes into play. Legal coercion is hard to prove unless, the old saw goes, you can prove that someone literally held a gun to your head and made you take some action you would not otherwise have undertaken. The gun to the head argument was exploited by Chief Justice Roberts. Following his lead, Justices Scalia and Alito took it to such extreme hypothetical conclusions, spinning out so many absurd hypotheticals, that the Chief Justice granted Solicitor General Verrilli, arguing for the Obama administration, another fifteen minutes.

Justice Breyer displayed his measured and even temperament by positing that the Secretary of Health and Human Services would be reasonable and judicious in her implementation of the requirements. Breyer pointed out that agencies are required to administer laws fairly. Justice Alito seems personally
offended that the government would intrude upon states in such a way as to require an expansion that they might not want or which may have strings so offensive that they may be forced, on principle, to decline to adopt the measures and, under the law, risk losing funds other than those related to the ACC.

Justice Scalia poked his usual fun as the whole idea of providing health care to those in need (earlier in the proceedings he suggested that the government could, if he wanted to, change laws requiring hospitals to provide emergency services regardless of insurance status). Justice Thomas sat stone silent, reflecting his aloofness—not for him the trenches of debate and discourse. To this listener, Justices Kennedy and Ginsberg showed no particular personality traits as they framed their arguments in legal, not political, terms.

But the Chief Justice, who, for some reason, has always invoked in me a sense that he would be a tough man to work around or live with, did not disappoint. His hypotheticals and arguments projected a bullying, intimidating federal government that would hold a “gun to the head” of the states, and demand full compliance or withdrawal of all Medicaid support. In a revealing statement he said, “I mean, if I had the authority and I was in that position, I would use it all the time. You might — you want some little change made? Well, guess what; I can take away all your money if you don’t make it. I win. Every time.”

Whoa! Stop tape! Was the Chief Justice projecting his own authoritarianism? As in, “If I had the power, I wouldn’t be reasonable or judicious. I would exert power for power’s sake”? So much for being the umpire calling “balls and strikes,” as he so famously said during his nomination hearings.

Roberts went on to project an authoritarian and arbitrary view of the federal government. Surely the HHS secretary would do as he would do. “So, why shouldn’t we be concerned about the extent of
authority that the government is exercising, simply because they could do something less? We have to analyze the case on the assumption that that power will be exercised, don’t we?”

Justices Kagan and Breyer piped up and pointed out that there was no evidence that the government has ever acted with vengeance to “punish” noncompliance with a Medicaid requirement, but Roberts and Scalia headed headed them off at the pass.

Having projected the government as a bully, Roberts casts the states in the victim role. “Of course no State is going say, okay, go ahead, make my day, take it away. They’re — they’re going to give in.” Of course. Roberts is nothing if not certain of his conclusion. Justice Roberts pressed Verrilli to name him one case decision that proved the government all the time. Verrilli couldn’t name a case precedent, so the absence of evidence became evidence. Said Roberts, “And you cannot -you cannot represent that the Secretary has never said: And if you don’t do it, we are going to take away all the funds.” Roberts brings back the gun to the head analogy, suggesting the no one has been shot with the (government’s) gun because the victim (state) has “given up” its wallet. It had no choice.

At this point, you may be thinking that Roberts will condemn the bullying gun-to-the head government, but no! He surprises us! “I’m not saying there’s anything wrong with it.” Then mocking Verrill, who tries to stop the runaway metaphor of government as gun-toting bully butts in, “It’s not coercion, Mr. Chief Justice.” Oh, really, Roberts said? “To say I’m going to take away all your funds, no matter how minor the infringement?” No matter that there is not a shred of evidence that the federal government ever has or ever will cut off a state from Medicaid funds for “minor infringement” of its rules, the government’s policy being to provide services to those who need them most.

But Roberts is not done yet. His assigns a purpose for the bullying government of his hypothetical. The federal government, having given the Medicaid funds which the state and its citizens got used to and, presumably, liked, may decide to lower its “contribution to Medicaid and leave it up to the states because we {the federal government} want the people to be mad at the States when they have to have all these budget cuts to keep it up, and not at the federal government.”Not surprising, Verrilli has no effective counter to this proposition that the federal government would give something, and take it away for the purpose of (“because”) turning the American people against the state governments.

So here is Roberts’ explanation for the expanded Medicaid provision: In order to turn the people against their states, tell the states they have to put more people on the Medicaid rolls and pay 90 % of the cost. The states may not want to do it, well, just because. But the people will probably like it. Then just when the people start to like it, the federal government tells the states it has no more money to fund the expansion. The people will turn against the states or, at least, be “mad” at them. Roberts starts short of giving any plausible motive for why the federal government would want to pit citizens against their states.

With recent polls indicating that a majority of Americans expect the Court to rule along partisan lines, the Court’s reputation is already compromised. It began, to be fair, before Roberts’ rule, with Bush v. Gore. It continued, under his watch, with Citizens United, which struck down decades of campaign finance laws designed to promote fair elections and true representative government. Those who suggest that Roberts is concerned for the reputation of the court and for his own legacy and, if believes the individual mandate is not constitutional, would refrain from supporting a decision that would strike the entire law, should pay attention to the personality behind the robe. Florida v. Department of Health and Human Services may well be the next blockbuster ruling from justices who vote their politics and their personalities.

Chemical Warfare: The US Military's Pill Addiction

Thursday, April 12, 2012 by Common Dreams
by Robert C. Koehler

To fight our insane wars, we’re wrecking our soldiers’ ability to live with themselves and function in society, then regulating what’s left of them with chemicals, which often make things immeasurably worse.

In the pursuit of order, could we possibly be creating more chaos, not simply externally — in the shattered countries we’re leaving in our wake — but internally, in the minds of those soldiers?

The Los Angeles Times noted that Air Force pilot Patrick Burke was recently acquitted in a court-marital hearing on charges of auto theft, drunk driving and two counts of assault — due to “polysubstance-induced delirium.” This was, the Times explained, a turning point: the first official acknowledgement, by military psychiatrists and a court-martial judge, that the drugs that have become a routine part of military service — in Burke’s case, the prescribed amphetamine Dexedrine (“go pills”) — can contribute to temporary insanity.

Better living through chemistry!

The chemical fix pervades the whole culture, of course, and while drugs can produce astounding results, they are demonically seductive and always have a down side. And nowhere, it seems, is their misuse more dramatic than in the modern military.

“After two long-running wars with escalating levels of combat stress, more than 110,000 active-duty Army troops last year were taking prescribed antidepressants, narcotics, sedatives, antipsychotics and anti-anxiety drugs, according to figures recently disclosed to The Times by the U.S. Army surgeon general,” Kim Murphy writes in the Times article. “Nearly 8 percent of the active-duty Army is now on sedatives and more than 6 percent is on antidepressants — an eightfold increase since 2005.”

Murphy quotes psychiatrist Peter Breggin, who has written on the correlation between drug use and violence: “Prior to the Iraq war, soldiers could not go into combat on psychiatric drugs, period. Not very long ago . . . you couldn’t even go into the armed services if you used any of these drugs, in particular stimulants.”

“Nearly 8 percent of the active-duty Army is now on sedatives and more than 6 percent is on antidepressants — an eightfold increase since 2005.”

Now he’s hearing from soldiers who tell him “the psychiatrist won’t approve their deployment unless they take psychiatric drugs.”

Uh, this sounds like addiction, and not on the part of the soldiers. The military itself is addicted to . . . well, as Murphy explains, “the modern Army psychiatrist’s deployment kit is likely to include nine kinds ofantidepressants, benzodiazepines for anxiety, four antipsychotics, two kinds of sleep aids, and drugs for attention-deficit hyperactivity disorder, according to a 2007 review in the journal Military Medicine.”

And the attorneys for Staff Sgt. Robert Bales, the alleged lone killer of 17 Afghans last month, have asked for a list of all the medications he was taking. There’s a great deal of speculation about whether he was on one drug in particular, the anti-malarial drug mefloquine, which has been linked to bizarre and violent behavior and induces what’s known in the ranks as “mefloquine rage.”

All of which makes me think of the out-of-control use of chemicals in global agribusiness, in its for-profit zeal to turn the planet’s arable land into endless acres of monoculture, in utter defiance of, and war against, the diversity of nature. This is our war against “pests” and “weeds,” and, like our war against “evil,” a.k.a., terrorism, or whatever, and our determination to impose an economic and political monoculture on the whole planet, we’re not simply losing, we’re destroying ourselves.

“‘Farmers need technology right now to help them with issues such as weed resistance,’ a Dow official said last month. Translation? Farmers need technology right now to help them with issues created by . . . technology introduced 15 years ago,” Verlyn Klinkenborg wrote recently in Yale Environment 360 (reprinted at Common Dreams).

“Instead of urging farmers away from uniformity and toward greater diversity,” he went on, “the USDA is helping them do the same old wrong thing faster. When an idea goes bad, the USDA seems to think, the way to fix it is to speed up the introduction of ideas that will go bad for exactly the same reason. And it’s always, somehow, the same bad idea: the uniform application of an anti-biological agent, whether it’s a pesticide in crops or an antibiotic on factory farms. The result is always the same. Nature finds a way around it, and quickly.”

This is the domination mindset: As we seek dominion over nature and dominion over the nations of the world, we whack at our perceived enemies with an endless barrage of same old, same old, in increasingly lethal dosages. And when the war backs up into our psyches, we turn the chemical barrage on our own minds, on our own souls.

What will it take to transform institutionalized rage and fear into something that doesn’t emanate from the reptile brain? How do we put love into collective motion? Until we do, the world will keep looking more and more like a sci-fi techno-dystopia.

Genetically Modified Food Issues - Educational Video Part 1

Genetically Modified Food Issues - Educational Video Part 1

Study: Autism Linked to Industrial Food, Environment

Wednesday, April 11, 2012 by Common Dreams
Report cites prevalence of high-fructose corn syrup in US diet as possible contributor to alarming epidemic

A new study by Clinical Epigenetics, a peer-reviewed journal that focuses largely on diseases, has found that the rise in autism in the United States could be linked to the industrial food system, specifically the prevalence of high-fructose corn syrup (HFCS) in the American diet. The study, published yesterday online, explores how mineral deficiencies could impact how the human body rids itself of common toxic chemicals like mercury and pesticides. The report comes just after a different report, from the Centers for Disease Control and Prevention, documented a startling rise in autism in the United States.

“To better address the explosion of autism, it’s critical we consider how unhealthy diets interfere with the body’s ability to eliminate toxic chemicals, and ultimately our risk for developing long-term health problems like autism.” said Dr. David Wallinga, a study co-author and physician at the Institute for Agriculture and Trade Policy.

The report's key findings:

• Autism and related disorders affect brain development. The current study sought to determine how environmental and dietary factors, like HFCS consumption, might combine to contribute to the disorder.

• Consumption of HFCS, for example, is linked to the dietary loss of zinc, which interferes with the elimination of heavy metals from the body. Many heavy metals like mercury, arsenic and cadmium are potent toxins with adverse effects on brain development in the young.

• HFCS consumption can also impact levels of other beneficial minerals, including calcium. Loss of calcium further exacerbates the detrimental effects of exposure to lead on brain development in fetuses and children.

• Inadequate levels of calcium in the body can also impair its ability to expel organophosphates, a class of pesticides long recognized by the EPA and independent scientists as especially toxic to the young developing brain.

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Clinical Epigenetics: Abstract

The number of children ages 6 to 21 in the United States receiving special education services under the autism disability category increased 91 % between 2005 to 2010 while the number of children receiving special education services overall declined by 5 %. The demand for special education services continues to rise in disability categories associated with pervasive developmental disorders. Neurodevelopment can be adversely impacted when gene expression is altered by dietary transcription factors, such as zinc insufficiency or deficiency, or by exposure to toxic substances found in our environment, such as mercury or organophosphate pesticides. Gene expression patterns differ geographically between populations and within populations. Gene variants of paraoxonase-1 are associated with autism in North America, but not in Italy, indicating regional specificity in gene-environment interactions. In the current review, we utilize a novel macroepigenetic approach to compare variations in diet and toxic substance exposure between these two geographical populations to determine the likely factors responsible for the autism epidemic in the United States.

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Institute for Agriculture and Trade Policy: Study Links Autism with Industrial Food, Environment

The epidemic of autism in children in the United States may be linked to the typical American diet according to a new study published online in Clinical Epigenetics by Renee Dufault, et. al. The study explores how mineral deficiencies—affected by dietary factors like high fructose corn syrup (HFCS)—could impact how the human body rids itself of common toxic chemicals like mercury and pesticides. 

The release comes on the heels of a report by the Centers for Disease Control and Prevention (CDC) that estimates the average rate of autism spectrum disorder (ASD) among eight year olds is now 1 in 88, representing a 78 percent increase between 2002 and 2008. Among boys, the rate is nearly five times the prevalence found in girls. 

“To better address the explosion of autism, it’s critical we consider how unhealthy diets interfere with the body’s ability to eliminate toxic chemicals, and ultimately our risk for developing long-term health problems like autism.” said Dr. David Wallinga, a study co-author and physician at the Institute for Agriculture and Trade Policy (IATP).

Low-Wage Jobs and the Stalled Recovery

Growth at the Bottom
by EILEEN APPELBAUM


Slower-than-expected employment growth in March 2012 has brought the halting pace of economic recovery into sharp focus again. Nearly three years since the recession officially ended in June of 2009, 12.7 million people are still out of work and unable to find a job—a figure that rises to 22.8 million if workers who have given up looking but still want to work and those employed part-time because of the poor economy are included.

Demand for goods and services has been slow to recover—consumer spending has been hampered by a loss of housing wealth, continued high unemployment, and economic insecurity while government spending has been hamstrung by political infighting in Washington. The job growth that has occurred has been largely concentrated in very low wage occupations.

Economic theory—and common sense—tells us that high unemployment will persist until demand picks up. Businesses are not going to increase the pace at which they hire workers until the pace of spending increases.

Despite the obvious employment gap that results from the shortfall in spending, some observers contend that it is a mismatch between the skills of unemployed workers and the skills employers require that is responsible for the continuing high unemployment. Many of the ills of the labor market have been attributed to a supposed hollowing out of the job distribution—to “job polarization.”

Indeed, the claim that middle-skill/middle-income jobs in the United States are disappearing while jobs at the top and bottom of the occupational ladder are growing has been put forward as the explanation for four decades of wage stagnation for men.

Today, the claim that employers have good jobs but can’t find workers with the right skills to fill them has gained currency in the popular press. Yet such an imbalance between supply and demand would cause wages to rise in those occupations, and no such increase in pay can be observed.

Now a new study attributes the jobless recoveries following recent recessions to such job polarization. The study’s authors argue that jobs in the middle of the skill and income distribution disappear during recessions and fail to come back during recoveries. How real is job polarization?

The job polarization thesis is widely attributed to work by David Autor and his colleagues. But as Autor makes very clear, it is only the decade of the 1990s that can be characterized by a hollowing out of middle-skill jobs. In that decade, according to Autor, employment growth was most rapid in high-skill jobs, was modestly positive in low-skill jobs, and was modestly negative in middle-skill jobs.

From 1999 to 2007, in contrast, Autor finds that employment growth was concentrated in the bottom third of the skill distribution, a pattern that has persisted through the recovery from the 2007-2009 recessionand that is expected to persist to 2020.

Looking at the nature of job growth as economic recovery took hold, the National Employment Law Project found that lower-wage occupations—retail sales persons, office clerks, food prep workers, and stock clerks topped this list—grew by 3.2 percent from the first quarter of 2010 through the first quarter of 2011, and mid-wage occupations grew by 1.2 percent, while higher-wage occupations declined by 1.2 percent. Occupational projections to 2020 tell a similar story.

The Bureau of Labor Statistics projects that five of the top six occupations with the most job growth from 2010 to 2020 will be low-wage jobs that require little or no post-high school education—retail sales persons, home health aides, home care aides, office clerks general, and food prep and serving workers. Personal care aides and home health aides are also the two fastest growing occupations according to these projections.

Thus the job polarization of the 1990s has been replaced in the last dozen years by job growth that is dominated by occupations in the bottom tier of the skill and wage distributions. This trend is likely to continue in the absence of policies that increase demand more broadly in the economy and that improve wages and working conditions for the millions of workers—mainly women—in the occupations that are growing. Low wages in the expanding occupations limit gains in consumer spending and hamper more robust job growth.

13 Ways the Government Tracks You

Surveillance Nation
by BILL QUIGLEY

Privacy is eroding fast as technology offers government increasing ways to track and spy on citizens.  The Washington Post reported there are 3,984 federal, state and local organizations working on domestic counterterrorism.  Most collect information on people in the US.  Here are thirteen examples of how some of the biggest government agencies and programs track people.

One.  The National Security Agency (NSA) collects hundreds of millions of emails, texts and phone calls every day and has the ability to collect and sift through billions more.  WIRED just reported NSA is building an immense new data center which will intercept, analyze and store even more electronic communications from satellites and cables across the nation and the world.  Though NSA is not supposed to focus on US citizens, it does.

Two.  The Federal Bureau of Investigation (FBI) National Security Branch Analysis Center (NSAC) has more than 1.5 billion government and private sector records about US citizens collected from commercial databases, government information, and criminal probes.

Three.  The American Civil Liberties Union and the New York Times recently reported that cellphones of private individuals in the US are being tracked without warrants by state and local law enforcement all across the country.  With more than 300 million cellphones in the US connected to more than 200,000 cell phone towers, cellphone tracking software can pinpoint the location of a phone and document the places the cellphone user visits over the course of a day, week, month or longer.

Four.  More than 62 million people in the US have their fingerprints on file with the FBI, state and local governments.  This system, called the Integrated Automated Fingerprint Identification System (IAFIS), shares information with 43 states and 5 federal agencies.   This system conducts more than 168,000 checks each day.

Five.  Over 126 million people have their fingerprints, photographs and biographical information accessible on the US Department of Homeland Security Automated Biometric Identification System (IDENT).  This system conducts about 250,000 biometric transactions each day.  The goal of this system is to provide information for national security, law enforcement, immigration, intelligence and other Homeland Security Functions.

Six.  More than 110 million people have their visas and more than 90 million have their photographs entered into the US Department of State Consular Consolidated Database (CCD).   This system grows by adding about 35,000 people a day.  This system serves as a gateway to the Department of State Facial Recognition system, IDENT and IAFSIS.

Seven.  DNA profiles on more than 10 million people are available in the FBI coordinated Combined DNA index System (CODIS) National DNA Index.

Eight.  Information on more than 2 million people is kept in the Intelligence Community Security Clearance Repository, commonly known as Scattered Castles.  Most of the people in this database are employees of the Department of Defense (DOD) and other intelligence agencies.

Nine.  The DOD also has an automated biometric identification system (ABIS) to support military operations overseas.  This database incorporates fingerprint, palm print, face and iris matching on 6 million people and is adding 20,000 more people each day.

Ten.  Information on over 740,000 people is included in the Terrorist Identities Datamart Environment (TIDE) of the National Counterterrorism Center.  TIDE is the US government central repository of information on international terrorist identities.  The government says that less than 2 percent of the people on file are US citizens or legal permanent residents.  They were just given permission to keep their non-terrorism information on US citizens for a period of five years, up from 180 days.

Eleven.  Tens of thousands of people are subjects of facial recognition software.  The FBI has been working with North Carolina Department of Motor Vehicles and other state and local law enforcement on facial recognition software in a project called “Face Mask.”  For example, the FBI has provided thousands of photos and names to the North Carolina DMV which runs those against their photos of North Carolina drivers.  The Maricopa Arizona County Sheriff’s Office alone records 9,000 biometric mug shots a month.

Twelve.  The FBI operates the Nationwide Suspicious Activity Reporting Initiative (SAR) that collects and analyzes observations or reports of suspicious activities by local law enforcement.   With over 160,000 suspicious activity files, SAR stores the profiles of tens of thousands of Americans and legal residents who are not accused of any crime but who are alleged to have acted suspiciously.

Thirteen.  The FBI admits it has about 3,000 GPS tracking devices on cars of unsuspecting people in the US right now, even after the US Supreme Court decision authorizing these only after a warrant for probable cause has been issued.

The Future 

The technology for tracking and identifying people is exploding as is the government appetite for it.

Soon, police everywhere will be equipped with handheld devices to collect fingerprint, face, iris and even DNA information on the spot and have it instantly sent to national databases for comparison and storage.

Bloomberg News reports the newest surveillance products “can also secretly activate laptop webcams or microphones on mobile devices,” change the contents of written emails mid-transmission, and use voice recognition to scan phone networks.

The advanced technology of the war on terrorism, combined with deferential courts and legislators, have endangered both the right to privacy and the right of people to be free from government snooping and tracking.  Only the people can stop this.