The Right's Stupidity Spreads, Enabled by a Too-Polite
Left
Conservativism may be the refuge of the
dim. But the room for rightwing ideas is made by those
too timid to properly object
by George Monbiot, The Guardian UK, 2/9/12
Self-deprecating, too liberal for their own good,
today's progressives stand back and watch, hands over
their mouths, as the social vivisectionists of the right
slice up a living society to see if its component parts
can survive in isolation. Tied up in knots of reticence
and self-doubt, they will not shout stop. Doing so
requires an act of interruption, of presumption, for
which they no longer possess a vocabulary.
Perhaps it is in the same spirit of liberal constipation that, with the
exception of Charlie Brooker, we have been too polite to
mention the Canadian study published last month in the
journal Psychological Science, which revealed that
people with conservative beliefs are likely to be of low
intelligence. Paradoxically it was the Daily Mail that
brought it to the attention of British readers last
week. It feels crude, illiberal to point out that the
other side is, on average, more stupid than our own. But
this, the study suggests, is not unfounded
generalization but empirical fact.
It is
by no means the first such paper. There is plenty of
research showing that low general intelligence in
childhood predicts greater prejudice towards people of
different ethnicity or sexuality in adulthood.
Open-mindedness, flexibility, trust in other people: all
these require certain cognitive abilities. Understanding
and accepting others – particularly "different" others –
requires an enhanced capacity for abstract thinking.
But,
drawing on a sample size of several thousand, correcting
for both education and socioeconomic status, the new
study looks embarrassingly robust. Importantly, it shows
that prejudice tends not to arise directly from low
intelligence but from the conservative ideologies to
which people of low intelligence are drawn. Conservative
ideology is the "critical pathway" from low intelligence
to racism. Those with low cognitive abilities are
attracted to "rightwing ideologies that promote
coherence and order" and "emphasize the maintenance of
the status quo". Even for someone not yet renowned for
liberal reticence, this feels hard to write.
This is
not to suggest that all conservatives are stupid. There
are some very clever people in government, advising
politicians, running thinktanks and writing for
newspapers, who have acquired power and influence by
promoting rightwing ideologies.
But what we now see among their parties – however intelligent their guiding
spirits may be – is the abandonment of any pretense of
high-minded conservatism. On both sides of the Atlantic,
conservative strategists have discovered that there is
no pool so shallow that several million people won't
drown in it. Whether they are promoting the idea that
Barack Obama was not born in the US, that man-made
climate change is an eco-fascist-communist-anarchist
conspiracy, or that the deficit results from the greed
of the poor, they now appeal to the basest, stupidest
impulses, and find that it does them no harm in the
polls.
Don't take my word for it. Listen to what two former Republican ideologues,
David Frum and Mike Lofgren, have been saying. Frum
warns that "conservatives have built a whole alternative
knowledge system, with its own facts, its own history,
its own laws of economics". The result is a "shift to
ever more extreme, ever more fantasy-based ideology"
which has "ominous real-world consequences for American
society".
Lofgren complains that "the crackpot outliers of two decades ago have become
the vital center today". The Republican party, with its
"prevailing anti-intellectualism and hostility to
science" is appealing to what he calls the
"low-information voter", or the "misinformation voter".
While most office holders probably don't believe the
"reactionary and paranoid claptrap" they peddle, "they
cynically feed the worst instincts of their fearful and
angry low-information political base".
The madness hasn't gone as far in the UK, but the effects of the
Conservative appeal to stupidity are making themselves
felt. This week the Guardian reported that recipients of
disability benefits, scapegoated by the government as
scroungers, blamed for the deficit, now find themselves
subject to a new level of hostility and threats from
other people.
These are the perfect conditions for a billionaires' feeding frenzy. Any
party elected by misinformed, suggestible voters becomes
a vehicle for undisclosed interests. A tax break for the
1% is dressed up as freedom for the 99%. The regulation
that prevents big banks and corporations exploiting us
becomes an assault on the working man and woman. Those
of us who discuss man-made climate change are cast as
elitists by people who happily embrace the claims of
Lord Monckton, Lord Lawson or thinktanks funded by
ExxonMobil or the Koch brothers: now the authentic
voices of the working class.
But when I survey this wreckage I wonder who the real idiots are. Confronted
with mass discontent, the once-progressive major
parties, as Thomas Frank laments in his latest book Pity
the Billionaire, triangulate and accommodate, hesitate
and prevaricate, muzzled by what he calls "terminal
niceness". They fail to produce a coherent analysis of
what has gone wrong and why, or to make an uncluttered
case for social justice, redistribution and regulation.
The conceptual stupidities of conservatism are matched
by the strategic stupidities of liberalism.
Yes,
conservatism thrives on low intelligence and poor
information. But the liberals in politics on both sides
of the Atlantic continue to back off, yielding to the
supremacy of the stupid. It's turkeys all the way down.
--------------------------------------------
Corporations Have No Use for Borders
by Chris Hedges, TruthDig, 1/30/2012
What
happened to Canada? It used to be the country we could
flee to if life in the United States became unpalatable.
No nuclear weapons. No huge military-industrial complex.
Universal health care. Funding for the arts. A good
record on the environment.
But
that was the old Canada. I was in Montreal on Friday and
Saturday and saw the familiar and disturbing tentacles
of the security and surveillance state. Canada has
withdrawn from the Kyoto Accords so it can dig up the
Alberta tar sands in an orgy of environmental
degradation. It carried out the largest mass arrests of
demonstrators in Canadian history at 2010’s G-8 and G-20
meetings, rounding up more than 1,000 people. It sends
undercover police into indigenous communities and
activist groups and is handing out stiff prison terms to
dissenters. And Canada’s Prime Minister Stephen Harper
is a diminished version of George W. Bush. He champions
the rabid right wing in Israel, bows to the whims of
global financiers and is a Christian fundamentalist The
voices of dissent sound like our own. And the forms of
persecution are familiar. This is not an accident. We
are fighting the same corporate leviathan.
“I want
to tell you that I was arrested because I am seen as a
threat,” Canadian activist Leah Henderson wrote to
fellow dissidents before being sent to Vanier prison in
Milton, Ontario, to serve a 10-month sentence. “I want
to tell you that you might be too. I want to tell you
that this is something we need to prepare for. I want to
tell you that the risk of incarceration alone should not
determine our organizing.”
“My
skills and experience—as a facilitator, as a trainer, as
a legal professional and as someone linking different
communities and movements—were all targeted in this
case, with the state trying to depict me as a
‘brainwasher’ and as a mastermind of mayhem, violence
and destruction,” she went on. “During the week of the
G8 & G20 summits, the police targeted legal observers,
street medics and independent media. It is clear that
the skills that make us strong, the alternatives that
reduce our reliance on their systems and prefigure a new
world, are the very things that they are most afraid
of.”
The
decay of Canada illustrates two things. Corporate power
is global, and resistance to it cannot be restricted by
national boundaries. Corporations have no regard for
nation-states. They assert their power to exploit the
land and the people everywhere. They play worker off of
worker and nation off of nation. They control the
political elites in Ottawa as they do in London, Paris,
Ryadh, Singapore, Canberra and Washington DC. This, I
suspect, is why the tactics to crush the Occupy movement
around the globe have an eerie similarity—infiltrations,
surveillance, the denial of public assembly, physical
attempts to eradicate encampments, the use of propaganda
and the press to demonize the movement, new draconian
laws stripping citizens of basic rights, and
increasingly harsh terms of incarceration.
Our
solidarity should be with activists who march on Tahrir
Square in Cairo or set up encampamentos in
Madrid. These are our true compatriots. The more we shed
ourselves of national identity in this fight, the more
we grasp that our true allies may not speak our language
or embrace our religious and cultural traditions, the
more powerful we will become.
Those
who seek to discredit this movement employ the language
of nationalism and attempt to make us fearful of the
other. Wave the flag. Sing the national anthem. Swell
with national hubris. Be vigilant of the hidden
terrorist. Canada’s Minister of Natural Resources Joe
Oliver, responding to the growing opposition to the
Keystone XL and the Northern Gateway pipelines, wrote in
an open letter that “environmental and other radical
groups” were trying to “hijack our regulatory system to
achieve their radical ideological agenda.” He accused
pipeline opponents of receiving funding from foreign
special interest groups and said that “if all other
avenues have failed, they will take a quintessential
American approach: sue everyone and anyone to delay the
project even further.”
No
matter that in both Canada and the United States suing
the government to seek redress is the right of every
citizen. No matter that the opposition to the Keystone
XL and Northern Gateway pipelines has its roots in
Canada. No matter that the effort by citizens in the
U.S. and in Canada to fight climate change is about
self-preservation. The minister, in the pocket of the
fossil fuel industry like the energy czars in most of
the other industrialized nations, seeks to pit “loyal”
Canadians against “disloyal” Canadians. Those with whom
we will build this movement of resistance will not in
some cases be our own. They may speak Arabic, pray five
times a day toward Mecca and be holding off the police
thugs in the center of Cairo. Or they may be generously
pierced and tattooed and speak Danish or they may be
Mandarin-speaking workers battling China’s totalitarian
capitalism. These are differences that make no
difference.
“My
country right or wrong,” G.K. Chesterton once wrote, is
on the same level as “My mother, drunk or sober.”
Our
most dangerous opponents, in fact, look and speak like
us. They hijack familiar and comforting iconography and
slogans to paint themselves as true patriots. They claim
to love Jesus. But they cynically serve the function a
native bureaucracy serves for any foreign colonizer. The
British and the French, and earlier the Romans, were
masters of this game. They recruited local quislings to
carry out policies and repression that were determined
in London or Paris or Rome. Popular anger was vented
against these personages, and native group vied with
native group in battles for scraps of influence. And
when one native ruler was overthrown or, more rarely,
voted out of power, these imperial machines recruited a
new face. The actual centers of power did not change.
The pillage continued. Global financiers are the new
colonizers. They make the rules. They pull the strings.
They offer the illusion of choice in our carnivals of
political theater. But corporate power remains constant
and unimpeded. Barack Obama serves the same role Herod
did in imperial Rome.
This is
why the Occupy Wall Street movement is important. It
targets the center of power—global financial
institutions. It deflects attention from the empty
posturing in the legislative and executive offices in
Washington or London or Paris. The Occupy movement
reminds us that until the corporate superstructure is
dismantled it does not matter which member of the native
elite is elected or anointed to rule. The Canadian prime
minister is as much a servant of corporate power as the
American president. And replacing either will not alter
corporate domination. As the corporate mechanisms of
control become apparent to wider segments of the
population, discontent will grow further. So will the
force employed by our corporate overlords.
It will
be a long road for us. But we are not alone. There are
struggles and brush fires everywhere. Leah Henderson is
not only right. She is my compatriot.
Editors Note:
We have been saying for years now that the enemy
of the people, no matter where we live, is the large
(out of control monopolistic) multi-nation corporation.
Be it involved in Oil, in Coal, in Iron Ore, in
Agriculture, in Electronics, in Weapons, in Food, in
Retail Chain Stores and Restaurants, in Finance, in
Insurance, in Banking, or other key industries.
It is they attacking the middle class income earner and the poor in the
great tradition of divine right kings, plantation owners
and slaves.
It is they bribing our politicians on both sides of the
aisle – and they who in the end must be overthrown by
public protest and revolution.
No different to many times in history – it’s us
against the robber barons……….
Avoiding a Catastrophic War with Iran
by Nathaniel Batchelder, Common
Dreams, 1/22/2012
Pray cooler heads will guide America in the dialogue
and decision-making over Iran’s position in the world.
Iran does not have nuclear weapons, and there is no
certain evidence that such a program is under way.
Certainly Iran has the right to the peaceful use of
nuclear energy, and the interests of world peace demand
that these issues be resolved without military action
that could launch a catastrophic war.
Another war would destroy America’s painful recovery from the
indebtedness of two wars and the 2008 economic crash.
Gasoline prices would probably go up another dollar per
gallon. The Iraq and Afghanistan war’s final costs will
exceed $2 trillion. Some estimates say $4 trillion, or
even $6 trillion, including lifelong care for veterans
physically or emotionally disabled.
Iran has four times the population of Iraq, many times the
military capability, and would seek support from other
nations like Russia and China, possibly sparking an
unpredictable regional war.
Political hawks and shock-jocks on talk radio condemn calls
for negotiations and dialogue to resolve such matters
without military action as weakness. The U.S. spends as
much on military preparedness as the rest of the world
combined, so no one can doubt America’s capacity to wage
war. It is shocking that the theme song of one national
talk show host states, "We’ll put a boot up your ass,
it’s the American way."
The world does not find this amusing or appealing.
More than six thousand American families grieve the deaths of
sons and daughters in the Iraq and Afghanistan
conflicts. More than 30,000 U.S. troops have been
physically wounded in action, and untold numbers have
returned home emotionally and physically disabled.
Suicides of war veterans each month exceed combat
deaths.
Official estimates of some 100,000 deaths in Iraq and 20,000
in Afghanistan are considered low by other calculations.
The British polling group Opinion Research Business
(ORB) has estimated Iraqi deaths at closer to one
million, with some 5 million becoming displaced refuges
who are homeless or have left the country.
Many believe our wars in the Middle East are breeding
resentments that will last lifetimes.
War brings big profits to military contractors and oil
companies that simply raise their prices. Everyone else
pays dearly, in dollars, lives and blood.
The people of Iran are not well served by having a bellicose
posturing leader in Mahmoud Ahmadinejad. Cowboy
professions of toughness are usually hot air, appealing
to the pride of some, but are not helpful to the
interests’ of peace. The vast majority of humanity
desperately hopes for negotiated resolutions to
political tensions to avoid war and its deaths and
destruction that ruin lives and wreck economies.
The United States must lead the world in calling for cooler
rhetoric and civil dialogue by all nations in the Iran
discussion. Israel particularly must relax its rhetoric,
confident that its close alliance with the United States
and its own arsenal of (undeclared) nuclear weapons
renders it a muscular regional power whose sovereignty
is unquestioned.
War truly is hell, as the conflicts in Iraq and Afghanistan
remind us too well. Let’s remember that the terrible
attacks on America of 9/11, 2001, were not from a
nation, but from an alliance of individuals from many
nations, most prominently Saudi Arabia. The U.S. attack
on Iraq is now admittedly blamed on “faulty
intelligence,” misinformation and miscalculation. Vice
President Dick Cheney predicted that the Iraq war would
last six weeks and that U.S. forces would be welcomed
with flowers as liberators.
All Americans opposed to another war must stand behind
leaders seeking nonviolent resolutions to world
situations that could blow up into wars that would wreck
our economy, raise oil prices, profit only a few, and
cause incalculable suffering everywhere, while we
taxpayers foot the bill.
Attacking Iran
would be a formula for disaster, which is probably -
hopefully - why it will never happen.
The Wealth Gap - Inequality in Numbers
Protests have highlighted the inequality debate
Until protestors took to the streets last year, first in
New York and then in financial centres across the world,
inequality had been a low-key issue.
Not any more.
With the political temperature rising, a stream of new
analysis is revealing how sharply inequality has been
growing.
In October, the US Congressional Budget Office (CBO)
caused a storm by revealing how big a slice of income
gains since the late 1970s had gone to the richest 1% of
households.
The message was dramatic.
Over the 28 years covered by the CBO study, US incomes
had increased overall by 62%, allowing for tax and
inflation.
But the lowest paid fifth of Americans had got only a
small share of that: their incomes had grown by a modest
18%.
Growth in real after-tax income, 1979-2007
|
||||
|
Income Groups
|
0-20%
|
21-80%
|
81-99%
|
Top 1%
|
|
Source: US Congressional Budget Office, Oct 2011 |
||||
|
Income increase |
18% |
37% |
65% |
275% |
Middle income households were also well below the
overall average with gains of just 37%.
And even the majority of America's richest households
saw gains of barely above the overall average at 67%.
How does that make sense?
Because the CBO found most of the income gains over the
past 30 years had gone to the top 1% of US households.
Their incomes had almost trebled with rises of 275%.
In Britain, Danny Dorling, professor of human geography
at Sheffield University, has looked back even further
into history. He's charted the share of national income
going to the richest 1% since 1918, the end of World War
I.
After falling for more than half a century, Prof Dorling
says, the share of Britain's richest 1% started rising
sharply and inequality is now on course to return to
what it was in 1918.
Even within the richest 1%, inequalities are now
enormous.
At the lower end of this tiny group of high earners,
Prof Dorling says you find people earning £120,000 a
year.
But the richest thousand individuals leave them far
behind.
They saw their wealth increase on average in 2010 alone
by £60m. That was a 20% gain, following 25% the previous
year.
In November, the revelation of the size of the increases
enjoyed by chief executives of the 100 largest companies
on the London Stock Exchange triggered the most
political anger.
The High Pay Commission reported that these executives'
total pay had risen by 49% during the previous year
alone, compared with average increases of less than 3%
for their employees.
The rise left the chief executives with average pay of
£4.2m. That was 145 times the average pay of their
employees and 162 times the British average wage.
Responding to the High Pay Commission report, Prime
Minister David Cameron this month promised government
moves against undeserved high pay awards.
Internationally, vastly more information on incomes is
now readily available.
Last year, the Paris School of Economics launched an
ambitious project:
the World Top Incomes Database, providing
resources online to allow anyone to examine income
inequality.
For The Wealth Gap series, we used that data to examine
pay at the very top of the British income scale between
1997 and 2007. We then compared that with the average
income of the vast majority - represented by the bottom
90%.
This simple analysis reveals striking differences
between the rich and most of the rest of the population.
In 1997, the entire bottom 90% had average income of
just over £10,500. The top 1% had incomes 18 times
bigger.
At the very top - the top 10th of one percent - the
multiple was far higher. In 1997, their income was more
than 60 times the average of the bottom 90%.
Ten years later, that gap had widened significantly.
By 2007 the average income of the bottom 90% was just
under £12,500 a year, but the income of the top tenth of
a percent was now 95 times as large, averaging well over
£1m a year.
The squeeze on British middle income earners is now
regularly analysed by a new independent think tank: the
Resolution Foundation.
The Institute for Fiscal Studies offers an
online tool that allows people in Britain to
estimate where they fit on the inequality scale.
It's not just inequality that is now being studied; so
are its potential consequences.
In what has become a policymaker's must-read,
epidemiologists
Richard Wilkinson and Kate Pickett claim to
have discovered that, across developed countries, the
greater the income inequality in any country, the worse
the health and social outcomes for everyone: rich and
poor.
Such analysis has triggered a wide-ranging debate about
the broader social and economic consequences of greater
income inequality.
Some now argue that it's a cause of financial
instability as the international super-rich shift their
wealth around the world, increasing volatility in the
price of gold, equities, government debt or basic
commodities such as copper and grain.
In Britain, the estate agency Savills has charted the
inflow of money from the international super-rich into
prime London property.
Savills believes this inflow is the key reason why
London property prices have gone on rising while the
market in much of the rest of Britain is stagnant or
falling.
And it's not only the top-of-the-market property that is
affected. As price rises at the top of the market ripple
across the rest of the city, even first-time buyers
earning well above average incomes have found themselves
priced out of the market.
Awareness of inequality and its consequences has
triggered increased political debate in Britain and
elsewhere.
But politicians and policymakers may not find it easy to reverse the trend of the past 30 years.
------------------------------------------------------------------
10 Reasons the US is No Longer the Land of the Free
by
Jonathan Turley, The Washington Post, 1/14/12
Every year, the State Department issues reports on
individual rights in other countries, monitoring the
passage of restrictive laws and regulations around the
world. Iran, for example, has been criticized for
denying fair public trials and limiting privacy, while
Russia has been taken to task for undermining due
process. Other countries have been condemned for the use
of secret evidence and torture.
Even as we pass judgment on countries we consider
unfree, Americans remain confident that any definition
of a free nation must include their own — the land of
free. Yet, the laws and practices of the land should
shake that confidence. In the decade since Sept. 11,
2001, this country has comprehensively reduced civil
liberties in the name of an expanded security state. The
most recent example of this was the National Defense
Authorization Act, signed Dec. 31, which allows for the
indefinite detention of citizens. At what point does the
reduction of individual rights in our country change how
we define ourselves?
While each new national security power Washington has
embraced was controversial when enacted, they are often
discussed in isolation. But they don’t operate in
isolation. They form a mosaic of powers under which our
country could be considered, at least in part,
authoritarian. Americans often proclaim our nation as a
symbol of freedom to the world while dismissing nations
such as Cuba and China as categorically unfree. Yet,
objectively, we may be only half right. Those countries
do lack basic individual rights such as due process,
placing them outside any reasonable definition of
“free,” but the United States now has much more in
common with such regimes than anyone may like to admit.
These countries also have constitutions that purport to
guarantee freedoms and rights. But their governments
have broad discretion in denying those rights and few
real avenues for challenges by citizens — precisely the
problem with the new laws in this country.
The list of powers acquired by the U.S. government since
9/11 puts us in rather troubling company.
Assassination of U.S. citizens
President Obama has claimed, as President George W. Bush
did before him, the right to order the killing of any
citizen considered a terrorist or an abettor of
terrorism. Last year, he approved the killing of U.S.
citizen Anwar al-Awlaqi and another citizen under this
claimed inherent authority. Last month, administration
officials affirmed that power, stating that the
president can order the assassination of any citizen
whom he considers allied with terrorists. (Nations such
as Nigeria, Iran and Syria have been routinely
criticized for extrajudicial killings of enemies of the
state.)
Indefinite detention
Under the law signed last month, terrorism suspects are
to be held by the military; the president also has the
authority to indefinitely detain citizens accused of
terrorism. While the administration claims that this
provision only codified existing law, experts widely
contest this view, and the administration has opposed
efforts to challenge such authority in federal courts.
The government continues to claim the right to strip
citizens of legal protections based on its sole
discretion. (China recently codified a more limited
detention law for its citizens, while countries such as
Cambodia have been singled out by the United States for
“prolonged detention.”)
Arbitrary justice
The president now decides whether a person will receive
a trial in the federal courts or in a military tribunal,
a system that has been ridiculed around the world for
lacking basic due process protections. Bush claimed this
authority in 2001, and Obama has continued the practice.
(Egypt and China have been denounced for maintaining
separate military justice systems for selected
defendants, including civilians.)
Warrantless searches
The president may now order warrantless surveillance,
including a new capability to force companies and
organizations to turn over information on citizens’
finances, communications and associations. Bush acquired
this sweeping power under the Patriot Act in 2001, and
in 2011, Obama extended the power, including searches of
everything from business documents to library records.
The government can use “national security letters” to
demand, without probable cause, that organizations turn
over information on citizens — and order them not to
reveal the disclosure to the affected party. (Saudi
Arabia and Pakistan operate under laws that allow the
government to engage in widespread discretionary
surveillance.)
Secret evidence
The government now routinely uses secret evidence to
detain individuals and employs secret evidence in
federal and military courts. It also forces the
dismissal of cases against the United States by simply
filing declarations that the cases would make the
government reveal classified information that would harm
national security — a claim made in a variety of privacy
lawsuits and largely accepted by federal judges without
question. Even legal opinions, cited as the basis for
the government’s actions under the Bush and Obama
administrations, have been classified. This allows the
government to claim secret legal arguments to support
secret proceedings using secret evidence. In addition,
some cases never make it to court at all. The federal
courts routinely deny constitutional challenges to
policies and programs under a narrow definition of
standing to bring a case.
War crimes
The world clamored for prosecutions of those responsible
for waterboarding terrorism suspects during the Bush
administration, but the Obama administration said in
2009 that it would not allow CIA employees to be
investigated or prosecuted for such actions. This gutted
not just treaty obligations but the Nuremberg principles
of international law. When courts in countries such as
Spain moved to investigate Bush officials for war
crimes, the Obama administration reportedly urged
foreign officials not to allow such cases to proceed,
despite the fact that the United States has long claimed
the same authority with regard to alleged war criminals
in other countries. (Various nations have resisted
investigations of officials accused of war crimes and
torture. Some, such as Serbia and Chile, eventually
relented to comply with international law; countries
that have denied independent investigations include
Iran, Syria and China.)
Secret court
The government has increased its use of the secret
Foreign Intelligence Surveillance Court, which has
expanded its secret warrants to include individuals
deemed to be aiding or abetting hostile foreign
governments or organizations. In 2011, Obama renewed
these powers, including allowing secret searches of
individuals who are not part of an identifiable
terrorist group. The administration has asserted the
right to ignore congressional limits on such
surveillance. (Pakistan places national security
surveillance under the unchecked powers of the military
or intelligence services.)
Immunity from judicial review
Like the Bush administration, the Obama administration
has successfully pushed for immunity for companies that
assist in warrantless surveillance of citizens, blocking
the ability of citizens to challenge the violation of
privacy. (Similarly, China has maintained sweeping
immunity claims both inside and outside the country and
routinely blocks lawsuits against private companies.)
Continual monitoring of citizens
The Obama administration has successfully defended its
claim that it can use GPS devices to monitor every move
of targeted citizens without securing any court order or
review. (Saudi Arabia has installed massive public
surveillance systems, while Cuba is notorious for active
monitoring of selected citizens.)
Extraordinary renditions
The government now has the ability to transfer both
citizens and noncitizens to another country under a
system known as extraordinary rendition, which has been
denounced as using other countries, such as Syria, Saudi
Arabia, Egypt and Pakistan, to torture suspects. The
Obama administration says it is not continuing the
abuses of this practice under Bush, but it insists on
the unfettered right to order such transfers — including
the possible transfer of U.S. citizens.
These new laws have come with an infusion of money into
an expanded security system on the state and federal
levels, including more public surveillance cameras, tens
of thousands of security personnel and a massive
expansion of a terrorist-chasing bureaucracy.
Some politicians shrug and say these increased powers
are merely a response to the times we live in. Thus,
Sen. Lindsey Graham (R-S.C.) could declare in an
interview last spring without objection that “free
speech is a great idea, but we’re in a war.” Of course,
terrorism will never “surrender” and end this particular
“war.”
Other politicians rationalize that, while such powers
may exist, it really comes down to how they are used.
This is a common response by liberals who cannot bring
themselves to denounce Obama as they did Bush. Sen. Carl
Levin (D-Mich.), for instance, has insisted that
Congress is not making any decision on indefinite
detention: “That is a decision which we leave where it
belongs — in the executive branch.”
And in a signing statement with the defense
authorization bill, Obama said he does not intend to use
the latest power to indefinitely imprison citizens. Yet,
he still accepted the power as a sort of regretful
autocrat.
An authoritarian nation is defined not just by the use
of authoritarian powers, but by the ability to use them.
If a president can take away your freedom or your life
on his own authority, all rights become little more than
a discretionary grant subject to executive will.
The framers lived under autocratic rule and understood
this danger better than we do. James Madison famously
warned that we needed a system that did not depend on
the good intentions or motivations of our rulers: “If
men were angels, no government would be necessary.”
Benjamin Franklin was more direct. In 1787, a Mrs. Powel
confronted Franklin after the signing of the
Constitution and asked, “Well, Doctor, what have we got
— a republic or a monarchy?” His response was a bit
chilling: “A republic, Madam, if you can keep it.”
Since 9/11, we have created the very government the
framers feared: a government with sweeping and largely
unchecked powers resting on the hope that they will be
used wisely.
The indefinite-detention provision in the defense
authorization bill seemed to many civil libertarians
like a betrayal by Obama. While the president had
promised to veto the law over that provision, Levin, a
sponsor of the bill, disclosed on the Senate floor that
it was in fact the White House that approved the removal
of any exception for citizens from indefinite detention.
Dishonesty from politicians is nothing new for Americans. The real question is whether we are lying to ourselves when we call this country the land of the free.
---------------------------------------------------------------------
Wars Without Victory Equal an America Without Influence
For all its military might, the US has failed to get its
way in Afghanistan and Iraq, severely denting the
prestige of the world's only superpower
by Patrick Cockburn, The
Independent UK, 12/11/11
The last American troops will withdraw from Iraq in the next three weeks. President Obama and Iraq's Prime Minister, Nouri al-Maliki, will meet tomorrow in Washington so they can claim that the US emerges from the conflict unweakened and leaves behind an increasingly stable, democratic and prosperous Iraq.
This is
misleading spin, carefully orchestrated to allow Mr
Obama to move into the presidential election year
boasting that he has ended an unpopular war without
suffering a defeat. We already had a foretaste of this a
couple of weeks ago, when Vice President Joe Biden
visited Baghdad to laud US achievements.
Over
the years, Iraqis have become used to heavily guarded
foreign dignitaries arriving secretly in Baghdad to
claim great progress on all fronts before scurrying home
again. But even by these lowly standards, Mr Biden's
performance sounded comically inept. "It was the usual
Biden menu of gaffe, humour and pomposity delivered with
unmistakable self-confidence and no particular regard
for the facts on the ground," writes the Iraq expert
Reidar Visser. Mr Biden even tried to win the hearts of
Iraqis by referring to the US achievement in building
hospitals in Baku, the capital of Azerbaijan on the
Caspian Sea, a city he apparently believes is located
somewhere in Iraq.
Republican candidates in the presidential election have
been denigrated and discredited by gaffes like this. It
is a measure of Mr Biden's reputation for overlong,
tedious speeches that the US media did not notice his
ignorance of Middle East geography. Dr Visser points out
that "when Biden says 'we were able to turn lemons into
lemonade', refers to 'a political culture based on free
elections and the rule of law', and even highlights
'Iraq's emerging, inclusive political culture as the
ultimate guarantor of stability', he is simply making
things up." Sadly, Iraq is a much divided wreck of a
country.
In
reality, America's failure to get its way in Iraq and
Afghanistan over the past decade, despite deploying
large armies and spending trillions of dollars, has been
extraordinarily damaging to its status as sole
superpower. Whatever Washington thought it wanted when
it invaded Iraq in 2003, it was not the establishment of
Shia religious parties with links to Iran in power in
Baghdad. Similarly, in Afghanistan, a surge in US troop
numbers and the expenditure of $100bn a year has not led
to the defeat of 25,000 mostly untrained Taliban
fighters.
Great
powers depend on a reputation for invincibility and are
wise not to put this too often to the test. The British
Empire never quite recovered in the eyes of the world
from the gargantuan effort it had to make to defeat a
few tens of thousand Boer farmers.
What
makes the US inability to win in Iraq and Afghanistan so
damaging is that US policy-making has been progressively
militarised. Congress will vote the Pentagon vast sums,
while it stints the State Department a few billion
dollars. "The Department of Defense is the behemoth
among federal agencies," noted the 9/11 Commission
Report. "With an annual budget larger than the gross
domestic product of Russia, it is an empire."
But it
is an empire that has failed to deliver in recent years,
though without paying a political price. A senior US
diplomat asked me plaintively several years ago:
"Whatever happened to popular scepticism about what
generals say that we had after Vietnam? People seem to
assume they are telling the truth ... they are usually
not."
This is
equally true of the British Army, though the British
military record in Basra and Helmand was even more
dismal than that of the Americans. (The system of
embedding the media with the Army has played an
important role in safeguarding the military from
well-earned criticism.)
For all
Mr Obama's agonising about sending more troops to
Afghanistan in 2009, he never had much choice. Leon
Panetta, then CIA chief and now Defense Secretary, was
contemptuous about the time spent by the White House
debating troop reinforcements. He said the political
reality was that "No Democratic president can go against
military advice, especially if he asked for it. So just
do it." Mr Panetta believed that a decision on the extra
30,000 troops for Afghanistan should have been taken in
a week.
The
killing of Osama bin Laden and the failure of the
military to defeat the Taliban has improved the
administration's ability to disengage from Afghanistan.
It does not look likely that in a presidential election
year, after getting out of Iraq and hoping to do the
same in Afghanistan, the US will launch a war against
Iran. In the US and Israel there are few votes to be
lost in talking tough about Iran, but voters are much
less enthusiastic about actually going to war with a
stronger opponent than the US ever faced in Iraq or
Afghanistan, or Israel in Lebanon.
In the
worst economic crisis since the 1930s, the rest of the
world is not going to thank the US or Israel for
starting a conflict that would close the Strait of
Hormuz and send up the price of oil. It would also be
difficult to de-escalate such a confrontation because it
serves domestic electoral purposes in Washington, Tel
Aviv and Tehran alike. Americans, Israelis and Iranians
all define their self-image in terms of opposition to
demonic enemies. Any compromise is vulnerable to being
sabotaged by domestic political rivals as a deal with
the devil.
Overall, US influence is ebbing in the Middle East. For
all Mr Biden's talking up, the Iraq war was a disaster
for the US. Similarly in Afghanistan, massive military
force has produced meagre political dividends.
Washington may rejoice that Muammar Gaddafi is gone and
Bashar al-Assad may follow him. But the US has lost or
is losing its paramount position in Turkey and Egypt as
the military establishments of these countries lose
control.
The
political crisis provoked by the Arab Awakening across
the Middle East is not dying away. If anything it is
deepening as struggles for power intensify in Egypt and
Syria and even Saudi Arabia. The outcome of the Libyan
civil war may encourage limited foreign intervention,
but the ongoing economic crisis makes it riskier for the
US or European powers to become involved in wars they
cannot see the end of.
The
great success of General David Petraeus as US commander
in Iraq was to persuade many Americans that they had won
when they had not. He also convinced them that the war
had ended, when it had not, because many fewer Americans
were being killed. In practice, the verdict of Iraq is
likely to hang over US foreign policy for a long time to
come. The war may not have had a clear winner, but it
showed that superior military force no longer easily
translates into political victory.
The Remarkable Political Stupidity of the Street
by Robert Reich, 12/10/11
Wall
Street is its own worst enemy. It should have welcomed
new financial regulation as a means of restoring public
trust. Instead, it’s busily shredding new regulations
and making the public more distrustful than ever.
The
Street’s biggest lobbying groups have just filed a
lawsuit against the Commodities Futures Trading
Commission, seeking to overturn its new rule limiting
speculative trading.
For
years Wall Street has speculated like mad in futures
markets – food, oil, other commodities – causing prices
to fluctuate wildly. The Street makes bundles from these
gyrations, but they have raised costs for consumers.
In
other words, a small portion of what you and I pay for
food and energy has been going into the pockets of Wall
Street. It’s just another hidden redistribution from the
middle class and poor to the rich.
The new
Dodd-Frank law authorizes the Commodity Futures Trading
Commission to limit such speculative trading. The
commission considered 15,000 comments, largely from the
Street. It did numerous economic and policy analyses,
carefully weighing the benefits to the public of the new
regulation against its costs to the Street. It even
agreed to delay enforcement of the new rule for at least
a year.
But
this wasn’t enough for the Street. The new regulation
would still put a crimp in Wall Street’s profits.
So the
Street is going to court. What’s its argument? The
commission’s cost-benefit analysis wasn’t adequate.
At
first blush it’s a clever ploy. There’s no clear legal
standard for an “adequate” weighing of costs and
benefits of financial regulations, since both are so
difficult to measure. And putting the question into the
laps of federal judges gives the Street a huge tactical
advantage because the Street has almost an infinite
amount of money to hire so-called “experts” (some
academics are not exactly prostitutes but they have
their price) who will use elaborate methodologies to
show benefits have been exaggerated and costs
underestimated.
It’s
not the first time the Street has used this ploy. Last
year, when the Securities and Exchange Commission tried
to implement a Dodd-Frank policy making it easier for
shareholders to nominate company directors, Wall Street
sued the SEC. It alleged the commission’s cost-benefit
analysis for the new rule was inadequate.
Last
July, a federal appeals court – inundated by Wall Street
lawyers and hired-gun “experts” – agreed with the
Street. So much for shareholders nominating company
directors.
Obviously, government should weigh the costs against the
benefits of anything it does. But when it comes to the
regulation of Wall Street, one overriding cost doesn’t
make it into any individual weighing: The public’s
mounting distrust of the entire economic system,
generated by the Street’s repeated abuse of the public’s
trust.
Wall
Street’s shenanigans have convinced a large portion of
America that the economic game is rigged.
Yet
capitalism depends on trust. Without trust, people avoid
even sensible economic risks. They also begin trading in
gray markets and black markets. They think that if the
big guys cheat in big ways, they might as well begin
cheating in small ways. And when they think the game is
rigged, they’re easy prey for political demagogues with
fast tongues and dumb ideas.
Tally
up these costs and it’s a whopper.
Wall
Street has blanketed America in a miasma of cynicism.
Most Americans assume the reason the Street got its
taxpayer-funded bailout without strings in the first
place was because of its political clout. That must be
why the banks didn’t have to renegotiate the mortgages
of Americans – many of whom, because of the economic
collapse brought on by the Street’s excesses, are still
under water. Some are drowning.
That
must be why taxpayers didn’t get equity stakes in the
banks we bailed out – as Warren Buffet got when he
bailed out Goldman Sachs. That means when the banks
became profitable gain we didn’t get any of the upside
gains; we just padded the Street’s downside risks.
The
Street’s political clout must be why most top Wall
Street executives who were bailed out by taxpayers still
have their jobs, have still avoided prosecution, are
still making vast fortunes – while tens of millions of
average Americans continue to lose their jobs, their
wages, their medical coverage, or their homes.
And why
the Dodd-Frank bill was filled with loopholes big enough
for Wall Street executives and traders to drive their
ferrari’s through.
The
cost of such cynicism has leeched deep into America,
causing so much suspicion and anger that our politics
has become a cauldron of rage. It’s found expression in
Tea Partiers and Occupiers, and millions of others who
think the people at the top have sold us out.
Every
week, it seems, we learn something new about how Wall
Street has screwed us. Last week we heard from Bloomberg
News (that had to go to court for the information) that
in 2009 the Street’s six largest banks borrowed almost
half a trillion dollars from the Fed at nearly zero cost
– but never disclosed it.
In
early 2009, after Citigroup tapped the Fed for almost
$100 billion, the bank’s CEO, Vikram Pandit, had the
temerity to call Citi’s first quarter the “best since
2007.” Is there another word for fraud?
Finally, everyone knows the biggest banks are too big to
fail — and yet, despite this, Congress won’t put a cap
on the size of the banks. The assets of the four biggest
– J.P. Morgan Chase, Bank of America, Citigroup, and
Wells Fargo – now equal 62 percent of total commercial
bank assets. That’s up from 54 percent five years ago.
Throw in Goldman Sachs and Morgan Stanley, and these six
leviathans preside over the American economy like Roman
emperors.
Speaking of Rome, if Italy or Greece defaults and
Europe’s major banks can’t make payments on their debts
to Wall Street, another bailout will surely be required.
And the politics won’t be pretty.
There
you have it. A federal court will now weigh costs and
benefits of a modest rule designed to limit speculative
trading in food and energy.
But in
coming months and years, the American public will weigh
the social costs and social benefits of Wall Street
itself. And it wouldn’t surprise me if they decide the
costs of the Street as it is far outweigh the benefits.
The
result will be caps on the size of banks. Some will be
broken up. Glass-Steagall will be resurrected. Some Wall
Street bigwigs may even see in the insides of jails.
-------------------------------------------------------
Government-Sponsored Sinner
by Robert Scheer, TruthDig,
12/8/11
Who would have thought that Republican
voters would prove so accepting of sin? At least when
its committed by a white guy, like the serial
philanderer Newt Gingrich, who betrayed not one but two
wives while they were enduring serious medical
difficulties.
In the latest New York Times/CBS poll of Iowa Republicans,
alleged philanderer Herman Cain’s once impressive
support shifts to the new front-runner, Gingrich, whose
richer history of marital deceit is not a problem even
for the self-described evangelical Christian voters who
favor him over Mitt Romney by a ratio of 3-1.
It is the first time that I have felt sympathy for a
candidate experiencing the prejudice directed at a
practicing Mormon. Clearly the ultimate of “squeaky
clean” doesn’t cut it for a presidential contender of
that faith among Republican Christian “values voters,”
even when he is compared with a sexual roué of
Gingrich’s considerable magnitude.
Or perhaps it is Newt’s peerless capacity to mask moral
hypocrisy with the appearance of religious propriety,
first as a Protestant and now as a Roman Catholic, that
endears him to other Republicans who wear their religion
on their sleeves. Many of those were willing to tear the
country apart over the sexual wanderings of a Democrat
in the White House, but now they are quite willing to
send someone of Gingrich’s reputation to the Oval
Office. We are speaking of a politician who was having
an extramarital affair with a congressional staff member
27 years his junior, now more appropriately his third
wife, during the very years when he was so energetically
stoking the Clinton sex scandal.
But Newt did manage to cooperate closely with the Democratic
president in passing the “welfare reform” legislation
that in effect ended the main federal poverty program.
Given that 70 percent of those covered by the gutted
welfare program were children, it is at least consistent
that the former House speaker now favors further aiding
those children by wiping out the long-standing
restraints on the exploitation of child labor.
Gingrich also cooperated successfully with President Clinton
on the Taxpayer Relief Act of 1997, which legislated
drastic cuts in the capital gains tax benefiting the
wealthy. In addition, he was a great partner for Clinton
in whipping up enthusiasm for a broader agenda of
deregulation that set the stage for the housing mortgage
bubble and resultant Great Recession. It is Gingrich’s
hypocrisy concerning these economic matters that will
prove more troubling as his chances of becoming
president increase.
Given that Gingrich was on the payroll of Freddie Mac to the
tune of $1.6 million, how in the world will he be able,
in a one-on-one debate with Barack Obama, to logically
make what has become the standard Republican case: that
it was liberal do-gooders at the government-sponsored
enterprises (GSEs) Fannie Mae and Freddie Mac who forced
the banks to make bad housing loans?
The honest answer, politically awkward of course, would be to
admit that those agencies were government sponsored only
on the risk end, and as for profit entities they were
owned and traded by investors in the stock market. They
got in trouble for the same reason Citigroup did,
because the obscenely huge bonuses of their top
executives were driven by their profit performance and
not the quality of the home mortgages they backed.
The packaging of hugely profitable but eventually toxic
mortgage securities, with the GSE seal of approval, that
is at the heart of the economic crisis was the result of
a Republican-engineered deregulatory mania that Newt
abetted and Clinton supported. A mania that Sen. Obama
criticized, but not Gingrich, who was a highly paid
booster for Freddie Mac even as the housing market was
imploding.
The private/public GSE model of the two housing agencies in
which the risk but not the profits was carried by the
public is the very arrangement that Gingrich is on
record as celebrating as late as 2007 when the crisis
was visibly under way. Gingrich favored it as a model
not just for housing but even the space program. “I’m
convinced that if NASA were a GSE, we probably would be
on Mars today,” he declared in a post on the Freddie Mac
website on April 14, 2007.
Although Gingrich now claims that when he was on the Freddie
Mac gravy train he was simply giving objective advice as
a “historian” that sought to improve the agency’s
performance, the truth is quite the opposite. Obama will
no doubt delight in quoting back to Gingrich his
assertion that “while we need to improve the regulation
of the GSEs, I would be very cautious about changing
their role or the model itself.”
Gingrich, who ran into trouble with the House Ethics
Committee when was speaker and paid a $300,000 fine, is
himself a variant of a GSE, having turned his government
backing into a hugely profitable enterprise. After he
left office his various personal business enterprises
had revenues of about $100 million. Last week in South
Carolina, Gingrich scoffed at the idea that he needed to
work as a lobbyist; after all, he noted, he is paid
$60,000 a speech.
You would think that with a sorry
personal and political record like Gingrich’s—and there
is so much more—the Republicans would never nominate him
as their presidential candidate if they expected to win.
But I wouldn’t rule it out, for the driving faith of the
GOP has become the notion that the toxic mixture of
moral hypocrisy and unfettered greed is a formula for
victory. Newt could be their man.
Six Demands to Make of Wall Street
by Senator
Bernie Sanders, Common Dreams, 10/12/11
The
Occupy Wall Street protests are shining a national
spotlight on the most powerful, dangerous, and secretive
economic and political force in America.
If this
country is to break out of the horrendous recession and
create the millions of jobs we desperately need, if we
are going to create a modicum of financial stability for
the future, there is no question but that the American
people are going to have to take a very hard look at
Wall Street and demand fundamental reforms. I hope these
protests are the beginning of that process.
Let us
never forget that as a result of the greed,
recklessness, and illegal behavior on Wall Street, this
country was plunged into the worst economic downturn
since the Great Depression. Millions of Americans lost
their jobs, homes, and life savings as the middle class
underwent an unprecedented collapse. Sadly, despite all
the suffering caused by Wall Street, there is no reason
to believe that the major financial institutions have
changed their ways, or that future financial disasters
and bailouts will not happen again.
More
than three years ago, Congress rewarded Wall Street with
the biggest taxpayer bailout in the history of the
world. Simultaneously but unknown to the American people
at the time, the Federal Reserve provided an even larger
bailout. The details of what the Fed did were kept
secret until a provision in the Dodd-Frank Act that I
sponsored required the Government Accountability Office
to audit the Fed’s lending programs during the financial
crisis.
As a
result of this audit, the American people have learned
that the Federal Reserve provided more than $16 trillion
in low-interest loans to every major financial
institution in this country, huge foreign banks,
multi-national corporations, and some of the wealthiest
people in the world.
In
other words, when Wall Street was on the verge of
collapse, the federal government acted boldly,
aggressively, and with a fierce sense of urgency to save
our financial system from collapse with no strings
attached.
Now
that the middle class is collapsing and a
record-breaking 46 million Americans are living in
poverty, the Federal Reserve has failed to act with the
same sense of urgency to make sure that small businesses
receive the affordable loans needed to put millions of
Americans back to work and prevent millions of Americans
from losing their homes.
As a
result, Wall Street is back to making record-breaking
profits, handing out record-breaking compensation
packages, and taking the same risks that caused the
financial crisis in the first place. Meanwhile, 25
million Americans are unemployed or under-employed;
middle class families are making $3,600 less than they
did ten years ago; the foreclosure rate is still
breaking new records; and the American people are still
paying over $3.40 for a gallon of gas.
The
financial crisis and the jobs crisis have demonstrated
to the American people that we now have a government
that is of the 1 percent, by the 1 percent and for the 1
percent, as Nobel Prize winning economist Joseph
Stiglitz eloquently articulated. The rest of the 99
percent are, more or less, on their own. We now have the
most unequal distribution of wealth and income of any
major, advanced country on earth. The top one percent
earn more income than the bottom 50 percent and the
richest 400 Americans own more wealth than the bottom
150 million Americans.
Now
that Occupy Wall Street is shining a spot light against
Wall Street greed and the enormous inequalities that
exist in America, the question then becomes, how do we
change the political, economic and financial system to
work for all Americans, not just the top 1 percent?
Here
are several proposals that I am working on:
1) If a financial institution is too big to fail, it is
too big to exist. Today, the
six largest financial institutions have assets equal to
more than 60 percent of GDP. The four largest banks in
this country issue two-thirds of all credit cards, half
of all mortgages, and hold nearly 40 percent of all bank
deposits. Incredibly, after we bailed out these big
banks because they were "too big to fail," three out of
the four largest are now even bigger than they were
before the financial crisis began. It is time to take a
page from Teddy Roosevelt and break up these behemoths
so that their failure will no longer lead to economic
catastrophe and to create competition in our financial
system.
2) Put a cap on credit card interest rates to end usury. Today, more than a quarter of all credit card holders in
this country are paying interest rates above 20 percent
and as high as 59 percent. When credit card companies
charge 25 or 30 percent interest rates they are not
engaged in the business of “making credit available” to
their customers. They are involved in extortion and
loan-sharking. Citigroup, Bank of America, and JP Morgan
Chase should not be permitted to charge consumers 25-30
percent interest on their credit cards, especially while
these banks received over $4 trillion in loans from the
Federal Reserve.
3) The Federal Reserve needs to provide small businesses
in America with the same low-interest loans it gave to
foreign banks. During the financial crisis, the Federal Reserve provided
hundreds of billions of dollars to foreign banks and
corporations including the Arab Banking Corporation,
Toyota, Mitsubishi, the Korea Development Bank, and the
state-owned Bank of Bavaria. At a time when small
businesses can't get the lending they need, it is time
for the Fed to create millions of American jobs by
providing low-interest loans directly to small
businesses.
4) Stop Wall Street oil speculators from artificially
increasing gasoline and heating oil prices. Right now, the American people are being gouged at the gas pump by
speculators on Wall Street who are buying and selling
billions of barrels of oil in the energy futures market
with no intention of using a drop for any purpose other
than to make a quick buck. Delta Airlines, Exxon Mobil,
the American Trucking Association, and other energy
experts have estimated that excessive oil speculation is
driving up oil prices by as much as 40 percent. We have
got to end excessive oil speculation and bring needed
relief to American consumers.
5) Demand that Wall Street invest in the job-creating
productive economy, instead of gambling on worthless
derivatives.
The American people have got to make it crystal clear to
Wall Street that the era of excessive speculation is
over. The “heads, bankers win; tails, everyone else
loses” financial system must end. Most important, we
need to create a new Wall Street that exists not to
reward CEOs and investors for the bets they make on
exotic financial instruments nobody understands. Rather,
we need a Wall Street that provides financial services
to small businesses and manufacturers to create
decent-paying jobs and grow the economy by productive
means. Think of all of the productive short- and
long-term investments that could be made in our country
right now if Wall Street used the money it has received
from the federal government wisely. Instead of
casino-style speculation, Wall Street could invest in
high-speed trains; fuel-efficient cars; wind turbines
and other alternative energy sources; affordable
housing; affordable prescription drugs that save
people’s lives; and other things that America
desperately needs. That is what we have got to demand
from Wall Street.
6) Establish a Wall Street speculation fee on credit
default swaps, derivatives, stock options and futures. Both the economic crisis and the deficit crisis are a
direct result of the greed and recklessness on Wall
Street. Establishing a speculation fee would reduce
gambling on Wall Street, encourage the financial sector
to invest in the productive economy, and significantly
reduce the deficit without harming average Americans.
There are a number of precedents for this. The U.S had a
similar Wall Street speculation fee from 1914 to 1966.
The Revenue Act of 1914 levied a 0.2 percent tax on all
sales or transfers of stock. In 1932, Congress more than
doubled that tax to help finance the government during
the Great Depression. And today, England has a financial
transaction tax of 0.25 percent, a penny on every $4
invested.
Making
these reforms will not be easy. After all, Wall Street
is clearly the most powerful lobbying force on Capitol
Hill. From 1998 through 2008, the financial sector spent
over $5 billion in lobbying and campaign contributions
to deregulate Wall Street. More recently, they spent
hundreds of millions more to make the Dodd-Frank bill as
weak as possible, and after its passage, hundreds of
millions more to roll back or dilute the stronger
provisions in that legislation.
Editors
Note:
These six demands are all perfectly
reasonable and justified but there is a snag.
Not a chance that the US Congress will
even discuss them, let alone vote for them. People just
won’t admit it or know it – our political system is
broken and until that is fixed no badly needed reforms
will be realised.
-----------------------------------------------
The Seven Biggest Economic Lies
by Robert
Reich, 10/12/11
The
President’s Jobs Bill doesn’t have a chance in Congress
— and the Occupiers on Wall Street and elsewhere can’t
become a national movement for a more equitable society
– unless more Americans know the truth about the
economy.
Here’s
a short (2 minute 30 second) effort to rebut the seven
biggest whoppers now being told by those who want to
take America backwards. The major points:
1.
Tax cuts for the rich trickle down to everyone else.
Baloney. Ronald Reagan and George W. Bush both sliced
taxes on the rich and what happened? Most Americans’
wages (measured by the real median wage) began
flattening under Reagan and have dropped since George W.
Bush. Trickle-down economics is a cruel joke.
2.
Higher taxes on the rich would hurt the economy and slow
job growth. False. From the end of World War II
until 1981, the richest Americans faced a top marginal
tax rate of 70 percent or above. Under Dwight Eisenhower
it was 91 percent. Even after all deductions and
credits, the top taxes on the very rich were far higher
than they’ve been since. Yet the economy grew faster
during those years than it has since. (Don’t believe
small businesses would be hurt by a higher marginal tax;
fewer than 2 percent of small business owners are in the
highest tax bracket.)
3.
Shrinking government generates more jobs. Wrong
again. It means fewer government workers – everyone from
teachers, fire fighters, police officers, and social
workers at the state and local levels to safety
inspectors and military personnel at the federal. And
fewer government contractors, who would employ fewer
private-sector workers. According to Moody’s economist
Mark Zandi (a campaign advisor to John McCain), the $61
billion in spending cuts proposed by the House GOP will
cost the economy 700,000 jobs this year and next.
4.
Cutting the budget deficit now is more important than
boosting the economy. Untrue. With so many
Americans out of work, budget cuts now will shrink the
economy. They’ll increase unemployment and reduce tax
revenues. That will worsen the ratio of the debt to the
total economy. The first priority must be getting jobs
and growth back by boosting the economy. Only then, when
jobs and growth are returning vigorously, should we turn
to cutting the deficit.
5.
Medicare and Medicaid are the major drivers of budget
deficits. Wrong. Medicare and Medicaid spending is
rising quickly, to be sure. But that’s because the
nation’s health-care costs are rising so fast. One of
the best ways of slowing these costs is to use Medicare
and Medicaid’s bargaining power over drug companies and
hospitals to reduce costs, and to move from a
fee-for-service system to a fee-for-healthy outcomes
system. And since Medicare has far lower administrative
costs than private health insurers, we should make
Medicare available to everyone.
6.
Social Security is a Ponzi scheme. Don’t believe
it. Social Security is solvent for the next 26 years. It
could be solvent for the next century if we raised the
ceiling on income subject to the Social Security payroll
tax. That ceiling is now $106,800.
7.
It’s unfair that lower-income Americans don’t pay income
tax. Wrong. There’s nothing unfair about it.
Lower-income Americans pay out a larger share of their
paychecks in payroll taxes, sales taxes, user fees, and
tolls than everyone else.
Editors Note: Robert Reich as a past Secretary of Labour is well qualified to make such judgements. But it will make no difference to those right wingers who dish out political propaganda. They do not seek the truth - only the marketing......
-------------------------------------------------
Protesters Against Wall Street
New York Times Editorial, 10/10/11
As the Occupy Wall Street protests spread from Lower
Manhattan to Washington and other cities, the chattering
classes keep complaining that the marchers lack a clear
message and specific policy prescriptions. The message —
and the solutions — should be obvious to anyone who has
been paying attention since the economy went into a
recession that continues to sock the middle class while
the rich have recovered and prospered. The problem is
that no one in Washington has been listening.
At this point, protest is the message: income
inequality is grinding down that middle class,
increasing the ranks of the poor, and threatening to
create a permanent underclass of able, willing but
jobless people. On one level, the protesters, most of
them young, are giving voice to a generation of lost
opportunity.
The jobless rate for college graduates under
age 25 has averaged 9.6 percent over the past year; for
young high school graduates, the average is 21.6
percent. Those figures do not reflect graduates who are
working but in low-paying jobs that do not even require
diplomas. Such poor prospects in the early years of a
career portend a lifetime of diminished prospects and
lower earnings — the very definition of downward
mobility.
The protests, though, are more than a youth
uprising. The protesters’ own problems are only one
illustration of the ways in which the economy is not
working for most Americans. They are exactly right when
they say that the financial sector, with regulators and
elected officials in collusion, inflated and profited
from a credit bubble that burst, costing millions of
Americans their jobs, incomes, savings and home equity.
As the bad times have endured, Americans have also lost
their belief in redress and recovery.
The initial outrage has been compounded by
bailouts and by elected officials’ hunger for campaign
cash from Wall Street, a toxic combination that has
reaffirmed the economic and political power of banks and
bankers, while ordinary Americans suffer.
Extreme
inequality is the hallmark of a dysfunctional economy,
dominated by a financial sector that is driven as much
by speculation, gouging and government backing as by
productive investment.
When the protesters say they represent 99
percent of Americans, they are referring to the
concentration of income in today’s deeply unequal
society. Before the recession, the share of income held
by those in the top 1 percent of households was 23.5
percent, the highest since 1928 and more than double the
10 percent level of the late 1970s.
That share declined slightly as financial
markets tanked in 2008, and updated data is not yet
available, but inequality has almost certainly resurged.
In the last few years, for instance, corporate profits
(which flow largely to the wealthy) have reached their
highest level as a share of the economy since 1950,
while worker pay as a share of the economy is at its
lowest point since the mid-1950s.
Income
gains at the top would not be as worrisome as they are
if the middle class and the poor were also gaining. But
working-age households saw their real income decline in
the first decade of this century. The recession and its
aftermath have only accelerated the decline.
Research shows that such extreme inequality
correlates to a host of ills, including lower levels of
educational attainment, poorer health and less public
investment. It also skews political power, because
policy almost invariably reflects the views of
upper-income Americans versus those of lower-income
Americans.
No
wonder then that Occupy Wall Street has become a magnet
for discontent. There are plenty of policy goals to
address the grievances of the protesters — including
lasting foreclosure relief, a financial transactions
tax, greater legal protection for workers’ rights, and
more progressive taxation. The country needs a shift in
the emphasis of public policy from protecting the banks
to fostering full employment, including public spending
for job creation and development of a strong, long-term
strategy to increase domestic manufacturing.
It is not the job of the protesters to draft
legislation. That’s the job of the nation’s leaders, and
if they had been doing it all along there might not be a
need for these marches and rallies. Because they have
not, the public airing of grievances is a legitimate and
important end in itself. It is also the first line of
defense against a return to the Wall Street ways that
plunged the nation into an economic crisis from which it
has yet to emerge
Our Capitalist System Is Near Meltdown
The Ailing Euro Is Part of a Wider Crisis. A 1930s-style
crash threatens us and our financial partners.
Collective action is the only solution
by Will Hutton, The Guardian UK, 9/18/11
Eighty
years ago, faced with today's economic events, nobody
would have been in any doubt: we would obviously be
living through a crisis in capitalism. Instead, there is
a collective unwillingness to call a spade a spade. This
is variously a crisis of the European Union, a crisis of
the euro, a debt crisis or a crisis of political will.
It is all those things, but they are subplots of a much
bigger story: the way capitalism has been conceived and
practiced for the last 30 years has hit the buffers.
Unless and until that is recognized, western economies
will be locked in stagnation which could even transmute
into a major economic disaster.
Simply
put, the world has trillions upon trillions of excessive
private debt financed by too many different currencies
whose risk is allegedly mitigated by even more trillions
of financial bets which in aggregate do not minimize the
systemic risk one iota. This entire financial edifice,
underwritten by tiny amounts of capital, has been
created over three decades backed by the theory that
markets do not make mistakes. Capitalism is best
conceived and practiced, runs the theory, by
hunter-gatherer bankers and entrepreneurs owing no
allegiance to the state or society.
This is nonsense. Business and the state
co-generate wealth in a system of complex mutual
dependence. Markets are beset by mood swings and
uncertainty which, if not offset by government action,
lead to violent oscillations. Capitalism without
responsibility or proportionality degrades into
racketeering and exploitation. The prospect of limitless
pay is an open invitation to bad, or even criminal,
behavior. Good capitalism cannot happen without referees
to blow the whistle or robust frameworks in which
markets can function; neither is reliably created by
capitalism itself, hence the role of democratic
government. Yet the world is trying to solve the legacy
of the last 30 years as if none of this were true and,
instead, that the practice and theories that created the
mess are still valid.
US treasury secretary Tim Geithner, joining
EU finance ministers in Poland as again they pondered
how best to end the ongoing euro crisis, was at least
recognizing today's interdependencies between countries
when he urged his fellow ministers to stop bickering
because the markets were terrified by the threat of a
catastrophic event – with all the risk that posed the
US.
George Osborne was also right to declare that
a strong euro was in Britain's interests. But worrying
about how a failed euro might impact on yourself is old
speak. What the markets need to hear is that western
politicians – whether in the eurozone or not – see the
euro as part of the potential solution to capitalism's
current crisis, not its cause, and that they are
prepared to do all in their power to support the reforms
necessary to make the euro survive and take other
measures vital to make the world financial system
functional again. Geithner and Osborne must put some
money where their mouths are.
The euro's critics, endlessly emphasizing
that it is a monetary straitjacket and that the best
reform now would be its break-up, miss the point. It was
not this so-called straitjacket that is the cause of
today's euro crisis. It is the interaction of the euro
system with a once-in-a-century crisis of capitalism
that its designers and supporters, like its critics,
never anticipated. Yes, what the crisis has exposed is
that the eurozone needed a $1 trillion-plus fund to
recapitalize bust banks and underwrite sovereign debt
write-downs; this was not written into the original
treaty. And that the investment and retail banking arms
of the EU's universal banks need to be ringfenced or
formally separated, as Sir John Vickers's banking
commission proposes for Britain –if they are to be
remotely safe. But neither notion was a battle cry of
the euroskeptics over the last 10 years.
In
fact, the existence of the euro has, until now, been a
bulwark against disaster. Suppose it had not been
created and that the financial crisis in 2008 had broken
over a Europe with multiple floating exchange rates and
no European central bank – the euroskeptic utopia. The
Irish, Portuguese, Greek, Spanish, Italian and French
banking systems would have stood alone and they would
have collapsed in a domino effect, interacting with the
mega-crisis in Britain and the US. Even some German
banks would not have been immune. There would have been
a 1930s-scale slump, the break up of the EU and a rise
in beggar-my-neighbor devaluations and trade protection.
We have not yet escaped that prospect. If the
euro breaks up, the cascade of subsequent bank failures
and debt write-downs will be no less threatening and
Britain will be pulled into the vortex.
The EU has created a "financial stabilization
facility" to try to hold the line. But there is no
urgency in launching it; it is still not a proper fund
but, rather, a stop-gap provider of borrowing facilities
and it is too small. As bad, the German and French
governments are wedded to collective European austerity;
they want to impose long-term balanced budgets not only
on themselves but chilling austerity on the unfortunate
states which have to borrow to support their banks and
bond markets.
An entire continent is to be blighted by lack
of demand in the midst of a capitalist crisis,
compounded by Britain's scorched earth,
deficit-reduction plans. Already, many European banks
are technically insolvent, recognized by Christine
Lagarde, the IMF's new managing director, if not by the
banks themselves.
Last week, the Bank of England joined the US
Federal Reserve, the Bank of Japan and the Swiss central
bank in promising Europe's banks vital liquidity in
dollars, easing the crisis for a while. Time has been
bought; we are pitching in to save ourselves. But the
outside world needs to go much further. Europe's
stabilization facility must become a fund with a
capacity to lend and intervene to see off speculators:
Britain, the US, Switzerland and Japan, along with China
and oil-rich Arab states, need to contribute alongside
Germany.
In return for coming to the relief of the
German taxpayer, we should demand two key concessions:
one, that Europe sets about ringfencing its universal
banks' investment banking operations to make them less
vulnerable; and second, that no international cash is
forthcoming unless the EU commits to a formal plan for
growth in which its stronger countries, notably Germany,
promise to stimulate their economies. As part of the
package, Britain should agree to defer its own deficit-
reduction plans and to issue bonds denominated in euros
to contribute to the new euro fund.
We are living through the most dangerous
confluence of economic circumstances in modern times.
Trying to pretend the interdependencies do not exist or
that the collapse of the euro is the answer can only
make matters worse. It is a straight choice: we do all
we can to help each other or risk going down in what
could be the worst economic contraction for a century.
William
Nicolas Hutton is an English writer, weekly columnist
and former editor-in-chief for The Observer. The
analysis in his books is characterised by a support for
the European Union and its potential, alongside a
disdain for what he calls American conservatism –
defined, among other factors, as a certain attitude to
markets, property and the social contract. In 1992, he
won the What The Papers Say award for Political
Journalist of the Year.
----------------------------------------------------