Monday, April 14, 2008

Why Americans Are Bitter

Why Americans Are Bitter

By Mary Pitt

Go To Original

The mainstream media is making of about the remark by Senator Barrack Obama about the residents of small-town America being "bitter". Actually, I believe that most Americans are "bitter" by now and with good reason. We can begin with the fact that the last two presidential elections have not been decided by the good common sense of the voting public but by the arcane machinations and dirty tricks of the political party machinery. First, let's explore the term, "bitter". On the scale of unhappiness, it is to be found somewhere beyond "disappointment", "disillusionment" and "desperation". Those terms have been common in recent years and with very good reason. However, as the situation of working America continues to deteriorate, we have certainly become "desperate" as nobody in government appear to truly know or care. however, being bitter does not denote surrender.

In the elections of 2000, the winner, who promised to be "a uniter, not a divider" undertook policies which created the widest division in the United States since the Civil War, not between states but between classes Instantly, he began choosing "enemies" throughout the world of whom we should be aware and fearful. After the second and highly successful bombing of the World Trade Center, he immediately plunged the nation into a total war against an amorphous and disconnected "enemy" by attacking Afghanistan which appeared to be the home base of their leadership.

As it appeared that we were winning that war, though much was left to be done, we were bombarded by the fear machine regarding the other arch-enmity, the dictator of Iraq who was, we are told, prepared to attack us with nuclear weapons at any moment. When we invaded and found no "weapons of mass destruction" we were told that the dreaded Al Qaida was there and we had to destroy them, (truns out that Saddam hated Al Qaida and we found none), then we had to "establish democracy" and, despite our having killed a million or so Iraqi civilians and lost a couple of thousand more American troops. we are now told that we may here there another generation or two since Iraq is, by nature, tribal nation rife with sectarian rivalry and do not want to become a united nation. (That, by the way, is why it was placed under a brutal dictatorship when the British left Mesopotamia.)

The President keeps telling us that our economy is going through a "rough patch" and we should suck it up while our jobs continue to go off-shore, our homes being foreclosed, and children and elderly are dying needlessly for lack of medical care. Those who still have work are paying double for gasoline to get to work and retail prices are reaching for the sky because of the increased cost of getting merchandise from the factory or the docks to the stores. Meanwhile, the oil barons are being enriched beyond imagination by their windfall profits and the world is running out of fuel.

Recently we have been made aware of the fact that there are more hired mercenaries in Iraq than there are American troops. These hired guns are paid at a much higher rate than are our own soldiers and the corporations who direct them, largely Halliburton subsidiaries or spin-offs, are pocketing huge profits, not only for that but also for their no-bid "reconstruction" work. Kellogg, Brown & Root, a "former Halliburton" firm, are providing rotten food and contaminated water for our troops courtesy of their slave-wage laborers from all over the world. We have no idea how many of these "civilian employees" have been killed, I suppose because the hired help don't matter.

Meanwhile the leaders of Al Qaida are no longer in Afghanistan but have crossed the border into Pakistan but we can't go there because our leaders tell us that "Pakistan is our friend". However, the Taliban, the "extremist" organization are battling us in order to return that nation to the old, traditional ways of governing by tribal rules. The titular leader who was installed by us, Pervez Musharraf, is so hated by the people that he is virtually a prisoner in the capital city and, even there, can move only with armed guard.

To the citizens of a nation that, a few short years ago, was a "shining city on a hill" it is a revolting development to find that we are hated throughout the world and can only find "allies" with the payment of sufficient amounts of money. And, yes, there is the problem of money! The entire cost of the Bush misadventure has been charged to our children, grandchildren, ad infititum, and the American dollar is no longer an advantage on the world markets. Tourists from all over the world can come here to find bargains in our stores, but Americans cannot share in their pursuits because Americans have no money!

We lose our jobs, we lose our homes, we lose our sons in the war without end, and now many of us are losing our tempers! Some are old enough to remember the miseries of the Great Depression and we feel another one coming on as history is repeating itself. It seems that Herbert Hoover was also unconcerned about the plight of the ordinary American and intent on following his own Pied Piper. When the world-wide drought and food shortage hit, the United States was virtually destroyed. Now we are reading about food riots and shortages in other nations and the scientists are warning that another drought is in the making. I don't know about Pennsylvania, Senator Obama, but I know about America and we are not only bitter. We are also sick and tired of elected officials who are lying to us as they betray our trust and their oaths of office

We're mad as hell and we're not gonna take it any more!

They were warned

They were warned

by Stephen P. Pizzo

Go To Original

There’s nothing more obnoxious than an “I-told-you” so-er. And that’s not why I’m doing this today. I am doing it because a few weeks ago Paul Muolo called me. Paul co-authored with me and Mary Fricker our best selling book on the savings and loan crisis back in 1989. Paul is now co-authoring a new book, on the new banking crisis.

His call reminded me of a day in 1991 when I received a call from someone in Representative Ed Markey’s office. She said Markey was concerned about pending legislation that would deregulate the commercial banking industry and abolish the post-depression Glass-Steagall Act, which had built a wall between stock market speculators and federally-insured banks.

At the time I was still a working reporter and working reporters simply do not testify on subjects they cover. I knew if I accepted I would not be able to continue covering that beat. After some thought I came to the following conclusion: how much good had my reporting done anyway? After all, here the nation was still trying to pick up the pieces from S&L deregulation, and those fools in Congress were about to do the same thing to the banking industry.

So I agreed, and on September 13, 1991 — nearly 17-years ago — I testified before House Committee on Energy and Commerce.


It was Paul’s call that caused me to dig through my dusty boxes full of crap I’ve saved and find my long-forgotten published testimony. (Forgive me, but the parts in bold are my, “I told you so’s)

I scanned it in and below is my oral testimony. At the end is a link to the more comprehensive written statement submitted to the committee by me and Mary Fricker.

If you have the stomach for it, read both. Then send them to your members of Congress and ask them why they ignored these warnings. And why they are now acting so “shocked, simply shocked” that, doing what they were explicitly warned NOT to do, that “gambling went on.”

It makes me sick to think of the hundreds of billions of dollars Congress once again let the slicksters and tricksters suck out of our economy, our wallets and our homes. Those who voted for this measure need to be held personally and professionally responsible. Because, they were warned, and here’s the proof:

September 13, 1991



Hearing: Subcommittee on Telecommunications and Finance

Committee on Energy and Commerce

102nd Congress

A bill to Amend the Federal Securities Laws to Equalize the Regulatory Treatment of Participants in the Securities Industry

Rep. MARKEY. Thank you, Mr. Mayer, very much. Mr. Pizzo.

STATEMENT OF STEPHEN P. PIZZO

Mr. PIZZO. Thank you, Mr. Chairman, for an opportunity to address this committee. To get right to the point, this so-called bank reform legislation is nonsense. It is dangerous nonsense.

The premises on which it is being peddled to Congress are contrived, cynical, and transparent. They are the same arguments, the very same arguments, recycled from a decade ago, only then it was the U.S. League of Savings Institutions that was peddling them, rather than the ABA and the Association of Banking Holding Companies.

What is amazing to those of us who remember those days and witnesses the aftermath of Garn-St Germain is that so many in Congress appear eager to follow this demented pied piper a second time.

Members of the committee, we already have a healthy, vital, and dynamic community banking system out there. Of our 12,500-odd banks, the vast majority are community banks that are not in trouble and are not asking for this unwise legislation. But in the Lewis Carroll environment that surrounds this legislation, the success of America’s community banking is being totally ignored.

Instead, the administration and many in Congress have chosen to listen to the failed portion of the banking industry, America’s big and super-big banks. It is these colossal failures that many in Congress and the administration now want to accommodate with even broader banking powers. If only you would let them stay out later and associate with new friends, they promise they will straighten up and fly right.

Well, to veterans of the S&L crisis, all of this has a Mad Hatter’s tea party quality to it, and I am here to layout in the starkest terms I can what I believe will happen if Congress accommodates the desires of these tumor-like money center banks.

As for allowing corporate ownership, corporations want to be affiliated with banks for the very same reason that Bonnie and Clyde and Willie Sutton wanted to be affiliated with banks, because that is where the money is. And if you facilitate this union between banks and commercial interests, you will effect the most fundamental change ever in how and where capital flows to American business.

Big banks owned by Fortune-500-size corporations will favor the corporate culture. Credit will inevitably begin flowing away from small, family-owned and closely held businesses and into subsidiaries owned by large corporations. Since small business, not corporations, create the majority of jobs in America, the demise of the small business community will translate into higher unemployment and the accompanying cost to government. In the end, Washington will have to rescue job-creating small businesses through a massive and expensive government-backed loan program.

Corporate ownership of banks will also give big business a critical tool with which it can engineer society and the competitive business environment in ways heretofore out of their reach. Suppliers who accommodate a corporate bank’s department store chain, for example, will find credit plentiful and easy, while those who do not play ball will find the same credit tight, expensive, and at critical times, unavailable.

The Mafia built its empire on just such subtle, difficult-to-prove, extortive, and anticompetitive relationships. In a matter of a decade after this legislation passes, the competitive marketplace will become the twin of today’s electoral process. Upstart challengers will have almost no chance against established incumbent businesses that have already made their Faustian contracts with the new masters of corporate banking.

As for re-admitting banks into the securities marketplace, bankers will of course readily agree to to firewalls that will prohibit them from using their money to fund or prop up their securities trading affiliate or its customers. But of course, on the street, these firewalls will pose no real barrier at all.

As we autopsied dead savings and loans, we were absolutely amazed by the number of ways thrift rogues were able to circumvent, neuter, and defeat firewalls designed to safeguard the system against self-dealing and abuse. One of the favorite methods was to link up like-minded thrifts in the daisy chains through which they could circulate inflated assets and hide their rotten loans to each other and to each other’s customers from regulators.

Banks that need to get money to a trouble securities affiliate will do exactly the same thing. By linking up three or more banks, each with its own securities subsidiary, a daisy chain will facilitate a round robin of reciprocal loans in times of need. Then, the next time we have a Black Monday on Wall Street, this daisy chain will swing into action as a handful of mega-banks try to prop one another’s securities subsidiaries and their customers as the market plummets.

In such a scenario, billions of federally insured dollars will disappear in the twinkle of a few program trades.

That will happen, not might happen but will happen, and when it does these too-big-to-fail banks will have to be propped up with Federal money. In the smoking aftermath, Congress can stand around and wring its hands and give speeches about how awful it is that these bankers violated the spirit of the law, but once again, the money will be gone, the bill will have come due, and taxpayers will again be required to cough it up.

I have a great deal more to say on this subject, which I submit to the committee in my written remarks. I want to end by saying Congress is once again being misled, just as it was when it deregulated the thrifts, at the request of a handful of people in that industry.

For those outside the beltway, and those who now understand the scope of illegal and abusive activities Congress unleashed on the thrift industry, this march towards bank deregulation leaves us bewildered, deeply worried and angry. Voters are yearning for a few Mr. and Mrs. Smiths up here willing to take a stand against the banking lobby and their money and their bought and paid for experts and economists; a few good legislators, who will pull the plug on this Frankenstein, this time before it gets out of the laboratory.

After all, members of the committee, taxpayers who are still trying to grasp the extent of the mess left by Garn-St Germain, will not be amused if Congress now turns this monster loose on them as well.

As I said, in the beginning, I have no illusion that my testimony will sway anyone or that I can overcome the money being lavished on this issue, by the pro-deregulation lobbyists. I did not come here with money; I came, instead, armed only with solid common sense from lessons learned. I can only warn Congress that what they are about to do is unwise.

But, if this bill passes, and it ends badly, as I am certain it will, voters will hold Congress to a much higher standard of accountability than it was in the aftermath of Garn-St Germain. Because this time we know how high the stakes are, and we know that once you destroy barriers between Commerce and the vault, subsequent events will tumble out of control; out of control of regulators, and out of control of Congress.

We have paid a terrible price once already for ignoring this simple known fact. Voters and taxpayers have a right to expect that Congress will not create the conditions for this to happen again.

Thank you.

Symbolic Racism and the "US of KKK A"

Symbolic Racism and the "US of KKK A - Hannity, Clinton, Obama, Rev. Wright and Racism 101: Part II

by Walter C. Uhler

Go To Original

I'd be a millionaire, if I had a dime for every time some white American expressed some variant of the opinion: "Slavery ended a long time ago. Blacks have it much better today. They've achieved equality under the law and many middle class blacks have achieved de facto equality. Why can't they just get over it?"

Well, it's one thing to insist that blacks take responsibility for their own lives, even in the face of past and present racism. In fact, a November 2007 Pew Research Center poll found that 53 percent of America's blacks believe: "blacks who don't get ahead are mainly responsible for their own condition." But, it's quite another thing to close one's eyes to the impact of past and present racism.

When discussing the current indifference of whites to the cumulative impact of past racism, perhaps political scientist Roy L. Brooks put it best: "Two persons - one white and the other black - are playing a game of poker. The game has been in progress for some 300 years. One player - the white one - has been cheating during much of this time, but now announces: 'from this day forward, there will be a new game with new players and no more cheating.' Hopeful, but suspicious, the black player responds, 'that's great. I've been waiting to hear you say that for 300 years. Let me ask you, what are you going to do with all those poker chips that you stacked up on your side of the table all these years?' 'Well,' said the white player, somewhat bewildered by the question, 'they are going to stay right here, of course.' 'That's unfair,' snaps the black player. 'The new white player will benefit from your past cheating. Where's the equality in that?' 'But you can't realistically expect me to redistribute the poker chips along racial lines when we are trying to move away from considerations of race and when the future offers no guarantees to anyone,' insists the white player. 'And surely,' he continues, 'redistributing the poker chips would punish individuals for something they did not do. Punish me, not the innocents!' Emotionally exhausted, the black player answers, 'but the innocents will reap a racial windfall.'"


Commenting on this "racial windfall," Paul L. Street concludes, "there is something significantly racist about the widespread mainstream white assumption that the broader white majority society owes African Americans nothing in the way of special, ongoing compensation for singular black disadvantages resulting from overt and explicit past racism." [Paul L. Street, Racial Oppression in the Global Metropolis, p. 23]

Americans familiar with the work of sociologist Dalton Conley know that that slavery and Jim Crow sharecropping have been curses that keep on cursing, especially by preventing most African-Americans from accumulating the wealth they should have gathered otherwise. As Professor Conley sees it, "wealth accumulation depends heavily on intergenerational support issues such as gifts, informal loans, and inheritances." [Dalton Conley, Being Black, Living in the Red, p. 6] "Wealth is much more stable within families and across generations than is income, occupation, or education. In short," says Conley, "we are less likely to have earned it and more likely to have inherited it or received it as a gift." [Ibid, p. 14]

"In 1865, at the time of the Emancipation Proclamation, African Americans owned 0.5 percent of the total worth of the United States...However, by 1990, a full 135 years after the abolition of slavery, black Americans owned only a meager 1 percent of total wealth." [Ibid, p. 25] According to Professor Conley, "In 1994, the median White family held assets worth seven times more than those of the median nonwhite family." [Ibid, p. 1] In a word, the deliberate impoverishment of slaves and Jim Crow sharecroppers played a major role in preventing blacks from passing significant wealth to their descendants.

(Much in the spirit of Barack Obama and, perhaps, Hillary Clinton, Professor Conley believes that the racial gap in wealth can be remedied by an "aggressive wealth-accrual policy" that would benefit both whites and blacks, who are "asset-poor." Class, rather than race.)

Moreover, it wasn't merely the horrors of slavery and Jim Crow sharecropping that retarded the creation of wealth by African-Americans. During the 1930s and 1940s, African-Americans suffered yet more discrimination and abuse -- this time from "Crackers" in the U.S. Congress who conspired with office-holding and administrative racists in Southern states to assure, to the best of their ability, that only whites benefited from President Franklin Delano Roosevelt's "New Deal" social welfare programs. It gave an insidious new meaning to the South's insistence on "States Rights!

As Ira Katznelson has written in When Affirmative Action Was White: During the New Deal and Fair Deal era of the 1930s and 1940s "the southern wing of the Democratic Party was in a position to dictate the contours of Social Security, key labor legislation, the GI Bill, and other landmark laws that helped create a modern white middle class in a manner that also protected what these legislators routinely called 'the southern way of life.'" [p. 17]

Thus, "at the very moment when a wide array of public policies was providing most white Americans with valuable tools to advance their social welfare - insure their old age, get good jobs, acquire economic security, build assets, and gain middle-class status - most black Americans were left behind or left out." [p. 23]

How could such a thing happen? It happened because a Cracker in the U.S. House of Representatives, John Rankin of Mississippi, "led the drafting of a law that left responsibility for implementation mainly to the states and localities, including, of course, those that practiced official racism without compromise." [p. 123] According to Katznelson, Rankin "keenly grasped that black veterans would attempt to use their new status, based upon service and sacrifice, along with a new body of federal funds, to shift the balance against segregation." [p. 126]

Take the case of the GI Bill. "Between 1944 and 1971, federal spending on former soldiers in this 'model welfare system' totaled over $95 billion." [p. 113] As Katznelson notes, "with the help of the GI Bill, millions [of veterans] bought homes, attended college, started business ventures, and found jobs commensurate with their skills." [p. 113] Yes, it helped many blacks and should be credited "for developing a tiny group of professionals into the large, stable, and growing 'black bourgeoisie' that exists today, composed of doctors, lawyers, teachers, and mid-level civil servants." [p. 120]

But, "on balance, despite the assistance that black soldiers received, there was no greater instrument for widening an already huge racial gap in postwar America than the GI Bill." [p. 121] Soon after the law's enactment, a delegation "told the Veterans Administration…that discharged Negro soldiers in the South are discouraged from enjoying the benefits of the 'GI Bill of Rights." [p. 122]

One consequence of this discrimination wouldn't be seen until 1984, when GI Bill mortgages had largely matured. In 1984, "the median white household had a net worth of $39,135; the comparable figure for black households was only $3,397…Most of this difference was accounted for by the absence of homeownership." [p. 164]

Whites, especially in the South, made a last ditch attempt defend "the southern way of life," when they engaged in violence to prevent the integration of schools, as required by the historic 1954 Supreme Court ruling, Brown v. Board of Education. As Mark M. Smith has observed, in his book, How Race is Made, "In years to come, civil rights activists let such men and women lay bare their visceral fury to the world, their glowering faces, punching fists, and kicking raw feet, frightening testimony to their determination to protect their society. It was a wise strategy. Seeing segregationists spew their hatred with such ferocity on national television shocked many." [p. 138]

Fury and violence weren't the only tools available to whites, who wanted to keep blacks "in their place." Until the enactment of the 1965 Voting Rights Act, most southern voting districts "employed literacy tests as a condition for entitlement to vote. The tests were employed in an explicitly racially discriminatory manner, with blacks given lower scores than whites regardless of their actual performance on the tests." [Blum, p.24]

Fortunately, the enactment of Civil Rights legislation greatly diminished the most overt forms of racism. Unfortunately, overt racism has been replaced by what scholars call "symbolic racism"- "a coherent set of beliefs including the sense that discrimination is no longer an obstacle for blacks, that their current lack of upward social mobility is caused by their unwillingness to work hard, that they demand too much of government, and that they have received more than they deserve." [Hutchings and Valentino, p. 390]

Symbolic racism, which is deeper and more widespread in the South than elsewhere in the United States, has become the bedrock upon which the Republican Party bases its "Southern strategy." Lee Atwater (who worked with both Bush's) put it this way: "You start out in 1954 by saying 'Nigger, nigger, nigger.' By 1968 you can't say 'nigger' - that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites." [Bob Herbert, "Impossible, Ridiculous, Repugnant," New York Times, Oct. 6, 2005]

Thus, even if we put aside the issue of a final reckoning for past injustices, there's still the matter of the willful blind eye that symbolic racists and other ignorant Americans turn to stark evidence of present-day racism.

Present-day racism? Yes, "in June 2000, American General Life and Accident Insurance Co., one of the nation's largest life insurance companies, agreed to pay $206 million to settle allegations that it had overcharged millions of mostly poor, black customers for burial insurance because of their race." Consider that, "in November 2000, Coca-Cola agreed to pay more than $156 million to current and former employees of color alleging racial discrimination." [Blum, p. 25]

Present-day racism? As professors Maria Kyrsan and Amanda Lewis note, in "Racial Discrimination Is Alive and Well" [Challenge, May-June 2005], "No matter what the employment rate generally is, African Americans are unemployed at twice the rate of whites." [p. 38] Fine, but how does racism enter in?

First, from the findings of researchers, who sent out resumes to a wide sample of potential employers. "The resumes were identical except for the name at the top. Some had black-sounding names like Tamika or Tyrone. Others had white-sounding names. But the resumes were identical. It turned out in this well-controlled study that the person with the white-sounding name was much more likely to get a call back than the one with the African American name." [Ibid, p, 40]

Second, "Kathryn Neckerman and Joleen Kirschenman did a study where they interviewed employers in-depth. They found widespread evidence of a racial hierarchy and belief in stereotypes. These views were quite readily verbalized by employers, who admitted that they, for example, selectively recruited in some communities. They preferred to hire white ethnics or Hispanics and had negative stereotypes of black inner-city applicants in particular." [Ibid, p. 41]

Thus, it's perhaps no accident that the huge expansion of the black middle class since the 1960s is due largely to jobs obtained in the government sector.

Present-day racism? In October 2005, Van Jones wrote about the disproportionate rate of arrests and convictions of blacks and cited an analysis conducted by two researchers for Justice Department: "Two-thirds of the studies of state and local juvenile justice systems they analyzed found that there was a 'race effect' at some stage of the juvenile justice process that affected minorities for the worse." [Van Jones, "ARE Blacks A Criminal Race? Surprising Statistics," Huffington Post Oct. 5, 2005]

Using data about drug use and incarcerations from four studies written between 1999 and 2005, Jones concludes: "The Monitoring the Future Survey of high school seniors shows that white students annually use cocaine at 4.6 times the rate of African American students, use crack cocaine at 1.5 times the rate of African American students, and use heroin at the same rate of African Americans students [sic], and that white youth report annual use of marijuana at a rate 46% higher than African American youth. However, African American youth are arrested for drug offenses at about twice the rate (African American 314 per 100,000, white 175 per 1000,000) times [sic] that of whites, and African American youth represent nearly half (48%) of all youth incarcerated for drug offense in the juvenile justice system."

Such racism in America's juvenile justice system is but part of a larger pattern of racial discrimination that recently prompted the United Nation's Committee on the Elimination of Racial Discrimination to urge the United States to rectify the "stark racial disparities" in criminal justice systems throughout the country. ["UN Faults US on Racism," Human Rights Watch, March 7, 2008]

Present-day racism? With reports that America's schools are experiencing a new wave of resegregation, it became national news when 16-year-old Kiri Davis recreated "the famous 1940s experiment conducted by Dr. Kenneth Clark that studied the psychological effects of segregation on black children." ["What Dolls Can Tell Us About Race in America," ABC NEWS, Oct. 11, 2006]

"In Clark's test, [black] children were given a black doll and a white doll, and then asked which one they thought was better."

"Overwhelmingly, they chose the white doll."

The results from Clark's experiment led him to conclude that "prejudice, discrimination and segregation" caused black children to develop a sense of inferiority and self-hatred; a conclusion that influenced the Brown v. Board of Education decision to end segregation in the nation's schools. [Ibid]

In the test administered by Kiri Davis some sixty years later, Davis asks a little girl, "'Can you show me the doll that looks bad?' The girl immediately chooses the black doll. Why does that look bad," asks Kiri. "Because it's black," the girl answers.

In fact, 15 of 21 children (ages 4 and 5) "said that the white doll was good and pretty, and that the black doll was bad." [Ibid] How's that for the impact of present-day racism?

Symbolic racists also would do well to consider the deadly present-day impact of previous racism. For example, when you think about hurricane Katrina's devastating impact on the lives of African-Americans living in New Orleans, think racial segregation. As Richard Thompson Ford writes, in recent book, The Race Card, "Racism didn't flood the black neighborhoods of New Orleans, but racism established and enforced the residential patterns that made those neighborhoods black." [p. 55]

And New Orleans wasn't alone. "Many American cities were segregated by force of law until the Supreme Court invalidated racial zoning in 1917. Those cities and many others replaced racial zoning with an almost equally effective private substitute - racially restricted real estate covenants - until those too were invalidated in 1948. Banks, real estate agents, residents, and in some cases the federal government conspired to enforce segregation informally until Congress prohibited housing discrimination in 1968." [Ibid]

Yet, although the evidence of present-day racism is overwhelming, such widespread and continuing racial discrimination does not justify the growth of a very troubling, self-destructive black "oppositional culture" in inner-city ghettos (See Elijah Anderson's Code of the Street.)

On the other hand, when a white Department of Defense colleague asked me to comment on a speech by Bill Cosby - in which Mr. Cosby tore into blacks, especially black parents, for the poor upbringing and resulting social pathologies of so many black children - I not only recommended Elijah Anderson's sobering book, but also asked why white Americans weren't equally outraged by the social pathologies of low-class whites - a much larger American sub-group, often called "white trash" by mean-spirited folks. I suggested to my colleague that the double standard, itself, constituted evidence of widespread racism in this country.

But, beyond this racial double standard, symbolic racists do their country a double disservice. Not only do they belittle the existence of present-day racism, thereby turning a deaf ear to potential remedies, they also provide fertile soil for the reemergence of overt racism.

As with Rev. Jeremiah Wright's "God Damn America" (a sentiment that was shared by Thomas Jefferson, see part one of this article here: http://www.walter-c-uhler.com/Reviews/damn.html ), Sean Hannity and FOX NEWS also has heaped scorn upon Rev. Wright's reference to the "US of KKK A." Again, Hannity's racial hypocrisy was astounding!

Simply consider that on November 14, 2007, Hannity's former co-conspirator to fill WABC's airwaves with hate, Hal Turner, went on the Warren Ballentine radio show and asserted: "We are going to begin lynching blacks in this country again next year!" He followed that assertion with a suggestion that we must return to what worked in the past, a rope. ["Hate Groups: Mainstreaming the Far Right," The Center for Democratic Renewal, February 2008]

Turner made his assertion in the wake of the huge September 2007, "Jena 6" rally against racial discrimination and hate in Jena, Louisiana that sparked a flurry of some 50 to 60 "noose incidents." The flurry marked a spike in noose-specific offenses that, according to a Justice Department report in 2000, have been increasing in professional environments. In fact, in October 2007 "seven black workers employed by an Oklahoma-based drilling company won a $290,000 settlement in a discrimination lawsuit which claimed they felt threatened by the display of a noose on a Gulf of Mexico oil rig." ['Noose incidents; Foolish pranks or pure hate?" CNN.com, Nov. 1, 2007]

In fact, the neo-Nazi National Socialist Movement (NSM) had put out a call: "All across the country, white people are spontaneously hanging nooses from trees to say that white people will not be intimidated by nigger mob rule and to show support four our 'Lynch the Jena 6' campaign."

The NSM appears to have picked up where the KKK left off. As the authors of "Hate Groups: Mainstreaming the Far Right" have written: "The practice of lynching exploded following the establishment of the Ku Klux Klan in 1867 as the organization used lynching to promote the concept of white supremacy. It has been estimated that between 1880 and 1920 an average of two African Americans per week were lynched in the United States."

"Lynchings weren't just murders - there were, in many cases, sanctioned murders: casually reported in the newspapers, ignored by law enforcement; celebrated with family picnics; photos of hanging victims turned into postcards, and 'souvenirs' were taken from the scene of the crime." [Ibid]

Mr. Turner's prediction of more lynchings came just last year, when the number of hate groups operating in America rose to 888. That number represents an increase of 48% increase since 2000. ["The Year in Hate," Southern Poverty Law Center, Spring 2008] And it came just a year after law enforcement agencies reported that 4,737 single-bias hate crime offenses were racially motivated. Of these offenses 66.2 percent were motivated by anti-black bias.

Thus, although it might be a bit of a stretch today (but certainly not during the mid-nineteenth to the mid-twentieth century) to refer to the United States of America as the "US of KKK A," Rev. Wright's assertion did not merit the outrage it received across white America, especially in light of the "noose incidents" that have increased since 2000 and spiked in 2007. Are we a nation of amnesiacs?

My closest African American friend, Stanley Brown, gave me his considered opinion about the outrage, which I publish here with his permission: "They finally found Barack's swift boat issue. It will probably never stop. Politics is a dirty business and Americans are easily led around like sheep (sheep are dumb). This issue of Rev. Wright allowed race to become the issue, to which white America can assert their sense of superiority making white (thought) right. The media disguises the whiteness as patriotism because most Americans have little knowledge of world events unless provide[d] by our fair and balanced media. It's as if the sons and daughters of slaves and victims of a Jim Crow society, now James Crow, Esq., should have the same perspective of America. It would actually mean that African Americans [were] insane, if they did. We are all a sum of our experiences. It's a testament to how far we haven't come and our lack of desire for real intelligence."

"Symbolic racism" and the "US of KKK A." My brief, two-part, introduction to "Racism 101" should persuade you that Rev. Jeremiah Wright's utterance about present-day racism is no more outrageous than are the smug, self-serving beliefs of symbolic racists who maintain that "discrimination is no longer an obstacle for blacks, that their current lack of upward social mobility is caused by their unwillingness to work hard, that they demand too much of government, and that they have received more than they deserve." And nothing said by FOX's Sean "Lee Atwater" Hannity will make it so.

Toronto18 Suspects undergo Trial by Media

Toronto18 Suspects undergo Trial by Media

by Beenish Gaya

Go To Original

Feels like June 2nd all over again

Beenish Gaya, is a Toronto based writer and sister of one of the accused. For more information on the case, please visit www.toronto18.com. & please watch the following 6 part documentary http://youtube.com/user/UnfairDealing.

The trial of the only remaining youth in the Toronto 18 case commenced last week in a Brampton courtroom. The new details disclosed in the Crown factum filed in the case elicited depressingly new emotional lows in all of the accused and their families. Reminiscent of that fateful day in June, 2006, the media sensationalism started all over again, with the reporting of incomplete evidence and outrageous headlines. Having attended the entire preliminary hearing, I must confess my shock and disbelief at the fact that these allegations continue to be presented in a manner which precludes the public from seeing a complete or accurate picture.

In our legal system, a preliminary hearing is held for the purpose of determining if there is enough evidence to warrant having an accused person proceed to trial. It gives the accused person and his lawyer an opportunity to learn what evidence the police and prosecution plan to use against them. At the end of the preliminary hearing, the judge decides if there is enough evidence to put the accused on trial, and then the case would proceed to the Superior Court. Unfortunately, in the case at hand, in what can reasonably be seen as an attempt to keep alive the climate of fear and sensationalism, the prosecution abruptly halted the preliminary hearing before the defense lawyers had an opportunity to begin to test and challenge the evidence. As some media have reported based on statements from the informant and others, the preliminary hearing was not going as planned by the prosecution; they were far from proving anything coming even close to an Al Qaeda inspired homegrown terror plot. As lawyer Michael Moon has publicly stated the “evidence” lacks any substance and reveals nothing more insidious than a bunch of guys talking, camping and goofing around.


Against this backdrop, the prosecutors were able to pull out their “wild card” and abruptly end the preliminary hearing. This strategic move unfairly gives the government the ability to keep up the drama and prolong the climate of fear. As documented by leading researchers, the psychology of fear is an effective tool against an uninformed and apathetic public. This is clearly evident from the superficial facts and out-of-context statements being thrown out to an unsuspecting, trusting and fearful public. These young men and youth, who are supposed to be innocent until proven guilty according to our own fundamental democratic right, have been painted as foreign and threatening.

I feel obligated to respond to the recent splash of terrorist allegations and to provide some balance and context (with the limited information that I am allowed to disclose as a result of the publication ban). I direct my comments more specifically to two recent articles that got extensive exposure: 'Alleged Toronto terror plot detailed in court' by Isabel Teotonio (Toronto Star, March 26, 2008) and Video calls for defeat of 'Rome' in Canadian terror case by Collin Freeze (The Globe and Mail, March 26, 2008). My comments are as follows:

1) It is alleged that these teens/young adults were planning “the plotting of an attack "much greater" in scale than the London 2005 bombings that killed 52 people”. As stated in the material released by Justice Sproat in the factum of Michael Moon, this is ncorrect. These men were incapable of doing so based on the fact that they lacked the financing and the planning required to plot, let alone, carry out something this outrageous. Moreover, they did not undergo any real training. There is almost a total reliance on the
informants in this case by the RCMP and CSIS, which hopefully the public will see as
the case unfolds.

2) “According to the allegations, the so-called Toronto 18 were attempting to secure a safe house to store weapons and practice military drills, and embarking on a mission to destroy the West “one they should be willing to die for.” This is extremely sensationalized, and exaggerates and decontextualizes the actual evidence. If this is in reference to the trip to Opasatika, then, as stated in the material released by Justice Sproat in the factum of Michael Moon, discussion about Operation BADR, during this trip were even described by Mubin Shaikh (the government’s own agent) as “fanciful plans” and constituted a very very minor portion of a 20 + hour trip.

3) “Storming Parliament Hill and beheading politicians.” This entire conversation, as Michael Moon suggested in ‘Terror schemes exaggerated, lawyer says’ by Colin Freeze (The Globe and Mail, March 27, 2008) referred to a 10 hour long car ride, and the conversations during this ride which were completely innocuous and reveal nothing more than a bunch of guys camping and horsing around. Their level of knowledge and sophistication is almost laughable given the seriousness of the allegations against them. In fact, they did not even know the name of the prime minister, and there were no maps, pictures, plans, any course of action, computers, or anything that would suggest they were really plotting something, let alone a terrorist attack. As stated in the material released by Justice Sproat, in the factum of Michael Moon, they lacked the finances and the plans to carry out such deeds.

4) The fragments of conversations that are presented are problematic. The reference to the London bombings and the quotes used are cut and pasted with the elimination of any laughter, and the context of how it is said. Moreover, the public is even more in the dark in that the demeanor and backdrop against which these statements are made are not visible. These decontextualized quotes and statements leave a far more sinister image then would actually be supported if these conversations are presented in the proper context.

5) It has been reported that there were videos of “terrorist indoctrination,” in which the accused are exhorted to wage battle in the new empire of "Rome" in North America, "whether we get arrested, whether we get killed." This video as stated in the material released by Justice Sproat, in the factum of Michael Moon, must be considered in the context of a "hapless `F-Troop,' who ventured into the deathly cold of winter without a proper tent, or in fact sufficient or proper supplies of any kind, was reduced to sleeping in the vehicles at night to prevent freezing to death; trooping off to Tim Horton’s multiple times per day for coffee and use of the bathroom, tending the fire, and marching with the primary purpose of staying warm”.

6) As described in the press, “the accused attended two training camps. One was a 12-day camp near the town of Washago, Ont., where they practiced military-style exercises in camouflage gear and undertook firearms training with a 9-mm firearm. The second was a two-day camp at the Rockwood Conservation Area, where they donned camouflage clothing and made a propaganda-style video of their military drills.” As made clear in the material released by Justice Sproat, in the factum of Michael Moon, these were not training camps and there was nothing even vaguely military about these camps except that which was orchestrated by Mubin Shaikh, the government’s own agent.

Based on the foregoing and what I have seen in court during the preliminary hearing there is nothing to justify a belief that there was a danger to Canada. Indeed this is reinforced by the fact that much of the “evidence” and training appears to come from the government’s own discredited agent, Mubin Shaikh, and the fact that the ordering, delivery and control over the fertilizer rested fully in the hands of another government agent and the RCMP.

The unbalanced and sensational media coverage of the case and Islam, the growing trend of Islamophobia and the resulting hatred against Muslims clearly disadvantage and prejudice the accused. In fact, those who are identified closely with Islam are easily associated with terrorism through guilt by association and the presumption of guilt. The restrictions imposed by the publication bans preclude an effective voice in opposition to this hatemongering. As a result Muslims have to relive the sensationalist propaganda and the characterization of innocent boys and young men (after all they are all to be treated as innocent until proven guilty, which seems more and more difficult as time passes and the prosecution continues to use the media for misinformation and propaganda) as ‘scary monsters’. This only creates an environment that further marginalizes Muslims (particularly those who are seen as openly practicing) and makes it all the more difficult for the accused to be tried in a fair, open and expeditious manner.

As a born and raised Canadian, who believes in the freedom and equality of all people, I am seriously appalled at the way a young Canadian’s life can be portrayed as a scary troubling demon, i.e. an Al Qaeda inspired terrorist based on scant evidence, out of context statements, one’s religiosity and even one’s political views. Like any other Canadian, now I patiently await to see, if justice will see the light of day given the cloud hanging over the head of the accused and their families as a result of the biased release of information, reported without question, by the media who, for the most part, only seem interested in sensationalism and pushing their “product.” In all fairness, I must add that the job of journalists is made all the more difficult as a result of the publication ban and I must also note that some have tried to give voice to the accused and bring some balance. I hope and pray that this will increase as the cases progress so that the accused can get their day in court for fair, transparent and expeditious trials and not trial by media.

Recession, Depression, Collapse: What's Fear Got To Do With It?

Recession, Depression, Collapse:What's Fear Got To Do With It?

By Carolyn Baker

Go To Original

Interesting, isn't it, that mainstream economists need a so-called economic guru like Alan Greenspan to confirm that the U.S. economy is in recession? If the maestro says it is so, then it is. If he doesn't, then the "downturn" has a silver lining. And now we have the Treasury Secretary, Hank Paulson, stating what the American public has known all too well during the past year: "The economy has taken a sharp downturn." Gee, Mr. Paulson, you get the understatement of the year award because what Americans have also discovered is that the middle class is now almost extinct after only a few decades of having one-thanks to you and your friends at Goldman Sachs.

No one walking away from a foreclosed home, no one declaring bankruptcy, no uninsured person staring in the face tens or hundreds of thousands of dollars in medical bills needs a maestro or any other member of the ruling elite to tell them that not only are we in a recession, but we are on a fast-track to a depression that is going to make 1929 look like living in the lap of luxury. It's called the collapse of Western civilization, and it is well underway.

Oh, you don't like my use of the word "collapse"? Then please listen up.

One of the most inspiring but also heart-wrenching stories I've seen this past week when Truth To Power was in the midst of its spring fundraiser and was not reporting much news was the CBS report on Tennessee-based Remote Area Medical's efforts to bring health and dental care to the uninsured or underinsured not only throughout the world, but now more than ever, in the U.S. As I watched this must-see video clip, my heart soared, even as I wept. What was confirmed in every cell of my body was that the American healthcare system has already collapsed, and that every other institution in this nation is rapidly succumbing to the domino effect of empire's unequivocal unraveling. Watch the CBS report for yourself, and I'm certain you will agree.

In looking honestly at these realities, it is impossible not to feel fearful, and some may once again accuse me of fear-mongering. However, I argue that fear is not necessarily a negative emotion or an unproductive waste of energy. I'm not talking about fear for the sake of fear, but rather, fear as a motivator-fear as a force that compels us to act.

Gavin De Becker's 1997 book The Gift Of Fear was written to assist readers in detecting violent behavior in the workplace, in the street, or in the home, for the purpose of protecting themselves. In contemplating collapse we are not dealing up close and personal with violence-at least not in this stage of collapse, as much as we are attempting to read the signals it is sending so that we may wisely prepare ourselves for navigating it. Among the author's suggestions are:

  • Recognizing the survival signals that warn us of impending danger
  • Relying on our intuition
  • Separating real from imagined danger
  • Moving beyond denial so that one can tune in to one's intuition

As we witness collapse and experience its impact on our lives, the fundamental concept of De Becker's book may serve us well. He argues that fear is an evolutionary gift imbedded in our DNA for the purpose of assisting our survival. Becoming overwhelmed with it or wallowing in it is indeed not useful, but neither is attempting to hermetically seal ourselves off from it. In fact, as De Becker argues, fear helps us move out of denial so that we can really tune into our intuition which facilitates our becoming proactive on our own behalf. What we need is not exemption from fear but a way of integrating it into our current reality in balance with other emotions.

What I want the reader to understand is that collapse is already happening. Your resentment of the word doesn't change the fact that it is occurring. Like Greenspan and Paulson, we all have the option of masking the realities of meltdown and continuing to wait for someone or something to "prove" to us that the world as we have known it is over.

Is talking about collapse scary? You bet. Does that mean we should avoid the word or "re-frame" it into something more "acceptable." Only if we insist on living in denial. If we feel fear about collapse, does that mean that we are "living in fear"? Only if we feel nothing else about it except fear and allow the fear to paralyze us.

OK, so collapse is happening, it's real, and it's going to get worse. So now what? How can I utilize that fear to take action? Keeping in mind that this is all scary to talk about, let's feel the fear and keep talking.

The first step, in my opinion, is to take a long, hard look at what action, in the face of the collapse of Western civilization, is realistic and truly useful. I believe we must approach this on two levels. First, what will actually make a difference in the world at large? Will using cloth shopping bags, changing my light bulbs, or shopping locally make a difference in the macrocosm? Quite frankly, probably not, although these may facilitate one's adaptation to a drastically new way of life and make that transition less traumatic. But then I must ask myself what my intention is. Am I trying to prevent the collapse that is already in progress? Am I trying to make it less severe than if I did nothing? Do I think I have some control over the collapse missile now that it has been launched and probably has a life of its own? If I don't have control-if control of the macrocosmic outcome isn't even possible, how does that feel? Even more scary? OK, so let's step back from the macrocosm for a moment and make this more personal.

Let's address the second level, my personal and immediate milieu. Who and what is in my personal world? Who do I love and trust and want to share my life with? What fears come up as I think about this? Fear that I can't talk to them about collapse? Fear that I will lose them, and they will lose me? Fear of separation from loved ones? Fear of making major changes like relocation, scaling down, bankruptcy, losing insurance, quitting a job or losing it?

Ooops, I think we've hit the big one: Fear of death-well, maybe not literal death, maybe not the "big one" but fear of the "little deaths" of loss which may feel like the "big death" of our own extinction. OK, time to take several deep breaths.

As we hit this rock-bottom fear, we must now ask ourselves if our ultimate objective in facing, talking about, and preparing for collapse is pure survival, or if it's larger than that. You see, this is the part that many people who are talking about "collapse preparation" fail to discuss. It's much easier to talk about stockpiling food and water or where one is going to invest one's money or how one is going to purchase precious metals or what skills one needs to learn for survival. It is far more risky and scary to talk about emotional and spiritual preparation for collapse. All of the other preparations are pretty much about making rational decisions based on adequate information. But when we begin preparing our souls for collapse, we're in a completely different dimension, and I argue, the most frightening as well as the most replete with potential. Potential for what?

The moment we begin discussing collapse and the notion of preparing for or surviving it, we enter the territory of meaning and purpose. Like someone stranded on a desert island or trapped in a downed airplane miles from nowhere, we are faced with those troubling "Who am I?" and "Why am I here?" questions that civilization has so masterfully assisted us in escaping. It is because humans have evaded and avoided dealing with those questions that we have created cesspools of government and financial corruption, the depletion of virtually all of earth's resources, the extinction of 200 species per day, oceanic dead zones the size of some states, the horror of genetically modified foods, and the destruction of our own and the earth's immune systems.

In a recent teleseminar offered by Life After The Oil Crash, Dmitry Orlov, author of the forthcoming Re-Inventing Collapse and a series of articles highlighting the similarities between the collapse of the Soviet Union and the collapse of the U.S., stated that more important than figuring out where we're going to put our money or deciding where we might relocate is our psychological preparation for collapse. If we are not working on that aspect of preparation, then we are likely to discover that other forms of preparation do not fortify us in the ways we had hoped.

If we continue to avoid dealing with the reality of collapse, we get to escape those troubling "Who am I and why am I here?" questions a little longer and thereby perpetuate the underlying cause of the nightmares we have created for ourselves and for succeeding generations. On the other hand, if we are willing to talk about collapse, live and work with it alongside all of the other aspects of our lives that bring us joy and meaning, we open ourselves to a stunning opportunity that we may never have discovered were it not for the end of the world as we have known it.

There is very little we can do about collapse, but there is much that we can do with it. That does not necessarily mean that we can create a clean, compassionate, just, humane planet in our lifetime. I believe that to presume we can do so without the demise of Western civilization is an illusion. Unfortunately, empire has set the earth community up for dissolution, and collapse will bring forth the "great sorting out" but hardly in ways we'd prefer.

Bearing in mind the poet's political incorrectness around gender and possibly the reader's sensitivity to the "G" (God) word, I offer the words of Rilke:

At once the winged energy of delight

Carried you over childhood's dark abysses,

Now beyond your own life build the great

Arch of unimagined bridges.

Wonders happen if we can succeed

In passing through the harshest danger;

But only in a bright and purely granted

Achievement can we realize the wonder.

To work with Things in the indescribable

Relationship is not too hard for us;

The pattern grows more intricate and subtle.

And being swept along is not enough.

Take your practiced powers and stretch them out

Until they span the chasm between the two

Contradictions...For the god

Wants to know himself in you.

The world we wanted to have is not within our reach; the world we deeply dread is upon us. Meanwhile, the world we have known, ugly as it may be but nevertheless familiar, is vanishing before our eyes. Herein lies an opportunity to experience deeper layers of who we really are and what we are really made of. Collapse is compelling us to confront these issues, whether we want to or feel ready to do so or not. While I do not welcome the suffering this will entail, I do welcome the transformation of human consciousness and thus the evolutionary quantum leap it may offer us. For a deeper understanding of this metamorphosis, I highly recommend an article that Truth To Power sent to subscribers earlier this week by Sarah Edwards and Linda Buzell entitled, "The Waking Up Synrdome." It confirms that instead of being the enemy, fear may be a powerful ally. If we can face the fear and take action, we may be able to "build the great arch of unimagined bridges."

Inflation hits consumers worldwide

Inflation hits consumers worldwide

Go To Original

Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor - the sagging value of the US dollar - means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores.

"We got to the higher inflation rates we have today versus a few years ago because monetary policy in general has not been real restrictive," says Jay Bryson, global economist at Wachovia Corp., a bank and investment firm in Charlotte, N.C. "At the end of the day the central banks of the world were running relatively loose policies."

That creates a tug-of-war for policymakers now, because the world's largest economy is slowing down and may be entering a recession. The question in the US, and some other advanced economies, is whether to focus on stimulating growth or fighting inflation - which typically require opposite policies.

In its "World Economic Outlook" report issued Wednesday, the International Monetary Fund warned of a sharp slowdown in global economic growth this year, with America in recession.

IMF economists see global growth of 3.7 percent this year, much lower than the 4.8 percent they had forecast last October. At the same time, the report warned of rising inflation pressures.

The Federal Reserve has been easing cutting short-term interest rates to stimulate a recovery. And the Bank of England cut its interest rate Thursday.

Most economists say the Fed's moves are appropriate. But they also point to the possible need for concerted action by the world's central banks to fight inflation once the US economy has been stabilized.

"The near term worry here is probably too-slow global growth" in the next few quarters, Mr. Bryson says. "But if a US recession proves to be fairly mild in depth, "then the bigger worry may go back towards inflation."

Still, for consumers worldwide, the price pressures are a very present and urgent concern. As of this week, Americans are paying a record $3.36 per gallon for gasoline, the American Automobile Association reported.

Skyrocketing food prices, meanwhile, have sparked panic and hoarding of grain in some nations. India has restricted rice exports. Indonesia and several African nations are experiencing unrest over food and fuel prices, the UN Food and Agriculture Organization says.

"There is a risk that this unrest will spread in countries where 50 to 60 percent of income goes to food," said Jacques Diouf, the FAO's director general, on Wednesday according to a Reuters report. "We have seen riots in Egypt, Cameroon, Haiti, and Burkina Faso."

The erosion of purchasing power worldwide seems to some extent surprising, given the weakening of economic growth. Often, a cooling economy would relieve pressure on commodity prices.

But inflationary pressures often take time to abate. And today, a majority of the world's economic growth is occurring in developing nations such as China, where hunger for raw materials continues unfazed by the US slowdown.

Some economists say that upward pressure on commodity prices should cool this year, especially due to ripple effects from a US recession. But others aren't sure.

"The [economic] surprise of 2008 so far has been the upside surge in inflation, not the downside cut to growth," a team of economists at Merrill Lynch wrote in a March 26 report. "The current global economic expansion will come to an end when emerging market central banks decide to deal with this threat more aggressively."

In theory, prices for given products can move up or down without sparking the broader phenomenon of inflation - defined as a rise in the overall price level.For instance, prices for homes and many electronic goods are falling in the US, even as fuel and food costs rise.

But commodity pressures grab headlines, and can effect self-fulfilling expectations that affect the behavior of businesses and consumers.

Moreover, whether it's called inflation or a price shock, the cost of energy and food could remain under upward pressure now because of supply constraints. It's getting harder for nations to find low-cost oil supplies, and grains are now in demand as auto fuels as well as food.

"The world economy is in a very difficult position, and policymakers do need to be concerned about both [inflation and growth]," says Charles McMillion, an economist at MBG Information Services in Washington.

A key fuel of overall inflation is money supply, and central banks around the world appear to have tilted in recent years toward providing plenty of it.

Moreover, the Merrill Lynch report shows overall money supply growth ratcheting upward in the past year, led by nations other than the US.

Brian Bethune, an economist at Global Insight in Lexington, Mass., predicts that a negative trend - a weakening in the world economy this year - will ultimately dampen commodity prices. "We're going to get into a zone where everything is going to be weak together."

Recession Has Bernanke, Greenspan Agreeing Companies Have Cash

Recession Has Bernanke, Greenspan Agreeing Companies Have Cash

By Rich Miller

Go To Original

The U.S. economy has what Alan Greenspan calls one ‘‘major advantage'' as it falls into a recession: Businesses are in far better financial shape than they were entering the past two contractions.

Corporations outside of financial services -- from Cisco Systems Inc. to Coca-Cola Co. -- have collectively socked away more than half a trillion dollars in cash. They have also reduced short-term debt and cut inventories to record-low levels in relation to sales, leaving them better prepared than in the past to weather a contraction.

‘‘We still have what, at the moment at least, appears to be a reasonably good real economy, as distinct from finance,'' the former Federal Reserve chairman said at an April 8 conference sponsored by Deutsche Bank AG and co-hosted by Bloomberg.

The current Fed chief, Ben S. Bernanke, sees it much the same. On April 2, he told lawmakers that aside from the banking and securities industries, corporate balance sheets are sound -- a ‘‘positive'' for the economy.

Greenspan describes a ‘‘tug-of-war'' between healthy non- financial companies on one hand and the crippled credit market and housing industry on the other. He says he isn't sure which will prevail, and the economy might continue to struggle well into the second half of the year.

GE's Decline

Greenspan's tug-of-war is evident at General Electric Co. The world's third-largest company last week reported its first quarterly profit decline since 2003 as disappointing earnings from its commercial-finance unit outweighed strong revenue from large-equipment manufacturing. Fairfield, Connecticut-based GE forecast a drop in financial earnings for the year and a gain of 10 percent to 15 percent in profit from other parts of the business.

Non-financial companies are well-positioned now because they kept firm control of spending during the expansion. That means ‘‘there should be less of an imperative to reduce costs by cutting back on staff and capital spending,'' says John Lonski, chief economist at Moody's Investors Service in New York.

Behind the restraint are company executives' memories of the collapse in profits in the 2001 recession, when operating earnings per share for the Standard & Poor's 500 fell 30 percent.

‘‘They really got hammered in the last downturn,'' says Nariman Behravesh, chief economist at Lexington, Massachusetts- based Global Insight. ‘‘They learned their lesson.''

One advantage for businesses this time is what Lakshman Achuthan, managing director of the Economic Cycle Research Institute in New York, calls ‘‘premature pessimism.''

‘‘The forecast demise of the U.S. economy has been happening now for years,'' he said in an interview on April 7. ‘‘Ever since 2005, the `R' word has popped up.''

`Recessionary Impulse'

Manufacturers in particular have responded by keeping inventories in check, Achuthan says, removing about half of what he calls the ‘‘recessionary impulse'' of steep cuts in stockpiles that occurred during past declines.

Companies were rewarded for their discipline with 20 consecutive quarters of double-digit profit growth that ended only in the middle of last year. As a result, industrial corporations in the Standard & Poor's 500 have amassed $615.5 billion in cash and cash equivalents, says Howard Silverblatt, senior index analyst at S&P in New York, compared with $352.4 billion in 2001 and $95.5 billion at the time of the 1990-91 recession.

Irving, Texas-based Exxon Mobil Corp., the world's biggest oil company, leads the pack with $34.5 billion, followed by New York's Pfizer Inc., the world's largest drugmaker, with $25.5 billion, and San Jose, California-based Cisco, the world's biggest maker of computer-networking equipment, with $22.7 billion.

Cash Hoard

The cash hoards mean companies aren't so dependent on battered banks for money to finance their operations. Debt as a percentage of net worth for non-financial companies outside of farming was 61.3 in the fourth quarter of last year, compared with 68 at the start of the 2001 recession and 93.6 in the 1990- 91 contraction, Fed figures show.

‘‘Cash flows are more than adequate, and the amounts of monies that they need are very readily financed in the weakened credit markets,'' Greenspan said at the April 8 conference.

U.S. multinationals have also benefited from stronger growth abroad. Their global profits in 2007 were 142 percent higher than in 2000 and 507 percent more than in 1990, says Joseph Quinlan, chief market strategist at Bank of America Corp. in New York.

That should continue this year, helping to limit the drop in operating profits for the S&P 500 to about 1 percent in 2008, says Steven Wieting, managing director of economic and market analysis at Citigroup Global Markets in New York.

Showing Restraint

The restraint companies showed means they may find themselves saddled with less excess capacity and fewer surplus workers than in past recessions. Investment in buildings and equipment grew at an annual 3.3 percent during the expansion that began November 2001, compared with 7.8 percent in the 1991- 2001 upswing and 4.6 percent in the 1982-90 recovery.

‘‘The non-financial corporate sector had a very cautious expansion,'' Wieting says.

Some companies are even adding capacity as the economy slows. Corning Inc., the biggest maker of glass for liquid- crystal displays, intends to increase capital spending this year to between $1.5 billion and $1.7 billion from about $1.2 billion last year. The Corning, New York-based company is boosting production of screens for large flat-screen televisions.

Companies have also been conservative about adding workers, especially at the start of the expansion. Nonfarm payrolls have grown by an average of 86,400 a month since November 2001. In the two previous periods of growth, the monthly gains averaged 196,750 and 224,510.

Unwanted Inventories

What's more, ‘‘most firms have been able to avoid unwanted buildups in inventories,'' Bernanke told the Congressional Joint Economic Committee on April 2. One indication is a decline in the inventory-to-sales ratio, which measures how long it would take companies to sell stockpiles they have on hand. The ratio showed a 1.25 months' supply in January, matching a record low, and down from 1.3 months a year earlier.

In the run-up to the 2001 recession, the ratio rose to 1.44 from 1.39. It was 1.53 at the start of the 1990 contraction.

Like Greenspan, Silverblatt of S&P says the overall health of non-financial businesses doesn't insure the economy will have a quick recovery. Indeed, business bankruptcies increased 16 percent in the first quarter, according to court records compiled by Jupiter eSources LLC. And the total of distressed corporate bonds, an indicator ofpotential bankruptcies, jumped to $206 billion this year from $4.4 billion last March, according to a Merrill Lynch & Co. index.

While non-financial corporations are still ‘‘in the best position they've been in years to ride out a storm,'' Silverblatt says, ‘‘the question is, is it a storm or a hurricane that we're in for?''

Wanta Save the Economy? Give Workers a Raise

Wanta Save the Economy? Give Workers a Raise

By Mike Whitney

The bright new financial system, with all its talented participants, with all its rich rewards, has failed the test of the marketplace." Former Fed Chief, Paul Volcker

Go To Original

A specter is haunting Wall Street---the specter of insolvency. One major player, Bear Stearns, has already gone under, and from the looks of it, another may be on the way. It's getting ugly out there. The so-called TED spread---which measures the willingness of banks to lend to each other---has begun to widen ominously suggesting that the money markets believe another body will be floating to the surface any day now.

The ongoing deleveraging of financial institutions and the persistent downgrading of assets has the Fed in a tizzy. Bernanke has backed himself into a corner by stretching the Fed's mandate to include anyone on Wall Street with a mailing address and a begging bowl. Now he's taken on the larger task of fixing the plumbing that keeps credit flowing between the various investment banks. Good luck. He's already burned through nearly half of the Fed's balance sheet of $900 billion and the banking meltdown has just begun. The IMF expects the final tally will be $945 billion, that means $3 trillion in lost loans for the banks. Bernanke better pace himself; this mess could last for years.

The US subprime fiasco has spiraled into what the IMF is calling “the largest financial shock since the Great Depression.” America's capital markets are on the fritz. The corporate bond market is frozen, the banks are buckling from their losses, and the housing market is in a shambles. No one is buying and no one is lending; that's a deadly combo. Private equity deals are off 75% from last year and no one will go near a mortgage-backed security (MBS) with a ten foot pole. The mighty wheel of modern finance is grinding to a standstill and no one's quite sure how to rev it up again.

The US consumer is feeling the pinch, too. His credit cards are maxed out, his student loans are overdue, his car payment is in arrears, his mortgage is entering foreclosure, and and the home-equity ATM has been shut down. Now that the credit spigot has been turned off; he's really hurting, but no one is offering him a bailout or a even helping hand; just a few table-scraps from Bush's “surplus package”. 500 bucks will just about fill the tank of a normal-sized SUV; that's it. A new survey from the Pew research Center “Inside the Middle Class—Bad Times Hit the Good Life”, shows that working families are in debt up to their ears and that fewer Americans “believe they are moving forward” than anytime in the last half century. The study also shows that most people believe “it's harder to maintain a middle class life style” and that “since 1999, they have not made economic gains.” Average families are struggling just to make ends meet.

That's why so many people bought homes when they should have opened savings accounts. They thought that speculating on housing would get them a piece of the American dream. What's wrong with that? It looked like a good way to make up for the stagnant wages and crappy hours. The cheer-leading TV pundits offered assurances that “housing prices never go down”, but it was all baloney. Now 15 million homeowners are upside-down on their mortgages and the very same experts are scolding them for fudging the facts on their income. It's all backwards.

No wonder consumer confidence has dropped to record lows. The trust is gone. Working people have been hoodwinked one too many times. They don't need lectures on saving money; they need a raise. The big-wigs who scuttled Bear Stearns are still dining on crab-cakes at the Four Seasons while the working slob is just trying to make his way through Greenspan's nuclear winter living on beef jerky and Big Gulps. Where's the justice?

Volumes have been written about the current crisis; subprime-this, subprime that. Everything that can be said about collateralized debt obligations (CDOs) credit default swaps(CDS) and mortgage-backed securities (MBS) has already been said. Yes, they are exotic “financial innovations” and, no, they are not regulated. But what difference does that make? There's always been snake oil and there's always been snake oil salesmen. Greenspan simply raised the bar a notch, but he's not the first huckster and he won't be the last. What really matters is underlying ideology; that's the root from which this economy-busting hydra sprung. 30 years of trickle down, supply-side gibberish; 30 years of idol worship for the waxy-haired reactionary, Ronald Raygun; 30 years of unrelenting anti-labor, free market, deregulated orthodoxy which inflated the biggest equity-Zeppelin in history. Now the bubble has sprung a leak and the escaping gas is wreaking havoc across the planet. There's food riots in Haiti, Egypt, and Kuwait. Wherever the local currency is pegged to the falling dollar, inflation is soaring and trouble is brewing. Also, European banks are listing from the mortgage-backed garbage they bought from trusted brokerages in the US and need central bank bailouts to stay afloat. It's just more fallout from the subprime swindle. Finance ministers in every capital in every country are getting ready for a 1930's-type typhoon that could send equities crashing and food and energy prices rocketing into the stratosphere. And it can all be traced back to the wacko doctrine of unlimited personal accumulation and its evil-spawn, neoliberalism. These are the theories that guide America's “bugger-thy-neighbor” monetary policies and spread financial turmoil to every city and hamlet around the world.

The present stewards of the system, Paulson and Bernanke, are incapable of fixing the problem because they represent the interests of the people who benefit most from the disruptions. Paulson's latest “blueprint” for the financial markets just proves the point; a more pro-business, self-serving scheme has never been put to paper. Gary North sums it up in his article “Really Stupid Loans”:

“With the Federal Reserve System's latest proposal, presented to the public by Secretary of the Treasury Henry "Goldman Sachs" Paulson, the FED is asking the United States government to make it the Great Protector of Capital....The new proposals will centralize power over finance in the hands of an agency that is officially run by the government but in fact is run by agents of the largest fractional reserve banks. ...Regulation by tenured staff economists will not make the system less fragile. It will make it more top-heavy and less flexible..

Some version of this plan will probably pass in the next Congress. No matter whether it does or does not, the direction is the same: toward an economy controlled by the federal government in conjunction with titular private ownership of the means of production, that is, toward fascism. (Gary North, “Really Stupid loans” lewrockwell.com)

That's right; Paulson and his flock of investment bank alchemists, who cooked up the poisonous stew of derivatives that paralyzed the bond market, now want congress to put the whole kit and kabootle under their authority. Right.
Michael S. Rozeff sums it all up his article “ The American Form of Government and the Paulson Plan”:

“The main result of the Paulson Plan will be increased government power over capital markets and their institutions. Certain large players will be cartelized under the enhanced regulatory umbrella. They will be under the government’s thumb. In subsequent crises, the government will move further toward capital controls and find it easier to do so.

To be totalitarian, a State needs to control investment, that is, the allocation of capital. Controlling the direction of finance is a means to control investment. That is the ultimate stopping point of government control over capital markets.” (The American Form of Government and the Paulson Plan, Michael S. Rozeff, lewrockwell.com)

And that's the whole point, to put the markets in the Fed's control so when the next financial crisis arises the Fed can bailout the bankers and hedge fund managers without consulting Congress.

Paulson's plan is a power-play pure and simple. The investment Mafia wants to control the financial system lock, stock and barrel. They want to liquidate the SEC and any other government watchdog agency and put the investment banks, hedge funds and brokerages on the honor system. It's the end of transparency and accountability which, of course, are in short supply already.

Comrade Paulson's blueprint fixes nothing. It's just another freebie for the parasite class. What the country really need is a few honest men who'll ride-herd on the Ken Lays and Jeffrey Skillings who presently run Wall Street. That doesn't require centralized power; just a rule book and a bullwhip.

Currently, Paulson and Bernanke are expanding the balance sheets of the GSEs so that Fannie Mae and Freddie Mac will underwrite 85% of all mortgages while FHA will cover 10% more. The mortgage industry is being nationalized to save banking fellowship while the taxpayer is on the hook for another $4.4 trillion of dodgy loans. It's a risky business and, once again, it's all ideologically driven. Paulson doesn't care if the taxpayer gets stuck with the bill. It's no skin off his nose. What bothers him is the prospect that, somewhere along the line, workers will demand higher wages to keep pace with inflation. Then all hell will break loose. Paulson and Co. would rather see the economy perish in a deflationary holocaust than add another farthing to a poor man's salary. He and his ilk take class warfare seriously; that's why they are winning. But their strategy also creates problems. When wages don't keep pace with production, demand decreases and the economy falters. That's what's happening now and Paulson knows it. Workers are over-extended and can't buy the things they make. They barely have enough to feed the kids and fill the tank for work. All the fat has been trimmed from the bone; there's nothing left. The only thing that's kept us from sliding into recession so far, has been the kookie banker's scam to maintain growth by easing lending standards and expanding credit. That turned out to be a real doozie; the whole thing blew up and left the banks' balance sheets ravaged and workers deeper in debt than anytime in history. Now consumer spending is nosediving at the same time the Fed's equity bubble is plummeting to earth. It looks like the plan to eliminate the standard criteria for lending money wasn't such a great idea after all. The global financial system has never been under greater strain.

Was it all part of a “vast right-wing conspiracy?”

Maybe or maybe not; it's hard to say. But neoliberalism does have a twenty-year record of producing the very same economic calamities. That's more than just a coincidence. What makes this crisis so different? The bankster globalists aren't bound by any silly feelings of patriotism. They would just as soon march the good old USA to the chopping block as any other unsuspecting nation; it makes no difference to them. It's just business as usual. After the equity bubble bursts and asset prices fall, the corporate vultures will swoop down and buy up vital resources and industries for pennies on the dollar. Its the same everywhere; Darwinian capitalism. Leave nothing but the bones behind.

Economist Michael Hudson anticipated many of the present-day developments in the financial markets in an amazingly prescient interview in counterpunch in 2003 called “The Coming Financial Reality”:

Michael Hudson: “Free enterprise under today's financial conditions threatens to bring about an unprecedented centralization of planning, not in the hands of government but by the financial conglomerates and money managers. Whatever government planning power is destroyed becomes available for them to appropriate, with plenty of vigorish left for the politicians whose campaigns they back and who will "descend from heaven" into high-paying private-sector jobs, Japanese style, after having performed their service for the new regime.

Question; Standard Schaefer: The financial regime is nothing but parasites?

Michael Hudson: “The problem with parasites is not merely that they siphon off the food and nourishment of their host, crippling its reproductive power, but that they take over the host's brain as well. The parasite tricks the host into thinking that it is feeding itself.
Something like this is happening today as the financial sector is devouring the industrial sector. Finance capital pretends that its growth is that of industrial capital formation. That is why the financial bubble is called "wealth creation," as if it were what progressive economic reformers envisioned a century ago. They condemned rent and monopoly profit, but never dreamed that the financiers would end up devouring landlord and industrialist alike. Emperors of Finance have trumped Barons of Property and Captains of Industry.” (Michael Hudson, “The Coming Financial Reality”, counterpunch)

Bingo. Hudson not only explains how finance capitalism is inserting itself into the governmental power structure but, also, predicts that “industrial capital formation”--which is the production of things that people can really use to improve their lives---will be replaced with complex debt-instruments and derivatives that add no tangible value to people's lives and merely serve to expand the wealth of an entrenched and increasingly powerful investor class.

Finance capitalism has “devoured landlord and industrialist alike” and created a galaxy of seductive liabilities which masquerade as assets. Derivatives contracts, for example, represent over $500 trillion of unregulated counterparty transactions; a “shadow banking system” completely disconnected from the underlying “real” economy, but large enough to send the world into a agonizing depression for years to come.

The goal of liberals should be to dismantle this corrupt Ponzi-system, which merely wraps debt in a ribbon, and rebuild the economy on a solid foundation of productive labor, worker solidarity and the making of tradable goods. That will restore competitiveness and reallign the political system.

Political power has to be taken from the financial mandarins or the disparity of wealth will continue to grow and democracy will wither. We've already seen our main institutions--- the courts, the congress, the media, and the presidency---polluted by the steady flow of corporate contributions which only serve the narrow interests of elites.

Henry Liu expands on this idea in his excellent article “A Panic-stricken Federal Reserve”:

“In the 1920s, the wide disparity of wealth between the rich and the average wage earner increased the vulnerability of the economy. For an economy to function with stability on a macro scale, total demand needs to equal total supply. Disparity of income eventually will result in demand deficiency, causing over supply. The extension of credit to consumers can extend the supply/demand imbalance but if credit is extended beyond the ability of income to sustain, a debt bubble will result that will inevitably burst with economic pain that can only be relieved by inflation.....More investment normally increases productivity. However, if the rewards of the increased productivity are not distributed fairly to workers, production will soon outpace demand. The search for high returns in a low demand market will lead to consumer debt bubbles with wide-spread speculation....Today, outstanding consumer credit besides home mortgages adds up to about $14 trillion, about the same as the annual GDP. ”

Voila. A strong economy requires a strong workforce and an equitable distribution of wealth. Otherwise, demand decreases and growth slows to a crawl. When money is concentrated in too few hands, the political system atrophies and becomes unresponsive to the needs of its people. That's when the nation's laws and institutions are reshaped to reflect the ambitions of rich and powerful.

Liu continues:

“A 2002 study released by Citizens for Tax Justice and the Children's Defense Fund reveals that under the Bush tax cut, over the next 10 years, the top 1% income recipients are slated to receive tax cuts totaling almost half a trillion dollars. The $477 billion in tax breaks the Bush administration has targeted to this elite group will average $342,000 each over the decade. By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52% of the total tax cuts will go to the richest 1% whose average 2010 income will be $1.5 million.” And, this; “In 2006, the chief executives of the 500 biggest US companies averaged $15.2 million in total annual compensation, according to Forbes business magazine’s annual executive pay survey. The top eight CEOs on the Forbes list each pocketed over $100 million.” “A Panic-stricken Federal Reserve; The shape of US Populism” Henry C. K. Liu, Asia Times)

The financial system is doing exactly what it was designed to do, it is crumbling from the decades-long trickle-down experiment. Social programs have been gutted, civil infrastructure is in tatters, legal protections have been savaged, and workers rights have been trounced. Is it any wonder why we're embroiled in an unwinnable war and the financial system is on its last legs?

None of this is accidental; it is the inevitable decline of a fatally flawed ideology; the Golden Calf of neoliberalism. But what will take its place? Where are the leaders who will fill the vacuum?

Here's an excerpt from Bernard Chazelle's article “Saving the American Left; A New Progressive Creed”:

“By virtually any measure, the United States is the least progressive nation in the developed world. It trails most of Western Europe in poverty rates, life expectancy, health care, child care, infant mortality, maternity leaves, paid vacations, public infrastructure, incarceration rates, and environmental laws. The wealth gap in the US has not been so wide since 1929. The Wal-Mart founders' family owns as much as the bottom 120 million Americans combined. Contrary to received opinion, there is now less social mobility in the US than in Canada, France, Germany, and most Scandinavian countries. The European Union attracts more foreign students than the US, including twice as many from China. Its consensus-driven polity, studies indicate, has replaced the American version as the societal model to which the developing world aspires.”

America has lost its luster; it no longer attracts freedom-loving young people seeking openness and a brighter future. There are better opportunities elsewhere and less hassle. The country needs a major face-lift. Restoring liberal values is pointless without a strong commitment to economic justice; the two are inseparable. The only way to break the stranglehold of Wall Street's financial Politburo is to level the playing field through greater wealth distribution. That's the best way to rekindle democracy and make America the land of opportunity again. And it all starts with giving America's workers a raise.