Thursday, November 13, 2008

Illegal tax scheme gives $140 billion to biggest US banks

Illegal tax scheme gives $140 billion to biggest US banks

By Bill Van Auken
Go To Original

An extra-legal measure quietly enacted by the Treasury Department in the shadow of the $700 billion Wall Street bailout package will hand the country's biggest banks another $140 billion windfall, the Washington Post reported this week.

In a five-sentence memo issued on September 30, on the eve of the first House vote on the bailout bill, the Treasury Department unilaterally overturned a two-decade-old tax law passed by Congress. The measure denied profitable companies the ability to shield their profits from taxation by buying up bankrupt firms as shell companies and using their losses as a tax dodge.

The law, section 382 of the tax code, was enacted by Congress in 1986. It was aimed at curtailing what was seen as an egregious corporate scamming of the tax system. The Republican right and corporate lobbyists have been pushing for the measure's repeal or amendment ever since.

Treasury Department spokesman Andrew DeSouza defended the action, telling the Post that the administration had the power to overturn a law passed by Congress as part of its mandate to interpret the tax code. He further insisted that the action was a necessary means of rescuing the banks from the financial meltdown.

"This is part of our overall effort to provide relief," he said.

The Post reported in its November 10 article: "More than a dozen tax lawyers interviewed for this story - including several representing banks that stand to reap billions from the change - said the Treasury had no authority to issue the notice."

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," George K. Yin, the former chief of staff of Congress's Joint Committee on Taxation, told the Post. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

The action by the Treasury Department has been dubbed the "Wells Fargo Ruling," as it apparently provided direct aid to the successful bid by Wells Fargo to buy up the failing Wachovia bank. According to sources cited by the Post, the tax change will net Wells Fargo $25 billion from the deal.

In other similar takeovers, PNC bank, enjoyed a windfall of $5.1 billion in its takeover of National City as a result of the scrapping of the tax law, while the Spanish Banco Santander gained another $2 billion because of the change when it gobbled up Sovereign Bancorp.

The clear aim of the tax measure was to steer the hundreds of billions of dollars that have been injected into the biggest private banks into the profitable buying up of their weaker competitors, thereby facilitating the concentration of economic power in the hands of a few giant banks, allowing them to exercise monopoly control over the financial system.

The cost of the measure will be paid by American working people, who will be faced with the slashing of funds for health care, education and other vital social programs in order to make up for the tax giveaway to the banks.

The most revealing aspect of the Post article is its depiction of the reaction of the Democratic leadership in the US Congress to the Treasury Department's usurpation of power through the unilateral repeal of a law by executive fiat.

As the article makes clear, neither Treasury Secretary Henry Paulson nor anyone else in the department bothered to inform Congress of the action.

While leading legislators were described as "outraged" when they discovered the action days later, they acted deliberately to keep it from being revealed to the American people.

"Lawmakers worried about discussing their concerns publicly," the Post reported. When a conference call was organized between Treasury and Capitol Hill staff members, the staff of Senator Max Baucus (Democrat-Montana), the chairman of the Finance Committee, "asked that the entire conference call be kept secret," the Post reported.

The newspaper quoted one congressional aide as saying: "We're all nervous about saying that this was illegal because of our fears about the marketplace. To the extent we want to try to publicly stop this, we're going to be gumming up some important deals."

Another aide told the Post, "None of us wants to be blamed for ruining these mergers and creating a new Great Depression."

The newspaper cited legal experts who compared the Democrats' spinelessness in their secret protests over the extra-legal measures by the Treasury Department to similar objections made before the Democratic leadership passed the measure granting the Bush administration unrestricted power to wage a war of aggression against Iraq.

This extraordinary episode has exposed the complete subservience of the Democratic Party to the interests of Wall Street and the willingness of its leadership to submit to an effective dictatorship exercised by finance capital in violation of the law and the US Constitution.

Paulson announces shift in Wall Street bailout scheme

Paulson announces shift in Wall Street bailout scheme

By Bill Van Auken
Go To Original

In an abrupt about-face reflecting the desperate character of the crisis of the US and world financial system, US Treasury Secretary Henry Paulson announced Wednesday that he has abandoned the plan that he pushed through Congress barely one month ago to buy up so-called "toxic assets" on bank balance sheets. Instead, he said the bailout will focus entirely on direct injections of public money into a broader array of financial institutions.

The official revision of a plan that was put in place ostensibly as the only means of forestalling a financial meltdown triggered a further sharp fall on the stock market, which interpreted the shift as a sign of disarray. The market had already been battered by multiple reports of collapsing consumer spending, falling corporate profits across a variety of economic sectors and impending layoffs. The Dow Jones Industrial Average fell for the third straight day, ending the session down 411.3 points, with a combined loss of 9 percent since the beginning of the week.

In explaining how the $700 billion bailout plan had been so sharply revised that its very name—the Troubled Asset Relief Program, or TARP—had been rendered obsolete, Paulson commented that the proposal to buy up mortgage-backed securities had "looked like the way to go," but "as the situation worsened, the facts changed."

The treasury secretary indicated that in the month since the enactment of the program, the crisis that has toppled major finance houses and threatened the country's largest banks with collapse has only spread, threatening to trigger a meltdown of the critical consumer credit market. The growing fear is that the unraveling of this sector could lead to the freezing up of consumer credit, accelerating a downward spiral into depression.

While Paulson claimed that the economy has already shown "signs of improvement" as a result of the Wall Street bailout and similar measures taken internationally, he went on to issue a warning that seemed to belie this claim: "Our financial system remains fragile in the face of an economic downturn here and abroad and financial institutions' balance sheets still hold significant illiquid assets; market turmoil will not abate until the biggest part of the housing correction is behind us."

"The thing I am grateful for is we were prescient enough and Congress was, that we got a wide array of authorities and tools under this legislation," Paulson continued. "And I will never apologize for changing an approach or a strategy when the facts change."

Indeed, the bailout bill passed by Congress on October 3 granted Paulson, the former CEO of Goldman Sachs, virtually unrestricted powers to dole out public funds to his former cohorts on Wall Street.

Paulson indicated that the government would expand its direct investment in both banks and other financial institutions, which was launched on October 14 with the plan to pour $250 billion into the country's major banks. The new investments will go as well to non-banking companies that trade in credit card, student loans, car loans and other forms of consumer debt.

He also said that the government was considering a scheme in which it would match investments made by private financial institutions, though it was unclear under current conditions who would be seeking to make such investments.

While both Paulson and the corporate media attempted to present this expansion of the program as a boon to students and consumers and a stimulus for job creation, the money is to be directed not at bailing out working people struggling to keep their heads above water, but rather at rescuing the financial companies that extend credit and then securitize debts, packaging them together and selling them to investors in what until recently had proven a highly profitable form of financial speculation.

The crisis in the consumer credit market found expression this week in the move by American Express Co. to convert itself into a bank-holding company, in order to become eligible for bailout funds. The high-end credit card company has seen a doubling of its default rate over the past year.

Paulson reported that the Treasury has already poured $115 billion in taxpayer money into eight large financial institutions and that it has approved "dozens of additional applications" for the federal money from other banks seeking a share of the $250 billion allotted for the government to purchase preferred shares in these institutions.

Under this plan, the government explicitly pledged not to exercise its voting rights on the shares it has purchased, thereby exercising no power over the use the banks will make of the hundreds of billions of dollars they are receiving from the public treasury.

There is ample evidence that the banks, rather than lending the money gained from the Treasury injections, are hoarding it and preparing to use it to pay out dividends to shareholders and bonuses to top executives as well as to gobble up smaller competitors.

According to one estimate, the country's nine largest banks, which together are receiving $125 billion in public capital injections, will likely pay out $25 billion—fully 20 percent of this money—in the form of dividends to wealthy shareholders within one year of receiving it.

According to Bloomberg News, Goldman Sachs and Morgan Stanley, which together received $20 billion in bailout injections, have set aside a combined $11 billion in bonuses to be paid out to top executives, traders and investment bankers, whose median annual salary before such awards is nearly $400,000—almost ten times that of an average American worker.

The Treasury Department has refused to comment on the upcoming taxpayer-funded bonus bonanza, and the legislation approving the bailout includes no restrictions on such payouts. It has likewise rejected calls to compel the banks to lend the money it is receiving from public coffers. The department official responsible for the bailout, Neel Kashkari, insisted last week that he will not "micromanage" bank lending decisions.

Another little-noted corollary to the bailout legislation, which is just now receiving some media attention, is an extra-legal move by the Treasury Department in September to change the tax code so as to encourage bank takeovers and allow major banks to evade some $140 billion in taxes in the process (See: "Illegal tax scheme gives $140 billion to biggest US banks").

The abandonment of the initial proposal to use so-called reverse auctions to buy up "toxic assets" reflected the difficulty in setting a price for these mortgage-backed securities. Buying them up at current market prices would have forced the banks to write down huge losses, intensifying the threat of bankruptcies.

Having already doled out $250 billion in direct capital injections for the banks, together with another $40 billion approved this week in the expansion of the effort to prop up the failing insurance giant, American International Group (AIG), the Treasury has only $60 billion left in its first installment of the bailout. Afterwards, it must return to Congress to release $350 billion more, an action that may not take place until after President-Elect Barack Obama takes office in January.

While insisting that hundreds of billions of dollars must be handed out to banks and financial speculators with no strings attached, Paulson took a decidedly different attitude toward calls for money from the $700 billion bailout to be used to prop up the failing auto industry or to aid homeowners confronting foreclosure.

"We care about our automotive industry, when you look at autos and that whole food chain, it is critical," Paulson said. "We need a solution, but that solution has got to be one that leads to viability... the intent of the TARP was to deal with the financial industry."

In other words, while unlimited resources can be lavished on the banks and finance houses, the future of the auto industry must be based on "viability," that is, the restoration of profitability through the destruction of jobs, the slashing of wages and the elimination of benefits for the workers who remain.

The same principle was invoked in relation to homeowners, two million of whom have already been foreclosed, with millions more facing the prospect of being thrown out of their homes. "I just can't tell you how many proposals I've looked at to modify mortgages and keep people in their homes," the Treasury Secretary said, calling the problem "very complicated" and insisting that there are "no easy answers."

"We must be careful to distinguish this type of assistance, which essentially involves direct spending, from the type of investments that are intended to promote financial stability, protect the taxpayer and be recovered," Paulson declared.

This is a fraud. Money for embattled workers and homeowners is "assistance" and "spending," while billion that are being provided to pay out bonuses and dividends to multi-millionaires are "investments" designed to "protect the taxpayer."

Nothing could make clearer the thrust of the so-called "financial rescue" program being carried out by Washington with the support of both major parties. It amounts to a systematic plundering of social wealth to benefit a narrow financial aristocracy, paid for through a massive assault on the conditions of life of the broad mass of working people.

Auto workers to pay for Big Three bailout

Auto workers to pay for Big Three bailout

Go To Original

What will the government bailout of the US auto industry being pushed by President-Elect Obama and the Democratic Party mean for auto workers? The answer to this question is indicated by New York Times columnist Thomas Friedman in an op-ed piece published on Wednesday.

Friedman, a prominent voice of the American liberal establishment, attributes the near-bankruptcy of the Big Three auto companies—General Motors, Ford and Chrysler—to "the combination of a very un-innovative business culture, visionless management and overly generous labor contracts." It is against the last item on his list that his ire is particularly directed.

GM's health care costs, i.e., the already diminished benefits that help millions of active and retired workers and their family members defray soaring medical costs, are "outrageous," he declares. He then writes: "But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in the Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper."

Friedman proceeds to quote at length the bailout conditions advocated by Ingrassia:

"‘In return for any direct government aid,' he wrote, ‘the board and the management [of GM] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver—someone hard-nosed and nonpolitical—should have broad power to revamp GM with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company.'"

That new union contract concessions will be part of any bailout is underscored by an article in Wednesday's Wall Street Journal, which reports, "Obama advisers are also examining union work rules that could be put on the bargaining table..."

In his Wall Street Journal article published on Monday, Ingrassia elaborates on the implications for workers of his bailout proposal. Like Friedman, he writes indignantly of decades (now ended) during which Big Three workers received "gold-plated medical benefits that virtually no one else had," under which United Auto Workers members had "no deductibles, copays or other facts of life in these United States."

Clearly, whatever remains of such an intolerable state of affairs will have to go!

"After all that," Ingrassia writes, "the company can float new shares, with taxpayers getting some of the benefits." The bulk of the benefits, however, will go to big investors who buy up shares in the downsized and more highly exploitative company.

Ingrassia holds up as a model for an auto bailout "the role played by the federal Air Transportation Stabilization Board in doling out taxpayer dollars to the airlines in the wake of 9/11." This government board "did its job," he writes, "selling government-guaranteed airline loans and warrants to private investors..."

The Bush administration board did indeed "do its job." It oversaw a savage assault on the jobs, wages and working conditions of airline workers in order to restore the industry to profitability and create the conditions for banks and big investors to once again reap huge gains from the industry. This involved strike-breaking and union-busting at Northwest and other airlines.

This is precisely the idea behind the current negotiations on a government bailout of the Big Three. It is of a piece with the entire bailout program for Wall Street sanctioned by the Democratic Congress and carried out by former Goldman Sachs CEO and current treasury secretary, Henry Paulson.

Times columnist Friedman demands that tens of thousands more auto jobs be destroyed and that the wages and benefits of those who remain, as well as the pensions and health benefits of retirees, be gutted as part of any infusion of taxpayer money into the auto companies. But he demands no such conditions on the hundreds of billions of dollars being doled out to the banks.

The Paulson bailout, which the Times supports, imposes no restrictions on how the banks spend their government money, or how the Treasury allocates the $700 billion-plus slush fund. Since the program was passed by Congress last month, it has emerged that the big banks that are getting the bulk of the cash are refusing to use it to provide loans to businesses and consumers. Instead, the government windfall is going to pay dividends to satisfy major shareholders, finance some $40 billion in previously enacted compensation packages to top executives, and buy up smaller banks.

Friedman allocates blame for the collapse of the US auto industry more or less equally to the auto executives and the UAW. In reality, the crime of the UAW was to abandon any defense of the interests of auto workers, collaborate in plant closures, wage cuts and other concessions, and integrate itself into the corporate structure in order to defend the interests of the bureaucracy that controls the organization. The present situation demonstrates that the immense sacrifices imposed on the workers with the UAW's assistance were never used to modernize the industry, but rather to satisfy the avarice of major investors and provide multi-million-dollar payouts to top executives.

Friedman's column exposes the class interests driving all of the measures being taken in response to the economic crisis. In the figure of Friedman himself—smug, complacent, affluent and ignorant—one sees an embodiment of the upper-middle-class and ruling class layers that constitute the social base of the Democratic Party and the politics and ideology of American liberalism.

Auto workers bear no responsibility for the collapse of the auto companies. Their labor, and that of generations that went before them, built the industry and created the vast wealth that was monopolized and squandered by the corporate heads and the American financial élite. They should oppose the bailout schemes being worked out between Obama, the Democratic Congress, the UAW and Bush and prepare for mass strike action to defend their jobs and living standards. This should become the starting point for a political struggle to mobilize the entire working class against Wall Street and both of its parties and to fight for a socialist policy based on the nationalization of the auto industry and its transfer to public ownership under the democratic control of the working population.

Foreclosure rates up 25 percent year-over-year

Foreclosure rates up 25 percent year-over-year

The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.

More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.

More than 84,000 properties were repossessed in October, RealtyTrac said.

A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market. By the end of the year, the company expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.

The collateral damage in the financial markets forced the government to pass a $700 billion financial rescue package last month. The plan was initially to buy bad assets from banks, but Treasury Secretary Henry Paulson said Wednesday that the rescue package won't purchase those troubled assets.

That plan would have taken too much time, he said, so instead the Treasury will rely on buying stakes in banks and encouraging them to resume more normal lending.

Also Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones. The program was launched Oct. 1, but there are concerns that lenders won't participate because they have to voluntarily reduce the value of a loan and take a loss.

In RealtyTrac's report, three states — Nevada, Arizona, Florida — had the nation's top foreclosure rates. Nevada posted the nation's highest rate for the 22nd consecutive month in October.

In Nevada, one in every 74 homes received a foreclosure filing last month. Arizona saw one in every 149 housing units receive a foreclosure filing, and in Florida it was one in every 157 homes.

Other states in the top 10 were California, Colorado, Georgia, Michigan, New Jersey, Illinois and Ohio.

However, RealtyTrac noted that, while California had the highest total number of foreclosures in October, the rate in that state was down 18 percent from the previous month.

James J. Saccacio, chief executive officer of RealtyTrac, said new laws requiring delays in the foreclosure process have reduced the volume of foreclosure filings in several states. In California, lenders are now required to contact borrowers at least 30 days before filing a default notice. A similar law in North Carolina gives borrowers an extra 45 days.

"While the intention behind this legislation — to prevent more foreclosures — is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures," Saccacio said. "And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in these states."

Among cities, Las Vegas had the highest October foreclosure rate among the 230 metro areas tracked in the report, with one in every 62 housing units receiving a foreclosure filing.

Four Florida metro areas ranked in top 10 — Cape Coral-Fort MyersFort Lauderdale eighth and Orlando 10th. California also had four metro areas in the top 10: Stockton fourth, Merced fifth, Riverside-San Bernardino seventh and Modesto ninth. was second, Miami third,

The remaining member of the top 10 was Phoenix, which came in sixth.

Desperate Big Pharma Pushing to Double Statin Sales

Desperate Big Pharma Pushing to Double Statin Sales

By Byron J. Richards

Go To Original

In the face of overwhelming negative science the statin marketing machine marches on, now suggesting that statins should be given to middle aged men and women even though they don’t have elevated cholesterol. Apparently there is a critical mass of Big Pharma backed statin-pushers who have hoodwinked a nation under the false pretense of cardiovascular health and are now ready to go for the jugular. I have a few questions for any statin believers who happen to read this article: “If statins are so great then why does your liver see them as a poison that must be detoxified? Did your liver forget to read the American Heart Association’s press release?”

It is my opinion that statins do little more than put your cardiovascular system in a wheelchair, especially when combined with other troublesome medications like blood pressure pills. There is a reason that the more aggressively these medications are used, especially with diabetics, the faster people die. It is a sad commentary on modern medicine that their best efforts to promote quality of cardiovascular health in the over 50 crowd is a collection of de-energizing and de-pressurizing anti-survival medications that have the net result of treating every person so managed as if they are Humpty Dumpty about ready to fall off a cardiovascular cliff.

In the world of fast food medicine numbers on paper are far more important than you, a dumbed down version of medicine suitable for most of those now practicing the subject. Big Pharma’s task of brainwashing the American public into this system of health is getting progressively more difficult. The generation of utterly brainwashed older Americans has almost been completely wiped out by these drugs. Those in their 60s and 70s are a little bit smarter, but still far too many are in a trance when their doctors speak. Those in their 50s are more likely to protest, but only so far as to wish their doctors would incorporate more natural and preventive solutions. The majority of Americans over 50 will still jump off whatever bridge their doctor points to. Most of these drug-popping people would laugh at how dumb anyone is for being in any cult, not even able to see they are a part of the Big Pharma cult making tens of billions in fraudulent profits every year.

Think about it for a minute. How did Eli Lilly have the money to buy ImClone for 6.5 billion dollars in cash during the worst financial meltdown in the history of the United States? Answer: they stockpiled billions of dollars by defrauding taxpayers with off label sales of dangerous brain meds like Zyprexa and Cymbalta, preying on disadvantaged individuals (both old and young) and collecting the money through Medicaid and Medicare at taxpayer expense (and actually got themselves included in the bailout to keep this scam going indefinitely). In this new world of nonsense, the Wall Street Journal reported than ImClone, on paper, is worth more than General Motors! And ImClone sells near worthless biotech cancer drugs that don’t cure cancer but keep people alive just long enough to bilk them of their entire life savings before they die ($30,000 for each 8 weeks of treatment). The Big Pharma motto is: Manage symptoms, manage numbers, and never under any circumstances make someone healthy so they don’t need a drug.

The questionable practice of cardiovascular preventive medicine, fueled by false “independent” groups like the American Heart Association, is a main power behind the fraudulent promotion of the 20 billion-dollar-a-year statin racket. Scientists around the country shake in their boots at the notion of stepping on any statin toes with the truth. Not that they really have to worry, since almost all major medical marketing magazines (otherwise known as scientific journals) refuse to run any study counter to the statin propaganda for fear of losing advertising dollars. Only in smaller journals from other countries can we see any truth trying to poke its head up out of the sand.

With that brief background, let’s have a look at the latest round of misinformation coming from the American Heart Association and its friends. It’s that time of year, the annual meeting of the American Heart Association. Missiles are shot at vitamin E, while trumpets blare as the statin red carpet rolls out.

The Jupiter Study

This year’s propaganda showpiece is the Jupiter study. Here is the official party line, so elegantly reported by the New York Times: “A large new study suggests that millions more people could benefit from taking the cholesterol-lowering drugs known as statins, even if they have low cholesterol, because the drugs can significantly lower their risk of heart attacks, strokes and death. The study, involving nearly 18,000 people worldwide, tested statin treatment in men 50 and older and in women 60 and older who did not have high cholesterol or histories of heart disease. What they did have was high levels of a protein called high-sensitivity C-reactive protein, or CRP, which indicates inflammation in the body. The study, presented Sunday at an American Heart Association convention in New Orleans and published online in The New England Journal of Medicine, found that the risk of heart attack was more than cut in half for people who took statins.”

This sounds great, except the original risk in the study group was negligible. The data actually means that 120 people would need to take Crestor for 2 years to prevent 1 heart attack or stroke. At a cost of $3.45 a day, that’s $300,000 for Big Pharma to stop one problem. Excuse me, but the only news here is the potential bilking of taxpayers and insurance companies.

Crestor, the statin drug used in this study, is the most toxic of all statin drugs. It works by overwhelming your liver’s ability to clear it. A Public Citizen petition to the FDA to have this drug removed from the market was denied, as the current FDA is nothing more than a gatekeeper for Big Pharma profits. Unless corpses are showing up in droves at their door (as with the statin Baycol) the FDA looks the other way no matter what damage is being done.

The five-year Jupiter study was stopped after two years, under the pretense of overwhelming success (normally studies are stopped because of adverse effects). Since the side effects of any statin are progressive and cumulative over time, it is likely that the real reason the study was stopped was to publish favorable results before the predictable adverse side effects had time to manifest. Even in this short two-year period there was a 20% increased risk for diabetes from taking Crestor – a fact that was conveniently downplayed.

This study will be used to promote the sale of dangerous statin drugs to double the current number taking them (which is now at 17 million). First a person will need a test to see if they even have elevated CRP, which of course implies someone pays for the test. The leader of the Jupiter study, Dr. Paul M. Ridker, by some strange coincidence is the co-inventor of the CRP test. Does anyone smell a financial rat?

Exercise Reduces CRP, Extends Life, and Doesn’t Cost Anything

I’m all in favor of anyone reducing their inflammation level to enhance their health. After all, life can rack up a lot of wear and tear. There is no one pill that will fix the wear and tear in your life. You need adequate rejuvenating sleep, good stress management skills, a healthy diet, and exercise. It is actually a project to be healthy. The time you spend at it extends your life, so the idea that you don’t have enough time to do healthy behaviors is illogical.

The most effective way to lower your CRP is to be physically fit. Your aerobic capacity is a direct predictor of your CRP level. The more aerobically fit you are the lower your CRP. This is not only true for healthy people; it is true for people with type II diabetes.
Aerobic exercise has been proven to extend your life, rejuvenate your heart, reduce virtually all inflammatory diseases of aging – and it doesn’t cost a penny. Now why should society pay excessive money for statins for prevention when all people need to do is get off their duffs and exercise? There is no combination of cardiovascular drugs that can beat out aerobic fitness in any study showing extension of quality life.

AHA Makes Sure to Attack Vitamin E

Big Pharma is always terrified that people will take vitamins that have virtually no side effects and are a fraction of the cost, instead of their extremely dangerous drugs. Thus, part of the Big Pharma agenda is to use the American Heart Association meeting to not only promote statins but to directly attack vitamin E and other antioxidants.

For example, back in 2004 when the statin powers wanted to endorse lowering LDL cholesterol to abnormally low levels, they simultaneously promoted at their yearly AHA meeting bogus science saying that vitamin E increased the risk of death! (A complete fallacy.) Outside the AHA marketing meeting the chairman, Dr. Raymond Gibbons of the Mayo Clinic in Rochester, Minnesota, was holding a dog and pony show press conference: “I spend all my time trying to tell patients why they should not take vitamin E. Too often in terms of the supplements there’s very scant science. In this area, we have the science. Vitamin E doesn’t work.” He implored his captive audience of reporters to help him convince patients to stop taking Vitamin E and take the “proven” drugs. The next day, all major media ran the story telling consumers vitamin E was dangerous. Program effective. Damage done.

This wonderful formula of success is once again in play, this time as the AHA tries to convince people without high cholesterol to take statins. JAMA released their “big” vitamin E study just in time for this week’s AHA meeting. The study shows that vitamin E and C don’t help heart disease in a large group of doctors. The vitamin E used in the study is a worthless synthetic produced from coal tar by the German drug company BASF, not at all a quality natural vitamin E that would do the job.

It doesn’t take a genius to figure out why these drug pushers are trying to attack vitamin E and vitamin C. In the Jupiter study Crestor reduced CRP by 37%. A daily dose of 1200 IU of natural vitamin E (not synthetic garbage from BASF) reduces CRP by 32% and 1000 mg of vitamin CCRP elevates from 25% – 40%. A combination of 1000 mg of C and 800 IU of vitamin E not only prevents this increase of CRP during dieting; it reduces it by 32%. Vitamins C and E are quite friendly to your liver, statins are not. And the nutrients are far less costly than the drug. a day reduces CRP by 25%. It is also known that when individuals try to lose weight on a higher fat/low carb diet their

While many Americans believe, like president-elect Obama, that health care is a right, the reality is that no society can pay for drugs and services that do not actually show true health as a result of the treatment. Unless the use of a drug-based protocol can produce a cure and a return of health in a definable period of time (meaning the drug is no longer needed), there should be no obligation for society to be burdened with the costs of the fraudulent practice of medicine. Doing so amounts to a Big Pharma con job, with billions of tax payer dollars winding up in companies who have produced nothing of value. Numbers on paper are meaningless. Quality of health and extended years of quality life are the only products of value. It is time for Western Medicine to put up or shut up.

Congressman calling for hearings on AIG Phoenix conference

Congressman calling for hearings on AIG Phoenix conference

Josh Bernstein

Go To Original

U.S. Rep. Elijah Cummings (D-MD) now says he will be calling for Congressional hearings after an ABC15 undercover investigation showed AIG executives holding poolside meetings at a Phoenix resort and dining at an upscale restaurant.

"A lot of this is about trust, and when you breach the American people's trust there's a problem," Cummings said. "It's not just about AIG. It's bigger than that. We've got to send a message to these folks that they're not going to screw us."

Cummings is demanding answers about AIG's Asset Management Conference held at the Pointe Hilton Squaw Peak Resort in Phoenix and calling for the resignation of AIG CEO Edward Liddy.

Cummings said he will be meeting with Rep. Harry Waxman (D-CA) as early as Thursday to discuss hearings.

Video Congressman Elijah Cummings discusses AIG conference

The conference held last week cost AIG approximately $343,000, but an AIG spokesperson said they expect sponsors to reimburse the company for about 90 percent of those costs.

"It was not an executive retreat," Liddy said on CNN's Larry King Live Tuesday night, acknowledging "we thought there was a good chance it would be received poorly."

Nearly 150 independent financial planners attended the conference, as did several AIG executives including Larry Roth, President & CEO, AIG Advisor Group; Art Tambaro, President & CEO, Royal Alliance Associates; Mark Schlafly, President & CEO, FSC Securities; Gary Bender, Senior Vice President, Investment Advisory Services; Bruce Levitus, Senior Vice President, Investment Advisory Services; and Stuart Rogers, Senior Vice President.

Cummings told ABC15 he spoke to Liddy and was briefed on Liddy's interview on CNN, but was not satisfied with what he heard.

According to Cummings, Liddy told him that there were no company executives attending the Phoenix conference.

"I mean, that's enough by itself to send me berserk," Cummings said.

Video Arizona Director of Americans for Prosperity Tom Jenney speaks out

AIG made significant efforts to keep a low profile at the conference, instructing the hotel not to post any signs with AIG's logo.

"Clearly they're trying to hide things," said Tom Jenney, Arizona director of Americans for Prosperity. "What the people at AIG need to realize is that they are now government employees and we taxpayers do not like to see our government employees going on extravagant junkets."

Click here to view our undercover investigation.

AIG Statement 11/11/08

Edward M. Liddy, Chairman and Chief Executive Officer of American International Group, has issued the following statement:

"Recent news reports have grossly mischaracterized an American International Group seminar for 150 independent financial planners held in Phoenix last week.

The financial planners are not AIG employees. In addition, the cost to AIG for this event was minimal. More than 90 percent of the costs were paid either by sponsors or by the independent financial planners themselves.

It is essential for AIG to conduct seminars of this kind to keep independent financial planners abreast of investment products and services including those offered by AIG. The financial planners are responsible for generating almost $200 million in revenue this year for AIG as of September 30th.

On October 10, I issued a directive to all AIG employees and subsidiaries to reduce expenses and conserve cash, including cancelling all nonessential conferences or meetings, unnecessary travel and excessive overhead. Since then, we have canceled more than 160 events. We conducted a top-to-bottom review of all expenses of the Phoenix meeting in advance and found that it was consistent with my October 10th directive. This conference was approved because it provides the kind of communication we must conduct with the people who sell our products if we are to be successful and repay the U.S. taxpayer."

American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo. >p>

Statement from Citizens Against Government Waste

The nation's premier taxpayer watchdog group, Citizens Against Government Waste (CAGW), today reacted to an investigative report by KNXV ABC15 in Phoenix, Arizona. CAGW President Tom Schatz issued the following statement:

"This morning's news that the federal government has increased its stake in AIG to $150 billion should exacerbate the taxpayers' outrage over the KNXV November 7 investigative report about the posh conference held by the company at the Pointe Hilton Squaw Peak Resort in Phoenix. AIG executives should be ashamed of themselves. Individuals across the country are on the precipice of financial ruin while AIG personnel still attend extravagant getaways at the taxpayers' expense.

"It is incredible that senior AIG executives would hold such an event following the dust up last month over the $440,000 conference near Los Angeles. After being castigated by the media, Congress, and taxpayers, AIG pledged to cancel more than 160 conferences. Apparently the stylish event in Phoenix escaped the ax. While an AIG spokesman claimed that 90 percent of $343,000 cost of the conference would be paid by outside sponsors, that statement has as much credibility as the claim that taxpayers would only have to pay $85 billion to bailout AIG – a figure that today increased by 76 percent over the original estimate.

"Taxpayers should be demanding complete accountability and transparency for every penny being spent on the Wall Street bailout. Yet the KNXV report shows the AIG tried to hide its sponsorship of the conference. In addition, news reports indicate that the Federal Reserve will not identify the recipients of almost $2 trillion in emergency loans nor the type of collateral it has received in exchange for those loans.

"Congratulations to KNXV for providing information about where at least some of the bailout money is going. That is more than the participants in this unprecedented expenditure of the taxpayers' money have been doing to date."

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

Statements from Conference Sponsors

Below are statements from some of the companies involved in sponsorship of the AIG Asset Management Conference in Phoenix. Others have been contacted, but they have not responded as of this posting date.

Oppenheimer Funds-
"As a policy we don't disclose sponsorship amounts or the status of payment, however I can confirm that we sponsored this event."

Brinker Capital-
"As is the case with all of the conferences in which we participate, our commitment to the AIG Asset Management conference was made in January. We were very pleased to participate in this conference, along with some of America's top financial advisors, particularly at this troubling time in our country when Americans need prudent financial advice more so than perhaps at any time in the recent past. As a privately-held firm, we do not make public any of our financial information."

Curian Capital-
"Curian was a sponsor of AIG's 2008 Asset Management Conference in Phoenix. We felt it was a valuable opportunity to educate more than 150 top advisors, the quality of which are not in dispute, on Curian's investment platform. Curian has more than 450 broker-dealer relationships that provide access to more than 40,000 advisors nation-wide."

Invesco Aim-
"Invesco Aim occasionally sponsors conferences dedicated to educating and training financial consultants to meet the needs of their clients as part of our cornerstone belief that the expertise and guidance an advisor can offer are essential to successful financial planning."

Hard Times, But Big Wall Street Bonuses

Hard Times, But Big Wall Street Bonuses

Go To Original

It's no secret that investment bankers are well-compensated, mostly through year-end bonuses, especially during bull markets.

But can they still count on those big bonuses this year, in the midst of the financial crisis and market freefall?

CBS News correspondent Priya David spoke with several compensation consultants who said that, even in this economy, firms are worried that, if they don't pay out the bonuses, they'll lose their top talent -- people they want to keep around for when pastures turn green again.

On The Early Show Wednesday, David reported that lawmakers and taxpayers alike are concerned about where the money for those bonuses will come from.

For Wall Street workers still employed, there could be a hefty bonus in their checks next month.

According to a report from financial news agency Bloomberg, Goldman Sachs, for example, has set aside $6.8 billion for bonuses, and Morgan Stanley, $6.4 billion.

And the chairman of the House Financial Services Committee, Massachusetts Democrat Barney Frank, isn't happy. "These are people who lost enormous amounts of money," Frank observes. "How do you give a bonus to someone for having failed so badly as many of these people did?"

What's got many on Main Street and Capitol Hill angry, David says, is the possibility that some of the $700 billion government bailout package could go into the pockets of Wall Streeters to pay their bonuses.

"All of the money is to go into new loans," Frank points out. "None of it is to go into compensation of any kind for the employees."

New York State Attorney General Andrew Cuomo has opened an investigation into the Wall Street bonuses. He sent a letter to nine financial institutions, demanding "a detailed accounting regarding your expected payments to top management in the upcoming bonus season."

Cuomo told CBS News, "These are tax dollars that are going to these institutions, and I believe the taxpayers have a right to hold the institutions accountable for what they're doing with their money."

The bailout package specifies that the top five executives of a company cannot get a golden parachute, but doesn't limit compensation for any other employees. Some observers, such as financial expert and reporter Stephen Gandel, say bonuses are expected to be down, but not as much as they might have been without the bailout.

Gandel, who's a Money magazine senior writer and contributor to says, "Compensation should be down 70 percent but, because all this new money is coming from the government, the firms are now saying they can pay more, and so they're only going to cut bonuses by 40 percent."

Even without bonuses, the mean annual salary for a securities industry employee was just under $400,000, David notes, ten times more than the average U.S. worker.

One woman in New York's financial district remarked to David, "You have people losing their houses, people on the street, they can't feed themselves, while these people are just banking on (their bonuses)."

There's a shroud of secrecy around hundreds of billions of government dollars that have been given to Wall Street outside of the bailout money. The Federal Reserve has refused to say which banks are getting how much of that pie, and now one financial news agency, Bloomberg, is actually suing to get that information.

GLOBAL MARKETS-US stocks plunge on Paulson comments, oil falls

Go To Original

* U.S. stocks plunge after shift in U.S. bailout program

* U.S. crude futures drop to 21-month low under $56 barrel

* Government debt advances as stock losses spur safety bid

* Yen soars across the board, dollar to yen falls below 95 (Corrects to say "capital needs of both banks and non-bank financial institutions" in paragraph 2, instead of just "non-bank financial institutions")

By Herbert Lash

NEW YORK, Nov 12 (Reuters) - U.S. stocks plunged on Wednesday after a shift in how the U.S. government will use its $700 billion bailout fund fed uncertainty and oil prices slid to 21-month lows on fears of a deep global recession.

U.S. Treasury Secretary Henry Paulson said he was backing away from buying troubled mortgage assets and would focus on the capital needs of both banks and non-bank financial institutions.

Banking shares took the brunt of the government's shift in how to address a credit crisis whose genesis lies in the slumping U.S. housing market. Shares of Citigroup (C.N: Quote, Profile, Research, Stock Buzz) fell below $10 for the first time since it became a public company.

The shift in government plans caught investors off-guard.

"A lot of clarity is missing," said Paul Nolte, director of investments at Hinsdale Associates in Hinsdale, Illinois.

"It's just a different direction, and every time that we hear about this, we're bailing somebody else out and we're throwing money in another direction without having a clear plan or objective in mind."

Paulson's comments also underscored the head winds the U.S. economy faces, adding to the slide in stocks and feeding a bid for such safe-haven assets as government debt and the yen.

The threat of deflation, which would hurt corporate profits, also slammed stocks and made risk-averse investors steady buyers of U.S. Treasuries.

Sterling tumbled to a six-year low against the dollar and a record trough against the euro after the Bank of England warned the British economy will shrink sharply next year. Its governor bolstered expectations of aggressive interest rate cuts.

The pound traded as low as $1.4898, the weakest level since June 2002, and the U.S. dollar fell sharply against the yen as investors shunned riskier assets.

Oil fell more than 5 percent to less than $56 a barrel at one point after the U.S. government again chopped its forecast for global demand due to slowing economic growth around the world.

U.S. crude CLc1 ,which peaked at more than $147 a barrel in July, fell $3.17 to settle at $56.16 a barrel, its lowest settlement since January 2007.

Fresh signs of economic weakness also pummeled stocks. The top U.S. electronics retailer. Best Buy, warned that the business climate was the worst in 40 years and said consumer spending is falling fast, adding more evidence of pending economic gloom.

The Dow Jones industrial average .DJI closed down 411.30 points, or 4.73 percent, at 8,282.66. The Standard & Poor's 500 Index .SPX was down 46.65 points, or 5.19 percent, at 852.30. The Nasdaq Composite Index .IXIC was down 81.69 points, or 5.17 percent, at 1,499.21.

The technology-rich Nasdaq marked its lowest close since May 2003, and the S&P's close was less than 4 points off a 5-1/2-year low.

Shares of Best Buy (BBY.N: Quote, Profile, Research, Stock Buzz) fell 8 percent, and the S&P retail index .RLX fell 5.8 percent.

Banking shares fell harder, with the S&P financial index down 6.9 percent. Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) fell 9 percent and American Express (AXP.N: Quote, Profile, Research, Stock Buzz) fell 10.5 percent.

Data from Europe added to the gloom. Euro zone industrial production fell a larger-than-expected 1.6 percent, while British unemployment rose to its highest level in more than a decade in the three months to September.

The Bank of England said the British economy would shrink sharply next year and inflation could be less than 1 percent.

News from Europe "just reinforced market expectations that global recession is still in the cards," said Ronald Simpson, managing director of global currency analysis for Action Economics in Tampa, Florida. "We're probably going to continue to see downward pressure on the euro and the pound in particular."

European shares slid, led by banks and oil companies on worries of more losses and a darkening economic picture, and as Wall Street fretted over changes to the U.S. government's financial sector bailout plan.

The FTSEurofirst 300 index of top European shares ended 3.4 percent lower at 853.88 points.

BP (BP.L: Quote, Profile, Research, Stock Buzz), StatoilHydro (STL.OL: Quote, Profile, Research, Stock Buzz) and Banco Santander (SAN.MC: Quote, Profile, Research, Stock Buzz) were the biggest drags on the benchmark index.

BP fell 4.6 percent, StatoilHydro shed 10.7 percent and Santander fell 7.6 percent.

The benchmark 10-year U.S. Treasury note rose 29/32 in price to yield at 3.65 percent. The 2-year U.S. Treasury note rose 6/32 in price to yield 1.17 percent.

The dollar rose against a basket of major currencies, with the U.S. Dollar Index .DXY up 0.56 percent at 87.559.

The euro was down 0.33 percent at $1.2476, and against the yen, the dollar fell 2.90 percent at 94.86.

U.S. gold futures for December delivery GCZ8 settled down $14.50 at $718.30 an ounce in New York.

Japan's Nikkei average .N225 shed 1.3 percent on the lightest volume in about six weeks, while the MSCI benchmark index of Asian stocks outside of Japan .MIAPJ0000PUS lost 0.8 percent. (Reporting by Leah Schnurr, Wanfeng Zhou, Ellen Freilich and Frank Tang in New York and Christopher Johnson, George Matlock and Sitaraman Shankar in London; writing by Herbert Lash; Editing by Leslie Adler)

KBR wins Army Corps emergency power disaster relief contract

KBR wins Army Corps contract

Go To Original

KBR Inc. has been awarded a $75 million disaster relief contract by the U.S. Army Corps of Engineers for emergency power.

The Houston-based engineering company will be supplying the power to the Western region of the United States.

The five-year contract was created by the Army to respond immediately to power emergencies caused by natural or manmade disasters.

KBR (NYSE: KBR) will provide labor, transportation, equipment, materials, supervision and required internal logistics support to perform generator set activities.

Prescription Drugs Kill 300 Percent More Americans than Illegal Drugs

Prescription Drugs Kill 300 Percent More Americans than Illegal Drugs

by David Gutierrez

Go To Original

A report by the Florida Medical Examiners Commission has concluded that prescription drugs have outstripped illegal drugs as a cause of death.

An analysis of 168,900 autopsies conducted in Florida in 2007 found that three times as many people were killed by legal drugs as by cocaine, heroin and all methamphetamines put together. According to state law enforcement officials, this is a sign of a burgeoning prescription drug abuse problem.

"The abuse has reached epidemic proportions," said Lisa McElhaney, a sergeant in the pharmaceutical drug diversion unit of the Broward County Sheriff's Office. "It's just explosive."

In 2007, cocaine was responsible for 843 deaths, heroin for 121, methamphetamines for 25 and marijuana for zero, for a total of 989 deaths. In contrast, 2,328 people were killed by opioid painkillers, including Vicodin and Oxycontin, and 743 were killed by drugs containing benzodiazepine, including the depressants Valium and Xanax.

Alcohol directly caused 466 deaths, but was found in the bodies of 4,179 cadavers in all.

While the number of dead bodies containing heroin jumped 14 percent from the prior year, to a total of 110, the number of deaths influenced by the painkiller oxycodone increased by 36 percent, to a total of 1,253.

Across the country, prescription drugs have become an increasingly popular alternative to the more difficult to acquire illegal drugs. Even as illegal drug use among teenagers have fallen, prescription drug abuse has increased. For example, while 4 percent of U.S. 12th graders were using Oxycontin in 2002, by 2005 that number had increased to 5.5 percent.

It's not hard for teens to come by prescription drugs, according to Sgt. Tracy Busby, supervisor of the Calaveras County, Calif., Sheriff's Office narcotics unit.

"You go to every medicine cabinet in the county, and I bet you're going to find some sort of prescription medicine in 95 percent of them," he said.

Adults can acquire prescriptions by faking injuries, or by visiting multiple doctors and pharmacies for the same health complaint. Some people get more drugs than they expect to need, then sell the extras.

"You have health care providers involved, you have doctor shoppers, and then there are crimes like robbing drug shipments," said Jeff Beasley of the Florida Department of Law Enforcement. "There is a multitude of ways to get these drugs, and that's what makes things complicated."

And while some people may believe that the medicines' legality makes them less dangerous than illegal drugs, Tuolumne County, Calif., Sheriff's Office Deputy Dan Crow warns that this is not the case. Because everybody reacts differently to foreign chemicals, there is no way of predicting the exact response anyone will have to a given dosage. That is why prescription drugs are supposed to be taken under a doctor's supervision.

"All this stuff is poison," Crow said. "Your body will fight all of this stuff."
Tuolumne County Health Officer Todd Stolp agreed. A prescription drug taken recreationally is "much like a firearm in the hands of someone who's not trained to use them," he said.

While anyone taking a prescription medicine runs a risk of negative effects, the drugs are even more dangerous when abused. For example, many painkillers are designed to have a delayed effect that fades out over time. This can lead recreational users to take more drugs before the old ones are out of their system, placing them at risk of an overdose. Likewise, the common practice of grinding pills up causes a large dose of drugs to hit the body all at once, with potentially dangerous consequences.

"A medication that was meant to be distributed over 24 hours has immediate effect," Stolp said.

Even more dangerous is the trend of mixing drugs with alcohol, which, like most popularly abused drugs, is a depressant.

"In the case of alcohol and drugs, one plus one equals more than two," said Tuolumne County Sheriff's Office spokesperson Lt. Dan Bressler.

Florida pays careful attention to drug-related deaths, and as such has significantly better data on the problem than any other state. But a recent study conducted by the U.S. Drug Enforcement Agency (DEA) suggests that the problem is indeed national. According to the DEA, the number of people abusing prescription drugs in the United States has jumped 80 percent in six years to seven million, or more than those abusing cocaine, Ecstasy, heroin, hallucinogens an inhalants put together.

Not surprisingly, there has been a corresponding increase in deaths. According to the Drug Abuse Warning Network, the number of emergency room visits related to painkillers has increased by 153 percent since 1995. And a 2007 report by the Justice Department National Intelligence Drug Center found that deaths related to the opioid methadone jumped from 786 in 1999 to 3,849 in 2004 - an increase of 390 percent.

Many experts attribute the trend to the increasing popularity among doctors of prescribing painkillers, combined with a leap in direct-to-consumer marketing by drug companies. For example, promotional spending on Oxycontin increased threefold between 1996 and 2001, to $30 million per year.

Sonora, Calif., pharmacist Eddie Howard reports that he's seen painkiller prescriptions jump dramatically in the last five years.

"I don't know that there is that much pain out there to demand such an increase," he said.
The trend concerns Howard, and he tries to keep an eye out for patients who are coming in too frequently. But he admits that there is little he can do about the problem.

"When you have a lot of people waiting for prescriptions, it's hard to find time to play detective," he said.

Still, the situation makes Howard uncomfortable.

"It almost makes me a legalized drug dealer, and that's not a good position to be in," he said.

Sources for this story include:;

Labor's high hopes

Labor's high hopes

by Dick Meister

Go To Original

Organized labor is rightly claiming a major role in the Nov. 4 victories of President-elect Barack Obama and congressional Democrats – and is rightly expecting much in return.

The figures are impressive. One-fifth of all voters were union members or in union households, and fully two-thirds of them supported Obama, a ratio even higher in battleground states.

The AFL-CIO calculates that more than a quarter-million volunteers campaigned among their fellow union members and others, discussing the issues that were of particular importance to working people, drumming up support for Obama and other labor-friendly Democrats and, finally, getting labor voters to the polls on election day.

The AFL-CIO’s figures show that the volunteers knocked on some 10 million doors, made 70 million telephone calls, handed out 27 million leaflets and mailed out 57 million more. There was scarcely a union member or union household anywhere that was not reached.

The number of union voters reached a record high of more than 3 million. The labor federation claims they “made the difference in critical states like Pennsylvania, Michigan, Ohio and so many others.” Maybe they did, maybe not – but it is clear that organized labor significantly influenced the vote.

Not all of labor’s favored candidates won, but enough of them did to assure unions of labor-friendly majorities in the House and Senate.

You can be sure unions will be asking a lot of their congressional friends, as well as of their friend in the White House. They want “a new economic agenda,” says AFL-CIO President John Sweeney. He says, “We need to rethink the rules and strategies of our economy. We need changes attuned to today’s world that are as bold and as visionary as the economic changes FDR made so many decades ago.”

Sweeney anticipates that the AFL-CIO will work closely with the Obama administration and Congress to shape the agenda and meanwhile will keep in place its mobilization structure to help press labor’s case.

“Working men and women are poised to keep the energy pumping to help the Obama administration lead the change we need,” Sweeney promised. “ There will be no gap or letdown.”

Labor’s specific wishes are many, including steps to stimulate the faltering economy, such as extending the unemployment benefits of workers who have used up their eligibility, broadening the food stamp program, rebuilding and repairing the crumbling infrastructure, and making grants to state and local governments that have been hit by heavy revenue losses. Unions also want to extend health care coverage to many more Americans, and raise the taxes of high-income earners to narrow the income gap between the wealthy and others that has expanded greatly during the Bush presidency.

Above all, labor is demanding passage of the pending Employee Free Choice Act that could guarantee millions of Americans the right to unionize that has long been denied them -- the main reason only about 12 percent of American workers are in unions, despite the much higher pay, benefits and other advantages of membership.

Employers routinely violate the current labor laws by firing or otherwise disciplining those who support or attempt to organize unions. Penalties, if any, are slight. Workers, in any case, fear complaining about violations because to do so is to risk employer retaliation.

The Free Choice Act calls for much stiffer fines, swiftly imposed, new penalties on employers who violate workers’ rights and requires that employers who stall in bargaining for union contracts will have the terms dictated by an arbitrator. The key provision would automatically grant union recognition on the showing of union membership cards by a majority of an employer’s workers, rather than holding an election, as is now usually done. The law was like that originally, with no lengthy election campaigns and thus much less opportunity for employers to intimidate workers.

The Free Choice Act cleared the House easily last year, but could not get the 60-vote majority needed to overcome a filibuster by Senate Republicans. The prospects are much better now, with strong support promised by a majority of congressional Democrats, as well as Obama and Vice President-elect Joe Biden, who were among the measure’s co-sponsors when they were in the Senate.

Obama’s support is consistent with his pro-labor approach. He also supports virtually all of labor’s other specific wishes, among them prohibiting employers from permanently replacing strikers and raising the minimum wage and indexing it to inflation, so it would rise as the cost-of-living rises. He promises, as well, to reverse decisions by the Bush-appointed majority on the National Labor Relations Board that have taken union rights from thousands of workers and says that, unlike Bush appointees, his appointees to positions dealing with unions will support workers’ rights.

Rarely has labor had higher or more realistic expectations.

A closer look at Obama’s energy plan

A closer look at Obama’s energy plan

Economy may slow it, but ‘green’ jobs may grow it.

Mark Clayton

Go To Original

If President-elect Barack Obama enacts the energy plan he laid out during his campaign, American taxpayers will each get a $500 rebate check – funded by a windfall profits taxes on big oil companies.

But that’s just for starters. Besides taxing oil giants more, Senator Obama’s detailed 30-point energy agenda calls for big changes to address carbon emissions, fuel efficiency for vehicles, and domestic and renewable power and efficiency.

While many candidates’ platform promises are cast aside when political opposition looms, the Obama energy plan seems integral to his promise to get the economy restarted, some experts say.

“Obama’s energy plan is much more than a campaign laundry list,” says Bracken Hendricks, a senior fellow at the Center for American Progress, a think tank chaired by John Podesta, who heads the Obama administration’s transition effort. “It really is a centerpiece of Obama’s economic development strategy for the nation, for energy security, and rebuilding our cities and infrastructure,” Mr. Hendricks says.

Among more than two dozen bullet points, Obama’s energy plan includes:

• Putting 1 million plug-in-electric hybrid vehicles (PHEVs) on the road by 2015 – cars that can get the equivalent of 150 miles per gallon.

• Creating 5 million new “green jobs” by investing $150 billion over 10 years to stimulate clean-energy infrastructure and manufacturing such as wind-turbine plants and solar panels carpeting the nation’s rooftops.

• Cutting US oil consumption, within 10 years, by the amount currently imported from the Middle East and Venezuela combined.

• Requiring 10 percent of the nation’s electricity to come from renewable energy sources like wind, solar, geothermal, and biomass by 2012. By 2025, raise that to 25 percent.

• Establishing an economy-wide cap-and-trade program that cuts US greenhouse gas emissions by charging for every ton of carbon dioxide that goes into the sky from coal- and natural gas-fired US power plants.

Can Obama do all that and more – or will political and economic obstacles ultimately turn the plan into a much more modest effort? How much was campaign window dressing, and how much energy transformation will the US undergo?

“Obama has enormous political support for his clean-energy agenda,” says Anna Aurillio, director of policy development for Environment America, an environmental group. “If you look at the regions that will be impacted by the changes – middle America and New England in particular – these are places that will benefit from clean energy and back him politically in making this change.”

Some elements of Obama’s energy plan are costly, but also vital to the rest of the plan. For instance, sales of pollution permits from the cap-and-trade program to limit CO2 emissions across the economy are key to helping fund the plan’s $15 billion per year (for 10 years) expenditure on renewable energy research and development.

But some say rising electric rates – the result of costs involved with greenhouse-gas emissions – could stir political opposition and derail implementation, especially given the economic crisis.

“In times of economic stress, the last thing you want to do is increase peoples’ energy costs with something like cap-and-trade,” says Anne Korin, cofounder of the Set America Free Coalition (SAFC) of energy-security hawks and environ­mentalists. SAFC calls for policies that would disconnect the US from imported oil. “There’s a lot of talk about that, but a congressman who wants to be reelected would be very wary of that,” Ms. Korin says.

While no one has recalculated the cost-benefit for Obama’s official energy plan, some earlier calculations for similar – albeit rosy – plans
suggest that the net effect would still be a plus for green jobs and the economy.

The Apollo Alli­ance, a labor-environmental coalition, has put forward a proposal that contains proposals similar to those in the Obama plan. The alliance calls for a federal investment in clean-energy technology and green building that’s twice as large ($300 billion) as Obama’s. Their analysis calculates more than $1.4 trillion in savings and economic growth.

The pedigree of Obama’s plan also suggests that it is more, not less, likely to be implemented, Mr. Hendricks says.

Much of the Obama plan follows the National Commission on Energy Policy’s (NCEP) 2004 plan, a consensus document in which – as in the SAFC plan – energy-security hawks joined environmentalists and industry. In fact, NCEP director and plan coauthor Jason Grumet is a likely candidate for an energy post in the new administration.

Besides the advantage of having been pre-vetted by energy, foreign policy, and industry experts, the plan also has something of a mandate. Obama often touted the need for a new energy equation during the campaign. Renewable-energy tax credits were stymied regularly in the US Senate this year. So an Obama mandate could help win over a Senate in which Democrats are now just three votes short of a filibuster-proof majority – with three races still in contention.

“There’s a lot of good stuff here, but like any campaign platform, they’ll be fortunate to implement half of it,” says Steve Nadel, executive director of the American Council for an Energy-Efficient Economy. “Still, I have been hearing through the grapevine that they [Obama’s camp] are quite serious about it. The question is whether Congress will go along. There’s a good chance that a significant fraction [of the plan] will go through.”

One of the fastest ways to lower energy costs is efficiency. Obama’s energy plan touts tougher efficiency standards and decries the Bush administration for missing 34 deadlines for improving energy-efficiency requirements for appliances and electrical equipment. During its tenure, the Bush White House enacted just two new energy-efficiency standards, one for electrical transformers and one for home furnaces, both of which were considered too weak and are now being challenged in court by states and environmental groups. If all 25 Obama-proposed energy-efficiency standards were adopted, they could save the yearly equivalent of all the power produced by 57 large power plants, says Andrew Delaski, executive director of the Appliance Standards Awareness Project, an environmental watchdog coalition.

An early test of the new administration – and its willingness to risk industry displeasure – will come in June. That’s when a new rule on commercial lighting – to improve the efficiency of those ubi­quitous four-foot-long fluorescent tubes used in office buildings nationwide – comes up for final approval.

It’s a big deal. If the Department of Energy enacts a tough rule, it could have one of the most significant energy-efficiency impacts in US history, saving the equivalent of $66 billion in power costs over the next 30 years. That’s enough to power every home in the US for one year, says Mr. Delaski.

A strong rule could mean that the US could essentially replace 15 large power plants with the energy savings and slash carbon dioxide emissions by 950 million tons. The Bush administration could still propose a weaker rule in its waning days.

“The rubber is going to hit the road pretty quickly for this administration,” Delaski says. “Are they going to really push for tough standards or just go along with weaker standards favored by the lighting industry?”

One measure of Obama’s resolve to reform the US energy equation could come as soon as Nov. 12: That’s when he may consider a proposal by the Center for American Progress to create a National Energy Council within the White House. This is according to Kevin Book, senior vice president for energy policy at Friedman, Billings, Ramsey Capital Markets, writing to investors in a recent newsletter.

Others agree Oba­­ma is likely to push hard for a sweeping rather than piecemeal energy agenda early in his administration.

“This energy plan is not just about environment, climate change, energy prices, or supplies individually,” Hendricks says. “It’s an overarching plan that embodies Obama’s approach to national service, energy security, and economic stability. He’s going to hit it head-on.”