Wednesday, February 4, 2009

US military suicide rate at record high

US military suicide rate at record high

By James Cogan

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American troops are taking their own lives in the largest numbers since records began to be kept in 1980. In 2008, there were 128 confirmed suicides by serving army personnel and 41 by serving marines. Another 15 army deaths are still being investigated. The toll is another of the terrible consequences that have flowed from Washington's neo-colonial wars in Afghanistan and Iraq.

The army suicide rate is now higher than that among the general American population. The rate has been calculated as 20.2 per 100,000 soldiers, compared with 19.5 per 100,000 civilians. This is a shocking statistic, as soldiers theoretically are screened for mental illnesses before enlistment and have access to counselling and health services that millions of ordinary people cannot afford.

As there is an average of 10 failed suicide attempts for each actual loss of life, the figures suggest that more than 1,600 serving army and marine personnel tried to kill themselves last year.

Army Secretary Pete Geren told the Associated Press that "we cannot tell you" why the number of military suicides was rising. It is indisputable, however, that it is linked to the stresses on soldiers caused by the wars in Afghanistan and Iraq. In 2002, the army suicide rate was just 9.8 per 100,000. The last time it exceeded the civilian rate was in the late 1960s, at the highpoint of the US war in Vietnam.

An estimated 30 percent of soldiers who took their own lives in 2008 did so while on deployment. Another 35 percent committed suicide after returning from a tour of duty. In one reported case, a highly regarded marine pilot hanged himself just one month before he was scheduled to return to Iraq.

Dozens of men and women who have left the armed forces since serving in Afghanistan or Iraq also committed suicide in 2008. The Department of Veterans Affairs recorded 144 such cases. The suicide rate among veterans aged 20 to 24 was 22.9 per 100,000 in 2007—four times higher than non-veterans in the same age bracket. A hotline for veterans has received over 85,000 calls since mid-2007 and arranged some 2,100 suicide prevention interventions.

The rise in army suicides was registered despite an information campaign in the US military intended to end stigmas over seeking medical health for Post Traumatic Stress Disorder (PTSD) and depression—psychological conditions that afflict tens of thousands of Afghanistan and Iraq veterans and in severe cases can trigger suicidal tendencies.

Veterans Affairs (VA) reported in January that 178,483 veterans of the two wars had been diagnosed with one or more mental illnesses between 2002 and September 2008. The conditions diagnosed included 92,998 cases of possible PTSD; 63,009 possible depressive disorders; 50,569 neurotic disorders; 35,937 cases of affective psychoses; 27,246 cases of drug abuse and 16,217 cases of alcohol dependency.

VA deputy director for mental health services, Antonette Zeiss, told the Air Force Times: "Most of these conditions would not have been present prior to being in the military. In VA, we assume that these are veterans coming to us who have had significant stresses as a result of their involvement with the military and the war."

The "significant stresses" would include killing; repeated exposure to scenes of death and injury; the constant threat of death or injury; and the dehumanising policing operations that American soldiers have been ordered to conduct against civilian populations. No-one who has taken part in the occupations of Afghanistan and Iraq could have returned completely unscathed by the experience.

The true extent of mental illness among war veterans is believed to be far worse than VA's figures. It has only treated around 400,000 of the 1.7 million men and women who have served. "We know there are guys who desperately need help who aren't coming to us," a spokesman told the Air Force Times. A Rand Corporation study last year estimated that 20 percent of Afghanistan and Iraq veterans—some 350,000 people—were suffering from PTSD.

As many as 18 veterans of American wars take their own lives in the United States every day—more than 6,500 per year. Vietnam veteran advocates have estimated that suicide ultimately killed more of the soldiers who fought in that conflict than the actual war itself. The same trend is now surfacing among the veterans of Afghanistan and Iraq.

A recent case was the suicide of Specialist Larry Applegate on January 16. After an argument with his wife, during which shots were fired, Applegate barricaded himself inside his Colorado Springs home. Shortly after, he killed himself with a bullet to the head.

The Army Times reported that the 27-year-old soldier, who served in Iraq during 2006, had been under the supervision of a Warrior Transition Unit (WTU) since February 2008 for an undisclosed condition. WTUs were established in June 2007 after the exposure of substandard treatment of wounded troops at the Walter Reed Medical Centre. There are currently some 9,000 soldiers assigned to 36 WTUs across the US.

A total of 68 soldiers had died under WTU care by October 2008. More than half the deaths were ruled to have resulted from natural causes, but nine were determined to be suicides. Six others were classified as accidental deaths caused by "combined lethal drug toxicity".

Tens of thousands more jobs eliminated in the US

Tens of thousands more jobs eliminated in the US

By David Walsh

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The massive destruction of jobs, along with attacks on retirement funds and other benefits, continues in the US, with major corporations announcing layoffs on nearly a daily basis. On Monday, companies reported more than 10,000 job cuts, followed by at least another 8,000 on Tuesday.

Macy’s, one of the largest US department store chains, announced Monday its plans to eliminate 7,000 jobs, or 4 percent of its work force. The firm operates some 840 department stores—as Macy’s and Bloomingdale’s—across the US. It is undertaking what the media terms “a massive reorganization in the face of slumping sales and depressed consumer spending” (Washington Post). Company officials also reported that contributions to employees’ retirement funds would be reduced.

Also on Monday, Moody’s Investors Service said it might lower ratings on the 150-year-old chain, one of the most recognized American retailers, into “junk territory” after Macy’s forecast significantly lower earnings for 2009.

Financial giant Morgan Stanley indicated plans to slash 1,800 jobs on Monday, on top of the 7,000 positions eliminated last year. The company, which was handed $10 billion by the US Treasury in the wake of the crash last fall, has reported its lowest annual profits in 13 years.

Steelcase, the world’s largest office furniture maker, announced on the same day that it was beginning to lay off 300 of the 600 previously notified employees and that the company would cut the base salaries of all its North American workforce and suspend 2010 matching contributions to its retirement plan.

Farm equipment maker Deere & Co. on Monday added to the number of workers it plans to eliminate at its John Deere Davenport Works in Iowa. A total of 200 workers will be indefinitely laid off. Just days before, Deere announced 500 layoffs at its operations in Brazil.

The parent company of numerous casual dining chains, including Chili’s and On the Border Mexican Grill & Cantina, reported Monday that it had laid off 155 workers last week, after closing 35 locations. Dallas-based Brinker International, with 100,000 employees nationwide, has experienced a significant decline in sales.

On Tuesday, thousands more workers received the news they were losing their jobs.

The largest cuts came at PNC, the regional bank headquartered in Pittsburgh, where officials announced plans to slash 5,800 jobs through 2011. The firm declared it was cutting back following last year’s acquisition of National City bank for $5.6 billion. PNC has received $7.5 billion in taxpayers’ money.

Also on Tuesday, Columbus, Ohio-based Huntington Bank said it would cut 500 jobs, or 4 percent of its employees. The bank, which lost $113.8 million in 2008 and recently replaced its CEO, reported this would save $100 million. It also froze pay raises and ended its 401(k) matching program.

The well-known New York retailer of women’s clothing, Liz Claiborne, announced the same day it would reduced its workforce by 8 percent, or 725 jobs. Liz Claiborne cut 2,200 jobs in 2008. Another women’s apparel retailer, Chico’s FAS, will cut 180 jobs at its Florida headquarters and shut down as many 25 stores, the media reported Tuesday.

King Pharmaceuticals, in Bristol, Tennessee, reported its intention to eliminate 760 jobs, or 22 percent of its workers. Rockwell Collins, an Iowa-based manufacturer of aviation electronics, also announced layoffs on Tuesday: 600 jobs are going to go.

In Boston, Fidelity Investments, the world’s largest mutual fund firm, said Tuesday it would begin a second round of layoffs, as it attempts to reduce its work force by 7 percent. Investors withdrew billions of dollars from mutual funds last year in response to the financial meltdown. Three thousand jobs in total are being eliminated in Fidelity’s cost-cutting efforts.

A manufacturer of propeller and jet aircraft, Hawker Beechcraft in Wichita, Kansas, was expected to announce around 2,700 layoffs later in the week. A worker told television station KAKE-10 Tuesday, “We’re just hearing that we’re supposed to find out something either Thursday or Friday of this week. They’ll give us some numbers.”

In a letter to employees sent January 18, Hawker Beechcraft CEO Jim Schuster commented, “Simply put, consumer demand for aircraft and services has declined precipitously.”

The auto industry reported horrendous sales figures Tuesday as it continued with efforts to wipe out decent-paying jobs. GM and Chrysler are offering buyouts to “almost all their 91,600 UAW members to make room for new employees earning half of the $28 hourly wage of their predecessors,” notes One automotive analyst commented on the “almost desperation pace” of the automakers’ recent moves. “When you offer all of your hourly workers a buyout, that’s certainly a sign of a troubled organization.”

According to CNNMoney, the job cuts announced in the US Tuesday “follow a brutal week, when companies said they plan to cut more than 100,000 jobs. So far this year, at least 97 companies have said they would eliminate nearly 300,000 jobs.”

Reuters reported Tuesday that, including the layoffs at PNC, “at least 312,498 job cuts have been announced worldwide by banks, insurers and asset managers since August 2007, when the credit crisis began to intensify.”

A variety of economic data is due out this week, leading up to Friday’s jobs report for January. Economists predict the report will show 550,000 jobs were lost last month and an unemployment rate of 7.4 percent.

In mid-January, the Economic Policy Institute issued a report forecasting “a catastrophic recession” if a program of adequate public spending was not organized by the federal government. “Unless action is taken (and fast), unemployment and underemployment will plague 35% of the labor force [or more than 50 million people] over the course of 2010, as people move in and out of a shrinking pool of jobs. In addition, the accompanying reduction in hours and wages—which has already begun—will cause a sizeable and continuous decline in income throughout this year and next (and possibly beyond).”

The study continues: “If unemployment reaches 10.2% in the middle of 2010, it will have increased a total of 5.3% from where the rate stood at the end of 2007, when the recession began. This would clearly be the largest increase in unemployment during a recession since the 1930s.”

Foreclosures Now One in Five Home Sales

Foreclosures Now One in Five Home Sales

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Home values in the United States fell for the eighth consecutive quarter, declining 11.6 percent during 2008 to a Zillow Home Value Index of $192,119, according to the fourth quarter Zillow Real Estate Market Reports, which encompass 161 metropolitan areas.

The declines mean that U.S. homeowners lost a cumulative $3.3 trillion in home values during 2008, with much of that loss coming in the fourth quarter. Homeowners lost $1.4 trillion during the fourth quarter alone; more than the $1.3 trillion lost during all of 2007. Since the housing market's peak in 2006, $6.1 trillion in home values have been lost.

Foreclosures made up nearly one in five (19.9 percent) of all transactions in 2008. The hard-hit Central Valley in California continued to lead the nation in foreclosures, as more than half of all sales in the Madera, Merced and Stockton metropolitan statistical areas (MSAs) were foreclosures. The New York City metro area and the Grand Junction, Colo., had the lowest rates of foreclosure in the country (both at 3.9 percent).

For the first time, Zillow has also calculated short sales. Across the country, 10.9 percent of all real estate transactions in 2008 were short sales. The Lincoln, Neb., MSA led the country in the rate of short sales, with 14.1 percent of all transactions. In the San Jose, Santa Rosa and Santa Cruz, Calif., MSAs, short sales made up more than 11 percent of all transactions.

As home values declined through 2008, more American homeowners have become underwater on their mortgages. At the end of the year, one in six (17.6 percent) of all homeowners had negative equity. This number rose from the end of the third quarter, when one in seven (14.3 percent) homeowners was underwater.

Meanwhile, several markets that had been declining at a slower rate than most of the country showed accelerated declines in the fourth quarter.

The Seattle, Wash. and Portland, Ore. MSAs for the first time in the fourth quarter experienced year-over-year median home value declines (12.1 percent and 11.7 percent, respectively) that were larger than the national median.

In Manhattan, which posted year-over-year gains during the first three quarters of the year, home values declined during the fourth quarter, leaving Manhattan with a year-over-year decline of 5.8 percent by the end of 2008.

"A witch's brew of economic insecurity, foreclosures and tightened lending standards are helping to keep hard-hit markets down and to widen the scope of markets showing declines in home values," said Dr. Stan Humphries, Zillow vice president of data and analytics.

"As more markets turn down and markets that were already down go deeper, the pace at which value is being erased from the U.S. housing stock is rapidly increasing, with more value wiped out in the fourth quarter of 2008 than was eliminated in all of 2007. The fourth quarter is the first in which we were able to see the effects of the mounting economic insecurity that picked up steam in the fall of last year."

"People without jobs, or fearing job loss, typically don't buy homes, no matter how low prices or mortgage rates might be. Public policy, in terms of both job creation and efforts to stem the tide of foreclosures, will have a large influence on when some of these markets find bottom," he said.

Despite the bad news across much of the country, 21 of 161 markets are not feeling the pinch of declining home values.

Home values in the Pittsburgh MSA were flat (-0.1 percent) in 2008. In the Fayetteville, N.C. MSA, home values increased 6.9 percent in 2008. The Yakima, Wash., MSA was not far behind, with home values increasing 6.2 percent during the year. Other areas in New York State, the Midwest and the South continue to experience steady or increasing home values.

Auto sales hit 27-year low

Auto sales hit 27-year low

By Kevin Krolicki

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U.S. auto sales plunged to a 27-year low in January, a steeper-than-expected drop that took the slumping U.S. market below China's for the first time.

The two U.S. automakers struggling to restructure under a $17.4 billion government bailout led the market lower. Chrysler LLC posted a 55 percent sales plunge. Sales for General Motors Corp were down 49 percent.

The bleak results were one of the first indicators of the depth of the recession at the start of 2009, underscored by sharp declines by the industry's stronger players.

Toyota Motor Corp, the world's top automaker, was hit with a 34 percent sales decline. Sales were off almost 30 percent for Nissan Motor Co and 28 percent for Honda Motor Co.

Industry-wide sales dropped 37 percent, taking the annualized sales rate to 9.57 million vehicles, the lowest level since 1982. But that understates the depth of the downturn since the U.S. population has increased about a third since.

"The truth is that the entire auto industry finds itself in the eye of this economic storm," Bob Carter, Toyota's U.S. manager for its flagship brand, told reporters.

Ford Motor Co, considered the best-positioned of the embattled U.S. automakers, posted a 40 percent drop that one analyst said would strain its stated intent to make it through the downturn without an emergency infusion of government cash.

"Even with a boost from the anticipated federal stimulus plan, we see consumers taking a cautious approach to large ticket discretionary purchases," S&P equity analyst Efraim Levy said in a note for clients.

GM cut its first-quarter production plan by almost 10 percent. Both GM and Chrysler extended new discounts to try to clear inventory and get production lines moving again.

"We're in the mouth of this monster, and we have a lot of work to do," Chrysler sales chief Steven Landry said.

U.S. auto sales account for as much as one-fifth of retail sales. The downbeat results added weight to the view that the battered sector will be a further drag on U.S. output.

GM, like other automakers, blamed tight credit for the downward spiral in sales since September. The depressed sales rate for January put the U.S. market below China's in sales volume for the first time, the automaker said.

"People are coming in, wanting to buy vehicles and they're being turned down, just that simple," GM sales analyst Mike DiGiovanni said. "And we have to break and thaw the credit markets for consumers who want to buy automobiles."


Korea's Hyundai Motor Co and its affiliate Kia were the only major brands to escape January's collapse. Hyundai's sales rose 14 percent. Kia gained 3 percent.

Hyundai has been buoyed by a novel promotion that allows Americans to return their new cars if they lose their jobs within a year of purchase.

"It's a very smart program," Edmunds analyst Jesse Toprak said. "People are uncertain about the future and if you give them some security blanket that makes them feel better about the future, about their purchase, it can go a long way."

One of the key questions for the U.S. market this year is whether Ford can make good on its bold bet that it can ride out the downturn with its existing $24 billion of cash.

In part, Ford is holding out hope that the U.S. market will improve in the second half as an expected fiscal stimulus package takes hold and consumer confidence recovers.

To that end, Ford said there were some encouraging signs in January. Showroom sales appear to have stabilized even though sales to rental agencies were down sharply. Used car prices also appear to have stopped falling, executives said.

"What we are looking for at this point is stabilization," said Ford economist Emily Kolinski Morris. "You have to stop falling before you can start rising."

Although the U.S. auto industry is entering its fourth year of declining sales, the deepening slowdown hit European and Asian markets hard in the final months of 2008.

New car sales in Germany, Western Europe's largest auto market, contracted in January at double-digit rates as German consumers tightened their belts in anticipation of the worst recession since World War Two.

Private Sector Cuts 522,000 Jobs in January

Private Sector Cuts 522,000 Jobs in January

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U.S. private sector job losses slowed slightly in January, ADP Employer Services said Wednesday in a report that came in slightly below economists' expectations.

ADP said private employers cut 522,000 jobs in January versus a revised 659,000 jobs lost in December. The December job cuts were originally reported at 693,000.

Economists had expected 530,000 private sector job cuts in January, according to the median of 27 forecasts in a Reuters poll, which ranged widely from a drop of 720,000 to losses of 495,000.

U.S. stock index futures gained more ground after the data. U.S. government bonds, which usually benefit from weak economic data, pared their gains after the ADP report.

As of its December release, the ADP methodology was revised in an effort to make it more closely predict the outcome of the government's non-farm payrolls report, which is due on Friday and expected to show 525,000 jobs were lost throughout the economy in January.

The ADP data series dates back to January 2001. The report was jointly developed with Macroeconomic Advisers LLC.

Dozens of secret Bush surveillance, executive power memos found

Dozens of secret Bush surveillance, executive power memos found; Could be made public

John Byrne

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Details about more than three dozen secret memoranda written by Bush Administration officials now sit atop a chart created by a public interest reporting group. The memos track new details about dozens of secret Bush Administration legal positions on torture, detention and warrantless wiretapping.

Meanwhile, Obama's freshly-confirmed Attorney General Eric Holder told senators that he was open to declassifying White House legal memos if no support for their original classification could be found, signaling a likely showdown with former President George W. Bush over executive privilege.

"The Bush administration's controversial policies on detentions, interrogations and warrantless wiretapping were underpinned by legal memoranda," Pro Publica's Dan Nguyen and Christopher Weaver write. "While some of those memos have been released (primarily as a result of ACLU lawsuits), the former administration kept far more memos secret than has been previously understood. At least three dozen by our count."

Nguyen and Weaver produced the chart. Propublica was founded in 2007 as a non-profit driven investigative news outlet and is run by a former managing editor from the Wall Street Journal.

The chart lists 40 memos that remain secret, along with identifying the 12 that have been made public.

Click for more

Given the chart, one can find the exact date a memo was written, its author and sometimes short details the authors have gleaned from other sources.

Among the memos' titles: "Criminal Charges against U.S. terrorists"; "Options for Interpreting the Geneva Convention" and "Fourth Amendment doesn't apply to military operations abroad or in U.S."

Little is known about the specifics or the resulting effect of the other clandestine briefs.

For example, the effects of the secret Fourth Amendment memo could be stunning. Former Attorney General Alberto Gonzales said in another memo that the White House's lawyers had concluded that the Fourth Amendment's protections against warrantless search and seizure don't apply to the US military -- even when the operations take place on U.S. soil.

Holder told senators in response to questions sent to him before his confirmation hearings that he'd take an aggressive stance with regard to releasing the White House legal opinions his predecessors' had labeled as secret.

“Once the new Assistant Attorney General in charge of the Office of Legal Counsel is confirmed, I plan to instruct that official to review the OLC’s policies relating to publication of its opinions with the [objective] of making its opinions available to the maximum extent consistent with sound practice and competing concerns,” Holder wrote.

Holder's comments were first noted by Secrecy News' Steven Aftergood.

Shining a Bright Light on a Dark 401(k) Secret

Shining a Bright Light on a Dark 401(k) Secret

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The existing 401(k) system is a scam far greater than anything Bernie Madoff could have conceived. His $50 billion Ponzi scheme is dwarfed by the $12 trillion 401(k) rip-off imposed on plan participants by their employers, and the mutual fund and insurance industries.

Until now, an objective evaluation of 401(k) plans has been extremely difficult because of the complexity of these plans and the cleverly hidden costs which would take a pension actuary to uncover. These excessive fees have dramatically reduced employees account balances. By some accounts, the combination of poor investment options, high expenses and poor planning have caused many plan participants to have a zero return on their 401(k) investments.

A recently launched web site, Brightscope, may change everything.

Brightscope crunched 401(k) plan data from public resources and compiled an extensive database of information. Using over 200 data points, including plan costs, amount of matching contribution and quality of investment options, it assigned a numerical rating to each plan. It then compared the rating to the lowest, average and highest rating in the peer group. It also calculated how many additional years an employee in a given plan would have to work, and how much was lost in retirement savings, compared to the highest rated company in that peer group.

The results are eye-opening.

Here's an example:

I took a look at the 401(k) plan for Starwood Hotels. This plan has a whopping $635 million in assets and 45,000 participants. The average account balance is only $14,000.

You would think Starwood would regard these assets as a sacred trust and would want to do everything possible to maximize the returns of its employees, many of whom are at the low end of the socio-economic scale.

The Brightscope investigation and rating paints a far different picture.

The Starwood plan had a rating of 39. The average rating for its peer group was 43. The highest rated plan in the group had a rating of 67.

Brightscope calculated that Starwood employees would have to work an additional eleven years to achieve the additional $159,700 earned by employees with the highest rated plan in its group. That's a lot of guests to check in, bags to carry, meals to prepare and rooms to clean.

Brightscope rated the plan cost as "highest," and the company generosity as "below average," among other ratings. It is not surprising that the participation rate in this plan is just "average."

Brightscope's transparent ratings should have a very positive effect on 401(k) plans. Companies pay for a full report and analysis which will permit them to improve their score by changing their plan. Plan participants will now have an objective basis for lobbying their employers for better plans. Access to the ratings system is free.

401(k) plans have been accurately described as

The world's largest skimming operation - a $7 trillion (now $12 trillion) trough from which fund managers, brokers, and other insiders are steadily siphoning off an excessive slice of the nation's household, college, and retirement savings.

Now that this dirty secret is open to public scrutiny, maybe employees will be able to get the retirement plans they deserve.

Let's see if Starwood leads the way.

Ford and GM see big fall in sale

US car firms report sales slump

Ford, General Motors (GM) and Chrysler have all reported a sharp fall in US sales in January, as industry-wide American sales fell to a 27-year low.

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Sales at Ford plunged 42% last month, compared with a year earlier, while those at GM declined 49%, and Chrysler was hit by a fall of 55%.

GM and Chrysler needed a $17.4bn (£12bn) rescue package from the US government in December.

While Ford last week reported a record $14.6bn annual loss for 2008.


American car sales have slumped as consumers have cut back on making large purchases as the US recession has deepened.

"We're in the mouth of this monster, and we have a lot of work to do," said Chrysler sales chief Steven Landry.

Chrysler argues that more customers would like to buy new cars, only they can't secure the loans to do so, because of the continuing problems in the US banking sector.

January's decline has also hit sales of foreign cars in the US. Toyota's January American sales were down 32% from a year earlier, while those at Nissan dropped 30%.

"The truth is that the entire auto industry finds itself in the eye of this economic storm," said Toyota US executive Bob Carter.

However, both Subaru and Hyundai bucked the trend, with their January US sales rising 8% and 14%.

Government support

GM and Chrysler gained their bail-out from the White House last month after they warned that they were running out of cash.

The financial situation at Ford is not as bad, although it has secured a $9bn government credit line that it will be able to access in the future if needed.

GM said on Tuesday that it would offer voluntary redundancy to 22,000 US employees as it seeks to cut costs.

Industry-wide US car sales fell 18% in 2008 to 13.2 million vehicles.

Sales for 2009 are expected to drop near 10.5 million, analysts say.

"Even with a boost from the anticipated federal stimulus plan, we see consumers taking a cautious approach to large ticket discretionary purchases," said S&P equity analyst Efraim Levy.

The Whole World Is Rioting as the Economic Crisis Worsens -- Why Aren't We?

The Whole World Is Rioting as the Economic Crisis Worsens -- Why Aren't We?

By Joshua Holland

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Explosive anger is spilling out onto the streets of Europe. The meltdown of the global economy is igniting massive social unrest in a region that has long been a symbol of political stability and social cohesion.

It's not a new trend: A wave of upheaval is spreading from the poorer countries on the periphery of the global economy to the prosperous core.

Over the past few years, a series of riots spread across what is patronizingly known as the Third World. Furious mobs have raged against skyrocketing food and energy prices, stagnating wages and unemployment in India, Senegal, Yemen, Indonesia, Morocco, Cameroon, Brazil, Panama, the Philippines, Egypt, Mexico and elsewhere.

For the most part, those living in wealthier countries took little notice. But now, with the global economy crashing down around us, people in even the wealthiest nations are mad as hell and reacting violently to what they view as an inadequate response to their tumbling economies.

The Telegraph (UK) warned last month that protests over governments' handling of the crisis "are widespread and gathering pace," and "may spark a new revolution":

A depression triggered in America is being played out in Europe with increasing violence, and other forms of social unrest are spreading. In Iceland, a government has fallen. Workers have marched in Zaragoza, as Spanish unemployment heads towards 20 percent. There have been riots and bloodshed in Greece, protests in Latvia, Lithuania, Hungary and Bulgaria. The police have suppressed public discontent in Russia and will be challenged again at large gatherings this weekend.

Consider a snapshot of a single week of unrest, courtesy of the Guardian:

  • Greece: "There are many wellsprings of the serial protests rolling across Europe. In Athens, it was students and young people who suddenly mobilized to turn parts of the city into no-go areas. They were sick of the lack of jobs and prospects, the failings of the education system and seized with pessimism over their future.

    "This week it was the farmers' turn, rolling their tractors out to block the motorways, main road and border crossings across the Balkans to try to obtain better procurement prices for their produce."

  • Latvia: "The old Baltic trading city had seen nothing like it since the happy days of kicking out the Russians and overthrowing communism two decades ago. More than 10,000 people converged on the 13th century cathedral to show the Latvian government what they thought of its efforts at containing the economic crisis. The peaceful protest morphed into a late-night rampage as a minority headed for the parliament, battled with riot police and trashed parts of the old city. The following day, there were similar scenes in Vilnius, the Lithuanian capital next door."
  • France: "Burned-out cars, masked youths, smashed shop windows and more than a million striking workers. The scenes from France are familiar, but not so familiar to President Nicolas Sarkozy, confronting the first big wave of industrial unrest of his time in the Elysée Palace.

    "France, meanwhile, is moving into recession, and unemployment is going up. The latest jobless figures were to have been released yesterday, but were held back, apparently for fear of inflaming the protests."

  • Iceland: "Proud of its status as one of the world's most developed, most productive and most equal societies, Iceland is in the throes of what is, by its staid standards, a revolution.

    "Riot police in Reykjavik, the coolest of capitals. Building bonfires in front of the world's oldest parliament. The yogurt flying at the free market men who have run the country for decades and brought it to its knees."

  • Britain (via the Times of London): "Wildcat strikes flared at more than 19 sites across the country in response to claims that British tradesmen were being barred from construction jobs by contractors using cheaper foreign workers."
  • Russia (via Al-Jazeera): "Thousands of protesters have rallied across Russia to criticize the government's economic policies and its response to the global financial crisis.

    "Russian police forcefully broke up many of the anti-government protests on Saturday, arresting dozens of demonstrators."

At least in Western Europe, cries of "burn the shit down!" are being heard in countries with some of the highest standards of living in the world -- states with adequate social safety nets; countries where all citizens have access to decent health care and heavily subsidized educations. Places where minimum wages are also living wages, and a dignified retirement is in large part guaranteed.

The far ends of the ideological spectrum appear to be gaining currency as the crisis develops, and people grow increasingly hostile toward the politics of the status quo.

The Financial Times quotes Olivier Besancenot, a young leader of "France's extreme left," promising "to reinvent and re-establish the anti-capitalist project." "We want the established powers to be blown apart," Besancenot said. Europe's far right is gaining momentum, too, using the economy and populist outrage over immigration to gain a legitimacy it hasn't enjoyed in some time.

Notably absent from the list of countries where the economic crunch is rending the social fabric is the good ole US of A, a state with the greatest level of economic inequality in the wealthy world.

Outside of a few scattered and quickly contained protests, the citizens of the U.S. -- a country born of revolution, but with an elite that's been terrified of that legacy since immediately after its founding -- have been calm, despite opinion polls showing that Americans are more dissatisfied with the direction in which the country has been headed since they began measuring such things.

It's a baffling disconnect, considering that real wages for all but the top 10 percent of the economic pile haven't increased in 35 years.

It's more bizarre still when you consider that while European governments have handled their own bailouts relatively transparently, the U.S. government has doled out close to $10 trillion in bailouts, loan guarantees and fiscal stimulus -- if there were a million-dollar bill, that would be a stack of 10 million of them -- with a stunning lack of oversight or accountability.

Even the congressional commission charged with overseeing key parts of the banking bailout can't get answers to basic questions like "who's getting what?"

Americans are rightfully angry about that state of affairs, but with a few small exceptions, quietly so. Why? It depends on whom you ask.

In a 2006 interview with Harper's, Barack Obama shared a subtle, but rather fundamental observation about America's political culture: "Since the founding," he said, "the American political tradition has been reformist, not revolutionary." If there is to be positive change, Obama has argued, it must be gradual; "brick by brick," as he put it in one of his final campaign speeches.

Mark Ames, author of Going Postal: Rage, Murder, and Rebellion -- From Reagan's Workplaces to Clinton's Columbine and Beyond, argues that Americans have been beaten down to a degree that they're now a pacified population, largely willing to accept any economic outrage its elites impose on them.

In a 2005 interview with AlterNet, Ames said the "slave mentality" is stronger in the U.S. than elsewhere, "in part because no other country on earth has so successfully crushed every internal rebellion."

Slaves in the Caribbean for example rebelled a lot more because their oppressors weren't as good at oppressing as Americans were. America has put down every rebellion, brutally, from the Whiskey Rebellion to the Confederate rebellion to the proletarian rebellions, Black Panthers, white militias ... you name it. This creates a powerful slave mentality, a sense that it's pointless to rebel.

Anyone who has witnessed the brutal police riots that have become so common since the infamous "Battle in Seattle" protests against the World Trade Organization in 1999 can tell you there's some merit to the argument.

It's also the case that European societies tend to be more homogenous than the mishmash of tribes we call the United States. Whereas Americans are divided by religion, region, ethnicity, urban-rural tensions and all the other trappings of the "culture wars," the primary split in most European countries is class.

Thomas Frank argued eloquently in What's the Matter With Kansas that those wedge social issues that the American right nurtures with such care obscure the fundamental differences between the rich and poor, the powerful and the disenfranchised.

Indeed, any hint of discussion of economic inequality in the U.S. is shot down with cries of "class warfare" -- exactly what is playing out in the streets of much of the world today.

As the crisis deepens, as virtually every analyst predicts it will, that may well change. As The Nation's Bill Greider told Democracy Now's Amy Goodman, "you can't do this to people year after year -- that is, upturn their lives, take away what they thought they had earned, and so forth and so on, without provoking rather intense political reactions. ... We're just, just beginning to see a few bubbles like that around this country. I don't say we're going to have riots, but I think ... people, out of their own distress and anger, will organize their own politics, and they will make themselves seen and heard around this country."

Stay tuned.

Bankrolling charitable gifts

Bankrolling charitable gifts

By Silla Brush and Kevin Bogardus

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Financial firms and other companies receiving billions of dollars in federal bailout money spent hundreds of thousands of dollars to pay for meetings and charitable gifts on behalf of lawmakers.

In the last six months of 2008, as a financial crisis enveloped the country and lawmakers voted on a $700 billion financial rescue package, eight companies that would benefit from that package spent roughly $366,000 on events and charities connected to members of Congress, according to a review of congressional lobbying records.

Fannie Mae and Freddie Mac, the government-sponsored mortgage companies, spent more than $330,000 in the period, but since being taken over by their regulator in September have stopped donating money to politically affiliated charities.

At one event in December, several of the biggest financial firms in the country sponsored a reception on the trading floor of the New York Stock Exchange (NYSE) and dinner at the NYSE Club where Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, was the keynote speaker.

Bank of America contributed $35,000 for the Dec. 18 event, which was organized by the National Gay and Lesbian Chamber of Commerce, records show. Justin Nelson, the chamber’s president, said Citigroup contributed $17,500 and Goldman Sachs another $35,000, although records do not include those expenses. The three banks have received a combined $105 billion in bailout money from the Troubled Asset Relief Program (TARP). Bank of America and Citigroup have required repeated bailouts from the government.

“We are proud to have sponsored the event again this past December. Our sponsorship was a matter of public record and we complied fully with the requirements of the Lobbying Disclosure Act,” said a Goldman Sachs spokesman.

“The bank supports a number of causes important to our clients and customers,” said Shirley Norton, Bank of America spokeswoman.

Other firms involved in the event did not return messages asking for comment.

Nelson said Frank, the only lawmaker present at the event, “spoke about diversity and inclusion and the importance of having a workforce that mirrors the public and mirrors your values … it was sort of an inspirational speech.” He said that the dinner, which drew about 300 people, cost more than $100,000. Other sponsors included: Morgan Stanley, the Securities Industry and Financial Markets Association, and Wells Fargo, among others.

“Obviously, there is no influence there,” said Steve Adamske, Frank’s spokesman. Adamske added that Frank has pursued “tough executive compensation” rules for TARP. “We did TARP because we had to save the financial system,” he said.

Public Citizen’s Craig Holman said money for meeting and honorary expenses is “clearly an extension of lobbying activity” and allows companies to “hobnob and rub shoulders” with lawmakers.

“They get their name prominently displayed so the official knows who is footing the bill for this event,” he said. “They don’t chip in for free.”

Lawmakers have pressed for more disclosure on spending of TARP funds as reports of executives’ private jet planes and bonuses have become more and more frequent. In mid-January, Rep. Elijah Cummings (D-Md.) wrote to several government regulators, urging them to follow the lead of the Federal Deposit Insurance Corporation (FDIC) by requiring that institutions disclose their TARP expenditures.

“Institutions receiving federal aid cannot continue to operate with the attitude of business as usual, expecting the American taxpayers to subsidize their operations while refusing to provide even the most basic information on how they are utilizing federal assistance,” Cummings wrote.

Sens. Dianne Feinstein (D-Calif.) and Olympia Snowe (R-Maine) have gone further by introducing legislation that would restrict the banks’ political influence. If passed, their bill would ban TARP funds from being used for lobbying expenses.

Smaller banks outside of Wall Street have also been active on the charity front. Huntington Bancshares, headquartered in Columbus, Ohio, spent close to $40,000 on meeting and honorary expenses in the last six months of 2008.

Ten thousand dollars of that sum went to a daylong Oct. 20 senior management meeting, attended by 200 of the bank’s executives, according to a company spokeswoman. Sen. Sherrod Brown (D-Ohio) was a guest speaker, according to a Brown aide. Another $25,000 went to sponsorship of the West Virginia State Chamber of Commerce Annual Business Summit, held in August, where Rep. Shelley Moore Capito (R-W.Va.) and other officials spoke.

“We would have had the meeting whether Sen. Brown attended or not,” said Jeri Grier, a spokeswoman for Huntington.

Huntington has taken in nearly $1.4 billion from the Treasury’s TARP program so far.

General Motors Corp. and Chrysler LLC, which received a combined $14.4 billion by the end of December, spent $215,000 on meetings and honorary expenses in the last six months. GMAC LLC, the financing arm of GM, spent another $25,000.

“Political action committees are a legal and transparent way for our employees to pool their political voices together on issues that have a substantial effect on our company’s competitiveness,” said Greg Martin, spokesman for GM.

One of the biggest recipients of the donations were foundations and institutes associated with the Congressional Black Caucus (CBC), which received nearly $170,000.

Another group affiliated with Republican Hispanic lawmakers, the Congressional Hispanic Leadership Institute (CHLI), will see its annual gala in May 2009 partly sponsored by a TARP recipient. Popular Inc., a bank based in San Juan, Puerto Rico, has spent $7,500 on the dinner, according to records and CHLI’s executive director, Octavio Hinojosa. Popular has received $935 million in Treasury funds so far.

Fannie Mae and Freddie Mac were two of the largest contributors in the last six months, although they stopped giving money after Sept. 7, when they were taken over by the Federal Housing Finance Agency, their regulator. Fannie Mae contributed roughly $100,000 in the period. Freddie Mac contributed $230,000 in the period.

In addition to supporting CBC and Congressional Hispanic Caucus, the two mortgage firms spent money on institutes or events honoring or meeting with Sens. Dick Durbin (D-Ill.), Edward Kennedy (D-Mass.), Arlen Specter (R-Pa.) and Saxby Chambliss (R-Ga.) and Reps. Carolyn Kilpatrick (D-Mich.), James Clyburn (D-S.C.), Geoff Davis (R-Ky.), Ed Pastor (D-Ariz.), John Tanner (D-Tenn.) and John Boehner (R-Ohio) and then-Rep. Jim McCrery (R-La.).

Police Listed Gay Rights Group Among Terrorists

Police Listed Gay Rights Group Among Terrorists

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Equality Maryland, the state's largest gay rights group, was among the peaceful protest groups to be classified as terrorists in a Maryland State Police database.

The group was designated a "security threat" by the Homeland Security and Intelligence Division, which also kept dossiers on dozens of activists and at least a dozen groups. Police kept files on Equality Maryland's plans to hold rallies outside the State House in Annapolis to press for legislation reversing the state's ban on same-sex marriage. They plan to purge the files. See the documents by using these links:

Equality MD 1.pdf
Equality MD 2.pdf
Equality MD 3.pdf
Equality MD 4.pdf
Equality MD 5.pdf
Equality MD 6.pdf

The files were revealed yesterday at a press conference, where a dozen Democratic lawmakers announced plans to introduce legislation to prevent future surveillance of non-violent groups.

Police would need "reasonable articulated suspicion of actual criminal activity," before they can conduct surveillance, said the legislation's sponsors. Gov. Martin O'Malley (D) also plans to call for a similar bill.

The measure also would prevent police from keeping files on citizen

California Goes Broke, Halts $3.5 Billion in Payments

California Goes Broke, Halts $3.5 Billion in Payments

By Stephen C. Webster

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California, the eighth largest economy in the world, is broke.

"People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. "There's no money."

Since state legislators failed to meet an end of January deadline on an agreement to make up for California's $40 billion budget gap, residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease.

At least, temporarily. Services and payments will resume once state legislators come to an agreement on the budget.

"This time, there are real-world consequences," said H.D. Palmer, spokesman for the California Department of Finance, in a report by KCRA in Sacramento. "Because we have not been able to get to a budget agreement, payments aren't going to be made."

"This is an issue of fairness," said Assemblyman Ted Gaines, R-Roseville, in the KCRA report. "It hurts hardworking families the most. Refunds, in fact, will stimulate the economy, and taxpayers need their money."

"Included are $515 million in payments to the state's vendors and $280 million to help people with developmental disabilities. Other public assistance agencies will be left waiting for hundreds of millions of dollars," reports CNN. "Other public assistance agencies will be left waiting for hundreds of millions of dollars."

"I see the will during the negotiations even though these are very, very tough things that we talk about, where we go into areas that we have never, ever dreamt of going into and trying to solve," said Governor Arnold Schwarzenegger. "So you will be very surprised when the whole thing is done. We're still not there yet. There is still a lot of work that needs to be done but we are moving slowly forward with this process."

"If there is no deal by Friday, state government workers will take their first furlough day," reports the San Diego Union Tribune. "Schwarzenegger has ordered state employees to take two days off a month without pay through June 2010 to save about $1.4 billion.

"'We're really hoping we can work out a compromise that helps the governor achieve the savings he wants while minimizing the disruption to state services and to the lives of the employees who provide the services,' said Jim Zamora, spokesman for the Service Employees International Union, Local 1000, which represents the state's largest employee union with 90,000 workers."

"Some 46 states face budget shortfalls, forcing them to slash funding for many services," reported CNN. "But California, the largest state in the union by population, faces a deficit that totals more than 35% of its general fund."

State lawmakers returned to the Capitol on Monday evening to continue budget negotiations.

Who Knew Bankers Were This Stupid?

Who Knew Bankers Were This Stupid?

By Eugene Robinson

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Earth to Wall Street: It’s over, people. You had a terrific run, better than you deserved, but now you’d be wise to pay attention to those citizens outside, the ones with the pitchforks and the torches.

Sen. Claire McCaskill’s righteous verdict on shameless, clueless, bonus-grubbing executives should be carved on the tombstone of the whole “Masters of the Universe” ethos that brought us to this moment of dire economic peril: “These people are idiots.”

The Democrat from Missouri was ranting for the nation last week when she took to the floor of the Senate to denounce the reported $18.4 billion in year-end bonuses that Wall Street awarded itself—a pat on the back for such total, abject failure that taxpayers have had to shell out nearly a trillion dollars in emergency bailout funds. So far.

On the subject of Merrill Lynch, which traditionally pays its bonuses in January, McCaskill was white-hot: “You know what these sneaky guys did? They decided to give their bonuses in December, before the Bank of America took over. [They] paid out three to four billion dollars in bonuses in December, and that quarter Merrill Lynch lost $21 billion. What planet are these people on? What could they be thinking about?”

Themselves, would be my guess.

McCaskill introduced a bill to limit compensation at any company receiving bailout money to $400,000—the salary of the president of the United States. It’s hard to improve on her words: “We should have done it in the first place. But I don’t think any of us thought these guys were this stupid. I don’t think any of us believed that they would take billions of dollars in bonuses while their institutions were literally days from being wiped out. But they did. And we’ve learned our lesson.”

To the weasels, I mean executives: “Those who expect to reap the blessings of freedom, must, like men, undergo the fatigues of supporting it.” No, wait, that’s from Thomas Paine, not Claire McCaskill.

Republican Sen. Charles Grassley of Iowa called on President Obama to “pull back” the bonuses paid by firms that received bailout money. I can’t help but imagine a fleet of government tow trucks “pulling back” a bunch of brand-new BMWs to an impoundment lot.

The offending bonus payments suggest that Wall Street utterly fails to comprehend how its standing in the nation and the world has changed. As long as the Masters of the Universe kept producing wealth with their mumbo jumbo about collateralized debt obligations and credit-default swaps, we mortals were willing to tolerate their preening excesses. But it turned out that they were generating only the illusion of wealth—and that the mumbo jumbo was as nonsensical as it sounded. Ordinary Americans are now paying with their jobs, their homes, their mental and physical health. Respected economists are talking about the worst crisis since the Great Depression. And Wall Street has the gall to break out the champagne?

Things have changed. No longer does it seem reasonable—if it ever did—that the average CEO makes 344 times as much as the average worker, as estimated last August by the Institute for Policy Studies and the nonprofit group United for a Fair Economy. No longer does it seem acceptable that John Thain, the since-ousted Merrill Lynch chief who ordered those accelerated bonuses that so irked McCaskill, would spend $1.2 million of his fast-sinking firm’s money to redecorate his office—and then, with Merrill’s losses being revealed as even greater than feared, request a bonus of up to $10 million for himself.

No longer does it make any sense to reward those who work in the financial industry so lavishly, compared to the way we compensate those who, say, build tractors or write software or teach our children. Salaries should be reasonable, and bonuses—much more modest ones—should be reserved for those who actually, you know, make money. If some of Wall Street’s vaunted “talent” balks and flees, terrific. It was “talent” that got us here.

Maybe some in the industry feel fully entitled to their customary wheelbarrow of cash in a year when the stock market lost about 40 percent of its value. The people with the pitchforks and the torches beg to differ. Idiots is among the milder epithets being tossed around these days. It would be in Wall Street’s interest to get with the new program before the villagers come any closer to the castle.

Runaway Wall Street

Runaway Wall Street

By Robert Scheer
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It is instructional that only one of the three tax-challenged Obama appointees has survived public scorn to claim a high position in the new administration. Oddly enough, it is Treasury Secretary Timothy Geithner, the man who will collect our taxes, whose career has not been stunted by his failure to pay them.

What makes Geithner so special? The answer, provided by everyone from the president to the media pundits, is that his services are indispensable because he has the expertise in regulating markets needed to preside over the most massive government intervention in the economy. Are they kidding?

Both in his years in the Clinton Treasury and as chair of the New York Federal Reserve Bank, Geithner has been paving the way for a runaway Wall Street. Nor has he changed his ways, as was evidenced once again last week with his appointment of Mark Peterson, a Goldman Sachs vice president and lobbyist, to be his top aide. Peterson had lobbied strenuously for precisely the deregulation that the Obama administration now concedes needs reversing. It was confirmation that Goldman Sachs runs the Treasury Department—no matter which party is in power.

Last October The New York Times ran a devastating story entitled “The Guys From ‘Government Sachs,’ ” spotlighting the many Goldman Sachs alums operating under the firm’s former head, Henry Paulson, after he was named Treasury secretary. The problem is that Geithner, whom Obama appointed as Paulson’s replacement, was totally enmeshed in Paulson’s handout to Wall Street while chair of the New York Fed. In that capacity, Geithner was intimately involved in the highly questionable negotiations to bail out AIG, in which Goldman had a $20 billion partnership at risk.

Goldman Sachs CEO Lloyd C. Blankfein was present for those rushed and highly guarded weekend meetings, which resulted in an initial $85 billion bailout for AIG and has since grown to $122 billion. As The Times reported, “Mr. Paulson helped select a director form Goldman’s own board to lead AIG.” That decision to save AIG came after the New York Fed, led by Geithner, summarily spurned requests to save Goldman competitor Lehman Brothers. While he opposed Lehman’s attempt to reconstitute as a bank holding company and therefore obtain federal financing, he later supported a similar request by Goldman Sachs.

Another major player in those machinations was Robert Rubin, who headed Goldman Sachs before becoming Treasury secretary under Clinton and who pushed for the radical deregulation that is at the center of the banking crisis. Geithner was a protégé of Rubin’s in that effort, as was Lawrence Summers, who went on to be Clinton’s Treasury secretary after Rubin moved on to head Citigroup. Regrettably, Summers is now the key White House economics adviser.

Rubin, Geithner and Summers are hell-bent on denying the responsibility of their deregulation initiatives for the economic crisis. But the reality is that the merger of investment and commercial banks with insurance companies and stock brokers was illegal before the approval of their legislation, which reversed the Glass-Steagall Act passed under Franklin Delano Roosevelt. So, too, the newfangled financial instruments were exempted from any government regulation, thanks to the Commodity Futures Modernization Act, which Summers got Clinton to sign into law a month before he left office.

The reversal of Glass-Steagall unleashed the robber barons, as was freely conceded by Goldman CEO Blankfein in an interview he gave to The New York Times in June 2007. “If you take an historical perspective,” Blankfein said, gloating back then about the vast expansion of Goldman Sachs, “we’ve come full circle, because that is exactly what the Rothchilds or J.P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass-Steagall Act.”

The “aberration” being the sensible regulation of Wall Street to prevent another depression, which now seems dangerously close at hand. Since Glass-Steagall was repealed in 1999, Goldman Sachs experienced a 265 percent growth in its balance sheet, totaling $1 trillion in 2007.

What we need is an honest accounting of how we got into this mess, beginning with an investigation of the role of Goldman Sachs as the most insidious Wall Street player. But we are not likely to get that from an administration populated by Goldman’s Washington allies.

On Tuesday, new Attorney General Eric Holder assured Wall Street that “We’re not going to go out on any witch hunts.” But what if the once-celebrated financial wizards, still allowed to dominate our economic policies, are indeed wicked witches?

McCain Opposes Recovery Package Because It Has ‘Corporate Giveaways’ That He Once Campaigned For

McCain Opposes Recovery Package Because It Has ‘Corporate Giveaways’ That He Once Campaigned For

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Over recent weeks, Sen. John McCain (R-AZ) has emerged as a vocal critic of President Obama’s recovery package, claiming it is too big and filled with “pork.” McCain now says he will not vote for the bill in its current form in part because the legislation, in his view, does not sufficiently reduce business taxes:

McCAIN: We should have cuts for business and business taxes and small business taxes should be cut. [CBS, 2/2]

McCAIN: We need to make tax cuts permanent, and we need to make a commitment that there’ll be no new taxes. We need to cut payroll taxes. We need to cut business taxes. [FNS, 1/25]

And of course, McCain campaigned for president promising $45 billion in tax breaks for the 200 largest corporations. Yet it seems McCain has had a quick change of heart. This morning, McCain sent out an e-mail blast to his campaign mailing list complaining that “the proposal on the table is big on the giveaways for the special interests and corporate high rollers, yet short on help for ordinary working Americans”:


It’s unclear why McCain is upset that stimulus doesn’t help “ordinary Americans.” The very point of Obama’s $819 billion recovery package is to revive middle and lower-income America, which have been hit the hardest by the economic crisis. The bill, for example, includes a $500-per-worker tax break, part of the middle-class tax cut that Obama promised during his campaign.

But it is McCain himself and his conservative colleagues who have been calling for doling out handouts to the “special interests” and “corporate high rollers.” Sen. Jim DeMint’s plan (R-SC) includes permanent tax breaks for corporations and wealthy Americans. In fact, Obama included billions in tax cuts for businesses in order to reach out to conservative members of Congress.

So who is McCain criticizing with this e-mail? His own policies? His colleagues’ policies?

Hunger in the U.S.: A Problem as American as Apple Pie

Hunger in the U.S.: A Problem as American as Apple Pie

By Joel Berg

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The following is an excerpt from All You Can Eat: How Hungry Is America, by Joel Berg.

We have long thought of America as the most bounteous of nations … [t]hat hunger and malnutrition should persist in a land such as ours is embarrassing and intolerable. More is at stake here than the health and well-being of [millions of] American children. … Something like the very honor of American democracy is involved. -- President Richard Nixon, May 6, 1969, Special Message to Congress Recommending a Program to End Hunger in America

Try explaining to an African that there is hunger in America. I’ve tried, and it’s not easy.

In 1990, while on vacation, I was wandering alone through the dusty streets of Bamako, the small capital of the West African nation Mali, when a young man started walking alongside me and struck up a conversation. At first, I thought he wanted to sell me something or ask me for money, but it turned out he just wanted to talk, improve his English and learn a little about America. (He had quickly determined by my skin color that I was non-African and by my sneakers that I was American.)

When he asked me whether it was true that everyone in America was rich, I knew I was in trouble. How could I explain to him that a country as wealthy as mine still has tens of millions suffering from poverty and hunger? How could I explain to him that America -- the nation of Bill Gates, "streets paved with gold," Shaquille O’Neal and all-you-can-eat-buffets -- actually has a serious hunger problem? That in a country without drought or famine and with enough food and money to feed the world twice over 1-in-8 of our own people struggles to put food on their tables?

In Mali, such a statement was a hard sell. While that nation has one of the planet’s most vibrant cultures, it also has one of the least-developed economies. The country has a per capita annual income of $470, meaning the average person makes $1.28 per day -- and many earn far less than that, eking out subsistence livings through small-scale farming or other backbreaking manual labor. With the Sahara desert growing and enveloping ever-increasing swaths of Mali, the nation frequently suffers from widespread drought and famine. According to the United Nations, 28 percent of Mali’s population is seriously undernourished.

I tried to tell him that not all Americans were as rich as he thought, and that much of the wealth he saw was concentrated among a small number of people while the majority toiled to make a basic living. I explained that living in a cash economy such as America’s presents a different set of challenges than living in a subsistence and barter-based economy, which exists in much of Mali. That in America, you have to pay a company for oil, gas and all other basic necessities. You must pay a landlord large sums of money to live virtually anywhere. That while many workers in America earn a minimum wage equaling less than $11,000 a year for full-time work (the U.S. federal minimum wage was then $5.15 per hour), they often pay more than $1,500 per month in rent, which equals $18,000 per year. So, many actually pay more in rent than they earn. Then they have to figure out a way to pay for health care, child care, transportation, and yes, food. When Americans have expenses that are greater than their income, they must go without basic necessities.

I thought I was very persuasive, but I still don’t think I convinced him. Given that English was likely his third or fourth language, perhaps he didn’t precisely understand what I was saying. Perhaps concepts such as paying for child care didn’t resonate with him since few Malians pay others to care for their children. Moreover, I bet that -- all my caveats aside -- $11,000 a year sounded like a great deal of money to him.

Standing there in Africa, for the first time in my life I briefly had a hard time convincing even myself that hunger in the United States was something that I should seriously worry about given that things were obviously so much worse elsewhere. After all, I was forced to consider that, as bad as hunger is in America, U.S. children rarely starve to death anymore, while they still do in parts of the developing world.

But then I recalled all the people I had met throughout America who couldn’t afford to feed their families -- who had to ration food for their children, choose between food and rent, or go without medicine to be able to buy dinner -- and I reminded myself that, just because they weren’t quite dropping dead in the streets didn’t mean that their suffering wasn’t significant indeed. And then I further reminded myself that America was the nation of Bill Gates -- and more than 400 other billionaires, not to mention more than 7 million millionaires -- so it was particularly egregious that my homeland allowed millions of children to suffer from stunted growth due to poor nutrition. I thus came back to the same conclusion I reach every day: while hunger anywhere on the planet is horrid and preventable, having it in America is truly unforgivable.

It is not surprising that it is often difficult to convince average Americans that there is a serious hunger problem in the United States. Our nation tends to think of hunger as a distant, overseas, Third World problem. Our collective mental images of hunger are usually of African children with protruding ribs and bloated bellies -- surrounded by flies and Angelina Jolie -- sitting in parched, cracked dirt. When I try to explain U.S. hunger to Americans, some automatically assume I am inflating the extent of the problem. They simply don’t see it in their daily living. They know that America is the richest and most agriculturally abundant nation in the history of the world. They can’t believe that a place with so much obesity can have hunger. And besides, they assume that I am exaggerating because I am an advocate, and it is my job to exaggerate.

35.5 Million … and Counting

When people look at the facts for themselves, they discover the shocking reality: hunger amidst a sea of plenty is a phenomenon as American as baseball, jazz and apple pie. Today in the United States -- because tends of millions of people live below the meager federal poverty line and because tens of millions of others hover just above it -- 35.5 million Americans, including 12.6 million children, live in a condition described by the government as "food insecurity." Which means their households either suffer from hunger or struggle at the brink of hunger.

Primarily because federal anti-hunger safety net programs have worked, American children are no longer dying in significant numbers as an immediate result of faminelike conditions -- although children did die of malnutrition here as recently as the late 1960s. Still, despite living in a nation with so many luxury homes that the term "McMansion" has come into popular usage, millions of American adults and children have such little ability to afford food that they do go hungry at different points throughout the year -- and are otherwise forced to spend money on food that should have been spend on other necessities like heat, health care or proper child care.

Most alarmingly, the problem has only gotten worse in recent years. The 35.5 million food-insecure Americans encompass a number roughly equal to the population of California. That figure represents a more than 4 million-person increase since 1999. The number of children who live in such households also increased during that time, rising by more than half a million children. The number of adults and children who suffered from the most severe lack of food -- what the Bush administration now calls "very low food security" and what used to be called "hunger" -- also increased in that period from 7.7 million to 11.1 million people -- a 44 percent increase in just seven years.

While once confined to our poor inner cities (such as Watts, Harlem, Southeast D.C., the Chicago South Side, and the Lower Ninth Ward of New Orleans) and isolated rural areas (such as Appalachia, the Mississippi Delta, Indian reservations and the Texas/Mexico border region), hunger -- and the poverty that causes it -- has now spread so broadly that it is a significant and increasing problem in suburbs throughout the nation.

Meanwhile, just as more people need more food from pantries and kitchens, these charities have less to give. Since the government and private funding that they receive is usually fixed, when food prices increase, charities are forced to buy less. When those fixed amounts from government actually decrease (as they have in recent years), the situation goes from bad to worse.

In May 2008, America’s Second Harvest Food Bank Network -- the nation’s dominant food bank network (which, in late 2008, changed its name to Feeding America) -- reported that 100 percent of their member agencies served more clients than in the previous year, with the overall increases estimated to be 15 to 20 percent. Fully 84 percent of food banks were unable to meet the growing demand due to a combination of three factors: increasing number of clients; decreasing government aid; and soaring food prices.

The number of "emergency feeding programs" in America -- consisting mostly of food pantries (which generally provide free bags of canned and boxed groceries for people to take home) and soup kitchens (which usually provide hot, prepared food for people to eat on site) -- has soared past 40,000. As of 2005, a minimum of 24 million Americans depended on food from such agencies. Yet, given that more than 35 million Americans were food insecure, this statistic meant that about 11 million -- roughly a third of those without enough food -- didn’t receive any help from charities.

We live in a new gilded age. Inequality of wealth is spiraling to record heights, and the wealthiest are routinely paying as much as $1,500 for a case of champagne -- equal to five weeks of full-time work for someone earning the minimum wage. While welfare reform is still moving some families to economic self-sufficiency, families being kicked off the rolls are increasingly ending up on the street. Homelessness is spiking. Poverty is skyrocketing. And the middle class is disappearing.

Meanwhile, soaring food prices have made it even more difficult for families to manage. Food costs rose 4 percent in 2007, compared with an average 2.5 percent annual rise for the 1990-2006 period, according to the U.S. Department of Agriculture. For key staples, the hikes were even worse: milk prices rose 7 percent in 2007, and egg prices rose by a whopping 29 percent.

It was even tougher for folks who wanted to eat nutritiously. A study in the Seattle area found that the most nutritious types of foods (fresh vegetables, whole grains, fish and lean meats) experienced a 20 percent price hike, compared to 5 percent for food in general. The USDA predicted that 2008 would be worse still, with an overall food price rise that could reach 5 percent, and with prices for cereal and bakery products projected to increase as much as 8.5 percent.

As author Loretta Schwartz-Nobel has chronicled in her 2002 book, Growing Up Empty: The Hunger Epidemic in America, the nation’s hunger problem manifests itself in some truly startling ways. Even our armed forces often don’t pay enough to support the food needs of military families. Schwartz-Nobel describes a charitable food distribution agency aimed solely at the people who live on a Marine base in Virginia and includes this quote from a Marine: "The way the Marine Corps made it sound, they were going to help take care of us, they made me think we’d have everything we needed. … They never said you’ll get no food allowance for your family. They never said you’ll need food stamps … and you still won’t have enough." Schwatz-Nobel also quoted a Cambodian refugee in the Midwest: "My children are hungry. Often we are as hungry in America as I was in the (refugee) camps."

America’s Dirty Secret Comes Out of Hiding

From 1970 to 2005, the mass media ignored hunger. But due to the surge of intense (albeit brief) media coverage of poverty in the aftermath of Hurricane Katrina, and subsequent reporting of food bank shortages and the impact of increasing food prices on the poor, the American public has been slowly waking to the fact that hunger and poverty are serious, growing problems domestically. Plus, more and more Americans suffer from hunger, have friends or relatives struggling with the problem, or volunteer at feeding charities where they see the problem for themselves.

Harmful myths about poverty are also starting to be discredited. While Americans have often envisioned people in poverty as lazy, healthy adults who just don’t want to work, 72 percent of the nation’s able-bodied adults living in poverty reported to the Census Bureau in 2006 that they had at least one job, and 88 percent of the households on food stamps contained either a child, an elderly person or a disabled person. It is harder and harder to make the case that the trouble is laziness and irresponsibility. The real trouble is the inability of many working people to support their families on meager salaries and the inability of others to find steady, full-time work.

Fundamentally a Political Problem

As far as domestic issues go, hunger is a no-brainer. Every human being needs to eat. Hunger is an issues that is universally understandable. And everyone is against hunger in America. Actually, you’d be hard-pressed to find anyone in America who says they’re for hunger.

Unlike other major issues such as abortion, gun control and gay marriage -- over which the country is bitterly divided based on deeply held values -- Americans of all ideologies and religions are remarkably united in their core belief that, in a nation as prosperous as America, it is unacceptable to have people going hungry.

Even ultraconservative President Ronald Reagan, after being embarrassed when his top aide Edwin Meese suggested that there was not really hunger in America and that people were going to soup kitchens just so they could get a "free lunch," was quickly forced to issue a memo stating his abhorrence of domestic hunger and his intention to end it. Since then, Presidents George H.W. Bush, Bill Clinton and George W. Bush -- and high-profile members of the Senate and the House -- have all given speeches laced with ringing denunciations of domestic hunger. Even right-wing think tanks -- which often minimize the extent of hunger or say that hunger is the fault of hungry people -- claim they want to end any hunger that may exist.

So why haven’t we ended this simple problem? One word: politics.

If we were to put the American political system on trial for its failures, hunger would be "Exhibit A." Domestic hunger is not a unique problem; it is actually emblematic of our society’s broader problems. The most characteristic features of modern American politics -- entrenched ideological divisions, the deceptive use of statistics, the dominance of big money, the passivity and vacuity of the media, the undue influence of interest groups and empty partisan posturing -- all work in tandem to prevent us from ending domestic hunger.

If we can’t solve a problem as basic as domestic hunger -- over which there is so much theoretical consensus -- no wonder we can’t solve any of our more complicated issues such as immigration and the lack of affordable health care. In 1969, reaching a similar conclusion, Sen. George McGovern, D-S.D., chairman of the Senate Select Committee on Nutrition and Human Needs, put it this way:

Hunger is unique as a public issue because it exerts a special claim on the conscience of the American people. … Somehow, we Americans are able to look past slum housing … and the chronic unemployment of our poor. But the knowledge that human beings, especially little children, are suffering from hunger profoundly disturbs the American conscience. … To admit the existence of hunger in America is to confess that we have failed in meeting the most sensitive and painful of human needs. To admit the existence of widespread hunger is to cast doubt on the efficacy of our whole system. If we can’t solve the problem of hunger in our society, one wonders if we can resolve any of the great social issues before the nation.

It is not surprising that liberal McGovern would make such a statement, but it is a bit shocking that Republican Nixon -- McGovern’s opponent in the 1972 presidential election -- made similar statements during his presidency, after having denied that hunger was a serious problem. The reason Nixon finally acknowledge domestic hunger -- and ultimately took serious action to rescue it -- was that he was forced to do so by a combination of grassroots citizen agitation and concentrated national media attention on the issue.

In more recent decades, we’ve gone backward, and our modern elected officials deserve most of the blame. While, in the 1970s, the newly instituted federal nutrition safety net that Nixon and McGovern helped create ended starvation conditions and almost eliminated food insecurity altogether, in the early 1980s, Reagan and a compliant Democratic Congress slashed federal nutrition assistance and other antipoverty programs. Reagan also began the multi-decade process of selling the nation on the false notion that the voluntary and uncoordinated private charity could somehow make up for a large-scale downsizing in previously mandatory government assistance. Predictably, hunger again rose.

Both Bush administrations and the Newt Gingrich Congress enacted policies that worsened America’s hunger problem. But when a somewhat more aggressive Democratic congress took over in 2007, Congress slightly raised the minimum wage and added a bit more money for the Special Supplemental Nutrition Program for Women, Infants and Children -- better known as the WIC food program -- and, in 2008, they somewhat increased food stamp benefits. Certainly, small advances under Democratic leadership were much better than the consistent setbacks under the Republicans. But even liberal Democratic leaders have proved unlikely to propose bolder efforts because they worry that such a focus might turn off middle-class "swing voters," and because big-money donors -- who now control the Democratic Party nearly as much as they control the Republican Party -- have different priorities.

Even when elected officials of both parties do want to substantively address hunger and poverty, they usually get bogged down in all-but-meaningless ideological debates, rhetorical excesses and score-settling partisan antics. Certainly, it’s not just elected officials who are to blame. Many religious denominations that denounce hunger also teach their congregations (consciously or unconsciously) that hunger is an inevitable part of both human history and God’s will. While it should be ameliorated with charitable acts, they sadly teach, it can’t really be eliminated. Businesses that donate food to charities often oppose increases in the minimum wage and other government policies that would decrease people’s need for such donated food. The news media, funded by ads from businesses and politicians, rarely point out these discrepancies and focus instead on cheerleading for superficial, holiday-time charitable efforts.

But most harmfully, Americans all over the country have been tricked into thinking that these problems can’t be solved and that the best we can hope for is for private charities to make the suffering marginally less severe. America can end hunger. By implementing a bold new political and policy agenda to empower low-income Americans and achieve fundamental change based upon mainstream values, America can end hunger quickly and cost-effectively. That achievement would concretely improve tens of millions of lives, and, in the process, provide a blueprint for fixing the broader problems of our entire, bilge-ridden political system.

Outside the Taylor Grocery and Restaurant (which serves the world’s best grilled catfish) in Taylor, Miss., is a sign that says, "Eat or We Both Starve." Not only is that slogan a good way to sell catfish, it is a great way to sum up why our collective self-interest should compel us to end domestic hunger.

No society in the history of the world has sustained itself in the long run with as much inequality of wealth as exists in America. Growing hunger and poverty, if left unchecked, will eventually threaten the long-term food security, finances and social stability of all Americans, even the ones who are currently middle class or wealthy. At the dawn of a new presidency, as the nation clamors for change and a new direction, hunger is a problem too simple and too devastating to ignore.

Joel Berg is executive director of the New York City Coalition Against Hunger and served eight years in the Clinton administration in senior executive service positions at the Department of Agriculture. He is the author of the new book ALL YOU CAN EAT: How Hungry Is America?