Wednesday, May 6, 2009

Economic Casualties Pile Into Tent Cities

Economic casualties pile into tent cities

By Emily Bazar

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Jim Marshall recalls everything about that beautiful fall day.

The temperature was about 70 degrees on Nov. 19, the sky was "totally blue," and the laughter from a martini bar drifted into the St. Petersburg park where Marshall, 39, sat contemplating his first day of homelessness.

PHOTOS: Tent cities help victims of a bad economy

"I was thinking, 'That was me at one point,' " he says of the revelers. "Now I'm thinking, 'Where am I going to sleep tonight? Where do I eat? Where do I shower?' "

The unemployed Detroit autoworker moved to Florida last year hoping he'd have better luck finding a job. He didn't, and he spent three months sleeping on sidewalks before landing in a tent city in Pinellas County, north of St. Petersburg, on Feb. 26.

Marshall is among a growing number of the economic homeless, a term for those newly displaced by layoffs, foreclosures or other financial troubles caused by the recession. They differ from the chronic homeless, the longtime street residents who often suffer from mental illness, drug abuse or alcoholism.

For the economic homeless, the American ideal that education and hard work lead to a comfortable middle-class life has slipped out of reach. They're packing into motels, parking lots and tent cities, alternately distressed and hopeful, searching for work and praying their fortunes will change.

"My parents always taught me to work hard in school, graduate high school, go to college, get a degree and you'll do fine. You'll do better than your parents' generation," Marshall says. "I did all those things. … For a while, I did have that good life, but nowadays that's not the reality."

Tent cities and shelters from California to Massachusetts report growing demand from the newly homeless. The National Alliance to End Homelessness predicted in January that the recession would force 1.5 million more people into homelessness over the next two years. Already, "tens of thousands" have lost their homes, Alliance President Nan Roman says.

The $1.5 billion in new federal stimulus funds for homelessness prevention will help people pay rent, utility bills, moving costs or security deposits, she says, but it won't be enough.

"We're hearing from shelter providers that the shelters are overflowing, filled to capacity," says Ellen Bassuk, president of the National Center on Family Homelessness. "The number of families on the streets has dramatically increased."

'A change in the population'

Pinellas Hope, the tent city run by Catholic Charities here since December 2007, has been largely for the chronically homeless, some of whom suffer from mental illness or struggle with drugs or alcohol.

About 20% of its 240 residents became homeless recently because of the economic downturn, says Frank Murphy, president of Catholic Charities, Diocese of St. Petersburg.

"We're seeing a change in the population. … We're seeing a lot more that are just plain losing their jobs and their homes," says Sheila Lopez, chief operating officer of the charity. "A lot are either job-ready or working but have lost their home because they were laid off, or their apartment, and now can't go to work because they're not shaven, they're not clean, they're living in a car, or they're living on the street."

The charity plans to expand the tent city and build an encampment in a neighboring county, an idea that has drawn objections from nearby homeowners and businesses.

Communities elsewhere are facing similar pressures:

• In Massachusetts, a record number of homeless families need emergency shelter, says Robyn Frost, executive director of the Massachusetts Coalition for the Homeless. In mid-April, there were 2,763 families in shelters, including 655 in motels because the shelters were full, an increase of 36% since July, she says.

"We have a high number of foreclosure properties, and many of them are multifamily apartments," Frost says. "We were seeing a great number of families being displaced."

• Reno officials shut down a tent city in October after making more shelter space available, but new encampments are popping up along the Truckee River and elsewhere, says Kelly Marschall of the Reno Area Alliance for the Homeless.

The homeless include "a startling number of first-time homeless," she says. "We asked them what industries they were involved in. The majority were talking about construction, the housing industry, real estate. There was a direct correlation to the housing market crash."

• In Santa Barbara, Calif., 84 men and women sleep in their cars, trucks or recreational vehicles in 17 parking lots around the city, says Jason Johnson with the New Beginnings Counseling Center, which runs the RV Safe Parking Program. The city, which allows the use of three municipal lots at night, supports the program, says city parking superintendent Victor Garza. Last May, there were 58 participants and no waiting list. Now 40 people are waiting.

"People's last refuge has become their vehicle," Johnson says.

Objections by residents

Pinellas Hope in Florida looks like a cookie-cutter subdivision, except that the orderly rows are of tents, not houses. Besides 250 tents, all of similar size, shape and color, there are 15 wooden sheds, 6 feet by 8 feet, that Catholic Charities built as shelters.

The charity plans to reduce the number of tents to 150 and erect 100 sheds, which are more durable, and build as many as 80 permanent studio apartments on the property, Murphy says.

His group also wants to open a campground for 240 homeless people in neighboring Hillsborough County, he says, primarily using wooden sheds.

Unlike Pinellas Hope, which doesn't border residential neighborhoods, the Hillsborough County parcel is across the street from a tidy 325-home subdivision called East Lake Park. There, opponents of the tent city have a website:

Hal and Cindy Hart are raising three grandchildren in their home on the lake. The kids, 4 to 13, fish for bass, ride their bikes to friends' houses and attend neighborhood parties.

The Harts fear that large numbers of homeless people, some with addictions and criminal backgrounds, would loiter in the neighborhood. "We will not be able to let our grandchildren ride their bikes outside without constant supervision," says Hal Hart, 52, a paralegal.

The Harts agree that the homeless population needs services, but they think the emphasis should be on programs that will help families, not single adults.

Murphy says the diocese wants to address the neighbors' concerns and has lowered the number of proposed occupants from 500.

'A temporary situation'

Pinellas Hope, which has a waiting list of about 150 people, is attracting a growing stream of homeless men, women and couples. Families with children are sent to area shelters.

New arrivals must agree to rules, such as not using drugs or alcohol, and perform chores, Lopez says. They get mats, sleeping bags, toiletries, flip-flops for showers and lockable boxes in their tents to store valuables. Within one week, they must make a plan describing how they will work their way out of homelessness.

Residents are expected to move on within five months, but some stay longer. Campers have access to trailers with bathrooms, showers, computers, washers and dryers and a room of donated clothes. They get a free bus pass the first month and advice on writing résumés.

By day, some leave camp to look for work or ride the bus to pass the time. Others stay, watching TV in large communal tents, doing laundry or playing Monopoly. At night, an off-duty police officer patrols the camp, which is governed by curfews: 10:30 p.m. on weeknights and midnight Fridays and Saturdays.

The camp bustles at dinnertime, when everyone gathers for a hot meal provided by churches and other organizations.

A year ago, there were 5,500 homeless people in Pinellas County, says St. Petersburg police officer Richard Linkiewicz, a homeless-outreach officer. This year, there are 7,500, including 1,300 children in homeless families, he says.

Many of the newly homeless worked in construction, a booming industry in Florida before the economic bust, he says.

David Grondin, 48, moved in on Feb. 7 and stayed for two months. A union carpenter, he graduated from the University of South Florida in 1999 with a bachelor's degree in fine arts.

He struggled as carpentry work and odd jobs disappeared. When his 1992 Saturn died in August, he could no longer get to jobs far from public transportation routes.

Frustrated by his inability to find a job in Florida, last month Grondin took a bus to Portland, Maine, where he's staying with friends and looking for carpentry work. "I was definitely middle class," he says. "I had a car. I got a paycheck every week."

Kevin Shutt, 53, moved into Pinellas Hope in March after he was laid off from his job waiting tables because diners "stopped coming through the doors," he says.

Shutt has decorated his tent with house plants, including a ficus tree his mother gave him nearly 30 years ago, and pinned Tampa Bay Rays and Buccaneers jerseys to the inside walls.

He tearfully recounts how he got kicked out of his apartment by a roommate when he couldn't come up with the rent. A former homeowner who made Caesar salads tableside at restaurants, now he can't get a job at Taco Bell, he says. "This is the first time in my life I ever dreamed about living in a tent," he says.

An optimist by nature, Shutt vows that his stay will be short. He has filled out more than 175 job applications and occasionally works for a friend doing canvas work on boats. "This is a temporary situation," he says.

A diminished outlook

Marshall, the former autoworker, has an associate's degree in electronic engineering and is less encouraged.

He remembers a comfortable life in Michigan, where he worked in automotive testing, owned a brick ranch-style home, made up to $50,000 a year and played in softball leagues.

Companies he worked for started losing contracts a few years ago, and eventually the work dried up, he says. He sold his house and moved into an apartment, but by 2007 he couldn't pay the rent.

He came to Florida in August, thinking the job market was better. But he couldn't pay the rent here, either.

At Pinellas Hope, Marshall searches online job sites or takes the bus to apply for work at McDonald's, factories and Wal-Mart. He gets $45 a week selling his blood plasma.

"I have my résumé online. I go door to door. I make phone calls," he says. "I have not received one phone call, one e-mail. I thought with my experience and my degree, it wouldn't be this difficult."

Marshall feels ill at ease in the camp and has trouble sleeping, and not just because of the armadillos that burrow under his tent. "I'm scared," he says. "If I can't find a job, where do I go next?"

At this point, he has lowered his expectations. "I don't expect ever to make $50,000 a year working in the auto industry, but just enough to survive, have my own place, buy my own food, my own clothes," he says. "What every American would expect."

Revealed: U.S. Interrogators May Have Killed Dozens of Detainees

Revealed: U.S. Interrogators May Have Killed Dozens of Detainees

By John Byrne

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United States interrogators killed nearly four dozen detainees during or after their interrogations, according a report published by a human rights researcher based on a Human Rights First report and followup investigations.

In all, 98 detainees have died while in U.S. hands. Thirty-four homicides have been identified, with at least eight detainees -- and as many as 12 -- having been tortured to death, according to a 2006 Human Rights First report that underwrites the researcher’s posting. The causes of 48 more deaths remain uncertain.

The researcher, John Sifton, worked for five years for Human Rights Watch. In a posting Tuesday, he documents myriad cases of detainees who died at the hands of their U.S. interrogators. Some of the instances he cites are graphic.

Most of those taken captive were killed in Afghanistan and Iraq. They include at least one Afghani soldier, Jamal Naseer, who was mistakenly arrested in 2004. “Those arrested with Naseer later said that during interrogations U.S. personnel punched and kicked them, hung them upside down, and hit them with sticks or cables,” Sifton writes. “Some said they were doused with cold water and forced to lie in the snow. Nasser collapsed about two weeks after the arrest, complaining of stomach pain, probably an internal hemorrhage.”

Another Afghan killing occurred in 2002. Mohammad Sayari was killed by four U.S. servicemembers after being detained for allegedly “following their movements.” A Pentagon document obtained by the American Civil Liberties Union in 2005 said that the Defense Department found a captain and three sergeants had “murdered” Sayari, but the section dealing with the department’s probe was redacted.

Perhaps the most macabre case occurred in Iraq, which was documented in a Human Rights First report in 2006.

“Nagem Sadoon Hatab… a 52-year-old Iraqi, was killed while in U.S. custody at a holding camp close to Nasiriyah,” the group wrote. “Although a U.S. Army medical examiner found that Hatab had died of strangulation, the evidence that would have been required to secure accountability for his death -- Hatab’s body -- was rendered unusable in court. Hatab’s internal organs were left exposed on an airport tarmac for hours; in the blistering Baghdad heat, the organs were destroyed; the throat bone that would have supported the Army medical examiner’s findings of strangulation was never found.”

In another graphic instance, a former Iraqi general was beaten by U.S. forces and suffocated to death. The military officer charged in the death was given just 60 days house arrest.

“Abed Hamed Mowhoush [was] a former Iraqi general beaten over days by U.S. Army, CIA and other non-military forces, stuffed into a sleeping bag, wrapped with electrical cord, and suffocated to death,” Human Rights First writes. “In the recently concluded trial of a low-level military officer charged in Mowhoush’s death, the officer received a written reprimand, a fine, and 60 days with his movements limited to his work, home, and church.”

Another Iraqi man was killed in a U.S. detention facility on Mosul in 2003.

“U.S. military personnel who examined Kenami when he first arrived at the facility determined that he had no preexisting medical conditions,” the rights group writes. “Once in custody, as a disciplinary measure for talking, Kenami was forced to perform extreme amounts of exercise -- a technique used across Afghanistan and Iraq. Then his hands were bound behind his back with plastic handcuffs, he was hooded, and forced to lie in an overcrowded cell. Kenami was found dead the morning after his arrest, still bound and hooded. No autopsy was conducted; no official cause of death was determined. After the Abu Ghraib scandal, a review of Kenami’s death was launched, and Army reviewers criticized the initial criminal investigation for failing to conduct an autopsy; interview interrogators, medics, or detainees present at the scene of the death; and collect physical evidence. To date, however, the Army has taken no known action in the case.”

Death from interrogation is hard to separate from simple detainee death while in U.S. custody. But one particular case stands out that seems to have fallen by the wayside -- the murder of CIA “ghost” detainee named Manadel al-Jamadi, who was tortured to death by a CIA team at Abu Ghraib in 2003.

“Pictures of Abu Ghraib guards Charles Graner and Sabrina Harman posing with al-Jamadi’s dead body, the so-called Ice Man, were among the most notorious of the Abu Ghraib photographs published in April 2004,” Sifton notes. “A CIA officer named Mark Swanner and an interpreter led the team that interrogated al-Jamadi. Nine Navy personnel were also implicated. An autopsy conducted by the U.S. military five days after al-Jamadi’s death found that the cause: “blunt force injuries complicated by compromised respiration.”

“Reporting by The New Yorker’s Jane Mayer and NPR’s John McChesney revealed that al-Jamadi was strung up from handcuffs behind his back, a torture tactic sometimes called a ‘Palestinian hanging,’” he adds. “After an investigation, the CIA referred the case to the Department of Justice for possible criminal prosecution of the CIA personnel involved, but no charges were ever brought. Prosecutors accused 10 Navy personnel of the crime; nine were given nonjudicial punishments, such as rank reductions and letters of reprimand, and a 10th was acquitted.”

Additionally, Sifton notes the CIA may have had some close calls with detainees nearly dying during interrogations: the May 10, 2005, Bush Administration torture memo by Steven Bradbury notes that doctors were nearby to perform a tracheotomy if during waterboarding the suspect is approaching death.

“Most seriously, for reasons of physical fatigue of psychological resignation, the subject may simply give up, allowing excessive filling of the airways and loss of consciousness,” Bradbury wrote. “An unresponsive subject should be righted immediately, and the integrator should deliver a sub-xyphoid thrust to expel the water. If this fails to restore normal breathing, aggressive medical intervention is required. ...’”

The says CIA doctors were on hand with necessary equipment to perform a tracheotomy if necessary during waterboarding sessions: “[W]e are informed that the necessary emergency medical equipment is always present -- although not visible to the detainee -- during any application of the waterboard.”

Bush Officials Try to Alter Ethics Report

Bush Officials Try to Alter Ethics Report

Focus Is Approval of Harsh Interrogations

By Carrie Johnson

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Former Bush administration officials have launched a behind-the-scenes campaign to urge Justice Department leaders to soften an ethics report criticizing lawyers who blessed harsh detainee interrogation tactics, according to two sources familiar with the efforts.

Representatives for John C. Yoo and Jay S. Bybee, subjects of the ethics probe, have encouraged former Justice Department and White House officials to contact new officials at the department to point out the troubling precedent of imposing sanctions on legal advisers, said the sources, who spoke on the condition of anonymity because the process is not complete.

The effort began in recent weeks, the sources said, and it could not be determined how many former officials had reached out to their new counterparts.

A draft report of more than 200 pages, prepared in January before Bush's departure, recommends disciplinary action, rather than criminal prosecution, by state bar associations against Yoo and Bybee, former attorneys in the department's Office of Legal Counsel, for their work in preparing and signing the interrogation memos. State bar associations have the power to suspend a lawyer's license to practice or impose other penalties.

The memos offered support for waterboarding, slamming prisoners against a flexible wall and other techniques that critics have likened to torture. The documents were drafted between 2002 and 2005.

The investigation, now in its fifth year, could shed new light on the origins of the memos. Investigators rely in part on e-mail exchanges among Justice Department lawyers and attorneys at the CIA who sought advice about the legality of interrogation practices since been abandoned by the Obama administration.

Two of the authors, Bybee, now a federal appeals court judge, and Yoo, now a law professor in California, had a Monday deadline to respond to investigators.

Miguel Estrada, an attorney for Yoo, said, "As a condition of permitting me to represent Professor Yoo in this matter, the Department of Justice required me to sign a confidentiality agreement. As a result of that agreement, there's nothing I can say."

Maureen Mahoney, an attorney for Bybee, also cited the confidentiality requirement in declining to comment.

The legal analysis on interrogation prepared by a third former chief of the Office of Legal Counsel, Steven G. Bradbury, also was a subject of the ethics probe. But in an early draft, investigators did not make disciplinary recommendations about Bradbury.

In a separate effort to counterbalance the draft report, Attorney General Michael B. Mukasey and Deputy Attorney General Mark R. Filip wrote a 14-page letter before they left office this year. They described the context surrounding the origins of the memos, written at a time when officials feared another terrorist strike on American soil.

Both Mukasey and Filip were dissatisfied with the quality of the legal analysis in the wide-ranging draft report, sources said. Among other things, the draft report cited passages from a 2004 CIA inspector general's investigation and cast doubt on the effectiveness of the questioning techniques, which sources characterized as far afield from the narrow legal questions surrounding the lawyers' activities. The letter from Mukasey and Filip has not been publicly released, but it may emerge when the investigative report is issued.

A person who has spoken with both Mukasey and Filip said yesterday that neither had been solicited to approach new department leaders about the ethics report.

Late Monday, Assistant Attorney General Ronald W. Weich wrote senior congressional Democrats to offer an update about the status of the ethics investigation, which is being conducted by the Justice Department's Office of Professional Responsibility. Weich told Sens. Richard J. Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.) that Attorney General Eric H. Holder Jr. and Deputy Attorney General David W. Ogden "will have access to whatever information they need to evaluate the final report and make determinations about appropriate next steps."

Authorities did not signal in the letter when or in what form the report will be released. The biggest holdup had been that the content of the interrogation memos was classified, but the documents were released last month by the Justice Department. Sources said the highly anticipated report could emerge as soon as this summer.

Mary Patrice Brown, new chief of the Justice Department ethics office, told an audience of lawyers last night that her preference is toward "transparency" and releasing investigative reports on a case-by-case basis, depending on the "severity" of the misconduct and the public's interest.

Any disciplinary findings about the former Justice lawyers could energize calls within Congress and among left-leaning interest groups for criminal prosecution of Bush administration officials who authorized the interrogations and for an independent congressional inquiry into the origins of the practices.

In an interview yesterday, Durbin said it was too early to call for a special prosecutor or another congressional probe.

But, he said, many important questions remained unanswered. "It's a question of responsibility. In this chain of command, how far up did it go?"

Marines and Multinational Forces Train in Florida

Multinational forces storm Mayport beach for drills

The surprise scene at the shore startled beachgoers, but readied the troops.


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A man looks up from sunbathing Saturday on Mayport beach to snap some ground-level photos of the Marines that landed by amphibious craft during exercises that involved eight countries.

Sailors and Marines along the beach at Mayport began moving the crowd away from the water Saturday afternoon as the amphibious assault vehicles approached across the waves.

"Everybody back up!" a sailor shouted. "Keep backing up. Now move back just a little more."

Moments later, the vehicles - looking like the offspring of a submarine and a tank - burst through the surf, surging forward as their treads bit into the sand.

The hydraulic brakes slammed into action, and the rear of the vehicles opened, disgorging more than 100 troops from eight countries.

"Left, go left!" shouted a U.S. Marine. "Shape up over there!"

Overhead, a brace of helicopters rented the sky.

The assault on the beach at Mayport Naval Station was part of the Marine's Partnership of the Americas exercise, held in conjunction with the Navy's Unitas exercise.

"It's really a learning environment for everybody," said Col. Jay Huston, commanding officer of the task force doing the exercise.

During the past week, the troops - Marines from the U.S. and six countries in Central and South America, as well as soldiers from Canada - worked together at Camp Blanding, fast-roping out of helicopters, firing weapons and sharing tactics.

They jelled quickly.

"The only difference in identity" said Lt. Col. Jorge Garcia of Colombia, "is in the color of the uniforms. We have the same objectives."

That was evident on the amphibious transport dock ships the troops boarded in the past few days: Throughout the USS Mesa Verde, for example, gaggles of marines from Chile conversed with those from Peru and troops from Colombia shared war stories with those from the United States.

That type of interaction is vital considering that multinational forces operating in the region need to cooperate in the field.

"We are better for these exercises," said Maj. Gen. James Williams. "At the end of the day, you can't do that sort of thing unless you figure it out in advance."

For the vast majority of U.S. Marines, Saturday's exercise was the first time they'd experienced an amphibious assault.

That made riding in the assault vehicles - which plow along beneath the water until approaching the beach - an experience.

"It was pretty great," said Petty Officer 2nd Class Rene Quintero, a medic working with the Marines. "When we hit the surf, it just jumped up."

The entire exercise, Quintero said, brought the troops from all the nations together. "They're true professionals," he said. "We've gathered the best out of all the nations."

A few minutes after those professionals hit the sand around their assault vehicles, the exercise was over. The troops stood, brushed sand from their uniforms and shook hands with one other.

The next mission: An hour-long bus ride back to Camp Blanding. As the men lined up to march over to the vehicle, the crowd applauded.

Will NorthCom take over in Swine Flu Outbreak?

Will NorthCom take over in Swine Flu Outbreak?

By Matthew Rothschild
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The swine flu outbreak raises a lot of fears.

Here’s one you might not have thought of yet: The Pentagon may be taking over more and more of our civil society in this crisis.

Back in 2002, President Bush created NorthCom, the Pentagon’s Northern Command, which has jurisdiction over the United States.

And NorthCom has been running preparedness drills in the event of a flu pandemic for at least the past three years.

Making things more alarming, NorthCom got assigned its own fighting unit six months ago—the Army’s 3rd Infantry Division’s 1st Brigade Combat Team, which had spent much of the last five years battling things out in Iraq.

The assignment of that fighting unit alarmed the American Civil Liberties Union (ACLU). “This is a radical departure from separation of civilian law enforcement and military authority and could, quite possibly, represent a violation of law,” said Mike German, ACLU national security policy counsel.

Testifying in March, General Victor Renuart, head of NorthCom, said it would provide “assistance in support of civil authorities” during an epidemic. And, he added, “when requested and approved by the Secretary of Defense or directed by the President, federal military forces will contribute to federal support.” But he boasted: “USNorthCom does not wait for that call to action.”

He noted that NorthCom has prepared for a flu outbreak from Mexico. “Because Mexico is our neighbor and disasters do not respect national boundaries, we are focused on developing and improving procedures to respond to potentially catastrophic events such as pandemic influenza outbreak, mass exposure to dangerous chemicals and materials, and natural disasters,” he testified.

NorthCom also has a “private sector cell,” Renuart said in a talk to the Heritage Foundation on August 20, 2008. “We have great participation from industry and from other organizations around the country.”

One private sector group that has worked with the FBI and Homeland Security on pandemics is InfraGard. This is group of more than 30,000 businesspeople who have special access to confidential FBI information and may be assigned special—and lethal—duties in times of an emergency (See “The FBI Deputizes Business”).

An InfraGard chapter held a meeting at NYU Medical Center on February 21, 2007 on “Pandemic Preparedness Planning: the Case for Public-Private Collaboration”.

InfraGard also participated in a conference entitled “Surviving the Pandemic,” held in Madison, Wisconsin, October 12, 2006. That conference was co-sponsored by the Southeast Wisconsin Homeland Security Partnership, two centers at the University of Wisconsin, the Madison Area Technical College, Alliant Energy, and American Family Insurance.

InfraGard wants to be a player in pandemic response. “Utilization of their expertise will help local communities prepare for a possible pandemic event to ensure minimal disruption and quick recovery,” one InfraGard press release stated.

Whether and how InfraGard and NorthCom might be working together in this swine flu outbreak is unclear.

Similarly, it is unclear what actions NorthCom might take if an all-out pandemic ensues.

One last concern: George W. Bush bestowed upon the Presidency enormous powers, essentially to be in charge of every branch of government, as well as state and local and tribal governments and the private sector, in the event of a “catastrophic emergency.” (See National Security Presidential Directive 51)

We’re in a public health emergency now. It’s not “catastrophic” yet. But it appears to be up to the President—and the President only—to make that determination, according to the directive.

Congress needs to hold hearings on NorthCom, InfraGard, and National Security Presidential Directive 51.

We must insist on our rights, even in emergencies.

The Obama recovery

The Obama recovery

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In an extraordinary interview published in Sunday’s New York Times magazine, President Obama outlined his vision for the US economy in a piece entitled “After the Great Recession.” The interview was conducted by economic columnist David Leonhardt after Obama had delivered a major speech on restructuring the US economy at Georgetown University on April 14.

In the interview, Obama makes clear that there will be no serious structural reform of the banking system. Any regulatory changes introduced to rein in “some of the massive leveraging and the massive risk-taking” that precipitated the financial crash will be designed to restore “confidence and trust” in the financial sector, including the “market for securitized products.”

Obama specifically rejects restoring the barrier between investment banking and commercial banking put in place by the 1933 Glass-Steagall Act, the most important financial regulatory reform of the Depression era. The act was one of the victims of the financial deregulation of the late 1990s, carried out by then-President Bill Clinton’s treasury secretary and current top Obama economic adviser Lawrence Summers.

In his interview, Obama acknowledges that his main economic advisors are all protégés of Robert Rubin, a top Clinton economic adviser and former co-chairman of the investment bank Goldman Sachs. These include Summers, Treasury Secretary Timothy Geithner and budget director Peter Orszag. Any regulatory measures instituted by this crowd will serve only to preserve the framework of speculation and parasitism that garnered huge fortunes on Wall Street while triggering the worst global economic crisis since the 1930s.

In his Georgetown University speech, Obama outlined a reactionary program for the restructuring of American capitalism in the aftermath of the financial crash. This would involve a permanent reduction in the living standards and ratcheting up of the exploitation of the working class, and entail unprecedented cuts in basic social programs such as Medicare, Medicaid and Social Security. “We must lay a new foundation for growth and prosperity,” Obama told his audience, “where we consume less at home and send more exports abroad.”

The president returns to this theme in his interview, making clear that the days of “middle-class” wages for less-skilled and manufacturing workers are gone for good. That is the implication of his insistence that every American will need “enough post-high-school training to be competent in fields that demand technical expertise.” Without that, he declares, “it would be very hard to imagine getting a job that pays a living wage.”

Under his educational “reform,” schooling, from pre-kindergarten to post-graduate studies, will be focused on teaching skills needed for corporate America to compete in the global economy. But even attaining a college degree, Obama acknowledges, pointing to the increasing number of white-collar jobs being outsourced, is no longer a guarantee of economic security.

Obama declares his hope that a “post-bubble economy” will achieve a better balance between “making things” and financial services. However, he immediately adds, “We’re not going to return to an economy in which manufacturing is as large a percentage as it was back in the 1940s.”

In fact, as his restructuring of General Motors and Chrysler demonstrates, his administration has set out to further shrink the country’s manufacturing base, gutting decent-paying industrial jobs in order to create smaller, more highly exploitative manufacturing firms that will provide more lucrative sources of profit for the banks and big investors.

Most revealing and chilling are Obama’s remarks on slashing health care costs, the centerpiece of a policy of austerity for the American people. Far from outlining a plan to provide good quality health care for all, he speaks of rationing health care for working people.

Obama notes that he and his budget director have been talking about using “comparative-effectiveness studies as a way of reining in costs.” Under such a scheme, he explains, the government would urge patients to use lower-cost medicines and treatments, even if a doctor ordered a more expensive cure.

This is particularly needed, he says, “when it comes to Medicare and Medicaid, where the taxpayers are footing the bill and we have an obligation to get those costs under control.”

This from a president who presides over a country where the richest 1 percent control more than 40 percent of the wealth, where CEOs routinely award themselves tens of millions of dollars a year, and where his administration is handing out trillions of dollars in taxpayer funds to Wall Street.

What follows in the interview is a bizarre exchange about whether it is cost-effective to treat elderly people in the last stages of their lives, with the Times interviewer suggesting that the nation is currently squandering $20,000 for an extra week of life.

“Exactly,” Obama says. He then recounts the experience of his grandmother, who was diagnosed with terminal cancer during his election campaign and shortly afterwards broke her hip.

Obama says he would have paid out of pocket for the hip replacement, but suggests that the government should not have to foot the bill for such care. Whether “society making those decisions to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill, is a sustainable model, is a very difficult question,” he muses.

These “very difficult moral issues,” the president complains, are a “huge driver of cost.” He asserts that the “chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here.”

It would be very difficult to make such decisions through “normal political channels,” Obama says, adding that the Democratic Congress is currently discussing the setting up of an independent body that would give “guidance” on these questions.

As with every other question, the Obama administration’s approach to health care subordinates social need to the powerful financial interests, including insurance, drug and hospital conglomerates, that have the decisive say in the policies of the government, whether Republican or Democratic.

In the post-recession America Obama envisions, a financial aristocracy will continue to monopolize society’s wealth, while the living standards of working people are permanently lowered. In the entire interview on America after the “Great Recession,” there is not a single reference to social inequality—the issue that dominates all aspects of American life.

The interview, appearing in the midst of a heady rally on Wall Street even as unemployment, homelessness and poverty grow to near-Depression levels, is a stark demonstration of the right-wing character of the Obama administration and the class interests it serves. It shows why the bankers and speculators are celebrating an administration that dutifully serves their interests.

US companies mobilize to block limits on corporate tax dodges

Obama proposes token measures to close foreign tax loopholes

By Andre Damon

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The Obama administration on Monday unveiled a proposal to limit certain tax loopholes for US corporations operating in foreign countries. Couched in national chauvinist language, the proposal amounts to an attempt to divert growing hostility to social inequality and pro-business policy in a protectionist direction, while posing little danger to corporate wealth.

“For years, we’ve talked about ending tax breaks for companies that ship American jobs overseas, and giving tax breaks for companies that create jobs here in America,” Obama said on Monday. “That’s what we will finally do.”

Obama said that the plans he announced, together with unspecified future initiatives, would raise an additional $210 billion over 10 years “to decrease the budget deficit and give tax breaks to companies creating jobs in the United States.”

The plan includes $75 billion in subsidies for companies that “invest in innovation in the US.” Discounting this figure, the total impact of the taxes proposed by the administration amount to $132 billion over 10 years, or $13.2 billion in additional funds per year.

Despite these modest sums, however, the measure fueled a tremendous uproar among business groups, who denounced the proposal on the simple grounds that it would cut into the profitability of US firms. Even this minimal tax increase proposed by Obama may well face opposition and defeat in Congress. Only last week, 12 Senate Democrats crossed the aisle to block passage of a bill that would have allowed bankruptcy courts to renegotiate mortgages to help beleaguered borrowers.

A Treasury statement released in conjunction with Obama’s remarks noted that US multinational corporations paid only about $16 billion in US taxes in 2004 on $700 billion in foreign earnings. This means that the US effectively taxed these companies at a rate of 2.3 percent, although this figure does not include taxes paid by companies to the countries in which they operate. If these companies were taxed at the top US corporate tax rate of 35 percent, they would have paid an additional $229 billion per year in taxes.

The proposal includes two separate components. The first is an overtly protectionist measure, which the Treasury report titles “Replacing Tax Advantages for Creating Jobs Overseas With Incentives to Create Them at Home.” It would tighten certain loopholes in the international tax system, ensuring that “companies cannot receive deductions on their US tax returns supporting their offshore investments until they pay taxes on their offshore profits.”

There was some speculation that Obama would entirely repeal the law that allows companies to defer paying taxes on profits until they are returned to US-based accounts, but the proposal includes no such step.

The program would additionally tighten loopholes in the system by which taxes paid to foreign governments are credited to US-based companies. The Treasury estimates that these programs would raise $103.1 billion over the next 10 years.

The second measure addresses offshore tax havens. The Treasury report claims that 84 percent of US transnational corporations have subsidiary companies in tax havens such as the Cayman Islands. Companies transfer funds to these locations in order to avoid paying taxes. The Treasury says that the proposal to limit this practice would raise tax revenues by $95.2 billion over the next 10 years.

Additionally, the administration says that it will restrict the transfer of individual wealth to offshore tax havens, raising some $8 billion in new tax revenues over 10 years. This trifling figure, amounting to less than a fifth of the net worth of the wealthiest American, serves as a pretense to drive trade-war actions against foreign banks.

The administration said that that it would require foreign banks to turn over the financial filings of depositors it believes to be US citizens. “If these financial institutions do not cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly,” Obama said on Monday.

Obama presented his proposal with not a small amount of populist posturing, seeking to portray the measures as a component of his administration’s purported defense of everyday people. After a hypocritical denunciation of tax-evaders, Obama said, “We’re putting a middle-class tax cut in the pockets of 95 percent of working families, and we’re providing a $2,500 annual tax credit to put the dream of a college degree or advanced training within the reach of more students.”

In reality, the stimulus programs to which he is referring amount to a pittance when measured against the depth of the crisis and the suffering of the vast majority of Americans. Obama’s “middle-class” tax cut, amounting to some $300 billion, pales in comparison to the trillions of dollars that have been doled out to the Wall Street banks under both his and the Bush administrations. The US government has shelled out $4 trillion in total ‘stabilization efforts’ for the banking system, according to a Congressional Oversight Panel report. The net yearly amount potentially saved by the new tax policies represents only about one-fortieth of the projected budget deficit for 2009.

Obama began his remarks Monday by noting that “nobody likes paying taxes.” It would have been truer had he had added, “But the rich, unlike everybody else, don’t have to.” In proposing these new tax measures, the Obama administration is attempting to tap in to popular hostility to this basic reality. The White House’s proposals, in fact, demonstrate a fundamental political reality: the government is incapable of taking any meaningful measures in opposition to big business and the accumulation of riches by a handful of wealthy individuals.

What is required, in fact, is a democratic restructuring of the tax code, distributing resources in accordance with social need—not funneling them into the pockets of the capitalist elite. The financial records of all banks and corporations must be opened and examined; the violators of the tax code and other legal statutes must be criminally prosecuted and punished.