Sunday, October 10, 2010

US loses 95,000 jobs in September

US loses 95,000 jobs in September

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The US shed 95,000 more jobs in September, up from 57,000 jobs lost in August and the fourth straight month of net payroll reduction, the US Department of Labor reported on Friday.

The combined job losses for July and August were also revised upward by 15,000. Separately, the Bureau of Labor Statistics said it will revise upward the number of job losses by 366,000 for the year lasting from March 2009 through March 2010.

The official unemployment rate held steady at 9.6 percent only because a larger number of workers than expected stayed out of the labor market. September was the 14th month in a row with an unemployment rate over 9.5 percent, the longest such span since the Great Depression.

A broader measure of unemployment, including the involuntary part-time and those who have stopped searching for work, rose sharply to 17.1 percent, the second-highest reading on record. The labor participation rate—the share of the eligible population working or looking for work—remained virtually unchanged at 64.7 percent, near lows not seen since the mid-1980s.

Officially, there are now 14.8 million workers without jobs in the US. They face, on average, a period of unemployment lasting 33 weeks, a near-record duration.

The September jobs numbers were worse than expected. Economists surveyed by Marketwatch had anticipated a net decline of 8,000 non-farm payroll positions. Another survey by the Dow Jones News Wire predicted a decline of 10,000 jobs.

There were several indications in the September report that the unemployment crisis is set to worsen. The average workweek was stagnant, the factory workweek shrunk, and employers pushed hundreds of thousands of workers to part-time status—all indications that the trend is not moving toward hiring, but toward more layoffs.

The widespread assault on workers’ wages also registered in the September labor report. Average hourly earnings were stagnant for the month and have increased by only 1.7 percent for the year.

“When you combine [the job losses] with no change in hourly wage and no change in weekly earnings, this report signals a softening of employment income that will adversely affect the outlook for consumer spending,” commented John Lonski of Moody’s Capital Markets.

Private-sector jobs increased by a meager 64,000, also less than anticipated and about a fifth of the number of new positions needed to appreciably affect the unemployment rate.

Most job losses came among government workers. In all, 159,000 government jobs were lost, most of these coming at the state and local level. A large proportion of these job losses came among public school teachers and employees not retained at the start of the new school year. In all, about 58,000 jobs were lost in public education.

The report, coming in the midst of the final weeks of campaigning for the November 2 elections, is a major blow to the Obama administration and the Democratic Party. Democrats had hoped to base their campaigns on a supposed economic “recovery.” Instead, they will be forced to once again blame the administration of George W. Bush, which left office 21 months ago, for the depth and severity of the crisis.

Republicans, on the other hand, immediately seized on the report to blame the Obama administration’s stimulus package and other measures, what House Republican leader John Boehner referred to as “Washington Democrats’ out-of-control spending spree.”

In fact, the unemployment crisis has been exacerbated by the refusal of both Democrats and Republicans to put in place or even contemplate direct hiring measures for badly needed public works programs.

This failure was highlighted on Thursday by the cancellation, by New Jersey’s Republican Governor Chris Christie, of the nation’s largest single public works project—a new rail tunnel under the Hudson River linking New Jersey with New York City. This crucial transportation node connecting the nation’s largest city with its most densely populated state is currently served by just one century-old rail tunnel.

Christie’s decision, which saves New Jersey its $2.7 billion share of the nearly $9 billion project, reveals the hostility of Republicans and the social forces they represent to any project that benefits working people in the slightest. But it also expresses the bankruptcy of New Jersey—which faces among the worst budget crises of all 50 states—and the inadequacy of the federal government’s intervention.

Job losses in the public sector are likely to continue for many months. The combined budget shortfalls of all 50 states for 2011 and 2012 will reach $260 billion and will mean the loss of about 900,000 jobs, according to the Center on Budget and Policy Priorities. The figure does not include job losses in local government and the public schools.

Mass unemployment is the cutting edge of the worst crisis since the Great Depression, driving forward every measure of social misery from the housing crisis, which worsens each month, to the spread of hunger. According to the White House, the coming year will set a new record for use of food stamps, the Supplemental Nutrition Assistance Program. In all, about 43.3 million people, nearly one in seven Americans, will be receiving food stamps by the end of 2011.

The US jobs report had immediate international ramifications. It all but ensures that the Federal Reserve will launch a new round of quantitative easing—inflationary measures designed to increase US exports at the expense of its rivals.

The anticipation that the Fed will take such steps led to an immediate fall in the dollar on world currency markets on Friday. The greenback reached a 15-year low against the yen, increasing the likelihood that the Japanese central bank will once again move to weaken its currency. The dollar also fell to multi-year lows against the currencies of a number of countries, including Australia, South Africa, Switzerland, and Israel.

The euro’s rise against the dollar was slowed only after the head of the European finance ministers, Jean-Claude Juncker, “talked down the common currency’s strength,” according to the Wall Street Journal. Juncker “said in the wake of the jobs report that the euro was too strong and didn’t reflect the region’s economic fundamentals. That sent the euro to an intraday low of $1.3833, after it had ticked as high as $1.3985.”

The prospect of the Federal Reserve engaging in a new round of asset-purchasing cheered Wall Street investors, sending the Dow Jones Industrial Average—in spite of the negative jobs report—past 11,000 for the first time since May.

The Secret Big-Money Takeover of America

The Secret Big-Money Takeover of America

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Not only is income and wealth in America more concentrated in fewer hands than it’s been in 80 years, but those hands are buying our democracy as never before – and they’re doing it behind closed doors.

Hundreds of millions of secret dollars are pouring into congressional and state races in this election cycle. The Koch brothers (whose personal fortunes grew by $5 billion last year) appear to be behind some of it, Karl Rove has rounded up other multi-millionaires to fund right-wing candidates, the U.S. Chamber of Commerce is funneling corporate dollars from around the world into congressional races, and Rupert Murdoch is evidently spending heavily.

No one knows for sure where this flood of money is coming from because it’s all secret.

But you can safely assume its purpose is not to help America’s stranded middle class, working class, and poor. It’s to pad the nests of the rich, stop all reform, and deregulate big corporations and Wall Street – already more powerful than since the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators.

Credit the Supreme Court’s grotesque decision in Citizens United vs. the Federal Election Commission, which opened the floodgates. (Even though 8 of 9 members of the Court also held disclosure laws constitutional, the decision invited the creation of shadowy “nonprofits” that don’t have to reveal anything.)

According to FEC data, only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

Last week, when the Senate considered a bill to force such disclosure, every single Republican voted against it – thereby revealing the GOP’s true colors, and presumed benefactors. (To understand how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Maybe the Disclose Bill can get passed in lame-duck session. Maybe the IRS will make sure Karl Rove’s and other supposed nonprofits aren’t sham political units. Maybe pigs will learn to fly.

In the meantime we face an election that marks an even sharper turn toward plutocratic capitalism than before – a government by and for the rich and big corporations — and away from democratic capitalism.

As income and wealth has moved to the top, so has political power. That’s why, for example, it’s been impossible to close the absurd tax loophole that allows hedge-fund and private-equity managers to treat much of their income as capital gains, subject to a 15 percent tax (even though they’re earning tens or hundreds of millions a year, and the top 15 hedge-fund managers earned an average of $1 billion last year). Why it proved impossible to fund expanded health care by limiting the tax deductions of the very rich. Why it’s so difficult even to extend George Bush’s tax cuts for the bottom 98 percent of Americans without also extending them for the top 2 percent – even though the top won’t spend the money and create jobs, but will blow a $36 billion hole in the federal budget next year.

The good news is average Americans are beginning to understand that when the rich secretly flood our democracy with money, the rest of us drown. Wall Street executives and top CEOs get bailed out while under-water homeowners and jobless workers sink.

A Quinnipiac poll earlier this year found overwhelming support for a millionaire tax.

But what the public wants means nothing if our democracy is secretly corrupted by big money.

Right now we’re headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government. The three are obviously related.

We must act. We need a movement to take back our democracy. (If tea partiers were true to their principles, they’d join it.) As Martin Luther King once said, the greatest tragedy is “not the strident clamor of the bad people, but the appalling silence of the good people.”

What can you do?

1. Read Justice Steven’s dissent in the Citizens United case, so you’re fully informed about the majority’s pernicious illogic.

2. Use every opportunity to speak out against this decision, and embarrass and condemn the right-wing Justices who supported it.

3. In this and subsequent elections, back candidates for congress and president who vow to put Justices on the Court who will reverse it.

4. Demand that the IRS enforce the law and pull the plug on Karl Rove and other sham nonprofits.

5. If you have a Republican senator, insist that he or she support the Disclose Act. If they won’t, campaign against them.

6. Support public financing of elections.

7. Join an organization like Common Cause, that’s committed to doing all this and getting big money out of politics. (Personal note: I’m so outraged at what’s happening that I just became chairman of Common Cause.)

8. Send this post to your friends (including any tea partiers you may know).

China’s Growing Independence and the New World Order

China’s Growing Independence and the New World Order

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Of all the "threats" to world order, the most consistent is democracy, unless it is under imperial control, and more generally, the assertion of independence. These fears have guided imperial power throughout history.

In South America, Washington's traditional backyard, the subjects are increasingly disobedient. Their steps toward independence advanced further in February with the formation of the Community of Latin American and Caribbean States, which includes all states in the hemisphere apart from the U.S. and Canada.

For the first time since the Spanish and Portuguese conquests 500 years ago, South America is moving toward integration, a prerequisite to independence. It is also beginning to address the internal scandal of a continent that is endowed with rich resources but dominated by tiny islands of wealthy elites in a sea of misery.

Furthermore, South-South relations are developing, with China playing a leading role, both as a consumer of raw materials and as an investor. Its influence is growing rapidly and has surpassed the United States' in some resource-rich countries.

More significant still are changes in Middle Eastern arena. Sixty years ago, the influential planner A. A. Berle advised that controlling the region's incomparable energy resources would yield "substantial control of the world."

Correspondingly, loss of control would threaten the project of global dominance. By the 1970s, the major producers nationalized their hydrocarbon reserves, but the West retained substantial influence. In 1979, Iran was "lost" with the overthrow of the shah's dictatorship, which had been imposed by a U.S.-U.K. military coup in 1953 to ensure that this prize would remain in the proper hands.

By now, however, control is slipping away even among the traditional U.S. clients.

The largest hydrocarbon reserves are in Saudi Arabia, a U.S. dependency ever since the U.S. displaced Britain there in a mini-war conducted during World War II. The U.S. remains by far the largest investor in Saudi Arabia and its major trading partner, and Saudi Arabia helps support the U.S. economy via investments.

However, more than half of Saudi oil exports now go to Asia, and its plans for growth face east. The same may be turn out to be true of Iraq, the country with the second-largest reserves, if it can rebuild from the massive destruction of the murderous U.S.-U.K. sanctions and the invasion. And U.S. policies are driving Iran, the third major producer, in the same direction.

China is now the largest importer of Middle Eastern oil and the largest exporter to the region, replacing the United States. Trade relations are growing fast, doubling in the past five years.

The implications for world order are significant, as is the quiet rise of the Shanghai Cooperation Organization, which includes much of Asia but has banned the U.S.--potentially "a new energy cartel involving both producers and consumers," observes economist Stephen King, author of Losing Control: The Emerging Threats to Western Prosperity.

In Western policy-making circles and among political commentators, 2010 is called "the year of Iran." The Iranian threat is considered to pose the greatest danger to world order and to be the primary focus of U.S. foreign policy, with Europe trailing along politely as usual. It is officially recognized that the threat is not military: Rather, it is the threat of independence.

To maintain "stability" the U.S. has imposed harsh sanctions on Iran, but outside of Europe, few are paying attention. The nonaligned countries--most of the world--have strongly opposed U.S. policy toward Iran for years.

Nearby Turkey and Pakistan are constructing new pipelines to Iran, and trade is increasing. Arab public opinion is so enraged by Western policies that a majority even favor Iran's development of nuclear weapons.

The conflict benefits China. "China's investors and traders are now filling a vacuum in Iran as businesses from many other nations, especially in Europe, pull out," Clayton Jones reports in The Christian Science Monitor. In particular, China is expanding its dominant role in Iran's energy industries.

Washington is reacting with a touch of desperation. In August, the State Department warned that "If China wants to do business around the world it will also have to protect its own reputation, and if you acquire a reputation as a country that is willing to skirt and evade international responsibilities that will have a long-term impact ... their international responsibilities are clear"--namely, to follow U.S. orders.

Chinese leaders are unlikely to be impressed by such talk, the language of an imperial power desperately trying to cling to authority it no longer has. A far greater threat to imperial dominance than Iran is China's refusing to obey orders--and indeed, as a major and growing power, dismissing them with contempt.

Reports expose White House cover-up of BP spill

Reports expose White House cover-up of BP spill

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The Obama administration intentionally suppressed information regarding the size of the BP oil spill for months, handicapping response efforts and confusing public perception of the catastrophe, according to new reports issued by investigators working for the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

The revelations demonstrate that the White House response to the worst environmental disaster in recent history was to participate in a criminal conspiracy designed to shield BP and the oil industry.

White House stonewalling began in the first days after the April 20 explosion on the Deepwater Horizon oil rig, which killed 11 workers, when it initially denied that there was an oil spill, and it continued through August, when administration officials manipulated evidence to falsely claim that 75 percent of the oil dumped into the Gulf of Mexico was “gone.” In between, the White House effectively ran interference for BP, at every turn seeking to minimize the size of the disaster, going so far as barring a federal agency from updating an incorrect early estimate of the spill volume.

The four “working reports” submitted to the commission for review are written as a warning that public confidence in the oil industry and the federal government has been seriously damaged by the failed effort to cover up the scope of the spill.

“By initially underestimating the amount of oil flow and then, at the end of the summer, appearing to underestimate the amount of oil remaining in the gulf, the federal government created the impression that it was either not fully competent to handle the spill or not fully candid with the American people about the scope of the problem,” one of the reports concludes.

This warning is ancillary to the larger purpose of the commission, which is to give offshore and deep-sea oil drilling a clean bill of health. Obama himself created the body in early June, selecting as chairs William K. Reilly, the former Environmental Protection Agency (EPA) chief under George H.W. Bush and current ConocoPhillips board member, and Bob Graham, a retired Democratic senator from Florida and longtime advocate of deregulation.

Among other damning facts, the reports found that two weeks into the disaster the Obama administration blocked efforts by the National Oceanic and Atmospheric Administration (NOAA) to release oil spill estimates much higher than the 5,000 barrels-per-day figure repeatedly attributed to the agency.

NOAA did not release the report until July. It was later established that about 60,000 barrels per day were gushing out one mile beneath the ocean’s surface. In all, about 5 million barrels of oil—over 200 million gallons—were released into the Gulf before the well was finally plugged on July 15. The figure is about 20 times the size of the Exxon Valdez tanker spill of 1989.

The report also reveals that there was never any evidence backing up the 5,000 barrels-per-day estimate. It was lifted, without scrutiny, from an informal e-mail of a NOAA scientist in the first days after the explosion. The scientist was criticizing BP’s claim that no more than 1,000 barrels per day were being released.

Investigators found that independent scientists, though they were denied access to most information, produced far more accurate estimates than the Obama administration. In early May, the organization SkyTruth began to publicly criticize the government estimates based on satellite imagery of the spill. Later, in mid-June, three scientists, separately analyzing a short video clip BP had finally released to the public, issued estimates that assessed fairly accurately the spill’s daily volume. These estimates were initially dismissed by both BP and the White House. Oceanographers and biologists such as Samantha Joye at the University of Georgia have persistently criticized White House manipulation of data to obscure the quantity of oil that remains in the Gulf.

Were it not for the efforts of these scientists there is no reason to believe that the Obama administration ever would have abandoned its bogus estimate of 5,000 barrels per day.

Yet the cover-up continues. The $20 billion or so earmarked by BP to restore damage to the economy, environment and human health—most of which it will write off in taxes—is a pittance designed to conceal the true scope of the damage. And the task of Independent Claims Facility head Kenneth Feinberg has been from the first to protect the financial interests of BP and, whenever possible, bar damage rewards to the people of the Gulf as “illegitimate.”

What is the purpose of this relentless cover-up? It is enough to note that deep-sea and offshore oil drilling continue as before; that in spite of overwhelming evidence of its criminal negligence before and after the explosion on the Deepwater Horizon, BP carries on as one of the world’s richest corporations; and that not a single executive or regulator has been arrested or even fired for a disaster that killed 11 men, ruined many more lives and poisoned the Gulf of Mexico.

None of this is accidental. As the recently adopted program of the Socialist Equality Party, The Breakdown of Capitalism and the Fight for Socialism in the United States explains:

“The basic source of not only the catastrophe in the Gulf of Mexico, but of the innumerable forms taken by the expanding economic crisis, lies in the ruthless subordination of the economic and social interests of the masses of working people to the pursuit of profit and personal wealth by capitalist corporations that own and control the means of production.”

This subordination of the needs of the people to BP was the operative principle of the entire response, and it continues today.

The restoration of the Gulf requires a program employing tens of thousands overseen by independent scientists and public health experts. The resources for such an effort can be made available through the expropriation of BP and the for-profit oil industry that created the disaster.

This, and the prevention of similar disasters in the future, can be realized only by breaking the stranglehold of the corporate and financial aristocracy over the economy and government.

Shadow Elite: The Small Government Lie - How Both Parties Stood By as Our Government Burned

Shadow Elite: The Small Government Lie - How Both Parties Stood By as Our Government Burned

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The fire is long out at Gene Cranick's house. But the rhetorical battle continues over the symbolic significance of the South Fulton Fire Department's decision to let Cranick's home burn because he hadn't paid a fee that those living outside the town must pay. Some commentators say Cranick was a classic "free-rider" who should have followed the Obion County "pay for spray" policy, a set-up that's not uncommon in rural areas. Others look to the burning house and see a civic sphere gutted by "small government" ideology, beholden only to the privileged few. The Huff Post warns that this is what a Third World America would look like: a libertarian's dream, in which bare-bones, a la carte government threatens to become a stark reality, not just in rural towns, but across the country.

We would argue that government, on the federal level, has already been upended by small government ideology, beholden to private interests as never before in our memory. But you can't just blame the Tea Party, which wasn't around when this revolution in governance took hold, or even just mainstream Republicans who were. Both parties share the blame for handing over government work - and by extention, public power - to private companies. The irony is that, for all their talk of fiscal austerity, politicians have created the very opposite of an Obion County-style, lean-and-mean operation: what we have now is a sprawling shadow government - one that is often less efficient, less visible, less accountable, and even potentially dangerous in nature.

The liberal website Think Progress shows vividly how the small government rhetoric collapses on close questioning: here you can see journalists press GOP leaders touting budget cuts on just what they would slash. No one should be surprised that they don't have an answer: for decades, politicians have avoided real cuts, upholding the facade of contained government, by shifting work to contractors.

It was President Reagan who famously said: "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'" Reagan thought that government should do less, and what it did do would be done better by private business. And so the "Reagan revolution" sanctified what was already an entrenched practice: contracting out government services to reduce the headcount of the federal workforce, giving the appearance of austerity but not the reality.

Those hoping a Democratic president might reverse course were very much disappointed by the Clinton administration, whose stated aim to "Reinvent Government" made clear that small government dogma had been firmly embraced by both parties. The injection of business principles into government was reflected in the language: recipients of state services become "customers" and citizens "shareholders". Contracting accelerated and assumed new incarnations during the Clinton years, and outsourcing exploded during the Bush era. The cost of services alone provided by contractors soared from some $125 billion in 2001 to an estimated $314 billion-plus in 2009. The advent of ever more complex technologies, which the government largely outsources, tipped the balance even further.

Today private companies are increasingly performing not just government work but inherently government functions. Those are the things deemed so sensitive and vital to the public interest that they should be carried out only by federal employees. Oversight of all this (one of those inherent functions) is severely lacking, leading to potential breaches of public and national security. And ironically, outsourcing often costs more, not less - hardly the "reinvention" and "efficiency" that voters were sold on.

Most troubling, the federal government is now perfectly primed for 21st century-style political corruption, and not in the old fashioned sense of blatantly buying influence. This is more insidious, in which a new kind of power broker, what Janine calls the shadow elite, can exploit the ambiguity that is now rife throughout the system, able not just to evade but actually write the rules governing their own conduct. This new breed works bureaucracy to their advantage, preferring to operate by means anathema to official, legal, and procedural objectivity. Meanwhile, taxpayers are only dimly aware that they are paying into a public system that is both bloated and often dictated by personal agendas.

Taxpayer Gene Cranick, for his part, knows all too well what it means to be a "customer", in the parlance of government "reinventors", for what most of us take for granted as a basic public service. He also knows something about the cost of government ambiguity and lack of standard process. Cranick said he had forgotten to pay his fee 3 years ago, but firefighters still put out a chimney fire and let him pay the fee afterwards. This time, firefighters were told to do nothing. We're guessing Cranick would have been thrilled to hear those words that so spooked Ronald Reagan: "I'm from the government and I'm here to help."

Corporate Hijacking of Our Elections Is Well Under Way, with Foreign Companies Chipping in to Destroy Our Democracy

Corporate Hijacking of Our Elections Is Well Under Way, with Foreign Companies Chipping in to Destroy Our Democracy

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This week, an investigation by the ThinkProgress revealed that the U.S. Chamber of Commerce -- once just a conservative-leaning business group that’s been transformed into a heavy political cudgel for the corporate Right under the leadership of president Thomas Donohue -- has been raising money from overseas companies to defeat American candidates.

That’s a violation of the law, but according to the report, “while the Chamber will likely assert it has internal controls,” money “is fungible, permitting the Chamber to run its unprecedented attack campaign. According to legal experts … the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections.”

In recent years, the Chamber has become very aggressive with its fundraising, opening offices abroad and helping to found foreign chapters (known as Business Councils or “AmChams”). While many of these foreign operations include American businesses with interests overseas, the Chamber has also spearheaded an effort to raise money from foreign corporations, including ones controlled by foreign governments. These foreign members of the Chamber send money either directly to the U.S. Chamber of Commerce, or the foreign members fund their local Chamber, which in turn, transfers dues payments back to the Chamber’s H Street office in Washington DC.

The Chamber has pledged to spend a whopping $75 million this year to defeat candidates who supported health care reform, new financial regulations and a laundry list of other measures of which the Chamber’s leadership doesn’t approve. On Tuesday, the grassroots advocacy group asked the Department of Justice to open a criminal investigation into the practice.

The Chamber’s spending is just the tip of the iceberg. Elections have consequences. And this November, we’ll witness one devastating consequence of the re-election of George W. Bush in 2004. It was Bush who appointed John Roberts and Samuel Alito to the Supreme Court, resulting in a bench that, as Dahlia Lithwick wrote this week, has “taken the law for a sharp turn to the ideological right, while at the same time masterfully concealing it.”

Arguably, the Roberts court’s most brazen right-wing judicial activism came in its ruling in Citizens United v. Federal Election Commission which, based on a long stretch of the First Amendment, killed limits on “electioneering” ads run by special interests in the period leading up to an election. The ruling opened the floodgates, and an unprecedented tidal wave of money is flowing into the November midterms.

At a conference on the ruling in July, Rep. Alan Grayson, D-Florida, described the proceedings in the case. “They wanted to hear the possibility that that’s the way the constitution would read to them,” he said. “So they picked an issue out of the air that nobody had conceived of [as a First Amendment case] because 100 years of settled law meant that corporations cannot buy elections in America, and they not only allowed corporations to buy those elections, but they made it a constitutional right.” He called the decision “a tragedy for us all,” as “corporations now have rights that human beings can never have.” Grayson, unsurprisingly, is among the Chamber’s top targets.

The ruling opened up the spigots for corporations and labor unions alike. Deep-pocketed interests on both sides of the aisle are going all-in this November, which will likely see the previous record for spending in a non-presidential election year obliterated. McClatchy Newspapers reported this week that “while big money in politics is hardly new, there never have been sums of this magnitude in midterm elections.”

Those dollars are not flowing equally to the two major parties, however. According to a study by the Center for Public Integrity, between August 1 and September 20, GOP-aligned business groups had outspent their Democratically aligned counterparts by a 5 to 1 ratio. The Chamber itself has aired 8,000 ads for Republican Senate candidates alone through September 15.

The new environment has spawned the “super-PAC,” huge honey-pots of corporate cash set aside to defeat progressive and centrist candidates. In addition to the $75 million pledged by the Chamber, McClatchy reports that Karl Rove’s new group, American Crossroads, is expected to spend $52 million, oil billionaire David Koch’s Americans for Prosperity has pledged $45 million and the Commission on Hope, Growth and Opportunity, organized by veteran conservative activist Scott Reed, hopes to pony up another $25 million dollars.

If those names all sound vaguely benign, they should. Making the situation all the more dangerous is the fact that these PACs aren’t required to disclose their donors. "Now, if you're a company that wants to write a $10 million check to help or hurt a candidate, you can go to town," Dave Levinthal, a spokesman for the Center for Responsive Politics, told McClatchy. And you can do so without risking any backlash from your more progressive customers.

But despite the fact that, as Politico reported, “the Chamber is fighting to continue to keep contributions secret,” it was revealed in August that Fox News’ parent company, the News Corporation, had donated $1 million to the Chamber, a sum that followed an earlier million directed to the Republican Governor’s association.

In July, Congressional Democrats tried to mitigate the damage done by the Citizens United ruling. In the House, they passed the DISCLOSE ACT, which would have “required organizations involved in political campaigning to disclose the identity of the large donors, and to reveal their identities in any political ads they fund. It would also bar foreign corporations, government contractors and TARP recipients from making political expenditures.” But a unified Republican caucus in the Senate killed the legislation.

What makes this all the more troubling is that this process could totally overwhelm our elections process. Robert Weisman, president of the watchdog group Public Citizen, said he expects special interest money to start out relatively slowly and grow cycle after cycle. "$5.2 billion [was] spent in the 2007-2008 election cycle by all federal candidates, including candidate Obama,” he said. “Exxon in that same period made $85 billion in profit; Pfizer made $27 billion selling just Lipitor alone. Last year, Goldman Sachs spent $16.5 billion on executive compensation. So if they choose to, corporations can completely overwhelm the political process, and they’re going to choose to do it more and more.”

Is Gulf Seafood Really Safe to Eat? Government Withholding Key Data on Seafood Testing, Scientists Say

Is Gulf Seafood Really Safe to Eat? Government Withholding Key Data on Seafood Testing, Scientists Say

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National Oceanic and Atmospheric Administration (NOAA) and FDA officials maintain they've provided results of ongoing Gulf seafood safety tests with the utmost transparency. But outside scientists, eager to perform independent evaluations of the government's findings, complain the information released contains far too many unknown variables that preclude peer review.

In recent interviews, FDA and NOAA officials told Raw Story that they've been completely transparent in sharing ongoing Gulf seafood testing data, protocol and methodologies.

Whenever we reopened [waters], we'd post the data that we used and the FDA certified it as good enough to reopen," said NOAA spokeswoman Christine Patrick. "So that's all publicly available and it has been since we started reopening."

"There's nothing we are withholding," echoed FDA spokeswoman Meghan Scott.

Yet in wide-ranging interviews with Raw Story, multiple independent scientists involved in studying the effects of the Gulf oil spill not only revealed that government claims of sufficient transparency are wholly misleading, but they also provided several key examples of how withholding this information precludes independent evaluation and opens a raft of critical unanswered questions.

Raw Story's investigation also found that federal officials continue to publicly claim (as they as did as well in our interviews) that Gulf states follow the agreed-upon protocol set by NOAA and FDA for the reopening of previously closed waters.

But scientists in close discussions with these agencies informed Raw Story that the Gulf states are actually making their decisions for reopening waters on a case-by-case basis with no consistent set criteria -- making the basis for state reopenings of previously closed waters an even greater unknown for independent scientists.

Released data insufficient for independent evaluation

"We're a little worried that these samples so far may not be as thorough as they might need to be and there could be areas that are missed," said Gina Solomon, a doctor and public health expert in the department of medicine at the University of California at San Francisco.

"That's the fundamental concern," added Solomon, a co-author of the recent peer-reviewed Journal of the American Medical Association (JAMA) study on Gulf seafood safety.

Timothy Fitzgerald, a marine scientist with the Environmental Defense Fund who testified last week to the National Oil Spill Commission, said, "Given the work that we do and the level of resolution we usually rely on, if they're going to provide technical detail I would very much like them to actually provide it in as raw a form as possible."

"What they've done in a lot of instances is [provide] kind of first or second order binning or summarizing or distilling, which makes a lot of the data unusable or unavailable," Fitzgerald continued.

"It's not that it doesn't exist," he said. "It's just that it hasn't been provided in a way that scientists could really make a lot of use out of it."

Miriam Rotkin-Ellman, a staff scientist at the Natural Resources Defense Council (NRDC) and a contributor to the JAMA study, said there is no clear description of the scientific method being applied to determine how they select the locations to sample, how many samples they take, or how they are sampling to ensure that the areas they are reopening are free of oil.

"All of this remains information that we have asked various different agencies for, and this includes NOAA and the FDA, and they have not provided it," Ellman said. "It's not part of the materials that are on their website and it remains this very big blank to the transparency of how these safety considerations are being made."

Solomon and Ellman said NOAA officials have described a more specific sampling plan for federal waters by phone but have not provided them with a copy despite repeated requests.

"So the question is, why?" Solomon said. "It seems strange that it hasn't been made available for peer review."

Solomon, Ellman and other scientists interviewed by Raw Story noted that while there is much information lacking from the sampling plans and data released for the reopening of federal waters, even less is known about the determinations behind the reopening of state waters.

For every reopening of federal waters for commercial and recreational fishing, NOAA and FDA follow an agreed-upon protocol for the testing of seafood and water samples.

The Gulf states, which must submit a proposal to the FDA for any waters reopened, follow no consistent protocol for the reopening of state waters, Raw Story has found.

Federal officials publicly claim that Gulf states also follow "the same" agreed-upon protocol set by NOAA and FDA. Before reopening any previously closed state waters, Gulf state officials must submit a sampling plan for certification to the FDA.

But according to Solomon and Ellman, who have had several discussions with federal agencies regarding state reopenings, each individual Gulf state makes its decision for reopening waters on a case-by-case basis, with no uniform criteria or protocol.

They asserted to Raw Story that when they requested a specific sampling plan for the reopening of state waters, a senior FDA official, Donald Kraemer, was "really quite clear" that none existed.

Solomon said Kraemer told them "that there are no criteria, that there is no sampling plan, that there is no clear protocol, that there is no minimum number of samples required, that there's no specific buffer zone between oil contaminated areas and reopened areas that the agency's requiring."

Solomon lamented, "All of that was surprising and somewhat disturbing."

When Raw Story emailed Kraemer directly and requested that he respond to these statements attributed to him, he wrote back, "Sorry…you need to come in through the press office."

Yet after forwarding our request to his direct press office liaison, Michael Herndon, Raw Story did not receive a response.

Gaping holes in data may impact integrity of testing

FDA and NOAA officials repeatedly assured Raw Story that they've taken a "conservative" approach to testing Gulf seafood.

At the close of an elaborate presentation to Raw Story on seafood safety procedures, NOAA toxicologist John Stein averred, "We're confident that we have a well-designed seafood safety program and comprehensive testing."

But independent scientists not only said there's no way to confirm this, but also provided specific examples of what's missing from the data and how it can impact the integrity of the test results.

Ellman, staff scientist at the NDRC, noted that there's no information to conclude that there is adequate testing of the water below the surface for the presence of oil before areas are reopened.

"We know that dispersants made the oil move from the surface, so it's less likely to be a surface slick and much more likely to be below the surface, a sub-surface plume," she pointed out.

Carys Mitchelmore, an aquatic toxicologist and associate professor at the University of Maryland, agreed.

"Most of this oil is below the surface. So I would be more concerned with the stuff you don't see," Mitchelmore said.

Indeed, Raw Story confirmed that the language in the protocol is vague regarding the testing of waters for the presence of oil before reopening waters to commercial and recreational fishing. Under "Specific Re-opening Criteria" in the protocol, it states:

"Evaluation of oil movement -- Confirmation that the closure area is free of sheen on the surface by visual observation and/or aerial reconnaissance, or the presence of oil in the water column through visual observation or water testing."

Chris Pincetich, a toxicologist and marine biologist at the Sea Turtle Restoration Project, criticized the "very ambiguous" nature of this passage.

"That doesn't define anything. It doesn't give you any detection limits," Pincetich said with a note of exasperation.

He continued, "In one case, they may say, ‘My satellite shows a cloud. Oh, what about aerial? Well, no one saw anything. What about water sample? We didn't get a water sample either.' Well, they may be able to say, ‘Well, our aerial survey didn't see any oil. Let's reopen it.' That's really ambiguous."

Specificity on buffer zones -- areas between closed oiled waters and waters open for commercial and recreational fishing -- is also conspicuously absent from the protocol and is a point of contention for outside scientists.

The only mention of buffer zones in the protocol states:

"Fishery closure areas also include areas that NOAA projects will have surface oil and a precautionary buffer zone around known contaminated waters to account for uncertainty."

When Raw Story pointed out to the FDA that there's insufficient information for other scientists to ascertain how buffer zones are being determined, the response was less than forthcoming.

"Are they proposing something different that they think would be a better [method]?" agency spokeswoman Scott replied.

After Raw Story reiterated that outside scientists are merely trying to pinpoint how such determinations are being made, Scott said, "By hundreds and hundreds of scientists."

Raw Story then noted that while it may be based on findings by "hundreds and hundreds of scientists," independent scientists are saying that these kinds of determinations are not clear enough in the materials being released online.

"Uh, sure," Scott said. "If that's what they're saying, I agree that's what they're saying."

Additionally, scientists pointed out that knowing what the contaminant levels of the fish and shellfish in the closed areas are would help them assess how safe it is to fish outside the buffer zones.

But to date, no information has been released on contaminant levels of marine life within closed areas.

"I would like to see the data from a polluted site, from a closed site," Mitchelmore said. "Just for me as a scientist, I would like to see the flip side. I'd like to see what these organisms look like when they've taken them from a closed area."

Raw Story found a related passage in the protocol that alarmed scientists.

"After confirming through subsequent evaluation that oil did not enter an area," it states, "the area may be re-opened without subjecting seafood samples to evaluation under this protocol. This protocol is an added layer of protection being applied to seafood only in areas known to have been contaminated."

That seafood may be deemed uncontaminated based solely on water sampling, scientists said, does not adequately take into account the movement of both oil and marine life.

"There's a defined spatial and temporal context here -- oil moves," explained Mitchelmore. "With these undersea [oil] plumes, you're not going to see sheens on the surface. Sediment resuspends. Organisms move from one area to another."

"So how representative is each sample in a huge big area on a temporal and a spatial scale?" she continued. "What if there's something in the sediment or a plume you're not seeing? Waters are not well mixed."

Bottom-feeders such as shrimp, which also migrate daily from the seabed to the surface, are at an even greater risk for undetected contamination in waters where seafood is not being tested, scientists said.

"The ecology of shrimp is that they stay on the bottom all day long and at night they come up and that's when they fish for them," said Pincetich. "So any oil in the sediment, any oil in the bottom of the ocean, is interacting with the shrimp on a daily basis."

"So now we're talking about long-term chronic exposure of these shrimp to the oil," he added. "And that's a concern, that's really a concern for public safety."

Many scientists also expressed frustration over the lack of clarity in the released sensory and chemical analyses of the seafood, which they say may be inflating both the quality and quantity of the testing.

Scientists explained that while the data might show that ten different fish have been tested, those ten fish are often ground up into one sample. Then one test would be run on that sample.

So ten fish may have been tested but only in one sample, which, in some cases, scientists said, could inflate the number of seafood tested.

"The takeaway number from that is one and not ten," said Fitzgerald of the Environmental Defense Fund. "But that's why you may see numbers like 40,000 fish have been tested. Well, not really -- 40,000 fish may have been collected."

Mitchelmore pointed out that government scientists utilize such sample sizes in analyses to reduce variability, because even within the same species tested there's a great deal of individual variability -- from size, age and sex to "whether one of them just fed on a big plump oil-laden oyster."

She said this methodology would be sound but only if they're repeating such analyses of the same species multiple times in a given area before and after waters are reopened, thus increasing their sample sizes to make up for dilution.

"If you think of the scenario where you've got nine little things that haven't accumulated [contaminants] but one big one that has accumulated a lot, then that one gets diluted out by those other nine," Mitchelmore explained. "So your levels appear lower."

"Increased sample sizes is key," she added.

But based on the data released, it's not clear this is occurring.

Fitzgerald also noted that the numbers are "not nearly as convincing" when you start to get into a finer level of details.

When he analyzed how many sensory tests (or "sniff tests") versus chemical tests have been performed, he found that the number of samples actually sent to a lab to be chemically analyzed is far lower.

"If you count up every single animal that was collected to be tested either by the sniff or the chemical, it's probably in the tens of thousands," Fitzgerald said. "But then if you actually look at how many tests they've done, whether it's sniff or chemical, it's much lower than that."

Catastrophic spill and sluggish response demand greater transparency

Every researcher interviewed by Raw Story -- from marine biologists and toxicologists to public health experts and oceanographers -- agreed that the massive size of the spill, the unprecedented use of dispersants and early ineptitude in responding to the disaster puts the onus on federal and state officials to maximize the transparency of their seafood safety testing.

"Part of food security is the sort of peace of mind that people have about eating it," said Ian MacDonald, an oceanography professor at Florida State University and an expert in measuring oil spills. "People are deeply anxious about the security of all aspects of the Gulf following this spill -- whether it's seafood safety or the dispersants or food chain effects and all that. That's the legacy of this."

Testifying before the National Oil Spill Commission last week, MacDonald said that, contrary to Obama administration claims that the majority of oil is "gone," he estimates that over fifty percent of the oil remains in the Gulf in "a highly durable material that resists further dissipation," with much of it "now buried in marine and coastal sediments."

"Everybody's credibility has been damaged by all this," MacDonald continued in his interview with Raw Story. "Many changes of course that NOAA took. The great concern about EPA and the licensing of dispersant use. The fact of the way it was handled has undermined public confidence."

"So I think it overwhelms the sort of standard approach towards reassuring the public in terms of food safety," he added.

Pincetich, the marine biologist and toxicologist from the Sea Turtle Restoration Project, cautioned, "They really need to throw out their old rulebook. This is a massive, toxic situation with millions of peoples' health at risk."

"And if they're not using the best technology in the most transparent, comprehensive ways," he continued, "then they're really falling short of being public servants and protecting our health and well being with their decisions."

"They have a long, long way to go to restore public trust," MacDonald said

Sleazy Real Estate Developers' Latest Scam Could Skim 5 Percent Off Your Home's Value

Sleazy Real Estate Developers' Latest Scam Could Skim 5 Percent Off Your Home's Value

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Consider the following scenario: you are in the process of selling your home. You've found a buyer who is willing to pay you $200,000. Your realtor has assured you that everything is going smoothly-- she says the buyer has lined up financing and there were no problems with the home inspection and the appraisal.

Then, days before the closing, your realtor gives you a call. "Uh, something has turned up during the title search that is going to be a problem," she says. "I don't know if you were aware of this, but your property has a private transfer fee covenant on it."

"What does that mean?" you say.

"It means you will have to pay an extra $2,000 fee at the closing," she informs you. "And the buyer is demanding that you reduce the sale price by $10,000 or the deal is off because of this."

Pay $2,000? To whom? The buyer wants a 10 grand discount?? And what the heck is a private transfer fee covenant?

A private transfer fee covenant is a legal agreement attached to a piece of real estate through a filing in the public records that entitles some third party to up to 1 percent of the sale price of the property each and every time it is sold. The covenant typically lasts up to 99 years.

Who creates these covenants? The covenants are typically set up by developers. Typically, 60 percent of the transfer fee goes into the pocket of whoever set it up; 10 percent goes to a broker; and 30 percent goes to a company called Freehold Capital Partners.

Why does Freehold Capital Partners get a cut? They claim they invented this legal strategy and are attempting to patent it. They also are trying to convince Wall Street to securitize the fees, so they and the developer can get a lump sum up front on the future income stream based on an actuarial guess on how many times and for how much a property will sell in 99 years. Think of the J.G. Wentworth commercial "It's my money, and I want it now!"

From your perspective as a seller, here's what this transfer fee means to you:

  1. You pay $2000, which goes to the developer and Freehold.
  2. They give you nothing in return.

But it gets even worse. Remember, in my scenario your buyer demanded a whopping $10,000 off the sale price after they discovered the transfer fee covenant? This is a likely scenario, because not only will your buyers have to pay the transfer fee when they sell, but the people who buy from them will have to pay a transfer fee after that, as will the buyer after that, as will every future owner of the property for 99 years.

A home that sells once about every seven years will have a 1 percent fee paid approximately 14 times. All those future fees represent equity that will be leeched out of the property. Cumulatively, the value of that equity which will be skimmed by Freehold and its pals is far more than 1 percent. Since future interest rates and the future value of the property are not known, the exact current value of all those transfers are not knowable, but 5 percent of the value of the home is probably a reasonable estimate, so your buyer -- who had no way of knowing about the transfer fee before the title search disclosed it -- quite reasonably asked for a 5 percent discount off the sale price.

Does this all sound kind of like a sleazy way for these Freehold Capital Partners folks to line their pockets with unearned income at the expense of homeowners? That's exactly what it is. As a homeowner, you get nothing for paying this transfer fee except a hole in your wallet when you sell.

Does it sound like these private transfer fees are also an unnecessary contrivance that have the potential to gum up and scuttle real estate transactions? You betcha.

Just in case you aren't convinced yet that you do not want to potentially lose $12k of your equity during a $200,000 sale transaction, there are a multitude of other problems with private transfer fee covenants: they create an additional source of liability for those involved in insuring title; the fees may not be enforceable; it will inevitably be hard to track down who exactly is entitled to the fee in many cases once the original developer is dead and in the ground for decades, and so forth. Even if the fee recipient can be tracked down, the work involved just represents an extra frictional cost in the real estate transaction.

Now, the good news: in the past few years, over a dozen states have banned private transfer fees. Here in Ohio, for instance, after open committee hearings on the subject attended by both proponents and critics, the legislature voted to ban private transfer fees on nearly unanimous votes, and our fine Democratic governor Ted Strickland signed the ban into law. See, the thing about private transfer fees is that when they are explained to people, most folks think they are a pretty garbage idea, no matter their political stripe.

Now, more good news: Our Democrats in Congress, including main sponsor Maxine Waters have just introduced a bill, H.R. 6220, that will effectively cripple the private transfer fee scam by prohibiting any federally insured or guaranteed mortgage on a property with a private transfer fee. I highly encourage you to contact your congressperson and tell them that you support this bill. While you are at it, tell your senators you want to ban private transfer fee covenants.

But there is some bad news, too. Even though Republicans in state legislatures like Ohio can see that private transfer fee covenants are nothing but bad news, Washington Republicans have generated legislation that will not only protect private transfer fees but has the potential to preempt state laws in places like Ohio where bans have been passed! Phil Gingrey, R-Georgia, has drafted an alternative bill that requires only non-effectual "disclosure" of these fees via a recording in the public records. What this means is that people who buy properties in new developments could easily not even know they have one of these toxic covenants attached to their property until they want to sell. The Gingery "disclosure" bill has been described as the "Hey, we are stealing your equity!" bill. (Full disclosure: I have been proud to play a tiny role in the effort that got transfer fees banned in Ohio, and I do not want to see this ban undone.)

Republicans in Congress are apparently so desperate to not let Democrats accomplish anything that they are willing to override the overwhelming consensus of wiser members of their own party in places like Ohio. Or maybe Freehold lobbyists actually convinced them that transfer fees are all about "freedom" and the consumer's "right to choose," and provide a "valuable financing tool" for developers. Whatever their malfunction is, we've had enough of financing tricks and traps like this, haven't we?

There's a sense of urgency to passing HR 6220. Freehold claims these transfer fees are already in place or soon to be in place on hundreds of billions of dollars worth of real estate. Any ban won't affect covenants already in place, so the longer it takes to cut off the head of this thing, the bigger a problem it becomes.

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely

Federal Reserve Officials: Americans Are Saving Too Much Money So We Need To Purposely Generate More Inflation To Get Them Spending Again

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Some top Federal Reserve officials have come up with a really bizarre proposal for stimulating the U.S. economy. As unbelievable as it sounds, what they actually propose to do is to purposely raise the rate of inflation so that Americans will stop saving so much money and will start spending wildly again. The idea behind it is that if inflation rises a couple of percentage points, but consumers are only earning half a percent (or less) on their savings accounts, then there will be an incentive for consumers to spend that money as the value of it deteriorates sitting in the bank. Yes, that is how bizarre things have gotten. It is not as if U.S. consumers are even saving that much money. Several decades ago, Americans typically saved between 8 and 12 percent of their incomes, but over this past decade the personal saving rate got down near zero a number of times as Americans were living far beyond their means. Once the recession hit, Americans very wisely started saving more money, and so now the personal saving rate has been hovering around the 5 to 7 percent range. This is well below historical levels, but the folks at the Fed apparently are eager for Americans to pull that money out and start spending it again.

In an article entitled "Fed Officials Mull Inflation as a Fix", Wall Street Journal columnist Sudeep Reddy described this bizarre new economic approach that some over at the Federal Reserve are now advocating....

"But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea: lifting inflation above the Fed's informal target."

Does increasing inflation as a way to stimulate the economy sound like a good idea to any of you?

These are supposed to be some of the brightest economic minds that our nation has produced.

Unfortunately, it is becoming increasingly apparent that the folks running the Federal Reserve do not have a clue about sound economic policy.

Anyone who lived through the "stagflation" days of the 1970s should know that inflation does not spur economic growth.

But now some of the most prominent Fed officials are publicly proposing that we should purposely generate more inflation so that "real interest rates" (interest rates with inflation factored in) will go down.

For example, during a recent interview the president of the Federal Reserve Bank of Chicago, Charles Evans, made the following statement....

"It seems to me if we could somehow get lower real interest rates so that the amount of excess savings that is taking place relative to investment needs is lowered, that would be one channel for stimulating the economy."

If you truly grasp what Evans is proposing here, your jaw should be dropping.

He is basically coming right out and saying, "Hey, let's go out and crank up the inflation rate so that American consumers will start recklessly spending their money again."

So are Americans really saving too much money?

Of course not.

Just take a look at the chart below.

Americans are actually still saving far, far less than they used to. As you can see from the chart, in the 1960s and 1970s Americans would usually save somewhere between 8 to 12 percent of their incomes.

Today, we are still well below that level. But we have made some progress from the reckless days of five to ten years ago when Americans were living far, far, far beyond their means and basically saving next to nothing....

So now some top Fed officials want to undo all that. They apparently want Americans to grab their credit cards and to run out to the stores and spend wildly like they did a few years ago.

But spending recklessly is not going to repair our economy. In order to have a healthy, balanced economy you need to have a healthy personal saving rate. Encouraging Americans to spend every last nickel they have may boost economic figures in the short-term, but it will make our long-term problems even worse.

But it is not just Federal Reserve officials that are advocating this kind of nonsense. Just a few months ago, IMF chief economist Olivier Blanchard suggested that it might be a good thing if western nations doubled their inflation targets from two percent to four percent.

It seems like almost everyone is in an inflationary mood these days.

The Federal Reserve keep dropping hints that it is ready to print lots more money and unleash another huge round of quantitative easing.

Just this past week, the Bank of Japan shocked world financial markets by cutting interest rates even closer to zero and by setting up a 5 trillion yen quantitative easing fund.

In fact, nations all over the world have become increasingly eager to devalue their national currencies in an attempt to gain an edge in international trade.

So after years of relatively low inflation, it looks like our leaders are almost eager to tangle with the inflation tiger once again.

But it might not be so easy to tame the next time.

Once a really bad inflation spiral gets going it is really hard to stop.

But in the end, it is not going to be Barack Obama or the U.S. Congress that is going to decide if we pursue these inflationary policies or not.

Ultimately, these decisions are in the hands of the unelected, unaccountable Federal Reserve.

If you don't like it, too bad. When was the last time a U.S. president or the U.S. Congress really stood up to the Federal Reserve? It just doesn't seem to happen.

The Federal Reserve is going to do what the Federal Reserve wants to do, and the rest of us are going to have to live with it.

Of course we could all try to elect candidates who would demand more accountability from the Federal Reserve this fall, but unfortunately those kind of candidates are few and far between.

The sad reality is that at this point, the Federal Reserve is pretty much completely and totally out of control. The U.S. dollar has already lost over 95 percent of its value since 1913, and now the Federal Reserve is giving every indication that inflation is going to get even worse in the years to come.

But flooding the system with more paper money is not going to solve anything. Instead, it is just going to make it even harder for average American families to buy milk and bread and to put gas in the car.

Inflation is a hidden tax on every single dollar that we already own. It is a destroyer of wealth and a wrecker of currencies.

But now some of the top officials at the Fed see inflation as a key tool in creating "economic growth".

With such a clueless collection of idiots running our economy (and the Federal Reserve does run our economy) do any of you actually believe that there is hope for the U.S. economic system in the long run?

A Long History of America's Dark Side

A Long History of America's Dark Side

This military tradition has explicitly defended the selective use of terror, whether in suppressing Native American resistance on the frontiers in the 19th Century or in protecting U.S. interests abroad in the 20th Century or fighting the “war on terror” over the last decade.

The American people are largely oblivious to this hidden tradition because most of the literature advocating state-sponsored terror is carefully confined to national security circles and rarely spills out into the public debate, which is instead dominated by feel-good messages about well-intentioned U.S. interventions abroad.

Over the decades, congressional and journalistic investigations have exposed some of these abuses. But when that does happen, the cases are usually deemed anomalies or excesses by out-of-control soldiers.

But the historical record shows that terror tactics have long been a dark side of U.S. military doctrine. The theories survive today in textbooks on counterinsurgency warfare, "low-intensity" conflict and “counter-terrorism.”

Some historians trace the formal acceptance of those brutal tenets to the 1860s when the U.S. Army was facing challenge from a rebellious South and resistance from Native Americans in the West. Out of those crises emerged the modern military concept of "total war" -- which considers attacks on civilians and their economic infrastructure an integral part of a victorious strategy.

In 1864, Gen. William Tecumseh Sherman cut a swath of destruction through civilian territory in Georgia and the Carolinas. His plan was to destroy the South's will to fight and its ability to sustain a large army in the field. The devastation left plantations in flames and brought widespread Confederate complaints of rape and murder of civilians.

Meanwhile, in Colorado, Col. John M. Chivington and the Third Colorado Cavalry were employing their own terror tactics to pacify Cheyennes. A scout named John Smith later described the attack at Sand Creek, Colorado, on unsuspecting Indians at a peaceful encampment:

"They were scalped; their brains knocked out; the men used their knives, ripped open women, clubbed little children, knocked them in the head with their guns, beat their brains out, mutilated their bodies in every sense of the word." [U.S. Cong., Senate, 39 Cong., 2nd Sess., "The Chivington Massacre," Reports of the Committees.]

Though Smith's objectivity was challenged at the time, today even defenders of the Sand Creek raid concede that most women and children there were killed and mutilated. [See Lt. Col. William R. Dunn, I Stand by Sand Creek.]

Yet, in the 1860s, many whites in Colorado saw the slaughter as the only realistic way to bring peace, just as Sherman viewed his "march to the sea" as necessary to force the South's surrender.

The brutal tactics in the West also helped clear the way for the transcontinental railroad, built fortunes for favored businessmen and consolidated Republican political power for more than six decades, until the Great Depression of the 1930s. [See’s “Indian Genocide and Republican Power.”]

Four years after the Civil War, Sherman became commanding general of the Army and incorporated the Indian pacification strategies -- as well as his own tactics -- into U.S. military doctrine. Gen. Philip H. Sheridan, who had led Indian wars in the Missouri territory, succeeded Sherman in 1883 and further entrenched those strategies as policy. [See Ward Churchill, A Little Matter of Genocide.]

By the end of the 19th Century, the Native American warriors had been vanquished, but the Army's winning strategies lived on.

Imperial America

When the United States claimed the Philippines as a prize in the Spanish-American War, Filipino insurgents resisted. In 1900, the U.S. commander, Gen. J. Franklin Bell, consciously modeled his brutal counterinsurgency campaign after the Indian wars and Sherman's "march to the sea."

Bell believed that by punishing the wealthier Filipinos through destruction of their homes -- much as Sherman had done in the South -- they would be coerced into helping convince their countrymen to submit.

Learning from the Indian wars, he also isolated the guerrillas by forcing Filipinos into tightly controlled zones where schools were built and other social amenities were provided.

"The entire population outside of the major cities in Batangas was herded into concentration camps," wrote historian Stuart Creighton Miller. "Bell's main target was the wealthier and better-educated classes. ... Adding insult to injury, Bell made these people carry the petrol used to burn their own country homes." [See Miller's “Benevolent Assimilation."]

For those outside the protected areas, there was terror. A supportive news correspondent described one scene in which American soldiers killed "men, women, children ... from lads of 10 and up, an idea prevailing that the Filipino, as such, was little better than a dog. ...

“Our soldiers have pumped salt water into men to 'make them talk,' have taken prisoner people who held up their hands and peacefully surrendered, and an hour later, without an atom of evidence to show they were even insurrectos, stood them on a bridge and shot them down one by one, to drop into the water below and float down as an example to those who found their bullet-riddled corpses."

Defending the tactics, the correspondent noted that "it is not civilized warfare, but we are not dealing with a civilized people. The only thing they know and fear is force, violence, and brutality." [Philadelphia Ledger, Nov. 19, 1900]
In 1901, anti-imperialists in Congress exposed and denounced Bell's brutal tactics. Nevertheless, Bell's strategies won military acclaim as a refined method of pacification.

In a 1973 book, one pro-Bell military historian, John Morgan Gates, termed reports of U.S. atrocities "exaggerated" and hailed Bell's "excellent understanding of the role of benevolence in pacification."

Gates recalled that Bell's campaign in Batanga was regarded by military strategists as "pacification in its most perfected form." [See Gates's Schoolbooks and Krags: The United States Army in the Philippines, 1898-1902.]

Spreading the Word

At the turn of the century, the methodology of pacification was a hot topic among the European colonial powers, too. From Namibia to Indochina, Europeans struggled to subdue local populations.

Often outright slaughter proved effective, as the Germans demonstrated with massacres of the Herrero tribe in Namibia from 1904-1907. But military strategists often compared notes about more subtle techniques of targeted terror mixed with demonstrations of benevolence.

Counterinsurgency strategies were back in vogue after World War II as many subjugated people demanded independence from colonial rule and Washington worried about the expansion of communism. In the 1950s, the Huk rebellion against U.S. dominance made the Philippines again the laboratory, with Bell's earlier lessons clearly remembered.

"The campaign against the Huk movement in the Philippines ... greatly resembled the American campaign of almost 50 years earlier," historian Gates observed. "The American approach to the problem of pacification had been a studied one."

But the war against the Huks had some new wrinkles, particularly the modern concept of psychological warfare or psy-war.

Under the pioneering strategies of the CIA's Maj. Gen. Edward G. Lansdale, psy-war was a new spin to the old game of breaking the will of a target population. The idea was to analyze the psychological weaknesses of a people and develop "themes" that could induce actions favorable to those carrying out the operation.

While psy-war included propaganda and disinformation, it also relied on terror tactics of a demonstrative nature. An Army psy-war pamphlet, drawing on Lansdale's experience in the Philippines, advocated "exemplary criminal violence -- the murder and mutilation of captives and the display of their bodies," according to Michael McClintock's Instruments of Statecraft.

In his memoirs, Lansdale boasted of one legendary psy-war trick used against the Huks who were considered superstitious and fearful of a vampire-like creature called an asuang.

"The psy-war squad set up an ambush along a trail used by the Huks," Lansdale wrote. "When a Huk patrol came along the trail, the ambushers silently snatched the last man on the patrol, their move unseen in the dark night. They punctured his neck with two holes, vampire-fashion, held the body up by the heels, drained it of blood, and put the corpse back on the trail.

“When the Huks returned to look for the missing man and found their bloodless comrade, every member of the patrol believed the asuang had got him." [See Lansdale's In the Midst of Wars.]

The Huk rebellion also saw the refinement of free-fire zones, a technique used effectively by Bell's forces a half-century earlier. In the 1950s, special squadrons were assigned to do the dirty work.

"The special tactic of these squadrons was to cordon off areas; anyone they caught inside the cordon was considered an enemy," explained one pro-U.S. Filipino colonel. "Almost daily you could find bodies floating in the river, many of them victims of [Major Napoleon] Valeriano's Nenita Unit. [See Benedict J. Kerkvliet, The Huk Rebellion: A Study of Peasant Revolt in the Philippines.]

On to Vietnam

The successful suppression of the Huks led the war's architects to share their lessons elsewhere in Asia and beyond. Valeriano went on to co-author an important American textbook on counterinsurgency and to serve as part of the American pacification effort in Vietnam with Lansdale.

Following the Philippine model, Vietnamese were crowded into "strategic hamlets"; "free-fire zones" were declared with homes and crops destroyed; and the Phoenix program eliminated thousands of suspected Viet Cong cadre.

The ruthless strategies were absorbed and accepted even by widely respected military figures, such as Gen. Colin Powell who served two tours in Vietnam and endorsed the routine practice of murdering Vietnamese males as a necessary part of the counterinsurgency effort.

"I recall a phrase we used in the field, MAM, for military-age male," Powell wrote in his much-lauded memoir, My American Journey. "If a helo [a U.S. helicopter] spotted a peasant in black pajamas who looked remotely suspicious, a possible MAM, the pilot would circle and fire in front of him. If he moved, his movement was judged evidence of hostile intent, and the next burst was not in front, but at him.

"Brutal? Maybe so. But an able battalion commander with whom I had served at Gelnhausen [West Germany], Lt. Col. Walter Pritchard, was killed by enemy sniper fire while observing MAMs from a helicopter. And Pritchard was only one of many. The kill-or-be-killed nature of combat tends to dull fine perceptions of right and wrong."

In 1965, the U.S. intelligence community formalized its hard-learned counterinsurgency lessons by commissioning a top-secret program called Project X. Based at the U.S. Army Intelligence Center and School at Fort Holabird, Maryland, the project drew from field experience and developed teaching plans to "provide intelligence training to friendly foreign countries," according to a Pentagon history prepared in 1991 and released in 1997.

Called "a guide for the conduct of clandestine operations," Project X "was first used by the U.S. Intelligence School on Okinawa to train Vietnamese and, presumably, other foreign nationals," the history stated.

Linda Matthews of the Pentagon's Counterintelligence Division recalled that in 1967-68, some of the Project X training material was prepared by officers connected to the Phoenix program. "She suggested the possibility that some offending material from the Phoenix program may have found its way into the Project X materials at that time," the Pentagon report said.

In the 1970s, the U.S. Army Intelligence Center and School moved to Fort Huachuca in Arizona and began exporting Project X material to U.S. military assistance groups working with "friendly foreign countries." By the mid-1970s, the Project X material was going to armies all over the world.

In its 1992 review, the Pentagon acknowledged that Project X was the source for some of the "objectionable" lessons at the School of the Americas where Latin American officers were trained in blackmail, kidnapping, murder and spying on non-violent political opponents.

But disclosure of the full story was blocked near the end of the first Bush administration when senior Pentagon officials working for then-Defense Secretary Dick Cheney ordered the destruction of most Project X records. [See Robert Parry's Lost History.]

Living Dangerously

By the mid-1960s, some of the U.S. counterinsurgency lessons had reached Indonesia, too. The U.S. military training was surreptitious because Washington viewed the country's neutralist leader Sukarno as politically suspect. The training was permitted only to give the United States influence within the Indonesian military which was considered more reliable.

The covert U.S. aid and training was mostly innocuous-sounding "civic action," which is generally thought to mean building roads, staffing health clinics and performing other "hearts-and-minds" activities with civilians. But "civic action" also provided cover in Indonesia, as in the Philippines and Vietnam, for psy-war.

The secret U.S.-Indonesian military connections paid off for Washington when a political crisis erupted, threatening Sukarno's government.

To counter Indonesia's powerful Communist Party, known as the PKI, the army's Red Berets organized the slaughter of tens of thousands of men, women and children. So many bodies were dumped into the rivers of East Java that they ran red with blood.

In a classic psy-war tactic, the bloated carcasses also served as a political warning to villages down river.

"To make sure they didn't sink, the carcasses were deliberately tied to, or impaled on, bamboo stakes," wrote eyewitness Pipit Rochijat. "And the departure of corpses from the Kediri region down the Brantas achieved its golden age when bodies were stacked on rafts over which the PKI banner proudly flew." [See Rochijat's "Am I PKI or Non-PKI?" Indonesia, Oct. 1985.]

Some historians have attributed the grotesque violence to a crazed army which engaged in "unplanned brutality" or "mass hysteria" leading ultimately to the slaughter of some half million Indonesians, many of Chinese descent.

But the recurring tactic of putting bodies on gruesome display fits as well with the military doctrines of psy-war, a word that one of the leading military killers used in un-translated form in one order demanding elimination of the PKI.

Sarwo Edhie, chief of the political para-commando battalion known as the Red Berets, warned that the communist opposition "should be given no opportunity to concentrate/consolidate. It should be pushed back systematically by all means, including psy-war." [See The Revolt of the G30S/PKI and Its Suppression, translated by Robert Cribb in The Indonesian Killings.]

Sarwo Edhie had been identified as a CIA contact when he served at the Indonesian Embassy in Australia. [See Pacific, May-June 1968.]

US Media Sympathy

Elite U.S. reaction to the horrific slaughter was muted and has remained ambivalent ever since. The Johnson administration denied any responsibility for the massacres, but New York Times columnist James Reston spoke for many opinion leaders when he approvingly termed the bloody developments in Indonesia "a gleam of light in Asia."

The American denials of involvement held until 1990 when U.S. diplomats admitted to a reporter that they had aided the Indonesian army by supplying lists of suspected communists.

"It really was a big help to the army," embassy officer Robert Martens told Kathy Kadane of States News Service. "I probably have a lot of blood on my hands, but that's not all bad. There's a time when you have to strike hard at a decisive moment." Martens had headed the U.S. team that compiled the death lists.

Kadane's story provoked a telling response from Washington Post senior editorial writer Stephen S. Rosenfeld. He accepted the fact that American officials had assisted "this fearsome slaughter," but then justified the killings.

Rosenfeld argued that the massacre "was and still is widely regarded as the grim but earned fate of a conspiratorial revolutionary party that represented the same communist juggernaut that was on the march in Vietnam."

In a column entitled, "Indonesia 1965: The Year of Living Cynically?" Rosenfeld reasoned that "either the army would get the communists or the communists would get the army, it was thought: Indonesia was a domino, and the PKI's demise kept it [Indonesia] standing in the free world. ...

“Though the means were grievously tainted, we -- the fastidious among us as well as the hard-headed and cynical -- can be said to have enjoyed the fruits in the geopolitical stability of that important part of Asia, in the revolution that never happened." [Washington Post, July 13, 1990]

The fruit tasted far more bitter to the peoples of the Indonesian archipelago, however. In 1975, the army of Indonesia’s new dictator, Gen. Suharto, invaded the former Portuguese colony of East Timor. When the East Timorese resisted, the Indonesian army returned to its gruesome bag of tricks, engaging in virtual genocide against the population.

A Catholic missionary provided an eyewitness account of one search-and-destroy mission in East Timor in 1981.

"We saw with our own eyes the massacre of the people who were surrendering: all dead, even women and children, even the littlest ones. ... Not even pregnant women were spared: they were cut open. .... They did what they had done to small children the previous year, grabbing them by the legs and smashing their heads against rocks. ...

“The comments of Indonesian officers reveal the moral character of this army: 'We did the same thing [in 1965] in Java, in Borneo, in the Celebes, in Irian Jaya, and it worked." [See A. Barbedo de Magalhaes, East Timor: Land of Hope.]

The references to the success of the 1965 slaughter were not unusual. In Timor: A People Betrayed, author James Dunn noted that "on the Indonesian side, there have been many reports that many soldiers viewed their operation as a further phase in the ongoing campaign to suppress communism that had followed the events of September 1965."

Classic psy-war and pacification strategies were followed to the hilt in East Timor. The Indonesians put on display corpses and the heads of their victims. Timorese also were herded into government-controlled camps before permanent relocation in "resettlement villages" far from their original homes.

"The problem is that people are forced to live in the settlements and are not allowed to travel outside," said Msgr. Costa Lopes, apostolic administrator of Dili. "This is the main reason why people cannot grow enough food." [See John G. Taylor, Indonesia's Forgotten War: The Hidden History of East Timor.]

Public Revulsion

Through television in the 1960-70s, the Vietnam War finally brought the horrors of counterinsurgency home to millions of Americans. They watched as U.S. troops torched villages and forced distraught old women to leave ancestral homes.

Camera crews caught on film brutal interrogation of Viet Cong suspects, the execution of one young VC officer, and the bombing of children with napalm.

In effect, the Vietnam War was the first time Americans got to witness the pacification strategies that had evolved secretly as national security policy since the 19th Century. As a result, millions of Americans protested the war's conduct and Congress belatedly compelled an end to U.S. participation in 1974.

But the psy-war doctrinal debates were not resolved by the Vietnam War. Counterinsurgency advocates regrouped in the 1980s behind President Ronald Reagan, who mounted a spirited defense of the Vietnamese intervention and reaffirmed U.S. resolve to employ similar tactics against leftist forces especially in Central America. [See’s “Guatemala: A Test Tube for Repression.”]

Reagan also added an important new component to the mix. Recognizing how graphic images and honest reporting from the war zone had undercut public support for the counterinsurgency in Vietnam, Reagan authorized an aggressive domestic "public diplomacy" operation which practiced what was called "perception management" -- in effect, intimidating journalists to ensure that only sanitized information would reach the American people.

Reporters who disclosed atrocities by U.S.-trained forces, such as the El Mozote massacre by El Salvador's Atlacatl battalion in 1981, came under harsh criticism and saw their careers damaged.

Some Reagan operatives were not shy about their defense of political terror as a necessity of the Cold War. Neil Livingstone, a counter-terrorism consultant to the National Security Council, called death squads "an extremely effective tool, however odious, in combatting terrorism and revolutionary challenges." [See McClintock's Instruments of Statecraft.]

When Democrats in Congress objected to excesses of Reagan's interventions in Central America, the administration responded with more public relations and political pressure, questioning the patriotism of the critics. For instance, Reagan’s United Nations Ambassador Jeane Kirkpatrick accused anyone who took note of U.S.-backed war crimes of “blaming America first.”

Many Democrats in Congress and journalists in the Washington press corps buckled under the attacks, giving the Reagan administration much freer rein to carry out brutal “death squad” strategies in El Salvador, Honduras, Guatemala and Nicaragua.

What is clear from these experiences in Indonesia, Vietnam, Central America and elsewhere is that the United States, for generations, has sustained two parallel but opposed states of mind about military atrocities and human rights: one of U.S. benevolence, generally held by the public, and the other of ends-justify-the-means brutality embraced by counterinsurgency specialists.

Normally the specialists carry out their actions in remote locations with little notice in the national press. But sometimes the two competing visions – of a just America and a ruthless one – clash in the open, as they did in Vietnam.

Or the dark side of U.S. security policy is thrown into the light by unauthorized leaks, such as the photos of abused detainees at Abu Ghraib prison in Iraq or by revelations about waterboarding and other torture authorized by George W. Bush’s White House as part of the “war on terror.”

Only then does the public get a glimpse of the grim reality, the bloody and brutal tactics that have been deemed “necessary” for more than two centuries in the defense of the purported “national interests.”