Thursday, May 17, 2012

Argentina's Model, An Alternative To Austerity

Go To Original

One of the great myths about the Argentine economy that is repeated nearly every day is that the rapid growth of the Argentine economy during the past decade has been a "commodity export boom". For example, the New York Times reported last week:

"Riding an export boom for commodities like soybeans, Argentina's economy grew at an average rate of 7.7% from 2004 to 2010, almost twice the average annual growth of 4.3% in Chile, a country often cited as a model for economic policies, over the same period."

Michael Shifter, the president of the inter-American dialogue and probably the most quoted source on Latin America in the US press, wrote in a disparaging article about Argentina this week that "If the sales and price of soybean, Argentina's principal export (mainly to China), remain high, then the country may be able to continue its path of economic growth."

I haven't seen any economists make the claim that Argentina's remarkable economic growth over the past nine years – which has brought record levels of employment and a two-thirds reduction in poverty – has been driven by soybeans or a commodities export boom. Maybe that is because it is not true.

I know what you're thinking: "Who cares?" Well, try to keep reading, because this does have implications beyond the sprawling soybean farms in the Argentine province of Cordoba.

What does it mean to have a "commodities boom", or growth driven by the export of commodities? One possibility would be based on quantity: the production and export of these commodities grows so fast that it makes up a large part of the country's real growth in output. Thus, as a matter of accounting, we could look at real GDP growth for 2002-2010, the last year for which we have complete data on exports, and ask, how much of this real, inflation-adjusted, growth is due to exports of commodities?

It turns out that only 12% of Argentina's real GDP growth during this period was due to any kind of exports at all. And just a fraction of this 12% was due to commodity exports, including soybeans. So Argentina's economic growth from 2002-2010 was not an export-led growth experience, by any stretch of the imagination, still less, a "commodities boom".

The other possibility is based on prices: the price of soybeans and other commodity exports also rose during part of this period. This can boost the economy in various ways, even if the physical amount of exports does not increase as rapidly as the economy. If this were driving Argentina's growth, we would expect the dollar value of these exports to have grown faster than the rest of the economy. But this did not happen either. The value of agricultural exports, including of course soybeans, as a percent of Argentina's GDP didn't rise during the expansion. It was about 5% of GDP when the economy started growing in 2002, and 3.7% of GDP in 2010.

In other words, there is no plausible story that anyone can tell from the data to support the idea that Argentina's growth over the past nine years was driven by a "commodities boom." Why does this matter? Well, as economist Paul Krugman noted yesterday, "articles about Argentina are almost always very negative in tone ― they are irresponsible, they are renationalizing some industries, they talk populist, so they must be going very badly." Which, he points out, "doesn't speak well for the state of economics reporting." It sure doesn't.

The myth of the "commodities export boom" is one way that Argentina's detractors dismiss Argentina's economic growth as just dumb luck. But the reality is that the economic expansion has been < a href="">led by domestic consumption and investment. And it happened because the Argentine government changed its most important macroeconomic choices: on fiscal, monetary, and exchange rate policies. That is what took Argentina out of its 1998-2002 depression and turned it into the fastest-growing economy in the Americas.

Now for the world-wide significance of how Argentina's recovery actually happened: as I and many other economists have written, the policies currently being imposed on the eurozone economies – especially the weaker ones – are similar to what Argentina went through during the depression that led to its default and devaluation. These policies were pro-cyclical, meaning that they amplified the impact of the downturn. Together with a fixed, overvalued exchange rate, they made the economy worse. By defaulting on its debt and devaluing its currency, Argentina was freed to change its most important macroeconomic policies.

If the European authorities (the European Commission, the European Central Bank, and the IMF) continue to block the eurozone's economic recovery with senseless austerity measures, individual countries will want to consider more rational alternatives in order to restore full employment. The people of Greece, Spain, Portugal, Ireland, and other countries are told every day that they must swallow this bitter medicine, and that there is no alternative to the prolonged suffering and high unemployment that they are going through. But the Argentine experience – in reality rather than in mythical portrayals – indicates that this is not true. There are definitely better alternatives – and they have nothing to do with soybeans or commodity export booms.

Army Manual For Re-Education Camps Applies To US Citizens

Go To Original

After reporting this week on a Pentagon-created plan for interning activists at re-education camps, questions were asked about the US Army manual that allegedly outlines the resettling of US citizens. Can Americans be sent to propaganda prisons?

Now as more and more news organizations are investigating the recently unearthed military manual, FM 3-39.40 Internment and Resettlement Operations, verification is coming in that the callous plans to populate military camps in the US and abroad are not only authentic, but indeed establishes blueprints for putting the country’s own citizens into guarded Army detainment centers.

“They always tell the media that it’s for disasters — domestically — or foreign wars and putting people in camps like Abu Ghraib in Iraq or Camp X-Ray in Cuba, but now more and more documents are coming out confirming what I’ve already had from sources and my researching into this,” radio host Alex Jones tells RT. According to Jones, he has seen the Pentagon refit old military bases into camps through the Emergency Centers Establishment Act “to prepare them for, quote, ‘emergencies,’” but there is way more than the government isn’t saying.

“I’ve been to the drills and I noticed that they were training with the role players to put American political dissidents in them,” Jones says about sending US civilians into the camps.

“I witnessed marines training to confiscate firearms on the West Coast and to put Americans both on the left and the right into camps and even segregate them according to their different political persuasions,” adds Jones.

Jones continues that Pentagon officials have informed him in the past about plans to re-educate political activists by armed enforcers, but the leaking of the elusive document confirms what he has been cautioned of in the past.

“Now we have an Army document that dovetails with huge increased spending, hiring tens of thousands of people in the military to specifically be internment camp officers.”

After combing through the 300-plus pages of 3-39.40, the website Infowars also addresses questions over whether or not the manual would make it so that the US government could send its own citizens to reeducation camps. In their own analysis, the site singles out certain sections of the manual that specifically discuss not just “The authority to approve resettlement such operations within US territories,” but how, also, “US citizens will be confined separately from detainees” by being booked and processed according to their Social Security number.

“Last time I checked, the United States Social Security Administration was not responsible for handing out social security numbers to people in Afghanistan or Iraq,” explains Infowar’s Paul Joseph Watson.

As if the text of the paper wasn’t enough, Watson breaks it down for those that are still skeptic that the American military would want to imprison its own citizens and install in them an “appreciation of US policies and actions.”

“The time for denial is over. People spent weeks arguing over the ‘indefinite detention’ provisions of the National Defense Authorization Act, ignoring assertions by top scholars and legal experts that the kidnapping provisions did apply to U.S. citizens,” writes Watson. Sure enough, when US President Barack Obama signed the NDAA into law on December 31, he acknowledged that he had his own reservations about the provisions that provide for the indefinite detention of his own citizens without charge.

Now coupled with a leaked copy of the Internment and Resettlement Operations guide, it looks as if not only can the US imprison its own citizens that disagree with the government — but it has already laid out the rules.

“This isn’t just some contingency plan,” Alex Jones tells RT. “This is the manual.”

The National Defense Authorization Act (NDAA) - This Is Happening In America?

Go To Original

From my diary of students' awakening to the president's grave menace to their constitutional liberties: Recently, on Skype, I was discussing my memoir, "Boston Boy" (Paul Dry Books, 1986), with a class at Suffolk University in Boston. It's about growing up in a Boston ghetto during the Great Depression, when Boston was the most anti-Semitic city in the country.

While answering questions from these lively students, I wanted to find out how many of them knew about the National Defense Authorization Act (NDAA) for Fiscal Year 2012. Barack Obama signed this law, giving the president -- for the first time in American history -- the power to imprison indefinitely an American citizen "suspected" of "association" (without evidence) with terrorists. This fate comes without charge or trial.

What did these students think about that?

There was silence. Not a word. They seemed to be glued to their chairs.

Later, an explanation came from the history professor, Robert Allison, who had assigned the book to them. (Among his books: "The Boston Tea Party," "The Boston Massacre" and "American Eras: The Revolutionary Era (1754-1783).")

"You sure put the fear of God in them," he told me. That was strange because I'm a nonbeliever -- except in the Constitution.

Describing the students' state of fear, he told me that one of them startlingly asked: "Is what he said happening in America?"

Added another: "Is anybody doing anything about it?"

Unfortunately, I haven't heard of anyone in the Obama Justice Department resigning in patriotic protest against the NDAA. (Nor, as far as I know, did anyone in the George W. Bush Justice Department resign, denouncing the Patriot Act, under which the systemic contemporary disintegration of our constitutional liberties began.)

Instead, writes Tom Engelhardt, it seems the Obama administration has been building upon this seemingly vast "national security labyrinth" ("Yottabytes, You, and the Infinitely Expansive National Security State," Tom Engelhardt,, April 3).

On March 22, reports Engelhardt, Attorney General Eric Holder, our chief law officer, along with Director of National Intelligence James Clapper Jr., agreed to "new guidelines allowing the National Counterterrorism Center (NCTC) ... to hold on to information about Americans in no way known to be connected to terrorism -- about you and me, that is -- for up to five years." Its previous limit was 180 days.

So, you or I would be a "person of interest" to the FBI and other intelligence agencies for five years. And nothing would prevent us innocents from staying in suspects' databases for many years beyond.

Is this America? Or China?

Engelhardt also points out that these new guidelines targeting We the People "hardly made a ripple" throughout the media.

Remember that when President Obama arrived in the Oval Office, he solemnly pledged his administration would be the most transparent in American history.

Next summer, during my annual lecture-interchanges with law students at Charlottesville, Va.'s Rutherford Institute -- headed by John Whitehead, one of the nation's strongest defenders of civil liberties -- I'll review the NDAA for them, reminding them of Winston Churchill's warning:

"The power of the executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers (at trial) is in the highest degree odious, and is the foundation of all totalitarian government whether Nazi or Communist" (Future of Freedom Foundation,, April 27).

Is it the foundation of our government run by Barack Obama and Eric Holder?

And while talking to these bright law students, I'll hypothesize that some of them might wind up in the Justice Department of a president whose view of national security would lead him or her to adopt and enforce the very tyranny that is described by Winston Churchill and is contained in the NDAA.

If any of these law students in Virginia are hired by the Justice Department, would they follow these presidential orders, as is now customary?

Now, a contrasting, cheerful note amid all this tarring of our American values:

The City Council of Northampton, Mass., has unanimously passed a resolution rejecting the NDAA as unconstitutional and demanding "a restoration of due process and the right to trial" ("Northampton 'opts out' of federal law," Heidi Voigt,, Feb 17).

Sure, this is a symbolic statement meant to awaken other cities. But it is worth remembering that, after the Patriot Act was shoved through Congress in the fall of 2001, this City Council unanimously voted on May 2, 2002, to make Northampton America's first city to denounce the un-American law, organizing a modern-day version of the Committees of Correspondence.

The result was the still very active Bill of Rights Defense Committee (BORDC). Committee member Emma Roderick proudly declares that, after Northampton's resolution passed, "433 cities and towns ended up passing (similar) resolutions," rousing citizens across the country, even liberating some minds across party lines in Congress. (, Feb 17).

This resistance to arrant tyranny first became part of our heritage when Samuel Adams and the Sons of Liberty formed the original Committees of Correspondence, a unifying source of news of British tyranny throughout the colonies that became a precipitating cause of the American Revolution.

Where are the Sons of Liberty, the Committees of Correspondence and the insistently courageous city councils now, when they are crucially needed to bring back the Bill of Rights that protect every American against government tyranny worse than King George III's?

Where are the citizens demanding that these doorways to liberty be opened? None of the current polls listing the most demanding issues in the 2012 elections have any mention of enabling us to be free citizens again.

From now on, I'll be asking this of any students I speak with: What are we waiting for?

Disinformation On Every Front

Go To Original

Some readers have come to the erroneous conclusion that the Matrix consists of Republican Party disinformation as if there is no disinformation from the left. Others think that propaganda is the business of Obama and the Democrats. In fact, propaganda from the right, the left and the middle are all part of the disinformation fed to americans.

If I may give some examples: The other day Chuck Colson, one of the Nixon officials imprisoned for Watergate crimes, died. This gave NPR the opportunity to relive the Nixon horror.

What precisely was the Nixon horror? Essentially, there was no such thing. Watergate was about President Nixon lying about when he learned about the Watergate burglary.
When Nixon learned about the burglary, he did not act on it prior to his reelection, because he reasoned, rightly, that the Washington Post would blame him for the burglary, although he had nothing to do with it, in the hopes of preventing his reelection.

By going along with a cover-up, Nixon enabled the Washington Post to make an issue of the precise date on which Nixon learned of the burglary. White House tapes indicated that Nixon had learned of the burglary before he said he learned of it. So Nixon had permitted a cover-up and had to go, but what was the real reason?

What was the Watergate burglary? We don’t really know. A group of men including former CIA operatives were hired by the Committee to Re-elect the President to break into a Democratic campaign office in the Watergate complex. We don’t know the purpose of the burglary. Some claim it was to wire-tap the telephones in the belief that the Democratic Party was getting re-election money from communists in Cuba or elsewhere. Others claim that the burglars were looking for a list of call girls, that compromised a White House official, as his fiancee was allegedly one of the call girls.

Looking back from our time during which Bush and Obama have deep-sixed the US Constitution, violated numerous US and international laws, and behaved as if they were caesars unconstrained by any law or any morality, Nixon’s “crimes” appear so trivial as to be unremarkable. Yet, Nixon was driven from office and is regarded as a criminal.

What was Watergate really about?

I doubt we will ever know. But I can offer one possible explanation. Nixon, like John F. Kennedy before him, alarmed the military/security complex with his plans to withdraw US troops from Vietnam (Vietnamization) and his determination to open communication with communist China and improve relations.

As President Eisenhower warned in his last address to the American people, conflict brings power and profit to interest groups that benefit from conflict. Nixon, like Kennedy before him, was perceived as a threat by these powerful interests, because he was working to reduce conflict.

James W. Douglass in his documented book, JFK and the Unspeakable, attributes the assassination of President John F. Kennedy to the CIA, Joint Chiefs of Staff, and Secret Service. Douglas reports that these powerful government institutions were concerned by Kennedy’s refusal to approve Operation Northwoods, to back the CIA’s invasion of Cuba, and to confront the Soviets militarily over the Cuban missile crisis and by Kennedy’s plans to end US military intervention in Vietnam. JFK also told his brother Robert that after his re-election he was going to break the CIA into a thousand pieces.

The right-wing view that Kennedy was too soft to stand up to communism was intensified when it was learned that Kennedy was working with Nikita Khrushchev through back channels to defuse the Cold War. In his “A Strategy of Peace” speech (June 1963), Kennedy announced the Nuclear Test Ban Treaty and the suspension of atmospheric nuclear testing.

“What kind of a peace do we seek?,” Kennedy asked. “Not a Pax Americana enforced on the world by American weapons of war.” With his words and deeds, President Kennedy made himself into a threat against the interests of the military/security complex.

There was enough suspicion of JFK’s assassination that yet another president assassinated by another “unhinged lone gunman” might raise more eyebrows. Nixon was disliked by the media, which made him a good candidate for political assassination. The Watergate burglary provided the opportunity. The Washington Post did the job with reports of “Deep Throat” meeting with reporters in spooky underground parking lots after midnight. Little, if any, information of consequence was contained in these reports. Instead, the newspaper’s reporting transferred the spooky danger of the deserted parking garages to Nixon and an aura of evil was attached to Nixon that eroded his support.

It is interesting that it is only presidents who work to reduce conflict who become targets for assassination. Reagan’s anti-Soviet rhetoric was strong enough to fool the left-wing, but the military-security complex knew of Reagan’s intention to end the Cold War. The CIA, formerly headed by Reagan’s vice president, opposed Reagan’s plan to put the pressure of an arms race on the creaking Soviet economy. The CIA argued that the centrally planned Soviet economy allowed the Kremlin to control investment and that the Communist Party could allocate whatever percentage of Soviet GDP to the military as was needed to win the arms race. In other words, the CIA argued that the US would lose the arms race if Reagan raised the stakes as a means of bringing the Soviets to negotiate the end of the Cold War. Did the CIA really believe this, or was the military/security complex trying to keep the profitable Cold War stalemate going?

Washington cannot exist without conflict. Now that the “Muslim threat” is wearing thin, Washington is stirring up a conflict with China. Washington is sticking its nose into every dispute China has with its neighbors and building up its military presence in the Asian-Pacific. As I wrote in my previous column, a China threat is being created as a long-term threat to take the place of the former Soviet threat.

Moving on to another topic, americans are told that education is the answer to unemployment. Get that university degree and live happily every after.

As RT recently reported, the truth is that more than half of recent US university graduates are unemployed or very underemployed. So much for the mantra that “education is the answer.”

“Education is the answer” serves the colleges and universities who want the tuition payments. It serves the companies who make student loans. It helps the offshoring corporations disguise that they are the main cause of unemployment.

Education is not the answer when high value-added, high wage manufacturing and professional service jobs, such as software engineering, are moved offshore in order to enhance short-term profits for shareholders and multi-million dollar bonuses for CEOs, while domestic employment and purchasing power are destroyed. Unless American university graduates can emigrate to China and India, there is no one to employ them. Yet, we still hear the call to run up student loan debts beyond the ability of salaries to repay the loans.

Professional tradable service employment in the US is so scarce that the University of Florida has abolished its computer science department. As few of the graduates can find employment, the university has reallocated the department’s budget to football, a paying sport.

Americans plugged into the Matrix are programmed to believe that they have correct information provided by a varied and “independent media.” In fact the media is owned by 5 or 6 mega-media companies run by corporate advertising executives and Washington.

Recently, Bloomberg gave us the report that “Japan, Denmark and Switzerland are among the countries to rally this week to [IMF chief] Lagarde’s call for a bigger lending capacity beyond the current $380 billion to shield the world economy against any deepening of Europe’s debt turmoil.”

This Bloomberg report is nonsensical. The loans are not shielding the world economy. The loans are shielding the private banks from their own mistakes at the expense of the world economy. The Bloomberg report shows how completely the Western media is involved in forcing ordinary peoples to subsidize private bankers. It could not be more clear; yet, there is no embarrassment at Bloomberg for serving as the bankers’ propagandist.

Indeed, there is only honor. Serving the Matrix is where lie the rewards. Those who oppose the Matrix are the outcasts whose efforts might, as in the film, save the race of humans from the domination of evil, or else, if they lose, confine the outcasts to prosecution and death.

Across every front Americans are fed lies. The official media line is that the Japanese Fukushima nuclear threat from the earthquake and aftermath is well contained and over. However, the fact of the matter appears to be that an amazing radioactive inventory of both spent and unused fuel rods is in damaged cooling pools that could suffer collapse at any time (especially if there is another earthquake), thus releasing enormous radioactivity (reference link). This possibility presents a greater threat than the initial molten cores of the reactors themselves. Michael Chossudovsky points out that the media is yet to acknowledge the widespread contamination resulting from the Fukushima disaster, and there may be worse to come.

But who cares? Back to the Matrix and the “reality show.”

May Day: From the Haymarket Massacre to the Occupy Movement

Go To Original

Many people might be surprised to learn that the May Day celebrations that occurred around the world this week were born more than a century ago out of a struggle by American workers for the eight-hour day.

The late nineteenth century was a particularly hard and brutal time for working people in the United States. The rise of giant corporations fostered accelerated exploitation of workers in the interests of profit by the wealthy few. In the new, giant factories, it was common for workers to labor from 60 to 80 hours a week. Many workers had a six-day workweek, but a seven-day workweek was the standard for steel mills, oil refineries, paper mills, and other highly mechanized plants. The industrial accident and death rate soared to new heights -- not only thanks to new, dangerous machines and the use of child labor, but because of worker exhaustion. In 1881 alone, an estimated 30,000 American railway workers were killed or injured on the job.

Although popular celebrations on May 1 can be traced back to pagan times, they became connected to the lives of workers as a result of these lengthy, exhausting workdays and workweeks. In the United States, a campaign to limit the workday to eight hours picked up steam in the 1880s, thanks to its backing by the Knights of Labor (a rapidly-growing labor federation), small craft unions, and left-wing supporters of the working class. Among working people, a popular slogan swept across the country: “Eight hours for work, eight hours for rest, eight hours for what we will.” Meanwhile, the corporate titans of the era closed ranks against the eight-hour day movement, with the New York Times condemning it as “un-American.”

Gradually, plans took shape for a day of worker protests demanding the eight-hour day. And on May 1, 1886, protests erupted all across the United States, with some 340,000 workers taking part. An estimated 190,000 went out on strike. In Chicago, a center of the eight-hour day agitation, some 80,000 workers walked off the job, with most of them joining a vast parade through the city streets. At a concluding rally, the marchers were regaled with speeches condemning the exploitation of workers by big business.

Although things passed peacefully enough during the great demonstration in Chicago, soon after that the local police launched an assault on union members by gunning down locked-out workers at the nearby McCormick Harvester Plant. When an explosion of unknown origins went off at a subsequent protest rally at the Haymarket, a large open square in the city, police also opened fire on that worker gathering, killing some and wounding hundreds of others in what became known as the Haymarket Massacre. Radical labor agitators were arrested and blamed for the bloodshed, although most of them were not present at the rally. Four of them were executed.

Nevertheless, the march of labor was unstoppable. Although the Knights of Labor crumbled rapidly during the time of hysteria and repression that followed the Haymarket Massacre, the new American Federation of Labor vowed to continue the eight-hour day movement, and set May 1, 1890 as a day for further action. Joining the call for May Day protests, the International Socialist Workers Congress, in 1890, helped organize May 1 parades, meetings, and rallies throughout Europe in support of the struggles of American workers. Starting in 1891, May Day demonstrations became annual events in the United States and many other countries.

Decades later, communist governments, eager to appear as champions of the working class, organized official May Day celebrations in their countries, and this, in turn, led to a falling off in support for May Day in non-communist nations. In 1958, Congress -- anxious to undermine the significance of May Day as a time of worker protest -- declared May 1 to be Loyalty Day, which thereby became an official U.S. holiday. Nonetheless, the tradition of May Day as an occasion for the display of workers’ power continued in many lands and, in the post-Cold War years, began to revive in the United States. It received a major boost on May 1, 2006, when mostly Latino immigrant groups in the United States launched massive protests and strikes against anti-immigrant legislation. And, on May 1, 2012, that tradition of protest against exploitation of workers was drawn upon by the Occupy movement, which held May Day demonstrations and rallies -- often with a significant union presence -- in numerous cities and towns across the United States.

Of course, the labor movement’s long and difficult campaign for the eight-hour day was won in 1938, when the Roosevelt administration -- as part of its New Deal program -- shepherded the Fair Labor Standards Act through Congress. This legislation made the 40-hour workweek the norm and established a minimum wage for American workers.

But, in recent decades, the drive of the wealthy to enrich themselves at the expense of the rest of society has grown considerably more intense, and certainly more flagrant. Popular anger has grown over Wall Street impunity, huge tax breaks for the rich, unlimited spending in election campaigns, corporate destruction of the environment, and the widening gap between the falling wages of workers and the rising income of corporate executives. Therefore, it seems likely that the struggle for economic justice will heighten in coming years, with May Day continuing to serve as a potent symbol of worker discontent.

A May to Remember

Go To Original

April may be the cruelest month, as T.S. Eliot once claimed, but May is the month of exuberant mass action. We’re currently in the thick of the latest iteration of May mobilizations for justice and peace, with the worldwide protests that got rolling on May 1 and the actions that will take place later this month in Chicago focused on the NATO summit. May actions are a venerable tradition, reaching back to Emancipation Day in 1886 when — also in Chicago — 340,000 workers went on strike demanding an 8-hour workday. Since then, by design or coincidence, numerous May protests — perhaps egged on by the feisty vitality of spring and its alluring promise of rejuvenation — have been momentous.

In the month of May, one million South Africans demonstrated against apartheid (1986); 1,400 people were arrested protesting the construction of a nuclear power plant in Seabrook, New Hampshire (1977); the Riders challenged racial discrimination in interstate travel (1961); hundreds of schoolchildren were arrested during the civil rights movement’s historic Birmingham campaign (1963); the Poor People’s Campaign challenged economic inequality (1968); a general strike spread across France calling for social change, eventually mobilizing ten million people (1968); and millions protested U.S. immigration policy across the nation (2006). These, as the invaluable This Week in History attests, are only a small fraction of the many historic social struggles that have been launched in the month of May.

Here is one of the most notable.

Forty-one years ago today — May 3, 1971 — thousands of people were arrested in Washington D.C. as they clamored for an end to the U.S. war in Vietnam. Though no one could have known it at the time, this event proved to be the movement’s last monumental mobilization. There would be other national and local demonstrations before the war finally ended in 1975, but nothing would match the sheer size and intensity of this powerful drama played out on the streets of the nation’s capital.

In 1970 the U.S. had escalated the war by invading Cambodia, which led to nationwide demonstrations, including those where soldiers had fired on demonstrators, killing four at Kent State University in Ohio (May 4) and two at Jackson State College in Mississippi (May 14). In February 1971 the U.S. invaded Laos. For many in the still burgeoning anti-war movement, this raised the possibility of even greater escalation, including a ground war in North Vietnam. In response the movement threw itself into organizing a series of demonstrations, slated to take place from late April through early May.

In his book The War Within: America’s Battle Over Vietnam, political scientist Tom Wells details each of these actions, including a five-day witness by Vietnam Veterans Against the War (VVAW) that began on April 19 and featured an encampment, guerrilla theater at Arlington Cemetery, a contingent marching to the Pentagon to turn themselves in for war crimes and the drama of hundreds of vets returning their medals.

This was followed on April 24 by half a million people marching from the Ellipse behind the White House to the Capitol. A week of protests followed. There was guerrilla theater on Capitol Hill, Congressional lobbying and a series of civil-disobedience arrests: 151 Quakers in front of the White House, 200 demonstrators blocking the doors of the Selective Service System (the military draft), 224 at Health, Education and Welfare, and 370 at the Justice Department.

Not only does Wells chronicle the actions of the anti-war movement; he also scrupulously charts the U.S. government’s considerable efforts to survey and checkmate the movement. (In fact, one of the book’s major points is that policymakers began to shape the policy of the war itself in response to the growing power of the anti-war movement.) This attempt to track and counter the movement was true of the late April actions. Wells provides pages profiling the innumerable ways President Nixon’s aides schemed to delegitimize and disrupt these events, including getting a court injunction against VVAW’s base camp on the National Mall, and then going back to the judge and asking it to be rescinded when the vets wouldn’t budge — but this was especially evident with regard to the May actions that followed.

The slogan of the May Day actions was “If They Won’t Stop the War, We’ll Stop the Government.” Organizers sought to do this by using mobile tactics, in which small groups of people would occupy intersections and then move along to the next one before being arrested. As the Rainbow History Project recounts:

Rather than mounting a single massive protest they took a page from women’s movement organizers and structured the protest around smaller cohesive groups or “tribes” that were assigned particular sites and tasks within the protest.

The Nixon administration did not take this impending action lightly, as Wells recounts:

The administration took steps to keep May Day under control. CIA agents penetrated May Day groups. [Presidential counsel John] Dean tracked incoming intelligence on the protesters. “There were detailed briefings on the precise transmission frequencies of the demonstrators’ walkie-talkies, which would be monitored,” Dean writes. The White House readied its basement command post for monitoring demonstrations.

While the government had originally planned to let the Washington, D.C. police handle the protesters, it eventually shifted to a military response, as this summary underscores:

While protesters listened to music, planned their actions or slept, 10,000 Federal troops were quickly moved to various locations in the Washington, D.C. area. At one point, so many soldiers and marines were being moved into the area from bases along the East Coast that troop transports were landing at the rate of one every three minutes at Andrews Air Force Base in suburban Maryland. Among these troops were 4,000 paratroopers from the U.S. 82nd Airborne Division. These troops were to back up the 5,100 D.C. Metropolitan Police, 2,000 D.C. and National Guard that were already in place. Every monument, park and traffic circle in the nation’s capital had troops protecting its perimeters. Paratroopers and marines deployed via helicopter to the grounds of the Washington Monument.

On Sunday, May 2, the government revoked the permit that allowed the 17,500 demonstrators to continue to camp in West Potomac Park (which the demonstrators had renamed Peace Park). Police wearing riot gear knocked down tents, used tear gas and formed a phalanx to force campers out of the park. Some people left Washington, but 10,000 of them regrouped in other parts of the city for the next day’s action.

On May 3, while troops secured intersections and bridges, police swept through the city using tear gas and arresting anyone who looked like a protester. (For a video report, click here.) While many demonstrators were nonviolent, some used trashcans, tree limbs and parked cars to impede traffic. Police dispensed with standard arrest procedures, not even bothering to charge protesters with specific offenses. “Martial law might not have been declared,” Wells writes, “but it was in effect.”

Before the morning was over, 7,000 people were arrested and held behind a fence erected adjacent to RFK stadium. This was the largest number of arrests in a single day in U.S. history. By the afternoon, most federal employees (except those who inadvertently had been arrested) made it to their jobs. Over the next few days, the total number of arrests would grow to 12,614. (Click here to read former government analyst Daniel Ellsberg’s brief account of this event and a follow-up action in Boston in which he and Howard Zinn participated. Ellsberg’s largest contribution to the anti-war movement would become clear less than two weeks later when the New York Times began to publish the top secret Pentagon he had released.)

Four decades on, there are many potential lessons from May 1971 that might be helpful in our own time.

First, Wells’ book convincingly chronicles how the government, even as it often ignored the anti-war movement in public, devoted an enormous amount of time and energy paying attention to it. It worried about the movement’s ability to persuade the nation (and even other parts of the government — for example, 500 Federal Employees for Peace rallied across from the White House during the May Day actions) to end its support for the war.

Second, its massive militarized response to a movement of unarmed citizens emphasizes the lengths to which the U.S. government is willing to go to defend its policies.

Third, the peace movement had succeeded in making a compelling case to the nation that the war must end — polling data at the time confirmed this — which was demonstrated, in part, by the sheer numbers of people that sustained these actions.

Fourth, while the police sweeps and indiscriminate arrests initially posed a potential public-relations problem for the administration (and Wells documents the propaganda counteroffensive Nixon’s people pursued), immediate polling data suggested that public reaction to the May Day actions was decidedly negative, with Wells citing polls showing 71 percent of the public disapproving of them.

This relates to one last lesson that we might especially mull on today. The May Day mobilization turned out to be the last enormous, national anti-Vietnam War event.

There are likely many reasons for this, but one may be the tactics that were used. While the power of May Day 1971 was rooted in the planned dispersal of demonstrators to intersections across the city, this also led to a lack of organization and nonviolent discipline. The government was able to use this to justify its draconian strategy. More significantly, it may have weakened the appeal of mass action for the larger public at a time, ironically, when it increasingly opposed the war.

These lessons may offer food for thought for all May actions, including our own.

Three Years of Immunity for Bad Bankers

Go To Original

Here's a walk down memory lane that's worth taking, even if it makes your blood pressure spike a little: Three years ago Tim Geithner was in the position of having to explain why the Federal government wasn't going to nationalize the nation's failing banks. In 2009 many people expected that to be part of the government's bank rescue plan.

Only three years. It seems so long ago, doesn't it?

In 2009 there was a very compelling argument for a Federal takeover over these failing institutions, which had been so negligently (and very possibly criminally) mismanaged could no longer survive on their own. And while nationalization wasn't the only course worth considering, this snapshot from our national past reflects the gravity of the crisis caused by bankers.

It's also a useful reminder of the extent to which bank CEOs failed to pass even the most basic test of executive competence - namely, not destroying your own corporation.

Three years ago bank CEOs expected that the Administration would take firm measures against them as it rescued and restructured their institutions. That would have been the logical thing to do. After all, an entire set of corporations has failed spectacularly, shattering the global economy and forcing taxpayers to provide them with hundreds of billions of dollars in rescue money.

But no, Geithner told reporters, there were no plans to nationalize these failed, collapsing institutions. Instead Geithner said he was beginning a process he described as ""efforts taken to date to improve transparency and accountability." What else was in the news in early-to-mid 2009?

Three years ago journalists were reviewing Geithner's work history as head of the New York Federal Reserve, and noting some rather dramitic shortcomings in his performance there, like his failure to spot impending doom at Citigroup . That's like being the astronomer on asteroid watch who misses the fact that our planet is about to be struck ... by Jupiter.

Widespread concerns about Geithner's coziness with Wall Street were even being reflected in the comments of nonpolitical observers like Christopher Whalen of Institutional Risk Analytics, who was troubled by his relationship with Goldman Sachs.

Economics and law professor William K. Black was even more blunt in his assessment of Geithner's plans three years ago, saying that Geithner was continuing predecessor Hank Paulson's "policy of violating the law." As Black wrote in February 2009:

"The law mandates that the administration place troubled banks, well before they become insolvent, in receivership, appoint competent managers, and restrain senior executive compensation (i.e., no bonuses and no raises may be paid to them). The law does not provide that the taxpayers are to bail out troubled banks."

But three years later most of those banks' leaders are still in place. Bankers have continued to receive enormous bonuses and raises, despite the fact that Geithner was insisting that the bank bailouts came with firm conditions for the fortunate recipients.

But Geithner insisted things would be different. Here's what Geithner told Jim Lehrer in June 2009:

"You will see conditions to make sure that the support generates more lending than what would have been possible, that the support does not go to pay dividends or excess compensation, to make sure that the conditions come with the kind of changes in the structure of the entity necessary to make them stronger going forward, and they provide accountability.

"You will see conditions to make sure that the support generates more lending than what would have been possible, that the support does not go to pay dividends or excess compensation, to make sure that the conditions come with the kind of changes in the structure of the entity necessary to make them stronger going forward, and they provide accountability."

Since then we've seen three years of soaring bank profitability, as too-big-to-fail banks used bailouts and Federal Reserve largesse to recapture a disproportionate share of the nation's profits, while becoming even more dangerously oversized than ever. We've seen three years of runaway bonuses, thanks to the US taxpayer. We've seen three years without the institutional restructuring that Geithner promised.

And we've seen a three-year lending drought, especially for the individuals and small businesses that are so critical to economic growth.

Here's another exchange with Lehrer, in which Geithner explains that of course the government will not give money to bankers without expecting something in return:

GEITHNER: The government gets an ownership stake in the company proportionate to the level of assistance we're providing.
JIM LEHRER: Just like anybody else would if they bought stock, right?
TIMOTHY GEITHNER: Just like anybody else would if they get stock.

Needless to say, it never happened, and instead we've been given implausible tales that suggest the taxpayer "made money" on the TARP bailout.

Sure, Geithner was talking tough in those days, telling Lehrer:

"I am deeply offended by the quality of judgments we've seen in the leadership of our nation's financial institutions. They've caused a very damaging loss of confidence. Financial systems require confidence; they're built on confidence. They've created a deep hole of public distrust and anger, which is enormously damaging."

That's true of those bank executives, of course. But so's this: With one or two exceptions, they all still have their jobs.

In 2009 Geithner told Lehrer that bank executives "have a huge obligation to try to restore ... basic trust and confidence," adding that "we're going to make sure they do it by making sure that our assistance comes with conditions that will help restore confidence in the American people... "

"We're going to do things that are going to help get credit flowing again," Geithner said, adding: "Nothing we do for banks is for banks. It's all for the benefit of the people that depend on banks -- the businesses, the families, the students -- that require credit in order to do things that are important to their future."

But three years ago it was also being reported that Geithner prevailed over other White House officials, making sure that banks would have no limits on the bonuses they could pay out with taxpayer rescue money, no restrictions or requirements on how they spent the taxpayers' rescue money, and no requirement that failed bank CEOs would be forced to pay for destroying their own institutions and shattering the world economy - not even by losing their jobs.

Three years ago Geithner was appointing a Goldman Sachs lobbyist as his Chief of Staff, even as he told Katie Couric that "of course" he was willing to force bank CEOs to resign.

Geithner was talking tough:

JIM LEHRER: (A)re the bankers and the banking industry, have they gotten your message now? Do they realize there's a new world here for them?


Why dredge up the aggraving stories and frustrating quotes of yesteryear? Because the past is prologue. As we'll see in Part 2, Geithner continues to protect too-big-to-fail bankers. "Immunity" is defined as "the state of being protected from something" - and bankers are even been protect from their own incomptence.

And that's not even the worst of it. This is: On the criminal front, Geithner continues to insist that bankers did nothing illegal in the run-up to the crisis - despite a mountain of evidence to the contrary, and despite that fact that he pushed a deal that brought a number of criminal investigations to a premature end.

The Stall has Arrived

Go To Original

The economy has stalled.

Friday’s jobs report for April was even more disappointing than March. Employers added only 115,000 new jobs, down from March’s number (the Bureau of Labor Statistics revised the March number upward to 154,000, but that’s still abysmal relative to what’s needed). We need well over 250,000 new jobs per month in order to begin to whittle down the vast number of jobs lost in the Great Recession. At least 125,000 new jobs are necessary each month just to keep up with an expanding population of working-age people.

With only 115,000 jobs in April, the hole is getting even deeper.

Most observers pay attention to the official rate of unemployment, which edged down to 8.1 percent in April from 8.2 percent in March. That may sound like progress, but it’s not. The unemployment rate dropped because more people dropped out of the labor force, too discouraged to look for work. The household survey, from which the rate is calculated, counts as “unemployed” only people who are actively looking for work. If you stop looking because the job scene looks hopeless for you, you’re no longer counted.

In the winter months — December, January, and February – hiring had seemed to pick up, averaging over 250,000 new jobs per month. Then the mini-surge stopped. The simplest explanation is that the mild winter across much of the United States gave an unusual boost to hiring then, leading to a correction by the spring.

Most of the job gains in April were in lower-wage industries – retail stores, restaurants, and temporary-help. That means average wages continue to drop, adjusted for inflation – continuing their long-term decline. Most of the new jobs that have been added to the U.S. economy during this recovery have paid less than the jobs that were lost during the downturn.

What does all this mean? Together with other recent data showing slower economic growth during the first quarter of this year, it’s safe to say the economy has stalled.

This is bad news for millions of Americans.

It’s also bad news for Obama and the Democrats. Voters don’t pay much attention to the economy in an election year until after Labor Day, so it’s not necessarily a huge help to Romney and the Republicans. But it’s a bad political omen nonetheless.

No set of policies between now and Election Day are likely to expand the economy. To the contrary, government at all levels continues to contract, acting as a fiscal drag when government needs to be doing the exact reverse – boosting the economy through additional spending. In 2013, when spending major cuts are scheduled, we’ll fall off a fiscal cliff.

Obama needs to push back loudly and clearly, saying he won’t support additional spending cuts until the economy is showing clear signs of improvement.

But widening inequality is the underlying culprit here. As long as almost all the gains from economic growth continue to go to the top, the vast middle class doesn’t have the purchasing power to boost the economy on its own. And rich Americans spend a much smaller portion of their incomes than does the vast middle class. Their marginal satisfaction from additional spending falls off. The second yacht isn’t nearly as much fun as the first.

Get it? We’ve still got a terrible cyclical problem – we can’t get out of the gravitational pull of the Great Recession.

Yet the underlying problem is structural, and it’s been growing for decades. The structural problem of stagnant or declining real incomes for most people, and soaring income and wealth at the top, was masked during the boom years when the middle class could turn their homes into piggy banks and extract home-equity loans or refinance. But the mask came off in 2008 as home values plummeted.

There’s no way to put the mask back on. We’ve got to face the truth. Obama and the Democrats have to explain to the American people why inequality isn’t just unfair; it’s also economically unsustainable.