Saturday, June 2, 2012

Arrested for Living Homeless in Sacramento's Tent City

Go To Original


It's really hard to explain the feeling of powerlessness I felt today. But I guarantee my feelings don't even compare to the feelings of desperation our friends had while police were evicting them from their tents today.

Those of you who have been with me for a bit have heard me say this before, so it's not new. Every now and then I will run into a homeless person that is so interesting to talk to, I could spend days just listening to them. Eli is one of them.

I met Eli about a week ago in a tent city in Sacramento, California. I also met Robert and shared his powerful video about not having any place to go, and Jordan, 19 years-old going to college and living homeless, and a few others you will meet soon.

Eli had his own business doing building remodeling and was an associate minister at a church for over 20 years. Because of the economy he lost everything, and when he shares about losing his books and jazz records, I can feel his pain. I hope you can, too!

"When we had jobs we were important. When we had homes we were important. When we had cars we were important. When we had bank accounts we were important" ~ Eli

Trust me, Eli's interview is very powerful. Please watch it in its entirety. Near the end, when Eli talks about rest being his 3rd wish, and that police keep threatening the campers with arrests, know that Eli stood up for what he believes and went to jail today.

Heartbreaking Pictures From New Jersey's Homeless 'Tent City'

Go TO Original


Doug Hardman wakes up every morning with a song in his heada vague memory of his days on stage.

Inside his tepee in the woods outside Lakewood, NJ, at the homeless Tent City, the roosters wake early and the mornings are already cooler. A musician who lost his Florida home in the housing crisis, Hardman says he floats in and out of Tent City, that he's proud of his kids, and misses the life he no longer has.

He has a lot of company out here.

Tent City made the news recently and while community leader Steven Brigham says the media attention brought in greater donations, it also brought unwanted attention from the local politicians.

After battling with the city for years to have access to the public land here, Brigham found a New Jersey lawyer to represent his case pro bono.

The attorney, Jeff Wild, argued that the homeless population are part of the public and should therefore have access to public lands. Rather than take the case to court, Lakewood City Council settled, and Brigham signed an agreement to put up no more shelters and allow no more than 70 people to stay.

But last winter the community put up three wooden structures to house everyone and keep them warm.

"We didn't lose anybody last year," Brigham says, "and nobody got sick."

This year could be different. After City Council members saw the shelters on TV, they sent demolition crews in. The walls were torn down around whatever was inside, and meager furnishings were left to the elements.

This year, the tent city's residents will have to put wood-stoves in tents and plastic shanties, increasing fire risk. Brigham says the town is making it impossible to survive there, hoping to get the homeless out, and he's concerned it will end up killing people this year.

More than 700,000 people are currently homeless in the U.S. and the number has grown 20 percent from 2007 to 2010.

A recent UN report says the way the U.S. denies its citizens access to water, basic sanitation, and criminalizes homelessness is a violation of the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights.

Brigham can relate. He started the camp five years ago and more people show up every year. Some stay, some find part-time work where they can, move on, and wind up coming back.

"There's a real glut of low-skilled manual labor in the area," he says. "There's just nothing for people to do."

Brigham works as a high-voltage electrical contractor on the bridges and tunnels around New York, but his mission is here in the Lakewood forest.

"I found this spot that had no underbrush, which is very unusual," he says, "and this community's become a living protest."

I ask him what he means, and he says, "We're protesting the insincerity of the political system. It's supposed to be for the people and its not."

GOP Groups Plan $1 Billion Blitz

Go To Original

Republican super PACs and other outside groups shaped by a loose network of prominent conservatives – including Karl Rove, the Koch brothers and Tom Donohue of the U.S. Chamber of Commerce – plan to spend roughly $1 billion on November’s elections for the White House and control of Congress, according to officials familiar with the groups’ internal operations.

That total includes previously undisclosed plans for newly aggressive spending by the Koch brothers, who are steering funding to build sophisticated, county-by-county operations in key states. POLITICO has learned that Koch-related organizations plan to spend about $400 million ahead of the 2012 elections - twice what they had been expected to commit.

Just the spending linked to the Koch network is more than the $370 million that John McCain raised for his entire presidential campaign four years ago. And the $1 billion total surpasses the $750 million that Barack Obama, one of the most prolific fundraisers ever, collected for his 2008 campaign.

(PHOTOS: Republican money men)

Restore Our Future, the super PAC supporting Mitt Romney, proved its potency by spending nearly $50 million in the primaries. Now able to entice big donors with a neck-and-neck general election, the group is likely to meet its new goal of spending $100 million more.

And American Crossroads and the affiliated Crossroads GPS, the groups that Rove and Ed Gillespie helped conceive and raise cash for, are expected to ante up $300 million, giving the two-year-old organization one of the election’s loudest voices.

“The intensity on the right is white-hot,” said Steven Law, president of American Crossroads and Crossroads GPS. “We just can’t leave anything in the locker room. And there is a greater willingness to cooperate and share information among outside groups on the center-right.”

In targeted states, the groups’ activities will include TV, radio and digital advertising; voter-turnout work; mail and phone appeals; and absentee- and early-ballot drives.

The $1 billion in outside money is in addition to the traditional party apparatus – the Romney campaign and the Republican National Committee – which together intend to raise at least $800 million.

The Republican financial plans are unlike anything seen before in American politics. If the GOP groups hit their targets, they likely could outspend their liberal adversaries by at least two-to-one, according to officials involved in the budgeting for outside groups on the right and left.

By contrast, Priorities USA Action, the super PAC supporting President Barack Obama’s reelection, has struggled to raise money, and now hopes to spend about $100 million. Obama’s initial reluctance to embrace such groups constrained fundraising on the Democratic side, which is now trying to make up for lost time.

Labor could add another $200 million to $400 million in Democratic backing.

The consequences of the conservative resurgence in fundraising are profound. If it holds, Romney and his allies will likely outraise and outspend Obama this fall, a once-unthinkable proposition. The surge has increased the urgency of the Democrats’ thus-far futile efforts to blunt the effects of a pair of 2010 federal court rulings – including the Supreme Court’s seminal Citizens United decision – that opened the floodgates for limitless spending, and prompted Obama to flip-flop on his resistance to super PACs on the left.

“We’re not making any attempt to match American Crossroads or any of those groups with television ads,” said Michael Podhorzer, political director for the AFL-CIO. Instead, much of labor’s money will be spent on talking directly with union members and other workers.

“Progressives can’t match all the money going into the system right now because of Citizens United, so we have to have a program that empowers the worker movement,” Podhorzer said.

Much of the public focus has been on how these outside groups will tilt the balance of power in fundraising at the presidential level. But POLITICO has learned that Republicans involved with the groups see the combined efforts playing out just as aggressively at the congressional level, in below-the-radar efforts designed to damage Democratic candidates for the House and Senate.

The officials said that if Romney looks weak in the final stretch, the vast majority of the money could be aimed at winning back the Senate. Republicans need four seats to do that, if Obama is re-elected.

Republicans have taken one big lesson away from campaigns conducted to date in 2011 and 2012: outside money can be the difference-maker in elections.

It was outside money from casino magnate Sheldon Adelson that single-handedly kept Newt Gingrich afloat against Romney. A super PAC spending surge fueled by Wyoming mutual fund guru Foster Friess was credited with powering Rick Santorum to an upset win in the Iowa caucuses. And outside money has helped lift tea party challengers past incumbents like Sen. Richard Lugar (R-Ind.) in this year’s primaries.

Restore Our Future, the pro-Romney super PAC, spent twice as much on the air as the campaign did in the thick of the primaries: Through March, the campaign had put $16.7 million into TV, while ROF shelled out $33.2 million.

In Florida, the super PAC outspent the campaign, $8.8 million to $6.7 million. (The campaign can get more spots per dollar because of more favorable rates.) In Michigan, it was $2.3 million to $1.5 million. In Ohio, ROF outspent the campaign, $2.3 million to $1.5 million.

Now Republicans are applying this approach - on steroids - to the remainder of the campaign:

—Groups affiliated with Charles and David Koch, the billionaire industrialists who are among the biggest behind-the-scenes players in Republican politics, will spend the most of any outside outfit on either side: roughly $395 million for issue and political advocacy by groups they support – twice the amount they previously had been expected to commit.

“People are energized because the future of our country and economy is at stake,” said an ally familiar with the Koch effort.

The flagship group in the Koch network is Americans for Prosperity, which gets about half its funds from other donors.

— American Crossroads and Crossroads Grassroots Policy Strategies (GPS) plan to do about two-thirds of their spending on advocacy related to the presidential race, and the rest relating to House and Senate races. Crossroads (a super PAC) was founded in April 2010, Crossroads GPS (a 501(c)4 non-profit group) started the next month.

—The U.S. Chamber of Commerce has a goal of $100 million, according to outsiders familiar with the plans. All of that will be focused on congressional races, with the House as the top priority – what organizers call “the first insurance policy” if Obama were to get reelected.

But the Chamber’s message, which includes attacks on Obama’s health-care plan, can be expected to help Romney in several states with competitive Senate races that are also presidential battlegrounds – Florida, Ohio, Virginia, New Mexico, Nevada and Wisconsin.

—The YG Action Fund, the super PAC started by aides of the two self-styled “Young Guns” – House Republican Leader Eric Cantor (R-Va.) and House Republican Whip Kevin McCarthy (R-Calif.) — has a goal of raising about $30 million, including the YG Network.

—American Action Network, chaired by former senator Norm Coleman, raised about $30 million in the 2010 election cycle and is likely to try to at least match that amount in 2012, with most of that going toward congressional races.

—The Congressional Leadership Fund, a super PAC supported by Speaker John Boehner (R-Ohio) and other House GOP leaders, has reported raising $5 million so far.

—The pro-Romney super PAC, Restore Our Future, is likely to raise $50 million to $100 million for the general election. “They saw that the spending worked before, and with the race this competitive, it will be even easier for them to raise money now,” said a source close to the group.

Charlie Spies, co-founder and counsel of Restore Our Future, said: “While there are multiple other groups doing important work to assist Republicans up and down the ticket, ROF is the only group dedicated solely to electing Mitt Romney, and targeting every dollar that we raise towards supporting him. ROF will spend our resources fighting back against the Obama team’s distortions and smears.”

—FreedomWorks, the Dick Armey-led tea party outfit that has backed challengers in GOP congressional primaries, is expected to spend $30 million or more on issue advocacy, campaign ads and organizing — between its super PAC and 501(c)4.

—The Republican Jewish Coalition, a 501(c)4 group that works closely with the Crossroads outfits and the American Action Network, plans to spend more than $6 million on “the largest, most expensive, most sophisticated outreach effort ever undertaken in the Jewish community,” according to a source familiar with its plans.

—Club for Growth plans spending in congressional races but does not reveal totals.

It’s important to step back for a moment to understand the currents racing through the money chase right now. Republicans, back in the era of soft money, dominated fundraising, thanks in large part to big business donors. But when soft money was outlawed in 2002, a lot of business donors got uneasy about feeding their money through outside groups. Many sat out. At the same time, liberals got into the business of using tax-exempt and other groups to build their own web of think tanks, media monitors, vote-trackers and advocacy groups to influence politics. Rich liberals such as George Soros and union leaders funded much of it.

By the time 2008 rolled around, Obama and the Democrats were rolling over Republicans in the race for campaign cash raised in limited chunks, and Obama largely discouraged big-money outside efforts. Things have changed rapidly – and, in some respects, radically — since then.

First, Citizens United made it easy and less risky for rich donors to get back in the game. Second, a subsequent lower court case paved the way for the creation of super PACs, giving mega-donors arguably the most effective vehicle for funding ads in the modern campaign finance era. Third and perhaps most important, Obama scared many free-market millionaires into action with what they perceive as his outright hostility to capitalism.

Obama uses Memorial Day speech to rehabilitate Vietnam War

Go To Original

President Barack Obama chose the Vietnam Memorial in Washington, DC as the site for a Memorial Day speech in which he sought to rehabilitate the Vietnam War.

The speech was timed to coincide with the 50th anniversary of the first time US forces were deployed in a major combat operation inside the country in 1962, and served to kick off what is projected as a 13-year-long commemoration of that war. The commemoration, mandated by the US Congress, is being orchestrated by the Defense Department.

The appearance dovetailed with the Obama campaign’s efforts to identify the Democratic president with the armed forces and militarism in order to outflank his Republican rival from the right. It served a deeper purpose, however. Exorcising the ghosts of Vietnam has been a burning objective of America’s ruling class for nearly four decades.

At the heart of Obama’s speech was the hoary and reactionary myth that the approximately 1.5 million troops who saw combat in Vietnam were treated as pariahs and excoriated as war criminals and “baby killers” by the broad sections of the population that opposed the war.

“You were often blamed for a war you didn’t start, when you should have been commended for serving your country with valor,” Obama told the crowd, which included a number of Vietnam veterans, assembled in front of the wall bearing the names of nearly 60,000 US troops killed in the war.

“You came home and sometimes were denigrated, when you should have been celebrated. It was a national shame, a disgrace that should have never happened. And that’s why here today we resolve that it will not happen again,” the president continued.

The “national shame” and “disgrace” that earned the United States the hatred of hundreds of millions of people around the world was the war itself, a genocidal enterprise that took the lives of some 4 million Vietnamese.

In a flight of rhetorical fancy, Obama insisted that America must “celebrate” key battles of Vietnam on a par with the Normandy invasion or the battle for Iwo Jima during World War II. Among the specific episodes he cited was “Rolling Thunder,” the 1965 to 1968 bombing campaign against North Vietnam that dropped 864,000 tons of high explosives on the impoverished former colonial country. It killed, according to the CIA’s undoubtedly conservative estimates, 90,000 Vietnamese, 72,000 of whom were civilians. This savage bombardment, which destroyed schools, hospitals and villages, was one of the many war crimes perpetrated by US imperialism in over a decade of war.

Obama’s narrative ignored the reality that large numbers of US troops in Vietnam opposed the war. Among those who returned, not a small number joined the massive demonstrations demanding the withdrawal of US troops. Deep-going dissension among the troops in Vietnam led to widespread incidents of “fragging” [grenade attacks] on overly zealous commanding officers and other acts of overt rebellion that hastened the war’s end, as Washington feared losing control of its own army.

The lie that the mistreatment of veterans was the fault of a misguided public, or more pointedly of the antiwar movement, serves to cover up the reality that the government itself was to blame. Having subjected troops sent into combat to horrific conditions, it received the hundreds of thousands who returned suffering physical and mental wounds with callous indifference and inadequate support.

Obama insisted that “because of the hard lessons of Vietnam” we “take care of our veterans better.” However, the principal lesson learned by the US ruling establishment was that a conscript army posed unacceptable dangers of popular democratic and antiwar sentiments seeping into America’s war machine. It therefore moved to an “all volunteer” military. Volunteer or conscript, however, both then and now, troops have been treated as cannon fodder and disposable commodities.

Among the indices of the supposedly “better” conditions for US military personnel returning from Iraq and Afghanistan is an unemployment rate last year of 12.1 percent, with the jobless rate of those recently returned at nearly 30 percent. Some 75,000 veterans are homeless on any given night, while 1.5 million live in poverty. An estimated 300,000 veterans of America’s two most recent wars are returning home with Post Traumatic Stress Disorder (PTSD) or traumatic brain injuries. On average, 18 veterans a day are taking their own lives.

Obama said the 50th anniversary commemorations he was inaugurating with his speech would give Washington “another chance to set the record straight” on Vietnam. “This is one more way we keep perfecting our Union—setting the record straight.”

On the contrary, Obama’s aim is to facilitate the falsification of history so as to whitewash the crimes of American imperialism.

The official campaign will not provide some new insight into the past or a more truthful account of the Vietnam War and its horrors. It will instead seek to exploit sympathy for veterans to exonerate the criminals in the White House, the CIA and the Pentagon responsible for slaughtering millions. For nearly 40 years, the US ruling class has sought to bury and sanitize a history that ties it to the worst war crimes since the fall of the Nazis.

It is also an attempt to shatter the deep-seated hostility to wars of aggression that was the key domestic legacy of US imperialism’s debacle in Vietnam. This has been an objective of US presidents from Richard Nixon on: to erase the memory of a US imperialist defeat under conditions of mass opposition and social struggles at home. It was George H.W. Bush who, at the end of the 1991 Gulf War, triumphantly proclaimed, “By God, we've kicked the Vietnam syndrome once and for all!"

The two wars launched in the aftermath of 9/11, however, proved such triumphalism to be unjustified. Hostility to both wars grew steadily, and today polls show popular opposition to the war in Afghanistan at 66 percent, just above the record high of 65 percent against the Vietnam War in 1971.

Toward the end of his remarks, Obama declared that “honoring Vietnam veterans” means “never forgetting the lessons of that war.”

What are those lessons? According to Obama, they are the need for “a clear mission,” a “sound strategy,” giving the military “the equipment they need to get the job done,” and the resolve that when sending troops to fight, “We will have their backs.”

These are the conclusion of a Democratic president who was swept into office largely on a wave of hostility to the wars begun by his Republican predecessor, George W. Bush. They suggest that had the US military been equipped with the proper mission, strategy and equipment—nuclear weapons?—it could have prevailed in Vietnam. There is the clear implication that the US defeat resulted from a “stab in the back” by an unworthy population and defeatist politicians—an echo of the infamous theory promoted by the Nazis after Germany’s defeat in World War I.

For decades, the Democratic Party has beat a cowardly retreat in the face of Republican accusations that its anti-war wing was responsible for the defeat in Vietnam. Obama, it appears, is determined to adopt the Republican indictment as his own.

Obama’s Memorial Day speech makes it clear once again that his administration is an instrument of Wall Street and the US military and intelligence apparatus. The deeply reactionary and dishonest speech must be taken as a warning. If America’s ruling establishment is determined to rehabilitate the Vietnam War it is because it wants to prepare public opinion for even bloodier wars and more horrific crimes.

Germany’s Six-Point Plan For Sweatshop Europe

GO To Original

It is now common practice to smash up wages and workers’ rights by initiating bankruptcy proceedings. The best known case is the American auto giant General Motors, which laid off 30,000 workers, slashed wages in half for new-hires, and cut retiree benefits. If the German government gets its way, this procedure will be applied to entire countries.

According to a report in the news magazine Der Spiegel, the chancellery in Berlin has drawn up a six-point plan for far-reaching “structural reforms” in Greece and other highly indebted European Union countries. The plan includes the sale of state enterprises, the gutting of employment protection rights, the promotion of a low-wage labor sector, the removal of constraints on businesses, and the establishment of special economic zones and privatization agencies modeled on the German Treuhand.

German government spokesman Steffen Seibert has not confirmed the plan, but neither has he denied it. According to Der Spiegel, it will form the basis for negotiations at the European Union’s so-called “growth summit” in late June. Der Spiegel writes that Chancellor Angela Merkel will seize on the call for a growth policy by newly elected French President Francois Hollande, “applying the principle of judo fighters: employing the momentum of the opponent to mount one’s own attack.”

If Merkel gets her way, “growth” will be achieved entirely through the intensified exploitation of workers and not through any plan for economic revival or increased social expenditures. She assumes Hollande will be open to these proposals since the EU summit will take place after the June 17 French parliamentary elections and the new French president will no longer be constrained by voters’ opinions or his own campaign promises.

The German government is striving to impose levels of exploitation similar to those currently existing only in Eastern Europe and Asian cheap-labor havens such as China and Vietnam. Special economic zones have played a crucial role in the emergence of China as the world’s biggest sweatshop. These zones free companies from paying taxes or adhering to environmental regulations and labor standards, reducing workers to the status of impoverished industrial slaves.

The model for the privatization agencies recommended by the experts in the chancellor’s office is the Treuhand, which obliterated the industrial landscape of East Germany following the collapse of the Stalinist regime in 1989. Run by hand-picked confidants of big business and the banks and not answerable to any democratic bodies, the Treuhand decided the fate of millions. It sold off 8,500 companies with 45,000 facilities at fire-sale prices or simply shut them down. Only a small fraction of the original 4 million industrial jobs remained.

The six-point plan drawn up by the chancellery is incompatible with national sovereignty or democracy. The newspaper Tagesspiegel interviewed several German economic experts who were brutally frank in expressing their views on the future prospects for Greece.

Thomas Straubhaar, director of the Hamburg Institute of International Economics, called for the establishment of a “European protectorate” over Greece. He said that whatever the outcome of the upcoming June 17 elections in Greece, the country remained a “failed state,” lacking “the strength to make a fresh start on its own.”

The term “protectorate” evokes ghastly memories. British imperialism referred to its former colonies as protectorates when it permitted local puppets, as in Egypt and several Gulf sheikdoms, to play at being heads of state. In run-up to World War II the term became infamous following the Nazi occupation of Czechoslovakia and establishment of the Protectorate of Bohemia and Moravia.

The fact that this term is re-introduced into the official vocabulary reveals what the ruling circles of Germany and Europe have in mind. The debate on special economic zones and protectorates takes place against the backdrop of a worsening economic crisis.

As a result of the austerity program dictated by the troika—EU, the International Monetary Fund (IMF) and the European Central Bank (ECB)—the Greek economy is in free-fall. The country is now in its fifth year of recession. Small and medium-sized companies are collapsing. This year alone their business association expects 61,000 firms to close, wiping out 240,000 jobs. The tourism industry, which accounts for one in five Greek jobs, has seen its revenues decline by 45 percent in the past year.

The country’s banks face collapse because borrowers can no longer repay their loans and both investors and depositors are withdrawing their money. Experts speak of a “slow motion” run on the banks that threatens to spill over to Spain and Italy. Since the beginning of the crisis, private citizens and businesses have withdrawn 63 billion euros from Greek accounts, i.e., one third of total deposits. Since the middle of last year, 100 billion euros have been withdrawn from Spanish banks and 160 billion euros from banks in Italy.

Under these circumstances, the ruling class is concluding that it can no longer afford the luxury of democracy. Leading officials such as German Finance Minister Wolfgang Schäuble and IMF chief Christine Lagarde are threatening the Greek people with immediate state bankruptcy if they vote on June 17 in favor of parties calling for a softening of the austerity policies dictated by the banks via the troika.

At the same time, the European Union is preparing for Greek national bankruptcy and the exit of Greece from the euro. The Euro Working Group, a committee of the finance ministries of all 17 euro countries, has instructed all governments to prepare emergency plans for a Greek euro exit. In Greece itself, the ruling class is secretly drawing up plans to use the military to crush popular opposition to the austerity measures.

Greece makes clear what confronts the working class throughout Europe. Nearly four years after the eruption of the global financial crisis, democratic structures are collapsing and the representatives of the financial and corporate elite are defending their rule by endless attacks on wages, jobs and social programs.

Global CO2 Emissions Hit New Record in 2011, Keeping World on Track for 'Devastating' 11°F Warming

Go To Original

First the bad news from the International Energy Agency (IEA). Thanks to a huge jump in Chinese emissions, “global carbon-dioxide (CO2) emissions from fossil-fuel combustion reached a record high of 31.6 gigatonnes (Gt) in 2011.”

The worse news is that, “The new data provide further evidence that the door to a 2°C trajectory is about to close,” according to IEA Chief Economist Fatih Birol. Why does that matter? As Reuters reported:

Scientists say ensuring global average temperatures this century do not rise more than 2 degrees Celsius above pre-industrial levels is needed to limit devastating climate effects like crop failure and melting glaciers.

Darn you truth-telling scientists, always ruining the party (see “James Hansen Is Correct About Catastrophic Projections For U.S. Drought If We Don’t Act Now“).

And the worst news, as Birol told Reuters, is that:

“When I look at this data, the trend is perfectly in line with a temperature increase of 6 degrees Celsius [11°F], which would have devastating consequences for the planet.”

As Birol said of 11°F warming late last year, “Even School Children Know This Will Have Catastrophic Implications for All of Us.” If only school children ran the country.

In fact, the scientific literature now makes clear that even 4°C (7°F) warming would destroy the livable climate 7 billion people have come to depend upon (see “An Illustrated Guide to the Science of Global Warming Impacts: How We Know Inaction Is the Gravest Threat Humanity Faces“).

So what is the ‘good’ news? We have has been reducing our emissions:

CO2 emissions in the United States in 2011 fell by 92 Mt, or 1.7%, primarily due to ongoing switching from coal to natural gas in power generation and an exceptionally mild winter, which reduced the demand for space heating. US emissions have now fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions. This development has arisen from lower oil use in the transport sector (linked to efficiency improvements, higher oil prices and the economic downturn which has cut vehicle miles travelled) and a substantial shift from coal to gas in the power sector.

Actually, the change in vehicle miles traveled (VMT) predated the downturn. VMT “began to plateau as far back as 2004 and dropped in 2007 for the first time since 1980,” as Brookings has reported. Indeed, per capita driving saw “flat-lining growth after 2000 and falling rates since 2005.”

The point is that given Obama’s strong new fuel economy standards and the reality of peak oil (that high oil prices are here to stay absent a global depression), the U.S. could meet its Copenhagen target of a 17% reduction in CO2 from 2005 levels with a pretty modest carbon tax (see “Bipartisan Support Grows for Carbon Price as Part of Debt Deal“). And that is the prerequisite for a global deal that would take us off the 6C path and give us a fighting chance at 2C.

5 Reasons the 'Geezer Empire' of Billionaire Republicans Are Showering Romney With Cash

Go To Original


What would the world be like if the Republican Party’s most influential billionaire backers got their way—if “the geezer empire struck back,” as New York magazine writer Frank Rich put it in a recent piece about this posse of unbelievably wealthy white men who have written million-dollar checks to GOP super PACs and non-profits in 2012.
Beyond the usual GOP jeremiads—cutting taxes and government spending, shredding safety nets, eviscerating federal regulation and privatizing whatever remains—many of the GOP’s biggest moneymen have specific issues and goals, often business-related, and would expect a Romney presidency to advance those agendas.
There is no shortage of amazing reporting on top GOP donors, such as Rich’s overview of these "Sugar Daddies" or The New Republic’s profile of 80-year-old Harold Simmons. Add in reports from watchdogs, such as the Sunlight Foundation Reporting Group, and what emerges is a jaw-dropping class of mega-wealthy, alpha-male vulture capitalists who would barely blink at the human or environmental consequences of cashing out.
The 2012 campaign has been awash in Republican billionaires who have discovered they can write checks—small for them at just a million or two—and are fawned over by political consultants urging them to go for the jugular. Chicago Cubs owner Joe Ricketts is one such political newcomer. He backed off a $10 million race-baiting plan to smear Obama with remarks by his former pastor, but is now investing in a movie where the guilt-by-association is tied to Obama’s absentee Kenyan father.
Other newcomers include William Koch, an avid sailor who has opposed a wind turbine farm off Cape Cod and now grouses about Obama being too regulation friendly, even as the New York Times editorializes that his record reining in corporate excesses is “mediocre.”
These all-too-predictable political screeds and their billionaire promoters appear as babes in the political woods, actually, when compared to the GOP’s more seasoned big moneymen who have used campaign cash and lobbying to win government intervention on behalf of their private fortunes. In contrast to fulminations against Obama’s anti-colonial heritage or supposedly anti-capitalist inclinations, several billionaire Republicans know exactly why they are investing in Mitt Romney.
1. Irradiate North America’s Biggest Aquifer?

Harold Simmons has come a long way from his hardscrabble rural Texas roots and schoolteacher parents. In March, he told the Wall Street Journal in a rare interview that he, his wife and his companies had given nearly $19 million to various GOP political committees and that figure might double by November. He didn’t reveal much besides predictably calling Obama a socialist and “the most dangerous American alive,” and saying that he was pro-choice.
For decades, Simmons has been buying and selling companies, running into government regulators and unions along the way, and more often than not stubbornly overcoming his opponents—through paying campaign donations, lobbying and changing laws. In 1995, he became involved with a project to create a nuclear waste dump in Andrews County in West Texas. Last year, after Texas’ legislature passed a bill to allow 36 states to dump low-level waste, Forbes reported that his stake in the project jumped from $5 billion to $9.6 billion.
Simmons is hoping that the Nuclear Regulatory Commission will allow the site to start accepting high-grade radioactive waste from power plants and the military. In 2006, the company won a state environmental permit, after it spent six years not only changing Texas law to allow it to proceed, but steamrolling state environmental geologists who worried the project would leak into the Ogallala Aquifer, North America’s largest.
“Perhaps the nuclear waste business is all that’s driving Simmons’s interest in the 2012 election,” speculated TNR’s Charles Homans. “Or perhaps it is a belief that a federal government run by a now-vehemently anti-regulation GOP will look forgivingly on his other heavy industrial properties, which one day could find themselves liable for toxic leftovers.”
2. Push Climate Change To Point of No Return?

The Koch brothers and their fossil fuel empire have been the left’s poster boys for climate change deniers, anti-unionism and bare-knuckles political brawls for years. But they are hardly the only energy billionaires backing the GOP and Mitt Romney. Harold Hamm, an Oklahoma oil billionaire who gave $985,000 to a pro-Romney super PAC in March, also was appointed head of the Romney campaign’s energy policy group.
Hamm, whose personal holdings are worth $11 billion according to Forbes, not only has been dismissive of Obama’s “low-pollution green energy" policies, as the Tulsa World newspaper put it, but has been an early and leading developer of natural gas fracking in North Dakota and Montana, as well as a persistent critic of delaying the construction of the Keystone XL pipeline. The project would enable energy firms to open up Canadian tar sands operations that would release tremendous amounts of carbon.
The Romney “energy agenda” includes, the campaign Web site says, opening “America’s energy reserves to development,” preventing “overregulation of shale gas development and extraction,” amending “the Clean Air Act to exclude carbon dioxide from its purview” and expanding NRC “capabilities for approval of additional nuclear reactor designs.”
Environmentalists have plenty to worry about with possible Obama administration approval of the Keystone XL pipeline should he be re-elected. But under a Romney administration guided by the likes of Hamm and Simmons, the potential damage to America’s drinking water reserves and the Earth’s atmosphere could last eons.
3. Push Worldwide Recession into Worldwide Depression.

During the GOP primaries, both Newt Gingrich and Texas Gov. Rick Perry took aim at Mitt Romney’s record at Bain Capital, which Perry called “vulture capitalism,” as opposed to venture capitalism, where the investors help start-ups that they hope will grow and prosper.
There’s no shortage of investment managers supporting Romney, especially from Bain, which is among the biggest donors to the pro-Romney super PAC, Restore Our Future. As Thomas Edsall recently wrote in his New York Times column, “if Mitt Romney’s campaign and the Romney-supporting super PAC Restore Our Future were a public company, the financial services industry would have a controlling interest.”
Perhaps Edsall exaggerates, as only 42.5 percent of the $56.4 million donated to Restore Our Future is from “people and corporations in finance.” Their agenda, he says, is to repeal the Dodd-Frank regulatory act passed after the equities market collapsed in 2008, weaken the Sarbanes-Oxley Act of 2002—passed after Enron’s bankruptcy—and to cut overall tax rates, maintain current rates for investments, and repeal estate taxes.
The Obama campaign and Democrats have also received plenty of money from Wall Street. However, among the GOP’s million-dollar super PAC donors are some men with more specific agendas who feel that electing Romney would be electing a kindred spirit.
No one stands out more so in this regard than New York City’s Paul Singer—as does his way of making money at his hedge fund, which is worth $19 billion, according to Fortune. At Bain, Romney bought companies. Singer, who also has given nearly $10 million to groups and campaigns supporting gay rights, buys countries.
More specifically, he buys government debt from countries in economic distress—for pennies on the dollar—and then uses legal hardball to collect as much as he can. Singer has wrung tens of millions of dollars per transaction from some of the world’s poorest counties, nations where children stand on street corners hawking baggies of water for a penny instead of going to dilapidated schools.
Singer’s firm owns Argentine bonds with a face value of $630 million that he says are now worth $2.3 billion with interest, according to court documents—where he has won judgments but has not yet been able to repossess Argentine assets. As Spanish bank credit ratings fell last week, raising the possibility that a Eurozone debt crisis will erupt with global ripples, Singer sees similar “opportunity” in Europe “in such periods of market tumult,” according to Fortune, quoting from one of his late 2011 newsletters.
Singer clearly wants a man in the White House who will let the market chips fall as they might, regardless of human impact, because that is the cost of doing business. As Frank Rich wrote in New York magazine, “Mitt’s coterie of Wall Street vulture capitalists is second to none in rapaciousness—starting with the hedge-fund gambler John Paulson, who collaborated with Goldman Sachs on his megabet against the entire American housing industry before the crash. Another Romney hedge-fund patron, Paul Singer, is notorious for slick trafficking in Third World debt, with results that leave the destitute masses of countries in far sadder state than the hapless Goldman clients.”
4. Consumer Protections? What Consumer Protections?

Last week, the Federal Trade Commission announced that POM Wonderful had engaged in deceptive advertising for health claims surrounding its fruit-based products, according to a decision by an administrative law judge. POM seized on another part of the ruling and launched an advertising campaign trumpeting the ruling as a triumph—raising eyebrows in legal circles as an audacious act taunting the FTC.
But such hype is standard fare among another cadre of Romney’s billionaire donors: men who have made fortunes by multi-level marketing schemes where the cost to join often exceeds income—based on similar over-promises that has prompted a handful of state attorneys general to sue alleging these plans were little more than pyramid schemes.
Steven Lund, an executive at Utah-based Nu Skin, which settled out of court, is a million-dollar donor to Romney’s super PAC. So is Frank VanderSloot, whose Idaho-based Melaleuca, another multi-level marketing firm, has a Web site featuring a woman saying she earned half a million dollars, but according to Mother Jones magazine, the average income can be under $100. Romney has praised VanderSloot for his “vision” and “social responsibility,” although he also is known in Idaho for his anti-gay rights campaigns.
In Romney’s proto-capitalistic world, prizes go to the winners at the top of the income pyramid. That same attitude can be found with one more corner of the top GOP donors—only this time the goals are far more ideological, and the stakes are higher because they are fanning the Israel-Palestinian conflict.
5. Supporting Israel’s Most Extreme Right-Wingers.

It's well known that Las Vegas casino owner Sheldeon Adelson, whose family has given more than $20 million to Newt Gingrich’s super PACs, has called the Palestinians an “invented people” and has based much of his support on Gingrich’s hard-line stances supporting Israel. But another million-dollar donor to a Romney super PAC is Irving Moskowitz, a physician-turned-hospital owner who has channeled one unexpected area of business profits—bingo parlors—into buying West Bank land for Jewish settlers.
Moskowitz has a foundation that runs the parlors in California, where the income is used to finance Israeli settler housing developments in Arab areas in East Jerusalem. Adelson owns one of Israel’s largest free newspapers, which supports the government’s hard-line stance toward Palestinians. But a one-man colonial empire is not just eyebrow raising, it’s incendiary—fomenting hatred on the ground that is not going away anytime soon.
The GOP’s billionaire donors—all white, wealthy men and patriarchs heading their own empires—have a lot in common. They know no rules other than doing whatever it takes to win. They don’t take no for an answer. They keep at it until they get what they want. And they see Mitt Romney as a kindred spirit who shares their values and will get the federal government to step in, or step aside, to help them secure their next fortune.

Bank Of England Prepares Plans For Euro Collapse

The Bank of England is poised to cut interest rates or launch another round of quantitative easing if the euro collapses, it emerged on Monday.

Go To Original

A senior official for the Bank said the measures would "again play [their] part in mitigating the impact" of Greece or other countries leaving the single currency.

The comments come after the head of the IMF suggested last week that British interest rates may have to be cut to zero if the economic situation deteriorates.

The Bank has already completed a quantitative easing programme, effectively printing more money worth £325billion and this may be extended again.

Yesterday, David Cameron hosted a meeting with Sir Mervyn King, Governor of the Bank; Lord Turner, the chairman of the Financial Services Authority; and the Chancellor, to discuss contingency plans to deal with the collapse of the euro.

There is growing speculation that Greece may be forced out of the euro following new elections next month, if a coalition government cannot be formed that will back austerity measures.

In Britain, ministers have already overseen extensive contingency planning to prepare for the possible impact of the break–up of the euro. This extends from asking banks to insure their holdings in Greece to considering new border controls to prevent a wave of immigration from beleaguered European economies.

A disorderly eurozone break–up could spark another deep recession comparable to that caused by the banking crisis.

Yesterday, Dr Ben Broadbent, a member of the Bank's monetary policy committee and former Treasury adviser, said that the Bank was ready to intervene.

He said: "Were the still unlikely worst case risks in the euro area actually to be realised, then our own monetary policy would again play its part in mitigating the impact."

But he added: "While they are both necessary and effective, these domestic interventions have their limits. It remains the case that, for the time being at least, the most important policy decisions affecting the UK are being taken in other parts of the continent.

"Fears have increased of a rare but bad economic outcome. These heightened fears may already have been affecting the growth of UK activity, investment and productivity for some time."

The economist also indicated that the financial markets may already be overreacting to events in Europe.

"Markets and businesses possess 'animal spirits' and can overreact to events," Dr Broadbent said. "They may have done so again."

Yesterday, the Greek government announced another €18 billion (£14.4 billion) of funding for the country's beleaguered banks. The Spanish government reiterated assurances that it did not require an international bail–out, despite this now being seen as inevitable by many financial experts

Globalizing the Global War on Terror

Go To Original

As he campaigns for reelection, President Obama periodically reminds audiences of his success in terminating the deeply unpopular Iraq War. With fingers crossed for luck, he vows to do the same with the equally unpopular war in Afghanistan. If not exactly a peacemaker, our Nobel Peace Prize-winning president can (with some justification) at least claim credit for being a war-ender.

Yet when it comes to military policy, the Obama administration’s success in shutting down wars conducted in plain sight tells only half the story, and the lesser half at that. More significant has been this president’s enthusiasm for instigating or expanding secret wars, those conducted out of sight and by commandos.

President Franklin Roosevelt may not have invented the airplane, but during World War II he transformed strategic bombing into one of the principal emblems of the reigning American way of war. General Dwight D. Eisenhower had nothing to do with the Manhattan Project that developed the atomic bomb. Yet, as president, Ike’s strategy of Massive Retaliation made nukes the centerpiece of U.S. national security policy.

So, too, with Barack Obama and special operations forces. The U.S. Special Operations Command (USSOCOM) with its constituent operating forces -- Green Berets, Army Rangers, Navy SEALs, and the like -- predated his presidency by decades. Yet it is only on Obama’s watch that these secret warriors have reached the pinnacle of the U.S. military’s prestige hierarchy.

John F. Kennedy famously gave the Green Berets their distinctive headgear. Obama has endowed the whole special operations “community” with something less decorative but far more important: privileged status that provides special operators with maximum autonomy while insulating them from the vagaries of politics, budgetary or otherwise. Congress may yet require the Pentagon to undertake some (very modest) belt-tightening, but one thing’s for sure: no one is going to tell USSOCOM to go on a diet. What the special ops types want, they will get, with few questions asked -- and virtually none of those few posed in public.

Since 9/11, USSOCOM’s budget hasquadrupled. The special operations order of battle has expanded accordingly. At present, there are an estimated 66,000 uniformed and civilian personnel on the rolls, a doubling in size since 2001 with further growth projected. Yet this expansion had already begun under Obama’s predecessor. His essential contribution has been to broaden the special ops mandate. As one observer put it, the Obama White House let Special Operations Command “off the leash.”

As a consequence, USSOCOM assets today go more places and undertake more missions while enjoying greater freedom of action than ever before. After a decade in which Iraq and Afghanistan absorbed the lion’s share of the attention, hitherto neglected swaths of Africa, Asia, and Latin America are receiving greater scrutiny. Already operating in dozens of countries around the world -- as many as 120 by the end of this year -- special operators engage in activities that range from reconnaissance and counterterrorism to humanitarian assistance and “direct action.” The traditional motto of the Army special forces is “De Oppresso Liber” (“To Free the Oppressed”). A more apt slogan for special operations forces as a whole might be “Coming soon to a Third World country near you!”

The displacement of conventional forces by special operations forces as the preferred U.S. military instrument -- the “force of choice” according to the head of USSOCOM, Admiral William McRaven -- marks the completion of a decades-long cultural repositioning of the American soldier. The G.I., once represented by the likes of cartoonist Bill Mauldin’s iconic Willie and Joe, is no more, his place taken by today’s elite warrior professional. Mauldin’s creations were heroes, but not superheroes. The nameless, lionized SEALs who killed Osama bin Laden are flesh-and blood Avengers. Willie and Joe were "us." SEALs are anything but "us." They occupy a pedestal well above mere mortals. Couch potato America stands in awe of their skill and bravery.

This cultural transformation has important political implications. It represents the ultimate manifestation of the abyss now separating the military and society. Nominally bemoaned by some, including former Secretary of Defense Robert Gates and former Joint Chiefs Chairman Admiral Mike Mullen, this civilian-military gap has only grown over the course of decades and is now widely accepted as the norm. As one consequence, the American people have forfeited owner’s rights over their army, having less control over the employment of U.S. forces than New Yorkers have over the management of the Knicks or Yankees.

As admiring spectators, we may take at face value the testimony of experts (even if such testimony is seldom disinterested) who assure us that the SEALs, Rangers, Green Berets, etc. are the best of the best, and that they stand ready to deploy at a moment's notice so that Americans can sleep soundly in their beds. If the United States is indeed engaged, as Admiral McRaven has said, in "a generational struggle," we will surely want these guys in our corner.

Even so, allowing war in the shadows to become the new American way of war is not without a downside. Here are three reasons why we should think twice before turning global security over to Admiral McRaven and his associates.

Goodbye accountability. Autonomy and accountability exist in inverse proportion to one another. Indulge the former and kiss the latter goodbye. In practice, the only thing the public knows about special ops activities is what the national security apparatus chooses to reveal. Can you rely on those who speak for that apparatus in Washington to tell the truth? No more than you can rely on JPMorgan Chase to manage your money prudently. Granted, out there in the field, most troops will do the right thing most of the time. On occasion, however, even members of an elite force will stray off the straight-and-narrow. (Until just a few weeks ago, most Americans considered White House Secret Service agents part of an elite force.) Americans have a strong inclination to trust the military. Yet as a famous Republican once said: trust but verify. There's no verifying things that remain secret. Unleashing USSOCOM is a recipe for mischief.

Hello imperial presidency. From a president’s point of view, one of the appealing things about special forces is that he can send them wherever he wants to do whatever he directs. There’s no need to ask permission or to explain. Employing USSOCOM as your own private military means never having to say you’re sorry. When President Clinton intervened in Bosnia or Kosovo, when President Bush invaded Afghanistan and Iraq, they at least went on television to clue the rest of us in. However perfunctory the consultations may have been, the White House at least talked things over with the leaders on Capitol Hill. Once in a while, members of Congress even cast votes to indicate approval or disapproval of some military action. With special ops, no such notification or consultation is necessary. The president and his minions have a free hand. Building on the precedents set by Obama, stupid and reckless presidents will enjoy this prerogative no less than shrewd and well-intentioned ones.

And then what...? As U.S. special ops forces roam the world slaying evildoers, the famous question posed by David Petraeus as the invasion of Iraq began -- "Tell me how this ends" -- rises to the level of Talmudic conundrum. There are certainly plenty of evildoers who wish us ill (primarily but not necessarily in the Greater Middle East). How many will USSOCOM have to liquidate before the job is done? Answering that question becomes all the more difficult given that some of the killing has the effect of adding new recruits to the ranks of the non-well-wishers.

In short, handing war to the special operators severs an already too tenuous link between war and politics; it becomes war for its own sake. Remember George W. Bush’s “Global War on Terror”? Actually, his war was never truly global. War waged in a special-operations-first world just might become truly global -- and never-ending. In that case, Admiral McRaven’s "generational struggle" is likely to become a self-fulfilling prophecy.

How the “Job Creators” REALLY Spend Their Money

Go To Original

In his "Gospel of Wealth," Andrew Carnegie argued that average Americans should welcome the concentration of wealth in the hands of a few, because the "superior wisdom, experience, and ability" of the rich would ensure benefits for all of us. More recently, Edward Conard, the author of "Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, said: "As a society, we're not offering our talented few large enough rewards. We're underpaying our 'risk takers.'"

Does wealthy America have a point, that giving them all the money will ensure it's disbursed properly, and that it will create jobs and stimulate small business investment while ultimately benefiting society? Big business CEOs certainly think so, claiming in a letter to Treasury Secretary Timothy Geithner that an increase in the capital gains tax would reduce investment "when we need capital formation here in America to create jobs and expand our economy."

They don't cite evidence for their claims, because the evidence proves them wrong. Here are the facts:

1. The Very Rich Don't Like Making Risky Investments

Marketwatch estimates that over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. According to economist Richard Wolff, about half of the assets of the richest 1% are held in unincorporated business equity (personal business accounts). The Wall Street Journal notes that over three-quarters of individuals worth over $20 million are invested in hedge funds.

Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011.


The Mendelsohn Affluent Survey confirmed that the very rich spend less than two percent of their money on new business startups. The last thing most of them want, apparently, is the risky business of hiring people for new innovation.


2. The Very Rich Don't Like Taking On Risky Jobs

CEOs, upper management, and financial professionals made up about 60 percent of the richest 1% of Americans in 2005. Only 3 percent were entrepreneurs. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds.

In fact, the very rich may not care about U.S. jobs in any form. Surveys reveal that 60 percent of investors worth $25 million or more are investing up to a third of their total assets overseas. Back home, the extra wealth created by the Bush tax cuts led to "worst track record" for jobs in recorded history. The true American job creator, as venture capitalist Nick Hanauer would agree, is the middle-class consumer.

3. The Very Rich Corporations Don't Like Spending On America

How do corporations spend their money? To a good extent, they don't. According to Moody's, cash holdings for U.S. non-financial firms rose 3 percent to $1.24 trillion in 2011. The corporate cash-to-assets ratio nearly tripled between 1980 and 2010. It has been estimated that the corporate stash of cash reserves held in America could employ 3.5 million more people for five years at an annual salary of $40,000.

The top holders of cash, including Apple and Google and Intel and Coca Cola and Chevron, are spending their money on stock buybacks (which increase stock option prices), dividends to investors, and subsidiary acquisitions. According to Bloomberg, share repurchasing is at one of its highest levels in 25 years.

Apple claims to have added 500,000 jobs to the economy, but that includes app-building tech enthusiasts and Fedex drivers delivering iPhones. The company actually has 47,000 U.S. employees, about one-tenth of General Motors' workforce in the 1990s.

The biggest investment by corporations is overseas, where they keep 57 percent of their cash and fill their factories with low-wage workers. Commerce Department figures show that U.S. companies cut their work forces by 2.9 million from 2000 to 2009 while increasing overseas employment by 2.4 million. They also tap into a "brain drain" of foreign entrepreneurs, scientists, and medical professionals rather than supporting education in America.

One last way corporations see fit to spend their money: executive bonuses. Especially at the banks, where the extra stipends are often paid for with zero interest loans from the Federal Reserve.

The richest individuals and corporations are really good at building up fortunes. They're even better at building up their "job creator" myth.

How Shameless Oligarchs Plunder Our World: From 1990s Russia to Present-Day Oklahoma

Go To Original

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin’s Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia’s economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.

Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn’t so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia’s newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.

That was the dominant libertarian theory framing the whole “shock doctrine” privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia’s privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia’s industry in far worse shape than the Communists left it.

Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama’s ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia’s collapse.

But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.

Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked “rule of law”—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without “rule of law,” Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here’s Friedman’s answer in the Cato Institute’s 2002 Economic Freedom of the World Report:

CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?

MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: “What do these ex-communist states have to do in order to become market economies?” And I used to say: “You can describe that in three words: privatize, privatize, privatize.” But, I was wrong. That wasn’t enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government’s centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don’t have the rule of law. What does it mean to privatize if you do not have security of property, if you can’t use your property as you want to?

Others expanded on Friedman’s rationalization, arguing that without this “rule of law” to protect their private property, the new private owners of Russia’s industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia’s oligarchs stole their companies in the first place, and thieves do tend to steal what they’ve stolen. But never mind—the libertarian ideology was salvaged, as Russia’s privatization experiment was declared “not a real free-market” without Friedrich Hayek’s “rule of law” in place.

The reason I’m bringing this up now is because over the past month, one of America’s most rapacious oligarchs, Aubrey McClendon, was exposed by Reuters for plundering Chesapeake Energy, the second-largest natural gas producer in the country after Exxon-Mobil. McClendon, co-founder, CEO and until a few weeks ago Chairman of Chesapeake, was discovered running a hedge fund inside of Chesapeake, personally profiting on the side from large trading positions that his public company Chesapeake took in the gas and oil markets.

Reuters also discovered that McClendon took small personal stakes in natural gas wells bought by Chesapeake, then borrowed against the wells’ reserves from the same banks that Chesapeake borrowed from—basically, the banks kicked back sweet lending deals to McClendon on the side as McClendon arranged less-than-sweet loans to his publicly-owned company, Chesapeake, kicking profits from Chesapeake’s shareholders and employees’ pockets into the banks and into Aubrey’s accounts.

The loser in all this, as always: Employees, retirees, and shareholders. As Reuters reported, Chesapeake is one of a small handful of companies whose employee 401k retirement packages consist mostly of Chesapeake stock, and the company requires employees to hold on to their stock for the maximum amount of time allowed by law:

Thousands of Chesapeake workers have retirement portfolios that are heavily invested in Chesapeake stock, which has declined sharply following revelations about Chief Executive Aubrey K. McClendon’s business dealings.

But while retail and institutional investors have sold the stock, employees don’t always have that option.

It’s not the first time McClendon has been caught plundering Chesapeake at the expense of shareholders, pension fund investors and employees: In 2008, McClendon bet and lost about $2 billion worth of Chesapeake Energy stock he owned—94% of Aubrey’s personal stake in Chesapeake– on a margin call when natural gas prices collapsed. Aubrey bet that natural gas prices would continue soaring, you see.

But like his peers in the oligarchy class, Aubrey’s loss became everyone but Aubrey’s loss: He was awarded a “CEO bailout” by his board of directors, who honored Aubrey with a $75 million “bonus” to bring his total pay in 2008 to $112 million, making Aubrey McClendon the highest-paid CEO in Corporate America that year. Even though Chesapeake’s earnings dropped in half, and its stock fell 60%, wiping out up to $33 billion in shareholder wealth.

Now, we’re learning, Aubrey was profiting in other ways off of Chesapeake that same year.

There is so much more to hate about Aubrey McClendon than this—the millions McClendon poured into Gary Bauer’s gay-bashing outfit “Americans United To Preserve Marriage” and the Swift Boat Veterans for Truth, the role McClendon and his Whirlpool heiress wife played in stealing waterfront land from Benton Harbor, an African-American slum and the poorest city in Michigan, in order to expand an exclusive golf course country club for residents of St. Josephs, where McClendon owns several plots of land. McClendon’s wife, Katie, is from St. Joseph’s; so is Katie’s cousin, Fred Upton, the Republican Congressman from St. Joseph’s. Aubrey and his wife are what pass for royalty (sans noblesse oblige) these days: Katie from the Whirpool fortune, Aubrey an heir to the Kerr-McGee fortune. (If you’ve seen the movie Silkwood, you might remember Kerr-McGee as the company that iced the labor union activist played by Meryl Streep.)

This is just one of many stories about how publicly-traded companies have been and can be transformed into elaborate schemes to loot and steal from the public and enrich a tiny handful of oligarchs. We saw this in the 1980s when Reagan deregulated the Savings & Loans, which were quickly transformed into a means of looting, fraud and plunder; we saw it in the 2000s, after the de-regulation of the financial sector.

The problem goes much deeper than Milton Friedman’s “rule of law” fetish. “Rule of law” is just another red herring diversion to provide cover for continued oligarchy plunder, failure and barbarism. The problem is systemic, and more importantly, ideological. We still operate under the same neoliberal/libertarian major premises we inherited from the Hayek-Mises-Friedman era, an ideology that considers notions like “the public good” to be quaint delusions at best—as opposed to today’s still-dominant, still-standing foundational ideology, which says that freedom equals the ruthless pursuit of individual self-interest, the unlimited acquisition of private property and wealth, framed within a cold, dystopian “rule of law.”

That is where the problem starts. That is why, every week, I could tell another story about another Aubrey McClendon or Dick Parsons, and it will never end until the ideology that enables them is buried.

Why America Is Slouching Towards Third World Status

Go To Original

"The best lack all conviction, while the worst
Are full of passionate intensity" --"The Second Coming", William Butler Yeats

Yeats' lines aptly describe our current age of political mediocrity. As we consider our politicians, we can hardly say that they're our best. And the worst of them are full of passionate intensity, with passions driven by ideology, rather than fact-based analysis.

The United States has been in decline relative to other countries for the last 30 years. On key metrics, we've fallen behind our peer group of industrialized countries, such as the UK, France, Germany, and Japan.

Am I exaggerating? Well, according to the Corruption Perception Index, we rank 24th in the world (only slightly better than Qatar) for public sector corruption. We rank 25th (way behind our peer group) in the OECD for math scores among 15-year-olds.

Over the past 30 years, our national debt has grown from about 30 percent of GDP to about 100 percent, and will become much worse based on current trends. In a recent survey of 10,000 Harvard Business School Alumni, "66 percent of respondents see the U.S. falling behind emerging economies." It is difficult to find many encouraging metrics.

If the above statistics don't convince you, visit the New Delhi International Airport, then compare it with our JFK or Newark International Airports. In many areas, our infrastructure is an embarrassment, already inferior to that of many third world countries.

These facts (and many others) have escaped Romney, Santorum and our current group of Republican leaders. Obama and the Democrats aren't doing significantly better at confronting these challenges.

In the 19th century, America aggressively compared itself against the world, and aspired to be "best in class." We were an early adopter of kindergarten because we saw evidence that it would improve educational outcomes. In 1862, the U.S. was suffering through the Civil War, but Congress still had the foresight to pass the Land Grant Colleges Act, which created some of our finest universities. This investment was made because it was important for our country's growth, and the U.S. clearly lagged behind Europe in college and university education.

Today, many of us suffer from what Thorstein Veblen called "trained incapacity" and John Dewey described as "occupational psychosis." We filter the world through our own ideological training, believing only what fits our story. Or, as Stephen Colbert, cultural commentator and 2008 Peabody Award winner commented:

'It used to be, everyone was entitled to their own opinion, but not their own facts. But that's not the case anymore. Facts matter not at all... What is important? What you want to be true, or what is true?... Truthiness is 'What I say is right, and [nothing] anyone else says could possibly be true.'

Many Americans still have an almost cult-like belief that America is the greatest nation on earth. They systematically reject evidence suggesting we have significant room for improvement.

Sounds overly-dramatic? When opposing President Obama's health care reform proposals, Speaker of the House John Boehner repeatedly proclaimed (with passionate intensity) that America has the "best health care system in the world." Boehner is correct only if you exclude the entire developed world from the comparison. The U.S. ranks 50th for longevity and 49th for infant mortality, where we're barely ahead of Belarus, Croatia and Lithuania.

I defy anyone to name a single important health care metric where the U.S. is considered a best-practice example as a nation. The only thing we lead the world in... is cost of health care. We have the world's most expensive health care system. For example, our health care system costs almost twice Canada's, but at best we produce approximately equivalent results.

For Boehner to say we have the best health care system in the world, and not be laughed out of office, is at best 'trained incapacity' or 'occupational psychosis.'

Boehner doesn't have to support Obama's health care reform plan. Obama's reforms might make things worse. But, let's have an actual debate grounded in facts, without inventing (and propagating) falsehoods about the current system.

China has been one of the most successful countries economically of the last 30 years. It's fitting then to quote the architect of its economic renaissance Deng Xiaoping: "It doesn't matter whether a cat is white or black, as long as it catches mice." For too many Americans, what matters is not whether the policy works, but whether it fits our preconceived ideologies.

It's the ultimate irony that we need to take the advice of a communist hardliner to put aside ideology, and focus on fact-based pragmatic solutions. Otherwise we'll continue our slouch towards Third World status.