Saturday, June 9, 2012

How Big Banks Run the World - at Your Expense

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The recent Public Banking conference held in Philadelphia offered a message that is at once so simple - but also so bold - it is hard for most Americans to pause long enough to understand how profoundly their thinking had been corralled by the masters of finance - in ways far, far, far more insidious and powerful than even the latest financial crisis suggests.

To understand what has happened, however, you first have to take a minute to shake a few cobwebs out of your brain about "money" - and how it is created and by whom and for whose benefit.

Money is "created"? Yes, obviously so - or did you imagine there is some fixed pile of "money" some place that exists once and for all and for all times?

Think about it: If that were true, it would be impossible for the economy ever to change and grow. If the "money supply" were not increased over time, the original economy of, say, 1776 - which served about 2.5 million Americans - would still define the amount of "money" we would have to work with today.

(And yes, going back further, if money were not increased - i.e. "created" - the amount that existed even in a far smaller economy prior to 1776 would be all there was and is, even down to today.)

* * *

Once you realize money must be and is regularly created and expanded, then the interesting questions begin to occur - like "How is it done?" and "Who benefits from it?"

Step One: Most people think of "money" as something real, something that is kind of like gold or silver or anything that has intrinsic value. Allowing for a very, very few minor exceptions, that is simply not what "money" is.

"Money" in the real world is a piece of paper (or electronic version of the same) that is a promissory note - a promise to pay you - that legally must be accepted by anyone to whom it is given to settle a debt. Behind this promise is the federal government in two very big ways: First, the government itself stands behind the promise as the party that will pay what it says it will pay on the piece of paper. Second, the government ensures that everyone must accept this promise if the piece of paper is handed over when you buy something or settle a debt.

So, money is a promise to pay? Yes and that is all it is - but that is huge, especially when backed and enforced by the government.

Once you fully grasp this simple truth, things get very, very interesting:

Some "authority" must have the power to issue or authorize the issuing of "promises to pay that must be accepted" - i.e. to "create" money. In the United States that "authority" is called the Federal Reserve ("the Fed").

And yes - because the economy does, in fact, get bigger over time - the Federal Reserve Board must have a way to create more money (more promises to pay) as time goes on. It does this all the time. In the modern era, it does it via computers issuing - literally out of thin air, via nothing more than accounting entries - promises to pay that are called "dollars."

The Federal Reserve uses these to buy up securities owned by banks - and then these newly created "dollars" are deposited in the banks' reserve account at the Fed.

Again, yes, created literally out of thin air. (Otherwise the money supply wouldn't expand and we would be back in 1776 ...)

* * *

Now things start to get very interesting indeed: Banks have the legal right to lend more than the amount of "dollars" they actually keep in their vaults or at the Fed (their reserves) - roughly ten times more these days. So, for instance and simplifying a bit, let's say that Bank A has $1,000 in deposits. So long as it keeps $100 on reserve, it can lend out $900 to the public.

But this is only the beginning and here's where the real action is and how the game is played: that $900 is now multiplied throughout the banking system. Note carefully the word "multiplied." Bank A loans the money to individuals, businesses and perhaps other banks. Then, these people deposit the money in another bank (or they spend it and someone else deposits it in another bank). Though in the real world, it would go to many banks, for simplicity assume for the moment it all goes to Bank B. Now, Bank B has $900 in "new" deposits and (keeping 10 percent in reserves as required) it can now lend out another $810. And if this is deposited in Bank C, in turn that bank can keep 10 percent and lend out $731 ($810-81). Ultimately, when the process is completed the initial $1,000 permits the creation of (again, yes, out of thin air) $10,000.

(Ten times as much is not a magical number; it is what the Federal Reserve Board currently allows for transaction accounts of more than $71 million [it is 3 percent for $11.5 million to $71 million, and zero for accounts of less than $11.5 million. It could be more; it could be less.])

* * *

Let's stop for a moment, however, to consider something far more important: I started out this little essay by saying that "the recent public banking conference offered a message that is at once so simple - but also so bold - it is hard for most Americans to stop long enough to understand how their thinking has been corralled by the masters of finance - in ways far, far, far more insidious and powerful than even the latest financial crisis suggests."

The above has, in fact, all simply been background for the big story: Think again about the fact that the Federal Reserve Board (like any central bank in any country) simply "creates money" out of thin air or authorizes it to be created by banks (by, among other techniques, setting or altering the amount banks have to keep on reserve).

Moreover, it can also decide what interest rate it will demand for the money it lends out when banks need additional reserves to meet requirements - including, if it likes, zero or near zero. (Currently banks can borrow short term from the Federal Reserve Board at three-quarters of one percent - i.e. 0.75 percent.)

Why, you might ask, doesn't the Federal Reserve Board simply "create" money (as it does all the time) and lend it at 0.75 percent to the government (rather than let the banks do it) to pay for important public goods and to settle its debts? (Our bridges are falling down; not a bad thing in which to invest.)

The answer is: It certainly could do that, in theory. In fact, it has been doing something close to this recently using a fancy term, the origins of which I won't bother you with. The term is "quantitative easing" - but all it means is that the Federal Reserve Board "creates" money and buys up government bonds from the banks - and, then, the banks in turn lend to the government and the government pays its debts (or buys airplanes, or schools, or bridges and roads, or anything it decides it wants to buy or spend money on ....).

The banks, of course, make a nice profit on this as "middlemen" between the Fed and the government.

If you have been watching closely, you will now begin to see why the Public Banking conference's message is pretty dramatic: What is the big deal about deficits when the economy is stagnating? Why doesn't the Federal Reserve Board simply "create money" (as it does all the time anyway) and lend it to the government via the banks and then have the government put people to work by investing the money (building bridges and roads and schools, for instance)? Two things then happen: the economy gets going and more tax receipts come in to help pay off the debt (of newly created money). Yes, of course, if this went too far, inflation could become a concern. So, it is important not to go too far.

* * *

Even more interesting - much more interesting! - if the law were changed - or we acted as we did in part during World War II and, for instance, Canada actedbetween 1938 and 1974; - it would be possible for the Fed to lend directly to the government, bypassing the bank "middlemen" who make their profit by selling bonds to the Fed and investing the money in the government.

Moreover - watch this very, very closely - since by law the Federal Reserve Board turns over almost all its profits (i.e. all interest) to the government even now, the loans would cost the government literally nothing if things were done in the simple, straightforward way (or if a "public bank" were set up that operates just the way private banks are run today, including making profits for the owners - who in this case would obviously be the public - i.e. the government).

(One rough estimate offered by the Public Banking people is that had the United States done what they are talking about over the last 24 years, the amount saved on interest payments on the national debt would have been roughly eight trillion dollars - and the economy might also have been moved out of recession. Whatever the number might be in a careful statistical analysis, it is very, very large indeed.)

* * *

There is a rough parallel in all this with the way student loans used to be handled and are handled now. For a substantial period, the banks provided some loans to students that were guaranteed by the government, adding a mark-up for their profit. In 2010, Congress decided to eliminate the middleman and the government now simply makes the loans directly at lower cost.

But, of course, we don't allow ourselves to follow the straightforward path outlined above or suggested by the student loan program changes. Indeed, to even suggest the Public Banking strategy is to suggest a horror of horrors, since one of the biggest money makers for the banking industry would be on the chopping block.

And the banking industry - especially its Wall Street branch - plays a very powerful and rough political game opposing anything or anyone who tries to "uncorral" the thinking of the public.

Nonetheless, that is the direction that was opened up for serious discussion at the Public Banking conference. First steps first, of course. We currently have one "public bank" in the United States, the 93-year-old Bank of North Dakota. Since 2010, seventeen states have considered legislation to create banks based in one or another way on this model. Ellen Brown, the leading theorist behind the movement - along with many participants - urges the value of such banks on their own terms in that they help small businesses, farmers, home-owners, students and others.

But, down the line, the big payoff is to get us thinking much more carefully about the way the world really works, and why. Once you start thinking about how money is created and who gets to use that power and for what purpose, some very, very interesting questions indeed begin to follow.

To be sure, the story gets more complicated when you bring in global trade, finance, the Chinese, and so forth: A serious move in the way posed by the Public Banking people would have major implications for global finance, and the role of the US - and the US dollar - in the global system.

But this, too, is one of the purposes of taking such proposals seriously - and the importance of starting a far-reaching new debate not only about money and the US system, but the fragility of the entire superstructure of global finance these days.

* * *

(By the way, one estimate is that roughly 25 percent of the world's banking systems allow central banks to extend credit directly to governments; another 37 percent allow short-term advances. These include some of the fast charging so-called "BRIC[S]" countries such as India and South Africa, as well as Malaysia, the United Arab Emirates, Israel and Japan.)

If you want to have some fun with this - before you get angry at the rip-offs - take a look at the video of 12 year-old Victoria Grant explaining the same thing for Canada. There is a reason why it went viral and has been seen by more than a million people.

US Attempts to Mass-Murder Its Way to Victory in Syria

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As revelations emerge that the violence in Syria has been premeditated by Western planners years before the Arab Spring unfolded, and as the facade of "democratic aspirations" collapse in the face of a sectarian-driven bloodbath, US officials and Western think-tank policy makers speaking with Bloomberg have stated that their final message to Russia in order to begin regime change is essentially this: the violence will continue to be purposefully escalated until regime change is accomplished - Russia can capitulate now and have a say in how a transition occurs, or capitulate later and suffer exclusion as was the case in Libya.

Bloomberg cites "US officials" who claim they are meeting with Russia to seek an "orderly transition."



Image: Brookings Institution's Middle East Memo #21 "Assessing Options for Regime Change (.pdf)," makes no secret that the humanitarian "responsibility to protect" is but a pretext for long-planned regime change.

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Just how close the US is, or believes it is to actually overthrowing the Syrian government is a matter of varied opinion. What is not opinion is the fact that the US has openly conspired to "bleed" Syria to death to either perpetually limit its geopolitical influence throughout the Middle East, or to eventually precipitate the fall of the government. This was stated very clearly in Brookings Institution's "Middle East Memo #21 "Assessing Options for Regime Change (.pdf):"

"An alternative is for diplomatic efforts to focus first on how to end the violence and how to gain humanitarian access, as is being done under Annan’s leadership. This may lead to the creation of safe-havens and humanitarian corridors, which would have to be backed by limited military power. This would, of course, fall short of U.S. goals for Syria and could preserve Asad in power. From that starting point, however, it is possible that a broad coalition with the appropriate international mandate could add further coercive action to its efforts." -page 4, Assessing Options for Regime Change, Brookings Institution.

On pages 8 and 9, the memo states:

"The United States might still arm the opposition even knowing they will probably never have sufficient power, on their own, to dislodge the Asad network. Washington might choose to do so simply in the belief that at least providing an oppressed people with some ability to resist their oppressors is better than doing nothing at all, even if the support provided has little chance of turning defeat into victory. Alternatively, the United States might calculate that it is still worthwhile to pin down the Asad regime and bleed it, keeping a regional adversary weak, while avoiding the costs of direct intervention." -pages 8-9, Assessing Options for Regime Change, Brookings Institution.

For those following the "humanitarian" rhetoric proposed by the West as their alleged motivation for involvement in Syria, it is clearly unconscionable to purposefully perpetuate violence, particularly the brutal sectarian violence now admittedly unfolding, simply to keep "a regional adversary weak." And it is from this position of moral depravity that the West is negotiating with Russia for a "transition" in Syria.

The West believes that by continuing this bloodshed and by manipulating public perception that it is "the doing of the Syrian government," "enabled" by the Russians, Chinese, and Iranians, they can "shame" opponents of their campaign of destabilization into backing this ongoing crime against world peace. However, Western propaganda is faltering in the face of the alternative media. Additionally the public in general, weary of unending war, are increasingly voicing suspicion over the motives and involvement of the West in regards to Syria. The intended sting of what appears to be a Western orchestrated atrocity in Houla Syria, exists only in the op-eds of the Western press, and extends no further - not even in the comment sections below. In other words, no one has bought it.



Image: Never again? Appeasing tyranny never works. In 1939 Hitler singed a non-aggression pact with Russia it never intended to honor. Up until the day Hitler invaded Russia in 1941, he denied his intentions of driving all the way to Moscow, claiming he was lining up troops on Russia's borders to "protect them from British bombing." Today, we see NATO playing the same game with the European ballistic missile shield intended for "Iran," while undermining and invading one Russian ally after another. Apathy and tacit complicity for wars of aggression may seem "easy," that is until one considers the price Germans ultimately paid when their fortunes finally turned.
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What Russia decides to do with Syria will determine the shape of the battlefield upon which they will fight when inevitably forced to confront the encroaching machinations of Wall Street and London.

One misconception that cannot be made, however, is that by appeasing the West by giving up on Syria, like was done with Libya, will somehow placate the hegemonic ambitions driving this agenda in the first place. Like Hitler denying he intended to invade Russia up to the day he indeed invaded, Wall Street and London intend to go all the way to Moscow and Beijing, despite the myriad of excuses and denials they make along the way, and denials and excuses they will continue to make until the very day Western forces and their proxies begin unraveling both Russia and China.

China, likewise faces encirclement and containment as the Pentagon openly declares it is shifting its attention and its fleets into the Pacific. While Secretary of Defense Leon Panetta attempts to "dispel" concerns that the US is arraying its forces to confront China, his less than credible word contradicts nearly 20 years of US policy papers that describe containing and collapsing China by this very method of reasserting US hegemony in the Pacific.

Confrontation will come sooner or later, and for those wondering why the world was so apathetic in the face of the Nazis, an obvious threat to world peace in retrospect, we are given a front row seat today as Wall Street, London, and those in their orbit incrementally violate the sovereignty and destiny of nation after nation, aided by their own population's seemingly infinite apathy and ignorance. And like Germany, it will be these populations that pay the ultimate price for complacency and inaction in the face of their own governments' reckless hegemonic ambitions.

The U.S. Economy By The Numbers: 70 Facts That Barack Obama Does Not Want You To See

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Why is the economy going to collapse? Have you ever been asked that question? If so, what did you say? Sometimes it is difficult to communicate dozens of complicated economic and financial concepts in a package that the average person on the street can easily digest. It can be very frustrating to know that something is true but not be able to explain it clearly to someone else. Hopefully many of you out there will find the list below useful. It is a list of 70 numbers that show why we are headed for a national economic nightmare. So why does the title of the article single out Barack Obama? Well, it is because right now he is the biggest cheerleader for the economy. He is attempting to convince all of us that everything is just fine and that the economy is heading in a positive direction. Well, the truth is that everything is not fine and things are about to get a whole lot worse. Certainly others should share in the blame as well. Congress has been steering the economy in the wrong direction for decades, the "too big to fail" banks have turned Wall Street into a pyramid of risk, leverage and debt, and the Federal Reserve has more power over the financial system than anyone else does. Our economy has been in decline for quite a while now, and soon we are going to smash directly into an economic brick wall. Unfortunately, a lot of Americans are in denial about this. A lot of people out there doubt that an economic collapse is coming. Well, if you know someone that believes that the U.S. economy is going to be "just fine", just show them the list below.

The following are 70 facts that Barack Obama does not want you to see....

$3.59 - When Barack Obama entered the White House, the average price of a gallon of gasoline was $1.85. Today, it is $3.59.

22 - It is hard to believe, but today the poverty rate for children living in the United States is a whopping 22 percent.

23 - According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities permanently shut down in the United States every single day during 2010.

30 - Back in 2007, about 10 percent of all unemployed Americans had been out of work for 52 weeks or longer. Today, that number is above 30 percent.

32 - The amount of money that the federal government gives directly to Americans has increased by 32 percent since Barack Obama entered the White House.

35 - U.S. housing prices are now down a total of 35 percent from the peak of the housing bubble.

40 - The official U.S. unemployment rate has been above 8 percent for 40 months in a row.

42 - According to one survey, 42 percent of all American workers are currently living paycheck to paycheck.

48 - Shockingly, at this point 48 percent of all Americans are either considered to be "low income" or are living in poverty.

49 - Today, an astounding 49.1 percent of all Americans live in a home where at least one person receives benefits from the government.

53 - Last year, an astounding 53 percent of all U.S. college graduates under the age of 25 were either unemployed or underemployed.

60 - According to a recent Gallup poll, only 60 percent of all Americans say that they have enough money to live comfortably.

61 - At this point the Federal Reserve is essentially monetizing much of the U.S. national debt. For example, the Federal Reserve bought up approximately 61 percent of all government debt issued by the U.S. Treasury Department during 2011.

63 - One recent survey found that 63 percent of all Americans believe that the U.S. economic model is broken.

71 - Today, 71 percent of all small business owners believe that the U.S. economy is still in a recession.

80 - Americans buy 80 percent of the pain pills sold on the entire globe each year.

81 - Credit card debt among Americans in the 25 to 34 year old age bracket has risen by 81 percent since 1989.

85 - 85 percent of all artificial Christmas trees are made in China.

86 - According to one survey, 86 percent of Americans workers in their sixties say that they will continue working past their 65th birthday.

90 - In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

93 - The United States now ranks 93rd in the world in income inequality.

95 - The middle class continues to shrink - 95 percent of the jobs lost during the last recession were middle class jobs.

107 - Each year, the average American must work 107 days just to make enough money to pay local, state and federal taxes.

350 - The average CEO now makes approximately 350 times as much as the average American worker makes.

400 - According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

$500 - In some areas of Detroit, Michigan you can buy a three bedroom home for just $500.

627 - In 2010, China produced 627 million metric tons of steel. The United States only produced 80 million metric tons of steel.

877 - 20,000 workers recently applied for just 877 jobs at a Hyundai plant in Montgomery, Alabama.

900 - Auto parts exports from China to the United States have increased by more than 900 percent since the year 2000.

$1580 - When Barack Obama first took office, an ounce of gold was going for about $850. Today an ounce of gold costs more than $1580 an ounce.

1700 - Consumer debt in America has risen by a whopping 1700% since 1971.

2016 - It is being projected that the Chinese economy will be larger than the U.S. economy by the year 2016.

$4155 - The average American household spent a staggering $4,155 on gasoline during 2011.

$4300 - The amount by which real median household income has declined since Barack Obama entered the White House.

$6000 - If you can believe it, the median price of a home in Detroit is now just $6000.

$10,000 - According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

49,000 - In 2011, our trade deficit with China was more than 49,000 times larger than it was back in 1985.

50,000 - The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

56,000 - The United States has lost more than 56,000 manufacturing facilities since 2001.

$85,000 - According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

$175,587 - The Obama administration spent $175,587 to find out if cocaine causes Japanese quail to engage in sexually risky behavior.

$328,404 - Over the next 75 years, Medicare is facing unfunded liabilities of more than 38 trillion dollars. That comes to $328,404 for each and every household in the United States.

$361,330 - This is what the average banker in New York City made in 2010.

440,00 - If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to totally pay it off.

500,000 - According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

2,000,000 - Family farms are being systematically wiped out of existence in the United States. According to the U.S. Department of Agriculture, the number of farms in the United States has fallen from about 6.8 million in 1935 to only about 2 million today.

$2,000,000 - At this point, the U.S. national debt is rising by more than 2 million dollars every single minute.

2,600,000 - In 2010, 2.6 million more Americans fell into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.

5,400,000 - When Barack Obama first took office there were 2.7 million long-term unemployed Americans. Today there are twice as many.

16,000,000 - It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

$20,000,000 - The amount of money the U.S. government was spending to create a version of Sesame Street for children in Pakistan.

25,000,000 - Today, approximately 25 million American adults are living with their parents.

40,000,000 - According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

46,405,204 - The number of Americans currently on food stamps. When Barack Obama first entered the White House there were only 32 million Americans on food stamps.

88,000,000 - Today there are more than 88 million working age Americans that are not employed and that are not looking for employment. That is an all-time record high.

100,000,000 - Overall, there are more than 100 million working age Americans that do not currently have jobs.

$150,000,000 - This is approximately the amount of money that the Obama administration and the U.S. Congress are stealing from future generations of Americans every single hour.

$2,000,000,000 - The amount of money that JP Morgan has admitted that it will lose from derivatives trades gone bad. Many analysts are convinced that the real number will actually end up being much higher.

$147,000,000,000 - In the U.S., medical costs related to obesity are estimated to be approximately 147 billion dollars a year.

295,500,000,000 - Our trade deficit with China in 2011 was $295.5 billion. That was the largest trade deficit that one country has had with another country in the history of the planet.

$359,100,000,000 - During the first quarter of 2012, U.S. public debt rose by 359.1 billion dollars. U.S. GDP only rose by 142.4 billion dollars.

$454,000,000,000 - During fiscal 2011, the U.S. government spent over 454 billion dollars just on interest on the national debt.

$1,000,000,000,000 - The total amount of student loan debt in the United States recently surpassed the one trillion dollar mark.

$1,170,000,000,000 - China now holds approximately 1.17 trillion dollars of U.S. government debt. Yet the U.S. government continues to send them millions of dollars in foreign aid every year.

$1,600,000,000,000 - The amount that has been added to the U.S. national debt since the Republicans took control of the U.S. House of Representatives. This is more than the first 97 Congresses added to the national debt combined.

$5,000,000,000,000 - The U.S. national debt has risen by more than 5 trillion dollars since the day that Barack Obama first took office. In a little more than 3 years Obama has added more to the national debt than the first 41 presidents combined.

$5,000,000,000,000 - What the real U.S. budget deficit in 2011 would have been if the federal government had used generally accepted accounting principles.

$11,440,000,000,000 - The total amount of consumer debt in the United States.

$15,734,596,578,458.59 - The U.S. national debt as of June 7, 2012.

$200,000,000,000,000 - Today, the 9 largest banks in the United States have a total of more than 200 trillion dollars of exposure to derivatives. When the derivatives market completely collapses there won't be enough money in the entire world to fix it.

Maria Gunnoe Testifies Before Congress: Mountaintop Removal Is Killing People

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In a heroic effort to overcome the theatrics of a Congressional hearing gone wild on Big Coal slogans and anti-EPA fervor, Goldman Prize-winning activist Maria Gunnoe brought the deadly and costly realities of mountaintop removal mining in the central Appalachian coalfields–and a few moments of sanity–to Washington, DC last week.

Testifying at the Subcommittee on Energy and Mineral Resources Oversight Hearing on the “Obama Administration’s Actions Against the Spruce Coal Mine: Canceled Permits, Lawsuits and Lost Jobs,” where wild-eyed accusations and embellished coal statistics by Republican extremists and coal industry sycophants reduced the hearing to the level of a buffoonish county fair tent show, Gunnoe single-handedly pointed out the well-documented health and human crises from mountaintop removal operations and turned the table with her own poignant question: “Why is it acceptable to depopulate our communities and culture, poison our water and air and leave us to die in a post mining waste land for temporary jobs and energy?”

Dispelling the misinformation over so-called lost jobs from environmental regulatory actions, Gunnoe debunked the hearing’s “war on coal” mania with a reality check on the actual lives and livelihoods at stake. “There is a war in Appalachia, do believe this,” Gunnoe told the members of Congress. “This war is not on coal, coal jobs, or the coal industry. This war is on these mountains, our water and the people who depend on it all.”

Here’s Gunnoe’s statement, along with a link to a slide show she entered into the record:

I am Maria Gunnoe from Boone County WV and I (like 100’s of others) help to represent the stories of the Appalachian Communities where coal mining impacts are killing the people and depopulating our mountain culture. Thank each of you for allowing me the opportunity to speak to you. I appreciate your obligations and responsibilities in protecting and serving all US citizens. My hope is that you listen and hear these pleas for our lives from the Southern Mountains of Appalachia where these atrocious mountaintop removal permits are operating.

The Spruce No. 1 permit is in the headwaters of Pigeon Roost creek. This stream and the people of Blair seem unimportant to most people in this room but to me and the people of Blair this stream is a part of our home. When mountaintop removal is permitted near your home, you will soon be forced to leave what is the birthplace of your family and your children’s birthrights as heirs to your family’s land. You are forced (by destruction) to leave the American dream that our forefathers prepared and fought for. Why is it acceptable to depopulate our communities and culture, poison our water and air and leave us to die in a post mining waste land for temporary jobs and energy? You should ask yourselves: are we knowingly and willingly flipping on our lights and lining our pockets at the expense of the lives, livelihoods and the health of the people in Appalachia? The answer to this in my opinion is YES you are!

The Spruce No. 1 permit is one of the first examples of steps that the EPA has taken to STOP irresponsible mining practices which were ignored during the Bush Administration. People from all over Appalachia have lobbied the EPA for these protections for the past 15 years. During the Bush Administration the oversight of mountaintop removal permits was non-existent. The Bush Administration sent word to W.Va state Department of Environmental Protection Secretary Stephanie Timmermyer to get these permits pushed through as quickly as possible, In George Bush’s words “We need this coal, our homeland security depends on it.” The coal industry was allowed to do as they please during the 8 years of the Bush Administration.

Then in 2009, in steps the Obama administration’s EPA trying to fix the problems that the Bush administration created and then ignored. One of the biggest problems was the lack of enforcement of current regulations on mountaintop removal operation in Appalachia. The coal industry was allowed to run out of control in our mountains and depopulate many of our local communities during this rush to get the coal. In response to this insurgence by the coal industry, impacted community members organized to stop the attack of this industry on us in our homes. The EPA heard from us often and we appreciate that they are listening to the science. We have organized meetings with the impacted community members so that the representatives within the government agencies can see and hear the people’s pleas. Still, most of these decision makers walked away thinking that there is some sort of balance to be found in blowing up the mountains over our homes and shoving them into our streams. In reality the fact is mountaintop removal is killing people. These facts are out and available to anyone who wants to see them.

Please understand that the majority of people in Appalachia are against mountaintop removal coal mining. The only ones who support it are the ones who are making money from it. These are the ones that should be made to live in our communities and suffer the consequences of their actions. If you support mountaintop removal and what it is doing to us, you are supporting the murder of the people of the Appalachian culture that depends on these mountains and their waters for our very lives.

The coal industry has said that the EPA and the Obama administration are “trying to shut down coal.” The coal industry is perpetuating a lie that there is a “war on coal” and that coal mining jobs are under attack. This is the same false crisis that is created by this industry every time they don’t get what they want. According to recent reports by Ken Ward of the Charleston Gazette coal mining jobs have increased by 7.4 percent since 2009 when the Obama Administration took office. Ted Boettner with the WV Center for Budget and Policy looked at mining jobs over the last two decades; annual West Virginia coal mining employment was higher in 2011 than at any time over the last 17 years, according to Workforce West Virginia. Quoting the title and text of Daniel Weiss’s article on climateprogress.com “The War on Coal is a Lie Invented by the Coal Industry.” It is a multimillion dollar misinformation campaign funded by big coal polluters to distract Americans from the deadly effects of coals pollution on public health.” Also Ken Ward reported in the Charleston Gazette the coal industries numbers concerning this “war on coal” simply don’t add up. There is a war in Appalachia, do believe this. This war is not on coal, coal jobs, or the coal industry. This war is on these mountains, our water and the people who depend on it all. Coal is not our King, God is! Coal is only the dictator of some.

Mountaintop removal is not only killing the people who work these jobs but it is also killing the people who live in the surrounding communities. Jobs in any region are important; however ALL of those jobs need to be safe for the workers and for the communities that they operate in.

Mountaintop removal is NOT safe for anyone. Science has repeatedly proven this. The facts that mountaintop removal is killing us are in the 19 health studies that have been compiled.

This committee, Congress, the coal industry and the Obama administration continue to ignore these studies and continue to allow the blowing up of our mountains and poisoning of our waters and air to get to the coal that currently powers about 44 % of America’s electricity.

Expanding any mountaintop removal mining including the Spruce No. 1 permit means the depopulation of yet another mountain community and the sickening of the people who live in these communities.

Living this depopulation has made me more aware of the large-scale impact of this ousting and killing of people on the culture that I love. We will die as a culture as we suffer with the inability to pass this mountain culture on to our children. Not even our historic mountain cemeteries are left intact and accessible. Our people are being mortally impacted by the fallout from mountaintop removal coal mining in our water and air and in our native homes. Do we really need to prove that blowing up mountains over our homes and pushing them into our streams is NOT good for us? It is not as if this Committee, Congress and the coal industry doesn’t know what mountaintop removal does to people. They not only know about it but they are supporting and allowing it and by not ending it. After visiting the central Appalachian communities The UN Women’s Tribunal on climate change jurist recommendations will include that mountaintop removal should be immediately stopped – an immediate moratorium on any mountaintop
removal operations until a full investigation including health related disease incidence rates can be undertaken.

I had hoped that the last time that I came to speak to this committee that someone would have heard our pleas for our lives in Appalachia but our pleas fell on the deaf ears of coal supporters. We had to request that this committee post our comments on their website for others to view days after the industry’s comments were posted. We were timed to the second on our comments, while pro coal supporters were allowed to go minutes over their allotted time to speak. Mountaintop removal cannot be silenced. The more people that are impacted, the more that will continue to stand up to protect all that makes us Appalachians FREE! We will not back down. We know we are doing the right thing in ending this evil that has came in to destroy our very existence. We Appalachians have for many years lobbied the EPA to enforce the laws that are intended to protect our lives in our homes. The coal industry in Appalachia is anti-life and the FIRM enforcement of the laws are the only chance that we have of surviving as a culture after this industry is gone.

Parts of my family first settled this area during the forced removal of the Cherokee known as the “Trail of Tears.” What the coal industry and our government is doing to our native communities in Southern Appalachia feels much like the second silent forced removal of our people.

A few notes from community members:

Selenium discharges downstream from Spruce No 1 are already much higher than EPA standards according to recent water testing. The Spruce 1 permit will allow more selenium to be released into this stream. This is the making for life threatening levels of selenium.

The community of Blair has NO municipal drinking water available to them. The only water in these communities is the well water which in some cases has already been polluted. The community of Blair needs water infrastructure to supply their homes with healthy water before any area permits are even discussed.

From what we see on the ground the coal companies have already moved forward in preparing the permit area as if they had an approved permit. The Spruce permit is in the Coal River watershed. Mountaintop removal is why American Rivers placed the Coal River on our America’s Most Endangered Rivers® list this year–because the river is at a decision point–not because it’s the most polluted. We can save these precious headwater streams that also serve as drinking water to our communities but we must act now before it is too late.

How Police and Traffic Light Companies Are Conspiring to Give You More Tickets

A self-interested partnership has formed to lobby against accountability methods for these cameras: police unions and for-profit red-light camera companies.


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Many areas of the country are experiencing a sudden rise in the number of speed and traffic cameras installed near roads. While some cameras have been a welcome development in curbing dangerous driving, many motorists have complained about what they perceive as an effort by authorities to simply extract revenue without community input on such policies. Growing evidence that many privatized traffic companies use faulty information, including right-hand turns, to assign red light tickets has only added to the anger. As legislators confront the backlash, a self-interested partnership has formed to lobby against accountability methods for these cameras: police unions and for-profit red-light camera companies.

In state after state, police unions and for-profit traffic camera companies have teamed up to defeat laws proposed to ensure that traffic policies are designed for public safety rather than to collect revenue. In Connecticut, police unions and traffic light companies opposed efforts to simply expand the length of yellow lights — despite studies showing that doing so would reduce red light violations by 90 percent — in favor of increased for-profit red light cameras. In Florida last year, American Traffic Solutions, one of the largest for-profit camera corporations, hired 17 lobbyists to defeat a similar bill. The company circulated a letter signed by police chiefs, and worked closely with officials from the Florida Sheriff’s Association, a labor group, to pressure legislators. In California, a bill by State Sen. Joseph Simitian (D-Palo Alto) to ensure that traffic cameras can only be set up to promote public safety rather than collect revenue was opposed by the California Police Chiefs, a law enforcement labor union group.

The media is beginning to take note of the collusion between police unions and for-profit camera companies. In Texas, a high ranking police union official was reportedly paid simultaneously by American Traffic Solutions to lobby against legislation to limit the use of these cameras, according to an investigation by a local ABC News affiliate. Across the country, for-profit traffic light companies have hid behind a front group they set up called the “National Coalition for Safer Roads” to defeat efforts to ensure traffic lights are only set up for public safety reasons. Police union representatives have appeared with the group.

In many states, like Iowa, municipalities enter contracts with private camera operators and share part of the proceeds with local law enforcement. The financial incentives help explain why so many police union representatives have eagerly joined companies like American Traffic Solutions in fighting legislation to promote public safety. Of course, for-profit camera companies have every reason to lobby aggressively as well. A report from Maryland PIRG on wide-ranging abuses from the privatization of traffic cameras notes that Redflex Traffic Solutions, another large for-profit red light camera company, concedes that “aggressive” ticketing, not safety, is their priority:

The red light companies have invested heavily in lobbying state legislators. RedFlex, over a five year period, employed over 100 lobbyists in 18 different states; American Traffic Solutions has spent over $1.3 million in lobbying since 2007 and provided over $200,000 in campaign contributions in 2010 alone.

The partnership between police unions and privatized camera companies have led to some odd policy choices. As the Maryland PIRG study notes, for-profit traffic light companies have pushed contracts that limit government discretion in deciding how to enforce traffic violations. The arrangement essentially limits the role of law enforcement in their own communities.

Though police unions have lobbied against bills to promote public safety over collecting revenue, there are divisions within the union. The national Police Chiefs Association has acknowledged that “too many jurisdictions have obtained red light cameras to generate revenue” and recommends that future policies should only promote public safety.

7 Government Surveillance Programs Designed to Watch What You Do Online

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President Eisenhower was right on point about the military-industrial complex, but he could not have predicted the emergence of the massive surveillance state -- combining the government and private sector -- that bolsters it.

Sadly, neither President Obama nor his Republican challenger, Mitt Romney, has the desire or moral courage to fight the growing power and influence of the Corporate Security State. We are witnessing the integration of spying on two levels, the government level (federal, state and local) and the corporate level (via telecom providers, web services and credit card companies).

If you are a user of Facebook, Twitter, LinkedIn, YouTube, Craigslist or another popular site, the U.S. security state is watching you. An increasing number of federal agencies are employing sophisticated means to monitor Americans' use of social networking sites. Federal entities from the National Security Agency (NSA) and the Defense Department to the Department of Homeland Security (DHS) to even the Internal Revenue Service (IRS) are involved in developing programs to track the American public online.

Here is a brief summary of some of the other programs.

1. Justice Department. The Electronic Frontier Foundation (EFF) released a report from the DOJ’s Computer Crime and Intellectual Property section, "Obtaining and Using Evidence from Social Networking Sites," that describes how evidence from social networking sites can reveal personal communications that might help "establish motives and personal relationships."

It reports that monitored data from such sites can provide location information and "prove and disprove alibis." Perhaps most illuminating, it advises agents that “going undercover” on social media sites can enable law enforcement to communicate with suspects and targets, gain access to nonpublic information and map social relationships. The DOJ document notes that Twitter retains the last login IP address, but does not preserve data unless legally required to do so.

2. The IRS uses a variety of social media sites like Facebook, Google, Twitter, MySpace, YouTube and Second Life to investigate taxpayers. It seems to have started this practice in 2009, providing agents with special training on social networking. The EFF posted the IRS’ 38-page training that offers detailed tips to agents on how to conduct searches, locate relevant taxpayer information, narrow down and refine results.

3. The Office of the Director of National Intelligence is seeking a tool that integrates all online information, including web searches, Wikipedia edits and traffic webcams.

4. The Defense Department has solicited proposals through DARPA for a $42 million “Social Media Strategic Communications” (SMISC) program, a tool that tracks social media and weeds out information. It has set four goals for the project: (i) to detect, classify and measure the development of ideas, concepts in hidden social media messages; (ii) specify the structure of the campaign and influence in social media sites and the community they create; (iii) identify the participants and intention in conducting a social media campaign of persuasion and measure its effect; and (iv) develop an effective counter-message to an identified campaign carried out against the enemy.

5. The FBI is soliciting a bid for a program that seems very similar to the DHS social-network monitoring program. Dubbed the "FBI Social Media Application,” the program would have "[the ability] to rapidly assemble critical open source information and intelligence ... to quickly vet, identify and geo-locate breaking events, incidents and emerging threats."

In the FBI’s 12-page solicitation, it requests a program that can quickly identify, display and locate alerts on geo-spatial maps and enable users to summarize the "who, what, when, where and why" of specific threats and incidents. Going further, it seeks to not simply detect “credible threats,” but to identify those organizing and taking part in gatherings and to predict upcoming events. According to the FBI, "Social media will be a valued source of information to the SIOC [i.e., Strategic Information and Operations Center] intelligence analyst in a crisis because it will be both eyewitness and first response to the crisis."

An FBI spokesperson insisted, "[We] will not focus on specific persons or protected groups, but on words that relate to 'events' and 'crisis' and activities constituting violations of federal criminal law or threats to national security. Examples of these words will include lockdown, bomb, suspicious package, white powder, active shoot, school lockdown, etc.” Rest assured, much like the assurances voiced by the DHS, the FBI insists that its monitoring won't be used to focus on specific individuals or groups.

6. Department of Homeland Security. A more aggressive monitoring program was recently revealed by the Electronic Privacy Information Center (EPIC) when it secured from the DHS a list of approximately 380 keywords that the agency tracks. The allegedly threatening terms were found in the DHS’ Analyst Desktop Binder, part of its 2011 Media Monitoring Capability (MMC) program.

These terms are organized into nine categories:

Agencies – 26 terms, including “DHS,” “FBI”, “CIA,” “Air Marshal,” “United Nations” and “Red Cross”;

Domestic security – 52 terms, including "assassination," "dirty bomb," “crash,” “first responder,” “screening” and “death.”

Hazardous materials – 34 terms, including "hazmat," “nuclear," “leak,” “burn” and “cloud.”

Public health – 47 terms, including "ebola," "contamination," “wave,” “pork” and “agriculture.”

Infrastructure security – 35 terms, including “AMTRAK,” “airport," "subway," “port,” “electric” and “cancelled.”

Southwest border violence – 65 terms, including "drug cartel," "decapitated," “gunfight,” “marijuana,” “heroin,” “border” and “bust.”

Terrorism – 55 terms, including “Jihad,” “biological weapons,” “suicide attack,” “plot” and “pirates.”

Emergencies and weather – 41 terms, including “disaster,” "hurricane," "power outage," “ice,” “storm” and “help.”

Cyber security – 25 terms, including “cyber terror,” “malware,” “virus,” “hacker,” “worm,” “China” and “Trojan.”

The DHS has been engaged in monitoring social networking sites like Facebook, Twitter, Flickr, YouTube and LinkedIn as well as blogs since at least 2010. Its effort is run through the Office of Operations Coordination and Planning (OPS), National Operations Center (NOC), and is entitled “Publicly Available Social Media Monitoring and Situational Awareness (Initiative).” Its ostensible purpose is to provide situational awareness and strengthen its common operating picture.

The scope of DHS’ practice of social monitoring was unexpectedly revealed in a special congressional hearing, the House Subcommittee on Counterintelligence and Intelligence, headed by Rep. Patrick Meehan (R-PA), in February. Two DHS officials, Chief Privacy Officer Mary Ellen Callahan and Director of Operations Coordination and Planning Richard Chavez, raised the representatives' ire by appearing to be deliberately stonewalling on the scope and practice of the agency's social media surveillance.

Most disturbing, the DHS reps appeared unsure about the monitoring program’s goals, how the gathered information would be used and whether it would be shared with other agencies. In an unusual show of bipartisan unity, Reps. Billy Long (R-MO), Jackie Speier (D-CA) and Bennie Thompson (D-MS) joined Rep. Meehan in chastising the DHS officials.

Under intense congressional probing, DHS reps revealed that the keywords chosen for monitoring were drawn from commercially available, off-the-shelf database programs that were customized to meet its specifications. The agency was particularly interested in determining first witnesses to breaking events like the 2011 Tucson shooting of Gabrielle Giffords and others and the January 2012 bomb threat at an Austin school.

The DHS reps insisted that data gathered was only used to confirm other news reports and that information on private citizens was not being collected. In addition, they claimed that that all personally identifying information was regularly scrubbed from the agency’s servers.

Few should feel comforted by the DHS assurances. At the House hearing, it was also revealed that the agency was involved in what appears to be an ongoing campaign to monitor the actions and beliefs of individual Americans engaged in community-based political activism. It compiled a report, “Residents Voice Opposition Over Possible Plan to Bring Guantanamo Detainees to Local Prison-Standish MI,” that tracked community reactions to the proposed location of Guantánamo detainees in a local Michigan prison.

The DHS report is part of the EPIC documents acquired through a Freedom of Information request. It details that information was gathered from a variety of sources, including newspaper articles and responses, blogs by local activists, and Twitter and Facebook posts.

The House hearing also shed light on the DHS practice of outsourcing keyword tracking of social media through a sole-source contract to the giant defense contractor, General Dynamics. In 2011, General Dynamics had revenues of $5.5 billion of which 84 percent ($4.6 bil) came from government contracts. Earlier this year, it’s Advanced Information Systems division was awarded a $14 million DHS contract to (in the words of a press release) “provide constant and continual watch operations for critical communications to the agency's National Coordinating Center.” In addition, it will “identify the possible impacts of potentially disruptive events.

In keeping with the prevailing ethos of corporate unaccountability, it turns out if the General Dynamics employees are found to have misused the information garnered from a social network user, including a journalist or public figure, the employee must take a training course or, worst case, lose his/her job. No criminal penalties are specified.

A word to the wise, Big Brother is watching you.

An Ominous Quiet Descends on RG Steel's Troubled Mills

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Layoffs began in earnest this week at the Sparrows Point steel mill here, following a bankruptcy court filing late last week by owner RG Steel. All but a handful of the mill’s 2,000 workers expect to be idled in the coming days, as the company’s owners and bankers search for potential buyers.

A similar scenario is playing out in Wheeling, W. Va., and Warren, Ohio, where RG Steel also owns aging and troubled steel production plants. Another 2,000 workers at those two sites are to be laid off indefinitely, and are being provided no information on when, if ever, the plants will be re-opened.

It’s a time of stress, strain and uncertainty for the workers, their families, and their entire communities. RG Steel’s owners and bankers are tight-lipped, while union representatives and local elected officials are powerless to provide any meaningful assurances about the future. Workers are being asked to wait patiently, while the fate of their livelihoods is decided by financiers and steel moguls.

RG Steel did disclose on June 1 that it hoped to sell the plants to unidentified buyers by a self-imposed deadline of July 28. (The disclosure was made not to employees, but to a bankruptcy court judge in Delaware.) Observers cautioned, however, that a stalled steel market and the particular features of the three aging plants means there is no guarantee that a buyer will be found, either in this country or elsewhere.

For the United Steelworkers (USW)—which represents about 3,500 of RG Steel’s 4,000 employees—the situation is a ghastly repeat of recent history. Back in 2010, the same mills faced similar economic and operational problems under a previous owner, the Russian industrial conglomerate Severstal. Faced with closure at that time, USW officials, led by District 1 Director David McCall, helped negotiate an emergency sale to Ira Rennert, a billionaire financier who created RG Steel for the purpose of completing the deal.

USW spokesman Tony Montana says the union is unable to comment on prospects for the future. A “Membership Update” published June 1 said only that union contracts will remain in effect while the union helps RG Steel find a buyer, or buyers, for the company’s assets.

The lack of hard information forced Baltimore Sun reporter Jamie Smith Hopkins this week to head for Micky’s Bar on North Point Boulevard, just outside the main gate of the massive Sparrows Point steel complex. But at the watering hole for workers finishing their shifts at the mill, the reporter learned little. According to her story, RG Steel employee Tyrone Sharpe summed it all up by saying, “Everybody’s just in limbo.”

This lack of communication with workers—or with the larger community in Maryland and elsewhere—is one of the reasons behind RG Steel’s troubles, according to Mark Reutter, journalist and author of an excellent book on the history of the steel plant. His book, Making Steel: Sparrows Point and the Rise and Ruin of American Industrial Might, traced the role of steel manufacturing in the industrialization, and de-industrialization, of the Baltimore area since the plant opened in 1890.

Reutter’s book was first published in 1988 and, as the title indicated, the signs of decline at Sparrows Point were already evident then. More recently, he has been reporting on developments at the mill for Baltimore Brew, a local blog that offers an eclectic mix of reportage on urban affairs. Just days before RG Steel’s bankruptcy filing, he posted a scorching story laying out some of the reasons for the company’s troubles, including the role of absentee landlord Ira Rennert. Reutter’s analysis cast doubt on whether Sparrows Point will ever re-open after the closure this week.

If the RG Steel plants are permanently closed, it will have a significant effect of steel manufacturing employment in the United States, according to the federal Bureau of Labor Statistics (BLS). A 2011 report from BLS pegged total steel manufacturing jobs in the country at 89,970, with about half of that number in the “production occupations” category that includes most of RG Steel workers. That number is a huge decline from 192,360 steel-making jobs reported by BLS in 2001.