Monday, November 19, 2012

5 Ways Most Americans Are Blind to How Their Country Is Stacked for the Wealthy

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Mitt Romney said he wasn't concerned about the very poor, because they have a safety net. This is typical of the widespread ignorance about inequality in our country. Struggling Americans want jobs, not handouts, and for the most part they've paid for their "safety net." The real problem is at the other end of the wealth gap.

How many people know that out of 150 countries, we have the fourth-highest wealth disparity? Only Zimbabwe, Namibia and Switzerland are worse.

It's not just economic inequality that's plaguing our country, it's lack of opportunity. It's a dismissal of poor people as lazy, or as threats to society. More than any other issue over the next four years, we need to address the growing divide in our nation, to tone down our winner-take-all philosophy, to provide job opportunities for people who want to contribute to society.

Here are some of the common misconceptions.

1. Americans believe that the poorest 40 percent own about 10% of the wealth.

Most people greatly underestimate the level of inequality in our country, guessing that the poorest 40 percent own about 10% of the wealth, when in reality they own much less than 1% of the wealth. Out of every dollar, they own a third of a penny.

Factor in race and it gets worse. Much of minority wealth exists in home values. But housing crashed, while the financial wealth owned almost entirely (93% of it) by the richest quintile of Americans has rebounded to lofty pre-recession levels.

As a result, for every dollar of non-home wealth owned by white families, people of color have only 1 cent. Median wealth for a single white woman is over $40,000. For black and Hispanic women it is a little over $100.

2. Entitlements are the problem.

No, they're not. The evidence is overwhelming. Social Security is a popular and well-run program. As summarized by Bernie Sanders, "Social Security, which is funded by the payroll tax, has not contributed one nickel to the deficit, and according to its trustees, can pay 100 percent of all benefits owed to every eligible American for the next 21 years." Dean Baker calls it "perhaps the greatest success story of any program in US history."

Medicare, which is largely without the profit motive and the competing sources of billing, is efficiently run, for all eligible Americans. According to the Council for Affordable Health Insurance, medical administrative costs as a percentage of claims are about three times higher for private insurance than for Medicare. And it's just as popular as Social Security.

3. Welfare benefits are a drag on the economy.

Critics bemoan the amounts of aid being lavished on lower-income Americans, making dubious claims about thousands of dollars going to every poor family. But despite an ever-growing need for jobs and basic living necessities, federal spending on poverty programs is a small part of the budget, and it's been that way for almost 50 years, increasing from 0.8 percent of GDP in 1962 to 1.2 percent of GDP in 2007.

Temporary Assistance for Needy Families (TANF) has dropped significantly over the past 15 years, leaving benefit levels far below the poverty line for most families. Ninety percent of the available benefits go to the elderly, the disabled or working households. For each family, current federal budgets pay about $400 per month for food, housing, and traditional "welfare" programs. Food stamp recipients get $4.30 a day.

4. The American Dream is still alive, if you just work hard enough.

The Horatio Alger tale has been a popular one for conservatives, but the OECD, the Economic Policy Institute and the National Journal all came to the same conclusion: the future earnings of a child in the U.S. is closely correlated to the earnings of his or her parents. This lack of mobility is more prevalent in the U.S. than in almost all other OECD countries.

Only 4 percent of those raised in the bottom quintile make it to the top quintile as adults. Only about 20 percent even make it to the top half.

A big part of the problem is the severe degree of poverty for our nation's children. According to UNICEF, among industrialized countries only Romania has a higher child poverty rate than the United States. Just in the last 10 years the number of impoverished American children increased by 30 percent.

And it's much worse for minorities. While 12 percent of white children live in poverty, 35 percent of Hispanic children and 39% of black children start their lives in conditions that make simple survival more important than the American Dream. Eighty percent of black children who started in or near the top half of U.S. income levels experienced downward mobility later in life.

5. Prison puts away the bad guys.

Despite a falling violent crime rate in the U.S., there are now, as noted by Adam Gopnik, "more people under 'correctional supervision' in America -- more than six million -- than were in the Gulag Archipelago under Stalin at its height."

Almost half of the inmates in federal prisons were jailed for drug offenses. Between 1980 and 2003, the number of drug offenders in prison or jail increased by 1100% from 41,100 in 1980 to 493,800 in 2003. African Americans constituted 53.5 percent of all persons who entered prison because of a drug conviction. In the nation's largest cities, drug arrests for African Americans rose at three times the rate for whites from 1980 to 2003.

In Washington, DC, it is estimated that three out of four young black men will serve time in prison. In New York, with 50,000 marijuana arrests per year, 90% are black or Latino. In Seattle, the 8% black population accounts for 60 percent of the arrests. Over the last 10 years Colorado police have arrested Latinos at 1.5 times the rate of whites, and blacks at over three times the rate of whites. Newly passed marijuana laws reflect the beginnings of a backlash.

Perversely, this is all happening as studies by the Substance Abuse and Mental Health Services Administration find that both black and Hispanic adolescents use drugs less than the general population. And a study by the National Institute of Health shows that the prevalence of marijuana use in colleges and universities was highest for white students.

The greatest misconception: The rich are being soaked.

Redistribution has not spread the wealth, it has concentrated the wealth. Conservative estimates say the richest 1% have doubled their share of America's income in 30 years. It's worse. From 1980 to 2006, the richest 1% actually tripled their share of after-tax income.

The real problem is tax avoidance: lost revenue from tax expenditures (deferrals and deductions), corporate tax avoidance, and tax haven losses could pay off the entire deficit. But the very rich refuse to pay. They have their own safety net in the House of Representatives.

What Is The “Fiscal Cliff”?

The term “fiscal cliff,” first used by Federal Reserve Chairman Ben Bernanke last February, refers to the simultaneous expiration of tax cuts and imposition of spending cuts on January 1, 2013.

The American media has seized on the term “fiscal cliff” and promoted it, in part, to suggest that measures which would otherwise be enormously popular—ending the Bush tax cuts for the wealthy or cutting military spending—are threatening, even dangerous.

The main purpose of the media propaganda about the impending “cliff” is to create a sense of financial emergency and override popular opposition to measures the Obama administration and congressional Democrats and Republicans will put forward to avert it, including sweeping cuts in Medicare, Medicaid and Social Security.

This is bolstered by the reaction in the financial markets, where a sharp sell-off could well serve as a political club to ensure that the policies demanded by Wall Street are adopted in Washington.

Far from an emergency that requires dramatic action to slash the federal deficit, the various components of the “fiscal cliff” are all consequences of legislation passed at various times during the Obama administration and can be averted by the passage of further legislation by Congress, regardless of whether that legislation adds to or subtracts from the deficit.

Deficit reduction is not a requirement of any previous legislation, but a political mandate from the financial aristocracy, which is demanding that its two political parties take joint action to make working people pay for a fiscal crisis that is the product of the 2008 Wall Street crash and the trillions expended to bail out the banks and corporations.

That the deadline is January 1, 2013 is politically revealing. In each of the bipartisan agreements between the Obama White House and congressional Republicans and Democrats—in December 2010, August 2011 and February 2012—the two parties acted deliberately to push back the decision until after the November 2012 elections, in order to prevent the American people from having any say on the measures to be enacted.

The same considerations were at work in the August 2011 agreement to raise the federal debt ceiling, which was increased from $14.3 trillion to $16.4 trillion, a level the Treasury is expected to hit early in 2013, perhaps as soon as mid-February. This will provide an additional pretext for the two big business parties to enact further spending cuts, or it may become part of the proposed “grand bargain” between the Obama administration and congressional leaders.

There are at least seven distinct tax and spending measures that will take effect at the end of the year, with a significant effect on the jobs and living standards of the vast majority of the American people. The estimate produced by the Economic Policy Institute, a liberal Washington think tank, places the total impact at $732 billion.

Expiration of the Bush tax cuts—$202 billion

The largest item is the expiration of the tax cuts first enacted under the Bush administration in 2001, originally to expire January 1, 2011. A deal between Obama and the congressional Republican leadership in December 2010 extended these tax cuts for two years, to January 1, 2013, as Obama capitulated to the refusal of the Republicans to accept any separation between the tax cuts for the wealthy and those for lower- and middle-income families. The deal also extended estate taxes at the low rate that prevailed in 2009.

The same issue is posed in the talks between the White House and Congress set to begin formally this Friday, with Obama again claiming to oppose any extension of the tax cuts for families making more than $250,000 a year or individuals making more than $200,000 a year. These upper-income tax cuts alone account for $52 billion of the total.

Drawing such an income line would require passage of legislation by both the Democratic-controlled Senate and the Republican-controlled House. If Congress deadlocks or Obama vetoes an extension, the tax cuts would expire for all income levels and the average working class family would see a significant reduction in take-home pay.

Across-the-board spending cuts—$128 billion

Spending cuts totaling close to $1 trillion over ten years will begin in January, with the specific programs to be selected by the Obama administration based on a 50-50 split between domestic and military programs. These cuts were part of the August 2011 deal between the White House and congressional Republicans to raise the federal debt ceiling.

This agreement enacted spending cuts of more than $1 trillion and provided for an additional $1 trillion in automatic cuts if a special congressional committee failed to reach agreement on further deficit-reduction. The so-called supercommittee deadlocked in December 2011, triggering the cuts that begin taking effect this January.

These include $50 billion in delayed impact from the initial round of cuts and $78 billion more in the so-called “sequester.”

Expiration of payroll tax cut—$115 billion

The payroll tax that underwrites Social Security and Medicare was temporarily cut from 6.2 percent to 3.1 percent in December 2010, and that cut was extended through the end of this year in February 2012. The expiration of this tax cut will be felt as a 3.1 percent reduction in income for low- and middle-income families, more than the typical pay increase. It will mean a significant drop in real income.

Expiration of extended unemployment benefits—$39 billion

These benefits were coupled to the payroll tax cut as “stimulus” measures in both the December 2010 and February 2012 bipartisan agreements, but in the second deal the Democrats accepted a Republican demand to reduce the duration of extended benefits from 99 weeks to the current 73 weeks for the hardest-hit states, and from 93 weeks to only 63 weeks for most states.

Now, even this inadequate level of benefits for the long-term unemployed is set to end, under conditions where more than five million workers have been out of work for six months or longer. One million long-term unemployed workers who have exhausted all state benefits will lose their extended federal benefits January 1, and a further one million will lose benefits in the first quarter of 2013.

Expansion of the Alternative Minimum Tax—$114 billion

The AMT, first enacted in the 1960s as a measure against tax evasion by the super-rich, was never indexed for inflation, so tens of millions of upper-middle-income families could now come under its provisions. Congress has repeatedly adopted temporary “fixes” to delay imposition of the tax, most recently in December 2010, limited to taxes on 2011 income.

If another “fix” is not adopted, or the AMT is not fully indexed for inflation retroactively, the number of families required to pay the AMT will rise from four million to 30 million next year, sharply increasing the tax bills these families will pay for income earned in 2012.

Expiration of miscellaneous tax provisions—$120 billion

As many as 80 provisions of the 2009 stimulus legislation introduced by the Obama administration and enacted by a Democratic-controlled Congress, or adopted in subsequent deals in December 2010 and February 2012, have either expired this year or will expire January 1. Most of these are incentives to business—$109 billion—while a small fraction, about $11 billion, represents tax credits or expanded deductions for working families.

Mandated cuts in Medicare reimbursement—$14 billion

The 1997 Balanced Budget Act, negotiated by the Clinton administration and then-House Speaker Newt Gingrich, established what was titled the Medicare sustainable growth rate, or SGR, to restrain the growth of payments to health care providers under Medicare. The SGR provision has never actually been put into practice, as pressure from hospitals and the American Medical Association has induced Congress to enact repeated versions of one-time provisions known in Washington jargon as the “doc fix.”

The most recent versions were incorporated into the December 2010 and February 2012 bipartisan agreements under the Obama administration. The latest one expires on January 1, 2013. If the much lower ceiling is imposed, with Medicare reimbursement cut by 27 percent, many doctors and hospitals may stop accepting new Medicare patients and even phase out treating current patients.

How Germany Is Getting to 100 Percent Renewable Energy

There is no debate on climate change in Germany. The temperature for the past 10 months has been 3 degrees above average and we’re again on course for the warmest year on record. There’s no dispute among Germans as to whether this change is man-made, or that we contribute to it and need to stop accelerating the process.

Since 2000, Germany has converted 25 percent of its power grid to renewable energy sources such as solar, wind and biomass. The architects of the clean energy movement Energiewende, which translates to “energy transformation,” estimate that from 80 percent to 100 percent of Germany’s electricity will come from renewable sources by 2050.

Germans are baffled that the United States has not taken the same path. Not only is the U.S. the wealthiest nation in the world, but it’s also credited with jump-starting Germany’s green movement 40 years ago.

“This is a very American idea,” Arne Jungjohann, a director at the Heinrich Boll Stiftung Foundation (HBSF), said at a news conference Tuesday morning in Washington, D.C. “We got this from Jimmy Carter.”

Germany adopted and continued Carter’s push for energy conservation while the U.S. abandoned further efforts. The death of an American Energiewende solidified when President Ronald Reagan ripped down the solar panels atop the White House that Carter had installed.

Since then, Germany has created strong incentives for the public to invest in renewable energy. It pays people to generate electricity from solar panels on their houses. The effort to turn more consumers into producers is accelerated through feed-in tariffs, which are 20-year contracts that ensure a fixed price the government will pay. Germany lowers the price every year, so there’s good reason to sign one as soon as possible, before compensation falls further.

The money the government uses to pay producers comes from a monthly surcharge on utility bills that everyone pays, similar to a rebate. Customers pay an additional cost for the renewable energy fund and then get that money back from the government, at a profit, if they are producing their own energy.

In the end, ratepayers control the program, not the government. This adds consistency, writer Osha Gray Davidson says. If the government itself paid, it would be easy for a new finance minister to cut the program upon taking office. Funding is not at the whim of politicians as it is in the U.S.

“Everyone has skin in the game,” says Davidson. “The movement is decentralized and democratized, and that’s why it works. Anybody in Germany can be a utility.”

The news conference the foundation organized with InsideClimate News comes two weeks after one of the biggest storms in U.S. history and sits in the shadow of the Keystone XL Pipeline, which would unlock the world’s second-largest oil reserve in Canada. The event also comes one day after a report that says that the U.S. is on track to become the leading oil and gas producer by 2020, which suggests that the U.S. has the capability to match Germany’s green movement, but is instead using its resources to deepen its dependency on fossil fuels.

Many community organizers have given up on government and are moving to spark a green movement in the U.S. through energy cooperatives.

Anya Schoolman is a D.C. organizer who has started many co-ops in the district although she began with no experience. She says that converting to renewable energy one person at a time would not work in the U.S. because of legal complexities and tax laws that discourage people from investing in clean energy.

Grid managers in the U.S., she explains, often require households to turn off wind turbines at night, a practice called “curtailment.”

“It’s a favor to the utility companies,” she says, which don’t hold as much power in Germany as they do in the United States.

Individuals and cooperatives own 65 percent of Germany’s renewable energy capacity. In the U.S. they own 2 percent. The rest is privately controlled.

The largest difference, panelists said, between Germany and the U.S. is how reactive the government is to its citizens. Democracy in Germany has meant keeping and strengthening regulatory agencies while forming policies that put public ownership ahead of private ownership.

“In the end,” says Davidson, who spent a month in Germany studying the Energiewende, “it isn’t about making money. It’s about quality of life.”

The Worst Economic Numbers In More Than A Year

With everything else that is going on in the world, a lot of people have failed to notice that we are seeing some of the worst economic numbers that we have seen in more than a year.  For example, it was announced on Thursday that initial claims for unemployment benefits have hit their highest level in a year and a half.  Hopefully this is just a temporary blip in the data, because initial unemployment claims tend to have a very strong correlation with the overall performance of the economy.  We also continue to see poverty statistics rise.  According to government statistics released earlier this month, the number of Americans living in poverty and the number of Americans on food stamps are both at all-time record highs.  Meanwhile, the Dow and the S&P 500 are both down more than 5 percent since the election and the U.S. government rolled up 22 billion dollars more debt in October 2012 than it did in October 2011.  The unfortunate truth is that things are not getting better.  The U.S. economy continues to become weaker and more unstable, and there are a whole lot of reasons to be very pessimistic about our economic situation as we move into the winter months. Let's take a closer look at some of the troubling economic numbers that have been released in recent days...

Initial Claims For Unemployment Benefits

The optimism that many analysts had about jobs is rapidly dissipating.  Over the past few weeks there has been a huge wave of companies announcing layoffs.  Just check out this article and this article.

But now we are actually seeing a significant rise in the number of American workers applying for unemployment benefits.  Initial claims for unemployment benefits soared to 439,000 for the week ending November 10th.  This is the highest level that we have seen in more than a year.  The last time initial claims were this high was April 2011.  It is interesting to note that the largest numbers of new unemployment claims came from the swing states of Ohio and Pennsylvania.

Record Food Stamp Numbers

In dozens of articles I have carefully documented the steady rise of poverty in America and the steady decline of the middle class.

Even though our politicians insist that we are in the middle of an "economic recovery", the number of Americans dependent on the government for their very survival just continues to keep going up.

A few days ago, the latest food stamp numbers were released.  It turns out that the number of Americans on food stamps increased by 420,947 from July to August.  That was the largest one month increase that we have seen in a year.  At this point, an all-time record 47.1 million Americans are enrolled in the food stamp program.  What would that look like if all of those people had to actually stand outside in bread lines like in the old days?

Stunning Stock Market Declines

A few days ago, I wrote about how many wealthy Americans are dumping stocks and other financial assets in anticipation of the looming "fiscal cliff".

Well, if things get much worse we may soon have a "market crash" on our hands.

The Dow and the S&P 500 are both down by more than 5 percent since the election and many are wondering if things are about to get a whole lot worse.

Shares of Apple are down by 25 percent since late September.  Some analysts are actually using the term "panic selling" to describe what is happening to the stock.

Slowing Economic Activity

All over America there are indications that economic activity is starting to slow down.  Is Superstorm Sandy responsible for this, or are there other factors at work?

According to the Federal Reserve Bank of New York, economic activity appears to be contracting in areas that were hit particularly hard by Superstorm Sandy...

The Federal Reserve Bank of New York’s general economic index was minus 5.2 this month after minus 6.2 in October. Readings of less than zero signal contraction in New York, northern New Jersey and southern Connecticut.
Things appear to be slowing down in the mid-Atlantic region as well.  According to CNBC, manufacturing activity in the mid-Atlantic region has contracted much faster than analysts were projecting...

The Philadelphia Federal Reserve Bank said its business activity index slumped to -10.7 from 5.7 the month before. The fall was much steeper than economists' expectations for slippage to a reading of 2.0, according to a Reuters poll.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey, and Delaware.
New Poverty Numbers

More American families are falling out of the middle class every single day.

New numbers that were just released by the U.S. Census Bureau show that the number of Americans living in poverty rose to a new all-time record of 49.7 million last year.

Once upon a time, people would have laughed at you if you suggested that someday 50 million Americans would be living in poverty.

But here we are.

Soaring Government Debt

Anyone that follows my columns on a regular basis knows that government debt is one of my major pet peeves.

Well, despite all of the "budget deals" that have been made between the Republicans and the Democrats, the amount of debt that we are accumulating just continues to balloon in size.

The federal budget deficit for October 2012 was 120 billion dollars.  That was a huge increase over the October 2011 federal budget deficit of 98 billion dollars.

How long can we possibly continue to do this?

Things In Europe Are Getting Worse Too

In case you had not noticed, the economic situation in Europe continues to unravel as well.  The eurozone is officially in a recession once again, and unemployment in the eurozone is at an all-time record high.  Violent protests and rioting happen on an almost daily basis over in Europe now.  The largest economy on the planet continues to implode right in front of our eyes, and this is another factor that will continue to drag down the U.S. economy.

So is there anyone out there that actually still believes that things are "getting better"?

The brief period of economic stability that we have been experiencing is rapidly coming to an end.  The "recovery" turned out to be extremely disappointing, and now the next major downturn is almost here.

Euro Zone Falls Into Second Recession Since 2009

The euro zone debt crisis dragged the bloc into its second recession since 2009 in the third quarter despite modest growth in Germany and France, data showed on Thursday.

The French and German economies both managed 0.2 percent growth in the July-to-September period but their resilience could not save the 17-nation bloc from contraction as the likes of The Netherlands, Spain, Italy and Austria shrank.

Economic output in the euro zone fell 0.1 percent in the quarter, following a 0.2 percent drop in the second quarter.

Those two quarters of contraction put the euro zone's 9.4 trillion euro ($12 trillion) economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.

A rebound in Europe is still far off. The debt crisis that began in Greece in late 2009 is still reverberating around the globe and holding back a lasting recovery.

Analysts said even the euro zone's top two economies were likely to succumb in the final three months of the year.

"That was the last good number Germany for the time being," said Joerg Kraemer, chief economist at Commerzbank. "I don't expect the German economy to return to decent growth rates until the middle of next year.

Most economists expect Germany to contract in the fourth quarter for the first time since the end of 2011. And where Germany goes, France is likely to follow.

"We expect the French economy to contract again in the final quarter of this year," said Joost Beaumont of ABN Amro.

For all of 2012, the European Commission sees the euro zone contracting 0.4 percent, while growing just 0.1 percent in 2013. Business surveys point to difficult times ahead and the public's backlash to austerity policies is growing.

A Reuters poll of more than 70 economists predicted the bloc's new recession will extend until the end of the year and 2013 promises little better than stagnation, in line with what the Commission is forecasting.

Conducted before Thursday's data were released, the consensus was for a 2012 contraction of 0.5 percent and just 0.1 percent growth next year.

Millions of workers went on strike across Europe on Wednesday to protest the government spending cuts they say are driving the region into a deeper malaise but which Germany and the Commission say are crucial to healing the wounds of a decade-long, credit-fuelled boom.

"We are now getting into a double dip recession which is entirely self-made," said Paul De Grauwe, an economist with the London School of Economics. "It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else," he said.


The Commission says the euro zone's economies will be much healthier overall next year than in 2009, which was the nadir of bloated budgets when Greece's fiscal deficit reached a record 15.6 percent of GDP and Ireland was not far off at 13.9 percent.

The threat of a euro zone break up has also diminished after the European Central Bank promised to buy euro zone government bonds in potentially unlimited amounts, should a country first seek help from the bloc's permanent rescue fund.

There have been fledgling signs the Italian economy is improving. Consumer confidence has risen and the pace at which industrial output has fallen is slowing.

Nonetheless, the country's "acquired growth" at the end of the third quarter stood at -2.0 percent, meaning that if GDP is flat in the final three months of the year, the economy will have shrunk by two percent over the year as a whole.

Spain, which has kept the euro zone on tenterhooks over a decision on whether or not to seek help from the euro zone rescue fund, is also in recession. It contracted 0.3 percent in the third quarter.

The Dutch economy shrank much more sharply than expected, by 1.1 percent on a quarterly basis, the biggest drop in the quarter of any euro zone country. Austria's economy contracted 0.1 percent. Tiny Cyprus shrank 0.5 percent.

Figures out earlier this week showed the Portuguese economy shrank 0.8 percent quarter-on-quarter while Greece tumbled further, casting doubt on whether Athens and its lenders can come up with a credible plan to put its finances back on track.

EU policymakers seem aware that government spending cuts cannot keep up at the current pace, particularly after shocking suicides in Spain by people who had their homes repossessed.

Spain's Economy Minister Luis De Guindos has repeatedly called for EU-mandated budget cuts to take into account the euro zone's recession, while Greece has been given two more years to make the cuts demanded of it.

"The last couple of days have created a new momentum for a change in policy, because up until this week, social tension was not part of the equation," said Steen Jakobsen, chief economist at Saxobank. "It seems like the tone has shifted dramatically."

Jobless Claims in U.S. Jumped To Highest Level In A Year And A Half

More Americans than forecast submitted claims for unemployment insurance and factory production declined in the northeastern U.S. after superstorm Sandy struck the region.

Applications for jobless benefits surged by 78,000 to 439,000 in the week ended Nov. 10, the most since April 2011, the Labor Department said today in Washington. Indexes of manufacturing in the New York and Philadelphia areas showed contractions this month.

The reports add to evidence of the economic toll taken by Sandy, which killed more than 100 people in the U.S., disrupted rail and subway service, left more than 8 million homes and businesses without power for days and caused insured losses estimated at $20 billion. Many of those who lost their jobs were unable to immediately file claims because of the disruption caused by the storm, swelling the numbers last week.

“People were thrown out of work because of the storm, which is exactly what happened after Katrina,” which struck the Gulf Coast in 2005, said Jeffrey Herzog, a senior economist at Oxford Economics Ltd. in New York, who projected claims would climb to 410,000. “The infrastructure was hit in such a way that it will damage transportation and port links, which will take a long time to come back online.”

Stocks declined as U.S. lawmakers prepared for budget talks. The Standard & Poor’s 500 Index dropped 0.2 percent to 1,353.33 at the close in New York.

Europe Recession

In Europe, the euro-area economy succumbed to a recession for the second time in four years as governments imposed tougher budget cuts and leaders struggled to contain the debt crisis that broke out in October 2009.

Gross domestic product in the 17-nation bloc slipped 0.1 percent in the third quarter after a 0.2 percent decline in the previous three months, the European Union’s statistics office in Luxembourg said today.

Another report today from the U.S. Labor Department showed the consumer price index rose 0.1 percent in October, the smallest gain in three months. The so-called core measure, which excludes more volatile food and energy costs, increased 0.2 percent.

Jobless claims were projected to rise to 375,000 from the prior week, according to the median estimate of 49 economists surveyed by Bloomberg. Estimates ranged from 340,000 to 475,000.

Revised Up

The prior week’s reading was revised up to 361,000 from an originally reported 355,000. A less-volatile measure of claims, the four-week moving average, rose to 383,750 from 372,000, today’s report showed.

Sandy struck the Northeast region, including New York and New Jersey, as it came ashore Oct. 29, and those who lost their jobs because the storm shuttered businesses may keep filing claims in coming weeks. Today’s report showed a loss of electricity prevented New York offices from taking claims two weeks ago.

“You have a double whammy this week, where people were filing claims they were unable to previously and individuals unable to work for the storm were filing additional claims,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York.

The extent of the damage means it may take weeks for the underlying trend in firings to again become clear. Before the storm, the labor market was gaining momentum even as year-end domestic fiscal policy uncertainties raised concern among businesses.

Additional Challenge

Sandy posed an additional challenge to manufacturers already affected by the recession in Europe, which has limited export orders, and concerns about the so-called fiscal cliff of $607 billion of spending cuts and tax increases set to take effect in January unless Congress acts.

“Capital expenditures look to be slowing in earnest,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets LLC in New York. “In addition to the fiscal cliff and uncertainty, we’ve had a synchronous slowing in global manufacturing that’s affecting us here at home.”

The Federal Reserve Bank of New York’s general economic index was minus 5.2 this month after minus 6.2 in October. Readings of less than zero signal contraction in New York, northern New Jersey and southern Connecticut.

Philadelphia Index

The Philadelphia Fed’s economic index, which covers eastern Pennsylvania, southern New Jersey and Delaware, decreased to minus 10.7 in November from 5.7 a month earlier. Economists forecast the gauge would decline to 2, according to the median projection in a Bloomberg survey.

Trucks that deliver fuel to retail stations in New Jersey are facing waits more than twice as long as normal as some regional loading terminals remain offline.

Hess Corp. (HES) resumed limited marine operations at its Bayonne terminal in New Jersey Nov. 12, the company said in a statement. Rack operations, or truck loadings, remain suspended, as the site works to return to normal operations.

The storm has also taken a toll on shopping malls and auto showrooms. Retail sales in the U.S. fell 0.3 percent in October after a 1.3 percent increase in September, a Commerce Department report showed yesterday.

Food Services

Philadelphia-based food service company Aramark Corp. was also affected, L. Frederick Sutherland, executive vice president and chief financial officer, said on a Nov. 14 earnings call. “Some of those operations are still not open or still not fully operational,” he said, citing damage at a Long Island depot, disruptions at a Newark plant and power outages at sites in Cherry Hill, New Jersey and Reading, Pennsylvania.

The storm probably caused around $40 billion in damage and will subtract 0.2 percentage point from economic growth in the fourth quarter, which will be made up in the first quarter of 2013, said Herzog at Oxford Economics.

“Some people will be out of work for a short period of time, but it’s not going to alter our view on longer-term economic growth,” he said.

Sandy will cut 0.15 percentage point from growth in the fourth quarter of this year, according to the median forecast in a Bloomberg survey of economists conducted Oct. 30-31. In the first quarter of next year, it will add 0.1 point to growth as damaged property is rebuilt. The economy expanded at a 2 percent annual pace in the third quarter.

The storm may bolster homebuilders and other housing repair companies. Sandy’s damage could spur a sales boost similar to the one provided by Hurricane Irene, which added about $360 million in sales last year, executives at Home Depot Inc. (HD) said on a Nov. 13 earnings call.

“The property damage, as we understand it, related to Irene was about $16 billion; the property damage for Sandy is about $20 billion, so it would suggest possibly higher sales, but it’s impossible for us to know right now,” said Carol Tome, the Atlanta-based company’s chief financial officer.

Fighting ‘Terrorism’ or Repressing Democracy? Britain’s System of Mass Surveillance

The focus of critiques of authoritarianism today lies increasingly in the use by liberal governments of ‘exceptional’ powers.  These are powers in which an imminent threat to national security is judged to be of such importance as to warrant the restriction of liberties and other socially repressive measures in order to protect national security.  ‘Terrorism’ has offered a particularly salient source of justification for a level of social repression that would be intolerable in normal times.   A dominant line of criticism is that the use of exceptional powers to this end has gone too far.  Critics emphasise the need to curtail such power by bringing it into line with basic human rights standards.[1]

As pertinent as this critique may be, focus on the proper extent of the social repression tends to assume, Scheuerman, Herman and Peterson point out, that there is a real threat (e.g., terrorism) and that repression by an expansion of executive authority is itself an appropriate response to that threat.[2]  A less noticed yet critical feature of governments’ use of anti-terror power is the prior erosion of democratic oversight and control which has enabled repression to appear a plausible response to what is, in many respects, an as yet unspecified threat.[3]

The erosion is essentially three-pronged.  The first aspect of democratic control to have been eroded is the power to define what constitutes a threat.  In the absence of meaningful control, governments are able, Clive Walker explains, to ascribe to whatever political violence is being encountered, attributes of novelty and extraordinary seriousness so as to justify correspondingly alarming incursions into individuals rights and democratic accountability.[4]

Governments are able to do so in no small part because of the semantic fog that surrounds the core concepts of national security, threat and terrorism by which exceptional powers are usually evoked.  Terrorism, for instance, is a concept that resists consistent definition.[5]  Commonly understood by governments as the use or threat of use of serious violence to advance a cause, the term elides legitimate resistance to occupation and oppression with ‘senseless destruction’.  Furthermore, by relegating all terrorists to the criminal sphere, the term delegitimises any political content that acts regarded by authorities as terrorist may have.  This helps to obscure from the public the reasons why people resort to such acts.[6]  It also enables the police character of the proper response to be presumed.

This brings us to the second aspect of democratic control to have been eroded, namely, the power to determine proper responses to threats.  Responses are deemed automatically to require a dramatic expansion in the scope of executive authority, a requirement that is heightened the more an atmosphere of fear can be created such as by declaring a ‘war on terror’.[7]  This response is alarming, Walker suggests, because governments may assume repressive powers unimaginable outwith dictatorial states.  In Britain, for example, these now include powers to curtail critical liberties (e.g., speech, movement, assembly, protest, work, privacy), suspend habeas corpus and use armed forces to deal with domestic disturbances – all on the basis of ‘threats’ which the government assumes the power to define.[8]

The third aspect of the erosion concerns the capacity to review the use of both powers.  Incursions into democratic accountability include, Walker continues, growing immunity from parliamentary and judicial control in the exercise of these powers.[9]  It goes without saying, Girvan LJ points out, that the “dangers to the integrity of society and of citizens’ lives” of undermining accountability in the use of exceptional powers were “amply demonstrated in the Fascist and totalitarian regimes of Europe”.[10]

In short, the reported terrorism crisis is also part of an ongoing actual crisis of democracy.

A case in point is the British government’s plans to monitor the entire population’s electronic communication on grounds that this is ‘necessary to fight serious crime and terrorism’.[11]  Criticism of the plans is various and detailed, and has centred on the invasion of privacy.[12]  Many regard plans for intensified surveillance as a ‘snooper’s charter’.  This is because they mandate a shift from monitoring communications on the basis of individual suspicion to the indiscriminate stockpiling of individual data – essentially blanket surveillance of the population – for a future unspecified purpose.

As pertinent as the objection may be, limiting criticism to the extent of the government’s response leaves unquestioned the plausibility of the alleged threat and the merits of expanding executive power as a proper response to that threat.  It would be useful to broaden criticism to take account of how the threat has been defined, and the proper response to it determined.  To do so, it must look deeper into the extent to which democratic control has been eroded, as this is an obstacle to any viable opposition to mass surveillance and related socially repressive measures.  Doing so would enable criticism to cast into sharp relief some of the most pressing questions concerning democracy and liberty in our times.

As part of a more precise characterisation of the erosion of democratic control, it would also be useful to see outlined some legally relevant aspects of this process, particularly given that legal challenge is likely if the government’s surveillance plans become law.  Three aspects stand out.  They follow from the fact that because mass surveillance would breach of peoples’ right to privacy guaranteed inter alia under the European Convention on Human Rights, the onus will be on the government to demonstrate that this breach is nonetheless justifiable.  To do so, the government must show that mass surveillance is (a) necessary in a democratic society for (b) the achievement of a legitimate end and (c) is proportionate to that end.  The more any legal challenge takes account of the wider decline of democratic control, the less likely it is that the government should be able to show, in each of these three respects, that mass surveillance is justified.

Legitimate end?

An example of a significant end that could justify breaching the right to privacy may be reasons of national security.  Since fighting terrorism is such a reason, mass surveillance could, according to official views in Britain and the EU, be justified as a way of preventing

acts or threats intended to influence the government or intimidate the public which, for the purpose of advancing a political, religious or ideological cause, are violent, damaging or disrupting and which include those that seriously destabilise the fundamental political, constitutional, economic or social structures of a country.[13]

Two difficulties undermine the idea that ‘fighting terrorism’ might serve as a legitimate end by which to justify mass surveillance.

Repressing democracy

The first difficulty is a growing tendency to expand the use of anti-terror powers from suspects to the public, especially certain non-violent social movements.[14]  This problem is made possible by the breadth of official definitions of terrorism: the very purpose of many social movements is to ‘influence governments’ by means such as protest which is by definition ‘disruptive’.  Particularly targeted are movements from environmental to social movements such as Occupy which are unified by resistance to the kind of ‘destabilisation of basic political, constitutional, economic and social structures’ that, it is claimed, follows from re-organisation of society around the market, in particular, financial markets.[15]  The problem for government lies in showing how repressing popular democratic expression in this way – a litmus test for the democratic constitutional state, according to Jürgen Habermas[16] – could possibly be a legitimate end in a democratic society.  This problem turns not only on a definition of terrorism that is sufficiently broad to permit authorities to generalise suspicion, criminalise certain behaviour and sanction surveillance and preventative detention.  The problem also turns, more fundamentally, as is explained below, on a basic incoherence in the government’s view of democracy itself.

Involvement in terrorism

Even if it can be somehow shown that repressing democratic expression is legitimate in a democracy, a second difficulty lies in the government’s involvement in terrorism, as defined.  The definition preferred by government is sufficiently broad to capture two forms of terrorism with which it has involvement.  For the sake of simplicity, these may be regarded, following Edward Herman, as ‘retail’ and ‘wholesale’ forms.[17]

‘Retail terrorism’ refers to individuals and small groups which are typically responsible for several hundred to several thousand casualties per year worldwide.[18]  Recent analysis reveals involvement by successive British governments in financing, the training of, and logistical support and component supply for many groups.[19]  Analysis suggests that involvement is motivated chiefly by ideological causes (a) of maintaining influence in world affairs, which helps explain why involvement centres on resource-rich and strategically useful countries, and (b) of protecting that influence from threats, which helps explain why support is given to groups in those countries unified by a common hostility to popular democracy, socialism and national secularism.[20]

‘Wholesale terrorism’ refers to the activities of major institutions capable of far greater harm such as states which, Mark Curtis explains, are “responsible for far more deaths in many more countries than [retail] terrorism”.[21]  Government involvement in wholesale terrorism is widespread.[22]  Two areas stand out.  The first is repressive geo-strategic foreign policy.  Motivated by similar ideological aims of maintaining influence and of enabling concentrations of private power to shape foreign economic affairs, repressive foreign policy from Malaya, Kenya and Iran to more recent examples such as Chechnya and Iraq has ranged from illegal sanctions and covert operations to active support for other government’s violence.[23]  Since World War II, it is possible to attribute, Curtis continues, several million deaths to such policies.[24]  It is also possible to attribute to them an appreciable if unsurprising escalation in the risk of (retail) terrorism – a risk heightened where local resistance is criminalised and denied restitution.[25]

The second area in which the government has involvement lies in domestic policies which permit, rather than (say) criminalise, wholesale harms from private power itself.  Permitted for similar ideological reasons, harms include (a) the ‘destabilisation of the basic structures’ of entire countries by financial institutions such as by means of induced crises forcing ‘austerity’ onto sovereign nations; (b) the ‘intimidation’ of governments by multinational corporations in order to drive political change to provide suitable investment climates by means of capital flight, investment strike and attacks on currencies; and (c) various kinds of direct ‘violence and damage’ to people, property and planet.[26]

Taken together, the problem the government would face is to justify mass surveillance as means of fighting terrorism in light of mounting evidence that certain forms are permitted, supported, created and perpetrated.


Even if a legitimate end can be established, doubts arise about whether surveillance is proportionate to that end.

A selective response?

It is unclear why, when appeasement characterises government policy to (much) wholesale terrorism in ways indicated above, the comparatively limited effects of retail terrorism – in the range of up to several thousand casualties per annum worldwide – should warrant such pervasive and repressive domestic measures as mass surveillance.

A crude comparison with resources devoted to public survival elsewhere may be instructive.  The current expenditure on counter-terrorism measures of some £3 billion per annum[27] and an annualised average death rate in Britain attributed to terrorism of five – a number that compares with those killed by wasp and bee stings and is one-sixth of the number of people who drown in the bath each year, – amounts roughly to £60 million per fatality.[28]  In contrast, at £18.2 billion government spending on cardiovascular disease healthcare and research, which kills some 250,000 people annually, works out roughly at £7-10,000 per fatality.[29]  Similar figures are found for annual deaths from cancer (150,000), air pollution (39,000; much of it from traffic) and traffic accidents (3,000).[30]  Although the comparison is crude, it follows at least that even a small increase in efforts to combat these and other serious non-terrorist threats would, Thomas Pogge explains, do much more to protect public survival, at lower cost, than would escalating a fight against an unspecified, perhaps unspecifiable, threat.[31]

Advancing the goals of terrorism?

A further problem lies in ways in which mass surveillance advances the apparent aims of certain retail terrorists.  These aims, as former Home Office secretary, Charles Clarke declared to the European Parliament, are to destroy “many hard-fought rights [such] as the right to privacy [and] the right to free speech”.  Mass surveillance undermines these rights – and thus appears disproportionate – because it obliterates any distinction between law-abiding and law-breaking citizens: every citizen is to be treated like a potential criminal to be monitored without warrant or reason.

The suspicion of disproportionality deepens in light of two wider, disturbing incursions into individual rights and democratic accountability with which surveillance plans are linked.  The first concerns wider surveillance measures developed by the EU to create a database on all European citizens.[32]  The aim, as an EU Council Presidency paper makes plain, is to create a detailed digital record…[of] every object the individual uses, every transaction they make and almost everywhere they go.[33]

The second incursion follows from the ever-increasing scope of executive power.  Incursions, to expand upon some already indicated, follow from the executive’s

-          power to curtail critical liberties, suspend habeas corpus and use armed forces to deal with domestic disturbances;

-          growing immunity from parliamentary and judicial control in the exercise of these powers; and

-          power, reminiscent of the German Enabling Act 1933, to amend and repeal almost any legislation, subject to vague and entirely subjective restraints, by decree and without recourse to Parliament – such as might render legal the government’s involvement with the US in abduction, torture and assassination.[34]

Such is the extent of these incursions into ‘hard-fought’ individual rights and democratic accountability that former MI5 chief, Stella Rimington, concedes that, unbeknown to much of the public, Britain appears to have been turned into a police state.[35]  If one adds to these incursions the proposed surveillance, then it is difficult to escape the conclusion, Curtis continues, that the greater threat to the public, to its liberty and to what remains of democracy lies in “the policies of our own government”.  This outcome appears a qualified victory for certain terrorists.  For they have, Jean Baudrillard notes, induced in the West a climate of fear and obsession with security, which is itself a veiled form of permanent terror.[36]

A proportionate response

This idea of ‘fighting terrorism’ by means which actually advance its alleged aims should be contrasted with more mature responses such as that of Norway.  Barely five days after Anders Breivik murdered 77 people, the Norwegian prime minister responded not by cracking down on civil liberties but by a pledge not to allow a fanatic to succeed in eroding Norway’s democracy:

the Norwegian response to violence is more democracy, more openness and greater political participation.[37]

Necessary in a democratic society?

Even if mass surveillance might be proportionate to a legitimate end, it must also be shown to be necessary in a democratic society.  Problems here are both specific and general in nature.

Specific difficulties

While mass surveillance may well help fight serious crime and terrorism, this does not mean that it is necessary to that end.  It merely means that it is expedient to that end.  To claim that mass surveillance is necessary implies that these problems could not be resolved unless it were imposed.  This assumes that the police would be ineffective without it.  The assumption is difficult to sustain for two reasons.  First, mass surveillance is proposed at time when killings and related serious crime are fewer than at any time in almost thirty years[38] and when, according to the Home Office, “counter-terrorism work has made significant progress over the last ten years” to such an extent that “al Qa’ida”, for instance “is weaker than at any time since 9/11”.[39]  Second, it is already quite possible with proper permission and oversight to monitor people suspected of terrorism and serious crimes.  Consequently, the claim to be unable to deal with serious crime and terrorism except by removing what remains of personal privacy seems at best an admission of incompetence.

In any case, the government’s involvement in terrorism undermines the argument for necessity.  It is actively preventing the achievement of the declared legitimate end (fighting terrorism) for which surveillance is supposedly necessary means.  If the government were at all serious about fighting terrorism then it should, as Chomsky remarks, first stop participating in it.

General difficulties

Proving the necessity of mass surveillance requires, Keith Ewing explains, a “theory of democracy by which to determine whether a restriction on a [European] Convention [on Human Rights] right can be justified”.[40]  A problem lies in the fact that, as Girvan LJ suggests, mass surveillance, while acceptable with totalitarian regimes, is antithetical to a democratic society.  It is antithetical because, as the House of Lords Constitution Committee explains, since

privacy is an essential pre-requisite to the exercise of individual freedom, its erosion weakens the constitutional foundations on which democracy… ha[s] traditionally been based.[41]

The difficulty of formulating a theory of democracy by which the breach of privacy may be justified deepens in light of incoherence in the government’s view of democracy.  The incoherence may be observed in the argument for exceptional powers in general and for mass surveillance in particular.  It is an argument, Tony Bunyan notes, that assumes that “everyone accepts that the ‘threats’” which the government proclaims are real and that addressing them requires incursions into civil liberty and democratic accountability.[42]  It follows that if national security requires, Bunyan continues, that the state

sets the limits, boundaries and sanctions of all peoples’ actions [including peoples’ telecommunication, then] there can be no individual freedom, except that sanctioned by the state.[43]

This is to say that when the state assumes exclusive power to define the nature of a threat, and the appropriate means to deal with that threat, it may also define the extent of individual liberty.  Individual freedom becomes at most little more than a discretionary grant subject to executive will; at worst, national ‘security’ becomes code for social repression.

In a framework in which the state determines which liberties to grant to which individuals, political liberty is effectively possessed by the state.  The source of sovereignty resides in the state, much as it did for Hobbes, rather than in the individual.  As Karma Nabulsi explains, this kind of ‘social contract’ affirms a theory of state, but it is far from a democratic one.[44]  Elementary to a nominally democratic social contract (or similar democratic model) such as those expressed by the likes of J.S. Mill, Kant and Rousseau is the view that protection of citizens’ liberty, particularly political liberty, is a supreme good.  In this contract, the sovereign citizen does not surrender sovereignty, but instead delegates specific powers and functions to the state.  Because political sovereignty is not transferred to the state, both civil rights and political liberties are inalienable.  These include the right to define the public good and threats to it, the right to deliberate and determine laws including those which address threats, and the right to adequately review both.

Genuine democratic governance would by definition structure political power toward the public good.  It would do so in part by encouraging, rather than excluding, considered public participation in the definition and determination of the public good.  An essential preliminary to this would be to prevent those who benefit from social repression from exerting undue influence on the exercise of that power.  A particular priority would therefore be to dismantle the growing union of state and private power – some harmful consequences of which have been observed (see ‘legitimate end’).  In their place would appear viable and legitimate ways and means of addressing violence, of which Norway’s response appears one example.[45]  In short, such governance would mean that the reported crisis of terrorism would no longer automatically mean an actual crisis of democracy.

 Dr Paul Anderson is a philosopher, lawyer and ecologist with interests in contemporary public and environmental concerns.  His book, Critical Thought for Turbulent Times: Reforming Law and Economy for a Sustainable Earth (Routledge), is forthcoming.  Details about his research, advocacy and consultancy are available at

[2] Scheuerman, W. 2002. ‘Rethinking crisis government’, Constellations, vol. 9, no. 4, pp. 492-505; Herman, E. and D. Peterson. 2008. ‘There is no ‘war on terror’’, ZNet, 17 January.

[3] For general comment, see, for example, Kolin, A. 2011. State Power and Democracy. London: Palgrave Macmillan; European Association of Lawyers for Democracy and World Human Rights, 2005. ‘Suspect Communities: The Real “War on Terror” in Europe’ (Proceedings of the Conference), International Conference held at London Metropolitan University, 21 May; Gearty, C. 1997. The Future of Terrorism. London: Phoenix; Lobel, J. 1989. ‘Emergency power and the decline of liberalism’. Yale Law Journal, vol. 98, no. 7, pp. 1385-1433.

[4] Walker, C. 2009. ‘Book review: Executive measures, terrorism and national security: have the rules of the game changed? by David Bonner’, European Public Law, vol. 15, pp. 662-665.

[5] Meisels, T. 2009. ‘Defining terrorism – a typology’. Critical Review of International Social and Political Philosophy, vol. 12, no. 3, pp. 331-51; see also Schechter, D. 2012. ‘When is a terrorist no longer a terrorist?’ Global Research, 24 September.

[7] See, for example, Curtis, A. 2004. The Power of Nightmares: the Rise of the Politics of Fear.
[8] See, for example, Walker, C. 2011. Terrorism and the Law. Oxford: Oxford University Press; Head, M. 2010. ‘Calling out the troops and the Civil Contingencies Act: some questions of concern’. Public Law, April, pp. 340-61; Rayner, J. 2012. ‘Secret courts ‘will conceal UK complicity in torture’’, The Law Society Gazette, 12 September.  See also generally, the Convention of Modern Liberty.
[9] Walker, Terrorism and the Law, and ‘Book Review’ (above).
[10] Girvan LJ, R A’s Application [2010] NIQB 99 at §1.
[11] On the draft Communications Data Bill, see, for example, Editorial, 2012. ‘After the Queen’s speech: who will speak for liberty now? A blanket licence for electronic monitoring could slowly strangle private life’, The Guardian, 11 May.  On grounds for the Bill, see, for example, ‘Theresa May sets out plans to monitor internet use in the UK’, BBC News online, 14 June 2012.

[12] See, for example, Liberty, 2012. ‘Liberty’s Submission to the Joint Committee on the Draft Communications Data Bill’, August; Bernal, P. 2012. ‘The draft Communications Bill and the ECHR’ UK Const. L. Blog, 11 July (available at and generally, the Surveillance Studies Network.

[13] See, for example, the European Union Council Framework Decision of 13 June 2002 on combating terrorism (2002/475/JHA) and the UK Terrorism Act 2000 (as amended).

[14] Evans, R. and P. Lewis. 2009. ‘Civil servants attacked for using anti-terror laws to spy on public’,  The Guardian, 28 February; Anon. 2002. ‘Anarchists to be targeted as ‘terrorists’ alongside Al Qaeda’, Statewatch, 25 February.

[15] On the use of emergency power against social movements, see, for example, Cunningham, D. 2007. ‘Surveillance and social movements: Lenses on the repression-mobilization nexus’. Contemporary Sociology, vol. 36, No. 2, pp. 120-125; Welsh, I. 2007. ‘In defence of civilisation: terrorism and environmental politics in the 21st Century’. Environmental Politics, vol. 16, no. 2, pp. 356-75; Hyland, J. 2007. ‘Britain: Police use anti-terror powers against environmental protest’. World Socialist Web Site, 16 August; Chomsky, N. 2007. ‘Democracy promotion at home’ in Failed States. London: Penguin; Bunyan, T. 2002. The war on freedom and democracy: an analysis of the effects on civil liberties and democratic culture in the EU, Statewatch.    For a classic statement on the re-organisation of society around markets, see Polanyi, K. 2001 [1944]. The Great Transformation: Political and Economic Origins of Our Time. Boston: Beacon Press; see also, for example, Wolin, S. 2008. Democracy Inc.: Managed Democracy and the Spectre of Inverted Totalitarianism. Princeton, NJ: Princeton University Press.

[16] Habermas, J. 1985. ‘Civil disobedience: Litmus test for a democratic constitutional state’. Berkeley Journal of Sociology, vol. 30, pp. 95-116.

[17] Herman, E. 1996. ‘Terrorism: the struggle against closure’. Martin, B (ed.) Confronting the Experts. Albany, NY: State University of New York Press, pp. 77-97.

[18] Smyth, M. et al. 2008. ‘Critical terrorism studies – an introduction’. Critical Studies on Terrorism, vol. 1, no. 1, pp. 1-4; see also Mueller, J. and M. Stewart. 2012. ‘The terrorism delusion: America’s overwrought response to September 11’. International Security, vol., 37, no. 1, pp. 81-110.

[19] Curtis, M. 2012. Secret Affairs: Britain’s Collusion with Radical Islam (2nd ed.). London: Profile Books.  Support includes indirect supply, such as coalition forces in Iraq allowing systematic looting of Iraq’s nuclear facilities previously monitored by the IAEA (Penketh, A. 2004. ‘Nuclear material has ‘gone missing’ since war’. The Independent, 13 October).  See also Anderson, P. 2004. ‘Governance by universal justice or serial warfare?’ The International Journal of Human Rights, vol. 7, no. 4,  pp. 143-154.

[20] Curtis, M. 2010. ‘Interview: Colluding with extremists’. New Left Project, 8 March.

[21] Curtis, M. 2004. Unpeople: Britain’s Secret Human Rights Abuses. London: Vintage; Curtis, M.  2003. Web of Deceit: Britain’s Real Role in the World, London: Vintage; Chomsky, N. 2002. ‘Who are the global terrorists?’ in Booth, K. and T. Dunne (eds.) Worlds in Collision: Terror and the Future of Global Order. London: Palgrave Macmillan; Chomsky, N.  2000. Rogue States: the Rule of Force in World Affairs. Cambridge, MA: South End Press.

[22] Curtis, Secret Affairs; Stohl, M. and G. Lopez (eds.) 1984. The State as Terrorist: The Dynamics of Governmental Violence and Repression. Westport, CT: Greenwood; Herman, E. 1982. The Real Terror Network: Terrorism in Fact and Propaganda. Cambridge, MA: South End Press.

[23] MediaLens, 2007. ‘The media ignore credible poll revealing 1.2 million violent deaths in Iraq’. MediaLens, 18 September; Curtis, M., 2003. ‘British state terror’. Red Pepper, July; Chomksy, N. 2003. ‘Wars of terror’. New Political Science, March; Mueller, J. and K. Mueller, 1999. ‘Sanctions of mass destruction’. Foreign Affairs, May/June.

[24] Curtis, Unpeople.

[25] On policies escalating the risk of (retail) terrorism, see, for example, Anon., 2010. ‘Iraq inquiry: ex-MI5 boss says war raised terror threat’. BBC News Online, 28 July.  See also Silke, A. 2005. ‘Fire of Iolaus. The role of state countermeasures in causing terrorism and what needs to be done’ in T. Bjørgo (ed.) Root causes of terrorism. Myths, reality and ways forward. London: Routledge.  Among examples of the continued denial of restitution, see, for example, Dowell, K. 2012. ‘Matrix and Doughty Street win latest victory for Mau Mau Kenyans’. The Lawyer, 5 October.

[26] For accounts of various forms of intimidation, destabilisation and harm from private power, see, for example, Chernomas, R. and I. Hudson, 2008. Social Murder: and other Shortcomings of Conservative Economics. Winnipeg, Manitoba: Arbeiter Ring; Klein, N., 2007. The Shock Doctrine: the Rise of Disaster Capitalism. London: Penguin; Perkins, J. 2005. Confessions of an Economic Hit Man. London: Ebury Press. Palast, G. 2001. ‘The globalizer who came in from the cold’, 10 October; McMurtry, J. 2002. Value Wars: the Global Market versus the Life Economy. London: Verso;  Punch, M., 2000. ‘Suite violence: when managers murder and corporations kill’. Crime, Law & Social Change, vol. 33, no. 3, pp. 243-80; Gill, S., 1995. ‘Globalisation, market civilisation and disciplinary neoliberalism’. Millennium – Journal of International Studies, vol. 24, pp. 339-423.  See also ‘Discover the dark side of investment’, Transnational Institute (2012).

[27] Anon. 2009. ‘Anti-terror spending to rise £1bn’. BBC News Online, 9 October.

[28] Beckford, M. 2012. ‘Bee stings killed as many in UK as terrorists, says watchdog’. Daily Telegraph, 28 June; see also see also Mueller and Stewart, 2012. ‘The Terrorism Delusion’.
[29] On  government healthcare spending, see, for example, Luengo-Fernández, R. et al., 2006. ‘Cost of cardiovascular diseases in the United Kingdom’. Heart, vol. 92, no. 10, pp. 1384–1389.  On government research spending, see, for example, Luengo-Fernández, R. et al., 2012. ‘UK research expenditure on dementia, heart disease, stroke and cancer: are levels of spending related to disease burden?’ European Journal of Neurology, vol. 19, no. 1, pp. 149-54.

[30] See, for example, Pogge, T. 2008. ‘Making war on terrorists – reflections on harming the innocent’. Journal of Political Philosophy, vol. 16, no. 1, pp. 1-25; Monbiot, G. 2005. ‘Will they never stand up to carmakers and save our lungs?’. The Guardian, 1 November.
[31] Pogge, ‘Making war on terrorists’.  See also Frank, E. 2005. ‘Funding the public health response to terrorism’. British Medical Journal, vol. 331 (7516), pp. 526-7.

[33] Cited in Bunyan, T. 2008. ‘The Shape of Things to Come’. Statewatch (September), pp. 1, 55. See also generally Statewatch Observatory on Surveillance in Europe.
[34] Rayner, ‘Secret courts ‘will conceal UK complicity in torture’’, Law Society Gazette.  See also generally, Hosenball, M. 2011. ‘Secret panel can put Americans on ‘kill list’’. Reuters, 5 October; Greenwald, G. 2012. ‘Obama moves to make war on terror permanent’. The Guardian, 24 October; and the Convention of Modern Liberty.
[35] Booth, J. 2009. ‘Ex-spy chief Dame Stella Rimington says ministers have turned UK into police state’. The Times, 17 February.
[36] Baudrillard, J. 2002. The Spirit of Terrorism and Requiem for the Twin Towers. London: Verso; see also the notion of ‘security theatre’.
[38] Office for National Statistics. 2012. Crime in England and Wales, Quarterly First Release to March 2012. UK Government, 19 July.
[39] Home Office. ‘CONTEST: Counter-terrorism Strategy’. UK Government (accessed 12 November 2012).
[40] Ewing, K. 2000. ‘The politics of the British constitution’ Public Law (Autumn), p. 433.
[41] House of Lords Constitution Committee. 2009. Surveillance: Citizens and the State, UK Parliament, §14.
[42] Bunyan, ‘The Shape of Things to Come, p. 36-7.
[43] Bunyan, ‘The Shape of Things to Come, p. 7.  See also De Graaf, B. and B. de Graaf. 2010.  ‘Bringing politics back in: the introduction of the ‘performative power’ of counterterrorism’.  Critical Terrorism Studies, vol. 3, no. 2, p. 264.
[45] Martin, B. 2006. ‘Instead of Repression’. Social Alternatives, vol. 25, no. 1, pp. 62-66.  See also, for example, Building Bridges for Peace.