Wednesday, April 30, 2008
By Robert Kuttner | April 30, 2008
THE FEDERAL RESERVE is expected to decide today whether to cut interest rates yet again. But the Fed is about out of tricks, and leaks suggest that the rate cut will be small and the last one for some time.
Though the Fed has cut short-term rates from 5.25 percent last September to the current 2.25 percent, credit costs to long-term borrowers are higher than they were a year ago - because lenders fear increased inflation. Some of this is the Fed's own doing. Its cheap-money policy has weakened the dollar, raising prices of imported commodities.
Many credit markets are still frozen for lack of investor confidence - something that low interest rates cannot bring back. Losses continue to mount to the balance sheets of banks that made foolish speculative investments, causing credit to contract further.
None of this had to happen. The credit crisis, which is sapping America's economic strength, was the result of an almost religious belief in deregulation whose excesses are now coming home to roost.
One of George W. Bush’s lesser but still important talents is his uncanny ability to destroy peoples’ reputations: from John DiIulio to Michael Mukasey, well-regarded figures have entered the Bush administration’s doors, only to reemerge soiled and diminished.
Early signs indicate that John McCain may have the same talent.
By Dan Froomkin
Special to washingtonpost.com
Tuesday, April 29, 2008; 1:20 PM
How far will Vice President Cheney go to shield himself and his office from public scrutiny?
Last spring, Cheney asserted that he wasn't subject to executive-branch rules about classified information because he wasn't actually part of the executive branch.
Now his office argues that he and his staff are completely immune from congressional oversight. That's right: Completely immune.
By Chalmers Johnson, Tomdispatch.com
Posted on April 30, 2008, Printed on April 30, 2008
The RAND Corporation of Santa Monica, California, was set up immediately after World War II by the U.S. Army Air Corps (soon to become the U.S. Air Force). The Air Force generals who had the idea were trying to perpetuate the wartime relationship that had developed between the scientific and intellectual communities and the American military, as exemplified by the Manhattan Project to develop and build the atomic bomb.
Soon enough, however, RAND became a key institutional building block of the Cold War American empire. As the premier think tank for the U.S.'s role as hegemon of the Western world, RAND was instrumental in giving that empire the militaristic cast it retains to this day and in hugely enlarging official demands for atomic bombs, nuclear submarines, intercontinental ballistic missiles, and long-range bombers. Without RAND, our military-industrial complex, as well as our democracy, would look quite different.
Tuesday, April 29, 2008
The McCain Health Plan: Millions Lose Coverage, Health Costs Worsen, and Insurance and Drug Industries Win
April 29th, 2008 - 9:24am ET
Today Arizona Sen. John McCain will deliver what his handlers are hyping as a major address on health care. McCain’s plan is a dangerous fraud.
He wants voters to think he is going after health care cost inflation. In reality, he wants to dismantle the employer-provided system that now covers over 60 percent (or about 158 million) of non-elderly Americans, forcing millions of us who now get fairly decent health insurance on the job to instead buy whatever they can find on the individual market controlled by unregulated and predatory insurance companies. And he would drive health care costs upward, not downward.
By Sarah van Schagen
25 Apr 2008
If you build it, they will come. But if you build it green, you just may be able to save the planet.Or so says a recent report, which suggests that green building could help cut North America's greenhouse-gas emissions more quickly and less expensively than any other measure. And word is getting out about the promise of this fast-growing field -- some have even called 2008 the official "Year of Green Building."
Government accounting flaws, deception hide grim numbers associated with Iraq conflict, claims former World Bank economist
By Matt Golosinski
April 21, 2008 - The United States is bleeding money. That’s the alarm sounded by Joseph Stiglitz in his new book The Three Trillion Dollar War, a narrative that details what he and co-author Linda Bilmes, a Harvard professor of public finance, say are the staggering hidden costs of America’s current Iraq War. He brought his discussion to the Kellogg School on April 18, speaking to a capacity audience from Kellogg and the larger Northwestern University and Evanston communities.
To hear the former World Bank chief economist and senior vice president detail the economic circumstances associated with the conflict, now in its fifth year and costing U.S. taxpayers $12 billion each month, is to enter a realm that rivals the bleak, madcap world conjured by Joseph Heller’s classic satire Catch-22. For Stiglitz, a 2001 Nobel Prize winner, the tragedy of war is compounded by significant — and deliberate, he contends — flaws in how the Bush Administration has accounted for the war’s expenses.
By Brennan Center for Justice, AlterNet
Posted on April 28, 2008, Printed on April 29, 2008
Today the Brennan Center for Justice criticized the U.S. Supreme Court's decision to uphold Indiana's voter identification law -- the strictest in the country -- but noted that the decision did not give other states a blank check to block eligible voters. The Brennan Center called on lawmakers across the country to reject similar laws and to pass affirmative legislation protecting the right to vote.
"This year, millions of new voters are surging into the political process. Lawmakers should be encouraging full participation by eligible citizens, not erecting new barriers to voting. This is precisely the wrong message for the Supreme Court to send in this critical year. We shouldn't give partisans an excuse to find ways to keep people from voting," said Michael Waldman, the Brennan Center's Executive Director.
By Mark Hertsgaard, The Nation
Posted on April 29, 2008, Printed on April 29, 2008
It used to be that only environmentalists and paranoids warned about running out of oil. Not anymore. As climate change did over the past few years, peak oil seems poised to become the next big idea commanding the attention of governments, businesses and citizens the world over. The arrival of $119-a-barrel crude and $4-a-gallon gasoline this spring are but the most obvious signs that global oil production has or soon will peak. With global demand inexorably rising, a limited supply will bring higher, more volatile prices and eventually shortages that could provoke -- to quote the title of the must-see peak oil documentary -- the end of suburbia. If the era of cheap, abundant oil is indeed coming to a close, the world's economy and, paradoxically, the fight against climate change could be in deep trouble.
Monday, April 28, 2008
Chris Matthews personally deplored Bill Clinton when he was president, loathed Al Gore in 2000, hated John Kerry in 2004 and right now despises Hillary Clinton. And there are huge hints of what's to come if Obama does get the nomination, particularly if McCain, the man who Matthews has already said "deserves to be president" becomes the Republican nominee. He has the narrative already primed:
One idea in the notebook was something a congressman had told Mr. Matthews years earlier. The congressman had said that every so often in life, the galloping horse of history comes by and you have to make a decision. “You have to jump on that horse or you miss your turn,” Mr. Matthews had said. “The country is facing that. Do I want to jump on the horse, or not? It’s too tricky. It’s too scary. It’s moving too fast. I’m not ready.”
First of all, let's not forget that this may be the biggest political land mine the Bush administration has set for Democrats. "Voter fraud" was, you'll remember, at the bottom of the US Attorney scandals and one of their main tools for suppressing the Democratic vote. This is the realization of a very long term plan to chip away at the Voting Rights Act. Republicans, like all aristocrats, know that if enough average people vote, they will lose. Period.
Keep in mind the industry put up the same kind of battle the last time the Fed tried to expand its powers under the Home Ownership Equity Protection Act, a tool it can use to restrict lending. The lenders won that time around a decade ago, and the Fed wound up applying that law to fewer than one percent of all mortgages, the Times noted.
Had the Fed been more forceful, consumer advocates say, much of the subprime lending abuses that took place and that have led to high default rates could have been avoided.
This time around, the mortgage industry -which apparently lacks any sense of irony - says that new rules on lending will make loans more expensive and restrict credit.
By Jennifer Ablan and Al Yoon - Analysis
NEW YORK (Reuters) - The allure of rotting mortgage bonds has grown so strong that Wall Street's vultures have begun picking over their carcasses -- a signal the credit crisis has entered a crucial stage in its vicious cycle.
In the past two months, these intrepid investors have begun betting billions of dollars on a hunch that mortgage security prices have fallen enough. It is a risk few have taken for a year or more as the credit crisis rooted in this very market wreaked havoc in financial markets around the world.
During the contentious runup to the Pennsylvania primary, the polling numbers (national and statewide) hardly changed. A lot of commentators concluded that Obama’s Wright/Ayers/”bitter” troubles and the Clinton attacks based on them had had no effect, apart from driving Clinton’s negatives up faster than his. I’m no pollster—I have only the vaguest notion of what “internals” are—but I don’t believe it. I’m pretty sure that the onslaught levelled what otherwise would have been a steep upward curve for the big O.
The Times, in a surprisingly angry editorial (possibly reflecting the editorial board’s irritation at having been ordered to endorse Clinton), had this to say about what its headline called her “Low Road to Victory”:
The Pennsylvania campaign, which produced yet another inconclusive result on Tuesday, was even meaner, more vacuous, more desperate, and more filled with pandering than the mean, vacuous, desperate, pander-filled contests that preceded it.
Voters are getting tired of it; it is demeaning the political process; and it does not work. It is past time for Senator Hillary Rodham Clinton to acknowledge that the negativity, for which she is mostly responsible, does nothing but harm to her, her opponent, her party and the 2008 election.
By Chalmers Johnson, Le Monde diplomatique
Posted on April 26, 2008, Printed on April 28, 2008
The military adventurers in the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups thought that they were the "smartest guys in the room" -- the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.
As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through many manipulative financial schemes (causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching.
As the designated political heir of a deeply unpopular president — according to Gallup, President Bush has the highest disapproval rating recorded in 70 years of polling — John McCain should have little hope of winning in November. In fact, however, current polls show him roughly tied with either Democrat.
In part this may reflect the Democrats’ problems. For the most part, however, it probably reflects the perception, eagerly propagated by Mr. McCain’s many admirers in the news media, that he’s very different from Mr. Bush — a responsible guy, a straight talker.
But is this perception at all true? During the 2000 campaign people said much the same thing about Mr. Bush; those of us who looked hard at his policy proposals, especially on taxes, saw the shape of things to come.
IT’S a nightmare. It’s the Bataan Death March. It’s mutually assured Armageddon. “Both of them are already losing the general to John McCain,” declared a Newsweek columnist last month, predicting that the election “may already be over” by the time the Democrats anoint a nominee.
Not so fast. If we’ve learned any new rule in the 2008 campaign, it’s this: Once our news culture sets a story in stone, chances are it will crumble. But first it must be recycled louder and louder 24/7, as if sheer repetition will transmute conventional wisdom into reality.
When the Pennsylvania returns rained down Tuesday night, the narrative became clear fast. The Democrats’ exit polls spelled disaster: Some 25 percent of the primary voters said they would defect to Mr. McCain or not vote at all if Barack Obama were the nominee. How could the party possibly survive this bitter, perhaps race-based civil war?
Friday, April 25, 2008
Until the beginning of this month, Americans seemed to have nothing to say about their ongoing economic ruin except, “Hit me! Please, hit me again!” You can take my house, but let me mow the lawn for you one more time before you repossess. Take my job and I’ll just slink off somewhere out of sight. Oh, and take my health insurance too; I can always fall back on Advil.
Then, on April 1, in a wave of defiance, truck drivers began taking the strongest form of action they can take – inaction. Faced with $4/gallon diesel fuel, they slowed down, shut down and started honking. On the New Jersey Turnpike, a convoy of trucks stretching “as far as the eye can see,” according to a turnpike spokesman, drove at a glacial 20 mph. Outside of Chicago, they slowed and drove three abreast, blocking traffic and taking arrests. They jammed into Harrisburg PA; they slowed down the Port of Tampa where 50 rigs sat idle in protest. Near Buffalo, one driver told the press he was taking the week off “to pray for the economy.”
An Elite Group Protects the Financial Sector
Some people foolishly think that Washington's recent high-profile effort to steer, subsidize and protect the American financial sector is the beginning of something new -- a revolutionary development.
It isn't. Consider that the President's Working Group on Financial Markets – nicknamed “the Plunge Protection Team” by The Washington Post in 1997 – quietly observed its 20th birthday on Mar. 18.
“Quietly,” in fact, is an understatement. “Semi-secretly” would be more like it. The Working Group, or PPT, is much-pondered but reclusive group that has declined to submit to the federal Freedom of Information Act or to testify in detail before Congress about its activities. This is true even though its current chief, Treasury Secretary Henry M. Paulson Jr. – Federal Reserve Board Chairman Ben Bernanke is another prominent member -- made no secret of revving up its operations after he took took over at Treasury in 2006.
The curious reader will wonder: Just what does the PPT do?
By Mark Gimein
Posted Thursday, April 24, 2008, at 11:25 AM ET
Here's the narrative we've heard about the mortgage meltdown: miscalculation and unfounded optimism, clueless investors, cash-strapped home buyers clobbered by rate resets.
But there's one piece of the mortgage-meltdown tale that virtually every article or television program dances around without ever quite confronting. It's the simplest aspect of the crisis to understand and also the most troubling, because it's not about complicated financial dealings and can't be fixed with bailouts. It's about an astounding breakdown of social norms.
It's the story of the liar's loan.
After Barack Obama’s defeat in Pennsylvania, David Axelrod, his campaign manager, brushed it off: “Nothing has changed tonight in the basic physics of this race.”
He may well be right — but what a comedown. A few months ago the Obama campaign was talking about transcendence. Now it’s talking about math. “Yes we can” has become “No she can’t.”
This wasn’t the way things were supposed to play out.
By Jared Bernstein, Berrett-Koehler Publishing
Posted on April 25, 2008, Printed on April 25, 2008
The following is an excerpt from Jared Bernstein's new book, "Crunch: Why Do I Feel So Squeezed?" (Berrett Koehler, 2008).
My dad had a full-time job, but my mom didn't, and they managed to raise, feed, house, and educate two kids on one salary. I can't do that today. Why not? What happened?
What happened was that the real earnings of lots of people, mostly male people, so husbands in this case, started to slip. At the same time, some of the very costs mentioned -- a home and a college education -- grew a lot faster than average inflation.
Thursday, April 24, 2008
“We think electability is the Number 1 issue.”
This is certainly the media’s agenda. It is all personality politics and tactics rather than issues for this crowd. The media assumes what the GOP fall attacks will be and then introduces them to the public as “journalism.” No need to change the narrative, just replay the Nixon era debates. It is 1969, and here is the SDS.
Meanwhile, the economy is headed south into a recession. Unemployment is on the rise, as is inflation. Ninety percent of Americans think the economy is “not good or poor.” Ten percent of Ohioans are now on food stamps and the number of Americans nationwide on stamps has just set a record. This is the first time an economic expansion has ended and median family income is lower now than it was at the onset. Eighty-one percent of Americans think the country is on the “wrong track,” another record. By a 20-point margin over Iraq, the economy is now cited as the number one issue by voters.
By Joe Conason
Nobody with a functioning memory should be too quick to condemn Jimmy Carter for daring to speak with the leadership of Hamas, as nearly everyone along the American political spectrum suddenly has felt obliged to do. From Condoleezza Rice and John McCain to Barack Obama and Hillary Clinton, along with every congressional backbencher in both parties, expressions of disapproval have rained down upon the former president, who is old enough and tough enough to pursue his own beliefs to their logical conclusion.
“The United States is not going to deal with Hamas,” said the secretary of state, “and we had certainly told President Carter that we did not think meeting with Hamas was going to help.” The justification for that policy was explained helpfully by Obama, whose willingness to meet with foreign adversaries does not extend to Hamas, at least not during the primary season. The Illinois senator “does not support negotiations with Hamas until they renounce terrorism, recognize Israel’s right to exist, and abide by past agreements,” according to a spokesman for his presidential campaign.
JJust as Californians are considering finally repealing the McCarthy-era "anti-communist" laws that threatened the firing of any teacher suspected of promoting communism, it seems that the Arizona Legislature is considering passing their 21st-century counterpart:
Arizona schools whose courses "denigrate American values and the teachings of Western civilization" could lose state funding under the terms of legislation approved Wednesday by a House panel. SB1108 also would bar teaching practices that "overtly encourage dissent" from those values, including democracy, capitalism, pluralism and religious tolerance. Schools would have to surrender teaching materials to the state superintendent of public instruction, who could withhold state aid from districts that broke the law.
Of course, such subversiveness is an overwhelming problem in today's schools -- far more pressing than dropout rates and declining academic standards. Now if only we could figure out who's doing the subverting ... unless ... that's it! It's that insidious Reconquista! plot!
Wednesday, April 23, 2008
This article will appear in Sunday's New York Times Magazine.
The Ratings Game
In 1996, Thomas Friedman, the New York Times columnist, remarked on “The NewsHour With Jim Lehrer” that there were two superpowers in the world — the United States and Moody’s bond-rating service — and it was sometimes unclear which was more powerful. Moody’s was then a private company that rated corporate bonds, but it was, already, spreading its wings into the exotic business of rating securities backed by pools of residential mortgages.
Obscure and dry-seeming as it was, this business offered a certain magic. The magic consisted of turning risky mortgages into investments that would be suitable for investors who would know nothing about the underlying loans. To get why this is impressive, you have to think about all that determines whether a mortgage is safe. Who owns the property? What is his or her income? Bundle hundreds of mortgages into a single security and the questions multiply; no investor could begin to answer them. But suppose the security had a rating. If it were rated triple-A by a firm like Moody’s, then the investor could forget about the underlying mortgages. He wouldn’t need to know what properties were in the pool, only that the pool was triple-A — it was just as safe, in theory, as other triple-A securities.
By Fred Kaplan
Posted Tuesday, April 22, 2008, at 5:07 PM ET
Which is it: Are the Iranians extraordinarily clever, or are we extraordinarily dim? Certainly, when it comes to pursuing our respective interests in Iraq, they seem to be thinking and acting strategically, while we seem not to be.
A fascinating story in the April 21 New York Times by James Glanz and Alissa J. Rubin reveals that in the battle for Basra—the major port city of southern Iraq—the United States and Iran are on the same side. Yet the Bush administration is doing nothing to gain leverage from this convergence.
Think of it as gilding the pain. Last year, hedge fund manager John Paulson of Paulson & Co. hauled in a nifty $3.7 billion. (Yes, you read that right.) Mainly, he did so, according to the Wall Street Journal, "by shorting, or betting against, subprime mortgage securities and collateralized debt obligations." And he wasn't alone. Hedge fund money-maker Philip Falcone of Harbinger Capital Partners raked in a comparatively measly $1.7 billion in 2007, also by shorting subprime mortgages. These are fortunes beyond imagining, made in no time at all by betting on the pure misery of others. Think of them as Las Vegas with a mean streak a mile wide.
In a week in which Citibank released news of quarterly losses of $5.1 billion and sweeping job cuts, food riots dotted the planet, oil hit $117 a barrel, and regular gas prices averaged $3.47 a gallon at the pump (with another 30 cents likely to be tacked on in the next month), Institutional Investor's Alpha magazine released its list of the 50 top hedge fund managers. In 2007, they "made" a cumulative $29 billion. (Even to slip in among the top 25, you had to take in at least $360 million.) To put this in perspective, Paulson alone made $1.6 billion dollars more than it is going to cost J.P. Morgan Chase to pick up the tanking Bear Stearns; in one hour, he made 30 times what the median American family earned all last year. And here's a little tidbit to go with that: Income inequality in 2007 was, according to the Associated Press, "at the highest level since 1928, the year before the Great Depression began."
The Union of Concerned Scientists said that more than half of the nearly 1,600 EPA staff scientists who responded online to a detailed questionnaire reported they had experienced incidents of political interference in their work....
Nearly 400 scientists said they had witnessed EPA officials misrepresenting scientific findings, 284 said they had witness the "selective or incomplete use of data to justify a specific regulatory outcome" and 224 scientists said they had been directed to "inappropriately exclude or alter technical information" in an EPA document.
By Maggie Mahar, Health Beat
Posted on April 23, 2008, Printed on April 23, 2008
Last week, the Economic Policy Institute released a disturbing report revealing just how many white-collar workers have lost their employer-based health insurance in recent years -- even though they didn't change jobs.
Many workers believe that if they hold onto their job, their insurance is safe. Professionals with jobs near the top of the occupational ladder are especially likely to assume that their employer is not going to cut their coverage. That may well have been true in the 1990s, when the job market was tight -- but not today.
Tuesday, April 22, 2008
By Greg Palast
April 20th, 2008 - 11:59pm ET
José Can You See? Bush’s Trojan Taco
By Greg Palast
Monday, April 21, 2008
Psst! George Bush has a secret.
While you Democrats are pounding each other to a pulp in Pennsylvania, the President has snuck back down to New Orleans for a meeting of the NAFTA Three: the Prime Minister of Canada and the President of Mexico.
You’re not supposed to know that – for two reasons:
First, the summit planned for the N.O. two years back was meant to showcase the rebuilt Big Easy, a monument to can-do Bush-o-nomics. Well, it is a monument to Bush’s leadership: The city still looks like Dresden 1946, with over half the original residents living in toxic trailers or wandering lost and broke in America.
The second reason Bush has kept this major summit a virtual secret is its real agenda. More important, the agenda-makers, the guys who called the meeting, must remain as far out of camera range as possible: The North American Competitiveness Council.
Congress Takes Another Look at Reagan's $150-Billion 'Star Wars' System
In the House Rayburn Building Wednesday afternoon, three physicists were patiently explaining to members of Congress that the U.S. missile defense system has little practical worth.
"If Iran were reckless enough to attack Europe or the United States," said Phillip E. Coyle, senior adviser at the World Security Institute, a national-security study center, "current U.S. missile defense would not be effective."
By Robert Parry
April 21, 2008
After prying loose 8,000 pages of Pentagon documents, the New York Times has proven what should have been obvious years ago: the Bush administration manipulated public opinion on the Iraq War, in part, by funneling propaganda through former senior military officers who served as expert analysts on TV news shows.
In 2002-03, these military analysts were ubiquitous on TV justifying the Iraq invasion, and most have remained supportive of the war in the five years since. The Times investigation showed that the analysts were being briefed by the Pentagon on what to say and had undisclosed conflicts of interest via military contracts.
Retired Green Beret Robert S. Bevelacqua, a former Fox News analyst, said the Pentagon treated the retired military officers as puppets: “It was them saying, ‘we need to stick our hands up your back and move your mouth for you.’” [NYT, April 20, 2008]
None of that, of course, should come as any surprise. Where do people think generals and admirals go to work after they retire from the government?
Allow me to introduce myself. According to the general clucking of the national punditry, my 2004 book – "What's the Matter With Kansas?" – is supposed to have persuaded Barack Obama to describe the yeomanry of Pennsylvania as "bitter" people who "cling to guns or religion or . . . anti-trade sentiment as a way to explain their frustrations." Mr. Obama's offense is so grave that the custodians of our national consensus have elevated it to gatehood: "Bittergate."
By Terrence McNally, AlterNet
Posted on April 22, 2008, Printed on April 22, 2008
Of all the resources needed to build an economy that will sustain economic progress, none is more scarce than time. That is one of the key messages of PLAN-B 3.0: Mobilizing to Save Civilization, the newest book by Lester Brown -- available as a free download at earthpolicy.org.
Plan A -- the western fossil-fuel-based, auto-centered, throwaway economic model -- is not going to work for China, India, or the 3 billion other people in developing countries, and it will not continue to work for the industrial countries either.
It's time for Plan B -- an all-out response at wartime speed proportionate to the magnitude of threats facing civilization.
Monday, April 21, 2008
Montreal, April 21, 2008 – A new fundamental mechanism of how tumour cells communicate has just been discovered by the team of Dr. Janusz Rak at the Research Institute of the McGill University Health Centre (MUHC) in collaboration with Dr Guha from the University of Toronto. The cancer cells are able to communicate with their more healthy counter-parts by releasing vesicles. These bubble-like structures contain cancer-causing (oncogenic) proteins that can trigger specific mechanisms when they merge into non or less-malignant cells. These findings could change our view on how cancerous tissues work and lead to major clinical innovations. They were published on April 20 in the on-line edition of Nature Cell Biology.
The surface of some brain tumour cells has long been known to express a mutated version of what is called the variant III epidermal growth factor receptor (EGFRvIII). Although this factor is expressed only in a fraction of tumour cells, it has a major impact on the malignancy of the whole tumor. How could this cellular minority have such an important impact" This mechanism was still unknown… until now.
The human brain responds to being treated fairly the same way it responds to winning money and eating chocolate, UCLA scientists report. Being treated fairly turns on the brain's reward circuitry.
"We may be hard-wired to treat fairness as a reward," said study co-author Matthew D. Lieberman, UCLA associate professor of psychology and a founder of social cognitive neuroscience.
Whatever Senator Barack Obama meant by his less than artful remarks about small-town Pennsylvanians “bitter” over lost jobs, he certainly turned a lot of attention last week to the decline of the American worker, bitter or not.
The talk most often has been of shuttered factories, layoffs, outsourcing and other effects of globalization, especially in a state like Pennsylvania, which has lost tens of thousands of industrial jobs. But there is another way to look at blue-collar workers or their counterparts in the service sector.
Nine years ago The Economist ran a big story on oil, which was then selling for $10 a barrel. The magazine warned that this might not last. Instead, it suggested, oil might well fall to $5 a barrel.
In any case, The Economist asserted, the world faced “the prospect of cheap, plentiful oil for the foreseeable future.”
Last week, oil hit $117.
It’s not just oil that has defied the complacency of a few years back. Food prices have also soared, as have the prices of basic metals. And the global surge in commodity prices is reviving a question we haven’t heard much since the 1970s: Will limited supplies of natural resources pose an obstacle to future world economic growth?
By Tony Judt
The twentieth century is hardly behind us but already its quarrels and its achievements, its ideals and its fears are slipping into the obscurity of mis-memory. In the West we have made haste to dispense whenever possible with the economic, intellectual, and institutional baggage of the twentieth century and encouraged others to do likewise. In the wake of 1989, with boundless confidence and insufficient reflection, we put the twentieth century behind us and strode boldly into its successor swaddled in self-serving half-truths: the triumph of the West, the end of History, the unipolar Ameri-can moment, the ineluctable march of globalization and the free market.
The belief that that was then and this is now embraced much more than just the defunct dogmas andinstitutions of cold war–era communism. During the Nineties, and again in the wake of September 11, 2001, I was struck more than once by a perverse contemporary insistence on not understanding the context of our present dilemmas, at home and abroad; on not listening with greater care to some of the wiser heads of earlier decades; on seeking actively to forget rather than remember, to deny continuity and proclaim novelty on every possible occasion. We have become stridently insistent that the past has little of interest to teach us. Ours, we assert, is a new world; its risks and opportunities are without precedent.
Major new study shows that modified soya produces 10 per cent less food than its conventional equivalent
By Geoffrey Lean, Environment Editor
Sunday, 20 April 2008
Genetic modification actually cuts the productivity of crops, an authoritative new study shows, undermining repeated claims that a switch to the controversial technology is needed to solve the growing world food crisis.
The study – carried out over the past three years at the University of Kansas in the US grain belt – has found that GM soya produces about 10 per cent less food than its conventional equivalent, contradicting assertions by advocates of the technology that it increases yields.
Professor Barney Gordon, of the university's department of agronomy, said he started the research – reported in the journal Better Crops – because many farmers who had changed over to the GM crop had "noticed that yields are not as high as expected even under optimal conditions". He added: "People were asking the question 'how come I don't get as high a yield as I used to?'"
April 15, 2008 8:30 AM
For anyone who understands the current food crisis, it is hard to listen to the head of the World Bank, Robert Zoellick, without gagging.
Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat. The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.
The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we're seeing such misery as a result of this particular spike has everything to do with Zoellick and his friends.
Before he replaced Paul Wolfowitz at the World Bank, Zoellick was the US trade representative, their man at the World Trade Organisation. While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckleduster.
By Katrina vanden Heuvel and Greg Kaufman, TheNation.com
Posted on April 21, 2008, Printed on April 21, 2008
The exploitation of farmworkers should not be tolerated in Florida. It should not be tolerated anywhere in the United States. There are many social problems that are extremely difficult to solve. This is not one of them.
- Eric Schlosser, investigative reporter and author of Fast Food Nation
On April 15, at a packed Senate hearing on working conditions for tomato workers, Senator Bernie Sanders asked Detective Charlie Frost, investigator for the human trafficking unit at the Collier County Sheriff’s Office, “Do you believe that there is human trafficking happening in Florida agriculture as we speak right now?”
“It’s probably occurring right now while we sit here,” Frost said. “Almost assuredly it’s going on right now.”
In the summer of 2005, the Bush administration confronted a fresh wave of criticism over Guantánamo Bay. The detention center had just been branded “the gulag of our times” by Amnesty International, there were new allegations of abuse from United Nations human rights experts and calls were mounting for its closure.
The administration’s communications experts responded swiftly. Early one Friday morning, they put a group of retired military officers on one of the jets normally used by Vice President Dick Cheney and flew them to Cuba for a carefully orchestrated tour of Guantánamo.
Sunday, April 20, 2008
“THE crowd is turning on me,” said Charles Gibson, the ABC anchor, when the audience jeered him in the final moments of Wednesday night’s face-off between Hillary Clinton and Barack Obama.
I can’t remember a debate in which the only memorable moment was the audience’s heckling of a moderator. Then again, I can’t remember a debate that became such an instant national gag, earning reviews more appropriate to a slasher movie like “Prom Night” than a civic event held in Philadelphia’s National Constitution Center:
“Shoddy, despicable!” — The Washington Post
“A tawdry affair!” — The Boston Globe
“A televised train wreck!” — The Philadelphia Daily News
And those were the polite ones. Let’s not even go to the blogosphere.
Friday, April 18, 2008
One of the sleaziest documentaries to arrive in a very long time, “Expelled: No Intelligence Allowed” is a conspiracy-theory rant masquerading as investigative inquiry.
Positing the theory of intelligent design as a valid scientific hypothesis, the film frames the refusal of “big science” to agree as nothing less than an assault on free speech. Interviewees, including the scientist Richard Sternberg, claim that questioning Darwinism led to their expulsion from the scientific fold (the film relies extensively on the post hoc, ergo propter hoc fallacy — after this, therefore because of this), while our genial audience surrogate, the actor and multihyphenate Ben Stein, nods sympathetically. (Mr. Stein is also a freelance columnist who writes Everybody’s Business for The New York Times.)
NewScientist.com news service
That locally-produced, free-range, organic hamburger might not be as green as you think.
An analysis of the environmental toll of food production concludes that transportation is a mere drop in the carbon bucket. Foods such as beef and dairy make a far deeper impression on a consumer's carbon footprint.
last updated: April 17, 2008 10:38:37 PM
WASHINGTON — The war in Iraq has become "a major debacle" and the outcome "is in doubt" despite improvements in security from the buildup in U.S. forces, according to a highly critical study published Thursday by the Pentagon's premier military educational institute.
The report released by the National Defense University raises fresh doubts about President Bush's projections of a U.S. victory in Iraq just a week after Bush announced that he was suspending U.S. troop reductions.
Created 04/16/2008 - 12:40pm
On Wall Street, the masters of the universe have turned to prayer and worry beads. At the Federal Reserve, a full night’s sleep is a fading memory. Across Main Street, the recession is starting to hit, stores are shutting down, bankruptcies are spreading, houses are being foreclosed or abandoned. The pain of the recession is just beginning to hit.
Will Barack Obama’s now famous “bitter” quote turn out to have been a big deal politically? Frankly, I have no idea.
But here’s a different question: was Mr. Obama right?
Mr. Obama’s comments combined assertions about economics, sociology and voting behavior. In each case, his assertion was mostly if not entirely wrong.
Start with the economics. Mr. Obama: “You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration.”There are, indeed, towns where the mill closed during the 1980s a
From Foreign Affairs , May/June 2008
Summary: The Bush administration's new strategy in Iraq has helped reduce violence. But the surge is not linked to any sustainable plan for building a viable Iraqi state and may even have made such an outcome less likely -- by stoking the revanchist fantasies of Sunni tribes and pitting them against the central government. The recent short-term gains have thus come at the expense of the long-term goal of a stable, unitary Iraq.
STEVEN SIMON is Hasib J. Sabbagh Senior Fellow for Middle Eastern Studies at the Council on Foreign Relations. From 1994 to 1999, he served on the National Security Council in positions including Senior Director for Transnational Threats.
In January 2007, President George W. Bush announced a new approach to the war in Iraq. At the time, sectarian and insurgent violence appeared to be spiraling out of control, and Democrats in Washington -- newly in control of both houses of Congress -- were demanding that the administration start winding down the war. Bush knew he needed to change course, but he refused to, as he put it, "give up the goal of winning." So rather than acquiesce to calls for withdrawal, he decided to ramp up U.S. efforts. With a "surge" in troops, a new emphasis on counterinsurgency strategy, and new commanders overseeing that strategy, Bush declared, the deteriorating situation could be turned around.
When it comes to cutting taxes for the wealthy, President Bush can truly say, "Mission accomplished."
The richest 1 percent of Americans received about $491 billion in tax breaks between 2001 and 2008. That's nearly the same amount as U.S. debt held by China -- $493 billion -- in the form of Treasury securities.
Do you want our government to mortgage more of our nation's future to finance tax breaks for the rich?
(CNN)— An increasingly firm Howard Dean told CNN again Thursday that he needs superdelegates to say who they’re for – and “I need them to say who they’re for starting now.”
“We cannot give up two or three months of active campaigning and healing time,” the Democratic National Committee Chairman told CNN’s Wolf Blitzer. “We’ve got to know who our nominee is.”
Thursday, April 17, 2008
This goes beyond hollow laughter. Since when did armies go around 're-liberating'
Saturday, 12 April 2008
After his latest shenanigans, I've come to the conclusion that George Bush is the first US president to march backwards. First we had weapons of mass destruction. Then, when they proved to be a myth, Bush told us we had stopped Saddam's "programmes" for weapons of mass destruction (which happened to be another lie).
Now he's gone a stage further. After announcing victory in Iraq in 2003 and "mission accomplished" and telling us how this enormous achievement would lead the 21st century into a "shining age of human liberty", George Bush told us this week that "thanks to the surge, we've renewed and revived the prospect of success".
By Sara Robinson, TomPaine.com
Posted on April 17, 2008, Printed on April 17, 2008
John McCain, who from the early 1980s worked hard to establish himself as one of the Senate's shining champions of Vietnam veterans' issues, completed his betrayal of the Iraq-era troops today. Brandon Friedman of vetvoice.com has the details:
Yesterday VoteVets.org delivered a petition with 30,000 signatures to the office of Sen. John McCain. Through that petition, we asked him to support Sen. Jim Webb's new GI Bill. And less than 24 hours later, we have an answer:
"Sen. John McCain, R-Ariz., the presumptive Republican presidential nominee, seemed to give a thumbs down to bipartisan legislation that would greatly expand educational benefits for members of the military returning from Iraq and Afghanistan under the GI Bill ..."
Wednesday, April 16, 2008
Former US Federal Reserve chairman Alan Greenspan, once famed for his reticence and oblique statements on the economy, seems to have spent the time since he retired from the Fed in 2006 rebuilding his persona, at least the reticence part.
Yet, though he now seems unable to decline an interview opportunity, it is increasingly evident that Greenspan is not going to be of much help when it comes to the critical issue of exploring what went terribly wrong with monetary policy and the financial system.
last updated: April 15, 2008 10:29:09 PM
WASHINGTON — With an eye toward shoring up shaky financial markets, Treasury Department officials unveiled a plan Tuesday to provide greater transparency and management of risk in hedge funds.
However, the Bush administration's "best practices" proposal is voluntary, and less than two dozen of the more than 8,000 registered hedge funds signed onto the plan.
Hedge funds are large pools of investment capital owned by the wealthy. They are largely unregulated.
Did you know that for the past two years, Congress has designated the first weekend in May as "Ten Commandments Weekend (TCW)?" Most of us pay little attention to congressional resolutions. All sorts of resolutions are proposed; some pass, others are tabled, and still others are withdrawn.
These days, two resolutions relating to the Ten Commandments are being considered by Congress; one will again designate the first weekend in May as "Ten Commandments Weekend," while the other aims to celebrate the Ten Commandments Commission (TCC), an organization led by a former veteran of the Israeli Armed Forces, and made up of a host longtime conservative evangelical Christian leaders.
By Dan Froomkin
Special to washingtonpost.com
Tuesday, April 15, 2008; 1:20 PM
The Bush administration's latest story line about Iraq -- that Iran is now the primary problem there -- should be greeted with profound skepticism.
Not only is it the latest in a series of rationales for U.S. involvement in Iraq, most of which have turned out to be based on flawed intelligence, misrepresentations or outright dishonesty.
But there are at least two illegitimate reasons why the White House would want the American public to see Iran as a threat right now.
April 15, 2008
WASHINGTON - During the five decades that the New Deal coalition governed national politics, from the 1930s to the 1980s, the relationship between the Democratic Party and working-class voters was an economic bond: Generations of Americans took it as an act of faith that Republicans represented the moneyed elites while Democrats stood up for the little guy.
Since 1980, that relationship has eroded and now it's in tatters. Democrats have lost significant support among the working class. They have made big gains among upper-middle-class voters.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: April 14, 2008: 3:57 PM EDT
NEW YORK (CNNMoney.com) -- There is little debate about whether the U.S. economy is in a recession. The question is how painful and long the downturn will be.
There is a growing fear among some economists that the recession will be particularly bad.
"We just can't believe it's going to be short. The question is how bad can it get? The situation is moving more towards severe than towards mild," said Allen Sinai, chief global economist for Decision Economics.
Picture yourself an 11-year-old boy witnessing a drunken argument between your parents, invites Pastor Bob Dailey of Bedford, Indiana. Words fly and so do objects, an ashtray narrowly missing your mother’s head. When you grow up and attempt to put this traumatic lesson to good purpose, do you work on domestic violence initiatives that will make women feel safer both in their marriages, or in leaving them if necessary? Or do you use the story to illustrate a new divorce reform movement that re-labels the liberalized “no-fault” divorce standards adopted in the 1970s as “unilateral divorce” inflicted on one spouse without the other’s consent?
If you chose answer B, ding-ding.Dailey’s anecdote is included on the website of Reform Divorce, launched today by Marriage Savers, a 22-year old anti-divorce organization headed by conservative Christian president and co-founder Mike McManus.
It's strange that the business and geopolitics of energy takes up so little space on American front pages -- or that we could conduct an oil war in Iraq with hardly a mention of the words "oil" and "war" in the same paragraph in those same papers over the years. Strange indeed. And yet, oil rules our world and energy lies behind so many of the headlines that might seem to be about other matters entirely.
Take the food riots now spreading across the planet because the prices of staples are soaring, while stocks of basics are falling. In the last year, wheat (think flour) has risen by 130%, rice by 74%, soya by 87%, and corn by 31%, while there are now only eight to 12 weeks of cereal stocks left globally. Governments across the planetary map are shuddering. This is a fast growing horror story and, though the cry in the streets of Cairo and Port au Prince might be for bread, this, too, turns out to be a tale largely ruled by energy: Too many acres turned over to corn (and sugar cane) for the creation of biofuels; a historic drought in Australia and other climate-change-induced extremes of weather -- a result of the burning of fossil fuels -- that have affected crop yields; and many new middle-class consumers, in China and elsewhere, coming on line, with a growing desire for meat, the production of which is heavily petroleum based.
Tuesday, April 15, 2008
In brief, the federal government took in more than $2.5 trillion in tax revenues in fiscal 2007, and spent more than $2.7 trillion (the $162 billion difference represents the budget deficit, to be paid by your kids and grandkids).
Why EPA Head Stayed Silent on Key Agency Findings, Despite a Science Background
April 11th, 2008 - 11:43am ET
Progressive blogger and professional economics student Kathy G is involved in a tussle with libertarian blogger and professional economics know-nothing Megan McArdle over the economic concept of "monopsony"—actually not much of a tussle, because Megan, as yet, won't cowboy up and join the battle, nor even link to Kathy G. The term sounds technical, but Kathy pulls you through the concept with admirable clarity and bite. Basically, the monopsony model is one of the many ways economists, abiding by the most rigorous neoclassical principles, are able to demonstrate that laissez-faire markets, acting on their own, can deliver both unfair and inefficient outcomes. Which opens the door to the conclusion that, sometimes, government intervention makes markets work better and more fairly.
"The consumer spending slump and tightening credit markets are triggering a wave of bankruptcies in American retailing," with ensuing store closures "expected to remake suburban malls and downtown shopping districts across the country," writes Michael Barbaro for the Times.
Published: April 13 2008
Competition for “most damaging legacy of the Bush administration” is lively. Iraq is the front-runner, of course, but bear in mind the wreckage of fiscal policy – although to use that term is to imply that the US even has a fiscal policy, when it does not. It would be more accurate to talk of fiscal consequences or fiscal footprint (an apt metaphor) than to imply anything as deliberate as “policy”.
All three presidential contenders criticise the administration on this, but none is offering much improvement. The Democrats remind the country that in the late 1990s the Clinton administration ran a budget surplus. With ill-designed tax cuts and reeling indiscipline on spending (partly, but not only, because of the war) the Bush administration turned this into a deficit. Barack Obama’s answer is the same as Hillary Clinton’s: undo the tax cuts and then raise spending by even more. John McCain, the Republican nominee and supposed fiscal conservative, is against raising taxes and promises to get spending down instead – but will not say how to do it.
Sat Apr 12, 2008 at 03:05:50 PM PDT
This is my first of a series of diaries about prisoners murdered by US forces. It will tell the story of an Iraqi man who died hanging by his cuffed wrists from a door frame, gagged, and beaten to death by his US interrogators. As the Final Autopsy Report noted:
The remains are received clad in a white shirt, white pajama type pants, and white
undershorts. Feces covers the clothing from the waist down....There is gauze dressing on the left wrist. No other evidence of medical intervention is noted.... The right chest wall has fractures of ribs three through seven anteriorly and ribs six through twelve posteriorly. The left chest wall has fractures of ribs two through nine anteriorly and ribs seven through twelve posteriorly. There are fractures of the lateral aspect of ribs nine and ten on the left side. There is a horizontal fracture through the mid-portion of the body of the sternum."
By Wendy Thompson, Labor Notes
Posted on April 15, 2008, Printed on April 15, 2008
Holbrook Avenue is a busy thoroughfare stretching from I-75 to downtown Hamtramck, a small town enclosed on all sides by Detroit. Cars honk in support of striking members of UAW Local 235 as they pass five picket lines filled 24 hours a day on both sides of the street along the large American Axle and Manufacturing (AAM) complex.
There are five more lines going south on St. Aubin Street, and two to the north. Spirits are high, and strikers are dressed warmly to face the bitter tail of winter weather.
By Joe Costello, AlterNet
Posted on April 15, 2008, Printed on April 15, 2008
I was 19 in October 1979, when I first stepped into a campaign office. It was the Draft Kennedy (Teddy) for President office, located directly east across the Daley Plaza from Chicago's City Hall. I would work on that campaign across the country for ten months, and it would instill in me an interest in politics, more accurately an interest in the politics of self-government that has lasted 30 years. It was a time when economics dominated political discourse from the nightly news to the kitchen table. Unfortunately, little did I understand, two months before I walked into that campaign office in 1979, President Jimmy Carter had appointed Paul Volcker head of the Federal Reserve, an event that would change American politics for the next three decades. Almost everything I learned on the Kennedy campaign about how American politics worked collapsed over the course of the next ten years. A new political regime, people, institutions, thinking, and culture replaced what had been the dominance of New Deal politics. Monetarism, Reaganomics or Neoliberlism, call it what you may, would totally dominate the American political landscape until today.
By Steven Rosenfeld, Ig Publishing
Posted on April 15, 2008, Printed on April 15, 2008
The following is an excerpted chapter by Steve Rosenfeld from the new book "Loser Take All," edited by Mark Crispin Miller (Ig Publishing, 2008).
Jim Crow has returned to American elections, only in the twenty-first century, instead of men in white robes or a barrel-chested sheriff menacingly patrolling voting precincts, we are more likely to see a lawyer carrying a folder filled with briefing papers and proposed legislation about "voter fraud" and other measures to supposedly protect the sanctity of the vote.
Since the 2004 election, activist lawyers with ties to the Republican Party and its presidential campaigns, Republican legislators, and even the Supreme Court -- in a largely unnoticed ruling in 2006 -- have been aggressively regulating most aspects of the voting process. Collectively, these efforts are undoing the gains of the civil rights era that brought voting rights to minorities and the poor, groups that tend to support Democrats.
Monday, April 14, 2008
DUBLIN — The collapse of the housing bubble in the United States is mutating into a global phenomenon, with real estate prices swooning from the Irish countryside and the Spanish coast to Baltic seaports and even parts of northern India.
This synchronized global slowdown, which has become increasingly stark in recent months, is hobbling economic growth worldwide, affecting not just homes but jobs as well.
In Ireland, Spain, Britain and elsewhere, housing markets that soared over the last decade are falling back to earth. Property analysts predict that some countries, like this one, will face an even more wrenching adjustment than that of the United States, including the possibility that the downturn could become a wholesale collapse.
With foreclosures running at about 20,000 per week, at least 100,000 more families are likely to lose their homes before Congress passes a relief bill. And even then, the measure may fail to stanch the problem unless Congress comes up with something that is significantly better than proposals currently in either chamber.
To produce a worthy relief package, lawmakers will first have to scrap most of the provisions in a bill passed last week by the Senate.
That bill would cost $21 billion over 10 years, with $15 billion of the total going to tax cuts that offer no direct help to at-risk families or hard-hit communities. One set of cuts would subsidize renewable energy; another would let businesses take temporarily larger write-offs for losses. A proposed $7,000 tax credit for buyers of foreclosed homes could backfire, encouraging more foreclosures by allowing banks to charge more for repossessed property. A measure to let non-itemizers deduct property taxes is dubious tax policy and bad foreclosure prevention, since it does not target the neediest.
The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century.
Meanwhile, a recent Pew report found that the percentage of Americans saying that they’re better off than they were five years ago is at its lowest level in 44 years of polling.
Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.
By Robert Parry, Consortium News
Posted on April 14, 2008, Printed on April 14, 2008
Though little discussed on the campaign trail, a crucial issue to be decided in November is whether the United States will return to its traditions as a constitutional Republic respecting "unalienable" human rights or whether it will finish a transformation into a frightened nation governed by an all-powerful President who can do whatever he wants during the open-ended "war on terror."
That reality was underscored on April 1 with the release of a five-year-old legal opinion from former Justice Department official John Yoo asserting that President George W. Bush possessed nearly unlimited authority as Commander in Chief, including the power to have military interrogators abuse terror suspects.
Sunday, April 13, 2008
Hayman Capital 2626 Cole Avenue, Suite 200
Dallas, TX 75204
July 30th, 2007
Over the past few months, we have seen the exacerbation of the Subprime problem accelerate at a precipitous pace. Wait a minute…I thought the Subprime problem was neatly contained in a nice little box of risk that the Fed had put it in? After many meetings and conversations with the various leaders of brokerage firms and asset managers, I don’t think the Subprime problem is as contained as many would like for you to believe. To understand the massive ripple effects of the Subprime problem, you have to look deeply into who owns the eventual risk and furthermore, how it will affect their behavior going forward.
A New York Times article, "What Created This Monster," is very much worth reading despite its shortcomings. It attempts to say how we got to where we are today, but lacking a clear problem definition (are the markets in trouble due to excessive leverage? Overly complex instruments? Lack of transparency? Poorly thought and inadequate regulations? Those negative real interest rates under Greenspan?) it comes off being unfocused. However, it interviews a lot of Big Names and have some fascinating moments. My fave is this one:
Two months before he resigned as chief executive of Citigroup last year amid nearly $20 billion in write-downs, Charles O. Prince III sat down in Washington with Representative Barney Frank, the chairman of the House Financial Services Committee. Among the topics they discussed were investment vehicles that allowed Citigroup and other banks to keep billions of dollars in potential liabilities off of their balance sheets — and away from the scrutiny of investors and analysts.
“Why aren’t they on your balance sheet?” asked Mr. Frank, Democrat of Massachusetts. The congressman recalled that Mr. Prince said doing so would have put Citigroup at a disadvantage with Wall Street investment banks that were more loosely regulated and were allowed to take far greater risks. (A spokeswoman for Mr. Prince confirmed the conversation.)
My college experience dates so far back that it can only be labeled "ancient history." Still, there are a few seminal lessons I learned at Duke University—unfortunately none of them having much to do with the classroom. "Ticket Scalping 101" and "Beginning Blackjack" probably head the list, but not far behind would be "Introduction to Pyramid Schemes." While the first two courses may be rather unique to my own experience, the latter I assume is standard fare, and has been since the first diploma was awarded at Harvard, Yale or whichever college claims to have been the "firstest" with the "mostest." A second semester senior who never signed up for a dorm-born chain letter cannot really claim to have received a college education at all. The chain’s lesson was that you should be the originator of the letter, not the 500th recipient. You wanted your name at the apex of this upside down pyramid not at the broadened top, which signaled the exhaustion of additional fish, tuna or whatever derogatory noun one could employ to signify the university’s last few suckers.
Wall Street and its global lookalikes, of course, are life’s largest colleges where lessons can be mighty expensive and downright bankrupting. The last two decades alone have witnessed pyramid schemes involving savings and loans/junk bonds, the small investor/dot.coms, and now global bonds/subprimes. I could go on and you have your own candidates to be sure, but in each and every case the originator of a surefire "can’t miss" concept collected huge premiums from a willing investment public, only to see the pyramid collapse either of its own merits or from the lack of additional gullible investors. There will be more to come, much like a regular university that welcomes a never-ending stream of new "students" who pay annual "tuition" to be "educated."
Sat Apr 12, 2008 at 10:11:00 AM PDT
I usually leave the technical economic stories to more fiscally knowledgeable editors (and considering the state of my checking account, that would be everyone). But here's a story on which I feel I can write with equal authority to those who account for every last penny, because in this story knows what's going on. Not me. Not economists. Not Ben Bernanke. Not even the investment bankers involved in the story. Certainly not the government, because -- as part of the worship of free markets -- this is an area that's completely unregulated.
It's called credit default swaps. Just defining a credit default swap can be difficult, but here's my best shot. When you buy one of these things, you're buying a level of protection for an investment. For example, say someone has some double-yuck rated bonds, and is concerned that these things may soon be worth as much as a Zimbabwean dollar. With the right credit default swap, you can pay out a small amount over time to ensure that the the bonds still pay out close to face value in case of a default. So, in a sense, a credit default swap is insurance you buy for a risky investment.
Posted by Charles II on April 12, 2008
There is hardly any act more intrinsically corrupt than a college professor accepting cash to teach the writings of someone. And yet that seems to have happened, as universities have lined up to pimp right-wing novelist Ayn Rand to unsuspecting college kids. Matthew Keenan, Bloomberg:
The charitable arm of BB&T Corp., a banking company, pledged $1 million to the University of North Carolina Charlotte in 2005 and obtained an agreement that Rand’s novel “Atlas Shrugged” would become required reading for students. Marshall University in Huntington, West Virginia, and Johnson C. Smith University in Charlotte, North Carolina, say they also took grants and agreed to teach Rand….
“A corporation crosses a line and a university is complicit in crossing the line if it accepts money” and accedes to a request to assign specific books, said Jonathan Knight, director of the program on academic freedom, tenure and governance for the American Association of University Professors, in Washington. “It’s unique in my experience.” Knight has worked in the field for 31 years….
April 11th, 2008 - 7:32am ET
It's one of the most brazen and absurd pieces of right-wing propaganda out there: the claim that liberals caused the subprime housing crisis by pressuring Congress to force banks to loan to uncreditworthy borrowers. At the American Progress web site, Robert Gordon explains where the "idea" came from:
The idea started on the outer precincts of the right. Thomas DiLorenzo, an economist who calls Ron Paul "the Jefferson of our time," wrote in September that the housing crisis is "the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers." The policy DiLorenzo decries is the 1977 Community Reinvestment Act, which requires banks to lend throughout the communities they serve.
The Blame-CRA theme bounced around the right-wing Freerepublic.com. In January it figured in a Washington Times column. In February, a Cato Institute affiliate named Stan Liebowitz picked up the critique in a New York Post op-ed headlined "The Real Scandal: How the Feds Invented the Mortgage Mess." On The National Review's blog, The Corner, John Derbyshire channeled Liebowitz: "The folk losing their homes? are victims not of 'predatory lenders,' but of government-sponsored -- in fact government-mandated -- political correctness."
By Robert Parry
April 11, 2008
One of the many annoyances about living in George W. Bush’s Washington is to read the commentaries about the Iraq War on the editorial pages of the Washington Post. Possibly never in modern times has a major newspaper been more wrong, more consistently with more arrogance than has the Post on this vital issue.
Beyond getting almost nothing right – from the Post’s certitude over Iraq’s WMD to its reverence for Colin Powell’s U.N. testimony to its excitement over the purple-ink elections to its enthusiasm over whatever latest corner has been turned – the Post also has this obnoxious tendency to mock Americans who don’t share the paper’s wisdom.
One might have thought that editorial-page editor Fred Hiatt and the Graham family would have learned a few lessons in humility from their wretched record as cheerleader for what even many Republicans now acknowledge has been a disastrous war.
Posted: 04/11/08 08:50 PM [ET]
The National Association of Manufacturers suffered a major blow Friday in its legal battle against the new ethics and lobbying law.
Judge Colleen Kollar-Kotelly of the U.S. District Court dismissed the group’s challenge to a key provision of the law. The group took issue with the clause that would require disclosure of the member companies of “stealth lobbying” coalitions.
THE night before last week’s Senate hearings on our “progress” in Iraq, a goodly chunk of New York’s media and cultural establishment assembled in the vast lobby of the Museum of Modern Art. There were cocktails; there were waiters wielding platters of hors d’oeuvres; there was a light sprinkling of paparazzi. Then there was a screening. We trooped like schoolchildren to the auditorium to watch a grueling movie about the torture at Abu Ghraib.
Not just any movie, but “Standard Operating Procedure,” the new investigatory documentary by Errol Morris, one of our most original filmmakers. It asks the audience not just to revisit the crimes in graphic detail but to confront in tight close-up those who both perpetrated and photographed them. Because Mr. Morris has a complex view of human nature, he arouses a certain sympathy for his subjects, much as he did at times for Robert McNamara, the former defense secretary, in his Vietnam film, “Fog of War.”
April 13, 2008
AT LAST WEEK'S Iraq hearings on Capitol Hill, amid the talk of progress, withdrawal timetables, and casualty numbers, one crucial question was largely ignored: How much of Iraq can American troops really expect to fix?
American leaders and media tend to focus on the insurgency in Baghdad and its environs, but that's only a small part of the total picture. When the United States toppled Saddam Hussein's regime in 2003, it engendered a series of power struggles around the country.
By Spencer S. Hsu
Washington Post Staff Writer
Saturday, April 12, 2008; A03
The Bush administration said yesterday that it plans to start using the nation's most advanced spy technology for domestic purposes soon, rebuffing challenges by House Democrats over the idea's legal authority.
Homeland Security Secretary Michael Chertoff said his department will activate his department's new domestic satellite surveillance office in stages, starting as soon as possible with traditional scientific and homeland security activities -- such as tracking hurricane damage, monitoring climate change and creating terrain maps.
By Maya Schenwar, TruthOut.org
Posted on April 7, 2008, Printed on April 13, 2008
As violence rises again in Iraq, negotiations to institutionalize US economic dominance continue unabated.
While the battle of Basra raged last week, a series of talks between the Bush administration and the US-backed Maliki government rolled forward. These negotiations may have at least as many implications for Iraq's future as the violence on the ground.