Monday 31 May 2010
by: Joe Brewer, t r u t h o u t | Op-Ed
Are you someone who struggles to understand why people behave the way they do in politics? Perhaps you've been confused by all the fervor against gay marriage. Or maybe you're taken aback by the strong emotions waged against government-sponsored health care.
To understand political behaviors like these, you'll need to become familiar with the psychology of disgust.What’s the greatest threat to our still-fragile economic recovery? Dangers abound, of course. But what I currently find most ominous is the spread of a destructive idea: the view that now, less than a year into a weak recovery from the worst slump since World War II, is the time for policy makers to stop helping the jobless and start inflicting pain.
When the financial crisis first struck, most of the world’s policy makers responded appropriately, cutting interest rates and allowing deficits to rise. And by doing the right thing, by applying the lessons learned from the 1930s, they managed to limit the damage: It was terrible, but it wasn’t a second Great Depression.
Now, however, demands that governments switch from supporting their economies to punishing them have been proliferating in op-eds, speeches and reports from international organizations. Indeed, the idea that what depressed economies really need is even more suffering seems to be the new conventional wisdom, which John Kenneth Galbraith famously defined as “the ideas which are esteemed at any time for their acceptability.”
WASHINGTON — There's a food fight under way between Capitol Hill and the Agriculture Department, and it's about small potatoes.
Organic small potatoes.
Big ones, too, as well as peas, beans, beef, poultry and melons. Just about anything, in fact, that's farm-raised and edible.
Three Republican senators have complained that a USDA effort to educate the public about where food comes from slights "conventional farmers who produce the vast majority of our nation's food supply."
By John Solomon | May 03, 2010
Last November, the federal corporation charged with protecting Americans’ retirement funds issued an ominous public warning: the amount of pensions at risk inside failing companies had more than tripled during the recession.
The Pension Benefit Guaranty Corporation’s announcement signaled it might need tens of billions of new dollars to rescue traditional pensions paid by U.S. firms whose economic collapse left them unable to meet their retirement obligations to workers.
By George C. Wilson
gcwilson1@comcast.net
By Simon Johnson, co-author 13 Bankers: The Wall Street Takeover and The Next Financial Meltdown
Attitudes towards big banks are changing around the world and across the political spectrum. In the UK, the new center-right government is looking for ways to break them up:
“We will take steps to reduce systemic risk in the banking system and will establish an independent commission to investigate the complex issue of separating retail and investment banking in a sustainable way; while recognising that this will take time to get right, the commission will be given an initial time frame of one year to report.”
The European Commission, among others, signals that a bank tax is coming; presumably, as suggested by the IMF, this will have higher rates for bigger banks and for banks with less capital. And other European officials are increasingly worried by the lack of capital in German banks, by the recent reckless lending sprees in Ireland and Spain, and by the dangers posed by banks that are much bigger than their home countries (e.g., Switzerland).
-- by Dave Johnson
People want the President to exert leadership to turn things around.
The oil leak. Unemployment. Credit card scams. Foreclosures. Predatory corporations. Environmental destruction. Global warming. Roads and bridges crumbling. Incomes stagnant. Schools getting worse. Companies moving overseas. Problem after problem.
People want to know, "Why doesn't the government push BP aside and take over?" The answer is, "Government doesn't have the resources to stop it."
FOR Barack Obama’s knee-jerk foes, of course it was his Katrina. But for the rest of us, there’s the nagging fear that the largest oil spill in our history could yet prove worse if it drags on much longer. It might not only wreck the ecology of a region but capsize the principal mission of the Obama presidency.
Before we look at why, it would be helpful to briefly revisit that increasingly airbrushed late summer of 2005. Whatever Obama’s failings, he is infinitely more competent at coping with catastrophe than his predecessor. President Bush’s top disaster managers — the Homeland Security secretary, Michael Chertoff, as well as the notorious “Brownie” — professed ignorance of New Orleans’s humanitarian crisis a full day after the nation had started watching it live in real time on television. When Bush finally appeared, he shunned the city entirely and instead made a jocular show of vowing to rebuild the coastal home of his party’s former Senate leader, Trent Lott. He never did take charge.
The Obama administration has been engaged with the oil spill from the start — however haltingly and inarticulately at times. It was way too trusting of BP but was never AWOL. For all the second-guessing, it’s still not clear what else the president might have done to make a definitive, as opposed to cosmetic, difference in plugging the hole: yell louder at BP, send in troops and tankers, or, as James Carville would have it, assume the role of Big Daddy? The spill is not a Tennessee Williams play, its setting notwithstanding, and it’s hard to see what more drama would add, particularly since No Drama Obama’s considerable talents do not include credible play-acting.
But life isn’t fair, and this president is in a far tougher spot in 2010 than his predecessor was in 2005.
Not the least striking revelation of Michael Lewis’s excellent book, The Big Short, is that this author of financial best-sellers has changed his mind. In a column for Bloomberg News in early 2007, he praised the rapidly expanding market for derivatives. Visiting the annual meeting of financiers and policymakers at the World Economic Forum in Davos, Switzerland, that year, he was exasperated by the fears of some of the participants. “None of them seemed to understand that when you create a derivative you don’t add to the sum total of risk in the financial world,” he wrote, sounding arguments very similar to those made by Alan Greenspan. “You merely create a means for redistributing that risk. They have no evidence that financial risk is being redistributed in ways we should all worry about.”
As we now know, derivatives were the instruments that enabled Wall Street to stretch capital dangerously far—and were at the center of the financial crisis that began that year.Or: Why the Heritage Freedom Index is a Damned Statistical Lie
This guest post was contributed by StatsGuy, a frequent commenter and occasional guest on this blog. It shows how quickly the headline interpretation of statistical measures breaks down once you start peeking under the covers.
Recently, a controversy raged in the blogosphere about whether neo-liberalism has been a bane or a boon for the world economy. The argument is rather coarse, in that it fails to distinguish between the various elements of neo-liberalism, or moderate deregulation vs. extreme deregulation. But if we take the argument at face value, one of the major claims of neoliberals is that countries in the world which are more neoliberal are more successful (because they are more neoliberal). I disagree.
My disagreement is not with the raw correlation between the Heritage Index and Per Capita GDP. A number is a number. My disagreement is with the composition of the index itself, and interpreting this correlation as causation between neo-liberalism and ‘good things.’
last updated: May 28, 2010 06:02:34 PM
WASHINGTON — Congress bailed out Wall Street and the auto industry, but it appears to have drawn the line — at least for now — at rescuing teachers.
A Democratic plan to send $23 billion to the states to save the jobs of 100,000 to 300,000 public school teachers, librarians, counselors and other employees slated for layoffs looks dead for the time being.
Blame it on election-year politics. The anti-Washington, anti-spending mood has become so potent that even Democrats are antsy about helping teachers, one of their most long-standing and generous allies.
With the deficit hawks in high gear, people are prepared to say anything in pursuit of the goal of deficit reduction. Remarkably, the NYT is apparently willing to print almost anything. Today the deficit cutting crusade is led by hedge fund manager David Einhorn. In a lengthy column [1] Einhorn bemoans the fact that at least some people in the Obama administration are more concerned about getting people back to work than reducing the deficit.
Einhorn is a bit more knowledgeable about basic economics than many of those who worry that the United States will be unable to find investors to buy its debt. Since he has heard of the Federal Reserve Board, he recognizes that the actual concern should be inflation, not insolvency, since the Fed can always buy up government debt.
However, since one would have to struggle to find any evidence of inflationary pressures in recent economic data, Einhorn chooses to invent his own evidence:
GEORGE LAKOFF FOR BUZZFLASH
Barack Obama may be one of the best communicators of this generation, but he is not living up to his own talents. In a year of disasters, communication failure doubles the disasters.
If, as he says, the monster spill was his highest priority from Day 1, he needed to communicate that from Day 1 — or at least Day 3 or 4. It took five weeks for him to tell the nation what he and his administration were doing. The result was visible in the press conference today. He was on the defensive. He needed to be on the offensive — from early on. The choice is not doing or communicating. It is doing and communicating.
His narrative: This is a tough, unprecedented situation, but I’m in charge, and I’ve been very busy, in the Situation Room where I belong, not on TV. I’m fully competent. I’m a good policy wonk — ask me any question about details. I’m honest. I admit my few policy mistakes. I think about the details day and night. Don’t think I’m oblivious.
It’s defensive, trying to overcome criticism that should never have been allowed to accumulate. But worse, it’s weak when it needs to be strong.
President Obama and the leadership in Congress have delegated enormous, unaccountable authority to 18 unrepresentative, inordinately wealthy individuals. The 18 individuals are meeting regularly, in secret, behind closed doors, until safely beyond this year’s mid-term election. If they reach agreement, their proposal will be voted on in December by a lame duck Congress, without the benefit of open hearings and deliberations in the pertinent committees and without the opportunity for open debate and amendment on the floors of the House and Senate. Despite the speed and lack of accountability, the legislation will affect, in substantial ways, every man, woman, and child in this nation.
Who are these powerful people and what are their views?
The world is suffering from the worst downturn since the Great Depression. The crisis has left tens of millions unemployed in the U.S., Europe, and elsewhere. The huge baby boomer generation in the United States, now on the edge of retirement, has seen much of its wealth destroyed with the collapse of the housing bubble.
It would be difficult to imagine a worse economic disaster. Prior periods of bad performance, like the inflation ridden seventies, look like mild flurries compared to the blizzard of bad economic news in which we are now enmeshed.
None of this is new. People don't need economists to tell them that times are bad. However, what the public may not recognize is that the same people who caused this disaster are still calling the shots. Specifically, there has been little change in personnel and no acknowledgment of error at the central banks whose incompetence was responsible for the crisis.
A version of this story appeared on The Baseline Scenario.
The Securities and Exchange Commission (SEC) under Mary Shapiro is trying to escape a difficult legacy -- over the past two decades, the once proud agency was effectively captured by the very Wall Street firms it was supposed to regulate.
The SEC's case against Goldman Sachs may mark a return to a more effective role; certainly bringing a case against Goldman took some guts. But it is entirely possible that the Goldman matter is a one-off that lacks broader implications. And in this context the SEC's handling of concerns about "high frequency trading" (HFT) -- following the May 6 "flash crash", when the stock market essentially shut down or rebooted for 20 minutes - is most disconcerting. (See yesterday's speech by Senator Ted Kaufman on this exact issue; short summary.)
Regulatory capture begins when the regulator starts to see the world only through the eyes of the regulated. Rather than taking on board views that are critical of existing arrangements, tame regulators talk only to proponents of the status quo (or people who want even more deregulation). This seems to be what is happening with regard to HFT.
Consumer spending is 70 percent of the American economy, so if consumers can’t or won’t spend we’re back in the soup. Yet the government just reported that consumer spending stalled in April – the first month consumers didn’t up their spending since last September. Instead, consumers boosted their savings, probably because they’re worried about the slow pace of job growth (next Friday’s report will likely show gains, but the number will continue to be tiny compared to the overall ranks of the jobless), as well as a lackluster “recovery.” They’re also still carrying enormous debt burdens. One in four home owners is still underwater. And median wages are going nowhere.
By Dilip Hiro
Irrespective of their politics, flawed leaders share a common trait. They generally remain remarkably oblivious to the harm they do to the nation they lead. George W. Bush is a salient recent example, as is former British Prime Minister Tony Blair. When it comes to foreign policy, we are now witnessing a similar phenomenon at the Obama White House.
Here is the Obama pattern: Choose a foreign leader to pressure. Threaten him with dire consequences if he does not bend to Washington’s will. When he refuses to submit and instead responds vigorously, back off quickly and overcompensate for failure by switching into a placatory mode.
According to Former US Ambassador Joe Wilson, Military Religious Freedom Foundation founder and head Mikey Weinstein has placed his life on the line in an ongoing campaign that has "almost single handedly" blunted an evangelical attempt to take over the US military. Presumably that's why the influential and affluent Pacific Palisades Democratic Club of Santa Monica, California had offered Weinstein the club's Anne Froelich Political Courage Award, which in the past has gone to heavy hitters such as Ron Kovich, Phil Donahue, Daniel Ellsberg, and Joseph and Valerie Wilson. But the club has just withdrawn its offer. The stated reason ? - Mikey Weinstein served in the first Reagan Administration.
Can Republicans exhibit "political courage" ? According to Weinstein the club's decision to pull the award is ludicrous and offensive, and a "slap in the face" that appears to question the courage of fighting men and women in the US military, many of whom are Republicans, whose freedom of religion interests Weinstein's MRFF represents. The nonprofit Military Religious Freedom Foundation has worked with over 18,000 clients in the US military, states Weinstein, 94% of whom are Christian.
Rajendra Singh, founder of Tarun Bharat Sangh, (TBS, or Young India Association), always wanted to be a farmer. Bowing to family pressure, he studied to be a doctor of traditional Indian Ayurvedic medicine and after school moved to the Alwyn district in the arid state of Rajasthan. Singh was not simply practicing medicine, he wanted to test some ideas about healing ecosystems.
The local Arvari River had dried up during the 1940s when the surrounding hills were stripped of trees. It flowed only during the monsoon season. Since that time most people fled local villages to seek a livelihood elsewhere. When Singh arrived in 1985, he noticed that only the oldest and poorest people were left in the area.
Thirty-eight hours after Scott Brown’s smack-upside-the-head victory in the race for Ted Kennedy’s former Senate seat, Barack Obama took the podium in the Diplomatic Reception Room at the White House. Hovering behind him was Paul Volcker, the former Fed chair and (for months, largely ignored) Obama economic adviser; far off to the side stood Treasury Secretary Tim Geithner. In the wake of Brown’s win, the prospect of passing health-care reform--and the rest of Obama’s first-term agenda--suddenly seemed dim. So the president had decided to pursue the obvious, logical course: He had decided to change the subject.
The topic to which Obama now shifted was financial reform, in particular to the matter of speculative, big-casino activity by the nation’s banks. ''I’m proposing a simple and common-sense reform, which we’re calling the Volcker Rule,after this tall guy behind me,'' Obama declared. ''Banks will no longer be allowed to own, invest, or sponsor hedge funds, private-equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so--responsibly--is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private-equities funds while running a bank backed by the American people.''
North Korea's recent sinking of a South Korean warship was not an inexcusable act of aggression that came out of nowhere. It was an inexcusable act of aggression that had been building up for many years.
Though it was little noted in U.S. news reports, the maritime border between North Korea and South Korea—known as the Northern Limit Line—has been a frequent scene of naval clashes and confrontations over the last decade.
The March 26 incident, which killed 46 South Korean sailors and wounded many more, is by far the deadliest of these attacks and fully worthy of the condemnation it's received from the Obama administration, the U.N. secretary-general, and other world leaders.
The defense appropriations bill currently moving through the House of Representatives includes a measure which directs the Defense Department's inspector general to investigate attorneys who may have "interfered with operations of the Department of Defense" while representing detainees at Guantanamo Bay and report back to Congress.
That measure has civil libertarians up in arms. Salon's Glenn Greenwald, for example, described the "truly vile provision" as a "McCarthyite attack on detainee lawyers" and identified it as "the brainchild of GOP Rep. Jeff Miller of Florida, who has labeled efforts to represent detainees ... a 'treacherous enterprise" and smeared those lawyers as 'disloyal.'"
"We have found no evidence that these events were triggered by 'fat finger' errors, computer hacking, or terrorist activity, although we cannot completely rule out these possibilities," a recent Securities Exchange Commission (SEC) report on the so-called May 6 "Flash Crash" that wiped out a cool trillion in a mere half-hour weakly admitted. "Much work is needed to determine all of the causes of the market disruption."
That's another way of saying that it remains only the market makers that caused the largest single-day point decline in Dow Jones history who actually know where the bodies are buried. The rest of us, including the SEC, have a Sisyphean task of sifting through mountains of dense data. But regardless of who ends up on the end of possible criminal proceedings, the SEC is sure that the whole clusterstock was seriously exacerbated by the robotraders executing light-speed electronic transactions via supercomputers, while exposing our hyperreal economy as an Internetworked casino. If anything, the Flash Crash proved that market makers like Goldman Sachs and plenty more playing both sides of securities could be capable -- with the high-priced help of math and computer science Ph.Ds crafting up proprietary, recursive algorithms -- of wiping out any corporation's stock, perhaps any nation's economy, in a comparative instant with just the press of a button.
What is so great about our bloated federal government that when a libertarian threatens to become a senator, otherwise rational and mostly liberal pundits start frothing at the mouth? What Rand Paul thinks about the Civil Rights Act, passed 46 years ago, hardly seems the most pressing issue of social justice before us. It's a done deal that he clearly accepts. Yet Paul's questioning the wisdom of a banking bailout that rewards those who shamelessly exploited the poor and vulnerable, many of them racial minorities, is right on target. So too questioning the enormous cost of wars that as he dared point out are conducted in violation of our Constitution and that, I would add, though he doesn't, prevent us from adequately funding needed social programs.
Under the leadership of President Bill Clinton, Wall Street secured the radical deregulation of the financial industry that its lobbyists had long sought. I opposed that betrayal of the sensible policies of the last great Democratic president, Franklin Delano Roosevelt, and I suspect that Paul applauded the move as an extension of the free market that he so uncritically celebrates. Where I agree with him is that with freedom comes responsibility, and when the financial conglomerates abused their freedom, they, and not the victims they swindled, should have borne the consequences. Instead, they were saved by the taxpayers from their near-death experience, reaping enormous profits and bonuses while the fundamentals of the world economy they almost destroyed remain rotten, as attested by the high rates of housing foreclosures and unemployment and the tens of millions of newly poor dependent on government food handouts.
Hawks in the United States and Israel appear set on “regime change” in Iran, pursuing a game plan similar to the run-up to war in Iraq, ratcheting up tensions while frustrating opportunities for a peaceful settlement.
In the latest example, the New York Times on Tuesday published a leaked account of an order signed by U.S. Central Command chief, Gen. David Petraeus, expanding “clandestine military activity in an effort to disrupt militant groups to counter threats in Iran, Saudi Arabia, Somalia and other countries in the region.”
In most of those countries, the secret U.S. military operations would be intended to help U.S. allies combat anti-government militants. However, in Iran, the goal would be to make contact with opposition forces, according to the Times article by Mark Mazzetti.
“Officials said the order also permits reconnaissance that could pave the way for possible military strikes in Iran if tensions over its nuclear ambitions escalate,” the article said.
The following is adapted from "Over the Cliff: How Obama’s Election Drove the American Right Insane," due out next month from PoliPoint Press.
It's difficult to get comfortable with this recovery, isn't it? In April, the economy finally started to create jobs at a decent pace. But now problems in Europe, some of which are eerily reminiscent of the credit debacle that laid the United States low in 2008, are threatening to tank U.S. stock markets and the economy at large. While there's reason to be concerned, there's little reason to panic. The troubles in Europe bring some short-term good news for the United States—and not just the humbling of French President Nicolas Sarkozy, who as recently as January prattled on about the demise of U.S. economic leadership. And there is some potential bad news.
The trouble in Europe started in the government bond markets. As deficits and funding demands mounted, Greece, Spain, and Portugal lost the confidence of investors. Credit markets suddenly ceased to believe that these nations could get their financial houses in order. In exchange for assistance from the European Central Bank and the International Monetary Fund, Greece agreed to cut spending and raise taxes. Spain and Portugal are following suit. The ECB is running an expansionary monetary policy, but many of the European Union's member states are now running seriously contractionary fiscal policies. The result: Economic growth in continental Europe just hit a wall.
This week Congress will consider legislation to reauthorize extended unemployment benefits for the rest of the year. It's going to be an epic fight: Republicans in the Senate will likely do everything they can to stand in the way of a bill projected to add $123 billion to the deficit, forcing Dem leadership to round up a supermajority for a last-minute Friday vote before Congress adjourns for its Memorial Day recess.
Too bad the jobs crisis, in a big way, has already left this bill in the dust. Hundreds of thousands of people have exhausted their extended unemployment benefits. In some states, laid-off workers can receive checks for 99 weeks -- and that's all they're going to get. This bill isn't for the "99ers" and there's no proposal on deck to give them additional weeks of benefits.
"What's frustrating is that our government doesn't seem to think this is an important issue," said Christy Blake, a 35-year-old mother of two in Fruitland, Md. "We didn't put ourselves here. It wasn't our choice. I have been diligently looking for work."
Are you still unemployed? Obviously it is because you are lazy. At least, many members of Congress think so, anyway.
And besides, cutting the deficit -- caused by tax cuts for the rich and massive military spending increases -- is much more important than paychecks for Americans. The solution to the deficit -- caused by tax cuts for the rich and massive military spending increases -- is to cut back on things that help the American public.
The first thing I read about The Pregnant Widow is that I wouldn't like it. Amis said he had been told it would get him "in trouble with the feminists," wrote Alison Flood in a November pre-publication puff piece in the Guardian, "but he insisted that it was actually 'a very feminist book' and that 'they haven't got a case.' " It was touching, actually, Amis' belief that there is an army of book-reviewing harpies out there, chafing to make their "case"—and that book review editors would give them this plum assignment. (In fact, with the exception of Michiko Kakutani's pan in the New York Times, the only reviews I've seen in the British or American press have been by men. They liked it.) But never mind, I thought. Martin Amis is notorious for aggressively dumb publicity-generating remarks—all leftists are Stalinists, British Muslims should be strip-searched at random—that show none of the insight into modern life that he displays in his often quite wonderful novels.
The Pregnant Widow is mostly about sexual antics among a group of prosperous young Britishers spending a summer holiday in a magically well- appointed castle in Italy in 1970. Keith Nearing, authorial stand-in and nebbishy English major ("he occupied that much-disputed territory between five foot six and five foot seven") makes dutiful nightly love with his smart but not-quite-beautiful-enough girlfriend Lily while pining for her gorgeous blond friend Scheherazade. Will Keith get to sleep with Scheherazade? It's the sexual revolution, so theoretically, anything goes—and then, too, Scheherazade is rather frustrated, as Lily confides to Keith in graphic detail, since her boyfriend keeps prolonging his arrival in order to hunt yet more exotic beasts with Arab royals. Minor characters pop in and out, there's a lot of topless sun-bathing, a lot of discussion about how feminism permits girls to act "like boys," i.e. initiate no-strings sex, and a lot of reading, too. Keith is plowing through the classic British novels, which, from Richardson to Hardy, all seem to be about women's sexual virtue: "Will she fall? Will she fall, this woman? What'll they write about, he wondered, when all women fall? Well, there'll be new ways of falling …"
Indeed, Keith's bumbling pursuit of the sweet, surprisingly straitlaced Scheherazade takes almost as long as Lovelace's siege of the virginal Clarissa—and is, in a different way, almost as anticlimactic. After about 1,200 pages, Lovelace drugs and rapes Clarissa, whereupon she kills herself, leaving him with endless guilt. Keith fumbles his attempt to drug Lily so she'll sleep through what he hopes will be the great assignation, and Scheherazade changes her mind at the last moment. Keith consoles himself with the fantastically uninhibited Gloria Beautyman. The conjunction of these two events—rejection by the divine Scheherazade, glorious sex with kinky Gloria—plunges poor Keith into a "trauma" of sexual befuddlement that lasts for 25 years. Men can dish it out, is the joke here, but they sure can't take it.
WASHINGTON — The top American commander in the Middle East has ordered a broad expansion of clandestine military activity in an effort to disrupt militant groups or counter threats in Iran, Saudi Arabia, Somalia and other countries in the region, according to defense officials and military documents.
The secret directive, signed in September by Gen. David H. Petraeus, authorizes the sending of American Special Operations troops to both friendly and hostile nations in the Middle East, Central Asia and the Horn of Africa to gather intelligence and build ties with local forces. Officials said the order also permits reconnaissance that could pave the way for possible military strikes in Iran if tensions over its nuclear ambitions escalate.
While the Bush administration had approved some clandestine military activities far from designated war zones, the new order is intended to make such efforts more systematic and long term, officials said. Its goals are to build networks that could “penetrate, disrupt, defeat or destroy” Al Qaeda and other militant groups, as well as to “prepare the environment” for future attacks by American or local military forces, the document said. The order, however, does not appear to authorize offensive strikes in any specific countries.
Professor Sandra Soto, welcome to civil rights notoriety.
Last week, Arizona University's professor of Latina studies took the stage to address 2010 graduates of the school's Social and Behavioral Sciences program. Naturally, her words were timely and touched upon the state's recently passed immigration laws that allow police to question and detain anyone who they suspect of being an illegal immigrant.
Then, she called the measure "the strictest anti-immigrant legislation in the country" that is "explicitly intended to drive undocumented immigrants out of the state."
If the trouble starts -- and it remains an "if" -- the trigger may well be obscure to the concerns of most Americans: a missed budget projection by the Spanish government, the failure of Greece to hit a deficit-reduction target, a drop in Ireland's economic output.
But the knife-edge psychology currently governing global markets has put the future of the U.S. economic recovery in the hands of politicians in an assortment of European capitals. If one or more fail to make the expected progress on cutting budgets, restructuring economies or boosting growth, it could drain confidence in a broad and unsettling way. Credit markets worldwide could lock up and throw the global economy back into recession.
Can we please stop worrying about inflation—at least for a few months? Since the onset of the financial crisis in 2008, there has been serious concern that the massive expansion of the Fed's balance sheet, the central bank's policy of zero interest rates, and the large stimulus (and ensuing deficits) would, by some iron law of economics, debase the currency, boost the government's long-term borrowing costs, and ignite inflation. (Last year, I wrote about the debate over this topic between inflation-fretting historian Niall Ferguson and inflation-downplaying economist Paul Krugman.)
By almost every measure—the price of gold being a notable exception—observed inflation and inflation expectations have remained remarkably contained since the fall of 2008. They have done so even as growth has reignited in the United States. And the evidence weighing in favor of deflation—or at least a serious lack of inflation—continues to mount. Last week, the Bureau of Labor Statistics reported that inflation, as measured by the Consumer Price Index, fell 0.1 percent in April. Over the last year, it has risen a tame 2.2 percent. Factor out volatile food and energy prices and the long-term trend was more heartening. In the last 12 months, the core index has risen just 0.9 percent, "the smallest 12-month increase since January 1966." (Check out this inflation chart Krugman posted on his blog on May 19.)
So here’s how it is: They’re as mad as hell, and they’re not going to take this anymore. Am I talking about the Tea Partiers? No, I’m talking about the corporations.
Much reporting on opposition to the Obama administration portrays it as a sort of populist uprising. Yet the antics of the socialism-and-death-panels crowd are only part of the story of anti-Obamaism, and arguably the less important part. If you really want to know what’s going on, watch the corporations.
How can you do that? Follow the money — donations by corporate political action committees.
As much as they may grumble, there is a legitimate reason why the Republicans have been labeled the “Party of No.” For decades, the party’s kneejerk stance has been to oppose any legislation or policy involving social, economic or political progress.
You name it, the right has opposed it: civil rights, school desegregation, women’s rights, labor organizing, the minimum wage, social security, LGBT rights, welfare, immigrant rights, public education, reproductive rights, Medicare, Medicaid. And through the years the right invoked hysterical rhetoric in opposition, predicting that implementing any such policies would result in the end-of-family-free-enterprise-God-America on the one hand, and the imposition of atheism-socialism-Nazism on the other.
America has this long tradition of twisted, odd, widely beloved and yet darkly dangerous right-wing cultural impresarios that pop up out of our landscape like cultural tornadoes, leaving huge swaths of derangement and destruction in their wake. Aimee Semple McPherson. Father Coughlin. Joe McCarthy. Once in a while, when the cultural cross-currents intersect just so, they rise on the whirlwind, gather huge followings, and lead their followers on a furious high-velocity turn that blows across the countryside in desperate pursuit of a utopia only they can see. These maunderings are typically mercifully short and usually end in disaster, for both the people who started the storm as well as those who got swept away in it. And all is forgotten—until the next time.
The next time, in this case, arrived on 9/11/01; and the tornado took on the form of Glenn Beck. It only seems like Glenn Beck has been with us forever. It's hard to remember a time when his endless rants weren't filling hours of TV time on Headline News, and more recently dominating everything else on FOX. But Beck was basically going nowhere fast before 9/11—the event that saved his failing TV career, turned this know-nothing showman into a leading political theorist, and catapulted him into the very eye of the far-right's always-churning cultural storm.
By Peter Boone and Simon Johnson
According to Friedrich von Hayek, the development of welfare socialism after World War II undermined freedom and would lead western democracies inexorably to some form of state-run serfdom.
Hayek had the sign and the destination right but was entirely wrong about the mechanism. Unregulated finance, the ideology of unfettered free markets, and state capture by corporate interests are what ended up undermining democracy both in North America and in Europe. All industrialized countries are at risk, but it’s the eurozone – with its vulnerable structures – that points most clearly to our potentially unpleasant collective futures.
As a result of the continuing euro crisis, European Central Bank (ECB) now finds itself buying up the debt of all the weaker eurozone governments, making it the – perhaps unwittingly – feudal boss of Europe. In the coming years, it will be the ECB and the European Union who dictate policy. The policy elite who run these structures – along with their allies in the private sector – are the new overlords.J. Edgar Hoover knew that power lies between the manila covers of a personal dossier and he used that knowledge to build and maintain his empire for almost half a century.
The FBI, the CIA and virtually every other agency given the authority to spy to defend us from foreign or domestic enemies, have sooner or later used their power to threaten our liberties.
In contrast to the CIA and FBI, the Law Enforcement Intelligence Unit (LEIU) is a little known organization; in fact, almost no one has ever heard of it. But its power is considerable and its potential threat to our freedom is enormous.
The Senate Intelligence Committee's investigation of how 23-year-old Nigerian Umar Farouk Abdulmutallab soiled his underpants with a makeshift bomb over Detroit last Christmas hung out so much dirty linen on the crowded clothes line of the U.S. intelligence community that it was an easy call to get rid of Director of National Intelligence, Dennis Blair.
The Senate committee's findings released on Tuesday showed the community in all-too-familiar disarray - adrift with no helmsman strong, savvy and courageous enough to bang heads together to get the far-flung intelligence bureaucracies to cooperate. The report is a damning catalogue of misfeasance and mistakes.
Yet, given recent precedent, with the intelligence community screwing up so clearly and regularly with no accountability, the Christmas Day fiasco and other recent misadventures might not have been enough to send Blair packing.
Over the last few months, Texas’ far-right Board of Education has been in the national spotlight as they prepare to debate new, highly ideological textbook standards [1] for high school. These proposed changes – which could affect textbooks all over the country, since Texas is the country’s second-largest textbook market [2]– would mandate the inclusion of a section on “causes and key organizations and individuals of the conservative resurgence of the 1980s and 1990s,” a section defending McCarthyism, and criticisms of the civil rights movement, among other changes.
Unsurprisingly, even more changes along these lines are afoot, in advance of a final vote [3] on May 21. But amongst the many radical distortions of American history along right-wing ideological lines, one finds a change with disturbingly mainstream support.
A team of amateur sky watchers has pierced the veil of secrecy surrounding the debut flight of the nation’s first robotic spaceplane, finding clues that suggest the military craft is engaged in the development of spy satellites rather than space weapons, which some experts have suspected but the Pentagon strongly denies.
Last month, the unmanned successor to the space shuttle blasted off from Florida on its debut mission but attracted little public notice because no one knew where it was going or what it was doing. The spaceship, known as the X-37B, was shrouded in operational secrecy, even as civilian specialists reported that it might go on mysterious errands for as long as nine months before zooming back to earth and touching down on a California runway.
In interviews and statements, Pentagon leaders strongly denied that the winged plane had anything to do with space weapons, even while conceding that its ultimate goal was to aid terrestrial war fighters with a variety of ancillary missions.
WASHINGTON — Last Wednesday, Representative David Scott, Democrat of Georgia, mingled with insurance and financial executives and other supporters at a lunchtime fund-raiser in his honor at a chic Washington wine bar before rushing out to cast a House vote.
Nearby, supporters of Representative Michael E. Capuano, Democrat of Massachusetts, gathered that evening at a Capitol Hill town house for a $1,000-a-head fund-raiser. Just as that was wrapping up, Representative Peter T. King, Republican of New York, was feted by campaign donors at nearby Nationals Park at a game against the Mets.
It was just another day in the nonstop fund-raising cycle for members of the House Financial Services Committee, which has become a magnet for money from Wall Street and other deep-pocketed contributors, especially as Congress moves to finalize the most sweeping new financial regulations in seven decades.
IF there is one certain outcome to recent American elections, it’s this: The results will invariably prove most of the Beltway’s settled political narratives wrong.
Tuesday’s pre-midterms were no exception. We were told that all incumbents and Washington insiders were doomed, but Exhibit A, the defeat of Arlen Specter, was hardly a test case. The sui generis opportunist Specter lost to another incumbent, a congressman who has been a Democrat far longer than he has. We were also told — as we were, incessantly, in 2008 — that blue-collar white men in western Pennsylvania would flee the Democrats. But in the special House election there — Tuesday’s only Republican-vs.-Democrat battle — a million G.O.P. dollars and countless anti-Obama-Pelosi ads proved worthless. Not only did a Democrat win big, but that winner was a Washington insider’s insider, a longtime aide to the seat’s previous occupant, the quintessential pork baron John Murtha.
That said, it would be a mistake to overinterpret these results to spawn new, and equally bogus, narratives about rekindled Democratic prospects for November. The 2010 election was and is up for grabs. The only race with genuine long-term implications last week was Rand Paul’s victory by a margin of some 24 percentage points in Kentucky’s Republican senatorial primary.
How Beck and other right-wing talkers turned paranoia into a pitch for Goldline, the gold dealer one congressman says is conspiring to "cheat consumers." A Mother Jones investigation.
Read the latest on this story: Consumers tip off the FTC about Goldline, Beck's counterattack on Rep. Anthony Weiner, the story behind Goldline's perfect BBB rating, and the left-wing radio hosts who pitch gold.
Tune in to Glenn Beck's Fox News show or his syndicated radio program, and you'll soon learn about the evils of the US dollar, a currency on the verge of collapse due to runaway government spending, a ballooning national debt, and imminent Zimbabwe-style hyperinflation. To defend yourself against the coming financial holocaust, as Beck explained on his radio show last November, you need to "think like a German Jew in 1934, maybe 1931." And that means thinking about buying some gold.
Conveniently, Beck made that suggestion as he was in the midst of interviewing his own "gold guy," Mark Albarian, the president and CEO of Goldline International, a Santa Monica, California-based precious metals company that is a major sponsor of Beck's radio and cable shows—and now the target of Rep. Anthony Weiner (D-N.Y.). In a seamless intertwining of anxiety and entrepreneurship, Beck and Albarian amicably debated whether we've already hit "peak gold" or whether the price of gold, then at $1,100 an ounce, might yet hit the inflation-adjusted high of $2,200 it saw back in 1980. Beck speculated that gold could go as high as $2,500 an ounce: "I think people are running out of options on what, you know, could be worth something at all."
On May 7 Virginia Gov. Bob McDonnell appointed Fred Malek chairman of his Commission on Government Reform and Restructuring. McDonnell, a conservative Republican who assumed office in January, had achieved unwelcome national attention a month earlier when he declared April "Confederate History Month" without mentioning that the Confederates fought to preserve slavery (because, he explained to reporters, slavery did not rate as one of the issues "most significant for Virginia"). Two months before that, McDonnell had issued an executive order banning discrimination in state government that pointedly removed Virginia's previous protections based on sexual orientation.
McDonnell ended up backing down a little after his whitewash of the Confederacy and his revocation of civil rights protections for homosexuals stirred a predictable outcry from the African American and gay communities. (See "What's The Matter With Virginia?") But Jewish groups have been slow to protest the appointment of Malek, whose most noteworthy prior experience in government reorganization dates to 1971, when Malek was a 34-year-old special assistant to President Richard Nixon. At Nixon's request, Malek produced a memo denoting the number of Jews employed by the Bureau of Labor Statistics. Malek then arranged the demotion of at least four people with Jewish-sounding surnames. (He didn't actually know who was Jewish and who wasn't; he guessed based on their names.) It was the last recorded act of official anti-Semitism by the United States government.
Vermont Yankee officials say that while cleaning up after a leak of radioactive tritium at the nuclear power plant, they found another, more potent radioactive isotope in soil near where the leak occurred.
The Associated Press
MONTPELIER, Vt. —Vermont Yankee officials say that while cleaning up after a leak of radioactive tritium at the nuclear power plant, they found another, more potent radioactive isotope in soil near where the leak occurred.
Senate Democrats are proposing legislation titled, The American Jobs and Closing Tax Loopholes Act. The bill will, among other things, extend unemployment benefits and COBRA extensions. They're trying to schedule for a vote next week before the recess. And, to ward off the usual GOP criticism, this time, they've even come up with a way to pay for part of it: Removing a special tax loophole available to money managers. And, it's a big loophole that allows some of the richest people on Wall Street to pay the lowest tax rate.
From various sources, I pieced together how this tax structure works. Money managers at entities likes hedge fund, private equity firms and hedge funds don't get weekly paychecks. They're paid through a system known as "carried interest." Their income, which is essentially based on a share of the profits of the fund, is taxed at a far lower rate than income tax (15% vs. the top marginal income rate of 35%). So, what does it mean.
Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan.
For the past few months, much commentary on the economy — some of it posing as reporting — has had one central theme: policy makers are doing too much. Governments need to stop spending, we’re told. Greece is held up as a cautionary tale, and every uptick in the interest rate on U.S. government bonds is treated as an indication that markets are turning on America over its deficits. Meanwhile, there are continual warnings that inflation is just around the corner, and that the Fed needs to pull back from its efforts to support the economy and get started on its “exit strategy,” tightening credit by selling off assets and raising interest rates.
And what about near-record unemployment, with long-term unemployment worse than at any time since the 1930s? What about the fact that the employment gains of the past few months, although welcome, have, so far, brought back fewer than 500,000 of the more than 8 million jobs lost in the wake of the financial crisis? Hey, worrying about the unemployed is just so 2009.
In setting up his National Commission on Fiscal Responsibility and Reform, Barack Obama is again playing coy in public, but his intentions are widely understood among Washington insiders. The president intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits for future retirees while Republicans accede to significant tax increases to reduce government red ink.
Obama's commission is the vehicle created to achieve this deal. He ducks questions about his preferences, saying only that "everything has to be on the table." But White House lieutenants are privately talking up a bargain along those lines. They are telling anxious liberals to trust the president to make only moderate cuts. Better to have Democrats cut Social Security, Obama advisers say, than leave the task to bloodthirsty Republicans.
The instant analysis of Tuesday's election results was hyperbolic: Incumbents are dead! The establishment is finished! The fringes have overtaken the middle! But the portents of doom are, as usual, overblown. A closer look at the results should give substantial comfort to a White House whose mantras are still "Change," "Hope," and "Yes We Can."
First, the obvious: A public that has experienced multi-decade middle-class stagnation is ready to give new voices and ideas a chance, and that means great danger for incumbents. If the "new normal" is anything close to the last decade, we are in deep trouble: median income stagnant; job creation flat; family debt rising; income inequality increasing. More is being demanded by the public than a return to the grim economic realities of pre-recession 2007.
The Senate's passage Thursday night of extensive financial reform is being portrayed as a big loss for the financial sector. "No End to Banks' Capitol Punishment," reads the headline in the Wall Street Journal. But everything's relative. Wall Street wanted no reform at all. And this bill seems like harsh punishment only because the default situation for the last 30 years has been that the financial sector gets precisely the regulation it wants.
What may be most striking to average Americans about the bill is actually how un-punitive it is. Given what the financial sector put the nation through in the past three years, the case for strong punishment was very compelling. But while there are provisions that the financial sector doesn't like, the legislation that is now headed to a House-Senate conference is in fact relatively tame.
The Senate last night passed a comprehensive financial reform bill by a vote of 59 to 39 after weeks of amendments and a series of cloture votes failed to derail the measure.
Passage of S.3127, the Restoring American Financial Stability Act of 2010, represents a clear victory for Barack Obama, who made this his next big legislative priority after healthcare. Obama hailed the bill's passage, noting "The recession we're emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington."
A study in mice reveals that prenatal exposure to endocrine-disrupting chemicals, like bisphenol-A (BPA) and diethylstilbestrol (DES), may program a fetus for life. Therefore, adult women who were exposed prenatally to BPA or DES could be at increased risk of breast cancer, according to a new study accepted for publication in Hormones & Cancer, a journal of The Endocrine Society.
Endocrine-disrupting chemicals are substances in the environment that interfere with hormone biosynthesis, metabolism or action resulting in adverse developmental, reproductive, neurological and immune effects in both humans and wildlife. These chemicals are designed, produced and marketed largely for specific industrial purposes.
Whatever you think about the financial regulation bill that finally passed in the Senate Thursday night, you can't say it’s not a big deal. It’s 1500 pages long, and just take a look at Journal’s précis of its major provisions.
GEORGE LAKOFF FOR BUZZFLASH
The Obama Administration’s move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.
The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.
A six-year conspiracy by veteran real estate investors to rig bids and stifle competition at tax sale auctions made two chief organizers at least $10 million, largely from fees homeowners paid to keep from losing their properties, according to federal prosecutors.
Though many details remain under seal in U.S. District Court in Baltimore, prosecutors allege that from 2002 through 2007 the pair acted to corrupt nearly two dozen municipal tax sales in Baltimore and five other Maryland jurisdictions, including Montgomery and Prince George’s counties in the Washington, D.C. suburbs.
Every year, local governments in Maryland sell investors the right to collect unpaid taxes and municipal fees, often for a few hundred dollars or less. Lien holders can sue to take the property of those who fail to pay them.
Writing about my post from last week on the diversion of civil liberties erosions from non-citizens to citizens, the University of Massachusetts-Amherst's Charli Carpenter asks what (if anything) can be done to combat this trend:
[I]s it too late for dissent to make a difference? I welcome readers' ideas. I think many voters thought they'd already taken the appropriate step by electing a progressive, pro-civil liberties leader. With the writing on the wall, what now?
In replying to her question, Matt Yglesias attempts to re-direct blame away from Obama by invoking the Public Opinion Excuse:
Public opinion on these issues is much more mixed than Matt suggests (the very first poll cited in his link shows the public almost evenly divided -- 45-47% -- on whether the alleged Times Square bomber should be tried in a civilian court or a military commission).I don't think the answer to her question is particularly difficult -- people who want to halt the erosion of civil liberties need to do a better job of persuading people that the erosion of civil liberties would be a bad thing. If you have an incumbent administration being urged by the opposition to seize more power, and the public wants the administration to seize more power, then you get what we have today. People on the good team are sometimes in denial about opinion on this subject, but read the numbers -- the public wants Guantanamo Bay open, wants suspects tried in military courts, and thinks we should give up more civil liberties in order to enhance security.
WASHINGTON — Aftershocks from the nation's financial crisis continue rumbling through the housing sector as fixed-rate mortgages held by the safest borrowers accounted for nearly 37 percent of new foreclosures during the first three months of this year, the Mortgage Bankers Association reported Wednesday.
Additionally, more than one in 10 homeowners were behind on their mortgage payments in the first quarter — a record, the association said. That's up from 9.47 percent in the last three months of 2009.
"We're passing this bill tonight," Reid spokesman Jim Manley told reporters in the Capitol.
The Senate moved to wrap up debate on the bill earlier on Thursday, a key procedural hurdle paving the way for a vote. The bill now needs only a simple majority to win final approval.
Tom Harkin was stifled in his effort Tuesday evening to bring a measure to the Senate floor that would cap ATM fees at 50 cents. Harkin (D-Iowa) first introduced his amendment on May 4 and has yet to get a vote. With the close of debate on Wall Street reform rapidly approaching, Harkin went straight to the floor to ask the chamber's consent to vote, conceding that he would be satisfied with a mere five minutes of debate.
Banks, both small and large, oppose the amendment and argue that capping fees will reduce the number of privately available ATMs at convenience stores and elsewhere as well as the number of bank-owned cash machines.
"First in, last out" is a well-known accounting term, and it may also be the right phrase to characterize this economic recovery. Even though the economy began to expand in mid-2009, the sector that led us into the mess—credit—has remained in recession. The conflagration of debt—soured mortgages, defaulted bank loans, Chapter 11 corporations, huge credit-card charge-offs, student loans, auto loans—drove the economy into a deep recession. Now, nearly a year into the overall economic expansion, there are tentative signs that improvement is coming to the stricken world of consumer credit.
Take the biggest component of consumer debt: mortgages. The Mortgage Bankers Association today released its data on the first quarter of 2010. It found the delinquency rate for residential mortgages rose to 10.06 percent in the first quarter, up substantially from the fourth quarter of 2009 and from the first quarter of 2009. But other measures suggest that the mortgage clouds have begun to break. TransUnion, the credit-data firm, reported last week that the mortgage-loan delinquency rate—defined as the percentage of borrowers who are two or more months late—fell in the first quarter of 2010 after three straight years of increases.
The Senate Republicans are refusing to allow a vote on the Merkley-Levin amendment, which would put a meaningful version of the Volcker Rule into law (splitting off proprietary trading from major banks).
After weeks of dancing around, the Democrats finally have a signature issue on which to fight. Senator Carl Levin frames it exactly right: “It’s a sad day when the power of Wall Street can overwhelm the power of the American people in the US Senate.”
This is the opportunity that White House claims it has long sought – to have an intense fight on a financial reform issue that everyone can understand. Paul Volcker made his determination long ago: the big banks are too big and must, in this fashion, be broken up. Senators Merkley and Levin negotiated the precise language of their amendment in good faith. The Republicans have made their answer clear: No way.
A top Federal Reserve official warned Tuesday that one consequence of the Great Recession will be a "new normal" in which Americans have lower expectations for a better life.
In a speech, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto said that she expects "our journey out of this deep recession [to] be a slow one" because of the loss of skills jobless Americans have experienced as a result of prolonged unemployment, and the "heightened sense of caution" consumers and businesses are operating under as they navigate the worst economic downturn since the Great Depression.
By Emily Badger
Unemployment, stuck at just under 10 percent now two years into the recession, isn’t anywhere near as bad as it was during the Great Depression. Nearly a quarter of the work force was then out of a job. Bread lines curled around street corners, and unemployed veterans, their families in tow, were rebuffed from Washington by force.
Ultimately, the U.S. government was so pressed for response it pursued what’s now considered a radical solution. The government, quite simply, hired people. It created the Civilian Conservation Corps, which employed young men laying infrastructure in national parks. It created the Civil Works Administration, which briefly put 4 million people to work constructing roads and bridges. It founded the Works Progress Administration, which at its peak employed more people than the federal government does today (at a time when the American work force was one-third the size it is now).
Dioxins in general decreasing, but those derived from triclosan increasing
Contacts: Ryan Maus, University News Service, maus@umn.edu, (612) 624-1690
Rhonda Zurn, Institute of Technology (College of Science and Engineering), rzurn@umn.edu, (612) 626-7959
Chris McGreal, Houston
guardian.co.uk,
Sunday 16 May 2010 17.19 BS
Cynthia Dunbar does not have a high regard for her local schools. She has called them unconstitutional, tyrannical and tools of perversion. The conservative Texas lawyer has even likened sending children to her state's schools to "throwing them in to the enemy's flames". Her hostility runs so deep that she educated her own offspring at home and at private Christian establishments.
Now Dunbar is on the brink of fulfilling a promise to change all that, or at least point Texas schools toward salvation. She is one of a clutch of Christian evangelists and social conservatives who have grasped control of the state's education board. This week they are expected to force through a new curriculum that is likely to shift what millions of American schoolchildren far beyond Texas learn about their history.
