Saturday, August 20, 2011

Leaked Oil Trading Documents Underscore Role of Speculators in Oil Price Spikes; Identities of Traders Should Be Public

WASHINGTON - August 19 - Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.

The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things.

First, the data reveals that excessive speculation by banks and others is the driving force in oil markets, pushing prices beyond the supply-demand fundamentals. Who wins when prices rise? Wall Street traders that are engaged in speculating. Who loses? Every consumer who fills up at the pump.

Stealing the Redistricting Process

Late last month [1], four men chosen by the Mecklenburg County Commissioners (North Carolina) to serve on a bi-partisan panel to study and recommend new voting district boundaries decided instead to undermine the process [1] of which they’d agreed to be a part.

Without notice to either the county commissioners or their fellow panel members they made a hasty trip to Raleigh to meet with the leadership of the North Carolina General Assembly. Within hours, a bill to bypass the public process already underway was brought to a vote in both houses and passed.

And just that quickly, the rights of the citizens of Mecklenburg, Buncombe, and Gilpin Counties were usurped, literally stolen from us for political gain. [2]

Whether you lean right, left or somewhere in the middle – where most of us surely are – this action was a direct attack on your democracy, promulgated for unabashed political gain and power. When questioned about the tactic a sitting commissioner responded, “It’s politics.”

How Washington Could Create Jobs Right Now

by: Michael Winship, Truthout | Op-Ed

I like to ask friends about the oddest summer job they ever had. One talks about how he used to don a rubber suit every morning at a Sylvania electronics plant in Syracuse, NY, and climb into a tank, where he dipped television tubes into some sort of mercury solution. He now moonlights as a thermometer.

Another spent a summer walking from floor to floor of a Manhattan skyscraper. His job was to take a long stick and un-jam the mail chute that ran alongside the elevator banks from the highest floor of the building to the bottom. When he reached the basement, he took the elevator back to the top and started all over again, a Sisyphean postman.

The Global Tax Dodgers: Why President Obama and Congress Lack Job Creation Plans

Thursday, 08/18/2011 - 12:49 pm by William Lazonick

In the latest installment of his “Breaking Through the Jobless Recovery” series, economist William Lazonick explores why American business leaders have taken a hike on the nation.

By now the story is familiar. For the last decade US-based business corporations have been engaged in the massive offshoring of good jobs to high-growth, low-wage areas of the world, especially China and India. In general, these companies have found offshoring to be immensely profitable. For working people in the United States to gain some benefit from this globalization process, US-based corporations must repatriate some of their foreign profits to invest in high value-added job opportunities back home.

Yet prevailing US tax law both encourages offshoring and discourages the repatriation of profits. In principle, US individuals and corporations are supposed to pay US taxes on their worldwide income. Through an overseas tax deferral law, however, a US company does not pay the 35 percent corporation tax on foreign earnings until it repatriates these profits to the United States. The tax law gives US corporations an added incentive not only to offshore employment but also to reinvest the earnings of offshored operations outside the United States.

It's Not Just News Corp: Is Comcast Spying on You Every Day?

When Guardian reporter, Nick Davies, broke the story that Rupert Murdoch's News of the World had been hacking British citizens' voicemail messages, including those of a murdered teenager, there was a public outcry. Unfortunately, this is the tip of a glacial iceberg that has the potential to bring down a lot more than the News of the World.

Last year, without due public debate and input, the Federal Communications Commission (FCC) and Justice Department approved a merger between Comcast and NBC Universal that gave the Internet cable giant control over the programming of NBC news. At the same time, pursuant to the 2008 Foreign Intelligence Surveillance Amendments Act, Comcast as well as all other telecommunication companies are required to cooperate with the Federal government in providing the facility for government to search through all electronic communications sent down their pipes.

3 Ways To Have Economic Success Without Greedy Corporations and Huge Wealth Disparities

By Jeffrey Hollender, AlterNet
Posted on August 11, 2011, Printed on August 20, 2011

We know there's something seriously wrong with our economy. Our system of economic rules and incentives was developed, and continues to be molded, by large multinational companies and implemented by politicians eager do whatever it takes to raise money and ensure that they never have to leave office.

This unholy symphony, orchestrated by the US Chamber of Commerce, working hand-in-hand with other trade associations, has ensured that the rich keep getting richer to the astounding point that America now ranks as a less equal country than Egypt and Tunisia. (According to the CIA's World Fact Book, which ranks countries in terms of how "equally" wealth is distributed, the US is the 42nd most unequal country in the world.) This system moves us ever closer to such severe inequality that social disruption is an increasing risk. (Consider the London riots against the fact that, in Great Britain, one million people from the ages of 16 to 24 are officially unemployed, the most since the deep recession of the mid-1980s.)

Yet, it doesn't have to be this way.

Friday, August 19, 2011

Economic Myths: We Separate Fact From Fiction

by Michael Grabell
ProPublica, Aug. 18, 2011, 3:44 p.m.

With the recent Iowa straw poll and President Obama's bus tour, Americans are hearing a cacophony of arguments about the wobbly economy. The federal stimulus package passed in 2009 was either a deficit-busting failure full of wasteful projects or an unparalleled rescue that would have been more successful if it had only been bigger. Taxes are either stifling or the lowest they've ever been. America needs to invest in infrastructure, or "infrastructure" is merely a euphemism for more government spending. So, here's our guide to the most prevalent economic myths.

A Single-Payer Health System Is the Answer to Our Debt Woes

Political news has been dominated in recent months by debate about a "debt crisis" in the United States. Two leading newspapers now say the solution to our debt issues is apparent and relatively simple. But do the American people, and our leaders, have the will to see it through?

The answer, says the St. Louis Post-Dispatch in an editorial dated August 10, is a single-payer health system. The Charleston Gazette, in the capital city of West Virginia, followed up with a similar editorial on August 16.

Our Handy Guide to the Best Coverage on Gov. Rick Perry and His Record

by Braden Goyette
ProPublica, Aug. 18, 2011, 10:58 a.m.

This is the first installment in a series of reading guides on 2012 presidential candidates.

Rick Perry has made plenty of headlines since he announced his presidential bid. But with the deluge of day-to-day coverage, it’s hard to get a sense of his actual record. We’ve selected some of the best reading on Perry to help you get oriented.

The basics:

If you want to go beyond the bio on Perry's campaign page, Texas Monthly reporter Paul Burka’s guide for Yankee journalists is a good place to start. It’s a list of eight insights gleaned from covering Perry since the 1980s, including the ways that Perry has reinvented the role of governor in Texas, and how his rural upbringing has shaped his politics.

Christian Zionist Agenda Exposed by NAR Apostle Don Finto at Rick Perry Event, and Few Noticed

Rachel Tabachnick
Tue Aug 16, 2011 at 03:26:47 PM EST

Apostle Don Finto, joined by Messianic Rabbi Marty Waldman, delivered the Israel prayer at Rick Perry's August 6 prayer rally; not John Hagee. Finto is a leading figure in an international effort to encourage evangelicals to support Messianics and their ministries to evangelize Jews. (Messianic is the term for Jews who convert to Christianity but retain their Jewish identity.) Finto did not change his message for Perry's religio-political event, but prayed for Jews of Israel and the world to convert. The belief that the conversion of Jews is the trigger that will bring about the return of Jesus is part of the end times narrative being popularized by the apostles of the New Apostolic Reformation (NAR).

Wall Street firms donated $11.2 million to members of debt ‘super committee’

By Eric W. Dolan
Thursday, August 18th, 2011 -- 8:39 pm

The bipartisan "super committee" created by the debt ceiling deal is comprised of lawmakers who have received big bucks from special interest groups, according to a report by MapLight.

The committee is tasked with finding at least $1.2 trillion in deficit cuts over ten years.

In total, the twelve members appointed to the Joint Select Committee on Deficit Reduction got nearly $64.5 million from special interests groups over the past decade, with legal firms donating about $31.5 million and Wall Street firms donating about $11.2 million.

Revealed: Fake Facebook Identity Used By Military Contractors Plotting To Hack Progressive Organizations

Earlier this year, ThinkProgress obtained 75,000 private emails from the defense contractor HBGary Federal via the hacktivist group called Anonymous. The emails led to two shocking revelations. First, that an assortment of private military firms collectively called “Team Themis” had been tapped by Bank of America to conduct a cyber war against reporters sympathetically covering the Wikileaks revelations. And second, that late in 2010, the same set of firms began work separately for the U.S. Chamber of Commerce, a Republican-aligned corporate lobbying group, to develop a similar campaign of sabotage against progressive organizations, including the SEIU and ThinkProgress.

The Dangerous Reagan Cult

August 16, 2011

Exclusive: Ronald Reagan’s anti-government philosophy inspires Tea Party extremists to oppose any revenue increase, even from closing loopholes on corporate jets. Democrats try the spin that “even Reagan” showed flexibility on debt and taxes. But Robert Parry says it is the “Reagan cult” that is at the heart of America’s crisis.

By Robert Parry

In the debt-ceiling debate, both Republicans and Democrats wanted Ronald Reagan on their side. Republicans embraced the 40th president’s disdain for government and fondness for tax cuts, while Democrats noted that “even Reagan” raised the debt limit many times and accepted some tax increases.

But Reagan – possibly more than any political leader – deserves the blame for the economic/political mess that the United States now finds itself in. He was the patriarch for virtually every major miscalculation that the country has made over the past three decades.

Paul Krugman: A Success Story as Big as Texas? Actually, That's a Myth

by: Paul Krugman, Krugman & Co. | Op-Ed

Texas has been adding jobs faster than the rest of the nation, a fact that has become especially notable in the past couple of years — I recently saw it referred to as the Texas “jobs juggernaut” — as overall job growth has been so poor.

But what’s the story here? Oddly, it’s rare to see anyone in this debate talking in terms of models — that is, the kind of stylized, simplified, but internally consistent stories (not necessarily mathematical) that are what economic analysis is all about. So let me try to fill that gap by offering three informal models of what might be going on in Texas.

In each of these stories, I imagine, to clarify things, an initial state in which America is divided into two identical regions; call them Texas and New York. Each of these regions has a labor force that lives in houses; I ignore other factors of production, except that I assume that building houses requires land, which is in limited supply. And we assume that initially everything is in equilibrium: wages and the cost of housing are the same in both regions.

Why Civilian Control of the US Military Is Deeply Threatened

By Conn Hallinan, AlterNet
Posted on August 18, 2011, Printed on August 19, 2011

For decades the U.S. military has waged clandestine war on virtually every continent on the globe, but, for the first time, high-ranking Special Operations Forces (SOF) officers are moving out of the shadows and into the command mainstream. Their emergence suggests the U.S. is embarking on a military sea change that will replace massive deployments, like Iraq and Afghanistan, with stealthy night raids, secret assassinations, and death-dealing drones. Its implications for civilian control of foreign policy promises to be profound.

Early this month, Vice Adm. Robert Harward—a former commander of the SEALs—the Navy's elite SOF that recently killed al-Qaeda leader Osma bin Laden—was appointed deputy commander of Central Command, the military region that embraces the Middle East and Central Asia. Another SEAL commander, Vice Adm. Joseph Kernan, took over the number two spot in Southern Command, which covers Latin America and the Caribbean.

The Tea Party's Circular Logic

Its revolt undermines the private sector more than it reins in "big government."

America's Tea Party has a simple fiscal message: The United States is broke. This is factually incorrect—U.S. government securities remain one of the safest investments in the world—but the claim serves the purpose of dramatizing the federal budget and creating a great deal of hysteria around America's current debt levels. This then produces the fervent belief that government spending must be cut radically—and now.

There are legitimate fiscal issues that demand serious discussion, including how to control growth in health care spending and how best to structure tax reform. But the Tea Party faction of the Republican Party cares more about small government than anything else. Its members insist, above all, that federal tax revenue never be permitted to exceed 18 percent of GDP. Their historical antecedent is America's anti-revenue Whiskey Rebellion in 1794, not the original anti-British, pro-representation Boston Tea Party in 1773.

Digby: Sweetening the Perry Beat

I am watching the DC press fall for Rick Perry's macho swagger right before my eyes. And Democrats won't do anything about it because it might offend someone who identifies with him, so it's likely to go on for a little while, especially if he solidifies as the front runner.

This piece is getting wide attention tonight among media types who are very impressed with its allegedly nuanced take on the new "it" boy. It's written by a reporter who's been covering the southwest for The Economist for four years, who feels that Perry has gotten a bum rap for being dumb and extreme. The dumbness may be true for all I know -- he wouldn't be the first pol to cover his intellect with a good ole boy persona.

Wednesday, August 17, 2011

Most U.S. docs face malpractice suits but few pay

By Agence France-Presse
Wednesday, August 17th, 2011 -- 8:12 pm

WASHINGTON — More than three in four US doctors will face a malpractice suit at some point in their careers, but cash is paid in only about 20 percent of cases, said a US study released Wednesday.

The analysis by researchers at several major US medical schools and the RAND Corporation, a nonrofit research group, was published in the New England Journal of Medicine.

Obama’s FDR Moment

Wednesday, 08/17/2011 - 2:30 pm by Eliot Spitzer

Americans are looking to the President for bold ideas. Here are two.

President Obama should heed the famous wisdom of FDR: “Above all, try something.” Being passive in the face of rising anxiety breeds discontent, doubt, and ultimately, contempt.

Interestingly, the president’s one grand moment to date — his embrace of the plan to capture Osama Bin Laden –emerged from a willingness to be bold, even when many of his advisers were counseling otherwise. He defied the more modulated approaches many military advisers recommended, and the payoff, both substantive and political, was huge. The president should take this lesson and apply it to his actions in the domestic arena.

Higher Retirement Age? Lower Benefits? The President Says You Won't "Notice"

Back in my corporate days I sat in a boardroom with one of the most powerful and fearsome CEOs in the country. He had called in the executives that designed his employee benefits program and asked them to propose changes to the corporation's retirement and health programs. But he scowled and shook his head as they presented one set of options after another. Finally I asked the question the others were afraid to ask: What do you want to accomplish by changing your employees' benefits?

"I want to give them less," he said, "and make them think it's more."

Can James Murdoch argue himself out of this corner?

After the release of shocking new phone-hacking documents, the News Corporation executive is surely too compromised to stay

Brian Cathcart,,
Tuesday 16 August 2011 15.00 BST

Tom Watson MP said the new material was devastating and he was not exaggerating. Difficult though it may be to believe, documents released by the Commons culture, media and sport select committee are at least as damaging to News International management as the revelation last month that Milly Dowler's voicemail had been hacked. That news prompted disgrace and resignations: now we are looking at possible criminal charges at senior levels.

Assuming that these documents hold up to scrutiny, a whole raft of executives – not journalists or editors, but well above that level – are surely likely to be questioned by police investigating the possibility of a conspiracy to pervert the course of justice. Arrests in some cases must be likely.

Is the SEC Covering Up Wall Street Crimes?

A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation's worst financial criminals.

by: Matt Taibbi

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

Tuesday, August 16, 2011

Special prosecutor named in Prosser/Bradley altercation

Allegations of chokehold in Wisconsin Supreme Court chambers to be investigated

By Patrick Marley of the Journal Sentinel

Madison - Sauk County District Attorney Patricia Barrett will serve as special prosecutor in the investigation of a physical altercation between two state Supreme Court justices.

Justice Ann Walsh Bradley has said Justice David Prosser put her in a "chokehold" during a June argument over a case in her chambers. Others have said Bradley came at Prosser with fists raised and he put up his hands to block her or push her back.

Long-term unemployment wreaks mental toll on jobless

WASHINGTON — Lisa Banks feels hopeless. She's lost an essential part of her identity: Her status as a proud full-time employee is gone.

Ever since the 44-year-old Germantown, Md., resident was laid off from her job as an administrator for a federal contractor in May 2009, she's sent out hundreds of resumes, but only had four interviews. She says she's depressed enough to try to seek out psychological help. But no luck there either: She doesn't have insurance to pay for it.

Must-Reads: The Late, Great Molly Ivins on Rick Perry

—By Asawin Suebsaeng | Tue Aug. 16, 2011 3:00 AM PDT

As Texas Gov. Rick Perry embarks on his Obama-bashing, evangelical-courting, tea party-outdoing campaign for the presidency, we miss Molly Ivins more than ever.

The late and celebrated liberal columnist was known as a writer of sparkling political commentary infused with a trenchant wit and copious shots of zero-bullshit humor. She was the consummate Texan, a ferocious populist critic of the American right wing, and a sorely missed Mother Jones contributor.

Meet the Christian Dominionist 'Prayer Warriors' Who Have Chosen Rick Perry as Their Vehicle to Power

By Rachel Tabachnick, AlterNet
Posted on August 15, 2011, Printed on August 16, 2011

Since he announced his candidacy on Saturday, Texas Governor Rick Perry has been hailed as the great GOP hope of 2012. Perry's entry into the chaotic Republican primary race has excited the establishment in part because he does not have Michele Bachmann's reputation for religious zealotry, yet can likely count on the support of the Religious Right.

Another advantage for Perry is support from an extensive 50-state “prayer warrior” network, organized by the New Apostolic Reformation. A religious-political movement whose leaders call themselves apostles and prophets, NAR shares its agenda for control of society and government with other “dominionists,” but has a distinctly different theology than other groups in the Religious Right. They have their roots in Pentecostalism (though their theology has been denounced as a heresy by Pentecostal denominations in the past). The movement is controversial, even inside conservative evangelical circles. Nevertheless, Perry took the gamble that NAR could help him win the primaries, a testament to the power of the apostles’ 50-state prayer warrior network.

President Obama's re-election economic policy

President Obama has abandoned evidence-based economics to return the US to growth in favour of the politics of deficit-cutting

Dean Baker, Monday 15 August 2011 15.00 BST

A front page story in Sunday's New York Times gave the country the bad news. President Obama is no longer paying attention to economists and economics in designing economic policy. Instead, he will do what his campaign people tell him will get him re-elected, presumably by getting lots of money from Wall Street.

The article said that President Obama intends to focus on reducing government spending and cutting programmes like social security and Medicare. This is in spite of the fact that: "A wide range of economists say the administration should call for a new round of stimulus spending, as prescribed by mainstream economic theory, to create jobs and promote growth."

In other words, President Obama intends to ignore the path for getting the economy back to full employment that most economists advocate. Instead, he is going to cut government spending – because his chief of staff and former JP Morgan vice president Bill Daley and his top campaign adviser David Plouffe both say this is a good idea.

ALEC: Facilitating Corporate Influence Behind Closed Doors

Through the American Legislative Exchange Council (ALEC), corporations pay to bring state legislators to one place, sit them down for a sales pitch on policies that benefit the corporate bottom line, then push “model bills” for legislators to make law in their states. Corporations also vote behind closed doors alongside politicians on this wishlist legislation through ALEC task forces. Notably absent were the real people who would actually be affected by many of those bills and policies.

Why the New Healthcare Law Should Have Been Based on Medicare (And What Democrats Should Have Learned By Now)

Sunday, August 14, 2011

Two appellate judges in Atlanta — one appointed by President Bill Clinton and one by George H.W. Bush – have just decided the Constitution doesn’t allow the federal government to require individuals to buy health insurance.

The decision is a major defeat for the White House. The so-called “individual mandate” is a cornerstone of the Affordable Care Act, President Obama’s 2010 health care reform law, scheduled to go into effect in 2014.

Paul Krugman: The Texas Unmiracle

As expected, Rick Perry, the governor of Texas, has announced that he is running for president. And we already know what his campaign will be about: faith in miracles.

Some of these miracles will involve things that you’re liable to read in the Bible. But if he wins the Republican nomination, his campaign will probably center on a more secular theme: the alleged economic miracle in Texas, which, it’s often asserted, sailed through the Great Recession almost unscathed thanks to conservative economic policies. And Mr. Perry will claim that he can restore prosperity to America by applying the same policies at a national level.

So what you need to know is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment.

The Real U.S. Crisis Is Not the Debt Downgrade: Simon Johnson

The U.S. has a fiscal crisis, but not the one that everyone is talking about. Standard and Poor’s proved beyond a reasonable doubt that the U.S. still has the world’s preeminent reserve currency. When shocks hit -- and investors have no idea who or what might be next in line for a downgrade -- they buy U.S. government securities.

Downgrades don’t usually have this effect. For example, if S&P or other rating companies downgraded France, that would set off a crisis within the euro region -- pushing up interest rates on French government debt, undermining euro-area banks, and perhaps putting pressure on the fabric of the European Union itself. With a one-notch downgrade of the U.S. government, on the other hand, S&P inadvertently managed to lower the U.S.’s borrowing costs, both at the federal level and for homeowners who refinanced their mortgages.

Sunday, August 14, 2011

The Next Debtpocalypse: Fiscal Meltdowns in the States

Inside the plan to gut state budgets and keep corporate America happy.

Fri Aug. 12, 2011 3:00 AM PDT

With the dust settling after the debt ceiling fight, Republicans—along with a few Democrats—are moving on to their next agenda item: blocking states from collecting millions in much-needed tax revenue from corporations.

The Business Activity Tax Simplification Act, or BATSA, passed out of the House Judiciary Committee in early July and is set to be taken up by the full House when Congress returns from its August recess. The bill, which is sponsored by Rep. Bob Goodlatte (R-Va.), would forbid state and local governments in the 44 states that collect corporate income taxes from taxing a sizable chunk of corporate profits.

Nouriel 'Dr. Doom' Roubini: ‘Karl Marx Was Right’

By Joseph Lazzaro, U.S. Editor | August 13, 2011 10:05 PM EDT

There's an old axiom that goes "wise is the person who appreciates candor almost as much as good news" and with that as a guide, place the forthcoming decidedly in the category of candor.

Economist Nouriel "Dr. Doom" Roubini, the New York University professor who four years ago accurately predicted the global financial crisis, said one of economist Karl Marx's critiques of capitalism is playing itself out in the current global financial crisis.

The 15 most sustainable U.S. cities

by Claire Thompson
16 Jul 2009 1:54 PM

Seattle is the most sustainable big city in the nation, according to a list compiled by Smarter Cities, an NRDC project that looks at the progress American cities are making toward going green. Not surprisingly, San Francisco and Portland are the runners-up.

Using data from the EPA and the U.S. Census Bureau, as well as some voluntary survey responses from city governments, the project identified the top 15 large, medium, and small cities according to 10 different environmental criteria, from air quality to recycling to transportation.

Rick Perry's Army of God

A little-known movement of radical Christians and self-proclaimed prophets wants to infiltrate government, and Rick Perry might be their man.

by Forrest Wilder

On September 28, 2009, at 1:40 p.m., God’s messengers visited Rick Perry.

On this day, the Lord’s messengers arrived in the form of two Texas pastors, Tom Schlueter of Arlington and Bob Long of San Marcos, who called on Perry in the governor’s office inside the state Capitol. Schlueter and Long both oversee small congregations, but they are more than just pastors. They consider themselves modern-day apostles and prophets, blessed with the same gifts as Old Testament prophets or New Testament apostles.

The pastors told Perry of God’s grand plan for Texas. A chain of powerful prophecies had proclaimed that Texas was “The Prophet State,” anointed by God to lead the United States into revival and Godly government. And the governor would have a special role.

Betting on the Blind Side

Michael Burry always saw the world differently—due, he believed, to the childhood loss of one eye. So when the 32-year-old investor spotted the huge bubble in the subprime-mortgage bond market, in 2004, then created a way to bet against it, he wasn’t surprised that no one understood what he was doing. In an excerpt from his new book, The Big Short, the author charts Burry’s oddball maneuvers, his almost comical dealings with Goldman Sachs and other banks as the market collapsed, and the true reason for his visionary obsession.

Excerpted from The Big Short: Inside the Doomsday Machine, by Michael Lewis, to be published this month by W. W. Norton; © 2010 by the author.

In early 2004 a 32-year-old stock-market investor and hedge-fund manager, Michael Burry, immersed himself for the first time in the bond market. He learned all he could about how money got borrowed and lent in America. He didn’t talk to anyone about what became his new obsession; he just sat alone in his office, in San Jose, California, and read books and articles and financial filings. He wanted to know, especially, how subprime-mortgage bonds worked. A giant number of individual loans got piled up into a tower. The top floors got their money back first and so got the highest ratings from Moody’s and S&P, and the lowest interest rate. The low floors got their money back last, suffered the first losses, and got the lowest ratings from Moody’s and S&P. Because they were taking on more risk, the investors in the bottom floors received a higher rate of interest than investors in the top floors. Investors who bought mortgage bonds had to decide in which floor of the tower they wanted to invest, but Michael Burry wasn’t thinking about buying mortgage bonds. He was wondering how he might short, or bet against, subprime-mortgage bonds.

Every mortgage bond came with its own mind-numbingly tedious 130-page prospectus. If you read the fine print, you saw that each bond was its own little corporation. Burry spent the end of 2004 and early 2005 scanning hundreds and actually reading dozens of the prospectuses, certain he was the only one apart from the lawyers who drafted them to do so—even though you could get them all for $100 a year from

Downsizing Sprawlopolis: Flabby City, Fit City

by: Jeffery J. Smith, Truthout | Op-Ed

The obese American is not just a person; it's also most US cities. Most cities here sprawl over way too much land for their number of inhabitants. Compare that footprint to Old World cities that are much more compact.

While we say "footprint," the more accurate term would be "tire track."

Our cities take up so much land not for humans, but for automobiles. Cars like wide streets, parking lots, driveways, parking garages for rest, gas stations for sustenance, repair shops and parts stores for health, dealer lots to show off, junk yards for final repose, plus highway patrol stations, parcels zoned commercial for insurance offices etc. Add it all up, cars take up as much surface area as do people in American cities [4].

Saturday, August 13, 2011

ANALYSIS: A new kind of house call

VA Independence at Home program may provide model for Medicare savings

By Wendell Potter
6:00 am, August 8, 2011

Dr. Bruce Kinosian still makes house calls, and he’s proud of it. In fact, he introduces himself as a physician who goes to see his patients in their homes rather than insisting that they come to see him at his office

He’s convinced that if more doctors did what he does, we could eliminate billions of dollars we currently spend in this country in an often-futile—and almost always incredibly expensive—effort to get people well.

S&P not shy about using its clout politically

By Michael Hudson and Aaron Mehta
10:00 am, August 9, 2011

In April 2002, Georgia Gov. Roy Barnes won legislative approval for a law to hold Wall Street accountable for bankrolling predatory lending. After the Democrat lost reelection that fall to Republican Sonny Perdue, the finance industry launched an all-out assault on the provisions of the law that held mortgage investors liable if they bought fraud-tainted home loans.

One of the defining moments in the legislative fight came when Standard & Poor’s, the giant debt rating company, announced it would no longer rate securities that might be backed by loans covered by the Georgia law, raising the specter that investors would cut off the flow of money into the state’s mortgage market and cripple its ability to provide credit to homeowners.

In March 2003, the legislature buckled to pressure and passed amendments shielding mortgage investors from liability. Other states saw what happened in Georgia and shied away.

The Grubby Species

Nobility is a bitch, and a real seductive one at that.

I’m capable of some serious cynicism, but these days I kinda wish I had a lot more of it. I kinda wish I had born and raised in a more cynical time. Then maybe I wouldn’t get my heart broken so often.

That’s a funny thing to say about the time I grew up in, in a way. It was the era of Vietnam and Watergate, the era of police attack dogs and burning cities. My Lai, Kent State, Nixon, Watts. What’s uglier than that? And can’t one make a very compelling case that these are significantly better times today? I mean, after all, the government isn’t beating and murdering our kids on America’s streets. And while we’re still fighting wars (of course), there are a lot less casualties on either side these days. Aren’t things better?

Leap of Faith

The making of a Republican front-runner.

by Ryan Lizza
August 15, 2011

The transformation of Michele Bachmann from Tea Party insurgent and cable-news Pasionaria to serious Republican contender in the 2012 Presidential race was nearly complete by late June, when she boarded a Dassault Falcon 900, in Dulles, Virginia, and headed toward the caucus grounds of Iowa. The leased, fourteen-seat corporate jet was to serve as Bachmann’s campaign hub for the next few days, and, before the plane took off, her press secretary, Alice Stewart, announced to the six travelling chroniclers that there was one important rule. “I know everything is on the record these days,” Stewart said, “but please just don’t broadcast images of her in her casual clothes.”

Paul Krugman: The Hijacked Crisis

Has market turmoil left you feeling afraid? Well, it should. Clearly, the economic crisis that began in 2008 is by no means over.

But there’s another emotion you should feel: anger. For what we’re seeing now is what happens when influential people exploit a crisis rather than try to solve it.

For more than a year and a half — ever since President Obama chose to make deficits, not jobs, the central focus of the 2010 State of the Union address — we’ve had a public conversation that has been dominated by budget concerns, while almost ignoring unemployment. The supposedly urgent need to reduce deficits has so dominated the discourse that on Monday, in the midst of a market panic, Mr. Obama devoted most of his remarks to the deficit rather than to the clear and present danger of renewed recession.

Roger Ailes and the rise of Fox News

Even Rupert Murdoch is afraid of Roger Ailes, the paranoid boss of Fox News. But 'the Chairman' is using his power to make Americans more rightwing, more ignorant and ever more terrified

Tim Dickinson,,
Wednesday 10 August 2011 20.00 BST

At the Fox News Chrismas party the year the network overtook arch-rival CNN in the cable ratings, tipsy employees were herded down to the basement of a midtown bar in New York. As they gathered around a television mounted high on the wall, an image flashed to life, glowing bright in the darkened tavern: the MSNBC logo. A chorus of boos erupted among the Fox faithful. The CNN logo followed, and the catcalls multiplied. Then a third slide appeared, with a telling twist. In place of the logo for Fox News was a beneficent visage: the face of the network's founder. The man known to his fiercest loyalists simply as "the Chairman" – Roger Ailes.

"It was as though we were looking at Mao," recalls Charlie Reina, a former Fox News producer. The Foxistas went wild. They let the dogs out. Woof! Woof! Woof! Even those who disliked the way Ailes runs his network joined in the display of fealty, given the culture of intimidation at Fox News. "It's like the Soviet Union or China: People are always looking over their shoulders," says a former executive with the network's parent, News Corp. "There are people who turn people in."

Harry Reid's Appointments: Social Security And Medicare Now At Risk

According to reports, Senate Majority Leader Harry Reid plans to announce today that his appointees to the super committee Gang of 12 will be Sens. John Kerry, Patty Murray and Max Baucus. Reid apparently has chosen not to appoint Sens. Bernie Sanders or Sherrod Brown or Jeff Merkley, who have forcefully stood with the majority of Americans who want Medicare and Social Security protected and who favor raising taxes on the rich to help reduce the deficit.

Baucus, the chairman of the Senate Finance Committee, is a conservative Democrat. He has been a consistent supporter of Social Security, playing a key role in blocking President George W. Bush’s attempt to privatize the program. He was on President Obama's deficit commission but sensibly voted against the plan put forth by the co-chairs, which would have cut deeply from Social Security and Medicare.

On the other hand, Baucus is a leading recipient of contributions from the drug companies and the health insurance industry. He has voted against repealing the tax benefits for companies that ship jobs overseas. He voted for the Bush tax cuts and voted to repeal the estate tax. He is not a champion of sensible health care policy or progressive tax reform.

Paul Krugman: Dismal Thoughts

To be an economist of my stripe these days — basically a Keynes-via-Hicks type, who concluded as soon as Lehman fell that we were in a classic liquidity trap with all that implied — is a bittersweet experience, with the bitter vastly greater than the sweet.

The good news, such as it is, is that our underlying model has performed very well. Interest rates have stayed low despite large government borrowing; crowding out has been totally absent; huge increases in the monetary base have not been highly inflationary.

The bad news is that policy makers almost everywhere have failed dismally, and seem determined not to take on board the lessons of experience, either historical or what we’ve learned the past few years.

Barbara Ehrenreich: On Turning Poverty Into an American Crime

by: Barbara Ehrenreich, TomDispatch | Op-Ed

I completed the manuscript for "Nickel and Dimed" in a time of seemingly boundless prosperity. Technology innovators and venture capitalists were acquiring sudden fortunes, buying up McMansions like the ones I had cleaned in Maine and much larger. Even secretaries in some hi-tech firms were striking it rich with their stock options. There was loose talk about a permanent conquest of the business cycle, and a sassy new spirit infecting American capitalism. In San Francisco, a billboard for an e-trading firm proclaimed, "Make love not war," and then -- down at the bottom -- "Screw it, just make money."

Obama Agrees With Panetta, Endorses Medicare ‘Adjustments’ Over Defense Cuts

Frank (D-MA) asked President Obama to repudiate Defense Secretary Leon Panetta’s insistence that in order to deal with the nation’s debt and deficit, additional revenue should come from tax increases and cuts to entitlement programs, such as Medicare, instead of the reducing military spending.

Obama Agrees With Panetta, Endorses Medicare ‘Adjustments’ Over Defense Cuts

Frank (D-MA) asked President Obama to repudiate Defense Secretary Leon Panetta’s insistence that in order to deal with the nation’s debt and deficit, additional revenue should come from tax increases and cuts to entitlement programs, such as Medicare, instead of the reducing military spending. TPM notes that Obama gave his answer in an speech today in which he backed Panetta. Obama said there isn’t much more to cut beyond the defense and domestic spending reductions that were part of the debt ceiling deal last week. “What we need to do now,” Obama said, “is combine those spending cuts with two additional steps: tax reform that will ask those who can afford it to pay their fair share and modest adjustments to health care programs like Medicare.”

The Meltdown’s True Villain

With a double-dip recession looming and attacks on Obama mounting, it’s amazing the GOP is still setting the U.S. agenda when its own George W. Bush ran up half the debt we’ve accumulated since Reagan.

Aug 5, 2011 8:52 PM EDT

As we thunder toward a double-dip recession on a possible worldwide scale, let’s step back and remember how all this happened. I’ve been pretty hard on Barack Obama lately (and will be again on Monday, as you’ll see). But Obama is not the villain in this story. Every time I step back and ponder this sordid history, I am amazed that the Republican Party has any credibility and even 100 members of Congress, let alone a sizable House majority and enough juice to be driving the nation’s agenda as it is.

The Boston Globe ran a chart last Sunday that I’d buy billboard space to reproduce in every decent-size city in America, if I were running the Democratic National Committee. The premise of it was very simple: It showed how many trillions each president since Ronald Reagan has added to the nation’s debt. The debt was about $1 trillion when Reagan took office, and then: Reagan, $1.9 trillion; George H.W. Bush, $1.5 trillion (in just four years); Bill Clinton, $1.4 trillion; Obama, $2.4 trillion.

New anticensorship scheme could make it impossible to block individual sites

ANN ARBOR, Mich.—A radical new approach to thwarting Internet censorship would essentially turn the whole web into a proxy server, making it virtually impossible for a censoring government to block individual sites.

The system is called Telex, and it is the brainchild of computer science researchers at the University of Michigan and the University of Waterloo in Canada. They will present it Aug. 12 at the USENIX Security Symposium in San Francisco.

"This has the potential to shift the arms race regarding censorship to be in favor of free and open communication," said J. Alex Halderman, assistant professor of computer science and engineering at U-M and one of Telex's developers.

U.Va. Researchers Find High Energy Output From Algae-Based Fuel, But 'No Silver Bullet'

August 8, 2011 — Algae-based fuel is one of many options among the array of possible future energy sources. New University of Virginia research shows that while algae-based transportation fuels produce high energy output with minimal land use, their production could come with significant environmental burdens.

For farmers looking to maximize profits, algae would produce considerably more transportation energy than canola and switch grass for every hectare planted, and can also be grown on poor-quality marginal land that cannot be easily used to grow food crops such as corn, according to a report by Andres F. Clarens and Lisa M. Colosi, both assistant professors of civil and environmental engineering in the U.Va. School of Engineering and Applied Science, and Mark A. White, professor in the McIntire School of Commerce.

Paul Krugman: Capitulation, Not Compromise, Led to a Debt Deal

What would I have done?

That’s the question President Obama’s kinda-sorta defenders keep asking; it’s supposed to be a conversation-stopper.

But the answer is clear: I would have made a statement declaring that giving in to this kind of blackmail would constitute a violation of my oath of office, and that my lawyers, on careful reflection, have determined that there are several legal options that allow me to ignore this extortionate demand.

Now, the Obama people say that this wasn’t actually an option.

Well, I hate to say this, but I don’t believe them.

School Vouchers: How the GOP is Using Free Market Philosophy To Wipe Out Public Education

By Julianne Hing, ColorLines
Posted on August 8, 2011, Printed on August 13, 2011

Legislators in at least 30 states introduced school voucher bills this year that would allow students to take the public money set aside for their public education and “spend” it in private schools. It’s the largest rush of such policy proposals ever, according to the National Conference on State Legislatures, the AP reported. The surge was enabled in part by new Republican majorities that have taken hold of state legislatures in the past year.

In 2010, just nine voucher bills were debated in state legislatures, less than a third of this year’s volume. As of July, 28 states had also considered offering tax breaks to students who enroll in private schools.

Indiana’s voucher law, passed this year, is the most notable—and it offers both vouchers and tax breaks for private education. Republican Gov. Mitch Daniels aggressively pushed for the law, which would allow families who qualify to receive up to $4,500 a year if they send their child to a private school. It will allow 7,500 students in its first year, 15,000 the second and an unlimited number of students in its third to take advantage of the program.

S.F. gay married couple loses immigration battle

Washington -- Citing the Defense of Marriage Act, the Obama administration denied immigration benefits to a married gay couple from San Francisco and ordered the expulsion of a man who is the primary caregiver to his AIDS-afflicted spouse.

Bradford Wells, a U.S. citizen, and Anthony John Makk, a citizen of Australia, were married seven years ago in Massachusetts. They have lived together 19 years, mostly in an apartment in the Castro district. The U.S. Citizenship and Immigration Services denied Makk's application to be considered for permanent residency as a spouse of an American citizen, citing the 1996 law that denies all federal benefits to same-sex couples.

Why Are the Big Banks Getting Off Scot-Free?

By Yves Smith

For most citizens, one of the mysteries of life after the crisis is why such a massive act of looting has gone unpunished. We've had hearings, investigations, and numerous journalistic and academic post mortems. We've also had promises to put people in jail by prosecutors like Iowa's attorney general Tom Miller walked back virtually as soon as they were made.

Yet there is undeniable evidence of institutionalized fraud, such as widespread document fabrication in foreclosures (mentioned in the motion filed by New York state attorney general Eric Schneiderman opposing the $8.5 billion Bank of America settlement with investors) and the embedding of impermissible charges (known as junk fees and pyramiding fees) in servicing software, so that someone who misses a mortgage payment or two is almost certain to see it escalate into a foreclosure. And these come on top of a long list of runup-to-the-crisis abuses, including mortgage bonds having more dodgy loans in them than they were supposed to, banks selling synthetic or largely synthetic collateralized debt obligations as being just the same as ones made of real bonds when the synthetics were created for the purpose of making bets against the subprime market and selling BBB risk at largely AAA prices, and of course, phony accounting at the banks themselves.

New Exposé Tracks ALEC-Private Prison Industry Effort to Replace Unionized Workers with Prison Labor

Many of the toughest sentencing laws responsible for the explosion of the U.S. prison population were drafted by the American Legislative Exchange Council, which helps corporations write model legislation. Now a new exposé reveals ALEC has paved the way for states and corporations to replace unionized workers with prison labor. We speak with Mike Elk, contributing labor reporter at The Nation magazine. He says ALEC and private prison companies "put a mass amount of people in jail, and then they created a situation where they could exploit that." Elk notes that in 2005 more than 14 million pounds of beef infected with rat feces processed by inmates were not recalled, in order to avoid drawing attention to how many products are made by prison labor.

Shock Doctrine: How Conservatives and Corporate Elites Are Stoking Economic Hysteria to Force Catastrophic Cuts

By Robert L. Borosage, Blog for Our Future
Posted on August 8, 2011, Printed on August 13, 2011

Global economic turmoil is getting worse. Europe’s financial crisis now imperils Spain and Italy. The folly of premature austerity savages economies in Great Britain, Europe and, increasingly, the United States. China and the emerging economies are slowing down. This economy seems stalled at best. People are sensibly scared, worried about their jobs, their homes, their lost savings, their prospects.

Conservative and corporate elites are stoking the turmoil, and using fear to panic a public into accepting harsh measures that would be otherwise unacceptable. The stock market tanks after the debt ceiling debacle. Standard & Poor's, the discredited and corrupted rating agency, rushes to downgrade U.S. debt, with such haste it doesn’t even get its math right. China’s news service announces the U.S. must roll back its bloated “welfare state” and its bloated military. The talk shows are inundated with pundits expounding the urgent need for the U.S. to get its deficits under control to regain its credit status.

Barbara Ehrenreich: America's Tragic Decline

Barbara Ehrenreich discusses the sorry state of the American economy and how it impacts real people.

August 8, 2011 | Editor's note: In the following Democracy Now! interview, journalist Barbara Ehrenreich and Amy Goodman talk about the human cost of the economic meltdown.


: Standard & Poor’s announced Friday it’s downgraded the U.S. credit rating for the first time in history. The move by S&P, one of three leading credit rating agencies, came just days after Congress approved a $2.1 trillion deficit-reduction plan. S&P called the outlook "negative," indicating that another downgrade is possible in the next 12 to 18 months. Lowering the nation’s rating to one notch below AAA, the credit rating company said "political brinkmanship" in the debate over the debt had made the U.S. government’s ability to manage its finances, quote, "less stable, less effective and less predictable." It said the $2.1 trillion bipartisan agreement reached last week "fell short" of what was necessary to reduce the nation’s debt over time.

Monday, August 8, 2011

What Can We Do About The Great American Lie?

I. F. Stone told us many years ago that All Governments Lie. Daniel Ellsberg, in Secrets: A Memoir of Vietnam and the Pentagon Papers, told us why governments, including Presidents, always lie, and must continue to lie about what they know to be true, but about which they cannot talk under constraints of "National Security." The lies place an impermeable barrier between Those Who Know and Those Who Cannot Be Told, a barrier that trickles downhill, forever separating the citizenry of the United States from their government.

Today, the lies continue, as they must, even though journalists, bloggers and other malcontents desperately chip away at the facade. The raid into Pakistan to capture Bin Laden is revealed to have been not a one-off military adventure, but part of an on-going campaign of covert military intervention in 120 countries around the world on the part of a highly organized and secretly funded cadre of 15,000 specially trained soldiers let loose on the world.

The Truth About Taxes

A week later and we are still amazed at how the Republicans in Congress pulled it off. They held the economy hostage, won some cheap political points, and all of us will spend the next decade paying the ransom as government programs — $900 billion over 10 years in the first round — are slashed and the recovery is put at risk.

The only glimmer of hope is that the battle is not completely over — if President Obama is finally willing to fight.

Under the terms of the ill-conceived debt agreement, Congress has to propose another $1.5 trillion in deficit reduction measures by December. Just to ensure that rationality does not have a chance, Republican leaders said they would not put anyone on the deficit-cutting “super-committee” who might entertain the idea of raising taxes.

The Bad Deal

The debt agreement should finally make clear to Europeans that Barack Obama is not the progressive President they had hoped for. Instead, writes James K. Galbraith, he is a willful player in the Washington politics game.

by James K. Galbraith

Political news travels slowly, and in my casual observation progressive Europeans have held on to the myth of Barack Obama as a good man much longer than most progressive Americans did. How could a young black American from Chicago and Harvard be otherwise?

Over here reality has been evident for a while, thanks to the President's pattern of giving way to banks, lobbies, Republicans and right-wing extremists. Whether your prime interest is housing, health care, peace, justice, jobs or climate change, if you are an activist in America you have known for a long time that this President is not your friend.

Conservative Crusade to Discredit Labor Experts Spreads to MI

—By Andy Kroll | Tue Mar. 29, 2011 9:26 AM PDT

On March 24, William Cronon, an acclaimed history professor at the University of Wisconsin-Madison, offered a startling revelation on his personal blog: The Wisconsin Republican Party had filed a Freedom of Information Act request demanding all emails sent or received via Cronon's UW email account mentioning certain labor unions, labor leaders, the words "recall" and "collective bargaining," and the names of a host of state Republican lawmakers, including Governor Scott Walker. The request was clearly aimed at intimidating and discrediting Cronon, a prominent academic who has criticized Wisconsin Republicans, especially Walker, on his blog and in the pages of the New York Times.

Labor Ramps Up Effort to Stop Trade Deals

by Vicki Needham

WASHINGTON - Organized labor and other opponents of three pending free-trade deals are ramping up grass-roots campaigns intended to pressure lawmakers to oppose the agreements.

The fight over the agreements is splitting President Obama from unions and other liberal groups at a time when there is already tension between the White House and the left over the debt-ceiling deal. While the accords with South Korea, Colombia and Panama have broad support from the White House and Republican leaders, opponents are using the August recess to try to build up opposition.

They argue the deals will harm an economy still struggling to create jobs amid a fragile economic recovery.

Dirty Tricks in WI: Deceptive Absentee Ballot Mailers Appear to be Coordinated Hoaxes

Several RW groups cooperate on fraudulent recall scams

PLUS: Election Integrity volunteer needed in WI...

No doubt by now you've heard of the deceptive absentee ballot applications mailed to Democrats in Wisconsin by David Koch's Americans for Prosperity, WI, as reported earlier this week by David Catanese at Politico.

As seen below, the mailer instructed recipients to return the application to the "Absentee Ballot Application Processing Center" by August 11th, even though the recall elections for 6 Republicans is next Tuesday, August 9th...

Shock Doctrine? Fight Back

by: Robert Borosage, Campaign for America's Future [3] | Op-Ed

Global economic turmoil is getting worse. Europe’s financial crisis now imperils Spain and Italy. The folly of pre-mature austerity savages economies in Great Britain, Europe and, increasingly, the United States. China and the emerging economies are slowing down. This economy seems stalled at best.

People are sensibly scared, worried about their jobs, their homes, their lost savings, their prospects.

Conservative and corporate elites are stoking the turmoil, and using fear to panic a public into accepting harsh measures that would be otherwise unacceptable. The stock market tanks after the debt ceiling debacle. Standard and Poors, the discredited and corrupted rating agency, rushes to downgrade US debt, with such haste it doesn’t even get its math right. China’s news service announces the US must roll back its bloated “welfare state” and its bloated military. The talk shows are inundated with pundits expounding the urgent need for the US to get its deficits under control to regain its credit status.

Paul Krugman: Credibility, Chutzpah and Debt

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.

America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Sunday, August 7, 2011

A timeline of events

By Steve Benen

Let’s take a stroll down memory lane, shall we?

1980: Ronald Reagan runs for president, promising a balanced budget

1981 - 1989: With support from congressional Republicans, Reagan runs enormous deficits, adds $2 trillion to the debt.

1993: Bill Clinton passes economic plan that lowers deficit, gets zero votes from congressional Republicans.

1998: U.S. deficit disappears for the first time in three decades. Debt clock is unplugged.

Bosnia, Kosovo, and Now Libya: The Human Costs of Washington’s Ongoing Collusion With Terrorists

Sunday 7 August 2011
by: Peter Dale Scott, Japan Focus [3] | Op-Ed

Twice in the last two decades, significant cuts in U.S. and western military spending were foreseen: first after the fall of the Berlin Wall, and then in the wake of the 2008 financial crisis. But both times military spending soon increased, and among the factors contributing to the increase were America’s interventions in new areas: the Balkans in the 1990s, and Libya today.1 Hidden from public view in both cases was the extent to which al-Qaeda was a covert U.S. ally in both interventions, rather than its foe.

U.S. interventions in the Balkans and then Libya were presented by the compliant U.S. and allied mainstream media as humanitarian. Indeed, some Washington interventionists may have sincerely believed this. But deeper motivations – from oil to geostrategic priorities – were also at work in both instances.

In virtually all the wars since 1989, America and Islamist factions have been battling to determine who will control the heartlands of Eurasia in the post-Soviet era. In some countries – Somalia in 1993, Afghanistan in 2001 – the conflict has been straightforward, with each side using the other’s excesses as an excuse for intervention.

Dumb Ideas From Both Sides of the Atlantic

European banks and American politicians are both making serious economic mistakes.

The Great Recession of 2008 has morphed into the North Atlantic Recession: It is mainly Europe and the United States, not the major emerging markets, that have become mired in slow growth and high unemployment. And it is Europe and America that are marching, alone and together, to the denouement of a grand debacle. A busted bubble led to a massive Keynesian stimulus that averted a much deeper recession but that also fueled substantial budget deficits. The response—massive spending cuts—ensures that unacceptably high levels of unemployment (a vast waste of resources and an oversupply of suffering) will continue, possibly for years.

The European Union has finally committed itself to helping its financially distressed members. It had no choice—with financial turmoil threatening to spread from small countries like Greece and Ireland to large ones like Italy and Spain, the euro's very survival was in growing jeopardy. Europe's leaders recognized that distressed countries' debts would become unmanageable unless their economies could grow and that growth could not be achieved without assistance.

Would Cutting the Military Budget Threaten Our Security?

It depends how we define our priorities.

By Fred Kaplan
Posted Wednesday, Aug. 3, 2011, at 4:19 PM ET

Here are some numbers to help you decide whether it really would be dangerous to take another slash at the military budget, as the debt-ceiling deal (and other fiscal politics) might soon require.

In 1985, at the height of President Ronald Reagan's Cold War arms build-up, the Pentagon budget (adjusted for inflation, to make it comparable in today's dollars) amounted to $574 billion.

How to Think About Standard and Poor's Downgrade

Standard and Poor's downgrade of U.S. government debt captured headlines across the country and around the world. It is a newsworthy event, but primarily as another colossal failure by a major credit rating agency.

First, it is worth mentioning the important background here. S&P, along with the other credit rating agencies, rated hundreds of billions of dollars of subprime mortgage backed securities as investment grade. They were paid tens of millions of dollar by the investment banks for these ratings. We know that concerns were raised by their own people about the quality of many of these issues. This was at the least astoundingly incompetent. It was quite possibly criminal.

This raises the question of whether S&P fears an investigation and possible prosecution. In such circumstances the desire to curry favor with powerful politicians could certainly influence their credit rating decisions. There are also rules affecting the credit rating agencies in the Dodd-Frank financial reform bill. The desire to have these rules written in a favorable way could affect the credit rating agencies' decisions. It would be nice if we could just assume that the credit rating agencies make their rulings on an objective assessment of the evidence, but we can't.

Will 2012 Be the End of the Presidential Public Financing System?

by Tarini Parti

It happened with typewriters, eight-tracks, VCRs and even flip-phones.

Now advocates for the public financing of political campaigns fear that the system once used by most presidential candidates could also become irrelevant without an upgrade.

The public funding program was established in 1976 as a response to Watergate scandal. It has seen few changes during the 30 years it has been used. And as historic levels of money pour into campaign coffers -- and outside groups gain increased freedom to spend unlimited amounts of cash on advertisements of their own -- more and more presidential candidates are choosing to fund their campaigns with private contributions.

The Rating Game: PowerPoints and Emails Illustrate the Play-For-Play "Agencies" Scheme

Must Read:
An Economy for All

(Reposted from May of last year to commemorate the S&P "downgrade." The "agency" scams have since spent millions in lobbying money to weaken and delay the Franken Amendment and other urgently needed reforms.)

PowerPoints, emails, and transcripts obtained by Sen. Carl Levin's Permanent Subcommittee on Investigations illustrate the real magnitude of Sen. Al Franken's victory today. Sen. Franken was able to pass an amendment which eliminates the conflict of interest that's created when ratings agencies "compete for business." It passed the Senate in a 64/35 vote - and it was a bipartisan victory, no less, with 10 Republicans joining 54 Dems to support it.

Here's how broken our current system has become: Not only are the ratings agencies competing as for-profit businesses, but our two largest agencies are publicly traded companies. That means they don't just worry about making a profit. They also have to worry about impressing the stock market on a quarterly basis to boost their stock prices and further enrich their executives. And who influences stock prices the most? Traders on Wall Street, who are also the agencies' customer base and the objects of their scrutiny.

A Tale of Two Lootings

Wednesday 3 August 2011
by: Richard D. Wolff, Truthout | News Analysis

The political posturing around the debt ceiling "crisis" was mostly a distraction from the hard issues. The hardest of those - underlying US economic decline - keeps resurfacing to display costs, pains and injustices that threaten to dissolve society. Its causes - two long-term trends over the last 30 years - help also to explain the political failures that now compound the social costs of economic decline.

The first trend is the attack on jobs, wages and benefits, and the second is the attack on the federal government's budget. The first trend enables the second. A capitalist economy suffering high unemployment with all its costly consequences shapes a bizarre, disconnected politics. The two major parties ignore unemployment and the system that keeps reproducing it. They argue instead over how much to cut social programs for the people while they agree that such cutting is the major way to fix the government's broken budget.

August Town Halls 2.0: Tea Party, Republicans Plan Renewed Push For Ryan’s Medicare Privatization Plan

By Igor Volsky on Aug 3, 2011 at 4:08 pm

In yet another sign that the debt ceiling negotiations have re-ignited conservatives’ fervor to privatize the Medicare program, Reuters is reporting that Tea Party activists are planning to descend on the town halls held by members of Congress while on recess this month to demand that the new super committee and future legislative proposals to reduce entitlement spending incorporate Rep. Paul Ryan’s (R-WI) plan to push future beneficiaries into private insurance plans:

Thousands of Tea Party movement activists are expected to descend this month on town hall meetings across key battleground states as part of an intensifying campaign ahead of the 2012 presidential and congressional elections.

How to Take Our Country Back From the Money Men Who Fund the Tea Party

by: June Carbone , New Deal 2.0 | Op-Ed

If there is a silver lining to the debt limit crisis — and it's a big if — it would be that the extremism of Republican agenda has finely become visible to a larger number of Americans. It is time to recognize what it means to face a determined ideological bloc. And what it means to fight back.

While New York Times columnist Thomas Friedman recently described the Tea Party as an American Hezbollah, Islamic terrorists would not have much clout without their funders in Saudi Arabia and Iran. So, too, the Republican right would be impotent without its behind-the-scenes creators. A small number of incredibly wealthy businessmen — the principle beneficiaries of the Bush tax cuts — have created an ideological machine determined to destroy government. Taking our country back, restoring pragmatism over ideology, and making government function requires making the deep pocket money men (and they are mostly men) visible and identifying their cause with the looting of the country.

Is the U.S. Credit Rating a Victim of GOP Sabotage?

The fiscal clown show continues. A few days after Congress and the White House agreed to raise the debt ceiling and cut spending, Standard & Poor's has downgraded the United States of America's credit rating from AAA to AA+.

S&P, which covered itself in a substance other than glory during the mortgage crisis, may have a poor record and strange methodology when it comes to sovereign ratings. France, which has a far higher debt per capita ratio than the U.S., still enjoys a AAA rating. And a downgrade, alone, doesn't mean U.S. interest rates will spike -- on Monday or at any time in the future. Japan's credit rating was downgraded several years ago, when the interest rates its government paid on bonds was already extremely low, and they've generally trended lower in the years since.

Why the insurance industry gets climate change

Insurance companies understand risk – which is why, unlike our myopic political class, they do not have their heads in the sand

Jules Boykoff, Tuesday 28 June 2011 17.00 BST

When it comes to climate change, the US Congress is a hornets' nest of political dysfunction. Last month, President Barack Obama nominated energy executive John Bryson to lead the commerce department. From the response of congressional Republicans, you might have thought Obama had nominated Ed Abbey and Rachel Carson's imaginary love child.

In 2009, Bryson had the audacity to support a cap-and-trade system to address climate change and, 40 years earlier, he helped launch the Natural Resource Defence Council. This spurred Darrell Issa (Republican, California) to deride him as a "green evangelist", while Senator John Barrasso (Republican, Wyoming) called Bryson an "environmental extremist" and Senator James Inhofe (Republican, Oklahoma) pegged him as "a founder of a radical environmental organisation".

Once Upon a Time in the West

A Commentary by Jakob Augstein

This week, the United States nearly allowed itself to succumb to economic disaster. Increasingly, the divided country has more in common with a failed state than a democracy. In the face of America's apparent political insanity, Europe must learn to take care of itself.

The word "West" used to have a meaning. It described common goals and values, the dignity of democracy and justice over tyranny and despotism. Now it seems to be a thing of the past. There is no longer a West, and those who would like to use the word -- along with Europe and the United States in the same sentence -- should just hold their breath. By any definition, America is no longer a Western nation.

The US is a country where the system of government has fallen firmly into the hands of the elite. An unruly and aggressive militarism set in motion two costly wars in the past 10 years. Society is not only divided socially and politically -- in its ideological blindness the nation is moving even farther away from the core of democracy. It is losing its ability to compromise.

America has changed. It has drifted away from the West.

Saturday, August 6, 2011

Next Low-Wage Haven: USA

by Jane Slaughter

Jokes about the U.S. becoming “Europe’s Mexico” are commonplace, but now high-priced consultants are pushing the notion in all seriousness.

They’re predicting that within five years certain Southern U.S. states will be among the cheapest manufacturing locations in the developed world—and competitive with China.

Media Malpractice on Debt Ceiling

Five ways media misreported deficit debate


There are specific patterns in corporate media coverage of political debates: Progressive ideas are generally marginalized. "Compromise" between the major parties is encouraged. Democrats should "move to the center," which in practical terms actually means moving to the right.

All of these tendencies have driven the discussion over the federal debt and the debt ceiling. In the end, the political process has produced an agreement that can be cheered by pundits and analysts for adhering to media's built-in bias for center-right economics and bogus ideas about centrism and political compromise.

Why companies aren’t hiring more workers

They're scared — and you're working so hard they don't have to

By Allison Linn Senior writer
updated 8/4/2011 5:50:48 PM ET

With more than 14 million people seeking work in this country, economists would really like to be seeing employers adding hundreds of thousands of jobs to their payrolls each month.

Instead, we’ve had to settle for just a small fraction of that.

The economy added a paltry 18,000 jobs in June, according to the Bureau of Labor Statistics. The government will report employment figures for July on Friday, but already many are fretting that job growth will again be anemic.

Next 'Giant Sucking Sound': U.S. Senate Leaders Reach Accord on Three New 'Free Trade' Agreements

Panama, Columbia, South Korea next in line for American jobs...

Guest blogged by Ernest A. Canning

Earlier today, Brad Friedman reported that, despite high unemployment and food stamp usage at an all-time record high, U.S. corporations were experiencing record profits.

Simultaneously, Los Angeles Times reported that Senate leaders have reached an accord to pass three more NAFTA-like "free trade" agreements (Panama, Colombia, and South Korea) when Congress returns from its August recess. The Times stated: "Proponents [e.g., the U.S. Chamber of Commerce] say the trade agreements...will pump as much as $14 billion into the U.S. economy and add more than 250,000 jobs."

30 Years Ago Today: The Day the Middle Class Died ...A Letter From Michael Moore

From time to time, someone under 30 will ask me, "When did this all begin, America's downward slide?" They say they've heard of a time when working people could raise a family and send the kids to college on just one parent's income (and that college in states like California and New York was almost free). That anyone who wanted a decent paying job could get one. That people only worked five days a week, eight hours a day, got the whole weekend off and had a paid vacation every summer. That many jobs were union jobs, from baggers at the grocery store to the guy painting your house, and this meant that no matter how "lowly" your job was you had guarantees of a pension, occasional raises, health insurance and someone to stick up for you if you were unfairly treated.

How a Corporatist Supreme Court Cabal Joined Forces With Right-Wing and Kochs to Quietly Sell Out Our Democracy

By Jim Hightower, Hightower Lowdown
Posted on August 5, 2011, Printed on August 6, 2011

Bill Watterson is Mark Twain--with a drawing pen. He is a master cartoonist, but also a sharp-witted observer of the absurd, with an impish sense of humor. From 1985-1995, Watterson penned "Calvin and Hobbes," the truly marvelous comic strip that featured six-year-old Calvin and his stuffed tiger Hobbes. In Calvin's inventive and iconoclastic mind, Hobbes was a genuine tiger (and his best friend)and they shared boundless adventures that challenged conventional thinking and defied authority, often crashing right through the prescribed social order of the 'real' world.

A recurring theme in the strip was a two-player baseball competition in which both the kid and the tiger simply made up the rules as they went.

Social Security's Biggest Threat: The Debt Deal Super Committee

Posted: 8/4/11 11:07 AM ET

This week's deal to raise the debt ceiling should remove any doubt about the power corporate interests have over our government. The deal, hammered out by the president and Republican congressional leaders, places the burden of reducing our long-term budget problems squarely on average Americans, while the wealthiest individuals and corporations are given a free pass.

But the deal poses a larger threat. A provision in the agreement creates an appointed "Super Committee" in Congress that could circumvent normal rules and slash cherished programs like Social Security, Medicare, and Medicaid.

How could this happen? Prior to this week's debt agreement, it's been extremely difficult to cut Social Security benefits, because doing so required 60 votes to overcome an almost certain filibuster in the Senate. And rightly so - Social Security is the most successful and popular government program in the history of the United States.

Friday, August 5, 2011

Social Security's Biggest Threat: The Debt Deal Super Committee

Posted: 8/4/11 11:07 AM ET

This week's deal to raise the debt ceiling should remove any doubt about the power corporate interests have over our government. The deal, hammered out by the president and Republican congressional leaders, places the burden of reducing our long-term budget problems squarely on average Americans, while the wealthiest individuals and corporations are given a free pass.

But the deal poses a larger threat. A provision in the agreement creates an appointed "Super Committee" in Congress that could circumvent normal rules and slash cherished programs like Social Security, Medicare, and Medicaid.

How could this happen? Prior to this week's debt agreement, it's been extremely difficult to cut Social Security benefits, because doing so required 60 votes to overcome an almost certain filibuster in the Senate. And rightly so - Social Security is the most successful and popular government program in the history of the United States.

Commentary: U.S. middle class is where the real job creators are

Achieving the “American dream” isn’t feeling so dreamy these days.

The day seems distant when average Americans held to the faith that hard work would secure them employment, a lifestyle they could depend on. And that if they passed that work ethic on to their children, along with a good education, then each generation would fare better in life.

Home ownership hits lowest level since 1965

August 5, 2011: 10:16 AM ET

NEW YORK (CNNMoney) -- As the foreclosure crisis continues to wreak havoc on the housing market, a source of national pride has taken a sour turn. Home ownership is on the decline and, according to a recent Morgan Stanley report, the United States is fast becoming a nation of renters.

Last Friday, the Census Bureau reported that the percentage of people who owned a home had dropped to 65.9% during the second quarter -- its lowest level since the first quarter of 1998 and a far cry from the high of 69.2% reached in late 2004.

The Beast Is Starved: Welcome to the Next Great Depression

Since Reagan, Republicans have been on a “starve the beast” campaign – by which they mean eviscerate the government by taking away as much revenue as they can.

Starving the beast has been the biggest bait and switch con game that has ever been perpetrated on the American people. And the most tragic.

The Koch Spider Web

by: Allison Kilkenny, Truthout | News Analysis

An election took place last fall in Virginia that didn't garner national attention, but it should have - not for the candidates or issues - but for the giant pile of corporate cash manipulating events behind the scenes.

Rick Boucher, a then-28-year incumbent Democratic Congressman from the Ninth District - the longest-serving Congressman in that district since the Civil War - was surprisingly defeated by Republican Morgan Griffith. The upset came as a shock to many, since an early October poll [4] showed Boucher ahead by double digits, including one measure earlier in the month that put him ahead by 10 percentage points.

C'est la vie. Such is political life. The National Republican Congressional Committee spent around $600,000 in ads, and the media framed the defeat as a Blue Dog, Boucher losing due to his support for cap-and-trade policies.

Study Suggests Increase in Public Health Spending Results in Healthier People

LEXINGTON, Ky. (August 1, 2011) — A groundbreaking new study published in the journal, Health Affairs, suggests that increases in public health spending result in healthier people, especially in communities with fewer resources.

The study was co-authored by Glen P. Mays, the new F. Douglas Scutchfield Endowed Professor in Health Services and Systems Research at the University of Kentucky College of Public Health. At UK, Mays is affiliated with the National Coordinating Center for Public Health Services and Systems Research, funded by the Robert Wood Johnson Foundation. Sharla A. Smith, a research associate in the Department of Health Policy and Management, University of Arkansas for Medical Sciences, co-authored the study.

Paul Krugman: The Wrong Worries

In case you had any doubts, Thursday’s more than 500-point plunge in the Dow Jones industrial average and the drop in interest rates to near-record lows confirmed it: The economy isn’t recovering, and Washington has been worrying about the wrong things.

It’s not just that the threat of a double-dip recession has become very real. It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.

For two years, officials at the Federal Reserve, international organizations and, sad to say, within the Obama administration have insisted that the economy was on the mend. Every setback was attributed to temporary factors — It’s the Greeks! It’s the tsunami! — that would soon fade away. And the focus of policy turned from jobs and growth to the supposedly urgent issue of deficit reduction.

But the economy wasn’t on the mend.

Are We Heading For A Second Global Financial Crisis?

By Richard Murphy, Comment Is Free
Posted on August 4, 2011, Printed on August 5, 2011

How far are we from #gfc2? For those not aware, #gfc2 is the Twitter hashtag used for "global financial crisis 2". And the question I ask is a real one.

A couple of weeks ago I wrote a blog wondering whether July 2011 felt like July 1914. And then along came a Greek deal, and now a US debt deal, and you might presume I had been prematurely melodramatic.

I wish that were true; I very much doubt it is.