Sunday, January 27, 2013

Boehner’s 10-Year Budget Plan: Take Unpopular Ryan Budget Cuts. Then Double Them.


To get House conservatives to capitulate on temporarily suspending the debt limit without securing any spending cuts, Boehner made a stunning pledge: the upcoming House budget would eliminate the deficit in 10 years.

As a talking point, that sounds great. As a budget, it is literally double the crazy of the last House Republican budget, written and personified by failed VP candidate Paul Ryan.

Iceland Inches Toward Direct Democracy

Sunday, 27 January 2013 07:10 
By Sam Knight, Truthout | News Analysis 

When the global financial system crumbled over four years ago, Iceland played host to one of the most dramatic economic collapses in modern history. Its three largest banks were unable to refinance debt roughly ten times the size of the country's gross domestic product (GDP), causing one of the world's wealthiest nations to limp with hat in hand to the International Monetary Fund (IMF). The island became a symbol for capitalism's systemic failure.

Now, Iceland is making headlines for more positive reasons: activists there are in the process of advancing some of the strongest freedom of information laws and journalist protections in the world, and the Icelandic economy, while still beset by problems, is significantly outperforming other crisis-stricken countries.

Saturday, January 26, 2013

Senators’ secret plan to give Amgen half a billion in fiscal cliff deal reveals Capitol Hill’s ‘sordid swamp’

By Bill Moyers and Michael Winship
Friday, January 25, 2013 12:55 EST

The inauguration of a president is one of those spectacles of democracy that can make us remember we’re part of something big and enduring. So for a few hours this past Monday the pomp and circumstance inspired us to think that government of, by, and for the people really is just that, despite the predatory threats that stalk it.

But the mood didn’t last. Every now and then, as the cameras panned upward, the Capitol dome towering over the ceremony was a reminder of something the good feeling of the moment couldn’t erase. It’s the journalist’s curse to have a good time spoiled by the reality beyond the pageantry. Just a couple of days before the inaugural festivities, The New York Times published some superb investigative reporting by the team of Eric Lipton and Kevin Sack, and their revelations were hard to forget, even at a time of celebration.

Don’t Buy Lies About Social Security

by Dave Zweifel

Let’s be brutally frank today: The claim by some of those Wall Street money changers and politicians like Wisconsin’s own Paul Ryan and many of his Republican colleagues that Social Security is contributing to the national debt and therefore needs to be “fixed” is nothing more than an outright lie.

Because the late President Franklin D. Roosevelt wanted to make sure that the Social Security Trust Fund was protected from the ever-changing political winds, it was set up as a separate self-financed system that gets its revenues from three sources — roughly 80 percent from the payroll tax of 6.2 percent for both the employee and employer (the 6.2 was reduced to 4.2 for employees to help provide relief during the recession and went back to 6.2 percent on Jan. 1), another 15 percent from interest earned by the trust fund, and the other 5 percent from taxes that Social Security recipients wind up paying at income tax time. In Social Security’s 75-year history, it has collected $15.5 trillion and currently has $2.6 trillion in the bank, enough money to pay full benefits until about 2037.

This is a Big, Big Deal

Josh Marshall,

A week ago I noted a new Republican push to gerrymander the electoral college to make it almost impossible for Democrats to win the presidency in 2016 and 2020, even if they match or exceed Barack Obama’s vote margin in 2012. Is something like that really possible? Yes, very possible.

To review, here’s how it works. The US electoral college system is based on winner take all delegate allocation in all but two states. If you get just one more vote than the other candidate you get all the electoral votes. One way to change the system is go to proportional allocation. That would still give some advantage to the overall winner. But not much. The key to the Republican plan is to do this but only in Democratic leaning swing states — not in any of the states where Republicans win. That means you take away all the advantage Dems win by winning states like Ohio, Pennsylvania, Michigan and so forth.

The Longest War is the One Against Women

A rape a minute, a thousand corpses a year: hate crimes in America (and elsewhere)

by Rebecca Solnit
Here in the United States, where there is a reported rape every 6.2 minutes, and one in five women will be raped in her lifetime, the rape and gruesome murder of a young woman on a bus in New Delhi on December 16th was treated as an exceptional incident. The story of the alleged rape of an unconscious teenager by members of the Steubenville High School football team was still unfolding, and gang rapes aren’t that unusual here either. Take your pick: some of the 20 men who gang-raped an 11-year-old in Cleveland, Texas, were sentenced in November, while the instigator of the gang rape of a 16-year-old in Richmond, California, was sentenced in October, and four men who gang-raped a 15-year-old near New Orleans were sentenced in April, though the six men who gang-raped a 14-year-old in Chicago last fall are still at large.  Not that I actually went out looking for incidents: they’re everywhere in the news, though no one adds them up and indicates that there might actually be a pattern.

There is, however, a pattern of violence against women that’s broad and deep and horrific and incessantly overlooked. Occasionally, a case involving a celebrity or lurid details in a particular case get a lot of attention in the media, but such cases are treated as anomalies, while the abundance of incidental news items about violence against women in this country, in other countries, on every continent including Antarctica, constitute a kind of background wallpaper for the news.

Why Filibuster Reform Died

Paul Krugman: Deficit Hawks Down

President Obama’s second Inaugural Address offered a lot for progressives to like. There was the spirited defense of gay rights; there was the equally spirited defense of the role of government, and, in particular, of the safety net provided by Medicare, Medicaid and Social Security. But arguably the most encouraging thing of all was what he didn’t say: He barely mentioned the budget deficit.

Mr. Obama’s clearly deliberate neglect of Washington’s favorite obsession was just the latest sign that the self-styled deficit hawks — better described as deficit scolds — are losing their hold over political discourse. And that’s a very good thing.

'Foodopoly:' Exposing the Handful of Corporations That Control Our Food System From Seed to Dinner Plate

By Wenonah Hauter

January 24, 2013  |  The following is an excerpt from Foodopoly: The Battle Over the Future of Food and Farming in America [3], published by The New Press and reprinted here with permission. Copyright © 2012 by Wenonah Hauter.

In 1963 my dad bought a ramshackle farm with rich but extremely rocky soil in the rural Bull Run Mountains of Virginia, forty miles southwest of Washington, D.C. Today it is on the verge of suburbia.

He grew up in Oklahoma during the Dust Bowl, rode the rails, and eventually, in his late fifties, found his way “back to the land.” So we moved to what was then a very rural landscape -- a place culturally a world away from the nation's capital and physically linked only indirectly by two-lane roads. Our old farmhouse, with a mile-long rutted driveway accessible only by fourwheel drive, was off another dirt road and had no electricity or plumbing. Eventually my dad did manage to get the local rural electricity co-op to put in poles and hook up power, but he never did get around to installing indoor plumbing.

He was an unusual man -- a religious iconoclast and an organic gardener at a time when few people knew the term. He was considered a crank and a hobby farmer, if you can call it that, growing a few vegetables and keeping bees. His wild-blossom honey was the only vaguely successful part of his farming venture. My dad, who died in 1991 at the age of eighty-one, would be shocked now to see both his farm and the massive development around it.

Wednesday, January 23, 2013

David Brooks Is Shocked When Tribes Let Sick People Die. He Also Wants to Cut Medicare.


In his review of Jared Diamond’s new book, David Brooks is appropriately horrified by the stories of tribal women who were left to die rather than be cared for by their communities. He’s so horrified, in fact, that he seems to reject Diamond’s core thesis that these tribespeople have something to teach us about ourselves.

“It’s hard to know,” Brooks concludes with a nearly audible sigh. “They seem so distant.”

When he was done writing that review Brooks went back to one of his primary preoccupations, which is pushing for Medicare cuts. 

Glenn Greenwald: The Untouchables: How the Obama administration protected Wall Street from prosecutions

A new PBS Frontline report examines a profound failure of justice that should be causing serious social unrest

PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.

What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with immunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.

What do the Beltway moderates actually want?

Centrist thinkers keep begging Barack Obama to pursue "bipartisan" goals he already supports 

By Alex Pareene

As David Brooks taught us last week, Barack Obama’s cunning plan to sabotage and undermine the Republican Party is to repeatedly force them to act as extremist and irresponsible as possible by proposing popular and sensible things that they refuse to support. By advocating gun control and immigration reform, two things Obama supports because he and most liberals believe them to be morally and politically necessary, Obama is tricking Republicans into revealing that they are dysfunctional, leaderless, and increasingly divided into two camps: the all-out crazies and the merely corrupt. This saddens David Brooks, naturally, because most things seem to sadden David Brooks, America’s Foremost Humility Expert.

But as the president begins his second term, I thought it’d be useful to try to figure out what “moderate Republican” columnists and “pox on both houses” centrists actually want the president to be doing. 

Paul Krugman: A New Industrial Revolution: The Rise of the Robots

It's taken me a while to get around to Bob Gordon's stimulating essay suggesting that the great days of economic growth are behind us. It's not that different from things he's been saying before, and I have in the past had a lot of sympathy for that view. I now believe, however, that his technological pessimism is wrong — or if you prefer, it's the wrong kind of pessimism. But this is definitely a discussion worth having.

Mr. Gordon, an economics professor at Northwestern University, argues, rightly in my view, that we've really had three industrial revolutions so far, each based on a different cluster of technologies.

Harmful effects of bisphenol A proved experimentally

Weak concentrations of bisphenol A are sufficient to produce a negative reaction on the human testicle. This has just been shown experimentally for the first time by RenĂ© Habert and his colleagues (UMR Cellules souches et Radiations [UMR Stem Cells and Radiation], Inserm U 967 – CEA – Paris Diderot University) in an article that appeared in the journal entitled  Plos One.

Bisphenol A (BPA) is a chemical compound that is included in the composition of plastics and resins. It is used, for example, in the manufacture of food containers such as bottles and  babies’ feeding bottles. It is also found in the protective films used inside food and drink cans and on till receipts where it used as a discloser. Significant levels of BPA have also been found in human blood, urine, amniotic fluid and placentas. Recent studies have shown that this industrial component has harmful effects on reproductive ability, development and the metabolism of laboratory animals. BPA is strongly suspected of having the same effects on humans.

“Free-Market” Outcomes Are Not Fair—and Not Free

by Marty Wolfson

“Since 1980, the U.S. government has reduced its intervention in the U.S. economy, which has become much more of a free market. Conservatives applaud this development because they think that free-market outcomes reward talent and hard work; progressives object to the income inequality of free-market outcomes and want to use government tax and transfer policy to reduce inequality.”

Most people, whether conservative or progressive, would probably agree with this statement. This framing of the issue, however, plays into a right-wing story in which conservatives are the defenders of (free) market outcomes, including the success of the rich who have made it “on their own”; meanwhile, the “dependent poor” look to the government for handouts. This has been a basic element of the right-wing playbook for a long time. Then-presidential candidate Mitt Romney was drawing on this narrative when he complained about the 47% of the U.S. population “who are dependent upon government ... who believe that government has a responsibility to care for them.” 

What's Worth Learning: How Outdated Curricula are Failing America's Students

Sunday, 20 January 2013 11:25  
By Marion Brady, AlterNet | News Analysis 

It goes without saying that solving a problem begins with a correct diagnosis of its cause.
When Michael Gerson, President George W. Bush’s chief speechwriter, had the president say in a January 2004 speech that American education suffered from “the soft bigotry of low expectations,” the simplistic diagnosis reflected and perpetuated the present “tighten the screws” reform effort.
That misguided effort continues. In the Introduction to What’s Worth Learning? (Information Age Publishing), I offer an alternative explanation for poor school performance.
Marion Brady
American education isn’t up to the challenge.

The evidence is inescapable. Millions of kids walk away from school long before they’re scheduled to graduate. Millions more stay but disengage. Half of those entering the teaching profession soon abandon it. Administrators play musical chairs. Barbed wire surrounds many schools, and police patrol hallways. School bond levies usually fail. Superficial fads—old ideas resurrected with new names—come and go with depressing regularity. Think tanks crank out millions of words of ignored advice, and foundations spend billions to promote seemingly sound ideas that make little or no difference. About a half-trillion dollars a year is invested in education, but most adults remember little and make practical use of even less of what they once learned in thousands of hours of instruction. 

Paul Krugman: Inequality and Recovery

Joe Stiglitz has an Opinionator piece arguing that inequality is a big factor in our slow recovery. Joe is an insanely great economist, so everything he says should be taken seriously. And given my political views and general concerns about inequality, I’d like to agree.

But — you knew there was a “but” coming — I’ve thought about these issues a lot, and haven’t been able to persuade myself that this particular morality tale is right.

It’s worth noting that two of Joe’s four points aren’t really about the current recovery. He argues that high inequality is causing huge waste of human talent, because the poor and increasingly the middle class lack access to good education; and I agree. He also argues that inequality fosters financial crisis, and I agree with that too. 

“Cyberazzi” – Data Mining Companies Investigated for Invasion of Privacy

by Pratap ChatterjeeCorpWatch Blog
January 21st, 2013

The paparazzi hide in bushes and use telephoto lenses to snap pictures of celebrities. The “cyberazzi” parachute into web browsers and sneak up behind mobile phones to spy on ordinary people. Nine such data mining companies must report what personal information they gather for sale by next week.

The U.S. Federal Trade Commission (FTC) has placed a deadline of February 1st for the nine companies - Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future - to answer a series of questions that what data they gather from online activities, how often they gather the data and whether they get permission first and how they resell it ie with any kind of identifying data. 

How to Cut Megabanks Down to Size

Tuesday, 22 January 2013 10:46
By Gretchen Morgenson, The New York Times | Report

It is a prevailing myth in Washington: big bailouts are over for good. Never again, the line goes, could giant financial institutions imperil the nation’s economy.

This is nonsense, of course. Whatever regulators and lawmakers say, the Dodd-Frank financial overhaul lacks any guarantee that taxpayers won’t have to come to the rescue again.

So it was refreshing to hear a member of the Federal Reserve Board debunk the bailouts-are-gone theory last week.

Swell Times for America's Swollen Fortunes

Tuesday, 22 January 2013 09:46 
By Sam Pizzigati, Too Much | Op-Ed 

All those millions that CEOs and hedge fund managers have grabbed over recent decades? Our current tax code won’t let us grab them back.

Can a democracy survive if the richest of the rich within it can pass on to their heirs, generation after generation, the vast bulk of their fortunes?

In the United States, that question first became a top-tier topic of political debate back over a century ago. Fortunes of almost unimaginable size were then towering over the nation’s economic landscape. These huge fortunes, Americans feared, could easily become the building blocks for a new aristocracy, for financial dynasties that could leave America’s democracy a dead letter.

Joseph Stiglitz: Inequality Is Holding Back the Recovery

The re-election of President Obama was like a Rorschach test, subject to many interpretations. In this election, each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest — an inequality not only of outcomes but also of opportunity. To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying.

Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues — as it did in a special feature in October — that the magnitude and nature of the country’s inequality represent a serious threat to America, we should know that something has gone horribly wrong. And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we haven’t done anything about it.

Fitch ratings agency highlights threat of aging population time-bomb

By Agence France-Presse
Monday, January 21, 2013 8:23 EST

Many advanced economies will be threatened by another, long-term fiscal shock unless they tackle the problem of ageing populations, the ratings agency Fitch warned on Monday.

“Whilst a successful resolution of the current fiscal crisis remains the most important driver for many advanced-economy ratings, without further reform to address the impact of long-term ageing these economies face a second, longer-term fiscal shock,” a Fitch statement said.

Paul Krugman: Obama's Big Deal

On the day President Obama signed the Affordable Care Act into law, an exuberant Vice President Biden famously pronounced the reform a “big something deal” — except that he didn’t use the word “something.” And he was right.

In fact, I’d suggest using this phrase to describe the Obama administration as a whole. F.D.R. had his New Deal; well, Mr. Obama has his Big Deal. He hasn’t delivered everything his supporters wanted, and at times the survival of his achievements seemed very much in doubt. But if progressives look at where we are as the second term begins, they’ll find grounds for a lot of (qualified) satisfaction. 

Saturday, January 19, 2013

Photovoltaics beat biofuels at converting sun's energy to miles driven

New study shows solar power is not only better in terms of energy efficiency, land use, and greenhouse gas emissions -- but cost competitive, too

In 2005, President George W. Bush and American corn farmers saw corn ethanol as a promising fossil fuel substitute that would reduce both American dependence on foreign oil and greenhouse gas emissions. Accordingly, the 2005 energy bill mandated that 4 billion gallons of renewable fuel be added to the gasoline supply in 2006. That rose to 4.7 billion gallons in 2007 and 7.5 billion in 2012.

Since then, life cycle assessments (LCAs) have shown that corn ethanol has modest if any effect on reducing CO2 emissions and may actually increase them, while posing a threat to natural habitats and food supplies, as food stocks are turned to fuel and marginal lands are put under the plough to keep up with demand. In 2010, fuel ethanol consumed 40 percent of U.S. corn production, and 2012 prices are at record highs. Since the U.S. also accounts for 40 percent of the world's corn, U.S. ethanol production has affected corn prices around the planet.

The Legacy of Timothy Geithner


“Too big to fail is too big to continue. The megabanks have too much power in Washington and too much weight within the financial system.” Who said this and when?

The answer is Peggy Noonan, the prominent conservative commentator, writing recently in The Wall Street Journal.

As Timothy F. Geithner prepares to leave the Treasury Department, most assessments focus on how his policies affected the economy. But his lasting legacy may be more political, contributing to the creation of an issue that can now be seized either by the right or the left. What should be done about the too-big-to-fail category of financial institutions?

Billmon: Obituary

Died, after long struggle with infectious reality, Hastert Rule:

For the second time this month, Boehner broke the Hastert Rule. The issue was Hurricane Sandy relief, a follow-up vote to a smaller package approved earlier this month. It passed, but the important thing is how it passed: Yeas: 241 (192 Democrats, 49 Republicans)
Nays: 180 (Rep. Jim Cooper + 179 Republicans)
That is to say, with a minority of the majority. The first time was on the fiscal cliff, and now it's happened on hurricane relief.
Mr. Rule, caretaker at the House GOP Asylum for the Criminally Insane, is remembered by all who knew him—Democrats in particular—as an emotionally distant father, abusive husband, and hostile, litigious neighbor. However, he is also widely credited with keeping his asylum under tight control for many years, although some observers attribute much of Mr. Rule's success to his long-time pharmaceutical assistant, Nurse Ratched.

Republicans Brag They Won House Majority Because Of Gerrymandering

By Scott Keyes on Jan 17, 2013 at 9:00 am

In a classic Kinsley gaffe, the Republican State Leadership Committee released a report boasting that the only reason the GOP controls the House of Representatives is because they gerrymandered congressional districts in blue states.

The RSLC’s admission came in a shockingly candid report entitled, “How a Strategy of Targeting State Legislative Races in 2010 Led to a Republican U.S. House Majority in 2013″. It details how the group spent $30 million in the 2010 election cycle to sweep up low-cost state legislature races in blue states like Michigan, Ohio, Pennsylvania, and Wisconsin. Their efforts were so successful, in fact, that Republicans went from controlling both legislative chambers in 14 states before Election Day to 25 states afterward.

Exposed! How the Billionaires Class Is Destroying Democracy

Saturday, 19 January 2013 09:19  
By Thom Hartmann and Sam Sacks, The Daily Take | Op-Ed 

Out of the guts of the internet, we find an endless stream of misattributed quotes and made-up stories that end up in chain emails that you eventually receive from your loopy uncle in Texas who's trying to justify right-wing economics or anti-Obama conspiracy theories.

It's just one of the headaches of the Internet Age.

But, there's one quote in particular that's always attributed to an obscure Scottish historian, Sir Alexander Frasier Tytler (as if that gave it great credibility), and it seemed to both make sense and prophecy the end of the American Republic.

Congress Kills Part of the Affordable Care Act

By karoli

If the ACA is a bundle of experiments in how to lower health care costs and make it more affordable for everyone, then this deal gives Republican a mark in their "kill" column for the ACA and consumers.

On the very last page of the part of the fiscal cliff bill dealing with various Medicare extenders, the doc fix and other health care considerations, there is a provision which de-funds appropriations allowed in the Affordable Care Act for Community Operated and Owned Plans, or "co-ops".

ALEC to Attack North Carolina Renewable Energy Initiatives

Saturday, 19 January 2013 12:27  
By Steve Horn, DeSmogBlog | Report 

Renewable energy is under attack in the Tar Heel State. That's the word from Greenpeace USA's Connor Gibson in a report that implicates King Coal powerhouse, Duke Energy and the fossil fuel industry at-large.

The vehicle Duke Energy is utilizing for this attack is one whose profile has grown in infamy in recent years: the American Legislative Exchange Council (ALEC).

ALEC is described as a "corporate bill mill" by its critics. It's earned such a description because it passes "model bills" written by corporate lobbyists and to boot, the lobbyists typically do so behind closed doors at ALEC's annual meetings.

New West Point Study Highlights Threat Posed by Far Right-Wing Groups In U.S.

By Hayes Brown

January 18, 2013  |  A new study [2] from a think tank connected to the West Point Military Academy highlights the threat of violent far-right movements in the United States, leading to the conclusion that, while diverse in in their causes, they are similar in their use of violence to achieve their aims.

West Point’s Combatting Terrorism Center was founded in the aftermath of the Sept. 11 attacks, and has primarily focused its research on international terrorist threats. Titled “Challengers from the Sidelines: Understanding America’s Violent Far-Right, [3]” this new report instead looks as the risk that domestic groups pose to the U.S. Breaking down these groups into three categories — the Racist/White Supremacy Movement, the Anti-Federalist Movement, and the Christian Fundamentalist Movement — allows the study to examine the background ideologies and methods of each subset thoroughly, opposed to lumping them all together as most studies have.

Each of the groupings in the study represent competing ideological views, with none of them likely to cooperate in achieving their aims. The chances that each of these groups will use violence also varies. What they share, however, is a use of violence against their chosen targets — be it minority races or abortion clinics — to draw attention to and emphasize their given ideology.

6 Economic Steps to a Better Life and Real Prosperity for All

by Gar Alperovitz, Steve Dubb

January 15, 2013  |  Most activists tend to approach progressive change from one of two perspectives: First, there’s the “reform” tradition that assumes corporate control is a constant and that “politics” acts to modify practices within that constraint. Liberalism in the United States is representative of this tradition. Then there’s the “revolutionary” tradition, which assumes change can come about only if the major institutions are largely eliminated or transcended, often by violence.

But what if neither revolution nor reform is viable?

Paradoxically, we believe the current stalemating of progressive reform may open up some unique strategic possibilities to transform institutions of the political economy over time. We call this third option evolutionary reconstruction. Like reform, evolutionary reconstruction involves step-by-step nonviolent change. But like revolution, evolutionary reconstruction changes the basic institutions of ownership of the economy, so that the broad public, rather than a narrow band of individuals (i.e., the “one percent”) owns more and more of the nation’s productive assets.

Dean Baker: Michelle Rhee's Failing Report Card

Monday, 14 January 2013 14:29 

Michelle Rhee gained notoriety as the chancellor of DC's public schools under Adrian Fenty's administration from 2007 to 2011. Her conduct in this position was one of the main reasons he was not re-elected. Among other things, she publicly took pleasure in firing large numbers of teachers and administrators. Incredibly, she also claims not to have realized that high stake testing would provide incentives for teachers or administrators to cheat on the scoring of exams.

Since she left the DC school system she started a new organization, StudentsFirst, which was created to push for the sort of changes to the school system she sought to implement as chancellor. The organization received considerable media attention for a report card it issued on the public school systems in the 50 states earlier this week. While most of the items on the report card were part of an educational agenda of questionable merit (see Diana Ravitch's blog for specific critiques), one item had nothing to do with education whatsoever.

The South's Shocking Hidden History: Thousands of Blacks Forced Into Slavery Until WW2

By Douglas A. Blackmon

January 15, 2013  |  On July 31, 1903, a letter addressed to President Theodore Roosevelt arrived at the White House. It had been mailed from the town of Bainbridge, Georgia, the prosperous seat of a cotton county perched on the Florida state line.

The sender was a barely literate African American woman named Carrie Kinsey. With little punctuation and few capital letters, she penned the bare facts of the abduction of her fourteen-year-old brother, James Robinson, who a year earlier had been sold into involuntary servitude.

Kinsey had already asked for help from the powerful white people in her world. She knew where her brother had been taken—a vast plantation not far away called Kinderlou. There, hundreds of black men and boys were held in chains and forced to labor in the fields or in one of several factories owned by the McRee family, one of the wealthiest and most powerful in Georgia. No white official in this corner of the state would take an interest in the abduction and enslavement of a black teenager.

Dean Baker: The 3 Percent Cut to Social Security, a.k.a. the Chained CPI

According to inside-Washington gossip, Congress and the president are going to do exactly what voters elected them to do: they are going to cut Social Security by 3 percent. You don't remember anyone running on that platform? Yeah, well, they probably forgot to mention it.

Of course, some people may have heard Vice President Joe Biden when he told an audience in Virginia that there would be no cuts to Social Security if President Obama got re-elected. Biden said: "I guarantee you, flat guarantee you, there will be no changes in Social Security. I flat guarantee you."

US employee 'outsourced job to China'

A security check on a US company has reportedly revealed one of its staff was outsourcing his work to China. 

The software developer, in his 40s, is thought to have spent his workdays surfing the web, watching cat videos on YouTube and browsing Reddit and eBay.

He reportedly paid just a fifth of his six-figure salary to a company based in Shenyang to do his job.

America’s Bloody Price for Power

January 11, 2013
Exclusive: “The Untold History of the United States” shakes up the traditional recounting of the last century, forcing Americans to rethink key assumptions, but director Oliver Stone and historian Peter Kuznick have not written a people’s history, says Jim DiEugenio in part two of his review.

By Jim DiEugenio

It’s challenging to review a book like The Untold History of the United States by Oliver Stone and Peter Kuznick, with its broad sweep covering more than a century – from the late 19th to the early 21st centuries – especially given the authors’ ambition to reorder how Americans see their nation as it evolved into a global empire and force them to confront how that empire has trampled on the lives and dreams of other people.

Without doubt, there is much value in their effort, which you can also watch in a Showtime documentary series by the same name. It is always good when a serious work comes out that shakes the pillars of the historical establishment by challenging cherished conventional wisdoms. Director Stone and historian Kuznick surely do that.

Paul Krugman: Japan Steps Out

For three years economic policy throughout the advanced world has been paralyzed, despite high unemployment, by a dismal orthodoxy. Every suggestion of action to create jobs has been shot down with warnings of dire consequences. If we spend more, the Very Serious People say, the bond markets will punish us. If we print more money, inflation will soar. Nothing should be done because nothing can be done, except ever harsher austerity, which will someday, somehow, be rewarded.

But now it seems that one major nation is breaking ranks — and that nation is, of all places, Japan.

The four business gangs that run the US

Ross Gittins

IF YOU'VE ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you - at least in respect of the United States.

In his book, The Price of Civilisation, he says the US economy is caught in a feedback loop. ''Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth,'' he says.

What Watchdog? How the Financial Press Has Failed the American Public

By Laura Gottesdiener

January 9, 2013  |  From revelations about this week’s hasty, multibillion-dollar bank settlement [3]s to AIG’s brief threat to sue the federal government for its own $128-billion bailout (which the company contends wasn’t as generous as other bailouts), 2013 is already shaping up to be another year of government-backed wins for Wall Street.

As the New York Times’Gretchen Morgenson wrote, “If you were hoping that things might be different in 2013 — you know, that bankers would be held responsible for bad behavior or that the government might actually assist troubled homeowners — you can forget it. A settlement reportedly in the works with big banks will soon end a review into foreclosure [4] abuses, and it means more of the same: no accountability for financial institutions and little help for borrowers.”

This type of clear condemnation of Wall Street and its lack of accountability remains a rare voice in mainstream media, with few willing to join Morgenson and Rolling Stone’s Matt Taibbi on their crusades against banking abuses.

"Failure of Epic Proportions": Treasury Nominee Jack Lew’s Pro-Bank, Austerity, Deregulation Legacy

Former bank regulator William Black and Rolling Stone’s Matt Taibbi join us to dissect the career of Jack Lew, President Obama’s pick to replace Treasury Secretary Timothy Geither. Currently Obama’s chief of staff, Lew was an executive at Citigroup from 2006 to 2008 at the time of the financial crisis. He backed financial deregulation efforts while he headed the Office of Management and Budget under President Bill Clinton. During that time, Clinton enacted two key laws to deregulate Wall Street: the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000. Black, a white-collar criminologist and former senior financial regulator, is the author of "The Best Way to Rob a Bank Is to Own One." A contributing editor for Rolling Stone magazine, Taibbi is the author of "Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History." [includes rush transcript]

Surely We Have Learned Some Lessons Since 2001?

Fred Hiatt is disturbed by President Obama's apparent desire to disengage in Afghanistan and, more generally, to intervene less often in foreign countries. This inclination toward disengagement has taken hold of American public opinion before, he says:
Traditionally two philosophies have fueled it. One sees the United States as a moral exemplar but believes we aren’t obliged to solve the world’s problems.

The other is skeptical about America’s moral standing to impose its will, believing that more often than not it has used its power to exploit other people on behalf of U.S. corporations or other selfish interests.

Dean Baker: Wall Street thanks you for your service, Tim Geithner

First the treasury secretary propped up the big banks with public spending. Then he backed their agenda: cuts to public spending

Dean Baker, Friday 11 January 2013 15.08 EST

Treasury Secretary Timothy Geithner's departure from the Obama administration invites comparisons with Klemens von Metternich. Metternich was the foreign minister of the Austrian empire who engineered the restoration of the old order and the suppression of democracy across Europe after the defeat of Napoleon.

This was an impressive diplomatic feat – given the widespread popular contempt for Europe's monarchical regimes. In the same vein, protecting Wall Street from the financial and economic havoc they brought upon themselves and the country was an enormous accomplishment.

During his tenure as head of the New York Fed and then as treasury secretary, most, if not all, of the major Wall Street banks would have collapsed if the government had not intervened to save them. This process began with the collapse of Bear Stearns, which was bought up by JP Morgan in a deal involving huge subsidies from the Fed.

JP Morgan Gets a Big Holiday Gift From the SEC

Lina Khan
December 31, 2012 | 12:00 am

n 1996, the world learned a Japanese firm had cornered the copper market. The company, Sumitomo, was fined $125 million for squeezing copper supplies and artificially inflating prices--at that point the largest penalty ever levied by a U.S. government agency. The Commodities Futures Trading Commission called the scheme “one of the most serious worldwide manipulations” of a commodity in decades. Last Monday, the Securities and Exchange Commission posted a decision that could effectively lead to a repeat of the Sumitomo corner, with one key difference: hoarding copper will now be legal.

Until now, the main people buying physical copper have been the people who use it, like manufacturers that produce basic industrial goods such as pipes and electrical wires. Speculators have been limited to trading in futures, which are forms of bets that link only indirectly with physical supply of copper. Two weeks ago, however, the SEC blessed a controversial fund designed by J.P. Morgan Chase that, for the first time, will let investors buy shares backed by physical, warehoused copper, to use as a form of investment.  

Bill Black: Krugman and Obama’s Dangerous Austerity Myths

Yves here. I have to confess, it is frustrating to see Krugman say many of the right things but not be willing to go too far afield of orthodox thinking.

By Bill Black

Austerity in response to the Great Recession has proven to be an economic weapon of mass destruction. On January 10, 2013, Paul Krugman (Nobel Laureate in Economics) and President Obama launched the same dangerous austerity myth in remarkably similar language.

January 10, 2013
Coins Against Crazies

Lately, revenue has fallen far short of spending, mainly because of the depressed state of the economy. If you don’t like this, there’s a simple remedy: demand that Congress raise taxes or cut back on spending. And if you’re frustrated by Congress’s failure to act, well, democracy means that you can’t always get what you want.
Remarks by the President in Nomination of Secretary of the Treasury
And thanks in large part to [Treasury Secretary Geithner’s] steady hand, our economy has been growing again for the past three years, our businesses have created nearly 6 million new jobs.
And we’ve begun to reduce our deficit through a balanced mix of spending cuts and reforms to a tax code….
I know that many, perhaps most Americans, would read these quotations and think: “of course, they’re repeating obvious truisms.” Both quotations are, however, dangerous myths.

Saturday, January 12, 2013

Russ Feingold: Democrats Sold Out in 2012 and Need to Quit Big Money

Paul Krugman Talks to Bill Moyers About How to Speed Recovery -- And Why He Doesn't Want to Run the Treasury

By Bill Moyers

January 11, 2013  |  Nobel Prize-winning economist and New York Times columnist Paul Krugman argues that saving money is not the path to economic recovery. Instead, he tells Bill Moyers, we should put aside our excessive focus on the deficit, try to overcome political recalcitrance, and spend money to put America back to work. Krugman offers specific solutions to not only end what he calls a “vast, unnecessary catastrophe,” but to do it more quickly than some imagine possible. His latest book, End This Depression Now!, is both a warning of the fiscal perils ahead and a prescription to safely avoid them.

A transcript of Krugman's interview with Bill Moyers on the PBS show, Moyers & Company, appears below the video.


BILL MOYERS: Welcome. Just before the holidays, we asked you, our viewers, to recommend the one book you thought President Obama should read as he prepares himself for his second term in office. As ever, your suggestions were thoughtful, provocative and eclectic – from books by authors who have appeared as guests on this broadcast, to works by the late John Steinbeck and A. A. Milne, the creator of Winnie-the-Pooh. You can see a list at our Web site, [4].

Many of you asked for my choice, too. This is it – Paul Krugman’s End This Depression Now! It’s both prescription and warning: our current obsession with slashing the deficit and avoiding that well-known and worn fiscal cliff is killing us, Krugman writes, getting in the way of what really needs to be done – which is dedicating government to creating jobs and getting us back to full employment. He blames not only Congress but the White House.

Paul Krugman: Coins Against Crazies

So, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren’t ready to mint that coin or take some equivalent action, the joke will be on us — and a very sick joke it will be, too.

Let’s talk for a minute about the vile absurdity of the debt-ceiling confrontation. 

Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

The Latest Myth About the Government’s Mishandling of the Housing Market

by Jesse Eisinger
ProPublica, Jan. 9, 2013, 12 p.m.

No matter how many times people debunk the notion that government policy created the housing bubble, it doesn't die. It's part of what the blogger Barry Ritholtz has called the "big lie" of the financial crisis. Now, we are having another argument about whether the government is creating a new housing disaster for taxpayers.

The target this time: the Federal Housing Administration, the government's mortgage insurer mostly for low-to-moderate income and minority borrowers.

Dean Baker: Paul Krugman for Treasury Secretary

Posted: 01/08/2013 7:07 pm

That headline has all the D.C. insider types rolling their eyes right now, since they know it is absurd to imagine that President Obama would pick Krugman to be Timothy Geithner's replacement as Treasury Secretary. They aren't wrong, it is absurd. There is no way on earth that Obama would select Krugman. This fact tells us a great deal about what is wrong with the shape of the economic policy being debated in the nation's capital.

First of all, let's get the obvious out of the way. No one can question Krugman's qualifications for the administration's top economic policy position. He is a winner of both the John Bates Clark award, which is given out every second year to the best economist under age 40, and the Nobel Prize. He has published hundreds of articles in academic journals, many of them leading to path-breaking innovations in economic theory. Arguing that he lacks the background is just silly.

Karl Rove accidentally unmasks the GOP’s debt ceiling ruse

Posted by Greg Sargent on January 10, 2013 at 11:47 am

I know you’re tired of hearing that the Republicans’ position on the debt ceiling is incoherent and that their claims of leverage are greatly exaggerated. But now we have none other than Karl Rove confirming all of this for us.

Rove’s latest column rips into Obama for supposedly mischaracterizing the GOP position on the debt limit. He quotes Obama saying: “We can’t not pay bills that we’ve already incurred.”

A Checkerboard Strategy for Regaining the Progressive Initiative

Gar Alperovitz
Posted: 01/07/2013 8:06 pm

President Obama is Time magazine's "Person of the Year" -- the first Democratic president to receive two consecutive popular-vote majorities since Franklin Delano Roosevelt. Yet these are clearly tough times for progressives. Everything progressives have fought for is seemingly on the chopping block nationally, and in many states and cities. Programs are being cut; public assets are being sold off; school teachers are losing their jobs; unions are being attacked; pension and health care benefits are being slashed -- even Social Security is being challenged.

Progressives, in short, remain on the defensive.

Two New Fraud Deals Show Wall Street’s Washington Insiders At Work


It must’ve been like old home week when the old gang of Wall Street and Washington insiders finalized a couple more cushy settlements last week.

Everybody knew the drill: Ignore the potential criminal charges and agree on settlement figures they think the public will swallow – figures that are big enough to sound impressive but far smaller than the banks’ ill-gotten gains.  They’ve done this dozens of times before.

But there was an empty chair at the negotiating table.

Rick Perlstein: Why I Am A Liberal

January 7, 2013 - 10:11 AM ET

This past October, I participated in a debate at North Carolina State University sponsored by the Libertarian group Young Americans for Liberty. The YAL debates join a libertarian, conservative and a liberal. I held down the liberal pole. Why two positions to right of center and only one to the left? Good question, given that I find the potential breach within the the Democratic coalition—between, you might say, Keynesians and austerians, Krugmanites and Obamaites—more profound and potentially more portentous than that between conservatives and libertarians within the Republican coalition, but that’s an issue for another post. For this one, though, my inaugural post, the first of my thrice-weekly missives I’ll be blasting your way here at, you get a manifesto: my opening statement at that debate.

Richard Kim, the editor of this site, asked me for a few lines about what I’m going to be writing about here. I wrote back, “I’ll be interpreting contemporary political developments in light of their historical context. I’m especially interested in educating folks on the left about the organic continuities in right-wing thought and action—since the 1960s, since the 1920s, even going back to the eighteenth century. Too often we act as if the forces we’re fighting came about only the day before yesterday.” But first, before I get into all that, here are some “priors,” as the philosophers put it, some thoughts about where I’m coming from and why, the very best brief statement I could muster, for an audience of mostly conservative Southern college students about why I am a card-carrying liberal, and why they should be to.

Matt Taibbi: Secrets and Lies of the Bailout: One Broker's Story

I have a feature in the new issue of Rolling Stone called "Secrets and Lies of the Bailout," which focuses in large part on the seemingly intentional policy of deception in the government's rescue of the financial sector. The government didn't just bail out Wall Street with money: It also lied on Wall Street's behalf, calling unhealthy banks healthy, and helping banks cover up just how much aid they were getting in secret.

Proponents of the bailouts will say that whatever the government did, it worked. The economy didn't collapse as it appeared it might in late 2008, and the stock markets are puffed up all over again, as financial companies in particular are back making huge profits.

But in the course of researching the magazine piece, we discovered definite victims of the myriad deceptions that became a baked-in feature of the bailouts. One of those victims was a southern investment broker who lost lots of his own money, lost money for family members who'd invested with him, and (maybe worst of all) lost plenty of his clients' money, when he made investment decisions based on what turned out to be incomplete information.

ANOTHER Report On Jobs Lost To China “Trade”


New York Times Article Tells Big Lies on Impact of Fiscal Cliff Deal on Rich v. Ordinary Americans

If the media was licensed, the New York Times story, “After Fiscal Cliff Deal, Tax Code May Be the Most Progressive Since 1979,” would be grounds for disbarment. I flagged the piece as a Big Lie in comments yesterday, and figured that since anyone who was either old enough to have been paying taxes in the 1980s or had minimal Google skills could ascertain its claims were nonsense, that it would be debunked elsewhere. Instead, it was apparently tweeted actively by soi-disant liberals on Saturday.

This piece is one of a series of changes over the last month of so of a ratcheting up in the propaganda war against what is left of middle class America. It appears that the effort to sell citizens the necessity of cutting Social Security and Medicare has led our fearless leaders to take us across an event horizon into a late Soviet “all propaganda all the time” footing.

Debt! How Human Beings Become Enslaved to Powerful Interests

By Jeffery Atik

January 3, 2013  |  Debt is ubiquitous. It is also insidious, since debt imposes a power relationship (amplified by the state) between borrower and creditor. We are diminished by debt. The ongoing financial crisis has revealed the degree to which most Americans (myself included, alas) are seriously indebted — and being so, we are more controlled than controlling.

David Graeber — of Occupy Wall Street fame — has written, in Debt: The First 5,000 Years, a grand intellectual project and a call for action. He investigates debt across time and across cultures and finds it to be a primary institution, preceding exchange, money and any notion of “the economy.” Debt is a building block for ever more elaborate social organization, because it creates fluid structures of subordination. Though in principle the sum of all debts should equal the sum of all credits, in practice debtors are many and creditors few. Today, there is growing concern about income inequality in America — but it is wealth inequality that captures the relation of debtors and creditors.

Debt is central to most Americans' life experience. We obtain housing, education, transport and medical services through our access to credit — and as such we spend most of our lives deeply indebted. How dispiriting debt is; it gnaws at us, this non-dischargeable burden.

Secret Goldman Team Sidesteps Volcker After Blankfein Vow

By Max Abelson - Jan 8, 2013
Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein said Goldman Sachs Group Inc. (GS) had stopped using its own money to make bets on the bank’s behalf.

“We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said.

That may come as a surprise to people working in a secretive Goldman Sachs group called Multi-Strategy Investing, or MSI. It wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said.

Paul Krugman: As Another Confrontation Looms, Will Obama Stand His Ground?

Tuesday, 08 January 2013 09:56 

To make sense of what happened with last week’s deal in the United States, we need to ask what is really at stake, and how much difference it makes in the larger picture.
So, what are the two sides really fighting about? Surely the answer is the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also to implement and improve Obamacare so that the United States becomes a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.

GOP Threat: Cut Social Security and Medicare or we’ll kill the economy. Americans say NO to both.


Paul Krugman: The Big Fail

It’s that time again: the annual meeting of the American Economic Association and affiliates, a sort of medieval fair that serves as a marketplace for bodies (newly minted Ph.D.’s in search of jobs), books and ideas. And this year, as in past meetings, there is one theme dominating discussion: the ongoing economic crisis. 

This isn’t how things were supposed to be. If you had polled the economists attending this meeting three years ago, most of them would surely have predicted that by now we’d be talking about how the great slump ended, not why it still continues. 

So what went wrong? The answer, mainly, is the triumph of bad ideas.

Robert Reich: The Hoax of Entitlement Reform

Sunday, January 6, 2013

It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”

But the accepted wisdom is wrong.

The Deadly Secret About the Fiscal Cliff Charade

By Richard (RJ) Eskow

January 4, 2013  |  Imagine a nation with a terrible problem – one its leaders refuse to discuss. The problem will needlessly drain trillions of dollars from its economy in the next ten years.

Now imagine that this problem also robs that nation’s citizens of life itself, draining years from their lifespans while depriving them of large sums of money. Imagine that it sickens and disables countless others, drives many people into bankrupcty, and kills more than two newborn infants out of every thousand born.

Imagine that fixing this problem would make result in a dramatic decline in publicly-held debt. It wouldn’t just “help” the debt problem, mind you – it would cause that debt to plunge [3].

And now imagine a national “deficit debate” which completely ignores this problem.

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part IV– Why Financial and Tax Reform Should Go Together

Taxes pay for the cost of government by withdrawing income from the parties being taxed. From Adam Smith through John Stuart Mill to the Progressive Era, general agreement emerged that the most appropriate taxes should not fall on labor, capital or on sales of basic consumer needs. Such taxes raise the break-even cost of employing labor. In today’s world, FICA wage withholding for Social Security raises the price that employers must pay their work force to maintain living standards and buy the products they produce.

However, these economists singled out one kind of tax that does not increase prices: taxes on the land’s rental value, natural resource rents and monopoly rents. These payments for rent-extraction rights are not a return to “factors of production,” but are privatized levy reflecting privileges that have no ongoing cost of production. They are rentier rake-offs.

In the Coal Fields, a Novel Way to Get Rid of Pensions Is Born

Friday, 04 January 2013 10:03  
By Mike Elk, In These Times | News Analysis 

Morgantown, West Virginia - If you are an individual struggling with debt, your options are limited. But if you are a coal company, you may be able to take advantage of a creative new strategy to shed your obligations.

Over the past decade, Peabody Energy and Arch Coal, the nation's largest coal companies, offloaded large amounts of retiree healthcare obligations to new companies that now face bankruptcy. The United Mine Workers of America (UMWA) says that the spin-offs were designed to fail in order to clean the companies' books of their retiree debts.

Glenn Greenwald: The 'war on terror' - by design - can never end

As the Pentagon's former top lawyer urges that the war be viewed as finite, the US moves in the opposite direction

Last month, outgoing pentagon general counsel Jeh Johnson gave a speech at the Oxford Union and said that the War on Terror must, at some point, come to an end:
"Now that efforts by the US military against al-Qaida are in their 12th year, we must also ask ourselves: How will this conflict end? . . . . 'War' must be regarded as a finite, extraordinary and unnatural state of affairs. We must not accept the current conflict, and all that it entails, as the 'new normal.' Peace must be regarded as the norm toward which the human race continually strives. . . .
"There will come a tipping point at which so many of the leaders and operatives of al-Qaida and its affiliates have been killed or captured, and the group is no longer able to attempt or launch a strategic attack against the United States, that al-Qaida will be effectively destroyed."

6 Biggest Religious Right Threats to America

By Simon Brown

January 3, 2013  |  Multiple courts have said “no” to states that want public schools to teach “intelligent design” creationism in science classes, but that doesn’t faze Montana State Rep. Clayton Fiscus (R-Billings).

Fiscus, a Tea Party favorite whose professional background is in real estate, asked the legislative services staff of the Montana House of Representatives in November to come up with a bill for the 2013 legislative session that would “require public schools to teach intelligent design along with evolution.”

Lawmakers like Fiscus often push their agenda in defiance of established constitutional law, and sometimes hope they can create a case to convince the U.S. Supreme Court to overturn previous decisions that contradict their personal beliefs. Americans Uni­ted combated a wide array of state-level leg­islative schemes in 2012 that sought to tear down the critical safeguards that keep church and state separate.

Tuesday, January 8, 2013

Rescued by a Bailout, A.I.G. May Sue Its Savior


Fresh from paying back a $182 billion bailout, the American International Group has been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

Frank Rich: The Fiscal Cliff Was a Molehill

Every week, New York Magazine writer-at-large Frank Rich talks with assistant editor Eric Benson about the biggest stories in politics and culture. This week: the end of the "Fiscal Cliff" crisis, Howard Schulz's bipartisanship fetish, and John Roberts's latest political play.

In the first hours of the new year, the Senate overwhelmingly approved a not-so-grand bargain to arrest our fall off the "fiscal cliff." The White House is hailing the deal as a big win. Many liberals, from the Iowa Senator Tom Harkin to our own Jonathan Chait, see it as Obama yet again snatching defeat (or at least partial defeat) from the jaws of victory. What's your take?

It is discouraging that Obama would retreat on what he had previously vowed to be a nonnegotiable line in the sand — refusing to extend the Bush-era tax cuts for income over $250,000 a year. (That line moved to $400,000 for individuals, $450,000 for couples.) He ran on this inviolate stand and won. It makes you wonder if he will hold to his other ostensibly firm position — refusing to let the nation’s debt ceiling be held hostage in the coming battle over budget cuts, due in March. That said, Obama did stave off cuts to Social Security and Medicare and extended unemployment insurance for a year. But in truth, for all the news-media hysteria over the “fiscal cliff,” the cliff may prove a molehill in the view of history anyway. It’s just another skirmish in an ideological war that promises far bloodier battles ahead.

5 Most Terrifying Things About the Likely New CIA Head John Brennan

By Alex Kane 

January 7, 2013  |  Lost amidst the manufactured controversy over President Barack Obama’s pick of Chuck Hagel [3] as Secretary of Defense is the equally consequential pick for new director of the Central Intelligence Agency (CIA). Yesterday, President Obama tapped a man for the top CIA post who has supported the hallmarks of the permanent war on terror: wiretapping, drone strikes and torture. Pending confirmation, John Brennan, currently a top counterterrorism adviser to Obama, will be the new head of the powerful CIA. Brennan will take over from David Petraeus, who was felled by an extramarital affair.

President Obama praised Brennan in a press conference January 7, where the announcement of Brennan as CIA head was made. “For the last four years, as my Advisor for Counterterrorism and Homeland Security, John developed and has overseen our comprehensive counterterrorism strategy — a collaborative effort across the government, including intelligence and defense and homeland security, and law enforcement agencies,” said Obama [4]. “And so think about the results.  More al Qaeda leaders and commanders have been removed from the battlefield than at any time since 9/11.”

Obama’s praise for Brennan ignores the man’s dubious record. So instead, we’ll give Brennan’s history a closer look--and point out five disturbing facts you should know about Brennan’s past.

The Real Reason Republicans Hate Hagel

It has more to do with President Obama than the former senator from Nebraska.
It’s good news that President Obama will nominate Chuck Hagel as his secretary of defense, despite the frantic campaign against him that’s been mounted by certain Republicans.

I don’t think that he chose Hagel because of the opposition. It’s generally not Obama’s style to pick a fight for its own sake (cf. Rice, Susan). He’s an issues man, and he faces many fights on other pressing matters. If he thought that someone less controversial could do the job at the Pentagon, he’d have gone with that person in a flash (cf. Kerry, John).

Dean Baker: The Blame the Community Reinvestment Act Industry

One of the major occupations for economists these days is blaming efforts to help poor people for the housing bubble and bust. The main villains in this story are Fannie Mae, Freddie Mac, the Federal Housing Authority (FHA) and the Community Reinvestment Act (CRA). A reader recently sent me another work in this proud tradition.

I just did a quick reading of the paper, but it seems that the smoking gun in this one is that banks subject to the CRA appeared to do more lending in CRA tracts in the periods where their lending behavior was being scrutinized by regulators. Just to remind folks, the CRA requires banks to make loans in the areas from which they were taking deposits, in particular focusing on areas that are disproportionately African American or Hispanic. The authors take this timing result, which is especially pronounced in the peak bubble years of 2004-2006, as evidence that the CRA played a major role in the pushing of bad loans on moderate income people. As they note, the loans issued in these tracts in these periods had a much higher default rate than other loans.

Matt Taibbi: Secrets and Lies of the Bailout

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come 
It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?


It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Fix the Debt Empties Its Trojan Horse

January 2, 2013 ·
The corporate-driven campaign didn't get everything it wanted with the fiscal deal, but it's likely to continue to be a major force as budget talks continue.
Over the last three months, the Fix the Debt campaign, led by more than 100 big company CEOs, has unleashed a firestorm of ads, blanketing political news web sites and entirely plastering the Capitol South Metro station used by most Congressional staffers.

In late October, the Institute for Policy Studies began exposing the Fix the Debt campaign's Trojan Horse. While they presented themselves as a patriotic bipartisan group, merely seeking a “balanced” deal, their own lobby materials revealed they were out to use the fiscal cliff as an opportunity to win massive new corporate tax breaks paid for with cuts to earned benefit programs like Social Security and Medicare.

The Case Against Billionaires

Thursday, 03 January 2013 15:57  
By Thom Hartmann and Sam Sacks, The Daily Take | Op-Ed 

It’s time we as a nation have a serious discussion about outlawing billionaires.

This week we learned that 2012 was one heck of a year for the billionaires. The 100 richest people in the world got $241 billion wealthier this year bringing their total net worth to $1.9 trillion. These 100 people have more combined wealth than the entire GDP of nations like Italy, Mexico, Spain, Canada, Australia, and about 170 other nations. 

Billionaires exclusive to the United States also had a field day. As the annual Forbes 400 list of 2012 showed, America’s richest billionaires saw their wealth increase by $200 billion last year bringing their total net worth to $1.7 trillion.

Sen. John Cornyn's Outrageous Op-Ed on the Debt Ceiling

It's no surprise that congressional Republicans want to use the looming expiration of federal borrowing authority to force spending cuts, but it's worth savoring this moment's op-ed from Sen. John Cornyn of Texas and at least pretending to be surprised by a blatant effort to pull the wool over people's eyes. After an Orwellian accusation that President Obama prefers to govern via brinksmanship, Cornyn reaches the conclusion that "it may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain."

What he's missing here is that the path he's advocating is much worse than anything that's happened in Italy or Spain. He proposing that the federal government simply default on payment it's obligated to make.