Tuesday, November 15, 2011

Howard Zinn on Civil Disobedience

Howard Zinn, Professor of Ameican History, wrote the Zinn Reader in 1970 about his motivations for being a strong anti-war and pro-labor protester. Below is a chapter from the Zinn Reader that I believe is as apropos today as it was then. We have a systematic repression of our constitional rights, particularly free speech and assembly, by "the law." Zinn writes in supprt of civil disobedience as a form of speech speech. I urgre anyone who is intersted in how and why civil disobedience matters to read this chapter.

I post it here, without permission, becuase I believe Dr. Zinn would have wanted it that way.



The Problem is Civil Obedience

The Zinn Reader (1970)

Howard Zinn


I start from the supposition that the world is topsy-turvy, that things are all wrong, that the wrong people are in jail and the wrong people are out of jail, that the wrong people are in power and the wrong people are out of power, that the wealth is distributed in this country and the world in such a way as not simply to require small reform but to require a drastic reallocation of wealth. I start from the supposition that we don't have to say too much about this because all we have to do is think about the state of the world today and realize that things are all upside down. Daniel Berrigan is in jail-A Catholic priest, a poet who opposes the war-and J. Edgar Hoover is free, you see. David Dellinger, who has opposed war ever since he was this high and who has used all of his energy and passion against it, is in danger of going to jail. The men who are responsible for the My Lai massacre are not on trial; they are in Washington serving various functions, primary and subordinate, that have to do with the unleashing of massacres, which surprise them when they occur. At Kent State University four students were killed by the National Guard and students were indicted. In every city in this country, when demonstrations take place, the protesters, whether they have demonstrated or not, whatever they have done, are assaulted and clubbed by police, and then they are arrested for assaulting a police officer.

Now, I have been studying very closely what happens every day in the courts in Boston, Massachusetts. You would be astounded-maybe you wouldn't, maybe you have been around, maybe you have lived, maybe you have thought, maybe you have been hit-at how the daily rounds of injustice make their way through this marvelous thing that we call due process. Well, that is my premise.

All you have to do is read the Soledad letters of George Jackson, who was sentenced to one year to life, of which he spent ten years, for a seventy-dollar robbery of a filling station. And then there is the U.S. Senator who is alleged to keep 185,000 dollars a year, or something like that, on the oil depletion allowance. One is theft; the other is legislation. something is wrong, something is terribly wrong when we ship 10,000 bombs full of nerve gas across the country, and drop them in somebody else's swimming pool so as not to trouble our own. So you lose your perspective after a while. If you don't think, if you just listen to TV and read scholarly things, you actually begin to think that things are not so bad, or that just little things are wrong. But you have to get a little detached, and then come back and look at the world, and you are horrified. So we have to start from that supposition-that things are really topsy-turvy.

And our topic is topsy-turvy: civil disobedience. As soon as you say the topic is civil disobedience, you are saying our problem is civil disobedience. That is not our problem.... Our problem is civil obedience. Our problem is the numbers of people all over the world who have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience. And our problem is that scene in All Quiet on the Western Front where the schoolboys march off dutifully in a line to war. Our problem is that people are obedient all over the world, in the face of poverty and starvation and stupidity, and war and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That's our problem. We recognize this for Nazi Germany. We know that the problem there was obedience, that the people obeyed Hitler. People obeyed; that was wrong. They should have challenged, and they should have resisted; and if we were only there, we would have showed them. Even in Stalin's Russia we can understand that; people are obedient, all these herdlike people.

But America is different. That is what we've all been brought up on. From the time we are this high and I still hear it resounding in Mr. Frankel's statement-you tick off, one, two, three, four, five lovely things .~ about America that we don't want disturbed very much. But if we have learned anything in the past ten years, it is that these lovely things about America were never lovely. We have been expansionist and aggressive and mean to other people from the beginning. And we've been aggressive and mean to people in this country, and we've allocated the wealth of this country in a very unjust way. We've never had justice in the courts for the poor people, for black people, for radicals. Now how can we boast that America is a very special place? It is not that special. It really isn't.

Well, that is our topic, that is our problem: civil obedience. Law is very important. We are talking about obedience to law-law, this marvelous invention of modern times, which we attribute to Western civilization, and which we talk about proudly. The rule of law, oh, how wonderful, all these courses in Western civilization all over the land. Remember those bad old days when people were exploited by feudalism? Everything was terrible in the Middle Ages-but now we have Western civilization, the rule of law. The rule of law has regularized and maximized the injustice that existed before the rule of law, that is what the rule of law has done. Let us start looking at the rule of law realistically, not with that metaphysical complacency with which we always examined it before.

When in all the nations of the world the rule of law is the darling of the leaders and the plague of the people, we ought to begin to recognize this. We have to transcend these national boundaries in our thinking. Nixon and Brezhnev have much more in common with one another than - we have with Nixon. J. Edgar Hoover has far more in common with the head of the Soviet secret police than he has with us. It's the international dedication to law and order that binds the leaders of all countries in a comradely bond. That's why we are always surprised when they get together -- they smile, they shake hands, they smoke cigars, they really like one another no matter what they say. It's like the Republican and Democratic parties, who claim that it's going to make a terrible difference if one or the other wins, yet they are all the same. Basically, it is us against them.

Yossarian was right, remember, in Catch-22? He had been accused of giving aid and comfort to the enemy, which nobody should ever be accused of, and Yossarian said to his friend Clevinger: "The enemy is whoever is going to get you killed, whichever side they are on." But that didn't sink in, so he said to Clevinger: "Now you remember that, or one of these days you'll be dead." And remember? Clevinger, after a while, was dead. And we must remember that our enemies are not divided along national lines, that enemies are not just people who speak different languages and occupy different territories. Enemies are people who want to get us killed.


We are asked, "What if everyone disobeyed the law?" But a better question is, "What if everyone obeyed the law?" And the answer to that question is much easier to come by, because we have a lot of empirical evidence about what happens if everyone obeys the law, or if even most people obey the law. What happens is what has happened, what is happening. Why do people revere the law? And we all do; even I have to fight it, for it was put into my bones at an early age when I was a Cub Scout. One reason we revere the law is its ambivalence. In the modern world we deal with phrases and words that have multiple meanings, like "national security." Oh, yes, we must do this for national security! Well, what does that mean? Whose national security? Where? When? Why? We don't bother to answer those questions, or even to ask them.

The law conceals many things. The law is the Bill of Rights. ;'~ fact, that is what we think of when we develop our reverence for the law. The law is something that protects us; the law is our right-the law is the Constitution. Bill of Rights Day, essay contests sponsored by the American Legion on our Bill of Rights, that is the law. And that is good.

But there is another part of the law that doesn't get ballyhooed- the legislation that has gone through month after month, year after year, from the beginning of the Republic, which allocates the resources of the country in such a way as to leave some people very rich and other people very poor, and still others scrambling like mad for what little is left. That is the law. If you go to law school you will see this. You can quantify it by counting the big, heavy law books that people carry around with them and see how many law books you count that say "Constitutional Rights" on them and how many that say "Property," "Contracts," "Torts," "Corporation Law." That is what the law is mostly about. The law is the oil depletion allowance-although we don't have Oil Depletion Allowance Day, we don't have essays written on behalf of the oil depletion allowance. So there are parts of the law that are publicized and played up to us-oh, this is the law, the Bill of Rights. And there are other parts of the law that just do their quiet work, and nobody says anything about them.

It started way back. When the Bill of Rights was first passed, remember, in the first administration of Washington? Great thing. Bill of Rights passed! Big ballyhoo. At the same time Hamilton's economic pro gram was passed. Nice, quiet, money to the rich-I'm simplifying it a little, but not too much. Hamilton's economic program started it off. You can draw a straight line from Hamilton's economic program to the oil depletion allowance to the tax write-offs for corporations. All the way through-that is the history. The Bill of Rights publicized; economic legislation unpublicized.

You know the enforcement of different parts of the law is as important as the publicity attached to the different parts of the law. The Bill of Rights, is it enforced? Not very well. You'll find that freedom of speech in constitutional law is a very difficult, ambiguous, troubled concept. Nobody really knows when you can get up and speak and when you can't. Just check all of the Supreme Court decisions. Talk about predictability in a system-you can't predict what will happen to you when you get up on the street corner and speak. See if you can tell the difference between the Terminiello case and the Feiner case, and see if you can figure out what is going to happen. By the way, there is one part of the law that is not very vague, and that involves the right to distribute leaflets on the street. The Supreme Court has been very clear on that. In decision after decision we are affirmed an absolute right to distribute leaflets on the street. Try it. Just go out on the street and start distributing leaflets. And a policeman comes up to you and he says, "Get out of here." And you say, "Aha! Do you know Marsh v. Alabama, 1946?" That is the reality of the Bill of Rights. That's the reality of the Constitution, that part of the law which is portrayed to us as a beautiful and marvelous thing. And seven years after the Bill of Rights was passed, which said that "Congress shall make no law abridging the freedom of speech," Congress made a law abridging the freedom of speech. Remember? The Sedition Act of 1798.

So the Bill of Rights was not enforced. Hamilton's program was enforced, because when the whisky farmers went out and rebelled you remember, in 1794 in Pennsylvania, Hamilton himself got on his horse and went out there to suppress the rebellion to make sure that the revenue tax was enforced. And you can trace the story right down to the present day, what laws are enforced, what laws are not enforced. So you have to be careful when you say, "I'm for the law, I revere the law." What part of the law are you talking about? I'm not against all law. But I think we ought to begin to make very important distinctions about what laws do what things to what people.

And there are other problems with the law. It's a strange thing, we think that law brings order. Law doesn't. How do we know that law does not bring order? Look around us. We live under the rules of law. Notice how much order we have? People say we have to worry about civil disobedience because it will lead to anarchy. Take a look at the present world in which the rule of law obtains. This is the closest to what is called anarchy in the popular mind-confusion, chaos, international banditry. The only order that is really worth anything does not come through the enforcement ... of law, it comes through the establishment of a society which is just and in which harmonious relationships are established and in which you need a minimum of regulation to create decent sets of arrangements among people. But the order based on law and on the force of law is the order of the totalitarian state, and it inevitably leads either to total injustice or to rebel lion-eventually, in other words, to very great disorder.

We all grow up with the notion that the law is holy. They asked Daniel Berrigan's mother what she thought of her son's breaking the law. He burned draft records-one of the most violent acts of this century- to protest the war, for which he was sentenced to prison, as criminals should be. They asked his mother who is in her eighties, what she thought of her son's breaking the law. And she looked straight into the interviewer's face, and she said, "It's not God's law." Now we forget that. There is nothing sacred about the law. Think of who makes laws. The law is not made by God, it is made by Strom Thurmond. If you nave any notion about the sanctity and loveliness and reverence for the law, look at the legislators around the country who make the laws. Sit in on the sessions of the state legislatures. Sit in on Congress, for these are the people who make the laws which we are then supposed to revere.

All of this is done with such propriety as to fool us. This is the problem. In the old days, things were confused; you didn't know. Now you know. It is all down there in the books. Now we go through due process. Now the same things happen as happened before, except that we've gone through the right procedures. In Boston a policeman walked into a hospital ward and fired five times at a black man who had snapped a towel at his arm-and killed him. A hearing was held. The judge decided that the policeman was justified because if he didn't do it, he would lose the respect of his fellow officers. Well, that is what is known as due process-that is, the guy didn't get away with it. We went through the proper procedures, and everything was set up. The decorum, the propriety of the law fools us.

The nation then, was founded on disrespect for the law, and then came the Constitution and the notion of stability which Madison and Hamilton liked. But then we found in certain crucial times in our history that the legal framework did not suffice, and in order to end slavery we had to go outside the legal framework, as we had to do at the time of the American Revolution or the Civil War. The union had to go outside the legal framework in order to establish certain rights in the 1930s. And in this time, which may be more critical than the Revolution or the Civil War, the problems are so horrendous as to require us to go outside the legal framework in order to make a statement, to resist, to begin to establish the kind of institutions and relationships which a decent society should have. No, not just tearing things down; building things up. But even if you build things up that you are not supposed to build up-you try to build up a people's park, that's not tearing down a system; you are building something up, but you are doing it illegally-the militia comes in and drives you out. That is the form that civil disobedience is going to take more and more, people trying to build a new society in the midst of the old.

But what about voting and elections? Civil disobedience-we don't need that much of it, we are told, because we can go through the electoral system. And by now we should have learned, but maybe we haven't, for we grew up with the notion that the voting booth is a sacred place, almost like a confessional. You walk into the voting booth and you come out and they snap your picture and then put it in the papers with a beatific smile on your face. You've just voted; that is democracy. But if you even read what the political scientists say-although who can?-about the voting process, you find that the voting process is a sham. Totalitarian states love voting. You get people to the polls and they register their approval. I know there is a difference-they have one party and we have two parties. We have one more party than they have, you see.

What we are trying to do, I assume, is really to get back to the principles and aims and spirit of the Declaration of Independence. This spirit is resistance to illegitimate authority and to forces that deprive people of their life and liberty and right to pursue happiness, and therefore under these conditions, it urges the right to alter or abolish their current form of government-and the stress had been on abolish. But to establish the principles of the Declaration of Independence, we are going to need to go outside the law, to stop obeying the laws that demand killing or that allocate wealth the way it has been done, or that put people in jail for petty technical offenses and keep other people out of jail for enormous crimes. My hope is that this kind of spirit will take place not just in this country but in other countries because they all need it. People in all countries need the spirit of disobedience to the state, which is not a metaphysical thing but a thing of force and wealth. And we need a kind of declaration of interdependence among people in all countries of the world who are striving for the same thing.


Wednesday, October 5, 2011

Bust Up the Big Banks! Here's Why.

In 1933, in the wake of the Great Depression, as a way to prevent the kind of reckless speculation that drove that economic calamity, the Glass-Steagall Act was signed into law by FDR. Among other things, including the establishment of the FDIC, the Act prohibited commercial banks, which took customer deposits and issued loans, from practicing investment banking, or issuing securities. This law worked beautifully for 66 years, preventing risk-taking with customer deposits while allowing investment banks to generate securities and trade to their heart's content.

Beginning around 1980 the banking industry began lobbying for the repeal of Glass-Steagal. In 1987 the Congressional Research Office issued a report, which concluded that there was a significant conflict of interest between issuing credit (lending) and using credit (investing) within the same institution. The report further argued that depository lenders possessed enormous power in holding other people's money and they needed to be prudent in their activities using that money, while securities investment was a risky endeavor. Congress did not act on the repeal at that time. 

But in 1999, the banks got their way. The impetus for repeal? Citigroup (a commercial bank) merged with Travelers (a conglomerate with investment activities) in 1998. According to law, Citigroup had to divest itself of the non-depository divisions within 2-5 years. But it took them less than two years to bribe Congress into repealing the act. 


This figure displays what happened to our banking system in the wake of the repeal of Glass-Steagal. Within a single decade the commercial and investment banks had merged into four behemoths, which represent an enormous proportion of all banking activity in the United States.

At the same time, complex derivatives have become the stock and trade of these investment banks. Remember, these derivatives in the form of mortgage backed securities, crashed the global economy in late 2008. They're largely unregulated, often referred to as shadow banking. Banks make enormous fees for originating, selling, and managing new derivatives vehicles. This derivatives business has become unfathomably large.   

Add to this the investment bank Goldman Sachs, and you've got 5 institutions that combined hold approximately $5 Trillion in assets. That's $5,000,000,000,000. That's a lot of money.That's more money than the yearly GDP of any country in the world save the U.S., China, and Japan. So where's the problem? 

The trouble is in the derivatives market. In 1996 the derivatives market represented approximately $30 Trillion in investment exposure, which was about 4 times the entire U.S. GDP. According tot the Comptroller's Office, that investment exposure currently sits at $249 Trillion in the U.S. alone. Now here's the startling part - 96% of that risk is held by the 5 largest banks. $239 Trillion against $5 Trillion in assets. They're leveraged at nearly 48:1. 

Now there's an financial trick known as bilateral netting, which essentially means that a bank holds a collateralized debt obligation (CDO) and then buys insurance against that CDO with a credit default swap (CDS). Therefore, presumably, their risk is minimized since they will not lose all of their investment. If the CDO fails, the CDS pays out. According to the same OCC report, bilateral netting currently covers approximately 90% of the exposure in the derivatives market. It doesn't matter. On the eve of the crash in 2008, bilateral netting covered 84% of all derivatives. It still brought down Bear Stearns, Lehman Brothers, and Merrill Lynch. It destroyed AIG. But for a ton of bailout money and more Federal Reserve support, the largest insurer in the world would have vanished from the face of the earth. At that time the bulk of the risk was spread accross 12 banking institutions. Today it is concentrated in just 5. 

So if Europe goes down the drain - and Europe is going down the drain - our 5 biggest banks' exposure to European banks, European sovereign debt, and European derivatives stands to bring these banks to their knees, again. And our economy with them.

The Dodd-Frank Act was passed as a bandaid for the hemorrhaging wound that is our banking system. It's done next to nothing. It is not protecting our citizens from the risk inherent in the combination of commercial and invsetment banks. It is not protecting our economy from the recklessness of these banks with derivaties ... remember how mortgage backed security derivatives brought down our economy in 2008? At that time our national exposure was approximately $180 Trillion. In just 3 years that figure has risen 38%. So rather than reining in the risk taking on Wall Street, things have continued to grow unabated.  

Ready for another bailout? Ready for another recession? Ready for our current first world problems to look meaningless in the face of the second major financial crisis in less than a decade?  

It's coming. Unless we act. 



Tuesday, October 4, 2011

Is OccupyWallStreet failing?


Any number of political pundits have dismissed #OccupyWallStreet as a failure for a wide variety of reasons. Mytheos Holt (pseudonym?), a writer for the usually fairly intellectually honest if right leaning Frum Forum wrote a piece on Why the Wall Street Protests are Failing. On the face of it he argues that it is and will continue to be ineffectual while citing activist Saul Alinsky's keys to successful protest. Ironic coming from the right, but that's beside the point.

The point is that Mr. Holt and his compatriots among the establishment media are dead wrong. 

The protests have been more successful than most anyone believed possible. 

Remember, this whole thing started 18 days ago!

In 18 days the protesters have managed to accomplish:

  • worldwide news coverage with the pepper-spray incident
  • facetime with celebrities (Susan Sarandon, Russell Simmons), celebrity rabblerousers (Michael Moore), social activism intellectuals (Cornel West), politicians (Former NY Governor David Paterson), and media pundits (too many to name).
  • the support of several large unions
  • the largest mass arrest in New York City history
  • 87,000+ facebook "likes"
  • 38,000+ twitter followers
  • blocked from trending on twitter (JP Morgan Chase recently invested $400M)
  • coverage on almost every large media outlet 
  • front page of the NY Times and several other big dailies
  • 147 spin-off protests in cities throughout the United States
  • a Boston protest group that's already had a 3,000 person march and several arrests
  • a San Francisco group that is actually occupying bank property
  • 28 spin-off protests in foreign countries on 3 continents

While their recent Declaration of the Occupation of New York City may read like a group-think classroom project and lacks the polish of some alternatives, such as FDR's proposed Worker's Bill of Rights, it also has some strong language including this gem: 

As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. 

The list of proposed demands on their website is also a bit silly in parts, but it's a work in progress. However, if they want to be taken seriously and supported by a majority of Americans, they'll need to revise or eliminate demands such as:

Demand eleven: Immediate across the board debt forgiveness for all. Debt forgiveness of sovereign debt, commercial loans, home mortgages, home equity loans, credit card debt, student loans and personal loans now! All debt must be stricken from the "Books." World Bank Loans to all Nations, Bank to Bank Debt and all Bonds and Margin Call Debt in the stock market including all Derivatives or Credit Default Swaps, all 65 trillion dollars of them must also be stricken from the "Books." 

That, of course, would be catastrophic for our economy and violate billions of legal contracts. So it's absurd on its face.  

In fairness, these are proposed demands written by a member of the movement. Not the demands the movement has actually chosen to support. They are using a voting system to accomplish that. Having now gone through the voting process, most of the demands garnering overwhelming support are reasonable expectations from a movement focusing on getting money out of politics, reining in invsetment banks, and reforming our government. Fortunately, debt forgiveness for all doesn't appear anywhere in the proposal. 

This is what direct democracy looks like. It's messy, sloppy, and full of equality. We, fortunately, live in a representative republic in which representatives air the issues rather than having every citizen vote on every issue. That would result in chaos and the tyranny of the majority. At some point the OccupyWallStreet protest will need to move beyond their horizontal leadership model if messages are going to coalesce and become more effective. But now is not that time. 

I look forward to watching this evolve. I hope they're successful. As a country, we need these issues resolved for our great experiment to flourish.  

Remember, it's only been 18 days. They don't need a firm message or set of demands yet. 

This is only the beginning. 

Wednesday, September 28, 2011

Corporations are people too?

Corporate Personhood is a pretty dry and obtuse subject, but it's fundamental to our broken government.

Legal scholars claim corporate personhood is required to allow corporations to enter into contracts, sue and be sued for contract violation, etc. It also simplifies tax collection from a snigle entity rather than from all persons within the corporation. All that makes sense.  

The US Supreme Court established corporate personhood in a ruling based on the 14th Amendment - an amendment that was supposed to apply to freed slaves after the Civil War. The Courts decided this concept of "personhood" could apply to corporations as well. Mystifying in retrospect. 

This metaphor of corporations as people has crept into our national consciousness (the danger of metaphors explained eloquently) and we are a weaker democracy for it. The right to free speech was granted to corporations. And campaign contributions were deemed speech - so now corporations can give enormous donations to political organizations. Far larger contributions than the average citizen can afford. 

And so corporate personhood has irrevocably corrupted our political process. All based on a metaphor. 

But Jon Stewart said something pretty enlightened the other day in an interview with Indiana Governor Mitch Daniels (about the 1:35 mark). "As Mitt Romney would say, 'Corporations are people..." but they're not Americans."

And there you have it. The funadmental fallacy in the corporate personhood argument for free speech and corporate campaign financing. Corporations are not citizens of the United States. Corporations lack the right to vote. We prohibit foreign campaign contributions. Why then are corporations given outsized influence in our electoral process?

The answer, of course, is that they've already bought and paid for our government. Our president. Our representatives. Our Supreme Court. All are beholden to the powers of these corporate intersts.  

That needs to end now.  

Corporations are people too?

Corporate Personhood is a pretty dry and obtuse subject, but it's fundamental to our broken government.

Legal scholars claim corporate personhood is required to allow corporations to enter into contracts, sue and be sued for contract violation, etc. It also simplifies tax collection from a snigle entity rather than from all persons within the corporation. All that makes sense.  

The US Supreme Court established corporate personhood in a ruling based on the 14th Amendment - an amendment that was supposed to apply to freed slaves after the Civil War. The Courts decided this concept of "personhood" could apply to corporations as well. Mystifying in retrospect. 

This metaphor of corporations as people has crept into our national consciousness (the danger of metaphors explained eloquently) and we are a weaker democracy for it. The right to free speech was granted to corporations. And campaign contributions were deemed speech - so now corporations can give enormous donations to political organizations. Far larger contributions than the average citizen can afford. 

And so corporate personhood has irrevocably corrupted our political process. All based on a metaphor. 

But Jon Stewart said something pretty enlightened the other day in an interview with Indiana Governor Mitch Daniels (about the 1:35 mark). "As Mitt Romney would say, 'Corporations are people..." but they're not Americans."

And there you have it. The funadmental fallacy in the corporate personhood argument for free speech and corporate campaign financing. Corporations are not citizens of the United States. Corporations lack the right to vote. We prohibit foreign campaign contributions. Why then are corporations given outsized influence in our electoral process?

The answer, of course, is that they've already bought and paid for our government. Our president. Our representatives. Our Supreme Court. All are beholden to the powers of these corporate intersts.  

That needs to end now.  

Monday, September 26, 2011

OccupyWallStreet - 9/24 @ University & 12th

I'm not sure how or when exactly, but I was made aware of the plan to occupy Wall Street sometime before last Saturday's occupation by a group simply calling itself #OccupyWallStreet - a handy twitter hashtag that makes use of the social media site to keep each other informed and organized. You can also stay informed via their webiste (OccupyWallStreet.org)

It started off innocuously enough last Saturday with a few hundred people decending on Liberty Plaza to stage a sit-in at Zuccotti Park. The occupation entered its 2nd week yesterday and up until then it had met with little controversy - a few daily arrests by the growing police presence around the park and a couple of videoed confrontations between police and protesters. 

There'd also been little press coverage and there had been the claim that the corporate controlled media was intentionally ignoring the protest in hopes it would dissipate without their attention. My personal belief is that the protests were too small and new to draw media attention. The group is also truly grassroots, having started in the forums of adbusters.com. They don't have the deep pockets and media presence of the tea party, because they haven't had the support of insiders who could get the word out easiliy. Instead they have relied on their own media efforts. That's probably the right approach, but the lack of media attention was clearly frustrating to the organizers. 

All of that changed yesterday.

On Saturday, September 24th, around noon several thousand people began a march from Zuccotti Park to ... well, the destination didn't appear to be entirely clear - but the people began marching. The police, with the advantage of motorized transport and coordinated radio communications were able to stay one step ahead of the protesters and made the march very difficult to follow as the group zig-zagged through lower Manhattan, eventually arriving at Union Square. 

Union Square is where I caught up with the marchers having chased them uptown along their route, always a few blocks behind. And in Union Square, that's where things got surreal. 

The police blocked the marchers from heading East out of ths square, so the protesers switched to Southwest, streaming across 14th Street and around police fencing that had been set up to pen them in. We followed down University - behind a mass of probably 30-40 police officers who were following several hundred marchers.

Upon reaching 12th & University things got real. At least a dozen people were arrested, two women were pepper sprayed by an overzealous NYPD officer. One protester was bleeding from a head wound. A woman was shoved to the ground by an officer dragging an arrested protester away. All of the violence was instigated by the NYPD. The protesters remained peaceful throughout. Agitated once the police began using violence, no question, but at no time did I see a protester initiatve a physical altercation with a police officer. 

A block away another 50+ protesters were arrested while sitting peacefully on the sidewalk - where they'd been told to sit by the police. Including a PBS reporter who was trying to interview one of the women who was pepper sprayed. 


To see my photos from the altercation at University & 12th Street in Manhattan.

The unclear part of this whole thing, to me, is why didn't the police simply allow the protesters to return to Zuccotti Park? Why the show of force? What are they afraid of? 

I'm deeply ashamed to see such indiscriminate force used against peaceful proteters in my city. This isn't supposed to happen in the United States. Since when is it okay for the authorities to deny our citizens their first amendement rights? 

I attended this march mostly out of curiosity. Now I'm engaged. Word is that thousands of others have been similarly outraged and are now flooding the park with support and plenty of new activists. These are our children, our friends, our neighbors out there putting their freedom at risk for our country. You should too. 

Friday, September 16, 2011

Tired of High Gas Prices? Blame Wall Street.


Senator Bernie Sanders (I-VT), the man I'd most like to be president, wrote an editorial in The Washington Post about oil speculation. 

Now I get the point of commodity futures trading. A transportation company can buy oil futures to in effect gaurantee that they won't spend more than they futures price for any oil they buy in the time period they speculate about. While sometimes they win, sometimes they lose, at least they get a set price so they can budget, figure out their fees, etc. It's a positive development to reduce volatlity in the prices of plane tickets, train tickets, bus tickets, shipping, and other big users of transportation. That provides stability to the markets so it's worthwhile.

There's just one problem. Oil futures trading no longer reflects the bets of transportation companies, but rather then bets of Wall Street speculators who work together to artificially push up the price of oil futures in order to turn a profit. And of course, who pays the difference? We do. Average citizens pay higher prices for goods that are transported, for plane tickets, for heating oil, for all sorts of things that are sensitive to movement in the energy markets.   

How big is the speculation? To quote Senator Sanders:

Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck

Aware of the rampant speculation, Congress has chosen to do nothing. As per usual. 

Of, by, and for the people, right? 

Tuesday, September 13, 2011

Sobering Statistics

14 million able bodied Americans are out of work. That's a robust 9.1%. It's worst in Nevada (12.9%) and California (12.0%). It's 10% or above in 8 other states plus the District of Columbia. 

As if that news weren't sobering enough, the U.S. Census Bureau released their annual report Income, Poverty and Health Insurance Coverage in the United States (2010).  

46 million Americans now live in poverty, an addition of 2.6 million impoverished since last year's count. That's 15.1% of all Americans live in poverty. 15.1%. That's more than 1 in 7 Americans. 

50 million Americans are without health care coverage. That's 16.3%, or nearly 1 in 6 Americans. 

Nationally, median household incomes have declined -2.3% since last year, or $1,154 per family. 

The Congressional response to these trends in employment, income, poverty, and lack of healthcare coverage is startling. Slash federal spending, push to reduce benefits from entitlement programs, challenge legality of the health care reform law, all while steadfastly refusing to raise taxes on wealthy individuals and corporations in order to cover the revenue gap. 

Our country is hurting ... badly. And Congress is more interested in protecting special interests than in helping our citizens weather this storm. Shame on them. And shame on us for electing them. 

Voters get what they deserve. 



Friday, September 9, 2011

President Obama Steps Up

Whether you think President Obama has been a disappointment (liberals) or is out to destroy America (conservatives), he stepped up last night with his jobs speech

He proposed a plan in which he'd:

1. Put construction workers back to work with direct investment in infrastructure, particularly roads, bridges, airports, railways, and schools. Huge and much needed investment that would greatly help one of the hardest hit job sectors. 

2. Put teachers back to work in the classroom so our kids can get an adequate education. Given the systematic GOP effort to destroy teacher's unions, I don't think this will be popular. 

3. Create tax incentives for businesses to hire the long-term unemployed. Not sure if the incentive ($4,000 per new employee) is strong enough, but it can't hurt, but it's a tax break so the GOP will love it. 

4. Develop a jobs program for veterans. After they've risked their lives for our country, they shoudln't have to fight for a job when they get back. 

5. Create incentives for companies to innovate here and keep jobs here. 

6. Extend unemployment benefits again. Probably the least popular idea of the night for the Republicans in the room, except for .... 

7. Pay for this by eliminating tax loopholes and having the rich pay their fair share. 


Predictably, Rand Paul's response was hyper-critical of the president and devoid of any ideas. After briefly blaming the president for the current economy, he gets on his deficit reduction horse, which is completely comical. He then lays out 5 ideas:

1. Balanced Budget Amendment to the U.S. Constitution. How this creates jobs is anyone's guess outside of teaville. It's also an absolutely moronic idea since deficit spending actually increases growth when our interest rate on our debt is so absurdly low.

2. "The Penny" Plan. Cut federal spending by 1% per year for 6 years and then freeze spending for 2 years. At this point, according to his math, the deficit will be eliminated. But about 30% of the GDP is government spending, so a 1% reduction would put a 0.3% drag on GDP. At 6 years that would be a full 2% drag on GDP. Great idea, huh?

3. Half the Corporate Income Tax & Eliminating Capital Gains Taxes (So Warren Buffett would pay ZERO taxes). As I've previously explained, corporate income taxes do not affect jobs. A lower corporate income tax actually incentivizes thrift by corporations. 

4. Regulatory Moratorium. No new regulations (apparently ever). And repeal one regulation every week until the economy starts recovering. Yes it might help, because we could start raping the environment at wll, which would certainly create jobs. So in other words, get ready for an unsafe environment, unsafe roads, unsafe food, unsafe drugs. What an insipid "idea". Fortunately, most Americans and most of Congress aren't as stupid. 

 5. Entitlement Reform. So I guess this spells out how he's planning on achieving a "Penny" Plan. On the backs of retirees, the unemployed, and the ill.

Nice work, Senator. Give huge tax breaks to the wealthy and screw the rest of us. 

Thursday, September 8, 2011

Warm Green Tea?

Thanks to The Economist for summarizing this Yale University data about climate change skepticism by political affiliation


It seems that compared to Democrats, Independents, and Republicans, the Tea Party is:

  • Least likely to beleive in Global Warming
  • Most likely to believe they are "very informed" about Global Warming
  • Most likely to believe they need no more information about Global Warming

I think what's striking is the size of the differences here. 

~50% of Tea Partiers don't believe in global warming compared to just 30% of Republicans (and <15% of Independents/Democrats). 

~30% of Tea Partiers consider themselves "very informed" compared to <10% of any other affiliation. 

>50% of Tea Partiers think they have all the information they need to make an informed judgment about Global Warming compared to ~20% for all other affiliations. 

So not are they ignorant about Global Warming, they are convinced they know more than anyone else.

It would be hilarious if it weren't so pathetic. 



I just had to give kudos to hedgie Doug Kass for coining the term "Screwflation" .... granted, he first defined the term back in June, but since I do everything I can to avoid reading mainstream financial pages, I missed it until now. 

Nevertheless, it's brilliant and exactly reflects why the current economic downturn is so troubling and troublesome. 

To use his own words: 

In the 1970s, when growth was stagnant and inflation was high, economists spoke of "stagflation." Four decades later, there's another threat to a sustainable trajectory of economic and corporate profit growth. It's "screwflation," which combines inflation with the screwing of the struggling middle class. Like stagflation, screwflation also threatens the general health and valuation of the U.S. stock market.


While the U.S. economy, in real terms, has more than doubled in the past 30 years and corporate profits will soon attain a new peak, median real wages have made little recent progress, and surging food and energy prices (among other cost pressures) now eat up middle-class incomes. Moreover, the lost decade of flat stock prices and an unprecedented four years of declining home prices have further weakened the confidence and purchasing power of the middle-class screwees.

The structural weakness in the labor market also makes this cycle unusual, and far worse for many, long-term, than the downturns of the 1970s. Unemployment has exacerbated screwflation's impact on all but the wealthiest Americans.


So we have structural weakness in the labor market and a plutonomy dominating the profit taking and wealth accumluation.

What he doesn't say, of course, is that we've also got a radical right committed to preventing the government from doing anything about it. Instead, they're committed to eroding worker's rights (further hurting labor), slashing budgets for safety net programs (further hurting labor), and deregulating industries (further helping the pluotocrats).  

Thursday, September 1, 2011

AZ-GOP raffles Glock in Giffords District

In perhaps the most insenstive move in the history of U.S. politics, the Pima County GOP is having a raffle for a glock pistol in the district of Congresswoman Gabrielle Giffords. As you know, Rep. Giffords was shot in the head in January 2011 with ... a glock. 

Here's the image from the PDF in case the assholes have the good sense to take down the flyer. 


The GOP Hates Free Elections

Rolling Stone reports the GOP has been making a big push to disenfranchise voters leading up to the 2012 elections. They use the myth of widespread voter fraud as a justification, but it would be hard to determine exactly how most of these would reduce the nearly nonexistent fraud. 


- Creating Barriers to Voter Registration. In Florida a voting drive organization can be subject to $1,000 fine and criminal charges if they do not turn in the required paperwork within 48 hours of obtaining the voter registration. Why in a "free" democracy would a state make it harder to get citizens to register? Because as Republicans themselves have admitted, when voters turn out in great numbers, Republicans lose their ability to win elections.

- Reducing Early Voting Opportunities. Several states have reduced the duration of early voting and in both Ohio & Florida, it is now illegal to vote early on the Sunday before the election. Why? Because that's the day black churches mobilize their members to be active particpants in our democratic process. And, of course, African Americans are more likely to vote Democratic.  

- Photo ID Requirements. This is a red herring issue, because federal law already requires a photo ID, but in several states they are making the ID requirement even more strict than federal law. Why? Students and minorities are less likely to have proper photo IDs (in Texas university student IDs don't qualify) and are more likely to vote Democratic.

- Disenfranchisement of Former Convicts. Several states have overturned laws allowing ex-cons to vote. Why should they be denied their right as a citizen if they've already paid their debt to society? Because they tend to vote Democratic. 

This is systematic crminal activity on the part of the GOP as they attempt to deny American citizens the right to vote. And yet they dress it in the defense of freedom. 

Remember, Rock the Vote. Love the Little Guy.


Updated Blog

I'm sure you've noticed the new format. The black with graffiti was wearing on me.

I've also begun using this site for my blog posts (http://egalitarian.posterous.com/), but they are  automatically posted to this link a well so no need to update your browser unless you'd like to. Also, all of the old posts from this blog have been moved over there so one stop shopping is available on either site.

I've also decided to change the format a bit - I'm going to be posting short commentaries on recent articles rather than longer explorations of topics - more of a news aggregator for progressive political issues than a soap box for my beliefs.

I may go back to the longer posts periodically when something really gets me riled up, but I think more shorter posts will be more useful than infrequent longer posts.

CEOs making more than companies paying in taxes?

A new report from the Institute for Policy Studies finds that the 25 of the top firms in the U.S. paid their CEOs more, and spent more in lobbying, than they paid in taxes to the federal government. At a time when tax revenue is very low and we face massive deficits that are being used to erode protections for the poor and middle class, we've got cash flush corporations dodging taxes, lobbying for new tax loopholes, and paying their CEOs a king's ransom for their tax evasion. The plutonomy continues unabated and much of our country blames poor people for the state of affairs. 

Friday, August 26, 2011

A New Yorker's Guide to Hurricane Preparedness

Hurricane Irene appears to be heading this way so I'm taking a time out from ranting and raving about the idiots in Washington to write a Hurricane Preparedness List for all of my fellow New Yorkers who haven't experienced a hurricane.

1. Check the NYC.gov hurricane evacuation page to see if you're in a flood zone. If the system is too bogged down with traffic (it was earlier this morning) check the map below. If you are in a flood zone, go to step 2. If not in a flood zone, skip to step 5.

2. Find a friend who doesn't live in a flood zone whose place you can crash at. The bigger and nicer the apartment the better.

3. Pack a bag of necessities (necessary) and family heirlooms you don't want to get waterlogged (less important if you're not in a basement or 1st floor apartment).

4. Stop by liquor store on your way to your friend's house. It's nice to show gratitude. The provisions and whatnot are now your friend's responsibility. Take advantage of their good nature and foresight not to buy an apartment in a flood zone. Go to step 12.

5. Fill up the bathtub with water. Remember how nasty it was when the sewer backed up in your building's basement? Imagine that in your apartment. You need the water to flush the toilet in case of a power outage.

6. Fill up all available containers with tap water. You'll need drinking water in case of a power outage. Fortunately, our tap water is so damn good you don't need to buy bottled water like those suckers in other cities that are going to get hammered.

7. Order groceries from Fresh Direct. No sense in wasting time leaving your apartment to get provisions. Snacks and non-perishibles are probably best. Fridge will likely go down.

8. Download flashlight app for smart phone. For iphone/ipad. For android. For blackberry. If you're using another operating system, go to step 9. If not, skip to step 10.

9. Go to local service provider to upgrade to an iphone, android, or blackberry.

10. Charge your smartphone, laptop, and any other portable electronics you may want to use during the likely power outage. For example, I'm charging my Roomba.

11. Do laundry. This could be problematic later if your building's laundry room is in the basement or if you use a laundromat nearby. And it's important to have appropriate clothes for #12.

12. Plan a Hurricane Party. It's an old southern tradition to throw a hurricane party if you're not really in a danger zone. The best locale for a party is going to be a tall building with great views so you can watch nature's fury from the safety of an overpriced condo.

13. Set up a time lapse of the storm to post on Vimeo later. This will be the biggest hurricane in NYC in 80 years. You don't want to miss being the guy featured on gothamist for having that great idea.

14. You almost forgot to buy party provisions. If you read this whole list before submitting your fresh direct order you probably got them that way, otherwise you're stuck with a trip to the store. You probably should buy more liquor anyway - beer won't keep cool so wine or spirits are the best way to weather this storm.

15. Enjoy yourself - you're making memories. But be sure to stay safe too.

Tuesday, August 23, 2011

Stimulus didn't work?

The American Recovery and Reinvestment Act (ARRA), better known as the "stimulus package", was signed into law in February 2009. In the wake of this large (and it was large, though not massive) spending package, a wide variety of people came out to say "it didn't work" ...

These ranged from free market Milton Friedman swooning economists who cringed at the idea of Keynesian economic theory being implemented after their own policies failed the country abysmally to CEOs of large companies that gained financially through the stimulus, to state governors who claimed it was wasteful while accepting $28.5B in money for their own states (I'm looking at you Rick "The Idiot" Perry).

Now Perry I can understand. He's running for president against President Obama so facts don't matter to him. I mean, he closed 97% of his state government's budget deficit using stimulus money and he took a great deal of credit for jobs created while he was spending that $28.5B in stimulus funding in his state.

The CEO at least waited a year before making his pronouncement. Of course, he did what a CEO was supposed to do - review the effects of the stimulus on his own bottom line. Interesting that within weeks of this pronouncement, Intel was given a tax exempt bond issuance to build a new semi-conductor factory and upgrade adjacent facilities in Oregon. That ol' CEO has been silent since then on the success of the stimulus. Convenient for him and his shareholders.

But the economists? Well, the economists are slaves to their ideology - claiming the stimulus didn't work just a few months after it was enacted. But they're careful. These sneaky economists were very, very careful ... they pointed to the lack of increase in personal consumer spending as a sign the stimulus didn't work ... and this from data dating only through June 2009. This is convenient for them, because stimulus funding didn't begin allocation until the 3rd fiscal quarter in 2009 (April 1-June 30) so they were looking at the effect of $36B in stimulus on a single indicator to demonstrate for their fellow free market rag, The Wall Street Journal, that Keynesian economic theory is a failure. What a load of bullshit.

But more economists spoke out, right? That's right, in a survey of 68 private sector economists,  50 (73%) said the stimulus didn't increase hiring for their companies, but 39 (57%) said that demand for their services was rising - they just apparently didn't think the stimulus was causing that demand.  This was 68 economists employed by businesses. How many economists are employed by businesses? Where did they work? What was their motivation? As someone who does survey research as part of my job, 68 is a very low sample size to draw such an enormous conclusion. Of course, if I could get that much press by surveying 68 conflicted individuals, I'd be a fool not to. I'm sure the National Association of Business Economists was well compensated for their findings.

But getting away from the claims of ideological zealots, politicians, and CEOs looking for a handout, what do the data actually tell us? The stimulus package has largely run out of money. Approximately $670B of an expected $787B has been paid out. So 85% of the money has been spent. A fair amount of the remaineder may end up being unallocated, so we've basically seen the bulk of the money having been spent over the past 2 years. What did it get us?

Well, one indicator is the job growth rate, since a big part of the stimulus was to get the labor market moving again. Take a look at the chart below from The Economist:

See that big spike? That's February 2009 - the month the stimulus was signed into law. We see an immediate and steep decline in jobless claims, which once the money started being received around April 2009, declined steadily until joblessness plateaued around the middle of 2010, presumably after many of the jobs created by the stimulus had been filled. But stimulus money began to run out for many of the projects over the past few months and look at that ... jobless claims are climbing again in mid-2011. But remember, the stimulus didn't work.

Now lets look at the effect on GDP.

So by the 2nd quarter 2009 (this isn't fiscal quarters) we see a big bump, coinciding again, with the stimulus package. Yes, GDP is a very gross measure, but there wasn't a whole lot going in with the economy at this point so how else do we explain this rapid movement from -4% retraction to +4% growth in just 2 quarters? It's tough to explain otherwise. Sure, the Fed was doing its own tweaking of the economy, but it would be tough to imagine that infusing the economy with an additional ~$150B in spending each quarter wasn't helping anything. To claim that the stimulus didn't work.

So what's been happening as the stimulus has wound down? No big surprise. Growth is anemic. The original 1.9% 1st quarter GDP in 2011 (seen in the 2nd figure above) was revised down to just 0.4% "growth" ... and the 2nd quarter wasn't much better at 1.3%. The slowest growth since the stimulus package was enacted 2 years ago. Some economists (those with a mind of their own?) now think we're headed to a double dip recession as the stimulus funding runs out and austerity cuts are enacted at the wrong time.

Notice nobody's come back out and admitted they were wrong? Not a big surprise, really. Ideologues, politicians, and capitalists can't (or won't) change their spots.

Monday, August 15, 2011

Warren Buffett - What's his Agenda?

Warren Buffett, that affable billionaire who marches to the beat of his own drum, said that the government needed to stop coddling the super-rich. (original NYT op-ed piece here, but it's on the NY Times website so if you've run out of free clicks this month or don't want that liberal rag showing up in your browsing history, stick with CNN)

He's right, of course. As I've explained time and again in this blog, the wealthy are paying a lower income tax rate than they've paid in decades and yet we've got the largest deficits in our history. It doesn't take a genius to put two and two together and understand that raising the tax rates would close the deficits.

Buffett doesn't even call for something particularly radical. He suggests a new tax on those making over $1M/year on anything over $1M/year. And an additional tax on anything over $10M/year. And he means anything. He'd tax capital gains at the same rate as income. It's all income for these super-rich. In fact, 88 of the 400 richest Americans in 2008 reported no income at all. Everything was a capital gain. For that they paid 15% tax.  That's less than their limo drivers, chefs, personal trainers, or butlers likely paid. That also means they paid 0% in social security, Medicare, or unemployment insurance taxes, which is less than everyone in America who worked an hour "on the clock" in 2008.

Fiscal conservatives, by whom I mean the staunch apologists for corporate greed, have so captured the narrative for taxation that some of the early responses to Buffett's piece have ranged from the tired canard that corporate taxes in America are higher than anywhere else to shrill cries from the great unwashed masses on facebook. The following gems are plucked from some friend's walls:

Buffett is being disengenious. First, if he wants to pay more he can go to the treasury's website and write a check. The government happily accepts any money sent its way. Second, a large part of his income is from capital gains and dividends. He pays "only" 15% of that income but that is on top of the 35% corporate tax he already paid on that money as a shareholder. Third, he isn't admitting that social security is tilted in favor of the poor. He is paying ss tax on only the first $100k or so because that prevents the gov from having to pay a correspondingly huge benefit.
you should look up data on the break-down of US tax revenue and who pays what, all too easy to lay everything at the feet of the 'super-rich'
To the Forbes op-ed, there's not much to say. Very few corporations pay full taxes thanks to things like tax deductions for corporate jets and accounting tricks that allow a company like ExxonMobil or GE to hide virtually all of their profits overseas. This is a typical example of the defense of greed by the corporate media. Remember, Steve Forbes ran for the GOP presidential nomination ... twice. He's anti-tax, anti-regulation, and anti-government. No surprise here.

The facebook comments from the gallery are a bit harder to understand except that they clearly represent the successful media campaign against a taxes by influential power pedaling ideologues like Grover Norquist and his ridiculously named Americans for Tax Reform. Nordquist doesn't seek tax reform. He seeks tax evisceration. He seeks to end the government's ability to perform any tasks not deemed vital by Grover Norquist and his corporate overlords.

I guess what's so surprising in all of this is that most opinion polls show that most Americans support higher taxes on the wealthy. It's got a clear majority of voter support and yet any time someone comes out and actually calls for this common-sense reform to the tax code, the usual suspects and their blind followers bring out the claims that it is variously: unfair, unAmerican, wealth redistribution, and won't work.

All are false.

It's not unfair. 

Wealthy Americans benefit far beyond most of us from the security, infrastructure, and well-trained workforce provided by the American government. Therefore, there is no reason why they shouldn't pay taxes proportional to that benefit.

It's not unAmerican. 

Over the past century the top marginal income tax rate has ranged from 35% (today) to 91%. For most of the past century (including during the longest sustained era of growth in our country's history - 1945-1973), the top marginal income tax rate was over 70%. Buffett doesn't explicitly state how high he thinks the tax rate should be on these $1M and $10M income groups, but even if the rate were raised to say 40% on $1M-$9.9M and 50% on $10M+, this isn't particularly high given historic norms.

And the "unAmerican" thing is bullshit anyway. What's "American" is whatever the American people prioritize as necessary for the continued governance of our country. Without special interests running our government you can be sure that the top tax rates would have been raised long ago.

It's not wealth redistribution. At least not in the direction assumed.

Wealth is now more concentrated at the top than it's been since the Gilded Age (1865-1893). Real wages among the bottom 90% have been nearly flat for a decade. If wealth is being redistributed, it's being redistributed upward with ever increasing tax loopholes for the wealthy while the rest of us are stuck paying income taxes on our ever less valuable paychecks. So yes, wealth is being redistributed, but it sure as hell isn't trickling down.

It will work (better than the status quo).

I'll leave the refutation of this myth to Mr. Buffett himself:
To those who argue that higher rates hut job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation. 
Granted this is a blunt instrument comparison, but it's the only evidence we've got. An era of sustained longterm job growth accompanied high top marginal tax rates. A subsequent era of low top marginal tax rates results in negligible job growth. The message, of course, which is so hard for many people to see through their biases, is that the top marginal tax rate is unrelated to job growth. So raising taxes on the wealthy won't create jobs directly - but it will narrow the budget deficit and help get our country's finances in order. It won't require us to make such enormous cuts to social safety nets that help prevent the further erosion of the economic security of the working class.

I guess it should be unsurprising that a super-rich guy asking for higher taxes would be met by such resistance from the corporate media, but by any measure Warren Buffett represents everything a wealthy American should be. He's innovative, speaks his mind, and puts the best interests of his country above his own selfish motivations. Of course, I would argue that Mr. Buffett simply has a longer term view of the opportunities presented by the American economy.

The recent recession has decimated the American middle class and with it the spending power of the largest portion of our economy. If we really want a sustained recovery and continued growth in the American economy, the best way to accomplish that is by creating jobs (the federal government is responsible for approximately 25% of the GDP - so cuts in federal spending result in job losses) and protecting the safety nets available for the middle class. Deep cuts to social security, Medicare, Medicaid, and jobless benefits will cripple our ability to consume the goods and services necessary to continue growing the economy. It's a vicious circle.

Given how terrible our recovery has been and how fractious our politics have become, the big question is, "Why not give it a shot?" If raising taxes on the wealthy closes the budget gap and the rest can be made up with reforms to entitlements and cuts in military spending, why not? If a more fiscally responsible government can help create and retain jobs through continued spending, why not?

The answer, of course, is because all of this is not about doing what's best for the country. It's about winning an ideological war against progressive gains in the 20th century. Never forget. Corporatists hate protecting workers. It costs them money in their own narrow world view.

Sunday, August 7, 2011

Debt Deal Fallout

Let's see. In the few days since the debt deal was announced:

The New York Stock Exchange took the 9th worst single day plunge in its history.

S&P downgraded US treasury bonds for the first time since US treasury bonds began being rated.

The U.S. Postal Service announced plans to shut 2,500 post offices around the country (16% of all post offices) and cut tens of thousands of jobs.

HSBC announced plans to cut 30,000 jobs from their workforce by 2013.

This is only the beginning of the double dip, folks. We're headed for more pain, weak if any growth, a more sustained jobless period, and a continued widening inequality between the wealthy and the rest of us. Federal programs aiding the poor are being cut while no taxes will be raised on the wealthy, so the incomes of the poor will decline while the rich continue on unabated.

This is unsustainable. If the middle class, which has already been decimated by the financial crisis, doesn't have disposable income to spend, there won't be any growth. The lower 90% of the country is responsible for 70% of consumer spending. If they don't have anything to spend, the economy can't grow. At least not robustly enough for the private sector to pull our economy out of the high unemployment rut we're stuck in.

The solutions for all of this are simple, and unfortunately, toxic to many of our elected officials and the rabid tea partiers who are now given outsized power in our representative government. We need to throw the bums out in 2012. Unfortunately, as usual, the wrong bums will probably get thrown out. Those willing to govern rather than pander to special interests and compromise rather than stand as rigid ideologues.

As usual, voters get what they deserve.

We can do better.

Monday, August 1, 2011

Debt Ceiling? We don't need no stinking Debt Ceiling!

The latest news out of DC is that Congress & the President have finally come to broad terms on a debt limit increase. This will be the 79th time in our history we've raised the debt ceiling, which until this past few months has always been a formality.

Why do we even have a debt ceiling? Well, it made some sense when it was instituted in 1917. At that time Congress did not have discretionary control of the federal budget - the president did. The Congress had broad powers about how much to spend and how much to tax, but the specifics were largely left to the president's priorities. That's no longer the case. It hasn't been since 1974 when Congress first began writing full budgets with line items for every spending appropriation and every form of federal revenue. Since that budget 37 years ago, Congress has done the same thing every year. And since that time the debt ceiling has been obsolete. The ceiling is no longer a curb on the president's ability to over-allocate resources, but now represents an artifact of a bygone era.

The rational course of action, of course, is to terminate the debt ceiling altogether, because now the fox is guarding the hen house. Congress appropriates the spending and raises the debt ceiling whenever they over-spend, which they usually do. The president's only role in all of this is to authorize spending that's already been approved by Congress.

I hope you see the absurdity of this ... Congress has approved spending and now must raise the debt limit, because the government cannot currently meet the obligations that Congress mandated. And Congress is refusing to do so unless the President agrees to cut spending.

The thing of it is, we can't not raise the debt ceiling, because the money has already been allocated. It's already been promised and according to the 14th amendment the federal debt shall not be questioned - meaning we are required to always pay our bills. So if for some reason this latest "deal" fell apart, the president could rely on the constitution to defend his decision to continue paying our debts. But instead, the Great Compromiser has agreed to bend over backward to slash spending in order to placate a fringe group that's got much of the House by the balls. I guess the Tea Partiers only agree with the Constitution when it agrees with them. Those pesky amendments were clearly mistakes.

So the plan that's been broadly agreed upon looks like it'll cut $1T to $2.4T over the next 10 years. It'll also establish a "Super Congress" (where is that in the holy Constitution?!) that will be authorized to find ways to slash spending and narrow the federal deficit. Notice all the focus on cutting spending ... almost no talk of raising taxes. This, of course, is because taxes are unpopular and everyone in DC is a child when it comes to responsible governance.

I don't argue that we should not find and eliminated inefficiencies in federal programs. No doubt that we should. But attacking programs vital to the working classes is not acceptable when there is enough waste in the system in defense and tax breaks for the wealthy to cover virtually all of our current budgetary shortfalls.

Unemployment stands at 9.2% according to the latest figures. That's still the official unemployment rate. Word is unofficial unemployment is still above 16% of all able bodied, working adults. The additional 7% represents those long-term unemployed. They've lost their unemployment benefits and are now unemployable, because employers have a strong bias against hiring the unemployed. So nearly 1 out of every 6 working age Americans is out of work. Think about that for a moment. 1/6th of our labor force is performing no productive labor - at least according to how we currently define productive, but that's another story.

And rather than tackling unemployment through direct spending as we did in the 1930s. Rather than extending benefits to those most in need. Rather than finding ways to create jobs, Congress has spent the past several months trying to find ways to reduce the size of the government, which will no doubt, cost thousands of federal employees their jobs. Where are they supposed to go work? You know where they'll go? They'll go on unemployment and they'll be scraping by and losing their houses while not being productive.

This entire debacle was self-created. There is absolutely no rational reason for this crisis. We've doused ourselves in gasoline and now we're trying really hard not to light that match in our hand. Idiots Rule. Unabated.

Wednesday, July 27, 2011

Our Leaders are Idiots

There is no better evidence that our educational system is in shambles than the complete inability of our leaders to learn from history. Clearly they didn't learn much of anything in school. Well, that's if they even went to school. A disturbingly high number of our leaders didn't even go to college, and yet we're entrusting them with decisions about our country's future? How is that even possible?

Shortly after the 1929 stock market crash the response from government was to cut spending and implement austerity measures in order to stabilize the markets. The opposite happened. A rapid contraction of government spending resulted in even less commerce and even less spending which caused businesses to fail and millions of Americans to lose their jobs, which sent the country into the Great Depression.

At first in the wake of the financial crisis of 2008, I thought maybe we'd learned from our mistakes. A rapid stimulus response pumped money into the economy and spared the crash that may have happened had it not been goosed with that money. But now, just as that stimulus money dries up, the budget hawks are calling for spending cuts and austerity measures. This is during a jobless recovery. We still have official unemployment of 9% and unofficial unemployment over 16%. More Americans are out of work today than were out of work during the Great Depression. Sure, we're a bigger country now, but that's still a lot of misery going around.

Meanwhile we have messages like this coming out of Congress:
Americans deserve immediate spending cuts that demonstrate that we are charting a swift path toward a balanced budget. We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year.
This was a message from the Congressional Republican Study Committee.

Why do we deserve immediate spending cuts? What did we do to deserve having our safety nets slashed just when we're clinging to them to keep from falling into the abyss? Why do we deserve to have spending cuts when what we need right now is economic stimulus? We don't need a contraction in the one part of the economy that has actually continued to spend. We need continued investment in our economy to keep it from collapsing in on itself. We're not out of the woods ... we're still in the thick of it.

What we actually deserve is leadership up to the task of leading. Up to the task of defending the working (and unemployed, and elderly, and youth) people of the United States against the transgressions of the money whores.

If you're really concerned about the budget deficit and national debt, then raise taxes on those sectors that have actually weathered the storm with remarkable ease ... the top 2% that those Bush tax cuts went to. I know I've said all this before, but I'll keep on saying it, because it's still the truth.We're supposed to save during good times and spend during bad. The trouble is we spent during good and now those idiots who didn't pay attention in school want to save when times are bad. It's backward. It's stupid. It's ignorant.

But I guess I agree with one thing. It is what we deserve. Voters get what they deserve and in 2010 we actually invited the Republican party back into power and this is the result.

Bend over, America. The Boehner's back.

Monday, July 25, 2011

Americans Elect 2012 - a viable alternative?

I think I count myself among many, many Americans who were disappointed that Barack Obama has not ended the wars, has not closed Gitmo, let Wall Street get away with their crimes, did not focus on the economy, capitulated too much to conservatives on healthcare reform, did not let the Bush tax cuts expire, and has not shown the kind of leadership in office that he appeared capable of on the campaign trail. I know most of us probably had unrealistic expectations so disappointment was inevitable, but there's just far too much "new boss is same as the old boss" for me to feel completely comfortable continuing to blindly follow him through another 4 years.

George Washington (and others) have warned us of the dangers of entrenched party loyalties that supersede the good of the country. We've managed to deal with it relatively well over time, though any positions that do not reflect the ideology of one of the major parties does not get any traction in our national dialogue. This may be about to change. I'm pretty skeptical of the possibility of success for any grassroots effort not wholly or partially endorsed by one of the two major parties (see MoveOn.org and The Tea Party for examples of successful efforts not free of party loyalty). But now there may be.

Check out Americans Elect 2012

From What I've read about it, it's an attempt to bring democracy back to electoral politics by creating an internet convention in which people who sign up for the sight select the issues that are priorities, the solutions that matter, and then nominate a presidential candidate. The candidate then must choose a running mate who is not affiliated with the same party.

This sounds too good to be true so we'll see how much traction they get, but there are deep hedge fundy pockets behind this effort and there appears to be a pretty strong chance that they'll get recognized for the presidential ballot in all 50 states. I'd say this is pretty exciting if it actually works.

Even If it doesn't work to create a viable, competitive 3rd party candidacy, it has the possibility of derailing one of the major party candidates, as fringe third parties have done over the years, stealing just enough votes from the more similar major party candidate to swing the election the other way. Remember, in 1992, 1996, and 2000 the president was elected with less than 50% of the popular vote.

Anyway, I've signed up and shared my views with them. You should too. Let's actually get the people's voice heard this time around! Even if we can't win this thing with a candidate that truly represents the views of the voters of this country, maybe we can force the major candidates to take positions that reflect our own beliefs about how this country should be run.

As you take the survey on the site, look at how your answers compare to the other tens of thousands of people who have already answered. The American people do not have much stomach for much of the agenda of either major party. It's time they knew that.

Sunday, July 24, 2011

Idiots are Well & Truly Running the Asylum

We're days away from a federal default on debt, whether it be on bonds or delaying payments to social security recipients. I still very much doubt that will happen, but in the meantime things are beginning to get dicey. We have Minnesota shutting down their state government for 20 days. We have recall elections taking place in Wisconsin in the wake of the rape of the public worker's collective bargaining rights.

And now we have federal agencies bracing for a lot of pain. In fact, the Federal Aviation Administration shut down its tax revenue collection offices at midnight last night. Please explain to me in what world when we're facing record budgetary shortfalls, it's at all acceptable for the government to stop collecting revenue? And of course, in response airlines raised their rates to take the savings from consumers and increase their bottom lines. Greedy corporations will nearly always do what is best for their bottom line - not what is best for the individual consumer or for society at large. The notable exceptions - the airlines that have at least temporarily passed the savings on to consumers are Frontier Airlines, Alaska Airlines, and Virgin America. Kudos to them. They deserve special mention when the rest all raised their rates an average of 7% overnight.

This is only the beginning if the debt default were to actually happen. We've got children, idiots, and madmen running the country. It's time for a big change. Kick the bums out. Start with every single Republican who has signed the pledge not to raise taxes. Their ideological purity fails the minute it is faced with the realities and responsibility of running a country.

Tuesday, July 19, 2011

Debt Ceiling Getting Closer

Why haven't I been blogging much? Well, most of all, because the topic of my last blog post - the debt ceiling fight - is still the topic at hand inside the beltway and I have little else to say about it. My position still stands.

As I suspected, the pundits are all a twitter about it and most of the country doesn't give a shit.

The Republicans have backed away from even the most reasonable of their positions and have now taken a stance that says "no new taxes ... ever" ... and they're saying it so strongly, they're signing pledges to prove their loyalty to conservative ideology. This is the extremism now displayed by 1/2 of our political parties. George Washington warned us at length about the dangers of a two party system and as has happened for the past 235 years, the public pays the price for their loyalty to one of two ideologies. As I'm fond of saying, "Voters get what they deserve."

Anyone frustrated with this current state of "broken government" needs only to look at the 2010 midterm elections to understand the cause. Giving the GOP control of the House of Representatives has resulted in a government that can't get anything done. Normally, a split government is a good thing. It keeps one party from ramming their agenda through without compromise. But the Democrats are so fractured that even when they had control of both houses and the White House, they could not pass health care or financial reform laws with sufficient protections for the American people. So what we end up with is a fractured Democratic party negotiating with an intractable and unified Republican party and nothing gets done.

Raising the debt ceiling, which is a no-brainer necessity, becomes fodder for forcing the Democrats into the Republican agenda of preserving tax cuts for the wealthy, cutting social programs, and leaving the military alone. When we could, in fact, lower our deficits substantially by doing just the opposite. The problem being, of course, the Republicans get far too much of their political support from those rich folks who benefit most from ridiculous tax loopholes that the GOP is now spinning as "raising taxes" if we stop letting them write off their corporate jets.

It's absurd, but nobody's really paying attention, because the country is bored to tears with this griping over completely unfathomable numbers. $30 billion, $2.5 trillion, etc. They mean nothing to the average person. Those figures are so abstract in our thinking. ... the average household income in America is around $50,000/year. $2.5T represents the combined annual income of 50 million American households. For perspective, there are approximately 117M households in the country, so $2.5T covers the total annual income of more than 40% of the country. And this is what our leaders re negotiating about with regard to our national debt.

How can we even wrap our heads around this?

Oh, and another tidbit. We're the only developed country in the world with an artificial debt ceiling. Other countries simply authorize their treasuries to issue new bonds to cover budget shortfalls and rely on the responsibility of their elected officials to adjust taxation and spending to accommodate any shortfalls or surpluses.

I guess that's only possible when your leaders behave like adults.

Wednesday, June 1, 2011

Debt Ceiling Shenanigans

As you've probably noticed, the GOP is holding the US treasury bonds hostage. 

Oh, you haven't? Well, that's because it's cleverly called "raising the debt ceiling", a phrase which probably makes most voters roll their eyes on change the channel. For background, the debt ceiling is the amount of money the federal government is allowed to be in debt at any given time. We assure our ability to continue paying our debts by raising the debt ceiling periodically when it is deemed necessary. If we don't raise the debt ceiling we default on our debt.

You see, federal deficits are covered with the issuance of treasury bonds, which people buy thanks to their AAA rating and the fact that the USA has never, ever defaulted on its sovereign debt. The government always pays the interest and then always pays off the principal when the bond comes due. That's how it's been since 1812 and how it should be for as long as we exist.

But a curious thing has happened. The National Debt went from $5.9 trillion in President George W. Bush's first year in office (a Clinton budget) to $10.8 trillion in Barack Obama's first year in office (a GWB budget).  So in 8 year our National Debt increased by 83% ... under Republican leadership. Remember, the GOP held both houses of Congress and the Presidency from 2003-2007. You can see the trend in the graph below, which plots national debt (top, black line) by administration. There is a massive increase in national debt in both the 12 years of Reagan-Bush and the 8 years of GWB. Bill Clinton's era is nearly debt neutral thanks to his balanced budget years.

The causes of the massive increase in debt under the previous administration are simple - an unpaid for war, an unpaid for tax cut, an unpaid for Medicare prescription drug plan, and an economy that tanked in late 2007 thanks to a wide variety of reasons I've discussed elsewhere. 

So President Obama was handled an economic shambles and a massive debt. He's now being blamed for an economic shambles and massive debt. My, what short memories we have. 

So what's interesting in all of this is that Republicans claim to be the fiscally repsonsible members of our government, and yet under their last 2 presidential eras, we've accumulated nearly all of our National Debt. And now the Republicans in Congress are making hay over this debt in order to get their way. 

What way is that? They're demanding spending cuts equivalent to the amount the debt ceiling is raised. In principle, this is a reasonable request. That's where the reasonableness ends.We're in the middle of a jobless recovery. Unemployment is still 9% (5% is considered "full employment") and this ignores the additional millions of our workforce who have simply stopped looking for work. We're still fighting the war in Afghanistan. We're fighting shadow wars in Yemen and Pakistan. While President Obama's health care reform law eliminated the Medicare prescription drug debacle, we're also still funding the unpaid for tax cut. 

Ending the wars and raising the tax rates back to Clinton era levels would be all that needs to be done in order to vastly reduce our deficits and eliminate the need for future debt limit increases (we're already over our current debt limit so the horse is already out of the barn this time) - yes Republicans have already stated that they refuse to raise taxes and we all know how they feel about the military. 

So where else could we cut? Well, social programs, of course. Government oversight capabilities too. All the things that are popular with voters and unpopular with conservatives. I'll be curious to see how this plays out, because the public has shown very little concern over the national debt in the middle of our economic crisis. I suspect the GOP is overplaying their hand just as they did with the Ryan budget and that if the Democrats can control the message on this, the GOP will face big losses in November 2012. 

Of course, they don't control the message very often and when the message is "Republicans want to cap the debt limit!" it comes across as a good thing ... the real message is "Republicans are willing to let the government default on its national debt for the first time in history!" 

Because that's what they'll do if they actually do not raise the debt limit. Funny that they're willing to do that all for a tax break for their wealthy donors and continued funding of their military industrial monster. Not funny-ha-ha, of course, but funny-sad.