Showing posts with label US Economy. Show all posts
Showing posts with label US Economy. Show all posts

Friday, November 1, 2013

A Little Much-Needed Truth About "Class Warfare"


The Logic of Stupid Poor People
By Tressie McMillan Cottom / October 29, 2013

We hates us some poor people. First, they insist on being poor when it is so easy to not be poor. They do things like buy expensive designer belts and $2500 luxury handbags.


To be fair, this isn’t about Eroll Louis. His is a belief held by many people, including lots of black people, poor people, formerly poor people, etc. It is, I suspect, an honest expression of incredulity. If you are poor, why do you spend money on useless status symbols like handbags and belts and clothes and shoes and televisions and cars?

One thing I’ve learned is that one person’s illogical belief is another person’s survival skill. And nothing is more logical than trying to survive.

My family is a classic black American migration family. We have rural Southern roots, moved north and almost all have returned. I grew up watching my great-grandmother, and later my grandmother and mother, use our minimal resources to help other people make ends meet. We were those good poors, the kind who live mostly within our means. We had a little luck when a male relative got extra military pay when they came home a paraplegic or used the VA to buy a Jim Walter house (pdf). If you were really blessed when a relative died with a paid up insurance policy you might be gifted a lump sum to buy the land that Jim Walters used as collateral to secure your home lease. That’s how generational wealth happens where I’m from: lose a leg, a part of your spine, die right and maybe you can lease-to-own a modular home.

We had a little of that kind of rural black wealth so we were often in a position to help folks less fortunate. But perhaps the greatest resource we had was a bit more education. We were big readers and we encouraged the girl children, especially, to go to some kind of college. Consequently, my grandmother and mother had a particular set of social resources that helped us navigate mostly white bureaucracies to our benefit. We could, as my grandfather would say, talk like white folks. We loaned that privilege out to folks a lot.

I remember my mother taking a next door neighbor down to the social service agency. The elderly woman had been denied benefits to care for the granddaughter she was raising. The woman had been denied in the genteel bureaucratic way — lots of waiting, forms, and deadlines she could not quite navigate. I watched my mother put on her best Diana Ross “Mahogany” outfit: a camel colored cape with matching slacks and knee high boots. I was miffed, as only an only child could be, about sharing my mother’s time with the neighbor girl. I must have said something about why we had to do this. Vivian fixed me with a stare as she was slipping on her pearl earrings and told me that people who can do, must do. It took half a day but something about my mother’s performance of respectable black person — her Queen’s English, her Mahogany outfit, her straight bob and pearl earrings — got done what the elderly lady next door had not been able to get done in over a year. I learned, watching my mother, that there was a price we had to pay to signal to gatekeepers that we were worthy of engaging. It meant dressing well and speaking well. It might not work. It likely wouldn't work but on the off chance that it would, you had to try. It was unfair but, as Vivian also always said, “life isn’t fair little girl.”

I internalized that lesson and I think it has worked out for me, if unevenly. A woman at Belk’s once refused to show me the Dooney and Burke purse I was interested in buying. Vivian once made a salesgirl cry after she ignored us in an empty store. I have walked away from many of hotly desired purchases, like the impractical off-white winter coat I desperately wanted, after some bigot at the counter insulted me and my mother. But, I have half a PhD and I support myself aping the white male privileged life of the mind. It’s a mixed bag. Of course, the trick is you can never know the counterfactual of your life. There is no evidence of access denied. Who knows what I was not granted for not enacting the right status behaviors or symbols at the right time for an agreeable authority? Respectability rewards are a crap-shoot but we do what we can within the limits of the constraints imposed by a complex set of structural and social interactions designed to limit access to status, wealth, and power.

I do not know how much my mother spent on her camel colored cape or knee-high boots but I know that whatever she paid it returned in hard-to-measure dividends. How do you put a price on the double-take of a clerk at the welfare office who decides you might not be like those other trifling women in the waiting room and provides an extra bit of information about completing a form that you would not have known to ask about? What is the retail value of a school principal who defers a bit more to your child because your mother’s presentation of self signals that she might unleash the bureaucratic savvy of middle class parents to advocate for her child? I don’t know the price of these critical engagements with organizations and gatekeepers relative to our poverty when I was growing up. But, I am living proof of its investment yield.

Why do poor people make stupid, illogical decisions to buy status symbols? For the same reason all but only the most wealthy buy status symbols, I suppose. We want to belong. And, not just for the psychic rewards, but belonging to one group at the right time can mean the difference between unemployment and employment, a good job as opposed to a bad job, housing or a shelter, and so on. Someone mentioned on twitter that poor people can be presentable with affordable options from Kmart. But the issue is not about being presentable. Presentable is the bare minimum of social civility. It means being clean, not smelling, wearing shirts and shoes for service and the like. Presentable as a sufficient condition for gainful, dignified work or successful social interactions is a privilege. It’s the aging white hippie who can cut the ponytail of his youthful rebellion and walk into senior management while aging black panthers can never completely outrun the effects of stigmatization against which they were courting a revolution. Presentable is relative and, like life, it ain’t fair.

In contrast, “acceptable” is about gaining access to a limited set of rewards granted upon group membership. I cannot know exactly how often my presentation of acceptable has helped me but I have enough feedback to know it is not inconsequential. One manager at the apartment complex where I worked while in college told me, repeatedly, that she knew I was “Okay” because my little Nissan was clean. That I had worn a Jones of New York suit to the interview really sealed the deal. She could call the suit by name because she asked me about the label in the interview. Another hiring manager at my first professional job looked me up and down in the waiting room, cataloging my outfit, and later told me that she had decided I was too classy to be on the call center floor. I was hired as a trainer instead. The difference meant no shift work, greater prestige, better pay and a baseline salary for all my future employment.

I have about a half dozen other stories like this. What is remarkable is not that this happened. There is empirical evidence that women and people of color are judged by appearances differently and more harshly than are white men. What is remarkable is that these gatekeepers told me the story. They wanted me to know how I had properly signaled that I was not a typical black or a typical woman, two identities that in combination are almost always conflated with being poor.

I sat in on an interview for a new administrative assistant once. My regional vice president was doing the hiring. A long line of mostly black and brown women applied because we were a cosmetology school. Trade schools at the margins of skilled labor in a gendered field are necessarily classed and raced. I found one candidate particularly charming. She was trying to get out of a salon because 10 hours on her feet cutting hair would average out to an hourly rate below minimum wage. A desk job with 40 set hours and medical benefits represented mobility for her. When she left my VP turned to me and said, “did you see that tank top she had on under her blouse?! OMG, you wear a silk shell, not a tank top!” Both of the women were black.

The VP had constructed her job as senior management. She drove a brand new BMW because she, “should treat herself” and liked to tell us that ours was an image business. A girl wearing a cotton tank top as a shell was incompatible with BMW-driving VPs in the image business. Gatekeeping is a complex job of managing boundaries that do not just define others but that also define ourselves. Status symbols — silk shells, designer shoes, luxury handbags — become keys to unlock these gates. If I need a job that will save my lower back and move my baby from medicaid to an HMO, how much should I spend signaling to people like my former VP that I will not compromise her status by opening the door to me? That candidate maybe could not afford a proper shell. I will never know. But I do know that had she gone hungry for two days to pay for it or missed wages for a trip to the store to buy it, she may have been rewarded a job that could have lifted her above minimum wage. Shells aren’t designer handbags, perhaps. But a cosmetology school in a strip mall isn’t a job at Bank of America, either.

At the heart of these incredulous statements about the poor decisions poor people make is a belief that we would never be like them. We would know better. We would know to save our money, eschew status symbols, cut coupons, practice puritanical sacrifice to amass a million dollars. There is a regular news story of a lunch lady who, unbeknownst to all who knew her, died rich and leaves it all to a cat or a charity or some such. Books about the modest lives of the rich like to tell us how they drive Buicks instead of BMWs. What we forget, if we ever know, is that what we know now about status and wealth creation and sacrifice are predicated on who we are, i.e. not poor. If you change the conditions of your not-poor status, you change everything you know as a result of being a not-poor. You have no idea what you would do if you were poor until you are poor. And not intermittently poor or formerly not-poor, but born poor, expected to be poor and treated by bureaucracies, gatekeepers and well-meaning respectability authorities as inherently poor. Then, and only then, will you understand the relative value of a ridiculous status symbol to someone who intuits that they cannot afford to not have it.

Source / tressiemc

Thanks to Alan Brodrick / Fluxed Up World

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Monday, July 29, 2013

A Great Transition for Humanity: Moving Away from Money


Source / YouTube

Fluxed Up World

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Wednesday, July 18, 2012

The New Company Store

The New Company Store: The Final Step in the Corporate Takeover of America
By John Atcheson / July 18, 2012

Well, here we are, slouching toward another national garage sale in which corporations bid on and buy candidates the way futures traders bid on commodities – or as our founders used to call it: an election.

As we go to the polls, it might be wise to remember the song Sixteen Tons. Here’s a few lines to refresh your memory:
Another Day Older and Deeper in Debt; and

St. Peter don’t you call me ‘cause I can’t come. I owe my soul to the Company Store.
The original version of the song was written by an ex-coal miner named George Davis and recorded on his album, When Kentucky Had No Union Men.

It is a song about the truck system, and debt bondage. Under this economic model, workers lived in houses owned by the company, shopped in stores owned by the company, and got paid in scrip minted by the company. And no matter how hard they worked, they remained indebted to the company.

The truck system survived in the US until the early 20th Century. This kind of abuse existed because government allowed it to. Then as now, wealth was highly concentrated and government was in the pocket of the plutocrats.

It came to an end with the passage of The National Industrial Recovery Act in 1933.

Since then, the US government and labor moved together to level the playing field for workers. The result was a steady increase in prosperity shared by all Americans.

That is, until about thirty years ago, when Reagan launched what has been a sustained assault on government.

Thanks to thirty years of Republican policies and Democratic complicity, we’re in the process of reopening the company store, only as with all things 21st Century, it’s a national chain.

Today, we shop with credit cards owned by “the company,” live in houses financed by “the company” – often owing more than the value of the home – and get our news and information from sources controlled by "the company." In short, the company store is back in business.

While Republicans and Tea partiers are all aflutter over government debt, Americans owe some $11.4 trillion in consumer debt. Talk about indentured. Seventy five per cent of us are held hostage to debt.

This spring student loan debt passed $1 trillion, and the average student now owes $25,000 upon graduating, And Congress passed a law making it almost impossible for students to escape this debt through bankruptcy. Right now, it’s far easier for a corporation to default on hundreds of millions of dollars in retirement and health benefits than it is for a student to escape a few thousand in student loan debt.

Congratulations, Grad, and welcome to the company store. Oh, but you corporations and fat cats? No worries. It’s business as usual – your McMansion is protected; you can still screw your employees with impunity.

So how did this happen? How did we once again become enslaved to a system which does not represent our interests; a system which benefits the 1% at our expense?

Well, not surprisingly, corporations and plutocrats used the tools of marketing to conduct a silent takeover of the country, imposing a tyranny far more severe than the imaginary government tyranny Tea-Partiers rail against.

They systematically “branded” the forces that were capable of constraining them while rebranding the very things that worked to enslave so many of us in times past.

Using repetition, metaphors and other figures of speech that form the basis of advertising, corporations and their conservative cronies – the real modern day Madmen – made people believe up was down and right was left. And because they were unopposed by the corporate owned media and the Democratic Party, they succeeded.

Government was branded as the problem, not the solution.

The private sector got branded as the solution, not the problem.

The same private sector that set up the company stores in the 18th and 19th Centuries until the government and unions put a stop to it.

“Liberal” became an epithet – something politicians ran screaming from, and something the people identified as evil, ineffective, elitist … even though, on an issue-by-issue basis, most Americans hold progressive views.

Socialism is now equivalent to Satan worship, and anything but wild, unconstrained capitalism has been branded as socialism – or gasp – even communism. Thus, regulations preventing the Company Store, or the rape of the Earth are seen as infringements on our freedom even though they apply mostly to corporate abuse. Plutocrats must get together at their secret meetings and howl with laughter at the rubes who screw themselves because they’re worried about their freedom, which -- thanks to the evisceration of government -- is now essentially the freedom to be exploited.

Exhibit A? “Keep your government hands off my Medicare.” Or take this gem: “Don’t steal from Medicare to Support Socialized Medicine.”

The result of this massive con? Income mobility in the United States has all but stalled, especially in States with Republican governors. Income disparity, on the other hand has exploded and the top 10% of Americans now control 75% of the wealth. The United States now ranks behind such luminary examples of shared prosperity as Cameroon and Iraq, according to the CIA.

So now, as corporations impose an economic tyranny not seen since the 19th and early 20th Century, many Americans are chasing ghosts ginned up by the corporations and their conservative political madmen.

Welcome to the New Company Store, now opening at a location near you.

[John Atcheson is author of the novel, A Being Darkly Wise, an eco-thriller and Book One of a Trilogy centered on global warming. His writing has appeared in The New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News and other major newspapers. Atcheson’s book reviews are featured on Climateprogess.org.]

Source / Common Dreams

Fluxed Up World

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Tuesday, April 17, 2012

The Juxtaposition of How It Should Be and How It Is

Former Costa Rican President Óscar Arias, 1987 Nobel Laureate, speaking for   
the Global Day of Action on Military Spending


Tax Day 2012

On April 17, 2012, your 2011 federal income tax return is due to the IRS. Where did the federal government spend your income taxes during fiscal year 2011?

Federal income tax revenues totaled around $1.13 trillion in fiscal 2011, and this chart shows exactly where the federal government spent each one of those dollars:

Click for larger image.


When you pay federal income taxes, the U.S. Treasury designates that money as “federal funds.” That means Congress and the president can spend that money on any government activity—and the chart above shows how they chose to spend federal funds in 2011.

This chart does not include your payroll taxes, also called Social Security and Medicare taxes, which are designated as “trust funds” and can only be used by the Treasury to fund those two programs. But as you can see from the chart above, some federal funds are also used to pay for Social Security and Medicare.

For More…

  • About how your own paycheck funds the federal budget, check out Taxes and Your Paycheck.
  • About how the federal government raises trillions of dollars in tax revenue each year, check out Federal Budget 101.
  • About the Bush-era tax cuts for the wealthiest Americans, check out CostofTaxCuts.com.

Source / National Priorities.Org
Video Source / Demilitarize.Org

Fluxed Up World

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Friday, April 13, 2012

Does Capitalism Actually Destroy Human Moral and Ethical Values?

Jeffrey Sachs: Wall Street Sense of Entitlement is Beyond Measure

Jeffrey Sachs in conversation at the Guardian Open Weekend. Professor Sachs talks about socio-economic psychology and the sense of entitlement exhibited by Wall Street bankers who, having been bailed out to the tune of $1tn after nearly destroying the world economy, then lobbied for no regulation.



Source / Common Dreams

Fluxed Up World

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Sunday, January 1, 2012

Our Current Economic Situation Is a Choice !!! And We Can Change the Choice If We Want


How We Got Here With the Economy and How to Get Out
By Robert Freeman / January 1, 2012

It’s easy to get fixated with small-bore issues on the economy, even if they don’t seem so small-bore at the time. Stimulus packages. Bailouts. Debt ceilings. Deficit commissions. Payroll tax-cut extensions. They seem like life and death issues while they’re being fought out.

But, in fact, they are distractions from the one real question that dominates all others, which is this: for whom should the economy be run? Should it be operated “to promote the general welfare” of 297 million people, the 99 percent? Or should it be run to benefit 3 million, the one percent?

Right now, the answer is that the economy is a machine, with the government as its operator, for transferring two hundred years of accumulated national wealth to those who are already the most wealthy, the one percent. And we should be clear about two things: this is a choice; and it’s working. The rich are getting much richer while everyone else is being stripped of their incomes, their assets, their retirement security, and all the elements of the social safety net enacted since the Great Depression.

Until we confront the fact that the collective impoverishment of the many for the selective enrichment of the few is a choice — the consequence of an explicit policy regime going back 30 years — nothing will change. But if we can muster the maturity to confront this fact, that we are here by choice, and find the courage to act on it, we might yet be able to save the country. If we do not, then we are surely lost.

To understand how we got here, we need to quickly review the economic history of the last sixty years. Then we can discuss what to do going forward.

At the end of World War II, the U.S. bestrode the world like a colossus. Its only industrial rival, Europe, had blown its brains out 30 years before, in World War I. And it did it again, in World War II, with Japan joining in. In the history of the world, there has never been such asymmetry in power between one country and all the rest.

It was U.S. capital that rebuilt its allies’ economies, through the Marshall Plan in Europe, and through military spending in Asia. U.S. factories boomed, to service not only its own vast and ravenous market, but those of all the rest of the world. All the equipment (and much of the food) to rebuild the industrial world came from America.

It was truly the Golden Age. There was enough wealth so that capital, labor, and government could all drink deeply from the seemingly inexhaustible spring of capitalism.

But by the 1960s something began to go wrong. Our allies’ economies had by then been rebuilt, and with the newest equipment and technologies. Theirs were more efficient than ours. The Volkswagens and Toyotas that would later become a tsunami began to trickle in. Same with the Sonys and Panasonics in consumer electronics. Shipbuilding, steel, machine tools, industrial electronics and other major industries began to migrate out of the U.S. and into the hands of foreign companies.

At the same time, the then-99% began to place serious claims on national resources, and to insist on being a player in major national decisions.

Johnson launched the Great Society program withthe goal of eradicating poverty. The women’s rights movement, the civil rights movement, the anti-Vietnam War movement, and the environmental movement all proved dramatically effective in redirecting national priorities and resources away from those favored by the wealthy elites and toward those of the rest of the people.

In other words, at exactly the time the profits of corporations were under assault by growing international competition, the people began to claim a greater share of society’s fruits. It couldn’t square. There was not enough output from the faltering economy to both satisfy people’s expectations of middle class affluence and economic security and capital’s demands for higher and higher returns. Something had to give.

Equally, the elites who had run the country for decades were indignant at the presumption of a mangy mob of un-bathed, pot-smoking, long-haired, bra-less, draft card-burning, tree-hugging hooligans who didn’t even have a job but wanted a seat at the table of national decision-making (sound familiar?). They were certainly never again going to allow such a scabrous cabal to decide that the country should not fight a major war (Vietnam) that was so enriching to the elites who had lied the country into it.

So the elites decided to take “their” country back.

The election of 1980 was the real watershed in modern American history. Ronald Reagan ran for president promising to cut taxes, increase military spending, and balance the budget — all at the same time. He called it “supply side economics.” His rival for the Republican nomination, George H.W. Bush, called it “voodoo economics” which, of course, it was. But people bought it and Reagan proceeded to rearrange economic power more substantially than at any time since Roosevelt enacted the New Deal.

Reagan cut marginal tax rates on the wealthy from 75% to 35%. At the same time, he dramatically increased military spending. The result was entirely predictable: with less money coming in but more going out, the government began to run massive deficits. Where Jimmy Carter’s worst deficit was $79 billion, Reagan was soon running deficits of $150 billion a year, year after year and increasing.

By 1992, the end of George H.W. Bush’s presidency, the annual deficit had reached $292 billion. In only 12 years, the supply side “revolution” had quadrupled the nation’s debt, from $1 trillion to $4 trillion. And this, in a time of peace and prosperity.

But that was always the hidden intention of supply side economics, to bind the nation to massive debts, debts from which it would never be released. Despite their sanctimonious pretenses, Republicans love debt because they are lenders. When there is more demand for debt, as when the government borrows hundred of billions of dollar a year, it commands a higher price, which is interest. This is simply supply and demand. And if you’re a lender, higher interest rates are better. This is why, even though Republicans controlled the White House for 26 of the past 40 years, they never once in any of those years produced a single balanced budget.

Clinton came to power in 1993 but proved an ambiguous leader, at least from standpoint of economics. He once described himself as “an Eisenhower Republican” which seems fair. He did raise marginal tax rates on the rich, but only from 36% to 39%. (They were at 75% under the real Eisenhower.) For this, he was pilloried as a socialist. Worse, after the fall of the Soviet Union he cut military spending as a percent of GDP to the lowest level since before Vietnam.

With lower military spending, slightly higher taxes on the rich, and a technology-driven economic boom, Clinton was able to pay down the deficits left to him by Bush I. By 1997, the government actually produced budgetary surpluses, the first since the 1960s. The consequence was a 40% fall in long term interest rates. Again, it was simply supply and demand. With less demand for borrowed money, rates fell.

This is the real reason Clinton was so relentlessly hounded by the right. It wasn’t because he was being serviced by a stalking intern, though he played into that one with astonishing recklessness. It was because he interfered with the three primary mechanisms for transferring wealth to the already-wealthy: tax cuts, massive military spending, and skyrocketing national debt.

The rest of Clinton’s economic legacy is far less positive. He pushed through NAFTA, pitting blue collar workers from the industrial Midwest against workers in Mexico making $1 an hour. He “ended welfare as we know it,” destroying an essential element of the social safety net. He enacted telecommunications “reform” that ended up as grotesque consolidation in the nation’s media, to where five companies now control more than 80% of the nation’s media.

But by far the most damaging of Clinton’s economic accomplishments was the deregulation of the finance industry. He overturned Glass-Steagall, the Depression-era law that separated commercial and investment banking. Together with his deregulation of derivatives, what Warren Buffet called “financial weapons of mass destruction,” this opened the economy to what would be the financial mad house of the first decade of the twenty-first century.

George W. Bush took office in 2001 and would serve the very wealthy in six important ways. First, he cut their taxes substantially, first in 2001 and again in 2003. Over their life, the Bush Tax Cuts for the top 1% will cost more than it would take to restore Social Security to solvency forever.

Second, he massively increased military spending with his fraudulently-justified and incompetently-prosecuted War in Iraq, and his equally-over-hyped and phony Global War on Terror.

As with Reagan, these two actions produced his third gift to his “base,” as he called the rich: massive deficits. He turned Clinton’s budget surpluses into deficits within one year. He would eventually double the national debt in only eight years, from $5.6 trillion to $12 trillion.

Fourth, he helped major industrial corporations move some seven million high paying manufacturing jobs out of the country, to low-wage countries where they could pay less for labor while putting downward pressure on American wages.

Fifth, he turned a blind eye as the financial industry carried out one of the greatest economic frauds in American history: the housing bubble.

Bush’s ideological soul-mate, Alan Greenspan, Chairman of the Federal Reserve, held interest rates at historically low levels to induce a boom in housing. This created illusory “wealth” that served to distract and pacify the working class as their jobs were being shipped overseas. He turned a blind eye to massive fraud in mortgage lending so that busboys, bartenders, gardeners, and day workers could buy homes they could never hope to afford. And he encouraged the securitzation of mortgages so that banks could offload the toxic sludge to unsuspecting buyers around the world. It was all so carefully engineered.

However, as had happened in the 1960s, something started to go wrong. Incomes began to fall as jobs were shipped overseas. The Iraq war caused oil prices to jump from $26 a barrel the day Bush took office to over $100 a barrel. It was a massive gain for the oil companies, his family’s business, but the inflationary effect coursed through everything in the economy. The busboys couldn’t make the notes on their houses, so started unloading them. But there were no “greater fools” left to buy them so prices started a downward avalanche which is still under way.

Since the height of the bubble in 2006, more than $8 trillion of housing wealth has been wiped out. Eleven million homes have been lost to foreclosure. More than one in four mortgages are underwater, with more owed on them than the home is worth. The share of home equity owned by homeowners themselves is now at the lowest level it has been since World War II. The balance has been transferred from the owners to the mortgage holders, the banks.

But the banks, in an almost psychotic orgy of greed, had leveraged their equity 30-to-1. They borrowed 30 dollars for every one dollar they held in capital. It makes for prodigious profits when prices are rising. If they go up only 3% (1/30) you double your investment! But if prices fall by 3%, your capital is wiped out. That is what actually happened. Housing prices, inflated far beyond what a rational market could bear, fell for the first time in American history. The banks went bankrupt. That was the financial collapse of late 2008.

Fortunately for the banks, Bush and his Treasury Secretary, Henry Paulson, formerly head of Goldman Sachs, were there to bestow the sixth and greatest gift on the wealthy: they bailed out the banks and their owners.

They arranged for the Treasury and the Federal Reserve to buy the banks’ toxic sludge so they wouldn’t have to take any losses on it. They paid 100 cents on the dollar for crap securities that that couldn’t fetch 20 cents on the dollar in open markets. They gave the banks trillions of dollars of loans at effectively no interest. And they allowed the banks to print trillions of dollars which they then used to inflate commodity and stock markets around the world, greatly enriching their wealthy owners.

What Bush and company didn’t do was require any givebacks from the banks. No equity. No firings. No changes in bonuses. No regulation of explosive derivatives. No restructuring of “too big to fail.” No settlements with consumers for intentionally defective mortgages. No re-investment in the economy they had plundered. And certainly, no prosecutions for any of the willful perpetrators of the Greatest Economic Collapse Since the Great Depression.

By 2009, Obama inherited an economy in free fall, for which he is perhaps owed some sympathy. But his policy responses have been inept at best, complicit at worst. He carried through with Bush’s bailout of the banks, passed phony “financial reform” which changed nothing, and studiously refused to prosecute any wrong-doing. He pushed through a tepid stimulus package where fully one third went to tax cuts for the wealthy. And he groveled to get a payroll tax cut that, in fact, does more to damage Social Security than anything any Republican president has ever managed.

In many other ways, however, he has proven to be Clinton II, or Bush III. He staffed his economic team with the very intellectual lights — Robert Rubin, Larry Summers, Tim Geithner, Ben Bernanke — who had engineered the Collapse, ensuring that capital’s right to pillage would not be qustioned. He went back on his word to fight for a public option that would have lowered the cost of health care insurance. He waved through the Bush tax cuts, not once but twice.

He never attempted anything so ambitious as a Rooseveltian jobs program. He made sure the Copenhagen climate talks failed so as to not burden American industrialists. He more than tripled Bush II’s deficits. And in his most damning assault on the economic security of more than 80 million Americans, he “put Social Security on the table” as part of his budget negotiations. With “friends” like this we should pray for enemies. At least we would know them for what they are.

Which brings us to today.

Over 56 million people are in poverty. The Census Bureau reports that half of all Americans (!) are in or near poverty. Almost 30% of those in the middle class have fallen out of it, and the rate of collapse is accelerating. A smaller share of men have jobs today than at any time since World War II. The past ten year’s wage gains have been the worst for any ten year period in the nation’s history, even worse than during the Great Depression.

The national debt that stood at $1 trillion when Reagan took office now exceeds $15 trillion. Debt as a percent of GDP is higher than it was in 1929, the year before the Great Depression. Meanwhile, corporate profits are at record highs, with corporations sitting on $2 trillion in cash, not investing it in the economy. They have $1.3 trillion parked in offshore tax havens like the Cayman Islands, out of reach of U.S. tax collectors.

Who could have imagined we could have fallen so far, and so quickly? Actually, in retrospect, it all makes sense. As wealth was steadily transferred upward and incomes were undermined, the damaging effects were masked by increased recourse to debt, both public and private. And the debt itself served to both accelerate and consolidate the transfer. But eventually the burden of payments became too much for an enfeebled workforce to carry and the whole thing came crashing down.

Any meaningful recovery will require a major investment by the federal government. The combination of lost incomes and lost consumer wealth have undercut the ability of consumers to generate demand, leaving the government as the only agent in the economy with the capacity to do the job. Clearly, private markets are not going to do it. Indeed, corporations have learned how to prosper mightily by crushing their American workers, a truly dysfunctional state of affairs that cannot stand.

The government should invest in the nation’s infrastructure which the American Society of Civil Engineers rates a “D”, down from “D+” only three years ago. This would employ potentially millions of now-unemployed workers, turning unemployment checks into tax payments to the Treasury. It would also bring the platform on which all the rest of the economy operates up to twenty-first century standards. Fortunately, the government can borrow long term at 2%, a fraction of the payback from such investments.

I’ve written elsewhere about a Manhattan Project-like investment in a green economy. Such an investment would revive employment, restore American competitiveness, help pay down the national debt, reduce our crippling dependency on middle east oil, and reduce carbon emissions into the environment. In all of these ways, it would be a win for virtually everybody in the economy, everybody in the nation, and for much of the planet.

I say “virtually” because it would not benefit those who have wrecked the economy and profited so mightily in the process: the money lenders, who would see less demand for borrowed money; the weapons makers, who would face a less hostile world; and the oil companies, whose crippling grip on the economy would be reduced. And we shouldn’t have any illusions about how hard these forces will fight to ensure that nothing changes. They will, and unless we fight back, well, nothing will change.

It is important to state once again that virtually all of the predation, all of the plunder of the last thirty years has been a policy choice, primarily enacted by Republicans, but more and more abetted by Democrats who have thrown in for a piece of the action. It’s also important to understand that nothing has changed in carrying out the agenda. Obama is as much about true “Hope” and “Change” as Bush was about “Compassionate Conservatism.” In fact, he and his wealthy masters are accelerating the looting.

Military spending is still growing at almost double digit rates after a decade of such increases. He is clearly going to put the knife into Social Security and Medicare when re-elected. He clearly has no plan, no “grand narrative” to restore the nation to prosperity. He clearly will not, can not, go after the banking industry, his biggest underwriter. And he gives all the signals of starting a war with Iran, which will make Iraq look like a silly child’s board-game gone awry.

The wealthy elites, fronted by Obama, have effectively abandoned the U.S. economy and the American people who are trapped inside. What this means is that the elections of 2012 are the last chance for the American people to reclaim their economic security, to fight off the neo-feudal servitude that is being foisted on them, and reclaim their political self-determination. As you can see from the above, most of the damage to the economy is the result of political decisions made to carry out nefarious economic ends. And they’ve worked.

We desperately need to elect a reliably progressive Congress to serve as an effective counterweight to the hopelessly corrupt, craven, and cowardly Obama and company. We need to demonstrate that it is people, not money, and not rigged voting machines, that still matter most in American elections. We need every man, woman, and child on deck with a sense of existential urgency that if we do not reclaim our country now, it will be lost forever. For it will.

In the American Revolution, Thomas Paine declared, “We have the chance to make the world anew.” He was thinking of the escape from the European world of economic feudalism, social privilege, and political autocracy. Today, we have one last chance to save that “new world” from the retrograde civilization it pulled itself out of, but whose claim on it has never been renounced.

If we can muster a Paine-like courage to fight and win this new Revolution, the Revolution to Save the Country, we shall be worthy of respect equal to that which we reserve for Paine and his fellow Founders. If we do not, we will get what we deserve. As with so much of the past thirty years, it’s our choice.
Robert Freeman

[Robert Freeman teaches history and economics at a public high school in northern California. He is the founder of One Dollar For Life, a national non-profit that helps American schools build schools in the developing world with donations of one dollar. He can be reached at robertfreeman10@yahoo.com.]

Source / Common Dreams

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Sunday, October 23, 2011

Harsh Realities for Us All: Just Since the Reagan Era Has Homelessness Become Illegal


Throw Them Out With the Trash: Why Homelessness Is Becoming an Occupy Wall Street Issue
By Barbara Ehrenreich / October 20, 2011

As anyone knows who has ever had to set up a military encampment or build a village from the ground up, occupations pose staggering logistical problems. Large numbers of people must be fed and kept reasonably warm and dry. Trash has to be removed; medical care and rudimentary security provided -- to which ends a dozen or more committees may toil night and day. But for the individual occupier, one problem often overshadows everything else, including job loss, the destruction of the middle class, and the reign of the 1%. And that is the single question: Where am I going to pee?

Some of the Occupy Wall Street encampments now spreading across the U.S. have access to Port-o-Potties (Freedom Plaza in Washington, D.C.) or, better yet, restrooms with sinks and running water (Fort Wayne, Indiana). Others require their residents to forage on their own. At Zuccotti Park, just blocks from Wall Street, this means long waits for the restroom at a nearby Burger King or somewhat shorter ones at a Starbucks a block away. At McPherson Square in D.C., a twenty-something occupier showed me the pizza parlor where she can cop a pee during the hours it’s open, as well as the alley where she crouches late at night. Anyone with restroom-related issues -- arising from age, pregnancy, prostate problems, or irritable bowel syndrome -- should prepare to join the revolution in diapers.

Of course, political protesters do not face the challenges of urban camping alone. Homeless people confront the same issues every day: how to scrape together meals, keep warm at night by covering themselves with cardboard or tarp, and relieve themselves without committing a crime. Public restrooms are sparse in American cities -- "as if the need to go to the bathroom does not exist," travel expert Arthur Frommer once observed. And yet to yield to bladder pressure is to risk arrest. A report entitled “Criminalizing Crisis,” to be released later this month by the National Law Center on Homelessness and Poverty, recounts the following story from Wenatchee, Washington:

"Toward the end of 2010, a family of two parents and three children that had been experiencing homelessness for a year and a half applied for a 2-bedroom apartment. The day before a scheduled meeting with the apartment manager during the final stages of acquiring the lease, the father of the family was arrested for public urination. The arrest occurred at an hour when no public restrooms were available for use. Due to the arrest, the father was unable to make the appointment with the apartment manager and the property was rented out to another person. As of March 2011, the family was still homeless and searching for housing."

What the Occupy Wall Streeters are beginning to discover, and homeless people have known all along, is that most ordinary, biologically necessary activities are illegal when performed in American streets -- not just peeing, but sitting, lying down, and sleeping. While the laws vary from city to city, one of the harshest is in Sarasota, Florida, which passed an ordinance in 2005 that makes it illegal to “engage in digging or earth-breaking activities” -- that is, to build a latrine -- cook, make a fire, or be asleep and “when awakened state that he or she has no other place to live.”

It is illegal, in other words, to be homeless or live outdoors for any other reason. It should be noted, though, that there are no laws requiring cities to provide food, shelter, or restrooms for their indigent citizens.

The current prohibition on homelessness began to take shape in the 1980s, along with the ferocious growth of the financial industry (Wall Street and all its tributaries throughout the nation). That was also the era in which we stopped being a nation that manufactured much beyond weightless, invisible “financial products,” leaving the old industrial working class to carve out a livelihood at places like Wal-Mart.

As it turned out, the captains of the new “casino economy” -- the stock brokers and investment bankers -- were highly sensitive, one might say finicky, individuals, easily offended by having to step over the homeless in the streets or bypass them in commuter train stations. In an economy where a centimillionaire could turn into a billionaire overnight, the poor and unwashed were a major buzzkill. Starting with Mayor Rudy Giuliani in New York, city after city passed “broken windows” or “quality of life” ordinances making it dangerous for the homeless to loiter or, in some cases, even look “indigent,” in public spaces.

No one has yet tallied all the suffering occasioned by this crackdown -- the deaths from cold and exposure -- but “Criminalizing Crisis” offers this story about a homeless pregnant woman in Columbia, South Carolina:

"During daytime hours, when she could not be inside of a shelter, she attempted to spend time in a museum and was told to leave. She then attempted to sit on a bench outside the museum and was again told to relocate. In several other instances, still during her pregnancy, the woman was told that she could not sit in a local park during the day because she would be ‘squatting.’ In early 2011, about six months into her pregnancy, the homeless woman began to feel unwell, went to a hospital, and delivered a stillborn child."

Well before Tahrir Square was a twinkle in anyone’s eye, and even before the recent recession, homeless Americans had begun to act in their own defense, creating organized encampments, usually tent cities, in vacant lots or wooded areas. These communities often feature various elementary forms of self-governance: food from local charities has to be distributed, latrines dug, rules -- such as no drugs, weapons, or violence -- enforced. With all due credit to the Egyptian democracy movement, the Spanish indignados, and rebels all over the world, tent cities are the domestic progenitors of the American occupation movement.

There is nothing “political” about these settlements of the homeless -- no signs denouncing greed or visits from leftwing luminaries -- but they have been treated with far less official forbearance than the occupation encampments of the “American autumn.” LA’s Skid Row endures constant police harassment, for example, but when it rained, Mayor Antonio Villaraigosa had ponchos distributed to nearby Occupy LA.

All over the country, in the last few years, police have moved in on the tent cities of the homeless, one by one, from Seattle to Wooster, Sacramento to Providence, in raids that often leave the former occupants without even their minimal possessions. In Chattanooga, Tennessee, last summer, a charity outreach worker explained the forcible dispersion of a local tent city by saying, “The city will not tolerate a tent city. That’s been made very clear to us. The camps have to be out of sight.”

What occupiers from all walks of life are discovering, at least every time they contemplate taking a leak, is that to be homeless in America is to live like a fugitive. The destitute are our own native-born “illegals,” facing prohibitions on the most basic activities of survival. They are not supposed to soil public space with their urine, their feces, or their exhausted bodies. Nor are they supposed to spoil the landscape with their unusual wardrobe choices or body odors. They are, in fact, supposed to die, and preferably to do so without leaving a corpse for the dwindling public sector to transport, process, and burn.

But the occupiers are not from all walks of life, just from those walks that slope downwards -- from debt, joblessness, and foreclosure -- leading eventually to pauperism and the streets. Some of the present occupiers were homeless to start with, attracted to the occupation encampments by the prospect of free food and at least temporary shelter from police harassment. Many others are drawn from the borderline-homeless “nouveau poor,” and normally encamp on friends’ couches or parents’ folding beds.

In Portland, Austin, and Philadelphia, the Occupy Wall Street movement is taking up the cause of the homeless as its own, which of course it is. Homelessness is not a side issue unconnected to plutocracy and greed. It’s where we’re all eventually headed -- the 99%, or at least the 70%, of us, every debt-loaded college grad, out-of-work school teacher, and impoverished senior -- unless this revolution succeeds.

[Barbara Ehrenreich, TomDispatch regular, is the author of Nickel and Dimed: On (Not) Getting By in America (now in a 10th anniversary edition with a new afterword).]

Source / TomDispatch

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Saturday, May 14, 2011

Wait a Minute -- Who Creates Those Jobs?


Actually, "the Rich" Don't "Create Jobs," We Do
By Dave Johnson / May 14, 2011

You hear it again and again, variation after variation on a core message: if you tax rich people it kills jobs. You hear about "job-killing tax hikes," or that "taxing the rich hurts jobs," "taxes kill jobs," "taxes take money out of the economy, "if you tax the rich they won't be able to provide jobs." ... on and on it goes. So do we really depend on "the rich" to "create" jobs? Or do jobs get created when they fill a need?

Here is a recent typical example, Obama Touts Job-Killing Tax Plan, written by a "senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth,"

Some people, in their pursuit of profit, benefit their fellow humans by creating new or better goods and services, and then by employing others. We call such people entrepreneurs and productive workers.

Others are parasites who suck the blood and energy away from the productive. Such people are most often found in government.

Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” ...

Producers and Parasites

The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people "produce" and are rich because they "produce." The rest of us are "parasites" who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just "the help" who are otherwise in the way, and taxing the producers to pay for our "entitlements." We "take money" from the producers through taxes, which are "redistributed" to the parasites. They repeat the slogan, "Taxes are theft," and take the "money we earned" by "force" (i.e. government.)

Republican Speaker of the House John Boehner echoes this core philosophy of "producers" and "parasites," saying yesterday,

I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.”

"The very people" who "hire people" shouldn't have to pay taxes because that money is then taken out of the productive economy and just given to the parasites -- "the help" -- meaning you and me...

So is it true? Do "they" create jobs? Do we "depend on" the wealthy to "create jobs?"

Demand Creates Jobs

I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people. What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go.

If I had extra money I wouldn't just hire people to sit around and read the paper. And if I had more customers than I could handle that -- the revenue generated by meeting the additional demand from the extra customers -- is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has.

If you ask around you will find that every business tries to employ the right number of people to meet the demand. Any business owner or manager will tell you that they hire based on need, not on how much they have in the bank. (Read more here, in last year's Businesses Do Not Create Jobs.)

Taxes make absolutely no difference in the hiring equation.

In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don't even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to "cover" your taxes. And even if you did lay people off to "cover' taxes it would lower your costs and you would have more profit, which means you would have more taxes... except that laying someone off when you had demand would cause you to have less revenue, ... and you see how ridiculous it is to associate taxes with hiring at all!

People coming in the door and buying things is what creates jobs.

The Rich Do Not Create Jobs

Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people, regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning.

When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going.

Democracy Creates Jobs

This idea that a few wealthy people -- the "producers" -- hand everything down to the rest of us -- "the parasites" -- is fundamentally at odds with the concept of democracy. In a democracy we all have an equal voice and an equal stake in how our society and our economy does. We do not "depend" on the good graces of a favored few for our livelihoods. We all are supposed to have an equal opportunity, and equal rights. And there are things we are all entitled to -- "entitlements" -- that we get just because we were born here. But we all share in the responsibility to cover the costs of democracy -- with the rich having a greater responsibility than the rest of us because they receive the most benefit from it. This is why we have "progressive taxes" where the rates are supposed to go up as the income does.

Taxes Are The Lifeblood Of Democracy And The Prosperity That Democracy Produces

In a democracy the rich are supposed to pay more to cover things like building and maintaining the roads and schools because these are the things that enable their wealth. They actually do use the roads and schools more because the roads enable their businesses to prosper and the schools provide educated employees. But it isn't just that the rich use roads more, it is that everyone has a right to use roads and a right to transportation because we are a democracy and everyone has the same rights. And as a citizen in a democracy you have an obligation to pay your share for that.

A democracy is supposed have a progressive tax structure that is in proportion to the means to pay. We do this because those who get more from the system do so because the democratic system offers them that ability. Their wealth is because of our system and therefore they owe back to the system in proportion. (Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections.)

The conservative "producer and parasite" anti-tax philosophy is fundamentally at odds with the concepts of democracy (which they proudly acknowledge - see more here, and here) and should be understood and criticized as such. Taxes do not "take money out of the economy" they enable the economy. The rich do not "create jobs," We, the People create jobs.

[Dave Johnson (Redwood City, CA) is a Fellow at Campaign for America's Future, writing about American manufacturing, trade and economic/industrial policy. He is also a Senior Fellow with Renew California. Dave has more than 20 years of technology industry experience including positions as CEO and VP of marketing. His earlier career included technical positions, including video game design at Atari and Imagic. And he was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.]

Source / Truthout

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Tuesday, May 3, 2011

Bernanke's Stock Market Blastoff (Bubblemania)


Hanky-Panky at the Fed: Grand Theft Benny
By Mike Whitney / May 1, 2011

It's the biggest flim-flam in the nation's history. But, thanks to the Congressional Research Service, the scam has been exposed and the public can now get a good look at the type of swindle that passes as monetary policy.

Here's the scoop: When Fed chairman Ben Bernanke initiated the first round of Quantitative Easing (QE), the stated goal was to revive the flagging housing market by purchasing $1.25 trillion in mortgage-backed securities (MBS) from the country's biggest banks. The policy was a ripoff from the get-go. No one wanted these mortgage stinkbombs that were stitched together from subprime loans to unqualified applicants. But because the banks were already busted--and because the $700 billion TARP was barely enough to keep the ventilator running until the next bailout came through-- the Fed helped to conceal its real objectives behind an elaborate PR smokescreen. In truth, the Fed must have colluded with the banks to move the toxic assets off their books (and onto the Fed's balance sheet) with the proviso that the banks withhold foreclosed homes from the market.

By keeping the extra homes off-market, supply went down, demand went up (slightly), and housing showed signs of a rebound. The withholding of supply was synchronized with the Firsttime Homebuyers credit, which provided an $8,000 subsidy to new home buyers. This pumped up housing sales and further concealed what was really taking place, which was a gigantic transfer of public wealth to the banks in exchange for putrid assets that no one wanted. Naturally, the process kept the market from correcting and added vast numbers of foreclosed homes to the shadow inventory.

During this same period, the Fed worked out an agreement with Congress to pay the banks interest on the reserves it created at the banks. (Note: The MBS were exchanged for reserves) At the time, many experts questioned the wisdom of the Fed's plan saying that the reserves would not lead to another credit expansion. And they were right, too. In fact, it didn't stop the slide in housing either which resumed with gusto as soon as QE ended and the banks started dumping more foreclosed homes onto the market.

So, why would the Fed add more than a trillion dollars in reserves to the banking system if it really served no earthly purpose? Was it just so the banks would be able to earn interest on those reserves? Surely, that wouldn't be nearly enough to remove the ocean of red ink on their balance sheets. So, what was Bernanke really up to?

On Tuesday, Senator Bernie Sanders office released a CRS report titled "Banks Play Shell Game with Taxpayer Dollars" that sheds a bit of light on the shady ways the Fed conducts its business. Sanders "found numerous instances during the financial crisis of 2008 and 2009 when banks took near zero-interest funds from the Federal Reserve and then loaned money back to the federal government on sweetheart terms for the banks."

So, now we have irrefutable proof that the Fed was simply handing out money to the banks. More importantly, the report shows that this was not just a few isolated incidents, but a pattern of abuse that increased as the needs of the banks became more pressing. In other words, giving away money became policy. Is it any wonder why the Fed has fought so ferociously to prevent an audit of its books?

From Sander's report: "The banks pocketed interest on government securities that paid rates up to 12 times greater than the Fed’s rock bottom interest charges, according to a Congressional Research Service analysis conducted for Sanders."

Are you kidding me; 12 times more than what the Fed was getting in return?

That's larceny, my friend. Grand larceny.

More from the Sanders report: “This report confirms that ultra-low interest loans provided by the Federal Reserve during the financial crisis turned out to be direct corporate welfare to big banks,” Sanders said. “Instead of using the Fed loans to reinvest in the economy, some of the largest financial institutions in this country appear to have lent this money back to the federal government at a higher rate of interest by purchasing U.S. government securities.”

And, what they didn't lend back to Uncle Sam at a hefty rate of interest, they plunked into equities to ignite Bernanke's Stock Market Blastoff, the final phase of bubblemania.

So, let's use an analogy to explain what the Fed was doing: Imagine that you provide your son, Kirby, with a weekly allowance of $50. And Kirby--showing an uncanny aptitude for career banking--says, "Dad, I'd like to loan this money back to you at 10 per cent per annum." Would that be a good deal for you, Dad, or would dearest Kirby be taking you to the cleaners?

That's what Bernanke was doing "at rates up to 12 times greater than the Fed’s rock bottom interest charges." So the question is, if Bernanke was already involved in this type of hanky-panky, what would keep him from raising the stakes a bit and really putting his friends back in the clover? Honor? Integrity?

Not likely.

What I'd like to know is whether the Fed has been creating reserves at the banks, reserves that the banks have then converted into government bonds (USTs) and sold back to the Fed during QE2? In other words, is this another circular trade (like we see in the Sanders report) whose only purpose is to funnel more money to the banks?

And--if that's NOT the case-- then where did the banks come up with $600 billion in US Treasuries that they just sold to the Fed? After all, in testimony before the Financial Crisis Inquiry Commission (FCIC), Bernanke admitted that 12 of the 13 biggest banks in the country were underwater after Lehman Brothers defaulted. If that's true, then where did they get the $600 billion in Treasuries?

It's not a question of whether the Fed has been abusing its power. It's just a matter of "how much".

[Mike Whitney lives in Washington state.]

Source / Counterpunch

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Wednesday, April 27, 2011

Morris: American Exceptionalism, Indeed


We're #1 -- Ten Depressing Ways America Is Exceptional
By David Morris / April 20, 2011

America is exceptional in the advantages we’ve had over other nations, not what we’ve done with those advantages.

Recent research contradicts the fundamental tenet of American exceptionalism. A Brookings Institution report comparing economic mobility in the United States and other countries concludes, "Starting at the bottom of the earnings ladder is more of a handicap in the United States than it is in other countries."

For Republican presidential candidates the phrase American Exceptionalism has taken on almost talismanic qualities. Newt Gingrich’s new book is titled, A Nation Like No Other: Why American Exceptionalism Matters. “American the Exceptional” is the title of a chapter in Sarah Palin’s book America by Heart.

And woe be to those who take issue with the phrase. 2008 Presidential candidate Mike Huckabee declares, “To deny American exceptionalism is in essence to deny the heart and soul of this nation.” 2012 Presidential candidate Mitt Romney insists, “The reorientation away from a celebration of American exceptionalism is misguided and bankrupt.”

What is this American exceptionalism Republicans so venerate? After interviewing many Republican leaders, Washington Post Reporter Karen Tumulty concludes it is the belief that America “is inherently superior to the world’s other nations”. It is a widely held belief. Indeed, most Americans believe our superiority is not only inherent but divinely ordained. A survey by the Public Religious Research Institute and the Brookings Institution found that 58 percent of Americans agree with the statement, “God has granted America a special role in human history.”

Let me make it clear at the outset. I too believe in American exceptionalism, although I don’t think God has anything to do with it. But I suspect my perspective will find little favor among Republicans in general and Tea Party members in particular. For I believe that America is exceptional in the advantages we’ve had over other nations, not what we’ve done with those advantages.

Indeed, to me there are two American exceptionalisms. One is the exceptionally favorable circumstances the United States found itself in at its founding and over its first 200 years. The second is the exceptional way in which we have squandered those advantages, in the process creating a value system singularly antagonistic to the changes needed when those advantages disappeared.

Americans did not become rich because of our rugged individualism or entrepreneurial drive or technical inventiveness. We were born rich. Ann Richards’ famous description of George Bush Sr. as an individual is equally applicable to the United States as a whole, “He was born on third base and thinks he hit a triple.”

When asked to identify the single most important difference between the Old and New World, renowned historian Henry Steele Commager responded, in the New World your baby survived. The New World had an abundance of cheap land which meant the New World, unlike the Old World, was largely populated by self-reliant property owners. Coupled with a moderate climate and rich soil, immigrants could grow all the food needed for their families, livestock and horses. There was plenty of clean water and sufficient free or low cost wood to build and heat one’s house.

The fact that Americans could choose to live on a farm also gave them significant bargaining power with employers. As a result wages in the New World were much higher than in the Old World.

The United States also benefited enormously from tens of millions of immigrants who, through a Darwinian-like process of natural selection, were among the most driven and entrepreneurial and hardy of their native countries. And on the dark side of the immigration picture, we also benefited immensely from millions of involuntary immigrants who provided an army of unpaid labor for southern plantations.

American exceptionalism must also include our unique advantage in having two oceans separating us from potential enemies. After 1815, no foreign troops ever again set foot on American soil. Indeed, America has benefited mightily from foreign wars. Arguably, the conflict between France and England had more to do with our winning independence than our own military efforts. In the first half of the 19th century, European wars led political leaders to peacefully sell huge quantities of land to the United States for a pittance (e.g. the Louisiana purchase of 1803 doubled the size of our infant nation).

A century later foreign wars again dramatically benefited the United States. “In the twentieth century the American economy was twice left undamaged and indeed enriched by war while its potential competitors were transformed into pensioner”, notes historian Godfrey Hodgson. After World War I the United States became the world’s creditor. After World War II Europe and Japan lay in ashes while the United States accounted for a full 40 percent of the world’s economy.

The list of exceptional advantages must also include our vast reserves of fossil fuels and iron ore. For our first 200 years we were self-sufficient in oil. Today we still export coal and are largely self-sufficient in natural gas.

Making a Sow’s Ear Out of a Silk Purse: The Culture Born of American Exceptionalism

Americans became the richest people on earth not because we were endowed with inherently superior national traits nor because we are God’s chosen people, nor because we have an elegant and compact Constitution and a noble sounding Declaration of Independence. We became rich because we were exceptionally lucky.

But the myth that we became richer than other countries because of our blessedness encouraged us to develop a truly exceptionalist culture, one that has left us singularly unequipped to prosper when our luck changed, when inexpensive land and energy proved exhaustible, when the best and the brightest in the world began staying at home rather than emigrating to our shores, when wars began to burden us and enrich our economic competitors.

The central tenet of that culture is a celebration of the “me” and an aversion to the “we”. When Harris pollsters asked US citizens aged 18 and older what it means to be an American the answers surprised no one. Nearly 60 percent used the word freedom. The second most common word was patriotism. Only 4 percent mentioned the word community.

To American exceptionalists freedom means being able to do what you want unencumbered by obligations to your fellow citizens. It is a definition of freedom the rest of the world finds bewildering. Can it be, they ask, that the quintessential expression of American freedom is low or no taxes and the right to carry a loaded gun into a bar? To which a growing number of Americans, if recent elections were any indication, would respond, “You’re damn right it is.”

Strikingly, Americans are not exceptional in our attitudes toward government. In a survey of 27 countries, two thirds of the respondents on both sides of the Atlantic answered yes to the following question, “Does the government control too much of your daily life? Is it usually inefficient and wasteful?”

What makes us exceptional is our response to the next question. “It is the responsibility of the government to reduce the difference in income”. Less than a third of Americans agreed while in 26 other countries more than two thirds did.

Citizens in other countries are as critical of their governments as we are. But unlike us they do not criticize the importance of government itself or the fundamental role it plays in boosting the general welfare. They do not like to pay taxes, but they understand the necessity of taxes not only in building a public infrastructure but also in building a personal security infrastructure.

Far more than other peoples, Americans believe that skill and hard work are the keys to success and wealth is a measure of how hard you work or how skilled you are. Which leads us to believe that people should have the right to amass as much wealth as they can and view a graduated income tax as a punitive penalty on success and a sturdy social safety net an invitation to slothfulness, reduced productivity and an overall slowdown in economic growth.

The expression, “The Nanny State” is singularly American. The expression “We’re all in this together”, while rhetorically still extant in the United States, less and less describes the values that motivate our policies.

In contrast, Europeans believe luck and circumstance are more important than hard work and skill and a sturdy social safety net is needed to help those who are unlucky. Acting on this principle, they have designed most of their social benefits to be universal, as have Canada and Japan, unlike here where residents have to prostrate themselves before bureaucrats to validate their penury before they are grudgingly doled out ever-smaller and temporary amounts of assistance.

One consequence of universality is that even while they complain about taxes, Europeans can point to many aspects of their lives where they directly and personally benefit from taxes (e.g. universal health insurance). Americans cannot.

For many Americans even means tested benefits are unwelcome. The term “welfare” is a pejorative a handout given to undeserving people who will use it in unworthy ways. Ronald Reagan’s lethal phrase “welfare Queen” accurately captured that mindset.

The new influence of Tea Party conservatives has taken this anti-social attitude a step further best reflected in the speeches of Representative Paul Ryan, Chairman of the House Budget Committee and made concrete in his recent budget. Ryan believes that helping the poor represents a “collectivist” philosophy. His heroine is Ayn Rand, the God of libertarians. He requires his staffers to read Rand’s novel, Atlas Shrugged and calls Rand “the reason I got involved in public service.”

Jonathan Chait sums up Rand’s moral philosophy, “The core of the Randian worldview, as absorbed by the modern GOP, is a belief that the natural market distribution of income is inherently moral, and the central struggle of politics is to free the successful from having the fruits of their superiority redistributed by looters and moochers.”

For Ayn Rand charity is not only unwelcome; it is evil.

Do not confuse altruism with kindness, good will or respect for the rights of others…The irreducible primary of altruism, the basic absolute, is self-sacrifice—which means; self-immolation, self-abnegation, self-denial, self-destruction—which means: the self as a standard of evil, the selfless as a standard of the good. Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. That is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime.

That value system is made explicit in Paul Ryan’s much publicized budget which would slash taxes on the rich by almost $3 trillion while cutting spending on the needy by almost that much.

The United States is also exceptional among industrialized nations not only in having by far the world’s most unequal income distribution but in believing that this inequality benefits us all, despite mountains of evidence to the contrary.

The data is crystal clear. Since 1980, the income share of the upper 1 percent of Americans has doubled. The share going to the top 0.1 percent, those earning more than $1.2 million a year, has quadrupled. Meanwhile the average worker’s wages have declined. In 2004 a full-time worker’s wage was 11 percent lower than in 1973, adjusting for inflation, even though productivity had risen 78 percent between 1973 and 2004.

In the last decade, while the top 1 percent of Americans saw their incomes rise, on average, by more than a quarter of a million dollars each, the average income of the bottom 90 percent of all working Americans actually declined.

To Republicans, inequality is unimportant because of another aspect of American exceptionalism, the unparalleled opportunity in the United States for those with ambition and grit to move up the economic ladder. They insist, and most of us firmly believe, that America is still the land of opportunity, that the probability of a rags to riches saga is much higher here than abroad.

But recent data contradicts that fundamental tenet of American exceptionalism. A Brookings Institution report comparing economic mobility in the United States and other countries concludes, "Starting at the bottom of the earnings ladder is more of a handicap in the United States than it is in other countries." And more broadly notes, "there is growing evidence of less intergenerational economic mobility in the United States than in many other rich industrialized countries.”

Another hobbling fundamental tenet of American exceptionalism is that we have nothing to learn from other countries. Why mess with God’s perfection? Back in the late 1980s I went to producers at Minneota’s public television station, TPT and proposed a show tentatively entitled, “What We Can Learn From Others”. They wondered what in the world I was smoking.

This sense of uniqueness has most clearly been reflected in our debates on national health care reform. In 1994 both the United States and Taiwan engaged in national debates about how their health care systems might be improved. To come up with the answers, Taiwan’s leaders visited about a dozen other countries to gain insights about the wide variety of existing national health system structures and used these insights to tailor a system adapted to their own needs. US leaders visited no other countries. The debate rarely even mentioned other countries except dismissively and usually inaccurately (e.g. Canadians cannot choose their own doctors). This occurred despite the overwhelming evidence that the US medical system is the most expensive, the least accessible and by many measures, one of the least well-performing of any in the industrialized world.

The 2009 debate over health reform took place as the United States economy collapsed, unemployment soared and foreclosures mushroomed. Yet there was virtually no discussion about the relationship of health care and personal financial adversity. A study by Steffie Woolhandler and colleagues at the Harvard Medical School done in 2007 revealed a remarkable statistic: 62 percent of US bankruptcies were a result of medical expenses. Equally damning, 75 percent of the people with a medically related bankruptcy had health insurance.

How does this woeful statistic compare to other countries? It is impossible to say because in other countries such a statistic would be a sign of gross irresponsibility and perhaps a societal breakdown. On Frontline, Washington Post veteran reporter T.R. Reid examined health systems around the world. In the process he interviewed the President of the Swiss Federation. Switzerland had dramatically changed its own health system in 1994 through a national referendum.

Reid: How many people in Switzerland go bankrupt because of medical bills?

Swiss President Pascal Couchepin: Nobody. It doesn't happen. It would be a huge scandal if it happens.

Conservatives proudly point to the Declaration of Independence as the foundational source of their guiding principles. “We hold these truths to be self-evident that all men are created equal that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

But American exceptionalism has bred a culture and value system that have in turn embraced policies that have made the pursuit of happiness exceedingly difficult.

More and more Americans are desperately trying to hold on. In an astonishing reversal of the first 200 years of American history when we were seen as perhaps the most optimistic of all peoples, we have become one of the most personally insecure.

To make up for the decline in wages, Americans are working longer hours and taking on more debt just to make ends meet. Today Americans are at work 4-10 weeks longer than their counterparts in Europe. Forty million Americans lack health insurance and tens of millions more have health insurance with limited coverage.

As I mentioned at the beginning of this article, at the founding of the American Republic a key difference between the Old World and the New World was that in the New World a baby survived. Today, the numbers paint a different picture. The proportion of infants that survive in the United States is one of the lowest in the industrialized world.

At the founding of the nation, access to low cost land transformed the United States into the first large nation in history populated principally by property owners. Since late 2007. however, there have been more than 7 million foreclosures in the United States and some predict another 2 million in 2011.

America has been and continues to be exceptional. At first we were exceptional because of circumstances that conferred on us enormous advantages over other nations. Today we are exceptional because of our culture, a culture born of our unusually fortunate history and now perhaps the single biggest handicap to our collective survival and prosperity in the less favorable circumstances of the 21st century.

We’re #1: Charting American Exceptionalism









[David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis, Minn., and director of its New Rules project.]

Source / Alternet

Thanks to David Hamilton / Fluxed Up World

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