GOP Spreads Corporate Tax Disinformation, America Fights Back By Allison Kilkenny / April 17, 2011
US Uncut launched another nationwide day of protest this week involving around forty participating chapters. The activism strategies again ranged from traditional protest to more creative forms of occupations such as San Francisco’s flash mob in a Bank of America.
This latest campaign follows a busy week for the fledgling organization. US Uncut, along with the Yes Men, have been at the center of the media’s attention following their successful pranktivist duping of the AP.
The anti-corporate tax dodging movement is growing momentum during a time when GOP leaders such as Eric Cantor, Michele Bachmann, and Tim Pawlenty propagate daily the lie that corporations are already overtaxed in America. While corporations claim they’re taxed at 35 percent, their actual effective tax rate is much, much lower after deductions, credits, and write-offs.
During the 1950s, the decade in which more people joined the middle class than at any time in history - before or since - corporations paid 49 percent of their profits in taxes. Last year, it was about half that rate, a decidedly more modest 26 percent. In 2010, corporate tax collections totaled $191 billion - down 8 percent from $207 billion as recently as 2000.
Perhaps a more telling yardstick, corporate tax revenue in 2009 came to just 1 percent of gross domestic product - the lowest collection level since 1936, or three-quarters of a century ago. In 2010, it edged up to a puny 1.3 percent - the second-lowest since 1940. Even worse, the shriveled tax collections came at a time when corporations were registering an all-time high in profits. At the end of 2010, corporations posted an annualized profit of $1.65 trillion in the fourth quarter. In other words, the more they made, the less they paid.
America has a revenue problem because of a two-tier taxation system that steals from the poor and offers corporate welfare to the rich. While tax evasion has always been an American business tradition, the practice has now reached frenzied proportions where the government is no longer simply turning a blind eye to the practice, but actively facilitating it.
The Fed gave hundreds of millions of dollars in taxpayer money to hedge funds and other investors with addresses in the Cayman Islands during the bailout. The addresses belong to companies with American affiliations like Pimco, Blackstone (Pete Peterson’s company that seeks to privatize Social Security,) and Waterfall TALF Opportunity, a company owned by Christy Mack, wife of John Mack, the chairman of Morgan Stanley. The government is now actively subsidizing tax evasion by using citizen dollars to fund corporate stealing for companies like Blackstone that seek to privatize Social Security, which would rob poor Americans of one of their last great social protections.
The legend of welfare kings and queens is true, but these societal parasites don’t live in the ghettos. They live in the Hamptons and on Wall Street. Many Americans now realize this and are beginning to fight back.
Thousands turned out this week to protest Gov. Rick Snyder’s budget cuts in Michigan.
"The script Gov. Snyder has written for his Republican cronies is not the kind of Michigan we want to live in," Herb Sanders of the American Federation of State, County and Municipal Workers told the crowd. "If the politicians won't listen to us at the Capitol, then we're prepared to take the fight to them in their home districts."
Sarah Palin graced Wisconsin with her presence for the sole purpose of stating approval of Gov. Scott Walker’s decision to strip unions of the right to collectively bargain. She was enthusiastically booed by a counter-protest, a response that so flustered right-wing mouthpiece Andrew Breitbart that he rushed the podium to scream “GO TO HELL!” at the crowd before encouraging a community that had organized the event to ironically applaud the death of community organizing.
Every week, there are more teacher and students protests opposing education cuts, labor protests demanding the right to collectively bargain (not the right to higher wages or safer working conditions, but the mere right to a seat at the table,) and more citizens gather to oppose the two-tier America where the poor suffer while rich corporations raid the Treasury.
US Uncut doesn’t plan to relent with its resistance any time soon. Another larger wave of action is planned for April 18, and so far more than 100 protests have been announced.
[Allison Kilkenny is the co-host of the progressive political podcast Citizen Radio (wearecitizenradio.com) and independent journalist who blogs at allisonkilkenny.com. Her work has appeared in The American Prospect, the L.A. Times, In These Times, Truthout and the award-winning grassroots NYC newspaper The Indypendent.]
THE FAT AND THE FURIOUS The top 1 percent may have the best houses, educations, and lifestyles, says the author, but “their fate is bound up with how the other 99 percent live.” Illustration by Stephen Doyle.
Inequality: Of the 1%, by the 1%, for the 1% By Joseph E. Stiglitz / May 2011
Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.
It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.
Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.
Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this.
First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. This new inequality goes on to create new distortions, undermining efficiency even further. To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.
Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.
None of this should come as a surprise—it is simply what happens when a society’s wealth distribution becomes lopsided. The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security—they can buy all these things for themselves. In the process, they become more distant from ordinary people, losing whatever empathy they may once have had. They also worry about strong government—one that could use its powers to adjust the balance, take some of their wealth, and invest it for the common good. The top 1 percent may complain about the kind of government we have in America, but in truth they like it just fine: too gridlocked to re-distribute, too divided to do anything but lower taxes.
Economists are not sure how to fully explain the growing inequality in America. The ordinary dynamics of supply and demand have certainly played a role: laborsaving technologies have reduced the demand for many “good” middle-class, blue-collar jobs. Globalization has created a worldwide marketplace, pitting expensive unskilled workers in America against cheap unskilled workers overseas. Social changes have also played a role—for instance, the decline of unions, which once represented a third of American workers and now represent about 12 percent.
But one big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy. Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride. Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Lax enforcement of anti-trust laws, especially during Republican administrations, has been a godsend to the top 1 percent. Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.
When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s—a scandal whose dimensions, by today’s standards, seem almost quaint—the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending. The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.
America’s inequality distorts our society in every conceivable way. There is, for one thing, a well-documented lifestyle effect—people outside the top 1 percent increasingly live beyond their means. Trickle-down economics may be a chimera, but trickle-down behaviorism is very real. Inequality massively distorts our foreign policy. The top 1 percent rarely serve in the military—the reality is that the “all-volunteer” army does not pay enough to attract their sons and daughters, and patriotism goes only so far. Plus, the wealthiest class feels no pinch from higher taxes when the nation goes to war: borrowed money will pay for all that. Foreign policy, by definition, is about the balancing of national interests and national resources. With the top 1 percent in charge, and paying no price, the notion of balance and restraint goes out the window. There is no limit to the adventures we can undertake; corporations and contractors stand only to gain. The rules of economic globalization are likewise designed to benefit the rich: they encourage competition among countries for business, which drives down taxes on corporations, weakens health and environmental protections, and undermines what used to be viewed as the “core” labor rights, which include the right to collective bargaining. Imagine what the world might look like if the rules were designed instead to encourage competition among countries for workers. Governments would compete in providing economic security, low taxes on ordinary wage earners, good education, and a clean environment—things workers care about. But the top 1 percent don’t need to care.
Or, more accurately, they think they don’t. Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate.
In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses—will they be next? They are right to worry. These are societies where a minuscule fraction of the population—less than 1 percent—controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.
As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.
Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.
The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.
The New American Dream By William Rivers Pitt / 31 March 2011
If you are wealthy, you are living in the Golden Age of your American Dream, and it's a damned fine time to be alive. The two major political parties are working hammer and tong to bless you and keep you. The laws are being re-written - often by fiat, and in defiance of court orders - to strengthen the walls separating you and your wealth from the motley masses. Your stock portfolio, mostly made by and for oil and war, continues to swell. Your banks and Wall Street shops destroyed the economy for everyone except you, and not only did they get away with it, they were handed a vast dollop of taxpayer cash as a bonus prize.
The little people probably crack you up when you bother to think about them. Their version of the American Dream is a ragged blanket too short to cover them, but they still buy into it, and that's the secret of your strength in the end. So many of them walk into the voting booths and solemnly vote against their own best interests, and for yours, because the American Dream makes them think they, too, will be rich someday. They won't - you've made sure of that - but so long as they keep believing it, your money will continue to roll in.
The Citizens United Supreme Court decision swept away the last tattered shreds of the façade of fairness in politics and electioneering, and now you own the whole store. You can use your vast financial resources to lie on a national level now, lie with your bare face hanging out, because it works. You're not the bad guy in America. Teachers, cops, firefighters, union members and public-sector employees are the bad guys, the reason for all our economic woes. NPR and Planned Parenthood are the bad guys. You did that, and when governors like Scott Walker rampage through worker's rights on your dime, you chuckle into your sleeve and enjoy your interest rate.
We're firing teachers and missiles simultaneously, to poach a line from Jon Stewart, and the inherent disconnect fails to sink in among those serving as dray horses for your greed and ambition. They're in the traces, bellowing about what you want them to focus on thanks to your total control of the "mainstream" news media, and they plow your fields with the power of their incoherent, misdirected rage.
They pay their taxes. Isn't that a hoot? They pay their taxes dutifully and annually, and that money gets shunted right to you and your friends, thanks to the politicians who love you and the laws that favor you, not to mention the wars that sustain you. They pay their taxes when they should just pay you, right? Talk about getting rid of government waste. They should just pay you directly and cut out the middle man, because it all goes to the same place in the end. You.
You are General Electric, and you paid no taxes in 2010. You made $14.2 billion in worldwide profits, $5.1 billion of which was made in America, and your tax burden amounted to a big fat zero. In fact, you claimed a tax benefit of $3.2 billion, thanks to your anti-tax lobbying efforts in Washington and your use of offshore tax havens that protect and defend your profit margin.
You are ExxonMobil, and you paid no taxes in 2009. In fact, you got a $156 million return.
You are Bank of America, and despite receiving a massive chunk of the taxpayer-funded bailout, despite recording a profit of $4.4 billion, you paid no taxes and received a $1.9 billion rebate.
You are Chevron, and you made $10 billion in 2009. You paid no taxes, and got a $19 million refund.
You are Citigroup, and you paid no taxes despite earning more than $4 billion, and despite getting a sizeable chunk of the taxpayer-funded bailout.
Your favorite part of it all?
The part that makes you laugh out loud?
It's when you hear the politicians you own talk about "shared sacrifices" and "fiscal responsibility." Man, that's a hoot. You watch them rave and froth on Capitol Hill about shutting down the government because the country doesn't have enough money to fund "entitlement programs" the little people have been paying into for decades. The very term - "entitlement" - cracks you up; how is it an entitlement if people paid for it? Nobody asks that question, of course. Nobody asks about cutting the bloated defense budget. Nobody asks where the billions diverted to Iraq and Afghanistan actually went, or where the money for Libya is going. For damned sure, nobody demands that you pony up and pay your fair share. You made sure of that, and the show goes on.
The United States of America has undergone a powerful transformation over the course of a single generation, and you are right up there in the catbird seat, watching it all unfold. For you, the New American Dream is "I got mine, kiss my ass, work and die (if you can find work, sucker), and pay me." For everyone else, the New American Dream is about simple survival, about running as fast as they can while going inexorably backwards.
Maybe you can even see the cancer eating away at the country that has treated you so royally, but you don't really care. You are safe and comfortable behind your gilded walls.
To Nicholas Kristof and other lousy Western liberals who call for invading Libya and starving its people. Photo source: Angry Arab News Service.
A People Betrayed: West Launches New War for Oil in Libya By Chris Floyd / March 18, 2011
And so now, another war. Led by the United States and the religious extremists in Saudi Arabia, the UN Security Council voted to intervene on behalf of one side in the Libyan civil war. Having already armed and trained Moamar Gadafy's armies and security forces, the Western war-profiteers have now decided to do the same for his opponents.
These opponents, it must be noted, are at present led by top players who only weeks ago were at the center of Gadafy's murderous, repressive regime -- which was itself, only weeks ago, considered a worthy partner by Western governments and business interests. As As'ad AbuKhalil -- a fierce critic of Gadafy for many years -- noted today, before the UN vote:
The Libyan people have been betrayed. Their revolution against the Libyan tyrant has been hijacked by US and Saudi Arabia. That lousy henchman for Qadhdhafi, Mustafa Abd-Al-Jali [leader of the rebel's Libyan National Transition Council], is now a Saudi stooge who hijacked the uprising on behalf of a foreign agenda. I mean, what do you expect from a man who until the other day held the position of Minister of Justice in Qadhdhafi's regime, for potato's sake? And don't you like it when Western media constantly refer to him as "the respected Libyan minister of Justice." Respected by who? By Western governments.
It should also be noted that the Saudis are even now staging a military intervention in Bahrain to help the autocratic regime there put down -- with deadly force and brutal repression -- a peaceful resistance movement seeking democracy and justice. "“We want to support the opposition who are standing against the dictator,” Hillary Clinton declared today. But she was talking about the dictator in Libya, not the dictator in Bahrain, who has willingly turned his country into a fueling station for the projection of American dominance in the Middle East.
Finally, it should be noted that the UN Resolution is not in any way restricted to establishing a "no-fly zone" to keep Gadafy from bombing Libyan cities. This has been the holy grail of our humanitarian interventionists who, despite the evidence of their own eyes over several decades, still seem to believe that military action -- the application of massive, violent force -- can be done without hurting anybody but the mean old bad guys whom we suddenly don't like anymore for whatever reason.
But this is no "light touch" intervention. The UN decree greenlights everything short of an outright land invasion of Libya. Indeed, within minutes of the resolution's passing, American officials were already talking about a "no-drive zone": direct attacks on Libyan tanks and artillery. What's more, US officials were already considering sending in "military personnel to advise and train the rebels."
AbuKhalil also points us to this article by Michael Brull of Independent Australian Jewish Voices. The piece, which also came out before the UN vote, is worth quoting at length:
When asking what should the West do, it seems to skirt over what it can and ought to do. A no-fly zone in Libya is a drastic step, with dubious popular support at best, and little evidence has been presented that it would help anyone in Libya. On the other hand, there are places where we could more easily impose a no-fly zone. For example, Hamid Karzai has been begging us to stop bombing Afghanistan for years. We could impose a no-fly zone by ending our bombardment, which would also stop us from killing more civilians.
We could also stop bombing Yemen, which WikiLeaks reveals we’d been doing, and lying about. We could end the drone attacks on Pakistan. WikiLeaks shows that president Zardari thinks “Collateral damage worries you Americans. It doesn’t worry me”. Plainly, it doesn’t worry us either. Over a thousand people have been killed, primarily civilians. Yet again, in this case, the evil isn’t so bad that the West is called upon to intervene. The reason is straightforward: intervening would mean stopping our crimes, and it is considered far more morally courageous in the West to call for an end to their crimes. ....
The point of all this: we in the West should not be wringing our hands over what to do. There is plenty of good we can do. We could withdraw support for dictatorships in the Middle East, end support for repression in Bahrain, Yemen, Saudi Arabia and elsewhere, end our occupation of Afghanistan, stop drone attacks in Pakistan, and withdraw military support from Israel, which is used to brutalise and oppress the Palestinians.
However, there are (as always) those who say what is happening in Libya is evil. We must do something. Surprisingly it has come most strongly from the Left, against the Left, in the form of Guy Rundle. He describes the request for a no-fly zone “from a legitimate revolutionary leadership”.
Who’s that? The Libyan National Transition Council. He admits its “composition of ex-Gaddafi ministers and others... But that's not important”. As’ad AbuKhalil, a columnist with the left-wing Lebanese paper Al-Akhbar, describes its leader Mustafa Abd-Al-Jalil as “a Gaddafi stooge”. He, along with other Gaddafi appointees leads “an Islamist tendency in the opposition movement which stands opposed to the more secular and radical trend represented by the professional association of the lawyers for example, and which-unlike Abdul-Al-Jalil refuses the secret messaging with the Gaddafi junta”.
What popular legitimacy does this Council have? It doesn’t matter to Rundle. Anyone who doesn’t support it doesn’t “have solidarity with the Libyans but will simply watch passively and let them be defeated, and then murdered”....
I guess we have no choice, right? After all, surely we in the West can’t just sit by and let evil happen. We have a responsibility to intervene. Anyone who cares will if necessary support an invasion of Libya, otherwise they don’t have solidarity with the Libyans but will simply watch passively and let them be defeated, and then murdered.
Just be sure to avert your gaze from Bahrain, Yemen, Morocco, Saudi Arabia, Jordan, Pakistan, Palestine, Afghanistan, Honduras, Haiti and any other country where we are already intervening, but on the wrong side.
Today Hillary Clinton decried the "terrible things" that Gadafy will do "to Libya and its neighbors." And why will he do this? Because he is, of course, a monster: "It's just in his nature. There are some creatures that are like that."
But this creature has now spent the past several years as a staunch ally of the West, especially in the "counterterrorism" fight. The Americans and the British have given him arms, training, equipment, expertise and other support. (Just as they did, for years, with Saddam Hussein.) He was precisely the same "creature" then as he is now. Western elites knew that Gadafy had done "terrible things to Libya and its neighbors" for years before they embraced him -- and his oil money --- with open arms. None of this bothered them before.
But now that Gadafy is doing exactly what the United States government would do if an armed faction took over whole swathes of its territory -- respond with furious, murderous force -- he has suddenly become a monster again.
Luckily for Washington, the Libyan opposition -- "the more secular and radical trend represented by the professional associations" noted by AbuKhalil -- has, as he said, been hijacked by ex-Gadafy goons and Saudi tools who will now, with the West's military intervention, avidly seek to provide the same kind of profitable "stability" in Libya that we see in such wondrous beacons of democracy and enlightenment as Bahrain.
What forces will now be loosed in Libya in the chaos, corruption, hatred, fear and corruption that invariably attends these "humanitarian interventions"? Iraq and Afghanistan give us ample warning.
Julian Assange, the founder of the WikiLeaks anti-secrecy group, speaks to the press. Photo: Andrew Testa/The New York Times.
How the So-Called Guardians of Free Speech Are Silencing the Messenger By John Pilger / March 12, 2011
As the United States and Britain look for an excuse to invade another oil-rich Arab country, the hypocrisy is familiar. Colonel Gaddafi is "delusional" and "blood-drenched" while the authors of an invasion that killed a million Iraqis, who have kidnapped and tortured in our name, are entirely sane, never blood-drenched and once again the arbiters of "stability."
But something has changed. Reality is no longer what the powerful say it is. Of all the spectacular revolts across the world, the most exciting is the insurrection of knowledge sparked by WikiLeaks. This is not a new idea. In 1792, the revolutionary Tom Paine warned his readers in England that their government believed that "people must be hoodwinked and held in superstitious ignorance by some bugbear or other." Paine's "The Rights of Man" was considered such a threat to elite control that a secret grand jury was ordered to charge him with "a dangerous and treasonable conspiracy." Wisely, he sought refuge in France.
The ordeal and courage of Paine is cited by the Sydney Peace Foundation in its award of Australia's human rights gold medal to Julian Assange. Like Paine, Assange is a maverick who serves no system and is threatened by a secret grand jury, a malicious device long abandoned in England, but not in the United States. If extradited to the US, he is likely to disappear into the Kafkaesque world that produced the Guantanamo Bay nightmare and now accuses Bradley Manning, WikiLeaks' alleged whistleblower, of a capital crime.
Should Assange's current British appeal fail against his extradition to Sweden, he will probably, once charged, be denied bail and held incommunicado until his trial in secret. The case against him has already been dismissed by a senior prosecutor in Stockholm and given new life only when a right-wing politician, Claes Borgstrom, intervened and made public statements about Assange's "guilt." Borgstrom, a lawyer, now represents the two women involved. His law partner is Thomas Bodstrom, who, as Sweden's minister for justice in 2001, was implicated in the handover of two innocent Egyptian refugees to a CIA kidnap squad at Stockholm airport. Sweden later awarded them damages for their torture.
These facts were documented in an Australian parliamentary briefing in Canberra on 2 March. Outlining an epic miscarriage of justice threatening Assange, the enquiry heard expert evidence that, under international standards of justice, the behavior of certain officials in Sweden would be considered "highly improper and reprehensible [and] preclude a fair trial." A former senior Australian diplomat, Tony Kevin, described the close ties between the Swedish Prime Minister Frederic Reinfeldt and the Republican right in the US. "Reinfeldt and [George W] Bush are friends," he said. Reinfeldt has attacked Assange publicly and hired Karl Rove, the former Bush crony, to advise him. The implications for Assange's extradition to the US from Sweden are dire.
The Australian enquiry was ignored in the UK, where black farce is currently preferred. On 3 March, The Guardian UK announced that Stephen Spielberg's Dream Works was to make "an investigative thriller in the mould of All the President's Men" out of the book "WikiLeaks: Inside Julian Assange's War on Secrecy." I asked David Leigh, who wrote the book with Luke Harding, how much Spielberg had paid The Guardian UK for the screen rights and what he expected to make personally. "No idea," was the puzzling reply of The Guardian UK's "investigations editor." The Guardian UK paid WikiLeaks nothing for its treasure trove of leaks. Assange and WikiLeaks - not Leigh or Harding - are responsible for what The Guardian UK's editor, Alan Rusbridger, calls "one of the greatest journalistic scoops of the last 30 years."
The Guardian UK has made clear it has no further use for Assange. He is a loose cannon who does not fit Guardian-world, who proved a tough, unclubbable negotiator. And brave. In The Guardian UK's self-regarding book, Assange's extraordinary bravery is excised. He becomes a figure of petty bemusement, an "unusual Australian" with a "frizzy-haired" mother, gratuitously abused as "callous" and a "damaged personality" that was "on the autistic spectrum." How will Spielberg deal with this childish character assassination?
On the BBC's "Panorama," Leigh indulged hearsay about Assange not caring about the lives of those named in the leaks. As for the claim that Assange had complained of a "Jewish conspiracy," which follows a torrent of Internet nonsense that he is an evil agent of Mossad, Assange rejected this as "completely false, in spirit and word."
It is difficult to describe, let alone imagine, the sense of isolation and state of siege of Assange, who, in one form or another, is paying for tearing aside the façade of rapacious power. The canker here is not the far right, but the paper-thin liberalism of those who guard the limits of free speech. The New York Times has distinguished itself by spinning and censoring the WikiLeaks material. "We are taking all [the] cables to the administration," said Bill Keller, the editor, "They've convinced us that redacting certain information would be wise." In an article by Keller, Assange is personally abused. At the Columbia School of Journalism on 3 February, Keller said, in effect, that the public could not be trusted with the release of further cables. This might cause a "cacophony." The gatekeeper has spoken.
The heroic Manning is kept naked under lights and cameras 24 hours a day. Greg Barns, director of the Australian Lawyers Alliance, says the fears that Assange will "end up being tortured in a high security American prison" are justified. Who will share responsibility for such a crime?
Protestors in Germany advocating for the Robin Hood Tax. Photo: Source.
Europe Takes the Lead in Drive to Tax Speculators By Sarah Anderson / March 10, 2011
There are still places in the world where folks from across the political spectrum can have a rational discussion about fair taxation.
High-speed rail, universal health care, quality cheese. Let's face it — the Europeans often leave us Yanks way behind. And now they appear on track again, with solid progress this week towards adopting an innovative proposal to pay for the costs of the global economic crisis.
On March 8, the European Parliament voted 360-299 in favor of introducing financial transactions taxes, tiny levies on trades of stocks, derivatives, currency, and other financial instruments. The proposal could generate an estimated $200 billion per year in revenue for European governments to channel into job creation and other urgent needs. At the same time, it would discourage the type of risky, short-term speculation that got us into this economic mess in the first place.
What's most astounding is that the tax proposal sailed through despite the European Parliament's strong right-wing majority. Yes, there are still places in the world where folks from across the political spectrum can have a rational discussion about fair taxation.
The vote came after more than a year of global advocacy by labor union, anti-poverty, environmental, and other citizens groups. On February 17, activists in 25 countries carried out a Global Day of Action. See this video and this map to get a sense of the breadth of this campaign, from Nepal to Mexico in the global South and from Canada to Japan in the North. German activists staged one of the most elaborate publicity stunts. They dressed up as glamorous Robin Hoods and Maid Marians to crash the Berlinale film festival, arriving in a white limousine and then parading down their own red carpet.
While the message seems to be getting through in Europe, U.S. activists have not had much luck. While not publicly offering much of an explanation, U.S. Treasury Secretary Timothy Geithner has reportedly consistently dismissed the idea at G-20 meetings. A WikiLeaks cable from 2009 revealed that then British Prime Minister Gordon Brown was deeply frustrated by Geithner's opposition.
This week's vote signaled that many key European leaders are no longer willing to let the Obama administration hold them back. The Parliament's resolution calls on the EU to adopt transactions taxes, regardless of whether the United States or other major economies take similar action.
On the bright side, the United States doesn't appear to be actively trying to block European progress. This is a pretty big deal, considering that President Barack Obama stacked his European embassies with former financial executives (e.g., former Citigroup Vice Chair Louis Susman in London and former Goldman Sachs executive Philip D. Murphy in Berlin) and the Wall Street lobby would no doubt love the administration's help in preventing what for them would be an unnerving precedent.
The campaign for Europe to pioneer financial transactions taxes is, however, far from over. The European Parliament has clout as a directly elected body, but it does not have binding authority over taxation matters. National governments will make the final decision, and while heavyweights Germany and France are strongly in favor, there are some problematic holdouts, namely Italy and the UK. The European Commission, the civil service for the EU, is also not yet convinced.
Nevertheless, according to Owen Tudor, Head of International Relations for the UK's Trade Union Confederation, the European Parliament vote broke a big logjam. One of the main obstacles, Tudor says, "has been the buck-passing of world leaders, who are always looking for someone else to make the first move, or for everyone else to agree before they will. Apart from the clear failure to understand what the word 'leader' actually means, this is almost always only an excuse for inaction, which lets the financial sector off the hook while public services are slashed, the poor get poorer and the world heats up."
More than 20 years after Europeans could zip along on bullet-speed trains, Americans are still stuck on bumpy railways or clogged freeways. The Obama administration recently announced plans to expand U.S. investment in high-speed rail. It's also high time for them to get on board the international campaign to tax the speculators, in part as a way to pay for things like transportation infrastructure. Otherwise, this could well be one more area where we'll be stuck in the slow lane for years to come.
On the Origin of Corporations By David Korten / March 7, 2011
Like many Americans, I grew up believing that conservative values were about local control and personal responsibility for family, community, and nature. It seemed curious to me that the political alliance that drove a rollback of the Roosevelt-era policies that created the American middle class called itself conservative and dismissed its liberal opponents as un-American.
Eventually, however, I discovered that the term conservative harkens back to a day when conservatives were monarchists who considered democracy a threat to social order and the seas were ruled by buccaneers and privateers. That was a clarifying moment.
Buccaneer is a colorful name for the pirates of old who pursued personal fortune with rules of their own making. They were, in their time, an iconic expression of “free market” capitalism.
Privateers were buccaneers to whom a king granted legal immunity and safe harbor in return for a share of the booty. Their charge was to extract physical wealth from foreign lands and peoples by whatever means—including the execution of rulers and the slaughter and enslavement of native inhabitants.
Hernán Cortés claimed the Mexican empire of Montezuma for Spain. Hernando de Soto made his initial mark trading slaves in Central America and later allied with Francisco Pizarro to take control of the Inca empire based in Peru.
Some privateers operated powerful naval forces. In 1671, Sir Henry Morgan (yes, appreciative British kings granted favored privateers with titles of nobility in recognition of their service) launched an assault on Panama City with thirty-six ships and nearly two thousand brigands, defeating a large Spanish force and looting the city as it burned to the ground. As with the buccaneers and privateers of days past, Wall Street’s major players find it more profitable to expropriate the wealth of others than to find honest jobs producing goods and services beneficial to their communities.
Eventually, the ruling monarchs turned from swashbuckling adventurers and chartered pirates to chartered corporations as their favored instruments of colonial expansion, administration, and pillage. The sale of public shares enabled a single firm to amass virtually unlimited financial capital and assured the continuity of the enterprise beyond the death of its founders. Limited liability absolved the owners of personal liability for the firm’s losses or misdeeds.
Corporations chartered by the British Crown established several of the earliest colonial settlements in what later became the United States and populated them with bonded laborers—many involuntarily transported from England—to work their properties. The importation of slaves from Africa followed.
The East India Company (chartered in 1600) was the primary instrument of Britain’s colonization of India, a country the company ruled until 1784 much as if it were a private estate. In the early 1800s, the East India Company established a thriving business exporting tea from China, paying for its purchases with illegal opium.
The Dutch East India Company (chartered in 1602) established its sovereignty over what is now Indonesia and reduced the local people to poverty by displacing them from their lands to grow spices for sale in Europe.
Roulette wheel, photo by John WardellBankers, Bookies, and Gamblers What is the proper role and social function of a bank? The answer starts with getting the question right.
It is no exaggeration to characterize these forerunners of contemporary publicly traded limited liability corporations as, in effect, legally sanctioned and protected crime syndicates with private armies and navies backed by a mandate from their home governments to extort tribute, expropriate land and other wealth, monopolize markets, trade slaves, deal drugs, and profit from financial scams.
Wall Street hedge fund managers, day traders, currency traders, and other unlicensed phantom-wealth speculators are the independent, unlicensed buccaneers of our day. Wall Street banks are modern day commissioned privateers who ply a similar trade with state backing and safe harbor. The economy is their ocean. Publicly traded corporations serve as their favored vessels of plunder, financial leverage is their favored weapon, and the state is their servant-guardian.
As with the buccaneers and privateers of days past, Wall Street’s major players find it more profitable to expropriate the wealth of others than to find honest jobs producing goods and services beneficial to their communities. They walk away with their fees, commissions, and bonus packages and leave it to others to pick up the costs of federal bailouts, gyrating economic cycles, collapsing environmental systems, broken families, shattered communities, and the export of jobs along with the manufacturing, technology, and research capacities that go with them.
They seek self-enrichment by plundering wealth they had no part in creating, enjoy substantial legal immunity, and acknowledge no duty or accountability other than to themselves. Legal or not, taking the property of another through deception, fraud, and expropriation is theft. Only tyrannies guarantee the liberty of the few to plunder the wealth of the many.
[David Korten (livingeconomiesforum.org) is the author of Agenda for a New Economy, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World. He is board chair of YES! Magazine and co-chair of the New Economy Working Group. This Agenda for a New Economyblog series is co-sponsored by CSRwire.com and YesMagazine.org based on excerpts from Agenda for a New Economy, 2nd edition.]
A Nation Stripped Bare: Fascism Has Come to America Written by Chris Floyd / March 5, 2011
It is a question that has sparked much debate, at least in certain rare quadrants where the unvarnished reality of the American imperium is recognized. But surely now the debate is over. Question it no more; the supposition, the fear, the heartbreaking intimation is a fact. It is real. It is here.
Fascism has come to America.
And no, it didn't come in jackboots. It didn't come in massed, marching ranks. It didn't come in greasy-haired frothers ranting on a stage.
It came with cool. It came with savvy. It came wearing the mask of past evils redeemed by the image of a persecuted minority elevated to power. It came spouting scripture, hugging bright children, quoting pop music, sporting pricey leisure threads.
It came on Facebook, it came with 269 cable channels blazing, with I-Pad apps offering Catholic confession and YouTube porn. It came with the Super Bowl, with de la Renta gowns on the Oscar carpet, with 36 brands of dips and chips on the bulging shelves of your local Wal-Mart.
It came right in the midst of your ordinary life, as you went to work -- or looked for work -- as you partied, as you courted, as you watched TV, as you worshiped, as you studied, as you played, as you went about the business of being human.
As you went about the business of being human, this inhuman thing has come. It has come in your name, wrapped in your flag, claiming your security as its raison d'etre.
And in the guise of a young, hip, educated progressive, it has just now declared that anyone who reveals any hidden evil committed by the fascist state is subject to prosecution for a capital crime. That's right. It has revealed that you -- you American citizen, you patriot, you believer in goodness and justice and genuine democracy -- you can be killed by the government if you tell the truth.
This is what the administration of President Barack Obama has demonstrated -- indeed, has proudly proclaimed -- in its treatment of the young man it is avowedly, openly torturing for telling the truth about American war crimes, Bradley Manning. There can be no mistaking the meaning, implications and import of Barack Obama's actions.
Corporal Bradley Manning has been charged with leaking "classified material," including a video posted on WikiLeaks that showed American forces gleefully shooting up Iraqi civilians with helicopter gunships. Manning is also alleged to have obtained thousands of other files detailing crimes, corruption, cover-ups, lies and deceit by American forces and American diplomats around the world.
Although American officials have repeatedly said that none of leaks attributed to Manning and to WikiLeaks have caused any bodily harm to any agent of American imperial power around the world, Manning is being accused of "threatening national security" and "aiding the enemy."
And who, pray tell, is the "enemy" being aided by the expression of truth? On Thursday, the Pentagon very helpfully spelled it out to the New York Times:
The charge sheet did not explain who “the enemy” was, leading some to speculate that it was a reference to WikiLeaks. On Thursday, however, the military said that it instead referred to any hostile forces that could benefit from learning about classified military tactics and procedures.
It could not be clearer. The release of any information that the American government declares might be of any use whatsoever to any possible "hostile" force -- real, imagined, or possibly run by American provocateurs -- somewhere in the world at some point in time is a crime that can be punishable by death. Thus any person or any entity that reveals embarrassing or criminal facts that the government wishes to keep hidden now stands in the shadow of death.
If that is not fascism, there has never been such a thing on the face of the earth.
To be sure, American officials say that they will seek only life imprisonment for Manning -- who they are now subjecting to hours of forced nakedness in front of video cameras. But the military judge who will oversee Manning's court martial is entirely free to disregard the prosecutor's stated intention and impose the full penalty for aiding the "enemy."
But again, who is the "enemy"? You are the enemy -- if you speak a truth that the government does not want you to reveal. (Of course, if you are an approved and coddled courtier, an eager, scurrying scribe like Bob Woodward, for example, you can reveal all the most secret "classified material" that you like, as long as it comes from savvy insiders "authorized" to praise their bosses and make their rivals look bad.) If you speak this unwanted truth, the government, the president -- the cool, savvy, modern, hip, educated progressive president -- can throw you in jail, subject you to torture, deprive you of sleep, and finally strip you naked in front of cameras to break you down and humiliate you in their efforts to dehumanize you, to grind you down into a piece of meat.
2.Here is the New York Times report on Manning's treatment -- a small, brief story which did not make the front page of the print edition and within a few hours disappeared from the dozens of stories on the front page of the on-line edition:
A lawyer for Pfc. Bradley Manning, [David E. Coombs], the Army intelligence analyst accused of leaking secret government files to WikiLeaks, has complained that his client was stripped and left naked in his cell for seven hours on Wednesday. ... The soldier’s clothing was returned to him Thursday morning, after he was required to stand naked outside his cell during an inspection, Mr. Coombs said in a posting on his Web site.
“This type of degrading treatment is inexcusable and without justification,” Mr. Coombs wrote. “It is an embarrassment to our military justice system and should not be tolerated. Pfc. Manning has been told that the same thing will happen to him again tonight. No other detainee at the brig is forced to endure this type of isolation and humiliation.”
First Lt. Brian Villiard, a Marine spokesman, said a brig duty supervisor had ordered Private Manning’s clothing taken from him. He said that the step was “not punitive” and that it was in accordance with brig rules, but he said that he was not allowed to say more. “It would be inappropriate for me to explain it,” Lieutenant Villiard said. “I can confirm that it did happen, but I can’t explain it to you without violating the detainee’s privacy.”
This is rich; this shows a devilish irony at work in the PR boiler rooms of our fascist state. Yes, we tortured Manning, but we can't tell you why -- because we want to protect his privacy! We are very concerned about his sacred right to privacy! "I'm sorry," said Sgt. Heinrich Schultz, spokesman for the Auschwitz-Birkenau detention facility. "I can confirm that Mr Shlomo Stern, formerly of Krakow, was indeed stripped naked by guards here, but it would be inappropriate for me to explain why, because it would violate the detainee's privacy."
PFC Manning was forced to strip naked in his cell again last night. As with the previous evening, Quantico Brig guards required him to surrender all of his clothing. PFC Manning then walked back to his bed, and spent the next seven hours in humiliation.
The decision to require him to be stripped of all clothing was made by the Brig commander, Chief Warrant Officer-2 Denise Barnes. According to First Lieutenant Brian Villard, a Marine spokesman, the decision was "not punitive" and done in accordance with Brig rules. There can be no conceivable justification for requiring a soldier to surrender all his clothing, remain naked in his cell for seven hours, and then stand at attention the subsequent morning. This treatment is even more degrading considering that PFC Manning is being monitored -- both by direct observation and by video -- at all times. The defense was informed by Brig officials that the decision to strip PFC Manning of all his clothing was made without consulting any of the Brig's mental health providers.
What is happening here -- as Arthur Silber foretold long ago -- is that Barack Obama is codifying the worst abuses of the Bush Administration (and its predecessors) -- which had usually been committed on the side, in the dark, in secret, behind many layers of "plausible deniability" -- into the open, declared law of the land. This too is facism in action. Indeed, rarely has there been a regime more legalistic than Nazi Germany, where jurists, legislators and civil servants adhered strenuously to the "law" as determined by the will of the ruling clique. And for all those who make a fetish of the "rule of law," here is the end result: law being used by brutal Power to "justify" inhuman treatment of truth-tellers. As we noted here some months ago:
A conversation during Civil War. (From work-in-progress Bright, Terrible Spirit):
"But in days past, I was a lawyer. Yes, a lawyer, can you believe it? It seems….ridiculous now, doesn't it? An orderly system meant to govern human society, to establish justice, to advance the progress and enlightenment of the human race. Yet that system, that civil cosmos – to which I was so passionately committed – embraced and protected the most wretched evils, entrenched the powerful in their unjust privilege, oppressed the poor and weak most relentlessly and wickedly, yet at every step – at every step – sang hosannas to itself as some kind of divinity. The "Law" – oh, what a hush of reverence surrounded that word, how deeply that reverence and respect penetrated the heart. Well, my heart, anyway. But in these last few years we have seen – in intense, concentrated, microscopic view – the truth about the law, a truth which too often escaped us in the slow unrolling of peacetime. The truth that there is no law, no Platonic Form out there to which we give paltry representation. There is only power: power in conflict with power, power seeking to drive out power, to establish its dominance, maintain its privilege.
Power…acquiesces to law – sometimes – but it never, never bows to it. Power goes along with the law when it is convenient to do so, when it is not too restrictive, when it demands little more than the occasional sacrifice – for the powerful are certainly not above throwing one of their own to the mob when circumstances require. But when it comes to the crisis, power shreds the law like a filthy rag and has its own way. And then you see that the law is nothing but a rag, to be torn and patched and fitted to power's aims. The worst atrocities I have seen or heard of in this war have been committed wholly and completely under the law. This thing I held in such reverence was, is, nothing but a scrap soaked with blood and shit."
This is what the administration of President Barack Obama has brought to open fruition in the United States of America. The debate is over. The question is answered. Facism has come.
3. A brief reprise of a recent tribute to Manning and other truth-tellers:
"Good corporal, good corporal, don't you know the fate Of all those who speak the hard truth to the State And all who trouble the people's sweet dreams? They're mocked into scorn and torn apart at the seams...."
Afghan protestors hold a placard during a demonstration in Kabul on Sunday. A roadside bomb ripped through a car in eastern Afghanistan, killing 12 civilians, as hundreds of people protested angrily in Kabul over the deaths of nine children in a NATO air raid. (AFP/Shah Marai)
Karzai tells Petraeus Afghan apology 'not enough' By Shah Marai / March 7, 2011
Afghan President Hamid Karzai on Sunday told US General David Petraeus, the commander of international troops, that his apology after nine children died in a NATO air strike was "not enough".
Hundreds of angry demonstrators also rallied in central Kabul over the deaths in an air raid by coalition helicopters in the eastern province of Kunar on Tuesday.
NATO's International Security Assistance Force (ISAF) said the children -- who were collecting firewood in the province's Dar-e-Pech district when they were killed -- were mistaken for rebels.
Petraeus and US President Barack Obama both apologised.
The Western-backed Karzai, who has shaky relations with Washington, had already condemned the deaths, but on Sunday addressed Petraeus directly at a cabinet meeting at which the US general was present.
"President Karzai said that David Petraeus's apology is not enough," a statement from the Afghan presidency said.
"The civilian casualties are a main cause of worsening the relationship between Afghanistan and the US," the statement quoted Karzai as saying.
"The people are tired of these things and apologies and condemnations are not healing any pain.
"On behalf of the people of Afghanistan I want you to stop the killings of civilians."
The air strike that killed the children was against insurgents who had attacked a military post, but it hit the young victims by mistake, according to military officials.
Civilian casualties -- especially involving children -- are a highly sensitive issue in war-torn Afghanistan, where a Taliban-led insurgency has raged since the Islamists were ousted from power by a US-led 2001 invasion.
Karzai says deaths of civilians in military operations turn people against his delicate pro-US administration. Civilian casualties have also been a key source of tension between Kabul and its Western backers, the US and NATO.
A week before the children were killed, Karzai said troops had killed 65 non-combatants during operations in Kunar province's Ghaziabad district.
That was followed by another incident in which Afghan authorities said troops killed six civilians in neighbouring Nangarhar province, also in an air raid.
About 500 people poured onto the streets of Kabul earlier on Sunday and chanted anti-American slogans over the deaths of the children.
Marching through central Kabul they shouted "Death to America -- Death to the invaders." A placard carried by a veiled woman read: "Occupation = killing + destruction."
"We don't want the invading forces," chanted one demonstrator carrying posters of the dead children. Another shouted: "Death to the government of President Hamid Karzai!"
"When I saw the demonstration and realised it is against the Americans I joined," Azizullah, one of the protesters, who uses one name, told AFP.
Also Sunday, a roadside bomb ripped through a car in eastern Afghanistan, killing 12 civilians.
The Taliban-style home-made device struck the car in the province of Paktika, killing five children, two women and five men, the provincial administration said in a statement.
The victims were on their way from neighbouring Pakistan, it said, without giving further details.
Mohibullah Samim, the provincial governor, blamed the bombing on "enemies of peace who once again revealed their tyrant face to the public," the statement added.
Rebels loyal to the Taliban and other militant groups often use improvised -- or home-made -- bombs in attacks against Afghan security forces and their Western military backers.
There are about 140,000 foreign military forces operating in Afghanistan under the command of Petraeus.
Bombs are usually planted on public roads and often kill civilians instead of their military targets. A similar device on February 26 killed nine civilians in Khost province, which borders Paktika.
Really Bad Reporting in Wisconsin: Who 'Contributes' to Public Workers' Pensions? By David Cay Johnston / February 24, 2011
When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees' fight over collective bargaining.
Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles.
Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to "contribute more" to their pension and health insurance plans.
Accepting Gov. Walker' s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.
Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.
How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.
Thus, state workers are not being asked to simply "contribute more" to Wisconsin's retirement system (or as the argument goes, "pay their fair share" of retirement costs as do employees in Wisconsin' s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.
The labor agreements show that the pension plan money is part of the total negotiated compensation. The key phrase, in those agreements I read (emphasis added), is: "The Employer shall contribute on behalf of the employee." This shows that this is just divvying up the total compensation package, so much for cash wages, so much for paid vacations, so much for retirement, etc.
The collective bargaining agreements for prosecutors, cops and scientists are all on-line.
Reporters should sit down, get a cup of coffee and read them. And then they could take what they learn, and what the state website says about fringe benefits, to Gov. Walker and challenge his assumptions.
And they should point out the very first words the state has posted at a web page on careers as a state employee (emphasis added):
The fringe benefits offered to State of Wisconsin employees are significant, and are a valuable part of an individual's compensation package.
Coverage of the controversy in Wisconsin over unions collective bargaining, and in particular pension plan contributions, contains repeated references to the phrase "contribute more."
The key problem is that journalists are assuming that statements by Gov. Scott Walker have basis in fact. Journalists should never accept the premise of a political statement, but often they do, which explains why so much of our public policy is at odds with well-established principles.
The question journalists should be asking is "who contributes" to the state of Wisconsin' s pension and health care plans.
The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation of the state workers. The fact is that the state workers negotiate their total compensation, which they then divvy up between cash wages, paid vacations, health insurance and, yes, pensions. Since the Wisconsin government workers collectively bargained for their compensation, all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact.
Not every news report gets it wrong, but the narrative of the journalistic herd has now been set and is slowly hardening into a concrete falsehood that will distort public understanding of the issue for years to come unless journalists en masse correct their mistakes. From the Associated Press and The New York Times to Wisconsin's biggest newspaper, and every broadcast report I have heard, reporters again and again and again have written as fact what is nonsense.
Compared to tax, this economic issue that reporters have been mishandling is simple. But if journalists cannot grasp the economics of this issue, then how can we hope to have an intelligent debate about tax policy?
Dedicated tax journalists like my colleagues Lee Sheppard and Martin Sullivan at Tax Analysts have exposed, and explained in laymen terms, the arcane rules underlying the important tax debates and controversies that affect corporate and individual taxpayers. But the mainstream press is not even getting basic labor economics right, a much simpler matter.
Among the reports that failed to scrutinize Gov. Walker' s assertions about state workers' contributions and thus got it wrong is one by A.G. Sulzberger, the presumed future publisher of The New York Times, who is now a national correspondent. He wrote that the Governor "would raise the amount government workers pay into their pension to 5.8 percent of their pay, from less than 1 percent now."
Wrong. The workers currently pay 100 percent from their compensation package, but a portion of it is deducted from their paychecks and a portion of it goes directly to the pension plan.
One correct way to describe this is that the governor "wants to further reduce the cash wages that state workers currently take home in their paychecks." Most state workers already divert 5 percent of their cash wages to the pension plan, an official state website shows.
Gov. Walker says that he wants them to "contribute more" via deductions from their paychecks. But since the workers already contribute 100 percent of the money going to the pension plan the real issue is changing the accounting for this to reduce cash wages.
Once the state has settled on the compensation package for its workers then how the cash flows is merely accounting for how the costs are divvied up. If the workers got higher cash pay and diverted all of the pension contributions from their pay it would be the same amount compared to having the state pay directly into the pension funds.
By falsely describing the situation the governor has sought to create the issue as one of the workers getting a favor. The Club for Growth, in broadcast ads, blatantly lies by saying "state workers haven't had to sacrifice. They pay next to nothing for their pensions."
We expect ideological marketing organizations to shade the truth and even outright lie, as the Club for Growth has done. But journalists are supposed to check the facts, not adopt lies as truths.
Having had the good fortune long ago to train the presumed future publisher of the Los Angeles Times I focused on making sure he understood why careful checking of facts and questioning assumptions was a commercial, as well as journalistic value, for which reporters should be properly compensated because it made the paper reliable and thus more valuable to its owners. (Sadly my trainee later died and the paper was sold.)
Having worked at The New York Times I can tell you how editors might try to excuse this error. They call it "shorthand." But shorthand that is wrong is, in short, still wrong. So, Mr. Sulzberger, take the initiative and correct your error. Doing so, you would set an example that will become newsroom lore long after you retire.
Here are some other examples of inaccurate reporting of the issue, followed by a critique and a simple solution.
Todd Richmond of the Associated Press reported on Feb. 20 that the governor wants state workers "to contribute more to health care and pension costs." Richmond has repeatedly used variations of that phrase.
On Feb. 18, Michael Cooper and Katherine Q. Seelye of The New York Timesreported that the legislation sponsored by Gov. Walker would "require workers to contribute more to their pension and health care plans."
Jane Ford-Stewart of the Milwaukee Journal-Sentinel' s on-line community news service reported Feb. 22 on "an effort by Gov. Scott Walker to get state employees to contribute more toward their health insurance and pensions so that the costs are more in line with contributions by workers in the private sector."
Politifact.com has a Wisconsin operation and it was also among those that got it wrong – 100 percent dead wrong -- because it assumed the facts as stated by Gov. Walker and failed to question the underlying premise. Further, contrived assumptions make it is easy for the perpetrators of the misrepresentation to point to data that support a false claim, something Politifact missed entirely, on at least two occasions, in proclaiming false statements to be true.
Given how many journalists rely on Politifact to check political assertions, instead of doing their own research, this is, by far, the inaccuracy likely to have the greatest (or most damaging effect) on subsequent reporting. (Examples of Politifact' s inaccurate assessments can be found here and also here.)
Again, the money the state "contributes" is actually part of the compensation that has been negotiated with state workers in advance so it is their money that they choose to take as pension payments in the future rather than cash wages or other benefits today.
Next, journalists should ask how elected officials are treated by the pension system. The pay of elected leaders is set by the legislature without collective bargaining. Here it is also true that any money withheld from paychecks to fund the pension plans comes from the employee (the elected leaders) but this is not the result of a negotiated compensation package so there is a colorable argument that pension benefits that are received by elected leaders beyond the wages deducted from those employees' compensation package are a gift from taxpayers.
The payroll deduction –- again, a mere accounting measure - - was 5 percent last year for "general participants," official state documents show, a rate that is 56 percent higher than the 3.2 percent rate for "elected leaders."
The rates were adjusted for 2011 and now the elected leaders pay 3.9 percent, still well below what the "general participants" collectively bargained to divert from their cash wages through this accounting device.
The rest of the money going into the plan is also wages the workers diverted, it just does not show up in paychecks as a line item, the same way that half of Social Security and Medicare taxes do not show up on paychecks, but are still part of total compensation to each worker in those plans.
I am being repetitive on purpose – experience supervising others has taught me you usually have to teach something three to seven times before it sinks in. Some management texts also make this point.
That is not to say that the state workers make too much or too little. It is to say that journalists as a class are fundamentally getting the facts wrong by not understanding compensation.
Simplistic coverage has also resulted in numerous reports that Wisconsin state workers make more than workers in Wisconsin' s private business sector. This is true only if you compare walnuts to tuna fish.
State governments (indeed almost all governments) tend to hire people with college educations, including advanced degrees. Overall, private employers in all states tend to hire people with less education. More education means more pay because there is more skill required.
America has roughly the same number of food preparers, who can be high school dropouts, as registered nurses, who require a college education. But the nurses make on average $66,500, compared to just $18,100 for the food service workers. The food service workers collectively made less than $50 billion, while the registered nurses made almost $172 billion in 2009, my analysis of the official data shows.
Business and government hire both food service workers and registered nurses, but you are much more likely to work for the government as a registered nurse than as a food preparation worker.
When you control for the education required to be a prosecutor or nurse, government workers get total compensation that is less than those in the corporate sector. This may reflect the fact that fewer and fewer private sector workers are in unions, about 7 percent at last count. As economic theory predicts, as fewer workers can bargain collectively the overall wage level falls. Effectively wiping out public employee unions would only add to downward pressure on wages, standard economic theory shows.
On the other hand, unionized state workers run a much smaller risk of going through bouts of joblessness, an economic benefit. Numerous studies indicate that public workers, including those in Wisconsin, make about 5 percent less than private sector workers when you control for education. But what is the lifetime cost, and risk, of episodic joblessness among comparable private sector workers? Is that cost equal to 5 percent or so of lifetime earnings, which would even out the differential? I have yet to read an analysis of that issue by an academic economist, much less a journalist, so I do not know the truth of that question.
What Gov. Walker has achieved in selling a false assumption as fact occurs because journalists failed to follow what I call the first and second rules of journalism. This problem is pervasive in coverage of tax and budget issues, where so much nonsense gets reported as fact by the Washington Press corps that I have stopped filing away all but the most egregious errors – and still I copy a story or three every day to use in lectures on getting it right and not writing nonsense.
And what are these two rules for journalists?
Rule One: Check it out. Be so skeptical that if your mother says she loves you, check it out.
Rule Two: Cross check again and again until you not only know the facts, but can put them in proper context and understand all sides so well that their perspective gets proper weight and lecture, or as I like to say, everyone recognizes their oar in the water.
Deadlines may make Rule Two difficult, and often impossible, in writing the first rough draft of history. We are now in the umpteenth draft and the initial mistake keeps getting repeated, as so often happens when a big story brings a herd, until it becomes accepted as unassailable truth.
The reason that falsehoods are transformed into the public' s common knowledge via inaccurate reporting is simple. When editors or producers back home get an account that differs from what the news herd says they raise questions and often delete unique and accurate insights. But if a reporter just repeats what everyone else is saying it usually sails unchallenged to print or airtime even when it is untrue.
Then there is this: How the compensation packages of state workers get divided up is not a matter of tax burdens. Only how much the state workers get paid is a matter of tax burdens.
There are two other important aspects to this, which go to the heart of tax policy and why our country is in for a long stay in the economic doldrums.
Traditional or defined benefit pension plans, properly administered, increase economic efficiency, while the newer defined contribution plans have high costs whether done one at a time through Individual Retirement Accounts or in group plans like 401(k)s.
Efficiency means that more of the money workers contribute to their pensions - - money that could have been taken as cash wages today - - ends up in the pockets of retirees, not securities dealers, trustees and others who administer and invest the money. Compared to defined benefit pension plans, 401(k) plans are vastly more expensive in investing, administration and other costs.
Individually managed accounts like 401(k)s violate a basic tenet of economics – specialization increases economic gains. That is why the average investor makes much less than the market return, studies by Morningstar show.
This goes to Adam Smith's famous insight in 1776 about specialization increasing wealth: when pins were made in full by each worker each could make only a few each day, but when one person draws the wire, another cuts, another fashions the point, etc., the output rises to tens of thousands of pins and their price falls from dear to cheap.
Expecting individuals to be experts at investing their retirement money in defined contribution plans -- instead of pooling the money so professional investors can manage the money as is done in defined benefit plans -- is not sound economics.
The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money.
The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million.
That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.
So, I hope that Mr. Sulzberger in particular will take the initiative to correct the inaccurate reporting and show the way to other reporters, for the betterment of both America and his family' s investment And I hope that all reporters will start questioning the assumption in the governor' s position instead of assuming his statements are infallible.
My larger hope is that reporters, editors and producers will apply this thinking when covering taxes and taxation, the system by which we distribute the burdens of living in and sustaining this, the Second American Republic.
