Thursday, July 29, 2010

Dutch Disease Stalks Oil Producing Nations

In today's excerpt - the curse of abundant oil resources in developing countries - in this example, Venezuela. Developing countries with oil grow only one-fourth as fast as those without, and are far more likely to be militarized and devolve into civil war. In fact, oil and mineral-exporting countries have a 23 percent likelihood of civil war within five years, compared to less than 1 percent for nondependent countries.:

"[With its oil wealth], Venezuela began to import more and more and produce less, a typical symptom of Dutch disease, where resource-rich countries see other parts of their economics wither. (Venezuela actually had Dutch disease before the Dutch, but that term wouldn't be invented until the natural gas boom in the Netherlands in the 1960s torpedoed the country's economy. The condition should be called the Caracas cramp.)

"[After the discovery of oil in Venezuela in 1921], nobody paid taxes. If you're an oil state, it's far more efficient to ask oil buyers for more money than to collect taxes from your population, which requires a vast network of tax collectors, a bureaucracy, laws that are fair, and a justice system to administer them. Collecting oil money, by contrast, requires a small cadre of intellectuals to set policy and diplomats to make it happen. ... The political, economic, and psychological ramifications of this ... are profound.

" 'Systematically the government went after oil money rather than raising taxes,' says economist Francisco Monaldi. 'There is no taxation and therefore no representation here. The state here is extremely autonomous.' Whether it's a dictatorship, a democracy, or something in between, the state's only patron is the oil industry, and all of its attention is focused outward. What's more, the state owes nothing more than promises to the people of Venezuela, because they have so little leverage on the state's income.

"When a state develops the ability to collect taxes, the bureaucracy and mechanisms it creates are expensive. They perpetuate their existence by diligently collecting as much money as possible and encouraging the growth of a private economy to collect taxes from. A strong private economy, so the thinking goes, creates a strong civil society, fostering other centers of power that keep the state in check. Like other intellectuals I talk with in other oil states, Monaldi finds taxes more interesting and more useful than abstract ideas about democracy and ballot boxes. Taxes aren't democracy, but they seem to connect taxpayers and government in a way that has democratizing effects. Studies by Michael L. Ross at UCLA found that taxes alone don't foster accountability, but the relationship of taxes to government services creates a struggle for value between the state and citizens, which is some kind of accountability. ...

"Abdoulaye Djonouma, president of Chad's Chamber of Commerce, says oil brought about economic and agricultural collapse in Nigeria and Gabon. For Chad, which has fewer resources, he fears worse: militarization. He ticks off all the former French colonies that have become militarized. Virtually all. (One study found that oil-exporting countries spend between two and ten times more on their militaries than other developing countries.) ...

"At Stanford, Terry Lynn Karl's analysis of Venezuela's economy during the 1970s and '80s shows that countries whose economy is dominated by oil exports tend to experience shrinking standards of living - something that Chad can hardly afford. Oil has opportunity costs: A study by Jeffrey Sachs and Andres Warner showed that of ninety-seven developing countries, those without oil grew four times as much as those with oil. At UCLA, Michael L. Ross did regression studies showing that governments that export oil tend to become less democratic over time. At Oxford, Paul Collier's regression studies show that oil, and

"At Stanford, Terry Lynn Karl's analysis of Venezuela's economy during the 1970s and '80s shows that countries whose economy is dominated by oil exports tend to experience shrinking standards of living - something that Chad can hardly afford. Oil has opportunity costs: A study by Jeffrey Sachs and Andres Warner showed that of ninety-seven developing countries, those without oil grew four times as much as those with oil. At UCLA, Michael L. Ross did regression studies showing that governments that export oil tend to become less democratic over time. At Oxford, Paul Collier's regression studies show that oil, and mineral-exporting countries have a 23 percent likelihood of civil war within five years, compared to less than 1 percent for nondependent countries."

Author: Lisa Margonelli
Title: Oil on the Brain
Publisher: Nan A. Talese/Doubleday
Date: Copyright 2007 by Lisa Margonelli
Pages: 146-147, 174-176

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Delanceyplace is a brief daily email with an excerpt or quote we view as interesting or noteworthy, offered with commentary to provide context.  There is no theme, except that most excerpts will come from a non-fiction work, mainly works of history, and we hope will have a more universal relevance than simply the subject of the book from which they came. 

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Wednesday, July 28, 2010

Truth and Irony in Agriculture Fiascos

Truth and Irony in Agriculture Fiascos

by Jim Hightower
The Shirley Sherrod Story started innocently. It was a beautiful anecdote of redemption and personal growth, which she related last year at a meeting of the Georgia NAACP.The story told by this black Agriculture Department official would have ended there, unnoticed by the rest of us. But it was caught up by a malicious political wind that swept it all the way to Washington. There, it sucked up an enormous volume of political hot air, then burst into the national news like a furious tornado, ripping the roofs from several big houses of power to reveal a mess of ugliness within.
Ugly Number One is Andrew Breitbart, a notorious far-right-wing blogger who is striving for his 15-minutes of infamy by intentionally distorting, manipulating and lying about the actions of unsuspecting people to create explosive political tales. He used a two-minute, crudely edited clip from a video of Sherrod's 45-minute Georgia speech, perverting her message to make her sound as if she had intentionally discriminated against a white farmer 24 years ago. Breitbart distributed the distorted video as "proof" that she and the NAACP are racists. The guy is a disgusting creep.
Ugly Number Two are the Becks, Hannitys, O'Reillys and other foam-at-the-mouth Fox TV blatherers. These shameless media muggers gleefully and unquestioningly grabbed Breitbart's crap and hurled it across America as "truth."
Ugly Number Three is the Barack Obama White House, which swallowed the Breitbart-Fox false story whole and immediately dismissed Sherrod from her federal job. They literally tracked her down in her car and forced her to phone in her resignation, without letting her tell the true story!
To me, the Obama ugiliness is the worst, for it reveals a shameful lack of loyalty, fairness and feistiness. Like ACORN and Van Jones before, Sherrod was under vicious and false attack from Obama's enemies - but the Obamites are so afraid of right-wing smear artists that they instantly run from them, cravenly abandoning their friends. Hello - if you don't stand for your friends, who'll stand for you?
In the same week that Sherrod was falsely accused of anti-white racism, the US Senate actually compounded the insult with its own act of anti-black racism. At issue was payment of a billion-dollar legal settlement owed to thousands of African-American farmers who for decades were illegally denied essential crop loans from the ag department.
The settlement of the farmers' lawsuit was agreed to way back in 1999 - yet, for more than a decade, Washington has refused to pay. African-American farmers - including Sherrod's father - were routinely and grossly discriminated against. How gross? USDA loan officials spit at them, threw their loan applications in the trash and caused thousands to lose their farms.
To make matters worse, in 1983, the Ronald Reagan administration actually eliminated funding for the division of the USDA that was supposed to investigate these farmers' claims of discrimination. No investigators, no investigations, no loans, no justice - neat.
This year, however, justice was finally to be delivered to the farmers, for President Obama set aside $1.2 billion in his budget to make good on the government promise. But, no go, for congressional Republicans have furiously fought the payments.
Of course, the GOP solons insisted that they certainly support racial justice, but alas, they wailed, the bloated federal deficit now compels them to cut spending. Never mind that they are the chief bloaters! In the past decade, they eagerly and recklessly added trillions of dollars to the national debt with unwarranted wars, tax cuts for the rich, bailouts for Wall Street and subsidies for enormously profitable corporations.
Indeed, these very lawmakers continue to support $4 billion a year in needless giveaways to Big Oil - but they abruptly turn into tightwad on a single billion-dollar allocation owed to America's black farmers.
So while pundits and politicos were vilifying Sherrod for an act of discrimination that did not occur, Senate Republicans cut the payments for thousands of official acts of actual discrimination. How's that for bitter irony? Yet Republican leaders wonder why they get practically no black support in elections.
National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.
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Tuesday, July 27, 2010

. The Great Decoupling of Corporate Profits from Jobs

Robert Reich of the Roosevelt National Advisor...Image via Wikipedia

The Great Decoupling of Corporate Profits from Jobs

Second-quarter earnings reports are coming in, and they're making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter.  Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.
So with all this money and profit, they'll start hiring again, right? Wrong - for three reasons.
First, lots of their profits are coming from their overseas operations. So that's where they're investing and expanding production.
GM now sells more cars in China than it does in the US, but makes most of them there. The company now employs 32,000 hourly workers in China. But only 52,000 GM hourly workers remain in the United States - down from 468,000 in 1970.
GM isn't just hiring low-tech assembly workers in China. Last week the firm broke ground there on a $250 million advanced technology center to develop batteries and other alternative energy sources.
You and I and other American taxpayers still own over 60 percent of GM. We bought GM to save GM jobs, remember?
GM officials say no American taxpayer money is being used to expand in China. But money is fungible. Because of our generosity, GM can now use the dollars it doesn't have to spend in the United States meeting its American payrolls and repaying its creditors, for new investments in China.
Second, big U.S. businesses are investing their cash in labor-saving technologies. This boosts their productivity, but not their payrolls.
Last Friday, for example, Ford reported a $2.6 billion second-quarter profit. The firm is already more than two-thirds the way to equaling its record 1999 profits. But due to labor-saving technologies, Ford now has half as many employees as it did a decade ago.
Wall Street analysts are happy with Ford's "commitment to keeping capacity in check," according to the Wall Street Journal. Ford shares rose 5.2 percent Friday. "Keeping capacity in check" is the Street's way of saying "no new hiring." In fact, the Street is advising investors to sell the stocks of companies that talk openly of expanding capacity.
Finally, corporations are using their pile of money to pay dividends to their shareholders and buy back their own stock - thereby pushing up share prices.
Last Friday, GE announced it would raise its dividend by 20 percent and reinstate its share-buyback plan. It's GE's first dividend increase since the company cut its dividend in early 2009. As a result, GE shares are up more than 5% in the past few days.
Bottom line: Higher corporate profits no longer lead to higher employment.  We're witnessing a great decoupling of company profits from jobs. 
The next supply-side economist who tells you companies need more incentive (i.e. lower taxes) before they'll hire is living on another planet.
The reality is this: Big American companies may never rehire large numbers of workers. And they won't even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won't start buying against until they know they have reliable paychecks.
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on and iTunes.
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Sunday, July 25, 2010

Despite Spending Millions Lobbying, Nuke Industry Losing.

Easy-Eco-Blog-Solar-Panels-Solar-PowerImage by EasyEcoBlog via Flickr

Why Stewart Brand is Wrong on Nukes - and is Losing

Stewart Brand has become a poster boy for a "nuclear renaissance" that has just suffered a quiet but stunning defeat. Despite $645 million spent in lobbying over the past decade, the reactor industry has thus far failed to gouge out major new taxpayer funding for new commercial reactors.
In an exceedingly complex series of twists and turns, no legislation now pending in Congress contains firm commitments to the tens of billions reactor builders have been demanding. They could still come by the end of the session. But the radioactive cake walk many expected the industry to take through the budget process has thus far failed to happen.
The full story is excruciatingly complicated. But the core reasons are simple: atomic power can't compete, and makes global warming worse.
In support of this failed 20th Century technology, the industry has enlisted a 20th Century retro-hero, Stewart Brand. Back in the 1960s Brand published the Whole Earth Catalog. Four decades later, that cachet has brought him media access for his advocacy of corporate technologies like genetically modified foods and geo-engineering.....and, of course, nuclear energy.
In response to a cover interview in Marin County's Pacific Sun, I wrote the following to explain why Stewart is wrong wrong wrong:
    Stewart Brand now seems to equate "science" with a tragic and dangerous corporate agenda. The technologies for which he argues--nuclear power, "clean" coal, genetically modified crops, etc.--can be very profitable for big corporations, but carry huge risks for the rest of us. In too many instances, tangible damage has already been done, and more is clearly threatened. If there is a warning light for what Stewart advocates, it is the Deepwater Horizon disaster, which much of the oil industry said (like Three Mile Island and Chernobyl) was "impossible." Then it happened. The $75 million liability limit protecting BP should be ample warning that any technology with a legal liability limit (like nuclear power) cannot be tolerated. Thankfully, there is good news: We have true green alternatives to these failed 20th-century ideas. They're cheaper, safer, cleaner, more reliable and more job-producing than the old ways Stewart advocates. Stewart and I have never met. But we have debated on the radio and online. Thank you, Pacific Sun, for bringing us to print. Stewart's advocacy does fit a pattern. He appears to have become a paladin for large-scale corporate technologies that may be highly profitable to CEOs and shareholders, but are beyond the control of the average citizen, and work to our detriment. Because he makes so many simple but costly errors, let's try a laundry list: 1. Like other reactor advocates, Stewart cavalierly dismisses the nuclear waste problem by advocating, among other things, the stuff be simply dumped down a deep hole. This is a terribly dangerous idea and will not happen. Suffice it to say that after a half-century of promises (the first commercial reactor opened in Pennsylvania in 1957) the solution now being offered by government and industry is...a committee!!! Meanwhile, more than 60,000 tons of uniquely lethal spent fuel rods sit at some 65 sites in 31 states with nowhere to go. Like the reactors themselves, they are vulnerable to cooling failure, terror attack, water shortages, overheating of lakes, rivers and oceans, flooding, earthquakes, tornadoes and hurricanes, and much more. This is no legacy to leave our children. 2. Equally disturbing is the industry's inability to get meaningful private liability insurance. The current federally imposed limit is $11 billion, which would disappear in a meltdown even faster than BP's $75 million in the Gulf. According to the latest compendium of studies, issued this spring by the New York Annals of Science, Chernobyl has killed some 985,000 people, and is by no means finished. It has done at least a half-trillion dollars in damage. The uninsured death toll and financial costs of a similar-scaled accident in the U.S. are incalculable, but would clearly kill millions and bankrupt our nation for the foreseeable future. 3. Stewart points out that there are also risks with wind and solar power. But clearly none that begin to compare with nukes, coal or deep-water drilling. If reactor owners were forced to find reasonable liability insurance, all would shut. A similar demand for renewables and efficiency would leave them unaffected. 4. Renewable/efficiency technologies today are cheaper, faster to deploy and more job-creating than nukes. It takes a minimum of five years to license and build a new reactor. The one being done by AREVA in Finland is hugely over budget and behind schedule. There is no reason to expect anything better here. Among other things, the long lead time ties up for too many years the critical social capital that could otherwise go to technology that can quickly let the planet heal. 5. Like others who doubt the possibility of a green-powered Earth, Stewart posits the straw man of reliance on a deployment of solar panels that would blanket the desert and do ecological harm. In fact, the National Renewable Energy Lab estimates 100 percent of the nation's electricity could come from an area 90 miles on a side, or a relatively modest box of 8,100 square miles. But as we all know, that's not how it will be done. Solar panels belong on rooftops, where there is ample area throughout the nation, and an end to transmission costs. Likewise, wind farms do not "cover" endless acres of prairie, their tower bases take up tiny spots that remain surrounded by productive farmland. In this case, currently available wind turbines spinning between the Mississippi and the Rockies could generate 300 percent of the nation's electricity. There's sufficient potential in North Dakota, Kansas and Texas alone to do 100 percent. Cost and installation times put nukes to shame. The liability is nil, as is the bird kill, which primarily affects obsolete, badly sited fast-spinning machines in places like Altamont Pass. Those must come down, and there will certainly be other surprises along the way. No technology is perfect, and we need to be careful even with those that are green-based. But as we have seen, further threats on the scale of Chernobyl and the Deepwater Horizon cannot be sustained. 6. As for GMO crops, Darwin was right. Plants evolve to avoid herbicides just as bugs work their way around pesticides (which Stewart correctly decries). Now we see that "super-weeds" are outsmarting the carefully engineered herbicides meant to justify the whole GMO scheme, bringing a disastrous reversion to horrific, lethal old sprays. Chemical farming may be good for corporate profits, but it can kill global sustainability. In the long run, only organics can sustain us. 7. Stewart mentions that he is paid only for speeches. But a single such fee can outstrip an entire year's pay for a grassroots organizer or volunteer. What's remarkable is that the nuclear power industry spent some $645 million lobbying for its "renaissance" over the past decade--more than $64 million/year. It has bought an army of corporate lobbyists and legislators. Yet only a handful of folks with rear guard environmental credentials has stepped forward to fight for the old fossil/nuclear/GMO technologies. 
Stewart is certainly welcome to his own opinions. But not to his own facts. Pushing for a nuclear "renaissance" concedes that it's a Dark Age technology, defined by unsustainable costs, inefficiencies, danger, eco-destruction, radiation releases, lack of insurance, uncertain decommissioning costs, vulnerability to terrorism and much more.
That the industry must desperately seek taxpayer help, and cannot find insurance for even this "newer, safer" generation, is the ultimate testimony to its failure. By contrast, renewables and efficiency are booming, and are a practical solution to our energy needs, which the corporate clunkers of the previous century simply cannot provide.
It's been a long time since the Whole Earth Catalog was published. Its hallowed founder should wake up to the booming holistic green technologies that are poised to save the Earth. They are ready to roll over the obsolete corporate boondoggles that are killing Her. Chernobyl, Three Mile Island, the disasters in the coal mines and the Gulf remind us we need to make that green-powered transition as fast as we possibly can.
Harvey Wasserman's SOLARTOPIA! OUR GREEN-POWERED EARTH, A.D. 2030, is at He is senior advisor to Greenpeace USA and the Nuclear Information & Resource Service, and writes regularly for
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Saturday, July 24, 2010

No to Oligarchy

U.S. Senator Bernie Sanders of VermontImage via Wikipedia

No to Oligarchy

by Bernie Sanders
The American people are hurting. As a result of the greed, recklessness and illegal behavior on Wall Street, millions of Americans have lost their jobs, homes, life savings and their ability to get a higher education. Today, some 22 percent of our children live in poverty, and millions more have become dependent on food stamps for their food.
And while the Great Wall Street Recession has devastated the middle class, the truth is that working families have been experiencing a decline for decades. During the Bush years alone, from 2000-2008, median family income dropped by nearly $2,200 and millions lost their health insurance. Today, because of stagnating wages and higher costs for basic necessities, the average two-wage-earner family has less disposable income than a one-wage-earner family did a generation ago. The average American today is underpaid, overworked and stressed out as to what the future will bring for his or her children. For many, the American dream has become a nightmare.
But, not everybody is hurting. While the middle class disappears and poverty increases the wealthiest people in our country are not only doing extremely well, they are using their wealth and political power to protect and expand their very privileged status at the expense of everyone else. This upper-crust of extremely wealthy families are hell-bent on destroying the democratic vision of a strong middle-class which has made the United States the envy of the world. In its place they are determined to create an oligarchy in which a small number of families control the economic and political life of our country.
The 400 richest families in America, who saw their wealth increase by some $400 billion during the Bush years, have now accumulated $1.27 trillion in wealth. Four hundred families! During the last 15 years, while these enormously rich people became much richer their effective tax rates were slashed almost in half. While the highest paid 400 Americans had an average income of $345 million in 2007, as a result of Bush tax policy they now pay an effective tax rate of 16.6 percent, the lowest on record.
Last year, the top 25 hedge fund managers made a combined $25 billion but because of tax policy their lobbyists helped write, they pay a lower effective tax rate than many teachers, nurses, and police officers. As a result of tax havens in the Cayman Islands, Bermuda and elsewhere, the wealthy and large corporations are evading some $100 billion a year in U.S. taxes. Warren Buffett, one of the richest people on earth, has often commented that he pays a lower effective tax rate than his secretary.
But it's not just wealthy individuals who grotesquely manipulate the system for their benefit. It's the multi-national corporations they own and control. In 2009, Exxon Mobil, the most profitable corporation in history made $19 billion in profits and not only paid no federal income tax -- they actually received a $156 million refund from the government. In 2005, one out of every four large corporations in the United States paid no federal income taxes while earning $1.1 trillion in revenue.
But, perhaps the most outrageous tax break given to multi-millionaires and billionaires happened this January when the estate tax, established in 1916, was repealed for one year as a result of President Bush's 2001 tax legislation. This tax applies only to the wealthiest three-tenths of 1 percent of our population. This is what Teddy Roosevelt, a leading proponent of the estate tax, said in 1910. "The absence of effective state, and, especially, national restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise.... Therefore, I believe in a ... graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate." And that's what we've had for the last 95 years -- until 2010.
Today, not content with huge tax breaks on their income; not content with massive corporate tax loopholes; not content with trade laws enabling them to outsource the jobs of millions of American workers to low-wage countries and not content with tax havens around the world, the ruling elite and their lobbyists are working feverishly to either eliminate the estate tax or substantially lower it. If they are successful at wiping out the estate tax, as they came close to doing in 2006 with every Republican but two voting to do, it would increase the national debt by over $1 trillion during a 10-year period. At a time when we already have a $13 trillion debt, enormous unmet needs and the highest level of wealth inequality in the industrialized world, it is simply obscene to provide more tax breaks to multi-millionaires and billionaires.
That is why I have introduced the Responsible Estate Tax Act (S.3533). This legislation would raise $318 billion over the next decade by establishing a graduated inheritance tax on estates over $3.5 million retroactive to this year. This bill ensures that the wealthiest 0.3 percent of Americans pays their fair share of estate taxes, while making sure that 99.7 percent of Americans never have to pay a dime when they lose a loved one. It also makes certain that the overwhelming majority of family farmers and small businesses never have to pay an estate tax.
This legislation must be passed because, with a $13 trillion national debt and huge unmet needs, we cannot afford more tax breaks for millionaire and billionaire families. But even more importantly, it must be passed because the United States must not become an oligarchy in which a handful of wealthy and powerful families control the destiny of our nation. Too many people, from the inception of this country, have struggled and died to maintain our democratic vision. We owe it to them and to our children to maintain it.
Bernie Sanders is the Independent US Senator from Vermont.
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Monday, July 19, 2010

Sock Puppets Do BP's Bidding


BP and Dispersants: The "Regulated" Regulating the "Regulators"?

WASHINGTON - July 16 - WALA-TV in Mobile, Alabama is reporting: "At one point during Thursday's hearings into the explosion aboard the Deepwater Horizon oil rig, the dispersants that are being used in the Gulf were referred to as the potential 'Agent Orange of the Gulf.'

"BP has used millions of gallons of the chemical Corexit to break down the oil. The Environmental Protection Agency approved the chemical, but put limits on how much could be used. That's because the [agency] believes it does pose some risk."

A noted expert at the Environmental Protection Agency, Kaufman said today: "Thursday's Senate testimony of EPA and NOAA [National Oceanic and Atmospheric Administration] [officials] provides further confirmation that they are 'sock puppets' for BP and contributing to the poisoning of the Gulf. EPA green-lighted the massive use of toxic dispersants because BP wants to cover up the amount of oil contamination, not to protect the public health and environment."

Background: Kaufman "led the investigation for the EPA's Ombudsman that uncovered Environmental Protection Agency and Occupational Safety and Health Administration cover-up[s] of the environmental effects of the 9/11 World Trade Center attack at the behest of the Bush White House."

Kaufman is extensively cited in "Scientists: Obama not doing enough + VIDEO: Shrimpers exposed to Corexit 'bleeding from the rectum.'"

A nationwide consortium, the Institute for Public Accuracy (IPA) represents an unprecedented effort to bring other voices to the mass-media table often dominated by a few major think tanks. IPA works to broaden public discourse in mainstream media, while building communication with alternative media outlets and grassroots activists.
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Saturday, July 17, 2010

Appoint Elizabeth Warren

Elizabeth WarrenImage via Wikipedia

Treasury Makes A Mistake – Claiming They Are Not Blocking Elizabeth Warren

by Simon Johnson
It's one thing to block Elizabeth Warren from heading the new Consumer Financial Protection Bureau.
It's quite another thing to deny in public, for the record, that any such blocking is going on (e.g., see this report; Michael Barr apparently said something quite similar today).
There is a strong groundswell of opinion on this issue from the left - see the BoldProgressives petition.  But the center also feels strongly that, given everything Treasury has said and done over the past few months, it would be a complete travesty not to put the strongest possible regulator in change of protecting consumers.  (See Ted Kaufman on the NYT's DealBook, giving appropriate credit to the SEC, and apply the same points to broader customer issues going forward.)
This can now go only one of two ways.
  1. Elizabeth Warren gets the job.  Bridges are mended and the White House regains some political capital.  Secretary Geithner is weakened slightly but he'll recover.
  2. Someone else gets the job, despite Treasury's claims that Elizabeth Warren was not blocked.  The deception in this scenario would be nauseating - and completely blatant.  "Everyone was considered on their merits" and "the best candidate won" will convince who exactly?
Despite the growing public reaction, outcome #2 is the most likely and the White House needs to understand this, plain and clear - there will be complete and utter revulsion at its handling of financial regulatory reform both on this specific issue and much more broadly.  The administration's position in this area is already weak, its achievements remain minimal, its speaking points are lame, and the patience of even well-inclined people is wearing thin.
Failing to appoint Elizabeth Warren would be the straw that breaks the camel's back.  It will go down in the history books as a turning point - downwards - for this administration.
Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics, and a member of the CBO’s Panel of Economic Advisers. He is a co-founder of The Baseline Scenario.
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Thursday, July 15, 2010

Weed Out Failed Ideas

Weeds killed with herbicideImage via Wikipedia

Revenge of the Weeds

by Robert C. Koehler
Today's big news stories - the wars, the eco-disasters - all seem to have the same gaping hole in them. This hole is lack of awareness, and its thrum, once you begin to hear it, soon becomes deafening: We can't go on like this.
We can't keep playing conquering fool, arrogantly ordering the world to our liking by killing everything that doesn't fit into it. We can't keep throwing more of the same at our problems. We can't keep fighting nature, or one another, and expect somehow to win in the end. We can't keep buying time at an increasingly horrific price. Time is running out. And petroleum isn't the only thing we're addicted to.
"Just as the heavy use of antibiotics contributed to the rise of drug-resistant supergerms, American farmers' near-ubiquitous use of the weedkiller Roundup has led to the rapid growth of tenacious new superweeds," the New York Times informed us several months ago.
"To fight them . . . farmers throughout the East, Midwest and South are being forced to spray fields with more toxic herbicides. . . ."
The Times goes no deeper into the matter than this, affecting more concern for Monsanto, the manufacturer both of Roundup and the genetically modified cotton, corn and soybean seeds that are resistant to it (and are now no longer must-buy products for frustrated farmers), than it shows concern or even curiosity about the environmental consequences of the practices it writes about, including monoculture - the devotion of vast tracts of land to single crops and completely at odds with the extraordinary complexity of natural ecosystems.
But time appears to be running out on monoculture and many other standard practices of agribusiness, just as it is on so many of the thoughtless ways the civilized world does business. One clue to this: When a problem arises, we fight back with more of the same, except in higher - more lethal - doses. Indeed, that impulse, to fight back, to turn everything into a war, rather than to study, ponder and revere our obstacles, is the ultimate manifestation of our unawareness.
Thus to eradicate the "superweeds" that have evolved in response to the widespread use of Roundup, other chemical companies are scrambling to develop alternative herbicides and genetically modified seeds that can resist them, including, the Times notes without irony, Dow Chemical Co., which hopes to market seeds resistant to 2,4-D, a component of Agent Orange - the defoliant we used to ravage Vietnam between 1962 and 1971.
Yeah, we're still at war, and not only in Afghanistan and Iraq.
"We're so hell-bent on maintaining our voracious consumption habits, that we'll engage the services of the defense industry," Firmin DeBrabander wrote recently, in an excellent essay published on Common Dreams. "We'll use Agent Orange to fight off weeds and ensure the delivery of cheap corn to Frito-Lay, Coke and Kellogg's. . . . All in the name of productivity, efficiency, convenience - profit."
This all reads so much like a war story, it's as though a template had been laid over the data, making it come out as another version of the Great American Myth: Once again, the valiant American little guy, in this case the noble farmer (and his ally Monsanto), takes on inscrutable evil, an herbicide-resistant form of pigweed that can grow three inches a day, reach heights of seven feet, choke out crops and wreck farm equipment. If we throw a little Agent Orange at it, we're back in another era, fighting commie pigweed.
As I read the Times story, which seemed like a dispatch from the front ("In an attempt to kill the pest before it becomes that big . . ."), I couldn't help but think about some words of Rupert Ross, who delves deeply into the Aboriginal worldview in his book Returning to the Teachings. The Lakota, he wrote, "had no language for insulting other orders of existence: ‘pest' . . . ‘waste' . . . ‘weed.'"
This starts to explain why we are the way we are, and how we've reached the zenith of our arrogance: Whether geopolitically, agriculturally or in the privacy of our relationship with ourselves, we come out fearful and fighting. (I will sometimes, for my own amazement, count the number of "wars" we're waging: on drugs, terror, crime, cancer, illiteracy, ignorance . . . weeds, etc., ad infinitum).
Is there another way? Can we retire the myth that we've created, and that has created us, which depends for its sustenance upon a perpetual enemy and dozens, maybe hundreds, of fronts?
Our transition to peace will be as slow, complex and backlash-prone as our transition from monoculture to sustainable farming practices, such as the permaculture movement, which seeks to partner with nature, not use it up and throw it away.
"Permaculture's sensible answer," writes Mary DeDanan, "is for humans to ally themselves with nature instead of trying to control nature. . . . Permaculture insists on the whole picture, from soil microbes to global weather patterns. It takes advantage of every relationship and synergy. It uses local resources, or grows its own. It wastes nothing."
Our transition begins with awareness, evidence of which I long to hear when I tune into the mainstream voices of my culture.
Robert Koehler is an award-winning, Chicago-based journalist and nationally syndicated writer. You can respond to this column at or visit his Web site at
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Tuesday, July 13, 2010

Robber Barons Leave Us Barren

Robert Bernard Reich, American politician, aca...Image via Wikipedia

The Root Of Economic Fragility And Political Anger

by Robert Reich
Missing from almost all discussion of America's dizzying rate of unemployment is the brute fact that hourly wages of people with jobs have been dropping, adjusted for inflation. Average weekly earnings rose a bit this spring only because the typical worker put in more hours, but June's decline in average hours pushed weekly paychecks down at an annualized rate of 4.5 percent.In other words, Americans are keeping their jobs or finding new ones only by accepting lower wages.
Meanwhile, a much smaller group of Americans' earnings are back in the stratosphere: Wall Street traders and executives, hedge-fund and private-equity fund managers, and top corporate executives. As hiring has picked up on the Street, fat salaries are reappearing. Richard Stein, president of Global Sage, an executive search firm, tells the New York Times corporate clients have offered compensation packages of more than $1 million annually to a dozen candidates in just the last few weeks.
We're back to the same ominous trend as before the Great Recession: a larger and larger share of total income going to the very top while the vast middle class continues to lose ground.
And as long as this trend continues, we can't get out of the shadow of the Great Recession. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don't have enough purchasing power to buy what the economy is capable of producing.
America's median wage, adjusted for inflation, has barely budged for decades. Between 2000 and 2007 it actually dropped. Under these circumstances the only way the middle class could boost its purchasing power was to borrow, as it did with gusto. As housing prices rose, Americans turned their homes into ATMs. But such borrowing has its limits. When the debt bubble finally burst, vast numbers of people couldn't pay their bills, and banks couldn't collect.
Each of America's two biggest economic downturns over the last century has followed the same pattern. Consider: in 1928 the richest 1 percent of Americans received 23.9 percent of the nation's total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America's total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928--with 23.5 percent of the total.
We all know what happened in the years immediately following these twin peaks--in 1929 and 2008.
Yes, China, Germany and Japan have contributed to America's demand-side problem by failing to buy as much from us as we buy from them. But to believe that our continuing economic crisis stems mainly from the trade imbalance--we buy too much and save too little, while they do the reverse--is to miss the biggest imbalance of all. The problem isn't that typical Americans have spent beyond their means. It's that their means haven't kept up with what the growing economy could and should have been able to provide them.
A second parallel links 1929 with 2008: when earnings accumulate at the top, people at the top invest their wealth in whatever assets seem most likely to attract other big investors. This causes the prices of certain assets--commodities, stocks, dot-coms or real estate--to become wildly inflated. Such speculative bubbles eventually burst, leaving behind mountains of near-worthless collateral.
The crash of 2008 didn't turn into another Great Depression because the government learned the importance of flooding the market with cash, thereby temporarily rescuing some stranded consumers and most big bankers. But the financial rescue didn't change the economy's underlying structure -- median wages dropping while those at the top are raking in the lion's share of income.
That's why America's middle class still doesn't have the purchasing power it needs to reboot the economy, and why the so-called recovery will be so tepid--maybe even leading to a double dip. It's also why America will be vulnerable to even larger speculative booms and deeper busts in the years to come.
The structural problem began in the late 1970s when a wave of new technologies (air cargo, container ships and terminals, satellite communications and, later, the Internet) radically reduced the costs of outsourcing jobs abroad. Other new technologies (automated machinery, computers and ever more sophisticated software applications) took over many other jobs (remember bank tellers? telephone operators? service station attendants?). By the '80s, any job requiring that the same steps be performed repeatedly was disappearing--going over there or into software. Meanwhile, as the pay of most workers flattened or dropped, the pay of well-connected graduates of prestigious colleges and MBA programs--the so-called "talent" who reached the pinnacles of power in executive suites and on Wall Street--soared.
The puzzle is why so little was done to counteract these forces. Government could have given employees more bargaining power to get higher wages, especially in industries sheltered from global competition and requiring personal service: big-box retail stores, restaurants and hotel chains, and child- and eldercare, for instance. Safety nets could have been enlarged to compensate for increasing anxieties about job loss: unemployment insurance covering part-time work, wage insurance if pay drops, transition assistance to move to new jobs in new locations, insurance for communities that lose a major employer so they can lure other employers. With the gains from economic growth the nation could have provided Medicare for all, better schools, early childhood education, more affordable public universities, more extensive public transportation. And if more money was needed, taxes could have been raised on the rich.
Big, profitable companies could have been barred from laying off a large number of workers all at once, and could have been required to pay severance--say, a year of wages--to anyone they let go. Corporations whose research was subsidized by taxpayers could have been required to create jobs in the United States. The minimum wage could have been linked to inflation. And America's trading partners could have been pushed to establish minimum wages pegged to half their countries' median wages--thereby ensuring that all citizens shared in gains from trade and creating a new global middle class that would buy more of our exports.
But starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets. It halved the top income tax rate from the range of 70-90 percent that prevailed during the 1950s and '60s to 28-40 percent; it allowed many of the nation's rich to treat their income as capital gains subject to no more than 15 percent tax and escape inheritance taxes altogether. At the same time, America boosted sales and payroll taxes, both of which have taken a bigger chunk out of the pay of the middle class and the poor than of the well-off.
Companies were allowed to slash jobs and wages, cut benefits and shift risks to employees (from you-can-count-on-it pensions to do-it-yourself 401(k)s, from good health coverage to soaring premiums and deductibles). They busted unions and threatened employees who tried to organize. The biggest companies went global with no more loyalty or connection to the United States than a GPS device. Washington deregulated Wall Street while insuring it against major losses, turning finance--which until recently had been the servant of American industry--into its master, demanding short-term profits over long-term growth and raking in an ever larger portion of the nation's profits. And nothing was done to impede CEO salaries from skyrocketing to more than 300 times that of the typical worker (from thirty times during the Great Prosperity of the 1950s and '60s), while the pay of financial executives and traders rose into the stratosphere.
It's too facile to blame Ronald Reagan and his Republican ilk. Democrats have been almost as reluctant to attack inequality or even to recognize it as the central economic and social problem of our age. (As Bill Clinton's labor secretary, I should know.) The reason is simple. As money has risen to the top, so has political power. Politicians are more dependent than ever on big money for their campaigns. Modern Washington is far removed from the Gilded Age, when, it's been said, the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. Today's cash comes in the form of ever increasing campaign donations from corporate executives and Wall Street, their ever larger platoons of lobbyists and their hordes of PR flacks.
The Great Recession could have spawned another era of fundamental reform, just as the Great Depression did. But the financial rescue reduced immediate demands for broader reform.
Obama might still have succeeded had he framed the challenge accurately. Yet in reassuring the public that the economy will return to normal he has missed a key opportunity to expose the longer-term scourge of widening inequality and its dangers. Containing the immediate financial crisis and then claiming the economy is on the mend has left the public with a diffuse set of economic problems that seem unrelated and inexplicable, as if a town's fire chief deals with a conflagration by protecting the biggest office buildings but leaving smaller fires simmering all over town: housing foreclosures, job losses, lower earnings, less economic security, soaring pay on Wall Street and in executive suites.
Much the same has occurred with efforts to reform the financial system. The White House and Democratic leaders could have described the overarching goal as overhauling economic institutions that bestow outsize rewards on a relative few while imposing extraordinary costs and risks on almost everyone else. Instead, they have defined the goal narrowly: reducing risks to the financial system caused by particular practices on Wall Street. The solution has thereby shriveled to a set of technical fixes for how the Street should conduct its business.
What we get from widening inequality is not only a more fragile economy but also an angrier politics. When virtually all the gains from growth go to a small minority at the top -- and the broad middle class can no longer pretend it's richer than it is by using homes as collateral for deepening indebtedness -- the result is deep-seated anxiety and frustration. This is an open invitation to demagogues who misconnect the dots and direct the anger toward immigrants, the poor, foreign nations, big government, "socialists," "intellectual elites," or even big business and Wall Street. The major fault line in American politics is no longer between Democrats and Republicans, liberals and conservatives, but between the "establishment" and an increasingly mad-as-hell populace determined to "take back America" from it.
When they understand where this is heading, powerful interests that have so far resisted fundamental reform may come to see that the alternative is far worse.
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on and iTunes.
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Sunday, July 11, 2010

It's The Environment, Stupid.

Smokestacks of a chemical factory near Institu...Image via Wikipedia

A Truly Toxic Issue: Our Chemical Environment

A truly toxic issue Modern life is saturated with carcinogenic chemicals. But without regulation, just how are we supposed to avoid them?

by Sadhbh Walshe
I used to be under the impression that you had a reasonable chance of avoiding debilitating and potentially fatal diseases like cancer if you just took a few simple precautions: ate plenty of fruit and vegetables, gave up smoking, drank in moderation and did a bit of exercise. It's since become apparent that the world we live in is so overrun with environmental pollutants that it is next to impossible to keep oneself truly healthy.
A report released in the US earlier this year by the President's Cancer Panel concluded that the risk of environmentally induced cancer has been grossly underestimated; that exposure to potential carcinogens is widespread; that the 80,000 or so chemicals used by millions of Americans in their daily lives (mostly inadvertently) are largely unregulated and that, to a "disturbing extent", babies are being born "pre-polluted".
As someone who has spent a great deal of her time cycling around farmers' markets in inclement weather to fill cloth bags with local seasonal and organic produce, and sweating out toxins in hot yoga studios in between, these findings are particularly enraging.
I've known for a while that imbibing food is a perilous adventure. Meat, fish and dairy products have long since terrified me. Even fresh produce has its dangers. A conventional apple for example - the very fruit that is meant to keep the doctor at bay - can contain up to 42 different pesticides, many of them known carcinogens.
But now, it seems that food is the least of our worries, to the extent that you have some control over what you digest. The fact is we are being bombarded 24/7 by toxic chemicals: benzene and formaldehyde in our furniture and carpets, bisphenol A (BPA) in food containers and the coating on credit card receipts, and who knows what in our electronic devices.
Some of these chemicals, like formaldehyde (which is probably in the desk I'm typing at right now and in the sofa I'll be reclining on later) and BPA, which is everywhere, have been the subject of hundreds of studies and are known to be harmful, even in very low doses. BPA is particularly troubling, being linked to breast cancer, infertility and birth defects in infants (reducing the normal distance between their anus and genitals for example), yet it is ubiquitous in - of all things - babies' bottles. BPA was banned from use in Canada in 2008; despite more than 700 studies coming to the same distressing conclusion, it is still FDA-approved for use in the United States.
And these are just the chemicals we know about. What damage the other 79,998 or so chemicals floating about are causing is anybody's guess.
You can, of course, minimise your exposure to toxic chemicals by adhering to the following set of guidelines: buy food, home and garden products, toys, medicines, furniture and clothing that are organic and free of BPA, phtalates, endocrine disruptors, formaldehyde and other toxic by-products of the manufacturing process. Filter your water and air, don't use your mobile phone, don't use Wi-Fi, don't use the microwave, steer clear of electronic devices generally, wear sunscreen, avoid carpets, test your house for mould, test your house for radon levels, avoid first-, second- and third-hand smoke - and next time you sign a credit card receipt, try not to touch it.
No problem, right? Well, not if you have the resources of someone like Madonna or Gwyneth Paltrow, perhaps, but for the average Joe, toxin-free living is simply not feasible. I can't get my landlord to clean the windows in my apartment - so there's no way he's checking the radon levels anytime soon. And how, exactly, is one supposed to recognise an endocrine disruptor when it comes knocking?
For people of limited means, this is an even bigger problem. They have enough to be getting on with trying to put food on the table without having to worry whether the food, not to mention the table itself, is safe.
If average citizens are to have any hope of a toxin-free lifestyle, we need the government to step in and regulate the poisonous substances that we are being exposed to on a daily basis. Fortunately, there is some light at the end of the tunnel. Last April, Senator Lautenberg proposed the Safe Chemicals Act, which would overhaul the dangerously outdated Toxic Substance Control Act of 1976. The new act, like many others before, is still waiting for congressional approval and you can be sure that the longer it languishes, the happier the plastics and manufacturing industries will be.
Meanwhile, according to the President's Cancer Panel, a whopping 41% of Americans - almost half the population - will be diagnosed with cancer at some point in their lives. In 2009 alone, 562,000 Americans died from the disease.
Sadhbh Walshe is a film-maker and former staff writer for the CBS drama series The District. Her opinion pieces have also been published in the Chicago Tribune and Irish Times.
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