Published on Friday, April 30, 2010 by Bill Moyers Journal
On Retiring from the JOURNAL
by Bill Moyers
Thanks to all of you who wrote to express your disappointment and dismay at hearing me say last week that the JOURNAL will be coming to an end with the April 30th broadcast. My team and I were touched by your messages, but I want to disabuse those of you who fear that we are being pushed off the air by higher-ups at PBS pointing to the door and demanding that we go. Not so. PBS doesn't fund the JOURNAL; our support comes from foundations and our sole corporate funder, Mutual of America. Together they've given me an independence rare for broadcast journalists. Our reporting and analysis trigger controversy from many quarters, as any strong journalism will, but not one - not one! - of my funders has ever mentioned to me the complaints directed their way. They would continue their support if I were to stick around.
I'm leaving for one reason alone: It's time to go. I'll be 76 in a few weeks, and while I don't consider myself old (my father lived into his 80s, my mother into her 90s) there are some things left to do that the deadlines and demands of a weekly broadcast don't permit. At 76, it's now or never. I actually informed my friends at PBS of my decision over a year ago, and planned to leave at the end of last December. But they asked me to continue another four more months while they prepare a new series for Friday night broadcast. I agreed, but said at the time - April 30 and not a week longer.
It wasn't easy deciding to close the JOURNAL. I like what I do, I cherish my colleagues, and my viewers remain loyal and engaged. I will miss the virtual community that has grown up around the broadcast - kindred spirits across the country whose unseen but felt presence reminds me of why I have kept at this work so long. But it has indeed been a long time (almost 40 years since I launched the original JOURNAL in 1971), and that's why I can assure you that my departure is entirely voluntary. "Time brings everything," an ancient wise man said. Including new beginnings.
But I still have two weeks before signing off. This Friday night my guests include Michael Copps, the FCC commissioner who later this year will hold public hearings around the country to get your views on net neutrality. In his nine years on the FCC Mike Copps has opposed the concentration of media ownership and advocated for an open Internet. He says the recent federal court decision restricting the Commission's authority over the net shouldn't be a deterrent to the FCC's pressing forward on assuring access for all to the Web. [Check out Bill Moyers' 2006 documentary on net neutrality, NET AT RISK.]
My second guest this Friday is another staunch public interest advocate, whose anger at the predatory tactics of Wall Street approaches the intensity of the Iceland volcano. As a federal regulator many years ago Bill Black helped put in jail a lot of culprits involved in the costly savings and loan scandal of the 1980s. His book about that experience - THE BEST WAY TO ROB A BANK IS TO OWN ONE - is one of my favorites. You first saw him on the JOURNAL a year ago when he voiced his suspicion that it was more than incompetence that brought down the financial sector in 2008 and plunged the economy into recession - it was greed. When it comes to financial shenanigans, Black is the modern equivalent of Sherlock Holmes. He's been on the trail of "liars' loans" - loans issued without verifying income. He'll have more to say about "liars' loans" on the JOURNAL Friday. But in the meantime, you can check out his testimony before Congress yesterday on the fall of Lehman. He has a lot more to say on the JOURNAL Friday night - for you Tweeters, his 140-character message is simple: "Lock-em up!"
See you Friday.
Bill Moyers
© Public Affairs Television 2010
Friday, April 30, 2010
Thursday, April 29, 2010
Elizabeth Warren Pushes Wall Sreet Reform
Shahien Nasiripour
shahien@huffingtonpost.com | HuffPost Reporting
Wall Street Reform: Elizabeth Warren Challenges Republicans To Stand Up For Families
It's time for senators -- especially the Republicans -- to square their upcoming votes on financial reform with their long-professed desire to protect families, said consumer advocate and federal bailout watchdog Elizabeth Warren on Wednesday in an interview with the Huffington Post.
"Everyone in Washington claims to be on the side of families and to support reform," said Warren, a member of the 2010 TIME 100 list of the world's most influential people. "But the test is who votes to paper over problems with another regulatory system designed to fail and who votes for real Wall Street accountability even if it means that some donors will be disappointed.
"I'm tired of hearing politicians claim to support families and, at the same time, vote with the big banks on the most important financial reform package in generations. I'm deep-down tired of it."
Of all the proposals in the 1,400-page Senate bill attempting to reform Wall Street and protect American consumers, none is more contentious than the one calling for the creation of a consumer-focused agency dedicated to protecting borrowers from abusive lenders.
Reform-minded Democrats want a powerful independent entity able to defend powerless families from the banks and financial firms that squeeze profits out of customers through tricks, traps and outright predatory loans.
Moderates want to say that they voted for a bill that protects consumers -- even if it really doesn't.
Republicans profess a desire to protect consumers, acknowledging regulators' past failures, but they also don't want to stem the flow of credit or needlessly harm lenders' ability to make a buck.
Story continues below
The Senate bill, authored by the banking committee's chairman, Christopher Dodd, a Connecticut Democrat, calls for a consumer entity to be housed inside the Federal Reserve. It largely, though, adheres to Warren's four tests: a chief appointed by the president, an independent source of funding, the authority to write consumer rules and the ability to enforce them against unscrupulous lenders. The unit, thus, focuses squarely on consumers. Ensuring banks' profitability is left to banking regulators.
The Republicans' counter-proposal, released this week, fails all four of Warren's tests.
It calls for a council led by the heads of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. They'd issue rules, supervise "our nation's largest financial institutions, large non-bank mortgage originators, and other financial services providers who have violated the consumer protection statutes," and enforce the rules.
Warren isn't thrilled with the idea of allowing bank regulators -- whose top priority is to ensure the profitability of the nation's banks -- to continue to oversee consumer protection, particularly when the OCC is involved.
"The problem with consumer protection is structure. Our current consumer regulatory process is designed to fail, and if we don't fix it, it will fail again," she said. "In every major dispute between customers and banks, the OCC entered the fray on the side of the banks. Clearly, banks -- not their customers -- were the OCC's primary interest. The idea that the OCC would now be in a position to veto the new consumer agency is shameful.
"If our goal was to take any lessons from the crisis, we would do the reverse: Let's give a consumer regulator a veto over the OCC," Warren added. After all, "it wasn't a consumer regulator who presided over the biggest financial meltdown in generations."
She didn't hold back in singling out the GOP's plan, which the Harvard Law professor and bankruptcy expert said was "pure genius -- for the banks who want to keep running things."
"The substitute language on consumer protection is designed to paper over very real structural problems with a new system that is designed to fail as much as the status quo is," Warren said. "The whole idea of the substitute is to take a bunch of regulators that already failed and throw them in a committee together."
Asked if she thought Republicans such as Senate Minority Leader Mitch McConnell of Kentucky and Richard Shelby of Alabama are trying to protect families from predatory lenders, Warren let loose.
"It isn't possible to protect families and at the same time to paper over the sorts of problems that led to the crisis with just another system that is designed to fail," she said of the duo leading the GOP effort against the consumer agency. "The time has come for choosing."
With Republicans abandoning their effort to prevent Dodd's bill from being considered on the Senate floor (the bill passed a procedural hurdle on Wednesday), senators will soon begin offering and debating amendments.
Shelby hopes to weaken the consumer agency.
"This bill still contains a sprawling new consumer protection bureau that will find and force its way into facets of our economy that had nothing to do with the housing crisis," he said in a Wednesday statement. "This massive new bureaucracy would have unchecked authority to regulate whatever it wants, whenever it wants, however it wants. I am aware of no other arm of the federal government this powerful, yet so unaccountable."
On Tuesday, Shelby told reporters that the agency was "the biggest obstacle" keeping Democrats and Republicans from reaching a deal.
McConnell also has attacked the agency, as has Democrat Ben Nelson of Nebraska.
To dilute the agency's power, Shelby and others will push proposals to give bank regulators more authority to rein it in, like replacing it altogether or giving bank regulators stronger veto authority.
The GOP proposal, for example, calls for the Fed chairman, currently Ben Bernanke, to be one of three leaders atop the consumer council.
"Can someone please ask Ben Bernanke if he actually wants to spend his time serving on that committee?" Warren asked. "How much time does he plan to carve out of his day to think about kickbacks on car loans or payday rollovers?
"Let's give those issues to people who have the time and expertise to deal with them," she added.
Sources who have been in meetings with Bernanke and have heard him discuss these issues privately say it's "very hard to believe that he has any real interest" serving on a consumer council like the one envisioned by the GOP.
Another way Republicans and bank-friendly Democrats will try to weaken the bill's consumer protection provisions is by repealing the portion of the bill that attempts to give states more power in going after big banks that violate consumers. At present, states are largely unable to thanks to an aggressive legal campaign over the past decade by the OCC.
National banks like Wells Fargo, JPMorgan Chase, Bank of America and Citibank argue that it's too difficult and costly to comply with different consumer protection regimes in 50 states, so they need a national standard. The OCC agrees, and also touts the legal precedent set by numerous U.S. Supreme Court decisions interpreting the National Bank Act, the 19th-century law that forms the basis of the nation's banking system.
States and consumer advocates say the OCC protects big banks at the expense of consumers. State officials argue that the OCC essentially allows for consumers to be preyed upon and defrauded. The OCC vigorously denies the accusations.
Warren points out, though, that other industries don't get the special treatment afforded to national banks. In his proposal last summer, President Obama said the bill should end the OCC practice, known as preemption.
"Walmart operates in all 50 states, and it doesn't come to Washington demanding that Congress protect it from state laws that demand workplace safety or environmental standards or anything else," she said.
"Every other industry views compliance with state laws as a minor administrative cost of doing business. The big banks aren't worried about the difficulty of following local laws -- they have lawyers and computers to figure it out. Besides, thousands of little banks do it every day," she added.
In the House, bank-friendly Democrats led by Melissa Bean of Illinois watered down what was initially a strong provision that effectively neutered the OCC's authority to preempt state laws on everything from capping ATM fees to reducing overdraft charges and banning abusive home mortgage loans.
The bill now essentially resembles the status quo. Bean touts her vote on the House bill, which passed in December, as one for reform. So do the other legislators who voted against giving states more authority to crack down on abusive lenders, yet ultimately voted for the bill.
"There were others that thought they could get away with voting for the overall reform package while doing everything they could behind the scenes to hold water for the big banks and earn all those campaign contributions," Warren said. "We're about to find out if any senators want to play those games."
She hopes to find out soon.
"Every day that goes by without a clear set of rules in place to guide our economy into the future is a day that costs us money," she said. "Every credit card, payday loan, car loan and check overdraft that hides another fee or another bizarre interest calculation in the fine print costs American families. Every Too Big to Fail that takes on a little more risk, or leverages up just a little more, or that sucks capital away from another business that doesn't have a government guarantee at no charge costs American families. Every lousy product sold to a family, to a retirement fund, or to a local township costs American families.
"We cannot rebuild a strong and reliable economy without new rules," she continued. "We need those rules now. Not next month, not in six months, not in a year. Now."
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sVqXWoHRJZ5QYhNIEES5G4Pt-aHxyKzH-GhuvZ3td1RhZWY-_0s7ALeTMUsLyptO-QR7x1nQA9W-41eSW1YA2Fzv2_9VZdKWtA8KbWKgYC6VZyxRko-EYUTPyd-ecBzWHe23R2xV-tTau_v5FE8ik=s0-d)
Tuesday, April 27, 2010
Deficit Hawks Up To Old Tricks
Deficit Reduction: Argument by Authority
by Dean Baker
The deficit hawks are going into high gear with their drive to cut social security and Medicare. President Obama's deficit commission is having a big public event on Tuesday in which many of the country's most prominent deficit hawks will tout the need to reduce the budget deficit. The next day, Wall Street investment banker Peter Peterson will be hosting a "summit on fiscal responsibility", which will feature more luminaries touting the need to get deficits under control.
What will be missing from both of these events is any serious debate on the extent of the deficit problem and its causes. These affairs are not about promoting a real exchange of views on issues like the future of social security, Medicare, and public support for education, research and infrastructure, the purpose of these events is to tell the public that everyone agrees, we have to cut the deficit. And, this means cutting social security and Medicare. This is argument by authority.
Many public debates in the United States take this form. The issue is not what is said, but rather who says it. A few years ago all the authorities said that there was no housing bubble. The large body of evidence showing that house prices had hugely diverged from the fundamentals did not matter when the chairman of the Federal Reserve Board, the president's Council of Economic Advisers and other leading lights of the economic profession insisted that everything in the housing market was just fine.
Going further back to the mid-90s, many of this same group of deficit hawk luminaries tried to use argument by authority to cut social security. They came up with the story that the consumer price index (CPI) overstated the true rate of inflation. After workers retire, their social security benefits are indexed to the CPI. This crew (which included then Senator Alan Simpson, a co-chair of President Obama's commission, and Peter Peterson) argued that social security benefits should lag the CPI by one percentage point a year. In other words, if the CPI shows 3% inflation, then social security benefits will only rise by 2%.
That may seem a small cut, but it adds up over time. A worker retired for 10 years would have their benefits reduced by approximately 10%. A worker retired for 20 years would have their benefits cut by almost 20%.
To push this agenda, they put together a panel of the country's most prominent economists, all of whom blessed the claim that the CPI overstated the true rate of inflation by at least one percentage point. In addition to this panel, the social security cutters also pulled in other prominent economists, including Martin Feldstein, formerly President Reagan's top economist and the head of the National Bureau of Economic Research.
The social security cutters were so successful in rounding up the big names that virtually no economists were prepared to publicly stand up and question their claims about the CPI. They had near free rein, running around the country with the "all the experts agree" line.
As events unfolded they were not able to get their cut in social security benefits. (Ted Kennedy and Dick Gephardt deserve big credit on this.) But what is really interesting for the current debate is what happened to the experts' claim on the CPI. There were some changes made to the CPI, but in the view of the expert panel, the major causes of the biases in the CPI were not fixed. They concluded that even after the changes the CPI still overstated the true rate of inflation by 0.8 percentage points annually.
If this claim is really true then it has enormous ramifications for our assessment of the economy. It means, for example, that incomes and wages are rising far more rapidly than the official data show. It means that people in the recent past were far poorer than is indicated by official statistics. If the claim about the CPI being overstated is true, then we would have to re-examine a vast amount of economic research that starts from the premise that the CPI is an accurate measure of inflation.
However, almost no economists have adjusted their research for a CPI's overstatement of inflation. In fact, even the members of the expert panel don't generally use a measure of inflation that adjusts for the alleged bias in the CPI. In other words, when they are not pushing cuts to social security, these economists act as though the CPI is an accurate measure of the rate of inflation. This could lead one to question these experts' integrity.
This history should give the public serious grounds for being suspicious about the latest efforts to cut social security and Medicare. A serious discussion of the deficit will show that in the short-term the deficit is not a problem and that the longer-term deficit problem is really a problem of a broken US healthcare system. The public should not allow the deficit hawks to derail a more serious discussion with their argument by authority.
© Guardian News and Media Limited 2010
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vDK5oazhxi5l57_X31aNxVgkN4jH-DuOkJTAvWDXNccsy_G7ZyxmVzmzsXBy8hRLCvr-Rd8eRpU_umcfD27TNZN7DqwmrKpHQW2H-A5zed0k8NTdFV6txT7QO3Jx7iLn9hqhm4NaEUR5qLy4szJW0H=s0-d)
Sunday, April 25, 2010
Summers Called A Liar
Larry Summers: Professor Pants-on-Fire
by William Greider
How can I say this nicely? Larry Summers is a clumsy public liar. His noxious, condescending manner helps explain why he failed as president of Harvard. But it is the crude mendacity that ought to bother people now. The man is President Obama's top economic adviser.
Watching Summers befog the mild-mannered interviewer on the PBS NewsHour the other night, I found myself yelling back at the TV. It takes real arrogance for the former Harvard professor to imagine he can get away with such evasions and falsehoods. I lost count on the fibs. If this is how Summers explains the financial mess to the president, maybe that's why Obama has been a reluctant reformer.
Banks "made mistakes" or "errors." That is as far as Summers would go in his critique. Instead of bailing out "too big to fail" banks, he was asked, why not just limit the size of the banks?
Bad idea, Summers said.
"Most observers who study this believe that to try to break banks up into a lot of little pieces would hurt our ability to try to serve large companies, and hurt the competitiveness of the United States.... They believe it would actually make us less stable because the individual banks would be less diversified.... dealing with the simultaneous failure of many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment."
Say what? If Obama has other sources of information, like reading the newspapers, he can quickly determine that every element in Summer's statement ranges from dubious to flat-out false.
Summers's claims about what caused the banking crisis were, likewise, aggressively misleading to plain deceitful. "Regulators didn't have the specific mandate for the consumer." Wrong. The Federal Reserve and other agencies had plenty of legal authority to protect consumers. They chose not to use it. Their dereliction actually occurred on Summers's watch, when he himself was Treasury secretary under Bill Clinton.
"Regulators didn't have authority in a comprehensive way to monitor the derivatives market." This is a flaming lie. The principal regulatory agency--the Commodity Futures Regulatory Commission--was actually preparing to impose stricter oversight on derivatives in the late 1990s when Larry Summers stopped it. Summers and Republican allies intervened in 2000 with legislation that castrated that agency and prohibited it from acting further. Derivatives exploded thereafter.
When Summers was finally asked about his own responsibility for encouraging the dangerous financial instruments, he responded with a mouthful of double talk. "You know, the situation's changed hugely.... So people were actually focused on a very different set of issues." Summers even tried to make it sound like he personally had wanted to tighten the oversight, but was blocked by "Congressional opposition."
Liar, liar, pants on fire. If Obama wants to have an economic adviser so loose with the truth, that's his choice. But if the president wants his own words to be taken seriously, I suggest he keep Larry Summers off television.
© 2010 The Nation
William Greider is national affairs correspondent for The Nation. He is author of "Secrets of the Temple: How the Federal Reserve Runs the Country" and, most recently, "Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country."
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sq0stf0J-IggtqTSblP30VG8jcxvERQxKlHXEubaoLkSMJl9AJz_otwc8RBw0_u2Qipf2xLDPlzllIDJyeyY2P5ite4FLW7KwcDXF84tqh4KWlFef3fvTCvqv6Kf1NxwUHtBGIjMZQWrOomn3DgG44=s0-d)
Friday, April 23, 2010
FAIR Criticizes PBS's Frontline On Single Payer Omission
Frontline Edits Out Single-Payer
Documentary misrepresented advocates as supporters of a public option
4/23/10
Silencing supporters of single-payer, or Medicare for All, is a media staple, but PBS's Frontline found a new way to do that on the April 13 special Obama's Deal--by selectively editing an interview with a single-payer advocate and footage of single-payer protesters to make them appear to be activists for a public option instead.
The public option proposal would have offered a government-run health insurance program to some individuals as an alternative to mandatory private health insurance. Not only is this not the same thing as Medicare for All, it's an idea many single-payer advocates actually opposed, arguing that it would leave the insurance industry intact as dominant players in the healthcare business (PNHP.org, 7/20/09).
In the report, Frontline explained that insurance industry lobbyists pushed a bill in the Senate Finance Committee chaired by Sen. Max Baucus (D.-Montana) "that would include the mandate to buy insurance and kill the public option." That "didn't sit well with the president's liberal supporters," the Frontline narrator told viewers. After a clip from public-option supporter Howard Dean, a full minute and a half focused on protests: "The left counterattacked in May.... Liberal outrage arrived in Baucus' own hearing room as healthcare activists, one after another, shouted him down." Several of these protesters are seen in action, with a clip of an interview with Margaret Flowers of Physicians for a National Health Program (PNHP) saying that these were members of her group shut out of the hearings.
Now, Flowers and PNHP are leading single-payer advocates--but you'd never learn that from watching the Frontline program, which never mentions the single-payer concept. Instead, viewers were left to assume that Flowers and the protesters were public-option proponents, since that was the only progressive proposal that had been discussed. As Flowers explained (Consortium News, 4/15/10):
When the host, Mr. [Michael] Kirk, interviewed me for Obama's Deal, we spoke extensively of the single-payer movement and my arrest with other single-payer advocates in the Senate Finance Committee last May. However, our action in Senate Finance was then misidentified as "those on the left" who led a "counterattack" because of "liberal outrage" at being excluded.
Viewers saw more footage of protesters being handcuffed and led away, with an unidentified voiceover from Amy Goodman of Democracy Now! describing the arrests, and finally a voice was heard saying: "This option cannot be part of the discussion at a Senate hearing? Now, I think that's wrong."
The audience could only conclude that "this option" referred to the public option, but this conclusion would be incorrect; this voice was actually MSNBC host Ed Schultz, a single-payer supporter, and a fuller version of his quote (5/7/09) would have made it clear that he was complaining about single-payer being excluded from the hearing:
Now, let me explain single-payer for just a minute. The money comes from one source, the government. Now, you and I pay taxes, OK. The government pays the bill. It's that simple. Patients are not caught in the middle between doctors and insurance companies, no game-playing here. There's no middleman. You know? There's no decision-makers between you and your doctor. It's a clean deal.
So what Chairman Baucus has decided, this option cannot be part of the discussion at a Senate hearing? Now, I think that's wrong. I don't think it's fair.
Frontline's editors responded to Flowers' complaints, saying that they "understand the frustration of Dr. Flowers and others in what she calls the 'single-payer movement,'" but that "it's the work of journalism to report widely on a topic, then find the sharpest focus for the reporting, unfortunately leaving out much strong material along the way to shaping the clearest communication possible in the time or space allowed."
The statement also argued that
the section that included Dr. Flowers was focused on the power of the insurance lobby and showed how activists like Dr. Flowers were excluded from the debate over the bill. The protesters themselves said they were protesting the fact that they had been excluded from the debate, so we believe we presented the protests in the proper context.
But in Frontline's presentation, "activists like Dr. Flowers"--that is, single-payer advocates--didn't even exist. Having itself excluded their perspective from the debate--and even misrepresented them as supporters of a position that many of them actually oppose--there's some irony in Frontline claiming to have put this exclusion in the "proper context."
This is not the first time that Frontline has decided that a conversation about healthcare reform should exclude single-payer (FAIR Action Alert, 4/7/09). The March 31, 2009, Frontline special Sick Around America avoided discussions of national healthcare plans. This omission led Frontline correspondent T.R. Reid--who had hosted a previous Frontline special (4/15/08) that examined various public healthcare models--to withdraw from the project.
When Frontline pushed single-payer out of the debate last year, PBS ombud Michael Getler (4/10/09) weighed in on the side of critics, calling it a "missed opportunity." Getler today (4/23/10) published a column about the latest Frontline omissions, once again finding that ignoring a popular policy like single-payer is problematic:
It seems to me that to ignore something that was out there and popular with millions of people and thousands of healthcare professionals, but not really on the table, was a mistake. Although obviously tight on time, the producers should have found 30 seconds to take this into account, because many Americans support it, yet the deal makers never mention it, nor is the politics of discarding it addressed.
We're thankful that Getler has once again taken this view and encouraged a more inclusive discussion of healthcare on PBS. However, his criticism misses the critical journalistic fact that single-payer advocates were not only marginalized by Frontline--they were misrepresented.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uyxL2rLMxqOwj3W4-C1jnbleE2fS4zvfxHHi__m5dYjqBaKwxxRdX6y9aH3CLupSTPMb69twqRWy_0M7SRW6aDXpILdHK_519jOZa9SVwLN-k_HusaF7L1hhZuzdx7jM8zascm9ailcJJD34jELSEt=s0-d)
Wednesday, April 21, 2010
Airline Industry Bemoans Competition
Killing the Competition
by Jim Hightower
Golly, whatever happened to America's good ol', bold-and-brassy, can-do competitive drive?
To see a troubling sign for our nation's famed, free-enterprise frontier spirit, sneak a peek at the downward flight path of America's major airlines. These corporations have become no-can-do, anti-competition behemoths, whining that there are too many airlines, too many planes, too much competition.
"It's a jungle out there," wail top executives of the airlines. So, to enhance their "competitiveness," they are urging a rash of mergers that would consolidate the industry into fewer and even bigger corporations. Yes, in their alternate (and perverse) universe, airline CEOs say that the only way they can compete is to ... well, have less competition!
"The industry needs to evolve into a more rational structure," asserts a top official at American Airlines. "We have an industry that is too fragmented, with too many competitors and with different ideas of capacity, pricing and strategic activity."
Hmmm. Where have we heard that before? Oh yes, from Adam Smith, the 18th century Scotish economist who is considered a founding guru of the free enterprise system. The notion of "many competitors ... with different ideas of capacity, pricing and strategic activity" is precisely what Smith hailed as the proper model for free enterprise.
But the competitiveness that Smith celebrated as beneficial to society is what today's timorous airline leaders see as an irritating barrier that they simply can't hurdle. Better just to lower the competitive hurdle. As the former chairman of Continental Airlines put it: "I mean, do we really need 19 domestic airlines in the United States? I think three or four network airlines would still give you plenty of competition."
Plenty? What he and other executives mean by "a more rational structure" is one that allows a small club of gentlemen to divvy up the market, cut flights and raise ticket prices in unison — without being challenged by pesky rivals.
Soon, at least one more brand name is expected to join Northwest, Pan Am, TWA and others that have succumbed to consolidation. Both Continental and US Airwaysare presently in talks to merge with United Airlines. United's chief, Glenn Tilton, has long been a podium-pounding evangelist for the corporate gospel of shrinking the industry into a handful of more cooperative competitors. This is the route to consistent industry profits, he preaches.
Well, yeah! It's called a shared monopoly, and any goober in Guccis can make profits from that rigged deal. Of course, Tilton comes from the oil industry, where he led the merger of Texaco into Chevron, so he's partial to creating a tidier market for corporate fun and profit — consumers be damned.
Astonishingly, to press their case for consolidation, industry executives point to the example of the telecommunications giants, which went on a merger binge a decade ago. Excuse me, but consumer satisfaction with the arrogance and avarice of conglomerated and consolidated telecom providers ranks down around public approval ratings for Wall Street banksters.
Also, Tilton is hardly an inspirational figure for American workers. In fact, he's a poster boy for rapacious CEOs who try to profit by knocking down employees. He used our country's skewed bankruptcy laws to abrogate contracts, forcing flight attendants, mechanics and pilots to take massive cuts in pay, health care benefits and pensions. He did, however, exclude one employee from the pain: himself. He pocketed $6,471,062 in 2008.
You'll also be glad to know that he's been an industry leader in slashing service at United and socking customers with a plethora of new fees. Now, Tilton wants to bring his executive magic to Continental, US Air — and who knows what after that?
Thank goodness the airline chiefs are not trying to run a hot dog stand or taco trailer. The competition would kill them.
© 2010 Creators.com
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.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sIxwKbVUaaTSyLuVa40YDGDJNDAuCAMkbQiZ5RZKzXqavyS6NLD2rtC1FMBr26U8vwfn80h1aHgJ4ZszkHTV_EITwLjfQEEfQHr0iS5Dgjn2qX4F-E4yB4zu0x_9Dn5d23xab3zF5k7YvCpycrVz1t=s0-d)
Monday, April 19, 2010
Behavior of Big Banks Parasitical
Published on Monday, April 19, 2010 by The Guardian/UK
Squashing the Goldman Vampire Squid
Allegations against Goldman Sachs highlight the pressing need to break up big banks and introduce strict financial regulation
by Dean Baker
In the past few months we have learned a number of things about Goldman Sachs.
In February, we found out that it played a central role in helping Greece to hide its government budget deficit from the European Union, the financial markets, and the public at large. Goldman sold complex swaps to Greece in which it paid the Greek government for future revenue streams on items like airport landing fees. This was in effect a loan, but the swap allowed the Greek government to avoid entering the borrowed money on its books as a loan, which would have raised its budget deficit above the euro zone limits. Today of course Greece's financial meltdown is threatening the stability of the euro.
Then, just last month, Goldman was sued for sex discrimination by a former vice-president who claims that she was put on the "mommy track" after taking a maternity leave. She was fired as she was about to start a second leave. (In fairness to Goldman, Wall Street is still for the most part an all-boys club.)
But the big news is Goldman's indictment for putting together a collaterised debt obligation (CDO) from mortgage-backed securities that were expected to fail and then marketing it to its clients as a good investment. The central allegation is that in early 2007, hedge fund manager John Paulson recognised that the housing bubble was starting to collapse.
This meant that many mortgages would go bad. The subprime mortgages, in which homeowners had little or no real collateral, and were facing resets to higher interest rates, were especially vulnerable. Paulson worked out a deal with Goldman in which he would pick the mortgage-backed securities that were put into the CDO. Paulson would then bet that the CDO would go bad, by taking out credit default swaps (CDS) on the CDO. A credit default swap is effectively an insurance policy where the issuer makes up a loss if an asset goes bad.
Goldman was left with the other side of Paulson's deal, finding suckers to buy this huge piece of junk. It would have been hard to find buyers for this CDO if investors knew that Paulson had deliberately constructed it as a piece of junk to short. Therefore, according to the SEC charges, Goldman concealed Paulson's role in constructing the CDO. Goldman allegedly told investors that the CDO was constructed by neutral parties, rather than letting them know that the assets were picked by a hedge fund manager who was taking a short position.
Of course Paulson won his bet, the CDO he put together really was trash. He made nearly $1bn on this particular bet, which involved buying CDS from an insurer, which was backed up by a major European bank. This deal helped to transmit the fallout from the housing crash to Europe, leading to financial crisis there.
In similar deals constructed by Goldman, the insurer was AIG. Of course AIG was unable to pay off its side of the bet, so Paulson or other short speculators on Goldman's CDOs got their money courtesy of the taxpayers, when the government stepped in to bail out AIG. Goldman was also buying CDS to bet against the CDOs it was putting together, although it is not clear that it had bet against this particular CDO. In any case, it clearly profited from the issue since Paulson paid Goldman $15m for its services.
Goldman's conduct in this deal can be framed using an analogy from Phil Angelides, the head of the Financial Crisis Inquiry Commission. Angelides noted that Goldman has bought CDS on the CDOs that it had issued and sold. He compared this to selling a car with bad brakes and then buying insurance on the car. In fact, it looks like Goldman effectively cut the brake lines, sold the car to unsuspecting customers, and then bought the insurance policy.
In fairness to Goldman, there is no reason to believe that they are any less ethical than any of the other big Wall Street actors, just more effective.
All of this should drive home the urgency of both breaking up the big banks and some serious financial reform. The folks who should have been clamping down on this behaviour included then treasury secretary Henry Paulson, who had just left his position as Goldman CEO to take the job.
Even if we put in place a better regulatory structure, as long as financial regulation is just a conversation between friends, it will not be serious. Last year, Rolling Stone columnist Matt Taibbi described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". It turns out that Mr Taibbi was far too generous in his assessment of the huge investment bank. We need to kill the Goldman vampire squid along with the rest of the species, only when we have reduced these monsters to a manageable size can we be confident that they will be effectively regulated.
© Guardian News and Media Limited 2010
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_tKkJ6zlZeOxDjWHbCTl00GEZCAEC59Rpo6ifRq9eiIvfMGH15jiroj40qKhPYmGyAaan1vUVNwNxzk-WiCrDlxCoUIMhCIBA_SFU-e6evJ5EuokkeISZvu3OaXY3sPI0yCaptCGXjT__cZkbAFPItN=s0-d)
Squashing the Goldman Vampire Squid
Allegations against Goldman Sachs highlight the pressing need to break up big banks and introduce strict financial regulation
by Dean Baker
In the past few months we have learned a number of things about Goldman Sachs.
In February, we found out that it played a central role in helping Greece to hide its government budget deficit from the European Union, the financial markets, and the public at large. Goldman sold complex swaps to Greece in which it paid the Greek government for future revenue streams on items like airport landing fees. This was in effect a loan, but the swap allowed the Greek government to avoid entering the borrowed money on its books as a loan, which would have raised its budget deficit above the euro zone limits. Today of course Greece's financial meltdown is threatening the stability of the euro.
Then, just last month, Goldman was sued for sex discrimination by a former vice-president who claims that she was put on the "mommy track" after taking a maternity leave. She was fired as she was about to start a second leave. (In fairness to Goldman, Wall Street is still for the most part an all-boys club.)
But the big news is Goldman's indictment for putting together a collaterised debt obligation (CDO) from mortgage-backed securities that were expected to fail and then marketing it to its clients as a good investment. The central allegation is that in early 2007, hedge fund manager John Paulson recognised that the housing bubble was starting to collapse.
This meant that many mortgages would go bad. The subprime mortgages, in which homeowners had little or no real collateral, and were facing resets to higher interest rates, were especially vulnerable. Paulson worked out a deal with Goldman in which he would pick the mortgage-backed securities that were put into the CDO. Paulson would then bet that the CDO would go bad, by taking out credit default swaps (CDS) on the CDO. A credit default swap is effectively an insurance policy where the issuer makes up a loss if an asset goes bad.
Goldman was left with the other side of Paulson's deal, finding suckers to buy this huge piece of junk. It would have been hard to find buyers for this CDO if investors knew that Paulson had deliberately constructed it as a piece of junk to short. Therefore, according to the SEC charges, Goldman concealed Paulson's role in constructing the CDO. Goldman allegedly told investors that the CDO was constructed by neutral parties, rather than letting them know that the assets were picked by a hedge fund manager who was taking a short position.
Of course Paulson won his bet, the CDO he put together really was trash. He made nearly $1bn on this particular bet, which involved buying CDS from an insurer, which was backed up by a major European bank. This deal helped to transmit the fallout from the housing crash to Europe, leading to financial crisis there.
In similar deals constructed by Goldman, the insurer was AIG. Of course AIG was unable to pay off its side of the bet, so Paulson or other short speculators on Goldman's CDOs got their money courtesy of the taxpayers, when the government stepped in to bail out AIG. Goldman was also buying CDS to bet against the CDOs it was putting together, although it is not clear that it had bet against this particular CDO. In any case, it clearly profited from the issue since Paulson paid Goldman $15m for its services.
Goldman's conduct in this deal can be framed using an analogy from Phil Angelides, the head of the Financial Crisis Inquiry Commission. Angelides noted that Goldman has bought CDS on the CDOs that it had issued and sold. He compared this to selling a car with bad brakes and then buying insurance on the car. In fact, it looks like Goldman effectively cut the brake lines, sold the car to unsuspecting customers, and then bought the insurance policy.
In fairness to Goldman, there is no reason to believe that they are any less ethical than any of the other big Wall Street actors, just more effective.
All of this should drive home the urgency of both breaking up the big banks and some serious financial reform. The folks who should have been clamping down on this behaviour included then treasury secretary Henry Paulson, who had just left his position as Goldman CEO to take the job.
Even if we put in place a better regulatory structure, as long as financial regulation is just a conversation between friends, it will not be serious. Last year, Rolling Stone columnist Matt Taibbi described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". It turns out that Mr Taibbi was far too generous in his assessment of the huge investment bank. We need to kill the Goldman vampire squid along with the rest of the species, only when we have reduced these monsters to a manageable size can we be confident that they will be effectively regulated.
© Guardian News and Media Limited 2010
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
Sunday, April 18, 2010
I Believe by Samir Doshi
I Believe.
by Samir Doshi
Advocates of the sustainability movement envision a future where our global society evolves toward a culture of environmental protection, social equity, democratic participation and representation, and an economy that is predicated on the Earth as the source of capital instead of just another resource.
Unfortunately, many do not see a worldwide transition toward a sustainable and desirable future without a catastrophic event that awakens people to transition past the current direction of the status quo. The thought being that unless we are on the brink of a collapse, our society as a whole will not act, as our priorities lie elsewhere.
Author Bill McKibben and climatologist James Hansen feel we already are at a "tipping point" in regard to our impact on the climate, and if we do not decrease the current level of carbon dioxide in our atmosphere, we will witness large-scale environmental and societal consequences in the coming decades.
In his book "Revenge of Gaia," renowned scientist James Lovelock states that we have 10 years to act to avoid a large collapse, but we already are past certain tipping points, and some consequences cannot be avoided. The attempts to convey this urgency have had some results at the governmental level, but rates of soil erosion, deforestation, hunger, carbon emissions, biodiversity loss and poverty continue to rise. Sure, there are numerous initiatives and organizations that are operating at a local level to help foster this transition, but haven't we seen similar efforts during the past decades while still increasing our overall impact?
There are numerous examples to show the level of participation and attention toward these issues is larger than ever before.
Last October, McKibben and his advocacy group 350.org helped to organize the largest worldwide environmental rally to support action to reduce our carbon footprint - more than 5,200 events in 181 countries came out in full force.
In another laudable effort, Elinor Ostrom won the 2009 Nobel Prize in economics for examining the role that common-pool resources have in bringing stakeholders together to work toward sustainable and equitable solutions for all parties involved. Ostrom's research re-examines Garret Hardin's "Tragedy of the Commons," a widely referenced theory contending that population growth and individual selfishness take precedence over long-term interests of social and environmental welfare.
Paul Hakwen's recent book, "Blessed Unrest," documents how the world's largest movement of more than a million organizations emerged without any unified leader or common cause and ultimately can benefit environmental health and social equity.
Nevertheless, according to the latest Pew and Gallup polls, we see sustainable transitions take a back seat to economic development and growth, and in the U.S., national security. Again, it seems that only a catastrophic event can cause people to understand the link between the current ecological, social, and economic recessions. Neither Hurricane Katrina nor any of the recent widespread heat waves or droughts has inspired national collective and public action toward reducing natural-resource mismanagement.
Is a larger and more-devastating event needed to spur action? What about something on the order of the fantastical and unrealistic apocalyptic movie "The Day After Tomorrow," where climate change causes an overnight ice age?
Perhaps we should alter our strategy. What if we could choose hope rather than despair to instill the will for a transformation? Instead of a debilitating phenomenon, could we create something phenomenal that could inspire people so that a transformation is not only possible, but it is desirable? Remarkable and powerful initiatives are happening today that affect such grand scales they seem to be unrealistic. I believe we can realize the impossible, and it can catalyze action at a global level that will lead to a sustainable transformation.
The best example of achieving the impossible is forestry scientist Willie Smits' work in Borneo. Smits founded the Borneo Orangutan Survival Foundation (BOS) in 1991 and set out to protect orangutans that were losing their rainforest habitat in Borneo to huge levels of deforestation to develop palm plantations for biofuel oil. Smits thought that in order to save the ape species from extinction, he would have to restore their habitat.
In fewer than five years, BOS transformed 5,000 acres of degraded and lifeless tropical wasteland into a regenerated rainforest with more than 1,000 indigenous tree species, 100 native bird species, 25 percent more rainfall and 3,000 new jobs that use the sap from the native sugar palm to develop new products.
Amory Lovins, founder of the Rocky Mountain Institute, has called Smits' efforts the "finest example of ecological and economic restoration in the tropics."
Similar efforts have been occurring in New England for many years. Nearly 30 years ago, biologist and ecological designer John Todd looked at the role of vegetation and aquatic microorganisms in breaking down wastes and producing beneficial products. The research progressed into the founding of the Eco-Machine, a technology that has been used to treat human and industrial wastewater and also paved the way for the field of biomimicry. There are over 100 different Eco-Machines treating waste in numerous countries worldwide.
Along with several organizations in New England and in the Southeast, I am working toward developing similar stories in the Appalachian coal fields. Through the single-resource dependency of coal and mountaintop-removal surface mining, Appalachian communities suffer some of the highest levels of environmental degradation, poverty, infant mortality, heart disease and high-school dropout rates in the country.
It is incredible this is occurring in the most biologically diverse temperate forest system in the world, and one of the most culturally storied regions in our country. More than a million acres, 1,200 miles of streams and 450 mountains have been blown up - the tonnage of explosives used in two weeks to remove mountaintops in Appalachia is equivalent to one of the atomic bombs dropped on Japan in World War II. The coal fields have been labeled appropriately as America's "sacrifice zone" in order to perpetuate our addiction to coal.
While we need to stop the removal of mountains, we also need to help transition the area toward a more-diversified and resilient economy. In collaboration with universities and nonprofit organizations, we are researching how to regenerate the mined landscapes to develop native ecosystems that can support an industrial ecology of locally produced carbon-negative biofuel feedstocks, biochar and Agro-Eco-Park developments.
We are also working with newly established enterprises on agroforestry, sustainable agriculture and renewable-energy developments. As a partner in the Appalachian Transition Initiative headed up by David Orr and Bill Becker, we are working with local communities to transition their ecology and economy toward a resilient infrastructure, something many community members previously thought was impossible - but now feel is inevitable.
Similar to what Smits said of Borneo, Orr has stated Appalachia can be the proving ground for degraded rural landscapes all over the world: "If we can do it here," he says, "we can do it anywhere."
Copyright ©2010 Burlington Free Press
Samir Doshi is a doctoral candidate at the University of Vermont's Gund Institute and Rubenstein School for Environment and Natural Resources. His research explores the role that ecological design can play in the relationship between natural and social communities in Appalachia. He has worked as a farmer in New Zealand, developed water conservation projects in Fiji, helped establish and taught in a nonprofit school in India and even was a dishwasher for the 14th Dalai Lama. Contact Samir Doshi at Samir.Doshi@uvm.edu.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uiPN00X9y11Hc8d8NWGACXY4Gt9xf-Yz_YkRb-u4m8tQiv6fb4QL0SdNgdtdO7peh1jwGecBxojp1XXE1iKlWgY49mL6GR9uxdElfQB-VPxFmpxdQUfF51_BlkXy1TMmVpTQDyBH_-b1MVCg3IJTGe=s0-d)
Thursday, April 15, 2010
Corporations With Benefits?
Published on Wednesday, April 14, 2010 by CommonDreams.org
Corporations With Benefits
by Joyce Marcel
Margaret Thatcher once said, "There is no such thing as society: there are individual men and women, and there are families."
Maybe her view came from reading too much Ayn Rand at an impressionable age, but Thatcher's idea that the individual is all, unfettered commerce is king and that government -- taxes, regulations and anything except traffic lights and conscription of some other guy to fight for your right to be rich -- is a Big Evil, came to prevail. The common good? She sneered at it.
Thatcher came to mind because I've been reading about these new "benefit companies," or B Corps. Similar to "friends with benefits," these are corporations that allow new companies to write all kinds of social responsibility into their corporate charters.
A law supporting B Corps is currently moving through the Vermont Legislature. A similar law has been introduced in Maryland, and is expected to be discussed soon in New York State, Colorado, North Carolina, Pennsylvania and Washington State.
According to the Web site Bcorportation.net, B Corps. use "the power of business to solve social and environmental problems." They are unlike traditional responsible businesses because they "meet comprehensive and transparent social and environmental performance standards; institutionalize stakeholder interests; and build collective voice through the power of a unifying brand."
They also appear to offer protection against hostile and not-too-hostile-but-not-too-benign-either takeovers.
"You also embed your values into your corporate governing documents so they can survive new investors, new management and even new ownership," the Web site says.
In Vermont, the B Corp. bill is being promoted by in part by Ben Cohen and Jerry Greenberg, who lost control of their ice cream company when it was bought out by the giant Unilever. They say that if the bill had been in effect 10 years ago, they wouldn't have been forced to sell. They are being disingenuous, however, because they had gone public before Unilever took an interest. And once they were a public company, they were swimming with the sharks; why were they surprised that they occasionally got bit? And were eventually torn limb from limb and eaten?
Personally, I'm not against capitalism. I'm a big fan of what I call market capitalism, by which I mean something different from what Milton Freedman and the other free-market worshipers mean.
I'm a fan of the markets I adored when I lived in the Third World. You grow some potatoes, I grow some tomatoes, Juan over there decides to kill one of his cows. Around 4 in the morning, before the jungle gets too hot, we meet and sell our wares. I use the money I make selling tomatoes to buy a potato and a piece of the cow. We trade gossip, we buy, we sell, we go home, we make stew, we eat, we work, we live.
Yes, this is a naive and simplistic view of economics, but it's also a transparent one. And it illustrates that even in commerce, there has always been a common good.
The rugged individual who hacked a fortune out of the wilderness? He's a myth. No one makes it on their own. The government funded the transcontinental railroads, built the canals and put in the highways. People like Vanderbilt and Rockefeller exploited what the government gave them. Eventually, the government tried to regulate rapaciousness and succeeded during certain points in our history. Then Reagan, Clinton and the two Bushes gave away the store.
The more people who were put out of work by corporate America, the higher the stock prices, the greater the Dow, the greater the CEO executive salary, and the greater the CEO executive ego. We eventually ended up with rampant speculation, the destruction of the American economy as we know it, and now this "jobless recovery."
So a law that helps companies create themselves with built-in benefits and protections for their employees might be a very good thing. Also good: employee-owned companies, companies that protect the environment, companies that take a stand against corporate greed.
Vermont is a natural place for this kind of corporation. Many companies here already believe in the triple bottom line of profit, people and planet. Many of Vermont's large companies, for example, are employee-owned, including King Arthur Flour, Pizzagalli Construction, Carris Reels and Chroma Technology. Others, like Seventh Generation, lead the way in social responsibility. The nonprofit organization Vermont Businesses for Social Responsibility has over 300 members; it supports the new law.
Of course, the new law raises questions. Is it even necessary, since there are so few public companies here? Will investors be attracted to a company that is not entirely focused on maximizing stockholder value? If the need arises, how can a company with such restrictive by-laws be sold? Will the law attract out-of-state companies to incorporate here - thus boosting the Vermont economy? How does the state protect against the kind of hypocrisy that is rampant in the current rush to brand companies as "green"? Do we create the social responsibility police?
Still, this is a good new direction for business, and I'll be interested to see how it plays out. After all, even Thatcher herself, the grande dame of rugged individualistic free market capitalism, later said, "It is not the creation of wealth that is wrong, but the love of money for its own sake."
Someone asked Gandhi what he thought about Western civilization, he said, "I think it would be a very good idea." I say the same to the idea of corporate responsibility.
Joyce Marcel (joycemarcel.com) is a journalist and columnist in southern Vermont. You can reach her at joycemarcel@yahoo.com.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vwBXkNt-yZOdnjPc96kdVz12arwR1HAVzKL0ya2JY-1Bl6BnnuiqcCvg-lgugxCgzD9a-xJiG_1W5ziO_IGihV1hyOQla7Bgchc6VQayeLTt0C2Mjez18k9Tu1jcuoyzh8QAwok4A5xKgcbZT81C6X=s0-d)
Corporations With Benefits
by Joyce Marcel
Margaret Thatcher once said, "There is no such thing as society: there are individual men and women, and there are families."
Maybe her view came from reading too much Ayn Rand at an impressionable age, but Thatcher's idea that the individual is all, unfettered commerce is king and that government -- taxes, regulations and anything except traffic lights and conscription of some other guy to fight for your right to be rich -- is a Big Evil, came to prevail. The common good? She sneered at it.
Thatcher came to mind because I've been reading about these new "benefit companies," or B Corps. Similar to "friends with benefits," these are corporations that allow new companies to write all kinds of social responsibility into their corporate charters.
A law supporting B Corps is currently moving through the Vermont Legislature. A similar law has been introduced in Maryland, and is expected to be discussed soon in New York State, Colorado, North Carolina, Pennsylvania and Washington State.
According to the Web site Bcorportation.net, B Corps. use "the power of business to solve social and environmental problems." They are unlike traditional responsible businesses because they "meet comprehensive and transparent social and environmental performance standards; institutionalize stakeholder interests; and build collective voice through the power of a unifying brand."
They also appear to offer protection against hostile and not-too-hostile-but-not-too-benign-either takeovers.
"You also embed your values into your corporate governing documents so they can survive new investors, new management and even new ownership," the Web site says.
In Vermont, the B Corp. bill is being promoted by in part by Ben Cohen and Jerry Greenberg, who lost control of their ice cream company when it was bought out by the giant Unilever. They say that if the bill had been in effect 10 years ago, they wouldn't have been forced to sell. They are being disingenuous, however, because they had gone public before Unilever took an interest. And once they were a public company, they were swimming with the sharks; why were they surprised that they occasionally got bit? And were eventually torn limb from limb and eaten?
Personally, I'm not against capitalism. I'm a big fan of what I call market capitalism, by which I mean something different from what Milton Freedman and the other free-market worshipers mean.
I'm a fan of the markets I adored when I lived in the Third World. You grow some potatoes, I grow some tomatoes, Juan over there decides to kill one of his cows. Around 4 in the morning, before the jungle gets too hot, we meet and sell our wares. I use the money I make selling tomatoes to buy a potato and a piece of the cow. We trade gossip, we buy, we sell, we go home, we make stew, we eat, we work, we live.
Yes, this is a naive and simplistic view of economics, but it's also a transparent one. And it illustrates that even in commerce, there has always been a common good.
The rugged individual who hacked a fortune out of the wilderness? He's a myth. No one makes it on their own. The government funded the transcontinental railroads, built the canals and put in the highways. People like Vanderbilt and Rockefeller exploited what the government gave them. Eventually, the government tried to regulate rapaciousness and succeeded during certain points in our history. Then Reagan, Clinton and the two Bushes gave away the store.
The more people who were put out of work by corporate America, the higher the stock prices, the greater the Dow, the greater the CEO executive salary, and the greater the CEO executive ego. We eventually ended up with rampant speculation, the destruction of the American economy as we know it, and now this "jobless recovery."
So a law that helps companies create themselves with built-in benefits and protections for their employees might be a very good thing. Also good: employee-owned companies, companies that protect the environment, companies that take a stand against corporate greed.
Vermont is a natural place for this kind of corporation. Many companies here already believe in the triple bottom line of profit, people and planet. Many of Vermont's large companies, for example, are employee-owned, including King Arthur Flour, Pizzagalli Construction, Carris Reels and Chroma Technology. Others, like Seventh Generation, lead the way in social responsibility. The nonprofit organization Vermont Businesses for Social Responsibility has over 300 members; it supports the new law.
Of course, the new law raises questions. Is it even necessary, since there are so few public companies here? Will investors be attracted to a company that is not entirely focused on maximizing stockholder value? If the need arises, how can a company with such restrictive by-laws be sold? Will the law attract out-of-state companies to incorporate here - thus boosting the Vermont economy? How does the state protect against the kind of hypocrisy that is rampant in the current rush to brand companies as "green"? Do we create the social responsibility police?
Still, this is a good new direction for business, and I'll be interested to see how it plays out. After all, even Thatcher herself, the grande dame of rugged individualistic free market capitalism, later said, "It is not the creation of wealth that is wrong, but the love of money for its own sake."
Someone asked Gandhi what he thought about Western civilization, he said, "I think it would be a very good idea." I say the same to the idea of corporate responsibility.
Joyce Marcel (joycemarcel.com) is a journalist and columnist in southern Vermont. You can reach her at joycemarcel@yahoo.com.
Tuesday, April 13, 2010
Health Care Costs Should Be Priority
Published on Tuesday, April 13, 2010 by The Guardian/UK
Attack Wall Street, Not Social Security
by Dean Baker
Suppose our top generals described the growing threat from a hostile Middle East power. The country has tens of billions of oil dollars, a growing army, chemical and biological weapons, and is in the process of developing nuclear weapons. After carefully describing the risks posed by this country, our generals suggested an immediate attack on Canada. They explain that combating this Middle East country would be difficult, but defeating Canada is easy.
This is essentially the story of the latest attack on social security. Everyone who looks at the projections agrees; the scary budget stories being hyped in the media and by the Wall Street crew are driven almost entirely by projections of exploding healthcare costs. But instead of proposing ways to fix the healthcare system, these deficit hawks want to attack social security. They tell us that fixing healthcare is hard. By contrast they think that cutting money from social security will be relatively easy.
The facts on this are straightforward and known by everyone involved in the budget debate. The US healthcare system is broken. We pay more than twice as much per person as the average for other wealthy countries.
And it is projected to get worse. In three or four decades we are projected to pay three or four times as much per person for healthcare as people in countries like Germany and Canada. Since more than half of our healthcare is paid through public sector programmes like Medicare and Medicaid, this explosion in healthcare costs will bankrupt the government if it actually occurs. Of course it will also devastate the private sector.
On the other hand, it is easy to show that if we contain healthcare costs then our budget problems are relatively minor. In fact, the current projections of enormous budget deficits two or three decades out would flip over to projections of enormous budget surpluses if our healthcare costs were comparable to those of any other wealthy country.
Logic would dictate that our top priority should be getting our healthcare costs under control. But fixing healthcare is difficult because, as we saw in the healthcare debate, this means confronting the health insurance industry, the pharmaceutical industry, the medical supply industry, highly paid medical specialists and other powerful lobbies.
The deficit hawks don't want to fight this fight. Defeating these powerful interest groups would be a hard fight. And for the deficit hawks it would likely be an especially painful fight since these are their friends.
By contrast, the Wall Street deficit hawks don't have friends who depend on social security for their income. Wall Street investment bankers like Peter Peterson and Robert Rubin are unlikely to associate with such people. This is why they see attacking social security as easy.
Of course attacking social security makes as much sense as our generals' plan to attack Canada. The Congressional Budget Office's projections show that the programme can pay full benefits until the year 2044 with no changes whatsoever. Even after that date the programme would always pay a higher benefit than what current retirees receive, even though somewhat less than the full scheduled benefits.
The long-term problem is not that anything improper has been done with the programme; the reason that social security is projected to eventually face a shortfall is that future generations are projected to live longer than we do. This raises costs since our children and grandchildren are projected to enjoy longer retirements than we do. In short, there is no story of generational inequity here, contrary to what the Wall Street deficit hawks say.
If our deficit hawk generals are too scared to take on the healthcare industry then we also have to also make them too scared to take on social security. If we need to reduce the deficit the best place to start is a financial speculation tax. A modest set of financial transactions taxes, like the 0.5% tax on stock trades in the United Kingdom, can easily raise $150bn a year. This would go a long way toward addressing future budget shortfalls and it would raise money from people who can afford it: the Wall Street crew whose financial shenanigans led to the meltdown.
Federal Reserve board chairman Ben Bernanke recently suggested cutting social security because: "that's where the money is". That's not true, the real money is on Wall Street. Let's go get it.
© 2010 Guardian News and Media Limited
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_umCXuBzGVzbCuH8THoLEZU_Tld3G5ZQX9Gktc0QwErfcwvxQGSCM1nXhYF3YScgk12UCZ87DH7qxIZBdF_eXsgfPvcruQy0DF7O2fBKpNJUzkUQTNHDd9MYxOnJwbPR5QiOakliLnliPZDvQYKA8IU=s0-d)
Attack Wall Street, Not Social Security
by Dean Baker
Suppose our top generals described the growing threat from a hostile Middle East power. The country has tens of billions of oil dollars, a growing army, chemical and biological weapons, and is in the process of developing nuclear weapons. After carefully describing the risks posed by this country, our generals suggested an immediate attack on Canada. They explain that combating this Middle East country would be difficult, but defeating Canada is easy.
This is essentially the story of the latest attack on social security. Everyone who looks at the projections agrees; the scary budget stories being hyped in the media and by the Wall Street crew are driven almost entirely by projections of exploding healthcare costs. But instead of proposing ways to fix the healthcare system, these deficit hawks want to attack social security. They tell us that fixing healthcare is hard. By contrast they think that cutting money from social security will be relatively easy.
The facts on this are straightforward and known by everyone involved in the budget debate. The US healthcare system is broken. We pay more than twice as much per person as the average for other wealthy countries.
And it is projected to get worse. In three or four decades we are projected to pay three or four times as much per person for healthcare as people in countries like Germany and Canada. Since more than half of our healthcare is paid through public sector programmes like Medicare and Medicaid, this explosion in healthcare costs will bankrupt the government if it actually occurs. Of course it will also devastate the private sector.
On the other hand, it is easy to show that if we contain healthcare costs then our budget problems are relatively minor. In fact, the current projections of enormous budget deficits two or three decades out would flip over to projections of enormous budget surpluses if our healthcare costs were comparable to those of any other wealthy country.
Logic would dictate that our top priority should be getting our healthcare costs under control. But fixing healthcare is difficult because, as we saw in the healthcare debate, this means confronting the health insurance industry, the pharmaceutical industry, the medical supply industry, highly paid medical specialists and other powerful lobbies.
The deficit hawks don't want to fight this fight. Defeating these powerful interest groups would be a hard fight. And for the deficit hawks it would likely be an especially painful fight since these are their friends.
By contrast, the Wall Street deficit hawks don't have friends who depend on social security for their income. Wall Street investment bankers like Peter Peterson and Robert Rubin are unlikely to associate with such people. This is why they see attacking social security as easy.
Of course attacking social security makes as much sense as our generals' plan to attack Canada. The Congressional Budget Office's projections show that the programme can pay full benefits until the year 2044 with no changes whatsoever. Even after that date the programme would always pay a higher benefit than what current retirees receive, even though somewhat less than the full scheduled benefits.
The long-term problem is not that anything improper has been done with the programme; the reason that social security is projected to eventually face a shortfall is that future generations are projected to live longer than we do. This raises costs since our children and grandchildren are projected to enjoy longer retirements than we do. In short, there is no story of generational inequity here, contrary to what the Wall Street deficit hawks say.
If our deficit hawk generals are too scared to take on the healthcare industry then we also have to also make them too scared to take on social security. If we need to reduce the deficit the best place to start is a financial speculation tax. A modest set of financial transactions taxes, like the 0.5% tax on stock trades in the United Kingdom, can easily raise $150bn a year. This would go a long way toward addressing future budget shortfalls and it would raise money from people who can afford it: the Wall Street crew whose financial shenanigans led to the meltdown.
Federal Reserve board chairman Ben Bernanke recently suggested cutting social security because: "that's where the money is". That's not true, the real money is on Wall Street. Let's go get it.
© 2010 Guardian News and Media Limited
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
Monday, April 12, 2010
High Fructose Corn Syrup Critic Defends Princton Study
A high-fructose corn syrup researcher answers his critics
by Tom Laskawy
This is Part 1 of 2 posts of in-depth analysis into the breakthrough work on high-fructose corn syrup and weight gain by Princeton researchers.
_______________
I have to admit that I was fascinated to watch the fallout over the Princeton HFCS study. What I thought would generate a "oh, look, another great reason to avoid HFCS!" reaction swiftly turned into "that study doesn't prove a thing!!" -- a sentiment that nutritionists, food business columnists and the Corn Refiners Association all, remarkably, shared.
Still, several questions raised by critics are worth addressing. We contacted the lead author of the Princeton study, Bart HoebelhoebelPrinceton researcher Bart Hoebel and crew prepare to feed rats HFCS. Photo: Princeton University, Office of Communications, Denise Applewhite, to see if he could shed some light on general questions surrounding the work as well as particular objections raised by physiologist Karen Teff, PhD of the Monell Chemical Senses Center in a blog post by Nicci Micco on Eating Well's website.
The full email transcript appears below. One clarification in particular that I found interesting has to do with claims that the researchers didn't directly compare HFCS consumption to table sugar consumption in a key experiment and thus are not able to conclude that HFCS causes more and worse weight gain over table sugar. In the experiment in question, researchers gave rats access to a 10% HFCS "drink" in addition to their normal feed. The rats gained excess weight in their abdomens (which is associated with metabolic disorders) and their triglyceride levels increased (also a symptom of metablolic disorders).
Dr. Hoebel points out that previous research has firmly established that if you give rats access to a 10% table sugar "drink" in addition to their normal feed, they do not gain additional fat. In other words, their bodies are able to metabolize the extra calories without creating more weight. This previous research is referenced in the study--but was apparently overlooked by critics. In other words, while the researchers didn't compare HFCS to sugar directly in that particular experiment, we already know what happens to rats when you feed them small amounts of additional table sugar.
I understand that his answers to this and other criticisms won't convince everyone, but I hope people will read the commentary below and think about just what level of "proof" we need before questioning the wisdom of making HFCS ubiquitous in our food system. For more thoughts on why the debate over HFCS has become so contentious, see Part 2 of this analysis, which will appear Monday.
The first two questions we had for Dr. Hoebel came from Grist Food Editor Tom Philpott:
Q: Do you have any particular comments on the issue of "statistical significance"? Is it true that the results in experiments 1 and 3 both lacked statistical significance, as some have claimed?
Hoebel: No, this is not true as a general statement. We reported results that are statistically significant as stated in the article. In Experiment 1, rats with 12-or 24-hour access to HFCS gained significantly more weight than the group with 12-hour access to sucrose. In Experiment 3, the main finding is that females rats with 24-hour access to HFCS weighed the most after 7 months , and this was overall (Repeated Measures Analysis of Variance) statistically different than the sucrose and chow fed controls.
This is important and meaningful because the 24-hour HFCS females had significantly heavier fat pads in the abdominal and uterine areas. They also had higher blood triglyceride levels than the other groups, which may have contributed to the body weight and body fat.
Q: Why did "Experiment 2" in your study, which compared rats' access to HFCS over 12 and 24 hour time periods, not include sucrose? What are the clearest conclusions that can be drawn from its results as constructed? [Note to reader: this question is also addressed above--the bit about access to table sugar solution not seeming to show weight gain in rats.]
Hoebel: The goal of this paper was not exclusively to compare HFCS to sucrose. Rather, we were interested in assessing 1) limited vs. continuous access to HFCS, as our previous research has focused on binge eating of sugars, 2) differences in body weight gain as a results of access to HFCS that might result in males vs. females, and 3) the effects of long term access to HFCS on parameters such as triglyceride levels and fat accrual.
The vision of the paper was to study the effects of HFCS on body weight and obesity, not just to pit it against sucrose. The clearest conclusions that can be drawn from Experiment 2 are that, in male rats, long term consumption of HFCS increases triglyceride levels and fat accrual. To us, this is an important finding. It shows that not only will HFCS increase body fat, but it will also increase these obesogenic parameters
Next, we asked Dr. Hoebel to respond to criticisms of his work leveled by Dr. Karen Teff of the Monell Chemical Senses Center in a blog post by Nicci Micco on Eating Well:
Comment #1: The solutions of HFCS and sucrose used in all the studies—there were a few—in the Princeton report provided different levels of calories. (The HFCS, in fact, was lower in calories.)
Hoebel: It is true that the solutions of HFCS and sucrose were not offered as calorically equivalent. We note this in the Methods section of the paper. However, it is important to note that the HFCS consuming rats in Experiment 1, the short-term (2-month) study, showed greater gains in body weight while taking in fewer calories of sugar compared to the groups consuming sucrose. This led us to hypothesize that there might be something different about the way HFCS affects the body. Thus, we conducted Experiment 2, the long-term (6 month) study, and measurements showed that increased triglyceride levels and increased body fat were seen in the rats will access to HCFS, but not sucrose.
Comment #2: In one of the studies, the authors reported that male rats had a higher body weight after being exposed to 12 hours of access to the HFCS plus their typical rat chow compared to 1) standard chow alone, 2) 12 hours of access to sucrose with chow, and 3) 24 hours of access to sucrose with chow. However, they did not report or do the statistics on the change in weight. Thus, this is meaningless and poorly controlled.
Hoebel: One of the groups listed above is cited incorrectly; group 3 had 24 hours of HFCS and chow access (no sucrose access). As stated in the Methods section, the males in the three groups of Experiment 1 were “weight-matched”. That means the average (mean) weight of the rats in each group started out the same. Therefore the end-point body weights reported are in fact accurate representations of the mean body weight change. Ergo, the statistics were done on the appropriate measure. The result is meaningful and well controlled, given the use of not one but three comparison groups.
Comment #3: In a second experiment, they compared chow to chow-plus-HFCS for 24 hours and chow-plus-HFCS for 12 hours and found that access to the HFCS increased body weight. So what? Again, meaningless. This is like taking two groups of people, giving them the same diet but allowing one group to drink sweetened soda whenever they liked. Of course, they will gain weight because they are ingesting more calories. These findings have nothing to do with the controversy between sucrose and high-fructose corn syrup.
Hoebel: The result is, in fact, meaningful. As cited in the Discussion section, we have previously shown that the rats are able to compensate for the excess calories obtained when drinking 10% sucrose by taking fewer calories of chow and thereby maintaining a normal body weight. Therefore, we thought it was interesting and important to report that long-term access to HFCS causes rats to become overweight, whereas access to 10% sucrose does not. While comparisons were made to sucrose in some of the studies, this was not the sole focus of the paper. Rather, we were interested in seeing the effects of HFCS on body weight and obesogenic characteristics, and there were other variables of interest that were studied (as described in the response to the next comment).
Comment #4: Finally, in a third study, they show body weight as a percent of baseline (this is appropriate) and show that rats who had free access to both chow and HFCS gained a tiny bit more weight than chow alone, 12 hours of HFCS or 12 hours of sucrose. They did not compare it to the control of 24 hours of access to sucrose.
Hoebel: The statistical test (Repeated Measures Analysis of Variance) did show an overall significant difference between female rats with HFCS to drink 24-hr per day and the groups with chow alone or 12-hr access to sucrose, as described in the Results section. We did not compare 24-hr HFCS vs. 24-hr sucrose in this study because 1) in our previous studies (with both male and female rats) we have noted that rats with 24-hr access to 10% sucrose do not gain significantly more weight than chow-fed controls, and 2) in addition to comparing HFCS to sucrose, we were interested in the effects of limited (12-h) access to HFCS to see if it would cause binging that might enhance HFCS intake or body weight. Further, we chose to focus on assessing 12-h access as a variable because we did not know the effect of 12-hr vs. 24-hr HFCS access in female rats. This was of interest to us in light of the findings in Experiment 1 in males where we made that comparison, and because our laboratory has a long-standing interest in the effects of binge eating of palatable food. We explain and give the rationale for the choice of these variables in the Methods section.
So, yes the females drinking 24-hr HFCS showed a statistically significant increase in body weight. It is important and meaningful because these females had significantly heavier fat pads in the abdominal and uterine areas. They also had higher blood triglyceride levels than the other groups, which may have contributed to the body weight and body fat characteristics of obesity.
Our study in laboratory rats complements the growing body of literature suggesting that HFCS affects body weight and some obesogenic parameters. We cite in our paper additional evidence reported by other groups that supports our findings, and also acknowledge studies that suggest that HFCS does not affect body weight in ways different than that of sucrose. We acknowledge in the paper that at higher concentrations (e.g. 32%) sucrose has been shown to increase body weight. We are claiming, however, that at the concentrations we compared in this study, HFCS causes characteristics of obesity. The data show that both male and female rats are (1) overweight, (2) have heavier fat pads, particularly in the abdominal area and (3) have elevated circulating triglyceride levels.
For more information and references on this topic, as studied in both animals and humans, see a review published this year by George Bray, Curr Opin Lipidol. 2010 Feb;21(1):51-7."Soft drink consumption and obesity: it is all about fructose".
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uFmDi-nG6oCClW2XaprocNEorLYrkC1JG35GqoY65Arw7lS-h3gaYxctU81mMv816oi43Ajy9L42cafZZMmOoO509AgMMBVSc66bTqZWpT-zr7zAFfB61Z2ImXCma9v-10Chi6CqyhsgyDW0-gll6r=s0-d)
Subscribe to:
Posts (Atom)