Both Sides Now

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The last time I ever saw my mom I had come to New York after visiting Joni Mitchell in the studio where she was recording a new version of her 1967 masterpiece "Both Sides Now." She and Herbie Hancock played me the nearly finished track and I was blown away by it. Joni had been one of my mother's favorite artists since the 1960s and I knew she loved this song. I knew she would love this version and I felt it was a very appropriate song to listen to when transitioning from this life to the next. Joni made me a CD and I brought it to my mother's hospital room. It brought some joy and solace to her last days. That's the good, warm feeling I have about "both sides."

The other feeling is neither warm nor good and it has to do with Establishment elites blaming both sides for the country's problems. NY Times in-house GOP apologist David Brooks wrote one of his excruciating a pox on both your houses columns last week trying to make a case that Obama is as guilty as the Republican nihilists trying to wreck the government to create more DC gridlock. Well, he could be right... if Obama just gave in to all the Republican demands, there would be no gridlock. As economist and author David Korten put it on Twitter yesterday, the congressional Republican version of crisis management is to create a crisis and blame it on Obama.

We've long warned people about Republican opportunists running for office as "Democrats" and Florida freshman Patrick Murphy, a spoiled rich kid and lifelong Republican who managed to beat-- albeit barely-- war criminal Allen West in November, has already been helping prove us right. He's bonded with right-wing crackpot Robert Pittinger (R-NC) and the two sent out a poorly-written letter to every freshman urging them to sign onto a "bipartisan" effort that further pushes forward the Republican Party agenda at the expense of working families. Murphy was remarkably unsuccessful in finding many Democrats foolish enough to fall for this siren song of collaborationists but, of course, over 20 Republicans were happy to-- including noted bipartisans like domestic terrorist Steve Stockman (R-TX), Hate Talk Radio host Trey Radel (R-FL) and various sociopaths, like Ted Yoho (R-FL), who say they want to impeach President Obama. Of course, Pete Gallego, the only Blue Dog in the freshman class, signed on as well... as did several of the new New Dems.

With the political demise of the Blue Dogs, the New Dems are the corporate cat's paw inside the House Democratic Caucus. And they are, conveniently and opportunistically, the ultimate "blame both sides" band of sell-outs, creeps who use working class voters to help them move corporate agendas. Yesterday their p.r. person got them a lovely and nicely transcribed spread in one of the DC trade rags. It's all about how the New Dems Coalition has "high hopes that it will seize the political power that’s largely eluded the group." The Hill misses the whole point when it describes them as "an odd band featuring lawmakers from both the conservative Blue Dog Coalition and the liberal Congressional Progressive Caucus." I know they're not going to use a more accurate term like "corporate shills" or "Big Business whores" but lets be a little more accurate in describing who they really are-- essentially an odd band of economic conservatives, some of whom are also social conservatives and some of whom aren't. There are only two members of the Progressive Caucus among the New Dems, Jared Polis and Jim Moran, who are primarily committed to a progressive social agenda. There are 6 outright Blue Dogs, one Blue Dog who just quit (Adam Schiff) because his new district is too progressive and a whole bunch who are Blue Dogs in all but name, like Bill Owens and Rick Larsen. According to the Progressive Punch crucial vote scores so far this year, New Dem leaders Ron Kind (37.50) and Allyson Schwartz (42.86) are clocking in with more conservative voting records than half a dozen Republicans.

Kind calls his coalition "pragmatists" and hopes to create for himself the role of "a power broker." Monday, Gaius Publius had an excellent breakdown of the various letters circulating Congress about how to deal with the budget deficit.

Two letters oppose cuts, and one supports them. A letter opposing cuts from the Congressional Progressive Caucus (CPC) has 107 signatures. Another letter opposing cuts from Alan Grayson and Mark Takano has 21 signatures. And a letter by pretend-Democrat Patrick Murphy has far more Republican signatures than Democratic ones, and it supports cuts. Shame on him.

Nevertheless, you would think 107 Democrats voting No to cuts could kill a deal with cuts in it, wouldn’t you? You would be wrong-- note the difference in the first two letters. Key phrases:

CPC letter: “We write to affirm our vigorous opposition to cutting Social Security, Medicare, or Medicaid benefits in any final bill to replace sequestration. … we remain deeply opposed to proposals to reduce Social Security benefits through use of the chained CPI to calculate cost-of-living adjustments.”

Grayson-Takano letter: “We write to let you know that we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits-- including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.”

See the difference? The CPC letter “affirms opposition”; Grayson and Takano promise to vote No. Yep, the Progressive Statement Caucus is at it again. Too bad their fine statement isn’t as fine as the Grayson-Takano statement. Too bad the Progressive Statement Caucus doesn’t promise action.

To be fair, several of the signers of the CPC letter have also signed Grayson-Takano, including CPC leaders Keith Ellison and Raul Grijalva. Still, the gap between the two letters is noticeable, and the huge difference in signatures-- 107 for the We-Oppose letter, just 21 for the We-Vote-No letter-- is telling.

Of course, not one New Dem signed the Grayson-Takano letter. Of the 11 Democrats who signed onto Patrick Murphy's "We're fine with cuts" letter-from-the-freshmen-- most of the signatories were very right-wing Republicans-- there were 4 New Dems, Ami Bera (CA), Joe Garcia (FL), Patrick Murphy (FL), and Scott Peters (CA). Millionaires Scott Peters and Patrick Murphy also sent out fundraising letters this week bragging about their willingness to toss working families under the bus. Peters, who replaced Republican Brian Bilbray, starts his missive out sounding like a normal Democrat: "The nation faces the prospect of devastating across-the-board spending cuts, known as the 'sequester,' if we don’t come up with a better plan in Washington, DC by this week. I’d love to be writing to tell you that we have come to an agreement, but-- amazingly-- the Speaker sent Congress home for the past week. As important as it is for me to be spending time with the people I represent, and as much as I love being in San Diego, this week Congress should have been in Washington hammering out a smart spending plan that protects jobs and sets us on a path toward a balanced budget... I am proud to be a Democrat and will continue to fight for the principles to which my party is committed. But..."

Yes, "but." Proud to be a Democrat, will fight, principles... but. But what? Here it comes:

But I know that we need to work with members of both parties to find solutions, and I have tried to do just that, by supporting No Budget, No Pay, by joining the bipartisan reform group No Labels, and by helping to form the freshman class’ United Solutions Caucus.

Murphy also explained the United Solutions Caucus: "As you may know, I have joined with Rep. Robert Pittenger (NC) to form the Congressional United Solutions Caucus for the 113th Congress. And I wanted to write to invite you to join this caucus. This member organization is for freshman members who are dedicated to working together to find common ground and sustainable solutions to the fiscal issues facing our nation and educating other Members on the importance of bipartisanship and fiscal responsibility. Last week, Rep. Pittenger and I led a bipartisan group of 36 freshman members in sending a statement of principles to President Obama, Speaker Boehner, and Leader Pelosi urging our leaders to 'go big' with their solutions and to find bipartisan, long-term solutions to our nation's fiscal issues." Who helped elect Murphy? If you did, maybe you should remind him of what David Korten tweeted-- "the congressional Republican version of crisis management is to create a crisis and blame it on Obama"-- because he just doesn't get it. He gets this instead-- simpleminded, self-serving rhetoric for audiences back home. Fortunately, most Americans have a better grasp on what's up than these clowns do:



The great progressive strides that have made the U.S. great haven't been made by giving in to conservatives-- none of them. If it were up to the compromisers, we'd still have slavery, the monopolists would be running the country, there would be no 8 hour work week, no minimum wage, no weekends, no Social Security, no Medicare, no right of women to vote. The conservatives didn't give any of this up because they liked hanging out with some naive faux-liberals. These are dangerous Democrats is this video above. I'm embarrassed to say I know and have supported a couple of them-- not a mistake I'll be making again. Former Labor Secretary Robert Reich has more experience than all these clowns together. He agrees with them, though, that the blame game is not the way to solve the budget problem. That's about all he agrees with them on, though. What Democrats, particularly President Obama, should be doing is directly rebutting "the two big lies that fuel the Republican assault-- and that have fueled it since the showdown over the debt ceiling in the summer of 2011."

The first big lie is austerity economics-- the claim that the budget deficit is the nation’s biggest economic problem now, responsible for the anemic recovery.

Wrong. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession-- which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe.

The second big lie is trickle-down economics-- the claim that we get more jobs and growth if corporations and the rich have more money because they’re the job creators, and job growth would be hurt if their taxes were hiked.

Wrong. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep economy going.

As inequality continues to widen, and income and wealth become ever more concentrated at the top, the rest don’t have the purchasing power they need to boost the economy. That’s the underlying reason why the recovery continues to be so anemic.

These two lies-- austerity economics and trickle-down economics-- are being told over and over by Republicans and their mouthpieces on Fox News, yell radio, and the editorial pages of the Wall Street Journal. They are wrong and there are dangerous.

Yet unless they are rebutted clearly and forcefully, the nation will continue to careen from crisis to crisis, showdown to showdown.

And we will have almost no chance of reversing the larger challenge of widening inequality.

Fixing The Deficit Without Making Things Even Worse

Wall Street's proposals to fix the deficit may be wonderful for Wall Street... but they are WRONG for America

Thursday night, when everyone was finishing up with the Democratic convention in Charlotte, author David Korten (Agenda For A New Economy) tweeted a recommendation for an article by John Cavanagh ay Yes! Magazine, 7 Ways To End The Deficit (Without Throwing Grandma Under The Bus). Cavanagh is looking for a more just, more secure, more sustainable economy... as Korten did in his book. And as we have been over the past month in our exploration of Jacob Hacker's alternative to the failed Austerity Agenda Paul Ryan and Mitt Romney are pushing.

Along with 16 congressional candidates we've been looking at the proposals Hacker and his partner Nate Loewentheil have made-- "Prosperity Economics"-- to help us create prosperity across all income classes, reform our broken political system, invest for the long term and, not incidentally, fix the debt problem-- all without cutting vital government programs. Here's how Dr. David Gill, a Democrat in downstate Illinois running strongly for an open seat (IL-13) put it:

The politics of austerity embraced by Paul Ryan and the rest of the Republicans are not a solution to the ongoing economic malaise here in central Illinois-- in fact, such policies will only exacerbate the real pain that has been experienced by so many of my neighbors for so many years now. The ever-growing income gap between the extremely rich and the rest of us has reached historical proportions, and it is this gap that fuels economic misery on "Main Street." Politicians who refuse to acknowledge the need to have corporations and millionaires and billionaires pay their fair share are serving but a tiny minority of their constituents, and they are forcing us to remain in an economic quagmire. American workers are amongst the most productive in the world, but with real wages stagnant for 30 years now, with virtually all the gains going to a small fraction of society, we are left with a populace unable to enjoy the fruits of its labor, and unable to fuel economic recovery. Austerity is not the answer-- investing in people is the answer! Make the millionaires and billionaires pay their fair share. Put in place Improved Medicare for All, which will provide an economic stimulus the likes of which we've rarely seen by taking back the 30+% of our health care dollars currently wasted on the private health insurance industry. And fully invest ourselves in the Green Revolution so desperately needed to ensure clean air and clean water for generations to come, producing hundreds of thousands of jobs in the process. These are the steps which will restore our economic health and bring additional benefits in the bargain.

There was one sour note in Clinton's speech on Wednesday and one sour note in Obama's speech on Thursday-- and they were the same sour note: threats of a so-called Grand Bargain with the Republicans, a Grand Bargain based on conservative plans to further shred the social safety net. The last time Democrats entered into a Grand Bargain with the Republicans-- that time is was Teddy Kennedy and George W. Bush-- the end result was No Child Left Behind. Obama's deal with Boehner would be far worse-- and catastrophic for the Democratic Party brand and their reputation as a party willing to stand up for the legitimate aspirations of working families. It's why, in the end, even with the potential nightmare of a Romney/Ryan regime, I won't be voting (albeit safely in California) for Barack Obama. Obama could learn a lot from Cavanagh's deficit reduction proposals, far more than what he seems intent on doing for his party's corporate donors. Cavanagh reports that there are seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.

Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.

• 1.  Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.

• 2.  Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands. 
 
• 3.  Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.

These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn’t have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.

The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.

• 4.  Tax Pollution: $75 billion per year. A tax on the carbon content of fossil fuels would reduce our dependence on oil while cutting air pollution and emissions of greenhouse gases. And, as economist Robert Frank pointed out on August 25 in the New York Times, “News that a carbon tax was coming would create a stampede to develop energy-saving technologies.”

• 5.   End Fossil Fuel Subsidies: $12 billion per year. This call should unite left and right. Why would anyone want to maintain a giant government subsidy to an industry that is the world’s major contributor to fossil-fuel emissions? 350.org has made this a centerpiece of their work. We should be able to win this.

Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.

• 6.  End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.

• 7.  Close a third of our overseas bases and our Iraq operations: $21 billion per year. Over two decades after the Cold War ended, the United States still maintains roughly 1,000 military installations in other countries. A majority of the President’s own deficit commission, which includes three Republican senators-- the National Commission on Financial Responsibility and Reform-- backed a proposal to close one third of our overseas military bases.

These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit  and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.

In other words, this plan could help erase the nation’s dangerous social and environmental deficits.
Many groups-- from Jobs with Justice to National People’s Action to the AFL-CIO-- are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation’s safety net. Let’s up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.

Would you like to see the country move down this path rather than the path the GOP and Wall Street are insisting on? The Prosperity candidates will help give Obama the strength and resolve he needs to resist Austerity. Please do what you can to help them get elected in November.

American Democracy's Most Deadly Enemies Are Not Hiding In Afghanistan, Yemen And Pakistan-- They Walk Among Us... Or Drive By Us In Their Limousines

"The end of democracy & the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations." -Thomas Jefferson

We're in the midst-- and have been for several decades-- of a full-blown counterrevolution. The Revolution that is being countered is the American Revolution of the late 1770s. And the war against our democracy is being waged by the same conservative elements who fought alongside the British, many of whom fled to England, Canada and the West Indies after they lost. Except now they're winning.

No, really. They're winning... we're not even aware there's a war, let alone fighting back... with the exception of scattered OWS bands and one or two local tea party groups who aren't part of the "movement "bought out and directed by the counterrevolution itself. I was just a kid when the counterrevolution started. It's the Democratic Party's fault. For a wide variety of reasons, they just gave up on the role of protecting the interests of working families soon after FDR died. By the '50s they were complicit in allowing the tax structure to begin a radical change in such a way as to create immense wealth and power concentrated in the hands of a few families. By the '90s, financial predators were starting to call the shots in Washington. Today they outright own the Supreme Court and Republican Party and, more or less, have effective control over the DC Democrats as well.

In his essential book, Agenda For A New Economy, David Korten explains how Americans are being herded into the Ancien Régime debt slavery that the American Revolution was fought to defeat from taking root here.

In the period following World War II, full employment and high wages for working people, combined with high taxes for the rich, created the celebrated American middle class. For a historically brief period, debt slavery became a relatively rare condition, at least for whites. Then, as Wall Street fundamentalists gained control, they weakened unions, and outsourced jobs to create a downward pressure on wages while increasing the use of sophisticated advertising to promote ever more extravagant lifestyles and the use of credit card debt to finance them.

As wages continued to fall relative to the cost of living, Wall street promoted credit card and mortgage debt as the solution. Some people responded out of sheer desperation to put food on the table. Innocents simply bought into Wall Street's enticements to consume now, pay later. People were locked into ever-growing debt they could never repay, and Wall Street's take from whatever pittance they were able to earn increased, as did the total share of income going to those who lived off Wall Street profits relative to those who did honest work. Thanks to Wall street's control of the political system, this kind of indentured servitude is not only mostly legal but also is enforced by a legal system that favors the rights of property owners over the rights of people.

In a related move, Wall Street pressed for tax breaks for the rich and an expansion of military spending. The government began running up record deficits. To make up for the lost tax revenues, the government borrowed from the rich what it had formerly raised from them in taxes-- much as working people were borrowing from the rich to make up for inadequate wages. Government also became a debt slave to Wall Street.

When Wall Street got into trouble, Washington, suffering from what we might call battered-slave syndrome, responded with a bailout paid for with money borrowed from Wall Street courtesy of the Federal Reserve.

So just who are these enemies of American working families and enemies of the American democratic experiment who are working so hard to undermine both from their own obsessive, sociopathic greed? Last week Frank Rich introduced us to them in a New York column, Sugar Daddies, the old rich white men who are buying this election. They're rolling the dice that their time has come and the big take-over they've been working for is here. And they're going up against one of the weakest, most conflicted presidents in American history, someone none of them fears in the slightest.

If you want to appreciate what Barack Obama is up against in 2012, forget about the front man who is his nominal opponent and look instead at the Republican billionaires buying the ammunition for the battles ahead. A representative example is Harold Simmons, an 80-year-old Texan who dumped some $15 million into the campaign before primary season had ended. Reminiscing about 2008, when he bankrolled an ad blitz to tar the Democrats with the former radical Bill Ayers, Simmons told the Wall Street Journal, “If we had run more ads, we could have killed Obama.” It is not a mistake he intends to make a second time. The $15 million Simmons had spent by late February dwarfs the $2.8 million he allotted to the Ayers takedown and the $3 million he contributed to the Swift Boat Veterans demolition of John Kerry four years before that. Imagine the cash that will flow now that the GOP sideshows are over and the president is firmly in Simmons’s crosshairs.

His use of the verb killed was meant in jest, of course, much as Foster Friess ($1.8 million in known contributions, and counting) was joking when he suggested that “gals” could practice birth control by putting Bayer aspirin between their knees. America’s billionaires are such cards! And we had better get used to their foibles and funny bones. Whatever else happens in 2012, it will go down as the Year of the Sugar Daddy. Inflamed by Obama-hatred, awash in self-pity, and empowered by myriad indulgent court and Federal Election Commission rulings, an outsize posse of superrich white men will spend whatever it takes to have its way with the body politic and, if victorious, with the country itself. Given the advanced age of most of this cohort, 2012 may be seen as the election in which the geezer empire struck back.

Sugar daddies-- whom I’ll define here as private donors or their privately held companies writing checks totaling $1 million or more (sometimes much more) in this election cycle-- are largely a Republican phenomenon, most of them one degree of separation from Karl Rove and his unofficial partners in erecting a moneyed shadow GOP, David and Charles Koch. At last look, there were 25 known sugar daddies on the right (or more, if you want to count separately the spouses and children who pitch in). You’ve likely heard of Sheldon Adelson, the Vegas tycoon who is Benjamin Netanyahu’s unofficial ambassador to the GOP. But you may be less familiar with Irving Moskowitz, the bingo entrepreneur who funnels his profits into East Jerusalem settlements. Or Robert Mercer, the hedge-fund master of “flash trading” who poured a clandestine $1 million into ads attacking the “ground-zero mosque” and nearly another $3 million into a scale-model railroad in his Long Island mansion. Or Steven Lund, the co-founder of Nu Skin, which became “direct selling” sponsor of the Romney-run 2002 Winter Olympics after having spent much of the nineties settling complaints over false advertising and other unscrupulous practices with the Federal Trade Commission and six different states’ attorneys general.

The list of 25 does not include donors whose names we may never know: those who are legally allowed to remain anonymous when giving to patently political “social welfare” nonprofits like Rove’s Crossroads GPS. That particular Rove money drop reported to the IRS last week that nearly 90 percent of its first $76.8 million haul (from June 2010 through December 2011) had come from two dozen donors giving $1 million or more, including two contributions of $10 million each. While Obama has his own super-PAC-- “social welfare” nonprofit combo, the proceeds totaled only a pathetic $6.7 million last year. A paltry $100,000 contribution is all it takes for a Democratic donor to get priority access to the White House, according to the New York Times. George Soros is on the sidelines, and Obama so far has claimed only two sugar daddies of his own: Bill Maher and DreamWorks co-founder Jeffrey Katzenberg. Their products may at times emit noxious fumes... but even the biggest show-business bombs can’t roil the environment like, say, Harold Simmons’s vast Texas site for dumping radioactive waste.

During the primaries, the Republican sugar daddies fanned out to support various contenders, gladly bestowing tens of millions in mad money on the vainglorious crusades of Newt, the Herminator, and the two Ricks. But today these donors are starting to coalesce around Mitt. In retrospect, Romney, a one-percenter incarnate, is their natural candidate. And, for all intents and political purposes, they will own him if he makes it to the White House. The Center for Responsive Politics has calculated that just 10 percent of Romney’s donors for 2012 have been from among the hoi polloi (those contributing $200 or less)—compared with 52 percent for Santorum, 48 percent for Gingrich, and 45 percent for Obama. The only Americans fired up and ready to go for Mitt are those who can and will give to the max, all keenly mindful of the dividends certain to accrue to them in a Romney administration.

Mitt’s own coterie of Wall Street vulture capitalists is second to none in rapaciousness-- starting with the hedge-fund gambler John Paulson, who collaborated with Goldman Sachs on his megabet against the entire American housing industry before the crash. Another Romney hedge-fund patron, Paul Singer, is notorious for slick trafficking in Third World debt, with results that leave the destitute masses of countries like the Congo in a far sadder state than the hapless Goldman clients (those “muppets” we’ve been hearing about) on the losing end of Paulson’s big score. Romney also has an affinity for fellow Mormons who’ve made sugar-­daddy fortunes by peddling dubious “health products” sold by “multilevel marketing” schemes (a.k.a. pyramid selling) in which retail sales are secondary to the commissions tied to roping more suckers into the sales force. In addition to Lund of Nu Skin, there’s Frank VanderSloot, the Professor Marvel behind Melaleuca, an ­Idaho-based company that promises to help “moms be moms” and “earn a corporate income from home,” even if they don’t have the financial cushion of, say, Ann Romney. Though a promotional video on its website features women who claim to have earned as much as $500,000 selling goods like dietary supplements (which purport to remedy clogged arteries and arthritis), the average Melaleuca peddler makes just $87 per year. An industry critic, Robert L. FitzPatrick, elucidated for Mother Jones how companies like Melaleuca and Nu Skin are perfect examples of the vulture-capitalist business model: They set “the average person upon his neighbor to get at his assets, savings, and investments.” Romney, meanwhile, has applauded VanderSloot for having “vision and sense of social responsibility” that are “second to none.”

What these sugar daddies specifically want from Mitt and his party, besides the usual conservative bullet points (codified in Paul Ryan’s tax-cutting, government-shredding budget), is clear enough: the widest possible regulation-free berth for any vulture businesses they have a hand in, from nuclear waste to “health” nostrums, from new houses to financial products created from those homes’ subprime mortgages. A particularly large wish list is likely to emanate from the Koch brothers, whose privately held business interests are many. Such has been their zeal to protect their gas and oil holdings that they shoveled nearly $25 million into organizations fueling climate-change denial from 2005 to 2008-- nearly three times what Exxon­Mobil spent on such spin during that period, in Greenpeace’s accounting. To preserve another profit center, a Koch subsidiary has also backed the recently disbanded Formaldehyde Council, which argued that formaldehyde is “a natural part of our world” rather than “a complete carcinogen,” which is how it is classified by the Occupational Safety and Health Administration. osha, of course, is exactly the kind of federal agency that would lose funding and gain Koch apparatchiks as staff members in a Romney administration.

And Americans have no taste for guillotines... at least those on the left don't.

Greece-- And The Thrifty Dutch... And The Shifty Romney

Wednesday night I had dinner-- at Uncle Nick's on 8th Avenue, a low end Greek restaurant that deserves none of the accolades bestowed on it by a food press desperate for faux-authenticity-- with my old friend Bart and his grandson, Nicky, who are visiting from Amsterdam. Last time I saw Bart, or even heard from him, he didn't have any children, let alone grandchildren. We both worked at a youth center in Amsterdam, de Kosmos. I ran the macrobiotic restaurant. He was the financial controller of the whole institution. So who better to ask about how the Euro crisis that is rapidly coming down the pike in the guise of a Greek (+ Spanish/Portuguese/Italian) default would impact the industrious, thrifty Dutch? Bart said no one knows. That doesn't sound good. The next morning I found someone who does-- Nouriel Roubini ("Dr. Doom," the first guy to warn about the impending mortgage crisis here in the U.S.)-- and his prognosis... lives up to his charming nickname.

Actually, he's being very realistic in his prognosis-- Greece has to leave the Eurozone and default. (I still have a jarful of old drachmas, lira, pesetas, etc. I wonder if they'll ever be accepted as currency again.) He says it's either this year or next for an orderly Greek default. Hard to imagine it would take that long.

Greece is stuck in a vicious cycle of insolvency, lost competitiveness, external deficits, and ever-deepening depression. The only way to stop it is to begin an orderly default and exit, coordinated and financed by the European Central Bank, the European Union, and the International Monetary Fund (the “Troika”), that minimizes collateral damage to Greece and the rest of the eurozone.

Greece’s recent financing package, overseen by the Troika, gave the country much less debt relief than it needed. But, even with significantly more public-debt relief, Greece could not return to growth without rapidly restoring competitiveness. And, without a return to growth, its debt burden will remain unsustainable. But all of the options that might restore competitiveness require real currency depreciation.

The first option, a sharp weakening of the euro, is unlikely, as Germany is strong and the ECB is not aggressively easing monetary policy. A rapid reduction in unit labor costs, through structural reforms that increased productivity growth in excess of wages, is just as unlikely. It took Germany ten years to restore its competitiveness this way; Greece cannot remain in a depression for a decade. Likewise, a rapid deflation in prices and wages, known as an “internal devaluation,” would lead to five years of ever-deepening depression.

If none of those three options is feasible, the only path left is to leave the eurozone. A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth.

Of course, the process would be traumatic-- and not just for Greece. The most significant problem would be capital losses for core eurozone financial institutions. Overnight, the foreign euro liabilities of Greece’s government, banks, and companies would surge. Yet these problems can be overcome. Argentina did so in 2001, when it “pesofied” its dollar debts. The United States did something similar in 1933, when it depreciated the dollar by 69% and abandoned the gold standard. A similar “drachmatization” of euro debts would be necessary and unavoidable.

Losses that eurozone banks would suffer would be manageable if the banks were properly and aggressively recapitalized. Avoiding a post-exit implosion of the Greek banking system, however, might require temporary measures, such as bank holidays and capital controls, to prevent a disorderly run on deposits. The European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) should carry out the necessary recapitalization of the Greek banks via direct capital injections. European taxpayers would effectively take over the Greek banking system, but this would be partial compensation for the losses imposed on creditors by drachmatization.

Greece would also have to restructure and reduce its public debt again. The Troika’s claims on Greece need not be reduced in face value, but their maturity would have to be lengthened by another decade, and the interest on it reduced. Further haircuts on private claims would also be needed, starting with a moratorium on interest payments.

Some argue that Greece’s real GDP would be much lower in an exit scenario than it would be during the hard slog of deflation. But that is logically flawed: even with deflation, real purchasing power would fall, and the real value of debts would rise (debt deflation), as the real depreciation occurs. More importantly, the exit path would restore growth right away, via nominal and real depreciation, avoiding a decade-long depression. And trade losses imposed on the eurozone by the drachma depreciation would be modest, given that Greece accounts for only 2% of eurozone GDP.

Reintroducing the drachma risks exchange-rate depreciation in excess of what is necessary to restore competitiveness, which would be inflationary and impose greater losses on drachmatized external debts. To minimize that risk, the Troika reserves currently devoted to the Greek bailout should be used to limit exchange-rate overshooting; capital controls would help, too.

Those who claim that contagion from a Greek exit would drag others into the crisis are also in denial. Other peripheral countries already have Greek-style problems of debt sustainability and eroded competitiveness. Portugal, for example, may eventually have to restructure its debt and exit the euro. Illiquid but potentially solvent economies, such as Italy and Spain, will need support from Europe regardless of whether Greece exits; indeed, without such liquidity support, a self-fulfilling run on Italian and Spanish public debt is likely.

The substantial new official resources of the IMF and ESM-- and ECB liquidity-- could then be used to ring-fence these countries, and banks elsewhere in the eurozone’s troubled periphery. Regardless of what Greece does, eurozone banks now need to be rapidly recapitalized, which requires a new EU-wide program of direct capital injections.

The experience of Iceland and many emerging markets over the past 20 years shows that nominal depreciation and orderly restructuring and reduction of foreign debts can restore debt sustainability, competitiveness, and growth. As in these cases, the collateral damage to Greece of a euro exit will be significant, but it can be contained.

Like a doomed marriage, it is better to have rules for the inevitable divorce that make separation less costly to both sides. Make no mistake: an orderly euro exit by Greece implies significant economic pain. But watching the slow, disorderly implosion of the Greek economy and society would be much worse.

How lucky were the Turks that they never were accepted into this nightmare scenario? They're certainly having the last laugh now! Austerity without growth is the mean-spirited conservative consensus and even obvious failure isn't moving the needle-- at least not among the delusional bankster-class. And there are a significant number of low-info American voters-- Republicans-- eager to embrace this in the form of a economically and fiscally clueless con man. Mixing David Korten with Roubini may seem like oil and water but in his book, Agenda For a New Economy Korten advocates steep taxes on sociopathic behavior by hedge fund managers and Wall Street banksters. When confronted by the argument that these taxes will retard "financial innovation," Korten blurts out what every sane American has come to realize since he wrote his book:

Good. That is the intention. We should not be providing incentives to financial predators to come up with ever more innovative forms of theft.

Amen! And there has never been a candidate who has represented this class of financial predator more thoroughly than Mitt Romney, destroyer of businesses and destroyer of lives on the alter of quick turnover greed and avarice. Romney truly is the culmination of financial evil in a capitalism adrift from its moorings. Like Wall Street, the Romney model "doesn't develop its business plans to meet our needs; it develops its plans to place us in a position of dependence on Wall Street products that afford it the greatest opportunity to profit at our expense." But, as the Romney team was pointing out loudly as I was blogging this, at least he's white. Korten never mentioned Romney or his financial backers by name here but... well, draw your own conclusions:

Real investors commit funds and entrepreneurial energy to creating and growing businesses. People who buy and sell pieces of paper in hopes of making unearned gains on price movements are engaging in speculation, otherwise known as gambling, and those who hold the bets and distribute the winnings are bookies or dealers. Simply using honest language would help distinguish between real investors creating real wealth and speculators creating financial wealth with financial games.

Defining The Political Struggle Of Our Time

Yesterday we took a look at the congressional campaigns that pit progressive Wayne Powell against reactionary Eric Cantor, progressive Ken Aden against reactionary Steve Womack, and progressive Wenona Baldenegro against conservative Ann Kirkpatrick. The less and less relevant Democrat/Republican nomenclature is barely worth mentioning. There are three progressives dedicated to the interests of working families, all of whom are independent-minded Democrats, and there are two reactionaries (both Republicans) and a conservative (a completely corrupt Establishment Democrat) dedicated to the interests of Wall Street and other venal corporate interests.

The Republican part of this equation is simple as pie. There are no good Republicans, no honest Republicans, no patriotic Republicans, no Republicans even worth considering against the most horrible of Democrats-- and there are plenty of them in Congress, at this point at least half. The Democratic half is more complicated and more troubling. Too many Democrats-- Ann Kirkpatrick is just one-- have just given in to the cash corruption that defines DC politics... and they're crowding out real Democrats. Because the cash allows them to establish themselves as power players, you find third rate minds like Joe Crowley, Steve Israel, Steny Hoyer, Debbie Wasserman Schultz, and Allyson Schwartz in leadership positions-- although most of them are utterly devoid of any leadership capacity beyond aggregating bribes and passing them out to other Members in return for personal loyalties. That's what makes DC politics go round and round.

We saw the breathtaking number of corrupt lobbyists flocking to join Steny Hoyer in supporting Kirkpatrick against a candidate of and for the people of Arizona's first CD. Why do you think so many lobbyists are so desperate to get a weak loser like Ann Kirkpatrick back into Congress? Think about it. Or read what cutting edge populist economist David Korten had to say about this kind of politics in his brilliant book, Agenda For A New Economy. Here he is articulating a vision for a democratic America that isn't there to serve the special interests of a few super-wealthy families and corporations:

The life-serving market system we want and the life-destructive capitalist system we have feature very different structures and operate by very different rules. A healthy market system in designed to facilitate the beneficial self-organizing exchange of goods and services in response to people's self-defined needs. The capitalist system, by contrast, is designed to concentrate economic power to support the expropriation of wealth for the exclusive private benefit of the system's most powerful players.

The rules formulated and enforced by government ultimately favor one or the other of these competing systems. The tension between them defines the political struggle of our time. Government makes the rules that determine the economy's structure and priorities. Its choices commonly favor Wall Street capitalism over Main Street markets, because Wall Street controls the money and the media that drive Washington politics. The public rarely hears about options supportive of a healthy Main Street market system, and such options do not find their way into the platforms of the major political parties.

These Wall Street interests already have the GOP serving them. Working American families need a political party as well. That used to be the Democratic Party. Now it's just a fraction of the Democratic Party. That's why it's so, so important to support progressives like Raul Grijalva and the candidates he's backing... like Wenona Baldenegro, like Ken Aden and like Wayne Powell.

Can Organic Farming Feed The World?

We've been talking a lot about the premises in economist/environmentalist David Korten's latest book, Agenda For A New Economy and a couple weeks ago we used a couple of paragraphs that stuck with me, although in a different context from how Korten intended them in promoting fair trade instead of so-called "free" trade.

The elimination of national borders as barriers to the expansion of corporate control of world markets and resources didn't happen as a result of some inexorable law of nature. It came about over a period of some thirty years through the relentless effort of Wall Street interests using every political tool at their disposal to remove legal barriers to their expansion.

Wall Street did not expend all this effort to improve the health of people and the biosphere. It figured out that its ability to generate profits would be best served by a system that maximized each locality's dependence on distant resources and markets.

Take the system by which we produce, process, transport, and market our food. A farmers' market where local producers and consumers gather to engage in direct exchange offers many benefits from a community perspective. The food is fresh, the energy costs of transport are minimal, the personal exchanges enhance community ties, farmers can adapt rapidly to changing local preferences and conditions, and the local economy is cushioned from food shocks elsewhere in the world.

Wall Street has a different perspective. It observes this scene and says in effect:

What's the profit here? We need a global food system in which producers in Chile depend on customers in New York and vice versa. Then both are dependent on us to serve as middlemen. We can monopolize global markets, set prices for both producers and consumers, and force producers either to buy our seeds, fertilizers, and insecticides at whatever price we choose or to lose their market access. The greater our success in convincing local producers that they will have greater selection at lower prices when everything is traded globally, the more they will depend on us as intermediaries, the greater will be our hold on people's lives everywhere, and the more profit we can extract.

When the world's agricultural land is organized on the model of industrialized monocropping, both producers and consumers depend on the global agricultural conglomerates for their survival. Until a crisis strikes, few notice that the resulting increase in global food interdependence increases the real costs of food production and reduces food security for everyone. This in turn creates lucrative opportunities for Wall Street speculators who profit from volatile commodity prices as a weather disruption on one side of the world creates food shortages on the other.

I bet Korten wouldn't have any reason to disagree with Michael Pollan's video up top, which makes the case that organic farming can indeed feed the world. But feeding the world is hardly uppermost in the minds of our corporate overlords, as Korten made clear above. In fact, America has moved in a very different direction: starving the poor:

What would you do if you came across someone on the street that had not had anything to eat for several days? Would you give that person some food? Well, the next time you get that impulse you might want to check if it is still legal to feed the homeless where you live.  Sadly, feeding the homeless has been banned in major cities all over America. Other cities that have not banned it outright have put so many requirements on those that want to feed the homeless (acquiring expensive permits, taking food preparation courses, etc.) that feeding the homeless has become "out of reach" for most average people. Some cities are doing these things because they are concerned about the "health risks" of the food being distributed by ordinary "do-gooders". Other cities are passing these laws because they do not want homeless people congregating in city centers where they know that they will be fed. But at a time when poverty and government dependence are soaring to unprecedented levels, is it really a good idea to ban people from helping those that are hurting?

This is just another example that shows that our country is being taken over by control freaks. There seems to be this idea out there that it is the job of the government to take care of everyone and that nobody else should even try.

But do we really want to have a nation where you have to get the permission of the government before you do good to your fellow man?

It isn't as if the government has "rescued" these homeless people. Homeless shelters all over the nation are turning people away each night because they have no more room.  There are many homeless people that are lucky just to make it through each night alive during the winter.

Sometimes a well-timed sandwich or a cup of warm soup can make a world of difference for a homeless person.  But many U.S. cities have decided that feeding the homeless is such a threat that they had better devote law enforcement resources to making sure that it doesn't happen.

This is so twisted.  In America today, you need a "permit" to do almost anything.  We are supposed to be a land of liberty and freedom, but these days government bureaucrats have turned our rights into "privileges" that they can revoke at any time.

The following are some of the major U.S. cities that have attempted to ban feeding the homeless...

Philadelphia

Mayor Nutter recently banned feeding homeless people in many parts of Philadelphia where homeless people are known to congregate...

Philadelphia Mayor Michael Nutter has announced a ban on the feeding of large numbers of homeless and hungry people at sites on and near the Benjamin Franklin Parkway.

Mayor Nutter is imposing the ban on all outdoor feedings of large numbers of people on city parkland, including Love Park and the Ben Franklin Parkway, where it is not uncommon for outreach groups to offer free food.

Nutter says the feedings lack both sanitary conditions and dignity.

Orlando

Last June, a group of activists down in Orlando, Florida were arrested by police for feeding the homeless in defiance of a city ordinance...

Over the past week, twelve members of food activist group Food Not Bombs have been arrested in Orlando for giving free food to groups of homeless people in a downtown park. They were acting in defiance of a controversial city ordinance that mandates permits for groups distributing food to large groups in parks within two miles of City Hall. Each group is allowed only two permits per park per year; Food Not Bombs has already exceeded their limit. They set up their meatless buffet in Lake Eola knowing that they would likely be arrested as a result.

Houston

Down in Houston, a group of Christians was recently banned from distributing food to the homeless, and they were told that they probably would not be granted a permit to do so in the future even if they applied for one...

Bobby and Amanda Herring spent more than a year providing food to homeless people in downtown Houston every day. They fed them, left behind no trash and doled out warm meals peacefully without a single crime being committed, Bobby Herring said.

That ended two weeks ago when the city shut down their "Feed a Friend" effort for lack of a permit. And city officials say the couple most likely will not be able to obtain one.

"We don't really know what they want, we just think that they don't want us down there feeding people," said Bobby Herring, a Christian rapper who goes by the stage name Tre9.

Dallas

Dallas has also adopted a law which greatly restricts the ability of individuals and ministries to feed the homeless...

A Dallas-area ministry is suing the city over a food ordinance that restricts the group from giving meals to the homeless.

Courts dismissed Dallas’ request for a summary judgment last week, saying the case, brought up by pastor Don Hart (in video above) may indeed be a violation of free exercise of religion, as protected by the Texas Religious Freedom Restoration Act, the blog Religion Clause reported.

In the court filing, the ministry leaders argue that their Christian faith requires them to share meals with the homeless (Jesus did!) and that the requirement that even churches and charities provide toilets, sinks, trained staff and consent of the city keeps them from doing so.

Las Vegas

A few years ago, Las Vegas became the first major U.S. city to specifically pass a law banning the feeding of homeless people...

Las Vegas, whose homeless population has doubled in the past decade to about 12,000 people in and around the city, joins several other cities across the country that have adopted or considered ordinances limiting the distribution of charitable meals in parks. Most have restricted the time and place of such handouts, hoping to discourage homeless people from congregating and, in the view of officials, ruining efforts to beautify downtowns and neighborhoods.

But the Las Vegas ordinance is believed to be the first to explicitly make it an offense to feed “the indigent.”

That law has since been blocked by a federal judge, and since then many U.S. cities have been very careful not to mention "the indigent" or "the homeless" by name in the laws they pass that are intended to ban feeding the homeless.

New York City

New York City has banned all food donations to government-run homeless shelters because the bureaucrats there are concerned that the donated food will not be "nutritious" enough.

Yes, this is really true.

The following is from a recent Fox News article...

The Bloomberg administration is now taking the term “food police” to new depths, blocking food donations to all government-run facilities that serve the city’s homeless.

In conjunction with a mayoral task force and the Health Department, the Department of Homeless Services recently started enforcing new nutritional rules for food served at city shelters. Since DHS can’t assess the nutritional content of donated food, shelters have to turn away good Samaritans.

Can you believe that?

The bureaucrats are officially out of control.

In America today, it seems like almost everything is illegal.

One church down in Louisiana was recently ordered to stop giving out water because it did not have a government permit.

Well, I don't know about you, but I sure am going to give a cup of cold water to someone if they need it whether I have a permit or not.

It is as if common sense has totally gone out the window in this nation.

Over in New Hampshire, a woman is being sued for planting flowers in her own front yard.

This is the kind of thing that makes me glad that I have moved to a much more rural location.  People in the country tend to be much more relaxed.

Sadly, those that love to micro-manage others continue to get the upper hand in America.  Back in January, 40,000 new laws went into effect all over America.  The politicians continue to hit us with wave after wave of regulations and laws with no end in sight.

All of this is making America a very unpleasant place in which to live.

By the way, like us here at DWT Pollan recognizes that Congress, specifically the incredibly corrupted Agriculture committees, are at the heart of the unhealthful way we're eating in America. Another short video:

The Goldman Sachs Resignation Thing, Part II-- Fatally Flawed

Yesterday we took a look at the toxic culture around the resignation of Greg Smith from Goldman Sachs. Recall that one of my financial advisors, in explaining to me why he was leaving a senior VP job at one of the Wall Street bankster operations, said "I'm not moving from one pile of shit to another." Although I didn't identify him, he decided to elaborate on that statement today and I decided to share it.

After 12 years of working with this company, 9 with Citi Smith Barney and the last 3 with the joint venture of Morgan Stanley and Smith Barney, I'm leaving to pursue an opportunity to create a high touch wealth management platform with a smaller boutique international bank.  As we discussed, the culture at this firm has drastically changed since the merger. The company now employees a combined 18K financial advisors straining the resources that we are accustomed to using to best serve our clients. It is now a much less personal work environment where little value is placed on human capital. Senior management is less interested in who works for them and more interested in the bottom line. In order to get from 8% margins to the desired 13-15% that our CEO is stating to the Street we will for certain see more cut backs on resources. In my particular case in dealing with very high net worth clients I have lost the ability to leverage the total relationship through the firm. What I mean by this is now, even at the $100 million in assets level, no attention is paid to give them a comfort level and feel that this is a partnership. I am now viewed as a vendor! Even less attention is paid to the normal clients that have worked hard to build what they have. Now I'm not saying anything is happening to hurt the clients in any was, this is still a top notch firm with high levels of integrity, but we lost the personal touch. My whole business has been built on service and trust and I am now leaving because it feel it is impossible to deliver within this behemoth of a firm. This also goes for the other majors.

OK. I don't think David Korten gives personal financial advise. But I'd like to continue along the lines of what we saw from him yesterday in regard to the financial and economic advise he's giving a different kind of client: society. Again, from Agenda For A New Economy.

The institutional system of the old economy [so what we were dealing with yesterday in the whole Goldman Sachs thing] lacks the ability to self-correct, not only because its most powerful decision makers are insulated from the social and environmental consequences of their decisions but also because their definition of system health and success is itself fatally flawed. They take the rate at which their financial-asset accounts are growing as the measure of success and allocate resources accordingly, wholly unmindful of any connection of their decisions and rising unemployment, family and community breakdowns, collapsing fisheries, and melting glaciers.

They are most exuberant about the economy's performance when a financial bubble is rapidly inflating, a condition of disequilibrium, and respond by feeding the bubble, a path to certain system collapse.

The Keynsian economist John Kenneth Gallbraith called this self-destructive predisposition "irrational exuberance" and demonstrated that it is the condition toward which capitalist systems have consistently self-organized for more than 360 years, with no apparent ability to self-correct or learn from experience.

...Social justice and fairness are foundational underpinnings of a good society. When wealth and income are highly concentrated, the majority of people are denied basic opportunities for personal and social development. A growing body of research suggests that societies that share wealth and work equitably among all their members enjoy great physical and emotional health, stronger families and communities, less violence, and healthier natural environments. They are also more democratic and more resilient in the face of crisis. This is not a coincidence. A significant wealth disparity creates severe psychological and emotional stress and insecurity even for those at the top. Sharing prosperity brings greater health and happiness for all.

So if the system can't self-correct-- in other words, if the banksters at the top can't help but keep the irrational exuberance on full throttle regardless of the consequences to society and to the environment-- where do we turn? Government? Well, that should be the answer. But... well this week Barbara Ehrenreich dealt with why it hasn't been the answer, at least since the election of Ronald Reagan.

We call it “the nation’s capital,” but that’s increasingly a misnomer.  Consider Congress, where as last year ended 250 members, or 47% of our representatives, were millionaires, and the estimated median net worth of a senator was $2.56 million.  Or consider the city of movers, shakers, and lobbyists they live in.  In Washington D.C., “the top fifth of earners in the District make an average of 29 times the income of the bottom fifth.”  In average annual household salary that translates as $259,000 versus $9,100.  For the capital’s top 5%, that number is $473,000, “far above the $292,000 averaged by their counterparts in other large cities.”

Washington as the people’s capital?  More reasonably, it’s the capital of American wealth in a country in which the super-rich, after taking some lumps in the Great Recession, are again outpacing everyone else. [H]alf a century ago Michael Harrington pointed a finger at the world of American poverty, calling it “the other America”-- and that label stuck. Today, in a country where Hispanic and African American wealth was nearly wiped out by the bursting of the housing bubble, the elderly have increasingly seen their savings evaporate, and the poor are ever less “other” and ever more us, a new Harrington might consider labeling the world of the wildly rich, that 1% and their eternal bonuses, as “the real other America.”

It’s all too fitting that the leading Republican presidential candidate is a quarter-billionaire.  He may be running as a Washington outsider, but unlike most Americans, he’ll be right at home in the new Washington.

...In his defense, Harrington did not mean that poverty was caused by what he called the “twisted” proclivities of the poor. But he certainly opened the floodgates to that interpretation. In 1965, Daniel Patrick Moynihan-- a sometime-liberal and one of Harrington’s drinking companions at the famed White Horse Tavern in Greenwich Village-- blamed inner-city poverty on what he saw as the shaky structure of the “Negro family,” clearing the way for decades of victim-blaming. A few years after The Moynihan Report, Harvard urbanologist Edward C. Banfield, who was to go on to serve as an advisor to Ronald Reagan, felt free to claim that:

“The lower-class individual lives from moment to moment... Impulse governs his behavior... He is therefore radically improvident: whatever he cannot consume immediately he considers valueless… [He] has a feeble, attenuated sense of self.”

In the "hardest cases," Banfield opined, the poor might need to be cared for in “semi-institutions... and to accept a certain amount of surveillance and supervision from a semi-social-worker-semi-policeman.”

By the Reagan era, the “culture of poverty” had become a cornerstone of conservative ideology: poverty was caused, not by low wages or a lack of jobs, but by bad attitudes and faulty lifestyles. The poor were dissolute, promiscuous, prone to addiction and crime, unable to “defer gratification,” or possibly even set an alarm clock. The last thing they could be trusted with was money. In fact, Charles Murray argued in his 1984 book Losing Ground, any attempt to help the poor with their material circumstances would only have the unexpected consequence of deepening their depravity.

So it was in a spirit of righteousness and even compassion that Democrats and Republicans joined together to reconfigure social programs to cure, not poverty, but the “culture of poverty.” In 1996, the Clinton administration enacted the “One Strike” rule banning anyone who committed a felony from public housing. A few months later, welfare was replaced by Temporary Assistance to Needy Families (TANF), which in its current form makes cash assistance available only to those who have jobs or are able to participate in government-imposed “workfare.”

In a further nod to “culture of poverty” theory, the original welfare reform bill appropriated $250 million over five years for “chastity training” for poor single mothers. (This bill, it should be pointed out, was signed by Bill Clinton.)

Even today, more than a decade later and four years into a severe economic downturn, as people continue to slide into poverty from the middle classes, the theory maintains its grip. If you’re needy, you must be in need of correction, the assumption goes, so TANF recipients are routinely instructed in how to improve their attitudes and applicants for a growing number of safety-net programs are subjected to drug-testing. Lawmakers in 23 states are considering testing people who apply for such programs as job training, food stamps, public housing, welfare, and home heating assistance. And on the theory that the poor are likely to harbor criminal tendencies, applicants for safety net programs are increasingly subjected to finger-printing and computerized searches for outstanding warrants.

Unemployment, with its ample opportunities for slacking off, is another obviously suspect condition, and last year 12 states considered requiring pee tests as a condition for receiving unemployment benefits. Both Mitt Romney and Newt Gingrich have suggested drug testing as a condition for all government benefits, presumably including Social Security. If granny insists on handling her arthritis with marijuana, she may have to starve.

What would Michael Harrington make of the current uses of the “culture of poverty” theory he did so much to popularize? I worked with him in the 1980s, when we were co-chairs of Democratic Socialists of America, and I suspect he’d have the decency to be chagrined, if not mortified. In all the discussions and debates I had with him, he never said a disparaging word about the down-and-out or, for that matter, uttered the phrase “the culture of poverty.” Maurice Isserman, Harrington’s biographer, told me that he’d probably latched onto it in the first place only because “he didn't want to come off in the book sounding like a stereotypical Marxist agitator stuck-in-the-thirties.”

The ruse-- if you could call it that-- worked. Michael Harrington wasn’t red-baited into obscurity.  In fact, his book became a bestseller and an inspiration for President Lyndon Johnson’s War on Poverty. But he had fatally botched the “discovery” of poverty. What affluent Americans found in his book, and in all the crude conservative diatribes that followed it, was not the poor, but a flattering new way to think about themselves-- disciplined, law-abiding, sober, and focused. In other words, not poor.

Fifty years later, a new discovery of poverty is long overdue. This time, we’ll have to take account not only of stereotypical Skid Row residents and Appalachians, but of foreclosed-upon suburbanites, laid-off tech workers, and America’s ever-growing army of the “working poor.” And if we look closely enough, we’ll have to conclude that poverty is not, after all, a cultural aberration or a character flaw. Poverty is a shortage of money.

Obama Pivots Slightly Towards Fair Trade In Time For The Election

Like many progressives, we haven't been too thrilled with Obama's corporate-friendly economic agenda in general and we've been especially critical of his trade policies-- virtually the same devastating globalization trade policies pushed by the Bushes and Clinton. Economist David Korten summed them up nicely-- without even trying (or mentioning Obama)-- here in his book, Agenda For A New Economy:

The elimination of national borders as barriers to the expansion of corporate control of world markets and resources didn't happen as a result of some inexorable law of nature. It came about over a period of some thirty years through the relentless effort of Wall Street interests using every political tool at their disposal to remove legal barriers to their expansion.

Wall Street did not expend all this effort to improve the health of people and the biosphere. It figured out that its ability to generate profits would be best served by a system that maximized each locality's dependence on distant resources and markets.

Take the system by which we produce, process, transport, and market our food. A farmers' market where local producers and consumers gather to engage in direct exchange offers many benefits from a community perspective. The food is fresh, the energy costs of transport are minimal, the personal exchanges enhance community ties, farmers can adapt rapidly to changing local preferences and conditions, and the local economy is cushioned from food shocks elsewhere in the world.

Wall Street has a different perspective. It observes this scene and says in effect:

What's the profit here? We need a global food system in which producers in Chile depend on customers in New York and vice versa. Then both are dependent on us to serve as middlemen. We can monopolize global markets, set prices for both producers and consumers, and force producers either to buy our seeds, fertilizers, and insecticides at whatever price we choose or to lose their market access. The greater our success in convincing local producers that they will have greater selection at lower prices when everything is traded globally, the more they will depend on us as intermediaries, the greater will be our hold on people's lives everywhere, and the more profit we can extract.

When the world's agricultural land is organized on the model of industrialized monocropping, both producers and consumers depend on the global agricultural conglomerates for their survival. Until a crisis strikes, few notice that the resulting increase in global food interdependence increases the real costs of food production and reduces food security for everyone. This in turn creates lucrative opportunities for Wall Street speculators who profit from volatile commodity prices as a weather disruption on one side of the world creates food shortages on the other.

That said, when Obama does something right about trade, it's worth noting... and patting him on the head. This week his administration announced they had filed a request for consultations at the World Trade Organization regarding China’s export restrictions of rare earth metals, as well as tungsten and molybdenum, minerals used in a broad range of manufactured products, from auto parts and lighting to wind turbines and, ominously, advanced weapons technology. The European Union and Japan have filed suit against China as well. Then Tuesday Obama signed a bill that allows the Department of Commerce to continue to apply countervailing duties against non-market economies. Scott Paul, Executive Director of the Alliance for American Manufacturing, who has been a steady critic of Obama's trade agenda, seemed very pleased with these moves.

“It’s clear that the Administration’s trade agenda is shifting to more aggressive enforcement, which is welcome news for America’s workers and businesses as they face both subsidized Chinese competition in America and restricted access to China’s marketplace.

“Over the past few years, our activists having been working hard to make sure their elected officials know just what is at stake on trade laws, surging auto parts imports from China, and China’s unfair trade practices such as rare earth mineral export restrictions. It appears that our leaders are finally beginning to listen.

“We are pleased that the Obama Administration and Congress are cracking down on China’s cheating, but there is much more work to do. Our trade deficit with China is growing, not shrinking. China has devalued the Yuan again this year. And, the subsidies Beijing is lavishing on its auto parts sector are threatening the very heart of our manufacturing recovery in America."

Now, as Dean Baker pointed out in his excellent post of why dangerous Obama crony Larry Summers is the wrong person for the World Bank presidency, it would be a mistake for progressives to sit back and support whatever Obama and his team dish out.

According to the rumor mills and betting lines, Summers is now the top contender for World Bank president. If track records mattered, Summers would be nowhere in contention.

Just looking at the economics (i.e. ignoring his stormy tenure as president of Harvard), Summers would not seem to be the sort of person who should be given another position of responsibility. In the 90s, Summers was a top advisor and eventually Treasury Secretary in the Clinton administration as it rushed full speed down the road of financial deregulation. He was among the loud voices dismissing then head of the Commodity Futures Trading Commission Brooksley Born’s concerns about unregulated derivatives.

Summer’s was also a central figure in the engineering of the bailout from the East Asian financial crisis. This bailout sent the dollar and the trade deficit soaring. The resulting build up of reserves by developing countries created the fundamental imbalance in the U.S. and world economy, which still has not been corrected.

Summers completely bought into the Great Moderation myth that Alan Greenspan had somehow ended economic instability for all time. At the famous Greenspanfest held at Jackson Hole in 2005, Summers derided the skeptics as financial “Luddites.” ... Summers’ record as an economic adviser has provided a trail of disasters that few can match. Does it make sense to give him yet another opportunity to do even more damage?

As for Obama, this is what he had to say about the fair trade component of his usually toxic trade agenda (conventional, Republican "Free" trade):

[O]ne of the things that I talked about during the State of the Union address was making America more competitive in the global economy. The good news is that we have the best workers and the best businesses in the world. They turn out the best products. And when the playing field is level, they’ll always be able to compete and succeed against every other country on Earth. 

But the key is to make sure that the playing field is level. And frankly, sometimes it’s not. I will always try to work our differences through with other countries. We prefer dialogue. That’s especially true when it comes to key trading partners like China. We've got a constructive economic relationship with China, and whenever possible, we are committed to working with them to addressing our concerns. But when it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices.
 
Since I took office, we’ve brought trade cases against China at nearly twice the rate as the last administration, and these actions are making a difference. For example, we halted an unfair surge in Chinese tires, which has helped put over 1,000 American workers back on the job. But we haven't stopped there. 

Two weeks ago, I created a Trade Enforcement Unit to aggressively investigate any unfair trade practices taking place anywhere in the world. And as they ramp up their efforts, our competitors should be on notice: You will not get away with skirting the rules. When we can, we will rally support from our allies. And when it makes sense to act on our own, we will. 
 
I just signed a bill to help American companies that are facing unfair foreign competition. These companies employ tens of thousands of Americans in nearly 40 states. Because of subsidies from foreign governments, some of their foreign competitors are selling products at an artificially low price. That needs to stop.

This morning, we’re taking an additional step forward.  We’re bringing a new trade case against China-- and we’re being joined by Japan and some of our European allies. This case involves something called rare earth materials, which are used by American manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones. 

We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials-- which China supplies. Now, if China would simply let the market work on its own, we’d have no objections. But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow. 
 
Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing. We've got to take control of our energy future, and we can’t let that energy industry take root in some other country because they were allowed to break the rules. So our administration will bring this case against China today, and we will keep working every single day to give American workers and American businesses a fair shot in the global economy. 
 
We're going to make sure that this isn’t a country that’s just known for what we consume. America needs to get back to doing what it's always done best-- a country that builds and sells products all over the world that are stamped with the proud words: "Made in America." That’s how we create good, middle-class jobs at home, and that’s how we're going to create an economy that’s built to last.

Damn, I wish we had more Democrats like David Gill in office! Take a look at his new video. Then let it sink in and see if you can see your way clear to contributing to his campaign:

David Stockman: "We've Learned No Lessons"

Liberals like and admire Bill Moyers-- a lot. But this episode with Stockman (above) isn't going to offer comfort or solace to Democratic Beltway Insiders any more than it will please Republican Beltway Insiders. It's all about how crony capitalism is eating the country from the inside. As every Republican running for office continues to pledge undying fealty to Ronald Reagan, they are willfully forgetting the uncomfortable lesson Reagan found out when he tried the trickle down economics being pushed again today by Paul Ryan and the rest of the GOP hierarchy-- charlatans and flimflam men whose electoral careers are being underwritten by the banksters, the oil companies, the Military Industrial Complex and the insurance companies.

When Reagan's budget director, David Stockman, talks about the financialization of the economy-- and how that produces nothing of value at all-- he sounds almost like David Korten, the economist who most represents the ideas behind the Occupy/99% Movement. Listen to disillusioned Republican Stockman above with Moyers. Here's disillusioned Democrat Korten from his book Agenda For A New Economy:

Wall Street is a world of pure finance in the business of using money to make money by whatever means for people who have money. Any involvement in the production of real good and services is purely an incidental byproduct. Maximizing financial return is the game. To that end, Wall Street institutions have perfected the arts of financial speculation, corporate-asset stripping, predatory lending, risk shifting, leveraging, and debt-pyramid creation. Successful players are rewarded with celebrity, extravagant perks, and vast financial fortunes.

Wall Street players justify their actions with the claim that they are creating wealth for the benefit of society, a convenient bit of self-delusion...

The term free market is a code word for an unregulated market that allows the rich to consume and monopolize resources for personal gain free from accountability for the broader social and environmental consequences. A free market rewards financial rogues and speculators [think Romney and Bain, in fact keep them in mind for the rest of this post] who profit from government, social, and environmental subsidies, speculation, the abuse of monopoly power, and financial fraud, creating an open and often irresistible invitation to externalize costs and increase inequality.

Last week Moyers and Stockman explored the tight connection between Wall Street and our governing elites in DC, particularly in the White House-- although Stockman, a former congressman from Michigan, also gets into the problem inherent in a Congress financed by special interests. He advocates banning corporate contributions entirely-- and putting a $100 cap on individual contributions. A different kind of Republican than the kind we're hearing about these days, huh? He's very candid with Moyers about how money dominates politics, distorting free markets and endangering democracy: “As a result we have neither capitalism nor democracy. We have crony capitalism.” He shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who’s really in charge. “We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward,” Stockman tells Moyers. Watch it all the way through. It's riveting stuff.

Former Secretary of Labor Robert Reich takes a more direct approach to the lessons we haven't learned-- a surtax on the super wealthy.

Let Santorum and Romney duke it out for who will cut taxes on the wealthy the most and shred the public services everyone else depends on.

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth-- not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets-- including stocks and pension-fund holdings-- are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes-- whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class-- lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap-- already wider than the nation’s income gap-– has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth-- and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit-- shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

There probably isn't a more dedicated progressive running for Congress anywhere in the country than Norman Solomon. I know that sounds like quite the statement. But I mean it. Earlier today I talked with him about what Stockman and Reich had to say about crony capitalism and how these policies are effecting our democracy. His response will help you understand why Blue America endorsed him and why we're so enthusiastic about his race against a bunch of garden variety Democratic hacks (nice ones, I'm sure). Please help us get Norman to the $10,000 mark with as small or large a contribution as you can afford for someone who will actually be able to replace Lynn Woolsey and Dennis Kucinich in Congress.

What's at stake is democracy-- rule by the people, as opposed to rule by big money. But I will be blunt here: Progressives must take much more seriously the necessity of gaining electoral power for the 99 percent. While we may often say and write very perceptive things, government continues to largely function in the service of large corporate interests. As an antidote to the poison of "corporate personhood," we've got to nurture genuine grassroots campaigns that are infused with progressive values.

That's what my campaign for Congress is about. We already have 850 volunteers, 3,800 individual donors and tremendous momentum, while I refuse to take a dime of corporate PAC money. In this "grassroots vs. AstroTurf campaign," voting begins in less than 60 days for an open seat in the new coastal district north of the Golden Gate Bridge. Right now, time is of the essence. How many lawn signs and brochures will our campaign be able to afford as we go to the printer later this month? In a significant way, that's up to you.