Introduction:
The relation between imperialism and democracy has been debated and discussed over 2500 years, from fifth century Athens to Liberty Park in Manhattan. Contemporary critics of imperialism (and capitalism) claim to find a fundamental incompatibility, citing the growing police state measures accompanying colonial wars, from Clinton’s anti-terrorist laws, and Bush’s “Patriot Act” to Obama’s ordering the extrajudicial assassination of overseas US citizens.
In the past, however, many theorists of imperialism of varying political persuasion, ranging from Max Weber to Vladimir Lenin, argued that imperialism unified the country, reduced internal class polarization and created privileged workers who actively supported and voted for imperial parties. A historical, comparative survey of the conditions under which imperialism and democratic institutions converge or diverge can throw some light on the challenges and choices faced by the burgeoning democratic movements erupting across the globe.
The Nineteenth Century
During the 19th century, European and US imperial expansion covered the world. In tandem, democratic institutions took root, the franchise was extended to the working class, competitive parties emerged, social legislation was passed, and the working class increased its representation in the legislative chambers.
Was the simultaneous growth of democracy and imperialism a spurious correlation reflecting divergent and conflicting underlying forces, one favoring overseas conquest and another promoting democratic politics? In fact, there was a great deal of overlap between pro-imperialist and democratic politics and not simply among the elites.
Throughout the 19th and especially in the 20th century, important sectors of the labor and social democratic parties and numerous prominent leftists and revolutionary socialists, at one time or another combined support for workers’ demands and imperial expansion. None other than Karl Marx, in his early journalistic writings in the New York Herald Tribune critically supported the British conquest of India as a “modernizing force” breaking down feudal barriers, even as he supported (with criticism) the European revolutions of 1848.
The ruling classes, the driving force of imperialism, were divided: Some saw the democratic reforms, “citizenship”, as a means of raising mass conscription for imperial wars; others feared that the democratic reforms would enhance social demands and undercut the accumulation of capital and rule by the elite. Both were right: Along with greater popular participation came virulent modern nationalism, which fueled empire building. At the same time mass access to democratic rights led to heightened class organizations, which threatened or challenged class rule. Within the ruling classes, democratic institutions were seen as an arena to peacefully resolve conflicts between competing sectoral elites. But once they took a mass character they were perceived as political threats.
Imperial and class-based parties competed for voters among the newly enfranchised urban workers and rural poor. In many cases, imperial and class allegiances “co-existed” within the same individuals. The question of which of the two, imperialist or class consciousness would become ‘operative’ or ‘salient’ was in part contingent on the success or failures of the larger competing political projects.
In other words, when imperial expansion succeeded in easy conquests resulting in lucrative colonies (especially settler colonies) democratic workers embraced the empire. This was the case because empire enhanced trade, namely profitable exports and cheap imports, while protecting local markets and manufacturers. These in turn expanded employment and wages for substantial sectors of the working class. As a result, labor and social democratic parties and trade unions did not oppose imperialism, indeed many supported it.
In contrast, when imperialist wars led to prolonged bloody and costly conflicts, the working class shifted from initial chauvinist enthusiasm to disenchantment and opposition. Democratic demands to ‘end the war’ led to strikes challenging unequal sacrifice. Democratic and anti-imperialist sentiments tended to fuse.
The conflict between democracy and imperialism became even more apparent in the case of an imperial defeat and military occupation. Both the defeat of France in the German-French war of 1870-71 and the German defeat in the First World War led to massive democratic socialist uprisings (the Paris Commune of 1871 and the German revolution of 1918) attacking militarism, ruling class domination and the entire imperial capitalist institutional framework.
The Imperialism and Democracy Debate and ‘History from Below’
Historians, especially practitioners of the fashionable “history from below”, exaggerated the democratic values and struggles of the working class and understated the prolonged and deep felt support among important sectors for successful imperial expansion and conquest. The notion of ‘inherent’ or ‘instinctual’ class solidarity is belied by the active role of workers in imperial conquest as soldiers, overseas settlers, merchant mariners and overseers. Imperial collaborators and empire loyalists were numerous among English and French workers and, especially later, within the US labor movement.
The theoretical point is that the pre-eminence of democratic over imperial consciousness and action among workers is contingent on the practical material outcomes of imperial policies and democratic struggles.
Workers and Imperialism
Empire building makes demands on workers to produce more for less in order to export and invest profitably in colonized regions. This led to capital-labor conflict, especially in the initial phase of imperial expansion. As imperial rulers consolidated their control over the colonized countries they intensified exploitation of markets, labor and resources. Imperial exports destroyed local competitors. Profits rose, wages increased and workers turned from initial opposition toward imperialism to demanding a share of the increasing income of the export oriented manufacturers. Labor leaders and trade unionists approved of the policies of ‘imperial preference’, which protected local industries from competition and privileged monopoly control of colonial markets. They did so because imperial policies protected jobs and raised living standards.
Workers who were active in social struggles, blacklisted or jailed, voluntarily moved or were exiled to colonized countries. Once settled overseas, they were given privileged access to better paying jobs as overseers, skilled employees or promoted to managerial positions. Imperial based militant workers, once overseas, became colonial collaborators. Many encouraged former workmates, relatives and friends to join them as successful settlers or contract workers. The ‘domestication’ of workers and the reconciliation of democratic and imperialist sentiments was a cause and consequence of successful imperialism.
Empire Loyalism: Not by Bread Alone
While material benefits accruing to workers from “successful imperialism” are one factor enhancing workers’ imperial consciousness, this was reinforced by symbolic gratification, the sense of being a member of the “leading country in the world” where “the sun never sets on the empire”, was equally important. It is rare to find a country where the majority of workers express “solidarity” with the exploited miners, plantation workers or displaced peasants and indigenous small landholders in the ‘colonies’. The stronger the hold of the colonial power, the greater the ‘colonial opportunities’, the longer the colonial ties, the deeper the economic penetration, and the stronger the sense of imperial superiority among the imperial states’ workers. It is not surprising that the British workers, the unions and Labor Party raised few objections to the savagery of the imperial opium wars against China , the imperial induced genocidal famines in Ireland in the 19th century and India in the 20th century. Likewise, the French workers’ parties – Socialists especially – were in the forefront of the post WWII colonial wars against Indo-China and Algeria only turning against them in the face of imminent defeat and internal disintegration. In the same vein, US successful colonial wars against Cuba and the Philippines, its invasions of Caribbean and Central American countries were supported by the American Federation of Labor and many ‘ordinary workers’, even as a minority of radicalized workers opposed these wars. The ‘partial turn’ of labor against US colonial wars which occurred during the Korea , Vietnam and Afghanistan wars was a result of prolonged losses and high economic costs with no victory in sight. It should be added that US workers, in opposing the imperial wars, expressed no solidarity with the national liberation and workers movements of the colonized countries.
Imperialism and the “True Democrats”
To argue, as some on the Left have, that imperialism does not coexist with “true” democracy, is to argue that the last 150 years have been devoid of free elections, party competition and citizens rights, however abbreviated, especially over the past decade. The reality is that imperial intervention and expansion has drawn precisely from citizens’ sense of “obligation” to uphold the democratic institutions, which has enabled imperial leaders to elicit legitimacy and active citizen support or compliance in waging bloody, even genocidal, colonial wars.
If democracy has not usually been an obstacle to imperial expansion – indeed a facilitator under certain circumstances – under what conditions have workers and citizens movements turned against imperial wars? What has been the political response of the ruling class when the majority of electorate has turned against imperial wars? In other words: When the democratic institutions no longer function as vehicles for imperial policies, what gives?
From Imperial Democracy to Imperial Police State
The past ten years provide important lessons on the relation between imperialism and democracy in the United States .
Beginning with the controversial political circumstances surrounding known terrorists’ gaining access to the US and subsequently hijacking the airplanes on 9/11/2001, the US government launched two major colonial wars and numerous overt ‘clandestine’ ground and air attacks in Somalia , Yemen , Pakistan , Libya and other countries. The “global war on terror”, launched under the Bush regime, and implemented by non-elected senior militarist – Zionist officials in co-operation with NATO and Israel was supported by the democratically elected Congress. For that matter the vast majority of the electorate, influenced by an immense propaganda campaign of fear, media manipulation and lies endorsed the wars on terror.
Given the unprecedented scope and breadth of the wars, (a global war on terror), the vast increase in military spending and the huge outlays for an all encompassing internal repressive (security) apparatus (Homeland Security), a new executive-centered police state was constructed which superseded the existing democratic institution and rights of citizens.
The trajectory of imperial politics moved from early military successes to problematic prolonged occupation. This led to escalating resistance, growing state expenditures , a deepening fiscal crises , social decay and rising political opposition.
As in the past, contemporary imperial wars that are prolonged, costly and with no decisive victory in sight, have led to citizen disenchantment, followed by increased open rejection. The wage and salaried majorities who voted for imperial policymakers and backed their enabling legislation, including laws (Patriot Act) which suspended basic civil and constitutional rights, have turned away from the imperial agenda. Today the democratic majority prioritize their class, economic interests, especially in the face of a prolonged recession and unemployment and underemployment of close to 20%. Beginning in 2008-2011 endless wars and prolonged crises have set in motion a conflict between democracy and imperialism.
In other words, the democratic majority has become an obstacle to the implementation and pursuit of imperial wars. Imperial military activity in Iraq , Afghanistan , Libya , etc. did not lead to quick victories, the conquest of lucrative export markets and take-over of natural resource. Jobs were not created and no benefit accrued to employees and workers in the imperial country. High expenditures for arms undercut public investments in labor intensive employment in critically overdue infrastructures projects. The small number of dangerous jobs in occupied countries was unattractive and too risky for the unemployed.
In other words, unlike most previous imperial-colonial wars, none of the plundered wealth was used to secure workers loyalty to the empire. The burden of empire progressively undercut wage and salaried workers’ living standards. Over time, regressive taxation gradually eroded any sense of chauvinist grandeur or superiority. Instead citizens of the empire developed a political inferiority complex. Faced with determined Islamic opposition and China’s rising economic power, exaggerated bellicosity among a minority and critical introspection among the majority took hold. Popular consciousness of “something basically wrong” in Washington and Wall Street took over. The earlier war chants and mindless flag-waving, as the armies of Empire marched to Afghanistan and Iraq , were replaced by angry defeatism directed at misleaders. Over 80% of the public now articulates a negative view of Congress, rejecting both war parties. Similar negative views are held toward the White House, the Pentagon and Homeland Security.
After a decade of war and four years of economic crisis, mass protests erupted, the “Occupy Wall Street” movement puts new options on the table, displacing the imperial agenda with a powerful denunciation of the militarist-financial elite.
The executive rulers, especially the judicial, intelligence and police apparatuses increasingly implemented arbitrary police state measures. Tens of millions are subject to surveillance by Homeland Security. The police state intercepts billions of faxes, e-mails, web sites and taps telephone calls. The link between imperialism and democracy broke at the point where declining empire no longer could secure the electorate’s support or compliance.
More and more bizarre terrorist plots were fabricated by the intelligence agencies. The Iranian bomb plot against the Saudi Arabian ambassador to Washington was the most primitive and crude effort to regain public support for imperial militarism in the Gulf region. Apart from the politically influential, but infinitely small, pro-Israel Zionist power configuration, US public opinion is not distracted from its domestic agenda; its quest for jobs at home and opposition to Wall Street.
As the conflict between imperialism and democracy intensifies, the previous ‘consensus’ fractures. The White House and Congress opt for imperialism backed by a profoundly anti-democratic police state. The majority of the electorate presses forward, utilizing their remaining democratic rights to change the political agenda from empire toward a social republic.
Conclusion
We have argued that empire and democracy have been complementary in times of ascendant imperialism. We have shown that when wars of conquest have been short and inexpensive, and when the results have been lucrative for capital and job-creation for labor the democratic majorities joined in support of imperial elites. Democratic institutions flourished when overseas empires provided markets, cheap resources and raised living standards. Workers voted for imperial parties, held positive opinions of executive and legislative officials, and applauded the colonial war veterans (our troops). Some even volunteered and joined the military. With vast citizen support for empire, the state more or less ‘abided’ by the constitutional guarantees. But the marriage of democracy and imperialism is not ‘structural’. It is contingent on a series of variable conditions, which can cause a profound rupture between the two, as we are witnessing today.
Prolonged, losing, costly imperial wars that increasingly erode living standards for over a generation have undermined the consensus between imperial rulers and democratic citizens. Early signs of this potential divergence were evident during the latter period of the Korean War, when public opinion turned against President Truman, architect of the Cold War and the US invasion of Korea . More evidence emerged during the Vietnam War. Faced with a prolonged, losing war, which imperiled the lives and opportunities of tens of millions of draft age Americans, millions in civilian life and the military opted to end the war and question imperial interventions. The repressive state was still not organized sufficiently to terrorize and contain the democratic upsurge of the 1970’s. The end of the Vietnam war represented the high point in democratic America’s quest to counter imperialism and rebuild the republic.
Subsequent small, quick, low cost and militarily successful imperial interventions in Panama, Grenada, Haiti and elsewhere did not provoke any conflict between imperialism and democracy. Nor did imperial clandestine and surrogate wars in Nicaragua, El Salvador, Guatemala, Angola, Mozambique, Afghanistan and the Balkans elicit any significant democratic opposition since they were low cost (in lives and funding) and were not accompanied by any sharp cuts in social expenditures and incomes.
The onset of the current Afghanistan , Iraq , and global offensive wars were seen by some imperial strategists in the same light: Quick, low cost victories with few domestic costs. One highly placed pro-Israel official in the Pentagon even argued that the invasion and occupation of Iraq would be “self-financing” via an oil grab.
The 21st century wars turned out otherwise: They followed the Korean-Vietnam pattern, not the Central American/Caribbean pattern. Immensely costly, the 21st century wars have not led to quick victories and, worse still, occurred in the midst of an unprecedented economic crisis, without the manufacturing and market boom of the 1950’s/1960’s which had cushioned the retreat from Korea and Vietnam.
The divergence between imperialism and democracy has become acute. Democratic dissent has increased and the police state has become more prominent and direct. Imperialism increasingly relies on “fabricated domestic and external terror plots” to augment the powers of the repressive machinery and rule by fiat. White House exhortations ring hollow. The public puts less and less credence in their rulers’ claims of ‘justifiable’ arbitrary detentions, massive surveillance and extrajudicial assassinations of US citizens (and even their children).
We now face long-term, large-scale dangers, inherent in imperial democracies. Not because of “internal contradictions” but because sooner or later imperial powers meet their match in the form of protracted struggles by anti-imperialist and national liberation movements. Only, when imperials wars take their toll on the wage and salaried majority, does the rupture between democracy and imperialism take place. Then and only then are democratic forces set in motion to create a democratic republic, with social justice and without empire.
The present danger is that imperial structures are deeply embedded in all the key political institutions and are backed by an unprecedented vast and sprawling police state apparatus, called Homeland Security. Perhaps it will take a major external political-military shock to ignite the kind of mass democratic uprising needed to transform an imperial police state into a democratic republic. A growing sense of isolation and impotence affects the ruling regime in the face of overseas military defeats and unyielding, deepening domestic economic crisis. The danger is that these fears and frustrations could induce the White House to attempt to regain popular support by attacking Iran under a manufactured pretext. A US/Israeli assault on Iran will result in a world-wide conflagration. Iran could and would retaliate. Saudi and Gulf oil wells would go up in flames. Vital shipping lanes would be blocked. Gas prices would skyrocket while Asian, EU and US economies crash. Iranian troops with their Iraqi allies would lay siege to the US garrisons in Baghdad. Afghanistan, Pakistan and the rest of the Muslim world will take up arms. US forces would surrender or retreat. The war would shatter the US Treasury. Deficits would spiral out of control. Unemployment would double. This likely sequence of events would trigger a massive democratic movement and a decisive struggle between an emerging republic struggling to give birth and a decaying empire threatening to drag the world into the inferno of its own demise.
October 23, 2011
Posted by aletho |
Economics, Militarism, Timeless or most popular |
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Stripped from the fancy (and mystifying) jargon, quantitative easing (QE) simply means increasing the quantity of money supply, or easing credit conditions—in the hope of stimulating the stagnant economy. This is usually done by having central banks inject a pre-determined quantity of money into the coffers of commercial banks in return for the purchase of their financial assets, which consist largely of government bonds. Although it is typically done electronically, or on paper, its practical effect is the same as printing money.
This is supposed to be an expansionary monetary policy designed to promote economic recovery. The rationale behind the policy is that the addition of new funds to the capital base of the commercial banks (at or near zero interest rates) will enable them to, in turn, extend new credit to businesses and/or manufacturers at reasonably low rates so that they would, then, be encouraged to borrow, to expand, to hire and, therefore, create growth and prosperity.
While under certain circumstance (when money supply or capital markets are tight, interest rates are too high and effective demand or purchasing power is strong) this may work, under the current market conditions (where there is no shortage of capital, interest rate or the cost of borrowing is already low, and effective demand is very weak) it is bound to fail—as it has actually failed miserably.
Borrowing and investing in the production of goods and manufactures is weak not because there is a shortage of investible funds (corporations are sitting on more than $2 trillion in cash but not hiring) or because the cost of borrowing is too high, as is implicitly assumed by the QE gurus, but because the macro-level purchasing power is too weak and the uncertain market conditions do not warrant investment and expansion. Furthermore, corporations prefer to produce not at home but where the labor is cheapest globally.
Likewise, the reluctance on the part of banks to extend credit to manufacturers is not because they lack capital, but because they find it more profitable to invest in speculation, that is, in buying and selling of assets and/or securities such as bonds, stocks, commodities, real estate, currencies, and the like—destabilizing activities that tend to create asset price bubbles, inevitably followed by bursts. Parasites discovered a long time ago that it is easier to suck the existing blood out of the body of living organisms than producing it from scratch. Karl Marx used an even better metaphor to characterize parasitic finance capital: “The complete objectification, inversion and derangement of capital as interest-bearing capital. . . . It appears as a Moloch demanding the whole world as a sacrifice belonging to it of right.”
This explains why instead of increasing industrial production and raising employment the 1,200 billion dollars of money that the Federal Reserve Bank has pumped into the coffers of commercial banks through two rounds of QEs has simply resulted in further financialization of the economy; which goes to explain the significant bubbling of some asset prices of the past few years, especially the considerable rise in certain share prices as well as the drastic rise in the price of a number of important commodities such as rice, wheat, and oil.
By the same token, it also explains why the QE policy has further exacerbated income and wealth inequality, both in Europe and the United States, as it has helped only the financial elite without any help to the public. “The evidence suggests that QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it,” reports Dhaval Joshi, of BCA Research. Joshi further points out that real wages – adjusted for inflation – have fallen in both the US and UK, where QE has been used to promote growth. “The shocking thing is, two years into an ostensible recovery, [UK] workers are actually earning less than at the depth of the recession. Real wages and salaries have fallen by £4bn. Profits are up by £11bn. The spoils of the recovery have been shared in the most unequal of ways.” In Germany, meanwhile, where there has been no quantitative easing, real wages have risen.
It is not unreasonable, therefore, to conclude that the financial oligarchy is using QE essentially as a legal, policy tool to further enrich itself at the expense of everybody else. Not only were the Wall Street gamblers able to bail themselves out by means of $16 trillions of taxpayers’ dollars, but now they are also showering themselves with additional trillions of QE dollars to grow even richer and bigger.
Let us assume for a moment that, as the Federal Reserve and the government claim, QE is honestly designed to be an expansionary monetary policy intended to stimulate the economy. If so, why is then the government at the same time pursuing a fiscal policy that is contractionary, that is, moving in the opposite direction of the monetary policy by cutting social spending at all levels of the public sector?
The answer is that while from the viewpoint of national or public interests the two policies contradict each other, they are quite consistent from the viewpoint of Wall Street gamblers; both the supposedly expansionary monetary policy and the brutally austere contractionary fiscal policy serve the nefarious interests of the financial aristocracy. It is hard to believe that economic policy makers do not see the obvious: that their monetary and fiscal policies contradict each other. But, then, it is perhaps not so much a matter of economic knowhow or policy expertise as it is of wicked preferences and warped loyalties to the powerful special interests to be served.
October 22, 2011
Posted by aletho |
Corruption, Economics |
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The tax plan of Republican candidate Herman Cain is the best current example of the real agenda of the GOP. It is a masterpiece of marketing, with its simple “9-9-9” label being reminiscent of a two-for-one pizza special. It would lower all Federal income tax rates to a single 9-percent rate, set the corporate rate at 9 percent, and levy a national sales tax of 9 percent. It has the sort of meretricious simplicity that appeals both to the simple-minded and the mainstream media. True to its “horserace” philosophy of covering politics, early on most of the the press declared Cain’s plan a brilliant campaign move without making any effort to evaluate its substantive merits.
Bruce Bartlett, formerly an economist in the Reagan and George H.W. Bush administrations (and a fellow Republican apostate), analyzed the 9-9-9 tax plan. His conclusion: it decreases revenue as it drastically cuts the taxes of the wealthy and – here’s the kicker – raises taxes on the least well-off. And it does not in fact tax all income at 9 percent (so much for its appealing tripartite simplicity): it lowers the capital gains and dividend rates to zero. Generally, the richer the individual is, the more likely his income is to be derived from capital gains and dividends, which are already taxed at less than half the top marginal income tax rate. This current inequity in the tax code accounts for the fact that the 400 richest Americans have been paying an average effective Federal income tax rate of 17-18 percent since passage of the Bush tax cuts: little more than half the effective rate they had paid since the early 1990s – even as their combined income quadrupled. Cain’s plan would sharply increase this disparity.
The usual rationale for reducing tax rates on capital below the rates on labor – and Cain abolishes them entirely – is that capital gains and dividends are “double taxed,” that is, the corporation that pays them out is taxed, and the recipient is taxed. But this is a smokescreen. The American revenue system is about taxing individual legal entities. Taxes on an individual, be he a wager-earner or sole proprietor of a business, are only levied once; that said, all income from whatever source (unless it is specifically exempt) is taxed in those cases. Corporations, on the other hand, pay rates on profits, a narrower category whose definition is more susceptible to creative bookkeeping. This is how GE can pay zero Federal taxes in a given year; yet that does not preclude its shareholders from realizing capital gains. Those GE shareholders are individual entities who are legally separate from the corporations whose shares they own. They are taxed once on the investment income they receive.
While Bartlett did not do a net estimate of the total revenue change, it appears to me that just executing the tax cuts in only the second phase of Cain’s three-phase plan would result in gross revenue losses of over a trillion dollars per year (so much for the GOP’s abiding concern for the deficit). The plan’s revenue raisers, on the other hand (including its Federal consumption tax with no allowance for deductions, even for food), would fall disproportionately on the non-rich and would in any case be unlikely to make up the revenue loss.
As Bartlett describes it, the Cain plan would eliminate deductions to corporations for the workers they hire. Therefore, Corporate America would have even less incentive to hire workers than now, when they are sitting on close to $2 trillion in cash. They would have all the more incentive to park their loot at a commercial bank (which would in turn park the deposits at a Federal Reserve bank), or arbitrage sweat labor overseas. On the other hand, according to Bartlett’s reading, corporations could borrow money to pay shareholder dividends and deduct the expense!
The Tax Policy Center did a distributional analysis of Cain’s plan. The Center’s conclusion: “A middle income household making between about $64,000 and $110,000 would get hit with an average tax increase of about $4,300, lowering its after-tax income by more than 6 percent and increasing its average federal tax rate (including income, payroll, estate and its share of the corporate income tax) from 18.8 percent to 23.7 percent. By contrast, a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly$1.4 million, increasing his after-tax income by nearly 27 percent . . . a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000.”
So much for the policy; what of the political strategy? At first I wondered: did Herman Cain dream this plan up himself? If not, who whispered it in his ear, and what interests did that person represent? Now we know: Rich Lowrie, a Cain economic advisor who lives in Gates Mills, Ohio, a village of 2400 inhabitants east of Cleveland, and one of the wealthiest suburbs in the country. Lowrie’s day job is as an investment advisor, and he has been involved with such groups as the Koch brothers-funded Club for Growth and Americans for Prosperity. His plan has had substantive input from long-time Republican operatives Arthur Laffer (who, with his Laffer Curve, is one of the fathers of the current generation of crackpot right-wing economists), and Steve Moore, a pioneer in the operation of 501(c)4 organizations that promote the political views of billionaires while remaining tax-exempt.
Still, it is a little surprising that after the greatest financial meltdown in 80 years, widespread unemployment and destitution, and rising public anger over the greatest income disparity in America since the 1920s, a declared presidential candidate would tout a plan that would raise taxes on low and moderate income-earners while drastically reducing them on the wealthy. Potential Republican primary voters are notoriously tolerant of lunatic-fringe nostrums, but one would think even they might blanche at a plan that would raise taxes on the majority of them.
But, at least so far, not a bit of it. Cain surged in the polls after unveiling his tax plan. According to the mainstream media, he surged because of it. The underlying causes of this phenomenon would make a fascinating case study in psychopathology. Nevertheless, one suspects that Cain will begin to sink in the polls now that the big media have finally begun to evaluate 9-9-9 and as his rivals start to chip away at his front-runner status. Still, Cain’s tax plan is a startling illustration of how to use kamikaze tactics to advance a political agenda.
In the case of other policies with substantial fiscal (and social) consequences, for instance the privatization of Social Security, right-wing think tanks fronting for billionaires have worked for decades to mainstream heretofore politically unthinkable policies by endlessly repeating simple, misleading memes and touting faked “analysis.” Eventually they succeed in changing the debate and dragging the Washington Consensus (regardless of what the country at large thinks) in the direction of serving our ever-more-entrenched plutocracy.
Viewed in the light of how he advanced the GOP’s tax agenda, Cain is not a “vanity” candidate or a joke, even if he has no realistic chance of winning. His strategic purpose would appear to be to normalize bad policy and shape the Beltway’s hive mind gradually to accept a tax system with few major precedents – save that in France’s ancien régime, where the aristocracy was exempt from taxes while the poor were squeezed. And we all know how well that historical episode ended.
While Cain’s lowering of taxes on the wealthy is a well-known formula in the GOP’s playbook, the really interesting and heretofore less well-known aspect of his plan was its increase in taxes for the working poor. Republicans have of late become quite uncharacteristically enamored of raising taxes, but not on the rich. They are targeting the less well-off.
The first public laying of the groundwork for the idea of taxing low-income earners came in a November 2002 Wall Street Journal editorial page comment. The working poor, less well-off retirees, and others who do not pay Federal income taxes were “lucky duckies.” The Journal followed up with two additional editorials using that infantile phrase.
Most Republican office holders did not yet come out publicly to make the Journal’s argument. But a few, like Jim DeMint and Orin Hatch, occasionally commandeered the Senate chamber to denounce a tax policy that has allegedly allowed almost half of Americans to avoid paying Federal income taxes.
Since Obama’s election, Republicans have amped up the “soak the poor” theme. They are strangely lukewarm about maintaining a payroll tax cut, despite the fact that it would increase the purchasing power of tens of millions of Americans who would have no choice but to recycle the money into the economy in order to buy necessities. Strange behavior indeed from a party that never met a tax cut it didn’t like.
And now Rick Perry is said to be producing a flat tax, one likely to be similarly regressive in the manner of 9-9-9, even if differing in details. The normalization of bad policy continues.
Cain has never bothered to put together a proper campaign organization. Given that his campaign is spending tens of thousands of dollars of scarce funds to buy copies of his auto-hagiography, it is possible that his whole candidacy, like that of Donald Trump or Sarah Palin, is mainly a bid to boost his personal income: book sales, speaking fees, a gig as a Fox News commentator. As year chased weary year in the pizza pie business, Cain no doubt grew tired of being a huckster for his own brand of ketchup sauce and easer-like mozzarella on a soggy cardboard crust; he wanted to augment his income in the more respectable realm of ideas. The Club for Growth, Americans for Prosperity, Americans for Tax Reform, and all the other front organizations for billionaires would agree: regardless of what happens to his candidacy, Herman Cain has succeeded in the world of ideas.
Mike Lofgren is a former professional staff member of the House and Senate Budget Committees. He retired this year.
October 22, 2011
Posted by aletho |
Deception, Economics |
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If the signage at the Wall Street occupation site and its thousands of satellites around the country tells the tale, the dominant sentiment in the nascent movement is that finance capital be ejected from the commanding heights of power. True, there are myriad other issues in the churning mix of leaderless people power, but this is the tie that binds, without which centrifugal forces would have hurled the small, founding band of organizers into oblivion. Washington, DC’s Freedom Plaza, the other pole of the occupation force field, was established by significantly older, veteran activists, some of whom have wished Wall Street dead since the days before the bankers murdered and cannibalized (liquidated!) the last Titan of Industry.
Having challenged the plutocrats and all their minions – and gaining majority support of the American people in the process – the “movement” is called upon, from inside and out, to make specific demands. Of course, Old Fred taught us that power concedes nothing without a demand. But the wrong demands can undo a popular project, so this is not something to rush into. And, in many cases, there is no point in demanding anything from your enemy, except that he drop dead in a hurry.
It is by no means clear to me that all of the folks who claim to be bankster-slayers really want to kill the beast, or merely attempt to shrink or tame it. The logic of political economy, historical experience and common sense dictates that, if the vast wealth and power that flows from concentrated private capital is what allowed Wall Street to achieve hegemony over every important aspect of U.S. society, then concentrated capital must be vanquished; that it be given no space or opportunity to regroup to make further war on democracy.
Ah, democracy, the other dominant current in the occupation conversation. What does a movement of the 99% versus the 1% mean by democracy, when measured against the privileges of money? Is it acceptable that any human being wield a million times as much influence on society as the average Josephine, by virtue of his wealth or connections to money? What about the only somewhat rich, with a few thousand times as much societal clout? Would they be prevented, like parolees, from fraternizing with their peers, lest they combine to exercise mega-clout? And, what about when these rich guys put on their masks and call themselves “The Markets.” Will we allow them to run around freely, buying and selling stuff to make millions (and then billions and derivative trillions) for themselves while, as a byproduct, affecting the terms of life for all the rest of us, wholly outside the democratic process or any civilized notion of development?
Does anyone seriously believe that today’s Masters of the Universe will allow themselves to be shut out – as a class – of the electoral pathways to state power, without wreaking havoc on an impudent society through their current control of every lever of power and the sheer crush of their money? One cannot simply leave the hegemon intact, allowing him to retain all the powers of concentrated capital that made him Master, and expect him to accept the new limitations.
The idea that the plutocrats can be quarantined from power, while remaining plutocrats, is absurd. And no, there is no difference between Warren Buffet, the Koch brothers, Bill Gates, Michael Bloomberg, the Walton (Mal-Mart) family and the late Steven Jobs. Their very existence is an insult to any legitimate concept of democracy. Every one of them would kill a million people to preserve his billions. They already do.
A movement must be prepared to break the plutocrats’ power – confiscate his fortune or make it impossible to spend – or find themselves like Lilliputians trying to tie down a huge and vicious unchained Gulliver while he stomps on you like roaches.
There is a nostalgia and romanticism in some neighborhoods of the movement – understanding that anyone is welcome to wander in and claim membership – that has echoes in the Tea Party. A Washington Post column by Barry Ritholtz, an author and head of a quantitative research firm, offers advice to the OWS movement. He wants to “bring back real capitalism,” with no bank bailouts. His closely related position is to end “too big to fail” banks in order to “restore competition.” None of this works, however, if the “real” finance capitalism at this stage in its development is exactly what we have experienced: an inherently unstable system that inexorably moves toward further consolidation, suborning every social institution along the way as a consequence of its very nature. If capitalism is in deep crisis – which is the case – and if the nature of that crisis compels finance capitalist institutions to search for ever-increasing returns through rigged markets, derivatives, systematic looting of vulnerable communities, overseas plunder under U.S. military protection and wholesale privatization of public assets in the developed capitalist countries, all of which requires massive corruption of the political and moral life of the home society, then we have simply experienced late-stage finance capitalism as it actually exists. Ritholtz would have us send the banks back to some previous era, where they will regain the vigor and moral uplift of youth.
Ritholtz clearly loves banks, or the idea of banks, and would never transfer their societal functions – which they no longer fulfill – to public entities under democratic direction. He thinks “competition” will solve the problem. However, Ritholtz does support a constitutional amendment to keep corporate money out of congressional elections, which I suppose gets his nose under the broad OWS tent, so to speak.
What about bringing back Glass-Steagall, the 1932 law that separated investment banking from commercial banking, but was repealed in 1999 under President Bill Clinton? Would reinstatement of Glass-Steagall fit the bill for meaningful reform worthy of OWS? I don’t think so. If the power of Wall Street was such in 1999 that a Democratic administration would collaborate in repeal of a foundational New Deal economic pillar, then finance capital was already hegemonic. Well before 1999, Wall Street power had passed the point where it could be controlled by conventional regulation. Rather, the struggle is to free society from its fatal embrace. There is no reforming Wall Street, only its dismantling and simultaneous replacement by public institutions for allocating capital for human needs and development.
The crisis of capitalism is the hegemony of finance capital, which is beyond repair. $16 trillion dollars in infusions from the public sector under President Obama – more than the gross domestic product of the United States – have failed to cause Wall Street to function as a social asset of the nation or the global economy. Quite the opposite; finance capital preys on the real economy and is most responsible for devouring and privatizing the public sector, leaving the people naked to the predations of a dying and parasitic system.
People can choose to be ruled by rich men who call themselves “markets” or they can trust themselves to erect public institutions that are responsive to human needs. For four weeks now, the swelling OWS movement has claimed to be contemplating how to harness democracy and end plutocracy. Since it is patently clear that plutocrats and democracy cannot coexist, the project is to rid us of the plutocrats, while there’s still time to save our world. Once that’s understood, the rest is in the details.
BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.
October 19, 2011
Posted by aletho |
Economics, Solidarity and Activism, Supremacism, Social Darwinism, Timeless or most popular |
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“On July 29, 2008, my family and I were terrorized by an errant Prince George’s County SWAT team. This unit forced entry into my home without a proper warrant, executed our beloved black Labradors, Payton and Chase, and bound and interrogated my mother-in-law and me for hours, as they ransacked our belongings . . . As I was forced to kneel, bound at gunpoint on my living room floor, I recall thinking that there had been a terrible mistake. However, as I have learned more, I have to understand that what my family and I experienced is part of a growing and troubling trend where law enforcement is relying on SWAT teams to perform duties once handled by ordinary police officers.”—Maryland Mayor Cheye Calvo in testimony before the Maryland Senate
Insisting that the “damage done by drugs is felt far beyond the millions of Americans with diagnosable substance abuse or dependence problems,” President Obama has declared October 2011 to be National Substance Abuse Prevention Month. However, while drug abuse and drug-related crimes have unquestionably taken a toll on American families and communities, the government’s own War on Drugs has left indelible scars on the population.
Indeed, although the Obama administration has shied away from using the phrase “War on Drugs,” its efforts to crack down on illicit drug use—especially marijuana use—have not abated. Just consider—every 19 seconds, someone in the U.S. is arrested for violating a drug law. Every 30 seconds, someone in the U.S. is arrested for violating a marijuana law, making it the fourth most common cause of arrest in the United States.
So far this year, approximately 1,313,673 individuals have been arrested for drug-related offenses. Police arrested an estimated 858,408 persons for marijuana violations in 2009. Of those charged with marijuana violations, approximately 89 percent were charged with possession only. Moreover, since December 31, 1995, the U.S. prison population has grown an average of 43,266 inmates per year, with about 25 percent sentenced for drug law violations.
The foot soldiers in the government’s increasingly fanatical war on drugs, particularly marijuana, are state and local police officers dressed in SWAT gear and armed to the hilt. These SWAT teams carry out roughly 50,000 no-knock raids every year in search of illegal drugs and drug paraphernalia. As author and journalist Radley Balko reports, “The vast majority of these raids are to serve routine drug warrants, many times for crimes no more serious than possession of marijuana . . . Police have broken down doors, screamed obscenities, and held innocent people at gunpoint only to discover that what they thought were marijuana plants were really sunflowers, hibiscus, ragweed, tomatoes, or elderberry bushes. (It’s happened with all five.)”
Take the case of Philip Cobbs, an unassuming 53-year-old African-American man who cares for his blind, deaf 90-year-old mother and lives on a 39-acre tract of land that’s been in his family since the 1860s. Cobbs is the latest in a long line of Americans to find themselves swept up in the government’s zealous pursuit of marijuana. On July 26, 2011, while spraying the blueberry bushes near his Virginia house, Cobbs noticed a black helicopter circling overhead. After watching the helicopter for several moments, Cobbs went inside to check on his mother. By the time he returned outside, several unmarked police SUVs had driven onto his property, and police in flak jackets, carrying rifles and shouting unintelligibly, had exited the vehicles and were moving toward him.
Although the officers insisted they had sighted marijuana plants growing on Cobbs’ property (they claimed to find two spindly plants growing in the wreckage of a fallen oak tree), their real objective was clear—to search Cobbs’ little greenhouse, which he had used that spring to start tomato plants, cantaloupes, and watermelons, as well as asters and hollyhocks. The search of the greenhouse turned up nothing more than used tomato seedling containers. Incredibly, police had not even bothered to secure a warrant before embarking on their raid of Cobbs’ property—part of a routine sweep of the countryside in search of pot-growing operations that had to cost taxpayers upwards of $25,000, at the very least.
Thankfully for Cobbs, no one was hurt during the warrantless raid on his property. However, that is not the case for many Americans who find themselves on the wrong end of a SWAT team raid in search of marijuana. For example, on May 5, 2011, a SWAT team kicked open the door of ex-Marine Jose Guerena’s home during a drug raid and opened fire. Thinking his home was being invaded by criminals, Guerena told his wife and child to hide in a closet, grabbed a gun and waited in the hallway to confront the intruders. He never fired his weapon. In fact, the safety was still on his gun when he was killed. The SWAT officers, however, not as restrained, fired 70 rounds of ammunition at Guerena—23 of those bullets made contact. Guerena had had no prior criminal record, and the police found nothing illegal in his home.
Tragically, Jose Guerena is far from the only innocent casualty in the government’s War on Drugs. Botched SWAT team raids have resulted in the loss of countless lives, including children and the elderly. Usually, however, the first to be shot are the family dogs. As Balko reports:
When police in Fremont, California, raided the home of medical marijuana patient Robert Filgo, they shot his pet Akita nine times. Filgo himself was never charged. Last October [2005] police in Alabama raided a home on suspicion of marijuana possession, shot and killed both family dogs, then joked about the kill in front of the family. They seized eight grams of marijuana, equal in weight to a ketchup packet. In January [2006] a cop en route to a drug raid in Tampa, Florida, took a short cut across a neighboring lawn and shot the neighbor’s two pooches on his way. And last May [2005], an officer in Syracuse, New York, squeezed off several shots at a family dog during a drug raid, one of which ricocheted and struck a 13-year-old boy in the leg. The boy was handcuffed at gunpoint at the time.
Clearly, something must be done. There was a time when communities would have been up in arms over a botched SWAT team raid resulting in the loss of innocent lives. Unfortunately, today, we are increasingly coming to accept the use of SWAT teams by law enforcement agencies for routine drug policing and the high incidence of error-related casualties that accompanies these raids.
What’s more, the government is providing incentives to the SWAT teams carrying out these raids through federal grants such as the Edward Byrne memorial grants and the Community Oriented Policing Services (COPS) grants. As David Borden, the Executive Director of Drug Reform Coordination Network (DRCNet), pointed out, “The exact details on how Byrne and COPS grants are distributed has not been studied, at least not to my knowledge, but an examination of grant applications by one of my colleagues found that they overwhelmingly focus on the number of arrests made, particularly drug arrests. Byrne grants also fund the purchase of equipment for SWAT teams.”
Unfortunately, while few of these raids even make the news, they are happening more and more frequently. As Borden notes, “In 1980 there were fewer than 3,000 reported SWAT raids. Now, the number is believed to be over 50,000 per year . . . About 3/4 of these are drug raids, perhaps more by now, the vast majority of them low-level.” Balko’s research reinforces this phenomenon. Based on more than a year’s worth of research and culled only from documented SWAT team incidents, Balko cites “40 cases in which a completely innocent person was killed. There are dozens more in which nonviolent offenders (recreational pot smokers, for example . . . ) or police officers were needlessly killed. There are nearly 150 cases in which innocent families, sometimes with children, were roused from their beds at gunpoint, and subjected to the fright of being apprehended and thoroughly searched at gunpoint. There are other cases in which a SWAT team seems wholly inappropriate, such as the apprehension of medical marijuana patients, many of whom are bedridden.”
Despite the government’s current fanaticism about marijuana, America has not always been at war over the cannabis plant. In fact, in 1619, all farmers of the Jamestown colony were required to grow cannabis for rope and other military purposes. Over the next 200 years, a variety of laws required hemp harvesting. In some cases, landowners could be imprisoned for neglecting their duty to grow hemp. Oftentimes, a surplus of hemp could be used as legal tender, even for paying taxes. In 1850, there were 8,327 hemp plantations in the U.S.
It was only later, during the early 20th century, that the government embarked on an all-out assault on marijuana, largely due to corporate business considerations that favored the production of cotton over hemp and racist policies that tied Hispanics and blacks to marijuana use. For example, even though blacks only account for 15% of the drug using population (with whites making up a growing part of the market), the vast majority of drug arrests and convictions affect black drug users. Incredibly, more than 70% of prisoners convicted of nonviolent drug offenses are black or Latino.
The time has come to put an end to the government’s racially-weighted, militant war on marijuana. It is a failed, costly and misguided program that has cost the country billions. As critics rightly point out, the war on marijuana has also resulted in a massive increase in incarceration rates. According to Joe Klein, writing for Time, “We spend $68 billion per year on corrections, and one-third of those being corrected are serving time for nonviolent drug crimes. We spend about $150 billion on policing and courts, and 47.5% of all drug arrests are marijuana-related.”
Worse, the government’s War on Drugs seems to have actually exacerbated the drug problems in this country, funding criminal syndicates and failing to restrict its availability or discourage its use. Indeed, the National Survey on Drug Use and Health revealed that as recently as 2005, 58% of the public found marijuana readily available, with 50% of 12 to 17 year-olds declaring it easy to get.
A growing number of legal scholars, including Bruce Fein, who served as a high-ranking Justice Department official during the Reagan administration, are calling to end the prohibition on marijuana and treat it like alcohol by regulating and taxing it at the state level. Their rationale is that instead of allowing marijuana to flourish as a profitable black market crop, it should be taxed and regulated in a manner similar to tobacco and alcohol, which many in the medical community believe to be far more harmful than marijuana. Not only would that lessen violent criminal activity associated with the manufacture and sale of marijuana, but it would also provide an economic boost to ailing state and federal coffers. As it now stands, marijuana is the United States’ largest cash crop (it brought in an estimated $35 billion in 2005), with a third of this production coming from California where it is the state’s largest cash crop.
Recently, over 500 economists led by Nobel Laureate George Akerlof, Daron Acemoglu of MIT, and Howard Margolis of the University of Chicago, signed an open letter to the president, Congress, state governors, and state legislatures expounding the immense economic benefits of legalization. They pointed out that if marijuana sales were taxed at the same level as cigarettes and alcohol, the government would make up to $6.2 billion annually. Additionally, a repeal of the prohibition of marijuana would save federal, state, and local governments an estimated $7.7 billion annually by ending the need for enforcement of drug laws.
Acknowledging the medical benefits of marijuana, especially for those who suffer from Alzheimer’s, HIV/AIDS, and multiple sclerosis, 16 states as well as the District of Columbia have also legalized it for medicinal purposes. Most recently, the California Medical Association, which represents more than 35,000 physicians statewide, called for the legalization and regulation of the plant.
As always, the special interests have a lot to say in these matters, and it’s particularly telling that those lobbying hard to keep the prohibition on marijuana include law enforcement officials and alcoholic beverage producers. However, when the war on drugs—a.k.a. the war on the American people—becomes little more than a thinly veiled attempt to keep SWAT teams employed and special interests appeased, it’s time to revisit our drug policies and laws. As Professors Eric Blumenson and Eva Nilson recognize:
During the 25 years of its existence, the “War on Drugs” has transformed the criminal justice system, to the point where the imperatives of drug law enforcement now drive many of the broader legislative, law enforcement, and corrections policies in counterproductive ways. One significant impetus for this transformation has been the enactment of forfeiture laws which allow law enforcement agencies to keep the lion’s share of the drug-related assets they seize. Another has been the federal law enforcement aid program, revised a decade ago to focus on assisting state anti-drug efforts. Collectively these financial incentives have left many law enforcement agencies dependent on drug law enforcement to meet their budgetary requirements, at the expense of alternative goals such as the investigation and prosecution of non-drug crimes, crime prevention strategies, and drug education and treatment.
~
Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. His new book “The Freedom Wars” (TRI Press) is available online at http://www.amazon.com. Whitehead can be contacted at johnw@rutherford.org. Information about The Rutherford Institute is available at www.rutherford.org.
October 19, 2011
Posted by aletho |
Civil Liberties, Economics, Timeless or most popular | Human rights, United States |
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French trade unions have staged a string of strikes to protest the government’s austerity measures, leaving school and public transport services disrupted.
Several French unions called for a national day of action against the government’s austerity package on Tuesday, calling on employees to demonstrate in streets and cripple transportation, especially in Paris.
State railway SNCF said nearly one quarter of the country’s high-speed trains would be either cancelled or delayed.
The strikes also caused express metro system delays in the French capital.
The walkout also affected schools, with many posting notices that canteen services would not be offered.
In Nice, some 500 people demonstrated against the cuts while more rallies are expected to be held in more than 200 towns and cities.
The protests followed the introduction of a cost-cutting package by President Nicolas Sarkozy’s government to slash 11 billion euros (USD 15 billion) from next year’s budget.
Paris says the move will reduce the country’s debts and prop up France’s key position in the troubled eurozone, AP reported.
Critics, however, argue that the cuts have unfairly targeted some sectors and workers and that the poor alone should not shoulder the burden of the austerity measures.
October 12, 2011
Posted by aletho |
Economics, Solidarity and Activism |
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Hundreds of protesters marched in Manhattan to take the Occupy Wall Street (OWS) campaign to the doorsteps of US billionaires.
Protesters chanted “Tax the rich!” as they walked through Manhattan’s Upper East Side, pausing at homes of media mogul, Rupert Murdoch, banker, Jamie Dimon, and oil tycoon, David Koch, Reuters reported on Tuesday.
“Join us on a walking tour of the homes of some of the bank and corporate executives that don’t pay taxes, cut jobs, engaged in mortgage fraud, tanked our economy … all while giving themselves record-setting bonuses,” said NYC Communities for Change, one of the several groups organizing the protest.
Protesters said they were going to be made to suffer instead of the rich as of the start of 2012, when New York’s 2 percent ‘Millionaires Tax’ expires.
The OWS emerged on September 17, when a group of people began rallying in New York’s financial district to protest at ‘corporate greed’ and top-level corruption in the country.
The anti-Wall Street drive has seen protests erupting in major US cities and is being supported through ‘Occupy’ events in more than 1,400 cities across the globe.
The protesters have also adopted the nickname ‘the 99 percent.’ They have singled out for criticism specific people, whom are said to have enriched themselves at the expense of others to form the one percent wealthiest Americans.
They have also raised their voices against the supernumerary costs of the US-led wars in Iraq and Afghanistan.
According to Thomson Reuters ASSET4 data, the average pay for top executives in the US is 142 times as much as that of the employees.
“Where’s my bailout?” also the ‘billionaires tour’ protesters shouted, protesting Wall Street’s 2008 bailouts for banks.
The US protesters say the generous bailouts hugely profited the banks, while the Joe Blow was made to take the brunt of job shortages and homelessness amid little help from the federal government.
October 11, 2011
Posted by aletho |
Economics, Solidarity and Activism |
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Students demonstrate in downtown Rome on October 7, 2011
Tens of thousands of people have taken to the streets in Italy to protest against the austerity measures adopted by the government of Prime Minister Silvio Berlusconi.
The demonstrations were held in Milan and Rome on Saturday, DPA reported.
The rallies targeted the public sector job cuts that are part of the austerity measures, aimed at balancing the Italian budget by 2013.
A 60-billion-euro austerity package to balance the budget by 2013 was passed last month only after weeks of hesitation and delay.
Trade union representatives had earlier warned that a total of 300,000 jobs could end up being cut in the five-year period leading to 2013.
Also on Friday, students across the country protested against government cutbacks in funding for education.
Over the past three years, Berlusconi’s government has cut some 8 billion euros (USD 10.7 billion) from the education budget.
The Italian premier, who is under pressure over corruption and sex scandals, has been facing criticism for his center-right government’s erratic handling of the country’s economy.
Protest organizers said they were preparing a major mobilization for October 15 — which has been set as a day for anti-capitalist “Indignant” protests.
October 8, 2011
Posted by aletho |
Economics, Solidarity and Activism |
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Always the Bankers’ Whore
The seeds for President Obama’s demagogic press conference on Thursday were planted last summer when he assigned his right-wing Committee of 13 the role of resolving the obvious and inevitable Congressional budget standoff by forging an anti-labor policy that cuts Social Security, Medicare and Medicaid, and uses the savings to bail out banks from even more loans that will go bad as a result of the IMF-style austerity program that Democrats and Republicans alike have agreed to back.
The problem facing Obama is obvious enough: How can he hold the support of moderates and independents (or as Fox News calls them, socialists and anti-capitalists), students and labor, minorities and others who campaigned so heavily for him in 2008? He has double-crossed them – smoothly, with a gentle smile and patronizing pattern talk, but with an iron determination to hand federal monetary and tax policy over to his largest campaign contributors: Wall Street and assorted special interests. The Democratic Party’s Rubinomics and Clintonomics core operators, plus smooth Bush Administration holdovers such as Tim Geithner, not to mention quasi-Cheney factotums in the Justice Department.
President Obama’s solution has been to do what any political demagogue does: Come out with loud populist campaign speeches that have no chance of becoming the law of the land, while more quietly giving his campaign contributors what they’ve paid him for: giveaways to Wall Street, tax cuts for the wealthy (euphemized as tax “exemptions” and mark-to-model accounting, plus an agreement to count “income” as “capital gains” taxed at a much lower rate).
So here’s the deal the Democratic leadership has made with the Republicans. The Republicans will run someone from their present gamut of guaranteed losers, enabling Obama to run as the “voice of reason,” as if this somehow is Middle America. This will throw the 2012 election his way for a second term if he adopts their program – a set of rules paid for by the leading campaign contributors to both parties.
President Obama’s policies have not been the voice of reason. They are even further to the right than George W. Bush could have achieved. At least a Republican president would have confronted a Democratic Congress blocking the kind of program that Obama has rammed through. But the Democrats seem stymied when it comes to standing up to a president who ran as a Democrat rather than the Tea Partier he seems to be so close to in his ideology.
So here’s where the Committee of 13 comes into play. Given (1) the agreement that if the Republicans and Democrats do NOT agree on Obama’s dead-on-arrival “job-creation” ploy, and (2) Republican House Leader Boehner’s statement that his party will reject the populist rhetoric that President Obama is voicing these days, then (3) the Committee will wield its ax to cut federal social spending in keeping with its professed ideology.
President Obama signaled this long in advance, at the outset of his administration when he appointed his Deficit Reduction Commission headed by former Republican Sen. Simpson and Rubinomics advisor to the Clinton administration Bowles to recommend how to cut federal social spending while giving even more money away to Wall Street. He confirmed suspicions of a sellout by reappointing bank lobbyist Tim Geithner to the Treasury, and tunnel-visioned Ben Bernanke as head of the Federal Reserve Board.
Yet on Wednesday, October 4, the president tried to represent the OccupyWallStreet movement as support for his efforts. He pretended to endorse a pro-consumer regulator to limit bank fraud, as if he had not dumped Elizabeth Warren on the advice of Geithner – who seems to be settling into the role of bagman for campaign contributors from Wall Street.
Can President Obama get away with it? Can he jump in front of the parade and represent himself as a friend of labor and consumers while his designated appointees support Wall Street and his Committee of 13 is waiting in the wings to perform its designated function of guillotining Social Security?
When I visited the OccupyWallStreet site on Wednesday, it was clear that the disgust with the political system went so deep that there is no single set of demands that can fix a system so fundamentally broken and dysfunctional. One can’t paste-up a regime that is impoverishing the economy, accelerating foreclosures, pushing state and city budgets further into deficit and forcing cuts in social spending.
The situation is much like that from Iceland to Greece: Governments no longer represent the people. They represent predatory financial interests that are impoverishing the economy. This is not democracy. It is financial oligarchy. And oligarchies do not give their victims a voice.
So the great question is, where do we go from here? There’s no solvable path within the way that the economy and the political system is structured these days. Any attempt to come up with a neat “fix-it” plan can only be suggesting bandages for what looks like a fatal political-economic wound.
The Democrats are as much a part of the septic disease as the Republicans. Other countries face a similar problem. The Social Democratic regime in Iceland is acting as the party of bankers, and its government’s approval rating has fallen to 12 percent. But they refuse to step down. So earlier last week, voters brought steel oil drums to their own Occupation outside the Althing and banged when the Prime Minister started to speak, to drown out her advocacy of the bankers (and foreign vulture bankers at that!)
Likewise in Greece, the demonstrators are showing foreign bank interests that any agreement the European Central Bank makes to bail out French and German bondholders at the cost of increasing taxes on Greek labor (but not Greek property and wealth) cannot be viewed as democratically entered into. Hence, any debts that are claimed, and any real estate or public enterprises given or sold off to the creditor powers under distress conditions, can be reversed once voters are given a democratic voice in whether to impose a decade of poverty on the country and force emigration.
That is the spirit of civil disobedience that is growing in this country. It is a quandary – that is, a problem with no solution. All that one can do under such conditions is to describe the disease and its symptoms. The cure will follow logically from the diagnosis. But the role of OccupyWallStreet is to diagnose the financial polarization and corruption of the political process that extends right into the Supreme Court, the Presidency, and Obama’s soon-to-be notorious Committee of 13 once the happy-smoke settles from his present pretensions.
~
Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com
October 7, 2011
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Economics, Solidarity and Activism |
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Food pantries picked over. Incomes drying up. Shelters bursting with the homeless. Job seekers spilling out the doors of employment centers. College grads moving back in with their parents. The angry and disillusioned filling the streets.
Pan your camera from one coast to the other, from city to suburb to farm and back again, and you’ll witness scenes like these. They are the legacy of the Great Recession, the Lesser Depression, or whatever you choose to call it.
In recent months, a blizzard of new data, the hardest of hard numbers, has laid bare the dilapidated condition of the American economy, and particularly of the once-mighty American middle class. Each report sparks a flurry of news stories and pundit chatter, but never much reflection on what it all means now that we have just enough distance to look back on the first decade of the twenty-first century and see how Americans fared in that turbulent period.
And yet the verdict couldn’t be more clear-cut. For the American middle class, long the pride of this country and the envy of the world, the past 10 years were a bust. A washout. A decade from hell.
Paychecks shrank. Household wealth melted away like so many sandcastles swept off by the incoming tide. Poverty spiked, swallowing an ever-greater share of the population, young and old. “This is truly a lost decade,” Harvard University economist Lawrence Katz said of these last years. “We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.”
Poverty Swallows America
Not even a full year has passed and yet the signs of wreckage couldn’t be clearer. It’s as if Hurricane Irene had swept through the American economy. Consider this statistic: between 1999 and 2009, the net jobs gain in the American workforce was zero. In the six previous decades, the number of jobs added rose by at least 20% per decade.
Then there’s income. In 2010, the average middle-class family took home $49,445, a drop of $3,719 or 7%, in yearly earnings from 10 years earlier. In other words, that family now earns the same amount as in 1996. After peaking in 1999, middle-class income dwindled through the early years of the George W. Bush presidency, climbing briefly during the housing boom, then nosediving in its aftermath.
In this lost decade, according to economist Jared Bernstein, poor families watched their income shrivel by 12%, falling from $13,538 to $11,904. Even families in the 90th percentile of earners suffered a 1% percent hit, dropping on average from $141,032 to $138,923. Only among the staggeringly wealthy was this not a lost decade: the top 1% of earners enjoyed 65% of all income growth in America for much of the decade, one hell of a run, only briefly interrupted by the financial meltdown of 2008 and now, by the look of things, back on track.
The swelling ranks of the American poor tell an even more dismal story. In September, the Census Bureau rolled out its latest snapshot of poverty in the United States, counting more than 46 million men, women, and children among this country’s poor. In other words, 15.1% of all Americans are now living in officially defined poverty, the most since 1993. (Last year, the poverty line for a family of four was set at $22,113; for a single working-age person, $11,334.) Unlike in the lost decade, the poverty rate decreased for much of the 1990s, and in 2000 was at about 11%.
Even before the housing market imploded, during the post-dot-com-bust years of “recovery” from 2001 to 2007, poverty figures were the worst for any recovery on record, according to Arloc Sherman, a senior researcher at the Center on Budget and Policy Priorities. The Brookings Institution, meanwhile, predicts that the ranks of the poor will continue to grow steadily during the years of the Great Recession, which officially began in December 2007, and are expected to reach 50 million by 2015, almost 10 million more than in 2007.
Hitting similar record highs are the numbers of “deep” poor, Americans living way below the poverty line. In 2010, 20.5 million people, or 6.7% of all Americans, scraped by with less than $11,157 for a family of four — that is, less than half of the poverty line.
The ranks of the poor are no longer concentrated in inner cities or ghettos in the country’s major urban areas as in decades past. Poverty has now exploded in the suburbs. Last year, more than 15 million suburbanites — or one-third of all poor Americans — fell below the poverty line, an increase of 11.5% from the previous year.
This is a development of the last decade. Those suburbs, once the symbol of by-the-bootstraps mobility and economic prosperity in America, saw poverty spike by 53% since 2000. Four of the ten poorest suburbs in America — Fresno, Bakersfield, Stockton, and Modesto — sit side by side on a map of California’s Central Valley like a row of broken knuckles. The poor are also concentrated in border towns like El Paso and McAllen, Texas, and urban areas cratered by the housing crash like Fort Myers and Lakeland, Florida.
The epidemic of poverty has hit minorities especially hard. According to Census data, between 2009 and 2010 alone the black poverty rate jumped from 25% to 27%. For Hispanics, it climbed from 25% to 26%, and for whites, from 9.4% to 9.9%. At 16.4 million, more children now live in poverty than at any time since 1962. Put another way, 22% of kids currently live below the poverty line, a 17-year record.
America’s lost decade also did a remarkable job of destroying the wealth of nonwhite families, the Pew Research Center reported in July. Between 2005 and 2009, the household wealth of a typical black family dropped off a cliff, plunging by a whopping 53%; for a typical Hispanic family, it was even worse, at 66%. For white middle-class households, losses on average totaled “only” 16%.
Here’s a more eye-opening way to look at it: in 2009, the median wealth for a white family was $113,149, for a black family $5,677, and for a Hispanic family $6,325. The second half of the lost decade, in other words, laid ruin to whatever wealth was possessed by blacks and Hispanics — largely home ownership devastated by the popping of the housing bubble.
The New Lost Decade
As for this decade, less than two years in, we already know that the news isn’t likely to be much better. The problems that plagued Americans in the previous decade show little sign of improvement.
Take the jobs market. Tally the number of jobs eliminated since the recession began and also the labor market’s failure to create enough jobs to keep up with normal population growth, and you’re left with an 11.2 million jobs deficit, a chasm between where the economy should be and where it is now. Filling that gap is the key to any recovery, but to do so by mid-2016 would mean adding 280,000 jobs a month — a pipe dream in an economy limping along creating an average of just 35,000 jobs a month for the past three months. […]
The question on many economists’ minds is: Will the U.S. slump into a double-dip recession? But for so many Americans living outside the political and media hothouses of Washington and New York, this question is silly. After all, how can the economy tumble back into recession if it never left in the first place?
No one can say for certain how many years will pass before America regains anything like its pre-recession swagger — and even then, there’s little to suggest that the devastating effects of the middle class’s lost decade won’t have changed this country in ways that will prove permanent, or that the gap between the wealthy and everyone else will do anything but increase in good times or bad in the decade to come. The deep polarization between the very rich and everyone else has been decades in the making and is a global phenomenon. Reversing it could be the task of a lifetime.
In the meantime, the middle class has flat-lined. Life support is nowhere close to arriving. One lost decade may have ended, but the next one has likely only begun.
Copyright 2011 Andy Kroll
October 6, 2011
Posted by aletho |
Economics |
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While the United States considers a Free Trade Agreement (FTA) with Colombia, the human rights situation in the Magdalena Medio region of Colombia has deteriorated dramatically, culminating in the 17 August 2011 massacre in the township of El Dorado.
The United States House of Representatives and Senate will probably vote on the long standing FTA when they return from their congressional break, asserting that the human rights situation in Colombia is improving. However, a wave of human rights violations, assassinations, and massacres has shaken the region. For example, in the city of Barrancabermeja, from 13-18 August, the organization Human Rights Workers’ Forum of Barrancabermeja (Espacio de Trabajadores y Trabajadoras de Derechos Humanos) documented two assassinations, two forced disappearances, five attempted assassinations, and the kidnapping of three contract workers.
Furthermore, in the Sierra de San Lucas mountain range, the agricultural and mining communities are also threatened. This region is rich in natural resources such as gold. With the price of gold rising, multinational companies who stand to benefit from a FTA with Colombia are seeking even more concessions in the region. One human rights worker told CPTers, “We are facing wave of violence that has not been seen since the paramilitary group Auto-Defense Forces entered the region the late 90s.”
From November to August of this year, Fedeagromisbol, a federation of primarily subsistence small-scale miners and peasant farmers throughout the Sierra de San Lucas mountain range in South Bolívar, documented sixteen assassinations in the region and twenty cases of abuses and harassment.
On 17 August, 7:00 p.m., in the community of Casa Zinc, part of township EL Dorado in the municipality of Monte Cristo, Bolivar, twenty armed men entered the community and identified themselves as the Black Eagles, a paramilitary group. They gathered the community together and assassinated Pedro Sierra, a farmer. They then tortured and cut out the tongues of Ivan Serrano, a local shop owner, and Luis Albeiro Ropero, a young miner, before they killing them. The Colombian Army was just twenty minutes away while the Black Eagles were committing these atrocities.
On the 21 August, local human rights organizations, including Fedeagromisbol and the Christian Peacemaker Teams traveled to the region to investigate the massacre. On their way, they received a call that the paramilitary group was still present in the community four days after the massacre. The official investigation commission was unable to come, because the Colombian government could not guarantee the safety of anyone entering the region.
The massacre in Casa Zinc is not unusual. Most of the violence happens either at the hands of the Colombia Armed Forces or occurs when these forces are nearby and able to prevent it, if they chose to do so. The U.S. government must not move forward on a Free Trade Agreement by claiming that the human rights situation has improved.
October 1, 2011
Posted by aletho |
Civil Liberties, Economics, Progressive Hypocrite, Subjugation - Torture, Timeless or most popular |
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The Republican/Democrat duopoly has, for far too long, ignored the most important issues facing our nation. However, alternate candidates Chuck Baldwin, Cynthia McKinney, and Ralph Nader agree with Ron Paul on four key principles central to the health of our nation. These principles should be key in the considerations of every voter this November and in every election.
We Agree
Foreign Policy: The Iraq War must end as quickly as possible with removal of all our soldiers from the region. We must initiate the return of our soldiers from around the world, including Korea, Japan, Europe and the entire Middle East. We must cease the war propaganda, threats of a blockade and plans for attacks on Iran, nor should we re-ignite the cold war with Russia over Georgia. We must be willing to talk to all countries and offer friendship and trade and travel to all who are willing. We must take off the table the threat of a nuclear first strike against all nations.
Privacy: We must protect the privacy and civil liberties of all persons under US jurisdiction. We must repeal or radically change the Patriot Act, the Military Commissions Act, and the FISA legislation. We must reject the notion and practice of torture, eliminations of habeas corpus, secret tribunals, and secret prisons. We must deny immunity for corporations that spy willingly on the people for the benefit of the government. We must reject the unitary presidency, the illegal use of signing statements and excessive use of executive orders.
The National Debt: We believe that there should be no increase in the national debt. The burden of debt placed on the next generation is unjust and already threatening our economy and the value of our dollar. We must pay our bills as we go along and not unfairly place this burden on a future generation.
The Federal Reserve: We seek a thorough investigation, evaluation and audit of the Federal Reserve System and its cozy relationships with the banking, corporate, and other financial institutions. The arbitrary power to create money and credit out of thin air behind closed doors for the benefit of commercial interests must be ended. There should be no taxpayer bailouts of corporations and no corporate subsidies. Corporations should be aggressively prosecuted for their crimes and frauds.
September 29, 2011
Posted by aletho |
Civil Liberties, Economics, Militarism |
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