That was the funniest group chant at Tuesday’s rally of several hundred union and other progressive activists outside the Manhattan headquarters of Fox News.
Several “cheeseheads” were in attendance, their noggins topped by the now familiar wedge-shaped, orange hatwear made popular by Green Bay Packer fans. On Tuesday, they were out in the twilight chill expressing their opposition not to lactose intolerance but Wisconsin Governor Scott Walker’s intolerance of organized labor. (Unadorned by cheddar, I briefly spoke at the gathering as president of an AFL-CIO affiliated union, the Writers Guild of America, East.)
Governor Walker continues his obdurate opposition to the state’s public employee unions’ right to collective bargaining, despite a willingness on their part to concede pension and health givebacks he claims would help close Wisconsin’s alleged deficit. Meanwhile, there has been a decided increase on the sleaze end of the cheese vs. sleaze quotient, as evidenced in part by the prank phone call to the governor in which an online newspaper editor impersonating right wing billionaire David Koch elicited from Walker a proposed scheme to lure back, then double cross Democratic state senators who have prevented a quorum by retreating to Illinois. Further, when asked about planting troublemakers amongst the protesters, Walker told the trickster that he and his team had “thought about that” but decided not to. Apparently, all the really good disrupters are tied up in the Middle East.
But of course, this isn’t really about saving taxpayers’ money but consolidating political power. Walker and such leading lights of the GOP leadership as Governor Chris Christie of New Jersey and Ohio Governor John Kasich, among others, have decided that public employee unions make great punching bags, effective scapegoats for an outraged electorate and a satisfactory diversion from the real culprits of this grim, economic melodrama—the Simon Legrees of banking and finance who got us into this meltdown mess in the first place.
As Josh Dorner reported on the progressive ThinkProgress website last week, “Instead of making the tough choices necessary to help their states weather the current crisis with some semblance of the social safety net and basic government services intact, Republican governors are instead using it as an opportunity to advance several longtime GOP projects: union busting, draconian cuts to social programs, and massive corporate tax breaks. These misplaced priorities mean that the poor and middle class will shoulder the burden of fiscal austerity, even as the rich and corporations are asked to contribute even less.”
Dorner cites examples: in Arizona, Republican Governor Jan Brewer proposes kicking some 280,000 off the state Medicaid rolls but two weeks ago signed into law $538 million in corporate tax cuts. Florida Governor Rick Scott’s new budget calls for billions of dollars in cuts to essential programs and services to pay for corporate and property tax cuts of at least $4 billion. Rick Snyder, newly elected governor of Michigan, has asked for $180 million in concessions from public employees and more than a billion to be taken from schools, universities, local governments and others, most of which could be avoided if he wasn’t so deeply dedicated to giving business $1.8 billion in tax breaks.
Writing in the February 23 Boston Globe, Mark Erlich, executive secretary-treasurer of the New England Regional Council of Carpenters asks, “While there are legitimate and critical public policy issues about education reform, spiraling health costs, and pension liabilities at a time of state and municipal budget deficits, why is the fault laid at the feet of teachers, police, and firefighters? Today’s pension obligations are the product of massive investment losses, not excessively generous public pensions that, in fact, average about $19,000 a year. For that matter, a 2010 Economic Policy Institute study showed that, controlled for educational achievement, public sector workers actually earn less than their private sector counterparts.”
So instead of screaming about the advances public employee and other unions have made to preserve health care, job security and economic justice, angry voters should be asking what or who have been keeping them from obtaining the same. Nor does Wall Street’s pillaging of private 401(k) retirement plans justify tit-for-tat, eye-for-an-eye acts of covetous revenge against union pensions. As Erlich writes, “A generation ago, non-union workers often welcomed news of improved wages and benefits for unionized employees, recognizing that a rising tide lifts all boats. But . . . at a time of sacrifice and insecurity, many would prefer to sink their neighbor’s slightly bigger boat while wistfully hoping for a glance at a yacht in a gated marina.”
The American middle class largely exists because of unions; it would be a tragedy of Greek proportions if, in frustration, resentment and fear, members of that class were to turn on labor and bring about their mutual destruction. Conservative Republican governors and their associates are barking up the wrong money tree. Don’t reward corporate greed and malfeasance with yet more tax breaks and a blind eye to windfall bonuses. And don’t punish unions for whatever success they’ve had protecting members and holding on to an ever-dwindling power base of American workers. That’s just plain cheesy and sleazy.
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Michael Winship is the former senior writer of Bill Moyers Journal on PBS and current president of the Writers Guild of America, East.
A list of demands from the protesters at Tahrir Square is being circulated online today, the 17th day of massive demonstrations across Egypt calling for the overthrow of the Mubarak regime. The first item calls for the resignation of president Hosni Mubarak.
Wael Khalil lists those demands on his blog (Ar) and says:
These demands are the summary of various discussions at Tahrir Square, and are, of course, not representative of everyone at the square
The immediate demands are:
1. The resignation of president Mohammed Hosni Mubarak
2. Canceling the Emergency Law
3. Dismantling the state secret service
4. An announcement by (Vice-President) Omar Sulieman that he will not run in the next presidential elections
5. Dissolving the Parliament and Shura Council
6. Releasing all the prisoners since January 25
7. Ending the curfew so that life resumes as normal across the country
8. Dismantling the university guards system
9. Referring officials responsible for the use of violence against the peaceful protesters since January 25 and those responsible for the organised thuggery which followed January 28 to an investigation committee
10. Sacking Anas El Fiqi and stopping the attack on protesters in government owned media through threats and calling protesters traitors, and ending the spread of hate against foreigners in the streets
11. Reimbursing shop owners for their losses during the curfew
12. Announcing the demands above on government television and radio
Wael Khalil also lists demands for the transitional period as follows:
1. Drafting a new constitution
2. The right to set up newspapers and open television and radio stations without a prior permission
3. Putting the minimum wage of 1,200 Egyptian Pounds into effect
4. The right to set up political parties, by notification
5. The right to set up associations and unions, by notification
6. Achieving a real autonomy and independence for national newspapers and television and radio stations, through new legislation and the reformation of companies, establishments of ministries
7. Cancling the national service in the police force
8. Ending the security clampdown on telecommunications and the internet
When the chairman of the world’s largest food company says that using food crops to make biofuels is “absolute madness,” sensible people should take heed.
Alas, President Obama, along with a Congress that is dominated by Big Ag interests, just doesn’t seem to care that Peter Brabeck, the chairman of the Swiss food giant, Nestle, made that very declaration last month. And that blithe ignorance of the madness of biofuels is resulting in some truly horrifying results. Here are the numbers: This year, the US corn ethanol sector will consume 40 percent of all US corn – that’s about 15 percent of global corn production or 5 percent of all global grain – in order to produce a volume of motor fuel with the energy equivalent of about 0.6 percent of global oil needs.
Congress not only lavishes subsidies on the corn ethanol scam, it has mandated the use of corn ethanol, and provided tariff protections to an industry that is helping push global food prices to all-time highs and shrink grain reserves at the very same time that global grain production is faltering and protests over food prices are commonplace.
The quantity of grain to be consumed this year for US ethanol production – 4.9 billion bushels – boggles the mind. That’s more than twice as much as all the corn produced in Brazil and more than six times as much as is grown in India. Put another way, that’s more corn than the output of the European Union, Mexico, Argentina, and India combined.
Despite these facts, last month, President Obama, in his State of the Union speech, said “we can break our dependence on oil with biofuels.” Meanwhile, the Iowa Caucus, the nation’s first presidential primary is now less than one year away. And Newt Gingrich, the former speaker of the US House, who’s dearly hoping that he can be a viable candidate for the 2012 Republican presidential nomination, was recently in Iowa cravenly wooing the ethanol producers and slamming “big city” critics of the ethanol industry. Alas, there’s little reason to expect much bravery out of Gingrich’s fellow Republicans on Capitol Hill. Speaker of the House John Boehner recently told reporters not to expect cuts to the ethanol subsidies because they are “not in the discretionary spending pot.”
While Obama prevaricates and Congress dithers, ethanol boosters are once again claiming that their sector has negligible effect on grain prices. Instead, they blame surging grain prices on, well, everything but their industry. To be sure, bad weather in Russia and Australia has cut grain harvest in those countries. In addition, rising demand for grain in the developing world is affecting prices.
But the events of the last few weeks — corn futures at near-record highs and social unrest related to food prices – are nearly identical to the mayhem that occurred in 2007 and 2008. Back then, at least 15 studies, including ones by Purdue University, the World Bank and the Congressional Research Service, exposed the link between increasing ethanol production and higher food prices. Soaring food prices led to violent protests in Egypt, Cameroon, Ivory Coast, Haiti, Mauritania, Ethiopia, Madagascar, the Philippines and Indonesia. And worries about adequate food stocks led several countries to ban food exports.
New studies are, once again, finding a direct link between the corn ethanol scam and higher food prices. In December, a study by two US agriculture economists, Thomas Elam and Steve Meyer, found that corn prices are being pushed dramatically higher by demand from the ethanol sector. Elam and Meyer, who have done consulting work for the meat industry, found that without the ethanol mandates, the average price of corn would now be lower by more than $2 per bushel. And they conclude that “biofuels policy has caused significant cost increases for all users of feedgrains.”
There are many unfortunate aspects to America’s corn ethanol insanity. But among the most unfortunate is that US policymakers were warned, and they were warned by the Rand Corporation, one of the most conservative defense-oriented think tanks in America. In May 2008, Rand Corporation issued a report which said that diverting corn to the ethanol sector was not only bad economics, but a security threat: “Using corn for ethanol is economically inefficient and has harmed US national security. Diverting corn from food to ethanol production has pushed up world market prices for grains and other foods, which, in 2008, resulted in riots in a number of developing countries.”
In recent weeks, we’ve seen food-price hikes and protests that are reminiscent of 2008. There have been food riots in Algeria and Mozambique. Last month, some 8,000 Jordanians protested in the streets of Amman and other cities to protest rising food prices. In Egypt, the world’s biggest wheat importer, wheat prices are up by 30 percent over the past 12 months. This week, protesters took to the streets in India to protest surging food costs.
The surging price of wheat is being stoked by rising corn prices, which have doubled over the past six months and are now at about $7 per bushel. “Higher corn prices always means higher wheat prices,” says Bill Lapp, president of Advanced Economic Solutions, an Omaha-based commodity consulting firm.
David Orden, a senior research fellow at the International Food Policy Research Institute in Washington, told me that surging corn prices is “a continuation of what happened in 2008.” The push for biofuels, he said, “has clearly tightened up agricultural commodity markets. That’s good for farmers, but it is not good for poor people around the world.”
Many of those poor live in the US. Some 43.6 million Americans, about 14 percent of the population, are now receiving federal food stamps. Since October 2008, the number of Americans relying on food stamps jumped by 41.5 percent and enrollment in the program has increased for 26 consecutive months. And thanks to the ethanol scam, those many millions are being priced out of the meat aisle. Over the past year, beef prices have risen more than 6 percent and pork prices are up 11 percent. Economists are expecting overall grocery prices in the US to rise by about 5 percent this year.
But the real – and likely more dangerous – food-price increases will happen outside the US. Last year, the OECD projected that global grain prices are likely to be as much as 40 percent higher by 2020, and a London-based non-profit entity, ActionAid, predicted that some 600 million more people could be left hungry by 2020 due to increased production of biofuels.
Brabeck, the chairman of Nestle, the world’s biggest food company, has rightly put the spotlight on the biofuels madness. As the head of a company with $100 billion in annual food-related revenues, Brabeck clearly has a keen understanding of the global food industry. And last month during the World Economic Forum in Davos, he identified the stunningly obvious solution to the ongoing insanity. “No food for fuel,” he said.
“No food for fuel” should be the rallying cry on Capitol Hill and at the United Nations. It should be a required oath for all of the candidates (and Gingrich in particular) who are planning to campaign in Iowa for the 2012 presidential contest. As the biggest ethanol-producing state, Iowa has long had a stranglehold on America’s presidential selection process because it holds the first primary. And because it holds the first primary, the state’s powerful agriculture interests have, for decades, prevented viable candidates from speaking out against the corn ethanol madness.
It’s time – no, it’s long past time — to heed Brabeck’s advice. Stop the madness.
In the midst of the Arab uprisings throughout the Middle East, at a time when even the European (EU) has publicaly condemned Israel’s blockade of Gaza and its illegal land seizures in the West Bank and East Jerusalem, Greek Prime Minister George Papandreou promised a visiting delegation of American Jewish leaders, that he would do everything possible to undermine EU opposition and promote Israeli economic, diplomatic and political interests in Europe.
US Zionists, recently returned from a visit to Athens described Papandreou as by far the most amenable (‘servile’) European leader they have met in recent memory. Papandreou’s slavish submission to Israeli interests includes his promise, to a delegation of U.S. Zionist notables, to use his influence to pressure the new Egyptian military junta to continue to uphold the Mubarak agreements with Israel (European Jewish Press 2/11/11). These include the continued blockade of Gaza and support of Israel’s military assaults on Lebanon, Syria and Palestinians. In other words Papandreou is openly supportive of Egypt’s past collaboration with Israeli clandestine assassinations and kidnapping of Arab militants.
Papandreou demonstrates a greater interest in promoting Israel’s exports to the European market, than the country he ostensibly represents. He promised a delegation from the Conference of Presidents of Major American Jewish Organizations “to integrate Israel into the European market” (European Jewish Press 2/11/11) while he shrinks the Greeks economy by 10% between 2009-11 and doubles unemployment from 8% to 16%. Papandreou’s gross servility to Israel and the American Zionist power structure is manifested in his cordial reception and recent agreements with Israel’s Prime Minister Netanyahu and his foreign minister, the notorious Zionist-fascist Avigdor Lieberman – the same Lieberman who advocates wholesale expulsion of Palestinians from the West Bank. No Greek Prime Minister, since the Zionist state was founded, has exhibited such a bizarre display of active collaboration with Israel’s colonial claims in the Middle East. No European leader has so eagerly anticipated and implemented the demands of American Zionist organizations with such zeal.
What is most striking about Papandreou’s servility to Israeli and American Zionist interests, is that it takes place when most of the rest of the world, from Europe, Turkey, Lebanon, Latin America, to North Africa (Egypt, Tunisia) and the vast majority of Arabs are moving toward isolating Israel. In other words, Papandreou is embracing a pro-Israel policy which is alienating Europe, isolating Greece from well over a hundred million Arabs and undermining Greek agricultural (citrus) exports to the EU market.
Papandreou’s perverse and highly prejudicial foreign policy is matched by his extraordinary adherence and enforcement of the debt payment policies dictated by the IMF and the bankers of the EU and the US. His behavior is particularly shameless at a time when the next Irish government is threatening to declare a debt default if payments are not reduced. In his eagerness to ingratiate himself with the overseas bankers, Papandreou has systematically extracted billions of euros via a 20% reduction in wages, salaries and pensions and transferred it to the coffers of the banks. In the process Papandreou’s policies have doubled the unemployment rate, shrank the economy and undermined any future growth for the next decade. Papandreou rejected the Argentine formula, which in the face of a similar crises in 2001-02 , defaulted rather than deepen poverty. Under President Kirchner, Argentina renegotiated its debt, shaving bond payments by 75% and imposing a moratorium. As a result, Argentina recovered from the crises and maintained a growth rate of 7% for over a decade while reducing unemployment from 22% to less than 6%.
If Papandreou acts as a submissive messenger boy for Israel and its Zionist fifth column in America, he features prominently as the eager and aggressive “bill collector” for the overseas banks. He will go down in historical infamy as a willing accomplice of Israeli war crimes, an upholder of its unequal treaties with Egypt in his foreign policy and the enforcer of financial predators who impoverish millions of Greeks at home.
Having decimated the Greek economy via transfers of billions abroad and undermined economic relations with the Arab countries, Papandreou offers to sell Greece’s most lucrative transport, ports, energy and communication companies to Chinese, Israeli and Wall Street investors and speculators. It is ironic that George Papandreou the son of former Prime Minister Andreas Papandreou should reverse each and every one of his father’s policies, especially with regard to the Middle East.
In 1981 after Andreas Papandreou was elected he invited me to Athens to discuss policies and programs of his future government. The first thing he told me was the importance of supporting the Palestinian struggle and how he had a successful meeting with Yasser Arafat, who regaled him with a prized pistol, which he displayed to me. A year later when I returned to Greece to direct and develop a research center, he invited me for a swim. We were accompanied by a dozen underwater security guards, patrolling offshore, against a potential assassination plot by Mossad, according to the prime minister, in reprisal for his solidarity with the Palestinians in Lebanon.
A few days later over 50,000 Greeks led by Culture Minister Melina Mercuri marched in solidarity with the Palestinians and in repudiation of Israel’s role in the bloody massacre of 2000 women and children in Sabra and Shatila. The contrast of the two generations of Papandreou’s could not be more stark; while Andreas saw Greece as a bridge between Europe and the Arab East, George sees Greece acting as a pimp for Israeli business interests in Europe and as a lobbyist for its dominance in the Middle East. The Zionists have lost an old client in Mubarek and gained a new one in Papendreou.
Like Mubarak, George Papandreou combines servility to his imperial mentors with arrogance and brutality to his Greek subjects. As the Egyptians demonstrated it will take the Greek people more than marches and occasional strikes to bring down an entrenched client of the empire. But it can be done as was exemplified in Cairo!
Last week, 14 Wisconsin Senate Democrats inspired the nation when they decided to flee the state rather than allow quorum for a vote on a bill that would have decimated the state’s public employee unions and dealt a crippling blow to the state’s hard-working teachers, sanitation employees, and other middle class union members. Since then, tens of thousands of Wisconsinites have taken to the streets in even greater number than before the walkout in support of the fleeing legislators and in opposition to Gov. Scott Walker’s (R) anti-middle class agenda.
Inspired by the events in Wisconsin, thousands of Americans all over the country are taking action to battle legislation that would attack their labor rights, defund their schools, threaten their health and safety, and decimate the American middle class. Here are just some of the places across the nation that are taking part in this new “Main Street Movement” to defend and rebuild the American middle class:
GEORGIA
Hundreds of workers demonstrated outside the Georgia capitol yesterday, declaring their solidarity with striking Wisconsin workers. Some demonstrators wore “cheesehead” hats, a clear reference to a cultural tradition in Wisconsin.
IDAHO
Hundreds of teachers marched against legislation that would layoff 770 teachers and leave schools severely understaffed.
INDIANA
In Indiana, House Democrats fled the state, preventing a vote on legislation that would enact “right-to-work” laws that would’ve crippled the right to organize. After the House Democrats took off, hundreds of workers and students marched into the capitol building and staged a massive sit-in, pledging not to leave until the radical legislation was withdrawn. Yesterday, Indiana’s Main Street Movement scored its first victory as Republican lawmakers withdrew the anti-union bill. Indiana Democrats are refusing to come back until right-wing legislators withdraw legislation to undermine the state’s public education system.MONTANA: More than a thousand “conservationists, sportsmen, firefighters, teachers, correctional officers and others” descended on the Montana capitol to protest against “unprecedented GOP attacks on public services and education and laws that protect land, air, water and wildlife.” Students carried signs that read “Keep Us In School,” protesting crippling cuts to the state’s education system.
OHIO
In Ohio, thousands of ordinary Americans who rely on the right to organize to earn good, middle class incomes are facing off with Wisconsin-style legislation backed by Gov. John Kasich (R). Nearly 10,000 protesters demonstrated in Columbus, Ohio, gaining the support of former Gov. Ted Strickland (D-OH) and Rep. Dennis Kucinich (D-OH). So many demonstrators showed up that the Ohio Highway Patrol was ordered to lock the doors of the state capitol to stop more demonstrators from getting into the building.
TENNESSEE
Hundreds of Tennesseans gathered to protest a bill that would completely strip Tennesee teachers of collective bargaining rights. “What you have right now is 300 or so of us, standing and asking the state legislature to focus on what the priorities are right now, instead of attacking working people,” said Mary Mancini, executive director of Tennessee Citizen Action. “If they listen to us, well then that’s great. … If not, I can see this thing growing.”
WASHINGTON
2,000 demonstrators in Olympia, Washington, marched against the state’s proposed budget cuts that would harm students and middle class Washingtonians and in solidarity with workers in Wisconsin. “If Scott Walker succeeds in ending worker rights in Wisconsin, the birthplace of public servants’ liberty, it could happen here,” said Federation of State Employees President Carol Dotlich.
Even larger demonstrations are planned this Saturday, as thousands more Main Street Americans plan to take to the streets to protest the ongoing assault against the middle class. Moveon.org is organizing protests at every single state capitol in the country, aiming to “Save the American Dream.” Meanwhile, US Uncut, an activist group inspired by United Kingdom’s UK Uncut, plans to protest against American tax dodgers, asking why the rich in the country have been able to get off easy on their taxes while low- and middle-income Americans continue to be asked to sacrifice.
The folks insisting on cuts to Social Security and Medicare have revved themselves up and are now in high gear. They see their final victory on the horizon with the possibility of a bipartisan deal involving substantial cuts to both programs. They argue that the large deficits facing the country make it imperative that we address the long-term budget problem, meaning the cost of these programs, immediately.
Before anyone prepares to surrender it is worth remembering once again how we got into the current situation. Before the downturn the budget deficits were relatively modest. Even with the cost of fighting two wars, the Bush tax cuts and a poorly designed Medicare drug benefit the deficit was just over 1.0 percent of GDP in 2007, the last year before the downturn. This was arguably bigger than desired, but a deficit of this size certainly posed no imminent danger to the economy.
Then the economy ran off the track. The reason was the collapse of an $8 trillion housing bubble. This bubble was easy to see for people who knew basic economics and third-grade arithmetic. It was also easy to see that the collapse of this bubble would derail the economy and lead to a serious downturn. That is why some of us were warning about the bubble as early as 2002.
But where were the current group of anti-deficit crusaders back in 2002-2006, when it might still have been possible to do something to stem the growth of the housing bubble before it reached such dangerous levels? Well, they were crusading against the budget deficit of course.
Peter Peterson, the Wall Street investment banker who is the patron saint and financier of much of the deficit crusade was paying for the “Fiscal Wake-Up Tour,” which was supposed to alert people to the dangers of the country’s budget deficit. This traveling road show of policy wonks and economists had nothing to say about the growing housing bubble that was about to explode and sink the economy.
Then we have the Washington Post, which is continuously setting new records for imbalance on this issue, for example by running six different columns by deficit hawks on the same day. As the bubble grew to ever more dangerous levels the Post had no room for those warning of the risks it posed. In fact, its main source for information on the housing market was David Lereah, the chief economist of the National Association of Realtors and the author of the book, “Why the Housing Boom Will Not Bust and How You Can Profit From It.”
The same story can be told about National Public Radio, the major news networks and all the politicians now leading the charge to cut Social Security and Medicare. When the country actually did face a real economic disaster, these people were nowhere in sight. They were diverting attention to other issues and dismissing those of us who tried to warn of the real danger.
Now that we are experiencing an economic disaster – 25 million people unemployed or underemployed, millions of people facing the loss of their homes, more than ten million underwater in their mortgages — as a direct result of their incompetence, these same people are telling us again about the urgent need to cut Social Security and Medicare. The deficit hawks somehow think that their case is more compelling because of the damage done by their incompetence.
It should not work this way. In most lines of work incompetence is not a credential, it should not be one in designing economic policy either. Anyone who cares to tell us about the urgent need to deal with the deficit should first be expected to tell us how they managed to overlook the growth of an $8 trillion housing bubble. They should also be expected to tell us why they have a better understanding of the economy now than they did before the collapse of the housing bubble.
Social Security and Medicare provide essential supports to tens of millions of retirees and disabled workers. The projections are clear. The financing of Social Security poses no major problem – it is projected to be fully solvent for almost 30 years with no changes whatsoever. Medicare poses a problem only because the private health care system is broken.
Honest people talk about the need to fix the health care system. Less-honest people scream about the need to reform “entitlements.” And, they think that the public somehow should listen to them because of their record of incompetence.
Supposedly responsible news organizations, like the Washington Post and National Public Radio, have gotten in the habit of telling their audiences that we have to cut Social Security and Medicare. The need for cuts in these programs is often put forward as an unquestioned fact, not just in editorials and opinion pieces, but in supposedly objective news stories.
President Obama and the Congress have taken 66% of discretionary spending in the federal budget off the table – the Security Budget – while proposing a freeze to the rest of the budget and deep cuts to some programs that provide necessities for the American people. His budget crystalizes a choice that U.S. presidents have been making since President Eisenhower warned of the military-industrial complex – investment in the military vs. investment in the civilian economy.
The bloated and sacrosanct security budget – the military, domestic security and intelligence budgets –all saw rapid growth under President Bush when the DoD doubled its budget. Under President Obama the trend has continued with record military, intelligence and domestic security budgets. And, while the so-called recovery has only been a recovery for Wall Street and big business, the administration and congress are focused more on the deficit than on re-starting the economy for the rest of us. But there is more talk of cutting Social Security and Medicare than cutting the security budget. In fact, these two items are called entitlements because they are a contract with working Americans who pay for them in every paycheck. For this reason they should not even be considered part of the deficit. Payroll taxes fund these two programs that are essential for older Americans in their retirement years. Both face budget challenges but can be fixed, indeed Social Security has more than $2.5 trillion in Treasury Notes in reserve.
President Obama has proposed the largest DoD budget since World War II, $553 billion (not including war funding or nuclear weapons funding in the Department of Energy). Much attention has been shined on Secretary of Defense Gates’ proposal to “cut” $78 billion in the Pentagon budget. Those “cuts” take place over five years with reductions taking place after the 2012 election in 2014 and 2015. And, the “cuts” do not include the cost of wars. The Afghanistan war alone could eat up projected “savings” and if the CIA’s war in Pakistan escalates that will be an even bigger budget item. Further, we have not seen what the continuing U.S. military footprint in Iraq will cost. These projected cuts are more image than reality.
How does military spending impact Americans? President Reagan’s former assistant secretary of defense Lawrence Korb describes the military budget as “an annual tax of more than $7,000 on every household in the country.” While increasing the security budget, Obama and the Democrats have proposed widespread cuts to critical programs from a 50% cut in low-income heating assistance to nearly a 30% cut to the clean drinking water fund. They have also proposed a 25% cut ($1.3 billion) to the community development block grants used to fund local community development including affordable housing, anti-poverty programs, and infrastructure development. These are essential services needed for Americans health, safety and economic security. Of course, Republican cuts in the House budget are even more extreme but Obama set the table for them by making the debate about deficits and both parties will not touch the security budget. Military analyst, William Hartung, writes “These cuts will be painful, and they will be felt in every middle- and lower-income household in America.”
Cities and states are cutting essential services to balance their budgets. U.S. taxpayers will spend $737 billion for Pentagon spending for FY2011 including war funding). To get a sense of what this means, for the same amount of money tax payers could provide funding for 11.3 million elementary school teachers for one year or 93.5 million scholarships for university students for one year… Instead all these programs face cutbacks, while military spending grows. […]
Cutting $1 trillion from the federal budget is the goal of the Obama administration deficit plan. All of these cuts could come from military spending and still leave the U.S. militarily dominant. In fact, since the administration has projected an increase in spending of $6.5 trillion from 2011 to 2020, even a trillion would be a slowing of growth more than a real cut. Lawrence Korb lays out a five point plan to reduce military spending by $1 trillion without jeopardizing national security and thereby protecting U.S. economic security.
He is not alone, the Sustainable Defense Task Force provides specific cuts without harming U.S. national security including:
•The $238 billion Joint Strike Fighter program: Canceling the program and relying instead on upgraded versions of current aircraft would save almost $50 billion over ten years.
•The MV-22 Osprey: Replacing this dangerous, overpriced, and under-performing aircraft with cheaper alternatives would save over $10 billion over ten years.
•Reducing the number of U.S. troops in Europe and Asia to 100,000 from current levels of 150,000 would save $80 billion over a decade.
•Reforming Pentagon health care systems so that retirees pay modest, reasonable premiums could save $60 billion over a decade.
•Scaling back missile defense and space weapons programs could save over $50 billion over a decade.
•Further reductions in the U.S. nuclear arsenal, including deployment of fewer ballistic-missile launching submarines, could save over $100 billion in a ten year period, much of it in operating costs
•Reducing the size of the Navy from 286 to 230 ships would save over $125 billion over ten years.
If you combine these recommendations of the five point plan of Lawrence Korb, which includes items like bringing home 50,000 of the 150,000 troops stationed in Asia and Europe, reducing the size of the Army and Marine Corps to their pre-Iraq invasion level and reducing nuclear weapons from 1,968 to the 311 the Military War College says is needed for defense, the U.S. would save another $200 billion.
For many, these would only be the starting points of correctly prioritizing military spending. President Eisenhower warned about the military industrial complex 50 year ago. During that time, U.S. spending on the military adjusted for inflation has more than doubled and we have moved to a permanent war state. Columbia University’s Seymour Melman, a professor of industrial engineering, pointed out that “Industrial productivity, the foundation of every nation’s economic growth, is eroded by the relentlessly predatory effects of the military economy.” In fact, we have seen – as we see in the Obama budget – a constant conflict between the military economy and the civilian economy. The civilian economy is losing that battle.
Thomas Woods, Jr. recently wrote in the American Conservative that military spending is parasitic as it feeds off the economy rather than grows it. The scale of resources used by the military is exorbitant, Woods writes: “To train a single combat pilot, for instance, costs between $5 million and $7 million. Over a period of two years, the average U.S. motorist uses about as much fuel as does a single F-16 training jet in less than an hour. The Abrams tank uses up 3.8 gallons of fuel in traveling one mile. Between 2 and 11 percent of the world’s use of 14 important minerals, from copper to aluminum to zinc, is consumed by the U.S. military, as is about 6 percent of the world’s consumption of petroleum. The Pentagon’s energy use in a single year could power all U.S. mass transit systems for nearly 14 years.”
To get a sense of the competition between the civilian and military economy, the Department of Commerce estimated the value of the nation’s plants, equipment, and infrastructure (capital stock) at just over $7.29 trillion in 1985; and from 1947 to 1987 the military spent the equivalent, $7.62 trillion in capital resources.
With the long record of the ascendency of military spending it is not surprising to see the U.S. economy in collapse, industry disappearing and the infrastructure crumbling. Not only has the U.S. failed to win a major war since World War II, but the cost of the standing army has become a burden on all of us and a drag on the economy. Some describe the U.S. Empire in decline and others see a collapse as possible at any moment.
The failure of President Obama to confront military spending in this time of economic collapse and perceived deficit crisis, when tax dollars are needed to restart the domestic economy, is not only a short term budget failure but does not face up to the long-term damaging economic impact of the American military empire.
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Kevin Zeese is executive director of Prosperity Agenda (www.ProsperityAgenda.US) and Voters for Peace (www.VotersForPeace.US) and an editor of the book ComeHomeAmerica.US (visit ComeHomeAmerica.US for more information and to purchase the book).
I don’t feel that national news has been giving accurate coverage of the rallies in Madison, WI, so I’m here to tell you what people are REALLY protesting about. Hint: it’s not about pay-cuts.
And if you think that’s not bad enough, consider this: 2/3 of corporations in WI don’t pay any taxes AT ALL. Where do YOU think the money should be coming from? http://www.huffingtonpost.com/2011/02…
The cost of staples from grains to meat to sugar continues to rise, raising fears of a global food crisis and ensuing political instability.
In 2008, high food prices led to riots in 25 different countries. The specter of another such crisis reared its head in September when 12 people were killed in food riots in Mozambique.
“The food riots in Mozambique can be repeated anywhere in the coming years,” said Indian food analyst Devinder Sharma. “Unless the world encourages developing countries to become self-sufficient in food grains, the threat of impending food riots will remain hanging over nations.”
Global meat prices are currently at a 20-year high, while soybean prices are at a 16-month high. Wheat prices have risen 57 percent over the last six months, and over the same period rice prices rose 45 percent and sugar prices rose 55 percent. In the last few weeks of October alone, wheat and corn prices surged 30 percent.
The price crunch has been worsened by a spate of recent climate-related crop failures worldwide, but the underlying causes are more long-term. The UN largely blames loss of arable land to urbanization, degradation and conversion to biofuels production.
“Worldwide, 5 million to 10 million hectares [12 million to 25 million acres] of agricultural land are being lost annually due to severe degradation and another 19.5 million are lost for industrial uses and urbanization,” wrote UN special rapporteur Olivier de Schutter on the right to food in a recent report.
“But the pressure on land resulting from these factors has been boosted in recent years by policies favoring large-scale industrial plantations. According to the World Bank, more than one-third of large-scale land acquisitions are intended to produce agrofuels.”
In addition, speculation by investors has artificially inflated food prices even beyond their already alarming highs, and is likely to continue doing so.
“A food crisis on the scale of two or three years ago is not imminent, but the underlying causes [of what happened then] are still there,” said Chris Leather of Oxfam.
The eastern Texas Panhandle, a land of rolling sand hills, tree-lined creek beds and tall grass vistas, may seem a desolate place to outsiders. Still, it has its beauty, especially to the cattle ranchers and wheat farmers who work and live on it. But not for long.
Much of this land, the fragile habitat of the Lesser Prairie Chicken and the Whooping Crane, is scheduled to become industrialized if the Texas PUC, the DOE and FERC have their way. Incongruously, the demolition of this mostly native grassland is being proposed in the name of green energy.
The Competitive Renewable Energy Zone (CREZ), a name not without irony, was initiated by a 10 million dollar grant from the Department of Energy (DOE). In December of 2009, plans were expanded when Secretary Chu joined Jon Wellinghoff of the Federal Energy Regulatory Commission (FERC) in a Memorandum of Understanding to coordinate efforts to interconnect several transmission lines. The CREZ line, part of the larger Electrical Reliability Council of Texas (ERCOT) system, is to help supply the Dallas/Fort Worth Metroplex with wind-generated electricity from the northern Texas Panhandle.
There are problems, however. Protests from disgruntled landowners have been met with staunch resistance from Cross Texas Transmission, the developer of the Gray to Tesla and Gray to White Deer lines. In an escalation of that resistance, landowners were sent a “Access Consent Form” the day before Thanksgiving insisting their lands be made available for survey. With the long weekend, landowners had only two working days to find representation and prepare a response and still meet CTT’s deadline. CTT, acting under the auspices of the Public Utilities Commission, has been given the power of eminent domain. With that looming over their heads, most landowners signed but added wording insisting Cross Texas Transmission follow established environmental laws, the same wording and the same laws now required on state-owned lands. Cross Texas responded to their request by issuing restraining orders and suing for entry without restraint.
The action was not surprising. Since having been awarded the contract to construct, operate and maintain these lines in October of 2009, Cross Texas has consistently reminded landowners that they have no options and has refused to address any of the economic or environmental problems created by the transmission lines.
The Economic Problems
According to the Texas Public Policy Foundation, wind energy in Texas will have in excess of 28 billion dollars in subsidies, federal and state, poured into its development by 2025. When tax breaks, market disruptions, increased production and ancillary costs are added in, the taxpayer’s bill could top 60 billion dollars. In spite of the massive funds being thrown its way, wind-generated electricity remains far more expensive for consumers than that produced from coal, gas or from nuclear facilities. It’s also proven far too intermittent. As a result, continued expansion of wind fields could raise rates paid by consumers by as much as 50 percent, even with the massive federal and state subsidies. The impact to small businesses and to those on fixed incomes could be devastating. Moreover, many experts believe that, due to the intermittent flow and low energy flux, wind generated electricity can never be competitive.
Science and Technology writer Gregory Murphy compared the energy flux density of the Comanche Peak nuclear plant south of Dallas to a hypothetical wind installation. The nuclear plant has two units capable of generating 2,500 megawatts and sits on only 4,000 acres which includes a man-made cooling lake that is open to the public and is used for recreation. Taking into account that the average wind turbine has a capacity of only 25 percent of its nameplate rated output, it would take 6,668 1.5 megawatt wind turbines to equal the output of the Comanche Peak station.
Spacing wind turbines at 5 per section of land, a rate somewhat higher than the density landowners were promised by wind farm developers, a wind installation equaling the output of the Comanche Peak plant would require well over 13,000 sections of land or 8.6 million acres. That is an area roughly 1/20th the size of Texas. All this land, plus the lands decimated by the transmission lines carrying electricity to major metropolitan areas, would have reduced productivity, severely increased erosion and drastically reduced property values—certainly no boon for landowners.
“Wind works only 25 percent of the time,” said Jeff Haley, rancher and Commissioner in Gray County, Texas. “And the CREZ line alone will cost 4.9 billion dollars. That’s a projected cost in 2008 dollars. It will almost certainly be more, but whatever it turns out to be, it will have to be paid for.”
“Don’t kid yourself,” said David Hall, another Gray County rancher. “The consumers will pay for much of this, and we’ll all pay for the rest with our tax dollars. It’s not just that I don’t want them on my land. It’s that this kind of government boondoggle is wrong. The politicians supporting these things don’t understand them. They’re being advised that this or that is the right thing to do, and they’re not informed enough to make the right decisions.”
“We’re dealing with Soviet-style technocrats,” Haley added.
The metaphor isn’t without basis. Cross Texas Transmission is a wholly owned subsidiary of J. L. Power Group, a Delaware shell corporation with no board of directors and only a few employees. SEC filings list Mikhail Segal, a one-time official in the Ministry of Energy in the former Soviet Union and Michael Liebellson as founders. From the outset, landowners say, Cross Texas Transmission has acted every bit the oligarch and used the PUC’s power of eminent domain as a weapon.
“These technocrats understand how to maneuver through the technicalities of the law.” Haley said. “It’s their job. They do it every day. How can we run our businesses and spend the time this is requiring to stand up to this kind of abuse?”
One of the maneuvers he is referring to is the Texas PUC hearings held last August. Three routes had been selected for the proposed Gray to Tesla line with one listed as the “preferred route.” Multiple landowners and attorneys were present to defend their properties from damage along this route. Without discussion, the Public Utilities Commission chose an alternate route automatically subjecting those properties not represented to eminent domain. The landowners on the route selected had received a notice that their lands could, at some point, be affected, but all assumed that only the preferred route would be considered at the hearing. None realized they would not have an opportunity to intervene specifically for their properties should the preferred route be rejected.
In addition to the issues of land spoilage and the usurpation of private property rights, the issue of viability is very much at the forefront. A number of wind power companies are currently being sued by utilities companies and municipalities for not being able to deliver the electricity they promised. In Texas, three wind farms owned by NextEra Energy Resources LLC agreed to sell specified amounts of power annually to Luminant Energy Company beginning in 2002. When they failed to deliver the contracted amount, Luminant sued for $29 million in liquidated damages and won. A similar case occurred years earlier in Washington state, and observers of the wind industry are predicting a deluge of such cases in the future.
The Waxman-Markey Cap-and-Trade Bill may be momentarily dead, but there are persistent rumors of its resurrection. Even without it, proposals are floating through the halls of Congress which would offer billions more to wind developers and demand that as much as 20% of our electricity be generated from renewable sources. While these proposals are being discussed, three wind farms are cluttering the landscape of Hawaii, monuments in rust to the government’s imposition of a technology that simply does not work.
A similar situation exists in California. In the December 13th, 2010 edition of The American Thinker, Andrew Walden discusses what was once the largest collection of wind farms in the world. “In the best wind spots on earth,” he writes, “14,000 wind turbines were simply abandoned. Spinning, post-industrial junk which generates nothing but bird kills.”
If and when federal funds cease to be shoveled into the wind projects now underway in Texas, most industry observers believe they will also be abandoned leaving the once swaying prairie an industrial junkyard of concrete, steel and fiberglass.
Meanwhile, the green jobs pledged by the Obama Administration seem to be suffering the same fate as the birds. Almost 12 percent of the President’s original $814 billion stimulus package, enacted early in 2009, went to renewable energy projects. The White House estimates that the stimulus created 190,700 green jobs. The Department of Energy, however, reports only 82,000 jobs actually resulted from the bill and as many as 80 percent of those went to firms in China, Spain and South Korea. Further, the National Center for Policy Analysis reports that, because of the expense, renewable energy is in reality costing more jobs than it is creating.
The Enviromental Problems
… While pro-wind energy groups maintain that less than one percent of land is removed from actual production by turbines and transmission lines, many experts argue otherwise. First, the towers create large dry spots at their base that, in a semi-arid environment like the Texas Panhandle, simply won’t support a vegetative cover. The resulting “blow spots” grow with each wind storm and can, in short order, consume many acres. Further, roads must be built to service turbines and transmission towers. In sandy areas like most of the Gray to Tesla line, the surfaces must be paved or coated to prevent blowing. These roads prevent normal moisture absorption and interfere with animal migration, and the damage to wildlife by the existence of tall structures is far greater than that from technologies dependent on fossil fuels. Tall grasses and wildlife are also damaged by the turbines’ prodigious oil leaks, plus, in an area already plagued by major grass fires often started by downed power lines, lines of the magnitude proposed are not welcome.
Heavy equipment used to install and service these lines and turbines compacts the turf and churns the surface, destroying vegetation. Then, during the frequent winter and spring winds, the barren spots grow larger. Once productive sandy loam becomes what Panhandle ranchers call “blow sand,” soil leached of organic material by the wind, unable to sustain a vegetative cover.
Both the turbines and the lines interfere with bird migration as well. The tall structures inhibit the breeding of the Lesser Prairie Chicken, and their presence will put the fate of the Whooping Crane very much into question. Further fragmentation of the LPC nesting grounds will almost certainly put it on the Endangered Species list and subject land owners to close federal scrutiny creating even more unwanted intrusion.
Richard Peet, Gray County Judge, wrote in a letter to Assistant Attorney General Moreno and Tom Clark of the Natural Resources Division on December 9, 2010, that prior to allowing Cross Texas Transmission to circumvent the law that requires an environmental impact study, U. S. Fish and Wildlife Service agents themselves pointed out that the currently proposed positioning of the Gray to Tesla line would “most assuredly” put the LPC on the endangered species list. At the very least, it was expected that the Fish and Wildlife Service would step in and insist that the route be studied for impact to wildlife. But the Service said there was no federal action that triggered a proper Environmental Impact Statement and that no permit would be required of CTT. However, a field coordinator for the Service told one landowner, if a permit is required, more than likely they will just pay mitigation and all resistance would end.
The Problems of Quasi-Capitalism
“Wind power is an open trough of government subsidies, tax credits and state mandates. Taken together, it’s a massive corporate welfare effort that means big money for the wind power developers and big costs for the rest of us.” Loren Steffy, the Houston Chronicle.
In a free market, goods and services are offered for gain. So long as it is mutually advantageous to buyer and seller, it works. When products fail to meet requirements, the buyer finds better, cheaper or more desirable products elsewhere. When the producer fails to make a profit, he generally seeks another market. Or another product
The role of government in such a system is limited. If the producer fails to deliver promised goods or delivers something other than what was promised, or if the buyer refuses to pay the agreed-upon price, the government steps in through the criminal courts system, demands remediation and applies appropriate penalties. But what happens when the government itself exerts influence in the decision-making process or even dictates the outcome of the transaction?
In that case, competitively priced goods or services cease to be the primary concern of the producer. Courting government agencies and influencing laws becomes the chief goal. Government-backed or government-created corporations become an extension of political might, and a symbiotic relationship develops between lawmakers and corporations facilitated by laws that, in many instances, they helped write.
Intermittent sources of power, especially those that require backup from coal or gas, cannot compete in the open marketplace. Equipping corporate welfare recipients with one of the most easily abused powers of the state in an attempt to force the populace to accept an unreliable source of energy at a tremendously inflated price is both unwise and dangerous. Such policies come at great cost, and landowners may only be the first to be asked to pay.
“The government is using corporations as its arm. They’re not just destroying my land; they’re destroying my heritage,” said Mark Cadra, a Wheeler County rancher whose land lies along the route selected by the Texas PUC. “I was taught for as long as I can remember to be a good steward of the land. Now the government has given this company the right to take what they want and do whatever they want with it. Believe me, what they want will damage my land forever. It makes me feel helpless.”
~
Sam Pakan is a rancher and writer in Wheeler County, Texas. He is currently producing beef for the health market while writing a series of historical novels set in WWII. He also edits books for selected novelists.
Obama’s new budget is a continuation of Wall Street’s class war against the poor and middle class. Wall Street wasn’t through with us when the banksters sold their fraudulent derivatives into our pension funds, wrecked Americans’ job prospects and retirement plans, secured a $700 billion bailout at taxpayers’ expense while foreclosing on the homes of millions of Americans, and loaded up the Federal Reserve’s balance sheet with several trillion dollars of junk financial paper in exchange for newly created money to shore up the banks’ balance sheets. The effect of the Federal Reserve’s “quantitative easing” on inflation, interest rates, and the dollar’s foreign exchange value are yet to hit. When they do, Americans will get a lesson in poverty.
Now the ruling oligarchies have struck again, this time through the federal budget. The U.S. government has a huge military/security budget. It is as large as the budgets of the rest of the world combined. The Pentagon, CIA, and Homeland Security budgets account for the $1.1 trillion federal deficit that the Obama administration forecasts for fiscal year 2012. This massive deficit spending serves only one purpose–the enrichment of the private companies that serve the military/security complex. These companies, along with those on Wall Street, are who elect the U.S. government.
The U.S. has no enemies except those that the U.S. creates by bombing and invading other countries and by overthrowing foreign leaders and installing American puppets in their place.
China does not conduct naval exercises off the California coast, but the U.S. conducts war games in the China Sea off China’s coast. Russia does not mass troops on Europe’s borders, but the U.S. places missiles on Russia’s borders. The U.S. is determined to create as many enemies as possible in order to continue its bleeding of the American population to feed the ravenous military/security complex.
The U.S. government actually spends $56 billion a year, that is, $56,000 million, in order that American air travelers can be porno-scanned and sexually groped so that firms represented by former Homeland Security Secretary Michael Chertoff can make large profits selling the scanning equipment.
With a perpetual budget deficit driven by the military/security complex’s desire for profits, the real cause of America’s enormous budget deficit is off-limits for discussion.
The U.S. Secretary of War-Mongering, Robert Gates, declared: “We shrink from our global security responsibilities at our peril.” The military brass warns of cutting any of the billions of aid to Israel and Egypt, two functionaries for its Middle East “policy.”
But what are “our” global security responsibilities? Where did they come from? Why would America be at peril if America stopped bombing and invading other countries and interfering in their internal affairs? The perils America faces are all self-created.
The answer to this question used to be that otherwise we would be murdered in our beds by “the worldwide communist conspiracy.” Today the answer is that we will be murdered in our airplanes, train stations, and shopping centers by “Muslim terrorists” and by a newly created imaginary threat–”domestic extremists,” that is, war protesters and environmentalists.
The U.S. military/security complex is capable of creating any number of false flag events in order to make these threats seem real to a public whose intelligence is limited to TV, shopping mall experiences, and football games.
So Americans are stuck with enormous budget deficits that the Federal Reserve must finance by printing new money, money that sooner or later will destroy the purchasing power of the dollar and its role as world reserve currency. When the dollar goes, American power goes.
For the ruling oligarchies, the question is: how to save their power.
Their answer is: make the people pay.
And that is what their latest puppet, President Obama, is doing.
With the U.S. in the worst recession since the Great Depression, a great recession that John Williams and Gerald Celente, along with myself, have said is deepening, the “Obama budget” takes aim at support programs for the poor and out-of-work. The American elites are transforming themselves into idiots as they seek to replicate in America the conditions that have led to the overthrows of similarly corrupt elites in Tunisia and Egypt and mounting challenges to U.S. puppet governments elsewhere.
All we need is a few million more Americans with nothing to lose in order to bring the disturbances in the Middle East home to America. With the U.S. military bogged down in wars abroad, an American revolution would have the best chance of success.
American politicians have to fund Israel as the money returns in campaign contributions.
The U.S. government must fund the Egyptian military if there is to be any hope of turning the next Egyptian government into another American puppet that will serve Israel by continuing the blockade of the Palestinians herded into the Gaza ghetto.
These goals are far more important to the American elite than Pell Grants that enable poor Americans to obtain an education, or clean water, or community block grants, or the low income energy assistance program (cut by the amount that U.S. taxpayers are forced to give to Israel).
There are also $7,700 million of cuts in Medicaid and other health programs over the next five years.
Given the magnitude of the U.S. budget deficit, these sums are a pittance. The cuts will have no effect on U.S. Treasury financing needs. They will put no brakes on the Federal Reserve’s need to print money in order to keep the U.S. government in operation.
These cuts serve one purpose: to further the Republican Party’s myth that America is in economic trouble because of the poor: The poor are shiftless. They won’t work. The only reason unemployment is high is that the poor had rather be on welfare.
A new addition to the welfare myth is that recent middle class college graduates won’t take the jobs offered them, because their parents have too much money, and the kids like living at home without having to do anything. A spoiled generation, they come out of university refusing any job that doesn’t start out as CEO of a Fortune 500 company. The reason that engineering graduates do not get job interviews is that they do not want them.
What all this leads to is an assault on “entitlements”, which means Social Security and Medicare. The elites have programmed, through their control of the media, a large part of the population, especially those who think of themselves as conservatives, to conflate “entitlements” with welfare. America is going to hell not because of foreign wars that serve no American purpose, but because people, who have paid 15 per cent of their payroll all their lives for old age pensions and medical care, want “handouts” in their retirement years. Why do these selfish people think that working Americans should be forced through payroll taxes to pay for the pensions and medical care of the retirees? Why didn’t the retirees consume less and prepare for their own retirement?
The elite’s line, and that of their hired spokespersons in “think tanks” and universities, is that America is in trouble because of its retirees.
Too many Americans have been brainwashed to believe that America is in trouble because of its poor and its retirees. America is not in trouble because it coerces a dwindling number of taxpayers to support the military/security complex’s enormous profits, American puppet governments abroad, and Israel.
The American elite’s solution for America’s problems is not merely to foreclose on the homes of Americans whose jobs were sent offshore, but to add to the numbers of distressed Americans with nothing to lose the sick and the dispossessed retirees, and the university graduates who cannot find jobs that have been sent to Chine and India.
Of all the countries in the world, none need a revolution as bad as the United States, a country ruled by a handful of selfish oligarchs who have more income and wealth than can be spent in a lifetime.
~
Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
The Brookings Institution stands alongside Harvard, Yale and Princeton, among the nation’s elite intellectual institutions. This is why it so striking that it chose to invite former Federal Reserve Board Chairman Alan Greenspan to give the keynote address at a forum on reforming the home mortgage finance system last week.
It would be difficult to imagine a more disastrous failure than Alan Greenspan. Tens of millions of people are unemployed, underemployed or have given up looking for work altogether as a direct result of Greenspan’s incompetence. Millions of families are facing the loss of their homes. More than one-quarter of mortgage holders are underwater in their mortgages.
The huge baby boom cohorts saw most of their life savings disappear when the collapse of the bubble destroyed their home equity. They are now approaching retirement with almost nothing to rely upon other than their Social Security.
This is the direct result of Alan Greenspan’s incompetence as Fed chair. He either did not recognize the $8 trillion housing bubble or somehow did not think it was a big deal. This was monumental incompetence of the highest order.
The housing bubble was really hard to miss for anyone who can read a chart and knows arithmetic. For a hundred years nationwide house prices had just tracked the overall rate of inflation. Suddenly in the mid-90s, coinciding with the stock bubble, house prices began to substantially outpace the overall rate of inflation.
By 2002, house prices had already risen by more than 30 percentage points in excess of the overall rate of inflation. At the peak of the bubble in 2006 the inflation in house prices had exceeded the overall rate of inflation by more than 70 percentage points, creating more than $8 trillion in housing bubble wealth.
There was no remotely plausible explanation for this run-up based on the fundamentals of either the demand or supply side of the housing market. Population growth and household formation were much slower during the bubble years than in prior decades. Income growth had been healthy in the late 90s, but went in reverse in the 00s. On the supply side, the country was building homes at near-record rates, so supply constraints obviously could not explain the run-up in prices.
Anyone looking for an explanation in the fundamentals would have to explain why rents were going nowhere. The fact that the vacancy rate had already hit a record high as early as 2002 should have been another really big, bright warning sign that housing was in an unsustainable bubble.
If it was impossible for a competent economist to miss the housing bubble, it should also have been impossible for them to think it could deflate harmlessly. The bubbles in residential and non-residential construction led to enormous overbuilding in both sectors. The wealth effect associated with $8 trillion of transient housing bubble wealth was generating close to $500 billion in annual consumption.
This meant that the combined drop in construction and consumption demand from the collapse off the bubble was almost certainly going to be in excess of $1 trillion. Did Greenspan think he had something in his bag of tricks as Federal Reserve Board chairman that would allow him to quickly replace more than $1 trillion in annual demand?
Absent some new source of demand (which has not appeared), it was inevitable that the collapse of the bubble would lead to a prolonged period of high unemployment. This was all 100 percent predictable; but Greenspan did not predict it…
Incredibly, in spite of this disastrous performance as Fed chairman, Alan Greenspan is still being feted in elite circles. Perhaps this is due to the fact that the people who sit in these elite circles openly celebrated Mr. Greenspan as he drove the economy off a cliff. He was declared the “Maestro” by one of the country’s top reporters. At the annual meeting of central bankers in Jackson Hole, Wyoming, the leading lights of the economics profession debated whether he was the greatest central banker of all time as he prepared to leave his post.
In other words, Greenspan may have ruined the lives of tens of millions of people and cost the lives of tens of thousands (yes, people die because of inept economic policy – they kill themselves, they don’t get health care that they need, and they die from alcoholism and despair), but he does not bear the blame alone. Most of the people who hold top positions in policy and academic circles share blame for disaster – refusing to do the simple analysis that would have allowed them to see this disaster coming.
The pain and suffering caused by Alan Greenspan’s incompetence vastly exceeds the harm that our worst enemies could even dream of inflicting on the United States. Yet, he can always count on a position of honor at the Brookings Institution. Heckuva job, Alan!
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