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Traded away for a make-believe economy, the real US economy is dead

Posted by kelliasworld on July 18, 2009

By Paul Craig Roberts
Online Journal Contributing Writer

Online Journal link to article

Jul 17, 2009, 00:16

There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical “New Economy.”

The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans’ wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can’t borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America’s consumer economy, approximately 70 percent of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Meanwhile the US government’s budget deficit has jumped from $455 billion in 2008 to $2,000 billion this year, with another $2,000 billion on the books for 2010. And President Obama has intensified America’s expensive war of aggression in Afghanistan and initiated a new war in Pakistan.

There is no way for these deficits to be financed except by printing money or by further collapse in stock markets that would drive people out of equity into bonds.

The US government’s budget is 50 percent in the red. That means half of every dollar the federal government spends must be borrowed or printed. Because of the worldwide debacle caused by Wall Street’s financial gangsterism, the world needs its own money and hasn’t $2 trillion annually to lend to Washington.

As dollars are printed, the growing supply adds to the pressure on the dollar’s role as reserve currency. Already America’s largest creditor, China, is admonishing Washington to protect China’s investment in US debt and is lobbying for a new reserve currency to replace the dollar before it collapses. According to various reports, China is spending down its holdings of US dollars by acquiring gold and stocks of raw materials and energy.

The price of one-ounce gold coins is $1,000 despite efforts of the US government to hold down the gold price. How high will this price jump when the rest of the world decides that the bankruptcy of “the world’s only superpower” is at hand?

And what will happen to America’s ability to import not only oil, but also the manufactured goods on which it is import-dependent?

When the oversupplied US dollar loses the reserve currency role, the US will no longer be able to pay for its massive imports of real goods and services with pieces of paper. Overnight, shortages will appear and Americans will be poorer.

Nothing in Presidents Bush and Obama’s economic policy addresses the real issues. Instead, Goldman Sachs was bailed out, more than once. As Eliot Spitzer said, the banks made a “bloody fortune” with US aid.

It was not the millions of now homeless homeowners who were bailed out. It was not the scant remains of American manufacturing — General Motors and Chrysler — that were bailed out. It was the Wall Street banks.

According to Bloomberg.com, Goldman Sachs’ current record earnings from their free or low cost capital supplied by broke American taxpayers has led the firm to decide to boost compensation and benefits by 33 percent. On an annual basis, this comes to compensation of $773,000 per employee.

This should tell even the most dimwitted patriot who “their” government represents.

The worst of the economic crisis has not yet hit. I don’t mean the rest of the real estate crisis that is waiting in the wings. Home prices will fall further when the foreclosed properties currently held off the market are dumped. Store and office closings are adversely impacting the ability of owners of shopping malls and office buildings to make their mortgage payments. Commercial real estate loans were also securitized and turned into derivatives.

The real crisis awaits us. It is the crisis of high unemployment, of stagnant and declining real wages confronted with rising prices from the printing of money to pay the government’s bills and from the dollar’s loss of exchange value. Suddenly, Wal-Mart prices will look like Nieman Marcus prices.

Retirees dependent on state pension systems, which cannot print money, might not be paid, or might be paid with IOUs. They will not even have depreciating money with which to try to pay their bills. Desperate tax authorities will squeeze the remaining life out of the middle class.

Nothing in Obama’s economic policy is directed at saving the US dollar as reserve currency or the livelihoods of the American people. Obama’s policy, like Bush’s before him, is keyed to the enrichment of Goldman Sachs and the armament industries.

Matt Taibbi describes Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentless jamming its blood funnel into anything that smells like money.” Look at the Goldman Sachs representatives in the Clinton, Bush and Obama administrations. This bankster firm controls the economic policy of the United States.

Little wonder that Goldman Sachs has record earnings while the rest of us grow poorer by the day.

Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider’s Account of Policymaking in Washington; Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice. Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.
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And when high energy costs make it too expensive to get our manufactured goods from slaves in Asia or Central America, then what? –K.R.

Posted in America, Economics | 8 Comments »

Ill From Food? Investigations Vary by State

Posted by kelliasworld on April 20, 2009

New York Times Original Content
April 20, 2009

By GARDINER HARRIS

In just about every major contaminated food scare, Minnesotans become sick by the dozens while few people in Kentucky and other states are counted among the ill.

Contaminated peanuts? Forty-two Minnesotans were reported sick compared with three Kentuckians. Jalapeño peppers last year? Thirty-one in Minnesota and two in Kentucky became ill. The different numbers arise because health officials in Kentucky and many other states fail to investigate many complaints of food-related sickness while those in Minnesota do so diligently, safeguarding not only Minnesotans but much of the rest of the country, as well.

Congress and the Obama administration have said that more inspections and new food production rules are needed to prevent food-related diseases, but far less attention has been paid to fixing the fractured system by which officials detect and stop ongoing outbreaks. Right now, uncovering which foods have been contaminated is left to a patchwork of more than 3,000 federal, state and local health departments that are, for the most part, poorly financed, poorly trained and disconnected, officials said.

The importance of a few epidemiologists in Minnesota demonstrates the problem. If not for the Minnesota Department of Health, the Peanut Corporation of America might still be selling salmonella-laced peanuts, Dole might still be selling contaminated lettuce, and ConAgra might still be selling dangerous Banquet brand pot pies — sickening hundreds or thousands more people.

In these and other cases, epidemiologists from Minnesota pinpointed the causes of food scares while officials in other states were barely aware that their residents were getting sick. From 1990 to 2006, Minnesota health officials uncovered 548 food-related illness outbreaks, while those in Kentucky found 18, according to an analysis of health records.

The surveillance system is vital because even with reforms intended to prevent outbreaks, food-related disease will remain among the most common sources of illness. One-quarter of the nation’s population is sickened every year by contaminated food, 300,000 are hospitalized and 5,000 die, and decades of steady improvements in the safety of the nation’s food supply have ended in recent years.

“The longer it takes you to nail an outbreak, the more people are going to get sick,” said Dr. David Acheson, associate commissioner for foods at the Food and Drug Administration. “And if it’s a pathogen that causes death, the more people are going to die.”

With states cutting back in the face of budget crises, disease surveillance is worsening, several officials said.

“Just $50 million spread over the entire country would make a huge difference,” said Dr. Timothy Jones, the state epidemiologist in Tennessee.

Take the case of Lauren Threlkeld, who went to a Kroger grocery store in Lexington, Ky., in August 2007 and bought a bag of Dole baby spinach contaminated with E. coli O157. She became violently ill with bloody diarrhea and was hospitalized for nearly a week.

When Ms. Threlkeld finally went home to recuperate in Madisonville, Ky., a county health worker called only to verify that she had fallen ill in another county. No one asked about the foods she had eaten or what might have made her so ill, she said. Later efforts by her lawyer pinpointed the source of her illness — far too late to help others avoid similar fates.

Dr. William D. Hacker, the public health commissioner in Kentucky, blamed tight budgets. “We have had a historically poor record of reporting” food-borne illnesses, Dr. Hacker said. “We are working hard to change our culture even with limited resources.”

In Minnesota and a few other states, victims of food-related illnesses tell very different stories. Sarah Kirchner of Belle Plaine, Minn., said health workers called her three separate times and spent hours discussing her children’s diet almost immediately after a laboratory test verified that one had fallen ill with salmonella. Officials in Minnesota traced the outbreak to peanut butter in part because of Ms. Kirchner’s responses.

“There is no question that some states take this far more seriously than others,” Dr. Acheson said.

Even when county and state health departments investigate, their methods often differ so greatly that federal officials have difficulty uncovering patterns. This leads to terrible delays.

“Everybody does things differently, even within many states,” Dr. Acheson said. “It’s a huge challenge.”

Some delay is inevitable. Most people sickened by food do not bother to see a doctor. Many of those who do are not asked to provide a stool sample, and when asked, some refuse.

When patients are willing, laboratories may not be. In Utah, for instance, only 18 of the state’s 1,388 medical laboratories process stool tests, said Dr. Pat Luedtke, director of the Utah public health laboratory. Well-meaning doctors who wish to send stool samples sometimes must pay the postage because insurers often refuse to pay for a test that largely serves a public health function; many doctors do not bother.

By the time public health officials notice that a growing number of such samples carry the same genetic fingerprint — a clear sign that a popular food is contaminated — weeks have passed. By then, victims’ memories of what they ate have faded. So rapid and thorough responses by health officials, a rarity in many states, are crucial.

“I’ve learned in the last few months that the real secret to our success is that we have urgency,” said Dr. Kirk Smith, supervisor of the food-borne diseases unit for the Minnesota Department of Health.

Dr. Acheson of the F.D.A. said federal authorities had been meeting with state health officials to seek ways to improve the surveillance system, including standardizing menu questionnaires and improving response times. But he said more federal financing was crucial.

Dr. Robert Tauxe, deputy director of the Centers for Disease Control and Prevention’s division of food-borne diseases, said the agency planned immediate investments “to increase the capacity of several health departments.”

Ruth Ann Merrick of Somerset, Ky., said she was still bitter about how her case was handled. She went with friends to a local Chinese restaurant on June 26, 2004. Within 45 minutes, she was vomiting so violently that she passed out and her heart stopped. After her husband performed C.P.R., she was taken to Lake Cumberland Regional Hospital, where she remained in intensive care for four days.

Although four of the eight people in her party were sickened, the state never investigated, she said.

“I thought I was going to die,” Ms. Merrick said.
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Food safety is one of those situations where the Federal government needs to set standards that represent the floor of protection, so that everyone, regardless of where they live, gets a certain level of investigation, transparency and protection. But then the states should be able to provide an even higher standard if they wish. Think that is too much of a problem for the multi-state food distributor? Not if the distributor fulfills the highest standard instead of the lowest. — K.R.

Posted in America, Economics, Food | Tagged: , , | 3 Comments »

Feigned Indignation: Of marauding exploiters, their “ethical qualms,” and a new proposal

Posted by kelliasworld on April 13, 2009

By Jason Miller

3/15/09

Since there was little appetite for my recent polemic in which I advocated including necro-cannibalism as an integral part of our strategy to combat ecocide and world hunger, because very few appeared to take note of the fact that it was not my intention to carefully craft an update of Swift’s “A Modest Proposal” (I was actually hurling a hunk of concrete into the placid waters of the indoctrinated readers’ minds in order to observe the resultant splash and subsequent ripples), and since despite the depth of Homo rapien moral depravity and their sheer indifference to the suffering, murder, mayhem, and destruction that the human collective causes in order to satiate our desires and perpetuate the disease we call civilization, reader response indicated that the thought of eating our “fellow man” was taking things a bit too far, I’m advancing yet another potential solution to the myriad and complex maladies we’ve inflicted upon nonhuman animals, the Earth and ourselves.

Homo rapiens, who, judging by the state of the world, outnumber Homo sapiens by a wide margin, are a self-centered, mean-spirited bunch. Maybe their swarming hordes can get behind an idea that saves their asses, eases what little conscience they have, requires little or no risk or effort on their part, and doesn’t involve the possibility of their cherished grandmas winding up as hotdogs rather than worm fodder or cinders.

As an aside, had I written my apologia for necro-cannibalism as a serious assertion, what pray tell would have been so ghastly, macabre, reprehensible, or unthinkable about it? It’s not like we would be committing homicide. The people we would be eating would have died prior to being slated to appear on the menu at McDonald’s. Some amongst us directly perpetrate (and many of the rest of the rest of us openly or tacitly support) the murder of billions of sentient beings (including “universally sacred” human animals) each year in factory “farms,” laboratories, and in faraway lands inhabited by the uninitiated whom we must bomb into the stone age that they might become enlightened enough to embrace the American Way of Life.

What an arbitrary, skewed, hypocritical and bizarre set of ethics and priorities we have. The Earth is teeming with 6.5 billion people who are stripping it bare like a plague of locusts, food shortages are reaching crisis levels, and the Homo rapiens are going to balk at the source of the flesh they so love to devour? Though they may represent the next stage in hominid evolution (on the other hand, one could advance a strong argument that they represent a de-evolution), they need to get over themselves. Or they won’t have any selves left to get over.

Sorry, I couldn’t resist tossing another chunk of cement and muddying those placid waters once more. As a critical thinker who has stopped drowning out my inner voice with Western civilization’s ubiquitous and numerous forms of anesthetizing, conscience-killing soma, I have my eyes wide open to the constant barrage of inanities, perversities, hypocrisies, deceptions, distortions, and insanities with which our barbaric “civilized” culture perpetually pelts us. As my beloved Sylvia often says about the Homo rapiens she encounters each day, “If they come at me crazy, I’m getting crazy right back.” So let’s talk cannibalism a bit more.

Moral and ethical objections to necro-cannibalism are hollow and pathetically feeble when voiced by the savage mob of our collective “advanced, industrialized civilization” that preys economically upon “developing nations;” subjugates hundreds of millions of people through the use of puppet plutocracies, neo-liberal economic policies, military bases installed for “protection,” or outright imperial invasion; gluttonously gobbles up far more than its share of the world’s “natural resources”—eating them and shitting them out or running them through atmosphere-toxifying factories that create more “things” that will quickly become a part of the breathtakingly enormous mountain of garbage through which we will eventually be wading; drops smart bombs (now there’s an oxymoron for you) that only kill the “bad guys”–plus a few hundred “victims of collateral damage;” tortures and murders millions of nonhuman animals every day to yield a plethora of unnecessary products; ends millions of lives before they get started through abortions; locks up nonviolent substance abusers because of their skin color and economic class whilst letting mass murderers like Bush and Cheney run free; leaves billions to live in miserable squalor to enable the American Dream for a relative few; and more. Yet in the midst of an ecocrisis in which industrial agriculture plays a large role, we’re going to keep downing “pork,” “beef,” and “poultry” by the shovel full and get squeamish about stabbing our fork into a morsel of nourishing human flesh that would otherwise go to waste? How about a steaming plate of self-centeredness and an ice cold glass of hypocrisy to wash that down?

My apologies; again I digress. Forget cannibalism. As my “friends” who grease the gears of capitalism would say, “There’s no market for it!” Unlike our imperialistic, war-mongering government (which is merely a reflection of our Homo rapien society), those who are fighting for the Earth obviously don’t have the luxury of keeping “all options on the table.”

I’ll skip moralizing about the abject cruelty of exploiting nonhuman animals to consume their flesh because I recognize that Homo rapiens are too selfish to give up their beloved “meat,” despite the fact that many give lip service to ending the horrors of factory “farming” in favor of “happy meat.” So as my dear “compatriots,” the capitalists, love to say, “I’ll give you the bottom line here.” The bottom line is that the extant system of factory “farming” is an environmental disaster and a tremendous waste of resources.

You can Google the statistics if you prefer more specificity, but for those flesh addicts who are comfortable with the savagery of nonhuman animal consumption, there are two compelling pragmatic reasons to find an alternative “meat” source: pollution and “resource” depletion.

The billions of nonhuman animals destined to wind up on plates or between slices of bread produce seas of urine and excrement. For now Tyson, Smithfield Farms and their ilk pump this waste into storage lagoons, which are filled with this putrid slurry of piss and shit mixed with a host of other waste products, including antibiotics, pesticides, the rotting corpses of nonhuman animals crushed or trampled to death, afterbirth, and stillborns.

What the hell are we going to do with all of that infectious, repugnant sludge as time progresses? Perhaps we could simply do what the billions of sentient beings we’ve oppressed and exploited to sustain our American Way of Life (the soul-sucking, murderous machine we call Western civilization) would love to see us do and “eat shit and die.” No, that’s too drastic. We, as a collective, have done some pretty rotten things and our system’s got to go, but there’s plenty of room for personal redemption on a case by case basis—for most of us any way. So, the question remains, what are we going to do with vast seas of poisonous sewage that threaten to contaminate groundwater, streams, ponds, rivers, and lakes?

Pollution aside, we have another problem that is perhaps even bigger. It takes 16 pounds of grain and 2500 gallons of water to make one pound of “beef.” The global demand for “meat” is skyrocketing as populous nations like China and India aspire to the “heights” of American capitalism and clamor for body parts on their menus. One third of the global population is starving, mostly in “developing” nations, so that the “deserving” citizens of wealthier nations can gorge themselves on flesh. I realize that I’ve wasted a sentence on another of those idiotic moral concerns which Homo rapiens have rationalized away or are just too fucking mean to care about, so let me instead point out that world-wide demand for “meat” is projected to double by 2050 and that our industrial agricultural system is already incapable of providing food for a rapidly growing population of 6.5 billion humans. Therefore, there’s a strong chance that you and your children, dear reader, could be affected—very adversely I might add. (That’s how you get the attention of a Homo rapien—you inform them of something that’s going to directly impact THEM and “theirs.”)

Our current form of “meat” production is rife with irresolvable problems, vegans/vegetarians are still about as rare as recent stock market success stories, and the number of people demanding to feast upon rotting flesh is rising meteorically. A head-scratching, hair pulling dilemma if ever I encountered one.

Eliminating “meat” from our collective diet is a non-starter. Necro-cannibalism went over like reruns of the Lawrence Welk show on MTV. Lowering demand by voluntarily decreasing consumption would be impossible given our “all about me,” “individual freedom with no responsibility to the group” ethos. Appeals to conscience, you say? No, I tried that and most people just laughed and stuffed their mouths with another hunk of rotting animal flesh.

Therefore, we can once again look to the holy trinity of science, technology, and capitalism for our salvation. Interspecies chimeras, laboratory-created genetic crosses between two unique animal species, can rain “meat” down upon us like manna from heaven. Since 2003, researchers have successfully formed chimeric embryos by fusing human animals with three different nonhuman animals: rabbits, sheep, and cows.

We’ve struck gold. Now all we need to do is to start mining. With our scientific knowledge, technological infrastructure, and immense wealth, we could create and distribute chimeras for mass consumption within a couple of years. After all, “product” design and commodification are our specialties in this capitalist society. Replacing “farm animals” with chimeras as our source of “meat” would not be that difficult.

Big Meat could finish butchering the remaining stock of domestic nonhuman animals and make preparations to start slaughtering chimeras and distributing their flesh and body parts for consumption. Marketing this new product could be a problem initially, but the Bernays protégés on Madison Avenue could sell ‘morning after’ pills to members of the Army of God, so no worries there.

Rabbit, lamb, and cow are tastes with which many “meat” eaters are already familiar. Geneticists could most certainly bring pigs into the fold as well. Perhaps they could even engineer an egg-laying chimeric chicken.

Imagine the myriad advantages of fusing human DNA into our chimeras. Once we got the Medical Industrial Complex coordinating with Big Meat and Big Food, we could develop massive breeding and housing facilities for these artificial beings and start cranking them out like autos rolling off an assembly line.

Once weaned from their mothers, the exceptional female stock could be retained, nurtured and reared to serve as birthing machines. Genetically limiting their intellect so that they could perform simple tasks and engage in manual labor (without the capacity to think critically), would enable us to employ a skeleton crew of people to oversee immense chimeric laboratory farms, as these production facilities could be staffed primarily by chimeras.

Chimeras would be the perfect “meat” source. With their opposable thumbs and limited ability to cogitate, the sanitation problems related to factory “farming” would be largely eliminated as the chimeras could use toilets and clean up after themselves. Chimeras would virtually eliminate a corporation’s biggest expense: employees. They could tend to themselves and the facilities that manufacture them with limited human oversight. Once they were transported to the slaughter-houses currently processing cows, pigs and the like, they could be processed in a similar fashion. With IQ’s hovering around 80, passivity would be a virtual given as they queued up to have their skulls bashed in with sledgehammers, and for the unlucky ones who survived the bludgeoning, to be gutted alive with razor sharp knives.

Aside from the breeding stock, laboratory farm staff, and those we ground into chimera burgers, we could exploit the remaining “things with a pulse” in any way we saw fit. Corporations operating laboratory farms could garner immense income streams from both “meat” production and from the sale of chimeras as slaves. Since these Petri-dish concocted beings couldn’t possibly have a soul and would be synthetic creatures, our chimeras would not be endowed with human rights nor protected by animal welfare laws. Homo rapien capitalists would be living larger than a pedophile on a deserted isle full of 12 year old virgins! No extant ethics, morals, laws, or social taboos would impede commerce, progress, profit, advantage, pleasure, or fulfillment derived from said beings.

Chimeras would eliminate the need for nonhuman animal vivisection. With human DNA woven into their genetic structure, their value and reliability as test subjects would be far superior to that of nonhuman animals. We could even conduct the tests in the same laboratories that produce them.

Imagine owning a chimera. It would be like having a cow that could mow your lawn, do your laundry, wash your dishes, and even, if you could get past their odd physical appearance, satisfy you sexually. When you came home from a rough day at the office, instead of kicking the cat or yelling at the kids, you could beat the chimera. And when your stock of “meat” in the freezer started running low, you could simply run your chimera down to the nearest butcher, have it stunned, bled, gutted, cleaved, hacked, and sliced, and scurry home with a car-load of neat little packages of mouth-watering rotting flesh.

Obviously, chimeras would be a “must have.” Clean, “green,” essentially self-perpetuating, and highly coveted by all, chimeras would be capitalism’s crowning achievement. Our environmental nightmare would be mitigated, world hunger would disappear, and everyone could own at least one chimera to afford them more leisure time and ensure they’d be able to gorge themselves on “meat.”

Now don’t tell me that faux ethical concerns are going to hold us back on this one. Remember, we’re the group that’s collectively gang raping Mother Earth and sodomizing her to death. Don’t proclaim to me, dear Homo rapiens, that you don’t want to have your “meat” and eat it too; to strengthen the illusion of “safe food, medicine, and consumer products” provided by vivisection; and to possess your very own personal slave. And don’t try to convince me that a society of marauding exploiters has “ethical qualms” about artificially creating beings that would satisfy these “needs” while at the same time helping to slow or end the impending ecological collapse we’re causing.

Don’t talk crazy to me, and as Sylvia would also say, “Don’t front!”

Jason Miller is a relentless anti-capitalist, vegan straight edge, and animal liberationist. He is also the senior editor and founder of Thomas Paine’s Corner and the blog director for The Transformative Studies Institute.

Thomas Paine’s Corner wants to periodically email you links to the most recent material and timeless classics available on our diverse and comprehensive site. If you would like to receive them, type “TPC subscription” in the subject line and send your email to willpowerful@hotmail.com

To further your sociopolitical education, strengthen your connection with the radical community, and deepen your participation in forming an egalitarian, just, ecological, non-speciesist and democratic society, visit the Transformative Studies Institute at http://transformativestudies.org/ and the Institute for Critical Animal Studies at http://www.criticalanimalstudies.org/.
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I’m a dedicated carnivore. In fact, I have some chicken legs boiling in a pot as I write this. I have been diagnosed as diabetic and have found out from several sources that a protein breakfast helps keep the blood sugar under control all day. (I do not take insulin). Besides, I like chicken.

Nevertheless, I deplore the way our farm animals are treated. I buy free-range chicken, cage-free eggs, yogurt made from milk from cows that haven’t been shot up with growth hormones, etc. Fortunately, I have easy access to such products, albeit at a premium. My food budget has sky-rocketed since I made the switch. Sorry to say my income has not increased proportionally.

That the poor have to suffer with garbage as food while our food animals are mistreated are both results of the capitalist factory farm system that cares only about profits and not product quality for the humans and humane treatment for the animals. We see this all in non-meat food production, To wit: the recent salmonella outbreaks in peanuts and pistachios. –K.R.

Posted in Animal Welfare, Economics, Environment, Food | Tagged: , , , | 3 Comments »

President Obama: Hypocrite and Hater on Single Payer Health Care

Posted by kelliasworld on March 26, 2009

Original Article

by BAR managing editor Bruce A. Dixon
“…the Obama Administration’s emerging health care plan is expected to be based upon a model that has failed multiple times, most recently in Massachusetts”

Obama likes to say that the insurance industry employs tens or hundreds of thousands, and we cannot just displace them. That’s hating. But his advisers know perfectly well that single payer health care insurance would create 2.6 million new jobs, after allowing for the 440,000 insurance company jobs it would do away with a fact detailed in the groundbreaking report issued earlier this year by the National Nurses Organizing Committee. Instead, in the spirit of a dishonest hater, Obama has tried to ban from public forums any discussion of the single payer health care option, despite the fact that it has massive support among the people who voted for him. That is hypocrisy.

When the Obama campaign asked for house meetings across the nation on health care, the option suggested most often was indeed single payer. So you didn’t hear much of anything about the outcomes of those meetings. If that’s not dishonest hating on single payer health care it’s hard to imagine what is.

Instead, the Obama Administration’s emerging health care plan is expected to be based upon a model that has failed multiple times, most recently in Massachusetts, which includes “individual mandates” requiring people above a certain income level to purchase private insurance or face a fine, and provides some kind of care at subsidized rates to those with the lowest incomes. A recent study by physicians at Harvard Medical School meticulously exposes the predictable failure of the Massachusetts Plan live up to any of its promises, and explains succinctly why no “individual mandate” which subsidizes private insurance companies should be a model for any national health care plan.

It’s called “Massachusetts’ Plan” A Failed Model for Health Care Reform”, and you can find it online here. In it, Drs. Rachel Narden, David Himmelstein and Steffie Woolhandler, all of Harvard Medical School deliver a withering assessment of the plan’s failure, and explain why it must not be a model for any national health care plan worthy of the name.

These are the key features of the Massachusetts Plan upon which Obama’s health care plan is modeled.

1. Subsidized private insurance is made available for the poorest at reduced or no cost through a state agency.
2. Unsubsidized private insurance at controlled costs was to be made available for those who made a little more.
3. As with automobile insurance, those not qualifying for subsidized insurance would be fined ($912 a year in 2008, $1,068 in 2009, collected with your state income tax) for failing to purchase insurance.
4. Employers were required to pay $295 a year for each employee they didn’t give health insurance to.
5. To control costs, funds to pay for the program were taken from the existing pool that previously financed “safety net” care for the poor and uninsured, leaving many with fewer options and less care than was available before the “reform.”

But the subsidized health insurance policies available to the poor in Massachusetts often covered fewer services than they were already receiving under previously existing conditions, and the greater the “income” of these poor people, the lower the subsidy and higher the deductibles. Under the Massachusetts Plan, the subsidies vanish altogether when one makes 300% of the ridiculously low Federal Poverty Level — about $31,000 per year.

Despite the fines for persons who fail to buy health insurance under the so-called “individual mandate” plans, many remain uninsured because coverage is simply not affordable.
“…the reform law specifically exempts uninsured families from fines if no affordable private plan is available. About 79,000 Massachusetts uninsured residents received this exemption in 2007, which excused them from fines, but left them uninsured.

“The private insurance plans available through the Commonwealth Choice program can be extremely expensive. According to the Connector website (accessed December 29, 2008 at http://www.mahealthconnector.org) the cheapest plan available to a middle-income 56-year-old now costs $4,872 annually in premiums alone. However, if the policy holder becomes sick, (s)he must pay an additional $2,000 deductible before insurance kicks in. Thereafter the policy holder pays 20% co-insurance (i.e. 20% of all medical bills) up to a maximum of $3,000 annually ($9,872 in total annual costs including premium, deductible and co-insurance). A need for uncovered services (e.g. physical therapy visits beyond the number covered) would drive out-of pocket costs even higher. It is not surprising that many of the state’s uninsured have declined such coverage.”

How can someone making $31,000 a year pay $90 a week in premiums alone, plus $20% of all medical bills up to $3,000 if they get sick? Is calling this “reform” even the least bit honest? Or is it hypocrisy?
The study makes the point again and again that access to health insurance is not the same as access to health care. A full third of every health care dollar is already diverted to private insurance companies. The Massachusetts Plan, and the emerging Obama Plan seem intended to preserve this cut for private insurers, even at the expense of needed care. “…(T)he new inssurance policies that replced the (previous) free care system require co-payments for office visits and prescriptions, which are difficult for many low income patients to pay…” says the study, hence patients suffering from HIV-AIDS and other chronic conditions have had to reduce doctor visits or skip their meds due to the high co-payments that the “reform” required.

The report outlines how the advocates of these private insurance industry endorsed versions of health care reform have lied in state after state where this has been tried — in Oregon, Maine, Vermont, Tennessee and elsewhere. We encourage our readers to download and read it, at only 18 pages, as an antidote to whatever form of “individual mandate” health plan is finally proposed by the Obama Administration.

Plans of this type have not lowered overall health care costs, either. They provide no incentive to tone down the over-reliance on expensive techniques and specialists, and produce more primary care physicians, the doctors who provide day to day, person to person coverage. Obama’s offer to “let’s computerize medical records” as a cost-saving procedure sounds nice, but falls flat. Most of the unnecessary paperwork is between care givers, hospitals and insurers with a vested interest in saying no to this or that treatment, test, or medicine.

During the presidential campaign, Barack Obama declared we should judge his first term by whether, under his leadership, the nation finally enacted national health care system that takes care of everybody and lowers the cost of health care. Now we are in the middle of a completely foreseeable economic crisis caused in part by many of the people who are advising the president. Single payer health care has come to the fore as a viable means to create 2.6 million new jobs, a proposal that Obama’s advisors neither address nor discuss.

Sixty days into his presidency, the clock is ticking. Lofty rhetoric and lawyerly evasions are giving way to actual policies, many of them deeply disappointing to the people who campaigned and voted for this president. It looks like national health care for everybody is a dream, that if left up to this president and his advisers, will be deferred again. The question is, should we leave it up to them at all?

Bruce Dixon is managing editor at Black Agenda Report. He is based in Atlanta GA and can be reached at bruce.dixon(at)blackagendareport.com.
________
We can’t displace all the people who work in the health insurance industry? Sure we can. If businesses weren’t burdened with health insurance costs, maybe they could afford to hire the displaced workers. If not, let those workers RETRAIN, like so many other workers in other industries have been told to do. What is so sacred about the jobs in the health insurance industry? Nothing. Because it’s not the secretaries, data entry clerks and other day-to-day workers Obama really cares about. It’s the fat cat executives with hefty salaries whom he is trying to protect.

As for the argument that people have to buy auto insurance so they should also have to buy health insurance, I say that there are alternatives to driving. If you cannot afford auto insurance, you can take the bus, or train, or bike, or walk, or get a ride from another driver. The alternative to unaffordable health insurance is uninsurance, possibly a fine if you live in Massachusetts, and no care, or lack of timely care, if you are trying to not incur the bills. If an emergency occurs and you are forced to incur the bills, you then face a year or more of financial stress, harassment, collections and ruined credit. — K.R.

Posted in America, Economics, Health Insurance, Obama | Tagged: , , | 1 Comment »

Tomgram: Robert Eshelman, The Other War on Workers

Posted by kelliasworld on March 20, 2009

Original Article on Tom Dispatch

posted 2009-03-19 11:07:12

A.I.G. is, of course, back in the news — and how! Not that it was ever too far off the radar screen. Having received yet one more massive infusion of federal tax dollars, as everyone from here to hell now knows, the insurance giant handed out yet another round of lucrative bonuses. Over the last year, company management has doled out about $1 billion in such payments, roughly half to employees in the financial products subsidiary that concocted the type of high-risk, highly-leveraged deals in derivatives which helped send the company, and Wall Street, and most of the rest of us into steep decline last year.

Bonuses went to 418 employees, 73 “retention bonuses” of $1 million or more each to members of that subsidiary (including 11 who have left the firm) to help “unravel” the deals they created. How’s that for an A.I.G. mea culpa to the taxpayers and the newly unemployed who officially “own” 80% of the company (which might well be 80% of next to nothing)?

Meanwhile, there’s been a drumbeat of headlines about mass layoffs of public employees. In California, more than 26,000 public school teachers were given notice last Friday that they might not have jobs next year. An additional 15,000 school bus drivers, janitors, and administrators might be in the same boat. Unions turned members out across the state for “Pink Slip Friday” protests.

In Michigan, Pontiac’s school board voted to lay off every one of the district’s more than 600 employees. In both cases, officials claim that not all those who received notices will, in fact, be laid off, yet such notifications speak to the enormity of the problem that local and state governments face. Nobody, of course, asks schoolteachers and bus drivers to stay on (with lucrative bonuses) to unravel the crises they created. Oh, maybe that’s because, unlike A.I.G.’s traders, they didn’t do anything wrong.

The insurance giant isn’t the only company feeling its oats in bad times, however. As journalist Robert Eshelman suggests below, while mass layoffs are grabbing headlines — and for good reason — businesses may have opened up a new front in the war on labor, hiding behind horrific economic news the way an advancing army might use a smoke screen.

How big is the problem? Well, we just don’t know. As newspapers continue to disappear or scale back — the Washington Post recently did in its stand-alone business section — the reporters that remain on the economic beat may not be paying enough attention to a war against workers that lurks just below the surface of the headlines. Tom

The Secret War Against American Workers
The Unemployment Story No One Notices
By Robert S. Eshelman

Juanita Borden, 39 and jobless, patiently waits as her r�sum� methodically works its way, line by line, through a fax machine at a state-run job center in downtown Philadelphia. Lying open before her on a round conference table is a neatly organized folder. “This is my r�sum� and everywhere I’ve been faxing to. This is how I keep track of what day I’ve sent them on, so I can call and check back,” she says, leafing through pages of fax cover sheets. “I usually give five business days before I inquire whether or not they’ve received it and whether or not they’re interested.”

Juanita was fired last October, when her employer found out that her driver’s license — a job requirement — had expired. “It was only a matter of twenty-six dollars. I was under the impression that it expired in November of ’08, but it was actually November of ’07, and because I hadn’t been driving I wasn’t aware of it.” The one occasion on which she was required to drive, though, she couldn’t, and that was all her employer needed to fire her for failing to fulfill her employment responsibilities. She has since renewed her license and says with an air of futility, “I’d like to have my job back if they would give it to me.”

She hasn’t been asked back and, despite her persistent efforts, she hasn’t received a single call from a prospective employer either. “The good thing,” she says, remaining remarkably buoyant despite her misfortune, “is that usually when I interview I get the job. So… I’m hoping for an interview soon.” Until then, her carefully managed folder serves as a small measure of control over an otherwise steady drift into poverty and homelessness.

Juanita isn’t the only one at this job center on the precipice of acute need. And she isn’t alone in relating a story about being fired for what would seem to many a frivolous reason. Chris Topher, 25 and making his first visit here, was axed in March of last year. The telecommunications company he had been working for sent him packing when, as he tells it, he installed cable equipment a customer hadn’t ordered. It didn’t matter that the mistake was on the work order Chris was given. “It was the best job I had since I graduated high school and I’ve had a few: Turnpike Commission, working in a Senator’s office. I’ve had some nice jobs, but that one, I enjoyed it the most.”

And there was good reason to enjoy it. Chris pulled down $1,200-1,300 every two weeks in addition to receiving a full benefits package. He thought of contesting his termination, but at the time it looked like a long, uphill battle that he wasn’t eager to take on. It’s a fight that, in hindsight, he thinks he could have won and that his employer probably knew he would win as well. “And that’s why I believe I was approved by my employer for unemployment,” he says.

Under unemployment eligibility requirements, an employer must certify whether an employee committed a “fault” on the job and was therefore terminated. If an employer indicates that no fault was committed and the employee meets several other requirements, including being physically able to work, states grant an unemployment claim. In other words, Chris’s former employer granted him a small concession, while otherwise turning his life upside down amid the worst job market since 1983.

“Unemployment is the pits pretty much,” says Chris, whose unemployment compensation is significantly less than half what he made as a cable installer. Still, he’s better off than Juanita, who has applied for unemployment twice and been denied both times. She is now appealing, but her employer is conceding nothing. In a recent arbitration hearing, Juanita says, her former supervisor claimed that, if she had only told them about her expired license, they would have allowed her renewal time. If only.

Now, Juanita lives with her brother and his wife, but they, too, have financial problems. “My brother is working part time and it’s driving him crazy, because it’s causing money problems between him and his wife,” she explains. “And with me being there,” she hesitates, “…it’s a little constrained.”

Ratcheting Up the Fear

The mainstream media has generally sketched a picture of a labor market in which, under the pressure of an economic meltdown, workers succumb to two types of downsizing. In one, a fierce recession forces businesses, desperate to cut costs in terrible times, to lay off workers. They, in turn, face grim prospects for gainful employment elsewhere. In a kinder, gentler version of the same, employers, desperate to cut costs in terrible times, offer — or sometimes force workers to take — “furloughs,” salary cuts, union give-backs, four-day work weeks, or un-paid holidays rather than axing large numbers of them.

In this case, tough as it may be, workers benefit, retaining at least some of their income, while businesses wait out the recession. In both cases, businesses are largely depicted as unenthusiastic dispensers of pink-slips. Managers and bosses are just facing up to an unpalatable reality and unavoidable pressures imposed on them by the worst economic moment in recent memory.

A visit to a job center is hardly a scientific survey. The experiences of Juanita and Chris, along with those of other unemployed people I spent time with while in Philadelphia, may be purely anecdotal evidence. But they do raise questions about a subject of no small importance, and it’s not one you’re likely to read about in your daily paper — not yet anyway. If a deepening recession weighs down and threatens businesses, some of those businesses are undoubtedly also making convenient use of the times to do things they might have wanted to do, but were unable to do in better conditions.

In some cases, under the guise of “recession” pressure, they may be waging a secret war against their own workers, using even the most innocuous transgressions of work-place rules as the trigger for firings — and so, of course, putting the fear of god into those who remain. In this way, company payrolls are not only being reduced by mass layoffs, but workers are being squeezed for ever greater productivity in return for lower wages, worse hours, and less benefits. The weapon of choice is the specter of unemployment, a kind of death by a thousand (or a million) cuts.

Companies stand to gain a lot these days from such small-scale but decisive actions. After all, they reap a double benefit. Not only do they pare down the size of their payroll, often without needing — as in Juanita’s case — to consent to unemployment compensation, but they also contribute to a climate of intensifying fear. Workers who remain on the job are now not only on edge about lay-offs or scaled-back hours, but also know that a late return from a bathroom or lunch break might mean being shown the door, becoming another member of the legions of unemployed — now at 12.5 million and rising fast.

This dynamic is, of course, hardly new. Countless critics of working conditions have written about it since the dawn of the industrial age. But at the moment, even as the latest unemployment figures make screaming headlines, this is a subject that seldom comes up. Consider, though, that in December, Wal-Mart, the world’s largest retailer, settled 63 outstanding class-action lawsuits that alleged massive wage and hours violations. Fearing termination, Wal-Mart workers, according to their testimony in the lawsuits, labored through lunch breaks and past their scheduled hours for just above minimum wage pay, with little hope of getting enough hours to qualify for the company’s health benefits.

As a condition of the settlement, Wal-Mart will pay out as much as $640 million to those workers. If corporations were able to exert such coercive power when the unemployment rate was around 5%, what can they do in a job market in which 14.8% of the population can’t find adequate work?

In fact, the world’s largest retailer is one of the few American corporations doing well in dark times. While retail sales slid almost everywhere, the company’s same-store sales went up 5.1% in February (when compared with February 2008 sales). Yet, in that same month, it announced a move to “realign its corporate structure and reduce costs.” It cut 700 to 800 jobs at its Wal-Mart and Sam’s Club home offices, in effect acting no differently than any of the companies being battered by the deepening recession.

Free-Firing Zone

Rodney Green, a soft-spoken 52-year-old, comes to the job center three times a week to search on-line job listings. He describes his decades-long drift from full-time employee with benefits to marginalized temp-worker with no benefits and, finally, to the category of unemployed for an extended period.

From the late 1970s until the early 1990s, he worked for Bell Telecommunications, where he earned a good salary and full benefits. Since Bell laid him off, he’s worked periodically as a forklift operator for various companies, getting temporary placements through an employment agency. Most recently, he earned $12 an hour working for a deli meat and artisanal cheese producer. No benefits were provided. A year’s work, he explained, would mean a week’s vacation, “but they don’t keep you that long. They lay you off or rotate you into another job before then.”

Today, as he’s discovered, even such temp jobs are becoming scarce. “In the eighties, it wasn’t as bad as it is now,” he comments from the unemployment heartland of what, in 2009, is a deeply de-industrialized Philadelphia. “The city had jobs, but then the jobs moved to the suburbs. Now they’re moving overseas. Back then, say, you applied for a job, maybe fifty others applied, too. Today, that same job, you’re going to have hundreds — I mean, a thousand for that one job. It’s hard. It’s depressing.”

For the past year and a half, Rodney has been collecting unemployment periodically, and in that time, he hasn’t landed a single interview. Recently, because the Bush administration finally acquiesced to grassroots and Congressional pressure to lengthen unemployment benefits, he received a thirteen-week extension, providing him a little cushion (unlike equally interview-less Juanita). “That helped me a lot. Times are hard right now. I hear there are over four million people collecting unemployment. That’s kind of high.”

If Juanita and Chris are casualties of the intensified war of attrition businesses are quietly waging on workers, Rodney represents a deeper unraveling of jobs and job security, thanks to a globalized economy in which the hard-pressed workers in this country are pitted against cheaper labor pools in Latin America, South Asia, China, and even the American South. In such a job environment, what is one to do?

Someone I interviewed prior to my job center visit described her reaction when she heard that her company had recently closed a plant in the Midwest: “The first thing I thought, and I felt bad for thinking it,” she recalled, somewhat sheepishly, “was that means more work for us — at least for the time being.”

Her comment speaks volumes, as does her request not to be identified. Who needs union busters, patrolling shop-stewards, or legions of high-paid lawyers fighting wage and hours claims when a worker is so anxious about job security that she responds positively to the laying off of those she imagines as potential competitors? When employees police their own behavior for fear of the axe — monitoring their time checking email or using the bathroom — bad times distinctly have an upside for management.

In this job environment, it’s easy to turn not just on others, but on yourself. Reflecting on what she will do without a job and unemployment benefits, Juanita wonders if the problem isn’t the economy, but the choices she made in life. “I left home when I was sixteen and lived in my own places, had my children, and got married,” she says nervously, continually folding and refolding a local newspaper. “I should have gone to school and did a lot more things to make myself more marketable earlier in life. Now I’m left having to start over again.”

A look at corporate opposition to the Employee Free Choice Act (EFCA), whose passage in Congress is a central demand of organized labor, offers a glimpse of how persistently companies seek to disadvantage their workers. EFCA would allow workers to form a union when a majority of them sign union cards in a given workplace. “Card check,” as it is frequently called, enables them to organize unions without the need for an election. In a November column surveying the business elite’s response to the Act, Wall Street Journal op-ed columnist Thomas Frank wrote: “Card check is about power. Management has it, workers don’t, and business doesn’t want that to change.”

In Frank’s estimation, the current struggle over EFCA is the latest incarnation of a constantly evolving struggle between workers and employers. For the under- or unemployed crowding into this center in Philadelphia, the current recession isn’t a time-out from the normal struggle, it’s more like a new open season for corporate attacks on them.

Right now, for Juanita, Chris, and others at this center, there are actually two wars going on, and only one of them seems to have caught the attention of labor and business reporters. The headlines about the first read: Desperate Companies Forced to Cut Jobs. But many here seem to be experiencing a second war in which businesses are using bad times to act in ways they couldn’t in the best of times.

Shouldn’t reporters be heading out in search of this one-sided, covert struggle? Isn’t it time for the second business war of our moment to make a few headlines of its own?

Robert S. Eshelman is an independent journalist and audio host at TomDispatch.com. His articles have appeared in the Nation, In These Times, and Abu Dhabi’s the National. He can be emailed at robertseshelman@gmail.com.

Copyright 2009 Robert S. Eshelman

Posted in America, Economics | Tagged: | 1 Comment »

Challenging the Right on National Health Care

Posted by kelliasworld on March 15, 2009

Original Content at OpEdNews
March 15, 2009

By Mary Shaw

Whenever I advocate for universal single-payer health care for all Americans, the right-wingers flood my inbox with all the predictable myths.

First, they tell me that health care is not a right. They say it’s each citizen’s responsibility to provide it for his or her family. I guess this myth gives them another excuse to look down on the poor who cannot afford the luxury of medical insurance. It makes them feel superior.

In response to that, I point out that health care is indeed a basic human right, enshrined in the Universal Declaration of Human Rights (UDHR), to which the United States is a signatory.

Article 25(1) of the UDHR states:

“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”

But human rights standards don’t tend to sway these folks.

Then they cry “socialism”, as if that’s a bad thing. Certainly the word has taken on some bad connotations through the years, but that’s only because the radical right too often (and very vocally) equates socialism with Communism or Marxism, which are extreme flavors of socialism. They fail to see that national single-payer health care managed by the government would not be much different from our current system of socialized libraries, socialized fire departments, and socialized police departments. These services are paid for with our tax dollars, and they’re readily available to us when we need them. It’s all for the greater good.

Then sometimes they wave the flag and tell me that we must not change our health care system because, in their opinion, the U.S. offers the very best health care available. Why mess with a good thing?

Here, too, they need a bit of education. In fact, the United States ranks 37th in the World Health Organization’s rankings of the world’s health systems (below Malta, Iceland, Saudi Arabia, and numerous other countries that might surprise you).

Furthermore, a recent report from the Business Roundtable suggests that “the costs and performance of the U.S. health care system have put America’s companies and workers at a significant competitive disadvantage in the global marketplace.” In a nutshell, Americans spend a lot more on health care than other countries, but we aren’t as healthy. That seems to confirm the World Health Organization’s assessment of our less-than-stellar level of care, with the added issue of how we’re paying so much more to get so much less. Corporate profits over the health of the people. God bless America.

And, on a final note, most of these right-wing types describe themselves as “Christian”. Well, wasn’t Jesus Christ all about healing the sick? And, as the bible describes his ministry, I don’t think Jesus ever charged a penny for his healing services. (Imagine the bill he might have sent to Lazarus!)

I have yet to see a valid, logical response to this last point.

And I don’t expect to.

Author’s Website: http://www.maryshawonline.com

Author’s Bio: Mary Shaw is a Philadelphia-based writer and activist, with a focus on politics, human rights, and social justice. She is a former Philadelphia Area Coordinator for the Nobel-Prize-winning human rights group Amnesty International, and her views appear regularly in a variety of newspapers, magazines, and websites. Note that the ideas expressed here are the author’s own, and do not necessarily reflect the opinions of Amnesty International or any other organization with which she may be associated.

Posted in America, Economics, Health Insurance | Tagged: | 4 Comments »

America’s Fiscal Collapse

Posted by kelliasworld on March 4, 2009

[Canadian Economics Professor Michel Chossudovsky demonstrates that wars + bank bailouts = the end of social programs in the U.S., which is what the elites wanted all along. K.R.]

By Michel Chossudovsky
“We will rebuild, we will recover, and the United States of America will emerge stronger” ( President Barack Obama, State of the Union Address 24 Feb 2009)

“Those of us who manage the public’s dollars will be held to account—to spend wisely, reform bad habits, and do our business in the light of day—because only then can we restore the vital trust between a people and their government.” President Barack Obama, A New Era of Responsibility, the 2010 Budget)

“Strong economic medicine” with a “human face”

March 03, 2009 “Global Research” — – “Promise amid peril.” The stated priorities of the Obama economic package are health, education, renewable energy, investment in infrastructure and transportation. “Quality education” is at the forefront. Obama has also promised to “make health care more affordable and accessible”, for every American.

At first sight, the budget proposal has all the appearances of an expansionary program, a demand oriented “Second New Deal” geared towards creating employment, rebuilding shattered social programs and reviving the real economy.

Obama’s promise is based on a mammoth austerity program. The entire fiscal structure is shattered, turned upside down.

To reach these stated objectives, a significant hike in public spending on social programs (health, education, housing, social security) would be required as well as the implementation of a large scale public investment program. Major shifts in the composition of public expenditure would also be required: i.e. a move out of a war economy, requiring a movement out of military related spending in favour of civilian programs.

In actuality, what we are dealing with is the most drastic curtailment in public spending in American history, leading to social havoc and the potential impoverishment of millions of people.

The Obama promise largely serves the interests of Wall Street, the defence contractors and the oil conglomerates. In turn, the Bush-Obama bank “bailouts” are leading America into a spiralling public debt crisis. The economic and social dislocations are potentially devastating.

Obama’s budget submitted to Congress on February 26, 2009 envisages outlays for the 2010 fiscal year (commencing October 1st 2009) of $3.94 trillion, an increase of 32 percent. Total government revenues for the 2010 fiscal year, according to preliminary estimates by the Bureau of Budget, are of the order of $2.381 trillion.

The predicted budget deficit (according to the president’s speech) is of the order of $1.75 trillion, almost 12 percent of the U.S. Gross Domestic Product.

War and Wall Street

This is a “War Budget”. The austerity measures hit all major federal spending programs with the exception of: 1. Defence and the Middle East War: 2. the Wall Street bank bailout, 3. Interest payments on a staggering public debt.

The budget diverts tax revenues into financing the war. It legitimizes the fraudulent transfers of tax dollars to the financial elites under the “bank bailouts”.

The pattern of deficit spending is not expansionary. We are not dealing with a Keynesian style deficit, which stimulates investment and consumer demand, leading to an expansion of production and employment.

The “bank bailouts” (involving several initiatives financed by tax dollars) constitute a component of government expenditure. Both the Bush and Obama bank bailouts are hand outs to major financial institutions. They do not not constitute a positive spending injection into the real economy. Quite the opposite. The bailouts contribute to financing the restructuring of the banking system leading to a massive concentration of wealth and centralization of banking power.

A large part of the bailout money granted by the Us government will be transferred electronically to various affiliated accounts including the hedge funds. The largest banks in the US will also use this windfall cash to buy out their weaker competitors, thereby consolidating their position. The tendency, therefore, is towards a new wave of corporate buyouts, mergers and acquisitions in the financial services industry.

In turn, the financial elites will use these large amounts of liquid assets (paper wealth), together with the hundreds of billions acquired through speculative trade, will be used to buy out real economy corporations (airlines, the automobile industry, Telecoms, media, etc ), whose quoted value on the stock markets has tumbled.

In essence, a budget deficit ( combined with massive cuts in social programs) is required to fund the handouts to the banks as well as finance defence spending and the military surge in the Middle East war. Obama’s budget envisages:

1. defense spending of $534 billion for 2010, a supplemental 130 billion dollar appropriation for fiscal 2010 for the wars in Afghanistan and Iraq, and a supplemental $75.5 billion emergency war funding for the rest of the 2009 fiscal year. Defence spending and the Middle East war, with various supplemental budgets, is (officially) of the order of 739.5 billion. Some estimates place aggregate defence and military related spending at $ 1 trillion+.

2. A bank bailout of the order of $750 billion announced by Obama, which is added on to the 700 billion dollar bailout money already allocated by the outgoing Bush administration under the Troubled Assets Relief Program (TARP). The total of both programs is a staggering 1.45 trillion dollars to be financed by the Treasury. It should be understood that the actual amount of cash financial “aid” to the banks is significantly larger than $1.45 trillion. (See Table 2 below).

3. Net Interest on the outstanding public debt is estimated by the Bureau of the Budget) at $164 billion in 2010.

The order of magnitude of these allocations is staggering. Under a “balanced budget” criterion –which has been a priority of government economic policy since the Reagan era–, almost all the revenues of the federal government amounting to $2.381 trillion would be used to finance the bank bailout (1.45 trillion), the war ($739 billion) and interest payments on the public debt ($164 billion). In other words, no money would be left over for other categories of public expenditure.

TABLE 1 Budgetary allocations to Defence (FY 2009 and 2010), the Bank Bailout and Net Interests on the Public Debt (FY 2010)

$ Billions
Defence including Supplementary allocations; $534 billion (FY 2010), $130 billion supplemental (FY 2010), $75.5 billion emergency funding (FY2009) 739.5
*Bank bailout (TARP plus Obama) 1450.0
Net Interest 164.0
TOTAL 2353.5
Total Individual (Federal) Income Tax Revenues (FY 2010) 1061.0
Total Federal Government Revenue (FY 2010) 2381.0

Source: Bureau of the Budget and official statements. See A New Era of Responsibility: The 2010 Budget
See also Office of Management and Budget

* The officially announced bank bailouts to be financed from Treasury Funds. The timing of disbursements could take place over more than one fiscal years fiscal years. The actual value of bank bailout cash injections is substantially higher.

The Budget Deficit

These three categories of expenditure (Defence, Bank Bailout and Interest on the Public Debt) would virtually swallow up the entire 2010 federal government revenue of 2381.0. billion dollars

Moreover, as a basis of comparison, all the revenue accruing from individual federal income taxes ($1.061 trillion), (FY 2010) namely all the money households across America pay in the form of federal taxes, will not suffice to finance the handouts to the banks, which officially are of the order of 1.45 trillion. This amount includes the $ 700 billion (granted during FY 2009) under the TARP program plus the proposed $ 750 billion granted by the Obama administration.

While TARP and Obama’s proposed bailout are to be disbursed over Fy 2009 and 2010, they nonetheless represent almost half of total government expenditure ( half of Obama’s $3.94 trillion budget for fiscal 2010), which is financed by regular sources of revenue ($2381 billion) plus a staggering $1.75 trillion budget deficit, which ultimately requires the issuing of Treasury Bills and government bonds.

The feasibility of a large short-term expansion of the public debt at a time of crisis is yet another matter, particularly with interest rates at abysmally low levels.

The budget deficit is of the order of 1.75 trillion. Obama acknowledges a 1.3 trillion-dollar budget deficit, inherited from the Bush administration. In actuality, the budget deficit is much larger .

The official figures tend to underestimate the seriousness of the budgetary predicament. The $1.75 trillion dollar budget deficit figure is questionable because the various amounts disbursed under TARP and other related bank bailouts including Obama’s announced $750 billion aid program to financial institutions are not acknowledged in the government’s expenditure accounts.

“The aid hasn’t been requested formally, but appears in a line item “for potential additional financial stabilization efforts,” according to the budget overview. The budget office calculated a $250 billion net cost to taxpayers this year, because it anticipates it would eventually recoup some, though not all, of the money expended to help financial companies.

The funds would come on top of the $700 billion rescue package approved last October by Congress. The White House budgets no money for fiscal 2010 and beyond for such aid.” (Bloomberg, February 27, 2010)

Fiscal Collapse

A major crisis of the federal fiscal structure is occurring. The multibillion dollar allocations to the War Budget and to the Wall Street Bank Bailout program backlash on all other categories of public expenditure.

The Bush administration’s $ 700 billion bailout under the Troubled Asset Relief Program (TARP) was approved by Congress in October. TARP is but the tip of the iceberg. A panoply of bailout allocations in addition to the $ 700 billion were decided upon prior to Obama assuming office. In November, the federal government’s bank rescue program was estimated at a staggering 8.5 trillion dollars, an amount equivalent to more than 50% of the US public debt estimated at 14 trillion (2007). (See table 2 below)

Meanwhile, under the Obama budget proposal, 634 billion dollars are allocated to a reserve fund to finance universal health care. At first sight, it appears to be a large amount. But it is to be spent over a ten year period, — i.e. a modest annual commitment of 63.4 billion.

Public spending will be slashed with a view to curtailing a spiralling budget deficit. Health and education programs will not only remain heavily underfunded, they will be slashed, revamped and privatized. The likely outcome is the outright privatization of public services and the sale of State assets including public infrastructure, urban services, highways, national parks, etc. Fiscal collapse leads to the privatization of the State.

The fiscal crisis is further exacerbated by the compression of tax revenues resulting from decline of the real economy. Unemployed workers do not pay pay taxes nor do bankrupt firms. The process is cumulative. The solution to the fiscal crisis becomes the cause of further collapse.

Structure of The Public Debt

This large scale appropriation of liquid money assets under the bank bailouts by a handful of financial institutions serves to increase the public debt overnight.

When the US Treasury allocates 700 billion dollars to the Troubled Assets Relief Program, this amount constitutes a budgetary outlay which inevitably must be financed from within the structure of government revenues and expenditures.

Unless all other categories of public expenditure including health, education and social services are slashed, the various outlays under the bank bailout will require running a massive budget deficit which in turn will increase the US public debt.

America is the most indebted country on earth. The US (federal government) public debt is currently of the order of $14 trillion. This does not include mounting public debts at the state and municipal levels.

This US dollar denominated (federal) debt is composed of outstanding treasury bills and government bonds. The public debt, also called “the national debt” is the amount of money owed by the federal government to holders of U.S. debt instruments.

US debt instruments are held by American residents as part of their savings portfolio, companies and financial institutions, US government agencies, foreign governments, individuals in foreign countries. but does not include intergovernmental debt obligations or debt held in the Social Security Trust Fund. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.

The proposed solution becomes the cause of the crisis. The 700 billion bailout under the Troubled Asset Relief Program (TARP) combined with the proposed Obama $750 billion aid to financial services industry is but the tip of the iceberg. A panoply of bailout allocations in addition to the 700 billion have been decided upon.

Table 2

The Bush Administration’s ” Bank Bailout”

The government’s bank rescue program under the Bush administration was estimated at a staggering 8.5 trillion dollars, an amount equivalent to 60% of the Total Gross Federal debt of 14.078 trillion (2010) (See Table 2 above). This amount does not include the “aid” to financial institutions proposed by the Obama administration, including an additional 750 billion dollars in Obama’s February 2009 budget proposal. The size of these allocations of liquid assets endangers the very structures of the fiscal and monetary system.

The total of Bush bank bailouts (8.5 trillion) can be broken down into funds granted by the Federal Reserve, the Treasury, the Federal Deposit Insurance Corporation and the Federal Housing Authority.

The handouts to the financial institutions financed out of Treasury are government expenditures, to be met either through tax revenues or through the emission of public debt instruments.

The disbursements under TARP are categorized by the Bureau of the Budget as part of “a mandatory program” under an Act of the US Congress.. The Treasury’s liability, which includes the controversial Troubled Assets Relief Program, was estimated in November 2008 at 1.1 trillion dollars. (See Table 2) Further Treasury allocations, which serve to heighten the burden of the public debt have been envisaged by the Obama administration

Spiralling Public Debt Crisis

Is the Treasury in a position to finance this mounting budget deficit officially tagged at 1.75 billion through the emission of Treasury bills and government bonds?

The largest budget deficit in US history coupled with the lowest interest rates in US history: With the Fed’s ” near zero” percent discount rate, the markets for US dollar denominated government bonds and Treasury bills are in straightjacket. Moreover, the essential functions of savings (which is central to the functioning of a national economy) is in crisis. .

Who wants to invest in US government debt? What is the demand for Treasury bills at exceedingly low interest rates?

Table 3 Interest Rates in Percent
Treasury securities Updated 2/25/2009
This week Month ago Year ago
One-Year Treasury Constant Maturity 0.64 0.43 2.10
91-day T-bill auction avg disc rate 0.300 0.150 2.160
182-day T-bill auction avg disc rate 0.495 0.350 2.070
Two-Year Treasury Constant Maturity 0.95 0.77 2.04
Five-Year Treasury Constant Maturity 1.79 1.58 2.89
Ten-Year Treasury Constant Maturity 2.75 2.56 3.85
One-Year MTA 1.633 1.823 4.326
One-Year CMT (Monthly) 0.44 0.49 2.71

Source Bankrate.com

The market for US dollar denominated debt instruments is potentially at a standstill, which means that the Treasury lacks the ability to finance its mammoth budget deficit through public debt operations, leading the entire budgetary process into a quandary.

The question is whether China and Japan will continue to purchase US dollar denominated debt instruments. Washington is running a public relations campaign to lure Asian investors into buying T-bills and US government bonds. .

With the markets for US dollar denominated debt (both domestically and internationally) in crisis, further pressure will be exerted on the Treasury to slash (civilian) public expenditure to the bone, exact user fees for public services and sell off public assets, including State infrastructure and institutions. In all likelihood, this crisis is leading us to the privatization of the State, where activities hitherto under government jurisdiction will be transferred into private hands.

Who will be buying State assets at rock bottom prices? The financial elites, which are also the recipients of the bank bailout.

Consolidation of the Banks

A massive amount of liquidity has been injected into the financial system, from the bailouts but also from pension funds, individual savings, etc.

The stated objective of the bank bailout programs is to alleviate the banks’ burden of bad debts and non-performing loans. In actuality what is happening is that these massive amounts of money are being used by a handful of institutions to consolidate their position in global banking.

The exposure of the banks, largely the result of derivative trade is estimated in the tens of trillions of dollars, to the extent that the amounts and guarantees granted by the Treasury and the Fed will not resolve the crisis. Nor are they intended to resolve the crisis.

The mainstream media suggests that the banks are being nationalized as a result of TARP, In fact, it is exactly the opposite: the State is being taken over by the banks, the State is being privatized. The establishment of a Worldwide unipolar financial system is part of the broader project of the Wall Street financial elites to establish the contours of a world government.

In a bitter irony, the recipients of the bailout under TARP and Obama’s proposed 750 billion aid to financial institutions are the creditors of the federal government. The Wall Street banks are the brokers and underwriters of the US public debt, although they hold only a portion of the debt, they transact and trade in US dollar denominated public debt instruments Worldwide.

They act as creditors of the US State. They evaluate the creditworthiness of the US government, they rank the public debt through Moody’s and Standard and Poor. They control the US Treasury, the Federal Reserve Board and the US Congress. They oversee and dictate fiscal and monetary policy, ensuring that the state acts in their interest.

Since the Reagan era, Wall Street dominates most areas of economic and social policy. It sets the budgetary agenda, ensuring the curtailment of social expenditures. Wall Street preaches balanced budgets but the practice has been lobbying for the elimination of corporate taxes, the granting of handouts to corporations, tax write-offs in mergers and acquisitions etc, all of which lead to a spiralling public debt.

Circular and Contradictory Relationship

The Federal Reserve system is a privately owned central bank. While the Federal Reserve Board is a government body, the process of money creation is controlled by the 12 Federal Reserve Banks, which are privately owned.

The shareholders of the Federal Reserve banks (with the New York Federal Reserve Bank playing a dominant role) are among America’s most powerful financial institutions.

While the Federal Reserve can create money “out of thin air”, the multibillion outlays of the Treasury (including the TARP program) will require the emission of public debt in the form of treasury bills and government bonds.

US financial institutions oversee the US public debt. They are involved in the sale of treasury bills and government bonds on financial markets in the US and around the World. But they also hold part of the public debt. In this regard, they are the creditors of the US government. Part of this increased public debt required to rescue the banks will be financed or brokered by the same financial institutions which are the object of the bank rescue plan.

We are dealing with a pernicious circular relationship. When the banks pressured the Treasury to assist them in the form of a major bank rescue operation, it was understood from the outset that the banks would in turn assist the Treasury in financing the handouts of which they are the recipients.

To finance the bank bailout, the Treasury needs to run a massive budget deficit, which in turn requires a staggering increase of the US public debt.

Public opinion has been misled. The US government is in a sense financing its own indebtedness: the money granted to the banks is in part financed by borrowing from the banks.

The banks lend money to the government and with the money they lend the government, the Treasury finances the bailout. In turn, the banks impose conditionalities on the management of the US public debt. They dictate how the money should be spent. They impose fiscal responsibility, they dictate massive cuts in social expenditures which result in the collapse and/or privatization of public services. They impose the privatization of urban infrastructure, roads, sewer and water systems, public recreational areas, everything is up for privatization.

The recipient banks are the beneficiaries as well as the creditors. As creditors, they will oblige the government a) to slash expenditures b) to run up the public debt through the issuing of treasury bills and government bonds.

This public debt crisis is all the more serious because the US federal government does not control monetary policy. All public debt operations go through the Federal reserve, which is in charge of monetary policy, acting on behalf of private financial interests. The government as such has no authority over money creation. This means that public debt operations essentially serve the interests of the banks.

Continuity from Bush to Obama

The Obama stimulus program constitutes a continuation of the Bush administration’s bank bailout packages. The proposed policy solution to the crisis becomes the cause, ultimately resulting in further real economy bankruptcies and a corresponding collapse of the standard of living of Americans.

Both the Bush and Obama bank bailouts are intended to come to the rescue of troubled financial institutions, to ensure the payment of “inter-bank” debt operations. In practice, large amounts of money transit through the banking system, from the banks to the hedge funds, to offshore banking havens and back to the banks.

The government and the media tend to focus on the ambiguous notion of ” inter-bank debts”. The identity of the creditors is rarely mentioned.

Multi-billion dollar transfers are conducted electronically from one financial entity to another. Where is the money going? Who is collecting these multibillion debts, which are in large part the consequence of financial manipulation and derivative trade?

There are indications that the financial institutions are transferring billions of dollars into their affiliated hedge funds. From these hedge funds they can then channel money capital towards the acquisition of real assets.

Through what circuitous financial mechanisms were these debts created? Where is the bailout money going? Who is cashing in on the multibillion dollar government bailout money? This process is contributing to an unprecedented concentration of private wealth.

Concluding Remarks

Financial manipulation is an integral part of the New World Order. It constitutes a powerful means to accumulate wealth.

Under the present political arrangement, those responsible for monetary policy are quite deliberately serving the interests of the financiers, to the detriment of working people, leading to economic dislocation, unemployment and mass poverty.

This article has focussed on how financial manipulation has served to shatter the structure of US public expenditure.

This restructuring of global financial markets and institutions (alongside the pillage of national economies) has enabled the accumulation of vast amounts of private wealth – a large portion of which has been amassed as a result of strictly speculative transactions.

This critical drain of billions of dollars of household savings and state tax revenues paralyses the functions of government spending and spurs the accumulation of a public debt, which can no longer be be financed through the emission of US dollar denominated debt.

What we are dealing with is the fraudulent transfer and confiscation of lifelong savings and pension funds, the fraudulent appropriation of tax revenues to finance the bank bailouts, etc. To understand what has happened: follow the money trail of electronic transfers with a view to establishing where the money has gone

The monetary system, which is integrated into the State budgetary process has been destabilized. The fundamental relationship between the monetary system and the real economy is in crisis.

The creation of money “out of thin air” threatens the value of the US dollar as an international currency. Similarly, the financing of a mammoth US budget deficit through dollar denominated debt instruments is impaired as a result of exceedingly low interest rates. Moreover, the process of household savings is undermined with interest rates close to zero.

What we have dealt with in this article is one central aspect of an evolving process of global financial collapse.

The international payments system is in crisis. The economic prospects are terrifying. Bankruptcies in the US, Canada, the European Union are occurring at an alarming rate. Country level exports have collapsed, leading to a contraction of international trade Reports from the Asian economies indicate a massive increase in unemployment. In China’s Pearl River basin in Southern Guangdong province’s industrial export processing economy, some 700,000 were laid off in January. In Japan, industrial output has collapsed by more than 20 percent since December. In the Philippines, a country of 90 million people, exports collapsed by more than 40 percent in December.

Financial Disarmament

There are no solutions under the prevailing global financial architecture. Meaningful policies cannot be achieved without radically reforming the workings of the international banking system.

What is required is an overhaul of the monetary system including the functions and ownership of the central bank, the arrest and prosecution of those involved in financial fraud both in the financial system and in governmental agencies, the freeze of all accounts where fraudulent transfers have been deposited, the cancellation of debts resulting from fraudulent trade and/or market manipulation.

People across the land, nationally and internationally must mobilize. This struggle to democratise the financial and fiscal apparatus must be broad-based and democratic encompassing all sectors of society at all levels, in all countries. What is ultimately required is to disarm the financial establishment:

-confiscate those assets which were obtained through fraud and financial manipulation.

-restore the savings of households through reverse transfers

-return the bailout money to the Treasury, freeze the activities of the hedge funds. .

– freeze the gamut of speculative transactions including short-selling and derivative trade.

ANNEX

Documents

Budget of the United States Government

Fiscal Year 2010 The Budget Documents

A New Era of Responsibility: The 2010 Budget

The tables contained in Annex can also be consulted by clicking:

Summary Tables

See also:

http://www.budget.gov

http://www.gpoaccess.gov/usbudget/fy10/pdf/fy10-newera.pdf

—————
Professor Chossudovsky is director of the Center for Research on Globalisation.

Posted in America, Economics | 3 Comments »

John Kinsman: Nation’s Food System Nearly Broke

Posted by kelliasworld on March 3, 2009

OpEdNews
Original Content

March 3, 2009

By John Kinsman

As our government enacts a stimulus package and President Barack Obama announces bold initiatives to stem home mortgage foreclosures, disaster threatens family farmers and their communities.

The government’s response to plummeting commodity prices and tightening credit markets leads to the basic question: Who will produce our food? This is a worldwide crisis. U.S. policy and the demand for deregulation at all levels–from food production to financial markets–contribute greatly to the global collapse.

The solution must be grounded in food sovereignty so that all farmers and their communities can regain control over their food supply. This response makes sense here in Wisconsin and was the global message from the 500+ farmer leaders at the Via Campesina conference in Mozambique in October.

Many U.S. farmers are going out of business because they receive prices equal to about one half their cost to produce our food. How long could any enterprise receiving half the amount of its input costs stay in business? As an example, dairy farmers in the Northeast and Midwest must be paid between 30 and 35 cents per pound for their milk to pay production costs and provide basic living expenses.

Until 1980, farmers received a price equal to 80 percent of parity, meaning that farmers’ purchasing power kept up with the rest of the economy. Unfortunately, a 1981 political decision discontinued parity, and today the dairy farmers’ share is below 40 percent.

“Free trade” and other regressive agricultural policies have decimated farms. We are now a food deficit nation dependent on food imports, often of questionable quality.

Our food system is nearly broke, which is almost as serious as our country’s financial meltdown. With fair farm policies, farmers would get fair prices that would not require higher consumers prices. The Canadian dairy pricing system is the best example that proves fair farmer prices can and often do bring lower consumer prices and a healthier rural economy. In addition, excessive middleman profits are taking advantage of both consumers and producers.

As more farmers face bankruptcy, we all face a food emergency. European farmers speak from thousands of years of experience on the importance of family farms when they warn us, “Any time a country neglects its family farm base and allows it to become financially bankrupt, the entire economy of that country will soon collapse. It may take generations to rebuild the farm economy and that of the country.”

Despite the magnitude of this food emergency, the “farm crisis” does not appear in headlines, so politicians are not compelled to provide political or financial assistance to something that would likely fail to bring votes. As farmers, we are now only about 1 percent of the U.S. population, and have little power to expose and prevent our demise. However, our urban and rural friends could be vital voices and advocates.

Bailing out the financial giants will not solve the financial crisis in the country, but the right policies and stimulus dollars could prevent a severe food crisis by saving farmers and workers. Furthermore, farm income dollars remain in and multiply at least two to four times in the local economy.

Family farmers have proposed fair food and farm policies that can be implemented at a fraction of the present multibillion-dollar policies destroying us. As the Treasury Department develops plans to distribute the bailout funds, the National Family Farm Coalition and others urge it to require banks receiving funds to treat their borrowers fairly by providing debt restructuring as an alternate to home or farm foreclosure or bankruptcy.

Concerned citizens can call the White House, 202-456-1111, or your members of Congress, 202-224-3121, to urge them to support policies that enable farmers to earn a fair market price; request an emergency milk price at $17.50 per hundred weight; provide price stability through government grain reserves and effective supply management; support the TRADE Act to be reintroduced in Congress; increase direct and guaranteed loans to family farmers; and ensure that the food we raise can be marketed to local schools and institutions, providing a better food supply at a fair price. We need these immediate changes in our food and farm policy.

John Kinsman, a dairy farmer from La Valle, is president of Family Farm Defenders, based in Madison.
_____
Yes, We need family farms, not agribusinesses like Monsanto and Archer Daniels Midland and the rest of the industry that wants to eliminate organic farming, drive small farmers off the land worldwide, and make us all eat chemicals instead of real food. President Obama has promised to end subsidies to agribusiness. Let’s help him make good on that promise. Demand that your Senators and Representative vote against agribusiness subsidies and for family farms!–K.R.

Posted in America, Economics, Food | Tagged: , , , , , | 1 Comment »

Americans in Appalachia Are Living in a State of Terror

Posted by kelliasworld on February 27, 2009


By Bo Webb , AlterNet
Posted on February 19, 2009, Printed on February 27, 2009
http://www.alternet.org/story/127877/

Dear Mr. President,

As I write this letter, I brace myself for another round of nerve-wracking explosives being detonated above my home in the mountains of West Virginia. Outside my door, pulverized rock dust, laden with diesel fuel and ammonium nitrate explosives hovers in the air, along with the residual of heavy metals that once lay dormant underground.

The mountain above me, once a thriving forest, has been blasted into a pile of rock and mud rubble. Two years ago, it was covered with rich black topsoil and abounded with hardwood trees, rhododendrons, ferns and flowers. The understory thrived with herbs such as ginseng, black cohosh, yellow root and many other medicinal plants. Black bears, deer, wild turkey, hawks, owls and thousands of [other] birds lived here. The mountain contained sparkling streams teeming with aquatic life and fish.

Now it is all gone. It is all dead. I live at the bottom of a mountain-top-removal coal-mining operation in the Peachtree community.

Mr. President Obama, I am writing you because we have simply run out of options. Last week, the 4th U.S. Circuit Court in Richmond, Va., overturned a federal court ruling for greater environmental restrictions on mountaintop-removal permits. Dozens of permits now stand to be rushed through. As you know, in December, the EPA under George W. Bush allowed an 11th-hour change to the stream buffer zone rule, further unleashing the coal companies to do as they please.

During your presidential campaign, you declared: “We have to find more environmentally sound ways of mining coal than simply blowing the tops off mountains.”

That time is now. Or never.

Every day, more than 3 million pounds of explosives are detonated in our state to remove our mountains and expose the thin seams of coal. Over 470 mountains in Appalachia have been destroyed in this process, the coal scooped up and hauled away to be burned at coal-fired power plants across our country and abroad. This includes the Potomac River Plant, which generates the electricity for the White House.

Mountaintop removal is the dirty secret in our nation’s energy supply. If coal can’t be mined clean, it can’t be called clean. Here, at the point of extraction, coal passes through a preparation plant that manages to remove some, but not all, of the metals and toxins. Those separated impurities are stored in mammoth toxic sludge dams above our communities throughout Appalachia.

There are three sludge dams within 10 miles of my home. Coal companies are now blasting directly above and next to a dam above my home that contains over 2 billion gallons of toxic waste. That is the same seeping dam that hovers just 400 yards above the Marsh Fork Elementary School. As you know, coal sludge dams have failed before, and lives have been lost.

My family and I, like many American citizens in Appalachia, are living in a state of terror. Like sitting ducks waiting to be buried in an avalanche of mountain waste, or crushed by a falling boulder, we are trapped in a war zone within our own country.

In 1968, I served my country in Vietnam as part of the 1st Battalion 12th Marines, 3rd Marine Division. As you know, Appalachians have never failed to serve our country; our mountain riflemen stood with George Washington at the surrender of the British in Yorktown. West Virginia provided more per capita soldiers for the Union during the Civil War than any other state; we have given our blood for every war since.

We have also given our blood for the burden of coal in these mountains. My uncle died in the underground mines at the age of 17; another uncle was paralyzed from an accident. My dad worked in an underground mine. Many in my family have suffered from black-lung disease.

These mountains are our home. My family roots are deep in these mountains. We homesteaded this area in the 1820s. This is where I was born. This is where I will die.

On Jan. 15, 1972, U.S. Sen. John D. Rockefeller made a speech at Morris Harvey College. He declared: “The government has turned its back on the many West Virginians who have borne out of their property and out of their pocketbook the destructive impact of strip-mining. We hear that the governor once claimed to have wept as he flew over the strip mine devastation of our state. Now it’s the people who weep.”

Our state government has turned its back on us in 2009.

Peachtree is but one of hundreds of Appalachian communities that are being bombed. Our property has been devalued to worthlessness. Our neighbors put their kids to bed at night with the fear of being crushed or swept away in toxic sludge. And the outside coal industries continue their criminal activity through misleading and false ads.

Mr. President, when I heard you talk during your campaign stops, it made me feel like there was hope for Peachtree and the Coal River Valley of West Virginia. Hope for me and my family.

Abraham Lincoln wrote that we cannot escape history: “The fiery trial through which we pass, will light us down, in honor or dishonor, to the latest generation.”

I beg you to re-light our flame of hope and honor and immediately stop the coal companies from blasting so near our homes and endangering our lives. As you have said, we must find another way than blowing off the tops of our mountains. We must end mountaintop removal.

I also ask you to please put an end to these dangerous toxic-sludge dams.

With utmost respect, yours truly,

Bo Webb
Naoma, W.V.

© 2009 Independent Media Institute. All rights reserved.
View this story online at:
http://www.alternet.org/story/127877/
_________________
Clean Coal is an oxymoron. And people who blow the tops off mountains are just morons. K.R.

Posted in Air pollution, America, Economics, Obama, Sludge, water pollution | Tagged: , , | Leave a Comment »

A Planet on the Brink: Economic Crash Will Fuel Social Unrest

Posted by kelliasworld on February 26, 2009


By Michael T. Klare, Tomdispatch.com
Posted on February 24, 2009, Printed on February 26, 2009
http://www.alternet.org/story/128716/

The global economic meltdown has already caused bank failures, bankruptcies, plant closings, and foreclosures and will, in the coming year, leave many tens of millions unemployed across the planet. But another perilous consequence of the crash of 2008 has only recently made its appearance: increased civil unrest and ethnic strife. Someday, perhaps, war may follow.

As people lose confidence in the ability of markets and governments to solve the global crisis, they are likely to erupt into violent protests or to assault others they deem responsible for their plight, including government officials, plant managers, landlords, immigrants, and ethnic minorities. (The list could, in the future, prove long and unnerving.) If the present economic disaster turns into what President Obama has referred to as a “lost decade,” the result could be a global landscape filled with economically-fueled upheavals.

Indeed, if you want to be grimly impressed, hang a world map on your wall and start inserting red pins where violent episodes have already occurred. Athens (Greece), Longnan (China), Port-au-Prince (Haiti), Riga (Latvia), Santa Cruz (Bolivia), Sofia (Bulgaria), Vilnius (Lithuania), and Vladivostok (Russia) would be a start. Many other cities from Reykjavik, Paris, Rome, and Zaragoza to Moscow and Dublin have witnessed huge protests over rising unemployment and falling wages that remained orderly thanks in part to the presence of vast numbers of riot police. If you inserted orange pins at these locations — none as yet in the United States — your map would already look aflame with activity. And if you’re a gambling man or woman, it’s a safe bet that this map will soon be far better populated with red and orange pins.

For the most part, such upheavals, even when violent, are likely to remain localized in nature, and disorganized enough that government forces will be able to bring them under control within days or weeks, even if — as with Athens for six days last December — urban paralysis sets in due to rioting, tear gas, and police cordons. That, at least, has been the case so far. It is entirely possible, however, that, as the economic crisis worsens, some of these incidents will metastasize into far more intense and long-lasting events: armed rebellions, military takeovers, civil conflicts, even economically fueled wars between states.

Every outbreak of violence has its own distinctive origins and characteristics. All, however, are driven by a similar combination of anxiety about the future and lack of confidence in the ability of established institutions to deal with the problems at hand. And just as the economic crisis has proven global in ways not seen before, so local incidents — especially given the almost instantaneous nature of modern communications — have a potential to spark others in far-off places, linked only in a virtual sense.

A Global Pandemic of Economically Driven Violence

The riots that erupted in the spring of 2008 in response to rising food prices suggested the speed with which economically-related violence can spread. It is unlikely that Western news sources captured all such incidents, but among those recorded in the New York Times and the Wall Street Journal were riots in Cameroon, Egypt, Ethiopia, Haiti, India, Indonesia, Ivory Coast, and Senegal.

In Haiti, for example, thousands of protesters stormed the presidential palace in Port-au-Prince and demanded food handouts, only to be repelled by government troops and UN peacekeepers. Other countries, including Pakistan and Thailand, quickly sought to deter such assaults by deploying troops at farms and warehouses throughout the country.

The riots only abated at summer’s end when falling energy costs brought food prices crashing down as well. (The cost of food is now closely tied to the price of oil and natural gas because petrochemicals are so widely and heavily used in the cultivation of grains.) Ominously, however, this is sure to prove but a temporary respite, given the epic droughts now gripping breadbasket regions of the United States, Argentina, Australia, China, the Middle East, and Africa. Look for the prices of wheat, soybeans, and possibly rice to rise in the coming months — just when billions of people in the developing world are sure to see their already marginal incomes plunging due to the global economic collapse.

Food riots were but one form of economic violence that made its bloody appearance in 2008. As economic conditions worsened, protests against rising unemployment, government ineptitude, and the unaddressed needs of the poor erupted as well. In India, for example, violent protests threatened stability in many key areas. Although usually described as ethnic, religious, or caste disputes, these outbursts were typically driven by economic anxiety and a pervasive feeling that someone else’s group was faring better than yours — and at your expense.

In April, for example, six days of intense rioting in Indian-controlled Kashmir were largely blamed on religious animosity between the majority Muslim population and the Hindu-dominated Indian government; equally important, however, was a deep resentment over what many Kashmiri Muslims experienced as discrimination in jobs, housing, and land use. Then, in May, thousands of nomadic shepherds known as Gujjars shut down roads and trains leading to the city of Agra, home of the Taj Mahal, in a drive to be awarded special economic rights; more than 30 people were killed when the police fired into crowds. In October, economically-related violence erupted in Assam in the country’s far northeast, where impoverished locals are resisting an influx of even poorer, mostly illegal immigrants from nearby Bangladesh.

Economically-driven clashes also erupted across much of eastern China in 2008. Such events, labeled “mass incidents” by Chinese authorities, usually involve protests by workers over sudden plant shutdowns, lost pay, or illegal land seizures. More often than not, protestors demanded compensation from company managers or government authorities, only to be greeted by club-wielding police.

Needless to say, the leaders of China’s Communist Party have been reluctant to acknowledge such incidents. This January, however, the magazine Liaowang (Outlook Weekly) reported that layoffs and wage disputes had triggered a sharp increase in such “mass incidents,” particularly along the country’s eastern seaboard, where much of its manufacturing capacity is located.

By December, the epicenter of such sporadic incidents of violence had moved from the developing world to Western Europe and the former Soviet Union. Here, the protests have largely been driven by fears of prolonged unemployment, disgust at government malfeasance and ineptitude, and a sense that “the system,” however defined, is incapable of satisfying the future aspirations of large groups of citizens.

One of the earliest of this new wave of upheavals occurred in Athens, Greece, on December 6, 2008, after police shot and killed a 15-year-old schoolboy during an altercation in a crowded downtown neighborhood. As news of the killing spread throughout the city, hundreds of students and young people surged into the city center and engaged in pitched battles with riot police, throwing stones and firebombs. Although government officials later apologized for the killing and charged the police officer involved with manslaughter, riots broke out repeatedly in the following days in Athens and other Greek cities. Angry youths attacked the police — widely viewed as agents of the establishment — as well as luxury shops and hotels, some of which were set on fire. By one estimate, the six days of riots caused $1.3 billion in damage to businesses at the height of the Christmas shopping season.

Russia also experienced a spate of violent protests in December, triggered by the imposition of high tariffs on imported automobiles. Instituted by Prime Minister Vladimir Putin to protect an endangered domestic auto industry (whose sales were expected to shrink by up to 50% in 2009), the tariffs were a blow to merchants in the Far Eastern port of Vladivostok who benefited from a nationwide commerce in used Japanese vehicles. When local police refused to crack down on anti-tariff protests, the authorities were evidently worried enough to fly in units of special forces from Moscow, 3,700 miles away.

In January, incidents of this sort seemed to be spreading through Eastern Europe. Between January 13th and 16th, anti-government protests involving violent clashes with the police erupted in the Latvian capital of Riga, the Bulgarian capital of Sofia, and the Lithuanian capital of Vilnius. It is already essentially impossible to keep track of all such episodes, suggesting that we are on the verge of a global pandemic of economically driven violence.

A Perfect Recipe for Instability

While most such incidents are triggered by an immediate event — a tariff, the closure of local factory, the announcement of government austerity measures — there are systemic factors at work as well. While economists now agree that we are in the midst of a recession deeper than any since the Great Depression of the 1930s, they generally assume that this downturn — like all others since World War II — will be followed in a year, or two, or three, by the beginning of a typical recovery.

There are good reasons to suspect that this might not be the case — that poorer countries (along with many people in the richer countries) will have to wait far longer for such a recovery, or may see none at all. Even in the United States, 54% of Americans now believe that “the worst” is “yet to come” and only 7% that the economy has “turned the corner,” according to a recent Ipsos/McClatchy poll; fully a quarter think the crisis will last more than four years. Whether in the U.S., Russia, China, or Bangladesh, it is this underlying anxiety — this suspicion that things are far worse than just about anyone is saying — which is helping to fuel the global epidemic of violence.

The World Bank’s most recent status report, Global Economic Prospects 2009, fulfills those anxieties in two ways. It refuses to state the worst, even while managing to hint, in terms too clear to be ignored, at the prospect of a long-term, or even permanent, decline in economic conditions for many in the world. Nominally upbeat — as are so many media pundits — regarding the likelihood of an economic recovery in the not-too-distant future, the report remains full of warnings about the potential for lasting damage in the developing world if things don’t go exactly right.

Two worries, in particular, dominate Global Economic Prospects 2009: that banks and corporations in the wealthier countries will cease making investments in the developing world, choking off whatever growth possibilities remain; and that food costs will rise uncomfortably, while the use of farmlands for increased biofuels production will result in diminished food availability to hundreds of millions.

Despite its Pollyanna-ish passages on an economic rebound, the report does not mince words when discussing what the almost certain coming decline in First World investment in Third World countries would mean:

“Should credit markets fail to respond to the robust policy interventions taken so far, the consequences for developing countries could be very serious. Such a scenario would be characterized by… substantial disruption and turmoil, including bank failures and currency crises, in a wide range of developing countries. Sharply negative growth in a number of developing countries and all of the attendant repercussions, including increased poverty and unemployment, would be inevitable.”

In the fall of 2008, when the report was written, this was considered a “worst-case scenario.” Since then, the situation has obviously worsened radically, with financial analysts reporting a virtual freeze in worldwide investment. Equally troubling, newly industrialized countries that rely on exporting manufactured goods to richer countries for much of their national income have reported stomach-wrenching plunges in sales, producing massive plant closings and layoffs.

The World Bank’s 2008 survey also contains troubling data about the future availability of food. Although insisting that the planet is capable of producing enough foodstuffs to meet the needs of a growing world population, its analysts were far less confident that sufficient food would be available at prices people could afford, especially once hydrocarbon prices begin to rise again. With ever more farmland being set aside for biofuels production and efforts to increase crop yields through the use of “miracle seeds” losing steam, the Bank’s analysts balanced their generally hopeful outlook with a caveat: “If biofuels-related demand for crops is much stronger or productivity performance disappoints, future food supplies may be much more expensive than in the past.”

Combine these two World Bank findings — zero economic growth in the developing world and rising food prices — and you have a perfect recipe for unrelenting civil unrest and violence. The eruptions seen in 2008 and early 2009 will then be mere harbingers of a grim future in which, in a given week, any number of cities reel from riots and civil disturbances which could spread like multiple brushfires in a drought.

Mapping a World at the Brink

Survey the present world, and it’s all too easy to spot a plethora of potential sites for such multiple eruptions — or far worse. Take China. So far, the authorities have managed to control individual “mass incidents,” preventing them from coalescing into something larger. But in a country with a more than two-thousand-year history of vast millenarian uprisings, the risk of such escalation has to be on the minds of every Chinese leader.

On February 2nd, a top Chinese Party official, Chen Xiwen, announced that, in the last few months of 2008 alone, a staggering 20 million migrant workers, who left rural areas for the country’s booming cities in recent years, had lost their jobs. Worse yet, they had little prospect of regaining them in 2009. If many of these workers return to the countryside, they may find nothing there either, not even land to work.

Under such circumstances, and with further millions likely to be shut out of coastal factories in the coming year, the prospect of mass unrest is high. No wonder the government announced a $585 billion stimulus plan aimed at generating rural employment and, at the same time, called on security forces to exercise discipline and restraint when dealing with protesters. Many analysts now believe that, as exports continue to dry up, rising unemployment could lead to nationwide strikes and protests that might overwhelm ordinary police capabilities and require full-scale intervention by the military (as occurred in Beijing during the Tiananmen Square demonstrations of 1989).

Or take many of the Third World petro-states that experienced heady boosts in income when oil prices were high, allowing governments to buy off dissident groups or finance powerful internal security forces. With oil prices plunging from $147 per barrel of crude oil to less than $40 dollars, such countries, from Angola to shaky Iraq, now face severe instability.

Nigeria is a typical case in point: When oil prices were high, the central government in Abuja raked in billions every year, enough to enrich elites in key parts of the country and subsidize a large military establishment; now that prices are low, the government will have a hard time satisfying all these previously well-fed competing obligations, which means the risk of internal disequilibrium will escalate. An insurgency in the oil-producing Niger Delta region, fueled by popular discontent with the failure of oil wealth to trickle down from the capital, is already gaining momentum and is likely to grow stronger as government revenues shrivel; other regions, equally disadvantaged by national revenue-sharing policies, will be open to disruptions of all sorts, including heightened levels of internecine warfare.

Bolivia is another energy producer that seems poised at the brink of an escalation in economic violence. One of the poorest countries in the Western Hemisphere, it harbors substantial oil and natural gas reserves in its eastern, lowland regions. A majority of the population — many of Indian descent — supports President Evo Morales, who seeks to exercise strong state control over the reserves and use the proceeds to uplift the nation’s poor. But a majority of those in the eastern part of the country, largely controlled by a European-descended elite, resent central government interference and seek to control the reserves themselves. Their efforts to achieve greater autonomy have led to repeated clashes with government troops and, in deteriorating times, could set the stage for a full-scale civil war.

Given a global situation in which one startling, often unexpected development follows another, prediction is perilous. At a popular level, however, the basic picture is clear enough: continued economic decline combined with a pervasive sense that existing systems and institutions are incapable of setting things right is already producing a potentially lethal brew of anxiety, fear, and rage. Popular explosions of one sort or another are inevitable.

Some sense of this new reality appears to have percolated up to the highest reaches of the U.S. intelligence community. In testimony before the Senate Select Committee on Intelligence on February 12th, Admiral Dennis C. Blair, the new Director of National Intelligence, declared, “The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications… Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one to two year period” — certain to be the case in the present situation.

Blair did not specify which countries he had in mind when he spoke of “regime-threatening instability” — a new term in the American intelligence lexicon, at least when associated with economic crises — but it is clear from his testimony that U.S. officials are closely watching dozens of shaky nations in Africa, the Middle East, Latin America, and Central Asia.

Now go back to that map on your wall with all those red and orange pins in it and proceed to color in appropriate countries in various shades of red and orange to indicate recent striking declines in gross national product and rises in unemployment rates. Without 16 intelligence agencies under you, you’ll still have a pretty good idea of the places that Blair and his associates are eyeing in terms of instability as the future darkens on a planet at the brink.

Michael T. Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books).
© 2009 Tomdispatch.com All rights reserved.
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