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Oct 2, 2012

David Doninger's Blog

John Hoffman, brilliant leader of the EPA team that saved the ozone layer, founder of the hugely successful Energy Star programs, and climate protection pioneer, passed away last week.  He was only 62 years old.  

While the battle to curb the ozone-destroying chlorofluorocarbons had many heroes, in my mind John stood head and shoulders above all.  The best book about saving the ozone layer is Between Earth and Sky, by Seth Cagin and Philip Dray.  They introduce him this way:

Hoffman possessed an ideal background for an EPA official:  a master’s degree in systems modeling from MIT, which combined course work in engineering, business, and urban planning with sophisticated computer programming. 

As a young EPA staffer in the early 1980s, John headed a small team focused on “strategic studies.”  This was early in the Reagan administration, before Anne Gorsuch and James Watt had been disgraced and dismissed.   It was not a hospitable time for thinking honestly about big environmental challenges.  But John had the courage to stay focused on things that would matter, and he undertook crucial studies of ozone depletion and global warming. 

I met John in 1984.  I had just brought an NRDC lawsuit to compel EPA to take action on CFCs under the Clean Air Act.  Our suit was to force EPA to follow up on its 1980 finding that CFCs endanger the stratospheric ozone layer and, as a result, public health.  One day my phone rang and John introduced himself.  He rather brashly explained that if we pressed our legal rights for a court order forcing EPA to make an immediate decision on CFC limits, “you’ll get the wrong answer.” 

I didn’t know it at the time, but John had already helped quash an internal EPA effort to revoke the 1980 science finding, which would have knocked the legs from under our lawsuit.  John confidently told me he needed two years to conduct a comprehensive new scientific assessment and to hold a series of domestic and international meetings designed to build a consensus for action among EPA’s senior appointees, other Reagan administration officials, and the governments of other nations.

His pitch struck me as both extraordinarily audacious and surprisingly dilatory.  Who was this guy with such a grandiose plan?  We had already waited years for action, and we had every reason to expect a forceful court-ordered deadline.  Now we were supposed to sit on our heels for another two years? 

But on reflection, John’s proposition made sense.  We had a better chance of getting the right answer if we gave them the time. 

So, we settled the case with EPA’s commitment to a “Stratospheric Protection Plan,” designed with his friend and colleague Stephen Seidel.  The plan, adopted into a court order, had three elements:  a timetable for the scientific assessment, a timetable for domestic and international conferences, and firm deadlines in 1987 for EPA to propose and promulgate regulations based on the information gathered.

That science assessment and those conferences proved crucial.  With full peer-review by the nation’s best atmospheric scientists, cancer specialists, and other experts, John and his team demonstrated that letting CFC production and use keep growing would lead to hundreds of millions of skin cancers, millions of them fatal, as well as millions of cataracts and immunological diseases, and untold damage to crops and natural systems.  John had an amazing ability to work across a wide range of disciplines, shifting seamlessly from debating discount rates with economists, dose-response functions with epidemiologists, and ozone depletion models with atmospheric scientists.  When push came to shove in the skeptical Reagan cabinet, John’s risk assessment carried the day over scoffers like Interior Secretary Don Hodel, who favored hats and sunglasses over a treaty to protect the ozone layer.

The domestic and international conferences, small and large, brought participants from governments, industry, and environmental organizations into productive dialogue.  These meetings narrowed disagreements on the science, revealed the existence of alternative chemicals, and moved towards consensus on effective policies. 

As I’ve written here, positions slowly changed.  NRDC and, later, the U.S. government proposed phasing out the CFCs and related chemicals.  The industry offered limits on growth and, eventually, conceded the need for a scheduled transition to new chemicals.  

Fast forward to September 1987, when 24 industrialized nations signed the Montreal Protocol and agreed to a 50 percent reduction in CFC production over 10 years.  Shortly after, I recall walking with John through the corridors of one of the Congressional office buildings, lamenting that a huge opportunity had been lost, and that we’d be stuck with this half-way measure for a decade or more before the world came together on a full phase-out.  “You’re wrong,” John said, with characteristic certainty.  “We’ll be back at this and have that phase-out agreement within three years.”

Sure enough, driven by proof that CFCs were responsible for the Antarctic ozone hole – proof that came right after the Montreal agreement – the parties came together on a full global phase-out in the 1990 London Amendments, which brought in major developing nations as well as the industrialized countries.

John’s astonishing creativity did not stop there.  As far back as the early 1980s, John realized that climate change was the pre-eminent environment threat, and he began EPA’s work on strategies to slow global warming. During the Reagan years he also designed Green Lights, a voluntary program working with industry to deploy millions of energy-saving light bulbs.  This rapidly expanded into the suite of Energy Star programs – now run in the U.S. by EPA and the Department of Energy and by many other governments abroad – that have transformed dozens of consumer products and appliances, helping American consumers and businesses save huge amounts of energy and billions of dollars. 

The brilliant premise of Green Lights lay in helping companies see that something as mundane as cutting their lighting energy expenses could be a profit center.  The companies saved money at a high rate of return and earned EPA’s “green recognition” as well.  And with Energy Star, John took it to another level – building an EPA (and now also DOE) trademark that consumers can trust for products that save energy, save money, and protect the environment. 

John was the first to see the opportunity in the Energy Star programs for a new relationship between EPA and the private sector – a partnership based on sharing information on existing energy-savings technology, helping companies see the profit potential, and helping them re-organize themselves to seize the opportunity.  To be sure, EPA is business’s pollution regulator.  Through Energy Star, EPA demonstrated that it could also be a business-friendly partner. 

I’ve heard many testimonials to John’s influence on those who worked for him.  His vision, commitment and innovative approach to problem solving were inspiring and motivational. He was both a very demanding boss and a very compassionate colleague. He cared about the people who worked for him and helped many EPA employees advance in their careers and grow professionally.  John spent time getting to know those who worked for him and challenged people to set goals, work hard, deliver their best.  

And he became my friend.  Our families gathered for dinners or parties several times a year.  He’d call me at home and spend a half hour quizzing my then high-school daughter (now seeking her PhD in economics) on U.S. history, math, or whatever – and only when they were done would I find out he was on the phone.

The Talmud says that he who saves one life has saved the whole world.  John’s wife Lucinda and his daughter Alla can be immensely proud that their husband and father saved millions of lives.  

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Posted: Oct 2, 2012 1:26am
Oct 16, 2011

In order to gain an air of legitimacy, say commentators across the political spectrum, the “Occupy“ movement must make “concrete” demands. Their platitudes about the evils of Wall Street, we’re told, will not suffice. They must ask the powerful for concessions of sorts, even though this only promulgates the dependency status of the many vis-à-vis the elite. It is in this framework that the mainstream thinks, because they never imagined a world where the 99% didn’t have to kneel down and beg before the reprehensible power elite of this country

They want something concrete. However, this movement will not embrace the “concrete,” for beneath the cement lies the beach, to paraphrase a famous Situationist saying: sous les pavés, la plage.

The “demand” baloney is primarily cover for the union and non-profit leadership, as they attempt to lurch forward and co-opt the movement, throwing it to the hounds of the Democratic Party. Already I have witnessed this effort firsthand, in the New Orleans Occupy movement. In last week’s solidarity march (October 6th) from the Orleans Parish Prison to Lafayette Square, there were several representatives of local unions, most notably SEIU, some of which encouraged a chant of “Vote!” during the post-march rally. There were plenty of people of principle in their midst to drown out such “conventional wisdom” with the obvious retort: “Yeah, that didn’t work out so well for us last time.”

Fortunately the bureaucrats were in a minority in this demonstration, as seems to be the case elsewhere. Instead, we see an encouraging maturity on the part of the protesters, who recognize that our political system is merely an extension of the financial industry: generally useless for addressing the ongoing economic malaise of the many.

Fitting that young people are the forerunners of this prescient social movement. They are the ones that never enjoyed the fruits of the real estate boom or the tech boom before, and instead are ruined by a lifetime of student debt and poor employment prospects. Many were raised in the cozy confines of the suburbs, rooted in a positivist world-view where the sky was the limit, so long as they applied themselves and excelled in school. They were sure that after procuring a degree or three, they would be on their way to six-figure salaries and the same comfortable existence their parents had. While they may have faced mid-life crises, or simply resigned themselves to passing critiques of their staid suburban lives over cocktails with friends (a la Richard Yates’s Frank Wheeler), they surely wouldn’t know economic turmoil.

And yet, that is precisely the condition of significant portions of Generation Y. Real unemployment (U-6) for 18-29 year olds remains above 20%, while the student loan default rate has neared 10% in recent years. However, the statistics risk trivializing the frustration behind the birth of this movement. This simply isn’t about too few jobs with too few benefits and education that is too expensive and bankers that are too greedy. While all of these are component parts to their collective frustration, the overarching theme is  &ldquorecariousness.” There is a sense of powerlessness on the part of the protestors: a feeling of being stuck. In a nation where most everything has been bureaucratized, and reduced to trivial component parts, these protestors seek space for imagination: an “American Dream” broader than the cliché consumerist suburban life.

As such, this movement has more in line with the French protests against the CPE (cContrat Première Embauche) of 2006 than the Arab Spring earlier this year. While the former dealt with a specific “demand”; i.e., repeal of the new labor law, the movement was spurred on by a much larger redress: the increasing precarité of life in the neo-liberal world. The slogans of the day dealt much more with frustration of the increasing isolation of the citizen from the decision-making process, specifically with regards to economic policy, which is heavily insulated from public opinion by European Union bureaucracy.

I was on the streets of Paris then, and have participated in the New Orleans branch of the Occupy movement today. The similarities are striking, though the latter has a ways to go before it shakes the foundations of power in quite the same way.

Nonetheless, there is potential as long as concrete isn’t poured all over the movement. The Democrats, and their enablers in the union and liberal non-profit world, would love to deflate the movement by converting it into a legislative “demand.” However, American precariousness is too vast and far-reaching to be addressed in one, neat congressional bill. Furthermore, it is futile to ask anything of Congress, as they have almost entirely been elected on the heels of support from the same malicious forces the protests oppose: corporations, hedge-fund managers, and bankers. If we make demands of Congress, the best we will get are vacuous gestures or half-measures. If we ask that they “tax the rich,” we get the Buffet tax, which has multi-billionaires paying only what their secretaries do. If we ask for employment stimulus, we get corporate handouts supposedly designed to encourage hiring, much of which gets spent on CEO bonuses. If we ask for student debt relief, we get a myriad of relief options that all fall far short of what most “first world democracies” offer: higher education that is practically free. Meanwhile, this movement exists as a point of frustration with business-as-usual: an effort to offer an alternative to a political system that is essentially a revolving door between oligarchs, political bureaucrats and the puppets in power.

In resisting the temptation to go the easy route of making specific legislative demands, the Occupy movement is demonstrating a political sophistication not seen in this country in decades. It is more of a throw-back to ’68-‘69 than the anti-war protests of 2002-2004, insofar as there is an embedded critique of the overarching structure of this society. As such, there is greater potential for success. The chance of actually shifting the locus of power from the 1% to the rest is much greater in a spirited, innovative protest of this nature. As long as it remains as imaginative as it is today, the movement will endure. Just don’t pour concrete on it!

Matt Reichel is a writer currently living in New Orleans. He can be reached at: Read other articles by Matt, or visit Matt's website.

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Posted: Oct 16, 2011 2:28am
Aug 28, 2010

Understanding America's Class System

Honk if you love caviar

By Joe Bageant

Urinals How about them political elites, huh? Five million bucks for Chelsea Clinton's wedding, 15K just to rent the air-conditioned shitters -- huge chrome and glass babies with hot water and everything. No gas masks and waxy little squares of toilet paper for those guys.

Yes, it looks big time from the cheap seats. But the truth is that when we are looking at the political elite, we are looking at the dancing monkey, not the organ grinder who calls the tune. Washington's political class is about as upwardly removed from ordinary citizens as the ruling class is from the political class. For instance, they do not work for a living in the normal sense of a job, but rather obtain their income from abstractions such as investment and law, neither of which ever gave anybody a hernia or carpal tunnel. By comparison, the ruling class does not work at all.

Moneywise, Washington's political class is richer than the working class by the same orders of magnitude as the ruling class is richer than the political class. This gives the political class something to aim for. To that end, they have adopted the ruling elite's behaviors, tastes and lifestyles, with an eye on becoming members. Moreover, it is a molting process that begins with the right university and connections, and culminates in flying off to Washington with the rest of your generation's most privileged and ambitious young moths.

They make enough dough to at least fake it until they make it. Fifty-one of the 100 members of the US Senate are at the very least millionaires -- probably more than that, since multi-million million dollar residences and estates are exempt from the official tally. For instance in the House, Nancy Pelosi's net worth is either $13 million, or $92 million, depending upon who is counting. Why they bother to shave such large numbers is a mystery. Thirteen million, ninety two million, the difference is not gonna change our opinion of Nancy. Our opinion being that the broad is loaded. More than loaded. The comparatively poor members of Congress, like Barney Frank, are near millionaires. His publicly declared net worth is $976,000. For the life of me, I cannot see how they get by.

Along with the habits, the political class adopts the ruling class's social canon and presumptions, especially the one most necessary for acceptance: That the public has the collective intelligence of a chicken. OK, so it may be very hard to disprove that at the moment, but we must maintain at least some egalitarian semblance here. Anyway, as a group, the political elites think, look and act alike, and act toward their own interests. That makes them a class.

Screw the proles, just count the money

This political class stands between all of us down here and the tiny minority in the ruling class waaaaaay up there, wherever the hell up there is. No use to squint. You can't see it from where we are. That comes in mighty handy in denying the existence of a ruling class.

On the other hand, you do not need to see an egg-sucking dog in action to know what to expect -- or not to expect. The track record of the political class is an open book. As the layer of millionaires buffering the elites who pay for their campaigns, they've done their jobs. They approved the Bush administration's massive tax cut for the rich. They dropped the per-child tax credit for families with incomes less than $20,000. They "reformed" prescription drugs right out of Medicare. They reformed health care into hundreds of billions of increased profits for the insurance industry.

However, the American political class' finest moment came in September 2008 when the financial greed machinery of American investment houses went tits up. The Republican and Democratic parties, major corporations, and manufacturers of US opinion came together in one of the greater bipartisan efforts in modern US history. There was nothing to do, they all agreed, but buy up $700 billion in "toxic asset" investments. "Otherwise," they prophesied, the world would end. Meaning that the ongoing national Ponzi scheme they have always sold to the American people as the US economy, would finally crash.

And in case there were any skeptics out there among the unwashed, the public was reminded just how much they stood to lose -- which was everything. Deep in the boiler room, the Goldman Sachs black bag crew had wired up the "economy" with enough explosive "financial instruments" to take out every working mook's home, or retirement savings, which the medical industry was already sucking up at an alarming rate. Something had to be done before the health care industry got it all, and repo the family ride.

Yessiree, it was gonna be a "systemic collapse," by god, and if you needed proof, just look at the way both George Bush and Barack Obama agreed that some American corporations were too big to let sink, therefore it was time for the public to start bailing out the boat. Meanwhile, the royal economists were unanimous in that this "rescue" was going to require another 10 trillion bucks somewhere down the pike -- a very short pike. So it must all be damned serious and we gotta do this thing. Right folks?

In an unusual display of common sense, the American public said "Bullshit," by margins of three or four to one, depending upon region. That did not bother political and economic elites much. What the fuck do the proles know anyway?

Then, in midstream, the political and economic owning classes switched horses, after realizing there was more gravy for the kingpins in buying up banks and big industries. It was unconstitutional, but what the hell, that's what Supreme Courts are for. The proles mumbled and peered into their TV sets for explanations that never came.

Of course, partisan opposition being what it is these days -- a blood-soaked ditch of snarling hyenas -- Obama's election meant the GOP needed to denounce the new Democratic president for display purposes. Or at least shit in the Oval Office, and then blame him. So most Republicans holding office in 2008 were forced to argue publicly against "troubled asset relief," "stimulus packages," and the huge bailouts. Besides, somebody had to unfurl the motley banner of a "self balancing free market," at least widely enough for the GOP to hide behind in the back room where the real deals are always cut. The place where the weapons companies propose systems, using congressional representatives and generals as sales reps. Where it is understood that, as John Kenneth Galbraith pointed out near the end of his life, when it was safe to tell the truth, "stockholders are just appendages, someone to hold the bag for the corporations, and stocks are just gambling chips for hedge funds and Wall Street," and for the suckers who think they can actually outwit High Frequency Trading -- a.k.a. High Speed Fraud. (Thanks to reader Brent B. for sending me that one).

Ah, but I have digressed. What else is new? The main thing is that the smoke has now cleared, the money is in ruling class coffers, and a spin the bottle game for a few prosecutions is underway to entertain the crowd for the next few years. Public burnings in the national town square of media always draw a crowd.

Bwaaaaaa! Obama won't let us play

Fortunately, for both parties, there is no such thing as an American political memory. That Lindsay Lohan dated fellow rehab client, snowboarder Riley Giles, yes, that can be remembered. That the Republicans signed off on similar, if smaller giveaways under Pappy Bush and Clinton -- well, that may as well be ancient Egyptian history. So is the fact that the both parties forced banks to make high rate home loans to people who people who did not qualify, because the inflated home values during the expanding bubble would make billions for big investors who knew when to get out. Should they stay too long at the fair and go bust, they would set up the howl of "too big to fail." The administration, which has no more a clue to what makes the economy tick, would then rush them pallets of money. That's what a banker calls a win-win situation: when the banker holds both ends of a winning deal.

Meanwhile, elite Republicans still needed a beef with the new black guy on the block who had just kicked their ass and was still very popular at the time. The best they could come up with on the bailouts was that they had been allowed too little input. "Obama won't let us play with him. Bwaaaaaa!" A smokescreen of course, since he was doing exactly what they would have done, handing Republican bankers every bit of money the people had and a helluva lot they didn't have, but could make payments on for the next, oh, 100 years or until the final miserable, smoking collapse, whichever comes first.

In the end though, nobody in Washington disputed the ruling class's right to dictate policy. After all, the political class agreed with the ruling class's major premise: The public does not know shit, never has, never will. Also that it is best not to get the public too riled up, not because the public has any power (power is money in America and the elites have it all now), but because elected officials would have to answer brainless questions from people such as Tea Partiers. Or Ron Paul cultists. Gawd!

Howard, won't you please come home

America has always had a ruling class, and it has always bullshitted the world that it doesn't. But at least the ruling class of the past was interesting and varied, because diverse sorts of Americans were getting rich.

You had Texas wildcatters in the "oil bidness." You had Southern cotton and tobacco aristocrats guzzling bourbon, fondling their stock portfolios and their black maids. You had industrialists and California and Florida real estate hotwires, Boston Brahmins and New York financiers. There was the bootlegginç  g inside stock trader Joseph P. Kennedy, not to mention Prescott Bush moving financial assets around for the Nazis during WW II. They were products of varied educations, or in some cases, no education. They came from many regions, back when America still had distinct cultural regions, before it was completely homogenized and stratified for maximum capitalist efficiency.

Jane2  Whatever they may have been, they were seldom dull. I would love to have known Howard Hughes, a man who could direct a film, and build the largest aircraft ever built, the 200-ton, all-wood Spruce Goose, not to mention the busty Jane Russell's underwire bra. Stop and consider Bill Gates and the other colorless puds of today. Almost makes you miss the robber barons.

Think Tony Hayward gives a shit?

You hear it all the time these days: The top one percent of Americans own more wealth than the bottom 45% of the rest of Americans combined.

I have seldom met an American who thought this is a good thing, and seldom met one who understood how the ruling class got so rich. Simply put, it was through constant cultivation of bigger and more labyrinthine government, creating legal and technical complexities to sluice money nationally and globally in their direction, and to cover their asses in the process. The results are such things as 3,000 page health care bills (defining which corporate elites get which parts of the cake), or the 2,000-page NAFTA and its 9,000 tariff product codes.

Once the public was buried in such a maelstrom of legal paperwork, computer transactions, modeling, etc., it was easy to argue that the world had become so complex that the skills and brains to operate it were extremely rare and those who had them were fucking geniuses. These are people who dwell in such airy realms that we should pay them vast amounts of money and never question their decisions. That's how we got such oblivious duds as Timothy Geithner (who never held a nongovernment related job in his life) running the Treasury, and tens of thousands of the Empire's pud whackers, ranging from petty legal commissars, on up to the Alan Greenspans of this world -- a bumbling arrogant old fart who never had a clue but understood the rules: Look enigmatic and blow whichever administration is in power.

In fact, capitalist natural selection for mediocrity is how British Petroleum got Tony Hayward, who was unfortunate enough to be tossed out of the boat onto the media beaches of public awareness in his briefs. If ever there was a specimen of the slimy corporate salamander, we saw it in sniveling nakedness right there. Reportedly, the salamander will receive $18 million, plus annual pension payments totaling $1 million per year, the possible forfeiture of which makes good news copy to cover BP's ongoing negligence, theft and intimidation. So the public howls and throws eggs at the straw man, who has been making $1.6 million a year and is now sitting on his yacht "trying to get his life back." Does anybody really believe Tony Hayward gives a shit? Oh, there may be some news of BP's demise, its "absorption" by another corporation or something similar to Enron, sold off piecemeal to other massive corporations at a bargain prices, while everyone was watching the saga of the mediocre white collar criminal, Ken Lay. You'd think we'd learn. Corporations do not go away; they just morph along, sucking up generation after generation's money.

The rabble at the gates

You never hear them say it, but neo-conservatives understand that they have a mean streak down inside. They also know if they want to share in the national plunder, they must win hearts and minds. They must look pious and sound right while lying through their teeth and picking our pockets. In other words, they have an astute grasp of American politics and business -- which are the same thing, of course.

Most educated American liberals, however, believe simply being progressive makes them, by default, the nation's saviors -- morally and intellectually right in all things. As proof, they read more and, allegedly, are more open minded than most conservatives, except when it comes to their daughter dating a redneck named Ernest who lives in a trailer court behind the strip mall. They are certainly among the educated class in a country known for its lousy schools and a dull, sated and unquestioning public. Education and access to education are now our fundamental class delineators. Higher education is now for the privileged. And that privilege, almost regardless of profession or career, is a future that depends on government. Liberal or conservative, it matters little. In fact, this privileged class votes Democratic more predictably than the working class, Hispanics or Blacks.

So when educated liberals look up from their copy of The Nation or the Jon Stewart show, they behold a chilling sight: Beefy mobs waving teabags and demanding tax cuts to help pay for new schools and bridges, Sarah Palin emerging from the ashes of the McCain campaign to become the high priestess of the uncurried tribes, with a Mormon named Glenn Beck exhorting millions of fundamentalists to seize the country. They feel that something has gone terribly wrong with America.

Immediately they conclude that it is the American people's fault through their backwardness, incomprehension and misdirected anger, and that maybe it serves them right for not rallying behind the flying progressive standard. (I've been plenty guilty of this myself over the years, and am now a recovering American liberal, well on my way not to conservatism, but toward a strumpetocracy, government by strumpets. It's a real word, Google it.) Not that the progressive flag was actually flying; American liberals threw down their standard 40 years ago in the rush for comfortable technical, teaching and administrative jobs in government, universities and non-profits. "Ah yes," they wailed, the people have let us down. They are absolutely disgusting!" liberals agreed. And they still agree. Read the comments on Huffington Post or Daily Kos.

Or look at the arrogance of Barack Obama's characterization of American heartlanders "clinging to God and guns." Which we do. However, implicit in his statement was that both God and guns are indicators of an ignorant loser class. When opponents scalded him for his remarks, he justified them by pointing out he had said, "what everybody knows is true." Meaning everybody in his class, the educated liberal class. Hard to believe their predecessors were the point men and women for the Scopes trial, the eight-hour day, unions, anti-McCarthyism, Cesar Chavez, Negro civil rights.

Big dogs eat first

The ruling elite stays in power through the patronage both parties offer their supporters. They hang onto or follow their party's leaders much the same as remoras cling to big sharks, and pilot fish accompany sharks, happy to get the leftovers. Both parties provide their activists and followers with livelihoods, through programs or legislation that just happen to make the rich richer.

One good example is the psychologists, doctors and social workers who initiate the process of getting half the country on anti-depressants or mood stabilizers, a term that should scare the hell out of anyone who grasps the concept of the corporate state. They get their jobs through government funding, or research that defines behaviors as illnesses requiring powerful psychoactive drugs.

One new favorite is ODD, oppositional defiant disorder, in which children act like -- surprise, surprise -- the young assholes that children can sometimes be. Teenage rebellion becomes a psychological disorder. Diagnostic manual symptoms include "often argues with adults," an unheard of behavior of teenagers calling for antipsychotics such as Risperidone. Side effects of Risperidone include a mild speed like buzz, a super erection lasting hours, lactation and suicidal tendencies. Phew!

Big Pharma makes billions more in the name of alleviating the people's suffering. Obviously many millions are indeed suffering, but if that is the case, then American society is suffering. Never will it be asked publicly just what psychic anguish our society is suffering from. Because the answer is capitalist industrial commodity disease, and the psychic pathology of Americaness. That would mean consulting Mr. Marx, who predicted much of it, or Arthur Barsky, who brought the definition up to date.

For Americans, self-examination is not just rare, it is nonexistent, which one source of our pathology. Missing from our national character is love of the common good, and our collective civic responsibility toward one another. But if we acknowledged collective responsibilities to the individual members of our society, then we would have to deal with the issue of class in this country. Better to medicate the entire nation. To do that, you need big government.

In the process, the already rich get richer and the rest of the middle class commissariat becomes more dependent upon the rich. As conservative editor and writer Angelo M. Codevilla, pointed out in a July 2010 article: "By taxing and parceling out more than a third of what Americans produce, through regulations that reach deep into American life, our ruling class is making itself the arbiter of wealth and poverty." A third is more than enough to tip the scales at their will.

Keep ‘em dazzled with foot work

Meanwhile, there are the rest of us. That great throng of squawking, family loving folks, professionals and peasants alike, libertarians, patriots, people who worship god and those who loath religion -- people who still believe that hard work is the road to success despite the evidence, people who know differently because they sell used cars or work for the US Post Office -- citizens who rightfully suspect that government taxes merely feed the beast, or who believe, again rightly, that no politician truly represents their interests, and that the government is now in the business of social engineering for economic purposes. Fundamentalist Christians, gays, small businessmen, Hispanic Americans, organic farmers, pro-lifers and abortion supporters, union workers in the North and Southern anti-unionists, school teachers and stump preachers -- we all feel threatened by our government.

At the same time, in order to keep revolution at bay, and the military in cannon fodder and defense industry in contracts, we have been heavily indoctrinated to believe America leads the world in all things, and that the rest of mankind lives less prosperous, less free lives, coveting our "lifestyle." In short, they are lesser people.

Still though, we have in common that none of us like the idea of a ruling class. We did not from the very beginning. Yet, we no longer take effective action, because it has become impossible to identify what we might do to change anything. Instead, we react to events. That is what the ruling class wants, because if we are reactive, then outcomes can be controlled by controlling the stimuli. Keep 'em dazzled with foot work. So the stimuli keep coming at us faster than we can think. And they are presented as fate, or the result of "fast changing world events," or a banking collapse no one could have predicted -- things to which we must respond immediately. Most of us just give up. Which again, is what the ruling class wants us to do -- become a uniformly pliant mass.

Because the revolutionary destruction of the current economic system, bad as it is, would crash the country's economy even more quickly than the current process of theft, we are not likely to see an outright revolution that overthrows the ruling class. Look at the sorry assed "Tea Party Revolution," which will have to be allied with the GOP (which its backstage leadership has been anyway) in 2012 if it wants to be even a small factor. Media noise about the Tea Party doth not a revolution make, and it certainly does not overthrow the ruling class, who do not mind the wrath of the rabble, so long as it does not get in the way of the money.

And besides, the ruling class holds all the money, not to mention the media that informs the populace as to what is going on in our country. It controls our health care, our banking and retirement funds. It controls our education or lack of education, and it controls the price, quantity and quality of the food we eat. It controls the quality of the air we breathe, and soon, through pollution credits, even the price they will pay for that air. Most importantly, it holds concentrated legal and governmental authority, not to mention the machinery of both parties to grant itself more authority.

In the face of all this stands a very diverse public, which regardless of what some might claim behind a few beers, is not about to take up arms or use force to unseat the ruling class. When your life and your family are so utterly controlled by persons and forces that you cannot even see, you don't take such risks. That's not gutlessness. It's common sense.

Therefore, you are left with a rigged game called legislative action. This is an invisible power process, masked by another process called public relations strategy, which feeds it into yet another process called media, that makes "news decisions," as to what you need to hear or see. And there's plenty you don't need to hear. For instance, NPR, the New York Times and thousands of other outlets refuse to use the word torture to describe waterboarding, preferring instead "aggressive interrogation methods," unencumbered interrogation, free interrogation, or similar euphemisms. NPR's justification for sugarcoating US torture is, ""the word torture is loaded with political and social implications."

Ya think?

Truth is a hard road to travel

After decades of hyper-militant consumerism and its attending alienation, and a national consciousness spun from pure capitalist bullshit and mirrors, it is testimony to the American people that they can still see to piss straight, much less recognize any sort of truth whatsoever. Yet, a portion of Americans are beginning to grasp the truth about what has happened to their country -- that it has been bought and paid for by an elite class in a nation that is supposed to be classless. They are beginning to realize that, when it comes to actually governing our country, we are powerless as individuals -- even members of the political class -- and serve the overall will of its true owners. It's been that way so long we've become conditioned to accept it as a natural state, something we cannot change, and do not even know how to question, because, like the atmosphere, it's just there.

The higher truth is something we recognize when we encounter it. We may not have the right words, or all the facts, but we can feel it in our bones. Intuition is the first glimmer in the distance. It goes unsaid that we always have the choice of not looking in truth's direction, or not looking for it at all. Seldom is it a pleasant sight, which is the chief sign that it is truth. Even the best of it arrives to the sound of ominous bells.

I think about that young reader, Brent B., who takes time to email me now and then. Today he wrote, summarizing the only thing of which I am certain:

It's a hard thing to know the truth in this world, it's like something inside of you dies, but sometimes you still have to know it.

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Posted: Aug 28, 2010 6:13pm
Jul 8, 2010

 Today I feel ashamed to be a Nebraskan. After Monday's vote (June 21) in Fremont it is clear that many people of this state wish to position us alongside Arizona as a beacon of intolerance and bigotry. Such positioning will hurt every Nebraskan in the long run. The new ordinance - which bans the harboring, hiring of and renting to undocumented immigrants - is unenforceable, economically wasteful and as the wave of impending lawsuits will prove, unconstitutional. More importantly, it is morally wrong. Like Arizona's SB1070, Ordinance No. 5165 is motivated primarily by racism. I wish the people of Fremont would just come out and say that they would prefer to live in an all-white town. While many attempts have and will be made to disguise this deplorable reality, it is disingenuous to pretend this is about anything other than skin color. The ordinance will do nothing to solve Fremont's imagined illegal immigration problem or change their already low unemployment and crime rates. What it will do is create more divisiveness and tension in their community. It sends a clear message to all Hispanic people, citizens or not, that they are not welcome in Nebraska. One of the arguments made by supporters of the ordinance is based on the assumption that most immigrants in Fremont are undocumented workers who enjoy the unfair advantage of not paying taxes. This assumption is completely false. To begin with, the majority of immigrants who work at the Hormel and Fremont beef plants (which ironically lie outside the measure's jurisdiction) are here working legally, with federally provided ID numbers. They most certainly do pay taxes. The smaller population who are illegal workers are using false or stolen social security numbers, and many are in fact paying into the system without any real prospect of benefiting from services like unemployment, because they live in fear of scrutiny of their legal status. Fear is the key word here. The truth of it is, the voters of Fremont don't so much want their Hispanic neighbors to leave outright, taking with them much of the economic growth the town has seen in the past decade, but rather become invisible and live in constant fear of their superior white neighbors. Do as you're told or else. One telltale sign of this is in the hiring section of the new law, which makes an exception to the ban for "the intermittent hiring of casual labor for domestic tasks." Essentially what the voting majority in Fremont is saying to their Latino population is, clean our toilets and mow our lawns, but stay in your place. They are not fit to rent a home but they are fit to clean one. This law is even more radical than Arizona's, in that it not only gives local police, but private citizens as well, free rein to intimidate and discriminate against their fellow citizens or non-citizens purely on the basis of their appearance and presumed legal status. It deputizes any average Joe as an ICE agent charged with keeping the streets free from any signs of diversity or culture that is not of Anglo descent, encouraging people to act out of suspicion and ignorance. What Kris Kobach (the Kansas-based author of both the Fremont and Arizona laws) and those like him ultimately want to create is a New American Apartheid system where the immigrant is a subhuman player in society: a person with few-to-no rights, whose sole purpose is to service the interests of corporate America and the white population, and who can be disposed of through detention or deportation at a moment's notice. It is class warfare, pure and simple. This line of thinking is an evil and pervasive magic, and the people of Fremont are the latest to fall under its spell. The new law is a black eye on their town and our state. It is embarrassing. It is wrong. - Conor Oberst 08 Jul 2010

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Posted: Jul 8, 2010 1:25pm
Jul 1, 2010

The United States, locked in the kind of twilight disconnect that grips dying empires, is a country entranced by illusions. It spends its emotional and intellectual energy on the trivial and the absurd. It is captivated by the hollow stagecraft of celebrity culture as the walls crumble. This celebrity culture giddily licenses a dark voyeurism into other people’s humiliation, pain, weakness and betrayal. Day after day, one lurid saga after another, whether it is Michael Jackson, Britney Spears or John Edwards, enthralls the country … despite bank collapses, wars, mounting poverty or the criminality of its financial class.

The virtues that sustain a nation-state and build community, from honesty to self-sacrifice to transparency to sharing, are ridiculed each night on television as rubes stupid enough to cling to this antiquated behavior are voted off reality shows. Fellow competitors for prize money and a chance for fleeting fame, cheered on by millions of viewers, elect to “disappear” the unwanted. In the final credits of the reality show America’s Next Top Model, a picture of the woman expelled during the episode vanishes from the group portrait on the screen. Those cast aside become, at least to the television audience, nonpersons. Celebrities that can no longer generate publicity, good or bad, vanish. Life, these shows persistently teach, is a brutal world of unadulterated competition and a constant quest for notoriety and attention.

Our culture of flagrant self-exaltation, hardwired in the American character, permits the humiliation of all those who oppose us. We believe, after all, that because we have the capacity to wage war we have a right to wage war. Those who lose deserve to be erased. Those who fail, those who are deemed ugly, ignorant or poor, should be belittled and mocked. Human beings are used and discarded like Styrofoam boxes that held junk food. And the numbers of superfluous human beings are swelling the unemployment offices, the prisons and the soup kitchens.

It is the cult of self that is killing the United States. This cult has within it the classic traits of psychopaths: superficial charm, grandiosity and self-importance; a need for constant stimulation; a penchant for lying, deception and manipulation; and the incapacity for remorse or guilt. Michael Jackson, from his phony marriages to the portraits of himself dressed as royalty to his insatiable hunger for new toys to his questionable relationships with young boys, had all these qualities. And this is also the ethic promoted by corporations. It is the ethic of unfettered capitalism. It is the misguided belief that personal style and personal advancement, mistaken for individualism, are the same as democratic equality. It is the nationwide celebration of image over substance, of illusion over truth. And it is why investment bankers blink in confusion when questioned about the morality of the billions in profits they made by selling worthless toxic assets to investors.

We have a right, in the cult of the self, to get whatever we desire. We can do anything, even belittle and destroy those around us, including our friends, to make money, to be happy and to become famous. Once fame and wealth are achieved, they become their own justification, their own morality. How one gets there is irrelevant. It is this perverted ethic that gave us investment houses like Goldman Sachs … that willfully trashed the global economy and stole money from tens of millions of small shareholders who had bought stock in these corporations for retirement or college. The heads of these corporations, like the winners on a reality television program who lied and manipulated others to succeed, walked away with hundreds of millions of dollars in bonuses and compensation. The ethic of Wall Street is the ethic of celebrity. It is fused into one bizarre, perverted belief system and it has banished the possibility of the country returning to a reality-based world or avoiding internal collapse. A society that cannot distinguish reality from illusion dies.

The tantalizing illusions offered by our consumer culture, however, are vanishing for most citizens as we head toward collapse. The ability of the corporate state to pacify the country by extending credit and providing cheap manufactured goods to the masses is gone. The jobs we are shedding are not coming back, as the White House economist Lawrence Summers tacitly acknowledges when he talks of a “jobless recovery.” The belief that democracy lies in the choice between competing brands and the accumulation of vast sums of personal wealth at the expense of others is exposed as a fraud. Freedom can no longer be conflated with the free market. The travails of the poor are rapidly becoming the travails of the middle class, especially as unemployment insurance runs out. And class warfare, once buried under the happy illusion that we were all going to enter an age of prosperity with unfettered capitalism, is returning with a vengeance.

America is sinking under trillions in debt it can never repay and stays afloat by frantically selling about $2 billion in Treasury bonds a day to the Chinese. It saw 2.8 million people lose their homes in 2009 to foreclosure or bank repossessions – nearly 8,000 people a day – and stands idle as they are joined by another 2.4 million people this year. It refuses to prosecute the Bush administration for obvious war crimes, including the use of torture, and sees no reason to dismantle Bush’s secrecy laws or restore habeas corpus. Its infrastructure is crumbling. Deficits are pushing individual states to bankruptcy and forcing the closure of everything from schools to parks. The wars in Iraq and Afghanistan, which have squandered trillions of dollars, appear endless. There are 50 million Americans in real poverty and tens of millions of Americans in a category called “near poverty.” One in eight Americans – and one in four children – depend on food stamps to eat. And yet, in the midst of it all, we continue to be a country consumed by happy talk and happy thoughts. We continue to embrace the illusion of inevitable progress, personal success and rising prosperity. Reality is not considered an impediment to desire.

When a culture lives within an illusion it perpetuates a state of permanent infantilism or childishness. As the gap widens between the illusion and reality, as we suddenly grasp that it is our home being foreclosed or our job that is not coming back, we react like children. We scream and yell for a savior, someone who promises us revenge, moral renewal and new glory. It is not a new story. A furious and sustained backlash by a betrayed and angry populace, one unprepared intellectually, emotionally and psychologically for collapse, will sweep aside the Democrats and most of the Republicans and will usher America into a new dark age. It was the economic collapse in Yugoslavia that gave us Slobodan Milosevic. It was the Weimar Republic that vomited up Adolf Hitler. And it was the breakdown in Tsarist Russia that opened the door for Lenin and the Bolsheviks. A cabal of proto-fascist misfits, from Christian demagogues to loudmouth talk show hosts, whom we naïvely dismiss as buffoons, will find a following with promises of revenge and moral renewal. And as in all totalitarian societies, those who do not pay fealty to the illusions imposed by the state become the outcasts, the persecuted.

The decline of American empire began long before the current economic meltdown or the wars in Afghanistan and Iraq. It began before the first Gulf War or Ronald Reagan. It began when we shifted, in the words of Harvard historian Charles Maier, from an “empire of production” to an “empire of consumption.” By the end of the Vietnam War, when the costs of the war ate away at Lyndon Johnson’s Great Society and domestic oil production began its steady, inexorable decline, we saw our country transformed from one that primarily produced to one that primarily consumed. We started borrowing to maintain a level of consumption as well as an empire we could no longer afford. We began to use force, especially in the Middle East, to feed our insatiable thirst for cheap oil. We substituted the illusion of growth and prosperity for real growth and prosperity. The bill is now due. America’s most dangerous enemies are not Islamic radicals but those who sold us the perverted ideology of free-market capitalism and globalization. They have dynamited the very foundations of our society. In the 17th century these speculators would have been hung. Today they run the government and consume billions in taxpayer subsidies.

As the pressure mounts, as the despair and desperation reach into larger and larger segments of the populace, the mechanisms of corporate and government control are being bolstered to prevent civil unrest and instability. The emergence of the corporate state always means the emergence of the security state. This is why the Bush White House pushed through the Patriot Act (and its renewal), the suspension of habeas corpus, the practice of “extraordinary rendition,” warrantless wiretapping on American citizens and the refusal to ensure free and fair elections with verifiable ballot-counting. The motive behind these measures is not to fight terrorism or to bolster national security. It is to seize and maintain internal control. It is about controlling us.

And yet, even in the face of catastrophe, mass culture continues to assure us that if we close our eyes, if we visualize what we want, if we have faith in ourselves, if we tell God that we believe in miracles, if we tap into our inner strength, if we grasp that we are truly exceptional, if we focus on happiness, our lives will be harmonious and complete. This cultural retreat into illusion, whether peddled by positive psychologists, by Hollywood or by Christian preachers, is magical thinking. It turns worthless mortgages and debt into wealth. It turns the destruction of our manufacturing base into an opportunity for growth. It turns alienation and anxiety into a cheerful conformity. It turns a nation that wages illegal wars and administers offshore penal colonies where it openly practices torture into the greatest democracy on earth. And it keeps us from fighting back.

Resistance movements will have to look now at the long night of slavery, the decades of oppression in the Soviet Union and the curse of fascism for models. The goal will no longer be the possibility of reforming the system but of protecting truth, civility and culture from mass contamination. It will require the kind of schizophrenic lifestyle that characterizes all totalitarian societies. Our private and public demeanors will often have to stand in stark contrast. Acts of defiance will often be subtle and nuanced. They will be carried out not for short term gain but the assertion of our integrity. Rebellion will have an ultimate if not easily definable purpose. The more we retreat from the culture at large the more room we will have to carve out lives of meaning, the more we will be able to wall off the flood of illusions disseminated by mass culture and the more we will retain sanity in an insane world. The goal will become the ability to endure.

Chris Hedges, a Pulitzer Prize-winning reporter for the New York Times, is the author of several books including the best sellers War Is a Force That Gives Us Meaning and Empire of Illusion: The End of Literacy and the Triumph of Spectacle.

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Posted: Jul 1, 2010 1:13pm
Jun 10, 2010

“[T]he majority of politicians, on the evidence available to us, are interested not in truth but in power and in the maintenance of that power. To maintain that power it is essential that people remain in ignorance, that they live in ignorance of the truth, even the truth of their own lives. What surrounds us therefore is a vast tapestry of lies, upon which we feed.”– Harold Pinter, Nobel Lecture (Literature), 2005

The maintenance of the hierarchical structures that control our lives depends on Pinter’s “vast tapestry of lies upon which we feed.” Therefore the main institutions that embed us into the hierarchy, such as schools, universities, and mass media and entertainment corporations, have a primary function to create and maintain this tapestry. This includes establishment scientists and all service intellectuals in charge of “interpreting” reality.

In fact, the scientists and “experts” define reality in order to bring it into conformation with the always-adapting dominant mental tapestry of the moment. They also invent and build new branches of the tapestry that serve specific power groups by providing new avenues of exploitation. These high priests are rewarded with high class status.

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Posted: Jun 10, 2010 6:59pm
May 14, 2010

 Politics and Power

 Is it Patriotic to Manipulate Tea Party Malcontents?

michael_hogan_bio.jpgOver at The Atlantic, Michael Kinsley has some words of wisdom for those inclined to over-interpret the Tea Party mandate:

Some people think that what unites the Tea Party Patriots is simple racism. I doubt that. But the Tea Party movement is not the solution to what ails America. It is an illustration of what ails America. Not because it is right-wing or because it is sometimes susceptible to crazed conspiracy theories, and not because of racism, but because of the movement’s self-indulgent premise that none of our challenges and difficulties are our own fault.

I might add that these angry souls are apparently being manipulated into worrying about a "problem" that bothered the Republicans under George W. Bush not a whit: namely, the looming deficit that supposedly will capsize our economy according to the newly minted Grecian formula unless Barack Obama has his hands forcibly removed from the nation’s collective cash register. At least one V.I.E. (Very Important Economist) says the real threat of the deficit is “zero.” Here is a snippet from Ezra Klein’s recent interview with economist James Galbraith (which I came across anger-posed-by-deficit-is-zero" rel="nofollow">via Daily Kos):

EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It’s not overstated. It’s completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn’t be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn’t rational. And if the market isn’t rational, there’s no point in designing policy to accommodate the markets because you can’t accommodate an irrational entity.

If this is the case, and if all the recent hand-wringing about the deficit is so much politically motivated hot air, then there is some real support for the entertaining (if drastically partisan) version of events Obama laid out at his richly remunerative fundraiser in New York last night. (Couples paid between $30,000 and $50,000 apiece to be there.)

You would have thought at a time of historic crisis that Republican leaders would have been more willing to help us find a way out of this mess--particularly since they created the mess.... We got our mops and our brooms out, we’re cleaning stuff out, and they’re sitting there saying, “Hold the broom better.” “That’s not how you mop.” Don’t tell me how to mop. Pick up a mop! Do some work on behalf of the American people to solve some of these problems.

But that wasn’t their strategy; it was not their strategy from day one. And I’m not making this up. This is public record. They’ve said in interviews: We made a political decision. We stood nothing to gain from cooperating. We knew things were going to be bad. And we figured, if we didn’t do anything and if it didn’t work out so well, maybe the other side would take the blame.

They’ve done their best to gum up the works; to make things look broken; to say no to every single thing. That was the attitude they had when it came to pulling our economy out of a crisis. That was the attitude they had when it came to making sure that families and businesses finally got the security of health care in this country. That’s been the attitude on any number of challenges that we faced. Their basic attitude has been: “If the Democrats lose, we win.”

So after they drove the car into the ditch, made it as difficult as possible for us to pull it back, now they want the keys back. No! You can’t drive!

Republicans are playing a dangerous game. It may well work in the short run, helping them make substantial gains in the House and Senate. They may even reclaim majorities in one or both chambers. But at some point the strategy of stirring up resentment by spreading politically convenient fictions—the deficit is going to sink America, the bailout didn’t work, Obama is a socialist, the borders can be patrolled—will have to be abandoned.

My sincere hope is that, once they do reclaim control of a few levers of power, Republicans have the courage to perform the breathtaking 180’s that will be necessary to address the nation’s real problems. The alternative would be some very bad driving indeed.

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Posted: May 14, 2010 5:56pm
Mar 29, 2010

I just ran across this article about one of my former professors at UNO.  I took his class in International Studies which largely focused on Afghanistan. This was in 1988, during the days of the Soviet occupation.  There were quite a few Afghan students at UNO at the time, and they really stood out, wearing their traditional garb.  Dr Gouttierre really loved the people of Afghanistan.

In Nebraska, a Center for Afghanistan Studies - and for controversy Critics say the institute at the University of Nebraska at Omaha has gone too far in its work with the U.S. military, the State Department and even the Taliban. Its director makes no apologies.,0,1848885,full.story

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Posted: Mar 29, 2010 4:51am
Mar 26, 2010

By Barry Ritzholz

The Big Picture Blog Archive

As noted last night, Alan Greenspan has blamed the crisis on a lack of regulation rather than ultra-low rates. (You can find his Brookings institute paper The Crisis here).

While the lack of regulatory enforcement — ironically, mostly notably by the Greenspan Fed — was no doubt a large part of the problem, his exoneration of ultra low rates is belied by history.

I detail all of this elsewhere; but perhaps the impact of low rates would be more easily understandable to the Maestro if we put it into numerical bullet point form:

1. Starting in January 2001, the FOMC began lowering rates, eventually to 1%. They kept rates below 2% for 36 months, and at 1% for over a year. This was unprecedented.

2. While these rates had myriad effects, lets focus on just two: The impact on Housing, and on global bond managers.

3. Since homes are (typically) a leveraged credit purchase, lowering the cost of that credit has an inverse effect on prices — i.e., cheaper mortgages = more expensive houses. Since most people budget monthly, carrying costs are more important than actual purchase prices. Hence, a big drop in interest rates can cause a spike in home prices, with monthly payments remaining fairly similar.

Bottom line: Ultra low rates were the initial fuel sending home prices higher.

4. At the same time, bond managers were scrambling for yield. Pension funds, trusts, foundations require a certain annual gain, and without it, they have issues. Note that most of these managers by their own charters cannot purchase junk, they can only buy investment grade paper.

5. Wall Street had been securitizing collateralized debt for years. They turned credit cards, student loans, auto financing, and of course, mortgages into paper.

6. Making loans to people with weaker credit scores, lower incomes, or more debt was a risky proposition, and hence, generated higher yields for that risk. By collateralizing these subprime mortgages, Securitizers could generate higher yielding paper for the managers of bond funds. And because the rating agencies — Moody’s, S&P, and Fitch were totally corrupt — the securitizers could purchase AAA ratings. Hence, all manner of unqualified junk paper could be sold to these funds that were only allowed to purchase investment grade paper.

Here is the first point where lack of oversight comes in (vis-à-vis the ratings agencies). But we never would have gotten to that issue BUT FOR the ultra low rates.

7. The triple AAA rated junk paper sells well, increasing demand for more of it. Huge Wall Street demand for more junk to feed into the maw of the securitization beast compels all manner of non-bank lenders to issue even more sub-prime mortgages. And since they was a finite number of people who afford mortgages, they got creative with ways to make mortgages even cheaper. First came the 2/28 variable loans, with a cheap teaser rate the first two years.

Then came Interest Only (I/O), where there was no principal repayment.  I called these loans “Rent with an option to default.”  Lastly, we had the Negative Amortization (Neg/Am) mortgages, where the borrower paid less than the monthly interest charges, with the difference added to the principal owed. Hence, with each passing month, the mortgagee actually owed more on the house than the month before, rather than less. These loans defaulted in enormous numbers.

8. The lack of regulation of these non bank lenders was a key factor. Ironically, it was the Fed’s job to regulate them, and moving beyond irony to surreal absurdity, it was then Fed Chair Alan Greenspan who called these non bank lenders “innovators” and refused to regulate them. (This was around the same time, with rates at record low levels, when he was advising people go for variable mortgages). Their innovative business model was lend-to-sell-to-securitizers.

9. Numerous states had on their books anti-predatory lending laws. These made it illegal to make loans to people who could reasonably not afford them (nor could they charge usurious rates or excessive fees that would make defaults much more likely).

The Bush White House issued its doctrine of “Federal Pre-emption,” which essentially told the States to step out of the way of these lenders. The data shows that states with anti-predatory lending laws had much lower defaults and foreclosures than states that did not; the Federal Pre-emption significantly raised default rates in these states.

Hey, where were all those States right advocates back then? My Spidey-Sense is tingling! I suspect these new states rights people are not at all concerned with states rights at all, and are more likely little more than hypocritical partisans.

10. The lack of regulatory enforcement was a huge factor in allowing the credit bubble to inflate, and set the stage for the entire credit crisis. But it was intricately interwoven with the ultra low rates Alan Greenspan set as Fed Chair.

So while he is correct in pointing out that his own failures as a bank regulator are in part to blame, he needs to also recognize that his failures in setting monetary policy was also a major factor.

In other words, his incompetence as a regulator made his incompetence as a central banker even worse.


Class dismissed.

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Posted: Mar 26, 2010 10:32pm
Mar 13, 2010
The Business Roundtable, an organization representing Fortune 500 CEOs, is at the heart of the Economic Elite's power center.
March 12, 2010  |  

Editor's Note: The following is Part III of David DeGraw's report, "The Economic Elite vs. People of the USA." AlterNet previously ran Part I and Part II.

DeGraw writes in the introduction to his report:

"It has now become evident to a critical mass that the Republican and Democratic parties, along with all three branches of our government, have been bought off by a well-organized Economic Elite who are tactically destroying our way of life. The harsh truth is that 99% of the US population no longer has political representation. The US economy, government and tax system is now blatantly rigged against us.Current statistical societal indicators clearly demonstrate that a strategic attack has been launched and an analysis of current governmental policies prove that conditions for 99% of Americans will continue to deteriorate. The Economic Elite have engineered a financial coup and have brought war to our doorstep. . . and make no mistake, they have launched a war to eliminate the US middle class."


Part III: Exposing Our Enemy: Meet the Economic Elite

I don’t view the Economic Elite as a small group of men who meet in secrecy to control the world. They do feature elements of conspiracy and are clearly composed of secretive organizations like the Bilderberg Group -- this is not a conspiracy theory, this is a conspiracy fact - but as a whole the Economic Elite are primarily united by ideology. They’re made up of thousands of individuals who subscribe to an ideology of exploitation and the belief that wealth and resources need to be concentrated into the fewest hands possible (theirs), at the expense of the many.

That being said, there are some definite lead players in this group and it is important that we are not too vague and expose the individuals who publicly lead them. Focusing on the fundamental structure of the US economy, we have people like Hank Paulson, Tim Geithner, Ben Bernanke, Robert Rubin, Larry Summers, Alan Greenspan, Lloyd Blankfein, Jamie Dimon, John Mack, Vikram Pandit,and  John Thain.

In total, the Economic Elite are made up of about 0.5% of the US population. At the center of this group is the Business Roundtable, an organization representing Fortune 500 CEOs that is also interlocked with several lead elite organizations. Most Americans have never heard of the Business Roundtable. However, in my analysis, it is the most influential and powerful Economic Elite organization.

“The Business Roundtable joined the Business Council at the heart of both the corporate community and the policy-formation network and now has the most powerful role…. The Roundtable’s interlocks with other policy groups and with think tanks are presented [below].” -– G. William Domhoff, Who Rules America?

The Roundtable’s first year of operation was 1972, which coincided with the beginning of the CEO salary explosion, and has been the driving force behind the unprecedented concentration of wealth since their inception. Their dominance over the US economy and government is unparalleled. Their members are a Who’s Who of everything that is wrong with our economy. Here is a partial list of some of their lead members:

——-Lloyd C. Blankfein, Goldman Sachs
——-James Dimon, JPMorgan Chase & Co.
——-James P. Gorman, Morgan Stanley
——-Vikram S. Pandit, Citigroup, Inc.
——-Brian T. Moynihan, Bank of America
——-Brendan McDonagh, HSBC
——-Robert W. Selander, MasterCard Incorporated
——-Kenneth I. Chenault, American Express Company
——-Rupert Murdoch, News Corporation
——-Glenn A. Britt, Time Warner Cable Inc.
——-Philippe Dauman, Viacom, Inc.
——-Jeffrey R. Immelt, General Electric Company
——-Brian L. Roberts, Comcast Corporation
——-Steven A. Ballmer, Microsoft Corporation
——-John T. Chambers, Cisco Systems, Inc.
——-Randall L. Stephenson, AT&T Inc.
——-Ivan G. Seidenberg, Verizon Communications
——-David G. DeWalt, McAfee, Inc.
——-Steven R. Loranger, ITT Corporation
——-Paul T. Hanrahan, AES Corporation, The
——-Riley P. Bechtel, Bechtel Group, Inc.
——-W. James McNerney , Boeing Company, The
——-Rex W. Tillerson, Exxon Mobil Corporation
——-Marvin E. Odum, Shell Oil Company
——-John S. Watson, Chevron Corporation
——-James J. Mulva, ConocoPhillips
——-John B. Hess, Hess Corporation
——-James E. Rogers Duke Energy Corporation
——-J. Larry Nichols, Devon Energy Corporation
——-Ronald A. Williams, Aetna Inc.
——-David Cordani, CIGNA
——-Jeffrey B. Kindler , Pfizer Inc.
——-Angela F. Braly, WellPoint, Inc.
——-John C. Lechleiter, Eli Lilly and Company
——-Edward B. Rust, Jr., State Farm
——-Andrew N. Liveris, Dow Chemical
——-James W. Owens, Caterpillar Inc.
——-Ellen J. Kullman, DuPont
——-Edward E. Whitacre Jr., General Motors Company
——-Michael T. Duke, Wal-Mart Stores, Inc.

The Business Roundtable is the most powerful activist organization in the United States. Their leaders regularly lobby members of Congress behind closed doors and often meet privately with the President and his administration. Any legislation that affects Roundtable members has almost zero possibility of passing without their support.

For three major examples, look at healthcare and financial reform, along with the military budget. The healthcare reform bill devolved into what amounts to an insurance industry bailout and was drastically altered by Roundtable lobbyists representing interests like WellPoint, Aetna, Cigna, Pfizer, Eli Lilly and Johnson & Johnson. Obama and Congress are trying to please the Roundtable with a bill that supports their interests. This led to the dropping of the public-option put forth in the House bill. However, when it came to finishing the bill, Roundtable members began to walk away from the process. That’s the real reason why the reform bill has stalled. Obama met with the Roundtable on February 24th, in hopes of getting healthcare reform back on track. After that meeting, he held a bipartisan healthcare meeting with members of Congress.

Also addressed in Obama’s  meeting with the Roundtable are issues concerning financial reform. Almost every aspect of financial reform has been D.O.A. thanks to Roundtable lobbyists representing the interests of Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup, Bank of America, HSBC, Master Card and American Express. They even pushed to make sure Ben Bernanke was reconfirmed as the head of the Federal Reserve and they have also guided Obama into focusing on deficit reduction, now that their member companies are healthy again and making record profits after receiving trillions in government subsidies. The Roundtable played a pivotal role in the appointment of Hank Paulson, formerly the CEO of Roundtable member Goldman Sachs, who replaced Roundtable member John Snow as US Treasury Secretary. The Roundtable also strongly lobbied on behalf of current Treasury Secretary Tim Geithner and White House National Economic Council Director Larry Summers. Although there has been recent talk of Geithner being replaced at the Treasury, the lead choice to replace him is Jamie Dimon, Roundtable member and CEO of JP Morgan Chase.

The drastic rise in military spending is also a result of Roundtable lobbyists pushing the interests of large military companies like Boeing and Bechtel, along with the largest oil companies like ExxonMobil, Shell, Hess and Chevron.

The Roundtable tells politicians what they want done, and the politicians do it. At times, Roundtable members even write the laws themselves. On financial reform alone, those representing Wall Street firms gave “$42 million to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders.” During the 2008 election cycle, they gave $155 million: $88 million to Democrats and $67 million to Republicans. Keep in mind, this is the spending on just their financial reform initiative. When it came to health reform, they gave even more.

When it comes to getting elected, over 90% of the time the candidate who simply spends more money on their campaign wins the election. The Roundtable and politicians recognize this fact, so the overwhelming majority of current elected officials relied heavily on campaign funding from Roundtable members, including President Obama.

Shortly after Obama’s inauguration he held a meeting with Roundtable members at the St. Regis Hotel. The president of the Business Roundtable is John J. Castellani. Throughout the first nine months of Obama’s presidency, Castellani met with him at the White House more than any other person, with the exception of Chamber of Commerce CEO Tom Donohue. If you look at the records of people who have spent the most time with Obama in the White House, other than these two, another frequent visitor is Edward Yingling, the president of the American Bankers Association.

These organizations - the Business Roundtable, Chamber of Commerce and the American Bankers Association - along with the Federal Reserve, a secretive quasi-government private institution, form the center of the Economic Elite’s power structure. Since the bailout, the Federal Reserve has been working closely with private firm BlackRock. Due to this relationship, BlackRock has emerged as the world’s largest money manager and now manages more assets than the Federal Reserve. They also “manage many of the Treasury Department’s big investments.”

On a global level, you have economic institutions like the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank, and international treaties like NAFTA. These organizations already form a de facto world government that has rights beyond our constitutional rights and national sovereignty. If the WTO makes a ruling that goes against US law, the WTO ruling supersedes US law and wins out.

Here is how Global Exchange explains these global institutions:

“The World Trade Organization is the most powerful legislative and judicial body in the world. By promoting the ‘free trade’ agenda of multinational corporations above the interests of local communities, working families, and the environment, the WTO has systematically undermined democracy around the world…. Unlike United Nations treaties, the International Labor Organization conventions, or multilateral environmental agreements, WTO rules can be enforced through sanctions. This gives the WTO more power than any other international body. The WTO’s authority even eclipses national governments.

[World Bank and International Monetary Fund (IMF)]

When the Bank and the Fund lend money to debtor countries, the money comes with strings attached. These strings come in the form of policy prescriptions called ’structural adjustment policies.’ These policies—or SAPs, as they are sometimes called—require debtor governments to open their economies to penetration by foreign corporations, allowing access to the country’s workers and environment at bargain basement prices. Structural adjustment policies mean across-the-board privatization of public utilities and publicly owned industries. They mean the slashing of government budgets, leading to cutbacks in spending on health care and education…. And, as their imposition in country after country in Latin America, Africa, and Asia has shown, they lead to deeper inequality and environmental destruction.”

In addition to dominating our political and economic system, the Economic Elite have already created their own private military. Their private military is now more powerful than the US military. As mentioned earlier, private mercenaries now outnumber US soldiers and receive the lion’s share of military spending.

Corporations like SAIC, Blackwater, Bechtel, Raytheon and Halliburton are composed of the most elite worldwide intelligence and military officers. These are the highly profitable and powerful entities that the Economic Elite turn to when national militaries and intelligence agencies - like the CIA, FBI or other government run entities - can’t get the job done.

For instance, SAIC, a “stealth company” that most people have never heard of, is considered to be the brains of the entire US intelligence apparatus, more powerful than the much more popularly known CIA, NSA and FBI - all agencies that SAIC is deeply intertwined with. I urge you to research SAIC to get a crash course in how the true power structure functions. You can start by reading an excellent investigative report by Donald L. Barlett and James B. Steele titled, “Washington’s $8 billion shadow.”

The Economic Elite dominate US intelligence and military operations. Other than the obvious geo-strategic reasons, the never-ending and ever-expanding War on Terror’s objective is to drain the US population of more resources and further rob US taxpayers, while using our tax money to create a private military that is more powerful than the US military.

I think any logical person can see the ominous implications of having such a vast and powerful private military and intelligence complex, created for and used, in secrecy, by the Economic Elite. Outside of the blatant economic policy attacks, heavily armed and sophisticated covert powers led by small groups of Economic Elite are now a serious risk and present danger.

In conclusion, these economic and government policy forming organizations, along with their private military and intelligence corporations, form the core of the Economic Elite power structure.

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Posted: Mar 13, 2010 2:35pm


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Judy C.
, 1, 3 children
Omaha, NE, USA
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