Truthout: Thom Hartman on the Real Takers

The True Costs of Corporate Welfare

Tuesday, 30 December 2014 15:58By The Daily Take Team, The Thom Hartmann Program | Op-Ed

Walmart, a corporation that made $16 billion in net profits in 2013, is getting some $2.66 billion in government subsidies each year. (Image: Lance Page / truthout; Adapted: daliborlev, Kenneth Hynek )

Who should we really be drug testing?

Michigan Gov. Rick Snyder has signed a series of bills into law that will require some welfare recipients in Michigan to be drug-tested.

Meanwhile, other states are considering following in Rick Snyder’s footsteps.

Wisconsin Gov. Scott Walker is on the record saying that he also wants to make drug testing welfare recipients and applicants a law.

And, according to ThinkProgress, “In 2014, at least 18 states introduced proposals or addressed bills that would require some form of drug testing or screening for applicants for or recipients of public assistance.”

See more news and opinion from Thom Hartmann at Truthout here.

One of the main reasons why conservatives across the US are trying to pass welfare drug-testing laws is to shame and punish poor people. It’s really that simple. But they rationalize it by saying they need to “control government costs.”

Welfare programs in the United States include programs like the Women, Infants and Children program (WIC) and food stamps.

And, as Lou Colagiovanni over at Examiner.com points out, in 2012, a married person with one child making $50,000 per year paid just over $36 in taxes for “food and nutrition assistance” programs like food stamps and WIC.

That’s just 10 cents per day!

While conservatives will never admit it, welfare is a mind-bogglingly small expense and a very small piece of the pie.

On the other hand, the nation’s biggest welfare recipients – rich people and big corporations – are making out like bandits, because the welfare they take isn’t for food or housing – it’s to increase their profits and wealth.

As Paul Bucheit points out over at Common Dreams, the average US family pays a staggering $6,000 each year in subsidies to big business.

Think about that for a second.

Each year, you’re forking over around $6,000 of your hard-earned money to big banks, fossil fuel giants and massive transnational corporations that already rake in billions and billions of dollars in profits.

But you don’t see conservatives arguing against that.

So, where is all of that money going?

Of that $6,000, $870 goes to direct subsidies for corporations, including the likes of Exxon, Shell, BP and other fossil fuel giants that are taking our money and destroying our environment at the same time.

Meanwhile, hundreds more go to corporations as indirect subsidies.

Researchers at the University of Illinois and University of California-Berkeley found that US taxpayers pay a staggering $243 billion each year in indirect subsidies to the fast food industry alone.

That’s because the fast food industry pays its workers such low wages, and gives them such poor benefits, that “We The People” foot the bill for their health care, food and, in some cases, their housing and transportation.

And then there’s Walmart, the United States’ largest retailer.

In 2013, Walmart brought in a staggering $476 billion in revenue, netting some $16 billion in profits.

Every hour, that retailing giant takes in over $36 million, making just over $34,000 in profit every minute.

Yet, as Michael Snyder points out over at The Economic Collapse Blog,

“Wal-Mart’s low wages have led to full-time employees seeking public assistance. These are not the 47 percent, lazy, unmotivated bums. Rather, these are people working physical, often difficult jobs. They receive $2.66 billion in government help each year (including $1 billion in healthcare assistance). That works out to about $5,815 per worker. And about $420,000 per store.”

So, a corporation that made $16 billion in net profits in 2013 is getting some $2.66 billion in government subsidies each year.

That’s crazy.

If we’re serious about going after “welfare queens” in the US, to use Ronald Reagan’s phrase, then let’s start by going after the corporations and industries that use the Walmart business model of paying such low wages that their employees qualify for welfare benefits.

It’s unconscionable and morally reprehensible that a worker working for the largest retailer in the United States, or for a fast food giant, isn’t making enough money to survive and provide for their family.

We need to stop rewarding businesses for screwing over their employees.

That starts by raising the minimum wage to a point where giant corporations like Walmart can’t run this scam of a business model on the US public any more.

And while we’re at it, maybe we should drug-test a corporate executive or two.

This article was first published on Truthout and any reprint or reproduction on any other website must acknowledge Truthout as the original site of publication.

LUV News on the Free Market Scam

Readers will not be surprised to learn that the world’s 400 richest people increased their wealth by $92 billion during 2014.  This is the primary function of our government now, ensuring that the rich of the world get richer at any cost to the peasants.  That is why the USA provides them with a thousand foreign military bases.  They, after all, control the corporations which fund our elections.

Meanwhile, another story begins “In Mayor Bill de Blasio’s first year in office, the number of people living in homeless shelters rose to 58,913 — an all-time high,” despite the New York mayor’s attempt to remedy the situation.  The bankster scams gone awry by 2008, resulting in the bailout of banksters, has left millions without homes across the nation, and more millions unemployed (these, the government does not bail out).

Funneling so much money to 400 people leaves the rest of us struggling to find a way to fund government services, since, as billionaire Leona Helmsley so pointedly advised us, “only the little people pay taxes.”  So we privatize what used to be services, that they become profit sources for the rich, leaving services cut for increased profit.  The corpulent  governor of New Jersey, who apparently never missed a meal himself, is trying to privatize the water systems for New Jersey’s cities and counties.  Imagine what water will cost when the rich, who never have enough, profit from it.

In Texas, they have gone to the old feudal system of debtor prisons.  Q: “Why are you in jail?”  A: “I owe money.”  Q:  “Why don’t you pay your bills?”  A:  “Because I’m in jail.”  These folks made the mistake of not inheriting from robber barons, or they would be getting a piece of that $92 billion added to their vast fortunes.

Paul Buchheit has an excellent piece this morning titled “How American Corporations and the Super Rich Steal From the Rest of Us.”  Corporate media, genuflecting before the 400 richest who own them, see nothing amiss.

* * * *

One of the great scams of capitalism is the pretense of a “free market.”  We are raised in the Land of the Free to believe it is operated by a supernatural “invisible hand,” and that it is free of manipulation, as honest as could be.  When the capitalists tell me such things I get a firm grip on my wallet.

The last thing capitalists want is a free market– pay no attention to what they say, watch what they do.  Back at the turn of the twentieth century Republican Teddy Roosevelt wrapped their knuckles when they formed monopolies and there was some attempt to maintain competition with which to even up the playing field.  The capitalists got around that by buying more and more of the politicians, until the current era, when they own the White House, Capitol Bldg, and Supreme Court, lock, stock and barrel.  With this comes the laws, the treasury, and anything else they want.

To pretend competition in many areas there are two or three corporations which control a particular commodity.  To anybody who believes these few companies do not conspire I have a wonderful bridge in Brooklyn I will sell you at a bargain price.

In the following piece Mike Whitney takes us into the current manipulation of oil prices.  There has never been a free market on oil, nor anything else which brings massive profit.  John D. Rockefeller once controlled all US oil and about a fourth of the oil abroad.  One man.  That is capitalism working the way our ruling Forces of Greed intend for it to work.  Today it is a little more complicated.  —Jack Balkwill

Did the U.S. and the Saudis Conspire to Push Down Oil Prices?

Irreversible Decline?

by Mike Whitney

“Saudi oil policy… has been subject to a great deal of wild and inaccurate conjecture in recent weeks. We do not seek to politicize oil… For us it’s a question of supply and demand, it’s purely business.”

– Ali al Naimi, Saudi Oil Minister

“There is no conspiracy, there is no targeting of anyone. This is a market and it goes up and down.”

– Suhail Bin Mohammed al-Mazroui, United Arab Emirates’ petroleum minister

“We all see the lowering of oil prices. There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.”

– Russian President Vladimir Putin

Are falling oil prices part of a US-Saudi plan to inflict economic damage on Russia, Iran and Venezuela?

Venezuelan President Nicolas Maduro seems to think so. In a recent interview that appeared in Reuters, Maduro said he thought the United States and Saudi Arabia wanted to drive down oil prices “to harm Russia.”

Bolivian President Evo Morales agrees with Maduro and told journalists at RT that: “The reduction in oil prices was provoked by the US as an attack on the economies of Venezuela and Russia. In the face of such economic and political attacks, the nations must be united.”

Iranian President Hassan Rouhani said the same thing,with a slightly different twist: “The main reason for (the oil price plunge) is a political conspiracy by certain countries against the interests of the region and the Islamic world … Iran and people of the region will not forget such … treachery against the interests of the Muslim world.”

US-Saudi “treachery”? Is that what’s really driving down oil prices?

Not according to Saudi Arabia’s Petroleum Minister Ali al-Naimi. Al-Naimi has repeatedly denied claims that the kingdom is involved in a conspiracy. He says the tumbling prices are the result of “A lack of cooperation by non-OPEC production nations, along with the spread of misinformation and speculator’s greed.” In other words, everyone else is to blame except the country that has historically kept prices high by controlling output. That’s a bit of a stretch, don’t you think? Especially since–according to the Financial Times — OPEC’s de facto leader has abandoned the cartel’s “traditional strategy” and announced that it won’t cut production even if prices drop to $20 per barrel.

Why? Why would the Saudis suddenly abandon a strategy that allowed them to rake in twice as much dough as they are today? Don’t they like money anymore?

And why would al-Naimi be so eager to crash prices, send Middle East stock markets into freefall, increase the kingdom’s budget deficits to a record-high 5 percent of GDP, and create widespread financial instability? Is grabbing “market share” really that important or is there something else going on here below the surface?

The Guardian’s Larry Elliot thinks the US and Saudi Arabia are engaged a conspiracy to push down oil prices. He points to a September meeting between John Kerry and Saudi King Abdullah where a deal was made to boost production in order to hurt Iran and Russia. Here’s a clip from the article titled “Stakes are high as US plays the oil card against Iran and Russia”:

“…with the help of its Saudi ally, Washington is trying to drive down the oil price by flooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with…

John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.

The Saudis did something similar in the mid-1980s. Then, the geopolitical motivation for a move that sent the oil price to below $10 a barrel was to destabilize Saddam Hussein’s regime. This time, according to Middle East specialists, the Saudis want to put pressure on Iran and to force Moscow to weaken its support for the Assad regime in Syria… (Stakes are high as US plays the oil card against Iran and Russia, Guardian)

That’s the gist of Elliot’s theory, but is he right?

Vladimir Putin isn’t so sure. Unlike Morales, Maduro and Rouhani, the Russian president has been reluctant to blame falling prices on US-Saudi collusion. In an article in Itar-Tass, Putin opined:

“There’s a lot of talk around” in what concerns the causes for the slide of oil prices, he said at a major annual news conference. “Some people say there is conspiracy between Saudi Arabia and the US in order to punish Iran or to depress the Russian economy or to exert impact on Venezuela.”

“It might be really so or might be different, or there might be the struggle of traditional producers of crude oil and shale oil,” Putin said. “Given the current situation on the market the production of shale oil and gas has practically reached the level of zero operating costs.” (Putin says oil market price conspiracy between Saudi Arabia and US not ruled out, Itar-Tass)

As always, Putin takes the most moderate position, that is, that Washington and the Saudis may be in cahoots, but that droopy prices might simply be a sign of over-supply and weakening demand. In other words, there could be a plot, but then again, maybe not. Putin is a man who avoids passing judgment without sufficient evidence.

The same can’t be said of the Washington Post. In a recent article, WP journalist Chris Mooney dismisses anyone who thinks oil prices are the result of US-Saudi collaboration as “kooky conspiracy theorists”. According to Mooney:

“The reasons for the sudden (price) swing are not particularly glamorous: They involve factors like supply and demand, oil companies having invested heavily in exploration several years ago to produce a glut of oil that has now hit the market — and then, perhaps, the “lack of cohesion” among the diverse members of OPEC.” (Why there are so many kooky conspiracy theories about oil, Washington Post)

Oddly enough, Mooney disproves his own theory a few paragraphs later in the same piece when he says:

“Oil producers really do coordinate. And then, there’s OPEC, which is widely referred to in the press as a “cartel,” and which states up front that its mission is to “coordinate and unify the petroleum policies” of its 12 member countries…. Again, there’s that veneer of plausibility to the idea of some grand oil related strategy.” (WP)

Let me get this straight: One the one hand Mooney agrees that OPEC is a cartel that “coordinates and unify the petroleum policies”, then on the other, he says that market fundamentals are at work. Can you see the disconnect? Cartels obstruct normal supply-demand dynamics by fixing prices, which Mooney seems to breezily ignore.

Also, he scoffs at the idea of “some grand oil related strategy” as if these cartel nations were philanthropic organizations operating in the service of humanity. Right. Someone needs to clue Mooney in on the fact that OPEC is not the Peace Corps. They are monopolizing amalgam of cutthroat extortionists whose only interest is maximizing profits while increasing their own political power. Surely, we can all agree on that fact.

What’s really wrong with Mooney’s article, is that he misses the point entirely. The debate is NOT between so-called “conspiracy theorists” and those who think market forces alone explain the falling prices. It’s between the people who think that the Saudis decision to flood the market is driven by politics rather than a desire to grab “market share.” That’s where people disagree. No denies that there’s manipulation; they merely disagree about the motive. This glaring fact seems to escape Mooney who is on a mission to discredit conspiracy theorists at all cost. Here’s more:

(There’s) “a long tradition of conspiracy theorists who have surmised that the world’s great oil powers — whether countries or mega-corporations — are secretly pulling strings to shape world events.”…

“A lot of conspiracy theories take as their premise that there’s a small group of people who are plotting to control something, to control the government, the banking system, or the main energy source, and they are doing this to the disadvantage of everybody else,” says University of California-Davis historian Kathy Olmsted, author of “Real Enemies: Conspiracy Theories and American Democracy, World War I to 9/11″. (Washington Post)

Got that? Now find me one person who doesn’t think the world is run by a small group of rich, powerful people who operate in their own best interests? Here’s more from the same article:

(Oil) “It’s the perfect lever for shifting world events. If you were a mad secret society with world-dominating aspirations and lots of power, how would you tweak the world to create cascading outcomes that could topple governments and enrich some at the expense of others? It’s hard to see a better lever than the price of oil, given its integral role in the world economy.” (WP)

“A mad secret society”? Has Mooney noticed that — in the last decade and a half — the US has only invaded nations that have huge natural resources (mainly oil and natural gas) or the geography for critical pipeline routes? There’s nothing particularly secret about it, is there?

The United States is not a “mad secret society with world-dominating aspirations”. It’s a empire with blatantly obvious “world-dominating aspirations” run by political puppets who do the work of wealthy elites and corporations. Any sentient being who’s bright enough to browse the daily headlines can figure that one out.

Mooney’s grand finale:

“So in sum, with a surprising and dramatic event like this year’s oil price decline, it would be shocking if it did not generate conspiracy theories. Humans believe them all too easily. And they’re a lot more colorful than a more technical (and accurate) story about supply and demand.” (WP)

Ah, yes. Now I see. Those darn “humans”. They’re so weak-minded they’ll believe anything you tell them, which is why they need someone as smart as Mooney tell them how the world really works.

Have you ever read such nonsense in your life? On top of that, he gets the whole story wrong. This isn’t about market fundamentals. It’s about manipulation. Are the Saudis manipulating supply to grab market share or for political reasons? THAT’S THE QUESTION. The fact that they ARE manipulating supply is not challenged by anyone including the uber-conservative Financial Times that deliberately pointed out that the Saudis had abandoned their traditional role of cutting supply to support prices. That’s what a “swing state” does; it manipulates supply keep prices higher than they would be if market forces were allowed to operate unimpeded.

So what is the motive driving the policy; that’s what we want to know?

Certainly there’s a strong case to be made for market share. No one denies that. If the Saudis keep prices at rock bottom for a prolonged period of time, then a high percentage of the producers (that can’t survive at prices below $70 per barrel) will default leaving OPEC with greater market share and more control over pricing.

So market share is certainly a factor. But is it the only factor?

Is it so far fetched to think that the United States–which in the last year has imposed harsh economic sanctions on Russia, made every effort to sabotage the South Stream pipeline, and toppled the government in Kiev so it could control the flow of Russian gas to countries in the EU–would coerce the Saudis into flooding the market with oil in order to decimate the Russian economy, savage the ruble, and create favorable conditions for regime change in Moscow? Is that so hard to believe?

Apparently New York Times columnist Thomas Freidman doesn’t think so. Here’s how he summed it up in a piece last month: “Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other?”

It sounds like Freidman has joined the conspiracy throng, doesn’t it? And he’s not alone either. This is from Alex Lantier at the World Socialist Web Site:

“While there are a host of global economic factors underlying the fall in oil prices, it is unquestionable that a major role in the commodity’s staggering plunge is Washington’s collaboration with OPEC and the Saudi monarchs in Riyadh to boost production and increase the glut on world oil markets.

As Obama traveled to Saudi Arabia after the outbreak of the Ukraine crisis last March, the Guardian wrote, “Angered by the Soviet invasion of Afghanistan in 1979, the Saudis turned on the oil taps, driving down the global price of crude until it reached $20 a barrel (in today’s prices) in the mid-1980s… [Today] the Saudis might be up for such a move—which would also boost global growth—in order to punish Putin over his support for the Assad regime in Syria. Has Washington floated this idea with Riyadh? It would be a surprise if it hasn’t.” (Alex Lantier, Imperialism and the ruble crisis, World Socialist Web Site)

And here’s an intriguing clip from an article at Reuters that suggests the Obama administration is behind the present Saudi policy:

“U.S. Secretary of State John Kerry sidestepped the issue (of a US-Saudi plot) after a trip to Saudi Arabia in September. Asked if past discussions with Riyadh had touched on Russia’s need for oil above $100 to balance its budget, he smiled and said: “They (Saudis) are very, very well aware of their ability to have an impact on global oil prices.” (Saudi oil policy uncertainty unleashes the conspiracy theorists, Reuters)

Wink, wink.

Of course, they’re in bed together. Saudi Arabia is a US client. It’s not autonomous or sovereign in any meaningful way. It’s a US protectorate, a satellite, a colony. They do what they’re told. Period. True, the relationship is complex, but let’s not be ridiculous. The Saudis are not calling the shots. The idea is absurd. Do you really think that Washington would let Riyadh fiddle prices in a way that destroyed critical US domestic energy industries, ravaged the junk bond market, and generated widespread financial instability without uttering a peep of protest on the matter?

Dream on! If the US was unhappy with the Saudis, we’d all know about it in short-order because it would be raining Daisy Cutters from the Persian Gulf to the Red Sea, which is the way that Washington normally expresses its displeasure on such matters. The fact that Obama has not even alluded to the shocking plunge in prices just proves that the policy coincides with Washington’s broader geopolitical strategy.

And let’s not forget that the Saudis have used oil as a political weapon before, many times before. Indeed, wreaking havoc is nothing new for our good buddies the Saudis. Check this out from Oil Price website:

“In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.

It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt.

The Saudis and other OPEC members have, of course, used the oil price for the obverse effect, that is, suppressing production to keep prices artificially high and member states swimming in “petrodollars”. In 2008, oil peaked at $147 a barrel.” (Did The Saudis And The US Collude In Dropping Oil Prices?, Oil Price)

1973, 1986, 1990, 1998 and 2008.

So, according to the author, the Saudis have manipulated oil prices at least five times in the past to achieve their foreign policy objectives. But, if that’s the case, then why does the media ridicule people who think the Saudis might be engaged in a similar strategy today?

Could it be that the media is trying to shape public opinion on the issue and, by doing so, actually contribute to the plunge in oil prices?

Bingo. Alert readers have probably noticed that the oil story has been splashed across the headlines for weeks even though the basic facts have not changed in the least. It’s all a rehash of the same tedious story reprinted over and over again. But, why? Why does the public need to have the same “Saudis refuse to cut production” story driven into their consciousness day after day like they’re part of some great collective brainwashing experiment? Could it be that every time the message is repeated, oil sells off, and prices go down? Is that it?

Precisely. For example, last week a refinery was attacked in Libya which pushed oil prices up almost immediately. Just hours later, however, another “Saudis refuse to cut production” story conveniently popped up in all the major US media which pushed prices in the direction the USG wants them to go, er, I mean, back down again.

This is how the media helps to reinforce government policy, by crafting a message that helps to push down prices and, thus, hurt “evil” Putin. (This is called “jawboning”) Keep in mind, that OPEC doesn’t meet again until June, 2015, so there’s nothing new to report on production levels. But that doesn’t mean we’re not going to get regular updates on the “Saudis refuse to cut production” story. Oh, no. The media is going to keep beating that drum until Putin cries “Uncle” and submits to US directives. Either that, or the bond market is going to blow up and take the whole damn global financial system along with it. One way or another, something’s got to give.

Bottom line: Falling oil prices and the plunging ruble are not some kind of free market accident brought on by oversupply and weak demand. That’s baloney. They’re part of a broader geopolitical strategy to strangle the Russian economy, topple Putin, and establish US hegemony across the Asian landmass. It’s all part of Washington’s plan to maintain its top-spot as the world’s only superpower even though its economy is in irreversible decline.

http://www.counterpunch.org/2014/12/29/irreversible-decline/

CounterPunch on American Fascism

Essay On Violence

Turned Backs, the Mayor and the Police

by NORMAN POLLACK

The funeral of Officer Ramos on Saturday, Dec. 27, turned into a Fascist spectacle as many in the ranks of the police turned their backs on NYC Mayor de Blasio—a Fascist spectacle because, already heavily militarized, already implicated in wanton killings of blacks nationwide, the police, many coming from far and wide, used the funeral to demonstrate their demand for acting with impunity and their contempt for authority to reign them in. The funeral symbolized the police as enemies of the rule of law, unable and unwilling to bear scrutiny for lawless acts of an ongoing nature but brought to national attention through a sudden condensation of events over the last several weeks. We stand in fear of our own public servants, just as we do toward the CIA on the international plane, a militarization of American life which internalizes, collectively, the repression America as a nation presents to and imposes on the world and internally demands of itself lest its global/domestic Power be questioned.

Turning backs is a gesture of contempt, the surface of a culture, here, a police culture, impossible to achieve and realize had it not rested on wider authoritarian foundations. That gesture, in Queens, was meant to say, de Blasio, and beyond you, all liberal do-gooders, Get Out of Our Way, it is we the vanguard of a New America, proudly defiant of civil authority seeking to safeguard basic human rights, just as our brothers in the CIA are waging the same battle—we’re mutually reinforcing one another–to bring into our respective spheres of activity and society the obedience to a vision of Order sanitized to be absolute in its scope, hierarchical in the deference expected of those not entitled to respect of their betters judged so by their loyalty to principles of true Americanism, whether knowing one’s place in the Great Pecking Scale of capitalist democracy at home, market fundamentalism abroad, or simply America the impregnable in all matters, bar none.

De Blasio showed weakness where confrontation was demanded, humility, feeding the sadistic juices of those who will continue to trample on human rights, a sincerity and eloquence of mourning, viewed by his detractors as a pushover in their arrogant jealously-guarded claims to the real center of authority in protecting America from its baser self. This fascistic mindset does not register unless it is replicated and reinforced on many levels, again, an interconnectivity of CIA and local police even though not formalized because the integrative bonds of an authoritarian culture, itself fed continuously through the operations and requirements of advanced capitalism, are now too strong seemingly to break. Yet, instead of the police turning their back on de Blasio, it is the American government which has turned its back on the American people, the CIA emblematic—and performing a vanguard role—of the National Security State sinking its roots down into the cities, towns, villages of the nation, the smaller the unit as if to say to the citizenry, there’s no place left to hide.

***

The failure to prosecute the CIA for torture indicts the Obama administration in its complicity, Obama personally implicated in every water-boarding, sensory deprivation, electric shock treatment, starvation tactic, rectal feeding, Russian roulette scenario, because their very occurrence requires his authorization literal or tacit. But by the American rule of percolation of tyranny downward, this failure to prosecute gives the green light to local police to practice mayhem and murder, knowing the political-ideological climate encloses and justifies their actions. One cannot fault de Blasio, he did what was right and moral in expressing his feelings. Yet, like Weimar, a stand must be taken before it’s too late—severe disciplinary action, squeezing the fascist pus out of those disrespectful of the honor and responsibilities of their badge: force the issue; abide by the restraints of lawful authority, or GET OUT. (Liberals may squirm at that recommendation—mild though it is, but it was Weimar liberals who let the Nazis run all over them and crush a democratic-inclined society.)

When I criticize Obama for his silence on CIA war crimes, and those similarly authorized by the Bush administration, I get from liberals the same response: Go after Bush-Cheney. Period. And we thought Reagan was the Teflon-president. Obama cannot be touched, nor, it appears, the Democratic party, when in fact war criminality has reached its zenith in present-day America by him and on his watch. It is precisely liberalism which fuels international aggression, favors Wall Street, promotes IMF/World Bank solutions for all countries resistant to US financial-commercial penetration and takeover, a liberalism which wraps traditional imperialism and domestic conformity in a purported humanitarianism which equates capitalism with freedom and democracy. Cuba is next on the assault list. Republicans are the easily dispensed with shock troops when it comes to sophisticated capitalist planning; they can shake the trees for internal critics, give vent to their permanent ideological rant about the “Castro Brothers,” etc., but in corporate board rooms the mellifluous sound of money, investment, markets, goes on, essentially undisturbed and finding the shrill patriotism generated a useful cover.

But why blur the emphasis on the police? Actually, I do the reverse, because the wider picture brings our topic into better focus. Police brutality is the distillate of American international practice combined with a long history of anticommunism, the former, counterrevolutionary in purpose in the fullest sense, the latter, its domestic analogue, anti-labor, anti-radical, racist, each having unsavory derivatives which spin off of an ethnocentric core. Capitalism in America, that core, rules the waves: possessiveness, the property right, alienation, commodity fetishism, war, intervention, aspirations to global hegemony—all integral, systemic, historically/structurally cultivated to the process of advanced capitalist development. This process does not occur in a societal vacuum. Not when the vast proportion of the population are losers who may or may not recognize this fact, a fact of widening class differences and opportunities, a fact of extreme deprivation for bottom social groups, the results disguised—again, the mailed fist of liberalism, itself disguised as humanitarianism—so as to engender compliance with the groundrules that are prescribed from above. Police brutality? Why not, when the privileged status, if not the survival, of ruling groups is at stake?

The American elite, as an objective stratum, even though they may not work in concert, or not even know each other well, are good at multitasking, i.e., in the service of the conservation of their power. Their needs are met by a generalized stance of authoritative repression; hence, the local police and the CIA (perhaps the FBI as midwife) in fashioning a common bond of resistance to social change inimical to the interests of their sponsors. Government is the bulwark of hierarchy (often measured in control over wealth and property ownership), national and international. Here though a corrective: this is not meant as a screed directed against all police—my overreaction to officers who turned their backs on de Blasio because he seeks to end brutality and the slaughter of innocents—because we have before us examples of the very opposite, as in the splendid work of Chief Magnus in Richmond, CA, written up by Steve Early in a recent CounterPunch article. The alternative of compassionate, intelligent, humane policing, we are reminded, is still possible and highly effective in providing community safety, dependent, I say, as one who is not a determinist, on the will and moral bearing of those who work to that end. Not so, the CIA, which has proven itself unredeemable, and by all democratic rights, should be abolished.

***

Here my interest shifts to the CIA as the umbrella sheltering repression under which such incidents as that at the Ramos funeral take place. Mark Mazzetti’s NYT article, “After Scrutiny, C.I.A. Mandate Is Untouched,” (Dec. 27), is a crackerjack description of the complicity in repression saturating America’s political culture. Mazzetti begins with DCIA Angleton’s complaint in 1976 about the Church Committee’s investigation of the CIA, as though the Agency were “a medieval city occupied by an invading army,” the army being of course Congress—and (mine), the import here being the rejection of all oversight on its activities, which continues down to the present. Already in the 1970s and before, the CIA was engaged in domestic spying and other abuses, and Mazzetti views it “in the midst of convulsions that would fundamentally remake its mission.” The Church Committee, coming at the close of US intervention in Vietnam, disclosed “C.I.A. assassination schemes and spying on Vietnam War protesters” which “fueled a post-Watergate fury among many Americans who had grown cynical about secret plots hatched in Washington.”

The mood had now changed. Mazzetti writes: “Nearly four decades later, another Senate committee’s allegations that the C.I.A. had engaged in torture, lying and cover-up have stirred echoes of the Church era—raising the question of whether the agency is in for another period of change.” His heading, “Mandate Is Untouched,” alerts us to its unlikelihood, although he may have overestimated what had earlier been achieved. Under the best of motives from outside, the C.I.A. remains largely impervious to change. And Diane Feinstein is no Frank Church, having protected the CIA all these years. Here the reporter strongly implies the Agency’s steadfast and obvious resistance to oversight (much as in my example of the police and not only de Blasio but whomever seeks to make the police accountable for their actions, especially not promising when, from the top, POTUS and DOD, the drive is to militarize local police forces): “But the scathing report the Senate Intelligence Committee delivered this month is unlikely to significantly change the role the C.I.A. now plays in running America’s secret wars. A number of factors—from steadfast backing by Congress and the White House to strong public support for clandestine operations—ensure that an agency that has been ascendant since President Obama came into office is not likely to see its mission diminished, either during his waning years in the White House or for some time after that.” I sense the tentacles of fascism wrapping around democratic governance.

As for earlier, he continues (driving home the contrast in historical periods): “The grim details, shocking at the time, led to a gutting of the agency’s ranks and a ban on assassinations, imposed by President Gerald R. Ford. They also led to the creation of the congressional intelligence committees and a requirement that the C.I.A. regularly report its covert activities to the oversight panels.” Obama is no Ford; one who could not walk and chew gum at the same time proved the greater guardian of freedom than the fluent, sophisticated Harvard Law-trained master of doublethink and doubletalk who skillfully fronted for the military and intelligence communities, the CIA particularly close to his bosom. Evidence of torture is obvious and abundant in the Senate Intelligence report, but as Mazetti almost predictably notes: “But the Obama administration has made clear that it has no plans to make anyone legally accountable for the practices described by the C.I.A. as enhanced interrogation techniques and the Intelligence Committee’s as torture.” The ACLU and Human Rights Watch called on AG Holder “to appoint a special prosecutor to examine the report’s allegations, but the request will almost certainly be rejected.” Stonewalling done in the name of a higher good, variously termed American Exceptionalism or now Counterterrorism, but I prefer Imperialism abroad, Social Regimentation at home.

The “folks” (Obama’s favorite term) who brought you massive surveillance of the American people, also brought you the exoneration of the CIA. Even critics fall into line. Mazzetti uses Sen. King, Independent from Maine and member of the Committee, for illustration. King first expressed skepticism about the need to release the report, then “spent five straight evenings reading it in a secure room on Capitol Hill,” and decided “the C.I.A. abuses needed a public airing.” King: “’It went from interest, to a sick feeling, to disgust, and finally to anger.’” Yet, the collapse of political integrity, not just of one man, but the party, the president—one might say, USG per se. For as Mazzetti observes, “And while Senator King called the Intelligence Committee’s report ‘Church Committee, II,’ he, like many other [Committee] Democrats, … remains a broad supporter of the C.I.A.’s paramilitary mission that Mr. Obama has embraced during his time in the White House.” He grimly closes: “And as America’s spying apparatus has grown larger, richer and more powerful than during any other time in its history, it has become ever harder for those keeping watch over it.” I believe this contempt for oversight translates downward through the entire social structure, hence the police turning their backs on Mayor de Blasio, in contemptuous disregard for placing checks on “paramilitary operations” (what police functions are increasingly coming to represent) in the military-style maintenance of order, location no longer specified, each fighting force to its own bailiwick.

My New York Times Comment on the Mazzetti article, same date, follows:

When an anti-democratic cancer arises in the Republic, using the US Constitution for toilet paper, you don’t change it, you ABOLISH it–exterminate it as a threat to the very definition of democracy.

America has faced a choice since the days of the Church Committee, a test of honor, and it has failed the test miserably. From Angleton through Casey to, now, Brennan, it has been one long slog in fascistic hidden government.

The chief democratic political principle is ACCOUNTABILITY. By that token, whatever happens in USG, here, torture, waterboarding, drone assassination–all acknowledged war crimes–goes directly up to the president. The conclusion: Pres. Obama is a war criminal, no DOJ eloquence, no silver-tongued public intellectuals, can distort that unvarnished truth.

Therefore, as a war criminal, he has committed treason against a democratic America and should be discharged from office for treasonous conduct. Again, unvarnished truth. And then, unceremoniously handed over to the International Criminal Court.

America must live by the rule of law, or it is nothing. We’ve had decades of subterfuge, promoting a standard from which we exempt ourselves as a nation. When you compare Gerald Ford and Barack Obama, you see at once this is not a partisan issue–save that there are few around of either party with Ford’s integrity, Democrats today, in particular, basking in torture and assassination as get-out-of-jail cards to show their patriotism.

America rudderless in a sea of infamy.

Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at pollackn@msu.edu.

CounterPunch: There’s a Riot Goin’ On

Practical Looting, Rational Riots, and the Shortcomings of Black Liberalism

The Poor Person’s Defense of Riots

by DELIO VASQUEZ

On a warm night in December, over a thousand protestors find themselves trapped in a winding, residential area of Berkeley, surrounded on two sides by armed riot police. On the third side is a row of sleepy California homes. Opposite is an empty parking lot surrounded by a chain link fence. Some of the riot police lift and aim their rifles at the crowd, while other officers reach to have their plastic zip-tie cuffs at the ready. Realizing that there is no other way out, a handful of protestors, most of whom look like they belong more in run-down East Oakland than in the collegiate suburbs of Berkeley, immediately know what to do. “Knock down the fence!” A horde of protestors rushes forward, pushing and pulling at the silver-painted fencing. Others, however, stand back. You can see the look of hesitation on the face of one African American woman. A young white male in an untucked, Polo dress-shirt shouts, “Hey guys, let’s keep it non-violent!” The police hesitate. After a collective effort, the protestors successfully manage to knock over the fence and begin to escape. A few stragglers aren’t so lucky; one tall, African American man has his leg broken by a barrage of rubber bullets fired at close range and is soon arrested despite the efforts of the crowd to protect him.

Since the Ferguson decision, we have been flooded with stories about how the overwhelmingly peaceful nation-wide protests against police brutality have been occasionally ruined by looting and property destruction caused by “fringe” elements. In conservative media, the trouble-makers have been generally characterized as parts of the black “criminal” underclass. In the liberal media, the law-breakers have often been characterized as “outside agitators,” “violent political radicals,” and “white anarchists.”  While the conservative side has worked to make it seem like the actions of these black “criminals” are not legitimately political, the liberal side on the other hand has avoided publicizing stories about people of color engaging in property destruction altogether. There is a real danger that these omissions have been motivated by white guilt—as well as by the legitimate concern that publicizing these stories will be interpreted as feeding into racism. However, rather than challenging the assumption that property destruction is necessarily bad, many liberals have refused to acknowledge the law-breaking altogether, perhaps for fear of being labeled racist.

Some of the more insightful attempts to defend rioting and property destruction in light of the history of American political dissent have unfortunately relied on moralistic arguments that portray rioting as driven primarily by emotion—with the idea being that we should sympathize with the feelings of the rioters. These stories reinforce the misconception that riots are all about anger, rage, and frustration. These perspectives also fail to acknowledge that when riots do happen, they arise from very particular historical situations. It is not everyday oppression that immediately causes a riot, but instead those symbolic events—like a major non-indictment—that shock the senses, shake our expectations, and act as a brutal affront to our collective sense of what is right (even if sometimes those expectations are sadly divorced from reality in the first place). Many times throughout history, populations have simply starved to death rather than riot; at other times they have rioted over matters that to us may seem less urgent. Accordingly, when someone takes the time to go smash a window, putting themselves in legal danger, we need to try to make sense of why they would do it.

Mob Decision-Making

History shows us that mob actions are most often intentional, targeted, and rational. During the 18th century, angry mobs of starving English peasants, rather than steal from grain merchants, instead forced them to sell the bread at a fair price decided by the crowd. E.P. Thompson cites the example of peasants, “who, having taken corn from the farmers and [having] sold it at the popular price in the market, brought back to the farmers not only the money but also the sacks.” In Ferguson, people have stopped in the middle of rioting to have impromptu theoretical discussions as well as to strategically discuss, from the base of operations at a local gas station, where to target next. In Berkeley, CA, corporate businesses like Radioshack, Wells Fargo, and Trader Joe’s have been damaged and looted, but when individuals have chosen to break a residential window, collective boos and chants of “No houses!” have risen from the crowd, and those individuals have been stopped without any further conflict.

Anyone who has been in a large crowd, be it a church group or a political “mob,” is well aware that spontaneous forms of group decision-making often arise and allow the crowd to move with a more-or-less shared purpose. A form of group consciousness takes shape, with people communicating across the crowd to each other, protecting each other, and working together to avoid dangerous situations, such as being trapped by police maneuvers. Sometimes, too, there are bad forms of communication, and a crowd does not cooperate so well—but these communication failures are no less egregious than those that occur daily in the chambers of Congress, surely. Crowds make decisions together, and those decisions are cosigned by individuals that think through questions like: “Do I want to participate in this?” “Should I leave now, or stay?” “Do I want to stand by and provide cover for those doing things that I refuse to do, or should I abandon them?”

When Smashing a Window is “Just Political” and When it is Practical

There is a stark difference between political protest and direct action. Political protest is a form of expression, done specifically to be seen by an audience—such as the general public or politicians in power—with the hope of convincing that audience to share the protestors’ viewpoint and maybe act on their behalf. Direct action is also political, but avoids the “middleman”; it is instead an action done to directly pursue a concrete goal, such as acquiring food with which to feed oneself.  Holding a sign that criticizes Jim Crow Laws is political protest; refusing to get off the bus or move to the back when ordered to is direct action—as hundreds of individuals in the South were doing before Rosa Parks and the NAACP successfully turned the act into an organized, political tactic. Tea-Partiers and conservatives who wave “Don’t Tread On Me” flags are engaging in political protest; those who buy their own land and arm themselves to protect it are engaging in direct action.

The question is then, when you smash a window, are you doing so because you are looking to grab some food, or some diapers, or a TV to sell so that you can make next month’s rent? Or are you smashing a window to express anger and frustration, and so that maybe the elites or general public pay attention to your political views? If you are smashing a window for the second reason, you have more in common with those engaging in peaceful political protest. Both the person chanting “black lives matter” and the person putting up graffiti are engaging in political protest—to speak out against something.

By contrast, looting is very rarely motivated purely by emotion and political expression, but instead must be more instrumental and practical than other forms of political action. Looting takes intentionality, foresight, and quick decision-making, and directly results (unless you get arrested) in your acquiring the things that you are seeking. Because poor people often cannot afford to waste their time engaging in symbolic forms of protest, and because they rarely expect to be heard by those in power anyways, they are much more likely to engage in practical, direct action than in symbolic political protest. Things like stealing food from work, not paying taxes, and calling in sick to work when you’re not actually sick are actions that produce clear results. By contrast, holding a sign and marching in circles for hours is admittedly a lot more abstract and requires free time that only some of us can afford. A mass “die-in” like those engaged in by many across the country is indubitably a valuable political action, but we would be deluding ourselves if we did not admit that the link between such symbolic acts and concrete political change can be painfully unclear, abstract, and slow-moving in its effectiveness.

Black Liberalism and Disruptive Tactics

At a very large rally I recently attended in Oakland, CA, several members of a coalitional group of black organizers spent a considerable amount of time laying out ground rules for reigning in the voices of white “allies.” The organizers argued that, while well-intentioned, white allies often reinforce racism by taking over political demonstrations that are about issues that black people face. Most white participants that I observed were willing to accept these critiques, deferring to what they felt was the greater authority that the black leadership should rightfully have over a movement that involves most prominently the deaths and abuses of black persons. The rally then turned into what was essentially a passive crowd listening to and watching a black leadership give speeches from the steps of the Alameda County Courthouse. Some in the audience took group photos and selfies of themselves with the black leadership in the background, feeling that they had performed well as silent, white allies, and went home with smiles on their faces. As I later found out, many of those black leaders later met at an exclusive cocktail party scheduled for that evening. At the same time that the party was happening, about a thousand people of mixed racial and class backgrounds continued in the streets, after the “official” rally had ended, marching and demonstrating for the next few hours and blocking a major traffic tunnel; some of them ended up getting tased and beat by police, and many others were arrested.

While the black critique of over-zealous white allies may seem like a positive intervention to limit racism, it can instead often become a way for self-designated “black leaders”—who also happen to be more moderate—to successfully demobilize and marginalize the more disruptive branches of a movement, shaming white radicals through white guilt while also making it seem like the more radical organizers of color and poor people who have come to protest simply do not exist. Often, these black moderates and liberals focus their attention on intra-movement racism and “microaggressions” because the more brutal dimensions of racism, like intense police violence, may in fact be alien to them. Sometimes, middle and upper-class people of color who have not actually experienced severe police brutality can only relate to racism through their experiences of more subtle, structural forms of racism, like discriminatory hiring practices or racially insensitive language. To them, the racist tones of a “white radical” who disagrees with moderate strategies and tactlessly insults a black liberal leader are easier to address, more tempting to attack, and simply more familiar than the racist violence that poor people of color experience.

Of course, affluent people of color experience police violence as well. AsDr. Ersula Ore and Dr. Henry Louis Gates know well, very rarely will police stop to take note of how many degrees you may have, how “respectable” you may be, or even if you happen to be an off-duty police officer yourself. But these experiences simply cannot be equated with the constant threats of violent death and malnutrition that poor people of color face on a daily basis. The failure to acknowledge these class differences then means that black liberals and moderates gloss over the crucial fact that many of the poor people who have been most brutally abused by police in the past turn out to be the same people who later decide to engage in looting. Accordingly, when the president talks abouthis struggles catching cabs in Chicago or being confused for a waiter, only to then turn around and insist to us that we must accept thedecisions made by the grand jury and trust “the rule of law,” despite overwhelming evidence that the institutions of law—the police, the justice system, etc.—are the very problem that people are protesting against, it becomes hard to ignore that, despite the racism that the president has faced, he likely cannot relate to the forms of racism that someone like Michael Brown experienced.

A History of Law Breaking

We often suffer from a collective amnesia about the crucial role of law-breaking in the history of social change. Martin Luther King, Jr., the paragon for pacifist protest was arrested an impressive thirty times between 1955 and 1965. And still, the effectiveness of his militant pacifism can only be properly understood against the background of many other much more tumultuous political conflicts, riots included, that occurred throughout the Civil Rights Movement. Political change does not, and never has, come about through peaceful protest alone. All tactics of course play a role—and riots, the threat of violence, and violence itself are often the context and background that situate and frame the force and effectiveness of more mainstream, moderate, and agreed-upon tactics. In a conversation with Coretta Scott King, Malcolm X, infamous for his anti-pacifist rhetoric and his direct attacks on Martin Luther King’s strategies, nonetheless stressed to Dr. King’s wife his awareness of the value of a diversity of tactics: “I want Dr. King to know that I didn’t come to Selma to make his job difficult. I really did come thinking I could make it easier. If the white people realize what the alternative is, perhaps they will be more willing to hear Dr. King.”

Ultimately, then, we do ourselves a disservice when we attack others for doing the important political work that we ourselves are not willing to do—work that in fact allows us to do what we do. As a political theorist, I do not have the patience to research the various ways and tedious details that show how procedural corruption may have occurred during the Michael Brown case, but I appreciate the contributions of the lawyers and legal experts do that important work. Equally, those who work inside formal institutions to pass anti-police brutality policy and legislation must also acknowledge that their voices would not be heard were it not for the background roar of those angry mobs shouting outside of our legislative buildings and in the streets.

On Saturday December the 20th, a man in Brooklyn committed suicide after ambushing and killing two police officers, and after shooting his ex-girlfriend who earlier that day had saved his life. While it is clear that Ismaaiyl Abdullah Brinsley was emotionally troubled, it also appears that his attacks on police officers were indeed explicitly “politically” motivated. Already many on the left are insisting on depoliticizing the attack in order to protect the anti-police brutality movement from being brought down by “the fringe.” Many on the right are seizing on this tragedy in order to justify further police repression, rendering all protestors as “criminals,” while ignoring a long history of comparable,right-wing anti-police violence. On Tuesday night, another young black man was killed by police in Missouri, setting off riots and the burning of property. Unless we face these frightening realities head on, even as we vigorously denounce them, and come to understand that these kinds of tense and even fatal conflicts are part and parcel of the tumultuous history of political change, we will likely fail to understand our political present.

Delio Vasquez is a PhD student in History of Consciousness at the University of California at Santa Cruz.

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Common Dreams: So Sorry, America

12 Days of Christmas Apologies

by Paul Buchheit

“To Americans without a place to live, we apologize for a society that allows almost all of its new wealth to be redistributed to people who are already rich.” (Photo:  Scott Fiddelke/flickr/cc)

If Christmas magic were real, America’s political and business leaders — the people with power and money — would speak on behalf of the nation they’ve debased:

1. To Our Most Neglected Citizens

By the time the Koch brothers wake up on Christmas morning, the wealth the two men will have accumulated throughout the night could get a room for the night for every one of the633,000 homeless Americans.

To Americans without a place to live, we apologize for a society that allows almost all of its new wealth to be redistributed to people who are already rich.

2. To Our Most Vulnerable Citizens

Eight years ago 2 out of every 100 children were homeless. Now it’s over 3 out of 100, a stunning 50% increase.

At the other end of society, elderly people are the most unequal group among us. Even though almost all the new wealth from 1989 to 2007 went to people 55 and older, almost half of retirees report less than $10,000 in savings.

3. To the “Broken Windows” Victims

The rationale is that punishment for trivial offenses will discourage more serious crimes. In New York City in 2012, the most common offense was drinking alcohol in public, and 85 percent of the citations were given to Blacks and Latinos.

Bank executives don’t break windows. Their crimes are a billion times worse. Yet not a single banker was prosecuted for contributing to the mortgage collapse.

4. To Our Students, the Newest Products of Business

Numerous studies have shown the importance of pre-school, where social and emotional needs are first nurtured in a peer environment. But pre-school funding has been drastically cut. In its place, business leaders see profits in our children, especially if education can be automated, standardized, and commodified.

5. To Our Soldiers

We celebrate you in TV commercials, at football games, in holiday parades. But we should be saying “sorry” instead of “thank you.”

Bill Quigley puts the facts together for us:

—-One out of twelve Iraq/Afghanistan veterans with PTSD
—-57,000 homeless vets
—-Veterans much more likely than the general population to commit suicide
—-Unemployment much higher among post-9/11 vets

6. To the Victims of Our “Exceptionalism”

Greed knows no boundaries. Our history of disregard for weaker nations seems never to end. Drone strikes by ‘pilots’ at computer terminals have killed hundreds of civilians in Pakistan alone. The use of torture, once considered inhuman and un-American, is now standard procedure to many of the people in power.

It gets even worse. Thanks in part to the xenophobic emotions stirred up by government and the press, the American public shows widespread support for both drone strikes andtorture. How can we ever apologize for that?

7. To Those To Whom Nothing Ever “Trickled Down”

Perhaps the biggest scam in economic history is the contention by Arthur Laffer, gleefully adopted by the super-rich, that lower taxes on the wealthy would stimulate the economy and eventually lift the fortunes of everyone.

But even though the wealth gap in our country is worse than ever before, and despite ongoing present-day evidence that Laffer was wrong, the big winners unapologetically continue their charade.

8. To People Who Believe in Society Over “Winner-Take-All”

One of our country’s greatest needs is public infrastructure repair. But the super-rich have little reason to support mass transportation, as long as their pilots and chauffeurs aren’t significantly delayed.

The U.S. Chamber of Commerce estimates that $8 trillion in new infrastructure investment will be needed from 2013 to 2030. This is the same amount by which U.S. wealth has increased each year since 2011, but most of it has gone to America’s richest 10%.

9. To the Victims of Free-Market Capitalism

After 35 years it’s clear that poorly regulated free-market capitalism doesn’t work, except for people who know how to manipulate the system. We’ve been duped by Ronald Reagan’s “Government is the problem,” and by the “starve the beast” mentality that followed, which left government underfunded and inept, and drove American citizens into the clutches of the “invisible hand” of the free market. Big business is largely unregulated. It prospers through its partnership with Congressional members, who have fallen out of touch with average Americans.

Charles Koch, one of the major beneficiaries of government subsidies, had the temerity to say: “This growing partnership between business and government is a destructive force, undermining…the very foundations of our culture.”

10. To the People Who REALLY Built the Technology Industry

Economist William Lazonick says it well: “The iPhone didn’t just magically appear out of the Apple campus in Cupertino. Whenever a company produces a technology product, it benefits from an accumulation of knowledge created by huge numbers of people outside the company, many of whom have worked in government-funded projects over the previous decades.”

11. To Those Who Have To Defend the Best Government Programs in U.S. History

It has been estimated that the richest 1% increased their wealth by at least $3 trillion last year, far more than the budget for Social Security, Medicare, Medicaid, and the entire safety net.

Social Security and Medicare have worked for decades, keeping nearly half of our seniors out of poverty. But these vital programs are continually under fire by many of the same people who grabbed a chunk of that $3 trillion last year.

12. To the Most Generous, and Least Appreciated, Among Us

These are lower-income households, making $50,000 to $75,000 per year, who give 7.6 percent of their income to charity, while those earning $100,000 or more give just 4.2 percent. Yet inordinate attention is paid to big-money philanthropists who get tax breaks for supporting operas, art museums, symphonies, and alma maters. Good causes all, but of little value to Americans worried about food and rent.

And If the Super-Greedy Refuse to Apologize and Make Amends for Their Treatment of Less Fortunate Americans?

Let Visions of Occupy II Dance in Their Heads.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Naked Capitalism: Both Political Parties Suck

Walter Dean Burnham and Thomas Ferguson: Americans Are Sick to Death of Both Parties: Why Our Politics Is in Worse Shape Than We Thought

Posted on December 20, 2014 by Lambert Strether

Lambert here: I’d like to know a bit more about how we can tell when a political system “has disintegrated,” as opposed to “is disintegrating,” and in the American context. Perhaps a future article! Meanwhile, it’s pleasing to see an explanation of why the 2014 results were as bad for Democrats as the Democrats are pretending they aren’t.

By Walter Dean Burnham, Professor Emeritus, Frank C. Erwin, Jr. Centennial Chair in State Government at the University of Texas, Austin, and Thomas Ferguson, Professor of Political Science at the University of Massachusetts, Boston, Senior Fellow at the Roosevelt Institute, and contributing editor of AlterNet. Originally published at Alternet.

The way many pundits tell it, the Democratic debacle in the 2014 midterm elections sounds like a perfect storm of bad breaks. The President was aloof. The party’s message was weak and muddled, in some races focused almost entirely on gender issues. Meanwhile record or near-record breaking waves of political money (for off year elections) cascaded through the political system while voter turnout plunged to levels last seen in 1942.

The real story is much uglier: 2014 was fundamentally a democratic debacle. It likely heralds a new stage in the disintegration of the American political order.

Though Republicans jubilate now, the trend is probably as threatening to them as it is to the Democrats. The reason is stark: Increasing numbers of average Americans can no longer stomach voting for parties that only pretend to represent their interests.

So they stayed home, in quite extraordinary numbers. A full accounting of all votes cast in 2014 is still weeks, perhaps months away; it takes that long for all the returns to come in, especially in races in which incumbents faced no challenger or a recount was required. Some high stakes state elections also attract a few more voters than House contests held at the same time, which makes working off unofficial tabulations of a state’s “total vote” even trickier. But our cautious guess is that turnout in this year’s Congressional races will finally weigh in at around 36 percent of the potential electorate that had legal rights to cast a ballot.

That’s a shocking statistic. Put aside for a moment all talk of 1942 and absolute levels of turnout. Instead focus on changes in turnout between presidential elections and the next off-year election. Across the whole sweep of American history, the momentous dimensions of what has just happened stand out in bold relief. The drop off in voting turnout from the presidential election of 2012 to 2014 is the second largest of all time – 24 percentage points. Only 1942’s decline from 1940 was bigger – 29 percentage points. But then there was an excuse. Millions of Americans were hurriedly fanning out across the globe to wage total war. (World War I showed a similar pattern – turnout in the off year elections of 1918 fell 22 points from 1916’s presidential race, marking the fourth largest decline ever. Which leads naturally to the question of the third largest. Read on.)

Now cast a glance at the actual levels to which turnout in many states sank this year. In the last generation, turnouts in the many formerly industrialized states in the Northeast, the Mid-Atlantic region, and parts of the Midwest have bounced around, with one or another state sometimes touching historic lows in a particular election. But this year the decline is broad and to levels that boggle the mind – rates of voting that recall the earliest days of the 19th century, before the Jacksonian Revolution swept away property suffrage and other devices that held down turnout. Turnout in Ohio, for example, fell to 34 percent — a level the state last touched in 1814, when political parties on a modern model did not exist and it had just recently entered the Union. New York trumped even this: turnout in the Empire State plunged to 30 percent, almost back to where it was in 1798, when property suffrage laws disenfranchised some 40 percent of the citizenry. New Jersey managed a little better: turnout fell to 31 percent, back to levels of the 1820s. Delaware turnout fell to 35 percent, well below some elections of the 1790s. In the west, by contrast, turnout declined to levels almost without precedent: California’s 33 percent turnout appears to be the lowest recorded since the state entered the union in 1850. Nevada also hit a record low (28 percent), as did Utah at 26 percent (for elections to the House).

Exceptions to this pattern exist. There is no point in comparing changes in turnout in 2014 with 2012; presidential elections are in a different league altogether. But if one looks at the differences between 2014 and the last off year election of 2010, some interesting cases turn up. For decades after the failure of the Populists in 1896, southern politics was a world unto itself. Turnouts were reminiscent of England before the Great Reform Bill of 1832. In Georgia in 1942, for example, turnout topped out at 3.4 percent (that’s right, 3.4 percent; no misprint). Why is no mystery: the Jim Crow system pushed virtually all African-Americans out of the system, while the network of poll taxes, registration requirements, literacy tests and other obstacles that was part of that locked out most poor whites from voting, too. Since the civil rights revolution, turnouts in the South have risen fitfully to national levels, amid much pushback, such as the raft of new voter ID requirements (though these are not limited to the South). In 2014, the sharp plunge in turnout elsewhere helped achieve a milestone of sorts: regional differences between the South and the rest of country just about vanished, for the first time since perhaps 1872, when the Union army still occupied much of the old Confederacy.

The other class of exceptions is uniquely telling. Turnout rose compared to that of 2010 in at least eight states. We will not know whether 2014 set a new record for political money in off year elections until the post-election disclosure reports are all in at the Federal Election Commission and the IRS (where reports on so-called 527 spending are filed, on a different schedule). But it is already clear that the scale of expenditures this year guarantees 2014 will be a worthy contender for that dubious honor. Most states in which turnout rose were sites of high stakes, heavily contested elections either for the Senate, as in North Carolina, Louisiana, and Arkansas, or for the governor’s office – precisely the sort of places that big donors for sure concentrated their resources on. The tidal wave of money, we judge, supercharged campaigns in those states, if not electorates. (The turnout increases were quite modest, save in Louisiana.)

It seems plain that the American political universe is being rapidly reshaped by economic and cultural crisis into something distinctly different. The Democrats’ messaging this year was, indeed, almost eerily spectral. But its otherworldly feebleness was rooted in fundamental facts that are not going away and cannot be fixed by switching media advisers.

The first problem was the administration’s dismal economic policy record. Though some Democrats try to sugarcoat the dismal facts by focusing on changes since 2009, when the President assumed office, the truth is that the fruits of the recovery have gone lopsidedly to the very richest Americans. Wall Street and the stock market boom, but wages continue to stagnate, and unemployment remains stubbornly high, with millions of Americans withdrawn from the labor force or working only part time. As incomes recovered from 2009 to 2012, for example, 95 percent of all the gains went to the top 1 percent of income earners.  The rest of the population was left far behind. As of July 2014, real median household income was still more than 6 percent below its value in early 2008. The administration’s continuing efforts to court Wall Street, along with its reluctance to sanction even flagrant misconduct by prominent financiers just pour salt into these wounds.

The other reason for the messaging failure is graver, because responsibility for it cannot possibly be fobbed off on the Republicans. Though the full figures are still coming in, we are confident that what Ferguson, Jorgensen, and Chendemonstrated to be true in 2012 will hold for 2014, despite claims to the contrary in parts of the media: The President and the Democratic Party are almost as dependent on big money – defined, for example, in terms of the percentage of contributions (over $500 or $1000) from the 1 percent as the Republicans. To expect top down money-driven political parties to make strong economic appeals to voters is idle. Instead the Golden Rule dominates:Money-driven parties emphasize appeals to particular interest groups instead of the broad interests of working Americans that would lead their donors to shut their wallets.

In the short run, the Democrats’ minuses look like big pluses to Republicans. Both the party’s big donors and its national leaders are exultant at their prospects. As David Stockman, President Reagan’s Budget Director once all but confessed, in the modern era the party has never really pretended to have much of a mass constituency. It wins elections by rolling up huge percentages of votes in the most affluent classes while seeking to divide middle and working class voters with various special appeals and striving to hold down voting by minorities and the poor. As we move further into the next stage of our New Gilded Age politics, only the terms of the bargain will change that the party’s core donors and economic policymakers strike around election time with the gaggle of evangelicals, gun advocates, and anti-feminist and homophobic crusaders – not to mention sheer racists – that whip up their flocks. They will also serve, who only stand and bait.

By contrast, 2014 suggests that the Democrats’ ability to retain any mass constituency at all may now be in question. The facts of globalization, top heavy income inequality, and the world wide tendency toward austerity may just be too much for a party that is essentially dominated by segments of the 1 percent but whose legacy appeal is to average Americans.

Exit polls from the 2014 House races suggest that the old New Deal political formula has become like the grin of the Cheshire Cat. Traces of the ancient pattern are still there in the aggregate: In the lowest income bracket (under $30,000 in the 2014 exit polls) voters overwhelmingly prefer the Democrats by 59 percent to 39 percent.  As income rises, that percentage falls off steeply, with the slightest of hiccups in the very highest bracket.  Conversely, upper income voters were much more likely to vote Republican, though a modest gender gap remained in the national electorate, if not that of every state. (Nationally women voters preferred the Democrats by only 51 percent to 47 percent; the Republican advantage among men was much larger – 57 percent to 41 percent.) But after six years of profound policy disappointment, not enough lower income voters bothered to go to the polls.

Right now Hillary Clinton’s strategists appear to be pinning their hopes on firing up another ritualized big money-led coalition of minorities and particular groups instead of making broad economic appeals. That hope might perhaps prove out, if the slow and very modest economic recovery continues into 2016, or the Republicans nominate another Richie Rich caricature like Mitt Romney, who openly mocks the poorest 47% of the electorate. But exit surveys showed that in 2014 many women voters thought economic recovery and jobs were top issues, too.  And one may doubt how robust the recovery can be in the face of a steadily rising dollar, which now seems baked in the world economic cake for a considerable time to come.

But if the time has perhaps passed when a Democratic Party dominated and financed by Wall Street and Silicon Valley can mobilize anything but remnants, the Republicans can hardly count on smooth sailing for very long. In 2016, if voters are offered another choice between Republican Lite and real Republicans, the affluent Americans who will mostly turn out may well once again cast ballots for the real thing. But once in power the Republicans will have to do something.

Here they face a huge problem. We live in a world in which education, infrastructure, and national strategies are crucial to economic performance. Corporate leaders also reward themselves virtually without limit for average (not to mention less than average) economic performance that runs down their own firms over the long run.  And, especially in the financial sector, they do this as they throw the costs of their mistakes on taxpayers and demand all sorts of subsidies as they finance campaigns for big budget cuts and against taxes. (A stunning case in point is the recent success of the big banks in muscling through a provision in the new spending bill that allows them to move many derivatives back into the parts of their operations insured by the Federal Deposit Insurance Corporation, even as Congress trimmed government backstops for pension funds. )

Little in the free market fundamentalist prayer book offers effective solutions to these dilemmas. Large scale public investments are indispensable to any effort to revitalize the American economy. Since 2006, when the Democratic landslide lamed George W. Bush’s administration, American politics has become a game of musical chairs. 2008 was certainly a negative referendum on the greatest economic policy disaster since the Great Depression. 2010 was yet another vote of no confidence after the administration’s timidity and intransigent Republican opposition combined to dash the soaring hopes that had accompanied President Obama into the White House. That election saw the third greatest drop off in voting turnout in American history and a Republican landslide in the House. In all probability, if the GOP presidential field of 2012 had not behaved like Democratic caricatures, including the eventual nominee, the President might quite possibly have become one of the millions of Americans who lost their jobs and their homes thanks to the Great Recession.

In any case, both direct poll evidence and common sense confirm that huge numbers of Americans are now wary of both major political parties and increasingly upset about prospects in the long term.  Many are convinced that a few big interests control policy. They crave effective action to reverse long term economic decline and runaway economic inequality, but nothing on the scale required will be offered to them by either of America’s money-driven major parties. This is likely only to accelerate the disintegration of the political system evident in the 2014 congressional elections.

Naked Capitalism: Stiglitz on Exploitation

Joseph Stiglitz: Economics Must Address Wealth and Income Inequality

Posted on December 17, 2014 by Yves Smith

Yves here. This interview with Joesph Stiglitz is pretty subversive for a talk with a Serious Economist. Stiglitz doesn’t simply talk about the problem of inequality, but the drivers that most mainstream economists choose to ignore, such as the rise of monopoly/oligopoly power, worker exploitation, and how central banks have allowed banks to engage increasingly in speculative rather than productive lending.

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

Nobel laureate Joseph Stiglitz has been writing about America’s economically divided society since the 1960s. His recent book, The Price of Inequality, argues that this division is holding the country back, a topic he has also explored in research supported by the Institute.  On December 4^th, Stigltiz chaired the eighth Institute for New Economic Thinking Seminar Series at Columbia University, in which he presented a paper, “New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals.” In the interview that follows, Joseph Stiglitz explores the themes of this paper, the work of Thomas Piketty, and the need for the field of economics to come to terms with the growing gulf between haves and have-nots.

Lynn Parramore: You’ve mentioned that economic inequality was the subject of your Ph.D studies. How did you come to be interested in how income and wealth get divided up in society?

Joseph Stiglitz: Firstly, when you grow up as I did in Gary, Indiana, it was sort of prototypical of a divided America. You had lot of people in poverty. We didn’t have the 1 percent, but we had the 5 percent. I had no idea what real inequality was like, but we had a lot of people at the bottom. And secondly, it goes back to the years I went to college and the Civil Rights Movement. You remember Martin Luther King’s march was a march for the end of discrimination and for economic empowerment. So I think a lot of us realized at that time that we weren’t going to fully address the problems of a divided America — of race discrimination — if we didn’t do something about the economic differentials.

LP: What’s new in your recent work on the distribution of income and wealth among individuals?

There are several things. There’s some debate about this, but I think most readers of Piketty’s book (Capital in the Twenty-First Century) get the impression that the accumulation of wealth — savings —is responsible for the rise in inequality and that there is, therefore, in a way, a link between the growth of the economy — the accumulation of capital— on the one hand and inequality and wealth. My paper begins with the observation that in fact, you cannot explain what has happened to the wealth/income ratio by that analysis. A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods.

LP: When you say “land,” you’re not talking about land in the Jane Austen sense, that is, agricultural land under the ownership of the lord of the manor.

JS: It’s not agricultural land, it’s the value of urban land, and I would include in that, broadly, rents associated with natural resources. It’s the value of existing assets. As a footnote, some of what has gone on, in addition to an increase in the wealth/income ratio, is a capitalization of the increase in other kinds of rents, like monopoly rents. If monopoly rents get increased, if the market power of firms relative to workers gets increased, as when you have the ability of a few, like the banks, to get government guarantees — the value of that is increased and gets capitalized. And that increases wealth but it doesn’t increase capital. So it’s that distinction between wealth and capital that turns out to be critical. That’s the first idea.

The reason that’s important is that you then begin an inquiry into the sources, the explanations, of why the value of the land or other sources of the value of rents would have gone up. A lot of my book, The Price of Inequality, is about why rent-seeking may have increased, but the other part is more external in terms of the value of land or the value of assets. That, I suggest, is very closely linked with the credit system. So if you get a flow of credit increasing, as we’ve seen in the last few years —that flow of credit didn’t go to more wealth accumulation as we normally use the term in economics, as capital goods. What you got is an increase in bubbles of one kind or another.

What has happened repeatedly in recent years is that we’ve had monetary authorities allowing — through deregulation and lax standards —banks to lend more, but not for creating new business, not for capital goods. The effect of it has been actually to increase the value of land and other fixed resources [buildings, real estate, etc]. Disproportionately it goes to the increase in the value of these fixed assets. And that’s what everybody was worried about. So in that sense, in that discussion that occurred with quantitative easing — nobody linked that with inequality or linked it with the overall macro growth. The links with inequality are twofold: one is that at a very, very macro level, if more of the savings of the economy leads to an increase in the value of land rather than the stock of capital goods, then worker productivity won’t go up. Wages won’t go up. So some of what is going on is that we haven’t been doing the kind of investment that we should be doing.

But the other part that’s probably more important, I would say, is that when you deregulate, you allow more lending against collateral. Then those who have the assets that can be used for collateral see those assets go up in price, like land. And so those who hold wealth become wealthier. The workers, who have no wealth, don’t benefit from that expansion. So the link is that credit affects land prices and fixed asset prices, and those go disproportionately to the rich. And that is a major part of the increase in the wealth. That’s one strand of my paper.

The other strand of the paper was an attempt to lay out a general theory of the transmission, you might say, of wealth and other advantages across generations, and trying to identify, very broadly, centrifugal and centripetal forces — forces that would lead to a more unequal distribution and forces that would lead to a more equal distribution. You could almost say it’s a taxonomy — it’s a framework for thinking through things. And when you start to think about it, you see that there are many more forces going on right now for increasing inequality. And that’s also a framework for policy prescriptions. So if we have more economic segregation in a world in which we have local schools, locally-financed schools, we’re going to get inequality in education, and therefore the children of rich parents are going to get more human capital.

This model actually provides a very robust general theory explaining inequality. There are many other wrinkles in the paper, but the final insight is that when you think of policies that are going to address inequality of wealth, you have to be very thoughtful about what economists call “incidence of taxes.”  If most of the savings is being done by capitalists, and you tax the return on capital, then they will have less to invest. That would mean, over the long run, that the rate of interest would go up. That would therefore undo some of the intent to lower the income of capitalists.

LP: How do you prevent that negative effect of taxes on capitalists?

JS: One way you might think about preventing that from happening would be making sure that the government invested — took up some of money from tax revenue and invested in capital itself. That would prevent the rate of return from rising. Not all of this is all worked out, but it’s trying to say that some of the statements that Piketty made that you should just tax capital may have been overly simplistic. One of the criticisms is that he talked a lot about r>g, and one of the points in my paper — this I showed back in ’69 — it wasn’t r>g that was the critical thing. It has to do with the savings rate and who is doing the saving. The more important point is that r itself is an endogenous variable. It will be affected by what goes on, and by policy. And therefore you can’t just say, if the savings rate were 1, then r would eventually equal g. So it’s hard to write down a model in which r would be greater than g forever.

LP: In your paper, you indicate that the power of the 1 percent to exploit the rest seems to be increasing. Why is this happening? Are there limits to this exploitation?

JS: In a more careful, academic way of putting it I would say that one of the explanations of what is going on is increased exploitation. You see the ratio of wages to productivity going way down, and that certainly is consistent with increased exploitation. And you see that the ratio of CEO pay to worker pay has gone up. So what I would say is that some of the explanations have to do with weakened worker bargaining power, weaker unions, asymmetric state liberalization where capital moves but labor can’t move, corporate governance laws that provide relatively little check on abuses of corporate power by CEOs, and an increase of monopoly power because of network externalities. So there are certainly a number of factors that would lead one to suggest that overall there is an increase in market power. There are some things where there’s more competition — because of the internet, for example, there’s more competition on the price side, but overall, when you look at the ratio of wages to productivity, there’s a marked increase in market power.

Probably there are limits — sometimes the degree of exploitation is expressed as the ratio of wages to marginal productivity of labor, and when that ratio gets down to zero – that’s a limit! What I would say is that things could get much worse if we don’t do something. That’s a relevant issue. What’s important is whether or not we’re on a path that’s looking worse and worse.

LP: You suggest that monopoly power is on the rise. What role does this play in income and wealth inequality?

JS: The holders of monopoly tend to be very concentrated. When you look at the Forbes list, the top 2 are both monopolists. (Bill) Gates got his money through monopoly power, and (Carlos) Slim got his money through monopoly power in Telemex. It’s not a statement that they weren’t efficient or they didn’t do things well. They may or may not have been innovative — there’s a lot of criticism about Microsoft but we don’t have to go there. But what we can say is that a lot of the income they got was through the exercise of monopoly power, and I don’t think anybody would doubt that. So when you look at the top, it’s monopoly power.

LP: Many neoclassical economists have argued that when people contribute to the economy, they get rewarded proportionally. Is this model breaking down?

JS: Yes. I think that the thrust of my book, The Price of Inequality, and a lot of other work has been to question the margin of productivity theory, which is a theory that has been prevalent for 200 years. A lot of people have questioned it, but my work is a renewal of questioning. And I think that some of the very interesting work that Piketty and his associates have done is providing some empirical basis for doing it. Not only the example that I just gave that if you look at the people at the top, monopolists actually constrain output. People who make the most productive contributions, people who make lasers or transistors, or the inventor of the computer, DNA researchers, none of these are the top wealthiest people in the country. So if you look at the people who contributed the most, and the people who are there at the top, they’re not the same. That’s the second piece.

A very interesting study that Piketty and his associates did was on the effect of an increase in taxes on the top 1 percent. If you had the hypothesis that these were people who were working hard and contributing more, you might say, ok, that’s going to significantly slow down the economy. But if you say it’s rent-seeking, then you’re just capturing for the government some of the rents.

LP: How can we prevent inequality from getting worse?

JS: I divide it into two parts, what can we do to reduce inequality of before-tax and transfers income and what can we do to improve the after-tax and transfers income. The first part is things like higher minimum wages, stronger unions, better education, and stronger enforcement of anti-trust laws and corporate governance laws. Those are the kinds of things that are likely to improve the before-tax and transfers income. The second part is addressing things like capital gains taxes, the preferential treatment that mainly benefits people at the very top, and better redistributive policies. Those would help the after-tax and transfers income become more equal.

Naked Capitalism: Jeb Bush’s Sweetheart Deals

Jeb Bush: The Forest Gump of Financial Improprieties?

Posted on December 18, 2014 by Yves Smith

The Financial Times has an unusual story featured prominently today. As Jeb Bush has made a soft launch of his presidential campaign, the pink paper has published a surprisingly long list of financial relationships that do not put the Florida governor in a particularly good light.

The intriguing part isn’t so much a history of dubious-looking complicated money dealings. It’s the fact that many of them are live. Jeb apparently couldn’t be bothered to clean them up. That strategy didn’t work too well for Mitt Romney, who was forced effectively to admit that his wife Ann Romney’s Olympic horse Rafalca was not a business and hence not a permissible deduction on the Romney tax returns. There was also the consternation over his failure to release five years of tax returns as would have been customary. Some theorized that it was because Romney paid no taxes in those years, but the guess among tax experts was that Romney had declared a formerly secret Swiss bank account under an amnesty program. One of the conditions of getting amnesty was refiling prior year tax returns. Those returns would be “stapled,” as in they would clearly show that the returns had originally been filed not showing the Swiss bank account, and then had been amended to included it.

The issue revealed by the Romney tax return debate, as well as the consternation about his remarks at a supposedly closed-door speech where he derided the non-income-taxpaying 47% of the US (which includes the unemployed, students and people who make too little income to be subject to income taxes but nevertheless pay FICA and sales taxes) is that even rich Republicans are not immune from scrutiny as to their financial conduct and their implicit or explicit attitude towards the non-wealthy. Despite the stereotype, not all Republican voters are rich. For instance, evangelical Christians are not the power in the party that they once were but are still far more inclined to vote Republican than Democrat.

So the issue with Jeb isn’t who he’s been in bed with financially, per se, but that he couldn’t be bothered to tidy up his record.

For my money, the stunner comes late in the article: Jeb is currently an advisor to Barclays. These big misbehaving banks tend to become all of a muchness over time, so to refresh your memory, Barclays was a central actor in the Libor price-rigging scandal. Its efforts to defy the Bank of England and implicate Paul Tucker, the heir apparent to the Governor Mervyn King’s job, led the Bank of England to force the resignation of the top three officers at Barclays, its chairman, CEO, and president. The UK’s Serious Fraud Office has filed criminal charges against three Barclays officers; one of them has been indicted in the US. The SFO is also investigating a 2008 equity infusion from the Qatar sovereign wealth fund that Barclays used to just escape a taxpayer rescue. The allegation is that Barclays paid fees to Qatar that were really tantamount to bribes and that the sovereign wealth fund and Challenger, the prime minister’s investment company, worked with Barclays to misrepresent its financial condition to regulators and the public.

But this should come as no surprise, given that Jeb was also an advisor to Lehman, and managed to dodge the bullet of being asked to intervene with his brother the President on behalf of the floundering investment bank (Dick Fuld apparently considered it when Barclays was ready to throw a lifeline but the board had imposed conditions that the Fed and Treasury weren’t prepared to meet).

As juicy but less easy to pick apart are the Jeb Bush private equity dealings, which he appears to have tried to hide as opposed to exit. BusinessWeek broke the story:

Documents filed with the U.S. Securities and Exchange Commission on Nov. 27 list Bush as chairman and manager of a new offshore private equity fund, BH Global Aviation, which raised $61 million in September, largely from foreign ­investors. In November the fund ­incorporated in the United Kingdom and Wales­—a ­structure, several independent finance lawyers say, that operates like a tax haven by allowing overseas investors to avoid U.S. taxes and regulations.

BH Global Aviation is one of at least three such funds Bush has launched in less than two years through his Coral Gables, Fla., company, Britton Hill Holdings. He’s also chairman of a $26 million fund, BH Logistics, established in April with backing from a Chinese conglomerate, and a $40 million fund involved in shale oil exploration, according to documents filed in June and first ­reported on by Bloomberg News. His flurry of ventures doesn’t suggest someone preparing to run for president, according to a dozen fund managers, lawyers, and ­private-placement agents who were ­apprised of his recent activities by Bloomberg Businessweek. Most private equity funds have a life span of 10 years. While it isn’t impossible that Bush could bail on his investors so soon after taking their money, “that would be unusual,” says Steven Kaplan, a private equity expert at the University of Chicago Booth School of Business. One fundraiser for private equity adds that normally you’d be winding down such businesses, rather than expanding them, if you were going to run.

The Financial Times added:

A trawl through corporate filings in Florida and Delaware show that Mr Bush and his partners have launched more than a half dozen investment entities under the “Britton Hill” or “BH” moniker (named after the highest point in the state of Florida) since 2008, several of which have only been set up in the past two years.

Almost all are registered at the same address at the Biltmore hotel in Coral Gables, Florida, where Mr Bush has long held an office.

While details of the total amount of money raised and the funds’ activities remain scarce, as private companies, what is publicly available show Britton Hill-linked investments have included natural gas and aviation, some in tandem with foreign investors.

Mr Bush is also a partner in “Three B Partners” with former General Motors executive Lawrence Burns, one of the leading advocates of the transformative potential of driverless cars.

While none of Mr Bush’s private equity ventures are of the size and scale that are likely to leave him vulnerable to the same kinds of charges Mr Romney faced over asset stripping and job destruction, Republican strategists have expressed concerns over his failure to close down such an obvious avenue of attack.

“Why wouldn’t you just clean this up in advance, after what happened to Mitt?” said one. “It just seems foolhardy.”

Mind you, these events come after Jeb Bush is believed to have had to defer as presidential candidate to his less-favored-within-the-family brother George, with the causes believed to be having the government pick up most of the tab on a bad real estate loan made via a savings and loan that failed* and his wife’s failure to declare to Customs her haul from a $20,000 shopping spree in Paris.

Notice that the dismay comes from the Republican camp. Mind you, it isn’t as if prominent Democrats are clean as the driven snow. It is remarkable that Turbo Timmy not only failed to clean up his non-reporting of IMF income prior to his nomination to the Treasury Secretary post, but then was cheeky enough to not pay back the underpayment that was past the statute of limitations. Played like the banker he is. And is is hard to beat Hillary Clinton’s astonishing success as a novice commodities trader in parlaying a $1000 stake into $100,000.

We’ll see in the coming months whether these improprieties make a dent in Jeb Bush’s prospects. But they are own goals and suggest a lack of seriousness about his campaign, or that Jeb assumes that the Bush name gives him more advantage than it actually does. If so, that attitude will probably show up in other gaffes.

____
* The controversy was not that the bailout was made on sweetheart terms but that the original loan was, leaving the FDIC in receivership no leverage to force a better deal. The FDIC sued over the original loan.

Common Dreams: Raping the Poor

The 6-Step Process to Wipe Out the Poor Half of America

by Paul Buchheit

One of the themes of the superb writing of Henry Giroux is that more and more Americans are becoming “disposable,” recognized as either commodities or criminals by the more fortunate members of society. There seems to be a method to the madness of winner-take-all capitalism. The following steps, whether due to greed or indifference or disdain, are the means by which America’s wealth-takers dispose of the people they don’t need.

1. Deplete Their Wealth

Recent analysis has determined that half of America is in or near poverty. This is confirmed by researchers Emmanuel Saez and Gabriel Zucman, who point out: “The bottom half of the distribution always owns close to zero wealth on net. Hence, the bottom 90% wealth share is the same as the share of wealth owned by top 50-90% families – what can be described as the middle class.”

The United States has one of the highest poverty rates in the developed world. It’s much worse since the recession, especially for blacks and Hispanics.

From 2008 to 2013 the stock market, which is largely owned by just 10% of Americans, gained 18% per year. Well-to-do stockholders get capital gains tax breaks, including a carried interest subsidy that Robert Reich calls “a pure scam.”

The bottom half of America, relying on regular bank accounts, earn about one percent on their savings.

2. Strip Away Their Income

Earnings due to workers for their years of productivity have been withheld by people in power. Based on inflation, the minimum wage should be nearly three times its current level. An investor report from J.P. Morgan noted a direct correlation between record profits and cutbacks in wages.

We hear occasional news about job growth, but low-wage jobs ($7.69 to $13.83 per hour), which made up just 1/5 of the jobs lost to the recession, accounted for nearly 3/5 of the jobs regained during the recovery. And it’s getting worse. Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree, including food service, health care, housekeeping, and retail sales.

Among rich countries, according to OECD data, the U.S. is near the bottom in both union participation and employee protection laws.

3. Take Away Their Homes

A study by the National Low Income Housing Coalition concluded that an average American renter would need to earn $18.92 per hour — well over twice the minimum wage — to afford a two-bedroom apartment. “In no state,” their report says, “can a full-time minimum wage worker afford a one-bedroom or a two-bedroom rental unit at Fair Market Rent.” Over one-eighth of the nation’s supply of low income housing has been permanently lost since 2001.

Little wonder that so many people are homeless: over 600,000 on any January night in the U.S., tens of thousands of children, tens of thousands of veterans, and one of every five suffering from mental illness.

4. Hit Them with Fines, Fees, and Fleecings

The poor half of America is victimized by the banking industry, which takes an average of $2,412 each year from underserved households for interest and fees on alternative financial services; by rental centers that charge effective annual interest rates over 100 percent; by payday lenders who charge effective annual interest rates of over 1,000 percent; and by the burgeoning prison industry, which charges prisoners for food and health care and phone calls and probation monitoring and anything else they can think of.

On top of all this, bubbly TV personalities rave about all the lottery money just waiting to be taken home. Poor families account for most of the lottery sales.

5. Criminalize Them

Matt Taibbi’s recently published book The Divide: American Injustice in the Age of the Wealth Gap contrasts the targeting of the poor for trivial offenses with a tolerance for the architects of billion-dollar financial crimes.

The U.S. court system is flooded with cases for minor infractions, including loitering charges reminiscent of the infamous Black Codes of post-slavery years. The buildup of arrests has added one out of every three U.S. adults to the FBI’s criminal database.

The poor are criminalized for lying down or sleeping in public; for sharing food; for simply having nowhere to go.

6. Most Insidious: Let Their Children Suffer

The U.S. has one of the highest relative child poverty rates in the developed world. Almost half of black children under the age of six are living in poverty. Nearly half of all food stamp participants are children. The number of homeless children has risen by 50 percent in less than ten years.

Early education is certainly part of the solution, for numerous studies have shown that pre-school helps all children to achieve more and earn more through adulthood, with the most disadvantaged benefiting the most. But even though the U.S. ranks near the bottom of developed countries in the percentage of 4-year-olds in early childhood education, Head Start was recently hit with the worst cutbacks in its history.

Meanwhile, public schools in the inner-city are being closed to satisfy the profit urges of the privatizers, who view our children as commodities. Said community organizer Jitu Brown after 50 schools were shut down in Chicago: “It has ripped black communities apart.”

Americans seek reasons for all the violence in our city streets. With so many “disposable” citizens deprived of living-wage jobs and a meaningful education and equal treatment by our system of justice, rebellion in the form of violence is not hard to understand. The privileged members of society would lash out, too, if they were stripped of everything they own and tossed into the streets.

http://www.commondreams.org/views/2014/12/15/6-step-process-wipe-out-poor-half-america