Thursday ReadsPosted: January 19, 2012 Filed under: First Amendment, morning reads, Republican presidential politics, SOPA, the internet, The Media SUCKS, U.S. Politics | Tags: Barack Obama, Cayman Islands, Chris Dodd, Chris Hedges, civil liberties, Dream Act, immigration, indefinite detention, Mitt Romney, NDAA, Newt Gingrich, PIPA, Republican Debate, SOPA, South Carolina primary, tax shelters, the Constitution, the filthy rich, undocumented workers, War on Women 39 Comments
There’s another Republican Debate in South Carolina tonight. Can you believe it? This one is hosted by CNN. How much more of this torture can American stand? These debates just keep on coming! We’ll live blog this one later on, perhaps with some interesting variations on the theme.
Speaking of horrible things that never end, can you believe Obama is considering appointing Larry Summers to head the World Bank? Here I thought we were finally free of Summers, but the guy just won’t go away. He keeps coming back, no matter how ghastly of job he does. From Bloomberg:
President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick’s term expires later this year, according to two people familiar with the matter.
Summers has expressed interest in the job to White House officials and has backers inside the administration, including Treasury Secretary Timothy Geithner and current NEC Director Gene Sperling, said one of the people. Secretary of State Hillary Clinton is also being considered, along with other candidates, said the other person. Both spoke on condition of anonymity to discuss internal White House deliberations….
A nomination of Summers would bring scrutiny of his previous stints in government, both as former President Bill Clinton’s Treasury secretary and Obama’s NEC director, as well as his tenure as president of Harvard University.
“Larry is controversial,” said Erskine Bowles, who served as Clinton’s chief of staff. “Anything you appoint Larry to, you know there are going to be some people who are going to take shots at him. But you know he’s a brilliant economist, which I think everybody recognizes.”
Oh really? If he’s so brilliant, then why is teaching college freshman? Why doesn’t he publish in academic journals? Why did he get fired by Harvard and the Obama administration? Enough with the retreads, Mr. President.
I’m sure you’ve heard by now that Mitt Romney has admitted he pays somewhere close to 15% of his income in Federal taxes. NPR’s Here and Now had an interesting discussion yesterday about how he and other richie-rich folks get away with this. I recommend listening to the show if you have time. Here’s a bit from the write-up:
“Carried interest is the way that hedge fund managers and private equity firm managers get paid when they do a deal,” Howard Gleckman of the Tax Policy Institute told Here & Now‘s Robin Young.
Gleckman says private equity firms bring in outside investors. To get in on the deals, investors pay the firms in two ways– an initial fee, and a 20 percent cut of future profits.
When the owners of private equity firms pay taxes on that compensation from the investors, they pay as if it were capital gains– so that means they are paying a top rate of no more than 15 percent.
“Ordinarily if they were paid like the rest of us in wages and salaries, they’d be paying a top rate of up to 35 percent,” he said.
Gleckman said the carried interest tax arrangement is completely legal and not uncommon.
Bob McIntyre of Citizens for Tax Justice said that this kind of income comes from work and should be taxed as such. And Gleckman agreed, saying that capital gains taxes are lower because the goal is to encourage people to risk their own money. Romney isn’t doing that.
Here’s another explanation at Bloomberg:
Romney, one of the richest men to seek the presidency, probably benefits from a controversial tax break that allows him to pay a lower overall rate than do millions of American wage-earners whose votes he’ll need to capture the White House.
That’s because private equity executives, as Romney was for 15 years when he ran Boston-based Bain Capital LLC, receive much of their compensation as “carried interest.” That enables them to treat what would be ordinary income for other service providers, taxed at rates as high as 35 percent, as capital gains taxed at 15 percent….
Yet those investments were largely made by Romney’s former partners with other investors’ money, not his personal funds. The vast majority of the resulting gains represent compensation for Bain’s work acquiring, sprucing up and selling individual companies, critics say.
“This is labor income for them, not a return on capital invested,” said Victor Fleischer, an associate law professor at the University of Colorado whose 2007 paper on the topic helped spark a move in Congress to try to change the law. “It’s a method of converting one’s labor into capital gains in a way that’s unusual outside the investment management industry. Ordinary people wouldn’t be able to do this.”
If Romney just paid his taxes like the rest of us, he’d probably be doing a much greater service to the country than if he becomes president. BTW, the articles says that Obama has paid 31% of his income in taxes for the last three years.
But that’s not all. Romney keeps millions of dollars of his vast wealth in the Cayman Islands, a well-know tax shelter.
Official documents reviewed by ABC News show that Bain Capital, the private equity partnership Romney once ran, has set up some 138 secretive offshore funds in the Caymans.
Romney campaign officials and those at Bain Capital tell ABC News that the purpose of setting up those accounts in the Cayman Islands is to help attract money from foreign investors, and that the accounts provide no tax advantage to American investors like Romney. Romney, the campaign said, has paid all U.S. taxes on income derived from those investments.
“The tax consequences to the Romneys are the very same whether the fund is domiciled here or another country,” a campaign official said in response to questions. “Gov. and Mrs. Romney have money invested in funds that the trustee has determined to be attractive investment opportunities, and those funds are domiciled wherever the fund sponsors happen to organize the funds.”
Bain officials called the decision to locate some funds offshore routine, and a benefit only to foreign investors who do not want to be subjected to U.S. taxes.
Whatever. The guy is filthy rich, pays very little of his income in taxes, and has no clue how most Americans live. His attitude is that capitalism is sacred and if millions of “little people” are hurt by the machinations of people like him, that’s just the way the cookie crumbles. And we shouldn’t have any safety nets for when things go wrong either. This man should never be POTUS.
A few more Romney items …
While he was at Bain Mitt used large donations of stock to the Mormon church to avoid paying taxes.
The New York Daily News got ahold of John McCain’s oppo research on Romney from 2008. “Talk about awkward,” the first line reads.
And here’s another awkward moment for the Mittster: Mitt Romney Allegedly Pulls Back Handshake Upon Learning That DREAM Act Advocate Is Undocumented.
Former Massachusetts Gov. Mitt Romney suddenly pulled back his hand after hearing that a young college student who greeted him at a New York fundraiser Tuesday night was undocumented, according to DREAM Act activists.
“He extended his hand to shake mine,” the young woman told The Huffington Post. “But once I said I was undocumented, he pulled his hand away from me.”
The 19-year-old college student, who asked to be identified only as Lucy because of her undocumented status, said she was also booed by Romney supporters as she was escorted out of a New York City fundraiser. One of the supporters told her to “go back to Mexico,” and she responded that she was “actually from Peru,” according to her account of the event.
Oops! There goes the Latino vote….
But we can’t forget that Romney still has at least one viable competitor for South Carolina’s delegates–food stamp obsessive and child labor advocate Newt Gingrich. Guess what Newt’s been up to? He’s using a fund-raising letter to threaten to punch out Barack Obama
Newt Gingrich’s campaign sent out a fundraising request to supporters this afternoon touting that the former speaker said he wants to knock Obama out, because, as the subject line of the email suggests, “A Bloody Nose Just Won’t Cut It.” The comment comes from a recent town hall where a questioner asked Gingrich how he would “bloody Obama’s nose.” “I don’t want to bloody his nose, I want to knock him out!” Gingrich responded. “This is exactly why Newt Gingrich is the candidate who must face Obama,” campaign spokesman RC Hammond says in the email, above a bright red “Donate” button.
You just can’t make this stuff up!
Conor Friedersdorf has an excellent response to Andrew Sullivan’s silly Newsweek article defending Obama’s accomplishments as President. I think Friedersdorf is a liberatarian, but his assessment on Obama is still on point. Check it out. I’ll just reproduce his list of Obama’s “accomplishments” here:
(1) Codify indefinite detention into law; (2) draw up a secret kill list of people, including American citizens, to assassinate without due process; (3) proceed with warrantless spying on American citizens; (4) prosecute Bush-era whistleblowers for violating state secrets; (5) reinterpret the War Powers Resolution such that entering a war of choice without a Congressional declaration is permissible; (6) enter and prosecute such a war; (7) institutionalize naked scanners and intrusive full body pat-downs in major American airports; (8) oversee a planned expansion of TSA so that its agents are already beginning to patrol American highways, train stations, and bus depots; (9) wage an undeclared drone war on numerous Muslim countries that delegates to the CIA the final call about some strikes that put civilians in jeopardy; (10) invoke the state-secrets privilege to dismiss lawsuits brought by civil-liberties organizations on dubious technicalities rather than litigating them on the merits; (11) preside over federal raids on medical marijuana dispensaries; (12) attempt to negotiate an extension of American troops in Iraq beyond 2011 (an effort that thankfully failed); (14) reauthorize the Patriot Act; (13) and select an economic team mostly made up of former and future financial executives from Wall Street firms that played major roles in the financial crisis.
Unfortunately, he didn’t include Obama’s many contributions to the war on women.
Speaking of Obama’s war on the Constitution, Chris Hedges is going to court to sue Obama over the indefinite detention portion of the NDAA.
Attorneys Carl J. Mayer and Bruce I. Afran filed a complaint Friday in the Southern U.S. District Court in New York City on my behalf as a plaintiff against Barack Obama and Secretary of Defense Leon Panetta to challenge the legality of the Authorization for Use of Military Force as embedded in the latest version of the National Defense Authorization Act, signed by the president Dec. 31.
The act authorizes the military in Title X, Subtitle D, entitled “Counter-Terrorism,” for the first time in more than 200 years, to carry out domestic policing. With this bill, which will take effect March 3, the military can indefinitely detain without trial any U.S. citizen deemed to be a terrorist or an accessory to terrorism. And suspects can be shipped by the military to our offshore penal colony in Guantanamo Bay and kept there until “the end of hostilities.” It is a catastrophic blow to civil liberties.
I spent many years in countries where the military had the power to arrest and detain citizens without charge. I have been in some of these jails. I have friends and colleagues who have “disappeared” into military gulags. I know the consequences of granting sweeping and unrestricted policing power to the armed forces of any nation. And while my battle may be quixotic, it is one that has to be fought if we are to have any hope of pulling this country back from corporate fascism.
Thanks to Hedges for putting his money where his mouth is.
I’ll end with this piece from Reuters: Sunk! How Hollywood Lost the PR Battle Over SOPA.
In the space of a couple of days, Hollywood and its content creators lost the public relations war over Internet piracy SOPA legislation — which now appears poised to crumble into a million bits of dust.
The messaging industry never had control of the message.
The tech guys found a simple, shareable idea — the Stop Online Piracy Act is Censorship — made it viral, and made it stick.
Hollywood had Chris Dodd and a press release. Silicon Valley had Facebook.
It shouldacoulda been a fair fight. But it wasn’t.
It seems that Hollywood still does not realize that it is in the information age. Knowledge moves in real time, and events move accordingly. The medium is the message in a fight like this.
I disagree that the fight is over, but it’s nice to see the battle for free speech and privacy getting some corporate media ink.
So … what are you reading and blogging about today?
NY Rally Speakers highlight Core Democratic ValuesPosted: April 15, 2011 Filed under: Democratic Politics, financial institutions, Global Financial Crisis | Tags: Chris Hedges, Liberal Values, Wall Street scandals 4 Comments
A rally in NYC today highlighted issues and concerns that have been going unaddressed for some time in this country. The Nation highlights some of the featured speakers including Chris Hedges who says that President Obama is defying those core values supported by Democratic voters.
Pulitzer Prize-winning journalist Chris Hedges also spoke at the rally. Beforehand, I asked him if he thinks acts of civil disobedience such as the Wisconsin union protests are the only paths of recourse Americans have left to fight for change. “There’s a moral imperative to carry them out,” says Hedges. “[I]f we don’t begin to physically defend the civil society, all resistance will be ceded to very proto-fascist movements such as the Tea Party that celebrate the gun culture, the language of violence, seek scapegoats for their misery.”
He calls the state of America an “anemic democracy,” and says it’s time for citizens to get off the Internet and occupy the streets because their leaders no longer represent them. Politicians have spoken incessantly about the need for shared sacrifice when in fact they’re guarding a plutocracy that levies the burden of budget cuts on the shoulders of the poor. This is a system in which Bank of America’s CEO Brian Moynihan gets a $9 million bonus while one in four American children survives on food stamps.
Hedges calls the idea of shared sacrifice farcical. “[Bank of America] sends out home invasion teams to throw Americans out of their homes through bank repossessions or foreclosures, and of course many of these people were given loans that the lenders knew they could never repay often under fraudulent conditions…and yet there has been absolutely no investigation — no criminal charges — brought against these corporations.”
We live in a corporate state, Hedges stresses, both in our interview and later when he takes the stage. “Not only the money, but the wages, and retirement benefits, $17 trillion worth have been robbed by these financial institutions. It’s repugnant.”
And the one in six Americans without a job aren’t the ones going to raise money to get President Obama reelected. The money, Hedges says, will come from the corporate state, what he calls the “predators.” Hedges says President Obama serves their — not our — interests.
Obama’s most recent budget speech, in which he adopted some of the populist rhetoric about raising taxes on the wealthy, didn’t impress Hedges. After all, it was Obama who extended the Bush era tax cuts for the wealthy. “To watch him sort of talk out of both sides of his mouth is a little disconcerting,” says Hedges. “I fear, like most people, that not only are we going to see an extension of those cuts, but they’ll be cemented into place permanently.” Like many in the liberal class, Hedges says Obama “speaks in the rhetoric of traditional liberalism, but every action he takes defies the core values of the liberal tradition.”
Other groups also questioned the current economic policies dominating our national conversation. Some of the most persuasive speech was associated with the financial crisis and its perpetrators.
Dave Petrovich, executive director of the Society For Preservation of Continued Homeownership, agrees with that sentiment. “The president, and most of our lapdog Congress, are employees of the banking industry, so they’re not going to really discuss this unless it’s in their own financial self-interest.” Bank of America was once again a central target of the protest since the company hasn’t paid a nickel in federal income taxes in the past two years and received a “income tax refund from hell” of $666 million for 2010. The protesters demand to know why a company that received $45 billion in taxpayer money during the bailout now gets to play by a different set of tax rules, while simultaneously paying out obscene bonuses to its CEO and kicking hardworking Americans out of their homes
There’s something fundamentally wrong with a system that bails out perpetrators of mass fraud and destruction and applauds the removal of safety nets from its victims. This started me thinking that maybe we should come up with a list of what we consider liberal and democratic values. Frankly, I consider civil liberties, respect for the Bill of Rights, and provision of services essential to public health, safety, and education to be central. I also consider the idea that liberty and justice for all means for ALL and not just the rich and powerful. It’s been apparent from that Goldman Sachs and Bank of American can get bailed out for all kinds of crime. What kinds of things do you think should go on the list?
Saturday Reads: On the Bright Side of the Dark SidePosted: January 1, 2011 Filed under: Civil Liberties, Environmental Protection, Health care reform, Hillary Clinton: Her Campaign for All of Us, Iraq, U.S. Politics, Women's Rights | Tags: 2011, Airport security, Aldous Huxley, Baby boomers, Brazil, Chris Hedges, Dilma Rousseff, Ellis Island, Jon Huntsman, No Profit Left Behind, Orwell, Rabindranath Tagore, Scott sisters, TSA 11 Comments
Good evening and a Happy 2011, Sky Dancers.
Here are my Saturday offerings for the New Year. There’s a lot of doom and gloom in the headlines, so I tried to mix in a few stories and thoughts of my own to put things into a more motivating and thoughtful perspective.
From McClatchy: “2011 looks grim for progress on women’s rights in Iraq… BAGHDAD — When Iraqi Prime Minister Nouri al Maliki introduced what he called a national partnership government two weeks ago, he included allies and adversaries, Arabs and Kurds, Shiite Muslims and Sunnis. One group, however, was woefully underrepresented. Only one woman was named to Maliki’s 42-member cabinet, sparking an outcry in a country that once was a beacon for women’s rights in the Arab world and adding to an ongoing struggle over the identity of the new Iraq.“
From further down in the article: “After Maliki announced his lineup, Alaa Talabani, a female lawmaker from the northern Kurdistan region, delivered a rousing condemnation of the selection process to a packed legislative chamber. ‘The Iraqi women feel today, more than any other day, that democracy in Iraq has been slaughtered by discrimination, just as it was slaughtered by sectarianism before,’ Talabani said, her voice quaking with emotion.”
“…slaughtered by discrimination, just as it was slaughtered by sectarianism.” That is a powerful statement.
It reminds me of this Hillary quote: “To expand freedom to more people, we cannot accept that freedom does not belong to all people. We cannot allow oppression defined and justified by religion or tribe to replace that of ideology.” –Secretary of State Hillary Clinton, in Berlin for the 20th anniversary of the wall’s collapse
The words of both Alaa Talabani and Hillary Clinton above make me think of dry drunks and switching addictions. It is as if there is a certain quotient of oppression junkies out there who just go from one form of subjugating others to the next.
Which brings me to my next link. From Chris Hedges’, a few days ago, at truth-out… “2011: A Brave New Dystopia… The two greatest visions of a future dystopia were George Orwell’s ‘1984’ and Aldous Huxley’s ‘Brave New World.’ The debate, between those who watched our descent towards corporate totalitarianism, was who was right. Would we be, as Orwell wrote, dominated by a repressive surveillance and security state that used crude and violent forms of control? Or would we be, as Huxley envisioned, entranced by entertainment and spectacle, captivated by technology and seduced by profligate consumption to embrace our own oppression? It turns out Orwell and Huxley were both right. Huxley saw the first stage of our enslavement. Orwell saw the second.”
My apologies if another frontpager or commenter has already spotlighted Hedges’ piece and I missed it, but I think this is important enough a read to merit a repeat linking.
Speaking of our impending total enslavement, Derek Kravitz at the Washington Post reports that “As frustration grows, airports consider ditching TSA… Some of the nation’s biggest airports are responding to recent public outrage over security screening by weighing whether they should hire private firms such as Covenant to replace the Transportation Security Administration. Sixteen airports, including San Francisco and Kansas City International Airport, have made the switch since 2002. One Orlando airport has approved the change but needs to select a contractor, and several others are seriously considering it. The Metropolitan Washington Airports Authority, which governs Dulles International and Reagan National airports, is studying the option, spokeswoman Tara Hamilton said. For airports, the change isn’t about money. At issue, airport managers and security experts say, is the unwieldy size and bureaucracy of the federal aviation security system. Private firms may be able to do the job more efficiently and with a personal touch, they argue.”
No Profit Left Behind strikes again.
Oh, and it strikes here too — from Alan Johnson at the Columbus-Dispatch — “Kasich emphasizes ‘business’: Governor-elect wants to ‘exploit’ resources, picks EPA, DNR chiefs… Kasich, a former Republican congressman who will take office Jan. 10, emphasized that he doesn’t plan to empower business at ‘the cost of environmental degradation.’ But in the next breath, he said he wants to ‘exploit the wonders of our state.'”
Exploit? Way to thread the business vs. environment needle ever so delicately. Teddy R. has got to be rolling in his grave when he sees today’s Republican party.
Moving along and keeping with the theme from Chris Hedges’ piece, this headline from Raw Story: “Judge warns of ‘Orwellian state’ in warrantless GPS tracking case… Police in Delaware may soon be unable to use global positioning systems (GPS) to keep tabs on a suspect unless they have a court-signed warrant, thanks to a recent ruling by a superior court judge who cited famed author George Orwell in her decision. In striking down evidence obtained through warrantless GPS tracking, Delaware Judge Jan R. Jurden wrote that ‘an Orwellian state is now technologically feasible,’ adding that ‘without adequate judicial preservation of privacy, there is nothing to protect our citizens from being tracked 24/7.’ The ruling goes against a federal appeals court’s decision last summer that allowed warrantless tracking by GPS.”
Sounds like this judge in Delaware just may be looking out for us. So a little silver lining there.
In other uplifting reads… the Gray Lady has a very sentimental editorial today called “A Year Anew.”
From the link:“By now, of course, 2010 feels like a completely familiar, totally used-up year. But why does 2011 still sound like an annum out of science fiction? It’s not as though 2011 is a remoter outpost in the hinterland of the future than, say, 1971 was. Yet here we are in the second decade of the 21st century, living in the very future we tried to imagine when we were young so many years ago. Surely we must have colonies throughout the solar system by now. Surely hunger is no more, and peace is planet-wide. The coming of the new year reminds us, again, that we live, as we always have, somewhere on a sliding scale between utopia and dystopia and that we continuously carry our burdens and opportunities with us. 2011 is merely a new entry in our ancient custom of chronological bookkeeping, an arbitrary starting point for our annual trip around the sun. But it is also so much more. Who can live without fresh intentions, new purposes? Who does not welcome a chance to start over, if only on a new page of the calendar? Life goes on, but it goes on so much better with hope and renewal and recommitment. Last night was a night for banishing regrets. Today is for wondering how to live without new ones, how to do right by ourselves and one another.”
It’s probably nothing more than a neat little moment of synchronicity, but while reading the above, I couldn’t help but picture someone on the NYT editorial board reading Hedges’ column, getting depressed and a little drunk, and then deciding to respond with this editorial.
Next up from today’s Gray Lady, Bob Herbert has an op-ed on the suspension of the Scott sisters’ prison terms — “For Two Sisters, the End of an Ordeal… What is likely to get lost in the story of the Scott sisters finally being freed is just how hideous and how outlandish their experience really was. How can it be possible for individuals with no prior criminal record to be sentenced to two consecutive life terms for a crime in which no one was hurt and $11 was taken? Who had it in for them, and why was that allowed to happen? The Scott sisters may go free, but they will never receive justice.”
Those are good questions, but I doubt we will ever find any answers to them.
I saw a bunch of new year’s stories on Baby Boomers. I’m just going to link to a few of them without excerpting:
“Boomers Hit New Self-Absorption Milestone: Age 65” (NYT)
“Baby Boomers Expected to Drain Medicare” (ABC)
“Baby Boomers helped democratize art” (USA Today)
With so many of the headlines being so hostile toward boomers, like the NYT and ABC ones, I was glad to see that last one from USA Today. I think all the demonization along generational lines is such a waste.
I have a couple more quick links before I wrap this up.
Over in Brazil, some exciting news. President Dilma Rousseff is sworn in! From Newsday: “Brazil’s first female president vows to end poverty.”
Newsweek has an interesting piece — “The Manchurian Candidate: When Barack Obama posted Jon Huntsman to Beijing, it looked like a crafty way to sideline a 2012 rival. Don’t bet on it.”
I hope commenter Pilgrim catches this one! I know she’s a Huntsman fan.
From Raw Story — “Kucinich: GOP’s anti-health reform push may fuel Medicare-for-all drive.”
Here’s hoping against Hope on that one.
And on that note, your historical trivia for January 1st. On this day in 1892… The Ellis Island Immigrant Station in New York opened.
I’d like to close with this verse from Tagore on this New Years…
MIND WITHOUT FEAR
(Gitanjali, Verse 35)
Where the mind is without fear and the head is held high;
Where knowledge is free;
Where the world has not been broken up
into fragments by narrow domestic walls;
Where words come out from the depth of truth;
Where tireless striving stretches its arms towards perfection;
Where the clear stream of reason has not lost its way
into the dreary desert sand of dead habit;
Where the mind is led forward by thee into ever-widening
thought and action-
Into that heaven of freedom, my Father, let my country awake
Hope you are having a peaceful entry into the new year. Drop a note and let us know what you’re reading and thinking about in the comments if you get a chance.
A little Economics this and that …Posted: December 27, 2010 Filed under: Catfood Commission, Civil Liberties, Civil Rights, The Media SUCKS, U.S. Economy, U.S. Politics, Voter Ignorance, We are so F'd, WE TOLD THEM SO | Tags: AFL-CIO, Chris Hedges, commodity prices, Paul Krugman, wealth gap 44 Comments
I thought I’d post a little end of the year economics stuff just in case you need a nap!!
I’ve been writing for around a year about a possible bubble in commodity prices but a definite increases in base commodity prices coming shortly. Now, this doesn’t necessarily mean it will involve an increase in over all inflation because these price increases are mostly in the already volatile areas of food and energy which are considered outside the ‘core’ inflation measures because they tend to bump and shuffle a lot. This is from Paul Krugman in his column: “The Finite World”.
Oil is back above $90 a barrel. Copper and cotton have hit record highs. Wheat and corn prices are way up. Over all, world commodity prices have risen by a quarter in the past six months.
Is it speculation run amok? Is it the result of excessive money creation, a harbinger of runaway inflation just around the corner? No and no.
What the commodity markets are telling us is that we’re living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. And America is, for the most part, just a bystander in this story.
Krugman goes on to explain how booms in the economies of developing nations is causing increased Demand for certain commodities. This simply means the price will go up when the supply is limited for some reason or another. Some times the supply is slow to increase because of production considerations or inventory considerations. Other times the supply is limited just because there is a finite amount of it on the planet. Some of this may also be due to the market taking in the impact of those just passed subsidies to corn-based ethanol which take farm land out of food/other crop production and funneling it to corn production, This decreases the supply of wheat, soybeans, and cotton too.
And those supplies aren’t keeping pace. Conventional oil production has been flat for four years; in that sense, at least, peak oil has arrived. True, alternative sources, like oil from Canada’s tar sands, have continued to grow. But these alternative sources come at relatively high cost, both monetary and environmental.
Also, over the past year, extreme weather — especially severe heat and drought in some important agricultural regions — played an important role in driving up food prices. And, yes, there’s every reason to believe that climate change is making such weather episodes more common.
Krugman concludes with the important question of what does this mean for us?
So what are the implications of the recent rise in commodity prices? It is, as I said, a sign that we’re living in a finite world, one in which resource constraints are becoming increasingly binding. This won’t bring an end to economic growth, let alone a descent into Mad Max-style collapse. It will require that we gradually change the way we live, adapting our economy and our lifestyles to the reality of more expensive resources.
But that’s for the future. Right now, rising commodity prices are basically the result of global recovery. They have no bearing, one way or another, on U.S. monetary policy. For this is a global story; at a fundamental level, it’s not about us.
Yes. The world economy is “not about us” any more. So many other countries now have huge viable economies that we are no long the center of the Supply and Demand world like we were post World War 2. This is definitely going to take some adjusting on our part and some ignoring of the rhetoric of the right on our country’s role in the world. We can not continue to maintain the idea of American Exceptionalism in its current form given that we are really no longer exceptional in many, many ways. That adaptive behavior does not diminish our historical role as the original provider of Democracy-based Constitutions and Civil Liberties or our military role in freeing many countries from monarchy and fascism in both world wars.
We can continue to pour our resources and the lives of our young into asserting ourselves as the global military police in attempt to maintain our delusion of being ‘special’, or we can put our resources into assuring ourselves and our children a comfortable niche in the world with a respected voice at a big table. The Right Wing has to understand that we don’t own the table anymore. If only our politicians would grow up enough to make the best choice for us instead of deluding us into thinking that we’ll ever see post World War 2 America again.
I want to couple this with something I got in a tweet from the AFL-CIO: ‘U.S. Workers Earned Less in 2009 Than in 2008’. This goes along with the fact that many things we could finance or buy twenty to thirty years ago will elude us today.
New data show America’s workers earned less in 2009 than in 2008, according to the Bureau of Labor Statistics. Compensation was down by 3.2 percent in 2009 with declines in construction and manufacturing fueling the plunge. St. Louis County, the hardest hit, saw a decline of 11.5 percent.
For those lucky enough to have a job, average pay increased by 1.2 percent. But overall income inequality is now at its worst since 1928. As the chart by the Economic Policy Institute (EPI) shows here, between 1979 and 2005, households at the bottom fifth of the income scale have seen an average, inflation-adjusted income growth of just $200. The $200 figure does not represent an average annual increase in income, but rather an increase of $200 over the entire 26-year period. By contrast, a small number of households at the top 0.1% of the income scale saw average income growth of almost $6 million over that same period.
In addition, the “wealth gap,” which differs from the income gap because it measures total net worth, is now 225 times greater between the richest 1 percent and the median family net worth.
Lest we forget, corporations are sitting on $1.93 trillion as of Sept. 30—up from $1.8 trillion at the end of June–and not using some of that money pot to create jobs.
The bottom is falling out for the middle classes in this country. Income inequality is as bad as it was in 1928 during the peak of the Robber Baron age. There is no way we’ll have a shot at seeing ‘morning again in America’–even one concocted from a senile man’s political rhetoric–without a strong middle class. This is one of the reasons that I highly recommend your holiday reading included Chris Hedges ‘Death of the Liberal Class’. Here’s Sanctuary TV’s you tube on his explanation the “genesis of the book”. Wonk mentioned some of his thesis in her excellent post yesterday.
The ‘lies of omission’ that we see in the Main Stream Media today makes this imperative that we have conversations outside of channels that are controlled by for-profit corporations. Listen in to the video at around 2:45.
Most of the images that are disseminated around our culture are skillfully put together and are disseminated by for profit corporations so that we are made to …or we confuse … how we are made to feel with knowledge. Which is precisely how ended up with Barrack Obama.
This is especially true with things economic. I had a conversation with my Republican Dad yesterday which ended up with him accusing me of sounding just like the Democrats after the Great Depression. (I will wear that badge proudly, thank you.) I was trying to explain to him how Social Security isn’t going bankrupt, that the overages are invested in T-bonds and T-bills and that isn’t the same as massive borrowing from the fund by the federal government, and that if social security can’t rely on the interest and their capital invested in T-bonds or T-bills in the future, we will undoubtedly have a much greater problem than having smaller social security checks. (My guess is that we would be in the middle of a government collapse similar to what happened to the USSR in the 1980s.) Dad kept accusing me of living in the theoretical world of economics–me, an empirical economist–when I kept telling him it was just a matter of debits and credits which are anything but theoretical economics.
The deal is this if you read studies, and follow the debits and the credits. The threat to social security isn’t coming from its cash flows. It’s coming from the politicians in Washington, D.C. and it appears that it will shortly be led by the aforementioned Barrack Obama. Some of these people seem intent on collapsing our Republic and its democratic roots. These Bircher-like attacks on the New Deal are real attacks on the ways the government–through New Deal Policies, Laws, and Agenciess- levels the economic playing field for small businesses and working class people. This is the same way that Bircher-like attacks on Civil Rights attacks the ways the government levels the legal playing field for minorities and women.
Again, I’m drawn to the quote most attributed to the late great Senator Patrick Monihan. People and politicians are entitled to their opinions but not the facts. The problem is that fact manufacturing–or labeling political diatribes by media monsters like Glenn Beck–appears to be rampant in the very outlet that provides the life blood of our democracy.
This maldescriptions of unemployment, the role and purpose and very political independence of the Fed are more features of this misinformation campaign. I’m going to further reference Paul Krugman and his economist yogini–yup, there’s at least two of us out there–wife Robin Wells here. They co-authored an excellent essay on “Where do We Go from Here” in The New York Review of Books. This part comes after their joint call to the Democratic congress critterz–left standing from the midterms elections–to fight.
First, it would mean fighting on economic issues. While it is extremely unlikely that Democrats can undertake any further fiscal stimulus, they can put Republicans on the spot, resisting calls for austerity and making the case, repeatedly, that the GOP is standing in the way of necessary action. The fight over renewal of unemployment benefits should be only the start. Democrats can also denounce Republican attacks on the Federal Reserve and defend the Fed’s independence. They can resist attempts to turn back health care reform, on both humanitarian and long-term budgeting grounds, as health care reform is the critical factor in reining in the long-term budget deficit.
Health Care Reform Inc. could be one more rung on the ladder for the middle class on the ladder back to upwards mobility. Instead of repealing the now unpopular bill, we should be working actively to get the right things into its corporate enabling shell. That would be–at minimum–a Public Option. We have to get them to fight on Economic issues. Also, we desperately need to deal with Fannie and Freddie. These organizations used to be the way to home ownership for working class Americans. I stand proudly as an example in that regard. My little kathouse in the bayou in the middle of a solid urban hood shines as a beacon of what those things were supposed to do before they started manufacturing loans to the derivatives market.
And there are steps that the White House could take without congressional approval. Democrats could pressure the administration to fix the inexcusable mess at the HAMP (mortgage modification) program—a program whose Kafkaesque complexity has in many cases made matters so bad for home owners that it has triggered the foreclosures it was supposed to avoid. In addition, mortgage relief would benefit the wider economy. Furthermore, the scope of mortgage relief could be made much wider if Fannie Mae and Freddie Mac were used to guarantee mortgage refinancing. Other proposals go even further: for example, that Fannie and Freddie engineer reductions in mortgage principals. All of this could be done, conceivably, by executive order.
What we are seeing is a brick by brick removal in the walls that support the social net built during the New Deal that helped America become the thing it was during the 1950, 1960s and 1970s. Yes, we helped many countries get rid of Nazis and Fascist and this did make us some what exceptional at the time, but ushering in the very policies and attitudes of fascism does not make us the least bit exceptional now. It weakens the very people that make for a vibrant Democracy. Also, given that the Wikileaks information has been the soul source recently of unmanufactured news and opinion passed off as fact, it also gives us a glance at why the rest of the planet has ceased to see the US as exceptional too.
To paraphrase the words of Common Dreams and Margaret Flowers: We Must Resist. Okay, so this essay was a little Political Economy and not just economics. You awake?
I get to update this post with a link to one of the more influential ‘liberal’ economist who is also writing on the changes in the Political Economy at Project Syndicate. Here’s something from Jeffrey D. Sachs writing on ‘America’s Political Class Struggle’. You may recall that both Krugman and Sachs were called to the Obama woodshed a few weeks ago and told to get on board with the McConnell-Obama tax cuts.
America is on a collision course with itself. This month’s deal between President Barack Obama and the Republicans in Congress to extend the tax cuts initiated a decade ago by President George W. Bush is being hailed as the start of a new bipartisan consensus. I believe, instead, that it is a false truce in what will become a pitched battle for the soul of American politics.
As in many countries, conflicts over public morality and national strategy come down to questions of money. In the United States, this is truer than ever. The US is running an annual budget deficit of around $1 trillion, which may widen further as a result of the new tax agreement. This level of annual borrowing is far too high for comfort. It must be cut, but how?
The problem is America’s corrupted politics and loss of civic morality. One political party, the Republicans, stands for little except tax cuts, which they place above any other goal. The Democrats have a bit wider set of interests, including support for health care, education, training, and infrastructure. But, like the Republicans, the Democrats, too, are keen to shower tax cuts on their major campaign contributors, predominantly rich Americans.
The result is a dangerous paradox. The US budget deficit is enormous and unsustainable. The poor are squeezed by cuts in social programs and a weak job market. One in eight Americans depends on Food Stamps to eat. Yet, despite these circumstances, one political party wants to gut tax revenues altogether, and the other is easily dragged along, against its better instincts, out of concern for keeping its rich contributors happy.
This tax-cutting frenzy comes, incredibly, after three decades of elite fiscal rule in the US that has favored the rich and powerful. Since Ronald Reagan became President in 1981, America’s budget system has been geared to supporting the accumulation of vast wealth at the top of the income distribution. Amazingly, the richest 1% of American households now has a higher net worth than the bottom 90%. The annual income of the richest 12,000 households is greater than that of the poorest 24 million households.
Please go read the rest of the article. I think this shows further evidence that Obama didn’t placate liberal economists.