WAKE UP, AMERICA!

Principled advocacy of the free market requires an understanding of the differences between genuine free enterprise and “state capitalism.” Although the Left frequently exaggerates and overemphasizes the evils of corporate America, proponents of the free market often find themselves in the awkward position of defending the status quo of state capitalism, which is in fact a common adversary of the free marketer and the anti-corporate leftist, even if the latter misdiagnoses the problem and proposes the wrong solutions.

Indeed, corporatism, implemented by the state – whether through direct handouts, corporate bailouts, eminent domain, licensing laws, antitrust regulations, or environmental edicts – inflicts great harm on the modern American economy. Although leftists often misunderstand the fundamental problem plaguing the economy, they at least recognize its symptoms.

Conservatives and many libertarians, on the other hand, frequently dismiss many ills such as poverty as fabricated by the left-liberal imagination, when in fact it does a disservice to the cause of liberty and free markets to defend the current system and ignore very real and serious problems, which are often caused by government intervention in the economy. We should recognize that state corporatism is a form of socialism, and it is nearly inevitable in a mixed economy that the introduction of more socialism will cartelize industry and consolidate wealth in the hands of the few.

Leftists usually understand how wartime provides politically connected corporations with high profits and cushy contracts. What is more often neglected is that the history of the American domestic welfare and regulatory state also corresponds closely to the rise of corporatism. It is no coincidence.

Corporatism versus liberty in the 19th century

Throughout the 19th century, the two major political traditions in America offered authentically different views on the proper roles of government. The classical liberals, typified by Thomas Jefferson early on, had their political outlet in the Democratic Party, which, for the most part, stood on the side of limited, constitutional government and individual rights. Those who believed in a strong central government, typified early on by Alexander Hamilton, found their political home first in the Federalist Party, then in the Whig Party, and then in the Republican Party, the last of which openly embraced the doctrine of big government throughout the 19th century.

For about a hundred years the Jeffersonian tradition was mostly associated with the cause of the common man, whereas big government was often associated with monopoly privileges and big business. Hamilton and his philosophical progeny fought perennially for central banking, high tariffs, and subsidies to corporations to build “internal improvements.” Hamilton’s first major successor, Henry Clay, called this governmental corporate program the “American System.”

By the end of the 19th century, the so-called robber barons came to dominate much of the industry in oil and railroads. Misunderstood by nearly everyone, they were neither demons on earth nor flawless gods. They certainly were not a homogeneous group nor were they champions of pure laissez-faire capitalism. Most notably, the federal government empowered the railroad tycoons with eminent domain, forcibly taking privately owned land and giving it to the railroad companies. That was not the free market at work.

The Progressive Era

The Left has often hailed the Progressive Era as a time when, for the first time, Hamiltonian means – big government – were used to achieve Jeffersonian ends – the dignity and respect of the common man. In fact, the Progressive Era was a time in which both corporatism and socialism received major steroid injections.

Corporate interests pushed through the most significant Progressive-Era government reforms in order to guarantee profits, which they had been losing to smaller businesses that had emerged in the relatively free market of the early 20th century. Gabriel Kolko’s groundbreaking book The Triumph of Conservatism best advances this thesis of how the government expanded to accommodate, rather than curb, the interests of big business. Though a New Leftist, Kolko shows how political capitalists in every industry – from meatpacking to coal, from railroads to insurance – embraced the expanding regulatory state for their own gain – to push competitors out of the market and give government legitimacy to their companies.

Kolko shows how, in spite of the conventional history that characterizes the Progressive Party’s nomination of Teddy Roosevelt in 1912 as a response to the backwards laissez-faire William Howard Taft administration, in reality the party was favored by large businesses with whom Teddy Roosevelt had strong ties and whom Taft had alienated by failing to accommodate and empower through the regulatory state.

Perhaps no government reform has been more misconstrued as anti-business populism than the Federal Reserve, which was sold to the American people in 1913 as an agency to regulate greedy and irresponsible bankers. As Kolko and many others have shown, the Federal Reserve established a banking oligopoly, guaranteed bailouts for the big bankers, created new barriers to entry for smaller bankers, and was in fact designed by people representing some of the most powerful banking interests in the world, including the National City Bank of New York; Kuhn, Loeb & Company; J.P. Morgan Company; and the First National Bank of New York.

The New Deal

Both Franklin Roosevelt’s admirers and his detractors often think of his New Deal legacy as generally socialistic. Like the Progressive Era, the New Deal is widely misunderstood: it did indeed attack the free market, but often did so at the behest of corporate interests.

Such interests were largely behind the emergence of the National Recovery Administration, which exemplified FDR’s economic central planning. Far from being a purely egalitarian agency, the NRA was largely modeled after the policies of Mussolini, who had yet to be considered an enemy by most Americans, but rather was still seen as an inspiration by many. As John Flynn explained in his book, The Roosevelt Myth,

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc. The NRA provided that in America each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. But it was essentially the same thing. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. This was fascism. The anti-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now he suspended them and compelled men to combine.

Though the NRA intended to guarantee profits through mergers and price controls – forbidding smaller business from competing by offering better prices – big business, big labor, and most other initial supporters turned against the NRA when it became universally recognized as a complete failure. In 1935 the Supreme Court found it unconstitutional. Aside from the NRA, other New Deal measures epitomized naked corporatism. The Agricultural Adjustment Administration cartelized the farming industry, and Roosevelt’s farm subsidies and price supports have to this day helped to solidify a corporate stronghold in American agriculture.

Corporatism and socialism in today’s America

In more recent years, corporate interests have often cheered on big government programs, often the same ones championed by those who consider themselves anti-corporate. In the late 1990s, the now-defunct Enron was one of the largest lobbying influences behind the international Kyoto Treaty, which would have forced the world to comply with a ghastly web of new regulations and would have meant large energy contracts for Enron, had the company not gone bankrupt. The antitrust breakup of Microsoft was a de facto giveaway to competitors such as Netscape. (One of the complaints about Microsoft was that it intended merging with AOL, a company with which Netscape has since joined forces.)

Bush’s farm subsidies are direct welfare for the biggest agricultural corporations, and his protectionist trade policies are indirect welfare for politically favored businesses. His recent expansion of Medicare has been both the greatest augmentation of the American welfare state in decades and a giveaway to large pharmaceutical corporations. If universal health care ever comes to America, the corporations are likely to stay intact but will no longer have to satisfy customers, only the politicians.

To convince the anti-corporate skeptic of the benefits of the free market, it is crucial to defend the legitimate systems of profit and private property, but it is also vitally important to make clear that America doesn’t have a free-market economy, and indeed many of the ills associated with free markets are actually the result of state capitalism – or socialist corporatism. That the expansion of government regulations, often done in the name of combating corporate excesses, is frequently supported most enthusiastically by corporate interests makes it all the easier to explain economic liberty to those who have become disenchanted with the current system and misattribute the problems to the free market.

February 24, 2005

Anthony Gregory [send him mail] is a writer and musician who lives in Berkeley, California. He is a research assistant at the Independent Institute. See his webpage for more articles and personal information. Reprinted from The Future of Freedom Foundation with permission.

Copyright © 2005 The Future of Freedom Foundation

Anthony Gregory Archives

Green Party calls Dem Prez candidates “universal” health care proposals a fraud

Dem plans are really billion-dollar subsidies for HMO-insurance campaign contributors, say Greens

Green Party leaders strongly criticized Democratic Presidential candidates’ health care reform plans, calling them a capitulation to private HMO and insurance corporations and an affront to Americans who lack adequate access to health care.  The Green Party called the Democratic Presidential Candidates’ plans expensive and inefficient because of the duplication of administrative costs of multiple plans and because they offer fewer services in deference to profits. The US currently spends more that twice what other industrialized nations spend on health care: $7,129 per capita — which would change only minimally under the Democratic plans.

The Green Party supports a Single-Payer national health plan, also called ‘Medicare For All,’ similar to the Canadian system, which would guarantee every American health care regardless of age, income, employment, or prior medical condition; allow choice of health care provider; provide low-cost or no-cost treatment and prescriptions (including certain forms of alternative medicine); and cost low- and middle-income Americans far less than they now pay for private or employer-based coverage by eliminating insurance and HMO company overhead.

“Senator Clinton’s $110-billion-per-year ‘mandatory coverage’ plan amounts to a gigantic subsidy for the HMO-insurance industry, while shifting the burden — and the blame for lack of coverage — onto people who desperately need health care,” said John Battista, MD, former Green Party candidate for state representative in Connecticut and co-author of his state’s single-payer legislation in 1999 (the Connecticut Health Care Security Act).

“As Michael Moore’s documentary ‘Sicko’ showed, predatory insurance companies are the reason for America’s health crisis, with 47 million uninsured and millions more whose coverage doesn’t give them adequate treatment,” added Dr. Battista. “Clinton’s solution is to reward these companies for their greed, giving them more money. Clinton has been Congress’s top recipient of money from the insurance industry [source: Center for Responsive Politics, http://www.opensecrets.org, which explains her dedication to corporate insurance and HMO profits.”

“America doesn’t need ‘mandatory’ coverage, America needs guaranteed health care,” said Linda Manning Myatt, Michigan Green and spokesperson for the National Women’s Caucus. “Unfortunately, the Democratic presidential candidates are pandering for their insurance lobby friends. They care more about profits for their campaign contributors than about health care for the American people. Sen. Barack Obama has even admitted that his plan would sustain HMOs and insurance firms. Calling the Democrats’ proposals ‘universal health care’ is fraudulent, cynical, and cruel.”

 

Green Party leaders claim that Clinton promoted a disastrous reform plan in 1993, under her husband’s administration, and has introduced an even worse plan in 2007. Greens have insisted that fair and accurate discussion of Single-Payer/Medicare For All be included in the media debate over health care.

“The only political party that supports Single-Payer Medicare For All is the Green Party,” said Connecticut Green Justine McCabe, PhD, a psychologist and co-chair of the Green Party’s International Committee. “We demand that the Green Party and Green candidates and other Single-Payer supporters be allowed to participate in the health care debate. Just as urgently, we need to get a few Greens elected to Congress. A few Green wins in congressional races in 2008 will jolt more Dems and even some Republicans into backing Single-Payer.”

“Progressive Democrats and others who say they favor Single-Payer need to understand this point. American will not get Single-Payer until a non-corporate third party — such as the Green Party — gains a presence in Congress. If progressive, pro-Single-Payer Democrats insist on supporting Hillary Clinton or Barack Obama or other corporate Democrats in the 2008 race, then they will be complicit in keeping Single-Payer off the table for years to come,” said Dr. McCabe.

Australian PM Kevin Rudd - “Nuke strike would make 9/11 insignificant” and other weird warnings

October 21st, 2008 | New World Order

By: D. H. Williams @ 6:38 PM - EST

Over the last 72 hours there has been a strange melange of cryptic messages leaked from world political leaders about what could be in store for America over the next few months.

These predictions of impending doom come from England, France, Australia and the United States. In each case there has been a press releases or news expose’ predicting huge and building threats emerging from faceless enemies in shadowy places.

Crisis will lead to unpopular decisions by Barack Obama

Joe Biden set the stage at a Seattle fund raiser for VIP’s last Sunday when he told the audience about an “international crisis” that will test Barack Obama’s Presidency should he be elected.

Biden told the top Democratic donors that a “generated crisis” will develop within six months and Barak Obama will need the help of community leaders to control the population as unpopular decisions are made and Americans resist.

Biden speaking at the fundraiser, “I can give you at least four or five scenarios from where it might originate, And he’s gonna need help. And the kind of help he’s gonna need is, he’s gonna need you - not financially to help him - we’re gonna need you to use your influence, your influence within the community, to stand with him. Because it’s not gonna be apparent initially, it’s not gonna be apparent that we’re right.”

Colin Powell and Madeline Albright confirm Biden’s warnings

Biden’s ominous language at the Seattle Sheraton are followed with statements by long time establishment insiders Colin Powell and Madeline Albright both say there is a massive crisis on the horizon and Biden was simply making a “statement in fact.”

“The problems will always be there and there’s going to be a crisis which will come along on the 21st, 22nd of January that we don’t even know about right now.” Powell told Meet the Press.

Premonitions of dire consequences emerge from Europe

Meanwhile in Great Britain were they are trying desperately to pass a draconian measure allowing for the 42 day imprisonment of any citizen without charges or access to bail.

Lord West, adviser to Prime Minister Gordon Brown on national security says, “There is another great plot building up again and we are monitoring. It dipped slightly and is now rising again within the context of severe. The threat is huge. We have done all the things that we need to do, but the threat is building - the complex plots are building,”

Lord West like Biden, Albright and Powell does not elaborate on the precise details of the threat or the source of his intelligence information just that the situation is dire.

Across the channel from England you have the French Foreign Minister Bernard Kouchner warning the press that he believes Israel will strike Iran before they can develope nuclear weapons completley ignoring the fact that the chief of the International Atomic Energy Agency, Mohammed ElBradei, said that Iran lacks the key components to produce an atomic weapon.

Israel is believed to have 300 to 400 tactical nuclear weapons ready for deployment at a moments notice and is under no real threat from Iran who has never attacked another nation and has a defense budget equivalent to 1% of the United States.

It’s a miracle there hasn’t been a nuclear catastrophe

Only a few hours ago Agence France-Presse published a press release about the Sydney meeting of the international Commission on Nuclear Non-proliferation and Disarmament presided over by Australian Prime Minister Kevin Rudd who said that the world is facing a threat that will dwarf the September 11 attacks.

“The devastation that could be wreaked by one major nuclear weapons incident alone puts 9/11 and almost everything else [in] to the category of the insignificant,” Rudd said.

Members of the commission warned of reaching an avalanche of danger due to the high number and general lack of control over nuclear devices and components.

Former Australian Foreign Minister in the Labor Government Gareth Evans says it’s “really a bit of a miracle” referring to one the 13,000 to 16,000 nuclear weapons known to exist not being detonated, presumable by “terrorist” causing a catastrophe.

What are they preparing us for?

Why are there so many high level politicians around the world in a seemingly coordinated effort warning of huge threats and developing crisis’ that may include a nuclear device? Are they preparing the masses for an event or series of events that have been in the making for some time? Is the public being prepared for new and forming enemies with a potential to plunge the entire world into war?

Prior to 9/11 William Kristol’s Project for a New American Century called for a “catalyzing event - like a new Pearl Harbor” to bring about a “transformational” change in U.S. foreign policy and military spending.

Many believe a false flag strike on a major western city involving a nuclear device would be the Holy Grail to those who are working so hard to manifest “transformational” change on the world stage bringing with it the complete political, economic and military transformation toward fascist world government.

An Anarchist View of Elections

By CARLOS FIERRO

Presidential elections, and I say this in the nicest way possible, seem to bring out prolonged periods of insanity.  Presidential elections are, to a large extent, exercises in insanity.  We are asked to suspend all of our critical judgments.  We are asked to forget the past and accept an alternate reality where, if an assertion is made strongly enough, then it becomes reality.

I’m told that this is the most important presidential election that the nation has ever seen.  I’m told that the economic downturn has only made this election that much more important.  Not only that, but I’m told this with a passion that is seldom seen.  It is the same feeling you get when you’re talking to a true believer.  The “we have to elect Obama” sentiment is expressed as an article of faith.  It need not be justified; it simply needs to be expressed.  And expressed it is, with assured righteousness & zeal.  The dogma of the true believers is accompanied by incredulous disbelief in the simplemindedness of those McCain supporters.  There is a certain amount of arrogance … superiority that is present in some of those “enlightened” enough to support Obama.  There is a gross sense of superiority in the proclamations that “we” live in a blue state.

To question this dogma is worse than blasphemy: it is an affront to the “liberal mentality.”  And the liberal mentality is as much an article of faith as any that exists.  All protestations that this preternatural faith in the ultimate goodness of Democrats is completely unfounded – not only unfounded, but utterly false – go unheard.  Reminders that Bill Clinton brought us an “end to welfare as we know it,” more stringent terrorism and death penalty legislation (without which the Patriot Act never would have happened), NAFTA, and eight years of war in Iraq, sanctions, and bombing the world over are dismissed.  History hasn’t shown us that Democrats are better leaders, but faith demands that we believe it. 

Whenever talk with a good liberal turns to politics, it inevitably goes down this path.  And inevitably I leave tired. 

This electoral amnesia seems to know no bounds; it seems to affect everyone to some degree.  I was listening to KFCF a few days back and Cornel West was the guest on the KPFA Morning Show.  I am a great admirer of Dr West.  I don’t pretend to be his equal in intellect or activism, but I could not help but feel saddened by the points he made. 

Dr West makes the point that Obama, as a Lincoln-like figure, “would be a thermostat rather than just a thermometer.”  Rather than simply reflecting consensus, Obama would reshape consensus.  Dr West suggests that like Lincoln, Obama “has to be given a chance, but first things first, he’s got to win…then he has to be allowed to stretch out and become the grand statesmen.”  Dr West points out that Lincoln didn’t go into the presidency looking to end slavery, but that he became the statesmen.  Then Dr West made the statement that “there is no Abe Lincoln becoming a statesmen without Fredrick Douglas and Harriet Beecher Stowe.”

And with that statement, all the problems of electoral politics rush to the forefront.  We don’t need another Lincoln, or an Obama; what we need is more Fredrick Douglasses and Harriet Beecher Stowes.  We need more Martin Luther Kings, Big Bill Haywoods, and Helen Kellers.  We don’t need more FDRs, we need more Eugene Debs.  We don’t need more JFKs, we need more Philip Berrigans.  We don’t need to look to great men to lead us to the promised land, we need to recognize the power that we, the nameless and “the powerless,” possess when we assert our power rather than make assertions of faith directed at the great leader myths.

There are two reasons why these myths are particularly dangerous. First, they are simply false. The legislature, the executive, and the judiciary have not pushed this nation forward. They have gone along with popular movements kicking and screaming. It was not any of the three branches of government that led to the advances in voting rights, labor rights, or the end of slavery, it was mass popular movements. It was not Cleveland, Harrison, McKinley, Teddy Roosevelt, Taft, Wilson, or even FDR that had anything to do with advances in labor rights or suffrage. It wasn't Brandeis, Berger, Brennan, Holmes or Marshall that led to the advancement of this nation as a more equitable state. It wasn't JFK, Robert Kennedy or Johnson in the White House, or Mansfield and Dirksen in the Senate that lead to the Civil Rights Act of 1964. It was people on the street marching and fighting for a more equitable nation. It was many of those same people that brought about the end to the Vietnam War, not the mainstream media or any of those mentioned above. It is this very misperception, the creation of dubious hero leaders that leads to the second danger: disempowerment. We are left to petition our overseers and vote for leaders and wish a wish based on the most unfounded faith that they will make things better.

It is not simply wishes based on unfounded faith, but that these elections and religious faith in candidates draw so much energy.  So much so that after the election, there is a vacuum left in its wake.  The time, energy, & money expended on these elections necessitate that all those working fervently for the election of their candidate, understandably, need to rest, but just enough rest to prepare for the next go-round.  No other campaign/movement garners as much prolonged energy, money, & time as presidential elections.  And all of that energy, money, & time unnecessarily zaps energy from movements and issues that desperately need our attention.  The anti-war movement has seen a precipitous drop in proportion to the rise in the time and energy spent on the Obama campaign.  How does one explain all the effort on the part of the anti-war movement to further the Obama campaign if not through political/historical amnesia?  True, Obama talks about a nebulous pullout of Iraq, but that is partially in order to ratchet up our war effort in Afghanistan.  Trading one war for another does not a peace candidate make.

And in a time of unprecedented environmental destruction, it is utter insanity that our two major presidential candidates profess that they have the plan to not only get the economy back on track, but to get the economy growing again.  It is not fun to say, but it needs saying.  The economy does not need to grow, rather it needs to begin to shrink, and shrink drastically.  And if it is going to shrink drastically, as nature necessitates, then we must consider ways to make society equitable, not wealthier.  In this light, giving banks a $1trillion bailout so that they can begin loaning money to kick start the growth of the economy is not only wrong headed, but suicidal.

My hope is that, after the election, regardless the outcome, we tap into the revolutionary spirit of Fredrick Douglass, Harriet Beecher Stowe, Big Bill Haywood, Helen Keller, Eugene Debs, Phillip Berrigan, Martin Luther King, and those nameless others.  That we remember that power is centered not in the halls of government, but in the hands of the people working collectively.  That change for the better does not start with the leadership of Barack Obama or John McCain, but on the streets.

Carlos Fierro lives in Fresno, CA, where he teaches Journalism & Mass Communication at a local college, and is currently engaged in a spat with the City of Fresno over his killing his lawn.  He is the founding editor of The Undercurrent, an independent monthly newspaper.  He can be reached at editor@FresnoUndercurrent.net.

Most Serious Economic Crisis in Modern History

The October 2008 financial meltdown is not the result of a cyclical economic phenomenon. It is the deliberate result of US government policy instrumented through the Treasury and the US Federal Reserve Board. 

This is the most serious economic crisis in World history. 

The "bailout" proposed by the US Treasury does not constitute a "solution" to the crisis. In fact quite the opposite: it is the cause of further collapse. It triggers an unprecedented concentration of wealth, which in turn contributes to widening economic and social inequalities both within and between nations. 

The levels of indebtedness have skyrocketed. Industrial corporations are driven into bankruptcy, taken over by the global financial institutions. Credit, namely the supply of loanable funds, which constitutes the lifeline of production and investment, is controlled by a handful of financial conglomerates. 

With the "bailout", the public debt has spiraled. America is the most indebted country on earth. Prior to the "bailout", the US public debt was of the order of 10 trillion dollars. This US dollar denominated debt is composed of outstanding treasury bills and government bonds held by individuals, foreign governments, corporations and financial institutions. 

"The Bailout": The US Administration is Financing its Own Indebtedness

Ironically, the Wall Street banks --which are the recipients of the bailout money-- are also the brokers and underwriters of the US public debt. Although the banks hold only a portion of the public debt, they transact and trade in US dollar denominated public debt instruments Worldwide. 

In a bitter twist, the banks are the recipients of  a 700+ billion dollar handout and at the same time they act as creditors of the US government. 

We are dealing with an absurd circular relationship: To finance the bailout, Washington must borrow from the banks, which are the recipients of the bailout.

The US administration is financing its own indebtedness.

Federal, State and municipal governments are increasingly in a straightjacket, under the tight control of the global financial conglomerates. Increasingly, the creditors call the shots on government reform.  

The bailout is conducive to the consolidation and centralization of banking power, which in turn backlashes on real economic activity, leading to a string of bankruptcies and mass unemployment.    

Will an Obama Administration Reverse the Tide? 

The financial crisis is the outcome of a deregulated financial architecture. 

Obama has stated unequivocally his resolve to address the policy failures of the Bush administration and "democratize" the US financial system. President-Elect Barack Obama says that he is committed to reversing the tide: 

"Let us remember that if this financial crisis taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers. In this country, we rise or fall as one nation, as one people." (President-elect Barack Obama, November 4, 2008, emphasis added)

The Democrats casually blame the Bush administration for the October financial meltdown. 

Obama says that he will be introducing an entirely different policy agenda which responds to the interests of Main Street:

"Tomorrow, you can turn the page on policies that put the greed and irresponsibility of Wall Street before the hard work and sacrifice of men and women all across Main Street. Tomorrow you can choose policies that invest in our middle class and create new jobs and grow this economy so that everybody has a chance to succeed, from the CEO to the secretary and the janitor, from the factory owner to the men and women who work on the factory floor.( Barack Obama, election campaign, November 3, 2008, emphasis added) 

 

Is Obama committed to "taming Wall Street" and "disarming financial markets"? 

Ironically, it was under the Clinton administration that these policies of "greed and irresponsibility" were adopted. 

The 1999 Financial Services Modernization Act (FSMA) was conducive to the the repeal of the Glass-Steagall Act of 1933. A pillar of President Roosevelt’s "New Deal", the Glass-Steagall Act was put in place in response to the climate of corruption, financial manipulation and "insider trading" which resulted in more than 5,000 bank failures in the years following the 1929 Wall Street crash. 

Bill Clinton signs into law the  Gramm-Leach-Bliley Financial Services Modernization Act, November 12, 1999

Under the 1999 Financial Services Modernization Act, effective control over the entire US financial services industry (including insurance companies, pension funds, securities companies, etc.) had been transferred to a handful of financial conglomerates and their associated hedge funds. 

Full Article Here

By Peter Phillips

A new report (9/2/08) from The World Bank admits that in 2005 three billion one hundred and forty million people live on less that $2.50 a day and about 44% of these people survive on less than $1.25. Complete and total wretchedness can be the only description for the circumstances faced by so many, especially those in urban areas. Simple items like phone calls, nutritious food, vacations, television, dental care, and inoculations are beyond the possible for billions of people.

Starvation.net logs the increasing impacts of world hunger and starvation. Over 30,000 people a day (85% children under 5) die of malnutrition, curable diseases, and starvation.  The numbers of unnecessary deaths has exceeded three hundred million people over the past forty years.

These are the people who David Rothkopf in his book Superclass calls the unlucky. “If you happen to be born in the wrong place, like sub-Saharan Africa, …that is bad luck,” Rothkopf writes. Rothkopf goes on to describe how the top 10% of the adults worldwide own 84% of the wealth and the bottom half owns barely 1%. Included in the top 10% of wealth holders are the one thousand global billionaires. But is such a contrast of wealth inequality really the result of luck, or are there policies, supported by political elites, that protect the few at the expense of the many?

Farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up 4% from the year before, yet, billions of people go hungry every day. Grain.org describes the core reasons for continuing hunger in a recent article “Making a Killing from Hunger.” It turns out that while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control the global food prices and distribution. Starvation is profitable for corporations when demands for food push the prices up. Cargill announced that profits for commodity trading for the first quarter of 2008 were 86% above 2007.  World food prices grew 22% from June 2007 to June 2008 and a significant portion of the increase was propelled by the $175 billion invested in commodity futures that speculate on price instead of seeking to feed the hungry. The result is wild food price spirals, both up and down, with food insecurity remaining widespread.

For a family on the bottom rung of poverty a small price increase is the difference between life and death, yet neither US presidential candidate has declared a war on starvation. Instead both candidates talk about national security and the continuation of the war on terror as if this were the primary election issue. Given that ten times as many innocent people died on 9/11/01 than those in the World Trade centers, where is the Manhattan project for global hunger? Where is the commitment to national security though unilateral starvation relief? Where is the outrage in the corporate media with pictures of dying children and an analysis of who benefits from hunger?

American people cringe at the thought of starving children, often thinking that there is little they can do about it, save sending in a donation to their favorite charity for a little guilt relief. Yet giving is not enough, we must demand hunger relief as a national policy inside the next presidency. It is a moral imperative for us as the richest nation in the world nation to prioritize a political movement of human betterment and starvation relief for the billions in need. Global hunger and massive wealth inequality is based on political policies that can be changed. There will be no national security in the US without the basic food needs of the world being realized.

Peter Phillips is a professor of sociology at Sonoma State University and director of Project Censored a media research group.  His new book Censored 2009 is now available from by Seven Stories Press.

With Attention on Bailout Debate, Treasury Made Change to Tax Policy

By Amit R. Paley
Washington Post Staff Writer
Monday, November 10, 2008; A01

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration's request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

The story of the obscure provision underscores what critics in Congress, academia and the legal profession warn are the dangers of the broad authority being exercised by Treasury Secretary Henry M. Paulson Jr. in addressing the financial crisis. Lawmakers are now looking at whether the new notice was introduced to benefit specific banks, as well as whether it inappropriately accelerated bank takeovers.

The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

Andrew C. DeSouza, a Treasury spokesman, said the administration had the legal authority to issue the notice as part of its power to interpret the tax code and provide legal guidance to companies. He described the Sept. 30 notice, which allows some banks to keep more money by lowering their taxes, as a way to help financial institutions during a time of economic crisis. "This is part of our overall effort to provide relief," he said.

The Treasury itself did not estimate how much the tax change would cost, DeSouza said.

A Tax Law 'Shock'

The guidance issued from the IRS caught even some of the closest followers of tax law off guard because it seemed to come out of the blue when Treasury's work seemed focused almost exclusively on the bailout.

"It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

Several other tax lawyers, all of whom represent banks, said the change was legal. Like DeSouza, they said the legal authority came from Section 382 itself, which says the secretary can write regulations to "carry out the purposes of this section."

Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

Lawmakers decried the tax shelters as a scam and created a formula to strictly limit the use of those purchased losses for tax purposes.

But from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world.

"This has never been a good economic policy," said Kenneth W. Gideon, an assistant Treasury secretary for tax policy under President George H.W. Bush and now a partner at Skadden, Arps, Slate, Meagher & Flom, a law firm that represents banks.

The opposition to Section 382 is part of a broader ideological battle over how the tax code deals with a company's losses. Some conservative economists argue that not only should a firm be able to use losses to offset gains, but that in a year when a company only loses money, it should be entitled to a cash refund from the government.

During the current Bush administration, senior officials considered ways to implement some version of the policy. A Treasury paper in December 2007 -- issued under the names of Eric Solomon, the top tax policy official in the department, and his deputy, Robert Carroll -- criticized limits on the use of losses and suggested that they be relaxed. A logical extension of that argument would be an overhaul of 382, according to Carroll, who left his position as deputy assistant secretary in the Treasury's office of tax policy earlier this year.

Yet lobbyists trying to modify the obscure section found that they could get no traction in Congress or with the Treasury.

"It's really been the third rail of tax policy to touch 382," said Kevin A. Hassett, director of economic policy studies at the American Enterprise Institute.

'The Wells Fargo Ruling'

As turmoil swept financial markets, banking officials stepped up their efforts to change the law.

Senior executives from the banking industry told top Treasury officials at the beginning of the year that Section 382 was bad for businesses because it was preventing mergers, according to Scott E. Talbott, senior vice president for the Financial Services Roundtable, which lobbies for some of the country's largest financial institutions. He declined to identify the executives and said the discussions were not a concerted lobbying effort. Lobbyists for the biotechnology industry also raised concerns about the provision at an April meeting with Solomon, the assistant secretary for tax policy, according to talking points prepared for the session.

DeSouza, the Treasury spokesman, said department officials in August began internal discussions about the tax change. "We received absolutely no requests from any bank or financial institution to do this," he said.

Although the department's action was prompted by spreading troubles in the financial markets, Carroll said, it was consistent with what the Treasury had deemed in the December report to be good tax policy.

The notice was released on a momentous day in the banking industry. It not only came 24 hours after the House of Representatives initially defeated the bailout bill, but also one day after Wachovia agreed to be acquired by Citigroup in a government-brokered deal.

The Treasury notice suddenly made it much more attractive to acquire distressed banks, and Wells Fargo, which had been an earlier suitor for Wachovia, made a new and ultimately successful play to take it over.

The Jones Day law firm said the tax change, which some analysts soon dubbed "the Wells Fargo Ruling," could be worth about $25 billion for Wells Fargo. Wells Fargo declined to comment for this article.

The tax world, meanwhile, was rushing to figure out the full impact of the notice and who was responsible for the change.

Jones Day released a widely circulated commentary that concluded that the change could cost taxpayers about $140 billion. Robert L. Willens, a prominent corporate tax expert in New York City, said the price is more likely to be $105 billion to $110 billion.

Over the next month, two more bank mergers took place with the benefit of the new tax guidance. PNC, which took over National City, saved about $5.1 billion from the modification, about the total amount that it spent to acquire the bank, Willens said. Banco Santander, which took over Sovereign Bancorp, netted an extra $2 billion because of the change, he said. A spokesman for PNC said Willens's estimate was too high but declined to provide an alternate one; Santander declined to comment.

Attorneys representing banks celebrated the notice. The week after it was issued, former Treasury officials now in private practice met with Solomon, the department's top tax policy official. They asked him to relax the limitations on banks even further, so that foreign banks could benefit from the tax break, too.

Congress Looks for Answers

No one in the Treasury informed the tax-writing committees of Congress about this move, which could reduce revenue by tens of billions of dollars. Legislators learned about the notice only days later.

DeSouza, the Treasury spokesman, said Congress is not normally consulted about administrative guidance.

Sen. Charles E. Grassley (R-Iowa), ranking member on the Finance Committee, was particularly outraged and had his staff push for an explanation from the Bush administration, according to congressional aides.

In an off-the-record conference call on Oct. 7, nearly a dozen Capitol Hill staffers demanded answers from Solomon for about an hour. Several of the participants left the call even more convinced that the administration had overstepped its authority, according to people familiar with the conversation.

But lawmakers worried about discussing their concerns publicly. The staff of Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, had asked that the entire conference call be kept secret, according to a person with knowledge of the call.

"We're all nervous about saying that this was illegal because of our fears about the marketplace," said one congressional aide, who like others spoke on condition of anonymity because of the sensitivity of the matter. "To the extent we want to try to publicly stop this, we're going to be gumming up some important deals."

Grassley and Sen. Charles E. Schumer (D-N.Y.) have publicly expressed concerns about the notice but have so far avoided saying that it is illegal. "Congress wants to help," Grassley said. "We also have a responsibility to make sure power isn't abused and that the sensibilities of Main Street aren't left in the dust as Treasury works to inject remedies into the financial system."

Carol Guthrie, spokeswoman for the Democrats on the Finance Committee, said it is in frequent contact with the Treasury about the financial rescue efforts, including how it exercises authority over tax policy.

Lawmakers are considering legislation to undo the change. According to tax attorneys, no one would have legal standing to file a lawsuit challenging the Treasury notice, so only Congress or Treasury could reverse it. Such action could undo the notice going forward or make it clear that it was never legal, a move that experts say would be unlikely.

But several aides said they were still torn between their belief that the change is illegal and fear of further destabilizing the economy.

"None of us wants to be blamed for ruining these mergers and creating a new Great Depression," one said.

Some legal experts said these under-the-radar objections mirror the objections to the congressional resolution authorizing the war in Iraq.

"It's just like after September 11. Back then no one wanted to be seen as not patriotic, and now no one wants to be seen as not doing all they can to save the financial system," said Lee A. Sheppard, a tax attorney who is a contributing editor at the trade publication Tax Analysts. "We're left now with congressional Democrats that have spines like overcooked spaghetti. So who is going to stop the Treasury secretary from doing whatever he wants?"

How much more broke are we going to have to get before we realize that to SOLVE these problems, we have to focus on sustainability, or we will get to the point soon that empiric implosion (like Rome or Mongols) will happen. The US is BANKRUPT!

Alright, here's what to do:

1. Go to your local, state or national governmental website (especially in the US)

2. Try to understand the premise of ALL bills that are in the midst of legislation within 30 minutes;

3. See if you can actually READ a bill itself, or if it's just an explanation of the bill;

4. If you can READ the bill, is it completely transparent and understandable;

5. And finally, on these sites, the official government sites, see how accessible the information is to run for office and/or help a congressman (or woman) write a bill.

Then ask yourself: What does this say about the state of democracy?

THIS WAS NOT A BAD COMEDY SHOW
THIS WAS CNN 17 YEARS AGO

Please don't be railroaded!  Have a look at this article and notice one thing:

These guys say that Obama is not "Honorable like Malcolm X"

You will begin to understand this viewpoint, this ONE thing they are seeing here by watching The Power of Nightmares. Please watch and understand your enemy before allowing corporate media to rally you and manufacture more consent to go into Iran to KILL.

i laughed so hard!

RON PAUL IS MY PRESIDENT! Hahahaha!! ;)

If anyone can make it, please visit endthefed.us and see if you can participate. If not just send your support and good thoughts to these folks.

"If the American people ever allow private banks to control the issue of their currency first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered".

-Thomas Jefferson

My only wish, ever, in giving any information is to help facilitate real change in our society; to get us unhooked from the matrix that has been created to “enslave” us via DEBT.

But to throw such words as enslavement around, I have the responsibility to remind everyone that this is not a literal enslavement, it is enslavement of the product of our labor, which in this day and age is money. Actually, if any terms really describe what is going on, it is outright theft and misappropriation.

 And to further “enslave us” the overlords (as I affectionately call them) have us hooked into the idea that money determines our value in this world.

Conventional wisdom, or common sense, tells us that this simply is not true. But for us to act upon these basic instincts and release the fear associated with money “loss” takes a lot of effort and courage for many people.

I have found myself, in many ways, overwhelmed by reports of liberties being stripped, people going bankrupt, etc. I even went into a deep depression as well for a while, but then I realized something. Those who can, have a responsibility to help others in the coming days. I am not talking about public service. I am just talking about helping others, in whatever form or opportunity that comes our way.

Also, an understanding that I must gain as much knowledge as possible, in order to speak to a broad audience, comforted me. I have watched Dr. Ron Paul very closely, and at the very least I have gained an understanding to be wise in such ways that stuns people, because, the collective realized truths can never really be argued. And the collective realization nowadays can be summed up here:

The rabbit is out of the magician's hat. The cat is out of the bag. Even the dimmest wits in America are figuring out two things: the bankers are really socialists but are exclusionary socialists. Namely, they want money to be created and handed to them, not to us. They want to use us as collateral. Ask any banker if money can be lent at cheap with no collateral. They will laugh maliciously.

No, to get those cute 1% loans, you need to put up some collateral. And the true collateral here is the US taxpayers and everything they own. Note the top story. All our collective and individual wealth can be suddenly seized. Since the bankers and their buddies own our political system, they will get whatever they need.

The other fact the US public has become dimly aware is, they will NOT be bailed out with this magic money. They will have to pay a price and a steep price. If they ARE bailed out with funny money, this will be extracted in less than five years just like the Bush tax cuts, via inflation of food, fuel and other necessities.

So, where do we go from here? What do we do when and if the dollar collapses? I have no game plan, no set of recommendations to follow.

I can say that, as a small business owner, these have been the scariest few months I’ve had in a while. Work suddenly dried up despite our best efforts of advertising. People started panicking about money back in July. Companies were already starting to restructure before all of this stuff happened back in September with the bailout.
This bailout just called attention to the nature of the “socialists” or fascists or whatever you want to call the banker-thieves out there. That money lost in all of this, from the mortgage crisis of late 2007 up until now was never really lost. It never is lost. No one physically took that money and burned it or in the case of electronic money, deleted it from their ledgers. No, that money went somewhere. And that somewhere is into the hands of the few. At the most 1000 of them, at the least, it was 50, maybe 60.

So, back to the question, “What to do?” Should we panic? No, absolutely not. The beauty of this situation is, that once we realize that money is NOT the thing of value here, it is the stuff that gets traded for things that have value, we can begin to realize that it really doesn’t matter what currency we have. We can have sticks or jellybeans; it doesn’t matter, as long as it’s agreed upon by the majority to accept it as a currency. Money is a medium of exchange, much like oil paint is a medium of the painting. The exchange of goods and services, like the painting, is the end result of the money, or the type of paint.

However, when we understand the function of money, we must also understand that a currency that is monopolized and lent to the public at interest AND a fractional reserve lending system is something that we must REJECT completely henceforth. A singular entity or group of corporations with common goals (monopoly or cartel) should never be allowed control over water, food and energy; such things serve humanity and are needed by humanity. The same idea applies to such a thing as money.

There will be a time, very soon, that a “worldwide or regional” banking solution is made, where we will have our federal reserve still, but it will be in cahoots with a North American UN blessed central bank, and we will maybe even get a new currency. Or a similar situation will present itself. Either way, we must attempt to reject it. But more than likely the IMF or World Bank will simply implement it unilaterally for the “greater good”.

We have, as an American culture, for the better part of a century been ingrained with the notion of consumerism. It is somewhat derogatory to consider this notion: the obsession with obtaining goods simply for the pleasure of it. But this, in part, is how we have allowed this financial “enslavement” to go on around us.

I cannot condemn consumerism, however, because my business depends on it. As do a great amount of other small and medium sized businesses. Many forms of art depend upon it as well. Consumerism in of itself is not to blame here, it is the lack of knowledge, the unfettered trust in our leaders, and the trust in governments to take care of everything since all that law stuff is so complicated that we simply lack the time or understanding to even mess with it.

But have you ever thought that the current system is designed to be confusing and uninteresting to the average person? Many of the things in our society can be solved with laws that are not complex and unfathomable. In fact the law MUST be straightforward, else the populous loses control of its government, and the government becomes too powerful, or allows corporate interests to corrupt the law. But if laws are to be written, they should be so written that common men would understand them. Otherwise they may as well be in Latin. One look into the laws of the land these days will reveal a tangle of “legalese” with cryptic terms that mean one thing in the context of ordinary life, but mean another thing entirely in the legal document, as well as various references and amendments so designed to create such a labyrinth as to throw off the average person from ever understanding the law’s intent.

And regarding a central, private bank such as our Federal Reserve, Thomas Jefferson said:

"If the American people ever allow private banks to control the issue of their currency first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered."

The founding fathers were very clear on such things as law and money, because they went through tyranny via the Crown of England. This tyranny unfortunately has just shifted tactics and since the early 20th century, the central bank has been used to inflate our currency by arbitrarily printing up money from nothing. The government then taxes the people, subsidizes the banks with various bailouts and other discretions, and the banks in turn, loan their own money back to the people at interest. The military-industrial complex has also served it’s purposes for the elites, reaping them billions in war profits as an exchange for the allegiance and blood of our youth and countless lives lost in poorer countries.

There have been many consequences to US foreign policy namely in the form of terrorism. Indeed, terrorism is a direct result of the lousy foreign policy for the last 40 or so years in the Middle East. It is proven beyond a doubt through programs such as Operation Cyclone, implemented by the CIA, Mujahadeen rebels were trained to fight the Russian Invasion during the Carter administration, later to be named “Al-Qaeda” which in Arabic really means “Database” or “Base of Data”.  Bhutto, the former Pakistani Prime Minister warned the United States at the time that the CIA was “creating a monster”.

However, many reports of terrorism are hyped beyond what they really are. This is especially true in the case of radical Islam.  Sure there are those who say, “Death to America and the Infidels” and sure they might hate us for our “freedoms” (well actually they hate us for our hedonism more than freedoms), but the vast majority of the people committing terrorist acts are doing so in defense of their lands.

And in recent times, the threat of terrorism is used in the politics of fear and hung over all of our heads. We are given vague warnings and an ever-elusive enemy to fear- Usama  (or Osama they are both the same man) Bin Laden may very well be dead, if one pieces together the evidence via news archives from around the world. Bhutto herself mentioned it in an interview with David Frost about a month before she died.
What does this have to do with anything? Here’s one simple thing. If one were to take an incident from 1775 and report it in modern terms, say as the Associated Press, it would go something like this:

Lexington 1775

BOSTON - April 20

National guard units seeking to confiscate a cache of recently banned weapons were ambushed on April 19th by elements of a para-military extremist faction. Military and law enforcement sources estimate that 72 were killed and more than 200 injured before government forces were compelled to withdraw.

Speaking after the clash Massachusetts Governor Thomas Gage declared that the extremist faction, which was made up of local citizens, has links to the radical right-wing tax protest movement. Gage blamed the extremists for recent incidents of vandalism directed against internal revenue offices. The governor, who described the group's organizers as "criminals," issued an executive order authorizing the summary arrest of any individual who has interfered with the government's efforts to secure law and order.

The military raid on the extremist arsenal followed wide-spread refusal by the local citizenry to turn over recently outlawed weapons. Gage issued a ban on private ownership of weapons and ammunition earlier in the week. This decision followed a meeting in early this month between government and military leaders at which the governor authorized the forcible confiscation of illegal arms. One government official, speaking on condition of anonymity, pointed out that "none of these people would have been killed had the extremists obeyed the law and turned over their weapons voluntarily."

Government troops initially succeeded in confiscating a large supply of outlawed weapons and ammunition. However, troops attempting to seize arms and ammunition in Lexington met with resistance from heavily-armed extremists who had been tipped off regarding the government's plans.

During a tense standoff in Lexington's town park, National Guard Colonel Francis Smith, commander of the government operation, ordered the armed group to surrender and return to their homes. The impasse was broken by a single shot, which was reportedly fired by one of the right-wing extremists. Eight civilians were killed in the ensuing exchange. Ironically, the local citizenry blamed government forces rather than the extremists for the civilian deaths.

Before order could be restored, armed citizens from the surrounding areas had descended upon the guard units. Colonel Smith, finding his forces overmatched by the armed mob, ordered a retreat.

Governor Gage has called upon citizens to support the state national joint task force in its effort to restore law and order. The governor has also demanded the surrender of those responsible for planning and leading the attack against the government troops. Samuel Adams, Paul Revere, and John Hancock, who have been identified as "ringleaders" of the extremist faction, remain at large.

First reported on April 20, 1775

How very interesting? But these revolutionaries weren’t terrorists, were they? They are nothing like these extremists nowadays; they are to be whisked away into offshore, unaccountable prisons where they receive no rights, rights that had been written of as Habeas Corpus back in the 1200’s, right?

Why would the threat of terrorism ever be hyped? Remember the bankers. They finance war. It behooves them to instigate and perpetuate conflict. We are seeing this in our modern age. The US debt based economy will soon become unsustainable due to this greed. We must reboot the system, and soon, kick the bankers out and print our own money. We must move at a grass roots level to do this NOW.

These so called leaders have already committed our children and our grandchildren to an open ended war on terror. They have already stated that they will keep spending 1-2 trillion dollars a year on this purpose.

The leaders have spoken loud and clear what they think consent of the governed should be. One look at the Bailout, and the FACT that in every poll I have ever seen, 90% or more of the American public was AGAINST this bailout, we begin to see how they think on this matter. There is no consent of the governed anymore. They let us participate with an often-corrupt voting ceremony every couple of years. They no longer allow us to be the 4th branch of government, indeed, the ONLY branch of government that should have absolute power and authority.

If we allow our government to spend any more like it has been, we will soon face 75% OR MORE of our income paid out in total taxes. Most people look at 50% in various taxes as it stands right now.

How much longer are we going to let this happen?

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Overall, my one purpose, my one intention in all the blogs and emails I send out is to inform you that things are not what they seem, and it is everyone’s civic responsibility to act upon this knowledge in some way. Whatever way feels right to you is fine. But this world will never be truly free UNLESS we educate each other, support one another, and help one another.

Many blessings. And all my love and support in your journey.