Five Ways Wall Street Continues to Screw Up the Economy for the Rest of Us and How to Fix It

By Robert Kuttner

Beaver County Blue via Huffington Post

July 2, 2014 - The shocking thing about the financial collapse of 2008 is not that Wall Street excesses pushed us into the worst economy crisis since the Depression. It's that the same financial system has been propped back up and that elites are getting richer than ever, while the effects of that collapse are continuing to sandbag the rest of the economy. Oh, and most of this aftermath happened while a Democrat was in the White House.

Consider:

• The biggest banks are bigger and more concentrated than ever.
• Subprime (subprime!) is making a comeback [2] with interest rates of 8 to 13 percent.
• Despite Michael Lewis's devastating expose of how high speed trading is nothing but a technological scam that allows insiders to profit at the expense of small investors, regulators are not moving to abolish it [3].
• The usual suspects are declaring the housing crisis over, even though default and foreclosure rates in the hardest hit cities and states are upwards of 25 percent.
• The deficit is falling, now just 2.8 percent of GDP [4], thanks to massive cuts in social spending. Isn't that reassuring?

Meanwhile, back in the real economy, good jobs are far too scarce, incomes are stagnant, while 95 percent of the gains go to the top one percent.

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Does America Need a Robin Hood Tax?

A tiny fee charged to the biggest banks could generate hundreds of billions of dollars every year for social services, but what effect would it have on Wall Street?

By Kyle Chayka

Progressive America Rising via Pacific Standard

In a video released last month by an organization called The Robin Hood Tax, an increasingly frantic U.K. prime Mmnister (played by British actor Bill Nighy) is forced to defend his decision made 10 years ago back in 2014 not to pass a tax on banking transactions. While Nighy hems and haws, a trio of polished European Union leaders extoll the tax. They say that the revenue, drawn largely from investment bankers, has “restored health services” and “helped fight extreme poverty” in the wake of the global financial crisis.

The video, which has over 250,000 views, is clearly satire, but it comes at the forefront of a burgeoning political movement to do a little more to curtail the excesses that caused the 2008 crisis. The Robin Hood Tax also hosts an international petition with over 650,000 signatures that proposes levying a tax every time a bank trades in commodities like stocks, bonds, foreign currency, or derivatives. The fee would be small—just 0.03 or 0.05 percent of each transaction—but enough to raise $416 billion globally, the organization suggests.

That money would go toward solving basic social issues like public education, affordable housing, and public services—in other words, taking from the rich, as epitomized in the kind of hedge-fund gamblers depicted in Wolf of Wall Street, and giving to the poor, just like the initiative’s namesake.

By trading in risky commodities, the banks lost everyone a lot of money, so why not punish them for it by targeting the very transactions that caused the problem in the first place?

A Robin Hood-style tax, also known as a financial transaction tax, is on track to be finalized by a coalition of 11 European Union governments before May of this year, including Germany and France, where the tax has 82 and 72 percent approval respectively. German Chancellor Angela Merkel is pushing for progress on the tax before the May 2014 E.U. parliamentary elections; European lawmakers are actively pushing their United States counterparts to join the effort.

The idea of a financial transaction tax has a certain visceral appeal that the Robin Hood rhetoric reinforces: By trading in risky commodities, the banks lost everyone a lot of money, so why not punish them for it by targeting the very transactions that caused the problem in the first place? Yet it’s important to weigh the impact the proposed tax would have on Wall Street and Main Street alike.

One benefit of the tax is that it’s designed to make large banks bear the burden (as opposed to consumers or small business owners). Spot currency transactions—tourists switching from U.S. Dollars to Euros, for example—won’t be counted under the tax, nor will transactions with governmental banks, trades in physical commodities, and transactions involving private households, explains a briefing on the bill.

Yet critics fear that any restriction on the flow of investment capital could damage the economy for everyone, not just redistribute some of the wealth away from banks and bankers.

A report from London Economics points out that many households have savings invested in financial instruments that would be impacted by the tax. “In Italy, there is a high level of direct investment in financial markets, with 40 percent of household savings being held directly in the form of equity or debt,” the report notes, with 23 percent of household savings in Spain. The financial transaction tax would quickly make these investments less valuable by slowing down trading and, theoretically, growth.

Another fear is that taxing trading transactions in the European Union, or in the U.S. or U.K. where such a law is less imminent, will cause capital flight from the region as investors look to funnel their money through countries that don’t tax. A recent report by the U.S.-based Financial Economists Roundtable argues that the tax wouldn’t make as much money as has been suggested, since it would provide a disincentive for future business. “Volumes—and thus tax revenues—would shrink as trading dropped or moved to other locations or to lower-taxed vehicles,” the report reads. “A transaction tax imposed at any economically meaningful rate by only some countries would cause many transactions to be shifted to other countries.” What’s currently happening with corporate profits being shuttled through Ireland and the Caribbean, losing billions of dollars in tax revenue, could also occur with investment capital.

The Financial Economists Roundtable report cautions against a kind of cascade, where taxes on transactions would lower financial liquidity, meaning “less capital per worker in the long run and thus lower wages throughout the economy.” Though likely over-exaggerated in the report, the threat of capital flight, which would lead to more difficulty securing loans and start-up funding, is real. But there’s another way to structure a financial transactions tax so it’s even more tightly focused.

IN SEPTEMBER 2013, ITALY became the first country to pass a tax on high-frequency trading, the technology that hedge funds often use to buy and sell financial commodities in fractions of seconds. The tax is tiny at 0.02 percent, and it’s only levied on trades occurring every 0.5 seconds or faster (the Robin Hood tax plan includes a high-frequency tax along with wider-reaching measures).

The high-frequency trading tax is meant as a way for banks to pay for the damage they’ve caused to the economy, but it’s also meant to make trading more efficient rather than less. Driven by computational algorithms rather than human beings, high-frequency trading is less about allocating capital to the businesses that can use it best and more about gaining a competitive edge over other funds. The algorithms that control trading likely aren’t even completing trades, as Felix Salmon points out—they’re putting out buy or sell orders then rescinding them immediately in order to confuse the other algorithms they’re competing against. They might as well be called “high-frequency spambots,” Salmon writes.

Democratic Senator Tom Harkin and Representative Peter DeFazio have repeatedly introduced a U.S. high-frequency trading tax, most recently around a year ago. They propose a 0.03 percent tax on trades that excludes initial public offerings and bonds in order to dampen the tax’s impact on capital raising, which they say will amount to $352 billion in revenue over 10 years. The bill has repeatedly failed, and no plans have been announced to bring it back (Harkin declined to comment for this article).

We’ve already come to the point that stock exchanges are building laser networks to shave extra microseconds off their high-frequency trading. Though our country might benefit from seeing how the European Union’s full financial transaction tax plays out, perhaps it’s time for a little bit of Robin Hood to curtail the worst of the excesses that aren’t benefiting anyone but the banks.

Kyle Chayka is a freelance technology and culture writer living in Brooklyn. Follow him on Twitter @chaykak.

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Overthrow the Speculators

Why the Progressive Majority Needs a Common Front vs. Finance Capital, War and the Far Right

By Chris Hedges
Beaver County Blue via Common Dreams   

Dec 20, 2013 - Money, as Karl Marx lamented, plays the largest part in determining the course of history. Once speculators are able to concentrate wealth into their hands they have, throughout history, emasculated government, turned the press into lap dogs and courtiers, corrupted the courts and hollowed out public institutions, including universities, to justify their looting and greed.

Today’s speculators have created grotesque financial mechanisms, from usurious interest rates on loans to legalized accounting fraud, to plunge the masses into crippling forms of debt peonage. They steal staggering sums of public funds, such as the $85 billion of mortgage-backed securities and bonds, many of them toxic, that they unload each month on the Federal Reserve in return for cash. And when the public attempts to finance public-works projects they extract billions of dollars through wildly inflated interest rates.

Speculators at megabanks or investment firms such as Goldman Sachs are not, in a strict sense, capitalists. They do not make money from the means of production. Rather, they ignore or rewrite the law—ostensibly put in place to protect the vulnerable from the powerful—to steal from everyone, including their shareholders. They are parasites. They feed off the carcass of industrial capitalism. They produce nothing. They make nothing. They just manipulate money. Speculation in the 17th century was a crime. Speculators were hanged.

We can wrest back control of our economy, and finally our political system, from corporate speculators only by building local movements that decentralize economic power through the creation of hundreds of publicly owned state, county and city banks.

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The Case for More Trade Unions and a Popular Front vs Finance Capital – If you Needed One…

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Big Lie: America Doesn't Have #1 Richest Middle-Class in the World...We're Ranked 27th!

By Les Leopold

Progressive America Rising via Alternet.org

June 18, 2013 - America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet's riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years! 

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that's what free-market cheerleaders repeatedly promise us.

Unfortunately, it's a lie, one of the biggest ever perpetrated on the American people.

Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we're number 27. 

The most telling comparative measurement is median wealth (per adult). It describes the amount of wealth accumulated by the person precisely in the middle of the wealth distribution—50 percent of the adult population has more wealth, while 50 percent has less. You can't get more middle than that.

Wealth is measured by the total sum of all our assets (homes, bank accounts, stocks, bonds etc.) minus our liabilities (outstanding loans and other debts). It the best indicator we have for individual and family prosperity. While the never-ending accumulation of wealth may be wrecking the planet, wealth also provides basic security, especially in a country like ours with such skimpy social programs. Wealth allows us to survive periods of economic turmoil. Wealth allows our children to go to college without incurring crippling debts, or to get help for the down payment on their first homes. As Billie Holiday sings, "God bless the child that's got his own." 

Well, it's a sad song. As the chart below shows, there are 26 other countries with a median wealth higher than ours (and the relative reduction of U.S. median wealth has done nothing to make our economy more sustainable).

Why?

Here's a starter list:

• We don't have real universal healthcare. We pay more and still have poorer health outcomes than all other industrialized countries. Should a serious illness strike, we also can become impoverished.

• Weak labor laws undermine unions and give large corporations more power to keep wages and benefits down. Unions now represent less than 7 percent of all private sector workers, the lowest ever recorded.

• Our minimum wage is pathetic, especially in comparison to other developed nations [3]. (We're # 13.) Nobody can live decently on $7.25 an hour. Our poverty-level minimum wage puts downward pressure on the wages of all working people. And while we secure important victories for a few unpaid sick days, most other developed nations provide a month of guaranteed paid vacations as well as many paid sick days.

• Wall Street is out of control. Once deregulation started 30 years ago, money has gushed to the top as Wall Street was free to find more and more unethical ways to fleece us. 

• Higher education puts our kids into debt. In most other countries higher education is practically tuition-free. Indebted students are not likely to accumulate wealth anytime soon. 

• It's hard to improve your station in life if you're in prison, often due to drug-related charges that don't even exist in other developed nations. In fact, we have the largest prison population in the entire world, and we have the highest percentage of minorities imprisoned. “In major cities across the country, 80% of young African Americans now have criminal records” (from Michelle Alexander's 2010 book, The New Jim Crow: Mass Incarceration in the Age of Colorblindness).

• Our tax structures favor the rich and their corporations that no longer pay their fair share. They move money to foreign tax havens, they create and use tax loopholes, and they fight to make sure the source of most of their wealth—capital gains—is taxed at low rates. Meanwhile the rest of us are pressed to make up the difference or suffer deteriorating public services.

• The wealthy dominate politics. Nowhere else in the developed world are the rich and their corporations able to buy elections with such impunity.

• Big Money dominates the media. The real story about how we're getting ripped off is hidden in a blizzard of BS that comes from all the major media outlets...brought to you by....

• America encourages globalization of production so that workers here are in constant competition with the lower-wage workers all over the world as well as with highly automated techonologies.

Is there one cause of the middle-class collapse that rises above all others?

Yes. The International Labor organization produced a remarkable study (Global Wage Report 2012-13) [4] that sorts out the causes of why wages have remained stagnant while elite incomes have soared. The report compares key causal explanations like declining bargaining power of unions, porous social safety nets, globalization, new technologies and financialization. 

Guess which one had the biggest impact on the growing split between the 1 percent and the 99 percent?

Financialization!  

What is that? Economist Gerald Epstein offers us a working definition [5]:

"Financialization means the increasing role of financial motives, financial markets, financial actors and financial institutions in the operation of the domestic and international economies."

This includes such trends as:

• The corporate change during the 1980s to make shareholder value the ultimate goal.

• The deregulation of Wall Street that allowed for the creation of a vast array of new financial instruments for gambling.

• Allowing private equity firm to buy companies, load them up with debt, extract enormous returns, and then kiss them goodbye.

• The growth of hedge funds that suck productive wealth out of the economy.

• The myriad of barely regulated world financial markets that finance the globalization of production, combined with so-called "free trade" agreements.

• The increased share of all corporate profits that go to the financial sector.

• The ever increasing size of too-big-to-fail banks.

• The fact that many of our best students rush to Wall Street instead of careers in science, medicine or education.

In short, financialization is when making money from money becomes more important that providing real goods and services. Here's a chart that says it all. Once we unleashed Wall Street, their salaries shot up, while everyone else's stood still.

Do we still know how to fight!

The carefully researched ILO study provides further proof that Occupy Wall Street was right on the money. OWS succeeded (temporarily), in large part, because it tapped into the deep reservoir of anger toward Wall Street felt by people all over the world. We all know the financiers are screwing us.

Then why didn't OWS turn into a sustained, mass movement to take on Wall Street?

One reason it didn't grow was that the rest of us stood back in deference to the original protestors instead of making the movement our own. As a result, we didn't build a larger movement with the structures needed to take on our financial oligarchs. And until we figure out how to do just that, our nation's wealth will continue to be siphoned away. 

Our hope, I believe, lies in the young people who are engaged each day in fighting for the basic human rights for all manner of working people—temp workers, immigrants, unionized, non-union, gays, lesbians, transgender—as well as those who are fighting to save the planet from environmental destruction. It's all connected.

At some point these deeply committed activists also will understand that financialization both here and abroad stands in the way of justice and puts our planet at risk. When they see the beast clearly, I am confident they will figure out how to slay it. 

The sooner, the better.

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Source URL: http://www.alternet.org/economy/americas-middle-class-27th-richest

Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold
[3] http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
[4] http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_194843.pdf
[5] http://www.peri.umass.edu/fileadmin/pdf/programs/globalization/financialization/chapter1.pdf
[6] http://www.alternet.org/tags/middle-class
[7] http://www.alternet.org/%2Bnew_src%2B

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Progressive 'Back to Work' Budget Wins Praise for Anti-Austerity Approach

'A reminder that we don’t need to cut teachers and school lunches when we can eliminate wasteful giveaways to fossil fuel corporations.'  Watch Rep. Keith Ellison introduce the budget here:

By Jon Queally
Progressive America Rising via CommonDreams.org

March 14, 2013 - In the midst of ongoing hysteria about a 'non-existent deficit crisis' in Washington, the Congressional Progressive Caucus on Wednesday unveiled an alternative approach to destructive austerity economics by releasing their 'Back to Work Budget' plan for 2014.

Pushing back specifically on the dominant talking point of inside-the-Beltway elites, the budget challenges the idea that cutting programs, reducing corporate tax rates, and slashing investments is a pathway to economic prosperity. Its proponents argue the US does not have "a deficit crisis"—as those pushing for steep cuts suggest—but rather, "a jobs crisis."

Presented by CPC co-chairs Reps. Raúl M. Grijalva and Keith Ellison and backed by members of the caucus' Budget Task force—Reps. Jim McDermott, Jan Schakowsky, Barbara Lee and Mark Pocan—the plan describes how smart investments, not deep cuts to key programs, would create almost 7 million jobs over the first year of its implementation.

“Americans face a choice,” Grijalva and Ellison said. “We can either cut Medicare benefits to pay for more tax breaks for millionaires and billionaires, or we can close outdated tax loopholes and invest in jobs. We choose investment.”

They continue:

    The Back to Work Budget invests in America’s future because the best way to reduce our long-term deficit is to put America back to work. In the first year alone, we create nearly 7 million American jobs and increase GDP by 5.7%. We reduce unemployment to near 5% in three years with a jobs plan that includes repairing our nation’s roads and bridges, and putting the teachers, cops and firefighters who have borne the brunt of our economic downturn back to work. We reduce the deficit by $4.4 trillion by closing tax loopholes and asking the wealthy to pay a fair share. We repeal the arbitrary sequester and the Budget Control Act that are damaging the economy, and strengthen Medicare and Medicaid, which provide high quality, low-cost medical coverage to millions of Americans when they need it most. This is what the country voted for in November. It’s time we side with America’s middle class and invest in their future.

Received as a breath of fresh air of economic sanity, the plan was praised by a variety of individuals and groups.

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Five Reasons the World Is Catching on to the Financial Transaction Tax

SOURCE: AP/ Yves Logghe

Progressive America Rising via Center for American Progress

Campaigners and European trade unions dress as Robin Hood while calling on European Union leaders to go ahead with a financial transaction tax to mobilize money to help poor people hit by the economic crisis, in front of the European Council building in Brussels on May 23, 2012.

By Adam Hersh and Jennifer Erickson

Feb 25, 2013 - It has been more than 70 years since John Maynard Keynes wrote about the value of a financial transaction tax in “mitigating the predominance of speculation over enterprise in the United States.”

A financial transaction tax works by levying a miniscule fee on the estimated $2.9 trillion of daily financial activity through the trading of stocks, bonds, and derivatives in U.S. financial markets, based on our analysis. The tiny tax makes some of the most speculative unproductive trading unprofitable, thus steadying markets and promoting real investment while raising much-needed revenues. Though many countries around the world already have a financial transaction tax in place, the United States does not yet levy such a fee on trading.

While the idea of a modest financial transaction tax—or FTT, as it is often known—has been around for a long time, with budget balances and economic growth strained in the aftermath of the Great Recession policymakers around the world are taking a new look at the tax.

Below are five reasons why the world is catching on to the financial transaction tax as a smart policy tool.

A financial transaction tax would bring in much-needed revenue

The U.S. government is currently operating at its lowest level of revenues in more than 60 years. A 2010 report from the International Monetary Fund identifies the financial sector of the economy—particularly in the United States—as substantially undertaxed.

Even a tiny financial transaction tax would raise tens of billions of dollars in much-needed revenue. A tax applied at a very low rate—for example, a 0.117 percent tax on stocks and stock-options trading, a 0.002 percent tax for bonds, and a 0.005 percent tax for futures, swaps, and other derivatives trading—would raise an estimated $50 billion a year, according to our calculations. To put that amount into perspective, $50 billion in essence pays for all of America’s veterans health services, which ran to $50.6 billion in 2012. Historical evidence and economic theory show that financial transaction taxes have the potential to raise substantial revenues without impeding the function of capital markets. By keeping constant the relative transaction costs of trading in different markets, a financial transaction tax can raise revenues without distorting market behavior.

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Usurious Credit and Debt as Our Prison Cages

Breaking the Chains of Debt Peonage

By Chris Hedges
Truthdig.com

Feb 3, 2013 - The corporate state has made it clear there will be no more Occupy encampments.

The corporate state is seeking through the persistent harassment of activists and the passage of draconian laws such as Section 1021(b)(2) of the National Defense Authorization Act—and we will be in court next Wednesday to fight the Obama administration’s appeal of the Southern District Court of New York’s ruling declaring Section 1021 unconstitutional—to shut down all legitimate dissent.

The corporate state is counting, most importantly, on its system of debt peonage to keep citizens—especially the 30 million people who make up the working poor—from joining our revolt.

Workers who are unable to meet their debts, who are victimized by constantly rising interest rates that can climb to as high as 30 percent on credit cards, are far more likely to remain submissive and compliant.

Debt peonage is and always has been a form of political control. Native Americans, forced by the U.S. government onto tribal agencies, were required to buy their goods, usually on credit, at agency stores. Coal miners in southern West Virginia and Kentucky were paid in scrip by the coal companies and kept in perpetual debt servitude by the company store. African-Americans in the cotton fields in the South were forced to borrow during the agricultural season from their white landlords for their seed and farm equipment, creating a life of perpetual debt. It soon becomes impossible to escape the mounting interest rates that necessitate new borrowing.

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Class Struggle over Budgeting

Cut Deficit, But Not on Backs of Needy

By Sen. Bernie Sanders
Progressive America Rising via Politico

October 1, 2012 - Yes. We must address the very serious problem of a $16 trillion national debt and a $1 trillion federal deficit.

But at this pivotal moment in American history, it’s essential that we understand how we got into this deficit crisis in the first place and who was responsible for it. More important, we must address the deficit in a way that is fair and does not balance the budget on the backs of the elderly, the children, the sick and the poor — people who are already hurting.

Let us never forget that when Bill Clinton left office in January 2001, this country enjoyed a healthy $236 billion surplus, and the projections were that this surplus would grow by a total of $5 trillion over a 10-year period.

What happened? How did we go from a significant federal budget surplus to a massive deficit? Frankly, it is not that complicated.

President George W. Bush and the so-called deficit hawks chose to go to war in Afghanistan and Iraq and put the funding for those wars on our nation’s credit card. By the time the last wounded veteran is cared for, those wars will end up adding more than $3 trillion to our national debt.

During this same period, Bush and the “deficit hawks” provided huge tax breaks to the wealthiest 2 percent of Americans who were already doing phenomenally well. These tax breaks for the very rich will increase our national debt by about $1 trillion over a 10-year period.

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The Economic Platform for a Popular Front vs. Finance Capital & the Right

Let's Fight for a Progressive Agenda

By Senator Bernie Sanders
Progressive America Rising via HuffPost

Sept 29, 21012 - There are two major economic and budgetary issues which Congress must address in the lame-duck session or soon afterward. First, how do we reverse the decline of the middle class and create the jobs that unemployed and underemployed workers desperately need? Second, how do we address the $1 trillion deficit and $16 trillion national debt in a way that is fair and not on the backs of the elderly, the children, the sick or the poor?

Both of these issues must be addressed in the context of understanding that in America today we have the most unequal distribution of income and wealth of any major country on earth and that the gap between the very rich and everyone else is growing wider. Today, the top 1 percent earns more income than the bottom 50 percent of Americans. In 2010, 93 percent of all new income went to just the top 1 percent. In terms of wealth, the top 1 percent owns 42 percent of the wealth in America while the bottom 60 percent owns just 2.3 percent.

In my view, we will not make progress in addressing either the jobs or deficit crisis unless we are prepared to take on the greed of Wall Street and big-money interests who want more and more for themselves at the expense of all Americans. Let's be clear. Class warfare is being waged in this country. It is being waged by the Koch brothers, Sheldon Adeslon, Mitt Romney, Paul Ryan and all the others who want to decimate working families in order to make the wealthiest people even wealthier. In this class war that we didn't start, let's make sure it is the middle class and working families who win, not the millionaires and billionaires.

In terms of deficit reduction, let us remember that when Bill Clinton left office in January of 2001, this country enjoyed a healthy $236 billion SURPLUS and we were on track to eliminate the entire national debt by the year 2010.

What happened? How did we go from significant federal budget surpluses to massive deficits? Frankly, it is not that complicated.

President George W. Bush and the so-called "deficit hawks" chose to go to war in Afghanistan and Iraq, but "forgot" to pay for those wars -- which will add more than $3 trillion to our national debt.

President Bush and the "deficit hawks" provided huge tax breaks to the wealthiest 2 percent of Americans -- which will increase our national debt by about $1 trillion over a 10-year period.

President Bush and the "deficit hawks" established a Medicare prescription drug program written by the pharmaceutical and insurance industries, but they "forgot" to pay for it -- which will add about $400 billion to our national debt over a 10-year period.

Further, as a result of the greed, recklessness, and illegal behavior on Wall Street, this country was driven into the worst recession since the Great Depression which resulted in a massive reduction in federal revenue.

And now, as we approach the election and a lame-duck session of Congress, these very same Republican "deficit hawks" want to fix the mess they created by cutting Social Security, Medicare, Medicaid and education, while lowering income tax rates for the wealthy and large corporations. Sadly, they have been joined by some Democrats.

The fiscal crisis is a serious problem, but it must be addressed in a way that will not further punish people who are already suffering economically. In addition, it is absolutely imperative that we address the needs of 23 million Americans who are unemployed or underemployed.

What should working families of this country demand of Congress in response to these crises? Let me be specific:

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Solidarity Time vs. Finance Capital

Wall Street Protests:

Which Side Are You On?

By Van Jones
Progressive America Rising via RebuildtheDream.com

Wall Street has long been the home of the biggest threat to American Democracy. Now it has become home to what may be our best hope for rescuing it.

For everyone who loves this country, for everyone whose heart is breaking for the growing ranks of the poor, for everyone who is seething at the unopposed demolition of America's working and middle class: the time has come to get off the fence.

A new generation has gone to the scene of the crimes committed against our future. The time has come for all people of good will to give our full-throated backing to the young people of the Occupy Wall Street movement.

The young heroes on Wall Street today baffle the world because they have issued no demands. The villains of Wall Street had their demands -- insisting upon a massive bailout for themselves in 2008, while they pocketed million dollar bonuses. The Wall Street protesters are not seeking a bailout for themselves; they are working to bail out democracy.

The American experiment in self-governance is at a moment of crisis. The political system thus far has proven itself incapable of responding to a once in a lifetime economic calamity. With income inequality and unemployment at the highest rates since the Great Depression, it's no wonder that almost 80 percent of the country thinks we're on the wrong track.

But the crisis of American Democracy did not start with the financial collapse. For at least 30 years, the system has been rigged by the wealthy and privileged to acquire more wealth and privilege. At this point, 400 families control more wealth than 180 million Americans.

This great wealth divergence has resulted in an unjust and dangerous concentration of economic and political power in the hands of the few. It has pushed millions -- especially the rising generation and communities of color -- into the shadows of our society. The middle class continues to shrink, and the ranks of the poor have swelled. The political elite has failed to take the necessary steps to provide opportunity to the majority of Americans.

A movement was born after Madison, Wisconsin, to oppose these injustices. It has now spread to every Congressional District. We call ourselves the American Dream Movement. We engaged 130,000 people to crowd-source our own jobs agenda -- the Contract for the American Dream. In August, tens of thousands demonstrated for jobs in rallies across the nation. Next week in DC, we host our first national gathering: the Take Back The American Dream conference.

The Occupation of Wall Street -- and the occupations throughout the country -- are expressions of the same spirit and dynamic. And these particular demonstrations, perhaps uniquely, contain the spark to grow into a movement that can be transformative. They are the first, small step in the creation of a movement that can restore American Democracy, and renew the American Dream.

The hundreds of young people from all five boroughs that camp out every night, in the heart of the financial district, in the rain and the cold, at risk of arrest, are providing the inspiration to draw more and more out of the shadows and into the bright light of the public square. The occupation grows larger and more diverse every day. Young people, the majority of whom are under 25 and have never before engaged in activism, are managing the arduous task of a consensus rules meeting with no sound system. The nightly general assemblies are attracting crowds in the thousands to stand amongst a group of their peers and debate our path forward as a people.

The occupation is a revival of a proud tradition of authentic, people-powered movements that have been dormant -- and that we need now more than ever. It is building into the kind of massive public demonstrations -- like those in Egypt, Madison, and Santiago -- that can shake the foundation of a system of power that has lost sight of the public good.

Now is our time to choose. Will we keep rewarding those whose financial manipulations have brought us to ruin? Or will we stand with those whose democratic innovations are breathing life into our finest ideals? Both groups are within blocks of each other in downtown Manhattan.

For the past 30 years, the country has stood behind the titans on Wall Street and their values. We listened when they said that their banks were too big too fail. Today, there is only one thing that's too big to fail: the dreams of this new generation, finding its voice in Liberty Park. All of America should now stand with them.

Authored by Van Jones, President of Rebuild The Dream, and Max Berger, a youth organizer with the American Dream Movement.

Follow Van Jones on Twitter: www.twitter.com/VanJones68

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Jobs, Team Obama and the Banksters

Main Street?

by Bill Fletcher, Jr.

January 21, 2010

(NNPA) - In the midst of the 2008 financial collapse the public was told that Wall Street needed to be saved otherwise we faced total economic disaster. We were also told that so-called Main Street, that is our communities, would also receive badly needed assistance. In fact, the Obama stimulus package was to be aimed at speaking to the needs of Main Street.

The drawbridge between the two ''streets'' seems to be stuck in the up position. While Wall Street has largely been saved from total catastrophe, and many financial institutions have actually grown as a result of the crisis, the plight of regular working people has stagnated or worsened. Yes, it is true that the economy is shedding fewer jobs than a year ago, but the point is that the economy continues to shed jobs rather than add jobs. Thus, once again we face the prospect of what has come to be known as a ''jobless recovery.''

The depths of the current economic crisis go beyond what most of us that have grown up since the Depression are familiar with. Yet what we are experiencing did not just start to happen in the fall of 2008 or the end of 2007 (when the recession officially came about). There has been a slow-moving decline in living standards going on since the mid-1970s and some communities, particularly communities of color, have suffered badly.

When the discussion of the stimulus package was raised this seemed to be the right direction to go. Tax cuts and other Republican magical devices would not work. Yet, true to form, the Obama administration chose to proceed cautiously rather than put the funds into the stimulus that were truly needed. The second problem is that it has taken a long time for the stimulus funds to get where they are needed. The third problem is that too much of the thinking around the stimulus focuses on the immediate victims of this current recession rather than thinking about the long-term victims of our brave new economy.

Ironically, the political Right is attacking the Obama administration for paying too much attention to Wall Street. Certainly if the Republicans were in power they would have done even less for Main Street, but who bothers with the facts? The political Right is playing off of increasing anger among white victims of the economic crisis in order to focus them on looking for scapegoats, whether those scapegoats are Jews, immigrants, gays/lesbians or, yes, Black folks. If the Obama administration does not move quickly to preempt this right-wing demagoguery huge sections of the population will not only be drawn into irrationalism, but people will not bother to pay attention to any efforts by the Administration to address Main Street.

Significant effort must go into jobs and economic development, but it is an effort that must be linked to local initiatives at rebuilding. Not only should funds go to those who have recently lost their jobs, but there must be attention to sites of chronic unemployment, such as the Camden, New Jerseys or Flint, Michigans. That means that it is more than just sending in funds, but funds must also be accompanied by the creation of local economic development boards that work to plan how the funds can be used in order to build a sustainable local economy. Anything less and it will only result in pouring water into a draining bathtub.

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum and the co-author of ''Solidarity Divided.''

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Obama Battles Hedge Funds in Auto Crisis

Why Obama Is
Pissed at the
Hedge Funds

By Ezra Klein
American Prospect

One of the interesting threads in the Chrysler bankruptcy was Obama's evident fury at the hedge funds and investment banks that refused the deals the government offered. The reason for their reluctance was simple enough: Bondholders don't want to lose money. But the strategy behind their intransigence proved poor: They didn't think the government would send Chrysler into bankruptcy. And that gave them leverage. Out-of-court debt restructurings generally require consensus. But they were wrong. Not only did the administration let Chrysler fall to the bankruptcy courts, but Obama called the investors out by name:



While many stakeholders made sacrifices and worked constructively, I have to tell you some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices, and they would have to make none. Some demanded twice the return that other lenders were getting.

I don't stand with them. I stand with Chrysler's employees and their families and communities. I stand with Chrysler's management, its dealers, and its suppliers. I stand with the millions of Americans who own and want to buy Chrysler cars. I don't stand with those who held out when everybody else is making sacrifices.


You're seeing, some say, the hidden hand of Ron Bloom here. Bloom is an inside player often called Labor's investment banker. A Harvard Business School grad who spent a decade in private finance, he eventually joined the labor movement as a special assistant to the president of the United Steelworkers. Now he's one of the key players on Obama's automobile task force. And you can see his perspective informing some of Obama's decisions. ron_bloom_0217.jpg

New Yorker writer Peter Boyer recalls a talk Bloom gave three years ago to a group of insolvency lawyers and accountants. In it, he described a hypothetical restructuring, and argued that you needed to think of both the workers and the bondholders as having made the equivalent of "loans" to the company. The difference was that the bondholder had settled on clear terms. They could end the relationship at any time by selling the bond on the open market. Labor's "loan," however, could not be cashed out. If the company failed to honor future obligations to workers, the money was, for labor, simply lost. Bloom explained:

They worked a lifetime and deferred a significant amount of current compensation in exchange for the company’s promise that, upon their retirement, they would be paid a fixed stream of cash and provided with help with their medical bills. Then, without their knowledge or consent, the company chose to not set aside enough money to honor that promise. In effect, the company borrowed money from them without even discussing the terms of the loan....So what we have is a bunch of old men and widows being forced to lend the company, for whom they worked a lifetime, some portion of the value of their pension and their health care. This loan was made on terms on which they have no input and they have no ability to liquidate their position.


Labor, in other words, has no ability to liquidate. The hedge funds do. And in the case of Chrysler, the workers have seen their position brutally and quickly reduced, with very little input from them. The hedge fund, conversely, refused to liquidate their own position, and demanded ever more favorable terms from the government. And Obama, it seems, quickly grew to judge their position repellent.

The other piece of the puzzle is that Chrysler was something of a trial run. The really consequential negotiations are still to come. They'll happen when the administration sits down with GM. One of the apparent miscalculations made by Chrysler's bondholders was that the government desperately wanted to avoid letting Chrysler go into bankruptcy. But by showing its capability to be ruthless in the Chrysler negotiations, the administration might have just improved its bargaining position in the GM negotiations, as it is now harder for various stakeholders to predict exactly how risk averse the government will, or won't, be.


**********************
Dean Baker:


The Hedge Funds' Chrysler Gamble

The NYT discussed President Obama's feud with several hedge funds who refused to agree to the same write-down terms as other major bond holders. While the article points out that the hedge funds had purchased the debt for around 30 cents on the dollar, it would have also been useful to point out why the debt was selling for 30 cents on the dollar.

Other investors assessed both Chrysler's economic situation and the politics around the bailout and concluded that they were unlikely to get more than 30 cents on the dollar. The hedge funds that refused to accept the deal offered by the Obama administration were speculating that they could pressure the Obama administration into giving them a better deal. That is why they were prepared to pay more for this debt than other investors.

--Dean Baker

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Obama: Just Say 'No' to 'Banksta' Jerks

Obama and

the Big Dogs

By William Greider
The Nation

April 22, 2009 - The big dogs of banking and finance are playing a rough game of bump-and-run with our president, trying to knock him off balance and demonstrate their dominance. The best names in Wall Street--Goldman Sachs, JPMorgan Chase--pumped out happy talk about quarterly earnings, then announced that they intend to give back the government's money (more than $50 billion, if counted honestly). The crisis, they announce, is over for them. They want to be free of official meddling in their private affairs. The arrogance is breathtaking, even for Wall Street bankers.

Forget the financial numbers. What we are witnessing is a high-stakes melodrama of glandular politics. This rival power center, though gravely weakened, is contesting for control with the president. Think of dogs circling one another to establish who will be leader of the pack. For three decades, the Wall Street guys in good suits have ruled the economy, demanding deference from the political system and from corporate managements, too. Those who failed to follow them were punished, either through stock prices or election financing. Despite their catastrophic failure, the surviving bankers and financiers are trying to hold on to their thrones.


For the last couple of weeks, they have poked the kid in the chest and mocked his economic advisers with condescending gestures. Jamie Dimon of the Morgan bank handed Treasury Secretary Geithner a fake check for $25 billion. They threw complicating wrenches into the government's financial rescue plan. Their essential message, crudely colloquial, was intended for Barack Obama : "You don't have the balls to take charge of us."

The question is: Are they right? Obama seems cowed by their bluster. He certainly looks reluctant to take them on in a public way or refute their version of reality. This president wants to govern through public-spirited cooperation. The financial titans play hardball in return. I say "seems" because we do not yet know about Obama and how he will resolve this mess. The administration has been stalling action on the troubled banks, as if it believes in its own wishful forecasts about an early recovery for the economy. The bankers trumped him by announcing, hey, things are already better for us. So back off.

The bankers think they have the president cornered. His rescue plan cannot possibly succeed without much more money--hundreds of billions more--that Congress will be extremely reluctant to provide (Obama hasn't yet had the nerve to ask for it). The bankers' offer to return their welfare checks is a cute gesture, but a bluff. They know Obama's government is committed to save them, whatever it costs. As usual, the big dogs want to have it both ways--take the public's money but promise nothing in return.

Roughly speaking, that has been Obama's posture, too. He acts as though the old order must be restored with public money, but without forceful government direction. He can call their bluff if he has the courage--shut down a couple of big banks, take control of the system--and the public would cheer. During the campaign, Obama demonstrated he is a great teacher--his political vision changed the country. But we do not yet know if he is a confident political leader willing to use his power against formidable adversaries in order to get his way. Every potential rival is now taking his measure. Weakness would doom him.

The financial crisis poses the first great moral dilemma of the Obama presidency. Sometime in the next few months, he will be compelled to choose between his technocratic inclinations--rescuing certain financial institutions deemed "too big to fail"--and the obvious moral wrongness of his policy of rewarding the very players who caused our national disaster. The broad public does not doubt that this is morally wrong. I saw a Zogby opinion poll the other day that said only 6 percent of the public supports the financial bailouts. Obama is on the wrong side of that bipartisan consensus.

The moral dilemma in the financial crisis is oddly parallel to Obama's reluctant approach on the torture issue. The president bravely made public the sickening documents from the Bush administration that reveal how CIA and Justice Department officials rationalized their illegalities and authorized crimes against humanity. Yet the president said it would be wrong to prosecute (or even investigate) any of the CIA agents or military officers who committed these crimes. Likewise, we are told it would be wrong to punish the financial malefactors or look too closely into how they engineered the gross fraud and false valuations that destroyed trillions of dollars in American wealth. Let's not dwell on the past, the president says, let's look forward.

But everything Obama does now--or fails to do--becomes an inescapable precedent for the future, defining the true meaning of law and moral principle. The president's rationale on government-led torture sounds dangerously close to the line of defense invoked by Nazi war criminals at Nuremberg. We were only following orders. CIA barbarians are invited to hide behind that excuse.

So in a sense are the bankers from Wall Street. They were merely doing what the financial markets wanted and what the government allowed. Rescuing these players now, while declining to force fundamental structural changes on the banking system, would essentially ratify the bankers' arrogant beliefs. They are too important to fail. The government will never let it happen. Despite their destructive behavior, they will be allowed to remain in power and free to do it all again.

I do not doubt the president's good intentions, but if he is not vigilant, the "Obama precedent" could prove to be an ugly legacy. His name might someday be linked to wilful evasion of misdeeds and the degradation of law and moral principle. When great crimes are committed in the future by government or by powerful private interests, people in authority might decide to let them go by, citing the national interest and recalling how Barack Obama dealt with similar events.

About William Greider

National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The Soul of Capitalism (Simon & Schuster) and--due out in February from Rodale--Come Home, America.

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Grapes of Wrath, a Classic for Today?

The Grapes of Wrath, published exactly 70 years ago, can be seen as a prophetic novel - rooted in the tragedies of the Great Depression, but speaking directly to the harsh realities of 2009, writes Steinbeck scholar Robert DeMott.

Steinbeck's epic novel, which traces the harrowing exodus of Tom Joad and his family from blighted Oklahoma (where they are evicted from their farm), across the rugged American south-west via Highway 66, and on to what they mistakenly hope will be a more promising future in California, is considered by many readers to be the quintessential Depression-era story, and an ironic reversal of the rags-to-riches tale favoured by many optimistic Americans.

Seventy years ago, on April 14, 1939, The Viking Press in New York officially published John Steinbeck's searing novel The Grapes of Wrath. It was released on the fourth anniversary of Black Sunday, when the worst dust storm in recent American history had rolled across the Great Plains blotting out the sun and later depositing airborne topsoil 1,000 miles east in Washington DC. Steinbeck thought his novel was too raw for wide general appeal: "I've done my damndest to rip a reader's nerves to rags," he told his editor in early 1939. But despite its unflinching detail, gritty language, and controversial reception (the American Library Association includes it among the 100 most frequently banned and/or challenged books), the Grapes of Wrath has attained classic status and appears on many best novels lists.

The Grapes of Wrath treats as a national epidemic the wave of widespread foreclosure, uprootedness, migration and homelessness caused by the double whammy of cataclysmic environmental and economic disasters.

The thirties was a decade of staggering unemployment in America - as high as 25% in 1933, and still hovering around 19% in 1938, the year in which Steinbeck set The Grapes of Wrath.

Steinbeck was not reticent about assigning part of the blame for the catastrophic conditions on the "Bank," the "Company," and the "State"; that is, to faceless, bloodless corporate, institutional, and bureaucratic organisations, so that his novel has an extremely hard, angry edge, though it offers no practical answers for a populace displaced by the shift from agricultural to industrial economies.

Steinbeck's partisanship was aided and abetted by his anger over the deplorable conditions under which migrant workers and their families (estimated to be as high as 300,000) lived and laboured once they reached the end of their diaspora in California, his home state.

What goes around comes around. For emotional urgency, evocative power, and sustained impact The Grapes of Wrath has few peers in American fiction. Seven decades later it has never been out of print and still sells by the carload.

To become a classic, it is often thought that a book needs to transcend its contemporary origins and remain untouched by subsequent history. But it is more accurate to think that a book becomes a classic precisely because it keeps being informed by the most recent historical developments. A literary classic speaks directly to readers' concerns in successive historical and cultural eras.

Dustbowl farm Enlarge Image

In this sense then, The Grapes of Wrath is a prophetic novel, rooted in the economic and environmental tragedies of the Great Depression, but speaking just as directly to the harsh realities of our own time.

At this moment of global economic meltdown, when the whole world is gripped by severe financial recession (much of it caused by rapacious greed, fiscal malfeasance, and corporate arrogance), when groups around the globe are in migration from one kind of tyranny or another, when the gap between rich and poor seems insurmountable, and when homelessness and dispossession caused by widespread financial failure and mortgage foreclosure is rapidly rising in the US and elsewhere - symbolised by shantytowns and tent cities on the outskirts of major metropolitan areas - then it is fitting to think of The Grapes of Wrath as our contemporary narrative, our 21st Century jeremiad.

The characters of Ma and Tom Joad have been etched into popular culture

But Steinbeck's impact does not end there. Throughout his career - well into the 1960s - Steinbeck was a writer with a remarkably acute conscience and a deep respect for common sense morality.

He carried on a kind of lover's quarrel with America, and warned against runaway materialism, institutional imperialism, intellectual hypocrisy, and rampant greed - all inevitable and regrettable by-products of an advanced industrialised capitalist society.

"If I wanted to destroy a nation," he wrote in 1966, "I would give it too much and I would have it on its knees, miserable, greedy and sick."

It is impossible to know how Steinbeck would have reacted to our current malaise, fuelled in part by unbridled financial speculation and lax governmental oversight, but it is tempting to think, given the outcome, he might have said, "I told you so."

Robert DeMott is Professor of American Literature at Ohio University and a former director of the Steinbeck Research Center at San Jose State University in California.

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Make Green Economy A 'War' Mobilization

Photo: Reich with Obama

It's a Depression:
Focus on Workers,
Not on Wall Street

Robert Reich
robertreich.blogspot.com

April 3, 2009 - The March employment numbers, out this morning, are bleak: 8.5 percent of Americans officially unemployed, 663,000 more jobs lost. But if you include people who are out of work and have given up trying to find a job, the real unemployment rate is 9 percent. And if you include people working part time who'd rather be working full time, it's now up to 15.6 percent. One in every six workers in America is now either unemployed or underemployed.

Every lost job has a multiplier effect throughout the economy. For every person who no longer has a job and can't find another, or is trying to enter the job market and can't find one, there are at least three job holders who become more anxious that they may lose their job. Almost every American right now is within two degrees of separation of someone who is out of work. This broader anxiety expresses itself as less willingness to spend money on anything other than necessities. And this reluctance to spend further contracts the economy, leading to more job losses.

Capital markets may or may not unfreeze under the combined heat of the Treasury and the Fed, but what happens to Wall Street is becoming less and less relevant to Main Street. Anxious Americans will not borrow even if credit is available to them. And ever fewer Americans are good credit risks anyway.

All this means that the real economy will need a larger stimulus than the $787 billion already enacted. To be sure, only a small fraction of the $787 billion has been turned into new jobs so far. The money is still moving out the door. But today's bleak jobs report shows that the economy is so far below its productive capacity that much more money will be needed.

This is still not the Great Depression of the 1930s, but it is a Depression. And the only way out is government spending on a very large scale. We should stop worrying about Wall Street. Worry about American workers. Use money to build up Main Street, and the future capacities of our workforce.

Energy independence and a non-carbon economy should be the equivalent of a war mobilization. Hire Americans to weatherize and insulate homes across the land. Don't encourage General Motors or any other auto company to shrink. Use the auto makers' spare capacity to make busses, new wind turbines, and electric cars (why let the Chinese best us on this?). Enlarge public transit systems.

Meanwhile, extend our educational infrastructure. So many young people are out of work that they should be using this time to improve their skills and capacities. Expand community colleges. Enlarge Pell Grants. Extend job-training opportunities to the unemployed, so they can learn new skills while they're collecting unemployment benefits.

Finally, accelerate universal health care.

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Lincoln's 'Just and Lasting Peace'

Photo: Multi-billion dollar military junkyard

Cut the Military Budget
(Or Make Levees, Not War)

By Steve Cobble
Huffington Post

An Open Letter to Our Congressional
Leaders on Military Budget Cuts:

On the 200th anniversary of Abraham Lincoln's birthday, I'd like to call attention to the closing line from his Second Inaugural Address:

"...to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations."

Given that the U.S. still accounts for nearly half the world's spending on war, and preparations for war; given that we lead the world in arms sales; given that we have far and away the largest stockpile of nuclear weapons; and given that the Federal government still spends half its discretionary budget on war, and preparations for war--can we honestly say that we are living up to Honest Abe's charge?


And if not, shouldn't we be discussing what we might do differently?

During this week's crucial stimulus battle, the newspapers have been filled with discussion of the "high cost" of the Democratic leadership's recovery package(s), with the usual pundit fear-mongering over the deficit, with editorial applause for last-minute cuts in weatherization/school reconstruction/health care, and with comments on the supposed need to find equivalent "savings" in other domestic programs, perhaps even Social Security and Medicare.

Yet there is one budget topic that is rarely discussed inside the D.C. Beltway--our massive, unstable, and unsustainable war economy. This seems like a huge oversight, since this is one of the few places remaining where real money can be found to fund the programs that President Obama and the Democratic Congressional leadership promised during the 2008 campaign, including a new "green jobs" economy, health care for everyone, and union jobs with good wages and benefits.
We know the military budget--plus the war spending--skyrocketed during the Bush/Cheney years.

So why don't we look across the Potomac River to the Department of Defense, which has enjoyed those massive Bush/Cheney funding increases? After all, it's been two decades since the Berlin Wall and the Cold War collapsed, and six years since everyone but Dick Cheney admitted that there were no weapons of mass destruction in Iraq--so do we really still need all the entire, expensive DOD wish list?

We just cannot afford the many costly weapons systems our war economy now desires--first, because we need the money for domestic programs; and second, because military spending does not create nearly as many new jobs as does spending on weatherization, mass transit construction, education, or health care.
So, for example, if we need to find hundreds of billions of dollars to put America back to work, provide health care for those left out, and build a sustainable new "green economy" that makes Mideast oil obsolete, why would we ever continue down the F-35 runway, spending massive amounts on one of the most expensive weapons system ever? We should cancel the delayed, not-very-stealthy, way-over-budget F-35 Joint Strike Fighter, with its estimated hundreds and hundreds of billions--perhaps even one trillion--dollars cost!
Think about the F-35's cost for a minute. Over its life cycle, the Joint Strike Fighter is now expected to cost just about as much as the stimulus package deal announced yesterday. Does that make any sense, in a time of economic--not military--crisis?

Can we afford the next allotment of F22 Raptors, which still have no mission? Would Honest Abe Lincoln approve of the V-22 Osprey, which even Dick Cheney once tried to kill? Can anyone tell me the strategic purpose of either the DDG-1000 destroyer or the Virginia class submarine?

No, I didn't think so.

If we want to turn the page on the recent past, and show the world the new face of America, we must end the occupation of Iraq, as the President and the leadership in the Congress have promised. We should remember the tragedy of LBJ & Vietnam, and refuse to fall into the trap of a larger war in Afghanistan. We should release all documents from the Bush/Cheney secret files and let the legal chips fall where they may, in keeping with our new President's commitment to the U.S. Constitution and to transparency. We should shut off dangerous and costly efforts to militarize space. And we should not only close down the torture camp at Guantanamo, we should shut down several hundred other overseas bases. After all, America was founded in opposition to Empire, not to become one.

Since President Obama has made it clear that he is serious about keeping his promise to reverse the nuclear arms race, the Congress should help him negotiate big cuts in our nuclear stockpiles--it would make the world a much safer place.
And since we know the future depends on developing a sustainable green economy, why not convert our national weapons labs completely to anti-nuclear-proliferation work and to alternative energy R&D? Aren't "loose nukes" and climate change two of our true security threats?

Lincoln's message to us, near the end of a bloody civil war, was that America's leaders should do all that they could to "...achieve and cherish a just and lasting peace."

If Abe Lincoln took a look at our spending habits today, wouldn't he have to conclude that America has not heard his message? Wouldn't he be forced to conclude that our hearts and minds are not committed to a just and lasting peace, but instead to a growing and incendiary arms race?

I do not believe that the current Federal budget really reflects where most Americans' hearts are. Our people are not comfortable with spending half our treasure on a military/industrial/petroleum complex while millions of Americans suffer without health care, pensions, good schools, affordable housing, even bridges and levees...

Dr. Martin Luther King, Jr. was an open admirer of Abraham Lincoln, and gave his "I Have a Dream" speech on the steps of the Lincoln Memorial. So perhaps it's appropriate to end with a reminder that Dr. King also warned us about an immoral war and the growing nightmare of a permanent war economy.
He called for a "true revolution of values," and worried aloud whether the "giant triplets of racism, extreme materialism, and militarism are incapable of being conquered."

America's greatest prophet taught us: "A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death."

America's greatest President called on us to "...achieve and cherish a just and lasting peace."

So I ask you, the Honorable Majority Leader, Madame Speaker, and all the elected Members of the Senate & House--don't you agree that it's time to pay them some mind?

Thank you, Steve Cobble

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Steelworkers Message to GOP Footdraggers:

Steelworkers Jobs March Draws
Thousands in Granite City, IL

By Scott Cousins
St Louis Suburban Journals

Feb. 10, 2009 - A line of more than 5,500 laid-off steelworkers from Granite City, auto workers from Decatur and Fenton, Mo., and their supporters stretched out for more than eight blocks along a mile-long route as part of a “Put America Back To Work” march Tuesday morning in Granite City.

The march, sponsored by local and state labor unions and several community groups, was held to support passage of a federal stimulus bill, including a “buy American” provision.

Both city and union officials said slightly more than 5,500 people participated.

The march went from a parking lot at U.S. Steel-Granite City Works to Amsted Rail, a distance of about one mile.

At a press conference before the march, labor leaders and local politicians said that passage of the bill — now working its way through Congress — would help jump-start the nation’s economy.

“We are living in unprecedented economic times,” said U.S. Rep. Jerry Costello (D-Belleville). “Families here in Granite City are hurting.”

More than 2,500 area steelworkers are currently laid off or will be soon — almost 2,000 now at U.S. Steel-Granite City Works, which has been idled, and almost 700 at Amsted Rail, which produces railcar parts.

Costello said he is hoping that differing versions of the bill can be reconciled by Congress and passed, and be on President Obama’s desk for signature by the end of the week.

“Every member of Congress can find a reason or something in this stimulus package they do not like,” he said. “If you are looking for an excuse to vote no, you can find an excuse. The fact of the matter is ... it’s time to support this president and his economic plan so we can give him the tools to turn this economy around.”

Much of the focus of the press conference was on “shovel-ready” infrastructure projects such as roads, bridges and schools that could begin within 90-120 days.

Costello said each billion dollars spent on infrastructure generates $6 billion in economic activity, and provides 34,000 “good-paying” jobs.

Union officials said that starting the infrastructure projects would be especially good for plants like Granite City Works. Approximately 30 to 35 percent of Granite City Works’ output is construction-grade steel.

Illinois Comptroller Daniel Hynes was among those attending the press conference, although he did not speak.

Later, he said passage of the bill was important for the state, which is facing a $9 billion deficit.

“The Congress has to put aside their differences and realize that people are desperate right now,” Hynes said. “They’re bickering over minute details while people are spiraling downward and losing their economic security.”

He said the state would benefit both from infrastructure programs and money it might receive for health care, education and other programs.

The march itself began just after 11 a.m., and was led by a tractor-trailer, followed by Joe Stephens, of Alton, and Marvin Tucker, of Granite City, both laid-off members of United Steelworkers of America Local 1899, carrying a large American Flag.

Most of the local’s 1,300 workers are laid off right now because Granite City Works was idled in December.

“There are so many people off work right now, the country is in bad shape,” Stephens said.

Behind them were several elected officials, including Madison County Board Chairman Alan Dunstan, Granite City Mayor Ed Hagnauer, Pontoon Beach Mayor Jim Denham, and Madison Mayor John Hamm.

“We have a lot of people in Granite City laid off at this time,” Dunstan said. “I think it’s important for us to be here and show our support.”

Hagnauer agreed, saying officials had a duty to support both the steel mills and their workers.

“Our community is not decimated by this, but it’s affected us greatly and we’ve got guys we want to put back to work,” he said.

Behind them, other marchers stretched out over approximately eight city blocks.

Louis Norton, of Centreville, was one of them.

Norton was an employee of Stein Steel Mill Services, which provides support services for Granite City Works, but is currently laid off.

“We need to go to work. We’d just like to get to work and get back to like it was,” said Norton.

The march worked its way along 20th Street to Niedringhaus Avenue, then past the main entrance to Amsted Rail, where about 40 workers were watching.

The march ended in an Amsted Rail parking lot, where some steelworkers performed a few skits, and people mingled, ate donuts or waited for shuttle rides back to their cars.

Dennis Barker, political action coordinator for USWA Local 1899, was one of those performing a skit about the demise of the American middle class.

“This is the first time we’re actually in the street — not in protest but in support of government action,” he said. “We want the government to take action, we want the government to pass the stimulus bill. The government is the last entity that can turn this country around.”

As the end of the parade was working its way toward the parking lot, others were walking back or waiting for friends.

Jack Guelzow of Worden, a laid-off member of Local 1899, had been at the front of the march, but he and some friends had already finished and were waiting near Amsted Rail for others who had been in the middle.

“Hopefully we can do some good here today, we’ll see what happens,” Guelzow said of the march. “It’s a pretty good crowd.”

Granite City Alderman Don Thompson was nearby, said, “I think it’s a very good turnout. I was really surprised. I think the weather was with us, and I think that’s what brought a lot of people out here today. I’ve been here 40-some years, and I’ve never ever seen this magnitude of people.”

“It was a great day for working people here in Granite City,” said Russ Saltsgaver, president of USWA Local 1899.

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Exorcising Demons of the 'War on Terror'

Photo: Obama in Afghanistan

Obama Notes #1

By Tom Hayden
Progressives for Obama
January 26, 2009

Shortly after Barack Obama was elected president, I boarded a red-eye flight to Washington to make a morning workshop on a juvenile justice bill. I hadn't bothered to take a red-eye for eight years, but now it seemed to matter. Something progressive actually might happen in public policy and, if so, it was worth the jet-lag and back pain.

For the first time in years, activists will need an inside strategy to complement the familiar tactics of fighting from the margins. The new president will have to reach out to progressives as well, with the same energy he invests in the religious and Republican right.

At the very least, success in the Obama era can be imagined as something more than slowing down the rate at which things get worse. Hope and heartbreak will rhyme. Wins and defeats can be expected, not simply the monotony of loss.

In that spirit I am beginning a new blog, Obama Notes, a regular analysis from the perspective of a progressive who strongly supported Obama in 2008. Where possible I will be suggesting steps to take.

#1. Torture

Obama's executive order was a tremendous breakthrough after eight years of Bush-Cheney. It will require close monitoring, of course, but it was hugely significant that it came so rapidly, with the stroke of a pen. The immediate question for the peace movement and human rights advocates is whether the Order applies to thousands of detainees in Iraq and Afghanistan who are being held in violation of human rights norms and, if not, why not. Congress should send letters of inquiry and follow up with hearings on the horrors for those detainees rounded up in preventive detention.

#2. The Predator Attack

The night after Obama's torture order, I was at dinner with a human rights lawyer who worried that the right-wing would launch political attacks on Obama for "letting our guard down." With that in mind, I became certain that the following day's Predator attack in Pakistan, which killed at least 10-18 people, was as much political as military, a message that the Pentagon will keep on launching strikes against a sovereign country in keeping with "war on terrorism" objectives. The cold truth may be that those people died in Pakistan to make closing Guantanamo more politically palatable. Many more will die as America tries to exorcise and replace the war on terror mentality.

Obama has good reason to worry about counter-pressures from the right and the intelligence community. One day after the executive order banning torture was signed, an odd article appeared on the New York Times' front page about a former detainee who has joined al Qaeda in Yemen. There was no apparent reason for the article's timing except the Obama announcement. The detainee in question was released by President Bush, and is suspected of involvement in car bombings in September 2007.

# 3. Afghanistan-Pakistan

The outlook in Afghanistan-Pakistan is cloudy and grim. The president's latest goal of a "hard-won peace" is a realistic retreat from rhetorical belligerence. But one gets the feeling that no one knows what to do. The appointment of Richard Holbrooke suggests a Dayton-like accord but without the ingredients of Dayton. Where the Balkans consisted of ethnic blocs and competing nation states, Afghanistan resembles the Stone Age without stable tribal structures.

Another 20,000 American troops shortly will become twenty thousand new targets, one of whom certainly will be the last to die for a mistake. And every Afghan the Americans kill will give birth to more insurgents.

The traditional anti-war liberal bloc in Congress has no current plans for opposition to Afghanistan and Pakistan. Unwilling to oppose the new president, afraid of being accused of losing, unable to conceive an exit strategy, they are presently without direction or leverage.

But this is not 2002-2003. There is a rank-and-file peace movement and a significant skepticism in public opinion that will not go away. There are few US resources for escalation in Afghanistan-Pakistan. Impatience will grow. "Obama's War" has an an unpleasant sound. The urgency of a diplomatic solution will grow by the day. The content of that solution is far from agreed upon.

Demands for Congressional hearings on an Afghanistan-Pakistan exit strategy in both House and Senate should be the point of departure.
The hearings should occur, and be widely broadcast, no later than the spring, when the Washington weather will be more favorable to protests. In the run-up, teach-ins and other activist forums might begin studying books like Ahmed Rashid's Descent Into Chaos, for a preview of the nightmare scenario. Also contact Robert Greenwald's Brave New Films office where a campaign is planned to "get Afghanistan right."

#4. Iraq

Look for Obama to order his promised combat troop withdrawals but with all sorts of escape and delay clauses. The fog of diplomacy can be as bad as the fog of war in this case. Does the 16-month timetable still leave a reserve force in the tens of thousands and, if so, under what guidelines? Or does the recent US-Iraq pact mean in plain words that all US troops will be out by 2011? Again, questions from Congress will be imperative in clarifying the situation ahead. In the meantime, the public base of the peace movement will decline as peace appears to be "on the horizon."

#5. Gaza and the Middle East.

As I argued in the Huffington Post, the timing of Israel's assault was entirely political. First, it was a "consolation prize" after the US refused any assistance in launching a war against Iran. Second, the attack began on the day Obama was elected, and ended by the inauguration. Obama, who in 2007 said words to the effect that "no one has suffered like the Palestinians", observed a subsequent silent through the campaign and all during the Gaza battle. Once ended, Obama twice indicated a concern for Palestinian suffering two times, once in the words of Bono at the Lincoln Memorial, and later in the president's own formulation. More importantly, he appointed George Mitchell as a peace envoy, the best possible choice for those concerned about a just and reasonable settlement. Look for input from civil society, including delegations from Northern Ireland and South Africa, in the conflict resolution process ahead.

#6. Venezuela, Cuba, Latin America.
Obama's statements on Latin America during the campaign reflected a Cold War approach to the region rather than a positive embrace of progressive democratic elections. On the eve of the inauguration, in a Univision interview, he criticized Venezuela for being a "negative" factor in development and an ally of FARC terrorists in Colombia. Both statements were false and inflammatory, and some Administration sources now admit they were mistaken. The time for a new Obama platform on Latin America, in the tradition of FDR's good neighbor policies, will be in April at the Summit of the Americas in Trinidad. The president will have to decide whether to shake hands with Hugo Chavez and Evo Morales [the Cubans are excluded] and, more important, offer a more positive vision than continuing the war on drugs and "armoring NAFTA" [ in the words of the State Department's Thomas Shannon].

Once again, Congressional hearings on new directions in Latin America are sorely needed. And Obama needs a Latino emissary with a deeper empathy and more progressive policy mandate than the failed ones of the Bush era.

#7. The Economic Crisis.
ever in my lifetime have so many businessmen been pleading with the government to save them from capitalism. Never has there been such a demand for economic reform. Never has the left been weaker and more left out. Obama has invited many of the Mad Men [or, if you will, the Best and Brightest] who ruined the system to take charge of restoring it, not a good sign. These are people who generally believe that unemployment is a good and necessary thing, as well as the shedding of regulations, on the road to greater profits and growth. If Ralph Nader hadn't run so often for president, we might have a progressive voice in this debate, but...Obama's promise to deliver is threatened both by Republicans with faith-based illusions about tax credits, and traditional Democratic liberals who focus mainly on how much money the government gets to spend. Lost in the debate so far is whether financial and corporate institutions will be re-regulated, how, and by whom? Also at risk are the promises made for major public investments in the green economy.

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