I find it disturbing that a major city being put on lockdown in order to accommodate the international elite and suppress the underclass has become standard — and acceptable — procedure.
Right now, the leaders of rich and developing nations are in Toronto, and the authorities anticipated that there will be a series of protests during the conferences because there are always protests during the G8/G20 meet-ups.
Capitalism is particularly unpopular right now because the US has unleashed a steroid-filled version of it unto the world, and this economic system has failed to provide for the majority of people. It has, however, created a dwindling elitist echelon who control a vast majority of riches. In the year of Hayward and his yachting adventures, there’s no reason to doubt there will be any fewer protests against the douchiest rich people among us.
Toronto was ready to suppress such dissent, and shape a nice, pleasant narrative for the city’s visitors, by implementing a complete and total lockdown.
The “lockdown” of central Toronto includes a 3m-high (10ft), 3.5km (2.2-mile) concrete and metal fence enclosing the G20 meeting area and a huge security presence. Banks and theatres will be closed, as will one of Canada’s most famous tourist attractions – the CN Tower.
It’s important to remember that the supposed goal of the G20 summit is “to continue the work of building a healthier, stronger and more sustainable global economy.” And what better way to express that kind of egalitarian unity than to build a 10-ft-high, 2-mile-long fence to keep out the serfs?
These kinds of global gatherings have also become a playground for authorities to experiment with their newest, shiniest crowd control devices. Last year, I reported that Pittsburgh police demonstrated the latest suppression technology on protesters near that year’s G20 summit. The weapon du jour were sound cannons.
Mark Ames (h/t Alternet)
The killing spree in Alabama fits a well-worn pattern of workplace-driven massacres that we’ve seen since the “going postal” phenomenon exploded in the middle of the Reagan revolution.
In spite of the fact that these killings have gone on unabated for over 20 years, most of the country doesn’t want to know why they’re happening — least of all the people in power.
If we study the motive for Michael McLendon’s shooting rampage Tuesday, which left 11 bodies across three towns in southern Alabama, and we look at the bizarre way that the causes of the shooting are being hushed up, you begin to understand why this uniquely-Reaganomics-inspired crime started in the United States, and continues to plague us.
But of all the inexplicable circumstances surrounding the murder spree, one of the oddest has to be the way Alabama authorities went from focusing hard on solving the shooter’s motive to suddenly dropping the issue like a hot potato and running away from the scene of the crime, as if they didn’t like what their investigation produced.
On Wednesday night, investigators announced that they had discovered the motive, and they would reveal it to the world on Thursday morning.
Investigators close in on motive of Alabama gunman
by Donna Francavilla
SAMSON, Ala. (AFP) — Alabama investigators said they were closing in on a motive for the U.S. state’s deadliest-ever shooting, in which a man killed his mother, grandmother and eight others before taking his own life. The Alabama Bureau of Investigations said there had been “very recent developments that we believe may direct us to a motive” for the grisly rampage, but ABI was quick to dismiss earlier reports that a hit list had been found in the house of the gunman, identified as Michael McLendon.
But then something funny happened on Thursday. Alabama investigators completely reversed themselves: They were now claiming there was no way to find out the motive for the killings, and in fact, no motive ever existed in the first place.
“There’s probably never going to be a motive,” Trooper Kevin Cook, a spokesman for the Alabama Department of Public Safety, said Thursday.
Even the list that provided so many obvious clues as to what sparked the shooting is now no longer the “hit list” or list of people who had “done him wrong,” but rather, “the kind of list you’d put on a magnet on the refrigerator door,” according to Cook.
Which is odd, because just the day before, Cook told reporters, “As to motive, what we do know is that his mother had a lawsuit pending against Pilgrim’s Pride.”
Why the bizarre about-face? We may never know, because Alabama investigators abruptly closed the investigation at noon on Thursday, sending home almost the entire team. Nothing to see here folks, keep moving along.
This raises a new question: What was it about McLendon’s motive that officials wanted hushed? Or better yet: What did Pilgrim’s Pride do that could have incited a man described by all as nice, quiet and respectful to unleash a bloody killing spree?
On the surface, the horrific details seem to suggest a straightforward case of a lone psychopath unleashed: Michael McLendon, 28, shot and killed execution-style his own mother and four dogs, then set their bodies on fire before driving to other relatives’ houses and killing them; he killed a deputy’s wife and baby, along with bystanders; and like so many rampage massacres over the past 20 years, he ended his life inside of his former workplace: Reliance Metal Products, in the small town of Geneva, Ala.
Authorities say they discovered a list — presumably a hit list — of people and companies whom McLendon felt had done him wrong. Popular culture tells us that the hit list and his grievances are themselves signs that he suffered from a persecution complex, like so many Charles Mansons. No need to actually look into who was on that hit list and why — the mere discovery of such a list should be enough to indict him, case closed.
But nothing’s solved, nothing’s closed; and if we’re serious about understanding the “why” of this massacre, as everyone claims to be, then that list is the best place to start.
As with so many of these rage massacres from the past 20 years, the more you look at Tuesdays’ killing spree, the more you see that the system we’ve been living under since Reaganomics conquered everything has created all kinds of monsters and maniacs, from the plutocrats who’ve plundered this country for three decades straight, down to the lone broken worker — McLendon — who took up arms in a desperate suicide mission against the beast that crushed him.
So far we’ve learned that McLendon’s hit list names the three companies he had worked for since 2003 — Reliance Metals, which makes construction materials; Pilgrim’s Pride, the nation’s number one poultry producer, where his mother also worked, until she was suspended from her job last week; and Kelley Foods, a smaller family-owned meat-processing company from which McLendon apparently quit just last week.
Even more striking to someone who has studied these workplace massacres, it appears that McLendon was bullied and abused at work. One clue as to why he’d end his spree at Reliance, where he hadn’t worked since 2003, could be that he was trying to kill the source of the pain: workers at Reliance used to taunt him incessantly, giving him the nickname “Doughboy.” Which basically means “fatso” and “faggot” combined: McLendon was 5 feet, 8 inches tall, but he weighed roughly 210 pounds.
Maybe it’s just a coincidence, but “Doughboy” is the exact same nickname that workers at Standard Gravure, a printing plant in Louisville, Ky., gave to a guy named Joe Wesbecker back in the 1980s.
Like McLendon’s case against Pilgrim’s Pride, Wesbecker also was locked in an ongoing labor dispute with his company, whose top shareholders had gone on an eight-year plundering spree, leaving little for the workers; the government backed Wesbecker’s case against Standard Gravure, and he “won” his dispute, but it was irrelevant.
By 1989, the culture had changed, all power went to the CEOs and major shareholders. Standard Gravure’s senior executives ignored the arbitration rulings and continued to treat Wesbecker however they felt, slashing his pay under a different pretense, which would require a whole new round of arbitrations.
Joe “Doughboy” Wesbecker finally cracked: on Sept. 14, 1989, he unleashed America’s first private workplace massacre, pitting aggrieved worker against vampiric company, borrowing from the numerous post office shootings that had erupted a few years earlier. The result: seven killed, 20 wounded, and the death of the company that drove him to the brink. And an unending string of workplace massacres by “disgruntled employees” ever since.
Next time any asshole calls a kid or a co-worker “Doughboy,” put the bully and the bullied on the top of your next Ghoul Pool list. Bullying in the workplace, like bullying in the schoolyard, is only now being recognized as a serious problem, with devastating psychological consequences — and the occasional rampage massacre.
Conventional wisdom used to say that victims of bullying should “deal with it” since it was “just the way things are”; nowadays, after all the workplace and school shootings, anti-bullying laws and codes are becoming increasingly common.
KIEV, Ukraine — Steel and chemical factories, once the muscle of Ukraine’s economy, are dismissing thousands of workers. Cities have had days without heat or water because they cannot pay their bills, and Kiev’s subway service is being threatened. Lines are sprouting at banks, the currency is wilting and even a government default seems possible.
Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering. And its predicament poses a real threat for other European economies and former Soviet republics.
The sudden, violent protests that have erupted elsewhere in Eastern Europe seem imminent here now, too. Across Kiev last week, people spoke of rising anger about the crisis and resentment toward a government that they said was more preoccupied with squabbling than with rallying the country.
The sign held by Vasily Kirilyuk, an unemployed plumber camped out with other antigovernment demonstrators here in the past week, summed up the pervasive frustration: “Get rid of them all,” it said.
Mr. Kirilyuk did not hesitate to take that further. “There will be a revolt,” he said. “And people will come because they are just fed up.”
Mr. Kirilyuk, 29, was standing in the same central square where throngs in 2004 carried out the Orange Revolution, a seminal event that brought to power a pro-Western government in Ukraine. He said he was a fervent supporter then of the protesters, but now he and a few dozen others who have set up tents here are demanding that the heroes of that revolution step down.
It is not hard to understand why world leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location. A small country like Latvia or Iceland is one thing, but a collapse in Ukraine could wreck what little investor confidence is left in Eastern Europe, whose formerly robust economies are being badly strained.
It could also cause neighboring Russia, which has close ethnic and linguistic ties to eastern and southern Ukraine, to try to inject itself into the country’s affairs. What is more, the Kremlin would be able to hold up Ukraine as an example of what happens when former Soviet republics follow a Western model of free-market democracy.
“Ukraine is a linchpin for stability in Europe,” said Olexiy Haran, a professor of comparative politics at Kiev Mohyla University. “It is a key player between the expanding European Union and Russia. To use an alarmist scenario, you could imagine a situation in Ukraine that Russia tried to exploit in order to dominate Ukraine. That would make for a very explosive situation on the border of the European Union.”
That Ukraine can cause problems for Europe was highlighted in January when Ukraine engaged in a dispute with Russia over how much it would pay Russia for natural gas, as well as over gas transport to the rest of Europe. The Kremlin shut off the gas for several days, and some European countries went without heat. The Kremlin also shut off gas to Ukraine in 2006 in a pricing dispute.
While Ukraine’s economy is dependent on exports of steel and chemicals, which have plummeted, the crisis has cut deeply because people are disillusioned with the government.
President Viktor A. Yushchenko, a leader of the Orange Revolution, who garnered attention around the world in 2004 when his face was scarred in a poisoning episode, is so widely scorned that a recent poll found that 57 percent of people wanted him to resign.
His rivals have also lost popularity, as the public has become exasperated by years of political bickering. In February, the International Monetary Fund refused to release the next installment of a $16.4 billion rescue loan to Ukraine because the government would not adhere to an earlier agreement to pare its budget.
Around the same time, Ukraine’s finance minister resigned, saying that the job had been “hostage to politics.”
On Friday, the monetary fund projected that Ukraine’s economy would shrink by 6 percent this year, and said that it was continuing to work with the government to find a way to disburse the rest of the rescue loan.
A presidential election is coming, probably to be held next January, and this prospect is making politicians, especially Prime Minister Yulia V. Tymoshenko, reluctant to adopt an austerity program that might alienate voters.
Mr. Yushchenko and Ms. Tymoshenko were pro-Western allies during the Orange Revolution, but have bitterly feuded since then, and he fired her once. A third rival, Viktor F. Yanukovich, a former prime minister who heads an opposition party that favors closer ties with Russia, also wants to be president.
On Friday, Mr. Yushchenko and Ms. Tymoshenko held a public meeting in an effort to demonstrate that they were working together. Mr. Yushchenko said he wanted “to show the readiness of all sides to take political responsibility for decisions which today are not easy.”
Even so, the two did not announce further anticrisis measures.
All over Kiev have been signs that tensions are building.
On the city’s outskirts, more than 200 tractor-trailer rigs were parked Thursday, their drivers threatening to block roads if the government did not help them with their debts, which they said were caused in part by the drop in the value of Ukraine’s currency, the hryvnia.
The truckers dispersed Friday, only after the government said it would try to address their demands, but they said they would be back soon if they were ignored.
“The government is to blame for all this,” said a trucker, Viktor V. Zarichnyuk, 26, who had been at the protest for 12 days. “We want the government and the national bank to agree that the money allocated by the International Monetary Fund, at least part of it, should go to regular people.”
At a branch of the Rodovid Bank across town, a tense crowd gathered Friday morning. The bank, close to failing, was allowing withdrawals of only $35 a day. And so people, some of them pensioners fearful for their life savings, have been trooping each day, ever more aggravated, to try to get what they can.
“Every day we come here — it’s insulting — in the cold and line up,” said Alevtina A. Antonyuk, 58, an engineer. “They are nothing at this bank but a bunch of thieves.”
Who is to blame, she was asked. Before she could answer, Dmitri I. Havrilkiv, 78, a retired crane operator, interrupted.
“The government has to be replaced,” he shouted. “They just can’t handle it!”
We have a remarkable ability to create our own monsters. A few decades of meddling in the Middle East with our Israeli doppelgänger and we get Hezbollah, Hamas, al-Qaida, the Iraqi resistance movement and a resurgent Taliban. Now we trash the world economy and destroy the ecosystem and sit back to watch our handiwork. Hints of our brave new world seeped out Thursday when Washington’s new director of national intelligence, retired Adm. Dennis Blair, testified before the Senate Intelligence Committee. He warned that the deepening economic crisis posed perhaps our gravest threat to stability and national security. It could trigger, he said, a return to the “violent extremism” of the 1920s and 1930s.
It turns out that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists. You wouldn’t know this from the Obama administration, which seems hellbent on draining the blood out of the body politic and transfusing it into the corpse of our financial system. But by the time Barack Obama is done all we will be left with is a corpse—a corpse and no blood. And then what? We will see accelerated plant and retail closures, inflation, an epidemic of bankruptcies, new rounds of foreclosures, bread lines, unemployment surpassing the levels of the Great Depression and, as Blair fears, social upheaval.
The United Nations’ International Labor Organization estimates that some 50 million workers will lose their jobs worldwide this year. The collapse has already seen 3.6 million lost jobs in the United States. The International Monetary Fund’s prediction for global economic growth in 2009 is 0.5 percent—the worst since World War II. There are 2.3 million properties in the United States that received a default notice or were repossessed last year. And this number is set to rise in 2009, especially as vacant commercial real estate begins to be foreclosed. About 20,000 major global banks collapsed, were sold or were nationalized in 2008. There are an estimated 62,000 U.S. companies expected to shut down this year. Unemployment, when you add people no longer looking for jobs and part-time workers who cannot find full-time employment, is close to 14 percent.
And we have few tools left to dig our way out. The manufacturing sector in the United States has been destroyed by globalization. Consumers, thanks to credit card companies and easy lines of credit, are $14 trillion in debt. The government has pledged trillions toward the crisis, most of it borrowed or printed in the form of new money. It is borrowing trillions more to fund our wars in Afghanistan and Iraq. And no one states the obvious: We will never be able to pay these loans back. We are supposed to somehow spend our way out of the crisis and maintain our imperial project on credit. Let our kids worry about it. There is no coherent and realistic plan, one built around our severe limitations, to stanch the bleeding or ameliorate the mounting deprivations we will suffer as citizens. Contrast this with the national security state’s strategies to crush potential civil unrest and you get a glimpse of the future. It doesn’t look good.
“The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications,” Blair told the Senate. “The crisis has been ongoing for over a year, and economists are divided over whether and when we could hit bottom. Some even fear that the recession could further deepen and reach the level of the Great Depression. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism.”
The specter of social unrest was raised at the U.S. Army War College in November in a monograph [click on Policypointers’ pdf link to see the report] titled “Known Unknowns: Unconventional ‘Strategic Shocks’ in Defense Strategy Development.” The military must be prepared, the document warned, for a “violent, strategic dislocation inside the United States,” which could be provoked by “unforeseen economic collapse,” “purposeful domestic resistance,” “pervasive public health emergencies” or “loss of functioning political and legal order.” The “widespread civil violence,” the document said, “would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.”
“An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home,” it went on.
“Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance,” the document read.
In plain English, something bureaucrats and the military seem incapable of employing, this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.
Adm. Blair warned the Senate that “roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown.” He noted that the “bulk of anti-state demonstrations” internationally have been seen in Europe and the former Soviet Union, but this did not mean they could not spread to the United States. He told the senators that the collapse of the global financial system is “likely to produce a wave of economic crises in emerging market nations over the next year.” He added that “much of Latin America, former Soviet Union states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism.”
“When those growth rates go down, my gut tells me that there are going to be problems coming out of that, and we’re looking for that,” he said. He referred to “statistical modeling” showing that “economic crises increase the risk of regime-threatening instability if they persist over a one to two year period.”
Blair articulated the newest narrative of fear. As the economic unraveling accelerates we will be told it is not the bearded Islamic extremists, although those in power will drag them out of the Halloween closet when they need to give us an exotic shock, but instead the domestic riffraff, environmentalists, anarchists, unions and enraged members of our dispossessed working class who threaten us. Crime, as it always does in times of turmoil, will grow. Those who oppose the iron fist of the state security apparatus will be lumped together in slick, corporate news reports with the growing criminal underclass.
The committee’s Republican vice chairman, Sen. Christopher Bond of Missouri, not quite knowing what to make of Blair’s testimony, said he was concerned that Blair was making the “conditions in the country” and the global economic crisis “the primary focus of the intelligence community.”
The economic collapse has exposed the stupidity of our collective faith in a free market and the absurdity of an economy based on the goals of endless growth, consumption, borrowing and expansion. The ideology of unlimited growth failed to take into account the massive depletion of the world’s resources, from fossil fuels to clean water to fish stocks to erosion, as well as overpopulation, global warming and climate change. The huge international flows of unregulated capital have wrecked the global financial system. An overvalued dollar (which will soon deflate), wild tech, stock and housing financial bubbles, unchecked greed, the decimation of our manufacturing sector, the empowerment of an oligarchic class, the corruption of our political elite, the impoverishment of workers, a bloated military and defense budget and unrestrained credit binges have conspired to bring us down. The financial crisis will soon become a currency crisis. This second shock will threaten our financial viability. We let the market rule. Now we are paying for it.
The corporate thieves, those who insisted they be paid tens of millions of dollars because they were the best and the brightest, have been exposed as con artists. Our elected officials, along with the press, have been exposed as corrupt and spineless corporate lackeys. Our business schools and intellectual elite have been exposed as frauds. The age of the West has ended. Look to China. Laissez-faire capitalism has destroyed itself. It is time to dust off your copies of Marx.
“‘Corruption is government intrusion into market efficiencies in the form of regulations.’ That’s Milton Friedman. He got a goddamn Nobel Prize! We have laws against it precisely so we can get away with it! Corruption is our protection! Corruption keeps us safe and warm! Corruption is why you and I are prancing around in here instead of fighting over scraps of meat out in the streets! Corruption is why we win!”
The quote is from the film Syriana, and the character that delivers the passionate/delusional diatribe is Danny Dalton, a Texas oilman and member of Committee to Liberate Iran. Dalton is a patsy, and is being charged with “corruption” in order to protect a much larger, much more corrupt corporation standing behind him. He’s a fall-guy, and that’s why he flies off the handle.
Watching the Bush administration and Wall Street executives’ gulp and thrash like beached fish made me think of little Dalton. The stock market isn’t a force of nature. It takes men and women (but mostly men) creating very corrupt policies to create America’s initial wealth, and then her downfall.
Everyone needs to stop acting like they’re surprised by the recession. It’s not cute, and it’s painfully insincere.
There’s been a proliferation of handwringing and philosophizing about what caused the economic collapse, why there was little impetus to aggressively address a rotting subprime industry, why our politicians were too lazy, slow, or indifferent to do something to address Wall Street’s broken ways.
Times of economic woes are the only time our society collectively examines the Free Market, and the effects of globalization — rarely on the world — but on us, Americans. How will this screw us? How long will it last? How will this vast machine affect us parochially?
Americans pretend like this is the others’ problem, and that they don’t also benefit from our corrupt society. Wall Street practices are certainly corrupt, but the problem isn’t contained to mortgage lenders, banks, and insurance companies. It’s pandemic and it has infected every facet of the American way of life.
The dirty truth no one wants to admit is that corruption floats America to the top. Only by utilizing cheap labor, deregulation, and speculative lending can our markets create extraordinary wealth. Wall Street occasionally acts as though it has just awoken from a strange nightmare because it’s necessary to act moral every now and then, namely when the press shows up.
Now is the time financial experts act like they have no idea how market bubbles inflate, CEOs get bonuses 100 times their annual salaries, and people like Bernie Madoff exist.
Regulation is trendy right now, but what that actually entails may surprise Americans. If our government seriously regulated the Free Market, and extended that moral behavior to the international community with living wages and humane worker conditions, it would profoundly change the way Americans live.
The price of our food, clothing, and other goods would increase. Fuel would skyrocket. Everything would be more expensive, and we would have to do with a lot less. CEOs would surrender their penthouses and yachts. Certain exotic fruits like bananas would suddenly cost much more now that Central American workers are permitted to unionize and demand living wages.
On the plus side, maybe less children would die and more people could have a shot at stability and happiness. Maybe cases of infectious disease would decline. Maybe people would drive less. Maybe we could save the world.
Of course, Americans would have to sacrifice, and they have a history of hating that. But things are changing now. There’s a murmur in this society, and it seems to be saying: Our way of life is broken. We need to fundamentally change the way we live.
People want regulation. They want less enormous wealth and extraordinary poverty. They want balance and justice. But they have to stop looking to the men that made the corruption to fix the problem. Americans have to demand the presence of independent sheriffs to watch industry 24/7 in order to right the wrongs of our corrupt past.
If regulation actually existed, things would be a lot less cushy for Americans, which would probably be a good thing, but some may suddenly miss that corruption that kept them so sheltered for so long.
There was news Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash (you can read the draft legislation here). Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation. Now, the New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress — Democrat and Republican — should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now — let them hear your voice.
1.This Bailout’s Inherent Fiscal Insanity Could Make Problem Worse
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it’s akin to check kiting, which is is illegal. Apparently, though, when the government does it, it’s billed as Serious Public Policy. Because that’s what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan’s underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is “not based on any particular data point” — that is, they created it out of thin air because “We just wanted to choose a really large number.” Slapping that amount of money onto the national credit card when our government can’t even justify the amount is beyond absurd — it is insane.
It didn’t have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to “submit a plan to Congress on how to recoup any losses,” according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street’s misbehavior.
2. Experts on both the left and right say this bailout could make things worse
Primum non nocere is the latin phrase for “first do no harm” — the priority principle for any EMT working on a sick patient. It should be the same priority for Congress at this moment — and a growing group of esteemed experts on both the Right and Left are insisting that this bailout bill could make things worse. Here’s a review:
- The Washington Post reported on Friday, almost 200 academic economists “have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear.”
- NYU’s Nouriel Roubini, the visionary who had been predicting this meltdown, says “The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan.”
- Harvard’s Ken Rogoff, a Former Federal Rerserve and IMF official, insists that the prospect of this bailout is, unto itself, taking a manageable problem and making it into a more intense crisis. He says that credit is frozen primarily because banks want to avoid dealing with other banks that might drive a hard bargain, and instead would rather wait for free money from the government. Without the prospect of that free money, Rogoff suggests that credit would probably begin moving again, if slowly.
- Dean Baker of the Center on Economic and Policy Research says that spending so much cash so quickly on such a poorly conceived plan could have the effect of making it impossible to fund economic stimulus that is the real way out of this mess. “Suppose the Paulson plan goes through,” he writes. “It is virtually certain that the economy will weaken further and the number of foreclosures and people without jobs will continue to rise. This is the fallout from a collapsing housing bubble…When families respond to their loss of home equity by cutting back their consumption it will deepen the recession. In this context it might prove very important to have the resources needed to provide a substantial stimulus. [and] there is no doubt that this bailout will make further stimulus much more difficult to sell politically.”
Meanwhile, it’s not even close to clear that this is a problem that requires such an enormous response. As mentioned above, the Treasury Department admits it has absolutely no factual basis for requesting $700 billion — an amount equivalent to about 5 percent of our entire economy. Additionally, the Washington Post reports that “Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.” Indeed, “many smaller banks said they were actually benefiting from the problems on Wall Street” and “even some of the nation’s largest banks, which have pushed hard for a federal bailout, deny that the current situation is forcing them to reduce lending.”
The questions, then, are simple: In the face of this bipartisan opposition from objective experts, why should a lawmaker instead believe the same Bush officials who helped create this crisis with their deregulation, the same Bush officials who just months ago said everything was AOK? Shouldn’t there be almost complete unanimity among both objective and partisan observers before spending 5 percent of our entire economy after just one harried week of White House demands? Fool me once shame on you, fool me twice, shame on me. It’s time, as The Who said, that we “don’t get fooled again.”
3. There are clearly better and safer alternativesThe mantra throughout the week has been that America has “no choice” but to pass Treasury Secretary Henry Paulson’s $700 billion giveaway — that, in effect, there are no alternatives. But that’s an out-and-out lie — one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties’ corporate campaign contributors.
The truth is, there are a number of alternatives. Here are just a few:
- In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon’s federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
- The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.
- For those in the mindless, zombie-ish “someone has to do something, so we have to do what the White House says!” camp, consider the possibility that you are under the spell of the same kind of White House fear that led us to invade Iraq because of Saddam’s supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with creating the political dynamic to pass a wasteful giveaway — one that couldn’t be passed otherwise without a sense of emergency. And ask yourself why you would listen to this White House instead of listening to those experts who have been predicting this crisis and are now advising against this bailout — experts like CEPR’s Baker. In two separate posts (here and here), he says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is “The Fed and Treasury will have to step in and take over the banks [which] is exactly what many economists argue should happen anyhow,” Baker writes. “So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks.”
- Then there is the idea of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn’t even been discussed but the thought experiment it involves is important to understanding why there is, indeed, an alternative to the Paulson plan. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks’ mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down move helping only financial industry executives.
On this latter proposal, some may argue that giving any relief to homeowners is “unfair” in that those homeowners created their problems, so why should taxpayers have to help them? But then, is helping homeowners any less fair than simply giving all the money away to Wall Street, no strings attached? I’d say no — and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).
4. Any Incumbent Voting for This Puts Themselves At Risk of Being Thrown Out of Office
As a preface, let me state that I think we live in a country where politicians too often listen to their donors and to the Establishment rather than their constituents, not the other way around. America is a country where our leaders dishonestly invoke the concepts of “Statesmanship” and “Seriousness” and their supposed hatred of “pandering” to justify ignoring what the public wants (as if giving the public what it wants is somehow not the objective of a democratic republic). So, in short, I don’t think there’s anything wrong with this bill being “politicized” by coming down the pike right before an election — in fact, I think it’s a good thing because the election — and the fear of being thrown out of office forces our politicians to at least consider what the public wants. I mean, really — would we rather have this decision made after the election, when the public can be completely ignored?
Polls overwhelmingly show a public that sees voting for this bill as an act of economic treason whereby the bipartisan Washington elite robs taxpayer cash to give their campaign contributors a trillion-dollar gift. As just two of many examples, Bloomberg News’ poll shows “decisive” opposition to the bailout proposal, and Rasmussen reports that their surveys show “the more voters learn about the proposed $700 billion federal bailout plan for the U.S. economy, the more they don’t like it.” Put another way, this bailout proposal has unified both the Right and Left sides of the populist uprising that I described in my new book and that is now even more angry than ever.
Any sitting officeholder that votes for this — whether a Democrat or a Republican — should expect to get crushed under a wave of populist-themed attacks from their opponents. We’ve already seen it start. In Oregon, Democratic challenger Jeff Merkley (D) is airing scathing television ads hammering Republican incumbent Gordon Smith for potentially supporting the deal. Similarly, this morning on Meet the Press, we saw Republican Senate challenger Bob Schaffer (CO) dishonestly papering over his own votes for deregulation and ripping into his opponent Rep. Mark Udall (D) for potentially supporting the deal. Incumbents, get ready for that kind of election-changing heat in your face if you vote “yes.”
This, by the way, could play out in the presidential contest. Barack Obama has been taking the advice of the Wall Street insiders in his campaign in endorsing this bailout. McCain has endorsed the vague outline, but he may ultimately back off once he sees the details, allowing him to then run the last month of the campaign as the economic populist in the race. I’m not saying it would work, considering McCain’s 26-year record of supporting the deregulatory agenda that created this crisis. But such a move could end up help him flank Obama on the defining economic issues of the race.
5. Corruption and Sleaze Are Swirling Around These Bailouts — and America Knows It
The amount of brazen corruption and conflicts of interest swirling around this deal is odious, even by Washington’s standards — and polls suggest the public inherently understands that. Consider these choice nuggets:
- Warren Buffett is simultaneously advising Obama to support the deal, while he himself is investing in the company that stands to make the most off the deal.
- McCain’s campaign is run by lobbyists from the companies that stand to make a killing off a no-strings government bailout.
- The New York Times reports that the person advising Paulson and Bernanke on the AIG bailout was the CEO of Goldman Sachs — a company with a $20 billion stake in AIG.
- The Obama campaign’s top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously “advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc.” — that is, who have a direct financial interest in the current iteration of the bailout.
Add to this the fact that the negotiations over this bill have been largely conducted in secret, and you have one of the most sleazy heists in American history.
If this bill passes, it will be a profound referendum on the dominance of money over democracy in America. That — and that alone — would be the only thing an objective observer could take away from the whole thing.
Money will have compelled politicians to not only vote for substantively dangerous policy, but vote for that policy even at their own clear electoral peril. Such a vote will confirm that the only people these politicians believe they are responsible for representing are are the fat-cat recipients of the $700 billion — the same fat cats who underwrite their political campaigns, the same fat-cats who engineered this crisis, and want to keep profiteering off it. Any lawmaker who takes that position is selling out the country, as is any issue-based political non-profit group — liberal or conservative — that uses its resources to defend a “yes” vote rather than demand a “no” vote. This is a bill that forces taxpayers to absorb all of the pain, and Wall Street executives to reap all of the gain. It doesn’t even force the corporate executives (much less the government leaders) culpable in this free fall to step down — it lets them stay fat and happy in their corner office suites in Manhattan.
Even if they believe that something must be done right now, lawmakers should still vote no on this specific bill, and force one of the very prudent alternatives to the forefront. They shouldn’t just vote no on Paulson’s proposal — they should vote hell no. Our economy’s future depends on it.
David Sirota is a best-selling author whose newest book, “The Uprising,” was just released this month. He is a fellow at the Campaign for America’s Future and a board member of the Progressive States Network — both nonpartisan organizations. His blog is at www.credoaction.com/sirota.
The Bush era has been a period of one outrage following the next, but the administration’s bailout of Wall Street’s wheeler-dealers is the most outrageous yet!
Bush’s parting gift to the fat cats who twice filled his campaign coffers to the brim — when they weren’t busy playing fast-and-loose with the American economy — is a huge pile of tax dollars that will get them out of the problems their recklessness created, while leaving Main Street high and dry and at risk of foreclosure.
Here are five things about the crisis — and the Bush-Paulson Plan — that we just can’t believe our officials would even have the nerve to contemplate, as well as something you can do to help stop them …
1. They’re Making Long-time Wall Street Honcho Henry Paulson Into an Emperor!
We just can’t get over this little tiny section in the Bush-Paulson plan. Just 32 words long, it says that the whole thing is up to Paulson’s “discretion,” and “may not be reviewed by any court of law or any administrative agency.” That’s like burning the Constitution! What happened to the separation of powers — to checks and balances?
2. They Want the Fox to Guard the Henhouse: Wall Street Brokers Will Decide which Wall Street Brokers Get a Piece of the Pie!
Believe it or not, Henry Paulson, who was a key player in creating this mess in the first place as the CEO of brokerage giant Goldman Sachs, wants to “outsource” the buying and selling of all these junk securities to Wall Street money managers. Remember, there are no restrictions on what they can do — their actions can’t even be reviewed by the courts!
3. They Want to Establish American Socialism for the Richest, and Dog-Eat-Dog for the Rest of Us!
Another thing that’s sticking in our craw is that this outrage is being pushed by the very same politicians who passed the horrible bankruptcy “reform” bill in 2005. That law actually made the mortgage situation worse, because it kept ordinary people from getting out from under a pile of consumer debt, and many more ended up losing their homes as a result.
When Bush signed the law, he said, “America is a nation of personal responsibility where people are expected to meet their obligations,” but that only goes for the Little Guy — the Big Boys get to make a mess and take no responsibility for it at all!
4. Nobody Knows How Much They’ll Really End up Pilfering from the Treasury?
The headlines all say that it’s a $700 billion bailout. But the plan that Bush put together only says that Secretary Paulson can hold onto $700 billion in bad securities at one time! He can buy some, sell ’em at fire-sale prices and then buy some more. Even worse, nobody knows what the final bill will be, because nobody knows what all those bad mortgages are worth.
5. They Want to Borrow All This Cash to Give to Wall Street, and Foreign Banks Too!
And, remember, the government doesn’t have that kind of money lying around — it’ll all be borrowed cash, sending the deficit through the roof.
When Bush came into office, he had a budget surplus. Then he got us into a trillion-dollar war in Iraq and at the same time gave all these huge tax cuts to the same people who are most responsible for this mortgage mess. He was set to pass a half-trillion-dollar deficit to the next president — now, it’ll be even higher! If the bailout passes, our children will still be paying for it for decades to come.
And Paulson says he even wants to let foreign banks get their snouts into the trough as well. It’s crazy!
This is certainly the greatest outrage yet, and we’ve got to stop it.
The following appeal from the Campaign for America’s Future is a great way to add your say to the snowballing resistance to this attempt to steal hundreds of billions from the public purse.
Within the next 24 hours, we expect Congress will make an historic choice to address America’s financial crisis: Cut the Bush administration a $700 billion blank check for Wall Street OR demand sensible public checks and balances in the $700 billion bailout. Write an emergency letter to Congress now, and tell them: No $700 Billion blank check to the Bush administration for Wall Street.
In the next 24 hours, Congress could shape America’s financial well-being for decades. Exploiting the financial crisis, the Bush administration is strong-arming Congress to give Wall Street $700,000,000,000 more of our taxpayer dollars — with no strings attached and no say from us.
Write an emergency letter to Congress now, and tell them: No $700 Billion blank check to the Bush administration for Wall Street!
Legislation could be on the floor of Congress within 24 hours. With the Bush administration stoking panic and pressuring Congress, citizens must speak up now to push back and demand common sense.
We need to fix this financial crisis, but giving $700 billion to Bush’s Treasury Secretary to spend as he wishes is over the top. The Bush administration is basically holding a gun to Congress’ head saying, “Give us the money immediately or the banks will blow up the world economy.”
If steps must be taken to keep the economy from failing, common sense must not be thrown out the window. Write Congress now and demand 3 basic principles to protect the public:
1.No Taxation Without Representation. If our tax dollars are going to buy bad assets from irresponsible bankers, the American people must get something for it. Equity in bailed out firms. Strong regulation so this doesn’t happen again. Stern public oversight. And, no golden parachutes for CEOs with our money.
2.No Help for Wall Street Without Help for Main Street. To truly get our economy back on track, we must aid the victims, not just the predators. Freeze foreclosures. Renegotiate bad mortgages. Create jobs generating clean energy and modernizing infrastructure. Prevent cuts in local police, health, road and school budgets. Extend unemployment insurance and food stamps.
3.No Insider Dealing. Wall Street can no longer be allowed to write their own laws. Legislators should refuse campaign money from Wall Street PACs or executives. We need a “time out” on contact between paid Wall Street lobbyists and elected officials while the crisis is addressed. Any congressional meetings with Wall Street officials must be immediately posted on a single website for complete transparency.
The next 24 hours will likely determine whether these common sense solutions prevail, or whether the Bush administration gets $700 billion more of our money to do with as it pleases.
Write now and demand that Congress ensure sensible checks and balances when dealing with hundreds of billions of our taxpayer dollars. Write now and tell Congress: No $700 Billion blank check to the Bush Administration for Wall Street!
Yes, George W. Bush’s lies have had far more dire consequences, and Karl Rove is master of the brutish smear campaign, but no one matches Reagan’s stylized lies. He made you feel like you were the only other person in the room when he lied right to your face.
Take, for example, Reagan’s famous “Chicago Welfare Queen” story that he used to illustrate the dangers of a socialized welfare system. He was loosely referencing a story about a welfare recipient in Chicago, who was publicly exposed in 1977 for having defrauded state welfare programs out of $8,000 by using two identities.
Never one to let the truth get in the way of a good yarn, Reagan turned the news report into a heartwarming tale of a “Welfare Queen” who cruised around in a Cadillac and collected an annual tax-free income of $150,000 by using “eighty names, thirty addresses, twelve Social Security cards and…collecting veterans’ benefits on four non-existing deceased husbands.”
Reagan repeated this story to anyone who would listen. He did so with a folksy charm that put people at ease and many bought into the Welfare Queen smear. They ignored Reagan’s legendary tendency to prevaricate. Like a quasi-racist relative drunkenly ranting at the Thanksgiving dinner table, Regan had everyone nodding along even though he was exaggerating some details to fit his preconceived notions of minorities.
If only the old bastard lived long enough to see the Bush administration’s baby, the misshapen, inbred offspring of Cronyism and Deregulation . If Reagan’s fuses blew at the first sign of a hungry black woman, imagine what would have happened to his Swiss cheese brain when the first CEO came knocking at his door for a hand-out.
Or maybe he would have been happy to lend his fellow rich, white people a couple (or 700 billion) bucks. After all, Neo-Conservatives are fine with Socialism as long as the right kinds of people are receiving the hand-outs. They love sharing, but only if the sharing concerns debt, and the taxpayers are the ones sharing it.
Yet they hoard profit among themselves, which is why they want Paulson to push through this bailout as quickly as humanly possible. Heaven forbid any kind of deal can be constructed that involves taxpayers getting their money back, or maybe even getting a slice of profit if the economy can somehow rebound from this disaster.
If Congress gets to debate this thing, they may…ya’ know…remember they’re working for the American people and try to stop the Wall Street crooks from raiding the Federal Reserve.
My advice to our representatives in Congress is to deliberate long and hard about this ridiculous scam Paulson is laughably trying to pass off as fiscal solvency. It’s good for no one except the Wall Street Welfare Queens, who have come looking for a hand-out from the government.
Gee, but I thought the big, bad government was the thing repressing their entrepreneurial spirit by demanding regulation and oversight. Of course, a little accountability may have circumvented this disaster. What’s the word for all that regulation and oversight and accountability in government?
Oh yeah! Conservatism.
Now, more than ever, we need the Republicans to flex that Conservative muscle they’re always bragging about. Wall Street tycoons don’t get to come in, borrow $700 billion, and run off without making some really specific promises. For example:
1. The taxpayers they’re borrowing get to own some stock in the performances of the banks and companies they’re about to save.
2. If our tax dollars go toward bailing out foreign banks, then foreign capital better flow back into our economy. I hear that’s how the “natural” ebb and flow of the immaculate Free Trade agreements are supposed to work, but it may take some extra muscle from our government to ensure it actually happens.
3. No do-overs. We got to see unfettered Capitalism do its thing. It sucks, and it doesn’t work. This doesn’t mean everything switches to a Socialist regime, so that hysterical talking point needs to die. All we need is regulation.
While Reagan exaggerated the story of the Chicago Welfare Queen, there are real welfare leeches in our presence. They’re the least needy, and they’re in trouble now because of their shady economic policies. They don’t get to set the agenda now that they’re reaping what they sowed.
As Reagan would say: No Free Rides, people.
From Manila Ryce, The Largest Minority
The Axis of Evo is at it again! At a UN forum on indigenous issues, Bolivian President Evo Morales called for a global economic overhaul.
Anyone with even a basic understanding of the forces destroying our planet knows that Morales is exactly right when he says: “If we want to save the planet earth, to save life and humanity; we have a duty to put an end to the capitalist system.” As much as Al Gore and GE would like you to believe, we can’t simply purchase our way out of this problem by buying more efficient products.
Capitalism depends on consumption, but the future of our species depends on conservation. We must embrace a democratic economic system which does not rely on the exploitation of workers and resources if we want to survive. Like watermelons, true environmentalists are green on the outside and red on the inside.
What do the capitalists propose we do to save the environment? Strict property rights. And they say socialists are crazy (well maybe, but at least we’re not stupid).
Click “Read more” to watch Morales on the Daily Show.