How Goldman SACS secretly bet on the U.S. housing crash

Perhaps this is the beginning of the prosecutions coming.

In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk. Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws."The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

More via How Goldman secretly bet on the U.S. housing crash | McClatchy.

Related articles by Zemanta

• If CIT fails, Goldman wins -- with a $1 billion - plus payoff (dailyfinance.com)


• Banksters (eschatonblog.com)


• Key Parts of Financial Stability Improvement Act (blogs.wsj.com)


• Wasted Talent and Corruption (firedoglake.com)


• Global from Day One: kaChing has the potential to disrupt the managed funds industry (vccafe.com)


• Capmark Financial files for bankruptcy protection (seattletimes.nwsource.com)


• Key House Panel Votes to Regulate Derivatives (nytimes.com)

Health Care Public Option: Did money talk?

Image via Wikipedia

The so-called "public option" component of health care reform died today when the Senate Finance Committee's Health Care Subdivision essentially the entire committee rejected an attempt to include it in legislation the panel is considering. Other bills circulating at the Capitol still have "public option," but Sen. Max Baucus removed it from his bill under pressure from Republicans, who considered it Socialist. The number of Democrats refusing to support the idea pretty much sinks it.The vote was 15-to-8, with Democrats Baucus, Sen. Tom Carper, Sen. Kent Conrad, Sen. Blanche Lincoln, and Sen. Bill Nelson joining all of the committee's Republicans with "no" votes.Most of the Democrats voting against the bill, were among the biggest Democratic recipients of health care cash in campaign fundraising. Coincidence? Who can say? The campaign finance system is such that one can only speculate what role it plays when legislation is considered that affects the campaign contributors. So you have to decide.

via Did money talk? | News Cut | Minnesota Public Radio.

Related articles by Zemanta

• Abstinence-only funding is still winning votes (bilerico.com)


• Huff Post: The Beginning Of The End For The Public Option (americablog.com)


• Schumer Upbeat on Public Option (politicalwire.com)


• Following the Money (mydd.com)


• Senate Finance Committee Rejects Public Option Amendments (mydd.com)


• Rockefeller Amendment Fails (talkingpointsmemo.com)


• Senate Committee Passes Quasi-Public Option Amendment (huffingtonpost.com)


• This tops them all for the moment: Grassley suggests to eliminate $7 billion a year in fees to corporate health insurance and make it up by reducing benefits to the poor (iflizwerequeen.com)

The girl who silenced the world for 5 minutes

Why Haven't Any Wall Street Tycoons Been Sent to the Slammer?

All I will say is find them and then hang them high.

Cover of Citizen Kane (Two-Disc Special Edition)

More than a year into the gravest financial crisis since the Great Depression, millions of Americans have seen their home values and retirement savings plunge and their jobs evaporate.

What they haven't seen are any Wall Street tycoons forced to swap their multi-million dollar jobs and custom-made suits for dishwashing and prison stripes.

There are plenty of civil and class-action lawsuits from aggrieved investors angered by the losses in their mortgage bonds, hedge funds or pensions. Regulators have stepped up their vigilance after the fact. But to date, no captain of finance tied to the crisis has walked the plank.

There have been some high-profile arrests and federal convictions of financial giants — such as Ponzi scheme king Bernard Madoff and Stanford Financial Group chairman Robert Allen Stanford. They weren't among the causes of the financial meltdown, however, just poster boys for an era of lax enforcement, weak regulation and devout faith in free markets.

"A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process," said Barbara Roper, the director of investor protection for the Consumer Federation of America.

The absence of what many would call justice stands out all the more because past financial crises always had their villains. The depression-era had electricity and railroad magnate Samuel Insull, who partly inspired the movie "Citizen Kane." The savings and loan crisis of the 1980's had banker Charles Keating. Energy giant Enron Corp.'s spectacular collapse offered the late CEO Kenneth Lay, a Texas crony of President George W. Bush.

Yet there's no such poster child for the Great Recession, as today's crisis is now called.

One may yet emerge. The FBI has more than 580 large-scale corporate fraud investigations under way. At least 40 of them are scrutinizing players in sub-prime mortgage lending, which was the first domino to fall and triggered a global financial crisis.

"The investigations are very complex; it's not something that's going to turn overnight," said Bill Carter, a spokesman at FBI headquarters. "They are labor intensive. They involve a review of records."

via t r u t h o u t | Why Haven't Any Wall Street Tycoons Been Sent to the Slammer?.

Related articles by Zemanta

• The SEC gets neutered again (money.cnn.com)


• Judge revokes bond for financier Stanford (msnbc.msn.com)


• SEC takes a few more 'baby steps' towards regulation (americablog.com)


• Madoff Lawyer: Bernie Should Only Get 12-Year Sentence (huffingtonpost.com)


• Sheldon Filger: Bernard Madoff and the Art of Financial Self-Delusion (huffingtonpost.com)


• A year after financial crisis, the consumer economy is dead (citizengkar.wordpress.com)


• Chomsky: What America's 'Crisis' Means to the Rest of the World (citizengkar.wordpress.com)

GOP cyber-security expert suggests Diebold tampered with 2002 election

Perhaps the truth will come out about the past elections tampering. Curiously, one week after Diebold sells it's voting machine for $5mil, information leaks about the Diebold CEO tampering with the machines during the Georgia election in 2002 where Democratic darling disabled veteran Max Cleland was defeated when polls said he would win.

Image by Getty Images via Daylife

A leading cyber-security expert and former adviser to Sen. John McCain (R-AZ) says he has fresh evidence regarding election fraud on Diebold electronic voting machines during the 2002 Georgia gubernatorial and senatorial elections.

Stephen Spoonamore is the founder and until recently the CEO of Cybrinth LLC, an information technology policy and security firm that serves Fortune 100 companies. At a little noticed press conference in Columbus, Ohio Thursday, he discussed his investigation of a computer patch that was applied to Diebold Election Systems voting machines in Georgia right before that state's November 2002 election.

Spoonamore is one of the most prominent cyber-security experts in the country. He has appeared on CNN's Lou Dobbs and ABC's World News Tonight, and has security clearances from his work with the intelligence community and other government agencies, as well as the Department of Defense, and is one of the world’s leading authorities on hacking and cyber-espionage.

In 1995, Spoonamore received a civilian citation for his work with the Department of Defense. He was again recognized for his contributions in 2004 by the Department of Homeland Security. Spoonamore is also a registered Republican and until recently was advising the McCain campaign.

Spoonamore received the Diebold patch from a whistleblower close to the office of Cathy Cox, Georgia’s then-Secretary of State. In discussions with RAW STORY, the whistleblower -- who wishes to remain anonymous for fear of retaliation -- said that he became suspicious of Diebold's actions in Georgia for two reasons. The first red flag went up when the computer patch was installed in person by Diebold CEO Bob Urosevich, who flew in from Texas and applied it in just two counties, DeKalb and Fulton, both Democratic strongholds. The source states that Cox was not privy to these changes until after the election and that she became particularly concerned over the patch being installed in just those two counties.

The whistleblower said another flag went up when it became apparent that the patch installed by Urosevich had failed to fix a problem with the computer clock, which employees from Diebold and the Georgia Secretary of State’s office had been told the patch was designed specifically to address.

Some critics of electronic voting raised questions about the 2002 Georgia race even at the time. Incumbent Democratic Sen. Max Cleland, who was five percentage points ahead of Republican challenger Saxby Chambliss in polls taken a week before the vote, lost 53% to 46%. Incumbent Democratic Governor Roy Barnes, who led challenger Sonny Perdue in the polls by eleven points, lost 51% to 46%. However, because the Diebold machines used throughout the state provided no paper trail, it was impossible to ask for a recount in either case.

Concerned by the electoral outcome, the whistleblower approached Spoonamore because of his qualifications and asked him to examine the Diebold patch.

[..]Individuals close to Arnebeck's office said Spoonamore confirmed that the patch included nothing to repair a clock problem. Instead, he identified two parallel programs, both having the full software code and even the same audio instructions for the deaf. Spoonamore said he could not understand the need for a second copy of the exact same program -- and without access to the machine for which the patch was designed, he could not learn more. Instead, he said he took the evidence to the Cyber-Security Division of the Department of Justice and reported the series of events to authorities. The Justice Department has not yet acted on his report.

[..]Sources close to Spoonamore said he was very concerned that he would lose his contracts as a result of coming forward and would take a "large financial hit." These sources added that, despite his concerns, Spoonamore felt obligated to reveal what he knows to the public. "He felt he had no choice as an American citizen but to come forward, and he also knows the likely consequences of him doing so," one source said.

More via The Raw Story | GOP cyber-security expert suggests Diebold tampered with 2002 election.

Related articles by Zemanta

• Diebold Sells Its Voting Machine Unit to Competitor (nytimes.com)


• Diebold Unloads Beleaguered Voting Machine Division (wired.com)

BANGLADESH: The modern face of slavery

Slavery still exists in this world, in the guise of loan repayment, men women and children become indentured slaves bonded to their owners until the "debt" is paid. Some end up contracted out to serve in places like Iraq and Afghanistan.

Tens of thousands of people are working as bonded labourers in rural Bangladesh, say activists. Even though it is illegal, entire families, including children, are bonded to their employers while they struggle to pay back loans.

"Thousands of children are being forced into bonded labour every day because of poverty and their parents' unemployment," Sumaiya Khair, a human rights activist and researcher into child labour in Dhaka, the capital, told IRIN.

"The biggest tragedy is that it all seems to go unnoticed," she said.

According to Anti-Slavery International, bonded labour - or debt bondage - is probably the least-known form of slavery and yet the most widely used method of enslaving people.

Although proscribed by international law, millions worldwide are affected, particularly in South Asia, including India, Pakistan and Nepal.

"Forced labour is the antithesis of decent work," ILO Director-General Juan Somavia said earlier this year. "It causes untold human suffering and steals from its victims. Modern forced labour can be eradicated, providing there is a sustained commitment by the international community, working together with government, employers, workers and civil society."

The face of slavery

Although rare in urban Bangladesh, bonded labour is common in rural areas.

Unlike in cities where workers are paid a daily or fixed wage, the rural workforce mostly has to make verbal arrangements for wages, which are often manipulated by unscrupulous landlords and loan sharks, known as Mahajan.

Still another way to become bonded is being forced to take out a loan due to a temporary financial crisis, often caused or aggravated by a poor harvest or family emergency.

Once bonded, the labourer is then forced to work long hours for little or no pay, often seven days a week.

Many, mostly women and children, end up as domestic servants, working in conditions that resemble servitude. Many suffer physical abuse, sometimes resulting in death, activists say.

"Domestic servants, especially the women and children, are often exposed to inhuman treatment. Few, if any, are concerned with this matter unless a tragedy like a death by torture becomes public," Nazma Ara Begum, director of the Family Planning Association of Bangladesh (FPAB), an NGO that also works with victims of domestic torture, told IRIN.

Photo: Contributor/IRIN

Workers drawn to the remote jungle island known as 'Dublar Char' of the Sundarbans region with false promises of lucrative jobs

Legislation

In 1972, Bangladesh ratified both ILO Convention No. 29 (1930), the Forced Labour Convention and ILO Convention No. 105 (1957), the Abolition of Forced Labour Convention.

The law prohibits forced or bonded labour and the Factories Act and Shops and Establishments Act provide for inspection mechanisms to strengthen laws against forced labour.

"Forced labour has been present in Bangladesh for centuries. After the liberation of Bangladesh, it changed its form and has taken the new face of various 'contracts' associated with loans taken by poor farmers from the usurers," Mohamad Abul Quasem, founder of the human rights related NGO Uddyam and member of the Bangladesh Red Crescent Society, said.

Human trafficking

Bangladesh prohibits trafficking in persons under the Repression of Women and Children Act of 2000 (amended in 2003); however, there is extensive trafficking in women and children, primarily to India, Pakistan, Bahrain, the United Arab Emirates, Kuwait, and within the country, mainly for prostitution and in some instances for labour servitude.

The exact number of women and children trafficked is unknown.

In 2008, the government created a 12-member anti-trafficking investigative unit that complements the existing anti-trafficking police unit.

Last year, 231 victims of trafficking were rescued and 34 offenders convicted, of whom 26 were sentenced to life imprisonment.

In addition, Bangladeshi men and women migrating to the Middle East and elsewhere for work often face bonded labour as a result of fraud or illegal fees demanded by recruitment agents.

"It is regrettable how crooked recruitment agencies often lure young men to their doom with false promises of jobs. The victims are often unable to contact their loved ones and remain stranded in foreign lands without decent payment and [in] inhuman living conditions. This is the modern face of slavery," Motasim Billah, a manpower consultant, told IRIN.

via IRIN Asia | Asia | Bangladesh | BANGLADESH: The modern face of slavery | Economy Governance | News Item.

Related articles by Zemanta

• Report: Exploited workers lose $20B a year (cnn.com)
• Slavery By Another Name (timesunion.com)
• Child Labor? In MY Local Store? It's More Likely Than You Think [Child Labor] (consumerist.com)
• Choose Slave-Free Products (iflizwerequeen.com)

Chomsky: What America's 'Crisis' Means to the Rest of the World

The truly historical perspective of world events begins with the colonial era. It tells the story of the West stealing the world's wealth and creating the so called "third world" calling it "manifest destiny" and the "white man's burden".

One billion are facing starvation due to desertification. In part it is the result of global warming, in part, poor farming techniques. Yet, we in the west have more important news to hear, the President was called a liar by a Senator.

Image via Wikipedia

As The New Nation anticipated, the “devastating news” released by the World Food Programme barely even reached the level of “mere ‘news.’” In The New York Times, the WFP report of the reduction in the meager Western efforts to deal with this growing “human catastrophe” merited 150 words on page ten under “World Briefing.” That is not in the least unusual. The United Nations also released an estimate that desertification is endangering the lives of up to a billion people, while announcing World Desertification Day. Its goal, according to the Nigerian newspaper THISDAY, is “to combat desertification and drought worldwide by promoting public awareness and the implementation of conventions dealing with desertification in member countries.” The effort to raise public awareness passed without mention in the national U.S. press. Such neglect is all too common.

It may be instructive to recall that when they landed in what today is Bangladesh, the British invaders were stunned by its wealth and splendor. It was soon on its way to becoming the very symbol of misery, and not by an act of God.

As the fate of Bangladesh illustrates, the terrible food crisis is not just a result of “lack of true concern” in the centers of wealth and power. In large part it results from very definite concerns of global managers: for their own welfare. It is always well to keep in mind Adam Smith’s astute observation about policy formation in England. He recognized that the “principal architects” of policy—in his day the “merchants and manufacturers”—made sure that their own interests had “been most peculiarly attended to” however “grievous” the effect on others, including the people of England and, far more so, those who were subjected to “the savage injustice of the Europeans,” particularly in conquered India, Smith’s own prime concern in the domains of European conquest.
Smith was referring specifically to the mercantilist system, but his observation generalizes, and as such, stands as one of the few solid and enduring principles of both international relations and domestic affairs. It should not, however, be over-generalized. There are interesting cases where state interests, including long-term strategic and economic interests, overwhelm the parochial concerns of the concentrations of economic power that largely shape state policy. Iran and Cuba are instructive cases, but I will have to put these topics aside here.

The food crisis erupted first and most dramatically in Haiti in early 2008. Like Bangladesh, Haiti today is a symbol of misery and despair. And, like Bangladesh, when European explorers arrived, the island was remarkably rich in resources, with a large and flourishing population. It later became the source of much of France’s wealth. I will not run through the sordid history, but the current food crisis can be traced directly to 1915, Woodrow Wilson’s invasion: murderous, brutal, and destructive. Among Wilson’s many crimes was dissolving the Haitian Parliament at gunpoint because it refused to pass “progressive legislation” that would have allowed U.S. businesses to take over Haitian lands. Wilson’s Marines then ran a free election, in which the legislation was passed by 99.9 percent of the 5 percent of the public permitted to vote. All of this comes down through history as “Wilsonian idealism.”

More via Chomsky: What America's 'Crisis' Means to the Rest of the World | | AlterNet.

Related articles by Zemanta

• Food crisis at emergency level in Guatemala (cnn.com)


• World Briefing | Africa: Kenya: U.N. Aid Group Notes Food Needs (nytimes.com)


• Rethinking Food Production For A World Of Eight Billion (treehugger.com)


• Starvation ravages East Africa (thestar.com)


• Lush Land Dries Up, Withering Kenya's Hopes (nytimes.com)


• US's 'arc of instability' just gets bigger (citizengkar.wordpress.com)

WTO Bleeding American Economy Dry

It would appear that Fat Cats run our country. The rich get richer while many in the middle class fall into a growing underclass without housing, health care or a future.

[caption id="" align="alignright" width="300" caption="Image via Wikipedia"][/caption]

The World Trade Organization is an undemocratic organization run by the rich, for the rich. The bylaws of the organization supersede our own Constitution . If America is to recover economically it must either renegotiate or completely withdraw from the WTO.

The Constitution states that all treaties made under the authority of the United States become supreme law of the land. The U.S. invited the WTO to rule over us when our government signed the treaty, and now we have no choice but to conform U.S. laws, regulation and administrative procedures to the agreement.

[..] Since entering the WTO in 2001, trade with China has resulted in the loss of 2.3 million jobs through 2007, according to the Economic Policy Institute. In 2006 alone, the trade gap with China resulted in the loss of 366,000 American jobs. Those fortunate enough to retain their jobs witnessed their annual earnings decrease by roughly $1,400. American workers are put in direct competition with one another as more and more employers look to offshore production to nations with lower wage rates.

Those jobs losses have affected each and every sector of the economy in both white and blue-collar workers. Over that time the U.S. has lost 561,000 jobs in computer and electronic products, 153,000 in apparel and accessories, 139,000 in administrative support services and 128,000 in professional, scientific and technical services.

In all, those displaced workers lost an average of $8,146 annually - a total of $19.4 billion - as they moved into lower paying jobs.

Those job losses can be directly attributed to China’s rapidly growing trade surplus with the U.S., maintained by the systematic manipulation of the Chinese yuan. By purposely undervaluing their currency, they subsidized exports - some estimates put this subsidy at nearly 30 percent. This practice has allowed America’s trade deficit with China to balloon since China entered into the WTO. In 2001, when China joined the WTO, they held a small trade surplus of $84 billion with the U.S. By 2007, that number has grown exponentially to $262 billion. On average, that deficit will increase by $30 billion each and every year.

With the U.S-China trade deficit exploding, more job losses are forecast in the future. The Progressive Policy Institute, a moderate Democratic think tank aligned with the pro-free trade wing of the party, claims that unless the trade deficit is brought under control, 12 million information-based jobs in the U.S. are highly susceptible in the future.

[..]“The direct impact on incomes, more than $8,000 per displaced worker per year on average, is catastrophic for the individual workers and the single most visible cost of globalization for American workers,” EPI economist Josh Bivens said. “But it’s also critical to recognize the indirect impact of trade on workers. Trade with less developed countries has reduced the bargaining power of all workers in the U.S. economy who resemble those displaced workers in education, credentials and skill.”But beyond the quantifiable numbers of economic hardship in the U.S., the WTO is inherently wrong for other reasons. The organization remains indifferent to issues of workers rights, child labor and environmental protection standards. The organization has little to no transparency as all of its hearing are closed to the public. It is no wonder then that the U.S. comes out a loser in nine of 10 trade disputes brought before the body. The corporate agenda of the organization has destroyed the developing economies of the world, exploiting cheap resources and giving them little in return. This has come to represent the most efficient form of colonization the world has ever seen - reaping all the benefits with no downsides of occupation.

via Economyincrisis.org - America's Economic Report - Daily.

Related articles by Zemanta

• 11 Places With a Worse Economy Than Ours (usnews.com)


• Off the Charts: Hints of a Rebound in Global Trade (nytimes.com)


• How to square the U.S.-China circle (tpmcafe.talkingpointsmemo.com)


• You Are Here: In the Pit of a Depression (firedoglake.com)


• Europe and U.S. Accuse China of Unfair Trade Practices (nytimes.com)


• World trade to shrink 10% this year, WTO warns (financialpost.com)


• East-west trade war looms (guardian.co.uk)


• Dave Johnson: Stimulus Package's Buy American Clause In The News (huffingtonpost.com)

Who's behind the attacks on a health care overhaul?

Those behind the fight against health care are profiteers. Do you want to pay more for health care just to keep money in these guys pockets?

Image by seiuhealthcare775nw via Flickr

Much of the money and strategy behind the so-called grassroots groups organizing opposition to the Democrats' health care plans comes from conservative political consultants, professional organizers and millionaires, some of whom hold financial stakes in the outcome.If President Barack Obama and Congress extend health insurance coverage to millions of uninsured Americans, raise taxes on the wealthy to pay for it, and limit insurers' discretion on who they cover and what they charge, that could pinch these opponents.Most of them say they oppose big government in principle. Despite Obama's assurances to the contrary, many of them insist that the Democrats' legislation is but the first step toward creation of a single-payer system, where the federal government hires the doctors, approves treatments, sets the rules and imperils profit.These opposition groups appear to have spent at least $10 million so far on ads attacking the Democrats' plans. Still, supporters of a health care overhaul have outspent opponents by more than 2-to-1 so far, according to Evan Tracey of the Campaign Media Analysis Group, which tracks ad spending. Supporters include drug makers angling for their own protections, unions, the American Medical Association and AARP, the seniors' lobby. Supporters announced this week that they intend to spend $150 million promoting an overhaul.

more at: Who's behind the attacks on a health care overhaul? | McClatchy.

Fascist America: Are We There Yet?

Image via Wikipedia

Few people want to believe the direction politics have moved in the US. Perhaps it's the basic good of people that prevents them from easily accepting that some that they know do not serve their interests, in fact seek to take away their civil liberties. The lesson of history is difficult to follow. But we must understand. Fritz Stern pointed out the drift of the Bush administration in 2004. Sara Robinson continues the warning here. She also prescribes what we can do here.

Fascist America: Are We There Yet? | OurFuture.org.

What is fascism?
The word has been bandied about by so many people so wrongly for so long that, as Paxton points out, "Everybody is somebody else's fascist." Given that, I always like to start these conversations by revisiting Paxton's essential definition of the term:

"Fascism is a system of political authority and social order intended to reinforce the unity, energy, and purity of communities in which liberal democracy stands accused of producing division and decline."

Elsewhere, he refines this further as

"a form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion."

.
Jonah Goldberg aside, that's a basic definition most legitimate scholars in the field can agree on, and the one I'll be referring to here.

From proto-fascism to the tipping point
According to Paxton, fascism unfolds in five stages. The first two are pretty solidly behind us -- and the third should be of particular interest to progressives right now.

In the first stage, a rural movement emerges to effect some kind of nationalist renewal (what Roger Griffin calls "palingenesis" -- a phoenix-like rebirth from the ashes). They come together to restore a broken social order, always drawing on themes of unity, order, and purity. Reason is rejected in favor of passionate emotion. The way the organizing story is told varies from country to country; but it's always rooted in the promise of restoring lost national pride by resurrecting the culture's traditional myths and values, and purging society of the toxic influence of the outsiders and intellectuals who are blamed for their current misery.

Fascism only grows in the disturbed soil of a mature democracy in crisis. Paxton suggests that the Ku Klux Klan, which formed in reaction to post-Civil War Reconstruction, may in fact be the first authentically fascist movement in modern times. Almost every major country in Europe sprouted a proto-fascist movement in the wretched years following WWI (when the Klan enjoyed a major resurgence here as well) -- but most of them stalled either at this first stage, or the next one.

As Rick Perlstein documented in his two books on Barry Goldwater and Richard Nixon, modern American conservatism was built on these same themes. From "Morning in America" to the Rapture-ready religious right to the white nationalism promoted by the GOP through various gradients of racist groups, it's easy to trace how American proto-fascism offered redemption from the upheavals of the 1960s by promising to restore the innocence of a traditional, white, Christian, male-dominated America. This vision has been so thoroughly embraced that the entire Republican party now openly defines itself along these lines. At this late stage, it's blatantly racist, sexist, repressed, exclusionary, and permanently addicted to the politics of fear and rage. Worse: it doesn't have a moment's shame about any of it. No apologies, to anyone. These same narrative threads have woven their way through every fascist movement in history.

In the second stage, fascist movements take root, turn into real political parties, and seize their seat at the table of power. Interestingly, in every case Paxton cites, the political base came from the rural, less-educated parts of the country; and almost all of them came to power very specifically by offering themselves as informal goon squads organized to intimidate farmworkers on behalf of the large landowners. The KKK disenfranchised black sharecroppers and set itself up as the enforcement wing of Jim Crow. The Italian Squadristi and the German Brownshirts made their bones breaking up farmers' strikes. And these days, GOP-sanctioned anti-immigrant groups make life hell for Hispanic agricultural workers in the US. As violence against random Hispanics (citizens and otherwise) increases, the right-wing goon squads are getting basic training that, if the pattern holds, they may eventually use to intimidate the rest of us.

Paxton wrote that succeeding at the second stage "depends on certain relatively precise conditions: the weakness of a liberal state, whose inadequacies condemn the nation to disorder, decline, or humiliation; and political deadlock because the Right, the heir to power but unable to continue to wield it alone, refuses to accept a growing Left as a legitimate governing partner." He further noted that Hitler and Mussolini both took power under these same circumstances: "deadlock of constitutional government (produced in part by the polarization that the fascists abetted); conservative leaders who felt threatened by the loss of their capacity to keep the population under control at a moment of massive popular mobilization; an advancing Left; and conservative leaders who refused to work with that Left and who felt unable to continue to govern against the Left without further reinforcement."

And more ominously: "The most important variables...are the conservative elites' willingness to work with the fascists (along with a reciprocal flexibility on the part of the fascist leaders) and the depth of the crisis that induces them to cooperate."

That description sounds eerily like the dire straits our Congressional Republicans find themselves in right now. Though the GOP has been humiliated, rejected, and reduced to rump status by a series of epic national catastrophes mostly of its own making, its leadership can't even imagine governing cooperatively with the newly mobilized and ascendant Democrats. Lacking legitimate routes back to power, their last hope is to invest the hardcore remainder of their base with an undeserved legitimacy, recruit them as shock troops, and overthrow American democracy by force. If they can't win elections or policy fights, they're more than willing to take it to the streets, and seize power by bullying Americans into silence and complicity.

When that unholy alliance is made, the third stage -- the transition to full-fledged government fascism -- begins.

The third stage: being there
All through the Bush years, progressive right-wing watchers refused to call it "fascism" because, though we kept looking, we never saw clear signs of a deliberate, committed institutional partnership forming between America's conservative elites and its emerging homegrown brownshirt horde. We caught tantalizing signs of brief flirtations -- passing political alliances, money passing hands, far-right moonbat talking points flying out of the mouths of "mainstream" conservative leaders. But it was all circumstantial, and fairly transitory. The two sides kept a discreet distance from each other, at least in public. What went on behind closed doors, we could only guess. They certainly didn't act like a married couple.

Now, the guessing game is over. We know beyond doubt that the Teabag movement was created out of whole cloth by astroturf groups like Dick Armey's FreedomWorks and Tim Phillips' Americans for Prosperity, with massive media help from FOX News. We see the Birther fracas -- the kind of urban myth-making that should have never made it out of the pages of the National Enquirer -- being openly ratified by Congressional Republicans. We've seen Armey's own professionally-produced field manual that carefully instructs conservative goon squads in the fine art of disrupting the democratic governing process -- and the film of public officials being terrorized and threatened to the point where some of them required armed escorts to leave the building. We've seen Republican House Minority Leader John Boehner applauding and promoting a video of the disruptions and looking forward to "a long, hot August for Democrats in Congress."

This is the sign we were waiting for -- the one that tells us that yes, kids: we are there now. America's conservative elites have openly thrown in with the country's legions of discontented far right thugs. They have explicitly deputized them and empowered them to act as their enforcement arm on America's streets, sanctioning the physical harassment and intimidation of workers, liberals, and public officials who won't do their political or economic bidding.

This is the catalyzing moment at which honest-to-Hitler fascism begins. It's also our very last chance to stop it.

The fail-safe point
According to Paxton, the forging of this third-stage alliance is the make-or-break moment -- and the worst part of it is that by the time you've arrived at that point, it's probably too late to stop it. From here, it escalates, as minor thuggery turns into beatings, killings, and systematic tagging of certain groups for elimination, all directed by people at the very top of the power structure. After Labor Day, when Democratic senators and representatives go back to Washington, the mobs now being created to harass them will remain to run the same tactics -- escalated and perfected with each new use -- against anyone in town whose color, religion, or politics they don't like. In some places, they're already making notes and taking names.

Where's the danger line? Paxton offers three quick questions that point us straight at it:

1. Are [neo- or protofascisms] becoming rooted as parties that represent major interests and feelings and wield major influence on the political scene?

2. Is the economic or constitutional system in a state of blockage apparently insoluble by existing authorities?

3. Is a rapid political mobilization threatening to escape the control of traditional elites, to the point where they would be tempted to look for tough helpers in order to stay in charge?

By my reckoning, we're three for three. That's too close. Way too close.

The Road Ahead
History tells us that once this alliance catalyzes and makes a successful bid for power, there's no way off this ride. As Dave Neiwert wrote in his recent book, The Eliminationists, "if we can only identify fascism in its mature form—the goose-stepping brownshirts, the full-fledged use of violence and intimidation tactics, the mass rallies—then it will be far too late to stop it." Paxton (who presciently warned that "An authentic popular fascism in the United States would be pious and anti-Black") agrees that if a corporate/brownshirt alliance gets a toehold -- as ours is now scrambling to do -- it can very quickly rise to power and destroy the last vestiges of democratic government. Once they start racking up wins, the country will be doomed to take the whole ugly trip through the last two stages, with no turnoffs or pit stops between now and the end.

What awaits us? In stage four, as the duo assumes full control of the country, power struggles emerge between the brownshirt-bred party faithful and the institutions of the conservative elites -- church, military, professions, and business. The character of the regime is determined by who gets the upper hand. If the party members (who gained power through street thuggery) win, an authoritarian police state may well follow. If the conservatives can get them back under control, a more traditional theocracy, corporatocracy, or military regime can re-emerge over time. But in neither case will the results resemble the democracy that this alliance overthrew.

Paxton characterizes stage five as "radicalization or entropy." Radicalization is likely if the new regime scores a big military victory, which consolidates its power and whets its appetite for expansion and large-scale social engineering. (See: Germany) In the absence of a radicalizing event, entropy may set in, as the state gets lost in its own purposes and degenerates into incoherence. (See: Italy)

It's so easy right now to look at the melee on the right and discount it as pure political theater of the most absurdly ridiculous kind. It's a freaking puppet show. These people can't be serious. Sure, they're angry -- but they're also a minority, out of power and reduced to throwing tantrums. Grown-ups need to worry about them about as much as you'd worry about a furious five-year-old threatening to hold her breath until she turned blue.

Unfortunately, all the noise and bluster actually obscures the danger. These people are as serious as a lynch mob, and have already taken the first steps toward becoming one. And they're going to walk taller and louder and prouder now that their bumbling efforts at civil disobedience are being committed with the full sanction and support of the country's most powerful people, who are cynically using them in a last-ditch effort to save their own places of profit and prestige.

We've arrived. We are now parked on the exact spot where our best experts tell us full-blown fascism is born. Every day that the conservatives in Congress, the right-wing talking heads, and their noisy minions are allowed to hold up our ability to govern the country is another day we're slowly creeping across the final line beyond which, history tells us, no country has ever been able to return.

How do we pull back? That's my next post.

Related articles by Zemanta

• Clyburn: Town Hall Protests Like Horrid Anti-Civil Rights Demonstrations (huffingtonpost.com)


• Leahy To GOP: "Stop The Racial Politics" On Sotomayor (huffingtonpost.com)


• The Real Republicans: The Case for Moderates, Liberal, and Pragmatic Conservatives in Our Party part 5 (themoderatevoice.com)


• Right-wing claim that "La Raza = the Klan" insults not just Latinos, but the Klan's many victims (crooksandliars.com)


• Paul Krugman On 'Republican Death Trip': This Opposition Cannot Be Appeased (huffingtonpost.com)


• THE GOP base vs the NRSC, redux (washingtonmonthly.com)


• Fascist America II: The Last Turnoff (seminal.firedoglake.com)

Talking Points for Healthcare Reform

Image via Wikipedia

1. When you need life-saving care, private insurance companies only profit by denying you and letting you die. If you have payed your premiums on time all your life, you're as likely to be dropped by your private insurance company when you need life-saving care as you are to get treated. A public option gives you a lifeline.

2. Private insurance companies are spending over $1M a day to kill the public option by inventing phony citizen groups, and trying to scare the elderly about euthanasia and pro-lifers with abortion; they know the only way to kill reform is to get people of good conscience fighting, while they laugh all the way to the bank. They don't think very highly of our intelligence.

3. We pay more than any other country to be 24th in life expectancy: while the average Canadian family spends less than $2000 a year on health care with no waiting periods, the average American family spends $29,000 a year, waiting for private insurance companies to approve every procedure.

4. 14,000 Americans lose their health insurance every day; 46M are uninsured.

5. 18,000 Americans DIE each year due to lack of health care: THAT'S 50 A DAY.

6. Two-thirds of American personal bankruptcies are related to health care costs.

7. Businesses - particularly small businesses - cannot afford to provide health insurance for their employees under the current employer based private insurance system, and will be forced to either drop their coverage or go out of business unless a public option is passed.

8. One-sixth of all our government spending is on health care, twice as much as any other country spends out of its budget. Our nation pays $2.5 trillion for care costing $912 billion .

9. Every independent estimate says the public option will save us money, from saving 150 billion dollars (CBO) to saving 265 billion dollars (Commonwealth). The Congressional Budget Office estimates the current bill in the House would leave a 6 billion dollar surplus.

10. So - if you'd rather spend more taxpayer money, bankrupt businesses, AND pay $29,000 a year for your family's private insurance coverage in exchange for a policy that can be dumped the second you actually need it, then the current system is great for you. If you'd rather spend less, wait less, have less of a chance of dying, and want to remove the corporate bureaucrat from between you and your doctor, then a public option is the way to go. Right now, even if you're lucky enough not to be dropped by your provider when you need urgent medical care, your private insurance company can overrule your doctor's advice for life-saving treatment and only offer to cover something cheaper; a public option would remove that middleman and leave these decisions where they belong, between the patient and doctor.

via Daily Kos: State of the Nation.

How can the richest people in the world allow millions to be homeless and without health care. Fifty American's die every day!

Related articles by Zemanta

• UnitedHealthcare of Ohio Inc. reported a second quarter profit of $859 million (dummidumbwit.wordpress.com)


• Obama discusses "health insurance reform" and small business (dailykos.com)


• Obama dispels "outlandish rumors" about health care reform (dailykos.com)


• Do Blue Dogs and Republicans Really Want to Be Remembered As People Who Sentenced 18,000 Americans Each Year to Die? (iflizwerequeen.com)


• Just Throw Grandma From the Train (crooksandliars.com)

Pope wants ethical financial order

Image via Wikipedia

The Press Association

Pope Benedict XVI has called for a new world financial order guided by ethics and the search for the common good.
He condemned the profit-at-all-cost mentality and blamed it for bringing about the global financial meltdown.
In the third encyclical of his pontificate, Benedict also pressed for reform of the UN and international economic and financial institutions to give poorer countries more of a say in international policy.
"There is urgent need (for) a true world political authority" that can manage the global economy, guarantee the environment is protected, ensure world peace and bring about food security for the poor, he wrote.
The document, Charity in Truth, was in the works for two years, and its publication was repeatedly delayed to incorporate the fallout from the crisis.
It was released on Tuesday - the day before leaders of the G8 industrialised nations meet to co-ordinate efforts to deal with the global meltdown, signalling a clear Vatican bid to prod leaders for a financially responsible future and what it considers a more socially just society.
"The economy needs ethics in order to function correctly - not any ethics, but an ethics which is people centred," Benedict wrote.
German-born Benedict, 82, has spoken out frequently about the impact of the crisis on the poor, particularly in Africa, which he visited earlier this year.
But the 144-page encyclical, one of the most authoritative documents a pope can issue, marked a new level of church teaching by linking the Vatican's long-standing social doctrine on caring for the poor with current events.
While acknowledging that the globalised economy had "lifted billions of people out of misery", Benedict blamed the unbridled growth of recent years for causing unprecedented problems as well, citing mass migration flows, environmental degradation and a complete loss of trust in the world market.
Copyright © 2009 The Press Association. All rights reserved.

Related articles by Zemanta

• Pope proposes new financial order guided by ethics (ctv.ca)
• In Encyclical, Pope Proposes New Financial Order (nytimes.com)
• Pope urges new financial order guided by ethics (msnbc.msn.com)
• Pope Urges New World Economic Order (nytimes.com)
• Pope urges ethical side to global capitalism (guardian.co.uk)
• Greed behind crisis, warns Pope (news.bbc.co.uk)

Image via Wikipedia

The Press Association

Pope Benedict XVI has called for a new world financial order guided by ethics and the search for the common good.
He condemned the profit-at-all-cost mentality and blamed it for bringing about the global financial meltdown.
In the third encyclical of his pontificate, Benedict also pressed for reform of the UN and international economic and financial institutions to give poorer countries more of a say in international policy.
"There is urgent need (for) a true world political authority" that can manage the global economy, guarantee the environment is protected, ensure world peace and bring about food security for the poor, he wrote.
The document, Charity in Truth, was in the works for two years, and its publication was repeatedly delayed to incorporate the fallout from the crisis.
It was released on Tuesday - the day before leaders of the G8 industrialised nations meet to co-ordinate efforts to deal with the global meltdown, signalling a clear Vatican bid to prod leaders for a financially responsible future and what it considers a more socially just society.
"The economy needs ethics in order to function correctly - not any ethics, but an ethics which is people centred," Benedict wrote.
German-born Benedict, 82, has spoken out frequently about the impact of the crisis on the poor, particularly in Africa, which he visited earlier this year.
But the 144-page encyclical, one of the most authoritative documents a pope can issue, marked a new level of church teaching by linking the Vatican's long-standing social doctrine on caring for the poor with current events.
While acknowledging that the globalised economy had "lifted billions of people out of misery", Benedict blamed the unbridled growth of recent years for causing unprecedented problems as well, citing mass migration flows, environmental degradation and a complete loss of trust in the world market.
Copyright © 2009 The Press Association. All rights reserved.

Related articles by Zemanta

• Pope proposes new financial order guided by ethics (ctv.ca)
• In Encyclical, Pope Proposes New Financial Order (nytimes.com)
• Pope urges new financial order guided by ethics (msnbc.msn.com)
• Pope Urges New World Economic Order (nytimes.com)
• Pope urges ethical side to global capitalism (guardian.co.uk)
• Greed behind crisis, warns Pope (news.bbc.co.uk)

Why The Healthcare Industry Doesn't Want Electronic Medical Records

Techdirt

...from the it-would-reveal-the-business-model dept


I've been really confused by the whole push for "electronic healthcare records" as some sort of big step for improving our healthcare system. It's such a minor part of what's needed that it seems to be looking at curing a cough when someone has terminal cancer. The cough isn't the issue. Also, it's never been quite clear why hospitals didn't move to electronic healthcare records in the first place. Lots of other businesses with tons of paper records long ago realized that moving to electronic records and making things more efficient wasn't just a fantastic way to make money, but a way to expand their own market. The switch from paper stock certificates to electronic ones didn't just save printing costs -- it enabled the stock market to change in a massive way (perhaps too much, many will note).
Andy Kessler, who's been thinking an awful lot about these issues (and whose book The End of Medicine hasn't received nearly the attention it deserves) has an interesting article discussing why the industry has resisted the move to e-healthcare records. While it would save some money, he notes, it would also expose the entire scam of the healthcare system: which is that they make a ton of money from inefficiencies baked into the system, which are totally hidden from view. It's a massive boondoggle for the industry, and e-healthcare records would actually make it easier for people to understand that the healthcare system profits from people being sick and not from having them be well.
The incentives are totally screwed up for everyone.
Healthcare providers make more money the sicker you are. Pharmaceutical companies make easy money with gov't monopolies limiting the ability to spread useful drugs. The actual costs are nearly totally hidden from most consumers, so they don't make smart choices at all. There's a lot of built in artificial scarcities in the system, and opening up the flow of information changes that.
Of course, in the grand scheme of things, this is dumb. Focusing on preventative care and actually keeping people healthy would actually provide a massive economic benefit not just to the healthcare industry, but to the economy as a whole. More healthy people contributing to production, output and consumption can do quite a lot for the economy. The numbers on some studies are staggering (we're talking trillions of dollars). If the incentives could be aligned such that people paid for staying healthy, rather than having illness treated, then there's a ton of money to be made without resorting to the old inefficient mess that is today's healthcare system.
But rather than tackle any of that, we get attempts to fix the cough in the terminally ill patient -- and the patient likes the morphine drip so much that he'll do anything to avoid getting healthy. It's time to fix the healthcare system. And while I don't necessarily believe that a small step like electronic medical records is all that meaningful, if Kessler is right and it actually drives some awareness to the underlying mess, perhaps it's at least a good start.

Related articles by Zemanta

• echoblog: Andy Kessler speaks the blunt truth on healthcare reform - sickness is too profitable (genes2brains2mentalhealth.wordpress.com)
• Malaysiakini letter: The day a public hospital took my mother away (medicine.com.my)
• Doctors told to be honest about death (thestar.com)
• Drug Companies, White House Reach $80B Prescription Drug Deal (huffingtonpost.com)
• Electronic Health Records: Patient, Heal Thyself? (abcnews.go.com)

The Fallacy of Laissez-faire Capitalism

Image via Wikipedia

I think the whole concept of Laissez-faire Capitalism is based on at least one false premise. Alan Greenspan in October 2008 pretty much described the problem to the House Oversight Committee:

Those of us who have looked to the self-interest of lending institutions to protect shareholders' equity are in a state of shocked disbelief.

People will indeed act in self-interest. The assumption was the a well run company
would function in it's self-interest. However, the system was hijacked by a worship of CEOs. Filling their pockets with unimaginable funds gave them an illusion of being all knowing, and ultimately believing that their own self-interest was best. They surrounded themselves with Board members they controlled. The "dictatorship" of the shareholders suffered a coup at the hands of the CEOs.

This fallacy of mutual self-interest extends to the original corporate design. The interest of the collective share-holders was not the same as the the interests of the company, and certainly not the community.

The values of capitalism need a rework. Self-interest can not be the driver of the market. The value of stewardship of the community's interest needs to be incorporated at a fundamental, ie regulation, level. 

As we see in the mortgage scandal, the consumer can't possibly understand the market well enough to protect his own interests. Only the government can be in "loco parentis".

Related articles by Zemanta

• Buyer Beware: Mortgage horrors (crooksandliars.com)
• ayn rand refuses to die (3quarksdaily.com)
• Three Rules for These Times (blogs.harvardbusiness.org)
• Rebuilding Trust in Business (blogs.harvardbusiness.org)
• Alan Greenspan: The Oracle Or The Master Of Disaster? (huffingtonpost.com)

Stressing the Positive for Banks; The Rest of Us Should Be Very Afraid

Image via Wikipedia

NYTimes.com
By PAUL KRUGMAN

Hooray! The banking crisis is over! Let's party! O.K., maybe not.
In the end, the actual release of the much-hyped bank stress tests on Thursday came as an anticlimax. Everyone knew more or less what the results would say: some big players need to raise more capital, but over all, the kids, I mean the banks, are all right. Even before the results were announced, Tim Geithner, the Treasury secretary, told us they would be "reassuring."
But whether you actually should feel reassured depends on who you are: a banker, or someone trying to make a living in another profession.
I won't weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn't have the resources to make a really careful assessment of the banks' assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn't.
But focusing on the process can distract from the larger picture. What we're really seeing here is a decision on the part of President Obama and his officials to muddle through the financial crisis, hoping that the banks can earn their way back to health.
It's a strategy that might work. After all, right now the banks are lending at high interest rates, while paying virtually no interest on their (government-insured) deposits. Given enough time, the banks could be flush again.
But it's important to see the strategy for what it is and to understand the risks.
Remember, it was the markets, not the government, that in effect declared the banks undercapitalized. And while market indicators of distrust in banks, like the interest rates on bank bonds and the prices of bank credit-default swaps, have fallen somewhat in recent weeks, they're still at levels that would have been considered inconceivable before the crisis.
As a result, the odds are that the financial system won't function normally until the crucial players get much stronger financially than they are now. Yet the Obama administration has decided not to do anything dramatic to recapitalize the banks.
Can the economy recover even with weak banks? Maybe. Banks won't be expanding credit any time soon, but government-backed lenders have stepped in to fill the gap. The Federal Reserve has expanded its credit by $1.2 trillion over the past year; Fannie Mae and Freddie Mac have become the principal sources of mortgage finance. So maybe we can let the economy fix the banks instead of the other way around.
But there are many things that could go wrong.
It's not at all clear that credit from the Fed, Fannie and Freddie can fully substitute for a healthy banking system. If it can't, the muddle-through strategy will turn out to be a recipe for a prolonged, Japanese-style era of high unemployment and weak growth.
Actually, a multiyear period of economic weakness looks likely in any case. The economy may no longer be plunging, but it's very hard to see where a real recovery will come from. And if the economy does stay depressed for a long time, banks will be in much bigger trouble than the stress tests -- which looked only two years ahead -- are able to capture.
Finally, given the possibility of bigger losses in the future, the government's evident unwillingness either to own banks or let them fail creates a heads-they-win-tails-we-lose situation. If all goes well, the bankers will win big. If the current strategy fails, taxpayers will be forced to pay for another bailout.
But what worries me most about the way policy is going isn't any of these things. It's my sense that the prospects for fundamental financial reform are fading.
Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a "Wall Street éminence grise"? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary.
Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won't be very different from its recent past, declaring, "I am far from convinced there was something inherently wrong with the system." Hey, that little thing about causing the worst global slump since the Great Depression? Never mind.
Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they're committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they'll soon be able to go back to playing the same games as before.
So as I said, while bankers may find the results of the stress tests "reassuring," the rest of us should be very, very afraid.
Copyright 2009 The New York Times Company

Related articles by Zemanta

• Back to Business: As Investors Circle Ailing Banks, Fed Sets Limits (nytimes.com)
• Secondary Sources: Stress Tests, Capitalism, Vacuous Aid (blogs.wsj.com)