The Seven Biggest Economic Lies

October 11, 2011 By Robert Reich 

The President’s Jobs Bill doesn’t have a chance in Congress — and the Occupiers on Wall Street and elsewhere can’t become a national movement for a more equitable society – unless more Americans know the truth about the economy.
Here’s a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards.
The major points:

• Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.

• Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)

• Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

• Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.

• Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.

• Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

• It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.

Demagogues through history have known that big lies, repeated often enough,  start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.

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Paul Krugman / Starve the beast: Fiscal calamity is the GOP's plan to shrink government

Starving the beasts is the Republican conspiracy to bankrupt the US government to force downsizing government as well as shrinking the middle class in the interest of lower wages until the US can compete against China and India in manufacturing. Paul claims he said it first, but no, I've been talking about it since 2004. Ronald Reagan sold it to the country during the John Anderson debate. A staffer is credited with coining the term. Grover Norquist convinced Double Think Dubya to implement the strategy big time (Wikipedia)

OK, the beast is starving. Now what? That's the question confronting Republicans. But they're refusing to answer, or even to engage in any serious discussion about what to do.
For readers who don't know what I'm talking about: Ever since Ronald Reagan, the GOP has been run by people who want a much smaller government. In the famous words of the activist Grover Norquist, conservatives want to get the government "down to the size where we can drown it in the bathtub."
But there has always been a political problem with this agenda. Voters may say that they oppose big government, but the programs that actually dominate federal spending -- Medicare, Medicaid and Social Security -- are very popular. So how can the public be persuaded to accept large spending cuts?
The conservative answer, which evolved in the late 1970s, would be dubbed "starving the beast" during the Reagan years. The idea -- propounded by many members of the conservative intelligentsia, from Alan Greenspan to Irving Kristol -- was basically that sympathetic politicians should engage in a game of bait-and-switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government's fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit.
And the deficit came. True, more than half of this year's budget deficit is the result of the Great Recession, which has both depressed revenues and required a temporary surge in spending to contain the damage. But even when the crisis is over, the budget will remain deeply in the red, largely as a result of George W. Bush-era tax cuts and unfunded wars. In addition, the combination of an aging population and rising medical costs will, unless something is done, lead to explosive debt growth after 2020.
So the beast is starving, as planned. It should be time, then, for conservatives to explain which parts of the beast they want to cut. And President Barack Obama has, in effect, invited them to do just that, by calling for a bipartisan deficit commission.
Many progressives were deeply worried by this proposal, fearing that it would turn into a kind of Trojan horse -- in particular, that the commission would end up reviving the long-standing Republican goal of gutting Social Security. But they needn't have worried: Senate Republicans overwhelmingly voted against legislation that would have created a commission with actual power, and it is unlikely that anything meaningful will come from the much weaker commission Mr. Obama established by executive order.
Why are Republicans reluctant to sit down and talk? Because they would then be forced to put up or shut up. Since they're adamantly opposed to reducing the deficit with tax increases, they would have to explain what spending they want to cut. And guess what? After three decades of preparing the ground for this moment, they're still not willing to do that.
In fact, conservatives have backed away from spending cuts they themselves proposed in the past. In the 1990s, for example, Republicans in Congress tried to force through sharp cuts in Medicare. But now they have made opposition to any effort to spend Medicare funds more wisely the core of their campaign against health care reform (death panels!). And presidential hopefuls say things like this, from Gov. Tim Pawlenty of Minnesota: "I don't think anybody's gonna go back now and say, 'Let's abolish, or reduce, Medicare and Medicaid.' "
What about Social Security? Five years ago the Bush administration proposed limiting future payments to upper- and middle-income workers, in effect means-testing retirement benefits. But in December, The Wall Street Journal's editorial page denounced any such means-testing, because "middle- and upper-middle-class (i.e., GOP) voters would get less than they were promised in return for a lifetime of payroll taxes." (Hmm. Since when do conservatives openly admit that the GOP is the party of the affluent?)
At this point, then, Republicans insist that the deficit must be eliminated but they're not willing either to raise taxes or to support cuts in any major government programs. And they're not willing to participate in serious bipartisan discussions, either, because that might force them to explain their plan -- and there isn't any plan, except to regain power.
But there is a kind of logic to the current Republican position: In effect, the party is doubling down on starve-the-beast. Depriving the government of revenue, it turns out, wasn't enough to push politicians into dismantling the welfare state. So now the de facto strategy is to oppose any responsible action until we are in the midst of a fiscal catastrophe. You read it here first.

Read more: http://www.post-gazette.com/pg/10054/1037783-109.stm#ixzz1QoCX6bub

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Hellegers: American Income Inequality is the Cause of our Crisis

The Tea Party movement is just a clever disguise for an oilman to control America. Inequality has always be a moral issue, now it is clearly an economic issue. The rich have seized control of policy making in the US and they may again seize control of government in the next election. As usual, Juan Cole has it right.

Informed Comment

Plutarch, writing almost 2,000 years ago, told us that “an imbalance between rich and poor is the oldest and most fatal ailment of all republics.”
Below is a chart that shows the course of income imbalance over the last 93 years in the U.S. If it showed the course of net worth imbalance, it would be much more dramatic. If it showed data for the top tenth of one percent– not just the top ten percent– it would be extraordinarily dramatic.
Inter alia, the chart shows that both the Great Depression of the ’30s and the present crisis were immediately preceded by great buildups in inequality. When ordinary people lack the wealth to buy things– houses for example–the system crashes.
There’s also a lot of data that show that economic equality conduces, quite literally, to the health of society. The correlation between equality and most measures of well-being is stronger than the correlation between wealth and well-being. See Richard G. Wilkinson & Kate Pickett, The Spirit Level (2009). For a good review of that book, see David Runciman in the London Review of Books, Oct. 22, 2009, .
Still, the rich consistently try to destroy egalitarianism, because for their segment, inequality is fine. It means increasingly desperate people trying increasingly hard to serve the rich. The rich also try to destroy the political means by which the rest of society might seek relief, which is exactly Plutarch’s point. Witness the rise of the present-day Tea Parties. A recent article in the New Yorker describes how the Koch brothers– Texas billionaires– have lavishly financed that movement.
In 1980 Ronald Reagan managed to break the egalitarian consensus that had held since FDR. (See the chart.) The key was playing on racial divisions. Reagan’s first campaign speech was in Philadelphia, Misssissippi. That town is famous for one thing only. It’s where three civil rights workers were lynched and murdered in the 1960s. Reagan’s target audience didn’t miss his message. Social justice was cast in terms of giveaways to demonized blacks– mythologized welfare queens in Cadillacs. Reagan’s ascendancy, by his exploitation of the race issue, is described by Thomas B. & Mary D. Edsall in Chain Reaction (1992). Thomas Edsall, until his retirement, was a reporter for the Washington Post.
The U.S. is now more unequal than a number of countries in Latin America. When I was younger it was accepted wisdom that those countries would never get anywhere until they solved the inequality problem.

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The New Jim Crow

The truth about racism in America is hidden in poverty, drug laws, and behind bars. Yes, Jim Crow is alive and well in America.

The Nation

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Ever since Barack Obama lifted his right hand and took his oath of office, pledging to serve the United States as its forty-fourth president, ordinary people and their leaders around the globe have been celebrating our nation's "triumph over race." Obama's election has been touted as the final nail in the coffin of Jim Crow, the bookend placed on the history of racial caste in America.

Obama's mere presence in the Oval Office is offered as proof that "the land of the free" has finally made good on its promise of equality. There's an implicit yet undeniable message embedded in his appearance on the world stage: this is what freedom looks like; this is what democracy can do for you. If you are poor, marginalized, or relegated to an inferior caste, there is hope for you. Trust us. Trust our rules, laws, customs, and wars. You, too, can get to the promised land.

Perhaps greater lies have been told in the past century, but they can be counted on one hand. Racial caste is alive and well in America.

Most people don't like it when I say this. It makes them angry. In the 'era of colorblindness' there's a nearly fanatical desire to cling to the myth that we as a nation have 'moved beyond' race. Here are a few facts that run counter to that triumphant racial narrative:

• There are more African-Americans under correctional control today--in prison or jail, on probation or parole--than were enslaved in 1850, a decade before the Civil War began.

• As of 2004, more African-American men were disenfranchised (due to felon disenfranchisement laws) than in 1870, the year the Fifteenth Amendment was ratified, prohibiting laws that explicitly deny the right to vote on the basis of race.

• A black child born today is less likely to be raised by both parents than a black child born during slavery. The recent disintegration of the African-American family is due in large part to the mass imprisonment of black fathers.

• If you take into account prisoners, a large majority of African-American men in some urban areas have been labeled felons for life. (In the Chicago area, the figure is nearly 80 percent.) These men are part of a growing undercaste--not class, caste--permanently relegated, by law, to a second-class status. They can be denied the right to vote, automatically excluded from juries, and legally discriminated against in employment, housing, access to education, and public benefits, much as their grandparents and great-grandparents were during the Jim Crow era."

There is, of course, a colorblind explanation for all this: crime rates. Our prison population has exploded from about 300,000 to more than 2 million in a few short decades, it is said, because of rampant crime. We're told that the reason so many black and brown men find themselves behind bars and ushered into a permanent, second-class status is because they happen to be the bad guys.

The uncomfortable truth, however, is that crime rates do not explain the sudden and dramatic mass incarceration of African-Americans during the past thirty years. Crime rates have fluctuated over the last few decades--they are currently at historical lows--but imprisonment rates have consistently soared. Quintupled, in fact. And the vast majority of that increase is due to the War on Drugs. Drug offenses alone account for about two-thirds of the increase in the federal inmate population, and more than half of the increase in the state prison population.

The drug war has been brutal--complete with SWAT teams, tanks, bazookas, grenade launchers and sweeps of entire neighborhoods--but those who live in white communities have little clue to the devastation wrought. This war has been waged almost exclusively in poor communities of color, even though studies consistently show that people of all colors use and sell illegal drugs at remarkably similar rates. In fact, some studies indicate that white youth are significantly more likely to engage in illegal drug dealing than black youth. Any notion that drug use among African-Americans is more severe or dangerous is belied by the data. White youth, for example, have about three times the number of drug-related visits to the emergency room as their African-American counterparts.

That is not what you would guess, though, when entering our nation's prisons and jails, overflowing as they are with black and brown drug offenders. In some states, African-Americans comprise 80 percent-90 percent of all drug offenders sent to prison.

This is the point at which I am typically interrupted and reminded that black men have higher rates of violent crime. That's why the drug war is waged in poor communities of color and not middle-class suburbs. Drug warriors are trying to get rid of those drug kingpins and violent offenders who make ghetto communities a living hell. It has nothing to do with race; it's all about violent crime.

Again, not so. President Ronald Reagan officially declared the current drug war in 1982, when drug crime was declining, not rising. From the outset, the war had little to do with drug crime and nearly everything to do with racial politics. The drug war was part of a grand and highly successful Republican Party strategy of using racially coded political appeals on issues of crime and welfare to attract poor and working class white voters who were resentful of, and threatened by, desegregation, busing, and affirmative action. In the words of H.R. Haldeman, President Richard Nixon's White House chief of staff: "[T]he whole problem is really the blacks. The key is to devise a system that recognizes this while not appearing to."

A few years after the drug war was announced, crack cocaine hit the streets of inner-city communities. The Reagan administration seized on this development with glee, hiring staff who were to be responsible for publicizing inner-city crack babies, crack mothers, crack whores and drug-related violence. The goal was to make inner-city crack abuse and violence a media sensation, bolstering public support for the drug war which, it was hoped, would lead Congress to devote millions of dollars in additional funding to it.

The plan worked like a charm. For more than a decade, black drug dealers and users would be regulars in newspaper stories and would saturate the evening TV news. Congress and state legislatures nationwide would devote billions of dollars to the drug war and pass harsh mandatory minimum sentences for drug crimes--sentences longer than murderers receive in many countries.

Democrats began competing with Republicans to prove that they could be even tougher on the dark-skinned pariahs. In President Bill Clinton's boastful words, "I can be nicked a lot, but no one can say I'm soft on crime." The facts bear him out. Clinton's "tough on crime" policies resulted in the largest increase in federal and state prison inmates of any president in American history. But Clinton was not satisfied with exploding prison populations. He and the "New Democrats" championed legislation banning drug felons from public housing (no matter how minor the offense) and denying them basic public benefits, including food stamps, for life. Discrimination in virtually every aspect of political, economic and social life is now perfectly legal, if you've been labeled a felon.

Facing Facts

But what about all those violent criminals and drug kingpins? Isn't the drug war waged in ghetto communities because that's where the violent offenders can be found? The answer is yes... in made-for-TV movies. In real life, the answer is no.

The drug war has never been focused on rooting out drug kingpins or violent offenders. Federal funding flows to those agencies that increase dramatically the volume of drug arrests, not the agencies most successful in bringing down the bosses. What gets rewarded in this war is sheer numbers of drug arrests. To make matters worse, federal drug forfeiture laws allow state and local law enforcement agencies to keep for their own use 80 percent of the cash, cars and homes seized from drug suspects, thus granting law enforcement a direct monetary interest in the profitability of the drug market.

The results have been predictable: people of color rounded up en masse for relatively minor, nonviolent drug offenses. In 2005, four out of five drug arrests were for possession, only one out of five for sales. Most people in state prison have no history of violence or even of significant selling activity. In fact, during the 1990s--the period of the most dramatic expansion of the drug war--nearly 80 percent of the increase in drug arrests was for marijuana possession, a drug generally considered less harmful than alcohol or tobacco and at least as prevalent in middle-class white communities as in the inner city.

In this way, a new racial undercaste has been created in an astonishingly short period of time--a new Jim Crow system. Millions of people of color are now saddled with criminal records and legally denied the very rights that their parents and grandparents fought for and, in some cases, died for.

Affirmative action, though, has put a happy face on this racial reality. Seeing black people graduate from Harvard and Yale and become CEOs or corporate lawyers--not to mention president of the United States--causes us all to marvel at what a long way we've come.

Recent data shows, though, that much of black progress is a myth. In many respects, African-Americans are doing no better than they were when Martin Luther King Jr. was assassinated and uprisings swept inner cities across America. Nearly a quarter of African-Americans live below the poverty line today, approximately the same percentage as in 1968. The black child poverty rate is actually higher now than it was then. Unemployment rates in black communities rival those in Third World countries. And that's with affirmative action!

When we pull back the curtain and take a look at what our "colorblind" society creates without affirmative action, we see a familiar social, political, and economic structure--the structure of racial caste. The entrance into this new caste system can be found at the prison gate.

This is not Martin Luther King Jr.'s dream. This is not the promised land. The cyclical rebirth of caste in America is a recurring racial nightmare.

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Informed Comment: Oregon's rich getting richer and all others falling behind, wage study shows | But it's a National Trend and We are Becoming Florence

Informed Comment:

"Oregon's rich getting richer and all others falling behind, wage study shows | Oregon Business News - OregonLive.com

Image by Getty Images via Daylife

' The free-market fervor that has gripped the country since the Ronald Reagan administration has allowed the country, for the most part, to remain competitive in a globalized economy. But some contend that the trickle-down economy has sent just that -- a trickle -- to the masses, while steering a torrent of riches to the wealthy."


"There's something going on at the very top, an explosion of the 'uber-rich,'" said Bryce Ward, a senior economist with Portland-based consulting firm ECONorthwest. "There's been no growth in a decade for the middle." '

Not just Oregon-- its the whole country. And if you project it out at current tax rates and loopholes, it looks like a permanent oligarchy.

US becoming late medieval Florence, with new Medicis:

'During a reign of 30 years, Cosimo [Medici] uses his fortune to maintain absolute control over the internal affairs of Florence. Opponents find themselves squeezed to financial extinction.

Within the city this control is discreet. Outside, in relations with other powers, it is generally acknowledged that Cosimo is the ruler of Florence - by now a city state of considerable significance.

The expansion of Florentine control over the surrounding region accelerates before and during Cosimo's lifetime. Arezzo falls to a Florentine army in 1384. Pisa, a great prize, is taken in 1406. Livorno, of immense value as a seaport, is purchased in 1421.'

Substitute Goldman, Sachs and Morgan Stanley for Cosimo, Iraq and Afghanistan for Arezzo and Pisa.

Note that in 1527 republicans in Florence made a last attempt to eject the Medicis. Instead they get saddled with a Duke for succeeding centuries. We are in danger of becoming a grand duchy.

The unbridled wealth of a few financiers is as fatal to a republic as the unrivaled power of a few generals.

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Bill Moyer: Why Does Haiti Have to Suffer So?

Bill Moyers Journal | PBS

 The journalist Mark Danner has done just that. He's also lived some of Haiti's history, almost losing his life a few years ago while covering unrest there. Writing in the New York Times this week, Danner said "There is nothing mystical in Haiti's suffering, no inescapable curse that haunts the land." It was brought on, he said, by human beings, not demons.

Start with the French. They ran Haiti as a slave colony, driving hundreds of thousands of slaves to early deaths in order to supply white Europeans with coffee, sugar and tobacco. In 1804, the slaves rebelled and after savage fighting defeated three foreign armies to win their independence. They looked to America for support, but America's slave-holding states feared a slave revolt of their own, and America's slave-holding president, Thomas Jefferson, the author of our Declaration of Independence, refused to recognize the new government.

Their former white masters made matters worse by demanding reparations, and by exploiting and exhausting the country's natural resources. Fighting over what little was left, Haitians turned on each other.

Coup followed coup, faction fought faction, and in 1915, our American president Woodrow Wilson sent in the Marines. By the time they left almost 20 years later, American companies had secured favored status in Haiti. In 1957, the country was taken over by the brutal and despotic rule of Papa Doc Duvalier, whose son, Baby Doc, proved just as cruel as his old man. Don't let the familial nicknames fool you. The Duvaliers were murderous thugs and thieves who enjoyed the complicity of American interests until the dynasty played out in 1986.

Five years later in 1991, when the popular former priest Jean-Bertrand Aristide won the presidency as a champion of the poor, he spooked Washington. Said one U.S. senator, Aristide "wasn't going to be beholden to the United States, and so he was going to be trouble. We had interests and ties with some of the very strong financial interests in the country and he was threatening them."

The Bush/Cheney administration, in cahoots with Haiti's privileged, helped destabilize his government.

Every president from Ronald Reagan forward has embraced the corporate search for cheap labor.

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The Plan for White Slavery?

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Racism has a hidden face within all of us. Anyone who is different beyond our imaginings is suspect. By placing people in the "other" category, we distance ourselves and make them the enemy. To the Right Wing Nuts, Obama has become the thief.

The Plan for White Slavery | The LA Progressive.

In his bestseller, Blink, Malcolm Gladwell noted that people make powerful associations with appearances and make “snap decisions” based on “thin slices” of experience. One of the many studies he cited required the subjects to assign positive or negative words to images of white or black people. To their surprise, the subjects, including himself, associated positive words with pictures of white people and negative words with photos of black people.

Thus after a history of repeated othering of African Americans in the US, it is not unusual for the picture of the black thief climbing through the windows of our homes to evolve into the imaginings of a black man in the White House stealing our healthcare and hard fought freedoms. As educator and writer Tim Wise, shrewdly observed “the longstanding association in white minds between social program spending and racial redistribution has been long established, by scholars such as Martin Gilens, Kenneth Neubeck, Noel Cazenave, and Jill Quadagno, among others.” What is reparations in the mind of the Right?—another form of stealing. Tim further notes, bestselling writer and conservative commentator Glen Beck, as well as shock talk-show hosts Sean Hannity and Rush Limbaugh, have linked health care reform and every piece of Obama’s legislative program with reparations. “His (Obama’s) goal is to create a new America. A new model. A model to settle old racial scores..,” decries Glen Beck.

Leaders from the healthcare corporate industry and the Right have been tapping into this programming. Observing the town hall rage and media coverage, historian and journalist Rick Perlstein reminds us that throughout history “the crazy tree blooms in every moment of liberal ascendancy, and where elites exploit the crazy for their own narrow interests.” Rick goes on to cite various examples such as Vice President Nixon claiming he found hidden in the White House “a blueprint for socializing America” or the various absurdities from the Right that the 1964 Civil Rights Act would “enslave” whites and that the Soviet Union served as an incubator for the “civil rights movement.” He concludes, “Good thing our leaders weren’t so cowardly in 1964, or we would never have passed a civil rights bill—because of complaints over the provisions in it that would enslave whites.”

However, the escapees of the Goldwater asylum are not the only ones prone to their programming being activated. Each one of us has it in them. Remember, during the struggle for desegregation of the lunch counters and outlawing racial housing covenants, a number of opponents used free market arguments of the “right to refuse service.” As Ronald Reagan once said as he successfully campaigned to be governor of California, “If an individual wants to discriminate against Negroes or others in selling or renting his house, he has the right to do so.” Reagan, who publicly opposed the 1964 Civil Rights Act and the 1965 Voting Rights Act, still overwhelmingly won as president despite launching his campaign with a speech on state rights at the site of three slain civil rights activists. I am not saying all those who disdain any governmental involvement in healthcare want to push people of color to the back of the bus, but in the current healthcare debate, they have de facto shoved those without healthcare to the side to fend for themselves.

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Truck bomb signals trouble on Russia’s southern flank

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Putin's handling of Chechnya is back firing, like the US's handling of Iraq/Afghan/Pak. Now perhaps we see why he was so forceful with Georgia, he needs all the allies he can get in the region, since enemies are everywhere. Ronald Reagan's creation of Al Qaeda continues to give the world nightmares.

A week of extremist attacks on Russia’s seething southern flank climaxed Monday with a suicide truck bombing in Ingushetia that killed at least 20 and injured scores outside a police station in the tiny republic’s main city, Nazran.

The resulting explosion triggered a “raging fire” that destroyed a weapons room, incinerated nearby cars, and damaged nearby apartment buildings, according to an Associated Press (AP) report from Nazran. It was one of the deadliest attacks in the region in years, the AP said.

Violence by Islamist insurgents, once confined mainly to separatist Chechnya, has gradually spread throughout much of Russia’s northern Caucasus, leaving Russian authorities increasingly unable to guarantee order, or even protect pro-Moscow officials, in the mainly Muslim region. (See map.)

For Moscow, the stakes are huge. The northern Caucasus region is Russia’s gateway to the energy-rich and strategically vital southern Caucasus, which includes the former Soviet nations of Georgia, Azerbaijan, and Armenia.

Worsening violence in the area could seriously disrupt the planned 2014 Winter Olympics in nearby Sochi, into which former President Vladimir Putin invested about $12 billion along with his own personal prestige.

Concerns Moscow could lose control

Long-simmering concerns that Moscow could lose control in the volatile northern Caucasus, where Chechen rebels have waged a persistent insurgency since 1991, are spiking again given the past week of attacks.

via Truck bomb signals trouble on Russia’s southern flank | csmonitor.com.

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