Sunday, June 29, 2014

What’s the Matter With Eastern Kentucky? Where's the replacement industry for coal?



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There are many tough places in this country: the ghost cities of Detroit, Camden and Gary, the sunbaked misery of inland California and the isolated reservations where Native American communities were left to struggle. But in its persistent poverty, Eastern Kentucky — land of storybook hills and drawls ­ — just might be the hardest place to live in the United States. Statistically speaking.
The team at The Upshot, a Times news and data-analysis venture, compiled six basic metrics to give a picture of the quality and longevity of life in each county of the nation: educational attainment, household income, jobless rate, disability rate, life expectancy and obesity rate. Weighting each equally, six counties in eastern Kentucky’s coal country (Breathitt, Clay, Jackson, Lee, Leslie and Magoffin) rank among the bottom 10.
Mother Jones giving children shoes. Paint Creek
Clay County, in dead last, might as well be in a different country. The median household income there is barely above the poverty line, at $22,296, and is just over half the nationwide median. Only 7.4 percent of the population has a bachelor’s degree or higher. The unemployment rate is 12.7 percent. The disability rate is nearly as high, at 11.7 percent. (Nationwide, that figure is 1.3 percent.) Life expectancy is six years shorter than average. Perhaps related, nearly half of Clay County is obese.
It’s coal country, but perhaps in name only. In the first quarter of this year, just 54 people were employed in coal mining in Clay County, a precipitous drop from its coal-production peak in 1980. That year, about 2.5 million tons of coal were taken out of the ground in Clay; this year, the county has produced a fraction of that — just over 38,000 tons. Former mines have been reclaimed, and that land has been repurposed in scattershot ways: a golf course, shopping centers, a medium-security federal prison. But nothing has truly come to replace the industry on which Clay County once depended.

The public debate about the haves and the have-nots tends to focus on the 1 percent, especially on the astonishing, breakaway wealth in cities like New York, San Francisco and Washington and the great disparities contained therein. But what has happened in the smudge of the country between New Orleans and Pittsburgh — the Deep South and Appalachia — is in many ways as remarkable as what has happened in affluent cities. In some places, decades of growth have failed to raise incomes, and of late, poverty has become more concentrated not in urban areas but in rural ones.
Despite this, rural poverty is largely shunted aside in the conversation about inequality, much in the way rural areas have been left behind by broader shifts in the economy. The sheer intractability of rural poverty raises uncomfortable questions about how to fix it, or to what extent it is even fixable.
The desperation in coal country is hard to square with the beauty of the place — the densely flocked hills peppered with tiny towns. It’s magical. But it is also poor, even if economic growth and the federal safety-net programs have drastically improved what that poverty looks like.
 
Fifty years ago, President Lyndon B. Johnson declared his “war on poverty” from a doorstep in the tiny Kentucky town of Inez, and since then, Washington has directed trillions of dollars to such communities in the form of cash assistance, food stamps, Medicaid and tax incentives for development.

 (In some places, these transfer payments make up half of all income.) Still, after adjusting for inflation, median income was higher in Clay County in 1979 than it is now, even though the American economy has more than doubled in size.
There have been periodic attempts to flood persistently poor counties with federal dollars in an effort to jolt them into higher growth rates. The Obama administration this year named southeastern Kentucky a “promise zone,” putting it at the top of the list for federal grants. It’s an old idea: Draw in businesses, create jobs, help finance infrastructure, turn the cycle virtuous.
On the opposite end of the ideological spectrum, Kentucky’s libertarian senator, Rand Paul, has proposed a more supply-side-oriented strategy: Let certain counties eliminate capital-gains taxes and institute a special federal income tax of 5 percent in those areas. “I’m just letting you keep more of your own money,” Paul said to a small crowd in a college auditorium in eastern Kentucky last winter. “The difference between this and a government grant is I don’t choose who gets it.” On either side of the aisle, the underlying assumption is the same: Places like Clay County just need a kick-start. But what if that isn’t true?
In many cases, a primary problem in poor rural areas is the very fact that they’re rural — remote, miles from major highways and plagued by substandard infrastructure. Think about the advantages of urban areas, described by thinkers going back to Jane Jacobs and beyond. Density means more workers to choose from, more potential customers, more spillover knowledge from nearby companies. As such, cities punch above their weight, economically speaking. The 10 largest metro regions produced more than a third of the country’s entire economic output as of 2012.
The converse is true for rural areas. Take eastern Kentucky, grappling with the decline of coal — and perhaps looking at an even bleaker future for the industry, given recent carbon-reduction efforts by the E.P.A. Those rolling hills might be picturesque. But those country roads make it hard to ship goods in and out, in turn making it more expensive to build a warehouse or a factory.
“One of the challenges that faces eastern Kentucky is the remoteness of the area,” said James P. Ziliak, the director of the Center for Poverty Research at the University of Kentucky. “It’s difficult to get to a lot of places.
The communities are small, and they’re spread apart, so you lose that synergy that you want to spark development a lot of times.” Even with additional government subsidies, would businesses really want to move there? “It’s this chicken-and-egg problem,” Ziliak said. “My view is that firms will never locate into a community with an unskilled labor force, unless the only labor they need is unskilled. And there has been a historic lack of investment in human capital in these areas.”
 
The queasy answer that economists come to is that it would be better to help the people than the place — in some cases, helping people leave the place. Generally, the wealthier and better educated the family, the more mobile they are. It takes resources to pack up all your things, sign a new lease, pay for gas or a flight and go. That might help explain why more Americans aren’t flocking from places with high unemployment rates to places with low ones, even if those places are surprisingly close together. College graduates, for instance, are several times as responsive to differences in labor demand as those who completed only high school, according to a study in The Journal of Human Resources.
But government policy based less on place and more on people might help ameliorate that trend. “Let’s say I was a hardworking person who lost my job in Harlan, Ky. — the ideal place, really, to go is Williston, N.D.,” Senator Paul said. “People need to be mobile to go there. Some government programs prevent mobility or discourage mobility.” And none encourage it: There are scant federal resources to help the unemployed or the poor in rural areas move to a job or even just a better neighborhood. (Imagine Senator Mitch McConnell running for re-election on the campaign slogan: “I’ll get you out of this moribund area and up to the wilderness of North Dakota!”)
Of course, thousands of families in places like Kentucky, South Dakota and West Virginia manage to cobble together enough resources to make the move themselves; the share of Americans living in rural areas has slowly drifted down. In Clay County, the population has declined for the last decade. And the overall population in rural areas declined for the first time from 2010 to 2012, according to the Census Bureau.

Jeff Whitehead runs the Eastern Kentucky Concentrated Employment Program, which helps retrain laid-off coal miners and find them new jobs. “There’s just very limited opportunity for the people who were working in the region,” he said, adding that he helped 220 families move out of the area in recent years, despite many workers’ understandable resistance. “That’s a really hard pill to swallow. People are really connected to place here. For a lot of people, it’s the last thing they’re doing. They’re holding off until they have no other choice.”
But the number and proportion of people living in poverty in places like eastern Kentucky persists, despite all the trillions of dollars spent to improve the state of the poor in the United States and promote development. Ziliak thinks that efforts focused on human capital — meaning education initiatives, from prekindergarten all the way through college — might be the best use of any new money. But, of course, that also might mean more people moving away.

Annie Lowrey was, until recently, an economics reporter for The Times. Alan Flippen contributed reporting.

Friday, June 27, 2014

"As for the Republicans" H. P. Lovecraft 1936

H. P. Lovecraft
"As for the Republicans — how can one regard seriously a frightened, greedy, nostalgic huddle of tradesmen and lucky idlers who shut their eyes to history and science, steel their emotions against decent human sympathy, cling to sordid and provincial ideals exalting sheer acquisitiveness and condoning artificial hardship for the non-materially-shrewd, dwell smugly and sentimentally in a distorted dream-cosmos of outmoded phrases and principles and attitudes based on the bygone agricultural-handicraft world, and revel in (consciously or unconsciously) mendacious assumptions (such as the notion that real liberty is synonymous with the single detail of unrestricted economic license or that a rational planning of resource-distribution would contravene some vague and mystical 'American heritage'…) utterly contrary to fact and without the slightest foundation in human experience? Intellectually, the Republican idea deserves the tolerance and respect one gives to the dead."
—Lovecraft in a letter to C. L. Moore, exact date unknown, mid-October 1936

Monday, June 23, 2014

Jourdon Anderson, former slave replies to his Old Master,


(Source: The Freedmen's Book; Image: A group of escaped slaves in Virginia in 1862, courtesy of the Library of Congress.)

Dayton, Ohio,The Mind Unleashed with April Keeler

In August of 1865, a Colonel P.H. Anderson of Big Spring, Tennessee, wrote to his former slave, Jourdon Anderson, and requested that he come back to work on his farm. Jourdon — who, since being emancipated, had moved to Ohio, found paid work, and was now supporting his family — responded spectacularly by way of the letter seen below (a letter which, according to newspapers at the time, he dictated).



August 7, 1865
To My Old Master,
Colonel P.H. Anderson, Big Spring, Tennessee
Sir: I got your letter, and was glad to find that you had not forgotten Jourdon, and that you wanted me to come back and live with you again, promising to do better for me than anybody else can. I have often felt uneasy about you. I thought the Yankees would have hung you long before this, for harboring Rebs they found at your house. I suppose they never heard about your going to Colonel Martin's to kill the Union soldier that was left by his company in their stable.

Although you shot at me twice before I left you, I did not want to hear of your being hurt, and am glad you are still living. It would do me good to go back to the dear old home again, and see Miss Mary and Miss Martha and Allen, Esther, Green, and Lee. Give my love to them all, and tell them I hope we will meet in the better world, if not in this. I would have gone back to see you all when I was working in the Nashville Hospital, but one of the neighbors told me that Henry intended to shoot me if he ever got a chance.
I want to know particularly what the good chance is you propose to give me. I am doing tolerably well here. I get twenty-five dollars a month, with victuals and clothing; have a comfortable home for Mandy,—the folks call her Mrs. Anderson,—and the children—Milly, Jane, and Grundy—go to school and are learning well. The teacher says Grundy has a head for a preacher. They go to Sunday school, and Mandy and me attend church regularly. We are kindly treated. Sometimes we overhear others saying, "Them colored people were slaves" down in Tennessee. The children feel hurt when they hear such remarks; but I tell them it was no disgrace in Tennessee to belong to Colonel Anderson. Many darkeys would have been proud, as I used to be, to call you master. Now if you will write and say what wages you will give me, I will be better able to decide whether it would be to my advantage to move back again.
To My Old Master

In August of 1865, a Colonel P.H. Anderson of Big Spring, Tennessee, wrote to his former slave, Jourdon Anderson, and requested that he come back to work on his farm. Jourdon — who, since being emancipated, had moved to Ohio, found paid work, and was now supporting his family — responded spectacularly by way of the letter seen below (a letter which, according to newspapers at the time, he dictated).

Rather than quote the numerous highlights in this letter, I'll simply leave you to enjoy it. Do make sure you read to the end.

UPDATE: Head over to Kottke for a brief but lovely little update about the later years of Jourdon and family.

(Source: The Freedmen's Book; Image: A group of escaped slaves in Virginia in 1862, courtesy of the Library of Congress.)

Dayton, Ohio, 

August 7, 1865

To My Old Master, Colonel P.H. Anderson, Big Spring, Tennessee

Sir: I got your letter, and was glad to find that you had not forgotten Jourdon, and that you wanted me to come back and live with you again, promising to do better for me than anybody else can. I have often felt uneasy about you. I thought the Yankees would have hung you long before this, for harboring Rebs they found at your house. I suppose they never heard about your going to Colonel Martin's to kill the Union soldier that was left by his company in their stable. Although you shot at me twice before I left you, I did not want to hear of your being hurt, and am glad you are still living. It would do me good to go back to the dear old home again, and see Miss Mary and Miss Martha and Allen, Esther, Green, and Lee. Give my love to them all, and tell them I hope we will meet in the better world, if not in this. I would have gone back to see you all when I was working in the Nashville Hospital, but one of the neighbors told me that Henry intended to shoot me if he ever got a chance.

I want to know particularly what the good chance is you propose to give me. I am doing tolerably well here. I get twenty-five dollars a month, with victuals and clothing; have a comfortable home for Mandy,—the folks call her Mrs. Anderson,—and the children—Milly, Jane, and Grundy—go to school and are learning well. The teacher says Grundy has a head for a preacher. They go to Sunday school, and Mandy and me attend church regularly. We are kindly treated. Sometimes we overhear others saying, "Them colored people were slaves" down in Tennessee. The children feel hurt when they hear such remarks; but I tell them it was no disgrace in Tennessee to belong to Colonel Anderson. Many darkeys would have been proud, as I used to be, to call you master. Now if you will write and say what wages you will give me, I will be better able to decide whether it would be to my advantage to move back again.

As to my freedom, which you say I can have, there is nothing to be gained on that score, as I got my free papers in 1864 from the Provost-Marshal-General of the Department of Nashville. Mandy says she would be afraid to go back without some proof that you were disposed to treat us justly and kindly; and we have concluded to test your sincerity by asking you to send us our wages for the time we served you. This will make us forget and forgive old scores, and rely on your justice and friendship in the future. I served you faithfully for thirty-two years, and Mandy twenty years. At twenty-five dollars a month for me, and two dollars a week for Mandy, our earnings would amount to eleven thousand six hundred and eighty dollars. Add to this the interest for the time our wages have been kept back, and deduct what you paid for our clothing, and three doctor's visits to me, and pulling a tooth for Mandy, and the balance will show what we are in justice entitled to. Please send the money by Adams's Express, in care of V. Winters, Esq., Dayton, Ohio. If you fail to pay us for faithful labors in the past, we can have little faith in your promises in the future. We trust the good Maker has opened your eyes to the wrongs which you and your fathers have done to me and my fathers, in making us toil for you for generations without recompense. Here I draw my wages every Saturday night; but in Tennessee there was never any pay-day for the negroes any more than for the horses and cows. Surely there will be a day of reckoning for those who defraud the laborer of his hire.

In answering this letter, please state if there would be any safety for my Milly and Jane, who are now grown up, and both good-looking girls. You know how it was with poor Matilda and Catherine. I would rather stay here and starve—and die, if it come to that—than have my girls brought to shame by the violence and wickedness of their young masters. You will also please state if there has been any schools opened for the colored children in your neighborhood. The great desire of my life now is to give my children an education, and have them form virtuous habits.

Say howdy to George Carter, and thank him for taking the pistol from you when you were shooting at me.

From your old servant,

Jourdon Anderson.

The Mind Unleashed ॐ
As to my freedom, which you say I can have, there is nothing to be gained on that score, as I got my free papers in 1864 from the Provost-Marshal-General of the Department of Nashville. Mandy says she would be afraid to go back without some proof that you were disposed to treat us justly and kindly; and we have concluded to test your sincerity by asking you to send us our wages for the time we served you. This will make us forget and forgive old scores, and rely on your justice and friendship in the future. I served you faithfully for thirty-two years, and Mandy twenty years. At twenty-five dollars a month for me, and two dollars a week for Mandy, our earnings would amount to eleven thousand six hundred and eighty dollars. Add to this the interest for the time our wages have been kept back, and deduct what you paid for our clothing, and three doctor's visits to me, and pulling a tooth for Mandy, and the balance will show what we are in justice entitled to. Please send the money by Adams's Express, in care of V. Winters, Esq., Dayton, Ohio. If you fail to pay us for faithful labors in the past, we can have little faith in your promises in the future. We trust the good Maker has opened your eyes to the wrongs which you and your fathers have done to me and my fathers, in making us toil for you for generations without recompense. Here I draw my wages every Saturday night; but in Tennessee there was never any pay-day for the negroes any more than for the horses and cows. Surely there will be a day of reckoning for those who defraud the laborer of his hire.
In answering this letter, please state if there would be any safety for my Milly and Jane, who are now grown up, and both good-looking girls. You know how it was with poor Matilda and Catherine. I would rather stay here and starve—and die, if it come to that—than have my girls brought to shame by the violence and wickedness of their young masters. You will also please state if there has been any schools opened for the colored children in your neighborhood. The great desire of my life now is to give my children an education, and have them form virtuous habits.
Say howdy to George Carter, and thank him for taking the pistol from you when you were shooting at me.
From your old servant,
Jourdon Anderson.

Thursday, June 19, 2014

Fukushima’s Children are Dying

| June 14, 2014 10:11 am | Comments



hwassermanSome 39 months after the multiple explosions at Fukushima, thyroid cancer rates among nearby children have skyrocketed to more than forty times (40x) normal.
More than 48 percent of some 375,000 young people—nearly 200,000 kids—tested by the Fukushima Medical University near the smoldering reactors now suffer from pre-cancerous thyroid abnormalities, primarily nodules and cysts. The rate is accelerating.
More than 120 childhood cancers have been indicated where just three would be expected, says Joseph Mangano, executive director of the Radiation and Public Health Project.
The nuclear industry and its apologists continue to deny this public health tragedy. Some have actually asserted that “not one person” has been affected by Fukushima’s massive radiation releases, which for some isotopes exceed Hiroshima by a factor of nearly 30.
More than 48 percent of some 375,000 young people—nearly 200,000 kids—tested by the Fukushima Medical University near the smoldering reactors now suffer from pre-cancerous thyroid abnormalities, primarily nodules and cysts.
More than 48 percent of some 375,000 young people—nearly 200,000 kids—tested by the Fukushima Medical University near the smoldering reactors now suffer from pre-cancerous thyroid abnormalities, primarily nodules and cysts.
But the deadly epidemic at Fukushima is consistent with impacts suffered among children near the 1979 accident at Three Mile Island and the 1986 explosion at Chernobyl, as well as findings at other commercial reactors.

The likelihood that atomic power could cause such epidemics has been confirmed by the Canadian Nuclear Safety Commission, which says that “an increase in the risk of childhood thyroid cancer” would accompany a reactor disaster.
In evaluating the prospects of new reactor construction in Canada, the Commission says the rate “would rise by 0.3 percent at a distance of 12 kilometers” from the accident. But that assumes the distribution of protective potassium iodide pills and a successful emergency evacuation, neither of which happened at Three Mile Island, Chernobyl or Fukushima.
The numbers have been analyzed by Mangano. He has studied the impacts of reactor-created radiation on human health since the 1980s, beginning his work with the legendary radiologist Dr. Ernest Sternglass and statistician Jay Gould.
Speaking on www.prn.fm’s Green Power & Wellness Show, Mangano also confirms that the general health among downwind human populations improves when atomic reactors are shut down, and goes into decline when they open or re-open.
Nearby children are not the only casualties at Fukushima. Plant operator Masao Yoshida has died at age 58 of esophogeal cancer. Masao heroically refused to abandon Fukushima at the worst of the crisis, probably saving millions of lives. Workers at the site who are employed by independent contractors—many dominated by organized crime—are often not being monitored for radiation exposure at all. Public anger is rising over government plans to force families—many with small children—back into the heavily contaminated region around the plant.
Following its 1979 accident, Three Mile Island’s owners denied the reactor had melted. But a robotic camera later confirmed otherwise.
The state of Pennsylvania mysteriously killed its tumor registry, then said there was “no evidence” that anyone had been killed.

But a wide range of independent studies confirm heightened infant death rates and excessive cancers among the general population. Excessive death, mutation and disease rates among local animals were confirmed by the Pennsylvania Department of Agriculture and local journalists.
In the 1980s federal Judge Sylvia Rambo blocked a class action suit by some 2,400 central Pennsylvania downwinders, claiming not enough radiation had escaped to harm anyone. But after 35 years, no one knows how much radiation escaped or where it went. Three Mile Island’s owners have quietly paid millions to downwind victims in exchange for gag orders.
At Chernobyl, a compendium of more than 5,000 studies has yielded an estimated death toll of more than 1,000,000 people.
The radiation effects on youngsters in downwind Belarus and Ukraine have been horrific. According to Mangano, some 80 percent of the “Children of Chernobyl” born downwind since the accident have been harmed by a wide range of impacts ranging from birth defects and thyroid cancer to long-term heart, respiratory and mental illnesses. The findings mean that just one in five young downwinders can be termed healthy.
Physicians for Social Responsibility and the German chapter of the International Physicians for the Prevention of Nuclear War have warned of parallel problems near Fukushima.
Japan earthquake and tsunami aftermath
The United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) has recently issued reports downplaying the disaster’s human impacts. UNSCEAR is interlocked with the United Nations’ International Atomic Energy Agency, whose mandate is to promote atomic power. The IAEA has a long-term controlling gag order on UN findings about reactor health impacts. For decades UNSCEAR and the World Health Organization have run protective cover for the nuclear industry’s widespread health impacts. Fukushima has proven no exception.
In response, Physicians for Social Responsibility and the German International Physicians for the Prevention of Nuclear War have issued a ten-point rebuttal, warning the public of the UN’s compromised credibility. The disaster is “ongoing” say the groups, and must be monitored for decades. “Things could have turned for the worse” if winds had been blowing toward Tokyo rather than out to sea (and towards America).
There is on-going risk from irradiated produce, and among site workers whose doses and health impacts are not being monitored. Current dose estimates among workers as well as downwinders are unreliable, and special notice must be taken of radiation’s severe impacts on the human embryo.
UNSCEAR’s studies on background radiation are also “misleading,” say the groups, and there must be further study of genetic radiation effects as well as “non-cancer diseases.” The UN assertion that “no discernible radiation-related health effects are expected among exposed members” is “cynical,” say the groups. They add that things were made worse by the official refusal to distribute potassium iodide, which might have protected the public from thyroid impacts from massive releases of radioactive I-131.
Overall, the horrific news from Fukushima can only get worse. Radiation from three lost cores is still being carried into the Pacific. Management of spent fuel rods in pools suspended in the air and scattered around the site remains fraught with danger.
The pro-nuclear Shinzo Abe regime wants to reopen Japan’s remaining 48 reactors. It has pushed hard for families who fled the disaster to re-occupy irradiated homes and villages.
But Three Mile Island, Chernobyl and the plague of death and disease now surfacing near Fukushima make it all too clear that the human cost of such decisions continues to escalate—with our children suffering first and worst.

Harvey Wasserman edits www.nukefree.org and wrote SOLARTOPIA! Our Green-Powered Earth. His Green Power & Wellness Show is at www.prn.fm.

Tuesday, June 17, 2014

Breaking News: ex-Goldman Sachs chiefs like dog-poo..they stinkup everything they touch

How the vampire squid is controlling our lives: They helped cause the crash. Then profited from it. Now, from the Bank of England to the Fed, ex-Goldman Sachs chiefs are pulling the levers of power


Amid the recent management shake-up at the top  of the Bank of England, as  it was dragged into the investigation of the alleged fixing of the £3 trillion-a-day foreign-exchange markets, one crucial appointment went almost unnoticed.
While public attention was understandably focused on an Egyptian-born mother of twins becoming only the second female deputy governor of the bank, the far more influential appointment was that of economist Ben Broadbent.
As the new deputy governor for monetary policy, he is now the predominant voice on the future direction of interest rates. 


Influential: Ben Broadbent, the Bank of England's new deputy governor for monetary policy, who spent a decade during the boom-and-bust years as senior economist at Goldman Sachs


Influential: Ben Broadbent, the Bank of England's new deputy governor for monetary policy, who spent a decade during the boom-and-bust years as senior economist at Goldman SachsHis work will have a huge effect on the lives of the British people, for he will have a key role in deciding when the record five years of super-low mortgage rates will end — a decision that will inevitably lead to home-owners facing considerably bigger monthly bills.

But there is one crucial fact that should concern us about the Cambridge and Harvard-educated Broadbent: he spent a decade during the boom-and-bust years as the senior economist at the global headquarters of the investment bank Goldman Sachs.

He joins an elite few who hold senior positions in the world’s most powerful central banks — from London to New York, Frankfurt and beyond — and all of whom come from this one company, which was controversially described by Rolling Stone magazine as ‘a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money’.
The fact that so many alumni of the world’s most profitable — as well as most ruthless and cunning — investment bank wield such a level of influence in these central banks is nothing short of remarkable. 

Because Goldman Sachs is an institution that, as I will explain, not only helped cause the financial crisis in 2008, but also profited from it — hugely enriching its own staff while leaving a trail of chaos for taxpayers to clear up. 

Do we really want one of the most controversial financial institutions on the planet, which was eventually fined a record £343 million for shamelessly misleading investors during the crisis, to have so many of its ex-staff holding the levers of power in the City of London?

What makes the choice of Broadbent an issue of major public concern is that his period at Goldman saw the New York investment firm deeply embroiled in some of the most shocking financial scandals of  recent years.
First, there was the crisis triggered by the sub-prime mortgage disaster, when vast quantities of loans were made by U.S. banks to homeowners who could never pay them back. 

This reached disaster point in 2007-8, once the loans had been sold on by banks and institutions around the world — by which time they had been packaged up as financial instruments or ‘derivatives’ so complicated that no one could tell how toxic they were. 

Goldman Sachs played a key part in inventing these poisonous derivatives, which were a major factor in triggering the financial crisis.
But even more morally offensive was that once people finally began to realise how dangerous these derivatives were, Goldman Sachs started making money by speculating in the market that they would collapse in value.
So not only did the bank help create the crisis, it also profited from it. 

'God's work': Goldman Sachs fast-talking CEO Lloyd Blankfein stunned the world last year when he offensively boasted - amid his banks return to fat profits - that that's what he and his employees were doing
'God's work': Goldman Sachs fast-talking CEO Lloyd Blankfein stunned the world last year when he offensively boasted - amid his banks return to fat profits - that that's what he and his employees were doing


It was the same Goldman Sachs that, during the financial crisis in 2008, when, like all financial institutions, its shares were falling, accepted a $10 billion bailout from the U.S. government.
Handily, many of its former staff — such as Hank Paulson, who was then U.S. Treasury Secretary — happened to be in key posts in the government when the decision was made.
'A vampire squid wrapped around the face of humanity, jamming its blood funnel into anything that smells like money' - Matt Taibbi in Rolling StoneThen there is the fact that Goldman Sachs reportedly arranged with the Right-wing Greek government to present the national accounts in the best possible light so that Greece could join the Eurozone in 2001. The bank was subsequently involved in elaborate schemes that masked the true horror of the country’s public debt crisis, which saw Greece having to be bailed out by the EU and left in economic ruins.
Despite this, Goldman bosses were able to pick up $111 million in bonuses soon afterwards, which were understandably branded an outrage as they were awarded during the worst recession for 80 years — one that had mainly been caused by irresponsible bank behaviour.

'A vampire squid wrapped around the face of humanity, jamming its blood funnel into anything that smells like money' - Matt Taibbi in Rolling Stone


Influence in high places, though, did not stop Goldman from being heavily fined by the Wall Street regulator, the Securities & Exchange Commission (SEC), in 2010 for selling dodgy complex securities, based on sub-prime mortgages, to clients including the hapless Royal Bank of Scotland.
What makes the behaviour of Goldman Sachs so shameless is the arrogance with which it has sought to protect its reputation and the claims its bosses like to make for  its integrity.

The group’s chairman and chief executive, the smiling and fast-talking former trader Lloyd Blankfein, stunned everyone last year when he offensively boasted — amid Goldman’s return to fat profits — that the bank was doing ‘God’s work’.
Perhaps it is this arrogance that enables former Goldman executives, such as Ben Broadbent at the Bank of England, to rise ineffably to the very top jobs in international finance.

With the approval of Chancellor George Osborne, 49-year-old Broadbent was plucked from his relatively obscure role as an external member of the Bank of England’s Monetary Policy Committee and promoted over the head of the Old Lady’s best and brightest internal prospects. 

Bank of England Governor Mark Carney spent the longest stretch of his career working at Goldman SachsHis elevation to the top economic role at Britain’s central bank means he will now be making the crucial interest rate, inflation and growth forecasts for the Bank’s quarterly Inflation Report — on which key decisions are made that affect millions of people.
Broadbent’s promotion must have seemed the most natural thing in the world to the Bank of England’s Canadian governor Mark Carney.

Carney, after all, is himself an Old Goldmanite and a member of the most exclusive club in world economic policy-making — much more influential than David Cameron’s kitchen cabinet of Old Etonians.
Carney spent the largest stretch of his career — from 1990 to 2003 — working for Goldman Sachs in Tokyo, New York and London.
Alumni: Bank of England Governor Mark Carney,  spent the longest stretch of his career working at Goldman Sachs. The chairman of the European Central Bank, Mario Draghi is another former Goldman Sachs banker


The choice of Goldman bankers for senior roles at the Bank of England  is a novel development for an institution that has always frowned on any suggestions of dual loyalty or conflicts of interest.
When Gordon Brown was Chancellor (from 1997 to 2007), he steadfastly refused to appoint the person many regarded as the most talented economist of his generation, Gavyn Davies, as governor of the Bank of England. 

 The chairman of the European Central Bank, Mario Draghi, arguably the most powerful figure in European finance, is another former Goldman Sachs bankerBrown feared a political backlash because of Davies’s role as the millionaire chief global economist at Goldman Sachs, and the fact that his wife, Sue Nye, was a special assistant to the Chancellor.
However, despite 13 years in a variety of roles at Goldman, and a successful stint as governor of the Bank of Canada, Carney was given not only the Bank of England role but also the job of chairman of the Financial Stability Board.
This is the body established by the G20 committee of rich and emerging market nations to try to reform global banking — including the rapacious bonus culture — in the aftermath of the 2007-9 credit crunch.

Indeed, Old Goldmanites seem to be everywhere. When Broadbent and Carney meet fellow central bankers, there will be a number of familiar faces around the table. 
    
The chairman of the European Central Bank, Mario Draghi, who is credited with rescuing Euroland from total implosion with his promise to do ‘whatever it takes’ to save the euro, is another former Goldman Sachs banker.
Arguably, he is the most powerful figure in European finance, having forced Euroland interest rates down to rock-bottom levels and bought the government bonds of Europe’s struggling ‘Club Med’ economies before exchanging them for cash. He is now trying to tackle Europe’s near-bankrupt banking system.

The Goldman Sachs booth at the NYSE: The banks culture of ever-more complex securities and trades was at the core of the financial crisis
The Goldman Sachs booth at the NYSE: The banks culture of ever-more complex securities and trades was at the core of the financial crisis

In the U.S., there is the amiable Bill Dudley, the former head of U.S. economics at Goldman, who is now president of the Federal Reserve Bank of New York, the operating arm of America’s central bank.
Goldman boss Lloyd Blankfein once explained to me that one of the advantages of paying Goldman Sachs’s bankers so lavishly — they sit at the top of the bankers’ pay league — was that the ‘partners’ can retire young and very rich, and then go off to jobs in the public service. 

There is, however, a deeply disturbing paradox in the fact that Goldman bankers are now effectively running the world’s monetary system.
The Goldman culture of creating ever-more complex securities and trades, coupled with absurdly high pay and bonuses as incentives for the bank’s workforce, were at the very core of the financial crisis that brought the world to the brink of economic collapse and led to a long period of painful austerity. 

None of these former Goldman economists and executives, who are now the overlords of the global economy, seems to have predicted the fact that the world was sitting on a financial time-bomb.
It seems very strange that when there are so many talented economic thinkers, Nobel prize winners and lifelong central bankers to be called upon, it is nearly always Goldmanites that carry off the plum jobs.
Allowing such a cultish group to control the levers of global finance shows, I would suggest, a worrying lack of imagination and judgment by the ruling class of politicians that appointed them.
The concentration of such huge economic power in the hands of a small cabal of economists and financiers, drawn from such a narrow pool of interests, is deeply unhealthy. 

However honourable the motives of this group, there remains a fear that when the next crisis comes — as it inevitably will — their concern to protect their cronies in the banking world will take precedence over their responsibility to look after the long-suffering public.

Jim DeMint: Nazi Bigots "R" US


Heritage Foundation Benghazi panel descends into Islamophobic freak show

With the help of some bigoted guests, Jim DeMint's right-wing think tank continues its descent toward rock bottom VIDEO


Heritage Foundation Benghazi panel descends into Islamophobic freak showJim DeMint (Credit: AP/Patrick Semansky)

Although its reputation for intellectual seriousness was previously overstated, those who worried that former South Carolina Sen. Jim DeMint’s ascension as chief of the Heritage Foundation would lead to the right-wing think tank’s disgrace are looking mighty prescient after a Monday afternoon panel on the Banghazi attack’s lingering “unanswered questions” devolved into a bigoted freak show.

When one considers the panelists involved, it’s unlikely the so-called discussion was ever going to go too well. Alongside straight-up crank and professional bigot Frank Gaffney, Heritage also invited ACT! for America’s Brigitte Gabriel (known for repeatedly describing Muslims as “barbarians“) and Citizens’ Commission on Benghazi’s Clare Lopez (who previously described the Obama administration as having “switched sides” in the war on terror). Leading the conversation was Chris Plante, a conservative talk radio host.

According to the Washington Post’s Dana Milbank, while the panel rather quickly and predictably transitioned from vague expressions of concern about a Benghazi conspiracy to a more free-floating animus toward Islam and Muslims, things didn’t get really ugly until one audience member, an American University law student named Saba Ahmed, decided to push back against the panelists’ many ignorant and harmful assertions.

“We portray Islam and all Muslims as bad, but there’s 1.8 billion followers of Islam,” Ahmed reportedly told the panel. “We have 8 million-plus Muslim Americans in this country, and I don’t see them represented here.”


Copy and paste to browser for video:
  http://mm4a.org/1q8cCBt


This was unacceptable. Gabriel was the first to attack, according to Milbank, responding that “180 million to 300 million” Muslims are “dedicated to the destruction of Western civilization” and that the “peaceful majority” of the world’s Muslims “were irrelevant” on September 11, 2001. Besides, Muslims are like Nazis, Gabriel argued: “Most Germans were peaceful,” she said, “yet the Nazis drove the agenda, and as a result, 60 million died.”

Gabriel then questioned Ahmed’s citizenship before telling her that “political correctness” of the kind she spouts should be kept “in the garbage” where it belongs. Ahmed was then asked “Where are the others speaking out?” but before she could explain why demanding a community of hundreds of millions have “others” who “speak out” against murder is ridiculous and disingenuous, the audience drowned her out with a standing ovation.

As the evening progressed, Plante implied Ambassador Chris Stevens’ real cause of death was being hidden, Gabriel suggested Stevens was secretly working on a weapons-swap between Libya and Syria, and Lopez joked about how journalists covering the attack are secretly friends with Islamist terrorists, with whom they were “sipping frappes … in juice bars.” One audience member even suggested that Gen. Carter Ham, then-commander of U.S. Africa Command, had been “placed under house arrest” so as to allow the attack to occur. Plante said he’d heard the same.

Monday, June 16, 2014

Misinformed USA: Why average Americans vote for Republicans

One can only wonder why average working class Americans would vote for a party that is so obvious in their bias towards the wealthy. It would make sense that someone in the top 1 percent of the income bracket would vote for the Republican party since they have the wealthiest American's best interest at heart. You could even make the case that highly religious Christians would vote for Republicans even though, at times, they vote against their own best economic interests. So the question remains, while scratching your head, why do working class Americans vote for Republican candidates?

Recent Tea Party Rally

I once sat down and spoke with an acquaintance of mine, trying to get a grip on what people are thinking about the future of our country. He said he voted for Mitt Romney in 2012 because, "we need a business person to get our debt down." I asked where he got his news and information from, and after trying to deflect from the question, the answer finally came. "I don't pay attention too much, but when I do, I watch Fox." Fox News is the primary source for information for millions of Americans across the country and that's where the problem starts.

Whether it's Bill O'Reilly, Sean Hannity or other right wing ideologues, Fox News is a tunnel vision information outlet with only one particular agenda that is being pushed through. Millions of Americans watch Fox News, listen to the likes of Rush Limbaugh, Neal Boortz, Michael Savage and others while getting information from right wing think tanks like the Heritage Foundation and the Cato Institute. With big businesses and billionaire allies, the truth and facts in American have gone from a clear right and wrong, black and white situation to muffled shades of gray. It's not to say that Fox News, the Cato Institute and others like them totally lie because that would be too difficult to pull off. What these think tanks do, is take a fact and twist it to fit their own personal agenda, leaving out key information that would contradict with the platform they're trying to create.

A perfect example in describing the way groups like the Cato Institute operate is a report that came out by alternet.org. In the early 2000s, the Cato Institute released a report that suggested that families receiving welfare were making between $17,000 and $25,000 a year, but the Center for Budget and Policy Priorities countered that claim. The Center for Budget and Policy Priorities showed that the average income for welfare recipients was below $9,000 a year, which is nearly $3,000 a year below the poverty line.

The misinformation also comes from another right wing think tank, the Heritage Foundation. In 2011, when Paul Ryan released the "Ryan" Republican budget, the Heritage Foundation claimed that unemployment would drop to 6.4% in 2012 and to 2.8% in 2022. A report released by the Washington Monthly pointed out that these claims were extremely exaggerated. The CBO, the Congressional Budget Office, showed the errors of the Heritage Foundation's report and the director of the Heritage Foundation's Center for Data Analysis, William Beach, was forced to walk backed the claims.

In 2009, the Heritage Foundation released ads attacking the Employee Free Choice Act, a bill that was brought to congress that would give all employees the right to form a union without fear of being fired from their current job. Since the Heritage Foundation is bought and paid for by million and billionaire conservatives, the idea of having workers unite with more power and freedom threatens their control at the top. The ads released painted a false picture about the Employee Free Choice Act, claiming that unions will bully workers into joining them with an attempt to take money from the employee. According to the Huffington Post, the Heritage Foundation "frame(s) the EFCA issue based on bald-faced lies. Business-financed 'think tanks' like Heritage propagandize workers against their own interests in psychologically sophisticated ways, often pulling on their heartstrings and framing their anti-union stance as 'common sense.'"
Average Americans need to be more informed about what is going in the country, but also where to get their information. The argument isn't about holding a liberal or conservative ideology, it's about facts that are based on truth and not information based on twisted logic. Americans need to learn to dig a little deeper to find honest reporting, not just believe something that falls in their lap at the expense of a billionaire funded think tank or news organization.
(Updated: 2/20/2014)
Like what you've read? Have any questions or comments? If so, e-mail me at rsobelexaminer@gmail.com, Tweet me on Twitter at @liberalexaminer

Thursday, June 12, 2014

The French are right: tear up public debt – most of it is illegitimate anyway

Debt audits show that austerity is politically motivated to favour social elites. Is a new working-class internationalism in the air?

Occupy Wall Street's debt buying strikes at the heart of capitalism
Chile artist burns studetn debt 
 
Contracts for Chilean student loans worth $500m go up in flames – the 'imaginative auditing' of the artist Francisco Tapia, commonly known as Papas Fritas (Fried Potatoes). Photograph: David von Blohn/REX
 
As history has shown, France is capable of the best and the worst, and often in short periods of time.
On the day following Marine Le Pen's Front National victory in the European elections, however, France made a decisive contribution to the reinvention of a radical politics for the 21st century. On that day, the committee for a citizen's audit on the public debt issued a 30-page report on French public debt, its origins and evolution in the past decades. The report was written by a group of experts in public finances under the coordination of Michel Husson, one of France's finest critical economists. Its conclusion is straightforward: 60% of French public debt is illegitimate.

Anyone who has read a newspaper in recent years knows how important debt is to contemporary politics. As David Graeber among others has shown, we live in debtocracies, not democracies. Debt, rather than popular will, is the governing principle of our societies, through the devastating austerity policies implemented in the name of debt reduction. Debt was also a triggering cause of the most innovative social movements in recent years, the Occupy movement.

If it were shown that public debts were somehow illegitimate, that citizens had a right to demand a moratorium – and even the cancellation of part of these debts – the political implications would be huge. It is hard to think of an event that would transform social life as profoundly and rapidly as the emancipation of societies from the constraints of debt. And yet this is precisely what the French report aims to do.

The audit is part of a wider movement of popular debt audits in more than 18 countries. Ecuador and Brazil have had theirs, the former at the initiative of Rafael Correa's government, the latter organised by civil society. European social movements have also put in place debt audits, especially in countries harder hit by the sovereign debt crisis, such as Greece and Spain. In Tunisia, the post-revolutionary government declared the debt taken out during Ben Ali's dictatorship an "odious" debt: one that served to enrich the clique in power, rather than improving the living conditions of the people.
The report on French debt contains several key findings. Primarily, the rise in the state's debt in the past decades cannot be explained by an increase in public spending. The neoliberal argument in favour of austerity policies claims that debt is due to unreasonable public spending levels; that societies in general, and popular classes in particular, live above their means.

This is plain false. In the past 30 years, from 1978 to 2012 more precisely, French public spending has in fact decreased by two GDP points. What, then, explains the rise in public debt? First, a fall in the tax revenues of the state. Massive tax reductions for the wealthy and big corporations have been carried out since 1980. In line with the neoliberal mantra, the purpose of these reductions was to favour investment and employment. Well, unemployment is at its highest today, whereas tax revenues have decreased by five points of GDP.

The second factor is the increase in interest rates, especially in the 1990s. This increase favoured creditors and speculators, to the detriment of debtors. Instead of borrowing on financial markets at prohibitive interest rates, had the state financed itself by appealing to household savings and banks, and borrowed at historically normal rates, the public debt would be inferior to current levels by 29 GDP points.

Tax reductions for the wealthy and interest rates increases are political decisions. What the audit shows is that public deficits do not just grow naturally out of the normal course of social life. They are deliberately inflicted on society by the dominant classes, to legitimise austerity policies that will allow the transfer of value from the working classes to the wealthy ones.
French Indignants  
 
A sit-in called by Occupy France at La Défense business district in Paris. Photograph: Afp/AFP/Getty Images 
  A stunning finding of the report is that no one actually knows who holds the French debt. To finance its debt, the French state, like any other state, issues bonds, which are bought by a set of authorised banks. These banks then sell the bonds on the global financial markets. Who owns these titles is one of the world's best kept secrets. The state pays interests to the holders, so technically it could know who owns them. Yet a legally organised ignorance forbids the disclosure of the identity of the bond holders.

This deliberate organisation of ignorance – agnotology – in neoliberal economies intentionally renders the state powerless, even when it could have the means to know and act. This is what permits tax evasion in its various forms – which last year cost about €50bn to European societies, and €17bn to France alone.

Hence, the audit on the debt concludes, some 60% of the French public debt is illegitimate.
An illegitimate debt is one that grew in the service of private interests, and not the wellbeing of the people. Therefore the French people have a right to demand a moratorium on the payment of the debt, and the cancellation of at least part of it. There is precedent for this: in 2008 Ecuador declared 70% of its debt illegitimate.

The nascent global movement for debt audits may well contain the seeds of a new internationalism – an internationalism for today – in the working classes throughout the world. This is, among other things, a consequence of financialisation. Thus debt audits might provide a fertile ground for renewed forms of international mobilisations and solidarity.

This new internationalism could start with three easy steps.

1) Debt audits in all countries

The crucial point is to demonstrate, as the French audit did, that debt is a political construction, that it doesn't just happen to societies when they supposedly live above their means. This is what justifies calling it illegitimate, and may lead to cancellation procedures. Audits on private debts are also possible, as the Chilean artist Francisco Tapia has recently shown by auditing student loans in an imaginative way.

2) The disclosure of the identity of debt holders

A directory of creditors at national and international levels could be assembled. Not only would such a directory help fight tax evasion, it would also reveal that while the living conditions of the majority are worsening, a small group of individuals and financial institutions has consistently taken advantage of high levels of public indebtedness. Hence, it would reveal the political nature of debt.

3) The socialisation of the banking system

The state should cease to borrow on financial markets, instead financing itself through households and banks at reasonable and controllable interest rates. The banks themselves should be put under the supervision of citizens' committees, hence rendering the audit on the debt permanent. In short, debt should be democratised. This, of course, is the harder part, where elements of socialism are introduced at the very core of the system. Yet, to counter the tyranny of debt on every aspect of our lives, there is no alternative.
• This article was amended on 10 June to say that Greece and Spain had been "harder hit" by the sovereign debt crisis, not "hardly hit".