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Gender: Male
Hometown: Detroit, MI
Member since: Fri Oct 29, 2004, 12:18 AM
Number of posts: 74,621

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The Fiscal Cliff: An Opportunity for a ‘Deceptive Economic Theory’


via truthdig:

The Fiscal Cliff: An Opportunity for a ‘Deceptive Economic Theory’
Posted on Jan 1, 2013

Economists predicted the fighting would last six months when World War I broke out in 1914. Wars were too expensive to be sustained, and the approaching fiscal cliffs would soon enough force the nations involved to negotiate a peace treaty. But they didn’t, because those governments simply printed more money, Michael Hudson writes in the first of a series at CounterPunch.

“Their economies did not buckle and there was no major inflation” says Hudson, a University of Missouri economist and president of The Institute for the Study of Long-Term Economic Trends (ISLET). “That would happen only after the war ended, as a result of Germany trying to pay reparations in foreign currency. This is what caused its exchange rate to plunge, raising import prices and hence domestic prices. The culprit was not government spending on the war itself (much less on social programs).”

But crucial lessons from that history has gone unremembered and untold in our current fiscal debates. The influence of the financial sector has encouraged mainstream economists to tell a story of economic limitations that suits the industry’s interests.

“Holding the bottom 99 percent in debt,” Hudson continues, “the top 1 percent are now in the process of subsidizing a deceptive economic theory to persuade voters to pursue policies that benefit the financial sector at the expense of labor, industry and democratic government as we know it.”

—Posted by Alexander Reed Kelly.

Michael Hudson at CounterPunch:

Wall Street lobbyists blame unemployment and the loss of industrial competitiveness on government spending and budget deficits – especially on social programs – and labor’s demand to share in the economy’s rising productivity. The myth (perhaps we should call it junk economics) is that (1) governments should not run deficits (at least, not by printing their own money), because (2) public money creation and high taxes (at lest on the wealthy) cause prices to rise. The cure for economic malaise (which they themselves have caused), is said to be less public spending, along with more tax cuts for the wealthy, who euphemize themselves as “job creators.” Demanding budget surpluses, bank lobbyists promise that banks can provide the economy with enough purchasing power to grow. Then, when this ends in crisis, they insist that austerity can squeeze out enough income to enable private-sector debts to be paid.

The reality is that when banks load the economy down with debt, this leaves less to spend on domestic goods and services while driving up housing prices (and hence the cost of living) with reckless credit creation on looser lending terms. Yet on top of this debt deflation, bank lobbyists urge fiscal deflation: budget surpluses rather than pump-priming deficits. The effect is to further reduce private-sector market demand, shrinking markets and employment. Governments fall deeper into distress, and are told to sell off land and natural resources, public enterprises, and other assets. This creates a lucrative market for bank loans to finance privatization on credit. This explains why financial lobbyists back the new buyers’ right to raise the prices they charge for basic needs, creating a united front to endorse rent extraction. The effect is to enrich the financial sector owned by the 1% in ways that indebt and privatize the economy at large – individuals, business and the government itself.

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FAA orders 737 inspections to prevent fuselage holes

WASHINGTON -- The Federal Aviation Administration is ordering $5 million in new inspections for Boeing 737s in response to a hole larger than a football that was torn in the roof of an aging Southwest Airlines plane during a flight in July 2009.

The order, which will be published Wednesday in the Federal Register, calls for repetitive inspections for cracking in the top of the fuselage of 109 planes in the 300, 400 and 500 series. Most of these models are flown by Southwest in the U.S.

The more-thorough inspections for those planes are projected to cost up to a total of $5.2 million, and additional repairs could cost $17,765 per plane, according to the FAA.

In a statement Monday, the FAA says the agency "always evaluates the effectiveness of our safety improvements." The latest directive is "to reduce risk further and assure continued safe operation," the agency says. ..............(more)

The complete piece is at: http://www.freep.com/usatoday/article/1800809?odyssey=mod|newswell|text|FRONTPAGE|s

John Cusack: What Is an Assange?

from HuffPost:

John Cusack

What Is an Assange?
Posted: 01/01/2013 7:28 pm

This week, I was proud to join the board and help launch the Freedom of the Press Foundation, a new organization which plans on crowd-funding for a variety of independent journalism outlets whose prime mission is to seek transparency and accountability in government. You can read about the first group of four organizations -- which includes the National Security Archive, MuckRock News, and The UpTake and WikiLeaks -- here.

Recently, I sat down with George Washington Law School professor and constitutional scholar Jonathan Turley and my close friend Kevin McCabe to discuss WikiLeaks' impact on transparency, the government's response, and the comparison to the Pentagon Papers whistleblower Daniel Ellsberg (also a co-founder of the Freedom of the Press Foundation).


John Cusack: Yes, in many ways, it's world-changing. Are Assange and Wiki leaks basically saying there's no one who'll do this journalism anymore, so we are compelled to do it? Or is he filling some other space, or trying to trump journalistic space. Legally, whats the difference? Why is he punished but the New York Times is not? They published his material.

I think you're saying it's such a vaster terrain than the Pentagon Papers that it may explain the frenzy -- when the publisher for the New York Times and reporters around Ellsberg release had to just say to themselves -- vietnam lies --all right, these guys are going to come after us -- Maybe we'll go to jail, maybe we won't. But they made the call, and they published it. Wikileaks is going after all governments all over the world.

Jonathan Turley: I think what Assange showed, more than any journalist or activist perhaps in history, is the sheer degree of duplicity and deception by this government and governments around the world. ................(more)

The complete piece is at: http://www.huffingtonpost.com/john-cusack/what-is-an-assange_b_2317824.html

An Ugly Deal: 4 Reasons the Fiscal Cliff Deal Is Worse Than It Looks

Campaign for America's Future / By Robert Borosage

An Ugly Deal: 4 Reasons the Fiscal Cliff Deal Is Worse Than It Looks
No one should be fooled. This is an ugly deal, with foul implications for the coming months.

January 1, 2013 |

Early this morning, the Senate passed the fiscal cliff deal by 89-8, a margin virtually guaranteeing that it will survive in the House. The deal has some good parts. It lets the Bush tax cuts expire on the wealthy, raises the estate tax marginally and increases taxes on capital gains and dividends a bit. Unemployment benefits are extended for a year. Tax boosts for the low paid workers – the child tax credit, expanded earned income credit, refundable tuition tax credits – are extended, if only for five years. Social Security, Medicare and Medicaid are not touched.

But no one should be fooled. This is an ugly deal, with foul implications for the coming months.

1. Setting Up the Next Extortion

The most ominous part of the deal is what was left out. The deal makes no provision for lifting the debt ceiling. It postpones the sequester (automatic cuts in domestic and military spending) for only two months. It is a smaller deficit reduction package than that originally sought by the president. It therefore sets up the right-wing House zealots to hold the economy hostage once more, while demanding deep cuts in public services (known as cuts in domestic spending), backed by a media frenzy about deficits. And while Social Security, Medicare and Medicaid escaped unscathed in this deal, they will be the prime targets in the coming debate.

2. Hiking Taxes for Working Americans; A Million Jobs Lost

By allowing the payroll tax cut to expire, every working American gets a tax hike of 2% of their income (up to about $113,000 in income). A worker making $50,000 a year will pay an extra $1,000 in taxes. Payroll checks will be cut. Belts will have to be tightened even more. That will lower demand, producing job loss totaling up to an estimated million jobs. (Taxes on the wealthy go up also, but those have only marginal effects on jobs). ...............(more)

The complete piece is at: http://www.alternet.org/ugly-deal-4-reasons-fiscal-cliff-deal-worse-it-looks

More news from the man who says you little people need to learn to love austerity......

(Reuters) - Ten senior Goldman Sachs Group Inc (GS) executives, including Chief Executive Lloyd Blankfein, were on New Year's Eve given stock pegged to earlier restricted awards worth tens of millions of dollars.

The executives, which also include Chief Operating Officer Gary Cohn, Vice Chairmen Michael Evans and John Weinberg, Global Head of Human Capital Management Edith Cooper, Chief of Staff John Rogers, General Counsel Greg Palm, Global Head of Compliance Alan Cohen, and Chief Accounting Officer Sarah Smith, got a total of 508,104 shares, according to multiple filings late Monday with the U.S. Securities and Exchange Commission.

These executives sold 245,838 of those shares to cover tax obligations, and held on to the rest, which were worth $33.1 million. The shares were sold at a price of $126.24 on Monday.

The shares were not awarded as 2012 compensation; rather, they were grants that were awarded in prior years. ...................(more)

The complete piece is at: http://finance.yahoo.com/news/goldman-execs-cash-26-8-204528798.html?l=1

Salon: Why 2013 is going to be awful

from Salon.com:

Why 2013 is going to be awful
Here's to a year of austerity, dysfunction, lousy Obama negotiations -- and no "Louie"

By Alex Pareene

The good news is 2012 is over and will never happen again. The bad news is, now it’s 2013. Here’s why I’m not holding out hope for a great year in politics:


It’s coming. Congress will obsess over crafting a long-term deficit deal no matter what happens with the tax rates and the sequester. In all likelihood, we’ll get regressive budget cuts at all levels of government, plus, for good measure, tax hikes not just on the rich but on working people. The well-funded “Fix the Debt” monsters will still demand massive cuts to Social Security and Medicare. Republicans are justifiably confident that they can use the debt ceiling to force more spending cuts less than a month from now. If all of this sinks the still-sluggish economic recovery, that’ll be just one more sign that we need to cut more, and “tighten our belts.” Plus the debt ceiling fight might just crash the world economy anyway.

Congress Isn’t Going to Do Anything

As historically unproductive as the 112th Congress was, there’s not much reason to expect more from the 113th. The Senate has gotten marginally more liberal and the House has gotten marginally less Republican, but the basic makeup of both is the same. It’s still the case that House Republicans have no incentive to compromise on anything, while Senate Democrats live to compromise.

It’s highly unlikely that we’ll see any meaningful action on climate change, or effective gun control legislation, or real improvements to Obamacare, or stronger financial regulation. If anything is done on immigration, it’ll likely be a tiny bill designed to help only a small sliver of the American undocumented population — a compromise to the compromise that was the Dream Act. .....................(more)

The complete piece is at: http://www.salon.com/2013/01/01/why_2013_is_going_to_be_awful/

Howard Fineman: Fiscal Cliffs: Congress Falls To New Normal

Howard Fineman
Editorial director, Huffington Post Media Group

Fiscal Cliffs: Congress Falls To New Normal
Posted: 12/31/2012 5:22 pm

This "fiscal cliff" thing? Get used to it. We now operate in a continuous "crisis" of pending governmental collapse.

The cliff we rushed to avoid New Year's Eve is just the first of many that we will face.

It's how we roll now. It's not how the framers envisioned it; not how the old textbooks described it in the chapter on "How a Bill Becomes a Law"; not how Norm Ornstein and Tom Mann wish it would be.

On one level, GBC, or "Government By Crisis," is just -- well, different. In that sense, it is not a big deal, just more neurotic, dramatic and exhausting than the way we've conducted business in the past. ..................(more)

The complete piece is at: http://www.huffingtonpost.com/howard-fineman/fiscal-cliff-congress_b_2390082.html

How FBI Monitored Occupy Movement

from Consortium News:

How FBI Monitored Occupy Movement
December 31, 2012

The FBI and other federal agencies coordinated with banks and local authorities in reacting to the Occupy Movement, which was put in the category of a domestic terrorist threat despite the group’s advocacy of nonviolence, Dennis J. Bernstein reports.

By Dennis J. Bernstein

Newly obtained secret FBI documents show that the Feds treated the Occupy Movement as a criminal terrorist threat even though the movement rejected violence as a tactic, a fact that the FBI acknowledges in the files.

Mara Verheyden-Hilliard, the executive director of the Partnership for Civil Justice Fund, which obtained the documents, discussed the FBI disclosures in an interview with me on Pacifica Radio’s “Flashpoints.”

DB: Before we get into some of the specifics talk a little bit about what motivated the request and your initial response to these heavily redacted documents that you did obtain.

MVH: The Partnership for Civil Justice Fund filed a series, or maybe more accurately a barrage of FOI (Freedom of Information) requests in the fall of 2011. At the point at which we could see, and the movement could see, that there was a coordinated crackdown against Occupy happening all over the country.

And we issued FOI demands against federal agencies including the FBI, Department of Homeland Security, the CIA and others, as well as against municipalities and police departments around the country. When we received these documents, which then have taken more than a year to obtain from the FBI, it was very clear to us and clearer, I think, to anyone reading these documents the very intense role that the FBI played in surveillance, mass surveillance operation against the peaceful Occupy Movement. ..................(more)

The complete piece is at: http://consortiumnews.com/2012/12/31/how-fbi-monitored-occupy-movement/

The Walmart Revolt: The New Year promises new strategies for old labor

from In These Times:

The Walmart Revolt
The New Year promises new strategies for old labor.

BY David Moberg

On Black Friday, the biggest shopping day of the year, bargain hunters trying to enter 1,000 Walmart stores around the country had to maneuver through rallies and picket lines. Tens of thousands of protesters turned out at the urging of a year-old worker association, Organization United for Respect at Walmart (OUR Walmart), to support roughly 500 workers who walked off their jobs that day, fed up with what they saw as Walmart’s inadequate pay, disrespectful working conditions and illegal punishment of workers who speak out. “I’m pumped up,” said Tyrone Parker, a night-shift stocker, as 250 protesters marched around a Walmart store in Chicago’s South Side. “Somewhere, somehow, down the line, it’s going to make a big difference.”

The nationwide action was one step in what promises to be a long march toward securing a voice for workers at the vehemently anti-union Walmart. But at a time of growing unrest among low-paid workers, the Walmart campaign could help the labor movement take a giant leap forward.

Walmart, the world’s largest private employer, heavily influences standards for vast swaths of the American economy, from retail to logistics to manufacturing. Over the past few decades, Walmart’s competitive power—a combination of size, technology and cut-throat personnel policies—has played a role in dramatically reducing American retail workers’ average income and unionization level (from 8.6 percent in 1983 to 4.9 percent in 2011). Left Business Observer economist Doug Henwood calculates that real wages for retail workers—who make up 10 percent of the workforce—have fallen nearly 30 percent since their 1973 peak, three times the drop of all hourly wages. Reversing that wage trend will be essential to revive the economy and reduce soaring inequality.

In taking on the retail behemoth, OUR Walmart—supported by the United Food and Commercial Workers (UFCW) and its labor-community alliance, Making Change at Walmart—is testing unconventional strategies. The organization is looking backward for inspiration, to neglected union strategies of the 1930s and socially disruptive actions of the civil rights movement, and forward, to the possibilities opened by the Internet and social media. ...............(more)

The complete piece is at: http://www.inthesetimes.com/article/14297/the_walmart_revolt

Finance Industry Has Pried into Every Sector of the Economy, and Has Ended Up Running the Whole Show

Naked Capitalism / By Michael Hudson

The Finance Industry Has Pried into Every Sector of the Economy, and Has Ended Up Running the Whole Show
Finance has moved to capture the economy at large, industry and mining, public infrastructure, and now even the educational system.

December 31, 2012 |

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyone’s taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid. Yet these are the programs that enjoy the strongest voter support. This fact has inspired what may be called the Big Lie of our epoch: the pretense that governments can only create money to pay the financial sector, and that the beneficiaries of social programs should be entirely responsible for paying for Social Security, Medicare and Medicaid, not the wealthy. This Big Lie is used to reverse the concept of progressive taxation, turning the tax system into a ploy of the financial sector to levy tribute on the economy at large. ..................(more)

The complete piece is at: http://www.alternet.org/economy/finance-industry-has-pried-every-sector-economy-and-has-ended-running-whole-show

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