Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. D&S Columnist John Miller on the AirOn February 16th, John Miller—economist, D&S collective member, and author of our regular column "Up Against the Wall Street Journal"—was a guest on the news program This Is Hell, broadcast on Saturday mornings on WNUR (89.3 FM) in Chicago. Besides discussing the current economic downturn and answering questions about his latest D&S feature article, Stormier Weather, John answered that week's "Question from Hell" ("The question we hate to ask, and you may hate to answer"): "Does it matter to the economy who the next president is?"Another highlight: John recalled hearing economist Hyman Minsky (the newly popular theorist of economic crises who died in 1996) say, "There's nothing wrong with macroeconomics that another depression wouldn't cure." The show's host, Chuck Mertz, is a great interviewer and quite well-informed. And we enjoyed his birthday shout-out to Kim Jong-il at the beginning of the show, and the nod to Lithuanian Independence Day. Listen to the podcast here. Labels: Chuck Mertz, John Miller, Kim Jong-il, Lithuania, recession, This Is Hell, WNUR Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Comcast Blocks Public Debate at FCC HearingThis just in from the folks at SavetheInternet.com (about the forum on net neutrality we announced in this earlier posting):WASHINGTON -- Comcast has admitted hiring people to fill up the limited number of seats at yesterday's Federal Communications Commission hearing at Harvard. More than 100 people were turned away when the event reached capacity. The public hearing was part of the federal agency's ongoing investigation into allegations that the cable giant is blocking consumers' access to legal Web traffic. Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Upcoming Event on Colombia and SPPOur last posting announced an event to be held tomorrow (Feb. 27th) on the assasination of Colombian labor activists. Here's the info again in case you missed it:Luciano Vasquez, Director General of the Escuela Nacional Sindical, will address these issues at a Global Policy Network forum on Wednesday, February 27th. Click here for further information and to RSVP. Here's some information about an event in the Boston area on related topics—this time with a bit more advanced notice: Alliance for Democracy/North Bridge chapter presents If you can't make it to this event, check out our recent article on the SPP and the articles we've run on the dangers of labor organizing in Colombia (listed at the bottom of our last blog posting. Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Murders of trade unionists go unpunished in ColombiaThis from an Economic Snapshot from the Economic Policy Institute is by Tony Avirgan:Colombia is the most dangerous country in the world for trade unionists. Over the past 21 years, more than 2,534 unionists have been assassinated. (The Escuela Nacional Sindical has documented 2,534 assassinations but says there are surely more that have not been reported.) See also several articles from Dollars & Sense about the dangers of organizing in the palm oil, cut flower, and bottled beverage industries in Colombia: Blood on the Palms, Oil-Palm Plantations on Afro-Colombian Lands, Stop Killer Coke!, Some Roses Don't Smell So Sweet, and "Organizing Rural Labor in Colombia" (D&S November/December 2006, available only in the print edition). Labels: assassinations, Colombia, unions, Uribe, US-Colombian Free Trade Agreement Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Washington's Double StandardAn editorial by Eduardo Porter in yesterday's New York Times points out the double standard in the U.S. government's response to the current financial crisis, vs. the remedies it has supported for the rest of the world: "Could this be the same United States that backed the International Monetary Fund’s get-tough strategy during the emerging-market crises in the 1990s—pushing countries from Asia to Latin America to slash government spending and raise interest rates to recover investors’ confidence and regain access to lending from abroad?" The IMF advocated—and indeed coerced—high interest rates and reductions in government spending. But the solution in the United States is lower interest rates and expensive stimulus spending. Porter cites Joseph Stiglitz (who was chief economist at the World Bank at the time that "structural adjustment" was forced on Asia and Latin America) as one economist who sees a double standard here. He cites Larry Summers, who was Treasury Secretary at the time of the 1990s financial crises, as one who denies a double standard.We agree with Stiglitz and Porter. As D&S collective member and blogger Larry Peterson noted in an earlier posting: In a shocking display of bad taste at best, and ignorance at worst, a Lehman Brothers economist referred to last week's Fed action as "shock therapy." Most of the readers of this blog will need no reminding that the same phrase was used to describe the structural adjustment programs that caused "lost decades" for much of the poor and developing world. The only difference, of course, is that "shock therapy" for them meant jacking up interest rates to stratospheric levels—and subsequent capital outflows which enriched many Western investors, while for us, it has meant a dramatic drop in interest rates. The source of this comment from the Lehman Bros. economist? The New York Times, of course. Labels: economic stimulus, IMF, interest rates, Joseph Stiglitz, Laurence Summers, shock therapy, structural adjustment Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). The Three Trillion Dollar WarJoseph Stiglitz and Linda Bilmes have updated their estimate of the costs to the United States (direct and indirect) of the wars in Afghanistan and Iraq, in an article in yesterday's Times of London. We reported on an early version of their original findings in our Economy in Numbers column in the July/August 2006 issue of D&S.Stiglitz and Bilmes's research on this topic have estimated the costs of the wars in three categories: (1) direct costs to the U.S. government (including Department of Defense spending, spending by the Veterans Administration, demobilization costs, and interest on debt incurred because of the wars); (2) economic costs that are not borne by the government (e.g. the lost economic contributions of reservists while they are deployed, or after they are dead or injured); and (3) larger macroeconomic costs to the U.S. economy as a whole (e.g. those resulting from increases in the price of oil, plausibly due to instability in the Middle East resulting from the war). According to the initial conclusions of their research (released in February of 2006; they didn't publish the study until later that year), the first two categories of costs (direct and indirect--not including the larger macroeconomic costs), could be conservatively estimated at between $937 billion and $1.5 trillion. They estimated the macroeconomic costs to the United States as "are potentially very large; possibly even a multiple of the direct costs," that is, possibly several trillion dollars beyond the costs to the government. The article in yesterday's London Times estimates the total costs more definitively at $3 trillion: From the unhealthy brew of emergency funding, multiple sets of books, and chronic underestimates of the resources required to prosecute the war, we have attempted to identify how much we have been spending - and how much we will, in the end, likely have to spend. The figure we arrive at is more than $3 trillion. Our calculations are based on conservative assumptions. They are conceptually simple, even if occasionally technically complicated. A $3 trillion figure for the total cost strikes us as judicious, and probably errs on the low side. Needless to say, this number represents the cost only to the United States. It does not reflect the enormous cost to the rest of the world, or to Iraq. The article goes on to estimate the costs to the UK: [T]he budgetary cost to the UK of the wars in Iraq and Afghanistan through 2010 will total more than £18 billion. If we include the social costs, the total impact on the UK will exceed £20 billion. (The added social costs to the UK are proportionately lower than those in the United States because the UK is a net exporter of oil.) Stiglitz and Bilmes estimate that the current Iraq war will cost ten times the first Gulf war, and one-third more than the Vietnam War. The Bush administration's cost estimates in advance of the war were of course drastically lower than the actual costs. Donald Rumsfeld estimated the costs at $50 to $60 billion, and was outraged when Bush's economic advisor Larry Lindsey said it would cost $200 billion. According to Stiglitz and Bilmes, Lindey downplayed his higher estimate by saying that "The successful prosecution of the war would be good for the economy." And shouldn't defense spending stimulate the economy? Shouldn't we expect, on Keynesian grounds, that all the money the government is lavishing on the war would stimulate the economy? Yet we are sinking into recession. In the upcoming (March/April) issue of D&S, Arthur MacEwan will answer this question in our "Ask Dr. Dollar" column. Labels: Afghanistan, Iraq, Joseph Stiglitz, Linda Bilmes, war Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). A Cartoon Sub-Prime PrimerA very funny cartoon introduction to the mortgage meltdown here. Just click on the forward arrow to see the slide show.Labels: cartoon, mortgage meltdown, subprime crisis Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). McCain in Bed with Lobbyists; Taxpayers Get ScrewedToday's New York Times quotes D&S author Bill Black, in the article critical of Sen. John McCain that is raising such a ruckus among the political commentariat—especially among the right-wing types who had been so down on McCain until recently.Black was deputy director of the Federal Savings and Loan Insurance Corporation when McCain, along with the rest of the "Keating Five" (Sens. Alan Cranston, Dennis DeConcini, John Glenn, and Don Riegle) tried to influence regulators on behalf of Charles Keating, chairman of the then-failing Lincoln Savings & Loan. Black was one of the regulators the senators tried to influence; Edwin J. Gray, chairman of the Federal Home Loan Bank Board, was another. Keating had donated to all the senators' campaigns, and McCain's wife, Cindy, whom the Times describes as "the heiress to a beer fortune" in Arizona, had "joined Mr. Keating in investing in an Arizona shopping mall." The collapse of the Lincoln S&L cost taxpayers approximately $3.4 billion; the S&L crisis as a whole cost taxpayers more than $124 billion, according to the General Accounting Office. (Side note: the scandal did not end the careers of any of the Keating Five; Cranston, DeConcini, and Riegle all served out their terms; Glenn and McCain both stood for re-election and won. Perversely, after his senate term ended, DeConcini was appointed by President Clinton to the the Board of Directors of the Federal Home Loan Mortgage Corporation, aka "Freddie Mac".) The fuss about the Times article seems to be mostly about the somewhat weakly sourced suggestion that McCain had an affair with a lobbyist named Vicki Iseman. But to our way of thinking, McCain's participation in the Keating Five scandal and the S&L crisis is still the bigger story. Here is what Bill Black told the Times: Some people involved think Mr. McCain got off too lightly. William Black, one of the banking regulators the senator met with, argued that Mrs. McCain’s investment with Mr. Keating created an obvious conflict of interest for her husband. (Mr. McCain had said a prenuptial agreement divided the couple’s assets.) He should not be able to “put this behind him,” Mr. Black said. “It sullied his integrity.” Black presents a full history of the S&L crisis in his book The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry. That crisis—much like the current banking crisis—was the result of banking deregulation and the "control fraud" that inevitably follows it, as Black's recent D&S article shows. Labels: banking regulation, Bill Black, deregulation, john mccain, Keating Five, savings and loan crisis, William Black, William K. Black Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Comcast in the Hot Seat at FCC Internet HearingLegal scholars, technology experts, entrepreneurs make the case for an open InternetCAMBRIDGE, Mass. -- On Monday, Comcast will be scrutinized by the Federal Communications Commission at a public hearing about the policies that will shape the future of the Internet. The Cambridge event will feature testimony from legal scholars, technology experts, entrepreneurs and industry representatives as part of the FCC's ongoing investigation into the blocking of legal content by the cable giant and other Internet service providers. WHAT: A Public Hearing on the Future of the Internet DATE: Monday, Feb 25, 2008 TIME: 11:00 a.m. to 4:00 p.m. WHERE: Harvard Law School, Ames Courtroom, Austin Hall 1515 Massachusetts Avenue, Cambridge, Mass. The SavetheInternet.com Coalition will be recording public testimony outside the hearing throughout the day. In January, the FCC launched an official inquiry in response to a complaint filed by Free Press and members of the SavetheInternet.com Coalition -- as well as thousands of letters from concerned citizens. The Associated Press first exposed Comcast last fall for actively interfering with peer-to-peer file-sharing networks. The company argues the FCC has no authority to prevent it from blocking Internet traffic on its networks. Comcast and other big phone and cable companies have been lobbying to kill Net Neutrality -- the longstanding principle that prevents them from discriminating against Web sites or services based on their source, ownership or destination. Last week, Reps. Ed Markey (D-Mass.) and Chip Pickering (R-Miss.) introduced the "Internet Freedom Preservation Act" (HR 5353) -- landmark legislation that firmly establishes baseline consumer protections in communications law to ensure the Internet is open and free from discrimination. "The value of the Internet comes from the millions of people and businesses who use it," said Marvin Ammori, general counsel of Free Press and lead author of the complaint that spurred the FCC's investigation. "We can't let the narrow interests of Comcast or any other network providers short-circuit the Internet's limitless economic and social possibilities. With stakes so high, the FCC must act quickly to shut down anti-competitive and discriminatory actions that put the open Internet in jeopardy." The hearing will open with statements from all five FCC Commissioners, followed by a policy panel, where Ammori and renowned legal scholars Tim Wu of Columbia Law School and Yochai Benkler of Harvard Law School will square off against representatives from Comcast and Verizon. "What we're going to see on Monday is a trial of the Internet," said Wu, who coined the term "Net Neutrality." "Comcast is in the docket, accused of crimes against the public interest, and we'll see how well they are able to defend themselves." The second panel will delve into the technological aspects of Internet traffic. It will feature, among others, several experts from the Massachusetts Institute of Technology; Scott Smyers of Sony Electronics; and Eric Klinker, chief technology officer of BitTorrent -- developer of the innovative file-sharing service targeted by Comcast. Vuze Inc. -- which filed its own complaint against Comcast with the FCC -- will demonstrate its technology for sharing high-definition video prior to the first panel. Outside the hearing, there will be a "technology fair" where online innovators will show off their products and services. "Now is the time to establish rules and regulations that will enable the evolution of the Internet," said Gilles BianRosa, CEO of Vuze. "A few powerful companies control the bandwidth through which consumers access Internet content, and through which innovative companies like ours deliver services. We support building an open Internet that fosters innovation for all." In addition to testimony from experts in the field, the FCC has invited the public to share opinions for the official record. The SavetheInternet.com Coalition will be recording public testimony outside the hearing throughout the day. And consumers across the country unable to attend the hearing are invited to record and upload their testimonial videos to www.vuze.com. Both the testimony recorded outside the hearing and the videos uploaded to the "FCC Channel" on Vuze will be submitted as a part of the official public record in this hearing. Experts are available for interviews prior to the hearing. To schedule an interview, contact Craig Aaron of Free Press at (202) 265-1490, x25 or caaron -at- freepress.net. View the FCC's official announcement and agenda here. ### The SavetheInternet.com Coalition is a grassroots, nonpartisan alliance of hundreds of groups, thousands of bloggers, and more than 1.6 million concerned Americans who have joined together to protect Internet freedom and Network Neutrality. No corporation or political party funds the coalition. Statements by the SavetheInternet.com Coalition are not necessarily endorsed by every participating organization. Learn more at www.SavetheInternet.com Labels: Comcast, FCC, Free Press, Internet, net neutrality, savetheinternet.com Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Homeless take to the airwaves tonightThe 11th Annual Homelessness Marathon, a 14-hour national radio dialogue on poverty and housing in the US, will take place Wednesday night to Thursday morning, February 20-21. Originating this year in Nashville, the Marathon is a live, outdoor, broadcasting event featuring homeless people, advocates for the homeless and call-ins from the public. A broadcast booth is set up outside, with open mics for people who are out on the street in Nashville that night.The Marathon does not raise money for charity. Its mission is to raise consciousness, by covering a broad range of topics, speaking with experts, taking calls from around the country, and above all, by putting homeless people on the air directly. It is the largest broadcast on homelessness, and indeed on poverty, in the United States. The Marathon will be streaming live on the program's website, or find a radio station near you that is carrying the broadcast. If you miss the broadcast, excerpts from this and previous year's marathons are posted at the program's website. Read a Dollars & Sense article about the Marathon, from our Jan./Feb. 2007 issue. Labels: affordable housing, Homelessness Marathon, poverty, radio Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Recession linked to workers' rightsDean Baker, co-director of the Center for Economic and Policy Research, writes on the AFL-CIO website about the relationship between the current economic recession and the suppression of workers’ right to organize over the past three decades. As unions have been attacked, wages have stagnated, and economic growth has become increasingly driven by bubbles -- the stock bubble in the 1990s and the housing bubble in the current decade. Baker calls for a return to wage-driven economic growth to pull us out of the recession and put us on a path toward long-term stability.Labels: AFL-CIO, Center for Economic and Policy Research, Dean Baker, labor organizing, recession Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Corporate SecurityBad government has been good business during the Bush administration. In 1999, nine companies had federal homeland security contracts. Today the total is over 33,000. "Much of what we've seen touted by vendors after 9/11," says security consultant Doug Laird, "is nothing more than a sales force trying to use 9/11 as the hype to get poorly advised folks to buy their products."But mismanagement and graft are just part of the story. Telecom companies' involvement in illegal government spying, outsourcing of torture to contractors, Haliburton constructed jails for mass detentions in the event of an "immigration emergency"---are just some examples of public/private partnerships in which the private sector has a special role in advancing abuses of government power. Matthew Rothschild's recent story in The Progressive reveals that the private sector now plays an integral role in the transformation of America into an "endemic surveillance society" (h/t Marshall Kirkpatrick). Today, more than 23,000 representatives of private industry are working quietly with the FBI and the Department of Homeland Security. The members of this rapidly growing group, called InfraGard, receive secret warnings of terrorist threats before the public does—and, at least on one occasion, before elected officials. In return, they provide information to the government ...In other countries, for decades, cooperation between US industries and government has gone much further. In Argentina, for example, the Ford Falcon automobile is emblematic (PDF) of government terror. In the 1970s, the Ford Falcon was the car of choice used by police, military and paramilitaries alike. Ford’s exclusive contracts with the Argentine security forces throughout the dictatorship eventually made the Falcon the single most recognizable icon of repression, one that clearly still resonates today. “Whenever a Falcon drove by or slowed down, we all knew that there would be kidnappings, disappearances, torture or murder,” reflects renowned Argentine psychologist and playwright Eduardo “Tato” Pavlovsky in a recent article. “It was the symbolic expression of terror. A death-mobile.”The terror has continued into the present: At noon on March 4, 2005, a green Ford Falcon pulled up next to a woman in Centenario, a municipality of Neuquén, in southern Argentina. Three men and a woman forced her into the car and then spent the next several hours threatening, torturing and mutilating her. The victim, whose name has been kept secret, was the wife of an employee at the Cerámica Zanon tile factory, one of the flagship worker-controlled enterprises that have sprung up in Argentina since the 2001 crisis. While the Zanon workers have successfully resuscitated the plant, they have also faced growing intimidation, as exemplified by this attack. The victim’s abductors released her with the message: “This is for Zanon. Tell them that the union will run with blood…. You’re all going to have to move into the factory because we’re going to kill all of you.”Ford in Argentina is just one example among many. Coca Cola, to name another, has a long, insidious history in Columbia of contracting paramilitary forces that have murdered and tortured union activists. In Latin America it is clear that these partnerships are part of an explicit war on organized labor and the culture that grew from developmentalist economies (PDF) in the 1950s and 60s. And a further crackdown on US labor may also be the promise of InfraGard. FBI Director Robert Mueller addressed an InfraGard convention on August 9, 2005.... “Those of you in the private sector are the first line of defense.”Outside the US, American corporations are in many ways independent entities not bound by US laws or by the laws of the countries where they operate. Increasingly, there is a class of American citizens who enjoy similar status within the US boarders. One of the advantages of InfraGard, according to its leading members, is that the FBI gives them a heads-up on a secure portal about any threatening information related to infrastructure disruption or terrorism.Worse, there are indications that this special class of citizens may be the enforcers of martial law, with permission to shoot to kill. One business owner in the United States tells me that InfraGard members are being advised on how to prepare for a martial law situation—and what their role might be. He showed me his InfraGard card, with his name and e-mail address on the front, along with the InfraGard logo and its slogan, “Partnership for Protection.” On the back of the card were the emergency numbers that Schneck mentioned.Rothschild has substantial confirmation of this report from two other sources, as well. Often using unreliable informants and guilt by association, the mid-20th century US government placed large numbers of its citizens on the Security Index, which qualified them to lose their rights and be rounded up and jailed en masse, upon declaration of martial law. Even if the FBI found that a subject did not qualify for the Security Index, it was nearly impossible to have one's name removed from the lists of those to be imprisoned without charges—unless one agreed to inform on others. The canceled Security Index cards on individuals taken off the Index after 1955 were retained in the field offices. This was done because they remained “potential threats and in case of an all-out emergency, their identities should be readily accessible to permit restudy of their cases.” These cards would be destroyed only if the subject agreed to become an FBI source or informant or "otherwise indicates complete defection from subversive groups."The odd twist of InfraGard is to recruit informants through the promise of placing them above the law rather than through threatening them with a possible loss of their rights. At least through the mid-1960s, predominantly working class Klansmen enjoyed relative impunity as they murdered, bombed, burned, raped, shot and beat Blacks and their allies to maintain a social and economic order that kept them---the violent whites---poor as well. Today, it seems the mantle of violence with impunity is being handed to an owning class elite. To join, each person must be sponsored by “an existing InfraGard member, chapter, or partner organization.” The FBI then vets the applicant. On the application form, prospective members are asked which aspect of the critical infrastructure their organization deals with. These include: agriculture, banking and finance, the chemical industry, defense, energy, food, information and telecommunications, law enforcement, public health, and transportation....It's the Good Ol' Boys Network 2.0---enlisted for the class war. Look, they're even on Facebook. [Cross-posted on Hungry Blues.] Labels: argentina, coca cola, columbia, domestic spying, fbi, ford, haliburton, infragard, klan, martial law Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Some Roses Don't Smell So SweetBefore you order those overpriced roses for your Valentine's Day sweetie, consider a few disturbing facts from our friends at US/LEAP:
OK, so what should you buy your loved ones? Fair Trade certified chocolate, of course. Some of our favorites include: Equal Exchange Art Bars And if flowers are still the thing, you can now get them from Fair Trade certified sellers. Labels: chocolate, Colombia, economic alternatives, fair trade, flowers, labor, US/LEAP, worker rights Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Long-term unemployment bad enough to warrant actionThe latest Economic Snapshot from the Economic Policy Institute.The White House has demanded that legislators not extend unemployment benefits as part of the upcoming economic stimulus package, despite the fact that the latest jobs report from the Department of Labor shows that long-term unemployment is already a problem. For a clear understanding of the how the present situations compares to the past and what can reasonably be expected by the end of the year, read this special Economic Snapshot. Labels: Economic Policy Institute, economic stimulus, unemployment, unemployment insurance Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
