Billionaires Against Regulating Finance (B.A.R.F)

by Dollars and Sense

A public service announcement on behalf of America's most oppressed minority: billionaires.



FOR IMMEDIATE RELEASE - September 29, 2009
Contact: Beemer N. Mazzerati (aka Steve Schnapp)
(857) 277-7868 sschnapp@faireconomy.org

"Billionaires Against Regulating Finance" to Face Off with Protesters in Boston's Financial District Day of Action set for Thursday, October 1, 2009

Boston, MA, September 29th, 2009 - In response to the so-called "March Against a Jobless Recovery" planned for Thursday, October 1, 2009, the Billionaires Against Regulating Finance (BARF), an activist group for the wealthy and the corporate elite, will protest the march in full suit and gown at Bank of America in Boston's financial district between 4:30 and 5:30 pm.

According to the event organizers, "The federal government gave hundreds of billions of taxpayer dollars to bail out big businesses, but corporations, in turn, are not creating the jobs that were promised."

BARF members strongly oppose the claim of a "jobless recovery." Stockson Bond, board chairman of investment banking firm, Goldin Racks, remarked, "Of course jobs have been created. Have you seen the number of foreclosed homes in the US? There must be hundreds, maybe even thousands, of people needed to print and post foreclosure yard signs. And don't forget about career counseling. That field is booming with the unemployment rate hovering at 10 percent!"

Gree D. Bastid, chief executive of Smells Fargo, noted, "To the extent that job creation is slower than preferred by the marchers, BARF's message is clear: Stop Whining! The fact is, we couldn't possibly create millions of jobs AND get our huge, hard-earned bonuses. Keeping our top talent is number one. It's all about priorities."

The Billionaires are prepared to defend corporate executives against the marchers' unfair claim that a recovery for Wall Street does not equate to a recovery for Main Street. Beau Ness, Vice President of Banking on America, fumed, "I resent the idea that these people don't consider Wall Street a part of Main Street. Complex derivatives and credit default swaps are as vital to average Americans and the economy as the neighborhood grocery or hardware store!"

BARF commends Treasury Secretary Timothy Geithner's recent action at the G-20 summit in Pittsburgh, where he rejected French President Nicolas "May-As-Well-Be-Communist" Sarkozy's outrageous proposal to place hard caps on financial executives' compensation. A triumphant Mr. Ciyo crowed, "Earlier this year, Tim talked tough to the American people about our taxpayer-funded bonuses. But we knew that when the rubber hit the road, he'd be with us 100 percent. It feels great to see our political 'investments' paying off."

$$$

Labels: BARF, billionaires, financial activism, jobs

 

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9/30/2009 11:25:00 AM 0 comments

 

One Year After Lehman (C. P. Chandrasekhar)

by Dollars and Sense

From NewsClick.in: P. Chandrasekhar is a Professor at the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University. He has co-authored 'Crisis as Conquest: Learning from East Asia' and is a regular columnist for Frontline Magazine and Businessline financial daily.

In the video below Prof. Chandrasekhar talks about the global financial system 'a year after Lehman' and the September G-20 meetings.

Labels: C. P. Chandrasekhar, financial crisis, Lehman Brothers

 

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9/28/2009 12:13:00 PM 0 comments

 

Two Takes on Acorn

by Dollars and Sense

Here are two takes on the Acorn scandal/bashing—from the Yes Men (in the Washington Post) and from Bill Fletcher, Jr. (at Black Commentator).

Congress Went After ACORN. Big Business Must Be Next!

By Jacques Servin and Igor Vamos
Sunday, September 27, 2009

We are the Yes Men, two guys who dress up as powerful businessmen, propose horrible things to audiences of actual powerful businesspeople and film them cheerfully applauding our most outrageous—and often illegal—ideas.

In our new film "The Yes Men Fix the World," we posed as Dow Chemical representatives at a big 2005 banking conference where we said that, clearly, any number of human deaths is acceptable as long as a project is extremely profitable. A life-size golden skeleton made sure the message hit home. Instead of recoiling in horror, most of the bankers simply applauded. One chief executive said he was interested in working with us, and a senior manager at a financial technology firm said he found the idea "refreshing."

In 2006, we posed as Halliburton reps at an insurance conference on Amelia Island, Fla. There we unveiled the "SurvivaBall," a grotesque suit six feet in diameter, made of nylon and inflated by two small computer fans, which we said would keep corporate managers safe from the climate calamities that they had helped cause. Lawyers at the conference, who represented some of the most powerful American companies, had a few questions: How much would it cost? Could it be made more comfortable? Might it work in a terrorist attack?

The art of impersonation for political purposes is catching on. Recently, a couple of conservative provocateurs dressed up as a low-rent prostitute and a pimp and visited the offices of the community organizing group ACORN (an organization we briefly featured in our film), where they got some advice about how to buy a house and start a brothel.

Like ours, those antics were widely covered in the mainstream media. But in a new twist, Congress got involved, voting to cut off ACORN's federal funding. In an even more exciting turn of events, the House legislation intended to defund ACORN is written so broadly that it would similarly cut off money to "any organization" indicted for various forms of lawbreaking, and any organization with employees or contractors who have been indicted on certain charges.

This gives us great hope. Our corporate targets, unlike ACORN, have not yet been punished. If we had known that all it takes is pimp and hooker outfits to spur such ambitious legislation, we would have bought some ages ago! Now, thanks to this case, perhaps the many companies whose reps we've filmed vigorously nodding their heads at and asking for more details about our immoral and criminal proposals will finally see justice.

If the idiocy of a few ACORN workers can lead Congress to defund that organization, surely lawmakers will move to rescind the bailout cash given to the banks whose employees seemed ready to go along with our depraved schemes, and whose reckless gambling with other people's money helped create the foreclosure crisis—precisely the crisis that ACORN and other agencies are trying to help poor and working-class Americans cope with.

Surely such action will set a shining example for years to come and will save society from the most criminal tendencies in our midst.

Won't it?

Jacques Servin and Igor Vamos, also known as Andy Bichlbaum and Mike Bonanno, respectively, are the Yes Men, a culture-jamming activist group. Their new documentary, "The Yes Men Fix the World," opens next month in the United States.


Whither ACORN?
By Bill Fletcher, Jr.

Sometimes an organization is faced with a crisis of such proportions
that it calls into question its integrity and relationship with the
public. In the corporate world, one can think of the airline ValuJet
which, after the disastrous crash into the Everglades of one of its
planes, so lost the confidence of the public that it had to shut down;
remake itself; and brand itself with a new name: AirTran.

It is important to separate the attacks on ACORN which it is receiving
from the political Right from the actual content of the organization?s
problems. Let?s face it: any progressive organization, particularly
one as significant as ACORN, must assume that it will be attacked by
the political Right. In fact, the Right is very clear about that. So,
the fact of an attack from the Right should come as no surprise.

Something is very wrong in ACORN and, unfortunately, the leadership of
the organization does not seem to recognize the depth of the problem.
The alleged embezzlement of nearly one million dollars by Dale Rathke,
the brother of ACORN founder and long-time chief organizer, Wade
Rathke, sent shockwaves throughout the progressive movement and
foundation community. It was not simply the fact of the alleged theft,
but the reported manner in which this had been covered up such that
much of the leadership, not to mention the membership, apparently had
no knowledge of the circumstances. The matter was handled much like a
family embarrassment rather than as a legal and ethical challenge.

Now we are made witness to one of the most bizarre circumstances I can
remember. Right-wingers, with a clear objective of discrediting ACORN
largely due to its voter registration work among people of color,
undertook a mission to display ACORN?s alleged corruption to the
world. It does not matter, to a great degree, that in many places that
these right-wingers showed up that they were thrown out. What matters
is that they captured on camera ACORN employees allegedly offering to
assist undercover personnel in the establishment of a BROTHEL!!!

Unless those ACORN employees were plants within ACORN, there is an
obvious question: what could those employees possibly have been
thinking about? What level of training and supervision, not to mention
ethics, were they guided by such that they would think that this was
permissible? On top of all of this, what sort of basic common sense
did they lack that they would not GUESS that this might have been a
set up?

The response from the ACORN leadership to this latest incident has
been to terminate the employees and insist that this is
unrepresentative of the work of ACORN. While I know that this is not
representative of the work of ACORN, such an answer is insufficient at
best. Leaving aside other allegations targeted at ACORN, the question
is what is going on in the leadership such that such actions can
unfold?

From the outside it appears that at least two things are operating
within ACORN. The first is arrogance within a part of the leadership.
That fact that a clique within the leadership would attempt to shroud
an alleged theft and treat it as if it were a personal matter displays
a significant level of lack of accountability. The extent of the
alleged embezzlement was such that criminal prosecution should have
been entertained immediately. Yet this clique kept this silent and did
not discuss the ramifications for the entire organization.

The second thing that appears to be operating is that the organization
is not operating, at least in a functional manner. In other words,
there is a systemic lack of accountability and training. On the one
hand, in the face of the right-wing provocation, some cities
immediately recognized that something was up, but, for reasons
unknown, this was not communicated to the entire organization. Worse,
that some employees when actually confronted with an illegal business
proposition did not have the proper awareness of the consequences of
giving advice on an illegal matter shows, at a minimum, poor judgment.

The subsequent attacks on ACORN by the Right, therefore, have been
entirely predictable. ACORN has opened itself up and invited the enemy
in. Yet they now wish for all liberals and progressives to rally
around them in their defense yet their leadership only offers an
anemic explanation of the depths of this crisis.

Should ACORN dissolve? Absolutely not. ACORN has been an essential
part of the progressive movement for nearly forty years. That said,
neither should progressives act as if the extent of the crisis in
ACORN can be ignored. Certainly the attacks on ACORN by the Right are
both politically and racially motivated. But that does not mean that
ACORN can afford to act as if nothing is new under the Sun. In many
other countries, in the face of such scandals the entire leadership
would resign without a moment?s second thought. Yet here, in the face
of repeated, humiliating mistakes, the leadership seems to think that
relatively minor changes can remedy the extent of the problem.

What can ACORN do?

1. Bring in a crisis management team to take over the day-to-day
operations of ACORN: The current managing leadership should be either
suspended or given other duties while a new management team is brought
into ACORN to assess the extent of the organization?s problems and
INTRODUCE changes in the day-to-day operations of the organization.
This should include an evaluation of current staff and supervisors,
financial accountability, ethics and other aspects of organization. A
new organization operating system needs to be put into place to ensure
staff accountability, including in the hiring process. Such a team
would be on temporary assignment to ACORN to assist in the rebuilding
of the organization.

2. Leadership retreat: One part of the work of the crisis management
team should be the organizing of a leadership retreat of the current
national leadership plus any additional key leaders from chapters
around the country. Such a retreat should aim at evaluating the nature
of the current crisis in the organization; what has worked; what has
failed; and new strategic directions. New leadership elections should
be organized.

3. An apology to the friends, supporters and members of ACORN: To be
honest, I do not want to hear anything more about how the Right is
attacking ACORN. What I do want to hear is how sorry and self-critical
the ACORN leadership is about the current state of affairs and how
they, in fact, let down the members, supporters and friends of the
organization.

I know what the objectives of the Right are: they want to eliminate
any and all evidence of a progressive movement in the USA. What we do
not have to do is make their job any easier.

BlackCommentator.com Executive Editor, Bill Fletcher, Jr., is a Senior
Scholar with the Institute for Policy Studies, the immediate past
president of TransAfrica Forum and co-author of, Solidarity Divided:
The Crisis in Organized Labor and a New Path toward Social Justice
(University of California Press), which examines the crisis of
organized labor in the USA.

Labels: Acorn, Bill Fletcher Jr., The Yes Men

 

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9/28/2009 11:23:00 AM 0 comments

 

The G20 Must Wake America Up

by Dollars and Sense

A column from today's Guardian by Kevin Gallagher, a research fellow at the Global Development and Environment Institute at Tufts University.

We haven't done enough to fix the global financial crisis – or prevent the next one. The US has been asleep at the wheel

Kevin Gallagher
guardian.co.uk,
Thursday 24 September 2009 18.00 BST

When President Barack Obama hosts the G20 summit in Pittsburgh today, world leaders should send the United States a wake-up call to re-invigorate its stimulus efforts, get serious about financial reform and pass climate change legislation.

In London in April the G20 agreed to co-ordinate fiscal stimulus packages, support the world's poorest economies, reform global finance and avoid depression-style protectionism. On top of all that, they promised not to be diverted by such tasks when it came to putting together a serious global climate change treaty by year's end.

On many of these fronts the US is asleep at the wheel.

On the bright side, the US did pass a significant fiscal stimulus package. Despite lots of fear mongering to the contrary, the US also avoided anything close to Smoot-Hawley era trade protections. For all the commotion over tires and "Buy America" provisions, such measures are miniscule relative to the 50% increase on thousands of tariff lines during the depression. And for the most part these moves have been within the bounds set by our trade treaties.

Such efforts by the US and other G20 nations seem to be working. The IMF estimates that fiscal stimulus from the G20 is close to 2% of global GDP in 2009 and will be 1.6% in 2010. And despite minor and necessary deviations from "free" trade, the IMF saysglobal growth will contract by 1.4% in 2009 but expand by 2.5% in 2010 if the world doesn't begin exiting from their stimulus packages.

That's the good news. Alarming is that most stimulus packages don't include provisions that will benefit the world's poor. A new report by the International Labour Organisation estimates that approximately 222 million workers across the globe could slide into extreme poverty (living on less than $1.25 per day) if poorer nations aren't included in the global response to the crisis.

The G20 did commit to granting the IMF $500bn in capital for lending to those in need. However, the IMF's draconian conditions have kept all but the most desperate nations from opting for the funds. The World Bank pledged $100bn but has delivered less than one-third of those commitments, says a G20 scorecard by Jubilee USA, a development group.

The UN commission of experts on the financial crisis called for 1% of stimulus funds to be earmarked toward poorer countries this June. This goal should be enshrined in Pittsburgh.

Just as important is seeing to it that a crisis like this doesn't happen again. It has now become clear that unregulated financial markets are inherently unstable. When the economy seems to be in good shape, market participants and regulators tend to enter a dream world where they take on ever more risk – more risk than underlying assets can cover. That leaves us prone to panics that can quickly turn into crises.

Despite this recognition, little real regulation has materialised. And as we turn over in the night, Wall Street has re-instituted mortgage-backed securities and begun mimicking such instruments for life insurance policies and patents.

At the global level, the US won't seriously discuss the fact that reliance on the currency of a dominant power that borrows too much wreaks havoc on the world. Since little has been done, developing nations still have the incentive to accumulate reserves and thus accentuate global imbalances where the global poor loan to the rich.

On climate change, Jubilee's G20 assessment puts the amount of carbon-friendly stimulus dollars at $180bn. This is welcome, but without real action by the US and China – who account for 46% of global carbon dioxide emissions – such funds will go wasted.

China won't act unless the US does, and the Obama administration can't act if Congress doesn't. Congress must be on board before the administration goes off to Copenhagen to negotiate a global climate treaty, less they suffer the same fate as the Clinton administration in 1997 when it negotiated the Kyoto protocol without the advice and consent of Congress. That blunder lead to no deal at home and little action globally.

If G20 leaders help the US wake up and smell the coffee on the hard realities of the global economic crisis, they can help shame the US into getting back on a more sustainable course. We're dreaming if we think we've done enough to fix this crisis and prevent the others that loom.

guardian.co.uk © Guardian News and Media Limited 2009

Labels: economic crisis, G20, G20 summit, global economic crisis, Kevin Gallagher

 

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9/24/2009 02:33:00 PM 0 comments

 

HR Manager Beaten to Death by Angry Workers

by Dollars and Sense

From CNN/Asia. Yikes!

By Harmeet Shah Singh | Wednesday, September 23 2009

NEW DELHI, India (CNN) -- Angry workers beat to death a human resources vice president after he laid off 42 employees at an auto-parts manufacturing company in southern India, police said Wednesday.

Roy George was vice-president for human resources at Pricol, the auto-parts company.

Some four to five workers, belonging to a union not recognized by the company, barged into his office and beat him up with iron rods, said N. Kannan, a police superintendent of Coimbatore in Tamil Nadu state.

George, 47, died from his head injuries Tuesday, Kannan told CNN.

Police have arrested nine people and are expected to round up more.

Last year the Indian head of an Italian company died after allegedly being beaten by a mob of sacked employees.

More than 60 people were charged with the murder of the chief executive of Graziano Transmissioni near New Delhi.

Earlier this month, India's Jet Airways had to cancel hundreds of flights after pilots struck work over the sacking of two of their colleagues in August.

Companies in the South Asian nation, despite its rapid economic growth in recent years, have often been faced with tough labor issues because of archaic laws and company policies on hiring and retrenchment.

Business consultants in India blame such labor standoffs on what they call lack of transparency in retrenchment or layoff policies.

Hiring and firing conditions are often not explained to workers by their companies, said Rajeev Karwal, founding-director of Milagrow Business and Knowledge Solutions.

Issues could spiral out of control if the businesses and bureaucrats are seen in a "corrupt nexus" by the employees seeking reprieve from labor authorities, he said.

Labels: human resources, India, layoffs

 

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9/24/2009 01:37:00 PM 0 comments

 

The Staley Lockout (Thad Williamson)

by Dollars and Sense

Second in a series of blog posts by former D&S collective member Thad Williamson, who is teaching a course on social movements at the University of Richmond, where he teaches at the Jepson School of Leadership Studies. This post is on a 2009 book on the struggles of workers at A.E. Staley Company in Decatur, Ill., starting with a lock-out in 1993. The lessons the authors draw are particularly relevant today, as Richard Trumka assumes leadership of the AFL-CIO. —CS

What happens when a union engaged in a strike or lockout shows creativity, spunk and courage, has an activist-minded membership willing to do what it takes to get the message out, shows a willingness to begin to mend long-standing racial distrust among workers, and has the solidarity to stick together and stick it out for months and even years?

That's the question addressed by Steven Ashby and C.J. Hawking's rather remarkable book, Staley: The Fight for a New American Labor Movement, published earlier this year by University of Illinois press. Ashby and Hawking provide an insider's account of the two and a half year struggle of workers at A.E. Staley Company in Decatur, Illinois, a subsidiary of multinational giant Tate and Lyle and a producer of corn syrup and starches. After years of worsening safety standards and increasing worker unrest at Staley, including an effective work-to-rule campaign, management locked out its union workers in June 1993. The bitter conflict would not be resolved for two and a half years.

What makes this book uniquely valuable is that Ashby and Hawking take us deep inside the internal life of a labor union local. Ashby and Hawking were personally involved in the struggle as members of solidarity committees, and literally lived the events they describe. Yet while Ashby and Hawking present the union's efforts in a positive, at times heroic light, they manage to remain objective and honest in assessing the union, its leadership, and its shortcomings. The result is a book with the level of detail and color you might expect from a top-notch journalist and a solid analytical perspective; or to put it another way, this book marks a landmark of labor scholarship and should and will be read by anyone serious about understanding the predicament of the labor movement in the United States.

As Ashby and Hawking recount, the battle with management at Staley began well before the actual lockout. After acquiring the plant in 1988, Tate and Lyle implemented a rotating 12-hour shift work schedule, while systematically gutting safety practices and placing workers with decades of experience under young supervisors who often had lacked any understanding of the nuts and bolts of production. The company's systemic neglect lead to deadly consequences in 1990 when a worker was gassed to death in a corn starch processing tank.

That incident, combined with increasing evidence that Tate & Lyle intended to bust the union, led workers to engage in a prolonged work-to-rule action, under the mentorship of union consultant Jerry Tucker. The union also brought in well-known consultant Ray Rogers to launch a corporate campaign. Matters come to a head in June 1993 when workers staged a safety stand-down in response to yet another neglected safety crisis. Shortly thereafter, Staley locked out its workers.

What happened next is the most inspiring part of this story. Highly mobilized union activists (including several workers who had been fired in the run-up to the lockout) engaged in a variety of activities designed to get the word out about the strike, both in Decatur, throughout the Midwest, and eventually nationally. Workers began producing a newspaper with ongoing updates on the dispute. A documentary film, "Deadly Corn" was produced in which workers plainly but graphically aired their grievances with the company, with particular attention to safety issues. A group of activists termed "Road Warriors" traveled by car throughout the Midwest to spread the word about the lockout to other unionists and potential supporters. Significant outreach was made to religious leaders, and crucial steps were taken to begin overcoming the long-standing racial divide within the union and incorporate African-American workers into the union leadership.

Missteps were made as well. The first iteration of the corporate campaign designed by Rogers was a bust; Rogers pushed for targeting State Farm insurance because of its financial ties to Archer Daniels Midland which in turn owned shares in Tate and Lyle. But those ties struck even union supporters as too tenuous and complex to build a compelling public case on. Later on, the authors suggest that union local president Dave Watts, described in largely positive terms overall, should have more aggressively embraced nonviolent civil disobedience strategies, particularly in an October 2004 march in Decatur when national support for the union was at a peak.

But the authors place far greater blame on the higher levels of organized labor for not matching the local's committed activism. Officials in the United Paperworkers International Union of which the Staley local was a part offered at first lukewarm support, then later actively sided with dissident unionists who wanted to accept the company's terms. Worse, at the crucial moment in the fall of 1995, the UPIU literally pulled the plug on a corporate campaign to get Pepsi (like Miller Beer before it) to drop Staley as a supplier.

National-level labor leaders fare no better. In of the book's most memorable scenes, Staley workers made a pilgrimage to AFL-CIO executive council meetings in Bal Harbour, Florida in February 1995, confronting stunned national leaders inside the luxurious Sheraton Hotel. The demands by Staley workers for greater support for their action became a key factor in John Sweeney's successful bid to displace Lane Kirkland as AFL-CIO president that year. But while Sweeney made extravagant promises to commit resources to the Staley fight during that campaign, after winning election in fall 1995 no concrete steps were taken by Sweeney to give Staley a reasonable chance of winning.
In the end, the Staley lockout was a crushing defeat for the union local. With the corporate campaigns called off and no help from higher levels of labor in sight, a majority of the union decided to pack it in. In December 1995, a 56% majority of the union approved a contract with no significant concessions from management and that provided for a dramatic reduction in union jobs. The majority of the locked-out workers in fact never went back into the plant, and many of those who did go back initially left within the first month.

The conclusion of this epic struggle is a kick in the teeth for anyone who reads this book and comes to sympathize with the many union leaders and activists the authors portray. But Ashby and Hawking's larger purpose is to provide a kick in the rear for organized labor as a whole. The workers at Staley and their many community supporters demonstrated creativity, commitment and courage over a prolonged period of time, but when they sought support from higher levels of the union hierarchy, they came home empty-handed.

Fourteen years later, the Sweeney era has run its course and Richard Trumka has just taken over as AFL-CIO president. This is ironic, for it was Trumka whom many Decatur unionists blamed for not delivering on the federation's promises of support. To his credit, Trumka traveled to Decatur to meet with angry union activists six months after the lockout ended, where he argued that the AFL-CIO's hands were tied because of the lack of support from UPIU for the lockout.

No one can doubt Trumka's commitment to organizing. Nor can anyone doubt that the rules of the game continue to be stacked against organized labor in ways which make winning conflicts like Staley extremely difficult. The key strategic challenge facing Trumka's new regime will be how much effort to devote to trying to change the rules of that game, how much effort to devote to supporting direct actions of worker militancy, and how much effort to commit to broader union movement goals, such as achieving health care reform.

It's fruitless to argue in the abstract about which of those goals should be the top priority. What's not fruitless is spending time reading Staley, drawing on both the positive and distressing lessons this book provides. The book beautifully illustrates the difficulties involved when workers challenge multinational corporations, shows how one union was able to muster sufficient tangible and moral support from a wider community to keep such a challenge going over a period of years, and unsparingly indicts modes of union leadership that simply forgot what grassroots solidarity is all about.

Near the end of Staley, union activist Gary Lamb says "I want the words 'Remember Decatur' to haunt Sweeney and Trumka."
Maybe they still will.

—Thad Williamson

Labels: AFL-CIO, labor, Richard Trumka, Staley, Thad Williamson

 

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9/24/2009 12:20:00 PM 0 comments

 

Energy Xtremism (Michael Klare)

by Dollars and Sense

From TomDispatch, with intro from Tom Engelhardt:

Talk about roller-coaster rides: the price of a barrel of crude oil, which was still under $20 the week after September 11, 2001, made it to $147 in July 2008, just before the global economic meltdown, only to hit a low of $32.40 early this year. And yet, in recent months, hardly noticed, it's crept back above $70—and this with "recovery" barely on the horizon and global industrial demand still muted at best. And that's the good news.

Surely, as economic activity picks up, oil demand will rise and prices will resume their upward march. And don't be fooled by a spate of announcements, as recently in the Gulf of Mexico, of new oil discoveries, as Michael Klare, author of the invaluable book Rising Powers, Shrinking Planet, indicates. If there is a surge in industrial demand globally, recent discoveries will have little impact on the growing supply of energy.

"It's still the one," energy expert Daniel Yergin says of oil in the current issue of Foreign Policy magazine. Yergin, author of a classic history of oil, The Prize, claims that petroleum will dominate the global energy equation for decades to come. Look elsewhere and you can find sprightly scenarios for energy futures based on climate-friendly renewable energy sources. As Klare makes painfully clear, however, there's a third way—and that is distinctly not good news. We are going to enter an age of Xtreme energy, he suggests, and the last-ditch efforts to keep our world on its normal course are likely to devastate the environment, accelerate climate change, inflict widespread pain, and create global conflict. It's not a pretty picture.
—Tom

The Era of Xtreme Energy
Life After the Age of Oil
By Michael T. Klare

The debate rages over whether we have already reached the point of peak world oil output or will not do so until at least the next decade. There can, however, be little doubt of one thing: we are moving from an era in which oil was the world's principal energy source to one in which petroleum alternatives—especially renewable supplies derived from the sun, wind, and waves—will provide an ever larger share of our total supply. But buckle your seatbelts, it's going to be a bumpy ride under Xtreme conditions.

It would, of course, be ideal if the shift from dwindling oil to its climate-friendly successors were to happen smoothly via a mammoth, well-coordinated, interlaced system of wind, solar, tidal, geothermal, and other renewable energy installations. Unfortunately, this is unlikely to occur. Instead, we will surely first pass through an era characterized by excessive reliance on oil's final, least attractive reserves along with coal, heavily polluting "unconventional" hydrocarbons like Canadian oil sands, and other unappealing fuel choices.

There can be no question that Barack Obama and many members of Congress would like to accelerate a shift from oil dependency to non-polluting alternatives. As the president said in January, "We will commit ourselves to steady, focused, pragmatic pursuit of an America that is free from our [oil] dependence and empowered by a new energy economy that puts millions of our citizens to work." Indeed, the $787 billion economic stimulus package he signed in February provided $11 billion to modernize the nation's electrical grid, $14 billion in tax incentives to businesses to invest in renewable energy, $6 billion to states for energy efficiency initiatives, and billions more directed to research on renewable sources of energy. More of the same can be expected if a sweeping climate bill is passed by Congress. The version of the bill recently passed by the House of Representatives, for example, mandates that 20% of U.S. electrical production be supplied by renewable energy by 2020.

But here's the bad news: even if all these initiatives were to pass, and more like them many times over, it would still take decades for this country to substantially reduce its dependence on oil and other non-renewable, polluting fuels. So great is our demand for energy, and so well-entrenched the existing systems for delivering the fuels we consume, that (barring a staggering surprise) we will remain for years to come in a no-man's-land between the Petroleum Age and an age that will see the great flowering of renewable energy. Think of this interim period as—to give it a label—the Era of Xtreme Energy, and in just about every sense imaginable from pricing to climate change, it is bound to be an ugly time.

Read the full article.

Labels: energy, Michael Klare, peak oil, Tom Engelhardt, TomDispatch.com

 

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9/23/2009 04:06:00 PM 1 comments

 

Emphasis on Growth Is Called Misguided

by Dollars and Sense

In today's NYT business section; reports on the study Joseph Stiglitz and Amartya Sen have put out, sponsored by Nicolas Sarkozy. The Times is somewhat more respectful than one might have expected, e.g. in this sentence: "In millions of households still grappling with joblessness and the tyranny of bills, signs of health served up by the traditional economic indicators seem disconnected from daily life." Hat-tip to TM.

Among the possible casualties of the Great Recession are the gauges that economists have traditionally relied upon to assess societal well-being. So many jobs have disappeared so quickly and so much life savings has been surrendered that some argue the economic indicators themselves have been exposed as inadequate.

In a provocative new study, a pair of Nobel prize-winning economists, Joseph E. Stiglitz and Amartya Sen, urge the adoption of new assessment tools that incorporate a broader concern for human welfare than just economic growth. By their reckoning, much of the contemporary economic disaster owes to the misbegotten assumption that policy makers simply had to focus on nurturing growth, trusting that this would maximize prosperity for all.

"What you measure affects what you do," Mr. Stiglitz said Tuesday as he discussed the study before a gathering of journalists in New York. "If you don't measure the right thing, you don't do the right thing."

According to the report, much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces. With a singular obsession on making G.D.P. bigger, many societies—not least, the United States—failed to factor in the social costs of joblessness and the public health impacts of environmental degradation. They allowed banks to borrow and bet unfathomable amounts of money, juicing the present by mortgaging the future, thus laying the ground for the worst financial crisis since the 1930s.

The report is more critique than prescription. It elucidates in general terms why leaning exclusively on growth as an economic philosophy may yield unhappiness, and it suggests that the incomes of typical people should be weighed more heavily than the gross production of whole societies. But it sidesteps the thorny details of slapping a cost on a ton of pollution or a waylaid career, leaving a great mass of policy choices for others to resolve.

Some Americans may reflexively reject the report and its recommendations, given its provenance: it was ordered up last year by President Nicolas Sarkozy of France, whose dissatisfaction with the available tools of economic assessment prompted him to create the Commission on the Measurement of Economic Performance and Social Progress. Tuesday's briefing was held in an ornate room at the French consulate. The official French statistics agency is already working to adopt the report's recommendations. Mr. Sarkozy plans to bring it with him to the G-20 summit meeting in Pittsburgh this week, where the leaders of major countries will discuss a range of policy issues.

But whatever one's views on the merits of European economy policy, and wherever one sits on the ideological spectrum, these appear fitting days to re-examine how economists measure vital signs—particularly in the United States.

By most assessments, the American economy is now growing again, perhaps even vigorously. Many experts expect a 3 percent annualized rate of expansion from July through September. As a technical matter, the recession appears to be over. Yet the unemployment rate sits at 9.7 percent and will probably climb higher and remain elevated for many months. In millions of households still grappling with joblessness and the tyranny of bills, signs of health served up by the traditional economic indicators seem disconnected from daily life.

This was precisely the sort of contradiction Mr. Sarkozy sought to unravel when he created the commission, tasking it with pursuing alternate ways of measuring economic health.

To head the panel, he picked Mr. Stiglitz, a former World Bank chief economist whose best-selling books amount to an indictment of the Washington-led model of global economic integration. Mr. Sarkozy also selected Mr. Sen, a Harvard economist and an authority on poverty.

The resulting report amounts to a treatise on the inadequacy of G.D.P. growth as an indication of overall economic health. It cites the example of increased driving, which weighs in as a positive within the framework of economic growth, as it requires greater production of gasoline and cars, yet fails to account for the hours of leisure and work time squandered in traffic jams, and the environmental costs of pollutants unleashed on the atmosphere.

Read the rest of the article.

Labels: Amartya Sen, growth, growth consensus, Joseph Stiglitz, Nicolas Sarkozy

 

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9/23/2009 10:25:00 AM 0 comments

 

FDIC May Seek Bailout for Failed Banks

by Dollars and Sense

Banks large and small continue to drop like flies. The Federal Deposit Insurance Corp (FDIC) was set up in the wake of the Great Depression to guarantee depositors' funds when a bank fails. The FDIC is funded by insurance payments and fees made by banks. The wave of bank failures that includes megabanks Indymac and Washington Mutual, has placed the greatest stress the FDIC's funding ability since the S&L crisis of the Reagan/Bush era.

Despite a recent hike in fees that banks pay to the fund, the latest reports indicate that the FDIC is planning on borrowing the money from banks themselves. Suddenly, instead of paying for their insurance, the banks will be earning interest.

From the wires:

WASHINGTON - Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.

The loans would go to the fund maintained by the Federal Deposit Insurance Corp. that insure depositors when banks fail, said one industry and one government official familiar with the FDIC board's thinking, who requested anonymity because the plans are still evolving.

Regulators also are considering levying a special emergency fee on all banks, charging regular fees early or tapping a $100 billion credit line with the U.S. Treasury, the officials said.

FDIC spokesman Andrew Gray said that while borrowing from the banks "is an option, it's not being given serious consideration." The board meeting where the plans will be discussed is scheduled for next week.

The fund, which insures deposit accounts up to $250,000, is at its lowest point since 1992, at the height of the savings-and-loan crisis. Ongoing losses on commercial real estate and other loans continue to cause multiple bank failures each week.

FDIC Chairman Sheila Bair wants to avoid tapping the Treasury credit line, and Treasury officials insist that the strongest big banks have enough extra capital to operate, the officials said. Comptroller of the Currency John Dugan, who is a voting member of the FDIC board, has said he doesn't want to levy another fee on banks while the industry is still recovering.

The loans would give big, healthy banks a safe harbor for their money and would limit their risk-taking, said Daniel Alpert, managing director of the investment bank Westwood Capital LLC in New York.

It also would allow the industry's strongest players - which still rely on FDIC loan guarantees and other emergency subsidies - to help weaker banks avoid paying another fee, he said.

"Lots of banks are going to require more capital, and (Bair is) trying to rob from the rich and give to the poor," said Alpert, who supports the plan as a creative way to avoid another bailout.

Bankers and lobbyists strongly support the plan to have some big banks lend money to the fund, since it would help still-struggling institutions avoid another fee.

Rest of story here.

Labels: bad bank, bank closures, bank failures, bank fees, FDIC, FDIC fund

 

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9/22/2009 11:19:00 AM 0 comments

 

Mankiw on Statins

by Dollars and Sense

Orthodox economist Greg Mankiw weighed in on the health-care debate in Sunday's New York Times, with a heavy dose of cost-benefit analysis, plus a personal note about the doses of cholesterol-lowering statins he takes every day. Makiw reasons that since his daily pill costs roughly "$150,000 for each year of life saved," this shows that health care can't be equal. "Society" just can't afford to keep everyone healthy!

Here is a nice response to Mankiw from economist Jeff Ely, on the blog Cheap Talk:

The centerpiece of Greg Mankiw’s column in the New York Times is this paragraph about the little white pill he takes every day:

Not long ago, I read that a physician estimated that statins cost $150,000 for each year of life saved. That approximate figure reflects not only the dollars patients and insurance companies spend on the treatment but also — and just as important — an estimate of how effective it is in prolonging life. (That number is for men. Women have a lower risk of heart disease.)

Mankiw used the word cost but I would say that what he is referring to is price. With monopolized drugs and dysfunctional health care insurance there is a huge difference between price and cost. And with this in mind, Mankiw’s column completely misses the real economic problem exemplified by his pills.

For a more in-depth discussion of statins and how they relate to "monopolized drugs and dysfunctional health care insurance," check out the article by Mark Hyman, MD on Why Cholesterol May Not Be the Cause of Heart Disease (on Huffington Post; hat-tip to CKS). Even though I, too, take my dose of statins every day (and I'm willing to bet that my dose is higher than Greg's!), I don't have any trouble understanding Hyman's argument: that part of the reason it is widely believed that high (LDL) cholesterol causes heart disease is that the pharmaceutical companies have developed a pill that lowers (LDL) cholesterol! In fact, as Hyman points out, the causes of heart disease are much more complex.

Yet more evidence that it may be easier for an MD to be critical about economics and policy than it is for an economics PhD.

Labels: cholesterol, Gregory Mankiw, health care, health care reform, health insurance, pharmaceutical industry, statins

 

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9/22/2009 09:54:00 AM 0 comments

 

Bank of America's Awesome Pecans

by Dollars and Sense

An amusing item from New York Magazine's Daily Intel blog (though their spin on it is needlessly crude):

When House Committee on Oversight and Government Reform chair Edolphus Towns subpoenaed Bank of America for any and all correspondence "created between September 1, 2008 and January 16, 2009" relating to "the financial losses at Merrill Lynch or to Bank of America's receipt of financial assistance from the United States Government" as part of the committee's investigation into the merger, BofA CEO Ken Lewis and the bank's lawyers apparently thought it would be hilarious to pile literally every e-mail that passed through their server onto the representative's desk. After sifting through the 70,000 pages of documents, Towns indicated his displeasure in a letter to the CEO on Friday. "You responded to this request by providing hundreds of pages of unrelated, extraneous information," he wrote.

For example, you sent copies of numerous emails you received from your own employees, expressing admiration for your "awesome" performance on 60 Minutes. You also included copies of emails alerting Bank of America employees to discounts at Wal-Mart, Target, and Costco, an announcement of the "Annual Pecan Sale" featuring "This Year's Crop of Mammoth Pecan Halves," and an invitation to attend a conference on investment in Asia, written in Chinese.

We have to say, this does seem like a pretty jerky move on Bank of America's behalf. But we don't think Towns should dismiss all the spam they included. For instance: Are there any e-mails between Ken Lewis and the people at Makeitlarger.com? Because those could be viewed as circumstantial evidence.

Labels: Bank of America, Edolphus Towns, Ken Lewis, Merrill Lynch, pecans

 

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9/21/2009 03:31:00 PM 0 comments

 

Notre Dame to Dissolve Heterodox Econ. Dept.?

by Dollars and Sense

Here is a pretty shocking story—the University of Notre Dame is planning to dissolve its department of Economics and Policy Studies, which houses the heterodox economists at the university. Below is part of an article from the Chronicle of Higher Education; there is also an online petition for ND students and alums who oppose the plan. What a moment in history to purge heterodox economists!

Notre Dame Plans to Dissolve the 'Heterodox' Side of Its Split Economics Department

By David Glenn | September 16, 2009

Early in this decade, the University of Notre Dame's economics department was bruised by a long series of quarrels over methods and ideology. So in 2003 the university's leaders came up with a Solomonic solution: They split the department in two.

Some of the faculty members stayed in what became known as economics and policy studies, a heterodox department that made room for post-Keynesians, Marxians, and historians of economic thought. (Broadly speaking, that had been the character of Notre Dame's economics program since the 1970s.) Others moved into economics and econometrics, a more-mainstream department with an emphasis on quantitative tools.

But this was not a divorce made in heaven. University officials now say that the experiment has not worked, and that they expect to dissolve the department of economics and policy studies within the next two years.

A few of the department's 11 faculty members might be invited to join the mainstream department—indeed, one scholar already made the leap this summer—but most of them expect to be scattered into various other departments, institutes, and research centers at Notre Dame.

For those faculty members, most of whom opposed the 2003 split in the first place, the news is a bitter pill. They say that the administration has failed to consult with them or with their students. And they say that it will be peculiar, at best, for them to move into other academic units when the university originally hired them because of their doctorates in economics.

Above all, they say that the dissolution would represent an intellectual loss for the university. While Notre Dame once had an economics program that was distinctively shaped by currents in Roman Catholic social thought, they say, it will now be left with a neoclassical department much like the ones at almost every other major university.

"In light of the crash of the economy, you would think there would be some humility among economists, some openness to new approaches," says Charles K. Wilber, a professor emeritus of economics at Notre Dame. "There's not a lot."

Read the rest of the article.

Labels: heterodox economics, Notre Dame

 

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9/21/2009 03:20:00 PM 2 comments

 

The Populist Moment

by Dollars and Sense

This is the first in a series of blog posts by former D&S collective member Thad Williamson, who is teaching a course on social movements at the University of Richmond, where he teaches at the Jepson School of Leadership Studies. His first post, on Laurence Goodwyn's classic The Populist Moment, which is well worth reading if you haven't already. —CS

Over thirty years after its publication, Lawrence Goodwyn's The Populist Moment remains not only gripping history but a powerful statement about the meaning of democracy. The story Goodwyn tells is by equal measures uplifting (as we consider the audacity of what the Populists tried to achieve) and dis-spiriting (as we consider the comparative narrowness of our conventional discussions about reform). The continuing relevance of the book however lies not primarily in our emotional reactions to Goodwyn's account, but in what we can learn from it about what a serious movement to challenge the fundamental structure of the American political economy would need to entail.

Goodwyn—an emeritus professor of history at Duke University—issued The Populist Moment in 1978 as an abridged version (merely 349 pages) of his study Democratic Promise: The Populist Movement in America, which originally appeared in 1976 with a length of 718 pages. The shorter edition consists of nine chapters culled from the full-length book, shorn of footnotes, photographs, and appendices. Even in reduced form, however, the abridged version effectively presents an epic story about the efforts of "plain people" to overcome enormous cultural and political obstacles and create a political economy that worked in their interests.

The Populist movement set out to abolish the structural arrangements reproducing and exacerbating rural poverty in the United States. The most promising of these features consisted of the "crop lien" system whereby cashless farmers (whether or not they owned land) found themselves continually indebted to local merchants and other lenders. Without cash on hand to obtain goods, goods were borrowed at marked-up prices for merchants, who collected in the form of crops at harvest time. Typically, poor farmers ended up still in debt to "the man" at the end of this annual ritual. This situation amounted to a system of de facto serfdom.

Exacerbating the difficulty was the national currency policy pursued after the Civil War, which saw the gradual contraction of the effective money supply and a return to the gold standard in 1879. The scarcity of currency helped creditors while damaging debtors, in two ways: as money got more valuable, the real value of loans owed increased over time; and the high value of money in turn meant that agricultural prices would trend downward over time. Farmers in debt were thus compelled to pay back loans worth more than the initial dollar amount, and to do so through the sale of crops that got steadily lower prices over time. In addition, farmers faced a variety of shipping fees and related costs imposed by railroad monopolies and grain elevator companies, making it essentially impossible for farmers to do more than (at best) tread water.

Creating a social movement to respond to this reality required accomplishing the seemingly impossible: undertaking a radical, independent economic analysis of American capitalism and then articulating that analysis and organizing for it in a language with cultural resonance with farmers. Simply organizing voters or electing better politicians would not do the trick, as the dominant parties (Democrats and Republicans) competed on the basis of sectional loyalties, not class politics, and were dominated by vested economic interests. Indeed, once the Populist movement moved into its explicitly political phase, it would need to convince farmers and allies to make a decisive break with the reigning politics of the post-Civil War period.

But before the Populists could begin contemplating challenging the two-party system, much preliminary work needed to be accomplished: a movement culture needed to be established. The essence of the movement culture was the assertion of political and intellectual independence—what Goodwyn terms "self-respect"—from the predominant political culture that rationalized continued hierarchy. In contrast, the Populists began to create an indigenous egalitarian ethos, premised on the idea that (as Goodwyn puts it) by acting together, farmers (and allies) could enhance individual freedom and self-respect. This "self-respect" was actualized through both the act of political organizing itself and the vast mass meetings of the Farmers' Alliance beginning the late 1880s, through the self-education campaigns undertaken by thousands of lecturers in county after county, and through the establishment of a variety of cooperative enterprises, most notably the very ambitious Texas Exchange.

The hope of the cooperative strategy was that by combining economic forces, farmers could collectively get around the restrictions of the crop lien system, by selling their crops at more favorable prices and by acquiring goods and supplies on a cheaper basis. The fatal problem this strategy encountered was lack of credit. Farmers were simply too cash-starved to provide the capital the Texas Exchange required to work as intended, and the Exchange was not able to get credit from private banks, who were hostile to the cooperative's aims.

Charles Macune, the Texas populist who had championed the Exchange idea, responded to this difficulty not by giving up but by hatching the signature idea of the Populist Movement: the Sub-Treasury Plan. The aim of the sub-treasury plan was to use the power of the federal government to help farmers escape the crop lien system and to infuse the economy as a whole with a dramatic increase in currency. Under the plan, the government would establish warehouses in agricultural counties to store farmers' crops (for a variety of specified commodities). When depositing their crops, farmers would be issued paper money equivalent to 80% of the cash price of their crops, repayable within one year at a 1% interest rate. This system would free farmers from the need to pay for goods from local merchants in kind (by giving them cash) and also free them from the imperative to sell their crops at unfavorable prices (the storage system would allow them to wait until prices were relatively high rather than at the lower prices associated with harvest time). The sub-treasury plan also would have allowed farmers to obtain low-interest cash borrowed against the value of their land (if they owned it).

This plan, along with associated demands culminating in the "Omaha Platform" of 1892, provided Populism with a substantive agenda, rooted in an independent analysis of the economy from the standpoint of poor farmers. Translating the plan into a politically viable demand first required that Populists draw on and expand their networks of communication and education, including the lecturers and (increasingly significant) the emergence of thousands of reform periodicals nationwide. But it also required confronting America's broken political system and challenging the limits of the two-party system.

Ironically, Macune himself hesitated at this last step, the formation of the Populist Party, and found himself displaced by politically bolder leaders. What followed next was a high-water mark of political success for the movement—election of numerous Populist politicians to state and national office from a variety of states in 1892 and 1894, and the near destruction of the Democratic Party as a viable institution nationwide. In many southern states, Democrats held on to power only by literally stealing elections. In North Carolina, a Populst-Republican coalition actually gained control of the state legislature in 1894. For a brief moment, the Solid South appeared to be in serious jeopardy.

But in Goodwyn's account, the Populist movement had a fatal flaw—namely, that its new political party was not sufficiently democratic in organization and left too much power in the hands of its leadership. After 1894, party chairman H.E. Taubeneck, an Illinois politician who had become chairman despite not being involved with the original wave of Populist organizing, steered the party away from the Omaha platform and towards the embrace of "free silver" as the singular demand of Populists. In Goodwyn's account, Taubeneck was one of a number of politicians—encouraged amply by silver mining interests-- who saw a tactical advantage in getting themselves elected through the "free silver" cause—and were willing to abandon the long-term goals of restructuring the political economy to achieve this. This move was angrily opposed by the reform press, but the "fusionists" used their organizational advantages (and no small measure of deceit) to maneuver the Party into endorsing Nebraska Democrat William Jennings Bryan for President in 1896 on a "free silver" platform, effectively ending Populism as an independent political force.

Goodwyn argues that in terms of confronting the fundamental nature of the political economy, Populism was the most significant social movement in American history, and that subsequently the horizons of reform have narrowed dramatically. Socialists have remained politically marginal in America, while liberalism confines itself to reforms that do not fundamentally challenge who has economic power, the distribution of wealth, or the corporate state. Very few Americans understand the financial system we live our lives under or the manner in which the Federal Reserve System codifies the control of money by banking interests.

One political result of this situation is that the financial industry can cause the American and world economy nearly to fall into a cataclysm, receive a bailout of a magnitude far beyond that dreamed by the most ambitious proponent of new liberal social programs, all without any fundamental effort or even discussion about re-structuring the financial industry or the financial system, carried out under the imprimatur of a president widely regarded as the most liberal in one if not two generations.

Those convinced that there is something fundamentally wrong about a political-economic system in which the top 1% hold over one-third of the wealth, and in which for over thirty years living standards and poverty rates have stagnated at the same time total economic product has grown dramatically, have two choices. They can remain respectable and work within the narrow confines of socially acceptable political norms, one of which is that the fundamental premise of a corporate-dominated economy is not to be questioned. (To pass universal health care, it seems, we have to first placate the private insurers—or such is the apparent belief of the current administration.)

The alternative path is far more difficult. It involves undertaking an independent economic analysis; setting a goal of changing the economy in its fundamentals; envisioning practical steps both short-term (the equivalent of forming a cooperative) and long-term (using the power of government to support such development) in support of such goals; joining with other Americans to engage in the self-education needed to refine, publicize, and advance this vision; and eventually forming an independent political capacity to act.

Perhaps most fundamentally, this means setting the goal of creating a politics in which "the people" actively shape and create the agenda. This is an enormously ambitious goal, but refusing to even try represents both a constriction of democratic vision and an acceptance that one will be pursuing politics on terms set by the corporate state and its institutionalized backers—forever.

Twenty-first century populism, if it ever emerges, will no doubt entail cultural formations quite different from those that animated the late nineteenth century version. But as Goodwyn's account helps illustrate, both the bold assertion of collective self-respect and a boldness of economic analysis and vision must be the central ingredients of any serious movement to reclaim democracy's deepest meaning (rule by the people).

—Thad Williamson

Labels: Lawrence Goodwyn, populism, Thad Williamson, The Populist Moment

 

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9/17/2009 04:41:00 PM 0 comments

 

Obama vs. the Lobbyists (TomDispatch)

by Dollars and Sense

From Tom Engelhardt of TomDispatch; a link to Andy Kroll's article follows:

Congressman Joe ("You lie!") Wilson is undoubtedly not completely ignorant about how our health care system actually works. After all, in the course of his career, according to the Center for Responsive Politics, he's received $244,196 in contributions from the health-care profession -- and that doesn't even count another $86,150 from the pharmaceutical industry or the $68,000 that came in from hospitals and nursing homes. In fact, if you go to the page at that organization's OpenSecrets.org website on Congressional contributions and start clicking around among the members of Congress, you'll be struck by how many times the health and pharmaceutical industries (and their lobbyists) pop up.

It's not so surprising, of course, since there are staggering sums of money at stake, which means striking amounts of the same to inject like some potent drug directly into the bloodstream of our political system. Consider but one figure: since 2002, according to Harper's Magazine, the profits of the top 10 health insurance companies have increased by 428%. And the CEOs of those top insurers have a personal incentive for ensuring that those profits don't slide due to new health-care legislation; after all, they made a combined $690 million in the last nine years.

In fact, any administration arriving in Washington wanting to do anything these days walks into a blizzard of money, not to speak of the fact that the wind at its back, the campaign wind that got it there, was already blowing strong with similar contributions. TomDispatch regular Andy Kroll offers a vivid portrait of that world at this moment and what it means for the Obama administration. —Tom

Read Andy Kroll's article.

Labels: Andy Kroll, health care reform, health insurance, insurance industry, Joe Wilson, TomDispatch.com

 

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9/16/2009 10:03:00 AM 0 comments

 

How Tort Reform Can Raise Health Care Costs

by Dollars and Sense

Texas has been a magnet for doctors since they enacted tort reform a few years ago. (See Doctor's Flock to Texas After Tort Reform from the Wall St Journal).

The result? Insurance premiums have nearly doubled.

From the Austin American Statesman:

Insurance premiums rose 91.6 percent in Texas

By Mary Ann Roser | Tuesday, September 15, 2009, 12:48 PM

A national report that was released today says family insurance premiums in Texas increased 91.6 percent since 2000 - 4.6 times faster than earnings.

The report by the nonprofit consumer organization Families USA says the rise in health care premiums for workers went from $6,638 for the average Texas family to $12,721 a year, but folks got less for their money rather than more, according to the report. At the same time, median earnings of Texas workers rose from $23,032 to $27,573, a 19.7 percent increase.

"Our conclusion is that rising health care costs threaten the financial well-being of families across the country," said Ron Pollack, executive director of Families USA.

The report argues throughout for health care reform, and as Pollack said, if it doesn’t happen soon, more families will be priced out of the market.

In a report last year, Families USA said health insurance premiums grew 5.8 times faster than earnings in Texas. And this year, the growth rate in Texas is even below the national rate in which premiums grew 4.9 times faster than income between 2000 and 2009.

Even so, Pollack said he doubted "anyone in the state will be delighted" by the results this year.

Asked why premiums are growing so fast in Texas and nationally, the report cited four key issues:

*Increased spending on health care. The report says that nearly half of Americans have chronic conditions, with diabetes alone costing more than $174 billion annually.

*Lack of regulation of the insurance industry. Insurance companies can charge more, plus refuse coverage to people based on a variety of factors, including dropping or denying people because of illness, the report says.

*A lack of competition in the insurance market. The report says in some areas, too many companies have merged, leaving consumers with too little choice. The report claims health care reform will provide more options.

*The "hidden health tax," in which people with insurance help cover the uninsured. Last year, the portion that insurance companies charged families in insurance premiums to cover people who did not have insurance was $1,017.

Pollack said he believes insured people would pay less to cover uninsured people under health care reform.

Link to the study by Families USA (pdf).

Labels: families USA, health care, health insurance, tort reform

 

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9/15/2009 03:48:00 PM 2 comments

 

The Truth about the Public Option (Robert Reich)

by Dollars and Sense

From The Real News Network:

Former Labor Secretary Robert Reich explains what a public option for healthcare coverage really means for working people. We thank Jacob Kornbluth for directing and producing the Robert Reich interview portion of this piece. Pass it on to everyone you know. We can't let the insurance companies decide who gets care and who doesn't. Check out: www.sickforprofit.com for more details about the campaign.

Labels: health care, health care reform, public option, Robert Reich

 

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9/14/2009 09:36:00 AM 7 comments

 

T.D.C.o.t.E: The Mendacity of Hope

by Dollars and Sense

The Dull Compulsion of the Economic (xvii)

A series of blog postings by D&S collective member Larry Peterson

The Mendacity of Hope: Obama's Healthcare Speech

President Obama's speech to Congress on healthcare has been generally well received since it was delivered Wednesday evening. Commentators have focused on the President's charisma, of course, as well as his intelligence; but what was different this time was a pronounced hint of determination in the face of considerable adversity: and this is something we've yet to see from the young president. But the question then arises: what is there for Obama to be resolute about?

The speech featured the submission of a comprehensive presidential plan (which had been hitherto lacking: the president has been content, up to now, with letting members of Congress write the competing bills). The main feature of the plan consisted of a deal--some would say with the devil--with the insurance companies, pharmaceutical companies and for-profit healthcare providers: in return for losing the right to drop insurance for preexisting conditions, jack up deductibles and out-of-pocket expenses, and discriminating against customers based on age or even geography, individuals would be mandated to purchase health insurance, or face a financial penalty. Employers, too, would have to offer insurance policies to their employees, or pay a stipulated amount into the insurance fund (the so-called "pay-or-play" provision). Subsidies and exemptions would be provided for small businesses and the indigent, and a fund would be established to protect individuals with preexisting conditions who, under the plan, wouldn't be eligible for coverage until 2013.

Such a plan would control costs in a definitive way in only one regard: it would force some thirty million people or so to purchase insurance (a good amount of these are children, and will be covered by their parents). And the savings to the system that would accrue from the proper funding and even avoidance of expensive emergency-room treatment of uninsured persons would indeed provide some offset to the relentless upward pressure in healthcare costs. But there was almost nothing else in the speech about containing costs, especially over the long term, as the population ages and the financing of Medicare(not to mention Medicaid) becomes a serious problem in its own right. Instead, the President played with the politics of the public option and spoke of offsetting the entire cost of the program--set at $900 billion over 10 years.

Regarding the public option, the president brought it up merely to offer it as a potential sacrifice for measures that have yet to be put articulated--never mind put forward, especially by Republicans--as presumably equally valid means to one specific end: the controlling of health care costs. And on financing the program--providing all the subsidies and exemptions for many of the tens of millions who will be absorbed into the system--Obama claimed that all of the $900 billion should be capable of being offset by savings to the system that will be the result of the cutting of huge amounts of waste in the system. Many say that he won't be able to come up with even half of this figure.

So what's wrong with all this? First of all, the idea that the insurers should be compensated for dropping some of the most despicable policies in America is absurd: the denial of preexisting conditions and so on has become a national scandal that should simply have been abolished outright. But such policymaking fits into the Obama notion of change very well: look at the banks, for example (and it's interesting: of all the things that aroused ire over the health care plan, pundits have yet to acknowledge that its timing, coming right after the bailout of the banks, may have played a major role in enhancing the negative connotations the program was capable of arousing, precisely because it is--somehow--a "government" program, and, as such, open to the sort of gaming that has come to characterize the banking bailout).

Then there's the question of cost control. The reason why no Republicans or conservative Democrats have sought out the President's open door is because there simply is no clear way to even hope to control costs in the shorter-term other than through the implementation of a robust public option, or, even better, a single-payer system. Again, like with the banking system, we are in completely unchartered territory, and the signs of systemic health do not look promising. Obama said that he was reluctant to embark upon more ambitious measures like single-payer because he feared that potentially major disruptions involving nearly one-fifth of the economy were simply unacceptable to Americans. But he himself has acknowledged that the health care system as we know it is turning into an unsustainable drag on the economy. So--how do you combat an unsustainable drag, which is only getting bigger by the year? By implementing policies that more than anything else are chosen because they do not cause disruption? And this while disruptions--in finance, the labor market, you name it--are becoming the order of the day in so much of the rest of our daily lives?

So where cost control is concerned, Obama seems to be asking us to trust him and the legislators he's reaching out to (some/most of whom, no doubt, are raking in wads of cash from big pharma, the insurance lobby and for-profit hospitals). It is conceivable that, although Obama pointedly didn't mention this in the speech, a "trigger" mechanism of some sort may be built into legislation, perhaps mandating some kind of public option if costs aren't sufficiently contained. But maybe not; and at this point, given all the prior hemming and hawing, it's hard to trust the administration on this score, never mind the Blue Dog Democrats Obama is looking to sway. It's quite possible that the establishment of heath care co-ops is as far as the latter will go, and who's to say that they won't demutualize or something even if costs are--relatively speaking--constrained for a few years, once/if things get back to "normal"?

In the longer-term, though, the gamble grows more desperate: so many of the things that make the US healthcare system so very expensive, and at the same time so ineffective--the proliferation of specialists to the detriment of general practitioners, the emphasis on treatment of diagnosed conditions to the detriment of preventative medicine, the ludicrous sums spent in the last year of life (and especially to the extent that the latter command outsized levels of pharmaceutical and technology spending), the malpractice premiums, the ever-duplicated paper trail that wends between insurers, hospitals and bureaucracies, and even the President's beloved medical information-technology (also unmentioned in the speech) initiatives--there are no proposals to harness any of these for the sake of cost control. I suppose the President feels that to tinker with any of them would risk interfering with the sacred marketplace. But these factors play a big part in pushing costs up. And though, as noted before, the individual and company mandates may mitigate against the upward spiral somewhat, it is a crap shot at best, and more likely a desperate--even irresponsible--gamble to assume that these mechanisms alone will contain costs in anywhere near effective a way so as to convert the healthcare sector from being a drag on the economy to being a sustainable source of growth (not to mention turning it into a system that actually improves the health care indicators, and, by extension, the productivity--and well-being--of the people).

And even if some kind of public option finds its way into legislation, there is a further worry: President Obama himself made a very unfortunate comparison on Wednesday when he spoke of the public university system as a successful--and popular--check on higher-ed costs. But, as we all know, in education the public alternative has been becoming less-and-less available as public costs follow those of their private competitors upwards: hardly a felicitous precedent for a public option that stands to be much, much weaker, in terms of its financing, than public universities. And then there's the question of quality: will quality decline for those who choose the public option, especially seeing that the funding is set to be so delicate? Will there be huge waiting queues like those we've endured here in Massachusetts for those forced to go on a system that doesn't have the capacity (remember the relative shortage of GPs here) to absorb the newcomers anyway?

One other proposal was left unmentioned during the speech: the removal of the tax exemption for businesses that insure their employees. Presumably Obama is looking to his supporters amongst unionists here, seeking to appeal to their worst instincts to prevent them from demanding payback for getting him elected by insisting on single-payer. But this exemption, which has wrought so much havoc on pay scales in this country for so long, will presumably be allowed to distort them unabated. In a time of economic contraction like we're seeing, the continued drag on wages already reeling from the crash seems destined to hinder economic recovery--and screw up innumerable lives--in a major way. Surely Obama sees that?

But, at the end of the day, the dirty little secret about American health care is that it uniquely sets different parts of the population against each other. And it does so in a way that is the inverse mirror image of that which is supposed to hold sway under competition: seniors with Medicare, the insured with employer-provided, tax-exempt healthcare, and the uninsured who must subsidize both, but who risk the running up of huge bills which fall on the insured (and increase their bills) if they can't stay out of the system, are all induced to get what they can out of the system at the expense of other groups. And the insurers and providers are all too eager to assist in this game, ordering expensive tests for some, denying those they can, and hoping that those left by the wayside won't form a common cause to overturn this rotten system. So far it has worked, and it looks like it will work again, whether or not a health care bill is passed.

On Monday, on what is euphemistically known as "Labor Day" in the US, I was with thousands of demonstrators on Boston Common, rallying for healthcare reform. It was very strange. I, like many of my comrades there, found myself cheering for two opposed policies whenever they came up: single-payer and the public option. It was almost surreal, to use the cliche. What were we demonstrating for? The same thing, I suppose, that President Obama was calling up his commendable resolution about: the perceived necessity of a fudge. Obama is a unique political figure in that he has corralled his undisputed charisma to advance the agenda of discredited--but, in the eyes of the administration, indispensable--elites by putting a somehow positive spin on a palpable sense of his supporters that things are bad and getting worse--intolerable, even. This is the "hope" he speaks of with seeming conviction. That his most important policy stance--the one on which he has said he will risk his presidency--is so obviously defective, from so many standpoints, reveals in a particularly stark way the despair with which he must, in lucid moments, view his signature emotion.

Labels: Barack Obama, health care reform, insurance industry, Larry Peterson, Medicaid, Medicare, pharmaceutical industry, public option, single-payer, the dull compulsion of the economic

 

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9/11/2009 05:27:00 PM 0 comments

 

Baucus's Public Option

by Dollars and Sense

Yes, here it is (thanks to Emptywheel for bringing it to our attention):

Health Insurance Exchange. The Baucus plan would establish the Health Insurance Exchange through which individuals and small businesses in the market for insurance could obtain affordable health care coverage. ...

The Exchange would also include a new public plan option, similar to Medicare. This option would abide by the same rules as private insurance plans participating in the Exchange (e.g., offer the same levels of benefits and set the premiums the same way). Rates paid to health care providers by this option would be determined by balancing the goals of increasing competition and ensuring access for patients to high-quality health care. A number of options could be considered to determine who runs the plan, who is eligible for it, and how to ensure that the public-private insurance competition lowers costs and improves quality. The Independent Health Coverage Council, described below, would inform these decisions.

This is from “Call to Action: Health Reform 2009,” put out by Sen. Finance Committee Chairman Max Baucus. The title may have you confused for a few minutes; why is everyone saying the Baucus plan has no public option? But then you notice the date on the document: November 12, 2008.

A few interesting numbers from the current Baucus plan:

The plan puts limits on insurance company “rating”—i.e., charging higher or lower premiums based on characteristics of the insured such as age. (The plan allows rating based on age, tobacco use, and family composition.) With the limits, premiums for the same-size family could vary by 7.5 to 1. That sounds pretty unaffordable for the late-middle-aged smoker.

The plan defines affordability: as long as the lowest-cost plan available has annual premiums equal to 10% of household income or less, then “affordable” coverage is deemed available and the mandate to have insurance will apply—enforced by fines of up to $950/year for an individual and $3,800/year for a family.

Labels: health care reform, health insurance, Max Baucus, public option

 

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9/11/2009 04:29:00 PM 0 comments

 

Whole Foods and Health Care

by Dollars and Sense

John Mackey, the CEO of Whole Foods (or as we call it here in Boston, Whole Paycheck), wrote a hide-bound and ideological op-ed for the Wall Street Journal last month (find it here). The first tip-off that it's going to be silly is that it calls health-care reform "Obamacare" (nothing like a little derision right in the title of an op-ed to command the interest of the readers of the WSJ opinion pages). What follows are all the usual canards of the Right's views on health care, and all their usual free-market, individualistic, deregulatory policy solutions.

A movement has developed to boycott Whole Foods because of Mackey's opposition to meaningful (i.e., single-payer) health-care reform. The group Single Payer Action is also part of this boycott. Now would be a good time to shift over to farmers' markets and food co-ops to send Mackey and Whole Foods a message.

Here's an interesting tidbit from the Boycott Whole Foods website: Michael Pollan, author of The Omnivore's Dilemma and other books about food and food production, has weighed in against the boycott, because although Mackey is wrong about health care, "Whole Foods is often right about food," Pollan tells us. According to the Boycott Whole Foods website, Pollan has spoken at a conference put on by America's Health Insurance Plans (the main lobbying organization for the health insurance industry), on a panel entitled "Leaving the 'Fast Food Nation' Behind: Challenging American's Attitudes Towards Personal Responsibility and Health." (The other speaker on that panel was Richard Thaler, co-author of the pop-behavioral economics book Nudge.) And he posted against the Whole Foods boycott on the website of archconservative David Frum (newmajority.com).

Now, I don't begrudge Michael Pollan an appearance at an AHIP conference (Howard Dean also spoke on a panel at the conference), or a comment on a website "dedicated to the modernization and renewal of the Republican party and the conservative movement," as its "About" page says. The man is pretty much omnipresent, so why not in these venues? But it doesn't surprise me that he doesn't seem to get the importance of collective action. I heard a radio version of a talk he gave a couple of years ago--it was about the prevalence of corn in the American diet (via corn syrup, mostly, but also as feed for the animals that become our meat), and the history of overproduction of corn post WWII. A terrific talk--the whole time I was craving broccoli (which I don't usually care for too much), because I figured there's no way they'd figured out how to make broccoli with corn. But in the question period, someone asked him early on what we could do about this, and all he had to say was something about making good choices about what we eat, choosing to shop at places (like Whole Foods) that offer fresher food, etc. There doesn't appear to be a truly political bone in his body--for him it's all about individual consumer choice. (It reminded me of Al Gore's otherwise terrific movie, ending with rousing call for us to change our lightbulbs.) So I'm not surprised that Pollan blandly opposes this boycott.

Joel Harrison, who wrote this terrific article for us last year, has written a point-by-point rebuttal of John Mackey's WSJ op-ed. Here are the basics; click on the links to get the details on each point.

YES, TO HEALTHCARE FOR ALL, NO, TO MACKEY'S WHOLE FOOD CARE

Rebuttal to John Mackey's Wall Street Journal Op-Ed, "The Whole Foods Alternative to 'ObamaCare'"

By Joel A. Harrison, PhD, MPH | September 8, 2009

John Mackey's editorial in the Wall Street Journal is merely a continuation of the myths propagated by the for-profit health insurance and pharmaceutical industries and the right-wing think tanks they fund. His suggestions would take us farther in the direction that has already failed.

For this rebuttal I'll focus on the following points:

* Healthcare IS a right in other countries. So, what does our Constitution "guarantee?" The European Union's Constitution includes Health Care as a Right. The U.S. Supreme Court ruled in 1936 that Article II Section 8's "Promote the General Welfare" applied to Social Security. Medicare falls under this ruling. Though not binding, the Universal Declaration of Human Rights, signed by the United States, includes medical care as a right. (Details and references)
* Does health reform mean a "government take-over?" Ridiculous question but NO! Free markets do not work without rules and an independent arbiter. All Bills before Congress maintain the private sector for delivery of health care, both hospitals and doctors; but include regulations such as protection from arbitrary loss of health insurance and greater transparency. (Details and references)
* Repealing mandates on what insurance must cover & state laws which prevent insurance companies from competing across state lines. Without some minimum national regulations and means of enforcement, companies will incorporate in states with the least regulations and enforcement, leaving consumers vulnerable. (Details and references)
* Health Savings Accounts—Why they don't work. 80% of health care costs for individuals in the U.S. exceed $2,500 and 73% exceed $5,000, so people would rapidly exhaust their health savings accounts. Sick and injured people trust their doctors to make appropriate decisions and neither have the skills for making the decisions nor the availability of data to base such decisions on. High deductibles leads to reductions in both appropriate and inappropriate care, e.g. blood pressure monitoring. (Details and references)
* Medicare reform and finances—Why we will not allow Medicare to go bankrupt. Medicare has done a better job than private insurance companies in keeping costs down. Medicare covers the costliest sector of our population, altogether over 43 million Americans. Private insurance would either be denied due to pre-existing conditions or prohibitively expensive. Medicare pays for all specialty residencies and subsidizes hospitals with a high proportion on uninsured. Without Medicare, besides the human tragedy of seeing our loved ones experience both reduced quality and length of life, emergency rooms will collapse under the additional strain, hospitals will close, and many doctors will go out of business. Medicare's cost cannot be separated from a health care system whose current projectory is unsustainable. (Details and references)
* Wait times here and abroad (including emergencies)—Mackey's misleading statistics. Wait times in Canada are far better than reports given here and they are investing vast sums in improving both quality and timeliness of care. Wait times in many other nations with non-profit universal health care are actually quite good. And wait times in the U.S., especially for the un- and underinsured are worse than in many other countries and, even for those with insurance, wait times exist and are deteriorating. (Details and references)
* Medical Liability/Tort Reform—why this won't solve the healthcare crisis. Malpractice costs are an infinitesimal portion of total health care costs. Up to 100,000 Americans die from preventable medical errors. Just five percent of all doctors are responsible for approximately 40% of malpractice suits. Truly bad doctors seldom lose their licenses. Only about 1/10th of all medical errors that cause death or serious disability lead to malpractice suits. So-called "defensive medicine" is often just an income generator for physicians who own or are invested in labs and radiology facilities. (Details and references)
* Healthy life styles are good but don't save us enough. Many factors affect health, including genetics, air and water pollution, infectious diseases, commercial food interests targeting children, even in our schools, availability of recreational facilities, physical education in our schools, and longer and longer working hours. Healthy life styles are important; but almost everyone will sometime in their lives need health care. A healthy life-style can often delay the onset of chronic diseases and/or if ill or injured contribute to a more rapid recovery; but it is naive to believe that healthy life styles can solve our health care system problems. (Details and references)

CONCLUSION: John Mackey doesn't know what he is talking about. In essence, he is just parroting the myths and propaganda created by the for-profit insurance and pharmaceutical industry together with their well-funded right-wing think tanks.

I don't wish to support a platform of policies that allow private insurance companies to continue to take undue advantage of average citizens for profit, much less make it easier for them by adopting any of Mackey's ideas. I am joining thousands of former Whole Foods loyalists to redirect my dollars to support organic co-ops and local farmers' markets. I hope you will join me.

Joel A. Harrison, PhD, MPH, lives in San Diego, where he does consulting in epidemiology and research design. He has worked in the areas of preventive medicine, infectious diseases, medical outcomes research, and evidence-based clinical practice guidelines. He has lived and studied in both Canada and Sweden.

Labels: David Frum, health care, health care reform, health insurance, Joel Harrison, John Mackey, Michael Pollan, single-payer, Wall Street Journal, Whole Foods

 

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9/09/2009 09:43:00 AM 7 comments

 

Anti-Union Campaigns from the Right

by Dollars and Sense

We received this from former D&S editor Abby Scher. Abby is currently editor of The Public Eye, a publication of Political Research Associates. Scroll down for the press release about the Making Contact program Abby produced on right-wing anit-union campaigns.

I've been tracking anti-union campaigns from the Right and did a short radio documentary for Making Contact being broadcast this week about the Right's misinformation campaign to stop labor law reform this year They are going all out. Unions are a potent reality check. People in unions don't tend to fall for a lot of the free market mythology about how the world works. And of course, the GOP hates unions because white men in unions voted for Obama by 18 points—while those outside of unions voted for McCain by 16 points (which I wrote about in the summer Public Eye, the quarterly I edit for Political Research Associates). My economists friends will be happy to hear I interviewed Rick Wolff. My historian/sociologist friends will be happy I included Kim Phillips-Fein. And my labor friends will be thrilled to hear Angel Warner of the Rite Aid campaign. Here is the press release with links to the radio show. I hope it is useful.

Berlet and Scher Track Anti-Union Organizing on the Right

Antilabor campaigns by corporate interests are nothing new, and are frequently masked by rhetoric about freedom of choice for employees and union leaders as thugs eager to take away your rights. Like most Big Lie campaigns, the truth emerges when we shine the light of history and research on the issue.

We are hearing these Big Lies in the first major battle to reform labor law since the 1970s. Then the reform failed by one vote. Now the U.S. Chamber of Commerce, National Right to Work Committee and patriotic sounding front groups like the Alliance to Save Main Street Jobs are working to ensure that the Employee Free Choice Act suffers the same fate.

In a special Labor Day collaboration with syndicated radio program Making Contact, PRA Editorial Director Abby Scher uncovers the truth behind the U.S. Chamber of Commerce’s multimillion dollar misinformation campaign to defeat the bill in the name of saving small businesses. Listen to her documentary, Still Looking for the Union Label, here. Or listen on Monday to Heidi Boghosian’s Labor Day interview with Abby on the show Law and Disorder at 10am on WBAI. Click here.

In a series of articles, PRA Senior Analyst Chip Berlet outlines the history of anti-union campaigns dating back to the 1930s, showing how the National Right to Work Committee and U.S. Chamber of Commerce have tried to “flip the script” so it appears that corporate repression of workers aren’t the problem, unions are! Visit our new page on anti-labor activities on the Right here.

With union membership dipping to dangerous lows, and 40 percent of union organizing drives stopped by corporate intimidation even before workers have a chance to vote, labor law is in dire need of reform. The U.S. Chamber of Commerce is the nation’s biggest lobby, spending an average of $400,000 a day in a single legislative session (according to the Center for Responsive Politics). It is spending tens of millions more spreading its anti-union message on the airwaves to shape the fall battle. Can the light of truth and the heat of organizing stop them this time?

Labels: anti-union campaigns, Making Contact, Political Research Associates, Public Eye, the Right, unions

 

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9/08/2009 01:22:00 PM 2 comments