Wednesday, December 29, 2004

FT: SEC could ease reporting rules

15 December 2005
Financial Times

(c) 2005 The Financial Times Limited. All rights reserved
US regulators yesterday proposed that foreign companies with New York stock market listings be able more easily to terminate expensive financial reporting obligations in the US.

The Securities and Exchange Commission plans to make it easier forforeign companies to end their reporting duties with the chief US financial regulator, after European complaints about the costs stemming from the Sarbanes-Oxley law on accountingand corporate governance.

The Organisation for International Investment, which represents US subsidiaries of Asian and European companies, gave the SEC plans a cautious welcome.

Todd Malan, OII president, said the plans were a "large step in the right direction" and a "serious effort to listen to foreign companies".

The Confederation of British Industry, which lobbied for reform, also said the SEC plans were "positive".

"We want to look in greater detail at whether it is workable for the companies we represent," said Rhian Chilcott, head of the CBI office in Washington.

Under the SEC plans, a big foreign company would be able to terminate its registration with the regulator, and the associated reporting obligations, if trading in its shares in the US was low and US investors held no more than 10 per cent of its stock.

The proposed deregistration tests represent aneasing of existing rules, under which a companymay have to continuefiling annual reportswith the SEC forever.

Christopher Cox, SEC chairman, said the "last thing" the regulator wanted US markets to be known for was as a place where "you can check in but never leave".

He said he hoped the SEC plans would encourage more foreign companies to have US listings because the reform would provide a "more flexible exit process".

European companies alarmed by the reporting costs resulting from the Sarbanes-Oxley law discovered that even if they scrapped their US listings they might be saddled with reporting obligations with the SEC indefinitely.

Existing SEC rulessay foreign companiescannot terminate their reporting obligations unless they have fewer than 300 US investors.

The proposed tests outlined by the SEC for ending reporting obligations require that a company retain alisting in its home country.

If a big company canshow that US trading in its shares is 5 per cent or less of average daily volume, it would be able to end its reporting obligations with the SEC so long as US investors held 10 per cent or less of its shares.

A big company is defined as one with stock in public hands worth Dollars 700m or more.

A big or small company could end its reporting obligations if US investors held 5 per cent or less of its shares.

New York Transit Deal Shows Union's Success on Many Fronts


He was excoriated on tabloid front pages and by the mayor and governor. As thousands streamed across the Brooklyn Bridge on a frigid night during last week's transit strike, someone in a car yelled out his name, prefacing it with a curse.

But now, a day after details of an agreement between the transit workers and the Metropolitan Transportation Authority were spelled out, Roger Toussaint, the union's president, seems to have emerged in a far better position than seemed likely just a few days ago.

Mr. Toussaint, whose back appeared to be against the wall last week, can boast of a tentative 37-month contract that meets most of his goals, including raises above the inflation rate and no concessions on pensions. Indeed, several fiscal and labor experts said yesterday that Mr. Toussaint and his union appeared to have bested the transit authority in their contract dispute.

The authority did not come away empty-handed, however, as it obtained a major concession: For the first time, the 33,700 transit workers will pay a portion of their health insurance premiums.

But if there is a real winner in the walkout that hobbled the city at the height of the holiday season, it is the union members who went out on strike, and the man who led them.

"It's a good contract for the union in that it does keep in place, for the most part, benefits that are extremely favorable to them," said Steven Malanga, a senior fellow with the Manhattan Institute, a conservative research organization, who called last week for firing the strikers. "For them, you can say this is a great deal."

When Mr. Toussaint appeared before television cameras at 11 p.m. on Tuesday to announce the settlement, he commented little except to read an impressive list of new worker-friendly provisions: raises averaging 3.5 percent a year, the creation of paid maternity leave, a far better health plan for retirees, a much-improved disability plan, the adoption of Martin Luther King's Birthday as a paid holiday, and increased "assault pay" for bus drivers and train operators who are attacked by passengers.

Then Mr. Toussaint announced a big surprise: Some 22,000 workers will each receive thousands of dollars in reimbursements for what are considered excess pension contributions; for several years, these workers paid more toward their pensions than other workers. For those workers, that money will easily offset the fines of slightly more than $1,000 that most of them face for taking part in the illegal strike. The union itself could still face a $3 million fine that a judge ordered because of the 60-hour strike.

"The union did especially well, all things considered," said David L. Gregory, a labor relations expert at St. John's University. "Toussaint got everything he needed, and he also got what he needed in terms of the bigger picture. With the strike, he mollified the radical left in his union and helped placate the middle of his rank and file who were demanding to be treated with dignity and respect."

All this is not to say that the transportation authority did not achieve some of its major goals. By getting the union, Local 100 of the Transport Workers Union, to agree to have subway and bus workers pay 1.5 percent of their wages toward health premiums, the authority took an important step to rein in soaring benefit costs. That provision is expected to save the authority $32 million a year. Not only that, the union agreed that its workers' contribution toward their health premiums might increase if the authority's health costs continued to climb.

At first glance, the authority seems to have embarrassed itself over pensions, the issue for which it appeared to draw its firmest line in the sand.

To bring its fast-rising pension costs down to earth, the authority first pushed to raise the retirement age for future employees, to 62 from 55, and then demanded that future workers contribute 6 percent of their wages toward their pensions. Finally, after Mr. Toussaint said he would never sell out the union's "unborn," the authority pulled its pension demand off the table - a move that state mediators proposed to persuade the union to end its walkout.

Once the deal was announced it immediately became clear that the authority had not only scrapped its pension demands, but also agreed to a pension reimbursement that union officials say will put more than $150 million in workers' pockets. (That amount will come out of the pension funds, but the cost to the authority could be as low as $12 million if actuaries conclude that the pension plans remain adequately financed.)

"It's a very good deal," said John Paul Patafio, a bus driver in Brooklyn. "We went in with them on the offensive on pensions, and we came out of it with pension reimbursements. It's a total reversal."

Nonetheless, Professor Gregory said the authority had achieved one of its - and the mayor's and governor's - main pension goals during the dispute. "The M.T.A., as a representative of public employers, has achieved an important objective: It has put the issue of soaring public-employee pension costs front and center in the public consciousness," Mr. Gregory said.

That, he said, might pave the way for the State Legislature to enact a pension law that reduces pensions for future government workers and cuts government pension outlays.

One part of the settlement could prove a boon to Mayor Michael R. Bloomberg, who, like the authority, is eager to rein in benefit costs.

"What happened on health care is an important precedent for the mayor in terms of the city's collective bargaining," said Charles M. Brecher, research director of the Citizens Budget Commission, a business-backed advocacy group. Noting that only a small fraction of city workers now pay a portion of their health premiums, Mr. Brecher said that if the city obtained an identical provision, with workers contributing 1.5 percent of wages, it would save around $300 million a year.

Still, faced with demands to pay part of their health premiums, the municipal unions might dig in and say Mr. Toussaint accepted the concession only after the authority agreed to a huge sweetener on pension reimbursements.

Also, Randi Weingarten, president of the United Federation of Teachers, said unions might insist that the transit pact sets another pattern, one she sees as generous: raises of nearly 4 percent a year.

"If someone didn't do well in this settlement, it was probably the riding public," said Raymond D. Horton, a professor at Columbia Business School, complaining that the deal did little to hold down costs or increase productivity.

In early talks, the authority made a big issue of increasing productivity by, for example, calling for station agents to empty trash cans and station cleaners to change light bulbs and paint over graffiti. But the union got those demands dropped.

"The M.T.A. had three goals: health premiums, pensions and productivity," Mr. Brecher said. "They got one out of three - that's a far better batting average than many people get in bargaining with municipal unions."

Ed Watt, the transit workers' secretary-treasurer, praised the deal. "I think we have something that our members will ratify," he said.

He also defended the strike. "If you look at it from the context of, it was impossible to get such a contract without a strike, then obviously it was worth it."

In the view of E. J. McMahon, director of the Manhattan Institute's Empire Center for New York State Policy, the transportation authority failed an important test when it agreed to the pension reimbursements. This, he said, negated the punitive aspects of the fine.

"If you want to calculate, 'Is it a win for the M.T.A.?' you'd want the union to be less inclined to strike in the future," he said. "You want this to do something that makes the union members think, 'I don't want to do this again.' You don't seem to do that when you offset the fine for such a large number of workers."

Tuesday, December 28, 2004

Tragic story: Housing costs outpace incomes of "working poor"

From the Associated Press (via the New York Times).

Study Finds Housing Costs Outpace Incomes of the Working Poor
( AP )
Published: December 25, 2004

WASHINGTON, Dec. 24 - In only four of the nation's 3,066 counties can someone who works full-time and earns the federal minimum wage afford to pay rent and utilities on a one-bedroom apartment, an advocacy group on low-income housing has reported.
A two-bedroom rental is even more of a burden -- the typical worker must earn at least $15.37 an hour to pay rent and utilities, the National Low Income Housing Coalition said in its annual ''Out of Reach'' report, which was released on Monday. That is nearly three times the federal minimum wage of $5.15 an hour.

''You get pushed into a situation where some necessities don't get paid for'' because more salary must be devoted to housing, said Sheila Crowley, the coalition's executive director. ''For people on low-wage fixed incomes, that's a chronic way of life.''

About 36 million homes in the United States are rented. Roughly 80 percent of renter homes are located in nearly 1,000 counties in which a family must work more than 80 hours a week -- or more than two full-time jobs -- at minimum wage to afford the typical two-bedroom apartment, the coalition said.

The coalition's ''housing wage'' assumes that a family spends no more than 30 percent of its gross income on rent and utilities because anything more is generally considered unaffordable by the government.

The report quoted federal Bureau of Labor Statistics data that showed hourly wages rising about 2.6 percent over the past year, slower than the 2.9 percent rise in rents recorded in the Consumer Price Index.

To close the gap, the government must pour money into programs that help poor people pay rent, and must preserve and build more affordable housing units, Ms. Crowley said.

Data from the Census Bureau and the Department of Housing and Urban Development were analyzed to derive housing wage figures.

The report also factored in areas in which state minimum wages are, or may soon be, higher than the federal standard.

A one-bedroom apartment was considered affordable for minimum-wage workers in Crawford, Lawrence and Wayne counties in Illinois, where the housing wage was less than $6.29 an hour. The state minimum wage for most employees is $5.50 an hour, but will rise to $6.50 an hour on Jan. 1.

Washington County, Fla., was the fourth county listed as affordable for minimum-wage earners renting a one-bedroom apartment. Its housing wage was listed at $6.06 an hour. Florida voters in November approved raising the state minimum by $1 to $6.15 an hour, though the vote results are being contested.

The coalition listed the housing wage for a one-bedroom rental in Clay County, Ill. at $6.52 an hour, just above the state minimum wage about to go into effect. A typical one-bedroom apartment there rents for $250 a month, said William Herrick, executive director of the county's housing authority.

Least affordable was the San Francisco metropolitan area; rent and utilities for a one-bedroom apartment in Marin, San Francisco or San Mateo counties in California required a wage of least $22.63 an hour, tops in the nation.

The same three counties also led in the wage needed to afford a two-bedroom rental, at $29.60 an hour.

California topped all states in the hourly wage needed to afford a two-bedroom apartment, at $21.24. California was followed by Massachusetts, New Jersey, Maryland and New York.

States with more residents in rural areas were generally the most affordable, although no state's housing wage was lower than the federal hourly minimum wage of $5.15, which has not changed since 1997.

Saturday, December 18, 2004

Herman on "The economics of the rich"

The Economics of the Rich

By Edward S. Herman

Back in 1849, the British economist Nassau Senior chided those defending trade unions and minimum wage regulations for expounding an "economics of the poor." The idea that he and his establishment confreres were putting forth an "economics of the rich" never occurred to him; he thought of himself as a scientist and spokesperson of true principles. This self-deception pervaded mainstream economics up to the time of the Keynesian Revolution of the 1930s. Keynesian economics, though quickly tamed into an instrument of service to the capitalist state, was disturbing in its stress on the inherent instability of capitalism, the tendency toward chronic unemployment, and the need for substantial government intervention to maintain viability. With the resurgent capitalism of the past 50 years, Keynesian ideas, and their implicit call for intervention, have been under incessant attack, and, in the intellectual counterrevolution led by the Chicago School, the traditional laissez-faire ("let-the-fur-fly") economics of the rich has been reestablished as the core of mainstream economics.

The Natural Order

One of the Chicago School’s central innovations, the concept of a "natural rate of unemployment" (NRU), has entered mainstream thought and been given a respected place in textbooks and in the work of liberal economists. Alan Blinder has referred to NRU as the "clean little secret of macroeconomics," and Paul Krugman explained in the New York Times (Feb. 4, 1996) that the existing NRU of 5.5-6 percent made a faster growth rate unsustainable. (It is unsustainable because a lower unemployment rate allegedly means accelerating inflation, which must be curbed.) With liberal thought now combining the NRU model and strong belief in free trade, the difference between Chicago School and liberal economics has become faint.

These beliefs, and the policy agenda that they yield, embody deep ideological premises. Most important, they take the existing economic and political structures as given and defining a "natural order" to which policy must adapt. In much of his writing, for example, Krugman, although expressing concern over the increasing inequality of income, takes the income distribution as a given, because "its trend appears politically out of bounds." But if the rich are able to fix the political boundaries by their economic and political power, an economics that limits itself to considering options within this system of domination is quite clearly in voluntary servitude to the rich.

One consequence of this servitude is that it always yields "trickle-down" economic theory and practice. The "principles" and the political practicalities always require that policy directly serve the rich, with the general populace benefiting, if at all, only indirectly as spinoffs from the provision of adequate investor and entrepreneurial incentives. The structure of the political economy gives us a choice between Clinton and Republicans, both of whom also offer only trickle-down policy options. As this narrowly confined set of choices, and similar ones over the globe, has not brought about much trickling down to the masses over the past several decades, the intellectual "problem" for the economists is to prove to the non-beneficiaries that this is the best of all feasible worlds. As the economist Joan Robinson has pointed out, "It is the business of economists, not to tell us what to do, but show why what we are doing anyway is in accord with proper principles."

The economics of the rich evolves over time in accord with changing conditions. As the rich develop new wants, and find earlier structures and policies obsolete, economists make appropriate adaptations. If the powerful want a huge military-industrial complex (MIC) and sponsor a series of National Security States to provide a favorable business climate abroad, the economists will not object, but will take these as policy givens, necessary and proper responses to external factors, like the Soviet Threat. If the Threat disappears, but the MIC continues to command vast resources, the economists still remain quiet; as in the case of the increasing inequality of income, the trend here will also be "politically out of bounds." If the business community rebels against constraints on bigness and government regulation of food, drugs, workplace safety, and the environment, the Chicago School and other economists throw up analyses that justify higher concentration and broad deregulation, and much of the rest of the profession follows in line. Those who fail to accommodate are marginalized.

The support given brutal dictatorships like Pinochet’s in Chile by numerous members of the Chicago School (and other economists) goes beyond merely taking corporate interests and imperial needs as givens. These economists identify completely with the elite, and a class war that employs large-scale torture and murder not only doesn’t bother them, it is seen as a process of creative destruction. Pinochet’s terror, which decimated organized labor and other intermediate groups interfering with business "freedom," helped establish a workable natural order and set the stage for the growth that Chile—or rather the Chilean elite—now enjoys (for the most recent apologia, see Gary Becker, "Latin America Owes A Lot To Its ‘Chicago Boys’," Business Week, June 9, 1997). This growth, regularly exaggerated by measurements from inappropriate bases (like the 1982 trough), has been accompanied by a fall in the wage share from 42.7 percent in 1970 to 33.9 percent in 1993 and an increase of those in poverty from 17 percent in 1970 to 28.4 percent in 1994.

Why do the economists serve the rich? For one thing, the leading economists are among the rich, and others seek advancement to similar heights. Chicago School economist Gary Becker was on to something when he argued that economic motives explain a lot of actions frequently attributed to other forces. He of course never applied this idea to economics as a profession, but it is hardly coincidental that economic ideas shifted so markedly in the post-World War II years in ways that fitted well the changing demands of business and financial interests. The institutional mechanisms supporting such changes—free enterprise chairs, funded research, consultancies, think tank access, etc.—have grown enormously and constitute an "effective demand" that should elicit an appropriate supply response (although this direct influence is by no means the sole factor explaining the evolution of economic thought).

The mainstream media fit into this picture very comfortably. They are a part of the corporate system, owned by the wealthy, advertiser funded, ever more concentrated, and their managers and most prominent anchors, pundits, and reporters are also members of the monied elite. They serve establishment interests at least as consistently as the economists. This was well illustrated during the NAFTA debate of 1993, when the dominant media and pundits, as well as a very large fraction of the leading economists, lined up in fervent support of a policy that was pressed by the corporate community but consistently opposed by the general public, despite strenuous official and media propaganda.

The media gravitate naturally toward economists who speak elite truths that the media understand and favor and to which the public has already been conditioned. These economists are also given credibility as "experts" by their affiliation with corporate-funded think tanks. The rare think tanks that offer dissident ideas, most notably the Economic Policy Institute, are labeled "labor-backed" by the media and are used sparingly. An institution like the American Enterprise Institute, which receives a considerably larger fraction of its income from corporations than EPI gets from labor, is very rarely called "corporate backed." This is a further illustration of the fact that for the corporate media, corporate sponsorship of an economics of the rich reflects a natural order and the national interest.

The Economy Versus the People

Back in 1971, the military ruler of Brazil, General Emilio Medici, noted regretfully that "The economy is doing fine, the people aren’t." The Brazilian military dictator could make such a frank admission because there was no pretense that his regime was aiming to serve "the people." However, in a supposed democracy, and for an economics profession supposedly aiming to maximize the general welfare, it is awkward when the dichotomy between what the system does for "the economy" and "the people" is sharp and extends over many years.

The economics of the rich focuses on "the economy" and keeps the effects on the people in the background, hoping that nobody will notice. The word "economy" has an all-inclusive sound, and policies improving the "economy," "productivity," and the "growth in GDP" sound uncontroversial. "6 Years in the Plus Column for the U.S. Economy" (NYT, March 12, 1997) and "Spain Is Booming as It Moves to Meet Rules Of EU Monetary Pact" (WSJ, May 20) are characteristic. But this is misleading in a trickle-down system. As the evidence of the last 25 years shows, productivity can increase and the GDP can grow while a majority of the population loses out and the gains of growth are skimmed off by the elite. (The piece on booming Spain mentions deep in the article that "Unemployment remains staggering—at nearly 22 percent, the highest rate in the 15-nation EU.") An "economics of the people" would be very clear on how these economic changes affect the majority; in the economics of the rich, we focus instead on "the economy." Gary Becker, in his accolade to the Chicago Boys for their contribution to Chile’s booming conditions, mentions that a recent World Bank study shows remarkable inequality in Latin America, which he attributes to inadequate "schooling and other human capital investments in the very poor." That the sharp rise in numbers of very poor and inadequate human capital investments were implicit in the Chicago-Pinochet policy of class warfare is inadmissible in Becker’s contorted social science.

Another semantic support for the economics of the rich is the distinction frequently made between policies serving "the economy" and those based on "political" decisions, the implication being that the former are politically neutral. This was recently illustrated in the discussion of Tony Blair’s shifting of the control over monetary policy to the Bank of England. According to the New York Times, "By giving the Bank of England the power to set short-term interest rates, Mr. Blair immediately removed politics from interest rate decisions and went further than...Margaret Thatcher or John Major, had been willing to go" (May 7, 1997). This embodies a fallacy: the Bank of England’s choices are inherently political, and will reflect the politics and political influences affecting the Bank’s controllers. By transferring power from democratically elected representatives to Bank officials—who are more consistently sensitive to the demands of the financial interests than politicians—Blair was assuring the British elite of his abandonment of a social democratic agenda. Alan Greenspan’s decisions on the interest rate and inflation/unemployment balance are not politically neutral and concerned only with the "economy"—they reflect his (and his colleagues, and the bankers) view of proper policy and entail highly controversial value judgments and weightings.

A similar fallacious dichotomy is expressed in the title of a Wall Street Journal article: "Trust in Markets: Antitrust Enforcers Drop the Ideology, Focus on Economics" (Feb. 27, 1997). The title of the article points to an internal contradiction, as there is an ideological element in "trusting" markets just as there is in incorporating non-economic considerations into antitrust. But the article assumes that a faith in markets and disregard for the social and political effects of giant size is not ideological. This get us back to the notion that markets are the natural order of the human condition, and that government actions not serving the profit motive are unnatural.

Markets Versus Workers

The economics of the rich demonstrates its values very clearly in its stress on the market and inattention to the concerns and condition of workers. Most newspapers no longer have a reporter assigned exclusively to labor, and major trends affecting workers, such as the corporate war on unions over the past 15 years, the frequent use of replacement workers in strike-breaking, the Pittston and Caterpillar strikes, and the rise of temporary work and underemployment, have been underplayed. The downward trend of wages and increased worker insecurity have received relatively little attention, which is incompatible with the notion that the press is truly concerned with the general welfare. Just as labor news is sparse and has shrunk over the years, so stock market news and celebration of its gains and heroes has grown. This is the economic perspective of the rich.

While wage increases are the means by which ordinary citizens improve their economic status and share in the benefits of productivity increases, investors, business firms and financial institutions see wage gains as reducing profit margins and spurring inflation. The investor-business perspective dominates media coverage of these issues: wage increases are seen first and foremost as threatening higher business costs—"US wage rises mar productivity gains," reads a headline in the Financial Times (May 8, 1997). A front page article in the New York Times was entitled "Markets Surge As Labor Costs Stay in Check" (April 30, 1997), featuring the conflict between wage increases and "market" prosperity. The emphasis on labor as a cost of production and excessive wage increases as a threat is a throwback to mercantilism; workers are seen as a means, not an end.

This point is reinforced by establishment attitudes toward the growth of worker insecurity. Alan Greenspan was quoted recently as saying, very matter-of-factly, that "job insecurity" was the most important factor explaining why wages were not rising. But insecurity is a serious negative factor in people’s lives. If the happiness and welfare of ordinary citizens was the central objective of public policy, this feature of the workings of "the economy" would be considered bad and in need of rectification. An "economics of the people" would have treated Greenspan’s remark with indignation. For the mainstream economists and media, however, his statement was not worthy of comment.

It should be noted that although the economics of the rich views wage increases with dread, the rich are sensitive to accusations that the system is not doing well by workers. This causes their spokespersons to feature news of wage gains and job growth, while keeping negative evidence buried. As an illustration, when wages rose 1 percent in the first quarter of 1996, this was front page news in the New York Times (May 1, 1996); but when the Labor Department reported a fall in real wages of 2.3 percent in June 1995, possibly the largest drop "since the 1840s," this was on page four of the business section of the paper (June 23, 1995).

The Sublimity of the Market

In the economics of the rich the market is sublime, the state is a threat. This of course does not preclude the support of massive state intervention where this is serviceable to business enterprise; these are the "exceptions" and "givens" currently fixed by the political economy. A Milton Friedman, when criticizing government intervention, always excludes the MIC, and the business community and media are also remarkably selective in their harangues on the evils of government.

But that the free market and free trade are wonderful for ordinary folk, and for Russia and Mexico, is assumed by the economics of the rich, and explains the near universal support for Yeltsin and Russian privatization, Salinas, Zedillo and NAFTA, GATT and the WTO.

Since the market supports giant media mergers and the Telecommunications Act of 1996—with electoral money and enthusiastic trading action—these are treated kindly in the mainstream media and receive significant backing by economists. There is the pretense that competition prevails among these behemoths, or will soon if we unleash them, and besides they need giant size to compete in the national interest in the global marketplace.

The New York Times house economist, Peter Passell, reflects well the changing structure of the economics of the rich, nowhere better than in his accolades to free trade, cost-benefit analysis, the Telecommunications Act of 1996, and free competition in broadcasting. On the last issue, Passell outdid himself recently with accolades to the auctioning off of the radio spectrum ("Radio spectrum sales seem a success. Why the attack?," May 29, 1997) and an attack on regulation of broadcasting ("Big Brother wants to manage the broadcast spectrum again," Feb. 6, 1997). In both articles Passell relies heavily on claims by Peter Pitsch, an economic consultant who advised Reagan’s notorious FCC chair Mark Fowler during the years when the Fairness Doctrine was killed and toy manufacturers given the go ahead to produce childrens’ programs. In the first piece, Passell asserts that the auction of the radio spectrum is "widely seen as a raging success, accelerating the telecommunications revolution and raising more than $20 billion for Uncle Sam." It is surely seen as a raging success by the participating market operators, but Passell gives not one iota of evidence that it has benefitted the public.

As for his attack on broadcasting regulation, the performance of the "market" in broadcasting over 70 years of U.S. experience shows its deadly effects on the "public sphere," children’s programming, and even the quality of entertainment (see Herman and McChesney, The Global Media: The New Missionaries of Corporate Capitalism). Ignoring this evidence, Passell takes it as an act of faith that the market works to perfection here as everywhere.

Urgency of a Balanced Budget

The economics of the rich calls for a balanced budget at this stage of history. During the Reagan years, when the national debt almost tripled in size, budget balancing was not considered all that important, because Reagan was cutting the taxes of business and the wealthy (i.e., helping create an "entrepreneurial culture") and pouring money into the MIC, so that the deficits were financing worthy endeavors. Following this era of elite windfalls and Potlatch, the problem becomes keeping the lid on and eventually shrinking further the welfare state, while protecting the MIC and squeezing in some further benefits for the haves. This is tricky, as the neglect of the infrastructure and long stagnation/decline of wages and further effects of welfare "reform" intensify the need for social expenditures. At the same time, protecting the MIC and exacting further tribute for the wealthy runs counter to the emphasis on balancing the budget.

Not to worry. There is a consensus of the rich that while balancing the budget is urgent, achieving it requires compromises on "all sides." The poor, having no weight in the political system, are not one of the "sides" to be accommodated. Thus, despite the poor having taken budgetary punishment for many years, the new balancing of the budget will be built on their backs (and cutbacks in non-corporate entitlements more broadly). Forcing a balance will exert a deflationary influence, supplementing Greenspan’s monetary policy efforts to keep unemployment high and wage rates restrained, and the need to balance will preclude helping the poor. Of course, they could be helped by increasing capital gains tax rates, high bracket personal income taxes, estate taxes, and corporate taxes, or by cutting MIC budgets and corporate welfare. But these are the "givens" of the economics of the rich and outside the political boundaries of the feasible. In fact, in the wonderful new budget compromise of "all sides" capital gains and estate taxes will be reduced. So the mainstream media and economists largely ignore these political givens, challenged only by "extremists."

Attack on Entitlements

It is also the consensus of the rich that entitlements must be cut back. Not corporate and MIC entitlements, but social entitlements of ordinary folk. Led by Pete Peterson and the Concord Coalition, the corporate think tanks, and mainstream pundits, it has become the consensus wisdom that Social Security and Medicare/Medicaid are almost broke and that the coming into retirement age of the baby boomers 20-30 years down the road will bust the budget. This is the one case where the economics of the rich takes the long view and concerns itself now with future prospects (in contrast, e.g., with environmental issues). Their case is also built on unreasonable assumptions regarding productivity growth and other matters; in fact, on plausible assumptions there is no social security crisis even 50-70 years from now (see my "The Assault on Social Security," Z Magazine, Nov. 1995, and Dean Baker, "Robbing the Cradle," Economic Policy Institute, 1995). The threat of Medicare/Medicaid cost growth is real, but it is based in good part on the crisis in the medical care system at large, which the economics of the rich does not choose to address.

The emergence of a consensus that the threat of entitlements—for ordinary people—is very serious and needs urgent attention has been greatly helped along by liberal economists, notably Krugman and Lester Thurow. Krugman had a very positive and extremely ignorant and superficial review of Peterson’s book, Will America Grow Up Before It Grows Old?, in the New York Times Book Review of Oct. 20, 1996. More important, Thurow’s "The Birth Of a Revolutionary Class" (subhead: "Today’s elderly are bringing down the social welfare state and threatening the nation’s future"), in the New York Times Magazine of May 19, 1996, is a strong contender for the most damaging to progressive causes of any article published so far in the 1990s. Thurow alleges that "Today, spending on entitlements plus interest payments (most of it accumulated in recent years to make payments to the elderly) take 60 percent of total tax revenue....expenditures on the elderly are squeezing government investments in infrastructure, education and research and development—from 24 percent to 15 percent of the Federal budget in 20 years." A problem with these claims is that Social Security has been in surplus up to now, so that there is no way that the recent growth of interest outlays could have been to "make payments to the elderly" or that such elderly demands were squeezing the social budget.

Later, Thurow states that "advocates for the elderly argue that Social Security is running a surplus and, hence, needs no restructuring. But that is an illusion. If the government is running an overall deficit, it is irrelevant whether one sector has a ‘surplus’ because it is credited with collecting more taxes than it needs. What matters is what is driving the expenditure side of the budget." Again, this is complete nonsense—"the expenditure side of the budget" cannot be under pressure from an elderly sector of the budget that is in surplus and thus allows more non-elderly- oriented outlays than otherwise.

Thurow never suggests that social budgets might have been cut back by deliberate Republican and New Democrat policies to shift incomes and outlays from the poor to the rich and business community. He effectively rewrites fiscal history to shift blame from Reaganomics to the elderly. "Expenditures on the elderly have fundamentally altered our fiscal systems. In the 1960s, governments generated what was then called the fiscal dividend. However large its deficit, a government could generate a budgetary surplus simply by doing nothing for a few years. Even with rapid economic growth and no new programs, government spending rises faster than tax revenues." The opening sentence suggests that this structural deficit resulted from Social Security, which is false—it happened because of the huge Reagan era tax cuts, ignored by Thurow. Government spending also rises rapidly now because of inflating medical costs. Thurow mentions this, but he does not tie it to the nature of the U.S. medical system and the failure to reform it—he prefers letting the blame for such inflation fall on the elderly.

Nowhere does Thurow ever suggest that the business community has any political power and that Republican and New Democrat policy toward social budgets (and Social Security) might be influenced by corporate priorities. The only political force mentioned is the elderly lobby; the only class war he recognizes is the (ersatz) war of the elderly against the victimized non-elderly.

Where the rich are united, as in support of NAFTA, an imperial-sized military establishment, media commercialization and concentration, and a slashing of welfare state entitlements, the mainstream media and leading economists always provide a helping hand. This may be in the form of strategic silences or the explicit formulation of justifying principles. In a free country like our own these silences and rationalizations are contested, but on the margins and with minimal reach to ordinary citizens who might be attracted to an "economics of the poor." The problem for the challengers is how to extend that reach to their natural but inaccessible constituencies.

Friday, December 17, 2004

Buying into failure

Buying Into Failure

Published: December 17, 2004

As the Bush administration tries to persuade America to convert Social Security into a giant 401(k), we can learn a lot from other countries that have already gone down that road.

Information about other countries' experience with privatization isn't hard to find. For example, the Century Foundation, at, provides a wide range of links.

Yet, aside from giving the Cato Institute and other organizations promoting Social Security privatization the space to present upbeat tales from Chile, the U.S. news media have provided their readers and viewers with little information about international experience. In particular, the public hasn't been let in on two open secrets:

Privatization dissipates a large fraction of workers' contributions on fees to investment companies.

It leaves many retirees in poverty.

Decades of conservative marketing have convinced Americans that government programs always create bloated bureaucracies, while the private sector is always lean and efficient. But when it comes to retirement security, the opposite is true. More than 99 percent of Social Security's revenues go toward benefits, and less than 1 percent for overhead. In Chile's system, management fees are around 20 times as high. And that's a typical number for privatized systems.

These fees cut sharply into the returns individuals can expect on their accounts. In Britain, which has had a privatized system since the days of Margaret Thatcher, alarm over the large fees charged by some investment companies eventually led government regulators to impose a "charge cap." Even so, fees continue to take a large bite out of British retirement savings.

A reasonable prediction for the real rate of return on personal accounts in the U.S. is 4 percent or less. If we introduce a system with British-level management fees, net returns to workers will be reduced by more than a quarter. Add in deep cuts in guaranteed benefits and a big increase in risk, and we're looking at a "reform" that hurts everyone except the investment industry.

Advocates insist that a privatized U.S. system can keep expenses much lower. It's true that costs will be low if investments are restricted to low-overhead index funds - that is, if government officials, not individuals, make the investment decisions. But if that's how the system works, the suggestions that workers will have control over their own money - two years ago, Cato renamed its Project on Social Security Privatization by replacing "privatization" with "choice" - are false advertising.

And if there are rules restricting workers to low-expense investments, investment industry lobbyists will try to get those rules overturned.

For the record, I don't think giving financial corporations a huge windfall is the main motive for privatization; it's mostly an ideological thing. But that windfall is a major reason Wall Street wants privatization, and everyone else should be very suspicious.

Then there's the issue of poverty among the elderly.

Privatizers who laud the Chilean system never mention that it has yet to deliver on its promise to reduce government spending. More than 20 years after the system was created, the government is still pouring in money. Why? Because, as a Federal Reserve study puts it, the Chilean government must "provide subsidies for workers failing to accumulate enough capital to provide a minimum pension." In other words, privatization would have condemned many retirees to dire poverty, and the government stepped back in to save them.

The same thing is happening in Britain. Its Pensions Commission warns that those who think Mrs. Thatcher's privatization solved the pension problem are living in a "fool's paradise." A lot of additional government spending will be required to avoid the return of widespread poverty among the elderly - a problem that Britain, like the U.S., thought it had solved.

Britain's experience is directly relevant to the Bush administration's plans. If current hints are an indication, the final plan will probably claim to save money in the future by reducing guaranteed Social Security benefits. These savings will be an illusion: 20 years from now, an American version of Britain's commission will warn that big additional government spending is needed to avert a looming surge in poverty among retirees.

So the Bush administration wants to scrap a retirement system that works, and can be made financially sound for generations to come with modest reforms. Instead, it wants to buy into failure, emulating systems that, when tried elsewhere, have neither saved money nor protected the elderly from poverty.

Thursday, December 16, 2004

Wow this sucks all around
Conference mocks trial lawyers

By Ron Hutcheson
Knight Ridder

WASHINGTON - A White House conference on the economy turned into a forum for bashing trial lawyers Wednesday as President Bush and his allies demanded congressional action to limit lawsuits.

Surrounded by a panel of enthusiastic supporters, Bush said lawsuits against businesses and manufacturers are a drag on the economy and must be reined in. He called for a new system to deal with asbestos-related cases, and new limits on medical malpractice cases and class-action lawsuits involving groups of plaintiffs.

He chuckled and nodded as panelists at the two-day conference aired their contempt for trial lawyers.

``What you have today is business on one side, and you've got the trial lawyers on the other side. . . . You've got deep pockets colliding with shallow principles,'' Robert Nardelli, the chief executive at Home Depot, said to laughter from the audience and the president.

Nardelli was one of several Republican donors at the conference. The Center for Responsive Politics, a non-partisan group that tracks campaign spenders, found that conference participants donated nearly $195,000 to various Republican candidates or causes in recent years, including $40,000 to Bush.

The Association of Trial Lawyers of America issued a statement accusing the president of trying to strip away the rights of ordinary Americans while protecting insurers, manufacturers and the health care industry.

``President Bush's economic plan pretends that taking away the legal rights of American families will reduce health care costs. He unashamedly advocates legislation that would protect insurance-industry profits and prohibit any punishment for the makers of dangerous drugs like Vioxx, while penalizing your mother for being abused in a nursing home or your daughter for having her baby killed by medical malpractice,'' said Todd Smith, the group's president.

``That's not an economic plan. It is yet another giveaway to the insurance, drug, HMO and nursing-home industries.''

The hourlong session on ``the high costs of lawsuit abuse'' was one of several panels examining various aspects of Bush's second-term domestic agenda. With nary a word of dissent, the panelists -- all selected by the White House -- endorsed the president's plans to partially privatize Social Security, permanently extend his first-term tax cuts and limit lawsuits.

Vice President Dick Cheney warned about the looming financial problems of Social Security, declaring that ``younger people are understandably concerned'' about receiving benefits.

Treasury Secretary John Snow, acknowledging that shifting to personal savings accounts could require an unprecedented surge of new federal borrowing, predicted that ``Wall Street would applaud'' because the government would eventually meet its long-term obligations.

And in a separate forum, a top White House official ruled out the suspicion that Bush might agree to pay for his plan by raising payroll taxes on people with incomes above $90,000 a year.

Turning the president's agenda into law won't be easy. A variety of powerful interest groups are gearing up to challenge his ambitious plans. Even some of his fellow Republican lawmakers aren't sold on some issues. There's no consensus plan to revise the federal tax system, and some Republican lawmakers remain wary of any major changes to Social Security.

Some of the president's proposals to restrict lawsuits, including his plan to limit damages for pain and suffering in medical malpractice cases to $250,000, stalled in the Republican-controlled Senate in his first term.

At a separate session Wednesday in the Oval Office, Bush reaffirmed his support for a strong dollar and pledged to work to roll back deficits to create a stronger economic climate for the U.S. currency. He noted that the interest-rate increase the Federal Reserve approved Tuesday indicated Fed Chairman Alan Greenspan's concern as well.

``The policy of my government is a strong-dollar policy,'' Bush said, with visiting Italian Prime Minister Silvio Berlusconi at his side. ``We believe that the markets should make the decision about the relationship between the dollar and the euro.''

He added, ``We'll do everything we can in the upcoming legislative session to send a signal to the markets that we'll deal with our deficit, which, hopefully, will cause people to want to buy dollars.''

If the dollar were to suddenly plummet in value, that could cause foreign investors in U.S. stocks and bonds to rush for the exits. Such a development would send stock prices plunging and interest rates soaring. Some analysts believe the shock would be enough to push the country into another recession.

Sunday, December 12, 2004

Ex-marine describes widespread US war crimes

Killed Unarmed Iraqis, Ex-Marine Tells Hearing
By Marina Jimenez
The Globe and Mail, Canada

Wednesday 08 December 2004

U.S. deserter was right to flee his post, immigration and refugee board told.
A former U.S. marine testified yesterday that the U.S. military "murdered" civilians in Iraq and that he pumped 500 rounds of bullets into vehicles that failed to stop at military checkpoints.

Jimmy Massey, a former marine staff sergeant, told an immigration and refugee board hearing in Toronto that he and his fellow marines shot and killed more than 30 unarmed men, women and children and even shot a young Iraqi who got out of his car with his arms in the air.

"We killed the man. We fired at a cyclic rate of 500 bullets per vehicle," testified Mr. Massey, a marine for 12 years who was honorably discharged last year. "The company gunnery sergeant came running over and began yelling, 'You just shot a guy with his hands up.' "

Mr. Massey testified in the refugee claim of U.S. army deserter Jeremy Hinzman, 26, who sought asylum in Canada after his application to be a conscientious objector was rejected. Mr. Hinzman said he did not want to be deployed to Iraq with his 82nd Airborne Division because he feared he would be forced to commit war crimes and atrocities in a conflict he considered illegal.

IRB member Brian Goodman has said he won't consider evidence about the legality of the U.S. military campaign in Iraq, but yesterday Mr. Massey was permitted to testify about the killing of civilians.

The former marine said none of the Iraqis they shot had suicide bombing materials in their vehicles. He speculated that they didn't understand the hand signals and signage indicating they should stop.

On another occasion, marines reacted to a stray bullet by killing a small group of unarmed protesters and bystanders, said Mr. Massey, who said he has nightmares and posttraumatic stress disorder. "I was deeply concerned about the civilian casualties," he said. "What they were doing was committing murder."

His testimony bolstered that of Mr. Hinzman, who said earlier the Iraqi conflict was considered "a new kind of war" and soldiers believed they were "going to Iraq to jack up [kill] some terrorists."

"We were told to consider all Arabs as potential terrorists . . . to foster an attitude of hatred that gets your blood boiling," said the former paratrooper, adding he did not want to be involved in capturing Iraqis who would not be afforded the rights of due process or of the Geneva Conventions.

Mr. Hinzman said he went public with his asylum bid and requested that the board hearing be open because he feared that otherwise Canadians would find his claim to be a "preposterous proposition."

"I didn't know how it would be dealt with. I thought they would say, 'You're an American, what the hell are you doing? Go home," Mr. Hinzman said. "By being public, I could ensure it would be handled openly and fairly."

After his application to be considered a conscientious objector was rejected, Mr. Hinzman fled the 82nd Airborne Division in Fort Bragg, N.C., in January, 2004, and sought asylum in Toronto with his wife and two-year-old son.

Mr. Hinzman said he requested conscientious-objector status and not a discharge from the army because he wanted to keep his commitment to serve, and exercise the option of being declared a non-combatant. Although he now understands he could have appealed his conscientious-objector application all the way to the U.S. Supreme Court, he didn't know this at the time.

Mr. Hinzman's case is the litmus test for four other U.S. army deserters who have made similar claims.

Jeffry House, Mr. Hinzman's lawyer, says it will be difficult to prove his client would be persecuted in the United States, where he could face a court-martial and one to five years in a military prison for deserting. "Wrongful prosecution is persecution," he said. "It would be wrong to prosecute someone who doesn't want to participate in atrocities or in an illegal war. A conscientious objector should not be forced to fight."

Janet Chisholm, a government lawyer, said her research shows that eight U.S. army deserters between 1990 and 2000 were treated leniently, receiving on average one-year sentences in military prison. In May, 2004, Staff Sergeant Camilo Mejia Castillo of the Florida National Guard was sentenced to one year for desertion.

Mr. Hinzman said it would be unjust to serve even one day in a military prison for refusing to participate in an illegal conflict. He said although he doesn't condone violence, he didn't object to the U.S.'s military invasion of Afghanistan, because it was in retaliation for the terrorist attacks of Sept. 11, 2001.

Saturday, December 11, 2004

The smearing of Dr. Graham

Lawmakers Press FDA on Whistleblower
by Paul Recer
Published on Saturday, December 11, 2004 by the Associated Press

WASHINGTON - Twenty-two members of Congress signed a letter Friday demanding information on reports that FDA whistleblower David Graham was being punished by Food and Drug Administration officials for his outspoken testimony before a Senate committee.

The letter, circulated by Rep. Bart Stupak, D-Mich., and sent to acting FDA head Lester M. Crawford, said the members of Congress wanted "to express our strong dismay at recent reports about efforts taken by some at FDA to discredit and smear Dr. Graham."

"This shameful behavior by management cannot continue and we demand you put a stop to it," the letter said.

Graham, who works in the FDA's office of drug safety, testified before a Senate committee last month that the FDA fumbled in its handling of the arthritis drug Vioxx and had mishandled safety problems with five other widely used drugs.

The FDA rebutted Graham's testimony with filings on the agency Web site. An FDA official also sent e-mail messages to the medical journal Lancet expressing concerns about a Vioxx study by Graham that the journal was preparing to publish. Eventually, Graham withdrew the paper after he could not obtain a clear approval from the FDA for its publication.

Additionally, the Government Accountability Project, a whistleblower support group, said Graham was the target of "rabid bureaucratic backlash." The head of the organization said FDA managers phoned with accusations of scientific misconduct against Graham.

In the letter sent to Crawford, the members of Congress said that if reports of these actions against Graham are true, then they are "out of line and may very well be illegal."

"Your treatment of Dr. Graham," the letter said, "undoubtedly has had a chilling effect on the willingness of FDA employees to speak up and disagree when they believe the public's health is at risk."

The letter asked for assurances that Graham will keep his job in the office of drug safety and that "the smear campaign waged by some within the agency is thoroughly investigated and that appropriate action is taken against those who were involved."

Kathleen Quinn, a spokesperson for the FDA, said the agency would not comment.

"The FDA does not common on personnel matters," she said.

In addition to Stupak, those signing the letter were Reps. Chris Smith, R-N.J.; Dan Burton, R-N.J.; Sherrod Brown, D-Ohio; Ed Markey, D-Mass.; Rosa DeLauro, D-Conn.; Elliot Engel, D, N.Y.; G. K. Butterfield, D-N.C.; Pete Stark, D-Cal.; David Obey, D-Wis.; James Oberstar, D-Minn.; Carolyn Kilpatrick, D-Mich.; Jim Moran, D-Va.; Donald Payne, D-N.J.; Gary Ackerman, D-N.Y.; Anthony Weiner, D-N.Y.; Jim McGovern, D-Mass.; Betty McCollum, D-Minn.; Susan Davis, D-Cal.; Jan Schakowsky, D-Ill.; John Conyers, D-Mich., and C.A. Ruppersberge, D-Md.

Possibility of a Military Draft Of Doctors Worries the AMA

Possibility of a Military Draft Of Doctors Worries the AMA
By Christopher Windham

8 December 2004
The Wall Street Journal

The Selective Service System said it is reviewing a little-known contingency plan for drafting physicians, nurses and other health professionals, causing concern at the American Medical Association, which voted yesterday to communicate with the agency on the issue.

The plan, called the Health Care Personnel Delivery System, was authorized by Congress in 1987 to handle an emergency need for medical personnel during a conflict. About 3.4 million male and female health-care workers ages 20 to 44 would be expected to register with the Selective Service if the president called for the plan to be put into action, and Congress approved.

A paper published this year in the Wisconsin Medical Journal, by Wisconsin Army National Guard State Surgeon Col. Roger A. Lalich, said that, though a general draft is not likely to occur, a physician draft is "the most likely conscription into the military in the near future." A Selective Service newsletter last year expressed a similar view.

This week, the Defense Department repeated its prior position that the military health system has performed "superbly" in Iraq and Afghanistan and there is no need for a medical draft.

Still, some doctors fear a medical draft could be enacted, and that it would weaken hospitals and clinics, which are coping with shortages of physicians and nurses. A draft would be particularly disruptive, doctors say, to private practices and rural medical facilities, which may rely more heavily on individual doctors. Moreover, medical students worry that a draft would jeopardize their academic status and hinder their ability to repay education loans.

Yesterday, the AMA's policy-setting body voted to accept recommendations from an internal report that urges the group to monitor the situation and work with the Selective Service to address such questions and concerns regarding implementation of the draft program.

"People are concerned that it might be a doctors' draft," said Sandra F. Olson, chairwoman of the council of medical education for the AMA.

The current draft plan resulted from legislation that requires the Selective Service to have a "structure" for registering and classifying health-care professionals. If authorized, about 36,000 health-care workers could be selected from 60 specialties, including anesthesiology, mental health, emergency medicine and neurology. Akin to a general conscription, selection would start with the youngest registrants.

In September there were about 8,000 active-duty medical personnel and 3,000 reservists deployed in Iraq and Afghanistan. Though the percentage of physicians activated from reserve components has increased since Sept. 11, 2001, a Defense Department spokesman said he knows of no plans to deploy additional medical personnel to Iraq or Afghanistan.

Monday, December 06, 2004

Tough times ahead for women's right to choose

U.S. Senate looking better to opponents of abortion
Robin Toner
The New York Times
3 December 2004
International Herald Tribune

GIs suing Defense Dept on "Stop Loss" policy

From the New York Times. This could become a trend, as many soldiers who have completed their missions have been recalled and many reservists are being forced to stay beyond their contract. It is true that in WWII there were many GIs recalled to duty. But what is different about Iraq is the fact that the "war" is over, and the soldiers are now being asked to support a US puppet government against a growing popular uprising against occupation. What is the endgame? Will the uprising lose steam after elections are held next month. Somehow, this seems unlikely.

8 Soldiers Sue Over Army’s Stop-Loss Policy

Friday, December 03, 2004

Kuttner vs. Norberg -- it isn't even close

Check out this debate between liberal economist/journalist Robert Kuttner and capitalist/libertarian Johan Norberg from Sweden. The debate appears to have been hosted by Cato, but despite the home-field advantage Norberg goes down early. It really wasn't a fair fight, with Norberg forced to repeat the same tired talking points over and over again, basically amounting to "the government shouldn't intervene whatsoever in the economic sphere, even in the case of market failures, depressions, Enron scandals, etc." Ayn Rand would have been proud. Unfortunately, he makes many factual errors which Kuttner mercilessly points out, and it gets pretty ugly early on.

Norberg tries to argue that we should be happy to trade with any country, regardless of whether they offer up even the most minimal human rights, labor or environmental protetions because the free-market will sort it out.

An example of Norberg's almost unbelievable naivety being is displayed in this passage:

"There are a lot of tough decisions facing a country carving out trade rules, such as the extent of intellectual property rights, or the trade-off between environmental protection and material living standards/poverty reduction. Even though issues like this often relate to trade, there is no reason to allow them to stand in the way of trade. Because no matter what kind of policies our trading partners choose, we benefit by trading freely with them. The simple reason for this is that voluntary exchange brings benefits to both parties, otherwise they would not make the deal.

But you are skeptical, Mr. Kuttner. Your premises are revealed when you write that "we've spent a hundred years trying to balance the rights of workers and consumers against those of corporations". This gives the impression that corporations and workers/consumers are engaged in some sort of eternal conflict, perhaps a class struggle. This is a hopelessly outdated notion. The fact is that in a liberal, market-based society the corporations only make their money by giving consumers what they want, at a good price. With our purchasing power, we set the agenda, and corporations are forced to find better, cheaper and more efficient ways of giving us what we want. When backroom operations are moved to India, or to Northern Sweden, corporations reduce production costs, and create fantastic possibilities for people living in those regions."

Note that the thred is in reverse chronological order, like with blogs, so scroll all the way to the bottom of the page to see the beginning of the debate.

U.S. using depleted uranium in Iraq

Weapons of Self-Destruction

Frightening article about what may be in store for tens of thousands of G.I.s when they return home from Iraq.

Wednesday, December 01, 2004

Capital punishment and institutionalized racism in the U.S.

This study by Amnesty International is about a year and a half old, but is still worth reading. The statistics may surprise you. Although I am not opposed to the death penalty on principle, the system as it exists in most of the US is criminal and unjust.

And here is a study from 1998 by the Death Penalty Information Center called "The Death Penalty in Black and White".