Friday, March 31, 2006

Workers not sharing in their corporate employers' success

Dow Jones/Marketwatch reports two eye-opening statistics. First, Commerce Department data released last week show U.S. corporate profits have increased 21.3% in the past year and now account for the largest share of national income in 40 years. Second, the share of national income going to wage and salary workers has fallen to 56.9%. Except for a brief period in 1997, that's the lowest share for labor income since 1966.

Discuss amongst yourselves.

New NGO report analyzes why Latin America doesn't like the US

Writing in InterPress News, Jim Lobe discusses a new report put out by the Latin America Working Group Educational Fund which shows that there are in fact many other reasons why Latin Americans don't like Uncle Sam so much, besides our pushing Structural Adjustments and destructive trade policies on their governments. One other major reasons is actually our blatant disregard for international law and human rights.

You see, we have actually passed a law that bans certain types of economic aid to countries that "refuse to sign a treaty pledging that they would not turn over U.S. citizens to the International Criminal Court at The Hague."

Disaffection with Bush's human rights policies has been made particularly stark by the controversy surrounding the ICC, according to the report, which notes that Bolivia, Brazil, Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela have preferred to forgo millions of dollars in aid rather than bow to U.S. demands that they sign "Article 98" agreements exempting U.S. citizens from ICC jurisdiction.

Meanwhile, Washington's international economic stance has also harmed its image in Latin America, according to the study, which notes that its "unreflective, unbudging support" for neo-liberal policies and U.S.-style trade agreements that "have failed to deliver equitable development" has fueled the success of left-wing and populist candidates.

The administration's aid policies have also harmed Washington's image, the study argued, noting that while military assistance to the region has risen steadily since Bush took office in 2001, economic aid has stagnated.

Moreover, political considerations in aid decisions appear to have become more important. Not only has aid to countries that refuse to sign Article 98 agreements declined, but the two countries Washington considers most important to its war on terror -- Colombia, because of its internal war against leftist insurgents; and El Salvador, which has provided a steady supply of soldiers to the war in Iraq -- have been given the most military aid.


This is so pathetic and disgusting it boggles my mind. There are desperately poor Latin American countries that are being forced to turn down economic aid because of the outrageous strings that Washington has attached. With many of these countries' recent experiences with US-backed dictatorships, replete with death squads and disappearances, it's not really surprising that human rights is something these governments take seriously.

If you are a poor country and want to get aid from the leader of the free world, you better be ready to support an illegal and immoral war, agree to destructive trade policies and economic "reform" programs that help multinational corporations at the expense of your poor and most importantly you better be ready to give the US a free pass against any war crimes they commit by refusing to turn them in to the ICC.

Iran Watch

Joseph Cirincione from the Carnegie Endowment for International Peace reports that according to his sources, high-level political and military officials have already begun planning in earnest for a strike against Iran. He also sees a lot of similarities between how the Iraq invasion was marketed to the public, and how the Bush administration is now following the same propaganda model with Iran:

The unfolding administration strategy appears to be an effort to repeat its successful campaign for the Iraq war. It is now trying to link Iran to the 9/11 attacks by repeatedly claiming that Iran is the main state sponsor of terrorism in the world (though this suggestion is highly questionable). It is also attempting to make the threat urgent by arguing that Iran might soon pass a “point of no return” if it can perfect the technology of enriching uranium, even though many other nations have gone far beyond Iran’s capabilities and stopped their programs short of weapons. And, of course, it is now publicly linking Iran to the Iraqi insurgency and the improvised explosive devices used to kill and maim U.S. troops in Iraq, though Joint Chiefs Chairman Gen. Peter Pace admitted there is no evidence to support this claim.


I guess none of this is breaking news, but Ciricincione has a lot of street cred as an outsider perspective on security issues--this is different in other words than Sy Hersh or Normon Solomon reporting that war with Iran is imminent.

Unofrtunately, Cirincione's suggestions for averting a crisis are a bit umm...shall we say unrealistic? He counsels the administration to lay their cards on the table, and provide the public with evidence backing up their assertion that Iran is a decade away from having a nuclear bomb.

Considering the administration didn't even bother manufacturing evidence after the fact that Iraq had WMD, I really wouldn't expect too much in the way of supporting evidence. He states:

An accurate and fully understood assessment of the status and potential of Iran’s nuclear program is the essential basis for any policy. We cannot let the political or ideological agenda of a small group determine a national security decision that could create havoc in a critical area of the globe. Not again.


Sorry, Not. Going. To. Happen. As Chomsky and other observers of US imperialism have noted as far back as 2003, Afghanistan and Iraq were more or less trial runs for invading and colonizing countries in the oil rich and geopolitically important Middle East and Central Asia regions, respectively.

Siddharth Varadarajan wrote a recent article on the US's gambit for a Security Council resolution against Iran here.

Friday catblogging




Go ahead...make my day.

Thursday, March 30, 2006

Analyzing France's labor riots

I've been so snowed under between school and work that I haven't been able to follow a number of very important international news stories that are going on right now. One of them is clearly the ongoing riots in France regarding Chirac's decision to change the nation's labor laws so as to make it it easier to lay off employees under the age of 26 within the first two years of their employment.

Hopefully in the next few days I can add to this with some analysis of my own, but for now I recommend you read this short piece by Center for Economic Policy Research economist Marc Weisbrot (who is quite frequently cited here at Troubled Times).

He sums up his argument with this:

The idea that labor protections are the cause of European unemployment is part of an overall myth that Europeans would benefit from a more American-style economy. The U.S. economy is said to be more competitive, yet we are running a record trade deficit of more than 6 percent of GDP, and the European Union is running a trade surplus. The U.S. economy is supposedly more dynamic, but French productivity is actually higher than ours. Their public pensions, free tuition at universities, longer vacations (4-5 weeks as compared with 2 weeks here), state-sponsored day care, and other benefits are said to be unaffordable in a "global economy." But since these were affordable in years past, there is no economic logic that would make them less so today, with productivity having grown - no matter what happens in India or China.

French students and workers seem to have a better understanding of these economic issues than their political leaders. Hopefully, the wisdom of the crowd will prevail.


Go check out the entire piece.

Priorities: Corporate power vs. states' rights

The incomparable Nathan Newman has a great post up at the Progressive Legislative Action Network (where he is a policy director) about how "New proposals in a part of global trade law known as the General Agreement on Trade in Services could give global corporations the right under international law to challenge a host of state and local regulations."

Go check out the post here.

The homeland security President

According to testimony given to the Senate oversight panel for Homeland Security and Government Affairs yesterday, "the Washington region still lacks a strategic plan to guide preparations for any future attacks or to effectively spend hundreds of millions of homeland security dollars" four and a half years after 9/11.

You would think that the Bush administration, which effectively ran on and was elected on a campaign to defend the homeland against future terrorist attacks Cheney and FBI Director Mueller have repeatedly announced are inevitable, would be aggressively drawing up strategic plans to secure the most vulnerable, high-risk cities in the country. Washington, D.C. is considered the most likely place for al Qaeda to strike next and hell, Bush and Cheney even spend most of the year there.

But an article by the Washington Post informs the reader: "Although the Washington area is designated as high-risk, last year it had not spent $120 million of the federal anti-terrorism grants it received from 2002 to 2004."

Additionally, the Capital Region Homeland Security Strategic Plan that had been due in September of last year is still not ready and won't be ready until this August at the earliest. Clearly, defending the homeland is not the priority of the current administration, who will likely hide in an undisclosed location if G-d forbid D.C. is attacked. The question is: Can America afford to wait two and a half more years for the Bush administration's Department of Homeland Security to get its act together?

Wednesday, March 29, 2006

"Undermining the ownership society"

David Sirota has a great editorial in the San Francisco Chronicle discussing the role all three branches of the federal government have played in protecting corporate executives from accountability to their shareholders. He says:

[T]he Financial Times reported that "Merrill Lynch is poised to become the first investment bank to dedicate a team to advise companies on the growing threat of activist investors." Meanwhile, in an interview with Business Week this month, the U.S. Chamber of Commerce angrily denounced shareholders "who want to have some degree of leverage over companies."

The language is telling. Shareholders -- the actual owners of companies -- are now seen by executives as "threats" who dare to desire "leverage over companies" they own. That is seen as "causing trouble," and thus requiring "surveillance" by company management -- or worse, from America's corrupt government.


Make no mistake about it, this is all about accountability: CEO accountability for the company's share performance, for their labor practices, for having reasonable compensation structures, for major business decisions and so on. There is no law saying a large, successful company has to go public--if it wants, it can stay privately held and then focus only on generating wealth for the owner(s). But since many successful companies want to be able to grow by borrowing lots of money from investors, they decide to go public.

Nothing wrong with that, but with that decision come lots of strings attached (and for good reason). Once a company is public, it no longer exists to make the CEO, or even company founder, lots of money (although that usually happens after a successful stock float). The company now exists to make the shareholders money over the long-term.

So if shareholders want to exercise control over the company by launching dissident proposals during the company's AGM (annual general meeting) in order to protect their investment, well that's their right. Of course, Sirota neglects to mention that proxy solicitation firms have existed for a long time and are often employed by large institutional investors (insurance companies, university endowments, pension funds) to advise them on how to vote their shares on key decisions. On the flip side, management often works with these proxy firms, many of which have "investor relations" practices as well, to help sell their own proposals and counter dissident resolutions. Proxy battles are often won or lost due to these consulting firms.

Sirota is right that the government should absolutely level the playing field for all shareholders, both retail and institutional. But the government can't be relied upon to do the right thing, and frankly I don't think they will be the engine of change when all is said and done. I think the real catalyst will be big pension funds that start to care more about the long-term investments of their investors (labor unions, retired public sector employees and professors) and thus fight tooth-and-nail against exorbitant compensation practices for executives that underperform and will leave the company after a few years anyway. Some of these firms like CalPERS and CalSTRS have already stepped up, and I hope many more will continue to do so.

I used to work for a corporate governance rating agency, and I think that these unbiased agencies that assess public corporations' governance practices can play a positive role as well in terms of eliminating the asymmetric information and moral hazard problems with investing money into huge companies with oblique practices. Hopefully, these firms can eventually create market incentives for firms to improve their governance profiles--beyond what is merely required by regulators--in order to attract more investors.

But there are some things that need to change that are really fundamental to democratizing corporations and how they function. In order for a company's management to be incentivized to act in the shareholders' long-term best interest rather than their own, they need to be held accountable. And while large shareholders like Carl Icahn have their chance to have their voices heard once a year, the mechanism for providing regular oversight at a public company is the Board of Directors.

Unfortunately, in the US most directors are senior executives at companies in the same fields as the companies they are supposed to "oversee". It doesn't take an MBA to understand what a horrible conflict of interest this is--what motivation is there for a director to put the kabash on a ridiculous compensation scheme for one of their peers when it will weaken their own bargaining positions come evaluation time. This truly is the fox watching the henhouse. Additionally, it is not uncommon for "interlocks" or significant financial relationships to exist between directors and the corporation where they sit on the board. This is disclosed on the proxy statement, but since it is pretty common practice, it doesn't really raise too many eyebrows.

Conversely, in Europe many corporations have, gasp, union leaders or even rank-and-file employee representatives sitting on the Board, providing a little bit more diversity of opinion, and a lot more oversight in ensuring the corporation is not acting only in the CEO's best interest.

There have been plenty of studies demonstrating the link between strong corporate governance practices and long-term share performance, and US corporations have certainly improved their governance profiles post-Sarbannes Oxley. But compensation and board composition are still major areas that needs reform. A lot of this will need to be done by self-regulation, with market-forces acting as the incentives, and hopefully government can play a supportive role in creating good legislation in the future.

Tuesday, March 28, 2006

Scott Ritter is right

At a recent speech, former weapons inspector Scott Ritter made a very provocative, yet in my opinion correct judgement. He said that along with the media and government, the American public deserves some blame for the Iraq war.

I agree wholeheartedly, and I was initially supportive of the invasion on humanitarian grounds. It would be easy to wash my hands of it and blame the documented lies of the Bush administration as well as the uncritical coverage by the so-called liberal mainstream media (think Judith Miller from the NY Times as just one stenographer for the powerful). But at the end of the day, there was sufficient evidence in the public realm that an invasion was illegal, unjustified on security grounds and would result in a huge destabilization in the Middle East region. The problem was that many people, swept up by fear and anger post 9/11, wanted to feel proactive in the war on terror and Saddam made a perfect scapegoat--straight out of central casting.

The banality of evil is alive and well to some extent in 21st Century America, and the fact that Bush was reelected in 2004 only strengthens my argument: while the media and government (both parties) played huge roles, the American people, at the end of the day, deserve some measure of responsibility.

I'm curious to hear what you think about this.

Update: Doing a little more research on this, I came across this TIME Magazine poll conducted in October 2002. According to the poll, the American public:

Favor[ed] use of military to remove Hussein 67%
...but if substantial U.S. losses 54%
...but if substantial Iraq civilian losses 49%
...but if prolonged war 49%


I think this says a lot about how badly most Americans wanted war,despite the fact that the supporting evidence was shaky and even assuming it would be a long and devestating one.

Sunday, March 26, 2006

Latin America post-IMF

Mark Engler asks a very good, albeit rhetorical question: Will the US lose its influence on Latin American countries once they have finished paying off their IMF loans?

He notes:

"The IMF has lost a lot of clout in recent years, due in no small part to Argentina. Since taking power in the wake of the country's economic crisis, Kirchner has played hardball in negotiations with the IMF and private creditors. The strategy worked, allowing his government to negotiate a very favorable restructuring of its loans. Argentina standing up to the IMF was like an underdog knocking down the schoolyard bully. The aura of invincibility surrounding the Fund was dispelled, and the institution will likely never again inspire the same begrudging awe. Furthermore, as the failures of neoliberalism grow increasingly evident, creditors like the World Bank have been compelled to moderate their once-stringent conditions on loans."


He also points out:

"[T]he oil-rich government of Hugo Chávez in Venezuela has stepped forward to provide other Latin American leaders with financing they might otherwise have needed to beg from Washington. Venezuela already bought up $2.4 billion worth of Argentina's debt to help the country break free of the IMF, and Chávez has expressed a willingness to do more. This source of backup funds makes the governments of the Latin American New Left considerably less susceptible than before to threats of capital flight."


Finally:

"Cutting ties with the IMF is not just a regional phenomenon. Russia and Thailand have pursued strategies of early debt repayment, and Indonesia and Pakistan are among those now contemplating the move. Asian countries that were burned by the region's neoliberal financial crisis in 1997 are building up large cash reserves so that they will not have to go back to the Fund in times of economic downturn."


So what will the future bring for the IMF and the "Washington Consensus" once these Developing Countries are able to stand on their own two feet? My guess is that the IMF and its structural adjustment policies aren't going anywhere. There will always be countries with "market friendly" politicians on the verge of economic collapse that will need loans from multilaterals, despite the ultimately disastrous strings that come attached.

Saturday, March 25, 2006

Our Kitten Ella



Cute, isn't she?

Some weekend reading

Over at MyDD, Jonathan Singer notes that personal bankruptcies were up 30% in 2005 from the previous year. On the other hand, the number of billionaires in America is up 14%.

A new study from the Project for Excellence in Journalism has been released which analyzes the US media industry. Among its depressing findings:

At many old-media companies, though not all, the decades-long battle at the top between idealists and accountants is now over. The idealists have lost. The troubles of 2005, especially in print, dealt a further blow to the fight for journalism in the public interest. “If you argue about public trust today, you will be dismissed as an obstructionist and a romantic,” the editor of one of the country’s major papers told us privately. An executive at one of the three broadcast networks told senior staff members in a meeting last year that “the ethical anvil has been lifted,” meaning the producers could dispense with traditional notions of journalistic propriety.

One of the most celebrated editors in the country, John Carroll of the Los Angeles Times, stepped down in frustration in 2005, but only after taking weeks to persuade his successor not to join him. The most celebrated journalist still at ABC, Ted Koppel, left for cable, but only after announcing that neither cable news nor network news was amenable to the long-form work to which he aspired.

The most cogent explanation for why journalism in the public interest has lost leverage was probably offered by Polk Laffoon IV, the corporate spokesman of Knight Ridder. “I wish there were an identifiable and strong correlation between quality journalism … and newspaper sales,” he said. “It isn’t …that simple.” From here on, at many companies, the fight on behalf of the public interest will come from the rank and file of the newsroom, with the news executive as mediator with the boardroom. There are some notable exceptions, and journalists who work in those situations today consider themselves lucky. Meanwhile, at many new-media companies, it is not clear if advocates for the public interest are present at all.


The Los Angeles Times reports that the Bush administration's continued requests for hundreds of millions of dollars for large bases in Iraq are raising concerns over whether they are intended as permanent homes for U.S. forces.

Finally, former First Lady Barbara Bush is using the Katrina disaster to help her son Neil's software company make some more sales. She is truly shameless.

Friday, March 24, 2006

Debtor nation

James Wolcott talks about China and the UAE.

Quoting a report by Morgan Stanley Chief Economist Stephen Roach:

"From Beijing to Dubai, there is a growing undercurrent of economic anti-Americanism. The irony of it all is truly extraordinary: The US has the greatest external deficit in the history of the world, and is now sending increasingly negative signals to two of its most generous providers of foreign capital -- China and the Middle East. The United States has been extraordinarily lucky to finance its massive current account deficit on extremely attractive terms. If its lenders now start to push back, those terms could change quickly -- with adverse consequences for the dollar, real long-term US interest rates, and overly indebted American consumers. The slope is getting slipperier, and Washington could care less."

According to Wolcott: "The midterms will be fought not over cultural-war values like gay marriage or abortion, but over the sorts of economic and sovereignty issues Dobbs hammers on about every weeknight on CNN: the squeeze on the middle class; Washington's runaway budgets and the explosion in deficit; the gutting of pensions; the hollowing-out of America's industrial base; the war over immigration; globalization and free trade."

I'm not quite sure I agree with Wolcott. I think the midterm elections will end up revolving around the same irrlevant issues that decided 2004- the culture-war values like gay marriage and abortion. The economic issues that are obsessed over in great deal in the blogosphere are undercovered in the mainstream news. Many of these problems won't be addressed, I'm afraid, until it is already far too late.

"Transformative diplomacy" and the (overt) politicization of aid

Mark Engler from Foreign Policy in Focus has an excellent piece on the Bush administration's decision to formally roll USAID into the State Department:

As Engler notes:

Since its creation during the Kennedy administration, USAID has operated outside of direct State Department control. This allowed it to pursue long-term development programs that were not necessarily tied to the shifting geopolitical priorities of any one president. In practice, of course, U.S. foreign assistance has always been politicized. During the Cold War, aid was expressly deployed as part of the fight against Soviet Communism. But the formal independence of USAID helped the institution value its staff members' expertise in development over their ideological fervor.

In consolidating USAID under the State Department, the Bush administration is tying aid money to U.S. strategic interests in a far more overt manner. This is part of a wider trend. As Oxfam America argues, "[S]ince the attacks of September 11th there has been a drastic shift in U.S. foreign assistance that has blurred the lines traditionally separating development and humanitarian aid from political and military action."

The paradigm of "transformative diplomacy," unveiled by Secretary Rice in January, is the latest embodiment of this shift. It will include the redeployment of U.S. diplomats from Washington and European cities to countries in Asia and the Middle East. A main thrust of transformative diplomacy is a closer alignment of foreign aid with political concerns. Development advocates worry that this will mean that dollars for poverty reduction programs will become conditional aid used as payback for allegiance from poorer governments--those countries sufficiently eager to join a "coalition of the willing" or to sign a "free trade" pact.


It's not just the way foreign aid is being administered, it's also the criteria under which it is provided, or not provided, that is suspect.

In the case of the Millennium Challenge Account, one of the new programs created by the Bush administration, a country's "openness to international trade" is listed as one of the criteria used to select aid recipients. Openness is measured using an index provided by the arch-conservative Heritage Foundation. In Central America, leaders quickly got the message; observers in the region widely believed that receiving assistance from the account went hand in hand with supporting the controversial Central American Free Trade Agreement (CAFTA).


This is something I've been following with a jaundiced eye since it was first reported in January. Even if you think foreign aid should only be provided so as to further US foreign policy goals (as opposed to, say, fulfilling its duties as leader of the free world to help combat poverty, famine and disease) having these decisions determined by Condoleeza Rice will not improve our image in the world.

Wednesday, March 22, 2006

Bush drops the ball on his pledge to reform the tax code

John Irons from the Center for American Progress explains over at Thinkprogress:

Despite promises to tackle the issue, the administration has done nothing to improve the [tax] code, but has instead opted to bull forward with the same old policies that have done little to help the economy. The President’s tax reform panel released reform recommendations last year, but the panel’s co-chair, ex-Senator John Breaux, speculated that the recommendations “got put in a closet and they closed the door and they don’t know where it is.”

And despite years of being in control, congressional leaders have not pursued real reform – opting instead to cut rates primarily for the richest Americans.


Along with the Center for American Progress' CEO John Podesta, Irons authored a report last year on their suggestions for improving the tax code, and in particular making it more equitable for lower and middle class taxpayers.

Irons and Podesta propose taxing each kind of income according to the same rate schedule, regardless of whether the income is derived from wages, salaries, capital gains or dividends. "Our plan shifts the share of taxes away from the regressive payroll tax and onto a restructured income tax." He also calls for eliminating the Alternative Minimum Tax, in addition to "closing corporate and individual loopholes." All good suggestions as far as I can tell, although some of the specifics are probably not politically viable.

You can read the whole report, which I highly reccommend, here.

Congratulations to Howard Richman

Troubled Times would like to congratulate Howard Richman (my father-in-law) for winning the election last night for trustee of the village of Wesley Hills, NY. Along with Howard's running mate David Gantshar, they will be replacing two incumbent trustees, and have made open, accountable government the cornerstone of their election campaign.

While their opponents ran a negative, no-holds-barred campaign of misinformation and innuendo, Howard and David took the moral high road, and were rewarded by the people of Wesley Hills in an election that saw a remarkably high voter turnout. The high voter turnout, in fact, was a rebuke to the mayor of Wesley Hills' argument that a contested election was nothing more than an inconvenience for the electorate (the mayor supported the incumbent trustees).

Howard is a partner of Goldsmith, Richman & Harz, a medical malpractice law firm with offices in Northern New Jersey and Manhattan, as well as being an adjunct professor at Fordham Law. As you can imagine, he doesn't get a lot of sleep. Along with my father, who is a pulmanologist and will become president of Montgomery Hospital (in Norristown, PA, a suburb of Philadelphia) next year, Howard is truly an inspiration to me and I only hope I can achieve as much success as he has while keeping my family as my number one priority.

I'll be following the successes of Howard and David in improving the lives of all Wesley Hills residents, as well as the obstacles his opponents will surely throw in their way in order to preserve the status quo.

Tuesday, March 21, 2006

Rural India: The dark side of globalization

A sad story reported in the Independent (UK):

India's big companies talk of the country's agriculture as a massive untapped resource, with exceptionally fertile land, and tropical fruits, rice and spices that are considered among the world's best. Insiders say Reliance, one of the major players in India, is planning to move into the farming sector in a big way.

But out here in the villages, there is no sign of India's economic miracle yet. The people are still mired in grinding poverty. It takes seven hours to drive here from Delhi, but it feels like a journey back in time. The road gives way to dirt tracks and the gleaming imported cars that clog the city streets disappear, unable to withstand the rough roads.

Res ipsa loquitur

Just how much of a liar is Treasury Secretary John Snow? Just how detatched from reality is he? His own words speak louder than any amount of editorializing or fact checking.

From the Wall Street Journal yesterday:

WASHINGTON -- Confronting criticism of the Bush administration's economic record, Treasury Secretary John Snow said the widening gap between high-paid and low-paid Americans reflects a labor market efficiently rewarding more-productive people. But he insisted Americans are still broadly sharing in the economic expansion. "What's been happening in the United States for about 20 years is [a] long-term trend to differentiate compensation," Mr. Snow said in an interview with The Wall Street Journal last week. "Look at the Harvard economics faculty, look at doctors over here at George Washington University...look at baseball players, look at football players. We've moved into a star system for some reason which is not fully understood. Across virtually all professions, there have been growing gaps."

Mr. Snow said the same phenomenon explains why compensation for corporate chief executive officers has climbed so sharply. "In an aggregate sense, it reflects the marginal productivity of CEOs. Do I trust the market for CEOs to work efficiently? Yes. Until we can find a better way to compensate CEOs, I'm going to trust the marketplace."

Since the 1970s, CEO compensation has gone from 40 times to more than 300 times the average worker's salary, according to a study by Carola Frydman of Harvard University and Raven Saks of the Federal Reserve.

Mr. Snow, a former CEO of CSX Corp. who holds a doctorate in economics, said the administration intends to publicly challenge perceptions that typical workers and families haven't benefited much from the economic expansion. The extent to which the expansion has been broadly shared is "the new sort of battle line in the political arena," he said.

Economic output has increased at an annualized pace of almost 4% since mid-2003, and the unemployment rate has fallen to 4.8% from 6.3%. Despite that, polls show more Americans think the economy is worsening than think it is improving.
Mr. Snow distributed a fact sheet that showed after-tax income per person, adjusted for inflation, rose 8.2% from January 2001, when George W. Bush took office as president, through January 2006. The sheet also showed that per-person net worth -- total assets minus debt -- rose 24%, unadjusted for inflation, from early 2001 to the end of 2005. "People have more money in their pocket" and in their bank accounts, he said.

Mr. Snow's case relies on averages, which can be skewed by big gains among the wealthiest. Other data suggest the typical family has seen little advance in income or net worth since Mr. Bush took office. Census Bureau data show median family income -- half of families have income greater than the median, half have less -- fell 3.6% from 2000 through 2004. Incomes for the poorest families fell even further. The only group to gain was the family at the 95th percentile -- that is, richer than 95% of all families. Data for 2005 are unavailable.

Alan Krueger, a labor economist at Princeton University who served in the Clinton administration, cited Labor Department data that showed the real median wage rose 3% from 2000 to 2005. Gains were smallest for the lowest-paid workers and largest for the best-paid. "From the standpoint of the work force, it's been a very weak recovery," he said. Wage data don't incorporate the effects of taxes, investment income or government payments.

As for net worth, a triennial Federal Reserve survey found that the net worth of the median family rose 1.5%, after inflation, from 2001 through 2004. That is far less than the 17% increase from 1995 to 1998 and the 10% increase from 1998 to 2001. The survey wasn't conducted in 2000 or 2005.

Robert Gordon, an economist at Northwestern University, says the past few years represent the continuation of a 35-year trend in which a growing share of all labor income goes to a small group of "superstars: professional athletes, CEOs and top corporate officers." On top of this trend, income on capital -- such as interest, dividends, rent and capital gains -- has taken a growing share of national income from labor, and it "goes mainly to a small slice of the population at the very top."
Mr. Snow said inequality at "one philosophical level...is troubling. It's really a serious, far-reaching question about how to organize the economic affairs of a great country. We as a society have made two determinations. We're going to let more productive people have higher incomes and we're going to tax them more" through a progressive-tax system.

Mr. Snow argued the administration's tax cuts have made the tax code more progressive, because the rich now pay a larger share of total individual taxes. Some scholars counter that the tax cuts still widened the gap between the after-tax incomes of rich and poor Americans. The Tax Policy Center, a joint venture of the Brookings Institution and Urban Institute think tanks, estimates that after-tax incomes of the richest 1% of taxpayers were 4.6% higher in 2005 than they would have been without the tax cuts. Incomes of the middle 20% were 2.6% higher, and incomes of the bottom 20% were 0.3% higher.


Update (3/26): Billmon has more on the irony of Snow's instinctive "trust of the market", here. I have to check his blog more often, as his hiatus seems to be over.

Monday, March 20, 2006

War in Iraq is immoral, not "incompetent"

Norman Solomon may sound like a broken record sometimes, but that's okay because he happens to be right.

As he notes in a speech he gave over the weekend at an antiwar rally in California, the Democratic leadership keep insisting that the Bush administration is screwing up the war in Iraq due to "incompetence". While there is no question the administration is incompetent, focusing on the poor planning and prosecution of the war is a dodge of the worst sort--it is really an effort for timid members of the nominally opposition party to hedge and say 'we are for the war in Iraq, but we want it done right'.

The only problem of course, as Solomon argues, is that this argument totally misses the bigger issue- which is that the war itself is illegal, immoral and disastrous for both Iraqis and Americans. Or, as Solomon asks rhetorically:

What would be a competent way to pursue the war in Iraq? How would you drop huge bombs on urban neighborhoods in a competent way? How would you deploy cluster munitions that shred the bodies of children in a competent way? How would you take hundreds of thousands of people from their home land and send them to a country to kill and be killed -- based on lies -- in a competent way?


Democrats (and Republicans) shouldn't be pushing for the administration to handle the war more effectively, they should be arguing that we need a timetable to get our troops home ASAP and end the failed occupation of Iraq.

If the Democrats want to win some elections in November, it's time for them to be honest with the electorate and admit the issue isn't the incompetence of the administration, it's the mendacity and the need for a withdrawl.

Update: Max Sawicky links to a post by Instapundit, who cites the fatality figures under the first terms of the last four presidents to somehow try to argue that the number of deaths in Iraq aren’t as bad as the mainstream media/liberals are making them out to be. (Max notes that while the figures are quoted as “casualties”, they really refer to fatalities.)

Of course, this type of “analysis” completely misses the very point I am trying to make here. Even one death is a tragedy if the reason for the death is immoral: in this case for an illegal, counterproductive war.

This is not to try to justify the military deaths from any other administration, but I don’t see the value in comparing the numbers from different periods of time without taking into account why these soldiers were killed.

Tellingly, Instapundit doesn’t even bother to try to justify the Iraq war or the deaths of these thousands of American soldiers. And he also fails to mention the hundreds of thousands of Iraqi civilian deaths.

Sunday, March 19, 2006

Skyrocketing housing prices pushing middle class out of big cities

The Washington Post has the story, which while it isn't exactly "news", I thought was important enough to link to nonetheless.

From the article:

People [...] have been leaving U.S. cities because of high-priced housing for some time. But according to researchers and urban leaders, the trend has accelerated in recent years and is threatening to reshape many of the nation's major cities. Between 2000 and 2004, all eight metropolitan regions from Seattle to San Diego lost middle-class families.


Demographer William Frey has a report at the Brookings Institution website that goes into a lot more detail about the role real estate prices, as well as a cooling job market in many cities, is playing in redistributing population post 2000.

Global "credit ocean" drying up. Is tightening cycle about to begin?

From the Telegraph (UK) back in February:

Most of the world is now tightening, with no sign of a fresh credit window opening to keep the game going. This is new. Japan has had the tap on continuously as the trade exploded over the past five years, while America itself became the source of funds after it slashed rates to 1pc at the end of the dotcom bubble, and held them there until June 2004.

The US Federal Reserve has since raised rates 14 times to 4.5pc in a belated effort to restore monetary discipline, with at least two more rises priced into the markets.

It is an open question whether the yen, euro, Swiss franc and Swedish krona carry trades have occurred on such a scale that they have led to over-investment in Latin America and beyond, and compressed US yields, fuelling the American housing boom in 2005 despite Fed tightening.

There are other big forces at work: huge purchases of US Treasuries by Asian central banks, and petrodollar surpluses coming back to the US credit markets. Stephen Roach, chief economist at Morgan Stanley, warns that the carry trade is itself, in all its forms, a major cause of dangerous speculative excess. "The lure of the carry trade is so compelling, it creates artificial demand for 'carryable' assets that has the potential to turn normal asset price appreciation into bubble-like proportions," he said.

"History tells us that carry trades end when central bank tightening cycles begin," he said. Ominously, almost every bank other than the Bank of England is now tightening in unison.

Saturday, March 18, 2006

Does the US export democracy or terror?

Writing in Dissent Magazine, political scientist Mark Beissinger argues:

The problem with...wholesale embrace of democratic revolution for export is not that revolution is an inappropriate mode of democratization or that the strength of civil-society movements and popular mobilization are unimportant for successful democratization. On the contrary, a large body of literature in recent years has documented how mass movements and pressure from below have played a more critical role than is usually recognized in democratization. Rather, the problem lies in the consequences of packaging, exporting, and spreading democratic revolution like a module across a broad array of settings, irrespective of local circumstances.

Perhaps the United States would do well to learn a lesson from its rival in the cold war, which also tried to export revolution, though not of the democratic variety. The attempt by professional revolutionaries to stimulate global revolution and provide “a little extra shove” to what they envisioned as the march of history, and even to engage in externally induced regime-change through military means, transformed their movement into a tool of state power, perverted its goals and meaning, generated a series of unstable postrevolutionary regimes, and ultimately unleashed forces that it did not understand and could not control. Having already entered the democratic revolution business, the United States finds itself facing similar dilemmas. Let us hope, for the sake of democracy, that the results prove better.


But is "exporting democracy" really the goal for the US, or is this just a cover for something else? One could make, I think, a strong argument that the US is not really in the business of exporting democracy to the world so much as it often purposefully acts to deter democracy, when it is in our "national interest" of course. I think at best, the US's track record in fomenting democracy abroad through intervention (military or otherwise) is shaky at best.

Maybe it's a matter of history, all the dictators we have installed in Third World nations after we successfully executed violent coups to remove democratically-elected leaders who didn't have our business/military interests as their main priority. Maybe it's the fact that during the 20th Century, most of the US's foreign aid was channeled to Latin American countries under dictatorship, as opposed to those nations such as Haiti that had democratically-elected presidents we didn't happen to like. In that case, we orchestrate international aid embargoes on the citizens of that country.

Or maybe it's our more recent military interventions in Iraq and Afghanistan, which haven't exactly touched off the spread of democracy in the Middle East or Central Asia, respectively. And of course, the recent elections left-wing populist, popularly-elected presidents in Latin America, for the most part spurred on by public disaffection with the "Washington Consensus" and neoliberal "structural adjustment" policies, have been derided by Condoleeza Rice and our nation's diplomatic establishment.

So whether we talk about spreading democracy or freedom to Iran, Venezuela, North Korea or any other geopolitical hotspot, or even when we brag about the questionable accomplishments of USAID, our credibility is nil and our track record for success is mixed at best and our motivations are far from altruistic. In many cases, the evidence points not merely to poor execution or incompetent planning in our efforts to "export democracy", but rather illustrate that we attempt to use noble-sounding rhetoric in order to cloak our real agenda--installing dictatorial regimes and crushing popular dissent if/when it matches up with what our foreign policy elites believes are in our short-term economic and military interests.

And Iraq is by no means the end of our imperial adventures. G. Pascal Zachary explains how even a future military intervention in Nigeria is being contemplated, not for humanitarian purposes but in order to protect our oil interests in the region.

Is the trade deficit causing manufacturing job losses in the US?

It's well-known that our nation's record trade deficits are not good for our economy, and it has become almost passe to lament the destruction of our once-enviable manufacturing base due to disastrous "free trade" policies like NAFTA. But I never really put two and two together and thought abut the causal role the trade deficit migh be playing with manufacturing job losses. I guess that's why I'm not an economist at EPI, which just put out a report analyzing this very question.

Between 2000 and 2003, annual manufacturing employment in the United States declined by almost 3 million jobs, and has been largely flat since then. The level of manufacturing employment in 2003 was 14.3 million, the lowest since 1950

In addition, the trade deficit in manufactured goods rose by $84 billion between 2000 and 2003 and it is currently on pace to grow by another $150 billion by the end of 2005 (for a total deficit increase of $234 billion in the 2000-05 period).1 The relationship between trade deficits in manufactured goods and manufacturing employment seems obvious: imports decrease labor demand in manufacturing while exports spur this demand. A rising trade deficit means, all else equal, that labor demand in U.S. manufacturing is reduced.


Of course there are those economists who do not think there is such a clear relationship between the two phenomena; but then again it's impossible to get economists to agree with each other about anything of substance. The report addresses the critics by providing tons of data with lots of funny greek symbols and some cool charts as well.

The EPI's two main findings are:

Properly measured, the rising trade deficit accounted for a significant part (over a fifth) of the job loss in manufacturing between 2000 and 2003.

Job loss in U.S. manufacturing has proceeded faster than in its main developed country rivals in the recent past.

Of course, "properly measured" is economist-speak for "the way other economists/policy analysts have been measuring the data is wrong..our way is right." Go read the report to see if you think the study is methodically sound and supports their argument (I do).

Friday, March 17, 2006

A tantalizing theory on "Operation Swarmer"

Yesterday, Digby posted an interesting explanation for the current air assault going on in Samarra codenamed "Operation Swarmer", which was billed by the Penatgon as the largest operation of its kind since the initial invasion in 2003. Basically, he cites an article by The New Yorker's Sy Hersh from a few months back, which predicted Bush would be pushed into a rapid troop drawdown from Iraq due to his plummeting approval ratings, but that this could only be accomplished by stepping up the US's reliance on quick (aerial) bombing campaigns. That is, replacing boots on the ground with jet fighters and massive bombing runs in the sky.

It really didn't seem that far-fetched to me, and there is no question Hersh was right to raise the issue that the US's massive bombing campaigns in Iraq have been for the most part unreported by the mainstream media here for some strange reason.

But today, in light of new media revelations, Digby did a 180 on Swarmer, basically conceding that the whole thing was mostly a media/PR stunt to somehow make Americans think we are doing something productive in that country, as opposed to it being a harbinger of some fundamental shift in US military tactics.

So will Hersh's predictions play out in the form of a change in the way this war is prosecuted? We'll just have to wait and see.

Update: More speculation on the suspect timing of Swarmer, the massive air assault that wasn't, from the Beeb.

NSS is full of lies

What else would you expect from the incompetent, mendacious Bush Administration. Think Progress rattles off just some of the most obvious lies in the National Security Strategy document recently unveiled--a document that is largely a work of fiction and propaganda.

As Bill Berkowitz notes, NSS affirms the importance of the Doha Development Agenda, as well as regional and bilateral free trade agreements (trade deals that create more resentment against the US in some of the world's poorest, most unstable countries in Latin America, Asia and Africa).

And of course, the doctrine of "preemption" (which doesn't seem to mean acting in self-defense in the face of an imminent threat, but rather refers to suspected, potential future threats envisioned to US geopolitical interests) has been reasserted as central to US military doctrine. Not that this is legal under the UN Charter, US/International Law or anything like that.

CEIP Report: Poorest nations will be hit hardest by WTO agenda

From Inter Press Service, we learn that the Doha Development Round won't actually generate development benefits for poor nations, as was initially promised.

The full report by Sandra Polaski from the Carnegie Endowment for International Peace, which the article refers to, can be viewed here (in .pdf format).

Key findings from the report include:

Any of the plausible trade
scenarios will produce only modest gains, on
the order of a one-time increase in world
income of $40 to $60 billion. This represents an
increase of less than 0.2 percent of current
global gross domestic product (GDP).

Given relatively low gains, the adjustment costs
to which (Developing) countries expose themselves when
they change trade policies may loom larger
than in the past.

There are both net winners and
net losers under different scenarios, and the
poorest countries are among the net losers
under all likely Doha scenarios.

The benefits of agricultural trade liberalization
flow overwhelmingly to rich countries, while
developing countries actually suffer slight losses
as a group
.

There are several reasons why the developing
world does not gain broadly from agricultural
liberalization. Many poor countries are net food
importers. Many lose relative advantages they
now enjoy under special preference programs.
However, a more fundamental problem arises
from the reality that low-productivity, small-scale
subsistence farming makes up a large portion of
agricultural activity in many developing countries.
The products of subsistence farmers are
generally not competitive on global markets.

Trade liberalization for manufactured goods
increases demand for unskilled labor in most
of the developing world. However, wages do
not increase, due to the abundant supply of
labor and the fact that liberalized trade in
labor-intensive manufactures drives down
world prices for such goods
.


I highly recommend reading the overview of the report, as well as the news article which summarizes the findings. While not surprising to long-time critics of the WTO, this research represents yet more evidence that the multilateral organization controlled by the world's wealthiest, "developed" nations helps out the Global North (the very people writing the rules)...the South on the other, ends up losing. This, of course, was exactly what was argued by Harvard economist and WTO/globalization critic Dani Rodrik back in November.

Thursday, March 16, 2006

GOP: The party of fiscal irresponsibility

According to a new report by the Center for Budget and Policy Priorities, the massive tax cuts (including capital gains tax cuts) handed out to the rich have not payed for themselves as many Republicans and supply-siders have claimed. In fact, the report notes, economic growth and government revenues have been well below the Administration's forecasts.

According to the authors of the report, "...over the three years since enactment of the 2003 tax cuts (2003-2005), revenues were a combined $316 billion below the levels that had been forecast by the Administration for these years before these tax cuts were adopted."

Just today, the Republican-led Senate sheparded through yet another Bush Administration's request (the fourth in five years) to raise the federal government's debt limit.

According to Bloomberg News, the government will spend $217 billion on interest on our $8.3 trillion public debt this year, according to the Congressional Budget Office. By contrast, federal spending for the Department of Education is $83 billion. Most economists agree that our rising debt load is not sustainable, but don't look to the Bush Administration on Republicans in Congress to solve this looming crisis the next generation of taxpayers will have to grapple with.

Peter Morici, a business school professor at the University of Maryland, notes in Asia Times Online that the US's growing trade deficit as well as a decrease in retail sales could also spell trouble--serious trouble for the economy as well.

In the fourth quarter [FY2005], the current-account deficit was $224.9 billion, up from $185.4 billion in the third quarter. In the fourth quarter, the current-account deficit exceeded 7% of gross domestic product (GDP). The current-account deficit could easily top $1 trillion a year by the second half of 2006.(emphasis added)

Separately, the Commerce Department has reported that retail sales were down 1.3% in February, indicating that a consumer pullback is beginning. The combination of slower-growing consumer spending and a widening trade gap will dampen US economic growth by mid-year. Real GDP growth will likely be about 3.8% in the first half and 3.3% in the second half.


What does all this mean? Morici explains that high and rising trade deficits tax economic growth. Specifically, he notes that "[E]ach dollar spent on imports that is not matched by a dollar of exports reduces domestic demand and employment, and shifts workers into activities where productivity is lower."

Furthermore, he points to the fact that worker productivity is at least 50% higher in industries that export and compete with imports, and therefore reducing the trade deficit and moving workers into these industries would increase GDP. He doesn't provide any sources for these figures, so take from this what you will.

But the long-term consequences from this continued short-sighted economic policy will not be pretty:

Longer-term, persistent US trade deficits are a substantial drag on growth. US import-competing and export industries spend three times the national average on industrial research and development (R&D), and encourage more investments in skills and education than other sectors of the economy. By shifting employment away from trade-competing industries, the trade deficit reduces US investments in new methods and products, and skilled labor.


Maybe the Democrats can run on the economy in November? Might not be such a bad strategy.

Greenwald vs. Drum on the Censure Resolution

Read Glenn Greenwald's long post here. He has a go at Kevin Drum and the rest of the cowardly, defeatist Democrats who have somehow convinced themselves that Feingold's courageous measure will backfire on them.

Digby similarly exposes just how pathetic, and wrong, the Democratic party's instincts are on the resolution.

If the so-called opposition party can't get behind a resolution calling Bush to task for illegally wiretapping US civilians (even prominent conservatives like Senator John McCain admits Bush broke the FISA law), then what good are they?

Update: Feingold has a diary up at dailykos on the resolution. He argues:

When the domestic spying story first broke, the President went from saying he wouldn't be able to talk about it, to suggesting there was no other way to wiretap terrorists, to implying that the FISA law is out of date. He went on to claim that sweeping inherent powers of the presidency or the authorization of force back in 2001 gave him such authority -- neither of which is legally or factually correct. While the President has cherry-picked information before, he cannot do the same with the laws of our land.

Censuring the President is not something that should be taken lightly. But the President has BROKEN the law and there needs to be action and accountability.



I'd like to know what part of this any Senator or Congressman, Democrat or Republican, disagrees with or is scared of engaging in.

Update 2: The Democrats' hypocrisy on what they think deserves censure knows no bounds.

Wednesday, March 15, 2006

New Report: "The Wal-Mart Tax"

There's a new report put out by the AFL-CIO discussing the role Wal-Mart is playing in the Medicaid crisis by failing to provide coverage for many of their employees. This shifts the insurance costs to the state governments despite the fact that these states have lavished the corporation with close to a billion dollars worth of state and local taxpayer-financed subsidies and industrial revenue bonds in the past twenty years.

Matt Singer at PLAN has the rundown on the four different versions of "fair share" health care legislation in the states that is well worth checking out.

Rethinking Dubai

I've changed my mind about the whole Dubai-ports controversy, particularly my opinion on Dubai and the UAE, after finally having a little free time to do more research.

The AP quotes Pentagon and State Department sources who claim that Dubai is a "superb" military partner in combatting al Qaeda, which I could think is probably true--that is, if you could trust anything this Administration claims. On the other hand, the AP reported back on 9/2/04 that al Qaeda was taking full advantage of the country's "freewheeling" port system as a "logistical hub" for their operations.

With open borders, multiethnic society and freewheeling business rules, the Emirates remains vital to al-Qaeda operations, said Evan F. Kohlmann, a Washington-based terrorism researcher.

Dubai still "plays a key role for al-Qaeda as a through-point and a money transfer location," Kohlmann said, although he also noted the country could be working to combat such activity with "an aggressive but low-profile intelligence strategy."

al-Qaeda isn't the only organization that has found Dubai useful. The father of Pakistan's nuclear program, Abdul Qadeer Khan, has acknowledged heading a clandestine group that, with the help of a Dubai company, supplied Pakistani nuclear technology to Iran, Libya and North Korea.

Emirates officials refused to discuss the country's latest steps to combat terror.


So there it is: the Administration claims the UAE and Dubai are being helpful in the "War on Terror", but other than their word, we don't know what actual support they are providing us and never will for obvious reasons.

Meanwhile, they don't recognize Israel and have a policy of boycotting the country (someting that violates US law) and the 9/11 Committee argues that Dubai still represents a "persistent counterterrorism problem" for the US. Based on US intelligence, the Committee's Report cited possible bin Laden-UAE ties as recently as 1999, stating that "they were concerned UAE officials were directly associating with bin Laden as recently as 1999."

So Dubai is no great shakes, although with about 80% of our ports being managed by non-US corporations, this is just the tip of the iceberg. But the more important, overlooked issue in all this is still the fact that the Bush Administration refuses to take port security seriously, even after 9/11. The Administration isn't providing the funding necessary to secure our ports, and in fact is proposing budget cuts for port security for FY07. This is a problem. Customs officials admit that less than 10% of all shipping containers coming through our nation's ports are screened and only a third go through radiation detectors, also a problem.

Tuesday, March 14, 2006

Revealing discussion on income inequality over at wsj.com

Thanks to Mitchell Freedman for linking to this debate over at wsj.com's econobog between an economics professor at George Mason University and an economist from the Center for Economic Policy Research. The debate is over whether the growing income inequality in the US since the 1970s is a pressing social problem and whether the government should play any role in addressing it through policy. Except the "Laissez-faire" GMU professor Russell Roberts quickly tries to reframe the debate by mischaracterizing his opponent's position.

Says Roberts:

I want people to get ahead. You [his opponent from CEPR, Heather Boushley] seem concerned about people getting ahead of others. But by definition, not everyone can move ahead of everyone else into higher percentiles. That's like everyone being above average.

In recent decades, the lives of both the rich and the poor have improved. But if the rich get richer, fewer poor people can move into the upper quintiles. Do you want to keep people from getting rich in order to reduce measured inequality?


Only problem is, that is not what anyone is arguing about. The problem is that the US has the most uneven distribution of income of nearly all developed countries. It's not an issue of the government unfairly helping middle class Americans move into the "upper quintiles" and "ahead of others", i.e. displacing more wealthy individuals. It's about our politicians choosing economic policies that provide massive tax cuts to the already rich with deficit spending simply to provide them with greater access to wealth instead of investing that same money into programs which would provide an economic safety net for those close to poverty.

The debate is framed by the "free marketer" in this case as a matter of whether or not government should intervene in redistributing income, but the government is always intervening, as in the case of tax cuts, in how it allocates the federal budget. The real question is who you choose to prioritize: lower-, middle- or upper-class people. This decision speaks to the social values of the individual--it is not an argument at that point about economic theory. Of course, if this is what the debate is really about--whether you believe the government is bound by a social contract--Robert's position suddenly seems less reasonable and more selfish. He doesn't see growing inequality as a bad thing, despite the fact that there are millions more homeless in the last five years and millions have lost their pensions.

No question, people's choices and aptitudes play a role in how financially successful they ultimately are, but so does government policy and anyone who would argue otherwise is being intellectually dishonest. Furthermore, the market outcome is not always the most efficient of all possible outcomes due to market failures, nor is it the most equitable alternative, but Roberts doesn't seem to see any role for government intervention to alleviate these problems when it comes to income distribution. He tacitly thinks the current trend, which is a more uneven distribution of wealth toward the top 1% of households is the most preferable option of all without even bothering to explain why.

Update: Crooked Timber links to a long symposium on "Inequality and American Democracy" recently put on by the American Political Science Association that's chock full of interesting facts, figures and charts. There's even a chart that compares the performance of GOP and Democratic administrations on the economic fortunes of US families. If you have some time and are even remotely interested in political economy, you simply must check it out.

Handicapping the Democratic Party's prospects for the midterm elections

Short Answer: Slim to none.

They don't look like they have learned any lessons in electoral strategy in the last six years. They're still scared of their collective shadows, as evidenced by their failure to back up Russ Feingold's truly courageous censure motion in the Senate.

David Sirota gives the DNC party "leadership" one of his trademark, passionate wake up call.

They need to step it up and start acting like they care about winning. They need to take a clear, strong position on Iraq, stand up for workers' rights and push for meaningful lobbying reform. How about pushing for an increase in the federal minimum wage, which hasn't been touched in nine years? How about pushing for public financing of elections?

They need to call this Administration on its lies, is bullshit and strive to hold them accountable.

I want to have faith in the Democratic Party, but sometimes their rank-and-file make it hard.

Update: Feingold calls out his own party here, accusing them of "running and hiding". Sounds about right to me.

Thursday, March 09, 2006

The poor who aren't being counted

Lies, damn lies and poverty statistics.

This In These Times article convincingly makes the argument that the Orshansky Threshold model for calculating the poverty line in the US is woefully inadequate and needs to be updated. Specifically, it is an overly-conservative measure for poverty figures and thus provides an overly optimistic picture for policy makers on the extent of poverty in America today.

So are the Bush Administration's tax cuts for the rich lifting up the poor as well? The latest Census data doesn't indicate it is.

From the article:

Census data released this past August suggests that the number of Americans in poverty grew slightly in 2004 (the most recent year for which data is available) to 12.7 percent from the 12.5 percent recorded the previous year, representing about 37 million Americans. Since 2000, the number of people living in official poverty has increased by 5.4 million. But according to experts, that number vastly underestimates the real total. Duke University sociology professor David Brady puts it this way: “Each August we Americans tell ourselves a lie. The entire episode is profoundly dishonest.”


Writing in Dollars & Sense, economist Ellen Frank explains how poverty calculations are made by the government--and the limitations in methodology.

And this factsheet is a good resource for understanding just how pathetic Bush's record in the "war on poverty" really is. Then again. it's not really syprising when you consider he doesn't think it's the government's responsibility in the first place.

Bush's proposal to allow foreign ownership of airlines

As I wrote a few weeks ago, the aborted Dubai port deal is not really that surprising for the Bush Administration, considering their longstanding desire to allow for partial foreign ownership of US airlines. Now, the House Appropriations Committee is stepping up the pressure and telling the Administration to hold off.

The port controversy fueled opposition to a proposed regulation that would give foreign airline investors more control over marketing, flight routes and what kinds of planes to fly. Non-U.S. citizens still couldn't own more than 25 percent of a U.S. airline's voting stock.

The Transportation Department issued a statement on Thursday saying its proposal "would require U.S. citizens to maintain control of all decisions affecting the security, safety and national defense obligations of domestic airlines."


No kidding.

I'm back! I'm gone.

Finally, midterms are over. While I pack for my trip to Florida, here's a article by Dean Baker discussing the significant downside to "Free Trade" deals, especially when they are written so as to force consumers to pay higher prices for pharmaceuticals in order to ensure the profit margins of the large corporations that produce them (i.e.: patent law protection without price gauging protection)

Notes Baker:
In countries with active democracies, there can be vigorous debate on the merits of bi-lateral trade pacts with the United States. If the proponents of these agreements want to show they have a honest case, then they can start by dropping the propaganda used [to] describe these pacts. A trade agreement that increases monopoly patent protection for prescription drugs is not a “free” trade agreement. People everywhere love freedom, but signing a trade deal that primarily benefits large U.S. corporations is not an obvious way to advance the cause.

Tuesday, March 07, 2006

More on HSAs

Guess who stands to benefit the most from HSAs? Hint: it's not the poor and sick--those who are in most desperate need of government-provided health insurance. It's the already wealthy who plan to use them as tax shelter.

Cindy Zeldin has more on the perverse priorities of HSAs over at TPMcafe.

Sunday, March 05, 2006

Two good Latin American articles

I'm neck deep in studying for finals/writing papers, etc. so I'm just going to link to two articles I read this week regarding US "foreign policy" (if you could actually call it that) in Latin America:

The first is called "US intervention in Venezuela", was written by Medea Benjamin (of Code Pink fame) and was published in Common Dreams.

According to Benjamin:

[T]he Administration’s concerns about Venezuela are not fundamentally about [Chavez's alleged curtailing of civil rights] but relate to a deeper concern about the erosion of support for the neoliberal “free market” system promoted by the US government in Latin America for decades. The Chávez government is currently leading one of the fastest growing economies in the region, bringing down unemployment through the use of a dynamic set of policies that combine the assets of the private sector with, strategic government investment in specific industries, and incentives for cooperatives and small and local businesses.

Most importantly, the Chávez administration is funneling billions of dollars of the country’s oil wealth into social programs for the poor. These programs have succeeded in eradicating illiteracy in Venezuela; vastly increasing school enrollment; providing subsidized food and housing to the poor; and implementing a national system of preventative, community-based health care. Call it the threat of a good example!

In addition, the concerns of the Bush Administration stem from Chávez’s promotion of regional integration, because it interferes with the US attempts to impose the failed model of corporate globalization embedded in projects like the stalled Free Trade Area of the Americas, the top US priority in Latin America for the past decade.

But one of the most interesting hypotheses in the report is the notion that the fundamental antagonism between the US and Venezuela stems from the tension between the imperial designs of the Bush administration and an underlying goal of the entire Venezuelan project: a change in the global balance of power from a “uni-polar” world dominated by US economic and strategic interests, to a “multi-polar” world of real economic and political independence for the global South.



The second article is "Watch Out, Bolivia", written by Christopher Brauchli, and also published by CD. It's so short I'm not going to even bother to excerpt it. You can see what websites I read when I have very little time...

I plan on expanding this post, adding my own thoughts, etc. soon. But for now, read the articles to get a better sense of just how incompetent the Bush Administration is in dealing with Latin America.

Thursday, March 02, 2006

Bush Administration more interested in fostering "cooperative relationships" with Big Business than regulating them

The New York Times reports that "[I]n its drive to foster a more cooperative relationship with mining companies, the Bush administration has decreased major fines for safety violations since 2001, and in nearly half the cases, it has not collected the fines,"

A Senate Committee is holding hearings today.

I've written frequently about the Bush Administration's refusal to regulate industries it would rather have a "beneficial relationship" with, including pharma, banks and automobile manufacturers. This is much appreciated by the CEOs and owners of companies in these industries. but is not quite the role the Executive Branch should be playing in order to protect American citizens. When will Congress finally put a stop to Bush's war against regulation and oversight?

By the way, why does Bush care so much about having a good relationship with industry? Isn't this like a prison warden trying to forge a good relationship with the prisoners he is responsible for guarding?

Wednesday, March 01, 2006

The unheralded disappearance of private retirement accounts

Nathan Newman links to the latest report out by the Federal reserve detailing the decline of private retirement accounts held by American families. With the concurrent disappearance of Defined Benefit pensions being offered by employers, Newman says that sadly, 50% of families don't have any kind of retirement account. If anyone has a source for this (which Newman doesn't include), I would appreciate hearing from you.

Robert Reich frames Dubai port deal properly

This short article of his in the American Prospect Online really nails the significance of the P&O Port deal. It's not about which country owns the ports--80% of our ports are foreign owned. It's not who will be working in the ports--mostly Americans regardless of whether or not the deal goes through. Likewise, customs, the Coast Guard and the Federal Government will still have ultimate responsibility for controlling security at the ports

What is of critical importance is how much money we invest in port security and screening measures, which the Bush Administration has refused to make a priority in his "War on Terror". As Reich notes:

I don’t mean to minimize the real danger that a terrorist might sneak into an American port or plant a nuclear bomb in a container heading toward an American port, or a container mounted on a truck that crosses an American border headed for Kansas City.

But if that happens, it won’t be because of the nationality of the company that has a contract to run a port, or of its managers, or even its workers on the ground.

It will be because this nation didn’t want to pay for the gamma-ray monitors and radiation scanners and inspectors necessary to oversee more than a tiny percent of containers heading into America. Because we didn’t want to bother with security checks and special ID cards with fingerprints and other biometrics for workers at all ports and border crossings. Because all of this would cost about $7 billion a year, out of a defense and homeland security budget of hundreds of billions, and might slow down commerce through our borders just a bit, and reduce some corporate profits.

You see, the real issue here isn’t about nationality. It’s about what we’re prepared to pay for our security, and whether we pay mostly for a war in Iraq or we finally get serious about security here at home.


That being said, there is some growing evidence that the deal wasn't vetted properly, and if there are legitimate security concerns (which there appear to be plenty of), the deal should absolutely be stopped in its tracks. But I'm just not buying into the argument being made by lots of people I respect on the Left (as well as those on the Right) that ownership of the ports by the Dubai government is in itself bad.