Wednesday, June 28, 2006

Pentagon using US media as part of psychological warfare campaign

It's bad enough that the US media is often far too accepting of the "official version" of the war in Iraq (according to the Bush administration) without doing the requisite independent legwork to properly confirm or deny its veracity. The New York Times' cheerleading for the 2003 invasion of Iraq, and it's key role in disseminating key administration lies about Saddam Hussein's supposed possession of weapons of mass destruction, which helped pave the way for the war, are high-profile cases in point.

But as Daniel Schulman reports in the Columbia Journalism Review, major media outlets like CNN, AP, PBS, the New York Times, the Washington Post and others have been the unwitting victims of Pentagon "disinformation campaigns". According to Schulman, "[T]he aggressive manner in which this administration has pursued its information campaigns has in some cases blurred the bright line between two distinct military missions — providing truthful information about the war to the press and public, and waging psychological warfare. This blurring raises questions of credibility not only for the military but also for the press, which has been, on occasion, an unwitting conduit for psychological warfare campaigns.". And he meticulously proves his theory with evidence of domesticly-oriented psychological operations.

In a graphic example, Schulman describes the way in which CNN was cynically manipulated by the military:

[W]ith the insurgency reaching a critical point, the military attempted what seems to be its most overt — and ham-handed — attempt at media manipulation in recent memory. In October 2004, as U.S. troops prepared to retake the insurgent stronghold of Fallujah, the military took the unusual step of contacting CNN’s Atlanta headquarters to offer the network an interview with a commander on the ground who they said was prepared to discuss “major unfolding developments.” The “commander” turned out to be a public affairs officer, Lieutenant Lyle Gilbert, who told Jamie McIntyre, CNN’s Pentagon correspondent, that “troops crossed the line of departure . . . it’s a pretty uncomfortable time. We have two battalions out there in maneuver right now dealing with the anti-Iraqi forces and achieving the mission of restoring security and stability to this area.”

Gilbert’s comments seemed to signal that the long-expected offensive had begun. (Before he talked to Gilbert, McIntyre spoke to a senior aide to Donald Rumsfeld who told him that he would want to cover the pending announcement — it would be significant.)

But even as CNN broke this news, other reporters were being warned off the story by their military contacts. As it turned out, the offensive had not begun and wouldn’t for another three weeks. It was widely reported that Gilbert’s interview with McIntyre had been part of an apparent psychological operation.

“The purpose of this was actually a bit of deception,” Christopher Lamb, the former Pentagon official, said. “We wanted to see how the insurgents we were monitoring would react to this news — that was the purpose.”

The fact that the Pentagon may have gained some insight into how the insurgents react to Western media reports doesn't obscure the fact that in the US, we ostensibly have freedom of the press, which I always assumed the right to the media not to by the government to deliberately spread propaganda and lies. The impact of this administration's eagerness to use the media as a means to end calls into question how seriously it takes the concept of democracy and the role of the media in perpetuating it.

"If the press, foreign and domestic, remains fair game for psychological operations, the military, as well as the media, could be headed for a credibility crisis. “There are some people who will say we have to do whatever it takes to win this war,” said Pamela Keeton, who is now the director of public affairs and communications for the U.S. Institute of Peace, a congressionally funded nonpartisan organization that focuses on conflict resolution. “I think there are places where we need to draw the line — and one of them is using the news media for psyops purposes. It will get to the point where the news media won’t trust anybody, and the people won’t trust what’s being quoted in news articles.”

Propaganda, even the kind intended for specific audiences, can turn up anywhere — on the news wires, in newspapers, on blogs or Web sites. “They’re not going to know that they were written by some information-warfare guy,” she said. In the hands of policymakers, she continued, these skewed stories can then be used for political ends — to show that the Taliban is disintegrating, say, or that Iraqis are taking the initiative to protect and rebuild their country, or that the war on terror is going better than it really is. She seemed less than hopeful that the damage could be contained. “It’s a Pandora’s box.”

Keep in mind this isn't a case of the government providing the media with information that turns out to be inaccurate, this is the government intentionally feeding lies to the media as part of a military strategy.

The article covers a lot of other ground, from analyzing the Lincoln Group's now-infamous planting of US propaganda pieces in Iraqi newspapers to revelations by a longtime Defense Department consultant that the Iraq war was handled like a "political campaign,” in which the emphasis was not on the truth but on the message (see here for more on this) to re-examining the genesis and demise of the Pentagon's Office of Strategic Influence (OSI). It's a very long, well-researched article, and it's worth reading to get a sense of how hostile to our democratic way of life the Bush administration's "anything goes" mentality truly is.

Thus, when the New York Times reveals the presidents lawbreaking, as it did with its NSA wiretapping expose last December, it is painted as a threat to the war on terror. But when it is instead spreading government lies about Iraq supposedly possessing WMD, it merely serves a useful propaganda purpose in influencing international public opinion. If nothing else, the article will force you to seriously reevaluate how much credibility the "respectable" media really has when reporting on Bush's "War on Terror": Even when they're not intentionally lying or distorting facts as part of their own agenda, they may be lying to by their sources in the US government.

Either way, the victims are the public who relies on their reporting uncritically.

Tuesday, June 27, 2006

Bob Kuttner's suggestion to John Edwards

Bob Kuttner's latest editorial in the Boston Globe raises an interesting point. While applauding the fact that John Edwards is striving to put economic issues and the plight of the poor in America front and center on the political map, Kuttner asks whether Edwards should be focusing instead on working Middle Class Americans as opposed to the working poor.

He notes: "Today there are 37 million poor people in America -- out of just under 300 million. Back when Franklin Roosevelt delivered his famous second inaugural address in 1937, declaring ``I see one-third of a nation ill-housed, ill-clad, ill-nourished," a third of Americans were indeed poor, and another third had good reason to fear poverty. The vulnerability of the non-poor was a major issue that FDR brilliantly energized.

Today, with only 12 percent of Americans officially poor, the challenge of leadership is more complex. Yet four Americans in five have had basically stagnant living standards since the mid-1970s. That's because three decades of economic growth have gone almost entirely to the top, not merely the top 20 percent but mainly the top 1 percent."

The political advantage of focusing on issues affecting the Middle Class make sense from a strictly political, if not moral perspective.

According to Kuttner: "It's courageous of Edwards to tackle poverty. But if he wants to become a presidential contender by re-introducing unspoken realities of class to American political discourse, there is a far larger class of people taking an economic bath. It's four Americans out of five. The real 'Two Americas' are not the poor and everyone else, but the mega-rich and everyone else."

His thinking is that you grab the attention of the American people by going appealing to the Middle Class, not the working poor or non-working poor. Then, you can forge a coalition of the Middle Class and low-income workers by highlighting their common interests and challenges. For example, Middle and low-income individuals have experienced relatively flat wage growth compared to top earners in recent years due to a number of factors, including an increase in global trade, falling levels of union membership and even lowered taxes on capital. The end result of this, along with demographic trends, has led to growing income inequality.

So the question ultimately becomes: Since more Americans are Middle Class as compared to the number of people at or below the poverty line, is it better as Kuttner seems to imply for economic populist candidates like Edwards to focus on their interests? Or will Middle Class Americans be moved to vote for a politician that demonstrates his commitment to the economically disenfranchised?

SEC probing springloading and backdating of executive stock option grants

The Los Angeles Times reports that the Securities and Exchange Commission is examining whether companies timed stock option grants so executives would benefit from company news. Specifically, the agency is investigating whether companies backdated grants to periods when their companies' stock prices were lower in order to provide larger gains for executives, to the detriment of other option holders.

Additionally, the SEC is also looking into possible instances of so-called spring-loading. In this practice, a company purposely schedules an option grant ahead of expected good news or delays it until after it discloses business setbacks that are likely to send shares lower.

Many companies offer stock option grants on the same date each year, in part to guard against allegations of manipulation. But according to a recent study by the Corporate Library, some companies may be timing the public release of news, if not the options themselves. For instance, the article notes a company might hold off on releasing favorable news until shortly after options have been granted, hoping that the public release of information will boost its share price and make the options more valuable.

This is a very significant issue as far as shareholders and non-executive employees are concerned. By giving executives options, executives have a strong incentive to raise the value of the company's shares. But this incentive would be significantly weakened if the option grants are being timed to help ensure the holders with an easy profit.

The Times quotes Brandon Rees from AFL-CIO as saying "Option backdating is totally unfair to shareholders who don't have the luxury of a time machine to go back and purchase stock at historic lows," and of course he is correct. Additionally, options manipulation would undermine the utility of options as a reward to employees.

It will be interesting to see how seriously corporate lawyer and GOP Congressman-turned-SEC Chairman Christopher Cox takes this issue beyond offering prefunctory rhetoric. In addition to the "executive pay rule", expected to be made sometime in the summer, the handling of these corporate governance concerns will provide a key test of the seriousness of the Bush SEC in terms of going after corporate crooks and protecting shareholders and workers.

Monday, June 26, 2006

Is the Fed more concerned with inflation than with unemployment?

Yes, according to Dean Baker. The point of departure for his most recent article (published at Z Net and, but curiously not at his blog Beat The Press), is what was probably intended to be a throw-away line from an investment analyst in a Washington Post article. According to the analyst, "The Fed chairman may be appointed by the president and confirmed by the Senate, but his real bosses are on Wall Street." Whereas Baker sees this as a searing indictment of our current political system, I am a not really all that surprised (although equally dismayed). For more background on how the Fed operates and to understand the incredible amount of power it wields, I highly recommend William Greider's book Secrets of the Temple, an 800-page analysis of the Fed under the guidance of Paul Volcker from 1979 to 1987.

Baker, an economist at the Center for Economic Policy Research makes the point that Wall Street doesn't like inflation because it lowers profits, and therefore there is tremendous political pressure put on the Fed to raise interest rates, which restrains inflation. The downside, however, is that raising interest rates makes it more expensive for people to borrow money, slows down the economy and lowers unemployment. This increase in unemployment also puts downward pressure on workers' wages. Thus, according to Baker, "[B]y using unemployment to slow wage growth, the Fed can restrain inflation."

In conclusion, "It is important to understand these facts when we hear it asserted (correctly) that the Fed answers to Wall Street. The most disadvantaged people in society are the ones who suffer when the Federal Reserve Board decides to clamp down on inflation."

I'm a big fan of CEPR and of Baker's work, but I am a little confused by his thesis. I have no problem accepting his argument that the Fed answers to Wall Street (although pointing out one analyst's statement to that effect in the Washington Post doesn't in itself prove it is necessarily so), but wouldn't raising interest rates to fight inflation also hurt profits at Fortune 500 companies by making it more expensive for businesses to borrow and invest capital? For example, Wall Street (or at least the stick market) reacted with disppointment in May when the Fed raised interest rates, with stocks widening their losses after the mid-afternoon announcement was made. Also, Inflation erodes the wealth of everyone, including Middle Class Americans and it is wholly appropriate for the Fed to be concerned with holding it in check. If raising interest rates is not the best way to combat inflation, what is a better policy?

Greenspan lowered interest rates dramatically in response to the recession of 2000-2001, which has led us to the point that we are now righfully concerned about inflation. In essence, lowering rates replaced the dot-com bubble with a housing bubble, which has led to residential housing prices being 55% higher in 2005 than they were in 2000. Although lowering rates may have been good as far as employment and wages, as Baker argues, by raising housing values it has led to a host of other economic problems, including allowing many consumers to borrow and consume far beyond their means due to the "household debt bubble".

So was Greenspan ignoring the wishes of Wall Street in aggressively slashing interest rates in 2000? I don't have a Ph.D in economics, but I suspect the reality is more complicated than the short editorial would lead one to believe. Maybe right now Bernacke is more concerned with the threat of inflation than with slowing down the economy, but does that mean that by default, the Fed is always biased toward keeping interest rates high? To be clear, I don't necessarily agree that inflation is the biggest threat to the economy (Robert Reich makes, I think, a fairly compelling case that stagflation is a bigger challenge than inflation), but I'm not sure if this necessarily proves Baker's thesis.

Sunday, June 25, 2006

Iraq war death toll may be twice as high as US estimates

According to an article published today by the Los Angeles Times, statistics from the Baghdad morgue, the Iraqi Health Ministry and other agencies indicate that there may have been at least 50,000 violent deaths in Iraq since the US invasion in 2003. This figure, which might be much lower than the actual figure, would be at least 20,000 deaths higher than the figure tossed out by President Bush last year.

Of course, the 2,500 US soldiers that have been killed in Iraq since 2003 is an incomprehensible tragedy as well, but as the LAT notes, 50,000 Iraqi deaths would be roughly equivilent to 570,000 Americans being killed in the same time period. That's 190 times the number of civilians killed in the horrific terrorist attacks on September 11, 2001.

On top of the sheer numbers of civilian deaths, there are reports almost weekly about the alleged commission of war crimes by US forces, such as in the recent assault this month on the city of Ramadi. And, as William Blum notes, anecdotal evidence is increasingly pointing to the fact that Iraqis feel worse off three years after the US's illegal invasion and occupation of their country than they were under the murderous dictator Saddam Hussein.

One reason pointed out is that over 50,000 Iraqis have been imprisoned by US forces since 2003, even though only a very small percentage of them have been convicted of any crime. Other factors include the fact that unemployment continues to hover at around 50% and the supply of safe drinking water, effective sewage disposal, and reliable electricity have all generally been below pre-invasion levels. Add these reasons to the fact that, according to Blum "continual bombing assaults on neighborhoods has left an uncountable number of destroyed homes, workplaces, mosques, bridges, roads, and everything else that goes into the making of modern civilized life," and it is not hard to understand why the citizens of Iraq have been demanding an end to our military occupation of their country for over two years.

Trying to make sense of the SWIFT data mining program

The New York Times and the Los Angeles Times reported this week on a secret Bush administration program that examined banking transactions involving thousands of Americans and others in the United States from an international database created by the Brussels-based Society for Worldwide Interbank Financial Telecommunication (SWIFT). It appears to me that the program is legal, or at least in some sort of "gray area", but nevertheless the NYT characterizes it as "a significant departure from typical practice in how the government acquires Americans' financial records. Treasury officials did not seek individual court-approved warrants or subpoenas to examine specific transactions, instead relying on broad administrative subpoenas for millions of records from the [SWIFT] cooperative."

I plan on researching this more in the next week, but my gut reaction is that the program seems to have been doing more good than harm, despite the potential for abuses. I'm not sure if the NYT made the right decision in revealing the classified program, not because the administration asked them not to, but because I can't see the clear public interest in this type of program. This is especially true because more people I think assumed the administration was conducting some sort of monitoring program such as this to track down terrorist financing sources.

Perhaps I'm missing the boat and this really is an egregious overreach of power by the administration. Some observers like George Washington University law professor Jonathan Turley make the point that it's not necessarily the SWIFT program per se that is cause for alarm, but rather the fact that it is part of a pervasive "steady stream of secret programs and new forms of government monitoring." Additionally, Salon Magazine reported this week that the NSA may be collaborating with AT&T on a secret program to track and spy on large packets of domestic internet traffic. Nevertheless, I think I would need to be convinced that the potential for abuse in the SWIFT program demonstrably outweighs the benefits the program offers.

That being said, I think Cheney's complaints about the NYT's disclosure are disingenuous and frankly laughable. According to the BBC, Cheney has said ""What I find most disturbing is the fact that some in the media take it upon themselves to disclose vital national security programmes, thereby making it more difficult for us to prevent future attacks against the American people."

The administration apparantly has no problem with high level officials like Cheney's former Chief of Staff "Scooter" Libby leaking information to the media, and the media printing it, when it serves to embarrass or intimidate the administration's political adversaries. But when the leak paints the administration in a negative light, the media source is suddenly treasonous and aiding the terrorists. This hypocrisy and double-standard is obvious to most rational observers, and I am not convinced that the NYT article will make it more difficult for the administration to track down al Qaeda. Cheney's credibility in my mind is zero, so his merely saying it does isn't compelling to my mind. Conveniently for the administration, however, the next time we are attacked they will be able to quickly point a finger of blame at the media.

Update: I'm a lot less confused after reading John Nichols' helpful guide on the difference between good leaks and bad leaks. Also, more from Greg Sargent and Froomkin.

New study from Brookings Institution reveals "death of American Middle Class neighborhood"

A study released this month by the Brookings Institution captures many of the challenges and issues this blog has explored for the past 18 months. And this diary from DailyKos does a good job summarizing the study's findings and putting its significance into a somewhat broader context. The diarist asks: "How long can a nation built upon the equality of all perserve when the prevalance of social segregation tells a vastly different story? Is segregation performed upon the basis of income (over time, social distinctions or this type are rendered into understanding of social classes) less malicous than that based on race, or just more subtle?" (emphasis added).

The findings of the study are eye-opening, yet not all that surprising to anyone wht ohas been following the slow death of "Middle Class" neighborhoods in the wealthiest country in the world. Highlights (if you can call them that) include:

■ Middle-income neighborhoods as a proportion of all metropolitan neighborhoods declined from 58 percent in 1970 to 41 percent in 2000. This dramatic decline far outpaced the corresponding drop in the proportion of metropolitan families earning middle incomes, from 28 percent in 1970 to 22 percent in 2000.

■ Between 1970 and 2000, lower-income families became more likely to live in lower-income neighborhoods, and higher-income families in higher-income neighborhoods. Only 37 percent of lower-income families lived in middle-income neighborhoods in 2000, down from 55 percent in 1970.

■ Only 23 percent of central-city neighborhoods in the 12 large metropolitan areas had a middle-income profile in 2000, down from 45 percent in 1970. A majority of families (52 percent) and neighborhoods (60 percent) in these cities had low or very low incomes relative to their metropolitan area median in 2000.

■ A much larger proportion--44 percent--of suburban neighborhoods in the 12 metropolitan areas had a middle-income profile in 2000. Yet this proportion fell over the 30-year period, too, from 64 percent in 1970, accompanying a smaller decline in suburban middle-income families. Suburban middle-income neighborhoods were replaced in roughly equal measure by low-income and very high-income neighborhoods

As someone who is currently doing research on urban economic development polciy, these findings remind me just how much of a challenge we face in working toward securing a better future for Middle Class Americans.

Go check out the entire study in .pdf format here. Also, the San Francisco Chronicle has a good article on the study's findings (via CommonDreams).

Saturday, June 24, 2006

Is the UK's Independent guilty of gross anti-Israel bias and libel?

Looks like the answer is no, but the whole thing is very confusing. Scroll down for updates (ed.)

I came across this article from The Independent (UK) over at Cursor. The article quotes Israel PM Ehud Olmert, referring to the deaths of 14 Palestinian civilians in Gaza due to IDF missile strikes, as saying:

"I am deeply sorry for the residents of Gaza, but the lives, security and well-being of the residents of Sderot [the Israeli border town which has borne the brunt of Qassam attacks] is even more important. I reject the attacks on the IDF and its commanders. No one is more dedicated or more cautious, and will continue to be so in the future." (emphasis added)

However, CNN International quotes Olmert as saying: ""I am deeply sorry for the residents of Gaza, but the lives, security and well-being of the residents of Sderot is no less important." Obviously, this is a small change that makes a very significant difference.

I have a hard time believing Olmert would come right out and claim the lives of Palestinian civilians are less important than Israeli civilians'. Is it possible the Independent's journalists made a translation error, or was it a purposeful deception intended to make the Israeli PM sound like a psychopath?

Update: Olmert appears to have offered this apology (or at least an apology) to Palestinian President Mahmud Abbas at an informal breakfast meeting in which the two leaders embraced each other--see this article from the AP, for example. I'm now even more skeptical about the Independent's "quote".

Update #2: I've exchanged emails with an editor at Cursor, and he has posted an update on the website. Additionally, I sent an email to the Foreign Desk Editor at the newspaper (foreigneditor@ asking for him to confirm where this alleged quote came from and to retract the quote if he was unable to do so. I haven't heard back from anyone yet, but I'll be sure to provide further updates if I do. Meanwhile, I strongly reccommend anyone reading this to likewise send a letter to the editor, regardless of whether you support or condemn Israel's military policy.

Some might argue that this quibble obscures the bigger issue of whether the IDF committed war crimes in targeting what it should reasonably have known were civilian areas with missile strikes. But I contend that such a clear case of media disinformation and bias (if it was a mistake and it was indeed deliberately made as I am assuming) is in fact something that fair-minded people would take umbrage with and seek to have addressed. Intellectual honesty requires us to demand honest reporting from major media outlets like the Independent, and the correction of mistakes if they are identified, regardless of whether this helps or hurts our ideological agenda.

Update #3: Still no word yet from The Independent, but I've cross-posted this over at DailyKos, and commenters there have pointed out that this is quite a strange story. It appears that the AP, CNN and Independent all got the quote wrong, at least according to the official transcript at the PM's office. According to the transcript:

"I genuinely regret the unplanned injury of innocent civilians in Gaza and Khan Yunis. Who else understands the pain of bereavement as we do and who else suffers the loss of these innocent victims? At the same time, I must say that the Government of Israel under my leadership will continue to carry out preventative strikes against planned terrorist attacks and against all those involved in the attempt to harm our citizens. I am deeply sorry for the residents of Gaza, but the lives, security and well-being of the residents of Sderot is even more important. I reject the attacks on the IDF and its commanders. No one is more dedicated or more cautious, and will continue to be so in the future."

Of course, there is also the possibility, as one commenter noted, that Olmert decided to ad-lib and thus his comments differed from the official transcript. Ideally, if someone could get a hold of the video clip of the speech and translate it from Hebrew (I'm assuming it was televised in Israel), we could get to the bottom of this. But as of right now, it looks pretty awful for Olmert. If in fact this is what Olmert said or planned on saying, it is a disgrace. Can you imagine Abbas telling the Palestinian people that he cares less about the welfare of Israeli citizens than of his own people? It would, of course, be front page news and he would rightfully be condemned by the US and EU.

Not sure if this is the last word, but I'll keep everyone following this updated. But as of right now, it is a strong possibility that the Associated Press significantly misquoted Olmert in a way that make his comments less inflammatory and controversial. Was it a mistake or purposeful editorial decision to "sanitize" the statement for Western consumption? I don't know the answer, but I'm going to do my best to find out.

Update #4: A writer over at Daily Kos has tracked down four different translations of the Olmert quote (see here), and apparantly even the PM's office has different versions between the English and Hebrew language pages! Still waiting to hear from The Independent and AP.

Exploring new progressive community asset-building strategies

Writing in the newly established quarterly journal Democracy, University of Maryland professor of political economy Gar Alperovitz compares traditional governmental programs for generating economic development and wealth creation, which mainly rely on the redistribution of funds through government policy, with newer, more innovative approaches.

These approaches being instituted on the state and local level include employee-owned firms, hybrid non-profits (including community development corporations), co-ops. the enterprising city", land trusts and financial institutions (including community development financial institutions and community land trusts) among others. According to Alperovitz:

"Taken together, the various strategies start to form the outline of a progressive ownership society–one in which neighbors work in concert to build wealth that benefits them, sometimes directly and often indirectly. Municipal and state economic efforts help strengthen community finances–and a sense of community as well. At a time when globalization and interstate job-chasing often mean economic and job dislocation, "anchoring" strategies (such as employee-owned enterprises and co-ops) keep jobs in place. They also contribute to the local tax base, thereby helping to provide resources for local services in a time of great fiscal pressure. A company owned by local residents rarely packs up and moves to Mexico.

These ownership efforts also begin to offer a genuine response to the extraordinary inequality of income–and especially wealth–that now characterizes the United States. Unlike tax breaks or income supports, wealth-building efforts, such as employee-owned companies, land trusts, and IDAs, also create the kind of assets that can be passed on to future generations. More than half of Americans–including 39 percent of those 55 or older nearing retirement–have less than $25,000 in non-home savings, and the absence of real assets presents a huge potential burden for their children and for society. Other efforts, such as community land trusts, enable low-income Americans to save more by defraying costs for housing and other expenses.

Finally, the anchoring feature of most community-wealth efforts has implications far beyond the purely economic. A growing body of research has shown that democratic participation is strongly related to community economic stability. Political scientists Sidney Verba, Kay Schlozman, and Henry Brady have demonstrated that "years in community" is a positive predictor of both national and local-level civic involvement, with the effect nearly twice as strong for local participation. Another recent analysis found that citizens who have lived in the same home for five or more years vote at much higher rates than those who have lived in the same home for a shorter time. Stable jobs produce not only strong communities, but also a strong citizenry."

It's a thought-provoking piece, and Alperovitz's thesis that funding for social insurance programs is unlikely to be expanded (even if the Democrats retake the White House and Congress), thus necessitating fresh approaches to developing programs that don't rely heavily on public spending, seems correct on an intuitive level. The underlying logic is that far from being a necessary evil, market-based approaches for local economic development can in fact complement or even replace purely public-sector schemes.

I recommend reading the whole article (it's fairly long, and requires free registration) to get a fuller sense of what each of these community asset building approaches entail.

Friday, June 23, 2006

"Justice for Janitors" demonstrates why unions are not just relevant--but essential

I'm all for giving credit where it's due: Time Magazine has a revealing article in this week's issue that powerfully demonstrates the importance of unions in organizing workers, securing a living wage for its members and improving the economic fortunes of entire cities.

The article compares Pittsburgh--where SEIU has successfully raised wages for janitors to $12.52 an hour and secured health insurance and other benefits through its "Justice for Janitors" campaign--to Cincinnati, where janitors still make $6.50 an hour without benefits. Besides the fact that Cincinnati janitors literally cannot survive on their wages, the union mobilization in Pittsburgh has netted benefits not only to its members but for the entire city.

The article notes:

"In Pittsburgh neighborhoods with high concentrations of janitors and other service workers, high school graduation rates and home ownership rates have risen steadily over the past two decades, according to Census data. Among janitors surveyed by SEIU, the rate of home ownership had grown to 57% by 2005, an increase of nearly 20% since 1990. Meanwhile the number of families below the poverty line has fallen.

As janitors' wages have risen, salaries for other Pittsburgh jobs have followed suit. Security guards, for instance, working in buildings where unionized janitorial workers are employed, have seen their earnings advance in parallel. Over the past three years, the median household income in the city has grown nearly 3%, from $39,643 to $40,699, adjusted for inflation. And annual janitorial-job turnover, as high as 300% in Cincinnati, is just one-tenth that rate in Pittsburgh. As a result, contractors' costs for recruitment and training are significantly lower. "For a community and its families, wage gains for low-income workers mean the difference between living precariously at the edge of the economy and having a stake in the American Dream," says Beth Schulman, author of The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans."

The situation in Cincinnati, where the Change to Win Federation (which split from the AFL-CIO last year) is initiating a "Make Work Pay" campaign to secure a living wage for janitors, is currently bleak. With janitors making $6.50 an hour, many can't afford basic healthcare, furniture for their apartment and a host of other "interdependence" issues. Without Change to Win playing an active organizing role, there is no chance workers in Cincinnati will ever receive adequate compensation or a chance for a future.

John Edwards is playing a big role in supporting "Make Work Pay!", and for that he deserves kudos. Edwards is going to run for president again in two years and I sincerely hope he continues to make workers' rights central to his platform.

Not suprisingly, corporate-financed think tanks like the dubious "Employment Policy Institute" have their disingenuous talking points ready to go. According to one of the organization's PR flacks, ""If employers are forced to increase wages," says Doyle, "jobs will be eliminated, there will be a decrease in the number of hours worked, and these low-skilled adults may find themselves out on the street." Forget the fact that the minimum wage in Ohio is only $4.25 an hour, one of the lowest in the US. Forget the fact that recent research by the Fiscal Policy Institute clearly contradict this insane propaganda.

I hope Change to Win is able to continue the important work SEIU has started and secure the janitors of Cincinnati and cities across the country with the living wages they deserve.

WSJ investigation shows executives' expensive pensions are protected despite cutbacks for workers

The Wall Street Journal has a front-page article in today's paper, and it's title says it all about the sad state of affairs for workers in America in 2006: "As Workers' Pensions Wither, Those for Executives Flourish". While the Journal rightfully has a negative stigma attached to it because of the outlandish editorials it publishes on a regular basis, its investigative financial reporting--especially on pensions--is truly top-flight. Ellen Schultz is simply the best journalist covering her beat, and everyone seeking to understand the complex issues involved with pension plans should try to read everything she writes (I know costs money, luckliy I get it for free through work.)

Schultz and co-author Theo Francis (who I had the pleasure of having drinks with a few years ago at a Union Square bar) get straight to business in the opening graphs:

Even as many [large corporations, such as General Motors] ]reduce, freeze or eliminate pensions for workers -- complaining of the costs -- their executives are building up ever-bigger pensions, causing the companies' financial obligations for them to balloon.

Companies disclose little about any of this. But a Wall Street Journal analysis of corporate filings reveals that executive benefits are playing a large and hidden role in the declining health of America's pensions.

Some of the findings from the investigation include:

• Boosted by surging pay and rich formulas, executive pension obligations exceed $1 billion at some companies. Besides GM, they include General Electric Co. (a $3.5 billion liability); AT&T Inc. ($1.8 billion); Exxon Mobil Corp. and International Business Machines Corp. (about $1.3 billion each); and Bank of America Corp. and Pfizer Inc. (about $1.1 billion apiece).

• Benefits for executives now account for a significant share of pension obligations in the U.S., an average of 8% at the companies above. Sometimes a company's obligation for a single executive's pension approaches $100 million.

• These liabilities are largely hidden, because corporations don't distinguish them from overall pension obligations in their federal financial filings.

• As a result, the savings that companies make by curtailing pensions for regular retirees -- which have totaled billions of dollars in recent years -- can mask a rising cost of benefits for executives.

• Executive pensions, even when they won't be paid till years from now, drag down earnings today. And they do so in a way that's disproportionate to their size, because they aren't funded with dedicated assets.

According to Schultz and Francis, one reason executive pensions have grown so large is that they are linked to ballooning overall executive compensation. Companies often design retirement payouts to replace a percentage of what a person earns while active. But for executives, the percentage of pay replaced is itself higher. The authors note that "compensation committees often aim for a pension that replaces 60% to 100% of a top executive's compensation." In stark contrast, it's 20% to 35% for lower-level employees.

What is going on here couldn't be more obvious and disgusting: big corporations, some of which are flush with cash and able to slather executives with outrageously rich retirement benefits, are screwing over their workers by modifying or even cancelling their pensions plans--pensions that were promised to them as a way for these workers to eventually retire.

It's not just companies like Exxon Mobil, which is swimming in record profits, that are hypocritically financially raping their employees. As the article makes clear, it also includes "blue chip" companies like GM, IBM, Lucent, Pfizer, AT&T, Time Warner and many others.

So to recap: Millions of workers are finding out that the pensions they have been promised are suddenly gone, their retirement plans evicerated simply because management decided it could save some money. But while laughing at their powerless underlings, executives are effectively stealing millions of their dollars in obscene "executive compensation" formulas. It seems that in 21st Century America, this type of legalized wholesale theft and lying is commonplace at many high-profile companies. Apparantly, corporations have spent a lot of time and money figuring out how to hide this scheme from shareholders and workers themselves, and it has taken a media investigation to discover just the tip of the iceberg.

Thursday, June 22, 2006

The media continues to mislead public about support for Iraq war

Greg Mitchell has an important piece in today's Editor & Publisher that I highly recommend. He points out something that's well-known to anyone who has been following the disastrous Iraq war, but a phenomenon that is either ignored or distorted by the media. And we're not talking about FoxNews, we're talking about the so-called "liberal media" like the New York Times and the Washington Post. Namely, "[E]very major poll reveals that a majority of Americans advocate withdrawals from Iraq, with large numbers wanting this to be quite speedy, and most wanting a full pullout in a year or so (Kerry's idea) or by the end of next year."

Polls from Gallop to NBC News/Wall Street Journal to CNN show a majority of Americans think the Iraq was was a mistake, not worth the sacrifice that has been made and support establishing a firm timeline for troop withdrawal within a year. And perhaps most importantly, a majority believe that the war in Iraq is the single important political issue, that Bush is mishandling the war (giving him only a 35% approval rating) and say a Congressional candidate's position on the issue would be an important consideration for them when deciding who to vote for in November.

But as Mitchell makes clear in his column, the so-called media elite are bending over backwards to distort public opinion in an attempt to appear to be "fair and balanced". But I'd rather them just stick to the facts. I'm not arguing that the war is as overwhelmingly unpopular as some other issues, but we are talking about a clear majority and it's hard to understand why the Washington Post and New York Times wants to downplay how out-of-touch our president's handling of the war is from most voters.

Politicians, especially Democratic politicians, who are afraid to criticize the war and support a withdrawal plan within the next twelve months, are deluding themselves if they think this position will help them curry favor with voters in November. Crafting and implementing a withdrawal plan is something that the entire Democratic party, if it is serious about retaking either the House or Senate in November, should get behind fully and put front and center in their campaigns.

The causes of the impending pension shortfall crisis

Blogger Bonddad provides us with some numbers that explain the reasons behind, and severity of, the looming pension shortfall crisis which is being ritualistically ignored by those who shuld be most concerned:

In just the last four years, the number of monthly checks the Pension Benefit Guaranty Corporation (PBGC) sends to retired workers has swelled from 344,770 to 683,000, doubling annual payouts from $1.54 billion to $3.69 billion and turning the PBGC's budget from a tidy $10 billion surplus in 2000 into a $23 billion deficit last year.

Why? In 2005, companies sponsoring underfunded pension plans filing under section 4010 of ERISA, reported a record shortfall of $353.7 billion in their latest filings with the PBGC. This represents a 27% increase over the $279 billion in underfunding reported a year earlier. The PBGC is essentially being asked by industry to cover the gap.

The underfunded plans in question had $786.8 billion in assets to cover more than $1.14 trillion in liabilities, for an average funded ratio of 69%. As of September 30, 2005, the PBGC estimated that the total shortfall in all insured pension plans exceeded $450 billion.

So what does all of this mean for the millions of workers who are retiring from these companies?

Imagine a retiree who is expecting and planned his retirement based on an annual income of $60,000. When the PBGC gets that pension, he immediately takes a pay cut of about $12,500. All this for doing nothing but working for a company for his entire life and expecting the company to make good on its promise to provide for the retiree's retirement.

Pathetically, some companies like Exxon Mobil--which has been raking in billions of dollars in profits--and are still refusing to make good on their promise to provide for their employee's retirements.

As BusinessWeek notes:

Exxon Mobil, has left its employee pension plans with the biggest funding deficit. Its assets are $11.2 billion short of projected obligations, according to company figures as of Dec. 31. Exxon could write a check for its underfunding this afternoon. The oil giant has $27 billion in its coffers. It generated free cash of $9 billion last quarter -- almost enough to cover the pension shortfall. And it carries an AAA credit rating.

[. . .]

The fact is, Exxon could be topping off its tank for employees but isn't. It's declining to put more money away for a rainy day while the sun is shining on the oil industry. And it isn't apologizing, either. "We basically chose not to," says Gardner. "That's not an investment we want to put more into at this point. Our financial strength provides excellent security for any pension.

So according to Exxon Mobil, it was a priority to provide retiring Chairman and CEO Lee Raymond with a $400 million retirement package, yet when it comes to the company's workers, management is perfectly willing to take their chances and let American taxpayers foot the bill for their underfunded pension plans.

Tuesday, June 20, 2006

US air strikes in Afghanistan: More evidence of war crimes?

Conn Hallinan, writing in Foreign Policy in Focus, notes that the US may committing war crimes (specifically, Crimes Against the Peace) in Afghanistan.

An air attack that killed 16 civilians in the village of Tolokan in Helmand Province, which was not the first such incident, has sparked riots in Kabul. "At least 33 other civilians were killed in an air strike May 21, and villagers are reportedly streaming into Kandahar to avoid the bombings." notes Hallinan, citing a report in the Financial Times.

Hallinan then goes to the heart of the matter, something the mass media in the US and UK seem unwilling to do:

According to reporting by Seymour Hersh and Knight Ridder, the United States has dramatically stepped up the air war in Iraq, and it would appear “pacification by bombs” is also underway in Afghanistan.

U.S. spokesman Col. Tom Collins said the deaths in Tolokan were the fault of the Taliban. “The ultimate cause of why civilians were injured and killed is because the Taliban knowingly, willfully chose to occupy the homes of these people.”

If his statement is true, the Taliban would indeed be violating international law. So would the United States.

Article 48 of the 1977 addition to the Geneva Conventions, Part IV, states, “The Parties to the conflict shall at all times distinguish between the civilian population and combatants and between civilian objects and military objectives and accordingly shall direct their operations only against military objectives.”

Article 50 is even more explicit: “The presence within the civilian population of individuals who do not come within the definition of civilians does not deprive the population of its civilian character.”

In short, if insurgents are mixed up with civilians, you can't call in air strikes, period. Anyone who does should be hauled before the International Court at The Hague.

But of course, the Bush administration has already made it clear to the world community that it considers the Geneva Conventions to be quaint and not applicable to our troops in our war against terrorism. The thinking seems to be, since they (the Taliban) don't play by the rules of war, we won't either. Never mind that as signatories to the Geneva Convention, these laws are binding on our troops' conduct.

I wouldn't hold my breath waiting for Donald Rumsfeld to be put on trial at the Hague, as the US does not recognize the jurisdiction of the ICC for exactly this reason.

Just as Bush holds out that he is above the law in his domestic prosecution of the War on Terror (think illegal detentions of American citizens in military prisons without giving the accused access to counsel or charging them with crimes, or the decision to break FISA laws and illegally listen in on citizens' domestic phone conversations), the US military acts as if it can violate international law because no international body has the authority to hold them accountable for their crimes.

How much should hospitals spend for dying patients?

A few weeks ago on this blog, I noted that one of the reasons Medicare is in such dire straits is that besides inefficiencies in hospital administration, the introduction of private "advantage" insurance providers and the exploding costs of prescription drugs, providing medical treatment for patients who are chronically ill and dying is a huge drain on the program's limited resources.

Today's Philadelphia Inquirer discusses the ramification of this enormous cost burden on society, and whether it translates into appropriate treatment beying provided to patients.

The article notes that according to researchers at Dartmouth University, Philadelphia-area hospitals may be providing more care than is necessary, driving up costs without improving survival rates for patients. In the last two years of life, Medicare spent an average of $38,872 on chronically ill patients in the Philadelphia region. This is only a little higher than the national average of approximately $30,000 a year for dying patients.

"The Dartmouth researchers estimate that the Medicare program could save $40 billion a year - nearly a third of its spending on the chronically ill - if the nation's hospitals all delivered care with the high quality and low intensity" provided by health systems such as those in Salt Lake City, Utah (considered a national model).

The solution is unfortunately not as simple as simply implementing this "low intensity" model across the country, however. Socioeconomic and demographic factors and many other differences between providing health care in urban and rural settings makes it difficult to apply the Salt Lake City model in Philadelphia or New York City, for example.

One of the takeaways of the article is that there is waste and inefficiency in the Medicare program due partially to the fact that there are some difficult decisions our society and politicians need to make in the realm of biomedical ethics. And while I think a single-payer, universal healthcare system would be the best policy choice for the US, adopting it would clearly not be a panacea.

The $30,000 to $40,000 spent in providing medical treatment for a 90 year old who has a low quality of life and will not live long anyway might seem to be a inefficient use of resources on one hand (especially when that money could help save the life of a 40 year old on welfare who has developed treatable cancer and is otherwise healthy), but who wants to be the person to tell the 90 year old's children that providing him with care is not worth it. Cost-benefit analysis is a useful tool for deciding which construction project to undertake, but is it the appropriate methodology for allocating money for end-of-life healthcare treatment?

AP article contradicts insurance industry claims

Evidence that capping jury awards doesn't bring down health insurance premiums from the AP (via SirotaBlog):

Despite promises that rising medical malpractice insurance rates would be suppressed under new state laws, many of Georgia’s insurers have hiked their premiums since the sweeping reforms took effect last year, according to an Associated Press analysis of state insurance records.Six of the state’s top insurers of doctors and dentists have increased their liability rates - in some cases, by more than a third - since new restrictions on malpractice cases became law in February 2005, according to state Department of Insurance records obtained by the AP through an open records request.

This latest evidence comes on the heels of a recent Harvard study that proves there really isn't a malpractice "crisis" that necessitates the capping of jury awards (or what Republicans call "tort reform") in the first place.

Sunday, June 18, 2006

Raising the minimum wage gaining political support

Even though I'm unwinding for the next few days down at Cape May, NJ, I thought I would post links to two interesting articles vis-a-vis the minimum wage.

First, the State House of Representatives in Delaware has voted to increase the minimum wage there.

The wage would go from its current $6.15 per hour to $7.15 an hour during the next two years in two steps. Starting next year, the wage would go to $6.85 per hour, and in 2008 the wage would go to $7.15. The federal minimum wage is $5.15 an hour.

However, as some have noted, while this is undoubtably a step in the right direction, there is no provision for inflationary adjustments and it keeps in place a $2.23 per hour minimum for people who receive tips. Factoring in at least a 2% increase per year to account for inflation is necessary to ensure workers' real wages aren't eroded in several years' time.

Second, there seems to be some progress in raising the federal minimum wage as well. As reported in the Albany Times-Union, the Republican-controlled House Appropriations Committee approved an amendment to raise the hourly minimum wage from $5.15 to $7.25. The 32-27 vote came after seven Republicans, in a surprise move, crossed over to vote with Democrats.

While Democrats like Ted Kennedy see this as a sign of progress, there is a good chance nothing will come of this. As the article notes:

The amendment was attached to a fiscal 2007 bill to fund health and education programs. The committee does not have jurisdiction over labor issues, so the provision likely will be stripped from that bill when it comes up for a vote this fall.

According to Kennedy, however, lawmakers would be reluctant to give themselves another raise this year before boosting the minimum wage.

"I don't see how in good conscience members of Congress could turn their back on the minimum wage," Kennedy said.

But perhaps Mr. Kennedy has already forgotten that Congress voted themselves a pay raise last year, despite not raising the minimum wage and despite publicly promising they wouldn't take a raise.

Not suprisingly, the hacks at the National Retail Federation are claiming that raising the minimum wage would "hurt small businesses and discourage job creation", despite the fact that numerous studies have proven that raising the minimum wage in fact can have exactly the opposite effect. (For example, check out this book by economists David Card and Alan Krueger called Myth and Measurement that analyzes how New Jersey's increase of their minimum wage in the early 90s actually led to job creation in fast food restaurants relative to Pennsylvania, which did not increase its wage).

Perhaps the best news is that the Democrats are finally serious about making important economic issues top priorities and a central part of their electoral platform. I'm cautiously optimistic that they're serious.

The purchasing power of the minimum wage has decreased by 25% since 1997 and adjusting for inflation it is at its lowest level since 1955. This is clearly an unacceptable situation for honest, hard-working Americans and it is way past time for Congress to take action.

Update: Ted Kennedy, guest posting at ThinkProgress, urges everyone to get behind his bill to raise the federal minimum wage to $7.25 an hour.

Update #2: Hate to say I told you so. . .but I told you so.

Wednesday, June 14, 2006

ALBA and the repudiation of the Washington consensus

Writing in Z Mag, Sujatha Fernandes looks at the potential for a new Latin American trade deal that could challenge Washington's neoliberal "free" trade arrangements such as NAFTA and CAFTA.

Venezuela’s president Hugo Chávez, Brazil’s president Lula Inacio da Silva, and Nestor Kirchner, president of Argentina, met in Sao Paulo, Brazil on April 26 to discuss possibilities for integration and collaboration. On April 29, Cuba’s president Fidel Castro met with Chávez and newly elected Bolivian president Evo Morales to sign a People Trade Agreement (TPC), which is seen as a step towards the alternative trade agreement being proposed by Chávez, the Bolivarian Alternative for the Americas (ALBA>.

The failures of the Washington Consensus and popular discontent with Free Trade Agreements have generated new revolutionary models of solidarity, cooperation and unification in the Americas. After decades of austerity, growing inequalities, and US domination of the region, national governments are beginning to reject Washington’s recipe for corporate-led growth in favor of social development models. Whether the region can truly begin to carve out an alternative path will depend on the outcomes of upcoming elections in Peru, Colombia, and Mexico; the extension of ALBA beyond a small group of countries; and the ability of social movements to shift the focus away from further exploitation and mega-projects as the basis for regional integration.

A well-written piece that puts a potential Venezuelan-Brazilian-Argentinian trade pact in to historical context, and it explains why such a counterweight to US crafted trade policies are so vital to the economies of these Latin American countries. Read the whole thing.

We're not going anywhere

As politicians, pundits and journalists continue to endlessly debate when our troops will finally be able to leave the shooting gallary you and I call Iraq, another important question is being left untouched. Or, more accurately, ignored.

Are we building permanent military bases in Iraq on a very large scale?

Luckily, Billmon brings us up to speed on what the Bush administration's real plans are. Despite all of the administration's hedging, it looks like we are definately planning for a long-term military presence there.

Quoting the New York Times:

"Mr. Bush on Friday made clear that the American commitment to the country will be long-term. Officials say the administration has begun to look at the costs of maintaining a force of roughly 50,000 troops there for years to come, roughly the size of the American presence maintained in the Philippines and Korea for decades after those conflicts."

For more background on our plans to build permanent basis, check out this old piece from TomDispatch here.

If we are trying to prove to the world that we invaded Iraq to bring freedom and democracy, building long-term military bases in a nominally free and soverign country would seem to be a bad step to take.

Monday, June 12, 2006

More on Bush's power grab from the NY Review of Books

A nice, long, comprehensive article in the New York Review of Books on Bush's unprecedented consolidation of power into the Executive Branch (i.e. the "unitary executive"), as well as his flaunting of the Constitution and purposeful disregard of literally hundreds of laws.

Bush has used the War on Terror as a pretext to abuse his office in such a blatant manner that would likely have been unimaginable to our Founding Fathers. Glenn Greenwald and the Boston Globe has written a lot about Bush's apparant belief that he is above the law, and in his deranged efforts to defend us from "evildoers" he can selectively choose to follow--or not follow--the Constitution and the very bills he signs into law.

Intimidation, manipulation and outright lying are the modus operandi of the Bush administration. It does not view the Constitution's explicit checks on the powers of the president as applying to him because he is (at least in his mind) a war president! Congress, the press, the judiciary...they are all subservient to his own agenda and unworthy of his respect.

The article goes through a litany of Bush's abuses and traces how they were all justified as being within his power to do thanks to the concept of the "unitary president". As the author notes, this is an important story that hasn't received much media attention and has mostly been relegated to obscurity. Read this article to begin to get the contours of this power grab and how serious of a threat to our liberties, and the future of America, it truly is.

Christian Science Monitor article explains why preserving the Estate Tax is important

An article written by David Francis in the Christian Science Monitor surveys the economic literature on the Estate Tax, and how the Senate's rejection of a permanent repeal of the tax last week was good news for the US's long-term fiscal health.

The article refutes one of the most pernicious myths floated by right-wing advocates of repealing the Estate tax:

"Opponents of the estate tax argue that it hurts the economy by hitting savings.

Not so, says Joel Friedman, an economist at the Center on Budget and Policy Research. He cites a study by the politically neutral Congressional Research Service which concluded that eliminating the so-called "death tax" would have a "negligible" impact on savings and output. In fact, the CRS says, by depriving the government of major revenues (thereby adding to the national debt), eliminating the tax may have a negative impact.

If repeal of the estate tax is made permanent after 2010, the cost to the US Treasury over the following 10 years would be nearly $1 trillion in lost revenues and higher interest payments, says Mr. Friedman. That assumes the maximum tax rate returns to 55 percent with an exemption of $1 million for each estate. (Few estates would pay such a high rate, given various tax breaks.)"

But don't expect the supporters of Estate Tax repeal to be swayed by facts and figures: They want to continue to grow the gap in wealth between the rich and poor while starving the federal government of much needed revenue, an agenda that is as irresponsible as it is predictable for these class warriors.

Some Senate Republicans like Conrad Burns are saying they refuse to give up, and are currently looking at other ways to slip a repeal in, perhaps by attaching it to another piece of legislation. But as the Seattle Post-Intelligencer notes in an editorial today, repealing the Estate Tax will be a hard sell for the Middle Class, who would be hurt by a repeal.

David Moberg: "Globalization cuts both ways"

In These Times columnist David Moberg has a new column called Delphi Dodges Union Contracts and it is truly essential reading for anyone who wants to understand the role corporate globalization and the manipulation of bankruptcy protection are being used as bludgeons against their employees by executives who run their companies into the ground, only to position themselves for huge bonuses.

The article looks at Delphi Corporation's recent bankruptcy filing, but the issues at play could have broad repercussions for workers rights and economic security across many sectors. At the end of the article, Moberg quotes a Delphi employee as argung “It’s not just a Delphi issue. It’s a national issue.” I couldn't say it better myself.

Check out the article.

Saturday, June 10, 2006

The phony Bush peace offer to Iran

Edward S. Herman has just published an editorial at ZNet called "U.S. Willing to Talk, With Conditions, and the Media Bites Once Again" and it is well worth a read. He discusses the media's history of gullibility and eagerness (or at least willingness) to accept government propaganda at face value and how even after the illegal war in Iraq, they still havent seemed to learn their lesson.

There has been ongoing speculation from well-respected investigative journalists including Seymour Hirsch and others as to whether an attack on Iran is imminent or not, and obviously I don't have any answers on this. But it does seem clear to me that although Ahmadinejad is clearly an anti-Semite and supporter of spreading terror throughout the Middle East, there is no justifiable reason for the US to "pre-emptively" attack Iran (especially but not limited to using nuclear weapons). The irony of the US's threats to bomb Iran's nuclear facilities to prevent them from enriching Uranium, which itself is clearly an attempt by the Iranian regime to deter an attack by the Bush administration, is clearly not lost on the Iranian people.

Herman puts forward a cogent argument that the administration's latest offers to "negotiate" with Iran are a transparent propaganda effort to provide cover for them to do what they have intended to do all along: invade Iran.

He notes:

The Bush administration has openly acknowledged that its aim is Iranian "regime change," and it has engaged in a series of aggressive and provocative moves designed to achieve that outcome, including subsidizing internal dissidents within Iran, encouraging cross-border attacks from Iraq by Iranian expatriate terrorists, collecting data on Iranian targets by spy drones and on-the-ground incursions, and threatening to attack its latest target. It sabotaged the EU effort to negotiate a deal with Iran by refusing to agree to security guarantees to Iran as a part of the settlement. Why would it do that if its worry was only about Iran's possible development of a nuclear weapons capability? But just as the media didn't suggest a Johnson hidden agenda of surrender [to the North Vietnamese], so the media today refuse to focus on the agenda of regime change in interpreting the new offer even as it stares them in the face.

Given the objective of regime change, and the fact that the United States has been subject to criticism for its long unwillingness to negotiate with Iran, an obvious hypothesis is that, like the Johnson peace offers of the 1960s, the new U.S. offer is intended to be rejected while giving the cooperative media and "international community" a public relations bone to chew on. If the latter are sufficiently gullible they will congratulate the Bush administration for its new openness and allow the onus to be put on Iran if it rejects an offer intended to be rejected.

The Bush administration is only prepared to "negotiate" after Iran terminates its nuclear activities, the termination to be established by intensive inspections. Why should any conditions for negotiations be imposed on Iran? Why not just negotiate? Wouldn't the condition demanded by the Bush administration open the door to further U.S. insistence on endlessly intrusive inspections that never satisfied the Bushies in Iraq and could well stall "negotiations" with Iran indefinitely? Why should Iran have to make serious concessions in advance as a condition of negotiations and the United States make none? Ms. Rice has insisted on Iraq's suspension of nuclear activities on the ground that the administration doesn't want a gun pointed at its head, but as Selig Harrison points out, "then she points a gun at their head by saying that 'all options are on the table.'

Of course, the New York Times will not analyze such obvious points as they constitute to the media elite "conspiracy theories" much as evidence that Iraq had no Weapons of Mass Destruction were the delusions of far-leftist peaceniks and Saddam sympathizers.

I don't agree with all of Herman's analysis (as per usual). He claims that Iran is not a threat to Israel because Ahmadinejad's calls to "wipe Israel off the map" were the result of "mistranslations". From everything I've read, including from sources I generally trust like Juan Cole, this is simply not correct. And I don't think Iran's hosting a state-sponsored Holocaust Revisinism conference is a mistranslation or misunderstanding either.

But Herman is right that Bush's latest efforts at diplomacy, and the media's favorable coverage of these developments, is nothing more than state-sponsored spin and PR, and an unwillingness to report on it critically. And conveniently, the media is now suffering amnesia about Iran's previously rebuffed overtures (for just one example of this, see this article by Eric Alterman).

For more background, see this article co-written by Herman and David Peterson at the Center for Research on Globalization and this article by Peterson from Counterpunch.

The US public's perceptions on rising economic inequality

In a paper entitled "The Rising Risks of Rising Economic Inequality: Do Americans Care?", Northwestern University sociologist Leslie McCall argues that economic insecurity and the "increasing privatization of risk" is "but one part of a larger transformation in American society, albeit a very central part: the rise in inequality in economic well-being." This is in direct contrast to political scientist Jacob Hacker's central thesis, as expounded on in his recently published book The Great Risk Shift that economic insecurity in the US is currently a bigger challenge for the middle class than inequality. McCall has done some thinking outside the box in her paper, and goes beyond considering the impact of inequality to understanding why the issue is of public importance and what public perceptions of the phenomenon are.

One of her key insights, which while it may appear obvious too often gets neglected in policy discussions, is that even though academics/politicians/"elites" may argue over whether ‘real’ insecurity has increased or not (as well as disagree about how to measure these changes), Americans’ personal experience of their economic well-being remains and ought to remain a separate question. Or, as McCall puts it succinctly: "While Jacobs and Newman focus on Americans’ changing perceptions of economic security, I focus on Americans’ changing perceptions of the fairness and necessity of inequality, which I argue captures the broader transformations of which increasing privatization of risk is a central part."

According to McCall, while Americans generally are less opposed to economic inequality than they are opposed to political inequality, the reason for this is that wealth is seen as being a result of talent and hard work. But in recent years, this baseline assumption has become less based on reality, as economic and social mobility have declined.

She argues:
In this new environment, it is harder to assess whether opportunities for upward mobility are still open or are being thwarted, especially if Americans continue to assume, in a kind of historical lag, that all growth is equitable growth. What is needed is a way to look beyond an array of truly positive economic developments—low unemployment, a strong stock and housing market, technological competitiveness, to name a few—to the question of whether economic opportunity is nevertheless unfairly limited. Because it is possible that Americans would accept some degree of unfairness if they think it is necessary to maintain overall growth, economic conditions that seem unnecessary as well as unfair are the most likely to unsettle Americans’ faith in the American Dream.

So Americans do care about what they consider to be "unfair and unnecessary forms of inequality" because they see these as barriers to social mobility, but the problem is that these barriers are not terribly transparent. And she argues they are less transparent now than they were in the second half of the 20th Century - when national economic growth was more equitably distributed.

However, since the 1970s, equity and growth have effectively become decoupled. In this new environment, "it is intrinsically more difficult to identify the workings of inequality in practice, particularly if Americans’ assumption that all growth is equitable growth persists. Because Americans’ faith in their own prospects for upward mobility is so firmly embedded in the dynamism of the American economy, they might accept cutbacks in benefits if they are deemed necessary to maintain growth and competitiveness. It is therefore critical that such cutbacks be seen not as a shared sacrifice but as an unfair burden on the majority of working families while the “undeserving rich” are spared, or even further enriched by the process."

New York Times reports on "baffling" new Medicare prescription drug plan

You can read the article here.

As the piece makes clear, even though the Bush administration insists everything is going swimmingly, there is palpable anger felt by Americans at the way this new program works (or doesn't work), particularly with the infamous coverage gap that can lead seniors to have to pay hunderds of dollars for their perscriptions after just a few refills.

The article notes: "The new drug benefit is potentially a boon to low-income people because they can get extra help with their drug costs. But more than half of the applications for extra help have been rejected, often because a person's assets or income slightly exceeded the federal limits."

It also doesn't help that almost no one, including physicians, pharmacists and beneficiaries, understands what is or isn't covered or how to navigate the labrynthine new system. While some argue that the perscription drug plan looked great in theory, its application is almost universally panned as an unmitigated disaster.

It will be interesting to see if this becomes a political liability for the GOP come November elections.

Addressing runaway CEO compensation

Center for Economic Policy Research economist Dean Baker, writing at his excellent blog Beat the Press, has some good suggestions for reforming corporate governance practices that would address out-of-control executive compensation.

He suggests: Requiring that the compensation of packages get sent out for shareholder approval at regular intervals; Require that shareholder proxies that don't get returned don't count (currently, the standard practice now is that unreturned proxies are counted as supporting management.); and making corporate directors personally liable for not using proper care in setting CEO pay.

And if you get a chance, I highly recommend checking out Baker's new book, The Conservative Nanny State for free online here. I'm in the middle of reading it, and it truly is required reading for anyone interested in understanding how our government's supposedly "free market" economic policies create a structurally imbalanced playing field in favor of big business interests, to the detriment of lower and middle class workers.

Death of a boogeyman

Zarqawi is dead and those who support our continued presence in Iraq hail it as yet another "milestone" and "turning point". Of course, to imagine that no one will rise up and replace Zarqawi as head of al Qaeda in Iraq is wishful thinking: Our actions in Iraq on a daily basis are creating scores of new terrorists. We have failed miserably in rebuilding Iraq's infrastructure in the past three years and by all appearances the newly created Iraqi government is wholly incapable of protecting its citizens from the ongoing secterian violence that has claimed tens of thousands of lives a year. Counterterroism analysts seem almost unanimous in their belief that this assasination will not deal a severe blow to al Qaeda, more likely only a small dent.

In fact, Zarqawi's death could serve to unite Sunni and Shiite, religious and nationalist insurgency groups and lead to more coordination and cooperation in the resistance in general. With Zarqawi's death, there is "a strong chance of a major reconciliation between the Shi'ite groups and the Sunni-dominated Iraqi resistance: the main irritant in their relations is dead," according to Sami Moubayed of Asia Times Online.

No one has written more insightfully--or caustically--about the propaganda uses of Zarqawi for the US media and militaty than Billmon (see here). And Mitchell Freedman notes that Bush's refusal to take out Zaraqwi after September 11th is rarely mentioned in the media these days, despite the fact that if it were President Clinton or Gore who failed to take him out, the Right Wing noisemachine would be howling for their impeachment. (See this report from the Wall Street Journal from 2004 provides additional details).

After the death of yet another boogeyman, we can look forward to Bush raising the terror alert level due to nonspecific, non-credible threats we learn from the prisoners being torutured in Guantanamo, right in time for July 4th. Anything to change the subject from Haditha and the other war crimes the Bush administration is possibly complicit in.

Update: Danny Schecter has some more analysis on the implications of Zarqawi's "elimination" on the media war, and points to the suspicious timing of the airstrike (there is evidence that the US have known of his whereabouts since May).

Chris Floyd offers up his take on the significance of Zarqawi's death at his blog Empire Burlesque. And writing at Glenn Greenwald's blog Unclaimed Territory, Hume's Ghost makes the case as to why he doesn't celebrate the killing of Zarqawi. Finally, Tim Dickerson from Rolling Stone's National Affairs blog lists some questions that have been left unanswered after the killing.

Friday, June 09, 2006

House votes for telecom industry, against net neutrality

For those of you, like myself, who haven't been following the issues involved with preserving "net neutrality", read this editorial by professors Larry Lessig and Robert McChesney from the Washington Post here. This is a complex regulatory issue with a lot at stake in terms of the future evolution of the internet and is thus a subject everyone should familiarize themselves with to the extent possible. I think Lessig and McChesney do a good job boiling down the argument in favor for net neutrality, that is the importance keeping access to all websites "toll-free".

Those opposed to the measure, namely giant telecom companies and their lobbyists (including Mike McCurry, formerly spokesman for the Clinton White House), argue that the internet is "creaky" and needs a lot of money to be improved. They argue that net neutrality would force the telecom companies to finance this necessary investment in infrastructure on the backs of consumers. These arguments are so ludicrous on their face I'm not going to bother linking to them (you can find some lobbyist-written editorials yourself, if you are so inclined, on the pages of the Washington Post).

Not suprisingly, the GOP-controlled House of Representatives moved quickly to do the telecom industry's bidding and voted for a sweeping piece of legislation that will allow these companies to control the quality of access internet users will have for web sites hosted by rival providers.

As the New York Times notes: "[T]he House bill reflected the considerable clout of the telephone industry in the House, and in particular its ties to the Republican leadership there. Rivals of the phone companies, particularly the cable industry, appear for now to have more important allies in the Senate. And the Senate's rules and customs, unlike those in the House, make it easier for a smaller number of lawmakers to influence and delay legislation.

In the meantime, the flurry of activity is proving to be lucrative on K Street, as every major lobbying firm has been enlisted and campaign coffers are filling with millions of dollars from the telephone, cable, software and high-tech industries trying to shape the legislation. In recent days the phone companies began to run attack ads on television and in local newspapers against Google over its "Net neutrality" stand."

Thursday, June 08, 2006

Americans want universal healthcare, but details remain murky

A working group created by Congress is reporting that the American people support establishing a form of Universal Health Care as the best way to address the current insurance crisis by the year 2012. But as CNN reports, the people polled by a bi-partisan commission established by Congress were not asked how such a plan would be financed, or who would be responsible for paying for it. However, there was support for raising taxes for funding if it was necessary to do so.

Given the failure of managed care to control costs and the unpopularity of Bush’s so-called market-based approach to health insurance, Universal Healthcare would be the most pragmatic and effective path to providing the 40 million uninsured Americans with coverage. But the details of administering the plan are fraught with political concerns and as in the past may prove to be the biggest obstacle toward adoptation and implementation.

As reported by the media, the recommendations of the national panel, which will be completed after a comment period that ends in September, call for “immediate and long-range changes”.

In the near term, all Americans should have “protection against catastrophic healthcare expenses, either through a government program or a private insurance plan”.

The panel, called the Citizen’s Health Care Working Group, also called for increased support for safety net healthcare providers, such as community health centers, and for a concerted effort to improve quality of care and information for patients. And it called for increasing access to hospice care for patients nearing death.

By 2012, all Americans should have coverage for a core package of healthcare services, including preventive care, doctor visits, hospitalization and prescription drugs.

To read the Working Group’s interim recommendations, click here. For more coverage on the report, check out the article in the Los Angeles Times here.

It should be interesting to see how the public hearings on these recommendations unfold, and to what extent money from the pharmaceutical and insurance industries set the terms of the debate. Bush and the GOP Congress are clearly hostile to the very idea of a single-payer scheme, preferring a market-based approach like Health Savings Accounts. But if the public makes it very clear that unlike gay marriage, their demands for universal coverage in the next decade is a key concern and priority, it could make it more difficult for those setting policy to avoid moving in this direction.

Hopefully, like raising the minimum wage and moving toward the public financing of elections, figuring out a way to pay for universal healthcare (i.e.: selling the public on a repeal of some of Bushs tax cuts on the rich) can become a key plank in the Democratic party's midterm election platform in 2006. As the results of this Working Group makes clear, it's a winning issue.

Democrats need to decide on an economic agenda

Writing at TomPaine, Thomas Palley contrasts the different economic policy prescriptions of the “New Democrats” and progressive Democrats, terming the former the “cuckoo strategy” and the latter the “phoenix strategy”. It’s a useful frame for understanding how different ideological groups view the role of the market and its relation to society, both of which inform the direction in which economic policies are crafted.

Both Palley and I would prefer the phoenix strategy as a nod to the legacies of Franklin D. Roosevelt’s New Deal and Harry Truman’s Fair Deal. Palley notes, however, that this will be a difficult undertaking as it requires a complete re-evaluating of the role of the market, and different alternatives to current taxation, labor protection and trade policy. It requires convincing the American people that the status quo is not fixed in stone, and more progressive policies can help achieve greater economic equity across the socioeconomic spectrum.

GOP tries the gay marriage diversion again

E.J. Dionne hits the nail on the head with his latest editorial in The Washington Post:

Social conservatives, who are a lot smarter than their leaders think, should watch the Senate closely this month. My bet is that their so-called champions will fight much harder on behalf of the interests of the affluent than for the "values" that conservative politicians proclaim with such pious urgency whenever they're in danger of losing an election.

When will people realize that like abortion, gun control, flag burning and religion in public schools, gay marriage is really just a pathetic smokescreen used by Republican politicians to shore up support from their base? And what do they then do with this support? Cut taxes for the rich and invade countries in the Middle East, of course. As Dionne correctly observes, “the Republicans go hot and cold on the social conservatives, but they're always solicitous of the really, really privileged.”

As one social conservative quoted in the editorial asks rhetorically: “"We couldn't help but notice the contrast between how the president is approaching the difficult issue of Social Security privatization . . . and the marriage issue. Is he prepared to spend significant political capital on privatization but reluctant to devote the same energy to preserving traditional marriage?"

Of course the Senate rejected the utterly unnecessary same-sex marriage ban by a wide margin (getting just 49 votes out of the 67 necessary for a Constitutional Amendment). Meanwhile, the GOP pursues its real priorities like repealing the Estate Tax (which also fortunately failed to win support in the Senate).

All of this is right out of Thomas Frank’s What’s the Matter With Kansas? and a tried-and-true diversionary tactic employed by the Right—often successfully as in the 2004 election. With a close presidential race, all of a sudden gay marriage became an important enough issue to get put as a referendum on several red state ballots, helping to increase voter turnout for the GOP. Then, after the election, Bush basically punted on the issue.

Hopefully, this country can start to recognize that there are more pressing concerns than whether two men are allowed to marry each other, or whether burning the US flag in protest is illegal. With a war still raging in Iraq, the need to reconstruct much of the Gulf Coast and the Middle Class being squeezed by bought-off politicians from both parties and the weakest wage and job creation during the last five years of economic expansion since World War II, it’s time to get our priorities straight.

Wall Street hates the Iraq War

So says Ken Miller, a former investment banker and money manager writing in The Nation. He notes that while some sectors and players in the business community inevitably do profit from wars, most bankers actually don't do well with war. The old saw that war is good for the economy is more myth than reality. And there seems to be particular animus felt by financiers toward the directionless, never-ending conflict raging in Iraq.

Miller notes: "Wall Street could like a well-organized and properly prioritized "war" on religious extremism. Reordering the education system to play a greater national role with emphasis on teaching the skills necessary to fight a long-term battle, developing an energy policy based on conservation and technology, investing in human intelligence and the type of war-fighting capabilities that the new realities imply--none of this would cause any heartburn in the bastion of finance capital because it would involve the steady, predictable investment of resources over time.

Data mining and even wiretapping would go down easily in the finance community if such measures were likely to be effective in the real war on our nation. But spending billions in a theater that has demonstrably worsened the problem, creating the very haven for terrorists it was supposed to prevent: This no longer has buy-in."

Basically, Wall Street knows Bush is an incompetent and dangerous president who isn't really all that interested in--or capable of--protecting us from a future terrorist attack. His imperial dreams of conquest in the Middle East have increased risk and uncertainty to levels the world of investment management finds unacceptable.

You can check out his article here.

Reconsidering trade with Cuba (to get their oil)

The Hill has an eye-opening report on the battle lines being drawn over future trading status with Cuba, not because the country has suddenly ceased being a dictatorship without freedom of the press, but because they have oil that is looking attractive to us right now as prices remain high.

According to the paper, the National Foreign Trade Council (NFTC), its affiliated business coalition USA Engage and the newly independent Freedom to Travel Campaign are lobbying the Bush administration for a "milder report" on US-Cuban relations this year, after the previous report resulted in "stricter curbs on educational travel and Cuban-Americans’ ability to send money home."

Cuban waters contain somewhere between 4.6 billion and 9.3 billion barrels of oil, according to estimates by the U.S. Geological Survey, a figure comparable to the low end of available resources in the GOP-coveted Arctic National Wildlife Refuge (ANWR), in Alaska.

And state owned oil companies from Norway, India, Spain and China have recently signed major drilling deals to explore Cuba’s offshore waters. Not suprisingly, some in Congress are arguing that we should perhaps end the embargo so as not to get left out in the cold while geopolitical rivals like China gain access to oil in our backyard.

As far as I'm concerned, I think the embargo is a stupid idea that should have ended decades ago. Clearly it has not succeeded in weakening Castro's grip on the country, and if anything has hurt the Cuban people more than anything else. Embargoing educational exchanges with the country is particularly absurd and counterproductive. But is being able to partner with Cuba on new oil projects really the best excuse we can muster to end the economic boycott?

I mean, wasn't the boycott about using economics as a tool to crush the communist dictatorship into oblivion. At least that sort of reasoning is what presidents from John F. Kennedy to George W. Bush have used to present us as having some sort of moral high ground.

But I realize I am being hopelessly naive. Of course everyone knows the embargo is a draconian farce and we would jump at the chance of ending it, presuming Cuba was the side to lose face and there was a powerful economic incentive for us to do so. Because exporting democracy throughout the world, particularly in Latin America and the Carribean, has never been our strong suit, has it?

In the end, this is not a partisan issue, with Democrats and Republicans in Congress split in their support of continuing the embargo. And our desire for more oil may be offset by the fact that Castro is publicly supporting Iran, making it a politically inopportune time for us to suddenly patch things up with Cuba.

It will be interesting to see how this all plays out, as it pits oil interests directly against powerful politicans and the US-Cuba Democracy PAC who are also well-funded and ideologically opposed to Castro. My guess is the embargo lives on.