Hersh reports Cheney considered "false flag" attack to justify war with Iran?

If true (and you never know for sure when it comes to reportage from Sy Hersh), Dick Cheney is even more evil and crazy than I first thought.

Taliban on the march

Meanwhile, over in Afghanistan, the forgotten war isn't going so well:

Dozens of civilians were killed over the weekend in Afghanistan, the latest in the trend of spiralling violence that has engulfed the embattled nation. The civilian casualties, Taliban attacks and troop casualty numbers are putting increasing strain on the Western-led coalition, leading some to speculate that the war is unwinnable.

On Sunday, international forces killed four Afghan police officers and five civilians during a fire-fight in the western province of Farah. In a separate incident that same night, coalition-fired mortar rounds killed at least four civilians in the eastern Paktika province. On Monday, in Laghman province, also in the east, Taliban fighters fired a missile into a fuel truck, killing six civilians.

The incidents come as the U.S. is fending off criticism from the Afghan government that coalition forces use excessive and inappropriate force. Last week, a group of Afghan parliamentarians revealed that a U.S. air-strike hit a wedding party in the Nangarhar province, killing 47 civilians. Two days earlier, local officials allege, another U.S. air-strike killed 15 civilians in the Nuristan province.

The militarization of US aid to Africa

Two reports from the blogosphere on the increasing militarization of the US's foreign aid policy toward the continent of Africa. First, from the Africa policy blog Regrets Only:

Refugees International has released a new report titled U.S. Civil-Military Imbalance for Global Engagement: Lessons from the Operational Level in Africa. According to RI, it describes how what it terms “the increased militarization of U.S. foreign aid” is complicating the achievement of American foreign policy goals in Africa.

The report recommends that the US Africa Command, or AFRICOM, remain focused on security sector and peacekeeping capacity building, rather than hunting terror suspects under what it calls “a thin mantle of humanitarianism” when it becomes fully operational in October 2008.

Next, from MojoBlog:

[E]ven AFRICOM's (the US's) Africa Military Command) good intentions cannot disguise the geopolitical realities that compelled its creation. It's not about doing good works in impoverished countries for their own sake; It's about national interest. Countering China's growing military and economic influence in Africa and assuring access to some of the world's last remaining oil reserves top the list. (The United States now imports just as much oil from Africa as it does from the Middle East.) Terrorism also figures into the equation—primarily the elimination of ungoverned spaces terrorists might call home.

Not that these are unreasonable goals. On one level, the U.S. military's ability to adapt is impressive. But problems could arise if AFRICOM begins to lead policy rather than follow it. A report released yesterday by Refugees International shows that, in the years since 9/11, the Pentagon's slice of the nation's foreign aid budget has ballooned at the expense of more traditional providers, like USAID.

Is Fox News push-polling against Obama?

Nice catch by TPM Election Central's Eric Kleefeld. Check out this question from a recent FOX News poll:

Some people believe Barack Obama, despite his professed Christianity, is secretly a Muslim. Others say that is just a rumor and Obama really is a Christian as he says, and point out he's attended a Christian church for years. What do you believe -- is Obama a Muslim or a Christian?

I don't know if the fact that 10% of those polled still believe that Obama is Muslim is more pathetic or frightening. . .

WTO Watch: Why won't US negotiate on TRIPS agreement?

A typically excellent blog post from IATP's Think Forward blog reporting on the WTO's perennially unsuccessful Doha Round. A fair question is asked: Why is US Trade Representative Susan Schwab apparently wholly unwilling to negotiate on the TRIPS (i.e. "Trade Related Aspects of Intellectual Property Rights") Agreement?

Afghanistan is still not the "good war"

The New York Times reports that the security situation in Afghanistan is continuing to deteriorate, with an alarming increase in civilian casualties. In light of this, Ron Jacob's latest editorial "Afghanistan is not the good war" seems strikingly apposite.

He asks (rhetorically):
[W]hy Washington thinks it can achieve what the British and the Soviets could not? The Afghanistan region has always been the piece of the puzzle known as the Great Game that refuses to fit into the proscribed plans of any colonial power. It is as if this particular puzzle piece was cut from another die. No matter how much firepower is brought upon the Afghani people, they have been able to resist any type of lasting fit into any of the pictures hoped for by the colonial power of the day. They have done so by manipulation of the invader’s desires and by playing the various invaders off each other; and they have done so through sheer determination and the unforgiving nature of the land. Most recently, they used the US secret services to fend off the domination of their capital by the Soviets, and now they are using their own devices to fend off the domination of their country desired by Washington.

WTO prescribes "more globalization"

IPS critiques the WTO's just-released 2008 World Trade Report (which can be read in its entirely here).

The multilateral's apparent recommendation: "The shortcomings of globalisation must be amended by more globalisation."

The GOP's current policy agenda, or "Shock Doctrine" redux

Amy Goodman from Democracy Now! interviews Naomi Klein, author of The Shock Doctrine: The Rise of Disaster Capitalism, and the transcript makes for some pretty fascinating reading in my humble opinion.

One discussion I found particularly eye-opening was on the fact that oil prices are currently sitting at or near their record high prices at the very same time that the multibillion dollar energy companies such as Chevron and Texaco are recording the largest annual profits in their history. Nice, that.

What's wrong with "Short Selling" anyway?

Over at his blog Beat the Press, economist Dean Baker critiques the Bush administration's move to crack down on short selling. The question is: Whysingle out naked shorts as being incompatible the ideology of free-market fundamentalism practiced by conservatives? Instead, why not trust in the great wisdom of the free market?

[T]he economy would have benefited enormously if large numbers of traders had shorted Fannie and Freddie 4 years ago when they were buying up hundreds of billions of mortgages issued to buyers who bought homes at bubble-inflated prices. This would have stopped the bubble years ago. Similarly, we could have prevented the financial chaos at Merrill Lynch, Citigroup, Bear Stearns and the rest, if traders had recognized their financial shenanigans and aggressively shorted their stock. In the same vein, heavy shorting by informed investors could have prevented the boom and bust of the tech bubble.

The decision to intervene against short-selling is completely inconsistent with the belief in the wisdom of the markets. Of course short-sellers can be wrong and depress stock prices more than is justified by fundamentals, but so what? The government doesn't intervene when it thinks investors have exaggerated the true value of a stock. The public has no more reason to fear under-valued stock prices than over-valued stock prices. This one-sided intervention by SEC is hard to justify on any grounds. Reporters should be asking about it.

Conservatives still trying to smear Obama as an anti-Zionist

Rick Richman's latest Op-Ed - Obama's Redivided Jerusalem - provides us with yet another not-so-subtle example of conservatives fevered campaign to paint presumptive Democratic presidential nominee as an enemy of Israel (and as the argument usually goes, therefore an enemy of the Jewish people).

In this iteration of the Right's propaganda offensive, Obama's offense has to do with the precise (or, rather inprecise) language being used by the Obama campaign's discussion of the Jewish state's undivided capital "Jerusalem." At least Richman isn't trying to trick his readers into believing Obama is a Muslim who received training at a terrorist school.

The geopolitics of water

An article in the Canadian newspaper Niagara This Week discusses how the satirical premise of the cult-classic, 1984 sci-fi B-movie The Ice Pirates (which I thought was hilarious as an nine-year-old viewer) - that in the future, water would become a critical yet increasingly scarce resource (or commodity) over which mankind would do battle for control over - is increasingly becoming reality.

Oil may presently be considered to be a non-renewable resource needed to continue to grease the economies of the industrialized world, but water is a whole lot more important.

New study finds global income disparities caused by "Place Premium"

The Washington-based economics think tank Center for Global Development (for some background on the non-profit, see here) published a working paper last week entitled "The Place Premium: Wage Differences for Identical Workers across the US Border." It weighs in at around 40+ pages and was written by staff economists Michael Clemens, Claudio Montenegro and Lant Pritchett.

The paper explores several theoretical questions revolving around income inequality, population and migration and development. For example, from the online description of the publication, the authors ask whether employee wages are determined by what knowledge or information he or she possesses, or rather where he or she resides. Specifically, "[t]his paper compares the wages of workers inside the United States to the wages of workers outside the United States. Comparing wages alone isn’t enough, because workers in (say) Bolivia could differ from workers in the US in many ways—some of them easily observed, such as their level of education, and others less easily observed."

The authors go on:

"A rich new dataset on over two million workers around the world allows the analysis to control for several observable factors besides location that might affect wages, notably including country of birth and country of education. But just because a Bolivian in the U.S. is identical to a Bolivian in Bolivia by these observable measures, these two workers may not be identical in all ways: one of them was willing to move and incur the various costs of doing so, and one of them might differ from the other in unseen ways, such as risk-tolerance or entrepreneurial spirit. The paper uses five independent methods to estimate how such differences might bias its estimates.

Following all of these adjustments the paper estimates that the wages of a Bolivian worker willing to work in the United States are about 2.7 times as much as the same person would make in Bolivia. This figure for Bolivia is typical among the 42 developing countries analyzed, but for some it is much higher. For a Nigerian worker the same ratio is 8.4. In other words, a Nigerian moderately-educated adult male urban formal-sector wage worker who moves to the U.S. increases his wages by several hundred percent."

Accordingly:

"The implications of these enormous differences are profound. For many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination, typically much larger than wage discrimination based on ethnic group or gender within spatially integrated labor markets. These gaps represent one of the largest remaining price distortions in any global market and these gaps imply that simply allowing labor mobility can reduce a given household’s poverty to a much greater degree than most known antipoverty interventions inside developing countries."

Or, liberalizing the labor part of "free" trade will reduce poverty more successfully than "antipoverty interventions." Being that I am quite skeptical of the track record of so-called "free trade" arrangements in achieving their stated economic objectives, I was quite interested in seeing how the application of this theory played out at the macro-level in terms of employment and wages.

For more, here is the introduction to the paper:

Three questions have each launched a thousand papers. First, how large are the gaps in compensation caused by various types of labor market discrimination? Second, how large are the relative price differentials in global markets caused by international borders? Third, how can public policies raise the incomes of poor households?

We bring these literatures together with an estimation of the differences between the wages of workers in 42 low- and middle-income countries and the wages those same people would earn in the United States. This calculation at once documents an enormous form of wage discrimination, measures a massive cross-border price wedge, and suggests a policy that could dramatically raise the earnings of many low-income families.

The first section of the paper creates baseline estimates of wage gaps controlling for individual observable traits. It does so with a unique harmonized database on the purchasing power price-adjusted wages and other traits of over two million workers in 43 countries, including the United States. This allows us to predict wages of observably identical workers on either side of the US border for each of these countries. Crucially, the US data identify the individuals’ country of birth and, for the foreign-born, year of arrival in the US. This allows our definition of “observably identical” to go beyond standard covariates such as years of schooling, age, sex, and rural/urban residence. We can also compare workers of the same country of birth—implicitly controlling for culture, language, and social networks—and same country of schooling—which adjusts for the quality and relevance of schooling.

The wage gaps that emerge from these initial estimates are large. For instance, in our preferred econometric specification,1 a Bolivian-born, Bolivian-educated, 35 year-old urban male formal sector wage worker with 9-12 years of schooling earns an average of US$1,831 per month working in the United States but US$460 (at purchasing power parity) working in Bolivia. Hence the earnings ratio between these observably identical people is 3.98. We produce estimates of the wage ratios of observably identical workers for each of 42 countries—we call these ratios Ro, where the subscript signifies “observably identical”.2 Bolivia’s ratio Ro of 3.98 is near the median, while the lowest such ratios we observe are from the Dominican Republic, at 1.37–1.43 (depending on the regression functional form) and the highest are for Nigeria, at 11.3–13.6.

But wage gaps for observably equivalent workers do not necessarily reflect wage discrimination. The second part of the paper grapples with the fact that, no matter how many individual traits are controlled for, wage differentials for observably equivalent workers do not necessarily constitute evidence of wage differentials across workers of equal intrinsic productivity, as foreign-born workers in the US can obviously differ in unobservable ways from their observably identical counterparts back home. This issue is common to all attempts to measure discrimination. In other words, wage ratios for observably-equivalent workers—Ro—are not the same as wage ratios for workers of equal intrinsic productivity who would be willing to move from one country to another; we call this latter ratio Re.

One factor that leads to wage gaps between foreign-born workers in the US and observably identical workers abroad is selection on unobservable determinants of productivity—selection both by the migrants themselves and by migration policy. The effect of selection on the wage gaps we measure is complex and we explore it below with a new theoretical model. The true wage gain to a typical migrant depends on two separate but related aspects of selection: where migrants come from within the source-country distribution of unobservable productivity determinants (selection), and where they end up
within the destination-country distribution of unobservable productivity determinants (sorting). The higher is migrants’ typical position in the origin-country distribution of unobserved productivity determinants—all else equal—the lower is the wage gain. But the higher is migrants’ typical position in the destination-country distribution of unobserved productivity determinants—all else equal—the higher is the gain.

The model shows that positive selection on unobservable traits from the origin country is neither necessary nor sufficient for overestimation of the wage gain to migration. If migrants come from the upper part of the distribution of unobserved productivity determinants in the origin and were randomly sorted into the wage distribution in the destination country, then comparing “average” workers would indeed overstate the wage gain. But if selected migrants sort into the upper end of the distribution in the destination country, the comparison of wages for average workers with given observed traits can accurately reflect or even understate the gain. That is, if the people who are uncommonly intelligent, energetic or ambitious in the source country selectively migrate and are people who are uncommonly intelligent, energetic and ambitious in the destination country, their wage gain could be the same as—or even larger than—the wage gain to less intelligent and energetic people.

Furthermore, among those positively selected on unobservables from the origin, those bound for upper end of the distribution in the destination are more likely to be seen in the data than those bound for the middle or the bottom—the former have more to gain from migration than the latter and are thus more likely to move. We match a theory of selection (from the source country) and sorting (in the destination country) with data to estimate the bias attributable to selection on
unobservables.

Another, separate factor that can cause the wages of observably identical workers to differ across countries in the absence of discrimination is what we call “natural” barriers. Workers might require a compensating differential to bear the costs—broadly
considered—of moving to a new land. These include the difficulty of learning a new language, being away from one’s family, and entering new social networks, as well as the direct cost of travel. Workers might also be credit-constrained and have difficulty financing the move.

Only a completely exogenous movement of workers across borders would allow estimation of wage gains without selection and without “natural” forces determining who is willing and able to move. We do not present (or desire!) such an experiment. Instead, we triangulate using five distinct methods to place estimated bounds on selection and natural barriers—drawing on theory and various empirical literatures. These independent calculations yield the remarkably consistent result that selection of migrants on unobservable wage determinants results in an observed US-to-foreign wage ratio for observably equivalent workers (Ro) of around 1.25 times the true ratio for equal-productivity workers on average across countries, and that the combined effect of selection and natural barriers produces observed ratios about 1.5 times the true ratio for equal-productivity workers willing and able to move (Re).

Even after this correction, wage gaps across borders remain extremely large. Given our median observed ratio Ro of about 3.9, the median ratio purged of selection on unobservable wage determinants and the effects of “natural” barriers—wage ratios of
equally productive workers willing to move (Re)—is roughly 2.6 (=3.9/1.5). Even this conservative estimate of Re is above 3 for many countries—including India, Vietnam, Indonesia, Ghana, Yemen, Egypt, Haiti, and Nigeria. In other words, a worker from one of these countries can expect at the margin his or her wages to triple or more, solely due to stepping across the US border.

This wage gap is a “marginal” effect in two distinct senses: It is the effect on the wage of the next person who would arrive after a small relaxation of the migration barrier—not the effect on the typical person in the sending country—and it is the marginal effect given a small change in current levels of migration—not the general equilibrium wage under fully open borders.

The final section relates our results to the three separate literatures on wage discrimination, border-induced price wedges, and the marginal impacts of antipoverty policies. Researchers measuring each of these would do well to pay much more attention
to restrictions on migration; the wage gaps we measure constitute one of the largest known forms of all three. Empirical estimates in these other literatures are comparable to ours because they, too, are measured at the margin.

The global economy's missing safety net

From last week's Washington Post, "Globalization Requires Safety Net, UN Says," reports on the publication of the United Nation's 2008 World Economic and Social Survey (WESS) (full report here, overview here.)

The WaPo's assessment of the WESS's findings seems to be pretty much on point:

Greater government intervention is needed to moderate the severe economic swings and inequalities that seem to be an unavoidable byproduct of globalization, according to a United Nations report released yesterday.

Pointing to food riots in dozens of poor countries whipsawed by soaring prices for wheat and other staples, and to the rising income inequality that has become a too-common feature of economies in the developed world, the report says that no one is immune from the sometimes cruel consequences of global economic forces. But governments should do more, both individually and collectively, to protect people from their harshest impacts, it says.

The U.N.'s 2008 World Economic and Social Survey calls for greater regulation of international capital flows, more generous foreign aid and perhaps the guarantee of a minimum income to the world's poorest residents. Domestically, countries should do more to cushion their citizens against economic changes that have left them less secure. In poor countries, the insecurity can take the form of hunger and food shortages; in developed nations it often means stagnating wages and growing income inequality.

"Markets cannot be left to their own devices in respect of delivering appropriate and desired levels of economic security," the report says.

Global competition, which erodes the security of businesses, unstable capital flows, which crimp investment and growth, and food shortages are sometimes viewed as beyond the ability of governments to control. But the report says that is the wrong response. What is needed, it says, is "more active policy responses to help communities better manage these new risks."

The U.N.'s assessment was echoed in a separate report published yesterday by the International Monetary Fund.

The IMF study warned that the recent sharp increases in food and fuel prices have had serious global impacts, and that import-dependent poor and middle-income countries were the most adversely affected. The report also said that food and fuel prices were likely to remain high and ease only gradually, raising inflation, and worsening poverty in these countries.

"Some countries are at a tipping point," IMF Managing Director Dominique Strauss-Kahn said at a news conference announcing the release of the study. "If food prices rise further and oil prices stay the same, some governments will no longer be able to feed their people and at the same time maintain stability in their economies."

A number of factors have contributed to the price spikes. In recent years, sustained global growth, especially in emerging and developing economies, has brought about greater demand for many commodities, including oil, metals and food. "At the same time, supply has been slow to respond to the demand impetus, notwithstanding rising prices," the IMF report said. "The food price surge is expected to take longer than usual to unwind."

"We expect continued upward pressure from demand," said Thomas Helbling, an IMF adviser. "We see no reason to not see these trends continue."

The IMF called for a multilateral approach to address the situation, involving broad cooperation among the countries affected, donors and international organizations.

C. Fred Bergsten, director of the Peterson Institute for International Economics, agreed with recommendations for a more activist role by governments in easing the pain caused by globalization. He said more attention should be paid to regulating capital flows and bolstering international aid. Domestically, he said, the focus should be on helping individuals hurt by the process.

While global trade has been a plus to the U.S. economy, Bergsten said, "the dislocating effects on American workers, impact on job insecurity, wage stagnation, worsening income distribution, require a substantial showing up of domestic safety net programs."

Without attention to that, support for globalization, which tends to grow shaky as economies cool, would be further undermined. "Where the country as a whole benefits substantially from globalization, there are certainly individuals who are losers from the process and then they therefore oppose it," he added.

The U.N. report calls for a range of interventions to provide support, including greater public investment in agriculture for poor countries and "a better balance of economic and social policies." It also said that even during economic booms governments should remain mindful of the downturns that can strike quickly, and set aside money to deal with them.

Analysis: Legitimizing Permanent Occupation of Iraq

Blogger Stephen Lendman puts forward a pretty solid argument that the Bush administration is currently negotiating with the al-Maliki administration of Iraq, and laying the groundwork for not only ensuring that Washington's military occupation of Iraq is permanent, but that the US can justify it by claiming it is a "security" arrangement made at the behest of Iraq's new government.

Here are just a few high-profile examples of how Bush is disregarding the Constitution in his efforts to occupy Iraq on an open-ended timeframe:

• Exempting civilian contractors from prosecution under Iraqi laws; it assures their immunity elsewhere as well; current federal law "only subjects contractors working in support of the Defense Department to prosecution in American courts for felonies in Iraq;" civilian security forces (like Blackwater Worldwide), the State Department, CIA and others will be in a "no-law" status, subject only to the will of the president; civilians may thus commit murders, rapes, robberies, other lawless acts and get away with them; "no (known) existing status of forces agreement....contains anything like this wide-ranging exemption;"

• Exempting military personnel as well who can be court-martialed but rarely are;

• Allowing the president to exceed his constitutional authority as commander-in-chief; he’s only in charge of the military, "not all Americans working overseas;"

• Even worse, most administration plans are secret and what’s learned comes out in leaks; more on that below; and

• Congress held hearings on January 23 and February 8 - "on the legitimate scope of the Iraqi agreement;" the administration refused to testify.

Lendman also provides a fairly comprehensive description of the US-Iraqi "Status of Forces Agreements" relying on both official documents and media reports:

"[A]n agreement that defines the legal position of a ’visiting’ military force deployed in the territory of a friendly state." It delineates "the status of visiting military forces (and) may be bilateral or multilateral. Provisions pertaining to the status of visiting forces may be set forth in a separate agreement, or they may form a part of a more comprehensive agreement. These provisions describe how the authorities of a visiting force may control members of that force and the amenability of the force or its member to the local law or to the authority of local officials. To the extent that agreements delineate matters affecting the relations between a military force and civilian authorities and population, they may be considered as civil affairs agreements."

In his 2004 book, The Sorrows of Empire, Chalmers Johnson said this about SOFAs:

"America’s foreign military enclaves, though structurally, legally, and conceptually different from colonies, are themselves something like microcolonies in that they are completely beyond the jurisdiction of the occupied nation. The US virtually always negotiates a ’status of forces agreement’ (SOFA) with the ostensibly independent ’host’ nation" - a modern day version of 19th century China’s "extraterritoriality" granting foreigners charged with crimes the "right" to be tried by his (or her) own government under his (or her) own national law.

SOFA experts Rachel Cornwell and Andrew Wells added:

"Most SOFAs are written so that national courts cannot exercise legal jurisdiction over US military personnel who commit crimes against local people, except in special cases where US military authorities agree to transfer jurisdiction." As a result, when crimes occur, the military can simply whisk offenders out of the country before local authorities can react or at least before they’re arrested."

Be sure to read the whole article: Lendman has included a lot of disturbing evidence pointing to Bush's planning to justify the unjustifyable and illegal - the permanent occupation of a foreign nation.

Exploding the free trade myth

David Sirota's article for the July issue of In These Times isn't one of his trademark rants on the latest outrageous behavior committed by the Washington DC and Wall Street Establishments; instead it is a casual yet illuminating interview with the controversial, heterodox English development economist Ha-Joon Chang, discussing his latest book "Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism." The book, and the interview discussing it, does a yeoman's job of dissecting the mythology behind so-called international "free" trade as compared with the more restrictive, protectivist trade regimes that have succeeded in helping transform developing countries into wealthy, developed economies (take, for example, the US) via the implementation of tariffs.

The received wisdom imparted by the "Wise Men" of economics, that is, those pundits, academics, policy-makers and journalists who seek to remind average, everyday folks like you and me every time they open up their mouths that they are the type of "Serious People" who deserve our fealty and unquestioned trust and support, is that free trade somehow benefits all parties in the global marketplace for goods and services. In other words, forget the idea that the very rules established by the global elites for the global elites by design create 'winners' and 'losers'. The winners are those who the rules of capitalism already favor: indeed, it is the existence of a not so subtle institutional bias that creates the dangerous downward spiral of capitalism is the first place.

Sirota's interview with Chang is truly illuminating and I highly recommend reading both the entire article in In These Times - as well as the meticulously researched and brilliantly argued book by Chang (which I recently completed). One of the most important quotes from Chang I think is:

In the present atmosphere, once you say anything positive about protectionism, people dismiss you as a supporter of North Korea or Cuba.

The reality is that few countries practice pure free trade or pure protectionism. Most countries practice free trade in some areas and protectionism in others, with varying mixes across countries. This is basically because policy-makers instinctively understand that different sectors have different needs — sectors that are just emerging or in decline need more protection and subsidies in the same way that children and the elderly need more support than able-bodied adults do.

And one of Sirota's keenest, most important observations is:

Chang shows how the entire debate over trade has divorced itself from history and economic reality. Phrases like “free trade,” in fact, are misnomers unto themselves, leading the world into a globalization debate whose basic premises are inaccurate.

But that’s not all that is inaccurate. Chang says that while the media and political elite lead us to believe industrialized countries achieved their wealth by eliminating tariffs, history suggests it’s exactly the opposite: The strategic use of tariffs is precisely what built the industrialized world into an economic powerhouse. Bad Samaritans shows that wealthy countries’ demands on poor countries to reduce tariffs is a way to keep the developing world in a subservient role — or a means to “kick away the ladder,” as he puts it.

Also, be sure to check out this independent review of "Bad Samaritans" by Jim Miles here, as well as this article, The Globalization of Poverty, by Antonio Juhasz appearing in Tikkun.

Why economic inequality in America matters

Long-time readers of this blog know that few issues are more important to me that economic justice, specifically the widening chasm of economic inequality in both the developed and developing worlds. In the US, the problem is really quite pronounced, despite the fact that the major media has failed to give it the in-depth and frequent coverage the phenomenon really deserves. But every six months or so, an article appears in the mainstream media which addresses the severity of the rapidly growing gulf between the super-rich and everyone else, while supplying the background information required for lay readers to understand both the scope and significance involved. The most recent example of this is this month's cover story of Harvard Magazine (h/t to Cursor).

As the article—entitled "Unequal America" and written by the publication's associate editor Elizabeth Gudrais explains: "The recent increase in inequality reflects a migration of money upward as salaries have ballooned at the top. In 1965, the average salary for a CEO of a major U.S. company was 25 times the salary of the average worker. Today, the average CEO’s pay is more than 250 times the average worker’s. At the same time, the government is doing less to redistribute income than it has at times in the past. The current top marginal tax rate—35 percent—is not the lowest it’s been—there was no federal income tax at all until 1913—but it is far lower than the 91-percent tax levied on top earners from 1951 to 1963. Meanwhile, forces such as immigration and trade policy have put pressure on wages at the bottom."

She goes on:

Tax policies and employer-pay practices affect income distribution directly. But what governs these pay practices, and why have American voters and politicians chosen the tax policies they have? One answer lies in Americans’ unique attitudes toward inequality. Asked by the International Social Survey Programme whether they agreed or disagreed with the statement that income differences in their home country are “too large,” 62 percent of Americans agreed; the median response for all 43 countries surveyed—some with a much lower degree of inequality—was 85 percent.

Americans and Europeans also tend to disagree about the causes of poverty. In a different survey—the World Values Survey, including 40 countries—American respondents were much more likely than European respondents (71 percent versus 40 percent) to agree with the statement that the poor could escape poverty if they worked hard enough. Conversely, 54 percent of European respondents, but only 30 percent of American respondents, agreed with the statement that luck determines income.

It makes intuitive sense that those who view poverty as a personal failing don’t feel compelled to redistribute money from the rich to the poor. Indeed, Ropes professor of political economy Alberto Alesina and Glimp professor of economics Edward L. Glaeser find a strong link between beliefs and tax policy: they find that a 10-percent increase in the share of the population that believes luck determines income is associated with a 3.5-percent increase in the share of GDP a given nation’s government spends on redistribution (see “Down and Out in Paris and Boston,” January-February 2005, page 14).

These attitudes, in turn, are rooted in US history, says Christopher Jencks, whose 1973 book Inequality examined social mobility in the United States. Jencks has been studying inequality and social class since the 1960s, and has written dozens of journal articles, essays, and book chapters, as well as four more books, on the subject. He looks back to the Constitution’s framers, who enshrined property rights as sacred and checked the government’s ability to control the national economy. “The founding fathers didn’t want the government to do that much,” he says.

The Constitution is structured in such a way that it is harder to change than the constitutions of Europe’s welfare states, where left-leaning groups have succeeded at writing in change. By and large, Alesina and Glaeser write, the U.S. Constitution “is still the same document approved by a minority of wealthy white men in 1776.” And the “vestiges of feudalism” in European society make leftist arguments appealing there, whereas American politicians’ rhetoric has emphasized individual agency since the time of George Washington (who wrote in 1783 that if citizens “should not be completely free and happy, the fault will be entirely their own”). The authors cite a 1980s history curriculum for public schools in California (“hardly the most right-wing of states,” they note) that instructed, “A course should assess the role of optimism and opportunity in a land of work: the belief that energy, initiative, and inventiveness will continue to provide a promising future.”

An alternative, and possibly complementary, explanation points to the United States’s particular place in geography and history. Jencks also finds this persuasive. “The highest levels of inequality are found in the New World and not the Old, for reasons we don’t understand,” he says. Societies with higher inequality also tend to have higher crime rates, although it’s not clear which way the causal arrow runs, or if it exists. “These are societies built on conquest, many of them on slavery,” Jencks adds. “A lot of the inequality may just be the legacy of those things.”

The prospect of upward mobility forms the very bedrock of the American dream, but analyses indicate that intergenerational mobility is no higher in the United States than in other developed democracies. In fact, a recent Brookings Institution report (a .pdf of the complete report can be read here) cites findings that intergenerational mobility is actually significantly higher in Norway, Finland, and Denmark—low-inequality countries where birth should be destiny if inequality, as some argue, fuels mobility.

In the United States, the correlation between parents’ income and children’s income is higher than chance: 42 percent of children born to parents in the bottom income quintile were still in the bottom quintile as adults, and 39 percent of children born to parents in the top quintile remained in the top quintile as adults, according to the Brookings analysis. But it is difficult to see whether mobility is increasing or decreasing, because it would require comparing specific individuals’ incomes to their parents’ incomes, against the wider backdrop of income distribution across society at that time. Because data with that level of detail do not exist for earlier periods, scholars can’t say with certainty whether the results represent an increase or a decrease in mobility from other periods in American history.

Americans’ steadfast belief in mobility probably stems from increases in absolute, rather than relative, mobility.

Reading the complete seven-page article will require an investment of a little bit of time, but this is one of the best pieces examining both the causes and the consequences of the wide and growing gap between the rich and poor in the US I have read in quite some time. There is quite a bit of useful data contained here from numerous studies and surveys, but I actually think the most useful aspect of this article is the broader context it provides. It does a great job of framing the problem in such a way that even people who are generally unconcerned with matters of economic injustice or progressive politics can understand why this issue is relevant to them—and society at large. The argument underlying this article is very well supported, and I think quite difficult to discount regardless of one's ideological perspective.

Also, be sure to check out the article "Our Unequal Democracy" penned back in May 2004 by Christopher Jencks from Harvard's Kennedy School, who was interviewed for this article. It deals with the slightly different issue of political inequality, which is closely wrapped up with economic inequality.

The geopolitics of oil and Iraq, back in the NYT

Nick Turse draws our attention to a new article in the New York Times on oil politics. He notes that the Grey Lady's latest reporting on Iraq's energy laws shows how the mainstream media are behind the curve in revealing the role of oil in the Iraq war and provides more background on the role the precious commodity that Iraq "floats on" (to quote Paul Wolfowitz) played in leading to the 2003 invasion of Iraq.

US ban on gay military personnel further discredited by new study

AP reports that according to a new study sponsored by the UC-Santa Barbara based Michael C. Palm Center, "Evidence shows that allowing gays and lesbians to serve openly [in the US armed forces"] is unlikely to pose any significant risk to morale, good order, discipline or cohesion." In other words, the idiotic Clinton administration-era policy of "Don't ask, don't tell" is pointless and should be repealed by Congress.

The study was run by a panel of four retired military officers, including the Air Force lieutenant general who was behind former President Clinton's 1993 decision that the military be required to stop questioning recruits on their sexual orientation, while simultaneously discharging anyone who was "outed" as being either gay or bisexual -- for example, by telling others about their sexual orientation, getting caught engaging in homosexual activity or marrying someone of the same sex.

From a purely logical standpoint (forgetting any moral judgements a conservative might make about people living a so-called "gay lifestyle" and engaging in gay sexual behavior), the Don't Ask, Don't Tell law never made any sense. It assumes (without any supporting evidence) that the existence of gays serving alongside heterosexuals in the military is disruptive to units and bad for morale, as well as weakening trust between those working in close quarters. Obviously, anything that would negatively affect morale and break down trust in this context would present an unacceptable risk, but it doesn't follow either theoretically or from any evidence that the presence of outed gay soldiers would lead to this at all.

For example, according to the article supporters of the 1993 ban, including one retired Army Lieutenant Colonel interviewed, support their stance with the argument that there is no empirical evidence that allowing gays to serve openly won't hurt combat effectiveness. According to this vet:

"The issue is trust and confidence among members of a unit. When some people with a different sexual orientation are in a close combat environment, it results in a lack of trust."

But why should such a policy be put in place on the grounds that there is no existing empirical evidence supporting the counter-factual claim? If anything, a policy that requires gay US army personnel to lie and deceive their colleagues on a daily basis about who they are should require the existence of strong evidence supporting the policy, as opposed to simply arguing that there is no evidence that contradicts its effectiveness. In a way, this is analogous to the legal presumption of a defendant's innocence in a US criminal trial - a standard that makes sense from both a ideological and practical matter. (I know that in other Western democracies such as the UK, a defendant is legally presumed to be guilty, a principle that has always seemed wrong-headed to me).)

The inanity of this policy is something that has bothered me ever since it was instituted 15 years ago, but is now especially ridiculous as the Pentagon is busy carrying out its so-called "Global War on Terror." For example, a bright guy I was friendly with as an undergrad at Emory named Alastair Gamble was booted out of the Army's Defense Language Institute back in 2002 after he was caught in a surprise inspection in the middle of the night with his boyfriend (See this Op-Ed he wrote for the New York Times back in 2002 and this article from the Washington Post back in 2004 for more background.)

This happened, despite the fact that Alastair and many other gay male and female service members have rare, incredibly valuable skills the armed forces rely upon to prevent terrorist attacks on our soil.

It's high time for the ban to be lifted and the policy to be consigned to the dustbin of history. If anyone reading this supports this policy, I'd be happy to publish your thoughts (as long as they are not bigoted or otherwise offensive) and/or debate the issues involved with you.

US employment rate dropped last month

Did you know that the US economy shed 62,000 jobs last month?

Yet somehow, McCain has spent the last nine months arguing that the economy is doing fine and nothing for the American people to get too concerned over.

We'll just have to see what voters decide in November.

Torture is good . . . at getting false confessions

Hat tip to blogger Eric Martin at Obsidian Wings for pointing us to a front page article in the New York Times this week which reported that the interrogation techniques used by military trainers at Guantanamo Bay were derived from research from the Communist Chinese circa 1957 . . . "Used during the Korean War to obtain confessions, many of them false, from American prisoners."

So many things wrong with this picture, it's actually hard to know where to start.

Plus: Hitchens finally gets the fact that yes, the US has indeed been torturing Gitmo prisoners . . . but only after he experiences a rough simulation of waterboarding himself.

How to run an empire?

Via Matthew Yglesias, the New York Times reported a few days ago that:

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say.

The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism. In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said. It is unclear how much influence their work had on the ministry’s decisions.

Curb your optimism for the next four years

Note to self: Even if Barack Obama wins in November, the disturbing and unconstitutional core assumptions that have informed George W. Bush's foreign policy for the last eight years will not experience a radical change.

Very depressing, indeed.

All you need to know about Neocons . . .

Courtesy of Interpress Service (IPS) reporter and blogger Jim Lobe:

A very good summary of how hard-line neo-conservatives see the world — and especially Israel’s place in it — can be found in an interview at the National Review Online’s (NRO’s) website by Kathryn Jean Lopez of Caroline Glick, the deputy managing editor of The Jerusalem Post who also serves as the Senior Fellow for Middle Eastern Affairs at Frank Gaffney’s Center for Security Policy (CSP).

What comes through the interview is how hard-liners like Glick see the relationship between the US and Israel (”the war against Israel and the war against the U.S. are one and the same”); the Manichean nature of the world (”freedom” versus “the forces of slavery and jihad,” “good” versus “evil”); how they conflate different threats (”al Qaeda and Iran” as a single “enemy” whose “ultimate aim …is global domination and the destruction of the US”); their contempt for Europe (its “refusal to accept the true lessons of the Holocaust”); their Islamophobia (”genocidal anti-Semitism …has taken over the Islamic world”); and their need for an “enemy” to give order to their world (Obama “refuses to acknowledge that there is such a thing as an ‘enemy’ in international affairs. And as a consequence, he is unable to understand what an ally is.”) Glick is also furious with Condoleezza Rice and the State Department for their presumed influence over Bush and efforts to force Israel to make concessions to the Palestinians.

It's actually a little bit surprising that the Neoconservative loudmouths haven't made more of a concerted effort to dismantle the State Department: Colin Powell and Condoleeza Rice have apparently been a perpetual thorn in their side with all of their calls for something referred to by previous administrations as "diplomacy."