November 30, 2010

More Indonesian volcanoes getting restless

"Our Amazing Planet"
2010-11-29 15:31:00

As if things weren't already bad enough in Indonesia, another volcano may be about to blow.

Indonesia straddles the Pacific Ring of Fire - and lately, this nation of islands has been living up to the region's fiery reputation. A number of so-called minor ash explosions from Mount Bromo on Sunday (Nov. 28) caused a nearby airport to close as scientists upgraded the volcano to its highest alert level, according to the Indian newspaper The Hindu. On the same island, Java, Mount Merapi's recent eruptions killed hundreds and prompted mass evacuations.

The eruption watch also continues in the straight just west of Java where Anak Krakatau has also been increasingly active lately.

Still want to visit Indonesia? Try virtual tourism.

The heightened eruption alerts come just a couple weeks after Mount Merapi's relentless erupting killed more than 300 people.

Mount Merapi's devastation has been estimated at $611 million and pyroclastic flows have destroyed huge swaths of forest (and one unfortunately placed golf course), according to the People's Daily Online."

WikiLeaks: U.S.-Iran Relations "Now What" Moment?

Too bad it's not illegal to use a network used by millions of users when it could DEFINITELY lead to leaks since so many people who use it are disgusted by US and Israeli war policies that do not reflect their citizens' consensus.

Too bad it's not illegal to have a Secretary of State who cannot get across to her "servants" that if material is written in cables might have a negative impact. She should ensure that they watch "their mouths."

Too bad it's not illegal for the US Secretary of State to turn staff into spies on virtually everyone.

Sometimes I think Hilliary works for MOSSAD. Bottom line for me.
Read the Article at HuffingtonPost

Briefing: Ann Wright on the WikiLeaks Diplomatic Bombshell | The Nation

The very best comments so far ..

Open Secret MoUNtINg EvIdENcE of EURopE’s coMplIcIty IN RENdItIoN aNd sEcREt dEtENtIoN

Important release, imHUMBLEopinion.

Give it a gander ...

It will refresh your memories.

@wikileaks - THE ENVOY - Warren Zevon

written by Warren Zevon 
1980 Zevon Music BMI

Nuclear arms in the Middle East 
Israel is attacking the Iraqis 
The Syrians are mad at the Lebanese 
And Baghdad does whatever she please
Looks like another threat to world peace 
For the envoy

Things got hot in El Salvador 
CIA got caught and couldn't do no more 
He's got diplomatic immunity 
He's got a lethal weapon that nobody sees 
Looks like another threat to world peace 
For the envoy 
Send the envoy 
Send the envoy

Whenever there's a crisis
The President sends his envoy in
Guns in Damascus 
Woa, Jerusalem

Nuclear arms in the Middle East 
Israel is attacking the Iraqis 
The Syrians are mad at the Lebanese 
And Baghdad do whatever she please 
Looks like another threat to world peace
For the envoy 
Send the envoy . . . 
Send for me 

November 29, 2010

CodePink Submits Arrest Complaint for Bush at facebook hq

Canadian intelligence head criticized role of courts in anti-terrorism cases

Canadian Security Intelligence Service (CSIS) Director Judd discussed domestic and foreign terror threats with Counselor of the State Department Cohen in Ottawa on 2 July 2008. In particular, he wasn’t very happy about the Canadian courts. Cable08OTTAWA918 from Wikileaks’ Cablegate offers some insights:
Director Judd ascribed an “Alice in Wonderland” worldview to Canadians and their courts, whose judges have tied CSIS “in knots,” making it ever more difficult to detect and prevent terror attacks in Canada and abroad. (…) He noted, however, that Hezbollah members, and their lawyers, were considering new avenues of litigation resulting from recent court rulings that, Judd complained, had inappropriately treated intelligence agencies like law enforcement bodies (refs A and C).  The Director observed that CSIS was “sinking deeper and deeper into judicial processes,” making Legal Affairs the fastest growing division of his organization.  Indeed, he added, legal challenges were becoming a “distraction” that could have a major “chill effect” on intelligence officials.
Judd derided recent judgments in Canada’s courts that threaten to undermine foreign government intelligence that threaten to undermine foreign government intelligence- and information-sharing with Canada.  These judgments posit that Canadian authorities cannot use information that “may have been” derived from torture, and that any Canadian public official who conveys such information may be subject to criminal prosecution.  This, he commented, put the government in a reverse-onus situation whereby it would have to “prove” the innocence of partner nations in the face of assumed wrongdoing.
Judd was predicting then that Canada would soon introduce ‘special advocates’ in its courts.
In another interesting insight Judd added that CSIS recently talked to Iran’s Ministry of Intelligence and Security (MOIS) after that agency requested its own channel of communication to Canada, he said.  The Iranians agreed to “help” on Afghan issues, including sharing information regarding potential attacks. However, “we have not figured out what they are up to,” Judd confided, since it is clear that the “Iranians want ISAF to bleed…slowly.”
Edit: The last time I heard a reference to Alice in Wonderland or its author, Lewis Caroll, in a counter-terrorism context was two years ago in the Parhat judgment of Judge Garland. Parhat was one of the Uighur detainees at Guantanamo Bay who was transferred to Bermuda in June 2009. The ruling criticized the US government’s argument that evidence must be reliable because it appears in several documents, stating that “This comes perilously close to suggesting that whatever the government says must be treated as true.” It compared this argument to the Bellman’s dictum in Lewis Carroll’s The Hunting of the Snark: “Lewis Carroll notwithstanding, the fact that the government has ‘said it thrice’ does not make an allegation true.”

How Scientific Is Modern Medicine Really? -- Health & Wellness --

Doctors today commonly assert that they practice "scientific medicine," and patients think that the medical treatments they receive are "scientifically proven." However, this ideal is a dream, not reality, and a clever and profitable marketing ruse, not fact.

The British Medical Journal's "Clinical Evidence" analyzed common medical treatments to evaluate which are supported by sufficient reliable evidence (BMJ, 2007). They reviewed approximately 2,500 treatments and found:
13 percent were found to be beneficial

23 percent were likely to be beneficial

Eight percent were as likely to be harmful as beneficial

Six percent were unlikely to be beneficial

Four percent were likely to be harmful or ineffective.

46 percent were unknown whether they were efficacious or harmful
In the late 1970s, the US government conducted a similar evaluation and found a strikingly similar result. They found that only 10 percent to 20 percent of medical treatment had evidence of efficacy (Office of Technology Assessment, 1978).

Doctors like to point to the "impressive" efficacy of their treatments in real serious diseases, like cancer, and doctors (and drug companies) are emphatic about asserting that anyone or any company that says (or even suggests) that they have a treatment that might help people with cancer are "quacks." However, do they maintain this same standard when evaluating their own treatments? Even a recent issue of Newsweek highlighted the fact that "We Fought Cancer, and Cancer Won" (Begley, 2010). Despite the truly massive amounts of money that doctors, hospitals and drug companies are effectively extracting from patients, employers, insurance companies and governments, we are certainly not getting our money's worth.

Even when there is "proven efficacy of treatment" in studies, the bigger question is how common is this proven efficacy utilized in medical care today? Be prepared to be shocked.

"Quackery" is commonly defined as the use of unproven treatments by individuals or companies who claim fantastic results and who charge large sums of money. Although modern physicians may point their collective finger at various "alternative" or "natural" treatment modalities as examples of quackery, it is conventional medical treatments today that are out-of-this-world expensive, and despite real questionable efficacy of their treatments, doctors give patients the guise of "science."

I certainly realize that many of us have benefited greatly from modern medicine, but I also realize that many of us have been hurt greatly from it too. The challenge for all of us is to determine how can we make modern medicine more "scientific," more effective and more safe. I have previously made clear that my own point of view on this subject is that we must develop a more "integrative model" of medicine and healing and that we should utilize various naturopathic and homeopathic methods as a way to honor the Hippocratic tradition of "First, do no harm."

Sadly, however, it seems that too few doctors understand or respect this Hippocratic dictum.

Today in America, every man, woman, and child is prescribed around 13 prescription drugs per year (and this doesn't count the many over-the-counter drugs that doctors prescribe and that patients take on their own) (Kaiser, 2006). Just 12 years earlier, Americans were on average prescribed less than eight drugs per person, a 62 percent increase! The fact of the matter is that drugs are not tested for approval in conjunction with other drugs, and the safety and efficacy of the use of multiple drugs together remains totally unknown.

This practice of "polypharmacy" is increasing substantially, and Big Pharma is pushing it hard and benefiting from it in a big big way.

According to a 2008 nationwide survey, 29 percent of Americans used at least five prescription medications concurrently (Qato, Alexander, Conti, 2008), while just three years previously, 17 percent took three or more prescription drugs (Medscape, 2005). Even conservative publications such as Scientific American can no longer deny the increasing serious problems from pharmaceuticals. A recent article highlighted the fact that there has been a 65 percent increase in drug overdoses leading to hospitalization or death just in the past seven years (Harmon, 2010).

Are Our Children and Elders Safe? Not at all.

We all want drugs given to infants to be as safe as possible, but mothers and fathers will be surprised and perhaps shocked to know that very few drugs are ever tested on infants. A 2007 study of over 350,000 children found that a shocking 78.7 percent of children in hospitals are prescribed drugs that the FDA has not even approved for use in children (Shah, Hall, Goodman, et al, 2007). If this isn't shocking enough, a survey in England found that 90 percent of infants were prescribed drugs that were not tested for safety or efficacy in infants (Conroy, McIntyre, Choonara, 1999).

There is almost a 350 percent increase in adverse drug reactions in children prescribed an off-label drug than children who were prescribed a drug that had been tested for safety and efficacy (Horen, Montastruc, and Lapeyre-mestre, 2002). Doctors are committing "medical child abuse" on a regular basis (I wrote a more detailed article about this subject, here).

An even stronger case can be made for the epidemic of "elder medical abuse" due to the much larger number of drugs prescribed to and for our senior citizens. It is no wonder that so many of them have become mental zombies, while Big Pharma profits big time and insurance companies simply raise their rates.

If we were living a lot longer and the quality of our lives was improved by medical care, one could make a case for why today's medical care is providing more benefits than problems, but this is simply not true.

Although we are commonly told that we are living longer than ever now, this is simply a clever, even tricky, use of statistics. The fact of the matter is that there has been a considerable reduction in deaths during the first five years of life ... and this reduction in deaths has resulted primarily from a medicinal agent called "soap," not from the use of any specific conventional pharmaceutical agent.

Ultimately, an American who was 40 years old in 1900 and an American who was 40 years old in 1960 has a similar chance of living to 80 years old today.

Big Pharma, Big Bucks, and the Guise of Science

Adherents of conventional medicine have consistently asserted that its methods are scientifically verified, and they have ridiculed other methods that are suggested to have therapeutic or curative effects. In fact, conventional physicians have consistently worked to disallow competitors, even viciously attacking those in their own profession who have questioned conventional treatments or provided alternative modalities. More recently, medical organizations simply work with insurance companies to help them determine what should and shouldn't get reimbursed, a clever way to kill competition bloodlessly.

And yet, strangely enough, whatever has been in vogue in conventional medicine in one decade has been declared ineffective, dangerous and sometimes barbaric in the ensuing decades. Surprisingly, despite this pattern in history, proponents and defenders of "scientific medicine" tend to have little or no humility, continually asserting that today's cure is truly effective ... and in any case, strongly asserting that any "alternatives" to this ever-changing treatment are quackery, sheer quackery, whether they know anything about these alternative treatment modalities or not.

The good news about conventional medicine and one of its remarkable features for which it should be honored is its history of consistently and repeatedly disproving its own treatments. The fact that only a handful of conventional drugs have survived 30 or more years is strong testament to the fact that conventional medicine is honorable enough to acknowledge its mistakes. But then again, because drug patents only last for a certain limited period of time, there are real substantial benefits when drugs have a relatively short lifespan. Big Pharma can charge big money during this time-frame, and then, let go of it when it goes off-patent, at which time a new, high-priced drug is conveniently developed to replace it. Like the fashion industry, medical fashion changes with rapidity, supporting a powerful economic arms race.

In 2002, the combined profits ($35.9 billion) of the 10 largest drug companies in the Fortune 500 were more than the combined profits ($33.7 billion) of the remaining 490 companies together (Angell, 2004, 11).

The only reason these drug companies did not maintain this shocking financial advantage is that the oil companies' profits have increased considerably with the Iraq War, thus raising the 490 non-drug companies' profits slightly higher. But then again, one would assume that the profits of 490 of the largest companies in the world would be substantially more than just 10 companies in one commercial field.

This economic information is important, even essential, because learning how to separate the "science" of medicine from the business of medicine has never been more difficult. The combined efforts of the drug companies and the medical profession, which together may be called the "medical-industrial complex," have been wonderfully effective in convincing consumers worldwide that modern medicine is the most scientific discipline that has ever existed.

Physicians today rarely run drug companies. Instead, businessmen run them. It is, therefore, not surprising that Marcia Angell, MD, a Harvard professor of medicine and former editor of the famed New England Journal of Medicine, wrote:
Over the past two decades the pharmaceutical industry has moved very far from its original high purpose of discovering and producing useful new drugs ... Now primarily a marketing machine to sell drugs of dubious benefit, this industry uses its wealth and power to co-opt every institution that might stand in its way, including the US Congress, the FDA, academic medical centers, and the medical profession itself. (Levi, 2006)
There is big big money to be made in drug sales, and brilliant marketing has led too many of us to ignore or excuse this bully side of medicine.

The New York Times recently uncovered the fact that Pfizer admitted to paying $20 million in the last six months of 2009 alone to 4,500 doctors to "consultation" and to speak on their behalf (and this doesn't include payments to doctors outside of the US) (Duff, 2010). It seems to be time to stop calling them "drug companies" and call them "drug pushers."

Yes, a gorilla is in the house, but anyone who refers to him as a gorilla is usually called a quack or a crank. This gorilla was not born yesterday; he has been growing for generations. A part of his self-defense propensities is to eliminate competing forces, whether the other side seeks cooperation or not. Any competitive force is frequently and soundly attacked.

The history of homeopathy shows this dark side of medicine. From 1860 to the early 20th century, the AMA had a consultation clause in its code of ethics that members were not allowed to consult with a medical doctor who practiced homeopathy and weren't even allowed to treat a homeopath's patients. At a time in medical history when doctors bloodlet their patients to death and regularly prescribed mercury and various caustic agents to sick people, the only action that the AMA considered reprehensible and actionable was the "crime" of consulting with a homeopath.

In fact, the entire Medical Society of New York was kicked out of the AMA in 1881 simply because this state's medical organization admitted into its membership any medical doctors who utilized homeopathic medicines, no matter what their academic credentials were. They only rejoined the AMA 25 years later (Walsh, 1907, 207).

This King Kong, however, is not a monster to everyone. In fact, this big gorilla is wonderfully generous to executives, to large sales and marketing forces, to supportive politicians and to the media from whom he buys substantial amounts of advertising (and thus, an incredible amount of positive media coverage). And this gorilla is wonderfully generous to stockholders. While it may seem inappropriate to criticize profits, it is important and appropriate to do so when profits are unbelievably excessive, when long-term efficacy hasn't stood the test of time, and when common use of more than one drug at a time is rarely if ever scientifically tested for efficacy.

Although these observations just mentioned may seem harsh and offensive to some people, they are made with the concurrent acknowledgment that most of us know someone whose life was saved or at least whose health was significantly restored by conventional medical treatments. I myself am the son of a fabulous father who was a physician and insulin-dependent diabetic. In other words, I would not be alive today if it were not for some important conventional medical discoveries such as insulin.

We should not "throw the baby out with the bathwater," nor do we want to ignore the bathwater in which we place our babies. Most of us also know someone whose health has been seriously hurt, or whose life was cut short, by modern medical treatments.

Drug companies defend their large profits by asserting that they spend tremendous amounts of money on research and development, but they tend to hide the fact that they spend approximately three times more money on marketing and administration. And the obscenely high profits of the drug companies take into account all known expenses. Ultimately, drug companies are wonderfully creative in convincing us all that their drug treatments are "scientific," and too many of us actually believe them.

It is therefore important to understand what is truly meant when drug companies and the media assert that drugs are "scientifically proven."

Angell, M. The Truth about Drug Companies. New York: Random House, 2004. This fact is extremely startling, but the source is reputable: Marcia Angell, MD, is former editor of the New England Journal of Medicine.

Begley, Sharon. "We Fought Cancer, and Cancer Won," Newsweek, September 15, 2008.

BMJ, 2007. Clinical Evidence

Conroy S, McIntyre J, Choonara I. Unlicensed and off label drug use in neonates. Archives of Disease in Childhood - Fetal and Neonatal Edition 1999;80:F142-F145. doi:10.1136/fn.80.2.F142

Consumer Reports, "High Anxiety." January 1993, 19-24.

Darwin, F. (ed.). The Life and Letters of Charles Darwin. New York, D. Appleton & Co., 1903.

Dima M. Qato; G. Caleb Alexander; Rena M. Conti; Michael Johnson; Phil Schumm; Stacy Tessler Lindau. "Use of Prescription and Over-the-counter Medications and Dietary Supplements Among Older Adults in the United States." JAMA. 2008;300(24):2867-2878.

Horen B, Montastruc JL, and Lapeyre-mestre M. "Adverse drug reactions and off-label drug use in paediatric outpatients." Br J Clin Pharmacol. 54(6); Dec 2002, 665-670. doi: 10.1046/j.1365-2125.2002.t01-3-01689.x.

Harmon K. Prescription Drug Deaths Increase Dramatically, Scientific American. April 6, 2010.

Kaiser Family Foundation, Prescription Drug Trends, June 2006. [PDF], 2007.

"Levi, R. Science Is for Sale," Skeptical Inquirer, July/August 2006, 30:4, 44-46.

Medscape, More Americans Take Prescription Medication. May 3, 2005.

Office of Technology Assessment, 1978. [PDF]

"Roberts, W. H. Orthodoxy vs. homeopathy: Ironic developments following the Flexner Report at the Ohio State University," Bulletin on the History of Medicine, Spring 1986, 60:1, 73-87.

Shah SS, Hall M, Goodman DM, et al. "Off-label Drug Use in Hospitalized Children." Arch Pediatr Adolesc Med. 2007;161(3):282-290.

Walsh, J. J. History of the Medical Society of the State of New York. New York: Medical Society of the State of New York, 1907.

Wilson, Duff. Pfizer Gets Details on Payments to Doctors, New York Times, March 31, 2010.

About the author

Dana Ullman, M.P.H. (Masters in Public Health, U.C. Berkeley) is and is widely recognized as the foremost spokesperson for homeopathic medicine in the U.S.

Prescriptions for teens and young adults on the rise -- Health & Wellness --

Over- and unsupervised- medication causes at least as many problems as TERRORISM. So is it fair to say that these themselves, are terrorism?

Adolescents and young adults are most likely to abuse prescription medications. Yet prescription rates for controlled medications, or drugs the Drug Enforcement Administration deems as having the potential for abuse, have nearly doubled for those age groups in the past 14 years, according to a recent study published inPediatrics. Overall, a controlled medication was prescribed for young adults at approximately one out of every six visits and for young adult by adolescents one out of every nine encounters.

"Physicians must balance the need to treat patients' symptoms while remaining aware of the possibility that prescription medications can be misused or shared with others. At times, it can be a delicate balance between treating a problem and inadvertently causing one," said Robert J. Fortuna, M.D., M.P.H., principal investigator of the study and assistant professor of Pediatrics and Internal Medicine at the University of Rochester Medical Center.

The study found that between 1994 and 2007, prescription rates for controlled medications nearly doubled from 8.3 to 16.1 percent among young adults and rose from 6.4 to 11.2 percent in adolescents. This increase was observed for both males and females and across multiple settings - ambulatory offices, emergency departments, and for injury related and non-injury related visits.

The study examined prescription patterns for teens 15- to 19-years-old and young adults 20- to 29-years-old, using data from the National Ambulatory Medical Care Survey (NAMCS) and National Hospital Ambulatory Medical Care Survey (NHAMCS). The study's authors compared data with data about prescription patterns from 1994 from NAMCS and NHAMCS.

The study broke down clinical visits by classification of drug prescribed, type of visit, place of visit and demographic and geographic factors. Drugs were classified as narcotics (or opioids), sedatives and stimulants.

Controlled medications were often prescribed for common conditions, such as headaches and back pain. While the study did not examine the appropriateness of prescriptions, researchers suggested that physicians take responsibility for monitoring patients receiving controlled medications to ensure that the treatment is effective and that the medications are being used appropriately.

Researchers partly attributed the rising trend in prescriptions for narcotics among young adults to evolving state and federal regulations increasing advocacy for pain management. For example, prescriptions for narcotics rose after 2001, when the Joint Commission on Accreditation of Healthcare Organizations launched an initiative to monitor and treat pain as a fifth vital sign (along with temperature, pulse, respiration and blood pressure).

Sedative medications were increasingly prescribed to young adults and adolescents. Researchers tied the rise to a heightened awareness of insomnia and anxiety, the availability of new pharmaceuticals and widespread direct-to-consumer marketing.

The study found adolescents were also increasingly prescribed stimulant medications. While reports between 2002 and 2008 showed that the overall misuse of stimulant medications like Ritalin has decreased, a recent study found that poison centers are increasingly receiving calls from those who have intentionally misused stimulants, which could mean that the smaller numbers of those misusing stimulants are doing so more intensively. Further, stimulant medications are increasingly being shared with those who have not been prescribed the medication.

While researchers acknowledged that prescribing more controlled medications does not necessarily foster abuse or diversion - sharing medications with others - they advocated for more vigilance when physicians prescribe medications to young adults and adolescents.

"Physicians need to have open discussions with patients about the risks and benefits of using controlled medications, including the potential for misuse and diversion," Fortuna said.

Bulusan explodes

Rey M. Nasol
2010-11-27 13:56:00

Rey M. Nasol
2010-11-27 13:56:00


Legazpi City -- An "explosion-type" earthquake was recorded by the Philippine Institute of Volcanology and Seismology in in Sorsogon Friday night.

In its latest bulletin, Phivolcs said that the quake occurred at around 7:27 p.m. and lasted for about 11 minutes. Clouds, however, prevented state volcanologists to visually observe it.

The statement did not say what distinguished an "explosion-type" earthquake from any other volcanic tremor.

Sulfur dioxide emission rate was measured at 13 tons per day.

About 11 volcanic quakes were also recorded by the seismic network around the volcano during the past 24-hour observation period.

Phivolcs said Bulusan's status remained at alert level 1 and the public was reminded not to venture into the four-kilometer permanent danger zone as sudden steam and ash explosions may occur.

Legazpi City -- An 'explosion-type' earthquake was recorded by the Philippine Institute of Volcanology and Seismology in in Sorsogon Friday night.

In its latest bulletin, Phivolcs said that the quake occurred at around 7:27 p.m. and lasted for about 11 minutes. Clouds, however, prevented state volcanologists to visually observe it.

The statement did not say what distinguished an 'explosion-type' earthquake from any other volcanic tremor.

Sulfur dioxide emission rate was measured at 13 tons per day.

About 11 volcanic quakes were also recorded by the seismic network around the volcano during the past 24-hour observation period.

Phivolcs said Bulusan's status remained at alert level 1 and the public was reminded not to venture into the four-kilometer permanent danger zone as sudden steam and ash explosions may occur."

The airport security solution
government crooks don't want
you to know about

Share this one far and wide

First we (Brasscheck TV) created what has turned into the ultimate TSA abuses reference video..."The TSA is Out of Control"

Then, we traced the problem to its source, a government-criminal enterprise operated by Michael Chertoff.

Now, we present the solution.

Please share this video far and wide.

Send the link to bloggers and writers and other influential people.

A special request to StumbleUpon users to give this page a thumbs up.

We can beat these devils, but we better get real info out before they drown the country in BS.

Brasscheck TV has done its part. Now, we ask you to do yours.


Bottom line:

Bomb-sniffing dogs work infinitely better than any high tech/high cost/high scam device...

That's why the FBI uses them to protect its own headquarters and why the US military uses them in Iraq and Afghanistan under the most hazardous and hostile conditions imaginable.

We are being irradiated, lied to and put in real danger so Michael Chertoff and his friends in Homeland Security can rip us off. Meanwhile, Obama tells us it's for our safety.

Meanwhile, the news media - including the alternative news media - has completely overlooked the facts reported in this video.

Please share this link:

November 28, 2010

US Black Debt Hole: 'We want you all bankrupt!'

Always Look On The Bright Side of Life

"All your data belongs to us".

FBI Wiretapping of Internet Users. "All Your Data Belongs to Us"
A Seamless Global Surveillance Web

By Tom Burghardt
Global Research, November 21, 2010

In a further sign that Barack Obama's faux "progressive" regime will soon seek broad new Executive Branch power, The New York Times disclosed last week that FBI chief and cover-up specialist extraordinaire, Robert S. Mueller III, "traveled to Silicon Valley on Tuesday to meet with top executives of several technology firms about a proposal to make it easier to wiretap Internet users."

Times' journalist Charlie Savage reported that Mueller and the Bureau's chief counsel, Valerie Caproni, "were scheduled to meet with senior managers of several major companies, including Google and Facebook, according to several people familiar with the discussions."

Facebook's public policy manager Andrew Noyes confirmed that Mueller "is visiting Facebook during his trip to Silicon Valley;" Google, on the other hand, "declined to comment."

Last month, Antifascist Calling reported that the U.S. secret state, in a reprise of the crypto wars of the 1990s, is seeking new legislation from Congress that would "fix" the Communications Assistance to Law Enforcement Act (CALEA) and further curtail our civil- and privacy rights.

When the administration floated the proposal in September, The New York Times revealed that among the "fixes" sought by the FBI and other intrusive spy satrapies, were demands that communications' providers build backdoors into their applications and networks that will give spooks trolling "encrypted e-mail transmitters like BlackBerry, social networking Web sites like Facebook and software that allows direct 'peer to peer' messaging like Skype" the means "to intercept and unscramble encrypted messages."
And with a new "security-minded" Congress set to convene in January, chock-a-block with Tea Partying "conservatives" and ultra-nationalist know-nothings, the chances that the administration will get everything they want, and then some, is a sure bet.

More here ....

WaPo inaccurately report consensus growing on Soc. Sec. (Angry Bear)

WaPo (inaccurately?) reports "consensus forming" on deficit

Posted: 23 Nov 2010 04:19 PM PST

by Linda Beale

WaPo (inaccurately?) reports consensus forming on deficit
crossposted with Ataxingmatter

The buildup in the corporate media supporting the corporatist wishlist on budgeting is growing. First there was the clamor about the Bowles-Simpson road map to conquering the deficit--depicted as a reasonable, middle-of-the-road approach. Bowles-Simpson is a neo-liberal/neo-conservative group of people with little understanding of the predicament of the vulnerable middle class in this economy, and apparently as little creativeness for moving the economy out of the stagnation from the four decades of Reaganomics and into a new era of broad-based growth that lifts all boats, rather than just the yachts of the already rich and famous.

Then there was even more clamor about the more "radical" plan put forward by Alice Rivlin and cohorts. Rivlin is another neo-liberal Clintonite who is perfectly willing to sacrifice the New Deal to get the neo-deal.

Obama doesn't seem willing to fight any fight. He quits before he starts, disgusting liberals who understand that a democracy cannot survive based on the kind of "free market capitalism" espoused by the oligarchs who benefit from it. So there is already talk of extending the Bush tax cuts for the wealthy, which have nothing at all to do with jobs, entrepreneurship, innovation, or growth of the US economy and everything imaginable to do with elitism, power, and hording of productivity gains for the G.W. Bush fan club of have-mores.

So it is perhaps not so surprising that the WaPo is already declaring that a "consensus is forming on what steps to take in cutting the deficit." Story by Lori Montgomery, WaPo, Nov. 22, 2010. Ms. Montgomery takes the pundits and neo-con/neo-lib descriptions as god's truth as she describes "a surprising consensus" around "the sacrifices necessary to achieve those goals [of less debt and smaller government]" being "Big cuts at the Pentagon. Higher taxes, including those on home ownership and health care. Smaller Social Security checks and higher Medicare premiums." Once again, the neo-con faction has used its corporate-owned media to hone its message that there is no choice (false note of sadness) but to cut those deficit-causing "entitlements" like Social Security and Medicare.

The awful deed is required, she suggests, to avoid a "European-style debt crisis." No real analysis is there. Once again we see the proof in the pudding: the corporate media has discovered that it can deliver press releases and paid interpretations of events much more cheaply than it can do investigative journalism with smart journalists paid a decent salary and provided decent benefits. Infotainment, not news; opinion, not facts; rehashing of partisan positions, not analysis.

  • No mention of the fact that the Euro zone nations do not have monetary sovereignty. The story ends with the scare-tactice line (from a Republican strategist, so part of the framing intended to make it acceptable to cut Medicare and Social Security while providing more tax cuts to the wealthy) "if we don't act [to cut the deficit], we will be Greece." That's simply not true. We are not in the same position as Greece. We need to do some things, but we have many more choices than Greece (though the Republican path of tax cuts for the wealthy and spending increases on programs that benefit big corporate interests tend to reduce those choices). While I don't entirely agree with the monetarists who want us to print our way out of debt and deficits, there is some basis for printing more dollars to meet national needs, stimulate the economy, and avoid more borrowing. That is not an option for Greece.
  • No analysis of the tax proposals--lower rates even with closing some loopholes will generally mean more of the burden is passed to the middle class and taken from the wealthy. Merely repeats the Republican notion that lower tax rates lead to economic growth (they don't--just look at the historic pattern of growth and tax rates--we have higher growth when we have higher rates, likely because it leads to better allocation of resources).
  • No mention of the fact that the health reform bill, when it kicks in, should begin the process of reducing health care costs, or of the fact that a much more cost-effective solution--rather than cutting benefits to those vulnerable elderly and sick for whom Social Security and Medicare is a lifeline--would be to throw the rent-seeking health insurers out of the primary business of determining who gets health care and let them make their non-rentier profits on supplementing a national health care single-payersystem similar to Canada's or Britain's or Germany's--anybody but our failed profits-for-financial-institutions-at-the-cost-of-care-for-ordinary-Americans system.
  • No mention of the fact that Social Security is not even officially part of the deficit--that in fact we have borrowed from the funds paid in by workers who are now retiring so that we could create a tax-haven economy for the wealthy and corporate elite or the fact that whatever shortfall Social Security might (but not necessarily will) face in future years is EASILY solvable by extending the tax to full wage income of all workers (and, for this purpose at least, acknowleding that payments from hedge and equity fund partnerships to service partners in respect of their "profits" interest are compensation that is subject to payroll taxation). Social security should be off the table because it ain't broke, any future fixing that it needs is simple and equitable, and it has been put on the table by the same monied elites that at the same time work to ensure that their favorite tax breaks and other benefits stay in the system (such as the charitable contribution deduction for the value of stock, rather than the basis that represents the owner's actual investment in the stock). Instead, the Bowles-Simpson right-wing dominated group would reduce benefits for all retirees by redefining their cost of living needs (in spite of the fact that the current formula is probably weighted too lightly on the kinds of expenses that the elderly face, they would suggest a formula that would be even less likely to keep the elderly who depend on SS on an even keel); means-test Social Security (thus destroying the key element of the near universal support of the program); and raise the retirement age (to 69) meaning that some people who get nothing whatsoever from the years invested and many in manual labor jobs would be worn out before able to retire.
  • No mention of the fact that Alan Simpson, Obama's choice to co-chair his so-called Commission on Fiscal Reform (it should have been called--neo-lib/neo-con commission for cutting benefits under Social Security and Medicare), has consistently targeted Social Security (and other New Deal programs) as a huge unearned entitlement that should just be gotten rid of or at least whittled down to the bare bones if at all possible. See e.g., Alan Simpson Calls Social Security 'Cow with 310 Million Tits,' Causes Uproar, TPM Muckraker, Aug. 25, 2010. It's no surprise that a commission made up of elitists --including nine Republicans that the Business INsider site politely calls merely "tax averse" (see Beutler, Meet the 18 People Who Could Determine the Fate of Social Security", Aug. 30, 2010) opts for solutions that favor elites.
  • No mention of the fact that Social Security funds were required to be invested in US Treasuries-(see Trust Fund FAQs," Social Security Administration, February 18, 2010)
    The SS surplus funded US debt at the same time that huge tax cuts were enacted in favor of corporate and wealthy elites, but now the neo-con/neo-lib move to decrease benefits is essentially a call to reneg on commitments made to those that funded the surplus and borrowing.
  • No mention of the fact that most of the Bowles-Simpson crew held pre-determined positions that favored reducing the programs that help the poor and vulnerable (see Beutler, Meet the 18 People Who Could Determine the Fate of Social Security", Aug. 30, 2010) :
    • Bowles himself, a Wall Streeter Clintonite Dem who was not very strongly against privatization when he was chief of staff;
    • Simpson, who has supported privatization and benefit cuts to Social Security for deaces,
    • Rivlin, another bank-friendly Clintonite who has long argued for cutting Social Security benefits;
    • Stern, a former President of the SEIU who has supported the idea of investing Social Security funds in the stock market rather than in US Treasuries;
    • Cote, Republican CEO of Honeywell who has advocated cuts for military servicemen and women rather than defense contractors like Honeywell;
    • Fudge, an Obama supporter who has been in business at Kraft Foods and Young & Rubicam (so is likely to support business friendly solutions whether they are good for the vulnerable or not)
    • Paul Ryan, Republican advocate of austerity budgeting, Social Security privatization, and Medicare vouchers
    • Jeb Hensarling, Republican advocate of austerity budgeting and privatization and cuts for Social Security and Medicare
    • Dave Camp, Michigan Republican that wants tax cuts, and Social Security privatization
    • Judd Gregg, Republican interested in raising retirement age to 70, privatizating Social Security, shrinking government by "starving the beast", and yet doesn't think tax cuts should be offset
    • Tom Coburn, Republican from Oklahoma who says he's "open to everything if it gets us where we need to go" regarding the commission's deficit reduction aims, BUT hypocritically opposes not providing an additional tax cut for the wealthy. Coburn wants to "dismantle large segments of the federal government" and wants all options on the table except preserving current structure and benefits or increasing SS taxes (on the wealthy). He also wants to cut pay and benefits for military dependents, retirees and survivors. Funny, he doesn't mention generals or defense contractors. Coburn has consistently worked to eliminate the New Deal programs oriented towards the ordinary and middle class folks.
    • Mike Crapo, Republican who wants to privatize Social Security and reduce benefits for anyone born after Jan.1, 1950.
    • John Spratt, blue-dog Democrat who has long advocated changes to Social Security, including supplementing SS with private plans
    • Xavier Becerra, democrat who may actually oppose changing Social Security
    • Jan Schakowsky, progressive democrat who opposes entitlement cuts and fought for the public option
    • Kent Conrad, Democratic budget hawk who opposed the public option, supports passing new tax cuts that extend the Bush cuts for everybody, though arguing for tax increases eventually
    • Max Baucus, Democrat who supported Bush tax cuts (imagine where we might be if he had fought instead for ordinary Americans) and has consistently supported decimating the estate tax and has supported the idea of Social Security cuts
    • Dick Durbin, a progressive Democrat who nonetheless has been open to cutting Social Security

No analysis is there. What Montgomery puts forward as supporting the idea of a national consensus is the Bowles-Simpson vague statement of a roadmap; the Rivlin-Domenici panel, another neo-lib/neo-con dominated group whose prescriptions are predictable; Frank Keating, a Republican who wants lower income-tax rates and a national sales tax (perfect for the wealthy in passing the burden of taxation to the middle class); and retired military officers and national security experts who agree that the hugely bloated Pentagon budget can be reduced (can't we ALL agree on that one?). That's a national consensus? I don't think so.

Regretably, she ends with a quote from Domenici (not a moderate by any means) saying that the fact that there is some common ground about cuts and tax increases among this disparate group is "'a testament to the moderate nature' of the ideas under discussion". No--it is a testament to the ability of one view to dominate the media and to be presented as a growing consensus on the need to cut the welfare programs that are the backbone of the New Deal, in order to frame the discussion in a way that pushes it towards a single conclusion.

For a different perspective, see DAvid Coates, Eating the Old at Thanksgiving(nov. 22, 2010).

Michel Chossudovsky: Financial Meltdown on Wall Street -

Global Economic Crisis
The Great Depression of the XXI Century

Michel Chossudovsky and Andrew Gavin Marshall (Editors)

Montreal, Global Research Publishers. Centre for Research on Globalization (CRG), 2010.
ISBN 978-0-9737147-3-9 (416 pages)

This book takes the reader through the corridors of the Federal Reserve, into the plush corporate boardrooms on Wall Street where far-reaching financial transactions are routinely undertaken. Each of the authors in this timely collection digs beneath the gilded surface to reveal a complex web of deceit and media distortion which serves to conceal the workings of the global economic system and its devastating impacts on people`s lives.

Despite the diversity of viewpoints and perspectives presented within this volume, all of the contributors ultimately come to the same conclusion: humanity is at the crossroads of the most serious economic and social crisis in modern history.

“This important collection offers the reader a most comprehensive analysis of the various facets – especially the financial, social and military ramifications – from an outstanding list of world-class social thinkers.”
-Mario Seccareccia, Professor of Economics, University of Ottawa

"From the first page of the preface of The Global Economic Crisis, the reasons for all unravel with compelling clarity. For those asking “why?” this book has the answers." –Felicity Arbuthnot, award-winning author and journalist based in London.

"Today, the economic meltdown is reconfiguring everything – global society, economy and culture. This book is engineering a revolution by introducing an innovative global theory of economics." -Michael Carmichael, prominent author, historian and president of the Planetary Movement
The Global Economic Crisis

Michel Chossudovsky
Andrew G. Marshall (editors)

Financial Meltdown on Wall Street

Excerpt from Michel Chossudovsky's Introduction to Global Research Publishers' recent book on the Global Economic Crisis.

We are at the crossroads of the most serious economic crisis in world history.

The economic crisis has by no means reached its climax, as some economists have predicted.

The crisis is deepening, with the risk of seriously disrupting the structures of international trade and investment.

The Nature of the Economic Crisis

In contrast to Roosevelt’s New Deal, adopted at the height of the Great Depression, the macroeconomic policy agenda of the Obama administration does not constitute a solution to the crisis. In fact, quite the opposite: it directly contributes to the concentration and centralization of financial wealth, which in turn undermines the real economy.

The crisis did not commence with the 2008 meltdown of financial markets. It is deeply rooted in major transformations in the global economy and financial architecture which unfolded in several stages since the early 1980s. The September-October 2008 stock market crash was the outcome of a process of financial deregulation and macroeconomic reform.

We are dealing with a long-term process of economic and financial restructuring. In its earlier phase, starting in the 1980s during the Reagan-Thatcher era, local and regional level enterprises, family farms and small businesses were displaced and destroyed. In turn, the merger and acquisition boom of the 1990s led to the concurrent consolidation of large corporate entities both in the real economy as well as in banking and financial services.

International commodity trade has plummeted. Bankruptcies are occurring in all major sectors of activity: agriculture, manufacturing, telecoms, consumer retail outlets, shopping malls, airlines, hotels and tourism, not to mention real estate and the construction industry.

What is distinct in this particular phase of the crisis is the ability of the financial giants – through stock market manipulation as well as through their overriding control over credit – not only to create havoc in the production of goods and services, but also to undermine and destroy large and well established business corporations.

This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Factories are closed down. Assembly lines are at a standstill. Unemployment is rampant. Wages have collapsed. Entire populations are precipitated into abysmal poverty. Livelihoods are destroyed. Public services are disrupted or privatized. The repercussions on people’s lives in North America and around the world are dramatic.

The Financial Meltdown

The subprime residential mortgage crisis leading to millions of people losing their homes reached its climax in the last days of August 2008, when financial institutions reported billions of dollars in losses.

Friday, September 12, 2008, Lehman Brothers faced collapse in weekend negotiations behind closed doors on Wall Street. Black Monday descended on September 15, 2008. Following the filing for Chapter 11 Bankruptcy by Lehman on Monday morning, the Dow Jones industrial average declined by 504 points (4.4 percent), its largest drop since September 17, 2001, when trading resumed on Wall Street after the 9/11 attacks.

The following day, it was the turn of AIG, the insurance conglomerate. On the evening of September 16, the Bush administration “granted an $85 billion loan to AIG in exchange for a controlling 79.9% equity share of the company”.[1]

The financial slide proceeded unabated throughout September. Barely two weeks later, on Monday, September 29, the Dow Jones plummeted by 778 points, its largest one-day drop in the history of the New York Stock Exchange. This followed the rejection by the U.S. House of Representatives of the Bush administration’s 700 billion dollar bailout plan, which was slated to come to the rescue of the banks affected by the subprime mortgage crisis. In a single day, 1.2 trillion dollars had seemingly evaporated.

The world’s stock markets are interconnected around the clock through instant computer link-up. Instability on Wall Street immediately spills over into the European and Asian stock markets, thereby rapidly permeating the entire financial system.

Speculative Onslaught on Black Monday, September 29, 2008

There was something disturbing about the Black Monday, September 29, 2008 collapse of Wall Street, following the decision of the U.S. House of Representatives. Did this paper money “vanish into thin air” as claimed by financial analysts, or was it “appropriated” by institutional speculators in one of the largest transfers of money wealth in American history?

There was prior knowledge on how the Congressional vote would proceed. President Bush’s speeches had intimated that a collapse would occur. There was also an expectation that the market would crumble if the proposed 700 billion dollar bailout were to be rejected by the U.S. Congress.

Speculators, including major financial institutions, had already positioned themselves. Powerful financial actors with prior knowledge and access to privileged information prior to the House’s rejection of the bill made billions in speculative trade on Black Monday when the market crumbled. And thenon Tuesday, September 30, they made billions when themarket rebounded, with the Dow jumping up by 485 points, a 4.68 percent increase, compensating in part for Monday’s decline. Those financial actors who had foreknowledge and/or who had the ability to influence the vote in the U.S. Congress also made billions of dollars.

Ironically, almost twice as much money was wiped out from the U.S. stock market on Black Monday, September 29 (1.2 trillion dollars) than the value of the Bush administration’s bank bailout under the Troubled Assets Relief Program (TARP) (700 billion dollars).

Even before the opening bell, Monday looked ugly. But by the time that bell sounded again on the New York Stock Exchange, seven and a half frantic hours later, $1.2 trillion had vanished from the U.S. stock market.[2]

This money did not vanish. It was confiscated from the pockets of people who had invested their lifelong savings in the stock market.

While public opinion celebrated the refusal of the U.S. Congress to accept the Bush administration’s bailout, the decision of the legislature had fed the speculative onslaught.

Political uncertainty regarding the proposed bailout constituted ammunition for the speculators.

In a bitter irony, the Wall Street banks are “double dippers”; they are the recipients of the bank bailout. And at the same time they made money speculating first on the rejection by the U.S. Congress and subsequently on the later adoption of the bank bailout legislation.

On October 1, Wachovia Bank was taken over by Wells Fargo, overriding a competing bid from Citigroup. The deal was sealed with the support of Warren Buffett, the richest man in the world, according to Forbes, and a major shareholder of Wells Fargo.[3]

The first week in October 2008 represented a crucial turning point. The Dow Jones fell by 21 percent over the week, with Thursday, October 9 suffering its biggest fall since Black Monday, October 19, 1987. The S&P 500 index lost 22 percent of its value. The entire western banking landscape was in disarray. Iceland’s banking system was destabilized and the country was put in receivership. The Reykjavik government gave the green light for the forced bankruptcy of the entire banking system.

Following a pledge by G7 finance ministers and central bank governors on the weekend of October 10-11 to prevent further bank collapses, the world’s stock markets rebounded on October 13. The G7 had committed itself to “taking all necessary steps to unfreeze credit and money markets”. The Dow increased by 936 points (eleven percent) at the close of trading on October 13, its largest one day increase since 1933.4 Most European exchanges had “recovered”, with the Paris CAC index rebounding by an astounding 8.8 percent at the close of trading.

This short-lived “recovery” was part of the speculative game. Two days later, on October 15, Black Wednesday, the Dow Jones plummeted by 7.9 percent.

The sequence of a “one day collapse” followed by a “one day surge” and recovery, followed by another “one day collapse” a few days later, is part of the process of financial manipulation. Day to day instability and swings in stock market values are the source of large windfall profits accruing to “institutional speculators” and hedge funds.

Financial Warfare: The Powers of Deception

The September-October 2008 financial meltdown was not the consequence of a cyclical downturn of economic activity. It was the result of a complex process of financial manipulation, which included speculative trade in derivatives.

Financial manipulation has a direct bearing on the workings of the market. It potentially triggers instability in market transactions. This snowballing instability then becomes cumulative, leading to an overall slide of market values.

Inside information, high level political connections and foreknowledge of key policy announcements are crucial instruments in the conduct of large-scale speculative operations.

“Financial intelligence” and the powers of deceit were the driving forces behind the 2008 financial meltdown. Covert undercover financial operations were waged. Those powerful financial institutions, which had the ability to drive the market up at an opportune moment and then drive it down, had placed their bets accordingly. As a result, they reaped billions of dollars in windfall gains both on the upturn as well as on the downturn.

In contrast, for those who had put their faith in the free market, lifelong savings were erased in one fell swoop, appropriated by the shadow banking system. The crash of financial markets had led to a massive concentration of financial wealth.

The weapons used on Wall Street are prior knowledge and inside information, the ability to manipulate with the capacity to predict results and the spreading of misleading or false information on economic occurrences and market trends. These various procedures are best described as the powers of deception that financial institutions routinely use to mislead investors.

The art of deception is also directed against their banking competitors, who are betting in the derivatives and futures markets, stocks, currencies and commodities. Those who have access to privileged information (political, intelligence, military, scientific, etc.) will invariably have the upper hand in the conduct of these highly leveraged speculative transactions, which are the source of tremendous financial gains. The CIA has its own financial institutions on Wall Street.

In turn, the corridors of private and offshore banking enable financial institutions to transfer their profits with ease from one location to another. This procedure is also used as a safety net that protects the interests of key financial actors including CEOs and major shareholders of troubled financial institutions. Companies can be divested from within and large amounts of money can be moved out at an opportune moment, prior to the company’s demise on the stock market (e.g. Lehman, Merrill Lynch and AIG, not to mention Bernhard Madoff).

As events unfolded, Merrill Lynch was bought and Lehman Brothers was pushed into bankruptcy. These are not haphazard occurrences. They are the result of manipulation, using highly leveraged speculative operations to achieve their objective, which consists in either displacing or acquiring control over a rival financial institution. The 2008 financial meltdown has nothing to do with free market forces: it is characterized by financial warfare between competing institutional speculators.

The Federal Reserve Bank of New York and its powerful Wall Street stakeholders – which are Wall Street’s largest private banks – have inside information on the conduct of U.S. monetary policy. They are therefore in a position to predict outcomes and hedge their bets in highly leveraged operations on the futures and derivatives markets. They are in an obvious conflict of interest because their prior knowledge of particular decisions by the Federal Reserve Board enables them, as private banking institutions, to make multibillion dollar profits.

Links to U.S. intelligence, the CIA, Homeland Security and the Pentagon are crucial in the conduct of speculative trade, since that allows the speculators to predict events through prior knowledge of foreign policy and/or national security decisions which directly affect financial markets. An example: they purchased “put options” on airline stocks in the days preceding the 9/11 attacks.


1. Daniel R. Amerman, “AIG’s Dangerous Collapse”, Financialsense, 0917.html, 17 September 2008.

2. Vikas Bajaj and Michael M. Grynbaum, “For Stocks, Worst Single-Day Drop in Two Decades”, New York Times,, 29 September 2008.

3. Eric Dash and Ben White, “Wells Fargo Swoops In”, New York Times,, 3 October 2008.

4. Michael M. Grynbaum, “Stocks Soar 11 Percent on Aid to Banks”, New York Times, markets.html, 13 October 2008.

Michel Chossudovsky is an award-winning author, Professor of Economics (Emeritus) at the University of Ottawa and Director of the Centre for Research on Globalization (CRG), Montreal. He is the author of The Globalization of Poverty and The New World Order (2003) and America’s “War on Terrorism” (2005). He is also a contributor to the Encyclopaedia Britannica. His writings have been published in more than twenty languages.

November 27, 2010

Schemes of the Rich and Greedy | Michael Hudson

November 24, 2010

Tax-Avoidance – The Worst is Yet to Come

“Let me tell you about the very rich. They are different from you and me.”
“The Rich Boy,” by F. Scott Fitzgerald

The 30-year campaign of the wealthy to rig our economic system – especially the tax component – for their own benefit will accelerate with the GOP capture of the House of Representatives and the likely capture of the presidency and Senate in two years. For a foreshadowing of what is to come, a dress rehearsal has been conducted in Latvia, Iceland, Ireland and other financially strapped countries. Latvia has been burdened with the world’s most regressive tax system, while Iceland and Ireland have become record setters in tapping taxpayers to bail out financial crime syndicates, a.k.a. banks.

The Irish bailout will encumber its people with perhaps as much debt as a $9 trillion bailout would be here in the United States. The Irish also are expected to also gut unemployment insurance, their minimum wage and similar social safety nets while boosting interest rates and home property taxes to pay tribute to the European creditor agencies that have “rescued” them. They will relinquish ownership of much of Ireland to their creditors, capped by ownership of government policy-making. The new banks will be owned by foreigners, who will put Ireland on a debt treadmill to transfer its taxable surplus to mainland Europe and Britain.

Just as the U.S. taxpayer saved Goldman Sachs and the other high rollers from taking a loss, the Irish are being forced to “socialize” (that is, oligarchize) the losses of the banks. Think of how the Federal Reserve gave the banks 100 cents on the dollar for the some $2 trillion of toxic assets they took off the books of the banks and you get a sense of how the Irish bailout money will be used. It will keep the banks and creditors whole.

Bad banking is going unpunished. Shareholders, bondholders, large depositors and bank executives are not facing constraints on moral hazard. The European Central Bank (ECB) has cleaned up their mess, enabling and their wealth to grow on its trajectory as before – at the price of impoverishing the non-financial parts of society. Every effort will be made to re-inflate the property bubble putting off the day of reckoning. Taxes – like accountability – are for what Leona Helmsley referred to as the “little people” (not referring to Irish leprechauns).

The key to the success of the wealthy is their ability to hold the economy hostage (dependent of course on the government’s willingness to be unnecessarily held hostage). This dictates the fiscal and financial strategy of the super-rich: to create a crisis and then present their demands. Inasmuch as I expect the U.S. Congress to be plunged into this situation next spring, it is worth quoting Luke Johnson’s observation in Wednesday’s Financial Times: “The probable cost to the Irish taxpayer” of its government’s announcement on September 30, 2008, that it would fully back Ireland’s insolvent banks – a cost “running in the tens of billions of euros – helped the banks but left the country in need of a bail-out. A measured restructuring would have been far better, with domestic depositors kept whole, but all levels of bondholders forced to share plenty of pain. In a panic, the bureaucrats and lawmakers who preserved the banks in their entirety struck an ill-judged, carte-blanche deal that will haunt Ireland’s taxpayers for years.”[1]

The key phrase above is, “In a panic …” The actions of European Central Bank and IMF (imposing domestic austerity to make sure that Casino Capitalists do not have to take a “haircut”) provide a set of experiments replete with rhetorical patter talk that Republican and Democratic plutocratic protectors are watching as an object lesson for how to maneuver this spring by creating a financial emergency – a grab-bag 9/11 for the bankers – to trot out their Financial Invasion plans into the domestic U.S. economy. Lacking a Democratic party committed to reverse the recent redistribution of wealth up the economic pyramid, we may expect Congress to shed crocodile tears as they complete the tax shift off the oligarchy onto the middle class – the constituency they are in a position to sell out.

First, consider the GOP cover-up lie: “We are tax cutters, because we want you to keep more of your money.” A more verifiable, restatement of the impact of their actions would be: “Our designated task is to legislate tax shifters to shift the tax burden onto middle-class voters so as to shift more of the wealth of this nation upward to our core campaign contributors.”

In their ability to buy this political support, the super-rich are indeed different from you and me. Freed from the normal societal constraints on greed and selfishness, they are able to buy whole armies of propagandists and politicians. What is noteworthy is that such prominent members of the super-rich as Bill Gates Sr. and Warren Buffett exercise a form of responsible wealth rather than letting themselves be pulled towards the dark side. As the ancients well described, wealth is addictive. The enlightened attitude of the would-be “responsible rich” is more than offset by the rapacious greed of others at the top of economic pyramid.

This means that societies polarize if they don’t maintain vigilant protection against wealth addiction, above all in the financial sphere. If regressive taxation and an oligarchic (anti-socialist) state is not resisted, the economy will shrink. And as it shrinks, the wealthy will gain even more relative power, and make the tax system even more regressive – locking in a dynamic of economic and financial decline.

“Rapacious” and similar words are necessary to describe how the super-rich wish to “free” themselves from taxes, above all on financial wealth or property. They want whatever funds that government does have to be used for their benefit – to bail out financial losers (such as A.I.G. or Bear Stearns in 2008) so that winners such as Goldman Sachs can collect on bets that otherwise would be owed by deadbeats. The wealthy want subsidies and guarantees for their deposits, and to be “made whole” on whatever gains they are threatened with losing, regardless of how fictitious these gains may be, as in the case of junk mortgages. The aim is simply – crudely, often covertly, with bribery and junk economics as its rationale – to increase their share of wealth and income and to make their takings tax-free.

Everyone would like to be free of taxes. But only the rich have sufficient wealth to “buy up Congress” to give themselves enough tax breaks to shift the cost of running government off their shoulders onto the rest of society – and while they’re at it, to make sure that the government uses its resources to make the rich even wealthier, again at the cost of stifling the economy below them.

This is the situation into which American society is now falling. And at the end of this road is a flat-tax dystopia. It not only ends progressive taxation, it frees from taxes altogether the kinds of income that the wealthy take – returns to financial wealth and property.

The danger the United States faces today is that the government debt crisis scheduled to hit Congress next spring (when Republicans are threatening to vote against raising the federal debt limit as the government deficit soars) will provide an opportunity for the wealthy to give a coup de grace on what is left of progressive taxation in this country. A flat tax on wage income and consumer sales would “free” the rentiers from taxes on their property – just the opposite of Keynes’s hoped-for “euthanasia of the rentier.”

Obviously, all governments have to levy taxes – that is, they have to tax somebody. But the super-rich would like this tax to be shifted off their shoulders onto those who have to work for a living. In diametric opposition to Adam Smith and other putative “founding fathers” of “free market” neoliberalism, the super-rich want to shift taxes off “free lunch” economic rent – off interest, dividends, rents and capital gains – onto wage-earners.

This tax shift already has been underway for the past thirty years. It has doubled the proportion of the returns to wealth (interest, dividends, rents and capital gains) enjoyed by the wealthiest 1%, from a reported one-third in 1979 to an estimated two-thirds of the U.S. total today.

This regressive tax shift off wealth onto wage earners has occurred in three ways. The largest and most egregious was the Greenspan Commission’s ploy of moving the cost of Social Security and Medicare out of the general budget (where it would have to be financed by taxpayers in the higher brackets) onto the bottom of the scale in 1982. Instead of being treated as “entitlements” paid by the highest tax brackets, it is treated as “user fees” by employees with a cut-off (currently about $102,000) for higher-income earners. The pre-saved “Social Security fund” was invested in Treasury bills and then lent to the government – enabling it to cut taxes on the higher brackets. “Social Security and Medicare” became a euphemism for giving the government enough “forced saving” of labor so that the Treasury could cut taxes on the higher income and wealth brackets.

This First Great Republican Tax increase was folded into a reduction in tax rates across the board – above all on the highest tax brackets. This has been ongoing since 1981. The 1981 tax “reform” also gave an accelerated depreciation allowance to absentee property owners, permitting them to pretend that their real estate was losing value even as it was soaring in market price. The effect of this “fictitious property accounting” was to free the real estate industry as a whole from having to pay income tax. (The loophole was not available to homeowners!) The rental income thus “freed” was available to be paid to banks as interest.

Meanwhile, at the state and local level, governments have scaled back property taxes and replaced them with income taxes and sales taxes. These taxes fall mainly on wages and on consumer goods, not financial and property income.
The trick has been for Republicans (and “Blue Dog” Democrats) to pose as “tax cutters” rather than tax shifters. Many wage earners now pay more in FICA paycheck withholding and other taxes cited above than they do in income tax. These changes over the past thirty years have reversed the 20th century’s tendency toward progressive taxation with a regressive tax system.

The 2000 Republican presidential primaries saw Steve Forbes run on a plank that would be the capstone of this tax shift off wealth: a “flat tax,” one that would do away with taxing the wealthy more than blue-collar labor. Mr. Forbes was laughed out of the presidential primaries for proposing this flat tax. It was promoted as being “tax simplification.” The problem was that it is so “simple” that it falls only on employees and their employers as a wage tax.

The details are much more regressive than seem at first glance. The flat tax actually would tax wage earners much more steeply than the wealthy, whose income it would largely exempt! The flat tax is supposed to fall on employment, not returns to wealth. Employees and their employers would pay the tax, as they pay today’s 12.4% FICA paycheck withholding, but the flat tax would not be levied on financial and property income.

The flat tax is supposed to be accompanied by a European-style regressive value-added tax (VAT). By taxing “value,” it essentially falls on labor – as in “the labor theory of value.” The tax does not fall on “empty” pricing in excess of value – what the classical economists termed “economic rent,” that element of price (and income) that has no counterpart in actual cost of production (ultimately reducible to labor) but is a pure free lunch: land rent, monopoly rent, interest and other financial fees, and insurance premiums. This economic rent is the major return to wealth. It is grounded in the finance, insurance and real estate (FIRE) sector.

The effect of untaxing the FIRE sector is twofold. First, it increases the power of wealth, privilege, monopoly rights and property over living labor – including the power of hereditary wealth over the living. Second, it helps “post-industrialize” the economy, creating a “service” economy. A service economy is mainly a FIRE-sector economy. Does any of this sound familiar?

I think that matters are going to get much, much worse for U.S. taxpayers. In fact, we have a dress rehearsal of what is likely to occur already before our eyes. Un-remarked by the press, the flat-tax has been applied with increasing disaster abroad. One might think of this as a cruel psychological economic experiment to see just how far a national economy can be pushed in terms of income and wealth inequality causing poverty at the bottom of the economic pyramid.

Tigers in debt
The cruelest economic experiment has been in the post-Soviet economies. The “Baltic Tiger” Latvia has become a testing ground for how far living standards can be depressed, how steeply an economy can be taxed while removing public social support in the face of a wealthy kleptocratic class at the top.

Latvia’s GDP has plunged by over 22% during 2008-09, unemployment is rising, and the government has cut back spending on hospitals and health care, schools and other basic social integument. But what has most intrigued Europe’s ruling class is its tax favoritism that has created a Bubble Economy (euphemized as a Tiger Economy to make a debt-leveraged real estate bubble appear as if it were a road to wealth rather than to debt peonage). Latvia siphons off more than 51% of wage income in a flat tax – with only a 1% tax on property. This regressive tax system has been largely responsible for its property bubble.

When the Soviet Union broke up, neoliberal advisors were given a free hand in designing their ideal “free market” system. The result became hell for 99% of the population, but heaven for the top 1% who were given public property, enterprises, land, buildings, utilities and other property as part of their “wealth creation” windfall neoliberal style. This gave new meaning to “free” market.

Industrial production and agriculture have been scrapped, forcing the economy into chronic trade deficit – which was financed by an inflow of foreign mortgage loans (mainly from Swedish banks) to bid up housing prices for the Latvians. Without work, a rising proportion of young Latvians have had to emigrate – primarily to Ireland, only to experience the bursting of its own bank bubble this year. So without further ability of housing and property prices to rise – and hence, to pledge as collateral for bank loans – Latvia has had to borrow from the European Union (EU) and IMF.

This borrowing has involved the kind of “conditionalities” imposed only on prostrate Third World countries in times past. Last year the government cut back spending and raised taxes. But it is not enough.

My colleague Jeffery Sommers and I have written numerous articles on Latvia, and the story just gets worse and worse. The pretense is that EU and IMF lending is designed to “rescue” Latvia, to “help it get back on its feet.” The reality is that it is killing the economy – and the population, literally. I would not recount it here except to show the kind of disaster that is being celebrated as a success by the EU and IMF – and is being looked at as an object lesson by flat-tax advocates in the United States.

On November 22, Latvia’s Dienas Bizness newspaper reported how the new plan. It is to reduce the flat tax on income from 26 to “just” 25% (and as a sop to the poor, to raise the untaxable minimum from 35 lats to 45 lats a month (less than $90). The even more onerous “Social Security tax” (i.e., tax on wage-earners to free the wealthy from taxation) is to be raised to over 35%. (Employers are to contribute 24.09%, as before, while wage withholding on employees is raised from 9% to 11%.) The tiny 1% property tax will be roughly doubled and made slightly progressive.

The result is that employment taxes total 60% (25% + 35%). And it gets worse. The VAT on sales is 22%. Assuming that Latvians spend the entire remaining 40% of their wages on sales, this would amount to 8%. All totaled, this would raise the overall tax burden faced by wage earners to 68%.

However, this calculation does not take account of what Latvians have to pay for debt service on their mortgage loans, car loans and other bank debts, and on housing. If these costs amounted to just 25 or 30% of their income (much lower proportions than for the United States), this would absorb over 90% of their income before they have any month to spend consumer goods.

“Great,” say EU economic planners. Latvia has finally balanced its trade! Nobody can afford to import much. So the EU has held out Latvia as a model for Greece and Ireland to follow. In the Greek crisis, one read repeated articles urging it to “stand up and take it” like Latvians.

Here’s how Latvians are getting by – in much the same way that families in Ecuador and other Central American countries have done. The tax system is so regressive, so burdensome on industrial employment, that more than 12% of Latvia’s population is now reported to be working abroad. This leaves the elderly and the young at home, while working-age Latvians try their luck in the shrinking Irish and European economies. Their families are trying to live on what their working-age relatives can send back to the country!

The press has made much of the fact that Latvians have just voted back into office the same neoliberal coalition that has saddled them with the flat tax and VAT. What actually happened last month, however, was that the election was fought mainly over ethnic issues. The would-be progressive reformers of the neoliberal right-wing “reforms” consisted largely of Russian-speaking parties in the Harmony Center coalition. The neoliberals managed to steer voters along ethnic divisions rather than fighting the election over economic policy. So as so often happens in the United States itself, voters let themselves be distracted away from economic issues.

Yet another object lesson for “how to do it” in the United States …

Can a regressive flat-tax be pushed through U.S. Congress?

Returning to the U.S. economy, the wealthy want just what bankers want: the entire economic surplus (followed by a foreclosure on property). They want all the disposable income over and above basic subsistence – and then, when this shrinks the economy, they want the government to sell off the public domain in “privatization” giveaways, and they want people to turn over their houses and any other property they have to the creditors. “Your money or your life” is not only what bank robbers demand. It is what banks themselves demand, and the wealthy 10% of the population that owns most of the bank stock.

And of course, the wealthy classes want to free themselves from the share of taxes that they have not already shed. The flat-tax ploy is their godsend.

Here’s how I think the plan is intended to work. Given the fact that voters have already rejected the flat tax in principle, it can only be introduced by fiat under crisis conditions. Alan Simpson, President Obama’s designated co-chairman of the “Deficit Reduction Commission” (the euphemistic title he has given to his “Shift Taxes Off Wealth Onto Labor” commission, STOWOL) already has suggested that Republicans close down the government by refusing to increase the federal debt limit this spring. This would create a fiscal crisis and threat of government shutdown. It would be a fiscal 9/11, for the Republicans to trot out their “rescue plan” for the emergency breakdown of government.

The result would cap the tax shift off finance and wealth onto wage earners. Supported by Blue Dog Democrats, President Obama would shed crocodile tears and sign off on the most right-wing, oligarchic, anti-labor, anti-black and anti-minority, anti-industrial tax that anyone has yet been able to think up. The notorious Flat Tax which would fall only on wage income (paid by employees and employers alike) and on consumer goods (the value-added tax, VAT), while exempting returns that accrue to the wealthy in the form of interest and dividend income, rent and capital gains.

If you think I’m too cynical, just watch …


[1] Luke Johnson, “The rights and wrongs of going bankrupt,” Financial Times, November 24, 2010.