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January 20, 2011

INDIGNEZ-VOUS (translated) MUST^ MUST^ READ !

What compels the French to lash out - and they, and we, ought ....

I am publishing the whole thing just in case it disappears.  Be sure to go to the link above and read the commentary ...


With your patience begged for the quality of the translation (its the best Google could do) still I thought I'd post this.  Human translators are working on the original feverishly as I type, have no doubt. 


Perhaps there's as much reason to hope as I'd wanted to believe there was....

INDIGNEZ-VOUS 
 by

Stéphane Hessel, 93.  

Page 1

Much the very last step. The end is not far away. What chance to take this opportunity to recall what has served as base my political engagement: years of resistance and the program developed there are sixty-six years by the National Council of Resistance! C ' Jean Moulin is that we, through this Council, the meeting of all components of occupied France, the movements, parties, trade unions, to proclaim their adherence to the Fighting France and only leader it is recognized: the General Gaulle. London where j ' had joined General de Gaulle in March 1941 I learned that this Council had developed a program, ' had adopted March 15, 1944, proposed for a set of liberated France principles and values underlying modern democracy our country 1 . These principles and values, we have TODAY ' Today more than ever need. It behooves us all together to ensure that our society is a society in which we are proud of: not of this company undocumented, expulsions, suspicions against immigrants, not this society where challenges pensions, acquired Security social, not this society where the media are in the hands of the wealthy, all things that we would have refused to endorse if we were the true heirs of the National Council of Resistance. From 1945, after a terrible tragedy, it is an ambitious resurrection which engage the forces present in the Council of Resistance. Remember, then what is created Social Security Resistance as he wished, as the program stated: " A comprehensive plan for Social Security, to ensure that all citizens

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livelihoods, in all cases where they are incapable of the available through work "," a retreat to the old workers end their days with dignity. "The sources ' energy, electricity and gas, coal, the major banks were nationalized. C ' this is what program called again, "the return to the nation of the major means of monopolized production, produced by common sources of energy, wealth of the subsoil, insurance companies and large banks; " the establishment of genuine economic democracy and social involving the eviction of large feudal economic and financial the direction of the economy. " The public interest must prevail over the ' interest Specifically, the fair sharing of the wealth created by the world of work override the power of ' money. Resistance offers " rational organization of the economy to ensure the subordination special interests to the public interest and free from the dictatorship introduced to the professional image of fascist states, and Provisional Government of the Republic it is over. A real democracy needs a free press, and the Resistance knows required by defending "The press freedom, honor and independence with respect to the state, the power of money and foreign influences. That is what turns further orders on the press in 1944. Yet that is what is now in danger. Resistance in calling for "an effective opportunity for all children French to benefit from the instruction the most developed, "without discrimination, yet the reforms proposed in 2008 to go ' against this project. Young teachers, I support the ' action, were up ' to refuse to apply them and they saw their wages amputees as a punishment. They were outraged, have "disobeyed" found these reforms too far from the ideal of the republican school, too service company

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money and not enough developing the creative and critical thinking. C ' is the base of the social conquests of the Resistance is TODAY ' hui questioned 2 . The pattern of resistance is the outrage. We dare say that ' State can no longer cover the costs of these civic action. But how can he miss today's money to maintain and extend these achievements while production of wealth has increased considerably since the Liberation period l ' Europe was ruined? Otherwise, because the power of ' money, so fought with the Resistance, n ' has never been greater, insolent, selfish, with his own servants into the highest echelons of the ' State. Banks are now privatized first show of their conscious dividends and high salaries of their leaders, no interest General. L ' gap between the poorest and richest has never been important, and the race for money, competition, much encouraged. The basic pattern of resistance was indignation. We veterans of resistance movements and fighting forces of Free France, we call the younger generations to live, transmit, inheritance Resistance and its ideals. We say take over, indignant you! The political, economic, intellectual and all Company shall not resign or be intimidated by the current international dictatorship of financial markets that threatens the peace and democracy. I wish you all, to each of you to have your design indignation. Is invaluable. When something as unworthy you j ' I was outraged by the Nazis, then one becomes an activist, strong and committed. We joined the stream of history and the mainstream of the ' history must be continue through each. And this trend is towards more justice, more freedom but not this freedom of uncontrolled fox in the henhouse. These rights, including the Universal Declaration drafted the program in 1948,

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are universal. If you meet someone ' No one who ' will not receive, pity him, help him to conquer them. Two visions of the ' History When I try to understand what caused fascism, which caused we have been invaded by him and by Vichy, I tell myself that the wealthy, with their selfishness, have been terribly afraid of the Bolshevik revolution. They have been guided by their fears. But if TODAY ' Today as Then, a vocal minority stands, this will suffice, we will leaven so that the dough rises. Admittedly, ' experience ' a very old like me, born in 1917, differs from the experience of young people today. I often asks college teachers the opportunity to intervene to their students, and I tell them: you don ' not have the same reasons obvious committing. For us, resist, c ' was not to accept l ' German occupation, the defeat. It was relatively simple. Simple as what followed, decolonization. Then the war Algeria. It was that Algeria became independent, it was obvious. As for Stalin, we all applauded the victory of the Red Army against the Nazis in 1943. But even if we had knowledge of the great Stalinist trials of 1935, and even whether to keep an ear open counterbalance to communism for American capitalism, the need to oppose this intolerable form of totalitarianism s ' was an obvious move. My long life has given me a succession reasons to be indignant. These reasons are born less than an emotion will d ' commitment. The young that I Normale ' was there was very marked Sartre, a senior classmate. Nausea, The Wall, not L ' Being and None were very important in shaping my thinking. Sartre taught us to say: "You are responsible as Indira- viduals. "He was a libertarian message. The responsibility for ' man can s ' in hand or power or a god. Instead, we must

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engage on behalf of its responsibility as a human. When I went to the École normale rue d'Ulm, Paris, in 1939, I entered it as a fervent disciple of the philosopher Hegel, and I followed the Seminar Maurice Merleau-Ponty. His teaching explored concrete experience, that of the body and its relationship with the meaning, singular plural great deal of sense. But my natural optimism, which means that everything that is desirable or possible, I was rather to Hegel. L ' Hegelianism interprets the long history of humanity as having a meaning: c ' is freedom of ' man progressing step by step. History is made of successive shocks is taken into account of challenges. The history of society progresses, and after, the man having reached its full freedom, we have the democratic state its ideal form. There are of course another conception of ' history. Progress made by freedom, competition, the race "ever", this may be experienced as a destructive hurricane. Thus represents a friend of my father, the man who shared with him the task of translate into German In Search of Lost Time by Marcel Proust. C ' is the German philosopher Walter Benjamin. He pulled a message pessimistic ' an array of Swiss painter Paul Klee's Angelus Novus where the figure of ' angel opens his arms as if to contain and repel a storm that ' he identified with progress. Benjamin who committed suicide in September 1940 to escape Nazism, the sense of history is the irresistible path of disaster in disaster. Indifference: the worst attitude True, the reasons may seem to be indignant TODAY ' Today less net or the world too complex. Who controls, who decides? It is not always easy to distinguish between all the currents that we govern. We no longer dealing with a small elite that we clearly understand the actions. C ' is a vast world,

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we feel that it is interdependent. We live in an inter connectivity as yet none has ever existed. But in this world, Some things unbearable. To see this, we must look, search. I tell young people: Looking for a bit, you'll find. The worst attitude is indifference, saying "I n ' There can not, I'm doing. " By having this, you lose one of the components which is essential in humans. One of the essential components: the Faculty of outrage and commitment that is the consequence. We can already identify two major challenges: 1. L ' huge gap between the very poor and very rich and which continues to grow. This is an innovation of the twentieth century `and` XXI. The very poor in the world today earn just two dollars per day. We can not let that gap widen further. This statement alone should generate commitment. 2. Human rights and the rule of the planet. I had the chance after Liberalisation of being involved in drafting the Universal Declaration of Human Rights adopted by the United Nations, 10 December 1948 in Paris at the Palais de Chaillot. It's under Chief firm Henri Laugier, Assistant Secretary General of the UN, and Secretary of the Commission on Human Rights ' man j ' ai, with ' others, been induced to participate in the drafting of this declaration. I can not forget, in its development, the role of René Cassin, curator National Justice and Education, Government of Free France, in London in 1941, which was Nobel peace in 1968, nor that of Pierre Mendes France in the Economic and Social Council to whom the texts that we developed were subjected before being considered by the Third Committee of the ' General Assembly, responsible for matters Social, Humanitarian and Cultural Committee. She had fifty-four Member States at the time, UN, and I assured the secretariat. René Cassin is that we have the term "rights

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universal "and not" international "as suggested by our friends Anglo-Saxon. For there is much at stake at the end of the War World: emancipate themselves from the threats posed to Totalitarianism humanity. For s ' by emancipate must ensure that the Member States United Nations undertakes to respect these universal rights. It is a way defeat the argument of full sovereignty that a State may assert while engaging in crimes against humanity on its soil. This was the If Hitler considered himself his own master and allowed to cause genocide. The Universal Declaration owes much to the revulsion Universal against Nazism, fascism, totalitarianism, and even, by our presence, the spirit of the Resistance. I felt the need to quickly, do not be fooled by the hypocrisy there was in the ' Membership proclaimed by the victors in these values that not all had intended to promote fair, but we were trying their impose 3 . I can not resist the urge to quote Article 15 of the Declaration Universal Human Rights, ' Rights: "Everyone has the right to nationality "and Article 22:" Everyone, as a member of the society has the right to social security and is entitled to the satisfaction of economic, social and cultural rights indispensable for dignity and the free development of his personality, thanks to the efforts National and international cooperation, taking into account the ' organization and resources of each country. And if this statement has a scope declarative, not legal, it has nevertheless played a role powerful since 1948, we saw colonized s ' in their grasp independence struggle, she has stocked in their minds for battle freedom. I note with pleasure that ' in recent decades have increased non-governmental organizations, movements social as ATTAC (Association for the Taxation of Transactions

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financial), FIDH (International Federation of Human Rights) Amnesty ... who are acting and performing. It is obvious that to be effective TODAY ' Today, we must act in a network, take advantage of all means modern communication. For young people, I say look around you, you will find themes that justify your outrage - the treatment made to immigrants, undocumented migrants, Roma. You will find situations concrete that lead you to give play to strong citizen action. Seek and ye shall find! My indignation about Palestine Today, my biggest outrage for Palestine, the band Gaza, the West Bank. This conflict is the source of indignation. He must read the report of September 2009 Richard Goldstone Gaza, in which the South African judge, Jewish, Zionist who even said, accuses Israel of committing "acts amounting to war crimes and perhaps in some circumstances, crimes the cons ' humanity "during its operation" Cast Lead " which lasted three weeks. I myself returned to Gaza in 2009, where j ' I was able to enter with my wife through our diplomatic passports in order to ' study firsthand what the report said. The people who accompanied us n ' have not been allowed into the Gaza Strip. There and in the West Bank. We also visited the Palestinian refugee camps set up in 1948 by ' UN agency, UNRWA, where more than three million Palestinians from their land by Israel are waiting for a Return increasingly problematic. As for Gaza, c ' is a prison open for a million and half Palestinians. A prison where they s ' organize to survive. More than the physical destruction like the Red Crescent hospital in Cast Lead is the behavior of Gazans, their patriotism, their love of the sea and beaches, their constant concern for the welfare of their children,

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countless, laughing, that haunt our memory. We were impressed by their clever way to deal with all shortages imposed on them. We saw them make the fault cement bricks to rebuild thousands of homes destroyed by tanks. We confirmed that there had been four miles hundred dead - women, children and old included in the camp Palestinian - during this operation " Cast Lead "by Israeli army against only fifty wounded Israelis. I sharing the findings of South African judge. That Jews could commit themselves to war crimes, it is unbearable. Alas, l ' History gives little ' Examples of people who learn from their own history. I know that Hamas won the recent parliamentary elections n ' has unable to avoid being sent rockets on Israeli towns in response to the situation of isolation and blockade in which Gazans are. I obviously think that terrorism is unacceptable, but we must recognize that when you are busy with military means infinitely superior to yours, the popular reaction can not be non-violent. Is it used to Hamas ' send rockets on Sderot ? The answer is no. It does not help its cause, but we can explain this gesture by ' exasperation of Gazans. In the concept of exasperation, he need to understand violence as a regrettable conclusion unacceptable situation for those affected. So we can that terrorism is a form of ' exasperation. And that frustration is a negative term. It should not be asper former, it be es-operate. The exasperation is a denial of hope. It is understandable, I would almost say it is natural, but so far it did ' is not acceptable. Because that ' it does not provide the results that may eventually produce hope.

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Nonviolence, the path we must learn to follow. I am convinced that ' future belongs to non-violence, reconciliation of different cultures. This is the way that humanity must cross the next step. And, I agree with Sartre, we can not excuses for terrorists who throw bombs, they can understand. Sartre wrote in 1947: "I accept that violence in any form it manifests itself is a failure. But it is an inevitable failure because we are in a world of violence. And it is true that the use of violence is violence that is likely to perpetuate it is true c ' is ' the only way to stop 4 . "What j ' would add that non-violence is a safer way to stop it. We can not support terrorists as Sartre ' made on behalf of this principle Algeria during the war or during the attack on the Munich games in 1972, committed against Israeli athletes. This is not efficient and Sartre himself eventually wonder at the end of his life on the meaning of terrorism and to question its rationale. Say "violence is not effective, "c ' is far more important than whether we should condemn or not those who s ' to deliver. Terrorism is not effective. In the concept efficiency, we must hope nonviolent. If there is a hope violent is in the poetry of Guillaume Apollinaire: "What hope is violent "no politics. Sartre, in March 1980, three weeks his death, said: "We must try ' explain why the world Now, that is horrible, is a long time in the develop- historical development, that ' Hope has always been a strength Dominant revolutions and insurgencies, and how I feel yet the ' hope like my conception of the future 5 We must understand that violence turns his back on hope. He must be prefer the ' expectancy, the ' expectancy of non-violence. C ' is the path we must learn to follow. From either side of

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oppressors of the oppressed, we must come to a negotiation to remove the ' oppression; c ' is thereby no longer have terrorist violence. Therefore we must not let accumulate too much hate. The message ' Mandela a, d ' a Martin Luther King finds its relevance in a world which has exceeded the comparison of ideologies and totalitarianism conqueror. This is a message of hope in modern societies' capacity to overcome conflicts by mutual understanding and patience vigilant. To so, it must be based on rights, violation of which, what that ' in is the ' author, should provoke our indignation. There is not compromise on these rights. For a peaceful uprising J ' have noted - and I'm not the only - government response Israel faces the fact that every Friday citizens Bil'id will, without throwing stones without using force, to the wall against which they protest. The Israeli authorities have called the march of "non-violent terrorism." Not bad ... It should be Israel to a terrorist nonviolence. It is especially be embarrassed by the efficiency of non-violence that is committed to ensuring it raises the support, understanding, support of all those who in the world are the enemies of oppression. Productivist thinking, driven by the West, led the world in a crisis that we must avoid a radical break with the headlong rush of "growing" in the financial field but also in science and technology. It is high time for the sake of ethics, justice, sustainable balance become prevalent. For the most serious risks we face. They can put an end to the human adventure on a planet that ' it can make it uninhabitable for ' man.

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But it remains true that d ' Important progress has been made since 1948: decolonization, the end of apartheid, the destruction of the Soviet empire, the fall of the Berlin Wall. For cons, the first decade of XXI e century were a period of decline. This fall, I explained in part by the U.S. President George Bush, September 11, and disastrous consequences as ' have drawn the United States, as this military intervention in Iraq. We had this economic crisis, but we did not further initiated a new policy development. Similarly, the Copenhagen summit the cons No global warming ' no permit ' engage in genuine policy for protecting the planet. We are at a threshold between the horrors of the first decade and opportunities following decades. But hopefully, always hope. The previous decade, the 1990s, had been of great progress. The UN has been able to convene conferences like those of Rio on Environment in 1992, that of Beijing on Women in 1995 and in September 2000, at the ' initiative of Secretary General United Nations, Kofi Annan, the 191 member countries adopted the statement on the "Eight Millennium Development" by which they undertake to halve poverty in the world ' 2015. My great regret, c ' is that neither Obama nor l ' EU has so far been manifested with what should be their contribution to a constructive phase, s ' pressing the values fundamental. How to conclude the call to s ' indignant? Recalling further that, the occasion of the sixtieth anniversary of the National Programme Resistance, we said March 8, 2004, we veterans Resistance movements and fighting forces of Free France (1940-1945), although that "Nazism was defeated, thanks to the sacrifice of our brothers and sisters of the Resistance and the UN against barbarism

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Fascist. But this threat n ' has not totally disappeared and our anger the cons ' Injustice is still intact 6 . No, this threat has not disappeared completely. Also, call us always "a real insurrection against the peaceful means mass communication that do not offer a horizon for our Youth that mass consumption, the contempt for the weakest and culture, ' generalized amnesia and excessive competition of all against all. " To those who will make the twenty-first century, we say with our affection : "CREATE is to resist. RESIST IS TO CREATE. "

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NOTES Created a clandestine May 27, 1943 in Paris by representatives of eight major resistance movements, the two major unions Pre-war: the CGT, CFTC (French Confederation of Workers Christians) and the six main political parties of the Third Re- public including the PC and the SFIO (Socialist), the National Council of Resistance (CNR) held its first meeting on 27 May under the chairmanship Jean Moulin, de Gaulle's delegate who wanted to establish this Council to make more effective the fight against the Nazis, strengthen its own legitimacy against allies. De Gaulle instructed the board to develop a government program in anticipation of the release of France. This program was the subject of several back and forth between the CNR and Government of Free France, both in London and Algiers before to be adopted March 15, 1944, in plenary session by the NRC. This program is solemnly handed to General de Gaulle by the CNR August 25, 1944 at the Hotel de Ville in Paris. Note that the Ordinance press was promulgated on 26 August. And one of the main Editors of the program was Roger Ginsburg, the son of a rabbi in Alsace , So under the pseudonym Pierre Villon, he was Secretary General of National Front for the independence of France, resistance movement created by the French Communist Party in 1941, and represents what movement within the CNR and its permanent office. 2 According to union estimates, we went from 75 to 80% of income as the amount of pensions to about 50%, this being an order of magnitude. Jean-Paul Domin, lecturer in Economics at the Uni- University of Reims Champagne-Ardennes, in 2010, writes for the Institute European Waged a note on "complementary health insurance shut up. " He reveals how access to additional quality now a privilege due to the position in employment, as most

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brittle fault waive care insurance and complementary l ' importance of remaining unpaid, and that the problem is to have salary is more support for social rights - the central point of orders of 4 and 15 October 1945. They enacted the Social security and its management placed under the dual authority representatives of workers and the state. Since the reforms Juppe 1995 imposed by ordinance, then the law Douste Blazy (Doctor training), 2004, is the only state that handles Social Security. It eg the Head of State appoints by order of the Chief the National Insurance Fund (NHIF). They are no longer as the aftermath of the liberation of trade unionists who are head of primary funds, but the county government, through the prefects. Workers' representatives take no more than a role advisor. 3 The Universal Declaration of Human Rights was adopted on 10 December 1948 in Paris by the UN General Assembly by 48 states out of 58 members. Eight abstained: South Africa, to because of apartheid that the statement of fact condemned; Saudi Arabia, even, because of gender equality; Union Soviet Union (Russia, Ukraine, Belarus), Poland, Czechoslovakia, Yugoslavia, saying in turn that Statement did not go far enough in taking into account the rights economic and social rights and the issue of minority rights, we Note however, that Russia in particular objected to the proposal Australia to create an International Court of Human Rights responsible for examining petitions addressed to the UN; must here noted that Article 8 of the Declaration introduced the principle of using individual against a state for violation of fundamental rights; this principle would find its application in Europe in 1998, with

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 creation of a European Court of Human Rights permanent guarantees the right to appeal to more than 800 million Europeans. 4 Sartre, J.-P., "State of the writer in 1947 o, in Situations II, Paris Gallimard, 1948. 5 Sartre, J.-P., "Now the hope ... (III) "in Le Nouvel Observateur, 24 March 1980. 6 The signatories of the Appeal of March 8, 2004 are: Lucie Aubrac Raymond Aubrac, Henri Bartoli, Daniel Cordier, Philippe Dechartre Guingouin Georges, Stéphane Hessel, Maurice Kriegel-Valrimont, Lise London, Georges Seguy, Germaine Tillion, Jean-Pierre Vernant, Maurice Voutey.

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POSTSCRIPT Stéphane Hessel was born in Berlin in 1917 to ' a Jewish father writer translator, Franz Hessel, and a painter mother, music lover, Helen Grund, a writer herself. S parents ' set in Paris in 1924, with their two children, Ulrich, the eldest, and Stephane. Through the middle family, both attending the Parisian avant-garde, including Dada Marcel Duchamp and the American sculptor Alexander Calder. Stéphane entered the ' ENS Rue d'Ulm in 1939, but the War interrupted his studies. French citizen since 1937, it is mobilized and knows the phoney war, Marshal Petain sees the sell off French sovereignty. In May 1941, he joined the Free France of General de Gaulle in London. He works in the Office of cons-espionage, Intelligence and Action (BCRA). By night's end of March 1944, he was landed clandestinely in France under the codename "Greco" with mission to contact the various networks in Paris, of find new places ' radio show to go to London information collected for the Allied landings. July 10 1944, he was arrested by the Gestapo in Paris on denunciation: "We do not pursue someone ' one who spoke under torture, "he wrote in a memoir, Dancing with the century in 1997. After interrogation under torture - the ' test including the bathtub, it destabilizes her torturers in their speaking German, language native - he was sent to Buchenwald, Germany, August 8 1944, so only a few days of the liberation of Paris. On the eve of being hanged, he succeeds in extremis to exchange his identity against that of a French died of typhus in the camp. Under its new name, Michel Boitel, milling business, he was transferred to Camp Rottleberode near the ' plant undercarriage of German bombers, the Junkers 52, but fortunately - his eternal luck - it is paid the accounting department. He escaped. Recaptured, he was moved to Camp

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Dora, where are made the V-1 and V-2 rockets with which the Nazis are still hoping to win the war. Assigned to the penal company, he escaped again and this time for good; Allied troops move closer to Dora. Finally, it goes back to Paris, his wife Vitka - the mother of his three children, two boys and a girl. This life returned, it had to incur, "wrote the former of Free France, in his memoirs. In 1946, after passing the entrance examination to the Ministry of Foreign Affairs, Stéphane Hessel became a diplomat.His first job was at the UN where, that year, Henri Laugier, Assistant Secretary General of the UN and secretary of the Commission on Human Rights, offered him to be his cabinet secretary. It is for this reason that Stéphane Hessel joined the commission to develop what will be the Universal Declaration of Human Rights. It is considered that its twelve members, six have played a more vital role: Eleanor Roosevelt, widow of President Roosevelt died in 1945, committed feminist, she chairs the Committee; Dr. Chang (China Chiang Kaïchek and not Mao):Vice-Chairman of the Committee, he stated that the Declaration should not only be a reflection of Western ideas, Charles Habib Malik (Lebanon), Rapporteur of the Commission, often described as the driving force, "with Eleanor Roosevelt, René Cassin (France), jurist and diplomat, president of the Consultative Commission on Human Rights with the Quai d'Orsay, we owe him the writing of several articles and have been able to cope with the fears of some states, including France to see their colonial sovereignty threatened by this statement - it was a challenging and interventionist conception of Human Rights, John Peters Humphrey (Canada), lawyer and diplomat, a close associate of Laugier, he wrote the first draft of a document 400 pages; finally Stéphane Hessel (France), a diplomat, chief of staff of the Laugier, the youngest. We see how the spirit of FrancePage 1919 blew open on this committee. The Declaration was adopted December 10, 1948 by the United Nations at the Palais de Chaillot in Paris. With the influx of new staff, many of whom covet a job that pays well, "isolating the marginal seeking ideal 'by own review of Hessel in his memoirs, he left the UN. It is assigned by the Ministry of Foreign Affairs to represent France at international institutions, the opportunity to recover temporarily, as such, New York and the United Nations. During the war in Algeria, he argues in favor of Algerian independence. In 1977, with the complicity of the Secretary General of the Elysee, Claude Brossolette, son of Pierre, formerly head of the BCRA, he was offered by President Valery Giscard d'Estaing, the post of ambassador to the UN,Geneva. He does not hide that, of all French statesmen, that he 's feeling is the closest Pierre Mendes France, known in London at the time of Free France and returned to the United Nations in 1946 in New York, where it represents France in the Economic and Social Council. He will have his consecration as a diplomat "this change in the government of France, he writes, is that the arrival of François Mitterrand at the Elysee," in 1981. "She was a diplomat rather narrowly specialized in multilateral cooperation, reached two years of his retirement, Ambassador of France. He joined the Socialist Party. "I wonder why? First response: the shock of the year 1995. I did not imagine the French rather imprudent to bring Jacques Chirac to the presidency. "With now a diplomatic passport, he went with his new wife in 2008 and 2009 in the Gaza Strip and returning shows on the painful lives of Gazans. "I'm always on the side of the dissidents, said he at the same time. "It is well that one who speaks here in 93 years.

Be seeing you.





The Companies Who Support Censoring The Internet | Techdirt

The Companies Who Support Censoring The Internet | Techdirt

from the censorship-is-good-for-business dept

A group of companies sent a letter to to Attorney General Eric Holder and ICE boss John Morton today (with cc's to VP Joe Biden, Homeland Security boss Janet Napolitano, IP Czar Victoria Espinel, Rep. Lamar Smith, Rep. John Conyers, Senator Patrick Leahy and Senator Charles Grassley), supporting the continued seizure of domain names they don't like, as well as the new COICA censorship bill, despite the serious Constitutional questions raised about how such seizures violate due process and free speech principles. While many reporting on this letter refused to actually post a copy of the full letter, kudos to Greg Sandoval over at News.com for doing so (full text also included after the jump on this post).

The companies try to present a united front that censoring the internet is a good thing. It includes the usual suspects of Viacom and NBC Universal on the content side and Louis Vuitton and Tiffany on the counterfeiting side, but there are a few other interesting names: such as Monster Cable (never met an IP law it didn't want to abuse, apparently), the NBA, MLB and NFL (sports leagues unite in censorship!) as well as Voltage Pictures, famous for suing thousands of fans for downloading Hurt Locker. Activison, which has become increasingly aggressive on IP issues lately is on the list as well, of course. Anyway, here's the full list of companies that support censoring the internet, because they're too lazy to compete in the marketplace or innovate when that market changes:

  • Nike - Beaverton, OR
  • Achushnet - Fairhaven, MA
  • Curb Music Publishing - Nashville, TN
  • NBC Universal - New York, NY
  • Viacom - New York, NY
  • Callaway - Carlsbad, CA
  • Cleveland Golf - Huntington Beach, CA
  • Rosetta Stone - Arlington, VA
  • Activision - Santa Monica, CA
  • Adidas Group - Portland, OR
  • Xerox - Norwalk, CT
  • Hastings Entertainment, Inc. - Amarillo, TX
  • Fortune Brands - Deerfield, IL
  • Coty Inc. - New York, NY
  • EDGE Entertainment Distribution - Streetsboro, OH
  • Oakley, Inc. - Foothill Ranch, CA
  • PING - Phoenix, AZ
  • Louis Vuitton - New York, NY
  • D'Addario and Company - Farmingdale, NY
  • Monster Cable Products, Inc. - Brisbane, CA
  • Tiffany and Co. - New York, NY
  • Farouk Systems, Inc. - Houston, TX
  • Beam Global - Deerfield, IL
  • Chanel USA - New York, NY
  • True Religion Apparel, Inc. - Vernon, CA
  • Concord Music Group - Beverly Hills, CA
  • Village Roadshow Pictures - Beverly Hills, CA
  • National Basketball Association - New York, NY
  • National Football League - New York, NY
  • The Collegiate Licensing Company/IMG College - Atlanta, GA
  • Anderson Merchandisers - Amarillo, TX
  • Trans World Entertainment Corporation - Albany, NY
  • Timberland - Stratham, NH
  • Major League Baseball - New York, NY
  • Lightening Entertainment/Mainline Releasing - Santa Monica, CA
  • Sierra Pictures - Beverly Hills, CA
  • Voltage Pictures LLC - Los Angeles, CA
  • Worldwide Film Entertainment LLC - Westchester, CA
  • Nu Image, Inc. - Los Angeles, CA
  • Burberry Limited - New York, NY
  • Big Machine Records - Nashville, TN
  • The Little Film Company - Studio City, CA
  • Columbia Sportswear Company - Portland, OR
These companies are clearly trying to protect their own business interests, but it seems reasonable to let them know that you don't appreciate them seeking to censor the internet. If you haven't been following this story, and want to understand the details, we've discussed why COICA is all about censoring websites without due process and in violation of the First Amendment. We've also discussed how the ongoing (pre-COICA) domain name seizures were riddled with serious errors that appear to violate the law as well, including seizing the domains of blogs regularly used and recognized within the music industry based on evidence involving songs sent by the record labels themselves.

And, of course, none of this is to say that violating copyright or trademark laws should be allowed. But we have a system to deal with such things: you file a lawsuit, you have an adversarial hearing in a courtroom (i.e., due process) and you let both sides present their case. COICA and these domain seizures look to avoid all of that. And that's a big, big problem. That these companies would support such censorship and leapfrogging over due process suggests that they're companies not worth doing business with.
We run companies large and small that represent diverse aspects of America's intellectual property community. While our employees live in different regions of the country, and work to produce a variety of goods and services, they have several important things in common - they work hard, they are committed to quality and innovation and they welcome competition. However, allowing others to unfairly compete by stealing the ideas, innovations and intellectual property rights created by our employees cannot be tolerated. This theft diminishes our ability to keep and create jobs, and makes it far more difficult to attract the capital needed to invest in new products and services. In order to protect our free enterprise system, and the standard of living it has contributed to our nation, it is critical that we multiply our efforts to identify and punish the criminals who steal what we create and produce.

Thus, we appreciate the effort and energy behind Operation in Our Sites. The actions announced on November 29, 2010 once again demonstrated that, just as in the physical world, prosecutors and courts can judiciously assess evidence and distinguish between legitimate businesses and criminal enterprises that flout the law and profit from the ingenuity of others. We believe that the online marketplace can only work for consumers and creators if there is respect for property rights and the rule of law - and urge you to continue to act against the kinds of domains that you have targeted. Unfortunately, there are far too many sites stealing from our businesses but we believe that your efforts will drive consumers to the many legitimate online ventures and services that we have worked hard to foster and support.

We encourage you to work with your colleagues in the Administration and the Congress toward enactment of the principles central to S. 3804 - the Combating Online Infringement and Counterfeits Act. The legislation crafted by Senators Leahy and Hatch was unanimously approved by the Senate Judiciary Committee and will undoubtedly be reintroduced this congress. The proposal expounds upon the law enforcement techniques at the heart of "Operation In Our Sites" and will ensure that rogue sites cannot evade U.S. jurisdiction by escaping offshore to foreign-based registrars, registries and country codes in order to peddle stolen American intellectual property back into the U.S. market. In addition, the Leahy-Hatch proposal provides an entirely new level of protection for U.S. rights holders by establishing the legal framework necessary to disrupt the business models of the illicit, offshore sites by starving them of the financing, advertising and access to consumers upon which they depend. The carefully balanced measure would allow American law enforcement officials and U.S. courts to deny thieves the ability to use the Internet to enter the U.S. market and undermine our businesses while reaping financial gain for themselves.

We hope that you will continue dedicating resources to Operation in Our Sites and work toward the Obama Administration's endorsement of the Leahy-Hatch legislation.


November 28, 2010

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).


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 …

Footnotes

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


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