Dear Mr. Hope & Change--It's The People and the Economy, Stupid!

In This Issue:

- Break up the Big Banks!
- Simon Johnson is "Intellectual of the Year"
__________________________

For all the good links in the following article, please see:
http://baselinescenario.com/2009/12/17/paul-volcker-picks-up-a-bat/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

Paul Volcker Picks Up A Bat
Posted: 17 Dec 2009 04:15 AM PST

For most the past 12 months, Paul Volcker was sitting on the policy sidelines. He had impressive sounding job titles – member of President Obama’s Transition Economic Advisory Board immediately after last November’s election, and quickly named to head the new Economic Recovery Board.

But the Recovery Board, and Volcker himself, have seldom met with the President. Economic and financial sector policy, by all accounts, has been made largely by Tim Geithner at Treasury and Larry Summers at the White House, with help from Peter Orszag at the Office of Management and Budget, and Christina Romer at the Council of Economic Advisers.

With characteristic wry humor, Volcker denied in late October that he had lost clout within the administration: “I did not have influence to start with.”

But that same front page interview in the New York Times contained a well placed shock to then prevailing policy consensus.

Volcker, legendary former chairman of the Federal Reserve Board with much more experience of Wall Street than any current policymaker, was blunt: We need to break up our biggest banks and return to the basic split of activities that existed under the Glass-Steagall Act of 1933 – a highly regulated (and somewhat boring) set of banks to run the payments system, and a completely separate set of financial entities to help firms raise capital (and to trade securities).

This proposal is not just at odds with the regulatory reform legislation then (and now) working its way through Congress; Volcker is basically saying that what the administration has proposed and what Congress looks likely to enact in early 2010 is essentially — bunk.

Speaking to a group of senior finance executives, as reported in the Wall Street Journal on Monday, Volcker made his point even more forcefully. There is no benefit to running our financial system in its current fashion, with high risks (for society) and high returns (for top bankers). Most of financial innovation, in his view, is not just worthless to society – it is downright dangerous to our broader economic health.

Volcker only makes substantive public statements when he feels important issues are at stake. He also knows exactly how to influence policy – he has not been welcomed in the front door (controlled by the people who have daily meetings with the President), so he’s going round the back, aiming at shifting mainstream views about what are “safe” banks. Many smart technocrats listen carefully to what he has to say.

This strategy is partly about timing – and in this regard Volcker has chosen his moment well. The economy is starting to recover, but this process is clearly going to take a while and unemployment will stay high for the foreseeable future. At the same time, our biggest banks are making good money – mostly from trading, not much from lending to small business – and they are lining up to pay very big bonuses.

Not only is this contrast – high unemployment vs. bankers’ bonuses – annoying and unfair, it is also not good economics. Bankers are, in effect, being rewarded for taking the risks that created the global crisis and led to massive job losses. And they are being implicitly encouraged to do the same thing again.

The case for keeping big banks in their current configuration is completely lame. Even if we are lucky enough to avoid another major any time soon, the fiscal costs are enormous and coming right at you (and your taxes).

Now that Paul Volcker has picked up his hammer, he will not lightly set it aside. He knows how to sway the policy community and he knows how to escalate when they don’t pay attention. Expect him to pound away until he prevails.

By Simon Johnson

This is a a slightly edited version of a post that previously appeared on the NYT’s Economix; it is used here with permission. If you would like to reproduce the entire piece, please contact the New York Times for permission.
_____________________

For all the good links in the following article, please see:
http://baselinescenario.com/2009/12/17/move-over-bernanke/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

Move Over, Bernanke
Posted: 17 Dec 2009 04:00 AM PST

Ben Bernanke is Person of the Year. Matt Yglesias has criticism, although he does say it was an appropriate choice. Now, the Time award is meant to recognize newsworthiness, not necessarily exceptional conduct, and it’s hard to deny that Bernanke has been newsworthy. But I think that 2008 was Bernanke’s year, not 2009–that was the year of the real battle to prevent the collapse of the financial system. As far as the crisis is concerned, I would say the face of 2009 has been Tim Geithner–PPIP, stress tests (largely conducted by the Fed, but Geithner was the front man), Saturday Night Live, regulatory “reform,” and so on. But I can see why Time didn’t want to go there. Besides, I’m not sure that the financial crisis was the story of 2009; what about the recession? They’re related, obviously, but they’re not the same thing.

But in real news, Simon was named Public Intellectual of the Year by Prospect Magazine (UK). (This year they seem to have restricted themselves to financial crisis figures; David Petraeus won in 2008.) Over Ben Bernanke, among others. (Conversely, Simon didn’t make Time’s list of “25 people who mattered”–but Jon and Kate Gosselin did, so that’s no surprise.) The article says that Simon “has also done more than any academic to popularise his case: writing articles, a must-read blog, and appearing tirelessly on television,” which sounds about right to me.

Prospect got one thing wrong, though. The article has a cartoon of Simon holding a sledgehammer and towering over a Citigroup in ruins. But no matter how many times you keep taking whacks at Citigroup, it refuses to die. One hundred years from now, maybe people will still be saying there are two common ingredients in all U.S. financial crisis: excess borrowing … and Citibank.

By James Kwak

Hell on Earth

In This Edition:

- Copenhagen Climate "Talks"
- Joe Lieberman, Veterans, & Health Care "Reform"
- Dean: Public Option Essential to Real Health Care Reform
- Simon Johnson on Economic "Reform"
- McCain Leads Senate Effort to Reinstate Glass-Steagall
- U.S. gave up billions in tax money in deal for Citigroup's bailout repayment
________________________

Copenhagen Climate "Talks"

Copenhagen: Only the numbers count – and they add up to hell on earth
Climate Interactive's software speaks numbers, not spin – which is where the true understanding of the Copenhagen summit lies

Bill McKibben

guardian.co.uk, Tuesday 15 December 2009
http://www.guardian.co.uk/environment/cif-green/2009/dec/15/bill-mckibben/print

Climate change activists form the number 350 at the Sydney Opera House in Australia. Photograph: Tim Cole/EPA

The Bella centre is a swirl of chatter, the streets of Copenhagen are a swirl of protest. Depending on what hour you listen to the news bulletin, the UN climate negotiations have "come off the rails" or are "back on track" or have "stalled" or are "moving swiftly". Which is why the only people who really understand what's going on may be a small crew of folks from a group of computer jockeys called Climate Interactive. Their software speaks numbers, not spin – and in the end it's the numbers that count.

First number to know: 350. It's what scientists have been saying for two years is the maximum amount of carbon dioxide we can safely have in the atmosphere, measured in parts per million. Those scientists have been joined by an unprecedented outpouring from civil society: in late October, activists put on what CNN called "the most widespread day of political action in the planet's history," with 5,200 demonstrations in 181 countries, all rallying around that number. Three thousand vigils last weekend across the planet spelled out the number in candles. Thousands of churches rang their bells 350 times on Sunday, and yesterday the World Parliament of Religions, meeting in Melbourne and representing the "largest interreligious gathering on earth" sent an emergency 350 declaration here to Copenhagen.

The second number: 100. That's (roughly) how many countries are backing a 350 target here at Copenhagen. That's more than half the nations in attendance – unfortunately, they're the small, poor ones. But it's amazing to see them, in the face of enormous pressure, keeping the idea of real action alive. Yesterday Mohamed Nasheed, president of the Maldives, spoke to a roaring crowd of thousands: "We know what the laws of physics say: the most important number in the world is 350."

The third number: 4%. That's how much the US is offering to cut its emissions from their 1990 levels by 2020. Scientists tell us that the developed world would need to reduce by at least 40% to get us back on a 350 track, so the American offer is exactly an order or magnitude off. And they're not alone. All the rich countries, not to mention China, are looking to do as little as possible and still escape here with some kind of agreement they can hide behind.

The fourth number – and the most important one. When the folks at Climate Interactive plug in every promise made at these talks (the American offer on the table, the Chinese promise to reduce "energy intensity", the EU pledges, and so on) their software tells them almost instantly how much carbon they would eventually produce. When they hit the button last night, the program showed that by 2100 the world's CO2 concentrations (currently 390) would be – drumroll please – 770. That is, we would live in hell, or at least a place with a similar temperature.

So that's the scorecard. You may hear a lot of happy talk from world leaders over the next few days as they "reach a historic agreement". But that's how it all adds up.

• Bill McKibben is the coordinator of 350.org (http://www.350.org/)

Other Links:
__

[The Elephant in the Climate Change Living Room--Human Population Size & Growth - Chris]

Population control called key to deal
By Li Xing (China Daily)
Updated: 2009-12-10 07:37

http://www.chinadaily.com.cn/china/2009-12/10/content_9151129.htm

COPENHAGEN: Population and climate change are intertwined but the population issue has remained a blind spot when countries discuss ways to mitigate climate change and slow down global warming, according to Zhao Baige, vice-minister of National Population and Family Planning Commission of China (NPFPC) .

"Dealing with climate change is not simply an issue of CO2 emission reduction but a comprehensive challenge involving political, economic, social, cultural and ecological issues, and the population concern fits right into the picture," said Zhao, who is a member of the Chinese government delegation.

Many studies link population growth with emissions and the effect of climate change.

"Calculations of the contribution of population growth to emissions growth globally produce a consistent finding that most of past population growth has been responsible for between 40 per cent and 60 percent of emissions growth," so stated by the 2009 State of World Population, released earlier by the UN Population Fund.

Although China's family planning policy has received criticism over the past three decades, Zhao said that China's population program has made a great historic contribution to the well-being of society.

As a result of the family planning policy, China has seen 400 million fewer births, which has resulted in 18 million fewer tons of CO2 emissions a year, Zhao said.

The UN report projected that if the global population would remain 8 billion by the year 2050 instead of a little more than 9 billion according to medium-growth scenario, "it might result in 1 billion to 2 billion fewer tons of carbon emissions".

Meanwhile, she said studies have also shown that family planning programs are more efficient in helping cut emissions, citing research by Thomas Wire of London School of Economics that states: "Each $7 spent on basic family planning would reduce CO2 emissions by more than one ton" whereas it would cost $13 for reduced deforestation, $24 to use wind technology, $51 for solar power, $93 for introducing hybrid cars and $131 electric vehicles.

She admitted that China's population program is not without consequences, as the country is entering the aging society fast and facing the problem of gender imbalance.

"I'm not saying that what we have done is 100 percent right, but I'm sure we are going in the right direction and now 1.3 billion people have benefited," she said.

She said some 85 percent of the Chinese women in reproductive age use contraceptives, the highest rate in the world. This has been achieved largely through education and improvement of people's lives, she said.

This holistic approach that integrates policy on population and development, a strategy promoting sustainable development of population, resources and environment should serve as a model for integrating population programs into the framework of climate change adaptation, she said.

(China Daily 12/10/2009 page10)

Copyright By chinadaily.com.cn. All rights reserved
__

Regulation, Not the "Free Market," Drives Technological Innovation

US left behind in technological race to fight climate change
A speech by the US energy secretary, Steven Chu, shows how America's unquestioning belief in the free market has held back technological innovation

guardian.co.uk 12/15/09

http://www.guardian.co.uk/environment/georgemonbiot/2009/dec/14/us-technological-race-climate-change/print

I have just been watching the tragic sight of a fallen giant flailing around on its back like a beetle, desperately trying to turn itself over.

The occasion was a speech by the US secretary of energy, Steven Chu. He is, of course, a Nobel physicist, brilliant, modest, likeable, a delightful contrast to the thugs employed by the previous administration. But his speech was, in the true sense of the word, pathetic: it moved me to pity.

Yesterday afternoon in Copenhagen – where the UN climate talks are entering their second week – Professor Chu unveiled what would have been a series of inspiring innovations, had he made this speech 15 years ago. Barely suppressing his excitement,
he told us the US has discovered there is great potential for making fridges more efficient, and that the same principle could even be extended to lighting, heating and whole buildings. The Department of Energy is so thrilled by this discovery that it has
launched a programme to retrofit homes in the US, on which it will spend $400m a year. . . . .
http://www.guardian.co.uk/environment/georgemonbiot/2009/dec/14/us-technological-race-climate-change/print
__

Copenhagen police release hundreds of detained activists
Only 13 protesters remain in custody after nearly 1,000 arrests during demonstrations at climate change summit
http://www.guardian.co.uk/environment/2009/dec/13/copenhagen-protesters-freed/print
__

High-profile activist's arrest fuels fears of police crackdown in Copenhagen
Climate Justice Action spokesman to face charges, as Danish
police prepare for mass protests at Copenhagen's Bella centre
Bibi van der Zee
guardian.co.uk, Tuesday 15 December 2009

http://www.guardian.co.uk/environment/2009/dec/15/danish-police-mass-protest-copenhagen/print

A high-profile climate activist was arrested ahead of tomorrow's major protests planned outside the Copenhagen climate summit, fuelling anxiety about how the Danish authorities are policing demonstrations.

Tadzio Mueller, a spokesman for the umbrella group Climate Justice Action (CJA), was arrested today by plainclothes police as he left the Bella centre, where the official climate talks are taking place. The police are holding him at the Retorvej detention
centre, and he will be charged in court tomorrow morning. The police refused to say what charges will be brought. . . . .
______________________

Joe Lieberman, Veterans, & Health Care "Reform"
__

Joe Lieberman and the Health Care Train Wreck
Tuesday 15 December 2009
by: William Rivers Pitt, t r u t h o u t | Op-Ed

http://www.truthout.org/1215098?print

When last we heard from Sen. Joe Lieberman of Connecticut, he was throwing sand into the gears of the Democratic push for health care reform by declaring he would filibuster any legislation containing the so-called public option. "I feel so strongly about the creation of another government health insurance entitlement," said the senator back in November. "The government going into the health insurance business - I think it's such a mistake that I would use the power I have as a single senator to stop a final vote."

This pronouncement came at the same time as word got out that Lieberman was also planning to actively campaign for GOP candidates during the 2010 midterms, further undercutting his erstwhile party's hold on the majority in Congress."There's a hard core of partisan, passionate, hardcore Republicans," he said at the time. "There's a hard core of partisan Democrats on the other side. And in between is the larger group, which is people who really want to see the right thing done, or want something good done for this country and them - and that means, sometimes, the better choice is somebody who's not a Democrat."

For some reason, these twin insults did not motivate the Democratic Congressional leadership to expunge this hypocritical cretin from their ranks. Lieberman kept his committee chairmanship and was not even mildly censured by his colleagues. One month later, the decision to ignore his brazen disregard for his colleagues has come back to bite us all, for Mr. Lieberman has once again elbowed his way into the center of the health reform debate, and with a vengeance. "Mr. Lieberman threatened on national television to join the Republicans in blocking the health care bill, President Obama's chief domestic initiative," reported The New York Times on Tuesday. "Within hours, he was in a meeting at the Capitol with top White House officials. And on Monday night, Democratic senators emerged from a tense 90-minute closed-door session and suggested that they were on the verge of bowing to Mr. Lieberman's main demands: that they scrap a plan to let people buy into Medicare beginning at age 55, and scotch even a fallback version of a new government-run health insurance plan, or public option."

This turn of events is sickening and appalling on a couple of different levels.

First, of course, is the shameless reality that is Mr. Lieberman himself. During his 2004 presidential run, and again during his 2006 Senate campaign, Lieberman actively supported the public option's inclusion in any health care reform, and specifically supported the expansion of Medicare. As late as this past September, Lieberman continued to support such an expansion, as reported by The Connecticut Post. "As to how 47 million uninsured will afford coverage," said The Post, "Lieberman said only 12 million don't have insurance because they cannot afford it. By allowing citizens who are not eligible for Medicare or Medicaid to buy in for a rate below the private market, the government can extend coverage to more of those who are currently uninsured, he said."

That was then, and this is now. In one of the most astounding examples of political flip-floppery, Lieberman opened this week by declaring himself dead-set against the very health care reform policies he once championed, and once again announced his intention to don a Republican cloak and tear up the Democrats' legislative efforts. Again.

Why? One would have to be deep into a severe state of personal denial to believe Lieberman has legitimate concerns about the impending health care legislation, given the fact that he very recently supported the exact provisions he now wants removed or destroyed. The only sensible explanation would seem to be that Lieberman is actively needling the Democratic leadership, and has become such an obnoxious obstructionist only to keep his name in the news. Josh Marshall of Talking Points Memo explains the situation, and what it means going forward:

The key issue senate Democrats now have in dealing with Joe Lieberman isn't his position on the Medicare Buy-In. They need to confront the problem that Lieberman isn't negotiating in good faith. No surprise that Republicans are giddy with what a problem he's creating for Harry Reid & Co. But in my conversations with them, it's as clear to them as it is to anyone else that he's now basically mocking his Democratic colleagues by moving the goal posts every time a new agreement is struck.

This puts the Democrats in an extremely difficult, politically untenable position. Yes, they need 60 votes. But they're not going to be able to hang on to Lieberman's vote long enough to get the bill passed. That now seems unquestionably clear. People who say that the Dems should just move to reconciliation don't necessarily realize the difficulties involved - either procedurally or politically, in terms of losing even more Democratic votes. Personally, I'd like to see them try it. But I don't know if it's possible.

Until a couple days ago I was close to certain a health care bill would pass. I still feel relatively confident one will simply because the Dems just don't have any choice but to pass one. Once it is passed, if it is, it's definitely time for the Democratic caucus to strip Lieberman of all the benefits he receives as a member of the Democratic caucus. But that doesn't accomplish anything at the moment. The only path I can see for the Dems is that they need to try to put 60 votes together with Sen. Snowe. Yes, that sounds crazy to me too. But I think she actually has a set of policy priorities that could be met. I don't think that's true with Lieberman. So further negotiating just means more game-playing.

The solution to all this, one would think, would be for the Democratic leadership in Congress to wrap Lieberman in bright red wrapping paper, slap on a bow, and ship him across the aisle to his ideological compatriots in the GOP as an early Christmas present. Strip him of his leadership position, show him the door, and publicly denounce him as nothing more than a stinking chunk of cholesterol clogging up the arteries of progress.

But no. Of course that isn't going to happen. Instead, Democrats appear poised to once again knuckle under to this fraud and further denude what has already become a half-a-loaf bill. According to several sources, Rahm Emmanuel and the White House are actively pressuring the Democratic leadership in Congress to give Lieberman whatever he wants in order to pass some form of health reform legislation, no matter how ragged, damaging and useless the final product may turn out to be.

The Senate won't vote on health care reform until next week, and the process has changed course two dozen times already, so the outcome of this latest idiot eruption is far from certain, but the writing does appear to be on the wall this time around. Joe Lieberman doesn't give a tinker's damn about the people he represents, the party that coddles him, his own positions on key issues or anything else beyond getting his mug in front of television cameras in the guise of someone who actually matters. The Obama administration is once again moonwalking away from doing the right thing on this issue, and the jellyfish pond that is Congress appears poised to do what jellyfish do: float, flop, flounder and drift with the scum in this rising tide.

In short, this whole thing is about to become a train wreck of galactic proportions. Stay tuned.
__

135,000 Uninsured Americans Will Die Before Health Reform Takes Effect, Analysis Finds

Over 6,600 Uninsured Veterans Will Die by 2013: Estimate

By Brad Jacobson

http://rawstory.com/2009/12/135000-uninsured-americans-die-health-reform-takes-effect-study/

December 15, 2009 "Raw Story" -- If Democrats manage to pull off efforts to reform the US healthcare system and ensure coverage for millions who are currently without insurance, the new system -- by design -- will likely still leave tens of thousands to die without insurance before reforms kick in.

A Raw Story analysis, based on a recent Harvard Medical School study, estimates that 135,000 American citizens and over 6,600 US veterans will die due to a lack of health insurance before current proposed healthcare reform measures would take effect.

One hundred and thirty-five thousand US lives far exceeds the total number of Americans who died in the Korean War, the Vietnam War and the attacks of 9/11 combined. The lives of over 6,600 US veterans is more -- by over 1,300 -- than the total number of US soldiers who have thus far died in both the Iraq and Afghanistan wars.

Dr. Steffie Woolhandler, a professor of medicine at Harvard University and co-author of the Harvard Medical School study, called Raw Story's estimates "quite reasonable."

Even more shocking is that these are modest estimates.

Health reform policy experts who spoke with Raw Story confirmed that the House and Senate bills would do virtually nothing for currently uninsured Americans until 2013 and 2014, respectively. Raw Story's calculations are based on the House health reform bill's projections. The Senate bill, however, would add another year of lethal lag time, driving up the estimated death rate by tens of thousands more US citizens and veterans. . . . .
http://rawstory.com/2009/12/135000-uninsured-americans-die-health-reform-takes-effect-study/
__

Dean: Public Option Essential to Real Health Care Reform

http://voices.washingtonpost.com/44/2009/08/17/dean_public_option_essential_t.html?waporef=evri.widget.1
The Associated Press reports:

Former Democratic Party Chairman Howard Dean, a leading figure in the liberal wing of his party, said Monday he doubts there can be meaningful health care reform without a direct government role.

Dean urged the Obama administration to stand by statements made early on in the debate in which it steadfastly insisted that such a public option was indispensable to genuine change, saying that Medicare and the Veterans Administration are "two very good programs that have been around for a long time." Dean appeared on morning news shows Monday amid increasing indications the Obama White House is retreating from the public option in the face of vocal opposition from Republicans and some vocal participants at a town-hall-style meetings around the country.

The former Vermont governor was asked on NBC's "Today" show about President Barack Obama's statement over the weekend that the public option for insurance coverage was "just a sliver" of the overall proposal. Obama's health and human services secretary, Kathleen Sebelius, advanced that line, telling CNN Sunday that a direct government role in a system intended to provide virtually universal coverage was "not the essential element." Dean, a physician, argued that a public option is fair and said there must be such a choice in any genuine shake up of the existing system.

"You can't really do health reform without it," he said. Dean maintained that the health insurance industry has "put enormous pressure on patients and doctors" in recent years.

He called a direct government role "the entirety of health care reform. It isn't the entirety of insurance reform ... We shouldn't spend $60 billion a year subsidizing the insurance industry." Dean also said he doesn't foresee any Republican support for a public option. "I don't think the Republicans are interested and in order to have a bipartisan bill, you've got to have both sides interested," he said.
___________________________

Dean urges defeat of emerging health care bill
The Associated Press
Wednesday, December 16, 2009; 8:52 AM
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/16/AR2009121600755_pf.html

WASHINGTON -- Former Democratic Party Chairman Howard Dean argued Wednesday that the health care overhaul bill taking shape in the Senate further empowers private insurers at the expense of consumer choice.

"You will be forced to buy insurance. If you don't, you'll pay a fine," said Dean, a physician. "It's an insurance company bailout." Interviewed on ABC's "Good Morning America," he said the bill has some good provisions, "but there has to be a line beyond which you think the bill is bad for the country."

"This is an insurance company's dream," the former Democratic presidential candidate said. "This is the Washington scramble, and it's a shame."

Dean asserted that the Senate's health care bill would not prohibit insurance companies from denying coverage for preexisting conditions and he also said it would allow the industry to charge older people far more than others for premiums.

Rep. Anthony Weiner, D-N.Y., a prominent House liberal, protested the absence of any government-run insurance option in the Senate bill.

"We can't let the perfect be enemy of the good," Weiner said on CBS' "Early Show," "but we are reaching a tipping point."

When House and Senate negotiators go to conference to work out a compromise bill, Weiner said, "We should move away from some of the things the Senate has done and move back to where the House is. You need to contain cost. You do that with a public option."
_______________________

Is Joe Lieberman Protecting Israel?

By Robert Parry

December 16, 2009 "Consortiumnews" - http://www.consortiumnews.com/2009/121509.html

http://www.informationclearinghouse.info/article24195.htm

Sen. Joe Lieberman’s latest threat to scuttle health-care reform – vowing to join a Republican filibuster to block an over-55 buy-in to Medicare, a proposal that he has long championed – is raising questions about his motives. But no one is mentioning the unmentionable, the cause that has come to define Lieberman’s career: Israel.

Is it possible that Lieberman’s obstructionist behavior doesn’t relate to Connecticut’s insurance industry or to his political ego – the two most cited explanations – but rather to a calculation that he can use his leverage on health care to limit the pressure that President Barack Obama can put on Israel to make concessions on a Mideast peace plan?

After all, the more common explanations of Lieberman’s behavior have holes in their logic.

While it is true that Lieberman’s constituent Hartford-based insurance companies fear any government intrusion in their industry, the actual proposals for the Medicare buy-in or the tightly constrained “public option” actually would benefit the industry in the near term.

Those uninsured Americans 55 to 64 are customers whom the insurance industry doesn’t want. They are the part of the uninsured population that is most likely to need medical care, which is why private insurers have driven up the rates so high that these people can’t afford to buy health insurance.

Letting these desperate Americans buy into Medicare wouldn’t cost the health insurance industry much of anything – and it would reduce the moral (and PR) crisis that has led so many Americans to view private insurers as vultures preying on the most vulnerable.

In his past position in favor of the Medicare buy-in, Lieberman has recognized this reality, noting that this over-55 group faces a particular crisis because they have “retired early or unfortunately have been laid off early” and can’t afford health insurance.

Though Lieberman has long been a major recipient of health insurance industry backing, that has never before prevented him from favoring this Medicare buy-in. Only now does Lieberman say that he would join a Republican filibuster to kill the entire bill if his earlier proposal is included.

So, Senate Democratic leaders have reportedly agreed to drop the buy-in provision to appease Lieberman even though such a watered-down Senate bill may complicate reconciliation with a more liberal House bill and is infuriating the Democratic base.

Killing the Public Option

Similarly, Lieberman has protested any inclusion of a government-run insurance option even if it is only triggered by the failure of private insurers to offer affordable alternatives or if it is so tightly constrained that it would attract only a few million customers, again drawn primarily from the ranks of Americans most in need of medical care.

The Congressional Budget Office has estimated that only about six million people would sign up for the House version of the public option whose rates would likely exceed those of private plans because the sick would gravitate to the government plan. The current Senate version, with a state-by-state opt-out provision, would draw even fewer customers, the CBO said.

Yet either version actually helps the health insurance industry by siphoning off sick people and thus allowing the industry to corner the market on healthier customers, where the biggest profits lie.

So, Lieberman may not be serving the industry’s best interests by jeopardizing passage of a health reform bill. Not only does the industry stand to pick up tens of millions of new customers who will be compelled to buy insurance – and sometimes with government subsidies – but a decent reform bill also blunts demands for more radical changes.

If Americans grow more furious with the current system – its rising costs and its failure to cover nearly 50 million people – voters might press for a single-payer approach which could eliminate private insurers altogether.

For these reasons, the Lieberman-is-in-the-pocket-of-the-insurance-lobby explanation isn’t entirely convincing.
. . . .
The Israel Factor

Which brings us to Israel, which arguably has become Lieberman’s most treasured priority in his political life.

Mark Vogel, chairman of the pro-Israel National Action Committee, once said, “Joe Lieberman, without exception, no conditions … is the No. 1 pro-Israel advocate and leader in Congress. There is nobody who does more on behalf of Israel than Joe Lieberman.”

It was Lieberman’s embrace of neoconservative ideology and his aggressive support for wars against Israel’s Muslim enemies, the likes of Iraq’s Saddam Hussein, that led Connecticut Democrats to deny Lieberman the Senate nomination in 2006 and prompted his successful run as an Independent.

Partly because Obama opposed the Iraq War, Lieberman went on the stump for Republican John McCain in 2008, even questioning Obama’s patriotism.

Standing with McCain in August 2008, Lieberman called the election a choice “between one candidate, John McCain, who has always put the country first, worked across party lines to get things done, and one candidate who has not.’

Since the start of Obama’s presidency, Israel’s hawkish Likud government has made no secret of its concern that Obama might pressure it into making territorial and other concessions to the Palestinians and Syria to secure a Mideast peace agreement.

In Washington, the still-influential neocons also have been demanding that Obama continue Bush’s belligerent policies and side with Israel in a hard-line approach to Iran.

In that sense, Lieberman and the neocons have much in common with Republicans, such as Sen. Jim DeMint, R-South Carolina, who declared in July that “If we’re able to stop Obama on this [health reform], it will be his Waterloo. It will break him.”

A broken Obama could be easier to manipulate regarding Mideast peace talks and Iran.
. . . .
Lieberman has been careful not to connect his disruptive behavior on health-care reform to his support for Israel, but there can be little doubt that a chastened Obama, either defeated on health care or forced to sign a bill that liberals will view as a betrayal, will have much less political capital to expend in applying pressure on Israel.

A hobbled Obama won’t be able to push Israeli Prime Minister Benjamin Netanyahu to halt expansion of West Bank settlements or to take other steps that might lead to a Palestinian state. Obama also could be pushed around himself if Israel – itself an undeclared nuclear power – decides to launch airstrikes against Iran’s nuclear facilities.

The Israel explanation for Lieberman’s behavior on health-care reform is the one that seems to make the most sense.

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there. Or go to Amazon.com.
______________________

Simon Johnson on Economic "Reform"

“Wake Up, Gentlemen”
Posted: 15 Dec 2009 03:06 AM PST

http://baselinescenario.com/2009/12/15/wake-up-gentlemen/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

The guiding myth underpinning the reconstruction of our dangerous banking system is: Financial innovation as-we-know-it is valuable and must be preserved.  Anyone opposed to this approach is a populist, with or without a pitchfork.

Single-handedly, Paul Volcker has exploded this myth.  Responding to a Wall Street insiders‘ Future of Finance “report“, he was quoted in the WSJ yesterday as saying: “Wake up gentlemen.  I can only say that your response is inadequate.”

Volcker has three  main points, with which we whole-heartedly agree:

1. “[Financial engineering] moves around the rents in the financial system, but not only this, as it seems to have vastly increased them.”

2. “I have found very little evidence that vast amounts of innovation in financial markets in recent years have had a visible effect on the productivity of the economy” and most important:

 3. “I am probably going to win in the end”.

Volcker wants tough constraints on banks and their activities, separating the payments system – which must be protected and therefore tightly regulated – from other “extraneous” functions, which includes trading and managing money.

This is entirely reasonable – although we can surely argue about details, including whether a very large “regulated” bank would be able to escape the limits placed on its behavior and whether a very large “trading” bank could (without running the payments system) still cause massive damage. 

But how can Mr. Volcker possibly prevail?  Even President Obama was reduced, yesterday, to asking the banks nicely to lend more to small business – against which Jamie Dimon will presumably respond that such firms either (a) are not creditworthy (so give us a subsidy if you want such loans) or (b) don’t want to borrow (so give them a subsidy).  (Some of the bankers, it seems, didn’t even try hard to attend – they just called it in.)

The reason for Volcker’s confidence in his victory is simple - he is moving the consensus.  It’s not radicals against reasonable bankers.  It’s the dean of American banking, with a bigger and better reputation than any other economic policymaker alive – and with a lot of people at his back – saying, very simply: Enough.

He says it plainly, he increasingly says it publicly, and he now says it often.  He waited, on the sidelines, for his moment.  And this is it.

Paul Volcker wants to stop the financial system before it blows up again.  And when he persuades you – and people like you – he will win.  You can help – tell everyone you know to read what Paul Volcker is saying and to pass it on.
By Simon Johnson
__________________________

McCain Leads Senate Effort to Reinstate Glass-Steagall
December 15, 2009 - by Donny Shaw
http://www.opencongress.org/articles/view/1410-McCain-Leads-Senate-Effort-to-Reinstate-Glass-Steagall?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+OpenCongressCongressGossipBlog+%28Open+Congress+Blog%29

Throughout the financial crisis one law has been cited over and over as a main cause of the collapse and, more significantly, the resulting bailouts of “too big to fail” banks. That law is the Gramm-Leach-Biley Act, which repealed a New Deal-era financial regulatory rule known as the Glass-Steagall Act, which was signed into law by FDR to keep regular commercial banks separate from Wall Street investment banks. The law was repealed in 1999 by Bill Clinton; the pen that signed the law to repeal it is now hanging as a trophy in the halls of Citigroup’s corporate headquarters.

Now there’s a movement in the Senate to reinstate the Glass-Steagall protections. It’s being championed by Sen. John McCain [R, AZ] of all people. Newsweek reports:

John McCain lost the 2008 presidential election because of the financial crisis—at least that’s what his chief strategist, Steve Schmidt, suggested. “We were three points ahead on Sept. 15 when the stock market crashed. And then the election was over,” Schmidt said in a postmortem earlier this year. McCain was tarred with the regulatory failures of the Bush years, and it didn’t help that he had been a longtime acolyte of the Senate’s dean of deregulation, Phil Gramm, who once derided Americans as “a nation of whiners.” McCain also seemed to have few new ideas of his own about how to address the financial panic.

More than a year after the election, the Arizona Republican is looking to repair that reputation by joining up with Democratic firebrand Maria Cantwell to propose something that will be anathema to both Wall Street and the Obama administration. According to two congressional sources, the two maverick senators want to reinstate Glass-Steagall Act, the Depression-era law that forced the separation of regular commercial banking from Wall Street investment banking. The senators’ proposal echoes a failed amendment introduced in the House last week by Rep. Maurice Hinchey of New York.

The Senate prospects for the success of the McCain-Cantwell bill—which the two plan to announce together on Wednesday morning—seem bleak at best. But McCain and Cantwell join a still small but not insignificant insurgency of chronic doubters, including former Federal Reserve chairman Paul Volcker, who say not nearly enough is being done to change Wall Street and, in particular, to address the “too big to fail” problem. The issue is one of the few in Washington that can unite the left and right sides of the political spectrum. Democrats like Cantwell deplore Wall Street’s outsize role in the real economy and its lobbying influence, and conservatives such as McCain are appalled at the way the market system has been undermined—some would say rigged—by the power of the big banks.

By proposing a bill to reinstate Glass-Steagall, McCain and Cantwell are going well outside the usual D.C. thinking on financial regulation. An anonymous Treasury official, for example, is quoted in the article as saying, “I think going back to Glass-Steagall would be like going back to the Walkman.” Bringing back Glass-Steagall is something that has made a lot of sense to the grassroots and former officials who are no longer in power, but it hasn’t really found much support among people that are currently in positions of power in D.C.

There’s always more to the story than campaign contributions, but in cases like this it’s hard not to take a look. According to OpenSecrets.org, in 2008, financial firms gave an uncommonly large amount of money to the campaigns of current members of Congress. Included in their list (http://www.opensecrets.org/industries/recips.php?cycle=2010&ind=F)of top ten recipients for this year are such powerful senators as Senate Democratic Caucus Vice Chairman Chuck Schumer [D, NY], Majority Leader Harry Reid [D, NV] and Banking Committee Chairman Chris Dodd [D, CT].
________________________

U.S. gave up billions in tax money in deal for Citigroup's bailout repayment
DEAL MADE TO RECOVER BAILOUT
Firms exempted from rule when U.S. sells its stake
By Binyamin Appelbaum
Washington Post Staff Writer
Wednesday, December 16, 2009; A01
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534_pf.html

The federal government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the deal announced this week to wean the company from the massive taxpayer bailout that helped it survive the financial crisis.

The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

While the Obama administration has said taxpayers are likely to profit from the sale of the Citigroup shares, accounting experts said the lost tax revenue could easily outstrip those profits.

The IRS, an arm of the Treasury Department, has changed a number of rules during the financial crisis to reduce the tax burden on financial firms. The rule changed Friday also was altered last fall by the Bush administration to encourage mergers, letting Wells Fargo cut billions of dollars from its tax bill by buying the ailing Wachovia.

"The government is consciously forfeiting future tax revenues. It's another form of assistance, maybe not as obvious as direct assistance but certainly another form," said Robert Willens, an expert on tax accounting who runs a firm of the same name. "I've been doing taxes for almost 40 years, and I've never seen anything like this, where the IRS and Treasury acted unilaterally on so many fronts."
For rest of article, See: http://www.washingtonpost.com/wp-dyn/content/article/2009/12/15/AR2009121504534_pf.html

Some Baker County Wildlife

While I was out and about in the last few weeks, I was able to photograph a very few animals, or signs of them at least, in areas south of Baker City, here in Baker County, Oregon. They included a beaver dam, Pronghorn Antelope, Bald and Golden Eagles, and the often overlooked Townsend's Solitaire, all of which I feature in this blog.

American Beaver (Castor canadensis)

The beaver had been trapped to extirpation over large areas in the 1800's, and has also been, like many rodents, much persecuted in the American west. I first ran across them while on vacations from California when I was just a child, and was fascinated by their activities in the riparian areas, as I glanced out the car window in travels through Wyoming, Montana, and Canada.

Recently, I have noticed their expansion in the irrigation ditch running along the west side of Highway 7, as it flows through Bowen Valley, and at a new beaver dam up at the Powder River Recreation Area not far below Mason Dam and Phillips Reservoir. During my time in Utah, I remember that they were shot because of their propensity to dam irrigation ditches or burrow into earthen dams that were unprotected by chain link wire fabric.

They do however serve many valuable functions:

"Besides being a keystone species, beavers reliably and economically maintain wetlands that can sponge up floodwaters (the several dams built by each colony also slows the flow of floodwaters), prevent erosion, raise the water table and act as the "earth's kidneys" to purify water. The latter occurs because several feet of silt collect upstream of older beaver dams, and toxics, such as pesticides, are broken down in the wetlands that beavers create. Thus, water downstream of dams is cleaner and requires less treatment." http://www.beaversww.org/beaver.html

They also provide habitat useful to fish:
"American Beaver

Oregon’s early economy was built on beaver pelts. During the 1800s, by feeding European and eastern American demand for beaver hats and coats, fur trappers virtually eliminated the species from many landscapes through unregulated trapping. With proper management, however, beaver have become re-established and are now common throughout their range. In 1969, the Legislature recognized the American Beaver by naming it Oregon’s state animal. Beavers enhance habitat for many other fish and wildlife species through their dam-building activities. Beaver ponds provide areas for people to fish, hunt and view wildlife. Beavers have reddish brown to black fur, webbing on their hind feet and a tail that is broad, flat, hairless and scaled." (http://www.dfw.state.or.us/conservationstrategy/oregon_state_species.asp#beaver)

Just google it!

Anyway, here are a few photos of the new beaver dam below Phillips Res., where they appear to be feeding on alder and river birch. I've also included a short clip from a film of beaver I took in Utah in 1994.

Beaver Dam Below Phillips Reseroir

Dam with limbs and bark of food sources chewed clean

Short Video of beaver giving alarm call in the Uinta Mountains of northern Utah in 1994:

____________________________

Pronghorn Antelope (Antilocapra americana)

On December 3, 2009, I came across two bands of a Pronghorn Antelope herd on the Foster Ranch in Bowen Valley. They totaled around 74 individuals. Usually I see about 20 or at most 30 in that area, so I called ODFW and they confirmed that it was an unusually large group. Back in 1948, they were quite scarce in Baker County, according to the account set forth in "The Pronghorn Antelope and its management" by Arthur S. Einarsen. They gained the attention of State wildlife agencies in 1935 because of an interest in preserving the species.

Two Photos:

Pronghorn in Bowen Valley

Pronghorn Negotiating Barbed Wire Fence

Pronghorn can get under fences intended to contain cattle, but traditional sheep fence is a different story. The heavy mesh wire sheep fences in use, at least in the past, in the Great Basin, not only restricted the movement of sheep, but they also restricted the free movement of pronghorn. The mesh wire in the lower 3-4 feet of fence below the barbed wire in sheep fences are a barrier because pronghorn try to go under a fence rather than jump over it. In severe winters, thousands of pronghorn have died in Wyoming after being trapped on the wrong side of sheep fence. One can imagine that such fences come in handy for predators of Pronghorn as well. The once wide open landscapes and ecosystems of the west are now criss crossed and fragmented by hundreds of thousands of miles of fence because of livestock use. For a 1990's photo of sheep fence in the Great Basin, see: http://rangenet.org/projects/wplgalbum/page3/page3b.html
Also note the effects of severe grazing pressure on the private land on the left side of the fence in the photo above.
___________________________

Bald Eagles (Haliaeetus leucocephalus)

I took the following photos just recently above Bowen Valley and by the Burnt River at Bridgeport.

Along Elk Creek Road, someone had dumped two elk carcasses after they had been processed for meat. The attraction for wildlife was great as the temps had been and continued to be in the sub-zero range at night. The carcasses have been attracting eagles all week. Thank god for the carcass dumpers! He fed probably over 8-10 eagles, many ravens and a mob of magpies during a very difficult period temperature wise. They also feed on fish, such as can be secured from Phillips and Unity reservoirs, waterfowl, and mammals. Perhaps as importantly here in Baker County, now that cattle ranching and farming has displaced the pre-settler environment, they congregate around calving operations to feed on the leftovers from birthing.

Bald Eagle on Juniper near Elk Carcass on Elk Creek Road

Another almost adult Bald Eagle was soaring above after having gorged itself on the donated carcass:
Nearly adult Bald Eagle [Classified Sub-adult IV or "Transition"]

On a raptor count the next day, I was able to take the following photo of an adult Bald Eagle next to the Burnt River at Bridgeport:

Bald Eagle at Bridgeport
__________________________

Golden Eagles (Aquila chrysatos)

Due to the presence of the elk carcasses, I was able to photograph a Golden Eagle sub-adult (IV) in flight on Elk Creek Road. When they can, Goldens feed on jack rabbits, ground squirrels, waterfowl, and the like, but they, like the Bald Eagle, also feed on carrion.

Golden Eagle, sub-adult

The previous day I had been able to photograph another Golden Eagle just east of Hereford near the Burnt River. Here are two photos:

Golden Eagle on Western Juniper

Golden Eagle in Flight
____________________________

Townsend's Solitaire (Myadestes townsendii)

When visiting the juniper woodlands of Eastern Oregon in winter, the attentive one is likely to hear the plaintive call of the mousy gray-brown Townsend's Solitaire up on the top of a nearby tall juniper. In spring, you may also hear their beautiful song. Charles Bendire, a renowned early American ornithologist, thought, as expressed in a letter from 1874, that it was superior to the song of the mockingbird, although I'm not sure I would agree.

The Solitaire is a Thrush, and thus related to the robin and bluebird.

In winter it feeds on the juniper berry, in competition with the wandering bands of Robins, with whom he is usually found, although in far fewer numbers. They are still fairly common up on Elk Creek Road, despite the fact that many of his favored tree, the Western juniper, have been cutdown recently.

Here is a photo from last week:

Townsend's Solitaire
________________________

"1984" and Obama's Orwellian Nobel "Peace Prize" Acceptance Speech

In this issue (edited with additional comments on 12/12/09):

- George Orwell's "1984"

- Articles on Obama's Orwellian Nobel "Peace Prize" Acceptance Speech
_____________________

George Orwell's "1984"

I was uncertain as to whether it would be more appropriate to put the following quotes from George Orwell's (real name Eric Blair) novel, "1984" before or after a few articles about Obama's recent Nobel Peace Prize acceptance speech, as the articles help explain just how "Orwellian" Obama's speech and other pronouncements have been. But here it is at the beginning, so try to remember some of his words and other actions, and to recall some of the speeches and rhetoric of previous Presidents, like George W. Bush, in justifying our continuous wars.

The novel, which many have probably read, or at least heard about, was published in 1949 and is primarily concerned with aspects of totalitarian rule (in this case named, Ingsoc), but many of the principles apply also to any oligarchy or stratified human social grouping. While not all of the novel's "predictions" turned out to be true in every detail, many of the basic concepts hold true today, as they no doubt did even before Orwell's time. The book was scoffed at by the "Orwellian" U.S. press as the actual year of 1984 passed, even though many versions of the principles described were well institutionalized at the time. Denial, like hope, springs eternal.
_____________________

"1984" George Orwell (from the first edition, © 1949)

Ch. One, pp. 17-18

The Hate rose to its climax. The voice of Goldstein had become an actual sheep's bleat, and for an instant the face changed into that of a sheep. Then the sheep-face melted into the figure of a Eurasian soldier who seemed to be advancing, huge and terrible, his submachine gun roaring, and seeming to spring out of the surface of the screen, so that some of the people in the front row actually flinched backwards in their seats. But in the same moment, drawing a deep sigh of relief from everybody, the hostile figure melted into the face of Big Brother, black-haired, black mustachio'd, full of power and mysterious calm, and so vast that it almost filled up the screen. Nobody heard what Big Brother was saying. It was merely a few words of encouragement, the sort of words that are uttered in the din of battle, not distinguishable individually but restoring confidence by the fact of being spoken. Then the face of Big Brother faded away again, and instead the three slogans of the Party stood out in bold capitals:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH.

But the face of Big Brother seemed to persist for several seconds on the screen, as though the impact that it had made on everyone's eyeballs were too vivid to wear off immediately. The little sandy-haired woman had flung herself forward over the back of the chair in front of her. With a tremulous murmur that sounded like "My Savior!" she extended her arms toward the screen. Then she buried her ace in her hands. It was apparent that she was uttering a prayer.

At this moment the entire group of people broke into a deep, slow, rhythmical chant of "B-B! ... B-BI ••• B-B!"--over and over again, very slowly, with a long pause between the first "B" and the second-a heavy, murmurous sound, somehow curiously savage, in the background of which one seemed to hear the stamp of naked feet and the throbbing of tom-toms. For perhaps as much as thirty seconds they kept it up. It was a refrain that was often heard in moments of overwhelming emotion. Partly it was a sort of hymn to the wisdom and majesty of Big Brother, but still more it was an act of self-hypnosis, a deliberate drowning of consciousness by means of rhythmic noise.

Winston's entrails seemed to grow cold. In the Two Minutes Hate he could not help sharing in the general delirium, but this subhuman chanting of "B-BI ••• B-BI" always filled him with horror. Of course he chanted with the rest: it was impossible to do otherwise. To dissemble your feelings, to control your face, to do what everyone else was doing, was an instinctive reaction. But there was a space of a couple of seconds during which the expression in his eyes might conceivably have betrayed him.

Ch. Two, (pp. 211 - 215)

A Party member lives from birth to death under the eye of the Thought Police. Even when he is alone he can never be sure that he is alone. Wherever he may be, asleep or awake, working or resting, in his bath or in bed, he can be inspected without warning and without knowing that he is being inspected. Nothing that he does is indifferent. His friendships, his relaxations, his behavior toward his wife and children, the expression of his face when he is alone, the words he mutters in sleep, even the characteristic movements of his body, are all jealously scrutinized. Not only any actual misdemeanor, but any eccentricity, however small, any change of habits, any nervous mannerism that could possibly be the symptom of an inner struggle, is certain to be detected. [While intrusions on personal privacy have not yet advanced to this stage today, they have certainly moved a long way in that direction since the inception of the "War on Terror" and the passage of the "Patriot Act." I keep wondering what further invasion, beyond all the wiretapping, purchase preference recording, & etc, might be developed with the camera "eye" on the front of most new computer screens. - Chris] He has no freedom of choice in any direction whatever. On the other hand, his actions are not regulated by law or by any clearly formulated code of behavior. In Oceania there is no law. Thoughts and actions which, when detected, mean certain death are not formally forbidden, and the endless purges, arrests, tortures, imprisonments, and vaporizations are not inflicted as punishment for crimes which have actually been committed, but are merely the wiping-out of persons who might perhaps commit a crime at some time in the future. [While only Jose Padilla, an American citizen held under suspicion as an enemy combatant and "dirty bomb" plotter for three 1/2 years, faced something similar domestically, this reminds me of the policies of extraordinary rendition and torture imprisonment of "non-combatants" and also of detentions of non-citizens in places like Guantanamo.] A Party member is required to have not only the right opinions, but the right instincts. Many of the beliefs and attitudes demanded of him are never plainly stated, and could not be stated without laying bare the contradictions inherent in Ingsoc. If he is a person naturally orthodox (in Newspeak, a "goodthinker"), he will in all circumstances know, without taking thought, what is the true belief or the desirable emotion. But in any case an elaborate mental training, undergone in childhood and grouping itself round the Newspeak words "crimestop, blackwhite", and "doublethink," makes him unwilling and unable to think too deeply on any subject whatever.

A Party member is expected to have no private emotions, and no respites from enthusiasm. He is supposed to live in a continuous frenzy of hatred of foreign enemies and internal traitors, triumph over victories, and self-abasement before the power and wisdom of the Party. The discontents produced by his bare, unsatisfying life are deliberately turned outwards and dissipated by such devices as the "Two Minutes Hate", and the speculations which might possibly induce a skeptical or rebellious attitude are killed in advance by his early acquired inner discipline. The first and simplest stage in the discipline, which can be taught even to young children, is called, in Newspeak, "crimestop."

"Crimestop" means the faculty of stopping short, as though by instinct, at the threshold of any dangerous thought. It includes the power of not grasping analogies, of failing to perceive logical errors, of misunderstanding the simplest arguments if they are inimical to Ingsoc, and of being bored or repelled by any train of thought which is capable of leading in a heretical direction. "Crimestop", in short, means protective stupidity. But stupidity is not enough. On the contrary, orthodoxy in the full sense demands a control over one's own mental processes as complete as that of a contortionist over his body. Oceanic society rests ultimately on the belief that Big Brother is omnipotent and that the Party is infallible. But since in reality Big Brother is not omnipotent and the Party is not infallible, there is need for an unwearying, moment-to-moment flexibility in the treatment of facts. The key word here is "blackwhite." Like so many Newspeak words, this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces (p214) all the rest, and which is known in Newspeak as "doublethink".

The alteration of the past is necessary for two reasons, one of which is subsidiary and, so to speak, precautionary. The subsidiary reason is that the Party member, like the proletarian, tolerates present-day conditions partly because he has no standards of comparison. He must be cut off from the past, just as he must be cut off from foreign countries, because it is necessary for him to believe that he is better off than his ancestors and that the average level of material comfort is constantly rising. But by far the more important reason for the readjustment of the past is the need to safeguard the infallibility of the Party. It is not merely that speeches, statistics, and records of every kind must be constantly brought up to date in order to show that the predictions of the Party were in all cases right. It is also that no change in doctrine or in political alignment can ever be admitted. For to change one's mind, or even one's policy, is a confession of weakness. If, for example, Eurasia or Eastasia (whichever it may be) is the enemy today, then that country must always have been the enemy. And if the facts say otherwise, then the facts must be altered. Thus history is continuously rewritten. This day-to-day falsification of the past, carried out by the Ministry of Truth, is as necessary to the stability of the regime as the work of repression and espionage carried out by the Ministry of Love.

The mutability of the past is the central tenet of Ingsoc. Past events, it is argued, have no objective existence, but survive only in written records and in human memories. The past is whatever the records and the memories agree upon. And since the Party is in full control of all records, and in equally full control of the minds of its members, it follows that the past is whatever the Party chooses to make it. It also follows that though the past is alterable, it never has been altered in any specific instance. For when it has been recreated in whatever shape is needed at the moment, then this new version is the past, and no different past can ever have existed. This holds good even when, as often happens, the same event has to be altered out of recognition several times in the course of a year. At all times the Party is in possession of absolute truth, and clearly the absolute can never have been different from what it is now. It will be seen that the control of the past depends above all on the training of memory. To make sure that all written records agree with the orthodoxy of the moment is merely a mechanical act. But it is also necessary to remember that events happened in the desired manner. And if it is necessary to rearrange one's memories or to tamper with written records, then it is necessary to forget that one has done so. The trick of doing this can be learned like any other mental technique. It is learned by the majority of Party members, and certainly by all who are intelligent as well as orthodox. In Oldspeak it is called, quite frankly, "reality control." In Newspeak it is called "doublethink", though "doublethink" comprises much else as well.

"Doublethink" means the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them. The Party intellectual knows in which direction his memories must be altered; he therefore knows that he is playing tricks with reality; but by the exercise of doublethink he also satisfies himself that reality is not violated. The process has to be conscious, or it would not be carried out with sufficient precision, but it also has to be unconscious, or it would bring with it a feeling of falsity and hence of guilt. "Doublethink" lies at the very heart of Ingsoc, since the essential act of the Party is to use conscious deception while retaining the firmness of purpose that goes with complete honesty. To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies-all this is indispensably necessary. Even in using the word "doublethink" it is necessary to exercise "doublethink." For by using the word one admits that one is tampering with reality; by a fresh act of "doublethink" one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth. Ultimately it is by means of "doublethink" that the Party has been able-and may, for all we know, continue to be able for thousands of years-to arrest the course of history.

All past oligarchies have fallen from power either because they ossified or because they grew soft. Either they became stupid and arrogant, failed to adjust themselves to changing circumstances, and were overthrown, or they became liberal and cowardly, made concessions when they should have used force, and once again were overthrown. They fell, that is to say, either through consciousness or through unconsciousness. It is the achievement of the Party to have produced a system of thought in which both conditions can exist simultaneously. And upon no other intellectual basis could the dominion of the Party be made permanent. If one is to rule, and to continue ruling, one must be able to dislocate the sense of reality. For the secret of rulership is to combine a belief in one's own infallibility with the power to learn from past mistakes.

It need hardly be said that the subtlest practitioners of "doublethink" are those who invented "doublethink" and know that it is a vast system of mental cheating. In our society, those who have the best knowledge of what is happening are also those who are furthest from seeing the world as it is. In general, the greater the understanding, the greater the delusion: the more intelligent, the less sane. One clear illustration of this is the fact that war hysteria increases in intensity as one rises in the social scale. Those whose attitude toward the war is most nearly rational are the subject peoples of the disputed territories. To these people the war is simply a continuous calamity which sweeps to and fro over their bodies like a tidal wave. Which side is winning is a matter of complete indifference to them. They are aware that a change of overlordship means simply that they will be doing the same work as before for new masters who treat them in the same manner as the old ones. The slightly more favored workers whom we call "the proles" are only intermittently conscious of the war. When it is necessary they can be prodded into frenzies of fear and hatred, but when left to themselves they are capable of forgetting for long periods that the war is happening. It is in the ranks of the Party, and above all of the Inner Party, that the true war enthusiasm is found. World-conquest is believed in most firmly by those who know it to be impossible. This peculiar linking-together of opposites-knowledge with ignorance, cynicism with fanaticism-is one of the chief distinguishing marks of Oceanic society. The official ideology abounds with contradictions even where there is no practical reason for them. Thus, the Party rejects and vilifies every principle for which the Socialist movement originally stood, and it chooses to do this in the name of Socialism. It preaches a contempt for the working class unexampled for centuries past, and it dresses its members in a uniform which was at one time peculiar to manual workers and was adopted for that reason. It systematically undermines the solidarity of the family, and it calls its leader by a name which is a direct appeal to the sentiment of family loyalty. Even the names of the four Ministries by which we are governed exhibit a sort of impudence in their deliberate reversal of the facts. [We have the Department of Defense, which in reality is the Department of Offence, always busy planning the next war.]

The Ministry of Peace concerns itself with war, the Ministry of Truth with lies, the Ministry of Love with torture, and the Ministry of Plenty with starvation. These contradictions are not accidental, nor do they result from ordinary hypocrisy: they are deliberate exercises in "doublethink." For it is only by reconciling contradictions that power can be retained indefinitely. In no other way could the ancient cycle be broken. If human equality is to be forever averted -if the High, as we have called them, are to keep their places permanently-then the prevailing mental condition must be controlled insanity.

But there is one question which until this moment we have almost ignored. It is: why should human equality be averted? Supposing that the mechanics of the process have been rightly described, what is the motive for this huge, accurately planned effort to freeze history at a particular moment of time?

Here we reach the central secret. As we have seen, the mystique of the Party, and above all of the Inner Party, depends upon "doublethink." But deeper than this lies the original motive, the never-questioned instinct that first led to the seizure of power and brought "doublethink," the Thought Police, continuous warfare, and all the other necessary paraphernalia into existence afterwards. . . . .
______________________
Articles on Obama's Orwellian Nobel "War is Peace" Acceptance Speech:
______________________

consortiumnews.com
'Whatever Mistakes We Have Made'
By Nicolas J S Davies
December 11, 2009
http://www.consortiumnews.com/Print/2009/121109b.html

Consortium News Editor’s Note: Though eloquent and nuanced, President Barack Obama’s Nobel Peace Prize speech whitewashed the post-World War II history of U.S. military interventions and covert actions that have killed millions of people and overthrown democracies that have resisted U.S. dictates and desires, from Iran to Chile.

Facing political criticism from the Right for having apologized at all for past U.S. transgressions, Obama circumscribed the bloody truth within a five-word clause, “whatever mistakes we have made.” In this guest essay, Nicolas J S Davies expands on that phrase:

The history of war has long included that of politicians who justify war in the name of peace.

After ordering the deaths of thousands or millions of people, they insist on tormenting the distraught survivors with disingenuous hand-wringing, mythological history and self-congratulation.

They demonize their victims, marginalize their suffering, and never apologize.

On Thursday in Oslo, after less than a year in office, President Obama took his place among this parade of the most cynical of historical figures.

Before directly addressing the specific role of the United States, Mr. Obama framed the history of warfare in the context of "just war" theory.

What he did not explain was that it was the bloody and catastrophic results of such "moral" justifications for war that brought the modern world to the brink of destruction and led it to instead adopt explicit international treaties and the binding prohibitions on the "threat or use of force" contained in the United Nations Charter.

As President Franklin Delano Roosevelt told Congress on his return from the Yalta conference, his proposal for the United Nations "ought to spell the end of the system of unilateral action, the exclusive alliances, the spheres of influence, the balances of power, and all the other expedients that have been tried for centuries - and have always failed. We propose to substitute for all these a universal organization in which all peaceloving nations will finally have a chance to join."

Or, as Richard Barnet wrote in Roots of War in 1972, "It is exactly because moral standards are so difficult to apply wisely to foreign policy issues that it becomes necessary for survival to submit to objective, even arbitrary standards. There are some things that should not be done, whatever the circumstances or however plausible the provocation.

“The rules of war and the limitations on national sovereignty in the United Nations Charter were developed out of the shared experience of nations that a world where everything is permitted is not worth living in."

History of U.S. Wars

After taking up a third of his Nobel speech with his elaborate effort to dangerously reframe the whole question of war and peace, Mr. Obama finally addressed the history of war-making by his own country, the United States.

"Whatever mistakes we have made, the plain fact is this: The United States of America has helped underwrite global security for more than six decades with the blood of our citizens and the strength of our arms," Obama said.

"We have borne this burden not because we seek to impose our will. We have done so out of enlightened self-interest -- because we seek a better future for our children and grandchildren, and we believe that their lives will be better if others' children and grandchildren can live in freedom and prosperity."

But this claim of selfless American nobility is contradicted by analysts and historians of all political stripes, even on the Right and among the most aggressive neoconservatives.

Jonah Goldberg of National Review quotes his neoconservative colleague Michael Ledeen describing U.S. interventions as the necessary coercive component of a gangsterish foreign policy based on unequal economic relationships:

"Every ten years or so, the United States needs to pick up some small crappy little country and throw it against the wall, just to show the world we mean business."

Or, when confronted with U.S. responsibility for the Kurdish refugee crisis in Iraq and Iran in 1975, Secretary of State Henry Kissinger famously told investigators from the House Intelligence Committee that, "Covert action should not be confused with missionary work."

William Blum provides exhaustive detail of 55 U.S. military and CIA interventions since 1945 in his excellent book Killing Hope (http://www.thirdworldtraveler.com/Blum/William_Blum.html).

This or any other thorough review of the historical record makes it clear that most of these interventions brought neither freedom nor prosperity to their victims.

On the contrary, they were mainly designed to overthrow governments that were too responsive to the needs and will of their own people and insufficiently responsive to American geostrategic and commercial interests.

Motivations may sometimes be subject to interpretation, but open violations of international law and the deaths and suffering of billions of people speak for themselves.

Ghosts of War Crimes Past

Was Mr. Obama really unaware of the millions of ghosts standing as silent witnesses to his empty words, whispering in Vietnamese, Arabic, Spanish, Haitian Creole and a dozen other languages?

Obama also claimed that U.S. interventions in other countries are designed to bring “stability” and “security.” But killing people and blowing up their homes and infrastructure does not bring stability or security.

On the contrary, those acts of violence bring death, terrible injuries, devastation and chaos. The use of military force is destructive by definition.

The fact that people and societies eventually recover from war does not mean that war or those who engage in it deserve credit for their victims’ recovery.

Only a drunk driver who is still very drunk would take credit when a person he injured finally emerged from the hospital and rehabilitation. U.S. claims for the benefits of military occupation and aerial bombardment rest on the same absurd and faulty logic.

President Obama went on to expound on one of the central myths of the American way of war. He claimed, "I believe that all nations, strong and weak alike, must adhere to standards that govern the use of force."

He went on later, "we have a moral and strategic interest in binding ourselves to certain rules of conduct... I believe that the United States must be a standard bearer in the conduct of war."

Last week, in Obama with Blood on his Hands (http://www.consortiumnews.com/2009/120209a.html), I described how, contrary to Mr. Obama's posturing, the United States is far behind the rest of the world in its commitment to the standards and conduct required by the Geneva Conventions and other binding treaties on the conduct of war.

U.S. military commanders consistently fail to make the most fundamental distinction between combatants and civilians that is at the heart of the laws of war.

They issue a wide variety of illegal orders that include "weapons free" (formerly "free fire") rules of engagement; orders to "kill all military age males"; air strikes on buildings where combatants have taken cover among large numbers of civilians; and brutal collective punishment of civilian populations. U.S. forces are trained to "dead-check" or kill wounded resistance fighters, and prohibitions on torture are consistently ignored.

Dangerous Opinions

The People on War survey conducted by the International Committee of the Red Cross (ICRC) in 1999 demonstrated that American war crimes are rooted in the attitudes of the general population.

Whereas 75 percent of people in other countries understand that military forces "must attack only other combatants and leave civilians alone", as required by the 4th Geneva Convention, only 52 percent of Americans accept this position.

The ICRC report found that, "Across a wide range of questions, in fact, American attitudes towards attacks on civilians were much more lax" than those of people in other countries.

People on War found similar disparities in American attitudes to torture, the treatment of prisoners of war and disrespect for the value of the Geneva Conventions themselves.

Obama's claim that there is something morally superior about the way the United States fights its wars is either an extremely dangerous illusion or a cynical smokescreen. [You can find more details of the deadly consequences of American violations of the laws of war in my previous article (http://www.consortiumnews.com/2009/120209a.html).]

President Obama did offer a constructive suggestion on how "nations that break rules and laws" like the United States should be dealt with:

"I believe that we must develop alternatives to violence that are tough enough to change behavior - for if we want a lasting peace, then the words of the international community must mean something. Those regimes that break the rules must be held accountable. Sanctions must exact a real price. Intransigence must be met with increased pressure - and such pressure exists only when the world stands together as one."

Of course, the problem is that, when the world does stand together as one, as in opposing the U.S. and British invasion of Iraq for instance, the present structure of the U.N. Security Council permits one or two of its permanent members to veto any effort to constrain them.

In contrast with their leaders, a majority of Americans have long believed that the U.N. Charter should be amended so that no one country, not even their own, can veto a resolution that is supported by a supermajority of the other 14 members.

This would be a valuable step toward a more representative international order and the kind of "alternative to violence" that the President claims to seek.

Real Accountability

And, because "regimes that break the rules must be held accountable" [Obama's words from Nobel speech], the United States should restore its recognition of the binding jurisdiction of the International Court of Justice (ICJ). [Reagan, both Bush's, Clinton, and so far, Obama, have rejected the jurisdiction of the International Court of Justice.]

The U.S. withdrew from the jurisdiction of the ICJ after it ruled that the United States was engaged in aggression against Nicaragua in 1986. Nobody can simultaneously claim to uphold the law and to be unaccountable to it.

If Mr. Obama wants to take meaningful steps on the question of accountability for war crimes, there are several other important steps he can take:

The U.S. Justice Department and military Judge Advocates General should initiate serious investigations of American war crimes. And the United States should ratify the Treaty of Rome that established the International Criminal Court (ICC), instead of scheming to undermine it.

President Obama finished his speech with a long and quite eloquent plea for peace that might have been inspiring coming from someone other than the President of the world's most aggressive military power and biggest weapons manufacturer.

The world already has billions of such pleas for peace, coming from the hearts of people all over the world.

What we need from the President of the United States is not another hypocritical speech but action to respond to those pleas.

This means ending U.S. wars and occupations, radically reassessing the genuine defense needs of his country, bringing his government into compliance with its international treaty commitments and enforcing its own laws.

Nicolas J S Davies is the author of Blood on our hands: the American invasion and destruction of Iraq, due out in March. He is a writer and activist in Miami, where he coordinates the Miami chapter of
Progressive Democrats of America (www.pdamerica.org).
_______________________________

MORE ARTICLES:
_______________________________

Mr. President, War Is Not Peace

December, 12 2009By Norman Solomon
Norman Solomon's ZSpace Page

Eloquence in Oslo cannot change the realities of war.

As President Obama neared the close of his Nobel address, he called for "the continued expansion of our moral imagination." Yet his speech was tightly circumscribed by the policies that his oratory labored to justify.

Lofty rationales easily tell us that warfare is striving for the noble goal of peace. But the rationales scarcely intersect with actual war. The oratory sugarcoats the poisons, helping to kill hope in the name of it.

A few months ago, when I visited an Afghan office for women's empowerment, staffers took me to a pilot project in one of Kabul's poorest neighborhoods. There, women were learning small-scale business skills while also gaining personal strength and mutual support.

Two-dozen women, who ranged in age from early 20s to late 50s, talked with enthusiasm about the workshops. They were desperate to change their lives. When it was time to leave, I had a question: What should I tell people in the United States, if they ask what Afghan women want most of all?

After several women spoke, the translator summed up. "They all said that the first priority is peace."

In Afghanistan, after 30 years under the murderous twin shadows of poverty and war, the only lifeline is peace.

From President Obama, we hear that peace is the ultimate goal. But "peace" is a fixture on a strategic horizon that keeps moving as the military keeps marching.

Just a couple of days before Obama stepped to the podium in Oslo, the general running the U.S. war effort in Afghanistan spoke to a congressional committee in Washington about the president's recent pledge to begin withdrawal of U.S. troops in July 2011. "I don't believe that is a deadline at all," Stanley McChrystal said.

War is not peace. It never has been. It never will be.

Actual policy always, in the real world, profoundly trumps even the best rhetoric. And so, for instance, when President Obama's Nobel speech proclaimed that "America cannot act alone" and called for "standards that govern the use of force," the ringing declaration clashed with the announcement last month that he will not sign the international Mine Ban Treaty.

As Nobel Peace Laureate Jody Williams pointed out, "Obama's position on land mines calls into question his expressed views on multilateralism, respect for international humanitarian law and disarmament. How can he, with total credibility, lead the world to nuclear disarmament when his own country won't give up even land mines?"

At the outset of his speech in Oslo, the president spoke of his "acute sense of the cost of armed conflict." Well, there's acute and then there's acute. I think of the people I met and saw in Kabul who are missing limbs, and the countless more whose lives have been shattered by war.

In the name of pragmatism, Obama spoke of "the world as it is" and threw a cloak of justification over the grisly escalation in Afghanistan by insisting that "war is sometimes necessary" -- but generalities do nothing to mitigate the horrors of war being endured by others.

President Obama accepted the 2009 Nobel Peace Prize while delivering -- to the world as it is -- a pro-war speech. The context instantly turned the speech's insights into flackery for more war.


Norman Solomon is co-chair of the national Healthcare Not Warfare campaign, launched by Progressive Democrats of America. He is the author of a dozen books including "War Made Easy: How Presidents and Pundits Keep Spinning Us to Death." For more information, go to: www.normansolomon.com

From: Z Space - The Spirit Of Resistance Lives
URL: http://www.zmag.org/zspace/commentaries/4073

_______________________________

The Peace Candidate Myth

Yeswecanistan

By WILLIAM BLUM
http://www.counterpunch.org/blum12102009.html

Excerpt:
But the shortcomings of Barack Obama and the naiveté of his fans is not the important issue. The important issue is the continuation and escalation of the American war in Afghanistan, based on the myth that the individuals we label "Taliban" are indistinguishable from those who attacked the United States on September 11, 2001, whom we usually label "al Qaeda". "I am convinced," the president said in his speech at the United States Military Academy (West Point) on December 1, "that our security is at stake in Afghanistan and Pakistan. This is the epicenter of violent extremism practiced by al Qaeda. It is from here that we were attacked on 9/11, and it is from here that new attacks are being plotted as I speak."

Obama used one form or another of the word "extremist" eleven times in his half-hour talk. Young, impressionable minds must be carefully taught; a future generation of military leaders who will command America's never-ending wars must have no doubts that the bad guys are "extremists", that "extremists" are by definition bad guys, that "extremists" are beyond the pale and do not act from human, rational motivation like we do, that we — quintessential non-extremists, peace-loving moderates — are the good guys, forced into one war after another against our will. Sending robotic death machines flying over Afghanistan and Pakistan to drop powerful bombs on the top of wedding parties, funerals, and homes is of course not extremist behavior for human beings.

And the bad guys attacked the US "from here", Afghanistan. That's why the United States is "there", Afghanistan. But in fact the 9-11 attack was planned in Germany, Spain and the United States as much as in Afghanistan. It could have been planned in a single small room in Panama City, Taiwan, or Bucharest. What is needed to plot to buy airline tickets and take flying lessons in the United States? And the attack was carried out entirely in the United States. But Barack Obama has to maintain the fiction that Afghanistan was, and is, vital and indispensable to any attack on the United States, past or future. That gives him the right to occupy the country and kill the citizens as he sees fit. Robert Baer, former CIA officer with long involvement in that part of the world has noted: "The people that want their country liberated from the West have nothing to do with Al Qaeda. They simply want us gone because we're foreigners, and they're rallying behind the Taliban because the Taliban are experienced, effective fighters."
_______________________________

Alexander Cockburn on the speech that pleased neither liberals nor the right
http://www.thefirstpost.co.uk/56920,news-comment,news-politics,the-war-cries-of-a-besieged-president
_______________________________

Bill Moyers and Michael Winship: The Land Mines Obama Won't Touch
http://blog.buzzflash.com/contributors/2157

Think Out Loud: Public Records, AND a View on Obama

Well, "Think Out Loud" and A.G. Kroger were a bust today. They spent almost an hour being politic, and saying very little that would help the public get information. But then the laws are a whole lot more about presenting the image of transparency and citizen access, than they are about bringing it to fruition and actual practice. Hope springs eternal. The one silver lining on that front is that at east the AG, under pressure from a university professor (who had already posted it), put the old $25.00 "blue book," the Attorney General's Public Records and Meetings Manual, online at:
http://www.doj.state.or.us/pdf/public_records_and_meetings_manual.pdf

See also: http://www.opb.org/thinkoutloud/shows/making-public-records-public/

Useful links from the show:

Citizen's Guide
http://www.doj.state.or.us/public_records/citizens_guide.shtml

Bill Harbaugh's blog:
http://openuporegon.blogspot.com/

Nozzl Media:
http://nozzlmedia.com/about/
________________________

Below is a pretty good article by Robert Kuttner (Books: "The Squandering of America" and "Obama's Challenge"), but it left me half full, or was that half empty? None-the-less, it is an article that gives an opinion by a leading centrist "progressive." My comments are interspersed in brackets [. . .].

Robert Kuttner
Co-Founder and Co-Editor of The American Prospect
Posted: December 6, 2009 10:00 PM
http://www.huffingtonpost.com/robert-kuttner/a-tale-of-two-obamas_b_382061.html

A Tale of Two Obamas

It was the best of Obama, it was the worst of Obama.

I was pleasantly surprised to be invited to the White House jobs summit last Thursday, where I got to watch President Obama engage with about 130 people off the cuff. And I was reminded, first hand, what drew so many of us to the promise of this remarkable outsider -- the decency, the intellect, the idealism, and the evidently progressive impulses. I came away even more bewildered and dismayed at the reality that this president, who could have been such an insurgent at a moment demanding insurgency, has been so utterly captured by the Wall Street elite, the health insurance industry elite, and the military elite.

As a friend said, "I so wanted to be supportive of a great progressive president this time instead of being back in opposition."

At the jobs session, Obama began with a ceremonial introduction, then sent the summiteers into six working groups for about two hours. He circulated among them, and concluded with an extended on-the-record plenary session leading a discussion of the jobs challenge. He was absolutely masterful, with a fine grasp of detail, and values that one could only applaud. What a contrast with George W. Bush!

All afternoon, people put forward thoughtful ideas for getting unemployment down. The elephant in the room, however, was the question of whether to increase the deficit, especially with the White House under pressure to back the scheme for a deficit-reduction commission.

So, when my turn came to ask a question, I pressed President Obama on the issue, and he did not disappoint me.

Robert Kuttner: You know, most of the things that have been proposed today cost money. And there is this concern about the federal deficit. I hope that your administration will recognize, as I know you will, that it's possible, first of all, to reduce the deficit over time and sometimes in the short run realize that you need to increase the deficit. I hope the concern about the deficit in the long run doesn't crowd out the need for additional spending in the short run.


And I also think that some of these programs that increase jobs and increase GDP are probably the fastest way to get the economy back on a track that will reduce the deficit over time. It's certainly a better way to reduce the deficit than putting ourselves into a debtor's prison, and assume we can deflate our way to recovery.

President Obama: Well, I think this is an important point. We have been talking a lot about specific initiatives. There is a macroeconomic element to this whole thing, and so let me just amplify what was just said. We have a structural deficit that is real and growing, apart from the financial crisis. We inherited it. We're spending about 23 percent of GDP and we take in 18 percent of GDP, and that gap is growing, because health care costs -- Medicare and Medicaid in particular -- are growing, and we've got to do something about that.

You then layer on top of that the huge loss of tax revenue as a consequence of the financial crisis, and the greater demands for unemployment insurance and so forth. That's another layer. Probably the smallest layer is actually what we did in terms of the Recovery Act. I think there is a misperception out there that somehow the Recovery Act caused these deficits. No. I mean, we had -- we've got a 9-point-something trillion-dollar deficit. Maybe a trillion dollars of it can be attributed to both the Recovery Act as well as the cleanup work that we had to do in terms of the banks.

It turns out, actually, TARP, as wildly unpopular as it has been, has been much cheaper than any of us anticipated. So that's not what's contributing to the deficit. We've got a long-term structural deficit that is primarily being driven by health care costs and our long-term entitlement programs. All right, so that's the base line.

Now, if we can't grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who've got jobs are paying taxes, and businesses that are making profits have taxes, are paying taxes. That's the most important thing we can do. We understand that in this administration. That's not always the dialogue that's going on out there in public, and we're going to have to do a better job of educating the public on that.

The last thing we would want to do in the midst of a -- what is a weak recovery, is us to essentially take more money out of the system either by raising taxes or by drastically slashing spending. And frankly, because state and local governments generally don't have the capacity to engage in deficit spending, some of that obligation falls on the federal government.
Having said that, what is also true is that unless businesses and global capital markets have some sense that we've got a plan, medium and long term, to get the deficit down, it's hard for us to be credible, and that also could be counterproductive.

So we've got about as difficult a economic play as is possible, which is to press the accelerator, in terms of job growth, but then know when to apply the brakes in the out-years, and do that credibly. And we are trying to strike that balance, but we're going to need help from all of you who oftentimes are more credible than politicians in delivering that message, because we want to leverage whatever public dollars are spent, and we are under no illusion that somehow the federal government can spend its way out of this recession. But it is absolutely true that any of the ideas that have been mentioned here are still going to require some public dollars, and those are actually good investments to make right now.

[Please notice that Obama, AND Kuttner, did not even mention the astronomical and debilitating cost of the folly wars in Iraq or Afghanistan, or the historic and ongoing spending on the military. Obama: "We've got a long-term structural deficit that is primarily being driven by health care costs and our long-term entitlement programs" he says, with no mention of the billions, trillions really, that we continue to spend on empire so as to control what we can't control--the world.]

Back to Kuttner:
This response was pitch-perfect. Let's see how hard the president fights for more deficit spending to put Americans back to work, and whether his State of the Union Address is as good as this impromptu answer.

It was the same week that Obama decided to buckle to the pressure from his generals on Afghanistan. For several weeks, Gen. Stanley McChrystal has been taking his case for escalation public. You wonder why Obama didn't say to McChrystal, "General, you work for me and I expect your advice to be confidential. If you want to go public, you are free to resign." President Harry Truman, when the war hero Gen. Douglas MacArthur went public with his campaign during the Korean conflict for war with China, simply fired the popular general.

[I'm not a big fan of Truman, as he set the stage for what Israel has become (and the wars we fight) by supporting their takeover of Palestine so as to receive Zionist political support in the election, but at least he could stand up to the Generals!]

It was also this week that key House Democrats caved in to Goldman Sachs on the issue of derivatives regulation [derivatives helped cause the collapse of the economy], and Treasury Secretary Tim Geithner backed the industry's efforts to weaken the measure rather than urging Congress to hang tough [Geithner helped get us into this mess too]. Late in the week, Barney Frank, chairman of the House Financial Services Committee, reached agreement with Collin Peterson, the conservative Democrat who chairs the Committee on Agriculture on the key details. In their draft, Wall Street won all of the key points -- big loopholes for derivatives involving foreign exchange, and even bigger ones for derivatives involving non-financial "end users." Bottom line: the industry's lucrative and high-risk practices of creating and trading most derivatives outside regulated exchanges will likely continue.

For the back story, see Michael Hirsh's terrific piece [ http://www.newsweek.com/id/225781 ]in the current Newsweek,in which he reports:
"This is an orchestrated, well-funded effort by the banks to manipulate our legislation and leave no fingerprints," says a congressional staffer involved in drafting the legislation. The staffer, who would speak only on condition of anonymity, passed on to Newsweek nine pages of proposed changes in the legislation intended to protect trading from open scrutiny -- all of it on paper without a letterhead -- that she [or was it really 'he'] says came from Goldman Sachs.

Where was Obama in all of this infighting? The kindest interpretation is that he was distracted by the health insurance bill, and by Afghanistan, and simply letting Geithner run the show.
Many of us in the progressive committee play a little game with ourselves called, "If the Czar only knew ..." We don't want to believe that this attractive leader is fully aware of some of the things being done in his name. If only President Obama knew, he would set things right.

Well, the Czar knows. He certainly knew who he was appointing, even if he lacks the time to parse every provision of a complex bill on financial derivatives.

Time for a pop quiz.

President Obama has turned out to be disappointingly centrist because:

A. Wall Street has immense power, and you have to be at least as radical as Roosevelt to even partially dislodge it.

B. As a consummate outsider, he concluded that he needed the blessings and the expertise of the establishment -- the financial establishment, the military establishment, the medical-industrial establishment.

C. He never really was that much of a progressive on economic issues.

D. He really believes what he says about building bridges and finding consensus -- which defaults to making accommodations with the powerful.

E. All of the above.

Robert Kuttner is co-editor of The American Prospect, a senior fellow at Demos, and author of Obama's Challenge.

Making Oregon Public Records Public

Making Public Records Public
AIR DATE: Monday, December 7th 2009
http://www.opb.org/thinkoutloud/shows/making-public-records-public/
POSTED BY: DAVID MILLER

LATEST COMMENTS

Part one: I tend to agree with Jerry Cressa for ... - refugee [ Me }

In August I submitted a FOIA request to the EPA ... - truth1

If Attorney General John Kroger has his way, Oregonians should soon know more about their ability to access state records and take part in public meetings. On Wednesday he announced that the DOJ has put the state'sPublic Records and Meetings Manual online. He also created an introductory Citizen's Guide to the somewhat complex world of public records requests, as well as an online request form (pdf) for people seeking DOJ documents.

The other big part of Wednesday's announcement was the news of the creation of a new position: the Government Transparency Counsel, whose mission is to "improve the enforcement of Oregon's open government laws":

The position will coordinate all public records requests to the Department of Justice. It will also coordinate DOJ's legal services to state agencies, boards and commissions on issues related to the Public Records Law. The new position will serve as a resource to Oregon's 36 district attorneys who handle appeals from local government denials of public records requests, and it will advise the Attorney General with respect to appeals from state agency denials of public records requests. The goal is to ensure that Oregon's Public Records Law is consistently and correctly applied, as the law requires.

At the same time, the Attorney General's office recently moved to limit the information that can be released about businesses accused of consumer fraud.

All of this falls on the heels of a fair amount of public records news. Most directly, there was a very public disagreement about whether or not someone could post the DOJ's copyrighted manual online. (The issue seems moot now that the state has posted the manual itself, but you can read the whole back and forth on U of O professor Bill Harbaugh's blog.) And then there's the Portland start-up Nozzl Media, which is based on the idea that "vast repositories of public records could be scoured by software robots and made easily available online to citizens."

What stories based on public records requests — and the information they uncovered — have stuck with you? (For a few examples, here's The Oregonian onwho plays the lottery, Willamette Week on Portland's heaviest water users, andThe New York Times on water polluters across the country (including in Oregon)).

If you're not a reporter, or an enterprising citizen muckracker, will a more streamlined public records process encourage you to make a request? What would you look for?


COMMENTS: (2 total) newest first | oldest first
{The comments are short and don't include all relevant information because OPB/ThinkOutLoud limits comments to a few paragraphs.]

In August I submitted a FOIA request to the EPA, which is now being delayed by Oregon DEQ, so I can say from personal experience how very difficult it is for citizens to access government records. When I initially asked the Oregon Attorney General's office for help, they were at first supportive. But when they became aware that some of Oregon's public agencies might be involved, they withdrew their support. The primary concern of that office, as explained to me by a public servant, is to protect those state agencies; it is not to provide transparency to Oregon's citizens. The mechanics of achieving transparency are needlessly intricate and bureaucratic because they are designed to protect government officials from accountability to citizens who might find some malfeasance in their handling of public business. By the way, Senators Wyden and Merkley and Congressmen Wu and Blumenauer came to my support for a more open and transparent government, but my experience with Oregon government makes me wonder whether local and state agencies will really be forthcoming with the information they possess.

Jerry Cressa

truth1 — Sat Dec. 5th 4:15p.m.
Reply to this comment

[ My Comment ]
Part one:
I tend to agree with Jerry Cressa for a few reasons.

Governments are often hostile to to citizen efforts, even City Council efforts, to get adequate information so as to understand issues and decisiins [oops, I meant decisions ]. If you are poor, the financial obstacles they raise can become significant. Recently, the City of Baker City wanted to charge me $108.00 for information that one might reasonably expect would be information they would have already collected to explain their efforts to enforce a property maintenance law. Later, they produced much of the information I requested in a police "dog & pony show" for the City Council.

Most recently, I asked for information concerning the public versus private benefit of the Baker City Municipal Airport, a $20 million dollar facility owned by Baker City, which, according to the latest reported budget, is using $85,288 this year from our General Fund, to help finance the airport. I requested information that would reflect how much use was related to obvious public interest like public safety and fire, and how much use was related to private use, such as recreational flying or charter flights. I was told "these records are not kept by the City. The Fixed Base Operator [ FBO ] does keep track of the number of flights, but most likely not the category (public, private, medical, etc.)." The FBO operator's wife confirmed that the record on this is not recorded. No record, no need to report. What can be done about that?
refugee — Sun Dec. 6th 8:57p.m.
Edit (you may edit your comment within 5 minutes of posting) [ I missed the deadline, sorry. ]

Part 2 [ of my comments ]:

More importantly, the city wanted to charge me to provide the names of those who lease publicly owned property subsidized by the Federal Government and city taxpayers. To avoid the charge, I asked the operator of the airport. The reason I wanted the information is that the average citizen has no idea whether a City Councilor or member of another administrative governmental body, like the Airport Commission, has a conflict of interest when making decisions that affect the airport. My thought was that we ought to know whether governing officials were using the airport for private use, such as leasing a hangar there. The FBO refused to give out the names of those sub-leasing city owned hangars that he leases from the city.

So, there is a question about what information is available from the private portion of public/private partnerships. There is another example locally involving a private non-profit corporation that receives the bulk of their funds from public dollars to administer a previously public function.

Please ask Attorney General Kroger to comment on these situations, and how a citizen may proceed to collect information that is perceived to be in the "public interest" from private contractors in charge of public assets.
refugee
Edit (you may edit your comment within 5 minutes of posting)
____________________________
More info on The Oregon Public Records and Public Meetings Law, including the Public Records and Meetings Manual at:
http://www.doj.state.or.us/public_records/

The manual that previously had to be purchased has been made available by Attorney General Kroger at:
http://www.doj.state.or.us/public_records/manual.shtml

Simon Johnson on Financial Sector of US Economy

A little "policy wonky" for some, i.e., intelligent, but if you can't believe Simon Johnson, who can you believe?
For Bio see: http://en.wikipedia.org/wiki/Simon_Johnson_(economist)
______________________

The Quiet Coup
The Atlantic, May 2009
Simon Johnson

http://www.theatlantic.com/doc/200905/imf-advice

"From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

Of course, the U.S. is unique. And just as we have the world’s most advanced economy, military, and technology, we also have its most advanced oligarchy
. . . .
The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.."

For entire article please see: http://www.theatlantic.com/doc/200905/imf-advice
________________________

Measuring The Fiscal Costs Of Not Fixing The Financial System
Posted: 05 Dec 2009 06:30 AM PST
Simon Johnson

http://baselinescenario.com/2009/12/05/measuring-the-fiscal-costs-of-not-fixing-the-financial-system/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

[For links, please see full article link above.]

This post is a slightly edited version of remarks prepared for delivery at Unwinding Public Interventions in the Financial Sector: Preconditions and Practical Considerations, IMF High-Level Conference, Thursday, December 3, 2009, Washington D.C. I participated in Session 2: Managing Fiscal Risks—Public Finance Aspects of Unwinding.

The Problem

1) The underlying fiscal problems of the U.S. have significantly worsened as a direct result of how the financial crisis of 2008-09 was handled.

2) The U.S. economic system has evolved relatively efficient ways of handling the insolvency of nonfinancial firms and small or medium-sized financial institutions. A large number of these institutions have failed so far this year, without causing major disruption to the economy.

3) The U.S. does not yet have a similarly effective way to deal with the insolvency of large financial institutions. The dire implications of this gap in our system have become much clearer since fall 2008 and there is no immediate prospect that the underlying problems will be addressed by the regulatory reform proposals currently on the table. In fact, our underlying banking system problems are likely to become much worse.

4) The executives who run large banks are aware that the insolvency of any single big bank, in isolation, could potentially be handled by the government through the same type of FDIC-led receivership process used for regular banks. However, these executives also know that if more than one such bank were to fail (i.e., default on its obligations), this could cause massive economic and social disruption across the U.S. and global economy. The prospect of such disruption, they reason, would induce the government to provide various forms of bailout. They also invest considerable time and energy into impressing this point onto government officials, in a wide range of interactions.

5) Even more problematic is the underlying incentive to take excessive risk in the financial sector. With downside limited by generous government guarantees of various kinds, the head of financial stability at the Bank of England bluntly characterizes our repeated boom-bailout-bust cycle as a “doom loop.” The implication is repeated bailout and fiscal stimulus-led recovery programs.

6) The implementation of the Troubled Asset Relief Program (TARP) exacerbated the perception (and the reality) that some financial institutions are “Too Big to Fail.” This lowers their funding costs, enabling them to borrow more and to take more risk. The consequences include a contingent fiscal liability – both for specific bank rescue measures and, on a larger scale, the fiscal stimulus needed to offset a potential future credit crisis.

7) U.S. national debt will increase substantially as a result of direct bank bailouts and, more importantly, the discretionary fiscal stimulus needed to keep the economy from declining – as well as the standard deficit due to cyclical slowdown (a feature of the “automatic fiscal stabilizers”.) Privately held net government debt will increase from around 40 percent of GDP to the 70-80 percent of GDP.

8) If any country provides unlimited government support for its financial system, while not implementing orderly bankruptcy-type procedures for insolvent large institutions, and refusing to take on serious governance reform and downsizing for major troubled banks, it would be castigated by the United States and come under pressure from the IMF. Yet this is the approach that the U.S. has implemented.

9) At the heart of every crisis is a political problem – powerful people, and the firms they control, have gotten out of hand. Unless this is dealt with as part of the stabilization program, all the government has done is provide an unconditional bailout. That may be consistent with a short-term recovery, but it creates major problems for the sustainability of the recovery and for the medium-term. Again, this is the problem in the U.S. looking forward.

10) The Obama administration argues that its regulatory reforms will rein in the financial sector in this regard. Very few outside observers – other than at the largest banks – find this convincing.

Towards a Solution

1) As legislation on restructuring the banking industry moves forward, attention on Capitol Hill is increasingly drawn to the issue of bank size. Should our biggest banks be made smaller?

2) There is a strong precedent for capping the size of an individual bank: The United States already has a long-standing rule that no bank can have more than 10 percent of total national retail deposits. This limitation is not for antitrust reasons, as 10 percent is too low to have pricing power. Rather, its origins lie in early worries about what is now called “macroprudential regulation” or, more bluntly, “don’t put too many eggs in one basket.”

3) This cap was set at an arbitrary level — as part of the deal that relaxed most of the rules on interstate banking — and it worked well (until Bank of America received a waiver).

4) Probably the best way forward is to set a hard cap on bank liabilities as a percent of gross domestic product; this is the appropriate scale for thinking about potential bank failures and the cost they can impose on the economy. Of course, there are technical details to work out — including how the new risk-adjustment rules will be enacted and the precise way that derivatives positions will be regarded in terms of affecting size. But such a hard cap would the benchmark around which all the specifics can be worked out.

5) What is the right number: 1 percent, 2 percent, or 5 percent of G.D.P.? No one can say for sure, but it needs to be a number so small that we all agree any politician who cares about our future would have no qualm letting it fail, and when doing so have confidence that our entire financial system is not at risk as it fails.

6) A hard cap at 4 percent of G.D.P. seems about right for a bank with the most conservative possible portfolio. This would mean no bank in our country would have no more than about $500 billion of liabilities, even with a relatively low risk portfolio. On a risk-adjusted basis, most investment banks would face a cap around 2 percent of GDP.

7) A large American corporation would still be able to do all its transactions using several banks. They would even be better off — competition would ensure that margins are low and the banks give the corporates a good deal. This would help end the situation where banks take an ever-increasing share of profits from our successful nonfinancial corporations (as seen in the rising share of bank value added in G.D.P. in recent decades).

8) Indeed, the whole world would soon realize that our banks are more competitive and offer better pricing than others.

9) If, as might occur, the Europeans subsidized their big banks with cheap finance and implicit subsidies, the U.S. should let our nonfinancial corporates benefit and understand that our banks may become ever smaller. We can let Europeans subsidize banking because we all get better deals through their taxpayer subsidies, and then our corporates will have more profits to bring back to America.

10) Today our politicians and regulators lack credibility. They have bailed out too many banks and need to show they have truly regained the upper hand — by showing that they are installing such a hard size cap rule without exception.

11) The litmus test is simple. Does Goldman Sachs continue to grow, and continue to be regarded as almost as good a risk as the United States government (Goldman’s Credit Default Swap spread is currently around only 70 basis points above that of the United States), because it has demonstrated it is too big to fail? Or, will the government impose a cap on the size of such institutions and require Goldman Sachs to find sensible ways to break itself into pieces – becoming small enough so that it will not be bailed out again next time?

In the Absence of Real Reform

1) Real progress towards reducing the risks inherent in the U.S. financial system is unlikely. As long as there are financial institutions that are Too Big To Fail, we face a potential fiscal cost. We should recognize this in our government budget and balance sheet accounting.

2) The overriding principle behind IMF fiscal assessments is the need to capture true total fiscal costs. Best practice for the U.S. needs to reflect this approach.

3) All subsidies and taxation – including the entire cost of supporting the continued existence of large banks – should be reflected transparently in the budget and subjected to the prioritization of the budgetary process.

4) Our current accounting for guarantees and governments’ assumption of other contingent liabilities create the impression that government actions to support the banking system are costless. This is a dangerous illusion – as seen in the recent increase in US federal government deficit and debt.

5) If we don’t recognize these costs explicitly, we run the risk of taking on ever more contingent liability. If the financial system reaches the point where its failure cannot be offset by fiscal (and monetary) stimulus, then a Second Great Depression threatens.

6) Next time, we cannot be certain that the available size of fiscal stimulus – either in the US or worldwide – will match the negative shock to demand caused by the credit crisis. Either we will already have too much debt or we will be constrained by the consequences of taking on even more debt. Or – just as in 1930 – the financial decelerator will simply be too large to be offset by any feasible fiscal measures.

By Simon Johnson