Robert Reich - 7 Lies About the Economy and Taxes

Each day, I read many, many articles that are important enough to post. Others are similarly flooded with information. Things are falling apart in so many places, so rapidly, that it becomes difficult to choose which ones to share from all those important articles. Today, I have decided to post just one, in the hope that it might be watched and read.
__

The Seven Biggest Economic Lies


By Robert Reich


October 12, 2011

 
Robert Reich - 7 Lies

 

THE SEVEN BIGGEST ECONOMIC LIES

The President’s Jobs Bill doesn’t have a chance in Congress — and the Occupiers on Wall Street and elsewhere can’t become a national movement for a more equitable society – unless more Americans know the truth about the economy.

Here’s a short (2 minute 30 second) effort to rebut the seven biggest whoppers now being told by those who want to take America backwards. The major points:

1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.

2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)

3. Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. And fewer government contractors, who would employ fewer private-sector workers. According to Moody’s economist Mark Zandi (a campaign advisor to John McCain), the $61 billion in spending cuts proposed by the House GOP will cost the economy 700,000 jobs this year and next.

4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.

5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. One of the best ways of slowing these costs is to use Medicare and Medicaid’s bargaining power over drug companies and hospitals to reduce costs, and to move from a fee-for-service system to a fee-for-healthy outcomes system. And since Medicare has far lower administrative costs than private health insurers, we should make Medicare available to everyone.

6. Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.

7. It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else.


Demagogues through history have known that big lies, repeated often enough, start being believed — unless they’re rebutted. These seven economic whoppers are just plain wrong. Make sure you know the truth – and spread it on.

_

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His "Marketplace" commentaries can be found on publicradio.com and iTunes. He is also Common Cause's board chairman.
-

For more Videos from Robert Reich, see Robert Reich's archive.

Virginia Judge Rules Mandatory Health Insurance Unconstitutional; also: Obama Tax Deal Update & WikiLeaks

In This Issue:

- Virginia Judge Rules Mandatory Health Insurance is Unconstitutional

- Two Articles From Dean Baker at CEPR on Tax Deal

- Black Caucus Opposes Tax Deal, Wants Relief for 99ers

- Entertaining Video--Ellsberg Talks WikiLeaks on "The Colbert Report"
__________

Virginia Judge Rules Mandatory Health Insurance is Unconstitutional

This is one aspect of "Obamacare" that got stuck in the craw of many across the political spectrum, including myself.
__

Virginia health-care ruling strikes down key provision of Obama's plan
By Rosalind S. Helderman
Washington Post Staff Writer
Monday, December 13, 2010; 2:39 PM

RICHMOND - A federal judge in Virginia ruled Monday that a key provision of the nation's sweeping health-care overhaul is unconstitutional, the most significant legal setback so far for President Obama's signature domestic initiative.

U.S. District Court Judge Henry E. Hudson found that Congress could not order individuals to buy health insurance.

In a 42-page opinion, Hudson said the provision of the law that requires most individuals to get insurance or pay a fine by 2014 is an unprecedented expansion of federal power that cannot be supported by Congress's power to regulate interstate trade.

"Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market," he wrote. "In doing so, enactment of the [individual mandate] exceeds the Commerce Clause powers vested in Congress under Article I [of the Constitution.]

Hudson is the first judge to rule that the individual mandate is unconstitutional. He said, however, that portions of the law that do not rest on the requirement that individuals obtain insurance are legal and can proceed. Hudson indicated there was no need for him to enjoin the law and halt its implementation, since the mandate does not go into effect until 2014.

See original article for all.

December 13, 2010
Judge Voids Key Element of Obama Health Care Law
By KEVIN SACK
New York Times

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The judge wrote that his survey of case law “yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person’s decision not to purchase a product, not withstanding its effect on interstate commerce or role in a global regulatory scheme.”

Judge Hudson is the third district court judge to reach a determination on the merits in one of the two dozen lawsuits filed against the health care law. The others — in Detroit and Lynchburg, Va. — have upheld the law. Lawyers on both sides said the appellate process could last another two years before the Supreme Court settles the dispute.

Find entire article here.
_____

Obama Tax Deal Update

Two Articles From Dean Baker at CEPR

The Tax Deal and the Apocalypse

Excerpt:

To be an important person in Washington these days requires a solid record of failure. That is why we have 25 million people unemployed, underemployed or out of the labor force altogether. And those who got us into this disaster are still overwhelmingly the ones calling the shots. So people who want a realistic assessment of what the defeat of this tax package means for the economy may not want to rely on the usual suspects.

Dean Baker
Truthout, December 13, 2010

See article on original website

The proponents of the tax deal that President Obama and the Republicans negotiated last week have gotten out their TARP and Iraq War hysterics. All the important people are now telling us that if Congress doesn’t approve the package it will be the end of the world!!!!!

To be an important person in Washington these days requires a solid record of failure. That is why we have 25 million people unemployed, underemployed or out of the labor force altogether. And those who got us into this disaster are still overwhelmingly the ones calling the shots. So people who want a realistic assessment of what the defeat of this tax package means for the economy may not want to rely on the usual suspects.

As I have noted before, the major risk of this deal is that it would undermine Social Security. The deal temporarily lowers the Social Security tax by 2 percentage points. In principle the tax rate will go back to its current rate after the end of next year.

However, several prominent Republicans have already made it clear that they will call the expiration of this tax cut a tax increase. And they will point out that it is an extremely regressive tax increase that disproportionately hits low and moderate-income workers.

At the end of the 2011 the unemployment rate is virtually certain to be well above 8.0 percent and quite likely above 9.0 percent. In this context does anyone seriously believe that President Obama will refuse to go along with efforts by the Republicans in Congress to continue the tax cut beyond the scheduled deadline?

If the payroll tax is indefinitely lowered by 2.0 percentage points, then Social Security’s finances will appear much more shaky. As it stands, Social Security is fully funded through the year 2037, but that doesn’t keep the Washington Post and National Public Radio from running endless scare stories about the program’s funding crisis.

If the payroll tax is permanently reduced by 2.0 percentage points it would double the program’s projected 75-year shortfall. This would give far more ammunition to the Social Security fear mongers.

While Obama’s deal ostensibly provides for general revenue to be placed into the trust fund to make up the lost payroll tax revenue, there is little reason to believe that this funding would persist beyond the first year. Again, does anyone believe that President Obama will stand up for Social Security on this point?

In short, this deal is a very large first step toward cutting and/or privatizing Social Security. If the President wants to remove this risk he can simply arrange to have the exact same tax cut given to workers from general revenue. There is no legitimate reason for the Republicans to reject this change in structure, unless their intent is to destroy Social Security.

It’s really that simple. The structure of the deal would be changed unless the point is to undermine Social Security.

What about the threatened apocalypse if we don’t do the deal? Well, the deal would provide a net stimulus to the economy and also give money to unemployed workers who really need it. Not getting this boost would be bad news.

But it is hard to stomach the whining from people who were too damned lazy or incompetent to think about the consequences of the collapse of an $8 trillion housing bubble. These workers are unemployed because the folks calling the shots messed up.

In other words, the reason that we have 25 million people unemployed or underemployed is that people like Ben Bernanke, Timothy Geithner and Larry Summers messed up royally on their jobs. Fortunately for the folks on top, employment is not dependent on performance.

More to the point, this will not be our last chance to extend unemployment benefits or get additional stimulus. Unemployment benefits are hugely popular across the political spectrum. Even conservatives understand that the reason people are unemployed is because the economists messed up, not that the workers themselves lack the necessary skills or desire to work.

Congress will feel considerable pressure to extend benefits. In the same vein, the Republicans in Congress know that they will be evaluated in large part on the state of the economy in 2012. This means that they will have incentive to support additional stimulus, under whatever name they choose to give it.

In short, the train is not leaving the station. If this deal goes down, there will be other deals in the months ahead.

Remember, it was the Gingrich Congress that gave workers the first increase in the minimum wage in more than 15 years. They needed something to show for the 1996 elections. This Republican Congress is likely to feel the same pressure. [Bold Emphasis Added]

__

Social Security Tax Cut: A Deal Breaker

Dean Baker
The Hill, December 9, 2010

Exerpt:

In principle there is nothing wrong with financing a portion of Social Security benefits with money from general revenue. This was in fact the original intention of President Roosevelt when he designed the program. However, the fact is that the program has always been financed exclusively by the Social Security tax that is taken from workers’ wages. This makes the tax regressive, but it has the advantage that workers can quite legitimately say that they have paid for their benefits. This will be to some extent less true if a portion of the funding comes from general revenue rather than payroll taxes. In short, getting funding from general revenue opens a new line of attack on the program.

The prospect of this tax cut being the basis for a renewed attack on Social Security could be dismissed if the program had defenders in high places, but this does not appear to be the case. Most of the Republicans would almost certainly like to privatize Social Security.

Unfortunately, the Obama Administration cannot be counted on to defend the program either. In fact, top officials in the administration seem to view attacks on Social Security and its supporters as a way to prove their manhood. President Obama’s decision to appoint two arch-enemies of Social Security to chair his Fiscal Responsibility commission certainly does not inspire confidence among supporters of Social Security.

In short, supporters of Social Security have good reason to oppose the tax deal. It is easy to have the same stimulus with an expanded version of President Obama’s Making Work Pay tax cut. Supporters of Social Security should reject the latest deal and tell President Obama to stand behind his own tax cut. This is what presidents are supposed to do.

See entire article on original website
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.
_____

Black Caucus Opposes Tax Deal, Wants Relief for 99ers

December 12, 2010 - by Donny Shaw

Hot on the heels of Rep. Sheila Jackson-Lee’s [D, TX-18] statement Thursday on the House floor that an extension of unemployment insurance for 99ers should be added to Obama’s tax deal, the Congressional Black Caucus has announced that adding 99ers relief is essential for winning the support of their members.

“The CBC has reached a consensus on three areas that we believe we can unite behind, ”http://www.opencongress.org/person/show/400364_Robert_Scott">Rep. Bobby Scott [D, VA-3] said at a press conference on Friday. “First, we support the 13-month extension of unemployment insurance benefits, but we all agree that we also ought to extend benefits for the so-called 99ers — those who are exhausting the benefits they have.”
View the full press conference here.

The deal brokered by Obama and congressional Republicans would extend the four tiers of unemployment benefits that expired on December 1st, but would not create a new tier of benefits for those who have moved through those tiers and are still unemployed. The four tiers provided up to 99 weeks of benefits in some states, and we’re now more than 99 weeks out from the brunt of the ‘08 financial crisis. That means that, before the tiers expired, a wave of people who lost their jobs as a direct result of Wall Street recklessness and regulatory incompetence began being dropped off the backend of the federal insurance programs. There’s no official estimate of how many 99ers there are already, but most estimates put the number around 5 million.

The Congressional Black Caucus has 42 members, which might not be enough to force a change in the tax deal. If all House Republicans vote for the bill, only 39 Democratic votes would be needed to secure passage. In September, 31 conservative Blue Dog Democrats wrote a letter to the leadership advocating for all of the Bush tax cuts to be extended, so they can be counted as likely yeses. According to the Wall Street Journal, the Obama Administration is currently working to round up the final votes they need by lobbying lame duck Democrats in the House who lost re-election in November and are no longer accountable to voters.

Ultimately, whether or not additional weeks for 99ers can be added to the bill is up to Speaker Rep. Nancy Pelosi [D, CA-8] and the House Democratic leadership. The Senate is expected to pass the bill early this week, and Pelosi and crew have the choice of passing it as is, or passing it with an amendment. Even if Pelosi goes with an amendment, it’s possible that it would address other items — the estate tax or the length of the extension of the existing unemployment tiers — and not seek to add anything for the 99ers. As the WSJ reports today, Pelosi is “walking a perilous path” by attempting to satisfy her Democrats, who strongly oppose the deal, while at the same time trying to shepherd some form the deal into law so the tax cut debate is not pushed back to the next, more Republican, session of Congress.

See article for other links.
_____

Video--Ellsberg Talks WikiLeaks on "The Colbert Report"

Daniel Ellsberg on Colbert Report: Julian Assange is Not a Criminal Under the Laws of the United States

"[Daniel's segment starts at 4:06]

ELLSBERG: Julian Assange is not a criminal under the laws of the United States. I was the first one prosecuted for the charges that would be brought against him. I was the first person ever prosecuted for a leak in this country—although there had been a lot of leaks before me. That’s because the First Amendment kept us from having an Official Secrets Act. . . . The founding of this country was based on the principle that the government should not have a say as to what we hear, what we think, and what we read. . . .

If Bradley Manning did what he’s accused of, then he’s a hero if mine and I think he did a great service to this country. We’re not in the mess we’re in, in the world, because of too many leaks. . . . I say there should be some secrets. But I also say we invaded Iraq illegally because of a lackof a Bradley Manning at that time."

__

Billy Bragg and Wilco-- "The Unwelcome Guest"
By Woodie Guthrie

Obama's Deficit Commission Proposals & Will he Cave on Tax Cuts for the Rich?

The Corporate Republican and Corporate Democrat Appointed by the Corporate Obama Come Up With a (Surprise!) Corporate Idea

Articles:
__

Obama Deficit Commission Criticized for Proposals to Slash Social Security, Medicare

The co-chairmen of the bipartisan presidential deficit commission released a list of recommendations Wednesday on ways to reduce the nation’s deficit by $4 trillion by 2020. Co-chairmen Erskine Bowles and Alan Simpson have proposed raising the retirement age for Social Security to 69 by the year 2075, decreasing the cost of living benefits for Social Security recipients, imposing new limits on the Medicare health insurance program, and ending several middle-class tax breaks. We speak with economist Robert Kuttner. [includes rush transcript]

Guest:
Robert Kuttner, Journalist and economist. He is the co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. His latest book is A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future.

Related stories
• New $600B Fed Stimulus Fuels Fears of US Currency War
• Nobel Laureate Joseph Stiglitz: Foreclosure Moratorium, Government Stimulus Needed to Revive US Economy
• Paul Mason on Live Working or Die Fighting: How the Working Class Went Global
• "A Departure to Be Welcomed": Robert Scheer on Resignation of White House Economic Adviser and Deregulation Proponent Lawrence Summers

RUSH TRANSCRIPT

JUAN GONZALEZ: On Wednesday, the co-chairmen of the bipartisan presidential deficit commission released a list of recommendations on ways to reduce the nation’s deficit by $4 trillion by 2020. Co-chairmen Erskine Bowles and Alan Simpson have proposed raising the retirement age for Social Security to 69 by the year 2075, [decreasing] the cost of living benefits for Social Security recipients, imposing new limits on Medicare health insurance programs, and ending several middle-class tax breaks.

Many of the proposals read like a wish list for the Republican Party, including the elimination of funding for the Corporation for Public Broadcasting, the capping of jury awards in malpractice cases, and a major reduction in corporate income taxes.

But the commission is also making significant cuts to the Pentagon budget. The draft proposals call for the closing of one-third of the nation’s overseas military bases, a temporary freeze on Defense Department salaries, and a reduction on the Pentagon’s reliance on private contractors.

AFL-CIO President Richard Trumka slammed the commission’s proposals. He said, quote, "The chairmen of the Deficit Commission just told working Americans to 'drop dead.' Especially in these tough economic times," Trumka said, it is, quote, "unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare."

The commission’s co-chair, Erskine Bowles, said Wednesday that the nation is facing an economic crisis if the budget deficit is not addressed.

ERSKINE BOWLES: We are on the most predictable path towards an economic crisis that I can imagine. The path we’re on today is not sustainable. And I don’t know a soul on this commission or anywhere else in the Congress that believes it is. The arithmetic is compelling. This debt is like a cancer that will truly destroy this country from within if we don’t fix it, and we can’t grow ourself out of this problem. We could have double-digit growth for decades and not solve this problem. We can’t tax our way out of this problem, and we can’t cut our way out of this problem. It’s going to take some combination thereof.

JUAN GONZALEZ: To talk more about the deficit commission’s proposals, we’re joined by the journalist and economist Robert Kuttner. He’s the co-founder and co-editor of The American Prospect magazine. His latest book is called A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future.

Welcome to Democracy Now!, Robert Kuttner.

ROBERT KUTTNER: Thanks so much for having me. Thanks so much for having me.

JUAN GONZALEZ: Your reaction to the preliminary proposals, because obviously the commission has not yet even voted on these proposals. This is sort of the outline of what they’re considering. Your reaction?

ROBERT KUTTNER: Well, the only thing worse than the economics is the politics. The economics are totally perverse. Bowles talks about being on a path to an economic crisis. Of course, we’re in an economic crisis. We’re in a prolonged recession that bears more resemblance really to a depression. And you cannot get out of a depression by austerity. The idea that you should have an arbitrary set of cuts in the deficit at a time when you need more public spending is totally perverse. It’s the economics of Herbert Hoover. It’s the politics of the Republican right. And it’s one more indication of the capture of the Obama administration by Wall Street.

I mean, Erskine Bowles gets over $300,000 a year for attending a few meetings of Morgan Stanley, the investment bank, on whose board he sits, so he gets more money in board fees than 99 percent of Americans earn. And you’ve got three privately funded commissions by the Peterson Foundation, Pete Peterson, proposing the same stuff. It’s intended to create a drumbeat to carry out a wish list that has long been the goal of fiscal conservatives, that has nothing to do with this crisis. Social Security is in surplus for the next 27 years. So, the idea that you can somehow get the budget closer to balance by cutting Social Security is perverse. It’s politically insane.

And if the President had the kind of spine that we hoped he had when we elected him, he would be saying, "No way are we going to balance the budget on the backs of working people." Instead, I think the risk is that the President is going to embrace some version of this. And the hope is that the four progressives on the commission, three of whom have already said "no way," plus Max Baucus, the chair of the Senate Finance Committee who’s on the commission, will view this as a threat to his prerogatives as a Senate committee chairman. The best thing about this commission is that maybe it will deadlock.

JUAN GONZALEZ: And when you say the four progressives, who are the other progressives that you are expecting to stand up on these issues?

ROBERT KUTTNER: Well, Jan Schakowsky, who’s a member of the Democratic House leadership, she’s a very progressive member of Congress from Chicago; Xavier Becerra, also a progressive; and Dick Durbin, the senator from Illinois. They have said "no way." Andy Stern, the former head of the Service Employees International Union, is on the commission. Andy is a bit of a free spirit. Andy loves to see if there can be some kind of a deal. But I think this particular deal will even stick in Stern’s craw. So, I think the hope is that the Republicans, some of them, will say, "Well, nothing that reduces defense spending or reduces tax loopholes are we going to support," and the liberals on the commission will hang tough and say, "No way are we going to cut Social Security and Medicare."

I think the problem is that the editorialists of this country—if you read this morning’s New York Times editorial—are saying, "Well, gee, anything that the left and the right don’t like must be pretty good." And that’s exactly wrong. I mean, this is a case where the so-called center just completely has it wrong. You cannot get out of a depression by having deeper cuts in spending. And I think if you look at the criticism of the Federal Reserve policy of buying treasuries because it doesn’t know what else to do, in the hope that that will lower interest rates and somehow stimulate recovery, the Fed is doing that as a last resort because Congress is opposed to increasing social investment. The only way you can really get out of a prolonged slump like this is to increase social investment in job creation, in the infrastructure, in the clean energy that the country needs. And yet that path seems to be blocked. And instead of fighting for some degree of public investment, Obama, who, after all, appointed this commission, is at risk of embracing at least some of its proposals.

So I think the only thing that’s going to block this—and we heard some of this from Rich Trumka—the progressive movement needs to put forward its own version of a budget that would cut defense spending, cut tax loopholes, insist on suspending the Bush tax cuts for the wealthy, and dramatically increase social investment, and explain to the American people why that’s a better route out of the real crisis that we’re in. There’s one resource I want to commend to all of your viewers and listeners. It’s a new website, ourfiscalfuture.org, which proposes a counter-strategy for getting the economy out of this mess. That’s a coalition of progressive think tanks—Demos, where I’m a fellow, Economic Policy Institute, Century Foundation. And we have a huge fight on our hands, because the other side is investing tens of millions, if not hundreds of millions, of dollars in a propaganda effort on behalf of austerity. It’s backed by Wall Street. And all we can do is try and argue that this whole set of proposals is bad economics and bad politics for the Obama administration and the Democrats.

JUAN GONZALEZ: Well, Robert Kuttner, one of the arguments of those who would support many of these cuts are saying that this will allow the government to further cut the nominal tax rates for—not only for high income, but for middle-class Americans, as well. But isn’t the reality—I mean, there was a time in this country when the highest tax brackets, in the 1950s, were being taxed at a 90 percent rate. Now they’re down into the mid-thirties, and they think that that is too high a rate, and they want it lowered further. What about this tax policy that now, for years, has continued to reduce the tax rates for the highest-earning Americans in the country?

ROBERT KUTTNER: Sure. Well, the Alice in Wonderland character of this whole exercise is demonstrated by the fact that, on the one hand, they’re talking about some kind of a tax deal where you cut loopholes and you raise rates—or lower rates. And by the way, one of the so-called loopholes that they want to close is the child tax credit. Hundreds of millions of dollars of relief for working poor people, where you get a refundable tax credit to help you raise your kids, that’s one of the supposed loopholes that the commission wants to get rid of. That’s crazy. Also, the idea that you cut loopholes and then cut rates, that produces no net increase in revenue. It simply reshuffles the deck.

And the other thing that’s deceptive is that at the same moment that the Republicans on the panel are proposing this deal, they’re also demanding that the Bush tax cuts from 2001, which expire at the end of this year, be extended not just for the 98 percent of Americans who make less than $250,000 a year, as President Obama proposes, but for very, very rich people. Now, continuing those tax cuts for very rich people would add almost a trillion dollars to the deficit over the next ten years, and yet the commission is treating that as absolutely untouchable, because there’s no way the Republicans would buy into that. So, you’re absolutely right. I mean, if we want to do something about the deficit in the long run—and we should not be doing anything about it in the short run. In the short run, with the economy in the condition that it’s in, we need more deficit spending, not less. But if we want to deal with the deficit in the long run, restore higher tax rates on the people who got us into this mess, who are still making an absolute killing and, unlike working people, who can afford to pay higher taxes.

JUAN GONZALEZ: Also, I’d like to ask you—you were mentioning the people who got us into this mess. Clearly, the enormous amounts of speculation that has been occurring—and the financial speculation has been growing exponentially, not only in the United States, but across the world, on markets. There’s never any kind of a discussion of being able to tax stock transactions on all of these various markets, which obviously, if these companies want to continue to engage or investors want to continue to engage in speculative activity, why not have the government tax it as a means of being able to close our deficit? But that’s never somehow discussed.

ROBERT KUTTNER: Well, no, and it’s not even in the proposal. And again, here’s Erskine Bowles. He’s on the board of directors on one of the top five banks that would actually be taxed if you taxed financial speculation. And he’s the chair of this, appointed by President Obama. And that proposal is nowhere to the seen. I would call that a conflict of interest. I mean, if Obama had put, you know, Rich Trumka as one of the two co-chairs, the right would be screaming bloody murder, and so would Wall Street. And yet, Wall Street got one of its people, not as the Republican co-chair, but as the Democrat co-chair.

JUAN GONZALEZ: Well, I want to thank you very much for being with us, Robert Kuttner, journalist and economist. He’s also the co-editor of The American Prospect magazine and the author of A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future. And we’ll continue to be covering this issue of what happens with the deficit commission proposals.
__

CEPR Statement on Deficit Commission Proposals
Center for Economic and Policy Research (CEPR)

Statement on Deficit Commission Proposals
For Immediate Release: November 10, 2010
Contact: Alan Barber, (571)306-2526

Washington, D.C.- Dean Baker, Co-Director of the Center for Economic and Policy Research (CEPR) released the following statement on the proposals offered by Erskine Bowles and Alan Simpson, co-chairs of the President's deficit commission:

"Senator Alan Simpson and Erskine Bowles appeared to have largely ignored economic reality in developing the proposals they presented to the public today.

"The country is suffering from 9.6 percent unemployment with more than 25 million people unemployed, underemployed or who have given up looking for work altogether. Tens of millions of people are underwater in their mortgage and millions face the prospect of losing their home to foreclosure.

"This situation is not the result of government deficits, contrary to what Mr. Bowles seemed to suggest at the co-chairs' press conference today. The downturn was caused by the bursting of an $8 trillion housing bubble. This bubble was the basis of the construction and consumption demand that drove the economic expansion through 2007. 

"The large government deficits are the only factor sustaining demand following the loss of this bubble wealth. If today's deficit were smaller, we would not be helping our children; we would just be putting their parents out of work. Simpson and Bowles somehow think they have covered this concern by delaying their cuts until fiscal year 2012, 11 months from now. Virtually all projections show the unemployment rate will still be over 9.0 percent at the point when the Simpson-Bowles cuts begin to slow the economy further. This leaves the economy like a plane with one engine already out and Simpson Bowles prepared to knock out the other engine as well.

"The failure to understand current deficits contributes to a misunderstanding of the debt burden. For example, Simpson and Bowles raised fears of an exploding debt reaching 90 percent of GDP by the end of the decade. There is no reason that the Fed can't just buy this debt (as it is largely doing) and hold it indefinitely If need be, the Fed can use other tools at its disposal to ensure that this expansion of the monetary base does not lead to inflation.

"This creates no interest burden for the country, since the Fed refunds its interest earnings to the Treasury every year. Last year the Fed refunded almost $80 billion in interest to the Treasury, nearly 40 percent of the country's net interest burden.

"This means that the country really has no near-term or even mid-term deficit problem, just paranoia being spread by many of the same people who led the economy into its current disastrous situation.

"Over the longer term, the country is projected to face a deficit problem but this is almost entirely attributable to the projection that private sector health care costs grow at an explosive rate. This projected growth rate of health care costs would eventually lead to serious budget problems in addition to leading to enormous problems for the private sector. However, the underlying problem is the broken health care system, not public sector health care programs. For some reason, though, Simpson-Bowles never directly addresses these of the health care system.

"Simpson and Bowles apparently never considered a Wall Street financial speculation tax (FST) as a tool for generating revenue. This is an obvious policy-tool that even the IMF is now advocating, in recognition of the enormous amount of waste and rents in the financial sector. Through an FST, it is possible to raise large amounts of revenue, easily more than $100 billion a year, with very little impact to real economic activity. The refusal to consider this source of revenue is striking since at least one member of the commission has been a vocal advocate of financial speculation taxes. It is also worth noting that Mr. Bowles is a director of Morgan Stanley, one of the Wall Street banks that would be seriously impacted by such a tax.

"Finally, it is striking that the Co-Chairs felt the need to address Social Security, even though it was not part of their mandate. The commission's mandate was to deal with the country's fiscal problems. Since Social Security is legally prohibited from ever spending more than it has collected in taxes, it cannot under the law contribute to the deficit. Their proposal would cut benefits for tens of millions of middle class workers who are overwhelmingly dependent on Social Security for their retirement income. It would also raise the retirement age for lower income workers who have seen little increase in life expectancy.

"While there are some positive items in the report (it would limit the mortgage interest rate deduction get rid of the deduction for cafeteria benefit plans), it suffers from the fact that the co-directors never reflected on their basic economic assumptions. It is hard to avoid the conclusion that this exercise was a waste of time and that we should go back to having Congress determine our budgets through the normal process rather than secret commissions."

###
__

Cuts to Social Security and Medicare are Fiscal Commission’s Primary Solution to Nation’s Debt Crisis

By NCPSSM | November 10, 2010

 Sometimes you’d just rather be wrong…and this is one of those times. 

The Chairmen of the President’s Fiscal Commission unveiled their solutions for the nation’s debt/deficit mess in a hastily called news conference today and– as predicted– it’s all about cuts to Social Security and Medicare.

“America’s retirees, disabled and their families had hoped for a balanced approach to solving our nation’s fiscal crisis.  Unfortunately, that is not what we received in today’s report by the Chairmen of the President’s Fiscal Commission.  This proposal relies far too heavily on benefit cuts which will hurt millions of Americans.  Lowering COLA’s which hit even current retirees, raising the retirement age, and making benefit cuts in Social Security have nothing to do with solving this fiscal crisis and do not offer a balanced solution to debt reduction by any stretch of the imagination.”…Barbara B. Kennelly, President and CEO 

Specifically, the proposal released today by the Chairmen of the National Commission on Fiscal Responsibility and Reform, former Senate Alan Simpson and Erskine Bowles would: 

Raise the Retirement Age to 69 – this proposals calls for a gradual increase to age 68 by the year 2050 and 69 by 2075. This would result in substantial benefit reductions for the generations of Americans.

 Reduce Cost of Living Adjustments – this proposal suggests a different method of calculating the cost-of-living adjustment resulting in smaller COLAs as soon as 2012, impacting even current retirees. Estimates are this would lower benefits by approximately 3 percent after 10 years of retirement and 6 percent after 20 years of retirement. 

Cut Social Security Benefits – by changing Social Security’s benefit formula this proposal would cut benefits for millions of future retirees.  

More Medicare cuts – this time directly to benefits  

Increased Cost Sharing for Seniors – Congress just enacted the Affordable Care Act, which included billions in savings from Medicare yet did not target beneficiaries.  However, this Commission proposal includes hundreds of billions of additional Medicare cuts, over $100 billion of which will come directly out of the pockets of seniors in the form of increased cost-sharing.  The average senior is already spending 30% of his/her Social Security benefit on Medicare Part B & Part D out-of-pocket costs alone; this proposal would increase that amount.   

Reduced Provider Reimbursements – This proposal includes a new round of cuts in Medicare provider reimbursements before reforms in the health care law have even been implemented, which could leave seniors without access to affordable health care.   

“America’s seniors and their families want Washington to get its fiscal house in order; however, they also know Social Security did not create this economic mess and should not foot the bill for failed economic policies of the past.  The American people are serious about deficit reduction and have said in poll after poll that they’ll support a balanced proposal.  This isn’t it.”…Barbara B. Kennelly, President and CEO

The only good news here is no one takes this proposal seriously beyond those who’ve pushed this anti-Social Security and Medicare agenda from the beginning, such as the Peterson Foundation and all of the other anti-entitlement groups it funds. 

According to CBS:

The document, from co-chairs Erskine Bowles and Alan Simpson, is not the bipartisan commission’s final proposal, which is due at the end of the month. It likely could not win support from 14 of the commission’s 18 members, which is necessary to advance it to Congress for consideration.
__

Cutting Social Security is the New TARP
Cenk Uygur
Host of The Young Turks
Posted: November 11, 2010 12:41 AM
. . . .
They propose to cut the top rate from 35% to 23% for the personal income tax, and the corporate tax rate would get cut from 35% to 26%. What an unbelievable joke. So, you have to cut Social Security and Medicare because you just had to give the rich one more gigantic tax cut? They'll claim they are getting rid of some tax exemptions and credits, but that doesn't come close to making up for the tax cuts they have proposed.

But we have to thank them for making their intentions undeniably clear. This Deficit-Reduction Commission has nothing to do with the deficit. It never did. I . . . always thought it was an excuse to cut Social Security to pay for the tax cuts that went to the rich and ate up the Social Security surplus. It turns out, it's more audacious than that. It cuts Social Security to pay for whole new round of tax cuts for the rich. The balls on these guys.

A new poll out by PPP indicates that when asked how to balance the budget, 43% of real Americans said tax the wealthy, 22% said cut defense spending and only 12% said cut Social Security. They didn't stutter. That's crystal clear. If some of our current politicians make the mistake of backing these cuts for Social Security, those numbers are going to come back to bite them. And they'll be our former politicians. I, for one, will work the rest of my life to kick out of office anyone who signs off on this robbery. I don't give a damn what party they claim to be from. That includes the president.

Through all of my frustrations with the president, I have never called for a primary opponent against him in 2012. And I don't know any other established progressive that has. If he pushes for this plan, he should definitely get a primary challenger. Because I couldn't vote for a guy who agreed to rob the middle class like this. This is definitely the last straw. If he does this, then he was never on our side to begin with.
__

Ten Flash Points In The Fiscal Commission Chairmen's Proposal
Dan Froomkin
froomkin@huffingtonpost.com

The two deficit-hawk extremists President Obama put in charge of his fiscal commission released their personal suggestions for cutting the federal budget deficit on Wednesday. And while it's quite possible that not a one of them will make it into the commission's official recommendations, which require the approval of 14 of the 18 commissioners (not just two), the document will inevitably be welcomed as a "serious" contribution to the debate - at least by Republicans and conservative Democrats.
. . . .
As New York Times opinion columnist Paul Krugman writes: “Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies -- goodies that fairly obviously, even without having the details, would go largely to the very affluent.”
__

See Also:

The Wall Street TARP Gang Wants to Take Away Your Social Security
by Dean Baker [CEPR]

Just over two years ago, the Wall Streeters were running around Congress and the media saying that if they don't immediately get $700 billion the world will end. Since they own large chunks of both, they quickly got their money.

Even more important than the hundreds of billions of loans issued through the TARP was the trillions of dollars of loans and guarantees from the Fed and the FDIC. This money came with virtually no strings attached. It kept Goldman Sachs, Citigroup, Morgan Stanley, and Bank of America and many others from collapsing. As a result, folks like Goldman CEO Lloyd Blankfein are again pocketing tens of millions a year in wages and bonuses, instead of walking the unemployment lines. Instead, 15 million ordinary workers are being told to just get used to being unemployed; it's the "new normal."

But wait, it gets worse. The thing about Wall Streeters is that no matter how much money you give them, they always want more. Now they are using their political power and control over the media to attack Social Security. . . . .
[See article above for rest and for links]
__

Many deficit commission staffers paid by outside groups
By Dan Eggen
Washington Post Staff Writer
Wednesday, November 10, 2010; 8:12 PM
__

The Draft Proposal
_____

Will Obama Cave (once again) on Tax Cuts for the Rich?

Obama’s First Stand

Robert Reich
WEDNESDAY, NOVEMBER 10, 2010

The President says a Republican proposal to extend the Bush tax cuts to everyone for two years is a “basis for conversation.” I hope this doesn’t mean another Obama cave-in. 

Yes, the President needs to acknowledge the Republican sweep on Election Day. But he can do that by offering his own version of a compromise that’s both economically sensible and politically smart. Instead of limiting the extension to $250,000 of income (the bottom 98 percent of Americans), he should offer to extend it to all incomes under $500,000 (essentially the bottom 99 percent), for two years.

The economics are clear:

First, the top 1 percent spends a much smaller proportion of their income than everyone else, so there’s very little economic stimulus at these lofty heights.

On the other hand, giving the top 1 percent a two-year extension would cost the Treasury $130 billion over two years, thereby blowing a giant hole in efforts to get the deficit under control.

Alternatively, $130 billion would be enough to rehire every teacher, firefighter, and police officer laid off over the last two years and save the jobs of all of them now on the chopping block. Not only are these people critical to our security and the future of our children but, unlike the top 1 percent, they could be expected to spend all of their earnings and thereby stimulate the economy.

Conservative supply-siders who argue the top 1 percent will stop working as hard if they have to return to the 39 percent marginal rate of the Clinton years must be smoking something (probably an expensive grade).

The incomes of the top are already soaring (Wall Street is reading a 5% boost in bonuses, executive salaries and perks are back on the trajectory they were on before the collapse, and the stock market is booming), so it’s hard to argue much hardship.

Besides, only earnings over $500,000 would be affected because — remember — we’re talking about the marginal tax rate.

In addition, the Clinton years weren’t exactly bad years, economically, for the top 1 percent.

Finally, the Bush tax cuts didn’t trickle down anyway. To the contrary, between 2001 and 2007, the median wage dropped. And Bush’s record on jobs was pitiful.

The politics are even clearer. Over the next two years, Obama must clarify for the nation whose side he’s on and whose side his Republican opponents are on. What better issue to begin with than this one?

The top 1 percent now takes in almost a quarter of all national income (up from 9 percent in the late 1970s), and its political power is evident in everything from hedge-fund and private-equity fund managers who can treat their incomes as capital gains (subject to a 15 percent tax) to multi-million dollar home interest deductions on executive mansions. 

If the President can’t or won’t take a stand now — when he still has a chance to prevail in the upcoming lame-duck Congress — when will he ever?

City Budget, Bogart Resigning?, House Cleaning at City Hall, & More

IN THIS ISSUE:
[edited 6/27/10]

- Quotes- Barney Frank on NPR's "All things Considered"

- Can Anyone Understand the Budget?

- Is City Manager Steve Bogart Resigning?

- Don Williams Appointment as Justice of the Peace Pro-Tem on Hold

- Cleaning House, er, City Hall

- Essays on "Tragedy of the Commons" from Jay Hanson

- Supreme Court Ruling on "Aiding Terrorists"

- Latest Possible Threat to Social Security Safety Net
______________

Quotes-Barney Frank on NPR's "All things Considered

SIEGEL: But do people behave differently because it's being broadcast on...?

Rep. FRANK: No, that's a very good question, Robert. The fact that we did this so publicly, we got an even stronger bill out of the conference committee than I had thought. And I know that the public pressure was one of the reasons. And the public pressure was there because people knew they were being watched on C-SPAN. And the fact that what you see will be preserved forever is a powerful force for the public good in this case.

______________

Can Anyone Understand the Budget?
(Warning, this article may make your eyes blur over and bring on dizzy spells!)

The City Council and volunteer Budget Committee just completed many grueling weeks wrestling with the City Budget, and what they came up with has shaken some at City Hall.

The Budget Committee consisted of the Council and seven members from the community--Randy Daugherty--Chairman, owner of Baker Garage and Chevy dealership, previously with 4 years on Council, Alan Blair--long-time member of the committee, Debra Bainter--Chamber of Commerce, Nelson Clarke--insurance agent, Roger Coles--Manager of Coles Funeral Home, Peter Ellingson--Of Ellingson Lumber, Former Mayor with 12 years on Council. and Reid Langrill--CFO of Oregon Power Solutions and previously CFO for Micron Technology. My understanding is that several members of the committee, including Ellingson and Daugherty, were in favor of moving towards regaining a comfortable reserve position that the City had struggled for and attained prior to the time when former City Manager Steve Brocato was hired (See: CITY: Trio spent 35 years on Baker City Council), hence the wish to get an Ending Fund Balance in the range of $1 million.

Committee meetings were also attended by City Staff, including City Manager Steve Bogart, Finance Director Jeanie Dexter, and (now or soon former) Community Development Director and Assistant City Manager Jennifer Watkins. (TidBit: It is my understanding, that when City Manager was an interim CM back in 2004-2005, he had established a separate fund for things like termination payments, separation agreements, and etc., but Steve Brocato eliminated it during his tenure by rolling it over into the general fund.)

The thing people notice about budgets immediately is that they are complex, seemingly arcane, and almost incomprehensible to the layperson upon the first, second, or even third reading. That's a major reason why most citizens don't attend budget meetings. They'd like to know what is going on financially, they probably even have strong opinions on how the money (some of it their money) should be spent, but they have households to keep up and/or families to feed, and they feel they can't just give it all up to take the time for getting a degree in accounting or business administration so as to figure it all out and go to budget meetings. (I'm wondering how much different this situation is from that of the high priests in earlier societies, who held power because they had information that would allegedly not be comprehended by the common folk?) To my knowledge, the only non-committee citizens attending regularly were Jason Bland and now Councilor Gail Duman. Sometimes it seems like even some councilors and administrators, and surely myself and some reporters, can misinterpret the figures that are tossed about. One wonders, given the importance of budgets to citizens (who benefits?--who pays?"), why they are written in such a manner that only accountants and savants can initially understand them.

I myself was a late-comer to the process, but my ears were open and I did attend the June 14 Special Council meeting with the Budget Committee (called after the committee had essentially finished its work), the June 21 County Economic Development Council Meeting on funding for the City's Economic Development function, and the June 23 Council meeting to approve the Budget (Click here for a copy of the 2010-2011 Baker City Budget Resolution No. 4637 that I posted on Scribd). I was also given the audios of four previous Budget meetings by City Manager Bogart upon request, although my recent questions to him about the budget have gone unanswered. Given the seeming complexity of the budget, my late start, and problems associated with getting answers, it seemed prudent to take some time before offering up opinions in a blog. Councilors Bonebrake, Button, and Calder, have taken time to respond to some of my questions, with Councilor Bonebrake being particularly helpful in understanding the ramifications of the illusory $136,000 for Economic Development support that was included in the City Manager's proposed budget and the budget approved by the Budget Committee before they knew of the possible deletion of $136,000 in support from the County controlled transient occupancy tax dollars. The fact that both the Budget Committee's and proposed City Manager's budgets discussed at the June 23 Council Meeting had not accounted for the deletion of $136,000 from the revenue side of the equation allowed for the obscuring of the real figures for the Ending Fund Balance and the differences between them.

Some of my confusion was contributed to by the problems faced by the stereotypical wild-eyed blogger--that would be me, or anyone who seriously questions policy--is the access problem. People in that position most often have to rely on their own videos, hearsay, or publicly available information that is often slow in coming. I've posted some videos with commentary on the meetings involved in the process on my YouTube channel. I will be posting more.

This last Budget Process for the next fiscal year 2010-1011 (Yes--budgeteers aren't allowed use a normal year--budgeting tradition has invented their own year--July 1 to June 30), was no exception when it comes to understanding what is going on. In this blog, and perhaps more in the future I hope to shed some light on the puzzle, but it would be good to start with the information that has been reported thus far in the Herald (Council cuts two positions, June 25, 2010)

This was a pretty good article, but they too fell into the 136K confusion concerning the difference in the Ending Fund Balance (EFB) between the final Council budget and the City Manager's budget.

The Herald article states:

Pope pointed out that the original proposed submitted by Bogart had a reserve of about $671,000 — about $60,000 less than the budget the Council adopted — yet the original budget didn’t eliminate Stackle’s or Watkins’ jobs or eliminate the community and economic development department.

He also noted that the budget the Council adopted Wednesday does not include money to replace Police Lt. Brian Harvey, who left the city to take the job as La Grande’s Police Chief.

"For that $60,000 you lose three people,” Bass said. “Hey people, if we are that hard up we ought to take out a loan.”

I certainly did not understand what had occurred after leaving the meeting, and was confused by statements that came out of Q & A between Councilor Pope and the City Manager. See: YouTube-CM Bobart & Milo Pope's Initial Comments.m4v). I was subsequently disappointed with the Council's low Ending Fund Balance, having relied on Councilor Pope's and the City Manager's numbers. The small difference between the City Manager' recommended Budget ($686,849) and the one finally approved by Council ($722,832), did seem insignificant. After all, the Budget Committee, trying to reverse the continuous decline of City reserves in recent years, was shooting for $1 million and had approved a budget with an EFB of $904,849. It had been over $2 million not too many tears back, which would certainly come in handy today as we face maintenance issues with streets and other infrastructure, as well as looming costs for Public Employees Retirement System (PERS) along with sewage and water treatment.

The problem with their statements however was that neither the CM's nor Councilor pope's figures accounted for the by then missing $136,000 from the revenue budget line for economic and community development.

Statements by Councilors Pope and Bass that the difference was $60,000 went unquestioned. If you subtract the missing $136,000 for the CM's published proposed EFB of $686,849, you arrive at $550,849, so the actual difference in the EFBs between CM Bogart's proposal and that approved by the Council was actually $171,983 ($722,832 - $550,849), not $60,000 or so. My understanding from Councilor Bonebrake is that the CM's proposal is now $671,000, which leaves an EFB of $535, 000, which would put the actual difference between the two budgets at $187,852 (not $60,000 as stated by Bogart, Pope, and Bass)

All I can say is that the Councilors seem to be trying to bring the budget back in line with economic realities, like "The Great Recession," and to rebuild the cash balance (depleted by the previous City Manager) to a place where it will be able to help mitigate problems associated with street maintenance, sewer treatment and maintenance, and a host of other issues. Look for large increases in your water and sewer bills if we don't.

Enough for now.

More background from the June 14 special Council Meeting on budget (YouTube):

Budget Committee Chair Randy Daugherty discusses City Manager's budget revisions.

- "What are you asking for Steve? . . . Are the changes workable?"
- Thought the committee would like to redo the 2008-2009 budget
- "If we had leased the police station instead of bought it, we wouldn't be here tonight."
- "We can't as a city continue to spend more than our resources are . . . ."

Budget Committee Chair Randy Daugherty discusses difficult Issues:

- Divisions and lack of trust in Baker City
- Economic uncertainties that face the city and the nation.

More background from the Baker City Herald archives:

Councilor: Cut city spending
by MIKE FERGUSON, Baker City Herald November 21, 2008
Dennis Dorrah proposes trimming 5 percent from city’s budget for next fiscal year

City looks to pare its $2 million cash balance

City budget board breezes through process
__________

Is City Manager Steve Bogart Resigning?

I have it from reliable people who should know, that City Manager Steve Bogart is resigning in September.

Steve Bogart, former County Commissioner and City manager prior to his current term, was hired in late January to take the place of Tim Collins, who resigned, and whose time in that office ended on January 31, 2010. It had been thought that Mr. Bogart had committed for a year's service, during which time the Council would re-initiate a new search for a City Manager. His early resignation has created a need to begin that search immediately, as there are but a few months remaining in his tenure.

I do not know why he resigned early, but there have been recent rumors that he had threatened to resign over the current direction of the City budget. He had stated in one of the Budget Committee Meetings that the path the committee was taking might result in a "train wreck," or something like that, if I recall correctly--this despite the Council and business budgetary experience that is quite evident on the Budget Committee.

I would have asked him why he resigned, but he has not answered many of my most recent e-mails on the budget, and I don't like to bother people on their days off. Some had thought that he was working for the Council and that he had indicated that he could work with the budget provided by them, but until his brother gives his opinions in the Courier, or until the Herald can get some answers from him, I simply do not know (Steve please call me and let me know, I am interested in your views, as always.). Generally, Steve has been very forthcoming with me on his views when I can get a rsponse, but he has been extremely busy lately. The job of City Manager is so fraught with political uncertainty that it takes a very dedicated or motivated person to even consider it.
__________

Don Williams Appointment as Justice of the Peace Pro-Tem on Hold

The appointment of Don Williams was put on hold at the June 23, 2010 County Commissioner's meeting.

Apparently, the Commissioners have decided to (very appropriately) place an advertisement in the local papers for qualified applicants before filling the position.

Thanks to Gary Dielman and others for writing to the Commissioners about this appointment.

Baker County Commissioners Warner, Kerns, and Stiff:

I understand that you're planning to appoint Don Williams as Justice of the Peace Pro Tem at your June 23 meeting.

Given Don Williams' outspoken objections to the ouster of Steve Brocato as city manager of Baker City and his backing of the recall of Baker City Mayor Dorrah and Council Calder, I don't think Baker City voters, who rejected the recall by over 2 to 1, will be sympathetic to your appointing him to a position of authority and power in Baker County government.

And personally, given Williams' vicious and ill-informed public attack on City Councilor Beverly Calder concerning the building she owns on Valley St. which [she] is attempting to rescue after decades of neglect by previous owners, I do not want such an intemperate person as Williams appointed JP Pro Tem to impartially dispense justice in Baker County.

Surely you can find a more qualified and moderate person in Baker County to be JP Pro Tem than Williams.

Gary Dielman

__________

Cleaning House, er, City Hall

The following photos are of archived documents tht were recently removed from City Hall. The photos were taken at Baker Sanitary's recycling station on Campbell by an interested citizen.

City Documents in Baker Sanitary Dumpster

The word from the City is that they are old records, bills, confidential, and etc., some from as far back as the 1920's. Some had been stored in the basement and brought up to the attic for going through by the recorder.

They say they are keeping records according to the legal time schedule, 2, 5, 7 years etc. and tossing what they don't need to keep any longer. A Title V worker named Bill, whose funding runs out at the end of the month, under the supervision of Jennifer Watkins and Becky Fitzpatrick, has been sorting them out. I asked whether they are keeping records they might need for the City to defend itself in the Brocato lawsuit, and I was assured me they were.

It's reassuring to know that resigning City Manager Bogart and soon to be ex-employee Watkins (an avid Brocato supporter, to say the least) have gotten rid of City documents.
__________

Essays on "The Tragedy of the Commons"
Jay Hanson  America2Point0

A "commons" is any resource used as though it belongs to all. In other words, when anyone can use a shared resource simply because one wants or needs to use it, then one is using a commons. For example, all land is part of our commons because it is a component of our life support and social systems.

A commons is destroyed by uncontrolled use—neither intent of the user, nor ownership are important. An example of uncontrolled use is when one can use land (part of our commons) any way one wants.
Tragedy of the Commons Re-stated
by Jay Hanson -- 06/14/97

"To the free man, the country is a collection of individuals who compose it ... He recognizes no national goal except as it is the consensus of the goals that the citizens severally serve. He recognizes no national purpose except as it is the consensus of the purposes for which the citizens severally strive."
—Milton Friedman, CAPITALISM AND FREEDOM

"We may well call it 'the tragedy of the commons,' using the word 'tragedy' as the philosopher Whitehead used it: 'The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things.'"
—Garrett Hardin, TRAGEDY OF THE COMMONS

As the 21st century races towards us like a huge wave on the horizon, we fear that we are not going to be able to ride this one out, that global currents will pull us to the bottom and tear us apart. We look to our political leadership and see that it has been corrupted by freedom—everything is for sale—and all political decisions are reduced to economic ones. In other words, we have no political system—no means to save ourselves—only an economic system (one-dollar-one-vote).

In 1944, 29 reindeer were moved to St. Matthew Island. The reindeer thrived by "exploiting" (making the best use of) their rich "commons".

The island had no natural predators to keep the reindeer population in check, so the population swelled to 6,000 animals during the next 19 years. Suddenly the commons was depleted and the population crashed until only 42 animals remained alive! The reindeer could have avoided the crash by keeping the population within the carrying capacity of the island, but reindeer politics couldn't manage it, so naturally the population crashed.

In his 1968 classic, "Tragedy of the Commons", Garrett Hardin illustrates why the reindeer crashed and why communities everywhere are headed for tragedy—it's because freedom in the commons brings ruin to all:

Visualize a pasture as a system that is open to everyone. The carrying capacity of this pasture is 10 animals. Ten herdsmen are each grazing an animal to fatten up for market. In other words, the 10 animals are now consuming all the grass that the pasture can produce.

Harry (one of the herdsmen) will add one more animal to the pasture if he can make a profit. He subtracts the original cost of the new animal from the expected sales price of the fattened animal and then considers the cost of the food. Adding one more animal will mean less food for each of the present animals, but since Harry only has only 1/10 of the herd, he has to pay only 1/10 of the cost. Harry decides to exploit the commons and the other herdsmen, so he adds an animal and takes a profit.

Shrinking profit margins force the other herdsmen either to go out of business or continue the exploitation by adding more animals. This process of mutual exploitation continues until overgrazing and erosion destroy the pasture system, and all the herdsmen are driven out of business.

Most importantly, Hardin illustrates the critical flaw of freedom in the commons: all participants must agree to conserve the commons, but any one can force the destruction of the commons. Although Hardin describes exploitation by humans in an unregulated public pasture, his commons and "grass" principle fit our entire society.

Private property is inextricably part of our commons because it is part of our life support and social systems. Owners alter the emergent properties of our life support and social systems when they alter their land to "make a profit"—cover land with corn or concrete.

Neighborhoods, cities and states are commons in the sense that no one is denied entry. Anyone may enter and lay claim to the common resources. One can compare profits to Hardin's "grass" when any number of corporations—from anywhere in the world—drive down profits by competing with local businesses for customers.

One can see wages as Hardin's "grass" when any number of workers—from anywhere in the world—can enter our community and drive down wages by competing with local workers for jobs. People themselves even become commons when they are exploited (are made the best use of) by other people and corporations. Everywhere one looks, one sees the Tragedy of the Commons. There is no technological solution to the problem of the commons, but governments can act to limit access to the commons, at which time they are no longer commons.

In the private-money based political system we have in America, everything (including people) becomes the commons because money is political power, and all political decisions are reduced to economic ones. In other words, we have no political system, only an economic system—everything is for sale. Thus, America is one big commons that will be exploited until it is destroyed. Like the reindeer population on St. Matthew Island, our population will crash too.

Will the coming global currents will pull us to the bottom and tear us apart? Our only chance to avoid it is to invent a political system that money can't buy—and then limit freedom in the commons. If we can't, we're dead.

BAD DRIVES OUT GOOD

By Jay Hanson (8/1/97)

"The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust." 
—James Madison, FEDERALIST #57 (1787)
"I see the White House is like a subway—you have to put in coins to open the gates." 
—Johnny Chung (1997)

Systems that select for failure are often called Greshamite systems after the English financier Sir Thomas Gresham (1519?-1579). His name was given to Gresham’s Law, the economic principle that "bad money drives out good. " When depreciated, mutilated, or debased (bad) money circulates concurrently with money of high value (e.g., silver or gold), the good money disappears because of hoarding. As more and more people notice that good money is being hoarded, more and more good money is hoarded—runaway positive feedback. Ultimately, the monetary system fails.

American Democracy can also be seen as a Greshamite system. To understand why, first consider the theoretical premise of our political system: a government that is willing to act for the Common Good. Next, consider two very different candidates for public office. Ms. Honesty believes in the principle embodied in our Pledge of Allegiance "... liberty and justice for all." If Honesty is elected, she will treat everyone fairly and pursue the Common Good.

Mr. Corruption is a good capitalist who is motivated to pursue his own private gain. He has studied the system carefully and knows that he can gain political power by rewarding his friends and punishing his enemies.

Which of these candidates has the advantage? Obviously, Corruption has the advantage! Here's why:

Mr. Jones is a local developer who has money, employees and influence. Philosophically, he is an average, self-interested individual who was trained by television (and to some extent by his family and formal education) to consume as much as he can. In fact, Jones can’t even remember ever hearing about public goods.

Will Mr. Jones contribute to Ms. Honesty? No, why should he? If she wins, Jones will receive justice and fairness from her anyway (a public good). If she loses, Jones will be punished by Mr. Corruption for helping her.

Will Mr. Jones contribute to Mr. Corruption? Yes, because Jones has been promised a change of zoning (a private good) so he can build his new gated community. Jones writes a check for $2,000 to Mr. Corruption and has a few dozen employees volunteer to help out on Corruption’s campaign.

American Democracy tends to elect politicians who are motivated to maximize their own private gain (there are some rare exceptions). Runaway positive feedback occurs as politicians need more and more money to run for public office. As this process continues, more and more politicians are corrupt.

Bad drives out good and Corruption drives out Honesty. To what end? In the end, we do not even have a political system (one-person-one-vote), only an economic system (one-dollar-one-vote).

"Public goods" are goods and services that can be shared by a whole group of people. Some examples of public goods are national defense, police protection, government, and environmental services. As a rule, government must provide public goods for two reasons:

1. Private investors won't supply public goods because they can't make a profit on them.

2. Voluntary efforts won't supply public goods because the voluntary contribution of any one person exceeds the services received by that person. For example, suppose the cost of national defense to each taxpayer is worth the services each taxpayer receives. But if the entire cost were spread out evenly among only those who will voluntarily pay, then the individual cost will exceed the individual services. Thus, only government can supply a national defense through its taxing powers.
This same principle applies to voluntary efforts at cleaning roads, parks, and so on. Voluntary efforts will ultimately fail because those who don't contribute (called "free riders") can use the services anyway. So there is little incentive for volunteers to contribute over the long term. Ultimately, volunteers will "burn out".

[ Civic-minded citizens can even be seen as a form of corporate welfare! Instead of corporations paying for their social and environmental destruction, civic-minded volunteers donate their own time and money to keep their communities together while CEOs give themselves million-dollar bonuses! ]

"Private goods" are restricted goods. A couple of examples of private goods are gated communities and toll roads (only those who pay can enjoy the services).

America's political system is based on private money: whoever can raise the most money usually wins. Our private-money political system naturally exhibits a strong bias towards private goods—and private profits. This bias towards private goods leads to less public infrastructure and more private infrastructure (e.g., private police, gated communities, etc.). Unfortunately, this leads to a two class society: one with private infrastructure and one with no infrastructure; and ultimately, these will lead to the disintegration of the state.

THE TRAGEDY OF THE COMMON REVISITED

by Beryl Crowe (1969)
reprinted in MANAGING THE COMMONS
by Garrett Hardin and John Baden
W.H. Freeman, 1977; ISBN 0-7167-0476-5

"There has developed in the contemporary natural sciences a recognition that there is a subset of problems, such as population, atomic war, and environmental corruption, for which there are no technical solutions.

"There is also an increasing recognition among contemporary social scientists that there is a subset of problems, such as population, atomic war, environmental corruption, and the recovery of a livable urban environment, for which there are no current political solutions. The thesis of this article is that the common area shared by these two subsets contains most of the critical problems that threaten the very existence of contemporary man." [p. 53]

ASSUMPTIONS NECESSARY TO AVOID THE TRAGEDY

"In passing the technically insoluble problems over to the political and social realm for solution, Hardin made three critical assumptions:

(1) that there exists, or can be developed, a 'criterion of judgment and system of weighting . . .' that will 'render the incommensurables . . . commensurable . . . ' in real life;

(2) that, possessing this criterion of judgment, 'coercion can be mutually agreed upon,' and that the application of coercion to effect a solution to problems will be effective in modern society; and

(3) that the administrative system, supported by the criterion of judgment and access to coercion, can and will protect the commons from further desecration." [p. 55]

ERODING MYTH OF THE COMMON VALUE SYSTEM

"In America there existed, until very recently, a set of conditions which perhaps made the solution to Hardin's subset possible; we lived with the myth that we were 'one people, indivisible. . . .' This myth postulated that we were the great 'melting pot' of the world wherein the diverse cultural ores of Europe were poured into the crucible of the frontier experience to produce a new alloy -- an American civilization. This new civilization was presumably united by a common value system that was democratic, equalitarian, and existing under universally enforceable rules contained in the Constitution and the Bill of Rights.

"In the United States today, however, there is emerging a new set of behavior patterns which suggest that the myth is either dead or dying. Instead of believing and behaving in accordance with the myth, large sectors of the population are developing life-styles and value hierarchies that give contemporary Americans an appearance more closely analogous to the particularistic, primitive forms of 'tribal' organizations in geographic proximity than to that shining new alloy, the American civilization." [p. 56]

"Looking at a more recent analysis of the sickness of the core city, Wallace F. Smith has argued that the productive model of the city is no longer viable for the purposes of economic analysis. Instead, he develops a model of the city as a site for leisure consumption, and then seems to suggest that the nature of this model is such is such that the city cannot regain its health because the leisure demands are value-based and, hence do not admit to compromise and accommodation; consequently there is no way of deciding among these value- oriented demands that are being made on the core city.

"In looking for the cause of the erosion of the myth of a common value system, it seems to me that so long as our perceptions and knowledge of other groups were formed largely through the written media of communication, the American myth that we were a giant melting pot of equalitarians could be sustained. In such a perceptual field it is tenable, if not obvious, that men are motivated by interests. Interests can always be compromised and accommodated without undermining our very being by sacrificing values. Under the impact of electronic media, however, this psychological distance has broken down and now we discover that these people with whom we could formerly compromise on interests are not, after all, really motivated by interests but by values. Their behavior in our very living room betrays a set of values, moreover, that are incompatible with our own, and consequently the compromises that we make are not those of contract but of culture. While the former are acceptable, any form of compromise on the latter is not a form of rational behavior but is rather a clear case of either apostasy or heresy. Thus we have arrived not at an age of accommodation but one of confrontation. In such an age 'incommensurables' remain 'incommensurable' in real life." [p. 59]

EROSION OF THE MYTH OF THE MONOPOLY OF COERCIVE FORCE

"In the past, those who no longer subscribed to the values of the dominant culture were held in check by the myth that the state possessed a monopoly on coercive force. This myth has undergone continual erosion since the end of World War II owing to the success of the strategy of guerrilla warfare, as first revealed to the French in Indochina, and later conclusively demonstrated in Algeria. Suffering as we do from what Senator Fulbright has called 'the arrogance of power,' we have been extremely slow to learn the lesson in Vietnam, although we now realize that war is political and cannot be won by military means. It is apparent that the myth of the monopoly of coercive force as it was first qualified in the civil rights conflict in the South, then in our urban ghettos, next on the streets of Chicago, and now on our college campuses has lost its hold over the minds of Americans. The technology of guerrilla warfare has made it evident that, while the state can win battles, it cannot win wars of values. Coercive force which is centered in the modern state cannot be sustained in the face of the active resistance of some 10 percent of the population unless the state is willing to embark on a deliberate policy of genocide directed against the value dissident groups. The factor that sustained the myth of coercive force in the past was the acceptance of a common value system. Whether the latter exists is questionable in the modern nation-state." [p.p. 59-60]


EROSION OF THE MYTH OF ADMINISTRATORS OF THE COMMONS

"Indeed, the process has been so widely commented upon that one writer postulated a common life cycle for all of the attempts to develop regulatory policies. The life cycle is launched by an outcry so widespread and demanding that it generates enough political force to bring about establishment of a regulatory agency to insure the equitable, just, and rational distribution of the advantages among all holders of interest in the commons. This phase is followed by the symbolic reassurance of the offended as the agency goes into operation, developing a period of political quiescence among the great majority of those who hold a general but unorganized interest in the commons. Once this political quiescence has developed, the highly organized and specifically interested groups who wish to make incursions into the commons bring sufficient pressure to bear through other political processes to convert the agency to the protection and furthering of their interests. In the last phase even staffing of the regulating agency is accomplished by drawing the agency administrators from the ranks of the regulated." [p.p. 60-61].


Garrett Hardin on Carrying Capacity

Animal lovers and professional biologists should be able to agree on the ultimate goal of game management: to minimize the aggregate suffering of animals. They differ in their time horizons and in the focus of their immediate attention. Biologists insist that time has no stop and that we should seek to maximize the wellbeing of the herd over an indefinite period of time. To do that we must "read the landscape," looking for signs of overexploitation of the environment by a population that has grown beyond the carrying capacity.

By contrast, the typical animal lover ignores the landscape while focusing on individual animals. To assert preemptive animal rights amounts to asserting the sanctity of animal life, meaning each and every individual life. Were an ecologist to use a similar rhetoric he would speak of the "sanctity of carrying capacity." By this he would mean that we must consider the needs not only of the animals in front of us today but also of unborn descendants reaching into the indefinite future.

Time has no stop, the world is finite, biological reproduction is necessarily exponential: for these combined reasons the sanctity strategy as pursued by animal lovers in the long run saves fewer lives, and these at a more miserable level of existence, than does the capacity strategy pursued by ecologically knowledgeable biologists.
—Garrett Hardin
__________

Supreme Court Ruling on "Aiding Terrorists"
__

Intimidating Supporters of Palestine
US Fear Factory Kills Free Speech


By Yvonne Ridley
http://www.counterpunch.org/ridley06222010.html
http://www.informationclearinghouse.info/article25789.htm



June 22, 2010 "Information Clearing House" -- AMERICA is still embarrassed by the infamous McCarthy Hearings which ruined the lives of thousands of innocents during the Fifties.



Anyone then, suspected of being linked to communism was arrested, interrogated and either imprisoned or forced to give names of others suspected of communist tendencies. And so the fear and intimidation spread like a great plague across the USA.



Names were blacklisted, careers and lives ruined as the authorities ruthlessly traded on peoples’ fears, paranoia and weaknesses.



With little or no evidence people were found guilty and anyone daring to question any of the actions and the wild accusations also had suspicion cast upon them. But hey folks, that was back in the Fifties and various administrations resolved the same insane hysteria, hatred and fears would never again cast a dark shadow across the Land of the Free.



Sadly, the Salem-style witch hunts have returned, but the new villains are no longer communists. The Red Scare has been replaced by those who shout Viva Palestina!



From the very highest law-makers right down to ordinary John Doe there is an irrational fear so great that it holds many of them hostage in their homes, workplaces and schools.



Their vision has become so skewed they are unable to distinguish between what is real and what is not.



And so when they’re told that heavily armed Israeli soldiers shoot peace activists at near point blank range because they are defending themselves, few dare to question.


When they see babies dying on the Gaza Strip because of lack of medical equipment because of the Israeli-enforced blockade, they remain silent.



And even fewer dare to criticize Israel.



Millions upon millions of Americans wake up frightened, go to sleep frightened while others feed on the hatred and bile spewed out by politicians, preachers, academics and the media who tell them Israel is good and Palestine is bad.



There are some politicians who want to see the heroic Americans who took part in the Viva Palestina convoys and the recent Gaza-bound Freedom Flotilla prosecuted as terrorists.



Today I trolled through some of the pages in the American media and there, among the column inches, are stories that perfectly illustrate the Zionist Fear Factory in operation.



The Los Angeles Times reveals that UC Irvine has told its university students that the Muslim Student Union will be suspended for one year because it dared to criticize Israel and protested during a speech given by the Israeli Ambassador. So there you have it – freedom of speech is now banned.



The unprecedented action also sends out a chilling message to students across the USA who might consider demonstrating, rallying or protesting against the Zionist state and its supporters. Free speech, it seems, is a thing of the past in Barack Obama’s America. 



And should you be in any doubt, read a story about the latest decision to emerge from the US Supreme Court.


In a majority 6-3 ruling it becomes virtually impossible for anyone to put food into the mouths of malnourished babies in Gaza or to give money to a charity to do the humanitarian act for you.



Insane as it sounds, it is now a crime in America to work for peace and human rights in Gaza because the day-to-day running of The Strip is carried out by the democratically-elected Hamas government. Therefore it would be virtually impossibly to bypass Hamas to operate in Gaza.



In an astonishing McCarthy-like ruling any American who even offers advice to banned organizations like Hamas, including legal assistance and information on conflict resolution, will be prosecuted as terrorists. Be afraid, be very afraid … this is happening in the USA, here and now.



Barack Obama’s barmy administration reckons that even giving advice intended for peaceful purposes will amount to "material support" for terrorism. "The supreme court has ruled that human rights advocates, providing training and assistance in the nonviolent resolution of disputes, can be prosecuted as terrorists," said David Cole, a Georgetown university law professor who argued the case before the court. In the name of fighting terrorism, the court has said that the first amendment [on free speech] permits congress to make it a crime to work for peace and human rights. That is wrong."



The ruling is designed to intimidate Palestinian supporters and their fundraising activity. Some have already been prosecuted and jailed for raising cash for social groups dealing with issues such as housing and welfare in Gaza. 



The government's case was enthusiastically argued in February by Elena Kagan, who is now the Obama administration's nominee to the supreme court. She said: "Hizb’Allah builds bombs. Hizb’Allah also builds homes. What Congress decided was when you help Hizb’Allah build homes, you are also helping Hizb’Allah build bombs. That's the entire theory behind the statute.”


Well if that’s the case an interesting legal situation looms on the horizon – unless all of this legislation is purely designed for Palestinian supporters.


A Congressional subcommittee, led by Representative John F. Tierney, Democrat of Massachusetts, has uncovered evidence showing US tax dollars are funding the Taliban.


The source is a Pentagon-issued $2.1 billion dollar contract called Host Nation Trucking, which pays for the movement of food and supplies to some 200 American bases. It appears Afghan security firms have been extorting as much as $4 million a week and then funneling the spoils to warlords and the Taliban in return for a safe passage. In short, the US is financing the enemy and undermining international efforts to stabilize the country. 

Hmm, isn’t this material support for terrorism? I think we need to have the Commander in Chief charged with immediate affect.



Yvonne Ridley is one of the founders of Viva Palestina and European President of the international Muslim Women’s Union
__

Published on Tuesday, June 22, 2010 by The San Francisco Chronicle
Giving Peace Advice to Terrorist Can Be Illegal
by Bob Egelko

WASHINGTON - The government can prosecute private citizens for giving advice to a foreign organization - on how to negotiate peace or take its case to the United Nations, for example - if the group is on the U.S. terrorist list, the Supreme Court ruled Monday.

In the most important foreign policy and civil liberties case of their 2009-10 term, the justices ruled 6-3 that a law prohibiting "material support" of foreign terrorist organizations can be used against people who claim to be providing only peaceful, humanitarian assistance.

Any tangible support - money, legal aid or political advice - "frees up other resources within the organization that may be put to violent ends," Chief Justice John Roberts said in the majority opinion.

"It also importantly helps lend legitimacy to foreign terrorist groups - legitimacy that makes it easier for those groups to persist, to recruit members, and to raise funds - all of which facilitate more terrorist attacks," Roberts said.

Dissenting Justice Stephen Breyer protested that the majority's interpretation "would deny First Amendment protection to the peaceful teaching of international human rights law," on the grounds that it might enable terrorists to conduct sham negotiations.

Those who intend to aid terrorism should be prosecuted, but any broader use of the law would violate free speech, argued Breyer, whose dissent was joined by Justices Ruth Bader Ginsburg and Sonia Sotomayor. The majority included liberal Justice John Paul Stevens as well as the court's conservatives - Roberts and Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.

Furious debate
The ruling touched off a furious debate over the government's power to prevent dissidents from helping blacklisted organizations. The ban on "material support" for foreign terrorists was signed into law by President Bill Clinton in 1996 and was expanded in the USA Patriot Act that President George W. Bush signed in 2001.

Under Monday's decision, "human rights advocates, providing training and assistance in the nonviolent resolution of disputes, can be prosecuted as terrorists," said David Cole, lawyer for organizations and individuals who challenged the law.

The plaintiffs sought to train members of two groups on the State Department's terrorist list - the Kurdish Workers Party in Turkey and the Liberation Tigers of Tamil Eelam in Sri Lanka - in peaceful conflict resolution and advocacy before the United Nations.

Those forms of assistance to such "deadly groups" could lead to prosecution, the court said Monday, while insisting it was not restricting free speech. "Plaintiffs may say anything they wish" on their own behalf, Roberts said.

Carter concerned
Civil liberties advocates said they also feared repercussions for U.S.-based critics of the Israeli government, who might be charged with aiding Hamas, which Washington has designated as a terrorist group. One such critic is former President Jimmy Carter, whose private Mideast diplomatic efforts have included contact with Hamas.

The ruling "threatens our work and the work of many other peacemaking organizations that must interact directly with groups that have engaged in violence," said Carter, whose organization filed arguments with the court.

On the other side, Annemarie McAvoy, a Fordham law professor and former federal prosecutor, said the court recognized the "reality factor" of a world in which groups such as al Qaeda thrive on aid funneled through charities.

"By helping the terrorists, even tangentially, they're freeing up the terrorists to focus on other things, such as violent attacks," McAvoy said.

During arguments in February, Solicitor General Elena Kagan, now President Obama's nominee to the court, defended the law and urged a broad interpretation that would allow prosecution of a U.S. citizen who filed a legal brief on behalf of a terrorist organization.

"What Congress decided," Kagan told the court, "is that when you help Hezbollah build homes, you are also helping Hezbollah build bombs."

Read the ruling
The ruling in Holder vs. Humanitarian Law Project, 08-1498, can be read at links.sfgate.com/ZJWF .

© 2010 The San Francisco Chronicle
Article printed from www.CommonDreams.org
__________

Latest Possible Threat to Social Security Safety Net

Commentary: Hands off Social Security: There are better ways to cut the national debt.

By JONATHAN BATTAGLIA AND ROBERT WEINER
Posted: 7:18 p.m. Friday, June 25, 2010

The Social Security Trustees' Annual Report on the program's finances comes out Wednesday, delayed from March by the health bill. It will be turned into a marketing tool by advocates of cutting Social Security to reduce the national debt.

Among those, the president's newly appointed National Commission on Fiscal Reform (the "debt commission") is threatening to strangle the economic lifeblood of seniors by denying the solvency of Social Security and then using the solvent funds for other purposes.

It's an illusion that cutting Social Security would reduce the deficit. If the new report does not point out that the money seniors have given to Social Security keeps it solvent through 2043, and after that 80 percent funded, it's a propaganda fraud for defunders.

Moreover, that future shortfall is only a blip - a point missed by nearly all media. After the Baby Boomers reap their Social Security benefits, since those Boomers have had the fewest children ever (2.1 per couple vs. the current 2.7 rate), the system will return to full solvency because it will pay benefits to fewer people.

To cut a national deficit by cutting Social Security, which does not have a deficit, is theft from seniors who have paid in. If a bank told a customer, "Sorry. We've spent your money on other items," would anyone accept that or say: "Fine, you made money on my money but you still owe me mine. Pay up."

The debt commission is littered with politicians and industry CEOs who have a history of wanting to scale back Social Security benefits. House Judiciary Committee Chairman John Conyers, D-Mich., told us in an interview, "The commission is loaded with billionaires who want to convert Social Security's money to business."

Commission Co-chairman Erskine Bowles is linked to Wall Street as a Morgan Stanley board member, and Honeywell CEO David Cote to the defense industry, both of which would benefit from Social Security's money. Will these captains of industry stand up for people who need Social Security the most? Or look for ways to transfer its money to defense and stocks?

Co-chairman Alan Simpson, along with Dave Camp, Judd Gregg, Tom Coburn and Mike Crapo, made statements supporting cutting or privatizing Social Security. Sen. Richard Durbin told "bleeding-heart liberals" to be open to Social Security cuts. Alice Rivlin co-authored a 2005 report titled Restoring Fiscal Sanity that advocated $47 billion in entitlement cuts, including an "increase in the retirement age under Social Security."

Why could the administration not appoint former Connecticut Congresswoman Barbara Kennelly, president of the National Committee to Preserve Social Security? Or Al Gore, who famously said he would protect Social Security in a "lockbox"? Or expert "policy wonk" Bill Arnone, a partner at Ernst & Young, co-author of the firm's retirement planning guide, a spokesman for the positive economics of Social Security?

The program remains indispensable in enabling the 38 million senior citizens over 65 nationwide and 3 million in Florida to live their lives in dignity. Without Social Security, nearly half of Americans age 65 or older would be below the poverty line. For two-thirds of the elderly, Social Security provides the majority of their income. For one-third, it provides nearly all.

We need the courage of the late Florida Congressman Claude Pepper. In 1978, when Commerce Secretary Juanita Kreps suggesting raising the retirement age, Rep. Pepper and House Social Security Chairman James Burke ran over for a meeting, and Rep. Pepper said they would "fight it to our death." Ms. Kreps suddenly said the proposal hadn't been drawn up.

The debt commission has plenty of options. Defense Secretary Robert Gates said the military needed to cut its "gusher of defense spending." Congress could also scale back the Bush tax cuts for the wealthy to the levels they were under President Clinton and could get rid of tax breaks for U.S. corporations doing business overseas. The deficit needs to be cut, but not at the cost of our seniors.

During a 2006 speaking tour, every time President Bush spoke of his plan to privatize Social Security, his approval ratings dropped. His advocacy of cuts helped cost Republicans the Congress. While up a hair recently, the market has lost 20 percent since 2000. Voters knew that would have meant 20 percent less food on the table for seniors or money for electricity. President Obama should not let the commission make the same mistake, or this time it will cost him and his party.

Robert Weiner was chief of staff of the House Select Committee on Aging, chaired by the late U.S. Rep. Claude Pepper, and a senior public-affairs director in the White House. Jonathan Battaglia is policy analyst at Robert Weiner Associates..
____________

Oftentimes, one must put down well nourished roots before one can blossom productively and constructively within a community.

Chris