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Today's
Stories
April 17, 2008
Michael Hudson
Hillary
Joins the Vast Rightwing Financial Conspiracy
Robert Bryce
The
Ethanol Apologists
Kathy Kelly
Weary of War? Don't Collaborate
Madis Senner
The Carrion Feeders' Ball: How Hedge Funds Reap Billions Off
Economic Misery
Peter Morici
The G7, the Banks and GE
Ron Jacobs
Washington, al-Maliki and the Militias
William S. Lind
A Confirming Moment in Basra
James Murren
Obama's Disconnect with Small Town America
Ben Terrall
Losing Haiti
April 16, 2008
Bill Kauffman
The
Candidates from Nowhere
Roxanne Dunbar-Ortiz
Colonization and Massacres
Saul Landau
How to Leave Iraq
Peter Morici
McCain's Economic Plan: GOP Out of Ideas (But So are the Democrats)
Eric Toussaint /
Damien Millet
Bankers Saved, Human Rights Sacrificed
Jeff Ballinger
Inside Nike's Asian Sweatshops: Squeezed Vietnamese Workers Strike
Back
David Macaray
Union Strikes and Replacement Workers
Gary Leupp
Electoral Revolution in Nepal
Richard Morse
The Food Riots in Haiti
George Ciccariello-Maher
Einstein Turns in His Grave
Dave Lindorff
Letters from the Bitter Belt
Website of
the Day
Surviving Prozac
April 15, 2008
Ralph Nader
The
Politics of Distraction in an Age of Gotcha Capitalism
Uri Avnery
Manifest
Destiny and Israel
Brian Cloughley
Arrogant
Lies
David Price
Outrageous
Pre-Tour de France Ban
Joe Bageant
Bitter America: Media Shit Storms and Heartland Reality
Steve Early
The Purple Punch-Out in Dearborn
Mats Svensson
To Create Something from Nothing: the Making of a Palestinian
State
Michael Donnelly
Dead-Eye Hil and the Elitist
April Howard /
Benjamin Dangl
Dissecting the Politics of Paraguay's
Next President
Laray Polk
Let's Not Put the Torch in a Bubble
Charles Modiano
What Does a Woman Have to Do to Get on the Cover of Sports Illustrated?
Website of
the Day
The $3 Trillion Shopping Spree
April 14, 2008
Carl Finamore
Airline
Deregulation Makes a Hard Landing
Michael Hudson
A
Trillion Dollar Rescue for Wall Street Gamblers
M. Shahid Alam
Hizbullah's Big Win: Has Israel Finally Met Its Match?
Patrick Cockburn
A
Cleric, a Pol and a Warrior
Paul Craig Roberts
Petraeus Sets Up Iran
Joanne Mariner
Redition to Jordan: What Happens When the Gloves Come Off?
Martha Rosenberg
Suicide and Cymbalta
Dave Lindorff
The Bitterness Thing: Is Obama Channeling Nader
P. Sainath
Hot Messages to Sex Dancer Doom Condi's New Finnish Pal
John V. Whitbeck
On Hypocrisy Over Tibet: a Personal Reflection
Website of the Day
Spying on Environmental Groups
April 12 /
13, 2008
Alexander Cockburn
Olympic
Torch Toasts US Candidates
Patrick Cockburn
Warlord:
the Rise of Muqtada al-Sadr
Mike Whitney
Want to Save the Economy?
David Yearsley
Film Scores and Westerns: the Stealth Cavalry of Empire
Robert Fantina
Bush's Brand of Morality
Conn Hallinan
Another Defining Moment in Iraq
Bill Hatch
In Praise of Hippies and the Counter-Culture
Ramzy Baroud
The Basra Battles
George S. Hishmeh
Back to Square One
Ron Jacobs
The New New Left in Latin America
Nikolas Kozloff
Olympic Torch in Buenos Aires
Charles Thomson
The British Prime Minister and the Tate's Tin of Shit
Alexander Billet
The Disney-fication of CBGB
Missy Beattie
Huffing and Puffing to Failure
David Michael Green
America's Jones for War
Seth Sandronsky
Education Entrepreneurs
Prairie Miller
Meeting David Wilson
Jeffrey St.
Clair
Booked Up
Poets' Basement
Ko Un, Ibn Salma and Greaves
Website of
the Weekend
Americans United for Palestinian Human Rights
April 11, 2008
Nikolas Kozloff
The Clintons and Their Sordid
Colombia Advocacy
Wajahat Ali
Revenge of the Ghetto Nerd: an Exclusive Interview with Junot
Diaz
Sharon Smith
Let
Them Eat Ethanol!
Yigal Bronner
/ Neve Gordon
Digging for Trouble: the Politics of Archaeology in East Jerusalem
Alan Farago
Eating South Florida
Dave Lindorff
On Waking Sleeping Giants: Lessons for America from China
George Wuerthner
Money for Nothing? The Problems with the Conservation Reserve
Program
Christopher
Brauchli
Prostitutes Don't Do Funerals
Website of the Day
Animals Explain the Insurance Industry: a Health Care Video
April 10, 2008
Mathieu Vernerey
Tibet
for the Tibetans!
Elizabeth Schulte
Slavery
in the Fields
David Macaray
Labor
Unions Will Never Get a Fair Shake
Ashley Smith
The Rise of Muqtada al-Sadr
Peter Morici
Driving Up Debt and Dragging Down Growth
Jacob Hornberger
The Military's Distintegrating Family Life
Harold Austin
Snitch or Else: Prison Officials Threaten Gang Drop Outs
Website of the Day
Hillary: the Wal-Mart Videos
April 9, 2008
Paul Craig
Roberts
The
Fading American Economy
Winslow T.
Wheeler
Congressional
Theater: the Petraeus / Crocker Hearings
C. Hand
Why Dave Marash Left Al Jazeera
Paul Krassner
Sex and Violins
Paul Wolf
Colombian "Magnicidio" Remains a Mystery After 60 Years
Wajahat Ali
Alien Invasion!
Karyn Strickler
Lost in the Fumes: the Sierra Club Sells Out to Clorox
Dan La Botz
Confronting the Economic Crisis
Eric Walberg
The Shadow of Munich: Another NATO Flop
Robin Millenthal
Enough Already! Growth and the Tar Sands Economy
Website of the Day
Conservative
Nanny State
April 8, 2008
Mike Whitney
Should
Khalid Sheikh Mohammed be Set Free?
Nikolas Kozloff
Bush
Bullies Congress on Colombia Deal
Greg Moses
Migrant Detention in South Texas
Joshua Frank
The Other Military Draft
John Ross
Mexico City's Urban Tribes Go on the Warpath Against EMOS
Michael Donnelly
Hillary's Western Swing
John V. Walsh
Why Obama Lost Massachusetts
Jeff Nygaard
Health, Security and Mandates
Bill Piper
Last Shot for a Bush Legacy?
Sen. Russ Feingold
Legal Representation and the Death Penalty
Website of the Day
Catonsville 9, Forty Years Later
April 7, 2008
Ishmael Reed
The
Irish Black Thing
Harry Browne
Irish
Peace Activist Acquitted; Deported
Uri Avnery
Tibet and Palestine
Lenni Brenner
Obama's Constitution, His Pastor and His Unbelieving Mom in Heaven
Ayesha Ijaz Khan
America Must Respect Pakistan's Democracy
Robert Fisk
Fearful Lives in the Land of the Free
Edwin Krales
Ensuring the Success of Fascism in Spain: the US Corporate Role
Chris Genovali
Vancouver Island's Dwindling Ancient Forests
Website of the Day
LA Artists Against War
April 5 / 6,
2008
Alexander Cockburn
Did
the Elites Want MLK Dead?
Ramzy Baroud
There
are No Checkpoints in Heaven
Ralph Nader
Runaway Bailouts
David Yearsley
How Scott Joplin Had Wall Street Down
Saul Landau
Sex Politics in America
Paul Craig
Roberts
The Petraeus and Crocker Show
Lawrence Korb / Ian Moss
Rev. Jeremiah Wright, a True Patriot
Seth Sandronsky
Meet America's Promise Alliance: Colin Powell's New Gig
John Ross
La Cumbia de la Doctrina Bush: Colombia Kills Four Mexican Students
in Ecuador Bombing
Robert Fantina
McCain, Republicans and Family Values
David Michael Green
Back to Disaster: Hoover at Home, Tet Abroad
Missy Beattie
McCan't
Patrick Bond
Vultures Circle Zimbabwe
Dr. Susan Block
The New American Pot Dealers
Phyllis Pollack
The Stones Meet the Press
Adam Engel
The Boobus in the Lie
Jeffrey St. Clair
Booked Up
Poets' Basement
Diamand
and St. Clair
Website of the Weekend
Richard Pryor Goes to the Gun Shop
April 4, 2008
Dave Lindorff
The
Night I Heard King Had Been Shot
Greg Moses
Missing
King
Ron Jacobs
Two Murders, 40 Years On: Bobby Hutton and Martin Luther King,
Jr.
Alan Farago
Show Me the Size of Your Bail Out and I'll Show You Mine
Alison Weir
Funding
Our Decline: U.S. Aid to Israel
David Rosen
Rape as an Instrument of Total War
Robert Weissman
The Unrealized Dream
Jacob Hornberger
Was Killing Iraqi Children Worth It?
Jackie Corr
Hillary and Obama Head for Butte
Carl Finamore
Taking On United Airlines
Laray Polk
We Are All Dith Pran
Susie Day
Advice for the War-Torn
Website of
the Day
Winter Soldiers: a Video Portrait
April 3, 2008
Peter Morici
The Deepening Recession
Joe Bageant
The Audacity of Depression
Andy Worthington
Cleared But Still Detained:
The Ordeal of Moroccan Prisoner Said al-Boujaadia
Nikolas Kozloff
Condi's Divide and Rule Strategy in South America
Rannie Amiri
The U.S. Disdain for Mideast Democracy
David Macaray
More Labor Strife in Hollywood
Stephen Lendman
Lynne Stewart's Long Struggle for Justice
Website of
the Day
The
True Face of Da Vinci?
April 2, 2008
Diane Farsetta
Indian
Point on the Potomac
Harry Browne
Bertie
Ahern Laid Low by Secretary
Wajahat Ali
The Folly of Attacking Iran: a Conversation with Steven Kinzer
George Wuerthner
Open Season on Wolves
Col. Dan Smith
The
Militarization of America
Philippe Marlière
The Politics of Bling-Bling in France: Sarkozy's Cultivated Anti-Intellectualism
Steve Early
A Purple Uprising in Oakland
Bernard Chazelle
Saving the American Left
Reza Fiyouzat
Bowling in Hell
April 1, 2008
Jeff Leys
Fracturing
the Peace to End the War
Thomas P. Healy
Restoring the Constitution: a Conversation with Daniel Ellsberg
Winslow T. Wheeler
When Pigs Sprout Wings: Mangled Rationales for a Fatter Defense
Budget
Roxanne Dunbar-Ortiz
New Deal Nostalgia
Patrick Irelan
Cocaine, Colombia and the Cartels
Andy Worthington
The Case of Ahmed Khalfan Ghailani
John V. Walsh
The Shunning of Ralph Nader
Michael J.
Smith
Woolly Mamet
Robert Weissman
The New Philip Morris--Even Worse Than the Old?
Dave Lindorff
Bush's Defining Moments
Martha Rosenberg
Brain Mist Disease: Boss Hog's Gift to Humanity
Website of
the Day
Support Briana!
March 31, 2008
Mike Whitney
Dead
on Arrival: Paulson's Fixit Plan for Wall Street
Mats Svensson
Walls,
Tunnels and Daily Humiliations
Paul Rockwell
Hillary's
Lies About Outsourcing
Paul Craig Roberts
A Third American War in the Making?
Patrick Cockburn
Sadr
Calls for Ceasefire
Peter Dale Scott
The Showdown
Alfredo Molano
Cultura Mafiosa in Colombia
Peter Morici
Why Paulson's Reform Plan Falls Short
Uri Avnery
Day of the Land, 32 Years Later
Michael Simmons
The American Bard in New Orleans
Betsy Roberts
/ Karen Orr
The Clorox Coup
Phyllis Pollack
First the Sun and Then the Moon: Scorsese Does the Stones
Website of
the Day
Five Years Too Many
March 29 / 30, 2008
Alexander Cockburn
When
They Pick Up the Phone at 3 AM, What Will They Say?
Patrick Cockburn
Iraqi
Police Refuse to Back Maliki's Attacks on Medhi Army
Mike Whitney
Bernanke's Next Big Bail Out Plan
Christopher Brauchli
The Pastor of Armageddon and the Slave Sale: McCain, Lieberman
and Rev. Hagee
William Blum
China, Tibet and the Propaganda Olympics
Robert Fantina
Iraq
Troika: McCain, Obama and Clinton
John Ross
AMLO, the Comeback Kid? Fighting the Privatization of Mexico's
Oil
Allison Kilkenny
Shady Lending Hits Home
Nelson P. Valdés
Cuba, the Beatles and Historical Context
Suzanne Baroud
The Great Lake of Gaza: a New Crisis in the Making
Richard Rhames
Social Security: Throwing Granny from the Gravy Train
Christopher Fons
Transcending the 60s? Obama and the Baby Boomers
Carl Finamore
Misery at 35,000 Feet: Mergers Stall, Fares Soar, Services Slump
and Consumers Sour
Eamonn McCann
Hillary Misremembers Again!
Missy Beattie
Justice and the Monsters of War
Fred Gardner
Jim Thorpe, All-American
Kim Nicolini
Cock Chuggers and Cheese Curls: Richard Kelly's "Southland
Tales"
David Yearsley
"All the World's a Hospital"
Jeffrey St.
Clair
Booked Up
Poets' Basement
Valentine and Ko Un
Website of
the Weekend
Hidden Iraq
March 28, 2008
Saul Landau
Growing
Dread About Iraq
Alan Farago
Other People's Money: the Chop Shop Economy
Peter Morici
Knocking Down False Economic Gods
Andy Worthington
Plight of the Uyghus: a Chinese Muslim's Desperate Plea from
Guantánamo
Felice Pace
Ashes of Lies: Why No One Trusts the US Forest Service
Peter Montague
Sierra Club Cleans House -- With Clorox!
Dave Lindorff
The Mumia Exception
March 27, 2008
Patrick Cockburn
Basra
Erupts
Binoy Kampmark
Free Market Apostates
Joanne Mariner
"Was George Washington a Terrorist?"
Norman Solomon
NPR News: National Pentagon Radio?
William S. Lind
Mars Only Knocks Once: a Prognosis for Iraq
John V. Walsh
Obama's Speech: a Touch of Bigotry?
Robert Weissman
How Things Work
Ron Jacobs
Meeting Charlie Ehlen
Ralph Nader
Put Impeachment Back on the Table
David Macaray
Court Rules Against Grocery Workers
John Borowski
Clearcutting the History of Forest Destruction
Website of
the Day
Going Out for an English
March 26, 2008
Stan Cox
The
Germs Next Door
Sharon Smith
Greed
Pays: Welfare on Wall Street
Anita Sinha / Jill Tauber
Dreams Turned into Rubble in New Orleans
Matt Vidal
So Much for the Self-Regulating Market
William S. Lind
Operation Cassandra
Joe Mowrey
The Audacity of Hypocrisy: Obama's Pandering to Israel
Dave Lindorff
Duck and Cover (Up): Hillary Under Fire
Ray McGovern
Frontline's War: Too Timid, Too Little, Too Late
Justin Smith
Why Race and Gender are Separate Issues
Sam Husseini
The Winter Soldier Hearings and Indy Media
Martha Rosenberg
Blood on Ice: Gentlemen, Pick Up Your Clubs
Michael Dickinson
Politicians as Dogs
Website of the Day
The Wal-Mart Virus: How the Infection Spread
March 25, 2008
Ishmael Reed
The
Crazy Rev. Wright
Corey D. B.
Walker
The Politics of Jeremiah Wright
Linn Washington Jr.
Racism in America and Other Uncomfortable Facts
Alan Farago
The Money Launderers: a Picnic for Wall St. Insiders
Vijay Prashad
A Glimmer of Hope From the Gulf Coast
Joshua Frank
A Silver Lining to the Bush Years?
Ralph Nader
How Public Servants Can Help End This War
David Rovics
If I Can't Dance: Why is the Left So Boring?
Peter Morici
America's Banks are Broken
Dave Zirin
Olympic Flames: China's Crackdown in Tibet
David Krieger
The Crisis in Tibet
Website of
the Day
Memorializing Iraq
March 24, 2008
Jeffrey St.
Clair
Blonde
Ambition: Hillary's Berserker Campaign for 2012
Peter Morici
Digging Out of the Recession
Uri Avnery
Two Americas
Wajahat Ali
First of the Mohicans: an Interview with Rep. Keith Ellison
Paul Craig Roberts
Inside the Shell Game
George Ciccariello-Maher
The Coming War on Venezuela
Stephen Lendman
Sami Al-Arian's Long Ordeal
Christopher
Brauchli
Possessing Someone Else's Country
Cat Woods
A Letter to Mom on Obama
Stacey Warde
Tax Burden
Dave Lindorff
The American Dead Hits 4,000, But Who's Counting?
Website of
the Day
Live from the Longest Walk
March 22 /
23, 2008
Ralph Nader
Bush
Blisters the Truth on Iraq
Nicole Colson
Can You Afford to Feed Your Family?
James Petras
The Cost of Unilateral Humanitarian Initiatives
Laura Carlsen
From Bombs to Markets: The Andean Crisis and the Geopolitics
of Trade
Greg Moses
Tolerance and the American Pulpit
Andy Worthington
Torture Stories Dog Guantánamo Trials
Michael Dickinson
Art on Trial
John Ross
Bush's Surge Hits Mosul
Missy Comley Beattie
Killer Economics
David Michael
Green
Happy Anniversary, America!
Ramzy Baroud
The Coming Uncertain War on Iran
Martha Rosenberg
Easter Egg Shells from Hell
Paul Watson
Evolution is Going to the Dogs in the Galapagos
Isabella Kenfield
Monsanto's
Raid on Brazil
James Murren
Logging v. Water in Honduras
Jacob Hornberger
Sex and the Immigration Officer
Kathlyn Stone
Ben Heine, Master of the Art of Resistance
Seth Sandronsky
Rethinking New Mexico's History
Kim Nicolini
Class, Gender and Abortion in Communist Romania
Jeffrey St.
Clair
Booked Up: What I'm Reading This Week
Poets' Basement
Wilson, Woods, Gibbons and Orloski
Website of
the Weekend
Merci, McCain!
March 21, 2008
Marleen Martin
Land
Behind Bars: the Hidden Casualties of America's "War on
Crime"
Peter Montague
Run
Your Car on Coal? Maybe Not
Saul Landau
Monroe's
Deadly Doctrine
Anis Hamadeh
Merkel in the Knesset
Jacob Hornberger
McCain's Al Qaeda Scare: Slip or Tactic?
Khalil Nakhleh
Al Nakba of 1948: How Long Will It Persist?
Adam Isacson
Colombia, Paramilitary Threats and Assassinations
Kenneth Couesbouc
Money for Nothing
Madis Senner
Will the Feds Underwrite the Stock Market?
Monica Benderman
The Costs of Freedom: What Are You Willing to Pay?
Website of the Day
Stop Foreclosures and Evictions
March 20, 2008
Damien Millet
/
Eric Toussaint
The
Triple Failing of the Big Private Banks
Mike Whitney
Winding
Up Bear
John Ross
What Do We Owe Iraq?
Dave Lindorff
Paying the Piper: the Bodies and Bills are Piling Up
Wajahat Ali
Pakistan on Fire
Jill Nagle
Memo to Sex Workers: Stop Financing Shock Journalism
Manuel Garcia, Jr.
Obama and the Psychic Auto-Shrink-Wrapping Called Race in America
Dan La Botz
Obama's Race Speech
Robert Weissman
Alternative Power: Shutting Down the API
Stella Dallas
/
Jennifer Matsui
Apostasy Now! Mamet, Enter Stage Right
Website of the Day
The Angry Monk
March 19, 2008
Patrick Cockburn
A
War of Lies
Robert Fisk
The Little Men and the Inferno
Jeff Taylor
Five Years of War in Iraq
Ed Ruggero
From Pinkville to Iraq: the Dark Anniversary of My Lai
Ron Jacobs
Who'll Stop the Rain?
Christopher
Fons
Obama Takes the Race Bait
Sherwood Ross
In Defense of Rev. Wright
Cynthia McKinney
An Urgent Crisis: Confronting America's Racial Disparities
Joshua Frank
The Kool-Aid That Kills
Robert Weissman
Monsanto's Genetic Food Gamble
Walter Brasch
It's a Welfare State--If You're Rich
Yifat Susskind
Iraqi Women Resist the Occupation
Andrew Wimmer
War Demands Its Due
Website of
the Day
Glimpses of Nature
March 18, 2008
David Price
The
Military "Leveraging" of Cultural Knowledge
Paul Craig
Roberts
The
Collapse of American Power
Tim Wise
Of National Lies and Racial America: Jeremiah Wright, Barack
Obama and the Unacceptability of Truth
Patrick Cockburn
One of the Most Disastrous Wars Ever Fought
Conn Hallinan
Afghanistan, a River Running Backward
James T. Phillips
Monsters: Past, Present and Wannabe
Uri Avnery
The Killing in Bethlehem
David Macaray
Could Wal-Mart Revive the Labor Movement?
Marjorie Cohn
Beware an Attack on Iran
Peter Zinn
Obama in New Orleans
Dan La Botz
The Economic Crisis, Labor and the Left
Monica Benderman
Where are We Going?
March 17, 2008
Pam Martens
The
Fed's Wall Street Dilemma
Sasan Fayazmanesh
The US, Iran and the Policy of Dual Containment
Nelson P. Valdés
The Imperial Branding of Simon Bolivar and the Cuban Revolution
Peter Morici
The Corrosive Consequences of the Trade Deficit
Wajahat Ali
Disrobing the Nine: a Conversation with Jeffrey Toobin on the
Supreme Court Since 9/11
Ronnie Cummins
Beyond Progressive Malpractice: Taking Down Big Pharma
Shaun Harkin
Saint Patrick's Day in Fortress America
Ali Khan
No Pardon for Musharraf
Robert Jensen
Beyond Peace
P. Sainath
Oh, What a Lovely Waiver!
Greg Moses
Jeremiah was a Bullhorn
Dr. Susan Block
Advice for Eliot Spitzer
Website of the Day
No Cowboys
March 15 /
16, 2008
Patrick Cockburn
How
to Destroy a Country in Five Years
Mike Whitney
Bearly
Alive: Investment Giant Rushed to ICU by Panicky Fed Chief
Ralph Nader
Of
Laws and Men
Robert Pollin
It's Still the Economy, Stupid
Diane Christian
The Poetics of Perversity: From Boccaccio to Spitzer
Wajahat Ali
Faking the Hood: a Conversation with Ishmael Reed
Tom Wright
/
Therese Saliba
Rachel Corrie's Case for Justice
Alan Farago
Back to Florida: Where Bushtime Began
Greg Moses
Raiding the Family Room in Texas
Michael Hudson
A Grand Global Bargain?
Martha Rosenberg
Why Hillary's Favorite Chicken Company is Eying China
John Goekler
Fourth Generation Warfare in a Fifth Generation Conflict
Uzma Aslam
Khan
A Letter to Barack Obama: Where's the Change, Barack?
Oren Ben-Dor
The Silencing of Gilad Atzmon
David Underhill
Mammon, Morals and the Mobile Tanker Deal
Fred Gardner
The Education of Eliot Spitzer
David Michael
Green
Why Spitzer Should Have Resigned (and Why He Shouldn't Have)
Rev. William E. Alberts
Jesus, Entombed in Heaven
Gail Dines
It's All About the John: Prostitution and Male Power
David Yearsley
Conducting, Anarchy and the Problem of When to Begin
Chris Clarke
Walking with Zeke: the Luckiest of Dogs
Poets' Basement
Anderson, Lodge & Subiet
Website of
the Day
Deviant Art
March 14, 2008
Paul Craig
Roberts
Watching
the Dollar Die
Don Santina
Vichy
Democrats: Pelosi and the Politics of Collaboration
Patrick Cockburn
Iraqi
Mother Vows Revenge on US: How She Lost Her Husband and Her Sons
Tim Rinne
StratCom
Rules! The Next War Will Start in Nebraska
Robert Fantina
In
Torture We Trust
Saul Landau
Letter
to the Presidents-in-Waitings
David Macaray
Common
Myths About Labor Unions
Franklin Lamb
Is
the Bush Administration Switching Horses in Lebanon
Michael Neumann
The
One State Illusion: Reply to My Critics
March 13, 2008
Paul Craig
Roberts
Republicans
and "Free Market" Zealots Bring Disaster to America
Mike Whitney
Meltdown
Looms Larger As Credit Markets Freeze
Assaf Kfoury
"One-State
or Two State?"- Sterile Debate on False Alternatives
Andy Worthington
Afghan
Hero Who Died in Guantánamo: The Background to the Story
Adam Federman
From
Autopia to Autogeddon: Cars Reach the End of the Road
March 12, 2008
Dave Lindorff
Bringing
Down Spitzer: It's the Big Brother Who Should Bother US
R.F. Blader
The
Spitzer Backlash
Yonatan Mendel
How
to be an Israeli Journalist. Never Write "Murder" or
"Palestine"
Jonathan Cook
One
State or Two? Neither. The Issue is Zionism
Bill and Kathy
Christison
Fallon
and Gates -- At Least One Cheer
James J. Brittain
Was
the U.S. Involved in Killing the FARC-EP Leaders
Ron Jacobs
"All
the Money You Make Will Never Buy Back Your Soul"
March 11, 2008
Paul Craig
Roberts
How
to End the Subprime Crisis
Ed O'Loughlin
How
Israeli Troops Invade Homes in Gaza, Brutalize, Smash and Steal
Ramzy Baroud
'Unwavering
Commitment' to Inequality
Kathy Christison
One
State or Two? The Debate Over Israel and Palestine
China Hand
PRC
Plays it Cool, as U.S. Tries to Amp Up Pressure on Iran
John Joslin
Thank
You, Nafta! Welcome to Weirton, Home of the Discount Cigarette
Mike Averko
Serb
Politics, Kosovo and the Moscow-Washington Divide
Ben Rosenfeld
Gavin
Newsom's Kneejerk Plan
Thierry Paquot
High
Rise, Low Spirits:The Curse of the Tower Block
March 10, 2008
Uri Avnery
"Kill
A Hundred Turks and Rest": The Five-Day War in Gaza
Col. Dan Smith
Scoring
the "Surge" and What Lies Beyond
R.F. Blader
Why
"Lock Them Up and Throw Away the Key" is Losing its
Sheen
Michael Neumann
The
One-State Illusion: More is Less
Bob Fitrakis
and Harvey Wasserman
Did
the Republicans Give Hillary Her Victory in Ohio?
James J. Brittain
Anti-Uribe
Protests in Colombia and the World
Missy Comley
Beattie
The
Passion of John McCain
March 8-9,
2008 Weekend Edition
JoAnn Wypijewski
The
Only Way to Fight the Clintons
Mike Whitney
Sorting
Through the Rubble in Post Bubble America
Peter Morici
Fed
and Treasury Fiddle as Economy Plummets
Ralph Nader
The
Silent Violence of Gaza's Suffering that Candidates Ignore
Jonathan Cook
The
Meaning of Gaza's Shoah
Steve Niva
Behind
the Israeli Escalation in Gaza
Bill and Kathy
Christison
Crisis
over Teheran's Alleged Nuclear Plans Nearing Climax
Hervé
Do Alto and Franck Poupeau
Bolivia:
Morales is Checked
Eric Walberg
To
Leave and Stay at the Same Time: Putin to Medvedev to…?
Scott Johnson
City
of A Thousand Foreclosures
Mark Scaramella
James
Brown's Gate
Bill Clinton
President
Clinton's Remarks on Naming William M. Daley as NAFTA Task Force
Chairman
Poet's Basement
St.
Thomasino, Engel, Davies and Willson
Website of
the Weekend
Hillary
Blackens Barack
March 7, 2008
Patrick Cockburn
Why
Iraq Could Blow-Up in John McCain's Face
Robin Blackburn
Question
for Barrack Obama: Why Afghanistan is the'Right War'?
Saul Landau
The
Stupid Economy
Binoy Kampmark
When
Competition is Good: McCain and the Muddled Democrats
Chris Floyd
Crushing
the Ants: Admiral Fallon and His Empire
Andy Worthington
Spanish
Drop "Inhuman" Extradition Request for Guantánamo
Britons
Will Potter
Before
the Smoke Even Clears in Seattle: Bringing Out the T Word
March 6, 2008
March 6, 2008
Vincent Navarro
The
Next Failure of Health Reform
Forrest Hylton
High Stakes in the Andes: Colombia's Cornered President
Peter Morici
Why the Dollar is So Cheap
George Ciccariello-Maher
Counter-Attack of the Bureaucrats
John Ross
Taxi! Taxi! The Dark Side of the Oscars
Jacob Hornberger
No Standing to Lecture on Justice
Paul Watson
Illegal Japanese Whaling by the Numbers
Dan Bacher
Off the Deep End
Website of the Day
A Katrina Reader Online
March 5, 2008
Cockburn /
St. Clair
A
Great Day for John McCain (and Maybe Nader)
Joanne Mariner
After Guantanamo
Fidel Castro
The Raid on Ecuador: Underestimating Rafael Correa
Christopher
Brauchli
The Turkish Invasions
Steven Sherman
Obama and the Prospects for a Renewal of the Left
Dave Lindorff
Busting Bush & Co. in New England
James Murren
Bombing Somalia
Adam Engel
Necropolis Now
Website of Day
Remember Song
March 4, 2008
Wajahat Ali
Mumbo
Jumbo: Naming Names with Ishmael Reed
William Blum
How Could Hillary Have Known?
Bill Quigley
The Cleansing of New Orleans
Ralph Nader
The Prince Harry Solution
Patrick Irelan
Oil and Health in Venezuela
James J. Brittain
/
R. James Sacouman
Uribe's Colombia is Destabilizing a New Latin America
Norman Solomon
The War Election
Jacob Hornberger
Hillary in Waco: the Missing Apology
Andy Worthington
Guantánamo and the European Parliament
Mike Averko
Kosovo and the Press
Website of the Day
Tex-Mex Primary
March 3, 2008
Jennifer Loewenstein
Gazan Holocaust
Alan Farago
American Politics and the Faltering Economy
Richard Gott
Colombian Deaths in Ecuador
Wajahat Ali
Who Speaks for a Billion Muslims? Analyzing the World Gallup
Poll with John Esposito
Paul Craig Roberts
The Mukasey Conspiracy: a Bi-Partisan Attack on the Constitution
Robert Weissman
When Multinationals Say Adieu
Uri Avnery
Good Morning, Hamas
Martha Rosenberg
When Your Meat is a Downer
Eva Liddell
Leave the Next Dance for Bill
Michael Donnelly
Will Ferrell Does Flint
Website of the Day
Muddy Waters: Train Fare Home Blues
|
Apri1
17, 2008
Resurrecting Greenspan
Hillary
Joins the Vast, Rightwing Financial Conspiracy
By MICHAEL HUDSON
On Monday, March 24, presumably representing
Wall Street--as any New York senator must do in view of its dominant
financial role in the state's political campaigns--Hillary Clinton
proposed that Congress show its bipartisan spirit by appointing
an "emergency working group on foreclosures," to be
led by none other than Alan Greenspan and earlier Federal Reserve
Chairman Paul Volcker, and Clinton Treasury Secretary Robert
Rubin. Her idea was for them to come up with a plan to alleviate
the subprime and financial crisis. This seems like calling in
arsonists to help put out the fire that they and their own constituency
had set in the first place. Their lifelong interest, after all,
had been to promote deregulation and special tax favoritism for
their Wall Street constituency, highlighted by repeal of Glass-Steagall
in 1999 under Pres. Clinton. Representing the banking sector
and Wall Street (and hence being essentially Republicans in spirit),
they were precisely the lobbyists most in favor of anti-labor,
pro-creditor policies.
Even the Wall Street Journal
expressed surprise. Jon Hilsenrath noted the seeming irony: "In
August 1999, as the tech-stock bubble was worsening, Alan Greenspan
stood before central-banking colleagues in Jackson Hole, Wyo.,
and argued it wasn't the central bank's job to prevent asset
bubbles. All it could do was clean up the mess after the bubble
had burst." On the contrary, the commentator noted, the
Fed could have slowed the bubble by raising interest rates and
boosting margin requirements on stock trading during the tech
bubble. Mr. Greenspan could have heeded the advice of Fed Governor
Ed Gramlich to slow and regulate subprime mortgage lending. Instead,
Mr. Greenspan's--and Mr. Paulson's--idea was simply to clean
up the bubble's debt aftermath by bailing out Wall Street.
Mrs. Clinton's logic, she explained
on March 24, was simply that Mr. Greenspan had a "calming
influence." Republican Presidential nominee John McCain
certainly seemed glad to propose him to head a commission to
overhaul the tax code. Barack Obama's spokesman Bill Burton said
that her selection of Mr. Greenspan to head her working group
featured "the same people who helped to create these problems
or have a direct financial industry stake in the outcome."
Sen. Obama himself said that her crypto-Republican plan lacked
credibility in view of the heavy campaign donations she received
from Wall Street financial lobbyists. (As of mid-April he had
raised an almost identical sum from this source.)
Elaborating her views three
days later, Sen. Clinton made it seem as if it were the job of
the financial victims--the mortgage debtors--to solve the mortgage
crisis. "In today's economy, trouble that starts on Wall
Street often ends up on Main Street ... When there's a run on
mortgage-backed securities and the bottom falls out for investment
banks, the bottom falls out for families who see the value of
their homes--their greatest source of wealth--decline."
To cure the problem, she  endorsed the spirit of Mr. Paulson's
Wall Street bailout, including having the Federal Housing Administration,
Fannie Mae and Freddie Mac "buy, restructure and resell
these underwater mortgages." This is a far cry from debt
forgiveness.
In her debate with Barack
Obama on April 16, Senator Clinton once again heaped praise on
Mr. Greenspan's "bipartisan" commission that nearly
doubled the tax rates that workers had to give up out of their
paychecks. A token income-tax cut was offset by F.I.C.A. withholding
that, for many workers, now exceeds their income-tax liability.
And what certainly must be the most unmitigated gall rivaling
even her notorious Yugoslavia-under-sniper-fire gaffe, Mrs. Clinton
rejected Senator Obama's policy of raising the F.I.C.A. Withholding
rate above the present $97,000 level, all the way up to hedge
fund managers making billions of dollars per year. Mrs. Clinton
said explicitly that there were more progressive ways to resolve
the Social Security and Medicare tax problem. The exchange has
to be read to be believed.
OBAMA: "One of the centerpieces of my economic plan would
be to say that we are going to offset the payroll tax, the most
regressive of our taxes, so that families who are earning--who
are middle-income individuals making $75,000 a year or less,
that they would get a tax break so that families would see up
to a thousand dollars worth of relief. the rules in Washington--the
tax code has been written on behalf of the well connected. And
that's been a central focus of our campaign.
MODERATOR : You have however said you would favor an increase
in the capital gains tax." It's now 15 percent, compared
to 28 percent under Bill Clinton.] "It's now 15 percent.
That's almost a doubling if you went to 28 percent. But actually
Bill Clinton in 1997 signed legislation that dropped the capital
gains tax to 20 percent.
OBAMA: Right.
MODERATOR: And George Bush has taken it down to 15 percent.
OBAMA: Right.
In an argumentative mode, the
moderator pointed out the long-discredited "supply side"
Republican rationale for tax cuts. Is it not true, he asked,
that each time the capital gains tax was cut, receipts increased?
He did NOT explain that asset-price inflation had gone hand in
hand with tax cuts. Nor did he note the fact that some 80% of
the tax is in land-price gains--gains that speculators made "in
their sleep" while Mr. Greenspan at the Federal Reserve
was flooding the real estate bubble with credit.
OBAMA: Well, Charlie, what
I've said is that I would look at raising the capital gains tax
for purposes of fairness. We saw an article today which showed
that the top 50 hedge fund managers made $29 billion last year--$29
billion for 50 individuals. And part of what has happened is
that those who are able to work the stock market and amass huge
fortunes on capital gains are paying a lower tax rate than their
secretaries. That's not fair. I want businesses to thrive
and I want people to be rewarded for their success. But what
I also want to make sure is that our tax system is fair and that
we are able to finance health care for Americans who currently
don't have it and that we're able to invest it in our infrastructure
and invest in our schools.
In response, Sen. Clinton said:
CLINTON: I don't want to take
one more penny of tax money from anybody."
MODERATOR: Would you say, 'No,
I'm not going to raise capital gains taxes'?
CLINTON: I wouldn't raise it
above the 20 percent if I raised it at all. I would not raise
it above what it was during the Clinton administration. I don't
want to raise taxes on anybody. I'm certainly against one of
Senator Obama's ideas, which is to lift the cap on the payroll
tax, because that would impose additional taxes on people who
are, you know, educators here in the Philadelphia area or in
the suburbs, police officers, firefighters and the like. So I
think we have to be very careful about how we navigate this.
So the $250,000 mark is where I am sure we're going. But beyond
that, we're going to have to look and see where we are.
OBAMA: What I have proposed
is that we raise the cap on the payroll tax, because right now
millionaire and billionaires don't have to pay beyond $97,000
a year. That's where it's kept. Now most firefighters, most teachers,
you know, they're not making over $100,000 a year. In fact, only
6 percent of the population does. And I've also said that I'd
be willing to look at exempting people who are making slightly
above that.
MODERATOR: But Senator, that's a tax.
OBAMA: Well, no because the
alternatives, like raising the retirement age, or cutting benefits,
or raising the payroll tax on everybody, including people who
make less than $97,000 a year -- those are not good policy options.
Senator Clinton responded with
more wishy-washy defense of her position. Sounding like an old-time
Republican, she gave the old mantra of America's fiscal class
war:
"When it comes to Social
Security, fiscal responsibility is the first and more important
step. . . . And with all due respect, the last time we had a
crisis in Social Security was 1983. President Reagan and Speaker
Tip O'Neill came up with a commission. That was the best and
smartest way, because you've got to get Republicans and Democrats
together. That's what I will do."
She promised not to "impose
additional burdens on middle-class families--that is, implicitly
defining the middle class as those who earn from $97,000 to $3,000,000,000
per year. This remarkable definition of "middle class"
has yet to make it into the sociological textbooks, but I'm sure
the University of Chicago will soon make the requisite adjustment.
Senator Obama was quick to respond: "That commission raised
the retirement age, Charlie, and also raised the payroll tax."
He said that she was proposing a "magic solution."
(This was the equivalent of "voodoo economics" of which
President Bush I accused Ronald Reagan of practicing.)
Then came Sen. Clinton's most
remarkable claim of the evening--but one that the papers have
not picked up:
CLINTON: "But there are
more progressive ways of doing it than, you know, lifting the
cap."
But what could be more progressive
than raising the cap on F.I.C.A. withholding? What on earth could
be more progressive than starting to reverse the tax shift onto
labor that has been occurring ever since the Reagan and Greenspan
regimes?
For that matter, how can deregulation
of the financial markets be deemed fair?
In an earlier presidential
primary debate Mrs. Clinton also cited the Democrats' acquiescence
in the Greenspan Commission's 1983 tax shift off the high income
brackets onto wage-earners--by increasing F.I.C.A. wage withholding
for Social Security as a personal user fee rather than funding
it out of the general budget--as a model of the bipartisan spirit
she hoped to emulate if elected. She thus reflected the attitude
of her husband, when as President, Bill Clinton appointed Mr.
Greenspan to a new term as Fed Chairman, saying: "This chairman's
leadership has been good, not just for the American economy and
the mavens of finance on Wall Street. It has been good for ordinary
Americans."
Yet it was Greenspan that acted
as a kind of economic Karl Rove in crafting anti-labor policies
favoring the very rich, above all the Social Security tax-shift
onto labor's shoulders to which Mrs. Clinton pointed. He welcomed
recession as an excuse to cut taxes, ostensibly to "jump-start"
economic growth but actually producing a benefit mainly for wealthy
investors and property owners.
Packaging
deregulation as new, more efficient regulation
The Bush Administration's enormous
commitment of public funds to support Wall Street prompted columnist
Martin Wolf of the Financial Times to announce that the
free market was dead. "Remember Friday March 14, 2008,"
he wrote; "it was the day the dream of global free-market
capitalism died. Deregulation has reached its limits." The
price for Treasury support would have to be an end to the deregulation
that had permitted the debt crisis to reach such unprecedented
proportions. As evidence of the new attitude Wolf cited "the
remark by Joseph Ackermann, chief executive of Deutsche Bank,
that 'I no longer believe in the market's self-healing power.'"
Although more extensive public
regulation was the traditional aftermath of financial crisis,
the debt bubble has provided the financial sector with unprecedented
wealth to translate into political law-making policy to dismantle
regulation. Financial lobbyists accordingly anticipate that "the
coming fight will rival the storm leading up to the 1999 passage
of the Gramm-Leach-Bliley Act [which repealed Glass-Steagall].
That law made it easier for securities firms and banks to be
owned by the same company, dropping regulatory barriers in place
since the Great Depression. In 1998 and 1999, when Congress was
finalizing passage of that law, the financial-services industry
spent a combined $417 million on lobbying, according to the Center
for Responsive Politics. In 2007, financial-services companies
spent more than $402 million on lobbying, led by $138 million
from the insurance industry."
The focal point of this lobbying
effort has been Mr. Paulson's Treasury working group to draw
up a Blueprint for Financial Regulatory Reform. As he explained
in his speech on March 31, the Treasury Department's Blueprint
for Financial Regulatory Reform had been moving earnestly since
June 2007 to "reform" the nation's regulatory structure.
He concluded his speech with a paean to the repeal of Glass-Steagall
under President Clinton: "We recognize that these ideas
will generate some controversy and healthy debate. This is not
unlike the circumstances surrounding the 1991 "Green Book,"
which after a period of constructive discussion resulted in the
passage of the Gramm-Leach-Bliley Act, modernizing our financial
services industry some eight years later."
Repeal of Glass-Steagall gave
the subprime debacle its jump start by removing the Depression-era
roadblock from bank merging with brokers. This permitted financial
conglomerates to be formed and gave them the ability to securitize
(that is package), loans as investments. Vertical financial conglomerates
were formed, starting with Citibank's merger with Travelers Insurance,
and leading up to the recent intention of Bank of America to
acquire the troubled Countrywide Financial, the nation's leading
subprime lender.
Rather than seeing this as
the source of the subsequent subprime problems as Senators Paul
Wellstone and Byron Dorgan did at the time, Mr. Paulson explained,
"I am not suggesting that more regulation is the answer."
Just the opposite. "A state-based regulatory system is quite
burdensome. It allows price controls to create market distortions.
It can hinder development of national products and can directly
impact the competitiveness of US insurers." The aim is to
dismantle what remains of public regulation.
Reflecting the financial interests
behind him, Mr. Paulson's solution is to assign overall regulatory
authority to the Federal Reserve. The Fed works for its owners,
the commercial banking system, and its chairman is appointed
by a government that believes in "central bank independence."
The result is a financial sector regulated by its own leaders
and lobbyists, not by elected officials--seemingly a clear conflict
of interest. The lobbyists evidently have decided that the best
public relations wrapping is to present deregulation as "simplification,"
and to claim that "streamlining" it will lower costs
to investors and help prevent a loss of "competitiveness"
to Europe, especially London. Especially annoying to Wall Street
are the Sarbanes rules requiring full disclosure of information,
passed in the aftermath of the Enron fraud. Upon taking office,
Mr. Paulson claimed that these rules handicapped U.S. financial
firms relative to their foreign counterparts. "In November
2006, the Committee on Capital Markets Regulation released a
report concluding, 'It is the committee's view that in the shift
of regulatory intensity balance has been lost to the competitive
disadvantage of U.S. financial markets.'"
The implication is that anything
that lowers costs to Wall Street--by rolling back regulatory
bureaucracies and reporting requirements such as are called for
by the Sarbanes-Oxley legislation--will be passed on to customers.
Such presumptions ignore the fact that Wall Street prefers to
pay out its profits as bonuses or dividends rather than pass
on cost savings. What is passed onto its customers instead is
runaway CEO compensation. "Market discipline" has not
kept financial markets honest or low-priced. Deceptive subprime
practices have made dollar investments a pariah in global financial
markets. Investors have lost faith in the nation's investment
bankers, mortgage brokers and credit-rating firms, drying up
the market for U.S. mortgage-backed securities and leading to
their being dumped across the board.
In sum, the mid-March crisis
provided an opportunity for Mr. Paulson to pull out the deregulatory
plan he proposed when he became Secretary of the Treasury in
summer 2006, and paste a "regulatory" cover story on
it. Mr. Paulson plan for deregulation anticipates "consolidating
banking and insurance regulators and potentially merging the
Securities and Exchange Commission with the Commodity Futures
Trading Commission, then stripping the combined entity of much
of its regulatory authority." A major aim is to prevent
any repeat of state attorneys general or other regulators emulating
Eliot Spitzer's $1.4 billion in fines against Wall Street companies
for their improper behavior and close-down of Arthur Andersen.
Calling the federal power to
annul state regulation or that of other agencies "regulation"
is dependent on voters not understanding the bait-and-switch
act going on. It needs the compliance of New York's Wall Street
Democrats, senators, congressmen and presidential candidates,
whose campaign funding after all comes mainly from the state's
financial sector.
So where are the Democrats
on this? Above all, Hillary would seem to be on the hot seat.
Where was she at 3 o'clock in the morning on the day that Bill
annulled Glass-Steagall?
What seems most remarkable
in Mr. Paulson's and Dr. Bernanke's comments is the absence of
quantitative discussion of just what the "systemic risk"
is. The bailout is to be paid by the non-financial sector, above
all labor ("consumers") to "save the system."
But just what is the system? It certainly is not industrial
production. It is more a faith that compound interest can keep
on expanding ad infinitum. The reality is that the exponentially
soaring debt overhead threatens to plunge the economy into chronic
depression as interest and other financial charges eat further
and further into the economy's ability to spend on consumption
and tangible capital investment. To ignore this financial dynamic
is to turn economics into a junk science.
For the past decade the banking
system and its mortgage-broker affiliates have avoided the usual
wave of defaults and insolvencies by lending debtors enough money
to pay the interest charges. Adding the interest onto the debt
in this way is known as a Ponzi scheme. It requires an exponentially
growing influx of funds to pay investors and creditors, and hence
cannot be sustained for long, because no economy in history
has grown at the exponential rates needed to keep up with the
debt overhead. This is the basic problem at the core of today's
economic policy. It aims to save the "sanctity of debt,"
that is, the financial sector's claims on the rest of the economy.
But this attempt only polarizes the economy between creditors
at the top of the pyramid and an increasingly indebted base at
the bottom.
A simple example may illustrate
the debt treadmill. Consider a little brick home in a suburb
of Cleveland, Ohio. There are two economic conditions under which
you could own it. Choice One is to own the home free and clear
of a mortgage, in an economy that values it at $100,000. Choice
Two is to own it in a debt-fueled market that values it at $250,000,
requiring the buyer to take on a $100,000 mortgage to afford
it. This appears to maximize wealth creation inasmuch as the
homeowner has $50,000 more net worth.
But the Choice Two homeowner
owns only 60 percent of the property. At 6 percent interest the
$100,000 mortgage absorbs $500 a month, not counting amortization
payments. This $6,000 annual interest charge--plus $3,000 for
self-amortization on the typical 30-year mortgage--absorbs 30
percent of gross income for a homeowner earning $30,000 per year.
Net of about $10,000 in wage withholding for FICA and income
tax, the homeowner must pay 45 percent of take-home pay even
before property taxes, fuel and repairs.
So which homeowner is doing
better: Choice Two with higher net worth on paper, or Choice
One which is less debt-ridden and whose home therefore is more
affordable?
The Federal Reserve's net worth
statistics give the impression that all Choice Two has more wealth
creation. But most families "own" less and less, and
must pay heavier carrying charges that eat into their spending
power. By the end of 2007, home equity fell below 50 percent
for the U.S. economy on balance--down to 47.9 percent. This means
that most Americans now have less of an ownership share in their
most basic asset than their bankers. On top of this, they are
obliged to place their retirement savings in the hands of money
managers whose fees absorb most of the income. Many pension funds
are now left with substantial losses on packaged mortgages such
as Bear Stearns was selling.
Germany is an example of the
Choice One economy. Housing absorbs only about 20 percent of
its average household budget, less than half that of most American
homebuyers today. Its lower debt and property overhead, along
with national health care, helps explain its competitive power
in international markets. America, by contrast, is burdened with
the high proportion of the cost of labor reflecting the inflation
of housing prices that has forced more and more buyers into debt,
while the middle class has seen its stagnant wages exacerbated
by wage withholding for Social Security and medical insurance.
Many have been able to maintain their living standards only by
borrowing against their home equity.
Making loans is how banks make
their money. As long as the loans are used to bid up property,
stock and bond prices, they can claim that they are "responding
to the market" by getting homeowners, commercial real estate
investors, corporate raiders and financial managers to pledge
their assets as collateral for yet new loans in a process that
seems to be self-sustaining. But at a point the carrying charges
on this indebtedness absorb all the disposable income and corporate
cash flow. All it takes to upset the applecart is a major default,
embezzlement or fraud.
Real estate reached this state
of affairs by summer 2006. Behind the property bubble was an
increasing entry price to buying a home--an access price that
had to be paid in extra years of the buyer's working life. Traditionally,
economists have defined equilibrium pricing as the level at which
the rental income just about covered an owner's carrying charges.
But as real estate prices exceeded the rents that could be charged
to cover debt service, speculators withdrew from the market.
It became much less costly to rent than to own. New buyers had
to pay for their operating deficits out of income earned elsewhere.
The magic was gone once carrying
charges could not be lowered any further. Interest rates had
been lowered as far as they could be, down payments had been
lowered to near zero, amortization had been lowered to zero (so
that the mortgage loan never would be paid off, but simply carried),
and fraudulent property assessment had become commonplace. Adjustable-rate
mortgages were resetting at higher levels. Fuel costs were rising,
increasing operating expenses for electric power and gas. Local
property taxes were catching up with soaring real estate prices.
The mortgage market thus was
set for a downturn. Every mortgage banker with whom I spoke by
2006 saw it coming. But until the break came, Wall Street managers
wanted to get every last added fraction of a percentage point
in interest that could be squeezed out. So did fund managers,
who are graded every three months against the norm. This short-termism
obliges them to follow the herd. They hope to reverse course
in a hurry when the break comes, but financial crashes occur
much faster than it takes for prices to rise. The business cycle
is basically a run-up of real estate mortgage debt growing slowly
but ending in a fairly rapid crash.
Bank credit--that is, debt
for mortgage borrowers--was created almost without cost as the
Federal Reserve held short-term interest rates quite low. An
increasingly large debt overhead fueled an asset-price inflation
that Alan Greenspan celebrated as "wealth creation."
Deregulated banks and other financial institutions packaged and
sold mortgage loans to hedge funds, pension funds and other institutions.
It seemed that a perpetual motion machine of financial wealth
had been found. But it rested on the ability of the underlying
"real" economy (production and consumption) to take
on more and more debt and pay more and more interest.
The policies proposed by Republicans
and Democrats alike treat strapped homeowners as deserving government
aid only to the extent of enabling them to go pay the institutions
that hold their mortgages. This fig leaf of humanitarian concern
for debtors enables the government to provide public credit that
ends up in the hands of the super-rich who own and manage the
financial and property sector.
But one sees the dominant attitude
in the vindictive rhetoric used by Sen. John McCain toward debtors
he deems "undeserving" of government aid. He blames
insolvent homebuyers for causing the problem for failing to calculate
how deeply their adjustable-rate mortgages (ARMS) would eat into
their stagnant disposable income or to anticipate how sharply
property taxes, heating and electricity prices would rise as
the dollar plunges in global markets.
Congress has proposed setting
aside millions of dollars to provide mortgage counseling--a sanctimonious
blame-the-victim re-education program to convince insolvent debtors
at least that they should feel guilty if they walk away from
properties worth less than the debts attached to them, as financial
professionals do.
The kind of re-education program
that really is needed would provide an understanding of the dynamic
that threatens to lead to debt peonage. On paper, two thirds
of Americans have seen their net worth grow mainly from the rising
price of their homes--or more to the point, their land ("location,
location, location," magnified by the failure of property
taxes to keep up with market prices). As long as mortgage lending
was pushing up prices more rapidly than debt was growing all
was fine. At the Federal Reserve, Mr. Greenspan took credit for
orchestrating this "wealth creation." It was a euphemism
for asset-price inflation and debt creation.
It is a far cry from tangible
capital formation. Instead of raising labor productivity and
living standards, it is a purely mathematical dynamic that governments
cannot rescue in the end. It is folly even to try to do so. Yet
in March, Sec. Paulson mobilized the credit-creating power of
the government's financial and housing agencies to support the
price of mortgage securities--and the land valuations that back
them. The aim was not to help strapped homeowners but to save
creditors who imagined that they could get rich while most of
the economy was being driven into debt peonage.
Given this perverse financial
plan, it is irresistible not to finish with how Franklin Roosevelt
addressed the spirit of today's proposed reforms:
These economic royalists complain
that we seek to overthrow the institutions of America. What they
really complain of is that we seek to take away their power.
Our allegiance to American institutions requires the overthrow
of this kind of power. In vain they seek to hide behind the flag
and the Constitution. In their blindness they forget what the
flag and the Constitution stand for. Now, as always, they stand
for democracy, not tyranny; for freedom, not subjection; and
against a dictatorship by mob rule and the over-privileged alike.
Today's financial sector would
turn this rhetoric of economic democracy on its head. This raises
the following question: If FDR were alive and running today,
would Hillary and others denounce him as an off-the-wall radical?
Would he be out of touch with today's voters? What would they
say about his anger? How far would a presidential candidate get
who announced at his Inauguration, as Roosevelt did on March
4, 1933, "The money changers have fled from their high seats
in the temple of our civilization. We may now restore that temple
to the ancient truths. The measure of the restoration lies in
the extent to which we apply social values more noble than mere
monetary profit."
So let's start by discarding
the inane propaganda about unmanaged (that is, deregulated) "free"
economies, the faith-based belief that self-regulating economic
systems exist that must not be "interfered with" by
government bureaucrats, formerly known as regulatory agencies,
attorneys general and state prosecutors, Congressional oversight
committees and what remains of New Deal agencies. This anti-government,
anti-regulatory propaganda has been pushed for decades so that
public agencies and Congress, supposed to act as representatives
of the people, remain only passive spectators to an economy left
in private hands for financial profit.
The reality is that all
economies are managed, either by the private sector or by government--usually
by a combination of the two. Any successful economy engages in
forward planning, and any well-balanced economy shapes how "the
market" operates. Adam Smith's Wealth of Nations
was all about how wise governments should shape--and tax--their
markets. America's present-day economic system didn't evolve
through natural forces, much less by divine intervention. Its
industrial takeoff was subsidized by protective tariffs, internal
improvements--that is, public infrastructure spending--and increasingly
progressive taxation.
And conversely, the spate of
tax laws, fiscal giveaways and Federal Reserve policies that
helped inflate the real estate bubble since 2001 were man-made--and
shaped specifically by real estate lobbyists and financial promoters.
FDR fought the battle against high finance decades ago, explaining:
The royalists of the economic
order have conceded that political freedom was the business of
the government, but they have maintained that economic slavery
was nobody's business. They granted that the government could
protect the citizen in his right to vote, but they denied that
the government could do anything to protect the citizen in his
right to work and his right to live.
This is the dimension missing
in today's election campaign. But is not democracy economic as
well as political?
Michael Hudson is a former Wall Street economist
specializing in the balance of payments and real estate at the
Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson,
and later at the Hudson Institute (no relation). In 1990 he helped
established the world's first sovereign debt fund for Scudder
Stevens & Clark. Dr. Hudson was Dennis Kucinich's Chief Economic
Advisor in the recent Democratic primary presidential campaign,
and has advised the U.S., Canadian, Mexican and Latvian governments,
as well as the United Nations Institute for Training and Research
(UNITAR). A Distinguished Research Professor at University of
Missouri, Kansas City (UMKC), he is the author of many books,
including Super
Imperialism: The Economic Strategy of American Empire (new
ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com
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