Today's Stories

September 3, 2009

Marcus Rediker
Inside Auburn Prison

September 2, 2009

John Ross
Mexico's Plagues

Vijay Prashad
Hey Ram, the Things the Financial Times Group Does!

Rev. Jim Rigby
Why is Universal Health Care "Un-American"?

Joanne Mariner
What the Inspector General Found

Missy Beattie
Hejira: At Martha's Vineyard with Cindy Sheehan

Soren Ambrose
Multilateral Money

Diane Farsetta
Water: the Newest Wave of Corporate "Social Responsibility"

Nadia Hijab
Mulling Mullen's Message

Shamus Cooke
How to Lower the Deficit Without Killing Social Security

Charles R. Larson
Is Dick Cheney Running Scared?

Website of the Day
Inside the Egg Hatchery

September 1, 2009

Jeffrey St. Clair
The Wolf at Trout Creek

Paul Craig Roberts
Why Not Sanctions for Israel?

Mark T. Harris
The Whole Foods Boycott: It's About More Than CEO Hypocrisy

Dean Baker
Bank Profits Are Up: Did You Hear Anyone Say, "Thank You"?

Jeffrey Buchanan
Ending the Human Rights Crisis in KatrinaRitaVille

Robin Mittenthal
A Sea of Monocrops: Old MacDonald Never Had a Farm Like This

Ellen Brown
Mercury Mischief

Martha Rosenberg
Vytorin Marketing is Back

Website of the Day
Crazy Town Hall Protester Interviews

August 31, 2009

Pam Martens
Madoff and the SEC's Revolving Door

Anthony DiMaggio
What Obama Isn't Telling You About Afghanistan

Bouthaina Shaaban
Israeli Bodysnatchers

Ray McGovern
The Press and Torture: Covering for Cheney?

Joseph Shansky
Scenes of Resistance in Honduras

Greg Moses
The Dying Dillos of Austin

Brian McKenna
Pig Sacrifice and Swine Flu Panic

David Macaray
The Tender Trap

Brenda Norrell
Uranium Mining in the Grand Canyon

Paul Craig Roberts
The Environment Loses a Champion

Beth Sherouse
Why I'm Going to the Big Gay March in Washington

Website of the Day
The Failure of the Left Antiwar Movement

August 28-30, 2009

Alexander Cockburn
Teddy Kennedy the Hollow Champion

Joshua Frank /
Jeffrey St. Clair
From the Ledge to the Edge: How Tre Arrow Became America's Most Wanted Environmental "Terrorist"

Steve Early
Kennedy's Sins Against Labor

Michael Hudson
Learning About Financialization the Hard Way

Carl Ginsburg
Bernanke in Obamatime

Saul Landau
The Nuclear Gang Rides Again

Dave Marsh
Trapped Again: Michael Jackson's Crossover Dream

Mike Whitney
Band-Aids for the Recession

Dave Lindorff
Obama's War

José Pertierra
A Decision in the Posada Case

Joe Bageant
Obama's Fake Fight for Reform

Ricardo Alarcón de Quesada
Spies Without Espionage

Lee Sustar
On Strike for Health Care Justice

David Ker Thomson
Life in the 'Shed

David Rosen
The Silent Slaughter: Sex Wars and Nation-Building in Iraq

Alison Weir
Israeli Organ Harvesting

Ron Jacobs
Will There be Free Speech in Pittsburgh?

David Swanson
Bush Tortured

Udi Aloni
An Appeal to Israeli Filmmakers

Charles R. Larson
Children During Wartime

Kim Nicolini
District 9: Science Fiction of the Now

David Yearsley
The Wagner Cult in Seattle

Lorenzo Wolff
Riding the Rails with King Curtis

Poets' Basement
Three Poems by Marc Beaudin

Website of the Weekend
The Hidden History of Katrina

August 27, 2009

Andrea Peacock
Bearly Making It: How Many Biologists Does It Take to Count a Dead Grizzly?

Ricardo Alarcón de Quesada
Incapacitating the Cuban Five

Ray McGovern
Closing in on the Torturers

Gideon Levy
The Last Refuge: Neve Gordon and the Boycott of Israel

Shamus Cook
World Bankers Agree: the Recession is Over ... Maybe

Norman Solomon
The Afghanistan Gap

Marshall Auerbach
We Already Have a Public Option

Benjamin Dangl
Reclaiming a Continent

Kathryn Gray
The Water Privateers

David Macaray
Please Buy Our Beer (And Join Our Union)

Website of the Day
Stop the Privatization of Ocean Fisheries

August 26, 2009

Gareth Porter
The Leaking Game: Planted News Stories About Iran and Nuclear Weapons

Dave Lindorff
Getting Away With Torture: Holder's Limited, Modified Hangout

Dean Baker
The Reappointment of Bernanke

Laura Carlsen
The Coup and Honduran Women

Paul Craig Roberts
When the Government Comes First

Laura Raymond /
Bill Quigley
Haiti One Year After the Hurricane

Jordan Flaherty
Still Homeless, Still Struggling in New Orleans

Jonathan Cook
The Long Struggle to Reclaim Beersheva's Great Mosque

Robert Bryce
Bamboozled About Energy

Danny Weil
The Future of Charter Schools

Cindy Sheehan
Farewell, Senator Kennedy

John V. Walsh
Cindy Sheehan's Lonely Vigil in Obamaland

Website of the Day
The President's Laugh Line

August 25, 2009

Gabriel Kolko
Israel: A Stalemated Action of History

Danny Weil
The Charter School Hype and How It's Managed

Martine Bulard
China's Wild West

Ricardo Alarcón de Quesada
The Cuban Five: The Face of Impunity

Bélen Fernández
Why Didn't the Leopard Eat Tom Friedman?

August 24, 2009

Danny Weil
Obama and Duncan's Education Policy: Like Bush's, Only Worse

Neve Gordon
Stopping the Apartheid State
Boycott Israel

John Ross
Mexico's Supreme Court Tosses a Bombshell into Chiapas

Open Letter to Kenneth Roth
Why Has Human Rights Watch Fallen Silent on Honduras?

Dan Bacher
A Burston-Marsteller Greenwash:
Westlands Hoards Surplus Water While Farmers Suffer

August 21-23, 2009

Alexander Cockburn
The Right Wing's Prince of Gonzo

Patrick Cockburn
The Truth About Afghan Election

Ray McGovern
Unwritten CIA Death Contract Awarded to Blackwater

Carl Ginsburg
Paycheck President

Dave Lindorff
American Justice is Not Blind, But it is Truly Sick

M. Shahid Alam
An "Abnormal" Nationalism

Ron Jacobs
The Continuing Story of Camp Ashraf

Eric Walberg
Russia/Georgia/U.S. One Year Later
Who Came Out Ahead

No War on the Moon!
In Defense of the Dark Side of the Moon

Gilad Atzmon
The Hostage Dream: Loving Oneself at the Expense of Another

Crawdad Nelson
What It's Like to Die

David Yearsley
Why I Chose to Play Scarlatti on Bainbridge Island

Justin Frew
Grim Times for Irish Travelers

Website of the Day
Picket Whole Foods Friday!

August 20, 2009

Eugenia Tsao
Inside the DSM:
The Drug Barons' Campaign to Make Us All Crazy

Dave Lindorff
The Worst and the Best Thing to Happen to the Democratic Party in Years

Yonatan Preminger
The Strategy Behind Israel's Migrant Labor Policies

Wajahat Ali
The Detention of Shah Rukh Kahn

Website of the Day
How to cope with flu pandemics

August 19, 2009

David Michael Green
Guess What? He's a Terrible President

Paul Craig Roberts
Americans: Serfs Ruled by Oligarchs

Marshall Auerback
Debt Revolt? Tax Strike? There are a Lot of Angry People Out There

Franklin Lamb
AIPAC Sends in the Clowns

John Ross
Three Amigos Summit

Marjorie Cohn
Legendary Lawyer Doris Brin Walker Dies; Represented Angela Davis, Smith Act Defendants

August 18, 2009

Michael Hudson
The Specter of Debt Revolt Is Haunting Europe?

Mary Lynn Cramer
Obama-Fraud: Don't Confuse Medicare with Single-Payer

Jonathan Cook
U.S. Turns Blind Eye to Israel's New Separation Policy

Uri Avnery
Whose Acre?

Ralph Nader
Block Obama's Abject Surrender to Insurance and Drug Companies

Bill Quigley & Davida Finger
Katrina Pain Index - 2009

August 17, 2009

Ray McGovern
Can the Washington Post Save Dick Cheney?

Andy Worthington
Bagram Isn't the New Guantánamo, It's the Old Guantánamo

Patrick Cockburn
Life and Death in Baghdad as Americans Leave

Don Fitz
The True Story of Fox's Hero, Kenneth Gladney

P. Sainath
Drought of Justice, Flood of Funds

Helena Cobban
Zionist Pioneer Renounces Zionism

August 14-16, 2009

Alexander Cockburn
Health Plans and Death Plans

Jeffrey St. Clair
The Fall of the House of Stanford

Peter Linebaugh
The Commons, the Castle, the Witch and the Lynx

Esam Al-Amin
What Actually Happened in Fatah's Elections?

Marshall Auerback
Why a Debtor's Revolt Would Work

Mike Whitney
Bulletins From Clunkerville

Paul Krassner
Woodstock at Forty

Saul Landau
Health Care and the Seeds of Disunity

Nikolas Kozloff
Colombian Elites Fear Bolivaran Revolution

Henry A. Giroux
Politics After Hope

John Ross
Sleepwalking Through the Minefield

Jonathan Cook
Israeli Land Sale

Isabella Kenfield
Monsanto's Man in the Obama Administration

David Rosen
Sexual Torture, Yet Again

Ron Jacobs
Unconditional Negotiations, Now!

Wajahat Ali
Obama's Immigration Reforms: Neither Humane Nor Thoughtful

David Macaray
Prison Games

Greg Moses
Down in South Texas: the Geometries of Bob Dylan

Charles R. Larson
Egyptian Economics 101

David Yearsley
Stalked by Bill Evans' Ghost: Kind of Blue at Fifty

Lorenzo Wolff
There Ain't Much to Country Livin': the Drive-By Truckers and the Fine Print

Kim Nicolini
Class, Race and Clint

Poets' Basement
Reiss, Ford and Moser

Website of the Weekend
Timidity and Transparency

August 13, 2009

Eduardo Galeano
I Hate to Bother You

Joanne Mariner
Letting Cheney Off the Hook

Michael Donnelly
Burning Forests for Electricity

Norman Solomon
When the Dead Have No Say

Russell Mokhiber
Boycott Whole Foods

Tim Wise
Sick Heil! The Hitlerizing of Obama

Brian M. Downing
Succession and the Pakistani Taliban

Dave Lindorff
Single-Payer and Medicare

David Manning / Miriam Cotton:
Iran Versus Honduras: a Subtle Difference

Martha Rosenberg
John Hughes, Gone With Only 59 Candles

Website of the Day
Congress Can't Find Their As-teroids

August 12, 2009

Michael J. Watts
Nigeria on the Brink

Bouthaina Shaaban
Where are the Arabs to Stand Up for the Hanoun and Ghawi Families?

Ricardo Alarcón
The Cuban Five: Justice in Wonderland

Binoy Kampmark
Terror Australis

Paul Craig Roberts
Concocting the Appearance of Recovery

Alan Farago
Going Down Absurd: the Future of Florida Bay

James Ridgeway
Ghostwriting Your Meds

Dave Lindorff
10 Questions to Ask If You Find Yourself at an ObamaCare Town Hall Meeting

David Macaray
Labor and the Conventional Wisdom

Niranjan Ramakrishnan
The Assimilation of Niranjan Ramakrishnan

Website of the Day
A Petition in Support of Janice Harper

August 11, 2009

Ricardo Alarcón
Forbidden Heroes

Marshall Auerback
America's Biggest Economic Problem?

Reza Yavari
Inside Iran's Most Infamous Prison

Winslow T. Wheeler
How Congress Pays For Its Pork

Tim Wise
Red-Baiting and Racism

Uri Avnery
A Moral Person

Deepak Tripathi
Getting Away With Torture

Greg Moses
Time to Plan for the Worst

Benjamin Dangl
Boycotting Big Beer

Dave Lindorff
Hecklers Unite! Why Aren't Progressives Disrupting ObamaCare Town Halls?

Website of the Day
What Bush Told Chirac About the Iraq War

August 10, 2009

David Price
Trial by FBI Investigation

Mike Whitney
There is No Recession; It's a Planned Demolition

Alan Farago
Seeds of Destruction: How the National Economy was Wrecked by the Politics of Deregulation in Florida

Conn Hallinan
The Honduran Coup: a U.S. Connection

Russell Mokhiber
Health Care: In Defense of Disruption

Paul Krassner
The Mystery Behind the Manson Murders

Sousan Hammad
Orgy of the Dead: the 2009 Fatah Conference

Jonathan Cook
Israeli School Apartheid

Ira Glunts
Netanyahu's Sister-in-Law Detained by Israeli Police; Calls Evictions an Unjustified Folly

George Wuerthner
Dead Tree Hysteria

Website of the Day
Conyers: ObamaCare is Crap

August 7 - 9, 2009

Alexander Cockburn
It Pays to Have a Nuke

Mike Whitney
Economy on a Scaffold

Elaine C. Hagopian
Obama's Israel Albatross

Carl Ginsburg
RX For Healthcare

Miguel Tinker Salas
Honduras is Only Part of the Story: the Conservative Counter-Attack in Latin America

Saul Landau
The Kidney Broker and the Money Laundering Rabbis

John Ross
The Mexican Genome: Big Science in the Service of Indian Genocide?

Anthony DiMaggio Obama and the Israel Lobby: Origins of Power

John Stanton
Expanding Human Terrain Systems?

Christopher Brauchli Legal Absurdities: Outing Three Strikes

Wajahat Ali
A Muslim American Hero: an Interview with Dave Eggers on "Zeitoun"

Ron Jacobs
As Long as the Wars Continue, We Must Resist Them

Franklin Lamb
Sunday Morning on the Dunes: Cleaning "Free Gaza Beach"

Bruce E. Levine
Protect Us From Our Friends

Michael Winship
Neighborhood Watch for Planet Earth

David Macaray
Glimmers of Hope for Labor?

Stephen Fleischman
Suicide Squad

Robert Bryce
Unplugging the Next Big Thing: the Hype Over Electric Cars

Robert Dodge, MD: Hiroshima and Nagasaki Remembered

Mark Seth Lender
The Message of the Glossy Ibis

David Yearsley
Vaucanson's Faun and the Duck in the Attic

Ben Sonnenberg
Chris Fuller's Brilliant Debut

Lorenzo Wolff
When Music's the Character

Poets' Basement
Dominguez and Corseri

Website of the Weekend
Warren Buffett's Betrayal

August 6, 2009

Ishmael Reed
Let's All Have a Beer

Paul Craig Roberts
The Expiring Economy

William Blum Assassinations and Coups: Keeping Track of the Empire's Crimes

Michael Donnelly
Rod Coronado: the Hardest Working Man in Animal Rights "Terrorism"

Jonathan Cook
Rabbis Ban Marriage for Israeli "Untouchables"

Dave Lindorff
The Health Care Reform Sell-Out

Ellen Brown
The Public Option in Banking

Website of the Day
Ellsberg on Hiroshima

August 5, 2009

Dedrick Muhammad /
Barbara Ehrenreich
The Destruction of the Black Middle Class

Norman Solomon
The Incredible, Shrinking Health Care Plan

William Blum
The Myths of Afghanistan: Past and Present

Gareth Porter
The ISI and the Taliban: US Officials Are Protecting Pakistani Aid to Taliban

Mary Lynn Cramer
The Myth of Medicare for All

Jim Goodman
Obama Needs to Take a Stand on Trade

Nadia Hijab
Playing From Strength in the Middle East

Gretchen Kroth
Guatemala's Garbage Dump Education System

Steve Macek /
Scott Sanders
Privatizing the Airwaves

Sarah Lazare
Inside G.I. Resistance

Website of the Day
The Locavore Myth

August 4, 2009

Mike Whitney
Bernanke's Shell Game

Dave Lindorff
The Recession Isn't Over, By a Long Shot

Patrick Cockburn
Did British Bomb Attacks in Iran Provoke Hostage Crisis?

Jonathan Cook
Israel's Campaign to Silence Human Rights Groups

Jeff Sher
Making a Mess of Health Care Reform

Dean Baker
Why Don't We Globalize Health Care?

Andy Worthington
Gitmo as Hotel California

Uri Avnery
A Jeremiad

Mark Weisbrot
U.S.-Brokered Mediation in Honduras Has Failed

Alvaro Huerta
Hold That Dustbin! So Much for the "End of Racism"

Website of the Day
Pentagon to Ban Facebook and Twitter?

September 3, 2009

The Long Adjustment

How Bad Will It Get?

By MIKE WHITNEY

The U.S. economy is at the beginning of a protracted period of adjustment. The sharp decline in business activity, which began in the summer of 2007, has moderated slightly, but there are few indications that growth will return to pre-crisis levels. Stocks have performed well in the last six months, beating most analysts expectations, but weakness in the underlying economy will continue to crimp demand reducing any chance of a strong rebound. Bankruptcies, delinquencies and defaults are all on the rise, which is pushing down asset prices and increasing unemployment. As joblessness soars, debts pile up, consumer spending slows, and businesses are forced to cut back even further. This is the deflationary spiral Fed chairman Ben Bernanke was hoping to avoid. Surging equities and an impressive "green shoots" public relations campaign have helped to improve consumer confidence, but the hard data conflicts with the optimistic narrative reiterated in the financial media. For the millions of Americans who don't qualify for government bailouts, things have never been worse.

Kevin Harrington, managing director at Clarium Capital Management LLC, summed up the present economic situation in an interview with Bloomberg News: “If we have a recovery at all, it isn’t sustainable. This is more likely a ski-jump recession, with short-term stimulus creating a bump that will ultimately lead to a more precipitous decline later."

Reflecting on the Fed's unwillingness to force banks to report their losses on hard-to-value illiquid assets, Harrington added, “We haven’t fixed the problem. We’ve just slowed down the official recognition of it."

In the two years since the crisis began, neither the Fed nor policymakers at the Treasury have taken steps to remove toxic assets from banks balance sheets. The main arteries for credit still remain clogged despite the fact that the Bernanke has added nearly $900 billion in excess reserves to the banking system. Consumers continue to reduce their borrowing despite historically low interest rates and the banks are still hoarding capital to pay off losses from non performing loans and bad assets. Changes in the Financial Accounting Standards Board (FASB) rules for mark-to-market accounting of assets have made it easier for underwater banks to hide their red ink, but, eventually, the losses have to be reported. The wave of banks failures is just now beginning to accelerate. It should persist into 2011. The system is gravely under-capitalized and at risk. Christopher Whalen does an great job of summarizing the condition of the banking system in a recent post at The Institutional Risk Analyst:

"The results of our Q2 2009 stress test of the US banking industry are pretty grim. Despite all of the talk and expenditure in Washington, the US banking industry is still sinking steadily and neither the Obama Administration nor the Federal Reserve seem to have any more bullets to fire at the deflation monster. With the dollar seemingly set for a rebound and the equity and debt markets looking exhausted, one veteran manager told The IRA that the finish of 2009 seems more problematic than is usual and customary for the end of year.

Plain fact is that the Fed and Treasury spent all the available liquidity propping up Wall Street’s toxic asset waste pile and the banks that created it, so now Main Street employers and private investors, and the relatively smaller banks that support them both, must go begging for capital and liquidity in a market where government is the only player left. The notion that the Fed can even contemplate reversing the massive bailout for the OTC markets, this to restore normalcy to the monetary models that supposedly inform the central bank’s deliberations, is ridiculous in view of the capital shortfall in the banking sector and the private sector economy more generally." (2ndQ 2009 Bank Stress Test Results: The Zombie Dance Party Rocks On" Christopher Whalen, The Institutional Risk Analyst)

It's not just the banking system that's in trouble either. The stock market is beginning to teeter, as well. Bernanke's quantitative easing (QE) program has provided enough liquidity to push equities higher, but he's also created another bubble that's showing signs of instability. According to Charles Biderman, CEO of TrimTabs Investment Research, the Fed's bear market rally has run out of gas and company insiders are headed for the exits as fast as they can.In a Bloomberg interview Biderman said:

"Insider selling is 30 times insider buying, while corporate stock buybacks are non-existent. Companies are saying they don't want to touch their own stocks."..."When companies are heavy sellers (of their own stocks) and retail customers are borrowing to buy stocks; that's always been a sign of a market top."

The best-informed market participants believe that the 6-month rally is beginning to fizzle out. The consensus is that stocks are grossly overpriced and the fundamentals are weak. Bernanke's strategy has improved the equity position of many of the larger financial institutions but, unfortunately, there's been no spillover into the real economy. Money is not getting to the people who need it most and who can use it to get the economy moving again.

The economy cannot recover without a strong consumer. But consumers and households have suffered massive losses and are deeply in debt. Credit lines have been reduced and, for many, the only source of revenue is the weekly paycheck. That means everything must fall within the family budget. The rebuilding of balance sheets will be an ongoing struggle as households try to lower their debt-load through additional cuts to spending. But if wages continue to stagnate and credit dries up, the economy will slip into a semi-permanent state of recession. Washington policymakers--steeped in 30 years of supply side "trickle down" ideology--are not prepared to make the changes required to put the economy on a sound footing. They see the drop in consumption as a temporary blip that can be fixed with low interest rates and fiscal stimulus. They think the economy has just hit a "rough patch" between periods of expansion. But a number of recent surveys indicate that they are mistaken, and that "This time it IS different". Working people have hit-the-wall. Consumers will not be able to lead the way out of the slump.

According to a recent Gallup Poll:

"Baby boomers' self-reported average daily spending of $64 in 2009 is down sharply from an average of $98 in 2008. But baby boomers -- the largest generational group of Americans -- are not alone in pulling back on their consumption, as all generations show significant declines from last year. Generation X has reported the greatest spending on average in both years, and is averaging $71 per day so far in 2009, down from $110 in 2008....

Gallup finds significant declines among all generations in average reported daily spending in 2009 compared to 2008. Given that consumer spending is the primary engine of the U.S. economy, it's not clear how much the economy can grow unless spending increases from its current low levels. But spending may not necessarily be the best course of action for baby boomers as they approach retirement age and prepare to rely on Social Security and their retirement savings as primary sources of income. Indeed, the two generations consisting largely of retirement-age Americans consistently show the lowest levels of reported spending. ("Boomers' Spending, like other Generations, Down Sharply", Jeffrey M. Jones, Gallup)

It no longer makes any sense for people to spend more than they can afford, nor is it possible. US households doubled their debt in the last seven years to nearly $14 trillion. The massive borrowing binge fueled economic growth and pushed assets--particularly housing--steadily higher. But the spending-spree was only possible because of low interest rates, lax lending standards and deep-pocketed trading partners who were only-too-eager to purchase boatloads of US securities, bonds (Fannie and Freddie) and Treasuries. Now conditions have changed; funding has dried up and central banks and foreign investors have limited their purchases to Treasuries. Consumers are left to fend for themselves in a hostile environment where both jobs and credit are scarce.

Household budgets have never stretched as far as they are today. Housing prices have dropped 33 percent from their peak in 2007, but household deleveraging has only just begun. There's a lot of belt-tightening to do if families plan to reduce their aggregate debt by roughly $2.5 trillion and return debt-to-equity ratios to their normal trend-line. Policymakers need to focus on debt-relief and mortgage-principle writedowns to ease the transition and get people back on their feet again.

The current recession has exposed the fault-lines dividing the classes in the US. Neither party represents working people. Both the Democrats and the Republicans are supportive of "social engineering for the rich"; regressive taxation and economic policies which shift a greater portion of the wealth to the richest Americans. The question of inequality, which has grown to levels not seen since the Gilded Age, will dominate the national conversation as the recession deepens and more people slip from the ranks of the middle class. The vast chasm between the mega-rich and everyone else is explored in a recent report by University of California, Berkeley economics professor Emmanuel Saez, who concludes that income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression. The report shows that:

"The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007" ...The top 14,988 households received 6.04% of income, the highest figure for any year since the data became available. The top 1% of households received 23.5% of income, while the top 10% received 49.7% of income (the highest on record.)"

Why does this matter? Apart from the moral question of whether a handful of people deserve to live like kings while others live in squalor; there is the political question: Are our politics being driven by plutocrats whose only interest is to fatten the bottom line and increase their own power? Don Monkerud addresses the issue in his article "Wealth Inequality Destroys US Ideals" (Consortium News):

"Over 40 percent of GNP comes from Fortune 500 companies. According to the World Institute for Development Economics Research, the 500 largest conglomerates in the U.S. "control over two-thirds of the business resources, employ two-thirds of the industrial workers, account for 60 percent of the sales, and collect over 70 percent of the profits."

Corporations systematically created a wealth gap over the last 30 years. In 1955, IRS records indicated the 400 richest people in the country were worth an average $12.6 million, adjusted for inflation. In 2006, the 400 richest increased their average to $263 million, representing an epochal shift of wealth upward in the U.S." (Don Monkerud "Wealth Inequality Destroys US Ideals" Consortium News)

The US consumer no longer has the capacity to bounce back and generate sufficient demand to produce positive growth. According to McKinsey Global Institute, Homeowners withdrew "$2.3 trillion in home equity loans and cash-out refinancings between 2003 and 2008." Most of the money was spent on personal consumption. Where will the money come from now that home equity has gone negative? The Obama administration will need a second, third and fourth stimulus just to fill the gaping hole left by the collapse of the housing market.

The Fed and its allies in the corporate/financial establishment, have killed the Golden Goose. After Obama's stimulus runs out, consumer spending will again sputter and the economy will slide back into recession. As personal consumption declines, U.S. markets will become less attractive to foreign exporters. There will be no need to continue trading in dollars.

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com

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