Today's Stories

December 22, 2008

Pam Martens
Madoff's Money Trail Leads to Washington

December 19 - 21, 2008

Alexander Cockburn
An Ethnic Cleansing in America

Jeffrey St. Clair
Salazar and the Tragedy of the Common Ground

Paul Craig Roberts
Country Without Mercy

Patrick Cockburn
The Baathist "Coup Plot"

Felice Pace
Green Myopia: Obama's Appointments Reveal What's Wrong with the Environmental Movement

Diane Farsetta
The Pentagon's PR Slush Fund

George Ciccariello-Maher
By the Time I Get to Arizona: ICE Raids and Resistance in Flagstaff

Eric Bergoust
Extinct Lifestyles: Redefining Prosperity

Marjorie Cohn
Torture Without Regrets: Cheney's Unrepentent Confession

Stan Cox
Clothes and Commentaries That Don't Fit

Michael Donnelly
Clinton III: Continuity We Can Believe In

Robert Weissman
The Auto Bailout

Ralph Nader
Excluded Democracy: Scholastic and the Two Party System

Alan Farago
Shock and Awe Economics

Sam Smith
Not All Public Work is the Same

Timothy G. Hermach
What Happened on the Way to the Inauguration?

Seth Sandronsky
Who's Not Getting By and Why

Rannie Amiri
All Quiet on the Gazan Shore

David Yearsley
Bach as Jihadi

Martha Rosenberg
Wyeth's Pay-to-Play

Dave Lindorff
White House Lied About Iraqi Yellowcake Buy (But That's Not the Biggest Scandal)

Christopher Brauchli
Weekend at Bernie's: the Confinement of Mr. Madoff

Missy Beattie
President Meathead

Richard Rhames
Corporatizing the Kids

Stephen Martin
Full-Spectrum Dominance of the Big Lie

Paul Krassner
Milk and Twinkies

Lorenzo Wolff
Does Coldplay Give a Shit Anymore?

Poets' Basement
Kathwari, Halling and Payne

Worthy Group of the Weekend
Heartwood

December 18, 2008

Phillip Doe
The Man in the Hat: Salazar and the Status Quo

Ronnie Cummins
Vilsack: Another Shill for Monsanto

Jesse Sharkey
No School Left Unsold: Arne Duncan's Privatization Agenda

Saul Landau
Postcard from Venezuela

Peter Morici
What's Next for the Fed?

Dave Lindorff
Prosecuting Bush and Cheney for Torture

Panos Petrou
Days of Rage in Greece

Jeff Cohen /
Norman Solomon
The 2008 P.U.-litzer Prizes: the Stinkiest Media Performances of the Year

Worthy Group of the Day
Organic Consumer Alliance

December 17, 2008

Peter Lee
Pushing Pakistan Over the Edge

Conn Hallinan
Angels and Demons in Mumbai

Mike Whitney
Bernanke's Fatal Flaw

Jeff Halper
Obama and the Israel-Palestine Conflict

Alan Farago
The Audacity of Parkland

Peter Morici
The Big Hole

Norm Kent
Obama Lights Up

Col. Douglas MacGregor
The Price of Expediency

Margaret Kimberley
Blacks and Gay Rights

Ron Jacobs
The Myth of the Good Guy: Waiting on a President to Do the Right Thing

Worthy Group of the Day
Campaign to End the Death Penalty

December 16, 2008

Vicente Navarro
A Forgotten Genocide: the Case of Spain

Patrick Cockburn
Each Shoe was Worth a Thousand Words

Thomas Michael Power
Back to the Pump: an Economic and Environmental Dead End

Jason Hribal
Orangutans, Resistance and the Zoo: the Story of Ken Allen and Kumang

Farzana Versey
Straw Warriors and the Pantomime of Patriotism

Wajahat Ali /
Ahmed Rashid
Indian Muslims: Defining Their Loyalty

Mats Svensson
The Order to Destroy has been Given

Paul Fitzgerald /
Elizabeth Gould
Mumbai Terror's Afghan Roots

David Macaray
Workplace Violence and Termination Etiquette

Howard Lisnoff
Left Control of Academia? The Case of William Felkner

Worthy Group of the Day
AWR: the Last, Best Hope for Saving the Big Wild

December 15, 2008

Andy Worthington
Hit Me Baby One More Time: a History of Music Torture in War on Terror

Franklin Lamb
Why Hezbollah Stiffed Carter

Karl Grossman
Dr. Chu's Nuclear Prescription

Brian Cloughley
Land of the Free (To Torture and Imprison Without Trial)

Mary Lynn Cramer
Stiglitz's Foolishly Flawed Morality

Steve Early
From Nicky Pockets to Blago: Why Pay-to-Play is Bad for Labor

Thomas Christie
Pentagon Train Wreck Awaits Obama

Ken Paff
Remembering Ron Carey: a Great Labor Leader

Niranjan Ramakrishnan
What is India to Do?

Dave Lindorff
A Hero of Our Time: Muntadar al-Zaidi

Alan Farago
The Artless Dodger

Worthy Group of the Day
Davis-Putter Scholarship Fund

December 12 / 14, 2008

Alexander Cockburn
Hail to Chicago, Beacon of American Values

Michael Hudson /
Jeffrey Sommers
The End of the Washington Consensus

David Price
The Leaky Ship of Human Terrain Systems

Jeffrey St. Clair
Nukes Up the Hudson

Frank Barat
An Israeli in Gaza: an Interview with Jeff Halper

John Ross
Writing a Thesis in Blood

Binoy Kampmark
Humanitarian Imperialism: Obama and the Genocide Task Force

David Macaray
Killing the Auto Bailout: a Dagger to the Heart of Organized Labor

Ralph Nader
Antidotes to Plunder: a Holiday Reading List

Eamonn Fingleton
Whatever Happened to Iris Chang?

Lawrence Velvel
Why Blagojevich Might Be Acquitted

Behzad Yaghmaian
The Housing Crisis: a Timebomb China Can't Defuse

Sam Husseini
Putting the Pro in Protest

Tom Barry
Incentives to Detain: How Immigrants Drive Prison Profits

Howard Lisnoff
Why I Went to Jail

Laura Carlsen
Mexico's Immigration Problem

Raj Patel
The WTO and Other Fairy Tales

Ron Jacobs
The Manufacturing of History

Paul Watson
Risky Business Down Under

David Yearsley
They Also Serve Who Only Pull or Tread

Lorenzo Wolff
So You Want Be a Rock 'n' Roll Star...

Kim Nicolini
Finally, a Vampire Movie You Can Sink Your Teeth Into

Susie Day
Proposition 1984: the Problem with Heterosexuals

Poets' Basement
Gibbons, Lerch and Crete

Worthy Group of the Weekend
Energy Justice

December 11, 2008

Patrick Cockburn
Total Defeat for U.S. in Iraq

P. Sainath
After Mumbai

Vicken Cheterian
The Zarqawi Generation

Ray McGovern
Will Obama Buy Torture-Lite?

Dedrick Muhammad
Post-Racial Racism at the Post: the Undying Obsession with Black Family Values

Lee Sustar
Victory at Republic

Peter Morici
The Big Drag

Ayesha Ijaz Khan
Must They Hate Us So?

George Wuerthner
Another Subsidy to Big Timber?

Christopher Brauchli
Mr. Berg's Strange Obsession

Worthy Group of the Day
Animal Balance

December 10, 2008

Ismael Hossein-Zadeh
Whose Interests Will Shape Obama's Change?

Mary Lynn Cramer
The Multi-Trillion Dollar Question

Manuel Garcia, Jr.
Nuclear Weapons Obsolescence

Joshua Frank
Breaking the Stranglehold on Middle East News Coverage

Jack Ely
Stop Sobbing About Free Music Downloads: a Message to the Music Industry from the Lead Singer of the Kingsmen

Steve Conn
An Obama Public Works Program?

Lee Sustar
Republic Workers Target Bank of America

Glen Ford
The Die is Cast

Stephen Lendman
The Persecution of Syed Fahad Hashmi

Nadia Hijab
The Face of America

Dave Lindorff
We All Need a Union

Website of the Day
This One's For You, Senator Dodd

December 9, 2008

Mike Whitney
Card Check

Fawzia Afzal-Khan
Us vs. Them

Ghada Karmi
The UN Resolution That Time Forgot

Dave Lindorff
A Car Dealer Explains Why the Bailout is a Raw Deal

Steve Breyman
Notes on a Green Economy: Managing Stuff in the 21st Century

Lee Sustar /
Nicole Colson
Raising the Stakes at Republic

Rev. William E. Alberts
God of Our Fathers

Martha Rosenberg
Bill Richardson: Secretary of Bloodsports

Sam Husseini
How Holbrooke Lied His Way Into a War

David Macaray
The UAW in Peril

Website of the Day
This Toxic Life

December 8, 2008

Steve Early
Is Obama Backing Off a Crucial Pledge to Labor?

Michael Hudson
Obama's Favoritism: Wall Street, Not the Auto Industry

Patrick Cockburn
Talking to a Lashkar Militant

Diane Farsetta
An Officer and a Conflicted Man: McCaffery, the Pentagon and Fleishman-Hillard

Paul Craig Roberts
Chapters in Imperial Hypocrisy

Daniel Gross
The Chicago Sit-Down Strike

Saul Landau
To Bail or Not to Bail?

Harvey Wasserman
Why John Bryson is Unfit for Energy Secretary

Mike Ferner
The New Generation of "Non-Lethal" Weapons

Norman Solomon
The Silent Winter of Escalation

David Michael Green
The Other Foot

Website of the Day
The Remains of Detroit

December 5 / 7, 2008

Alexander Cockburn
Honeymoans From the Left

Brian Cloughley
Shambles in Afghanistan

Paul Craig Roberts
Muslim Revolution: How Washington Arrogance Helped Drive the Mumbai Attacks

Liaquat Ali Khan
Mumbai and the Kashmir Tinderbox

Farzana Versey
Mumbai's Charge of the Lightweight Brigade

Peter Lee
Pakistan Nears the Breaking Point

Peter Morici
Slouching Toward a Depression?

Ralph Nader /
Toby Heaps
Junk Cap-and-Trade

Yinon Cohen /
Neve Gordon
Obama Could End the Israeli-Palestinian Conflict: Will He Meet the Challenge?

Wajahat Ali
Perverse Justice: the Holy Land Foundation Convictions

Johnny Barber
Aswad's Story: Illegal Detention and the Declaration of Human Rights

Alan Farago
Fallout from the Pass-Through Economy

Jeremy Scahill
Obama Doesn't Plan to End Occupation of Iraq

Mike Whitney
Powergrab in Ottawa

Ranjit Hoskote
Jahiliyya Versus Jihad

Carl Finamore
Thank God I'm an Atheist! (Or Boy is Bill O'Reilly in for a Big Surprise)

Marjorie Cohn
Obama and Women's Rights

Norm Kent
Tommy Chong, the Unanticipated Warrior

Missy Beattie
What Lies Ahead

Binoy Kampmark
Committing Suicide On-Line: the Briggs Case

David Macaray
The Best and the Brightest Redux: Too Many Brains, Not Enough Humility

Nancy Stohlman
Relational Activism

Ron Jacobs
Irreverent Politics Then and Now

David Yearsley
Thematics From the Golden Past

Lorenzo Wolff
Troubled Songs of Home and War

Poets' Basement
Orloski: The Door Opener

Website of the Weekend
In Prison My Whole Life

December 4, 2008

Ece Temelkuran
Inside the Ergenekon Case

Ralph Nader
Turning Crisis into Opportunity: Who Will Seize the Moment?

Harry Browne
The Bush-Obama National Security Strategy

Eamonn Fingleton
The American Car Industry: a Riposte to the Knockers

Conn Hallinan
The Syria Attack

Mike Whitney
Fiasco in Somalia: Another CIA Cock-Up

Stewart J. Lawrence
Obama and Latinos: Richardson, Alone, is Not Enough

Paul Fitzgerald /
Elizabeth Gould
Message to Obama: Stop Killing Afghanis

Karyn Strickler
Show Us the Green, Before We Show You the Money

Jennifer Matsui
Obama-Cola: the Great National Temperance Beverage

Website of the Day
"He Ain't Got Laid in a Month of Sundays..."

December 3, 2008

Andrew Cockburn
What's Wrong with the U.S. Military

Sheldon Rampton
Mormon Homophobia: Up Close and Personal

Robert Weissman
Nationalize GM

Yifat Susskind
From Mumbai to Washington

William Blum
The Obama Bummer: Vote First, Ask Questions Later

Alan Singer
The Ghost of the Defunct Economist

David Macaray
Trampled Under Foot at Wal-Mart

Martha Rosenberg
Born With a Statin Deficiency? Line Forms to the Left!

Mats Svensson
The Crimes Have No Period of Limitations

Website of the Day
Why Bill Richardson's Nomination Should be Opposed

December 2, 2008

Jeremy Scahill
Obama's Kettle of Hawks

Paul Craig Roberts
The New Arms Race

Ayesha Ijaz Khan
The Mumbai Terror Attacks: Is Pakistan to Blame?

Sarah Anderson /
John Cavanagh
Skewed Priorities: How the Bailout Dwarfs Spending on Other Global Crises

William Blum
The Mythology of the War on Terrorism

John Ross
Mexico's Drug War Goes Down in Flames

Dave Lindorff
A Tale of Two Terror Attacks

Nicola Nasser
A Peace Process That Makes Peace Impossible

Steve Conn
Operation Redskin Removal

Robert Bryce
Coal Hard Facts

Website of the Day
Country, Funk, Soul

December 1, 2008

Patrick Cockburn
From Baghdad to Mumbai, by Way of Pakistan

Damien Millet /
Eric Toussaint
Obama's Economic Team: Records of Failure

Vijay Prashad
The Fires in South Asia

Deepak Tripathi
Obama's Foreign Crises

Joshua Frank
Madam Secretary Clinton and the Middle East

P. Sainath
The Unlikely Martyrdom of Free Market Jihad

Alan Farago
The Right's War on Regulators

Binoy Kampmark
Sydney's Ball and Chain

Chris Genovali
Silent Fall

David Michael Green
Hope You Die Before You Get Old

Stephen Martin
The Chinese are Coming, the Chinese are Coming!

Website of the Day
Robert Rubin: Coward, Liar or Both?

November 28-30, 2008

Alexander Cockburn
In Time of Trouble

Mike Whitney
The Obama "Dream Team": Rubin Clones and Other Fakers

Ted Honderich
What is the Meaning of Obama's Election?

Tom Kerr
Preserving Filthy Lucre (Or Becoming My Dad)

Mike Ely
The Conquest of New England

David Yearsley
Hymns of the Conquest

Deepak Tripathi
Uproar in Police-State Britain

Sonja Karkar
Gaza's Death Throes

Ramzy Baroud
Salvation in a News Broadcast

Robert Weitzel
Israel's Settlement on Capitol Hill

Robert Roth
Can We Create a Movement for Change?

Carlos Fierro
Obama and the End of Racism?

David Macaray
How to Kill a Union

David Rosen
A New Sexual Agenda

James Cockcroft
Indigenous People Rising

Stan Cox
The Most Disappointing Gift

Steve Conn
Talking Turkey About College Basketball

Stephen Martin
The Electromagnetic Pulse and Economic Warfare

Richard Rhames
Busty Bimbettes, Bombs and Brand Obama

Kim Nicolini
Women as Products and Cannibalistic Achievers

Lorenzo Wolff
A Battle Cry for the Confused and Vulnerable

Poets' Basement
Woods, Harrison and Corseri

December 22, 2008

Bail Out the Economy?

More Pay is the Only Way

By MIKE WHITNEY

Wages, wages, wages. It all gets down to wages.

A strong, resilient economy, that can withstand the periodic buffeting of cyclical downturns, must be built on a rock-solid foundation of wages that keep pace with production. If wages stagnate, as they have for the last 30 years, the only way a consumer-driven economy can grow is through the expansion of personal debt, which isn’t so hot in the long run.

Consider this: the US economy is 72 per cent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don't keep up with the price of living. Low Income Families (LOF)--that is, any couple making less than $80,000--represent 50 per cent of all consumer spending. These LOF's spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they're already spending every last farthing they earn?

They can't! Which is why wages have to go up, up, up. The cost to short-term profits is small potatoes compared to the turmoil created by a deep recession, which is what the world is facing right now due to misguided economic policies. The present crisis could have been averted if there was a better balance between management and labor. But the unions are weak and have little political power, so salaries have languished while Wall Street has turned the government into a revolving door for industry reps. and corporate stooges who apply their anti-labor doctrine with ruthless zeal. As a result,  real wealth has been replaced by chopped up bits of mortgage paper, stitched together by Ivy League MBAs, and sold to investors as priceless gemstones. 

This is the system that Bernanke seeks to resurrect with his multi-trillion dollar transfusion; a system that shifts a larger and larger amount of the nation's wealth to a smaller and smaller group of elites.

When Alan Greenspan appeared before Congress two months ago, he admitted that he had discovered a "flaw" in his theory of how markets operate. The former Fed chief was referring to his belief that financial institutions could regulate themselves and that investment bankers and hedge fund managers could be trusted to uphold the "honor system". Whether one believes Greenspan or not is immaterial. What really matters is that the foul-breathed former Chairman skirted the larger issue of whether the economy can long endure simply by expanding credit rather than raising workers wages. The servile congress people  never challenged Greenspan on the central issue nor did they ask him to defend the discredited, trickle-down Randian economic theories which guided his policy-making.

Millions of homeowners are now facing eviction, consumers are tapped out, and the job market is in a shambles. When equity bubbles implode, it's never pretty and Greenspan's zeppelin has been particularly nasty. Assets are sold at fire sale prices and there's a frantic rush to the safety of cold hard cash. The sense of fear is palpable. It may seem like a bad time to talk about a raise in pay but, in fact, the opposite is true. Nothing focuses the mind like crisis, and the impending meltdown promises to be a whopper.  That creates the opportunity for change; real structural change.

The point is, that bubbles can be avoided if demand is predicated on regular wage increases rather than debt. It's that simple. The ferocity of the "boom and bust" cycle can be mitigated by just providing workers with a decent salary. That way they can buy the things they produce without going into debt. It also means that demand doesn't have to be fabricated with perilous amounts of credit and leveraging. Of course, this approach is starkly different from that of the Fed. Bernanke just announced his plan to slash interest rates to .25 percent while purchasing $800 billion of securities backed by mortgages, credit card debt and student loans. The message could not be clearer. The Fed is saying, "We will lend you as much as you want but, as far as a raise; forgeddaboutit." This illustrates how bubblemaking is really an expression of class bias that cannot be eradicated with reason alone. it takes real political power. 

From Bernanke and Greenspan's perspective, any small gain by workers is regarded as "anti-free market" and tantamount to communism. The corporate mandarins would like to preserve the current antagonistic, labor-debasing system and keep workers one paycheck away from the homeless shelter. But it’s not good for the economy and it's not good for the country. It just perpetuates the chasm between rich and poor, suggesting of a species irreconcilably divided into slave owner and chattel. The only way to overcome these differences is by narrowing the wealth gap and rewarding hard work with fair pay. 

John Bellamy Foster and Fred Magdoff explain how establishment economists and their corporate patrons developed their ideas of how to use equity bubbles to grow the economy and shift wealth from workers to elites. In their Monthly Review article "Financial Implosion and Stagnation":

"It was the reality of economic stagnation beginning in the 1970s, as heterodox economists Riccardo Bellofiore and Joseph Halevi have recently emphasized, that led to the emergence of “the new financialized capitalist regime,” a kind of “paradoxical financial Keynesianism” whereby demand in the economy was stimulated primarily “thanks to asset-bubbles.” Moreover, it was the leading role of the United States in generating such bubbles—despite (and also because of) the weakening of capital accumulation proper—together with the dollar’s reserve currency status, that made U.S. monopoly-finance capital the “catalyst of world effective demand.”

Greenspan figured out how to strengthen the grip of the banking sector by creating asset bubbles. That was his contribution during the Clinton years. The leveraging of complex financial products and the surge in real estate prices gave the impression of prosperity, but it was all smoke and mirrors. The "wealth effect"  vanished as soon as the interest payments on mortgages could no longer be paid. That's when Maestro's bubble blew up and Greenspan retired to write his memoirs. 

So far, world stock indexes have lost over $30 trillion and there will probably be another bloody leg-down in 2009. As the underlying economy contracts, there's no need for a lumbering, oversized financial system. Institutions will have to be shut down and their assets will have to be sold at auction. That means prices will continue to fall, business activity will falter, and GDP will shrivel. The mismatch between output and falling demand presages a painful correction. When credit gets scarce, speculative investment can't sufficiently lubricate the system, and a stampede for the exits begins. These are the real costs of asset bubbles; a quick descent into deflationary hell. Economist Henry Liu made these observations in his article "China and the Global financial Crisis":

INDENT

"US neoliberal trade globalization, having promised a primrose garden of economic growth, has instead led the global economy into a jungle of poison reed, resulting in the worst financial disaster in a century, setting the whole world ablaze with a financial firestorm. This unhappy fate was finally acknowledged as having been policy-induced by Alan Greenspan, the former Chairman of the US Federal Reserve who was largely responsible for the monetary indulgence that had caused this hundred-year financial perfect storm. Greenspan confessed before Congress that his trust on transnational finance institutions for self-regulation as a survival instinct had been misplaced, leading him to a flawed policy in support of anarchical financial deregulation and permissive risk management.
 
Still, Greenspan left unmentioned his equally misplaced faith in central bank ability to mitigate the adverse effect of burst bubbles by creating larger sequential bubbles with more liquidity. The Federal Reserve under Greenspan repeatedly created money faster than the global economy could profitably absorb, creating serial bubbles denominated in fiat dollars. Greenspan insisted that it was not possible, nor desirable, to identify an economic bubble in the making as he was inflating it with easy money, lest economic growth should be prematurely cut short. It was a perfect example of the rule that intoxication begins when a drinker becomes unable to know its time to stop drinking.
 
On a more fundamental level, politically independent central banking under Greenspan, instead of being a market-stabilizing force, has become part of the destabilizing causes of recurring economic bubbles." (Henry C.K. Liu China and the Global Financial Crisis", Asia Times.)

END INDENT

  The Fed and its Wall Street colleagues have reworked the economy in a way that diverts energy from productive activity to myriad credit-enhancing scams that create an inherently unstable financial system. Even now, with manufacturing in tatters, consumer spending at its nadir and factories hemorrhaging jobs at a Depression-era pace; Bernanke is still trying to keep the teetering banking giants propped up and out of Chapter 11. It's a fool's errand. The economy needs to fixed from the bottom-up not the top-down; that's just throwing money down a rathole.

If the Fed was serious about fulfilling its mandate, it would be looking for ways to create a living wage for all workers so that opportunity is more than just an empty slogan. Better still, Bernanke should abandon his credit-generating enterprise altogether and support the movement to strengthen unions so that wages can keep pace with production. That's the best bailout plan yet.

Mike Whitney can be reached at fergiewhitney@msn.com

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