Monday, July 30, 2012

The Washington Post Continues Its Love Affair With NAFTA and Disdain for Facts

Sunday, 29 April 2012 07:10
AddThis
The Washington Post was a strong supporter of NAFTA at the time the deal was approved. It continues to be a strong defender of the pact nearly two decades later. It has repeatedly shown itself willing to make up facts or just ignore them to push its pro-NAFTA line.
An example of the former occurred in December of 2007 when its lead editorial criticized the leading Democratic presidential candidates for saying that they would renegotiate NAFTA. The editorial told readers that not only had NAFTA been good for the U.S., it had been great for Mexico:
"Mexico's gross domestic product, now more than $875 billion, has more than quadrupled since 1987."
For those keeping score, the actual increase was 83 percent.
Today the Post is again touting the praises of its beautiful baby. Its lead editorial noted the decline in illegal immigration from Mexico to the United States. It told readers:
"Migration plummeted after 2005 because of reduced U.S. demand for labor and the slowing of Mexican population growth — but also because NAFTA started to pay off in the form of dynamic new export industries in Mexico such as automobile manufacturing. Analysts suggest the gap in wages between the United States and its southern neighbor, while still wide, has narrowed to the point where staying home is economically rational for a growing number of Mexican workers.
NAFTA encouraged both the United States and Mexico to make optimal use of their scarce resources. In the short run, this shifted jobs and income within each society and between them. This inherently disruptive process doubtless caused Mexicans who lost out to seek opportunity in the United States.
But over time, NAFTA helped make Mexico more efficient and, hence, wealthier. It formed part of a broader restructuring that has transformed Mexico from the underdeveloped, authoritarian country it was 30 years ago to the increasingly middle-class democracy it is now.
The gross domestic product per capita in Mexico was $12,400 in 2010, up about 21 percent in real terms since 1980."
Wow, that really sounds great. Now let's take a quick look at what the IMF has to say about Mexico's situation. The graph below shows per capita income growth in Mexico from 1980 to 2011, compared with Argentina, Brazil, Chile, and the United States.

alt
Mexico's 23.5 percent per capita growth over this period puts it dead last among this group. Its growth is almost one-thrid less than Brazil's 32.9 percent and less than half of Argentina's 52.7 percent.
Interestingly, its per capita growth is also just a bit more than one-third of the 66.3 percent growth in the U.S. over this period. That might raise questions about the extent to which the wage gap has closed over this period. Of course there has been a substantial upward redistribution of income in the United States over this period (partly due to trade deals like NAFTA), so some closing of the wage gap is plausible. On the other hand, Mexico stands out among Latin American countries in having substantial upward redistribution itself in the last decade, so it's not clear that ordinary workers received much benefit from even the country's limited growth.
Of course many factors affect Mexico's growth and it may not be fair to attribute much of its economic troubles to NAFTA. However no one can look at the data and seriously tout Mexico's strong growth and transformation. It clearly is a laggard, no matter how vigorously the Post might argue otherwise.

Welcome to ALEC Exposed!

On July 13, 2011, the Center for Media and Democracy unveiled this trove of over 800 "model" bills and resolutions secretly voted on by corporations and politicians through the American Legislative Exchange Council (ALEC). These bills reveal the corporate collaboration reshaping our democracy, state by state.
ALEC bills, which largely benefit the organization’s corporate members, have been introduced in legislatures in every state—but without disclosing to the public that corporations previously drafted or voted on them through ALEC.
Before our publication of this trove of bills, it has been difficult to trace the numerous controversial and extreme provisions popping up in legislatures across the country directly to ALEC and its corporate underwriters. 

 
The Center obtained copies of the bills after one of the thousands of people with access shared them, and a whistleblower provided a copy to the Center.
We have analyzed and marked up the bills and resolutions to help readers understand what the bills do, beyond the PR in the names of bills. We share them to help the public identify the legislation in their state and the wide extent of the agenda to rewrite our rights by the corporations that bankroll ALEC.
These bills and resolutions reach into almost every area of American life: worker and consumer rights, education, the rights of Americans injured or killed by corporations, taxes, health care, immigration, and the quality of the air we breathe and the water we drink. Only by seeing the depth and breadth and language of the bills can one fully understand the power and sweep of corporate influence behind the scenes on bills affecting the rights and future of every American in every single state.
Please join us in helping to expose ALEC, its corporations and politicians, and how money has corrupted the democratic process. You can read the bills without signing up to be a contributing editor of this site. But, we hope readers will team up with reporters to dig through the cache of documents and share the truth with others. (Here's how.) 



To learn more about ALEC and this project, click here for an open letter from Lisa Graves, the executive director of the Center for Media and Democracy, publisher of ALEC Exposed.


What is ALEC?

ALEC is not a lobby; it is not a front group. It is much more powerful than that. Through ALEC, behind closed doors, corporations hand state legislators the changes to the law they desire that directly benefit their bottom line. Along with legislators, corporations have membership in ALEC. Corporations sit on all nine ALEC task forces and vote with legislators to approve “model” bills. They have their own corporate governing board which meets jointly with the legislative board. (ALEC says that corporations do not vote on the board.) Corporations fund almost all of ALEC's operations. Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a “unique,” “unparalleled” and “unmatched” organization. We agree. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door.


Who funds ALEC?

More than 98% of ALEC's revenues come from sources other than legislative dues, such as corporations, corporate trade groups, and corporate foundations. Each corporate member pays an annual fee of between $7,000 and $25,000 a year, and if a corporation participates in any of the nine task forces, additional fees apply, from $2,500 to $10,000 each year. ALEC also receives direct grants from corporations, such as $1.4 million from ExxonMobil from 1998-2009. It has also received grants from some of the biggest foundations funded by corporate CEOs in the country, such as: the Koch family Charles G. Koch Foundation, the Koch-managed Claude R. Lambe Foundation, the Scaife family Allegheny Foundation, the Coors family Castle Rock Foundation, to name a few. Less than 2% of ALEC’s funding comes from “Membership Dues” of $50 per year paid by state legislators, a steeply discounted price that may run afoul of state gift bans. For more, see CMD's special report on ALEC funding and spending here.

Through ALEC, Global Corporations Are Scheming to Rewrite YOUR Rights and Boost THEIR Revenue

Business  money
Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights. These so-called "model bills" reach into almost every area of American life and often directly benefit huge corporations. In ALEC's own words, corporations have "a VOICE and a VOTE" on specific changes to the law that are then proposed in your state. DO YOU?


 

Saturday, July 21, 2012

The Sharp, Sudden Decline of America's Middle Class

They had good, stable jobs - until the recession hit. Now they're living out of their cars in parking lots.

June 25, 2012 11:45 AM ET
Every night around nine, Janis Adkins falls asleep in the back of her Toyota Sienna van in a church parking lot at the edge of Santa Barbara, California. On the van's roof is a black Yakima SpaceBooster, full of previous-life belongings like a snorkel and fins and camping gear. Adkins, who is 56 years old, parks the van at the lot's remotest corner, aligning its side with a row of dense, shading avocado trees. The trees provide privacy, but they are also useful because she can pick their fallen fruit, and she doesn't always­ have enough to eat. Despite a continuous, two-year job search, she remains without dependable work. She says she doesn't need to eat much – if she gets a decent hot meal in the morning, she can get by for the rest of the day on a piece of fruit or bulk-purchased almonds – but food stamps supply only a fraction of her nutritional needs, so foraging opportunities are welcome.
Prior to the Great Recession, Adkins owned and ran a successful plant nursery in Moab, Utah. At its peak, it was grossing $300,000 a year. She had never before been unemployed – she'd worked for 40 years, through three major recessions. During her first year of unemployment, in 2010, she wrote three or four cover letters a day, five days a week. Now, to keep her mind occupied when she's not looking for work or doing odd jobs, she volunteers at an animal shelter called the Santa Barbara­ Wildlife Care Network. ("I always ask for the most physically hard jobs just to get out my frustration," she says.) She has permission to pick fruit directly from the branches of the shelter's orange and avocado trees. Another benefit is that when she scrambles eggs to hand-feed wounded seabirds, she can surreptitiously make a dish for herself.
By the time Adkins goes to bed – early, because she has to get up soon after sunrise, before parishioners or church employees arrive – the four other people who overnight in the lot have usually settled in: a single mother who lives in a van with her two teenage children and keeps assiduously to herself, and a wrathful, mentally unstable woman in an old Mercedes sedan whom Adkins avoids. By mutual unspoken agreement, the three women park in the same spots every night, keeping a minimum distance from each other. When you live in your car in a parking lot, you value any reliable area of enclosing stillness. "You get very territorial," Adkins says.
Each evening, 150 people in 113 vehicles spend the night in 23 parking lots in Santa Barbara. The lots are part of Safe Parking, a program that offers overnight permits to people living in their vehicles. The nonprofit that runs the program, New Beginnings Counseling Center, requires participants to have a valid driver's license and current registration and insurance. The number of vehicles per lot ranges from one to 15, and lot hours are generally from 7 p.m. to 7 a.m. Fraternization among those who sleep in the lots is implicitly discouraged – the fainter the program's presence, the less likely it will provoke complaints from neighboring homes and churches and businesses.
The Safe Parking program is not the product of a benevolent government. Santa Barbara's mild climate and sheltered beachfront have long attracted the homeless, and the city has sometimes responded with punitive measures. (An appeals court compared one city ordinance forbidding overnight RV parking to anti-Okie laws in the 1930s.) To aid Santa Barbara's large homeless population, local activists launched the Safe Parking program in 2003. But since the Great Recession began, the number of lots and participants in the program has doubled. By 2009, formerly middle-class people like Janis Adkins had begun turning up – teachers and computer repairmen and yoga instructors seeking refuge in the city's parking­ lots. Safe-parking programs in other cities have experienced a similar influx of middle-class exiles, and their numbers are not expected to decrease anytime soon. It can take years for unemployed workers from the middle class to burn through their resources – savings, credit, salable belongings, home equity, loans from family and friends. Some 5.4 million Americans have been without work for at least six months, and an estimated 750,000 of them are completely broke or heading inexorably toward destitution. In California, where unemployment remains at 11 percent, middle-class refugees like Janis Adkins are only the earliest arrivals. "She's the tip of the iceberg," says Nancy Kapp, the coordinator of the Safe Parking program. "There are many people out there who haven't hit bottom yet, but they're on their way – they're on their way."
Kapp, who was herself homeless for a time many years ago, is blunt, indefatig­able, raptly empathetic. She works out of a minuscule office in the Salvation Army building in downtown Santa Barbara. On the wall is a map encompassing the program's parking lots – a vivid graphic of the fall of the middle class. Kapp expects more disoriented, newly impoverished families to request spots in the Safe Parking program this year, and next year, and the year after that.
"When you come to me, you've hit rock bottom," Kapp says. "You've already done everything you possibly could to avoid being homeless. You maybe have a teeny bit of savings left. People are crying, they're saying, 'I've never experienced this before. I've never been homeless.' They don't want to mix with homeless people. They're like, 'I'm not going over to those people' – sometimes they call them 'those people.' So now they're lost, they're humiliated, they're rejected, they're scared, and they're very ashamed. I'm worried about the psychological damage it does when you have a place and then, all of a sudden, you're in your car. You have to be depressed just from the fall itself, from losing everything and not understanding how it could happen."
One evening last spring, I visit Janis Adkins in her parking lot at the Goleta Community Covenant Church. When I turn into the driveway, the sun has fallen to the horizon. The other residents haven't arrived yet, and Adkins' van, at the far corner of the lot, seems almost metaphysically solitary, drawn to the parcel of greenery at the asphalt's edge.
Because the night is chilly and the van shell seems to draw the cold inward, Adkins has already tucked herself in, reclining against pillows and a rolled sleeping bag at the back corner of the van, beneath blankets and layers of piled-up fleece clothing. For privacy, Adkins has put silver sunshades in the front windshield; a row of clean shirts and blouses suspended on hangers obscures the lot-facing side window. By the light of a little LED bulb in a camping headlamp, she is reading a novel called The Invisible Ones, whose main characters are gypsies.
Adkins has tousled blond-gray hair and the kind of deep, unaffected tan that comes from working outdoors. She grew up in a middle-class family in Santa Barbara, but eventually took off to become a river guide in Utah. Adkins engages you frankly, her manner almost practiced in its evenness: few gesticulations, steady intonation. Across the ceiling of the van she has affixed a silken red-and-gold banner that spells out a Buddhist chant of compassion. She practices yoga and meditation and believes in the Buddhist concept of equanimity; she takes comfort in the parable of the Zen ox herder, who tries and fails, day after day, to break a raging ox. When a friend calls to ask how she's doing, she often says, "Still riding the ox."
But the rigors of homelessness – the sudden loss of the signifiers of her selfhood – regularly breach the protection of detachment; the trick for her is regaining it quickly. "When negative thoughts come, it's important to be able to say, 'It's just a thought,'" she tells me. "'Just let it go.' When I get really down, I try to look at a worse-case scenario, like the pictures of the Haiti earthquake. I go, 'What could I do to help?' Things like that drive me forward." She also reminds herself to be grateful: to Starbucks for free cups of hot water, to the YMCA for her discounted membership, to the Safe Parking program. Gratitude snuffs out self-pity.
Before the financial crash decimated the value of her home and her customer base, Adkins had been contemplating selling her nursery, High Desert Gardens, and going to work for a humanitarian or environmental organization. But the suddenness and violence of the recession took her by surprise. The nursery specialized in drought-tolerant plants and offered more than 100 species of trees. Over the years, she had developed a deep base of horticultural knowledge, and people came from long distances to seek her advice. Business was good enough that she could leave her employees in charge of the nursery and travel for a month or so every summer to escape the harsh Moab heat.
Within two years of the crash, sales had dropped by 50 percent and the value of her land had fallen by more than that. Four banks refused to help her refinance. "Everyone was talking about bailouts," she recalls. "I said, 'I'm not asking for a bailout, I'm asking you to work with me.' They look at you, no expression on their faces, saying, 'There's nothing we can do.'" She had to shut the nursery down and sell everything she could to avoid foreclosure: "I was practically giving stuff away just to try to make some money. Started selling everything that wasn't permanent. I was going to sell the doors, the windows, the gates if I could, but they told me I couldn't." She decided not to file for bankruptcy: It would have cost her thousands of dollars and require her to give up her van, which she was determined to keep. When she had nothing left to sell to make her mortgage payments, she was forced to put her home on the market, clearing only $4,000 on the sale.
"I was spinning out of control," she says. "I was starting to lose my wits. It's very surreal being at a level of depression where it's easier to think about suicide and dying than it is to bend over and pick something up you're stepping over. It was getting bad enough that my friends started looking at me, going, 'You better get out of here.' The only functional thing I could figure out was to just go. I thought I would go travel and figure out what I wanted to do next. So some friends packed up my house and we converted my van so I could have as much stuff in there as possible, and I just left."
However long it takes to lose everything, to get to the point where you're driving away from your repossessed home, the final unraveling seems eye-blink fast, because there is no way to imagine it. Even if you've been unemployed for a year and are months-delinquent on your mortgage, you still won't have a mental category for your own homelessness; it's impossible to project yourself into the scenario. The reality, when it occurs and endures, seems to have sprung from nowhere.
Without reflection, Adkins drove to a wildlife refuge she knew about in Arizona. She thought perhaps she could get a volunteer job there, something to keep her busy, but she soon realized that the plan would leave her with no way to make ends meet. "I went to a place by this lake and I just stayed there for 10 days and cried and slept. I was so bad." Eventually she headed to Santa Barbara. She hoped that old connections might help her find work, but it wasn't long before she began running out of money.
Sitting in her van, we chat a bit about High Desert Gardens and the gypsy book and her volunteer work at the wildlife shelter. Eventually I ask how she gets by. She says that a cousin in town gives her food and cash when she can, and a woman at the church arranges informal gardening work for her. Various people she knows give her their recycling so she can redeem the cans and bottles, and she borrows money from friends and acquaintances, like the manager of the wildlife shelter. Having maxed out her borrowing capacity, though, she is increasingly unable to pay what she owes to places like the YMCA, where she goes to shower. She wouldn't be adverse to dumpster­diving – "I hear there's good food" – but she's not strong enough to climb the sides.
"I actually tried panhandling a couple months ago," she says. "I was so broke. I had, like, a dollar. And I didn't know what else to do, so I went to the library and Googled 'effective panhandling.'"
"Really?" I ask.
"I wouldn't make that up," she says, laughing. "There were a lot of different strategies. One site said do not dress up, dress down. Look sad. Don't be negative in your signs. Say thank you constantly. Be humble for real, don't be phony-humble."

Meet your meat

From the meat industry's rampant abuse of animals and environmental devastation to the tremendous health benefits of a vegan diet to helping end world hunger and deplorable working conditions in slaughterhouses, there are countless reasons why more and more people are leaving meat off their plates for good and embracing a healthy and humane vegan diet.

Caution ! Viewer discretion advise ( I can,t view all the video is shoking myself ) 


  

Cruelty to Animals

Farmed animals are every bit as intelligent and capable of feeling pain as the dogs and cats we cherish as our companions. They are inquisitive, interesting individuals who value their lives, solve problems, experience fear and pain, and are capable of using tools.
Yet the more than 16 billion animals who are killed for food every year in the U.S. have little legal protection from cruelty that would be illegal if it were inflicted on companion dogs or cats. They are neglected, mutilated, genetically manipulated, put on drug regimens that cause chronic pain and crippling, transported through all weather extremes, and killed in gruesome and violent ways.
Even so-called "free-range" animals are often mutilated without the benefit of painkillers; kept in filthy, disease-ridden sheds; forced to endure long trips to the slaughterhouse without food or water; and killed in the same ways as animals from factory farms. Going vegan is the best way to stop these atrocities.

Your Health

Giving meat the boot is also the best way to ensure a lifetime of good health. Vegan foods provide us with all the nutrients that we need, minus the saturated fat, cholesterol, and contaminants that are found in meat, eggs, and dairy products. Plant-based diets help protect us from heart disease, diabetes, obesity, strokes, and several types of cancer. Vegans also tend to have stronger immune systems and, on average, live 10 years longer than meat-eaters do.

The Environment

Going vegan helps keep the Earth healthy too. America's meat addiction is poisoning and depleting our drinking water, arable land, and clean air. More than half the water used in the U.S. goes to animal agriculture, and since farmed animals produce 130 times more excrement than the human population does, the runoff from their waste greatly pollutes our waterways.

World Hunger

Not only does raising animals for food gobble up precious resources and produce tons of waste, it also steals food from hungry people. Raising animals for food is extremely inefficient. For every pound of food that they eat, only a fraction of the calories are returned in the form of edible flesh. If we stopped intensively breeding farmed animals and grew crops to feed humans instead, we could easily feed every human on the planet with healthy and affordable vegetarian foods.

Worker Rights

Animals aren't the only ones who are abused by the meat industry. Human Rights Watch has said that slaughterhouse workers have "the most dangerous factory job in America." The industry has refused to do what's necessary to create safe working conditions for its employees, such as slowing down slaughter lines and supplying workers with appropriate safety gear, because these changes could cut into companies' bottom lines. Many workers endure crippling injuries and many have even lost their limbs—or their lives—from working with dangerous meat-processing machines. Refusing to buy or eat meat ensures that you aren't contributing to this exploitative industry.

Factory Farms: Poisoning Communities

People who live near factory farms suffer too. Factory farms pollute the air and water for many miles in every direction, often spreading contamination and illness to the people who live and work nearby. Chronic sickness, brain damage, poisoned waterways, elevated cancer rates, and even death plague these communities, while the government does nothing to protect citizens or regulate the industry. It's up to us to help stop these farms from poisoning small-town America by refusing to buy their products.

Government Negligence

Between 2000 and 2005, agribusinesses funneled more than $140 million to politicians, who helped to ensure that laws that might protect consumers, animals, and the environment did not pass. The federal government does little to protect human health, animal welfare, and our environment from the factory-farming industry's negligence and excess, but each of us can make a major difference by going vegan and encouraging our friends and family to do the same.
Take PETA's Pledge to Be Vegan for 30 Days, and we'll send you tips and recipes to help you get started on a healthier, more compassionate way of life.
Browse hundreds of vegan recipes.

This Global Financial Fraud and Its Gatekeepers

The media's 'bad apple' thesis no longer works. We're seeing systemic corruption in banking – and systemic collusion

Last fall, I argued that the violent reaction to Occupy and other protests around the world had to do with the 1%ers' fear of the rank and file exposing massive fraud if they ever managed get their hands on the books. At that time, I had no evidence of this motivation beyond the fact that financial system reform and increased transparency were at the top of many protesters' list of demands.
Day of Action against Bank of America. New York City, May 8, 2012. (photo: Sunset Parkerpix)
But this week presents a sick-making trove of new data that abundantly fills in this hypothesis and confirms this picture. The notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers, but this week's headlines make such a conclusion, sadly, inevitable.


The New York Times business section on 12 July shows multiple exposes of systemic fraud throughout banks: banks colluding with other banks in manipulation of interest rates, regulators aware of systemic fraud, and key government officials (at least one banker who became the most key government official) aware of it and colluding as well. Fraud in banks has been understood conventionally and, I would say, messaged as a glitch. As in London Mayor Boris Johnson's full-throated defense of Barclay's leadership last week, bank fraud is portrayed as a case, when it surfaces, of a few "bad apples" gone astray.

In the New York Times business section, we read that the HSBC banking group is being fined up to $1bn, for not preventing money-laundering (a highly profitable activity not to prevent) between 2004 and 2010 – a six years' long "oops". In another article that day, Republican Senator Charles Grassley says of the financial group Peregrine capital: "This is a company that is on top of things." The article goes onto explain that at Peregrine Financial, "regulators discovered about $215m in customer money was missing." Its founder now faces criminal charges. Later, the article mentions that this revelation comes a few months after MF Global "lost" more than $1bn in clients' money.

bofa_May8_DSC_0447
What is weird is how these reports so consistently describe the activity that led to all this vanishing cash as simple bumbling: "regulators missed the red flag for years." They note that a Peregrine client alerted the firm's primary regulator in 2004 and another raised issues with the regulator five years later – yet "signs of trouble seemingly missed for years", muses the Times headline.
A page later, "Wells Fargo will Settle Mortgage Bias Charges" as that bank agrees to pay $175m in fines resulting from its having – again, very lucratively – charged African-American and Hispanic mortgagees costlier rates on their subprime mortgages than their counterparts who were white and had the same credit scores. Remember, this was a time when "Wall Street firms developed a huge demand for subprime loans that they purchased and bundled into securities for investors, creating financial incentives for lenders to make such loans." So, Wells Fargo was profiting from overcharging minority clients and profiting from products based on the higher-than-average bad loan rate expected. The piece discreetly ends mentioning that a Bank of America lawsuit of $335m and a Sun Trust mortgage settlement of $21m for having engaged is similar kinds of discrimination.
Are all these examples of oversight failure and banking fraud just big ol' mistakes? Are the regulators simply distracted?
The top headline of the day's news sums up why it is not that simple: "Geithner Tried to Curb Bank's Rate Rigging in 2008". The story reports that when Timothy Geithner, at the time he ran the Federal Reserve Bank of New York, learned of "problems" with how interest rates were fixed in London, the financial center at the heart of the Libor Barclays scandal. He let "top British authorities" know of the issues and wrote an email to his counterparts suggesting reforms. Were his actions ethical, or prudent? A possible interpretation of Geithner's action is that he was "covering his ass", without serious expectation of effecting reform of what he knew to be systemic abuse.
And what, in fact, happened? Barclays kept reporting false rates, seeking to boost its profit. Last month, the bank agreed to pay $450m to US and UK authorities for manipulating the Libor and other key benchmarks, upon which great swaths of the economy depended. This manipulation is alleged in numerous lawsuits to have defrauded thousands of bank clients. So Geithner's "warnings came too late, and his efforts did not stop the illegal activity".
And then what happened? Did Geithner, presumably frustrated that his warnings had gone unheeded, call a press conference? No. He stayed silent, as a practice that now looks as if several major banks also perpetrated, continued.
And then what happened? Tim Geithner became Treasury Secretary. At which point, he still did nothing.
It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – "the willingness to not rock the boat" – is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club.
Whatever motivated Geithner's silence, or that of the "government official" in the emails to Barclays, this much is obvious: the mainstream media need to drop their narratives of "Gosh, another oversight". The financial sector's corruption must be recognized as systemic.
Meanwhile, Britain is sleepwalking in a march toward total email surveillance, even as the US brings forward new proposals to punish whistleblowers by extending the Espionage Act. In an electronic world, evidence of these crimes lasts forever – if people get their hands on the books. In the Libor case, notably, a major crime has not been greeted by much demand at the top for criminal prosecutions. That asymmetry is one of the insurance policies of power. Another is to crack down on citizens' protest.

Friday, July 20, 2012

More Reasons to Go Vegan


When you add up the damage that the meat industry does to workers, the environment, and animals, the question isn't really "Why should I go vegan?"—it's "Why wouldn't I go vegan?" In case you need any other reasons, here are five more.

Because It's the Only Way to End World Hunger

There is more than enough food in the world to feed the entire human population. So why are more than a billion people still going hungry? Our meat-based diet is largely to blame. We funnel huge amounts of grain, soybeans, and corn through all the animals we use for food instead of feeding starving humans. If we stopped intensively breeding farmed animals and grew crops to feed humans instead, we could easily feed everyone on the planet with healthy and affordable vegetarian foods.

Raising animals for food is extremely inefficient. For every pound of food that farmed animals are fed, only a fraction of the calories are returned in the form of edible flesh. The rest of those calories are burned away raising the animal to slaughter weight or contributing to feathers, bone, skin, blood, and other parts of the animal that are not eaten by humans. This is why animals raised for food have to eat as many as 16 pounds of grain to create just 1 pound of edible flesh. The prestigious Worldwatch Institute states, "[M]eat consumption is an inefficient use of grain—the grain is used more efficiently when consumed directly by humans. Continued growth in meat output is dependent on feeding grain to animals, creating competition for grain between affluent meat-eaters and the world's poor."
As a meat-based diet spreads to developing countries, farmers who are trying to feed themselves are being driven off their land. Their efficient, plant-based agricultural model is being replaced with intensive livestock rearing, which also pollutes the air and water and renders the once-fertile land dead and barren. If this trend continues, the developing world will never be able to produce enough food to feed itself, and hunger will continue to plague hundreds of millions of people around the globe. Author George Monbiot, writing in the U.K.'s The Guardian, explains that there's only one solution: "It now seems plain that [a vegan diet] is the only ethical response to what is arguably the world's most urgent social justice issue."

Because the Meat Industry Makes a Killing by Exploiting Workers

The money-hungry farmed-animal industry exploits poor people, immigrants, and children. They work for paltry wages and are often unfairly penalized when they try to form unions. The work is filthy and extremely dangerous, injuries are rampant, and dying on the job is a very real possibility.
Killing animals is inherently dangerous work, but the fast pace, filthy killing floors, and lack of training make working at a slaughterhouse "the most dangerous factory job in America," according to Human Rights Watch.

According to figures from the U.S. Department of Labor's Bureau of Labor Statistics, nearly one in three slaughterhouse workers suffers from illness or injury every year, compared to one in 10 workers in other manufacturing jobs. The rate of repetitive stress injury for slaughterhouse employees is 35 times higher than it is for those in other manufacturing jobs.
The industry refuses to create safer working conditions by slowing down the lines or buying appropriate safety gear because these changes could cut into companies' bottom lines. Employees who are injured at work are often fired if they take time off or try to file health insurance or worker's compensation claims. Human Rights Watch cites one slaughterhouse worker who reports, "They love you if you're healthy and you work like a dog, but if you get hurt, you are trash. If you get hurt, watch out. They will look for a way to get rid of you before they report it. They will find a reason to fire you or put you on a worse job like the cold room, or change your shift so you quit. So a lot of people don't report their injuries. They just work with the pain."
Factory farms and slaughterhouses set up shop in the poorest regions of the U.S., where they can use poor and uneducated people to do their dirty work for low wages. The farmed-animal industry often lures immigrants far away from their homes with false promises of good jobs, knowing that these undocumented workers will likely not report unsafe conditions for fear of being deported. One meat company even bused workers from the Mexican border to a homeless shelter in Minnesota!
The farmed-animal industry has also been condemned for exploiting children. Kids in their early teens have even died while working in animal-processing plants, and Multinational Monitor called Tyson Foods one of the world's "Ten Worst Corporations" because it hires people in the U.S. who are too young to work legally.

Sunday, July 15, 2012

Collapse by Michael Ruppert

 A shocking documentary!



Michael C. Ruppert (born Feb. 3 1951) is an American author, a former Los Angeles Police Department officer, and investigative journalist and peak oil theorist.
Until 2006, he published and edited From The Wilderness, a newsletter and website covering a range of topics including (international) politics, the C.I.A., peak oil, civil liberties, drugs, economics, corruption and 9/11 alternative theories. He is also the author of Crossing The Rubicon: The Decline of the American Empire at the End of the Age of Oil and was the subject of the 2009 documentary film Collapse.
Currently, he is president of Collapse Network, Inc, and hosts The Lifeboat Hour on Progressive Radio Network.

Activism

On November 15, 1996, then Director of Central Intelligence John Deutch visited Los Angeles' Locke High School for a town hall meeting. At the meeting, Ruppert publicly confronted Deutch, saying that in his experience as an LAPD narcotics officer he had seen evidence of CIA complicity in drug dealing.
Ruppert went on to become an investigator and journalist, and established the publication From The Wilderness, a watchdog publication that exposed governmental corruption, including his experience with CIA drug dealing activities.
Ruppert is the author of Crossing The Rubicon: The Decline of the American Empire at the End of the Age of Oil, published in September 2004. Crossing The Rubicon claims that Vice President Dick Cheney, the US government, and Wall Street had a well-developed awareness of and colluded with the perpetrators of 9/11.
Ruppert appears in the documentary films The 911 Report You Never Saw - The Great Conspiracy, Peak Oil - Imposed by Nature  Zeitgeist: Moving Forward, The End of Suburbia, American Drug War: The Last White Hope and Collapse.

From The Wilderness

From The Wilderness was a newsletter published from 1998 to 2006 by the media company From The Wilderness Publications. The newsletter covered political and governmental issues. It was published eleven times per year but featured weekly updates online. Critics such as David Corn and Norman Solomon argued that Ruppert on occasion veered off into making unsubstantiated conspiracy theory claims.
In the summer of 2006, claiming government harassment and fearing for his life, Ruppert left the United States for Venezuela, vowing not to return.
The Ashland Daily Tidings would later report that, in June 2006, Ruppert had accused a former female employee of burglarizing the offices of From The Wilderness, a case in which Ruppert himself was considered a potential suspect. Around the same time, the former female employee accused him in turn of sexual harassment. Ruppert would later in 2009 be ordered to pay a $125,000 fine by the Oregon labor board in the case. The female employee claimed Ruppert fired her after she refused his sexual advances, Ruppert denies this and claims he fired her for "disruptive behavior, poor work performance and wearing inappropriate clothing". The former employee further claims Ruppert approached her in her office "wearing only his underwear and a smile", something Ruppert doesn't deny.
The end of From The Wilderness was announced in a post at the website on November 7, 2006. Reasons for the closure were detailed in the article. Ruppert claimed his bad health, glitches that disabled their web store, "problems of human origin" and his departure to Venezuela had led to the demise of From The Wilderness.
Later that year, Ruppert flew to Toronto, Canada, for medical treatment. The following statement was posted on the From The Wilderness website on November 26, 2006:
"Personally, I am through forever with investigative journalism and public lecturing. I am leaving public life. It is my hope that by continuing to repeat this sincere position that many of the inexplicable difficulties which have dominated my life over the past months will ease. It is time to move on. I spent twenty-seven years as a dedicated public activist and that is something which I am no longer able or inclined to do. The price was ultimately too great."
After shutting down, From the Wilderness was sued by their landlord for back rent owed on their Ashland office space.

Further activities

Some of his posting from him on the From the Wilderness website said Ruppert was back in New York, receiving treatment from "sympathetic physicians" for a variety of ailments.
Ruppert still occasionally contributes to the Collapse Network news desk run by former From the Wilderness associate and longtime friend, Jenna Orkin.
As recently as 2010, Ruppert lived in Los Angeles, California and launched Collapse Network to build sustainable communities across the world. But in 2011 he announced on his Lifeboat Hour radio show that he was relocating to Sonoma County, California, because he thought that it would be a safer location in the event of societal collapse.

2012 World Hunger and Poverty Facts and Statistics


                                                                 image by (c) puertoboricua 2009


Hunger is a term which has three meanings (Oxford English Dictionary 1971)
  • the uneasy or painful sensation caused by want of food; craving appetite. Also the exhausted condition caused by want of food
  • the want or scarcity of food in a country
  • a strong desire or craving
World hunger refers to the second definition, aggregated to the world level. The related technical term (in this case operationalized in medicine)  is malnutrition.1 
Malnutrition is a general term that indicates a lack of some or all nutritional elements necessary for human health (Medline Plus Medical Encyclopedia).
There are two basic types of malnutrition. The first and most important is protein-energy malnutrition--the lack of enough protein (from meat and other sources) and food that provides energy (measured in calories) which all of the basic food groups provide. This is the type of malnutrition that is referred to when world hunger is discussed.  The second type of malnutrition, also very important, is micronutrient (vitamin and mineral) deficiency. This is not the type of malnutrition that is referred to when world hunger is discussed, though it is certainly very important.



Recently there has also been a move to include obesity as a third form of malnutrition. Considering obesity as malnutrition expands the previous usual meaning of the term which referred to poor nutrition due to lack of food inputs.2 It is poor nutrition, but it is certainly not typically due to a lack of calories, but rather too many (although poor food choices, often due to poverty, are part of the problem). Obesity will not be considered here, although obesity is certainly a health problem and is increasingly considered as a type of malnutrition.]
Protein-energy malnutrition (PEM) is the most lethal form of malnutrition/hunger. It is basically a lack of calories and protein. Food is converted into energy by humans, and the energy contained in food is measured by calories.  Protein is necessary for key body functions including provision of essential amino acids and  development and maintenance of muscles.
(image by (c)puertoboricua2009)


No one really knows how many people are malnourished. The statistic most frequently cited is that of the United Nations Food and Agriculture Organization, which measures 'undernutrition'.  The FAO did not publish an estimate in its most recent publication, 'The State of Food Insecurity in the World 2011' as it is undertaking a major revision of  how it estimates food insecurity (FAO 2011 p. 10).  The 2010 estimate, the most recent, says that 925 million people were undernourished in 2010 (FAO 2010). As the figure below shows, the number of hungry people has increased since 1995-97. The increase has been due to three factors: 1) neglect of agriculture relevant to very poor people by governments and international agencies; 2) the current worldwide economic crisis, and 3) the significant increase of food prices in the last several years which has been devastating to those with only a few dollars a day to spend. 925 million people is 13.6 percent of the estimated world population of 6.8 billion. Nearly all of the undernourished are in developing countries. 
Number of hungry people, 1969-2010

Source: FAO
In round numbers there are 7 billion people in the world. Thus, with an estimated 925 million hungry people in the world, 13.1 percent, or almost 1 in 7 people are hungry.
The FAO estimate is based on statistical aggregates. The FAO first estimates the total food supply of a country and derives the average per capita daily food intake from that. The distribution of average food intake for people in the country is then estimated from surveys measuring food expenditure. Using this information, and minimum food energy requirements, FAO estimates how many people are likely to receive such a low level of food intake that they are undernourished.3
Undernutrition is a relatively new concept, but is increasingly used.  It should be taken as similar to malnutrition.  (It should be said as an aside, that the idea of undernourishment, its relationship to malnutrition, and the reasons for its emergence as a concept is not clear to Hunger Notes.)
Children are the most visible victims of undernutrition.  Children who are poorly nourished suffer up to 160 days of illness each year. Poor nutrition plays a role in at least half of the 10.9 million child deaths each year--five million deaths.  Undernutrition magnifies the effect of every disease, including measles and malaria. The estimated proportions of deaths in which undernutrition is an underlying cause are roughly similar for diarrhea (61%), malaria (57%), pneumonia (52%), and measles (45%) (Black 2003, Bryce 2005). Malnutrition can also be caused by diseases, such as the diseases that cause diarrhea, by reducing the body's ability to convert food into usable nutrients.
According to the most recent estimate that Hunger Notes could find, malnutrition, as measured by stunting, affects 32.5 percent of children in developing countries--one of three (de Onis 2000). Geographically, more than 70 percent of malnourished children live in Asia, 26 percent in Africa and 4 percent in Latin America and the Caribbean. In many cases, their plight began even before birth with a malnourished mother. Under-nutrition among pregnant women in developing countries leads to 1 out of 6 infants born with low birth weight. This is not only a risk factor for neonatal deaths, but also causes learning disabilities, mental, retardation, poor health, blindness and premature death.

Ten Companies Profiting Most from War

10. United Technologies (NYSE: UTX)
> Arms sales 2010: $11.41 billion
> Total sales 2010: $54.33 billion
> Arms sales as pct. of total sales: 21%
> Total profit: $4.71 billion
> Total employment: 208,220
> Sector: Aircraft, Electronics, Engines
Hartford, Conn.-based United Technologies is a multicompany industrial conglomerate with subsidiaries that include elevator company Otis and refrigeration giant Carrier. The comp
any also manufactures components for use in military aircraft and vehicles. One of its subsidiaries, Pratt & Whitney, builds aircraft engines for dozens of different fighter jets. Among the jets equipped with Pratt & Whitney engines are the F-22 Raptor and the F-35 Joint Strike Fighter, the latter of which is being produced by the hundreds for nine different countries. United Technologies is also heavily involved in aircraft manufacturing. It owns Sikorsky, one of the largest helicopter manufacturers in the world. Sikorsky builds the popular UH-60 Black Hawk. Roughly one-fifth of United Technologies’ total revenue came from arms sales in 2010.

9. L-3 Communications (NYSE: LLL)
> Arms sales 2010: $13.07 billion
> Total sales 2010: $15.68 billion
> Arms sales as pct. of total sales: 83%
> Total profit: $0.96 billion
> Total employment: 63,000
> Sector: Electronics, Services
L-3 Communications is a top contractor in fields such as communications, intelligence and surveillance. According to the company, its customers include nearly every defense, intelligence and security agency in the U.S., as well as allied foreign governments and commercial customers. Among its many products, the company produces the L-3 SmartDeck, a fully integrated cockpit system, and the AVCATT mobile aviation training simulator, designed for the U.S. Army. Although the company’s arms sales have increased steadily for a number of years, their rate of increase slowed significantly between 2009 and 2010. The company’s rank among largest arms producers fell from 2007’s eighth to ninth in 2010.
8. Finmeccanica
> Arms sales 2010: $14.41 billion
> Total sales 2010: $24.76 billion
> Arms sales as pct. of total sales: 58%
> Total profit: $0.74 billion
> Total employment: 75,200
> Sector: Aircraft, Artillery, Electronics, Missiles, Military vehicles, Small arms/ammunition
Italian defense contractor Finmeccanica is the largest high-tech industrial group in Italy. Partially owned by the Italian government, the conglomerate has a large array of products in six areas: aeronautics, helicopters, defense systems and electronics, space, transportation and energy. The company has formed dozens of joint ventures in Europe and the rest of the world. Notable Finmeccanica enterprises include helicopter manufacturer Augusta Enterprises, missile manufacturer MBDA and EuroTorp, the world’s leading antisubmarine torpedo manufacturer. In 2007, Finmeccanica was the number nine weapons manufacturer in the world. In 2010, it moved to eighth, with a 46% increase in sales over that time.

7. EADS
> Arms sales 2010: $16.36 billion
> Total sales 2010: $60.60 billion
> Arms sales as pct. of total sales: 27%
> Total profit: $0.73 billion
> Total employment: 121,690
> Sector: Aircraft, Electronics, Missiles, Space
European company EADS, short for European Aeronautic Defence and Space Company N.V., is the second of three non-U.S. companies on this list. The corporation, which includes major subsidiaries such as Airbus, is a leader in aerospace and defense products. EADS has a 37% share in missile manufacturer MBDA, and is one of the companies responsible for the development of the Eurofighter Typhoon fighter jet. Only 27% of EADS’s sales are arms sales, which is the second-smallest share among the largest arms-producing companies. The company has a major presence in markets in the Middle East, North America, Europe and more.
6. Raytheon (NYSE: RTN)
> Arms sales 2010: $22.98 billion
> Total sales 2010: $25.18 billion
> Arms sales as pct. of total sales: 91%
> Total profit: $1.88 billion
> Total employment: 72,400
> Sector: Electronics, Missiles
Raytheon is a Cambridge, Mass.-based American defense contractor. It is the world’s largest manufacturer of guided missiles and produces such widely used weapons as the AIM-7 Sparrow missile, the AIM-9 Sidewinder missile and the BGM-109 Tomahawk. The company is also responsible for the Air Warfare Simulation program used by the U.S. Air Force. In 2010, the company had nearly $23 billion in arms sales, more than 90% of its total revenue for the year. These sales were up 17% from 2007.

5. General Dynamics (NYSE: GD)
> Arms sales 2010: $23.94 billion
> Total sales 2010: $32.47 billion
> Arms sales as pct. of total sales: 74%
> Total profit: $2.62 billion
> Total employment: 90,000
> Sector: Artillery, Electronics, Military vehicles, Small arms/ammunition, Ships
General Dynamics is an American defense company that deals in aerospace, combat systems,information systems and technology, and marine systems. Although the company has been around since 1952, it has enjoyed a resurgence beginning in the 1990s, thanks largely to a number of mergers. Since 1997 General Dynamics says it has acquired more than 50 companies. Over this same period, its revenue increased from $4 billion to more than $32 billion. It also added more than 60,000 employees to its workforce. Currently, 74% of the company’s sales are arms sales. General Dynamics owns Electric Boat and Bath Iron Works, two of the largest naval vessel builders in the world. General Dynamics is notable known for its Ohio-class ballistic missile submarine, the Seawolf-class submarine, the M1 Abrams tank and the Arleigh-Burke-class destroyer.
4. Northrop Grumman (NYSE: NOC)
> Arms sales 2010: $28.15 billion
> Total sales 2010: $34.76 billion
> Arms sales as pct. of total sales: 81%
> Total profit: $2.05 billion
> Total employment: 117,100
> Sector: Aircraft, Electronics, Missiles, Ships, Space
Northrop Grumman is the fourth-largest weapons contractor in the U.S. The company, which is based in Falls Church, Va., is one of the leaders in aerospace technology and the leading producer of naval vessels in the world. The company manufactures Nimitz-class carriers that are the current flagships of the U.S. Navy. And over the next few years it is also set to build the new, $9.7 billion Gerald R. Ford-class supercarriers. Northrop Grumman also develops radar systems for aircraft and ground defense, sensor systems for a variety of vehicles and several unmanned aircraft and drones. Weapons systems sales accounted for 81% of company revenue in 2010. Arms sales grew by approximately $3.5 billion between 2007 and 2010.

3. Boeing (NYSE: BA)
> Arms sales 2010: $31.36 billion
> Total sales 2010: $64.31 billion
> Arms sales as pct. of total sales: 49%
> Total profit: $3.31 billion
> Total employment: 160,500
> Sector: Aircraft, Electronics, Missiles, Space
As recently as 2007, Boeing was the largest arms producer in the world. By 2008, it had fallen behind Lockheed Martin and U.K.-based BAE Systems. The aerospace and defense company remains one of the largest in the world, however. Boeing is the second-largest aircraft producer in the world by deliveries, behind only Airbus. It is also the second-largest U.S. government contractor, procuring just under $19.5 billion in contracts in 2010. Major products produced by the company include the KC-767, an aerial refueling tanker, and the F-15 fighter jet. Boeing made less in arms sales in 2010 than it did in 2009, although arms sales made up a larger amount of total sales — two percentage points, to be exact — in 2010 compared to 2009. Even in 2010, however, only 49% of revenue came from arms sales, which is among the lowest rates among companies on this list.


2. BAE Systems
> Arms sales 2010: $32.88 billion
> Total sales 2010: $34.61 billion
> Arms sales as pct. of total sales: 95%
> Total profit: $1.67 billion
> Total employment: 98,200
> Sector: Aircraft, Artillery, Electronics, Missiles, Military vehicles, Small arms/ammunition, Ships
BAE Systems is an aerospace and defense contractor based in the UK. The company has a major U.S. subsidiary, BAE Systems, Inc., which by itself would be the seventh-largest weapons manufacturer in the world. The British company was formed in 1999 through the merger of Marconi Electronics (which was at the time a subsidiary of GE) and British Aerospace. BAE produces weapons systems in nearly every major military category, including aircraft, defense electronics, vehicles, naval vessels and small arms. Among the company’s notable contributions are the M2/M3 Bradley fighting vehicle, the F-35 Joint Strike Fighter, the Type 45 destroyer and the Astute-class nuclear submarine. In 2010, 95% of its revenue came from arms sales, $32.88 billion in all.

1. Lockheed Martin (NYSE: LMT)
> Arms sales 2010: $35.73 billion
> Total sales 2010: $45.80 billion
> Arms sales as pct. of total sales: 78%
> Total profit: $2.93 billion
> Total employment: 132,000
> Sector: Aircraft, Electronics, Missiles, Space
Lockheed Martin is the largest arms-producing and military services company in the world, with nearly $3 billion more in arms sales than second place BAE Systems. Although military sales make up the majority of its revenue, it is significantly less than many other major arms-producers, including BAE’s 95% share. In addition to being the world’s largest arms-seller, Lockheed is also the largest federal contractor in the U.S. by a large margin. In 2010, the company’s government contracts totaled nearly $36 billion. Lockheed produces a number of major products, including the Trident missile and the F-16 and F-22 fighter jets. Despite being the largest military service company on this list, Lockheed is only the fourth-largest company by overall sales among the companies featured on this list. In 2007, the Lockheed was the third-largest arms producer.

Profiting From Market Failure: How Today's Capitalists Bring Bad Things to Life

Capitalists are perpetuating, and making big bucks from, market failures that deliver crappy products and shoddy services.


Editor's Note: When harmful beliefs plague a population, you can bet that the 1% is benefiting. This article is part of a new AlterNet series, "Capitalism Unmasked," edited by Lynn Parramore and produced in partnership with author Douglas Smith and Econ4 to expose the myths and lies of unbridled capitalism and show the way to a better future.
The long-running General Electric slogan sums up what capitalist cheerleaders love to say about markets: "We bring good things to life."
But is it really true? In reality, some capitalists have figured out how to profit by actually bringing bad things to life.
Today, market forces organize, select and direct the production of goods and services in ways that would amaze and startle our ancestors. Consider the automobile: designed, engineered, provisioned, manufactured, marketed, sold and serviced by webs of hundreds of different organizations across the planet. Amazing. And a tribute to what’s possible through market successes.
But markets fail, too. All of the time. They are inherently unstable and inefficient. Cheerleaders of capitalism attribute failure only to government, to individuals and occasionally, to organizations – but never to markets. Yet except in the dream worlds of fact-free economists, markets are always out of balance and screwing up.

Consider Joe Wilson of Xerox, a Rochester, New York hometown boy who took the reins of the family office supplies business, learned about Chester Carlson’s invention of "dry writing," and then bet his company and capital for 14 straight years on the promise that xerography would dramatically improve communications. Fourteen years. This was not the "fast buck, no risk" capitalism of today’s swashbuckling pirates. It was difficult, nerve-wracking, persistent and risky.
Joe Wilson and Xerox reveal the persistence, focus and actual risk-taking demanded to convert market failures into market success. Such powerful forces, though, threaten incumbents. When better mousetraps emerge, some players lose. Xerox’s success pushed out carbon copies, and those who profited from them. Economist Joseph Schumpeter called this process “creative destruction.” Like water finding its own level, capital should flow to better mousetraps if capitalism is to fulfill its potential to expand "good things to life" for humanity.
Should. Not must. Just take a look at healthcare markets. Instead of taking Joe Wilson-style risks on innovation, too many captains of the heathcare industry and the capitalists who fund them choose to perpetuate market failures and enrich themselves in the process. They "just say no" to the risks inherent in searching for new life-saving drugs and treatments. Ditto to opportunities to dramatically expand access to those who currently cannot afford them. For these well-off incumbents, there is simply too much profit to be made by raising prices, manipulating intellectual property protections, bribing doctors, misleading the public, cutting costs, and choking distribution.

Photo Credit: Toban Black LIKE THIS ARTICLE ? Join our mailing list: Sign up to stay up to date on the latest Visions headlines via email. Originally published at Truthout. The recent Public Banking conference held in Philadelphia offered a message that is at once so simple - but also so bold - it is hard for most Americans to pause long enough to understand how profoundly their thinking had been corralled by the masters of finance - in ways far, far, far more insidious and powerful than even the latest financial crisis suggests. To understand what has happened, however, you first have to take a minute to shake a few cobwebs out of your brain about "money" - and how it is created and by whom and for whose benefit.

Photo Credit: Toban Black
 
Originally published at Truthout.
The recent Public Banking conference held in Philadelphia offered a message that is at once so simple - but also so bold - it is hard for most Americans to pause long enough to understand how profoundly their thinking had been corralled by the masters of finance - in ways far, far, far more insidious and powerful than even the latest financial crisis suggests.
To understand what has happened, however, you first have to take a minute to shake a few cobwebs out of your brain about "money" - and how it is created and by whom and for whose benefit.

Money is "created"? Yes, obviously so - or did you imagine there is some fixed pile of "money" some place that exists once and for all and for all times?
Think about it: If that were true, it would be impossible for the economy ever to change and grow. If the "money supply" were not increased over time, the original economy of, say, 1776 - which served about 2.5 million Americans - would still define the amount of "money" we would have to work with today.
(And yes, going back further, if money were not increased - i.e. "created" - the amount that existed even in a far smaller economy prior to 1776 would be all there was and is, even down to today.)
* * *
Once you realize money must be and is regularly created and expanded, then the interesting questions begin to occur - like "How is it done?" and "Who benefits from it?"
Step One: Most people think of "money" as something real, something that is kind of like gold or silver or anything that has intrinsic value. Allowing for a very, very few minor exceptions, that is simply not what "money" is.
"Money" in the real world is a piece of paper (or electronic version of the same) that is a promissory note - a promise to pay you - that legally must be accepted by anyone to whom it is given to settle a debt. Behind this promise is the federal government in two very big ways: First, the government itself stands behind the promise as the party that will pay what it says it will pay on the piece of paper. Second, the government ensures that everyone must accept this promise if the piece of paper is handed over when you buy something or settle a debt.
So, money is a promise to pay? Yes and that is all it is - but that is huge, especially when backed and enforced by the government.
Once you fully grasp this simple truth, things get very, very interesting:
Some "authority" must have the power to issue or authorize the issuing of "promises to pay that must be accepted" - i.e. to "create" money. In the United States that "authority" is called the Federal Reserve ("the Fed").
And yes - because the economy does, in fact, get bigger over time - the Federal Reserve Board must have a way to create more money (more promises to pay) as time goes on. It does this all the time. In the modern era, it does it via computers issuing - literally out of thin air, via nothing more than accounting entries - promises to pay that are called "dollars."
The Federal Reserve uses these to buy up securities owned by banks - and then these newly created "dollars" are deposited in the banks' reserve account at the Fed.
Again, yes, created literally out of thin air. (Otherwise the money supply wouldn't expand and we would be back in 1776 ...)
* * *
Now things start to get very interesting indeed: Banks have the legal right to lend more than the amount of "dollars" they actually keep in their vaults or at the Fed (their reserves) - roughly ten times more these days. So, for instance and simplifying a bit, let's say that Bank A has $1,000 in deposits. So long as it keeps $100 on reserve, it can lend out $900 to the public.

 
But this is only the beginning and here's where the real action is and how the game is played: that $900 is now multiplied throughout the banking system. Note carefully the word "multiplied." Bank A loans the money to individuals, businesses and perhaps other banks. Then, these people deposit the money in another bank (or they spend it and someone else deposits it in another bank). Though in the real world, it would go to many banks, for simplicity assume for the moment it all goes to Bank B. Now, Bank B has $900 in "new" deposits and (keeping 10 percent in reserves as required) it can now lend out another $810. And if this is deposited in Bank C, in turn that bank can keep 10 percent and lend out $731 ($810-81). Ultimately, when the process is completed the initial $1,000 permits the creation of (again, yes, out of thin air) $10,000.