|Progressive Calendar 02.19.09||<– Date –> <– Thread –>|
|From: David Shove (shove001tc.umn.edu)|
|Date: Thu, 19 Feb 2009 15:50:15 -0800 (PST)|
P R O G R E S S I V E C A L E N D A R 02.19.09 1. Eagan peace vigil 2.19 4:30pm 2. Northtown vigil 2.19 5pm 3. RNC court watch 2.19 6pm 4. Police brutality 2.19 6:30pm 5. AntiWarMN 2.19 7pm 6. Amnesty Intl 2.19 7:15pm 7. Foreclosure 2.19 7:30pm 8. Lydia Howell 2.20 11am 9. Turning the Tide 2.20/21 6pm 10. Moyers/oligarchs 2.20 9pm 11. Peter Phillips - Obama Admin continues US military global dominance 12. Mike Whitney - The global ditch/Is eastern Europe primed to explode? 13. Miohael Hudson - Finance capitalism hits a wall/Oligarchs' escape plan 14. ed - Power strip (poem) --------1 of 14-------- From: Greg and Sue Skog <family4peace [at] msn.com> Subject: Eagan peace vigil 2.19 4:30pm CANDLELIGHT PEACE VIGIL EVERY THURSDAY from 4:30-5:30pm on the Northwest corner of Pilot Knob Road and Yankee Doodle Road in Eagan. We have signs and candles. Say "NO to war!" The weekly vigil is sponsored by: Friends south of the river speaking out against war. --------2 of 14-------- From: EKalamboki [at] aol.com Subject: Northtown vigil 2.19 5pm NORTHTOWN Peace Vigil every Thursday 5-6pm, at the intersection of Co. Hwy 10 and University Ave NE (SE corner across from Denny's), in Blaine. Communities situated near the Northtown Mall include: Blaine, Mounds View, New Brighton, Roseville, Shoreview, Arden Hills, Spring Lake Park, Fridley, and Coon Rapids. We'll have extra signs. For more information people can contact Evangelos Kalambokidis by phone or email: (763)574-9615, ekalamboki [at] aol.com. --------3 of 14------- From: Do'ii <syncopatingrhythmsabyss [at] gmail.com> Subject: RNC court watch 2.19 6pm RNC Court Watchers are in need of participants to help with organizing court information, documentation and etc. RNC Court Watchers Meetings are every Tuesday, 6 P.M. at Caffeto's. Below is announcement for our meetings. Preemptive raids, over 800 people arrested, police brutality on the streets and torture in Ramsey County Jail. Police have indiscriminately used rubber bullets, concussion grenades, tasers and chemical irritants to disperse crowds and incapacitate peaceful, nonviolent protesters. The RNC-8 and others are facing felonies and years in jail. We must fight this intimidation, harassment and abuse! Join the RNC Court Solidarity Meeting this coming Tuesday at Caffetto's to find out how you can make a difference in the lives of many innocent people. Caffetto's Coffeehouse and Gallery (612)872-0911 708 W 22nd Street, Minneapolis, MN 55405 Every Tuesday @ 6:00 P.M to 7:00 P.M participate and help organize RNC court solidarity. For more information, please contact: rnccourtwatch [at] gmail.com THE PEOPLE UNITED WILL NEVER BE DEFEATED! --------4 of 14-------- From: Michelle Gross <mgresist [at] visi.com> Subject: Police brutality 2.19 6:30pm COMMUNITY CONVERSATION ON ENDING POLICE BRUTALITY Thursday, February 19 6:30 p.m. Minneapolis Urban League 2100 Plymouth Ave, Minneapolis As a follow up to our rally last week, we are calling on the community to come together to explore ideas for ending police brutality. We have a few ideas to put forward but believe many in the community will have other ideas to share. The conversation is necessary and overdue. The goal is to come out of this meeting with concrete plans. -- RALLY CALLS FOR INVESTIGATION INTO POLICE-CAUSED DEATHS BY <http://www.mndaily.com/2009/02/10//users/khovis>Keith Hovis & <http://www.mndaily.com/2009/02/10//users/kweinmann>Karlee Weinmann PUBLISHED: 02/11/2009 http://www.mndaily.com/2009/02/10/rally-calls-investigation-police-caused-deaths#comment-7180 NOTE: Through this rally, we learned that the supposedly stolen car was, in fact, lent to Ahmed Guled by a friend and that Ahmed was on his way to visit his father, who had just returned from Somalia. Yet the mainstream media continues to promote the lie that Ahmed was eluding police in a stolen car. The Strib is now referring to a "possibly stolen car" but continues to parrot the lie that Ahmed posed a danger to the cops by simply driving down the street, per multiple witnesses, at 20 mph. Under gray skies and icy rain, Ahmed Gulad's family huddled together Wednesday by a north Minneapolis park on the street where, last week, police shot and killed their brother, son and nephew. As they spoke to a crowd of about 40 supporters at a rally organized by Communities United Against Police Brutality (CUAPB), family members wept and called for an independent investigation into Gulad's Feb. 5 death. According to Minneapolis police, the killing was labeled as a "justified homicide,"' as the officers involved said they felt their lives were threatened by Gulad, 23. While Minneapolis police Sgt. Jesse Garcia said the police video camera corroborates the officers' details of the events, CUAPB President Michelle Gross and Gulad's family believes his death was unnecessary. Through a translator, Gulad's grandmother said the family recently moved from Somalia to Minneapolis. After escaping unrest in their war-torn homeland, she said, Gulad fell victim to violence in America. "The bullet of the government that's supposed to save him, killed him," she said. Gulad's father said through a translator that he expected the city to take the case seriously. The family also said the police have shown little sympathy since Gulad's death, and approached CUAPB along with the family of Quincy Smith, a radio personality from KMOJ who died on Dec. 9 after police used a Taser on him, ultimately causing heart failure. Garcia said the deaths are being investigated, but Gross said she believes investigations conducted on cases of police brutality often aren't transparent, which leads to questions about the quality of the investigations. It's common for deaths caused by police to be labeled "justified homicides" before a proper investigation is even performed, Gross said. The rally was important because it's up to the Minneapolis community to stand up when police do something wrong, otherwise the police will not have to answer for questionable practices, she added. "The community has to figure out we need and deserve a quality police force that's accountable," Gross said. "I'm not trying to say everything sucks, but I am trying to say we need good. We demand good." Both Gulad and Smith were black, and Gross said those from minority groups are common victims of police brutality, which she said is largely confined to people of color, poor people and homeless people. "People who have less power in society," Gross said, "police find them easy targets." Gross said the CUAPB receives five to 12 complaints of police brutality per week. One thing incidents have in common is the majority of the victims have been "falsely charged." False charges, according to Gross, happen when police charge a person with a crime, usually disorderly conduct, fourth or fifth degree assault or obstructing legal process, in order to justify the police's actions. Gross hopes Wednesday's rally will be a movement toward change and more regulation of police. The police, meanwhile, have come to question CUAPB's motives. Garcia said he believes the rally has lost its focus. "They seem to differ on anything that is law abiding," he said of CUAPB. Wednesday's demonstration was a peaceful one, without police presence. At the park, as cars slowly passed and honked to support the cause, Gulad's brother, Assad Ali, 20, said he was out of tears to cry. "This weather isn't cold, but the world is," he said. "You can deal with the weather, but you can't deal with this world." --------5 of 14-------- From: Jess Sundin <jess [at] antiwarcommittee.org> Subject: AntiWarMN 2.19 7pm ORGANIZE WITH THE A.W.C.: The Anti-War Committee always need help organizing protests and educational events. Join us at our weekly meetings (Thursdays at 7pm, 1313 5th St SE #112C, Minneapolis). --------6 of 14-------- From: Gabe Ormsby <gabeo [at] bitstream.net> Subject: Amnesty Intl 2.19 7:15pm AIUSA Group 315 (Wayzata area) meets Thursday, February 19th, at 7:15 p.m. St. Luke Presbyterian Church, 3121 Groveland School Road, Wayzata (near the intersection of Rt. 101 and Minnetonka Blvd). For further information, contact Richard Bopp at Richard_C_Bopp [at] NatureWorksLLC.com. --------7 of 14-------- From: Michele <MRockne [at] gmail.com> Subject: Foreclosure 2.19 7:30pm The Inaugural action to Halt Sheriffs' Foreclosures was decided to be on Wednesday, March 11th at 10:00 am to take place in the basement of City Hall. Please plan on attending the next Foreclosure Action Planning Meeting tomorrow, February 19 at 7:30 pm. The meeting will be held in the PPEHRC office in the Sabathani Community Center, #126. Some discussion will be on formulating demands for a moratorium on foreclosures, as well as coming up with some sort of press release, blurb announcing the action, and more concrete plans for the action itself. --------8 of 14-------- From: Lydia Howell <lydiahowell [at] visi.com> Subject: Lydia Howell 2.20 11am TUNE IN to CATALYST, FRI.FEB.20, 11am on KFAI Radio for an interview with TEATRO DEL PUEBLO's artistic director ALberto Justiano, on their 8th annual Political Theatre Festival (Mar.19-Mar 7@ INtermedia Arts, Minneapolis.) Plus actors do a scene about capitalism & Christianity from "Cigarettes for Jesus" at the 2009 SPIRIT IN THE HOUSE (Feb.28-Mar. 8 at Hennpin Ave. United Medthodist Church, Minneapolis. For comeplete schedule: www.spiritinthehouse.org KFAI 90.3fm Mpls 106.7fm St.Paul. Live streaming & archived for 2 weeks after broadcast on CATALYST page at http://www.kfai.org Teatro del Pueblo Announces --------9 of 14-------- From: Jesse Mortenson <teknoj [at] gmail.com> Subject: Turning the Tide 2.20/21 6pm Turning the Tide: Toward a Foreign Policy of Human Dignity Friends for a Non-Violent World invites you to an exciting conference - "Turning the Tide: Toward a Foreign Policy of Human Dignity" - on February 20 and 21, 2009 at Hennepin Avenue United Methodist Church in Minneapolis. FNVW is be bringing together noted experts and activists from around the nation and Minnesota to discuss what foreign policy issues are at stake for the Obama administration, and what we as citizens can do to make necessary changes a reality. Check out the program below. Friday 6:00pm Doors open for tabling; Eyes Wide Open exhibit 6:30pm Music 7:00pm Matt Hunter, FNVW's Executive Director, opens the gathering 7:30pm Jim Fine, Legislative Secretary on Foreign Policy for Friends Committee on National Legislation, discusses legislative opportunities in Israel/Palestine Saturday 9:30am Craig Eisendrath, Chair of the Project for Nuclear Awareness, author and former diplomat; and Reese Erlich, award-winning journalist, author and documentary filmmaker discuss the role of diplomacy and U.S./Cuba relations 1:30pm Joanne Landy, Director of the Campaign for Peace and Democracy, and Craig Eisendrath discuss U.S. military bases and the weaponizing of space 3:30pm Lora Lumpe, Coordinator of the U.S. Campaign to Ban Landmines and Cluster Munitions and Kathy Robinson of Women's Action For New Directions discuss Disarmament 5:30pm Book release reception for Bert Berlowe's and Rebecca Janke's second installment of The Compassionate Rebel 7:00pm Reese Erlich and William Beeman, U of M Anthropology Department Chair and U.S./Iran expert discuss U.S./Iran relations We have priced tickets so everyone can attend. Tickets are $25; $10 for students/low-income. If you have questions, please contact the FNVW office, 651-917-0383. It may be most convenient to sign up on-line at www.fnvw.org Co-Sponsors to date:// Holy Trinity Lutheran, Minnesota Allinace of Peacemakers, MN FOR, Pax Cristi, Peace through Justice Committee at Hennipin Avenue United Methodist Church, Veterans for Peace, St. John Neuman Church Woman Against Military Madness --------10 of 14-------- From: t r u t h o u t <messenger [at] truthout.org> Subject: Moyers/oligarchs 2.20 9pm Bill Moyers | High Noon: Geithner v. the American Oligarchs http://www.truthout.org/021609J Bill Moyers, The Bill Moyers Journal: "The battle is joined as they say - and here's the headline that framed it: 'High Noon: Geithner v. The American Oligarchs.' The headline is in one of the most informative new sites in the blogosphere called: baselinescenario.com. Here's the quote that grabbed me: 'There comes a time in every economic crisis, or more specifically, in every struggle to recover from a crisis, when someone steps up to the podium to promise the policies that - they say - will deliver you back to growth. The person has political support, a strong track record, and every incentive to enter the history books. But one nagging question remains. Can this person, your new economic strategist, really break with the vested elites that got you into this much trouble?'" -------11 of 14------- Obama Administration Continues US Military Global Dominance by Peter Phillips February 19th, 2009 Dissident Voice The Barack Obama administration is continuing the neo-conservative agenda of US military domination of the world - albeit with perhaps a kinder-gentler face. While overt torture is now forbidden for the CIA and Pentagon, and symbolic gestures like the closing of the Guantanamo prison are in evidence, a unilateral military dominance policy, expanding military budget, and wars of occupation and aggression will likely continue unabated. The military expansionists from within the Reagan, George H. W. Bush, Clinton, G. W. Bush administrations put into place solid support for increased military spending. Clinton's model of supporting the US military industrial complex held steady defense spending and increased foreign weapons sales from 16% of global orders to over 63% by the end of his administration. The neo-conservatives, who dominated the most recent Bush administration, amplified this trend of increased military spending. The neo-cons laid out their agenda for military global dominance in the 2000 Project for a New American Century (PNAC) report Rebuilding America's Defenses. The report called for the protection of the American Homeland, the ability to wage simultaneous theater wars, to perform global constabulary roles, and to control space and cyberspace. The report claimed that in order to maintain a Pax Americana, potential rivals - such as China, Iran, Iraq, and North Korea - needed to be held in check. This military global dominance agenda required forward deployment of US forces worldwide and increasing defense/war spending well into the 21st century. The result was a doubling of the US military budget to over $700 billion in the last eight years. The US now spends as much on war/defense as the rest of the world combined, making Americans the highest war-tax payers in the world. Barack Obama's election brought a moment of hope for many. However, the Obama administration is not calling for decreased military spending, or a reversal of US military global dominance. Instead, Obama retained Robert Gates, thus making Obama the first president from an opposing party, in US history, to keep in place the outgoing administrations' Secretary of Defense/War. Additionally, Obama is calling for an expanded war in Afghanistan and only minimal long-range reductions in Iraq. The US military industrial complex is deeply embedded inside the Washington beltway. According to the most recent reports from OpenSecrets.org, 151 members of Congress in 2006 had up to $195.5 million of their personal assets invested in defense companies. Major defense contractors were seriously involved in the 2008 elections. Lockheed Martin gave $2,612,219 in total political campaign donations, with 49% to Democrats ($1,285,493) and 51% to Republicans ($1,325,159). Boeing gave $2,225,947 in 2008 with 58% going to Democrats, and General Dynamics provided $1,682,595 to both parties. Northrop Grumman spent over $20 million in 2008, hiring lobbyists to influence Congress, and Raytheon spent $6 million on lobbyists in the same period. In a revolving door appointment, Obama nominated Raytheon's senior vice president for government operations and strategy, William Lynn, for the number two position in the Pentagon. Lynn was formally the Defense Department's comptroller during the Clinton administration. The International Monetary Fund's prediction for global economic growth in 2009 is 0.5 percent - the worst since World War II. The United Nations' International Labor Organization estimates that some 50 million workers will lose their jobs worldwide this year. There are an estimated 62,000 U.S. companies expected to close in 2009, and while official unemployment is at 7 percent in the US, when you add people no longer looking for jobs and part-time workers, joblessness is closer to 14 percent. The military-industrial-political elite are worried about the potential of increasing global insecurity. The answer inside the Obama Administration is to continue high defense/war spending to insure military control of both domestic and foreign instabilities. The military, industrial, congressional, and administrative elite profit from defense spending, both financially and ideologically. Insider profit taking from pentagon spending is widespread in Washington. But perhaps more important is the belief that this global military machine is seen as necessary for the protection of US corporate interests and the American upper classes in an increasingly destabilized world. Given that belief, the Obama administration is unlikely to change the defense spending policies of the previous US administrations without significant disruptive pressure from anti-war activists and global empire resisters. Peter Phillips is a Professor of Sociology at Sonoma State University, and Director of Project Censored, a media research organization. [Time for those once-upon-a-time hope-filled folks to renew the anti-war actions they discontinued as Obama took office. Misplaced hope. Back to the standard bad capitalist imperial reality. The US is the exil axis (plus Britain & Israel abnd a few others); we have to make it better, and just sitting around sighing and hoping will do nothing but make it easier for the US bad guys to get away with it. -ed] --------12 of 14-------- The Global Ditch Is Eastern Europe Primed to Explode? By MIKE WHITNEY February 17, 2009 CounterPunch Eastern Europe is about to blow. If it does, it could take much of the EU with it. It's an emergency situation but there are no easy solutions. The IMF doesn't have the resources for a bailout of this size and the recession is spreading faster than relief efforts can be organized. Finance ministers and central bankers are running in circles trying to put out one fire after another. Its only a matter of time before they are overtaken by events. If one country is allowed to default, the dominoes could begin to tumble through the whole region. This could trigger dramatic changes in the political landscape. The rise of fascism is no longer out of the question. The UK Telegraph's economics editor Edmund Conway sums it up like this: "A 'second wave' of countries will fall victim to the economic crisis and face being bailed out by the International Monetary Fund, its chief warned at the G7 summit in Rome....But with some countries' economies effectively dwarfed by the size of their banking sector and its financial liabilities, there are fears they could fall victim to balance of payments and currency crises, much as Iceland did before receiving emergency assistance from the IMF last year." (UK Telegraph) Foreign capital is fleeing at an alarming rate; nearly two-thirds gone in matter of months. Deflation is pushing down asset prices, increasing unemployment, and compounding the debt-burden of financial institutions. It's the same everywhere. The economies are being hollowed out and stripped of capital. Ukraine is teetering on the brink of bankruptcy. Poland, Latvia, Lithuania, Hungary have all slipped into a low-grade depression. The countries that followed Washington's economic regimen have suffered the most. They bet that debt-fueled growth and exports would lead to prosperity. That dream has been shattered. They haven't developed their consumer markets, so demand is weak. Capital is scarce and businesses are being forced to deleverage to avoid default. All of Eastern Europe has gotten a margin call. They need extra funds to cover the falling value of their equity. They need a lifeline from the IMF or their economies will continue to crumble. The UK Telegraph's economics correspondent Ambrose Evans-Pritchard has written a series of articles about Eastern Europe. In "Failure to save East Europe will lead to Worldwide meltdown" he says: "Austria's finance minister Josef Prll made frantic efforts last week to put together a .150bn rescue for the ex-Soviet bloc. Well he might. His banks have lent .230bn to the region, equal to 70pc of Austria's GDP. "A failure rate of 10pc would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen. The European Bank for Reconstruction and Development (EBRD) says bad debts will top 10pc and may reach 20pc.... Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay - or roll over - $400bn this year, equal to a third of the region's GDP. Good luck. The credit window has slammed shut. Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets. They are five times more exposed to this latest bust than American or Japanese banks, and they are 50pc more leveraged (IMF data). (Ambrose Evans-Pritchard UK Telegraph) An economic crisis is quickly turning into a political crisis. Riots have broken out in capitals across Eastern Europe. Mr. Geithner had better be paying attention. The prospects for political upheaval are growing. Public anxiety can spill out onto the streets at a moments notice. Governments must act quickly and with resolve. These countries need hard currency and guarantees of support. If they don't get help, the simmering public fury will turn into something much more lethal. UK Telegraph's economics correspondent Ambrose Evans-Pritchard: "Global banks have so far written down half the $2,200bn losses estimated by the IMF. On top of this, EU banks have $1,600bn of exposure to Eastern Europe - increasingly viewed as Europe's subprime debacle, and EU corporate debts are 95pc of GDP compared to 50pc in the US, a mounting concern as default rates surge. "It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems. Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance." (UK Telegraph) It's the same wherever banks merged their commercial and investment branches. Debt has skyrocketed to unsustainable levels destabilizing the entire economy. The banks have been operating like hedge funds, concealing their activities on off-balance sheets operations and maximizing their leverage through opaque debt-instruments. Now the global economy is caught in the downdraft of a collapsing speculative bubble. East Europe has been hit hard, but it's just the first of many bowling pins that will fall. All of Europe has been infected by the same virus which originated on Wall Street. Monday's New York Times summarizes developments in the EU: "Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday...The economy of the 16 countries sharing the euro currency declined by 1.5 percent in the fourth quarter, (an annualized drop of roughly 6 percent) according to the European Union's statistics office. That is even worse than the 1 percent decline in the United States economy during that period, compared with the previous quarter. "Today's data wipes out any illusion that the euro zone is getting off lightly in this global downturn," said Jrg Radeke, an economist at the Center for Economics and Business Research in London. ("Europe Slump Deeper than Expected" New york Times) The "liquidationists" would like to see governments cut off the flow of funds to ailing financial institutions and let them fail by themselves. It's Darwinian madness, like waiting out a heart attack on the kitchen floor instead of rushing to the hospital for emergency care. The global economy is decelerating at the fastest pace on record. 40 percent of global wealth has been wiped out. The banking system is insolvent, unemployment is soaring, tax revenues are falling, the markets are in shock, housing is crashing, deficits are soaring, and consumer confidence is at its lowest point in history. This is no time to cling to half-baked ideology. The global economy is undergoing a massive system-wide contraction which could spin out of control and plunge us into another world war. Political leaders need to grasp the urgency of the moment and keep the vehicle from careening into the ditch. Mike Whitney lives in the Pacific Northwest and can be reached at fergiewhitney [at] msn.com --------13 of 14-------- Finance Capitalism Hits a Wall The Oligarchs' Escape Plan By MICHAEL HUDSON February 17, 2009 CounterPunch The financial "wealth creation" game is over. Economies emerged from World War II relatively free of debt, but the 60-year global run-up has run its course. Finance capitalism is in a state of collapse, and marginal palliatives cannot revive it. The U.S. economy cannot "inflate its way out of debt," because this would collapse the dollar and end its dreams of global empire by forcing foreign countries to go their own way. There is too little manufacturing to make the economy more "competitive," given its high housing costs, transportation, debt and tax overhead. A quarter to a third of U.S. real estate has fallen into negative equity, so no banks will lend to them. The economy has hit a debt wall and is falling into negative equity, where it may remain for as far as the eye can see until there is a debt write-down. Mr. Obama"s "recovery" plan, based on infrastructure spending, will make real estate fortunes for well-situated properties along the new public transport routes, but there is no sign of cities levying a windfall property tax to save their finances. Their mayors would rather keep the cities broke than to tax real estate and finance. The aim is to re-inflate property markets to enable owners to pay the banks, not to help the public sector break even. So state and local pension plans will remain underfunded while more corporate pension plans go broke. One would think that politicians would be willing to do the math and realize that debts that can't be paid, won't be. But the debts are being kept on the books, continuing to extract interest to pay the creditors that have made the bad loans. The resulting debt deflation threatens to keep the economy in depression until a radical shift in policy occurs - a shift to save the "real" economy, not just the financial sector and the wealthiest 10 per cent of American families. There is no sign that Mr. Obama's economic advisors, Treasury officials and heads of the relevant Congressional committees recognize the need for a write-down. After all, they have been placed in their positions precisely because they do not understand that debt leveraging is a form of economic overhead, not real "wealth creation". But their tunnel vision is what makes them "reliable" to Wall Street, which doesn't like surprises. And the entire character of today's financial crisis continues to be labeled "surprising" and "unexpected" by the press as each new surprisingly pessimistic statistic hits the news. It's safe to be surprised; suspicious to have expected bad news and being a "premature doomsayer". One must have faith in the system above all. And the system was the Greenspan Bubble. That is why "Ayn Rand Alan" was put in charge in the first place, after all. So the government tries to recover the happy Bubble Economy years by getting debt growing again, hoping to re-inflate real estate and stock market prices. That was, after all, the Golden Age of finance capital's world of using debt leverage to bid up the book-price of fictitious capital assets. Everyone loved it as long as it lasted. Voters thought they had a chance to become millionaires, and approved happily. And at least it made Wall Street richer than ever before - while almost doubling the share of wealth held by the wealthiest 1 per cent of America's families. For Washington policy makers, they are synonymous with "the economy" - at least the economy for which national economic policy is being formulated these days. The Obama-Geithner plan to restart the Bubble Economy's debt growth so as to inflate asset prices by enough to pay off the debt overhang out of new "capital gains" cannot possibly work. But that is the only trick these ponies know. We have entered an era of asset-price deflation, not inflation. Economic data charts throughout the world have hit a wall and every trend has been plunging vertically downward since last autumn. U.S. consumer prices experienced their fastest plunge since the Great Depression of the 1930s, along with consumer "confidence," international shipping, real estate and stock market prices, oil and the exchange rate for British sterling. The global economy is falling into depression, and cannot recover until debts are written down. Instead of doing this, the government is doing just the opposite. It is proposing to take bad debts onto the public-sector balance sheet, printing new Treasury bonds give the banks - bonds whose interest charges will have to be paid by taxing labor and industry. The oligarchy's plans for a bailout (at least of its own financial position) In periods of looming collapse, wealthy elites protect their funds. In times past they bought gold when currencies started to weaken. (Patriotism never has been a characteristic of cosmopolitan finance capital.) Since the 1950s the International Monetary Fund has made loans to support Third World exchange rates long enough to subsidize capital flight. In the United States over the past half-year, bankers and Wall Street investors have tapped the Treasury and Federal Reserve to support prices of their bad loans and financial gambles, buying out or guaranteeing $12 trillion of these junk debts. Protection for the U.S. financial elite thus takes the form of domestic public debt, not foreign currency. It is all in vain as far as the real economy is concerned. When the Treasury gives banks newly printed government bonds in "cash for trash" swaps, it leaves today's unpayably high private-sector debt in place. All that happens is that this debt is now owed to (or guaranteed by) the government, which will have to impose taxes to pay the interest charges. The new twist is a variant on the IMF "stabilization" plans that lend money to central banks to support their currencies - for long enough to enable local oligarchs and foreign investors to move their savings and investments offshore at a good exchange rate. The currency then is permitted to collapse, enabling currency speculators to rake in enough gains to empty out the central bank's reserves. Speculators view these central bank holdings as a target to be raided - the larger the better. The IMF will lend a central bank, say, $10 billion to "support the currency:. Domestic holders will flee the currency at a high exchange rate. Then, when the loan proceeds are depleted, the currency plunges. Wages are squeezed in the usual IMF austerity program, and the economy is forced to earn enough foreign exchange to pay back the IMF. As a condition for getting this kind of IMF "support," governments are told to run a budget surplus, cut back social spending, lower wages and raise taxes on labor so as to squeeze out enough exports to repay the IMF loans. But inasmuch as this kind "stabilization plan" cripples their domestic economy, they are obliged to sell off public infrastructure at distress prices - to foreign buyers who themselves borrow the money. The effect is to make such countries even more dependent on less "neoliberalized" economies. Latvia is a poster child for this kind of disaster. Its recent agreement with Europe is a case in point. To help the Swedish banks withdraw their funds from the sinking ship, EU support is conditional on Latvia's government agreeing to cut salaries in the private sector - and not to raise property taxes (currently almost zero). The problem is that Latvia, like other post-Soviet economies, has scant domestic output to export. Industry throughout the former Soviet Union was torn up and scrapped in the 1990s. (Welcome to victorious finance capitalism, Western-style.) What they had was real estate and public infrastructure free of debt - and hence, available to be pledged as collateral for loans to finance their imports. Ever since its independence from Russia in 1991, Latvia has paid for its imported consumer goods and other purchases by borrowing mortgage credit in foreign currency from Scandinavian and other banks. The effect has been one of the world's biggest property bubbles - in an economy with no means of breaking even except by loading down its real estate with more and more debt. In practice the loans took the form of mortgage borrowing from foreign banks to finance a real estate bubble - and their import dependency on foreign suppliers. So instead of helping it and other post-Soviet nations develop self-reliant economies, the West has viewed them as economic oysters to be broken up to indebt them in order to extract interest charges and capital gains, leaving them empty shells. This policy crested on January 26, 2009, when Joaquin Almunia of the European Commission wrote a letter to Latvia's Prime Minister spelling out the terms on which Europe will bail out the Swedish and other foreign banks operating in Latvia - at Latvia's own expense: "Extended assistance is to be used to avoid a balance of payments crisis, which requires restoring confidence in the banking sector [now entirely foreign owned], and bolstering the foreign reserves of the Bank of Latvia. This implies financing outstanding government debt repayments (domestic and external). And if the banking sector were to experience adverse events, part of the assistance would be used for targeted capital infusions or appropriate short-term liquidity support. However, financial assistance is not meant to be used to originate new loans to businesses and households... . "it is important not to raise ungrounded expectations among the general public and the social partners, and, equally, to counter misunderstandings that may arise in this respect. Worryingly, we have witnessed some recent evidence in Latvian public debate of calls for part of the financial assistance to be used inter alia for promoting export industries or to stimulate the economy through increased spending at large. It is important actively to stem these misperceptions." Riots broke out last week, and protesters stormed the Latvian Treasury. Hardly surprising! There is no attempt to help Latvia develop the export capacity to cover its imports. After the domestic kleptocrats, foreign banks and investors have removed their funds from the economy, the Latvian lat will be permitted to depreciate. Foreign buyers then can come in and pick up local assets on the cheap once again. The practice of European banks riding the crest of the post-Soviet real estate bubble is backfiring to wreck the European economies that have engaged in this predatory lending to neighboring economies as well. As one reporter has summarized: In Poland 60 percent of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly - by lenders and borrowers - it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not. Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. This was the West's alternative to Stalinism. It did not help these countries emulate how Britain and America got rich by protectionist policies and publicly nurtured industrialization and infrastructure spending. Rather, the financial rape and industrial dismantling of the former Soviet economies was the most recent exercise in Western colonialism. At least U.S. investors were smart enough to stand clear and merely ride the stock market run-up before jumping ship. But now, the government's plan to "save" the economy is to "save the banks," along similar lines to the West trying to save its banks from their adventure in the post-Soviet economies. This is the basic neoliberal economic plan, after all. The U.S. economy is about to be "post-Sovietized". The U.S. giveaway to banks, masquerading as "help for troubled homeowners" The Obama bank bailout is arranged much like an IMF loan to support the exchange rate of foreign currency, but with the Treasury supporting financial asset prices for U.S. banks and other financial institutions. Instead of banks and oligarchs abandoning the dollar, the aim is to enable them to dump their bad mortgages and CDOs and get domestic Treasury bonds. Private-sector debt will be moved onto the U.S. Government balance sheet, where "taxpayers" will bear losses - mainly labor not Wall Street, inasmuch as the financial sector has been freed of income-tax liability by the "small print" in last fall's Paulson-Bush bailout package. But at least the U.S. Government is handling the situation entirely in domestic dollars. As in Third World austerity programs, the effect of keeping the debts in place at the "real" economy's expense will be to shrink the domestic U.S. market - while providing opportunities for hedge funds to pick up depreciated assets cheaply as the federal government, states and cities sell them off. This is called letting the banks "earn their way out of debt". It's strangling the "real" economy, because not a dollar of the government's response has been devoted to reducing the overall debt volume. Take the much-vaunted $50 billion program designed to renegotiate mortgages downward for "troubled homeowners". Upon closer examination it turns out that the real beneficiaries are the giant leading banks such as Citibank and Bank of America that have made the bad loans. The Treasury will take on the bad debt that banks are stuck with, and will permit mortgagees to renegotiate their monthly payment down to 38 per cent of their income. But rather than the banks taking the loss as they should do for over-lending, the Treasury itself will make up the difference - and pay it to the banks so that they will be able to get what they hoped to get. The hapless mortgage-burdened family stuck in their negative-equity home turns out to be merely a passive vehicle for the Treasury to pass debt relief on to the commercial banks. Few news stories have made this clear, but the Financial Times spelled the details buried in small print. It added that the Treasury has not yet decided whether to write down the debt principal for the estimated 15 million families with negative equity (and perhaps 30 million by this time next year as property prices continue to plunge). No doubt a similar deal will be made: For every $100,000 of write-down in debt owed by over-mortgaged homeowners, the bank will receive $100,000 from the Treasury. Government debt will rise by $100,000, and the process will continue until the Treasury has transferred $50,000,000 to the banks that made the reckless loans. There is enough for just 500,000 of these renegotiations of $100,000 each. It may seem like a big amount, but it's only about 1/30th of the properties underwater. Hardly enough to make much of a dent, but the principle has been put in place for many further bailouts. It will take almost an infinity of them, as long as the Treasury tries to support the fiction that "the miracle of compound interest" can be sustained for long. The economy may be dead by the time saner economic understanding penetrates the public consciousness. In the mean time, bad private-sector debt will be shifted onto the government's balance sheet. Interest and amortization currently owed to the banks will be replaced by obligations to the U.S. Treasury. Taxes will be levied to make up the bad debts with which the government is stuck. The "real" economy will pay Wall Street - and will be paying for decades! Calling the $12 trillion giveaway to bankers a "subprime crisis" makes it appear that bleeding-heart liberals got Fannie Mae and Freddie Mac into trouble by insisting that these public-private institutions make irresponsible loans to the poor. The party line is, "Blame the victim". But we know this is false. The bulk of bad loans are concentrated in the largest banks. It was Countrywide and other banksters that led the irresponsible lending and brought heavy-handed pressure on Fannie Mae. Most of the nation's smaller, local banks didn't make such reckless loans. The big mortgage shops didn't care about loan quality, because they were run by salesmen. The Treasury is paying off the gamblers and billionaires by supporting the value of bank loans, investments and derivative gambles, leaving the Treasury in debt. U.S./Post-Soviet Convergence? It may be time to look once again at what Larry Summers and his Rubinomics gang did in Russia in the mid-1990s and to Third World countries during his tenure as World Bank economist to see what kind of future is being planned for the U.S. economy over the next few years. Throughout the Soviet Union the neoliberal model established "equilibrium" in a way that involved demographic collapse: shortening life spans, lower birth rates, alcoholism and drug abuse, psychological depression, suicides, bad health, unemployment and homelessness for the elderly (the neoliberal mode of Social Security reform). Back in the 1970s, people speculated whether the US and Soviet economies were converging. Throughout the 20th century, of course, everyone expected government regulation, infrastructure investment and planning to increase. It looked like the spread of democratically elected governments would go hand in hand with people voting in their own economic interest to raise living standards, thereby closing the inequality gap. This is not the kind of convergence that has occurred since 1991. Government power is being dismantled, living standards have stagnated and wealth is concentrating at the top of the economic pyramid. Economic planning and resource allocation has passed into the hands of Wall Street, whose alternative to Hayek's "road to serfdom" is debt peonage for the economy at large. There does need to be a strong state, to be sure, to keep the financial and real estate rentier power in place. But the West's alternative to the old Soviet bureaucracy is a financial planning. In place of a political overhead, we have a financial and real estate overhead. Stalinist Russia and Maoist China achieved high technology without land-rent, monopoly rent and interest overhead. This purging of rentier income was the historical task of classical political economy, and it became that of socialism. The aim was to create a Clean Slate financially, bringing prices in line with technologically necessary costs of production. The aim was to provide everyone with the fruits of their labor rather than letting banks and landlords siphon off the economic surplus. Ideas of economic efficiency and "wealth creation" today are an utterly different kind of liberalism and "free markets". Commercial banks lend money not to increase production but to inflate asset prices. Some 70 per cent of bank loans are mortgage loans for real estate, and most of the rest is for corporate takeovers and raids, to finance stock buy-backs or simply to pay dividends. Asset-price inflation obliges people to go deeper into debt than ever before to obtain access to housing, education and medical care. The economy is being "financialized," not industrialized. This has been the plan as much for the post-Soviet states as for North America, Western Europe and the Third World. But we are far from having reached the end of the line. Celebrations that our present financialized economy represents the "end of history" are laughingly premature. Today's policies look more like a dead end. But that does not mean that, like the Roman Empire, they won't lead us down toward a new Dark Age. That's what tends to happen when oligarchies do the planning. Is America a Failed Economy? It may be time to ask whether neoliberal pro-rentier economics has turned America and the West into a Failed Economy. Is there really no alternative? Have the neoliberals made the shift of planning from governments to the financial oligarchy irreversible? Let's first dispose of the "foundation myth" of the idea still guiding the United States and Europe. Free-market economists pretend that prices can be brought into line most efficiently with technologically necessary costs of production under capitalism, and indeed, under finance capitalism. The banks and stock market are supposed to allocate resources most efficiently. That at least is the dream of self-regulating markets. But today it looks like only a myth, public relations patter talk to get a generation of increasingly indebted voters not to act in their own self-interest. Industrial capitalism always has been a hybrid, a symbiosis with its feudal legacy of absentee property ownership, oligarchic finance and public debts rather than the government acting as net creditor. The essence of feudalism was extractive, not productive. That is why it created industrial capitalism as state policy in the first place - if only to increase its war-making powers. But the question must now be raised as to whether only socialism can complete the historical task that classical political economy set out for itself - the ideal that futurists in the 19th and 20th centuries believed that an unpurified capitalism might still be able bring about without shedding its legacy of commercial banking indebting property and carving infrastructure out of the public domain. Today it is easier to see that the Western economies cannot go on the way they have been. They have reached the point where the debts exceed the ability to pay. Instead of recognizing this fact and scaling debts back into line with the ability to pay, the Obama-Geithner plan is to bail out the big banks and hedge funds, keeping the volume of debt in place and indeed, growing once again through the "magic of compound interest". The result can only be an increasingly extractive economy, until households, real estate and industrial companies, states and cities, and the national government itself is driven into debt peonage. The alternative is a century and a half old, and emerged out of the ideals of the classical economic doctrines of Adam Smith, David Ricardo, John Stuart Mill, and the last great classical economist, Marx. Their common denominator was to view rent and interest are extractive, not productive. Classical political economy and its successor Progressive Era socialism sought to nationalize the land (or at least to fully tax its rent as the fiscal base). Governments were to create their own credit, not leave this function to wealthy elites via a bank monopoly on credit creation. So today's neoliberalism paints a false picture of what the classical economists envisioned as free markets. They were markets free of economic rent and interest (and taxes to support an aristocracy or oligarchy). Socialism was to free economies from these overhead charges. Today's Obama-Geithner rescue plan is just the reverse. Michael Hudson is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh [at] michael-hudson.com --------14 of 14-------- To raise cash, Sarah Palin does her power strip in empty strip malls. ----------------------------------------------------------------------------- - David Shove shove001 [at] tc.umn.edu rhymes with clove Progressive Calendar over 2225 subscribers as of 12.19.02 please send all messages in plain text no attachments vote third party for president for congress now and forever Socialism YES Capitalism NO To GO DIRECTLY to an item, eg --------8 of x-------- do a find on --8
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