Progressive Calendar 11.16.10
From: David Shove (
Date: Tue, 16 Nov 2010 15:17:36 -0800 (PST)
              P R O G R E S S I V E   C A L E N D A R   11.16.10

1. Laura Goodman     11.16 6:30pm
2. Mac activists     11.16 7pm
3. Give max/anti-war 11.16

4. Alliant vigil     11.17 7am
5. Climate change    11.17 11:30am
6. China/food system 11.17 12noon
7. Shop WAMM         11.17 5pm
8. Citizen/MN budget 11.17 6:30pm
9. Oil on ice/film   11.17 6:30pm

10. David Shove    - Watching Minnesota's Top Ten in the morning
11. Chris Hedges   - The origin of America's intellectual vacuum
12. Michael Hudson - Obama's greatest betrayal

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From: patty <pattypax [at]>
Subject: Laura Goodman 11.16 6:30pm

This Tuesday our guest will be Laura Goodman and her topic will be "What
is needed in law enforcement today and Community Policing.

During her 28 years working in the criminal justice system, Laura
Goodman has lived and worked according to her principles, which
includes a keen sense of justice and fairness.

Pax Salons ( )
are held (unless otherwise noted in advance):
Tuesdays, 6:30 to 8:30 pm.
Mad Hatter's Tea House,
943 W 7th, St Paul, MN

Salons are free but donations encouraged for program and treats.
Call 651-227-3228 or 651-227-2511 for information.

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From: Women Against Military Madness <wamm [at]>
Subject: Mac activists 11.16 7pm

Macalester Alumni Activists Speak Out
Tuesday, November 16, 7:00 to 9:00 p.m. Macalester College, Markim Hall,
1600 Grand Avenue, St. Paul.

In the aftermath of the horrifying crimes of September 11, 2001, the
United States Congress passed a number of pieces of legislation, including
the Patriot Act (I and II) and the Military Commissions Act. The Executive
Branch also instituted various and unusual "initiatives," which have been
upheld by the Judiciary. These new laws and practices are stripping away
protections guaranteed in the US Constitution. What rights have US
citizens, immigrants, and others lost in the "war on terror"? How can we
maintain and regain our rights? Macalester is on the front line in the
battle for our rights, including the right to unionize for a better, more
secure life; to demonstrate for vital causes; and to speak truth to power.
Come hear what's been going on.

Speakers include Meredith (targeted by recent FBI raids on peace and
justice activists), Erik (active in fighting for collective bargaining
rights for Jimmy Johns workers), Luce (one of the RNC 8.) Endorsed by:

[When the rich come to strip us of our last crumbs, they will want to be
sure we are sitting ducks with no rights, no defense, no fight. -ed]

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From: kim defranco <kimdefranco [at]>
Subject: Give max/anti-war 11.16

Please consider giving a donation to help with legal expenses for the
people that were raided and/or subpoenaed by the FBI because in the long
run this repression will effect all who protest, stand up against
injustice, and question American foreign policy. This is also a great way
for all donations no matter what amount to grow even bigger.


Dear Friends,
We need your support to stop FBI and grand jury repression against the
anti-war movement.

November 16 is Give to the Max Day - a great opportunity to give money
to causes you support in Minnesota. On November 16 please visit: to
contribute to the campaign to stop FBI repression!

You would think it's not a crime to be against war. But in a harrowing
development, the FBI and a federal grand jury are harassing and
threatening anti-war activists here in Minnesota and around the country.
On September 24, the FBI raided seven homes and the Anti-War Committee
office. The FBI also handed subpoenas to testify before a federal grand
jury to fourteen activists in Illinois, Minnesota, and Michigan. You can
see profiles of the people affected at

The activists affected are involved in the Anti-War Committee and many
other progressive groups. They have done nothing wrong, and they are
taking a principled position standing up against the FBI witch hunt. Now
they face the prospect of jail time if they refuse to be part of the grand
jury fishing expedition.

We see the raids and subpoenas as an attack on anti-war and other
progressive movements. It is an attack on our freedom to speak, our
freedom to assemble with like-minded people, and our freedom to tell the
government that their actions and policies are wrong. It is an attempt to
clear the way for more wars and occupations of other countries by the U.S.
military Standing up against this will likely be a long process. And the
cost will be high - both for legal defense and for the work of educating
the public about what's happening.

The grand jury, and all repression against the anti-war movement have to
stop. We need your help to stop it. November 16 is a great opportunity to
support efforts to stop the repression against the anti-war movement. On
November 16, please go to to
contribute to the campaign to stop FBI repression!

To find out more and get involved in the campaign, see and

[And many other local organizations are asking re give max. -ed]

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From: AlliantACTION <alliantaction [at]>
Subject: Alliant vigil 11.17 7am

Join us Wednesday morning, 7-8 am
Now in our 14th year of consecutive Wednesday
morning vigils outside Alliant Techsystems,
7480 Flying Cloud Drive Eden Prairie.
We ask Who Profit$? Who Dies?
directions and lots of info:

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From: UMN Consortium on Law & Values and Joint Degree Program
Subject: Climate change 11.17 11:30am

Nov. 17 Lecture by Prof. Daniel Bodansky, JD
2010-11 Lecture Series on Law, Health & the Life Sciences
"From Climate Change to the Gulf Oil Spill:
Law and Science in Times of Crisis"

"The International Climate Change Negotiations:
The Road from Copenhagen"
Prof. Daniel M. Bodansky, JD
Professor, School of Sustainability; Lincoln Professor of Law, Ethics, and
Sustainability, Arizona State University, Sandra Day O'Connor College of

Wednesday, November 17, 2010
11:30am - 1:00pm
Mississippi Room, Coffman Memorial Union

Prof. Bodansky will discuss the outcomes of last year's Copenhagen climate
change conference. Was it a success or failure? And what are Prof. Daniel
Bodansky, JD the prospects for the UN climate change regime going forward?
Is the upcoming conference in Cancun this December likely to do better
than Copenhagen? What are the chances for a new legal agreement on climate
change, either to supplement or replace the Kyoto Protocol? In his talk,
Professor Bodansky will discuss the past, present, and future of the
international climate change negotiations.

Prof. Daniel Bodansky, JD, is the Lincoln Professor of Law, Ethics, and
Sustainability at Arizona State University. He has also has been named an
Affiliated Faculty member in both the College of Law's Center for Law and
Global Affairs, and the Global Institute of Sustainability's School of
Sustainability at ASU. His scholarship includes two books, 24 scholarly
articles and book chapters, five book reviews and more than 40 papers and
presentations. He is the recipient of a Council on Foreign Relations
International Affairs Fellowship, a Pew Faculty Fellowship in
International Affairs, and a Jean Monnet Fellowship from the European
University Institute in Florence. Bodansky currently serves on the Board
of Editors of the American Journal of International Law and is the
U.S.-nominated arbitrator under the Antarctic Environment Protocol. In
addition, he is a member of the Council on Foreign Relations and the
American Society of International Law.

Prof. Brad Karkkainen, JD
Professor, Law School, University of Minnesota

Prof. Katherine Klink, PhD
Professor, Department of Geography, University of Minnesota

Prof Hari Osofsky, JD
Associate Director of Law, Geography & Environment; Associate Professor,
Law School, University of Minnesota

Intended Audience: students, faculty, attorneys, researchers,
policymakers, and community members.

This event is free and open to the public.
This lecture is intended for students, faculty, attorneys, researchers,
scientists, policymakers, and community members.

Continuing Education--CLE
Application for 1.5 hours of Continuing Legal Education (CLE) credits for
attorneys has been submitted.

Registration is required for those requesting continuing education credit.
Registration is available online at, by
phone at 612-625-0055, or by email at jointdgr [at] Please provide
your name, email address and indicate if continuing education credits are

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From: Institute on the Environment <sjszurek [at]>
Subject: China/food system 11.17 12noon

11/17 - Lester Brown Was Half Right: What We Can Learn from China's Food
Speaker: Jim Harkness, President, Institute for Agriculture and Trade

China faces the challenge of feeding 22% of the world's population on 9%
of its arable land. What does this really mean for China's farmers, the
environment and the world? And what can we learn from China's experience
as we grapple with challenges of development, environment and hunger?
Harkness, who lived and worked in China for 16 years before joining the
Institute for Agriculture and Trade Policy, examines the challenges of
feeding China and explains why, despite two decades of dire warnings,
China's growing appetite has not brought famine to the rest of the

Lectures take place Wednesdays, noon to 1 p.m, in IonE Seminar Room 380,
VoTech Bldg., St. Paul campus. All lectures are free, no registration
required, and also air live on the Web. Institute on the Environment | 325
VoTech Building, 1954 Buford Ave. | St. Paul | MN | 55108

See the Frontiers page for more details, including links to the live
broadcast and archived presentations.

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From: Women Against Military Madness <wamm [at]>
Subject: Shop WAMM 11.17 5pm

WAMM Benefit Shopping Night at Ten Thousand Villages

Wednesday, November 17, 5:00 to 8:00 p.m. Ten Thousand Villages, 867
Grand Avenue, St. Paul. Benefit WAMM by shopping at Ten Thousand
Villages in St. Paul. Ten Thousand Villages is a fair-trade retailer
of artisan-crafted home decor, personal accessories and gift items
from across the globe. As one of the world's oldest and largest fair-
trade organizations, Ten Thousand Villages has spent more than 60
years cultivating trading relationships in which artisans receive a
fair price for their work and consumers have access to distinctive
handcrafted items. 20% of the evening's sales will be donated to WAMM.
Make an evening of it and visit one of the many restaurants located
nearby. Join WAMM members at Café Latte (850 Grand Avenue), following
your shopping experience. Sponsored by: Ten Thousand Villages and

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From: Diane J. Peterson <birch7 [at]>
Subject: Citizen/MN budget 11.17 6:30pm

Tonight, I went to a citizen input session on the MN budget funded by the
Bush Foundation.  I learned about it from MUHCC.  A policy think tank
called Citizens League has put together the project they're calling
"Common Cents:  Minnesotans Weigh in on Taxes and Spending."  It is a free event to articulate
our values as a means to impact the state budget.  I went to influence my
fellow citizens about the economic magic wand contained within
single-payer health care.  I took a friend with me.  Betsy is going next
Wednesday to another session they are putting on.

I called one of the organizers, Maya, at 612-859-1515, and she said I
should invite as many friends as I can.  The plan is to combine the
results of these sessions into a presentation to the governor and the
Legislature.  I'd love for Greens to be on the scene for this.

Send your acquaintances to the website (above) to learn about the other
opportunities for these sessions.

Wednesday, November 17
6:30 - 8:30 p.m.
Rondo Community Outreach Library
461 Dale St. N

We were given a slide presentation on where/what the state spends money,
and asked to register our choices with hand-held electronic devices--the
choices usually numbered 1 to 9--for our preferences on how to cope with
the budget.  They were taking written comments, too.

We need to be discerning about these sessions since TakeAction is
involved.  The opportunity for us to exercise some clout through these
sessions is, for me, irresistable.

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From: Christine Frank <christinefrank [at]>
Subject: Oil on ice/film 11.17 6:30pm

Movie Night with Alaska Wilderness League and AM950

If you missed 3CTC's showing of Oil On Ice some time ago, here's another
opportunity to see the film and defend the Arctic National Wildlife Refuge
from oil & gas drilling.

December 6th of this year marks the 50th anniversary of the Arctic
National Wildlife Refuge.  Minnesota is filled with activities leading up
to a large celebration!  Here are some ways you can participate locally to
protect Wild Alaska.

On Wednesday, November 17th, Alaska Wilderness League and radio station
AM950 will host Movie Night at the St. Anthony Main Theater in Minneapolis

Alaska Wilderness League and AM950 will be featuring an entertaining and
educational film "Oil on Ice." Oil on Ice is a vivid, compelling and
comprehensive documentary connecting the fate of the Arctic National
Wildlife Refuge to decisions America makes about energy policy, and
transportation choices.

Doors will be opening at 6:30p.m. and the film will begin at 6:45p.m.
Tickets will be for sale at the door and will be selling for $5.00 each.
Cash sales only. Free parking is available.  For directions to the parking

Before and after the film, Alaska Wilderness League will be doing a brief
Q & A session with attendees and answering questions regarding the movie
and the fate of the Arctic Refuge.

As we mark the 50th anniversary of the Arctic National Wildlife Refuge, we
must do everything we can to be sure that this last wild haven remains for
generations to come.

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Watching  Minnesota's Top Ten in the Morning
David Shove

Every morning the first thing I do when I wake up is turn on the TV to the
MN-Wealth channel - it's right next to one of the weather channels - to
find out how the 10 richest Minnesotans are doing. If they are better off
today than yesterday - individually and as a group - that makes my whole
day, there's a smile on my face and a spring to my step.

I glory in how happy must be Herbert, John, Cynthia, Wilbur, Mary,
Matthew, Franklin, Jules, Skylar, and Charles. Even though they don't know
me or even my name, I think of them as my best friends. I found pictures
of each. Even videos of some, which I treasure.

Things have been going very well for them the last few months - more every
day with only a few temporary declines. Ordinary people may lose, be
foreclosed upon, be outsourced, be fired, etc, which is why I don't follow
them. What a downer that would be! I love winners!

Recently Cynthia replaced Flora. Poor Flora, I thought, but I quickly got
over it. I erased all my info on Flora - too bad, and bye bye baby! I
replaced it with information I researched on Cynthia. You don't want to
dwell on misfortune. The good fortune of one overcomes the misfortune of
another, and you'd be surprised how quickly!

Other people cover the top 20 - Flora is still there, I hear - but why
waste time with second-raters? Others follow only the top 5; this is
clearly too narrow; we should all have interest and sympathy for more than
just 5 people. However, more than 10 is exhausting. Who wants to be
exhausted - especially on waking up in the morning?

I follow my 10 the rest of the day, too. MN-Wealth is always on.  Each of
the 10 has a graph of wealth, hour to hour, even minute to minute. When
they're all up, I rejoice! When one dips, I hold my breath. Way more
exciting than a soap opera! Every now and then one below goes up and the
one above goes down, until they switch! More exciting than any horse race,
let me tell you! I can only imagine the agony and the ecstasy!

One day I saw ALL of them go down, quite a bit! Horrible! I never what to
see that tragedy again! Thank god they got bailed out!

Watching the top 10 Minnesotans go up - that spells out for me the inner
spiritual meaning of the American Dream. What a great way to start the

--------11 of 12--------

The Origin of America's Intellectual Vacuum
by Chris Hedges
Published on Monday, November 15, 2010 by

The blacklisted mathematics instructor Chandler Davis, after serving six
months in the Danbury federal penitentiary for refusing to cooperate with
the House Un-American Activities Committee (HUAC), warned the universities
that ousted him and thousands of other professors that the purges would
decimate the country's intellectual life.

"You must welcome dissent; you must welcome serious, systematic,
proselytizing dissent - not only the playful, the fitful, or the eclectic;
you must value it enough, not merely to refrain from expelling it
yourselves, but to refuse to have it torn from you by outsiders," he wrote
in his 1959 essay "...From an Exile." "You must welcome dissent not in a
whisper when alone, but publicly so potential dissenters can hear you.
What potential dissenters see now is that you accept an academic world
from which we are excluded for our thoughts. This is a manifest signpost
over all your arches, telling them: Think at your peril. You must not let
it stand. You must (defying outside power; gritting your teeth as we grit
ours) take us back."

But they did not take Davis back. Davis, whom I met a few days ago in
Toronto, could not find a job after his prison sentence and left for
Canada. He has spent his career teaching mathematics at the University of
Toronto. He was one of the lucky ones. Most of the professors ousted from
universities never taught again. Radical and left-wing ideas were
effectively stamped out. The purges, most carried out internally and away
from public view, announced to everyone inside the universities that
dissent was not protected. The confrontation of ideas was killed.

"Political discourse has been impoverished since then," Davis said. "In
the 1930s it was understood by anyone who thought about it that sales
taxes were regressive. They collected more proportionately from the poor
than from the rich. Regressive taxation was bad for the economy. If only
the rich had money, that decreased economic activity. The poor had to
spend what they had and the rich could sit on it. Justice demands that we
take more from the rich so as to reduce inequality. This philosophy was
not refuted in the 1950s and it was not the target of the purge of the
1950s. But this idea, along with most ideas concerning economic justice
and people's control over the economy, was cleansed from the debate.
Certain ideas have since become unthinkable, which is in the interest of
corporations such as Goldman Sachs. The power to exclude certain ideas
serves the power of corporations. It is unfortunate that there is no
political party in the United States to run against Goldman Sachs. I am in
favor of elections, but there is no way I can vote against Goldman Sachs."

The silencing of radicals such as Davis, who had been a member of the
Communist Party, although he had left it by the time he was investigated
by HUAC, has left academics and intellectuals without the language,
vocabulary of class war and analysis to critique the ideology of
globalism, the savagery of unfettered capitalism and the ascendancy of the
corporate state. And while the turmoil of the 1960s saw discontent sweep
through student bodies with some occasional support from faculty, the
focus was largely limited to issues of identity politics - feminism,
anti-racism - and the anti-war movements. The broader calls for socialism,
the detailed Marxist critique of capitalism, the open rejection of the
sanctity of markets, remained muted or unheard. Davis argues that not only
did socialism and communism become outlaw terms, but once these were
tagged as heresies, the right wing tried to make liberal, secular and
pluralist outlaw terms as well. The result is an impoverishment of ideas
and analysis at a moment when we desperately need radical voices to make
sense of the corporate destruction of the global economy and the
ecosystem. The "centrist" liberals manage to retain a voice in mainstream
society because they pay homage to the marvels of corporate capitalism
even as it disembowels the nation and the planet.

"Repression does not target original thought," Davis noted. "It targets
already established heretical movements, which are not experimental but
codified. If it succeeds very well in punishing heresies, it may in the
next stage punish originality. And in the population, fear of uttering
such a taboo word as communism may in the next stage become general
paralysis of social thought."

It is this paralysis he watches from Toronto. It is a paralysis he
predicted. Opinions and questions regarded as possible in the 1930s are,
he mourns, now forgotten and no longer part of intellectual and political
debate. And perhaps even more egregiously the fight and struggle of
radical communists, socialists and anarchists in the 1930s against
lynching, discrimination, segregation and sexism were largely purged from
the history books. It was as if the civil rights movement led by Dr.
Martin Luther King Jr. had no antecedents in the battles of the Wobblies
as well as the socialist and communist movements.

"Even the protests that were organized entirely by Trotskyists were
written out of history," Davis noted acidly.

Those who remained in charge of American intellectual thought went on to
establish the wider "heresy of leftism" in the name of academic
objectivity. And they have succeeded. Universities stand as cowardly, mute
and silent accomplices of the corporate state, taking corporate money and
doing corporate bidding. And those with a conscience inside the walls of
the university understand that tenure and promotion require them to remain

"Not only were a number of us driven out of the American academic scene,
our questions were driven out," said Davis, who at 84 continues to work as
emeritus professor of mathematics at the University of Toronto. "Ideas
which were on the agenda a hundred years ago and sixty years ago have
dropped out of memory because they are too far from the new center of

Davis has published science fiction stories, is the editor of The
Mathematical Intelligencer and is an innovator in the theory of operators
and matrices. He is a director of Science for Peace. He also writes
poetry. His nimble mind ranges swiftly in our conversation over numerous
disciplines and he speaks with the enthusiasm and passion of a new
undergraduate. His commitment to radical politics remains fierce and
undiminished. And he believes that the loss of his voice and the voices of
thousands like him, many of whom were never members of the Communist Party
but had the courage to challenge the orthodoxy of the Cold War and
corporate capitalism, deadened intellectual and political discourse in the
United States.

During World War II Davis joined the Navy and worked on the minesweeping
research program. But by the end of the war, with the saturation bombings
of Dresden and Tokyo, as well as the dropping of the nuclear bombs on
Hiroshima and Nagasaki, he came to regret his service in the military. He
has spent most of his life working in a variety of anti-war and
anti-nuclear movements.

"In retrospect I am sorry I didn't declare myself as a conscientious
objector," he said. "Not at the beginning of the war, because if you are
ever going to use military force for anything, that was a situation in
which I would be happy to do it. I was wholehearted about that. But once I
knew about the destruction of Dresden and the other massacres of civilian
populations by the Allies, I think the ethical thing to do would have been
to declare myself a CO."

He was a "Red diaper baby." His father was a professor, union agitator and
member of the old Communist Party who was hauled in front of HUAC shortly
before his son. Davis grew up reading New Masses and moved from one city
to the next because of his father's frequent firings.

"I was raised in the movement," he said. "It wasn't a cinch I would be in
the Communist Party, but in fact I was, starting in 1943 and then
resigning soon after on instructions from the party because I was in the
military service. This was part of the coexistence of the Communist Party
with Roosevelt and the military. It would not disrupt things during the
war. When I got out of the Navy I rejoined the Communist Party, but that
lapsed in June of 1953. I never got back in touch with them. At the time I
was subpoenaed I was technically an ex-Communist, but I did not feel I had
left the movement and in some sense I never did."

Davis got his doctorate from Harvard in mathematics and seemed in the
1950s destined for a life as a professor. But the witch hunts directed
against "Reds" swiftly ended his career on the University of Michigan
faculty. He mounted a challenge to the Committee on Un-American Activities
that went to the Supreme Court. The court, ruling in 1960, three years
after Joseph McCarthy was dead, denied Davis' assertion that the committee
had violated the First Amendment protection of freedom of speech. He was
sent to prison. Davis, while incarcerated, authored a research paper that
had an acknowledgement reading: "Research supported in part by the Federal
Prison System. Opinions expressed in this paper are the author's and are
not necessarily those of the Bureau of Prisons."

Davis, who has lived in Canada longer than he lived in the United States,
said that his experience of marginalization was "good for the soul and
better for the intellect."

"Though you see the remnants of the former academic left still, though
some of us were never fired, though I return to the United States from my
exile frequently, we are gone," he said. "We did not survive as we were.
Some of us saved our skins without betraying others or ourselves. But
almost all of the targets either did crumble or were fired and
blacklisted. David Bohm and Moses Finley and Jules Dassin and many less
celebrated people were forced into exile. Most of the rest had to leave
the academic world. A few suffered suicide or other premature death. There
weren't the sort of wholesale casualties you saw in Argentina or El
Salvador, but the Red-hunt did succeed in axing a lot of those it went
after, and cowing most of the rest. We were out, and we were kept out."

"I was a scientist four years past my Ph.D. and the regents' decision was
to extinguish, it seemed, my professional career," he said. "What could
they do now to restore to me 35 years of that life? If it could be done, I
would refuse. The life I had is my life. It's not that I'm all that
pleased with what I've made of my life, yet I sincerely rejoice that I
lived it, that I don't have to be Professor X who rode out the 1950s and
1960s in his academic tenure and his virtuously anti-Communist centrism."

Chris Hedges writes a regular column for Hedges graduated
from Harvard Divinity School and was for nearly two decades a foreign
correspondent for The New York Times. He is the author of many books,
including: War Is A Force That Gives Us Meaning, What Every Person Should
Know About War, and American Fascists: The Christian Right and the War on
America.  His most recent book is Empire of Illusion: The End of Literacy
and the Triumph of Spectacle.

--------12 of 12--------

November 15, 2010
Obama's Greatest Betrayal
The Coming Sell-Out to the Super Rich and What It Means for the Rest of Us

Now that President Obama is almost celebrating his bipartisan willingness
to renew the tax cuts for the super-rich enacted under George Bush ten
years ago, it is time for Democrats to ask themselves how strongly they
are willing to oppose an administration that looks like Bush-Cheney III.
Is this what they expected by  Obama's promise to rise above partisan
politics - by ruling on behalf of Wall Street, now that it is the major
campaign backer of both parties?

It is a reflection of how one-sided today's class war has become that
Warren Buffet has quipped that "his" side is winning without a real fight
being waged. No gauntlet has been thrown down over the trial balloon that
the president and his advisor David Axelrod have sent up over the past two
weeks to extend the Bush tax cuts for the wealthiest 2 per cent for "just"
two more years. For all practical purposes the euphemism "two years" means
forever - at least, long enough to let the super-rich siphon off enough
more money to bankroll enough more Republicans to be elected to make the
tax cuts permanent.

Obama seems to be campaigning for his own defeat! Thanks largely to the
$13 trillion Wall Street bailout - while keeping the debt overhead in
place for America's "bottom 98 per cent" - this happy 2 per cent of the
population now receives an estimated three quarters (~75 per cent) of the
returns to wealth (interest, dividends, rent and capital gains). This is
nearly double what it received a generation ago. The rest of the
population is being squeezed, and foreclosures are rising.

Baudelaire quipped that the devil wins at the point where he manages
convince the world that he doesn't exist. Today's financial elites will
win the class war at the point where voters believe it doesn't exist - and
believe that Obama is trying to help them rather than shepherd them into
debt peonage as the economy settles into debt deflation.

We are dealing with shameless demagogy. The financial End Time has
arrived, but Obama's happy-talk pretends that "two years" will get us
through the current debt-induced depression. The Republican plan is to
make more Congressional and Senate gains in 2012 as Obama's former
supporters "vote with their backsides" and stay home, as they did earlier
this month. So "two years" means forever in politician-talk. Why vote for
a politician who promises "change" but is merely an exclamation mark for
the Bush-Cheney policies from Afghanistan and Iraq to Wall Street's
Democratic Leadership Council on the party's right wing? One of its
leaders, after all, was Obama's Senate mentor, Joe Lieberman.

The second pretense is that cutting taxes for the super-rich is necessary
to win Republican support for including the middle class in the tax cuts.
It is as if the Democrats never won a plurality in Congress. (One
remembers George W. Bush with his mere 50+ per cent, pushing forward his
extremist policies on the logic that: "I've got capital, and I'm using
it". What he had, of course, was Democratic Leadership Committee support.)
It's all "to create jobs," headed by employment of shipyard workers
building yachts for the nouveau riches and foreclosing on the ten million
Americans whose mortgage payments have fallen into arrears. It sounds
Keynesian - or at least, reminiscent of Thomas Robert Malthus's claim (as
lobbyist for Britain's landed aristocracy) that landlords would use their
rent income to hire footmen, carriage-makers and butlers to keep the
economy going.

It gets worse.  Obama's "Bush" tax cut is only Part I of a one-two punch
to shift taxes onto wage earners. Congressional economists estimate that
extending the tax cuts to the top 2 per cent will cost $700 to $750
billion over the next decade or so. "How are we going to go out and borrow
$700 billion?"  Obama asked Steve Kroft in his Sixty Minutes interview on
CBS last week.

It was a rhetorical question. The President has appointed a bipartisan
commission (right-wingers on both sides of the aisle) to "cure" the
federal budget deficit by cutting back social spending - to pay yet more
bailouts to the economy's financial wreckers. The National Commission on
Fiscal Responsibility and Reform might better be called the New Class War
Commission to Scale Back Social Security and Medicare Payments to Labor in
Order to Leave more Tax Revenue Available to Give Away to the Super-Rich.
A longer title than the Deficit-Reduction Commission used by media
friendlies, but sometimes it takes more words to get to the heart of

The political axiom at work is "Big fish eat little fish". There's not
enough tax money to continue swelling the fortunes of the super-rich
pretending to save enough to pay the pensions and related social support
that North American and European employees have been promised. Something
must give - and the rich have shown themselves sufficiently foresighted to
seize the initiative. For a preview of what's in line for the United
States, watch neoliberal Europe's fight against the middle and working
class in Greece, Ireland and Latvia; or better yet, Pinochet's Chile,
whose privatized Social Security accounts were quickly wiped out in the
late 1970s by the kleptocracy advised by the Chicago Boys, to whose
monetarist double-think Obama's appointee Ben Bernanke has just re-pledged
his loyalty.

What is needed to put Obama's sell-out in perspective is the pro-Wall
Street advisors he has chosen - not only Larry Summers, Tim Geithner and
Ben Bernanke, but by stacking his Deficit Reduction Commission with
outspoken advocates of cutting back Social Security, Medicare and other
social spending. Their ploy is to frighten the public with a nightmare of
$1 trillion deficit to pay retirement income over the next half century -
as if the Treasury and Fed have not just given Wall Street $13 trillion in
bailouts without blinking an eye. President Obama's $750 billion tax
giveaway to the wealthiest 2 per cent is mere icing on the cake that the
rich will be eating when the bread lines get too long.

To put matters in perspective, bear in mind that interest on the public
debt (that Reagan-Bush quadrupled and Bush-Obama redoubled) soon will
amount to $1 trillion annually. This is tribute levied on labor -
increasing the economy's cost of living and doing business - paid for
losing the fight for economic reform and replacing progressive taxation
with regressive neoliberal tax policy. As for military spending in the
Near East, Asia and other regions responsible for much of the U.S.
balance-of-payments deficit, Congress will always rise to the occasion and
defer to whatever foreign threat is conjured up requiring new armed force.

It's all junk economics. Running a budget deficit is how modern
governments inject the credit and purchasing power needed by economies to
grow. When governments run surpluses, as they did under Bill Clinton
(1993-2000), credit must be created by banks. And the problem with bank
credit is that most is lent, at interest, against collateral already in
place. The effect is to inflate real estate and stock market prices. This
creates capital gains - which the "original" 1913 U.S. income tax treated
as normal income, but which today are taxed at only 15 per cent (when they
are collected at all, which is rarely in the case of commercial real
estate). So today's tax system subsidizes the inflation of debt-leveraged
financial and real estate bubbles.

The giveaway: the Commission's position on tax deductibility for mortgage

The Obama "Regressive Tax" commission spills the beans with its proposal
to remove the tax subsidy for high housing prices financed by mortgage
debt. The proposal moves only against homeowners - "the middle class" -
not absentee owners, commercial real estate investors, corporate raiders
or other prime bank customers.

The IRS permits mortgage interest to be tax-deductible on the pretense
that it is a necessary cost of doing business. In reality it is a subsidy
for debt leveraging. This tax bias for debt rather than equity investment
(using one's own money) is largely responsible for loading down the U.S.
economy with debt. It encourages corporate raiding with junk bonds,
thereby adding interest to the cost of doing business. This subsidy for
debt leveraging also is the government's largest giveaway to the banks,
while causing the debt deflation that is locking the economy into
depression - violating every precept of the classical drive for "free
markets" in the 19th-century. (A "free market" meant freedom from
extractive rentier income, leading toward what Keynes gently called
"euthanasia of the rentier". The Obama Commission endows rentiers atop the
economy with a tax system to bolster their power, not check it - while
shrinking the economy below them.)

Table 7.11 of the National Income and Product Accounts (NIPA) reports that
total monetary interest paid in the U.S. economy amounted to $3,240
billion in 2009. Homeowners paid just under a sixth of this amount ($572
billion) on the homes they occupied.  Obama's commission estimates that
removing the tax credit on this interest would yield the Treasury $131
billion in 2012.

There is in fact a good logic for stopping this tax credit. The
mortgage-interest tax deduction does not really save homeowners money. It
is a shortsighted illusion. What the government gives to "the homeowner"
on one hand is passed on to the mortgage banker by "the market" process
that leads bidders for property to pledge the net available rental value
to the banks in order to obtain a loan to buy the home (or an office
building, or an entire industrial company, for that matter.) "Equilibrium"
is achieved at the point where whatever rental value the tax collector
relinquishes becomes available to be capitalized into bank loans.

This means that what appears at first as "helping homeowners" afford to
pay mortgages turns out merely to enable them to afford to pay more
interest to their bankers. The tax giveaway uses homebuyers as
"throughputs" to transfer tax favoritism to the banks.

It gets worse. By removing the traditional tax on real estate, state,
local and federal governments need to tax labor and industry more, by
transforming the property tax onto income and sales taxes. For banks, this
is transmuting tax revenue into gold - into interest. And as for the
home-owning middle class, it now has to pay the former property tax to the
banker as interest, and also to pay the new taxes on income and sales that
are levied to make up for the tax shift.

I support removing the tax favoritism for debt leveraging. The problem
with the Deficit Commission is that it does not extend this reform to the
rest of the economy - to the commercial real estate sector, and to the
corporate sector.

The argument is made that "The rich create jobs". After all, somebody has
to build the yachts. What is missing is the more general principle: Wealth
and income inequality destroy job creation. This is because beyond the
wealthy soon reach a limit on how much they can consume. They spend their
money buying financial securities - mainly bonds, which end up indebting
the economy. And the debt overhead is what is pushing today's economy into
deepening depression.

Since the 1980s, corporate raiders have borrowed high-interest "junk bond"
credit to take over companies and make money by stripping assets, cutting
back long-term investment, research and development, and paying out
depreciation credit to their financiers. Financially parasitized companies
use corporate income to buy back their stock to support its price - and
hence, the value of stock options that financial managers give themselves
- and borrow yet more money for stock buybacks or simply to pay out as
dividends. When the process has run its course, they threaten their work
force with bankruptcy that will wipe out its pension benefits if employees
do not agree to "downsize" their claims and replace defined-benefit plans
with defined-contribution plans (in which all that employees know is how
much they pay in each month, not what they will get in the end). By the
time this point has been reached, the financial managers have paid
themselves outsized salaries and bonuses, and cashed in their stock
options - all subsidized by the government's favorable tax treatment of
debt leveraging.

The attempted raids on McDonalds and other companies in recent years
provide object lessons in this destructive financial policy of
"shareholder activists". Yet  Obama's Deficit Reduction Commission is
restricting its removal of tax favoritism for debt leveraging only for
middle class homeowners, not for the financial sector across the board.
What makes this particularly absurd is that two thirds of homeowners do
not even itemize their deductions. The fiscal loss resulting from tax
deductibility of interest stems mainly from commercial investors.

If the argument is correct (and I think it is) that permitting interest to
be tax deductible merely "frees" more revenue to pay interest to banks -
to capitalize into yet higher loans - then why isn't this principle even
more applicable to the Donald Trumps and other absentee owners who seek
always to use "other peoples' money" rather than their own? In practice,
the "money" turns out to be bank credit whose cost to the banks is now
under 1 per cent. The financial-fiscal system is siphoning off rental
value from commercial real estate investment, increasing the price of
rental properties, commercial real estate, and indeed, industry and

Alas, the Obama administration has backed the Geithner-Bernanke policy
that "the economy" cannot recover without saving the debt overhead. The
reality is that it is the debt overhead that is destroying the economy. So
we are dealing with the irreconcilable fact that the Obama position
threatens to lower living standards from 10 per cent to 20 per cent over
the coming few years - making the United States look more like Greece,
Ireland and Latvia than what was promised in the last presidential

Something has to give politically if the economy is to change course. More
to the point, what has to give is favoritism for Wall Street at the
expense of the economy at large. What has made the U.S. economy
uncompetitive is primarily the degree to which debt service has been built
into the cost of living and doing business. Post-classical "junk
economics" treats interest and fees as payment for the "service" for
providing credit. But interest (like economic rent and monopoly price
extraction) is a transfer payment to bankers with the privilege of credit
creation. The beneficiaries of providing tax favoritism for debt are the
super-rich at the top of the economic pyramid - the 2 per cent whom
Obama's tax giveaway will benefit by over $700 billion.

If the present direction of tax "reform" is not reversed,  Obama will shed
crocodile tears for the middle class as he sponsors the Deficit Reduction
Commission's program of cutting back Social Security and revenue sharing
to save states and cities from defaulting on their pensions. One third of
U.S. real estate already is reported to have sunk into negative equity,
squeezing state and local tax collection, forcing a choice to be made
between bankruptcy, debt default, or shifting the losses onto the
shoulders of labor, off those of the wealthy creditor layer of the economy
responsible for loading it down with debt.

Critics of the Obama-Bush agenda recall how America's Gilded Age of the
late 19th century was an era of economic polarization and class war. At
that time the Democratic leader William Jennings Bryan accused Wall Street
and Eastern creditors of crucifying the American economy on a cross of
gold. Restoration of gold at its pre-Civil War price led to a financial
war in the form of debt deflation as falling prices and incomes received
by farmers and wage labor made the burden of paying their mortgage debts
heavier. The Income Tax law of 1913 sought to rectify this by only falling
on the wealthiest 1 per cent of the population - the only ones obliged to
file tax returns. Capital gains were taxed at normal rates. Most of the
tax burden therefore fell on finance, insurance and real estate (FIRE)

The vested interests have spent a century fighting back. They now see
victory within reach, by perpetuating the Bush tax cuts for the wealthiest
2 per cent, phasing out of the estate tax on wealth, the tax shift off
property onto labor income and consumer sales, and slashing public
spending on anything except more bailouts and subsidies for the emerging
financial oligarchy that has become Obama's "bipartisan" constituency.

What we need is a Futures Commission to forecast just what will the rich
do with the victory they have won. As administered by President Obama and
his designated appointees Tim Geithner and Ben Bernanke, their policy is
financially and fiscally unsustainable. Providing tax incentives for debt
leveraging - for most of the population to go into debt to the rich, whose
taxes are all but abolished - is shrinking the economy. This will lead to
even deeper financial crises, employer defaults and fiscal insolvency at
the state, local and federal levels. Future presidents will call for new
bailouts, using a strategy much like going to military war. A financial
war requires an emergency to rush through Congress, as occurred in
2008-09.  Obama's appointees are turning the U.S. economy into a Permanent
Emergency, a Perpetual Ponzi Scheme requiring injections of more and more
Quantitative Easing to to rescue "the economy" (Obama's euphemism for
creditors at the top of the economic pyramid) from being pushed into
insolvency.  Bernanke's helicopter flies only over Wall Street. It does
not drop monetary relief on the population at large.

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) and Trade, Development and
Foreign Debt: A History of Theories of Polarization v. Convergence in the
World Economy. He can be reached via his website, mh [at]


   - David Shove             shove001 [at]
   rhymes with clove         Progressive Calendar
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