Sunday, October 31, 2010

Local politics is anti-Tea: States, cities raising taxes left and right

The AP was able to provide a snapshot of how voters in several states have been embracing tax increases at the local level. The analysis looked at 39 states, representing a cross-section of the country. The review found 2,387 revenue measures in 22 states where they appeared on local primary and special-election ballots this year. Voters in 19 states – or 86 percent of those holding such elections – passed 50 percent or more of the local tax initiatives that came before them.

Now, let's recall that about 1/3 of the $862 billion stimulus bill was for state aid and unemployment benefits. (Another 1/3 went to tax cuts, and the final 1/3 went to infrastructure, health care, and other projects -- money that has only been about 70 percent spent so far.) That is, the federal gov't has provided a HUGE bailout for state budgets; and states have had discretion over how those funds are spent and how quickly.

So, the same electorate that is allegedly mad as hell about high taxes and runaway spending is voting for more taxes so that their states can keep spending on the same things that the federal gov't gave them stimulus money to pay for.

Ergo, either Americans are hypocritical idiots, or the received "lamestream" media wisdom about what's driving this November's elections is wrong.

By Robin Hindery
October 29, 2010 | AP

Politico: Corporate profits rose faster under Obama than any Prez. since 1920s

"Profits have surged 62 percent from the start of 2009 to mid-2010, according to the Commerce Department. That is faster than any other year and a half in the Fabulous '50s, the Go-Go '60s or the booms under Presidents Ronald Reagan and Bill Clinton."

Just a coinkydink, I'm sure.

By John Maggs
October 28, 2010 | Politico

Jon Stewart's rally bad for America, liberal activism

Just in case some of you think I take my marching orders from Jon Stewart, here are two very strong criticisms of his silly Rally to Restore Sanity yesterday.

First, mean-spirited, angry liberal journalist Mark Ames, who attended the rally for a short while before he had to bail, argued that the rally is emblematic of his generation's prime directives to 1) never risk looking stupid, no matter what is at stake, and 2) always preserve one's ironic detachment from events, even from oneself. That kind of cool pose is great and everything at parties, but not when the general welfare of the nation is at stake. Concluded Ames:

You see, this is why so many cool Gen-Xers and Gen-Yers were so jazzed up about going to the Stewart rally – by definition, they were guaranteed not to look stupid by going to it, because it's not really a rally. They're not putting anything on the line. They're just going to chant the equivalent of that annoying Saturday Night Live Update skit 'Really?' No generation ever looked so cool so late in their lives as my generation. We did it! We achieved our dream! We don't look as stupid as the hippies did when they were in their 40s! Woo-hoo! We still mock ourselves and we're still self-aware, but best of all, we don't look stupid by devoting ourselves to ideas or movements that other people might one day laugh at. We won! We won the least-stupid-looking-generation competition! Let's gather together in an ironic, self-aware way, and celebrate how we're not really rallying or laying anything on the line–not even now, not even when the whole fucking country is collapsing. What's our prize, Don?
Meanwhile, behind Door Number 1, the country is in two losing wars and the worst economic crisis in 80 years, behind Door Number 2, over 40 million Americans are on fucking food stamps, behind Door Number 3, millions are being land-transfered out of their property like landless peasants in a banana republic–yeah, it's bad, whatever dude, it's always been bad, nothing ever changes much, don't have a cow, deal with it….

Second, founder of the anti-war group CODEPINK, Medea Benjamin, made a similar although more focused criticism prior to the event, saying Stewart's "slacktivism" celebrates those people who are too "sane" to rally against insane wars, Wall Street bailouts, and other unjust government policies. She also noted how Stewart's Daily Show spent two hours taping her, along with an anarchist and a teabagger, lumping them all together as protesting nutjobs. As if any loud and angry protest by definition is crazy. She concluded:

So let's celebrate the people who walk the talk. Slacktivism did not end slavery, activism did. Slacktivism did not get women our rights. Activism did. Slacktivism won't end war or global warming. But activism just might.

I've said it before: my generation's children and grandchildren are not going to be proud of us because we were so cool and avoided saying stupid things; they're going to blame us for sitting on the sidelines in ironical detachment while our country went to shit. If we don't stand up and stand for something -- and that something should be liberal-progressive ideals which have saved us in the past and can do so again -- then we are irrelevant.

That said, Jon Stewart is funny. That's his job. It's not his job to organize and lead us. We are not like those atomized zombies of the Right looking for a TV preacher like Glenn Beck to tell us where to gather and what to say and do.

Wednesday, October 27, 2010

2010 Corruption Perceptions Index

Transparency International released its 2010 Corruption Perceptions Index. Nearly three quarters of the 178 countries in the index score below five, on a scale from 10 (highly clean) to 0 (highly corrupt).

The USA is tied for 22nd place with Belgium.

That goody two-shoes to the north, Canada, ranks a squeaky clean 6th.

Ukraine is in a 9-way tie for 134th place with the likes of Togo, Bangladesh, and Zimbabwe.

Russia is in a 10-way tie for 154th place with the likes of Papua New Guniea, Tajikistan, and Congo-Brazzaville.

Georgia, which has made great efforts to fight corruption, is in 68th place, just behind Italy, but less corrupt than other EU countries like Greece, Bulgaria, and Romania.


Tuesday, October 26, 2010

Tea Party predictions from top political analyst

OK, no news article this time. This is 100% moi. I'm posting one for posterity this time, making predictions about that ragtag group of modern Know-Nothings known as the Tea Parties. Or teabaggers, in the vernacular.

In 2010, a few Tea Party-identified GOP candidates will win. Then they will go on to run a government gaffe marathon and slowly be brow-beaten into "lamestream" Republicanism.

By 2012, they will be something like just a way to organize and fire up Republicans.

If Palin doesn't win in 2012 (whether she loses the nomination to Romney or some radical like Mike Pence, or loses to Obama), then by 2014, they will not exist. Oh, they'll have some web sites and stuff, but they'll stop mattering. Even today, more people's cats have web sites than Tea Party groups do.

Why will the Tea Parties fade away? Because, first of all, Republicans like winners and hate losers. (This goes along with their whole Social Darwinism thing; but in a larger sense I mean this as a compliment: Democrats take perverse pride in losing "for all the right reasons," whereas Republicans never see a good reason for losing.) If the Tea Parties are seen as a liability to conservatives winning future elections, then teabaggers themselves will scuttle the "movement."

The other reason that the Tea Parties will die out is that Republicans who win Congress (yes, I'm predicting that will happen, too) will have to take principled Tea-Party stands on issues or else compromise with dastardly lib'ruls, Obama, and RINOs. If they stand on principle in the House, then they will be irrelevant because of their small numbers. If they compromise, then the movement will become disillusioned and abandon them, and/or the movement. Tea Party candidates will morph seamlessly into old fashioned Republicans.

Of course, all you teabaggers are welcome to prove me wrong, but American political history has never been kind to third parties. Also, most teabaggers are old white people, and everybody knows old people hate change. Conservative old people hate change most of all. Hence, old white people will slip comfortably back into that warm, old, familiar pair of socks known as the GOP. -- Especially if some principled Tea Party candidate has the gall to touch the 3rd Rail of American Politics: old, white, conservative people's Social Security or Medicare.

And if you answer, "The Tea Parties were never meant to be a real party; they were meant to purify the Republican party," then I ask you to tally after the 2010 November elections how many of the 91 Republicans in the House and 33 Republicans in the Senate who voted for TARP lost their seats or failed to win the GOP's nomination, i.e. "got purified" by the Tea Parties.

Finally, most of the new health care program benefits will have kicked in by 2014, and some of those apathetic young slackers who fund the teabaggers' Big Gubument benefits with their FICA contributions might then realize that they like their health care just as much as the "Greatest Generation" and Baby Boomers love their Medicare/Medicaid. Then they might make the Tea Parties irrelevant the old fashioned way -- at the ballot box.

Friday, October 22, 2010

Germany should be USA's model of success

Germany does both capitalism and socialism better than we do. There it is in a nutshell.

Why Germany Has It So Good -- and Why America Is Going Down the Drain

Germans have six weeks of federally mandated vacation, free university tuition, and nursing care. Why the US pales in comparison.
By Terrence McNally
October 14, 2010 | AlterNet

While the bad news of the Euro crisis makes headlines in the US, we hear next to nothing about a quiet revolution in Europe. The European Union, 27 member nations with a half billion people, has become the largest, wealthiest trading bloc in the world, producing nearly a third of the world's economy -- nearly as large as the US and China combined. Europe has more Fortune 500 companies than either the US, China or Japan.

European nations spend far less than the United States for universal healthcare rated by the World Health Organization as the best in the world, even as U.S. health care is ranked 37th. Europe leads in confronting global climate change with renewable energy technologies, creating hundreds of thousands of new jobs in the process. Europe is twice as energy efficient as the US and their ecological "footprint" (the amount of the earth's capacity that a population consumes) is about half that of the United States for the same standard of living.

Unemployment in the US is widespread and becoming chronic, but when Americans have jobs, we work much longer hours than our peers in Europe. Before the recession, Americans were working 1,804 hours per year versus 1,436 hours for Germans -- the equivalent of nine extra 40-hour weeks per year.

In his new book, Were You Born on the Wrong Continent?, Thomas Geoghegan makes a strong case that European social democracies -- particularly Germany -- have some lessons and models that might make life a lot more livable. Germans have six weeks of federally mandated vacation, free university tuition, and nursing care. But you've heard the arguments for years about how those wussy Europeans can't compete in a global economy. You've heard that so many times, you might believe it. But like so many things, the media repeats endlessly, it's just not true. According to Geoghegan, "Since 2003, it's not China but Germany, that colossus of European socialism, that has either led the world in export sales or at least been tied for first. Even as we in the United States fall more deeply into the clutches of our foreign creditors -- China foremost among them -- Germany has somehow managed to create a high-wage, unionized economy without shipping all its jobs abroad or creating a massive trade deficit, or any trade deficit at all. And even as the Germans outsell the United States, they manage to take six weeks of vacation every year. They're beating us with one hand tied behind their back."

Thomas Geoghegan, a graduate of Harvard and Harvard Law School, is a labor lawyer with Despres, Schwartz and Geoghegan in Chicago. He has been a staff writer and contributing writer to The New Republic, and his work has appeared in many other journals. Geoghagen ran unsuccessfully in the Democratic Congressional primary to succeed Rahm Emanuel, and is the author of six books including Whose Side Are You on, The Secret Lives of Citizens, and, most recently, Were You Born on the Wrong Continent?

Terrence McNally: You start your book Were you Born on the Wrong Continent? with a personal experience, a stopover in Zurich. Could you talk about that?

Thomas Geoghegan: In 1993 I got it in my head, for reasons too long to tell, to go see a woman I'd met who happened to be in Moscow. Because of the coup in October 1993, all the flights to Moscow were canceled, and I ended up in Zurich. I had not been in Western Europe for years, and, while I was waiting for clearance, I happened to walk around the streets and I was just thunderstruck by how nice it was. Every bookstore seemed like a boutique and even the train station was like a perfumery. And I thought, how did this part of the world get so wealthy without my knowing it? That was the epiphany that led me to take a bigger and bigger interest in how Europeans live, and to ask ultimately, were you born in the wrong continent?

McNally: In talking about that walk, you point out that if you don't have much poverty, life is better for everybody. Not just better for the poor, but for everybody.

Geoghegan: You have more of the city available to you. [My hometown] Chicago's fantastic, but there's a huge swath of it that you don't particularly want to go to -- not because of any criminal danger, but just because it's run down. Largely white ethnic neighborhoods on the northwest side are unattractive and dilapidated. Plus there are huge parts of the city that are downright dangerous. Europe isn't like that. It's the argument for social democracy: more equality and less poverty and disorder.

McNally: In their book, The Spirit Level, Richard Wilkinson and Kate Picket point out that on average everything is worse for everybody in the countries with the most unequal distribution of wealth.

Geoghegan: As a labor lawyer, I can see that janitors and truck drivers I represent would be better off in a social democracy. I make the argument in the book that even people who are doing relatively well would be literally, materially better off in a more egalitarian social democracy. Some of the public goods that are available there for free- - university education, for example, are skewed towards the people who are relatively at the top.

McNally: Someone who doesn't go to university doesn't get that benefit, but a family who sends two or three kids gets an enormous benefit.

Geoghegan: Of course, low income sectors do better too. Nonetheless, it could be said, there's a growing amount of poverty in Germany. Especially during the 1990's and the early part of the last decade, there was a scaling back of social democracy. For a while the bubble of casino capitalism in the US and the UK led to an allocation of capital into the US and UK looking for hot returns. Since the collapse of casino type capitalism in 2008, money has shifted back where it should have been in the first place, to the virtuous economies of the world like Germany, based in manufacturing.

McNally: I recall Kevin Phillips pointing out in his book Bad Money that year after year the US shifted more and more of our money and our best and brightest young people into finance. When the casino seemed to be paying off, other countries also shifted in our direction, but when it broke, we didn't have the manufacturing and export base a country like Germany has to fall back on.

Geoghegan: The Germans had a certain amount of schadenfreude about the whole thing. They're basically a very pessimistic people by temperament, and when they saw a world debacle that they weren't responsible for, they actually became a little more upbeat.

They had what they call a good recession. The German government was very quick off the mark, and immediately put in place what they called kurzabeit. Through this short work-week program, the government paid people to stay on the job when they otherwise might have been let go.

We got ahead of the curve," one German labor minister said, "employment didn't drop here the way it did in the US." When the economy recovered, there was no incentive to hold off hiring because the people were already on the job. Their unemployment is now significantly lower than ours and the economy is booming.

McNally: When asked why Obama didn't pursue a similar policy to stem the economic bleeding, Larry Summers dismissed the idea, saying the White House wanted to create new jobs not preserve old ones.

Geoghegan: A pretty lame answer.

Terrence McNally: And an arrogant one. Good for you, Larry. What about the guy who lost his job? And his family and his kids?

Geoghegan: Larry Summers is the villain of my book. He was an architect of deregulation, and was doing a war dance back in the late 1990's about how the US model was triumphant over all. Now, the shoe's on the other foot.

McNally: What's the status of the crisis in Europe right now? The EU includes not only virtuous, productive economies like Germany, but also others not nearly so.

Geoghegan: Those less virtuous economies were the so-called "new Europe" that Donald Rumsfeld was touting. People in the countries that are in trouble now economically were the ones willing to go to Iraq -- and there is a connection. These are the countries that were much more inclined to go the American route, going into debt heavily, using housing speculation as the engine of the economy, and opening their economies big time to global bank debt and finance.

Goldman Sachs poured tons of money into Greece, and other New York, London and German banks poured money into Spain. None of the bubbles occurred in Germany and in the "old Europe" that Donald Rumsfeld wrote off. Part of Europe is in trouble to the extent -- and only to the extent -- that it's involved in the American model. Those countries most resistant to the American model are doing fine.

By the way, why was Goldman Sachs willing to lend money to weak economies like Greece? Because Greece was in the EU. Because Spain was in the EU. These countries would never have gotten all this money from US banks. And what is so important about the EU? At the end of the day the Germans with their trade surplus are able to pay -- and in fact that's what has happened.

McNally: How is the relationship unfolding between Germany and the economies it is bailing out?

Geoghegan: It's working out pretty well. The Germans are doing even better because the Euro fell -- it was overvalued to begin with -- and that made German goods more competitive. After the great debt crisis, the Euro became relatively cheaper, and that made Germany more profitable as an export country. Greece didn't collapse, partly because the Germans bailed it out and partly because there was belt tightening in Greece and plenty of tourists still coming in.

McNally: By the way, Greece represents only 2% of the EU's total GDP, whereas California represents 14% of the US. Yet when California reached out to the federal government for similar help, it didn't get it.

Geoghegan: You see a story in the New York Times every six weeks -- ever since I graduated from college in 1971 -- about how Europe is going to collapse. They come out like clockwork.

McNally: I pulled one of those Times articles in May when the Greek crisis was hot. The headline: "Europeans Fear Crisis Threatens Liberal Benefits." But you point out that when a country like Germany takes something away from the safety net, they usually balance it with a benefit.

Geoghegan: They cut back on holiday and they add a nursing home benefit. But the US press always focuses on the cutback. One of the reasons I wrote this book was to show that there's a leadership class over there that is very clever about these things. I don't mean in a spurious, tricky way, but actually thinking, "What do we have to cut back now so that we can go forward in the future?"

To quote a wonderful line from the Lampedusa novel, The Leopard: as the old order is collapsing, the Sicilian aristocrat says to his young prince, "We have to change so that everything remains the same." How do you change social democracy so that you preserve it, and maybe even create an opportunity to expand it in a year or two when the wheel of fortune turns again?

McNally: Let's talk about some of the contrasts in the book between our culture and theirs. People here work nine more weeks per year.

Geoghegan: In the US, the most driven work 2,300 hours a year, and people a notch or two below the most driven are working 1,800 hours a year. That doesn't count hours that are off the clock.

McNally: Why do we work so hard? You say one of the reasons is because we don't have unions or job security. People are afraid that if they don't work weekends and overtime, if they don't skip their kid's soccer game, they'll get laid off.

Geoghegan: Nobody knows who's going to be laid off next. It's all arbitrary, Chainsaw Al could knock down your cubicle door at any time. So everyone has an incentive to stay five minutes longer than everyone else, and that creates anarchy. According to labor economists Richard Freeman at Harvard and Linda Bell at Haverford, in the US there's nobody to tell you to go home.

McNally: Given the fact that we work more, are we more productive?

Geoghegan: If you consider productivity as output per hour, working longer probably decreases it. My friend Isabelle came to the US to attend grad school at Northwestern, and was upset when she discovered there were no holidays here. In the middle of the year, I found her very stressed, and I figured out what was happening: she was working American hours with German efficiency. When you look at the fact that Germans rank at the top of the world in terms of export sales -- on a par with the Chinese who work till they drop -- you realize they must be doing something that makes them more efficient.

Leisure time also has material value. The fact that Americans work longer and longer hours increases GDP per capita, but it doesn't necessarily raise our standard of living.

McNally: Americans don't know how things actually work in European countries. For many people the fact that Germany is neck and neck with China as the number one exporting country -- give or take the rise and fall of currency - must be mind blowing. Even progressives in America don't look overseas for models that work. I find it almost pathological that our exceptionalism infects even those who assume they don't believe in it.

Geoghegan: I have a friend who's just come back from being a journalist for a long time in France and now works as a political reporter in Washington, DC. She recently told me, "It's become impossible for me to stay in a carpool with other women journalists because all I do is say to them, 'Oh, it's so much better in France This is so much better If this happened we wouldn't' She said, "They're just so sick of me, they don't want to hear anything more about France."

In some ways it's understandable and in some ways it's tragic. Another journalist friend of mine told me, "The three most deadly words in American journalism are 'in Sweden they.' People just won't keep going from there, and why is that? These are economies that have developed a level of sophistication and look like the US in so many ways. People say, "Europe's becoming just like America," but it's not.

McNally: Let's make a quick comparison of GDP. The problem with GDP is that it has only an addition side, it doesn't have a subtraction side. So an auto accident increases GDP; crime increases GDP.

Geoghegan: Waste and fraud and gambling; Katrina increases GDP; urban sprawl especially increases GDP. Hours stuck in traffic increase GDP.

McNally: plus the fact that we've monetized so many things that we used to do for ourselves or for our families.

Geoghegan: You're shelling out $50,000 in tuition for NYU law school and your counterpart in Europe is getting it for free. How pathetic for the poor European adding nothing to GDP. In America we're increasing GDP, but dragging down people's standard of living.

It's a very perverse system of accounting. You say it's all addition and no subtraction, but it's not even all addition. Nothing increases your well-being or your material standard of living as much as leisure time. Among the untouchables in India, of course, that's absolutely not the case; leisure is a nightmare, unemployment is a nightmare. But for many, a loss of leisure is a loss of material value.

For example, leisure to go to a free concert at Millennium Park in Chicago. It's a glorious experience. People in Europe are gaga about it, because it's the one thing in America that seems to them the most European -- wonderful orchestras, pop bands, jazz bands, playing right in the middle of the city; gorgeous lawns; people picnicking, etc. -- and it's all free. It's so un-American, there's no money going out the door. It makes a mark on your life but you can't turn it into a sum of dollars, so it doesn't mean anything -- even though of course it means everything.

McNally: You say the three building blocks of German social democracy are the works councils, the election of boards of directors by workers as well as by hedge fund managers, and the regional wage setting institutions.

Geoghegan: First: work councils. The analogy I used in the book is fictitious: Imagine you elect a works council from among the employees at the Barnes & Noble bookstore where you work. They don't bargain for wages, that's done by the unions; but they have all sorts of rights that relate to working time, who gets laid off, even whether the store is going to close or not. They can go in and look at the books. The management has to enter into agreements. The works council can't dictate, but they have enormous influence over what working hours will be, who's going to work when and how.

Co-determined boards are mandated at German companies with 2,000 employees or more, the global companies that are beating us, although you can have them in other situations. These are maybe more like super boards that don't do as much day-to-day managing as our boards of directors do. It consists one half of people elected by and from the workers, and one half elected by the shareholders.

The chairman of the board is selected by the shareholders and has a double vote so that, if there's a tie between the shareholders and the employees, the shareholders win. But it creates a lot of potential influence over how the debate goes.

McNally: But you also say that the shoe is on the other foot when it comes to choosing the CEO, correct?

Geoghegan: If the shareholders are divided on who should be the next CEO, the clerks get to pick the king.

McNally: In contract negotiations over the last 10, 15, 20 years, American workers have been giving back things, agreeing to two tiers, lowering their pension guarantees. I've never heard of any of them trading a concession for the right to elect members to the board.

Geoghegan: The UAW had somebody on the board once.

McNally: Management can't even say it won't work because Germany's beating our pants in manufacturing, and the codetermined board is also spreading elsewhere, right?

Geoghegan: The German model has made inroads on the US model in other European countries.

McNally: You quote the German labor minister saying, "Our biggest export now is co-determination". Now, third: regional or sector wage settling.

Geoghegan: It's much reduced these days, but they still have some version of regional wage bargaining setting standards that everybody has to comply with. That used to be true here -- to a lesser extent than in Germany -- but it's disappeared.

McNally: Are you talking about a situation where you would negotiate with one of the big three automakers and the others would basically get the same deal?

Geoghegan: I was thinking more of the United Mineworkers negotiating a contract with multiple employer associations to produce a national agreement that covered every employer. That was true in the coal industry and with the Teamsters in the trucking industry.

McNally: Agreements across a whole industry create a sense of transparency, right?

Geoghegan: People know what their wages are. East Germany was a factor in the breakdown. You couldn't really have the same labor costs and labor standards that you had in West Germany because the economy wasn't at the same stage of development.

McNally: If you compare your quality of life and the prospective quality of life for your children with the German quality of life, things are only getting worse. To cite just one example, economist Robert Frank talks about the fact that American families end up moving into neighborhoods they can't afford because that's where the good schools are, and I'm sure this played some role in the mortgage collapse.

Geoghegan: We'd be much more competitive globally if Americans had six weeks off, and had a chance to go and see what people are doing in other countries. We'd come back much more sophisticated about them and probably have better ideas about how to sell things to them.

McNally: You point out that as globalization grew, the US chose to compete on the basis of cheap labor by outsourcing. We kept the marketing and executives here and moved the manufacturing elsewhere. We've been playing that game for 20-30 years now. Germany chose to play the opposite game.

Geoghegan: 30 years later the Germans are making money off of China, and China is making big time money off of us. One thing I really try to get across in the book: Many Americans think that we've got a trade deficit because we can't compete with China. We've got a trade deficit because we can't compete with Germany in selling things to China. Until people wake up and look at the kinds of things that the Germans are doing to keep their manufacturing base, we're going to continue to run deficits which leave us in the clutches of foreign creditors and compromise our autonomy as a country.

McNally: This is something that the right wing should be up in arms about.

Geoghegan: Absolutely. And they're clueless. They are mortgaging this country's future and they're too stupid to realize it.

McNally: This seems like a good point to turn to "10 Things the Dems Could Do To Win," a cover story I wrote for a recent issue of The Nation.

Geoghegan: The Democrats have to do something for their base, keep it simple and make it universal. Unlike the healthcare bill which was perceived as a handout for "them", the uninsured, many of them in red states. Democrats should focus on things that either give a direct benefit to people or give them a sense of power.

For example, increase Social Security so that it's a real public pension -- push Social Security benefits up to 50% of people's income. Of course we can't do this overnight, but we can set it as a serious goal.

McNally: Social security in the US is 39% at this point. In Germany it was 67%, but it's dropped?

Geoghegan: To the low fifties. But people have tons of money in the bank over there, there's a high savings rate and, at least in the unions, they also have private pensions that work much better than in the US.

McNally: They also don't graduate college with thousands of dollars of debt that many will carry for the rest of their lives.

Geoghegan: They do have a demographic crisis that they're going to have to get through, but they've protected the system.

McNally: Raising social security to 50% of working income means that when you go on to social security you'll get half of what you were getting when you were working. Currently you get less than two-fifths.

Geoghegan: The top 20 developed countries have an average rate of something like 60%, so we can do this.

My second proposal is simply the most effective way to move ultimately to a single payer healthcare system, which I think we have to do. I would say that even if I didn't think single payer were a better system. You have to have one consistent system of payment to get control of healthcare costs. All the European countries do. It doesn't have to be single payer, but it has to be a consistent system. You can't have a mix of private market and single payer.

Let's lower Medicare's eligibility to 55. What brought back GM and Chrysler? The government came in and took away their retiree healthcare costs. We've got to lower labor costs not by bringing down wages -- that would be a disaster, but by having the government assume wage labor costs that are making us less competitive. People of 55-65 will all vote for you because it will change their lives.

McNally: Folks like Alan Simpson and Pete Peterson are going to say, "Wait a minute, you're going in exactly the wrong direction."

Geoghegan: Social security basically is solvent now even at its current level. And I have ways of paying for it.

First, if you brought back the estate tax and dedicated the proceeds to the Social Security trust--as Robert Ball, former Social Security commissioner, once proposed. Second, lift the cap on the Social Security tax -- it's at $90,000 now -- so it applies to all incomes. After all, Social Security is for everyone. Third, if you did things like eliminate the corporate debt protection for debt that is used in leverage buyouts and non-productive uses right now, you could generate the financial reserve that could pay for this. Finally, I do think people should pay a little more for their Social Security because they're going to get a better deal.

All of these things have two purposes, to do something directly beneficial to the base now, and to do something that reduces the size and influence of the financial sector and increases the viability of manufacturing.

Lowering the age for Medicare, for example, allows employers to substantially lower their labor costs for their most expensive workers. It's not just to make them competitive, but it's also to induce investment into manufacturing which is right now inhibited by the uncertainty of healthcare costs. Ultimately the goal of all of this is to get the US out of debt.

The debt issue ought to be the Democrat's issue not the Republicans. The real debt issue is our external trade deficit. We either have consumers go into debt to make the books balance at the end of the day as we did during the Bush era, or we have the federal government do it when consumers cut back. We don't earn out way in the world, and until we do, we're going to be running either large consumer debts which lead to private financial panics, or federal debt which could lead to a sovereign default. We've got to get out of that box, and the only way to do it is to put in measures that make our economy more competitive globally.

McNally: You're saying that Obama and the Democratic party could transform the issue of debts and deficits by offering solutions that are not just about paying today's bill, but about restructuring our ability to pay the bill in the future.

Geoghegan: We will never get out of debt until we confront our inability to pay our way in the world. Somebody is going to be in debt, whether it's me the taxpayer paying off the federal deficit or me the consumer paying off my Visa card. It doesn't make a whole lot of difference at the end of the day. The Democrats ought to present themselves as the party that has a plan to get the country out of debt.

McNally: You also recommend a usury cap on credit cards.

Geoghegan: You've got to get returns down in the financial sectors and returns up in manufacturing sectors. That's the key. And proposing that will split the business community in this country in a very healthy way. The Democrats can be the party of the manufacturers, even if it's at the expense of Wall Street. For years, the Democrats have slipped the other way. People perceive that and they're frustrated by it.

McNally: The financial sector currently funds both parties. Republicans get to be true to their convictions, while Democrats end up negotiating with themselves. Though they may have some progressive leanings, their funders pull them in the other direction.

Geoghegan: Even progressive Democrats don't have the sophistication of their counterparts on the left in France and Germany in terms of understanding how important it is not to run up a national debt. Here we march against Mexico and put up tariff walls. They don't do that in Europe, they're not that unsophisticated.

McNally: Let me finish with a quote of yours that really struck me: Without an industrial base a democracy dies.

Geoghegan: My own favorite ending line would be: Countries like Germany do both capitalism and socialism better than we do.

Thursday, October 21, 2010

Moore: Private insurers hate competition

The flip side or irony of local monopolies is that they reflect the economic realities of health insurance: to keep their costs down and remain profitable, an insurer needs lots of people -- including lots of healthy people -- in its insurance pool. The economics of health insurance point us toward universal coverage and a single payer. But big private health insurers use their immense lobbying power to keep their local monopolies so they can keep raising prices on us in the name of the "free market."

October 21, 2010 | AlterNet

I have a rule of thumb that's served me well my whole life: whenever corporate executives begin talking about how they support "free markets" and "competition," check to see if you still have your wallet.

That's because no one -- not Karl Marx, not Fidel Castro, not your niece who owns the only lemonade stand on the block -- hates competition more than corporations. The whole goal of a corporation is to crush all the competition. When corporate executives start pushing for "free market policies," what they mean is a government that lets them become a monopoly.

Don't believe me? Well, count how many corporate CEOs (and Republican politicians) stand up and cheer for the Obama administration this week:

The Justice Department sued Blue Cross Blue Shield of Michigan on Monday, asserting that the company, the state's dominant health insurer, had violated antitrust laws and secured a huge competitive advantage by forcing hospitals to charge higher prices to Blue Cross's rivals.

The civil case appears to have broad implications because many local insurance markets, like those in Michigan, are highly concentrated, and Blue Cross and Blue Shield plans often have the largest shares of those markets. [...]

Blue Cross and Blue Shield, like most insurers, contracts with hospitals, doctors, labs and other providers for services. The lawsuit took direct aim at contract clauses stipulating that no insurance companies could obtain better rates from the providers than Blue Cross. Some of these contract provisions, known as "most favored nation" clauses, require hospitals to charge other insurers a specified percentage more than they charge Blue Cross -- in some cases, 30 to 40 percent more, the lawsuit said.
As the New York Times reports, Blue Cross Blue Shield insures 60% of Michiganders -- including me and everyone in my office. They have nine times more customers than the state's next largest insurer.

And they're just doing what businesses do, even non-profits like Blue Shield: use all their power to eliminate the competition. In fact, if Daniel J. Loepp, Blue Cross's CEO, didn't do that, he'd be kicked out and someone who did would replace him. (I'd hate to see that happen -- he always seems like a real gentlemen when he writes every year to tell us they're hiking our premiums 27%.)

So this is the future we face with health care in the U.S., even with Obama's new bill: endless battles between the federal government and health insurance corporations as the companies use all their ingenuity to give us fewer choices and higher least until we get President Palin, who'll stop fighting the biggest insurance companies and start helping them kill their competition. Which she'll do while giving tons of speeches about the need for competition and free markets.

Is there any solution for Michigan? Yes, and it's just across the river in Canada: they have single-payer health insurance. Of course, at this point we pretty much do too. The difference is that our single-payer is run by a corporation. Theirs is run by the government -- or to put it another way, democratically.

P.S. Blue Cross Blue Shield is fantastic at making secret agreements with hospitals, but not so great at actually getting people health care: the U.S. is now ranked 49th worldwide in life expectancy. Look out, French Polynesia, we're coming for you next!

Monday, October 18, 2010

Taibbi: KY, Rand Paul foretell Tea Party's end

Everything on the ground, one yard at a time. That's a masterful metaphor from Mr. Taibbi, speaking from my own experience arguing with teabaggers. With them you have to re-argue not only U.S. history but world history and a good bit of basic macroeconomics and political philosophy before you can actually start debating current events. It's just too hard.

By Matt Taibbi
September 28, 2010 | Rolling Stone

It's taken three trips to Kentucky, but I'm finally getting my Tea Party epiphany exactly where you'd expect: at a Sarah Palin rally. The red-hot mama of American exceptionalism has flown in to speak at something called the National Quartet Convention in Louisville, a gospel-music hoedown in a giant convention center filled with thousands of elderly white Southerners. Palin — who earlier this morning held a closed-door fundraiser for Rand Paul, the Tea Party champion running for the U.S. Senate — is railing against a GOP establishment that has just seen Tea Partiers oust entrenched Republican hacks in Delaware and New York. The dingbat revolution, it seems, is nigh.

"We're shaking up the good ol' boys," Palin chortles, to the best applause her aging crowd can muster. She then issues an oft-repeated warning (her speeches are usually a tired succession of half-coherent one-liners dumped on ravenous audiences like chum to sharks) to Republican insiders who underestimated the power of the Tea Party Death Star. "Buck up," she says, "or stay in the truck."

Stay in what truck? I wonder. What the hell does that even mean?

Scanning the thousands of hopped-up faces in the crowd, I am immediately struck by two things. One is that there isn't a single black person here. The other is the truly awesome quantity of medical hardware: Seemingly every third person in the place is sucking oxygen from a tank or propping their giant atrophied glutes on motorized wheelchair-scooters. As Palin launches into her Ronald Reagan impression — "Government's not the solution! Government's the problem!" — the person sitting next to me leans over and explains.

"The scooters are because of Medicare," he whispers helpfully. "They have these commercials down here: 'You won't even have to pay for your scooter! Medicare will pay!' Practically everyone in Kentucky has one."

A hall full of elderly white people in Medicare-paid scooters, railing against government spending and imagining themselves revolutionaries as they cheer on the vice-presidential puppet hand-picked by the GOP establishment. If there exists a better snapshot of everything the Tea Party represents, I can't imagine it.

After Palin wraps up, I race to the parking lot in search of departing Medicare-motor-scooter conservatives. I come upon an elderly couple, Janice and David Wheelock, who are fairly itching to share their views.

"I'm anti-spending and anti-government," crows David, as scooter-bound Janice looks on. "The welfare state is out of control."

"OK," I say. "And what do you do for a living?"

"Me?" he says proudly. "Oh, I'm a property appraiser. Have been my whole life."

I frown. "Are either of you on Medicare?"

Silence: Then Janice, a nice enough woman, it seems, slowly raises her hand, offering a faint smile, as if to say, You got me!

"Let me get this straight," I say to David. "You've been picking up a check from the government for decades, as a tax assessor, and your wife is on Medicare. How can you complain about the welfare state?"

"Well," he says, "there's a lot of people on welfare who don't deserve it. Too many people are living off the government."

"But," I protest, "you live off the government. And have been your whole life!"

"Yeah," he says, "but I don't make very much." Vast forests have already been sacrificed to the public debate about the Tea Party: what it is, what it means, where it's going. But after lengthy study of the phenomenon, I've concluded that the whole miserable narrative boils down to one stark fact: They're full of shit. All of them. At the voter level, the Tea Party is a movement that purports to be furious about government spending — only the reality is that the vast majority of its members are former Bush supporters who yawned through two terms of record deficits and spent the past two electoral cycles frothing not about spending but about John Kerry's medals and Barack Obama's Sixties associations. The average Tea Partier is sincerely against government spending — with the exception of the money spent on them. In fact, their lack of embarrassment when it comes to collecting government largesse is key to understanding what this movement is all about — and nowhere do we see that dynamic as clearly as here in Kentucky, where Rand Paul is barreling toward the Senate with the aid of conservative icons like Palin.

Early in his campaign, Dr. Paul, the son of the uncompromising libertarian hero Ron Paul, denounced Medicare as "socialized medicine." But this spring, when confronted with the idea of reducing Medicare payments to doctors like himself — half of his patients are on Medicare — he balked. This candidate, a man ostensibly so against government power in all its forms that he wants to gut the Americans With Disabilities Act and abolish the departments of Education and Energy, was unwilling to reduce his own government compensation, for a very logical reason. "Physicians," he said, "should be allowed to make a comfortable living."

Those of us who might have expected Paul's purist followers to abandon him in droves have been disappointed; Paul is now the clear favorite to win in November. Ha, ha, you thought we actually gave a shit about spending, joke's on you. That's because the Tea Party doesn't really care about issues — it's about something deep down and psychological, something that can't be answered by political compromise or fundamental changes in policy. At root, the Tea Party is nothing more than a them-versus-us thing. They know who they are, and they know who we are ("radical leftists" is the term they prefer), and they're coming for us on Election Day, no matter what we do — and, it would seem, no matter what their own leaders like Rand Paul do.

In the Tea Party narrative, victory at the polls means a new American revolution, one that will "take our country back" from everyone they disapprove of. But what they don't realize is, there's a catch: This is America, and we have an entrenched oligarchical system in place that insulates us all from any meaningful political change. The Tea Party today is being pitched in the media as this great threat to the GOP; in reality, the Tea Party is the GOP. What few elements of the movement aren't yet under the control of the Republican Party soon will be, and even if a few genuine Tea Party candidates sneak through, it's only a matter of time before the uprising as a whole gets castrated, just like every grass-roots movement does in this country. Its leaders will be bought off and sucked into the two-party bureaucracy, where its platform will be whittled down until the only things left are those that the GOP's campaign contributors want anyway: top-bracket tax breaks, free trade and financial deregulation.

The rest of it — the sweeping cuts to federal spending, the clampdown on bailouts, the rollback of Roe v. Wade — will die on the vine as one Tea Party leader after another gets seduced by the Republican Party and retrained for the revolutionary cause of voting down taxes for Goldman Sachs executives. It's all on display here in Kentucky, the unofficial capital of the Tea Party movement, where, ha, ha, the joke turns out to be on them: Rand Paul, their hero, is a fake.

The original Tea Party was launched by a real opponent of the political establishment — Rand Paul's father, Ron, whose grass-roots rallies for his 2008 presidential run were called by that name. The elder Paul will object to this characterization, but what he represents is something of a sacred role in American culture: the principled crackpot. He's a libertarian, but he means it. Sure, he takes typical, if exaggerated, Republican stances against taxes and regulation, but he also opposes federal drug laws ("The War on Drugs is totally out of control" and "All drugs should be decriminalized"), Bush's interventionist wars in the Middle East ("We cannot spread our greatness and our goodness through the barrel of a gun") and the Patriot Act; he even called for legalized prostitution and online gambling.

Paul had a surprisingly good showing as a fringe candidate in 2008, and he may run again, but he'll never get any further than the million primary votes he got last time for one simple reason, which happens to be the same reason many campaign-trail reporters like me liked him: He's honest. An anti- war, pro-legalization Republican won't ever play in Peoria, which is why in 2008 Paul's supporters were literally outside the tent at most GOP events, their candidate pissed on by a party hierarchy that preferred Wall Street-friendly phonies like Mitt Romney and John McCain. Paul returned the favor, blasting both parties as indistinguishable "Republicrats" in his presciently titled book, The Revolution. The pre-Obama "Tea Parties" were therefore peopled by young anti-war types and libertarian intellectuals who were as turned off by George W. Bush and Karl Rove as they were by liberals and Democrats.

The failure of the Republican Party to invite the elder Paul into the tent of power did not mean, however, that it didn't see the utility of borrowing his insurgent rhetoric and parts of his platform for Tea Party 2.0. This second-generation Tea Party came into being a month after Barack Obama moved into the Oval Office, when CNBC windbag Rick Santelli went on the air to denounce one of Obama's bailout programs and called for "tea parties" to protest. The impetus for Santelli's rant wasn't the billions in taxpayer money being spent to prop up the bad mortgage debts and unsecured derivatives losses of irresponsible investors like Goldman Sachs and AIG — massive government bailouts supported, incidentally, by Sarah Palin and many other prominent Republicans. No, what had Santelli all worked up was Obama's "Homeowner Affordability and Stability Plan," a $75 billion program less than a hundredth the size of all the bank bailouts. This was one of the few bailout programs designed to directly benefit individual victims of the financial crisis; the money went to homeowners, many of whom were minorities, who were close to foreclosure. While the big bank bailouts may have been incomprehensible to ordinary voters, here was something that Middle America had no problem grasping: The financial crisis was caused by those lazy minorities next door who bought houses they couldn't afford — and now the government was going to bail them out.

"How many of you people want to pay your neighbor's mortgage that has an extra bathroom and can't pay their bills? Raise your hand!" Santelli roared in a broadcast from the floor of the Chicago Board of Trade. Why, he later asked, doesn't America reward people who "carry the water instead of drink the water?"

Suddenly, tens of thousands of Republicans who had been conspicuously silent during George Bush's gargantuan spending on behalf of defense contractors and hedge-fund gazillionaires showed up at Tea Party rallies across the nation, declaring themselves fed up with wasteful government spending. From the outset, the events were organized and financed by the conservative wing of the Republican Party, which was quietly working to co-opt the new movement and deploy it to the GOP's advantage. Taking the lead was former House majority leader Dick Armey, who as chair of a group called FreedomWorks helped coordinate Tea Party rallies across the country. A succession of Republican Party insiders and money guys make up the guts of FreedomWorks: Its key members include billionaire turd Steve Forbes and former Republican National Committee senior economist Matt Kibbe.

Prior to the Tea Party phenomenon, FreedomWorks was basically just an AstroTurfing-lobbying outfit whose earlier work included taking money from Verizon to oppose telecommunications regulation. Now the organization's sights were set much higher: In the wake of a monstrous economic crash caused by grotesque abuses in unregulated areas of the financial-services industry, FreedomWorks — which took money from companies like mortgage lender MetLife — had the opportunity to persuade millions of ordinary Americans to take up arms against, among other things, Wall Street reform.

Joining them in the fight was another group, Americans for Prosperity, which was funded in part by the billionaire David Koch, whose Koch Industries is the second-largest privately held company in America. In addition to dealing in plastics, chemicals and petroleum, Koch has direct interests in commodities trading and financial services. He also has a major stake in pushing for deregulation, as his companies have been fined multiple times by the government, including a 1999 case in which Koch Industries was held to have stolen oil from federal lands, lying about oil purchases some 24,000 times.

So how does a group of billionaire businessmen and corporations get a bunch of broke Middle American white people to lobby for lower taxes for the rich and deregulation of Wall Street? That turns out to be easy. Beneath the surface, the Tea Party is little more than a weird and disorderly mob, a federation of distinct and often competing strains of conservatism that have been unable to coalesce around a leader of their own choosing. Its rallies include not only hardcore libertarians left over from the original Ron Paul "Tea Parties," but gun-rights advocates, fundamentalist Christians, pseudomilitia types like the Oath Keepers (a group of law- enforcement and military professionals who have vowed to disobey "unconstitutional" orders) and mainstream Republicans who have simply lost faith in their party. It's a mistake to cast the Tea Party as anything like a unified, cohesive movement — which makes them easy prey for the very people they should be aiming their pitchforks at. A loose definition of the Tea Party might be millions of pissed-off white people sent chasing after Mexicans on Medicaid by the handful of banks and investment firms who advertise on Fox and CNBC.

The individuals in the Tea Party may come from very different walks of life, but most of them have a few things in common. After nearly a year of talking with Tea Party members from Nevada to New Jersey, I can count on one hand the key elements I expect to hear in nearly every interview. One: Every single one of them was that exceptional Republican who did protest the spending in the Bush years, and not one of them is the hypocrite who only took to the streets when a black Democratic president launched an emergency stimulus program. ("Not me — I was protesting!" is a common exclamation.) Two: Each and every one of them is the only person in America who has ever read the Constitution or watched Schoolhouse Rock. (Here they have guidance from Armey, who explains that the problem with "people who do not cherish America the way we do" is that "they did not read the Federalist Papers.") Three: They are all furious at the implication that race is a factor in their political views — despite the fact that they blame the financial crisis on poor black homeowners, spend months on end engrossed by reports about how the New Black Panthers want to kill "cracker babies," support politicians who think the Civil Rights Act of 1964 was an overreach of government power, tried to enact South African-style immigration laws in Arizona and obsess over Charlie Rangel, ACORN and Barack Obama's birth certificate. Four: In fact, some of their best friends are black! (Reporters in Kentucky invented a game called "White Male Liberty Patriot Bingo," checking off a box every time a Tea Partier mentions a black friend.) And five: Everyone who disagrees with them is a radical leftist who hates America.

It would be inaccurate to say the Tea Partiers are racists. What they are, in truth, are narcissists. They're completely blind to how offensive the very nature of their rhetoric is to the rest of the country. I'm an ordinary middle-aged guy who pays taxes and lives in the suburbs with his wife and dog — and I'm a radical communist? I don't love my country? I'm a redcoat? Fuck you! These are the kinds of thoughts that go through your head as you listen to Tea Partiers expound at awesome length upon their cultural victimhood, surrounded as they are by America-haters like you and me or, in the case of foreign-born president Barack Obama, people who are literally not Americans in the way they are.

It's not like the Tea Partiers hate black people. It's just that they're shockingly willing to believe the appalling horseshit fantasy about how white people in the age of Obama are some kind of oppressed minority. That may not be racism, but it is incredibly, earth-shatteringly stupid. I hear this theme over and over — as I do on a recent trip to northern Kentucky, where I decide to stick on a Rand Paul button and sit in on a Tea Party event at a local amusement park. Before long, a group of about a half-dozen Tea Partiers begin speculating about how Obamacare will force emergency-room doctors to consult "death panels" that will evaluate your worth as a human being before deciding to treat you.

"They're going to look at your age, your vocation in life, your health, your income. . . ." says a guy active in the Northern Kentucky Tea Party.

"Your race?" I ask.

"Probably," he says.

"White males need not apply," says another Tea Partier.

"Like everything else, the best thing you can do is be an illegal alien," says a third. "Then they won't ask you any questions."

An amazing number of Tea Partiers actually believe this stuff, and in the past year or so a host of little-known politicians have scored electoral upsets riding this kind of yahoo paranoia. Some are career Republican politicians like Sharron Angle, the former Nevada assemblywoman who seized on the Tea Party to win the GOP nomination to challenge Harry Reid this fall. Others are opportunistic incumbents like Jan Brewer, the Arizona governor who reversed a dip in the polls by greenlighting laws to allow police to stop anyone in a Cypress Hill T-shirt. And a few are newcomers like Joe Miller, the Alaska lawyer and Sarah Palin favorite who whipped Republican lifer Lisa Murkowski in the state's Senate primary. But the champion of champions has always been Rand Paul, who as the son of the movement's would-be ideological founder was poised to become the George W. Bush figure in the Tea Party narrative, the inheritor of the divine calling.

Since Paul won the GOP Primary in Kentucky, the Tea Party has entered a whole new phase of self-deception. Now that a few of these so-called "outsider" politicians have ridden voter anger to victories over entrenched incumbents, they are being courted and turned by the very party insiders they once campaigned against. It hasn't happened everywhere yet, and in some states it may not happen at all; a few rogue politicians, like Christine O'Donnell in Delaware, might still squeak into office over the protests of the Republican establishment. But in Kentucky, home of the Chosen One, the sellout came fast and hard.

Paul was transformed from insurgent outsider to establishment stooge in the space of almost exactly one year, making a journey that with eerie cinematic precision began and ended in the same place: The Rachel Maddow Show. When he first appeared on the air with the MSNBC leading lady and noted Bible Belt Antichrist to announce his Senate candidacy in May 2009, Paul came out blazing with an inclusive narrative that seemingly offered a realistic alternative for political malcontents on both sides of the aisle. He talked with pride about how his father's anti-war stance attracted young voters (mentioning one Paul supporter in New Hampshire who had "long hair and a lip ring"). Even the choice of Maddow as a forum was clearly intended to signal that his campaign was an anti-establishment, crossover effort. "Bringing our message to those who do not yet align themselves as Republicans is precisely how we grow as a party," Paul said, explaining the choice.

In the early days of his campaign, by virtually all accounts, Paul was the real thing — expansive, willing to talk openly to anyone and everyone, and totally unapologetic about his political views, which ranged from bold and nuanced to flat-out batshit crazy. But he wasn't going to change for anyone: For young Dr. Paul, as for his father, this was more about message than victory; actually winning wasn't even on his radar. "He used to talk about how he'd be lucky if he got 10 percent," recalls Josh Koch, a former campaign volunteer for Paul who has broken with the candidate.

Before he entered the campaign, Paul had an extensive record of loony comments, often made at his father's rallies, which, to put it generously, were a haven for people gifted at the art of mining the Internet for alternate theories of reality. In a faint echo of the racially charged anti-immigrant paranoia that has become a trademark of the Tea Party, both Paul and his father preached about the apocalyptic arrival of a "10-lane colossus" NAFTA superhighway between the U.S. and Mexico, which the elder Paul said would be the width of several football fields and come complete with fiber-optic cable, railroads, and oil and gas pipelines, all with the goal of forging a single American-Mexican state. Young Paul stood with Dad on that one — after all, he had seen Mexico's former president on YouTube talking about the Amero, a proposed North American currency. "I guarantee you," he warned, "it's one of their long-term goals to have one sort of borderless, mass continent." And Paul's anti-interventionist, anti-war stance was so far out, it made MoveOn look like a detachment of the Third Marines. "Our national security," he declared in 2007, "is not threatened by Iran having one nuclear weapon."

With views like these, Paul spent the early days of his campaign looking for publicity anywhere he could get it. One of his early appearances was on the online talk show of noted 9/11 Truth buffoon and conspiracy theorist Alex Jones. The two men spent the broadcast exchanging lunatic fantasies about shadowy government forces, with Paul at one point insisting that should Obama's climate bill pass, "we will have an army of armed EPA agents — thousands of them" who would raid private homes to enforce energy-efficiency standards. Paul presented himself as an ally to Jones in the fringe crusade against establishment forces at the top of society, saying the leaders of the two parties "don't believe in anything" and "get pushed around by the New World Order types."

Unsurprisingly, the GOP froze Paul out, attempting to exclude him from key party gatherings in Kentucky like the Fayette County Republican Party Picnic and the Boone County Republican Party Christmas Gala. "We had the entire Republican establishment of the state and the nation against us," says David Adams, who mobilized the first Tea Party meetings in Kentucky before serving as Paul's campaign manager during the primaries.

The state's Republican establishment, it must be said, is among the most odious in the nation. Its two senators — party kingmaker and Senate minority leader Mitch McConnell and mentally disappearing ex-jock Jim Bunning — collectively represent everything that most sane people despise about the modern GOP. McConnell is the ultimate D.C. insider, the kind of Republican even Republicans should wonder about, a man who ranks among the top 10 senators when it comes to loading up on pork spending. With his needle nose, pursed lips and prim reading glasses, he's a proud wearer of the "I'm an intellectual, but I'm also a narrow-minded prick" look made famous by George Will; politically his great passion is whoring for Wall Street, his most recent triumph coming when he convinced Republican voters that a proposed $50 billion fund to be collected from big banks was actually a bailout of those same banks. Bunning, meanwhile, goes with the "dumb and unashamed" style; in more than a decade of service, his sole newsworthy accomplishment came when he said his Italian-American opponent looked like one of Saddam's sons.

Paul's animus toward the state's Republican overlords never seemed greater than in August 2009, when McConnell decided to throw a fancy fundraiser in Washington for the national GOP's preferred candidate, Trey Grayson. Attended by 17 Republican senators who voted for the TARP bailout, the event was dubbed the "Bailout Ball" by Paul's people. Paul went a step further, pledging not to accept contributions from any senator who voted to hand taxpayer money over to Wall Street. "A primary focus of my campaign is that we need Republicans in office who will have the courage to say no to federal bailouts of big business," he declared.

The anti-establishment rhetoric was a big hit. Excluded from local campaign events by the GOP, Paul took his act to the airwaves, doing national TV appearances that sent his campaign soaring with Tea Party voters. "We were being shut out of a lot of opportunities in the state, so you go with what is available to you," says Adams. "And what was available was television."

In the primary almost a year later, Paul stomped Grayson, sending shock waves through the national party. The Republican candidate backed by the party's Senate minority leader had just received an ass-whipping by a Tea Party kook, a man who tried to excuse BP's greed-crazed fuck-up in the Gulf on the grounds that "sometimes accidents happen." Paul celebrated his big win by going back to where he'd begun his campaign, The Rachel Maddow Show, where he made a big show of joyously tearing off his pseudolibertarian underpants for the whole world to see — and that's where everything changed for him.

In their first interview, Maddow had softballed Paul and played nice, treating him like what he was at the time — an interesting fringe candidate with the potential to put a burr in Mitch McConnell's ass. But now, Paul was a real threat to seize a seat in the U.S. Senate, so Maddow took the gloves off and forced him to explain some of his nuttier positions. Most memorably, she hounded him about his belief that the Civil Rights Act of 1964 was an overreach of government power. The money exchange:

Maddow: Do you think that a private business has the right to say we don't serve black people?

Paul: Yeah. I'm not in favor of any discrimination of any form. But what about freedom of speech? Should we limit speech from people we find abhorrent? Should we limit racists from speaking?

Paul was pilloried as a racist in the national press. Within a day he was completely reversing himself, telling CNN, "I think that there was an overriding problem in the South so big that it did require federal intervention in the Sixties." Meanwhile, he was sticking his foot in his mouth on other issues, blasting the Americans With Disabilities Act and denouncing Barack Obama's criticism of British disaster merchant BP as "un-American."

Paul's libertarian coming-out party was such a catastrophe — the three gaffes came within days of each other — that he immediately jumped into the protective arms of Mitch McConnell and the Republican Party. "I think he's said quite enough for the time being in terms of national press coverage," McConnell said, explaining why Paul had been prevailed upon by the party to cancel an appearance on Meet the Press. Some news outlets reported that Paul canceled the appearance after a call from Karl Rove to Adams, who concedes that he did speak with Rove around that time.

Soon after, McConnell threw yet another "Bailout Ball" fundraiser in Washington — only this time it was for Rand Paul. The candidate who just a year before had pledged not to accept money from TARP supporters was now romping in bed with those same politicians. When pressed for an explanation of Paul's about-face on the bailouts, Adams offers an incredibly frank admission. "When he said he would not take money from people who voted for the bank bailout, he also said, in the same breath, that our first phone call after the primary would be to Senator Mitch McConnell," says Adams. "Making fun of the Bailout Ball was just for the primary."

With all the "just for the primary" stuff out of the way, Paul's platform began to rapidly "evolve." Previously opposed to erecting a fence on the Mexican border, Paul suddenly came out in favor of one. He had been flatly opposed to all farm subsidies; faced with having to win a general election in a state that receives more than $265 million a year in subsidies, Paul reversed himself and explained that he was only against subsidies to "dead farmers" and those earning more than $2 million. Paul also went on the air with Fox News reptile Sean Hannity and insisted that he differed significantly from the Libertarian Party, now speaking more favorably about, among other things, judicious troop deployments overseas.

Beyond that, Paul just flat-out stopped talking about his views — particularly the ones that don't jibe with right-wing and Christian crowds, like curtailing the federal prohibition on drugs. Who knows if that had anything to do with hawkish Christian icon Sarah Palin agreeing to headline fundraisers for Paul, but a huge chunk of the candidate's libertarian ideals have taken a long vacation.

"When he was pulling no punches, when he was reciting his best stuff, I felt like I knew him," says Koch, the former campaign volunteer who now works with the Libertarian Party in Kentucky. "But now, with Mitch McConnell and Karl Rove calling the shots, I feel like I don't know him anymore."

Hardcore young libertarians like Koch — the kind of people who were outside the tent during the elder Paul's presidential run in 2008 — cared enough about the issues to jump off the younger Paul's bandwagon when he cozied up to the Republican Party establishment. But it isn't young intellectuals like Koch who will usher Paul into the U.S. Senate in the general election; it's those huge crowds of pissed-off old people who dig Sarah Palin and Fox News and call themselves Tea Partiers. And those people really don't pay attention to specifics too much. Like dogs, they listen to tone of voice and emotional attitude.

Outside the Palin rally in September, I ask an elderly Rand supporter named Blanche Phelps if she's concerned that her candidate is now sucking up to the same Republican Party hacks he once campaigned against. Is she bothered that he has changed his mind on bailouts and abortion and American interventionism and a host of other issues?

Blanche shrugs. "Maybe," she suggests helpfully, "he got saved."

Buried deep in the anus of the Bible Belt, in a little place called Petersburg, Kentucky, is one of the world's most extraordinary tourist attractions: the Creation Museum, a kind of natural-history museum for people who believe the Earth is 6,000 years old. When you visit this impressively massive monument to fundamentalist Christian thought, you get a mind-blowing glimpse into the modern conservative worldview. One exhibit depicts a half-naked Adam and Eve sitting in the bush, cheerfully keeping house next to dinosaurs — which, according to creationist myth, not only lived alongside humans but were peaceful vegetarians until Adam partook of the forbidden fruit. It's hard to imagine a more telling demonstration of this particular demographic's unmatched ability to believe just about anything.

Even more disturbing is an exhibit designed to show how the world has changed since the Scopes trial eradicated religion from popular culture. Visitors to the museum enter a darkened urban scene full of graffiti and garbage, and through a series of windows view video scenes of families in a state of collapse. A teenager, rolling a giant doobie as his God-fearing little brother looks on in horror, surfs porn on the Web instead of reading the Bible. ("A Wide World of Women!" the older brother chuckles.) A girl stares at her home pregnancy test and says into the telephone, "My parents are not going to know!" As you go farther into the exhibit, you find a wooden door, into which an eerie inscription has been carved: "The World's Not Safe Anymore."

Staff members tell me Rand Paul recently visited the museum after-hours. This means nothing in itself, of course, but it serves as an interesting metaphor to explain Paul's success in Kentucky. The Tea Party is many things at once, but one way or another, it almost always comes back to a campaign against that unsafe urban hellscape of godless liberalism we call our modern world. Paul's platform is ultimately about turning back the clock, returning America to the moment of her constitutional creation, when the federal bureaucracy was nonexistent and men were free to roam the Midwestern plains strip-mining coal and erecting office buildings without wheelchair access. Some people pick on Paul for his humorously extreme back-to-Hobbesian-nature platform (a Louisville teachers' union worker named Bill Allison follows Paul around in a "NeanderPaul" cave-man costume shouting things like "Abolish all laws!" and "BP just made mistakes!"), but it's clear when you talk to Paul supporters that what they dig most is his implicit promise to turn back time, an idea that in Kentucky has some fairly obvious implications.

At a Paul fundraiser in northern Kentucky, I strike up a conversation with one Lloyd Rogers, a retired judge in his 70s who is introducing the candidate at the event. The old man is dressed in a baseball cap and shirtsleeves. Personalitywise, he's what you might call a pistol; one of the first things he says to me is that people are always telling him to keep his mouth shut, but he just can't. I ask him what he thinks about Paul's position on the Civil Rights Act.

"Well, hell, if it's your restaurant, you're putting up the money, you should be able to do what you want," says Rogers. "I tell you, every time he says something like that, in Kentucky he goes up 20 points in the polls. With Kentucky voters, it's not a problem."

In Lexington, I pose the same question to Mica Sims, a local Tea Party organizer. "You as a private-property owner have the right to refuse service for whatever reason you feel will better your business," she says, comparing the Civil Rights Act to onerous anti-smoking laws. "If you're for small government, you're for small government."

You look into the eyes of these people when you talk to them and they genuinely don't see what the problem is. It's no use explaining that while nobody likes the idea of having to get the government to tell restaurant owners how to act, the Civil Rights Act of 1964 was the tool Americans were forced to use to end a monstrous system of apartheid that for 100 years was the shame of the entire Western world. But all that history is not real to Tea Partiers; what's real to them is the implication in your question that they're racists, and to them that is the outrage, and it's an outrage that binds them together. They want desperately to believe in the one-size-fits-all, no-government theology of Rand Paul because it's so easy to understand. At times, their desire to withdraw from the brutally complex global economic system that is an irrevocable fact of our modern life and get back to a simpler world that no longer exists is so intense, it breaks your heart.

At a restaurant in Lexington, I sit down with a Tea Party activist named Frank Harris, with the aim of asking him what he thinks of Wall Street reform. Harris is a bit of an unusual Tea Partier; he's a pro-hemp, anti-war activist who supported Dennis Kucinich. Though he admits he doesn't know very much about the causes of the crash, he insists that financial reform isn't necessary because people like him can always choose not to use banks, take out mortgages, have pensions or even consume everyday products like gas and oil, whose prices are set by the market.

"Really?" I ask. "You can choose not to use gas and oil?" My awesomely fattening cheese-and-turkey dish called a "Hot Brown" is beginning to congeal.

"You can if you want to," Harris says. "And you don't have to take out loans. You can save money and pay for things in cash."

"So instead of regulating banks," I ask, "your solution is saving money in cash?"

He shrugs. "I'm trying to avoid banks at every turn."

My head is starting to hurt. Arguments with Tea Partiers always end up like football games in the year 1900 — everything on the ground, one yard at a time.

My problem, Frank explains, is that I think I can prevent crime by making things illegal. "You want a policeman standing over here so someone doesn't come in here and mug you?" he says. "Because you're going to have to pay for that policeman!"

"But," I say, confused, "we do pay for police."

"You're trying to make every situation 100 percent safe!" he shouts.

This, then, is the future of the Republican Party: Angry white voters hovering over their cash-stuffed mattresses with their kerosene lanterns, peering through the blinds at the oncoming hordes of suburban soccer moms they've mistaken for death-panel bureaucrats bent on exterminating anyone who isn't an illegal alien or a Kenyan anti-colonialist.

The world is changing all around the Tea Party. The country is becoming more black and more Hispanic by the day. The economy is becoming more and more complex, access to capital for ordinary individuals more and more remote, the ability to live simply and own a business without worrying about Chinese labor or the depreciating dollar vanished more or less for good. They want to pick up their ball and go home, but they can't; thus, the difficulties and the rancor with those of us who are resigned to life on this planet.

Of course, the fact that we're even sitting here two years after Bush talking about a GOP comeback is a profound testament to two things: One, the American voter's unmatched ability to forget what happened to him 10 seconds ago, and two, the Republican Party's incredible recuperative skill and bureaucratic ingenuity. This is a party that in 2008 was not just beaten but obliterated, with nearly every one of its recognizable leaders reduced to historical-footnote status and pinned with blame for some ghastly political catastrophe. There were literally no healthy bodies left on the bench, but the Republicans managed to get back in the game anyway by plucking an assortment of nativist freaks, village idiots and Internet Hitlers out of thin air and training them into a giant ball of incoherent resentment just in time for the 2010 midterms. They returned to prominence by outdoing Barack Obama at his own game: turning out masses of energized and disciplined supporters on the streets and overwhelming the ballot box with sheer enthusiasm.

The bad news is that the Tea Party's political outrage is being appropriated, with thanks, by the Goldmans and the BPs of the world. The good news, if you want to look at it that way, is that those interests mostly have us by the balls anyway, no matter who wins on Election Day. That's the reality; the rest of this is just noise. It's just that it's a lot of noise, and there's no telling when it's ever going to end.

Iraqi democracy = growing Iranian influence?

So we've spread democracy like butter across Iraq, and... Now we don't like how it tastes: Shiite dominance and closer ties to our regional foe, Iran.

Perhaps we're not cut out for this empire business? We don't have the foresight and cunning required to make vanquished nations serve our interests.

The change in approach comes as an anti-American cleric's political faction agrees to support Maliki, a deal that would run counter to U.S. interests and risk further destabilizing the country.
By Liz Sly
October 18, 2010 | Los Angeles Times

Sunday, October 17, 2010

U.S. Military: Iraqi death toll

"You can't make an omelet without breaking a few eggs," New York Times journalist Walter Durante, Stalin's useful idiot, liked to say in defense of Soviet regime's repression and engineered famine in Ukraine to bring it in line.

And so at least 77,000 Iraqis -- but probably more than 100,000 -- and 4,425 American soldiers had to die to "liberate" Iraq, or more accurately, to enforce the occupation after Saddam's regime had already been broken. The invasion and occupation has also created about 300,000 official refugees and asylum seekers spread out over 12 countries.

Those who say it was all worth it are doing the devil's arithmetic.

By Lara Jakes
October 14, 2010 | AP

A new U.S. military tally puts the death toll of Iraqi civilians and security forces in the bloodiest years of the war thousands below Iraqi government figures.

The little-noticed body count is the most extensive data on Iraqi war casualties ever released by the American military. It tallied deaths of almost 77,000 Iraqis between January 2004 and August 2008 – the darkest chapter of Iraq's sectarian warfare and the U.S. troop surge to quell it.

But the tally falls short of the estimated 85,694 deaths of civilians and security officials between January 2004 to Oct. 31, 2008, as counted last year by the Iraqi Human Rights Ministry.

Casualty figures in the U.S.-led war in Iraq have been hotly disputed because of the high political stakes in a conflict opposed by many countries and a large portion of the American public. Critics on each side of the divide accuse the other of manipulating the death toll to sway opinion.

Even casualty rates are a political issue in Iraq," said Samer Muscati, a Middle East and North Africa researcher for New York-based Human Rights Watch.

The new data was quietly posted on the U.S. Central Command website without explanation in July, and a spokesman at its military headquarters in Tampa, Florida, could not answer basic questions Thursday about the information, including whether it counted government-backed Sunni fighters among Iraqi security forces or insurgents among civilians.

Officials with the Iraqi Health Ministry, which tracks how Iraqis are killed through death certificates, refused to discuss the U.S. casualty data Thursday.

The figures were discovered this week during a routine check by The Associated Press for civilian and military casualty numbers that were first requested in 2005 through the Freedom of Information Act.

In all, the U.S. data tallied 76,939 Iraqi security officials and civilians killed and 121,649 wounded between January 2004 and August 2008. The count shows 3,952 American and other U.S.-allied international troops were killed over the same period.

The figures did not specify whether the civilian deaths were caused by sectarian violence, but appeared to track charts previously released by the Defense Department of Iraqis killed during Operation Iraqi Freedom who died as a result of hostile violence – as opposed to accidents or natural causes.

Those charts – which did not provide concrete numbers – were based on data compiled by U.S. and Iraqi government figures.

The U.S. count falls short of casualty figures compiled by Iraq's Human Rights Ministry.

The ministry said in its report released last October that 85,694 people were killed from the beginning of 2004 to Oct. 31, 2008, and that 147,195 were wounded. The figures included Iraqi civilians, military and police, but did not cover U.S. military deaths, insurgents, or foreigners, including contractors. Like the new U.S. figures, the Iraqi report did not include the first months of the war after the 2003 U.S.-led invasion.

A tally by the Iraq Body Count, a private, British-based group that has tracked civilian casualties since the war began, estimates that between 98,252 and 107,235 Iraqi civilians were killed between March 2003 to Sept. 19, 2010. The group has used media reports and other sources to reach its tally.

Until last month, The AP compiled its own daily body count of Iraqi civilians killed in sectarian violence, excluding insurgents. Overall, The AP tallied 49,416 Iraqi security officials and civilians killed since April 28, 2005 until Sept. 30, 2010. That figure underrepresented the true casualty number because many killings went unreported, especially in more remote areas.

The Central Command figures represent the largest release of raw data by the U.S. military to detail deaths during the Iraq war. The military has repeatedly resisted sharing its numbers, which it uses to determine security trends.

A notable exception, however, came this year when U.S. military officials in Baghdad decided to release their July 2010 Iraqi casualty tally to refute the Iraqi government's much higher monthly figures. That decision was made weeks before U.S. forces withdrew all but 50,000 troops from Iraq – as ordered by President Barack Obama in an attempt to wind down the war and tout the nation's improved security.

Even so, counting the number of Iraqis killed has always been difficult, and tallies have widely varied depending on the source.

Johnson: No fiscal conservatives

By Simon Johnson
October 14, 2010 | New York Times

Simon Johnson, the former chief economist at the International Monetary Fund, is a co-author of "13 Bankers."

In most industrialized countries, attention is now shifting to some form of fiscal austerity — meaning the need to bring budget deficits under control.

In Britain, for example, an active debate is under way between those on the right of the political spectrum (who want more cuts sooner) and those to the left (who would rather delay cuts as much as possible). There is a similar discussion across the European continent, with the precise terms of the debate depending on which party was most profligate during the long boom of the 2000s.

The United States stands out as quite different. No one is yet seriously proposing to address our underlying budget problems. Certainly, some people consider themselves fiscal conservatives — some of the right and some of the left — but none can yet be taken seriously. The implications for our fiscal future are dire.

The background, of course, is that the United States budget was in relatively good shape at the end of the Clinton years (culminating in a surplus of 2.5 percent of gross domestic product in 2000), but it turned sharply into deficit during the George W. Bush era. The 2 percent deficit in 2006 perhaps did not look too bad, for example, but it was a remarkably poor performance given how well the economy was doing.

The notion that tax cuts would lead to productivity increases, bolstering growth and in turn fixing the budget, turned out to be completely illusory. In fact, the tax cuts encouraged consumption, leading to overspending at the national level (and reflected in a current account deficit that reached 6 percent of G.D.P., with a large increase in borrowing from foreigners by both the private sector and the government).

But what really busted the United States budget and pushed up our debt-to-G.D.P. ratio was the way the financial system amplified the housing-based boom-and-bust through 2008. While there were some "feel good" effects through the end of 2007, we then faced the worst recession since World War II.

Net government debt held by the private sector will increase to around 80 percent of G.D.P., from about 42 percent, as a direct result of the economic crisis — and the measures taken to prevent it from turning into another Great Depression.

The Congressional Budget Office agrees that the increase in debt-to-G.D.P. from the crisis is about 40 percentage points. Treasury Secretary Timothy F. Geithner has offered a very different view — and an overly narrow one — framed in terms of an assessment of only the Troubled Asset Relief Program: "The direct costs of the government's overall rescue strategy are likely to be less than 1 percent of G.D.P."

The increase in our budget deficit to 10 percent in 2009 and 2010 was primarily because of our automatic stabilizers; the government took in less revenue as tax receipts fell and paid people more in unemployment benefits. Only 17 percent of the increase in government debt (in the baseline budget of the Congressional Budget Office) is because of discretionary spending of any kind.

Think what you like of the fiscal stimulus — either the Bush 2008 version or the Obama 2009 effort: it is simply not the big-ticket item its critics make it out to be.

If you want to fix the United States budget, keeping the deficit under control and reducing government's debt, you must address the risk-seeking behavior of big banks. No fiscal strategy can be credible without addressing the major problem that brought us to this point.

Of course, you can make proposals that seek to cut spending and raise revenue — see, for example, the recent effort by Bill Galston and Maya MacGuineas from the Committee for a Responsible Federal Budget. Some of their ideas are worth discussing — and they are right to put everything on the table (although, personally, I would err on the side of more comprehensive tax reform).

But the simple fact of the matter is that our fiscal position has been ruined by the behavior of big banks — and these banks are now free to make the same or larger mistakes as we head into the next credit cycle.

The unfortunate fact is that those who style themselves as fiscal conservatives largely stayed on the sidelines during the financial regulation debate. And the problem of too-big-to-fail was absolutely not addressed adequately either by the Dodd-Frank legislation or the subsequent Basel III framework (as The Financial Times reported this week).

There is no way to handle the failure of a global megabank, and the management of such banks know this and so do their creditors (as Gillian Tett noted in a trenchant Financial Times column). This amounts to carte blanche for further uncontrolled expansion of risk-taking.

In some sense, this is all water under the bridge — like it or not, the overhaul process for systemic risk is done, and achieved little. But in that case, any true fiscal conservative should recognize the risks posed by megabanks going forward and adjust their budget targets accordingly.

In particular, the commonly discussed target for our government debt-to-G.D.P. ratio of 60 percent seems unreasonably high, given the risks posed by our financial system. We should probably aim instead for a target of 20 percent or lower, as do the most responsible emerging markets in Asia or the Baltics.

Fiscal conservatives — and everyone else — will most likely ignore this advice. In that case, we'll soon face a major fiscal crisis in the United States, again as a direct result of financial sector irresponsibility. Then taxes will rise as Social Security benefits fall sharply, and unemployment increases beyond current levels.