Pitchforks & Torches

If we can eliminate the rail alternatives, we will create a new market for our cars.

2010-11-21T15:13:00.000-08:00

I have ignored this blog for some time for reasons described earlier. I'll summarize by indicating that maintaining a blog that is rant-based is antithetical to my nature. This stuff motivates me, but the work of creating a meaningful blog was bringing me down. I considered posting this to my regular blog (eyeDance) but it seemed too heavy for that venue. So here it is, where it rightfully belongs, on Pitchforks and Torches.

I will reiterate that anyone who feels moved to contribute to this blog so that its presence is less sporadic, please contact me and I will grant you the status to contribute directly. So, onward...

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On Saturday I attended a pro-train rally here in Madison, WI. There is a push to (re)introduce higher-speed passenger rail to the state. Our Governor-Elect, Scott Walker(R) has clearly stated his intent to kill the rail project and return the federal funds already allocated to WI to improve rail beds and establish new track and a station in Madison.

The rally was small, and poorly announced. The spots I heard on the radio indicated day and time, but not location (duh!). Several speakers presented good information, including one Republican who is a Walker supporter.

Generally the information was fact-based rather than emotional and I couldn't help but to feel cognitive dissonance: This rail option is so clearly a conservative approach to infrastructure growth. What was I missing? I wasn't alone.

There's lots of room for conspiracy about Walker being beholden to road building and other transportation (read: Truck and Auto) based organizations, but it really can't be that simple. I don't believe he's that short-sighted. Or is he caught up in the paradigm that says cars=freedom and poor people travel by train or bus? Has he ever been to the East Coast? Interestingly, a friend who was also at the rally mentioned in passing GM and other corporations buying up and destroying urban rail. That rang a bell deep in my memory, so I came home to do some research.

in the 1920s automaker General Motors (GM) began a covert campaign to undermine the popular rail-based public transit systems that were ubiquitous in and around the country’s bustling urban areas. At the time, only one in 10 Americans owned cars and most people traveled by trolley and streetcar.

It sort of reminds me of "Who Framed Roger Rabbit". It turns out GM wasn't alone in their efforts, and they were hugely successful. They were joined by Standard Oil, Firestone Tire, Mack Truck and Phillips Petroleum.

GM began by funding a company called National City Lines (NCL), which by 1946 controlled streetcar operations in 80 American cities.

“Despite public opinion polls that showed 88 percent of the public favoring expansion of the rail lines after World War II, NCL systematically closed its streetcars down until, by 1955, only a few remained,”

Over the course of three decades, this group of corporations worked to almost entirely decimate rail options in cities. I'm no fan of trolleys and think buses are a fine alternative. My wife has relied on Madison Metro buses for commuting for more than two decades. But they didn't stop there.

Alfred P. Sloan, GM’s president at the time, said, “We’ve got 90 percent of the market out there that we can…turn into automobile users. If we can eliminate the rail alternatives, we will create a new market for our cars.”

Getting inside the government was a logical step, and GM wasted no effort to do so.

GM was later instrumental in the creation of the National Highway Users Conference, which became the most powerful lobby in Washington. Highway lobbyists worked directly with lawmakers to craft highway-friendly legislation”

When GM President Charles Wilson became Secretary of Defense in 1953 [emphasis mine], he worked with Congress to craft the $25 billion Federal-Aid Highway Act of 1956. Referred to at the time as the “greatest public works project in the history of the world,” the federally funded race to build roads from coast-to-coast was on.

Fortunately, GM is not in the same position it was in then, and there is more interest in rational mass transit. Road building is costly, and traffic is getting significantly worse even here in WI. A rail option reduces some of that load - but leaves drivers free to choose to drive - and eliminates a couple of key headaches such as fender-benders and the traffic jams they create, rush-hour crawl, tolls, and most weather related snarls like snow, fog, and heavy rain.

Currently the Amtrak passes about 30 miles from Madison and there is no way to get to the station except by car. The Empire Builder line runs from Seattle-Chicago via Minneapolis and Milwaukee, making it a logical option for a Mnpls-Madison-Chicago connection if it only ran closer or there was a rail line that served the station from here. The trip from Chicago to Columbus, WI, takes 2:45, so a route through Madison instead would not significantly alter that. Driving time to downtown Chicago from here is about the same if all goes well. While riding that train I could read, have a beer, talk with my companions or work mates without the hassle of driving. A weekend getaway becomes a breeze and I don't have to spend upwards of $20/day to park my car. The trip from here to Minneapolis is 5:30, a bit longer than the typical drive time if all goes well.

The government's reimbursement rate for auto travel is $0.50/mile for 2010. Minneapolis is 270 miles. At $0.50, that's a transportation cost, excluding parking, of $135. Let's for the sake of argument assume there are two travelers, so the minimum cost per traveler is $67.50. An Amtrak ticket from Madison (Columbus) to Minneapolis is $56.00. Intracity mass transit will get me around pretty well for that extra $11.50 per person. Chicago is 148 miles, or, using the same rates as above, $37.00 per person for two to drive. Amtrak from Madison to Chicago is $32.00 per person. (Aside: It's interesting to note that my computer's dictionary doesn't even recognize the word intracity. Telling, no? Talk about paradigms.)

Make no mistake: This is still a corporations versus people issue. Substantial corporate dollars are being invested to quash intercity passenger rail in favor of roads and personal transit such as cars. Are you really a fiscal conservative? Then rail makes sense both as a stand alone choice on a dollars to dollars basis, but also as simply an alternative to the private automobile.

And before you jump up and down and yell about Amtrak subsidies, you had better have your ducks in a row and be prepared to talk about the subsidies to road building, GM (hello?), the petroleum industry ($50 Billion/year) and ethanol (which is a rant unto itself). I leave you with this:

Much is made of the $30 billion spent on Amtrak over the last 30 years, but in that same period the federal government spent $1.89 TRILLION on air and highway modes, according to the New York Times and Washington Post.

Wolf in Sheep's Clothing

2010-04-22T07:12:00.000-07:00

Rent-A-Front: New Group Wages Stealth Battle Against Wall Street Reform. TPM has an article posted today indicating a supposedly grass roots advocacy group, Stop Too Big To Fail, supposedly seeking sane finance reform is actually a front for corporate interests seeking to kill the proposed reform legislation.

But as TPMmuckraker has looked into the group, every indication is that Stop Too Big To Fail is an astroturf operation funded by corporate interests to give the appearance of grassroots opposition to reform.

The group's leader has a long history running a rent-a-front operation: offering up his services to large corporations who are willing to pay top dollar for a "consumers group" that will engage in stealth advocacy on behalf of industry. The group refuses to divulge its funding sources. The respected economist whose support the group touts now says he was deceived.

Referring to itself as a movement, the group has launched a campaign on typically left-leaning websites and blogs. They are, quite literally, trying to fake out readers and sow disinformation in an effort to kill reform. Disgusting.

Here is a little history of the group's past "grass roots" operations:

- Consumers for Cable Choice. That group was funded by big telecoms like Verizon and fought to deregulate the cable industry.
- Consumers Voice, founded in the late 1990s, was "a self-described watchdog fighting against broadband legislation" that was funded by AT&T.
- www.simplecoverage.org, a website funded by mega-insurer Assurant, that says it helps people navigate the individual insurance market.

Do not be fooled.

Mea Culpa

2010-04-22T06:58:00.000-07:00

I have noticed that feeding this blog creates an energy-state in me that I find unpleasant. That by itself is not too surprising, but I have to acknowledge it. Raking through the muck in our political system is draining. So, while I apologize for not posting more here, I do not expect the infrequency to change.

If YOU, dear reader, wish to be a contributor at this blog, please drop me a note and I'll hand you the opportunity. I don't care if you are politically left or right, as long as you are interested in honestly pointing out the inherent lies, obfuscations, cover-ups, and treachery in our system.

Not THAT Foreign Aid!

2010-02-26T10:38:00.000-08:00

Andrew Sullivan posted a graphic a few days ago that has been bouncing around in my head for a few days. He re-posted it today, with a barb that clarified my thoughts. Here's the graph:

Foreign aid tops that list. Before I go any further with this thought exercise, let's have a pop quiz: How much of the U.S. budget goes to foreign aid? Anyone? Buehler? The answer is about 1%, or $23.5 billion in 2008. Private philanthropy contributes more, at around $35 billion. (I think there is a reason for philanthropic donations, and I'll get to that in a moment.) So which destitute, impoverished nations receive that aid? Anyone? Those of you who followed that link above will have been led to think that poor African nations receive that money for food. [insert buzzer noise here] The top recipients (I could only find 2007 data) are Iraq ($8.1 billion) and Afghanistan ($5.8 billion). That is on top of the costs of our misbegotten wars in those countries. Next in order are Israel ($2.5 billion) and Egypt ($1.97 billion). Even Russia is getting $1.6 billion, and that excludes all the -istan countries, Georgia, and other former members of the U.S.S.R. Clearly this is not charitable donations for feeding the poor. It's military aid primarily.

Here's a proposal: Cut foreign aid by lopping off that $4.5 billion (likely more now) in aid to Israel and Egypt. Any "conservative" takers? Based on my reading of the news, I'll get none. They mean, cut aid to starving African nations.

There are good reasons to provide foreign aid, and that is likely why there is so much corporate and other philanthropic aid money. It helps stabilize unstable countries. War is a lousy tool of statecraft, and using it as a first tool is insane (unless you make bombs or bombers). I propose we immediately strip $50 billion out of the Defense budget ($515 billion, excluding the not budgeted wars in Iraq and Afghanistan) and shunt it in place of the approximately $50 billion spent on foreign aid.

So, without that $50 billion per year as separate foreign aid, we can fund health care with a subsidized Medicare buy-in for five years.

*insert cricket sounds*

One last thought on that first graph. Something like 40% of conservatives want to cut welfare, but only about 12% want to cut "aid to the poor". What am I missing? Purely conjecture, but is it that "welfare recipients" are typically portrayed as unmarried black women with lots of kids, while "poor people" are your white neighbors who are down on their luck? Anyone? Buehler?

For I was hungry and you gave me no food

2010-02-19T07:50:00.000-08:00

At what point does our supposedly free market fail to provide reasonable solutions? At what point does it become clear that corporate interests outweigh the interests of We The People? One possible way to answer that question is to say it occurs when monopolies (or corporate oligarchies) dominate a market so thoroughly that they can do whatever they want because there is no option to provide an alternative to their service. A case in point:

Anthem Blue Cross, the largest for-profit health insurer in California, announced huge rate increases for people who buy their own insurance: an average increase of 25 percent, and a 35 percent to 39 percent rise for a quarter of the purchasers.

Just what are the options in California, or nationwide, for those who reject such a rate increase? They are either limited, or seriously unpalatable. The can:
- Switch to another provider. Since there are seven main players in the health insurance industry, that does not really provide any meaningful option. Where Anthem goes on this, the others will surely follow simply because they can.
- Switch to a lesser policy for less money. A poor choice, but certainly possible, and one that free-market aficionados would surely champion (until it is their family forced into that situation, then they become Tea Partiers). This option will typically result in one illness causing bankruptcy and economic ruin to the family. If the goal is to exacerbate the trend of the rich getting richer and the poor poorer, this is a great solution.
- Go without. Ultimately, this is a death sentence. Easily preventable or treatable illness will be more traumatic because treatment will be out of pocket, and therefore avoided. Ask any doctor or dentist who treat those who pay as they go.

Free market lovers maximize corporate options while damning government options. In this situation, why not simply make Medicare an option for any American to buy in to? Note that I said both buy, and option. If any American is unhappy with the offerings of the major insurance providers, let them have an option to buy into Medicare at any age. The huge pool of insured should keep rates affordable, and the not-for-profit option helps as well. Further, those over 65 who currently get Medicare for free should be means-tested: If their income/savings allows for it, they should be required to pay for some or all of their premiums (including Senators and Congresspersons). For those who think government-offered health insurance would stink, they are free to continue to pay whatever the Big Guys want to charge for their coverage.

In other words, let competition re-enter the marketplace. If the government offered plan draws people in, the corporate offerings will adjust down to compete, right? And if the government option is awful, then no one will buy into it. As long as there are the likes of William McGuire around, those corporate rates will continue to skyrocket.

On a final note, I will add that America seems to always find money aplenty for dubious wars, but not a sou for taking care of her least brothers (Matthew 25:34-46 for those who profess to be Christian).

So That Security and Liberty May Prosper Together

2010-02-09T08:11:00.000-08:00

Americans like to bitch about how "The Government" spends the tax money of We The People. In our arguments we prop up straw men to shout about: Funding the National Endowment for the Arts, Tobacco or Ethanol subsidies, studies about trivialities like global climate change, etc. Yet we very rarely get around to taking on the Number One problem, the bottomless pit into which we throw trillions of dollars and insist on thinking of it as a tool of statecraft.

Yes, I refer to the military.

Every decade or so some pol steps up and makes a stand against this bomber or tank or ship, declaring it wasteful and unnecessary. Good for that vox clamantis in deserto, but until Feb. 1, 2010, I am fundamentally unaware of anyone who has the moxie to claim, as Andrew J. Bacevich does in "The American Conservative", that,

Since 1945, the United States military has devoted itself to the proposition that, Hiroshima notwithstanding, war still works—that, despite the advent of nuclear weapons, organized violence directed by a professional military elite remains politically purposeful. From the time U.S. forces entered Korea in 1950 to the time they entered Iraq in 2003, the officer corps attempted repeatedly to demonstrate the validity of this hypothesis.

He's referring to war working as statecraft, a tool to end some conflict or another. As in our current efforts in Iraq and Afghanistan. Despite all evidence to the contrary. Bacevich goes on:

Three times in the last 60 years, U.S. forces have achieved an approximation of unambiguous victory—operational success translating more or less directly into political success. The first such episode, long since forgotten, occurred in 1965 when Lyndon Johnson intervened in the Dominican Republic. The second occurred in 1983, when American troops, making short work of a battalion of Cuban construction workers, liberated Granada. The third occurred in 1989 when G.I.’s stormed the former American protectorate of Panama, toppling the government of long-time CIA asset Manuel Noriega.

He's not talking trash about "the troops". He's talking about results. The efficacy of the theoretical strategy of deploying troops to "win" something as nebulous as a "War On Terror". In plain speech, such a plan is analogous to nailing Jell-o to a tree.

Yet the current crop of "conservative" voices routinely demand that We "support the troops" by not uttering a single negative word about the deeply flawed mission. They castigate the president for being soft and spineless. The current darling of the GOP, Sarah Palin, is openly criticizing the president for not invading Iran. In what twisted world view are those things conservative? How is endless occupational military engagement with no clear victory to achieve a conservative virtue?

Imagine for one minute that We The People had resoundingly said No! to the proposed invasion of Iraq for specious, trumped up reasons. Imagine that we had thought rather than reacted in the wake of 9/11. (Imagine that my coworker had not called me a traitor for disagreeing with such a fallacious rush to war.) We would still have:

- $1.05 trillion dollars (which over 10 years could have provided funding for 1,490,431 elementary school teachers, or 30,839,695 people with Health Care, or 108,327,139 Homes with Renewable Electricity)
- 3,469 living US soldiers
- 27,790 unwounded US soldiers

Ponder that. Those lives are irreplaceable. For the cost of 7 years of war with no discernible goal ("Ending terror"? Please...) We The People could have outfitted pretty much every single U.S. home with the means of generating its own electricity. Just how much dead dinosaur juice consumption or coal burning does that avoid? Which one gets us out of conflict with the Middle East? Which of those solutions is conservative? Which one provides a return on invested capital?

Please note that the cost of the current wars is not analogous to the cost of having a military. It is above and beyond the cost of maintaining and effective military. Using said military for dubious results is expensive and not in the slightest conservative.

Eisenhower was right:

We face a hostile ideology -- global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger is poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle -- with liberty the stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research -- these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs -- balance between the private and the public economy, balance between cost and hoped for advantage -- balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

and right about this, too:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

and once more:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Read the entire speech and recall what conservatism used to sound like. Remember what war looked like to a warrior rather than a glory-addled chicken-hawk. Remember that we were warned, and we ignored that warning. Remember that our leaders, both elected and corporate, prefer that we remain afraid of bogeymen so that the military machine remains showered with money, our money, and that the exchange for that false sense of security is money not spent on making America better.

Tax and Spend

2010-02-07T20:41:00.000-08:00

'Nuff said. This is where the money comes from, and where it goes. Draw your own conclusions.

Why I Read Andrew Sullivan's Blog

2010-02-04T07:50:00.000-08:00

It is the drumbeat of accountability that Sullivan pounds out so frequently that makes me read him and follow his links. Stuff like this:

In my view, every single Republican who appears on cable or radio and who complains about the debt and rules out any tax hikes should be directly and specifically asked every single time what they propose to cut. Specifically. Every single time. Equally, every single Democrat who says they want to tackle the debt needs to be asked every single time which taxes they propose raising. Specifically. Every single time. If the journalist looks like an asshole, get over it. It is our job to look like assholes. We are professional assholes. We get paid to be rude. In order to expose the truth.

And just in case that wasn't to the point enough:

And by relentlessly, I mean - if they fail to answer, or offer vague generalizations, ask again. And again. And again. And again. On air. Refuse to move on. Put them on the spot. Both parties. Every time.

Go get 'em, Andrew.

Pay As You Go? Not The GOP!

2010-01-30T10:24:00.000-08:00

Have a look at this. This is the roll call for the US Senate amendments to a House bill that would reinstate pay-as-you-go fiscal responsibility. In other words, if you want 'X' in the budget, you have to provide some means of funding it, either throu cuts elsewhere or raising taxes.

Look at how the GOP senators voted, and see "fiscal responsibility" as it's voted upon rather than how it's shouted on FOX "news" programs.

Not one single Republican voted for the amendments. Not one. Some of you are going to read this and say, "But the bill didn't go far enough." or some such thing. I would buy that except that there was not one bit of deviance from the obstructionist GOP response we have seen since Obama became president. It also is a strikingly clear of the fiscal behavior of Republicans in power since before Reagan (George H. W. Bush gets due props for attempting fiscal restraint and raising taxes to pay for what he wanted, but he also got hung out to dry by his party for exactly that behavior.)

The simple fact is that Democrats have become the party of fiscal responsibility. You may not like what they want to spend money on, but they are generally serious about funding their plans. The GOP has forsaken all claim to being the party that spends wisely. The GOP has become the party that Borrows-and-Spends, passing the burden on to subsequent generations or having faith that later boom year will refill the coffers. Exhibits number One and Two for my case: The unfunded, not even budgeted wars in Iraq and Afghanistan. Exhibit Three is the unfunded Medicare expansion, the single largest entitlement expansion since FDR.

The Democrat's tax-and-spend mindset is at least sane.

With Liberty and Justice For WMC

2010-01-28T08:28:00.000-08:00

As if the recent SCOTUS ruling declaring corporate person-hood as far as direct campaign contributions and spending is concerned wasn't bad enough, we have some equally sickening news right here in Wisconsin:

The state’s highest court last week voted to adopt rules that would allow court judges and justices to remain on cases that involve their direct or indirect campaign contributors. In other words, if a judge in Wisconsin wants to, they can remain on a case even if it involves one of their influential campaign donors – they won’t have to recuse themselves if they have a direct conflict of interest.

Readers from Wisconsin may recall that our two most recent supreme court elections were contentious. The problem, especially apparent in the most recent election of justice Michael Gableman, was the obvious influence in the process by Wisconsin Manufacturing and Commerce, a business organization that seeks to create a pro-business environment in the state. And just who do you supposed authored the bill that the court passed in a 4-2 decision?

The rules were written by the Wisconsin Realtors Association and Wisconsin Manufacturers & Commerce, a business lobbying group that spent millions to elect Justices Annette K. Ziegler and Michael Gableman.

Voting for the rules were "justices" Gableman, Zeigler, Prosser and Roggensack. Voting against were Crooks, Bradley and Chief Justice Shirley Abrahamson.

The new rules come as defense attorneys are trying to force Gableman off eight cases because they believe he has expressed a bias against criminal defendants and defense attorneys. Gableman has said he is not biased and refused to step aside in six cases. He has not said what he will do in the other two.

My, what a surprise.

Clearly, what we have here as a fantastic ROIC (Return On Invested Capital) for WMC. They work diligently and spend lavishly on two supreme court justice positions and things really start to happen in their favor. Now Gableman, who may not have been elected without the substantial assistance of WMC, can be a perfect lap dog for the organization, and the new rules say he doesn't even have to pretend to be concerned with conflict of interest.

Workers in Wisconsin, it is about to get very ugly.

We the Corporations, of the Fascist States of America...

2010-01-25T10:35:00.000-08:00

Are you alarmed by the recent supreme court ruling allowing unrestricted donations to campaigns and spending on political ads? Are you sickened by the marginalizing of the political power of We The People? Are you dismayed as you ponder just how bad the next election cycle is going to be as corporations spend millions to spread disinformation?

I am.

Other than calling your Senator and Representative, here is one more thing you can do. Sign a petition to amend the Constitution to reverse the supreme court's decision. Declare that only people, not corporations, have constitutional rights. Remind corporations that they are nothing more than legal constructs designed to protect individuals from liability. Here is the petition:

http://movetoamend.org/we-corporations

Imagine your next president elected based on the corporate advertising "information" of Haliburton, Blackwater, Diebolt, Exxon-Mobil, and Walmart. Now take action!

Fascism in America

2010-01-19T22:50:00.000-08:00

Not yet, but after reading this article, can you state with conviction that none of these things are happening?

To varying degrees I could cite examples of each and every one of the 14 key points. Where does your mind balk?

1. Powerful and continuing expressions of nationalism
2. Disdain for the importance of human rights
3. Identification of enemies/scapegoats as a unifying cause
4. The supremacy of the military/avid militarism
5. Rampant sexism (solid examples are extremely rare)
6. A controlled mass media (the article explores this with subtlety)
7. Obsession with national security
8. Religion and ruling elite tied together
9. Power of corporations protected (the very basis for this blog!)
10. Power of labor suppressed or eliminated
11. Disdain and suppression of intellectuals and the arts (Sarah Palin, anyone?)
12. Obsession with crime and punishment (I think this one is actually easing...)
13. Rampant cronyism and corruption
14. Fraudulent elections (rare at the federal level...but notable)

I urge you to read this article and ponder the thoughts behind each of these topics. Then turn off your preferred news source and look at those that are "other". What do you see when you change your filters? Where does this list stack up? I had a coworker forward me an email in the months after 9/11 touting the evils of some "fascist" college professor. The email was a rant agains this professor, calling him a fascist, yet the arguments used against him (for questioning our involvement in Iraq) ticked off about 9-10 of the 14 items on the above list. I copied the definition of fascism and sent it back to my cowerker with the question, "Which one of these two is the real fascist?" Please note in the linked definition that fascism can emerge from either the political Left or Right, or some combination of them both.

To those who think I am crazy, please read THIS article and also the comments. Then tell me I'm crazy, bearing in mind #4, 7, 8,9, and 11.

No One Trusts You Anymore

2010-01-16T11:02:00.000-08:00

Some straight talk to members of the Banking industry. Three cheers!

The Dismal Decade

2010-01-11T08:33:00.000-08:00

The GOP likes to talk, a lot, about personal responsibility and the value of hard work. At the close of the first decade of the twenty-first century, it is difficult to ignore the facts that give lie to these concepts. We The People did work hard and productivity soared between 1999 and 2009, just like every other decade since WWII. But what else happened during that same time frame? Neil Irwin's article at The Washington Post explores.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 -- and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

The graphs at the linked article provide a stark illustration of things gone wrong. There was net zero job creation during the decade, again a first. Reagan's trickle down economics sold us an empty promise that cutting taxes on the wealthy, and on Corporations, would result in those same noble industrial giants investing that wealth in America, creating a flood of jobs and a rising tide that floats all boats. A great concept except that it ignored the rapacious greed of those at the top. And in a fit of stupidity that has almost no equal, We The People thought we should keep up with the McGuire's and build our own McMansions and drive constantly-new vehicles (which were also consistently less efficient and ostentatious), which leveraged our idling incomes to the hilt. It was a heady decade that introduced the greed-based concept of interest-only mortgages which appealed to people who wanted more house and ignored the substantial risks.

The end result is that we were fleeced from the top by greed and avarice. To compound the problem, We turned the clippers on our selves to finish the fleecing by trying to outspend the one's who really had money. That was, of course, Reagan's grand plan for the Cold War which worked admirably. America spent and spent and the USSR tried to keep up and eventually collapsed into bankruptcy. We The People played the role of the USSR in the past decade. Imagine how much more pliable We are now that we feel grateful to simply have a job? We know that we're losing, but we still have our noses above water right? Too bad about your former neighbor who apparently went under and moved out as his house was foreclosed, and your brother-in-law whose successful start-up went bust because he couldn't get loans to expand when he needed to. At least it wasn't you.

"A big part of what happened this decade was that people engaged in excessively risky behavior without realizing the risks associated," said Karen Dynan, co-director of economic studies at the Brookings Institution. "It's true not just among consumers but among regulators, financial institutions, lenders, everyone."

I'm going to use my soapbox here for a moment and point out that I exclude myself from the above. My modest (tiny even) house is paid for, as are my vehicles. I have no debt. I did not try to spend what I did not have to live high off the hog. I have savings (considerably less than a few years ago to be sure). Some of you may be in the same situation, having chosen wisely and responsibly, and to you I offer my congratulations and my admiration, as well as my shared sympathy for the woes we suffer for having been responsible, and yet face similar consequences as those who created the mess. In Aesop's Fables, the grasshopper eventually understood the error of his ways and, presumably, suffered the consequences. I wonder if We The People understand our part in our failure?

They're Both Right

2010-01-04T07:49:00.000-08:00

In the ongoing cleanup of our financial meltdown, it is wise to keep attention on who is blaming whom, and why. Any sort of common sense reading of the shenanigans within the banks leads one to feel Federal Reserve Chairman Bernanke has this right:

Regulatory failure, not low interest rates, was responsible for the housing bubble and subsequent financial crisis of the last decade, Ben S. Bernanke, the Federal Reserve chairman, said in a speech on Sunday. [snip] Mr. Bernanke, in his talk, echoed his previous calls for Congress to grant the Fed greater oversight powers over the financial system, like the ability to help monitor and regulate against “systemic risk.” [snip] Mr. Bernanke has pointed to the Fed’s extraordinary efforts to stem the crisis, including the creation of new lending vehicles to banks and a reduction of bank-to-bank interest rates to virtually zero, as evidence that the Fed has a firm grasp of what the economy needs. The Fed’s handling of the crisis has been widely praised by economists.

And yet, is the Fed itself regulating itself with the best interests of We The People at heart? Some, from both the Right and the Left, think otherwise:

“I strongly disapprove of some of the past deeds of the Federal Reserve while Ben Bernanke was a member and its chairman, and I lack confidence in what little planning for the future he has articulated,” Richard Shelby of Alabama, the Senate Banking Committee’s top-ranking Republican

And Vermont Senator Bernie Sanders (I-VT) adds this:

“The American people want a new direction on Wall Street and at the Fed. They do not want as chairman someone who has been part of the problem and who has been responsible for many of the enormous difficulties that we are now experiencing,” Sanders said. “It’s time for a change at the Fed.”

It probably matters that We understand just what the Federal Reserve is. This transcript from the Thom Hartmann radio show on Air America states it in a pretty clear way:

“The Federal Reserve System is not “owned” by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation’s central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as “independent within the government.”

This again from Senator Bernie Sanders:

The Federal Reserve has four main responsibilities: to conduct monetary policy in a way that leads to maximum employment and stable prices; to maintain the safety and soundness of financial institutions; to contain systemic risk in financial markets; and to protect consumers against deceptive and unfair financial products.

Since 2006, the Fed has poured literally trillions of dollars into Wall Street corporations and banks at nearly zero percent interest Did We The People get what we need from that sweetheart deal? I think not. During that same time unemployment doubled, more than 120 banks have failed on Bernanke's watch, the value of risky derivative investments nearly tripled from $110 trillion to $290 trillion and that risk became concentrated in just five institutions, predatory lending practices flourished despite the FBI warning of an epidemic of mortgage fraud, and, as a final slap in the face, the Fed could have acted transparently during the TARP bailout but instead chose to not reveal which banks got money nor how much and under what terms. (refer to Sander's link, above)

Both of the sentiments listed at the top of this post are correct. The Fed needs monitoring and needs to be held accountable for its actions. That may mean that the Fed needs more authority to do that job. Those are not mutually exclusive concepts. It means that we have someone whose job it is to watch out for We The People provides oversight of the Federal Reserve. And that ultimately means an elected official and a Fourth Estate that actually does its job (for a change). In the olden days they had pitchforks and torches. We need a press that functions in much the same way.

Goldman Sachs bonuses vrs. Worst Decade in Modern Times

2010-01-02T12:36:00.000-08:00

I ran across these to references back-to-back, and they annoyed me so much I felt the need to share:

"Goldman Sachs bonuses: $23 billion"
"The Worst Decade in Modern Times"

Goldman, the beneficiary of taxpayer dollars as part of TARP, is paying out the largest bonuses in its history. And,

Because most employee compensation is a deductible expense under tax laws, Goldman Sachs, which is technically taxed at a top corporate rate of 39 percent, will save about $9 billion in federal income taxes on the bonuses it pays out for 2009

Meanwhile, in the world that We The People inhabit:

The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 - and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

And the net worth of American households - the value of their houses, retirement funds and other assets minus debts - has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s...

Are you pissed off yet? Face it, the vast majority of us live in a world where our economic power is slipping away. Our generation will NOT be better off than prior generations. And it is happening because of systemic looting and pillaging at the top levels. Corporations are hugely successful, yet jobs are moved overseas to cut expenses. You see, we cost too much. We are encouraged to buy, buy, buy, but our earning power is slipping. The only ones getting rich are those who are rigging the game against the rest of us. We have no say in whether or not our job remains on-shore. We get almost no input on the way corporate taxes are structured. We - as a collective whole - are too busy rooting through the dregs to see that those wielding the slop bucket are fatter than ever. We are told The Story and we buy into it, convinced that we are lucky just to have a job.

We Are Being Held Down in a deliberate and far-reaching way. Wake up. Get mad. Get Active. DO something about it. Educate yourself. Know from whom you are buying and consider why you are buying it. Where does the dollar you spend end up? As an anecdotal aside, I recall a conversation I had with a coworker, a dedicated American car purchaser. I mentioned that I was looking at either a Mitsubishi or a Dodge, similar cars. She banged her hand on the table and said, "Buy the Dodge!" I pointed out that, in fact, the Dodge was made in Japan by Japanese workers, but the final sales dollars went to the American CEO who made (at that time) some 300 times what the line workers were making. The Mits, on the other hand, was assembled in the US, by American union workers, and the final sales dollars went to the Japanese CEO who made only 48 times what the line workers made. Who did she want me to feed: The American Workers, or the grossly overpaid suit? Knowledge is power, dear readers.

$200,000 per minute

2009-12-28T10:08:00.000-08:00

Afghanistan War spending for 2010 is now expected to exceed $102.9 billion, or $12 million per hour, or $200,000 per minute!

Just remember exactly why it is we don't have money to reform health care or jump start job creation.

(source: Mother Jones)

Creating Toxic Assets to Profit From the Collapse

2009-12-28T07:46:00.000-08:00

I am certain that there are some readers out there who still somehow think that our financial crisis was caused by greedy poor people buying houses that they couldn't afford. Then when the economy tipped a little bit, the weight of their snow-balling defaults kept the economy on a downward slide. After all, it is what some cable media people were telling you. That assumption plays well with hard working Americans because the alternative is to believe that those at the top - the respectable people in fancy suits running Our banks were actually doing something wrong. [article]

Guess what? It gets a bit complicated but I'll walk you through it.

[An up-and-coming Goldman Sachs employee created] mortgage-related securities, named Abacus, that were at first intended to protect Goldman from investment losses if the housing market collapsed. As the market soured, Goldman created even more of these securities, enabling it to pocket huge profits. Goldman’s own clients who bought them, however, were less fortunate.

We have all been hearing about these so-called "toxic securities" that the banks were sitting on as things collapsed, but this sounds a bit different. This sounds like the banks created stinky assets, sold them to investors, then bet against them.

Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments

Goldman was not the only firm that peddled these complex securities — known as synthetic collateralized debt obligations, or C.D.O.’s — and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail, according to Wall Street traders, include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner.

Isn't also nice to know that the fox is watching the hen-house for us? We can be fairly certain that next to nothing will change as a result of a Geithner-led investigation. Nevertheless, We The People need to know this so we can force the issue and make real change happen.

One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.

Our ignorance is blissful for those in financial power. As long as We keep scrabbling for our dollar, they can fleece Us for their millions. The stink of this practice is overwhelming. It is true that any prudent investment strategy calls for hedges against possible changes in the economy. In the simplest terms, it is like owning both stocks and bonds because each generally performs well when the other is not. But most investors don't create a massive failure so that their hedge can profit extraordinarily.

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,” said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

It is also important to note that this is not an accident, or some sort of one-off switch-a-roo.

The creation and sale of synthetic C.D.O.’s helped make the financial crisis worse than it might otherwise have been, effectively multiplying losses by providing more securities to bet against. From 2005 through 2007, at least $108 billion in these securities was issued, according to Dealogic, a financial data firm. And the actual volume was much higher because synthetic C.D.O.’s and other customized trades are unregulated and often not reported to any financial exchange or market.

And the assets in question were unregulated. Why do you suppose that was? Who do you suspect profits when financial shenanigans go under the radar?

A handful of investors and Wall Street traders, however, anticipated the crisis. In 2006, Wall Street had introduced a new index, called the ABX, that became a way to invest in the direction of mortgage securities. The index allowed traders to bet on or against pools of mortgages with different risk characteristics, just as stock indexes enable traders to bet on whether the overall stock market, or technology stocks or bank stocks, will go up or down.

Goldman, among others on Wall Street, has said since the collapse that it made big money by using the ABX to bet against the housing market.

Ponder that, dear readers. In 2006 there were people shaping a mortgage crisis, who built an index to monitor that developing crisis, then reveled in the collapse making billions of dollars. If you are in foreclosure right now, or can see the possibility of it from where you are, then you must be pretty angry right about now. You might want to contact your Senator and Representatives and make certain they know just how this makes you feel.

And what happens to the people who play fast and loose with your castle?

Mr. Egol and Fabrice Tourre, a French trader at Goldman, were aggressive from the start in trying to make the assets in Abacus deals look better than they were [snip] Goldman’s bets against the performances of the Abacus C.D.O.’s were not worth much in 2005 and 2006, but they soared in value in 2007 and 2008 when the mortgage market collapsed. The trades gave Mr. Egol a higher profile at the bank, and he was among a group promoted to managing director on Oct. 24, 2007.

“Egol and Fabrice were way ahead of their time,” said one of the former Goldman workers. “They saw the writing on the wall in this market as early as 2005.” By creating the Abacus C.D.O.’s, they helped protect Goldman against losses that others would suffer.

But hey, claims Goldman, we played fair. We said there was risk. It's the investors fault for being greedy!

The Goldman salesman said that C.D.O. buyers were not misled because they were advised that Goldman was placing large bets against the securities. “We were very open with all the risks that we thought we sold. When you’re facing a tidal wave of people who want to invest, it’s hard to stop them,” he said. The salesman added that investors could have placed bets against Abacus and similar C.D.O.’s if they had wanted to.

Funny, earlier in the article it specifically states that Goldman was quietly buying the shorts and rarely selling that option to investors. It's a bit like those lottery ads on the radio that make it all exciting and trumpet how you can win millions, and then the odds of winning are tacked on at the end of the ad at breakneck speed that no one could catch. But hey, we warned you!

The banks themselves met and established the rules that would be in effect. In fact, they created new rules that more quickly fleeced those holding the toxic investments that the banks themselves created.

This is exactly the reason that unfettered business is a Bad Idea. While I am all in favor of capitalism, it has to be on a level playing field. Those at the top simply cannot be allowed to make the rules whereby they profit at Our loss. The entire point of this blog, Pitchforksandtorches, is to function as a wake up call. It is a call to action. In a Democratic Republic such as ours, the simplest thing you can do is holler, frequently and intelligently and preferably in writing, to your elected officials. If you believe they are not acting in your best interest, then WORK to find a better candidate and get that person elected. Heck, that better person might even be you. These are the preferred Pitchforks and Torches in a civilized society, but just like their literal namesakes, they work better in a large group.

Pass along this blog if you believe in what I am trying to do. Tell like-minded friends and family. Tell those who you think disagree and have conversations about it. Read the articles I link to and get your information straight from the source rather than through my filter. Use the knowledge you gain to ask more questions and seek out your own answers from other sources. Our ignorance is Their best tool. Our knowledge becomes Their restraint.

"You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time. ~ attributed to Abraham Lincoln."

"Don't get fooled again!" ~ The Who

Americans are getting ripped off

2009-12-26T17:26:00.000-08:00

Here is a link to a graphic that shows health care dollars spent versus life expectancy (at birth) as well as frequency of doctor visits. If there is a clearer example of the following statement, I'd like to see it:

Americans are getting ripped off.

http://andrewsullivan.theatlantic.com/.a/6a00d83451c45669e20120a77d19db970b-popup

I would be curious to see how much the proposed reform moves this absolutely astonishing line.

A Christmas Carol for 2014

2009-12-25T07:34:00.000-08:00

A few excerpts from Paul Krugman's op-ed in today's NYT.

It begins with sad news: young Timothy Cratchit, a k a Tiny Tim, is sick. And his treatment will cost far more than his parents can pay out of pocket.

Fortunately, our story is set in 2014, and the Cratchits have health insurance. Not from their employer: Ebenezer Scrooge doesn’t do employee benefits. And just a few years earlier they wouldn’t have been able to buy insurance on their own because Tiny Tim has a pre-existing condition, and, anyway, the premiums would have been out of their reach.

But reform legislation enacted in 2010 banned insurance discrimination on the basis of medical history and also created a system of subsidies to help families pay for coverage. Even so, insurance doesn’t come cheap — but the Cratchits do have it, and they’re grateful. God bless us, everyone.

It's off to a fine start, isn't it? But despite all the happy ending overtones, there are still people who are grousing. Whatever are they grousing about? Let's look in again.

First, there’s the crazy right, the tea party and death panel people — a lunatic fringe that is no longer a fringe but has moved into the heart of the Republican Party. In the past, there was a general understanding, a sort of implicit clause in the rules of American politics, that major parties would at least pretend to distance themselves from irrational extremists. But those rules are no longer operative. No, Virginia, at this point there is no sanity clause.

Yes, it is awfully challenging to take the complaints coming from right field too seriously. They simply aren't cogent, and often aren't even coherent.

A second strand of opposition comes from what I think of as the Bah Humbug caucus: fiscal scolds who routinely issue sententious warnings about rising debt. By rights, this caucus should find much to like in the Senate health bill, which the Congressional Budget Office says would reduce the deficit, and which — in the judgment of leading health economists — does far more to control costs than anyone has attempted in the past.

But, with few exceptions, the fiscal scolds have had nothing good to say about the bill. And in the process they have revealed that their alleged concern about deficits is, well, humbug. As Slate’s Daniel Gross says, what really motivates them is “the haunting fear that someone, somewhere, is receiving social insurance.”

I have had this conversation with people. They are foaming at the mouth about "socialism" and "fascism" (and I have to repeatedly challenge them to look up fascism in the dictionary and report back to me just who in this debate sounds like the fascists). They generally get a pole-axed look when I point out that public schools are a socialist benefit. If I think they are particularly bright, I ask them to imagine a scenario where they call 9-1-1 in an emergency and the dispatcher responds, "An police cruiser will be dispatched momentarily. But first, will that be Visa or Mastercard?" Ah yes, that sort of socialism is fine. But not the kind that benefits someone else, especially if they are poorer than me.

Finally, there has been opposition from some progressives who are unhappy with the bill’s limitations. Some would settle for nothing less than a full, Medicare-type, single-payer system. Others had their hearts set on the creation of a public option to compete with private insurers. And there are complaints that the subsidies are inadequate, that many families will still have trouble paying for medical care.

There is a longer reach option that would have been best. Imagine (after reading the bill rather than listening to "Headline News" or "Screaming Head News") just how many people are actually covered, and subsidized, who have been out of the game until this point. It will still be a challenge for some people. Many will have something when they had nothing. People like me who are new small-business owners with little income will be able to afford something (my current health care costs are about 100% of my gross income).

My real gripe is reserved for Republicans. They have had decades to create policy about health care but chose instead to merely talk about it and stonewall any efforts by the Dems while simultaneously spending un-budgeted money on misguided wars and the single largest unfunded expansion of Medicare in its history while reducing taxes on Corporations and the wealthiest Americans. I would have loved for genuine conservatives to have created a plan for comparison. But neocons are not conservatives, and the GOP, appearing to be led from the loudest loonies mentioned above, became the party of "No", and had nothing to contribute. Perhaps they will get their act together and curtail the worst of the fiscal concerns, though I suspect their answer will be to trim benefits from the neediest so that the likes of Cigna and Blue Cross can make more profit. That is the wrong answer for this problem, and they will find little support at the moment, but they could get more traction if the economy remains tough. Watch for the GOP to start stonewalling job creation efforts and you will know where their true heart lies (I would love nothing more than to be wrong about this prediction).

For now, I feel a little disappointment well-tempered by a greater sense of (if you'll forgive the pun) general relief.

Helath Care: Early Benefits

2009-12-22T13:25:00.000-08:00

Here is a link to a PDF file that gives a very brief description of benefits that will kick in during 2010. It will likely raise as many questions as it answers, so ask questions (of your elected representatives).

NIMBY

2009-12-22T06:53:00.000-08:00

The Obama administration is trying to balance conservation demands with its goal of radically increasing solar and wind generation by identifying areas suitable for large-scale projects across the West.

And in the case of this article, that balance is a necessity of finding a path between the "Drill, baby. Drill!" mindset of those addicted to oil and the "Save the trees!" mindset of die hard environmentalists. There are some basic truths to being an American, and one of them is that We use a lot of natural resources. We really don't think a lot about where and how are goods and services come from. There is a push to shop increasingly for locally produced goods, and the trend in autos is headed in the right direction. However, there is simply no comparison between the fuel efficiency of a private auto, be it ever so green, and a nice full metro bus (think in terms of passenger miles per gallon).

Senator Dianne Feinstein introduced legislation in Congress on Monday to protect a million acres of the Mojave Desert in California by scuttling some 13 big solar plants and wind farms planned for the region.

And here we see some of the problem at the highest level. We cannot have simultaneously warm houses, a transportation infrastructure, Hi-Def televisions, and the millions of other comforts we take for granted, and maintain a Not In My BackYard mentality about energy production. Switching from drilled oil and mined coal means chewing up hundreds of thousands of acres of land suitable for wind and solar farms somewhere.

“This is arguably the best solar land in the world, and Senator Feinstein shouldn’t be allowed to take this land off the table without a proper and scientific environmental review,” said Robert F. Kennedy Jr., the environmentalist and a partner with a venture capital firm that invested in a solar developer called BrightSource Energy. In September, BrightSource canceled a large project in the monument area.

So if not there, where? If not now, when? If the Obama administration is to move forward with radical programs to produce wind and solar energy production, then that means - in no uncertain terms - that the process has to move along rapidly and as inexpensively as possible. That means using lands that are low-hanging fruit: Undeveloped, optimal, and not so very useful for other human activity.

I offer a proposal for We The People. Let plans for radical development of new energy production occur. In exchange, we preserve greenspace and wild lands in other locations by limiting urban sprawl. No more McMansions on 1 acre lots of former farm fields. No more new subdivisions of 3,500 sq. ft. houses for two or three people a mile or three out of town for people who want to pretend they are Thoreau living at Walden (albeit with a significantly increased impact). No more 4-lane roads out to the 'burbs where every single adult commutes into the nearby city, often in separate cars. Instead We need to favor urban infill projects. We need to stop subsidizing things that encourage sprawl and waste of energy resources (like highway development at the expense of mass transit infrastructure).

Something has to give. We know it. We just don't want it to limit Us, personally. As long as limits affect someone else, someone either richer or poorer than me, then such plans are fine, right? I have news for you. Unless you are already living in a dense population area and biking, riding a bus, or ride-sharing to work, you are going to feel the effects of the next decade in a profound way.

No more wars for oil. Let's evolve.

Health Care Bills Compared

2009-12-21T07:28:00.000-08:00

Here is a link to a simplified comparison to the two versions of the health care reform bill. It picks 15 topics and does a side-by-side of key elements. While not enough for a thorough understanding, it provides a good list to get you started about what is on the table, or not. Some examples:

- both bills have a penalty for people who do not buy coverage, though both have some exemptions. Most people will be required to buy or be penalized.
- Both bills still force or provide incentive employers to provide this benefit, though the Senate version makes more sense to me.
- the House version still has a "public option" to negotiate rates and provide start-up funds. Premiums would be required to cover benefits (no government subsidy other than theoretically lower premiums from negotiated rates). The Senate bill would instead have a government office sign contracts with insurers to offer at least two national health plans to individuals, families and small businesses. The new plans would be separate from the program for federal employees, and premiums would be calculated separately. At least one of the plans would have to operate on a nonprofit basis. I wonder how that will work?
- both bills offer some subsidy for families making less than 400 percent of the federal poverty level ($88,200 for a family of four). The details are not specified here. Since this will affect me directly, I am curious about this. More later!
- both plans expand Medicaid to cover the poorest Americans. Details vary.
- the House version thoroughly stigmatizes, and refuses to cover, abortions. The Senate version applies some restrictions but is considerably less harsh.
- Illegal immigrants could buy coverage, without subsidy, in the House version but would be prevented from buying coverage from the plans created under the Senate bill. Presumably they could still buy insurance directly from a provider at the providers discretion.

So there are a few highlights to get you a bit more informed. As always, I encourage you to pursue this on your own to get your questions answered.

Morgan Stanley’s Mack gives up on bonus

2009-12-20T15:29:00.000-08:00

Perhaps the rage from We The People is, in fact, palpable and properly focused. This story warms my heart.

Mr Mack was mindful of the anger at bankers’ compensation, and the distraction a bonus might create as he prepared to step aside. As an executive who has managed his public persona carefully, Mr Mack may also have weighed the effects on his legacy.

Mr Mack is likely to earn about $800,000 in salary this year – a low amount for a Wall Street chief.

His move will increase the pressure on other top executives at rivals such as Goldman Sachs not to take a bonus.

The cynic in me will file this away, and check the quarterly reporting from Morgan Stanley to see if he will simply get a going-away present later in 2010 when Our attention is distracted by spring training or spring planting. For what it's worth, I consider the odds of a misdirection play like that are better than 50-50. I would love to be surprised by Mack actually doing the right thing. For the moment I will give credit where credit is due, and acknowledge that this is a Right Choice. Good on you, Mr. Mack.

Just Say No to Whoopie, continued

2009-12-20T07:51:00.000-08:00

It is always interesting to me to see what sneaks into a bill in the dark of the night when Senators think that no one is paying attention.

The health care reform bill approved by the Senate Finance Committee includes an amendment, introduced by the Republican Senator Orrin Hatch, that would revive a separate $50 million grant-making program for abstinence-only programs run by states.

Good old Orrin Hatch, a safe bet to making sure that ineffective ideology remains part of public policy. Never mind that abstinence-only programs have been a dismal failure.

Texas has the third highest teen birth rate in the nation -- 50% higher than the national average [snip] increases across all "races and ethnicities ... demonstrate that the current lack of sexual health curriculum in our schools is seriously harming all of our children." [snip] 94% of students in Texas receive abstinence-only sexual education and, to date, more than $1 billion in federal funding has been spent on abstinence-only education. Texas ranks No. 1 in the amount of federal funding for "abstinence-only education dollars in the country -- more than $18 million"

Legislation based on wishful thinking is what the GOP always accuses the Left of. This is as clear a case of wishful thinking intended to use policy to shape behavior (another Right against Left canard) as I can probably find. Let's strip this out of the final bill, shall we Nancy?

Goldman Bankers Arming Themselves

2009-12-19T08:33:00.000-08:00

How nice. The senior management of Goldman must be aware of my blog!

The "senior Goldman people" may be spending too much time trolling the Internet. If you read the comments posted after just about any blog item or feature article referencing Goldman, the venom expressed would surely lead you to imagine that a mob armed with pitchforks and torches was already on their way to Goldman headquarters. It's a bipartisan frenzy, and as Goldman profits continue to accumulate while the economic slump persists, the bile will continue to percolate.

(emphasis added)

senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank

Rest easy in your gilded cage. And gilded it is: Lloyd Blankfein, CEO and Chairman of the Board, owns 1,685,932 shares of Goldman, worth $274,393,733.

Months and Millions to Keep the Status Quo

2009-12-19T08:13:00.000-08:00

As of this morning, it looks like some sort of health care reform bill will come out of the senate today. It seems the Dems got their 60 votes. Of course, I have not read this final bill, nor have I heard a thorough analysis of it yet. I suspect what it will be is, to borrow a line from Matt Welch at Reason.org, a "plan doubles down on most everything that's bad with the current system."

I have stated repeatedly, and will do so again: Significant health care reform would decouple health benefits from employment. Doing so would have several immediate effects. It would reveal the true cost of health care because employers would, after ending coverage, need to provide that same offset to employees as wages, and those wages would be whisked away as the employee wrote the check for health care. It would also free up potential entrepreneurs to strike out on their own without being tied to a corporation for the benefits package.

That assumes that health care is also affordable, and that 30 percent of premiums weren't skimmed right off the top by the likes of Cigna or Blue Cross to cover administrative salaries and executive compensation (like the $25.8 million that Cigna CEO H. Edward Hanway waltzed away with in 2007). With a for-profit model for health care insurance, there is little chance of meaningful reform. A government-offered single-payer public option (essentially a buying pool with no profit being made for those of you who think this is some sort of socialism) would have been the only dent in the corporate monopoly of health care. But we don't get that now.

Here's what I think we'll get when the dust settles: A requirement to buy health insurance from a for-profit provider at whatever rate they want to charge us (with a minor penalty if we decline to purchase it), and while the health care corporation will not be allowed to decline coverage for pre-existing conditions, they will be free to charge exorbitant rates for things like age, existing conditions, or potential conditions including pregnancy.

The end result for a self-employed guy like me? Expensive, mandatory payment for decent coverage no different - or worse - than I have now. Piss on the obstructionist Republicans and spineless Democrats. There will be little or no chance to fix this later with add-on bills because the Dems are going to lose many seats in the mid-term elections. Congratulations elected representatives. You spent months and millions to keep the status quo. Consider me unimpressed.

Despotism ~ An Erpi Classroom Film

2009-12-18T13:03:00.000-08:00

I urge you to take 10 minutes out of your day and watch THIS FILM, produced in 1946 by Encyclopedia Britannica Films. Fresh from WWII and at the start of the Cold War, this film looks at general definitions and measurements by which we can understand a despotic state and how the slide to such a state occurs.

I REALLY want to hear your reactions.

A few teaser quotes:

Well for one thing, avoid the comfortable idea that the mere form of government can of itself safeguard a nation against despotism.

When a competent observer looks for signs of despotism in a community, he looks beyond fine words and noble phrases. [cut to adults reciting the 1946 Pledge of Allegiance: "...for which it stands. One nation, indivisible, with liberty and justice for all." Notice anything missing?]

If a community's economic distribution becomes slanted, its middle-income groups grow smaller [as wealth shifts to a smaller, wealthier group], and despotism stands a better chance to gain a foothold.

Another sign of a poorly balance economy is a taxation system that presses heaviest on those least able to pay.

A community rates low on the Information Scale when the press - radio and other channels of communication - are controlled by only a few people.

Here is a little homework quiz for you. Who owns the media in your market? How easily can you find out? How many independent radio or television stations are there? How many independent newspapers? Trace the ownership to the top of the tree and see how much of your content is provided by one or two corporations. How much content is spun, filtered, screened, emphasized or downplayed due to editorial control or advertising pressure? Do you take your news from a single source, or do you make an effort to hear multiple sides of each issue?

One last quote:

...and to find out which way [your community] is likely to go in the future, you can rate it on Economic Distribution and Information scales. The lower your community rates on Economic Distribution and Information scales, the lower it is likely to rate on Respect and Power scales, and thus, to approach despotism. What happens in a single community is its own problem, but it is also a problem of us all.

Where DO we rate on these scales? Surely not at the bottom, though perhaps trending that way? What do you intend to do about it?

Let Them Eat Cake

2009-12-16T08:36:00.000-08:00

Many of the same lawmakers that We The People hear daily yammering on and on about how expensive the proposed health care reform will be ($1 trillion over 10 years is the CBO estimate being bandied about) are the very same ones who enthusiastically supported Bush II's tax cuts. The organization Citizens For Tax Justice (a watchdog group active since 1979) published an interesting white paper (PDF) assessing the annual and cumulative costs of those tax cuts.

The total of the cuts for all recipients is $2.106 trillion over 10 years. Since those cuts occurred while we were engaged in two wars that were never included in the budget, the cuts were financed by deficits. You may recall Vice President Dick Cheney's infamous quote that "deficits don't matter." It turns out, they do matter. When you add in the debt servicing - interest - those Bush tax cuts amount to $2.485 trillion. In other words, the deficit funded tax cuts cost We The People nearly two-and-a-half times what the proposed health care reform would cost.

We can afford tax cuts for the richest 20% of the employed but we cannot afford health care assistance for the bottom 50%. Are you liking how that feels?

Let's go back to those tax cuts and see just who got the most benefit from them. Those who support them would like you to believe that everyone benefited. And that is true, as far as it goes. But who got what? Let's follow the money.

Out of that 2.106 billion dollars, those in the top 1 percent of earners (the fat cats at the top earning $1.4 million or more per year) got $674 billion, or 32 percent of the pie, basically a third. The next 4 percent (those earning $249k or more) got $305 billion, roughly 15 percent. So the top 5 percent of wage earners received just shy of 50% of the total benefit of those tax cuts. The next 15 percent of wage earners (those earning $114k or more) got $506 billion, or 24 percent of the total. That means that the wealthiest 20 percent received over 70 percent of the tax cut benefit that was funded by deficit spending.

We The People gave the wealthiest Americans a tax break - money in their pockets - and put it on our American Credit Card.

[pause while that sinks in]

Meanwhile the remaining 80 percent of Us (those earning less than $114k) divvied up $622 billion in "benefit" (the unfunded spending spree with a bill coming due from China), or roughly the remaining 30 percent of the pie.

For those of you who are tax savvy, you might be thinking that those tax cuts sound great, but that great big bill did not adjust the Alternative Minimum Tax (sort of a backstop designed to make sure that everyone pays at least some income tax). That's true, the original bill did not. However each year Bush and Congress adjusted the AMT downward so that those at the top got more benefit from those tax cuts.

I'm all for tax cuts when they are paid for. What Bush did was utter madness.

US Income Inequality Continues to Grow

2009-12-15T17:47:00.000-08:00

It is not your imagination that things seem worse than "before", especially if what you mean by before was your parents' prime years. While we continue to surround ourselves with Hi-Def televisions and a gajillion cable channels, iPods and iPhones, and a plump mortgage and think we are doing splendidly, the truth of the matter is that we are not. We are steadily losing buying power as compared to prior decades when adjusting for inflation. This article, originally published in the Madison, WI, Capitol Times on July 17, 2009, spells it out. Recent years were terrific if you were at the top of the heap.

During eight years of the Bush administration, the 400 richest Americans, who now own more than the bottom 150 million Americans, increased their net worth by $700 billion. In 2005, the top 1 percent claimed 22 percent of the national income, while the top 10 percent took half of the total income, the largest share since 1928.

Niiice. A different way to look at it is to compare the relationship of those earnings at the top with the average American paycheck. How did it play out for the rest of us? Not so well it turns out.

The highest incomes come from executive pay at top corporations. In 2007, the ratio of CEO pay to the average paycheck was 344 to 1, lower than the record 525 to 1 ratio set in 2001, but substantial.

This year's ratio is estimated to decrease to 317 to 1. In the '60s, '70s and '80s, the average ratio fluctuated between 30 and 40 to 1.

Great huh? For the 30 years prior to Reaganomics really kicking in, the big boss made about 30 times what you did. Is simple terms, if you made $10/hour, the head honcho made $300/hr. Then things changed and executive salaries took off. At the worst of the excess, the big boss was making $5,250/hour to your measly $10. And now that poor big boss's salary has dipped to merely $3,170/hour against your same old $10/hour. And all along We The People heard the same thing at salary review time: "Things are tight this year. We all have to suck it up and keep trying harder."

That disparity in salary also had a tremendous impact on net worth, the sum total of your cash and investments plus such things as your house (less outstanding mortgage).

In 1955, IRS records indicated the 400 richest people in the country were worth an average $12.6 million, adjusted for inflation.

In 2006, the 400 richest increased their average to $263 million, representing an epochal shift of wealth upward in the U.S.

During that same period, pensions largely disappeared and we were all encouraged to buy into the 401(k) scheme. Sure it has the potential to do well, though mine is not looking so great these days. Fortunately I do not need it today so I am merely set back, not destitute or forced come out of retirement (I am not retired!).

So what changed? Lots of things: Salaries, Tax rates, tax loopholes and shelters, Corporate taxes, health care costs, and the Story that was pitched to us.

In 1955, the richest tier paid an average 51.2 percent of their income in taxes under a progressive federal income tax that included loopholes. By 2006, the richest paid only 17.2 percent of their income in taxes. In 1955, the proportion of federal income from corporate taxes was 33 percent; by 2003, it decreased to 7.4 percent. Today, the top taxpayers pay the same percentage of their incomes in taxes as those making $50,000 to $75,000, although they doubled their share of total U.S. income.

Earlier I said that salaries for the likes of us stayed the same or even declined slightly. We now know that those at the top certainly did not have that problem! What was our reality?

Meanwhile, wages for most Americans didn't improve from 1979 to 1998, and the median male wage in 2000 was below the 1979 level, despite productivity increases of 44.5 percent. Between 2002 and 2004, inflation-adjusted median household income declined $1,669 a year. To make up for lost income, credit card debt soared 315 percent between 1989 and 2006, representing 138 percent of disposable income in 2007.

Remember all those pep talks at work about "working smarter, not harder", and "making do with less"? It seems like I heard that song routinely. Congratulations! We did it. We worked smarter and increased productivity. For our efforts, we were allotted meager raises that actually trailed behind inflation and ever-rising health care costs. In an effort to maintain that sense of class - where we fit in as the Middle Class - we blew up our credit card debt and ran steadily larger mortgages as a percentage of our income.

It is exactly this topic that made me call this blog Pitchforks and Torches. What are We going to do to curtail the exploitation occurring so systematically at the top? It seems our legislators are in the game just as deeply, and merely pander to Us rather than correct the imbalance. The game is rigged against us. We have too few votes with our puny stock holdings to change corporate direction. Our Senators and Congresspersons generally are not in the fight for us (there are exceptions). Do we have to unite for a collective demonstration of our power? It seems like it. But what? What will it take to make ENOUGH people wake up and get angry enough to actually do something to set things right?

Grab your whetstone and tinder box

2009-12-15T16:16:00.000-08:00

Welcome to Pitchforks and Torches. The name is designed to set a mood; a mood for encouraging working-class Americans to take back their economic power, their liberty, and their dignity. By "working-class" I mean those not in the top 10% or so of earnings - line workers, hourly employees, office staff, and even mid-managers. While not literally encouraging you to take to the streets and drag shameless robber-barons from their McMansions and set those palaces on fire, I find the correlation between our current situation and the events leading up to the French Revolution to be...interesting.

I hope to help you understand just exactly what has been done to We The People over the past 50 years or so, and continues to be done. This is neither a Democrat nor Republican site. Both those parties have sold us down the river at times, and both have actually had our collective backs on occasion. Rather, this is a blog that intends to point out that you and I have steadily lost buying power and economic clout while those at the top of the heap have increased their wealth disproportionately and at our expense. We have often been duped by great phrases ("Trickle-down Economics") and sleight of hand misdirection (Health care reform means death panels), that take our eye off the real beneficiaries of the status quo or proposed change.

I will turn over news rocks and look past the headlines and see if I can find the rest of the story. I will point out the alternative news that dovetails with the headlines. It is my intent to have no sacred cows, no untouchable topics or persons upon which I will not shine my light. I will not always get it right. I will argue points that turn out to be wrong. For that I apologize in advance, and promise that when it is clear that I am wrong, I will blog that correction as well.

Your voices in the comments will let me know if I am on the right track or not. For now the comments will remain open and not moderated. I reserve the right to turn on some filtering if those leaving comments cannot be civil (attack the topic not the person) or routinely try to divert the topic to a talking point (trolls).

Stay tuned!