Why the Big Lie About the Job Crisis? And the $10 Trillion Answer

by Les Leopold

The August unemployment numbers are ugly, yet again. Nearly 30 million Americans are still jobless or forced into part-time jobs. The Bureau of Labor Statistics official unemployment rate is 9.6%. It's borader and more telling jobless rate (U6) of 16.7% confirms that we're stuck in our own version of the Great Depression. We'll need more than 22 million new jobs to bring us back to full-employment. Happy Labor Day.

Irish Worries For The Global Economy

By Peter Boone and Simon Johnson

Is the global economic recovery still on track? The mainstream view is: yes, without a doubt. But increasingly, there are increasingly reasons to fear another financial disruption – particularly given the latest developments in Ireland.

The consensus among officials and most of the international banking community is that the global economy has stabilized and is now well down the road to recovery. The speed of this recovery is proving disappointing – as seen in the revised second-quarter growth estimate for gross domestic product in the United States, with annualized growth down to 1.6 percent. But, according to this view, easy monetary policy and still-loose fiscal policy around the world will keep sufficient momentum going.

BP Says Limits on Drilling Imperil Spill Payouts

By CLIFFORD KRAUSS and JOHN M. BRODER

BP is warning Congress that if lawmakers pass legislation that bars the company from getting new offshore drilling permits, it may not have the money to pay for all the damages caused by its oil spill in the Gulf of Mexico.

The company says a ban would also imperil the ambitious Gulf Coast restoration efforts that officials want the company to voluntarily support.

BP executives insist that they have not backed away from their commitment to the White House to set aside $20 billion in an escrow fund over the next four years to pay damage claims and government penalties stemming from the April 20 explosion of the Deepwater Horizon drilling rig. The explosion killed 11 workers and spewed millions of barrels of oil into the gulf.

Rosy Rhetoric On New Unemployment Numbers Doesn't Match Reality For Many Americans

Megan Carpentier | September 3, 2010, 11:02AM

On the cusp of America's celebration of labor's place in American life, the Labor Department released its monthly review of employment statistics to relatively optimistic reactions from the White House and the media, despite the fact that 54,000 fewer Americans had jobs at the end of August than did in July.

The cause for all the celebration is that the 54,000 net new unemployed Americans were mostly Census workers who expected to be unemployed by September, so the overall increase in unemployment wasn't really that bad. But, a deeper look at the numbers belies the rosy rhetoric.

Exclusive: Major human trafficker is huge GOP donor who fought illegal immigration

By Sahil Kapur
Friday, September 3rd, 2010 -- 10:06 am

A business owner indicted for the human trafficking of 400 laborers from Thailand is a frequent donor to the Republican Party and recently waged war against other companies involved with hiring illegal immigrants.

The Associated Press reports that according to the allegations, "the recruiters lured the workers with false promises of lucrative jobs, then confiscated their passports, failed to honor their employment contracts and threatened to deport them."

How to End the Great Recession

By ROBERT B. REICH
Berkeley, Calif.

THIS promises to be the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor — most of the rest of us — are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, while at least 125,000 are needed to keep up with the growth of the potential work force.

The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working: near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package and tax credits for small businesses that hire the long-term unemployed have all failed to do enough.

Paul Krugman: The Real Story

Next week, President Obama is scheduled to propose new measures to boost the economy. I hope they’re bold and substantive, since the Republicans will oppose him regardless — if he came out for motherhood, the G.O.P. would declare motherhood un-American. So he should put them on the spot for standing in the way of real action.

But let’s put politics aside and talk about what we’ve actually learned about economic policy over the past 20 months.

When Mr. Obama first proposed $800 billion in fiscal stimulus, there were two groups of critics. Both argued that unemployment would stay high — but for very different reasons.

10 Ways to Solve the Jobs Problem

Imagine a no-holds-barred "summit" that comes up with ideas to solve both our job and environmental problems. What might it come up with?

by Fran Korten

As the midterm political season heats up, one word on every politician's lips is "jobs." And for good reason. People are hurting-they can't pay their mortgages, send their kids to college, pay their dental bills. Young people are wondering if they have a place in the work world.

So the economic pundits cheer when car sales go up, housing starts rise, consumer confidence strengthens. But as the oily ooze in the Gulf tars yet another beach, we all sense something is terribly wrong. We can't keep tearing up the planet to keep ourselves employed. There must be another way.

5 Jaw-Dropping Stories in Wikileaks' Archives Begging for National Attention

By Nick Turse, AlterNet
Posted on September 3, 2010, Printed on September 3, 2010
http://www.alternet.org/story/148063/

In December 2008, I received an email message from Julian Assange -- the now world-famous public face of the whistleblower organization, Wikileaks. I don’t recall why or how it came about, but he invited me to join a counterinsurgency “analysis team” alongside a number of other academics, journalists and analysts.

The idea was to offer us embargoed material, much as Wikileaks recently did with the files of the Afghan War Diary -- a 6-year archive of tens of thousands of classified military documents, dealing with the U.S. war in Afghanistan -- giving the New York Times, the Guardian and Der Spiegel advance access to the documents. The reason for doing so was because Wikileaks had released a number of important U.S. military counterinsurgency manuals in the preceding months, but few reporters had shown much interest in them. Operating in a media environment where breaking the story is key and the fear of being scooped limits the amount of time and energy publications are willing to invest on documents sitting out in public, Assange carried out a trial run of a strategy that served Wikileaks exceptionally well this year.

Katha Pollitt: It's Better Over There

September 2, 2010 | This article appeared in the September 20, 2010 edition of The Nation.

My first day back in New York after a year in Berlin, I got on the subway and found my end of the car dominated by an obscenity-shouting black man with a crutch and a suitcase spilling garbage. When he tried to leave the train at Penn Station, he fell and cursed so loudly at two young men who tried to help him up that they backed off. Not once in my time in Berlin did I see anything remotely like this scene. Berlin is a poor city by German standards, with homeless people and beggars and presumably mentally ill people as well. But it doesn't have the kind of destitution we take for granted in the United States, especially for African-Americans. The strong German safety net keeps people from plunging into the abyss.

Were You Born on the Wrong Continent?, Tom Geoghegan's clever and immensely appealing book contrasting Western European social democracies with laissez-faire America, is primarily concerned with the middle class, not the poor. Still, one of the many delusions of middle-class Americans is that ameliorating poverty would be, if not impossible (see Big Government, wastefulness of), a big, expensive, unfair burden that would reward the lazy and the criminal while producing no benefit to upright citizens. As Geoghegan shows, that's not true. Poverty is expensive. It costs middle-class Americans a lot to avoid the poor: in police, in prisons, in home-security systems, in ever more distant suburbs that must then be commuted from, in private schools, in anxiety and fear and hardening of the heart.

Paul Krugman: Lost in Stagnation: Japan's Dismal Tale

Thursday 02 September 2010
by: Paul Krugman, Krugman & Co.

Japan’s lost decades may have changed its society for the worse.

Twenty years of struggling with stagnation have left a mark, reports economics writer Charles Hugh Smith in an online article for AOL Daily Finance. He argues that the “consequences for the ‘lost generations’ that have come of age in the ‘lost decades’ have been dire.”

Progressive Breakfast: Yes, They Want To Kill Social Security

By Bill Scher
September 2, 2010 - 9:41am ET

Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

Not Even Hiding It Anymore.

New Alaska Senate nominee Joe Miller tells CNN he wants to end Social Security. [1] "CNN's JOHN KING: How about an American born tomorrow or born the day after Joe Miller was sworn in in Washington? Would that person perhaps grow up in an America where there is not a federal Social Security program if you got your way? JOE MILLER: Absolutely."

Alan Simpson calls another Social Security defender, risks learning something. HuffPost: [2] "[Merton] Bernstein, who was a senior consultant to the 1983 commission that reformed Social Security, said he used the opportunity to try to educate Simpson ... 'That's not true,' Bernstein said of Simpson's claim -- which he has made in the past and repeated to Bernstein -- that the commission did not account for baby boomers. 'They very clearly and explicitly addressed that issue. That's why they built in a surplus.' ... 'Then why are they in such trouble now?' Simpson responded. Bernstein responded that they are not in fact in trouble today. The surplus is now over $2 trillion and is projected to reach $4.6 trillion."

What You Need to Know About Hydrofracking

by Mike Webb
ProPublica, Aug. 27, 4:57 p.m.

As drilling for natural gas continues in states across America, PBS’s “Need to Know [1]” bores down into the issue by taking a closer look at the safety concerns that surround the drilling process known as hydraulic fracturing [2]. In a report produced in collaboration with ProPublica reporter Abrahm Lustgarten, the program investigates how fracking threatens to contaminate drinking water sources for millions of Americans.

And for those of you who complain that we don’t feature enough celebrities in our work, “Need to Know” talks to actor Mark Ruffalo [3] about why he opposes fracking. “Need to Know” airs over the weekend on PBS stations across the country. Click here [4] to find your local station and show time.

Scientists find organic farms have higher quality fruit, better soil, lower environmental impact

A press release from PLoS ONE

Side-by-side comparisons of organic and conventional strawberry farms and their fruit found the organic farms produced more flavorful and nutritious berries while leaving the soil healthier and more genetically diverse.

"Our findings have global implications and advance what we know about the sustainability benefits of organic farming systems," said John Reganold, Washington State University Regents professor of soil science and lead author of a paper published today in the peer-reviewed online journal, PLoS ONE. "We also show you can have high quality, healthy produce without resorting to an arsenal of pesticides."

The study is among the most comprehensive of its kind, analyzing 31 chemical and biological soil properties, soil DNA, and the taste, nutrition and quality of three strawberry varieties on more than two dozen commercial fields—13 conventional and 13 organic.

Another False Ending: Contracting Out the Iraq Occupation

Wednesday 01 September 2010
by: Bill Quigley and Laura Raymond, t r u t h o u t | News Analysis

Another false ending to the Iraq war is being declared. Nearly seven years after George Bush's infamous "Mission Accomplished" speech on the USS Abraham Lincoln, President Obama has just given a major address to mark the withdrawal of all but 50,000 combat troops from Iraq. But while thousands of US troops are marching out, thousands of additional private military contractors (PMCs) are marching in. The number of armed security contractors in Iraq will more than double in the coming months.

While the mainstream media is debating whether Iraq can be declared a victory or not, there is virtually no discussion regarding this surge in contractors. Meanwhile, serious questions about the accountability of private military contractors remain.

Just Because You Make a Lot of Money Doesn't Mean You Know What You're Talking About

Tuesday 31 August 2010
by: James Kwak | The Baseline Scenario | Op-Ed

Hedge fund managers may be good at investing money. (Or they may just be the beneficiaries of luck, like successful stock mutual fund managers.) But that doesn’t mean they can think clearly.

Andrew Ross Sorkin comments on the letter by fund manager Daniel Loeb, a former Democratic fundraiser, criticizing the supposed anti-business policies of the Obama administration.

Hands off Social Security

By: Sen. Bernie Sanders
September 1, 2010 04:38 AM EDT

The White House deficit commission is reportedly considering deep benefit cuts for Social Security, including a steep rise in the retirement age. We cannot let that happen.

The deficit and our $13 trillion national debt are serious problems that must be addressed. But we can — and must — address them without punishing America’s workers, senior citizens, the disabled, widows and orphans.

First, let’s be clear: Despite all the right-wing rhetoric, Social Security is not going bankrupt. That’s a lie!

Robert Rubin Demands Government Give $250 Billion to Millionaires

By: David Dayen
Wednesday September 1, 2010 10:05 am

One area of the debate over the Bush tax cuts that seems pretty cut and dried is the estate tax. Right now there is no estate tax for 2010. If we do nothing, it will revert back to the Clinton-era rates of 55% for estates over $1 million dollars (that’s a marginal tax, by the way, so the tax on an estate worth $1,000,001 would be 55 cents). Various proposals would lower the marginal tax rate and increase the exemption; the most common proposal is to permanently set the estate tax at 2009 rates, with a 45% tax on estates over $3.5 million dollars, $7 million for a couple’s estate.

What’s important to understand is that this reversion to 2009 rates permanently would cost the country $292 billion dollars, according to the Tax Policy Center. If we made it retroactive to capture the tax on estates in this holiday year of 2010, maybe it’s closer to $250 billion. But it’s still a large hole in the budget relative to current law, in a time when every deficit hawk is screaming about long-term debt.

German military report: Peak oil could lead to collapse of democracy

By Daniel Tencer
Wednesday, September 1st, 2010 -- 7:48 pm

Peak oil has happened or will happen some time around this year, and its consequences could threaten the continued survival of democratic governments, says a secret Germany military report that was leaked online.

According to Der Spiegel, the report from a think-tank inside the German military warns that shrinking global oil supplies will threaten the world's economic foundations and possibly lead to mass-scale upheaval within the next 15 to 30 years.

Alan Simpson Says Veterans Who Are Agent Orange Victims Are ‘Not Helping Us Save The Country’

The Republican co-chair of President Obama’s Deficit Commission, former Sen. Alan Simpson, has been the subject of controversy recently following comments he made comparing the Social Security system to a “milk cow with 310 million tits.” Critics of Simpson’s comments took offense not only at his vulgar language but at his apparent belief that the Social Security system is in dire straits and may require cuts in benefits to stay solvent.

200-fold boost in fuel cell efficiency advances 'personalized energy systems'

The era of personalized energy systems — in which individual homes and small businesses produce their own energy for heating, cooling and powering cars — took another step toward reality today as scientists reported discovery of a powerful new catalyst that is a key element in such a system. They described the advance, which could help free homes and businesses from dependence on the electric company and the corner gasoline station, at a meeting of the American Chemical Society.

Obama Rebuffs Defense Establishment's Hunger for Conflict with Iran

By Gareth Porter, Inter Press Service
Posted on August 31, 2010, Printed on September 1, 2010
http://www.alternet.org/story/148043/

WASHINGTON -- United States President Barack Obama's refusal in a White House briefing this month to announce a "red line" in regard to Iran's nuclear program represented another in a series of rebuffs of pressure from Defense Secretary Robert Gates for a statement that the US will not accept its existing stocks of low enriched uranium.

The Obama rebuff climaxed a months-long internal debate between Obama and Gates over the "breakout capability" issue that surfaced in the news media last April.

Paul Krugman: After Saddam, America's Next Fake Enemy: Deficits

Were Americans misled into the Iraq war? Yes.

But Karl Rove, who served as senior adviser and deputy chief of staff to President George W. Bush, argued in the Wall Street Journal in July that his "biggest mistake" was not fighting back in 2004 when the story began to spread that the Bush administration had lied to Americans during the run-up to the Iraq war.

New Job Means Lower Wages for Many

By MICHAEL LUO

After being out of work for more than a year, Donna Ings, 47, finally landed a job in February as a home health aide with a company in Lexington, Mass., earning about $10 an hour.

Chelsea Nelson, 21, started two weeks ago as a waitress at a truck stop in Mountainburg, Ark., making around $7 or $8 an hour, depending on tips, ending a lengthy job search that took her young family to California and back.

Both are ostensibly economic success stories, people who were able to find work in a difficult labor market. Ms. Ings’s employer, Home Instead Senior Care, a company with franchises across the country, has been expanding assertively. Ms. Nelson’s restaurant, Silver Bridge Truck Stop, recently reopened and hired about 20 people last month in an area thirsty for jobs.

Both women, however, took large pay cuts from their old jobs — Ms. Ings worked for a wholesale tuxedo distributor, Ms. Nelson was a secretary. And both remain worried about how they will make ends meet in the long run.

Meet The 18 People Who Could Determine The Fate Of Social Security

Brian Beutler | August 30, 2010, 11:55AM

Last week former Republican Senator Alan Simpson, who co-chairs the White House's fiscal commission, drew a storm of criticism for comparing Social Security to a "cow with 310 million tits." But Titgate isn't really about language. It's about both Simpson himself -- who has long viewed Social Security as a bloated program for spoiled old people -- and about the commission as a whole. Comprised of nine tax-averse Republicans and nine Democrats, many of whom have expressed support for Social Security changes in the past, the commission will almost certainly be biased toward benefit cuts, and away from raising taxes, when it presents its report on December 1. Below, the cast of characters who will be making the calls.

OK Go on net neutrality: A lesson from the music industry

By Damian Kulash

Sunday, August 29, 2010

On the Internet, when I send my ones and zeros somewhere, they shouldn't have to wait in line behind the ones and zeros of wealthier people or corporations. That's the way the Net was designed, and it's central to a concept called "net neutrality," which ensures that Internet service providers can't pick favorites.

Recently, though, big telecommunications companies have argued that their investment in the Net's infrastructure should allow them more control over how it's used. The concerned nerds of the world are up in arms, and there's been a long, loud public debate, during which the Federal Communications Commission appeared to develop a plan to preserve net neutrality.

Bankers Told Recovery May Be Slow

By SEWELL CHAN

JACKSON HOLE, Wyo. — The American economy could experience painfully slow growth and stubbornly high unemployment for a decade or longer as a result of the 2007 collapse of the housing market and the economic turmoil that followed, according to an authority on the history of financial crises.

That finding, contained in a new paper by Carmen M. Reinhart, an economist at the University of Maryland, generated considerable debate during an annual policy symposium here, organized by the Federal Reserve Bank of Kansas City, which concluded on Saturday.

The gathering, at a historic lodge in Grand Teton National Park, brought together about 110 central bankers and economists, including most of the Federal Reserve’s top officials. In 2008, the symposium occurred weeks before the Lehman Brothers bankruptcy nearly shut down the financial markets. At the symposium last year, officials congratulated themselves on weathering the worst of the crisis.

The August Day Plutocracy Would Love Us to Forget

By Sam Pizzigati

Created 08/31/2010 - 11:38am

Today marks the 100th anniversary of what may be the most ‘radical speech’ an American ex-President has ever delivered. The words of that former President, Theodore Roosevelt, still ring incredibly true today.

By Sam Pizzigati and Chuck Collins

Ex-Presidents almost always follow a small number of well-worn scripts. Some rush to cash in on their celebrity. Some do charitable good deeds. Some just lay low.

Exactly one century ago, on August 31, 1910, we had an ex-President who took a brash and bold leap that took him far beyond these narrowly circumscribed roles. On that day, in the middle of Middle America, a former President — Theodore Roosevelt — essentially called on his fellow citizens to smash the nation’s rich down to democratic size.

Home truths for complacent economists

Tax credits disguised the fundamental weakness of the US housing market. The reality reveals bleak prospects for growth

Dean Baker
guardian.co.uk, Tuesday 31 August 2010 13.00 BST

The howls of surprised economists were everywhere last week as the government reported on Tuesday that July had sharpest single-month plunge in existing home sales on record. The next day the commerce department reported that new home sales hit a post-war low in July.

All the economists who had told us that the housing market had stabilised and that prices would soon rebound looked really foolish, yet again. To understand how lost these professional error-makers really are, it is only necessary to know that the Mortgage Bankers Association (MBA) puts out data on mortgage applications every week. The MBA index plummeted beginning in May, immediately after the last day (30 April) for signing a house sale contract that qualified for the homebuyers' tax credit.

Why Americans believe Obama is a Muslim

EAST LANSING, Mich. — There’s something beyond plain old ignorance that motivates Americans to believe President Obama is a Muslim, according to a first-of-its-kind study of smear campaigns led by a Michigan State University psychologist.

The research by Spee Kosloff and colleagues suggests people are most likely to accept such falsehoods, both consciously and unconsciously, when subtle clues remind them of ways in which Obama is different from them, whether because of race, social class or other ideological differences.

These judgments, Kosloff argues, are irrational. He also suggests they are fueled by an “irresponsible” media culture that allows political pundits and “talking heads” to perpetuate the lies.

Spengler for Dummies

by Linh Dinh

Nearly a hundred thousand people flocked to Glenn Beck's Restoring Honor rally. Entire families drove in from distant states. They wore red, white and blue, carried American and Don't Tread On Me flags. Some brandished a Christian standard, white, with a red cross on blue canton. A man peddled a self-designed, quite attractive Tea Party flag. "Haven't sold as much as I would like," he complained to me, adding, "I'm unemployed." One woman wore a T-Shirt, "HARD GLOCK CAFÉ." Another, "NOT RACIST, NOT VIOLENT, JUST NO LONGER SILENT." They heard Sarah Palin proudly declare that she spoke "not as a politician. No, as something more -- something much more. I've been asked to speak as the mother of a soldier." This, from a woman who is nothing but a politician these days, having relieved herself of all official duties. Aiming for 2012, she's already a very long nose or two ahead of all other stumpers. "Say what you want to say about me, but I raised a combat vet, and you can't take that away from me," Palin reiterated. The sunbaked faithful then heard Glenn Beck urge them to "pray on your knees, but with your door open for your children to see."

Why Do Deficit Hawks Hate Social Security?

Tuesday 31 August 2010

by: Zach Carter | The Media Consortium | News Analysis

Last week, Social Security advocates learned something they had long suspected. Arguments for cutting Social Security aren't really about economics or the deficit. They're all about waging war on social services.

In short, some very prominent policymakers are out to dismantle Social Security on ideological grounds. The most recent example of this view comes from Alan Simpson, a former Republican Senator from Wyoming who now serves as co-Chair of President Barack Obama's Federal Debt Commission. Earlier this summer, Simpson was caught on video spreading absurd lies about Social Security, but his latest outburst explains why he's been so willing to distort the facts. Simpson simply hates Social Security.

Coup d'Etat: Standard & Poor's Is Now Giving Orders to Congress ... and the American People

By Richard Eskow

Created 08/30/2010 - 3:09pm

Must Read:

An Economy for All

There's been a lot of talk recently about the enormous power that's been given to the Deficit Commission, which is co-chaired by Alan "Social Security recipients are milking it [1]" Simpson and dominated by people who have advocated cuts to Social Security and Medicare. But here's an aspect of the story that's gone unremarked: Standard & Poor's, the credit agency whose reputation should rightfully have been shattered by the economic crisis, is now dictating policy to the United States government. S&P just put our elected officials on notice: Submit to the proclamations of the Deficit Commission or we'll downgrade our rating of government debt.

That's blackmail, plain and simple. This threat comes from a privately-owned company whose rating process is riddled with conflicts, and which has gotten virtually every critical assessment of recent years spectacularly wrong. Enron? Lehman? Subprime mortgages? They were zero for three. Yet rather than reining back their penchant for reckless proclamations, the chairman of S&P's "sovereign rating committee" [2] said that our elected officials' response to the Deficit Commission would be crucial to its analysis of US debt. John Chambers said last week: "It is very important for the credit standing of the United States that the Congress considers very carefully what the fiscal commission proposes." Just in case his intent wasn't clear enough, he added: "It is very important for Congress to take the required steps."

"Sovereign" is right. That's a kingly proclamation.

Obama’s Old Deal

Why the 44th president is no FDR—and the economy is still in the doldrums.

Michael Hirsh
August 29, 2010

Barack Obama was “incredulous” at what he was hearing, said one of his top economic advisers. The president had spent his first year in office overseeing the biggest government bailout of the financial industry in American history. Together with Federal Reserve chairman Ben Bernanke, he had kept Wall Street afloat on a trillion-dollar tide of taxpayer money. But the banks were barely lending, and the economy was still mired in high unemployment. And now, in December 2009, the holiday news had started to filter out of the canyons of lower Manhattan: Wall Street’s year-end bonuses would actually be larger in 2009 than they had been in 2007, the year prior to the catastrophe. “Wait, let me get this straight,” Obama said at a White House meeting that December. “These guys are reserving record bonuses because they’re profitable, and they’re profitable only because we rescued them.” It was as if nothing had changed. Even after a Depression-size crash, the banks were not altering their behavior. The president was being perceived, more and more, as a man on the wrong side of an incendiary issue.

And so, prodded forward by Vice President Joe Biden—the product of a working-class upbringing in Scranton, Pa.—the president began to consider getting tougher on Wall Street. “We kept revisiting it,” said the economic adviser (who recounted details of the meetings only on condition of anonymity). One big proposal the White House hadn’t adopted was Paul Volcker’s idea of barring commercial banks from indulging in heavy risk taking and “proprietary” trading. In Volcker’s view, America’s major banks, which enjoy federal guarantees on their deposits, had to stop putting taxpayer money at risk by acting like hedge funds. This had become a grand passion for Volcker, a living legend renowned for crushing inflation 30 years before as Fed chairman. He had long been skeptical of financial deregulation. Beyond the ATM, Volcker asked, what new banking products had really added to economic growth? Exhibit one for this argument was derivatives, trillions of dollars in “side bets” placed by Wall Street traders. “I wish somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy,” he barked at one conference.

A world too full of people

Mary Fitzgerald
Published 30 August 2010

Leucadia Quispe, a 60-year-old mother-of-eight, was born and raised in Botijlaca, a settlement that sits in the foothills of the Chacaltaya and Huayna Potosí mountains in Bolivia. High above, the Chacaltaya glacier is retreating at an unexpected pace: three times as fast as predicted ten years ago. It will be gone in a generation.

Seven out of her eight children have already migrated to other parts of the country, Leucadia says, "because there is no way to make a living here". Because of the dwindling water supply, she must spend hours hauling water in five-litre containers, one in each hand. The scarcity of this precious resource makes it hard to find fodder for her llamas and sheep, and some of her llamas have starved to death.

Liberal economists say Democrats also eyeing cuts to Social Security

By Sahil Kapur
Monday, August 30th, 2010 -- 8:21 am

Prominent progressive economists are warning liberals and senior citizens not to take Social Security for granted simply because Republicans are out of power, arguing that structural incentives are propelling Democratic leaders to support scaling back the cherished program.

"Social Security faced its greatest danger when Bill Clinton was in the White House," said Dean Baker, co-director of the Center for Economic and Policy Research, in an e-mail. "The reason is that the Wall Street Democrats can be counted on to oppose cuts coming from Republicans for partisan purposes. When they are in power, they have no reason to oppose these cuts."

Paul Krugman: It’s Witch-Hunt Season

The last time a Democrat sat in the White House, he faced a nonstop witch hunt by his political opponents. Prominent figures on the right accused Bill and Hillary Clinton of everything from drug smuggling to murder. And once Republicans took control of Congress, they subjected the Clinton administration to unrelenting harassment — at one point taking 140 hours of sworn testimony over accusations that the White House had misused its Christmas card list.

Now it’s happening again — except that this time it’s even worse. Let’s turn the floor over to Rush Limbaugh: “Imam Hussein Obama,” he recently declared, is “probably the best anti-American president we’ve ever had.”

To get a sense of how much it matters when people like Mr. Limbaugh talk like this, bear in mind that he’s an utterly mainstream figure within the Republican Party; bear in mind, too, that unless something changes the political dynamics, Republicans will soon control at least one house of Congress. This is going to be very, very ugly.

So where is this rage coming from? Why is it flourishing? What will it do to America?

Border Sweeps in North Reach Miles Into U.S.

NINA BERNSTEIN

ROCHESTER — The Lake Shore Limited runs between Chicago and New York City without crossing the Canadian border. But when it stops at Amtrak stations in western New York State, armed Border Patrol agents routinely board the train, question passengers about their citizenship and take away noncitizens who cannot produce satisfactory immigration papers.

“Are you a U.S. citizen?” agents asked one recent morning, moving through a Rochester-bound train full of dozing passengers at a station outside Buffalo. “What country were you born in?”

When the answer came back, “the U.S.,” they moved on. But Ruth Fernandez, 60, a naturalized citizen born in Ecuador, was asked for identification. And though she was only traveling home to New York City from her sister’s in Ohio, she had made sure to carry her American passport. On earlier trips, she said, agents had photographed her, and taken away a nervous Hispanic man.

New report details loss of Bush-era e-mails

Top aides to President George W. Bush seemed unconcerned amid multiple warnings as early as 2002 that the White House risked losing millions of e-mails that federal law required them to preserve, according to an extensive report obtained by The Federal Eye and set for release on Monday.

The report, by the nonprofit watchdog group Citizens for Responsibility and Ethics in Washington, follows a settlement reached last December between the Obama administration, CREW and the National Security Archive, a George Washington University research institute. The groups sued the Bush White House in 2007 alleging it violated federal law by not preserving millions of e-mails sent between 2003 and 2005.

The Consequences of Republicans’ Small Business Obstructionism

A month ago yesterday, there was reason for optimism on the small-business bill pending in the Senate. The aid package included tax breaks, new incentives, and an attempt to expand credit through a lending program that utilizes local banks, and with 59 supporters, the Democratic majority only needed one GOP vote to overcome yet another Republican filibuster.

They didn’t get that vote. Shortly before the Senate broke for its recess, Republicans threw a bit of a tantrum over the number of amendments they were allowed to consider, and unanimously blocked the chamber from voting on the bill.

The consequences of GOP game-playing are as discouraging as they are obvious.

Congress may sneak through Internet ‘kill switch’ in defense bill

By Daniel Tencer
Saturday, August 28th, 2010 -- 9:00 pm

A federal cybersecurity bill that critics say creates a presidential "kill switch" for the Internet could be added on to a defense spending bill and passed without much debate, technology news sources report.

Sen. Thomas Carper (D-DE), one of the sponsors of the Protecting Cyberspace as a National Asset Act, told GovInfoSecurity.com that the Senate is considering attaching the bill as a rider to a defense authorization bill likely to pass through Congress before the mid-term elections.

Soak The Very, Very Rich

James Surowiecki
August 16, 2010

The fight on Capitol Hill over whether to extend the Bush tax cuts is about many things: deficit reduction, economic stimulus, supply-side ideology. But at its core is a simple question: who counts as rich? The Obama Administration’s answer is that you’re rich if you make more than two hundred thousand dollars a year as an individual or two hundred and fifty thousand dollars a year as a household, and therefore you should have your taxes raised. Conservatives suggest that this threshold is far too low, and argue that Obama would be taxing mostly small-business owners, or the people a Fox News host has referred to as “the so-called rich,” rather than fat plutocrats. You might think this isn’t really much of a debate. An annual income of two hundred and fifty thousand dollars puts you in the top three per cent of American households, and is more than four times the national median. You’re rich, and a small tax increase isn’t going to rock your world.

Good luck convincing people of this, though. Judging from surveys of how Americans describe themselves, most of the privileged don’t feel all that privileged. Why is that? One reason is the American mythology of middle-classness. Another is geography: in a place like Manhattan, where the average apartment sells for nine hundred thousand dollars, your money doesn’t go as far. And then there’s a larger truth about how wealth is getting concentrated in this country. As the economists Thomas Piketty and Emmanuel Saez have documented, people who earn a few hundred thousand dollars a year have done much worse than people at the very top of the ladder.

When Politics Means the End of the World (as we know it)

Frederick Clarkson
Fri Aug 27, 2010 at 08:45:14 PM EST

The Christian Right has often sought to stay the hand of God, angry with our failings as a nation, by `standing in the gap' at large prayer rallies and pleading for mercy. They have made a special point of doing so in the run up to national elections since 1980, praying for godly government and righteous candidates, and this year is no exception. The beneficiaries are almost always Republicans and this year is probably no exception in that regard as well. But there is also an ominous element that mostly transcends parties and is on vivid display as we enter the fall campaign season.

On Labor Day weekend, Lou Engle, head of the fiery neo-Pentecostal group, The Call, is leading a worship service in a sports arena in Sacramento, California and a "solemn assembly" at the state Capitol the next day. These events were initially billed as a tenth anniversary of The Call's first youth rally on the national capital mall which drew a claimed 400,000 people. Since then, the Sacramento event has been repositioned as the kick-off of a major Christian Right fall political campaign initiative. Engle says it will be the "hinge of history" opening the door to "the greatest awakening" and "returning our nation to its righteous roots."

Frank Rich: The Billionaires Bankrolling the Tea Party

ANOTHER weekend, another grass-roots demonstration starring Real Americans who are mad as hell and want to take back their country from you-know-who. Last Sunday the site was Lower Manhattan, where they jeered the “ground zero mosque.” This weekend, the scene shifted to Washington, where the avatars of oppressed white Tea Party America, Glenn Beck and Sarah Palin, were slated to “reclaim the civil rights movement” (Beck’s words) on the same spot where the Rev. Martin Luther King Jr. had his dream exactly 47 years earlier.

Vive la révolution!

There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer. Three heavy hitters rule. You’ve heard of one of them, Rupert Murdoch. The other two, the brothers David and Charles Koch, are even richer, with a combined wealth exceeded only by that of Bill Gates and Warren Buffett among Americans. But even those carrying the Kochs’ banner may not know who these brothers are.