Remember This Moment When the Next Financial Crisis Strikes

The SEC could have fixed our broken rating agencies. It whiffed

By David Dayen

Credit rating agencies were the drivers of the financial crisis. Their AAA stamps of approval encouraged investors to purchase massive quantities of subprime mortgage-backed securities. As we now know, these assurances of complete safety led investors right into a toxic meltdown.

This was entirely foreseeable: Rating agencies get paid to rate securities by the companies who issue them. This places an inherent conflict of interest at the heart of their business model: If they make it easier for a client to sell questionable securities by rating them highly, then that client will return with future business. Examples of rating inflation abound, and even the Justice Department, which has shown little willingness to go to trial over financial fraud, has an active $5 billion lawsuit against Standard and Poor’s for granting AAA ratings to securities the company knew was junk.

The executive order that led to mass spying, as told by NSA alumni

Feds call it “twelve triple three”; whistleblower says it's the heart of the problem.

by Cyrus Farivar - Aug 27 2014, 9:00pm EST

One thing sits at the heart of what many consider a surveillance state within the US today.

The problem does not begin with political systems that discourage transparency or technologies that can intercept everyday communications without notice. Like everything else in Washington, there’s a legal basis for what many believe is extreme government overreach—in this case, it's Executive Order 12333, issued in 1981.

“12333 is used to target foreigners abroad, and collection happens outside the US," whistleblower John Tye, a former State Department official, told Ars recently. "My complaint is not that they’re using it to target Americans, my complaint is that the volume of incidental collection on US persons is unconstitutional.”

The document, known in government circles as "twelve triple three," gives incredible leeway to intelligence agencies sweeping up vast quantities of Americans' data. That data ranges from e-mail content to Facebook messages, from Skype chats to practically anything that passes over the Internet on an incidental basis. In other words, EO 12333 protects the tangential collection of Americans' data even when Americans aren't specifically targeted—otherwise it would be forbidden under the Foreign Intelligence Surveillance Act (FISA) of 1978.

Washington Recaptured

WASHINGTON, DC – Two hundred years ago, Washington DC was captured by the British – who then proceeded to set fire to official buildings, including the White House, Treasury Department, and Congress. Today, it is a domestic interest group – very large banks – that has captured Washington. The costs are likely to be far higher than they were in 1814.

America’s largest bank holding companies receive an implicit government subsidy, because they are perceived to be “too big to fail.” The authorities will not allow the biggest banks to default on their debts, through bankruptcy or in any other fashion, owing to the need to prevent the financial system from collapsing. This doctrine became starkly apparent in late 2008 and early 2009; it remains in force today.

Paul Krugman: The Fall of France

François Hollande, the president of France since 2012, coulda been a contender.  He was elected on a promise to turn away from the austerity policies that killed Europe’s brief, inadequate economic recovery. Since the intellectual justification for these policies was weak and would soon collapse, he could have led a bloc of nations demanding a change of course. But it was not to be. Once in office, Mr. Hollande promptly folded, giving in completely to demands for even more austerity.

Let it not be said, however, that he is entirely spineless. Earlier this week, he took decisive action, but not, alas, on economic policy, although the disastrous consequences of European austerity grow more obvious with each passing month, and even Mario Draghi, the president of the European Central Bank, is calling for a change of course. No, all Mr. Hollande’s force was focused on purging members of his government daring to question his subservience to Berlin and Brussels.

Rhode Island Has Lost $372 Million As State Shifted Pension Cash to Wall Street

By David Sirota on August 28 2014 1:34 PM

As Rhode Island General Treasurer Gina Raimondo promotes her 2014 gubernatorial campaign, she touts her supposed success in putting her state’s pension fund on firmer financial ground. That message has helped Raimondo surge to a lead in the polls, as reported by WPRI. What she fails to mention, though, is that the returns from her investment strategy have been far less beneficial for state pensioners than for the Wall Street firms now managing a growing share of Rhode Island’s money.

According to four years’ worth of state financial records, Rhode Island’s pension system has delivered an average 12 percent return during Raimondo’s tenure as general treasurer. That rate of return significantly trails the median rate of return for pension systems of similarly size across the country, based on data provided to the International Business Times by the Wilshire Trust Universe Comparison Service. Meanwhile, the pension investment strategy that Raimondo began putting in place in 2011 has delivered big fees to Wall Street firms. The one-two punch of below-median returns and higher fees has cost Rhode Island taxpayers hundreds of millions of dollars, according to pension analysts.

The Companies Making a Profit by Abusing the Poor

By Thomas Edsall

August 28, 2014 | In Orange County, Calif., the probation department’s “supervised electronic confinement program,” which monitors the movements of low-risk offenders, has been outsourced to a private company, Sentinel Offender Services. The company, by its own account [2], oversees case management, including breath alcohol and drug-testing services, “all at no cost to county taxpayers.”

Sentinel makes its money by getting the offenders on probation to pay for the company’s services. Charges can range [3] from $35 to $100 a month.

The company boasts of having contracts with more than 200 government agencies, and it takes pride in the “development of offender funded programs where any of our services can be provided at no cost to the agency.”

Sentinel is a part of the expanding universe of poverty capitalism. In this unique sector of the economy, costs of essential government services are shifted to the poor.

Paul Krugman: Wrong Way Nation

Gov. Rick Perry of Texas is running for president again. What are his chances? Will he once again become a punch line? I have absolutely no idea. This isn’t a horse-race column.

What I’d like to do, instead, is take advantage of Mr. Perry’s ambitions to talk about one of my favorite subjects: interregional differences in economic and population growth.

You see, while Mr. Perry’s hard-line stances and religiosity may be selling points for the Republican Party’s base, his national appeal, if any, will have to rest on claims that he knows how to create prosperity. And it’s true that Texas has had faster job growth than the rest of the country. So have other Sunbelt states with conservative governments. The question, however, is why.

Richard Eskow: The 6 Strangest Libertarian Ideas

August 28, 2014 | Few movements in the United States today harbor stranger political ideas than the self-proclaimed libertarians. The Rand Paul school of libertarianism is at least as far outside the mainstream on the right as, say, a rather doctrinaire old-school form of Marxism/Leninism is on the left. The difference is this: The mainstream media isn’t telling us that we’re in the middle of a “Marxist/Leninist moment.” Leninist politicians aren’t being touted as serious presidential contenders. And all the media chatter we’re hearing about a “Libertarian moment” ignores the very harsh, extreme and sometimes downright ugly ideas that are being disseminated under that banner.

It’s great to have allies like Rand Paul working alongside other Americans to defend our right to privacy, restrain the NSA and reduce the military/industrial complex’s grip on foreign policy. It’s possible to admire their political courage in these areas while at the same time recognize that we may not care for the environment they inhabit.

There’s another reason to challenge libertarians on the extreme nature of their ideology: A number of them seem determined to drive competing ideas out of the free market for ideas—which isn’t very libertarian of them. There has been a concerted effort to marginalize mainstream values and ideas about everything from workers’ rights to the role of government in national life. So by all means, let’s have an open debate. Let’s make sure that all ideas, no matter how unusual they may seem, are welcome for debate and consideration. But let’s not allow any political movement to become a Trojan horse, one which is allowed to have a “moment” without ever telling us what it really represents.

The mystery of huge solar plants and tiny dead birds

By Sara Bernard
28 Aug 2014 2:33 PM

Recent news reports that a giant solar power plant in the Mojave Desert is scorching birds in mid-air spurred a fierce debate over the environmental impacts of renewable energy, and left us all wondering whether we’ll be able to preserve the planet without destroying it in the process.

The questions come at an important moment, as the Obama administration is ramping up solar energy development on public lands. The Ivanpah Solar Electric Generating System, which the AP story covered, is currently the largest thermal solar energy plant in the world; it uses three roughly 450-foot “power towers” to concentrate the rays of 300,000 mirrors, creating a glaring “solar flux” field that does scorch at least a few birds (and irritate a few pilots).

Making a Living on a Living Planet

by Joe Uehlein

On Labor Day 1940, American workers faced the aftermath of the Great Depression, with mass unemployment persisting and a divided labor movement facing a renewed counterattack from corporate America. They were barely becoming aware of an even greater threat, one that would determine the future of their country and their labor movement: the threat of Nazi armies mobilizing for war.

On Labor Day 2014, American workers face the lingering results of the Great Recession, with unemployment still at historic highs, burgeoning inequality, and attacks on the very right to have a union. But, like workers in 1940, we are being pressed by another threat, one that will far overshadow our current problems if we do not take it on.

Paul Krugman | The "Libertarian Moment" Will Have to Wait

Robert Draper's recent article in The New York Times Magazine about the possibility of a "libertarian moment" has drawn a fair bit of commentary, much of which involves questioning the supposed polling evidence.

As Jonathan Chait, a commentator at New York magazine, pointed out, independent polling - as opposed to surveys conducted by libertarians seeking to boost their own profile - suggests that young Americans are actually much more pro-government than their elders.

They may look relatively kindly on antiwar libertarians, but they really don't support the policy agenda.

Disturbing New Chemical Found in Fetuses

By Clarissa A. León

August 20, 2014 | A recent study has found a disturbing exposure of the germ-killing chemical triclosan to the fetuses of pregnant women in Brooklyn.

Triclosan has been linked to reproductive and development issues in animal testing. It is often used as the active ingredient in antibacterial soaps and appears in more than 2,000 consumer products including toothpastes, body washes, school supplies and toys.

In the study, scientists tested 181 pregnant Brooklyn women, most of them black. Half tested positive for triclosan in their umbilical cord blood samples, signifying triclosan was being transferred to fetuses.

Why America Needs More Lawyers

Posted on August 28, 2014 by Yves Smith

Reader Deontos sent a link to a provocative article on SSRN, The Lawyer-Rent Seeker Myth, by Teresa Schmid. Schmid focuses explicitly on the impact of economic theory on how legal services are delivered. Using county-level data in Oregon, Schmid make a persuasive case that lack of access to legal representation isn’t just a social justice issue but is also an economic problem, since it exacerbates poverty and inequality.

Since the Carter Administration, pundits and citizens accept the notion that America is overlawyered and that legal action constitutes a deadweight cost on economic activity. However, the public does not realize that this point of view was promoted aggressively and is even tacitly accepted in the legal profession despite a lack of evidence. As Schmid describes, the result of this line of thinking going mainstream is the implementation of policies to reduce the access of lower and middle income people to free or affordable legal services. The inability to obtain legal representation has much greater economic costs than the anti-lawyer consensus recognizes.

4 Calamities Destroying America's Economy Being Ignored by Elites

By Frithjof Bergmann

August 27, 2014 | The world’s current economic and political structures are proving incapable of fixing the global crisis of poverty, unemployment, and dislocation from a viable way of life for the majority of the world’s population. Why? Let us begin with one present-day example: Larry Summers, former Secretary of the Treasury and also former chair of the Board of Economic Advisors, recently was the principal guest of the national radio broadcast “On Point.” The topic of the hour-long dialogue was growing “inequality.”

Summers posited that we are in an oddly slow recovery. He gave some reasons for the slowness but maintained that the measures instigated by the government (the Federal Reserve pumping funds into the economy, and the like) were fundamentally correct, and that with patience and persistence the recovery would solve the problems we have.

This basically is the position of Obama and importantly, by no means only his. Every government in every country subscribes essentially to this same apostolic faith. That faith is pathetic and even grotesquely mistaken.

A Rising Tide Only Lifts All Boats When Everyone Has a Boat

Wednesday, 27 August 2014 14:58
By The Daily Take Team, The Thom Hartmann Program | Op-Ed

President John F. Kennedy once said about economic development that "a rising tide lifts all boats." Kennedy was, of course, right, but he missed something really, really important: A rising tide only lifts all boats when everyone has a boat.

This has never been clearer than it is right now. According to a shocking new study out of the Brookings Institution, around 12 million Americans survive on less than $2 per day. To put that number in perspective, 12 million people is about about 25 percent of the 46.5 million people living under the poverty line and about 4 percent of the U.S. population as whole.

Poverty statistics are notoriously difficult to work with, but that doesn't change the fact this Brookings study is really, really disturbing. 12 million people living on less than two measly dollars a day in the richest country in the history of the world isn't just shameful, it's also the sign of policy failure of the highest order.

Caught on Tape: What Mitch McConnell Complained About to a Roomful of Billionaires

At a secret meeting of elite donors convened by the Koch brothers, McConnell laid out his plan for shrinking the federal government and whined about having to vote on minimum wage bills.

Lauren Windsor, August 26, 2014

Last week, in an interview with Politico, Senate minority leader Mitch McConnell (R-KY) outlined his plan to shut down President Obama’s legislative agenda by placing riders on appropriations bills. Should Republicans take control of the Senate in the 2014 elections, McConnell intends to pass spending bills that “have a lot of restrictions on the activities of the bureaucracy.”

What McConnell didn’t tell Politico was that two months ago, he made the same promise to a secret strategy conference of conservative millionaire and billionaire donors hosted by the Koch brothers. The Nation and The Undercurrent obtained an audio recording of McConnell’s remarks to the gathering, called “American Courage: Our Commitment to a Free Society.” In the question-and-answer period following his June 15 session titled “Free Speech: Defending First Amendment Rights,” McConnell says:

“So in the House and Senate, we own the budget. So what does that mean? That means that we can pass the spending bill. And I assure you that in the spending bill, we will be pushing back against this bureaucracy by doing what’s called placing riders in the bill. No money can be spent to do this or to do that. We’re going to go after them on healthcare, on financial services, on the Environmental Protection Agency, across the board [inaudible]. All across the federal government, we’re going to go after it.”

David Cay Johnston: Amid job stagnation, a prosperous class grows

A small group of very well-paid workers is earning a third of the nation’s wages. Why?

August 25, 2014 10:45AM ET

From 2000 to 2012, American workers as a whole had a tough time, as population grew much faster than new jobs and many people gave up looking for work. There was one major exception: jobs paying $100,000 to $400,000 (in 2012 dollars).

This is what I call America’s new prosperous class. Many of these workers have an advanced degree. They no longer struggle, but they continue to work because their wealth is far from adequate to support their lifestyles.

A Carbon Tax Is Absolutely Essential

Tuesday, 26 August 2014 15:33
By The Daily Take Team, The Thom Hartmann Program | Op-Ed

So, what do a major investment from Verizon Wireless and the melting of our polar ice caps have in common? A lot more than you may think.

On Monday, America's largest wireless provider announced that it will be making a $40 million investment in solar power at eight of its facilities across the United States.

According to a press release from Verizon, new solar installations at facilities in California, Maryland, Massachusetts, New Jersey, and New York will nearly double the amount of energy that Verizon gets from solar power.

Why Are Harvard Grads Still Flocking to Wall Street?

Students from elite colleges march off to jobs at the big banks and consulting firms less by choice than because of a rigged recruiting game that the schools themselves have helped to create.

By Amy J. Binder

In 2010, Bastian Nichols moved into his freshman dorm at Harvard without much thought of what he would do after graduation. He felt sure that in time he’d find a career that matched his passions (among them, journalism and travel), but while in college he would experiment at becoming “a more interesting person.”* His concentration in psychology and comparative literature matched his general philosophy. So did his choice of summer jobs, which ranged from leading a bike trip through Austria and working in a theater in Croatia to doing post-production work in an Italian film company.

Yet, as senior year approached, Nichols began to feel anxious about life after Harvard. He described being “scared because I was like, ‘Crap, I’ve got a year left, and I just don’t even know what I could possibly do.’” Feeling he had few choices, in the early weeks of his senior year Nichols began working with Harvard’s Office of Career Services to find a job in management consulting. Much to the dismay of peers who thought that at least he would be a holdout, he will begin his job at one of the country’s top three consulting firms this fall.

Abrasive Organic Herbicide Method Blasts Weeds To Death

The herbicide uses some ingredients that sound like they could have come from a gritty face wash.

By Francie Diep, Posted 08.25.2014 at 12:30 pm

One U.S. Department of Agriculture researcher is experimenting with a sandblasting-style method of killing weeds that could be certified organic, Minneapolis' Star Tribune reports. Agronomist Frank Forcella is blasting weeds with a spray of ground-up corncobs, walnut shells, corn gluten meal and other plant material. Sounds like he's exfoliating the weeds to death.

Working with engineers at South Dakota State University, Forcella has even developed a tractor-mounted nozzle system that blasts out organic grit using air pressurized to 100 pounds per square inch. Take that, lambsquarters!

New Jersey Funneling Pension Fund Cash to Wall Street Investment Managers

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA.

David Sirota has carved out a much-needed niche lately by poking around in the unseemly deals between public pension funds and Wall Street predators, and he brings yet another scoop, this time in New Jersey:

Gov. Chris Christie’s administration openly acknowledged that more New Jersey taxpayer dollars were going to land in the coffers of major financial institutions. It was 2010, and Christie had just installed a longtime private equity executive, Robert Grady, to manage the state’s pension money. Grady promoted a plan to put more of those funds into riskier investments managed by Wall Street firms. Though this would entail higher fees, Grady said the strategy would “maximize returns while appropriately managing risk.”

Four years later, New Jersey has secured only half the promised results. The state has sent more pension money to big-name Wall Street firms like Blackstone, Third Point, Omega Advisors, Elliott Associates and Grady’s old firm, The Carlyle Group. Additionally, the amount of fees the state pays financial managers has more than tripled since Christie assumed office. New Jersey is now one of America’s largest investors in hedge funds.

Paul Krugman: Bad Decisions Yield Grim Results in Europe

Just a few months ago Europe's austerians were busy congratulating themselves, declaring that a modest upturn in Southern Europe vindicated all their actions. But now the news is looking grim, with industrial production stalling out and good reason to fear yet another slide into recession. This comes as many, though not all, data points in the United States are suggesting stronger growth. So why has Europe done so badly?

I'm actually not too committed to any one story here; there are arguably several factors.

Conservative media desperately trying to throw water on Beyoncé’s feminist moment

By Amanda Marcotte
Monday, August 25, 2014 11:30 EDT

Beyoncé did her song “***Flawless” last night as part of a bigger—20 minutes!—set at the MTV Video Music Awards, and clearly conservatives are threatened. I expect that this is going to get ugly quickly, but the initial reaction is to try to deny that she could be a feminist because, of course, she likes sex. There’s no doubt that having Beyoncé out there hyping feminism is a big deal, so conservatives are desperately trying to take it away by claiming that she’s not really a feminist, because they, as people who hate feminism and want to wipe it out, are the self-appointed arbiters of what feminism is.

Ralph Nader: How Corporate Espionage on Nonprofit Watchdogs Goes Unpunished

August 25, 2014 | Here’s a dirty little secret you won’t see in the daily papers: corporations conduct espionage against US nonprofit organizations without fear of being brought to justice.

Yes, that means using a great array of spycraft and snoopery, including planned electronic surveillance, wiretapping, information warfare, infiltration, dumpster diving and so much more.

The evidence abounds.

For example, six years ago, based on extensive documentary evidence, James Ridgeway reported [3] in Mother Jones on a major corporate espionage scheme by Dow Chemical focused on Greenpeace and other environmental and food activists.

Greenpeace was running a potent campaign against Dow’s use of chlorine to manufacture paper and plastics. Dow grew worried and eventually desperate.

Dean Baker: Truth Has No Place in the Attack of Inflation Hawks

There is a growing push by inflation hawks to get the Federal Reserve Board to raise interest rates. They argue that inflationary pressures are picking up steam and if the Fed doesn't move quickly, we will soon be caught up in an inflationary spiral.

If this sounds obscure and esoteric, then you better do some quick homework. The Fed's decisions on the future course of interest rates will have a huge impact on the job prospects and livelihoods of tens of millions of families. If the Fed raises interest rates to prevent inflation, it would be slowing the economy and keeping people from getting jobs.Furthermore, slower job growth will weaken the labor market by raising the unemployment rate.

Priceless: How The Federal Reserve Bought The Economics Profession

Ryan Grim

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.

"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."

Washington's cynical misinformation game

Commentary: distortion now a standard part of political discourse on health care

By Wendell Potter, 5:00 am, August 18, 2014, Updated: 11:37 am, August 19, 2014

In most of our country’s major institutions, we have little tolerance for cheating and lying. Whether it’s the court system, schools, businesses, even our sports teams, we impose stiff sanctions against those who deceive us to gain some advantage.

If convicted of lying on the witness stand, you’ll pay a fine and possibly wind up in jail. If caught cheating on a test, you’ll probably fail the course or worse. At the University of Virginia, a breach of the school’s honor code “has but a single penalty: immediate expulsion from the university.”

A Simple Plan To Balance Trade And Bring Back All Those Jobs

Dave Johnson

We have an enormous, humongous and ongoing trade deficit. This means we buy more from other countries than they buy from us and we do this every year.

Trade is supposed to be balanced. Instead we have been running continuing trade deficits since the late 1970s. A trade deficit drains our economy and forces consumers, businesses and government to borrow, just to keep going. This means that jobs, factories, entire industries and literal boatloads of money have been leaving the country – it really adds up because we do this every single year. We have to do something about this.

The Meaning of Ronald Reagan

by Christopher Phelps

The lawsuit against Rick Perlstein is a distraction from a much-needed debate over Reagan’s rise.

New Orleans’s “red-light district” was “festooned with red, white, and blue bunting” during the 1976 Republican National Convention, the “smut peddlers” placing “elephants” in their store windows.

Those twelve quoted words are the only real overlap between the 804 pages of Rick Perlstein’s newly-released The Invisible Bridge: The Fall of Nixon and the Rise of Reagan and a prior Reagan biography by right-wing publicist Craig Shirley. But Shirley’s attorneys are demanding $25 million in damages from Simon and Schuster and a pulping of all copies of Perlstein’s book.

Tomgram: Patrick Cockburn, How to Ensure a Thriving Caliphate

By Patrick Cockburn
Posted on August 21, 2014, Printed on August 24, 2014
http://www.tomdispatch.com/blog/175884/

Think of the new “caliphate” of the Islamic State, formerly the Islamic State in Iraq and Syria (ISIS), as George W. Bush and Dick Cheney's gift to the world (with a helping hand from the Saudis and other financiers of extremism in the Persian Gulf).  How strange that they get so little credit for its rise, for the fact that the outlines of the Middle East, as set up by Europe’s colonial powers in the wake of World War I, are being swept aside in a tide of blood.

Had George and Dick not decided on their “cakewalk” in Iraq, had they not raised the specter of nuclear destruction and claimed that Saddam Hussein’s regime was somehow linked to al-Qaeda and so to the 9/11 attacks, had they not sent tens of thousands of American troops into a burning, looted Baghdad (“stuff happens”), disbanded the Iraqi army, built military bases all over that country, and generally indulged their geopolitical fantasies about dominating the oil heartlands of the planet for eternity, ISIS would have been an unlikely possibility, no matter the ethnic and religious tensions in the region.  They essentially launched the drive that broke state power there and created the kind of vacuum that a movement like ISIS was so horrifically well suited to fill.

Stanford scientists develop a water splitter that runs on an ordinary AAA battery

In 2015, American consumers will finally be able to purchase fuel cell cars from Toyota and other manufacturers. Although touted as zero-emissions vehicles, most of the cars will run on hydrogen made from natural gas, a fossil fuel that contributes to global warming.

Now scientists at Stanford University have developed a low-cost, emissions-free device that uses an ordinary AAA battery to produce hydrogen by water electrolysis. The battery sends an electric current through two electrodes that split liquid water into hydrogen and oxygen gas. Unlike other water splitters that use precious-metal catalysts, the electrodes in the Stanford device are made of inexpensive and abundant nickel and iron.

Exposing the Great 'Poverty Reduction' Scandal

Understanding how we measure poverty rates is vital if we want to adequately address this global crisis

by Jason Hickel

The received wisdom comes to us from every direction: poverty rates are declining and extreme poverty will soon be eradicated from the face of the earth. This narrative is delivered by the World Bank, the governments of rich countries, and – most importantly – the UN Millennium Development Campaign. Relax, they tell us. The world is getting better, thanks to the spread of free market capitalism and Western aid. Development is working, and soon, one day in the very near future, poverty will be no more.

It’s a comforting story, but unfortunately it’s just not true. Poverty is not disappearing as quickly as they say. In fact, according to some measures, poverty has been getting significantly worse. If we are to be serious about eradicating poverty, we need to cut through the sugarcoating and face up to some hard facts.

Paul Krugman: Hawks Crying Wolf

According to a recent report in The Times, there is dissent at the Fed: “An increasingly vocal minority of Federal Reserve officials want the central bank to retreat more quickly” from its easy-money policies, which they warn run the risk of causing inflation. And this debate, we are told, is likely to dominate the big economic symposium currently underway in Jackson Hole, Wyo.

That may well be the case. But there’s something you should know: That “vocal minority” has been warning about soaring inflation more or less nonstop for six years. And the persistence of that obsession seems, to me, to be a more interesting and important story than the fact that the usual suspects are saying the usual things.

Before I try to explain the inflation obsession, let’s talk about how striking that obsession really is.

The Dirty Little Secret of How CEOs Enrich Themselves at Your Expense

By Lynn Stuart Parramore

August 20, 2014 | Everyone from Warren Buffett [3] to Robert Reich [4] is talking about a favorite Wall Street trick called stock buybacks. But what are they and what do they mean to you?

William Lazonick is a leading expert on the history of the American business corporation. A professor of economics at the University of Massachusetts Lowell, where he directs the Center for Industrial Competitiveness, he has long been watching a trend that has only recently been attracting media attention and forcing many to reassess the nasty form of capitalisim that has been unleashed on us in recent decades.

In an email interview with Lazonick, I asked him about how the widespread and little-understood obsession with stock buybacks among American executives is driving inequality and pushing prosperity further away from everyone except those at the very top. (Lazonick's in-depth exploration of this topic is available in the current issue of theHarvard Business Review [5].)

His answers are a clarion call for changing the way America does business.

How Government Blacklists Journalists From Accessing the Truth

By David Sirota

August 21, 2014 | As states move to hide details of government deals with Wall Street, and as politicians come up with new arguments to defend secrecy, a study released earlier this month revealed that many government information officers block specific journalists they don't like from accessing information. The news comes as 47 federal inspectors general sent a letter to lawmakers criticizing "serious limitations on access to records" that they say have "impeded" their oversight work.

The data about public information officers was compiled over the past few years by Kennesaw State University professor Dr. Carolyn Carlson. Her surveys found that 4 in 10 public information officers say "there are specific reporters they will not allow their staff to talk to due to problems with their stories in the past."

"That horrified us that so many would do that," Carlson told the Columbia Journalism Review, which reported on her presentation at the July conference of the Association for Education in Journalism and Mass Communication.

New app allows you to shop in a way that reflects your politics

By Moyers & Company
Thursday, August 21, 2014 7:01 EDT

Last week, Colby Itkowitz reported for The Washington Post that a former congressional staffer has come up with a smartphone app that allows you to shop in a way that reflects your political orientation.

39 kilotons a year: Mysterious source of ozone-depleting chemical banned since 2009 baffles NASA

By Agence France-Presse
Thursday, August 21, 2014 5:55 EDT

A chemical used in dry cleaning and fire extinguishers may have been phased out in recent years but NASA said Wednesday that carbon tetrachloride (CCl4) is still being spewed into the atmosphere from an unknown source.

The world agreed to stop using CC14 as part of the Vienna Convention on Protection of the Ozone Layer and its Montreal Protocol, which attained universal ratification in 2009.

Water and sunlight the formula for sustainable fuel

An Australian National University (ANU) team has successfully replicated one of the crucial steps in photosynthesis, opening the way for biological systems powered by sunlight which could manufacture hydrogen as a fuel.

"Water is abundant and so is sunlight. It is an exciting prospect to use them to create hydrogen, and do it cheaply and safely," said Dr Kastoori Hingorani, from the ARC Centre of Excellence for Translational Photosynthesis in the ANU Research School of Biology.

Hydrogen offers potential as a zero-carbon replacement for petroleum products, and is already used for launching space craft. However, until this work, the way that plants produce hydrogen by splitting water has been poorly understood.

FBI Tracks Charter Schools

by Ruth Conniff

There's been a flood of local news stories in recent months about FBI raids on charter schools all over the country.

From Pittsburgh to Baton Rouge, from Hartford to Cincinnati to Albuquerque, FBI agents have been busting into schools, carting off documents, and making arrests leading to high-profile indictments.

Journalist on Crackdown in Ferguson: "Police Beckoned Us Over, Then Opened Fire When We Were Near" 

By Amy Goodman

August 20, 2014 | Protests over the fatal police shooting of unarmed 18-year-old Michael Brown have continued for a 10th night in Ferguson, Missouri. Protesters are calling for the arrest of Ferguson police officer Darren Wilson, who shot the unarmed teenager six times, including twice in the head. According to The New York Times, Attorney General Eric Holder and top Justice Department officials are weighing whether to open a broader civil rights investigation to look at Ferguson’s police practices at large. Meanwhile, the Committee to Protect Journalists has called on the Ferguson Police Department to stop harassing and detaining journalists. At least 11 journalists have been detained while covering the protests sparked by the shooting of Brown. We speak to Ryan Devereaux of The Intercept. On Monday night covering the demonstrations, he was shot by a rubber bullet, arrested and jailed overnight.

How Should Social Security Benefits Respond to an Economic Collapse?

This is the issue that Andrew Biggs implicitly raises in his Wall Street Journal column highlighting the jump in the size of the projections of the Social Security shortfall since 2008. Biggs complains that progressives have responded to the economic collapse by proposing an increase in benefits that would make the shortfall even larger rather than supporting plans for eliminating the projected shortfall. While Biggs' focus is explicitly the solvency of the program, the actions of progressives can only be understood against the larger economic context.

A Short History of Postal Banking

As the debate over reinstituting postal banking heats up, we should know we had it. And it worked.

By Mehrsa Baradaran

Last week John Oliver offered up an exposé on payday loans, describing them as “the circle of debt” that “screws us all.” And at the conclusion of Oliver’s takedown on payday lending Sarah Silverman offered low-income borrowers better alternatives—including donating blood and jumping in front of rich folks’ cars. But there is a burgeoning alternative to usurious payday lending: postal banking, which allows low-income Americans to do their banking—from bill payment to small loans—at the same post office where they buy stamps. As states try to regulate away the payday-lending sector, their desperate customers may be pushed either into the black market or bankruptcy. Postal banking is a much better solution. It is time to consider a “public option” for small loans.

Every other developed country in the world has postal banking, and we actually did too. It is important to remember this forgotten history as we begin to talk seriously about reviving postal banking because the system worked and it worked well. Postal banking, which existed in the United States from 1911 to 1966, was in fact so central to our banking system that it was almost the alternative to federal deposit insurance, and served as such from 1911 until 1933. The system prevented many bank runs during a turbulent time in the nation’s banking history—essentially performing central banking functions before the Federal Reserve was up to the task. Postal banking helped fund two world wars and reduced a massive government deficit after the Great Depression.

Turning waste from rice, parsley and other foods into biodegradable plastic

Your chairs, synthetic rugs and plastic bags could one day be made out of cocoa, rice and vegetable waste rather than petroleum, scientists are now reporting. The novel process they developed and their results, which could help the world deal with its agricultural and plastic waste problems, appear in the ACS journal Macromolecules.

Dean Baker: What Does The Fed Have To Do With Social Security? Plenty.

Most of the people who closely follow the Federal Reserve Board’s decisions on monetary policy are investors trying to get a jump on any moves that will affect financial markets. Very few of the people involved in the debate over the future of Social Security pay much attention to the Fed. That’s unfortunate because the connections are much more direct than is generally recognized.

The basic story of Social Security’s finances is that, while the program is entirely sound for the near future, the program is projected to face a shortfall in the decade of the thirties. Under current law, at that point it would be necessary to reduce benefits from their scheduled level, unless additional revenue can be raised.

Women will benefit from the Affordable Care Act's contraceptive coverage

Women could benefit greatly from the Affordable Care Act's mandate for contraceptive coverage, according to Penn State College of Medicine researchers.

The Affordable Care Act requires private insurance plans -- except those grandfathered or exempted due to employers' religious beliefs -- to provide women with access to all FDA-approved contraceptive methods without cost-sharing. This first-dollar coverage "has the potential to dramatically shift contraceptive use patterns, to reduce the U.S. unintended pregnancy rate ... and to improve the health of women and families," wrote Carol S. Weisman, Distinguished Professor of Public Health Sciences and Obstetrics and Gynecology, and Cynthia H. Chuang, associate professor of medicine and public health sciences.

Kleinbard: “Competitiveness” Argument for Moving Firms’ Headquarters Overseas Is a Canard

Posted by: Chye-Ching Huang

The claim that many U.S. companies are moving their headquarters overseas because U.S. corporate tax rates make them uncompetitive is “largely fact-free,” USC law professor and former Joint Tax Committee staff director Edward Kleinbard concludes in a new paper.

While many firms and their lobbyists highlight the 35 percent top U.S. corporate rate, that’s not what companies actually pay, Kleinbard explains. The effective tax rate that U.S. multinationals face on their worldwide income — that is, the share of this income that they pay in taxes — is well below this statutory rate. A big reason is that multinationals report vast amounts of their income as coming from tax havens where they pay little or no tax, even if they have few staff and do little business there.

How to Talk About Climate Change So People Will Listen

Environmentalists warn us that apocalypse awaits. Economists tell us that minimal fixes will get us through. Here's how we can move beyond the impasse.

By Charles C. Mann

Not long ago, my newspaper informed me that glaciers in the western Antarctic, undermined by the warmer seas of a hotter world, were collapsing, and their disappearance “now appears to be unstoppable.” The melting of these great ice sheets would make seas rise by at least four feet—ultimately, possibly 12—more than enough to flood cities from New York to Tokyo to Mumbai. Because I am interested in science, I read the two journal articles that had inspired the story. How much time do we have, I wondered, before catastrophe hits?

One study, in Geophysical Research Letters, provided no guidance; the authors concluded only that the disappearing glaciers would “significantly contribute to sea level rise in decades to centuries to come.” But the other, in Science, offered more-precise estimates: during the next century, the oceans will surge by as much as a quarter of a millimeter a year. By 2100, that is, the calamity in Antarctica will have driven up sea levels by almost an inch. The process would get a bit faster, the researchers emphasized, “within centuries.”

Paul Krugman: Why We Fight Wars

A century has passed since the start of World War I, which many people at the time declared was “the war to end all wars.” Unfortunately, wars just kept happening. And with the headlines from Ukraine getting scarier by the day, this seems like a good time to ask why.

Once upon a time wars were fought for fun and profit; when Rome overran Asia Minor or Spain conquered Peru, it was all about the gold and silver. And that kind of thing still happens. In influential research sponsored by the World Bank, the Oxford economist Paul Collier has shown that the best predictor of civil war, which is all too common in poor countries, is the availability of lootable resources
like diamonds. Whatever other reasons rebels cite for their actions seem to be mainly after-the-fact rationalizations. War in the preindustrial world was and still is more like a contest among crime families over who gets to control the rackets than a fight over principles.

These folks feed their family with a garden in their swimming pool — and you can, too

By Sara Bernard
18 Aug 2014 8:01 AM

When Dennis and Danielle McClung bought a foreclosed home in Mesa, Ariz., in 2009, their new yard featured a broken, empty swimming pool. Instead of spending a small fortune to repair and fill it, Dennis had a far more prescient idea: He built a plastic cap over it and started growing things inside.

Thus, with help from family and friends and a ton of internet research, Garden Pool was born. What was once a yawning cement hole was transformed into an incredibly prolific closed-loop ecosystem, growing everything from broccoli and sweet potatoes to sorghum and wheat, with chickens, tilapia, algae, and duckweed all interacting symbiotically to provide enough food to feed a family of five.

Recycling old batteries into solar cells

Proposal could divert a dangerous waste stream while producing low-cost photovoltaics

CAMBRIDGE, Mass-- This could be a classic win-win solution: A system proposed by researchers at MIT recycles materials from discarded car batteries — a potential source of lead pollution — into new, long-lasting solar panels that provide emissions-free power.

The system is described in a paper in the journal Energy and Environmental Science, co-authored by professors Angela M. Belcher and Paula T. Hammond, graduate student Po-Yen Chen, and three others. It is based on a recent development in solar cells that makes use of a compound called perovskite — specifically, organolead halide perovskite — a technology that has rapidly progressed from initial experiments to a point where its efficiency is nearly competitive with that of other types of solar cells.

The Government-Industry Conspiracy that Promotes Crap Food in School

By Michele Simon

August 5, 2014 | People often ask me, “How does lobbying work?” Last week it was with fat and sugar, when the International Dairy Foods Association (IDFA) hosted its 32nd annual Capitol Hill Ice Cream Party. Some 6,000 bowls of ice cream were served up to Sen. Tom Harkin, Reps. Pete Sessions, Robert Aderholt, Jeff Denham, John Shimkus, Ron Kind and Lamar Smith, among others, according to Politico [3].

Dairy lobbyists are ever present in Washington, and their efforts usually pay off. For example, last year when the IDFA implored [4] the U.S. Department of Agriculture (USDA) to give dairy foods a pass in the new snack food guidelines for schools, the agency capitulated [5], opening school doors to even more junk food [6], such as YoCrunch Lowfat Yogurt with M&Ms [7].

This is just one of many examples I uncovered in a report I published last month, "Whitewashed: How Industry and Government Promote Dairy Junk Foods [8]" (PDF). The dairy industry, propped up by government, has convinced us of the health benefits of milk and other dairy products. The assumption that eating dairy is essential to the diet has obstructed our ability to criticize federal government support for unhealthy dairy products, of which there are many.

Dodd-Frank Versus Glass-Steagall: How Do They Compare?

By Pam Martens and Russ Martens: August 7, 2014

The U.S. Senate has been holding hearings since June which show a clear rethinking on what type of legislation it must enact going forward to achieve meaningful reforms of Wall Street and protect the economy from its excesses.

The 849-page Dodd-Frank financial reform legislation, enacted four years ago in 2010, mandated 398 new rules; just 208 of those rules, or 52 percent, have been enacted and none of them seem to be reining in excesses on Wall Street.

Ferguson fuels 'kill switch' debate

By Kate Tummarello - 08/16/14 12:41 PM EDT

Tech and civil liberties groups are pushing back on a California "kill switch" bill that they warn could be used to silence protests like the ones seen this week in Ferguson, Mo.

Critics say a California bill passed on Monday contains a dangerous carve-out that could give law enforcement the power to shut down cellphones during emergency situations, possibly including public demonstrations.

When Will the Government Stop Trying to Send This Reporter to Jail for Telling the Truth?

By Trevor Timm

August 16, 2014 | If you blinked at the end of June, you may have missed one of the best pieces of journalism in 2014 [3]. The New York Times headline accompanying the story was almost criminally bland [4], but the content itself [3] was extraordinary: A top manager at Blackwater, the notorious defense contractor, openly threatened to kill a US State Department official in 2007 if he continued to investigate Blackwater’s corrupt dealings in Iraq. Worse, the US government sided with Blackwater and halted the investigation. Blackwater would later go on to infamously wreak havoc in Iraq [5].

But what makes the story that much more remarkable is that its author, journalist James Risen, got it published amidst one the biggest legal battles over press freedom in decades – a battle that could end with the Justice Department forcing him into prison as early as this fall. It could make him the first American journalist forced into jail by the federal government since Judith Miller nearly a decade ago.

Thomas Frank: Jon Stewart is not enough: The curse of centrism, and why the Tea Party keeps rolling “Daily Show” Democrats

It's easy to take shots and laugh at the know-nothing right. But our smirks let complicit Democrats off the hook

I have spent many years deriding the right, and I have to admit, it has been a hoot. The conservative world is an endless shooting gallery of hypocrites, con men, narcissists, and walking examples of this or that species of cognitive malfunction. In fact, whacking the wingers is such a fun pastime that it is ballooning in popularity these days: The crazy right now furnishes reliable material for our generation’s best comedians, and laughing at the benighted japes of the GOPers is, for many of us, the closest we come to real political involvement.

Today let’s try a little introspection instead. What does it mean when being “on the left” is defined as being a fan of extremely partisan entertainment? What does it do to our larger political vision when we confine our political thinking to the crafting of hilarious put-downs of Tea Partiers and right-wing reality-doubters?

Not a Tea Party, a Confederate Party

Late in 2012, I came out of the Lincoln movie with two historical mysteries to solve:

• How did the two parties switch places regarding the South, white supremacy, and civil rights? In Lincoln’s day, a radical Republican was an abolitionist, and when blacks did get the vote, they almost unanimously voted Republican. Today, the archetypal Republican is a Southern white, and blacks are almost all Democrats. How did American politics get from there to here?

• One of the movie’s themes was how heavily the war’s continuing carnage weighed on Lincoln. (It particularly came through during Grant’s guided tour of the Richmond battlefield.) Could any cause, however lofty, justify this incredible slaughter? And yet, I realized, Lincoln was winning. What must the Confederate leaders have been thinking, as an even larger percentage of their citizens died, as their cities burned, and as the accumulated wealth of generations crumbled? Where was their urge to end this on any terms, rather than wait for complete destruction?

The first question took some work, but yielded readily to patient googling. I wrote up the answer in “A Short History of White Racism in the Two-Party System“. The second turned out to be much deeper than I expected, and set off a reading project that has eaten an enormous amount of my time over the last two years.