Monday, July 18, 2011

Saturday, July 16, 2011

Debt Ceiling Questions

After back-to-back Friday and Monday prime time television appearances by President Obama and House Speaker Boehner, differences between the Democrat and Republican positions on the debt ceiling remain illusive -  while both agree on massive cuts and 'reform'  that would put Medicare, Medicaid and Social Security on the path to a marginal survival, the R's adamantly oppose (to the point of taking the economy over the cliff) any revenue generation while Dems would settle for moderate, back-door revenue increases like cutting subsidies for corporate jets. One sticking point looming large is that R's would like a two-step process continuing the debate into 2012 while the President, for obvious reasons, would prefer to nail the debt ceiling down until 2013. 

On Monday evening, the President, who we see is a friend of trickle-down economics, lost an opportunity to seize the debate which Republicans have effectively dominated for months.  Obama could have redefined the discussion with mention of Majority Leader Reid's proposal endorsed earlier that afternoon by the White House.  Reid's plan would give the R's exactly what they had originally demanded:  enough cuts to offset the debt ceiling increase of $2.5 Trillion and no new revenues (while taking the Big Three off the table).  But Obama, who has moved from requesting a 'clean' debt ceiling in April to capitulation to Republican demands and then sweetened the pot by volunteering the Big Three for cuts, bombed Monday evening with nothing new to say as he continued to tout his 'balanced' approach that is neither balanced nor fair.  It may be that Obama's unwillingness to reframe the discussion is indicative of his preference to hold out for the "Grand Bargain' approach.    

At this late date, the politically and artifically-charged deficit crisis which was caused by unfunded wars, Bush/Obama tax cuts, the 2008 financial crisis and a massive loss of jobs and revenue has raised a series of questions that remain unanswered:

Why are the American people expected to 'share the sacrifice' when it has been a dysfunctional, corrupt Congress and the greedy bastards on Wall Street that caused this economic catastrophe?  

If failure to increase a debt ceiling would create a fiscal Armaggedon, why have both Republicans and Democrats voted against its increase in recent years?  (see below) 

Regardless of which proposal is agreed to, how will raising the debt ceiling release trillions of corporate and bank dollars into the economy, create new jobs, stop housing foreclosures or reduce spending?

Did President Obama understand that debt ceiling problems were on the horizon when he continued Bush tax cuts for the country's wealthiest 2%?

Or is this entire exercise a misguided political game of oneupmanship designed to intimidate the population into conceding its favorite 'granma' programs?

We now know that electing competent people to take care of the country's business, to make the public interest their most important priority and to trust them to not line their pockets with corporate largesse was never a realistic expectation. Once the Tea Party took control of the Republican party with the 2010 elections (which was not difficult since the right wing religious fundamentalists had already done a terrific job at that), destroying the country's favored social safety net programs, under the guise of controlling the country's deficit,  became their number one target.  

The result of a calculated corporate effort headed by former Rep. Dick Armey's Freedom Works, a corporate lobbying firm, to create a 'spontaneous' uprising of discontent in opposition to government health care and 'big' government, the newly-elected 86 faith-based (rather than fact-based) Tea Party Members of Congress continue to control the debate as the Democrats fumble.  

In large part, the modern day Philistines were elected in refutation of President Obama who had already shown an unhealthy tendency for 'bipartisanship' as he rolled over easier than an Easter egg for Wall Street interests and backtracked on campaign promises.  The TPer's brought with them an anti-intellectual, reactionary mentality displaying a religious patriotic fervor that was frequently unaware of the differences between the Constitution and the Declaration of Independence.  When the R's took control in 2010, the House became less than full time job with two weeks in Session and one week off - nothing less than a  deliberate effort to make functioning of government difficult.   .

With the Speaker held hostage by his own TP caucus as the debt ceiling debate heated up, it has been clear that their side was winning.  Insistent, tenacious and rigid in their opinions as Goliath, the House Republicans make no bones about their sacred belief that a government default will not be as catastrophic as predicted.  Antagonistic to the values of a civil and representative government, the TPer's, limited by a parochial world view, have provided no creative ideas or suggested solutions to any of the country's many problems.           

Since the 1930's and FDR's New Deal, it has been the Democratic party which has assumed the role as protectors of the middle class just as it has been the Republican party's goal to destroy the government's social contract with the American people.  It is the Democrats who have been relied upon to hold corporate America and its Republican minions in check.  As the debt ceiling talks stalemate with one unacceptable option after another, it is no longer a guarantee that the American public can depend on Democrats to oppose their own President from initiating war or extensive spending cuts  to domestic programs.

Without regurgitating the last 50 years, it would be fair to say that with the 2008 election, Barack Obama came into office with a clean slate and an extraordinary amount of good will and anticipation by the American public that real Change was in the air.  Even with significant majorities in both the Senate and House but given the difficulty of the task ahead, it would take time and patience to see results, the American people were with him - until health care reform and the lack of a public option or meaningful cost containment revealed that the President was beholden to the medical insurance and pharmaceutical industries.  His efforts bogged down under the weight of an unwieldy complicated package when a simple Medicare for All plan would have been a sure winner and impossible for Republicans to defeat   A series of acquiescences (including financial 'reform') have contributed to a widespread belief that Obama can be rolled on anything.   

Fast forward to January 24, 2010 when the Senate, hardly a bastion of populist principles, defeated a resolution offered by Sen. Kent Conrad (ND) to establish a "Bipartisan Task Force for Responsible Fiscal Action to assure the long-term fiscal stability and economic security of the Federal Government and to expand future prosperity and growth for all Americans." Even as Conrad's amendment garnered more votes with 37 Democrats in support, it fell short of the necessary 60 votes to avoid a filibuster.  Despite President Obama's endorsement, 23 Democrats opposed the amendment with 18 still in the Senate (Sens. Akaka, Baucus, Brown, Cantwell, Cardin, Casey, Harkin, Inouye, Lautenberg, Merkley, Mikulski, Murray, Reed, Rockefeller, Sanders Stabenow, Udall (NM) and Whitehouse)   The President later signed an Executive Order creating the Task Force and appointing Erskine Bowles and Alan Simpson, both anti-Social Security, to chair the now-infamouis Deficit Commission.  Many Commission recommendations including a $4 trillion spending cut, a revenue cap at 21% of GDP and 'sharply reduce' tax rates are the basis for the current debt ceiling imbroglio.

Enshrined in law in 1917 when the national debt was 'limited' at $8 billion, some House Republicans may not be fully aware that the country has a statutory obligation to pay its bills. Congress has raised the government's debt ceiling 93 times; 11 times since 1996 - always as a formality totally unrelated to public policy.  It was not, however, until President Nixon's Order in 1971 removing gold as backing for the dollar that the U.S. debt began to explode.   Congress was no longer inhibited in its use of credit and borrowing escalated on the 'promise' of payment by the 'full faith and credit' of the U.S. government eliminating the previous pay-as-you-go concept.    

A review of debt ceiling votes shows that debt ceiling increases have been done mostly on a partisan basis depending on which party was in power and who was sitting in the White house. Here are a few examples:
Frequently buried in complicated parliamentary maneuvers to shield Members from unpopular votes, the House of Representatives voted on April 28, 2005 to approve HJR 47 on a voice voice to increase the US statutory limit of public debt from $8.1 trillion to $8.9 trillion under a 'special rule' which allowed for no roll call vote.
On March 16, 2006 with George Bush still in the White House, the Senate voted 48-52 to approve the same resolution with all Senate Democrats (including 44 still in the Senate and then Sens. Obama, Clinton and Sslazar) voting NO.
In September, 2007 with Bush still in office, the debt ceiling was raised to $9.8 trillion on a 53 - 42 vote with 26 Republicans and Democrats each voting YES and 20 R's and 21 Dems voting NO.   During Bush's tenure, there was no requirement for a 60 vote threshold to prevent a filibuster.  
On January 26, 2010 with Barack Obama in the White House, the Democratically-controlled Senate voted 60 - 39 on a party line vote to adopt HJR 45 which raised the debt to $14.3 trillion. On February 4, 2010, the Democratically controlled House voted 233 - 187 in favor of the debt increase.

As the debt ceiling debates dominate with predictions of an economic calamity of global proportions, US debt ratio to GDP at 65% is hardly the monster crisis that has been portrayed.  It does seem puzzling that with the aforementioned votes, there has never been such a storm of protest. What is different today is that manipulating the debt ceiling as a convenient crisis to implement Bowles-Simpson thus providing Republicans with an opportunity to gut the heart and soul out of social programs that would otherwise be untouchable through the regular legislative process - and apparently our Democratic President is a willing participant.. 

The most prevalent scenario supposes that the US must make its next interest payment on the debt and would therefore be forced to miss other mandated requirements such as Social Security payments as interest rates soared that would then put the country in default.  Once in default, with the dollar still the world's reserve currency,  the global economy could be plunged into another widespread economic disaster.  If the government defaults causing obvious damage to the economy, the government's ability to function is further decimated  - and therein lies the crux of the matter.  In the name of fiscal responsibility, the TPer's have made no secret of their desire to destroy government as we know it. .   

To no one's fault but his own, the President backed himself into a corner (and took obedient Democrats with him) by creating a climate of submission when he established a Deficit Commission and then again when he 'froze' Federal employee pay (a Republican initiative that most Democrats opposed) and then again when he assumed ownership of the Bush tax cuts for bazillionaires last December.  .    
By Friday evening, Boehner walked away from negotiations with the President who let slip that his latest offer to House Republicans was a more 'generous' package than the Gang of Six with $3 trillion cuts in discretionary spending and $650 billion of 'modifications' to the Big Three entitlements.  Over the weekend, the Democratic position had degenerated, in face of Tea Party obstinence, to complete elimination of any tax revenue raising measures thereby making the debt ceiling agreement an almost 100% Republican creation.   That reality, however, has not stopped Obama from assuming as if he were a working class hero fighting on behalf of the downtrodden  'working stiffs getting a raw deal...with somebody willing to look out for them" while out of the other side  he continues to favor a 'big' package to show, he says, that he's "serious about deficit reduction" as if his manhood will be somehow enhanced as he gives away trillion dollar cuts that will drive more middle class Americans deeper into a bottomless ditch. 

With the August 2nd date looming closer, the President has a last-ditch opportunity to assume the mantle of  leadership with the Amendment 14 option which offers a path to increasing a 'clean' debt ceiling without any bells or whistles - just as Obama first requested some months ago.  The President has rejected the idea, also suggested by President Clinton, citing White House legal opinion that he does not have the authority - but if the President can usurp Congressional authority to make war, surely he can do the same to save our crumbling country from becoming a third world banana republic.
As the economy teeters on a dangerous precipice, printing new paper money is not the answer.  No matter which debt ceiling version is adopted, the debate is a colossal waste of time as the cuts will do nothing to address the 'real' problems the country is facing.  Until Obama and all the sycophants responsible for this mess understand that a major, top to bottom restructuring of the country’s fiscal institutions is required, American citizens are at the mercy of a political system that rewards deception and fraud.

Monday, July 11, 2011

House Progressives Defeat Libyan War Amendment

As House Democrats wring their hands over the President’s Austerity Budget with all its severe consequences, recent votes on the 2012 Defense Department Appropriation (HR 2219) may be indicative of whether activist Democrats outside the Beltway and the American public in general can count on House progressives when the chips are down.  The $649 Billion spending bill funds the Wars in Iraq and Afghanistan at $119 billion with no line item for US presence in Libya questioning how the $1 billion expenditure by September will be paid.      

The 2009 health care debate over a public option is a sorry reminder of how the Progressive Caucus swore up-and-down, signed letters and issued press releases that never, no-how no-way, would they ever accept health care legislation without some form of a public option and we all know how well that went.  That earlier cave-in on principle does not auger well for the upcoming pressure to slice America’s favorite safety nets perhaps to the bone.   

Enter the Defense Department spending bill with assorted amendments to cut funds for Obama’s Wars with a handful of votes indicative of which Members care about the dot-to-dot connection between budget austerity in favor of funding never-ending wars in the Middle East.   This is not rocket science requiring a great deal of intellectual or analytical ability but is simply a hint at whether Progressives in the House of Representatives still have any principles intact or still value the Constitution.        

Two sample votes include Rep. Barbara Lee’s  (CA) amendment to cut $30 B from military operations in Afghanistan lost on a 97 – 320 vote with 94 Democrats voting No.   Next up was Rep. John Garamendi’s (CA) amendment which would have cut $20 B from the Pentagon for  Afghanistan which lost on a 133 to 295 vote with 70 Democrats voting No.

Clearly even if all those opposing Democrats switched their votes to Aye, both Lee (Roll Call #502) and Garamendi’s (Roll Call # 503) Amendments would have been defeated.  It is, however, instructive to examine how certain Democrats voted.  With a membership of 74,  four Progressive Caucus Members including Reps. Brown (FL),  Kaptur (OH),  Carson (Ind.) and  McDermott (Wash)  all voted against both Lee and Garamendi while Caucus Members Reps. Roybal-Allard (Ca), Johnson (Ga), Loebsack (Ia), Lujan (NM), Maloney (NY), Moran (Va) voted only against Lee.  . 
The final amendment presented by Reps. Amash (R- Mich) and Kucinich (OH) to cut US military intervention in Libya lost on a 199 to 229 vote with 123 Democrats voting to continue military operations with only 67 Democrats voting to pull the plug in Libya. (Roll call #514)  This amendment which, by inference, challenged Presidential authority to wage war without Congressional approval was regarded as the most significant of the day and if the following  Progressive Democrats had switched their votes, the Amendment would have passed.  At stake, however, was the choice between damaging a Presidential ego or affirming the Constitution.  So now we know which is more important.       

On this vote, 29 Progressive Caucus Democrats voted against the Amendment that would have denied US funds for continued military action in Libya were Reps.  
Chu (Ca),  Cohen (Tenn),  McDermott (Wash), Moran (Va), Stark (Ca), Roybal-Allard (Ca), Rush (Ill),     Watt (NC), Welch (Vt.), Brown (Fl), Schakowsky (Ill.), Brady (Pa), Loebsack (Ia), Sanchez Linda (Ca),  Johnson (Tx), Fattah (Pa), Hirono (Ha), Filner (Ca), Ellison (Minn), DeLauro (Conn), Polis (Co), Blumenauer (Ore), Pallone (NJ),  Thompson (Miss), Wilson  (Fl), Olver (Mass), Jackson-Lee (Tx), Bass (Ca) and Johnson (Ga)
On Final Passage (Roll Call # 532), 112 Democrats (including 18 Progressive Caucus Members) joined with Republicans to approve more war spending in the face of massive economic cataclysm at home on a final vote of 336 – 87 (75 Dems and 12 Rs).  Progressive Caucus members voting to fund HR 2219 included Reps.

Fattah (Pa),  Kaptur (Oh), Moran (Va), Johnson (Tx), Loebsack (Ia), Edwards (Md), Conyers (Mich),  Cummings (Md),  Ricbardson (Ca), Rangel (NY), Clay (Mo), Carson (Ind), Slaughter (NY), Brown (Fl),  Roybal-Allard (Ca),  DeLauro (Conn), Waters (Ca) and Thompson (Ms)   

It is worth remembering that it was the Caucus that had the initiative to produce a true People's Budget which was a viable alternative to what Obama or the Republicans have been offering - yet was not taken seriously by the White House or Biden's negotiating group or the mainstream media.  Perhaps it is time for the Caucus which should be on the front lines in defense against the onslaught to step back and reconsider what is progressive about the Progressive Caucus. 
The aforementioned votes reinforce the anxiety that the Caucus cannot be trusted to protect the Big Three social safety net issues or even minor social programs from the chopping block.  These Progressives need to be reminded that they were not elected to walk on anti-war votes, that they are counted on to be in the forefront of fighting for progressive issues without a need to monitor each vote. As the mainstream media rarely reports these details and the Democratic Party presents an increasingly narrow range of candidates, Progressive Members function with the comfort that their voting record remains obscure.   

House of Representatives Progressive Caucus membership

To check Congressional votes

Thursday, July 7, 2011

Senate Resolution on Millionaire Contribution to Debt Ceiling

On July 7th, the Senate voted 74 - 22 in support of a non-binding Sense of the Senate Resolution  (S 1323) that any deficit reduction deal should require that Millionaires make a 'more meaningful' contribution to resolve the country's debt ceiling dilemma.   It doesn't take a  political savant to understand that since the majority of Senators voting in the affirmative are Millionaires first, the reality is that any revenue-enhancing cut to Millionaire taxes will not be a 50-50 split or come close to the more dire cuts to entitlements and other social safety net programs.

When Majority Leader Reid announced he would 'force' R's to vote on tax cuts for Millionaires, Republicans like Sen. Kyl, DeMint and Inhof took the bait and joined Democrats confirming that the subject at-hand is little more than an insignificant symbolic vote.  As Obama continues to play with cuts to entitlement programs, once foundations of the Democratic Party, it would  have been naive to expect that a real "more meaningful' contribution would be part of the 'shared sacrifice." .

See Open Secrets for Congressional Wealth: 

The 22 votes against the Resolution included one Democrat (Sen. Ben Nelson, Nebraska) voting with the following Republicans:

Ayotte, NH                                                          Inhof, Ok     
Blunt, Mo                                                            Isakson, Ga
Boozman, Ar                                                       Johnson,Wisc 
Brasso, Wyo                                                       Lee, Utah
Chambliss, Ga.                                                    Paul, Ky.
Coburn, OK                                                        Portman,Ohio
Crapo, Idaho                                                      Risch, Idaho
DeMint, SC                                                        Rubio, Fl.
Enzi, Wyo                                                           Toomey, Pa.
Hatch, Utah                                                         Wicker, Ms. 
Heller, Nev                                                           .

Tuesday, July 5, 2011

The Case Against Casey Anthony

With no DNA or fingerprints or blood or other forensic evidence tied to Casey Anthony, the case against Anthony for the murder of her two year old daughter was totally dependent on supposition and circumstantial evidence.  Yet the Orange County District Attorney sought a death penalty verdict knowing full well that the necessary factual basis to convince a jury of guilt was lacking.    
In other words, the Casey Anthony jury in Orlando was being asked to find her guilty of premeditated (or not) first degree Murder with death as her punishment based solely on information that was not supported by facts.  

Citizens of Orange County as well as Florida residents might ask if expenditure of taxpayer dollars in these times of fiscal austerity were justified and whether the District Attorney‘s office was responding to more than just a pursuit of justice.  At the sentencing hearing on July 7th, the Orange Co. DA's requested that the Court consider reimbursement to cover the costs of their investigation.  When the total costs for prosecution and defense are rendered, it will be the taxpayers paying the bill.  The Florida State Legislature had earlier allocated, while in the midst of cutting vital social service programs, a $350,000 ‘grant’ to the Orange County District Attorney’s Office for the prosecution of Anthony as Republicans continue their War on Women. 

The vengeance with which DA’s Burdick and Ashton presented their case, reminiscent of Grand Inquisitors whose renunciations are based more on an ideology of guilt rather than the Rule of Law, may have sufficiently undermined their own efforts with the jury.  During the trial, the dysfunction of the Anthony family became embarrassingly apparent as Casey’s parents testified first for the prosecution and then for the defense and left the courtroom immediately upon reading of the verdict.

In a nutshell, no cause of death was ever presented.  The skeleton of Anthony’s daughter provided no information to scientists as to how she died, therefore, there was no proof that a murder had been committed.   Other prosecutorial  ‘evidence’ such as Casey borrowing a neighbor’s shovel, a rank smell from the back of her ten year old car which was later traced to a full trash bag,  home computer searches for chlorophyll or chloroform were insubstantial as were allegations that Anthony’s lies were indicative of guilt.  During the entire 33 day trial, the prosecutor’s failed to produce any statements or evidence that Casey was a ‘bad’ or neglectful mother. Yet the prosecutors’ who had a ‘burden of proof beyond a reasonable doubt’ only assertion as to motive was Anthony’s desire to ‘party’. 

For anyone who followed the trial and did not rely on inflammatory media stories, it was clear that the prosecution was failing in its burden. Thankfully, despite overwhelming media, political and legal assassination of an obviously troubled young woman,  none of the DA’s narrow and erroneous presumptive ‘proof’ held up to the scrutiny of Anthony’s jury.  How the legal community will address the bias of media-attorney 'experts' who publicly convicted Anthony prior to closing arguments remains to be seen.   

Casey’s defense attorney Jose Baez, who made a magnificent closing statement, presented the jury with the option of an accidental drowning citing Anthony’s extreme fear of her mother’s reaction and that the prosecutors never bothered to research the possibility.     

Based on my years in the criminal justice system (on the defense side) and the inappropriate choice of a death sentence penalty in this case, the national concern for prosecutorial misconduct by prosecutors who arbitrarily control exculpatory information will continue to grow.

After being cleared of all three major murder charges, Anthony, who has already served three years,  was sentenced to four years for misdemeanor lying to law enforcement and will serve the difference between time-served..

Sunday, July 3, 2011

Is the IMF Dictating an Austerity Economy on the American People?

In the aftermath of the Great Depression, the International Monetary Fund was established at the 1944 Bretton Woods meeting as a public institution with taxpayer money.  The Fund's  “primary purpose,” according to its website, “is to ensure the stability of the international monetary system, promote sustainable economic growth, increased living standards and reduced poverty.”  

If the IMF was held accountable as a public agency, its goals would be failing in all areas.  The Fund is governed by a 24 member Board of Directors and interacts with an appointed Governor from each of its 187 member countries.  Secretary of the Treasury Tim Geithner is the U.S. Governor with Fed Chair Ben Bernanke serving as vice-Governor.  With a staff of 2,500 headquartered in Washington, DC, the IMF meets twice a year behind closed doors and generates no public minutes of its meetings. With no oversight mechanism, the IMF is not responsible to any government.

Unbeknownst to its taxpayer, the United States, by virtue of being the Fund’s largest‘contributor (in excess of $80 billion  tax  dollars) receives 17% of a weighted vote and retains the sole veto on the Board.  (European Union countries hold 32% of the vote.)   In other words, the country with the greatest financial contribution and once the world’s largest economy (now second to China) has the most prestigious position with the ability to dictate global economic policy – and we know how well that has worked out.        

Given its prominent role, the United States continues to dominate IMF policy despite its own economic problems which, we can only surmise, has caused more than a little consternation among the Fund’s membership, many of which have suffered under unreasonable demands and onerous financial conditions that did nothing to lift its citizens out of degradation. Some might see a karmic payback here as the US becomes a victim of its own creation.

The irony has apparently escaped the mainstream media that the US, which is responsible for unnecessarily tight IMF monetary policy while preaching outdated supply-side economic policies to fragile, fiscally struggling nations, has suddenly found itself in a similar pickle as many countries who suffered previously from US economic and political pressure. It is worth noting that the US Treasury Department has pushed fiscal austerity, privatization and deregulation (aka market liberalization) as IMF pillars for developing countries while the US, in disregard for practicing what it preaches elsewhere, continued to live well beyond its means at home.  While IMF funds are available to bail out multinational banks, third world developing countries have found that demands to repay their debt is IMF's first priority while funds for education, health care or other public services may arrive too little-too late.       

Well known for arbitrary rules based on a free market ideology that punished  economically vulnerable countries which the IMF determined to be living beyond its means (not unlike US fiscal excesses during the Bush decade and beyond), the IMF uses a one-cookie-cutter approach with no recognition of each country’s individual cultural, political or economic diversity and has only served to intensify financial disasters around the world as it did for Thailand and Indonesia in 1997, Argentina in 2001 and more recently, exacerbation of economic downturns in Ireland and Greece.  Nor is there any empirical evidence that IMF austerity policies have improve a country's economic health - and instead have actually accomplished the reverse.

Joseph Stiglitz, author of “Globalization and its Discontents” and former senior vice president and chief economist of the World Bank has been critical of IMF’s unfulfilled promise of  ‘unprecedented prosperity’ which he saw as more concerned with opening new markets for Western financial institutions  

On June 29th , the US Senate voted 55 - 44 (S 679) to allow a special $100 Billion US line of credit to the IMF to help stabilize the global economy joining 90 other member nations in an IMF rescue effort.  Sen. Tester of Montana voted with Republicans against while Republican Senators Brown (Mass), Cochran (Miss), Kirk (Ill) and Lugar (Ind) joined Democrats to approve the line of credit.     

On June 20, 2011, IMF staff issued its annual Article IV Report on the current US financial situation.  Article IV consultations ensure that each country is adhering to its Articles of Agreement yet is considered a minor
'surveillance' tool as it provides the IMF with an opportunity, according to Stiglitz, to push its agenda on developing countries not dependent on IMF's financial aid.  The US-IMF relationship raises reasonable questions regarding the US obligation to IMF policies:

            As President Obama and the Congress are proposing cuts to the country's social safety net, is the IMF dictating an Austerity Economy on the United States?  If so, what are the conditions?
            What authority does the IMF have regarding the US on-going economic crisis and its  current deficit debate?

            What are the implications for the US given IMF policy that a country with low inflation but no growth and high unemployment qualifies as a disastrous macroeconomic situation?
              What are the implications if the US refuses to follow IMF dictates as Egypt did on June 30th as a result of public debate, when that country turned down loans that went ‘against the principles of national sovereignity.”  Egypt cited its earlier experiences with IMF requiring privatization of its banks and cuts to food, energy and health care subsidies. 

            Given historic US dominance of the IMF, is the IMF currently undercutting the American people by virtue of its own IMF Governor?    

            When, if and how does US IMF Governor Geithner present a public report including a record of his votes and discussions at Board meetings?

For some answers to those questions (and sure to raise more), check out the following documents:

IMF Press Conference - June 29, 2011

 "Tepid US Recovery Poses Challenge for Policy Balance"  6-29-2011

 IMF Statement on Article IV Consultations,  June 20, 2011


Friday, July 1, 2011

Quotes of the Month

“One day, I hope in the next ten years, I trust that we will have more Christian day schools than there are public schools.  I hope I will live to see the day when as in the early days of our country, we won’t have any public schools.  The church will have taken them over again and Christians will be running them.  What a happy day that will be!”   
Rev. Jerry Falwell

“I really believe that if it came to a vote whether to go to war with England, France and Germany combined or raise the tax rate on incomes over $100,000, the Republicans would vote for war.”   
Will Rogers

Publicly Owned Banks Offer State Deficit Solution

As the Federal government continues to fumble its own foundering fiscal recovery, the bitter truth is that the majority of fifty States, suffering severe budget deficits brought on by an incompetent Congress and a rapacious financial services industry, are out on a limb by themselves.  

Scrambling to protect their own State assets, the budget crisis has provided the  Republican party with the political cover to target public employee pensions and unions as they attack the foundations of civil government.  Faced with extreme budget cuts that threaten essential People Programs and jeopardize fiscal stability, States desperate enough to look ‘outside the box’ will find that a credible solution to their fiscal problems lie within the borders of the little-appreciated State of North Dakota.   .      

It is worth repeating that the 2008 Federal deficit of $410 Billion grew to its current $14 trillion level because of the on-going recession and a massive drop in revenues and that the States, which rely on Federal dollars to support social programs and infrastructure costs, are not the cause of the current  Federal deficit.  The never-ending foreclosure crisis, another double-dip drop in housing value and the Treasury Department’s freeze on securities that directly benefit local and State governments all continue to drag on the State’s ability to pay on their $175 billion budget gap and exacerbate their ability to reinvest in essential services and long term infrastructure projects.   As a consequence of the States’ precarious fiscal situation, a municipal bond crisis is quietly simmering on the backburner.   

In today’s vituperous budget-cutting climate, it is rarely mentioned that a $5 billion interest payment, added to the $14 Trillion deficit each day, is threatening to further erode the country’s economy.  The non-partisan number crunchers at the Congressional Budget Office estimate that the U.S. debt will reach $20 trillion by 2015 with an unsustainable interest payment of $600 billion annually.  Even adopting the entire list of onerous recommendations from Obama’s Deficit Commission, it would appear that the mathematical odds of paying off the Federal principal are extremely remote, if not downright impossible.  The reality that an hopelessly ineffectual Congress and Federal government will budget-cut their way out of this self-created mess is a gross fiction and they know it.

In December, opponents of President Obama’s continuation of Bush tax cuts for the wealthiest 2% of Americans at a cost of $900 billion (the same amount of U.S. debt held by China), predicted dire consequences and those chickens have now come home to roost.  The American public continues to be led to believe that a few billion cut here and a few billion cut there will sufficiently save the country from the clutches of the International Monetary Fund or the World Bank or whoever it is who has us by the throat.  

As the same politicians whose negligence assisted the 2008 economic meltdown continue to wring their hands over the coming austerity; the President’s proposed cuts to the country’s social safety net and the Deficit Commission’s pontifications all avoid the reality that no proposal comes close to paying the interest on the debt, much less putting a significant dent in the $14 T deficit.     

Average Americans who struggle with their own credit card debt understand the frustration of never getting ahead of usury interest payments but for all of President Obama’s carefully scripted town meetings and orational skills, conducting an honest hard-reality, sit-down Oval Office conversation with the American people regarding the truth of deficit reduction is not one of his talents.  Just as Obama’s Wall Street campaign contributions, past, present and future, are no doubt a factor, the Bank of America with total assets of $2.3 trillion, paid no federal taxes in 2009.  

From the outset, the American economy has had a turbulent history suffering a long series of bank failures, bankruptcies, inflations, foreclosures, burst bubbles, recessions, depressions and Panics while, at the same time, the Federal government experienced a majority of budget surpluses from 1791 until the start of WWII.   
While most beltway politicians profess to hold our Founding Fathers in high esteem, they may be unaware that the fledgling United States government began in debt.  After the War of Independence, the country’s influential financiers understood that consolidation of the national war debt of $75 million would be fiscally advantageous.  Modeled after the rapacious Bank of England and despite considerable opposition to a  centralized private bank, the First National Bank of the United States of 1790 provided the government with enough money to pay its debt and all the government needed to do was repay the bonds - with interest.  With the need to establish credit for the new nation, Thomas Jefferson preferred that the government pay the debt directly through U.S. Treasury notes; thereby avoid costly interest payments to a private bank.       

Originally only States had the sovereign power to charter a bank and issue its own currency.  At the time, the highly successful Bank of Philadelphia used paper money to introduce certificates of indebtedness that could be cashed at any time in exchange for goods or services. Backed by actual funds to meet its capital requirements, the Philadelphia Bank did not sit on its resources and freely circulated money throughout the economy.  

In 1788 with ratification of the Constitution, Congress gave itself the power to ”coin and regulate the value of money” only to formally surrendered that authority upon establishment of the Federal Reserve Bank in 1913.    
An opponent of a centralized private bank, President Andrew Jackson issued an Executive Order transferring Federal government funds to State banks and became the only President to ever totally pay off the national debt.

Even after adopting the country’s first income tax in 1861 to finance the Civil War, the U.S. Treasury was near empty as the Lincoln Administration was faced with borrowing at exorbitant interest rates to fund the war effort.  The Congress of 1862 agreed to issue $150 million of debt-free green Treasury notes as legal tender that became known as Greenbacks.  With tax receipts insufficient to finance the war, the Greenbacks were a temporary war measure premised on a debt-free paper money system.  The bankers unsuccessfully lobbied to be designated as depositories of public funds in anticipation of high interest payments at  government expense.  The first real paper money issued by the U.S. government, Greenbacks proved surprisingly stable with $450 million in circulation immediately after the war. Soon after bankers pressured Congress to withdraw the currency from circulation, the Panic of 1873 occurred.     

Not unlike the Robber Baron breed of conscience-free business practices, today’s more emboldened banksters play the White House and Congress like a fiddle.  With a presumption of privilege and entitlement, voracious moneylenders have provided no material benefit to the lives of average Americans.  The Wall Street banks and financial industry are the major instigators for the economic turmoil that brought the country to bankruptcy that continues to plague the national economy including devastating losses to public pensions in many States.          

While huge, insurmountable systemic problems exist, there is light on the horizon.  In its early days as a Territory, North Dakota’s corrupt political system was dominated by out-of-state cartels with the railroads owning State land and paying no taxes for the privilege. With its farmers in revolt during the Progressive Era, the Non-Partisan League formed to take back control of the State’s economy from an entrenched corporate opponent with creation of the State Bank of North Dakota in 1919.

As a publicly-owned entity, the BND’s mission was to “encourage and promote agriculture, commerce and industry” and insure a dependable supply of affordable credit for its citizens.  Currently the only publicly-owned State Bank in the country, the BND has experienced its share of political challenges with smear campaigns, recall elections, being temporarily derailed from its mission and fiscal ups and downs. Ninety two years later, the BND remains a solvent, reliable institution with a current $700 million surplus.

While the sole purpose of privately-owned Wall Street banks is to lend money at interest rates that will rake in the greatest profits in the shortest amount of time, the BND is responsible to one shareholder - the People of North Dakota.  Its profits are deposited into the State’s general fund and, unlike most other States, are available to reinvest in essential services and long term infrastructure improvements as they maintain the State’s fiscal health and save millions of taxpayer dollars.  Capitalized by State assets including municipal investments which have remained solvent during the current national crisis, the State of North Dakota has had no need for tax increases or cuts to vital public services during the country’s enduring economic downturn. .  

Since 1945, more than $555 billion has been transferred to the State’s treasury with $350 million returned to State coffers in the last fifteen years.  In 2010, as the Nation remained in the grip of a foreclosure and unemployment emergency, the State Bank of North Dakota recorded a $62 million profit.   Having resisted the lure of unrealistic sub prime mortgages or an exotic derivative market, North Dakota currently has the lowest foreclosure and unemployment (3.9% in 2010) rates in the country.

Here’s where the merit of a publicly owned bank can have a direct influence on any State’s current fiscal woes.  As most States currently invest millions of tax revenue dollars with out-of-state conglomerate international Wall Street banks, the BND keeps their revenues in-house as pure profit, depositing those funds directly into the State’s General Fund.  In addition, when States borrow from those same Wall Street banks, there is no quid pro quo as the States pay considerable interest for the privilege of doing business.  As a publicly-owned bank that works in collaboration with local commercial banks, North Dakota recycles those funds back into State community projects, economic development and start-up loans for small business. With a population of 647,000 and $2.7 billion in deposits which translates into $4,000 per resident, North Dakota’s economy remains a model of fiscal responsibility with no crippling budget deficit as home values have increased 14% since 2005.  

Consider the implications of applying that $4,000 per capita deposit into a hypothetical State Bank of California with a population of 37 million that is currently paying $7 billion in annual interest payments on a $28 billion deficit.  That State Bank of California could have up to $50 billion (based on the North Dakota model) to clean up their State deficit with enough leftover to contribute to public education, public employee pensions, a fast-track train or health care for its uninsured citizens.   

Benefits of a fiscally healthy State able to meet more of its own needs would be an enormous relief to the Federal government, freeing billions of dollars dedicated to improving the American quality of life. 

The Public Banking Institute reports that the States of California, New Mexico, Maine, Oregon, Arizona, Louisiana and Washington have joined Maryland, Illinois, Virginia, Hawaii and Massachusetts with legislative initiatives to explore the feasibility of establishing their own publicly-owned banks.   .  

True fiscal conservatives concerned about a ‘bloated’ Federal government should find the State’s rights element irresistible.  The success of any future public State bank depends on adopting North Dakota’s conservative ‘stodgy bank’ model while maintaining a strict local focus and a commitment to accountability that shines its light on all public transactions.  The “buy local’ movement has a powerful ally in the Bank of North Dakota as it has shown that public banks prosper as they better understand community needs and are closer to the people.   

With the breakdown of an economic structure that has consumed the American experiment in democracy and never served the public interest, State-owned banks represent the best, most equitable solution to improve any State’s financial health, assuring its ultimate economic survival and, in turn, positively influencing the national economy.   While establishing a State-owned bank is sure to attract a vociferous response from the same financial wizards who have proven they cannot be trusted amid the usual dire warnings of imminent doom that the market will crash, that the debt will increase, that China will call-in its loans – if we are wise enough to read between the lines, it will be apparent that what is good for the American people is not the same as what’s good for the multinational conglomerate banks.   Conversion to a populist debt-free economy is an essential step towards creating a 21st century America as a new breed of visionary elected officials, dedicated to middle class values and economic justice, emerge in 2012 and beyond with State-owned public banks a central campaign theme.    

Publicly-owned banks are a win – win for everyone - except Wall Street.

John Dean on Clarence Thomas and 1991 Senate Vote to Confirm Clarence Thomas to the US Supreme Court

Nominated to the Supreme Court by President George H.W. Bush in 1991 to replace retiring Justice Thurgood Marshall, Clarence Thomas was confirmed by the U.S. Senate on a 52 – 48 vote.  Democratic Senators who voted to confirm Thomas, all of whom have since left the Senate, were:

Boren (Ok)
Breaux (La)
DeConcini (Ariz)
Dixon (Ill)
Exon (Nebraska)
Fowler (Ga)
Hollings (S.C.)
Johnston (La)
Nunn (Ga)
Robb (Va)
Shelby (Ala) who later joined the Republican party

Sen. Jim Jeffords (Vt) who was still a Republican voted against Thomas’ confirmation.

Moderate Republicans and those still in the Senate who voted to confirm Thomas included:

Chaffee (RI)
Coats (Indiana)
Cohen (Maine)
Grassley (Iowa)
Hatfield (Oregon)
Hatch (Utah)
Lugar (Indiana)
McCain (Ariz)
Simpson (Wyo)
Spector (Pa)