godot Articles

Unsustainable Inequality: Why We Need Marx to Save Madison

Thomas Magstadt — 2012-05-16T05:24:46-04:00

Marx famously said that the bourgeoisie unwittingly produces its own gravediggers. Marx was convinced that capitalism inexorably gives rise to an elite social class whose members create an economy that contains the seeds of its own destruction. The prime movers in Marx's theory of history – a.k.a., dialectical materialism – assumed the form of a rising middle class of merchants who, in Marx's time, were emerging as the industrial giants he called "monopoly capitalists". Capitalism in its advanced stages produced a few big winners and multitudes of losers, the latter constituting a vast underclass of exploited workers who were increasingly impoverished, alienated, and dehumanized.

The super-capitalists who emerge as the champions of the new economic order soon come to abhor the very system that creates them. Once ensconced at the commanding heights of the economy they naturally want to eliminate competitors. They want control. To protect their wealth, they need power. Power to minimize risks and flatten out the business cycle. They understand all to well that the power to tax is the power to destroy (or to create tax loopholes). They want the state to stay out of the economy, but protect business from "unfair" competition and encroachments of all kinds. And from the workers.

But that was then and this is now. Today, Communism and Marx are equally discredited. Right?

The failure of Communism according to Wall Street's grand princes, corporate raiders, the conservative press, the elite business-school professoriate, and a host of other apologists for Capitalism proved that Marx was wrong – about everything. But clearly Marx's critics protest too much.

In fact, the failure of Communism proved nothing of the kind. Communism as it was radically reinterpreted and applied by Lenin and Stalin in the Soviet Union used Marx as a fig leaf for a totalitarian political order that was, ironically, unsustainable because it attempted to run the economy without any reference to market forces or economic "laws". Which is not to say that Marxism offers a coherent set of prescriptions to cure all the ills of modern society – indeed, Marx himself had surprisingly little of interest to say about how to set things right.

But Marx was right in his analysis of what was wrong with capitalism and the kind of representative democracy James Madison enshrined in the Federalist Papers (especially #10). In focusing on the tendency of capitalism to reproduce the extreme inequality associated with feudalism, Marx had an insight that deserves far more attention than it has gotten in the United States, especially since it's now clear that Madison's cure for factions isn't working and that if stability and sustained growth is to be achieved in a world we can no longer hope or pretend to dominate it is necessary to adopt corrective measures implicit in Marx's trenchant critique.

Madison recognized the danger and identified its source: "the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society." His solution was to create a large republic encompassing a great variety of interests and parties.

Of course, unlike Europe, democracy in America makes room for only two viable political parties; these two parties, Republicans and Democrats are so entrenched, and the legislative process so sclerotic, that virtually nothing creative or restorative ever emerges from the U.S. Congress now – quite the opposite. And starting in the 1980s the Reagan Revolution crushed what remained of the free-wheeling, faction-friendly pluralism Madison imagined. Face it: in the USA today, the nice idea of a political order equally friendly to a diversity of interests – or even opinions – is dead.

A recent study from The Stanford Center for Poverty and Inequality* starkly demonstrates when this transformation occurred. The study produced "twenty facts about US inequality that everyone should know". Here's one telltale fact: In 1965, CEO pay in the United States was 24 times higher than the average production pay for workers. By 1977, it had risen to 35 times. It then doubled to 70 times by 1989 (that is, during the first decade of the Reagan Revolution). During the 1990s, thanks in no small part to the Republicans' Contract with America, it rose to a peak of nearly 300 times (!). Today, even after the self-induced Wall Street meltdown in the fall of 2008 it stands at roughly 185 times.

This fact alone raises the kind of questions that will either be addressed by the ruling plutocracy (the 1% who own most of the wealth, control the politicians, and often become the policy makers – think Robert Ruben, Henry Paulson and Timothy Geithner) or else it will lead – with the inevitability of Marx's dialectical laws – to the spirit of revolt we are now witnessing in Europe (notably Greece, Spain, France, and the Czech Republic). Meanwhile, Washington has seen fit to bail out Wall Street but not to change the rules, regulate the banks, place any curbs on CEO pay, or even tax capital gains at the same rate earned income is taxed.

If we are going to restore the Madisonian idea of a decent commercial republic in this country, one which is sustainable and morally defensible, the plutocrats and the conservative commentariat that serves them so obsequiously will have to do something they find extremely distasteful. They will have to admit that in order for the system to endure, much less prosper, Madison's cure needs a strong dose of the medicine implicit in Marx's analysis.

*Online at http://www.stanford.edu/group/scspi/cgi-bin/facts.php.

Romney, Unzipped & Exposed As Babbitt Clone

Robert S. Becker — 2012-05-15T05:13:18-04:00

Enough with that down-home, baseball glove moniker for Willard. Let’s identify Mitt the unfit with his most compelling doppelganger, that paragon of phoniness so fully satirized by Sinclair Lewis he's America's icon for narrow-mindedness: Babbitt. Indeed, tainted Babbitry today rules the GOP, uniting materialistic complacency with unthinking conformity – ever fostered by the God of Progress and sponsored by rabid, small-minded Boosterism. Thus, today's self-righteous spawn: deluded American Exceptionalism.

Now that full public glare unzips what remains of Romney’s sanitized image, what emerges is a most disagreeable huckster, a Babbitt on steroids. Romney creeps us out because he’s so much richer and more predatory, yet still the calculating striver, oblivious to others, rushing to conform to the latest and lowest rightwing denominator. Exchange bank accounts and Protestant denominations, brother Romney tops Babbitt for hypocrisy and presumption, for the latter only idly dreamed of becoming a governor.

Devotee to Romney’s campaign slogan, “Believe in America,” Lewis’ smug Zenith booster insists a hard-nosed businessman should run the federal government, like an efficient, unyielding machine. That echoes the most infamous paean to 1920’s capitalism from President Calvin Coolidge, the “chief business of the American people is business.” Nor would Babbitt nor Romney challenge this other, transcendent Coolidgism, “The man who builds a factory builds a temple. The man who works there worships there.” Yes, the religion of business, and vice versa.

Manipulators, not Makers

Does not Romney the unfeeling, buffoonish vulgarian exemplify Lewis' introduction to Babbitt, as middle-aged, middle-brow, mid-westerner who “made nothing in particular, neither butter nor shoes nor poetry, but he was nimble in the calling of selling houses for more than people could afford to pay”? The protean Romney pitchman is just as meretricious, proving again America still blesses greed and conformity, anointing today's “severe conservative” despite the glaring contradictions with years of past centrism. Is not Romney the zenith of modern campaign pandering? Does not his political exploitation augment his exploitative Bain rampage, likewise profiting not by “making things” but manipulating people, pensions, loopholes and assets.

Aptly enough, Romney is ever behind the times, a 1950’s throwback whose formidable hustle is inventing the most plausible, whitest candidate against a minority, still implausible president. In fact, this born-again zealot transcends Babbitt as a far nimbler, more audacious con man, pitching a fistful of business and tax subsidies we can’t possibly “afford to pay.” Babbitt just cheated his neighbors and practiced small-time vulture capitalism; Romney won the sweepstakes and his shadow looms larger.

Boosterism Brethren

Look how “Babbitt” synonyms snugly fit Romney: philistine, boor, bounder, conformist, low-brow, nouveau riche, square, upstart, vulgarian, and yes man. Both follow a ruthlessly greedy creed: let the sucker beware. The essential link appears willful ignorance of inner needs, thus you hear cant, not sympathy for the pain and suffering of others. That way lies abusing pets on car racks, bullying and assaulting a gay-seeming fellow student, or maliciously bragging about firing people.

For Babbitt and Romney, the highest values are status, leverage, and financial gain, thus why bother to figure out who you are. Then, you’d have to worry about consistency or authenticity of character. Unlike Obama, whose two books probe a complex, conflicted past, here are two characters (along with dullards like W.) who scoff at internal voyaging or therapy as modern psychobabble – all unfit for True, Pioneering Yankee Heroes who unflinchingly “get things done.”

Beyond knee-jerk extremism, what makes Romney especially sinister is how seamlessly he merges the worst qualities of the super-wealthy Plutocrat Right with the glorification of mediocrity and surface mercantilism that is Babbittry. In contrast, right off W. was crude, unlearned and inarticulate, and eventually everyone saw his vacancy and nastiness. Romney is slicker than an oil spill, and nothing much sticks because he trivializes gaffes and writes off indiscretions with that foolish smile.

Likewise, unlike JFK or FDR, who acknowledged great family wealth, or Bush I (detached, upper-cruster), Romney wants to be admired as world-class vulture capitalist plus be one of the boys, the self-satisfied Rotarian laughing off “mere pranks” as “hijinks.” Romney’s high school call to arms, when corralling his posse to abuse the newly-blond-haired victim, would fit Babbitt morality to a tee: "He can't look like that. That's wrong. Just look at him!"

Behavior is Character

Character, when all is said and done, is a patterned series of high and low points by which good balances bad in a rough mix. Thus, why now trust an established liar like Romney on yesterday or yesteryear, whether five or fifty years? Why not judge everyone not only by intentions but consequences, intended and unintended? Even when fraudulently apologizing, Romney distorts, conceding he “might have gone too far” but denies recall of any hair-abuse details. Instead, and worse still, he follows up with this laugher: “I certainly don’t believe that I thought the fellow was homosexual. That was the furthest thing from our minds back in the 1960s.” Note blatant indirection: “I certainly don’t believe that I thought” or that was the “furthest thing from our minds.” As if “minds,” not emotion rule merciless bullying.

Right, anti-gay feeling only started last month, maybe last year, hardly noticeable (to rich, spoiled kids) in the ‘60’s. “Since no one even thought about homosexuality then, see, I can't be guilty of homophobia.” How many of us vaguely normal people would blank out orchestrating, then executing a violent group attack on a fellow student wailing for mercy? Who but a psychopath then compounds the crime with a manifestly untrue dodge? Finally, who but a low-life offers wholesale, thus meaningless apologies for any and all incidents beyond recall: “back in high school, I did some dumb things, and if anybody was hurt by that or offended, obviously I apologize for that.” “Obviously.” Why only then? Geez Louise, this guy, not yet nominated, is already a certifiable menace.

And were Romney to gain the White House, then disgrace himself, wouldn’t we hear the same vacant non-apology apology? "If anything I did offended anyone, at any time, for any reason," then “obviously I apologize.” Famously, W. never apologized, never reconsidered, barely erred. Just as bad, Romney apologizes constantly, thus seeming more unscrupulous every time. So far, Romney is a figure of ridicule (and self-ridicule) but that changes if and when he takes an electoral lead by spending millions to offset his (completely justified) 31% likeability dilemma.

In short, a President Romney could well surpass W. in failed policies plus make unpredictable, unthinkable lurches. After all, Bush had veterans Karl Rove, Don Rumsfeld and Dick Cheney to save him from perdition? That worked out well. Who’s the adult in the Romney camp, certainly not the Ann Romney talking doll dreaming of an unzipped Mitt? Where’s any recognizable grown-up stalwart with Romney's ear, maybe his addled brain, strong enough to restrain a centerless president from careening out of control? Inquiring minds want to know – and earlier than the last Babbitt in power.

Unemployment: Why.

Alan Grayson — 2012-05-14T09:02:21-04:00

I recently happened to be at an event where billionaire George Soros was being interviewed. The right wing hates Soros because he is: (a) liberal, (b) rich, and (c) fearless. [I could also make a case that they hate Soros because he is (d) Jewish, but I leave that up to you.]

Soros said a lot of things, but he said two sentences that I wish that everyone could hear. This is what he said:

"You can't cut your way out of a recession. You have to grow your way out of a recession."

The simple truth in those nineteen words seems to have eluded our policymakers, both Democratic and Republican, for the past four years. Here is a chart that proves it:

https://grayson.salsalabs.com/o/30019/images/PercentJobLossesPostWWIIRecessions.jpg

The chart has been featured regularly at Daily Kos, but it comes from the (http://www.calculatedriskblog.com/)Calculated Risk Blog. It graphs job losses during and following each post-WWII recession, month by month, as a percentage of total employment.

As you can see, the job losses in America since 2008 are not only the worst in postwar history, but also feature the weakest "recovery." In every single other recession, employment returned to peak levels in less than four years. (In fact, leaving aside the Bush Recession of 2001, employment returned to peak levels in less than three years.) Yet here we are, four years after the Great Recession started, still almost four percentage points under peak employment.

Which is five million jobs. Five million people who can’t find work. Five million people with no income.

So, as Soros and I might ask on Passover, "why is this recession different from all other recessions?" There is a simple answer: the austerity fetish. The bizarre notion that cutting is healing.

The (http://blogs.wsj.com/economics/2012/05/08/unemployment-rate-without-government-cuts-7-1/)Wall Street Journal recently confessed that without local government layoffs – police officers, firefighters, teachers and others – unemployment would be a full percentage point lower. I think that that’s an underestimate. If those police officers and firefighters and teachers still had jobs, we would be safer, and our children smarter. But beyond that, as those public employees spent their earnings, a lot of carpenters and waiters and real estate agents and cashiers would be able to get back to work.

And we have no one to blame but the cut-cut-cut policymakers, in whichever party. As Nobel Prize-winning economist Paul Krugman (http://www.nytimes.com/2012/04/29/magazine/chairman-bernanke-should-listen-to-professor-bernanke.html?pagewanted=all)put it three weeks ago:

Consider, if you will, the current state of our nation. Despite hints of economic progress, we’re still in the midst of an immense disaster, in which unemployment and underemployment are devastating millions of American lives. And none of this need be happening! There has been no plague of locusts; we have not lost our technological know-how. Americans should be richer, not poorer, than they were five years ago. Yet economic policy across the board has become almost passive, has essentially accepted this disaster instead of trying to end it.

Soros and Krugman are right. It’s time to end this man-made economic disaster. It’s time to stop slashing our own economic wrists. It’s time for jobs.

Courage,

Alan Grayson

The Road to Solaria

Ralph Johnson — 2012-05-14T08:22:34-04:00

David Brooks, in his April 23, 2012 New York Times column, titled "The Creative Monopoly," boils down America's capitalistic future into two alternatives: competitive and monopolistic. In it, he correctly argues that competition—for academic credentials, internships, and sought-after jobs, has a strong tendency to promote conformity and discourage creative risk-taking. The alternative, as exemplified by the case of PayPal founder Peter Thiel, is something Brooks calls monopoly, which is really a shorthand for the temporary exploitation, by individual entrepreneurs, of previously untapped or niche markets to which competition will only arrive later.

Brooks goes on to explain that when they compete, individuals confine their efforts to a predefined set of actions designed to achieve goals that are also predefined, and that what determines success isn't how creative or innovative the individual is, but merely how well she executes the predefined steps in competition with others pursuing the same pre-existing goals:

"...they move into a ranking system in which the most competitive college, program and employment opportunity is deemed to be the best. There is a status funnel pointing to the most competitive colleges and banks and companies, regardless of their appropriateness.
Then they move into businesses in which the main point is to beat the competition, in which the competitive juices take control and gradually obliterate other goals."

Peter Thiel has a problem with this approach, as related in Brooks's column:

"In fact, Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too."

There's an uncomfortable inference here, amplified by the way Brooks concludes his column:

"Everybody worries about American competitiveness. That may be the wrong problem. The future of the country will probably be determined by how well Americans can succeed at being monopolists."

Nowhere in Brooks' column does he ever utter the dreaded “C” word, “community.” There is no mention made of anything good happening as a result of people working together. It's all about the best way for individuals to capitalize on their talents, and how to make the biggest profits in the shortest time--and this is lauded as the only method of “creating value” for the society at large. You either compete or monopolize—one or the other—but joining with other people, working together, collaboration, cooperation—none of these are even considered as an option worthy of discussion.

Our political discourse is already largely dominated by self-serving Tea Party individualists, who loudly denounce (as recently happened in Indiana) any politician, no matter how conservative, who dares to work together with fellow citizens to create forward progress. “Com”-promise, “com”-unity, “com”mon goals...you might as well just lump them all together and call them “Com”-munism. Anything involving compromise is suspect, any common project, any community goal, any community effort—if it's done by a group, and in pursuit of anything other than private profit, it's “un-American.”

And when, even if only by omission, Mr. Brooks denigrates the validity of group effort, his words have the effect of vindicating ultra-libertarian ardor for a society of self-sufficient hermits, so obsessed with “freedom and liberty” as to prefer isolation and avoidance to interaction and cooperation.

Isaac Asimov, in his novel “Foundation 7: Earth,” created a future in which Earth (rendered uninhabitable by a nuclear war, thousands of years in the future's “past”) is abandoned, the human race migrates to other worlds, and evolves along several disparate paths. One of these paths leads to a planet called Solaria, inhabited entirely by human-descended hermaphrodites who live alone, reproduce unassisted, and control their individual domains absolutely. One such being explains, to a group of explorers who land there:

"...you do not know what freedom is. You have never lived but in swarms, and you know no way of life but to be constantly forced, in even the smallest things, to bend your wills to those of others or, which is equally vile, to spend your days struggling to force others to bend their wills to yours. Where is any possible freedom there? Freedom is nothing if it is not to live as you wish! Exactly as you wish!"

The fictional Solaria has a population of 1200. When one of the explorers exclaims, “Only twelve hundred on your entire world?” The Solarian replies:

"Fully twelve hundred. You count in numbers again, while we count in quality. -Nor do you understand freedom. If one other Solarian exists to dispute my absolute mastery over any part of my land, over any robot or living thing or object, my freedom is limited. Since other Solarians exist, the limitation on freedom must be removed as far as possible by separating them all to the point where contact is virtually nonexistent. Solaria will hold twelve hundred Solarians under conditions approaching the ideal. Add more, and liberty will be palpably limited so that the result will be unendurable."

Mr. Brooks certainly isn't suggesting an evolution this radical, but by ignoring and thus discounting, as he does, the validity of community, he serves to amplify the Tea Party's “I've got mine, go screw yourself” mind-set. As Mr Asimov illustrates, the Tea Party's ardently libertarian ethos would eventually, if carried out to its extreme, lead toward isolation, a paranoid revulsion toward anything or anyone “other,” and a Darwinist sensibility which, by weeding out all but the 100% self-sufficient, would eventually lead to “Tea Party Utopia”--a sparsely populated land in where inhabitants would be fewer, much further between, protected by some form of impenetrable defense system, and unencumbered by any messy, inconvenient social obligations.

Absent the option of relocation to an empty planet like Solaria, we (the Tea Party included) are pretty much stuck with each other. And if we're going to continue to value human life as an inalienable right, there are some problems that simply can't be resolved by “Hunger Games” competition, or “Pet Rock” monopolism. They require a community, whether like-minded or not, and everybody within that community must compromise.

A Time of Scapegoats or Solutions

Don Washington — 2012-05-14T06:59:31-04:00

America is a country that is always at war with itself. We live at the point where what it claims to be clashes with the hard-cold reality of what it actually is. The claim that we are the land of the free has never been true for every soul under the Stars and Stripes. In fact every “freedom” we enjoy was won with someone’s blood and taken from those in power not given by our Constitution or won on some distant shore in some foreign war. We must clearly face that we live in a time of scapegoats or solutions.

America has always been a place with the rich and the rest of us. Know that the collapse of every society can be measured by the distance between those that have more than enough and those that have not at all. The greater said inequality the weaker society becomes. A weak society cannot respond with obvious solutions to its problems so instead it seeks vulnerable scapegoats to sacrifice to its failings. As Jay Gould said, he could pay half the working class to kill the other half. That is what it is like to live in a time of scapegoats or solutions.

America’s search for scapegoats is a history lined with racism, violence, lies and xenophobia. Working people, black people and immigrants slaved for 12 to 16 hours a day for pennies and lived in squalor as they died in the tens of thousands on the job before being made into scapegoats. As scapegoats immigrants, working people and blacks were regarded as sub-human and even disease carriers. They were called terrorist-communist-sympathizers for standing up for their rights. In some cases job stealing foreigners when they were brought here to fill low wage jobs and to depress the wages of native American workers. They were called anti-American and sometimes socialists, without any regard for the terms when they wanted democracy in their work places.

If it sounds familiar it should. Some were called Catholic when it carried the same weight to wound one’s life chances that Muslim carries now. If you have heard this before then you know in a time of scapegoats or solutions scapegoats cost less and blood is cheaper than money when it’s not your blood being shed. Liberals, activists, women, organizers and people who believed in human, civil, labor or women’s rights were beaten, arrested, shot down by state militias for peaceably assembling and putting those beliefs on paper.

This is because that's what happens to scapegoats. In all cases they were persecuted and even murdered to the applause of the “free press” when they were not being ignored or maligned by it. After all it was that same “free press” that labeled them dangerous, anarchist terrorists, free loving, shiftless slackers, class warriors, and atheists. All of these people were accused of trying to tear down democracy for demanding it live up to one of its principles… fairness. If you can hear an echo in today's coverage of unions and Occupy Wall Street and any critique of corporate power you should because it is shouting at you. That is what it means to live in a time of scapegoats and solutions.

We know that a society is held together by empathy, compassion and connection not some social Darwinist worship of markets and competition. When its guardians; politicians, policemen, academics, lawyers, doctors, engineers, teachers, poets, soldiers and scientists stop being advocates of the common good and become disciples of economic expediency those without means become scapegoats for a society incapable of solutions.

When they have no solutions they make us scapegoats so that they can savage us with a militarized police force. Military grade weapons and measures on peaceful citizens because we who are scapegoats are a danger to their legitimacy every second we refuse to wear the label and speak truth to power. But label us and scapegoat us is what those who have stolen so much wealth from all of us do. We are the lazy, welfare-stealing blacks, the illegals who took your job; the gays with their agenda; women who cannot mind their God-given place, liberals who seek social justice and to redistribute wealth and Muslims with their Sharia Law and terrorist religion all must be watched and warded and possibly punished.They respond with the closed fist, the baton, tear gas, pepper spray, nets, surveillance and maybe soon indefinite detention because force is the face of public policy when the public it serves the tiny few not the working many. That is what it means to live in a time of scapegoats or solutions.

Scapegoats are the easy explanation for both economic uncertainty and the certainty of helplessness and despair. When the gulf between the unbelievably wealthy and the unbearably poverty stricken is large enough everyone knows that only solution is to restore the social contract. They, who have built a system to extract vast amounts of wealth from society, must return to it what in many cases they have stolen from it... from us. They must return the wealth because thirty years of impunity and inequality demand expensive and immediate solutions that everyone knows we need.

We scapegoats know it most keenly of all as we are the canaries in a closing and dying democracy’s mines and we will not fade without fighting for solutions. Still there is a place on the continuum… the fulcrum point of a nation’s soul before it rockets down the path of Imperial Rome or Nazi Germany and we are in that place now. In that place where our collective conscience stands up and provides an ethical, principled reminder that for a society to work it needs solutions not scapegoats.

We know there should be a single-payer, national health insurance plan because private healthcare insurance, like the slave trade before it, is a market that should not exist in a just society. We know that twenty percent of America’s children should not live in poverty because that is a blasphemy. We know that the government tax policies, like a corporation paying a quarter in taxes for every dollar a living human pays, must be changed to stop redistributing wealth upward and start restoring it to the society that makes wealth creation possible.

We know the fact that students have taken over a trillion dollars in loans from the same financial entities that are stealing their parent’s homes via fraud is a crime against accountability. We are clear on the fact that no one has paid for this financial corruption is a sin against the notion of the rule of law. We know that the fact that not one person has gone to jail for transforming us into a torture state while whistle blowers who reveal such malfeaseance are prosecuted and imprisoned without charge for years before trial belittles the concept of legitimacy.

We understand that the fact we continue to lose civil rights a decade after 9/11, via the NDAA, ignoring the FISA Court, the PATRIOT ACT, the MCA and repeated attempts to chill speech on the internet in the name of security is unconscionable. We the scapegoats are shouting for solutions. But as bad as things are they have never been better. This time we know that racism, sexism, religious and sexual intolerance and all the rest are just tools to divide us. This time we remember how they shot down the Black Panthers and sent agent provocateurs into our organizations to disorganize and destroy us. This time we know we’re being monitored, spied upon and that it is a prologue to possibly something far worse.

But we’ve faced these odds before. We faced them at Homestead, Pettis Bridge, Kent State, Selma, Everett, Orangeburg, Wounded Knee, Ludlow, Greensboro and Haymarket and we’ll stand up and face them again and we won. I know we won because there’s a weekend and Social Security and racism and sexism are things we fight over instead of just agreeing on. We live in a time of scapegoats and solutions and that’s what no one ever tells you about democracy… that such is always the case and as a scapegoat I will fight for solutions… like we scapegoats always do.

Don Washington is an AP-Award winning writer, political expediter and problem-solver, proprietor of the agitational, informational, interactive website and show the Mayoraltutorial.com. You can follow him as drobsidian on Twitter where he is not afraid of ninja, thinks Godzilla is every bit as plausible as Santa Claus and is the keeper of one large and brilliant cat.

Who Were They?

John Briggs — 2012-05-14T02:42:39-04:00

The ECHO Lake Aquarium and Science Center in Burlington, Vermont, in partnership with the University of Vermont College of Medicine,can't demonstrate that the plastinated Chinese bodies it is exhibiting ever consented to be part of such a commercial display. A doctor associated with the show said the bodies are those of Chinese prisoners. This article by John Briggs was published in the Burlington Free Press May 13, 2012.

Read more:

Link http://www.burlingtonfreepress.com/interactive/article/20120513/NEWS02/305130003/Who-were-they-

article text:

The “plastinated” human bodies on display this spring and summer at Burlington’s ECHO Lake Aquarium and Science Center have drawn crowds wherever they’ve been exhibited, and ECHO officials hope for the same result in Burlington.

The origins of the bodies, however, are shrouded in a degree of uncertainty in a trail of paperwork leading all the way to China, numerous interviews and a review of documents show. In recent interviews, ECHO officials could not provide clear evidence that consent was ever given by the individuals on display, and the man listed as the show’s medical consultant says that certainly was not the case.

Nonetheless, ECHO’s leaders said they were satisfied with the level of documentation about the source of the bodies, which are of indeterminate age and are not identified by name.

ECHO, partnering with the University of Vermont’s College of Medicine for the five-month show, has relied on a statement from the Chinese supplier of the bodies that asserts the individuals are not “executed prisoners.” This statement quotes Chinese practice for body donations, which states donors or their families “are clearly told” the bodies will be used “for medical research and educational purposes.” The statement does not indicate whether the individuals in the show had the ability to withhold their consent.

ECHO is the premier family-oriented science center in the state and region, operating in a building that bears the name of Vermont’s senior U.S. senator, Patrick Leahy. ECHO Executive Director Phelan Fretz told the Burlington Free Press that the human bodies on display offer “an extraordinary experience” to visitors and notes that the exhibition is soberly educational in tone. The ECHO show does not tell visitors to the show where the individuals lived, how they died, or how they came to be placed on exhibit.

ECHO and its board are “satisfied” that the partially dissected individuals were acquired legally, Fretz said. And, he said, “Everything we know is that informed consent was given.”

The Our Body and similar shows have been banned or faced restrictions over the consent issue in some jurisdictions including Hawaii and Seattle. New York state a few years ago, under the leadership of then-Attorney General Andrew Cuomo, forced a financial settlement with one exhibition company because clear consent to display the bodies did not exist.

That issue was raised locally by Tsering Yangkyi Cummings, who is originally from Tibet. She wrote the Burlington Free Press of her concerns shortly after the April 14 opening of the show, following a front-page article that did not raise the issue of consent.

Cummings said she and her husband, Chris, saw a similar show a few years ago in Montreal and subsequently heard allegations – often discussed in media reports of recent years — that those being displayed were political prisoners. “It is disappointing that ECHO failed to do their homework and fully disclose the origin of the bodies,” the couple said in an email to the Burlington Free Press. “By having this display, ECHO (even blindly/unknowingly) takes a stand in support of the Chinese government and its ill practices towards human freedoms.”

FreePressMedia, which publishes the Burlington Free Press, partners with ECHO and is a media sponsor of the show.

When the Free Press first asked ECHO who the individuals on display are and whether they consented to be part of a commercial exhibition, ECHO described the documentation it had scrutinized as “confidential.”

In a subsequent interview, the person listed by the ECHO show’s marketing company as its medical consultant, Dr. Walter Hofman of Pennsylvania, told the Burlington Free Press he’d concluded after examining the bodies and the documentation in 2007 that the consent of the individuals to be displayed was unnecessary, because they are under “the aegis” of the Chinese government. The individuals died in Chinese prisons or other institutions, he said he’s concluded.

At that point, ECHO provided copies of the documentation on which it relied as the show was being put together over a period of two years.

A cadaver cut into cross-sections is displayed at the new exhibit: Our Body, The Universe Within, at the Echo Lake Aquarium and Science Center in Burlington on Friday April 13, 2012. / EMILY McMANAMY, Free Press

‘No consent forms’

Asked whether ECHO had evidence that contradicted Hofman’s assertion and whether his contention that they could have been prisoners was a concern, ECHO’s Fretz responded in writing, “All the materials we received from Dr. Hofman and the ASTF indicate the specimens were secured legally and appropriately.... Nothing we have received from Dr. Hofman, or the exhibit company, indicated the specimens were prisoners.”

ECHO spokeswoman Gerianne Smart said ECHO has not spoken directly with Hofman.

While Fretz said ECHO believes consent was given, Smart acknowledged that the science center has no direct evidence that is true.

“We saw no consent forms,” she said. “The (statement) said informed consent was given for medical research and exhibition. I was assuming this was legitimate.”

“Certainly,” Smart said when asked if ECHO had been aware before opening the show of ethical questions raised elsewhere. “We believe the specimens were acquired through appropriate legal means. We went with that. We had to go with what we had.”

The UVM College of Medicine, which has provided medical specialists for Thursday night lectures on the bodies and parts in the show, said in a statement it has “seen no evidence” that the bodies in the show were obtained improperly.

Frederick Morin, dean of the College of Medicine, in response to further questions from the Burlington Free Press, said, “All the evidence we have seen indicates that the anatomical specimens in Our Body were acquired legally and appropriately, even by Vermont standards, and we have seen no evidence to the contrary.”

“Human bodies,” Morin said, “deserve to be treated with dignity and respect.”

ECHO’s Smart said the College of Medicine was provided the same documentation that Studio 2 gave ECHO.

ECHO Executive Director Fretz’s responses paralleled those of other institutions that have mounted the show and were interviewed by the Free Press. He said that beyond the documentation provided by the company that provided the bodies, ECHO vetted the exhibition by speaking with “sister organizations concerning the extraordinary experience it provided their guests.” ECHO and ECHO’s board, he said, were impressed with the “quality (and) non-sensational presentation” of the bodies by the vendor, the Minnesota-based company Studio 2 Productions.

Studio 2 will receive a substantial portion of the gate receipts from the show, Fretz said.

Heidi Pinchal, the spokeswoman for Studio 2, described the documentation on the source of the bodies as confidential. She said ECHO had been provided with evidence that Studio 2 “had a clean provenance on the bodies.” They were “donated for purposes of medical education.” The documentation, she said, “is confidential information that we allow each institution to vet.”

Tracking the documentation

The complete documentation Studio 2 provided ECHO is contained in two records:

An affidavit marked “confidential” on the stationery of The Universe Within Touring Co., based in Boca Raton, Fla., prepared in August 2007 by Hofman, the show’s medical consultant. He is currently the coroner and medical examiner for Montgomery County, Pennsylvania, located just outside of Philadelphia.

Hofman said in the affidavit he examined all of the bodies then on display with the Our Body show at the New Detroit Science Center (since closed for financial reasons) and the Orlando Science Center. “At no time did I see any evidence of any trauma or physical abuse associated with torture or execution.” he said in the affidavit.

The document continued: “It is my understanding that all of the anatomical specimens contained in the Our Body exhibit were obtained legally, consistent with the Laws of China and the United States.” The Hofman affidavit did not provide documentation of the legal source of the bodies or provide consent documentation for those on display.

A document, dated April 17, 2008, from the Anatomical Sciences and Technologies Foundation, Hong Kong. The statement describes the ASTF as a non-profit organization headquartered in China and affiliated with the Chinese Society for Anatomical Science in Beijing.

It says the bodies come from “various accredited Chinese universities, medical schools, medical institutions, research centers and laboratories for the goal of the ASTF.” It provides no documentation of its assertions.

The five-page document says the ASTF has “granted the Universe Within Project, Ltd., Hong Kong, the worldwide rights to present, market and exhibit an exhibition of anatomical specimens known as Our Body: The Universe Within”— the show currently at ECHO.

“The specimens, died of natural causes, are not ‘executed prisoners’ as sometimes, wrong mentioned in several medias,” the translated document states. “There was never found any evidence of trauma or bodily injury caused by torture or execution – as stated by forensic pathologists.”

The Chinese Society for Anatomical Science describes itself on its Web page as being “under the leadership of the Communist Party of China national academic organization.” Its members, the self-description says in poorly translated English, “persist in seeking truth from facts” to “promote anatomical grow” to “accelerate the realization of the socialist modernization of our country to make the contribution.”

The Society in Beijing did not respond to an email request for an explanation of its relationship with the Hong Kong foundation and for a more detailed explanation of the source of the bodies on display at ECHO.

Here’s what Hofman, who examined the bodies five years ago, said in two interviews:

Initially, he said the individuals had been prisoners in China, an assertion for which he provided no evidence. “These are bodies that are the property of the Chinese government,” he said.

In a second interview, he said some of the bodies could have come from Chinese “institutions.” In Hofman’s understanding, consent by the individuals to be displayed is a “non-issue. It has nothing to do with consent,” he said. “The individuals didn’t give permission to be used as exhibits. They are on lease.”

Hofman is listed as “medical consultant” in the $10 book produced by Studio 2 that ECHO has for sale in conjunction with the show. He said he was unaware that he was cited in that way and said he has not seen the book.

Pinchal, the Studio 2 spokeswoman, initially told the Free Press that the bodies are “on loan to us” but said later that Studio 2 has them “on a lease arrangement.” She would not discuss the lease arrangement, saying that Studio 2 “is a private organization. Their financial information,” she said, “is not available to the public.”

Cadavers on display at the new exhibit: Our Body, The Universe Within, at the Echo Lake Aquarium and Science Center in Burlington on Friday April 13, 2012. / EMILY McMANAMY, Free Press

Experiences elsewhere

Pinchal was previously the vice president for marketing of the Orlando Science Center and helped to arrange the Our Body exhibit there in 2006 — the first such exhibit under that name — according to Jeff Stanford, who currently holds the marketing position.

Pinchal subsequently began working for the company marketing the display.

Stanford said the Orlando center relied on “documents and affidavits saying the bodies were obtained legally” before mounting its “very successful” exhibit. “We did talk to peer institutions about how they had done,” he said, “and we talked to community leaders to get feedback. It went before our board of directors. There was a lot of discussion, both internally and externally.”

The exhibit, he said, doubled attendance for the year it was at the Orlando Center.

In 2010, the Our Body exhibit was featured at the Stark Center for Physical Culture and Sports at the University of Texas, Austin. In a news release in April 2010, Dr. Terry Todd, the center’s director, described it as a “stunning presentation that is central to our mission to help the public appreciate the value of exercise and healthful living practices.”

Todd told the Free Press that “UT legal” examined Studio 2’s documentation and did not raise any objections to the show. He said the Stark Center also spoke to other institutions which had hosted the show. “They all indicated they had done some checking and were satisfied,” he said.

Asked whether those on display had consented to be displayed, Todd said, “Other people spent more time examining that. No one had any problems with that. Whatever questions needed to be asked, were asked.”

The Our Body show has also appeared at the Rochester Museum and Science Center, the L.A. County Fair in Pomona, California and the Arizona State Fair, where fairgoers were cautioned that the show “does contain actual human bodies, with eyes and genitals intact.”

Human rights advocates

The origins of the bodies have proved to be of concern to human-rights advocates and others concerned about freedoms in China.

Tsering Yangkyi Cummings, the Tibetan immigrant, told the Burlington Free Press, “I would not trust any ‘certified’ body coming from China, no matter what kind of documentation they may claim to have.”

Her concerns were echoed by Harry Wu, who was imprisoned for 19 years in the Chinese “laogai,” that country’s vast forced labor program. Wu now heads the Laogai Research Foundation and Museum in Washington, D.C.

“This is not like a computer show,” Wu said of the Our Body show. “This is showing a human. Who are these people?”

Wu told the Burlington Free Press that even if Chinese law approved the display of the bodies without explicit consent, the origin of the bodies should be of concern to Americans. “They even deserve their rights,” he said of the dead persons in the display.

“What is Chinese law?” he said. “They can do whatever they can do. If the body was offered by Chinese police, I do not know where the body is from. If American want to see it, fine, but this is not like a computer. It was alive sometimes. Approved by the government? What government? The Chinese government. I think if all these plasticized bodies is black, blacks would protest.”

The Our Body show was shut down by judicial order in France in 2009 after two human rights groups objected to the display.

In 2008, then-New York Attorney General Andrew Cuomo reached a settlement with Premier Exhibitions, another company displaying plastinated Chinese individuals. The settlement required the company to refund the cost of admission to those disturbed by the murky provenance of the bodies.

The settlement also required the exhibitor to post a sign saying they were “not able to confirm that the bodies and parts being displayed were not, or did not belong to, Chinese victims who may have been victims of torture and execution.”

“Despite repeated denials,” Cuomo said as the settlement was announced, “we now know that Premier itself cannot demonstrate the circumstances that led to the death of the individuals. Nor is Premier able to establish that these people consented to their remains being used in this manner. Respect for the dead and respect for the public requires that Premier do more than simply assure us there is no reason for concern.”

That settlement drew praise from Wu’s Laogai Research Foundation. Assistant Director Kirk Donahoe said that it meant that “it is now less likely that Premier and its competitors will obtain specimens from China for display not just in New York, but anywhere in the United States.”

In 2009, also in reaction to the lack of documentation Premier Exhibitions was able to provide, Hawaii banned the exhibition for profit of human bodies.

Congressman’s intervention

U.S. Rep. Todd Akin, from St. Louis, introduced a bill in 2010 to prohibit the importation of plasticized human bodies, on human rights grounds, following a request from Wu.

“His statements and concerns informed our concerns,” said Steve Taylor, Akin’s spokesman, noting that several companies now have such displays in the United States. “It’s been my experience that reputable organizations contract (for the shows) seemingly without considering these concerns,” he said. “It’s the standard of documentation that has proven problematic. There’s little to disabuse us of the notion it could be a body of a political prisoner.”

The Akin bill did not pass.

In Seattle, however, the City Council in July 2010, responding to concerns about whether informed consent was provided by those on display or their families, prohibited “the public commercial display of dead human bodies” without “evidence of informed consent specific to the public exhibition.”

According to “Bodies on Display,” a Laogai Research Foundation report in July 2010, the San Francisco County health department closed a “Universe Within” show after then-County Supervisor Fiona Ma became concerned about leaks of body fluids. After her election to the State Assembly, legislation requiring clear documentation of consent by those on display or their relatives passed the Assembly and state Senate but was vetoed by then-Gov. Arnold Schwarzenegger.

The Laogai Foundation quoted Ma in its report: “As a Chinese-American,” she said, “I know that few people in China would voluntarily donate their organs or bodies due to the strong cultural and traditional preference of leaving their body intact for burial after death. So when I saw the exhibit, I knew something was wrong.”

Cadavers on display at the new exhibit: Our Body, The Universe Within, at the Echo Lake Aquarium and Science Center in Burlington on Friday April 13, 2012. / EMILY McMANAMY, Free Press

“Since the 1980s,” the Laogai Foundation says in the summary of its report, “the Chinese government has directly profited from the trade in organs harvested from executed prisoners. The advent of ‘plastination’ ... has allowed the Chinese Communist regime to profit from the dead in another way.” (China said in March it would no longer harvest organs from executed prisoners.)

In Pittsburgh earlier this year, Elaine Catz, an 11-year employee of the Carnegie Science Center, resigned when the center scheduled a seven-month show called Bodies... The Exhibit, staged by Premier Exhibitions — the company Cuomo dealt with in New York.

“We don’t know how these people died or why they died,” she was quoted as saying by the Pittsburgh Post-Gazette. “Before we put our stamp of approval on it, there should be a high burden of proof on Premier.”

Canadian international human rights attorney David Matas failed in his attempt in 2011 to close a display of plastinated bodies at the MTS Centre, a sports venue in Winnipeg. “There’s big money to be made from this,” he told the Burlington Free Press. “The (marketing) companies turn a blind eye to the sources. It’s not up to me to prove the sources; it’s up to them to prove the origin. Anyone who accepts these bodies from China is accepting the word of the police, and that’s just not acceptable.”

Matas said it is “not a coincidence” that the exhibit has now appeared in a small town like Burlington. “Comparable exhibits ran into trouble in big cities,” he said. “They’re looking for soft targets.”

Contact John Briggs at 660-1863 or jbriggs@burlingtonfreepress.com. Follow him on Twitter atjabriggs926

PEACEWOOD. My Music for Peace

Mira Boryna — 2012-05-13T05:06:41-04:00

My Music for Peace. PEACEWOOD Festival. 3-7 August. Toruń. Poland.

To pay homage for victims of nuclear attacks on Hiroshima and Nagasaki, all wars and victims of nuclear disasters in Chernobyl and Fukushima.

1.Concerts of world-renowned artists
2.Workshops
3.Discussion "The world in the shadow of Atom".

"Music as a Peacemaker" is not less important issue than other ones surrounding the world of great politics, especially the area of military conflicts.

Wars are results of decisions made by leaders who seem not to care about music while making choices between war and peace.

However, the battlefields and the stages of disasters, including those caused by atom, are covered with bodies of common people. Behind acts of pushing big buttons there are also small buttons pushed by common people who get involved in wars - they send bullets, follow orders and in one second make decisions: to kill or not to kill... to beat or not to... to... Never-ending story.

Can Music change the face of the world and make it less painful and less cruel?
Common belief that music tenders custom is deeply justified in history of culture and social life.

From the beginning of human history music plays the role of mediator and it opens door to understanding each other, especially where all efforts to find compromise fail.

There is a lot to do in the field of using possibility of music for creating peace on Earth - in a global sense and on local level.
Music tenders customs through a kind of emotions it wakens in people, through reaching natural human positive and noble instincts of empathy and making good.

I do hope, not only me and a few more people believe Music can be a true Peacemaker. Musicians invited like the message of the My Music for Peace - the program of our foundation and the idea of the PEACEWOOD festival and want to come.

These are:

1. Lisbeth Scott is a world renowned vocalist who was featured on the soundtracks for famous films like :The Chronicles of Narnia, Munich, The Passion of the Christ, where she wrote and sang lyrics in Aramaic.

2. Józef Skrzek - a leading Polish multi-instrumentalist, singer and composer, an important figure in Polish rock. In 1971, he created the progressive-rock group Silesian Blues Band - SBB.

3. Steve Kindler, an internationally recognized violinist, playing 9 string electric violin. He played in The Honolulu Symphony, in John Mahavishnu Orchestra, and with Jan Hammer, Jeff Beck, and Kitaro.

4. Kara Johnstad is a singer /songwriter based in Berlin, Germany. One of the most versatile voices of our time, she sings jazz, pop, film music and does orchestra work. She has performed in numerous festivals

5. Fabrizio Pigliucci. Twenty years experience in arranging ,composing for cinema, TV, and theatre. He worked at 45 soundtracks by Warner, Emi, Buena Vista, Rai Trade, advertising tunes for Italian tv (RAI), Sky.

6. Russel Walder. Nominated to a Grammy Award, oboe Master, whose works are great contribution to the world music heritage. He is also an actor, composer of soundtracks for movies, documentaries, theatre.

In the Festival there is also going to be a discussion panel
"The World in the Shadow of Atom".

Issues:

-World peace. People’s law to living in peace and sense of safety.

-What can music do about violence? Violence among young people?

-Role of atom and threats for environment. Future of our planet.

-The role of music in building Peace and Earth awareness as a common home.

This is my invitation and appeal to all of you, who read this, to help the PEACEWOOD happen, for spreading this message.

We need support - first of all, financial support to do that. We are still looking for a Sponsor and for a Patron, who could take the role of Substantive Partner of the Panel "The World in the Shadow of Atom".

We need your words of support - whether you are just a reader, journalist, celebrity or politician.

You can see more information on our fundraiser campaign page http://www.indiegogo.com/PEACEWOOD-festival?a=491066

and on our foundation page: www.borynafoundation.com
Mira Boryna miranka@onet.pl

Union Rights Are Civil Rights

Dick Meister — 2012-05-12T17:33:54-04:00

The right of U.S. workers to organize and bargain collectively with their employers unhindered by employer or government interference has been a legal right since the 1930s. Yet there are workers who are unaware of that, and employers who aim to keep them unaware, meanwhile doing their utmost to keep them from exercising what is a basic civil right.

Many employers often claim working people are in any case not much interested in unionization, noting that less than 15 percent of workers currently belong to unions.

But as anyone who has looked beneath the employer claims has discovered, it's the illegal opposition of employers and the failure of government regulatory agencies to curtail the opposition that's the basic cause of the low rate of unionization.

If most workers do indeed oppose unionization, then what of the recent polls decisively showing otherwise? And why do so many employers go to the considerable trouble and expense of waging major campaigns against unionization? Why do they take such illegal actions as firing or otherwise penalizing union supporters?

Could it be that union campaigners might be able to persuade workers to vote for unionization, despite what their employers might have to say? Or despite employer threats to punish them for voting union?

Some employers have now taken the outrageous step of trying to keep employees from even knowing of their legal right to unionization.

Under a National Labor Relations Board ruling last August, employers were to be required as of this April to post notices at their workplaces telling employees of their union rights.

The ruling stemmed from the labor board's finding that young workers, recent immigrants and workers in non-union workplaces were generally unaware of the labor laws' guarantees and protections – including, of course, the basic right of workers to unionize.

As the New York Times observed, "the backlash was furious." The notoriously anti-union National Association of Manufacturers and U.S. Chamber of Commerce filed suits in two federal courts, claiming the law does not expressly permit the NLRB to require employers to post such notices. An appeals court has postponed the effective date of the rule pending further appeals.

The Times noted that the case involves more than "the legality of having to hang a poster in the coffee room. It's about industry's attempt to delay rules whenever it cannot derail them outright. It is about preventing workers from gaining knowledge and support to help them press their concerns."

So unless and until a court rules otherwise, workers will have the right to protections from the labor laws, but not the right to be informed of that through workplace notices and otherwise. Bizarre, certainly, is the word for that.

What workers need above all, even above the right to know their legal rights, is a firm strengthening of those rights. Why not add the right of unionization specifically to the Civil Rights Act? It is, after all, on a par with other basic civil rights such as the right to an education free of discrimination.

The Civil Rights Act, which makes it illegal to discriminate against workers on the basis of their race, ethnicity, gender, religion or national origin, should be expanded to include a specific prohibition of discrimination against pro-union workers.

No less a civil rights champion than Martin Luther King Jr. would agree to that. He knew that the right to unionization is one of the most important civil rights. Virtually his last act was in support of that. For he was slain by an assassin's bullet in 1968 as he was preparing to lead yet another of the many demonstrations he had led in behalf of striking black sanitation workers in Memphis who were demanding union recognition.

That was but one of many examples of King's support for workers seeking union recognition as their civil right – a right guaranteed not only by the 77-year-old National Labor Relations Act but also by the Constitution's First Amendment guarantee of freedom of association.

King declared that the needs of all Americans "are identical with labor's needs: Decent wages, fair working conditions, livable housing, old-age security, health and welfare measures, conditions in which families can grow, have education for their children, and respect in the community."

There could be no civil right greater than the right of working people to try to meet such paramount needs, as well as to be clearly informed of their right to do so through unionization.

Article By Dick Meister
www.dickmeister.com

Debt Forgiveness: The IMF, Iceland, and the U.S. in the 1930s all say it works

Martin Andelman — 2012-05-11T16:40:52-04:00

The International Monetary Fund (“IMF”), in its latest World Economic Outlook, stated quite clearly that mortgage write-downs, among other forms of debt forgiveness, can deliver significant economic benefits by substantially mitigating the negative impact of de-leveraging on a nation’s economic activity.

The report points out that our recession is being driven by households forced to reduce their debt leading to reduced consumer spending, which in turn drives us deeper into recession.

Daniel Leigh, the report’s author, made the concept simple for anyone, except perhaps Ed DeMarco of the FHFA, to understand…

"Because debt is acting as a brake on economic growth, it is important to unstick the brake."

I love this guy… he’s like the Forrest Gump of the economics set. Now get this…

“The IMF has studied the response of a number of countries to situations where large parts of the population are burdened with high mortgage debt in a recession, and finds that such programs can help prevent self-reinforcing cycles of falling house prices and lower aggregate demand.”

That sounds suspiciously familiar… which country would fall into that category? Oh yeah… ours. The report’s conclusions go on to give me goose bumps…

"Such policies are particularly relevant for economies with limited scope for expansionary macroeconomic policies and in which the financial sector has already received government support.”

The report focused in on the household debt reduction program implemented in the U.S. during the 1930's… and in Iceland in our current crisis, which it said can…

"… significantly reduce the number of household defaults and foreclosures and substantially reduce debt repayment burdens.”

The report also contrasted those successes with examples of failures to effectively deal with the fallout of an economic crisis… “such as the current response to the crisis in the U.S.”

The report also said that programs must be designed with incentives for BOTH banks and borrowers to participate, “notably by offering a viable alternative to default and foreclosure.”

The IMF also pointed out that...

"The friction caused by such redistribution may be one reason why such policies have rarely been used in the past, except when the magnitude of the problem was substantial and the ensuing social and political pressures considerable.”

I’m starting to feel a little nauseous over here… is any of this ringing any bells for anyone?

The report also cited a study which found that, “political systems tend to become more polarized in the wake of financial crises,” and as a result led to problems generating collective actions… like DOERS, comes to mind. Specifically, the report said that, “distressed mortgage borrowers may be less politically organized than banks - and this can hamper efforts to implement household debt restructuring.”

I think I’m going to need to lie down soon… but first I think I’ll go out to my driveway and slam my hand in my car door… in an effort to make the pain go away.

Join me in the Way Back Machine…

It’s the U.S. during The Great Depression of the 1930's and FDR has just introduced the Home Owners Loan Corporation or HOLC.

HOLC will be using government bonds that offer federal guarantees on principal and interest to buy up distressed mortgages from banks.

The purchases will represent 8.4 percent of our country’s GDP in 1933.

HOLC will then be restructuring these mortgages to make them more affordable to homeowners. The result will be that 80 percent of these restructured loans, roughly 800,000, will be protected from foreclosure.

Primarily, HOLC will extend the term of the mortgages, in some cases doubling the term, and converting the loans from variable to fixed rate loans, but HOLC also wrote off principal in many instances so that no loans exceeded 80 percent of the current appraised value.

Over the next twenty years or so these mortgages will be sold and the government will even make a profit by the time the program ends in 1951.

Referring to the HOLC program, the IMF’s report said…

“A key feature of the HOLC was the effective transfer of funds to credit constrained households with distressed balance sheets and a high marginal propensity to consume, which mitigated the negative effects on aggregate demand, which was caused by the recession and need for household de-leveraging.”

In other words, it worked. Well, I’ll be Bernanke’s Uncle. Isn’t Ben supposed to be an expert on The Great Depression? I could have sworn…

But wait… there’s more…

Apparently, this year Iceland has been forgiving mortgage debt for its citizens in an effort to stimulate economic growth and guess what?

It’s working there too!

The Icelandic government and the reconstructed Icelandic banks worked together to develop, “a template to be used in case by case restructuring discussions between borrowers and lenders.”

“The templates facilitated substantial debt write-downs designed to align secured debt with the supporting collateral,” or in other words, reduce the loan in line with the current value of the home, and make sure that the terms are such that the homeowner has the ability to repay the loan.

Brilliant! What are they putting in their Cheerios over there? We need some, whatever it is.

“The IMF found that such case by case negotiations safeguard property rights and reduced moral hazard.”

No kidding. Do tell.

Then only problem was that the process was time consuming because as of January of this year, only 35 percent of the restructuring applications were processed. Here in the U.S. we’ve been knocking our politically divided heads against the wall for four years now, and we’re nowhere close to having processed 35 percent of anything.

But, Iceland is obviously a country with advanced critical thinking skills, likely the result of not having CNBC or Fox News channels, so it has introduced a debt forgiveness plan which writes down seriously underwater mortgages to 110 percent of the current value of the given property.

Iceland’s officials did say that before debt write-downs really took off, it took the announcement of “… a comprehensive framework and clear expiration date for relief measure.”

See, that leaves the U.S. out, right there. Name one thing we’ve done since 2006 that you’d describe as being either comprehensive or clear? Go ahead… I’m waiting. Okay, I’ll make it even easier… what have we done that’s been somewhat comprehensive and reasonably clear?

Right… that’s what I thought you’d say. The only way we’ll be able to make this Iceland strategy work over here is if we can succeed by developing something that’s “narrow and muddy.” Comprehensive and clear seem entirely out of reach for us.

So… how’s it going, Ice, Ice Baby?

“As of January 2012, 15 to 20 percent of all Icelandic mortgages have been or are in the process of being written down.”

Iceland’s mortgage write-down program happened as a result of thousands of its citizens taking to the streets demanding that something be done about the debts the people had incurred buying homes during the bubble at what turned out to be wildly inflated prices. At one point, they surrounded the country’s parliament building and started throwing rocks.

(And people laughed at me last year when I suggested that we form a group called, “People in Favor of Hitting Politicians with Sticks,” or PIFOHPWS… for short.)

Of course, in our country, there’s no way that would ever happen because we’re all way too ashamed to be seen on CNN in what would be called, “The March of the Deadbeats.”

Even though, you would think that by now more people would be figuring out that if home values fall by 60 percent or more… and unemployment soars past the 20 percent mark… there are going to be an awful lot of people that may look, “irresponsible,” but are purely innocent victims of a global credit crisis.

So, how come the whole debt forgiveness thing is working so well over in Iceland, but if the issue even comes up for discussion over here, we can’t stop a parade of badly behaved adult children from whining about how they’re paying their mortgage payments and therefore would rather see the country mired in a 40-year economic funk than lift a finger that could potentially benefit someone who took out a second to remodel a bathroom?

Who are these people, and more to the point, who are their parents? Because when the revolution comes, I’m taking them out first. Our new society simply cannot be allowed to start with their sort of genetic defect. Or, like the man said… you can’t fix stupid or petty.

Brendan Keenan, writing in the Independent.ie, had the following to say on the topic of the Iceland debt forgiveness strategy…

“It will probably be necessary in the end to do something of the kind in this country, but any government trying should tread very, very warily. We may not be Greeks, but nor are we Icelanders.”

That’s true… so what are we in the eyes of the rest of the world these days?

A spoiled, drunk 15 year-old waving a gun in their face?

Mandelman out.

Finally, Jamie Dimon and I Agree on Something

Martin Andelman — 2012-05-11T16:28:18-04:00

JPMorgan Chase's CEO, Jamie Dimon, says he doesn’t want to make excuses, but his bank’s $2 billion losses in the last 45 days were due to errors, sloppiness, terrible execution, bad judgment and strategy, and the mark-to-market environment.

Want to know something? Those are exactly the same things that I would have guessed caused the loss of $2 billion in 45 days. I have no trouble imagining that those things could contribute to some fairly significant losses.

Dimon also told analysts that in hindsight he should have paid more attention to "trading losses and… newspapers"?

Okay, that shocked me. I mean, $2 billion is a lot of money to lose in 45 days when it could have been prevented just by noticing the losses and paying attention to newspapers.

I think I'm going to go ahead and send Mr. Dimon a one-year subscription to the New York Times. I know he has the money to buy his own subscription... or the entire newspaper for that matter, but he must be terribly busy because he lost $2 billion in 45 days for want to newspapers so it seems the least I can do.

And I sure am glad he didn't want to make any excuses. I hate CEOs that lose billions and then come out making all sorts of excuses, don't you?

According to CNN/Money…

“The group that suffered the losses is part of the bank's so-called corporate unit, and had been making trades designed to hedge against risk.”

Wait a minute… they were trying to hedge AGAINST RISK? And they LOST $2 BILLION? Now, that must be frustrating… I hate it when that happens. Like, when I’m eating really carefully and I stick a fork right through my cheek. Don’t you hate that?

CNN/Money also had the following to say…

“Last month, rumors swirled around a JPMorgan employee based in London who had, according to the Wall Street Journal, been taking large positions in credit default swaps. The employee was said to work in the bank's Chief Investment Office.”

So, according to the WSJ on April 6, 2012, the guy had been “dubbed the London whale,” and was a “French-born J.P. Morgan Chase & Co. employee named Bruno Michel Iksil.”

“Mr. Iksil has taken large positions for the bank in insurance-like products called credit-default swaps (“CDS”). Lately, partly in reaction to market movements possibly resulting from Mr. Iksil's trades, some hedge funds and others have made heavy opposing bets…”

Oh, good Lord. We’re still doing this sort of thing, huh? Some guy at JPMorgan Chase in London was gambling with credit default swaps, no one was watching, and next thing you know the bank was down $2 billion?

And this came as a surprise to Jamie? I guess there's no system in place at JPMorgan Chase that might of caught the losses at $1 billion, is that right? Well, now there's an idea for a new product that I would think would sell like hot cakes.

Someone should make a “$1 Billion Lost Alarm.” You know, after you've lost a billion... the bell rings.

What happened here?

So, as I understand it, JPMorgan was betting on changes in corporate index prices. CDS trading in corporate exposure is just speculating in the hopes of exploiting small movements in indices while employing a ton of leverage, which means you can win big, or you can lose big, and either way you go, it can happen fast.

It appears that JPMorgan’s bet was in the $100 billion range, and don't you just love the leverage there. They went long, meaning they sold protection, on an index that's supposedly tracking the CLO (collateralized loan obligations) market.

The problem was that the prices of the index's underlying components were not matching up with the pricing of the index on which JPMorgan had bet. At the end of the day, it was a very small movement in price that caused the losses, but that movement happened at the same time that the difference between the index and the underlying assets increased.

The idea that CDS index trading can be used to "hedge" anything is the sort of thing that's true... until it's not anymore. It's all pure speculation. But one thing should be clear to EVERYONE... NONE of this has anything to do with commercial banking.

Jamie Dimon claims that it was an attempt to manage "tail risk." His tail, maybe.

And we don’t need the Volker Rule? The rule that would prevent banks from placing outrageous bets with their own money, and place limits on the amount of capital they can invest in risky things like hedge funds and swaps, to name but two. The rule that’s part of Dodd-Frank’s financial reforms… the ones that are being fought tooth and nail by the financial services industry lobbyists and bank CEO, including Dimon.

According to the Washington Post on May 2nd…

“The warning from Daniel Tarullo, a Federal Reserve governor, comes as banks are putting up stiff resistance to new oversight and financial regulations — including at a private meeting Wednesday between Tarullo and the heads of Goldman Sachs, JPMorgan Chase and other Wall Street firms, according to the Fed.”

“Among the major new regulations that has been delayed is the Volcker Rule, which would seek to prevent banks from taking excessive risks by curtailing their ability to speculate with their own money — rather than on behalf of clients.”

Well, I can certainly understand why no one would want to rush into the Volker Rule, especially with JPMorgan Chase losing $2 billion in 45 days… actually fewer than 45 days.

I guess it’s really none of our business though, right? I mean, it’s not OUR bank. If JPMorgan Chase wants to take on the kind if risk involved in buying credit default swaps and the like, it’s on them. It’s not like we’re on the hook if they bankrupt themselves… right?

Please say I’m right…

Mandelman out.