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FOCUS | The Piketty Panic |
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Friday, 25 April 2014 12:57 |
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Krugman writes: "The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty's thesis."
Paul Krugman. (photo: NYT)

The Piketty Panic
By Paul Krugman, The New York Times
25 April 14
 apital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue.
I’ll come back to the name-calling in a moment. First, let’s talk about why “Capital” is having such an impact.
READ THE REST HERE: The Piketty Panic

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FOCUS | Beneath the Ukraine Crisis: Shale Gas |
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Friday, 25 April 2014 11:36 |
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Parry writes: "Behind the geopolitics pitting Russia against the West - and the ethnic tensions tearing Ukraine east and west - another backdrop for understanding this deepening conflict is the big-money competition for Ukraine's oil and natural gas."
The U.S. wants to assist the Ukraine in developing its shale gas reserves. (photo: Kyiv Post)

Beneath the Ukraine Crisis: Shale Gas
By Nat Parry, Consortium News
25 April 14
he crisis gripping Ukraine has plunged transatlantic relations to their lowest point since the Cold War and threatens to send Ukraine into an armed conflict with potentially dire consequences for the country and the wider region.
Moscow’s alleged meddling in eastern Ukraine and its earlier annexation of Crimea spurred worldwide rebukes and much international commentary regarding the growing East-West divide. But one aspect that we have heard less about is the corporate struggle for Ukraine’s oil and natural gas. By some accounts, it is this struggle that is as much to blame for the current crisis as any geopolitical tug-of-war between East and West.
Ukraine has Europe’s third-largest shale gas reserves at 42 trillion cubic feet, according to the U.S. Energy Information Administration. While for years U.S. oil companies have been pressing for shale gas development in countries such as Britain, Poland, France and Bulgaria only to be rebuffed by significant opposition from citizens and local legislators concerned about the environmental impacts of shale gas extraction – including earthquakes and groundwater contamination caused by hydraulic fracturing or “fracking” – there has been considerably less opposition in Ukraine, a country that has been embroiled in numerous gas disputes with the Russian Federation in recent years.
Russia’s state-owned Gazprom, controlling nearly one-fifth of the world’s gas reserves, supplies more than half of Ukraine’s gas annually, and about 30 percent of Europe’s. It has often used this as political and economic leverage over Kiev and Brussels, cutting gas supplies repeatedly over the past decade (in the winters of 2005-2006, 2007-2008, and again in 2008-2009), leading to energy shortages not only in Ukraine, but Western European countries as well. This leverage, however, came under challenge in 2013 as Ukraine took steps towards breaking its dependence on Russian gas.
On Nov. 5, 2013 (just a few weeks before the Maidan demonstrations began in Kiev), Chevron signed a 50-year agreement with the Ukrainian government to develop oil and gas in western Ukraine. According to the New York Times, “The government said that Chevron would spend $350 million on the exploratory phase of the project and that the total investment could reach $10 billion.”
In announcing the deal, President Viktor Yanukovych said that it “will let Ukraine satisfy its gas needs completely and, under the optimistic scenario, export energy resources by 2020.” Reuters characterized the deal as ”another step in a drive for more energy independence from Russia.”
The United States offered its diplomatic support, with Geoffrey Pyatt, the U.S. ambassador to Ukraine, saying, “I’m very determined to cooperate with the Ukrainian government in strengthening Ukraine’s energy independence.”
U.S. Assistant Secretary of State for Europe Victoria Nuland spoke at an international business conference sponsored by Chevron on Dec. 13, 2013, after just returning from Kiev where she handed out cookies and sandwiches to demonstrators on the Maidan. In her speech, she urged Ukraine to sign a new deal with the IMF which would “send a positive signal to private markets and would increase foreign direct investment that is so urgently needed in Ukraine.” This is important for putting Ukraine “on the path to strengthening the sort of stable and predictable business environment that investors require,” she said.
Although stability and predictability are not exactly the words that people would associate with Ukraine these days, Western energy companies have continued to maneuver for corporate rights over Ukraine’s shale gas deposits. Last fall, officials were in negotiations with an ExxonMobil-led consortium to explore for hydrocarbons off Ukraine’s western Black Sea coast.
On Nov. 27, the Ukrainian government signed another production-sharing agreement with a consortium of investors led by Italian energy company Eni to develop unconventional hydrocarbons in the Black Sea. “We have attracted investors which will within five to seven years maximum double Ukraine’s domestic gas production,” Yanukovych said following the agreement.
At the time of Yanukovych’s ouster in February, Chevron and the Ukrainian government had been negotiating an operating agreement for the shale development effort in western Ukraine, and Chevron spokesman Cameron Van Ast said that the negotiations would go forward despite Yanukovych fleeing the country. “We are continuing to finalize our joint operating agreement and the government continues to be supportive,” Van Ast said.
Royal Dutch Shell is also engaged in the country, having signed an agreement last year with the government of Yanukovych to explore a shale formation in eastern Ukraine. When it comes to Crimea, numerous oil companies including Chevron, Shell, ExxonMobil, Repsol and even Petrochina have shown interest in developing its offshore energy assets.
Believing that Crimea’s onshore and offshore fields will live up to expectations, these companies have greatly expanded their exploration of the Black Sea off the Crimean peninsula. Some analysts believe that one of Vladimir Putin’s motivations for annexing Crimea was to ensure that Gazprom will control Crimean offshore energy assets – in addition to ensuring the continued use of Crimea as host to Russia’s Black Sea Fleet.
It is clear that all of these oil and gas companies – backed by their governments, including those of the Russian Federation and the United States – are deeply embroiled in the Ukrainian crisis, with much invested and much at stake. But with their disproportionate influence over Ukraine’s future, it should be kept in mind that the number one responsibility of any corporation is to increase profit margins for its shareholders, not necessarily to promote the democracy or sovereignty of the countries they are operating in.
This is particularly the case for Chevron and Shell, both of which have been implicated in major human rights violations in Nigeria. Chevron has been accused of recruiting and supplying Nigerian military forces involved in massacres of environmental protesters in the oil-rich Niger Delta, and Shell has faced charges of complicity in torture and other human rights abuses against the Ogoni people of southern Nigeria.
With this in mind, the Ukrainian people – whether in the east of the country or the west – might want to rethink what is meant by “energy independence,” and whether the future they seek can truly be met by placing their hopes in the benevolence of foreign oil and gas companies.

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Are Two Ukraines Better Than One? |
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Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=5494"><span class="small">Steve Weissman, Reader Supported News</span></a>
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Thursday, 24 April 2014 15:04 |
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Weissman writes: "The US and NATO increase their military buildup along Russia's borders, in the air above, and in the Black Sea face-to-face with Russia's fleet in Crimea. But only to defend their members and allies, of course."
Just like Crimea, throughout Eastern Ukraine there are demands to join Russia. (photo: EPA)

Are Two Ukraines Better Than One?
By Steve Weissman, Reader Supported News
24 April 14
oe Biden clinched it. With his trip to Kiev, he hammered home Washington’s determination to bring Ukraine into the Western camp, no matter what the neighboring Russians think, no matter what the people of Ukraine’s pro-Russian east and south want for themselves, and at whatever risk of an accidental nuclear confrontation.
“This is a second opportunity to make good on the original promise made by the Orange Revolution,” he told Ukrainian lawmakers. He was recalling George W. Bush’s effort to roll back Russian influence in Ukraine in 2004, which I summed up at the time in “Uncle Santa and Ukraine’s Orange-Colored Elves.”
A former colonel in the Soviet KGB, Putin seeks to preserve Kiev’s independence only from NATO and the West, not from the Russian Bear, who has ruled Ukraine for centuries.
With no less chutzpah or hypocrisy, Bush condemns only Moscow's meddling – and not Washington's long-term effort to build up Ukraine's pro-Western opposition. According to the Associated Press, in the last two years alone the Bush Administration spent more than $65 million to seed the Orange Revolution and build support for opposition leader Viktor Yushchenko.
Though much of the story remains the same, the damage, danger, and insanity have all increased massively. How, then, do we respond? Some readers lean toward Putin, I know. Others prefer to cheer Washington, its European allies, or the Ukrainian "freedom fighters." I take a different approach, as I have since October 1962, when a rag-tag bunch of student activists went to Washington to hold Khrushchev, Kennedy, and Castro all responsible for the Cuban missile crisis. We had absolutely no visible impact. But breaking free of a Cold War mindset shaped the way I have spent the rest of a long life opposing Washington's interventionist foreign policy – and doing it without ever drinking the Kool-Aid of Moscow, Beijing, Hanoi, Havana, Caracas, or Tehran.
In the present crisis, we can do our part by figuring out who did which and to whom, following wherever the trail leads without shying away from evidence that makes one side or the other look better or worse. We can avoid playing cheerleaders or useful idiots for any side, opposing the self-serving ploys of all sides alike, whether from Moscow, Washington, or its European allies. And we can point out as honestly as we can the growing threat their conflict poses to any hope for a sensible, peaceful, and humane international system.
Everyone will have their own view of events on the ground, but here is how it looks to me:
President Obama and his European allies pulled off a coup in Kiev, as I documented in detail here and here. Many other nations applauded the putsch, which makes it all the more likely that the masters of NATO, which is supposedly a defensive alliance, will resort to undemocratic regime change wherever and whenever they think they can get away with it.
In response, Putin seized Crimea, breaking Moscow’s pledge in the 1994 Budapest Memorandum to guarantee Ukraine’s borders. The plebiscite in Crimea gives him cover, but where is the democracy in a hastily-called vote with no opportunity for full and free debate and no serious check on who counts the ballots? He took Crimea primarily to protect his warm-water naval fleet at Sebastopol from the whims of an increasingly anti-Russian regime in Kiev, and I suspect he would seize nearby Odessa as well if NATO ever showed signs of wanting to use it as a major naval port.
The US and NATO increase their military buildup along Russia’s borders, in the air above, and in the Black Sea face-to-face with Russia’s fleet in Crimea. But only to defend their members and allies, of course. “Nothing we've seen out of Moscow, nothing we've seen out of Russia or their armed forces is de-escalating the tension [or] is making things any more stable in Ukraine or on the continent of Europe,” explained Rear Admiral John Kirby, the Pentagon’s press secretary, as he announced sending as many as 600 paratroopers to Poland. “What would be very helpful is if they removed their forces off that border and took concrete actions to respect the sovereignty of Ukraine.”
As Admiral Kirby suggests, Putin continues to mass tens of thousands of troops near Ukraine’s border, giving inspiration to those in the south and east who want greater independence from the Western-backed government in Kiev. Within hours, he could send those troops into any part of Ukraine, either to seize additional territory or – more likely – to act as “peace-keepers.” He also appears to be sending small numbers of Special Forces into Ukraine, as he admitted having done in Crimea.
The vicious circle feeds on itself. It increases the possibility of a nuclear accident – and the probability that an already divided Ukraine will break apart. Biden insists that the U.S. and Europe want to preserve a united country, but however much they deny or try to mitigate it, they are effectively backing one side of the country against the other.
The Western-backed government in Kiev will above all defend favored oligarchs, who are the primary source of the corruption that Biden and the IMF talk of rooting out. But, ideologically, the new government favors right-wing nationalism. This extends from neo-Nazis who support the European Union to rabid ultra-rightists who oppose it to the more moderate-sounding Prime Minister Arseniy Yatsenyuk, one of whose first acts – since rescinded – was to deny any official role for the Russian language.
As Biden says, but probably fails to understand, the new regime does represent the promise of the first Orange Revolution, whose greatest “success” was to create a mythic Ukrainian history that holds their uneasy alliance together. Theirs is the thinking of Western Ukraine, especially strong in the area around Lvov. They find their hero in the undeniably racist Stepan Bandera. And, if Washington and Brussels ever stop holding them back, they dream of creating an ethnically pure Ukraine for Ukrainians.
Moscow backs the other side of the country, the predominantly Russian-speaking east and south, where people tend to view Bandera and his followers as Nazi collaborators and unreformed fascists. Many of the Russian-speakers are as anti-Semitic, anti-Islamic, and anti-gay as in Western Ukraine, but even mainstream reporters tells us that the people there have real grievances and truly fear that Kiev will not treat them and their language, Eastern Orthodox religion, and distinctive culture as equal parts of a united Ukraine.
Washington and its European allies encourage these fears by backing Kiev’s “anti-terrorist’ military attacks in the Russian-speaking regions, especially in the area around Donetsk. The Western-backed government in Kiev has just resumed these military operations, and Russian troops have responded by staging maneuvers closer to the border.
“If the regime in Kiev has begun using the army against the population inside the country, then this is undoubtedly a very serious crime,” Putin announced on Russian TV. “Of course, this will have consequences for the people who take such decisions, and this also affects our inter-state relations.”
The entire situation could grow even worse before this article goes online, but neither Washington, Brussels, nor Moscow seems in any way prepared to keep Ukraine from breaking apart, with all the bloodshed and bitterness that an ideologically-charged civil war will engender.
A veteran of the Berkeley Free Speech Movement and the New Left monthly Ramparts, Steve Weissman lived for many years in London, working as a magazine writer and television producer. He now lives and works in France, where he is researching a new book, "Big Money and the Corporate State: How Global Banks, Corporations, and Speculators Rule and How to Nonviolently Break Their Hold."
Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

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Net Neutrality Can Be Saved, But Only f Citizens Raise an Outcry |
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Thursday, 24 April 2014 14:59 |
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Nichols writes: "Every indication is that the FCC is preparing to adopt a thoroughly misguided approach to issues of Internet access and functionality."
(photo: file)

Net Neutrality Can Be Saved, But Only if Citizens Raise an Outcry
By John Nichols, The Nation
24 April 14
hen Barack Obama was running for president in 2007, he earned a great deal of credibility with tech-savvy voters by expressing support for net neutrality that was rooted in an understanding that this issue raises essential questions about the future of open, free and democratic communications in America.
Obama “got” that net neutrality represented an Internet-age equivalent of the First Amendment—a guarantee of equal treatment for all content, as opposed to special rights to speed and quality of service for the powerful business and political elites that can buy an advantage.
Asked whether he thought the Federal Communications Commission and Congress needed to preserve the Internet as we know it, the senator from Illinois said, “The answer is ‘yes.’ I am a strong supporter of Net neutrality.”
“What you’ve been seeing is some lobbying that says that the servers and the various portals through which you’re getting information over the Internet should be able to be gatekeepers and to charge different rates to different Web sites,” explained Obama, who warned that with such a change in standards “you could get much better quality from the Fox News site and you’d be getting rotten service from the mom and pop sites.”
Obama’s bottom line: “That I think destroys one of the best things about the Internet—which is that there is this incredible equality there.”
Candidate Obama was exactly right.
So was President Obama when, in 2010, the White House declared that, “President Obama is strongly committed to net neutrality in order to keep an open Internet that fosters investment, innovation, consumer choice, and free speech.”
And President Obama certainly sounded right in January, 2014, when he said, “I have been a strong supporter of net neutrality. The new commissioner of the FCC, Tom Wheeler, whom I appointed, I know is a strong supporter of Net Neutrality.”
The president expressed that confidence in Wheeler, even as concerns were raised about an appointee who had previously worked as a cable and wireless industry lobbyist.
Now, barely three months after the president identified him as "a strong supporter of net neutrality," Wheeler is reportedly preparing to roll out a proposal that our most digitally-engaged newspaper, The Guardian, delicately suggests would "axe-murder Net Neutrality."
Every indication is that the FCC is preparing to adopt a thoroughly misguided approach to issues of Internet access and functionality that is, itself, a response to court rulings that upended the FCC’s previous thoroughly misguided approach to the issues of Internet access and functionality.
According to Los Angeles Times tech writer Jim Puzzanghera, the latest proposal “would allow Internet service providers to charge companies for faster delivery of their content.”
Gabe Rottman, an American Civil Liberties Union legislative counsel and policy advisor who focuses on First Amendment issues, correctly explains that, “If the FCC embraces this reported reversal in its stance toward net neutrality, barriers to innovation will rise, the marketplace of ideas on the internet will be constrained, and consumers will ultimately pay the price.”
Wheeler claims that criticism based on reports about his initiative are “flat-out wrong.” “There is no ‘turnaround in policy,’ Wheeler said. “The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court’s decision, behavior that harms consumers or competition will not be permitted,
But, after reviewing “the outlines of the proposal released by (Wheeler’s) office on Wednesday,” Puzzanghera’s “Tech Now” report explains:
Although the plan would reinstate the agency’s prohibition against Internet providers from blocking any legal content, it would allow phone and cable companies to charge Netflix and other companies to put their content in a super-fast lane on the information superhighway.
The plan appears to violate a basic principle of net neutrality that all similar content should be treated equally.
Tim Karr, of the media reform group Free Press, says: “All evidence suggests that Wheeler’s proposal is a betrayal of Obama and of the millions of people who have called on the FCC to put in place strong and enforceable net neutrality protections.”
The Future of Music Coalition’s Casey Rae argues that any FCC initiative that establishes a model for speeding up delivery of content for paying customers is “not ‘net neutrality.’”
The risk, says Rae is that, “the Internet in America will now be carved into a fast lane for well-heeled corporations and a dirt road for everyone else.”
“These proposed rules not only don’t go far enough to safeguard consumers, they actively marginalize smaller and independent voices,” explains Rae, who says that, “Artists, developers, culture workers, media-makers, nonprofit organizations, community, civic and church groups must tell the FCC that this isn’t good enough. We need real rules of the road for ISPs to guarantee that creative expression and entrepreneurship can thrive in the online ecosystem. FMC and our allies look forward to making this case in the upcoming rulemaking after May 15.”
Rae’s point is an important one. The process that is now beginning is just beginning. It can be influenced by content creators, consumers and citizen activists who understand that in this age of digital communications a broken Internet will lead to a broken democracy. It can even be influenced by the president and members of Congress, who ought to speak up, loudly, in favor of the right approach to net neutrality.
There are two simple steps to take:
1. Recognize that there is a right response to court rulings that have rejected the complex and ill-thought approaches that the FCC has up to now taken with regard to net neutrality. The right response is to reclassify broadband Internet access as a telecommunications service that can be regulated in the public interest.
When the FCC’s clumsy previous attempt at establishing net neutrality protections was rejected in January by the U.S. District Court of Appeals for the District of Columbia, the court did not say that the commission lacked regulatory authority—simply that it needed a better approach. As David Sohn, general legal counsel at the Center for Democracy & Technology, notes: the court opinion laid out “exactly how the FCC essentially tied its own hands in the case, and makes it clear that the FCC has the power to fix the problem.”
“The Court upheld the FCC’s general authority to issue rules aimed at spurring broadband deployment, and accepted the basic policy rationale for Internet neutrality as articulated by the FCC,” explains Sohn. “The arguments in favor of Internet neutrality are as strong as ever, but prior FCC decisions on how to treat broadband have painted the agency into a corner. Those decisions are not set in stone, however, and the ball is now back in the FCC’s court. The FCC should reconsider its classification of broadband Internet access and reestablish its authority to enact necessary safeguards for Internet openness.”
2. Recognize that this is the time to send a clear signal of support for genuine net neutrality. The FCC has listened in the past when a public outcry has been raised, on media ownership issues, diversity issues and Internet access issues. Wheeler is a new chairman. It’s vital to communicate to him, and to the other members of the commission that President Obama was right when he said that establishing “fast lanes” on the Internet “destroys one of the best things about the Internet—which is that there is this incredible equality there.”
Dozens of public interest groups, ranging from the American Civil Liberties Union to the Government Accountability Project to the PEN American Center to Fairness & Accuracy In Reporting and the National Hispanic Media Coalition have urged the FCC to do the right thing. The “Save the Internet” coalition has a track record of rapidly mobilizing Americans to thwart wrongheaded moves by the FCC.
They’re already up and at it, with a petition urging Wheeler and the FCC to “scrap” approaches that won’t work and “restore the principle of online nondiscrimination by reclassifying broadband as a telecommunications service.”
Vermont Senator Bernie Sanders says that, “Our free and open Internet has made invaluable contributions to democracy both here in the United States and around the world. Whether you are rich, poor, young or old, the Internet allows all people to seek out information and communicate globally. We must not turn over our democracy to the highest bidder.”
Sanders is right about that—especially when he recognizes the vital link between technology and democracy. A free and open Internet is essential to modern democracy. But that freedom and openness will only be maintained if Americans use their great democratic voice to demand it.
There is a way to save net neutrality. And if ever there was a time for citizens to urge the FCC to go the right way, this is it.

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