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FOCUS | Noam Chomsky: The Kind of Anarchism I Believe In |
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Thursday, 30 May 2013 10:14 |
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Wilson writes: "'If workers are more insecure, they won't do things, like asking for better wages and better benefits. And that's healthy for the economy from a certain point of view, a point of view that says workers ought to be oppressed and controlled, and that wealth ought to be concentrated in a very few pockets.' - Noam Chomsky"
Author, historian and political commentator Noam Chomsky. (photo: Corbis)

Noam Chomsky: The Kind of Anarchism I Believe In
By Michael S. Wilson, Modern Success
30 May 13
veryone knows what one looks like. They've got the leather boots. Maybe some chains. Trench-coats. They wait in dark alleys with perfectly-spherical bombs. A lot of ‘em like to spike up their hair, or shave the side of their head, or do weird things like that to their appearance. You know what I mean. Everyone knows.
That's what an anarchist looks like.
But the man I'm talking to today, albeit by voice-over-internet, I'm fairly certain doesn't have a shaved head. No Mohawk that I'm aware of. He doesn't carry any bombs. Especially not behind any dark alleys wearing a trench-coat. In fact, when he was young he tended to wear a nerdy short-sleeved shirt and necktie and those glasses with the Buddy Holly rims. And the few times I've had the opportunity to hear him speak in person, he seemed very … average. Almost disappointingly so. He was more the mild-mannered Clark Kent than the brazen Superman. His manner of speaking is almost mesmerizingly professorial - he rarely changes his cadence or pitch, except perhaps to deliver a satirical remark, and then only using pause, not inflection. His thoughts often fly into contingent - though important or descriptive - fields, before returning to the point. One must use every brain cell to follow his speaking at times since it is so full of starts, pauses, back-tracks, codas, and re-referencing. This is not due to lack of confidence on his part, but because, I think, of all the ideas coming into his mind at once.
If you are absolutely not familiar with who Noam Chomsky is, you are not alone. He almost never appears in the mainstream media, due to factors which should become clear as the interview progresses. Yet his intellectual stature is undeniable:
The New Yorker has ... termed Chomsky "one of the greatest minds of the 20th Century", while the New York Times has him as "arguably the most important intellectual alive." But judged by the range, influence and novelty of his ideas, many argue that Chomsky is, in fact, the owner of one of the greatest minds in the history of our species. There is barely a domain of human understanding that has not been touched in some way by his thought. In the half-century since the 1960s, reverberations from his work have shaken the foundations of cognitive science, epistemology, media studies, psychobiology, computer science (to name but a few). Alongside Marx and Shakespeare, he ranks among the ten most-quoted writers in history. - Matt Kenard, Financial Times
I remember how shocked people were when I told them I was going to interview M. I. T. Professor Emeritus Noam Chomsky. I remember how shocked I was when he agreed to a brief interview. But I also know Professor Chomsky to be a very down-to-earth man, very approachable, someone who seems to draw from a vast pool of inner strength to be able to speak not only to large crowds in Universities around the world, but also to respond to endless individual emails and letters, while continuing with all his other work of research. (He is said to read an average of twelve scholarly journals per week, among dozens of other periodicals and newspapers.) With all the work the man generates, one begins to wonder if Noam Chomsky, now at the youthful age of eighty-four, wasn't cloned at some point.
Whatever the case, I had the pleasure of interviewing him as I sat in Memorial Union and he in his university office in Boston. So many things have been written about, and discussed by, Professor Chomsky, it was a challenge to think of anything new to ask him: like the grandparent you can't think of what to get for Christmas because they already have everything.
So I chose to be a bit selfish and ask him what I've always wanted to ask him. As an out-spoken, actual, live-and-breathing anarchist, I wanted to know how he could align himself with such a controversial and marginal position.
**** MODERN SUCCESS: You are, among many other things, a self-described anarchist - an anarcho-syndicalist, specifically. Most people think of anarchists as disenfranchised punks throwing rocks at store windows, or masked men tossing ball-shaped bombs at fat industrialists. Is this an accurate view? What is anarchy to you?
NOAM CHOMSKY: Well, anarchism is, in my view, basically a kind of tendency in human thought which shows up in different forms in different circumstances, and has some leading characteristics. Primarily it is a tendency that is suspicious and skeptical of domination, authority, and hierarchy. It seeks structures of hierarchy and domination in human life over the whole range, extending from, say, patriarchal families to, say, imperial systems, and it asks whether those systems are justified. It assumes that the burden of proof for anyone in a position of power and authority lies on them. Their authority is not self-justifying. They have to give a reason for it, a justification. And if they can't justify that authority and power and control, which is the usual case, then the authority ought to be dismantled and replaced by something more free and just. And, as I understand it, anarchy is just that tendency. It takes different forms at different times.
Anarcho-syndicalism is a particular variety of anarchism which was concerned primarily, though not solely, but primarily with control over work, over the work place, over production. It took for granted that working people ought to control their own work, its conditions, [that] they ought to control the enterprises in which they work, along with communities, so they should be associated with one another in free associations, and … democracy of that kind should be the foundational elements of a more general free society. And then, you know, ideas are worked out about how exactly that should manifest itself, but I think that is the core of anarcho-syndicalist thinking. I mean it's not at all the general image that you described - people running around the streets, you know, breaking store windows - but [anarcho-syndicalism] is a conception of a very organized society, but organized from below by direct participation at every level, with as little control and domination as is feasible, maybe none.
MS: With the apparent ongoing demise of the capitalist state, many people are looking at other ways to be successful, to run their lives, and I'm wondering what you would say anarchy and syndicalism have to offer, things that others ideas - say, for example, state-run socialism - have failed to offer? Why should we choose anarchy, as opposed to, say, libertarianism?
NC: Well what's called libertarian in the United States, which is a special U. S. phenomenon, it doesn't really exist anywhere else - a little bit in England - permits a very high level of authority and domination but in the hands of private power: so private power should be unleashed to do whatever it likes. The assumption is that by some kind of magic, concentrated private power will lead to a more free and just society. Actually that has been believed in the past. Adam Smith for example, one of his main arguments for markets was the claim that under conditions of perfect liberty, markets would lead to perfect equality. Well, we don't have to talk about that! That kind of -
MS: It seems to be a continuing contention today …
NC: Yes, and so well that kind of libertarianism, in my view, in the current world, is just a call for some of the worst kinds of tyranny, namely unaccountable private tyranny. Anarchism is quite different from that. It calls for an elimination to tyranny, all kinds of tyranny. Including the kind of tyranny that's internal to private power concentrations. So why should we prefer it? Well I think because freedom is better than subordination. It's better to be free than to be a slave. Its' better to be able to make your own decisions than to have someone else make decisions and force you to observe them. I mean, I don't think you really need an argument for that. It seems like … transparent.
The thing you need an argument for, and should give an argument for, is, How can we best proceed in that direction? And there are lots of ways within the current society. One way, incidentally, is through use of the state, to the extent that it is democratically controlled. I mean in the long run, anarchists would like to see the state eliminated. But it exists, alongside of private power, and the state is, at least to a certain extent, under public influence and control - could be much more so. And it provides devices to constrain the much more dangerous forces of private power. Rules for safety and health in the workplace for example. Or insuring that people have decent health care, let's say. Many other things like that. They're not going to come about through private power. Quite the contrary. But they can come about through the use of the state system under limited democratic control ... to carry forward reformist measures. I think those are fine things to do. they should be looking forward to something much more, much beyond, - namely actual, much larger-scale democratization. And that's possible to not only think about, but to work on. So one of the leading anarchist thinkers, Bakunin in the 19th cent, pointed out that it's quite possible to build the institutions of a future society within the present one. And he was thinking about far more autocratic societies than ours. And that's being done. So for example, worker- and community- controlled enterprises are germs of a future society within the present one. And those not only can be developed, but are being developed. There's some important work on this by Gar Alperovitz who's involved in the enterprise systems around the Cleveland area which are worker and community controlled. There's a lot of theoretical discussion of how it might work out, from various sources. Some of the most worked out ideas are in what's called the “parecon” - participatory economics - literature and discussions. And there are others. These are at the planning and thinking level. And at the practical implementation level, there are steps that can be taken, while also pressing to overcome the worst … the major harms … caused by … concentration of private power through the use of state system, as long as the current system exists. So there's no shortage of means to pursue.
As for state socialism, depends what one means by the term. If it’s tyranny of the Bolshevik variety (and its descendants), we need not tarry on it. If it’s a more expanded social democratic state, then the comments above apply. If something else, then what? Will it place decision-making in the hands of working people and communities, or in hands of some authority? If the latter, then - once again - freedom is better than subjugation, and the latter carries a very heavy burden of justification.
MS: Many people know you because of your and Edward Herman’s development of the Propaganda Model. Could you briefly describe that model and why it might be important to the students at the UW-Madison?
NC: Well first look back a bit - a little historical framework - back in the late 19th-, early 20th century, a good deal of freedom had been won in some societies. At the peak of this were in fact the United States and Britain. By no means free societies, but by comparative standards quite advanced in this respect. In fact so advanced, that power systems - state and private - began to recognize that things were getting to a point where they can't control the population by force as easily as before, so they are going to have to turn to other means of control. And the other means of control are control of beliefs and attitudes. And out of that grew the public relations industry, which in those days described itself honestly as an industry of propaganda.
The guru of the PR industry, Edward Bernays - incidentally, not a reactionary, but a Wilson-Roosevelt-Kennedy liberal - the maiden handbook of the PR industry which he wrote back in the 1920s was called Propaganda. And in it he described, correctly, the goal of the industry. He said our goal is to insure that the “intelligent minority” - and of course anyone who writes about these things is part of that intelligent minority by definition, by stipulation, so we, the intelligent minority, are the only people capable of running things, and there's that great population out there, the “unwashed masses,” who, if they're left alone will just get into trouble: so we have to, as he put it, “engineer their consent,” figure out ways to insure they consent to our rule and domination. And that's the goal of the PR industry. And it works in many ways. It's primary commitment is commercial advertising. In fact, Bernays made his name right at that time - late 20s - by running an advertising campaign to convince women to smoke cigarettes: women weren't smoking cigarettes, this big group of people who the tobacco industry isn't able to kill, so we've got to do something about that. And he very successfully ran campaigns that induced women to smoke cigarettes: that would be, in modern terms, the cool thing to do, you know, that's the way you get to be a modern, liberated woman. It was very successful -
MS: Is there a correlation between that campaign and what's happening with the big oil industry right now and climate change?
NC: These are just a few examples. These are the origins of what became a huge industry of controlling attitudes and opinions. Now the oil industry today, and in fact the business world generally, are engaged in comparable campaigns to try to undermine efforts to deal with a problem that's even greater than the mass murder that was caused by the tobacco industry; and it was mass murder. We are facing a threat, a serious threat, of catastrophic climate change. And it's no joke. And [the oil industry is] trying to impede measures to deal with it for their own short-term profit interests. And that includes not only the petroleum industry, but the American Chamber of Commerce - the leading business lobby - and others, who've stated quite openly that they're conducting … they don't call it propaganda … but what would amount to propaganda campaigns to convince people that there's no real danger and we shouldn't really do much about it, and that we should concentrate on really important things like the deficit and economic growth - what they call ‘growth' - and not worry about the fact that the human species is marching over a cliff which could be something like [human] species destruction; or at least the destruction of the possibility of a decent life for huge numbers of people. And there are many other correlations.
In fact quite generally, commercial advertising is fundamentally an effort to undermine markets. We should recognize that. If you've taken an economics course, you know that markets are supposed to be based on informed consumers making rational choices. You take a look at the first ad you see on television and ask yourself … is that it's purpose? No it's not. It's to create uninformed consumers making irrational choices. And these same institutions run political campaigns. It's pretty much the same: you have to undermine democracy by trying to get uninformed people to make irrational choices. And so this is only one aspect of the PR industry. What Herman and I were discussing was another aspect of the whole propaganda system that developed roughly at that period, and that's “manufacture of consent,” as it was called, [consent] to the decisions of our political leaders, or the leaders of the private economy, to try to insure that people have the right beliefs and don't try to comprehend the way decisions are being made that may not only harm them, but harm many others. That's propaganda in the normal sense. And so we were talking about mass media, and the intellectual community of the world in general, which is to a large extent dedicated to this. Not that people see themselves as propagandists, but … that they are themselves deeply indoctrinated into the principles of the system, which prevent them from perceiving many things that are really right on the surface, [things] that would be subversive to power if understood. We give plenty of examples there and there's plenty more you can mention up to the present moment, crucial ones in fact. That's a large part of a general system of indoctrination and control that runs parallel to controlling attitudes and … consumeristic commitments, and other devices to control people.
You mentioned students before. Well one of the main problems for students today - a huge problem - is sky-rocketing tuitions. Why do we have tuitions that are completely out-of-line with other countries, even with our own history? In the 1950s the United States was a much poorer country than it is today, and yet higher education was … pretty much free, or low fees or no fees for huge numbers of people. There hasn't been an economic change that's made it necessary, now, to have very high tuitions, far more than when we were a poor country. And to drive the point home even more clearly, if we look just across the borders, Mexico is a poor country yet has a good educational system with free tuition. There was an effort by the Mexican state to raise tuition, maybe some 15 years ago or so, and there was a national student strike which had a lot of popular support, and the government backed down. Now that's just happened recently in Quebec, on our other border. Go across the ocean: Germany is a rich country. Free tuition. Finland has the highest-ranked education system in the world. Free … virtually free. So I don't think you can give an argument that there are economic necessities behind the incredibly high increase in tuition. I think these are social and economic decisions made by the people who set policy. And [these hikes] are part of, in my view, part of a backlash that developed in the 1970s against the liberatory tendencies of the 1960s. Students became much freer, more open, they were pressing for opposition to the war, for civil rights, women's rights … and the country just got too free. In fact, liberal intellectuals condemned this, called it a “crisis of democracy:” we've got to have more moderation of democracy. They called, literally, for more commitment to indoctrination of the young, their phrase … we have to make sure that the institutions responsible for the indoctrination of the young do their work, so we don't have all this freedom and independence. And many developments took place after that. I don't think we have enough direct documentation to prove causal relations, but you can see what happened. One of the things that happened was controlling students - in fact, controlling students for the rest of their lives, by simply trapping them in debt. That's a very effective technique of control and indoctrination. And I suspect - I can't prove - but I suspect that that's a large part of the reason behind [high tuitions]. Many other parallel things happened. The whole economy changed in significant ways to concentrate power, to undermine workers' rights and freedom. In fact the economist who chaired the Federal Reserve around the Clinton years, Alan Greenspan - St. Alan as he was called then, the great genius of the economics profession who was running the economy, highly honored - he testified proudly before congress that the basis for the great economy that he was running was what he called “growing worker insecurity.” If workers are more insecure, they won't do things, like asking for better wages and better benefits. And that's healthy for the economy from a certain point of view, a point of view that says workers ought to be oppressed and controlled, and that wealth ought to be concentrated in a very few pockets. So yeah, that's a healthy economy, and we need growing worker insecurity, and we need growing student insecurity, for similar reasons. I think all of these things line up together as part of a general reaction - a bipartisan reaction, incidentally - against liberatory tendencies which manifested themselves in the 60s and have continued since.
MS: With the few remaining minutes we have left, I'm wondering if you could leave the students with one thing you'd like to say to them about how they can be successful in the future.
NC: There are plenty of problems in the world today, and students face a number of them, including the ones I mentioned - the joblessness, insecurity and so on. Yet on the other hand, there has been progress. In a lot of respects things are a lot more free and advanced than they were … not many years ago. So many things that were really matters of struggle, in fact even some barely even mentionable, say, in the 1960s, are now … partially resolved. Things like women's rights. Gay rights. Opposition to aggression. Concern for the environment - which is nowhere near where it ought to be, but far beyond the 1960s. These victories for freedom didn't come from gifts from above. They came from people struggling under conditions that are harsher than they are now. There is state repression now. But it doesn't begin to compare with, say, Cointelpro in the 1960s. People that don't know about that ought to read and think to find out. And that leaves lots of opportunities. Students, you know, are relatively privileged as compared with the rest of the population. They are also in a period of their lives where they are relatively free. Well that provides for all sorts of opportunities. In the past, such opportunities have been taken by students who have often been in the forefront of progressive change, and they have many more opportunities now. It's never going to be easy. There's going to be repression. There's going to be backlash. But that's the way society moves forward.

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How to Strip Corporations of Constitutional Rights |
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Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=7118"><span class="small">Carl Gibson, Reader Supported News</span></a>
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Wednesday, 29 May 2013 13:11 |
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Gibson writes: "Corporations aren't people. If they were, Yahoo's recent acquisition of Tumblr would be a violation of the Constitution."
Gibson: 'The concept of corporate personhood goes all the way back to 1886.' (photo: Adbusters)

How to Strip Corporations of Constitutional Rights
By Carl Gibson, Reader Supported News
29 May 13
orporations aren't people. If they were, Yahoo's recent acquisition of Tumblr would be a violation of the Constitution, which states that people are human beings with inherent rights, not commodities to be bought and sold. Even so, corporations are using this undue influence to buy our election process and even supersede all regulatory laws across international borders, like the Trans-Pacific Partnership aims to do. The Move to Amend coalition is fighting to change that.
"This isn't just about elections," said David Cobb, a Move to Amend co-founder and the Green Party's 2004 candidate for president. "This is about getting people to have power over corporations, instead of the other way around."
The concept of corporate personhood goes all the back to 1886, in the Supreme Court's ruling of the Santa Clara County vs. Southern Pacific Railroad case. Chief Justice Morrison Waite ruled that the corporations protesting taxes levied on them by Santa Clara County and the state of California had the same constitutional rights as people under the 14th Amendment. Before that, corporations began simply as a creation of the state, which had a charter to carry out and were dissolved immediately after the completion of the particular project outlined in their charter. Since the 2010 Citizens United vs. FEC ruling, corporations have now been given the same free speech rights as people, and the billions in their treasury is equivalent to political speech.
Move to Amend has since introduced the We the People amendment, which states that corporations do not have constitutional rights, and that corporate money is not political speech. The bill, House Joint Resolution 29, was officially introduced by Rep. Rick Nolan (DFL-Minn.). Over 288,000 people have signed the official petition to add the We the People amendment to the constitution, and state legislatures and city councils across the country have voted in support of a resolution calling for a constitutional amendment to repeal corporate personhood rights and money as speech. You can view a map of Move to Amend resolution progress here.
Citizens are also using hyper-local initiatives to repeal corporations' rights. Sugar Hill, a small New Hampshire town of just 600 people, passed a local ordinance removes all constitutional rights from corporations in order to stop the Northern Pass, a destructive powerline proposal that would destroy protected land. There's a growing movement led by the Community Environmental Legal Defense Fund (CELDF) getting small towns to strip corporate rights to halt environmentally harmful corporate rackets. Corporations could respond by taking each separate case to the state courts to overturn the local ordinances, but if enough small towns passed similar ordinances, they would win in a war of attrition with corporations unwilling to put their money into costly legal battles with municipalities across the country.
The corporate virus has thoroughly infected our state and local governments, and it will take a long-term battle waged by the people in their own communities to win. But with enough willpower, we can strip these corporate "persons" of constitutional rights that only belong to living, breathing, mortal human beings, protect our communities, and control our own destinies. It's up to us to take that power back. Sign Move to Amend's call for a constitutional amendment and go to CELDF's web site to learn more about how to stop corporate environmental destruction in your own community.

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The Abortion Issue Returns |
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Wednesday, 29 May 2013 13:10 |
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Toobin writes: "Before too long - indeed, probably next fall - the Court will have to return to one of its most enduring controversies: abortion."
Members of Planned Parenthood, NARAL Pro-Choice America and more than 20 other organizations hold a rally in support of preventive healthcare and family planning services, including abortion. (photo: Reuters)

The Abortion Issue Returns
By Jeffrey Toobin, The New Yorker
29 May 13
s the Supreme Court's term winds to a close this month, the Justices will be addressing a series of issues that reflect a changing agenda - the country's and their own. There are two major same-sex-marriage cases, a challenge to the Voting Rights Act based on the changing politics of the South, and even a futuristic dispute about the patenting of human genes. But before too long - indeed, probably next fall - the Court will have to return to one of its most enduring controversies: abortion.
The Court may agree to hear one or more abortion cases in its next term. For the most part, these cases have their roots in the Republican landslides in the 2010 midterm elections. At the time, those electoral victories were largely portrayed as being based on economics; the Tea Party was often described as almost libertarian in orientation. But soon after new state legislators took office it became clear that social issues, and especially abortion, were among their highest priorities. In state after state, those Tea Party lawmakers passed new restrictions on abortion, and as the restrictions have taken effect challenges to them have started to work their way through the courts.
According to the Guttmacher Institute, nineteen states passed forty-three new restrictions on abortion in 2012 - on top of ninety-two restrictions passed in 2011. The most recent changes came in Arizona, Kansas, Louisiana, Oklahoma, South Dakota, and Wisconsin. A Guttmacher report states that the restrictions were in four general areas:
- Mandating unnecessary medical procedures. The best known of these practices is requiring an ultrasound before any abortion, so that the woman is compelled to listen to a fetal heartbeat. Eight states now require these ultrasounds.
- Increased regulation of abortion providers. These rules, notably strict in Michigan and Virginia, require abortion providers to have hospital-like facilities, while leaving other, similar outpatient institutions untouched.
- Hospital privileges. Three states - Arizona, Mississippi, and Tennessee - recently added requirements that abortion providers have admitting privileges at local hospitals.
- Limits on later abortions. Louisiana and Arizona have banned abortion after twenty weeks, and other states are weighing similar restrictions. In a law scheduled to go into effect this summer, North Dakota effectively banned abortions after six weeks.
The motivations behind these new laws are not difficult to discern. The ultrasounds are supposed to shock women into giving up their plans for abortion; the regulations are designed to raise costs for abortion clinics and drive them out of business; the hospital-privileges rules are intended to limit the number of doctors who can perform abortions, or eliminate them altogether, especially in states with very few clinics to begin with. (Mississippi has only one.) The rules on later abortions are intended to build on the pro-life movement's earlier success in banning so-called partial-birth abortions.
The question now is whether the Supreme Court will uphold any or all of these rules. Two Supreme Court cases are critical to post-Roe v. Wade abortion-rights jurisprudence. In 1992, in Planned Parenthood of Southeastern Pennsylvania v. Casey, a plurality opinion written jointly by Sandra Day O'Connor, Anthony Kennedy, and David Souter upheld the "central principle" of the 1973 decision in Roe. "It is a rule of law and a component of liberty we cannot renounce," the three Justices wrote. Building on an idea that O'Connor had raised in earlier opinions, the trio said that abortion restrictions would be rejected "only where state regulation imposes an undue burden on a woman's ability" to decide whether to have an abortion. What's an "undue burden"? In 2007, in Gonzales v. Carhart, Kennedy wrote an opinion upholding the federal law against late-term abortions. Reflecting a very different sensibility from his opinion in Casey, Kennedy appeared to give legislators broad latitude to regulate abortion. "The State may use its regulatory power to bar certain procedures and substitute others, all in furtherance of its legitimate interests in regulating the medical profession in order to promote respect for life, including life of the unborn," he wrote. An "undue burden" in 1992 looked very different from an "undue burden" fifteen years later.
The lower courts have generally found that many of the new laws do indeed amount to undue burdens. Earlier this month, the Ninth Circuit Court of Appeals struck down Arizona's new, twenty-week limit on abortions on that ground. Similar legal challenges to the North Dakota law began this month. Last December, the Oklahoma Supreme Court invalidated, as an undue burden, that state's new ultrasound law, which requires placing the image in front of the woman.
But will the Supreme Court agree with the lower courts, or has the definition of an undue burden changed yet again? Kennedy is the only Justice from the team that wrote Casey left on the Court. It seems a safe assumption that Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, and Samuel Alito will approve all the new restrictions, while Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan will reject them. As in 1992 and 2007, the decision will likely turn on Kennedy's views.
Kennedy's views on these specific issues seem difficult to predict, and thus the outcomes of the challenges to these laws are, too. The new cases will reveal whether his drift away from Casey continues, or whether he has a core commitment to abortion rights that the new restrictions will finally run up against. The only certainty is that abortion will soon return to a central place before the Justices, and in the political arena.

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FOCUS | Senators Swoon Over Billionaire Pritzker |
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Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=20877"><span class="small">William Boardman, Reader Supported News</span></a>
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Wednesday, 29 May 2013 11:03 |
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Boardman writes: "In terms of hope and change, for example, what might Pritzker (she goes by her maiden name) portend in light of her public record?"
President Barack Obama announced earlier this month that he will nominate Chicago business executive Penny Pritzker for Commerce Secretary. (photo: Chip Somodevilla/Getty Images)

Senators Swoon Over Billionaire Pritzker
By William Boardman, Reader Supported News
29 May 13
Had she offered them her ring, they would have kissed it
hile the fawning millionaire courtiers who populate the United States Senate fall all over themselves to smooth the way for Chicago billionaire Penny Sue Pritzker Traubert to become the next Secretary of Commerce, one might wonder what the country is getting here. In terms of hope and change, for example, what might Pritzker (she goes by her maiden name) portend in light of her public record?
On May 2, President Obama nominated Pritzker, his formidable fund raiser for more than a decade, to fill the vacancy at the Commerce Department. With an estimated net worth of $1.8 billion, Pritzker, 54, is married to Dr. Bryan Traubert and they have two children, Rose Pritzker Traubert and Donald Pritzker Traubert. Pritzker is a graduate of Harvard College, 1981, and Stanford Law School, 1984.
In the early 1990s, she was on the board of a family-owned bank that was a pioneer in the subprime loan business. The Pritzker family bank, Security Bank in Illinois, was also a pioneer in packaging all-but-worthless loans into all-but-worthless securities that the bank sold to unsuspecting customers. Security Bank failed in 2001, at the time the largest bank failure in a decade. Accused of unsound financial activities and predatory lending, the Pritzkers agreed to pay the U.S. government $460 million in fines (over 15 years) – a settlement in which Pritzker and her bank naturally admitted no wrongdoing.
"It was the right thing for us to do, because both for the depositors and for us as a family," she testified before the Senate Commerce Committee on May 23.
Pritzker filed a financial disclosure statement with the Office of Government Ethics as part of her nomination process. The 184-page document under-reported Pritzker's annual income by $80,000,000. She blamed the $80 million omission on a "clerical error" when she filed a correcting amendment. No senator asked her about this error, perhaps feeling that it was the sort of $80 million omission anyone could make. None of the senators chose to put this omission in perspective by comparison with the $10 million lost by her uninsured bank depositors or with the bank failure's $236 million cost to U.S. taxpayers despite the settlement payment.
Pritzker: "I Feel Very Badly" About My Bank's Shady Practices
In a widely-used sound bite, Pritzker answered a softball question from South Dakota's Republican senator John Thune about her bank by saying: "… I regret the failure of Superior Bank, it's not an outcome or a situation, that I'm, you know, I feel very badly about that. The lessons that I learned are really about good management, good governance structure, the importance of diversification and risk management, transparency and good governance."
The Pritzker fortune, estimated at $19.5 billion, has been in litigation and negotiation for most of the past decade, and Pritzker has been in the thick of it. She is one of the eleven cousins and heirs who have been arguing over whether to preserve the fortune as a single entity or divide it among the cousins. Pritzker was a key negotiator in this argument, and its demands reportedly led her to withdraw from consideration as Commerce Secretary in 2008, when her name was floated as a possibility.
The cousins resolved their inheritance dispute in 2011, by dividing the fortune into eleven shares. Each of their cousins now ranks on the Forbes 400 list of richest Americans, from 159th to 359th (Pritzker is 263rd). Part of the complexity in the distribution of the fortune involved adjusting various off-shore holdings (such as trusts in the Bahamas) that allowed the family to achieve significant tax avoidance. For her efforts in this and other family financial arrangements, Pritzker received a payment of $53 million in 2012.
Forbes Suggests Congress Explore Pritzker Tax Haven Schemes
Writing for Forbes on May 18, Stephane Fitch described some of the intricacies of the Pritzker family finances, at home and abroad:
Congress could finally make public one of the grandest and most successful family tax-avoidance schemes ever – one that exposed some pretty significant blind spots in the laws that govern family trusts. Congress should ask some probing questions. Pritzker's first act as a public servant could be to answer them frankly. A.N. Pritzker set up the family's first offshore trusts 50 years ago, when Penny Pritzker, now 54, was only four. It's clear some of the family's ploys wouldn't be allowed today. But a full explanation of what's been done might illuminate loopholes that remain.
None of the Senate committee members asked Pritzker hard questions about the family's tax havens or what she had done to earn that $53 million. In response to limited senatorial inquiry from Thune, Pritzker got off with saying, "Senator, I am the beneficiary of off-shore family trusts that were set up when I was a little girl. I didn't create them, I don't direct them, I don't control them. I have asked the trustee to remove themselves and appoint a U.S. trustee."
Senator Claire McCaskill, a Missouri Democrat, ignored the long-abandoned tradition of wealthy people serving their government for a token $1 a year. Instead the Senator gushed to Pritzker, who will earn $197,000 a year as Commerce Secretary: "It's pretty obvious you're not coming to this job for a paycheck. You are coming because you desire to serve this country."
Harvard Paper Applauds Pritzker for Giving Back to the Community
In 2006, the Harvard Crimson (Pritzker is on the Harvard Board of Overseers) ran a flattering profile of Pritzker, noting: "Having founded five businesses during her career, Pritzker, along with her family, has continued to give back to the community…. Pritzker says she and her husband, Bryan S. Traubert, are interested in the welfare of children."
The Crimson quotes Pritzker as saying: "I believe the availability of quality public education is the foundation of our democracy. This is something we are extremely passionate about and we have gotten involved with in our community, both with the reform of the Chicago Public School system and the charter school movement."
As a member of the Chicago Board of Education for two years, until March 14, 2013, she exercised little apparent leadership and was not seen as an advocate for the welfare of students or teachers. Her gifts to the schools have mostly been for athletics and athletic fields. She has been a reliable supporter of Mayor Rahm Immanuel, telling him in her resignation letter: "Education is critical to ensuring every child has an opportunity to succeed, and I wholeheartedly support the work that you are doing to improve Chicago schools."
Closing Schools Keeps Them from Getting Any Worse
Chicago has announced the largest school closing in American history, stirring resistance among parents, students, and neighborhoods that stand to lose their schools. The Chicago policy is widely seen as a wedge issue to create lower-cost, publicly funded private schools. Such schools have not built a record of superior performance, but they meet one of the objectives of people like Immanuel and Pritzker – they undermine unions, especially teachers' unions.
As the Chicago Teachers Union financial secretary told the Chicago Tribune: "We know Penny Pritzker has a long and storied history as an anti-labor and anti-worker kind of boss. Her policies adversely affect working families. She has worked to close schools and destabilize neighborhoods, and we hope she does a better job in her new position, if she gets it."
Pritzker's father co-founded the Hyatt Hotel chain. Pritzker sits on the corporate board and holds a $400,000 stake in the company. Hyatt has a long history of anti-labor practices and is currently the target of a union-sponsored global boycott.
A group of Hyatt workers and union supporters were at the Commerce Committee hearing. One of them, a housekeeper at Hyatt Regency Chicago, said: "I am here to just to let everybody know the abuse the workers are under at the Hyatt. I wanted to let everybody know the kind of situation Penny Pritzker puts her employees in."
Lots of Rich People Prefer to Keep a Low Profile
The Harvard Crimson quoted a Pritzker friend describing how hard it had been for Pritzker, managing the family fortune dispute: "I admire her dignity and discretion in handling this by taking the high road. She has largely not engaged in the mudslinging. It is a tragedy for her family that this has happened, because the Pritzker family has always been very private."
What's the tragedy here? Not that they lost their money – because they didn't – but they had to talk about it.
Pritzker's official biography on the Penny Pritzker web site, begins like this:
"With more than 25 years of experience in the real estate, hospitality, senior living, financial services and private equity industries, Ms. Pritzker previously developed such diverse companies as Vi (formerly Classic Residence by Hyatt), a leader in luxury living for older adults, The Parking Spot, a large U.S. network of off-site airport parking facilities, and Centergate Residential, a vertically-integrated, multifamily development, investment and management company."
This is apparently just what America needs now, according to President Obama – someone who has spent her life so far helping the rich get richer.
There Is More Than One Vision for Making America Better
Speaking in quite a different context, author Alice Walker suggested that sometimes a country needs some other kind of woman:
And this is a woman who can teach a lot of us about what it feels like and what it can be like to come face to face with the reality that your country is being not only stolen from you, but trashed, absolutely degraded – you know, your mountains despoiled, your rivers a mess, your children badly educated, if educated at all.
… a guide to see what it's like to actually confront the forces that are literally destroying you, they're destroying your children – horrible food, horrible laws, you know, rich people permitted to own much more than anyone should own of anything, and poor people being continually ground into the dust.
Or as the Wall Street Journal wrote, conveying much the same message, but from a different perspective, "Ms. Pritzker's experience as an investor and businesswoman could help Mr. Obama mend ties with corporate leaders who have bristled at his policies and what they deemed populist rhetoric during his first term.

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