Wednesday, May 26, 2010

Tax Madness

Any suggestion for raising taxes meets howls of resistance, not just from tea partiers in these dark times: states are going bust. Yet, Wall Street financiers pay themselves even fancier bonuses than they did last year, bonuses made possible by taxpayer money.

Financial firms oppose taxing hedge fund managers' income at the rates working people pay. The parallels are striking with the Roman Empire at the tail end of its history. Go to http://www.roman-empire-america-now.com/taxes.html. Roman wealthy didn't pay taxes, and hedge fund traders, some making as much as $1 billion a year, are taxed at a flat 15% rate, while most of us pay between 20% and 39%.

Hedge fund managers have also been part of the Wall Street lobbying onslaught to prevent financial reforms. They scream that regulation will cost profits, when it was their ruthless pursuit of fast profits that nearly destroyed the whole world economy!

NY's Governor Paterson, formerly liberal, has summarily rejected a "billionaire's tax," despite the huge state deficit he's desperately trying to close. And he and the US Congress, refuse to consider a stock transfer tax, a cent or two per share traded, despite the fact that the tax would not only raise very needed revenue (a state tax might make up NY's deficit), it would also discourage the kind of hyper-speculation that led to the near financial collapse.

Wall Street is practically apoplectic at the idea of either tax, and yet, they almost drove us off a financial cliff, and cost the US 15 million jobs it will take many years to replace. Both taxes would discourage the kind of antics that led to the collapse--and raise revenue where it is most needed to continue an economic recovery--for a state budget that otherwise requires drastic cutbacks, laying off even more jobs.

Liberals are scared shitless advocating for any tax, even if they know it would be good policy. Why? Because the right-wing media have whipped up a frenzy about raising any taxes, and Republicans have jumped enthusiastically on board.

The furthest Democrats in Washington dare go, is to let the Bush tax cuts lapse. Republicans scream, that's a tax increase! It is, but only for taxpayers earning over $250,000 a year. I'd be very comfortable on half of that: most people will never come close to it.

Does nobody remember? In the Eisenhower years, top tax brackets paid over 90% above a cutoff, but the 1950's were booming, and we weren't fighting two wars. Historically, more highly graduated tax rates correlate with higher growth as well as with greater economic equality, despite conservative economic theory to the contrary.

The hype about "raising" taxes is madness; raising rates on the higher brackets would reduce US inequality (worst among developed nations)--and restore the economy. Will that happen? Only if liberals find some cojones.

Monday, May 17, 2010

Politics, Economy: Does Anything Work?

The bank bailout and stimulus package worked--up to a point. While the former did rescue the banks, and the latter spared us the depths of the Great Depression, neither has "fixed" the economy.

The big banks made money, but mostly on speculation with the cheap (almost free) bailout money, but they haven't been lending enough to genuinely rescue the economy. In fact, there is a real danger that bank speculation could trigger a worse financial collapse, unless Congress passes laws empowering government to regulate the whole financial industry. Because of widespread American distrust of government, however, and because of intense bank lobbying, re-regulation of the finance industry is difficult to get through Congress (banks were much more regulated before the wave of deregulation that began with Carter and Reagan, and continued through Clinton and Bush administrations).

Further, the stimulus was too little. While some millions of jobs were saved, and something less than that were created, the number of jobs lost, and the number of jobs needed is far larger, so the stimulus limited the damage, but didn't go far enough. The stimulus also saved the housing market from collapse: it is slowly recovering, but many are still losing their homes to foreclosure, many of those due to job losses, many others because house values plummeted and mortgage holders were left "underwater," owing more than their houses were worth.

No wonder people are unhappy and grasp for "solutions," like the Tea Party movement. Ironically, the solutions offered: abolishing the Fed, going back to the gold standard, free marketeering, abolishing regulations already in place, would make things worse.

The gold standard would drastically reduce the money supply, which would destroy more jobs; further deregulation would permit more speculation by the banks, which may be why the tea party is so well-funded, but it would further reduce the money available for job creation. And budget-balancing would subtract still more.

The real problem (Dollars and Sense: May-June, 2010), is that the whole global trading and financial system is seriously out of whack: the dollar no longer works as the world's reserve currency, which requires the US as importer of last resort, a high dollar, imports of goods, exports of dollars and the destruction of US manufacturing. This creates huge trade deficits, consumer debt, high finance and high unemployment.

What is needed: regulate finance and reduce its importance, revive manufacturing (especially to combat climate change), an active government in the economy, a low dollar, not a high one, and a new international reserve unit to replace the dollar.

This might end America's imperial hegemony, but we've already gotten to the point where we can't afford it; it has destroyed the US economy. The jobs we most succeed in creating, wreak destruction world-wide. We'd be much better off as "just another country." Otherwise, we might end like the Assyrian Empire: brilliant, brutal and short.

Thursday, May 13, 2010

Deficits You Can Hate or Love

There has been an almost unending stream of propaganda and false news about the horrendous deficits the US and now the EC are facing. Britons just tossed out its Labour government partly because of the hype about its deficit. The EC just went through a process for bailing out Greece (and potentially other nations) because of its large deficit. Right-wing media thumps out a drumbeat about the deficit in the US, and may win control of Congress in November, if people don't realize all the holes in their argument.

They argue that families can't borrow their way out of trouble, so the nation can't either. But families do borrow: when they take out loans to finish college or undergo training, for example. Both cases will enhance their ability to pay back the loan. On the other hand, to borrow in order to maintain a lifestyle beyond their income is unsustainable, whether it's to buy a house they can't afford, or to go out to dinner five days a week.

The same is true of governments. Greece's debt was unsustainable, because it was supporting a lifestyle, was not enriching the nation, and was not being paid for by the people with money: the wealthy, who avoid taxes.

The deficits in the US, insofar as they are paying for jobs protected, or jobs created, are investments in the future, and enable the recipients, and others downstream to pay back the money with interest as taxes they would not otherwise have been able to pay. Deficit spending to fund alternative energy, or highway construction and repair, are also investments in the future. They do not impoverish the nation: they enrich it.

On the other hand, deficits spent on wars that do not involve national survival, but instead are for imperial expansion (Iraq, Afghanistan), are like borrowing so that you can eat out every day of the week: the nation is impoverished by them in the long run.

US debt, while large in absolute numbers, is smaller, relative to the size of the economy (GDP) than most developed nations. But the deficit and debt hide both productive investment and wasteful consumption. The two ought to be separated and the latter should be cut to the bone, the former boosted to truly stimulate the economy.

The deficit we should be most concerned about is not mentioned much: it is the trade deficit. We buy more abroad than we sell abroad, in part because large corporations export jobs. That international debt comes back as speculation, boosting the stock market artificially; it does not employ more than the few thousands on Wall Street, but it impoverishes the nation.

So, cut war spending, boost job creation and stop outsourcing jobs. Then deficits become investments and the nation will become wealthier, instead of the Empire going bankrupt.

Wednesday, May 12, 2010

Russian Roulette in the Gulf

Some people have likened the oil mess in the gulf to a "gusher." Since any 'leak' at 5000 feet down is going to be under tremendous pressure, and near freezing temperatures, it's a bit like opening a bottle of champagne, except no one is celebrating, and we don't know how big that bottle could be--and it's definitely not champagne.

In fact, our whole vocabulary for describing what has happened with the oil well explosion has so far proven inadequate. It's not a 'spill', and it's not a 'leak'; it could be a 'gusher', or it could be something else. The gulf oil catastrophe is not a spill, because spill implies a container that tips a bit, and slops a bit over the side. It's not a leak, because leaks imply a bit oozing out, but not the amount in question: more than 200,000 barrels of oil a day are flooding out of these holes in the ocean floor and have been now for 22 days, for a likely total of at least four and a half million barrels of oil!

Offshore drillers grumble and moan about new regulations this catastrophe will cause; the Obama administration holds off on new oil leases and talks about new regulations and administrative restructuring to prevent a re-occurrence. Some coastal state Senators propose reinstituting some kind of ban on offshore drilling, while others, and their conservative competitors, continue to promote offshore drilling as a way to "wean" ourselves from foreign oil.

Another way to look at this, however, is that the risks are just too high. That explosion in the Gulf may have been like opening a tap on an oil reserve that could poison not just marshes, crab and shrimp beds and beaches in the Gulf, but the whole world's ocean ecosystem: it's all connected, after all, by the Gulf Stream and the Loop Current.

I hope BP, et al, can plug the holes, stop the gusher, but how many times must we risk global catastrophe before we stop? If you think of that exploded oil well as blowing the cap on an underwater sea of oil, under 5000 feet of pressure, then to do this again and again, even with all the safeguards in the world, is like playing Russian roulette not just with the future of humanity, but with the future of most life on this planet. The costs are just too high.

If we don't want to go the way not of the Roman Empire but of the dinosaurs, we need to take this as a wake up call: build renewable energy sources now through a crash program that would make the Marshall Plan and even our WWII mobilization look like peanuts.

Drilling offshore as a "transitional" program is just plain crazy! We have to get off fossil fuels NOW!

Monday, May 10, 2010

The Afghan War and US Politics

Karzai, Afghan President, wants to open negotiations with the Taliban, even with Mullah Omar.

Until now, the administration has said that it has to stay in Afghanistan and beat up the Taliban before we (or Afghans) can talk. Yet, Obama insists he will start removing troops next year. Either we are fighting for the Afghans or we're fighting against them: a majority of Afghans want peace talks, according to the latest polls.

Karzai is visiting Washington this week. In fact, a good part of his cabinet has come with him.

Last I checked, a majority of Americans felt that Afghanistan was not a fight worth fighting (about 52%). Further, the latest attempted NY bombing came out of Pakistan, not Afghanistan. The precipitating factor in that attack probably was Obama's intensified drone war in Pakistan.

Obama has had trouble maintaining his popularity in the face of right-wing media attacks, and a signal to the elected government of Afghanistan to go ahead and negotiate, might drive the right wing crazy. However, despite Fox's attempt to spin it as "weakness," peace negotiations would be popular.

It wouldn't be popular with the generals. McChrystal might hate it, and Gates might have to hold his nose (or resign, not a bad thing). But Obama should consider: Democrats, in the run up to the Congressional elections could run on: a recovering economy and negotiations leading to withdrawal from Afghanistan.

Democrats could also push the Feingold-Kaufman amendment (again), to facilitate breaking up the big banks. Then they could run on: Peace, recovery and fixing Wall Street. Let the Republicans run against all that!

In any case, now is a golden opportunity to seize the populist initiative temporarily lost to the Tea Party crowd, by coming down on the side of peace in Afghanistan.

Why not? If the administration continues to lean on Karzai to forego top-level negotiations, then we should all know who is really in control here: it isn't Obama, and it isn't the Democratic majority in Congress, either. It's the Imperial caucus: the generals, the defense industry fattening on the wars, and the right wing media machine that hypes them.

Think about it, President Obama! You won election by being against the war in Iraq, and polls show a majority of Americans against the Afghan war. Your support has slipped with your base, partly because of that war. Your support among independents has slipped because of the emotional attacks on "government takeovers" by the right-wing media.

Yet, you can legitimately claim you saved the economy through your actions. What you and Democrats can't claim, yet, is that you have brought peace. Your base will be lukewarm until you can.

Tell Karzai, "Okay. Negotiate." Then hype it and see your poll numbers surge. And the chances for Democrats in the Fall would improve as well.

So, is it Empire, or electing a Democratic Congress?

Friday, May 7, 2010

An Anniversary We Should Learn From

What Dien Bien Phu meant, and what it means today.

The French air fortress established there to interdict supplies coming to the Vietminh through Laos, fell on May 7, 1954, after a protracted battle. It was a terrible defeat for the French, and not only mobilized the Vietnamese, but empowered those in France, who had campaigned to end the Indochina war.

The French withdrew from all of Indochina within a year, and although the US attempted to take up the slack in South Vietnam, well, we know the outcome. The significance of Dien Bien Phu is similar to the battle of Adrianople, in which Germanic (barbarian) cavalry overran the Roman army, and captured the ruling Emperor in 378. Colonial empires continued after 1954, and (in the American variant) do to this day, and the Roman Empire lasted for another 98 years in the West, after Adrianople. But both battles demonstrated that new powers were in the ascendancy, and the old were in retreat.

We still are.

In 476, a whole new order, less civilized, less technologically advanced, but more warlike, took formal control of all of Western Europe. After 1954, the French, British, Dutch, Belgians and Portuguese were slowly driven out of their "possessions," and the US attempted to take their place--in Vietnam, especially, and also, tragically, in the Middle East, in Iran.

Afghanistan could create another Dien Bien Phu, if we don't recognize that 'non-western' peoples will control their own fates, even if they have to overcome the incredible barbarism of some of their leaders, like Jalaluddin Haqqani and Mullah Omar.

We may not like what the Taliban stands for--extreme male chauvinism, brutality, fundamentalist Islam--but even if many Afghans hate the Taliban, they are a significant native force in their nation. The NATO and US forces are foreign. We are invaders, perhaps attempting to create a more humane Afghan society, but the inescapable fact is: we are foreigners. Many Afghans, even those who vehemently oppose the Taliban, fear that the US really wants to control their country, which resisted Imperial rule during the whole colonial era. Tragically, they may be at least partially right. American leaders want a "friendly" Afghanistan, meaning one that will bend to American interests.

The US cannot control the world, any more than the French could control Indochina, or the Romans could continue to control all of Europe.

It is because of America's attempt to maintain--and even expand--world hegemony (creating a new Africom, for example), that draws extremists to attack us as in 9/11, and as in the recent Times Square attempt.

The colonial era died at Dien Bien Phu. US imperialism has been attempting to ignore that ever since.

Tuesday, May 4, 2010

Arizona, Global Warming and 2 Billion Headed North

What does immigration have to do with US foreign policy?

Why do illegal immigrants have a moral right to work in this country?

The Arizona law is outrageous, but not entirely so. Its justification is ineffective enforcement of immigration laws by the Feds, which in turn is due to the insupportable nature of the laws themselves.

Immigration, especially of the illegal variety, is caused by US imperial policies. With NAFTA, CAFTA and "anti-Communist," "anti-terrorist" or drug war policies, the US is massively involved in destroying jobs in other countries.

When the US insists that large US agribusiness can export subsidized corn to Mexico, for example, it causes massive displacement of campesinos from their farms. This displacement was intended to create cheap labor for the maquiladoras near the border, but not enough jobs were created. The excess jobless have nowhere to go but to el Norte.

When the US helped local elites stave off or drive out democratic governments in Guatemala, El Salvador, Nicaragua and most recently, Honduras, something very similar occurred: the repressed and displaced have nowhere to go but el Norte.

When the US wages wars in Iraq, Afghanistan, Pakistan or Yemen, it creates huge disruption--and large numbers of refugees. The only reason we don't see more of them is distance.

When the US and other "advanced" nations do too little and too late to address climate change, disproportionately caused by us, but disproportionally affecting less developed nations, we will see even more massive dislocation of populations. If the monsoon rains fail because of climate change (there is good reason to expect this will happen) then large parts of South Asia, Southeast Asia, south China and Africa will be unable to support their huge populations.

Where will these "climate refugees" go? Two billion people or more could be headed north, to Europe, Canada, Russia and the US. And the reason would be the failure of the above "developed" nations to come up with a climate change treaty that would alleviate or reverse climate change: climate change they largely caused with two centuries of industrial development!

If climate change was largely caused by us (and Europe), and if its worst effects are felt in places like India and Bolivia, doesn't that make us morally responsible?

This is why the poor, developing nations demand "reparations:" to alleviate the effects of runaway climate change, and to respond to it, despite their own poverty--exacerbated by developed nation policies (led by the US and its corporate elites).

We should stop fooling ourselves: our imperial meddling creates illegal immigration. Two billion more could surge north, because of our inability to deal adequately with climate change. It would be like the Age of Migrations, which brought down the Roman Empire.

The corporations, which profit so handsomely from our imperial policies, should be taxed to fund developing nations' reparations.

Saturday, May 1, 2010

May-day, May-day!

It's the first of May, and oil is spewing out of more than one hole at the bottom of the ocean, a manmade disaster that will only get worse--and still Obama insists that we should expand offshore drilling!

At least the Democratic Senators from Florida and New Jersey are sponsoring a bill to prevent test drilling off both the Gulf and Atlantic Coasts, the areas opened up for exploration by the President.

Here in the Hudson Valley, I'm close to the land, and I know the climate is getting screwed. We hold a 'bringing in the May' celebration of May eve each year. One of our rituals involves bringing in locally blooming flowers and blossoming boughs. Each year until now, we've brought in loads of forsythia, shadblow, wild apple, quince and daffodils. This year there were some daffodils, but most had passed; there was one apple tree still with blossoms, no quince and no forsythia, except with flowers already dried up. Until now, the height of the apple blossoms (this is still apple orchard country), was mid-May, when the dogwood also blossoms. This year, most of our flowering boughs were dogwood, not quite past. Further, the maples have mostly leafed out already, something that isn't supposed to happen for another two to three weeks!

It's a beautiful Spring, but knowing how much the climate has changed does put a damper on our appreciation of the season's beauty. And now, on May 1st, it's going to be in the 80's! The temperature might not set a record, but it's warmer than it used to be.

We've had two manmade disasters in the last two weeks: the mine explosion and the undersea well explosion. We should sit up and take notice. One involves coal, the other oil. Fossil fuels: the same fuels that are doing most of the damage to our climate.

The oil companies will continue to pour millions into lobbying and campaign funds, the coal companies likewise. It seems as if they're even paying off the President if he can say with a straight face that "safeguards" will somehow insure against future disasters, or that "clean coal technology" will be effective in combating the global warming effects of burning coal.

So, it's up to us. First of all, we need to insist: no offshore drilling, period and no new coal-fired power plants.

We, individually, can use significantly less energy and burn less oil and coal (or none at all), but government action is needed to ramp up alternative sources, especially wind and solar and to support electric cars.

Obama's resolve to continue with offshore oil-drilling is not promising. Nor is the Kerry-Leiberman-Graham climate bill, even if Graham returns as co-sponsor. Our political system seems incapable of making rational policy.

Soon, we'll celebrate Spring in February--with a couple billion climate refugees.

Maybe the Empire will fall first.