Colombia : Cocaine, Corruption and the U.S. Army

Posted on December 7, 2009 by Thorne Dreyer

Image from The Latin Americanist.

The U.S. and the Colombian invasion:
A history of corruption, cocaine, and paramilitary violence

By Marion Delgado / The Rag Blog / December 7, 2009

CARTAGENA DE INDIES, Colombia — Well, kids, answering our own question from last week, it turns out that there is corruption within the Colombian military!

It’s not just the shake-downs, rip-offs, and small time bribery that are so much a part of daily life throughout the third world; in Colombia there is big time corruption, much of it encouraged and supported by U.S. government departments and agencies using your tax dollars. In some cases one part of the U.S. government pays to support one “side” and another agency pays their opponents. All’s fair in corruption as long as the goal is to get your money into the pockets of one or another “official.”

I want to focus on two types of military corruption this week. One involves cocaine production and transportation. You had to kind of know about this already, just by walking down to the corner or calling your favorite delivery service to get your share of the high quality “Cartagena marching powder” that has been in uninterrupted, steady supply since the early 80’s.

The other type is more esoteric and you might only be aware of it if you are very familiar with the civil war that’s been going on here for at least four decades, with roots that can be traced back to 1948 — or even earlier — if one studies Colombian political history.

First: cocaine, corruption and cartels
(They are not who you think they are.)

“Cocaine smugglers have infiltrated senior levels of the Colombian army, impeding efforts at fighting drugs,” Defense Minister Juan Manuel Santos has said. The country’s cocaine cartels have bribed officials “at a high level” into sharing information that has helped bosses of these illegal groups avoid capture, Santos told reporters. Colombia remains the world’s biggest exporter of cocaine, despite billions of dollars in mostly military aid from Washington aimed at stamping out the trade. “Unfortunately, the infiltration has impeded us from capturing some of the big fish we had been investigating,” Santos added. D’oh!

Implicated in the latest scandal is Diego Montoya Sanchez, aka “Don Diego,” head of the Norte del Valle cartel, accused of exporting hundreds of tons of cocaine to the United States. U.S. nose candy consumption is estimated at between 500 and 1500 tons a year, depending on which government figures are used. (For a better estimate, add up your own yearly use and multiply by 60 million.)

Investigators say Montoya recruited army officers to provide him with protection and help plan the breakout of his brother, Eugenio Montoya, who has been in a high-security prison since early in 2009.

Last year, 10 anti-narcotics police, specially trained with your money, were gunned down by Colombian soldiers supported by your money and also in the pay of drug traffickers, near the western town of Jamundi, prosecutors charge.

On August 26, 2007, Colombian media reported that members of the Norte del Valle cartel had been bribing military and police units to deactivate radar units to allow the gang to ship marijuana and cocaine from Colombia. The newspaper El Tiempo reported that the Colombian Navy had been the most infiltrated through bribes ordered by Diego Montoya and his henchmen.

The newspapers also revealed the possible involvement of the top Admiral of the Colombian Navy, Gabriel Arango Bacci, who used his influence to support drug cartels. Documents found by Colombian authorities in the possession of a smuggler known only as “Lord of the Horseshoe,” and bearing his “mark,” or logo, also had the personal classification stamp of the Admiral. The Admiral’s fingerprint was found on a receipt bearing the same logo and attesting to the transfer of $115,000 dollars from the “Lord” to the Admiral. Two other Admirals and several other high-ranking naval officers have recently been arrested in the scandal. The classified documents were flight routes to be used by the Norte del Valle Cartel on both the Pacific Ocean and Caribbean Sea coasts, through Ecuador, Panama, Colombia, and Venezuela.

This past Thursday, December 3, the Colombian Supreme Court found retired Admiral Arango innocent on appeal of ties to the paramilitary and drug traffickers, due to a lack of evidence. The Court ordered the Prosecutor General to investigate the alleged false testimony supplied by witnesses in the case. Former Defense Minister Juan Manuel Santos and current Navy Commander Guillermo Barrera are among witnesses that will be investigated.

In 2008, military tribunals found Bacci guilty of receiving U.S. $115,000 for selling the coordinates of Navy patrols to drug traffickers, so the traffickers could avoid authorities and get their drugs out of Colombia safely. Bacci requested a civil hearing before the Supreme Court.

The Supreme Court reprimanded the U.S. Ambassador to Colombia William Brownfield in November for what they termed “undue interference” in the case, after Brownfield announced that there was clear evidence linking the retired Admiral to drug traffickers. The Supreme Court said Brownfield had no jurisdiction to comment on matters of civil justice.

Arango Bacci maintains his innocence and says he is the victim of a plot to discredit him.

Montoya Sanchez (Don Diego) was captured on September 10, 2007, by Colombian authorities in a rural area of the municipality of Zarzal in Valle del Cauca state. He was accompanied by his mother and some 17 other close relatives.

On May 19, 2008, Carlos Holguin, a former Colombian Interior Minister and Justice Minister, announced that “Don Diego,” together with some prominent paramilitary leaders, would be extradited to the United States. The extradition would take place in “the coming few days”, said the Minister.

Seven months later, on December 12, 2008, Montoya was finally taken to Miami on a D.E.A. helicopter. He appeared in court on December 15, facing 12 charges including drug trafficking, obstruction of justice, money-laundering, and murder.

The North Valley cartel is believed by some to be the most powerful and violent drug trafficking organization in Colombia. The cartel reportedly relies heavily for protection on illegal armed groups, from right-wing paramilitaries to leftist rebels.

On October 21, 2009, a federal judge sentenced Montoya to 45 years in prison. Approving the sentence, Judge Cecilia Altonaga also ordered Montoya to pay $500,000 in restitution to the family of Jhon Jairo Garcia, a long-time associate of Montoya who was kidnapped, tortured and murdered by the cartel in 2003. The prosecution had said Montoya ordered the killing of Garcia after accusing him of becoming an informer for U.S. enforcement agencies. Mr. Garcia’s dismembered body was found in a river near the Colombian city of Cali.

Rather than regale you with a litany of examples of the cocaine corruption in the Colombian military. I’ve concentrated on the Montoya case because it shows the breadth of it all — and that the corruption goes to the top echelons of the military.

Not only were the brass corrupted, but bribes were paid to the right-wing Autodefensas Unidas de Colombia or AUC (United Self-Defense Groups of Colombia) and the left-wing Fuerzas Armadas Revolucionarias de Colombia — Ejército del Pueblo, (FARC or FARC-EP; Revolutionary Armed Forces of Colombia — Peoples Army.)

Erythroxylum coca, Koehler’s Medicinal-Plants 1887. From Koehler Images / Wikipedia.

Too much trouble over this plant — just legalize it already.

Corruption related to the white powder known as “girl” on the streets of Detroit isn’t limited to the Colombian military. The “hidden hand” of greed has also grabbed U.S. servicemen and officers by the balls.

When a fishing boat used to smuggle cocaine was intercepted in January 2006 by the Colombian coast guard, in a region Admiral Arango oversaw, investigators found navigational charts on board that showed not only the positions of U.S. vessels, but also those of warships from Britain, the Netherlands, and Colombia.

Colombia doesn’t track U.S., British, or Dutch vessels, leaving open the possibility that there may also be a leak from U.S. anti-drug intelligence sources. The U.S. Embassy in Bogotá wouldn’t discuss the case or say whether it was investigating.

At U.S. Southern Command in Florida, American headquarters for U.S. military operations in Latin America, a spokesman said the military was unaware of any investigation into the allegations. The spokesman, Jose Ruiz, said security measures were tight at an interagency anti-drug task force in Key West, FL, that coordinates anti-drug monitoring in the Caribbean for the United States and its allies, including Colombia. The Joint Interagency Task Force-South (JIATF-S), run by the Defense Department, “has very stringent and effective security measures,” Ruiz said, “and as of today, we have no reason to believe that [they] have been compromised.”

Four U.S. soldiers serving on anti-narcotics missions in Colombia are being held on charges of drug trafficking after the discovery of 35 pounds (15 kg) of cocaine on a military aircraft. The four, who haven’t yet been publicly identified, were arrested at the end of March when their plane landed in Texas after taking off from southern Colombia. A fifth man was released. (Snitch?) Colombian authorities are investigating to see if other members of the U.S. or Colombian military were involved.

William Wood, the former U.S. ambassador in Bogotá, said the four would not be extradited even if it was proved they had committed crimes on Colombian soil. He said a three-decade old agreement gave immunity to U.S. soldiers serving in Colombia, but stressed, “We do not tolerate corruption.” lol

The four busted soldiers are among about 1,000 U.S. military and private contractors in Colombia, providing training, supplying intelligence, and helping run aerial spraying, or “fumigation” missions, (actually airborne herbicide dispersal of glyphosate, known as Roundup® in the U.S.).

Colombian cop walks on packages of cocaine in Buenaventura in March, 2009. Colombian police had seized 3.5 tons of cocaine in a container of vegetable grease bound for Mexico. Photo by Fernando Vergara / AP.

And in the U.S. Officer Corps…

The case of Colonel James Hiett, former commander of U.S. Army anti-drug advisors in Colombia, found guilty of covering up his wife’s drug smuggling, is an international embarrassment to the United States. Its outlines have been widely reported. In the mid-1990s, while Hiett was stationed in the U.S., his wife, Laurie Ann Hiett, was treated in an Army hospital for drug addiction.

Later, Hiett was named to head a 200-strong battalion of U.S. military advisors in Bogotá. (WTF?) The couple went — though Laurie had lapsed back into “addiction,” even snorting coke in front of her husband. Soon she was buying cocaine through her Army-employed Colombian driver. By 1998 she was under investigation by the Army, not only for using drugs, but for shipping $700,000 worth of powder, wrapped in brown paper, to the States in diplomatic mail.

She handed some of the cash proceeds, collected on trips to New York, to her husband — who proceeded to carefully spend the wad on household bills, to “dissipate,” in his own words, ”the money trail.” Laurie Hiett pleaded guilty to smuggling and was sentenced to five years in federal prison. The Colonel was dropped from Army personnel rolls and will lose his pension. A federal judge sentenced him to five months in prison, five months home arrest and one year of probation.

Hiett’s corruption itself isn’t necessarily unusual. Former U.S. Ambassador to El Salvador and Paraguay Robert White told Salon‘s Jeff Stein, “There’s always been a fear of this by sensible people in the Pentagon. The legend is that the United States military is incorruptible, but that has proven not to be the case. There are quite a few instances.”

With the addition of thousands more U.S. troops, officers, and civilian mercenaries to the cesspool of cocaine corruption, there are sure to be more instances. Remembering the Iran/Contra coke-for-guns trades of the past, we can only hope for cheaper “Contra coke” in the future, to help the U.S. through the tough economic times of today!

Corruption of another kind, more deadly to our troops

Rebels from the FARC obtained reports about Army operations against guerrilla commanders in the far south, officials say. So far, two lieutenant colonels in the army have been arrested, as have four majors and a noncommissioned officer — for supplying the info.

The episodes, some of which have been outlined in the Colombian press in the past month, represent the most serious cases of infiltration in recent years and are a blow to a military that depends on U.S. funds and training. The U.S. has provided $5.4 billion in mostly military aid to Colombia this decade, making the country the biggest recipient of American support outside of the Middle East.

In interviews, Defense Minister Juan Manuel Santos and the commanders of the armed forces said that the breaches were discovered by military counterintelligence operatives and the evidence was turned over to the attorney general’s office, which has opened several investigations. While other cases of infiltration have been discovered in the past, officials suggested that those cases were often not investigated properly.

“From the beginning, I’ve said we have to see how penetrated we are,” said Santos, a civilian who headed the Defense Ministry for 3 years. “The situation is a penetration of some sectors of the military forces, and it’s a small percentage of the forces. We cannot say it’s generalized.”

Selling military information to FARC or ELN is nothing new, it has been going on forever, with each new revelation always described as the “most serious” and the disclaimer that only a small minority is involved, much like stories of police corruption in the U.S. that always add, “most of the force is honest.”

Santos added that he has sacked about 150 officers during his tenure, many of whom were suspected of corruption or ties to illegal armed groups. He said investigators are continuing to search for moles in the ministry.

More disconcerting is the military web of corruption that leads directly to AUC.

A short history of AUC

Colombia has a long history of privately financed self-defense groups, usually suffused with their wealthy patrons’ right-wing beliefs. These groups’ numbers began to grow rapidly in the 1980s. The growth coincided with the advent of Colombia’s drug trade. Newly wealthy drug traffickers laundered their profits by buying up as much as 2.5 million acres in northern Colombia. These new landholders put together private armies to deal with the guerrillas who kidnapped and extorted wealthy ranchers in the area. One of the first, and most feared, was a group calling itself “Death to Kidnappers” (Muerte a Secuestradores, or MAS), active in the Magdalena Medio region of north-central Colombia.

With funding from drug traffickers and other large landholders, and close and open collaboration with Colombia’s armed forces, such paramilitaries gained strength throughout the 1980s. Their tactics — selective assassinations and forced disappearances, massacres, forced displacement of entire populations — quickly made them one of the country’s main human rights abusers. They also played a strong role in the decimation of the Patriotic Union political party.

The abuses of groups like MAS caused paramilitaries to be declared illegal in 1989. Little was done to disband them, though. Human rights groups have documented widespread post-1989 collaboration between Colombia’s armed forces and paramilitary groups.

In the early 1990s the United Self-Defense Forces of Córdoba and Urabá (ACCU), a group headed by brothers Carlos and Fidel Castaño, emerged in northwestern Colombia. Using extreme brutality toward civilian populations, the group grew to be a powerful player in the northern regions of Colombia. Fidel Castaño was probably killed by guerrillas in 1995.

By 1997, Carlos Castaño had organized the ACCU and several other paramilitary groups throughout the country into a national structure, the AUC. The group grew rapidly, from perhaps 4,000 members in 1998 to a reported 13,000 in 2002. By the time its last declared members demobilized in 2006, however, their number had reached about 32,000.

The AUC was more of a loose, fluid confederation than a unified structure. It even dissolved momentarily in 2002, when Carlos Castaño briefly resigned from the leadership because “everyone does as he wishes.” Divisions within the group over links to the drug trade worsened during the early 2000s, exacerbated by the U.S. Justice Department’s requests to extradite AUC leaders for narcotrafficking and the State Department’s inclusion of the AUC on its list of international terrorist groups.

At the same time, a new wave of individuals with long histories as narcotraffickers began entering AUC’s top leadership. Leaders like Diego Fernando Murillo (“Don Berna“), Victor Manuel Mejia (“El Mellizo“), and Francisco Javier Zuluaga (“Gordolindo“) moved from Colombia’s drug underworld to commanding key paramilitary blocs.

After several years of divisions, including increasing incidents of combat between groups (particularly in Magdalena and Casanare), the interests that had funded AUC became more adequately represented by blocs than by one singular banner. Several prominent paramilitary leaders died at the hands of fellow paramilitaries in 2004: Carlos Castaño in April, “Rodrigo 00” of the now-defunct Metro Bloc in June, and Miguel Arroyave of the Centauros Bloc in September.

After Carlos Castaño, the most publicly recognized leader of the AUC was Salvatore Mancuso. A former Córdoba rancher, Mancuso became the “Maximum Comandante” of the AUC and chief negotiator in Santa Fe de Ralito. Mancuso was the first top AUC leader to testify under the Justice and Peace Law.

Corruption, AUC, and the U.S. Army

In May 2005 Colombian authorities arrested Lieutenant Colonel Alan Norman Tanquary and Sergeant Jose Hernandez, of the United States Army, for illegally trafficking weapons and ammunition. The arms — according to press reports, were more than 30,000 “projectiles” that were found in the house where the two were arrested — were almost certainly meant for sale to paramilitary groups, the right-wing death squads that terrorize Colombia’s people.

(Tanquary was reported to be a Lieutenant Colonel by Colombia’s RCN radio shortly after the arrest. U.S. media have since identified him as an Army Warrant Officer. We don’t know if he was a Lt. Colonel or a Warrant Officer because he was never tried, in Colombia or in the U.S.)

The U.S. Embassy and its bosses back home have kicked into damage control mode, and are trying to sweep this one under the rug. And so far, the U.S. media isn’t doing much to stop them. U.S. soldiers in Colombia supposedly have two goals — to combat production of cocaine, and help end the 40-year-old civil war. In 2005, five U.S. soldiers were caught smuggling coke back to the United States, and now more soldiers, one of them a Lieutenant Colonel, no less, have been found helping and profiting from the most brutal force in the hemisphere.

The U.S. often justifies its aid (nearly $800 million this year) to a military known to collaborate and work closely with paramilitary groups by saying it is helping the Uribe government clean up the army; like the U.S. presence there is a magical cure for corruption and human rights abuses. Such fantasies may not survive many more incidents like this one.

Some questions

How did the American troops manage to strike these deals? It’s not as though U.S. soldiers in Colombia are being pursued by members of the paramilitaries pestering them to run drugs and arms for them. This money-making opportunity will only knock if someone else first makes the introduction. Who, then, is helping corrupt Americans link up with their paramilitary customers? What bridges the two degrees of separation?

Could it be that Colombian military personnel, members of U.S.-aided units that have supposedly severed their ties with the paramilitaries, help facilitate contacts with “friends” among the local paramilitaries?

Had the paramilitaries involved bought bullets from U.S. soldiers in the past? At what level of the AUC, which spreads terror throughout the country, were these deals struck?

For eight years, George Bush prattled on with his Big Lie, unsupported by any evidence, that Venezuela’s arms purchases could “end up in the hands of the FARC,” while his own soldiers were caught red-handed arming Colombia’s worst perpetrators of political violence.

What about Obama, and Hillary, and Secretary of War Gates: are they ashamed to be part of Colombia’s terrible record on human rights? Apparently not. Republicans are now urging Obama to sign a new “free trade” agreement with Colombia to go along with the already-signed Military Pact. Will he do it? You bet your sweet ass he will. I’m disgusted; anyone want to join me?

Next week: We tie it all together. The cocaine, corruption, the violations of human rights, the chain-saw massacres, the disappeared citizens, the death squads, and your tax dollars in their Swiss bank accounts, and lay it at the doorstep of the highest level of the Colombian government. Mr. Big will be revealed.

Rare frog from Pangan Nature Reserve in the Chocó Biogeographic Region, a giant rain forest that is home to the Malaga Naval Base.

Know your new military bases

This week, get to know your new military base in Magdalena on the beautiful Colombian Pacific coast.

The region where Bahia Malaga lies is known to conservation experts as the Chocó Biogeographic Region. It is a tropical rainforest larger than Costa Rica (second only to the Amazon in size at 71,000 sq. km), extending from the state of Darien in Panama to Esmeraldas in Ecuador along the entire Pacific coast of Colombia, flanked between the western slopes of the Andes and the Pacific Ocean. The area is virtually sealed off from the rest of the country. This isolation, combined with the institutional weakness of the Colombian government, has discouraged development along the coast.

From 20-50% of all plants and animals in the Chocó are not found anywhere else in the world. Thus there is a fantastic variety of unique flora and fauna. Numerous species have limited distribution within the area, creating great “beta” diversity, or variations from one locality to another. Most plants and animals of Chocó are yet to be discovered! Approximately 3,500 species of plants are known to exist here, and scientists predict as many as 6500 await identification, 25% of them unique to the area.

Chocó contains one of the last pristine stretches of coastline in tropical America, a rest stop for migratory humpback whales and a feeding, wintering, and stopover site for millions of migratory shorebirds. Mangrove forests protect the coast from erosion and provide a nursery for young fish in its nutrient-rich waters. The region’s marine area is home to an abundance of fish species and marine mammals.

Bahia Malaga Naval Base, 50 km north of Buenaventura was the first project begun by the state in the area. An access road to the base now brings traffic, pollution, and new settlers to the area and has increased the likelihood that a second major port will be established in this once-pristine bay, In addition of course to the new U.S. naval base being built adjacent to the Bahia Malaga Naval Base.

Military units you pay for at Malaga Naval Base include:

  • Naval Forces Pacific (FNP)-Buenaventura
  • Pacific Naval Regional Intelligence Center (RINPA)
  • Pacific Surface Fleet (CFSUP)
  • Pacific Naval Air Group (CGANPA)
  • Pacific Coast Guard (CGAPO)
  • Pacific Training Center (CENPA)
  • For previous articles by Marion Delgado about the U.S. military presence in Columbia, go here.

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John Ross : Days of Dementia in Obamalandia

Posted on December 7, 2009 by Thorne Dreyer

The Zhu Zhu virtual hamster: Dementia in Obamalandia. Photo by Rex Larsen / The Grand Rapids Press.

On the loose in Obamalandia:
Days of Dementia (‘Is the war over yet?’)

Yes, Baracko, the economy is booming again for Chinese-made mechanical hamsters but homelessness is the real growth industry.

By John Ross / The Rag Blog / December 7, 2009

TRINIDAD, CA. — Each Friday afternoon since Bush’s illegal invasion and occupation of Iraq in March 2003, my old friend Janine V. has been standing with Women In Black here near the 101 off-ramp as a silent reminder of the on-going Bush-Obama genocide in the Middle East.

In the early days of this heroic now-nearly eight year-old vigil, patriotic motorists, often on their way to the local Tsuri Indian Casino to swill at the Firewater Lounge, would hurl invectives and sometimes loaded beer cans at the women. But as the war settled into a daily grind and the U.S. body count climbed incrementally towards 5000, the insults and the beer cans diminished and a few locals now even honk their horns in support.

In the seven years that Trinidad Women In Black have held their ground by the off-ramp, the participants, never spring chickens to begin with, have grown older and one now suffers from dementia. Now when the women stand, she turns to Janine and often asks if the war is over yet?

Barack Obama’s nationally televised December 1 declaration of renewed jihad against Al Qaeda’s estimated 100 Afghan warriors that will elevate U.S. troop deployment to nearly a quarter of a million in Afghanistan and Iraq (plus another quarter million mercenary contractors) will keep Trinidad Women In Black in business for at least another decade.

The President’s goal of “disrupting, dismantling, and destroying” the Taliban-Qaeda Axis of Evil is calculated to tickle America’s terrorist nerve. As his grip on the wheel of state grows slack, Obama’s presidency increasingly depends on harpooning “America’s white whale” as Robert Wright recently dubbed Bin Laden in a New York Times op-ed piece. Al Qaeda’s spiritual leader, a Frankenstein fabricated by Reagan’s CIA, probably died years ago dragging his dialysis machine over the Khyber Pass.

Robert Fisk notes that Obama-man’s West Point kowtow to the generals parallels a similar Soviet troop build-up way back in 1980 that was designed to train Afghan security forces to confront the CIA-financed Muhajadeen. We all know how successfully that plan backfired.

With Blackwater loading up the drones in Pakistan, it’s only a matter of months before General McCrystal marches into Pakistan to wipe out the Taliban’s safe havens and the Commander-in-Chief puts another 50,000 boots on the ground to secure that nuclear-empowered nation against “international terrorism.”

Factoring in another 120,000 “crusaders” bogged down in Iraq, Gates & Company is talking about a bigger army — actually U.S. economic calamity has translated into box office business for Army and Marine recruiters who are filling out their quotas for the first time since the 9/11 rush to vengeance thanks to the American “downturn.”

Predictably, the chickens keep coming home to roost. Major Nidal Hasan’s November 5 homicidal rampage at Fort Hood, the most dastardly act of “Islamic terrorism” on U.S. turf since 9/11 as the Glenn Becks vomit, is indeed an ominous sign. Driven by years of hearing out the horror stories of returning soldiers, the Major, a military psychiatrist and a devout Muslim who recoiled at the thought of deploying to Afghanistan to kill other Muslims, created his own horror story. Fort Hood is home to such time bombs. In the month since Major Hasan opened fire with a weapon bought a few yards off base, at least two other Fort Hood soldiers have been killed in soldier-to-soldier violence.

In the first nine months of 2009, 10 soldiers have commited suicide on base — 76 in all at Fort Hood since Bush and his cronies declared war on Iraq. Soldier suicides in 2009 will again set a record (over 140) as they have every year for the past four. Another 1000 members of the U.S. Army are thought to have attempted suicide — numbers are not available for other branches of the armed forces.

Meanwhile, domestic violence is pandemic on military bases. During a visit to Fort Bragg North Carolina, the home of the Center for Special Forces and the much-redeployed 81st Airborne a couple of years ago, I was told of soldiers who returned home at noon and by nightfall had massacred their entire family — local newspapers no longer ran the stories. Fort Bragg, Fort Hood, and Fort Campbell Kentucky have the highest redeployment rates in the military.

The havoc that the Bush-Obama wars continue to wreck upon military families is of course a mere drop in the bucket of blood that these criminal aggressions have poured upon the peoples of Iraq and Afghanistan, a million of whose citizens have been slaughtered and maimed and exiled since 9/11. Despite the deadly outfall and the palpable suffering now so evident on the streets of America, Congress continues to allocate hundreds of billions of increasingly worthless greenback dollar bills to sustain this ghastly genocide.

I have been on my annual Day of the Dead pilgrimage to the land where my father croaked. I huddle in the kitchen hard by the carcass of this year’s dead bird and try to divine the future from its picked-over bones. The task is not a thankful one. A full year after Obama’s geyser of hope drenched North America from sea to stinking sea, the forecast is as bleak as a Cormac McCarthy novel. It’s not just the venomous particulate drizzling from those few pulp mills and coal-burning plants that are still operating that batters the physical contours of our befouled lives.

Official unemployment is running 12.5% in California and 15% in Michigan but the real numbers are probably twice that if those who have given up looking for work or whose checks have run out or who are working part-time for less pay are counted into the mix. Despite Obama’s scripted optimism that the “economy is growing again,” there are currently six applicants for every job available and those in the know anticipate double-digit unemployment through 2012 — the end of the world on the Mayan calendar.

A million more workers will soon have no income whatsoever when Congress, in an interlude of maximum callousness, fails to get around to extending their unemployment benefits while it debates the pros and cons of spending billions more that could nourish social lifelines to kill civilians on the ground in Afghanistan, Pakistan, and Iraq. No dear, the wars are not over yet.

Thanksgiving 2009 was a particularly cruel season for the homeland. Fifteen percent of your fellow citizens — one in every seven families — are struggling to put food on the table if the mal gobierno‘s indicators are to be believed. According to the numbers, 17.5 million Americanos suffer “food insecurity,” that is they have been forced to reduce their daily caloric intake at some point in the past year.

Such belt tightening has not much slimmed down the poor. The physique of poverty is now corpulence — 34% of those living under the poverty line are considered obese and Precious is the new Miss America. And as with every set of stats cranked out by Obama’s bean counters, those of darker hue suffer the brunt of deprivation — 70% of those families who go to bed hungry every night are brown or black. Meanwhile, Wall Street, a gated community where white skin privilege is rewarded, is making a killing again.

The turkey bones yield apocalyptic visions of melting icebergs and Palin/Dobbs in the White House. The portents for this dynamic duo are particularly favorable. As the self-styled “rogue of the right” zooms to the top of the airport best-seller list, Lou Dobbs gloats that times are so tough for “illegal aliens” (read Mexicans) that they will soon be driven from the country — impoverished families back in hardscrabble Michoacan and Oaxaca are now sending relatives stranded at the bottom of the Yanqui Depression money from home. Remittances from Mexican workers in El Norte, the lifeblood of the Mexican rural economy (10,000,000 Mexicans are dependent on them), dipped 35% this October.

To spice up this end-of-the-world scenario (2012 is boffo at the Multiplex), plague stalks the republic. The Center for Disease Control reports 6,000,000 case of H1N1 in 48 out of 50 states. The swine flu is spread exponentially by infected workers obligated to punch in and send their kids to school every day because they have no paid sick leave — 40% of all U.S. workers suffer this affliction. Even those ostensibly covered do not stay home for fear that they will lose their jobs. The New York Times reports on one Wal-Mart worker sent home after he turned pale on the job and who fell gravely ill with the swine flu but failed to visit a doctor because he couldn’t afford the co-pays on the mega-corps’ health care plan.

Nonetheless, this worker’s forced furlough may well have saved his life this past Black Friday when hordes of berserk consumers are wont to break down Wal-Mart doors and trample the help underfoot in their eagerness to spend money they do not possess. This year’s toy to die for is a Chinese-made mechanical hamster at $17 a crack (one to a customer), a no-nuisance substitute for the real thing.

Yes, Baracko, the economy is booming again for Chinese-made mechanical hamsters but homelessness is the real growth industry. 2010 is expected to be a peak year for foreclosures — business is percolating for the Flint, Michigan, sign maker in Michael Moore’s Capitalism: A Love Story who has landed a contract from local banks to churn out “Foreclosure” signs.

As evictions soar, the homeless overrun the shelters. Perhaps the cruelest twist of the holiday season was the 90-day jail sentence meted to an elderly rancher in San Luis, Obispo, California, for housing a score of homeless clean-and-sober vagrants on his property.

The mood of the country as the Yuletide season heaves into view is decked with dark resentment. One AP story reports that food stamp eligibility workers in Detroit fear for their safety. Irritated applicants herded into long lines that snake into the street throw chunks of concrete through the windows. The cops are called to control unruly clients.

The rule of thumb posits that hard times drive the underclass together. Class distinctions become viscerally clear and solidarity flows. But given American exceptionalism, this is not a likely trend in Obamalandia.

This is a nation where the Great Unwashed have been coerced by vulture consumerism that puts them at each other’s throats over mechanical hamsters. American workers have become independent contractors battling with their neighbors over scraps. Most of us do not even know who lives on the other side of the sheetrock. Racism has raised the walls even more precipitously in this post-racialist year. Hate crimes are on a roll — how about the thug who butchered a Florida Greek Orthodox priest because he thought he was a Muslim? President Obama is said to have spiked at nearly 400 death threats a day.

Recent revelations by those who purportedly speak for the Left have not been helpful. Moore’s Capitalism seriously soft soaps criminal capitalism. The 1950s and ’60s were hardly the working class paradise the filmmaker portrays — strikers were beaten, workers were red-baited and blacklisted, black people dangled from poplar trees, fieldworkers were poisoned by the Agribiz kings. The bosses may have seemed like so many benevolent Scrooge McDucks to Moore when he was a lad growing up in a Catholic Caucasian industrial elite household but he is indeed spreading a white lie.

Michael Moore’s egregious absolution of Barack Obama for his complicity in beefing up the fat cats while the rest of us grovel for carfare is Capitalism‘s most painful flaw. MM affirms that the Obamanator’s candidacy so discombobulated the rulers that they threw gobs of money at him out of fear of what he represented and abracadabra he became the first Afro-American president of these United States.

We see Obama surrounded by jubilant throngs. We do not see the money. We see nothing about how the first Afro-American president feathered the nests of the Wall Street vultures. Nothing about the sleazy White House backroom deals with pharmaceutical industry creep Billy Tauzin to greenlight the steepest rise in prescription drug prices in 20 years as a prelude to Obamacare. Nothing about dishing up the whole enchilada to the insurance vampires so they can more commodiously gouge the aged and infirm.

Since I was diagnosed with liver cancer eight months ago (now in remission), I have accumulated a foot-high stack of bills and am dunned daily to pay off California-Pacific Medical Center to the tune of $34,000, nearly five times my yearly social security checks — from which Medicare deducts a hundred bucks a month to allegedly cover my health needs.

Obama’s health care pogram has never been about reforming a deformed system to treat the medically indigent. Obamacare was conceived to insure reelection and the health of the Democratic Party and the insurance tycoons. Let’s face it. We’re all on the Jack Kevorkian health plan.

Another apostle of the Left I bumped into during my recent foray in Obamalandia was Amiri Baraka who as Leroi Jones I sometimes ran with back in the Village during the bebop ’50s. Performing before a packed house in an auditorium named for a notorious San Francisco sweatshop at the main branch of the SF Public Library, Baraka read a love letter to Obama written soon after the election of the first Afro-American President and reviled those on the Left who continue to take to the streets to protest his tainted policies, as “infantile anarchists” and closet racists.

The former Marxist-Leninist-Maoist-Stalinist poet laureate of New Jersey (a dubious distinction of which Amiri was stripped after claiming that 1400 “Hymies” employed at the World Trade Center stayed home on 9/11 day) raised eyebrows by hailing Obama’s appointment of Rahm Emanuel, a member of the Israeli Defense Forces, as his chief of staff, a clever trick on the Zionists Baraka called it.

He urged his audiences to continue to vote vote vote for fork-tongued Democratic candidates. We have to grow the unlikely coalition that elected these charlatans! Other evasions and foolishness followed. Baraka was not much alarmed by his president’s firing of Van Jones, the first Afro-American green jobs czar.

I was one of the first to take the mic for q’s and a’s. For 22 days prior to Obama’s stirring inauguration on the Capitol mall, I pointed out, the Israelis had rained death down on Gaza, slaughtering 1400 civilians — 360 more have died since — and then the Zionists judiciously paused for Barack’s historic oath-taking. Throughout this grotesque bloodletting, Obama (and Emanuel) remained stonily silent. All they had to say were three little words: Stop the Killing! Why had they not responded?

Barraka was irritated by my question and waved me away from the mic. Then poet Michael McClure pointed out that Amiri had not once mentioned the other elephant in the room, Afghanistan. “He’s trying to get us out of there,” the poet blathered. Sure, by sending in another 30,000 dead soldiers, we yodeled back.

“Is the war over yet?”

With Barack Obama calling the shots, and lefties like Michael Moore and Amiri Baraka defending him, the Trinidad Women In Black will all be slipping into dementia before the war is over.

[“On The Loose In Obamalandia” is the first dispatch from the North American underbelly as John Ross embarks on a monster 2010 book tour presenting his latest cult classic El Monstruo: Dread and Redemption In Mexico City from sea to stinking sea. The author continues to seek midwest, southern, and east coast venues for late March and April. Any bright ideas? Write johnross@igc.org.]

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Economy and Unemployment : Real Recovery a Long Shot

Posted on December 6, 2009 by Thorne Dreyer

Photo from OOlaah.com

Real unemployment nears depression levels;
Sustained recovery appears unlikely

By Roger Baker / The Rag Blog / December 6, 2009

It should come as no big surprise that our economy is in worse shape than the U.S. government would like to admit. Lets start out by looking at the current U.S. economic situation.

John William’s Shadow Government Statistics argues that the REAL unemployment rate is about 22%, with an obvious upwards momentum that can be seen on the unemployment chart. This figure is calculated in such a way as to roughly correspond to earlier times. We had about 25% national unemployment during the great depression in 1932, when FDR was elected.

This video graphically shows the current dynamics of unemployment spreading geographically:

There are now numerous areas of high unemployment in the USA, with a severity no doubt comparable to the great depression. The portion of the population dependent on food stamps is soaring. A quarter of the children in Travis County, Texas, now receive food stamp support as this interactive map from The New York Times indicates.

From the same Times article:

With food stamp use at record highs and climbing every month, a program once scorned as a failed welfare scheme now helps feed one in eight Americans and one in four children.

Another way to view our depressed economy is in the recent contraction of the banking credit market — a type of funding source close to small business and the average consumers who mostly drive the US economy. Look at the credit chart in this article form the Asia Times:

A 20% decline year on year does not look like a recovery. In fact, it looks like nothing we have seen since the Great Depression. C&I loan growth lags the end of recessions, to be sure, but this extreme level of credit reduction suggests profound trouble.

35% or so of Americans work for enterprises with fewer than 100 employees, and 20% work (or used to work) for firms with fewer than 20 employees. The percentages of employment in smaller firms (less than 100 employees) are much higher in real estate (46%) and construction (77%) as of the 2004 Economic Census.

It isn’t just the 17.5% broad-measure unemployment number that we should worry about, but the massacre of smaller businesses, who are concentrated in the most vulnerable sectors: real estate, construction, and retail. Retail sales may get a temporary shot in the arm from cash for clunkers, and a combination of tax credits and (de facto) subsidized mortgage rates may hold up the bottom of the housing market for a short time. But today’s data show how fragile these matters are.

In other words, the banks are not lending to support business as usual, because they realize the average American is deep in debt and thus a bad loan risk. This fact drags down other sectors. They say commercial loans will be the next sector to need a bailout. In the case of the “zombie banks,” we have the remains of a vastly over-extended sector of the U.S. economy — the byproduct of unregulated investment bankers competing to issue mountains of leveraged debt based on the capitalist credo of exponential growth forever until 2007. Yet a lot of these junk loans are still on the books.

With all these bad loans, the world of big investment banks looks objectively like a shaky house of cards, a monkey on the back of U.S. taxpayers. What to do? The answer, so far, has been to apply economic band-aids while allowing the banks to generate phony profits.

Does it ever occur to folks that the supposedly recovering banks sure are making a lot of profit on something mighty mysterious for a country that has many of its factories shut down or outsourced, and about 20% real unemployment?

Here is how the phony profit scam works. The Fed’s covert tactic of using monetary policy to recapitalize the banking system is also proving effective, perhaps too effective. By keeping short-term interest rates at or close to zero per cent, it is enabling banks to borrow at minimal cost and to invest the proceeds in higher yielding securities. The “spread” on this trade amounts to a gift from the government, and, because the Fed has promised to keep rates low for the indefinite future, it is almost risk free. Bank of America is making so much money it can afford to give the government 26.2 billion dollars in cash — or so it says. (The other 18 billion dollars will come from a new issue of convertible stock.)

The downside is that eventually those blessed with the cash are going to take these newly abundant bank profits and try to buy something that is not equally abundant, like maybe oil. Lots of hoarded dollars, not much goods. Under these conditions, and as soon as people start spending freely again, you have a self-reinforcing tendency for commodity prices to soar.

The USA seems at this point to be willfully devaluing the dollar. To the world’s many treasury bond holders, like China, this comes as bad news because they are pegged to the dollar, which means this trend degrades the value of their currency at the same time. So the Chinese are now on a global natural resource buying spree using their trillion or so of accumulated U.S. dollars, spending them on mineral deposits like oil, copper, and iron — things calculated to give a long-term trade advantage before their dollars go bad on them.

Devaluing the dollar has several U.S. government advantages. It makes it easier to compete in trade in those areas where we are still competitive (while making key imports like oil cost more). Second, it is an easy choice for a government to, in effect, just print a bunch of money to pay off the bills. Debt for economic stimulus, bills for wars, for handling the soaring social security costs of an aging population, for paying the bills of a medical system that is impervious to cost reform, for keeping GM afloat, for bankrolling Freddie and Fannie, for backing up bad credit default swaps, for paying off the previous debt, for widespread food stamp support, bank bailouts, keeping the prime rate near zero, and the list goes on. And on.

You don’t have to be a genius to see that this economic process, taken as a whole, is unlikely to get the U.S. economy back on track. What it is most likely to lead to is repaying the lenders with effectively shrunken dollars when the treasury debt comes due. As the U.S. government, you have little alternative when already debt-ridden taxpayers who provide the revenue are too far in debt to help by paying many taxes.

Dollar devaluation is a process of the marketplace expressing the supply and demand for our fiat currency. This loss of faith is already being reflected in the soaring price of gold, as central banks stock up on something that has held its value throughout history. When global lenders shun the dollar and buy gold, it really means that the buyers think the dollar is going to shrink in exchange value. Ultimately, on close examination, economics is seen to be a branch of politics. And politics, as we know, is based on psychology.

When gold soars in price like now, it means that the big players who still have dollars to lend to the U.S. government are signaling that they expect dollar devaluation, which means price inflation for internationally traded goods . Before long, lenders are likely to demand more treasury bond interest in compensation for the shrinking dollars paid back on their loans. Although the Federal Reserve is promising to keep interest rates low, there is only so long that they can defy what amounts to an economic law of gravity. Rising interest rates would of course further depress an already depressed U.S. economy.

When you are a government that can make the rules, you can get away with running heavy deficits and generating lots of Keynesian stimulation spending for years. Prominent Keynesian economists like Paul Krugman are urging heavy spending right now. However, both Krugman and most other Keynesians, like University of Texas economist Dr. James Galbraith, insist that this spending must be accompanied by banking reform. In other words, strict rules need to be imposed to stop the U.S. Treasury from becoming even more of a politicized cookie jar than it has already become.

However, the political will to reform the U.S. banking and finance system is still missing. Needless to say, this is an ominous sign. Levy Institute Scholar Galbraith recently reported on an international meeting of mostly-liberal economists, assembled a few months ago to discuss the state of the global economy. Suffice to say that the prevailing mood was not one of optimism. You can read more details of the conference notes here:

A group of experts associated with the Economists for Peace and Security and the Initiative for Rethinking the Economy met recently in Paris to discuss financial and monetary issues; their viewpoints, summarized here by Senior Scholar James K. Galbraith, are largely at odds with the global political and economic establishment.

Despite noting some success in averting a catastrophic collapse of liquidity and a decline in output, the Paris group was pessimistic that there would be sustained economic recovery and a return of high employment. There was general consensus that the pre-crisis financial system should not be restored, that reviving the financial sector first was not the way to revive the economy, and that governments should not pursue exit strategies that permit a return to the status quo. Rather, the crisis exposes the need for profound reform to meet a range of physical and social objectives.

[Roger Baker is a long time transportation-oriented environmental activist, an amateur energy-oriented economist, an amateur scientist and science writer, and a founding member of and an advisor to the Association for the Study of Peak Oil-USA. He is active in the Green Party and the ACLU, and is a director of the Save Our Springs Association and the Save Barton Creek Association. Mostly he enjoys being an irreverent policy wonk and writing irreverent wonkish articles for The Rag Blog.]

Also see:

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Women : The Secret Weapon of the Marijuana Reform Movement

Posted on December 6, 2009 by Thorne Dreyer

Art from Anne of Carversville.

The secret to legal marijuana?
It may just be women

Public acceptance of pot is at an all-time high, and the fact that women have drastically changed their attitudes may be what is most fascinating about the sea change in public opinion…

By Daniela Perdomo / December 6, 2009

In September, ladymag Marieclaire ruffled some feathers when it published a piece about women who smoke weed. But its most interesting effect was not the “marijuana moms” chatter it unleashed, and instead the fact that it brought to the mainstream media a more open discussion of the fact that women can be avid tokers, too.

Public acceptance of pot is at an all-time high, and the fact that women have drastically changed their attitudes may be what is most fascinating about the sea change in public opinion — and policy — regarding marijuana. In 2005, only 32 percent of polled women told Gallup they approved legalizing pot, but this year 44 percent of them were for it, compared to 45 percent of men. In effect, women have narrowed what had been a 12-point gender gap.

Women are also smoking more weed. The most recent National Survey on Drug Use and Health shows that current marijuana use increased from 3.8 to 4.5 percent among women, while there was no significant statistical change for men.

Indeed, it appears the growing acceptance of marijuana is fueled by women having joined the movement for reform.

Women “can reach people’s hearts and minds,” says Mikki Norris, co-author of Shattered Lives: Portraits from America’s Drug War, managing editor of the West Coast Leaf, and director of the Cannabis Consumers Campaign. “I think we can really take it from the third- to the first-person, and make it personal.”

Norris, who’s participated in numerous successful marijuana campaigns, may be onto something. If pro-weed women are a new momentum behind the normalization of marijuana, they may also become the driving force behind game-changing drug reform.

If that’s the case, then it’s worth examining why some women have signed onto the marijuana reform movement — because it may soon be why many others will as well.

‘A bigger amygdala’

The avenue through which women have been foremost leaders in the movement is medical marijuana advocacy.

There are currently 13 states that have legalized medical marijuana use and at least 14 other states with pending legislation or ballot measures. In California, where cannabis has been legalized for medical use since 1996, a Field poll found 56 percent support for adult legalization — and the matter may very well make its way onto the 2010 ballot.

Every woman I spoke to referenced cannabis’ medicinal properties as a major reason they are so personally impassioned by the marijuana reform debate.

One of these is Valerie Corral, dubbed “the Mother Teresa of the medical marijuana movement,” by Ethan Nadelmann, executive director of the Drug Policy Alliance.

Corral was introduced to the medical benefits of marijuana in 1973, when she was the victim of a car crash that left her an epileptic. At one point, while on pharmaceuticals, she was having up to five seizures each day.

In 1974, her husband read an article in a medical journal that described how positively rats had reacted to cannabis when treated for certain ailments. Soon thereafter, Corral started applying a strict regimen of marijuana, and kept a catalog of its effects.

“Within a few weeks, I noticed change,” Corral said. And over time, she was able to control seizure activity in a way that allowed her to wean herself off the prescription drugs. To this day she does not take anything other than marijuana for her epilepsy.

Not only did medical marijuana change Corral’s quality of life, it changed its course. She went on to found Wo/Men’s Alliance for Medical Marijuana (WAMM), a patient collective based in Santa Cruz, Calif. that offers organic medical marijuana and assistance to those who have received a terminal or chronic illness diagnosis.

WAMM currently serves about 170 patients. When I spoke to Corral, she was late to hit the road for her Thanksgiving holiday. She had spent the morning with a patient who was anxious about his radiation therapy. She then spent the afternoon delivering marijuana before counseling — “and learning from” — terminal patients.

While Corral knows first-hand the physical benefits of marijuana, she believes its most important effect is “the way it affects how we look at things that are difficult.”

“No matter what else happens to us,” Corral said, “the quality with which we live our lives is so important.”

Cheryl Shuman, a 49-year-old optician in Los Angeles, would agree. Up until she started using cannabis therapy to treat her cancer, she was on a daily regimen of 27 prescription drugs, attached to a mobile intravenous morphine pump, and undergoing constant CAT and MRI scans. In 2006, her doctors told her she’d be dead by the end of that year.

“I had to make a decision [regarding] which way I was going to go and quite frankly, I thought if I am going to die, I want to control how my life is going to be,” Shuman said, her voice breaking. “And the only side-effects were that I was happy and laughing.”

It turns out those may not have been the only effects of her cannabis therapy. Her cancer has been in remission for 18 months now — and that coincides precisely with the start of the marijuana treatment.

Shuman had previously used pot medicinally in 1994, when going through a harrowing divorce. Up to 80 milligrams of Prozac a day, coupled with multiple therapy sessions a week, did not help her get over the sense that she could barely make it through each day.

During one session, she says, “my therapist said, ‘I could lose my license, but I think what would help you more than anything is just smoking a joint.’ I didn’t know how to respond! I said I couldn’t do that — I don’t drink, I’ve never even smoked a cigarette!”

But after researching medical marijuana and realizing that cannabis had been available in pharmacies until the early 20th century, Shuman acquiesced and tried a joint. At 36 — after learning to inhale — Shuman says she found she “finally had some peace.”

This year, Shuman became the founding director of Beverly Hills’ National Organization for the Reform of Marijuana Laws (NORML) chapter — and she hopes to attract women to the cause.

Corral, for her part, acknowledges that the role she fills within the marijuana movement is one that fits the traditional female archetype. “Maybe it’s because we have a bigger amygdala,” she laughs, referring to the part of the brain that processes emotions. “It probably is!”

Valerie Corral, “the Mother Teresa of the medical marijuana movement.” Image from 420 Magazine.

Debby Goldsberry, director of the Berkeley Patients Group, a medical marijuana dispensary, feels similarly: “It’s our job in our families and in our circles of friends to be caregivers. It makes sense that women would gravitate to cannabis.”

In a recent study of a sample of patient reviews at a chain of medical marijuana assessment clinics in California, Craig Reinarman, a sociology professor at UC-Santa Cruz, found that only 27.1 percent of the patients were female. Another study, conducted on a sample of patients at Goldsberry’s Berkeley dispensary, found that 30.7 percent of those patients were women.

Those numbers are close to the general expert estimate that women constitute about a third of marijuana consumers.

Mainstream myth-busting

Since more women are smoking weed, it’s no surprise there has finally been an onslaught of girl stoner coverage in the corporate media.

It probably started with Weeds — a Showtime series about a bodacious soccer mom who deals and smokes pot — which is now readying for its sixth season premiere. But the big dam opener this year was the aforementioned publication of the Marieclaire article, “Stiletto Stoners,” which paints the portrait of a whole class of “card-carrying, type A workaholics who just happen to prefer kicking back with a blunt instead of a bottle.”

Julie Holland, a clinical assistant professor of psychiatry at the NYU School of Medicine, has been called onto NBC’s Today Show twice now to explain why women are gravitating towards weed.

During one of her appearances, Holland seemingly shocks the hosts by telling them that 100 million Americans have tried weed — 25 million of them over the past year. The most recent National Survey on Drug Use and Health shows that 10.6 million women used marijuana in 2008.

Also surprising to the TV hosts was Holland’s assertion that marijuana is the least addictive substance among many. According to a 1999 Institute of Medicine report, the rate at which people who try a substance and go on to become addicted is 32 percent for nicotine, 23 percent for heroin, 17 percent for cocaine, 15 percent for alcohol, and 9 percent for cannabis.

“Look at what the choices are. Cannabis isn’t toxic to your brain, to your liver, it doesn’t cause cancer, you can’t overdose, and there’s no evidence that it’s a gateway drug,” Holland said. “I believe that the majority of adults can healthfully integrate altered states into their lives, and it makes sense to do it with the least toxic substance you can. “

The public seems to agree.

Societal mores around marijuana are at their most progressive in at least 40 years, when Gallup first started asking Americans whether they believed marijuana ought be legalized. This year, 44 percent of those polled — up from 36 percent in 2005 — said they are in favor of legalization. A May Zogby poll found marijuana legalization was even more popular with its respondents, at 52 percent.

Harry Levine, professor of sociology at Queens College and co-author of Crack in America: Demon Drugs and Social Justice, attributes a lot of the mainstreaming of progressive views on pot to the medical marijuana movement.

“What it has done is change the image of marijuana from this tie-dye 1960s hippie-dippy kind of thing to a real drug, a real substance that has medical uses,” he said. “You can separate it from the scary image of drugs.”

Showtime’s Weeds stars Mary Louise Parker.

Why do girls smoke?

As weed is no longer considered by the public to be a “hard drug,” three presidents — 41, 42, and 43 — have admitted to smoking marijuana. “The whole association of failure and dropouts [with marijuana] has been smashed in an important kind of way,” Levine says.

In other words, you can smoke pot and be successful. Look at Natalie Angier, for example. In her book Woman: Intimate Geography, this Pulitzer Prize-winning science writer interjects a personal note of — and case for — female empowerment through weed:

All the women in my immediate family learned how to climax by smoking grass — my mother when she was over thirty and already the mother of four. Yet I have never seen anorgasmia on the list of indications for the medical use of marijuana. Instead we are told that some women don’t need to have orgasms to have a satisfying sex life, an argument as convincing as the insistence that homeless people like living outdoors.

As Angier writes, alcohol is a “global depressant of the nervous system” so marijuana can be a woman’s best friend. In that vein, Holland has clinically observed that many of her female patients choose marijuana over alcohol — for all kinds of social situations — because it makes them “more present instead of absent.”

“You can relax but not be incapacitated. You can keep your wits about you and protect yourself,” Holland told me, adding that women don’t always tolerate alcohol the way men do.

Diana, 37, a published writer in Madison is one such woman. She uses marijuana as a social lubricant: “If I drink, I know I’ll be throwing up by night’s end, even if it’s only a couple of beers. But with weed, I know I can make it to closing time — and keep up with all the steely-stomached drinkers.”

Paloma, 25, a Bay Area union organizer, told me she smokes weed two to three times a week to “relax, sleep, work on arts and crafts or clean the house and cook” without being distracted by what she calls her “explosive” attention deficit disorder.

A few women smokers said they did not initially like the effects marijuana had on them. Tessa, 29, a doctoral student in Portland, said, she didn’t enjoy weed in college “because I would not be able to do anything besides be high and stupid. Now I know to smoke less — maybe a hit or two — and then relax on that.”

What a lot of women like Tessa don’t know is that there are several kinds of weed that have different effects on the mind and body. Women who live in places where marijuana can be purchased at dispensaries are often more attuned to the fact that cannabis sativa gives a euphoric head high while cannabis indica results in a lazy body high. And then there are hybrids — the equivalent to blends in wine culture.

Ally, 34, an architect and mother in San Francisco, sees weed as similar to vino: “Smoking a joint and taking a bath is what drinking a glass of wine and taking a bath was to my mom,” she says, balancing a baby on her knee. “It’s ‘me’ time!”

Think of the children!

The acceptance of pot has led to discussion of how marijuana reform might positively impact families and children. This may change the debate because family values have long been employed by drug warriors as reasoning for why weed ought remain criminalized.

Enter Jessica Corry, a pro-life Republican from Denver. A mother of girls aged two and four, this 30-year-old newly-minted lawyer is widely hailed as a rising star in Colorado politics. She is currently working on her first book, which she described to me as an “analysis of how race consciousness and political correctness are silencing America’s students and our entrepreneurial spirit.”

Conservative Republican Jessica Corry speaks out for reform of marijuana laws on Fox News.

A real conservative. Yet she is also one of the most outspoken proponents of marijuana legalization.

In 2006, she started a group called Guarding Our Children Against Marijuana Prohibition, which supported a statewide initiative to legalize marijuana.

“I had high-ranking Republicans politely encouraging me to write my political eulogy,” Corry said. “Fortunately, they were wrong. While the initiative failed, it garnered more general election support than that year’s Republican candidate for governor.”

Corry doesn’t smoke pot — though she is open about past use. “As a mother,” she says, “I’m far more concerned about my kids having access to a medicine cabinet than having access to a joint or a liquor cabinet. Marijuana, when consumed independently, has never been linked to a single death.”

Mothers like Corry are drawn to marijuana regulation as part of a larger appeal that encourages the use of harm reduction to more pragmatically deal with substance abuse. Examples of harm reduction include providing designated drivers for drinkers and clean needles for heroin addicts.

Concerned moms may be moved to action by studies such as the Teen Survey, conducted by the National Center on Addiction and Substance Abuse at Columbia. This year, there was a 37 percent increase in teens who said pot is easier to buy than cigarettes, beer or prescription drugs. Nearly one-quarter said they can get weed within the hour.

Those stats matter to women. In light of this, children and family will be included in the mission statement of the Women’s Alliance, a group NORML will launch next year. The coordinator, Sabrina Fendrick, plans to include mention of how current marijuana policy undermines the American family and sends mixed messages to young people.

An economic savior?

The harm reduction approach extends itself from families and children to our ailing economy. With the largest economic recession since the Great Depression firmly in place, more people see the benefits of taxing and regulating marijuana for adults.

Economist Jeffrey Miron has calculated that, assuming a national market of about $13 billion annually, legalization would reap state and federal governments about $7 billion each year in extra tax revenues and save about $13.5 billion in law enforcement costs.

This kind of math attracts libertarian support, ranging from Gov. Arnold Schwarzenegger of California who recently called for an open discussion on legalization, to Rep. Ron Paul, a physician and Republican congressman from Texas, who has long advocated it.

The problem with a fiscal approach, however, might be that it could have more traction as a top-down rather than a bottom-up movement. Deborah Small, a drug reform veteran and founder of Break the Chains, a group that engages communities of color around drug reform policy, believes the reason the medical marijuana movement has been so successful is that its female leaders have made it a “real grassroots movement.”

“Male-dominated libertarian philosophy and money has dominated” the general marijuana reform movement, Small says, and “there’s a struggle in this next stage to see whether the movement will be driven by people with a lot of money or people on the ground — or if they can agree to work together.”

Perhaps male drug reform leaders can learn from the ladies. Jessica Corry, the GOP mom from Denver, turns the economic discussion back to the home: “It’s generational child abuse to waste billions of dollars every year on marijuana prohibition.”

Mikki Norris, the California marijuana activist, observed gender-specific focus groups in Oakland on Measure Z, a 2004 ballot initiative that ultimately succeeded in making marijuana the lowest law enforcement priority. She heard the women’s group speaking on behalf of their children — “they wanted money for their kids’ education and they didn’t want kids arrested for pot.” Men, on the other hand, were more worried about children getting involved with drugs, she told me.

Norris said, “I just think women have a better grasp of home economics,” or what’s really important in a family.

Today’s economic climate lends itself to easy parallels with the fight to repeal Prohibition in the 1920s, which was also framed as a family issue. Harry Levine, the sociologist, reminded me of Pauline Sabin, a high-society Chicago feminist who organized women in the fight to repeal the 18th Amendment.

“Sabin said that because of the violence, the corruption, the bootleggers, and all the resulting lost tax revenue, that alcohol undermined the home and therefore women should speak out for themselves and children,” Levine said.

Many point to the moment when women joined the fight against Prohibition as the tipping point for the ultimate success of the movement.

Women as a new force

The women in the marijuana reform movement have different reasons for trumpeting policy change. Some see cannabis as a medicinal wonder drug, others see tangible — and sensible — socio-economic benefits to taxing and regulating it.

Trends indicate that as more states legalize the use of cannabis for medical purposes, more people will discover first-hand that legalization of marijuana does not equate with anarchy and instead with more effective control of a substance so readily available to Americans — and American kids — across the country.

And as Californians may next year, Americans will soon be exposed to the choice between regulating marijuana for adult use or continuing a failed drug war that incarcerates 850,000 people a year — tearing apart families, ruining futures, and siphoning from public funds that might otherwise benefit the next generation. All this for a relatively mild psychotropic that at least a third of us has tried.

As the recession continues to unravel communities across the country, the economic incentive to end this drug war will affect the opinions of many who might never otherwise have considered legalization. The time may very well be now.

Similar to the prohibition of alcohol in the early twentieth century, what we have today is a federal policy that is at odds with public opinion. It is a policy without a plurality of citizen supporters.

And many women are at the vanguard of the movement that recognizes this and is fighting for change.

[Daniela Perdomo is a contributing writer & editor at AlterNet. You can follow her on Twitter @danielaperdomo.]

© 2009 Independent Media Institute. All rights reserved.

Source / AlterNet

Thanks to Mariann Wizard / The Rag Blog

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Prepare to Howl : Dana Lyons’ ‘Three Legged Coyote’

Posted on December 6, 2009 by Thorne Dreyer


A happy holiday howl:
Dana Lyons’ Three Legged Coyote is an irreverent hoot

By Harvey Wasserman / The Rag Blog / December 6, 2009

If you’re bummed by Obama, nagged by nukes and turned totally off by your TV, here’s a happy holiday homeopathic: Three Legged Coyote, the soulful, irreverent and occasionally hilarious new CD by Dana Lyons (Lyons Brothers Music).

My brilliant singer-songwriter-activist long-time buddy has done it again.

Lyons is the singing satirist whose “Cows With Guns” has become the anthem of the vegan/vegetarian movement. [See “Cows With Guns” flash animation.] The very idea of uzi-packin’ bovines has become stock-in-trade for even those pacifists who would end at last the horrors of factory farming.

Dana has also rendered immortal a wide range of dam-busting, nuke-fighting, war-opposing activists. Their often lonely quest for peace, justice and the long-forgotten American way somehow finds a home in Lyons’ range, which roams from the soulful to the sinful with shocking ease.

As usual, Dana’s new Three Legged Coyote CD is a joy to behold. It’s full of haunting incantations to the west, hilarious dissections of the tortures of the male-female relationship, and searing political balladeering to the injustices endured in Latin America, New Orleans and among us all.

Dana Lyons’ cow with gun.

It opens with “Crazy Cowboy,” a mellow ode to life on the prairie which carries through “Big Rolling Country” and “Three Legged Coyote.”

But Dana can never stay too serious too long. The absolutely hilarious “How I Miss Your Dog” is the ultimate down-home put-down of a relationship gone wrong. No doubt countless thousands of future break-ups will be cemented with a rendition of this howl of a f—you farewell.

“Grandma’s Up in Heaven, Giving Hell to God” will also surface at innumerable funerals dedicated to those old ladies in tennis shoes who really run the world.

But when we get to “Patagonia Dam Song” we get to another level altogether. Dana puts himself in the soul of a Patagonian rebel whose life has spanned a horrific coup now being topped off by the “sale” of the nation’s water supply. We see these fights over water now more and more, between impoverished nations and mega-corporations that would claim the very air we breathe and water we drink. Time is on the people’s side, and this brilliant, searing song comes right from their heart.

In “Blameless,” Dana stops to take another crack at the ceaseless turmoil/torment of the dance of relationships. This one’s a love/hate admonition to try to make peace. Dana lets you know he’s serious… in a way… about the “can’t we all get along” thing. But he’s also savvy enough to know that, hey, if you can’t laugh about the perils of sex and love, nobody’s going to get much peace — or much of anything else.

This CD does save the most powerful for last. The concluding “Sweet New Orleans” is a devastating, heart-breaking ode to the horrible suffering imposed on our most musical city by a government too callous to care. Drowned pianos, abandoned saxophones and the voice of a culture abandoned by the rich and powerful makes for a combined dance and dirge almost too painful to bear. Dana wears the shroud lightly, though, mixing the suffering with bitter irony and the tunes of hope. It’s an unforgettable piece to remind us of the beauty lost and the power of redemption embodied in the world down there after Katrina.

In all, this CD, like so much Lyons has done, walks a hard line between serious politics, outrageous humor, compelling melody, and very good singing. Dana likes to tour and sing to citizen groups wherever possible. Hear this album and sign him up. You and your community will never be the same.

[Harvey is co-author (with Dana Lyons) of “Shoshanna’s Solartopian Tree Stomp,” which appears at www.solartopia.org. He is Senior Editor of www.freepress.org, where this review also appears.]

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Health Care ‘Reform’ : Tough Pill to Swallow

Posted on December 5, 2009 by Thorne Dreyer


Best health care in the world?
A sad state of affairs

It is not only unfortunate that the health insurance industry plays on the fears of the elderly, but also that the Republican Party has become complicit in the deceit.

By Dr. Stephen R. Keister / The Rag Blog / December 5, 2009

If anyone is still under the illusion that the United States has “the best health care in the world” they should check out a recent incident in the Aria Health Hospital in Philadelphia.Under investigation is the death of one Joaquin Rivera, a musician and high school counselor, who lay on the floor of the hospital’s waiting area for 50 minutes after losing consciousness and appearing to quit breathing.

The investigating officer reported that surveillance tapes showed Rivera going to the check-in window twice in 11 minutes complaining of chest pain before losing consciousness. While he was unconscious someone stole his watch! The thief was the only person shown on security video approaching the man after he clutched his chest and lost consciousness.

Aria Health Care is a for-profit hospital which is part of a conglomerate including Aria Home Health Care based in Dallas, Aria Colonic Hydrotherapy Clinics, Aria Breast Health Programs, Aria Physical and Occupational Therapy Clinics, and a provider of medical and nutritional supplies. The Philadelphia hospital is widely advertised as a resource for joint replacements, which is of special interest because of the investigation into and prosecution of joint replacement manufacturers for collusion with orthopedic surgeons throughout the nation, in some cases for using substandard appliances.

Meanwhile, have you seen the recent television advertising by the Humana HMOs? The ads are directed at the elderly, encouraging them to sign up for the Medicare Prescription Plan, but appear to be aimed at getting them to enroll in Humana’s Medicare Advantage program. Humana is a corporation that manages private hospitals and is a major player in the Medicare Advantage business. The sad reality is that the majority of the elderly who enroll in Medicare Advantage do not realize that they are forfeiting the protection of the government Medicare program and consigning themselves to the tender care of the private health insurance industry. The con game has always been a feature of American society!

For another example of the “best health care in the world,” read Michael J. Klag’s article in the magazine of the Johns Hopkins Bloomberg School of Public Health. Klag writes: “I have to find a new doctor. Last month, my primary care physician wrote me a letter. He said he was leaving private practice. He’s an outstanding physician — a doctor’s doctor who I’ve known since he was a medical student. His reason for closing up shop? The sheer frustration of getting paid by private insurance companies.”

I retired from the medical profession in 1990, at the age of 70. It was then that the takeover of the American medical profession by the Health Insurance Cartel was complete. It was then that medicine ceased to be a healing profession and became a business where health care is rationed by the insurance companies and their oddly named HMO’s. It was then that the judgment of a physician could be overruled by an insurance clerk, whose purpose was to maintain the profits of the carrier at the expense of what is best for the patient. It was then that the cost of health care began to accelerate toward today’s outlandish levels.

I can understand the decision by Michael Klag’s physician, who would appear to be a conscientious and honorable gentleman and an excellent doctor.

There is a very interesting exposition on health care in the December 12 New Yorker Magazine, by Jill Lepore, entitled “Pre-Existing Condition.” The author begins: “‘At present the United States has the unenviable distinction of being the only great industrial nation without compulsory health insurance,’ the Yale economist Irving Fisher said in a speech in December. December of 1916, that is. More than nine decades ago, Fisher thought that universal health care coverage was just around the corner. ‘Within another six months it will be a burning question’ he predicted.”

Nearly a century after Irving Fisher’s discussion, our wise men/women in the Senate and House are continuing their health care kabuki dance. As we have noted in prior articles, since President Obama would not even consider universal/single payer health care — Medicare for all — the central issue revolves around including a true, unfettered, unencumbered public option in any legislation.

And this appears more and more unlikely as our more forward-looking representatives compromise time and time again with the Republicans and the Blue Dogs. By the time revisions and compromises are finally totaled up, the entire enterprise may once again be consigned to the dust heap of history. Robert Reich has addressed this in his usual lucid style in his blog: “Harry Reid, and What Happened to the Public Option?”

If Congress passes a bill without a “robust” public option while at the same time requires compulsory health insurance for all, the upshot will be the subsidization of the health insurance industry by the taxpayer. We will be passing the burden of health care costs to the illiterate and the poor. H. L. Mencken said: “Congress consists of one-third, more or less, scoundrels, two-thirds, more or less, idiots; and three-thirds, more or less, poltroons.” He also said: “Democracy is the art of running the circus from the monkey cage.”

Yet, this is very serious, as the public still has only a vague idea of what is transpiring in the debate. The mainstream media gives extensive accounts of Senator McCain’s rants about the legislation cutting Medicare benefits — when in fact it is not designed to cut payments to the elderly, but to eliminate waste such as the Medicare Advantage Plans and the terribly conceived Medicare Drug Plan — and to do away with the outright theft of Medicare funds by criminal elements establishing medical supply and orthopedic supply outlets. (This issue was discussed on CBS’ 60 Minutes several weeks ago.) It is not only unfortunate that the health insurance industry plays on the fears of the elderly, but also that the Republican Party has become complicit in the deceit.

As the Senate debate continues we watch the drug makers raise drug prices in anticipation of reform. The November 16 New York Times reported that the industry has raised the wholesale price of brand name prescription drugs by about 9%. This will add more than $10 billion to the nation’s drug bill, which is already on track to exceed $300 billion this year. According to at least one analysis, it is the highest annual rate of inflation for drug prices since 1992. This flies in the face of the Consumer Price Index, which has fallen 1.3% in the last year.

The President was promised by the pharmaceutical industry, through his discussions with Billy Tauzin, that they would shave only $8 billion a year off the nation’s drug costs after the legislation takes effect! The United States has the highest drug prices in the industrialized world, and is one of two nations that permit the advertising of prescription drugs on TV. I rarely watch television but last week I watched an hour-long program and 50% of the commercials were for pharmaceutical companies. Imagine the cost — which in turn is passed on to the person getting a prescription filled.

An example, noted in The Times, is the cost of Singulair, an asthma medication produced by Merck, which now sells the 10 mg pills at a wholesale price of $1330 a year, $147 more than last year. Other brand name prescription drugs have seen a price increase from $2000 a year to $2200 per year. Unhappily brand name drugs account for 78% of the market. Why? Do the patients demand the drugs they see on TV and are then accommodated by physicians too busy to explain that generics, when available, are just as effective? Or are the physicians themselves influenced by the pharmaceutical industry? Or, for that matter, do physicians ignore information like that published in the New England Journal of Medicine reporting that Pfizer fudged it reports on studies of their epilepsy drug Neurontin and its use for off-label marketing practices.

We are faced what could be an even more difficult future as the Congress dallies regarding health care. The President commits the nation to an ongoing “war” in Afghanistan with poorly documented reasons for doing so and further burdening the citizens with an unconscionable national debt, originally run up by President Bush with his fruadulent war in Iraq, with money borrowed from China.

The most frightening aspect of all is the lack of knowledge and the lack of concern on the part of the American public, fed by the lackeys of the corporate interests that dominate our society.

[Dr. Stephen R. Keister lives in Erie, Pennsylvania. He is a retired physician who is active in health care reform. His writing appears regularly on The Rag Blog.]

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Understanding our Economic Fix : The Crippled Financial System

Posted on December 5, 2009 by Thorne Dreyer

Cartoon by Manny Francisco / Manila Times / Black Commentator.

The product of neocon economics:
Our badly damaged financial system

By Sherman DeBrosse / The Rag Blog / December 5, 2009

The Democrats could lose between 20 and 35 House seats in 2010 because the banks are sitting on over $1 trillion in excess of reserve requirements. The normal practice is to hold this sleeping money to a minimum. In September 2008 it amounted to $2 billion.

Though bank stocks have soared, the fact is that we are still not half way through the bank default cycle that resulted from Bush administration policies. The trillion in unused money is a massive drag on recovery and reemployment.

In the September 22, 2008, issue of investment Commentary, BlackRock vice chairman Bob Doll wrote that “The financial system did come close to a meltdown last week as credit borrowing and lending… came close to breaking down.” That all happened on George W. Bush’s watch. Now we’re 11 months into the administration of President Barack Obama, and Republicans are making great headway blaming all our economic and financial problems on him.

The near meltdown

The financial system collapse was so great that respected observers like Martin Wolf are saying we should count it a great victory that it still exists at all. Less money is being lent now than last year, and the big banks are again hoarding cash and making the same kinds of bets that created disaster before. In the last six months, loans at commercial banks have dropped by 6%. The banking sector is still very unhealthy, and none of this can be blamed on President Obama. In fact, Obama played a big role in pulling us back from the precipice.

This writer believed that the Obama Administration should have come as close as possible — but just short of nationalization — to following the advice of Nobel Prize winners Paul Stiglitz and Joseph Stiglitz in moving quickly to purge the banks of bad assets. Instead, Obama opted for “intelligent centrism,” perhaps because things were so bad that only insiders knew how to rejigger the financial system. Timothy Geithner offered them a means for purging some assets that was more than generous, and the bankers simply held out for assistance from the Fed on their terms.

As might be expected, Republicans behave as though there were all sorts of other options available, but they name none! We can do little but hold our breath and hope they know what they are doing because we need them to restore lost capitalization as quickly as possible.

Our financial system has been badly damaged and will be fragile for some years. The economy cannot run well without a solid financial system, and there are no signs that we can repair in the short term the damage done by the gradual deterioration of the industrial sector.

Elizabeth Warren put it bluntly: “Today’s business model is about making money through tricks and traps.” That has certainly been the case in the financial sector, where people behave recklessly in what seems like a very high stakes casino because (1) the potential rewards are fantastic, and (2) they know government will cover their bets. Their firms are too big to fail.

The average employee at Goldman Sachs stands to earn $700,000 this year. The present formulae for rewarding traders in financial houses seem to encourage reckless behavior. Congress needs to investigate these formulae and use the tax code to discourage irresponsible conduct. We should prevent the bubble from growing still more, with high taxes on unreasonable bonuses and by requiring that one third of each bonus be held in escrow for three years to see how the transaction turns out and to provide a reserve for people hurt by bad transactions.

We need to slowly let some of the air out of the financial services bubble as a means of preventing a catastrophe. While doing this, we must begin to phase in new regulations that protect depositors in commercial banks and patrons of insurance companies. The big financial houses must be weaned off of the wild bets that almost destroyed our financial system. All this must be done slowly and gradually so as not to disrupt either the economy or the financial system.

Cartoon from Reject the Herd.

Bubbles

Of late, our markets have been driven by bubbles — technology, dot coms, then housing. We remember that Thomas Jefferson was one of many famous men to write and warn about bubbles. The problem is that they are not always easy to spot, and Ben Bernanke says spotting them is “perhaps the most difficult problem for monetary policy this decade.” Until last year, the common wisdom was that bubbles do not burst and that the best way to address them is to do nothing. Now we know that some bubbles must be pricked.

One way to deal with bubbles is to raise interest rates. The problem is that doing so can slow the whole economy. Perhaps we need to commission studies in how differentiated rediscount rates could be applied. That is to say that the rediscount rate for investment in plants, retail inventories, and housing might be lower than that on money borrowed for financial speculation.

Another approach would be requiring banks to have larger capital cushions.
There is a concern that today people are borrowing dollars at very low interest rates to speculate in assets here and abroad. The Asian nations are complaining that our investors are creating a bubble in Asian assets. This could be the next bubble to disrupt the world of finance. We need to invest in having economists create models that show how much interest rates should be raised when financial leverage and asset prices get too high.

The Fed has created a “quantitative surveillance group” to gather all sorts of data that will help it detect and deal with booms. The two major Congressional committees dealing with banking should create a parallel mechanism so that they can better monitor what the Fed does. While Congress is doing that, it might take a fresh look at the practice of letting the banks appoint six of the nine people on each of the regional FED boards.

The two committees should also hire experts with proven records in monitoring what goes on in the financial sector. If I were doing the hiring, I would ask former Governor Eliot Spitzer to recommend appointees. After all he, in a now famous Op-Ed, saw the financial meltdown coming and explained what had gone wrong.

Backstopping the banks

The larger problem was that government got into the habit of covering the massive losses of investment banks. The precedent was set when Ronald Reagan used Brady Bonds to make foolish and massive Latin American loans underwritten by bankers greedy for excessive commissions.

Then there was the very quiet bailout of Citi in the mid 1980s. That period was marked by the junk bond spree and unrealistic housing prices. The Fed had to come to the rescue with great amounts of new currency and low interest rates. We all know about the S & L and commercial banks bailouts under Daddy Bush. All of that came to a little less than $7 trillion in underwriting by the Treasury and the Fed. Now, there was the poorly conceived TARP, and who knows how many Fed guarantees. Then add another two or three trillion in guarantees issued before Bush left office.

Recently, the Republicans claimed that the Obama administration had incurred $14 trillion in new debt. Of course, they provided no data on how they reached this figure. For one thing, they are lumping together actual borrowing, as in the case of Bush’s TARP, with commitments to securitize bank assets. It may well be that the two together will come to $14 billion if the financial houses need much more help. Nine or 10 trillion of that was incurred under Republicans, and the rest will have been spent to fix a financial system the GOP said was desirable and sound. Moreover, it is usually the case that the doubtful assets that are being covered have some value.

Obama‘s Public Private Investment Program was designed to avoid any step that looked at all like nationalization help the big banks. For the most part, the bankers did not bite. They went back to the strategy that began back in 1981 when they blackmailed Reagan into covering all their bad debt with Brady Bonds. Now, the Federal Reserve has agreed to simply cover almost all the bad securities.

None of this can be fixed until a significant part of the public comes to understand the problem and no longer goes into panic attacks when Republicans start screaming about “nationalization” and socialism.” If those tactics continue to be successful, there is no way to fix our financial system. The Europeans, especially the Germans, are appalled that we are doing so little to fix a bad system. Our trans-Atlantic critics simply do not understand the power the folklore of Capitalism possesses here. While the European banks have been cleaning up and shrinking their balance sheets, there is little evidence that our institutions have emulated their example.

All the financial crises of the last 200 years began with the threatened or actual collapse of a first, second, or even third tier institution. At that point, all the talk about rational expectations goes out the window. What happens is that people panic and that leads to large systemic crisis. People like Richard Shelby, ranking Republican on the Senate Banking Committee, can talk endlessly about simply letting banks fail, but that would only intensify the panic. It’s a non-option and would make things a lot worse.

The scale of the derivatives problem

In the recent near-crash of the financial system, trade in derivatives greatly magnified problems created by the housing bubble. Manufacturing and energy firms also trade in derivatives. Derivative financial instruments are based on collateralized mortgages that were bundled as “collateralized debt obligations,” and many other things. For the most part, the financial services boom was based on trade in these bundled mortgages.

What is hard to understand for the layman is how the same batch of mortgages can become the collateral for a number of derivative instruments that are essentially laid on top of one another. One form of derivative is the credit default swap, which was invented as a sort of insurance on risky loans. What they became were wagers on what bundled securities would turn out to be profitable. Then people placed bets on the bets, and on and on. In September 2008 there was $54 trillion in the credit swaps market. To put this in perspective, we should look at the 2008 Gross Domestic Product, $14,441,425,000. The $54 trillion gambled on one kind of derivative far exceeds the $14.4 trillion GDP.

When one comprehends how many times a single bundle of mortgages was the object of bets, it becomes clear that if government were to simply pay off all home mortgages it would not have addressed the problem presented by all the paper based on bundled mortgages.

It has been assumed that markets work efficiently and that we can expect that markets place correct values on things because people use all the available information to inform their investment decisions. Low interest rates and huge amounts of money available for doubtful loans created a housing bubble. Regulators and policy makers should have looked at the low interest rates and have expected problems.

We need to concede to Republicans that Henry Cisneros and Andrew Cuomo made too much Fannie Mae and Freddie Mac money available for doubtful mortgages. But the excesses of the private sector far outstripped federal foolishness. For example, New Century Financial was bragging that it could generate a mortgage offer in as little as twelve seconds.

If a big outfit like Lehman Brothers issued a hundred million in residential mortgage bonds, it would pay a rating agency $40,000 to put out a credit rating. The agency, of course, gave a good rating rather than see the business go elsewhere.

The Commodity Futures Commission warned about excesses in the derivatives trade in the late 1990s and wanted to regulate them. The big bankers said any such regulation would destroy world financial markets; nothing happened. Now, some steps might be taken to regulate derivative instruments, but they probably will not be sufficient.

Now we know that a second big variable in bringing about the crash was the low margins set by the banks for investors borrowing on the basis of packages of collateralized securities. The lower the margins, the more these people gambled. That drove prices to unrealistically high levels.

There was nothing efficient or rational about the market in derivatives. One bit of bad news would drive lenders to jack up margins, forcing the borrower to quickly sell at large losses. Again, the value of the securities in question might now be unrealistically low. It appears that margin demands are far more important in the collateralized securities market than the interest rates. At the moment, the economists seem to have no models for understanding how this works. We have no exact information that regulators could be using.

People are admitting that the financial economists, who analyze Wall Street, may not quite understand how the things they study influence the overall economy. This writer has seen no evidence that even the greatest macroeconomists understand that. The accounts of what happened to Lehman Brothers and other big firms suggest that the financial economists did not grasp what the “quants“ were doing. In the case of the housing mortgages. these people, often physicists or pure mathematicians, designed the derivative instruments that somehow were to pay far more in dividends than could ever be yielded by the interest rates collected on the home mortgages that underpinned them. How was that possible?

We read that former Secretary of the Treasury Robert Rubin urged his firm, Rubin, to invest more in securities he did not understand. Likewise, Robert Willumstad, CEO of AIG, did not have a clear idea of what his quants and derivative traders were doing. Some firms replaced CEOs who might have reigned in risk with men who had no fear of risk, had no understanding of some of the securities they held, and asked no questions about their firms’ obligations. Lehman Brothers met half of its capital requirement in treasuries in 2003, and in 2006, its mortgage and asset-backed securities tripled.

We do not know much about the leverage cycle in derivatives, yet it seems that the big financial casino is operating the same as it did before the collapse, except that the bets are not being based on home mortgages. Enormous amounts of money are being set aside to reward the people who design the instruments and place the bets.Similarly, all financial institutions should be required to have liability reserves. Granted, this would have to be phased in slowly as they need time to clear their balances of bad assets. Future assistance from the Fed should be accompanied by strict repurchase agreements.

There is still another way to get a handle on how much is being bet on derivatives and in hedge funds. There is much we barely understand about today’s badly flawed financial system. On November 3, 2009, The Wall Street Journal printed a table showing the executive pension obligations of 10 big firms. It said “Total owed in billions” and noted that the money was for from four to six top executives. Given that the sums set aside were in the billions, it was logical for me to assume that we are executive teams over a number of years, So my assumption was that these firms were really putting aside money for several teams that could number together somewhere around 25 people.

At the top of the list was General Electric with an obligation of $140 billion. Its obligation rose by 13% this year. Next was Exxon Mobil at $108.2 billion. Its obligation rose by 18%. At the bottom of the lost was Bank of America at $63.2%. Its obligation only rose by 2%. Those are huge sums, and one wonders what these men earned for the corporations to produce such sums. Maybe this is partly understandable as far as the four energy companies are concerned.
One might think that the WSJ table was in error and that it meant “millions” rather than “billions.” But three weeks passed and no correction was printed.

Illustration by Caitlin Dover / The Nation.

Reregulation

Europeans are very impatient with us because so little is being done to reregulate our financial markets. We have no idea how much money is in the various complex derivative instruments created by “quants,” usually physicists and pure mathematicians. But it has to be a lot more than the $54 billion mentioned above. We also know that the big investment houses are setting aside billions as bonuses for their traders. So far this year, Goldman Sachs has set aside $16 billion for this purpose. That gives us some idea of how that single firm has bet in the great financial casino.

The simple fact is that the taxpayers are on the hook for the whole financial system. Rational people might consider letting the government own almost all the big banks, but that is a non-starter here. The best we can do is dissolve the distinction between banks and non-banks, subject them all to much tougher regulation, legislate disclosure requirement that will make regulation easier, and hire many more regulators. There should also be a strong safety net erected which would be paid for by fees collected from anyone who does anything that looks like banking.

Representative Ed Perlmutter thinks we should prevent some companies from operating both banks and insurance companies. That would be a good beginning. Representative Paul Kanjorski would give bank regulators power to limit the size and risks of any company when it seems to be acting in a way that could endanger the economy. He said, “It essentially gives us the power to amputate the leg before the infection kills the entire body.” Good idea, but the trick would be to find regulators who believed enough in regulations to do difficult things. More derivatives should be traded through central counterparties or on exchanges. In that way regulators could better keep track of what is going on.

It is clear that meaningful regulations will emerge from the work of the Frank Committee in the House and the Dodd Committee in the Senate. As soon as the new Democratic administration took power, work began on reregulation. In the case of Japan, nothing happened for more than six years, and that economy remained in the doldrums.

We should establish a central clearing house for derivatives, but so far it appears it would only deal with “standardized” derivatives. We should do more, and even the Chinese have moved to place all their derivatives in a central market. Our clearinghouse, should deal with all derivatives and no exception should be made for “customized” derivatives. The proposed regulations do not include oil companies and other non-financial institutions that issue derivatives. They should be included.

There is probably no good way to impose the kinds of reasonable regulations the financiers will accept. In reregulating, our problem is that we cannot do anything to rapidly deflate what is still a humungous financial services bubble. To do so would unleash financial pandemonium that would make 1929 look like a minor event.

In the long run, we must move toward Paul Voelker’s solution, reinstating Glass-Steagall so that ordinary commercial banks can no longer gamble with the savings of ordinary folks. A second step would be to prevent insurance companies from investing the premiums we pay in very risky instruments. When some of those firms lost large portions of their reserves last year, they went to state insurance commissions and easily got permission to boost premium rates that were supposed to be fixed 20% or more. But both of these goals can only be pursued in stages.

Political dimensions

The Republicans so far have been quiet about what they think about restoring regulations they busily dismantled for decades. That is partly because some who will be elected next November seem to want some limited regulations. With the growing power of the teabaggers, it may be necessary and very good politics to denounce their Wall Street banker friends and support regulation. Democrats need to seize the initiative here to blunt Republican exploitation of economic populism and to place the blame where it belongs, with the GOP and the NeoCons.

This is the moment to reregulate the financial sector because the Republicans will find it too politically dangerous to speak out against reregulation. One wonders what the teabaggers would think if they learned their hero former Representative Dick Armey is an architect of deregulation and a minion of the Wall Street bankers?

Reregulation must be done soon, and certainly before the next Congress is seated. By then the GOP may be in a position to block the process. The Obama Administration is making a serious mistake moving so slowly in replacing U.S. Attorneys and filling the many vacancies in the federal judiciary. It should move rapidly in both directions. After 2011, it might be much more difficult to confirm progressive judges.

The political pollsters tell us that it is impossible to get voters to listen to two and three step economic arguments. They say that the independents, who now comprise between 19 and 24% of the electorate, are mostly people who dislike both parties, dislike politics, and do not examine issues with any care. Hence, they are prone to be impatient and to swing back and forth on many questions. It is wrong to think of them as being in the center: to assume that at the moment they are blaming the Democrats for not fixing the economy instantly, and that they will probably think the same way in November 2010.

At the moment, the Republican strategy of obstruction, offering no alternatives, and peddling false information is paying off. They are activating their base and appealing to independents, most of whom look for simplistic explanations. But if those independents have investments and retirement programs, it may be dawning on them that they need to be learning a little more about economic matters just so they can make decisions about retirement, sending the kids to college, and the like.

Forty and 50 years ago, I marveled at the economic literacy of ordinary British voters, most of whom had not gone beyond secondary school. It was phenomenal and largely due to the hard work of the British Labour Party. Labour was able to get ordinary people to focus on economics because Britain faced hard times then.

Democrats must begin the very difficult task of educating voters about the source of our problems — Republican economics — and showing voters what progressive solutions can do. Above all, we need to make economic populism an important weapon for the Democratic Party.

In the short term, this strategy may somewhat trim Republican gains in 2010. The long-term prospects are not for a healthy economy, a stable financial system, or a strong dollar. Even though the recession is supposed to be officially over, the Fed’s balance sheet continues to swell. It is doubtful that inflation or even stagflation can be held at bay for long. There is no evidence that the living standard of the middle class will improve. It will continue to erode, and progressives must dedicate themselves to explaining why.

Given all this, it makes sense for the Democrats to learn how to educate people on economics. In time, this strategy will move the political fulcrum to the left and usher in an era of Democratic dominance wherein the party will no longer need the likes of near turncoats like Joe Lieberman.

[Sherman DeBrosse is a retired history teacher. Sherm spent seven years writing an analytical chronicle of what the Republicans have been up to since the 1970s. The New Republican Coalition : Its Rise and Impact, The Seventies to Present (Publish America) can be acquired by calling 301-695-1707. On line, go here.]

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Organic Farming : Cutting Carbon Emissions Big Time

Posted on December 4, 2009 by Thorne Dreyer

Photo from The Red Mullet.

Going organic:
Dump the mega-corps and save the world?

By Steve Russell / The Rag Blog / December 4, 2009

A new report from The Soil Association [see article below] says a worldwide switch to organic farming would cut CO2 emissions by 11%.

That’s a huge return that ought to be considered for the sheer size of the result.

There are two problems to be addressed, one practical and one political.

The practical one is to compute the effect on yield, something that concerns farmers but also has to concern consumers.

The political one is the mega-corporations that produce the chemicals — herbicides and pesticides and fertilizers. They own so many farm state politicians that they are even able to get them to vote against farmers now and then.

It’s a long process, but to do anything about it you have to work out the yield problem to get the farmers on your side and then take on the Monsantos of the world. This is a hard enough slog that putting all the climate eggs in this basket would be hazardous to your health, but it needs to be considered as one front among many.

The only policy that does not require such a multi-front political war is a carbon tax, since it goes directly at the problem. On this front, a carbon tax would change the economics of chemical-based agriculture and jog the numbers in favor of organics regardless of yields.

Soil Carbon and organic farming (report)

By Gundala Azeez / December 2, 2009

New research from the Soil Association reveals that if all UK farmland was converted to organic farming, at least 3.2 million tonnes of carbon would be taken up by the soil each year — the equivalent of taking nearly 1 million cars off the road.

According to the Intergovernmental Panel on Climate Change (IPCC), 89% of agriculture’s global greenhouse gas (GHG) mitigation potential is from carbon sequestration — a fact that governments seem to be ignoring in the critical run-up to climate change talks in Copenhagen (COP 15) in December.

The research’s key findings are:

  • The widespread adoption of organic farming practices in the UK would offset 23% of UK agricultural emissions through soil carbon sequestration alone, more than doubling the UK Government’s pathetically low target of a 6-11% reduction by 2020
  • A worldwide switch to organic farming could offset 11% of all global greenhouse gas emissions. Raising soil carbon levels would also make farming worldwide more resilient to extremes of climate like droughts and floods, leading to greater food security
  • On average organic farming produces 28% higher levels of soil carbon compared to non-organic farming in Northern Europe, and 20% higher for all countries studied (in Europe, North America and Australasia)
  • In the UK, grasslands and mixed farming systems also have a vital role to play, and soil carbon may go a long way to offsetting the methane emissions from grass-fed cattle and sheep.

Source / Energy Bulletin

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RIP Bobby Keane : The Rise and Fall of a Music Man

Posted on December 4, 2009 by Thorne Dreyer

Ritchie Valens, left, and Bob Keane, then president of Del-Fi Records, on TV show in Los Angeles, 1958. Photo from Michael Ochs Archives / Getty Images.

Musician and music biz progidy:
The ill-starred life of Bobby Keane

By Carl R. Hultberg / The Rag Blog / December 4, 2009

Bobby Kuhn was born in California in 1922, at Manhattan Beach, later famous for its surf scene. Since the surfers hadn’t discovered the waves yet, Bobby was crazy for the Benny Goodman Band. Everyone was.

For one thing, Benny had an interracial unit when that really meant something back in the 1930s. It was Goodman’s wild experimental trad clarinet mixed up with all kinds of modern ideas, like black blues-jazz electric guitar (Charlie Christian), jazz vibraphone (Lionel Hampton), a teenage sensation white drummer (Gene Krupa). This was the future, man!

But first World War II, so Bobby Kuhn learned to fly and taught other U.S. Army Air Corps pilots to do the same. Before the war, Bobby had been the nation’s youngest jazz bandleader at age 17. After the war he substituted for Artie Shaw in that big band and later went on to create and perform music for early television. Somewhere along the line he changed his name first to Bobby Keene, than later, Bobby Keane.

The success his early promise had foretold had not been realized, so he decided to go into the record business. It was the mid-1950s and the teenage rock and roll scene was just taking off. His first big discovery was none other than Sam Cooke, who Keane picked out of the lineup of the Gospel singing Soul Stirrers. Cooke’s original hit, “You Send Me,” was recorded for Keane’s Keen Records label. But Bob Keane was pushed out of Keen Records as soon as Mr. Cooke’s success became a reality. Probably by the Mob, because soon Allen Klein was in charge of Sam Cooke’s career.

A year later (1958), Bob Keane discovered a burly Mexican American teenager driving some teenage girls crazy with an electric guitar at a show before a movie in LA. At Keane’s urging the kid changed his name to Richie Valens and, with Bob’s tutelage and grooming, soon became a top ten recording star. A year later, Richie Valens (along with Buddy Holly and the Big Bopper) was killed in a tragic plane crash.

Meanwhile Bob Keane, the producer, gave some future stars their first breaks. Soul singer Brenda Holloway, for example. Young recording studio prodigy Frank Zappa had just been busted for creating a soundtrack for a porno movie when he got to place some of his surf guitar and doo wop recordings with Keane’s new record company venture Del-Fi in 1963. Other Surf groups had recorded on this label, including the genre defining Surfaris. Here Bob was recording music from groups operating out of the beach town he had been born in.

But after all the tragic disappointments and small time success Bob Keane had suffered through in the record business, by the mid 1960s he was sure he’d found the big act he had been looking for. The Bobby Fuller Four, out of Texas, had it all. For one thing, in many ways they were the spitting musical image of Buddy Holly’s Crickets. Their first hit was a cover of Buddy’s “Love’s Made a Fool of You.” The group’s leader, singer, guitarist was the ultra clean cut non druggy but still somewhat wild, charismatic and soulful Bobby Fuller. The group could easily be as big as Paul Revere and the Raiders, for example.

Bobby Fuller: mob hit?

Bobby Fuller proved his worth soon thereafter in 1966 going right into the Top Ten with “I Fought the Law,” a song written by Sonny Curtis, one of the Crickets. This was it. Bob Keane had finally hit the big time with a solid group on his Del-Fi label. The promise he had shown in those early years, after all those discoveries he never got to benefit from, would surely be borne out when the Bobby Fuller Four created their legacy under his guidance.

But something went terribly wrong. Perhaps the cocky Bobby Fuller did something he shouldn’t have done. Like maybe ask the wrong people where his royalty money went. Whatever happened, later in 1966 young Bobby Fuller was found dead in his car near his house, the victim of (probably forced) gasoline ingestion. Don’t mess with the Mob.

So that was it for Bob Keane’s career in the big time music business. He went on to selling things door to door and managing his son’s rock band. It just goes to show that talent will get you nowhere if you don’t get and keep the right connections. The most amazing thing is that in the midst of this cesspool of greed, fear and exploitation some great music actually comes out once and a while.

Bob Keane was one of the guys who fought for talent, and though he ultimately lost all his commercial battles and his discoveries were mostly all doomed, the great music he recorded is with us still. Maybe Bob Keane knew that’s all that really matters,

RIP.

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Harm’s Way : Escalation and the GI Suicide Crisis

Posted on December 4, 2009 by Thorne Dreyer


Mental health and the suicide rate:
Sending soldiers into harm’s way

By Michael Anthony / The Rag Blog / December 4, 2009

President Obama recently stated that sending more troops into harm’s way in Afghanistan is a solemn decision — one that he would not rush. As a veteran, I find the decision to send troops into harm’s way without an effective military mental health program in place beyond solemn. It’s deeply disturbing. Keeping soldiers mentally fit should be as important as keeping them physically fit.

Since the wars in Afghanistan and Iraq started, nearly 2,000 active-service soldiers have killed themselves, according to a report by the San Antonio Express-News earlier this year. Even more alarming is the fact that every day, five active-duty service members attempt suicide. In the past eight years, that means up to 14,000 have felt their life is not worth living.

The government doesn’t want you to know this. In the spring of 2008, CBS news journalist Armen Keteyian exposed a Veterans Administration cover up of suicide stats. The reporting revealed that every day, 18 veterans kill themselves and roughly 1000 attempt suicide each month. The VA’s head of Mental Health had claimed there were only 790 attempts in all of 2007, a far cry from the reality.

Among all veterans, over the eight years we’ve been at war in the Middle East, the statistics point out that roughly 50,000 have committed suicide, with upwards of 44,000 attempting suicide. These figures only represent data gathered since 2001; this has been an ongoing and persistent problem since Vietnam — and the numbers go up each day.

Recently, the Army made a big deal about giving $50 million to fund a five-year research project on military suicide. In their book, The Three Trillion Dollar War, Linda J. Bilmes and Nobel Prize-winning economist Joseph E. Stiglitz figured the cost of the Iraq war at $12 billion a month. That means we spend more than $16 million an hour.

If you do the math, the $50 million that went to suicide research is what we spend every three hours in Iraq.

The day after Christmas this year will mark our 3,000th day at war. At this point, we’ve heard a lot about suicide bombers, but what about suicide? Regardless of anyone’s feelings about our involvement in Iraq and Afghanistan, these soldiers deserve much more than three hours of our time.

[SPC Michael Anthony is the author of Mass Casualties: A Young Medic’s True Story of Death, Deception and Dishonor in Iraq (Adams Media, October 2009). The book is drawn from the personal journals of SPC Anthony during his first year of service in Iraq.]

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Roger Baker : Can the Economy Recover?

Posted on December 4, 2009 by Thorne Dreyer

Cartoon from Talking Union.

Can the economy recover?
And, for that matter, should it?

By Roger Baker / The Rag Blog / December 4, 2009

[Steven Chu, U.S. Secretary of Energy] was my boss. He knows all about peak oil, but he can’t talk about it. If the government announced that peak oil was threatening our economy, Wall Street would crash. He just can’t say anything about it.” — David Fridley, scientist at Lawrence Berkeley National Laboratory.

Can the U.S., or indeed the global economy, ever recover? Concerning this issue, and it is an issue likely to effect most people now living, there is both bad news and good news.

First the bad news. There has been a growing awareness within the scientific community for more than a decade, that if the inherently expansive global capitalist economy as we have known it does recover, it will probably continue to disrupt nature and inflict human misery on a massive global scale.

The global economy has been increasingly bumping into the natural limits of all the human beings the planet can support, assuming they are to live under tolerable civilized conditions. Peak oil, global warming, water shortages, deforestation, polluted oceans, species extinction. You name it, we are now bumping into many kinds of natural limits.

If we do not somehow turn away from exponential growth as usual, and shift toward a more localized, sustainable economy, then wars over limited resources will become increasingly likely. A growing global population can easily overshoot the long term food limits of the environment. Famine has happened locally throughout history, but with a global economy, global hunger becomes possible. When food runs short, tempers flare.

Here’s Walter Youngquist from The Oil Drum:

In various contexts throughout this volume [GeoDestinies] it is pointed out that we now live in unique times, unlike any in the past, and unlike what any will be in the future. Yet many people in developed countries do not realize the unique years we have had since the beginning of the Industrial Revolution. This fact, as a framework to understand the present and what lies ahead cannot be overemphasized.

We have developed technology by which we have exploited the Earth’s resources to a degree never before seen and which, in the case of non-renewable resources – fossil fuels, and metals as well as nonmetals, can never be repeated. We have drawn both from the past, and also mortgaged the next few centuries at least by degrading the vital renewable resources of soil and freshwater, which are not renewable within the span of several lifetimes. This is in contrast to many centuries of history when, lacking technology of today, things changed very slowly…

Top climate scientists like NASA head James Hansen are now pleading with us to tax the carbon we burn, and then to use the tax revenue to help restructure the economy on a wiser, sounder basis.

…Governments must place a uniform rising price on carbon, collected at the fossil fuel source — the mine or port of entry. The fee should be given to the public in toto, as a uniform dividend, payroll tax deduction or both. Such a tax is progressive — the dividend exceeds added energy costs for 60% of the public…

So what about the good news? The good news is that neither the U.S. economy, nor the global economy, will recover, because they can’t. (Read on to learn why this is good news.) They cannot keep expanding in the profitably rapacious way that until recently was considered quite normal. The immediate problem is that nobody has figured out a way to have the global economy, as presently configured, expand without a corresponding increase in the supply of liquid fuel, and for a long time to come.

All things considered, where does this lead?

It is a major challenge to try to rationally convince most people that their total pile of material goods, and that accessible to their children, will by necessity have to shrink, no matter what. The way humans tend to think, selling bad news through intellectual persuasion is never easy. Not easy as compared to selling optimistic snake oil approaches that promise a relatively painless alternative to facing hard choices.

The USA now has a conspicuously dysfunctional political system. A system which allows the banker class to force the (previously) U.S. working class to assume the economic burden of somehow paying off their global finance gambling debts, including the gloriously reckless sub-prime loans made by the world’s giant investment banks up to mid-2007. Think Dubai. (Some of us aware of peak oil have been trying to warn the world for over a decade that global investment trends were unsustainable from an oil perspective alone.)

From current trends, the U.S. public consciousness, in its political and economic perspective, is being forced to shift from the Clinton-Bush-era standard of reasonably assured economic well-being, toward an economic perspective of basic survival. The numbers of those concerned with basic survival, like the jobless and homeless, are already intolerably high by recent U.S. standards. These numbers will probably have to increase further before now-unemployed labor shifts toward local manufacture, agriculture, etc.

In the face of crisis, the public elected Obama to revive a troubled economy. If FDR made the Great Depression go away (with the help of WWII), then the right president acting in the right way should be able to make that happen again, right?

The bottom line is that the current production and the depletion numbers associated with peak oil are, by themselves, enough to indicate that we are headed toward an economic crisis. Getting the global economy back on its old expansionist track is likely to prove impossible, no matter how hard we try. We are now faced with the challenge of restructuring our economy in a way that would normally take decades. Yet we face other additional handicaps. We have an industrially hollowed-out U.S. economy, an aging U.S. population, and a conspicuously dysfunctional political system.

Tom Tomorrow on Peak Oil.

The cheap liquid fuel-based energy needed to transport the goods of global commerce on the previous scale is not there anymore. It is now cheaper to make steel in the USA than to try to ship it here from China. Conventional oil production on land probably peaked in 2005. We are now using expensive conventional oil alternatives like heavy oil, oil sands, and deep-water oil as a cushion to try to buy time before oil production, and thus the global economy, starts shrinking, and fast. The previously silent oil industry itself is now starting to admit as much:

Groups and individuals speaking out about forthcoming world oil supply challenges are frequently stereotyped as a fringe element with little knowledge about the oil industry. But their warnings are increasingly supported by some surprising allies: senior petroleum industry officials, consultants and analysts. Call these serious-minded critics the HarshRealists…

The bad news related to the peak oil situation is especially hard for politicians to publicly acknowledge, but even among such leaders, the word is spreading.

What would it take for average Americans to cut back drastically on their total oil use? I suspect that many readers would be amazed to hear that this has already happened! Without most folks paying too much attention, U.S. oil consumption dropped from about 21.7 million barrels a day in August 2005 to about 18.8 million barrels in recent months. An almost 3 million barrels a day decrease on a base of about 20 million is about a 15% percent decrease over the past four years, with 9% of that being in just the last two years.

These last four years were the years when we made the relatively easy cuts in excess driving, etc., in response to rising oil price and a depressed economy. Now it will get harder, because it looks like we are facing an oil-less recovery.

From Steven R. Kopits:

…Consumption is not much changed since the end of the recession. And before the recession, demand in the United States was falling at around $75/barrel. Therefore, based on the most recent observed period, we would expect US consumption to stagnate around recent prices approaching $80…

Overall, then, U.S. consumption is unlikely to ever recover levels seen in 2007. In the best of cases, consumption could close half the last years’ decline and increase by about 5%, or 1 mbpd. As likely is the possibility that consumption will stagnate at or near current levels, and may be significantly sensitive to prices at or near those seen recently. U.S. consumption is perhaps most likely to increase modestly by perhaps 0.5 mbpd, reaching approximately 19.0-19.5 mbpd.

As the country looks to recovery, policy makers must face the very real possibility that economic growth cannot depend on very much extra oil, and perhaps none at all. It may well prove an oil-less recovery, with all the implications that brings for employment and the economic outlook.

Given the current situation, the world’s major economies might encourage easy credit and steer the global economy in such a way that it is successfully stimulated, meaning that aggregate demand for traded goods and commodities revives sooner. But this only means that we in the U.S. will try to bid against China for a global daily supply of oil falling somewhere short of 90 million barrels per day. Aggressive oil bidding is likely to be soon followed by another oil price spike,

Thereafter, we would likely see a return to the sort of stalling-out of the U.S. economy and rapid deflation that we saw after gasoline hit $4 a gallon in mid-2008, when GM went broke, etc. There is probably now less than five million barrels a day of global reserve oil capacity, mostly with OPEC, to cushion the system from another oil price spike, and this cushion is shrinking.

The current global recession combined with stagnant oil production can postpone the return of a tight market for the global oil supply, but not for a lot longer. A smart guess is that by 2012, global oil depletion in excess of five percent a year will cause serious economic problems through falling oil production — no matter what we do.

Regarding this unhappy situation, here is what a distinguished retired CIA analyst, Tom Whipple, who writes a weekly (and also daily) column on the ASPO-USA website, has to say about the potential for recovery of the global economy. He points out the the numbers indicate that we are now apparently in a sort of economic trap.

…We can’t have it both ways. It will either be a really deep global recession and cheap gas or some sort of start at recovery and spiking oil prices. Discussions have already started as to what level of oil prices causes serious damage. In the past an inflation adjusted $80 a barrel was a favored recession inducing number as this was the price that seemed to cause recessions back in the 1970s and 80s when Middle Eastern wars and embargos restricted supplies.

The trouble with $80 oil, of course, is that we are already there and no analyst that draws a paycheck from Wall Street wants to say flat out that another leg of a recessionary downturn is inevitable unless oil prices decline soon. A typical example was a Dow Jones story earlier this week entitled “Oil Price Rise Poses Little Threat, Yet, To Economic Recovery.” The article points out that the danger to economic recovery won’t start until we get to $90 or $100 a barrel or $3 a gallon gasoline… The current situation is clearly unsustainable. If the dollar continues to sink, oil is going to move so high that all sorts of economic consequences are inevitable. OPEC is already in a dilemma for no matter how much they like the increasing revenues, the smarter governments realize that if prices move much higher, it will trigger off even worse economic times…

At this point, many environmentally conscious readers are quite likely to suggest that alternative energy will come to the rescue, offering a relatively painless landing. But alternative energy probably won’t be there in the needed quantity and on time; this outlook echoes the “Hirsch Report.” Alternative energy is without question an important step in the right direction, but we need to understand the possible limits.

These limits are related to the time required and the scale of (now treasury deficit) financing needed to make the tons of steel, copper, and aluminum that would be required in another five years. Currently, we can’t manage GM very well because we don’t know the proper industrial production targets, or even whether it makes any sense to subsidize the building of cars instead of rail. The devil is very much in such details. How fast it is possible to shift the inputs and outputs of an industrial economy to meet new needs are already known to good economists.

An alarming new study jointly released by two prominent California-based environmental/economic think tanks, concludes that unrelenting energy limits, even among alternative energy systems, will make it impossible for the industrial system to continue operating at its present scale, beyond the next few decades. The report finds that the current race by industries and governments to develop new sustainable energy technologies that can replace ecologically harmful and rapidly depleting fossil fuel and nuclear technologies, will not prove sufficient, and that this will require substantial adjustments in many operating assumptions of modern society.

The new study (“Searching for a Miracle: Net Energy Limits and the Fate of Industrial Society”) is the first major analysis to utilize the new research tools of “full life cycle assessment” and “net energy ratios” (Energy Returned on Energy Invested, EROEI), to compare all currently proposed future scenarios for how industrial society can face its long term future..

After oil peaks, which is likely already, per capita metal extraction will also have to shrink soon thereafter.

Per capita food will also have to shrink soon, as the Worldwatch Institute’s Lester Brown’s latest book documents in detail:

End Game?

Things are not so bad at the moment. At least for the short run, and from appearances, the U.S. economy is restructuring itself in an environmentally healthy direction. Consumer spending on waste is contracting to a new mode based on meeting minimal but essential needs. People faced with foreclosure and high credit card debt have cut back their spending and credit obligations as much as possible. The arrival of hard times means people giving up many kinds of culturally induced needs that Thorton Weblen once classified as conspicuous consumption status symbols; travel to business conventions, vacation homes, big SUVs, the alluring ephemera sold in malls, etc. People are making do and hoping for relief.

A key issue now on the minds of many U.S. citizens is whether the U.S. economy can be put back on track through Obama’s use of Keynesian deficit spending to stimulate the economy. In effect a shot of economic speed to get the stalled U.S. economy activated again, after which it is imagined that this stimulus can gradually be withdrawn without the economy relapsing into its previous state of stagnation.

Assuming that the U.S. finance system is required to stay solvent, and that it must be kept from falling victim to a sudden, panicky dollar devaluation, the obvious way the economy can be stimulated at the same time that the hidden mountain of bad debt the banks owe can be paid off is by printing up lots of money. Lacking an adequate supply of willing foreign lenders, this is done through mutual cooperation of the Treasury and the Fed, resulting in bond debt to be paid back later.

The Fed printing lots of money. Drawing from Cervantes.

But trying to revive the economy by means of printing up enough fiat currency to revive spending plus balance the books is akin to running up a big bar tab which eventually must be repaid. Think paper debts paid back with devalued dollars. This risky process is clearly underway, as famous investor Warren Buffett notes, although Buffett does endorse the use of temporary Keynesian economic stimulation to avert an immediate crisis:

…Buffett details his ongoing warning that the “enormous dosages of monetary medicine” being used to rescue the U.S. economy will eventually produce a dangerous “side effect.” He worries there won’t be enough lenders ready and able to absorb the nation’s growing debt relative to its economic output over the years, forcing Washington’s “printing presses” to work overtime churning out paper money. All those “greenback emissions” will, he fears, feed potentially “banana-republic” style rates of inflation…

We can see signs of inflation already if we know where to look. Economic demand, reflected in prices, for real commodities like important industrial metals, oil, and food has been steadily rising since early 2009. We can see this bumpy but steady average commodity price inflation by looking at this chart of Bloomberg’s commodities indexes. This steady increase can easily encourage other commodity speculation. Consider what the price of gold is doing right now, as a relatively inflation-proof asset that historically preserves wealth well during troubled times.

Currently, among average consumers, we see an interesting economic split. There is a discretionary spending sector in a state of relative deflation and decline as compared to spending on basic needs. Satisfying basic needs takes real stuff like food and energy. In other words, we now have sort of a dual economy in which the unnecessary spending is shrinking. The “real stuff” sector tied to things people really need is seeing price inflation, while the other discretionary spending sector is severely depressed and seeing price deflation.

However, we have a CPI (inflation) index that averages the real basic needs together with the arbitrary and artificial consumerist needs. These two consumer spending categories can sometimes cancel out and appear to indicate zero inflation. Thus we get “apples and oranges” economic nonsense that is blind to the underlying structure and causes of inflation. No inflation index that arbitrarily excludes food and energy, like our CPI does, can be very realistic. (It would be better to have an index based on ONLY these two items, because when the economy is in real trouble, these spending categories will tend to prevail).

Referring back to the troubling choice that Tom Whipple outlined above, the choice between global deflation and a start at recovery with another debilitating oil price spike, the fact is that nobody can accurately predict the economic outcome very well, and this is now leading to an ongoing debate between the deflationists and inflationists. But as we have seen, it is possible to have deflation in one important sector of the economy and simultaneous inflation in another, due to quite different factors.

“Stagflation” was the term they used for this nearly impossible-for-economists-to-remedy situation during the energy crisis of the 1970s. As the price of a limited supply of oil was bid up, it pushed up the price of everything economically tied to oil, meaning nearly all commodities, which is termed cost-push inflation.

It is likely that with the U.S. and other countries trying to restimulate their economies through deficit spending, they will succeed at some point. In a situation where they are trying to use monetary expansion to stimulate otherwise unresponsive economies, there is a real but unpredictable risk of economic disaster through hyperinflation, as Buffet observes.

There is now a lot of fresh new money sitting idle on the sidelines. Banks are managing to appear more sound by borrowing at near zero interest and then using the cash to buy interest-bearing U.S. treasury bonds; what a racket! When there is a lot of idle money around, they start looking for profitable investments. Where there is a lot of money but a deficiency of important commodities that everyone needs or wants, you get self-perpetuating speculative bubbles. Given the apparent tendency of the U.S. political system to take the easy way out, as indicated by the federal government’s inability to reinstate basic banking reform, the odds look good that we will see the continuation of inflation in the commodity sector.

When you have rising commodity prices, the markets soon notice. Soon rising prices stimulate the public willingness to buy and invest. This means the “velocity of circulation of money” increases. As soon as the public starts spending more freely, it becomes apparent how easy it is for the creation of printed money to exceed the availability of real goods.

This increased willingness for average consumers to spend in the face of rising prices has a self-perpetuating effect; money chasing goods leads to hyperinflation, finally, in general, ending in a collapse of some sort. Since this is based on something as unpredictable as consumer and investor psychology on a global scale, it is almost impossible to time or predict.

My own forecast is for continuing dollar devaluation, worsening stagflation, and finally an oil price spike that ushers in a permanently downsized economy. I would like to predict better, but the facts are stubborn.

In a sense, these details are academic. The facts by themselves seem to argue that before long we will have to accept a continuing downsizing of our average U.S. lifestyle and economic footprint. The sooner we face these jarring economic transitions, and assuming we remember our sense of humanity, the transition to a sustainable future will be all the easier and more tolerable.

[Roger Baker is a long time transportation-oriented environmental activist, an amateur energy-oriented economist, an amateur scientist and science writer, and a founding member of and an advisor to the Association for the Study of Peak Oil-USA. He is active in the Green Party and the ACLU, and is a director of the Save Our Springs Association and the Save Barton Creek Association. Mostly he enjoys being an irreverent policy wonk and writing irreverent wonkish articles for The Rag Blog.]

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Bob Simmons : A Medical Mission to Palestine (Documentary Video)

Posted on December 3, 2009 by Thorne Dreyer

A Medical Mission to Palestine – Part 1 from Telebob on Vimeo.


Good works done by good people:
A Medical Mission to Palestine

By Bob Simmons / The Rag Blog / December 3, 2009

See Parts 2-4 of A Medical Mission to Palestine, Below.

The hardest part of making this documentary was trying not to come right out and say it. The main problem with health care in Palestine is Israel.

In July of 2009, I took a trip to the country of occupied Palestine, or the West Bank, or, in the words of some Israelis, the “newly acquired lands.” What I saw was not shocking if you have been paying attention. But for me, an American who has rarely been overly concerned about the heated politics of the Middle East, it was a revelation.

I was lucky to have been included as a witness on a recent Physicians for Peace mission to Ramallah on the West Bank. My role was simply to document some of the clinics and seminars that Physicians for Peace conduct while guests of the Ministry of Health of the Palestinian Authority. I had been asked to use video to communicate some of the small victories of the mission — a child who found a new life because of a pharyngeal flap operation, a repair of a hare lip cleft palate, or maybe some other “happy ending” story that would quickly and graphically demonstrate the enormous good that PfP does on these missions to the “troubled areas” of the world.

I was up for it.

Little did I know that what I would find would change my view of the Palestine question forever.

And little did I know how hard it would be not to be “political” with my small story about a mission to make a small difference in the world.

But the truth of the matter is, there is nothing in Palestine now that is not political, from the smallest act of buying a banana, to the issue of whether the Palestinians should be allowed to have radiology machines capable of treating the population with modern techniques, whether the local drug store can carry antibiotics or not, whether they will have simple antiseptics, or whether one can go to the hospital to have a baby or be forced to have it at home with a midwife in a house with no running water. It’s all political. In some places in the world the phrase “Oh, I am not political,” is a luxury that is not a real option. And this is especially true for anyone who lives on the West Bank.

With this video I wanted to tell a story of the good works done by some good people who were trying to make a difference in people’s lives in the Middle East. But I discovered that if I tried to get rid of the politics, I couldn’t tell the story. It’s as simple as a map that shows where people now live, and who used to live where.

Map from the United Nations.

CLICK ON IMAGE TO ENLARGE

It’s a map that tells a story that no rhetoric can explain away. It’s as simple as the 400 miles of walls being erected by Israel as they disenfranchise a people, and no matter how much they deny it, Israelis “ethnically cleanse” the lands where they plan to live. Not all Israelis of course, but the party in power believes that the “manifest destiny” of Israel requires that they make life as hard as possible for the population of the country that they plan someday to completely occupy.

“The Palestinians can leave, they can go anywhere in the Middle East, they are Arabs. We are Jews, we only have here, our motherland.”

Thus, no story about health care in Palestine can be free of the background of the political issues that surround every act in the West Bank.

Physicians for Peace are the good guys. They go into countries all over the world. They bring skills and relationships and the best wishes and the best impulses on the planet. They bring with them the heart and soul of America.

Some people say “support our troops”; my instincts say, if you want to support America, then do what you can to support the people who win hearts and minds through their generosity and sense of decency. As someone once said, any fool can burn down a barn, but it takes skill and care to build one.

A Medical Mission to Palestine is about building the things that matter.

[Bob Simmons is a veteran broadcaster with over 30 years experience in most aspects of radio. He is a graduate of the University of Texas and presently lives in Austin where he has business interests and pursues his longtime avocations of photography and video production.]

A Medical Mission to Palestine – Part 2 from Telebob on Vimeo.

A Medical Mission to Palestine – Part 3 from Telebob on Vimeo.

A Medical Mission to Palestine – Part 4 from Telebob on Vimeo.

Also see:

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