Collège de France
August 18, 2010

Professor Noam Chomsky explains the 2008 bubble, democracy and neo-liberalism / corporatism i.e. the economic / monetary system, from an American perspective...

Covert Operations— The billionaire brothers who are waging a war against Obama

Sullivan said the man kept repeating that he wanted to kill himself. "It seemed almost as if he was interested in being admitted."

Across the country, doctors like Sullivan are facing a spike in psychiatric emergencies — attempted suicide, severe depression, psychosis — as states slash mental health services and the country's worst economic crisis since the Great Depression takes its toll.

This trend is taxing emergency rooms already overburdened by uninsured patients who wait until ailments become acute before seeking treatment.

"These are people without a previous psychiatric history who are coming in and telling us they've lost their jobs, they've lost sometimes their homes, they can't provide for their families, and they are becoming severely depressed," said Dr. Felicia Smith, director of the acute psychiatric service at Massachusetts General Hospital in Boston... 

As Toni Kelly battled lymphoma, first with a bone marrow transplant and then with brutal rounds of chemotherapy, she worried obsessively that her four-year struggle would destroy her family's finances.

Her husband, Doug, refused to consider her pleas to stop pursuing costly therapies. But she knew that after she died, which she did on Sept. 29, there was one way she could keep from adding to the $200,000 in medical debt she would leave behind. Like a growing proportion of Americans, she said she wanted her body to be cremated.

"We did everything we could to cut down other costs, and one of the things Toni said was, ‘Let's find out how much it costs to be cremated,' " Mr. Kelly said. "If there was a way we could save even $500 or $1,000, it didn't make a difference. Her major thing was not ruining the family."

All but taboo in the United States 50 years ago, cremation is now chosen over burial in 41 percent of American deaths, up from 15 percent in 1985, according to the Cremation Association of North America. Economics is clearly one of the factors driving that change...

Prisoners are now making more than just license plates and road signs. Oregon's prison factories are perhaps best known for the "Prison Blues" line of blue jeans and other clothing sold on the open market. Tennessee prisoners have manufactured clothes for Kmart and JC Penney, as well as wooden rocking ponies for Eddie Bauer and, more recently, hardwood flooring. Prisoners in Ohio produced car parts for Honda until the United Auto Workers intervened. Prisoners have been employed in data entry and computer circuit board assembly programs, and have even worked in a TWA call center. Incarcerated workers in Utah make cold-weather clothing for Northern Outfitters, while Arkansas prisoners produce cable assemblies and wire harnesses used in medical equipment.

Once private sector companies were allowed to partner with PIECP prison industries to manufacture products and make them available to the general public, they began seeking ways around the program's mandatory requirements, which were interfering with the corporate goal of generating more profit...

Yesterday, a Deutsche Bank branch in Atlanta had requested the eviction of Vita Lee, a 103-year-old Atlanta woman, and her 83-year-old daughter. Both were terrified of being removed from their home of 53 years and had no idea where they'd go next.

But when the movers hired by the bank and police were dispatched to evict the two women, they had a change of heart. In a huge victory for the 99 Percent, the movers "took one look at" Lee and decided not to go through with it.

Coming Apart

After 9/11 transfixed America, the country's problems were left to rot.

by George Packer
The New Yorker
September 12, 2011

What were the American people to do in this vast new war? In his address to Congress on September 20, 2001—the speech that gave his most eloquent account of the meaning of September 11th—the President told Americans to live their lives, hug their children, uphold their values, participate in the economy, and pray for the victims. These quiet continuities were supposed to be reassuring, but instead they revealed the unreality that lay beneath his call to arms. Wasn't there anything else? Should Americans enlist in the armed forces, join the foreign service, pay more taxes, do volunteer work, study foreign languages, travel to Muslim countries? No—just go on using their credit cards. Bush's Presidency would emulate Woodrow Wilson's and Warren G. Harding's simultaneously. Never was the mismatch between the idea of the war and the war itself more apparent. Everything had changed, Bush announced, but not to worry—nothing would change...

Mead writes that America's future belongs to the "Jacksonians": lower-middle-class white Americans who are patriotic, religious, insular, self-reliant, ready to take the fight ruthlessly to the enemy abroad, and hostile to élites at home, their passions best articulated by George W. Bush in his "dead or alive" mode. In short, people like the residents of Surry County, North Carolina. Mead, who was educated at Groton and Yale, is confident that he knows and understands such people. Their perpetual rage, amplified on Fox News and on talk radio, pleases him, and since their power, right or wrong, is surely rising, he hails it. Mead's Jacksonians are also devotees of "millennial capitalism." "A Jacksonian revolt against élites is running in harmony with the structural needs of the economy," he writes. By this logic, laid-off textile workers will land in good jobs as long as they continue to despise pointy-headed experts who keep trying to mess with the economy. Mead's argument is a study in élitism that no longer believes in its own right to exist.

Soon after the book's publication, the Bush Doctrine lay in ruins, as the Administration's ambition to mold Iraq into a tidy secular democracy came apart. Then, in September, 2008, the bottom fell out of "millennial capitalism." Suddenly, the whole notion of an American Revival looked like an absurd mirage. That a writer of Mead's calibre could fall under its sway underscores the intellectual confusion that followed the tremendous surprise of September 11th. In his eagerness to imagine an "American grand strategy in a world at risk," he didn't bother to notice the problems festering at home...

Critics of President Obama never tire of blaming him for today's high deficits. But if blame belongs with one president, it belongs with Obama's predecessor, George W. Bush. The chart in this article, which the New York Times created based upon figures from the Center on Budget and Policy Priorities, illustrates this point very clearly. But it's worth reviewing the history here, because while it's familiar to most of us who follow politics it doesn't seem to get a lot of attention in the political debate.

The Republicans embraced a philosophy of no new taxes or revenues that had little relation to reality-except for the fact that their long-standing goal has been to shrink the size of the federal government. This began with the major tax cut passed early in George W. Bush's presidency, which purposely put serious pressure on domestic programs and which some saw at the time as folly-folly with grim implications for the future. That tax cut, renewed in December with Obama's assent (he didn't have the votes to stop it, and he got some stimulus money in exchange), began the Republicans' march from the $137 billion surplus Bill Clinton had bequeathed the country to the deficit of $1.2 trillion when Bush left office. It accounts for more than one quarter of the current deficit.

Smash The Ceiling
by James Surowiecki
for the August 1, 2011 issue of The New Yorker

In the past few years, the U.S. economy has been beset by the subprime meltdown, skyrocketing oil prices, the Eurozone debt crisis, and even the Tohoku earthquake. Now it's staring at a new problem-a failure to raise the debt ceiling, which would almost certainly throw the economy back into recession. Unlike those other problems, however, this one would be wholly of our own making. If the economy suffers as a result, it'll be what a soccer fan might call the biggest own goal in history.

The truth is that the United States doesn't need, and shouldn't have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There's no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn't risk economic chaos-namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn't raised, we'll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he'll end up violating the debt ceiling.

As it happens, the debt ceiling, which was adopted in 1917, did have a purpose once-it was a way for Congress to keep the President accountable. Congress used to exercise only loose control over the government budget, and the President was able to borrow money and spend money with little legislative oversight. But this hasn't been the case since 1974; Congress now passes comprehensive budget resolutions that detail exactly how the government will tax and spend, and the Treasury Department borrows only the money that Congress allows it to. (It's why TARP, for instance, required Congress to pass a law authorizing the Treasury to act.) This makes the debt ceiling an anachronism. These days, the debt limit actually makes the President less accountable to Congress, not more: if the ceiling isn't raised, it's President Obama who will be deciding which bills get paid and which don't, with no say from Congress.

On the day the family moved, there were officially 14.1 million unemployed Americans, or 9.2 per cent of the workforce. Hartzell himself probably isn't counted in these statistics. In recent years, he has fallen into the more nebulous categories of the part-time employed, the long-term unemployed, and the "marginally attached"-the no-longer-looking unemployed. Economists report that the broader, and more accurate, unemployment rate is 16.2 per cent. Three years after the economic meltdown, nearly one in six Americans are out of work.

In Washington, President Barack Obama and Congress are engaged in high-drama brinksmanship, like members of an ordnance-disposal unit arguing about how to defuse a huge ticking bomb. Obama, securely in character, called on all sides to rise above petty politics, acknowledged the practical realities of divided government, and proposed a grand compromise that would lower the deficit by four trillion dollars. According to the Times' Nate Silver, Obama's offer, in its roughly four-to-one balance between spending cuts and revenue increases, falls to the right of the average American voter's preference; in fact, it may outflank the views of the average Republican. Among other drastic cuts to domestic spending, the President proposes a ten-year, hundred-billion-dollar reduction in federal contributions to Medicaid, a program that helped provide new sets of teeth for Danny Hartzell and his wife just before their move...

The president's failure to demand a reckoning from the moneyed interests who brought the economy down has cursed his first term, and could prevent a second.

Frank Rich Blasts Obama For Letting Wall Street Off the Hook
by Matt Taibbi
Rolling Stone

A lot of people are talking about Frank Rich's explosive new article in New York magazine. I think it is a remarkable thing, the latest and maybe the most comprehensive in an increasingly lengthy series of articles and investigations into the Obama administration's failure to properly investigate the causes of the financial crisis.

By now this is not quite a mainstream media drumbeat, but it's coming close: between the reporting of Louise Story and Gretchen Morgenson at the New York Times to the recent not-terribly-laudatory piece on New York Southern District U.S. Attorney Preet Bharara by the New Yorker's George Packer, to Eliot Spitzer's bitter commentary on the subject on CNN, to my own bleatings, and now this Rich broadside, it seems quite clear that the Obama administration's failure to clean up Wall Street is becoming a matter of some fascination with the few investigative journalists who are not covering the Casey Anthony case.

This investigation has the potential to be a Mother of All Nightmares situation for the banks for a couple of reasons. For one thing, the decision to go after the securitization process is a total prosecutorial bullseye. This is the ugly heart of the wide-scale fraud scheme of the bubble era. Again, the business model during this time was a giant bait-and-switch scam. Sleazy lenders like Countrywide and New Century first created huge masses of bad loans, committing every conceivable kind of fraud to get people into loans (from doctoring income statements with white-out to phonying FICO scores to engineering fake appraisals). They then moved the bad loans quickly to the big banks, which pooled them and chopped them up (this is the "securitization" process), sprinkled hocus-pocus math on them, and them sold them to suckers around the world as AAA-rated securities.

Rolling Stone
By Matt Taibbi
May 11, 2011

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges.
 

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.