Tuesday, December 7, 2010

Galbraith on the failed president, which side is he on?

Galbraith on the failed president, which side is he on?

James K. Galbraith
Economist, Author

Posted: December 6, 2010 10:48 AM

Whose Side Is the White House On?
I want to raise a hard question -- a question on which Americans are divided. It seems to me, though, we will get nowhere unless we realize where we are, what has actually happened, and what the future most likely holds.

Recovery begins with realism and there is nothing to be gained by kidding ourselves. On the topics that I know most about, the administration is beyond being a disappointment. It's beyond inept, unprepared, weak, and ineffective. Four and again two years ago, the people demanded change. As a candidate, the President promised change. In foreign policy and the core economic policies, he delivered continuity instead. That was true on Afghanistan and it was and is true in economic policy, especially in respect to the banks. What we got was George W. Bush's policies without Bush's toughness, without his in-your-face refusal to compromise prematurely. Without what he himself calls his understanding that you do not negotiate with yourself.

It's a measure of where we are, I think, that at a meeting of Americans for Democratic Action, you find me comparing President Obama unfavorably to President George W. Bush.

In economic policy it was said earlier we have a lack of narrative. Recently, Gregory King asked why the people didn't know that the Republican Party is uniformly and massively opposed to job programs, to state and local assistance, and to every legislative measure that might aid and promote economic recovery from the worst crisis and recession in modern times. Why is that that they didn't know? Could it have anything to do with the fact that the White House didn't tell them?

And why was that?

The president deprived himself of any chance to develop a narrative from the beginning by surrounding himself with holdover appointments from the Bush and even the Clinton administrations: Secretary Geithner, Chairman Bernanke, and, since we're here at Harvard, I'll call him by his highest title, President Summers. These men have no commitment to the base, no commitment to the Democratic Party as a whole, no particular commitment to Barack Obama, and none to the broad objective of national economic recovery that can be detected from their actions.

With this team the President also chose to cover up economic crime. Not only has the greatest wave of financial fraud in our history gone largely uninvestigated and unpunished, the government and this administration with its stress tests (which were fakes), its relaxation of accounting standards which permitted banks to hold toxic assets on their books at far higher prices than any investor would pay, with its failure to make criminal referrals where these were clearly warranted, with its continuation in office -- sometimes in acting capacities -- of some of the leading non-regulators of the earlier era, has continued an ongoing active complicity in financial fraud. And the perpetrators, of course, prospered as never before: reporting profits that they would not have been able to report under honest accounting standards and converting tax payer support into bonuses; while at the same time cutting back savagely on loans to businesses and individuals, and ramping up foreclosures, much of that accomplished with forged documents and perjured affidavits.

Could the President and his administration have done something? Yes, they could have. Where was the Federal Deposit Insurance Corporation? Why did they choose not to implement the law -- the Prompt Corrective Action law -- which requires the federal government to take into receivership financial institutions when there is a significant risk of large taxpayer losses to the insurance fund? Where were the FBI and the Department of Justice? Did the President do anything? No. Is he doing anything now? No. Why not? The most likely answer is that he did not want to. My understanding, in fact, is that there was one meeting where this issue was raised, and the President stated that his economic team had assured him they had the situation under control.

On the larger economic policy front, the White House gave away the game from the beginning. How? First by guessing at the scale of the disaster. When leading economic advisers (I believe, in fact, it was President Summers) announced that the unemployment rate would peak at 8%, they not only guessed wrong, but gave away the right to assign responsibility to the previous administration when things got worse. This was either elementary bad politics or deliberate self-sabotage. But it gets worse. The optimistic forecast helped to justify a weak program. Useful things were done, but not nearly enough to convey the impression of a forceful policy to the broader public. Then once the banks were taken care of and the stock market took off again, it seems clear that the team at the White House didn't care anymore.

Again, could they have done differently? Of course. The President could have told the truth, which is that we faced a historic meltdown, a collapse of the core financial institutions of our economy, and that we had really no way of knowing how bad economic conditions might get or how long this would endure and that therefore the situation would require a full mobilization: all resources, all hands on deck, major departures of policy, no holding back, and the responsibility for trouble and failure falling plainly on those who would obstruct the course. None of the people he chose to advise him on economic policy was remotely capable of thinking in those terms.

We've learned from Vic Fingerhut and Mike Lux that the administration went down in public esteem when people realized it was working for the banks and not for them. Why did they think this? Why did they go from "blaming Bush and Wall Street to blaming Obama and Wall Street"? Because plainly they could see what was in front of their faces. Except in manner, President Bush never really pretended to be a President for ordinary folks; President Obama did. Bush was who he was; Obama held out, fostered, and promoted vast hopes, mobilizing the American population behind his leadership on that basis. And he disappointed those hopes -- to use a very harsh word, one could say he has betrayed those hopes. How can one therefore blame the voters for acting as they have acted?

What happens next? Let's again not kid ourselves, we have lost a great many seats in the House of Representatives and the House of Representatives isn't coming back into a Democratic majority in the near future. Simply because of the balance of exposures -- the larger numbers of Democratic Senators exposed to reelection in the next cycle, the greatest likelihood is that the Senate will also go Republican in two years time. President Obama has set his course. He has surrounded himself with the advisers of his choice and as he moves to replace President Summers we hear from the press that the priority is to "repair the rift with his investors on Wall Street." What does that tell you? It tells me that he does not have President Clinton's fighting and survival instincts. I've not heard one good reason all day to believe that we are going to see from this White House the fight that we want, that he could win in two years, or any reason we should be backing him now.

The Democratic Party has become too associated with Wall Street. This is a fact. It is a structural problem. It seems to me that we as progressives need -- this is my personal position -- to draw a line and decide that we would be better off with an under-funded, fighting progressive minority party than a party marked by obvious duplicity and constant losses on every policy front as a result of the reversals in our own leadership.

What is at stake in the long run? Two things, mainly, in my view. First, it seems to me that we as progressives need to make an honorable defense of the great legacies of the New Deal and Great Society -- programs and institutions that brought America out of the Great Depression and bought us through the Second World War, brought us to our period of greatest prosperity, and the greatest advances in social justice. Social Security, Medicare, housing finance -- the front-line right now is the foreclosure crisis, the crisis, I should say, of foreclosure fraud -- the progressive tax code, anti-poverty policy, public investment, public safety, and human and civil rights. We are going to lose these battles-- get used to it. But we need to make an honorable fight, to state clearly what our principles are and to lay down a record which is trustworthy for the future.

Beyond this, bold proposals are what we should be advancing now; even when they lose, they have their value. We can talk about job programs; we can talk about an infrastructure bank; we can talk about Juliet Schor's idea of a four-day work week; we can talk about my idea of expanding Social Security and creating an early retirement option so that people who are older and unemployed or anxious to get out of the labor force can leave on comfortable terms, and so create job openings for younger people who, as we've heard today, are facing very long periods of extremely aggravating and frustrating unemployment; we can talk about establishing a systematic program of general revenue sharing to support state and local governments, we can talk about the financial restructuring we so desperately need and that we'll have to have if we are going to have a country which has a viable private credit system and in which large financial power is not constantly dictating the terms of every political maneuver.

We are not going to get these things, but we should have a clearly defined program so that people know what they are. And then, frankly, as was said earlier today, said most elegantly by Jeff Madrick, in the long run we need to recognize that the fate of the entire country is at stake. Its governance can't be entrusted indefinitely to incompetents, hacks, and lobbyists. Large countries can and do fail, they have done so in our own time. And the consequences are very grave: drastic declines in services, in living standards, in life expectancies, huge increases in social tension, in repression, and in violence. These are the consequences of following through with crackpot ideas such as those embodied in the Bowles-Simpson deficit commission, as Jeff Madrick again outlined, such notions as putting arbitrary limits on the scale of government, or arbitrary limits on the top tax rate affecting the wealthiest Americans.

This isn't a parlor game. The outcome isn't destined to be alright. It will not necessarily end in progress whatever happens. What we do, how we proceed, and how we effectively resist what is plainly about to happen, matters very greatly for the future of our country, of our children, and of another generation to come. We need to lose our fear, our hesitation, and our unwillingness to face the facts. If we thereby lose some of our hopes, let's remember the dictum of William of Orange that "it is not necessary to hope in order to persevere."

The President should know that, as Lincoln said to the Congress in the dark winter of 1862, he "cannot escape history." And we are heading now into a very dark time, so let's face it with eyes open. And if we must, let's seek leadership that shares our values, fights for our principles, and deserves our trust.

This post is adapted from a speech given on November 20, 2010 at the ADA Education Fund's Post-election Conference at the Harvard Kennedy School. It originally appeared on New Deal 2.0.

Friday, December 11, 2009

Obama's Big Sellout

From Rollingstone Magazine:


Obama's Big Sellout

The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway


Posted Dec 09, 2009

Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

Then he got elected.

What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.

How could Obama let this happen? Is he just a rookie in the political big leagues, hoodwinked by Beltway old-timers? Or is the vacillating, ineffectual servant of banking interests we've been seeing on TV this fall who Obama really is?

Whatever the president's real motives are, the extensive series of loophole-rich financial "reforms" that the Democrats are currently pushing may ultimately do more harm than good. In fact, some parts of the new reforms border on insanity, threatening to vastly amplify Wall Street's political power by institutionalizing the taxpayer's role as a welfare provider for the financial-services industry. At one point in the debate, Obama's top economic advisers demanded the power to award future bailouts without even going to Congress for approval — and without providing taxpayers a single dime in equity on the deals.

How did we get here? It started just moments after the election — and almost nobody noticed.

'Just look at the timeline of the Citigroup deal," says one leading Democratic consultant. "Just look at it. It's fucking amazing. Amazing! And nobody said a thing about it."

Barack Obama was still just the president-elect when it happened, but the revolting and inexcusable $306 billion bailout that Citigroup received was the first major act of his presidency. In order to grasp the full horror of what took place, however, one needs to go back a few weeks before the actual bailout — to November 5th, 2008, the day after Obama's election.

That was the day the jubilant Obama campaign announced its transition team. Though many of the names were familiar — former Bill Clinton chief of staff John Podesta, long-time Obama confidante Valerie Jarrett — the list was most notable for who was not on it, especially on the economic side. Austan Goolsbee, a University of Chicago economist who had served as one of Obama's chief advisers during the campaign, didn't make the cut. Neither did Karen Kornbluh, who had served as Obama's policy director and was instrumental in crafting the Democratic Party's platform. Both had emphasized populist themes during the campaign: Kornbluh was known for pushing Democrats to focus on the plight of the poor and middle class, while Goolsbee was an aggressive critic of Wall Street, declaring that AIG executives should receive "a Nobel Prize — for evil."

But come November 5th, both were banished from Obama's inner circle — and replaced with a group of Wall Street bankers. Leading the search for the president's new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama's biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters — chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).

Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm. And to help him pick Obama's economic team, Froman brought in none other than Jamie Rubin, a former Clinton diplomat who happens to be Bob Rubin's son. At the time, Jamie's dad was still earning roughly $15 million a year working for Citigroup, which was in the midst of a collapse brought on in part because Rubin had pushed the bank to invest heavily in mortgage-backed CDOs and other risky instruments.

Now here's where it gets really interesting. It's three weeks after the election. You have a lame-duck president in George W. Bush — still nominally in charge, but in reality already halfway to the golf-and-O'Doul's portion of his career and more than happy to vacate the scene. Left to deal with the still-reeling economy are lame-duck Treasury Secretary Henry Paulson, a former head of Goldman Sachs, and New York Fed chief Timothy Geithner, who served under Bob Rubin in the Clinton White House. Running Obama's economic team are a still-employed Citigroup executive and the son of another Citigroup executive, who himself joined Obama's transition team that same month.

So on November 23rd, 2008, a deal is announced in which the government will bail out Rubin's messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees. It is a terrible deal for the government, almost universally panned by all serious economists, an outrage to anyone who pays taxes. Under the deal, the bank gets $20 billion in cash, on top of the $25 billion it had already received just weeks before as part of the Troubled Asset Relief Program. But that's just the appetizer. The government also agrees to charge taxpayers for up to $277 billion in losses on troubled Citi assets, many of them those toxic CDOs that Rubin had pushed Citi to invest in. No Citi executives are replaced, and few restrictions are placed on their compensation. It's the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin's fuck-up-rich tenure at Citi. "If you had any doubts at all about the primacy of Wall Street over Main Street," former labor secretary Robert Reich declares when the bailout is announced, "your doubts should be laid to rest."

It is bad enough that one of Bob Rubin's former protégés from the Clinton years, the New York Fed chief Geithner, is intimately involved in the negotiations, which unsurprisingly leave the Federal Reserve massively exposed to future Citi losses. But the real stunner comes only hours after the bailout deal is struck, when the Obama transition team makes a cheerful announcement: Timothy Geithner is going to be Barack Obama's Treasury secretary!

Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup — Michael Froman — before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.

Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government's bailout generosity would not die with George W. Bush and Hank Paulson. "Geithner assures a smooth transition between the Bush administration and that of Obama, because he's already co-managing what's happening now," observed Stephen Leeb, president of Leeb Capital Management.

Left unnoticed, however, was the fact that Geithner had been hired by a sitting Citigroup executive who still had a big bonus coming despite his proximity to Obama. In January 2009, just over a month after the bailout, Citigroup paid Froman a year-end bonus of $2.25 million. But as outrageous as it was, that payoff would prove to be chump change for the banker crowd, who were about to get everything they wanted — and more — from the new president.

The irony of Bob Rubin: He's an unapologetic arch-capitalist demagogue whose very career is proof that a free-market meritocracy is a myth. Much like Alan Greenspan, a staggeringly incompetent economic forecaster who was worshipped by four decades of politicians because he once dated Barbara Walters, Rubin has been held in awe by the American political elite for nearly 20 years despite having fucked up virtually every project he ever got his hands on. He went from running Goldman Sachs (1990-1992) to the Clinton White House (1993-1999) to Citigroup (1999-2009), leaving behind a trail of historic gaffes that somehow boosted his stature every step of the way.

As Treasury secretary under Clinton, Rubin was the driving force behind two monstrous deregulatory actions that would be primary causes of last year's financial crisis: the repeal of the Glass-Steagall Act (passed specifically to legalize the Citigroup megamerger) and the deregulation of the derivatives market. Having set that time bomb, Rubin left government to join Citi, which promptly expressed its gratitude by giving him $126 million in compensation over the next eight years (they don't call it bribery in this country when they give you the money post factum). After urging management to amp up its risky investments in toxic vehicles, a strategy that very nearly destroyed the company, Rubin blamed Citi's board for his screw-ups and complained that he had been underpaid to boot. "I bet there's not a single year where I couldn't have gone somewhere else and made more," he said.

Despite being perhaps more responsible for last year's crash than any other single living person — his colossally stupid decisions at both the highest levels of government and the management of a private financial superpower make him unique — Rubin was the man Barack Obama chose to build his White House around.

There are four main ways to be connected to Bob Rubin: through Goldman Sachs, the Clinton administration, Citigroup and, finally, the Hamilton Project, a think tank Rubin spearheaded under the auspices of the Brookings Institute to promote his philosophy of balanced budgets, free trade and financial deregulation. The team Obama put in place to run his economic policy after his inauguration was dominated by people who boasted connections to at least one of these four institutions — so much so that the White House now looks like a backstage party for an episode of Bob Rubin, This Is Your Life!

At Treasury, there is Geithner, who worked under Rubin in the Clinton years. Serving as Geithner's "counselor" — a made-up post not subject to Senate confirmation — is Lewis Alexander, the former chief economist of Citigroup, who advised Citi back in 2007 that the upcoming housing crash was nothing to worry about. Two other top Geithner "counselors" — Gene Sperling and Lael Brainard — worked under Rubin at the National Economic Council, the key group that coordinates all economic policymaking for the White House.

As director of the NEC, meanwhile, Obama installed economic czar Larry Summers, who had served as Rubin's protégé at Treasury. Just below Summers is Jason Furman, who worked for Rubin in the Clinton White House and was one of the first directors of Rubin's Hamilton Project. The appointment of Furman — a persistent advocate of free-trade agreements like NAFTA and the author of droolingly pro-globalization reports with titles like "Walmart: A Progressive Success Story" — provided one of the first clues that Obama had only been posturing when he promised crowds of struggling Midwesterners during the campaign that he would renegotiate NAFTA, which facilitated the flight of blue-collar jobs to other countries. "NAFTA's shortcomings were evident when signed, and we must now amend the agreement to fix them," Obama declared. A few months after hiring Furman to help shape its economic policy, however, the White House quietly quashed any talk of renegotiating the trade deal. "The president has said we will look at all of our options, but I think they can be addressed without having to reopen the agreement," U.S. Trade Representative Ronald Kirk told reporters in a little-publicized conference call last April.

The announcement was not so surprising, given who Obama hired to serve alongside Furman at the NEC: management consultant Diana Farrell, who worked under Rubin at Goldman Sachs. In 2003, Farrell was the author of an infamous paper in which she argued that sending American jobs overseas might be "as beneficial to the U.S. as to the destination country, probably more so."

Joining Summers, Furman and Farrell at the NEC is Froman, who by then had been formally appointed to a unique position: He is not only Obama's international finance adviser at the National Economic Council, he simultaneously serves as deputy national security adviser at the National Security Council. The twin posts give Froman a direct line to the president, putting him in a position to coordinate Obama's international economic policy during a crisis. He'll have help from David Lipton, another joint appointee to the economics and security councils who worked with Rubin at Treasury and Citigroup, and from Jacob Lew, a former Citi colleague of Rubin's whom Obama named as deputy director at the State Department to focus on international finance.

Over at the Commodity Futures Trading Commission, which is supposed to regulate derivatives trading, Obama appointed Gary Gensler, a former Goldman banker who worked under Rubin in the Clinton White House. Gensler had been instrumental in helping to pass the infamous Commodity Futures Modernization Act of 2000, which prevented deregulation of derivative instruments like CDOs and credit-default swaps that played such a big role in cratering the economy last year. And as head of the powerful Office of Management and Budget, Obama named Peter Orszag, who served as the first director of Rubin's Hamilton Project. Orszag once succinctly summed up the project's ideology as a sort of liberal spin on trickle-down Reaganomics: "Market competition and globalization generate significant economic benefits."

Taken together, the rash of appointments with ties to Bob Rubin may well represent the most sweeping influence by a single Wall Street insider in the history of government. "Rather than having a team of rivals, they've got a team of Rubins," says Steven Clemons, director of the American Strategy Program at the New America Foundation. "You see that in policy choices that have resuscitated — but not reformed — Wall Street."

While Rubin's allies and acolytes got all the important jobs in the Obama administration, the academics and progressives got banished to semi-meaningless, even comical roles. Kornbluh was rewarded for being the chief policy architect of Obama's meteoric rise by being outfitted with a pith helmet and booted across the ocean to Paris, where she now serves as America's never-again-to-be-seen-on-TV ambassador to the Organization for Economic Cooperation and Development. Goolsbee, meanwhile, was appointed as staff director of the President's Economic Recovery Advisory Board, a kind of dumping ground for Wall Street critics who had assisted Obama during the campaign; one top Democrat calls the panel "Siberia."

Joining Goolsbee as chairman of the PERAB gulag is former Fed chief Paul Volcker, who back in March 2008 helped candidate Obama write a speech declaring that the deregulatory efforts of the Eighties and Nineties had "excused and even embraced an ethic of greed, corner-cutting, insider dealing, things that have always threatened the long-term stability of our economic system." That speech met with rapturous applause, but the commission Obama gave Volcker to manage is so toothless that it didn't even meet for the first time until last May. The lone progressive in the White House, economist Jared Bernstein, holds the impressive-sounding title of chief economist and national policy adviser — except that the man he is advising is Joe Biden, who seems more interested in foreign policy than financial reform.

The significance of all of these appointments isn't that the Wall Street types are now in a position to provide direct favors to their former employers. It's that, with one or two exceptions, they collectively offer a microcosm of what the Democratic Party has come to stand for in the 21st century. Virtually all of the Rubinites brought in to manage the economy under Obama share the same fundamental political philosophy carefully articulated for years by the Hamilton Project: Expand the safety net to protect the poor, but let Wall Street do whatever it wants. "Bob Rubin, these guys, they're classic limousine liberals," says David Sirota, a former Democratic strategist. "These are basically people who have made shitloads of money in the speculative economy, but they want to call themselves good Democrats because they're willing to give a little more to the poor. That's the model for this Democratic Party: Let the rich do their thing, but give a fraction more to everyone else."

Even the members of Obama's economic team who have spent most of their lives in public office have managed to make small fortunes on Wall Street. The president's economic czar, Larry Summers, was paid more than $5.2 million in 2008 alone as a managing director of the hedge fund D.E. Shaw, and pocketed an additional $2.7 million in speaking fees from a smorgasbord of future bailout recipients, including Goldman Sachs and Citigroup. At Treasury, Geithner's aide Gene Sperling earned a staggering $887,727 from Goldman Sachs last year for performing the punch-line-worthy service of "advice on charitable giving." Sperling's fellow Treasury appointee, Mark Patterson, received $637,492 as a full-time lobbyist for Goldman Sachs, and another top Geithner aide, Lee Sachs, made more than $3 million working for a New York hedge fund called Mariner Investment Group. The list goes on and on. Even Obama's chief of staff, Rahm Emanuel, who has been out of government for only 30 months of his adult life, managed to collect $18 million during his private-sector stint with a Wall Street firm called Wasserstein-Perella.

The point is that an economic team made up exclusively of callous millionaire-assholes has absolutely zero interest in reforming the gamed system that made them rich in the first place. "You can't expect these people to do anything other than protect Wall Street," says Rep. Cliff Stearns, a Republican from Florida. That thinking was clear from Obama's first address to Congress, when he stressed the importance of getting Americans to borrow like crazy again. "Credit is the lifeblood of the economy," he declared, pledging "the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money." A president elected on a platform of change was announcing, in so many words, that he planned to change nothing fundamental when it came to the economy. Rather than doing what FDR had done during the Great Depression and institute stringent new rules to curb financial abuses, Obama planned to institutionalize the policy, firmly established during the Bush years, of keeping a few megafirms rich at the expense of everyone else.

Obama hasn't always toed the Rubin line when it comes to economic policy. Despite being surrounded by a team that is powerfully opposed to deficit spending — balanced budgets and deficit reduction have always been central to the Rubin way of thinking — Obama came out of the gate with a huge stimulus plan designed to kick-start the economy and address the job losses brought on by the 2008 crisis. "You have to give him credit there," says Sen. Bernie Sanders, an advocate of using government resources to address unemployment. "It's a very significant piece of legislation, and $787 billion is a lot of money."

But whatever jobs the stimulus has created or preserved so far — 640,329, according to an absurdly precise and already debunked calculation by the White House — the aid that Obama has provided to real people has been dwarfed in size and scope by the taxpayer money that has been handed over to America's financial giants. "They spent $75 billion on mortgage relief, but come on — look at how much they gave Wall Street," says a leading Democratic strategist. Neil Barofsky, the inspector general charged with overseeing TARP, estimates that the total cost of the Wall Street bailouts could eventually reach $23.7 trillion. And while the government continues to dole out big money to big banks, Obama and his team of Rubinites have done almost nothing to reform the warped financial system responsible for imploding the global economy in the first place.

The push for reform seemed to get off to a promising start. In the House, the charge was led by Rep. Barney Frank, the outspoken chair of the House Financial Services Committee, who emerged during last year's Bush bailouts as a sharp-tongued critic of Wall Street. Back when Obama was still a senator, he and Frank even worked together to introduce a populist bill targeting executive compensation. Last spring, with the economy shattered, Frank began to hold hearings on a host of reforms, crafted with significant input from the White House, that initially contained some very good elements. There were measures to curb abusive credit-card lending, prevent banks from charging excessive fees, force publicly traded firms to conduct meaningful risk assessment and allow shareholders to vote on executive compensation. There were even measures to crack down on risky derivatives and to bar firms like AIG from picking their own regulators.

Then the committee went to work — and the loopholes started to appear.

The most notable of these came in the proposal to regulate derivatives like credit-default swaps. Even Gary Gensler, the former Goldmanite whom Obama put in charge of commodities regulation, was pushing to make these normally obscure investments more transparent, enabling regulators and investors to identify speculative bubbles sooner. But in August, a month after Gensler came out in favor of reform, Geithner slapped him down by issuing a 115-page paper called "Improvements to Regulation of Over-the-Counter Derivatives Markets" that called for a series of exemptions for "end users" — i.e., almost all of the clients who buy derivatives from banks like Goldman Sachs and Morgan Stanley. Even more stunning, Frank's bill included a blanket exception to the rules for currency swaps traded on foreign exchanges — the very instruments that had triggered the Long-Term Capital Management meltdown in the late 1990s.

Given that derivatives were at the heart of the financial meltdown last year, the decision to gut derivatives reform sent some legislators howling with disgust. Sen. Maria Cantwell of Washington, who estimates that as much as 90 percent of all derivatives could remain unregulated under the new rules, went so far as to say the new laws would make things worse. "Current law with its loopholes might actually be better than these loopholes," she said.

An even bigger loophole could do far worse damage to the economy. Under the original bill, the Securities and Exchange Commission and the Commodity Futures Trading Commission were granted the power to ban any credit swaps deemed to be "detrimental to the stability of a financial market or of participants in a financial market." By the time Frank's committee was done with the bill, however, the SEC and the CFTC were left with no authority to do anything about abusive derivatives other than to send a report to Congress. The move, in effect, would leave the kind of credit-default swaps that brought down AIG largely unregulated.

Why would leading congressional Democrats, working closely with the Obama administration, agree to leave one of the riskiest of all financial instruments unregulated, even before the issue could be debated by the House? "There was concern that a broad grant to ban abusive swaps would be unsettling," Frank explained.

Unsettling to whom? Certainly not to you and me — but then again, actual people are not really part of the calculus when it comes to finance reform. According to those close to the markup process, Frank's committee inserted loopholes under pressure from "constituents" — by which they mean anyone "who can afford a lobbyist," says Michael Greenberger, the former head of trading at the CFTC under Clinton.

This pattern would repeat itself over and over again throughout the fall. Take the centerpiece of Obama's reform proposal: the much-ballyhooed creation of a Consumer Finance Protection Agency to protect the little guy from abusive bank practices. Like the derivatives bill, the debate over the CFPA ended up being dominated by horse-trading for loopholes. In the end, Frank not only agreed to exempt some 8,000 of the nation's 8,200 banks from oversight by the castrated-in-advance agency, leaving most consumers unprotected, he allowed the committee to pass the exemption by voice vote, meaning that congressmen could side with the banks without actually attaching their name to their "Aye."

To win the support of conservative Democrats, Frank also backed down on another issue that seemed like a slam-dunk: a requirement that all banks offer so-called "plain vanilla" products, such as no-frills mortgages, to give consumers an alternative to deceptive, "fully loaded" deals like adjustable-rate loans. Frank's last-minute reversal — made in consultation with Geithner — was such a transparent giveaway to the banks that even an economics writer for Reuters, hardly a far-left source, called it "the beginning of the end of meaningful regulatory reform."

But the real kicker came when Frank's committee took up what is known as "resolution authority" — government-speak for "Who the hell is in charge the next time somebody at AIG or Lehman Brothers decides to vaporize the economy?" What the committee initially introduced bore a striking resemblance to a proposal written by Geithner earlier in the summer. A masterpiece of legislative chicanery, the measure would have given the White House permanent and unlimited authority to execute future bailouts of megaconglomerates like Citigroup and Bear Stearns.

Democrats pushed the move as politically uncontroversial, claiming that the bill will force Wall Street to pay for any future bailouts and "doesn't use taxpayer money." In reality, that was complete bullshit. The way the bill was written, the FDIC would basically borrow money from the Treasury — i.e., from ordinary taxpayers — to bail out any of the nation's two dozen or so largest financial companies that the president deems in need of government assistance. After the bailout is executed, the president would then levy a tax on financial firms with assets of more than $10 billion to repay the Treasury within 60 months — unless, that is, the president decides he doesn't want to! "They can wait indefinitely to repay," says Rep. Brad Sherman of California, who dubbed the early version of the bill "TARP on steroids."

The new bailout authority also mandated that future bailouts would not include an exchange of equity "in any form" — meaning that taxpayers would get nothing in return for underwriting Wall Street's mistakes. Even more outrageous, it specifically prohibited Congress from rejecting tax giveaways to Wall Street, as it did last year, by removing all congressional oversight of future bailouts. In fact, the resolution authority proposed by Frank was such a slurpingly obvious blow job of Wall Street that it provoked a revolt among his own committee members, with junior Democrats waging a spirited fight that restored congressional oversight to future bailouts, requires equity for taxpayer money and caps assistance to troubled firms at $150 billion. Another amendment to force companies with more than $50 billion in assets to pay into a rainy-day fund for bailouts passed by a resounding vote of 52 to 17 — with the "Nays" all coming from Frank and other senior Democrats loyal to the administration.

Even as amended, however, resolution authority still has the potential to be truly revolutionary legislation. The Senate version still grants the president unlimited power over equity-free bailouts, and the amended House bill still institutionalizes a system of taxpayer support for the 20 to 25 biggest banks in the country. It would essentially grant economic immortality to those top few megafirms, who will continually gobble up greater and greater slices of market share as money becomes cheaper and cheaper for them to borrow (after all, who wouldn't lend to a company permanently backstopped by the federal government?). It would also formalize the government's role in the global economy and turn the presidential-appointment process into an important part of every big firm's business strategy. "If this passes, the very first thing these companies are going to do in the future is ask themselves, 'How do we make sure that one of our executives becomes assistant Treasury secretary?'" says Sherman.

On the Senate side, finance reform has yet to make it through the markup process, but there's every reason to believe that its final bill will be as watered down as the House version by the time it comes to a vote. The original measure, drafted by chairman Christopher Dodd of the Senate Banking Committee, is surprisingly tough on Wall Street — a fact that almost everyone in town chalks up to Dodd's desperation to shake the bad publicity he incurred by accepting a sweetheart mortgage from the notorious lender Countrywide. "He's got to do the shake-his-fist-at-Wall Street thing because of his, you know, problems," says a Democratic Senate aide. "So that's why the bill is starting out kind of tough."

The aide pauses. "The question is, though, what will it end up looking like?"

He's right — that is the question. Because the way it works is that all of these great-sounding reforms get whittled down bit by bit as they move through the committee markup process, until finally there's nothing left but the exceptions. In one example, a measure that would have forced financial companies to be more accountable to shareholders by holding elections for their entire boards every year has already been watered down to preserve the current system of staggered votes. In other cases, this being the Senate, loopholes were inserted before the debate even began: The Dodd bill included the exemption for foreign-currency swaps — a gift to Wall Street that only appeared in the Frank bill during the course of hearings — from the very outset.

The White House's refusal to push for real reform stands in stark contrast to what it should be doing. It was left to Rep. Pete Kanjorski in the House and Bernie Sanders in the Senate to propose bills to break up the so-called "too big to fail" banks. Both measures would give Congress the power to dismantle those pseudomonopolies controlling almost the entire derivatives market (Goldman, Citi, Chase, Morgan Stanley and Bank of America control 95 percent of the $290 trillion over-the-counter market) and the consumer-lending market (Citi, Chase, Bank of America and Wells Fargo issue one of every two mortgages, and two of every three credit cards). On November 18th, in a move that demonstrates just how nervous Democrats are getting about the growing outrage over taxpayer giveaways, Barney Frank's committee actually passed Kanjorski's measure. "It's a beginning," Kanjorski says hopefully. "We're on our way." But even if the Senate follows suit, big banks could well survive — depending on whom the president appoints to sit on the new regulatory board mandated by the measure. An oversight body filled with executives of the type Obama has favored to date from Citi and Goldman Sachs hardly seems like a strong bet to start taking an ax to concentrated wealth. And given the new bailout provisions that provide these megafirms a market advantage over smaller banks (those Paul Volcker calls "too small to save"), the failure to break them up qualifies as a major policy decision with potentially disastrous consequences.

"They should be doing what Teddy Roosevelt did," says Sanders. "They should be busting the trusts."

That probably won't happen anytime soon. But at a minimum, Obama should start on the road back to sanity by making a long-overdue move: firing Geithner. Not only are the mop-headed weenie of a Treasury secretary's fingerprints on virtually all the gross giveaways in the new reform legislation, he's a living symbol of the Rubinite gangrene crawling up the leg of this administration. Putting Geithner against the wall and replacing him with an actual human being not recently employed by a Wall Street megabank would do a lot to prove that Obama was listening this past Election Day. And while there are some who think Geithner is about to go — "he almost has to," says one Democratic strategist — at the moment, the president is still letting Wall Street do his talking.

Morning, the National Mall, November 5th. A year to the day after Obama named Michael Froman to his transition team, his political "opposition" has descended upon the city. Republican teabaggers from all 50 states have showed up, a vast horde of frowning, pissed-off middle-aged white people with their idiot placards in hand, ready to do cultural battle. They are here to protest Obama's "socialist" health care bill — you know, the one that even a bloodsucking capitalist interest group like Big Pharma spent $150 million to get passed.

These teabaggers don't know that, however. All they know is that a big government program might end up using tax dollars to pay the medical bills of rapidly breeding Dominican immigrants. So they hate it. They're also in a groove, knowing that at the polls a few days earlier, people like themselves had a big hand in ousting several Obama-allied Democrats, including a governor of New Jersey who just happened to be the former CEO of Goldman Sachs. A sign held up by New Jersey protesters bears the warning, "If You Vote For Obamacare, We Will Corzine You."

I approach a woman named Pat Defillipis from Toms River, New Jersey, and ask her why she's here. "To protest health care," she answers. "And then amnesty. You know, immigration amnesty."

I ask her if she's aware that there's a big hearing going on in the House today, where Barney Frank's committee is marking up a bill to reform the financial regulatory system. She recognizes Frank's name, wincing, but the rest of my question leaves her staring at me like I'm an alien.

"Do you care at all about economic regulation?" I ask. "There was sort of a big economic collapse last year. Do you have any ideas about how that whole deal should be fixed?"

"We got to slow down on spending," she says. "We can't afford it."

"But what do we do about the rules governing Wall Street . . ."

She walks away. She doesn't give a fuck. People like Pat aren't aware of it, but they're the best friends Obama has. They hate him, sure, but they don't hate him for any reasons that make sense. When it comes down to it, most of them hate the president for all the usual reasons they hate "liberals" — because he uses big words, doesn't believe in hell and doesn't flip out at the sight of gay people holding hands. Additionally, of course, he's black, and wasn't born in America, and is married to a woman who secretly hates our country.

These are the kinds of voters whom Obama's gang of Wall Street advisers is counting on: idiots. People whose votes depend not on whether the party in power delivers them jobs or protects them from economic villains, but on what cultural markers the candidate flashes on TV. Finance reform has become to Obama what Iraq War coffins were to Bush: something to be tucked safely out of sight.

Around the same time that finance reform was being watered down in Congress at the behest of his Treasury secretary, Obama was making a pit stop to raise money from Wall Street. On October 20th, the president went to the Mandarin Oriental Hotel in New York and addressed some 200 financiers and business moguls, each of whom paid the maximum allowable contribution of $30,400 to the Democratic Party. But an organizer of the event, Daniel Fass, announced in advance that support for the president might be lighter than expected — bailed-out firms like JP Morgan Chase and Goldman Sachs were expected to contribute a meager $91,000 to the event — because bankers were tired of being lectured about their misdeeds.

"The investment community feels very put-upon," Fass explained. "They feel there is no reason why they shouldn't earn $1 million to $200 million a year, and they don't want to be held responsible for the global financial meltdown."

Which makes sense. Shit, who could blame the investment community for the meltdown? What kind of assholes are we to put any of this on them?

This is the kind of person who is working for the Obama administration, which makes it unsurprising that we're getting no real reform of the finance industry. There's no other way to say it: Barack Obama, a once-in-a-generation political talent whose graceful conquest of America's racial dragons en route to the White House inspired the entire world, has for some reason allowed his presidency to be hijacked by sniveling, low-rent shitheads. Instead of reining in Wall Street, Obama has allowed himself to be seduced by it, leaving even his erstwhile campaign adviser, ex-Fed chief Paul Volcker, concerned about a "moral hazard" creeping over his administration.

"The obvious danger is that with the passage of time, risk-taking will be encouraged and efforts at prudential restraint will be resisted," Volcker told Congress in September, expressing concerns about all the regulatory loopholes in Frank's bill. "Ultimately, the possibility of further crises — even greater crises — will increase."

What's most troubling is that we don't know if Obama has changed, or if the influence of Wall Street is simply a fundamental and ineradicable element of our electoral system. What we do know is that Barack Obama pulled a bait-and-switch on us. If it were any other politician, we wouldn't be surprised. Maybe it's our fault, for thinking he was different.

[From Issue 1093 — December 10, 2009] Rollingstone Magazine

Friday, November 13, 2009

Obama wants domestic spending cuts in next budget

Barack Obama's agenda is now clear:

Wall Street profits; working people pay and suffer... this is "the new normal."

Alan L. Maki

"The flow of red ink has been increased by war spending for Iraq and Afghanistan, recession-fighting stimulus and bank bailout spending and by reduced tax revenues from high unemployment and reduced personal and business income."

Obama wants domestic spending cuts in next budget
Shifting gears, Obama eyes domestic spending freeze, cuts to 5 percent in deficit-cutting bid


By Tom Raum and Andrew Taylor, Associated Press Writers
Friday November 13, 2009

WASHINGTON (AP) -- The Obama administration, mindful of public anxiety over the government's mushrooming debt, is shifting emphasis from big-spending policies to deficit reduction. Domestic agencies have been told to brace for a spending freeze or cuts of up to 5 percent as part of a midterm election-year push to rein in record budget shortfalls.

Yet with the economy still in distress and unemployment pushing past 10 percent, prospects for making a dent in a trillion-dollar-plus annual deficit seem slight. And since the Pentagon and Department of Veterans Affairs would likely be shielded from such cuts, overtures toward trimming the deficit may hold more symbolic value than substance.

President Barack Obama is expected to make post-recession spending restraint a key theme of his State of the Union address in January and an important element of the budget he submits to Congress a few weeks later. He is under increasing pressure, including from moderate and conservative members of his own party, to show he is serious about tackling a deficit that has become both an economic and political liability.

Not since billionaire Ross Perot made budget-balancing the centerpiece of his 1992 third-party presidential bid has so much public concern been voiced over the gulf between what the government spends and what it takes in.

White House budget director Peter Orszag on Friday told The Associated Press it is imperative to start curbing the flow of red ink. But he called it a balancing act and said acting too fast could undercut what appears to be a fledgling economic recovery.

Orszag has said the spending blueprint, for the budget year that begins Oct. 1, 2010, would put the nation "back on a fiscally sustainable path" and suggested it would include a mix of spending cuts and new revenue-producing measures.

Democratic officials in the White House and on Capitol Hill say options for locking in budget savings include caps on the amount of money Congress gets to distribute each year for agency operating budgets. They spoke on condition of anonymity to frankly discuss internal deliberations.

The White House told agencies to submit spending plans that would, at the very least, freeze their budgets, and to prepare for cuts as high as 5 percent. That edict is but one round in internal administration deliberations on the budget. Cabinet heads are sure to seek exemptions, and Orszag warned that firm budget decisions haven't been made.

The administration also is weighing committing to debt reduction any unspent funds from the $700 billion bank bailout program. However, such a move would be largely a bookkeeping shift and not likely to yield much in the way of deficit reduction.

The new emphasis at the White House on deficit-reduction follows last month's report showing the economy surged at a 3.5 percent annual pace in the July-September quarter after contracting for four consecutive quarters. That suggested the recession is likely over -- even though job losses are expected to continue for some time.

Congress will soon vote on legislation to raise the debt ceiling -- the limit on how much the government can borrow -- above the present $12.1 trillion. On Friday, the nation's overall debt stood at $11.99 trillion. Some fiscally conservative lawmakers have said they would not vote for further increases in the debt ceiling until the administration took deficit-cutting steps.

The national debt is the accumulation of annual budget deficits. The deficit for the 2009 budget year, which ended on Sept. 30, set an all-time record in dollar terms at $1.42 trillion.

The flow of red ink has been increased by war spending for Iraq and Afghanistan, recession-fighting stimulus and bank bailout spending and by reduced tax revenues from high unemployment and reduced personal and business income.

Polls show rising public concern over deficits. Exit polls from elections earlier this month showed clear majorities of Virginia and New Jersey voters said they were worried about the direction of the nation's economy. In both states, Republicans won gubernatorial seats that had been held by Democrats.

Republicans are seeking to capitalize on this month's Democratic election setbacks and rising voter concerns over the burst in federal spending. House Minority Leader John Boehner, R-Ohio, said the Democrats' "so-called `war on deficits' comes about a year late and more than a trillion dollars short."

"Spending in Washington has been out of control for years, and instead of changing it as they promised they would, Speaker Nancy Pelosi and President Obama have stepped on the accelerator," Boehner said in a statement.

Pollster Andrew Kohut, director of the Pew Research Center, said increasingly "the percentage of people naming the deficit as a problem is pretty substantial."

"It may be approaching the level of concern we had in the early 1990s when Ross Perot rode that horse for quite some time politically," Kohut said.

Still, politicians have typically avoided politically painful deficit-cutting steps in election years.

Stanley Collender, a budget expert at Qorvis Communications and a former staff aide to House and Senate budget committees, said if the administration could actually accomplish cuts in discretionary spending on the order of 5 percent -- a big "if" -- it would be a notable step toward bringing down deficits.

Despite today's hard times, putting such measures in play sooner rather than later makes sense since they wouldn't take effect until next Oct. 1, when jobs hopefully will be coming back and the economy humming again, Collender said. "It's sort of like an outfielder trying to catch a fly ball. You try to get to where the ball's going to be rather than where it is at that particular moment."

The deficit-cutting drive comes as Obama traveled to Asia where several nations, especially China, have expressed concerns about the size of U.S. deficits. China is the largest foreign holder of U.S. debt and policymakers worry that alarm over deficits could push foreigners into cutting back on their purchases of Treasury securities.

Monday, June 29, 2009


Lots of food for thought...




NEW YORK, 26 JUNE 2009

United Nations Colleagues,
Representatives of Civil Society,
Brothers and Sisters all,

We have come to the middle of the third day of this historic United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development. I congratulate you all for successfully initiating the global conversation on the economic crisis that continues to unfold around us and for beginning an in-depth, unprecedented review of the international financial and economic architecture.

The world has had the opportunity to hear the voices of the G-192. All the Members of the General Assembly have had and continue to have the chance to express their points of view. Today our efforts have culminated in the adoption by consensus of an outcome document that represents the first step in a long process of putting the world on a new path towards SOLIDARITY, stability and sustainability.

The United Nations General Assembly, the G-192, has now been established as the central forum for the discussion of world financial and economic issues, and this in itself is a major achievement. In addition, the General Assembly has been asked to follow up on these issues through an ad hoc open-ended working group.

The issues to be followed up range from crisis mitigation – including global stimulus measures, special drawing rights (SDRs) and reserve currencies – to topics such as the restructuring of the financial and economic system and architecture, including reform of the international financial institutions and the role of the United Nations; external debt; international trade; investment; taxation; development assistance; South-South cooperation; new forms of financing; corruption and illicit financial flows; and regulation and monitoring.

At the same time, it has been recognized that the financial and economic crisis must not delay the necessary global response to climate change and environmental degradation through initiatives for building a "green economy".

The G-192 has proved itself capable of reaching consensus on the convening and modalities of this Conference and on a substantive outcome document that addresses issues of great importance to humanity. It has also been able to chart a course for carrying the process forward on the basis of the lines of action set out in the Conference outcome document.

We have had three days of very successful work and, now that the outcome document has been formally adopted, it is only fitting that we salute each other's efforts and, in particular, that we congratulate the two facilitators, Ambassador Frank Majoor of the Kingdom of the Netherlands and Ambassador Camilo Gonsalves of Saint Vincent and the Grenadines. Of course, we also express our warmest thanks to the President's Commission of Experts, which was so ably coordinated by Professor Joseph Stiglitz.

We are happy but not content, or rather, not completely satisfied. Other crises loom on the horizon, such as the clean water, global warming, food, energy and humanitarian crises affecting millions of our brothers and sisters, especially children suffering from hunger and thirst.

We must all join forces to confront these crises. The proposals we have adopted today point in this direction. But much remains to be done.

We are heartened by the expressions of political will to shoulder our shared responsibility to cooperate, but we will not be content so long as these pressing issues remain unresolved.

My role as President of this General Assembly, which brings together representatives of all the world's peoples, is to invite you to look beyond today's economic concerns and to hold out hope for the common future of the Earth and of humanity.

We may well ask, what next? Not necessarily in terms of the economy, but in terms of humanity. Where are we headed? At this point it is unlikely that anyone, however wise, can answer this question with certainty. But even without having the answers, we can all seek and build together the consensus that will lead us towards a more hopeful future for us all and for Mother Earth.

This reminds me of the vision of the great French scientist, archaeologist and mystic Pierre Teilhard de Chardin. In China, where he carried out his research on “Homo pekinensis”, he had something like a vision.

Looking at the advances in technology, trade and communications that were shortening distances and laying the foundations for what he liked to call planetization, rather than globalization, Teilhard de Chardin was already saying, in the 1930s, that we were witnessing the emergence of a new era for the Earth and for humanity.

What was about to appear, de Chardin told us, was the noosphere, after the emergence in the evolutionary process of the anthroposphere, the biosphere, the hydrosphere, the atmosphere and the lithosphere. Now comes the new sphere, the sphere of synchronized minds and hearts: the noosphere. As we know, the Greek word noos refers to the union of the spirit, the intellect and the heart.

Where are we headed? I venture to believe and hope that we are all headed towards the slow but unstoppable emergence of the noosphere. Human beings and peoples will discover and accept each other as brothers and sisters, as a family and as a single species capable of love, solidarity, compassion, non-violence, justice, fraternity, peace and spirituality.

Is this a utopia? It is undoubtedly a utopia, but a necessary one. It guides us in our search. A utopia is, by definition, unattainable. But it is like the stars: they are unreachable, but what would the night sky be without stars? It would be nothing but darkness and we would be disoriented and lost. A utopia likewise lends direction and purpose to our lives and struggles.

The noosphere, then, is the next step for humanity. Allow me a small digression: if, in the time of the dinosaurs, which inhabited the Earth for more than 100 million years and disappeared some 65 million years ago, a hypothetical observer had wondered what the next evolutionary step would be, he probably would have thought: more of the same. In other words, even bigger and more voracious dinosaurs.

But that answer would have been wrong. That hypothetical observer never would have imagined that a small mammal no bigger than a rabbit, living in treetops, feeding on flowers and shoots and trembling at the possibility of being devoured by a dinosaur, would eventually become our ancestor.

From that creature, millions of years later, emerged something completely new, with qualities totally different from those of the dinosaurs, including a conscience, intelligence and love: the first human beings, from whom we who are gathered here are descended.

And so it was not more of the same. It was a break, a new step.

I firmly believe that today we are once again on the threshold of a new step in the evolutionary process: a step towards a human family that is united with itself, with nature and with Mother Earth.

I am tempted to echo the words: “I have a dream!”. It is, indeed, a dream. A glorious, beautiful, happy dream.

The main focus of this new step will be life in all its forms, humanity with all its peoples and ethnic groups, the Earth as a mother with all its vitality and an economy that creates the material conditions for making all this possible. We will need the material capital we have built up, but the focus will be on human and spiritual capital, whose most wholesome fruits are fraternity or brotherhood, cooperation, solidarity, love, economic and ecological justice, compassion and the capacity to coexist happily with all our differences, in the same shared home, the great and generous Mother Earth.

They say that Jesus, Buddha, Francis of Assisi, Rumi, Tolstoy, Gandhi, Dorothy Day, Martin Luther King and many other great prophets and teachers of the past and present, of which every country and culture has an exemplar, were ahead of their time in taking this new step.

They are all our most formative teachers, our lodestars, who fan the flame of hope that assures us that we still have a future, a blessed future for all of us.

As our dear brother Joseph Stiglitz aptly put it: “The legacy of this economic and financial crisis will be a worldwide battle of ideas”.

I firmly believe that new ideas, new visions and new dreams will galvanize our spirits and our hearts. The old gods are dying out, and new ones are emerging with the vigor of newborn infants. My reflections are meant to bring energy and enthusiasm to this battle of ideas and visions.

If we humans are to take a qualitative leap forward, we must give up our quest to become the lords and masters of creation, forgetting that we are not owners but only caretakers, which, after all, is no small thing.

Only when we accept the fact that we are caretakers and not owners and that we will one day be held to account for our stewardship will the grandeur of our humanity shine forth.

Thursday, June 25, 2009

Is The Global Recession Over?

This is a very interesting and important question being posed here. The same question is being posed in a variety of publications ranging from conservative to the left.

Here we get an interesting take from one of the largest, most powerful and influential communist parties in the world.

However, noticeably absent is any reference to what these huge debts being incurred in the name of "economic stimulus" are really doing to nations and people.

This accumulation of debt may be having some short-term results as far as alleviating the problems associated with the collapsing capitalist economy which is certain to negatively impact all the countries the United States is trying to use to shore up its own economy.

But, there can only be one consequence of this huge accumulating debt aimed at trying to save the capitalist system, not just from complete collapse, but saving the system itself... we are already well into a full-blown depression.

What is the consequence of all this debt that is not considered in this article? Poverty. Massive poverty will be the result of these huge accumulations of debt. Masses of people who have never experienced poverty will be experiencing poverty and everything that goes with such poverty.

One need only examine what the western imperialist governments and their bankers did to socialist Poland to figure this out.

Debt equals poverty... massive debt equals massive poverty.

Recession, depression or whatever happens with the capitalist economy this massive, massive, massive debt is going to result in the most devastating and massive world-wide poverty the human race has ever experienced.

Something to think about and ponder as you gather around the dinner table... you might also contemplate how much longer you will have food to put on the dinner table for your family...

The leading capitalists, headed by Wall Street, are taking advantage of this depression as capitalists always do--- using this economic depression to drive down that standards of living of working people across the globe.

It is no wonder so many working people are turning to Karl Marx for answers... one only has to read the very short Chapter 26 from Volume One of Marx' "Capital" to understand what is taking place in the world today... if you have never read or studied Karl Marx before, I would urge you to get to your nearest public library and check out Volume One of "Capital" and give it a good, thorough read because what the bankers did to Poland they are now doing to the entire world... the United States included.

Alan L. Maki

People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 25

June 21, 2009

Is The Global Recession Over?

C P Chandrasekhar

FINANCE ministers of the G8, meeting at Lecce in Italy during the latter part of week ending June 14, were cautiously optimistic. The final communiqué noted that in the aftermath of efforts at financial stabilisation and fiscal stimulation “there are signs of stabilisation in our economies, including a recovery of stock markets, a decline in interest rate spreads, (and) improved business and consumer confidence”. But, the ministers cautioned “the situation remains uncertain and significant risks remain to economic and financial stability”.

There were two elements of the communiqué that pointed to a compromise between the differing perceptions of the US and UK, on the one hand, and Germany and France, on the other, regarding the principal problems and tasks at hand. The first of these elements was the reference to the persistence of “significant risks” which was not there in the original draft of the communiqué, and was ostensibly inserted by those countries (UK and US) who feel that it is not yet time to decide that the recovery is here and the stimulus provided thus far has been adequate. Moreover, the mention of “encouraging figures in the manufacturing sector” that figured in the draft was dropped, since it went against the evidence that industrial production in the eurozone area had fallen by 21 per cent in April, relative to the corresponding month of the previous year.


The second element of the communiqué of interest is that it pushes for going beyond thinking of recovery and formulating national level “exit strategies” “for unwinding the extraordinary policy measures taken to respond to the crisis.” The reference here is to the huge budget deficits and high levels of public debt that many countries, especially the US, have accumulated in the wake of the bail-outs and the stimulus packages they have put in place. Though the US and UK have played down this aspect of the discussions, there is clearly a difference in emphasis among the leading powers on where the world economy stands and what is the immediate priority in terms of action.

The difference hinges, quite clearly, on the extent to which different sections believe that the worst is over. The reason for uncertainty regarding a potential recovery is that the figures are yet to point to a definitive revival. As of May 2009, nearly two years since the financial crisis broke and a year-and-a-half after the onset of the global recession, the economic scenario remains uncertain, if not bleak. The rate of unemployment in the US, which stood at less than 5 per cent in the first quarter of 2008, had risen to 8.1 per cent in the first quarter of 2009 and is estimated to have touched 9.4 per cent in May 2009—its highest rate for the last 26 years. This possibly explains US pessimism. It is true that the unemployment rate in the European Union had also risen from 6.8 to 8.1 per cent between the first quarters of 2008 and 2009. But the higher base level may be making the problem appear less alarming to ruling governments there than in the US, influencing their perceptions.

Output growth too gives no cause for optimism. Quarter-on-quarter growth rates of US GDP (as measured relative to the corresponding quarter of the previous year) had declined sharply in the last quarter of 2008 and first quarter of 2009 across the G7. This decline was even sharper in the UK and the EU, than the US). The crisis had clearly not gone away by the beginning of April, despite signs of recovery in the stock market. The disconcerting element is that this situation prevails despite huge infusion of funds by G7 governments. According to one estimate, the US Federal Reserve had by April 2009 offered about $12.7 trillion in guarantees and commitments to the US financial sector, and spent a little over $4 trillion in combating the crisis. As a result the federal deficit has risen to more than 12 per cent of GDP, frightening fiscal conservatives who predict the onset of stagflation. The big thrust seems to be over and the recovery is still not in sight. What it has possibly done, and even that is not certain, is prevent the recession from turning into a depression.


Despite this evidence relating to the period till the last full quarter for which numbers are available, speculation that the downturn has bottomed out and the developed world is on the verge of recovery proliferates. This optimism is based on still tenuous evidence, including evidence that the rate of decline of economies is slowing. The most important of these is that the monthly decline in employment in the US is down sharply. In May 2009 nonfarm payroll employment fell by 345,000, which is around half the average monthly decline over the previous six months and well below the close to 750,000 fall in January this year. Associated with this fall in monthly employment declines is a fall in new unemployment claims. Economist Robert Gordon of Northwestern University in the US, a respected analyst of growth and productivity trends in the US, has found that past recessions came to an end four to six weeks after new unemployment claims peaked, which they have now done. So he conjectures that the business cycle will find its trough in May or June (Financial Times, June 3, 2009). While these developments are reassuring, we should view them in the light of the fact that the unemployment rate is at record levels and new unemployment claims are still above the figures they touched in the worst months of the last recession.

A second cause for optimism is that US producers may be reaching the phase of their inventory cycle where an increase in production is inevitable. By April, wholesale inventories had fallen for the eighth month running as firms cut back production to clear the excess inventories generated by falling demand. Having made those adjustments, it is argued, firms are now in a position where they would have to step up production, especially if demand begins to stabilise. In other words, the argument is that since things are so bad, they can only get better. But the figures do not support even this position. Thus, after seven months of decline, inventories in April fell 1.4 per cent relative to the year before and 6.4 per cent relative to the corresponding month of the previous year. That was because sales fell by 0.4 per cent in April, led by automobiles and parts. Sales of durable goods too were down 1.9 per cent during the month and 23.4 per cent over the year.

The third potential cause for comfort is the sign that relative to previous months the decline in production is slowing. The available evidence shows that the decline in GDP relative to the immediately preceding quarter, which was rising till the first quarter of 2009, seems to have bottomed out in the US and to a lesser extent in the EU. What is more, this trend seems to be reflected even in the month-on-month annual growth rates of industrial production, with the rate of decline in April 2009 relative to the corresponding month of the previous year showing signs of reversing its hitherto continuous increase in the US, UK and EU.

While this third factor may be adequate reason for optimism for some, there are two reasons why we should not read too much into this data. To start with, even if the downturn is touching bottom in terms of the stabilisation of the rate of decline, the decline could persist and the economy could “bounce along the bottom” as some analysts reportedly speculate. That is, there is no “statistical” reason why a stable rate of decline should automatically lead to lower rates of decline and positive rates of growth in the coming months or quarters.

Further, it is unclear whether there would be adequate alternative stimuli to sustain the recovery when the effects of the already implemented fiscal stimulus wane. Governments could hold back on providing any fresh stimulus because of arguments of the kind espoused by conservative economists, representatives of the financial sector and even some European governments, which emphasise the dangers of inflation. If that happens, recovery would depend on the return of the consumer to the market.

But here too the prognosis is not all too happy. Fears generated by the recession and rising unemployment and the increased desire to save to make up for the decline in the values of accumulated housing and financial assets is encouraging savings even in the US. According to a recent estimated of the Federal Reserve, the net worth of US households had fallen 2.5 per cent or by $1,300 billion in just the first three months of 2009. This comes on top of the 18 per cent fall in the previous year which was the worst since the Fed began estimating household wealth in 1946.The net result is that household savings rates in the US are rising and consumer spending was falling in March and April this year.

In the event many still remain sceptical. The Financial Times quotes Martin Feldstein as saying that “it is possible but unlikely” that the recession is over. “I think it is a more likely scenario that we are seeing the favourable effects of the fiscal stimulus,” he reportedly said. “That, for a while, will offset the general diminished trend we have seen over the past two quarters, but it is a one-shot thing.” Put otherwise, there could be more bad news ahead.

Wednesday, June 24, 2009

PEOPLE BEFORE PROFITS False hope on the economy — unless …

Wednesday, June 24, 2009

A guest blog, placed by reader request.

PEOPLE BEFORE PROFITS False hope on the economy — unless …

Author: Art Perlo
People's Weekly World Newspaper, 06/23/09

In March, Federal Reserve Chair Ben Bernanke saw "green shoots" in the economy. Since then, various economists and government officials have seen signs that the recession may be bottoming out, with hopes that economic growth may start later this year. And many journalists in the business media are joining in, acting like paid touts for the stockbrokers.

This chorus has been fueled by a series of reports. Some banks are showing profits again. The stock market is up. Job losses in May, while horrific by any previous standard, weren't as bad as earlier this year. Housing starts in May were a little higher than in April.

There are more than a few skeptics. Much of the "good" news is really "slightly less bad news" or reflects temporary factors. And even in the most optimistic scenarios, unemployment will continue to rise well into next year.

I am more than skeptical. There are major economic obstacles to even a weak recovery. Without decisive government action, these will continue to depress the economy, pushing unemployment to a post-World-War-II record and devastating more families than 100 years’ worth of hurricanes. Four of the obstacles to recovery:

1) One-third of all home mortgages are under water — the homeowners owe more than the house is worth. We are in for another year of record foreclosures and many years of depressed purchasing power, as the banks try to squeeze every last penny out of working class homeowners. Federal and state initiatives are providing some relief, but the majority of homeowners who are in trouble are headed for eviction, and their communities are headed to further decline.

2) The collapse of the auto industry and its ripple effects are devastating the part of the economy — manufacturing — which actually produces things that people need. The layoffs, plant closings, and loss of tax revenue are just beginning. As suppliers and support services cut back, the effects will be felt far beyond the Midwest. Michigan's unemployment rate of 12.9% (and rising) could be headed to your state, too.

3) State and local government fiscal crises are already causing layoffs and cutbacks, overwhelming the positive effects of February's federal stimulus package. This will only worsen as local revenues continue to decline and governments run out of reserves and accounting tricks.

4) For nearly 30 years, there has been a growing gap between rising productivity and stagnant real wages. This has translated into extra corporate profits and extra income for the super-rich. Part of this wealth has been loaned back to the working class to finance homes, cars, education, medical care and daily expenses. Result: financial crisis for working families, instability for the financial system. Part of the wealth has been invested in the unproductive, speculative financial sector, or in real “development” projects (homes, shopping malls, resorts) that outstrip the demand from cash-strapped consumers. Result: more overcapacity, corporate bankruptcies, layoffs, and instability.

These problems — and others — could result in a new wave of financial and industrial crises, with the economy declining into a full-blown depression. It will require radical action to protect working families, and to reorient the economy, not only for growth, but for meeting the needs of people and the environment.

The stimulus package enacted by the Obama administration in February contains many positive features that are only beginning to kick in. But they are inadequate in the face of the developing global depression.

A people's economic program would have two essential features. 1) Return to the working class a greater portion of the wealth it creates, wealth that now lines the pockets of the very rich. 2) Directly meet real needs of the nation and its working families, instead of relying exclusively on the magic of a broken corporate system.

This means higher taxes on the super-rich, on corporate profits and financial transactions, to ease the burden on the working class, especially at the state and local level. And it requires that government play an active role in developing energy, transportation, health, environment and infrastructure policies. It would take direct measures where necessary to put the millions of unemployed to work meeting these vital needs.

Winning even part of such a program requires challenging the entrenched corporate and financial interests that, until now, have been able to shape and plunder the U.S. and global economies as they will. This will not be an easy fight. The huge movements for a national single-payer health plan (or at least a strong public option) and the Employee Free Choice Act are only the start of what is needed to win the kind of change we really need.

Art Perlo can be reached via his e-mail: econ4ppl@cpusa.org

Posted by Alan L. Maki

Monday, April 20, 2009

Thin Ice From Here to the Horizon

Thin Ice From Here to the Horizon


On any rational assessment the popular new president is skating on thin ice. Pollyanna bulletins about the economy puff up from the White House and Federal Reserve, like auguries of a new Pope through the Vatican chimney. “Habemus spem.” We have hope. We’ve just heard it from President Obama: "We are starting to see glimmers of hope across the economy." From Fed Chairman Ben Bernanke, who’s so far unleashed $12 trillion in booster money, we get the always sinister reassurance, like Death giving the Appointee in Samarra a friendly tap on the shoulder, "the foundations of our economy are strong".

The economic news in the near and medium term is ghastly, as Mike Whitney outlined on this site last Thursday. Retail sales crashed again in March, nowhere worse than in the car market, though electronics and building materials were way off too. They now reckon there’ll be just over two million housing foreclosures in 2009, up 400,000 from 2008. Industrial output is going through the floor at an annual rate of 20 per cent, the biggest quarterly drop since the end of the Second World War. US industry is now running at only 70 per cent of capacity, the worst number since they started tracking this stat in 1967. Job losses are currently running at 650,000 a month.

Round the next corner is credit card delinquency and the long-heralded slump in commercial real estate, where vacancy rates are already running at 15 per cent,. Capital One, a huge issuer of Visa and Mastercard, just said the annualized net charge-off rate for U.S. credit cards -- debts the company reckons will never be paid -- rose to 9.33 percent in March from 8.06 percent in February. In other words, Capital One – whose credit card promotions take up hefty space in the mailbag of every US postman – is in big trouble, and under one in ten of these credit card holders will have a messed up credit rating for several years to come.

Wall Street and its boosters are trying to pretend that indeed the worst is over. The Dow and S&P Index have been rallying for five weeks. Wells Fargo, the huge San Francisco-based bank, second biggest home lender, announced that first quarter net income rose 50 per cent to $3 billion. No one seriously believes the bank is in anything other than continuing huge trouble, and will soon need – so Blomberg News surmises - $50 billion to settle near-term commitments. The profit figure stems from newly relaxed rules about the valuation of Wells Fargo’s assets.

In other words it’s thin economic ice from here to the horizon. Robert Reich, now teaching economics at Berkeley and formerly labor secretary in the Clinton administration, wrote a piece recently, titled "Why We're Not at the Beginning of the End, and Probably Not Even At the End of the Beginning". There are huge problems with the whole orientation of the US economy. The “free market” outsourcing model has failed. Even at the best of times the US consumers who account for over 70 per cent of all economic activity in the country, don’t have purchasing power to keep the whole show on the road, unless they put it on the credit cards which are now maxed out and going into default, or borrow on houses they can’t afford.

Amid a hail of well founded criticism from liberal and conservative economists alike, Obama, with Geithner, Summers and Bernanke at his elbow, remains absolutely committed to giving the bankers everything they ask for, trillion upon trillion. As William Black, deputy director at the former Federal Savings and Loan Insurance Corp. during the thrift crisis of the 1980s, recently remarked in an acrid interview in Barron’s, (reprinted here last week) “ Unless the current administration changes course pretty drastically, the scandal will destroy Obama's administration, both economically and in terms of integrity. We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure?”

In foreign policy the ice is just as treacherous. As the nation emerges from its disastrous adventure in Iraq, Obama redeploys to the Afghan-Pakistan theater. The administration delightedly touts claims that its remote-controlled missiles are decimating al-Q’aida. The Washington-based journalist Gareth Porter last Thursday cited here data leaked by the Pakistani government showing that only ten out of 60 drone attack in February and March hit al Qaida leaders and the rest did what bombs and missiles usually do, namely kill civilians, 537 of them – thus immeasurably strengthening the hand of the Taliban in the battle for hearts and minds.

Obama is no doubt unworried by this since the hearts and minds he’s mostly interested in belong to the American people and especially opinion-forming elites, who remain unflustered when high explosive falls on a wedding party in Waziristan. Failure in Iraq was re-labeled “victory” and in terms of domestic politics the chickens only come home to roost when there’s film of people climbing off the roof of the US embassy into a helicopter, or when the casualty rates among US soldiers start soaring. Soaring Pentagon budgets are popular with Congress, whose members nix any effort to cut back.

Where the ice is giving way for Obama is among those who thought he might strike out in a new direction in foreign policy. There’s not much sign of that. Whether it’s a sell-out of Haiti’s poor or acquiescence in Israel’s grim plans for the Palestinians, Obama’s game is strictly business as usual, up to and including the Cuban blockade whose damage, as Fidel Castro said here last week, “cannot be calculated only on the basis of its economic effects, for it constantly takes human lives and brings painful suffering to our people. Numerous diagnostic equipment and crucial medicines --made in Europe, Japan or any other country-- are not available to our patients if they carry U.S. components or software.”

Obama has welshed on promises that America will stop kidnapping its enemies and “rendering” them to secret prisons overseas. As under Bush, enemy combatants languish without rights or recourse in prisons like Bagram. The torturers who flourished in the Bush years will not be prosecuted. Electronic eavesdropping continues unabated. It seems, so CounterPunch’s Fred Gardner is reporting in exclusives on this site, he and his attorney general are welshing on commitments not to harass medical marijuana operations in states where local laws sanction such activity.

Will the liberal-left mutiny? Never. Remember, Bill Clinton bombed Yugoslavia and kicked away life supports of America’s poorest and most of the liberal-left stayed loyal to the end and cherish his memory. The labor movement has already seen defeat for its cherished “card check” bill, designed to win a level playing field for union organizers, thus presumptively boosting effective purchasing power among working people, vital to the nation’s economic well-being. They’re not really blaming this on Obama, even though it is his chief aide, Rahm Emmanuel who, in his years on the Hill, picked Democratic candidates who feel no loyalty to labor and refused to push for the card check bill, and though Obama recently stressed he is a “new” Democrat – transparent code for someone distancing himself from the labor movement.

Obama’s polling numbers remain good. He has only to say there are “glimmers of hope” and the pollsters duly find increasing sentiment among Americans that they feel the economy is moving in a “positive” direction. He gets good assessments from Democrats and Independents. Many Republicans don’t like him but here again Obama is lucky, just as he was lucky – at least in the near term - to have three Navy SEALS off the horn of Africa who were good shots. The Republican opposition is in appalling shape, lumbering from one ill-conceived stunt to the next.

Obama’s lucky to have succeeded a terrible president. He gets out a lot and talks a great game. His problem is the same as the country’s. The economic ice is cracking under his feet, and the “stimulus” is going to be about as efficacious as those cushions under the seats the flight attendants assure us are going to come in handy when the plane goes down in the North Atlantic.

Tuesday, March 31, 2009

An Open Letter to President Barack Obama from Sidney J. Gluck

Attached is an open letter to President Barack Obama.

I don't know whether you agree with my point of view or not; but I am functioning out of the feeling that the negative aspects of capitalism are becoming obvious to people all around the world regardless of class positions, that understanding its avaricious nature brings them closer to Marx's analysis of the system which all of you can read his seminal word on "Capital." Chapter 26 which deals with the law of capitalist accumulation will give you the prototype of which the USA's capitalism is the arch example of its worst (together with the British who started out but are following along with the USA).

Globalization is a mess and everyone knows that the USA has created more poverty with its capital investments than existed before the global expansion. We know that formal colonial countries are seeing through this domination and are moving in directions which reject the control of foreign capital in their own developments. WE ARE LIVING IN A CENTURY OF EPOCHAL CHANGE. Our hope is that the change which is now developing in the form of a bipolar economic structure will continue to redevelop economies technologically and sustainably. We hope too that the ultimate resolution of differences between the double-structured world economic system will not be resolved by warfare. That is the most important struggle we must be involved with. A peaceful acceptance of epochal change and the survival of all in a better world.


Sidney J. Gluck

Dear President Obama,

The world economic crisis sparked by the financial sector of our country has put the capitalist system on a defensive more openly than any other time in history. I am one of many who strongly supported your candidacy based on your vocalization of much of what we felt had to be changed in our country to make it more livable for those of us who produce the wealth and intellectual atmosphere.

You are facing the sharpest attack from the ranks of the Republican Party. We all admire your diplomatic ability to deal with those who disagree with you; but, the time has come when you must take an ideological position in order to clarify the issues involved in building a new type of economic structure in the country. This means that the dominance of the financial institutions in the political decisions affecting the majority must be defended openly against misrepresentations and manipulations which we all now know come from the unsupported defense of government that gives primacy to capital accumulation whether it be finance capital or industrial capital.

You do not have to embrace socialism. That is not the ideological position that put you in power. You were put in the White House with a promise to govern in the name of the working majority. True, you would like to have support from all sections of political and economic forces, but YOU WILL NOT GET IT.

If you continue to move along supporting the program of the financial circles in our country, your presidency is DOOMED. Listen to the needs of the majority and cater to it.

You can announce openly that you are not for socialism but you are for correcting the ills of the capitalist system and to relinquish domination of other countries allowing them to move independently as their people desire.

The Republican Party is pressing for the continuation of the kind of economic distortions that has dragged the world down. Openly facing this fact will help you reshape our country’s goals.

We are in an epoch of change. We must remove barriers and encourage each nation to resolve their day to day problems created by greed and distorted wealth accumulation. It does not make you a socialist to talk for Main Street but they need a spokesman in high places that will act for them.

You are in an enviable yet complicated position. Exposing the negative effect of unregulated finance capital which dominates humanity today would memorialize you for the next thousand years. The Bush Administration preempted the first move to deal with the economic crisis by bailing out the perpetrators who squandered every cent in bonuses and bashes. You are now faced with additional steps to bail out the industrial capitalists who have the responsibility of reshaping these enterprises into a new technological and green economy whose purpose is to raise the living standards of all.

The fulfillment of your promises requires that you take an ideological position. You will go down in history as having broken the racial barrier but it will end at that if you continue to be consumed by the economic crisis. OUR SYSTEM NEEDS CHANGE. Do what you can within that system. This means openly opposing the Republican Party’s program already on the road to capturing the presidency and congress in 2010 before they bring us further down. Don’t let them bully you with the “socialist” label.

The ball is in your court to change the situation. In your most diplomatic way you must take an ideological position to correct the problems of the system as you promised and restore true democracy which favors the needs of the majority.


Sidney J. Gluck