'Senate bill to turn US into battlefield' Mon Nov 28, 2011
American civil rights activists have censured the country's senate for seeking to allow the military to imprison American citizens without bringing a charge against them.

American rights activists have slammed the US Senate for gearing up to vote on a bill on Monday (today?) that would define the whole of the United States as a 'battlefield' and allow the military to arrest American citizens in their own back yard without charge or trial.

The reactions comes after the American Civil Liberties Union (ACLU) said last week that “the senate is going to vote on whether Congress will give this president-and every future president - the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. The power is so broad that even US citizens could be swept up by the military and the military could be used far from any battlefield, even within the United States itself.” Under the 'worldwide indefinite detention without charge or trial' provision of S. 1867, the National Defense Authorization Act bill, which is set to be up for a vote on the Senate floor Monday, the legislation will “basically say in law for the first time that the homeland is part of the battlefield,” said South Carolina's left-wing Republican Senator Lindsey Graham, who supports the bill.

The bill was drafted in secret by Senators Carl Levin (D-Mich.)(Carl Milton Levin (born June 28, 1934) is a Jewish-American United States Senator from Michigan, serving since 1979. He is the Chairman of the Senate ...) and John McCain (R-Ariz.)(John Sidney McCain III (born August 29, 1936) is the senior United States
Senator from Arizona. He was the Republican nominee for president in the 2008 ...), before being passed in a closed-door committee meeting without any kind of hearing, the ACLU added.

This means Americans could be declared domestic terrorists and thrown in a military brig with no recourse whatsoever. Critics say, given that the Department of Homeland Security has characterized behavior such as buying gold, owning guns, using a watch or binoculars, donating to charity, using the telephone or email to find information, using cash, and other instances of mundane behavior as potential indicators of domestic terrorism, such a provision would be wide open to abuse,

The senate bid comes against a backdrop of protests in the United States where Americans have been holding rallies against the corporatism and corruption on Wall Street. GHN/JG/HJL www.pressTV.com
update on the above:The Obama Regime Has No Constitutional Scruples

Misreading the fight over military detention

By Paul Craig Roberts

December 05, 2011 "Information Clearing House" -- During an interview with RT on December 1, I said that the US Constitution had been shredded by the failure of the US Senate to protect American citizens from the detainee amendment sponsored by Republican John McCain and Democrat Carl Levin to the Defense Authorization Bill. The amendment permits indefinite detention of US citizens by the US military.  I also gave my opinion that the fact that all but two Republican members of the Senate had voted to strip American citizens of their constitutional protections and of the protection of the Posse Comitatus Act indicated that the Republican Party had degenerated into a Gestapo Party.

These conclusions are self-evident, and I stand by them. 

However, I jumped to conclusions when I implied that the Obama regime opposes military detention on constitutional grounds.  Ray McGovern and Glenn Greenwald   might have jumped to the same conclusions.

An article by Dahlia Lithwick in Slate article by Dahlia Lithwick in Slate   reported that the entire Obama regime opposed the military detention provision in the McCain/Levin amendment. Lithwick wrote:

 “The secretary of defense, the director of national intelligence, the director of the FBI, the CIA director, and the head of the Justice Department’s national security division have all said that the indefinite detention provisions in the bill are a bad idea. And the White House continues to say that the president will veto the bill if the detainee provisions are not removed. It sees the proposed”

I checked the URLs that Lithwick supplied.  It is clear that the Obama regime objects to military detention, and I mistook this objection for constitutional scruples.  

However, on further reflection I conclude that the Obama regime’s objection to military detention is not rooted in concern for the constitutional rights of American citizens.  The regime objects to military detention because the implication of military detention is that detainees are prisoners of war. As Senate Armed Services Committee Chairman Carl Levin put it:  Should somebody determined “to be a member of an enemy force who has come to this nation or is in this nation to attack us as a member of a foreign enemy, should that person be treated according to the laws of war? The answer is yes.”

Detainees treated according to the laws of war have the protections of the Geneva Conventions. They cannot be tortured. The Obama regime opposes military detention, because detainees would have some rights.  These rights would interfere with the regime’s ability to send detainees to CIA torture prisons overseas.  This is what the Obama regime means when it says that the requirement of military detention denies the regime “flexibility.”

The Bush/Obama regimes have evaded the Geneva Conventions by declaring that detainees are not POWs, but “enemy combatants,” “terrorists,” or some other designation that removes all accountability from the US government for their treatment. 

By requiring military detention of the captured, Congress is undoing all the maneuvering that two regimes have accomplished in removing POW status from detainees.

A careful reading of the Obama regime’s objections to military detention supports this conclusion.  The November 17 letter[PDF] to the Senate from the Executive Office of the President says that the Obama regime does not want the authority it has under the Authorization for Use of Military Force (AUMF), Public Law 107-40, to be codified. Codification is risky, the regime says. “After a decade of settled jurisprudence on detention authority, Congress must be careful not to open a whole new series of legal questions that will distract from our efforts to protect the country.”

In other words, the regime is saying that under AUMF the executive branch has total discretion as to who it detains and how it treats detainees. Moreover, as the executive branch has total discretion, no one can find out what the executive branch is doing, who detainees are, or what is being done to them. Codification brings accountability, and the executive branch does not want accountability.

Those who see hope in Obama’s threatened veto have jumped to conclusions if they think the veto is based on constitutional scruples.

Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. He can be reached at: PaulCraigRoberts@yahoo.com

UPDATE Dec.1st.2011

In the United States and Canada, the occupation movement has spread from the downtowns of cities to the campuses. And the "occupiers" are discussing alternative places to occupy during the winter months. The Chilean student rebellion has spread to the secondary schools.

Two things should be noticed about the present situation. The first is that the trade-unions - as a part of what is happening, as a result of what is happening - have become far more militant, and far more open to the idea that they should be active participants in the worldwide social justice movement. This is true in the Arab world, in Europe, in North America, in southern Africa, even in China.

The second thing to notice is the degree to which the movements everywhere have been able to maintain their emphasis on a horizontal strategy. The movements are not bureaucratic structures but coalitions of multiple groups, organizations, sectors of the population. They are still working hard to debate on an ongoing basis their tactics and their priorities, and are resisting becoming exclusionary. Does this always work smoothly? Of course not. Does this work better than reconstructing a new vertical movement, with clear leadership and collective discipline? Up to now, it has indeed worked better.

We have to think of the world struggle as a long race, in which the runners have to use their energy wisely, in order not to become exhausted while always keeping their eye on the end goal - a different kind of world-system, far more democratic, far more egalitarian than anything we have now.From Becky Dunlop.

Ask the Candidates Real Questions – Like These
By Ray McGovern

November 26, 2011 "Information Clearing House" --  Pity the pundits. It must be hard to pretend to be a journalist and live in constant fear of being one question or comment away from joining the jobless.Rather, media personalities who wish to be around for a while must do what they can to promote the notion of American exceptionalism and the need to sacrifice at home in order to defend and expand the Empire — “so that we don’t have to fight them here.”

From a global perspective looking back a few decades, it is hard to believe that major powers like China and Russia were fiercely competing with each other for improved relations with the U.S., and that we were able to play one off against the other to advance America’s interests.They are now laughing at us — smiling at how far we have outreached ourselves in our attempts to project power and corner the world market.It is, actually, hard to believe: Marines now stationed in Australia, which our national security experts apparently believe is near China (well, kind of near); U.S. troops now in Africa where there’s still a lot of untapped oil; U.S threats to use a “military option” against Iran.

And the coup de grace: the feckless effort to build anti-ballistic missile defense systems that can defeat all countermeasures — the U.S. defense-industrial project that has long been one of the most expensive and lucrative corporate welfare programs. Check out the breaking story, which brings still more good news for the military-industrial complex: Russia is threatening to defeat American missile defense systems in Europe, absent a bilateral agreement regulating them. And so, it’s back to the drawing board and then the production line in the quixotic search for technical systems that cannot be countered. Is this a great country for weapons researchers and manufacturers, or what? The pundits will explain, and our diplomats will try to convince others, particularly incredulous Europeans — that such defense systems are needed to defend against an eventual missile threat from Iran, which our national security gurus believe to be near Europe (well, kind of near).

All this at a time when one out of three children in America live in poverty. Our Fawning Corporate Media (FCM), substantially owned and operated by the arms makers, war profiteers and their friends, does what it can to disguise this, as well as other grim statistics.Be thankful, say the One Percent. Relax already. After all, even poor children — or most of them, anyhow — can watch football on TV and be enticed by heroic advertisements to join the military or some other part of the national security apparatus. Thus, maybe they can qualify for a credit card that enables them to shop like crazy on Black Friday and on future Black Fridays.To further buck up national morale, our TV networks can be counted on to carry the usual orgy of flag-waving “God-bless-America” renditions – accompanied by those explicit and implicit tutorials on American exceptionalism, expressed with jet-fighter flyovers and cutaways to U.S. troops “defending our freedoms” in Afghanistan and other faraway places.The message from the One Percent – the ultra-wealthy whom Republican lawmakers are fond of lauding as the “job creators” – was that ALL of you must be grateful this Thanksgiving holiday, including the ungrateful Ninety-Nine Percent, some of whom are grumbling about inequities at “Occupy” protests around the country.

Ask Real Questions

Is there a medicine for this infection of militarism, consumerism and mindless politics? I think there is, but only if we all do our part. We need to find ways to raise the kinds of questions that FCM pundits and journalists avoid like the plague. Go to the rallies, the press conferences, the campaign speeches; press for cogent answers to the real questions.That’s what I’m going to try to do in the coming weeks and months. Here are three lines of questioning I think we might try to pursue with the candidates themselves. You may wish to try them out yourselves and/or devise your own. I include below the three questions, supplemented by background and potential lead-ins:

–Question 1:

Background: The aims of U.S. foreign policy in the post-World War II period were essentially to enforce a global system in which the Western powers under American leadership would maintain global dominance. This essentially meant being in control of the world’s resources at the expense of non-Western nations.

This fundamental objective of U.S. foreign policy in the post-war period shines through with bare-knuckled candor in a TOP SECRET policy document written by George Kennan in February 1948. He was head of the State Department’s Policy Planning Staff, and this was its first memorandum. Here is an excerpt: “We have about 50 per cent of the world’s wealth, but only 6.3 per cent of its population. … Our real task in the coming period is to maintain this position of disparity. … To do so we will have to dispense with all sentimentality and day-dreaming. … We need not deceive ourselves that we can afford the luxury of altruism. … We should cease to talk about vague, unreal objectives such as human rights, the raising of living standards, and democratization. The day is not far off when we will have to deal in straight power concepts.”

Lead-in: Five years after approval of the basic policy aim of controlling more than our share of “the world’s wealth,” the policy was implemented by throwing millions of dollars at the CIA to overthrow the democratically elected leader of Iran. You see, Prime Minister Mohammad Mossadegh had the revolutionary, unacceptable notion that more of the profits from Iranian oil should stay in Iran for the Iranian people and not simply go to oil giants like the predecessor of British Petroleum (BP).

The Question: Do you think we had a right to overthrow the leader of Iran in 1953? And would you again give millions of dollars to the CIA to overthrow the Iranian government under your presidency?

–Question 2

Background: Further on Iran: During the Dec. 5, 2006, Senate hearing on the nomination of Robert Gates to be Secretary of Defense, he was questioned by Sen. Lindsey Graham, R-S.C., about the possibility of Iran acquiring nuclear weapons and the threat to Israel if it did. Gates said that he believed Iran was trying to acquire nuclear weapons and was lying when it said it wasn’t. However, amazingly, Gates added that Iran’s motivation was largely self-defense. Sen. Graham asked: “Do you believe the Iranians would consider using that nuclear weapons capability against the nation of Israel?” Gates replied: “I don’t know that they would do that, Senator. … And I think that, while they are certainly pressing, in my opinion, for nuclear capability, I think that they would see it in the first instance as a deterrent. They are surrounded by powers with nuclear weapons: Pakistan to their east, the Russians to the north, the Israelis to the west and us in the Persian Gulf.”

This remarkably candid reply explains Iran’s possible motive in seeking nuclear weapons as deterrence against aggression by nuclear powers in the region, including Israel and the United States. In other words, according to Gates, Iran is seeking nuclear weapons to prevent others from attacking it, rather than to attack other states — like Israel.This comes close to saying that the U.S. should be able to live with a nuclear-armed Iran (and Israel should be able to as well). And, remember, all this talk is properly put in the subjunctive mood. It remains a very big IF; namely, on whether or not the Iranian leaders opt to go for a nuclear weapon. We were formally reminded last March that the jury is still out on this key question. James R. Clapper, the Director of National Intelligence, testified to Congress that the intelligence community judges that Iran has not yet made that decision. So, despite all the current media hype regarding Iran’s nuclear program, there remains some reason to hope against hype, so to speak.

In the above reply, Gates also acknowledged what U.S. officials officially seek to obfuscate: that Israel has nuclear weapons. Remember, that at the time of his confirmation hearing, Gates had already served as CIA director and held other senior national security position in several administrations. He had been around long enough both to know the details of Israel’s undeclared nuclear arsenal and the longstanding U.S. policy NOT to acknowledge that Israel has nukes. That policy was designed to have the double benefit of not undermining Israel’s policy of studied ambiguity on the issue and of not requiring the U.S. to take a position for or against Israel’s possession of nuclear weapons and its refusal to sign the Non-Proliferation Treaty, which Iran has signed. The truth is that there are no U.N. weapons inspectors crawling into crevices in Israel, as they regularly do in Iran.

Lead-in to question: A portion of intelligence funding goes to support intelligence analysis. Former Defense Secretary Robert Gates worked in the analysis part of the CIA. [Actually, as an apprentice analyst 40 years ago, he worked in the Soviet Foreign Policy Branch that I led. His portfolio was Soviet policy toward the Middle East.] Fast-forward 35 years to Dec. 5, 2006, when the Senate held a one-day hearing on Gates’s nomination to become Secretary of Defense. When Sen. Lindsey Graham asked Gates whether he thought the Iranians would consider a nuclear attack on Israel, Gates answered: “I think that they would see it in the first instance as a deterrent. They are surrounded by powers with nuclear weapons.

This is tell-it-like-it-is intelligence analysis [which exceeded my hopes as his erstwhile mentor]. It even included matter-of-fact mention of Israel’s nuclear capability, which President Barack Obama himself has refused to acknowledge. When Helen Thomas pressed the issue at Obama’s inaugural press conference (Feb. 9, 2009), the President awkwardly ducked the question, explaining he did not want to “speculate.”

The Question: Do you agree with Mr. Gates that Iran would see a nuclear capability “in the first instance as a deterrent?” And how many nuclear weapons do Western experts believe Israel has? President Carter has said 150, but that was some time ago.

A Follow-up: Let’s assume Iran does get a nuclear weapon: Do you think it would commit suicide by firing it off in the direction of Israel?

–Question 3

Background and Lead-In: This question deals with torture, an issue that has been given new life recently, with more and more Republican presidential candidates speaking in favor of it. We have surely come a long way since Virginia patriot Patrick Henry insisted passionately that “the rack and the screw,” as he put it, were barbaric practices that had to be left behind in the Old World, or we are “lost and undone.”

The Question: On Sept. 6, 2006, Gen. John Kimmons, then head of Army intelligence told reporters at the Pentagon, in unmistakable language: “No good intelligence is going to come from abusive practices. I think history tells us that. I think the empirical evidence of the last five years, hard years, tells us that.” Gen. Kimmons knew that President George W. Bush had decided to claim publicly, just two hours later, that the “alternative set of procedures” for interrogation — methods that Bush had approved, like water-boarding — were effective. Whom do you think we should believe: President Bush? Or Gen. Kimmons?

Ray McGovern works with Tell the Word, a publishing arm of the ecumenical Church of the Saviour in inner-city Washington. He served as an Army infantry/intelligence officer in the early Sixties and then for 27 years as a CIA analyst. He is co-founder of Veteran Intelligence Professionals for Sanity (VIPS)

This article was originally posted on Consortiumnews.com. 
Comment:.
"…Is there a medicine for this infection of militarism, consumerism and mindless politics? I think there is, but only if we all do our part…."
…"but only if"…"we all do our part"…well you know that is not going to happen…
So let me help out…"Truth"…is the most potent anti-dote for illegitimate power and such power will go to great lengths to prevent truth from becoming known. – You, Ray McGovern, are using "truths" in your approach, but not truths that seriously challenge power…you stay at a safe distance… By engaging in this "game" you also implicitly suggest that the American "system" should be in receipt of respect for legitimacy – is it?
It is not…
Once "government" allows itself to engage in explicit criminal activities, it loses all claims to "legitimacy"…is that so frikkin hard to understand? – ...are there doubts about the veracity of such a suggestion…?
A lot of folks may like Ray McGovern, but he remains a strange creature to me…his goal is ultimately to protect that which gave rise to all the problems and crimes he finds offensive….the Centralized SuperState is what it is, but Ray McGovern and all those that think like him believe it can be "tamed"…"if only we all do our part"…

At the core, the US is a totalitarian construct. From that follows all the evils we find ourselves railing against…but most people do not see it that way….the SuperState wins…and the SuperState needs the charade that is the "presidential election process"….let the games continue….
…refusing to approach the events of September 11, 2001 in an honest and unconditional manner hands victory to illegitimate power by default….
Have a nice day, from:"FOLLOW THE FACTS"

The Shocking Truth About the Crackdown on Occupy

The violent police assaults across the US are no coincidence. Occupy has touched the third rail of our political class's venality

By Naomi Wolf

November 26, 2011 "The Guardian" - - vUS citizens of all political persuasions are still reeling from images of unparallelled police brutality in a coordinated crackdown against peaceful OWS protesters in cities across the nation this past week. An elderly woman was pepper-sprayed in the face; the scene of unresisting, supine students at UC Davis being pepper-sprayed by phalanxes of riot police went viral online; images proliferated of young women – targeted seemingly for their gender – screaming, dragged by the hair by police in riot gear; and the pictures of a young man, stunned and bleeding profusely from the head, emerged in the record of the middle-of-the-night clearing of Zuccotti Park.

But just when Americans thought we had the picture – was this crazy police and mayoral overkill, on a municipal level, in many different cities? – the picture darkened. The National Union of Journalists and the Committee to Protect Journalists issued a Freedom of Information Act request to investigate possible federal involvement with law enforcement practices that appeared to target journalists. The New York Times reported that "New York cops have arrested, punched, whacked, shoved to the ground and tossed a barrier at reporters and photographers" covering protests. Reporters were asked by NYPD to raise their hands to prove they had credentials: when many dutifully did so, they were taken, upon threat of arrest, away from the story they were covering, and penned far from the site in which the news was unfolding. Other reporters wearing press passes were arrested and roughed up by cops, after being – falsely – informed by police that "It is illegal to take pictures on the sidewalk."

In New York, a state supreme court justice and a New York City council member were beaten up; in Berkeley, California, one of our greatest national poets, Robert Hass, was beaten with batons. The picture darkened still further when Wonkette and Washingtonsblog.com reported that the Mayor of Oakland acknowledged that the Department of Homeland Security had participated in an 18-city mayor conference call advising mayors on "how to suppress" Occupy protests.

To Europeans, the enormity of this breach may not be obvious at first. Our system of government prohibits the creation of a federalised police force, and forbids federal or militarised involvement in municipal peacekeeping.

I noticed that rightwing pundits and politicians on the TV shows on which I was appearing were all on-message against OWS. Journalist Chris Hayes reported on a leaked memo that revealed lobbyists vying for an $850,000 contract to smear Occupy. Message coordination of this kind is impossible without a full-court press at the top. This was clearly not simply a case of a freaked-out mayors', city-by-city municipal overreaction against mess in the parks and cranky campers. As the puzzle pieces fit together, they began to show coordination against OWS at the highest national levels.

Why this massive mobilisation against these not-yet-fully-articulated, unarmed, inchoate people? After all, protesters against the war in Iraq, Tea Party rallies and others have all proceeded without this coordinated crackdown. Is it really the camping? As I write, two hundred young people, with sleeping bags, suitcases and even folding chairs, are still camping out all night and day outside of NBC on public sidewalks – under the benevolent eye of an NYPD cop – awaiting Saturday Night Live tickets, so surely the camping is not the issue. I was still deeply puzzled as to why OWS, this hapless, hopeful band, would call out a violent federal response.

That is, until I found out what it was that OWS actually wanted.

The mainstream media was declaring continually "OWS has no message". Frustrated, I simply asked them. I began soliciting online "What is it you want?" answers from Occupy. In the first 15 minutes, I received 100 answers. These were truly eye-opening.

The No 1 agenda item: get the money out of politics. Most often cited was legislation to blunt the effect of the Citizens United ruling, which lets boundless sums enter the campaign process. No 2: reform the banking system to prevent fraud and manipulation, with the most frequent item being to restore the Glass-Steagall Act – the Depression-era law, done away with by President Clinton, that separates investment banks from commercial banks. This law would correct the conditions for the recent crisis, as investment banks could not take risks for profit that create kale derivatives out of thin air, and wipe out the commercial and savings banks.

No 3 was the most clarifying: draft laws against the little-known loophole that currently allows members of Congress to pass legislation affecting Delaware-based corporations in which they themselves are investors.

When I saw this list – and especially the last agenda item – the scales fell from my eyes. Of course, these unarmed people would be having the shit kicked out of them.

For the terrible insight to take away from news that the Department of Homeland Security coordinated a violent crackdown is that the DHS does not freelance. The DHS cannot say, on its own initiative, "we are going after these scruffy hippies". Rather, DHS is answerable up a chain of command: first, to New York Representative Peter King, head of the House homeland security subcommittee, who naturally is influenced by his fellow congressmen and women's wishes and interests. And the DHS answers directly, above King, to the president (who was conveniently in Australia at the time).

In other words, for the DHS to be on a call with mayors, the logic of its chain of command and accountability implies that congressional overseers, with the blessing of the White House, told the DHS to authorise mayors to order their police forces – pumped up with millions of dollars of hardware and training from the DHS – to make war on peaceful citizens.

But wait: why on earth would Congress advise violent militarised reactions against its own peaceful constituents? The answer is straightforward: in recent years, members of Congress have started entering the system as members of the middle class (or upper middle class) – but they are leaving DC privy to vast personal wealth, as we see from the "scandal" of presidential contender Newt Gingrich's having been paid $1.8m for a few hours' "consulting" to special interests. The inflated fees to lawmakers who turn lobbyists are common knowledge, but the notion that congressmen and women are legislating their own companies' profitsis less widely known – and if the books were to be opened, they would surely reveal corruption on a Wall Street spectrum. Indeed, we do already know that congresspeople are massively profiting from trading on non-public information they have on companies about which they are legislating – a form of insider trading that sent Martha Stewart to jail.

Since Occupy is heavily surveilled and infiltrated, it is likely that the DHS and police informers are aware, before Occupy itself is, what its emerging agenda is going to look like. If legislating away lobbyists' privileges to earn boundless fees once they are close to the legislative process, reforming the banks so they can't suck money out of fake derivatives products, and, most critically, opening the books on a system that allowed members of Congress to profit personally – and immensely – from their own legislation, are two beats away from the grasp of an electorally organised Occupy movement … well, you will call out the troops on stopping that advance.

So, when you connect the dots, properly understood, what happened this week is the first battle in a civil war; a civil war in which, for now, only one side is choosing violence. It is a battle in which members of Congress, with the collusion of the American president, sent violent, organised suppression against the people they are supposed to represent. Occupy has touched the third rail: personal congressional profits streams. Even though they are, as yet, unaware of what the implications of their movement are, those threatened by the stirrings of their dreams of reform are not.

Sadly, Americans this week have come one step closer to being true brothers and sisters of the protesters in Tahrir Square. Like them, our own national leaders, who likely see their own personal wealth under threat from transparency and reform, are now making war upon us.

occupy musicians support the ows
From: rockrap@aol.com

Lou Reed and Rage Against the Machine's Tom Morello are among the first signatories of Occupy Musicians, a campaign supporting Occupy Wall Street and the worldwide movement against income inequality. The website aims to co-ordinate performances at Occupy sites and showcase new works by signatory artists.

Occupy Musicians is a sister site to the bookish campaign at Occupy Writers, the lensing of Occupy Filmmakers and the speech-bubbles at Occupy Comics. "There is a sizable force of musicians from across every genre of music who support this movement," organisers said. "[This is] a website for musicians to show solidarity with [Occupy's] protesters, organisers, and supporters."

As with Occupy Writers, whose signatories include Margaret Atwood, Rick Moody, and Lemony Snicket, Occupy Musicians is not just a rallying of the usual suspects. Although the list includes well-known campaingers such as Jello Biafra, Gang of Four's Dave Allen, and Fugazi's Ian MacKaye and Guy Picciotto, the list spans genres and generations. Rapper Talib Kweli rubs shoulders with British saxophonist Evan Parker, and the bassheads at Glitch Mob stand next to the Flaming Lips' Kliph Scurlock. Alongside septuagenarians such as Roy Harper and Frederic Rzewski, there is Tune-Yards' Merrill Garbus.

Other noteworthy names include Amanda Palmer, Bill Frisell, Dan Deacon, Kimya Dawson, John Zorn, Laurie Anderson, Marc Ribot, Saul Williams, Pauline Oliveros and Cibo Matto's Yuka Honda. More names are being added, but updates are coming slowly: "Volunteers are entering each and every name by hand," the creators say. This is the only reasonable explanation for the current absence of Billy Bragg.

OWS Organizer Questions Intentions of Secretive Affinity Group

Posted on Nov 22, 2011

Brennan Cavanaugh (CC-BY)

Occupy Wall Street protesters rally in New York City last week. The writing projected on the wall reads: “This revolution will not be privatized.”

By Alexander Kelly

NEW YORK CITY—At 6 p.m. on Monday, Nov. 21, I got a text message from a confidential source who worked closely with Occupy Wall Street for the past two months. Within 45 minutes the two of us were seated in a Tribeca coffee shop just a few blocks north of Zuccotti Park. There, over a pair of steaming coffee cups, I was told that a secret faction has developed within New York City’s Occupy movement, made up of a coalition of big-name celebrities and would-be leaders, some of whom look determined to steer the movement in a direction of their choosing, including into the hands of traditional political forces.

It’s not easy getting things done at Occupy. Since day one the group has paid faithful allegiance to the ideal of direct democracy, working to ensure that all major decisions—especially the allocation of funds—are made through a consensus process at nightly general assemblies in which anyone may participate. As you might guess, this means that things move slowly, and it is mounting frustration with this challenge that my source believes has motivated a small group of Occupiers to split away from the main body and begin making decisions on their own.

The story seems to center around a young man named Thorin Caristo. Caristo is an early Occupier who started his own media operation within Liberty Park and who in an early interview appears exhausted but level-headed and thoughtful. He has played a foundational role in organizing major events and has pushed without success for an occupation of Central Park. I’d heard his name before, mostly in conversation with people from the end of the plaza where the occupation’s lower-income contingent had gathered, some of whom claimed Caristo said disparaging things about them. Others from the better-to-do side of the park have paused and tensed up when I mentioned his name.

My source accused Caristo of holding secret meetings with an elderly New York-based activist named Jean-Louis Bourgeois(son of artist Louise Bourgeois). If a bizarre audiotape posted on YouTube last Sunday by an independent OWS media team is to be believed, then Bourgeois is Caristo’s private benefactor, providing him with the cash, connections and other resources needed to cast their opaque agenda as the movement’s own. My source asserts that a number of other now visible figures within the movement have worked or are working closely with Caristo, many of whom are alleged to have met or exchanged messages with celebrity supporters and possible financial and publicity sponsors of OWS, including Def Jam co-founder Russell Simmons; documentary filmmaker Michael Moore; civil rights attorney, former director of the New York branch of the ACLU and political aspirant Norman Siegel; and actor and possible New York City mayoral candidate Alec Baldwin.

Transparency and accountability kept surfacing as my source’s main concerns. Repeated attempts to understand what their colleagues were up to while out of view were met with curt dismissals and claims that they were too busy to explain. “This is a group that is supposed to represent everybody,” the source said. “If they’re raising money and organizing independently of the group, and representing themselves as leaders to celebrities and other business people—which they’re not—that alone is a giant conflict of interest. There are no leaders like that. We’re all leaders or the group doesn’t exist. Nobody should have anything to hide.”

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Bloomberg’s eviction of the Occupiers from Zuccotti Park made it easier for organizers to work literally behind closed doors, especially at a new office space on the 12th floor of a building at 50 Broadway that is being funded by an unnamed sponsor. If my source is right, then Zuccotti Park and its nightly showings of democracy in action may be at risk of becoming an elaborate front for a political operation directed by an ambitious, however well-intentioned, few. In the days ahead, I’ll try to confirm whether Occupy’s supporters have any reason to be concerned.

***

Truthdig reporter Alexander Kelly has been reporting on Occupy Wall Street from New York City. For more, visit truthdig.com/occupy

Mayor ‘Bull Connor” Bloomberg
has got to go

The reprehensible Bull-Connor-like tactics used against peaceful Occupy Wall Street protestors must stop.  I do not blame the police for their hostility and violence. The police are not stupid. They know that the protestors are on their side. The police are public servants.  They too stand to face job loss, pension cuts, social security cuts, reduction in medicare benefits and a host of other financial stresses. As my English friend puts it, “They are not turkeys longing for Christmas (dinner)”. No, these police are just pawns ordered to violence by their master, mayor “Bull Connor” Bloomberg.

It is very significant to ask these questions:

• Why would the mayor engage in a sneak attack while the protestors slept?
• Why would the mayor attack deliberately under the cover of darkness?
• Why would the mayor deliberately keep out reporters from covering this dastardly attack?

The answer is obvious. Because he planned evil deeds and it failed because his evil deeds have been brought to light. It also raises the question of what evil deeds are done to blacks and latinos away from the scrutiny of the public in things like “Stop and Frisk”? Trust is gone. He should resign.

“Bull Connor” Bloomberg used that sneak attack to throw away their prescription drugs, laptops, food, tents, backpacks, bicycle-generators – yes all their possessions. These people are not billionaires like him, so it was a devastating loss. Before he resigns, he should personally compensate them for their loss, a mere drop in the bucket for him.

Other mayors have acted responsibly. But others have acted like “Bull Connor” Bloomberg. This is no accident. Oakland mayor Quan confirmed that the mayors acted in concert. “Bull Connor” Bloomberg’s fingerprints are all over the violent police treatment in other cities. He is a billionaire mayor of the largest city in America. He has presidential ambitions. He is the most powerful mayor in America. He is able to wield power, money and influence over the other mayors and obviously did. But, thank goodness, not all.

And so typical of the 1%, as the protestors lick their wounds and the world reacts with dismay, “Bull Connor” Bloomberg struts around untouched, just like the millionaire bankers that torpedoed our country’s finances do.

What new brutality is he planning against these brave patriotic protestors that have endured so much? Like a serial killer, he must be stopped before he strikes again. We owe it to those brave protestors to protect them from his tyranny. Or, will he remain in his 1% billionaire fortress to do whatever he likes while we ordinary people must tolerate his abuses. Or to quote William Shakespeare:

“Why, man, he doth bestride the narrow world
Like a Colossus, and we petty men
Walk under his huge legs and peep about
To find ourselves dishonorable graves.”

Michael Phillips,
Editor, Hot Calaloo
http://www.hotcalaloo.com

Author, Boycott Money and Save Your Soul
- Launching The Goodwill Revolution".
http://www.goodwillie.org

stop the machine
- create a new world

Prepared by Occupy Washington DC
Freedom Plaza, November 2011

The disconnect between Congress and the people is vast.  For decades, Congress has been passing laws that benefit the 1%, their campaign donors and big business interests, rather than creating a fair economy that serves all U.S. citizens. With this report Occupy Washington, DC shows that Congress is out of touch with evidence-based solutions, supported by the majority of Americans that can revive the economy, reduce the deficit and wealth divide while create millions of jobs.

 OccupyWashingtonDC.org seeks a major transformation to a participatory democracy in the economy as well as in government. For forty years, concentrated corporate interests have acted with intent to take over government and other institutions. We seek an end to the rule of concentrated wealth and corporate power by shifting control, wealth and ownership to the people.

This report puts forward evidence-based solutions that will re-start the economy and avoid placing financial burdens on future generations.  For the most part these ideas are not new.  They are well accepted by economists and are consistent with the views of super majorities of Americans on key issues.  Further, more than three-quarters of U.S. citizens say the country’s economic structure is out of balance and “favors a very small proportion of the rich over the rest of the country.” They are right. The solutions to our economic crisis are evident but they are blocked by those who profit from the status quo and control elected officials through the corrupt U.S. political system and its money-based elections.

The elites in Washington, DC seek to erase deficits that were caused by increases in war and military spending, tax breaks for the wealthy and corporations, the increased cost of health care, as well as bank bailouts, and increased costs and lost revenue from the economic collapse. The bi-partisan elites seek to cut $1.2 trillion in deficits even though there is no outcry for such cuts or evidence in the economy that they are urgently needed.  They are proposing cuts in services to seniors, students, the poor and middle-working class households who did not cause the crash but already suffer from its consequences. This report shows that we can get the economy moving, reduce the wealth divide and control government spending while helping the 99%.

This report should not be considered the demand of the Occupy Movement. It was prepared[1] by one Occupation, Freedom Plaza in Washington, DC and it does not reflect even that Occupation’s full demands.  Most of this report provides solutions to the deficit questions the Congressional Super Committee is attempting to address while also re-starting the economy.  The difference between the Occupied Super Committee report and the Congressional Super Committee report will be stark and further demonstrate the corruption and dysfunction of government.  While this report’s recommendations would benefit the 99%, the report that will come out of the congressional Super Committee will benefit the 1%.  

Creating a Fair Tax System That Shrinks the Wealth Divide

The United States does not have a lack of financial resources; it has an intentionally unfair distribution of resources. The federal income tax has become less progressive and the rate paid by the wealthiest has been cut dramatically in recent decades.  From 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% for tax years 1954 through 1963. In 1964, the top marginal tax rate for individuals was 77%. From 1965 through 1981 the top rate was 70%. The top marginal tax rate was lowered to 50% for tax years 1982 through 1986 and today it is just 35%.

The tax on investment income, capital gains, has also been dramatically reduced.  The maximum statutory rate on long-term capital gains was 28% in 1991, 20% in 1997 and has been merely 15% since 2003.

The wealth divide has become extreme over the past three decades and tax policies have exacerbated this trend; much of the tax code exemplifies policies for the 1% at the expense of the 99%.  The wealth divide is one of the foundational reasons why the economy no longer works and is in steady decline for most people in the United States. The tax code inadequately funds government, but that is the result of unfair tax cuts, not because America is broke (it isn’t). As Andrew Fieldhouse of the Economic Policy Institute testified “Income per capita has jumped 66% over the past 30 years, and is projected to grow another 60% over the next 30 years.” The country needs to put in place policies that reduce the wealth divide and share wealth fairly so that when the economy grows it benefits all citizens, not just the 1%.

The recommendations below begin to correct the unfair policies of the last three decades, but these are only first steps to the transformational changes that are needed.

• Tax the highest income households: From 1960 to 2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one thousand — have seen the share of their income paid in total federal taxes drop from 60% to 24.3%. America’s highest income-earners — the top 400 people who have wealth equal to 154 million Americans — have seen their federal income tax drop from 51.2% in 1955 to 18.1% in 2008. If the top 400 paid as much of their incomes in personal income tax as the top 400 of 1955, the federal treasury would have collected $50 billion more in revenue from just those 400 taxpayers. If the top 0.1% of taxpayers — Americans with incomes that averaged $4.4 million — had paid total federal taxes at the same rate as the top 0.1% paid these taxes in 1960, the federal treasury would have collected an additional $250 billion in revenue.
   
• Merely not extending the Bush tax cuts would add nearly $500 billion each year in tax revenue.  Thus in just over two years the goal of the deficit committee would be met. This would be insufficient to correct the wealth divide and does not go as far as Occupy Washington, DC advocates.
   
• A tax of a half of a percent or less on Wall Street speculation could raise over $800 billion in a decade. The Speculation Tax on the purchase of stocks, bonds and derivatives would be a tiny tax with a big impact.  People in the U.S. pay much higher taxes on purchases of food and clothing; it is only fair that the wealthy pay taxes on purchasing wealth instruments.
   
• A fair tax on capital gains, treating it as ordinary income would raise $1 trillion over a decade. Wealth-based income and work-based income should be treated equally under the law as it used to be. Warren Buffet has received a great deal of attention for pointing out that he pays a lower tax rate than his secretary or anyone who works for him. The reason for this is that investment income is taxed at a much lower rate than income from labor.  The United States needs to tax wealth more and work less. 
   
• Congress should enact a “pure worldwide” tax system, in which all profits of U.S. corporations, whether they are generated in the U.S. or abroad, would be taxed by the U.S. This would end “deferral,” i.e. where taxes are deferred until money is brought back into the United States. U.S. corporations would continue to receive a credit against any taxes they pay to a foreign government (the foreign tax credit) so that profits are not double-taxed. Under a pure worldwide tax system, corporations would have little or no tax incentive to move jobs offshore because the U.S. would tax profits of corporations no matter where they are generated. The Treasury estimates that deferral of U.S. taxes on offshore corporate profits costs close to $50 billion each year, and many experts think this estimate is substantially understated.
   
• Ending deferral does not even address the hundreds of billions lost through tax havens. Tax havens should be shut down through the passage of the Stop Tax Haven Abuse Act.  In fact, the U.S. Treasury estimates this costs $100 billion each year. In 2006 the U.S. Senate Permanent Subcommittee on Investigations reported that Americans now have more than $1 trillion in assets offshore and illegally evade between $40 and $70 billion in U.S. taxes each year through the use of offshore tax schemes.

• Closing corporate tax loopholes would return the fair share of taxes paid by corporations to the funding of government. Declining corporate taxation is another prime factor in increasing deficits. Corporate income taxes have fallen from roughly 4.8% of GDP in the 1950s to only 1.8% of GDP over the past decade. Ending just two large breaks, deferral of overseas revenue and accelerated depreciation would raise about $114 billion over a decade. The Treasury Department lists $365 billion in corporate tax breaks being gifted annually — that’s $3.65 trillion over the next 10 years. Due to tax loopholes, corporations pay record low tax rates — they actually pay 21% on average. Indeed, a recent report by Citizens for Tax Justice found that Wells Fargo received $18 billion in tax breaks, while both Verizon and General Electric paid negative taxes.  Earlier Citizens for Tax Justice reported that 12 major companies which together made $171 billion in profits from 2008-2010 paid a negative $2.5 billion in taxes, thanks to $62 billion in tax subsidies.

The taxes described above would generate at least $600 billion annually.  The goal of the Joint Deficit Committee of $1.2 trillion over ten years could be met in two years. The United States has more than enough wealth to meet the needs of its people.

Cutting Spending for Economic Security

• Military spending, found in the Department of Defense and other departments, has increased dramatically during each year that George W. Bush and Barack Obama have been president, roughly doubling during the past decade both as measured in real dollars and as a percentage share of discretionary spending.  Military and related “security” spending is now at over $1 trillion per year and comprises well over half of federal discretionary spending.  It is also very nearly equal to the military spending of all other nations on earth combined. Ending our two most costly wars in Iraq and Afghanistan before the 2013 fiscal year budget would save $1.8 trillion, as compared with ending those wars on the currently planned schedule, with savings of $108 billion per year. 

• The U.S. should only spend what it needs to defend itself. The military budget can be cut significantly by replacing private contractors, closing some of the more than 1,100 foreign military bases and outposts and eliminating weapons systems many of which the Pentagon says it does not need.  

• The Sustainable Defense Task Force recommended modest cuts of $1 trillion over the next decade, not counting savings from ending the current wars. U.S. military spending could be cut by 80% and still be comfortably well ahead of any other nation's military spending. See Creating Jobs and Restarting the Economy below on how these funds could be used to create jobs, restart the economy and provide much-needed services and infrastructure to the country.

• Corporate tax subsidies through tax breaks and giveaways are a form of spending that needs to be cut.[2] The U.S. needs to end corporate tax subsidies and repatriate overseas funds. According to Citizens for Tax Justice, the 280 most profitable U.S. corporations received tax subsidies amounting to $222.7 billion from 2008-2010. These companies sheltered half their profit from taxes. The result: 30 companies paid less than 0 taxes despite $160 billion in pre-tax profits; 78 of the 280 companies enjoyed at least one year in which their federal income tax was zero or less; weapons maker’s paid a mere 10.6 percent rate in 2010; financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years.

• Negotiating better prices with Big Pharma would save more than $200 billion over ten years in pharmaceutical costs. Reforms of Medicare could offer much larger savings. Expanding to an improved Medicare for all system would control the cost of health care spending while covering all in the United States reducing significant financial burdens often resulting in bankruptcy and foreclosure.

Creating Jobs and Restarting the Economy

One in six people who would like a full-time job are unable to find one.  The unemployment rate of 9% greatly underestimates unemployment.  If the pre-1994 measures were used, e.g. including discouraged workers who want jobs, as well as part-time workers who want full time jobs the underemployment and unemployment rate would be 23%.  The measures listed below would effectively create jobs and restart the economy. Job loss means less tax revenue and more expenditure by the government. A critical ingredient to reducing the deficit is job creation. 

• One million jobs could be created annually by writing down all underwater mortgages to market value.  Correcting housing mortgages to the real value of homes would inject $71 billion per year into the economy and save families $6,500 per year on mortgage payments. This would also fix the housing crisis which is an anchor holding back any recovery, according to a new report by The New Bottom Line.  One in five mortgage holders owe more on their mortgage than their home is actually worth. Banks should not continue to be able to profit from housing bubble prices – a bubble they created with their poor and unethical lending practices. Adjusting mortgages to the real value of homes is a fair way to fix the housing market. 

• Failure to stop the foreclosure crisis will ensure a stalled economy.  It is an essential step to economic repair. This could be done without Congress as Fannie and Freddie together hold $1.5 trillion in housing loans or mortgage-backed securities which could be directed to fix the mortgages.  The Federal Reserve has just under a trillion and could unilaterally correct loans to reflect real value. And, the banks could be pressured. Last year, the nation’s top six banks paid out more than twice the cost of re-writing mortgages to make them fair ($71billion per year) in bonuses and compensation alone ($146 billion in 2010). The nation’s banks are sitting on a historically high level of cash reserves of $1.64 trillion.
   
• A fundamental reason for job stagnation is relying on the private sector to create jobs and refusing to engage in direct government job creation in the public sector. According to Business Week, “Since the end of the recession, government employment--including federal, state, and local jobs--has fallen by roughly 600,000. State and local governments have particularly felt the pain, according to a report released this week by the Census Bureau, which shows that there were over 200,000 fewer state and local government jobs in 2010 than in 2009.” The most recent jobs report shows a continued downward trend in government jobs. State deficits and federal inaction ensure these job losses will continue.
   
• In addition to our need to rebuild the nation’s physical infrastructure, there is an even more urgent need to rebuild its human infrastructure.  The drastic rise in inequality and joblessness has torn apart the social fabric, destroying countless individual lives, families, urban neighborhoods, and rural communities across our country. For more than a generation, the major “growth industry” in impoverished communities has been the illegal drug industry. Persistent, trans-generational poverty is directly responsible for the fact that the U.S. now leads the world in imprisoning its own people: 2.5 million, by the latest count, with more than 5 million more under some form of court supervision. (China, with its 2.5 billion people, runs a poor second.) Although most of the prison population is white, people of color are disproportionately represented, leading many analysts to declare that the mass incarceration of African-Americans and Latinos has created a new caste of unemployable "untouchables." Only a massive public works, community development, and job training program can end the destruction of American communities and stop the shameful criminalization of poverty.

• As public sector jobs are created, the country must also strengthen the public sector in ways that will require new democratic reforms to put publicly owned or financed enterprises under popular control. A long-term goal should be to democratize the economy so the people of the United States share in wealth and ownership as well as influence over the economy. See below Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all in the United States. There is a desperate need for a mass public works program, not only to create jobs, but also to meet the urgent needs of the country.

• The American Society of Civil Engineers estimated that failure to fix the nation’s infrastructure has created serious damage so extensive that $2.2 trillion will be required by 2014 just to meet current demands. The ASCE gave the nation’s infrastructure an overall grade of “D.” Its report cited cracking levees, a quarter of the nation’s existing bridges sagging, leaking pipes losing billions of gallons of drinking water per day, aging sewers releasing human waste into rivers and lakes, horrendous traffic congestion and air and water pollution. This is not “make work” but urgently needed work. A public works program modeled after the depression era Works Progress Administration would create 15 million jobs and build the infrastructure needed to create a sustainable economy.
   
• Spending on the military is a drag on the economy, not just because it makes up 55% of federal discretionary spending, but because more jobs would be created by spending on education, infrastructure, green energy, or even on tax cuts for non-billionaires.  Converting a fraction of current military spending to other industries and tax cuts could produce 29 million new jobs, one for every unemployed or underemployed person in the United States, even after finding new employment for everyone displaced during the conversion.
   
• Putting in place improved Medicare for all would provide a major stimulus for the U.S. economy not only by controlling the cost of health care and reducing deficits but by creating 2.6 million new jobs, and infusing $317 billion in new business and public revenues, with another $100 billion in wages into the U.S. economy.
   
• Erasing student loan debt would have an immediate stimulating effect on the economy. As Mychal Smith writes: “[C]onsider the potential impact on the economy if all of a sudden 35 million people were able to add to their monthly budget anywhere between $400 and $1000 that they no longer needed to satisfy exorbitant student loan repayments. . . . Debt free degree holders would allow for more risk taking and innovation.” As Robert Applebaum, an advocate of forgiving student loans writes: “the ‘educated poor’ are not buying homes, not starting businesses or families, not inventing, investing or innovating and otherwise engaging in economically productive activities.”  And, as Cryn Johannsen of All Education Matters points out, this would be a long term stimulus because college debts are multi-decade in length. Johannsen describes a “crisis that is affecting millions of educated Americans. We are indebted for life. Most of us will never be able to pay off our loans for college.” Education is a critical building block for the economy and going forward the United States must develop a system of higher education that does not require students to go into debt just to receive an education. Rather than a loan-based system the U.S. needs a system based on grants, scholarships and public funding.

These recommendations would create millions of jobs and get the economy moving again.  As the economy develops and expands, programs need to be put in place so that new wealth is shared more fairly; workers have greater control over their work through employee ownership and protections for collective bargaining; and so some of the profits created by public investment (i.e. by tax dollars) are shared among all U.S. taxpayers.  See below Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all U.S. Citizens.

Protecting and Improving Social Security

Saving Social Security is not a traditional left-right battle. Polls consistently show that people across the political spectrum overwhelmingly support Social Security and do not want to see it cut. Even the vast majority of Tea Party Republicans support these programs. Cutting Social Security is a Wall Street agenda of the 1% that opposes the interests of the rest of us. As Dean Baker writes “There is a bipartisan consensus among the elites that these programs should be cut. The guiding philosophy of this drive is that public money that goes to programs for middle income and poor people is money that could be in the pockets of the wealthy.”

Social Security does not contribute to the deficit.  Social Security is financed by a designated Social Security tax and there is more than $2.5 trillion in the Social Security trust fund.  The efforts to cut Social Security to fix the deficit are a fraud designed to enrich Wall Street financiers by forcing people into the private retirement market.

The temporary payroll tax cut will create some jobs, but not enough to get the economy moving and is not the most effective tax cut stimulus. Further, it unnecessarily puts Social Security in jeopardy by reducing taxes designated for Social Security. The Congressional Budget Office estimates the cut will reduce federal revenues by $112 billion over the next two years. The government will have to borrow to fill that hole in the Social Security trust fund, giving opponents of Social Security another argument against the program.

Social Security faces no immediate threat of insolvency. The Congressional Budget Office just released new projections showing that the Social Security trust fund is fully solvent through the year 2038. Even after that date, the program would have enough money to pay 81% of scheduled benefits for the rest of the century. Below are recommendations that would strengthen social security.

• The funding of Social Security is easy to fix. Currently, the tax on wages subject to the tax is capped at $107,000. The upward redistribution of income over the last three decades has caused a large share of wage income to escape taxation. If all wage income were subject to the tax, then it would leave Social Security fully solvent for its 75-year planning period.
   
• The Social Security tax has not kept up with the wealth divide. In 1983, the Social Security tax ceiling was set so the tax would hit 90% of all wages covered by Social Security. That 90% figure was built into the 1983 Greenspan Commission’s fix of Social Security. Requiring the ceiling to rise with inflation was expected to result in the Social Security tax continuing to hit 90% of total income. But, in 1983 no one predicted the extreme wealth divide that exists today. The richest 1% of Americans got 11.6% of total income in 1983. Today the top 1% takes in more than 20% of total income and as a result the Social Security payroll tax hits only about 83% of their total income. The tax should go back to covering 90% of income. That would mean the ceiling on income subject to the Social Security tax would need to be raised to $180,000.
   
• Social Security should be strengthened in ways that increase the retirement security of people in middle-and working-class. Particular attention should be paid to improving the living standards in retirement of workers in poorly compensated jobs, who typically have little or no retirement savings outside of Social Security.  The average Social Security benefit of $14,000 is only about 30% above the poverty line. Indeed, 21% of Social Security beneficiaries receive Social Security benefits that fall below the poverty line. In 2011, the Commission to Modernize Social Security proposed increasing benefits for all retirees by a uniform amount equal to 5% of the average benefit, about a $700 annual increase for beneficiaries today; that workers who have worked at least 30 years should receive benefits equal to 125% of the poverty threshold when they retire at the full retirement; providing at least five years of dependent care credits through Social Security as women (and some men) spend part of their working years caring for children and elderly parents; reinstating the post-secondary student benefit that existed until 1983 and allowed students who were receiving Social Security due to a parent’s death, disability, or retirement to continue until they were 22 years old if they were in college; and increasing the survivor’s benefit for widowed spouses to ensure that they receive at least 75% of the benefit amount they received when their spouse was still alive.

Improving Medicare and Expanding it to Provide Health Care to All in the United States

• Former Labor Secretary Robert Reich writes “Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles. Medicare offers a means of reducing these costs.”
   
• Medicare bears the burdens of existing within an insurance-based health care that fails to control costs and creates tremendous bureaucracy.  While there are short-term fixes to Medicare, what is needed is an end to the current insurance-based approach. The United States spends the most per capita per year on health care yet a third of the population is either uninsured or underinsured so that they face financial ruin if a serious accident or illness occurs. Health care spending in the U.S. is rising 2.5% faster than GDP.

• Expanding and improving Medicare so it covers all in the United States is a key component to controlling health care costs and government spending; as well as ending the deficit problem of state and federal budgets. Estimates of how much would be saved on administrative costs alone by extending Medicare to cover the entire population range up to $400 billion a year. This savings plus the inherent cost-controls of a single payer health system would offset the cost of providing everyone in the United States with access to lifelong, comprehensive, quality health care. Controlling health care costs would sharply reduce the long-term budget crisis, as well as foreclosures and bankruptcy.
   
• Even without improving and expanding Medicare to cover all, the program is not in crisis. The Medicare Trustees say that the program faces a modest shortfall over its 75-year planning horizon. The projected shortfall is around 0.3% of GDP or less than one-fifth of the amount that annual military spending was increased since September 11^th, 2000.
   
• Economist Jack Rasmus points out that all it takes to cover the Medicare shortfall is a mere 0.25% increase in the Medicare share of the payroll tax for the next ten years and another 0.25% starting in the eleventh year. The Medicare tax rate is currently 2.9% for the employee and the employer.  These tiny tax increases would make Medicare secure.
   
• In fact, the Congressional Budget Office (CBO) calculates that the Medicare system in its current form is far more efficient than the privatized system advocated by a bi-partisan consensus of political elites. CBO’s projections show that switching from Medicare to a privatized system would add $34 trillion to the cost of buying Medicare equivalent policies over the program’s 75-year planning period.
   
• Medicare provides efficiency. Reich reports: “Medicare’s administrative costs are in the range of 3%. That’s well below the 5% to 10% costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25% to 27% of premiums). And it’s way, way lower than the administrative costs of individual insurance (40%). It’s even far below the 11% costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.”

Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all Citizens in the United States

Big finance corporate capitalism is failing. It is concentrating ownership and wealth as well as domination of the economy in the wealthiest Americans. New approaches are needed to share wealth, ownership and economic power more fairly. The grass roots protests, whether from the Occupy Movement or the anger from the conservative Tea Party, are based on the same realities: economic insecurity and economic unfairness. A full discussion of these issues is beyond the scope of this report but it is time for the people of the United States to be asking critical questions:

• What is the next evolution of the economy?  
• What can be done to reduce economic insecurity and economic unfairness?
• How can it be reshaped so that people gain greater control of their lives and greater influence over the economy?
• What new forms of ownership can be developed to shift economic power to the people?  

The answers to these questions lie in the conflict of our era – participatory democracy vs. concentrated wealth. There is growing evidence and experience that shows a democratized economy is the fairest, most sustainable and effective approach which results in a shared prosperity.   

Democratizing the economy would move the United States away from concentrated corporate capitalism and create an economy in which wealth is more equitably shared.  This change is already happening under the radar of U.S. media coverage. A democratized economy already has a foothold in the United States. There is a lot of experimentation going on regarding worker ownership, democracy in the work place and sharing in the profits of corporations; with communities working together to control development through non-profit land trusts; with public banking, democratizing money and community banks; with public utilities and democratizing energy; and with participatory budgeting. These are a few examples of the democratization of the economy that is building a new economic model of more widespread ownership of assets and participation and wealth.  As one of the witnesses of the Occupied Super Committee, Gar Alperovitz writes:

“Over the last three decades, for instance, more workers have become owners of their own companies than are members of unions in the private sector; indeed, 5 million more. Simultaneously, there has been increasing experimentation with unions within such firms, and with new ways to increase participation and control. There are also more than 4,500 nonprofit community development corporations that operate affordable housing and other neighborhood programs. Approximately 130 million Americans are members of co-ops.  In Cleveland, an innovative group of linked cooperatives has set new standards for community-building economic change. ‘Social enterprises’ are developing in communities throughout the nation that transform the ownership of capital into businesses, the sole purpose of which is to provide community services.

One form of new ownership is cooperatives. There are 130 million Americans who are members of some types of co-ops, most commonly credit unions.  Another widely shared experience is joint-ownership is Employee Stock Ownership Plans (ESOPs) which give employees ownership of companies through stocks, while these do not usually include management by employees they do provide a share of the profit.  There are more than 13 million people who are part of ESOPs – meaning there are more employee stock owners than there are members of private unions.  Worker-owned co-ops go further and give workers a say in the management of the company. Worker owned co-ops are at the cutting edge of democratizing the economy and provide some of what we need to transform the economy.”

At a national level, despite comments of some in the corporate media and some elected officials who speak for big business interests, the truth is that national programs like Social Security and Medicare have worked well.  As described in previous sections of this report, these programs can be improved and expanded but they are also models on which to create programs that respond to national needs.  Further, the bail out of the automobile industry, which included some public ownership, has succeeded in saving that industry and returning it to profit.  However, more could have been done to serve the public good by continuing public representation on the boards of automobile companies, requiring taxpayers share in the profit as investors and directing those industries to build mass transit and create jobs.

The Occupy Movement seeks a radical transformation to a new economy and political system.  A close examination of what is happening in the United States shows that this transformation is already underway.

The Lessons of the Super Committee: Corruption Rules Dysfunctional Government

The proposals in this report show that it would not be difficult for the so-called “Super Committee” to achieve the requirement of at least $1.2 trillion in savings over the next decade. And, that it can be done in a way that corrects wealth disparity and re-starts the economy. But, in many ways, the super committee is “occupied” by corporate interests and cannot act for the people.  The make-up of the committee and the tens of millions of dollars members have received from entrenched corporate interests ensure that the committee will exemplify the corruption in Congress – which is why people are occupying public spaces across the country.

The Occupation of Washington, DC at Freedom Plaza expects the commission’s recommendations, if they are able to make recommendations, to reflect the interests of their donors.  We urge the public and the media to review their recommendations with these political donations in mind.

The twelve Members of the Joint Committee on Deficit Reduction have received $41 million from the financial sector during their time in Congress, according to a report by Public Campaign and National People’s Action, “Wall Street and the Supercommittee: The $41 Million Question.” At least 27 current or former aides for the “super committee” members have lobbied on behalf of financial firms.

• The 12 members of the super committee have received at least $41 million from the finance, insurance, and real estate (FIRE) sector during their time in Congress.
• They have received nearly $900,000 from three of the top U.S. banks—JPMorgan Chase, Bank of America, and Wells Fargo
• Since 2000, the industry has spent over $4 billion lobbying elected officials.
• Nearly 30 former aides to the 12 members work as lobbyists for financial industry interests.

The ten biggest contributors to the super committee members include:

Club for Growth $990,066
Microsoft Corp. $810,100
University of California $629,495
Goldman Sachs $592,684
EMILY’s List $586,835
Citigroup Inc. $561,081
JPMorgan Chase & Co. $494,316
Bank of America $349,566
Skadden, Arps, et al. $347,356
General Electric $340,935

The largest donor, the Club for Growth, opposes any new taxes on the wealthiest in the United States.  As a result, despite the abhorrent wealth divide, the committee is unlikely to recommend the obvious, fair taxes on the wealthiest people who fund their campaigns.

The members of the committee received more than $3 million total during the past five years in donations from political committees with ties to weapons contractors, health care providers and labor unions. They received more than $1 million overall in contributions from the health care industry and at least $700,000 from weapons companies. This presents a problem for the super committee because if they fail to find $1.2 trillion in savings over the next decade it will result to mandatory cuts that will impact health care and weapons makers.  This means the committee is likely to make a bad deal for the United States, in order to avoid cuts to their major donors.

Throughout the time when the committee has been meeting they have been holding fundraisers across the country.  This open money-taking while making decisions that affect those who are giving money is the kind of open corruption that has led to a loss of faith in government.

It is not only donations that will impact the committee, but a major lobbying onslaught by 400 groups who report lobbying the Super Committee.  About 30% of these organizations — 118 groups in total – were from the health sector. The finance insurance and real estate sector ranked third, with 40 companies within that sector reporting lobbying activity during the third quarter that targeted the super committee. And 39 groups in the energy sector reported lobbying the super committee. Both the communications and electronics sector and the general business sector saw 26 companies and organizations explicitly mention the super committee in their third-quarter lobbying reports. These are many of the same concentrated corporate interests that have funded the campaigns of super committee members.

Conclusion: Revolt against Economics for the 1%

Once again, the people of the United States will see corruption reign supreme.  Despite evident solutions to the deficit and the economic collapse, the Congress will show its corruption and dysfunction and be unable to put forward real solutions. 

We issue this report to alert everyone – the political system is broken.  It is corrupted by the power of concentrated wealth, campaign donations and corporate power.  The job of the occupations across the country is to build an independent nonviolent movement that replaces this corrupt system with one in which the people rule.  The battle between concentrated wealth and participatory democracy will be heightened by the evident corruption of the Super Committee which will not challenge the unfair policies of the 1% while requiring austerity for the 99%.  

The economic and political elite should expect protests to grow. We are at the beginning of what will be seen as a historic revolt against status quo elites that will transform this economy as well as how the United States is governed.

[1] The evidence-based solutions in this report come from people who are experts in the fields addressed as well as the views of people affected by the policies.  We relied on a range of sources and have provided links to those sources in the on-line version of this report.  In addition, Occupy Washington, DC held a public hearing on Wednesday, November 9^th.  You can see the public hearing at: CSPAN Coverage of Occupied Super Committee Hearings.  Participants included: Kevin Zeese an organizer of Occupy Washington, DC and co-director of It’s Our Economy and co-chair of Come Home America; Andrew Fieldhouse of the Economic Policy Institute; Carl Conetta of the Project on Defense Alternatives; Kenneth Peres is an economist with the Communications Workers of America; Dean Baker of the Center for Economic and Policy Research; Margaret Flowers an organizer of Occupy Washington DC and congressional fellow for Physicians for National Health Program; Gar Alperovitz is a founding principal of the Democracy Collaborative and with the National Center for Economic and Security Alternatives. [2] This is commonly known as corporate welfare.  All corporate welfare should be stopped until the Congress passes laws transforming corporate welfare into taxpayer investment.  There are reasons for government to invest in building the economy, for example there is a need to invest in a new energy economy, but the profits from these investments should not only go to the 1% who own energy companies, they should be treated as taxpayer investment and all taxpayers should share in the profit from the investment.  Such a system could be modeled after the Alaska Permanent Trust which has existed for oil exploration on state lands in Alaska since 1980.  Such a system could develop into a guaranteed national income that would lift people out of poverty and provide a safety net to all.  This is a critical part of a democratized economy.  See: Agenda for a Democratized Economy, http://itsoureconomy.us/issues/.

Stop The Machine! Create A New World!
Visit us at www.OccupyWashingtonDC.org

The Right To Dream
We Are Fighting For Justice

“Pity the nation that has to silence its writers for speaking their minds… Pity the nation that needs to jail those who ask for justice while communal killers, mass murderers, corporate scamsters, looters, rapists and those who prey on the poorest of the poor, roam free.” - Arundhati Roy

By Arundhati Roy
November 18, 2011
"The People’s University"  - Held at Judson Memorial Church 11/16/11 -  

Tuesday morning, the police cleared Zuccotti Park, but today the people are back. The police should know that this protest is not a battle for territory. We're not fighting for the right to occupy a park here or there. We are fighting for justice. Justice, not just for the people of the United States, but for everybody.

What you have achieved since September 17th, when the Occupy movement began in the United States, is to introduce a new imagination, a new political language into the heart of empire. You have reintroduced the right to dream into a system that tried to turn everybody into zombies mesmerized into equating mindless consumerism with happiness and fulfillment.

As a writer, let me tell you, this is an immense achievement. And I cannot thank you enough.

We were talking about justice. Today, as we speak, the army of the United States is waging a war of occupation in Iraq and Afghanistan. US drones are killing civilians in Pakistan and beyond. Tens of thousands of US troops and death squads are moving into Africa. If spending trillions of dollars of your money to administer occupations in Iraq and Afghanistan is not enough, a war against Iran is being talked up.

Ever since the Great Depression, the manufacture of weapons and the export of war have been key ways in which the United States has stimulated its economy. Just recently, under President Obama, the United States made a $60 billion arms deal with Saudi Arabia - moderate Muslims, right? It hopes to sell thousands of bunker busters to the UAE. It has sold $5 billion-worth of military aircraft to my country, India, which has more poor people than all the poorest countries of Africa put together. All these wars, from the bombing of Hiroshima and Nagasaki to Vietnam, Korea, Latin America, have claimed millions of lives – all of them fought to secure the "American way of life".

Today, we know that the "American way of life" – the model that the rest of the world is meant to aspire towards – has resulted in 400 people owning the wealth of half of the population of the United States. It has meant thousands of people being turned out of their homes and their jobs while the US government bailed out banks and corporations – American International Group (AIG) alone was given $182 billion.

The Indian government worships US economic policy. As a result of 20 years of the free market economy, today, 100 of India's richest people own assets worth one-quarter of the country's GDP while more than 80% of the people live on less than 50 cents a day; 250,000 farmers, driven into a spiral of death, have committed suicide. We call this progress, and now think of ourselves as a superpower. Like you, we are well-qualified: we have nuclear bombs and obscene inequality.

The good news is that people have had enough and are not going to take it any more. The Occupy movement has joined thousands of other resistance movements all over the world in which the poorest of people are standing up and stopping the richest corporations in their tracks. Few of us dreamed that we would see you, the people of the United States on our side, trying to do this in the heart of Empire. I don't know how to communicate the enormity of what this means.

They (the 1%) say that we don't have demands… perhaps they don't know, that our anger alone would be enough to destroy them. But here are some things – a few "pre-revolutionary" thoughts I had – for us to think about together:

We want to put a lid on this system that manufactures inequality. We want to put a cap on the unfettered accumulation of wealth and property by individuals as well as corporations. As "cap-ists" and "lid-ites", we demand:

• An end to cross-ownership in businesses. For example, weapons manufacturers cannot own TV stations; mining corporations cannot run newspapers; business houses cannot fund universities; drug companies cannot control public health funds.

• Two, natural resources and essential infrastructure – water supply, electricity, health, and education – cannot be privatized.

• Three, everybody must have the right to shelter, education and healthcare.

• Four, the children of the rich cannot inherit their parents' wealth.

This struggle has re-awakened our imagination. Somewhere along the way, capitalism reduced the idea of justice to mean just "human rights", and the idea of dreaming of equality became blasphemous. We are not fighting to just tinker with reforming a system that needs to be replaced.

As a cap-ist and a lid-ite, I salute your struggle.

Salaam and Zindabad.

Arundhati Roy won the Booker prize in 1997 for her novel, The God of Small Things. Her non-fiction work includes An Ordinary Person’s Guide to Empire, Field Notes on Democracy: Listening to Grasshoppers, and Broken Republic. An impassioned critic of neo-imperialism, military occupations, and violent models of economic ‘development’, Roy was awarded the Sydney Peace Prize in 2004.  Her consistent exposure of the Indian state’s repressive policies has led to her being variously labelled a seditionist, secessionist, Maoist and unpatriotic troublemaker.

First Steps in Reforming the U.S. Financial and Tax System

By Michael Hudson

November 18, 2011 "Counterpunch" - -The Occupy Wall Street movement has many similarities with what used to be called the Great Awakening periods in America. Such periods always begin by realizing how serious the problem is. So diagnosis is the most important tactic. Diagnosing the problem mobilizes power for a solution. Otherwise, solutions will seem to come out of thin air and people won’t understand why they are needed, or even the problems that solutions are intended to cure. The basic problem today is that nearly everyone is in debt. This is the problem in Europe too. There are Occupy Berlin meetings, the Greek and Icelandic protests, Spain’s “Indignant” demonstrations and similar ones throughout the world.

When debts reach today’s proportions, a basic economic principle is at work: Debts that can’t be paid; won’t be. The question is, just how are they not going to be paid? People with student loans are not permitted to declare bankruptcy to get a fresh start. The government or collection agencies dock their salaries and go after whatever property they have. Many people’s revenue over and above basic needs is earmarked to pay the bankers. Typical American wage earners pay about 40 percent of their wages on housing whose price is bid up by easy mortgage credit, and another 10 to 15 percent for credit cards and other debt service. FICA takes over 13 per cent, and federal, local and sales taxes another 15 percent or so. All this leaves only about a quarter of many peoples’ paychecks available for spending on goods and services. This is what is causing today’s debt deflation. And Wall Street is supporting it, because it extracts income from the bottom 99% to pay the top 1%.

Half a century ago most economists imagined that the problem would be people saving too much as they got richer. Saving meant non-spending. But the problem has turned out to be just the opposite: debt. Overall, salaries have not risen in decades, so many people have borrowed just to break even. Instead of an era of free choice, very little of their income is available for discretionary spending. It is earmarked to pay the financial, insurance and real estate sectors, not the “real” production and consumption economy. And now repayment time has arrived. People are squeezed. So when America’s saving rate recently rose from zero to 3 percent of national income, it takes the form of people paying down the debts.

Many people thought that the way to get rich faster was to borrow money to buy homes and stocks they expected to rise in price. But this has left the economy financially strapped. People are feeling depressed. The tendency is to blame themselves. I think that the Occupy Wall Street movement, at least here in New York, is like what has occurred in Greece and also in the Arab Spring. People are coming together, and at first they may simply watch what’s going on. Onlookers may come by to see what it’s all about. But then they think, “Wait a minute! Other people are having the same problem I’m having. Maybe it is not really my fault.”

So they begin to see that all these other people who have a similar problem in not being able to pay their debts; they realize that they have been financially crippled by the banks. It is not that they have done something wrong or are sore losers, as Herman Cain says. There’s something radically wrong with the system.

Fifty years ago an old socialist told me that revolutions happen when people just get tired of being afraid. In today’s case the revolution may grow nearer when people get over being depressed and stop blaming themselves. They come to think that we are all in this together – and if this is the case, there must be something wrong with the way the economy is organized.

Gradually, observers of Occupy Wall Street begin to feel stronger. There is positive peer pressure to reinforce their self-confidence. What they intuitively feel is that the Reagan-Clinton-Bush-Obama presidencies have squeezed their lives. The economy has become untracked.

What’s basically wrong is that the financial system is running the government. For years, Republicans and Democrats have both said that a strong government, careful regulation and progressive taxation are markers on the road to serfdom. The politicians and neoliberal economists who write their patter say, “Let’s take planning out of the hands of government and put it in the ‘free market.’” But every market is planned by someone or other. If governments step aside, then planning passes into the hands of the bankers, because of their key role in allocating credit.

The problem is that they have not created credit to finance industrial investment and employment. They have lent for speculation on asset price inflation, using debt leveraging to bid up housing prices, stock and bond prices, and foreign exchange rates. They have convinced borrowers that they can get rich on rising housing prices. But this merely makes new homebuyers go deeper into debt to buy a home. And when banks say that rising stock and bond prices are good for the economy, this price rise lowers the dividend or interest yield. This means that pension funds and individuals have to save much more for retirement. Instead of improving their life, it makes them work harder and borrow more just to stay in place.

The banking system’s alternative to “the road to serfdom” thus turns out to be a road to debt peonage. This financial engineering turns out to be worse than government planning. The banks have taken over the Federal Reserve and Treasury and put their lobbyists in charge – men such as Tim Geithner and the others with ties to Rubinomics dating from the Clinton administration, and especially to Goldman Sachs and other giant Wall Street firms.

*       *       *

So the first thing to realize is something that is characteristic of all great reform movements. Voters are not yet supporting a radical position to restructure the whole system. But at least they are coming to see that small marginal reforms won’t work, or are simply trick promises, like President Obama’s promise that banks would renegotiate mortgages for homes in negative equity as part of the quid pro quo for the bailouts they received from Treasury Secretary Geithner. There’s been no quid pro quo, merely talk.

People see that law enforcement is missing when it comes to the banks and Wall Street. So simply restoring the criminal justice system would be progress. It used to be that if you ran a fraud, if you cheated people, if you lied on your income tax and falsified statistics, then you would be sent to jail. But the Obama administration has appointed Eric Holder to represent Wall Street. He has not thrown any bankers in jail, recognizing that they are the major campaign contributors of the party, after all.

What is easiest for most people to accept is the idea of restoring the way the economy used to be more in balance – back when people earned income by being productive rather than getting rich by transferring other peoples’ savings and public giveaways into their own pockets. But what I sensed in New York was anger not only at this economic problem, but the fact that the political system is broken. There is no one to vote for as an alternative to pro-bank candidates. So what began as anger has become a gathering awareness that Obama was simply fooling voters instead of leading the change he promised. That’s what politicians do, of course. But people hoped that he might be different. That was the gullibility he played on. He has turned into the nightmare they thought they were voting against.

Moving to the right of the Republicans, he started his administration by appointing the Simpson-Bowles Commission staffed by opponents of Social Security. He recently followed that up by appointing the Congressional Super-committee of Twelve to come out with an even more anti-Social Security, anti-Medicaid and anti-minority position that the Republicans could get away with. If they were to have tried to pass such a right-wing policy, the Democratic Congress would have refused to pass it. But they don’t know how to deal with a Democratic president who appoints Wall Street lobbyists to his cabinet and acts like Margaret Thatcher saying that There Is No Alternative (TINA) to making Social Security recipients, labor and minorities pay for Wall Street’s bad gambles and bank losses. He has helped Wall Street capture the government – on behalf of the 1%.

The man whom Obama asked to be his mentor when he joined the Senate was Joe Lieberman. He evidently gave Obama expert advice about how to raise funds from the financial class by delivering his liberal constituency to his Wall Street campaign contributors. So the problem is not that President Obama is well meaning but inept – an idealist who just can’t fight the vested interests and insiders. He’s thrown in his lot with them. In fact, he really seems to believe the right-wing, pro-Wall Street ideology – that the economy can’t function without a financial system that guarantees “savers” (the top 1%) against loss, even when the bottom 99% have to pay more and more.

And on a personal level, Obama knows that his fund raising comes mainly from Wall Street, and the only way to get this money is to sell out his constituency. You’ve got to give him enough credit to recognize this obvious fact.

The upshot is that we now have a political nightmare. Yet  Obama still seems to be the best that the Democrats can offer! This is why I think the protestors are saying they are not going to let the Democrats jump in front of the parade to try and mobilize support for their party. They realize that the financial system is broken and that neither party is trying to do much about it. So the political system has to be changed as well as the economic system.

Suppose you were going to design a society from scratch. Would you create what we have now? Or would you start, for instance, by reforming the most egregious distortions of campaign finance? As matters stand, Goldman Sachs has been able to buy the right to name who is going to be Treasury Secretary. They selected Geithner, who gave them $29 billion from A.I.G. just before he was appointed. It’s like that all down the line – in both parties. Every Democratic congressional committee chairman has to pay to the Party  $150,000 to buy the chairmanship. This means that the campaign donors get to determine who gets committee chairmanships. This is oligarchy, not democracy. So the system is geared to favor whoever can grab the most money. Wall Street does it by financial siphoning and asset stripping. Politicians do it by getting money from the beneficiaries – the 1%.

Once people realize that they’re being screwed, that’s a pre-revolutionary situation. It’s a situation where they can get a lot of sympathy and support, precisely by not doing what The New York Times and the other papers say they should do: come up with some neat solutions. They don’t have to propose a solution because right now there isn’t one – without rebuildingthe system with many, many changes. So many that it would be like a new Constitution. Politics as well as the economy need to be restructured. What’s developing now is how to think about the economic and political problems that are bothering people. It is not radical to realize that the economy isn’t working. That is the first stage to realizing that a real alternative is needed. We’ve been under a radical right-wing attack – and need to respond in kind. The next half-year probably will be spent trying to spell out what the best structure would be.

There is no way to clean up the mess that the Democratic Party has become since politics moved into Wall Street’s pockets. The Republicans also have become a party of lobbyists. So it looks as though there is no solution within the existent system. This is a revolutionary, radical situation. The longer that the OWS groups can spend on diagnosing the problem and explaining how far wrong the system has gone, the longer the demonstrators can gain support by showing that they share the feelings everybody has these days – a feeling of being victimized. This is what is creating a raw material that has to potential to flower into political activism, perhaps by spring or summer next year.

The most important message is that all this impoverishment and indebtedness is unnecessary. There is no inherent economic reason for things to be this way. It is not really the way that “markets” need to work. There are many kinds of markets, with many different sets of rules. So the important task is to explain to people how many possibilities there are to make things better. And of course, this is what frightens politicians, Wall Street lobbyists and the other members of the pro-oligarchic army of financial raiders.

So how do we  transform the American economy in ways that would produce policies that would at least start to help break the grip that the financial sector has had in devastating the economy in terms of its performance for average households?

There are two stages to any kind of a transformation. The first stage is simply to start re-applying the laws and the taxes that the Bush and Obama administrations have stopped applying. You don’t want Wall Street to be able to put its industry lobbyists in charge of making policy. So the first task is to get rid of Geithner, Holder and the similar pro-financial administrators whom Obama has appointed to his cabinet and in key regulatory positions. This kind of clean-up requires election reform – including a reversal of the Supreme Court’s recent Citizens United ruling that enables a financial oligarchy to lock in its control of American politics.

Prevent monopoly price gouging. Bring bank charges in line with the real cost of doing business. 

What is needed today is more than just going back to past ideals. After all, good old class warfare was not so rosy either. But at least the Progressive Era had a program to subordinate finance to serve industry and the rest of the economy. The problem is that its reformers never really had a chance to carry out the ideas that classical economists outlined.

The classical idea of a free market economy was radical in its way – precisely by being natural and thus getting rid of unnatural warping by special privileges for absentee landlords and banks. This led logically to socialism, which is why the history of economic thought has been dropped – indeed, excluded – from today’s academic curriculum. What is needed is to complete the direction of change that World War I interrupted and that the Cold War further untracked. After 1945 you didn’t hear anything any more about what John Maynard Keynes called for at the end of his General Theory in 1936: “euthanasia of the rentier.” But this was the great fight for many centuries of European reform, and it even was the path along which industrial capitalism was expected to evolve. So let me begin with what was discussed back in the 1930s, trying to recover the Progressive Era reforms.

Setting up a more fair banking and financial system requires changing  tax favoritism as well, which I will discuss below. There are a number of good proposals for reform. One of the easiest and least radical is set up a public option for banking. Instead of relying on Bank of America or Citibank for credit cards, the government would set up a bank and offer credit cards, check clearing and bank transfers at cost.

The idea throughout the nineteenth century was to create this kind of public option. There was a Post Office bank, and that could still be elaborated to provide banking services at cost or at a subsidized price. After all, in Russia and Japan the post office banks are the largest of all.

The logic for a public banking option is the same as for governments providing free roads: The aim is to minimize the cost of living and doing business. On my website, michael-hudson.com, I have posted an article just published in the American Journal of Economics and Sociology on Simon Patten. He was the first professor of economics at the Wharton Business School. He spelled out the logic of public infrastructure as a “fourth” factor of production (alongside, labor, capital and land). Its productivity is to be measured not by how much profit it makes, but by how much it lowers the economy’s price structure.

Providing a public option would limit the ability of banks to charge monopoly prices for credit cards and loans. It also would not engage in the kind of gambling that has made today’s financial system so unstable and put depositors’ money at risk. Ideally, I would like to see banks act more like the old savings banks and S&Ls. In fact, the most radical regulatory proposal I would like to see is the Chicago Plan promoted in the 1930s by the free marketer Herbert Simon. This is what Dennis Kucinich recently proposed in his National Emergency Employment Defense Act of 2011 (NEED).

This may seem radical at first glance, but how else are you going to stop the banks from their mad computerized gambling, political lobbying and credit creation for corporate raiders to borrow and pay their financial backers by emptying out pension funds and cutting back long-term investment, research and development?

The guiding idea is to take away the banks’ privilege of creating credit electronically on their computer keyboards. You make banks do what textbooks say they are supposed to do: take deposits and lend them out in a productive way. If there are not enough deposits in the economy, the Treasury can create money on its own computer keyboards and supply it to the banks to lend out. But you would rewrite the banking laws so that normal banks are not able to gamble or play the computerized speculative games they are playing today.

The obvious way to do this is to reinstate the Glass-Steagall Act so that they can’t gamble with insured deposits. This way, speculators would bear the burden if they lost, not be in a position to demand “taxpayer liability” by threatening to collapse the normal vanilla banking system. Abolishing Glass-Steagall opened the way for Wall Street to organize a protection racket by mixing up peoples’ deposits with bad gambles and with the growth of debts way beyond the ability to be paid.

To sum up, the idea is to shape markets so as to steer the banks to lend for actual capital formation and to finance home ownership without credit inflation that simply bids up prices for homes as well as for other real estate, stocks, and bonds.

Tax reform needs to back up and reinforce financial reform

Today’s economic problem is systemic. This is what makes any solution so inherently radical. In changing part of the economic system, you have to adjust everything, just as when a doctor operates on a human body. Financial reform requires tax reform, because much of the financial problem stems from the tax shift off real estate and finance onto labor and industry.

The most obvious fiscal task that most people understand – and support – is to restore the progressive tax system that existed before 1980, and especially before the Clinton and Bush tax cuts. It used to be that the rich paid taxes. Now they don’t. But the key isn’t just income-tax rates as such. What needs to be recognized is the kind of taxes that should be levied – or how to shift them back off labor onto property where they were before the 1980s. You need to restore the land taxes to collect the “free lunch” that is not really “free” if it is pledged to pay the banks in the form of mortgage interest.

Over the past few decades the tax system has been warped more and more by bank lobbyists to promote debt financing. Debt is their “product,” after all. As matters now stand, earnings and dividends on equity financing must pay much higher tax rates than cash flow financed with debt. This distortion needs to be reversed. It not only taxes the top 1% at a much lower rate than the bottom 99%, but it also encourages them to make money by lending to the bottom 99%. The result is that the bottom 99% have become increasingly indebted to the top 1%. The enormous bank debt attached to real estate does not reflect rising rents as much as it reflects the tax cuts on property. Wall Street lobbyists have backed Congressional leaders who have shifted taxes onto consumers via sales taxes and income taxes, as well as FICA payroll withholding. This ploy treats Social Security and Medicare as “user fees” rather than paying them out of the overall budget – and financed out of progressive taxation on the top 1%. If wage earners pay more in FICA, you can be sure that the wealthy get a tax cut.

This anti-progressive tax shift is largely responsible for the richest 1% doubling their share of income. It also has led to the 99% having to pay banks what they used to pay the tax collector. They pay interest rather than taxes. If I were economic advisor, I would explain just how this works – which is what I already try to do on my website. In a nutshell, the tax shifts since World War II have left more and more of the land’s site value to be capitalized into interest payments on bank loans. So the banks have ended up with what used to be taken by landowners. There is no inherent need for this. It doesn’t help the economy; it merely inflates a real estate bubble. Economic growth and employment would be much stronger if income tax rates were lowered for most people. Property owners and speculators would pay. There would be less free lunch and more “earned” income.

The Obama Administration has proposed the worse of both worlds – getting rid of the tax deductibility of interest for homeowners. This would squeeze them, without scaling down the bank debts that have absorbed the cuts in property taxes. So  Obama is sponsoring yet another anti-consumer proposal to make the bottom 99% pay for government – while using government funds to subsidize the banks and bail out their bad bets.

What needs to be done is to remove the tax deductibility of interest for investors in general. This tax favoritism is a subsidy for debt financing – and the main problem that the U.S. economy faces today is over-indebtedness. A good policy would aim at lowering the debt overhead. Debt leveraging should be discouraged, not encouraged.

Speculators have borrowed largely to make capital gains. They originally were taxed as normal income in the 1913 income tax. The logic was that capital gains build up a person’s savings, just as earning an income does. But the financial and real estate interests fought back, and today there is only a tiny tax on capital gains – a tax that sellers don’t have to pay if they plow their money into another property or investment to make yet more gains! So when Wall Street firms, hedge funds, and other speculators avoid paying normal taxes by saying that they don’t “earn” money but simply make capital gains, this is where a large part of today’s economic inequality lies.

I would tax these asset-price gains (mainly land prices) either at the full income-tax rate or even higher. The wealthy 1% make their gains in this way, claiming that they don’t really “earn” income, so they shouldn’t have to pay taxes as if they are wages or profits. But that’s precisely the problem: Why would you want to subsidize not earning income, but merely making money by speculating – and then demanding that the government bail you out if you make a capital loss when your speculations go bad, on the logic that you have tied up most peoples’ normal bank deposits in these gambles? This is what exists today. And it is why people think the system is so unfair. Most of the super-rich families have made their fortunes by insider dealing and financial extraction, not by being productive. They are not “job creators” these days. They have become job destroyers by demanding austerity to squeeze out more money from a shrinking economy to pay themselves.

Many people – especially homeowners – are sucked into thinking that low capital gains taxes make them rich, and that high property prices leave them with less to spend. But this turns out not to be the case once the process works its way through the economy. These workings need to be more widely explained.

For many years families got rich as the price of their home rose. But they also got much deeper in debt. The real estate bubble was debt-financed. A property is worth whatever a bank will lend against it. The end result of “easy lending” and tax distortions to favor interest-bearing debt is that most families own a smaller and smaller proportion of their homes’ value – and have to pay rising mortgage debt service. This doesn’t really make them better off. The job of a president or economic advisor should be to explain how this game works, so people can get off the debt treadmill. The economy will shrink if it doesn’t lower its debt overhead.

I would close down tax avoidance in offshore banking centers by treating offshore deposits by Americans as “earned but hoarded” income and tax it at 90%. You restore the rates of the Eisenhower administration when the country had the most rapid debt growth that it had. You reinstate criminal penalties for financial fraud and tax evasion by misrepresentation. But the tax avoiders are asking the Obama administration to do just the opposite: to declare a “tax holiday” to “induce” them bring this offshore money home – by not taxing it at all! This kind of giveaway should be blocked. Tax avoiders among the top 1% should be penalized, not rewarded.

The Bush-Obama administration has promoted “neoliberal” tax and financial policies that have reversed a century of Progressive Era reforms. The past 30 years have suffered a radical transformation of tax policy and financial policy. So it takes an equally deep response to undo their distortions and put the American economy back on track. The guiding idea is simply to restore normalcy. The Progressive Era that emerged from classical economics understood the economic benefits of taxing unearned wealth (“rent extraction”) at the top of the economic pyramid, provide basic infrastructure services at cost rather than creating fiefdoms for privatizers to install tollbooths and make their gains tax-exempt. Radical neoliberalism has reversed this. It has vastly multiplied the debts owed by the bottom 99% to the top 1%.

This is leading to debt peonage and what really is neo-feudalism. We are seeing a kind of financial warfare that is as grabbing as the old-style military conquests. The aim is the same: the land, basic infrastructure, and use of the government to extract tribute.

A financial Clean Slate 

To restore the kind of normalcy that made America rich, the most important long-term policy would be to recognize what is going to be inevitable for every economy. Debts need to be written down – and the politically easiest way to cut through the tangle is to write them off altogether. That would free the bottom 99% from their debt bondage to the top 1%. It would be a Clean Slate, starting over – and trying to do things right this time around. The creditors have not used the banking system to make America more productive and richer. They have used it as a vehicle to reduce the population to debt serfdom.

A debt write-down sounds radical and unworkable, but it’s been done since World War II with great success. It is the program the Allies carried out in the German economy in that country’s 1947 currency reform. This was the policy that created Germany’s Economic Miracle. And America could experience a similar miracle.

Any economy would benefit from cancelling the bad debts that have been built up. Keeping them on the books will handcuff the economy and cause debt deflation by diverting income to pay debt service rather than to spend on goods and services. We are going into a new economic depression – not just a “Great Recession” – because most spending is now on finance, insurance and real estate, not on goods and basic services. So markets are shrinking, and unemployment is rising. That is what will happen if debts are not written down.

This can be done either by a Clean Slate across the board, or it can be done more selectively, by applying what’s been New York State law since before the Revolution, going back to when New York was still a colony. I’m referring to the law of fraudulent conveyance. This law says that if a creditor lends to a borrower without having any idea how the debtor can pay in the normal course of business, without losing property, the loan is deemed to be fraudulent and declared null and void.

Applying this law to defaulting homeowners would free the homes that are in negative equity throughout the country. It would undo the fraudulent loans that banks have made, the trick loans with exploding interest rates, balloon mortgages and so forth. It also would free debt-strapped companies from being forced to sell off their parts to make their corporate raiders rich.

As an associated law, pension funds should be first in line in any bankruptcy, not at the end of the line as they are now. Current practice lets companies replace defined-benefit programs with defined contribution programs – where all that employees know is how much is taken out of their paychecks each month, not what they will be receiving when they retire. Only the managers have protected their pensions with special contracts and golden parachutes. This is the reverse of what pension plans were supposed to do.

Employee Stock Option Plans (ESOPs) also are being looted. This is what has recently happened at the Chicago Tribune courtesy of Sam Zell, who borrowed money and repaid it by looting the Tribune’s ESOP. A fraudulent conveyance law applied at the nationwide level would stop this. People like Zell are looters, and so are the bankers behind him. This is the class warfare that is being waged today. And the war is being won by the 1% – while pushing the American economy into depression.

As part of the rules to define what constitutes “fraudulent” or irresponsible lending, mortgage debt service should be reduced to the rate that FDIC head Sheila Bair recommended: 32 percent. The problem with debt write-downs, of course, is that when you cancel a debt, you also cancel some party’s savings on the other side of the balance sheet. In this case, the banks would have to give up their claims. But this is what used to happen in financial crashes. When debts go bad, so do the loans. So the government is radical in saying that America’s debts will be kept on the book, but it will create new public debt to give to Wall Street for its own debts that have gone bad as a result of its reckless lending.

The banks obviously would prefer to bankrupt millions of homeowners than to take even a penny’s loss. Their fight to make the government pay for their bad debts – while keeping the debts of the bottom 99% on the books – explains why the richest 1% of Americans have doubled their share of income and the returns to wealth in the last thirty years. That’s inequitable. Their accumulation of financial savings has not taken the form of tangible capital investment in factories or other enterprises to employ labor. It’s looted labor’s savings and got employees so deep into debt that they’re “one paycheck away from homelessness.” They’re afraid to go on strike, because they would miss a mortgage payment or an electric utility payment, and their credit-card interest rates would jump to 29 percent. They’re even afraid to complain about working conditions today, because they’re afraid of getting fired.

This wasn’t formerly the case. It is the result of “financial engineering” that should be reversed. There’s no reason to treat the savings that the top 1% have got in this predatory way as being sacrosanct. Their gain – their increase in financial wealth, in bonds, savings and ownership of bank loans – equals the debts that have been imposed on the bottom 99%. This is the basic equation that needs to be more widely understood. It is not an equilibrium equation. At least, it won’t be political equilibrium when people start to push back.

We are seeing a financial grab for special privilege and for political power to use the government to subsidize the top 1% at the expense of the bottom 99%, by scaling back social spending, Social Security, Medicare, Medicaid and federal revenue sharing with the states. The Treasury and Federal Reserve have printed new debt to give to Wall Street – some $13 trillion and still counting since Lehman Brothers went under in September 2008. Tim Geithner and Hank Paulson used the crisis as an opportunity to give enormous U.S. debt to Wall Street. That’s more radical than reversing this to restore the economy’s financial structure to the way it used to be. If you don’t restore it, you’ve replaced economic democracy with financial oligarchy.

The way to reverse this power grab is to reverse the giveaways by cancelling the bad debts that have been loaded onto the economy. That is the only way to restore balance and prevent the polarization that has occurred. The problem is that savings by the top 1% have been used in a parasitic, extractive manner. It has been lent to the bottom 99 percent to get them deeper and deeper into debt. So they “owe their soul to the company store,” as the song Sixteen Tons put it. “You get a day older, and deeper in debt.”

The government itself has become more indebted, most recently by the $13 trillion in new debt printed and given to the banks to make sure that no financial gambler need surfer a loss. At the same time the Obama administration did this, it claimed that a generation in the future, the Social Security system may be $1 trillion in deficit. And that,  Obama says, would cause a crisis – and not leave enough to continue subsidizing his leading campaign contributors. So in view of this new debt creation – while moving debts to consumers and Social Security contributors to the bottom  of the list – if you are going to reverse the bad-debt polarization that we’ve reached today, it is necessary to do more than simply reinstate progressive taxation and shift the tax system so that you collect predatory unearned income – what the classical economists call economic rent. The burdensome debts need to be written off.

This probably will take half a year to get most people to realize and accept the idea is to reconstitute the system by lending for productive purposes, not speculation and rent-seeking opportunities. You want to stop the banks from lobbying for monopolies to create a market for leveraged buy-outs of these opportunities – and of course also for real estate speculation and outright gambling.

Wall Street has orchestrated and lobbied for a rentier alliance whose wealth is growing at the expense of the economy at large. It is extractive, not productive. But this fact is concealed by the national income and product accounts reporting financial and other FIRE sector takings as “earnings” rather than as a transfer payment from the economy at large – from the 99% – to the 1% of Americans who have got rich by making money off finance, monopolies and absentee real estate rent-seeking.

It is not really radical to resist Wall Street’s financial attack on America. Resistance is natural – and so is a reversal of the savings they have built up by indebting the rest of the economy to themselves. They took their money and ran with it, stashing it offshore in tax-avoidance islands, in Switzerland, Britain and other havens. Shame on the political hacks who defend this and who attack Occupy Wall Street simply for resisting the financial sector’s own radical power grab and shifted taxes off themselves onto the bottom 99%.

Privatization is an asset grab masquerading as full employment policy

What about  government employment projects to guarantee full employment? My first caveat is to warn against letting the Obama administration turn these projects into a military giveaway.

My second caveat is to prevent this full-employment program from creating a later privatization giveaway to Wall Street – that is, infrastructure that the government will sell off to the ruling party’s major campaign contributors for pennies on the dollar. This is what Public/Private Partnerships have become, as pioneered in England under Margaret Thatcher and Tony Blair. Wall Street is rubbing its hands and saying, “That’s a great idea! Let the government pay for infrastructure and spend a billion dollars on a bridge – and then sell it to us for a dollar.” The “us” may not be the banks themselves, but their customers, who will borrow the money and pay the banks an underwriting commission as well as interest on the money they use to buy what the government is privatizing.

The pretense is that privatization is more efficient. But privatizers add on interest and financial fees, high executive salaries and bonuses, and turn the roads into toll roads and other infrastructure into neofeudal fiefdoms to charge monopolistic access fees for people to use. This is what has happened in Chicago when it sold off its sidewalks to let bankers finance parking meters in exchange for a loan. Chicago needed this loan because the financial lobbyists demanded that it cut taxes on commercial real estate and on the rich. So the financial sector first creates a problem by loading the economy down with debt, and then “solves” it by demanding privatization sell-offs under distress conditions.

This is happening not only in America, but in Greece and other countries under the insistence of Europe’s bank lobbying organization, the European Central Bank. That’s why there are riots in Athens. The financial war against society is not only being waged here, but throughout the world.

In promoting full employment, the aim should be to invest public money in a way that the Republicans and Democrats cannot later turn around and privatize the capital investment at a giveaway price. So I am all on favor of public infrastructure spending as long as you have safeguards against the financial fraud and giveaways to insiders of the sort that that the current administration is sponsoring. The privatizers and their banks would like to install tollbooths on new bridges and get a free ride to turn America into a tollbooth economy.

MICHAEL HUDSON is a former Wall Street economist. A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press.  He can be reached via his website, mh@michael-hudson.com