Thursday, March 31, 2011

Republicans Hate Workers

This editorial from Neil Garfield's Living Lies website summarizes my feelings exactly about the death spiral of political and economic opportunism we are seeing in the US today. We have politicians seeking any excuse to tear down portions of the population they should be supporting. Here's why:

Maybe it works politically to get elected, but this attack on workers looks like scape-goating to me, and a pretty effective attempt to distract from reality with the myth that workers, homeowners and pensioners caused the historic financial mess that was in fact created, promoted and allowed solely by Wall Street with the blessing of our government. These events where long-standing historical pictures of workers doing their work are torn down, destroyed and put away, is like the editorial says, shades of measures you see in third world countries with ruthless dictatorships changing “reality” at will. For it isn’t a matter of the extent to which collective bargaining rights should exist or be regulated, it is something entirely different. This attack to score political points is shooting all of us in the foot. All of us are walking down a dangerous path of economic chaos and destruction — whether we are rich or poor, and whether we wish to acknowledge it or not. The facts are there for anyone to do their own analysis. World events have accumulated to the point where it is absolutely certain that nobody can be certain about how anything is going to turn out. We can only hope or fantasize. Political expediency always trumps right action. So instead of coming together and finding ways where we have each other’s backs, we are continuing the decades long trend of pulling apart and finger pointing. Here is a fact that is incontrovertible: if workers in the U.S. were fully employed with reasonable compensation and coverage of all the physical needs for themselves and their families, the entire economy would be booming. Here is another one: putting working class people lower on the social scale into near slaves will cause them to do other things — people don’t like to be treated that way, especially Americans. These attacks are simply impractical regardless of how much you believe workers deserve to be treated this way. without them employed, earning money and leveling out income inequality, there will be nobody to buy anything, make anything or do anything in America except trade paper on Wall Street. “Anything” includes especially homes whose bottom is still not in sight simply because our politicians lack the “vision” to see what is right in front of them. At this point I don’t care who goes to jail or even who deserves to be blamed. I want out of this mess. The enormous collateral benefits conferred on Wall Street did nothing to increase liquidity or allow an economic recovery that ordinary people can see on their dinner table, if they have one, in their home, if they have one. The table is tilted on an extreme angle away from the ordinary citizen and toward about 400 people who basically have or control most of the wealth in this country. When you are talking 400 versus 300,000,000 citizens, things have gone too far. Continuation of this scape-goating, and avoiding the realities of our ailing economy will only prolong and deepen the pain. We’ve been attacked by a common enemy — Wall Street. I thought Americans pulled together and responded to such attacks in unity and always won against the aggressor. This time, maybe not. As Republican governors vie to become the most anti-union executive in the land, Gov. Paul LePage of Maine has stooped to behavior worthy of the pharaohs’ chiseling historic truth from Egyptian monuments. Mr. LePage has ordered that a 36-foot-wide mural depicting workers’ history in Maine be removed from the lobby of the state’s Labor Department. The reason? His office cited some complaints from offended business leaders and an anonymous fax declaring that the mural smacked of official brainwashing by North Korea’s dictator. This is what’s passing for democratic governance in a state with a noble workers’ history. The mural honors such groups as the state’s shoemakers and the women riveters who kept the ironworks going in World War II. Key workplace moments depicted include a paper mill strike against harsh working conditions and a tribute to pioneer lumberjacks. All too “one-sided,” decreed the governor, who also ordered that the agency’s seven meeting rooms no longer be named after figures from workers’ history. The nation’s first woman cabinet member — Labor Secretary Frances Perkins — is buried in her beloved Maine, but her room name won’t survive. Nor will state residents be reminded of William Looney, a 19th-century Republican legislator who fought for state child labor reforms. Mr. LePage’s acting labor commissioner suggests replacing the mural with neutral paint and naming the conference rooms after Maine mountains. To be fair, Mr. LePage does retain a sense of workplace opportunity. After his election last November, he named Lauren, his 22-year-old, fresh-from-college daughter, to what was termed an entry-level job as assistant to the governor’s chief of staff. At $41,000 a year, the post offers $10,000 more than the pay for workers who pass the teacher and police tests. That’s on top of Ms. LePage’s free room and board at the governor’s mansion.

Wednesday, March 30, 2011

Class Warfare

By Paul Farrell of MarketWatch. An essay that argues coolly clearly and logically what I have been saying for years and for which I have regularly been put in my place for promoting "class warfare." As I am fond of saying, I have no children so apres moi le deluge, though why parents and grandparents put up with this crap is beyond me.

Yes, "there’s class warfare, all right," warns Warren Buffett. "But it’s my class, the rich class, that’s making war, and we’re winning." Yes, the rich are making war against us. And yes, they are winning. Why? Because so many are fighting this new American Civil War between the rich and the rest.

Not just the 16 new GOP governors in Wisconsin, Michigan, Ohio, Florida, and across America fighting for new powers. Others include: Chamber of Commerce billionaires, Koch brothers, Forbes 400, Karl Rove’s American Crossroads, Grover Norquist’s Americans for Tax Reform — which now has 97% of House Republicans and 85% of the GOP Senators signed on his "no new taxes" pledge — the Tea Party and Reaganomics ideologues.

Wake up America. You are under attack. Stop kidding yourself. We are at war. In fact, we have been fighting this Civil War for a generation, since Ronald Reagan was elected in 1981. Recently Buffett renewed the battle cry: The "rich class" is winning this war. Except most Americans still don’t realize they’re losing, don’t see the prize at stake.

All this was predicted back in September 2008 by Naomi Klein, author of "Shock Doctrine: The Rise of Disaster Capitalism." Yes, we were warned that the GOP’s Reaganomics ideology would stage a rapid comeback … warned before the market collapsed … before Wall Street was virtually bankrupt. … before Treasury Secretary Henry Paulson conned Congress into $787 billion in bailouts … warned before Obama’s 2008 election

Free-market Reaganomics roaring back, more powerful than before
Yes, back in the heat of battle, in September 2008, Klein warned America: "Whatever the events of this week mean, nobody should believe the overblown claims that the market crisis signals the death of ‘free market’ ideology." Then the meltdown went nuclear. Klein warned: "Free market ideology has always been a servant to the interests of capital, and its presence ebbs and flows depending on its usefulness to those interests. During boom times, it’s profitable to preach laissez faire, because an absentee government allows speculative bubbles to inflate."

But "when those bubbles burst, the ideology becomes a hindrance, and it goes dormant while big government rides to the rescue." Remember: A week later Paulson was on his knee, begging House Speaker Nancy Pelosi for that $787 billion bailout, to save our incompetent Wall Street banks that caused the meltdown from certain bankruptcy.

"But rest assured," continued Klein in September 2008, Reaganomics "ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize." And yes, America, this war strategy is happening thanks to General Buffett, the new GOP Congress and 16 aggressive anti-democracy GOP governors.

Escalation of new Civil War: GOP dictators killing democracy
After the 2010 election of these new GOP governors, the new Civil War escalated with a new phase of self-destructive "disaster capitalism," thanks to the Supreme Court’s Citizen’s United decision. Their strategy was first revealed in the Wisconsin dictator Scott Walker’s war against the unions. Then last week the GOP assault went nuclear.

Michigan’s GOP Gov. Rick Snyder signed the "much despised emergency financial manager legislation into law," said local ABC news, labeling the law "draconic" for giving the governor new dictatorial powers to appoint "emergency financial managers … to run struggling cities and schools, including the ability to terminate union contracts."

We learned of Snyder’s democracy-killing coup a week earlier when MSNBC’s Rachel Maddow interviewed Naomi Klein. Maddow also exposed another particularly harsh tactic: Snyder’s $1.7 billion tax hikes against seniors and the poor. He was "not using it to close the budget gap. He is giving it away in the form of $1.8 billion in corporate tax cuts." Get it, folks? In the GOP governors new strategy escalating this Civil War, the GOP is robbing the poor to give to the rich.

Maddow exposed the truth behind the GOP’s economic strategy: "It’s not about the budget in Michigan … not about the budget in Wisconsin … not about the budget in Florida … not about the budget in Ohio … what Michiganders have been trying to get the rest of the country to pay attention to is that what these Republicans are doing in the states is not just not about the budget. It’s about something far worse." Wake up America.

GOP using ‘shock doctrine’ to gain new anti-democracy powers
The GOP is anti-democracy: With the GOP, "this whole democracy thing" is "very inefficient," warned Klein. Republican governors are using "a fiscal crisis as a pretext to do stuff they otherwise want to do … Republicans in Michigan want to be able to unilaterally abolish your town. And how do you know when you’re in a financial emergency? Because the governor tells you … or a company he hires." Yes the GOP, the party of big business and billionaires, secretly hates democracy, it’s too inefficient for the rich class.

In the interview, Klein reiterated: The GOP governors’ strategy is a clear example of "disaster capitalism," the Reaganomics war strategy that has dominated, obsessed and driven the GOP for a generation. Klein warns, "these guys have been at this for 30 years," it is "an ideological movement … they believe in a whole bunch of stuff that’s not very popular," like "privatizing the local water system, busting unions, privatizing entire towns. If they said all this in an election they’d lose."

And that’s why crises are so crucial to the GOP war strategies to take over America: Crises "are very, very handy, because you can say we have no choice. … the sky is falling in." Then the GOP governors "can consolidate power. We remember this from the Bush administration. They did this at the federal level. After 9/11, they said, we have a crisis, and we have to essentially rule by fiat."

But the truth, warns Klein, is that the GOP "really doesn’t believe in the governments that they are running … this is a really old story." The greed of their billionaire backers is insatiable. They do not like democracy. And the actions of the new GOP governors is proof that what they really want are dictatorial powers to privatize government and get personally richer.

GOP megalomania: Create crises, change the course of history
Money, power, greed: That’s why the GOP is "so desperate to tie the hands of unions. Why 16 states are facing similar battles" says Klein, because "unions are the final line of defense against privatization of the public sector. Unions are the ones who fight privatization of the school system, of the water system, of the power system."

And that’s why, in this new American Civil War the GOP keeps its "eye on the prize, because there’s a lot of money to be made in the kinds of crony deals that could be rammed through when you have all of that power consolidated in the governor’s office." Get it?

Remember when Wisconsin dictator Scott Walker thought he was talking to billionaire GOP backer David Koch: The vision of the GOP became very clear. Walker said: "This is our moment to change the course of history." This same egomaniacal mind-set has obsessed the GOP since Reaganomics emerged a generation ago. Crises are opportunities for the GOP, whether real or fake (as we saw in Wisconsin and Iraq), every crisis is an excuse for the GOP’s dictators to activate every possible weapon in their "disaster capitalism" arsenal.

Yes, each crisis triggers a grandiose button in the GOP psyche, an obsession to "change the course of history," to act like Ronald Reagan in the "moment that ended communism," as Walker said. That’s also why GOP governors like Walker are comparing the unions to communism, drawing clear battle lines in this new American "Civil War."

‘Disaster capitalism’ is the GOP strategy in this new Civil War
In my review of "The Shock Doctrine: The Rise of Disaster Capitalism" a few years ago I called it "the most important book on economics in the 21st century." That’s truer today. Events the past four years make this a must-read for anyone interested in understanding the Second American Civil War being fought by Buffett’s rich class, Wall Street CEOs and the GOP dictators batting to dominate America.

Reaganomics, "Shock Doctrine" and disaster capitalism all define the same ideology that’s been driving the GOP for over a generation, an ideology gaining even more power now as they accelerate their battle plans, increasing efforts to gain total power over our government, economy and culture, a strategy that will ultimately destroy everything.

Klein’s recent interview with Maddow exposed the GOP’s charade: Now we know with certainty that the budget crises in the 50 states were "created on Wall Street then moved to Main Street, deepened by the policy decisions to bail out banks instead of bailing out homeowners, instead of bailing out workers. And that means your tax base collapses."

We know Wall Street greed was the fuel igniting America’s current economic problems. And now, unfortunately, average Americans have "to pay for the crisis again. First, with a bailout. And now, people are paying with it again, with budget cuts." And underneath all is the GOP’s free-market Reaganomics ideology. Wake up America, you’re losing the new Civil War to a rich class that’s lost its moral compass.

Bottom line, Klein warns: "What this fight is really about is not unions versus taxpayers … It’s a fight about who’s going to pay for the crisis that was created by the wealthiest elite in this country." Actually, it’s even worse. Because while we averted total collapse, it was only delayed, destined to return soon and finally overwhelm America. Remember Uncle Warren’s battle cry: "The rich class is winning."

Tuesday, March 29, 2011

US Torture Best Practices

This essay from Naked Capitalism dicusses the graudal and apparently irreversible brutalization of our society. And the implications we should all be wondering about as social controls tighten in the face of lowered expectations and insistent economic decline. Somehow torture of "enemies" is okay until it becomes a means of keeping citizens in line. But how do we prevent ourselves from crossing that impossibly fine line?

How the US Got in the Torture Business

Normally, I’d relegate an article that discusses torture to Links and let readers chat it up among themselves. But an article at TruthOut on the genesis of the US torture program needs to be read widely. And in many respects, it’s not as off topic as it might seem to be.

On one level, it is a troubling illustration of an Israeli saying, “Love your enemy, for you will become him.” The torture program grew out of training courses designed by one Dr. John Bruce Jessen, a psychologist who consulted to the CIA. They were intended to steel soldiers who had been captured from enemy techniques designed to “exploit” them. That might be as mundane as cowing them into being submissive captives, but was presumably for more nefarious purposes: to get them to make false confessions or statements, to spy on fellow prisoners, or to collaborate with their jailers on a more widespread basis. In lay terms, the objective is to break them psychologically yet have them still appear credible to third parties.

Retired Air Force Captain Michael Kearns, who helped hire Jessen in 1989 and later trained thousands of soldiers in the defensive course that Jessen originally developed for the Survival Evasion Resistance Escape (SERE) branch of the US Air Force Intelligence Agency, found and released some of Jessen’s original handwritten notes for one part of the course, “Psychological Aspects of Detention”:

“From the moment you are detained (if some kind of exploitation is your Detainer’s goal) everything your Detainer does will be contrived to bring about these factors: CONTROL, DEPENDENCY, COMPLIANCE AND COOPERATION,” Jessen wrote. “Your detainer will work to take away your sense of control. This will be done mostly by removing external control (i.e., sleep, food, communication, personal routines etc. )…Your detainer wants you to feel ‘EVERYTHING’ is dependent on him, from the smallest detail, (food, sleep, human interaction), to your release or your very life … Your detainer wants you to comply with everything he wishes. He will attempt to make everything from personal comfort to your release unavoidably connected to compliance in your mind.”

Jessen wrote that cooperation is the “end goal” of the detainer, who wants the detainee “to see that [the detainer] has ‘total’ control of you because you are completely dependent on him, and thus you must comply with his wishes. Therefore, it is absolutely inevitable that you must cooperate with him in some way (propaganda, special favors, confession, etc.).”

The article does not identify who was involved in the process to turn a defensive operation to protect American personnel from “illegal exploitation” into an effort to brutalize US prisoners and detainees. Jessen set about to reverse engineer the very same abuses he had tried to neuter via “stress inoculation.” And I suspect “reverse engineer” is far too charitable a description of what Jessen did; it implies the US was not out to advance the state of the art in prisoner abuse, merely identify and copy existing best practices.

On another level, this revelation raises troubling questions about how programs like this relate to the coarsening of American society. Some readers will not doubt argue that trying to connect the dots between programs designed for use in combat settings and broad social trends is overreaching. Yet look at the themes Jessen stresses: control, dependency, compliance and cooperation. To use one pet example, why are people so apathetic in the wake of widespread abuses by banks, first the extortions that took place during the bailouts, and now the continued flouting of the law in mortgage servicing and foreclosures?

Although there was no single architect like Jessen for the various elements of our current economic paradigm, they do seem to work to weaken, and perhaps in some cases, to break the will of ordinary citizens to stand up to their tormentors large and small. A policy preference for higher levels of unemployment (to keep inflation down and workers in their place) have reduced many if not most individuals’ sense of control of their own destiny and increased their sense of dependence. When job tenures are short and replacement work at the same level of pay can be hard to get, that alone produces a good deal of the sough-after state, compliance.

Add to that an information apparatus which allows employers to see minor transgressions like late payment and misdemeanors such as getting arrested at protests, and you have effective mechanisms for social control. And there are those who look at the abuse of Bradley Manning, which would have seemed inconceivable fifteen years ago, and wonder who else might be deemed to be enough of a threat to merit similar mistreatment.

Monday, March 28, 2011

An Upside Down World

There have been a few things going on in the world around me that have me confused. One is the reason for the sudden spike in the value of the yen after the assorted disasters in Japan. Another was the sudden about face on the part of Europe and the US with the decision to take sides in the Libyan civil war. Meanwhile Europe's economy continues to struggle.

Japan is an interesting case in point. One of my wife's students asked if Japan's problems would cut oil consumption, a notion might wife thought fantastic. Yet I wondered about that too as production falls off a cliff and industry faces brutal power cuts. It seems that oil consumption will increase as Japan tries to being it's industrialized might back on line. Bummer, because oil prices are rising steadily, and a steady rise presages nothing good for the long run. Japan has no national electricity grid. Who knew? Half the country, predominantly in the west runs on 60Hz (American 110 volts) but Tepco and makes electricity for the capital at 50Hz, in the European style so people who live in the eastern 50 Hertz zone are on their own- the western half of the country can't help make up the shortfall. Astounding and old fashioned!
The good news for Japan is that the government has sold its massive debt to it's own people so rather than owing money to outsiders Japan can simply screw it's people out of their investments and keep on churning out Yen, which they seem to be doing happily with a projected 2.5 trillion yen cost to get things back to "where they were before." Which will be hard considering how much radiation has leaked and is continuing to leak. Returning to the pre-accident country seems impossible.
In Europe budget crisis follows budget crisis and now it's Portugal's turn. It seems to be a merry-go-round of austerity, getting the people used to making do with less each time around and gradually shutting down the welfare state created in the wake of the devastation of world war two. France, a controlled economy like few others, is raising prices for food and energy in huge leaps, twenty and thirty percent over the next few years, Britain is suffering austerity like post war rationing and Ireland is essentially bankrupt.
War is the way out and war for resources is the name of the game. We no longer hear bromides about essential mineral discoveries in Afghanistan but we know oil is the lure in Libya and Iraq and lives must be lost to secure our supplies.
It feels as though everything is on edge and ready to fail. Yet even as things don't fail we have to remind ourselves that a constant inexorable decline in our living standards is no good thing. And with no improvement in sight in our leadership what can we hope for?

Sunday, March 27, 2011

Hand Outs For The Rich

The Center for Economic Policy and Research published this discussion of how the rich get richer and the rest of us suck wind when our leaders hand out free money. It is disheartening to see this at a time when 45 million Americans are on food stamps and services are being cut everywhere- with the backing of the former middle class! I find it astounding how easily led the masses are in this country. The moral hazard implications of the last sentences in this story are ever present and staggering to my mind.

At a time when all the tough guys in Washington are making plans to cut Social Security and Medicare benefits for high-living seniors and to cut Head Start for low-income kids, it was generous of Warren Buffett to point out that we taxpayers gave over $1 billion to Goldman Sachs through TARP. Buffett probably didn't intend to point out this fact to the country, but it is an unavoidable implication of his $2 billion profit on his loans to Goldman.

Buffett made his $5 billion loan to Goldman about a week before the Treasury lent $10 billion to Goldman through the TARP program. Buffet got 10 percent interest on his loans, while the Treasury got 5 percent on its loans. In addition, Buffett got a much more generous commitment of stock warrants, which is the basis of the $2 billion in profits that he is now set to pocket.

The Treasury boasted of getting a $1.1 billion profit on its loans to Goldman, but as Mr. Buffet showed, this was far below the market rate of interest on loans to Goldman at the time. The difference between the return received by Buffett and the return received by the Treasury was in effect a gift from taxpayers to the top executives at Goldman and their shareholders. When Treasury Secretary Geithner and other officials claim that the government made money on the TARP loans it is either due to their ignorance of the workings of financial markets or a deliberate effort to deceive the public.

It is also worth noting that the TARP money was only a portion of the extraordinary assistance that the taxpayers have given Goldman's top executives and shareholders. The FDIC also guaranteed tens of billions of loans to Goldman. Goldman was allowed to borrow tens of billions of dollars from the Fed at below market interest rates. And it was allowed to become a bank holding company, and thereby gain the protection of the Fed and the FDIC, at the peak of the crisis, averting a run that which would almost certainly have been fatal.

In addition, Goldman benefits from the implicit subsidy of its "too big to fail" status, the belief that the government will bail it out if it gets into trouble. This allows it to borrow in credit markets at a lower cost than if it did not have implicit government protection.

Saturday, March 26, 2011

NPR Funding

By Joe Conason this essay from Truthdig discussing how one more political budget cut is being waved around by Republicans as another distraction. Of course they seem to be getting away with it as Democrats continue to fail to locate a backbone anywhere about their persons. It's an interesting question though: if NPR is so obviously biased why did the Republicans need a tape of a fake interview with one NPR executive to demonstrate that bias? Apparently their broadcasting doesn't give the game away... I used to freelance for NPR quite a few years ago and it was obvious to me in the mid 1980s that the network was looking for middle class legitimacy and in the Reagan years when the network was known as Nicaragua Public radio in the war on the Sandinistas, legitimacy came from moving away from the left to some amorphous spot in the "center." That's not far enough to the right in a world dominated by appeals to the basest values of human nature. So now NPR's minuscule public funding will have to be sacrificed. My wife I have no doubt will continue to send WLRN $10 a month, and who knows may increase it as long as we have jobs and public funding is scrapped...and she won't be alone.

While there is much stupid behavior to be found among politicians on both sides of the aisle during the embarrassing budget debate, few incidents have been more revealing than the latest Republican attempt to defund National Public Radio. The NPR budget line is minuscule and meaningless; the current “scandal” surrounding NPR is a fake and a diversion; and the repeated complaint that public radio is “liberally biased” is likewise false and fraudulent.

It has been decades since NPR—one of the least-slanted and best-reported news sources in the country—depended for a significant part of its revenue on federal funding. The amount that congressional Republicans suddenly decided to ax on an “emergency” basis, around $5 million, represents not only a tiny fragment of the network’s own financing but obviously an even more infinitesimal fraction of the federal deficit. So when Republican leaders claim that they are trying to be fiscally responsible by cutting NPR, while they insist on funding defense projects that the Pentagon doesn’t want, the lie detector jumps off the table.

Those cuts aren’t going to touch any of the “elitists” at NPR headquarters in Washington, who may or may not respect the deep wisdom of the tea party. Nor will they injure the big-city NPR journalists in New York, Chicago, Boston or St. Paul who are responsible for so much of the network’s superb content. No, those cuts are much more likely to harm the hundreds of rural stations—and their listeners—that rely on the federal subsidy for their network dues.

Still, the Republicans could not resist reviving Richard Nixon’s old grudge against public broadcasting as soon as an excuse presented itself—in this case, yet another heavily edited “sting” video from James O’Keefe, producer-provocateur of the infamously faked ACORN videos. Posing as Muslim philanthropists with $5 million in “secret” cash for NPR, O’Keefe’s minions elicited off-color comments about the tea party and NPR’s budget from a hired network fundraiser.

At this point in O’Keefe’s career it might occur to almost anyone, even a right-wing member of Congress, to hold off from rushing to judgment based on his latest emission. Indeed, a member of Congress might want to keep in mind that O’Keefe actually violated the law by invading Democratic Sen. Mary Landrieu’s office to try to tamper with her phone system—in other words, that he committed a crime against one of their colleagues.


But even that weirdly slimy history didn’t provoke much hesitation among the ranks of the right, many of whom jumped aboard O’Keefe’s latest defamation campaign against NPR executives. He collected a couple of scalps, as he often does, before the gaping flaws in his journalism and methodology were exposed—this time, by the conservative watchdogs on Glenn Beck’s website, The Dopey as the NPR official’s remarks were, the Blaze investigation showed how O’Keefe had distorted them with deceptive cutting and framing.

Somehow nobody asked the most obvious question: If NPR were truly slanted toward the liberal side, why would a phony tape of a private conversation be needed as proof? Wouldn’t the conservatives in Congress be able to prove bias in a day of hearings with tapes from NPR itself?

They’ve never even tried—and the reason is they can’t provide any proof, because NPR works so hard to keep its news straight and its ideologues balanced. The last time anybody looked hard, about five years ago, the network was using slightly more conservative than liberal sources.

What makes conservatives in Congress so eager to deprive their constituents of a straight news source that reports accurately on what they are doing in Washington? Why should they want to ensure that the radio coverage in their districts is dominated by the likes of Rush Limbaugh? Why are they afraid of NPR?

Friday, March 25, 2011

Stealing To Kill

Paul Craig Roberts lays out in stark terms how much money is being spent on foreign wars by our government while at the same time we are being told our social services, such as they are, must be cut. I find it astonishing the argument he makes here so cogently and fluidly manages to escape the attention of impoverished middle class Americans and their yet to be unemployed neighbors. Anyone who can't see the weirdness or "reconstructing" Iraq and Afghanistan even as we wreck our own country simply isn't paying attention. Here's the blindingly simple wake up call:

The American Empire is failing. A number of its puppet rulers are being overthrown by popular protests, and the almighty dollar will not even buy one Swiss franc, one Canadian dollar, or one Australian dollar. Despite the sovereign debt problem that threatens EU members Greece, Ireland, Spain, and Portugal, it requires $1.38 dollars to buy one euro, a new currency that was issued at parity with the US dollar.

The US dollar’s value is likely to fall further in terms of other currencies, because nothing is being done about the US budget and trade deficits. Obama’s budget, if passed, doesn’t reduce the deficit over the next ten years by enough to cover the projected deficit in the FY 2012 budget.

Indeed, the deficits are likely to be substantially larger than forecast. The military/security complex, about which President Eisenhower warned Americans a half century ago, is more powerful than ever and shows no inclination to halt the wars for US hegemony.

The cost of these wars is enormous. The US media, being good servants for the government, only reports the out-of-pocket or current cost of the wars, which is only about one-third of the real cost. The current cost leaves out the cost of life-long care for the wounded and maimed, the cost of life-long military pensions of those who fought in the wars, the replacement costs of the destroyed equipment, the opportunity cost of the resources wasted in war, and other costs. The true cost of America’s illegal Iraq invasion, which was based entirely on lies, fabrications and deceptions, is at least $3,000 billion according to economist Joseph Stiglitz and budget expert Linda Bilmes.

The same for the Afghan war, which is ongoing. If the Afghan war lasts as long as the Pentagon says it needs to, the cost will be a multiple of the cost of the Iraq war.

There is not enough non-military discretionary spending in the budget to cover the cost of the wars even if every dollar is cut. As long as the $1,200 billion ($1.2 trillion) annual budget for the military/security complex is off limits, nothing can be done about the U.S. budget deficit except to renege on obligations to the elderly, confiscate private assets, or print enough money to inflate away all debts.

The other great contribution to the US deficit is the offshoring of production for US markets. This practice has enriched corporate management, large shareholders, and Wall Street, but it has eroded the tax base, and thereby tax collections, of local, state, and federal government, halted the growth of real income for everyone but the rich, and disrupted the lives of those Americans whose jobs were sent abroad. When short-term and long-term discouraged workers are added to the U.3 measure of unemployment, the U.S. has an unemployment rate of 22%. A country with more than one-fourth of its work force unemployed has a shrunken tax base and feeble consumer purchasing power.

To put it bluntly, the $3 trillion cost of the Iraq war, as computed by Joseph Stiglitz and Linda Bilmes, is 20% of the size of the U.S. economy in 2010. In other words, the Iraq war alone cost Americans one-fifth of the year’s gross domestic product. Instead of investing the resources, which would have produced income and jobs growth and solvency for state and local governments, the US government wasted the equivalent of 20% of the production of the economy in 2010 in blowing up infrastructure and people in foreign lands. The US government spent a huge sum of money committing war crimes, while millions of Americans were thrown out of their jobs and foreclosed out of their homes.

The bought-and-paid-for Congress had no qualms about unlimited funding for war, but used the resulting "debt crisis" to refuse help to American citizens who were out of work and out of their homes.

The obvious conclusion is that "our" government does not represent us.

The US government remains a champion of offshoring, which it calls "globalism." According to the US government and its shills among "free market" economists, destroying American manufacturing and the tax bases of cities, states, and the federal government by moving US jobs and GDP offshore is "good for the economy." It is "free trade." It is the same sort of "good" that the US government brings to Iraq and Afghanistan by invading those countries and destroying lives, homes and infrastructures. Destruction is good. That’s the way our government and its shills see things. In America destruction is done with jobs offshoring, financial deregulation, and fraudulent financial instruments. In Iraq and Afghanistan (and now Pakistan) is it done with bombs and drones.

Where is all this leading?

It is leading to the destruction of Social Security and Medicare. Republicans have convinced a large percentage of voters that America is in trouble, not because it wastes 20% of the annual budget on wars of aggression and Homeland Security porn-scanners, but because of the poor and retirees.

Pundits scapegoat the middle class and blame the struggling middle along with the poor and retirees. Fareed Zakaria, for example, sees no extravagance in a trillion dollar military budget. The real money, he says, is in programs for the middle class, and the middle class "will immediately punish any [politician] who proposes spending cuts in any middle class program." [CNN Transcript] What does Zakaria think the military/security complex will do to any politician who cuts the military budget? As a well-paid shill he had rather not say.

Andrew Sullivan also has no concept of reductions in military/security subsidies: "they’re big babies. I mean, people keep saying they don’t want any tax increases, but they don’t want to have their Medicare cut, they don’t want to have their Medicaid [cut] or they don’t want to have their Social Security touched one inch. Well, it’s about time someone tells them, you can’t have it, baby."

Niall Ferguson thinks that Americans are so addicted to wars that the U.S. government will default on Social Security and Medicare. Republicans tell us that our grandchildren are being saddled with impossible debt burdens because of handouts to retirees and the poor. $3 trillion wars are necessary and have nothing to do with the growth of the public debt. The public debt is due to unnecessary "welfare" that workers paid for with a 15% payroll tax. When you hear a Republican sneer "entitlement," he or she is referring to Social Security and Medicare, for which people have paid 15% of their wages for their working lifetime. But when a Republican sneers, he or she is saying "welfare." To the distorted mind of a Republican, Social Security and Medicare are undeserved welfare payments to people who over-consumed for a lifetime and did not save for their old age needs. America can be strong again once we get rid of these welfare leeches. Once we are rid of these leeches, we can really fight wars. And show people who is boss.

Republicans regard Social Security as an "unfunded liability," that is, a giveaway that is interfering with our war-making ability. Alas, Social Security is an unfunded liability, because all the money working people put into it was stolen by Republicans and Democrats in order to pay for wars and bailouts for mega-rich bankers like Goldman Sachs.

What I am about to tell you might come as a shock, but it is the absolute truth, which you can verify for yourself by going online to the government’s annual OASDI and HI reports. According to the official 2010 Social Security reports, between 1984 and 2009 the American people contributed $2 trillion, that is $2,000 billion, more to Social Security and Medicare in payroll taxes than was paid out in benefits.

What happened to the surplus $2,000 billion, or $2,000,000,000,000? The government spent it. Over the past quarter century, $2 trillion in Social Security and Medicare revenues have been used to finance wars and pork-barrel projects of the US government.

Depending on assumptions about population growth, income growth and other factors, Social Security continues to be in the black until after 2025 or 2035 under the "high cost" and "intermediate" assumptions and the current payroll tax rate of 15.3% based on the revenues paid in and the interest on those surplus revenues. Under the low cost scenario, Social Security (OASDI) will have produced surplus revenues of $31.6 trillion by 2085.

When I was Assistant Secretary of the US Treasury, Deputy Assistant Secretary Steve Entin worked out a way to put Social Security on a sound basis with the current rate of payroll tax without requiring one cent of general revenues. You can read about it in chapter 9 of my book, The Supply-Side Revolution, which Harvard University Press has kept in print for more than a quarter century. Entin’s solution, or a variation of it, would still work, so Social Security can easily be saved within the current payroll tax rate. Instead of acknowledging this incontrovertible fact, the right-wing wants to terminate the program. Treasury was blocked from putting Entin’s plan into effect by the fact that other parts of the government and the Greenspan Social Security Commission had agendas different from ensuring a sound Social Security system.

Wall Street insisted that the Reagan tax rate reductions would explode consumer spending, cause inflation and destroy the values of stock and bond portfolios. When inflation collapsed instead of exploding, Wall Street said that the deficits, which resulted from inflation’s collapse, would cause inflation and destroy the values of stock and bond portfolios. This didn’t happen either.

Nevertheless, the Greenspan commission played to these mistaken fears. The "Reagan deficits" could not cause inflation, because they were the result of the unanticipated collapse of inflation (anticipated only by supply-side economists). As I demonstrated in a paper published in the 1980s in the US, UK, Japan, Germany, Italy, and other countries, tax revenues were below the forecast amounts because inflation, and thus nominal GNP, were below forecast. The collapse of inflation also made real government spending higher than intended as the spending figures in the five-year budget were based on higher inflation than was realized.

The subsidy to the US government from the payroll tax is larger than the $2 trillion in excess revenue collections over payouts. The subsidy of the Social Security payroll tax to the government also includes the fact that $2.8 trillion of US government debt obligations are not in the market. If the national debt held by the public were $2.8 trillion larger, so would be the debt service costs and most likely also the interest rate. The money left over for war would be even smaller. More would have to be borrowed or printed.

The difference between the $2 trillion in excess Social Security revenues and the $2.8 trillion figure is the $0.8 trillion that is the accumulated interest over the years on the mounting $2 trillion in debt, if the Treasury had had to issue bonds, instead of non-marketable IOUs, to the Social Security Trust Fund. When the budget is in deficit, the Treasury pays interest by issuing new bonds in the amount of the interest due. In other words, the interest on the debt adds to the debt outstanding.

The robbed Social Security Trust Fund can only be made good by the US Treasury issuing another $2.8 trillion in US government debt to pay off its IOUs to the fund. When a government is faced with a $14 trillion public debt growing by trillion dollar deficits as far as the eye can see, how does it add another $2.8 trillion to the mix? Only with great difficulty.

Therefore, to avoid repaying the $2.8 trillion that the government has stolen for its wars and bailouts for mega-rich bankers, the right-wing has selected entitlements as the sacrificial lamb.

A government that runs a deficit too large to finance by borrowing will print money as long as it can. When the printing press begins to push up inflation and push down the exchange value of the dollar, the government will be tempted to reduce its debt by reneging on entitlements or by confiscating private assets such as pension funds. When it has confiscated private assets and reneged on public obligations, nothing is left but the printing press.

We owe the end-time situation that we face to open-ended wars and to an unregulated financial system concentrated in a few hands that produces financial crises by leveraging debt to irresponsible levels.

The government of the United States does not represent the American people. It represents the oligarchs. The way campaign finance and elections are structured, the American people cannot take back their government by voting. A once proud and free people have been reduced to serfdom.

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand

Thursday, March 24, 2011

Imploding From The Right

From Business Insider we get this rather interesting take on the travails of controlling an increasingly restless Republican Party from within. Bruce Bartlett of the Fiscal Times explains in this article how he was ousted from the party for his beliefs, which he thinks are now coming home to roost. I tend to think that his conclusions may be viewed with scepticisim by Tea Party supporters simply for the fact that his recommendations require sacrificing their fundamental tenets to increase their effectiveness. That contradiction, typically framed as a sell out by the radicals in question, is what brings about the dissolution of the extremists. In my book anyone who thinks the President is a Muslim or a Socialist (or both at once!) is an extremist and not too bright to boot. Here's Bartlett's well argued thesis on the nuttiness creeping into the Republican Party- creeping like a tsunami apparently.

Republicans in Congress have reached a crossroads – they must decide if they are a governing party or one so beholden to its ideological fringe that it is incapable of doing the basic work of a legislative body. How the party answers that question will determine not only the direction of policy on key issues and Republican prospects for reelection next year, but who will be president in 2013.

It is obvious that the Tea Party phenomenon has rocked Republican politics; pushing an already conservative party much further to the right and bringing into it a vast number of new members who are highly energized and deeply ideological, but very inexperienced at politics and not very knowledgeable about how Congress operates on a day-to-day basis. This has proven deeply frustrating to many veteran Republican legislators.

I have long sought a good explanation for where the Tea Party came from and the source of its intensity. Toward this end, I have been reading newly-elected Sen. Rand Paul’s (R-KY) book, “The Tea Party Goes to Washington.” He is, of course, a Tea Party favorite; son of another Tea Party favorite, Rep. Ron Paul (R-TX); and someone who got elected by opposing the GOP establishment in Kentucky, including Senate Minority Leader Mitch McConnell.

According to Sen. Paul, much of what drives the Tea Party is sort of a delayed reaction to the disappointing presidency of George W. Bush. In a revealing passage from his book, Paul says:

“Imagine this – what if there had never been a President George W. Bush, and when Bill Clinton left office he was immediately replaced with Barack Obama. Now imagine Obama had governed from 2000 to 2008 exactly as Bush did – doubling the size of government, doubling the debt, expanding federal entitlements and education, starting the Iraq war – the whole works. To make matters worse, imagine that for a portion of that time, the Democrats actually controlled all three branches of government. Would Republicans have given Obama and his party a free pass in carrying out the exact same agenda as Bush? It’s hard to imagine this being the case, given the grief Bill Clinton got from Republicans.”

This argument hits close to home for me because after 30 years of working in Republican politics, including for Ronald Reagan and Rand’s father, I became deeply alienated from the party for the very reasons Rand explains. The final straw for me was the way Republicans rammed the Medicare Part D program into law in 2003. This took place at the very moment when the Medicare program was starting to seriously hemorrhage money. It was grossly irresponsible to add massively to its deficit largely for the purpose of buying re-election for Bush and his party in 2004.

This year, Medicare Part D will add about $55 billion to the deficit – far more than can be saved with all the budget cuts Republicans can possibly hope to achieve in fiscal 2011. Furthermore, it annoys me to see so many of those who voted for Medicare Part D, such as House Budget Committee chairman Paul Ryan (R-Wisc.), treated as if they are paragons of fiscal responsibility. In fact, their concern for excessive spending is highly selective, directed almost entirely at programs supported by Democrats primarily to undercut their political support, not because they care so much about deficits.

My disgust with the GOP became so intense after the Medicare Part D debacle, I wrote a book on the subject. I thought if conservatives broke with Bush at that time and adopted a more Tea Party-like approach to getting our fiscal house in order that it might stave off the political disasters I saw looming in 2006 and 2008.

Republicans preferred to kill the messenger, leading to my permanent estrangement from both the party and the conservative movement. But perhaps my effort wasn’t entirely for naught. Apparently, one of the few readers of my book was Rand Paul, who quotes me saying this:

“The point is that George W. Bush has never demonstrated any interest in shrinking the size of government. And on many occasions, he has increased government significantly. Yet if there is anything that defines conservatism in America, it is hostility to government expansion. The idea of big government conservatism, a term often used to describe Bush’s philosophy, is a contradiction in terms.”

So why is it that I have been disdainful of the Tea Party from its first manifestation in early 2009? The main reason is that so many of its members simply don’t know what they are talking about; they seem to think that strong opinions are a substitute for facts, research and analysis. Consequently, many Tea Party members hold views on various topics that are, frankly, nuts, and these views have been embraced by some Republican voters as well.

For example, a March 15, 201, poll by Public Policy Polling found that 25 percent of Republicans expect that a group called ACORN is going to steal the election for Obama next year and 31 percent aren’t sure; only 43 percent of Republicans believe this is false. In point of fact, ACORN no longer even exists, and it’s doubtful that it could have stolen a local election for dog catcher even if it wanted to.

An August 27, 2010, poll by Princeton Survey Research Associates International found that 52 percent of Republicans believe that Obama sympathizes with Islamic fundamentalists and favors imposing Islamic law around the world; only 7 percent thought this was definitely untrue.

A March 24, 2010, Harris poll found that 67 percent of Republicans believe that Obama is a socialist, 61 percent think he wants to take away the right to own guns, 57 percent believe he is a Muslim, 45 percent say he was not born in the U.S. and has no right to be president, and 41 percent think he is just looking for an excuse to seize dictatorial power.

As a consequence, even solid conservatives like Sen. Orrin Hatch (R-Utah) are considered dangerous liberals. And slightly less conservative Republicans such as former Utah Gov. Jon Huntsman are treated as dangerous radicals. In a March 14 New York Times report, Utah Tea Party leader Jacqueline Smith said of Huntsman, “On a good day, he’s a socialist. On a bad day, he’s a communist.”

This sort of rhetoric serves no useful purpose and is at best distracting. It also elevates minor differences on policy or strategy among Republicans into deep disagreements over principle. This has made it impossible for Congress to finish work on the 2011 budget, which should have been done last summer. Hard line Tea Party members keep insisting on impossibly large budget cuts despite the fact that the vast bulk of the budget is effectively off limits.

Not surprisingly, a March 16 Pew poll found that Republicans are losing ground rapidly. Backing for their approach to the budget has fallen even with Republicans and Tea Party members. Support among the former has fallen from 69 percent last November to 52 percent now; among the latter it has fallen from 76 percent to 52 percent. Support among independents is down from 37 percent to 17 percent.

For these reasons, I think Republicans are blowing it. They are rapidly using up their limited political capital for getting control of the budget on trivial spending cuts, such as defunding National Public Radio, that will have no long-term impact. Furthermore, we know from experience that the public’s support for budget cuts quickly ran out in 1981, leading inevitably to tax increases. And according to a February16 Harris poll, there is less support for spending cuts today than there was back then.

Although Republicans today are confident that they will retake the Senate and the White House next year, I think their current strategy of pandering to Tea Party extremists is undermining these hopes. Polls show Democrats up for reelection next year, such as Sen. Sherrod Brown of Ohio, to be rapidly improving their chances. And Republicans should remember that one reason they controlled the White House during most of the postwar era is that the American people don’t really trust either party to control the entire government. Moreover, the lousy job Republicans did when they controlled Congress and the White House from 2001 to 2006 is still a recent memory.

It’s possible that the Tea Party will turn out to be a force for good, but increasingly it looks like populist movements of the past that quickly burned out without having a lasting impact on policy. The more quickly the movement matures, learns patience, and becomes sophisticated about the nature of politics, the better its chances of having achieving its goals.

Wednesday, March 23, 2011

Health Care Now

If you think providing proper health care coverage to all Americans, through expansion of Medicare, is too expensive, ask yourself how we can afford to spend one fifth of our national budget on wars in Iraq and Afghanistan. The prospects for improved coverage through private health insurers is a mirage and more and more of your neighbors will be left without coverage. The situation is only alarming if you have ever been sick or injured. One police officer I work with, and we have excellent coverage at Key West PD, has a $54,000 bill for her portion of surgeon's costs for her brain surgery. She is 28 years old married with two kids and an employed husband with hospital bills yet to arrive. She is expecting to end up declaring bankruptcy. Another police officer was rushed to the hospital with a sudden onset of illness and was not admitted to Lower Keys Medical Center (annual profits most recently reported of $52 million dollars) until he was able to satisfy the hospital he could pay his co-pay. Are you sure we don't need comprehensive reform? From the Global Research website:

At its one year anniversary, today March 23rd, the Obama health care law is shrinking while the health care crisis grows. Americans who lack any health coverage still exceeds 50 million, over 45,000 deaths occur annually due to lack of health insurance, and 40 million Americans, including over 10 million children, are underinsured.

Premiums are rising and coverage is shrinking a new norm is taking hold in America: ‘Unaffordable underinsurance.’ This month, the number of waivers granted to the Obama health law broke 1,000 protecting inadequate insurance plans. The expansion of health insurance to the uninsured is becoming a mirage. The Obama administration has told states they could reduce the number of people covered by Medicaid as well as reduce the services provided. And, the centerpiece of the law is under court challenge – the mandate is the first time ever the federal government has forced Americans to buy a corporate product, private health insurance – is heading to a close Supreme Court decision.

The New Norm: ‘Unaffordable underinsurance’

To make insurance premiums affordable, the quality of insurance will need to be reduced so there is less coverage and more out-of-pocket costs, as Don McCanne, MD, Senior Health Policy Fellow for Physicians for a National Health Program writes: “’Unaffordable underinsurance’ is rapidly becoming the new standard in the United States.” The trend in health insurance is rising premiums and shrinking coverage for many Americans who get their coverage at work as well as on the individual insurance market.

Premiums have been increasing with reports ranging from 20% to 60% increases for many Americans and businesses. Further, the law may decrease employment-based insurance by 3 million people by 2019, according to the Congressional Budget Office (CBO) and the Joint Committee on Taxation. This combined with high unemployment and underemployment will push people into the individual insurance market. The individual market is particularly at risk for increased premiums which is of growing importance because of high unemployment. Blue Shield of California decided this month to withdraw a major hike in the face of public outcry. This proposed 30%-35% increase would have been the third rate hike since October, the three increases would have raised rates by 59% to 87% for 200,000 policy holders. While some hope the Obama health law will slow premium hikes, Claudia Fegan, MD of Physicians for a National Health Program writes under the Obama heath law “sudden premium hikes are still possible and, in my opinion, quite likely under the new law.”

Underinsurance, requiring Americans to pay more of the cost of health care, may become the norm because of the 2010 law. The new law will hasten the current trend toward underinsurance as plans where patients pay an average of 40% of their health care bills qualify to fulfill the employers' obligations to provide coverage rather than pay an assessment. Massachusetts, the model on which the Obama reforms are based, recently found that medical bankruptcies have not decreased with the new law. The lesson – it is not just health insurance, but the quality of the insurance that matters. After deriding merely adequate insurance as Cadillac Plans,” the Obama administration is showing support for high deductibility plans with large out of pocket costs that do not provide financial or health security.

One promise of the Obama health plan was that millions of underinsured would get decent insurance coverage because the “reform” required minimum levels of insurance. But, waivers to the requirements of the 2010 law are being widely granted resulting in millions of Americans continuing to have inadequate health coverage. Waivers allowing poor quality insurance affect 2.6 million people and are being granted rapidly to businesses, unions, insurance companies as well as states who cannot meet the Obama law requirements. The administration says the purpose of the waivers is to avoid disruption in the insurance market, in clearer language it is to prevent employers from dropping coverage and insurance companies from leaving markets. The requirement for a waiver is relatively simple; the applicant must show HHS “a significant increase in premiums or a decrease in access to benefits.” Ninety-four percent of requests for waivers have been granted, the largest area where waivers have been denied has been for unions. Republicans have asked HHS for in-depth details about every waiver decision and request.

The major area of waivers are so-called mini-med plans, these are limited medical plans which provide workers with as little as $2,000 in health care coverage. The Obama health care law requires $750,000 minimum coverage in 2011. The mini-med plans do not provide security in the event of serious illness or accident. The vast majority of these waivers are for employment-based health coverage. Some of the initial waivers went to fast food chains like McDonalds and Jack-in-the-Box. Unions, insurance companies and state governments have also received waivers. Four states have received waivers, Florida, New Jersey, Ohio and Tennessee. Waivers are set to disappear in 2014, when people will be required to purchase insurance with tax payer subsidies – assuming that Obama health law survives and that low-paid workers can afford insurance even with a subsidy.

Expanded Numbers of Americans with Insurance Becoming a Mirage

The two largest areas of expansion, Medicaid and the insurance mandate are in jeopardy. States are cutting the number of people covered by Medicaid and reducing health coverage. The insurance mandate is under constitutional attack. And, there is little evidence that people are taking advantage of programs that provide coverage for those with pre-existing illness.

The area with the biggest immediate impact on reduced coverage is the roll backs of Medicaid. Medicaid was projected to be the largest area of expansion of medical care under the Obama health care plan, covering 16 million more people, making up half the projected increase in additional Americans covered with some type of insurance under the Obama law. That is now becoming a mirage.

HHS Secretary Sebelius wrote the 50 states letting them know benefits could be cut, poor people could be required to pay a higher share of costs and that federal law allows states to reduce people covered by Medicaid. Medicaid is health care for the poor and is jointly funded by federal and state governments. Medicaid currently covers 53 million poor children, poor pregnant women and disabled and extremely poor adults. Individuals must make less than $14,500 to be included in Medicaid.

More than half the states want permission to remove hundreds of thousands of people from Medicaid. Arizona alone is planning to reduce Medicaid coverage by 250,000 people and the Obama administration has indicated it will not oppose this reduction in coverage. In Wisconsin, where Governor Walker has proposed deep cuts to Badgercare (which includes Medicaid and other programs) up to 350,000 could lose health care coverage. Rather than an increase in the number of people covered, the nation is on a path to reduce total people covered.

Other states, like New York, Hawaii and California which are led by Democratic governors, are cutting benefits of Medicaid programs that already provide insufficient coverage. Medicaid is often one of the largest expenses of a state but because the cost is shared with the federal government it is also a large source of revenue. As a result it takes more than $2 of Medicaid cuts to save a state $1. When Medicaid is cut the economy is weakened and revenues reduced as for every dollar cut, health care jobs are lost. Cutting health care for the poor and disabled continues the downward economic spiral – the race to the bottom.

When it comes to people taking advantage of expected benefits of the health care law, thus far only 12,000 people have enrolled in the Pre-existing Condition Insurance Plan despite an aggressive marketing effort. The Medicare actuary, Rick Foster, told The Hill the low enrollment is a “surprise,” given that “millions” are eligible for the coverage. The Medicare actuary had conservatively predicted the new pools would enroll 375,000 people by the end of 2010, but that projection has not been met because the insurance is too expensive for most people who need it.

Better results might be being seen for young adults. Approximately 13.2 million 18-29 year olds are without insurance, 30% of that population. Under the health care law these youth can stay covered under the parents’ health insurance. There are no hard numbers for how many have taken advantage of this but the Obama administration estimates it could be as many as 1.2 million. As we see with the pre-existing illness option, predictions are one thing and reality is very likely another. Covering each dependent will cost about $3,380 in 2011, so it is difficult to predict how many families can afford that cost in these difficult economic times when unemployment and underemployment are up and incomes are down.

The Obama health care law may decrease employment-based insurance by 3 million people by 2019, according to the Congressional Budget Office (CBO) and the Joint Committee on Taxation. One estimate made by the CBO is that 8–9 million people currently covered under an employer plan would lose employer coverage because firms would choose to no longer offer coverage. They assume this would be balanced in part by those getting coverage on the exchange.

The other area where increased coverage was promised is the mandate forcing Americans to buy insurance. The mandate is hotly contested in the courts with 27 states challenging the law and over 20 lawsuits filed it. The courts have split 3-2 in favor of the mandate thus far. In the two decisions finding the mandate unconstitutional, a Virginia judge threw out only the mandate, while a Florida judge found the mandate so intertwined with the rest of the law that he would stop the whole law. The decisions have been issued along partisan lines, with three district judges appointed by Bill Clinton upholding the law; and two district judges — one appointed by Ronald Reagan and the other by George W. Bush — finding it unconstitutional. The U.S. Supreme court has five Republican appointed justices and four appointed by Democrats. It is generally viewed as four on the center-left, four on the right and Justice Kennedy as the swing vote. The vote on the Supreme Court will be a close one.

The health care law faces a congressional challenge, especially from the Republican controlled House of Representatives which has already voted to repeal the law, but more importantly, promises to use the power of the purse to not fund its implementation.

Single Payer Rising: Why Not Just Improve and Expand Medicare to All?

The imploding health care law is creating an opening which may require a re-consideration of health care reform within the next five years. Americans consistently favor simply expanding and improving Medicare to cover all Americans. Terry Dougherty, director of MassHealth, from a state which the model for the Obama law is in place is reaching the obvious conclusion: “I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better.” He notes that unlike the insurance industry government costs less, with much lower administrative costs and “We don’t build big buildings. We don’t have high salaries. We don’t have a lot of marketing.”

The low cost of publicly funded health care is consistent with the experience of America’s single payer system – Medicare. The administrative cost of running the Medicare program has remained under 2%. But, the bureaucracy of trying to control the insurance industry is already growing rapidly. The growth of the federal insurance bureaucracy, the federal office that regulates private insurance along with other important duties under the Obama health law, already has 252 employees and a budget of $93 million for 2012 budget requested by the White House.

While the single payer movement is growing stronger through groups like Health Care Now and Physicians for a National Health Program, the insurance industry is also getting stronger. Not only will they receive hundreds of millions in new annual tax payer subsidies but they are taking over other parts of health care. Kaiser Health News reports “Insurers have moved into technology, health-care delivery, physician management, workplace wellness, financial services and overseas ventures.” The Obama law is spurring the cancer of health insurance to spread throughout health care.

At the state level Vermont is striving toward single payer. Governor Shumlin, his technical advisers and Vermonters support a single payer program, and are considering a bill that reduces the number of funding sources and if federal waivers are granted, which Obama reportedly supports, it will evolve into a single payer program. The current version of the bill falls short of the goals of advocates who want health care treated as a human right as well as of physicians who seek a single payer program.

The "Expanded and Improved Medicare for All Act," H.R. 676, a bill that sets up a single payer system has been introduced. It would provide health care to all and give consumers the most choice, provide strong health coverage as well as save money for government, business and individuals. Unlike the Obama law, improved Medicare for all would also be easier to implement. Medicare transitioned Americans over 65 from private insurance to Medicare within a year and did so without computers.

The failing Obama reforms shows that the obvious must be faced: confront the health insurance industry which makes coverage of all Americans unaffordable. President Obama knew before running for president that single payer was the solution, but after receiving $20 million in donations from the insurance industry refused to let the only real solution, improved Medicare for all, be considered. It is time to put in place a single payer health care program that ensures that all U.S. residents have quality health care at less cost than they currently pay.

Kevin Zeese is director of Prosperity Agenda.

Tuesday, March 22, 2011

National Poverty

From mybudget360 this discussion of the food stamp epidemic in the US, not reported, unseen and swept under the carpet. It is however real and a growing phenomenon. The notion that our economy is in recovery is belied by sky high statistics for food stamp use, and even higher numbers, 47 million for those lacking health insurance. Add to that millions losing their homes and unemployment statistics, that massaged as much as possible still show dismal prospects for job seekers. And unemployment statistics are barely better than lies. All this means we are sinking into a nation of poverty and economic inequality. If I had kids I'd be looking to emigrate. As it is I stand on the sidelines with a job and roof (for now) over my head and hope for the best.

From November to December of 2010 487,000 Americans were added to the food stamp program. Keep in mind this all occurred while the stock market continued to soar and has rallied nearly 100 percent from the lows reached in March of 2009. Working and middle class Americans barely have enough to pay for the monthly bills so speculating in Wall Street is likely the least of their concerns. The data on food stamp usage usually trails the current calendar date by one quarter. The latest data we have is from December of 2010. However, we are adding roughly 300,000 people per month to the food stamp program called SNAP. If that is the case, as of today we now have 45,000,000 Americans participating in the food stamp program. We’ve noted trends in the economy where people line up at mid-night during certain key dates in the month at Wal-Mart locations waiting for their debit cards to refill so they can purchase food for their families.

One of the troubling aspects of this recession is the hidden aspect of the financial pain that it is causing. Many people have no idea their neighbor is in foreclosure until the home is taken back by the bank. It is hard to see this in action and people don’t speak up because of embarrassment. Also with the media thumping its chest about recovery many blame their own failings for their misery. And with the movement of food stamps from embarrassing paper coupons to debit cards, many have no idea how many of their fellow Americans are receiving food assistance. The debit cards blend in with most any other piece of plastic Americans carry in their wallets. The reality however is that 14 percent of our entire population (man, woman, or child) is on SNAP. There has been little stopping this trend. And this is something that has been going on for well over a decade but not many were paying attention because of the massive credit induced housing bubble and the lack of a voice for this group. This is the highest percent of Americans on food assistance since the Great Depression when there was no food assistance early on aside from local charities. Yet this is somehow an economic recovery. A Wal-Mart executive was quoted as saying:

“(NY Times) There are families not eating at the end of the month,” said Stephen Quinn, executive vice president and chief marketing officer at Wal-Mart Stores, and “literally lining up at midnight” at Wal-Mart stores waiting to buy food when paychecks or government checks land in their accounts.”

Even in more affluent neighborhoods and in states like California where the impression is that everyone is flush with money food stamp usage is on the rise.

More than 218,000 San Diego County residents were receiving food stamps as of mid-February, a whopping 70 percent increase from just two years ago.

Since January 2010, the number has gone up by about 49,040, county supervisors were told Tuesday as they adopted a 58-point blueprint to speed up delivery of food assistance.

The increase in recipients stems from a continuing sluggish economy and what managers of the county’s food stamp program and advocacy groups said are improvements in the application system that resulted from talks between the two.

“We’ve seen dramatic increases in demand,” said Dale Fleming, who oversees the food stamp program for the county. “We’ve also changed the way we do business.”

But despite the higher numbers, advocacy group representatives say the county still has a long way to go to make sure people aren’t going hungry.”

This trend hasn’t shown any signs of slowing down. And this is also a reason dollar stores have done so well during this recession as people shift from wants to absolute necessities:

Family Dollar and The 99 Cent store are up 89 and 54 percent respectively in the last five years. These dollar stores have also shifted the inventory they carry from random plastic goods to having much more food to reflect the needs of the community. And many people who never thought about shopping frugally are now being forced to.

John Sanchez had never stepped foot inside a dollar store until last April. That’s when he was laid off from his job and was forced to make some drastic budget cuts, including getting back to basics for a buck. Now, even though he’s returned to work, it’s hard to get him to shop anywhere else.

“I always thought dollar stores just sold junk and were for the really low-income (consumer). I was shocked when I saw that they sell a lot of the same stuff as the grocery store or drugstores. And it’s all just a dollar,” said the 61-year-old San Diego resident, as he exited the 99 Cents Only store in Clairemont pushing a cart filled with produce, bakery items, toiletries and a variety of cleaning products. “Why would anyone want to pay more for the same thing?”

Many working and middle class Americans are now confronting the realities of a shrinking middle class. Decades of complacency and Wall Street corruption and government assistance has allowed the core of our economy to be gutted out. When does the media ever bring up the fact that 45 million Americans are on food assistance? This is never brought up even though it truly reflects the health of our working class economy. In other words, the media does not care about working and middle class Americans. Many are owned by large corporations that want to continue selling the message that everything is fine and dandy. If you really look at the data this recession is still going on even though it ended officially a long time ago. Austerity is on the rise and it won’t be televised.

Monday, March 21, 2011

Never Here

If you think you don't need emergency supplies in your home this story from Britain's Daily Telegraph might cause you to think again. We hear that Japanese society is too resilient to give in to common looting in times of crises. Not exactly is the true story according to reports on the ground in the wrecked parts of that unhappy country. American exceptionalism tells us we won't see this level of desperation here, in what we used to call middle class suburbia. I hope not, but I wonder. With my hurricane supplies on the shelf at home I wonder what I would end up doing if, as happened to so many in this story, my house were washed away, all this at a time of increasing national debt in developed countries as well as poor nations. We had money during recent previous disasters. What will we have to recover from the next one?

The unshaven man in a tracksuit stops his bicycle on the roadside and glances over his shoulder to check that he is unobserved. Satisfied, he reaches quickly into the sludge-filled gutter, picks up a discarded ready-meal and stuffs it into a plastic carrier bag.

In another time, another place, Kazuhiro Takahashi could be taken for a tramp, out scavenging for food after a long night on the bottle. In fact, he is just another hungry victim of Japan’s tsunami trying to find food for his family.

“I am so ashamed,” says the 43-year-old construction worker after he realises he has been spotted. “But for three days we haven’t had enough food. I have no money because my house was washed away by the tsunami and the cash machine is not working.”

If his haul wasn’t so pitiful — his bag had two packets of defrosted prawn dumplings and a handful of vacuum-packed seafood sticks inside — Mr Takahashi might be taken for a looter. But in the port town of Ichinomaki, 200 miles north of Tokyo, his story is disturbingly common.

Japan might be a rich country, but a week after the tsunami struck it is struggling to feed and house the victims adequately.

“I have a place in a rescue centre in the Aka’i Elementary School, but the food they are giving us is not enough,” Mr Takahashi says. “My parents are in their 70s and we receive a tiny bowl of plain rice twice a day, with nothing else, just a pinch of salt. We are hungry, so have come to look for food.”

Mr Takahashi is not alone. Over his shoulder, a small legion of “tramps”, their feet wrapped in plastic bags, can be seen trawling the muddy aisles of a smashed-up supermarket, hoping to find other edible treasures that might supplement rescue centre rations.

“Don’t take my photograph!” barks a man in blue overalls with at least three days’ stubble on his chin. “This is so shaming, but I have given up on the government. We cannot rely on them so we have to help ourselves.”

Shame plays an important role in Japanese society, forcing people to maintaining the outward norms of life even when faced with the most extreme of circumstances, as the world has witnessed to its amazement this past week.

But in Ichinomaki, and countless other stricken towns along the country’s northeast coast, raw necessity is starting to fray even Japan’s super-taut social fabric. “They are no longer Japanese,” says one woman bystander with a shiver of pity and disdain. “I don’t feel like this is Japan.”

Natural disasters have a cruel power to strip the dignity from both the living and dead, but in a country as polite and fastidious as Japan the process seems all the more brutal. “They are desperate, they have no other food to eat,” says a policeman guiding some emergency traffic at a nearby intersection. “You could call it stealing, but we understand that at these times there is perhaps no other choice.”

There are some signs of stealing in Ichinomaki — the supermarket cash-machine has been smashed open and on one ruined street a locked safe, the size of kitchen fridge, had been dragged out and fruitlessly vandalised — but broadly it feels as if law and order still hold sway.

The frustration is that Ichinomaki does have at least one working supermarket, opposite the town’s police station, but shoppers must queue for two or three hours, can buy only 10 items or fewer and must pay cash — not possible if your house has been washed away.

Amazingly, many residents in Ichinomaki refuse to criticise the local or national authorities, excusing any shortcomings by blaming them on the sheer scale and breadth of the destruction that has made delivering aid such a mammoth task.

Perhaps that too is hiding Japan’s shame, but they might be less sanguine if they could see the empty highways that remain closed to all to but emergency vehicles, yet still connect Tokyo to Ichinomaki in just four-and-a-half hours’ drive and could, surely, be used to carry some emergency food and fuel.

Finding petrol remains impossible, leading many to take to their bicycles, slithering through the mud-caked streets until they have to stop, clear their mudguards, and then slither on.

Down in the docks, which were almost obliterated by the tsunami, people could be found climbing through the wreckage, trying pull out usable bicycles and siphoning petrol from cars that had been picked up and dashed against houses and harbour walls.

“There’s no food, tell people there is no food,” says a man filching petrol, who declined to be named. “They say on the television that aid is being delivered, that food is coming, but you can see for yourself it is not.

“I thought we were a wealthy country, but now I don’t know what to think,” he adds, explaining that he is surviving on slowly defrosting food from his home freezer. “You must tell people what is happening here because the Japanese media is too frightened to tell the truth.”

It is true that coverage of the quake in Japan tends to show the brighter side of the relief efforts, while in reality for many the experience is humiliatingly grim.

In one of Ichinomaki’s rescue shelters, The Daily Telegraph meets Kinniko Ishikawa, a deaf but indomitable 70-year-old who is bursting to tell how she watched from her second-floor bedroom window as her neighbour’s house was washed away.

“They went right past my window – my neighbour, her husband and their daughter still in their house, floating away on the wave — I waved at them as they went, I said 'bye-bye, bye-bye’ and then they were gone, just like that.”

She laughs out loud at the memory, at the apparently surreal comedy of the moment and then just as suddenly becomes a tired and sad old woman again. “They are still missing,” she says, using a word that increasingly has come to mean only one thing.

Mrs Ishikawa and about 30 other pensioners sleep on the floor of a single room in an old government building opposite Ichinomaki’s city hall. The place is warm but has no water for the lavatories and is a far cry from the brightly-lit sports halls that feature on Japan’s television news.

“Yes, it’s true, there is no food from the government,” she says. “But we are lucky ... we receive at least one bowl of rice each day from a local charity, and yesterday they bought us some snacks.

“Of course we feel hungry, but we must try to ignore it.”

Sunday, March 20, 2011

Wisconsin Blocked

From the LA Times this report that the anti-union bill in Wisconsin has been blocked by a judge's order. A procedural move but one that stops the state from dismantling collective bargaining for the time being. That's some good news for those of us that belong to unions.

Dane County Judge Maryann Sumi granted the temporary order that prevents publication of the measure signed into law by Republican Gov. Scott Walker after weeks of protests and a boycott by Senate Democrats that turned the capital of Madison in a national political battleground on the issue of limiting public employee union power.

The judge was acting on a request by Dist. Atty. Ismael Ozanne, a Democrat, who had filed a lawsuit contending a legislative committee had violated Wisconsin's open meetings law by pushing the measure onto the floor. That maneuver was key in unblocking the legislative stalemate and allowing the bill to be signed by Walker on March 11.

"This legislation is still working through the legal process. We are confident the provisions of the budget repair bill will become law in the near future," Cullen Werwie, the governor's press secretary, said in a statement.

"Judge Sumi confirmed today what we knew all along – that the bill stripping hundreds of thousands of hardworking Wisconsinites of their voice on the job was rammed through illegally in the dark of the night," said Phil Neuenfeldt, president of the Wisconsin State AFL-CIO. "I'll definitely take it," said

Eddie Vale, political communications director for the AFL-CIO, the national labor federation that had fought Walker and the bill. "But the big caveat, of course, is that this is temporary. They can appeal the case. And they can also re-notice the meeting and hold another vote.

"So this doesn't end this fight at all," he said in an e-mail. "But every day this goes on, public turning against Walker, recalls getting more and more energy against the Republicans. They thought at least they had the vote behind them, but now have to do it all over again and get another whole round of bad coverage."

Facing budget deficits, recently elected Gov. Walker proposed increasing the employees' share of payments for healthcare and pension benefits. He also proposed a series of restrictions on collective bargaining rights for most public employees except police and firefighters. The unions said they would accept the increased payments, but they balked at the limitations on collective bargaining.

The proposals prompted weeks of demonstrations, some attracting as many as 80,000 unionists and their allies. All 14 Democratic state senators fled to Illinois, blocking consideration of the proposal because the GOP-controlled Senate lacked a quorum.

But Republican lawmakers eventually modified the bill and moved it quickly through committee and to votes in both chambers, where it easily passed.

After Walker signed the bill, Democrats and labor-union officials said they would sue to block implementation and launched petitions to recall some of the lawmakers who had voted for the bill. Conservatives also began circulating petitions to recall some of the Democrats who had fled.

Friday, March 18, 2011

Leadership Void

This essay from Jim Hightower, a towering voice of progressive dissent sums up the frustration facing anyone wondering how far off track this country can get before someone decides to take the reins in hand. Just as President Obama has found no leadership skills in relation to the Middle East crisis nor yet to Japan's melt down, we don't hear any coherent voice addressing the needs of ordinary working Americans:

The greatest problem our nation faces can be summed up in one word: leadership. OK, make that three words: lack of leadership.

America's corporate, political, media, academic and other leaders aren't. They're not leaders -- because they refuse to stand tall, be bold, offer vision, inspire and ... well, lead. We've got too many 5-watt bulbs sitting in 100-watt sockets. They're squishing the historic can-do spirit of the American people, reducing it to a dispiriting ethic of surrender that says we-shouldn't-even-try.

Start with our leaders' willful abdication of the American dream. They've given up on the notion of producing a shared prosperity that creates a broad middle class. For more than a decade now, Wall Street and Washington have let millions of jobs disappear and pushed wages down. They now yawn at the entrenched jobs crisis that is eating the middle class, and rather than responding to the plight of millions of hard-hit families, they're trying to bust unions and kill minimum-wage laws.

They call it "the new normal," in which the workaday majority of folks should simply ratchet down their hopes and expectations. A national commitment to quality education, health care for all and a decent retirement has been reduced to a "YO-YO" program: You're on Your Own.

What about creating a vibrant new green economy based on renewable energy? Let China build it, they shrug. How about constructing a bold, nationwide, job-creating network of high-speed trains? Spain built a great one and even France has one, but we're told it's too much for America. Our deteriorating and dangerous infrastructure? Better that we cut taxes for the super-rich and pray for God to take care of infrastructure.

These people are pathetic. And shameful. You can't call yourself a leader if you're too weak and too afraid to lead.

One of the worst examples of their inability to lead is the new Securities and Exchange Commission's crackdown on the egregious pay packages that the elites of Wall Street keep grabbing.

By a three-to-two vote, SEC commissioners socked the money-grubbing bankers with a new "say on pay" rule. Rather than let top executives lavish money on themselves unchecked, the new rule lets shareholders of those financial giants vote on extravagant salaries, bonuses and perks. That'll rein in the excess, right?

Probably not. You see, the SEC has long been a gentle regulator, never wanting to hear a Wall Streeter say "ouch." Thus, the say-on-pay rule has no bite. Shareholders can indeed have their say, but it's a non-binding vote! Bank big-shots can simply ignore it. Yet even this velvet harness was too rough for the two soft-on-greed Republican commissioners, Kathleen Casey and Troy Paredes. Both voted no, with Casey explaining that the new rules "are unduly restrictive and impose unnecessary burdens" on bankers.

Don't despair, though, for justice still might be served. The SEC has since approved another compensation crackdown, this time specifically targeting outrageous multimillion-dollar bonuses. For the first time, big banks will henceforth be compelled to restrain themselves. How? By filing detailed annual reports about the bonuses they pay. Ouch, that'll sting, won't it?

Again, though, even this tiny pinch was too harsh for the compassionate Republican members. Both sided with the poor bankers, wailing that requiring reports is a big-government intrusion into the private sector, overreaching the SEC's authority.

Real leaders aren't in Washington -- they're fighting for us on Main Street. Luckily, a public interest group named Bankster USA is rallying grass-roots support to curb banker greed.

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

Thursday, March 17, 2011

Complexity Squared

It is a temptation when a nuclear reactor catches fire and threatens to blow up for people watching form a safe distance to think the end of the world is nigh. Yet it seems a little premature to view the ghastly events in japan as anything more than an awful warning for the rest of us. Complexity will kill us, not radioactive dust, nor yet tsunamis or earthquakes.

Whatever is going on in Japan will be revealed in all its horror in the fullness of time and no doubt there will a dead zone around the area where the reactor is currently melting down. As in Chernobyl's failure in 1986 radiation levels will spike around the world and those closest will likely suffer pain and illness but for the rest of us life will continue un-radiated to all intents and purposes. Yet we should be profoundly changed by this disaster.

Consider the enormous impact the closure of one power station has had on the delivery of energy to the entire country. Factories have closed, rolling black outs have been instituted and no one seems to know when reliable power can be restored. This is a stark explanation of just-in-time delivery. In this case it is the delivery of power, in barely sufficient quantities to meet demand. Store shelves have emptied and people are without supplies we consider to be normal and critical, especially in a cold climate in winter. There are no back ups, no allowances for failure, even and especially in a nation as advanced and sophisticated as Japan.

Japan has an enormous ratio of public debt totalling twice the national Gross Domestic Product, by far the largest in proportion of any advanced nation. Like families which are advised to have some in reserve, one might recommend Japan keep something in reserve to help cope with a crisis. No such luck! The best guess now is that Japan will sell off US bonds, depressing their already meagre value, and thus sparking a spiral of inflationary loss of value in the currency at home. Already the Bank of Japan has thrown 185 billions of dollars of Yen into the flames of the reactor conflagration.

Consider too how dependent we are on Japan for electronics cars and motorcycles. All supplies from Japan are now imperilled as factories there lack the electricity to stay open. Components will be in short supply, delivery of vehicles will stop and blithe consumers in the US and Europe will wonder why their supplies of trinkets has dried up. We live in a globalized interconnected world and now we see not only the loss of income from exported jobs, but the lack of independence we suffer from as a result of our business leaders' determination to export sources of production overseas.

All this from the destruction of a nuclear reactor in Japan. I wonder what would be felt around the world if something really serious were to happen, like, say conflict in oil exporting countries...

Saturday, March 12, 2011

Gulf Coast Lab Rats

One has to wonder how it is that Aljazeera is now a trusted source for information not only from around the world but also for here at home. Gulf oil spill? What gulf oil spill? Luckily there is an agency with an attention span longer than that of a gnat and not yet purchased by your friendly neighborhood corporation. Though I do wonder what will have to happen to this news service when the Arab Revolt spreads to the gulf states and threatens their home base... but that is a story for another day. Right now Aljazeera is featuring this report on what is happening to our neighbors Up North and it makes for horrible reading.

"I have critically high levels of chemicals in my body," 33-year-old Steven Aguinaga of Hazlehurst, Mississippi told Al Jazeera. "Yesterday I went to see another doctor to get my blood test results and the nurse said she didn't know how I even got there."

Aguinaga and his close friend Merrick Vallian went swimming at Fort Walton Beach, Florida, in July 2010.

"I swam underwater, then found I had orange slick stuff all over me," Aguinaga said. "At that time I had no knowledge of what dispersants were, but within a few hours, we were drained of energy and not feeling good. I've been extremely sick ever since."

BP's oil disaster last summer gushed at least 4.9 million barrels of oil into the Gulf of Mexico, causing the largest accidental marine oil spill in history - and the largest environmental disaster in US history. Compounding the problem, BP has admitted to using at least 1.9 million gallons toxic dispersants, including one chemical that has been banned in the UK.

According to chemist Bob Naman, these chemicals create an even more toxic substance when mixed with crude oil. Naman, who works at the Analytical Chemical Testing Lab in Mobile, Alabama, has been carrying out studies to search for the chemical markers of the dispersants BP used to both sink and break up its oil.

Poly-aromatic hydrocarbons (PAHs) from this toxic mix are making people sick, Naman said. PAHs contain compounds that have been identified as carcinogenic, mutagenic, and teratogenic.

"The dispersants are being added to the water and are causing chemical compounds to become water soluble, which is then given off into the air, so it is coming down as rain, in addition to being in the water and beaches of these areas of the Gulf," Naman told Al Jazeera.

"I'm scared of what I'm finding. These cyclic compounds intermingle with the Corexit [dispersants] and generate other cyclic compounds that aren't good. Many have double bonds, and many are on the EPA's danger list. This is an unprecedented environmental catastrophe."

Click for more coverage of the BP Oil Spill, including the other segments of the 8-part series, Fatal Fallout.

Aguinaga's health has been in dramatic decline.

"I have terrible chest pain, at times I can’t seem to get enough oxygen, and I'm constantly tired with pains all over my body," Aguinaga explained, "At times I'm pissing blood, vomiting dark brown stuff, and every pore of my body is dispensing water."

And Aguinaga's friend Vallian is now dead.

"After we got back from our vacation in Florida, Merrick went to work for a company contracted by BP to clean up oil in Grand Isle, Louisiana," Aguinaga said of his 33-year-old physically fit friend.

"Aside from some gloves, BP provided no personal protection for them. He worked for them for two weeks and then died on August 23. He had just got his first paycheck, and it was in his wallet, uncashed, when he died."

National health crisis

Many of the chemicals present in the oil and dispersants are known to cause headaches, nausea, vomiting, kidney damage, altered renal function, and irritation of the digestive tract. They have also caused lung damage, burning pain in the nose and throat, coughing, pulmonary edema, cancer, lack of muscle coordination, dizziness, confusion, irritation of the skin, eyes, nose, and throat, difficulty breathing, delayed reaction time and memory difficulties.

Further health problems include stomach discomfort, liver and kidney damage, unconsciousness, tiredness/lethargy, irritation of the upper respiratory tract, hematological disorders, and death. Pathways of exposure to the chemicals are inhalation, ingestion, skin, and eye contact.

Al Jazeera has talked with scores of sick people across the Gulf Coast who attribute their illnesses to chemicals from BP's oil disaster.

Paul Doom, 22, from Navarre, Florida, was training in preparation to join the US Marines, until he became extremely ill from swimming in the Gulf of Mexico.

"I stopped swimming in July because I started having severe headaches that wouldn’t go away," Doom told Al Jazeera. "But each time I went to the doctor they dismissed it."

In October, Doom began to have internal bleeding, but this too was dismissed by doctors. In November, when it worsened, he was given pain medications in the Emergency Room and was told it would pass. Less then three weeks after that, Doom collapsed with a seizure.

"Since then, I've had two blood tests for Volatile Organic Compounds [VOC's] which are in BP's oil and dispersants, and they both came back with alarmingly high levels," he said.

Children playing in the surf at Orange Beach, Alabama, despite independent scientists' warnings of toxins in the water, air, and seafood [Erika Blumenfeld/AJE]

Since the onset of his symptoms, Doom has been dealing with ongoing internal bleeding, nose bleeds, bleeding from his ears, blood in his stool, headaches, severe diarrhea, two to five seizures per day, paralysis in his left leg and arm, and failing vision.

"A toxicologist that interpreted my blood VOC results told me they didn't know how I was alive," Doom explained. "My Hexane was off the charts, and I have 2 and 3 Methylpentane, Iso-octane, Ethylbenze, and mp-Xylene."

Wilma Subra, a MacArthur Fellow and chemist in Louisiana, has been testing the blood of BP cleanup workers and residents in Louisiana, Mississippi, Alabama, and Florida. Subra tested Doom's blood and found high amounts of several VOC's.

"Ethylbenzene, mp-Xylene and Hexane are volatile organic chemicals that are present in the BP crude oil," Subra told Al Jazeera. "We're finding these in excess of the 95th percentile, which is the average for the entire nation. Sometimes we're finding amounts 5 to 10 times in excess of the 95th percentile."

Subra explained that there has been long enough exposure so as to create chronic impacts, that include "Liver damage, kidney damage, and damage to the nervous system. So the presence of these chemicals in the blood indicates exposure."

Testing by Subra has also revealed the chemicals are present "in coastal soil sediment, wetlands, and in crab, oyster and mussel tissues."

Staggering toll

Since January, at least 67 dead dolphins have washed ashore along the Gulf Coast, an event the National Oceanic and Atmospheric Administration declared as "an unusual mortality event". In the whole of 2010, 89 dolphin deaths were reported for the same area.

In January, a Woods Hole Oceanographic Institute chemist and colleagues reported that the toxic chemical dispersants BP used to sink its crude oil remained in the deep ocean in an oil and gas-laden plume that had still not degraded.

Also in January, Louisiana Senator AG Crowe wrote a letter to President Barack Obama expressing his deep concern about the toxic dispersants BP used, and according to Senator Crowe, continues to use along the Gulf Coast.

"Mr President, my concern is that this toxic and damaging chemical is still being used and it will compound the long-term damage to our state, our citizens, our eco-system, our economy, our seafood industry, our wildlife and our culture," the letter read.

"We will not be fooled in to believing that the oil and the toxins are gone. Because the toxic dispersants have been, and are still being used today, the oil is being forced downward in to the water columns and then carried endlessly around and about by the Gulf currents adversely affecting our environment."

Subra, the MacArthur Fellow, is alarmed by what she is finding in the people whose blood she is testing.

"Severe symptoms, lots of respiratory and cardiovascular problems, and skin lesions," she explained. "There is a lot of internal bleeding, and the chemicals cause this by disrupting the integrity of the red blood cells."

Subra said: "We’re seeing the chemicals in different classes of people. Cleanup workers employed by BP, clean-up workers no longer employed, and we’re seeing it in community members who come in contact with the crude by fishing or recreating in the Gulf."

Al Jazeera asked Subra what she thought the local, state and federal governments should be doing about the ongoing chemical exposures.

"There is a lack of concern by the government agencies and the [oil] industry." She said, “There is a leaning towards wanting to say it's all fixed and let's move on, when it's not. The crude oil is continuing to come on shore in tar mats, balls, and strings."

Subra continued: "So the exposure continues. There is still a large amount of crude in the marshes and buried on the beaches. As long as that pathway is there for exposure, these problems will continue quite a long time into the future."

A bunch of guinea pigs

Jo Billups is an environmental activist who has taken it upon herself to assist in the funding, along with her friend Michelle Nix, in the blood testing being carried out by Subra.

Working with the Louisiana Environmental Action Network and several doctors along the Gulf Coast, Billups and Nix have been holding workshops and helping sick people get their blood tested and find medical assistance.

"We have sick people from Apalachicola, Florida, to Grand Isle, Louisiana, and it's not stopping and that's what's disturbing," Billups said. "The levels we are seeing are not dropping, and we're seeing new chemicals now. We gave some of our blood test results to [EPA head] Lisa Jackson. They know what is going on, and they are not doing anything about it."

"The saddest part is the children," Billups added. "We’re seeing young children with extremely high levels of chemicals. We're altering our DNA and our bodies forever, We're a bunch of guinea pigs."

Jennifer Rexford, from Panama City, Florida, was an oil clean-up worker for BP.

"We were taken to clean up oil and tar balls with inadequate equipment," Rexford told Al Jazeera. "We regularly got oil all over us."

Rexford now has a staph infection that covers much of her body that she attributes to the chemicals in BP's oil she was cleaning up.

"Everyone I know of that I worked with are now having kidney problems, along with lots of other illnesses," Rexford, who has been to the hospital four times trying to find a solution to her infection, said. "My neighbor has a rash all over her body, and another clean-up worker I know found a lump in her breast a month ago. So when I started calling my co-workers, I realized that we’re all sick."

BP cleanup workers regularly are not provided with the proper protective equipment for cleaning up hazardous material such as crude oil [Erika Blumenfeld/AJE]

"I have documentation and images showing lesions in my brain," Paul Doom said. "Lesions that are the same as lesions on the brains of marine life from the Exxon Valdez spill from marine necropsies. This is a life and death situation and a race against time."

Doom said the water and food along the Gulf Coast are not safe, and he is angry at the Obama administration.

"I would ask them why have they allowed this to happen," he said, "How can you live with yourself knowing you allowed this to happen and continue?"

Aguinaga feels betrayed as well.

"I feel stabbed in the back by my own country," he said, "I feel we are being dictated to by a foreign power. Maybe our president is not strong enough to stand up against them. I know money buys people, but they couldn't offer me enough money for the loss of my friend, and the stuff we’re going through."

Aguinaga's prognosis for the future of Gulf Coast residents?

"We’re all lab rats and we didn’t even know it. We’re waiting to see how it’s going to turn out."