Cystic Fibrosis Channel (CFTR) in the cell membrane; ivacaftor works on the outside of the cell to increase the ease with which chloride ions can move through the channel formed by CFTR protein that spans the cell membrane many times

It seemed like a major medical miracle at the time: the defective gene which causes cystic fibrosis (CFTR gene which stands for Cystic Fibrosis Transmembrane Conductance Regulator) was identified and the world was waiting for the next step, perhaps a quick cure for the disease which many hoped would be realized shortly after discovery of the offending gene. After all, knowledge of the gene and the amino acid sequence of CFTR seemed like overcoming the major hurdle and the rest would be easy–a drug designer game–no problem. The CFTR gene identification however, was in 1989 and, although improvements in palliative therapeutic methods over the past forty years have dramatically prolonged the survival rate of those  afflicted with the disease (from an average age of 11 years to 37), no magical cure had emerged more than twenty years since the gene was first discovered. Now, very recently, the drug VX-770 (ivacaftor) was introduced that seems to offer a breakthrough for at least one subclass of patients with Cystic Fibrosis. As it turns out, Cystic Fibrosis is a disease that contains many different mutations of the CFTR gene, and only the mutation known as G551D, which has defective CFTR proteins that reach the surface of the cell are responsive to the drug (ivacaftor works by enhancing the transport of chloride through the CFTR channels, which improves the ability of the channel to participate in normal fluid regulation, reducing the sticky mucous secretions that, in the respiratory system, create a high risk of infection and restriction to normal air flow and oxygen exchange).  The G551D  mutation only accounts for 4 to 5% of the Cystic Fibrosis population. But the hope is that this drug will also help other mutations of the gene if they have at least some CFTR channels that make it to the surface of the cell.

Most of the cystic fibrosis patients have defects in the protein such that they never get placed in the cell membrane, because they are not folded properly and not recognized by the cell “as suitable for service.” Once the CFTR protein is properly placed in the cell membrane, it works by allowing chloride ions to more readily traverse the ion channel that they form, typically moving from the inside to the outside of the cell (with sodium and water coming through other channels) to provide a less viscous secretion into the respiratory tracts (other organs besides the lungs are similarly affected). Thus, while no single drug is likely to  relieve the entire panoply of cystic fibrosis mutations, this first step using ivacaftor has proven very promising in clinical trials. It is a novel drug that was created by twenty years of intensive research and new discoveries along the way that verified how complex a problem we face in generating a suitable cure, even if the structure of the disease-causing protein has been deciphered. VX-770 (ivacaftor) was developed by a method known as High Throuput Screening (HTS) in which 228,000 chemically diverse drug-like compounds were screened using a cellular assay for identifying CFTR potentiators. A multiple author paper was published in PNAS in 2009 and the results of a successful clinical trial were reported in the November 3, 2011 issue of the New England Journal of Medicine.

While this promising new drug gives us all reason to celebrate and enhance our hopes for future developments in this dreaded disease, we must also sober up for the struggle ahead, because this new drug (ivacaftor) does not address the central problem faced by the majority of patients with cystic fibrosis. About 90% of cystic fibrosis patients suffer from a form of the disease in which they do not produce a CFTR protein that partitions across  the cell membrane and would thus not be amenable to ivacaftor treatment. In a way, the drug works like hooking up your hose to a power washer, which increases the pressure and flow of water, but would not work without a source of water and the plumbing necessary to bring it to the device. The task ahead for the majority of cystic fibrosis patients is more sobering when compared to the achievement with ivacaftor and the subset of patients with G551D. Indeed a more complete cure, covering the entire spectrum of the cystic fibrosis patient population will very likely have to come from a gene replacement  strategy. But we have good news on that front as well: we have already had success with therapeutic gene-replacement approach in treating diseases such as Leber’s Congenital Amaurosis, through the injection of a single dose of adenovirus into the eye which had a copy of a healthy gene that replaced the defective RPE65 gene. RPE65 is required to regenerate the visual pigment (rhodopsin) that is necessary for the first step in capturing photic stimuli. Thus the patients with this deficiency were blind from an early age. Now the treated subjects can see and this mode of therapy will spread to eventually include many different forms of blindness, including retinitis pigmentosa, one of the major causes of human blindness.

It was once the case that drug therapy development was by fortuitous accident. The delay between the discovery of the gene and the first drug to target and improve CFTR action points out the difficulty that modern medicine faces: the transition from the era of chemical medicine (where you use the shotgun approach to try a lot of things and if one works you often don’t know why–such as the accidental discovery that antihistamines (chlorpromazine) dramatically improved some symptoms of schizophrenia and led to the elimination of several hundred thousand hospital beds in the 1950s that had been devoted to their care–even though the drug does not cure the disease) to molecular medicine (where the drug is designed to interact with targeted features of the offending molecule, or you replace the gene or prevent its expression)–can be a long, arduous and very painful process, filled with moments of hope and despair much like the medical quest for an AIDS vaccine; it is now more than thirty years since the AIDS virus was first discovered. We keep thinking that we will shorten the delay between discovery and cure, that each new breakthrough towards adopting molecular approaches will allow us to reach a threshold where a new pathway is illuminated to light the way for quickly curing all genetically-based diseases through a magical form of gene replacement therapy, while non-inherited chronic diseases will be cured with greater precision in drug development, like the results with ivacaftor. Each breakthrough like ivacaftor  treatment for cystic fibrosis gives us hope that we are approaching such a threshold and that we are getting closer to a  much broader and wiser view of the disease landscape.  But to get there, we still have to get a lot smarter about biology before any kind of medical avalanche for cures will flood the broad human pathology terrain.

When I was a medical student, during my rotation in medicine as a clinical clerk in my junior year, we admitted a young girl to the hospital with a raging pneumonia caused by her cystic fibrosis condition. It was a life-threatening situation, but she was finally discharged after a long period of antibiotic and pulmonary therapy. She was about 12 and was full of energy with high expectations for her future, though by then she had been admitted many times to the hospital with similar infections and she had obviously been afflicted with the disease from the time of her birth. The disease had also retarded her growth. It seemed like everyone in the hospital went out of their way to greet this young patient, as she was cheerful, charming and expressed with optimism the idea that she might have passed the most dangerous period of her disease and could now look forward to a future with more certainty and plan accordingly. Yet, a year later, I learned that she had been admitted again with another bout of pneumonia and died in the hospital. I never forgot that young patient and I think that experience accounts for my long-standing interest in cystic fibrosis and the CFTR ion channel.

RFM

Strait of Hormuz (Wikipedia)

Last year, the drums of war began to beat as a result of supposedly new findings suggesting Iran had initiated a program for building a nuclear weapon. I previously wrote on the topic at the time and specifically pointed out the lack of hard evidence supporting such a conclusion: all of Iran’s known nuclear material was accounted for by the International Atomic Energy Agency (IAEA) and none of our intelligence had produced unambiguous evidence that bomb construction was underway. Indeed, our own intelligence estimate as recently as 2010 concluded that Iran was not working on a bomb. Now it seems the Israelis have come to the same conclusion. An article published in Haaretz, a left-leaning Israeli newspaper, began with the following lead: “Israel believes Iran itself has not yet decided whether to make a nuclear bomb, according to intelligence assessment to be presented later this week to U.S. Joint Chiefs of Staff Dempsey.”

A good article summarizing the significance of this report can be found in Juan Cole’s Informed Comment.  When Iran responded to the new military threats and sanctions by threatening to close the Strait of Hormuz (through which 20% of the world’s oil supply flows) if conflict should break out, the Obama administration decided to ratchet down the threat level and perhaps the article in Haaretz reflects the Israeli willingness to do the same. Obama faces a very tight election this year and does not want to see the cost of oil go up by the Iranians following through with their threats. He also apparently expressed his deep dissatisfaction with the Israelis over the recent assassination of an Iranian nuclear scientist.  Now if we can get Mitt Romney to stop fanning the flames of war  against Iran and lower the tension by a couple of decibels, we might be able to have an election without starting a war in the Middle East. We are truly a gifted nation when it comes to starting wars–we don’t have a problem mobilizing the popular support needed to take us into war–but it’s ending them that seems to give us great difficulty. At least for now perhaps the tension between Iran and the United States/Israel can be lowered and the rhetoric of war eliminated.  Our departure from Iraq has served to reduce friction between the U.S. and Iran, but until we have a peace agreement among the Palestinians and the Israelis, the region will always be a flashpoint. The right wing Likud government in Israel is always sounding the alarm about Iran and we have the habit of believing their intelligence more than we do our own.  The full impact of the Arab Spring has yet to achieve a steady state in the region. But that event also reflects joblessness and economic hardship together with trends in food prices and this is a long and deep economic recession. Each time we increase the tension between the U.S. and Iran, we enhance the position of the hard-line ruling clerics and diminish the prospects of bringing the full-throated Arab Spring to that country. This is the same mechanism we used to prolong the Cold War.

Whenever we attach the word “war” to a conflict, like the “war on drugs” or the “war on terror (ism?)”, we tend to make them into a new version of a never-ending story. Imagine how different it would be if be used the label “skirmish on drugs” or “conflict against terror (ism?).” Wouldn’t those terminology examples make it easier to know when to quit? The word “war” seems to demand a winner and a loser, something we rarely achieve or if we achieved it in Iraq, for example, we did so by utterly destroying their culture and devastating millions of lives–all innocent victims of our shock and awe strategy of warfare. But, when confronted with a “skirmish,” it seems more like a cease fire until you can get the whole thing straightened out by some sort of agreement. I am in favor of any congressional act that would outlaw the use of “war” and reserve that for those circumstances where our nation is truly imperiled by circumstances we didn’t create for ourselves. That would mean we can’t have war against terrorism or a war on drugs or a war on obesity. Furthermore we should extend the ruling so that a President cannot make a judgement about whether a conflict should be viewed as “war.” Like the Constitution, only Congress can declare war. With those rules in hand, we might be able to bring to a much faster resolution the conflicts and wars we start by emphasizing that a war by any other name is a “skirmish,”  and if you lose, it will only be a blemish on your war record, nothing more serious.

RFM

Wages vs Productivity in America

Les Leopold, writing in Alternet,  has provided an excellent, graph-driven account of why we have an Occupy Wall Street (OWS) movement today. They are demonstrating for the same reasons that each of us might offer about the financial condition of our country and why we see so little opportunity for job prospects now and into the future. For those people that have jobs, they are finding it difficult to make ends meet, many are  loaded with student loan debt and and large numbers of Americans are being evicted from their homes, with many others teetering on the brink of foreclosure.  Government has not only failed them, but participated in the actions that reduced employment opportunities to a shadow of what is needed for a healthy society. The government bailout has been directed to the wealthy, many of whom caused the economic meltdown in the first place.  Our culture and economy have been hollowed out by those still in charge, yet these same players continue to generate new high risk investment “instruments” and still send jobs overseas. If the OWS demonstration doesn’t grow into a national crescendo, it’s because we will allow it to fail–it is our turn to step in, support the  movement and facilitate their energy to build a national consensus for making a new economy that works more effectively for people, with enhanced wages, reduced costs for education (do you remember when tuition at the University of California was free until Ronald Reagan introduced tuition charges which have now soared to all time highs?), reversing our expensive, privatized culture and do so with a progressive tax base that stabilizes our society and allows us to rebuild a very broken economy–one that includes vitality in its support of a stable, social safety net. These are not impossible goals. The economy needs to work for all of us, from top to bottom and for too long we have neglected the latter in favor of the former.  We need our country back, the one we assumed we had all along, the one that slowly eroded without our notice because of the small incremental steps that were  too subtle for human detection. In retrospect however, we went over a cliff.

We have a long way to go before we achieve a sense of national focus on the right target and the means to achieve these objectives.  But the OWS movement got the place right.  The financialization of America has been a bad turn of events, not a good one. The wages vs productivity in America  graph [taken from lepold's article]  illustrates what happened to the wages of the American worker over the past several decades and why there is an Occupy Wall Street movement gaining momentum today.  Throughout most of our history [United States] there existed a tight relationship  between worker productivity (economic output per hour of labor) and wages (weekly wages in the graph have been inflation adjusted to 2008 dollars).  When expressed in this way, you can see how the wages and productivity  tracked one another, but began  to deviate in the late 1960s, at which time wage earners’ weekly income  fell flat ,though productivity continued to grow: on this scale the highest weekly wage was $746 a week in 1971-1972 ($2008), but could be, in today’s $ more than $1000 per week had the relationship between productivity and wages continued at it’s pre-1960s relationship.   What happened quite simply was that management stopped rewarding workers for their increase in productivity and started to use the additional profits from gains in productivity to plow them back into the organization, reporting them as increased profits which led to enhanced value for publicly traded stock. A rise in the value of the stock enhanced the personal gain of management and made them look like geniuses, when all the while it was in reality a transfer of wealth from workers to management. Stock purchases increasingly became part of the CEO salary picture and eventually could be back-dated to insure a handsome golden parachute. Simultaneous with the development of the golden parachute for management, the gold watch for employees  went the way of the Dodo bird. The wild merger mania that occurred during the Reagan years led to a decrease in plant efficiency, compensated by downsizing, robbing retirement packages and selling off assets of companies. Mergers led to a decreased competition and upward movement of prices. Eventually local stores would be replaced by Wal-Mart, whose low wages were supplemented by the social safety net at public expense. Wall-Mart continues to be a government-subsidized operation and has contributed to the third world-like feminization of labor.

The figure on the right, also from Les Leopold’s article in Alternet  illustrates how the loss of worker’s compensation helped to elevate the top 100 CEO salaries based on the average worker’s annual salary. Here you see an explosive growth in CEO salary from 45x in 1970 to 1723x in 2006. You can argue that this massive salary increase was created by taking the salary deserved by workers for their increased productivity and then diverting it into corporate income and stock values.  This change did not happen by accident. It happened when the neoliberal movement began to change the nature of our economy and culture, to emphasize free market conditions and globalization, as national borders began to melt and multinational corporations begin to emerge with huge influence on the laws that regulated business and capital markets. The flaw that exists today in Wall Street is continued belief in the idea that a free market is a perfect instrument and, in time, will solve all problems. These same neoliberal capitalists also express the idea that a financial crisis is good once in a while to wipe the slate clean and get a fresh start. Increasingly, from the dotcom crisis of 2001 and the Great Recession of today have reduced labor costs substantially. The Republicans are voting to maintain the current crisis to further reduce labor costs of the American work force. Indeed, for each crisis created by capitalism, a labor surplus is created which allows the capitalist class to manipulate working conditions further by having an excess of labor such that labor lowers their demands and becomes more pliable.

Rate of top 100 CEO salaries per average worker annual salaries

Did it ever occur to you that despite the fact that for decades we have been aware of the salary inequities between men and women, who earn less for the same work, the situation has not really changed, despite social pressure to establish gender equity in salary. That is the nature of neoliberal policy–keep women’s salaries as low as possible and move more women into the work force, thus reducing total labor costs. We may want to think that the feminization of our work force was done in the name of gender equity, a noble cause,  but neoliberal policy means that a net reduction in labor cost is achieved when more women enter the work force, such that maintaining women’s salaries below their male counterparts reduces labor costs as the proportion of the work force increases in female representation. If you look at the global labor situation, where a more informal manufacturing has taken place in some industries, such as making shoes or clothing in third-world countries, often localized in Export Processing Zones (EPZs),  more and more women have entered the work force, some with children, who can adapt to  flexible hours of work consistent with their needs for child care, particularly in single parent families. Neoliberal strategies for cheap female labor have also led to slave labor prostitution among very young women and this is a growing world-wide problem, which is also found in the United States.

Neoliberal policies have a different outcome in every culture that they have been tried and yet they also have a common denominator in that wherever they have been put into place, poverty, dispossession of property (taking it away with very little compensation) and exploitation of women, including sexual enslavement,  increases. I saw a recent documentary on prostitution in India where poor women with children are recruited into prostitution out of need for employment, yet the documentary seemed to suggest that the way out of prostitution for these women was through better education, without mentioning  that the economics of female employment meant that some would find their way out of prostitution when jobs became available, with a livable wage. You probably can never eliminate prostitution, but if women with children could get decent-paying jobs, fewer would grow up under conditions of worker enslavement, which is often the environment in many poor countries.

Then, in more recent times, you can look at the drop in the Federal Tax rate for very wealthy individuals. The graph below shows the drop in tax rate for households with over $1 million per year compared to the 400 richest households in America. The wealthiest people in America pay about 15% in their Federal Income Tax. Today, the Republicans, by blocking Obama’s jobs bill have identified themselves as the force that wants to continue with the Great Recession, because it increases the size of the labor force, thus reducing labor costs by supply and demand and “wipes the slate clean” for future profit making. In addition, we have a surplus in manufactured goods that must be consumed, so profits can resume. In the meantime Wall Street continues to put us at risk as we continue to socialize the risk they produce while they privatize the profits. The only way we can get our economy right is to revise the tax code and charge Wall Street with a fee that goes into reconstructing an economy in which financial services once again serve the country, not the other way around. Reversing what we allowed to go wrong with our financial sector means regulatory reform and abandoning some of the risky instruments that keep our financial industry in  danger of producing another meltdown.

Taxes paid by high income households

RFM

Occupy Wall Steet Vol 2

Neoliberalism is on trial: in time, the charges will be enumerated and the clarity of history will focus on the magnitude of the error we made by allowing a radical economic and social system to be implemented through a false promise given as a cure for a poorly understood problem of the 1970s (stagflation).  But a growing populist judgement, coming out of the Occupy Wall Street movement,  has already been reached, aided by the Arab Spring and countless other demonstrations that have emerged,  railing against the sanctuaries of neoliberalism, without necessarily identifying the root cause, even though it has been mentioned. It all began in Tunisia, late last year,  when a young vegetable seller, Mohammed Bouazizi, lit himself on fire after suffering a humiliating interaction with authorities: it was December 17, 2010, exactly nine months before the Occupy Wall Street movement began. Rising from that single event, with Tunisia first, the Middle East caught fire in Egypt, Bahrain, Syria, Yemen, and Libya, Madison and Wall Street where a global movement is underway to challenge the socially destructive outcome of the  neoliberal experiment, which resulted in a rising, but increasingly isolated, capitalist class, at the expense of everyone else’s  shot at dignity. The attorneys for the plaintiffs have yet to make the full-throated case against neoliberalism and there is a lot that needs to be discussed besides the history of its false promises. That will come in time, and admittedly, it may not be the OWS movement that provides the thrust of the critique. But people are in place to do this and only need a stage to articulate the reasons that neoliberalism has been such a colossal failure beginning at its very origins; claims of a triumph were made when Allende in Chile was deposed and replaced by Pinochet, who used the “Chicago Boys” guided by Milton Friedman to introduce neoliberalism into Chilean economy, which initiated the downward trajectory of the middle class and eventually spread to many other South American countries. But the IMF is now mostly out of South America and more democratic societies are emerging, even though many face opposition from the capitalist class that flourished under neoliberal authority.

But if all goes right, if a guilty verdict is eventually reached against neoliberalism, what should the sentence be and how should it be carried out? There were some laws broken during the march-up to the neoliberalism of today and deceit was rampant (in the past, I have repeatedly referred to ne0liberalism as Reaganism, but that characterization robs our understanding by pinning the tail on only one donkey). The penalty that our financial system must pay is the full cost of getting itself re-embedded into our culture. Since this a global market system, and all nations are implicated to one degree or another,  the entire global community has paid a heavy price for the rise of the capitalist class to the exclusion of a more equitable, open and participatory society. But it is time to begin the long road of recreating a financial system that serves society, supports education, invests in job creation and challenges the value of privatization. Then too, these changes need to be mindful of the future health of our blue planet.

It seems that our election cycle of 2012 is shaping up to be the mother of all  elections, certainly for this new century and perhaps the most important election since that of FDR in 1932. It will not be an election between one ideal candidate, like FDR of 1932 and one undesirable, like Mitt Romney (who thinks the military is too small), but hopefully it will be an Obama as the front runner who must yield to the demands of the Occupy Wall Street movement. Perhaps Obama can be transformed from the corporatist that he is today to someone more heroic in the struggle against the neoliberal institutions that he has so far been willing to serve.  The Occupy Wall Street movement has become global, with an estimated 1500 cities worldwide experiencing some form of crowd demonstration and street/square/park  occupation. The organizers credit the Arab Spring with the inspiration for the non-violent character of their actions. Their strategy is waiting for proper growth, which will in and of itself lead to a form of political action. What we have to fear most is that the American version of neoliberalism has morphed too far into neoconservatism, which means that the state itself has so much invested in the neoliberlist culture of today that, at some time,  it will actively suppress the Occupy Wall Street movement, as they have done in the recent past with pepper spray and clubs.  Thus, while the OWS movement waits for growth, they are at risk of violent suppression. For the moment at least, Zuccotti Park is Tahrir square and hopeful expectations have been aroused.

As the NYT points out, the bankers and Wall Street managers do not take the OWS movement seriously and they are certain that merely waiting the movement out, letting it die of natural causes, will be the only action required. As one Wall Street hedge fund manager put if, “Most people view it as a ragtag group looking for sex, drugs and rock ’n’ roll.” In response, Paul Krugman points out in the NYT, that when hedge fund managers talk about getting credit for what they do and how much they pay in taxes, they are in essence admitting that something is truly wrong with America when its only visible success is in the financial sector of our economy. Everyone else is hurting.

While you’re checking things out you might want to read David Graeber‘s article in The Guardian. In that article he proposes that the stagflation-caused introduction of neoliberalism didn’t really cure the problem it claimed to address-it was never fixed from the get go: [from Graeber] “What we’ve learned now is that the economic crisis of the 1970s never really went away. It was fobbed off by cheap credit at home and massive plunder abroad – the latter, in the name of the “third world debt crisis”. But the global south fought back. The “alter-globalisation movement”, was in the end, successful: the IMF has been driven out of East Asia and Latin America, just as it is now being driven from the Middle East. As a result, the debt crisis has come home to Europe and North America, replete with the exact same approach: declare a financial crisis, appoint supposedly neutral technocrats to manage it, and then engage in an orgy of plunder in the name of “austerity”.”
Time is on the side of the Occupy Wall Street protestors: for the election of 2012, a continued ground swell in numbers and cities occupied will impact on the 2012 election even though neither of the political parties knows how to adjust to this beginning of a new force in the political spectrum of America. Until the world gets right, it will be liking watching the effects of global warming on our television sets without any meteorologist ever mentioning that global warming or global climate change is responsible.  The trap of television is the visual presentation without a story to go with it, without an explanation because our visual apparatus overwhelms the need for aduitory reference. Neoliberlism created the capital class and mainstream media, owned by the capitalist class created capitalist class news, a kind of numb the senses senseless.

• Here is another interesting feature of the Occupy Wall Street movement, reported by Rebecca Solnit from Tomdispatch: “Having been at many demonstrations in my life, here’s the strangest and perhaps the most striking thing I’ve noticed: I have yet to see a single counterdemonstration, or even a single counterdemonstrator.  Not one.  Nor a single sign expressing disapproval, outrage, or upset with the Occupy Wall Street movement.  This, believe me, is not normal for protests.  Talk about expressing the will of the 99%!”

• More from Solnit: “And the earliest public opinion polls reflect this.  According to an Ipsos poll, a startling 82% of Americans have heard of the movement, striking percentages are following it with some attention, and — according to TIME magazine — 54% of Americans have a favorable view of it, only 23% an unfavorable one.  Perhaps this shouldn’t be surprising in a country in which 86% of those polled believe “Wall Street and its lobbyists have too much influence in Washington,” or in which median household income fell by 6.7% after the Great Recession of 2008 was officially declared over (9.8% since it began).”

The beginnings of the neoliberal movement promised personal freedom and human dignity beyond anything possible under a more Keynesian, state-regulated system–the system that was more or less in place at the time. That was the bold promise.  Through their first meeting, which founded the Mont Pelerin Society in 1947, attended by  people like Friedrich von Hayek, Milton Friedman and Karl Popper, the group portrayed their philosophy as “liberalism.” Their appeal didn’t gain much traction until the 1970s, when the post WW-II economic system began to collapse in a period described as “stagflation” (slow economic growth coupled with high inflation). The neoliberal label reflected their emphasis on free market principles developed in the latter half of the 19th century, which had displaced the older ideas of Adam Smith and Karl Marx. In response to the current collapse of neoliberal economics, Karl Marx is being resurrected again and is currently the subject of serious academic discussions. How much further this will go and how much the conversation include the dangers of neoliberalism to nature and global climate change is surely the next exciting chapter that will at least partially unfold in the Occupy Wall Street movement. Who can wait?

RFM

Occupy Wall Street Movement

If you visit the Occupy Wall Street website as of last night and today, you will see recognition that neoliberalism is the root cause of our economic problem. I think this is a good, timely identity to make, though it should send many scrambling to find out more about neoliberalism. That’s good too. In short, Neoliberalism is the system that Milton Friedman was instrumental in formulating as a kind of economic theory, but Ronald Reagan and Margaret Thatcher introduced the system into America and Britain as the dominant social and economic system, based on a globalized “free market” economy. It basically holds that the free market can solve all problems, that it is a perfect instrument. Poverty is not the result of bad market behavior,  it is caused when people decide not to work and take themselves out of the work force (because their earnings decline). The free global market can solve all problems–it adjusts to deal with supply and demand and, left completely on its own, can solve problems with benefits for all participants. Their claim is that everyone will prosper and the free market will also solve poverty, having claimed to raise millions of people above the poverty line. But the reality is that deregulation of markets gives neoliberals the ideal environment with which to enslave the global work force.

This form of capitalism is vicious and uncompromising towards labor and through the IMF, the World Trade Organization and the World Bank, has resulted in huge debts for loans to third-world countries and massive dismantling of social policies and the social safety net. But the important achievement for the Occupy Wall Street group is that they have identified a problem–an economic system in which our financial system no longer serves society, but instead society is supposed to serve the financial system. America has been financialized, an event that took place in the 1990s when profits from the financial sector exceeded those of manufacturing. Neoliberalism externalized the relationship between society and economics. Whereas the healthy relationship that had in the period after the depression and before the 1970s was one in which the financial service sector served the economy, we migreated under neoliberalism to where we are today, with our financial system completely free from serving society’s needs and “dis-embedded” within our culture. Our financial system needs to be “re-embedded” into our social structure and become one force that serves the interests of the entire society, not the interests of the few. In the process of making these demands and changes, we need to confront the issues of global climate change and recognize that unchecked growth in greenhouse gas emissions seriously compromises our future and the future of our children.

Yes, market reforms have to be part of the solution and we need to decide that risky financial investments such as those which the over-the-counter stock market is making are  risky and leaves our financial system at huge risks, especially now that Wall Street knows they are too big to fail. The privatization of wealth and the socialization of risk have encouraged Wall Street Investors to continue creating high risk “instruments” of investment. In the short run, these need to be under tighter regulatory control and in the long run, the re-embedding of our financial system needs to take place to insure that we can meet some of the serious problems we face that require immediate attention, such as greenhouse gases and our future on the planet. In my opinion that will require taking over the banks and financial investment firms and reorganizing them to work more effectively for society and the preservation of the environment.  Back in the 1960s and into the 1970s, the fortune 500 companies had made their peace with FDR’s New Deal. It was only when Ronald Reagan, backed by new wealth from self-made millionaires,  claimed to be opposed to taxation and wanted to keep more of  their money from  exposure to Federal taxation.  Thus government became the problem, not the solution to their interests and from there, things went completely downhill, but did so incrementally, such that few people noticed what was happening and few warning signs were put up along the way.

This is where we are today, in a financial collapse that rivals what existed during the Great Depression. It is clear that what we need is a new economy, one based on investment in our infrastructure. Does anyone know why China is doing so well and what mechanisms they used to rebound from the recession? Yes, massive investment in their infrastructure-like highways, high-speed trains, airports and transportation. They are the Keynesians of today and to them the future belongs, unless we begin to realize that what’s missing in our culture is low cost education, right through college, rebuilding our infrastructure, with improvements in highways, bridges, the introduction of high-speed rail, improvements in public transportation. These are things we can afford to do and in the process, by directing the excessive profits of the neoliberals, who otherwise endanger our  economic system, we can achieve a never-ending improvement in our infrastructure which includes addressing the problems of global climate change so that we grow more and more compatible with nature and our natural resources.

As an article that summarizes the OWS movement very well, I recommend David Graeber’s article in The Guardian. For many reasons, I generally find the Guardian superior to the NYT and, for a British Newspaper, there is plenty in The Guardian about America, testifying to the fact that there are probably many American readers who look to The Guardian for news and opinion. For late night people, because the NYT goes to bed early, The Guardian comes to your email box about the same time as the NYT, despite the 7 hour difference between Minnesota and England. So the way I think of it, the NYT  is indispensable for getting news–I am hooked on it, but on the other hand The Guardian has periodic, more pithy and penetrating articles that cover the American scene and often integrate it into a more global view. I now travel to Europe much more regularly because my scientific interests, as determined by scientific meetings, cannot be met by staying in the U.S. anymore. Recently I attended two different scientific meetings in Europe, one in Prague and the other in Amsterdam. Both were on a very high plane and have become the kind of meeting that one cannot avoid if one wants to stay current in your field. China will soon join this scientific resurgence and America will have to become increasingly aware of what’s going on in other countries. Perhaps science and technology can lead the way to encourage Americans to start learning more about the world outside of the U.S., though I am not holding my breath.

RFM

Occupied Wall Street Journal

The vitality of the Occupy Wall Street Movement resonates deeply with many Americans who strongly identify with their choice of the target–Wall Street. After listening to lots of interviews with participants, it is clear that many who gather there have similar stories. They lost a low-paying job, have very heavy student loans, but still hope someday to get back on track with more education or just a better job, one that pays the bills and isn’t constantly under threat of elimination. We will have to generate a different kind of economy than the one we have had for the last thirty years if we are ever going to meet those kinds of needs. But aren’t those kinds of needs also a kind of freedom that we should be advocating, something derived from our constitution and available to all? Shouldn’t our evolving concept of freedom include the freedom of a good job, housing affordability, just like the freedom to worship and the freedom of speech? And while we are at it shouldn’t there also be freedoms that are not allowed? What about the freedom to exploit other human beings? Shouldn’t that freedom be off the table, specifically denied? There are all kinds of freedoms glaringly omitted from our culture that need to be articulated and added to our list. What about the freedom to have adequate health care, access to clean water, access to a nutritious food supply and a healthy diet? What about the freedom to be free of environmental contamination and toxic waste sites? What about the freedom to have our food supply safe from infectious organisms? These are the things that  our society once thought about, but has put far downstream on the list of priorities, largely because of privatization and the dismantling of our government through neoliberal advocacy. Privatization of public functions is only one force leashed upon society that prevents us from having control of these basic freedoms, those that should have been articulated more forcefully and openly.

While the geography for the movement seems right, uttering a few short words expressing the epicenter of the problem might be also appropriate, like “we are all victims of neoliberal capitalism.” It sounds far out and somewhat aloof from anything commonly expressed as a problem, at least among the Occupy Wall Street group. Capitalism itself is not going away anytime soon and most of the demonstrators are quick to disavow any hint that they want to bring down the Western World as we know it. But this Western World is pretty depressing and very repressive. Capitalism in its present form did not need to have the mean streak it regularly displays, but it turned out that way because we eliminated the economy as a tool to support our social engagement, not destroy it. Occupy Wall Street  is not a movement for anarchy, but an emphasis for a better life for them and for their families. But the true undercurrent of the problem they (we) face is the vicious form of our current neoliberal economic system  that replaced a more socially acceptable form of capitalism over the last thirty to forty years. Though this form of neoliberal capitalism is dead–it died from the economic meltdown when $600 trillion in risky investments went poof; since the world’s economy is only $ 55 trillion a year, you can see the magnitude of this loss and the virtual impossibility that this sunken treasure can ever be raised from the bottom, anymore than the third world countries will ever repay their debt, laid at their doorstep through the neoliberal policies mediated by the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO).  But the principles of capitalism and the need for compound growth of profits demand that, before we can predict a recovery for  tomorrow, we must figure out how to consume what we produced yesterday. That is why crisis capitalism is allowed to flourish, despite the massive financial dislocation it has brought to far too many people in America and around the globe. Though neoliberalism is dead, no one has yet driven a stake through its black heart and we still face a political party and a public commercial television channel (Faux News) that wants to keep neoliberalism alive no matter what the social cost. Though few people in Occupy Wall Street will articulate it, what they are really demanding, despite the avoidance of making demands, is to free our society of the neoliberal grip and the inhumane nature of our economy. The human cost of bringing neoliberalism back would be further enslavement of the American worker and that is what these young people on Wall Street are fighting against, but don’t yet use the right words to express it. Already we are seeing new Wall Street tools that represent another agent of potential  mass destruction of the market, in the form of leveraged exchange-traded funds or E.T.F.’s. This new “instrument” is apparently responsible for some of the high market volatility we have seen in recent months. Is the capitalist ruling class brewing another financial crisis? Capitalism cannot exist without an intermittent crisis–that’s the reset button on their computer.

What unifies the Wall Street demonstrators is the urge to meet and demonstrate with others whose gut reactions to our financial crisis forms the basis of an identity not represented within the political landscape of America. They coalesce today because they all have good bullshit detectors and know that something is deeply wrong with America. There is a flaw in our country that must be addressed and fixed. In times past, movements such as this would be derived from a politician who seemingly broke away from the mold of conventional politics and wandered off the ranch (remember Barack Obama), only to be swallowed  by the corporatist grip and be quickly co-opted by savvy political party leaders, or the deadly Koch brothers. We all witnessed the rapid conversion of the Tea Party movement (you might remember when the Tea Party first became a prominent news item they too were angry with Wall Street and the TARP bailout–but now they favor eliminating regulatory controls over banks and financial centers, i.e., they want to go back to 2000 and have another ground hog day) into a group of belligerent right-wing scarecrows.  But members of the Occupy Wall Street movement do not have to fear being co-opted by a political party because neither party is rushing into the street to embrace them.  Both political parties of today are far more conservative than the younger occupant demonstrators of Wall Street. In recent days we have heard Obama announce his support for the Occupy Wall Street demonstrators, though full endorsement is hard to visualize, since many of the occupiers are critical of his policies as a centrist. Although they differ in their positions, both major parties of today, Republicans and Democrats alike, support the capitalist ruling class who have assumed power and introduced a radical economic system that we have lived with for the past forty years–neoliberalism. What we must all get used to is the idea that this neoliberal economic system is a radical departure from how society functions in a historically healthy way. Going down the neoliberal road has produced massive poverty, job insecurity, high unemployment in our future and privatization of what should be public functions. The economy needs to be remade so that it contributes positively to the growth and stabilization of our society–it needs to be internalized again.

We are at a point in our depressed culture and economy where jobs are being lost and a permanent state of high unemployment has been produced. This underclass,  based on high unemployment, will keep the wages of all employed workers much lower than they would otherwise be. Wage freezes will be common, just as they have been over the last decade or more. It seems the major critique of the Occupy Wall Street movement is to ask them to specify their demands and present a more coherent set of objectives.   In the past, the American protest movement was largely centered around our national election cycles and most of us supported more political power for the Democrats. Whatever success we have had in achieving those goals, such as the victory of 2008, did not get back the country we had hoped for, nor did we see much in the way of an effort to help move us in that direction. Today, we do not have the country that the majority of Americans tell pollsters they want.  Corruption has always been at the heart of the American political system, where 20% of the population (acting through the Senate) can control the laws passed for the rest of the country. But, getting  excited about each election cycle seemed like the only way we could express our will and influence the country. Usually, we voted for Democrats and often we were disappointed, largely because too much money is needed to run a campaign and most good candidates stop short because denouncing Wall Street practices or the neoliberal economy can’t be done, because  that’s where candidates must go to raise the money needed for the high cost of a political campaign. It’s a vicious cycle which proved highly frustrating because too many Democrats were Republicans in sheep’s clothing and they were influenced by money from corporate profits and the financial interests of Wall Street, often mediated by well-paid lobbyists.  There is now so much money in our political system that something miraculous needs to surface to begin a new therapeutic trajectory towards a less corrupt electoral process.  But the Wall Street Movement is one which, at least for the moment, bypasses politics and speaks directly to a cause with which most Americans can identify. And, their numbers are growing, not just on Wall Street, but through the internet and social networking. One website, “we are the 99 percent” shows images and notes that people have written in describing the hardship they are going through. These problems should never happen to any American–we have torn the safety net apart and don’t seem capable or willing to repair it. There is surely something that resonates with all Americans when Wall Street demonstrators emphasize that they represent the 99% of the American population left out of the financialization of America that now has a death grip on our politics, our economic future and the very future of our planet.

One has to give enormous credit to the Occupy Wall Street Movement and we should do all we can to help stimulate and nourish its growth–that’s the key–growth. Don’t worry about demands or principles until you are big enough to appear on Faux News. The organizers, if there truly are any such people, are right in their thinking that they need to grow until they have a size and the attention of the nation before articulating what they want for political and economic reforms. And ultimately they will not agree on every issue, but the fundamental demand for change will be the theme that broadly unites them into the future. In many ways the demands of this movement are a repetition of something they once heard in a recent national political campaign–we demand change!  Finally, this is America’s Arab Spring!

While it may not resonate with those carrying the torch for demonstrations, neoliberalism is the root cause of our current problem and the source of our current crisis. Few people articulate this set of issues better than David Harvey, whose books “A Brief History of Neoliberalism“; it’s available on Kindle. If you finish that one, you might want to go on to a more current explanation of our economic meltdown described in his more recent publication “The Enigma of Capital and the Crises of Capitalism“; also available on Kindle. Harvey points out the transition that we made from having capitalism embedded in our culture and thus working for the benefit of society to the more virulent and radical form of neoliberalism that we have today, in which capitalism has been taken out of our culture in such a way that society is now supposed to serve capitalism and the ruling class. Our democracy turned into a neoliberal oligarchy. This is unnatural and it cannot exist for long, for this form of capitalism tries to make commodities out of everything it touches, including human labor and nature. In the near future, I will be writing more on this topic of neoliberal capitalsm and its structural deficiencies. Suffice to say that all societies that have gone down the neoliberal road have created job insecurity, high unemployment and more poverty and greater disparity in wealth distribution. And, the wealth that is created through this mechanism filters up to the top as it is removed from the bottom. The development of our social structure and social freedoms was purposely interrupted by the Cold War and we were made to feel that our system was locked in a titanic death struggle against a repressive system that wanted to enslave us all. No matter how you feel about the Cold War, a war we started in order to achieve  global American hegemony, you must feel that the absence of that struggle today means that we can get back to the business of building a more just and equitable society and the beginning of this movement is visible in the Occupy Wall Street demonstrators, whose growth we must insure and whose vitality we must borrow if we have to just to infuse ourselves with a commitment for change–and not the kind of change that Obama promised. We need economic deliverance from a very bad experiment and a very bad economic model.

The arch enemy of neoliberalism  is labor and the process itself needs to generate a periodic crisis that allows resetting of the labor relationship. Making everything into a commodity, including human labor, wild animals, land, forests, water and nature in general, has been the objective of neoliberalism and it has largely succeeded or is on the verge of announcing a complete victory. But this fight is not just one of articulating freedoms that should have been granted decades ago, but it is also a fight for the future of the planet.

RFM

Lyndon Johnson sworn in as President immediately after Kennedy was shot 1963

Those of us living in 1963 remember where we were and our station in life when Jack Kennedy was assassinated in November of that year. Who can forget the image of Jacqueline Kennedy standing next to Lyndon Johnson as he was sworn in as the new President of the United States, with the oath administered on Air Force One. And nearly thirty-eight years later, all of us remember where we were when the hijacked jets crashed into the World Trade Center buildings on 9/11/2001; we watched in televised horror as the buildings collapsed in such a way that they resembled an induced implosion, similar to those normally set off by explosive devices strategically placed on the building interior. Ten years after the Kennedy assassination, the nation had changed, but its fundamental character, that of a feel-good, do-good nation with a bright future had not altered: things would get better.  By that time, Johnson had been driven out of office into self-imposed exile by his own conduct of the Vietnam war. Hubert Humphrey lost the election of 1968 to Richard Nixon because of Vietnam and the Democratic Party Convention held in Chicago that year. Nixon, was president in 1973, elected with a vague promise of generating peace in Vietnam, but had escalated the bombing in North Vietnam and started secret bombing in Laos and Cambodia. At home,  the country was in a state of anger and confusion over the war, stagflation and oil prices, unable to connect the dots between them  in any meaningful way.  The break-in at the Watergate Hotel took place in June of 1972 and by 1973 the issue was heating up to the point that Nixon would resign as President a year later in August 1974.

The New Deal, established under FDR,  had started its own form of implosion, in part because no one stood up and explained things like stagflation in any satisfactory way. A replacement philosophy was offered through  neoliberalism and the free market economy, couched in phrases that seemed like personal freedom had been denied by the New Deal philosophy of embedded liberalism; the new arguments were provided by Milton Friedman and the Chicago School of Economics, with Friedrich von Hayek serving as a historical figure and the “Miracle of Chile” under Pinochet as the primary example (people don’t need freedom, they just need a good income). No one seemed to care at the time that the “Miracle of Chile” marched the country towards an increasing disparity in wealth distribution–a Chilean gilded age. Eventually, the neoliberal formulation would come to dominate the global economy and generate our current gilded age disparity in our national wealth distribution. The income disparity in America, coupled with having elected a black President in 2008, has resulted in a division between the two political parties that is so divided  their congressional voting behavior that it threatens our economic future. But even more telling about the nature of our country is that, when Kennedy was alive, the Cold War was raging and an Armageddon of sorts was avoided during the Cuban Missile crisis a year before his death. In between then and now the Cold War ended,  yet the military budget has remained alarmingly high for a country that before 9/11, was at peace.

What about ten years after 9/11, a date fast approaching? As a result of the memory searing 9/11  event, in very short order, we started two wars we cannot finish and have a President that promised to stop the war in Iraq, but there are doubts today whether our military involvement in that country will ever be finished, largely because we are still in conflict with Iran, whose influence in the Middle East was enhanced by our invasion of Iraq. So here is the new American logic of war–we invade a country under false pretenses but in reality do so to gain control of their oil and sell off all their assets–a free market economy from the get-go. Then, when the war and occupation got ugly, we put in a puppet government at a time when George Bush didn’t know the difference between Sunnis and Shiites (he said he thought everyone was an Arab); it was in the election of this puppet government that a Shiite government was formed (not surprisingly because the majority of Iraqis are Shiites), whose natural ally is Iran–the number one enemy of the United States. So, we are occupying a Shiite country to protect them from a neighboring Shiite country with whom they are natural allies and we don’t quite know who the enemies there will really be, except we know that we didn’t quite get control of the oil as we had planned and someone finally told Paul Bremmer that selling off the assets of an invaded country was a crime against humanity and that he could be arrested and tried at the International Court of Justice in The Hague. That could still happen: maybe America could begin a healing process of sorts if it did.

In the meantime, the war in Afghanistan, the right war according to candidate Obama, cannot be won, but our military insists that we are making progress, which cannot be confirmed by journalists other than those embedded within the military. Americans badly need to feel that we should be able to win at least one war, so the press seems willing to try and provide us with a sense of imminent victory if we can stay the course for a few more decades. Along the way, America became a security state, with a security apparatus that no one can comprehend, but it has a completely black budget and will be with us forever. Numerous agencies now constitute our intelligence system. The military tells us that the Afghanistan war will take as many as ten more years at the current rate of progress. Surely, at $ 2 billion a week,  America will not wait that long!

No President will ever authorize a reduction in the budget of our heavily privatized and overly-inflated security system, with buildings distributed in every state (a well-known military strategy for weapons manufacturing). If a terrorist attack should occur after a President cut the budget of our national security system,  the mood of the country would place the President’s political future, as well as that of his party into doubt as the relaxation of security expenditures would be blamed for the attack.  So, on top of the military budget, which is already close to the combined military budgets for the rest of the world, we add an additional layer for a security budget, but that’s an add-on we can’t even sink our teeth into because it is entirely secret. It is a highly privatized security system that has the right to examine any of our emails or phone messages for critical words, so be careful what you say on the phone. Any American can be arrested, detained and exposed to a long period of incarceration. Do we feel more secure because of this new, massive security state? No: our new source of insecurity comes from the threat of this large, secretive , uncontrollable organization. Did securitized America help capture the underwear Christmas bomber? No! Did it help eliminate Osama bin Laden? Not according to Richard Clarke, who appeared on Frontline earlier. In fact, you might want to watch Frontline’s “Top Secret America“ to get a feel for the unwieldy nature of our security system that developed after 9/11. Here are some of the uncomfortable facts: currently, 854,000 people in America have top-security clearance (this is not easy to get: some universities give classes on how to get this top level of security clearance); 1200 government organizations and 2000 private companies contribute to our intelligence apparatus, all of which was created after 9/11.  A slight expansion on this topic has appeared in these postings.

Though the intelligence system we created after 9/11 is largely unknown to us, lurking in the dark recesses of our national fabric, we can articulate what is more obvious about the changes we have made in our national character–we ourselves have became terrorists after 9/11! No one gets their head around this aspect of our cultural transition better than Noam Chomsky. I recommend that you read his article, which appeared in the Tomgram, just this past week. Kidnapping, torture and assassination are now part of our new national culture and people like Dick Cheney are publishing to reinforce this character change and, in the process, help him elude criminal charges that might someday come to rest on his doorstep. Polls show that many Americans accept this new form of behavior as necessary for our national safety, despite the fact that torture experts tell us that applying things such as waterboarding get people to say whatever you want from them to in order to get you to stop. But, waterboarding and torture are only part of the story. To assess the scope of this change in our  national character, we have to go all the way back to the close of WW II and the Nuremberg trials of the Nazi war machine leaders. From Chomsky’s article, part of which describes how we treated Osama bin Laden in comparison with how we handled Nazi trials after WW II:

• “When the time came to consider the fate of men much more steeped in wickedness than Osama bin Laden — the Nazi leadership — the British government wanted them hanged within six hours of capture. President Truman demurred, citing the conclusion of Justice Robert Jackson’s summary execution ‘would not sit easily on the American conscience or be remembered by our children with pride… the only course is to determine the innocence or guilt of the accused after a hearing as dispassionate as the times will permit and upon a record that will leave our reasons and motives clear.’”
  

  World Trade Centers on 9/11

then, comparing Bush’s invasion of Iraq and his overall behavior in conducting war policies, Chomsky says,

• “Similarly, it is uncontroversial that Bush and associates did commit the “supreme international crime” — the crime of aggression. That crime was defined clearly enough by Justice Robert Jackson, Chief of Counsel for the United States at Nuremberg.  An “aggressor,” Jackson proposed to the Tribunal in his opening statement, is a state that is the first to commit such actions as “[i]nvasion of its armed forces, with or without a declaration of war, of the territory of another State ….” No one, even the most extreme supporter of the aggression, denies that Bush and associates did just that.” Problem stated problem solved for it doesn’t matter if Bush and company deny it, that it happened and was an unprovoked act of aggression is an undisputed fact. Bush, Cheney, Rumsfeld and Rice are international criminals.

Quoting again from Justice Robert Jackson, Chief Counsel for the United States at Nuremberg,

• “We might also do well to recall Jackson’s eloquent words at Nuremberg on the principle of universality: “If certain acts in violation of treaties are crimes, they are crimes whether the United States does them or whether Germany does them, and we are not prepared to lay down a rule of criminal conduct against others which we would not be willing to have invoked against us.””

America was deeply, pathologically changed by 9/11. The inflexibility of Tea Party members reflects this new pathological state. We were unprepared by our leadership for what happened to us, largely because our leadership wanted to keep our foreign policy actions a secret from the American public, who they knew would never approve of our foreign policy actions, once exposed as being so foreign to the international image we like to project about ourselves. When you look at the polls that show a majority of Americans believe that their children will not have the same opportunities for success that they did, that the country is headed in the wrong direction, combined with the general pessimism about our economy and the global state of affairs, perhaps turning to Michele Bachmann or Rick Perry for the answers doesn’t seem as outrageous as it would have ten years after Kennedy’s assassination. After all, we tried everything else, didn’t we? When your own country abandons  your ideals and sense of responsibility, a bewildering emotion of abandonment makes us all confused about what it was we had in the first place–in the form of a country. As one outcome of this betrayal, one has to assume that we have not seen the end of terrorist attacks against the United States, but we are unable to see that if we restored justice to the Middle East and helped create a workable Palestinian state, a major motivation for these terrorist attacks would be mitigated. Imagine that we have been led by international criminals, who should be tried in a World Court for their crimes against humanity and then imagine where our standing would be in the world of public opinion, if we followed through with that obligation. In time, we might reduce the securitized state of America.

RFM

Karl Marx

To my great surprise, the Minneapolis Star Tribune, a conservative corporatist newspaper, with a very heavy social filter, recently published a story by George Magnus that came out of Bloomberg News entitled “What Karl Marx can tell us now“; it begins with a revival of sorts for Karl Marx, though it proved to be short-lived.  As Magnus explains, our economy is right in the kind of fix that Marx warned about, as capitalism faces a once-in-a-lifetime crisis today, right here and right now. Marx predicted in “Das Kapital” that when companies maximize their profit and improve their productivity, leading to fewer and fewer workers, the accumulation of wealth at one extreme of society leaves a social index of poor and a slippery slope for many others sliding into poverty. Beginning in the 1970s worker productivity increased, but wages stagnated because corporations plowed those gains into their own wealth accumulation and enhanced corporate earnings which also enhanced their wealth (the stock option deal, sometimes backdated to take advantage of huge capital gains). Then too, there was the matter of good paying manufacturing jobs moving overseas, replaced in many cases by Wall Mart jobs, which people can’t live on. Right now, the U.S. income inequality is, by some measures, close to the disparity of the 1920s and unemployment among the young is in the same range as the depression. The gains achieved under the New Deal for the Middle Class have been erased and the current deep recession may become even more serious in the months ahead. Marx pointed out that the more people who exist in poverty, the more consumption declines and, in our consumer-based economy of today, where about 70% of it is based consumption, the income disparity has permanently placed our economy in jeopardy, with at best a very slow rate of growth projected well into our future. At that point Magnus wants to put Marx back into the dustbin of history, but he advocates that the only means by which our economy can recover is through massive employment, in other words a big jobs bill. The government is the only institution that can do this. And there is no better time than now to put lots of people to work because borrowing the money to create such things as infrastructure rebuilding through a massive works project is virtually free. Many of these jobs will save us money because of improvements in efficiency. We have a no-interest condition today and by the time you pay it off, inflation will have eradicated any interest on the debt you take on for this task. If you don’t do this and do it soon, our debt will only grow, because more and more people will be thrown out of work. The budget reduction effort we witnessed is a disaster and further budgetary cuts will only make things worse. Magnus is a senior economic adviser at UBS, which itself didn’t get high marks for its contribution to our economic crisis and has been accused of helping wealthy Americans avoid a tax burden. UBS, as well as many other banks are being sued by the Federal Finance Housing Agency. The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value. Further culpability of UBS and the extent of their violation of sound banking practices have yet to be resolved. But meanwhile, the fact that this article would appear in such a statist newspaper as the STRIB, means that somewhere the dikes have broken and water is seeping into Minnesota, though the newspaper continues to be so fascinated by Michele Bachmann that perhaps is the source of distraction which allowed the mention of Karl Marx in the title of an opinion piece.
RFM

Non-Candidate Actor Matt Damon

For those of you who have read anything I have written previously on the subject, you can understand that I lack fond appreciation for Newt Gingrich, a candidate still in the race for the Republican nomination for the Presidency. To me, Gingrich is the poster child of everything that has gone wrong with the American experiment in democracy: he is a small-time American demagogue that would like to convert America into an oligarchy, with himself as the prince of all paupers.   Gingrich preceded GW Bush into national politics, but perhaps served as a template for his Presidency, even though Bush failed to live up to Gingrich’s rhetorical expectations (Bush wanted to recreate the Presidency of Ronald Reagan, but acquired a special edge from Gingrich that helped to make the Bush presidency a true disaster for the country). Without Gingrich, you couldn’t have had the Tea Party–their arrogance is stamped with his logo. There were of course major differences between Gingrich and Bush. Gingrich worked with Clinton to achieve a balanced budget, though this was done at a scathing cost to the social safety net of our country; in contrast, Bush reduced taxes on the wealthy and spent money like a sailor, especially after 9/11. But the main difference between them was that Bush didn’t have any ideas and, as a result, always displayed a kind of simian expression,  perhaps accounting for the fact that he and his partner, Donald Rumsfeld, liked to torture; in contrast to Bush, Gingrich had ideas, but most of them were either uninterpretable or vacuously inept and always highly over-rated. The revolution that Gingrich created helped to spawn the destruction of the Office of Technology Assessment (OTA), perhaps one of the most effective organizations ever created by Congress. Yet he still can speak whenever he wants at the Heritage Foundation, where he continues to mesmerize that particular crowd–makes you wonder what they’re up to. You might recall that Gingrich was at one time the Speaker of the House and helped to formulate the so called “Contract with America” assembled during the lead up to the election of 1994, in which the Republican Party gained control of the House for the first time in forty years.  Many of us felt that renaming Gingrich’s plan to “Contract On America” was far more descriptive of its purpose, given the scope of the strategy (initially the plan included the elimination of Social Security, but public outcry, in addition to complaints from Gingrich’s mother, led to a quick revision of that component of the plan). I am not particularly fond of the Clinton Presidency, as he was a centrist, much like the Presidency of the current White House occupant, but I do appreciate that Clinton stopped the Gingrich train in its tracks and mostly prevented the “Contract on America” from being implemented, at least in its original form. Gingrich was eventually forced out as Speaker of the House by his own party members and also retired from Congress, largely as a result of his unpopular impeachment of Bill Clinton.

Move forward to the current election cycle and we find that Irish bookmakers have come out with their odds for success by the individuals running for President. Leading the list is Obama at 4:6; Rick Perry at 7:2; Mitt Romney at 5:1; Michelle Bachmann at 16:1, John Boehner at 50:1, while candidate Newt Gingrich is tied with actor Matt Damon at 100:1. Matt Damon came into public visibility for the Presidency when Michael Moore named him as a good potential candidate, but he has not, to my knowledge, thrown his hat into the ring (if Senator Bernie Sanders of Vermont challenged Obama in the primaries, he would get my vote). So Gingrich can still excite the people at the Heritage Foundation, but he has a much harder time scoring visibility points with the public and, as a result, with the Irish bookmakers.

RFM

Candidate Newt Gingrich and Third Wife, former Callista Bisek

There is no language being used in our government today that has linguistic identity with that which we use in our daily lives. The Republicans want to cut spending, even though that will eliminate jobs at a time when they have promised to create them. They are the new  impostures. Young people are in a depression: there are no good jobs available and those that infrequently come along have ferocious competition. I see people with PhDs apply for positions that require a BA or BS college degree. Have you seen this congress do anything about creating jobs? Is there a jobs bill that we haven’t heard of before or is that the “jobs-killing” plan not to raise the debt ceiling, which will translate into higher interest payments for everyone who has almost any form of loan? And Economics 101 tells us that when a recession hits, and this is a very bad one–the worst since the Great Depression–the government should create jobs by spending money and hiring people, keeping state and local workers on the job so that they in turn will spend and create more demand, which encourages companies to hire more workers and those workers in turn create a new level of demand as the snowball turns into an avalanche of jobs. Yes, along the way, we have to create a new economy, because we sent the factories for the old jobs to China. And who did that?

The stimulus package Obama engineered in 2009 worked, but it wasn’t big enough–it was too small and had too many tax breaks to keep the target of unemployment at 8%. The  $ 1.2 trillion spending bill that Romer talked about would have worked, but the $700 billion that got generated allowed the unemployment to go higher than predictions and it was loaded with tax breaks which don’t provide the same level of economic stimulation. Republicans knew this when they passed the bill. What we need is another larger stimulus package, one implemented by more progressive economists, not those who engineered our disastrous deregulation of the banks. It worked that way during the Great Depression and our job numbers, especially among the young, are in the same territory as we had in that era. So if creating jobs is so important and cutting the deficit is not something to think about until you have good job creation conditions, why does Congress concern itself with the issue of the debt ceiling?

The answer is pretty simple: the Republicans are acting in unison because they believe they can defeat Obama in the 2012 election and that, in addition to taking over the Senate and keeping the House, will give them a trifecta to carry out the complete dismantling of our social  safety net and destroy the new healthcare system before it can be fully implemented. These Republicans are not leaders, but an army of soldier ants out to destroy whatever is in their pathway and even if that means further destruction to our weak recovery. To further appreciate the captivated ideologue brain that substitutes for thinking in Washington these days, you should read Robert Reich’s blog this week, “Why Washington is About to Make Things Worse” to get reinforcement for the lost principals of E 101, as well as to explore the maddening hypocrisy of Standard and Poor’s threat to downgrade America’s credit rating, when this agency, together with the other credit rating agencies (Moody and Fitch) was giving out triple-A ratings to some of Wall Street’s riskiest experiments, including mortgage-backed securities and CDOs (collateralized debt obligations). That kind of rating continued until the eve of the meltdown in 2007. Is this what they mean by reform? Protect banks and investment firms but hold countries accountable? True reform is a long way off.

The Republicans were shocked to see that not only did America elect a black man in 2008, but they elected a competent black man, so there is double concern here. Why can’t the Democrats nominate an incompetent white guy, like the Republicans generally do? Then too, there’s the question of who will pay for all of our debt once we decide we want to do something serious about it, like Clinton did? After all, Obama proposed the most far reaching debt contraction of anyone in Washington. But, the Republicans want to take it out of Medicare, Medicaid, Social Security, education and other benefits that go to the shrinking Middle Class and with only an election trifecta to stop them, you can bet that the 2012 electoral race will bring out all the Republican bag of tricks, like those we saw in Florida in 2000 and Ohio in 2004. Many Republican-controlled states are already gearing up for 2012 by passing photo ID requirements for voting. What kind of photo ID will be required? From now on, seat belts are required. In the meantime, the one method that knocked some sense into the Republican Congressmen and women was to light up their phone system and saturate their emails, as happened after Obama’s speech on Monday.

RFM