NEWS2U Politics, Finance & Resources

2012-02-01T08:08:00.000-05:00

Ocean acidification already well beyond natural variability

By Scott K. Johnson
Arstechnica
Jan 30, 2012

Trends can be difficult to detect in real-world data, and the noisier the data, the tougher the task becomes. A longer time series can help limit the impact of noise, but these can be difficult to come by. Verifying the human alteration of ocean chemistry requires tackling challenges like these.

Ocean acidification entails a decrease in the pH of ocean water as the carbonate that buffers it is consumed. That carbonate does more than just maintain pH, though. Lots of marine organisms, from plankton to mollusks to coral, use it to build shells and skeletons. As the buffer is depleted, the saturation state of carbonate minerals like calcite (and its polymorph aragonite) decreases, making it more difficult for organisms to incorporate them. In most areas of the surface ocean, calcite and aragonite are supersaturated, making it easy for organisms to build shells and skeletons. In undersaturated water, the equilibrium tilts the other way, and dissolution of these structures becomes possible.

Calcite and aragonite saturation states vary regionally and seasonally, so how can we make sure the acidification trend we’re measuring is real and human-caused? One way to look into this question is to take the measurements we have and model the whole ocean to see what natural variation would have looked like before humans started emitting CO2. A recent study in Nature Climate Change does just that.

The researchers ran a climate model from 800 A.D. to 2100 A.D. using the best data available for the various forcings: solar activity, volcanic activity, changes in land use, and anthropogenic emissions of greenhouse gases and reflective aerosols. They project the rest of this century using the IPCC A1B emissions scenario, a "middle-of-the-road" emissions estimate. To track acidification, they use the saturation state of aragonite in surface waters.

The model shows large variability between regions. For example, fluctuations in upwelling that occur near the Galápagos Islands cause large swings in the aragonite saturation state. In the Caribbean, on the other hand, it holds quite steady.

In all areas where coral reefs are found (these are often described as the "rainforests of the sea" for their astonishing diversity and abundance of life), the researchers find that the current saturation state of aragonite is well below the pre-industrial average. To put it into concrete terms, they estimate that calcification rates of reef organisms have already dropped by about 15 percent. Under the A1B emissions scenario, calcification rates would decrease by a total of 40 percent (relative to pre-industrial) by 2100.

Comparing this to the magnitude of natural variability in preindustrial oceans, the model indicates that we are already considerably outside that envelope (as the authors describe it, there’s a high signal-to-noise ratio). On average, aragonite saturation states at reefs in the Caribbean and western Pacific have dropped by 5 times the range of natural variability. In areas where that range is small, such as Melanesia, the drop is as high as 30 times the natural envelope. With a few small exceptions, the signal-to-noise ratio is already at least 2:1 across all of Earth’s oceans, even near the Galápagos Islands where natural variability is high.

The model also indicates that the Southern Ocean will be undersaturated with aragonite by 2030. The nutrients that come up from the deep ocean make this region incredibly fertile, supporting massive fisheries and attendant populations of birds and marine mammals. The plankton at the base of that food web require calcium carbonate to build their shells. While the Southern Ocean is the most sensitive region, it's not the only one with problems. The authors estimate that 30-50 percent of ocean water above 40° latitude becomes undersaturated in the model by 2100.

For another comparison, the group simulated the end of the last glaciation, which was the last time Earth saw a sizeable increase in CO2. Over 6,000 years, atmospheric CO2 rose from about 190 ppm to around 280 ppm. The authors write that the model shows “[t]he observed present-day anthropogenic rate of change in [surface aragonite saturation state] is one or two orders of magnitude larger than estimated for the last glacial termination.”

The researchers emphasize that other factors—such as changes in light penetration, temperature, and nutrients—will be affecting marine ecosystems at the same time. (And acidification can affect more than just the calcareous critters.) The authors write, “These stress factors probably do not simply add up, but combine in a species-dependent manner. Tropical surface temperatures are projected to increase at a rate that would lead to massive coral bleaching and mortality in the next three to five decades. Combined with a detectable change due to reduced ocean aragonite saturation and the corresponding estimated drop in carbonate accretion of ~15 percent since the industrial revolution, severe reductions are likely to occur in coral reef diversity, structural complexity, and resilience by the middle of this century.”

Nature Climate Change, 2012. DOI: 10.1038/NCLIMATE1372 (About DOIs).

Ocean acidification

By Scott K. Johnson
Published 4 years ago

Ocean acidification is the lowering of the ocean's pH due to the rising concentration of CO2 in the atmosphere. Because CO2 in the atmosphere and surface ocean is in equilibrium, increasing atmospheric CO2 pushes CO2 into the ocean, where it combines with H2O to form carbonic acid (H2CO3). Since pre-industrial times, the average pH of the ocean has decreased by roughly 0.1 units (from about 8.2 to 8.1), a 30 percent increase in acidity. About one-third of the CO2 emitted by humans since the start of the Industrial Revolution has been absorbed by the ocean.

Often referred to as global warming’s evil twin, ocean acidification is potentially damaging to marine ecosystems. Many organisms that have calcium carbonate shells or skeletons have more difficulty building them as pH decreases below pre-industrial levels; damage to these organisms threatens the base of the marine food chain. Potential levels of acidification have also been shown to be directly hazardous to other living things, such as fish.

The ocean is buffered against pH change by CaCO3 derived from continental erosion. Global pH can only experience a sustained drop when the rise of atmospheric CO2 outpaces the replenishment of the carbonate buffer. This has kept ocean pH constant over long periods of geologic time, even during times when atmospheric CO2 was higher than it is today. It has probably been between 3 and 30 million years since ocean pH last dropped below its current levels.

Sources:
http://arstechnica.com/science/news/2012/01/ocean-acidification-already-well-beyond-natural-variability.ars
http://arstechnica.com/technopaedia/terms/2008/01/ocean-acidification.ars
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2012-01-30T08:00:00.002-05:00

David Stockman on the abuses of Crony Capitalism

Bill Moyers Interviews David Stockman

The Republican candidates are falling all over themselves to show that they are real Reagan Conservatives. David Stockman was Dutch's Budget Director. His credentials cannot be questioned.

He lays out that we now have neither democracy nor capitalism. All that is left is crony capitalism. Listen to how an actual Reagan Administration official views what his "conservative" followers have done to this country.

Continuing its sharp multi-episode focus on the intersection of money and politics, Moyers & Company explores the tight connection between Wall Street and the White House with David Stockman -- yes, that David Stockman — former budget director for President Reagan.

Now a businessman who says he was "taken to the woodshed" for telling the truth about the administration's tax policies, Stockman speaks candidly with Bill Moyers about how money dominates politics, distorting free markets and endangering democracy. "As a result," Stockman says, "we have neither capitalism nor democracy. We have crony capitalism."

Stockman shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who's really in charge.

"We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do... whatever it takes in order to keep the game going and their stock price moving upward," Stockman tells Moyers.

[Those that would invoke Reagan at every turn for cheap political gain should see this.]

Watch the entire interview, 34min.
http://billmoyers.com/segment/david-stockman-on-crony-capitalism/
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2012-01-27T21:51:00.000-05:00

New Year, Same Crisis

By George Soros
January 27, 2012

The measures introduced by the European Central Bank last December, especially the Long Term Refinancing Operation (LTRO), have relieved the liquidity problems of European banks, but have not cured the financing disadvantage of the highly indebted member states. Since high-risk premiums on government bonds endanger the capital adequacy of banks, half a solution is not enough.

Indeed, that supposed solution leaves half the eurozone relegated to the status of Third World countries that have become highly indebted in a foreign currency. Instead of the International Monetary Fund, it is Germany that is acting as the taskmaster imposing tough fiscal discipline on them. This will generate both economic and political tensions that could destroy the European Union.

I have proposed a plan that would allow Italy and Spain to refinance their debt by issuing treasury bills at around 1%. I named it in memory of my friend Tomasso Padoa-Schioppa, who, as Italy’s central banker in the 1990’s, helped to stabilize that country’s finances. The plan is rather complicated, but it is legally and technically sound. I describe it in detail in my new book Financial Turmoil in Europe and the United States.

European authorities rejected my plan in favor of the LTRO. The difference between the two schemes is that mine would provide instant relief to Italy and Spain. By contrast, the LTRO allows Italian and Spanish banks to engage in a very profitable and practically riskless arbitrage, but has kept government bonds hovering on the edge of a precipice – although the last few days brought some relief.

My proposal is to use the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) to insure the European Central Bank against the solvency risk on any newly issued Italian or Spanish treasury bills that it may buy from commercial banks. This would allow the European Banking Authority to treat these various T-bills as the equivalent of cash, because they could be sold to the ECB at any time.

Banks would then find it advantageous to hold their surplus liquidity in the form of T-bills as long as these bills yielded more than bank deposits held at the ECB. Italy and Spain would then be able to refinance their debt at close to the ECB’s deposit rate, which is currently 1% on mandatory reserves and 25 basis points on excess-reserve accounts.

This would greatly improve the sustainability of these countries’ debt. Italy, for instance, would see its average borrowing cost decline from the current 4.3%. Confidence would gradually return, yields on outstanding bonds would decline, banks would no longer be penalized for owning Italian government bonds, and Italy would gradually regain access to the market at more reasonable interest rates.

One obvious objection to this strategy is that it would reduce the average maturity of Italian and Spanish debt. I believe that, on the contrary, this would be an advantage in the current exceptional circumstances, because it would keep the Italian and Spanish governments on a short leash; no country concerned could afford to lose the ECB facility.

In the case of Italy, the short leash would dissuade former Prime Minister Silvio Berlusconi from seeking to topple Mario Monti’s new government (which has only a fragile majority), because if Berlusconi precipitated an election, the electorate would punish him. This would help to reestablish political stability and accelerate Italy’s return to the market.

My proposal fulfills both the letter and the spirit of Article 123 of the Lisbon Treaty. The ECB’s task is to provide liquidity to banks, while the EFSF and ESM are designed to absorb solvency risk. The ECB would not be facilitating additional borrowing by member countries; it would merely allow them to refinance their debt at a lower cost.

Together, the ECB and the EFSF could do what the ECB cannot do on its own. This would provide temporary relief from a fatal flaw in the euro design’s until the member countries devise a more permanent solution.

The EFSF would have practically unlimited capacity to insure eurozone T-bills in this way, because no country could default as long as the scheme was in operation. Nor could a country abuse the privilege, lest it be automatically withdrawn, causing the country’s cost of borrowing to rise immediately.

For the first time in this crisis, the European authorities would undertake an operation for which they have more than sufficient resources. Coming as a positive surprise to the markets, it would reverse their mood. After all, markets do have moods; indeed, that is what the authorities have to learn in order to deal with financial crises.

Contrary to the current discourse, the long-term solution must provide a stimulus to get Europe out of a deflationary vicious circle – structural reform alone will not do it. The stimulus must come from the EU, because individual countries will be under strict fiscal discipline. It will have to be guaranteed jointly and severally – and that means eurobonds in one guise or another.

Source:
http://www.nationofchange.org/new-year-same-crisis-1327589368
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2012-01-21T19:30:00.000-05:00

Citizens United: A Tsunami of Secret Corporate Campaign Cash is Drowning Our Democracy

by Isaiah J. Poole
Campaign for America's Future
Truthout
January 21, 2012

Today is the two-year anniversary of the infamous Citizens United ruling by the Supreme Court that allowed corporations to spend unlimited amounts of money on political campaigns.

Since then, our democracy has been drowning in a tsunami of corporate special interest money. Our government is under the thumb of the Koch brothers and other corporate moguls instead of the hands of the people.

And citizens are uniting in their disgust. A poll released Thursday by Democracy Corps and the Public Campaign Action Fund, an organization that is rallying to counter the Citizens United ruling, said, "Americans across all parties oppose the ruling; among all voters, 62 percent oppose the decision and nearly half (46 percent) strongly oppose it. More than half of all voters say they would support a constitutional amendment to reverse the opinion."

Further, "Eight in ten voters say there is too much big money spent on political campaigns and elections today and that campaign contributions and spending should be limited." And the candidates who stand on the side of reining in corporate efforts to buy our political system will get more favor from voters than those who stand with the status quo.

The ultimate solution is getting two-thirds of the states to pass a constitutional amendment that declares what everyone except Mitt Romney seems to understand: corporations are not people and money is not speech. But that will take time.

That's why a coalition of organizations fighting Citizens United that includes the Campaign for America's Future, institutional investors managing a combined total of $800 billion in assets, public officials, legal scholars, good government groups and CEOs, is pushing the one thing ordinary people can do right now to begin to address the problem: Force publicly traded corporations to disclose their now-secret political contributions.

Show your support by signing this petition. It calls on the Securities and Exchange Commission to issue a ruling that requires all publicly traded corporations to disclose their campaign spending to the public, in response to this filing by coalition members last summer.

Today, corporate executives of publicly traded companies don’t have to tell the public, or even their shareholders, when they use corporate money to fund political campaigns.

Robert Jackson, law professor at Columbia University who is an expert on campaign finance spending, explained during a media briefing Thursday how a flawed assumption by the Supreme Court helped set up the Citizens United disaster.

"The Supreme Court assumed there was a robust series of disclosure requirements that would allow markets to work by letting investors know when their money was being spent on politics. We were dismayed to see the Supreme court make that assumption because it is simply not the case."

Sen. Robert Menendez, D-N.J., said at that same briefing that he and 13 Senate colleagues have sent a letter to the SEC calling for public disclosure of campaign spending.

"That is the least that we should be doing to remedy the problems caused by Citizens United," he said.

"The bottom line is very simple. We need to know who is spending millions of dollars to influence American elections right now." The fact that we don't, he added, is "pretty unconscionable."

The shareholders of a corporation have right to know how their money is being used, and to judge whether the best interests of the corporation are being served. And the public has a right to know who is trying to buy our political process, and for what reason.

We don't know who will be laundering hundreds of millions of dollars into "superPACs" and through such corporate lobbying groups as the U.S. Chamber of Commerce. And we should.

Getting the SEC to pull back the curtain covering up corporate campaign cash is one concrete thing we can to today, and it would be a big first step toward taking our democracy back.

We’ve seen the damage that secret campaign cash can do in the 2010 midterm elections. We’re seeing the havoc that secret “Super PAC” money is wreaking on the Republican presidential race. And we shudder to think what is going to happen in the general election.

Let's not wait to find out. Tell the SEC: No more secret political money. Make all publicly traded corporations disclose their campaign spending to the public.

Source:
http://www.truth-out.org/citizens-united-tsunami-secret-corporate-campaign-cash-drowning-our-democracy/1327156427
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2012-01-18T07:56:00.004-05:00

Millions of Americans oppose SOPA and PIPA because these bills would censor the Internet and slow economic growth in the U.S.

Two bills before Congress, known as the Protect IP Act (PIPA) in the Senate and the Stop Online Piracy Act (SOPA) in the House, would censor the Web and impose harmful regulations on American business. Millions of Internet users and entrepreneurs already oppose SOPA and PIPA.

The Senate will begin voting on January 24th. Please let them know how you feel. Sign this petition urging Congress to vote NO on PIPA and SOPA before it is too late.

https://www.google.com/landing/takeaction/sopa-pipa/

STOP SOPA

http://news2umedia.blogspot.com/2011_12_01_archive.html#55969514831571283
http://onecandleinthedark.blogspot.com
http://www.cbsyousuck.com
http://www.justart.net

A rapidly growing community

Opposition to the Protect IP Act (PIPA) and the Stop Online Piracy Act (SOPA) grows with each day. This brief list is just a sampling of businesses. Visit the Center for Democracy and Technology’s list for a more complete look at the individuals, organizations, experts and legislators that know how bad this legislation could be.

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2012-01-10T20:21:00.000-05:00

The Rise of the American Oligarchy

Pity the Billionaire

By Michael Kinsley
The New York Times
Book Review
Jan. 6, 2012

Thomas Frank is the thinking person’s Michael Moore. If Moore, the left-wing filmmaker, had Frank’s Ph.D. (in history from the University of Chicago), he might produce books like this one and Frank’s previous best seller, “What’s the Matter With Kansas?”

As you can tell from its ham-fisted title, “Pity the Billionaire” is not the world’s most subtle political critique.

But subtlety isn’t everything. Frank’s best moments come when his contempt boils over and his inner grouch is released.

This book is Frank’s interpretation of developments since “What’s the Matter With Kansas?” was published eight years ago. Frank’s thesis here is basically that the thesis of the old book has been confirmed. He will not persuade anybody who does not already buy the Tom Frank line. But those who do (as I do, more or less) will enjoy a very good time having their predispositions massaged.

Frank sometimes writes in an arch voice that seemed familiar when I first encountered it but that I couldn’t place. Then I read in his book-jacket bio that he writes for Harper’s Magazine, and I thought, “Zounds, Watson, the man may have Lapham’s Disease.” The symptoms of this malady, named after the longtime editor of Harper’s, Lewis H. Lapham (now of Lapham’s Quarterly), include an elevated, orotund, deeply ironic prose style that, in severe cases, reveals almost nothing about what the topic is or what the author wishes to say about it except for a general sense of superiority to everyone and everything around.

Fortunately, Frank’s case is very mild. What he retains is a healthy refusal to be intimidated by charges of “elitism.” He’s not afraid to give his chapters titles like “Mimesis.” (I looked it up. It’s a good joke.) He says of some right-wing nut who enjoyed 15 seconds of YouTube fame that he possessed “an understanding of German history that bordered on complete fantasy.” His message to liberals is: Oh, for heaven’s sake, don’t be so defensive!

The other side (Republicans, financiers, business executives, billionaires) has most of the economic — and therefore political — power. Today’s conservatives wield reverse snobbery as a weapon, accusing liberals of sins like living on the East or West Coast. Frank mocks conservatives’ claims that they are victims of an all-powerful liberal establishment. He calls this “tearful weepy-woo.”

Meanwhile, things have gone from bad to worse. Conservatives continue their Sherman’s march through the landmarks of liberal government, burning and looting as they go. They’ve gone after the legacies of Lyndon Johnson (Medicare), Franklin Roosevelt (Social Security; financial regulation) and Theodore Roosevelt (environmentalism). And working people continue to be duped into supporting measures manifestly against their own self-interest. In “What’s the Matter With Kansas?” Frank attributed this to a clever bait-and-switch by conservatives, who appeal to middle- and lower-class voters on the basis of social issues like abortion and gays in the military, and values like patriotism and religion. And then they govern on the agenda of traditional Republican groups like businessmen and bankers.

With “Pity the Billionaire,” the emphasis is different and the explanation is simpler: President Obama has betrayed the voters who elected him. He ran like a populist, Frank believes, but he has governed like a plutocrat, or at least a friend of plutocrats. Frank quotes a remarkable passage from Obama’s book “The Audacity of Hope” about “people of means” whom he met at Democratic fund-raisers:

“As a rule they were smart, interesting people, knowledgeable about public policy, liberal in their politics, expecting nothing more than a hearing . . . in exchange for their checks. But they reflected, almost uniformly, the perspectives of their class. . . . They believed in the free market and an educational meritocracy. . . . They had no patience with protectionism, found unions troublesome and were not particularly sympathetic to those whose lives were upended by the movements of global capital. Most were adamantly pro-choice and anti-gun and were vaguely suspicious of deep religious sentiment.”

Obama goes on to admit that by hanging around with these people, he was becoming “more like” them, and Frank — refusing to plea-bargain this stunning confession for a milder sentence — agrees, then piles on.

It seems to me that a Democratic president who gets us health care reform and tough new financial protection for consumers, who guides the economy through its roughest period in 80 years with moderate success (who could do better?), who ends our long war in Iraq and avenges the worst insult to our sovereignty since Pearl Harbor (as his Republican predecessor manifestly failed to do, despite a lot of noise and promises); a president who faced an opposition of really spectacular intransigence and downright meanness; a president who has the self-knowledge and wisdom about Washington to write the passage quoted above, and the courage to publish it: that president deserves a bit more credit from the left than Frank is willing to give him.

Frank may also be a bit overly impressed by what the right has achieved. Evelyn Waugh complained that the British Conservative Party had failed to turn back the clock by a single second. Have the Republicans done much better? (Waugh was speaking long before the Margaret Thatcher revolution, which really did change British society enormously.) Conservatives have dominated the debate, and usually the government, for three decades now, yet they haven’t managed to abolish a single cabinet department or eliminate a single major entitlement program.

Nothing big has been “privatized.” Somehow or other, against all expectations and despite a conservative Supreme Court, abortion rights and affirmative action have been preserved. Gay rights are advancing so fast that the Republican Party itself is probably ahead of where Democrats were a generation ago. The Constitution has not been amended to require a balanced budget or forbid flag-burning.

True, they’ve pretty much killed the union movement. While they are not to blame for the effects of globalization and technology on income distribution, they’ve done nothing to mitigate these. And then there are tax cuts — especially tax cuts for the wealthy. That we have had. In spades. Actually, all this tends to confirm Frank’s contention that what Republicans really care about, politically, is money, and all that other stuff is just prole meat.

Frank dates the discovery by conservatives that they are being oppressed by a liberal elite all the way back to 2010, when The American Spectator magazine published an article by Angelo Codevilla called “America’s Ruling Class.” I believe that, in fact, the funhouse-mirror class war (in which liberals and poor people are the upper class and billionaires are among the oppressed masses) has been going on longer than that — at least since Nixon’s “silent majority.” (The man was president, but he still felt oppressed.)

But then Frank, as a liberal elitist, has a touching belief in the influence of words. He believes a magazine article can change the world. He quotes from obscure books and pamphlets he has picked up as if each one had been read by everyone in the Tea Party.

The two great antiheroes of “Pity the Billionaire” are Ayn Rand and Glenn Beck. You might say that Frank is intrigued by Beck, or you might say he is obsessed. He is like an intellectual stalker, following Beck around as he attends to his empire of projects, making sure we don’t miss a single lie or absurdity. Beck is influential, and he was enjoying his 15 minutes when Frank was writing this book.

But is he more influential than any other radio talk-show host? I’d put my money on Rush. Or how about Grover Norquist, whose ability to pressure members of Congress into supporting his agenda is like nothing since “Red Channels” (the McCarthy-era publication that maintained the blacklist)?

Frank spends 11 out of 187 pages (before the endnotes) in this short book on an entertaining deconstruction of Ayn Rand’s masterwork, “Atlas Shrugged.” “For me,” Frank writes, “it is the political flimflam of our times wrapped up in one big package: the manifesto of the deregulators and free marketeers who caused the economic disaster.” “Atlas Shrugged” is certainly a ridiculous book, and a good illustration of the absurd self-pity of the rich that Frank so deftly skewers in “Pity the Billionaire.” But the notion that this 1,000-page novel about the breakdown of society due to a corrupt government plays any role in, say, the debate over “cap and trade” seems far-fetched.

This is not a book about policy, and Frank shouldn’t be expected to have a 10-point program for reforming the Federal Reserve Board before he allows himself a sarcastic reference to Ben Bernanke. But when he casually uses phrases like “deregulators and free marketeers” to define the bad guys, it does give one pause. For Frank, are government regulations ever excessive? Does he see no merit at all in free trade?

Frank surely doesn’t oppose free-market capitalism as a general principle, however much he may dislike Glenn Beck. Or does he? It would have been nice to know a bit more about where Thomas Frank is coming from. Otherwise, he starts to sound like those Tea Party people whom he rightly mocks for being very, very angry with no idea why or what to do about it.

Michael Kinsley is a columnist for Bloomberg View.

PITY THE BILLIONAIRE
The Hard-Times Swindle and the Unlikely Comeback of the Right
By Thomas Frank
225 pp. Metropolitan Books/Henry Holt & Company. $25

Source:
http://www.nytimes.com/2012/01/08/books/review/pity-the-billionaire-by-thomas-frank-book-review.html
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2012-01-07T14:08:00.000-05:00

Have the Super-Rich Seceded from the United States?

The Joke is on the Rest of Us

by Mike Lofgren
Counterpunch
January 05, 2012

It was in 1993, during congressional deliberation over the North American Free Trade Agreement. I was having lunch with a staffer for one of the rare Republican members of Congress who opposed the policy of so-called free trade.

I distinctly remember something my colleague said: “The rich elites of this country have far more in common with their counterparts in London, Paris, and Tokyo than with their own fellow American citizens.”

That was just the beginning of the period when the realities of outsourced manufacturing, financialization of the economy, and growing income disparity started to seep into the public consciousness, so at the time it seemed like a striking and novel statement.

At the end of the cold war many writers predicted the decline of the traditional nation state. Some looked at the demise of the Soviet Union and foresaw the territorial state breaking up into statelets of different ethnic, religious, or economic compositions.

This happened in the Balkans, former Czechoslovakia, and Sudan. Others, like Chuck Spinney, predicted a weakening of the state due to the rise of Fourth Generation Warfare, and the inability of national armies to adapt to it. The quagmires of Iraq and Afghanistan lend credence to that theory.

There have been hundreds of books about globalization and how it would break down borders. But I am unaware of a well-developed theory from that time about how the super-rich and the corporations they run would secede from the nation state.

I do not mean secession in terms of physical withdrawal from the territory of the state, although that happens occasionally. It means a withdrawal into enclaves, a sort of internal immigration, whereby the rich disconnect themselves from the civic life of the nation and from any concern about its well-being except as a place to extract loot.

Our plutocracy now lives like the British in colonial India: in the place and ruling it, but not of it. If one can afford private security, public safety is of no concern; if one owns a Gulfstream jet, crumbling bridges cause less apprehension – and viable public transportation doesn’t even show up on the radar screen. With private doctors on call, who cares about Medicare?

To some degree the rich have always secluded themselves from the gaze of the common herd; for example, their habit for centuries has been to send their offspring to private schools. But now this habit is exacerbated by the plutocracy’s palpable animosity towards public education and public educators, as Michael Bloomberg has demonstrated.

To the extent public education “reform” is popular among billionaires and their tax-exempt foundations, one suspects it is as a lever to divert the more than one-half trillion dollars in federal, state, and local education dollars into private hands, meaning themselves and their friends.

A century ago, at least we got some attractive public libraries out of Andrew Carnegie. Noblesse oblige like Carnegie’s is presently lacking among our seceding plutocracy.

In both world wars, even a Harvard man or a New York socialite might know the weight of an army pack. Now the military is for suckers from the laboring classes whose subprime mortgages you just sliced into CDOs and sold to gullible investors in order to buy your second Bentley or rustle up the cash to employ Rod Stewart to perform at your birthday party.

Courtesy of Matt Taibbi, we learn that the sentiment among the super-rich towards the rest of America is often one of contempt rather than noblesse; Bernard Marcus, co-founder of Home Depot, says about the views of the 99 percent: “Who gives a crap about some imbecile?”

Steven Schwarzman, the hedge fund billionaire CEO of the Blackstone Group who hired Rod Stewart for his $5-million birthday party, believes it is the rabble who are socially irresponsible.

Speaking about low-income citizens who pay no income tax, he says: “You have to have skin in the game. I’m not saying how much people should do. But we should all be part of the system.”

But millions of Americans who do not pay federal income taxes pay federal payroll taxes. These taxes are regressive, and the dirty little secret is that over the last several decades they have made up a greater and greater share of federal revenues.

In 1950, payroll and other federal retirement contributions constituted 10.9 percent of all federal revenues; by 2007, the last “normal” economic year before federal revenues began falling, they made up 33.9 percent. By contrast, corporate income taxes were 26.4 percent of federal revenues in 1950; by 2007 they had fallen to 14.4 percent. Who has skin in the game now?

As is well known by now, Schwarzman benefits from the “Buffett Rule:” financial sharks typically take their compensation in the form of capital gains rather than salaries, thus knocking down their income tax rate from 35 percent to 15 percent.

But that’s not the only way Mr. Skin-in-the-Game benefits: the 6.2-percent Social Security tax and the 1.45-percent Medicare tax apply only to wages and salaries, not capital gains distributions.

Accordingly, Schwarzman is stiffing the system in two ways: not only is his income tax rate less than half the top marginal rate, he is shorting the Social Security system that others of his billionaire colleagues like Pete Peterson say is unsustainable and needs to be cut.

This lack of skin in the game may explain why Willard Mitt Romney is so coy about releasing his income tax returns. It would also make sense for someone with $264 million in net worth to joke that he is “unemployed,” as if he were some jobless sheet metal worker in Youngstown, when he is really saying in code that his income stream is not a salary subject to payroll deduction. The chances are good that his effective rate for both federal income and payroll taxes is lower than that of many a wage slave.

The real joke is on the rest of us.

After the biggest financial meltdown in 80 years – a meltdown caused by the type of rogue financial manipulation that Romney embodies – and a consequent long, steep drop in the American standard of living, who is the putative front-runner for one of the only two parties allowed to be competitive in American politics?

None other than Mitt Romney, the man who says corporations are people.

Opposing him, or someone like him, will be the incumbent president, Barack Obama, who will raise up to a billion dollars to compete in the campaign. Much of that loot will come from the same corporations, hedge fund managers, merger and acquisition specialists, and leveraged buyout artists the president will denounce in pro forma fashion during the campaign.

The super-rich have seceded from America even as their grip on its control mechanisms has tightened.

MIKE LOFGREN retired in June 2011 after 28 years as a Congressional staffer. He served 16 years as a professional staff member on the Republican staff of the House and Senate Budget Committees.

Source:
http://www.counterpunch.org/2012/01/05/have-the-super-rich-seceded-from-the-united-states/
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2012-01-03T22:44:00.001-05:00

Coastal villages in Nigeria protest as crude oil washes ashore

By msnbc.com and news services
Jan. 2, 2012

Nigerian villagers say oil washing up on the coast comes from a Royal Dutch Shell loading accident last month that caused the biggest spill in Africa's top producer in more than 13 years.

Shell denies that any of the oil is from its 200,000 barrel per day Bonga facility, 120 km offshore and accounting for 10 percent of monthly oil flows, which was shut down by the spill on Dec. 20.

Shell says five ships were used to disperse and contain the spill and that this kept any oil from washing ashore.

But local villagers, as well as environmental and rights groups, dispute this account, saying the oil is still at large, coating parts of the coast, killing fish and sparking protests.

On Saturday, a Reuters team visited two of 13 villages whose residents say they were affected by the spill in the steamy swamps of the Niger Delta. In both, there were stretches of beach coated in a film of black sludge with a rainbow tint.

Read Entire Article
http://worldnews.msnbc.msn.com/_news/2012/01/02/9890603-coastal-villages-in-nigeria-protest-as-crude-oil-washes-ashore
_________________

Uduaghan condemns Bonga oil spill, seeks remedial measures

By Austin Ogwuda
Vanguard
Jan. 4, 2012

ASABA—DELTA State Governor, Dr Emmanuel Uduaghan, yesterday, called on the Federal Government through its agencies, Nigerian Oil Spills Detection and Response Agency, NOSDRA, and Nigerian Maritime Administration and Safety Agency, NIMASA, to ensure that full remedial measures were taken to restore the environment and mitigate further damage resulting from the Bonga oil spill.

Lamenting the impact of the recent Bonga oil spill on some communities in Delta State and across the Niger Delta region, Uduaghan charged Shell Petroleum Development Corporation, to stop passing buck but give full disclosure of the impact and extent of damage of the spill.

Said he, “shortly before Christmas, it was reported that a blow out occurred leading to spill in the Bonga oil field. Recent events confirmed my fears that the spill had spread to the shores. Although Shell claims that its containment of the spill was successful, reports before me from communities indicate otherwise.

“My position is that this is not the time to avoid responsibility on this issue. Shell should step forward and follow the examples of BP, which had similar experience and acted responsibly. Delta State will follow closely what happens in those communities and demand that necessary action be taken to restore the environment back to the people.”

Adding that this was not the time for buck passing, as was gradually happening over the washing up of the spilled oil on the shores of the coastal communities, whose marine life and economic wellbeing are deeply threatened. Uduaghan said, he expected Shell to take steps to ensure adequate clean-up and compensation for the communities affected.

He dismissed claims by Shell that the spill was contained before spreading as not being supported by hard evidence of what was happening in Ogulaha, Beniboye and Okuntu in Delta State and Orobiri, Odiama and Aggeh communities in Bayelsa State, which had experienced the impact of the spilled oil.

He reminded Shell that BP took steps to act in cleaning up and compensated those affected by its large scale spill in the Gulf of Mexico two years ago and does not think the Niger Delta environment should be different.

Source:
http://www.vanguardngr.com/2012/01/uduaghan-condemns-bonga-oil-spill-seeks-remedial-measures/
__________________

Coastal pollution fears after Nigeria oil spill

Euro News
Jan. 2, 2012

Those living along Nigeria’s coastline said on Monday that officials are not doing enough to clean up last month’s deep sea oil spill. Thirteen coastal villages are thought to have been affected by the incident at Shell’s Bonga oil field on December 20th.

Environmental groups said local beaches have been coated with black sludge and drinking water has been polluted.Shell shut down its oil platform following the spill.The company denied that any of the oil has washed up on the coast.

An investigation is underway into how around 40,000 barrels of oil spilled while being loaded onto a tanker. Shell has admitted workers only discovered the leak after seeing a sheen of crude in the water.

A waiting tanker takes about 25 hours to be filled, which means the leak could have spewed for hours before being noticed. Shell’s pipelines in the area have spilled several times, which the company usually blames on sabotage attacks and rampant oil theft.

Source:
http://www.euronews.net/2012/01/02/coastal-pollution-fears-after-nigeria-oil-spill/
_____________________

2012-01-01T22:36:00.001-05:00

Court revives NSA dragnet surveillance case

By David Kravets
Wired.com
ArsTechnica
Dec. 30, 2011

A federal appeals court on Thursday reinstated a closely watched lawsuit accusing the federal government of working with the nation’s largest telecommunication companies to illegally funnel Americans’ electronic communications to the National Security Agency without court warrants.

While the 9th US Circuit Court of Appeals revived the long-running case brought by the Electronic Frontier Foundation, the three-judge panel unanimously refused to rule on the merits of the case, or whether it was true the United States breached the public’s Fourth Amendment rights by undertaking an ongoing dragnet surveillance program the EFF said commenced under the Bush administration following 9/11.

The San Francisco-based appeals court reversed a San Francisco federal judge who tossed the case against the government nearly three years ago. US District Judge Vaughn Walker, now retired, said the lawsuit amounted to a "general grievance" from the public, and not an actionable claim.

Walker also presided over the only case that found the Bush administration illegally spied on American citizens when it unleashed the NSA on Americans’ conversations, ruling that the government violated the rights of two American lawyers for al-Haramain, a now defunct Islamic charity. The government is appealing that ruling.

Writing for the majority on Thursday, Judge Margaret McKeown ruled (PDF) that the EFF’s claims "are not abstract, generalized grievances and instead meet the constitutional standing requirement of concrete injury. Although there has been considerable debate and legislative activity surrounding the surveillance program, the claims do not raise a political question nor are they inappropriate for judicial resolution."

The EFF’s allegations are based in part on internal AT&T documents, first published by Wired, that outline a secret room in an AT&T San Francisco office that routes internet traffic to the NSA.

"Today, the 9th Circuit has given us that chance, and we look forward to proving the program is an unconstitutional and illegal violation of the rights of millions of ordinary Americans," said Cindy Cohn, the EFF’s legal director.

But the appeals court also dealt EFF a blow.

In a separate opinion (PDF), the judges tossed the EFF’s lawsuit against the United States' largest telecoms, including AT&T—which the EFF accused of cooperating with the government’s warrantless surveillance program.

The appeals court sided with an act of Congress from July 2008, one voted for by then-Senator Barack Obama of Illinois, and then signed by President George W. Bush. The legislation handed the telcos retroactive immunity from being sued for allegedly participating in the surveillance program.

That led Judge Walker to toss the case against AT&T and others. The EFF contended on appeal that the legislation, which grants the president the power to grant immunity to the telcos, was an unlawful abuse of power.

The appeals court disagreed.

"By passing the retroactive immunity for the telecoms’ complicity in the warrantless wiretapping program, Congress abdicated its duty to the American people," EFF senior staff attorney Kurt Opsahl said. "It is disappointing that today’s decision endorsed the rights of telecommunications companies over those over their customers."

That said, the Bush administration, and now the Obama administration, have neither admitted nor denied the spying allegations — though Bush did admit that the government warrantlessly listened in on some Americans’ overseas phone calls, which he said was legal. But as to widespread internet and phone dragnet surveillance of Americans, both administrations have declared the issue a state secret—one that would undermine national security if exposed.

Toward that end, the federal appeals court sent the EFF’s case against the government back to the lower courts to determine whether it should be tossed on grounds that it threatens to expose state secrets. No court date has been set.

That lawsuit was filed immediately after Bush signed the immunity legislation for the telcos. The new lawsuit prompted the Obama administration to invoke the state secrets privilege—despite having announced he would limit his use of that doctrine at the beginning of his four-year term. Usually, lawsuits are dismissed when the government invokes the privilege.

Judge Walker wound up dismissing the revised lawsuit as a “general grievance” and did not rule on the state secrets claim.

Walker, however, did allow the al-Haramain case to proceed despite the feds’ invocation of the privilege—a rarity since courts are extremely deferential to the executive branch in matters of secrecy. The Supreme Court first fashioned the doctrine in a McCarthy-era lawsuit in a case where the government lied to the court to escape embarrassment and liability over an airplane crash.

Illustration by EFF

Source:

http://arstechnica.com/tech-policy/news/2011/12/court-revives-nsa-dragnet-surveillance-case.ars

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2011-12-27T12:43:00.002-05:00

Anonymous or Not?

Here are some interesting articles about the supposed Anonymous Stratfor hack this past weekend and the Anonymous response.

Read On, pay attention to the dates and claims.
________

Confidential client list safe from Anonymous, Stratfor says

The magnitude of a Christmas Eve attack on Stratfor appears exaggerated by the data bandits

By John P. Mello Jr.
Computer World

December 26, 2011

The damage from a weekend data breach at a think tank on international security issues appears to have been inflated by the assault's perpetrators, the hacker collective known as Anonymous.

After Anonymous ransacked think tank Stratfor's computers and stole away thousands of credit card numbers and other personal information, it claimed to have also clipped the company's confidential client list. That list contains sensitive information about Stratfor's high- profile clients, such as Apple, the U.S. Air Force, and the Miami Police Department.

However, Stratfor denies that Anonymous got the think tank's family jewels. "Contrary to this assertion the disclosure was merely a list of some of the members that have purchased our publications and does not comprise a list of individuals or entities that have a relationship with Stratfor beyond their purchase of our subscription-based publications," the firm says in an e-mail to its members dated December 25.

Further on in the article:

The Anonymous attack on Stratfor was made murkier by a disclaimer posted on the Internet saying the group isn't responsible for the action. In an "Emergency Christmas Anonymous Press Release" the Stratfor foray was rapped by parties claiming to represent the collective. They assert that Stratfor is being falsely characterized as another HBGary Federal, a contractor accused of developing dirty tricks schemes for the military. A cyber assault on HBGary Federal earlier this year resulted in its CEO, Aaron Barr, resigning.
"Sabu and his crew are nothing more than opportunistic attention whores who are possibly agent provocateurs," they declare, referring to a well-known Anonymous member.

Read Entire Article:
http://www.computerworld.com/s/article/9223025/Confidential_client_list_safe_from_Anonymous_Stratfor_says
____________________

Anonymous' Hackers Target U.S. Security Think Tank

Wall Street Journal
Technology

Dec. 27, 2011

The loose-knit computer-hacking group known as "Anonymous" claimed Sunday to have stolen thousands of credit-card numbers and other personal information belonging to clients of U.S.-based security think tank Stratfor.

One hacker said the goal was to pilfer funds from individuals' accounts to give away as Christmas donations, and some victims confirmed unauthorized transactions linked to their credit cards.

Anonymous boasted of stealing Stratfor's confidential client list, which includes entities ranging from Apple Inc. to the U.S. Air Force to the Miami Police Department, and mining it for more than 4,000 credit card numbers, passwords and home addresses.

Stratfor, based in Austin, Texas, provides political, economic and military analysis to help clients reduce risk, according to a description on its YouTube page. The company's main website was down, with a banner saying the "site is currently undergoing maintenance."

Read Entire Article:
http://online.wsj.com/article/SB10001424052970203479104577122811997424378.html
___________________

Anonymous Response to Stratfor Hack
___________________

Emergency Christmas Anonymous Press Release
-------------------------------------------
12/25/2011
THE STRATFOR HACK IS NOT THE WORK OF ANONYMOUS

Stratfor is an open source intelligence agency, publishing daily reports on data collected from the open internet. Hackers claiming to be Anonymous have distorted this truth in order to further their hidden agenda, and some Anons have taken the bait.

The leaked client list represents subscribers to a daily publication which is the primary service of Stratfor. Stratfor analysts are widely considered to be extremely unbiased. Anonymous does not attack media sources.
In this excerpt from Time, there is a brief description of how Stratfor analysts uncovered a possible US backed coup in Iraq preceding the US invasion.

"In the past month Stratfor has drawn attention to a carefully assembled open-source report that asserted that last month's attack on Iraq wasn't intended just to punish Saddam Hussein for blowing off U.N. weapons inspectors. By sorting through thousands of pieces of publicly available data--from Middle East newspapers to Iraqi-dissident news--Stratfor analysts developed a theory that the attacks were actually designed to mask a failed U.S.-backed coup. In two striking, contrarian intelligence briefs released on the Internet on Jan. 5 and Jan. 6, Stratfor argued that Saddam's lightning restructuring of the Iraqi military, followed by executions of the army's Third Corps commanders, was evidence that the coup had been suppressed. Predictably, U.S. officials said the report was wrong."

Stratfor has been purposefully misrepresented by these so-called Anons and portrayed in false light as a company which engages in activity similar to HBGary. Sabu and his crew are nothing more than opportunistic attention whores who are possibly agent provocateurs. (Sabu & Anon have been at odds for some time. Ed)

As a media source, Stratfor's work is protected by the freedom of press, a principle which Anonymous values greatly.

This hack is most definitely not the work of Anonymous.

We are Anonymous
We do not forgive
We do not forget
Expect us

Source:
http://pastebin.com/8yrwyNkt
________________

2011-12-21T08:23:00.002-05:00

Rehypothecation Is An Old Story
MF Global's Story Is a Different Story of Filched Funds

Huffington Post
Dec. 16, 2011

Yesterday Congress held another hearing on MF Global. One representative seemed to suggest that MF Global's movement of money to the UK may have somehow been allowable under Rule 1.25. It was as if a Member of Congress had become Corzine's PR flack, an apologist for Corzine, and was trying to create a false excuse for Corzine. Jon Corzine has been a big Congressional fundraiser and bundler, and it is interesting to see how cheaply some Members of Congress can be bought.

Rule 1.25 wouldn't allow investment in foreign sovereign debt for U.S. dollar accounts, and even if it did, the accounts' assets must be segregated. Rule 1.25 does not allow anyone to filch funds from customers' accounts.

Accounts at MF Global are missing money and have no corresponding asset entries. There is a shortfall of an estimated $600 million to $1.2 billion.

Congress keeps asking how we can prevent this in the future, and I have an answer for them. Run firms with honest people that can reasonably explain the workings of their business to other honest and reasonable men. Reasonable explanations took a holiday from the Congressional hearings.

CFTC Commissioner Jill Sommers did a good job of explaining MF Global's problem in earlier testimony. The cases in which investment in foreign sovereign debt for customers' own accounts are limited to the extent of their foreign exchange deposits (so a small minority of accounts), and it is never allowable to transfer money out of the customer accounts to commingle with MF's investments.

Lies, Cover-ups, and Rubber Checks While Corzine Headed MF Global

The behavior of some Members of Congress is disgraceful because so many honest people were cheated. Here's just one example. While Jon Corzine still headed MF Global, customers requested wire transfers of their money, but MF Global stalled, rubber checks were written and sent to customers, and the checks bounced.

Yet on November 1 while Corzine still headed the firm, Kenneth Ziman, a lawyer for MF Global, relayed information from MF Global to U.S. Bankruptcy judge Martin Glenn in Manhattan: "To the best knowledge of management, there is no shortfall." That wasn't the truth.

"According to a U.S. official, MF Global admitted to federal regulators early Monday [October 31, 2011] that money was missing from customer accounts. MF Global acknowledged a shortfall in a phone call amid mounting questions from regulators as they went through the firm's books." ("MF Global's Collapse Draws FBI Interest," by Devlin Barrett, Scott Patterson, and Mike Spector, WSJ, November 2, 2011.)

We bailed out large failed financial institutions with invisible support amounting trillions of taxpayer dollars and visible support amounting to billions of taxpayer dollars. Hardworking farmers and others that had accounts with MF Global have been left to twist in the wind. Innocent reputations and businesses have been damaged due to MF Global's shortfall.

Filched Funds

We already know for a fact that many US dollar accounts were not intact. Money was missing and there were no asset entries as was required. There's not enough perfume to make this pig smell good. At issue is MF Global's use of segregated customer funds and commingling of segregated customer assets to cover its own shortfall.

Another Potential Crime: Did MF Global Misrepresent Source of Funds to the Fed?

Why did the Fed award prestigious primary dealer status to shaky MF Global, an entity it doesn't regulate and for which it doesn't provide surveillance? Did MF Global subsequently make misrepresentations to the Fed?

MF Global's financials and risk management procedures were shaky ever since Man Group spun it off in 2005 and saddled it with a lot of debt. In fact, in August of 2011, MF Global settled a lawsuit for misrepresentation of the quality of its risk management procedures. Yet MF Global was added to the Fed's list of 22 primary dealers in February 2011, less than one year after former Goldman CEO Jon Corzine came on board. Primary dealers buy and sell U.S. treasuries at auction and are a counterparty to the Fed's Open Market operations.

William C. Dudley is the president and chief executive officer of the FRBNY. He is also vice chairman of the Federal Open Market Committee (FOMC) and VP of the Markets Group, which oversees open market and foreign exchange trading operations and provisions of account services to foreign central banks and manages the System Open Market Account. Dudley is a former partner at Goldman Sachs (1986-2007), and he was Goldman's chief economist.

The biggest benefit to primary dealers is the perception that they are protected by a Fed safety net. This belief is based on precedence, since the Fed has already provided funding to primary dealers during a systemic liquidity crunch. Just before Bear Stearns imploded, the Fed changed the rules so that non-U.S. banks, along with brokers that were primary dealers (as MF Global was), were allowed to borrow through a program called a Term Securities Lending Facility (TSLF) to finance mortgage backed securities, asset backed securities, and more. TSLF's start date was too late to help Bear Stearns, and the program has now been discontinued, but the precedence has been set.

As MF Global's financial condition deteriorated in September and October, MF Global was required to increase its reserves to cover potential Fed losses if MF Global went under, as it eventually did. In Congressional testimony yesterday, New York Fed General counsel Thomas Baxter testified that MF Global said that money posted to the Fed did not come from customers' accounts, and MF Global gave those representations to the Fed in writing. Baxter testified: "If that representation turns out to be false, a federal criminal offense has been committed."

This will be up to investigators to determine, however, since there is no public evidence. Nonetheless, it raises disturbing questions as to why the Fed awarded primary dealer status to an operation like MF Global in the first place.

CME Head Terry Duffy: Under Corzine, Inaccurate Report Kept Regulators in the Dark

Throughout the Congressional hearings, Jon Corzine kept testifying as to how he had no explanation or even expert opinions on what happened at MF Global. He often referred to the fact that he's no longer with MF Global or that events happened after he left. Terry Duffy testified to events that happened under Jon Corzine's leadership:

CFTC and CME staff and auditors returned to the firm on Sunday, Oct. 30, and were informed by this discrepancy was caused by "an accounting error." Our auditors, working with the CFTC, devoted the rest of the day and night, to find the so-called "accounting error." No such error was found.

Instead, at about 2 a.m. Monday morning, Oct. 31, MF Global informed both the CFTC and CME that the shortfall was real and that customer segregated funds had been transferred out of segregation to the firm's broker dealer accounts.

After receiving this information, CME remained at MF Global while (the firm) attempted to identify funds that could be transferred into segregation to reduce or eliminate the discrepancy.

A CME auditor also participated in a phone call with senior MF Global employees, wherein one employee indicated that Mr. Corzine knew about the loans made from the segregated accounts."

[On Monday, October 31] MF Global revised its segregation report for Thursday, Oct. 27, indicating that the alleged $200 million in excess segregated funds should have been reported as a deficiency of $200 million. This shortfall on segregation on Thursday, Oct. 27, was hidden by the inaccurate report, a telling sign to keep regulators in the dark.

It remains to be seen whether this failure to disclose permitted additional segregated funds to be improperly transferred.

Throughout this time, the firm and its employees were under the direction and control of MF Global management. Transfers of customer funds effectuated by MF Global for the benefit (of the firm) constitute very serious violations of our rules and of CFTC regulations.

A very good summary of Terry Duffy's testimony and its implications can be found at National Hog Farmer. It provided the best early financial coverage on this topic.

Allowable Rehypothecation: Problematic, But A Different Problem Than MF Global's

There has been a lot of misinformation about rehypothecation, and old term that seems to have been newly rediscovered by bloggers. To be clear, allowable rehypothecation is not the dark question that has been raised about MF Global. Filching funds as I described above is illegal. Writing rubber checks is illegal.

My favorite rehypothecation story involves Henry Jarecki, then head of Mocatta Metals and current head of Gresham Partners LLC. I'm sure he'll tell the story better and give you more details than I. But here is the basic story, and it is a parable of this problematic but legal practice.

Around 1979, Mocatta Metals owned 30 million ounces of silver that Jarecki leased to industrial users. He was long silver outside the exchanges, and he hedged by being short silver on the exchanges using futures contracts. But all the price action was on the exchanges where prices were soaring. Jarecki used cash to meet margin calls. People started getting nervous and rumors circulated, because most people were unaware he owned a huge silver position.

Meanwhile, the Hunts had borrowed $50 million from Mocatta to buy more silver and had deposited 10.7 million ounces with Mocatta as collateral for the loan. Jarecki rehypothecated the Hunts' silver, meaning he used it as collateral for his own borrowing. This wasn't prudent, but it was definitely legal. After the Hunts posted the silver as collateral with Mocatta, the price of silver tripled. The Hunts were nervous after hearing the rumors about the cash margin calls for Mocatta's futures hedges, and they showed up in Henry Jarecki's office in a very bad mood.

The Hunts knew the value of their collateral at then market prices far exceeded the cash value of their loan, and they wanted the loan size increased so they could buy more silver. Jarecki agreed to a bigger loan, but the increase wasn't big enough increase to satisfy the Hunts, who became suspicious that Jarecki was in financial trouble. The Hunts then said they wanted to prepay the loan and take back their silver. Jarecki responded that the loan terms didn't allow for early repayment. Now the Hunts were afraid and angry.

If Jarecki had to buy the Hunts silver in the open market or if he had to cancel his futures trades with no offset to meet the Hunts' demands, it would have created a liquidity crisis for Mocatta. Instead, Jarecki solved everyone's problems. He arranged an exchange of futures for physicals (an EFP to cancel out his and the Hunts' futures positions in exchange for a special agreement on the silver) and sold the Hunts 23 million ounces of silver for cash at what was then the top of the silver market.

Honest People Don't Look for Malicious Loopholes

At all times the Hunts had cash in exchange for their assets, there was a full accounting, and Mocatta metals was good for its obligations. In fact, Mocatta metals immediately satisfied the Hunts' demands. Even better, it sold the Hunts more silver, which the Hunts wanted. Honest people don't exploit customers by citing malicious loopholes, they come up with creative solutions to more than satisfy customers.

Mocatta used creativity to prevent a liquidity crunch. Even in its best form, rehypothecation can create a liquidity crisis and panic due to the basis risk. Mocatta averted that and everyone was satisfied. It's poetic justice that Mocatta was also lucky in its timing in the silver market.

But as I said at the outset, allowable rehypothecation is not what has everyone up in arms about the missing money at MF Global.

See: "MF Global Revelations Keep Getting Worse," Huffington Post, November 22, 2011, and "Jon Corzine Dodges the Fraud Question," Huffington Post, December 9, 2011. For more on the history of the Hunt's attempt to corner the silver market, I recommend The Great Silver Bubble, by Stephen Fay, Coronet Books, 1983.

Source:
http://www.huffingtonpost.com/janet-tavakoli/rehypothecation-is-an-old_b_1153378.html
_______________________

2011-12-14T07:30:00.002-05:00

Solar Power Much Cheaper to Produce Than Most Analysts Realize, Study Finds

By Joe Romm
Nation of Change
Dec. 11, 2011

The public is being kept in the dark about the viability of solar photovoltaic energy, according to a study conducted at Queen’s University.

“Many analysts project a higher cost for solar photovoltaic energy because they don’t consider recent technological advancements and price reductions,” says [co-author] Joshua Pearce, Adjunct Professor, Department of Mechanical and Materials Engineering. “Older models for determining solar photovoltaic energy costs are too conservative.”

Dr. Pearce believes solar photovoltaic systems are near the “tipping point” where they can produce energy for about the same price other traditional sources of energy.

That’s the news release for a new journal article, “A review of solar photovoltaic levelized cost of electricity” (subs. req’d). The analysis concludes:

Given the state of the art in the technology and favourable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.

That argument is one Climate Progress and others have been making for a while (see ‘Ferocious Cost Reductions’ Make Solar PV Competitive and Utility CEO on Solar: In “3 to 5 Years You’ll Be Able to Get Power Cheaper from the Roof of Your House Than From the Grid”.)

Here’s more for the news release (plus some more must-have CP charts):
Analysts look at many variables to determine the cost of solar photovoltaic systems for consumers, including installation and maintenance costs, finance charges, the system’s life expectancy, and the amount of electricity it generates.

Dr. Pearce says some studies don’t consider the 70 per cent reduction in the cost of solar panels since 2009 . Furthermore, he says research now shows the productivity of top-of-the-line solar panels only drops between 0.1 and 0.2 percent annually, which is much less than the one per cent used in many cost analyses.

Equipment costs are determined based on dollars per watt of electricity produced. One 2010 study estimated this cost at $7.61, while a 2003 study set the amount at $4.16. According to Dr. Pearce, the real cost in 2011 is under $1 per watt for solar panels purchased in bulk on the global market, though he says system and installation costs vary widely.

Solar is ready for its close up now.
For more, see Anatomy of a Solar PV System: How to Continue “Ferocious Cost Reductions” for Solar Electricity:

(Chart from Emanuel Sachs of MIT. Note: Even this data is already two years old.)

All rights are reserved.
This article was published at NationofChange at:
http://www.nationofchange.org/solar-power-much-cheaper-produce-most-analysts-realize-study-finds-1323623695
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2011-12-10T12:01:00.007-05:00

Do You Know What Laws are Being Enacted in Your Name?

Anonymous
First seen on YouTube

In recent months the Press and Occupy protesters have had their first amendment rights infringed upon, as members of the House and Senate continue efforts to subvert the Constitutional Rights of it's US Citizens.

The National Defense Authorization Act threatens to declare the United States a war zone and allow indefinite detention of any US Citizen the government deems a threat, even the Press and Occupy protesters.

The National Defense Authorization Act passed the U.S. Senate with 93 Yay votes and only 7 Nay votes, the bill was sent back to the House and is now known as H.R.1540, it is being sponsored by Rep. Howard P. McKeon and co-sponsored by Rep. Adam Smith.

Your First Amendment liberties are also being threatened by the Stop Online Piracy Act, a deceptively named bill that would allow the Attorney General to censor viral communication (Twitter, SMS, email) and shut down access to media on the internet.

There is no way for this bill to stop online piracy, as those who pirate data would easily be able to easily hide the location of foreign piracy havens.

However the bill is worded in such a way that live feeds and other media can be shut down by the U.S. Government on the mere suspicion of displaying copyrighted material, even music playing in the background could provide sufficient excuse to shut down independent media. The bill was introduced by Representative Lamar Smith and has recieved broad bi-partisan support.

The Protect IP Act introduced by Senator Patrick Leahy proves a similar threat to free speech, and has received similar bi-partisan support.

In addition to these gross attempts to censor personal liberty, Mayors and Police Chiefs across America have issued illegal orders in violation of First Amendment liberties to suppress peacefully assembled protesters.

The number of crimes being committed against U.S. Citizens and the destruction of the U.S. Constitution exceeds the scope of any one group to deal with in a timely manner. If you value your civil liberties you must defend them.

Roll Call Votes on the National Defense Authorization Act

Alabama
Yea AL Sessions, Jefferson [R]
Yea AL Shelby, Richard [R]

Alaska
Yea AK Begich, Mark [D]
Yea AK Murkowski, Lisa [R]

Arizona
Yea AZ Kyl, Jon [R]
Yea AZ McCain, John [R]

Arkansas
Yea AR Boozman, John [R]
Yea AR Pryor, Mark [D]

California
Yea CA Boxer, Barbara [D]
Yea CA Feinstein, Dianne [D]

Colorado
Yea CO Bennet, Michael [D]
Yea CO Udall, Mark [D]

Connecticut
Yea CT Blumenthal, Richard [D]
Yea CT Lieberman, Joseph [I]

Delaware
Yea DE Carper, Thomas [D]
Yea DE Coons, Chris [D]

Florida
Yea FL Nelson, Bill [D]
Yea FL Rubio, Marco [R]

Georgia
Yea GA Chambliss, Saxby [R]
Yea GA Isakson, John [R]

Hawaii
Yea HI Akaka, Daniel [D]
Yea HI Inouye, Daniel [D]

Idaho
Yea ID Crapo, Michael [R]
Yea ID Risch, James [R]

Illinois
Yea IL Durbin, Richard [D]
Yea IL Kirk, Mark [R]

Indiana
Yea IN Coats, Daniel [R]
Yea IN Lugar, Richard [R]

Iowa
Yea IA Grassley, Charles [R]
Nay IA Harkin, Thomas [D]

Kansas
Yea KS Moran, Jerry [R]
Yea KS Roberts, Pat [R]

Kentucky
Yea KY McConnell, Mitch [R]
Nay KY Paul, Rand [R]

Louisiana
Yea LA Landrieu, Mary [D]
Yea LA Vitter, David [R]

Maine
Yea ME Collins, Susan [R]
Yea ME Snowe, Olympia [R]

Maryland
Yea MD Cardin, Benjamin [D]
Yea MD Mikulski, Barbara [D]

Massachusetts
Yea MA Brown, Scott [R]
Yea MA Kerry, John [D]

Michigan
Yea MI Levin, Carl [D]
Yea MI Stabenow, Debbie Ann [D]

Minnesota
Yea MN Franken, Al [D]
Yea MN Klobuchar, Amy [D]

Mississippi
Yea MS Cochran, Thad [R]
Yea MS Wicker, Roger [R]

Missouri
Yea MO Blunt, Roy [R]
Yea MO McCaskill, Claire [D]

Montana
Yea MT Baucus, Max [D]
Yea MT Tester, Jon [D]

Nebraska
Yea NE Johanns, Mike [R]
Yea NE Nelson, Ben [D]

Nevada
Yea NV Heller, Dean [R]
Yea NV Reid, Harry [D]

New Hampshire
Yea NH Ayotte, Kelly [R]
Yea NH Shaheen, Jeanne [D]

New Jersey
Yea NJ Lautenberg, Frank [D]
Yea NJ Menendez, Robert [D]

New Mexico
Yea NM Bingaman, Jeff [D]
Yea NM Udall, Tom [D]

New York
Yea NY Gillibrand, Kirsten [D]
Yea NY Schumer, Charles [D]

North Carolina
Yea NC Burr, Richard [R]
Yea NC Hagan, Kay [D]

North Dakota
Yea ND Conrad, Kent [D]
Yea ND Hoeven, John [R]

Ohio
Yea OH Brown, Sherrod [D]
Yea OH Portman, Robert [R]

Oklahoma
Nay OK Coburn, Thomas [R]
Yea OK Inhofe, James [R]

Oregon
Nay OR Merkley, Jeff [D]
Nay OR Wyden, Ron [D]

Pennsylvania
Yea PA Casey, Robert [D]
Yea PA Toomey, Patrick [R]

Rhode Island
Yea RI Reed, John [D]
Yea RI Whitehouse, Sheldon [D]

South Carolina
Yea SC DeMint, Jim [R]
Yea SC Graham, Lindsey [R]

South Dakota
Yea SD Johnson, Tim [D]
Yea SD Thune, John [R]

Tennessee
Yea TN Alexander, Lamar [R]
Yea TN Corker, Bob [R]

Texas
Yea TX Cornyn, John [R]
Yea TX Hutchison, Kay [R]

Utah
Yea UT Hatch, Orrin [R]
Nay UT Lee, Mike [R]

Vermont
Yea VT Leahy, Patrick [D]
Nay VT Sanders, Bernard [I]

Virginia
Yea VA Warner, Mark [D]
Yea VA Webb, Jim [D]

Washington
Yea WA Cantwell, Maria [D]
Yea WA Murray, Patty [D]

West Virginia
Yea WV Manchin, Joe [D]
Yea WV Rockefeller, John [D]

Wisconsin
Yea WI Johnson, Ron [R]
Yea WI Kohl, Herbert [D]

Wyoming
Yea WY Barrasso, John [R]
Yea WY Enzi, Michael [R]

List of companies supporting (SOPA) :

* Adobe http://www.adobe.com/
* Apple http://www.apple.com/
* Autodesk http://usa.autodesk.com/
* AVEVA http://www.aveva.com/
* AVG http://free.avg.com/ww-en/homepage
* Bentley Systems http://www.bentley.com/en-US/
* CA http://www.ca.com/us/default.aspx
* Cadence Design Systems http://www.cadence.com/
* CNC Software - Mastercam http://www.mastercam.com/
* Compuware http://www.compuware.com/
* Corel http://www.corel.com/
* Dassault Systèmes SolidWorks Corporation http://www.solidworks.com/
* Dell http://www.dell.com/
* Intel http://www.intel.com/content/www/us/en/homepage.html
* Intuit http://www.intuit.com/
* Kaspersky http://www.kaspersky.com/
* McAfee http://www.mcafee.com/us/
* Microsoft http://www.microsoft.com/en-us/default.aspx
* Minitab http://www.minitab.com/en-US/default.aspx
* Progress Software http://www.progress.com/en/index.html
* PTC http://www.ptc.com/
* Quark http://www.quark.com/
* Quest http://www.quest.com/
* Rosetta Stone http://www.rosettastone.com/
* Siemens Software http://www.plm.automation.siemens.com/en_us/
* Sybase http://www.sybase.com/
* Symantec http://www.symantec.com/index.jsp
* TechSmith http://www.techsmith.com/
* The MathWorks http://www.mathworks.com/index.html

Links

http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.3261: Bill Text 112th Congress (2011-2012) H.R.3261.IH
http://www.opencongress.org/bill/112-h3261/text Stop Online Piracy Act

List of senators Sponsoring the Act

1. Mark Amodei [R-NV2]
Office Tel: 202-225-6155
Fax: 202-225-5679
Email: mailto:mamodei@sen.state.nv.us

2. John Barrow [D-GA12]
Office Tel: 202-225-2823
Fax: 202-225-3377
Email: mailto:JumpStartGeorgiaJobs@mail.house.gov

3. Karen Bass [D-CA33]
Office Tel: 202-225-7084
Fax: 202-225-2422
Email: mailto:kbass@lcb.state.nv.us

4. Howard Berman [D-CA28]
Office Tel: (202) 225-4695
Fax:(202) 225-3196
Email: mailto:ca28hwyr@housemail.house.gov

5. Marsha Blackburn [R-TN7]
Office Tel: (615) 376-2324
Fax: (615) 376-2939
Email: mailto:sen.marsha.blackburn@legislature.state.tn.us

6. Mary Bono Mack [R-CA45]
Office Tel: (951) 658-2312
Fax: (951) 652-2562
Email: mailto:info@marybono.com

7. John Carter [R-TX31]
Office Tel: (202) 225-3864
Fax: (202) 225-5886
Email: mailto:john.carter@mail.house.gov

8. Steven Chabot [R-OH1]
Office Tel: 202-225-2216
Fax: 202-225-3012
Email: mailto:steve.chabot@mail.house.gov

9. John Conyers [D-MI14]
Office Tel: 313-961-5670
Fax: 313-226-2085
Email: mailto:John.Conyers@mail.house.gov

10.Ted Deutch [D-FL19]
Office Tel: 202-225-3001
Fax: 202-225-5974
Email: mailto:Ted.deutch@mail.house.gov

11.Elton Gallegly [R-CA24]
Office Tel: (202) 225-5811
Fax: (202) 225-1100gly
Email: mailto:elton.gallegly@mail.house.gov

12.Robert Goodlatte [R-VA6]
Office Tel: (202) 225-5431
Fax: (202) 225-9681
Email: mailto:Bob.Goodlatte@mail.house.gov

13.Tim Griffin [R-AR2]
Office Tel: (202) 225-2506
Fax: (202) 225-5903
Email: mailto:tim.griffin@mail.house.gov

14.Peter King [R-NY3]
Office Tel: (202) 225-7896
Fax: (202) 226-2279ing
Email: mailto:peter.king@mail.house.gov

15.Ben Lujan [D-NM3]
Office Tel: 202-225-6190
Fax: 202-226-1528
Email: mailto:ben.lujan@mail.house.gov

16.Thomas Marino [R-PA10]
Office Tel: (202)-225-3731
Fax: (202) 225-9594
Email:mailto:Tom.Marino@mail.house.gov

17.Alan Nunnelee [R-MS1]
Office Tel:(202 )225-4306
Fax:(202) 225-3549
Email: mailto:Nunneley@mail.house.gov

18.William Owens [D-NY23]
Office Tel: 202-225-4611
Fax: 202-226-0621
Email: mailto:William.Owens@Mail.House.Gov

19.Dennis Ross [R-FL12]
Office Tel:(202) 225- 3376
Fax:202-226-0585
Email: mailto:dennis.ross@mail.house. gov

20.Steve Scalise [R-LA1]
Office Tel: 202-225-3015
Fax: (202) 226-0386
Email: mailto:steve.scalise@mail.house.gov

21.Adam Schiff [D-CA29]
Office Tel: 626-304-2727
Fax: 626-304-0572
Email: mailto:adam.schiff@mail.house.gov

22.Lee Terry [R-NE2]
Office Tel: (202) 225-4155
Fax: (202) 226-5452
Email: mailto:talk2lee@mail.house.gov

23.Debbie Wasserman Schultz [D-FL20]
Office Tel: (202) 225-7931
Fax: (202) 226-2052
Email: mailto:Debbie_Wasserman@sen.fl.us

24.Melvin Watt [D-NC12]
Office Tel. (202) 225-1510
Fax (202) 225-1512
Email: mailto:Melvin.Watt@mail.house.gov

Protect IP Supporters

Sen Alexander, Lamar [TN] - 5/25/2011
Sen Ayotte, Kelly [NH] - 6/27/2011
Sen Bennet, Michael F. [CO] - 7/25/2011
Sen Bingaman, Jeff [NM] - 10/19/2011
Sen Blumenthal, Richard [CT] - 5/12/2011
Sen Blunt, Roy [MO] - 5/23/2011
Sen Boozman, John [AR] - 6/15/2011
Sen Brown, Sherrod [OH] - 10/20/2011
Sen Cardin, Benjamin L. [MD] - 7/13/2011
Sen Casey, Robert P., Jr. [PA] - 9/7/2011
Sen Chambliss, Saxby [GA] - 11/2/2011
Sen Cochran, Thad [MS] - 6/23/2011
Sen Coons, Christopher A. [DE] - 5/12/2011
Sen Corker, Bob [TN] - 6/9/2011
Sen Durbin, Richard [IL] - 6/30/2011
Sen Enzi, Michael B. [WY] - 9/7/2011
Sen Feinstein, Dianne [CA] - 5/12/2011
Sen Franken, Al [MN] - 5/12/2011
Sen Gillibrand, Kirsten E. [NY] - 5/26/2011
Sen Graham, Lindsey [SC] - 5/12/2011
Sen Grassley, Chuck [IA] - 5/12/2011
Sen Hagan, Kay [NC] - 7/5/2011
Sen Hatch, Orrin G. [UT] - 5/12/2011
Sen Isakson, Johnny [GA] - 11/2/2011
Sen Johnson, Tim [SD] - 10/3/2011
Sen Klobuchar, Amy [MN] - 5/12/2011
Sen Kohl, Herb [WI] - 5/12/2011
Sen Landrieu, Mary L. [LA] - 10/17/2011
Sen Lieberman, Joseph I. [CT] - 7/7/2011
Sen McCain, John [AZ] - 7/26/2011
Sen Menendez, Robert [NJ] - 10/31/2011
Sen Nelson, Bill [FL] - 9/23/2011
Sen Risch, James E. [ID] - 11/7/2011
Sen Rubio, Marco [FL] - 5/26/2011
Sen Schumer, Charles E. [NY] - 5/12/2011
Sen Shaheen, Jeanne [NH] - 6/30/2011
Sen Udall, Tom [NM] - 7/7/2011
Sen Vitter, David [LA] - 11/7/2011
Sen Whitehouse, Sheldon [RI] - 5/12/2011
Sen Moran, Jerry [KS] - 6/23/2011(withdrawn - 6/27/2011)

Contact your elected officials today and let them know what you think !

Anonymous - Message to the American People

_____________________

2011-12-10T10:23:00.001-05:00

WikiLeaks: The Spy Files & Assange Video on Mass Surveillance

"Who here has an iPhone, a Blackberry, a Gmail account?....Well Your All Screwed"

By razavi
BizCloud
December 2, 2011

Today WikiLeaks began releasing a database of hundreds of documents from as many as 160 intelligence contractors in the mass surveillance industry. Working with Bugged Planet and Privacy International, as well as media organizations form six countries – ARD in Germany, The Bureau of Investigative Journalism in the UK, The Hindu in India, L’Espresso in Italy, OWNI in France and the Washington Post in the U.S. Wikileaks is shining a light on this secret industry that has boomed since September 11, 2001 and is worth billions of dollars per year. WikiLeaks has released 287 documents today, but the Spy Files project is ongoing and further information will be released this week and into next year.

International surveillance companies are based in the more technologically sophisticated countries, and they sell their technology on to every country of the world. This industry is, in practice, unregulated. Intelligence agencies, military forces and police authorities are able to silently, and on mass, and secretly intercept calls and take over computers without the help or knowledge of the telecommunication providers. Users’ physical location can be tracked if they are carrying a mobile phone, even if it is only on stand by.

But the WikiLeaks Spy Files are more than just about ’good Western countries’ exporting to ’bad developing world countries’. Western companies are also selling a vast range of mass surveillance equipment to Western intelligence agencies.

In traditional spy stories, intelligence agencies like MI5 bug the phone of one or two people of interest. In the last ten years systems for indiscriminate, mass surveillance have become the norm. Intelligence companies such as VASTech secretly sell equipment to permanently record the phone calls of entire nations. Others record the location of every mobile phone in a city, down to 50 meters. Systems to infect every Facebook user, or smart-phone owner of an entire population group are on the intelligence market.

Selling Surveillance to Dictators

When citizens overthrew the dictatorships in Egypt and Libya this year, they uncovered listening rooms where devices from Gamma corporation of the UK, Amesys of France, VASTech of South Africa and ZTE Corp of China monitored their every move online and on the phone.

Surveillance companies like SS8 in the U.S., Hacking Team in Italy and Vupen in France manufacture viruses (Trojans) that hijack individual computers and phones (including iPhones, Blackberries and Androids), take over the device, record its every use, movement, and even the sights and sounds of the room it is in.

Other companies like Phoenexia in the Czech Republic collaborate with the military to create speech analysis tools. They identify individuals by gender, age and stress levels and track them based on ‘voiceprints’. Blue Coat in the U.S. and Ipoque in Germany sell tools to governments in countries like China and Iran to prevent dissidents from organizing online.

Trovicor, previously a subsidiary of Nokia Siemens Networks, supplied the Bahraini government with interception technologies that tracked human rights activist Abdul Ghani Al Khanjar. He was shown details of personal mobile phone conversations from before he was interrogated and beaten in the winter of 2010-2011.

How Mass Surveillance Contractors Share Your Data with the State

In January 2011, the National Security Agency broke ground on a $1.5 billion facility in the Utah desert that is designed to store terabytes of domestic and foreign intelligence data forever and process it for years to come.

Telecommunication companies are forthcoming when it comes to disclosing client information to the authorities – no matter the country. Headlines during August’s unrest in the UK exposed how Research in Motion (RIM), makers of the Blackberry, offered to help the government identify their clients. RIM has been in similar negotiations to share BlackBerry Messenger data with the governments of India, Lebanon, Saudi Arabia, and the United Arab Emirates.

Weaponizing Data Kills Innocent People

There are commercial firms that now sell special software that analyze this data and turn it into powerful tools that can be used by military and intelligence agencies.

For example, in military bases across the U.S., Air Force pilots use a video link and joystick to fly Predator drones to conduct surveillance over the Middle East and Central Asia. This data is available to Central Intelligence Agency officials who use it to fire Hellfire missiles on targets.

The CIA officials have bought software that allows them to match phone signals and voice prints instantly and pinpoint the specific identity and location of individuals. Intelligence Integration Systems, Inc., based in Massachusetts – sells a “location-based analytics” software called Geospatial Toolkit for this purpose. Another Massachusetts company named Netezza, which bought a copy of the software, allegedly reverse engineered the code and sold a hacked version to the Central Intelligence Agency for use in remotely piloted drone aircraft.

IISI, which says that the software could be wrong by a distance of up to 40 feet, sued Netezza to prevent the use of this software. Company founder Rich Zimmerman stated in court that his “reaction was one of stun, amazement that they (CIA) want to kill people with my software that doesn’t work.”
Orwell’s World

Across the world, mass surveillance contractors are helping intelligence agencies spy on individuals and ‘communities of interest’ on an industrial scale.

The Wikileaks Spy Files reveal the details of which companies are making billions selling sophisticated tracking tools to government buyers, flouting export rules, and turning a blind eye to dictatorial regimes that abuse human rights.

How to use the Spy Files

To search inside those files, click one of the links on the left pane of this linked page, to get the list of documents by type, company date or tag. To search all these companies on a world map use the following tool from Owni

Source:
http://bizcloudnetwork.com/wikileaks-the-spy-files-assange-video-on-mass-surveillance
______________________

2011-12-09T17:28:00.000-05:00

Marching off the Cliff

By Noam Chomsky
Nation of Change
Dec. 7, 2011

A task of the United Nations Framework Convention on Climate Change, now under way in Durban, South Africa, is to extend earlier policy decisions that were limited in scope and only partially implemented.

These decisions trace back to the U.N. Convention of 1992 and the Kyoto Protocol of 1997, which the U.S. refused to join. The Kyoto Protocol’s first commitment period ends in 2012. A fairly general pre-conference mood was captured by a New York Times headline: “Urgent Issues but Low Expectations.”

As the delegates meet in Durban, a report on newly updated digests of polls by the Council on Foreign Relations and the Program on International Policy Attitudes reveals that “publics around the world and in the United States say their government should give global warming a higher priority and strongly support multilateral action to address it.”

Most U.S. citizens agree, though PIPA clarifies that the percentage “has been declining over the last few years, so that American concern is significantly lower than the global average – 70 percent as compared to 84 percent.”

“Americans do not perceive that there is a scientific consensus on the need for urgent action on climate change â(euro) [ A large majority think that they will be personally affected by climate change eventually, but only a minority thinks that they are being affected now, contrary to views in most other countries. Americans tend to underestimate the level of concern among other Americans.”

These attitudes aren’t accidental. In 2009 the energy industries, backed by business lobbies, launched major campaigns that cast doubt on the near-unanimous consensus of scientists on the severity of the threat of human-induced global warming.

The consensus is only “near-unanimous” because it doesn’t include the many experts who feel that climate-change warnings don’t go far enough, and the marginal group that deny the threat’s validity altogether.

The standard “he says/she says” coverage of the issue keeps to what is called “balance”: the overwhelming majority of scientists on one side, the denialists on the other. The scientists who issue the more dire warnings are largely ignored.

One effect is that scarcely one-third of the U.S. population believes that there is a scientific consensus on the threat of global warming – far less than the global average, and radically inconsistent with the facts.

It’s no secret that the U.S. government is lagging on climate issues. “Publics around the world in recent years have largely disapproved of how the United States is handling the problem of climate change,” according to PIPA. “In general, the United States has been most widely seen as the country having the most negative effect on the world’s environment, followed by China. Germany has received the best ratings.”

To gain perspective on what’s happening in the world, it’s sometimes useful to adopt the stance of intelligent extraterrestrial observers viewing the strange doings on Earth. They would be watching in wonder as the richest and most powerful country in world history now leads the lemmings cheerfully off the cliff.

Last month, the International Energy Agency, which was formed on the initiative of U.S. Secretary of State Henry Kissinger in 1974, issued its latest report on rapidly increasing carbon emissions from fossil fuel use.

The IEA estimated that if the world continues on its present course, the “carbon budget” will be exhausted by 2017. The budget is the quantity of emissions that can keep global warming at the 2 degrees Celsius level considered the limit of safety.

IEA chief economist Fatih Birol said, “The door is closing [ if we don’t change direction now on how we use energy, we will end up beyond what scientists tell us is the minimum (for safety). The door will be closed forever.”

Also last month, the U.S. Department of Energy reported the emissions figures for 2010. Emissions “jumped by the biggest amount on record,” The Associated Press reported, meaning that “levels of greenhouse gases are higher than the worst-case scenario” anticipated by the International Panel on Climate Change in 2007.

John Reilly, co-director of the Massachusetts Institute of Technology’s program on climate change, told the AP that scientists have generally found the IPCC predictions to be too conservative – unlike the fringe of denialists who gain public attention. Reilly reported that the IPCC’s worst-case scenario was about in the middle of the MIT scientists’ estimates of likely outcomes.

As these ominous reports were released, the Financial Times devoted a full page to the optimistic expectations that the U.S. might become energy-independent for a century with new technology for extracting North American fossil fuels.

Though projections are uncertain, the Financial Times reports, the U.S. might “leapfrog Saudi Arabia and Russia to become the world’s largest producer of liquid hydrocarbons, counting both crude oil and lighter natural gas liquids.”

In this happy event, the U.S. could expect to retain its global hegemony. Beyond some remarks about local ecological impact, the Financial Times said nothing about what kind of a world would emerge from these exciting prospects. Energy is to burn; the global environment be damned.

Just about every government is taking at least halting steps to do something about the likely impending catastrophe. The U.S. is leading the way – backward. The Republican-dominated U.S. House of Representatives is now dismantling environmental measures introduced by Richard Nixon, in many respects the last liberal president.

This reactionary behavior is one of many indications of the crisis of U.S. democracy in the past generation. The gap between public opinion and public policy has grown to a chasm on central issues of current policy debate such as the deficit and jobs. However, thanks to the propaganda offensive, the gap is less than what it should be on the most serious issue on the international agenda today – arguably in history.

The hypothetical extraterrestrial observers can be pardoned if they conclude that we seem to be infected by some kind of lethal insanity.

© 2011 Noam ChomskyDistributed by The New York Times Syndicate.

This article was published at NationofChange at:
http://www.nationofchange.org/marching-cliff-1323280609
All rights are reserved.
_____________________

2011-12-05T21:03:00.003-05:00

Court clears way for Assange extradition fight

Australian WikiLeaks founder Julian Assange has won a last-ditch legal bid to avoid being extradited to Sweden next week.

ABC.AU
December 05, 2011

Two British judges have ruled that Mr Assange can ask the Supreme Court to consider his appeal against extradition.

Swedish authorities want to question the 40-year-old over accusations of sexual assault made by two former female WikiLeaks volunteers during a visit to the country last year.

He insists the allegations are politically motivated and has voiced concerns that he will inevitably end up in the hands of the United States.

The judges ruled that Mr Assange's case is of general public importance, but the Supreme Court could still refuse to hear his case.

Mr Assange now has 14 days to formally lodge an appeal, meaning his stay in Britain, where he has been staying since his arrest in December last year, is certain to stretch into 2012.

His arrest came shortly after WikiLeaks published thousands of secret US diplomatic cables that included unflattering views of world leaders and candid assessments of security threats.

He had lost his last attempt to avoid being sent to Sweden on November 2 after two High Court judges upheld a previous ruling.

Source:
http://www.abc.net.au/news/2011-12-05/uk-high-court-says-assange-can-appeal-extradition/3714072
____________________

2011-12-04T14:41:00.002-05:00

Malware – How It Can Get Into Your Phone And How To Protect Yourself

[Infograph]
by Chris Chavez
Phandroid
August 19, 2011

Malware has been a fast growing issue with Android devices as of late. You can find tons of “antivirus” apps in the Android Market and simply traveling into Best Buy you’ll find all kinds of over priced software aimed specifically at naive Android users.

Make no qualms about it, I hate malware. There are so many misconceptions regarding viruses, spyware and malware on Android. So, in an effort to further educate our readers, I am happy to bring to you this handy infograph from BullGuard with some easy ways of keeping your device clean, clear and under control.
(May have to click the image twice for full view)

Source:
http://phandroid.com/2011/08/19/malware-how-it-can-get-into-your-phone-and-how-to-protect-yourself-infograph/
_____________________

2011-11-29T08:06:00.000-05:00

Internet Has Become 'Surveillance Machine': Assange

by Agence France Presse
November 28, 2011

WikiLeaks founder Julian Assange blasted the mainstream media, Washington, banks and the Internet itself as he addressed journalists in Hong Kong on Monday via videolink from house arrest in England.

Fresh from accepting a top award for journalism from the prestigious Walkley Foundation in his native Australia on Sunday, Assange spoke to the News World Summit in Hong Kong before keeping a regular appointment with the police.

He defended his right to call himself a journalist and said WikiLeaks' next "battle" would be to ensure that the Internet does not turn into a vast surveillance tool for governments and corporations.

"Of course I'm a goddamn journalist," he responded with affected frustration when a moderator of the conference asked if he was a member of the profession.

He said his written record spoke for itself and argued that the only reason people kept asking him if he was a journalist was because the United States' government wanted to silence him.

"The United States government does not want legal protection for us," he said, referring to a US Justice Department investigation into his whistle-blower website for releasing secret diplomatic and military documents.

The former hacker criticized journalists and the mainstream media for becoming too cozy with the powerful and secretive organizations they were supposed to be holding to account.

In a 40-minute address, he also accused credit card companies such as Visa and MasterCard of illegally cutting WikiLeaks off from funding under a secret deal with the White House.

"Issues that should be decided in open court are being decided in back rooms in Washington," he said.

The Internet itself had become "the most significant surveillance machine that we have ever seen," Assange said in reference to the amount of information people give about themselves online.

"It's not an age of transparency at all ... the amount of secret information is more than ever before," he said, adding that information flows in but is not flowing out of governments and other powerful organizations.

"I see that really is our big battle. The technology gives and the technology takes away," he added.

The anti-secrecy activist then help up a handwritten sign from an aide telling him to "stop" talking or he would be late for a mandatory appointment with police.

Assange, 40, is under house arrest in England pending the outcome of a Swedish extradition request over claims of rape and sexual assault made by two women. He says he is the victim of a smear campaign.

Source:
http://www.commondreams.org/headline/2011/11/28-1
______________________

2011-11-23T11:26:00.000-05:00

Buy Nothing Day!
Nov 25 / 26

#OCCUPYXMAS

2011-11-07T19:54:00.001-05:00

Google Map Reveals Massive Geothermal Potential Nationwide
“Effectively an Unlimited Supply” Says Energy Secretary Chu

By Stephen Lacey
Nation of Change
Nov. 6, 2011

You’re looking at a whole lot of heat.

Southern Methodist University’s Geothermal Laboratory recently released a map that proves once again how much potential energy is locked beneath America. SMU’s resource map, which took years to develop with funding from Google.org, shows that there are enough technically recoverable resources throughout the U.S. to equal 10 times the amount of coal capacity in place today.

Other maps have shown similar data. Last year, SMU issued a map (also funded by Google) that showed massive geothermal potential under West Virginia, an area not typically seen as suitable for the technology. In 2007, MIT Researcher Jeff Tester analyzed deep “hot rock” resources, showing that the U.S has 100 GW of potential for Enhanced Geothermal Systems [EGS] — an emerging type of plant design in which a developer creates an artificial well by pumping water through deep rocks, rather than using direct steam from hot water reservoirs closer to the surface.

So big deal, right? Another map shows we have tons of resources. Why is this so different from the others?
Well, geothermal exploration can be a very risky business. It’s not uncommon for a developer to spend 3/5ths of capital on the exploration and drilling phase of a project. And if the resources aren’t there, that’s millions of dollars down the…bore hole.

This map and corresponding study gives the geothermal industry another great tool for evaluating resources, particularly in areas on the East Coast where developers haven’t ventured. SMU provides an explanation (and a good video of EGS starring Energy Secretary Steven Chu):

In this newest SMU estimate of resource potential, researchers used additional temperature data and in-depth geological analysis for the resulting heat flow maps to create the updated temperature-at-depth maps from 3.5 kilometers to 9.5 kilometers (11,500 to 31,000 feet).

This update revealed that some conditions in the eastern two-thirds of the U.S. are actually hotter than some areas in the western portion of the country, an area long-recognized for heat-producing tectonic activity. In determining the potential for geothermal production, the new SMU study considers the practical considerations of drilling, and limits the analysis to the heat available in the top 6.5 km (21,500 ft.) of crust for predicting megawatts of available power.

This approach incorporates a newly proposed international standard for estimating geothermal resource potential that considers added practical limitations of development, such as the inaccessibility of large urban areas and national parks. Known as the ‘technical potential’ value, it assumes producers tap only 14 percent of the ‘theoretical potential’ of stored geothermal heat in the U.S., using currently available technology.

In other words, this assessment, which shows we have enough recoverable resources to overtake our coal capacity ten times over, is pretty realistic.

Google.org funded this detailed piece of research as part of its suite of strategic investments in geothermal R&D and project deployment. But even with these resources and the high-profile backing from companies like Google, the pace of development in the geothermal industry will still be moderate.

That’s because developers in the sector are competing with oil and gas companies for drilling rigs and workers. Securing capital for projects from the still-tight financial markets has also been tough for companies. And in next-generation EGS, drilling technologies and power plant designs are still in pre-commercial phase. This isn’t an industry that can deploy projects very rapidly.

Even with some constraints, it’s clear that the Americans are blessed with an enormous amount of technically-exploitable resources under our feet. And no, it’s not coal, oil or natural gas.

Here’s a good video of Enhanced Geothermal Systems (and it beats the heck out of gas fracking):

Source:
http://www.nationofchange.org/google-map-reveals-massive-geothermal-potential-nationwide-effectively-unlimited-supply-says-chu-132
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2011-11-05T08:48:00.000-04:00

How the banksters gutted the US real estate market
And what can be done about it

Rachel Maddow Show
MSNBC
Nov. 4 2011

Visit msnbc.com for breaking news, world news, and news about the economy

It's all about title law

Title law. It's the most unglamorous part of the law and yet without it it's impossible to buy and sell with confidence.

So what did our friends on Wall Street do?

In order to make it easier to extract money from the residential real estate market, banksters and their friends in Washington completely gutted the hundred plus year old system of real estate title transfer thus completely undermining the stability of the residential real estate market going forward.

If this issue does not get sorted out, the next leg down in the real estate market is going to make the first one look like a mild hiccup.

Search topics: Beau Biden, deceptive trade practices, foreclosure, MERS, MSNBC, Rachel Maddow

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2011-10-30T22:40:00.002-04:00

WikiLeaks' Assange decries 'financial blockade'

By John F. Burns
New York Times
SF Gate
October 25, 2011

Julian Assange, the founder of WikiLeaks, said on Monday that his controversial website could be forced to shut down by the end of the year because a 10-month-old "financial blockade" had sharply reduced the donations on which it depends.

Calling the blockade a "dangerous, oppressive and undemocratic" attack led by the United States, Assange said at a news conference that it had deprived his organization of "tens of millions of dollars," and warned, "If WikiLeaks does not find a way to remove this blockade, we will not be able to continue by the turn of the new year."

Since the end of 2010, financial intermediaries - including Visa, MasterCard, PayPal and Western Union - have refused to allow donations to WikiLeaks to flow through their systems, he said, blocking "95 percent" of the website's revenue and leaving it to operate on its cash reserves for the past 10 months. An aide said that WikiLeaks was now receiving less than $10,000 a month in donations.

Source:
http://articles.sfgate.com/2011-10-25/news/30322870_1_julian-assange-wikileaks-founder-wikileaks-assange
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2011-10-30T13:12:00.002-04:00

Online hackers threaten to expose cartel's secrets
Anonymous demands release of one of their own who was kidnapped

By Dane Schiller
Houston Chronicle
October 29, 2011

Video

Transcript of Anonymous video

"Anonymous from Veracruz, Mexico, and the world, we want you to know that a member has been kidnapped when he was doing Paperstorm in our city.

We demand his release. We want the army and the navy to know that we are fed up of the criminal group Zetas, who have concentrated on kidnapping, stealing and blackmailing in different ways. One of them is charging every honest and hardworking citizen of Veracruz who busts their rears working day after day to feed their families.

We are fed up of journalists and newspapers of Xalapa, Córdoba and Orizaba because they are constantly crapping on honest authorities like the army and the navy.

We are fed up with taxi drivers, commanders and "police-zetas" officers of Xalapa, Córdoba, Orizaba, Nogales, Río Blanco and Camerinos... who are chickens and have made themselves the most loyal servants of these (expletive).

For the time being, we won´t post photos or the names ... of the taxi drivers, the journalists or the newspapers nor of the police officers, but if needed, we will publish them including their addresses, to see if by doing so the government will arrest them.
We can´t defend ourselves with a weapon, but if we can do this with their cars, houses, bars, brothels and everything else in their possession ... It won´t be difficult. We all know who they are and where they are.

(Images with sound of explosions)

You made a huge mistake by taking one of us. Release him. And if anything happens to him, you (expletive) will always remember this upcoming November 5th .

Knowledge is free. We are Anonymous. We are a legion. We don't forgive. We don't forget. Expect us."

An international group of online hackers is warning a Mexican drug cartel to release one of its members, kidnapped from a street protest, or it will publish the identities and addresses of the syndicate's associates, from corrupt police to taxi drivers, as well as reveal the syndicates' businesses.

The vow is a bizarre cyber twist to Mexico's ongoing drug war, as a group that has no guns is squaring off against the Zetas, a cartel blamed for thousands of deaths as well as introducing beheadings and other frightening brutality.

"You made a huge mistake by taking one of us. Release him," says a masked man in a video posted online on behalf of the group, Anonymous.

"We cannot defend ourselves with a weapon … but we can do this with their cars, homes, bars, brothels and everything else in their possession," says the man, who is wearing a suit and tie.

"It won't be difficult; we all know who they are and where they are located," says the man, who underlines the group's international ties by speaking Spanish with the accent of a Spaniard while using Mexican slang.

He also implies that the group will expose mainstream journalists who are somehow in cahoots with the Zetas by writing negative articles about the military, the country's biggest fist in the drug war.

"We demand his release," says the Anonymous spokesman, who is wearing a mask like the one worn by the shadowy revolutionary character in the movie V for Vendetta, which came out in 2006. "If anything happens to him, you sons of (expletive) will always remember this upcoming November 5."

The person reportedly kidnapped is not named, and the video does not share information about the kidnapping other than that it occurred in the Mexican state of Veracruz during a street protest.

Anonymous draws its roots from an online forum dedicated to bringing sensitive government documents and other material to light.

If Anonymous can make good on its threats to publish names, it will "most certainly" lead to more deaths and could leave bloggers and others open to reprisal attacks by the cartel, contends Stratfor, an Austin-based global intelligence company.

"In this viral world on the Internet, it shows how much damage could be done with just one statement on the Web," said Fred Burton of Stratfor, which published a report Friday that probes the implications of the cartel drawing the activists' ire.

Source:
http://www.chron.com/news/houston-texas/article/Online-hackers-threaten-to-expose-cartel-secrets-2242068.php
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2011-10-28T01:54:00.000-04:00

Resentment builds in Libya's devastated Sirte

By Rania El Gamal
Reuters
Oct 27 2011

Residents of Muammar Gaddafi's home town of Sirte are struggling to come to terms with the destruction and humiliation of their city, a former fishing village which once had aspirations to be the "capital of Africa".

After rebels captured swathes of Libya, Gaddafi sought sanctuary in the city he had groomed as an international hub with its own grand conference centre.

During an eight-week siege, much of Sirte was reduced to rubble in fighting between Gaddafi loyalists and fighters of the new interim government.

"We never expected such destruction," said a resident who gave his name as Abu Abdul-Rahman, pointing to his bullet-riddled television and broken furniture. "Is this what they call a revolution? We chose to flee instead of fighting and still they destroyed our homes."

He added: "They treated us like animals who didn't deserve to be protected."

Many in Sirte resent the soldiers of Libya's new leaders, who they blame for Gaddafi's humiliating capture and death last week and for what they say was the deliberate destruction of the city.

"We lived with Gaddafi for 42 years. He never attacked our houses with his army," said another Sirte resident, sitting in his damaged house. "Muammar lived and died like a man," he added, Gaddafi's green flag still hoisted atop his house.

The gruesome display of Gaddafi's body in a cold room in the neighbouring city of Misrata has infuriated members of his tribe and many Sirte residents.

"People will not forget the humiliation that happened to him. I am not from his tribe, but I tell you, I will not forget what happened to him," said the resident, who declined to be named.

Fighters from Misrata handed the decaying bodies of Gaddafi and his son Mo'tassim, who was also captured alive in Sirte last week, for burial at a secret desert location on Tuesday.

A week after it fell to fighters with the National Transitional Council (NTC), Sirte still looks like a ghost town. Most of its 100,000 residents had fled the fighting.

On Thursday, some volunteers were seen sweeping rubble and broken glass on streets lined with burnt cars and damaged buildings. Others helped medical workers search for the dead.

In some areas, the stench from rotting corpses covered with flies forced medical workers to wear masks. Parts of bodies burned beyond recognition were put in plastic bags.

Some 300 bodies were found and buried in the past few days, local people and medical workers said. Locals buried 25 bodies on Wednesday, including ten which were found floating in a water pool with their hands tied behind their backs.

"EXECUTION"

New York-based Human Rights Watch this week called on the NTC to investigate a suspected mass execution of 53 Gaddafi loyalists whose bodies were found last week near an abandoned hotel in a part of Sirte that was controlled by its fighters.

Pro- and anti-Gaddafi graffiti sprayed on the walls of Sirte highlight the deep divisions entrenched in Libya's tribal society and the risk that those tensions could boil over in a country awash with weapons.

On several street walls, "Misrata, the city of resistance" was sprayed over "Allah, Muammar, Libya and that's all," a chant that Gaddafi supporters used to sing during the eight-month revolt.

NTC leader Mustafa Abdel Jalil addressed those concerns during a speech on Sunday to mark Libya's liberation from 42 years of one-man rule, urging national reconciliation and respect for the rule of law.

"I call on everyone for forgiveness, tolerance and reconciliation. We must get rid of hatred and envy from our souls. This is a necessary matter for the success of the revolution and the success of the future Libya," he said.

But for now the mood in Sirte is one of revenge.

Sitting on a pile of rubble outside his house, another Sirte resident, who declined to give his name said: "There is something burning inside me here," pointing to his chest. "I want to take my weapon and go to Misrata."

Locals believe NTC fighters deliberately used excessive force during battles with Gaddafi supporters holed up in Sirte to punish its residents for their support of the former leader.

"Yes, Muammar is dead, but it is true what he said, they are rats, when the destruction is like that, they are rats," shouted another angry resident. "They are terrorists, not revolutionaries".

Walking through his ruined house, resident Abdul-Halim said: "Sirte is finished. It will never be the same again."

Source:
http://www.reuters.com/article/2011/10/27/libya-sirte-idUSL5E7LR4XT20111027
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2011-10-22T13:37:00.000-04:00

We Need a New System

by Ari Rabin-Havt
Media Matters
October 11, 2011
[emphasis added]

In the Spring of 2000, my friend and former colleague Zack Exley arrived in Washington, DC, to observe the protests that had engulfed the city during the World Bank's annual meeting. Driving into Washington from the airport, out the window of his taxi he saw "a teenage white girl with long dreadlocks who wore a homemade t-shirt proclaiming: WE NEED A NEW SYSTEM."

Later that evening he attended a party at the home of then-Secretary of the Treasury Larry Summers along with "ambassadors, politicians, esteemed professors and what seemed like the entire combined senior economist staff of the IMF, World Bank and Treasury."

It turned out Larry Summers had seen the girl too and was eagerly telling his guests about an interaction he had with her:

And so I asked the girl: 'What is this new system that you want? Tell me about it!' And the girl had nothing. Nothing! She had no fucking clue what this magical new system was supposed to be. No one is saying that there aren't problems with the world economy the way it is today. But these kids out there -- they don't know what they want!

"Mr. Secretary," said Zack. "You've got 50 economics PhDs in this room who pretty much run the world economy. And you're asking that girl for a better system? Aren't the solutions your job? You admit billions are living in hell, but it's up to that girl to fix it?"

Summers chuckled and the conversation moved on.

More than a decade has passed since Larry Summers saw that teenage girl outside the World Bank, and our domestic and global economy has only further deteriorated. We've seen two burst bubbles; two recessions; two major wars (many more minor skirmishes); lower employment, and higher income inequality.

Meanwhile, those with power in our financial, political and media worlds simply cheered or sat on the sidelines feigning powerlessness.

Over the last twenty five days across the media -- with several notable exceptions -- we've seen elites point fingers, chuckle and play punch the hippy while covering the Occupy Wall Street protests.

Whether it's reporters at CNN mocking protesters while sympathizing with Wall Street traders; Rush Limbaugh referring to protestors as a "parade of human debris"; or a conservative reporter acting as an agent provocateur at a protest in Washington, DC, at best many in the media seem desperate not to face the fundamental issues at the heart of the demonstrations, at worst they place blame for our failed economy at the feet of the protestors -- mocking them as unemployed drains on the country.

It also comes as no surprise that Fox, which actively worked to build the Tea Party movement, has attacked these grassroots uprisings as "astroturf," and "petulant little children," and compared protestors to the "Unabomber."

The Tea Party and Fox News fight to protect our system's fundamental inequalities while Occupy Wall Street is a fundamental challenge to it.

In 2000, Larry Summers tried to outsource fixing a global economic system he bore responsibility for to a girl in dreadlocks. Elites in the media and our political system are now attempting to foist the same responsibility to those camping in Zuccotti Park.

As the New York Times astutely pointed out: "It is not the job of the protesters to draft legislation. That's the job of the nation's leaders, and if they had been doing it all along there might not be a need for these marches and rallies."

If those in the media casting aspersions on the protestors had spent a decade covering the underlying problems with our economy, instead of cheerleading the housing bubble; worked to expose the lies that led our country to war, instead of taking an administration at its word; and not allow themselves to be manipulated by political and media figures whose goal was simply to distort our political processes, there might not be a need to Occupy Wall Street.

Instead the dreadlocked girl is still right -- we need a new system.

Source:
http://mediamatters.org/blog/201110110007
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2011-10-15T08:16:00.004-04:00

If This Is Such a Rich Country, Why Are We Getting Squeezed?

While the rich are getting richer, they're slashing social security, medicare and other social programs for the rest of us. What gives?

Alternet
By Heather Boushey and Joshua Holland

July 18, 2007

[emphasis added]

The commercial media is telling us two perfectly contradictory stories about the American economy.

The first is how wonderfully rich we are in the United States. The stock market's booming -- some analysts predict the Dow will break the 15,000 this year -- the economy is expanding at a healthy clip, productivity growth is up and unemployment and inflation are relatively low.

But, at the same time, we're also told that we don't have the money to pay for a robust social safety net. When it comes to paying for universal health coverage, affording retirement security for our elderly, investing in programs for the poor or educating our children, we need to pinch pennies. According to this story line, we face a looming "entitlement crisis" -- we won't be able to afford to keep the Baby Boomers in good health and out of poverty, we're told, unless we slash their benefits and privatize the programs that their elderly parents enjoy today.

This is the line we hear from the administration when it talks about entitlement "reform": Treasury Secretary Henry Paulson says that "the biggest economic issue facing our country is the growth in spending on the major entitlement programs: Medicare, Medicaid and Social Security." The solution, according to the Heritage Foundation, is to cut entitlement spending. "Reforming Social Security, Medicare, and Medicaid is the only way to get the budget under control," it says.

How can two narratives that are so clearly at odds with each other be so pervasive? Are we seriously supposed to believe that Paris Hilton has to dig between the cushions of her sofa to buy a can of tuna?

What reconciles these two themes is absent from our mainstream economic discourse: We "can't afford" all sorts of programs that are clearly in the common good because most of the benefits of our growing economy have gone to a very small group of Americans, who have, in turn, seen their taxes slashed again and again in the past six years. It's a story that isn't told as often as it should in the commercial press, because it's a supposedly "liberal" narrative -- never mind that Uber-conservative former Fed Chairman Alan Greenspan told Congress that there is a "really serious problem here, as I've mentioned many times in the consequent concentration of income that is rising."

Saying that the majority of the country's economic gains in recent years have gone to the top 1 percent of the income ladder understates the trend. You have to cut the pie into even smaller slices to get the full picture. Because, while the bottom half of the top 1 percent of the income distribution have done far better than the average wage slaves, it is a smaller slice still -- the top .01 percent -- that has grabbed most of the gains, seeing an impressive 250 percent increase in income between 1973 and 2005 from an economy that's grown by 160 percent.

An analysis by economists Thomas Piketty and Emmanuel Saez gives us the best perspective of what's going on for everyone else. They found that despite several periods of healthy growth between 1973 and 2005, the average income of all but the top 10 percent of the income ladder -- nine out of ten American families -- fell by 11 percent when adjusted for inflation. For three decades, economic growth in the United States has gone first and foremost to building today's modern Gilded Age. The recipients of those gains don't care about a fully funded Social Security system or a healthy Medicare program -- they don't need them.

Meanwhile, even as the top earners' incomes have gone through the roof, their tax burden has shriveled. At the same time, the share of federal revenues contributed by corporations has declined -- by two-thirds since 1962.

It's important to understand how that plays out in our national economic discourse. When people tell us that our economy cannot "afford" things like universal healthcare or paid sick days, it fits with the economic experience that most Americans have had in their real lives -- the benefits of our boom-boom economy have not gone to the great masses but to "someplace else."

Americans feel pinched. Polls show that they feel a time crunch -- not having enough time for family and friends -- and that they're anxious about getting into or staying in the middle class. Over the past generation, the economy has not been good to the typical, married-couple family (let alone single-parent families) and families feel, rightly, that they need to be careful about where their dollars go.

It's not that they're not working hard. The typical U.S. family puts in more time at work than ever before. The typical married couple works an additional 13.3 weeks per year -- 533 hours -- compared to a generation ago. But even though families are working more, their incomes have grown by only a third between 1973 and the present. That's much worse than the generation before; between 1947 and 1973, the typical married-couple family saw their income rise by 115 percent, and that was often just one parent's income. This was a period when most families could afford a stay-at-home mother. Of course, fewer families have that luxury today -- those with stay-at-home moms have the same inflation-adjusted median income in 2007 as they did in 1973. They haven't gained a penny from three decades of growth.

When we talk about the slow growth of family income, economists like to mention globalization, mechanization or other factors that require us to be lean and mean and more "competitive." The story line is that U.S. families have not seen their income grow because America has had to fight it out in a wide-open global economy, and these are lean times for workers.

But that's simply not true.

The economy -- as measured by gross domestic product (GDP) -- has grown by over 160 percent since 1973 (PDF). This is only slightly less than the period from 1947 to 1973 when GDP grew by 176 percent. That has come as Americans have become much more productive -- by over 80 percent since 1973 -- meaning it now takes fewer workers to produce the same number of widgets as it did in the past.

As each worker in the U.S. economy produces more "stuff" per hour, be that DVD players or clients served, those goods and services are being sold in greater numbers. In a healthy economy, that growth is shared between workers and investors, and wage growth should rise with productivity. This was the case in the decades between World War II and the early 1970s, when productivity and median wages both increased by an average of two percent to three percent every year.

But since 1973, productivity has increased sharply, especially after the late 1990s, but median wage growth has been flat. So firms are getting much more output per worker, but they're not paying for it. They've pocketed the difference in executive compensation and corporate profits. The share of national income going to wages is at the lowest level ever recorded, while the piece of the pie gobbled up by corporate profits is at its highest point since 1960.

But when the masses ask for help paying for health insurance or child care, or request that everyone be given the right to paid sick days, we're told we cannot afford it. "Afford" seems to be a very special term in the current American context: Letting the wealthy take ever-bigger pieces of our national product is something we always seem able to afford.

We work hard. We -- the 99.9 percent -- and deserve a bigger piece of the pie. With a growing economy, we can afford it, and we all know just where to look for how to pay for it.

Heather Boushey is a senior economist with the Center for Economic Policy and Research. Joshua Holland is an AlterNet staff writer.

Source:
http://www.alternet.org/story/57180/?page=entire
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2011-10-12T07:40:00.004-04:00

How America's middle class was destroyed

It was policy

RealEconTV.com
Sept. 2011

Here is how to destroy a nation's economy:

1. Allow overseas manufacturers to flood your domestic market with goods made without any regard for the environment, fair labor practices or human rights.

2. Change real estate lending practices radically and stimulate a massive bubble in residential real estate.

3. Abolish the Glass-Stegal Act and allow banks to take deposits and use that money to gamble on reckless massively leveraged "investments".

Deliberate? Accidental? The result of idiocy?

Whatever the motivation, the people in the White House have spent decades undermining the US economy and thus the nation.

Listen to RealEconTV's Ken McCarthy interview with Rob Cohen.

Part 1

Part 2

Part 3

Part 4

This cannot continue!

The 99%
__________________

http://www.realecontv.com/videos/us

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2011-10-10T21:02:00.000-04:00

FBI to launch nationwide facial recognition service

By Aliya Sternstein
NextGov
10/07/2011

The FBI by mid-January will activate a nationwide facial recognition service in select states that will allow local police to identify unknown subjects in photos, bureau officials told Nextgov.

The federal government is embarking on a multiyear, $1 billion dollar overhaul of the FBI's existing fingerprint database to more quickly and accurately identify suspects, partly through applying other biometric markers, such as iris scans and voice recordings.

Often law enforcement authorities will "have a photo of a person and for whatever reason they just don't know who it is [but they know] this is clearly the missing link to our case," said Nick Megna, a unit chief at the FBI's criminal justice information services division. The new facial recognition service can help provide that missing link by retrieving a list of mug shots ranked in order of similarity to the features of the subject in the photo.

Today, an agent would have to already know the name of an individual to pull up the suspect's mug shot from among the 10 million shots stored in the bureau's existing Integrated Automated Fingerprint Identification System. Using the new Next-Generation Identification system that is under development, law enforcement analysts will be able to upload a photo of an unknown person; choose a desired number of results from two to 50 mug shots; and, within 15 minutes, receive identified mugs to inspect for potential matches. Users typically will request 20 candidates, Megna said. The service does not provide a direct match.

Michigan, Washington, Florida and North Carolina will participate in a test of the new search tool this winter before it is offered to criminal justice professionals across the country in 2014 as part of NGI. The project, which was awarded to Lockheed Martin Corp. in 2008, already has upgraded the FBI's fingerprint matching service.

Local authorities have the choice to file mug shots with the FBI as part of the booking process. The bureau expects its collection of shots to rival its repository of 70 million fingerprints once more officers are aware of the facial search's capabilities.

Thomas E. Bush III, who helped develop NGI's system requirements when he served as assistant director of the CJIS division between 2005 and 2009, said, "The idea was to be able to plug and play with these identifiers and biometrics." Law enforcement personnel saw value in facial recognition and the technology was maturing, said the 33-year FBI veteran who now serves as a private consultant.

NGI's incremental construction seems to align with the White House's push to deploy new information technology in phases so features can be scrapped if they don't meet expectations or run over budget.

But immigrant rights groups have raised concerns that the Homeland Security Department, which exchanges digital prints with the FBI, will abuse the new facial recognition component. Currently, a controversial DHS immigrant fingerprinting program called Secure Communities runs FBI prints from booked offenders against the department's IDENT biometric database to check whether they are in the country illegally. Homeland Security officials say they extradite only the most dangerous aliens, including convicted murderers and rapists. But critics say the FBI-DHS print swapping ensnares as many foreigners as possible, including those whose charges are minor or are ultimately dismissed.

Megna said Homeland Security is not part of the facial recognition pilot. But, Bush said in the future NGI's data, including the photos, will be accessible by Homeland Security's IDENT.

The planned addition of facial searches worries Sunita Patel, a staff attorney with the Center for Constitutional Rights, who said, "Any database of personal identity information is bound to have mistakes. And with the most personal immutable traits like our facial features and fingerprints, the public can't afford a mistake."

In addition, Patel said she is concerned about the involvement of local police in information sharing for federal immigration enforcement purposes. "The federal government is using local cops to create a massive surveillance system," she said.

Bush said, "We do have the capability to search against each other's systems," but added, "if you don't come to the attention of law enforcement you don't have anything to fear from these systems."

Other civil liberties advocates questioned whether the facial recognition application would retrieve mug shots of those who have simply been arrested. "It might be appropriate to have nonconvicted people out of that system," said Jim Harper, director of information policy at the libertarian Cato Institute. FBI officials declined to comment on the recommendation.

Harper also noted large-scale searches may generate a lot of false positives, or incorrect matches. Facial recognition "is more accurate with a Google or a Facebook, because they will have anywhere from a half-dozen to a dozen pictures of an individual, whereas I imagine the FBI has one or two mug shots," he said.

FBI officials would not disclose the name of the search product or the vendor, but said they gained insights on the technique's accuracy by studying research from the National Institute of Standards and Technology.

In responding to concerns about the creation of a Big Brother database for tracking innocent Americans, Megna said the system will not alter the FBI's authorities or the way it conducts business. "This doesn't change or create any new exchanges of data," he said. "It only provides [law enforcement] with a new service to determine what photos are of interest to them."

In 2008, the FBI released a privacy impact assessment summarizing its appraisal of controls in place to ensure compliance with federal privacy regulations. Megna said that, during meetings with the CJIS Advisory Policy Board and the National Crime Prevention and Privacy Compact Council, "we haven't gotten a whole lot of pushback on the photo capability."

The FBI has an elaborate system of checks and balances to guard fingerprints, palm prints, mug shots and all manner of criminal history data, he said.

"This is not something where we want to collect a bunch of surveillance film" and enter it in the system, Megna said. "That would be useless to us. It would be useless to our users."

Source:
http://www.nextgov.com/nextgov/ng_20111007_6100.php
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2011-10-08T11:39:00.000-04:00

Arctic ozone loss at record level

By Richard Black
BBC News
Oct. 2, 2011

The Arctic ozone hole lay over over populated regions for parts of winter and spring

Ozone loss over the Arctic this year was so severe that for the first time it could be called an "ozone hole" like the Antarctic one, scientists report.

About 20km (13 miles) above the ground, 80% of the ozone was lost, they say.

The cause was an unusually long spell of cold weather at altitude. In cold conditions, the chlorine chemicals that destroy ozone are at their most active.

It is currently impossible to predict if such losses will occur again, the team writes in the journal Nature.
Early data on the scale of Arctic ozone destruction were released in April, but the Nature paper is the first that has fully analysed the data.

"Winter in the Arctic stratosphere is highly variable - some are warm, some are cold," said Michelle Santee from Nasa's Jet Propulsion Laboratory (JPL).

"But over the last few decades, the winters that are cold have been getting colder.

"So given that trend and the high variability, we'd anticipate that we'll have other cold ones, and if that happens while chlorine levels are high, we'd anticipate that we'd have severe ozone loss."

Ozone-destroying chemicals originate in substances such as chlorofluorocarbons (CFCs) that came into use late last century in appliances including refrigerators and fire extinguishers.

Their destructive effects were first documented in the Antarctic, which now sees severe ozone depletion in each of its winters.

Their use was progressively restricted and then eliminated by the 1987 Montreal Protocol and its successors.

The ozone layer blocks ultraviolet-B rays from the Sun, which can cause skin cancer and other medical conditions.

Longer, not colder

Winter temperatures in the Arctic stratosphere do not generally fall as low as at the southern end of the world.

No records for low temperature were set this year, but the air remained at its coldest for an unusually long period of time, and covered an unusually large area.

In addition, the polar vortex was stronger than usual. Here, winds circulate around the edge of the Arctic region, somewhat isolating it from the main world weather systems.

"Why [all this] occurred will take years of detailed study," said Dr Santee.

"It was continuously cold from December through April, and that has never happened before in the Arctic in the instrumental record."

The size and position of the ozone hole changed over time, as the vortex moved northwards or southwards over different regions.

Some monitoring stations in northern Europe and Russia recorded enhanced levels of ultraviolet-B penetration, though it is not clear that this posed any risk to human health.

While the Arctic was setting records, the Antarctic ozone hole is relatively stable from year to year.

This year has seen ozone-depleting conditions extending a little later into the southern hemisphere spring than usual - again, as a result of unusual weather conditions.

Chlorine compounds persist for decades in the upper atmosphere, meaning that it will probably be mid-century before the ozone layer is restored to its pre-industrial health.

Leaked Oil Documents Confirm: America Is Being Skullfucked By Oil Speculators…

By Yasha Levine
The Exiled
Class War For Idiots
September 18, 2011

Back in April I wrote a couple of articles about how rampant speculation by Koch Industries, Goldman Sachs and other big players in the energy markets has been driving up the price of oil. Immediately, a bunch of freemarket sockpuppets came out of the woodwork and infested our comments section, repeating the same invisible-hand-knows-best bullshit: Speculators are a force of good, not evil; they don’t drive up prices, but in fact help keep them low. Sounds plausible, right?

Well, a few weeks ago Senator Bernie Sanders leaked a small batch of secret energy trading data compiled by the U.S. Commodity Futures Trading Commission which showed that in the summer of 2008, when the price of oil was spiking to a record $148 per barrel, the oil commodities market was one giant speculatory cesspool dominated by the largest fraud-ridden banks, investment funds and oil companies in the world, including Goldman Sachs, JP Morgan Chase, BP and Koch Industries.

Thinkprogress’ Lee Fang recently wrote about the leaked data:

As experts from Stanford University, Rice University, the University of Massachusetts, and authorities have concluded, rampant oil speculation was the prime driver of the record high prices for crude oil three years ago.

Notably, the top speculators are noncommercial players, meaning they are companies that simply and buy and sell crude contracts with no interest in actually refining and selling the product. Each contract in the list represents 1,000 barrels of oil. The documents show the total volume of trades made on one specific day shortly before the record high price of $148 per barrel.

The data, though revealing, still does not give a complete picture of trading strategies. Speculators invest in multiple private exchanges, and trading tactics can shift from day to day. Moreover physical plays, such as buying up large quantities of actual oil and storing it on tankers or in large containers, are still largely hidden from public view.

I looked at the underlying data myself, and what it shows ain’t pretty: For instance, as far as the oil futures are concerned, speculators from financial and commodity trading outfits accounted for 65 to 80 percent of the entire market. Just the two top speculators of the bunch—Goldman Sachs and Dutch/Swiss energy trading company Vitol SA—represented 20 percent of the market, while the top five players—which included Morgan Stanley, Barclays and JP Morgan Chase—accounted for more than 30 percent of all oil trading activity. (A bit of oil speculation trivia: Vitol was the first company to buy oil from Libya’s rebels a few months back, and just made $1 billion on the gamble.)

And here’s the kicker: not only did speculators dominate the energy market, they appeared to be playing both sides of the bet—meaning that they had positioned themselves to make money on both the expansion and the popping of the oil bubble. The Wall Street Journal made this stunning admission itself in an article published last month, which they naturally buried way down in the article:

The list was drawn up amid intense scrutiny faced by the CFTC during the 2008 spike. The CFTC sought data on rapidly growing corners of the commodity markets, including private contracts negotiated “over-the-counter.”

Commodities are traditionally traded on exchanges via futures contracts, which the CFTC regulates. But the CFTC typically sees the impact of over-the-counter trades indirectly, as when a bank sells a contract and buys related futures. And banks often offset the trades internally.
Over-the-counter trading exploded in recent years amid rising investor interest in riding the wave carrying prices for oil and other commodities higher.

“We were under enormous pressure to find out what was going on,” says Jeffrey Harris, then the CFTC’s chief economist.

Wall Street was the biggest presence because banks often take one side of over-the-counter trades.

Goldman topped the list, with the equivalent of 451,997 contracts that would profit if oil rose, or “long” bets, and 419,324 contracts that would pay off if prices dropped, or “short” bets. Much of that likely represented Goldman being on the other side of client trades, according to people familiar with the matter.

You might remember that the good folks at Goldman have been known to bet “on the other side of client trades” before. Most recently, Goldman Sachs bet against crap mortgage-backed securities at the height of the real estate bubble in 2006, even as it was selling/peddling them as sure-bet investments to their clients.

SEC accuses Goldman Sachs of defrauding investors
Marcy Gordon, AP Business Writer, On Friday April 16, 2010

The government on Friday accused Wall Street’s most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.

And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the “exotic trades” he created “without necessarily understanding all of the implications of those monstrosities!!!”

The civil charges filed by the Securities and Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

So is the Wall Street Journal saying that Goldman Sachs was doing exactly the same thing in the oil/energy futures markets as it did with CDOs and mortgage-backed securities? Was the firm helping drive the price of oil sky high and steering its investors into the market, only to simultaneously bet that the whole thing would come crashing down? It appears that may be exactly what they were doing…and Goldman wasn’t alone, either. The data clearly shows that just about all the big financial/trading houses had the same one-to-one long/short spread. And that includes Koch Industries’ commodity trading subsidiary, Koch Supply & Trading LP, which had $9.75 billion in bets riding on the price of oil going up, and $11.1 billion on it going down.

You can check out all the energy speculation data for yourself here.

While most Americans find this not just odious but bad for everyone who’s not an oil speculator, the Cato Institute’s Mark A. Calabria, director of Koch-oriented financial regulation studies, sees things another way: “Speculators deliver value and help price assets more precisely.” That’s right, they price them higher so as to extract more money from peasants like me and you.

Yasha Levine is an editor of The eXiled. You can reach him at levine [at] exiledonline.com. Want to know more? Read Yasha Levine’s previous posts on the Koch-oil speculation connection: “The Koch Brothers: Dark Lords of Derivatives” and “Koch Industries Lackeys Admit to Manipulating Oil Prices…and Gloat About It, Too.”

Source:
http://exiledonline.com/leaked-oil-documents-confirm-america-is-being-skullfucked-by-oil-speculators/
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2011-09-24T19:47:00.000-04:00

Fox freaks after Ron Paul wins debate

Russian Times
Sept. 23, 2011
[emphasis added]

If you’ve noticed a lack of Ron Paul in the mainstream media’s coverage of the 2012 presidential race, it might not be an accident. After he placed first in a Fox News poll, the outlet has removed the results from their website without explanation.

Fox had launched an online poll to gauge readers’ opinions on last night’s Republican show-down and asked their audience, “Which GOP presidential candidate do you think won the Fox News/Google debate?” At one point Paul placed in first, with 30 percent of the votes, but a reader of Infowars.com has pointed out that the poll has disappeared from the website, or has been shuffled to another page far from the front of Fox’s political coverage.

Logging onto the poll now produces an error in which the user is told “No content item selected.”

A screen shot of the poll produced by Infowars shows that Paul led with 24,8945 votes, with Mitt Romney trailing in second place with 22,656 votes, of 27 percent of the total. Rick Perry placed third with 15 percent of the votes, followed by Herman Cain with 9 percent.

Speaking from the stage during last night’s debate, Paul reminded the audience that he has been placing quite well in most surveys as of late. The mainstream media, however, continues to ignore him, despite pleasant polling.

When quizzed during last night’s debate from Orlando, Florida on whom he might consider as a running mate, Paul deterred the question and noted that he wouldn’t bother selecting anyone until he made it in the “top two.” In the meantime, Paul said, he was running in third in most national polls.

The mainstream media continues to overlook Paul, however, favoring Rick Perry and Mitt Romney as the frontrunners, and unexplainably offering more airtime to Michele Bachmann. Speaking to CNN yesterday, former presidential candidate and long-time activist Ralph Nader said he thought Paul was perhaps most appealing of the current GOP candidates.

“He wants to get out of these wars overseas, he wants to bring the soldiers back, he wants to cut the bloated military budget, he wants to change some of the anti-civil liberty provisions in the Patriot Act, he hates corporate welfare an all these bailouts of Wall Street crooks,” said Nader. “He ought to get more attention, instead of ten times more attention being given to Michele Bachmann.”

A USA Today/Gallup poll released on Tuesday put Paul as the number three candidate in the GOP race, receiving nearly three times the favor of Bachmann. In New Hampshire, where the first primary of the 2012 race will take place this winter, Paul came in second place, between Mitt Romney in first and Jon Huntsman in second.

Other articles:
Ron Paul wins online straw poll
http://rt.com/usa/news/ron-paul-straw-poll/

Source:
http://rt.com/usa/news/fox-paul-debate-poll-257/
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2011-09-19T17:59:00.000-04:00

Chinese Villagers Protest Pollution

By Brian Spegele
Wall Street Journal
Sept. 19, 2011

Hundreds of people in eastern China carried out sometimes violent protests over pollution they blame on a solar-panel maker's factory, the latest example of unrest spurred by anger over the country's environmental problems.

Authorities detained several demonstrators for alleged theft and vandalism in the protests, which began Thursday and continued over the weekend at the Zhejiang Jinko Solar Co. factory in the city of Haining in Zhejiang province, according to state media and the local government. The company is owned by New York Stock Exchange-listed JinkoSolar Holding Co.

After more than 500 people gathered outside the gates Thursday, demonstrators stormed the factory compound, according the state-run Xinhua news agency, where they flipped over company vehicles and damaged the solar company's offices before police arrived to disperse the crowd. Villagers had complained last month about the deaths of a large number of fish in a nearby river, according to Xinhua.

Chinese citizens have grown increasing bold in challenging the country's widespread environmental woes, despite the threat of government punishment of protesters. While maintaining a tight grip on dissent, authorities have increasingly tried to appear responsive to such complaints, although critics say the ultimate problem is the leadership's emphasis on rapid economic growth and industrialization.

On Friday, the Shanghai Environmental Protection Bureau said it had halted production at two factories, including a battery plant operated by U.S.-based Johnson Controls Inc., after detecting elevated lead levels in a "small" number of children nearby. That followed days of complaints by people living in the vicinity of the plant. A spokeswoman for Johnson Controls said it was working with authorities but had no reason to believe its plant was the source of the problem.

Last month, more than 12,000 people protested in the northeastern city of Dalian against a petrochemical plant there after a tropical storm heightened concerns about the possibility of a toxic spill. The city government promised to close the plant.

In the latest incident, Xinhua quoted a local environmental protection bureau official, Chen Hongming, as saying the Zhejiang Jinko factory had failed pollution tests since April, and conceding the local government did not do enough to control the pollution.

Zhejiang Jinko's parent is a producer of solar components and photovoltaic panels, according to its website. The company had not issued a statement on the protests as of Sunday night and couldn't be reached for comment.

Haining officials said at a press conference Saturday that several demonstrators had been detained for alleged theft and destroying Zhejiang Jinko property. One man, whom the government identified by only his surname, Sun, had been detained for spreading rumors online, local officials said.

Source:
http://online.wsj.com/article/SB10001424053111904106704576578442998803296.html
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2011-09-17T09:31:00.000-04:00

Signs of a US dollar shortage

Two madmen share their delusions,Timothy Geithner and Jim Kramer

RealEconTV.com
Sept. 14, 2011

If you want to know what the official "all is well" consensus is, tune in to this mutual love fest between Jim "BUY-BUY-BUY" Kramer and Tim "Take another billion, please" Geithner.

Two men who when the inevitable happens will live in infamy as Brooks Brothers-clad cheerleaders who ran the CNBS/Fox Business- watching lemmings off the financial cliff.

Lots of embarrassing mutual congratulations here. However, an occasional zinger, like this one at 5:02 "Two banks last night needed $500 million+ IN US DOLLARS to be able to meet funding needs"(i.e. keep doors open) makes listening worthwhile.

Note that they didn't need gold, Euros, Swiss Francs or Yen to keep their doors open. They needed US DOLLARS (these were European banks.) For better or worse, for now and the foreseeable future, the US dollar is the world's reserve currency and much of the world's wealth is stored (and valued) in US dollars - and inconceivably huge mountains of debt are payable in the same.

Guess which side of the balance sheet is exponentially larger than the other. Savings or borrowed money? Even with massive defaults, there simply are not enough US dollars in the world to cover the tab.

See why the shortage in inevitable?

It's going to catch most of the world flat footed.

Source
http://www.realecontv.com/
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2011-09-15T20:11:00.001-04:00

The Phony Solyndra Solar Scandal

by Dave Johnson
September 15, 2011
Campaign for America's Future
News Analysis

Well here's a surprise: conservatives and oil interests are pushing deceptive and destructive stories about President Obama and clean energy. Imagine that! Their intent (as always) is to turn people against President Obama, clean energy, national energy policy, stimulus to help the economy, and government in general. It's what they do. Here is some information to help you push back on the latest whipped-up, anti-green, anti-government, anti-Obama "scandal."

Solyndra

Solyndra was a startup solar-power equipment manufacturer based in Fremont, California that went bankrupt at the end of August. The company's solar collectors used a special tubular internal design that let it collect light from all directions, and were made with a copper-indium-gallium-diselenide (CIGS) thin film that avoided using then-expensive silicon. It was one of several companies that received assistance from the government, in an attempt to push back on China's strategic targeting of green-energy manufacturing.

The company, partly backed by the conservative Walton family had received a loan guarantee from the Department of Energy. The loan, which was originally pushed by the Bush administration, was 1.3% of the DOE portfolio.

The economy tanked and cut demand, and at the same time Solyndra could not compete with subsidized companies located in China as they rapidly scaled up. So Solyndra ran out of money. Conservatives and oil interests are using the bankruptcy as a platform to attack green energy and the idea of green jobs in general, solar power in particular, President Obama as always, stimulus funding and the idea of developing a national strategic industrial policy to push back on China and others who have their own national policies to win this key industry of the future.

Conservative Attacks

Conservative are accusing the Obama administration of corruption in choosing Solyndra to receive a government loan guarantee. The typical conservative-outlet story follows a template of Glenn-Beckian accusations that someone "connected to" Obama has "ties" to something. When you hear the phrasing "has ties to" you should understand this as code-speak for "has nothing to do with but can be made to appear to have some sinister involvement if you twist the wording a certain way."

Example template story: Bankrupt solar company with fed backing has cozy ties to Obama admin,

A solar energy company that intends to file for bankruptcy received $535 million in backing from the federal government and has a cozy history with Democrats and the Obama administration, campaign finance records show.

Shareholders and executives of Solyndra, a green energy company producing solar panels, fundraised for and donated to the Obama administration to the tune of hundreds of thousands of dollars.

Tulsa billionaire George Kaiser, a key Obama backer who raised between $50,000 and $100,000 for the president’s election campaign, is one of Solyndra’s primary investors. Kaiser himself donated $53,500 to Obama’s 2008 election campaign, split between the DSCC and Obama For America. Kaiser also made several visits to the White House and appeared at some White House events next to Obama officials.

Campaign finance records show Kaiser and Solyndra executives and board members donated $87,050 total to Obama’s election campaign.

And now, just two years after securing a half-billion-dollar federal loan, Solyndra has said that it will declare Chapter 11 bankruptcy.

(Hold on to this part about Tulsa billionaire Kaiser as an investor for later.)

Another: Big Government, Sweethearts: Bankrupt Solar Power Firm Well Connected to White House,

"Obama’s stimulus money handouts carry the stench of political favoritism."

Another: Hot Air: How did Solyndra get a sweetheart interest rate?

FOX News has been promoting this "scandal" story heavily. (It should be noted here that Fox's parent company News Corp's 2nd-largest shareholder is oil billionaire Saudi Prince al-Waleed - an "oil interest" if ever there was one.) For example, FOX News, a template story with the ever-hopeful conservative headline: Obama's Pet Billionaire at Solyndra May Take White House Down,

A high profile, politically well-connected California solar energy company that had won a $535 million loan guarantee from the Obama Administration declared bankruptcy earlier this month and closed its doors sending 1100 workers to the unemployment line. The demise of Solyndra has already sparked an FBI investigation, congressional hearings, and raised numerous questions of political cronyism and corruption connected to the highest levels of the Obama Administration.

... One of the company's largest investors, George B. Kaiser of Tulsa, reportedly contributed $53,500 personally and bundled large amounts more for Obama in 2008. Kaiser is a billionaire with banking and oil and gas interests that rank him among the wealthiest people in the world. Kaiser also visited the White House 16 times between 2009 and 2011.

FOX News: RNC Uses Solyndra Investigation to Question New White House Jobs Proposal

FOX News: Could Solyndra Probe Mean Legal Trouble for White House?

FOX News: House GOP Widens Scope of Solyndra Investigation.

Etc., the story is repeated with various twists and added allegations throughout the conservative misinformation engine.

Jumps To "Mainstream"

As so often happens with the conservative machine, the story as spun by the right is jumping to "mainstream" news outlets. For example, this ABC story by Mathew Mosk, formerly of the Washington Times, and others, Emails: Obama White House Monitored Huge Loan to 'Connected' Firm pushes the conservative line, calling the firm "politically connected" and, reminiscent of Clinton-era Whitewater reporting, uses "investigators for the House Energy and Commerce Committee" -- in other words, conservative operatives -- as a source. The story claims the White House "closely monitored" Solyndra but offers no evidence of "close monitoring," says the company is the "subject of a criminal investigation" without explaining that the investigation is into whether the company misled the government about its financial status which would mean that administration officials did not knowingly provide a loan to a failing company, claims that a prominent Obama donor is "an investor" even though the donor's family foundation is the investor, which means the donor had nothing to gain, and to further the appearance of a sinister scheme by the Obama administration to hand money to political allies leaves out the financial involvement of the conservative Walton family. From ABC,

Newly uncovered emails show the White House closely monitored the Energy Department's deliberations over a $535 million government loan to Solyndra, the politically-connected solar energy firm that recently went bankrupt and is now the subject of a criminal investigation.
The company's solar panel factory was heralded as a centerpiece of the president's green energy plan -- billed as a way to jump start a promising new industry. And internal emails uncovered by investigators for the House Energy and Commerce Committee that were shared exclusively with ABC News show the Obama administration was keenly monitoring the progress of the loan, even as analysts were voicing serious concerns about the risk involved.

Background Of Corruption Allegations

Before looking at whether the Obama administration really had "ties to" people who had "ties to" Solyndra who somehow "benefited from" government loan guarantees, let's have a bit of a refresher on our recent history.

Under President Bush, conservative movement partners as well as companies and people with financial ties to Bush administration figures regularly received lucrative contracts under less-than-transparent circumstances that had every direct appearance of (forget "ties to") of corruption and cronyism. For example, Koch Submits Winning Bid To Supply Additional Oil to Strategic Reserve,

Koch Supply & Trading, LP, one of the world's largest crude oil trading companies, will become the newest supplier of crude oil to the Strategic Petroleum Reserve (SPR) under President Bush's plan, announced last November, to fill the nation's emergency oil stockpile to its full capacity by 2005.

Example, Fired Army Whistleblower Receives $970K for Exposing Halliburton No-Bid Contract in Iraq,

Bunnatine "Bunny" Greenhouse, the former chief oversight official of contracts at the Army Corps of Engineers, has reached a $970,000 settlement six years after she was demoted for publicly criticizing a multi-billion-dollar, no-bid contract to Halliburton—the company formerly headed by then-Vice President Dick Cheney. Greenhouse had accused the Pentagon of unfairly awarding the contract to Halliburton subsidiary Kellogg Brown & Root. Testifying before Congress in June 2005, she called the contract the worst case of government abuse she had ever witnessed in her 20-year career.

Example, Bush's Housing Secretary was caught awarding contracts based on party affiliation: Probe Finds Jackson Urged Favoritism in HUD Contracts,

An inspector general's report charges that top U.S. housing official Alphonso Jackson urged staff members to favor friends of President Bush when awarding Department of Housing and Urban Development contracts.

Attacking Green Manufacturing

The Solyndra accusations are really just one part of an ongoing conservative and oil-interests-funded anti-green-manufacturing campaign drumbeat. Long before Solyndra's bankruptcy the Heritage Foundation was running stories like 2008's Green Jobs Are Con Jobs, 2009's The Green Job Myth Exposed, and this year's Obama’s “Green Jobs” Pipe Dream, The Green Jobs Story Obama Doesn’t Want You to Hear, Are “Green Jobs” the Answer?, Are Green Jobs ‘Gone with the Wind’?...

Media Matters had previously exposed the nature of this ongoing effort, in Heritage Foundation Green Jobs Panel - Bought and Paid For By ExxonMobil,

Instead of showcasing the views of unbiased academics and economists, the Heritage Foundation put forth a panel of individuals financially connected to ExxonMobil.
... The ENTIRE PANEL Received Money From ExxonMobil.

More conservative-outlet examples include the ever-malignant Fox News: Solyndra Investigation Begins Critical Look at Federally Funded Green Ventures.

Other conservative outlets continue the drumbeat, Obama’s green dream hurting U.S. taxpayers by Linda Chavez.

Another: Obama Green Jobs Con Job and the Ill Wind That Blows from Spain,

Obama has become tiresome. He is over-exposed. He has overstayed his welcome. We can hear the clichés that will be laced through his speech even before he speaks -- the opposite of an echo. The promises will be there -- what else can he sell? Certainly not his record on the economy.

He has always been a snake oil salesman; such people always tempt the needy with promises of great things to come. So we will once more hear him tout his policies as creating legions of new "green jobs" while making America the world leader in green energy. We have heard it before. He must either think we are stuck on stupid or he is the one stuck on stupid. This policy has clearly been one giant Green Jobs Con Job.

Another: Reason: Obama's Green Jobs Failures and Obama's Green-Jobs Fantasy and The Green Jobs Delusion and The Unseen Consequences of "Green Jobs": Will investing in clean energy harm the economy?...

NewsMax: Green Jobs Spending Is a Waste of Greenbacks, "If the congressional “supercommittee” wants to cut wasteful spending, the green-jobs agenda is a great place to start."

And more and more and more and more...

What Really Happened

A very good summary of the whole story, as well as a look into the details of the investment can be found in the Time/Swampland Michael Grunwald story, Big Name Investors Behind Obama’s Failed Green Tech Bet First in Line to Recoup Losses, summary: (read the whole thing)

This is sure to play out as a scandal, but based on what we know so far, it shouldn’t be. Private loans go south all the time. ... The Obama administration has made bets on hundreds of clean-energy companies in dozens of clean-energy sectors; some of those bets in its portfolio are bound to go bad, just as Richard Branson picks an occasional lemon. It’s legitimate to question whether the government should have made this particular bet, or whether it overplayed a weak hand, or whether it should be making bets in the first place. But if we’re going to have a clean energy industry in this country, this kind of thing is going to happen. It doesn’t mean anyone cheated.

Background of the company's failure, from the Swampland piece,

Solyndra’s loan, the first approved under a clean-energy program that was launched during the Bush administration and expanded by Obama’s stimulus bill, was supposed to finance a new state-of-the-art factory for the company’s unique cylindrical solar cells. At the time, Solyndra was an exciting startup; according to the public filings, it attracted big money from bigtime financiers, including $35 million from Richard Branson’s Virgin Green Fund, $57 million from U.S. Venture Partners, and even $2 million from affiliates of Kohlberg Kravis Roberts.
... [later] The biggest problem was obvious; in an industry where prices were plummeting, Solyndra’s product was too expensive. It desperately needed to finish its new factory, which would increase volume and decrease costs. And it needed more sales.

By last November, the company was running out of cash; according to a January 2011 government document, it had “a very high probability” of bankruptcy and liquidation. This was a big problem, not only because the company had drawn down $460 million of its loan, but because its new factory wasn’t even completed, which meant liquidation would be a fire sale.

The other option was restructuring. Kaiser’s Argonaut Ventures and the Walton family’s Madrone Partners would put up an additional $75 million, which would take the first position in case of a liquidation; the government would still be paid first if the company managed to emerge from bankruptcy. Meanwhile, the Department of Energy ... ultimately concluded it did have a potentially viable business. The new factory was on time and on budget. Sales were increasing steadily. And even if Solyndra failed, it would be much more valuable with a completed high-tech plant than with an empty box in Fremont, California.

“The restructuring gave Solyndra a fighting chance for success,” that same official says. “But then everything fell off a cliff.”

In the summer of 2011, solar panel prices plummeted again. The investors had been poised to inject another $75 million, but this time, they decided not to throw good money after bad. Solyndra shut down and laid off its 1,100 employees.

Investors

The conservatives make the accusation that an Obama donor named George Kaiser is a major investor in Solyndra, and Solyndra received the loan guarantee as a result of Kaiser's (and others) campaign contributions, in order to personally profit. The problem with this is that George Kaiser was not an investor in Solyndra, the Kaiser Family Foundation was. According to Tulsa World,

In an emailed statement to the Tulsa World, a representative of the George Kaiser Family Foundation said the organization made the investment through Argonaut.

"George Kaiser is not an investor in Solyndra and did not participate in any discussions with the U.S. government regarding the loan," the statement said. "GKFF invests in a globally diversified portfolio across many different asset classes."

The Kaiser Family Foundation is a philanthropic organization, which means Kaiser (or anyone else) could not personally profit from a successful investment by the foundation. One of the areas of focus of the foundation is the National Energy Policy Institute, so Solyndra was a natural investment for the Foundation:

National Energy Policy Institute (NEPI) is a GKFF effort to establish a rational energy policy that will effectively reduce U.S. dependence on foreign oil. American political leaders have espoused energy independence for decades. NEPI's goal is to move beyond total oil dependence and to supplant consumption of imported oil through increased domestic energy supply, reduced foreign oil and gas demand and lower carbon emissions to include enhancement of traditional sources of domestic oil, gas and coal.

The conservative Wal-Mart Walton Family, however, were private investors through their Madrone Capital, and at the time that the Bush administration started pushing the Solyndra loan were in a position to peronally profit from this investment. If any accusation of an expectation of personal enrichment obtained from political connections should be investigated, it is this one. Will the Republican House look into the connections between the Walton family and Bush administration officials, and the Bush administrations efforts to provide loans to Solyndra?

The Government Didn't Lose

Even though Solyndra went into bankruptcy the government didn't "lose." The purpose of the government's involvement was to help trigger the development of green-energy manufacturing in the United States, not to help individual companies. This was not a direct investment in a company with the expectation of a profit for the government. In the bigger picture of promoting American leadership in the emerging green-energy industry the government's loan guarantee was a success. Even though Solyndra's investors lost out our country retains the trained skilled employees, the intellectual property, the innovators funded, the suppliers, and the factory. As components of a national effort to trigger a key strategic industry, those are all still there and in the US.

It isn't the government's job to make sure the investors make money, the government's job is to work to keep all of these components of an industry here and to grow new ones here, and this is what has been accomplished. When a VC makes an investment, a company failing just goes on the books as a loss. But our government has succeeded even if Solyndra's investors lost money because the country as a whole benefits. All these employees are trained, all the researchers can take what they know to other solar companies, the IP is going to be sold -- and it should be part of the conditions that it be sold to an American company. So while Solyndra's for-profit investors lost money, America's larger effort to nurture a solar-power industry continues toward its goal with assets enabled by this loan guarantee.

Facts:

The loan program started under President Bush (note - see above, Walton family.) From the San Jose Mercury News, October, 2008:

In late 2007, Solyndra was one of 16 clean-tech companies deemed eligible for $4 billion worth of loan guarantees from the U.S. Department of Energy. Tesla Motors, the Silicon Valley electric carmaker, and Oakland's BrightSource Energy, a builder of solar-thermal plants, also made that list.

The effort to fund Solyndra in particular started under Bush (note - see above, Walton family.) DOE: A Competition Worth Winning, (PS look at the chart in this post to understand why loan guarantees and other government assistance are so important!!!)

This loan guarantee was pursued by both the Bush and Obama Administrations. Private sector investors – who put more than $1 billion of their own money on the line – also saw great potential in the company.

Also, from the DOE post, the reason it is important for government to do this:

Our loan program catalyzes American innovation and private sector investment behind promising companies -- so that American workers have a chance to compete against China and other countries that much more heavily subsidize clean energy companies.

The loan was 1.3% of the DOE portfolio.

Feds Refused to Bail Out Solyndra,

One day after the federal government refused to bail out Solyndra, the Fremont-based solar company announced it was filing for bankruptcy and shedding most of its 1,100 workers.
According to a memo released Monday by the House Energy and Commerce Committee, officials with the Department of Energy and Solyndra entered into negotiations "in the first few weeks of August" over a proposed financial restructuring agreement, but were never able to reach an agreement.

Resources

Think Progress has an excellent timeline of the Solyndra loan guarantee: Exclusive Timeline: Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story

Grist has a good story laying out how conservatives are attacking green energy. See The conservative game plan on energy subsidies

Grist also looks into the Bush adminsitration's efforts on behalf of Solyndra, in,Bush admin pushed Solyndra loan guarantee for two years.

Source:
http://www.truth-out.org/phony-solyndra-solar-scandal/1316098873
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2011-09-04T14:27:00.001-04:00

Unredacted U.S. Diplomatic WikiLeaks Cables Published

By Bruce Schneier
Schneier on Security
A blog covering security and security technology.
September 1, 2011
( Go to this articles link to read the important comments on this story)

It looks as if the entire mass of U.S. diplomatic cables that WikiLeaks had is available online somewhere. How this came about is a good illustration of how security can go wrong in ways you don't expect.
Near as I can tell, this is what happened:

In order to send the Guardian the cables, WikiLeaks encrypted them and put them on its website at a hidden URL.
WikiLeaks sent the Guardian the URL.
WikiLeaks sent the Guardian the encryption key.
The Guardian downloaded and decrypted the file.
WikiLeaks removed the file from their server.
Somehow, the encrypted file ends up on BitTorrent. Perhaps someone found the hidden URL, downloaded the file, and then uploaded it to BitTorrent. Perhaps it is the "insurance file." I don't know.
The Guardian published a book about WikiLeaks. Thinking the decryption key had no value, it published the key in the book.
A reader used the key from the book to decrypt the archive from BitTorrent, and published the decrypted version: all the U.S. diplomatic cables in unredacted form.

Memo to the Guardian: Publishing encryption keys is almost always a bad idea.
Memo to WikiLeaks: Using the same key for the Guardian and for the insurance file -- if that's what you did -- was a bad idea.

EDITED TO ADD (9/1): From pp 138-9 of WikiLeaks:

Assange wrote down on a scrap of paper: ACollectionOfHistorySince_1966_ToThe_PresentDay#. "That's the password," he said. "But you have to add one extra word when you type it in. You have to put in the word 'Diplomatic' before the word 'History'. Can you remember that?"

I think we can all agree that that's a secure encryption key.

EDITED TO ADD (9/1): WikiLeaks says that the Guardian file and the insurance file are not encrypted with the same key. Which brings us back to the question: how did the encrypted Guardian file get loose?

EDITED TO ADD (9/1): Spiegel has the detailed story.

ArsTechnica Article
WikiLeaks: unredacted cable release is Guardian's fault
http://arstechnica.com/tech-policy/news/2011/09/wikileaks-unredacted-cable-release-is-guardians-fault.ars

Der Spiegel article:
A Dispatch Disaster in Six Acts
http://www.spiegel.de/international/world/0,1518,783778,00.html

Pastebin Remark:
http://pastebin.com/SBq9Xpsr

Source:
http://www.schneier.com/blog/archives/2011/09/unredacted_us_d.ht ml
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2011-09-01T18:03:00.000-04:00

Guardian journalist negligently disclosed Cablegate passwords

WIKILEAKS EDITORIAL
September 1, 2011

A Guardian journalist has negligently disclosed top secret WikiLeaks’ decryption passwords to hundreds of thousands of unredacted unpublished US diplomatic cables.

Knowledge of the Guardian disclosure has spread privately over several months but reached critical mass last week. The unpublished WikiLeaks’ material includes over 100,000 classified unredacted cables that were being analyzed, in parts, by over 50 media and human rights organizations from around the world.

For the past month WikiLeaks has been in the unenviable position of not being able to comment on what has happened, since to do so would be to draw attention to the decryption passwords in the Guardian book. Now that the connection has been made public by others we can explain what happened and what we intend to do.

WikiLeaks has commenced pre-litigation action against the Guardian and an individual in Germany who was distributing the Guardian passwords for personal gain.

Over the past nine months, WikiLeaks has been releasing US diplomatic cables according to a carefully laid out plan to stimulate profound changes. A number of human rights groups, including Amnesty International, believe that the co-ordinated release of the cables contributed to triggering the Arab Spring. By forming partnerships with over 90 other media and human rights organizations WikiLeaks has been laying the ground for positive political change all over the world.

The WikiLeaks method involves a sophisticated procedure of packaging leaked US diplomatic cables up into country groups or themes, such as ’resources corruption’, and providing it to those organizations that agreed to do the most research in exchange for time-limited exclusivity. As part of the WikiLeaks agreement, these groups, using their local knowledge, remove the names of persons reporting unjust acts to US embassies, and feed the results back to WikiLeaks.

WikiLeaks then publishes, simultaneously with its partners, the underlying cables together with the politically explosive revelations. This way publications that are too frightened to publish the cables have the proof they need, and the public can check to make sure the claims are accurate.

Over time WikiLeaks has been building up, and publishing, the complete Cablegate "library"—the most significant political document ever published. The mammoth task of reading and lightly redacting what amounts to 3,000 volumes or 284 million words of global political history is shared by WikiLeaks and its partners. That careful work has been compromised as a result of the recklessness of the Guardian.

Revolutions and reforms are in danger of being lost as the unpublished cables spread to intelligence contractors and governments before the public. The Arab Spring would not have started in the manner it did if the Tunisian government of Ben Ali had copies of those WikiLeaks releases which helped to take down his government. Similarly, it is possible that the torturing Egyptian internal security chief, Suleiman—Washington’s proposed replacement for Mubarak—would now be the acting ruler of Egypt, had he acquired copies of the cables that exposed his methods prior to their publication.

Indeed, it is one of the indelible stains on Hillary Clinton that she personally set course to forewarn dozens of corrupt leaders, including Hosni Mubarak, about some of the most powerful details of WikiLeaks’ revelations to come.

Every day that the corrupt leadership of a country or organization knows of a pending WikiLeaks disclosure is a day spent planning how to crush revolution and reform.

Guardian investigations editor, David Leigh, recklessly, and without gaining our approval, knowingly disclosed the decryption passwords in a book published by the Guardian. Leigh states the book was rushed forward to be written in three weeks—the rights were then sold to Hollywood.

The following extract is from the Guardian book:

Leigh tried his best not to fall out with this Australian impresario, who was prone to criticise what he called the “snaky Brits”. Instead, Leigh used his ever-shifting demands as a negotiating lever. “You want us to postpone the Iraq logs’ publication so you can get some TV,” he said. [WikiLeaks: We required more time for redactions and to complete three Iraq war documentaries commissioned through the Bureau of Investigative Journalism. The documentaries were syndicated through Channel 4 (UK) and al Jazeera English and Arabic] “We could refuse, and simply go ahead with publication as planned. If you want us to do something for you, then you’ve got to do something for us as well.” He asked Assange to stop procrastinating, and hand over the biggest trove of all: the cables. Assange said, “I could give you half of them, covering the first 50% of the period.”

Leigh refused. All or nothing, he said. “What happens if you end up in an orange jump-suit en route to Guantánamo before you can release the full files?” In return he would give Assange a promise to keep the cables secure, and not to publish them until the time came. Assange had always been vague about timing: he generally indicated, however, that October would be a suitable date. He believed the US army’s charges against the imprisoned soldier Bradley Manning would have crystallised by then, and publication could not make his fate any worse. He also said, echoing Leigh’s gallows humour: “I’m going to need to be safe in Cuba first!” Eventually, Assange capitulated. Late at night, after a two-hour debate, he started the process on one of his little netbooks that would enable Leigh to download the entire tranche of cables. The Guardian journalist had to set up the PGP encryption system on his laptop at home across the other side of London. Then he could feed in a password. Assange wrote down on a scrap of paper:

[WikiLeaks: we have replaced the password with Xs] XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

“That’s the password,” he said. “But you have to add one extra word when you type it in. You have to put in the word ‘XXXXXXX’ before the word ‘XXXXXX’ [WikiLeaks: so if the paper were seized, the password would not work without Leigh’s co-operation] Can you remember that?” “I can remember that.” Leigh set off home, and successfully installed the PGP software.

The Guardian disclosure is a violation of the confidentiality agreement between WikiLeaks and Alan Rusbridger, editor-in-chief of the Guardian, signed July 30, 2010. David Leigh is also Alan Rusbridger’s brother in law, which has caused other Guardian journalists to claim that David Leigh has been unfairly protected from the fallout. It is not the first time the WikiLeaks security agreement has been violated by the Guardian.

WikiLeaks severed future projects with the Guardian in December last year after it was discovered that the Guardian was engaged in a conspiracy to publish the cables without the knowledge of WikiLeaks, seriously compromising the security of our people in the United States and an alleged source who was in pre-trial detention.

Leigh, without any basis, and in a flagrant violation of journalistic ethics, named Bradley Manning as the Cablegate source in his book. David Leigh secretly passed the entire archive to Bill Keller of the New York Times, in September 2011, or before, knowingly destroying WikiLeaks plans to publish instead with the Washington Post & McClatchy.

David Leigh and the Guardian have subsequently and repeatedly violated WikiLeaks security conditions, including our requirements that the unpublished cables be kept safe from state intelligence services by keeping them only on computers not connected to the internet. Ian Katz, Deputy Editor of the Guardian admitted in December 2010 meeting that this condition was not being followed by the Guardian.

PJ Crowley, State Department spokesman on the cables issue earlier this year, told AP on the 30th of August, 2011 that “any autocratic security service worth its salt” would probably already have the complete unredacted archive.

Two weeks ago, when it was discovered that information about the Leigh book had spread so much that it was about to be published in the German weekly Freitag, WikiLeaks took emergency action, asking the editor not allude to the Leigh book, and tasked its lawyers to demand those maliciously spreading its details about the Leigh book stop.

WikiLeaks advanced its regular publication schedule, to get as much of the material as possible into the hands of journalists and human rights lawyers who need it. WikiLeaks and its partners were scheduled to have published most of the Cablegate material by November 29, 2011 – one year since the first publication.

Over the past week, we have published over 130,000 cables, mostly unclassified.

The cables have lead to hundreds of important news stories around the world. All were unclassified with the exception of the Australian, Swedish collections, and a few others, which were scheduled by our partners.

WikiLeaks has also been in contact with Human Rights Watch and Amnesty at a senior level. We contacted the US embassy in London and then the State Department in Washington on 25 August to see if their informant notification program, instituted last year, was complete, and if not, to take such steps as would be helpful. Only after repeated attempts through high level channels and 36 hours after our first contact, did the State Department, although it had been made aware of the issue, respond. Cliff Johnson (a legal advisor at the Department of State) spoke to Julian Assange for 75 minutes, but the State Department decided not to meet in person to receive further information, which could not, at that stage, be safely transmitted over the telephone.

Source:
http://www.wikileaks.org/Guardian-journalist-negligently.html
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Anonymous attacked WikiLeaks

By Darren Pauli
SC Magazine Australia
Sep 1, 2011

Anonymous members have taken responsibility for launching a denial of service attack against Wikileaks this week using a custom-built tool that exploits a SQL server flaw.

Members were conducting field tests of the tool dubbed RefRef against several websites including WikiLeaks, Pastebin and was hitting 4Chan at the time of writing.

Users of a Twitter account linked to the RefRef attacks and an AnonOps blog described themselves as hacktivist with “a personal vendetta against WikiLeaks” adding that “we are sorry we took you down. We are even.”

Other Anonymous users had pledged support for Wikileaks and during this year and 2010 launched attacks against organisations which hindered or reviled the whistleblower organisation.

The RefRef tool was under development for months and was due for release mid September.

It exploited a known SQL injection vulnerability that overwhelmed a target’s resources by "using a target site's own processing power against itself" according to an AnonOps blog.

The tool would become useless against websites that had patched the vulnerability.

“So far, what they have is something that is platform neutral, leveraging JavaScript and vulnerabilities within SQL to create a devastating impact on the targeted website,” the AnonOps blog said.

Previously, Low Orbit Ion Canon (LOIC) was the go to weapon for Anonymous supporters during protests against dictators in North Africa, and Operation: Payback. However, LOIC is also the reason scores of people have been arrested in the last year, so many feel its time is at an end.

“An attack vector that has existed for some time, resource exhaustion is often skipped over by attackers who favour the brute force of a (Distributed Denial of Service) attack sourced from bots or tools such as LOIC”.

Pastebin administrators in a tweet asked Anonymous to not “test your software on us again”.

Source:
http://www.scmagazine.com.au/News/268898,anonymous-attacked-wikileaks.aspx
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2011-08-31T08:00:00.001-04:00

WikiLeaks crowdsources to pull gems from latest doc dump

By Hayley Tsukayama
Washington Post
08/24/2011

Those who follow WikiLeaks on Twitter are pulling small nuggets of information from the organization’s latest data dump and posting them to Twitter using the hashtag #wlfind.

Throughout the day on Wednesday, WikiLeaks has been posting small crowdsourced finds from approximately 35,000 cables the organization has promised to disseminate over the Web. The cables are now in a searchable database online as well.

The group has released diplomatic cables between the U.S. and a number of countries including Rwanda, Germany, Afghanistan, Iran, Russia and Israel. The data released by the group has caused Twitter users to pull out and rebroadcast tidbits of information meant to harm a variety of targets: some highlights include language in the cables that suggest the U.S. lobbied on behalf of Monsanto, and that Microsoft CEO Steve Ballmer said that the company is as Israeli as it is American.

The organization also released a press statement Wednesday saying that it has seen an unsealed order that its California-based hosting company, Dynadot, to release information on WikiLeaks founder Julian Assange. According to the statement, the government is looking to prosecute Assange under the Patriot Act. Dynadot has said it will comply, the statement said.

Source:
http://www.washingtonpost.com/blogs/faster-forward/post/wikileaks-crowdsources-to-pull-gems-from-latest-doc-dump/2011/08/24/gIQAVeW2bJ_blog.html
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2011-08-28T21:46:00.000-04:00

C.I.A. Demands Cuts in Book About 9/11 and Terror Fight

By Scott Shane
New York Times
Aug. 25, 2011

In what amounts to a fight over who gets to write the history of the Sept. 11 attacks and their aftermath, the Central Intelligence Agency is demanding extensive cuts from the memoir of a former F.B.I. agent who spent years near the center of the battle against Al Qaeda.

The agent, Ali H. Soufan, argues in the book that the C.I.A. missed a chance to derail the 2001 plot by withholding from the F.B.I. information about two future 9/11 hijackers living in San Diego, according to several people who have read the manuscript. And he gives a detailed, firsthand account of the C.I.A.’s move toward brutal treatment in its interrogations, saying the harsh methods used on the agency’s first important captive, Abu Zubaydah, were unnecessary and counterproductive.

Neither critique of the C.I.A. is new. In fact, some of the information that the agency argues is classified, according to two people who have seen the correspondence between the F.B.I. and C.I.A., has previously been disclosed in open Congressional hearings, the report of the national commission on 9/11 and even the 2007 memoir of George J. Tenet, the former C.I.A. director.

Mr. Soufan, an Arabic-speaking counterterrorism agent who played a central role in most major terrorism investigations between 1997 and 2005, has told colleagues he believes the cuts are intended not to protect national security but to prevent him from recounting episodes that in his view reflect badly on the C.I.A.

Some of the scores of cuts demanded by the C.I.A. from Mr. Soufan’s book, “The Black Banners: The Inside Story of 9/11 and the War Against Al Qaeda,” seem hard to explain on security grounds.

Among them, according to the people who have seen the correspondence, is a phrase from Mr. Soufan’s 2009 testimony at a Senate hearing, freely available both as video and transcript on the Web. Also chopped are references to the word “station” to describe the C.I.A.’s overseas offices, common parlance for decades.

The agency removed the pronouns “I” and “me” from a chapter in which Mr. Soufan describes his widely reported role in the interrogation of Abu Zubaydah, an important terrorist facilitator and training camp boss.

And agency officials took out references to the fact that a passport photo of one of the 9/11 hijackers who later lived in San Diego, Khalid al-Midhar, had been sent to the C.I.A. in January 2000 — an episode described both in the 9/11 commission report and Mr. Tenet’s book.

In a letter sent Aug. 19 to the F.B.I.’s general counsel, Valerie E. Caproni, a lawyer for Mr. Soufan, David N. Kelley, wrote that “credible sources have told Mr. Soufan that the agency has made a decision that this book should not be published because it will prove embarrassing to the agency.”

In a statement, Mr. Soufan called the C.I.A’s redactions to his book “ridiculous” but said he thought he would prevail in getting them restored for a later edition.

He said he believed that counterterrorism officers have an obligation to face squarely “where we made mistakes and let the American people down.” He added: “It saddens me that some are refusing to address past mistakes.”

A spokeswoman for the C.I.A., Jennifer Youngblood, said, “The suggestion that the Central Intelligence Agency has requested redactions on this publication because it doesn’t like the content is ridiculous. The C.I.A.’s pre-publication review process looks solely at the issue of whether information is classified.”

She noted that under the law, “Just because something is in the public domain doesn’t mean it’s been officially released or declassified by the U.S. government.”

A spokesman for the F.B.I., Michael P. Kortan, declined to comment.

The book, written with the assistance of Daniel Freedman, a colleague at Mr. Soufan’s New York security company, is scheduled to go on sale Sept. 12. Facing a deadline this week, the publisher, W. W. Norton and Company, decided to proceed with a first printing incorporating all the C.I.A.’s cuts.

If Mr. Soufan ultimately prevails in negotiations or a legal fight to get the excised material restored, Norton will print the unredacted version, said Drake McFeely, Norton’s president. “The C.I.A.’s redactions seem outrageous to me,” Mr. McFeely said. But he noted that they are concentrated in certain chapters and said “the book’s argument comes across clearly despite them.”

The regular appearance of memoirs by Bush administration officials has continued a debate over the facts surrounding the failure to prevent 9/11 and the tactics against terrorism that followed. In former Vice President Dick Cheney’s memoir, set for publication next week, he writes of the harsh interrogations that “the techniques worked.”

A book scheduled for publication next May by José A. Rodriguez Jr., a former senior C.I.A. official, is expected to give a far more laudatory account of the agency’s harsh interrogations than that of Mr. Soufan, as is evident from its tentative title: “Hard Measures: How Aggressive C.I.A. Actions After 9/11 Saved American Lives.”

Government employees who hold security clearances are required to have their books vetted for classified information before publication. But because decisions on what should be classified can be highly subjective, the prepublication review process often becomes a battle. Several former spies have gone to court to fight redactions to their books, and the Defense Department spent nearly $50,000 last year to buy and destroy the entire first printing of an intelligence officer’s book, which it said contained secrets.

The C.I.A. interrogation program sharply divided the C.I.A. and the F.B.I., whose director, Robert S. Mueller III, ordered agents to stop participating in the program after Mr. Soufan and other agents objected to the use of physical coercion. But some C.I.A. officers, too, opposed the brutal methods, including waterboarding, and it was their complaint to the C.I.A.’s inspector general that eventually led to the suspension of the program.

“The Black Banners” traces the origins and growth of Al Qaeda and describes the role of Mr. Soufan, 40, a Lebanese-American, in the investigations of the East African embassy bombings of 1998, the attack on the American destroyer Cole in 2000, 9/11 and the continuing campaign against terrorism.

Starting in May, F.B.I. officials reviewed Mr. Soufan’s 600-page manuscript, asking the author for evidence that dozens of names and facts were not classified. Mr. Soufan and Mr. Freedman agreed to change wording or substitute aliases for some names, and on July 12 the bureau told Mr. Soufan its review was complete.
In the meantime, however, the bureau had given the book to the C.I.A. Its reviewers responded this month with 78-page and 103-page faxes listing their cuts.

A version of this article appeared in print on August 26, 2011, on page A1 of the New York edition with the headline: C.I.A. Fighting Memoir of 9/11 By F.B.I. Agent.

Source:
http://www.nytimes.com/2011/08/26/us/26agent.html
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2011-08-22T10:03:00.001-04:00

The Myth of Mountaintop Removal Mining

Big Coal says it's a tough choice: we can have prosperity and jobs or a pristine environment, but not both. That's a Big Lie

Beth Wellington
Guardian UK
August 19, 201

CNN correspondent Soledad O'Brien's recent piece on mountaintop removal (MTR) in the Appalachian mountains has the troubling title, "Steady job or healthy environment: what [sic] would you choose?"

How about we choose both?

In any case, MTR does not, despite industry claims, deliver employment to offset its environmental damage. It's simply a win-win for Big Coal and its political supporters, and a lose-lose for ordinary people who live in mining areas. Whatever the industry would have you believe, basing an economy on coal is not a sustainable development plan. A study by the Appalachian Regional Commission noted the effects of mining on employment in Central Appalachia:

"As employment in Central Appalachia's mining sector has declined over time...many counties that were already typically experiencing relatively poor and tenuous economic circumstances...have been unable to successfully adapt to changing economic conditions."

Michael Hendryx and Melissa M Ahern found similar results when they investigated the region: "The heaviest coal mining areas of Appalachia had the poorest socio-economic conditions."
In addition to the negative impact on employment, mountaintop removal has terrible effects on the land. Rob Goodwin of Coal River Mountain Watch recently said of the land around Southern Appalachia:

"Southern Appalachia is unique. Because there were no glaciers here, the topsoil is some of the oldest in the world and that's why there are ramps, ginseng and molly moochers [morels], among other valuable species. What you are doing here on this mine site is destroying the 10,000-year-old species that, regardless of what you do, will not grow back."

The health toll is also steep, as several academic studies have indicated. This week, West Virginia's junior senator, Joe Manchin, was bashing the EPA at a constituent breakfast in Huntington. The Senate now has before it the House plan, the so-called Clean Water Cooperative Federalism Act of 2011 (HR 2018), which would restrict the EPA's ability to veto permits issued by the Army Corps of Engineers.

Janet Keating, executive director of Ohio Valley Environmental Coalition, attended and referred Manchin to what he'd said on CNN, that there is no clear evidence of human health impacts from MTR. She then handed him copies of the 18 studies showing or suggesting health impacts. Manchin told Keating that at the time the CNN show was taped, these studies were not available.
Huh? I had copies of those studies. Surely a US Senator and former governor has as much access to published information as I do?

The health and economic problems caused by coal may explain why we're not buying the attacks on the EPA. A majority of voters in four Appalachian states want their water protected and disapprove of mountaintop mining. The same day Manchin was in Huntington, Lake Research Partners and Bellwether Research & Consulting released the results (pdf) of a poll commissioned by Appalachian Mountain Advocates, Earthjustice and the Sierra Club. Of 1,315 people interviewed in Kentucky, West Virginia, Tennessee and Virginia, "Three-quarters support fully enforcing – and even increasing protections in – the Clean Water Act to safeguard streams, rivers and lakes in their states from mountaintop removal coal mining … Just 8% of voters oppose it. Support for this proposal is far-reaching, encompassing solid majorities of Democrats (86%), independents (76%), Republicans (71%) and Tea Party supporters (67%)."

The reaction to the poll from Jason Hayes, the communications director for the American Coal Council?

"They're doing a numbers job. They need to frighten people. They need more membership dollars … It's all very frightening if you don't understand what's going on."

What's going in is that this is an industry that spends money for fancy websites to "dispel myths" – for instance, by telling you that "reclamation" returns the mountainsides to their original state. For a more typical picture of reclamation, you might want to check out the PBS film "Razing Appalachia". And speaking of coal dollars, they appear to be benefiting our local politicians, including Manchin. As Manuel Quinones and Elana Schor pointed out:

"Senator Joe Manchin (Democrat, West Virginia) is more than just a supporter of his state's influential coal producers – he's a full-fledged industry insider. On his financial disclosures for 2009 and 2010, Manchin reported significant earnings from Enersystems Inc, a coal brokerage that he helped run before his political star rose. In the 19 months before winning his Senate seat in a hard-fought special election, Manchin reported operating income of $1,363,916 from Enersystems. His next disclosure showed $417,255 in Enersystems income."

Of course, Manchin says his investments are in a blind trust, but do you think he doesn't know that what's good for the coal industry is good for Joe Manchin? As filmmaker Mari-Lynn Evans has said of the CNN programme referred to by Keating:

"Mountain top removal mining is not an issue of jobs v the environment. It is an issue of corporate profits and corrupt politicians v the health and safety of human beings living under MTR sites in Appalachia. WVU scientists estimate over 11,000 people die in Appalachia each year because of coal. MTR mining provides less than 4,000 direct MTR jobs in West Virginia. Does that mean, for every MTR job, we must accept that those jobs will cost each of us the lives of two or three of our friends and loved ones? This is jobs v genocide. If you don't understand that, then you don't understand the story."

And the rest of us are paying, too, if not to the same extent. Air and water pollution travel past the immediate region. Social costs to the environment and health are not payed by the coal industry, and thus artificially lower the cost of coal energy and encourage its consumption. As economists Todd L Cherry of Appalacian State University and Jason Shogrenb of the Univisty of Wyoming pointed out in a 2002 study (pdf) (before the devastation of mountaintop removal had reached its current levels):

"Coal is by far the most under-priced energy resource: the price per ton of coal was about $30, but the external costs are nearly $160. Also including climate change risks, the external costs would be about $190 per ton."

And prices are further lowered by vast subsidies (pdf). And think of the opportunity costs forgone to develop cleaner energy. Interestingly, another full-fledged insider, Dick Kelly, who is retiring as chief executive officer of Exel Energy, told journalist Don Selby:

"We've got to get off fossil fuels … The quicker the better. All [that some members of Congress] are worried about is the next two or six years when they run for re-election. They just keep kicking the can down the road … I don't know how they can deny the science. I really don't … I think one of the misconceptions is that many people believe that wind is just outrageously expensive. Truth is, wind power competes very well with natural gas. The technology is getting better. We are getting a lot more kilowatts out of our windmills now. Even solar has come down 50% in the last two years … I'd be OK if there were never any more coal."

How long will our politicans favour the coal industry with subsidies and lax safety and health regulations? Consider the cost of this choice – in lives, health and damage to the air we breath, the water we drink and the land that provides us with nourishment and recreation. Wouldn't it be better for them to enact polices that support efficiency, conservation and alternative energy sources with a lower environmental impact, such as wind, solar and geothermal?

That way, we might actually get steady jobs and a healthy environment.

© Guardian News and Media Limited 2011
Beth Wellington is a poet, journalist and activist living in Virginia. The Writing Corner, her blog on politics and culture, gets great notices at Newstrust.net. Beth serves as an adviser to the online project CoalSwarm and writes on federal legislation for Law Librarian Reference Exchange. A member of the Southern Appalachian Writers Co-op, her poems have appeared in anthologies and a variety of literary magazines.

Source:
http://www.guardian.co.uk/commentisfree/cifamerica/2011/aug/19/mountaintop-removal-mining
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2011-08-12T18:26:00.001-04:00

Riots shake British society

by Peter Barker
Xinhua
English.news.cn
August 12, 2011

Not long ago, London was all about the royal wedding, Harry Porter and the countdown to a grandeur Olympic Games next year.

But the fairy tale broke last weekend, when Britons woke up to images of the streets of their capital littered with smashed glass, bricks and burnt cars, and of looted shops and blazing buildings.

The riots which turned London and a number of other major British cities upside down began on Saturday, when a peaceful protest led by relatives of 29-year-old Mark Duggan, who was shot dead on Thursday last week in a police raid in Tottenham, north London, turned violent.

The rioting rolled across the capital on Monday night after two days of violence, looting and clashes with the police with the speed and unpredictability of a firestorm. It was the worst rioting in living memory.

By Tuesday, the rioting had spilled over to other cities including Birmingham, Liverpool and Manchester.

For Prime Minister David Cameron, who cut short of his vacation and returned to London early on Tuesday, the "sickening scenes" caused by the rioters were merely "criminality pure and simple."

But as the last of the broken glass is swept up, many have questioned if that is the whole story.

ETHNIC COMMUNITIES UNHAPPY WITH POLICING

For decades the British minority ethnic communities have said they felt excluded and victimized by the police force in a country where racism is still a dangerous presence.

The Metropolitan Police force has a notorious record in this category: the beating to death of a peaceful protester Blair Peach at an anti-racist rally in 1979; the botched investigation into the death of a black teenager Stephen Lawrence who was knifed to death at a bus-stop by a gang of white, racist thugs in 1993; and the death of Ian Tomlinson at the hands of a policeman in London when G20 leaders met there in 2009.

Thus it came with little surprise when anger and suspicion flared when Duggan was shot dead by police as they tried to arrest him last week.

A peaceful protest was held on Saturday night outside the police station in Tottenham, hours before the demonstration turned violent.

The family of Duggan and local leaders all condemned the violence and rioting, but it was too late and a fury sprung from discontent had been sparked.

However what followed had little to do with the death of Duggan, or racist policing.

There was no political organization and no agenda with which authorities could negotiate. It was just an opportunity for thugs to control the streets in the vacuum left by the police, and the result was lootings, muggings, arson attacks, and in the end four deaths.

DEEPER CAUSES

But one may still find the riots mirroring deeper problems within the British society.

Many argued that the polarization between the rich and poor helped breed this week's violence.

Britain saw only a slow and weak recovery in recent years from the financial crisis, as wages are being outstripped by inflation, and living standards suffering a marked decline especially among the poor.

The coming years look even harder, and young people saw only elusive job opportunities.

In the meantime, public faith in the police force has been severely dented by the intimate connections between the police and the now-closed tabloid News International, after it was alleged that large sums of money were routinely paid for tip-offs.

All these have come against the background of the country's failure to handle the financial crisis.

Many have voiced their anger towards bankers who are perceived to have played a part in the crisis yet are still happy to reward themselves with bonuses worth billions of pounds.

With the cynicism towards legal and governmental institutions, and a feeling that greed and appalling behavior in private institutions like newspapers and banks are going unpunished, it is perhaps less surprising that rioters felt they could go on to the streets and loot shops for whatever they wanted.

DIGITAL RIOTS

The 21st century riots saw the first widespread use of digital communication technology to organize and steer riots.

Messages were posted online on social media sites like Twitter and Facebook calling for riots at specific times and places. Rioters were then moved around, communicating with each other through the Blackberry mobile phone messaging system.

It was similar to the use of social media in unrests in some of the northern African and Mideast countries, which toppled governments in Tunisia and Egypt toppled.

Authorities in Britain had never faced such widespread use of modern technology in the riot's organization, and were outwitted by the rioters to begin with.

WHAT HAPPENS NEXT

Cameron pledged earlier that rioters and looters would be hunted down and punished. His anger and tough talking have gone down well with the public. Many responded by organizing their own mass clean-ups also through Twitter and Facebook.

The police have reasserted their authority, and found political backing for a harder line including the use of water cannons, rubber bullets and even the army if needed.

The courts have responded very quickly and handed down jail terms which they hope will deter future offenders.

But there is still a real danger that further rioting could break out. The deaths of three muslim men in Birmingham, who were run down by a car driven at them as they protected their community on the streets, could yet see a racial backlash.

According to Cameron, "the society is not just broken, some parts of it are sick", and people will be looking to him and his government to fix it, even though they did not cause it.

Whether this is something that can be fixed by a government remains to be seen.

Source:
http://news.xinhuanet.com/english2010/world/2011-08/13/c_131046430.htm
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2011-08-08T22:29:00.002-04:00

Is entire world economy about to collapse?

Contact your legislator to support HR 1489 to re implement the Glass Steagal Act or face economic doom. This video is from larouchepac.com
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2011-08-07T11:02:00.001-04:00

30 Years Ago Today: The Day the American Middle Class Died

By Michael Moore
August 5th, 2011

From time to time, someone under 30 will ask me, "When did this all begin, America's downward slide?" They say they've heard of a time when working people could raise a family and send the kids to college on just one parent's income (and that college in states like California and New York was almost free). That anyone who wanted a decent paying job could get one. That people only worked five days a week, eight hours a day, got the whole weekend off and had a paid vacation every summer. That many jobs were union jobs, from baggers at the grocery store to the guy painting your house, and this meant that no matter how "lowly" your job was you had guarantees of a pension, occasional raises, health insurance and someone to stick up for you if you were unfairly treated.

Young people have heard of this mythical time -- but it was no myth, it was real. And when they ask, "When did this all end?", I say, "It ended on this day: August 5th, 1981."

Beginning on this date, 30 years ago, Big Business and the Right Wing decided to "go for it" -- to see if they could actually destroy the middle class so that they could become richer themselves.

And they've succeeded.

On August 5, 1981, President Ronald Reagan fired every member of the air traffic controllers union (PATCO) who'd defied his order to return to work and declared their union illegal. They had been on strike for just two days.

It was a bold and brash move. No one had ever tried it. What made it even bolder was that PATCO was one of only three unions that had endorsed Reagan for president! It sent a shock wave through workers across the country. If he would do this to the people who were with him, what would he do to us?

Reagan had been backed by Wall Street in his run for the White House and they, along with right-wing Christians, wanted to restructure America and turn back the tide that President Franklin D. Roosevelt started -- a tide that was intended to make life better for the average working person. The rich hated paying better wages and providing benefits. They hated paying taxes even more. And they despised unions. The right-wing Christians hated anything that sounded like socialism or holding out a helping hand to minorities or women.

Reagan promised to end all that. So when the air traffic controllers went on strike, he seized the moment. In getting rid of every single last one of them and outlawing their union, he sent a clear and strong message: The days of everyone having a comfortable middle class life were over. America, from now on, would be run this way:

* The super-rich will make more, much much more, and the rest of you will scramble for the crumbs that are left.

* Everyone must work! Mom, Dad, the teenagers in the house! Dad, you work a second job! Kids, here's your latch-key! Your parents might be home in time to put you to bed.

* 50 million of you must go without health insurance! And health insurance companies: you go ahead and decide who you want to help -- or not.

* Unions are evil! You will not belong to a union! You do not need an advocate! Shut up and get back to work! No, you can't leave now, we're not done. Your kids can make their own dinner.

* You want to go to college? No problem -- just sign here and be in hock to a bank for the next 20 years!

* What's "a raise"? Get back to work and shut up!

And so it went. But Reagan could not have pulled this off by himself in 1981. He had some big help:

The AFL-CIO.

The biggest organization of unions in America told its members to cross the picket lines of the air traffic controllers and go to work. And that's just what these union members did. Union pilots, flight attendants, delivery truck drivers, baggage handlers -- they all crossed the line and helped to break the strike. And union members of all stripes crossed the picket lines and continued to fly.

Reagan and Wall Street could not believe their eyes! Hundreds of thousands of working people and union members endorsing the firing of fellow union members. It was Christmas in August for Corporate America.

And that was the beginning of the end. Reagan and the Republicans knew they could get away with anything -- and they did. They slashed taxes on the rich. They made it harder for you to start a union at your workplace. They eliminated safety regulations on the job. They ignored the monopoly laws and allowed thousands of companies to merge or be bought out and closed down. Corporations froze wages and threatened to move overseas if the workers didn't accept lower pay and less benefits. And when the workers agreed to work for less, they moved the jobs overseas anyway.

And at every step along the way, the majority of Americans went along with this. There was little opposition or fight-back. The "masses" did not rise up and protect their jobs, their homes, their schools (which used to be the best in the world). They just accepted their fate and took the beating.

I have often wondered what would have happened had we all just stopped flying, period, back in 1981. What if all the unions had said to Reagan, "Give those controllers their jobs back or we're shutting the country down!"? You know what would have happened. The corporate elite and their boy Reagan would have buckled.

But we didn't do it. And so, bit by bit, piece by piece, in the ensuing 30 years, those in power have destroyed the middle class of our country and, in turn, have wrecked the future for our young people. Wages have remained stagnant for 30 years. Take a look at the statistics and you can see that every decline we're now suffering with had its beginning in 1981 (here's a little scene to illustrate that from my last movie).

It all began on this day, 30 years ago. One of the darkest days in American history. And we let it happen to us. Yes, they had the money, and the media and the cops. But we had 200 million of us. Ever wonder what it would look like if 200 million got truly upset and wanted their country, their life, their job, their weekend, their time with their kids back?

Read the entire story here:
http://www.michaelmoore.com/words/mike-friends-blog/30-years-ago-today
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2011-08-01T19:43:00.001-04:00

Murdoch Hacked Us Too

The News Corp. scandal already exposed just how thoroughly the company had corrupted Britain. Now it’s time to look on this side of the pond.

By Frank Rich
New York Magazine
July 31, 2011

When I was offered a job as a film critic for the New York Post in 1975, it had just been labeled “a terrible newspaper” by Nora Ephron in her media column for Esquire. Having been a Post reporter, she knew whereof she spoke. Dolly Schiff, the paper’s legendary dowager-in-chief, was notorious for being cheap, petty, whimsical, and, somewhat more fetchingly, a rumored onetime paramour of FDR.

Her paper was a rapidly declining asset—a staunchly liberal tabloid chasing after a hypothetical middlebrow afternoon readership too highfalutin for the Daily News and yet insufficiently titillated by the sober New York Times. I knew Nora and asked her if I should really take the plunge into a newsroom she had so convincingly portrayed as a hellhole. She advised, wisely: Well, why not? I was 25 that spring and had nothing to lose except my innocence.

Which I would lose soon enough. I liked and looked up to my colleagues at the Post, many of them talented, hardworking, and ingenious at circumventing the obstacles imposed by the owner. They soon inducted me into the gallows humor of the joint. Everyone knew the ax would fall one day. We just didn’t know which day, or who would be wielding it.

When the moment finally arrived, shortly before Thanksgiving in 1976, with the announcement that Schiff would sell her paper to a foreign mogul almost no one had ever heard of, it was greeted as good news. “Nobody was crying,” one reporter told the Times. “It was a rebirth. The Post is an orphan that has been adopted.” Our Daddy Warbucks would not only pour money into the paper’s impoverished coffers but also, as he told the Times, preserve its “essential characteristics,” “style of reporting,” and “political policies.” The Post would continue to be a “serious newspaper.”

A day or two later, I was walking across the South Street newsroom when I ran into a young Australian reporter on the staff, Jane Perlez. You must know something about Rupert Murdoch, I said, feeling quite upbeat about our white knight from Down Under. Jane would have none of it. “He’s bloody why I left Australia!” she replied.

Within a year or so, many of us would leave the Post, in some cases to land sooner or later at the Times: Jane (these days a courageous correspondent in Pakistan), Anna Quindlen, Clyde Haberman, Joyce Purnick, and Joyce Wadler, among others. In the telling of Murdoch’s hagiographers (who often are on his payroll), we and those who departed his subsequent acquisitions were driven out solely because our delicate liberal sensibilities were offended by the new proprietor’s Fleet Street–style sensationalism, blatant conservative politics, and machete editing of our precious prose.

Such is the tale told in It’s Alive, a celebratory 1996 memoir written by Steven Cuozzo (a Schiff-era hire who never left). As he has it, Murdoch was a savior whose Post “broke the elitist media stranglehold” by democratizing public discourse and ruffling “Establishment feathers.” Indeed, his cheerful 300-page-plus encomium invokes Alexander Hamilton, the Post’s long-dishonored 1801 founder, as often as it does the paper’s latter-day mascot, the pickled Aussie hack Steve Dunleavy. “All of us owed our destinies to Alexander Hamilton,” Cuozzo writes grandly of his colleagues past and present. Of course, the same could be said of Aaron Burr.

The story told by Cuozzo is a triumphalist gloss on what actually happened just after Schiff sold the Post, but his take on Murdoch could stand as the template for News Corp.’s line of defense today, as a tidal wave of scandal washes over its British properties and inexorably heads toward American shores. This perennial spin—which often has served as the lazy conventional wisdom in non–News Corp. accounts of the great man as well—casts Murdoch as a brilliant newspaper maven who’ll go so far as to roll up his shirtsleeves to help his mates at deadline.

In an era when even his own bean counters tell him newspapers are a dying business, he has valiantly overpaid for dinosaur print properties and saved the jobs of multitudes of ink-stained wretches who would otherwise be thrown out of work. And yet he gets little respect because he’s just too damn brave and iconoclastic for his own good. His only crimes are to hold political views unfashionably to the right of the “mainstream media” and to pursue tabloid stories that challenge those in power, delight the masses, and offend the antediluvian standards of the tweedy has-beens teaching at Columbia’s journalism school.

This romantic profile of Murdoch puts him squarely in the tradition of a fabled (if often tawdry) old-school media mogul like William Randolph Hearst, whose papers famously fomented the Spanish-American War and perfected the modern gossip machine. Murdoch, ipso facto, is Citizen Kane, while the Post and “Page Six” are recast as scrappy descendants of Hearst’s Mirror and Walter Winchell—the all-American New York tabloid culture enshrined in another film classic, the 1957 Sweet Smell of Success. In the eyes of its defenders, the Murdoch dynasty can even be likened to the Sulzbergers and Grahams. Maybe the Times and Washington Post turn up their noses at tabloid antics, but their proprietors, like Murdoch, have strenuously endorsed political candidates and causes and, at times, secured government favors that serve their business interests.

This defense is a smoke screen. The real transgressions of the Murdoch empire are not its outré partisanship, its tabloid sleaze, its Washington lobbying, or even what liberals most love to hate, the bogus “fair and balanced” propaganda masquerading as journalism at Fox News. In fact, these misdemeanors are red herrings—distractions from the real News Corp. corruption that now threatens to bring down its management and radically reconfigure and reduce its international corporate footprint.

The bigger story is this: An otherwise archetypal media colossus, with apolitical TV shows (American Idol), movies (Avatar), and cable channels (FX) like any other, is controlled by a family (and its tight coterie of made men and women, exemplified by the recently departed Rebekah Brooks) that countenances the intimidation and silencing of politicians, regulators, competitors, journalists, and even ordinary citizens to maximize its profits and power and to punish perceived corporate, political, and personal enemies. And, as we now know conclusively, some of this behavior has broken the law.

This ethos would never be tolerated for long at most public companies, but News Corp. is a faux-public company thanks to the Murdochs’ special tier of controlling shares. What’s being illuminated daily by the News of the World revelations in London are the broad parameters, still sketchily filled in, of News Corp.’s definition of business-as-usual: the compulsive lying (James Murdoch’s testimony before Parliament is of a piece with that interview Rupert gave to the Times in 1976); the wholesale buying of police and politicians; the thuggery employed to invade the privacy of cheesy celebrities and the 13-year-old murder victim Milly Dowler alike to pump newspaper sales; and the dizzying array of cover-ups, from the sham News Corp.
“investigations” and “independent committees” to the hush money that rains down on victims, discarded employees, and cops.

It’s not happenstance that many watching the Murdochs’ testimony on television were struck by the resemblance to the Senate hearing in The Godfather: Part II, with James Murdoch starring as Michael Corleone and Joel Klein in the supporting Robert Duvall role of the consigliere Tom Hagen. Students of pop culture know an epic family business when they see one.

As in Godfather II, it’s useful to flash back briefly to what really happened after the patriarch’s splashy arrival in New York. Even in embryo, the corporate DNA was snapping into focus.

Contrary to Cuozzo’s account, it was not tabloid excesses or conservative ideology that drove the exodus of many Post reporters in late 1976 and 1977. In truth, the paper’s tabloid voice hadn’t fully differentiated itself from the one Schiff left behind, even if the headlines were better (though the immortal HEADLESS BODY IN TOPLESS BAR was still six years away). Nor, in those early days, had the paper’s politics undergone their hard shift rightward. When 50 of the Post’s 60 reporters infuriated their new boss by publicly protesting the paper’s slanted news coverage during the local 1977 political campaign, that coverage was tilted in favor of Ed Koch and Carol Bellamy—both then unabashed liberal Democrats, running for mayor and City Council president.

It was the Post’s journalistic corruption that enraged those reporters—the editorials run as news stories (including on page one), the endless parade of fawning features on the favored candidates—not the fungible ideology of Murdoch’s opportunistic partisanship. (His reason for supporting Koch over Mario Cuomo in that race, he explained, was that there were “two-and-a-half million Jews in New York and 1 million Italians.”) This corruption had seeped quickly even into my own soft-news beat. I left the Post soon after a newly installed Murdoch underling informed me that I had to “take the views of our advertisers into consideration” when reviewing movies.

In retrospect, those were the good old days. To appreciate where we’ve traveled since, few words are more evocative than those of Graham Foulkes, who recently learned that his 22-year-old son, killed by a suicide bomber in London in 2005, may have had his cell phone hacked by Murdoch goons. “You think it’s as dark as it can get,” Foulkes told the BBC, “then you realize there’s someone out there who can make it darker.”
The Post would not be my last brush with Murdoch’s minions.

An emissary tried to rehire me for his other new purchase in New York—this magazine, which he wrested unscrupulously from its founder, Clay Felker, in 1977 and owned until 1991. (I declined.) Years later, when I became a Times columnist who frequently criticized various Murdoch organs, I was harassed by a “blind” fictional “Page Six” item that had me leaving my wife for a Broadway director.

That was a mere warm-up for a full-frontal assault from Bill O’Reilly. After I came to the less-than-novel judgment that Mel Gibson and his 2004 movie The Passion of the Christ were anti-Semitic, O’Reilly, whose one novel had been optioned by Gibson for a film, attacked me on six different installments of his prime-time Fox News show, The O’Reilly Factor, sometimes displaying my photograph. I would have laughed off his blowhard provocations—“Hollywood and a lot of the secular press are controlled by the Jewish people” was a typical hypothesis—had they not incited the most explicitly violent and virulently anti-Semitic threats of my career. It was only one of two times in seventeen years as a Times columnist that I sought security advice. (The other was when I wrote critically about Scientology some years earlier.)

As a figure in Murdochian history, I hasten to add, I am merely a footnote—like countless other News Corp. journalistic nemeses. Even a Times reporter who wrote a routine news story on a Fox News ratings lull was punished by having his headshot distorted into an anti-Semitic caricature worthy of Der Stürmer for display on the morning show Fox & Friends (a misnomer if ever there was one).

Other victims have had it far worse, including the often-defenseless obscure citizens who cross O’Reilly’s radar screen because they have views he abhors, at which point his producer stalks them for an on-camera ambush. (It was left to the Post, however, to trash a former O’Reilly Factor producer with whom he settled a sexual-harassment suit in 2004.)

O’Reilly’s now-departed tag-team partner in Fox News vigilantism, Glenn Beck, excoriated the nearly 80-year-old CUNY sociologist Frances Fox Piven so often in the past few years (mostly for an essay she had written about poverty in 1966) that she had to fend off death threats. George Tiller, the Wichita abortion doctor who was called a “baby killer,” among other epithets, on 29 episodes of The O’Reilly Factor, was assassinated while at church in 2009.

News Corp. bullying has inflicted real damage on America no less than on England. And as the British were in denial concerning the severity of Murdoch’s impact until the Guardian uncovered the Milly Dowler story, so America still is in denial.

We’ve become so inured to Murdoch tactics over the years—and so many people in public life have been frightened, silenced, co-opted, or even seduced by them—that we have minimized his impact exactly the way his publicists hoped we would, downgrading News Corp. misbehavior merely to tabloid vulgarity and right-wing attack-dog politics. But there’s a real difference between the tabloidization of America—which is, and no doubt always will be, unstoppable—and the Murdochization of America, which still might be stopped.

It’s not just because Roger Ailes once worked for Richard Nixon that Watergate analogies abounded as News of the World and then the key Murdoch executives Rebekah Brooks and Leslie Hinton were abruptly sacrificed in the family’s efforts to save Rupert and James. Carl Bernstein, more attuned to those echoes than anyone, got it exactly right when he wrote in Newsweek that “too many of us have winked in amusement at the salaciousness without considering the larger corruption of journalism and politics promulgated by Murdoch Culture on both sides of the Atlantic.”

And not only “liberal” journalists feel this way. Conrad Black, the right-wing Canadian media mogul who has lately been in prison for fraud, recently described Murdoch in the Financial Times as not merely a “tabloid sensationalist” but “a malicious mythmaker, an assassin of the dignity of others and of revered institutions, all in the guise of anti-elitism.” Or as the former Bush speechwriter David Frum said more than a year ago, “Republicans originally thought that Fox worked for us, and now we’re discovering we work for Fox.”

But for all the American attention showered on the News of the World scandal since the Dowler hacking emerged on July 4, there’s still a tendency in some of our press to portray the parade of outrageous revelations as idiosyncratic and exclusively British phenomena:

Murdoch summoning prime ministers as if they were personal lackeys; the successful squelching of the Scotland Yard hacking investigation and the subsequent hiring of that investigation’s lead officer as a columnist at Murdoch’s London Times (where he then defended his own farcical investigation as having left “no stone unturned”); the Murdoch tabloids’ cruel treatment not only of the Dowler family and of Gordon Brown’s 4-month-old son with cystic fibrosis but of thousands of other hacking victims, most still not identified, from the royal family to the terrorist victims of the 7/7 tube bombings. But what happened in England hasn’t stayed in England.

Most, if not all, of these British horrors have precise counterparts in Murdoch’s American history. What we don’t know yet, because few have looked, is which pieces of the corruption may have crossed the line into illegality.

The wholesale buying of elected officials is such a staple at Fox News we don’t think twice about it anymore.

While it has long been routine for retired politicians, former officials, and semi-retired campaign operatives to join the ranks of American print and television journalism—whether on ABC (George Stephanopoulos), CNN (Donna Brazile, William Bennett), or MSNBC (Chris Matthews), or in the Times (from William Safire to Peter Orszag)—only at Fox were four active potential presidential candidates literally on the payroll (Palin, Huckabee, Gingrich, Santorum) for chits that can be cashed in should any of them end up in or near the White House. (And you can bet if any of them do, Murdoch will not be entering through the back door.)

Karl Rove, who has held sinecures at both Fox and The Wall Street Journal since leaving the Bush administration, is hardly comparable to, say, James Carville and Mary Matalin bloviating on NBC’s Meet the Press once their respective campaign duties for Clinton and Bush the First were over.

Unlike them, Rove remained a major political player after his White House tenure, presiding over political fund-raising organizations that assembled $71 million in 2010, including $25 million spent on some 30,000 ads attacking Democratic candidates and supporting Republican ones. (He’ll be even more active in 2012.)

John Kasich, elected governor of Ohio last year, is a former Fox News host who made 42 Fox appearances as he contemplated running and another sixteen appearances as an active candidate, thereby making him, as Tim Dickinson of Rolling Stone put it, “the first candidate of the Fox News Party.”

Fox routinely publicized tea-party rallies at its inception even as News Corp. donated $1.26 million to the Republican Governors Association. This isn’t mere partisanship—which MSNBC also practices—but tantamount to a GOP–Fox News merger.

Fox News is far from the only American division of News Corp. to be pressed into service, checkbook in hand, when Murdoch’s interests—financial at least as much as ideological—are at stake. One classic example occurred in 1995, after the Federal Communications Commission questioned whether Murdoch had misled it in 1985, when News Corp., then based in Australia, secured Fox broadcast licenses despite a federal law limiting foreign ownership of local stations to 25 percent.

The matter died soon after the News Corp. book division HarperCollins offered the then–Speaker of the House, Newt Gingrich, a $4.5 million advance. True to form, Murdoch claimed to have no idea that the book deal was ever in the works—even though he conceded having met with Gingrich just a few weeks earlier to discuss the FCC inquiry. (The ensuing ruckus shamed Gingrich into forgoing the advance.)

Collusion between journalists and top-level politicians is hardly a new phenomenon in our history, but News Corp. has set a new standard in scale for the mass-media era. And here, as in England, what drives Murdoch is not politics so much as money and power. Just as he could segue effortlessly from Margaret Thatcher to Tony Blair, so he has ponied up for Democrats when he needed them, including hosting a fund-raiser for his newfound friend Hillary Clinton during her presidential run.

If Murdoch is to be undone in America, as in England, it won’t be politicians who take the lead. It will take aggressive journalism, law enforcement, and civil actions to force jettisoned News Corp. executives to sing. The latest so-called independent “management-and-standards committee” commissioned by Murdoch to conduct an internal investigation is particularly laughable, even by his standards. Its scope is limited to News Corp. behavior in England. Its chairman, Tony Grabiner, a London commercial lawyer, reports to Joel Klein, who in turn reports to Viet Dinh, a former Bush-administration lawyer who, in what one hopes is an unintended sick joke, is best known for embracing government phone hacking in his role as principal author of the Patriot Act.

Both Klein and Dinh are on the News Corp. board. Klein’s News Corp. compensation this year is expected to be in the neighborhood of $4.5 million.

So far, the only major American news organization to follow the lead of the Guardian in London and devote serious resources to reporting on this scandal is the Times. (The Washington Post, once of Watergate fame, is now edited by Marcus Brauchli, who received a reported $6.4 million News Corp. severance check when he left as editor of The Wall Street Journal in 2008, four months after the Murdoch takeover.)

When the Times published its first major examination of News of the World’s hacking as a magazine cover story last fall, News Corp. shills protested that it was motivated by rivalry with the Journal. “We reject absolutely any suggestion or assertion that the activities of Clive Goodman and Glenn Mulcaire”—the only foot soldiers that News Corp.’s “investigation” of that time had found guilty of anything—“were part of a ‘culture’ of wrongdoing,” a News Corp. editor responded to the Times. This defense, now inoperative, was right out of the Nixon administration’s playbook in the early going of the firestorm that would ultimately lead to its demise.

News Corp. has protested just as loudly in denying that it is guilty of hacking in the U.S.—a meaningless claim given the avalanche of evidence yet to be examined, including the long-suppressed Scotland Yard stash of six large trash bags with 11,000 pages of handwritten notes about nearly 4,000 potential News of the World hacking victims. Besides, it may depend on how you define hacking. As David Carr recently wrote in his Times column, a Murdoch division in the newspaper-advertisement-insert business, News America Marketing, was accused of hacking into a rival company’s password-protected computer system, stealing proprietary information and then spreading “malicious information” about that competitor.

Embarrassing testimony in the ensuing federal trial in New Jersey was abruptly shut down when News Corp. paid out a $29.5 million settlement and then bought outright the tiny company that had brought the case.

Rather remarkably, News America Marketing alone has shelled out roughly two-thirds of a billion dollars—nearly the domestic gross of Avatar—to settle similarly ugly suits under its chief executive, Paul Carlucci.

Perhaps less remarkably, Carlucci not only remains in place but is so valuable to Murdoch that he’s done double-duty as publisher of the New York Post since 2005.

Why Carlucci remains at his job(s) while Les Hinton, Murdoch’s chum of 52 years, was thrown overboard is one of the countless mysteries that remain to be solved. What we can guess is that Hinton’s severance payday was huge. He knows a lot. He ran News Corp.’s British papers at the time of their known criminality, then came to New York to run Dow Jones and the Journal. In his testimony before Parliament in 2007 and 2009, he said he was completely ignorant of the industrial-strength hacking at News of the World and that a single rogue reporter was the “only person” who did know.

“We have no reason to doubt him, especially based on our own experience working for him,” read a lead Journal editorial defending Hinton (and Murdoch) on July 18. Good luck with that. Anyone who doubts that the Journal’s news pages have been compromised in the Murdoch-Hinton era need only consult the issue of July 15, the day Hinton resigned, when the front page of its culture section, “Friday Journal,” was given over to a promotional piece about Simon Cowell’s new Fox-network series, The X Factor, with a full additional page of coverage inside.

Hinton could be among the last to crack. Among the first is the News of the World editor at the time of its closing, Colin Myler. He joined a departed longtime News Corp. lawyer, Tom Crone, in waiting only two days after the Murdochs’ parliamentary appearance to accuse James Murdoch of fictionalizing his ignorance of how widespread the hacking was when he authorized a $1.1 million settlement to one prominent hacking victim in 2008. Myler may also have information to share about Murdoch’s American operations. Before succeeding the now-arrested Andy Coulson as editor of News of the World in 2007, he spent some five years under Col Allan as a top editor at the Post.

Myler arrived in New York two months after 9/11, while the Post and Fox News were starting to turn the attack into a corporate franchise, zealously aligning their interests with the ambitions of that day’s local heroes, Rudy Giuliani and Bernie Kerik, and, like them, appropriating ground zero as a brand at every conceivable opportunity. Should a single instance of 9/11 hacking emerge, the Murdochs would face a lynching party led by Republicans. But given that the charge was leveled with thin sourcing by the Daily Mirror, a scurrilous London tabloid in competition with News Corp., there well may be nothing to it. Myler might know.

He might also be able to fill in details about a still-murky 9/11 scandal that unequivocally did occur that fall: the extramarital affair that Kerik conducted with Judith Regan, a News Corp. publishing executive personally recruited by Murdoch, in an apartment originally intended for rescue workers and overlooking the smoldering ruins of ground zero. Kerik, though still police commissioner, was also on the Murdoch payroll then—having received a hefty advance from Regan for his memoir published that November, when the ground-zero trysts were going on.

Regan would be fired in 2006 as the scapegoat for the O. J. Simpson If I Did It fiasco—a project Murdoch had heartily endorsed until Nicole Brown Simpson’s and Ron Goldman’s families reacted much as Milly Dowler’s parents did after learning of News Corp.’s violation of their murdered child. In Regan’s subsequent wrongful-termination suit, she charged that she had a tape of Roger Ailes telling her to lie about Kerik to federal investigators vetting his nomination as Bush’s secretary of Homeland Security in 2004. Ailes, she said, wanted to protect Giuliani’s presidential ambitions; the Post, meanwhile, served as Kerik’s wingman, leading the cheerleading for his Cabinet appointment (“It’s hard to think of a more enlightened choice—for America or for the city,” read an editorial).

What did Ailes and Murdoch want in exchange for installing the manifestly unqualified and corrupt Kerik in the nation’s foremost security job? Was Kerik as subservient to Murdoch executives as was the now departed commissioner of London’s Metropolitan Police? Perhaps Myler, if squeezed, can tell us what was going on. Regan won’t—her suit against News Corp. was aborted in 2008 with a whopping out-of-court settlement of $10.75 million. Rarely has silence been that golden.

Which is to say, it will take a lot of heavy lifting to overturn all the rocks under which Murdoch’s secrets are buried. As in Watergate, the process of discovery will ebb and flow for months and possibly years: A 26-month interval separated the arrest of the low-level burglars trying to bug the Democratic National Committee headquarters and Nixon’s resignation.

The most important first step down this road will be for Americans to fully recognize that what happened at News of the World was no isolated virus but part of a larger culture that didn’t remain quarantined on the other side of the ocean. Once that realization sinks in, it can only hasten the day when the long national nightmare of the Murdochization of America, now well into its fourth decade, will be over.

Source:
http://nymag.com/news/frank-rich/murdoch-scandal-2011-8/
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2011-07-26T22:26:00.002-04:00

New court filing reveals how the 2004 Ohio presidential election was hacked

by Bob Fitrakis
The Free Press
July 20, 2011
[emphasis added]

A new filing in the King Lincoln Bronzeville v. Blackwell case includes a copy of the Ohio Secretary of State election production system configuration that was in use in Ohio's 2004 presidential election when there was a sudden and unexpected shift in votes for George W. Bush.

The filing also includes the revealing deposition of the late Michael Connell. Connell served as the IT guru for the Bush family and Karl Rove. Connell ran the private IT firm GovTech that created the controversial system that transferred Ohio's vote count late on election night 2004 to a partisan Republican server site in Chattanooga, Tennessee owned by SmarTech. That is when the vote shift happened, not predicted by the exit polls, that led to Bush's unexpected victory. Connell died a month and a half after giving this deposition in a suspicious small plane crash.

Additionally, the filing contains the contract signed between then-Ohio Secretary of State J. Kenneth Blackwell and Connell's company, GovTech Solutions. Also included that contract a graphic architectural map of the Secretary of State's election night server layout system.

Cliff Arnebeck, lead attorney in the King Lincoln case, exchanged emails with IT security expert Stephen Spoonamore. Arnebeck asked Spoonamore whether or not SmarTech had the capability to "input data" and thus alter the results of Ohio's 2004 election.

Spoonamore responded: "Yes. They would have had data input capacities. The system might have been set up to log which source generated the data but probably did not."

Spoonamore explained that "they [SmarTech] have full access and could change things when and if they want."

Arnebeck specifically asked "Could this be done using whatever bypass techniques Connell developed for the web hosting function." Spoonamore replied "Yes."

Spoonamore concluded from the architectural maps of the Ohio 2004 election reporting system that, "SmarTech was a man in the middle. In my opinion they were not designed as a mirror, they were designed specifically to be a man in the middle."

A "man in the middle" is a deliberate computer hacking setup, which allows a third party to sit in between computer transmissions and illegally alter the data. A mirror site, by contrast, is designed as a backup site in case the main computer configuration fails.

Spoonamore claims that he confronted then-Secretary of State Blackwell at a secretary of state IT conference in Boston where he was giving a seminar in data security. "Blackwell freaked and refused to speak to me when I confronted him about it long before I met you," he wrote to Arnebeck.

Read the email correspondence here [pdf]

On December 14, 2007, then-Secretary of State Jennifer Brunner, who replaced Blackwell, released her evaluation and validation of election-related equipment, standards and testing (Everest study) which found that touchscreen voting machines were vulnerable to hacking with relative ease.

Until now, the architectural maps and contracts from the Ohio 2004 election were never made public, which may indicate that the entire system was designed for fraud.

In a previous sworn affidavit to the court, Spoonamore declared: "The SmarTech system was set up precisely as a King Pin computer used in criminal acts against banking or credit card processes and had the needed level of access to both county tabulators and Secretary of State computers to allow whoever was running SmarTech computers to decide the output of the county tabulators under its control."

Spoonamore also swore that "...the architecture further confirms how this election was stolen. The computer system and SmarTech had the correct placement, connectivity, and computer experts necessary to change the election in any manner desired by the controllers of the SmarTech computers."

Project Censored named the outsourcing of Ohio's 2004 election votes to SmarTech in Chattanooga, Tennessee to a company owned by Republican partisans as one of the most censored stories in the world.

In the Connell deposition, plaintiffs' attorneys questioned Connell regarding gwb43, a website that was live on election night operating out of the White House and tied directly into SmarTech's server stacks in Chattanooga, Tennessee which contained Ohio's 2004 presidential election results.

The transfer of the vote count to SmarTech in Chattanooga, Tennessee remains a mystery. This would have only happened if there was a complete failure of the Ohio computer election system. Connell swore under oath that, "To the best of my knowledge, it was not a fail-over case scenario – or it was not a failover situation."

Bob Magnan, a state IT specialist for the secretary of state during the 2004 election, agreed that there was no failover scenario. Magnan said he was unexpectedly sent home at 9 p.m. on election night and private contractors ran the system for Blackwell.

The architectural maps, contracts, and Spoonamore emails, along with the history of Connell's partisan activities, shed new light on how easy it was to hack the 2004 Ohio presidential election.

Download the Plaintiffs' Brief here [zip]

Bob Fitrakis is co-counsel in the King Lincoln case.

Source:
http://www.freepress.org/departments/display/19/2011/4239
______________________

2011-07-23T15:37:00.003-04:00

Anonymous & Lulz Security Statement

Hello thar FBI and international law authorities,

We recently stumbled across the following article with amazement and a certain amount of amusement:
http://www.npr.org/2011/07/20/138555799/fbi-arrests-alleged-anonymous-hackers

FBI Tries To Send Message With Hacker Arrests

by Tom Gjelten
July 20, 2011

The 14 people arrested Tuesday in a crackdown on the Anonymous hacking group are not suspected of having links to criminal gangs, terrorist networks or foreign governments. They are alleged only to have participated in attacks on PayPal's website, after that company cut off payments to WikiLeaks.
But the FBI was determined to go after them anyway.

The statements made by deputy assistant FBI director Steve Chabinsky in this article clearly seem to be directed at Anonymous and Lulz Security, and we are happy to provide you with a response.

You state:

"We want to send a message that chaos on the Internet is unacceptable, [even if] hackers can be believed to have social causes, it's entirely unacceptable to break into websites and commit unlawful acts."

Now let us be clear here, Mr. Chabinsky, while we understand that you and your colleagues may find breaking into websites unacceptable, let us tell you what WE find unacceptable:

* Governments lying to their citizens and inducing fear and terror to keep them in control by dismantling their freedom piece by piece.

* Corporations aiding and conspiring with said governments while taking advantage at the same time by collecting billions of funds for federal contracts we all know they can't fulfil.

* Lobby conglomerates who only follow their agenda to push the profits higher, while at the same time being deeply involved in governments around the world with the only goal to infiltrate and corrupt them enough so the status quo will never change.

These governments and corporations are our enemy. And we will continue to fight them, with all methods we have at our disposal, and that certainly includes breaking into their websites and exposing their lies.

We are not scared any more. Your threats to arrest us are meaningless to us as you cannot arrest an idea. Any attempt to do so will make your citizens more angry until they will roar in one gigantic choir. It is our mission to help these people and there is nothing - absolutely nothing - you can possibly to do make us stop.

"The Internet has become so important to so many people that we have to ensure that the World Wide Web does not become the Wild Wild West."

Let me ask you, good sir, when was the Internet not the Wild Wild West? Do you really believe you were in control of it at any point? You were not.

That does not mean that everyone behaves like an outlaw. You see, most people do not behave like bandits if they have no reason to. We become bandits on the Internet because you have forced our hand. The Anonymous bitchslap rings through your ears like hacktivism movements of the 90s. We're back - and we're
not going anywhere.

Expect us.

Related:
http://pastebin.com/9TmeP4Dv

Source:
http://pastebin.com/RA15ix7S
_______________

2011-07-18T20:46:00.000-04:00

Little-known firms tracking data used in credit scores

By Ylan Q. Mui
Washington Post
July 16, 2011

Atlanta entrepreneur Mike Mondelli has access to more than a billion records detailing consumers’ personal finances — and there is little they can do about it.

The information collected by his company, L2C, comes from thousands of everyday transactions that many people do not realize are being tracked: auto warranties, cellphone bills and magazine subscriptions. It includes purchases of prepaid cards and visits to payday lenders and rent-to-own furniture stores. It knows whether your checks have cleared and scours public records for mentions of your name.

Pulled together, the data follow the life of your wallet far beyond what exists in the country’s three main credit bureaus. Mondelli sells that information for a profit to lenders, landlords and even health-care providers trying to solve one of the most fundamental questions of personal finance: Who is worthy of credit?

The answer increasingly lies in the “fourth bureau” — companies such as L2C that deal in personal data once deemed unreliable. Although these dossiers cover consumers in all walks of life, they carry particular weight for the estimated 30 million people who live on the margins of the banking system. Yet almost no one realizes these files exist until something goes wrong.

Federal regulations do not always require companies to disclose when they share your financial history or with whom, and there is no way to opt out when they do. No standard exists for what types of data should be included in the fourth bureau or how it should be used. No one is even tracking the accuracy of these reports.

That has created a virtually impenetrable system in which consumers, particularly the most vulnerable, have little insight into the forces shaping their financial futures.

Arkansas resident Catherine Taylor didn’t learn about the fourth bureau until she was denied a job at her local Red Cross several years ago. Her rejection letter came with a copy of her file at a firm called ChoicePoint that detailed criminal charges for the intent to sell and manufacture methamphetamines. The information was incorrect — she says the charges were for another woman with the same name and birth date — but it has haunted her ever since.

Taylor said she has identified at least 10 companies selling reports with the inaccurate personal and financial information, wrecking her credit history so badly that she says she cannot qualify to purchase a dishwasher at Lowe’s. Taylor must apply for loans under her husband’s name and has retained an attorney to force the firms to correct the record. She has settled one case, and a trial in another is expected next week.

“Everything went to hell in a handbasket from then on out,” Taylor said. “I can’t be the watchdog all the time.”

‘Black box’ of data

A credit score is like a financial driver’s license. It serves not only as proof of identity and a certain competency behind the wheel, but also as a passport to a world beyond your doorstep. A home, a car, a college education — all are financed by lenders that rely on the score to determine who gets credit and how much they pay for it.

For most consumers, those scores are based on records of loans they have taken out in the past and how well they have paid them off. Information on credit cards, auto notes and mortgages are all housed in the Big Three national credit bureaus — Experian, Equifax and TransUnion. Lenders use formulas developed by companies such as FICO and VantageScore to analyze the data and determine how likely each person is to repay.

Government regulators, financial firms and consumer advocates have launched extensive education campaigns in recent years to make sure that consumers understand what goes into their Big Three credit reports and how that affects the cost of a loan. Lawmakers and federal officials have crafted rules to try to help consumers understand what’s in their files.

But little attention has been paid to the firms that target consumers outside the mainstream financial system. Often they are students, immigrants or low-income consumers who do not qualify for traditional loans or choose not to use them. Instead, they rely on a makeshift system of payday lenders, check cashers and prepaid cards — none of which show up in the Big Three. Without a paper trail of credit, these consumers are virtually shut out of the traditional banking system.

Mondelli recognized this problem a decade ago during the telecommunications boom. Cellphone companies wanted to tap into this market but had no way to figure out who was risky and who was worth signing up. But Mondelli knew these people left financial footprints somewhere — he just had to find them.

“Credit bureau data alone is valuable but not the complete picture,” he said in an interview.

The trail led him to a jumbled marketplace of financial and other personal information that was ignored by the main bureaus. It includes magazine subscriptions, cable and utility bills and child care tuition. Some firms collect medical payments, prescription drug history and insurance claims; others mine public records for bankruptcies and liens.

LexisNexis, whose parent company bought ChoicePoint three years ago, handles background checks, tax assessments and criminal histories. Bounced checks can be tracked through Chex Systems, TeleCheck or SCAN. Payday lenders report to a company called Teletrack. Alliant Data compiles information on so-called “installment payments,” industry jargon for recurring monthly fees such as gym memberships.

The National Communications, Telecom and Utilities Exchange collects account information for 63 of that industry’s largest firms — although the group’s director won’t specify which ones. Members use the data to decide who to approve for new accounts and the size of a security deposit.

These dossiers go into what the industry calls a “black box” — a veil of secrecy surrounding the origins of the information, how it is analyzed and who buys it. Consumers have no voice in those decisions, even though the information concerns their lives. The data could help struggling borrowers prove they are ready for the financial mainstream. But the data can also penalize them for actions they didn’t realize were being tracked, forcing them to pay far higher interest rates or more fees.

Out of the black box comes a credit score that can be sold not only to lenders, but also colleges making tuition decisions, landlords choosing tenants or health-care providers determining financial aid. Every score out of the black box can be tailored for each of these buyers, even if it’s about the same person.

“It’s kind of like buying a tailor-fitted suit,” said Jeff Liebl, executive vice president at credit scoring firm eBureau. “When you build a custom model for your client, it just tends to fit better.”

The client in this case is not the consumer, but the lender. Consumers cannot dispute the result, and eBureau’s Web site lists no obvious way for them to request a copy of their files. Meanwhile, companies ranging from landlords to debt collectors may purchase the raw data.

“There are secret databases out there,” said Michael Turner, executive director of the Political and Economic Research Council (PERC), an industry research group. “You have to give consumers those rights and protections.”

Firms difficult to track

The Fair Credit Reporting Act (FCRA) is the federal law intended to protect personal information that can be used to influence consumers’ credit scores, but the rules governing disclosures are not the same across the industry. For example, while the Big Three credit bureaus must provide consumers with a free copy of their report annually, the fourth bureau can charge consumers as much as $11 to access their own records.

The Big Three also must maintain a toll-free phone number and a Web site, annualcreditreport.com, to handle consumer requests. But firms that collect information on rental history, check writing, medical history, employment or insurance claims need only to create a “streamlined” system for consumer requests, although the law does not define what that is. Firms that gather other kinds of data don’t even have to go that far.

“My concern is that there is information in a file somewhere with my name on it, and I have no way of knowing what it is,” Farquhar said in a phone interview.

There is no registry of fourth-bureau companies, which makes tracking down all the firms that track you nearly impossible. The businesses that submit data to fourth-bureau companies have to provide only vague disclosures — if they provide them at all.

Federal law requires lenders to notify their customers that any late or missed payments could be reported to a credit bureau, but they do not have to specify which ones or at what point in the process. DirecTV’s notice, for example, says only that it reserves the right to contact the “appropriate credit reporting agencies.”

The disclosures are also often tucked within what one regulator nicknamed “word barf.” Companies that are not considered lenders do not have to notify consumers at all. Some argue that their business models exempt them from the FCRA altogether.

That creates a chicken-and-egg conundrum: Credit bureaus have to provide consumers a copy of their files only if they request it. But most people don’t ask for it because they do not know the company exists.

Lawmakers have tried to address the problem with a roundabout solution. Rules that took effect this year require lenders to explain to consumers why they are denied credit or didn’t receive the best interest rate.

Starting this week, the notice must include a copy of the consumer’s credit score and the company that created it.

But Mondelli said he thinks the notices are complicated and are likely to generate more questions than answers. L2C is building a Web site to help shed light on what goes into his version of a credit score.

“The poor consumer now in my mind is even more confused than they were before,” he said.

What information should go into the fourth bureau is hotly debated, and even consumer advocates do not agree on one standard. At issue is how well any piece of information can forecast future behavior — and whether these firms are choosing data that create skewed reports on consumers.

“We put numbers in a box and we somehow come up with a magical answer,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “But there’s a real subjective piece to this.”

In 2008, a PERC study concluded that utility bills are one of the most promising types of information in the fourth bureau. The study found that it boosted credit scores for nearly 20 percent of all consumers. It also allowed lenders to create scores for 10 percent of people who did not have one before.

Some consumer advocates worry that even this data could backfire on the neediest consumers. That’s because the price of energy is often volatile, and an unexpected spike could result in a late payment for cash-strapped consumers. Many aid organizations also require families to miss a payment before they can qualify for financial help.

But even the most reliable data are no help to consumers if the information is wrong. Estimates for the number of files in the Big Three that contain errors have ranged from 1 percent to 25 percent, depending on which group conducted the study. The new Consumer Financial Protection Bureau is slated to release a report on the issue this week. But no significant analysis has been done on fourth-bureau data.

Catherine Taylor said the errors in her files have persisted despite several attempts to correct them. Another woman with a similar name would miss a payment or commit a crime, and Taylor said she would suffer for it.

When she tried to volunteer with her daughter’s Girl Scout troop, she said a background check turned up a woman named Cathy Taylor charged with indecent exposure before minors. Taylor was barred from helping out with the troop.

LexisNexis did not respond to questions on Taylor’s case. It said in a statement that it makes changes to less than 0.2 percent of background reports because of consumer complaints.

It took Taylor four years to find a job after she was rejected from the Red Cross. Taylor said she has been turned down for an apartment and now lives in a house purchased through her sister. The stress of dealing with the consequences has exacerbated her diabetes and heart problems, she said.

“I’m guilty and then I have to prove myself innocent, and that’s just not how it’s supposed to be,” Taylor said.

© The Washington Post Company

Source:
http://www.washingtonpost.com/business/economy/little-known-firms-tracking-data-used-in-credit-scores/2011/05/24/gIQAXHcWII.html
_____________

2011-07-09T20:20:00.001-04:00

China oil spill to have long-term impact

An oil spill off China's eastern coast kept hidden from the public for weeks has caused long-term environmental damage that will hurt the area's fishing industry, state media reported Tuesday.

July 5, 2011

Dead seaweed and rotting fish could be seen in waters around Nanhuangcheng Island in Shandong province, near the site of an oil spill that began "in early or mid-June", but was only made public on Friday, the China Daily said.

"The environmental impact caused by the oil leak is long-term," the newspaper quoted an local fisheries association official surnamed Xiao as saying.

Nanhuangcheng Island is about 75 kilometers (45 miles) from the offshore oil field in Bohai Bay where the leak happened.

"The oil leak will definitely influence the fishing industry nearby," Xiao said, adding the extent of the impact was still being assessed.

Meanwhile, state-owned China National Offshore Oil Corporation (CNOOC) tried to stem anger over its failure to warn the public about the spill, saying government authorities were aware of the incident all along.

"We reported the spills to authorities soon after they took place and treatment of the spills is under supervision," CNOOC spokesman Jiang Yongzhi was quoted as telling the Global Times.

The spill at one point had grown into an "oil belt" about three kilometres long and 30 metres wide -- larger than previously reported, the paper said.

The spill was first reported by a member of the public on the popular Chinese micro-blogging site Sina Weibo on June 21.

CNOOC confirmed nine days later that US oil company ConocoPhillips, which operates the Penglai 19-3 oil field where the leak originated, first reported oil on the surface of the sea "in early or mid-June", the China Daily said.

CNOOC said cleanup work was almost finished and the spill had been brought under control.

(c) 2011 AFP

Related Articles:
http://www.guardian.co.uk/environment/blog/2011/jul/07/china-oil-spill-cover-up-bohai-sea

http://www.stltoday.com/business/national-and-international/article_0071f59e-14a8-59d8-a90b-21c5e4e493e7.html

http://www.greenpeace.org/international/en/multimedia/slideshows/Dalian-Oil-Spill-Accident/

Source:
http://www.physorg.com/news/2011-07-china-oil-long-term-impact.html

_________________

2011-07-02T11:31:00.002-04:00

Amy Goodman, with WikiLeaks Editor-In-Chief Julian Assange and Slovenian Philosopher Slavoj Žižek Discuss Information

WATCH ENTIRE INTERVIEW
http://www.democracynow.org/blog/2011/7/5/watch_full_video_of_wikileaks_julian_assange_philosopher_slavoj_iek_with_amy_goodman

_______________

2011-07-01T19:45:00.003-04:00

WikiLeaks' Brilliant MasterCard Commercial Parody

The Daily Conversation
June 29, 2011

A spoof of the fact that major credit card and online payment companies have withheld over $15 Million in donations to WikiLeaks.

"What are the differences between Mark Zuckerberg and me? I give private information on corporations to you for free, and I’m a villain. Zuckerberg gives your private information to corporations for money and he’s Man of the Year."
-- Julian Assange

Support WikiLeaks
http://wikileaks.org/support.html

Join the conversation on Facebook
http://www.facebook.com/thedailyconversation

Follow The Daily Conversation on Twitter
http://www.twitter.com/thedailyconvo

YouTube
http://www.youtube.com/watch?v=jzMN2c24Y1s
___________________

2011-07-01T16:06:00.000-04:00

Amy Goodman to host Discussion with WikiLeaks Editor-In-Chief Julian Assange and Slovenian Philosopher Slavoj Žižek

Event will be broadcast live from London July 2 at 11am EDT

Within the past year, whistleblower website WikiLeaks has released three of the most significant leaks of classified information in history: the Iraq War Logs, the Guantánamo Bay files and Cablegate. Since then the world has undoubtedly changed. Ambassadors have resigned amid scandals exposed by leaked cables; governments have ordered reviews of their computer security; and pro-democracy movements have swept across the Middle East and North Africa—in part fueled, some believe, by WikiLeaks revelations.

This Saturday, July 2, Amy Goodman will moderate a conversation with WikiLeaks editor-in-chief Julian Assange and renowned Slovenian philosopher, Slavoj Žižek. Sponsored by the Frontline Club, the event will be broadcast from The Troxy theater in London. Democracy Now will broadcast a live stream of the discussion starting at 11am EDT at www.DemocracyNow.org.

You can post your questions for the panelists ahead of time on the Democracy Now! Facebook page and submit them to the Frontline Club by emailing events@frontlineclub.com with the subject line "Question 2 July."

Focusing on the ethics and philosophy behind WikiLeaks’ work, the talk will provide a rare opportunity to hear two of the world’s most prominent thinkers discuss some of the most pressing issues of our time.
It will also mark the publication of the paperback edition of Žižek’s Living in the End Times, in which he argues that new ways of using and sharing information, in particular WikiLeaks, are one of a number of harbingers of the end of global capitalism as we know it.

For more information, visit FrontlineClub.com.

If you would like to host the live stream on your website, please contact Jessica Lee for more information (jessica at democracynow dot org).

Click here to see Democracy Now!’s extensive coverage of WikiLeaks, including several interviews with Julian Assange.

Click here to see Slavoj Žižek Interviews on Democracy Now!

ABOUT DEMOCRACY NOW!:
Democracy Now! is an independent, global, daily news hour broadcast in English and in Spanish on more than 900 public television and radio stations in 35 countries around the world.

ABOUT AMY GOODMAN:
Amy Goodman is an award-winning investigative journalist, syndicated columnist, author and the host of Democracy Now! Goodman is the first journalist to receive the Right Livelihood Award, widely known as the “Alternative Nobel Prize” for "developing an innovative model of truly independent grassroots political journalism that brings to millions of people the alternative voices that are often excluded by the mainstream media." The Independent of London named Amy Goodman and Democracy Now! "an inspiration"; pulsemedia.org placed Goodman at the top of their 20 Top Global Media Figures. Goodman is the author of four New York Times bestsellers. Her latest book, Breaking the Sound Barrier, proves the power of independent journalism in the struggle for a better world.

Source:
http://www.democracynow.org/blog/2011/6/28/watch_a_livestream_amy_goodmans_interview_with_wikileaks_editor_in_chief_julian_assange
____________________

2011-06-28T20:36:00.001-04:00

A Brief History of the Corporation: 1600 to 2100

by Venkat
Ribbonfarm.com
June 8, 2011

On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded. In less than three weeks, another 30 banks collapsed across Europe, bringing trade to a standstill.

On July 15, the directors of the Company applied to the Bank of England for a £400,000 loan. Two weeks later, they wanted another £300,000. By August, the directors wanted a £1 million bailout. The news began leaking out and seemingly contrite executives, running from angry shareholders, faced furious Parliament members. By January, the terms of a comprehensive bailout were worked out, and the British government inserted its czars into the Company’s management to ensure compliance with its terms.

If this sounds eerily familiar, it shouldn’t. The year was 1772, exactly 239 years ago today, the apogee of power for the corporation as a business construct. The company was the British East India company (EIC). The bubble that burst was the East India Bubble. Between the founding of the EIC in 1600 and the post-subprime world of 2011, the idea of the corporation was born, matured, over-extended, reined-in, refined, patched, updated, over-extended again, propped-up and finally widely declared to be obsolete. Between 2011 and 2100, it will decline — hopefully gracefully — into a well-behaved retiree on the economic scene.

In its 400+ year history, the corporation has achieved extraordinary things, cutting around-the-world travel time from years to less than a day, putting a computer on every desk, a toilet in every home (nearly) and a cellphone within reach of every human. It even put a man on the Moon and kinda-sorta cured AIDS.

So it is a sort of grim privilege for the generations living today to watch the slow demise of such a spectacularly effective intellectual construct. The Age of Corporations is coming to an end. The traditional corporation won’t vanish, but it will cease to be the center of gravity of economic life in another generation or two. They will live on as religious institutions do today, as weakened ghosts of more vital institutions from centuries ago.

It is not yet time for the obituary (and that time may never come), but the sun is certainly setting on the Golden Age of corporations. It is time to review the memoirs of the corporation as an idea, and contemplate a post-corporate future framed by its gradual withdrawal from the center stage of the world’s economic affairs.

Framing Modernity and Globalization

For quite a while now, I have been looking for the right set of frames to get me started on understanding geopolitics and globalization. For a long time, I was misled by the fact that 90% of the available books frame globalization and the emergence of modernity in terms of the nation-state as the fundamental unit of analysis, with politics as the fundamental area of human activity that shapes things. On the face of it, this seems reasonable. Nominally, nation-states subsume economic activity, with even the most powerful multi-national corporations being merely secondary organizing schemes for the world.

But the more I’ve thought about it, the more I’ve been pulled towards a business-first perspective on modernity and globalization. As a result, this post is mostly woven around ideas drawn from five books that provide appropriate fuel for this business-first frame. I will be citing, quoting and otherwise indirectly using these books over several future posts, but I won’t be reviewing them. So if you want to follow the arguments more closely, you may want to read some or all of these. The investment is definitely worthwhile.

The Corporation that Changed the World by Nick Robins, a history of the East India Company, a rather unique original prototype of the idea
Monsoon by Robert Kaplan, an examination of the re-emergence of the Indian Ocean as the primary theater of global geopolitics in the 21st century
The Influence of Sea Power Upon History: 1660-1783 by Alfred Thayer Mahan, a classic examination of how naval power is the most critical link between political, cultural, military and business forces.
The Post-American World by Fareed Zakaria, an examination of the structure of the world being created, not by the decline of America, but by the “rise of the rest.”
The Lever of Riches by Joel Mokyr, probably the most compelling model and account of how technological change drives the evolution of civilizations, through monotonic, path-dependent accumulation of changes

I didn’t settle on these five lightly. I must have browsed or partly-read-and-abandoned dozens of books about modernity and globalization before settling on these as the ones that collectively provided the best framing of the themes that intrigued me. If I were to teach a 101 course on the subject, I’d start with these as required reading in the first 8 weeks.

The human world, like physics, can be reduced to four fundamental forces: culture, politics, war and business. That is also roughly the order of decreasing strength, increasing legibility and partial subsumption of the four forces.

Here is a visualization of my mental model:

Culture is the most mysterious, illegible and powerful force. It includes such tricky things as race, language and religion. Business, like gravity in physics, is the weakest and most legible: it can be reduced to a few basic rules and principles (comprehensible to high-school students) that govern the structure of the corporate form, and descriptive artifacts like macroeconomic indicators, microeconomic balance sheets, annual reports and stock market numbers.

But one quality makes gravity dominate at large space-time scales: gravity affects all masses and is always attractive, never repulsive. So despite its weakness, it dominates things at sufficiently large scales. I don’t want to stretch the metaphor too far, but something similar holds true of business.

On the scale of days or weeks, culture, politics and war matter a lot more in shaping our daily lives. But those forces fundamentally cancel out over longer periods. They are mostly noise, historically speaking. They don’t cause creative-destructive, unidirectional change (whether or not you think of that change as “progress” is a different matter).

Business though, as an expression of the force of unidirectional technological evolution, has a destabilizing unidirectional effect. It is technology, acting through business and Schumpeterian creative-destruction, that drives monotonic, historicist change, for good or bad. Business is the locus where the non-human force of technological change sneaks into the human sphere.

Of course, there is arguably some progress on all four fronts. You could say that Shakespeare represents progress with respect to Aeschylus, and Tom Stoppard with respect to Shakespeare. You could say Obama understands politics in ways that say, Hammurabi did not. You could say that General Petraeus thinks of the problems of military strategy in ways that Genghis Khan did not. But all these are decidedly weak claims.

On the other hand the proposition that Facebook (the corporation) is in some ways a beast entirely beyond the comprehension of an ancient Silk Road trader seems vastly more solid. And this is entirely a function of the intimate relationship between business and technology. Culture is suspicious of technology. Politics is mostly indifferent to and above it. War-making uses it, but maintains an arms-length separation. Business?

It gets into bed with it. It is sort of vaguely plausible that you could switch artists, politicians and generals around with their peers from another age and still expect them to function. But there is no meaningful way for a businessman from (say) 2000 BC to comprehend what Mark Zuckerberg does, let alone take over for him. Too much magical technological water has flowed under the bridge.

Arthur C. Clarke once said that any sufficiently advanced technology is indistinguishable from magic, but technology (and science) aren’t what create the visible magic. Most of the magic never leaves journal papers or discarded engineering prototypes. It is business that creates the world of magic, not technology itself. And the story of business in the last 400 years is the story of the corporate form.

There are some who treat corporate forms as yet another technology (in this case a technology of people-management), but despite the trappings of scientific foundations (usually in psychology) and engineering synthesis (we speak of organizational “design”), the corporate form is not a technology. It is the consequence of a social contract like the one that anchors nationhood. It is a codified bundle of quasi-religious beliefs externalized into an animate form that seeks to preserve itself like any other living creature.

The Corporate View of history: 1600 – 2100

We are not used to viewing world history through the perspective of the corporation for the very good reason that corporations are a recent invention, and instances that had the ability to transform the world in magical ways did not really exist till the EIC was born. Businesses of course, have been around for a while. The oldest continuously surviving business, until recently, was Kongo Gumi, a Japanese temple construction business founded in 584 AD that finally closed its doors in 2009. Guilds and banks have existed since the 16th century.

Trading merchants, who raised capital to fund individual ships or voyages, often with some royal patronage, were also not a new phenomenon. What was new was the idea of a publicly traded joint-stock corporation, an entity with rights similar to those of states and individuals, with limited liability and significant autonomy (even in its earliest days, when corporations were formed for defined periods of time by royal charter).

This idea morphed a lot as it evolved (most significantly in the aftermath of the East India Bubble), but it retained a recognizable DNA throughout. Many authors such as Gary Hamel (The Future of Management), Tom Malone (The Future of Work) and Don Tapscott (Wikinomics) have talked about how the traditional corporate form is getting obsolete. But in digging around, I found to my surprise that nobody has actually attempted to meaningfully represent the birth-to-obsoloscence evolution of the idea of the corporation.
Here is my first stab at it (I am working on a much more detailed, data-driven timeline as a side project):

Here is my first stab at it (I am working on a much more detailed, data-driven timeline as a side project):

To understand history — world history in the fullest sense, not just economic history — from this perspective, you need to understand two important points about this evolution of corporations.

The Smithian/Schumpeterian Divide

The first point is that the corporate form was born in the era of Mercantilism, the economic ideology that (zero-sum) control of land is the foundation of all economic power.

In politics, Mercantilism led to balance-of-power models. In business, once the Age of Exploration (the 16th century) opened up the world, it led to mercantilist corporations focused on trade (if land is the source of all economic power, the only way to grow value faster than your land holdings permit, is to trade on advantageous terms).

The forces of radical technological change — the Industrial Revolution — did not seriously kick in until after nearly 200 years of corporate evolution (1600-1800) in a mercantilist mold. Mercantilist models of economic growth map to what Joel Mokyr calls Smithian Growth, after Adam Smith. It is worth noting here that Adam Smith published The Wealth of Nations in 1776, strongly influenced by his reading of the events surrounding the bursting of the East India Bubble in 1772 and debates in Parliament about its mismanagement. Smith was both the prophet of doom for the Mercantilist corporation, and the herald of what came to replace it: the Schumpeterian corporation. Mokyr characterizes the growth created by the latter as Schumpeterian growth.

The corporate form therefore spent almost 200 years — nearly half of its life to date — being shaped by Mercantilist thinking, a fundamentally zero-sum way of viewing the world. It is easy to underestimate the impact of this early life since the physical form of modern corporations looks so different. But to the extent that organizational forms represent externalized mental models, codified concepts and structure-following-strategy (as Alfred Chandler eloquently put it), the corporate form contains the inertia of that early formative stage.

In fact, in terms of the two functions that Drucker considered the only essential ones in business, marketing and innovation, the Mercantilist corporation lacked one. The archetypal Mercantilist corporation, the EIC, understood marketing intimately and managed demand and supply with extraordinary accuracy. But it did not innovate.

Innovation was the function grafted onto the corporate form by the possibility of Schumpeterian growth, but it would take nearly an entire additional century for the function to be properly absorbed into corporations. It was not until after the American Civil War and the Gilded Age that businesses fundamentally reorganized around (as we will see) time instead of space, which led, as we will see, to a central role for ideas and therefore the innovation function.

The Black Hills Gold Rush of the 1870s, the focus of the Deadwood saga, was in a way the last hurrah of Mercantilist thinking. William Randolph Hearst, the son of gold mining mogul George Hearst who took over Deadwood in the 1870s, made his name with newspapers. The baton had formally been passed from mercantilists to schumpeterians.

This divide between the two models can be placed at around 1800, the nominal start date of the Industrial Revolution, as the ideas of Renaissance Science met the energy of coal to create a cocktail that would allow corporations to colonize time.

Reach versus Power

The second thing to understand about the evolution of the corporation is that the apogee of power did not coincide with the apogee of reach. In the 1780s, only a small fraction of humanity was employed by corporations, but corporations were shaping the destinies of empires. In the centuries that followed the crash of 1772, the power of the corporation was curtailed significantly, but in terms of sheer reach, they continued to grow, until by around 1980, a significant fraction of humanity was effectively being governed by corporations.

I don’t have numbers for the whole world, but for America, corporations employed less than 20% of the population in 1780, and over 80% in 1980, and have been declining since (I have cited these figures before; they are from Gareth Morgan’s Images of Organization and Dan Pink’s Free Agent Nation). Employment fraction is of course only one of the many dimensions of corporate power (which include economic, material, cultural, human and political forms of power), but this graph provides some sense of the numbers behind the rise and fall of the corporation as an idea.

It is tempting to analyze corporations in terms of some measure of overall power, which I call “reach.” Certainly corporations today seem far more powerful than those of the 1700s, but the point is that the form is much weaker today, even though it has organized more of our lives. This is roughly the same as the distinction between fertility of women and population growth: the peak in fertility (a per-capita number) and peak in population growth rates (an aggregate) behave differently.

To make sense of the form, the divide between the Smithian and Schumpeterian growth epochs is much more useful than the dynamics of reach. This gives us a useful 3-phase model of the history of the corporation: the Mercantilist/Smithian era from 1600-1800, the Industrial/Schumpeterian era from 1800 – 2000 and finally, the era we are entering, which I will dub the Information/Coasean era. By a happy accident, there is a major economist whose ideas help fingerprint the economic contours of our world: Ronald Coase.

This post is mainly about the two historical phases, and are in a sense a macro-prequel to the ideas I normally write about which are more individual-focused and future-oriented.

I: Smithian Growth and the Mercantilist Economy (1600 – 1800)

The story of the old corporation and the sea

It is difficult for us in 2011, with Walmart and Facebook as examples of corporations that significantly control our lives, to understand the sheer power the East India Company exercised during its heyday. Power that makes even the most out-of-control of today’s corporations seem tame by comparison. To a large extent, the history of the first 200 years of corporate evolution is the history of the East India Company. And despite its name and nation of origin, to think of it as a corporation that helped Britain rule India is to entirely misunderstand the nature of the beast.

Two images hint at its actual globe-straddling, 10x-Walmart influence: the image of the Boston Tea Partiers dumping crates of tea into the sea during the American struggle for independence, and the image of smoky opium dens in China. One image symbolizes the rise of a new empire. The other marks the decline of an old one.

The East India Company supplied both the tea and the opium.

At a broader level, the EIC managed to balance an unbalanced trade equation between Europe and Asia whose solution had eluded even the Roman empire. Massive flows of gold and silver from Europe to Asia via the Silk and Spice routes had been a given in world trade for several thousand years. Asia simply had far more to sell than it wanted to buy. Until the EIC came along

A very rough sketch of how the EIC solved the equation reveals the structure of value-addition in the mercantilist world economy.

The EIC started out by buying textiles from Bengal and tea from China in exchange for gold and silver.

Then it realized it was playing the same sucker game that had trapped and helped bankrupt Rome.

Next, it figured out that it could take control of the opium industry in Bengal, trade opium for tea in China with a significant surplus, and use the money to buy the textiles it needed in Bengal. Guns would be needed.
As a bonus, along with its partners, it participated in yet another clever trade: textiles for slaves along the coast of Africa, who could be sold in America for gold and silver.

For this scheme to work, three foreground things and one background thing had to happen: the corporation had to effectively take over Bengal (and eventually all of India), Hong Kong (and eventually, all of China, indirectly) and England. Robert Clive achieved the first goal by 1757.

An employee of the EIC, William Jardine, founded what is today Jardine Matheson, the spinoff corporation most associated with Hong Kong and the historic opium trade. It was, during in its early history, what we would call today a narco-terrorist corporation; the Taliban today are kindergarteners in that game by comparison. And while the corporation never actually took control of the British Crown, it came close several times, by financing the government during its many troubles.

The background development was simpler. England had to take over the oceans and ensure the safe operations of the EIC.

Just how comprehensively did the EIC control the affairs of states? Bengal is an excellent example. In the 1600s and the first half of the 1700s, before the Industrial Revolution, Bengali textiles were the dominant note in the giant sucking sound drawing away European wealth (which was flowing from the mines and farms of the Americas). The European market, once the EIC had shoved the Dutch VOC aside, constantly demanded more and more of an increasing variety of textiles, ignoring the complaining of its own weavers.

Initially, the company did no more than battle the Dutch and Portuguese on water, and negotiate agreements to set up trading posts on land. For a while, it played by the rules of the Mughal empire and its intricate system of economic control based on various imperial decrees and permissions. The Mughal system kept the business world firmly subservient to the political class, and ensured a level playing field for all traders. Bengal in the 17th and 18th centuries was a cheerful drama of Turks, Arabs, Armenians, Indians, Chinese and Europeans. Trade in the key commodities, textiles, opium, saltpeter and betel nuts, was carefully managed to keep the empire on top.

But eventually, as the threat from the Dutch was tamed, it became clear that the company actually had more firepower at its disposal than most of the nation-states it was dealing with. The realization led to the first big domino falling, in the corporate colonization of India, at the battle of Plassey. Robert Clive along with Indian co-conspirators managed to take over Bengal, appoint a puppet Nawab, and get himself appointed as the Mughal diwan (finance minister/treasurer) of the province of Bengal, charged with tax collection and economic administration on behalf of the weakened Mughals, who were busy destroying their empire.

Even people who are familiar enough with world history to recognize the name Robert Clive rarely understand the extent to which this was the act of a single sociopath within a dangerously unregulated corporation, rather than the country it was nominally subservient to (England).

This history doesn’t really stand out in sharp relief until you contrast it with the behavior of modern corporations. Today, we listen with shock to rumors about the backroom influence of corporations like Halliburton or BP, and politicians being in bed with the business leaders in the Too-Big-to-Fail companies they are supposed to regulate.

The EIC was the original too-big-to-fail corporation. The EIC was the beneficiary of the original Big Bailout. Before there was TARP, there was the Tea Act of 1773 and the Pitt India Act of 1783. The former was a failed attempt to rein in the EIC, which cost Britain the American Colonies. The latter created the British Raj as Britain doubled down in the east to recover from its losses in the west. An invisible thread connects the histories of India and America at this point. Lord Cornwallis, the loser at the Siege of Yorktown in 1781 during the revolutionary war, became the second Governor General of India in 1786.

But these events were set in motion over 30 years earlier, in the 1750s. There was no need for backroom subterfuge. It was all out in the open because the corporation was such a new beast, nobody really understood the dangers it represented.

The EIC maintained an army. Its merchant ships often carried vastly more firepower than the naval ships of lesser nations. Its officers were not only not prevented from making money on the side, private trade was actually a perk of employment (it was exactly this perk that allowed William Jardine to start a rival business that took over the China trade in the EIC’s old age). And finally — the cherry on the sundae — there was nothing preventing its officers like Clive from simultaneously holding political appointments that legitimized conflicts of interest.

If you thought it was bad enough that Dick Cheney used to work for Halliburton before he took office, imagine if he’d worked there while in office, with legitimate authority to use his government power to favor his corporate employer and make as much money on the side as he wanted, and call in the Army and Navy to enforce his will. That picture gives you an idea of the position Robert Clive found himself in, in 1757.
He made out like a bandit. A full 150 years before American corporate barons earned the appellation “robber.”

In the aftermath of Plassey, in his dual position of Mughal diwan of Bengal and representative of the EIC with permission to make money for himself and the company, and the armed power to enforce his will, Clive did exactly what you’d expect an unprincipled and enterprising adventurer to do. He killed the golden goose. He squeezed the Bengal textile industry dry for profits, destroying its sustainability.

A bubble in London and a famine in Bengal later, the industry collapsed under the pressure (Bengali economist Amartya Sen would make his bones and win the Nobel two centuries later, studying such famines). With industrialization and machine-made textiles taking over in a few decades, the economy had been destroyed. But by that time the EIC had already moved on to the next opportunities for predatory trade: opium and tea.

The East India bubble was a turning point. Thanks to a rare moment of the Crown being more powerful than the company during the bust, the bailout and regulation that came in the aftermath of the bubble fundamentally altered the structure of the EIC and the power relations between it and the state. Over the next 70 years, political, military and economic power were gradually separated and modern checks and balances against corporate excess came into being.

The whole intricate story of the corporate takeover of Bengal is told in detail in Robins’ book. The Battle of Plassey is actually almost irrelevant; most of the action was in the intrigue that led up to it, and followed. Even if you have some familiarity with Indian and British history during that period, chances are you’ve never drilled down into the intricate details. It has all the elements of a great movie: there is deceit, forgery of contracts, licensing frauds, murder, double-crossing, arm-twisting and everything else you could hope for in a juicy business story.

As an enabling mechanism, Britain had to rule the seas, comprehensively shut out the Dutch, keep France, the Habsburgs, the Ottomans (and later Russia) occupied on land, and have enough firepower left over to protect the EIC’s operations when the EIC’s own guns did not suffice. It is not too much of a stretch to say that for at least a century and a half, England’s foreign policy was a dance in Europe in service of the EIC’s needs on the oceans.

That story, with much of the action in Europe, but most of the important consequences in America and Asia, is told in Mahan’s book. (Though boats were likely invented before the wheel, surprisingly, the huge influence of sea power upon history was not generally recognized until Mahan wrote his classic. The book is deep and dense. It’s worth reading just for the story of how Rome defeated Carthage through invisible negative-space non-action on the seas by the Roman Navy. I won’t dive into the details here, except to note that Mahan’s book is the essential lens you need to understand the peculiar military conditions in the 17th and 18th centuries that made the birth of the corporation possible.)

To read both books is to experience a process of enlightenment. An illegible period of world history suddenly becomes legible. The broad sweep of world history between 1500-1800 makes no real sense (between approximately the decline of Islam and the rise of the British Empire) except through the story of the EIC and corporate mercantilism in general.

The short version is as follows.

Constantinople fell to the Ottomans in 1453 and the last Muslim ruler was thrown out of Spain in 1492, the year Columbus sailed the ocean blue. Vasco de Gama found a sea route to India in 1498. The three events together caused a defensive consolidation of Islam under the later Ottomans, and an economic undermining of the Islamic world (a process that would directly lead to the radicalization of Islam under the influence of religious leaders like Abd-al Wahhab (1703-1792)).

The 16th century makes a vague sort of sense as the “Age of Exploration,” but it really makes a lot more sense as the startup/first-mover/early-adopter phase of the corporate mercantilism. The period was dominated by the daring pioneer spirit of Spain and Portugal, which together served as the Silicon Valley of Mercantilism. But the maritime business operations of Spain and Portugal turned out to be the MySpace and Friendster of Mercantilism: pioneers who could not capitalize on their early lead.

Conventionally, it is understood that the British and the Dutch were the ones who truly took over. But in reality, it was two corporations that took over: the EIC and the VOC (the Dutch East India Company, Vereenigde Oost-Indische Compagnie, founded one year after the EIC) the Facebook and LinkedIn of Mercantile economics respectively. Both were fundamentally more independent of the nation states that had given birth to them than any business entities in history. The EIC more so than the VOC. Both eventually became complex multi-national beasts.

A lot of other stuff happened between 1600 – 1800. The names from world history are familiar ones: Elizabeth I, Louis XIV, Akbar, the Qing emperors (the dynasty is better known than individual emperors) and the American Founding Fathers. The events that come to mind are political ones: the founding of America, the English Civil War, the rise of the Ottomans and Mughals.

The important names in the history of the EIC are less well-known: Josiah Child, Robert Clive, Warren Hastings. The events, like Plassey, seem like sideshows on the margins of land-based empires.

The British Empire lives on in memories, museums and grand monuments in two countries. Company Raj is largely forgotten. The Leadenhall docks in London, the heart of the action, have disappeared today under new construction.

But arguably, the doings of the EIC and VOC on the water were more important than the pageantry on land. Today the invisible web of container shipping serves as the bloodstream of the world. Its foundations were laid by the EIC.

For nearly two centuries they ruled unchallenged, until finally the nations woke up to their corporate enemies on the water. With the reining in and gradual decline of the EIC between 1780 and 1857, the war between the next generation of corporations and nations moved to a new domain: the world of time.

The last phase of Mercantilism eventually came to an end by the 1850s, as events ranging from the first war of Independence in India (known in Britain as the Sepoy Mutiny), the first Opium War and Perry prying Japan open signaled the end of the Mercantilist corporation worldwide. The EIC wound up its operations in 1876.

But the Mercantilist corporation died many decades before that as an idea. A new idea began to take its place in the early 19th century: the Schumpeterian corporation that controlled, not trade routes, but time. It added the second of the two essential Druckerian functions to the corporation: innovation.

II. Schumpeterian Growth and the Industrial Economy (1800 – 2000)

The colonization of time and the apparently endless frontier

To understand what changed in 1800, consider this extremely misleading table about GDP shares of different countries, between 1600-1870. There are many roughly similar versions floating around in globalization debates, and the numbers are usually used gleefully to shock people who have no sense of history. I call this the “most misleading table in the world.”

Chinese and Indian jingoists in particular, are prone to misreading this table as evidence that colonization “stole” wealth from Asia (the collapse of GDP share for China and India actually went much further, into the low single digits, in the 20th century). The claim of GDP theft is true if you use a zero-sum Mercantilist frame of reference (and it is true in a different sense of “steal” that this table does not show).

But the Mercantilist model was already sharply declining by 1800.

Something else was happening, and Fareed Zakaria, as far as I know, is the only major commentator to read this sort of table correctly, in The Post-American World. He notes that what matters is not absolute totals, but per-capita productivity.

We get a much clearer picture of the real standing of countries if we consider economic growth and GDP per capita. Western Europe GDP per capita was higher than that of both China and India by 1500; by 1600 it was 50% higher than China’s. From there, the gap kept growing. Between 1350 and 1950 — six hundred years — GDP per capita remained roughly constant in India and China (hovering around $600 for China and $550 for India). In the same period, Western European GDP per capita went from $662 to $4,594, a 594 percent increase.

Sure, corporations and nations may have been running on Mercantilist logic, but the undercurrent of Schumpeterian growth was taking off in Europe as early as 1500 in the less organized sectors like agriculture. It was only formally recognized and tamed in the early 1800s, but the technology genie had escaped.

The action shifted to two huge wildcards in world affairs of the 1800s: the newly-born nation of America and the awakening giant in the east, Russia. Per capita productivity is about efficient use of human time. But time, unlike space, is not a collective and objective dimension of human experience. It is a private and subjective one. Two people cannot own the same piece of land, but they can own the same piece of time. To own space, you control it by force of arms. To own time is to own attention. To own attention, it must first be freed up, one individual stream of consciousness at a time.

The Schumpeterian corporation was about colonizing individual minds. Ideas powered by essentially limitless fossil-fuel energy allowed it to actually pull it off.

By the mid 1800s, as the EIC and its peers declined, the battle seemingly shifted back to land, especially in the run-up to and aftermath of, the American Civil War. I haven’t made complete sense of the Russian half of the story, but that peaked later and ultimately proved less important than the American half, so it is probably reaosonably safe to treat the story of Schumpeterian growth as an essentially American story.

If the EIC was the archetype of the Mercantilist era, the Pennsylvania Railroad company was probably the best archetype for the Schumpeterian corporation. Modern corporate management as well Soviet forms of statist governance can be traced back to it. In many ways the railroads solved a vastly speeded up version of the problem solved by the EIC: complex coordination across a large area. Unlike the EIC though, the railroads were built around the telegraph, rather than postal mail, as the communication system. The difference was like the difference between the nervous systems of invertebrates and vertebrates.

If the ship sailing the Indian Ocean ferrying tea, textiles, opium and spices was the star of the mercantilist era, the steam engine and steamboat opening up America were the stars of the Schumpeterian era. Almost everybody misunderstood what was happening. Traveling up and down the Mississippi, the steamboat seemed to be opening up the American interior. Traveling across the breadth of America, the railroad seemed to be opening up the wealth of the West, and the great possibilities of the Pacific Ocean.

Those were side effects. The primary effect of steam was not that it helped colonize a new land, but that it started the colonization of time. First, social time was colonized. The anarchy of time zones across the vast expanse of America was first tamed by the railroads for the narrow purpose of maintaining train schedules, but ultimately, the tools that served to coordinate train schedules: the mechanical clock and time zones, served to colonize human minds. An exhibit I saw recently at the Union Pacific Railroad Museum in Omaha clearly illustrates this crucial fragment of history:

The steam engine was a fundamentally different beast than the sailing ship. For all its sophistication, the technology of sail was mostly a very-refined craft, not an engineering discipline based on science. You can trace a relatively continuous line of development, with relatively few new scientific or mathematical ideas, from early Roman galleys, Arab dhows and Chinese junks, all the way to the amazing Tea Clippers of the mid 19th century (Mokyr sketches out the story well, as does Mahan, in more detail).

Steam power though was a scientific and engineering invention. Sailing ships were the crowning achievements of the age of craft guilds. Steam engines created, and were created by engineers, marketers and business owners working together with (significantly disempowered) craftsmen in genuinely industrial modes of production. Scientific principles about gases, heat, thermodynamics and energy applied to practical ends, resulting in new artifacts. The disempowerment of craftsmen would continue through the Schumpeterian age, until Fredrick Taylor found ways to completely strip mine all craft out of the minds of craftsmen, and put it into machines and the minds of managers. It sounds awful when I put it that way, and it was, in human terms, but there is no denying that the process was mostly inevitable and that the result was vastly better products.

The Schumpeterian corporation did to business what the doctrine of Blitzkrieg would do to warfare in 1939: move humans at the speed of technology instead of moving technology at the speed of humans. Steam power used the coal trust fund (and later, oil) to fundamentally speed up human events and decouple them from the constraints of limited forms of energy such as the wind or human muscles. Blitzkrieg allowed armies to roar ahead at 30-40 miles per hour instead of marching at 5 miles per hour. Blitzeconomics allowed the global economy to roar ahead at 8% annual growth rates instead of the theoretical 0% average across the world for Mercantilist zero-sum economics. “Progress” had begun.

The equation was simple: energy and ideas turned into products and services could be used to buy time.

Specifically, energy and ideas could be used to shrink autonomously-owned individual time and grow a space of corporate-owned time, to be divided between production and consumption. Two phrases were invented to name the phenomenon: productivity meant shrinking autonomously-owned time. Increased standard of living through time-saving devices became code for the fact that the “freed up” time through “labor saving” devices was actually the de facto property of corporations. It was a Faustian bargain.

Many people misunderstood the fundamental nature of Schumpeterian growth as being fueled by ideas rather than time. Ideas fueled by energy can free up time which can then partly be used to create more ideas to free up more time. It is a positive feedback cycle, but with a limit. The fundamental scarce resource is time. There is only one Earth worth of space to colonize. Only one fossil-fuel store of energy to dig out. Only 24 hours per person per day to turn into capitive attention.

Among the people who got it wrong was my favorite visionary, Vannevar Bush, who talked of science: the endless frontier. To believe that there is an arguably limitless supply of valuable ideas waiting to be discovered is one thing. To argue that they constitute a limitless reserve of value for Schumpeterian growth to deliver is to misunderstand how ideas work: they are only valuable if attention is efficiently directed to the right places to discover them and energy is used to turn them into businesses, and Arthur-Clarke magic.

It is fairly obvious that Schumpeterian growth has been fueled so far by reserves of fossil fuels. It is less obvious that it is also fueled by reserves of collectively-managed attention.

For two centuries, we burned coal and oil without a thought. Then suddenly, around 1980, Peak Oil seemed to loom menacingly closer.

For the same two centuries it seemed like time/attention reserves could be endlessly mined. New pockets of attention could always be discovered, colonized and turned into wealth.

Then the Internet happened, and we discovered the ability to mine time as fast as it could be discovered in hidden pockets of attention. And we discovered limits.

And suddenly a new peak started to loom: Peak Attention.

III. Coasean Growth and the Perspective Economy

Peak Attention and Alternative Attention Sources

I am not sure who first came up with the term Peak Attention, but the analogy to Peak Oil is surprisingly precise. It has its critics, but I think the model is basically correct.

Peak Oil refers to a graph of oil production with a maximum called Hubbert’s peak, that represents peak oil production. The theory behind it is that new oil reserves become harder to find over time, are smaller in size, and harder to mine. You have to look harder and work harder for every new gallon, new wells run dry faster than old ones, and the frequency of discovery goes down. You have to drill more.

There is certainly plenty of energy all around (the Sun and the wind, to name two sources), but oil represents a particularly high-value kind.

Attention behaves the same way. Take an average housewife, the target of much time mining early in the 20th century. It was clear where her attention was directed. Laundry, cooking, walking to the well for water, cleaning, were all obvious attention sinks. Washing machines, kitchen appliances, plumbing and vacuum cleaners helped free up a lot of that attention, which was then immediately directed (as corporate-captive attention) to magazines and television.

But as you find and capture most of the wild attention, new pockets of attention become harder to find. Worse, you now have to cannibalize your own previous uses of captive attention. Time for TV must be stolen from magazines and newspapers. Time for specialized entertainment must be stolen from time devoted to generalized entertainment.

Sure, there is an equivalent to the Sun in the picture. Just ask anyone who has tried mindfulness meditation, and you’ll understand why the limits to attention (and therefore the value of time) are far further out than we think.

The point isn’t that we are running out of attention. We are running out of the equivalent of oil: high-energy-concentration pockets of easily mined fuel.

The result is a spectacular kind of bubble-and-bust.

Each new pocket of attention is harder to find: maybe your product needs to steal attention from that one TV obscure show watched by just 3% of the population between 11:30 and 12:30 AM. The next displacement will fragment the attention even more. When found, each new pocket is less valuable. There is a lot more money to be made in replacing hand-washing time with washing-machine plus magazine time, than there is to be found in replacing one hour of TV with a different hour of TV.

What’s more, due to the increasingly frantic zero-sum competition over attention, each new “well” of attention runs out sooner. We know this idea as shorter product lifespans.

So one effect of Peak Attention is that every human mind has been mined to capacity using attention-oil drilling technologies. To get to Clay Shirky’s hypothetical notion of cognitive surplus, we need Alternative Attention sources.

To put it in terms of per-capita productivity gains, we hit a plateau.

We can now connect the dots to Zakaria’s reading of global GDP trends, and explain why the action is shifting back to Asia, after being dominated by Europe for 600 years.

Europe may have increased per capita productivity 594% in 600 years, while China and India stayed where they were, but Europe has been slowing down and Asia has been catching up. When Asia hits Peak Attention (America is already past it, I believe), absolute size, rather than big productivity differentials, will again define the game, and the center of gravity of economic activity will shift to Asia.

If you think that’s a long way off, you are probably thinking in terms of living standards rather than attention and energy. In those terms, sure, China and India have a long way to go before catching up with even Southeast Asia. But standard of living is the wrong variable. It is a derived variable, a function of available energy and attention supply. China and India will never catch up (though Western standards of living will decline), but Peak Attention will hit both countries nevertheless. Within the next 10 years or so.

What happens as the action shifts? Kaplan’s Monsoon frames the future in possibly the most effective way. Once again, it is the oceans, rather than land, that will become the theater for the next act of the human drama. While American lifestyle designers are fleeing to Bali, much bigger things are afoot in the region.

And when that shift happens, the Schumpeterian corporation, the oil rig of human attention, will start to decline at an accelerating rate. Lifestyle businesses and other oddball contraptions — the solar panels and wind farms of attention economics — will start to take over.

It will be the dawn of the age of Coasean growth.

Adam Smith’s fundamental ideas helped explain the mechanics of Mercantile economics and the colonization of space.

Joseph Schumpeter’s ideas helped extend Smith’s ideas to cover Industrial economics and the colonization of time.

Ronald Coase turned 100 in 2010. He is best known for his work on transaction costs, social costs and the nature of the firm. Where most classical economists have nothing much to say about the corporate form, for Coase, it has been the main focus of his life.

Without realizing it, the hundreds of entrepreneurs, startup-studios and incubators, 4-hour-work-weekers and lifestyle designers around the world, experimenting with novel business structures and the attention mining technologies of social media, are collectively triggering the age of Coasean growth.

Coasean growth is not measured in terms of national GDP growth. That’s a Smithian/Mercantilist measure of growth.

It is also not measured in terms of 8% returns on the global stock market. That is a Schumpeterian growth measure. For that model of growth to continue would be a case of civilizational cancer (“growth for the sake of growth is the ideology of the cancer cell” as Edward Abbey put it).

Coasean growth is fundamentally not measured in aggregate terms at all. It is measured in individual terms. An individual’s income and productivity may both actually decline, with net growth in a Coasean sense.

How do we measure Coasean growth? I have no idea. I am open to suggestions. All I know is that the metric will need to be hyper-personalized and relative to individuals rather than countries, corporations or the global economy. There will be a meaningful notion of Venkat’s rate of Coasean growth, but no equivalent for larger entities.

The fundamental scarce resource that Coasean growth discovers and colonizes is neither space, nor time. It is perspective.

The bad news: it too is a scarce resource that can be mined to a Peak Perspective situation.

The good news: you will likely need to colonize your own unclaimed perspective territory. No collectivist business machinery will really be able to mine it out of you.

Those are stories for another day. Stay tuned.

Note #1: This post weighs in at over 7000 words and is a new record for me.
Note #2: I hope those of you who have read Tempo got about 34.2% more value out of this post.
Note #3: Yeah, I am opening up a new blogging battlefront, after nearly two years of pussyfooting around geopolitics and globalization via things like container shipping and garbage. Frankly, I’ve been meaning to for a while, but simply wasn’t ready.

Source:
http://www.ribbonfarm.com/2011/06/08/a-brief-history-of-the-corporation-1600-to-2100/
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