The Banker

A similar tax has been proposed for the U.S. by the AFL-CIO

A Terrible Divide

By BOB HERBERT

Look out the window. More and more Americans are being left behind in an economy that is being divided ever more starkly between the haves and the have-nots. Not only are millions of people jobless and millions more underemployed, but more and more of the so-called fringe benefits and public services that help make life livable, or even bearable, in a modern society are being put to the torch.

Employer-based pensions, paid vacations, health benefits and the like are going the way of phone booths and VCRs. As poverty increases and reliable employment becomes less and less the norm, the dwindling number of workers with any sort of job security or guaranteed pensions (think teachers and other modestly compensated public employees) are being viewed with increasing contempt. How dare they enjoy a modicum of economic comfort?

It turns out that a lot of those jobs were never so secure, after all. As the Center on Budget and Policy Priorities tells us:

“At least 44 states and the District of Columbia have reduced overall wages paid to state workers by laying off workers, requiring them to take unpaid leave (furloughs), freezing hew hires, or similar actions. State and local governments have eliminated 407,000 jobs since August 2008, federal data show.”

We have not faced up to the scale of the economic crisis that still confronts the United States.

Standards of living for the people on the wrong side of the economic divide are being ratcheted lower and will remain that way for many years to come. Forget the fairy tales being spun by politicians in both parties — that somehow they can impose service cuts that are drastic enough to bring federal and local budgets into balance while at the same time developing economic growth strong enough to support a robust middle class. It would take a Bernie Madoff to do that.

In the real world, schools and libraries are being closed and other educational services are being curtailed. Police officers are being fired. Access to health services for poor families is being restricted. “At least 29 states and the District of Columbia,” according to the budget center, “are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or are significantly increasing the cost of these services.”

For a variety of reasons, there are not enough tax revenues being generated to pay for the basic public services that one would expect in an advanced country like the United States. The rich are not shouldering their fair share of the tax burden. The wars in Afghanistan and Iraq continue to consume an insane amount of revenue. And there are not enough jobs available at decent enough pay to ease some of the demand for public services while at the same time increasing the amount of taxes paid by ordinary workers.

The U.S. cannot cut its way out of this crisis. Instead of trying to figure out how to keep 4-year-olds out of pre-kindergarten classes, or how to withhold life-saving treatments from Medicaid recipients, or how to cheat the elderly out of their Social Security, the nation’s leaders should be trying seriously to figure out what to do about the future of the American work force.

Enormous numbers of workers are in grave danger of being left behind permanently. Businesses have figured out how to prosper without putting the unemployed back to work in jobs that pay well and offer decent benefits.

Corporate profits and the stock markets are way up. Businesses are sitting atop mountains of cash. Put people back to work? Forget about it. Has anyone bothered to notice that much of those profits are the result of aggressive payroll-cutting — companies making do with fewer, less well-paid and harder-working employees?

For American corporations, the action is increasingly elsewhere. Their interests are not the same as those of workers, or the country as a whole. As Harold Meyerson put it in The American Prospect: “Our corporations don’t need us anymore. Half their revenues come from abroad. Their products, increasingly, come from abroad as well.”

American workers are in a world of hurt. Anyone who thinks that politicians can improve this sorry state of affairs by hacking away at Social Security, Medicare and the public schools are great candidates for involuntary commitment.

New ideas on a grand scale are needed. The United States can’t thrive with so many of its citizens condemned to shrunken standards of living because they can’t find adequate employment. Long-term joblessness is a recipe for societal destabilization. It should not be tolerated in a country with as much wealth as the United States. It’s destructive, and it’s wrong.

The Ronald Reagan crowd loved to talk about morning in America. For millions of individuals and families, perhaps the majority, it’s more like twilight — with nighttime coming on fast.

 

http://www.nytimes.com/2011/02/08/opinion/08herbert.html?_r=1&hp=&pagewanted=print

Stop Budget cuts- Kasich Rally. January 8, 2011. Columbus, Ohio.

Economic Policy: Failure by Design

Response to Gov Brown's State of the State

 SACRAMENTO PROGRESSIVE ALLIANCE

Dear Governor Brown,                                                Jan. 31, 2011

In your State of the State Address tonight you requested ideas on where revenues might come from to avoid the painful budget cuts proposed.   Here are our recommendations.

It is clear that the California budget is in crisis, and the issues are clear  in Governor Brown’s budget proposals.  There are no quick nor easy solutions. We can not simply cut our way out of the crisis; budget cuts and lay offs make the recession worse.

School funding reveals the nature of crisis.  In the last two years the k-12 budget “solutions” have cut 4.6 billion dollars from the schools. We have larger classes and fewer teachers.  School reform has stopped- except for the politicians’  speeches.  School funding makes up a total of 30% of the state budget.  Any crisis in the state budget and any cuts in the state budget will make school budgets worse.

California will need to raise taxes to fund  schools and to repair the social safety net.  Anti tax radicals and Republicans  oppose any tax increases.   The state ‘solutions’ of the last three years depended upon receiving federal stimulus money.  The stimulus monies are almost finished and with the Republican winning control  of Congress there will probably not be more funds.

The world wide economic crisis was created by  U.S. finance capital and banking, mostly on Wall Street , ie. Chase Banks, Bank of America, AIG, and others.   Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of U.S. unemployment rate and the loss of 2 million manufacturing jobs.  More than 15   million people are out of work.  At the national level almost all of the projected deficit through 2020 will be the result of three factors: the Great recession, the tax cuts of the early 2000s under George W. Bush, and the hundreds of billions of dollars of war spending.

The economic stalemate in California has produced school funding cuts far beyond reasonable levels.  At present,  the state ranks 47^th among all states in its per-pupil spending, spending $2,856 less per pupil than the national average.

  In California we need to spend more state money to improve schools, to develop roads and infrastructure, and to create jobs.  Those who are well educated are more employed and paying taxes while those with less education, those who leave school, are in a prolonged economic crisis.  It is well documented that our schools and our universities are in a finance crisis.  We need to be preparing young people for new jobs and to create new industries.  The success of students in higher education will significantly determine California’s future competitiveness and prosperity.   Improving education, including both k-12 and higher education, makes California more likely to attract investment and the creation of new jobs and new industries.

California government must protect and empower our citizens. To foster prosperity  it must prepare the young for civic participation. (BTW. This has been recognized since the first California Constitution of 1849).  Protection includes health care, social security, safe food, environmental protection, safe streets, job protection, etc. Our state  needs roads, bridges, telephone lines, communications systems, energy and quality education.  These services make freedom and prosperity possible. Conservative opposition to these services ignore the economy’s  need for infrastructure.

Specific proposals  to increase revenue:

·      Enforce the current California law taxing the sales of goods by out of state companies ( such as Amazon)  over the internet.  Gain. 1.2 billion $. There is already legislation to do this.

·      Pass the 10.1 billion dollar jobs package as proposed in the Assembly last year.  This would pay off debts to local governments and keep teachers in classrooms to avoid massive layoffs.  Pay for the Jobs package with a new oil severance tax.  California is the only oil producing state in the country that imposes no taxes on the pumping of oil. The proposed tax was to be 6% of the sales price of oil.  Alaska and Louisiana both charge 12.5%.   

·      Establish a  public state bank such as the Bank of North Dakota. Initially move 25% of all state revenue, receipts and reserves into this bank and 25% of all PERS and STRS funds. Manage the bank as a public service. Over time, finance state borrowing from our own bank.   Gain.  6% of the budget.

·      Continue efforts to eliminate waste, fraud and abuse where it exists.  There may be legitimate savings here.  Employees, particularly managers should not be able  to inflate pay in the year or two before retirement in order to receive an outsized pension benefit. While these cases  are not the major source of financial stress of pension systems, abuses are frequently publicized and undermine confidence in the administration and fairness of public employee pensions.

·      Repeal the 2009 and 2008 tax cuts for corporations passed to gain the extra Republican votes for the budget.  Savings $1 billion.

·      As a consequence of the just passed federal tax reductions, including the reduction of taxes to the wealthiest taxpayers,  Washington-based Citizens for Tax Justice estimate that  California’s richest taxpayers will be saving about $14 billion annually on their federal taxes. The next wealthiest 4 percent, with an average income of $310,000, will save another $6.5 billion.  State taxes should be increased on these two groups to secure this available 20.6 Billion dollars to fund the necessary jobs creation projects. 

·      Sell state bonds to gain funds for investment. At present we pay bond holders a market rate.  Rates are so low at present we should borrow and invest.  To achieve a   stimulus we could sell many more bonds in particular to  the public employees retirement system PERS  and STRS.  

·      Many more sources of revenue need to be developed.  We have been thinking too small and looking in the wrong directions           

Since the state can not go into debt it will need to use tax policy to raise the funds necessary for public investments.  The state has also been targeting particular industries, notably the film industry with tax subsidies and local governments have been providing tax subsidies in the form of enterprise zones.  Along with needed  tax reform, these forms of subsidies (debt) should be reformed to focus on economic growth.    Tax suggestions were in the prior section.

 The legislature could also place on the ballot a “split roll” property tax initiative to deal with the present inequities of taxation. 
 In virtually every county, commercial property is paying a far smaller share of the property tax since Proposition 13 passed in 1978.


Commercial property is able to exploit huge loopholes in the law to avoid reassessment upon change in ownership.

Alternative;

             We can follow the process of Ireland and Greece and dramatically cut services and raise taxes and impoverish the economy.  Then, since the state  is poorer and has less income you will need to raise more taxes and cut more services all in an effort to protect the excessive profits of bankers and bond holders.

California can continue the current process of cuts and reductions.  The fiscal crises of the states – all the states- has caused major cut backs and retrenchment and made the economic crisis approach a depression.  The state cut backs are greater than the federal stimulus producing a prolonging of the crisis for working people.  Continuing on the present direction produces obscene profits for billionaires along with growing poverty and hardships for the majority.

In Conclusion:

    Providing  you with these sources reveals that “another way is possible.”  We refuse to accept the severe cuts in social services, education, police and fire protection, and health care among others. Relying upon budget cuts to “balance” the budget means leaving in place the many current corporate subsidies for the well off while producing more unemployment and hardship for the majority.

   Please use your leadership position to produce a humane budget this year.  Then, if you do, we can work together to pass the proposed revenue initiatives in the June election.

Duane Campbell,

For the Sacramento Progressive Alliance. 

A committee of Progressive Democrats of America

2827 Catania Way, Sacramento, Ca. 95826

Sources

Gar Alperovitz, America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy.  (2005) John Wiley and Sons

Dean Baker,  Plunder and Blunder: The Rise and Fall of the Bubble Economy, (2009)

Campbell, Duane.  Choosing Democracy: a practical guide to multicultural education. (2010)

Justin Fox,  The Myth of the Rational Market: a History of Risk, Reward, and Delusion on Wall Street. (2009)

Jeff Faux, The Global Class War: How America’s Bipartisan Elite Lost Our Future- and What It Will Take to Win It Back. ( 2006)

William Grieder,  The Soul of Capitalism: Opening Paths to a Moral Economy. (2003).

David Harvey, The Enigma of Capital and the Crisis of Capitalism.  (2010)

Paul Krugman,  The Return of Depression Economics and the Crisis of 2008.  (2009)

Nomi Prins.  It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to  Wall Street. (2009)

Joe Schwartz,  The Future of Democratic Equality; Rebuilding Social Solidarity in a Fragmented United States. (2008)

Joseph E. Stiglitz.  Free Fall, America, Free markets, and the Shrinking World Economy.  (2010

State of the Union- A change in perspective

State of the Union : a change in perspective

I found the overall frame of President Obama’s State of the Union speech  most interesting, the U.S. economy needs to grow to catch up with other countries.  “We need to Out-Innovate, Out Educate, and Out-Build  the rest of the world,” or  our own standard of living will continue to decline.

This speech accepts the end of U.S. economic domination of the world economy a perspective made clear in the world wide financial crisis of 2007/2009.  The U.S. based corporations need to invest and the U.S. government needs to invest in crating a new future.

This change in perspective is not great, but it is realistic.

The  promise  of America should be a good job for all,  the opportunity to have  a rewarding career, and the chance for a life that is more than simply the workplace.  The austerity paradigm underlying the tax and budget cut mania is the enemy of human progress.  It does not promote good jobs, rewarding   careers, nor a fulfilling life.

And, this from the N.Y.Times

Financial Crisis Was Avoidable, Inquiry Finds

By SEWELL CHAN

WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry. [Chaired by Sacramentan Phil Angelides]

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”

While the panel, the Financial Crisis Inquiry Commission, accuses several financial institutions of greed, ineptitude or both, some of its gravest conclusions concern government failings, with embarrassing implications for both parties. But the panel was itself divided along partisan lines, which could blunt the impact of its findings.

State budget crisis- alternatives

 At the national level almost all of the projected deficit through 2020 will be the result of three factors: the Great recession, the tax cuts of the early 2000s under George W. Bush, and the hundreds of billions of dollars of war spending.

            The just published report on Western State budgets (above) from the Brookings Institute shows that western states, where the housing bubble was the worst, also have the largest deficits now.  The economic crisis produced at least half of the current crisis.

            And, the national government will not be bailing us out.  Almost all of the projected national  deficit through 2020 will be the result of three factors: the Great recession, the tax cuts of the early 2000s under George W. Bush, and the hundreds of billions of dollars of war spending.

  In California we need to spend more state money to improve schools, to develop roads and infrastructure, and to create jobs.  Those who are well educated are more employed and paying taxes while those with less education, those who leave school, are in a prolonged economic crisis.  It is well documented that our schools and our universities are in a finance crisis.  We need to be preparing young people for new jobs and to create new industries.  The success of students in higher education will significantly determine California’s future competitiveness and prosperity.   Improving education, including both k-12 and higher education, makes California more likely to attract investment and the creation of new jobs and new industries.

California government must protect and empower our citizens. To foster prosperity  it must prepare the young for civic participation. (BTW. This has been recognized since the first California Constitution of 1849).  Protection includes health care, social security, safe food, environmental protection, safe streets, job protection, etc.

The finance capital collapse and theft on Wall Street produced this crisis, not immigration, not public workers.   Now Wall Street has recovered, but the states and specifically California is left with the destruction.  The best available response is for California to tax and spend to stimulate the economy- that is Keynesian stimulus. The anti tax radicals and the Republicans will oppose this approach.  They must be defeated.  

Specific proposals :

                        Pass an oil extraction tax.  Require that the oil companies pay taxes when they take our oil out of the ground and then refine it and sell it back to us.  Gain.10 Billions.  Pass the 10.1 billion dollar jobs package as proposed in the Assembly last year.  This would pay off debts to local governments and keep teachers in classrooms to avoid massive layoffs.

Pay for the Jobs package with a new oil severance tax.    Imposition of an oil severance tax. California is the only oil producing state in the country that imposes no taxes on the pumping of oil. The proposed tax was to be 6% of the sales price of oil.  Alaska and Louisiana both charge 12.5%.     

            Continue efforts to eliminate waste, fraud and abusive where it exists.  There may be legitimate savings here.  For example, clearly there are problems with the excessive pay of U.C. Administrators and the retirement of some police and fire captains. Repeal the 2009 and 2008 tax cuts for corporations passed to gain the extra Republican votes for the budget.  Savings $1 billion.

            As a consequence of the just passed federal tax reductions, including the reduction of taxes to the wealthiest taxpayers,  Washington-based Citizens for Tax Justice estimate that  California’s richest taxpayers will be saving about $14 billion annually on their federal taxes. The next wealthiest 4 percent, with an average income of $310,000, will save another $6.5 billion.  State taxes should be increased on these two groups to secure this available 20.6 Billion dollars to fund the necessary jobs creation projects.  

            Sell state bonds to gain funds for investment. At present we pay bond holders a market rate.  Rates are so low at present we should borrow and invest.  To achieve a Keynesian stimulus we could sell many more bonds in particular to  the public employees retirement system PERS  and STRS.   Once started ( stimulated) debt financed building will stimulate more building bringing private  debt financing into productive investments.

            Many more sources of revenue need to be developed.  We have been thinking too small and looking in the wrong directions.             

Sacramento Bee misses the story

The Sacramento Bee on Saturday features an article by Dale Kasler on page 1 entititled “State’s economic levers limited.”  This piece and others promote a piece that is fundamentally wrong.  It is simply not accurate that the state can not respond to the economic crisis.  Here is a start.  I will return to the issue of why the press persistently gets this issue wrong.

It is clear that the California budget is in crisis,  but the argument that there is little that can be done is simply wrong. We can not simply cut our way out of the crisis, budget cuts and lay offs make the recession worse.California will need to raise taxes to fund the schools and to repair the social safety net.

Specific policy proposals:

Enforce the current California law taxing the sales of goods by out of state companies ( such as Amazon)  over the internet.  Gain. 1.2 billion $.

            Pass an oil extraction tax.  Require that the oil companies pay taxes when they take our oil out of the ground and then refine it and sell it back to us.  Gain.10 Billions.  Pass the 10.1 billion dollar jobs package as proposed in the Assembly last year.  This would pay off debts to local governments and keep teachers in classrooms to avoid massive layoffs. California is the only oil producing state in the country that imposes no taxes on the pumping of oil. The proposed tax was to be 6% of the sales price of oil.  Alaska and Louisiana both charge 12.5%.   

            Establish a  public state bank such as the Bank of North Dakota. Initially move 25% of all state revenue, receipts and reserves into this bank and 25% of all PERS and STRS funds. Manage the bank as a public service. Over time, finance state borrowing from our own bank.   Gain.  6% of the budget.

            Repeal the 2009 and 2008 tax cuts for corporations passed to gain the extra Republican votes for the budget.  Savings $1 billion.

            As a consequence of the just passed federal tax reductions, including the reduction of taxes to the wealthiest taxpayers,  Washington-based Citizens for Tax Justice estimate that  California’s richest taxpayers will be saving about $14 billion annually on their federal taxes. The next wealthiest 4 percent, with an average income of $310,000, will save another $6.5 billion.  State taxes should be increased on these two groups to secure this available 20.6 Billion dollars to fund the necessary jobs creation projects.  

            Sell state bonds to gain funds for investment. At present we pay bond holders a market rate.  Rates are so low at present we should borrow and invest.  To achieve a Keynesian stimulus we could sell many more bonds in particular to  the public employees retirement system PERS  and STRS.   Once started ( stimulated) debt financed building will stimulate more building bringing private  debt financing into productive investments.

            Many more sources of revenue need to be developed.  We have been thinking too small and looking in the wrong directions. 

The world wide economic crisis was created by  U.S. finance capital and banking, mostly on Wall Street ,ie. Chase Banks, Bank of America, AIG, and others.   Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of U.S. unemployment rate and the loss of 2 million manufacturing jobs.  More than 15   million people are out of work.  At the national level almost all of the projected deficit through 2020 will be the result of three factors: the Great recession, the tax cuts of the early 2000s under George W. Bush, and the hundreds of billions of dollars of war spending.

The economic stalemate in California has produced school funding cuts far beyond reasonable levels.  At present,  the state ranks 47^th among all states in its per-pupil spending, spending $2,856 less per pupil than the national average.

  California government must protect and empower our citizens. To foster prosperity  it must prepare the young for civic participation. (BTW. This has been recognized since the first California Constitution of 1849).  Protection includes health care, social security, safe food, environmental protection, safe streets, job protection, etc.

Our economy needs roads, bridges, telephone lines, communications systems, energy and quality education.  These services make freedom and prosperity possible. Conservative opposition to these services ignore the economies need for infrastructure.

Well. If these things are available, why do the “experts” interviewed for news stories not consider them ?

Here are a couple of major economists explaining the problem;

Robert Samuelson in the Washington Post,  “Here we have the most spectacular and financial crisis in decades… and the one group that spends most of its waking hours analyzing the economy basically missed it…. The nation’s economists , “ seemed singularly disinclined to engage in ‘rigorous self-criticism to explain their lapses’.  Or, Nobel Prize winning economist Paul Krugman, “The economics profession went astray because economists, as a group, mistook beauty, clad in impressive looking mathematics, for truth.”

Or,  geographer David Harvey, author of The Enigma of Capital and the Crisis of Capitalism, 2010, in a speech to the World Social Forum, in 2010.

The current populations of academicians, intellectuals and experts in the social sciences and humanities are by and large ill-equipped to undertake the collective task of revolutionizing our knowledge structures. They have, in fact, been deeply implicated in the construction of the new systems of neoliberal governmentality that evade questions of legitimacy and democracy and foster a technocratic authoritarian politics.  Few seem predisposed to engage in self-critical reflection.  Universities continue to promote the same useless courses on neo classical economic or rational choice political theory as if nothing has happened and the vaunted business schools simply add a course or two on business ethics or how to make money out of other people’s bankruptcies. After all, the crisis arose out of human greed and there is nothing that can be done about that!

The Looting of the U.S. economy: Les Leopold


1."Honest, we didn't do it!" 
Two years ago Wall Street's colossal greed crashed our economy. Our financial elites created and spewed highly leveraged toxic assets around the globe. These poisonous "innovations" pumped up the housing bubble and Wall Street grew insanely rich in the process. When it all burst, we learned that the big Wall Street institutions that had caused the crash were far too big to fail -- and too connected. High government officials came to their rescue with trillions in cash and guarantees -- underwritten, of course, by we taxpayers. Everyone knew this at the time. But if you asked just about anyone on "The Street" they denied all culpability and pointed the finger everywhere else: Fannie, Freddie, the Fed, the Community Reinvestment Act, tax deductions for home buying, bad regulations, not enough regulations, too many regulations, too much consumer debt, the rating agencies, the Chinese -- and on and on. Sadly, their blame-shifting strategy worked, bamboozling the media and people across the political spectrum. The GOP members of the Financial Crisis Commission are so drunk with this Kool-Aid that in their minority report, they refuse even to use the words "Wall Street" or "speculation" in assessing the causes of the crash. Hypocrites? Crooks? Morons? Take your pick.

2."The overall costs will be incredibly small in comparison to almost any experience we can look at in the United States or around the world." 
Ever since Treasury Secretary Timothy Geithner screwed up his tax returns we knew he was numerically challenged. But his statement to Congress on December 16, 2010, on the cost of the bailout shows a willful inability to count. Yes, Wall Street has paid back most of our bailout funds. Whoopee! Our economy is in shambles, and millions of people are suffering. With his offensive "no big deal" analysis, Geithner glosses over all this human misery, and sidesteps the hidden costs of the bailout, including the financial insurance we taxpayers provided to every giant financial company in the country via the Fed. On the open market, that insurance -- which guarantees trillions of dollars in toxic assets -- would come at a very steep price. We coughed it up for free. But that's still chump change compared to the human costs of the worst employment crisis since the Great Depression -- the lost income, the depleted savings, the ravaged neighborhoods. Then there's the capsized state and local budgets, the public service reductions, the laid off teachers, firefighters and police officers -- all resulting from a plunge in public revenues caused by Wall Street's crash. Why aren't these costs on Geithner's balance sheet? A cynic might think Tim was priming us to accept the latest round of Wall Street bonuses. Hey -- they paid us back, so why should we care how much they earn?

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009. He is currently working on a new book, How to Earn $900,000 an Hour: The Rise of Wall Street Billionaires and the New Class War, (hopefully to be published in 2011).

Khodorkovsky and the U.S. press

Interesting U.S. news coverage of the trial of  Russian billionaire Mikhairl Khordorkovsky.   He has been tried and convicted of corruption and the U.S. Department of State and U.S. press report this as evidence of the lack of a rule of law in Russia.

Well, that is half of the story.  What they don’t say is that Khordorkovsky really was a crook.  He stole at least $20 Billion from the Russian people.  In 2006 he was the 16^th. richest person in the world- based upon his looting of the Russian oil giant Yukos Oil which he acquired by market manipulation and theft.  The resources were taken from the Russian people in the time of rapid transition to a market economy.

He was tried and found guilty of corruption and not paying taxes. 

It is true that he was not the only robber baron who stole these resources.  This is selective persecution.  There are at least 10 major oligarchs and up to a hundred minor oligarchs, but Khodorkovsky was the boldest, most blatant, and became the richest.  A nation with a troubled economy might not be able to take down an entire oligarchy.  That would be like having banks too big to fail.

Why is it wrong to prosecute him?

Now, lets compare this to the U.S. corruption creating the financial crisis of 2007- 2009 when some  $13 Trillion was looted from the U.S. economy by Wall Street financiers.  The CEO’s of the major firms are walking free – some had to pay fines

. Persons  with criminal responsibility like the Russian Oligarchs, among others,  would be Richard Marin, Jeffrey B. Lane, Mathew Tannin , Ralph Cioffie of Bear Stearn,  Robert Rubin, Henry Paulson, Lloyd C. Blankfein and David Vinear of Goldman Sachs,  Joseph Gassano, Maurice Greenberg, and Robert B. Willumstad, of AIG,  Daniel Mudd of Fannie Me, Angelo Mozilo of Country Wide. Yet these people are all walking around free.   They caused more pain, more unemployment, and more economic destruction than Khodorkovsky, but the U.S. press only talks about a small timer like Bernie Madoff.

I am not defending the Russian judicial system nor the press, however, the differences are notable.  Who is protecting the U.S. oligarchs?

See: The Oligarchs: Wealth, Power, and the New Russia.  David E. Hoffman.

Republicans kill extended unemployment benefits

Senate Republicans and a handful of Democrats Saturday defeated a bill to reauthorize unemployment benefits for the long-term jobless and a plethora of tax provisions for the middle class not because of the bill's trillion-dollar deficit impact, but because it did not include tax cuts for the rich.

Two bills were defeated. By a vote of 53-36, the Senate rejected a measure by Sen. Max Baucus (D-Mont.) that would have preserved Bush era tax cuts for lower- and middle-income taxpayers, but would have allowed cuts for people earning more than $200,000 a year to expire. Democrats Joe Manchin (W.Va.), Ben Nelson (Neb.), Jim Webb (Va.), Russ Feingold (Wisc.) and Independent Democrat Joe Lieberman (Conn.) joined Republicans in voting nay. 

Economic changes leaving U.S. behind

The U.S.  economic crisis was severe in part because of the   growth of finance capital as the  dominant actor  in our economy .  Finance was in crisis first, then the production of goods and services collapsed taking some $13 Trillion out of the  U.S. economy and caused a  $ 34 Trillion loss in the world economy.  The extreme  income inequality produced  by the three-decade rise of the financial industry has significant  societal consequences including fundamental changes in employment  and education opportunities .

As a consequence of the last thirty years of  the dominance of finance capital and income stagnation, the U.S. is losing its power in the world economy.

            This is how one author describes the economic shifts,

“The earthquake of the past few years has damaged western economies while leaving those of emerging countries, particularly Asia, standing. It has also destroyed western prestige. The west has dominated the world economically and intellectually for at least two centuries. That epoch is over. Hitherto, the rulers of emerging countries disliked the west’s pretensions, but respected its competence. This is true no longer. Never again will the west have the sole word. The rise of the Group of 20 leading economies reflects new realities of power and authority.” -- Martin Wolf, Financial Times, July 14, 2010 .

            The U.S.  is no longer the  one dominant economic power in the world.  Here is a listing of the major economic powers.

2009.            

Ranking	Country	Approximate GDP- Purchasing Power Parity
1	United States of America	$13,860,000,000,000
2	China	$7,043,000,000,000
3	Japan	$4,305,000,000,000
4	India	$2,965,000,000,000
5	Germany	$2,833,000,000,000
6	United Kingdom	$2,147,000,000,000
7	Russia	$2,076,000,000,000
8	France	$2,067,000,000,000
9	Brazil	$1,838,000,000,000
10	Italy	$1,800,000,000,000

Of course listing economies as nations is somewhat misleading.  The world economic systems have changed.  Today all of the major economies are varieties of capitalism.  Several strong economies are competing with the U.S.  Multinational corporations ( not national corporations) are  dominant economic players.

Since the U.S. economy is strained and there is no one dominant economic power,  we need to adjust  to this new reality.  We can reduce our burdensome military establishment and leave unnecessary wars.   Why should the U.S. continue to fund the dominant military forces in the world ?  Why should we spend so much of our budget on military forces? While the U.S. has become less of the dominant economic power, we continue to spend more than  6 times more in military costs than our closest competition.

In Afghanistan alone, the U.S. is spending over $100 billion per year in a country whose GDP is only $14 billion.  These costs are not free.  They come from the U.S. taxpayers.

  

Corporations make record profits

Published on Tuesday, November 23, 2010 by Firedoglake.com

Corporations Show Largest Profits in History Amidst Jobs Crisis

by David Dayen

According to revised statistics, the US economy grew at a faster rate than first expected, up to 2.5%. Earlier growth in Q3 2010 was estimated at 2%. But the entire problem with looking at this topline number is reflected in these three paragraphs:

But the most recent increase in GDP still isn’t strong enough to make a dent in the country’s high unemployment rate, stuck at 9.6% in recent months. Analysts say GDP growth of at least 3% is needed to bring down the jobless figure, but many don’t expect the economy to perform that well in the fourth quarter or early next year.

That’s right. Despite record unemployment, and no hope for reductions clearly in sight, corporations have experienced all-time record profits , the highest since the Commerce Department started tracking the figure 60 years ago. They’ve learned to produce as many or more goods without workers.

Read the entire post at www.sacramentopa.blogspot.com