Friday, August 31, 2007

Point, Click ... Eavesdrop: How the FBI Wiretap Net Operates

By Ryan Singel Email 08.29.07

The FBI has quietly built a sophisticated, point-and-click surveillance system that performs instant wiretaps on almost any communications device, according to nearly a thousand pages of restricted documents newly released under the Freedom of Information Act.

The surveillance system, called DCSNet, for Digital Collection System Network, connects FBI wiretapping rooms to switches controlled by traditional land-line operators, internet-telephony providers and cellular companies. It is far more intricately woven into the nation's telecom infrastructure than observers suspected.

It's a "comprehensive wiretap system that intercepts wire-line phones, cellular phones, SMS and push-to-talk systems," says Steven Bellovin, a Columbia University computer science professor and longtime surveillance expert.

DCSNet is a suite of software that collects, sifts and stores phone numbers, phone calls and text messages. The system directly connects FBI wiretapping outposts around the country to a far-reaching private communications network.

Many of the details of the system and its full capabilities were redacted from the documents acquired by the Electronic Frontier Foundation, but they show that DCSNet includes at least three collection components, each running on Windows-based computers.

The $10 million DCS-3000 client, also known as Red Hook, handles pen-registers and trap-and-traces, a type of surveillance that collects signaling information -- primarily the numbers dialed from a telephone -- but no communications content. (Pen registers record outgoing calls; trap-and-traces record incoming calls.)

DCS-6000, known as Digital Storm, captures and collects the content of phone calls and text messages for full wiretap orders.

A third, classified system, called DCS-5000, is used for wiretaps targeting spies or terrorists.

What DCSNet Can Do

Together, the surveillance systems let FBI agents play back recordings even as they are being captured (like TiVo), create master wiretap files, send digital recordings to translators, track the rough location of targets in real time using cell-tower information, and even stream intercepts outward to mobile surveillance vans.

FBI wiretapping rooms in field offices and undercover locations around the country are connected through a private, encrypted backbone that is separated from the internet. Sprint runs it on the government's behalf.

The network allows an FBI agent in New York, for example, to remotely set up a wiretap on a cell phone based in Sacramento, California, and immediately learn the phone's location, then begin receiving conversations, text messages and voicemail pass codes in New York. With a few keystrokes, the agent can route the recordings to language specialists for translation.

The numbers dialed are automatically sent to FBI analysts trained to interpret phone-call patterns, and are transferred nightly, by external storage devices, to the bureau's Telephone Application Database, where they're subjected to a type of data mining called link analysis.

FBI endpoints on DCSNet have swelled over the years, from 20 "central monitoring plants" at the program's inception, to 57 in 2005, according to undated pages in the released documents. By 2002, those endpoints connected to more than 350 switches.

Today, most carriers maintain their own central hub, called a "mediation switch," that's networked to all the individual switches owned by that carrier, according to the FBI. The FBI's DCS software links to those mediation switches over the internet, likely using an encrypted VPN. Some carriers run the mediation switch themselves, while others pay companies like VeriSign to handle the whole wiretapping process for them.

The numerical scope of DCSNet surveillance is still guarded. But we do know that as telecoms have become more wiretap-friendly, the number of criminal wiretaps alone has climbed from 1,150 in 1996 to 1,839 in 2006. That's a 60 percent jump. And in 2005, 92 percent of those criminal wiretaps targeted cell phones, according to a report published last year.

These figures include both state and federal wiretaps, and do not include antiterrorism wiretaps, which dramatically expanded after 9/11. They also don't count the DCS-3000's collection of incoming and outgoing phone numbers dialed. Far more common than full-blown wiretaps, this level of surveillance requires only that investigators certify that the phone numbers are relevant to an investigation.

The Justice Department reports the number of pen registers to Congress annually, but those numbers aren't public. According to the last figures leaked to the Electronic Privacy Information Center, judges signed 4,886 pen register orders in 1998, along with 4,621 time extensions.

CALEA Switches Rules on Switches

The law that makes the FBI's surveillance network possible had its genesis in the Clinton administration. In the 1990s, the Justice Department began complaining to Congress that digital technology, cellular phones and features like call forwarding would make it difficult for investigators to continue to conduct wiretaps. Congress responded by passing the Communications Assistance for Law Enforcement Act, or CALEA, in 1994, mandating backdoors in U.S. telephone switches.

CALEA requires telecommunications companies to install only telephone-switching equipment that meets detailed wiretapping standards. Prior to CALEA, the FBI would get a court order for a wiretap and present it to a phone company, which would then create a physical tap of the phone system.

With new CALEA-compliant digital switches, the FBI now logs directly into the telecom's network. Once a court order has been sent to a carrier and the carrier turns on the wiretap, the communications data on a surveillance target streams into the FBI's computers in real time.

The Electronic Frontier Foundation requested documents on the system under the Freedom of Information Act, and successfully sued the Justice Department in October 2006.

In May, a federal judge ordered the FBI to provide relevant documents to the EFF every month until it has satisfied the FOIA request.

"So little has been known up until now about how DCS works," says EFF attorney Marcia Hofmann. "This is why it's so important for FOIA requesters to file lawsuits for information they really want."

Special Agent Anthony DiClemente, chief of the Data Acquisition and Intercept Section of the FBI's Operational Technology Division, said the DCS was originally intended in 1997 to be a temporary solution, but has grown into a full-featured CALEA-collection software suite.

"CALEA revolutionizes how law enforcement gets intercept information," DiClemente told Wired News. "Before CALEA, it was a rudimentary system that mimicked Ma Bell."

Privacy groups and security experts have protested CALEA design mandates from the start, but that didn't stop federal regulators from recently expanding the law's reach to force broadband internet service providers and some voice-over-internet companies, such as Vonage, to similarly retrofit their networks for government surveillance.

New Technologies

Meanwhile, the FBI's efforts to keep up with the current communications explosion is never-ending, according to DiClemente.

The released documents suggest that the FBI's wiretapping engineers are struggling with peer-to-peer telephony provider Skype, which offers no central location to wiretap, and with innovations like caller-ID spoofing and phone-number portability.

But DCSNet seems to have kept pace with at least some new technologies, such as cell-phone push-to-talk features and most VOIP internet telephony.

"It is fair to say we can do push-to-talk," DiClemente says. "All of the carriers are living up to their responsibilities under CALEA."

Matt Blaze, a security researcher at the University of Pennsylvania who helped assess the FBI's now-retired Carnivore internet-wiretapping application in 2000, was surprised to see that DCSNet seems equipped to handle such modern communications tools. The FBI has been complaining for years that it couldn't tap these services.

The redacted documentation left Blaze with many questions, however. In particular, he said it's unclear what role the carriers have in opening up a tap, and how that process is secured.

"The real question is the switch architecture on cell networks," said Blaze. "What's the carrier side look like?"

Randy Cadenhead, the privacy counsel for Cox Communications, which offers VOIP phone service and internet access, says the FBI has no independent access to his company's switches.

"Nothing ever gets connected or disconnected until I say so, based upon a court order in our hands," Cadenhead says. "We run the interception process off of my desk, and we track them coming in. We give instructions to relevant field people who allow for interconnection and to make verbal connections with technical representatives at the FBI."

The nation's largest cell-phone providers -- whose customers are targeted in the majority of wiretaps -- were less forthcoming. AT&T politely declined to comment, while Sprint, T-Mobile and Verizon simply ignored requests for comment.

Agent DiClemente, however, seconded Cadenhead's description.

"The carriers have complete control. That's consistent with CALEA," DiClemente said. "The carriers have legal teams to read the order, and they have procedures in place to review the court orders, and they also verify the information and that the target is one of their subscribers."


Despite its ease of use, the new technology is proving more expensive than a traditional wiretap. Telecoms charge the government an average of $2,200 for a 30-day CALEA wiretap, while a traditional intercept costs only $250, according to the Justice Department inspector general. A federal wiretap order in 2006 cost taxpayers $67,000 on average, according to the most recent U.S. Court wiretap report.

What's more, under CALEA, the government had to pay to make pre-1995 phone switches wiretap-friendly. The FBI has spent almost $500 million on that effort, but many traditional wire-line switches still aren't compliant.

Processing all the phone calls sucked in by DCSNet is also costly. At the backend of the data collection, the conversations and phone numbers are transferred to the FBI's Electronic Surveillance Data Management System, an Oracle SQL database that's seen a 62 percent growth in wiretap volume over the last three years -- and more than 3,000 percent growth in digital files like e-mail. Through 2007, the FBI has spent $39 million on the system, which indexes and analyzes data for agents, translators and intelligence analysts.

Security Flaws

To security experts, though, the biggest concern over DCSNet isn't the cost: It's the possibility that push-button wiretapping opens new security holes in the telecommunications network.

More than 100 government officials in Greece learned in 2005 that their cell phones had been bugged, after an unknown hacker exploited CALEA-like functionality in wireless-carrier Vodafone's network. The infiltrator used the switches' wiretap-management software to send copies of officials' phone calls and text messages to other phones, while simultaneously hiding the taps from auditing software.

The FBI's DiClemente says DCSNet has never suffered a similar breach, so far as he knows.

"I know of no issue of compromise, internal or external," DiClemente says. He says the system's security is more than adequate, in part because the wiretaps still "require the assistance of a provider." The FBI also uses physical-security measures to control access to DCSNet end points, and has erected firewalls and other measures to render them "sufficiently isolated," according to DiClemente.

But the documents show that an internal 2003 audit uncovered numerous security vulnerabilities in DCSNet -- many of which mirror problems unearthed in the bureau's Carnivore application years earlier.

In particular, the DCS-3000 machines lacked adequate logging, had insufficient password management, were missing antivirus software, allowed unlimited numbers of incorrect passwords without locking the machine, and used shared logins rather than individual accounts.

The system also required that DCS-3000's user accounts have administrative privileges in Windows, which would allow a hacker who got into the machine to gain complete control.

Columbia's Bellovin says the flaws are appalling and show that the FBI fails to appreciate the risk from insiders.

"The underlying problem isn't so much the weaknesses here, as the FBI attitude towards security," he says. The FBI assumes "the threat is from the outside, not the inside," he adds, and it believes that "to the extent that inside threats exist, they can be controlled by process rather than technology."

Bellovin says any wiretap system faces a slew of risks, such as surveillance targets discovering a tap, or an outsider or corrupt insider setting up unauthorized taps. Moreover, the architectural changes to accommodate easy surveillance on phone switches and the internet can introduce new security and privacy holes.

"Any time something is tappable there is a risk," Bellovin says. "I'm not saying, 'Don't do wiretaps,' but when you start designing a system to be wiretappable, you start to create a new vulnerability. A wiretap is, by definition, a vulnerability from the point of the third party. The question is, can you control it?"

Big Brother Democracy: How Free Speech and Surveillance Are Now Intertwined

By Naomi Klein, The Nation
Posted on August 28, 2007

Recently, as protesters gathered outside the Security and Prosperity Partnership (SPP) summit in Montebello, Quebec, to confront US President George W. Bush, Mexican President Felipe Calderón and Canadian Prime Minister Stephen Harper, the Associated Press reported this surreal detail: "Leaders were not able to see the protesters in person, but they could watch the protesters on TV monitors inside the hotel ... Cameramen hired to ensure that demonstrators would be able to pass along their messages to the three leaders sat idly in a tent full of audio and video equipment ... A sign on the outside of the tent said, 'Our cameras are here today providing your right to be seen and heard. Please let us help you get your message out. Thank You.'"

Yes, it's true: Like contestants on a reality TV show, protesters at the SPP were invited to vent into video cameras, their rants to be beamed to protest-trons inside the summit enclave. It was security state as infotainment -- Big Brother meets, well, Big Brother.

The spokesperson for Prime Minister Harper explained that although protesters were herded into empty fields, the video-link meant that their right to political speech was protected. "Under the law, they need to be seen and heard, and they will be."

It is an argument with sweeping implications. If videotaping activists meets the legal requirement that dissenting citizens have the right to be seen and heard, what else might fit the bill?

How about all the other security cameras that patrolled the summit -- the ones filming demonstrators as they got on and off buses and peacefully walked down the street? What about the cellphone calls that were intercepted, the meetings that were infiltrated, the e-mails that were read? According to the new rules set out in Montebello, all of these actions may soon be recast not as infringements on civil liberties but the opposite: proof of our leaders' commitment to direct, unmediated consultation.

Elections are a crude tool for taking the public temperature -- these methods allow constant, exact monitoring of our beliefs. Think of surveillance as the new participatory democracy; of wiretapping as the political equivalent of Total Request Live.

Protesters in Montebello complained that while they were locked out, CEOs from about thirty of the largest corporations in North America -- from Wal-Mart to Chevron -- were part of the official summit.

But perhaps they had it backward: The CEOs had only an hour and fifteen minutes of face time with the leaders. The activists were being "seen and heard" around the clock. So perhaps instead of shouting about police state tactics, they should have said, "Thank you for listening." (And reading, and watching, and photographing, and data-mining.)

The Montebello "seen and heard" rule also casts the target of the protests in a new light. The SPP is described in the leaders' final statement as an "ambitious" plan to "keep our borders closed to terrorism yet open to trade." In other words, a merger of the North American Free Trade Agreement and the homeland security complex -- NAFTA with spy planes.

The model dates back to September 11, when the US Ambassador to Canada, Paul Cellucci, pronounced that in the new era, "security will trump trade." But there was an out clause: The trade on which Canada's and Mexico's economies depend could continue uninterrupted, as long as those governments were willing to welcome the tentacles of the US "war on terror." Canadian and Mexican business leaders leapt to surrender, aggressively pushing their governments to give in to US demands for "integrated" security in order to keep the goods and tourists flowing.

Almost six years later, the business leaders at Montebello -- under the banner of the North American Competitiveness Council, an official wing of the SPP -- were still holding up "thickening borders" as the bogeyman. The fix? According to the SPP website, "technological solutions, improved information-sharing, and, potentially, the use of biometric identifiers."

From experience we know what this means: continent-wide no-fly lists, searchable and integrated databases, as well as the $2.5 billion contract to Boeing to build a "virtual fence" on the northern and southern borders of the United States, equipped with unmanned drones.

In short, under the SPP vision of the continent, "thick" borders will soon be replaced with a nearly invisible web of continental surveillance -- almost all of it run for profit. Two members of the SPP advisory group -- Lockheed Martin and General Electric -- have already received multibillion-dollar contracts from the US government to build this web. In the Bush era, security doesn't trump big business; it may be the biggest business of all.

In the run-up to the SPP summit, a spate of surveillance scandals helped paint a fuller picture. First, Congress not only failed to curtail the National Security Agency's warrantless wiretapping but opened the door to snooping into bank records, phone call patterns and even physical searches -- all without any onus to prove the subject is a threat.

Next, the Boston Globe reported on plans to link thousands of CCTV cameras on streets, subways, apartment buildings and businesses into networks capable of tracking suspects in real time. And on August 15, confirmation came that the National Geospatial-Intelligence Agency -- the arm of the US military that runs spy planes and satellites over enemy territory -- would be fully integrated into the infrastructure of domestic intelligence gathering and local policing, becoming what the agency calls the "eyes" to the NSA's "ears."

Add a few more high-tech tools -- biometric IDs, facial-recognition software, networked databases of "suspects," GPS bundled into ever more electronic devices -- and you have something like the world of total surveillance most recently portrayed in The Bourne Ultimatum.

Which brings us back to the Security and Prosperity Partnership. Who needs clumsy old border checks when the authorities are making sure we are seen and heard at all times -- in high definition, online and off-, on land and from the sky? Security is the new prosperity. Surveillance is the new democracy.

This column was first published in The Nation ( and please include

Naomi Klein is the author of "No Logo: Taking Aim at the Brand Bullies" and "Fences and Windows: Dispatches From the Front Lines of the Globalization Debate." You can read more at

© 2007 Independent Media Institute. All rights reserved.
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Will Anyone Stop Bush and Cheney's Planned War With Iran?

By Scarecrow
Posted on August 31, 2007

This post, written by Scarecrow, originally appeared on FireDogLake

I think Glenn Greenwald is right that the Bush/Cheney regime is about to start an aggressive war against Iran. And I agree that the Democrats have foolishly paved the way for this to happen.

We can't say we weren't warned. They've been telling us for years they want regime change in Iran. They've told us that Iran poses a nuclear threat in the Middle East. They've told us over and over that it is not acceptable to allow Iran's government to have its own nuclear program. They have put out one provocative and often exaggerated story after another about Iran's nuclear intentions or its capabilities, while ignoring or stepping all over stories from the International Atomic Energy Agency that countered their propaganda or described Iran's efforts to be cooperative. They've told us that they would not rule out military strikes against Iran while they've dragged their feet when pursuing any of the half-hearted efforts at a diplomatic/negotiated alternative to war. And they've told us it is not acceptable to leave this decision to the next Administration.

In the last few weeks, they've ratcheted up the inflammatory rhetoric against Iran. Dick Cheney was recently quoted as saying that military strikes against Iran are warranted. Bush has been telling our military in Iraq to pursue Iranians inside Iraq, so our military leaders have been dutifully rounding up Iranians, even diplomatic guests invited by the Iraqi government. This week they arrested Iranian energy officials who had been invited to help restore Iraq's electricity system. One provocation after another.

Now Bush has described the Iranian regime as posing the threat of a "nuclear holocaust." Not just a "mushroom cloud." This time, it's a nuclear holocaust -- terms reserved for the most heinous of crimes and the most despicable of enemies. No sane government engages in such inflammatory rhetoric. But where is the dissent? Where is the outcry?

Throughout this inexorable march to war, the Democratic Congress has done worse than nothing. They've voted for resolutions condemning Iran without having the factual basis for knowing what Iran is doing or intends, relying only on neocon and Administration propaganda. They'd listened to dishonest and crazed warmongers like Joe Lieberman, for heaven's sake. They've voted for resolutions that would support regime change, but they've refused to pass resolutions or amendments that would require the Administration to seek new authorization to start a war with Iran. Most of our Democratic Presidential candidates -- Kucinich and Gravel excepted -- have pretended to be "serious" people by refusing to rule out military strikes against Iran, even nuclear strikes. These are not serious positions; they are seriously irresponsible.

But of course, this Administration does not need authorization. It it now operating completely outside the law, outside the Constitution, outside any checks by Congress or influence of those who might counsel against war. By Presidential fiat, it has declared the Iranian Revolutionary Guard to be a terrorist group, effectively making them an enemy of the US without any Congressional declaration of war. We have a lawless, reckless and belligerent Administration, and it is about to start another unlawful war, even as it tries to convince the American people that it is a good thing that the regime has 160,000 US troops bogged down in another quagmire, vulnerable to an enlarged regional war. Who will tell this crazed regime to stop? To whom would it even listen?

The Administration has repeatedly told us Iran is responsible for many of the deaths of US soldiers in Iraq. They trot out their propagandists in Iraq to shows us the weapons and their markings, suggesting that their use in Iraq is a delberate policy of the Iranian government. Their neocon supporters are already spreading the theme that Iran has effectively declared war on the US by arming and training those who are killing our soldiers in Iraq.

The only thing the Bush/Cheney regime needs is the money to wage its aggressive war against Iran, but how they'll get it is patently obvious. That money is embedded in the authorizations for supporting US troops and their activities in Iraq. Congress no longer asks what the money if for: it's assumed to be for "supporting the troops." Now the regime is asking for another supplemental authorization -- another $50 billion-- and while Democrats are promising a fight, some are already announcing they will "support the troops" by giving the Administration all the money it requests.

Wake up Democrats: you are being asked to fund an aggressive war against Iran. This war will be on your heads. Stop.

Scarecrow is a regular blogger for FireDogLake

© 2007 Independent Media Institute. All rights reserved.
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On the Right, Public Healthcare for Children is a Socialist Plot

By Paul Krugman, The New York Times
Posted on August 27, 2007

Suppose, for a moment, that the Heritage Foundation were to put out a press release attacking the liberal view that even children whose parents could afford to send them to private school should be entitled to free government-run education.

They'd have a point: many American families with middle-class incomes do send their kids to school at public expense, so taxpayers without school-age children subsidize families that do. And the effect is to displace the private sector: if public schools weren't available, many families would pay for private schools instead.

So let's end this un-American system and make education what it should be -- a matter of individual responsibility and private enterprise. Oh, and we shouldn't have any government mandates that force children to get educated, either. As a Republican presidential candidate might say, the future of America's education system lies in free-market solutions, not socialist models.

O.K., in case you're wondering, I haven't lost my mind, I'm drawing an analogy. The real Heritage press release, titled "The Middle-Class Welfare Kid Next Door," is an attack on proposals to expand the State Children's Health Insurance Program. Such an expansion, says Heritage, will "displace private insurance with government-sponsored health care coverage."

And Rudy Giuliani's call for "free-market solutions, not socialist models" was about health care, not education.

But thinking about how we'd react if they said the same things about education helps dispel the fog of obfuscation right-wingers use to obscure the true nature of their position on children's health.

The truth is that there's no difference in principle between saying that every American child is entitled to an education and saying that every American child is entitled to adequate health care. It's just a matter of historical accident that we think of access to free K-12 education as a basic right, but consider having the government pay children's medical bills "welfare," with all the negative connotations that go with that term.

And conservative opposition to giving every child in this country access to health care is, in a fundamental sense, un-American.

Here's what I mean: The great majority of Americans believe that everyone is entitled to a chance to make the most of his or her life. Even conservatives usually claim to believe that. For example, N. Gregory Mankiw, the former chairman of the Bush Council of Economic Advisers, contrasts the position of liberals, who he says believe in equality of outcomes, with that of conservatives, who he says believe that the goal of policy should be "to give everyone the same shot and not be surprised or concerned when outcomes differ wildly."

But a child who doesn't receive adequate health care, like a child who doesn't receive an adequate education, doesn't have the same shot - he or she doesn't have the same chances in life as children who get both these things.

And insurance is crucial to receiving adequate health care. President Bush may think that lacking insurance is no problem - "I mean, people have access to health care in America. After all, you just go to an emergency room" - but the reality is that the nine million children in America who don't have health insurance often have unmet medical or dental needs, don't have a regular place for medical care, and frequently have to delay care because of cost.

Now, the public understands the importance of health insurance, even if Mr. Bush doesn't. According to a recent New York Times/CBS News poll, an amazing 94 percent of the public regards the fact that many children in America lack health insurance as either a "serious" or a "very serious" problem.

So how can conservatives defend the indefensible, and oppose giving children the health care they need? By trying the old welfare queen in her Cadillac strategy (albeit without the racial innuendo that made it so effective when Reagan used it). That is, to divert public sympathy from people who really need help, they're trying to change the subject to the supposedly undeserving recipients of government aid. Hence the emphasis on the evils of "middle-class welfare."

Proponents of an expansion of children's health care have, as they should, responded to this strategy with facts and figures. Congressional Budget Office estimates show that S-chip expansion would, in fact, primarily benefit those who need it most: the great majority of children receiving coverage under an expanded program would otherwise have been uninsured.

But the more fundamental response should be, so what?

We offer free education, and don't worry about middle-class families getting benefits they don't need, because that's the only way to ensure that every child gets an education - and giving every child a fair chance is the American way. And we should guarantee health care to every child, for the same reason.

AlterNet is making this material available in accordance with Title 17 U.S.C. Section 107: This article is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

© 2007 Independent Media Institute. All rights reserved.
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Spitzer to Sue Bush for Gutting Children's Health Care

By Matt Stoller
Posted on August 30, 2007

This post, written by Matt Stoller, originally appeared on Open Left

Eliot Spitzer, after weathering a rather nast right-wing smear attempt over the past month, is now threatening to sue the Bush administration if Bush goes ahead with his SCHIP strategy and cuts health care to kids in New York state. Spitzer is doing an event tomorrow with Hillary Clinton, which will be webcast today at 10:30am.

It'll be interesting to see how this plays out, and I will say that Spitzer actually knows how to fight.

But the new rules include what Mr. Spitzer called "poison pill" requirements that he said would effectively kill New York's and others states' plans.
"If they come back to us and refuse to budge from the positions they've taken, then we will sue," he said.

Suing the Bush administration to protect the health coverage of poor children? Now that's the Eliot Spitzer we all know and love.

Matt Stoller is a political activist/blogger in DC, and was an editor at MyDD from November 2005 until June 2007. He also consults for the Sunlight Foundation,, and Working Assets as well as proactively networking other progressive bloggers/internet activists and progressive professionals.

© 2007 Independent Media Institute. All rights reserved.
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The Right to Organize is Key to Democracy

By Dean Baker, AlterNet
Posted on August 27, 2007

For the last quarter century, corporate America has been at war against the labor movement. After a long period in which unions were an accepted part of the economic and political landscape, most corporations adopted a much more hostile attitude toward unions. Where unions already were present, employers sought to weaken or break them. In workplaces without unions, employers were prepared to do whatever was necessary to prevent workers from organizing.

This anti-union drive has largely enjoyed the support of the government. For example, it is now a standard practice for employers to fire workers engaged in an organizing drive. A study by John Schmitt and Ben Zipperer, of the Center for Economic and Policy Research, found one in five organizers will be fired during an average organizing drive. Such firings are illegal, but enforcement is sufficiently slow, and the penalties sufficiently small, that most employees eagerly embrace this effective anti-union tactic.

Government policies have also supported anti-union practices in other ways. A main purpose of trade agreements like NAFTA was to make it as easy as possible to relocate factories overseas. The high dollar policy Robert Rubin initiated in the Clinton era also put US manufacturing, and its unionized workers, at a huge disadvantage. A 30 percent over-valued dollar effectively imposes a 30 percent tariff on goods exported from the United States, while providing a subsidy of 30 percent on goods imported into the United States.

As a result of these policies, much manufacturing has, in fact, been moved overseas in the last quarter century, giving the country a trade deficit of more than $700 billion annually. And the jobs lost in manufacturing have been disproportionately union jobs. While the unionization rate in manufacturing was more than 40 percent in the sixties, in 2006 it was just 11.6 percent, less than the 12 percent average for all workers, although still somewhat higher than the 7.4 percent average for the private sector as a whole.

The weakening of the labor movement is not just bad news for the workers who lose union jobs. According to polling data, there are tens of millions of workers who would like to be represented by a union at their workplace, but don't currently have the option. The best way to get a guide as to how many workers would be in unions if they could opt to do so, in the absence of employer threats and harassment, is to look at the unionization rate in the public sector.

While public sector managers are not generally friendly to unions, they can't fire union organizers or use the other harsh anti-union tactics that are now standard practice in the private sector. As a result, more than 36 percent of public sector employees are members of unions. Given the freedom to choose, it is likely a comparable share of private sector workers would also be in unions. This would imply an additional 30 million workers in unions.

In addition to directly benefiting the workers they represent, unions also benefit the larger workforce and society as a whole. In an industry with a strong union presence, non-union firms know they must maintain comparable wages and benefits if they are want to keep their workers from joining a union. The decline of unions has undoubtedly been an important factor in the growth of inequality in the last quarter century.

Unions have also been essential to a wide range of political initiatives over the post-war period. Programs like Medicare, Medicaid and Head Start would not have been possible without the strong support of the labor movement. The same is true of the key civil rights legislation of the sixties. More recently, the labor movement was at the center of the effort to prevent President Bush from privatizing Social Security. It will be difficult to make much progress on a wide range of social and economic issues without the support of a strong labor movement.

Congress is currently debating a bill that would take an important step toward re-establishing the right of workers to join a union. The Employee Free Choice Act (EFCA) would require a company to recognize a union once a majority of workers have signed a card indicating they want to be represented by a union. This gets around the election process, which gives employers a chance to intimidate workers and fire the leaders of an organizing effort. (Under the EFCA, workers can still request an election supervised by the National Labor Relations Board.)

The EFCA would restore some meaning to the right to organize. The bill that has been passed by the House by is currently being blocked by a Republican filibuster in the Senate. While the EFCA is not likely to become law under this Congress (President Bush would almost certainly veto the bill even if it did pass), progressives should recognize the importance of legislation. The right to organize is not the concern of just a small special interest group; it is a basic right that should concern us all. In the same vein, all progressives have an interest in seeing a strong labor movement. For this reason, the EFCA and other measures that level the playing field between labor and management should be top items on the progressive agenda.

Dean Baker is co-director of the Center for Economic and Policy Research.
© 2007 Independent Media Institute. All rights reserved.
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Thursday, August 30, 2007

Repressed Reep Dept

Tearoom Trade Senator


The Jeff Gannon Affair drew our attention to the fact that a male prostitute can sleep over at the White House on multiple occasions. The Mark Foley Affair alerted us to the phenomenon of conservative Republican lawmakers' passion for teenage pageboys. The Ted Haggard Scandal showed us that conservative Republican preachers who sermonize against gay rights can smolder with lust for man-to-man action. The arrest of Republican Florida State Rep. Bob Allen at a park in Central Florida, showed us that the coauthor of a recent public lewdness bill can lewdly solicit sex from an undercover male cop. And now, the Larry Craig Scandal draws our attention to the phenomenon of conservative Republican lawmakers firmly opposed to gay rights getting off on impersonal anonymous homo-sex in men's room toilet stalls.

It looks like two more conservative "family values" Republican senators may be "outed" soon, by Mike Rogers, the same blogger who originally fingered Craig. The gay activist claims that South Carolina Sen. Lindsay Graham is gay. More interestingly, he claims that, "Republican Senate Minority Leader Mitch McConnell's quick expulsion from the Army---for fondling a private's privates---is finally being discussed in Kentucky." He notes that McConnell, discharged after just 10 days in the Army in 1967, "has consistently prevented anyone from seeing his military discharge papers" but a Freedom of Information suit may bring them to light. (After the revelation of Craig's arrest and confession, McConnell cosigned a statement with other top Republican legislators stating, "This is a serious matter" and indicating he is examining "other aspects of the case to determine if additional action is required.")

Schadenfreude aside, I almost feel badly for the rank and file homophobic Christian rightists who have to read about these scandalous goings-on. Perusing some blogs I encounter a couple of their confused, angry reactions:

(1) it's the Log Cabin Republicans' fault,

(2) the Democrats are to blame for promoting the idea that such behavior is "normal." (I haven't found anyone accusing the cop of a politically-motivated set-up.)

The widespread occurrence of such depravity in their own ranks must produce some frustration among the ultras. These men they trust as sincere homophobes, taking their cue from Leviticus 18:22 and Romans 1:26-27, turn out to be such hypocrites. Of course if the sinner repents, and seeks treatment for his sickness, the Christian can forgive. But this cascade of scandals has got to produce some doubts about the whole antigay campaign central to the religious right's political program. The rigid un-nuanced minds of these people crave authority figures, and when the latter so suddenly and deeply disappoint, there has to be some wavering of faith. But that's a good thing.

Forgive my failure to express moral outrage about these scandals. I am among other things an historian of sexuality and attempt to address sexual issues dispassionately. I'm not going to dwell on the Idaho senator's two-facedness---everybody else is doing that anyway---or rejoice in his embarrassing situation, which if he weren't such a fraud would strike me as rather tragic. After all, he was just a guy in an airport restroom, signaling the guy in the next stall that he had some urgent needs which a consenting partner might be able to satisfy. For his trouble he got busted by a cop, apparently well versed in gay subculture protocols, sitting there on a toilet with his pants up for God knows how long (and compensated by how many taxpayer dollars) for the express purpose of arresting men for tapping their feet, and intruding those feet or their hands into the neighboring space expecting a positive response. Sgt. Dave Karsnia was there to crack down on this sort of behavior on the grounds that it infringed the typical toilet-user's privacy. That strikes me as reasonable enough, although I'd think a simple, "get your foot out of my stall, dude," would have immediately aborted the overture.

I wonder how many of these police missions are triggered by complaints by men never threatened or meaningfully harassed during their stall-time but merely disgusted by the realization that there are men in this world so sick as to play footsie on the toilet, soliciting gay sex, and inclined to visit the wrath of God on their degenerate selves by doing so. I don't mean to minimize the sense of privacy invasion felt by those experiencing unwanted stall intrusions, but I can see homophobia as a factor fueling appeals for police action.

The point of the police action in the Minneapolis-St. Paul International Airport last June, which resulted in Craig's arrest, was to discourage men with Craig's particular fetish by arresting a bunch of them. Every so often police departments, responding to complaints from public restroom patrons, undertake these clean-up missions. One Canadian study (published in the Canadian Journal of Criminology and Criminal Justice) indicates that in one day in one restroom around 1990, police charged 17 men. The owner of a facility in another case requested police action, and in one day 30 men were warned. These figures suggest that that the facilities that had come to serve as reliable centers for sexual contact and were visited largely for that purpose. This appears to be a widespread phenomenon.

Yes, I confess I've done some research on this issue over the last 36 hours. As an historian of sexuality, among other things, I tend to approach these issues in a dispassionate, academic fashion. So I checked out Laud Humphreys' Tearoom Trade: Impersonal Sex in Public Places, written under the direction of Harvard sociologist Lee Rainwater, published in 1970 and recipient of the C. Wright Mills Award of the Society for the Study of Social Problems. "Tearoom trade" refers to homosexual activity (almost always oral) in public men's rooms, and Humphreys examines it in clinical detail. His most interesting finding was that over half of the men involved in this activity were married (to women) and carefully separated their private and social selves, donning "the breastplate of righteousness" in public as conservative "moral crusaders" (p. 131f). They expressed no anti-police sentiment, but encouraged more vice squad activity, suggesting that "deviant behavior may be plagued by a sort of moral arms race, in which the deviant is caught in the cycle of establishing new strategic defenses to protect himself from the fallout of his own defensive weapons. It is not necessary to adapt a psychoanalytic viewpoint in order to discern the self-hatred behind such a punishment process" (p. 141). This is not to say that their private, men's room self is at war with their social, official self; it can be flushed away and forgotten as they leave their stalls. But the latter self that takes over at that point wants to appear cleaner than the norm and to sneer with particular distain at all moral defilement.

One thinks of Mark Foley coauthoring legislation criminalizing the sharing of obscenity over the internet with minors. Or Bob Allen authoring a statute against public lewdness. There's a specific pathology here. Craig's record on gay rights has been among the most conservative in the Senate. In 2005 the American Conservative Union gave his voting record a score of 96 out of 100. Outwardly a pious Methodist, a member of the board of directors of the National Rifle Association since 1983, he's the picture of far-right respectability. But there sits, on the tearoom toilet seat, tapping his foot as he solicits gay sex. It's just too amusing. But also sort of sad.

Gary Leupp is Professor of History at Tufts University, and Adjunct Professor of Comparative Religion. He is the author of Servants, Shophands and Laborers in in the Cities of Tokugawa Japan; Male Colors: The Construction of Homosexuality in Tokugawa Japan; and Interracial Intimacy in Japan: Western Men and Japanese Women, 1543-1900. He is also a contributor to CounterPunch's merciless chronicle of the wars on Iraq, Afghanistan and Yugoslavia, Imperial Crusades.

He can be reached at:

Free Market Madness

By Marie Cocco

WASHINGTON—With Labor Day approaching, it must not go unnoticed that Angelo Mozilo, chief executive of Countrywide Financial—the company that has helped drive world markets into turmoil with its lending—raked in $42.9 million last year. The Nobel laureate Harold Varmus, chief executive of the Memorial Sloan-Kettering Cancer Center, was paid $2.5 million.

Roughly speaking, here is what their relative compensation means: We now value the contributions of someone who has left homeowners frantic about whether they will be able to keep a roof over their heads about 18 times as much as we do those of a brilliant scientist whose groundbreaking research on the genetic basis for cancer could save millions of lives.

Yet what new mother, dreamily rocking her infant, wishes that her child one day will grow up to invent a convoluted mortgage instrument?

We’ve known for years that executive pay is obscenely out of whack with the earnings of today’s workers. The current ratio, according to public data analyzed by the Institute for Policy Studies, is that CEO pay among the chieftains of Fortune 500 companies is about 364 times the pay of an average worker. The data, drawn from an Associated Press survey of executive pay, do not reflect the latest Census Bureau finding that earnings of men and women who work full time dropped by about 1 percent last year. It’s the third consecutive year that earnings have dropped, the government says.

Here is another way to measure the madness: If you count only the value of “perks”—private jets used for personal travel, reimbursement of country club fees and commuting expenses, even company payment of taxes owed on bonus income—a minimum-wage earner would have to work for 36 years to earn the equivalent of what corporate chiefs averaged just in perks last year, according to the IPS, a liberal-leaning economic research group.

Whatever populist urge arises from these juxtapositions is lost, oddly, in what sometimes seems to be boredom with the truth. The level of inequality in our society is at a high point in contemporary American history, a new “Gilded Age” is upon us and, according to conventional thought, there just isn’t much to be done about it. The legislative fixes that from time to time arise—limiting egregious tax loopholes for hedge-fund managers, capping the amount that can be put away in increasingly robust, tax-deferred retirement accounts for top executives—are nip-and-tuck tactics. They won’t change the overall contour of a business culture run amok.

It is not only that American business executives are doing far, far better now than before when compared with their own workers. They’re doing far, far better than business leaders in Europe—the very executives against whom American CEOs say they must compete in the global economic market. In 2006, according to the IPS, the 20 highest-paid European managers made a combined average of $12.5 million. That’s about a third as much as the top 20 American managers.

And American business leaders are doing far, far better than American leaders in other professions. Scientists and doctors, university presidents and others who run large enterprises don’t come close to their compensation. Nor do U.S. military leaders now running two complex wars—they earn a tiny fraction of what the heads of major U.S. defense contractors take in.

“How do we deal with the bigger drift here?” asks Chuck Collins, senior scholar for the IPS. “We tilted the rules so that asset owners became winners over wage earners. We lifted up capital and betrayed work.”

There’s been a cultural shift of historic proportion. In the decades that followed the Great Depression and World War II, public policy was shaped to support creation of a mass middle class. Now, contemporary politics concentrates power in the hands of campaign donors. The public is fascinated with individual riches—even if they’re displayed in the debauchery of a Paris Hilton.

Yet it seems we have reached this unacceptable extreme less by design than by dereliction of some communal duty. Politics has played a role, beginning with the Reagan-era delusion of trickle-down economics. But so, too, has a failure of heart.

Even after the spectacular collapse of Enron, no fundamental change came about to prevent future corporate manipulations. Now we are in the midst of a mortgage meltdown.

Rebalancing portfolios is the recommended short-term palliative. Rebalancing our culture is the only long-term hope.

Marie Cocco’s e-mail address is mariecocco(at)

© 2007, Washington Post Writers Group

Wednesday, August 29, 2007

The Predicted Financial Storm Has Arrived

ZNet Commentary
By Gabriel Kolko

Contradictions now wrack the world's financial system, and a growing consensus exists between those who endorse it and those who argue the status quo is both crisis-prone as well as immoral. If we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, we are on the verge of a serious crisis-if not now, then in the near future.

The International Monetary Fund (IMF), the Bank for International Settlements, the British Financial Services Authority, the Financial Times, and innumerable mainstream commentators were increasingly worried and publicly warned against many of the financial innovations that have now imploded. Warren Buffett, whom Forbes ranks the second richest man in the world, last year called credit derivatives-only one of the many new banking inventions-"financial weapons of mass destruction." Very conservative institutions and people predicted the upheaval in global finances we are today experiencing.

The IMF has taken the lead in criticizing the new international financial structure, and over the past three years it has published numerous detailed reasons why it has become so dangerous to the world's economic stability. Events have confirmed its prognostication that complexity and lack of transparency, the obscurity of risks and universal uncertainty, especially regarding collateralized debt and loan obligations, will cause a flight to security that will dry up much of the liquidity of banking. "…Financial innovation itself," as a Financial Times columnist put it, "is the problem". The ultra-creative system is seizing up because no one understands where risks are located or how it works. It began to do so this summer and fixing it is not very likely.

It is impossible to measure the extent of the losses. The final results of this deluge have yet to be calculated. Even many of the players who have stakes in the countless arcane investment instruments are utterly ignorant. The sums are enormous.

Only a few of the many measures give us a rough estimate:

The present crisis began-it has scarcely ended there--with subprime mortgage loans in the U.S., which were valued at over $1.3 trillion at the beginning of 2007 but are, for practical purposes, worth far, far less today. We can ignore the impact of this crisis on U.S. housing prices, but some projections are of a 10 percent decline-another trillion or so. Indirectly, of course, the mortgage crisis has also brought many millions of people into the larger financial world and they will get badly hurt.

What the subprime market did was unleash a far greater maelstrom involving banks in Germany, France, Asia, and throughout the world, calling into question much of the world financial system as it has developed over the past decade.

Investment banks hold about $300 billion in private equity debts they planned to place-mainly in leveraged buy-outs. They will be forced to sell them at discounts or keep them on their balance sheets-either way they will lose.

The near-failure of the German Sachsen LB bank, which had to be saved from bankruptcy with 17.3 billion euros in credit, revealed that European banks hold over half-trillion dollars in so-called asset backed commercial paper, much of it in the U. S. and subprime mortgages. A failure in America caused Europe too to face a crisis. The problem is scarcely isolated.

The leading victim of this upheaval are the hedge funds. What are hedge funds? There are about 10,000 and, all told, they do everything. Some hedge funds, however, provided companies with capital and successfully competed with commercial banks because they took much greater risks. A substantial proportion is simple gamblers; some even bet on the weather--hunches. Many look to their computers and mathematics for models to guide their investments, and these have lost the most money, but funds based on other strategies also lost during August. The spectacular Long-term Capital Management 1998 failure was also due to its reliance on ingenious mathematical propositions, yet no one learned any lessons from it, proving that appeals to reason as well as experience fall on deaf ears if there is money to be made.

Some gained during the August crisis but more lost, and in the aggregate the hedge funds lost a great deal-their allure of rapid riches gone. There have been some spectacular bankruptcies and bailouts, including some of the biggest investment firms. Investors who got cold feet found that withdrawing money from hedge funds was nigh on impossible. The real worth of their holdings is hotly contested, and valuations vary wildly. In reality, there is no way to appraise them realistically-they all depend largely on what people want to believe and will take, or the market.

We are at an end of an era, living through the worst financial panic in many decades. Now begins global financial instability. It is impossible to speculate how long today's turmoil will last-but there now exists an uncertainty and lack of confidence that has been unparalleled since the 1930s-and this ignorance and fear is itself a crucial factor. The moment of reckoning for bankers and bosses has arrived. What is very clear is that losses are massive and the entire developed world is now experiencing the worst economic crisis since 1945, one in which troubles in one nation compound those in others.

All central banks are wracked by dilemmas. They have neither the resources nor the knowledge, including legal powers, to remedy the present maelstrom. Although there is clamor from financiers and assorted operators to bail them out, the Federal Reserve must also weigh the consequences of its moves, above all for inflation. Then there is the question of "moral hazards." Is the Federal Reserve's responsibility to save financial adventurers from their own follies? Throughout August the American and European central banks plunged about a half-trillion dollars into the banking system in an attempt to unfreeze blocked credit and loans that followed the subprime crisis-an event which triggered a "flight to safety" which greatly reduced banks' willingness to loan. In effect, the Federal Reserve relied on banks to restore confidence in the financial system, subsidizing their efforts.

Central banks' efforts succeeded only very partially but, in the aggregate, they failed: banks and investors now seek security rather than risk, and they will sit on their money. The Federal Reserve privately acknowledges its inability to cope with an inordinately complex financial structure. European central bankers are in exactly the same dilemma: they simply don't know what to do.

But this scarcely touches the real problem, which is structural and impinges wholly on the way the world financial structure has evolved over the past two decades. As in the past, there is a critical split in the banking and finance world and each has political leverage along with clashing interests. More important, central banks were not designed to cope with today's realities and have neither the legal powers nor knowledge to control them.

In this context, central banks will have increasing problems and the solutions they propose, as in the past, will be utterly inadequate, not because their intentions are wrong but because it is impossible to regulate such a vast, complex economy-even less today than in the past because there is no international mechanism to do so. Internationalization of finance has meant less regulation than ever, and regulation was scarcely very effective even at the national level.

Not only leftists are naïve but so too are those conservatives who think they can speak truth to power and change the course of events. Greed's only bounds are what makes money. Existing international institutions-of which the IMF is the most important--or well-intentioned advice will not change this reality.

Disney, via its televisual media conduit ABC, edits reality

Related and very inclusive article:

Wapo and Time help bury treatment of Kucinich

Saturday, August 25, 2007

Pocket Paradigms

Recent decades have been characterized by the invasive influence of an arrogant, autistic, and amoral class of late 20th century MBAs and similar members of the technocratic elite. This class junked sixty years of social democracy, helped wreck the Russian economy, made every American worker a temp-in-waiting, carpet bombed the English language, trashed every moral concept in their way, and twisted reality so effectively they even convinced many that they were sex objects.

And they are everywhere. You will find them running schools and universities and managing once great museums. They talk mush, think mush, market mush, report mush, and defend mush. They attempt to make up in certitude what they lack in wisdom; they can't tell the difference between a phrase and a product; and they create infantile and self-serving distortions of economic principles that they declare to be the only principles in life worth observing. They are, in the end, just so many more televangelists, but with themselves as God. Perhaps worst of all, they are without the capacity for shame. Like other sociopaths, they are remorseless.

The fraud, the huckster, the salesman are not new phenomena in America; what is new is that they now so strongly control every estate of our society. Those of a nature that would have once caused Americans to close the door, hang up, or say "no thank you," now teach our children, run our government, and tell us what to think. They are the Enron generation, filled with postmodern versions of Willy Loman: "He don't put a bolt to a nut, he don't tell you the law or give you medicine. He' s a man way out there in the blue, riding on a smile and a shoeshine."

America used to make things people wanted, said things that needed to be said, and fixed things, including itself, that needed fixing. Now it is out there in the blue, riding only on a smile and a shoeshine. The problem, as Willy Loman discovered, comes "when they start not smiling back - that's an earthquake. And then you get yourself a couple of spots on your hat, and you're finished." - Sam Smith

Thursday, August 23, 2007

Woody Guthrie to Judge Thayer: No Sweet Music

ZNet Commentary
By Cynthia Peters

Readers of ZNet know how the "system" works, but who among us has not wanted to take certain individuals by the shoulders and force them to face the consequences of their actions. When I was a kid, we used to have a dog that would occasionally relieve himself right in front of the TV set. To punish him, my mother used to force his nose to within millimeters of the offensive steaming heap. "Look what you've done," she would say. And there'd be no way to gloss over the fact of the situation. He had created a great big pile of shit.

Eighty years ago today, on August 23, 1927, Nicola Sacco and Bartolomeo Vanzetti were murdered by a corrupt legal system and a racist and xenophobic political culture. These two working men - Italian immigrants, World War I draft dodgers, anarchists - were accused of armed robbery and murder and sentenced to die by a court that needed a scapegoat more than it wanted justice. However, it was not only a faceless, nameless system that was responsible for denying appeals, ignoring testimony, and signing off on executions. There was a person behind the pen, and in the case of Sacco and Vanzetti, it was Judge Webster Thayer.

To honor the legacy of Sacco and Vanzetti on this, the eightieth anniversary of their death, I am reprinting a letter I came across in the liner notes of the Smithsonian Folkways "The Ballads of Sacco and Vanzetti." ( It is by Woody Guthrie, and it is addressed directly to Judge Thayer, and it is a most brilliant, poetic, poignant cry of "Look what you've done."

According to the liner notes, the letter was probably written in 1947, 14 years after Judge Thayer died. It is testimony not only to how deeply Guthrie felt the tragic loss of Sacco and Vanzetti, but how he understood the way that power dehumanizes the master as well. It is a raw, unedited soliloquy against those who choose a "tiptoeing life on rugs and carpets," who "escape through varnished doors," and who live in such a state of fear and mental shut-down that they are, in fact, "never alive."

To Bush and Cheney, then, and to the corporate executives and mercenaries, and to all the board-room-dwelling paper-pushers whose pens rob and kill as surely as any weapon or electric chair, put your nose in this:

"To Judge Thayer" by Woody Guthrie

I would like to paint you a picture with strokes of electricity, to make you see, Judge Thayer, the wrong thing that you done. It would take something faster than firesparks to send this picture around the world, but the blood of Sacco and Vanzetti did flow around the world, and the picture was in the minds of people before that hand of your button pusher could push your electric button and take his finger away again.

I say the blood flowed, but it was not the blood that ran, because you did not hang them, you did not shoot them, but you did torture them, you did insult and abuse them, you made comics and puppets out of them to dance and to dangle in front of your sad eye. You set their souls free with a spark of Massachusetts electricity because you were so unwise as to think that this would hold and silence their voices.

You killed Bartolomo [sic] Vanzetti, a poet and a fighter, and you killed Nicolo [sic] Sacco because he taught workers how to get together and talk about their work. The reason that you killed these two men was because you lost your spiritual connection with all men, and you did not believe that there was any such a thing as a spiritual connection between any men. You did not believe in the mental ability of the ordinary workingman and woman to stand together and to meet together, to speak their problems over in a free land together.

This is a rough way to try to tell you because you are used to nicer and politer ways, ways memorized out of books, ways learned in your college buildings, and in your schools. You have taken your hide and shelter in these halls of learning for a long time, but I would not call you a man that has learned anything. You fell onto the patter of action that you used over and over till you wore your mind out, and then you thought that this same calamity had happened to everybody else. You lived a quiet life, a tiptoeing life on rugs and carpets. You found some kind of dark world there in your caverns with your stalagmites and you wanted to hang on to whatever little nervous nightmare that you were having. You did not want to be kicked out, nor relieved, nor have somebody else take your bench and judge people from it. You wanted to keep on stepping down your back stairways, through your varnished doors, yes. You certainly did not want any wild gang of illiterate workers busting into your court room nor into your house and telling you that you had lost your job. You somehow got scared, then to make out like you were not scared, you walked all around and shouted that you were not scared. (People knew that you were because you yelled that you were not.)

You got afraid of people all around you. You really felt afraid of every person that came close to you. You did not always say this out loud, but you know very well that you felt this way every hour of every day. You felt it even worse after dark. You did not even tell your wife nor your closest friends how scared you were. You were not only afraid of people, but the tides and the seasons scared you and you came to be afraid of the weather. Your seasons were things of locks and keys and your sleep was a wild running nightmare, but you used all kinds of tricks to make your face look like it was not afraid of the people. You feared the working people. You feared the business people. You feared the idle classes and you feared the racketeers. The world was a puddle of manure and mud and all of the faith on this planet could not change human nature's greed.

I don't know tonight as I write this whether you are alive or dead. It had been a long time since you pulled the electric trigger on Sacco and Vanzetti, but it could be that you are still dwelling in your same body. I had rather be dead than to be a man of your cut and caliber. It would be wrong for me to wonder if you are living or dead because it is truer to say that you never was alive. I mean warm alive like most of all my loud and noisy neighbors around me here in Coney Island.

If your spirit is out of your carcass, I certainly would not blame it, for if I was a spirit I would not dwell for long in any such a body as you own. If I was a body I would not live with any such a spirit as yours. If I was a mind I would not play any sweet music inside your brain, and if I was a soul I would not bring any very big visions into your heart. If I was the Creator I would undo you and if I was the Maker I would unmake you and take the clay and try again. I cannot curse your soul too much because you may be remolded into a union organizer. I cannot curse your clay too much because you will fertilize some nice corn and grain and drift out across some dandy pasture lands where horses nicker and the cattle graze.

You did not wish for Sacco nor Vanzetti neither one to dwell on our planet here, and so you schemed and you figured out a way to take them away. If you had been a true man wise or unwise you would have never let your drunkest and scaredest nightmare cause you to do such a deed. You would have known that you would wake up ten million souls around the world to fight to enter into their union. You would have known that you were not only kicking your own pants off of the judging bench, but several hundred thousand judges and shysters of your stripe and breed. You would have known this if your mind had not been so completely blind. I cannot rile myself too much to curse you because I am not too much of a curser, and I know that you did, in one way, wake the workers of the world up, but you did it in the craziest, greediest and most terrible way that you could. You called our attention to the fact that if it was geniuses of your level who own and rule our world and make its laws, judge us good and bad, to be alive or to be dead, then, well, this was the one thing that put us on the move and tore your world down faster than ten grenades would have.

You are a big judge. You may be living and you may be dying. You may already be dead. No matter what your natural estate (sp????????) may be, I realize that I must speak to you polite and nice even if I hate your royal guts. And so this (is/?????????) why tonight I hold my criticism down to just the one single planet called the earth. If I was to let my words fly at you like I really feel I ought to. I would chase you up one universe and down the next, up one glacial age and down the next, up one history book and down the other, over several icebergs and out through several jungles. I would rail you and scale you, jail you and bail you, I would mail you and nail you and assail you and frail you. I would run you ragged and craosseyed, cockeyed and whopperjawed. I would not let one drop of your blood rest easy nor one cell of your brain miss my trimming. I think of your old age and your natural condition of a tablet of salt, and I will not try to take your coyote heart out of you because in all of your horror and terror you have ignorantly defeated your own self and your own class. You have done the only earthly thing that could undo your entire class, and it might well be that you were created just to perform this one act and then no more. Oh, I know that you performed a lot of other lesser and smaller acts, but they just broke the ground for the deed that you did to Sacco and Vanzetti.

For more information about the Sacco and Vanzetti case, see ZNet's excerpt of Howard Zinn's book A Power Governments Cannot Suppress ( and an interview with him by Sonali Kolhatkar and Gabriel San Roman (

Toxic Toys, Deadly Dog Food and Other Wonders of "Free Trade"

By Todd Tucker, Eyes on Trade
Posted on August 21, 2007

The Times had this gem this morning:

Separately, laboratory tests have found that some Chinese-made vinyl baby bibs sold at Toys "R" Us stores appear to be contaminated with lead.
Industry analysts said Mattel's woes are part of a much larger problem.
"If I went down the shelves of Wal-Mart and tested everything, I'm going to find serious problems," said Sean McGowan, managing director and the toy analyst at Wedbush Morgan Securities. "The idea that Mattel -- with its high standards -- has a bigger problem than everybody else is laughable. If we don't see an increase of recalls in this industry, then it's a case of denial."
Even Mattel executives said repeatedlyyesterday that the company may have more recalls.
"No system is perfect," Robert A. Eckert, Mattel's chairman and chief executive, said in a conference call. "There's no guarantee that we will not be here again."

Wow. Before yesterday, these mega corporations were saying, oh, it's just a few bad apples caught up in the supply chain. (Kinda like Enron… remember that?) Now, we have the mega-corps admitting that - no, actually it's part of the design of the system.

System?! You mean it's not just a few bad apples? How could such a "system" have ever been devised? Did anyone ever vote on this "system", because I can't imagine it would be popular among anyone that, well, eats or consumes. Oh, that's right - thanks Billy, Joey, Chrissy, Johnny, Sammy, Freddy, and Johnny, also known as the boy band of former and perhaps future presidents. (They unfortunately lack many of the redeeming qualities of those other boyz' bands.)

For an excellent read into what a stupid (in the dictionary definition of the term) SYSTEM we have now, please check out Barry Lynn's piece in Harpers on the madness of mega-corporations' unregulated, global sourcing strategies.

Look closely at today's global production system and you will see shockingly high degrees of specialization, in terms of both geography and ownership. More and more activities take place in only one or a few places on earth, and within one or a few companies. This is especially true in electronics: Taiwan produces more than half of the world's vital customized chips. But it is also ever more true of heavy industries, like automobile manufacturing, even of agriculture and food processing. One of the crowning conceptions of the Enlightenment has been achieved, yet economists appear entirely unwilling to recognize the fact, let alone begin the task of examining how this revolutionary event might alter the purposes and pathways of their work.

At the other side of the Times (the ed board), they don't like to think about that, saying that we shouldn't change the way we look at supply systems or trade policy, but rather we should have Mattel police itself and the U.S. government play global cop, flying around the world to inspect hundreds of thousands of factories. No doubt about it: I agree with the Times and 99.999999% of the civilized, non-libertarian world that the FDA needs more resources. But as we've shown, having trade agreements that prioritize safety over a race to the bottom is a far more efficient way of pursuing the same end.

How many more pets have to die or consumers get sick before we accept that states and social institutions have a legitimate role to play alongside the market?? These other institutions at least have the virtue of predating the market, as Karl Polanyi pointed out decades ago:

No society could, naturally, live for any length of time unless it possessed an economy of

some sort; but previously to our time no economy has ever existed that, even in principle, was controlled by markets. In spite of the chorus of academic incantations so persistent in the nineteenth century, gain and profit made on exchange never before played an important part in human economy. Though the institution of the market was fairly common since the later Stone Age, its role was no more than incidental to economic life.

Not that I want the Stone Age, mind you, but we also don't have to feel bashful about using state power to protect people. As Polanyi's book shows, state and social regulations were the only thing that made the emergence of the modern market even thinkable. Anyone wanting a sustainable globalization is going to have to make sure that states have the flexibility to be able to guide the process. First stop for that kind of alter-globalization - shrink or sink the WTO.

© 2007 Independent Media Institute. All rights reserved.
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Smashing Capitalism!

By Barbara Ehrenreich,
Posted on August 22, 2007

Somewhere in the Hamptons a high-roller is cursing his cleaning lady and shaking his fists at the lawn guys. The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system. Incredibly enough, this may be the first case in history in which the downtrodden manage to bring down an unfair economic system without going to the trouble of a revolution.

First they stopped paying their mortgages, a move in which they were joined by many financially stretched middle class folks, though the poor definitely led the way. All right, these were trick mortgages, many of them designed to be unaffordable within two years of signing the contract. There were "NINJA" loans, for example, awarded to people with "no income, no job or assets." Conservative columnist Niall Fergusen laments the low levels of "economic literacy" that allowed people to be exploited by sub-prime loans. Why didn't these low-income folks get lawyers to go over the fine print? And don't they have personal financial advisors anyway?

Then, in a diabolically clever move, the poor - a category which now roughly coincides with the working class -- stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that "it's no secret that many customers are running out of money at the end of the month."

I wish I could report that the current attack on capitalism represents a deliberate strategy on the part of the poor, that there have been secret meetings in break rooms and parking lots around the country, where cell leaders issued instructions like, "You, Vinny -- don't make any mortgage payment this month. And Caroline, forget that back-to-school shopping, OK?" But all the evidence suggests that the current crisis is something the high-rollers brought down on themselves.

When, for example, the largest private employer in America, which is Wal-Mart, starts experiencing a shortage of customers, it needs to take a long, hard look in the mirror. About a century ago, Henry Ford realized that his company would only prosper if his own workers earned enough to buy Fords. Wal-Mart, on the other hand, never seemed to figure out that its cruelly low wages would eventually curtail its own growth, even at the company's famously discounted prices.

The sad truth is that people earning Wal-Mart-level wages tend to favor the fashions available at the Salvation Army. Nor do they have much use for Wal-Mart's other departments, such as Electronics, Lawn and Garden, and Pharmacy.

It gets worse though. While with one hand the high-rollers, H. Lee Scott among them, squeezed the American worker's wages, the other hand was reaching out with the tempting offer of credit. In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you'll never earn that much, but, as the lenders were saying -- heh, heh -- do we have a mortgage for you!

Pay day loans, rent-to-buy furniture and exorbitant credit card interest rates for the poor were just the beginning. In its May 21st cover story on "The Poverty Business," BusinessWeek documented the stampede, in the just the last few years, to lend money to the people who could least afford to pay the interest: Buy your dream home! Refinance your house! Take on a car loan even if your credit rating sucks! Financiamos a Todos! Somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were being offered.

Personally, I prefer my revolutions to be a little more pro-active. There should be marches and rallies, banners and sit-ins, possibly a nice color theme like red or orange. Certainly, there should be a vision of what you intend to replace the bad old system with -- European-style social democracy, Latin American-style socialism, or how about just American capitalism with some regulation thrown in?

Global capitalism will survive the current credit crisis; already, the government has rushed in to soothe the feverish markets. But in the long term, a system that depends on extracting every last cent from the poor cannot hope for a healthy prognosis. Who would have thought that foreclosures in Stockton and Cleveland would roil the markets of London and Shanghai? The poor have risen up and spoken; only it sounds less like a shout of protest than a low, strangled, cry of pain.

Barbara Ehrenreich is the author of thirteen books, including the New York Times bestseller Nickel and Dimed. A frequent contributor to the New York Times, Harpers, and the Progressive, she is a contributing writer to Time magazine. She lives in Florida.

© 2007 Independent Media Institute. All rights reserved.
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Debt Crisis: No Bail-Outs for Loansharks

By Paul Krugman, The New York Times
Posted on August 19, 2007

In April, Henry Paulson, the Treasury secretary, declared that all the signs he saw indicated that the housing market was "at or near the bottom." Earlier this month he was still insisting that problems caused by the meltdown in the market for subprime mortgages were "largely contained."

But the time for denial is past.

According to data released yesterday, both housing starts and applications for building permits have fallen to their lowest levels in a decade, showing that home construction is still in free fall. And if historical relationships are any guide, home prices are still way too high. The housing slump will probably be with us for years, not months.

Meanwhile, it's becoming clear that the mortgage problem is anything but contained. For one thing, it's not confined to subprime mortgages, which are loans to people who don't satisfy the standard financial criteria. There are also growing problems in so-called Alt-A mortgages (don't ask), which are another 20 percent of the mortgage market. Problems are starting to appear in prime loans, too - all of which is what you would expect given the depth of the housing slump.

Many on Wall Street are clamoring for a bailout - for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust - it would be saving bad actors from the consequences of their misdeeds.

For it is becoming increasingly clear that the real-estate bubble of recent years, like the stock bubble of the late 1990s, both caused and was fed by widespread malfeasance. Rating agencies like Moody's Investors Service, which get paid a lot of money for rating mortgage-backed securities, seem to have played a similar role to that played by complaisant accountants in the corporate scandals of a few years ago. In the '90s, accountants certified dubious earning statements; in this decade, rating agencies declared dubious mortgage-backed securities to be highest-quality, AAA assets.

Yet our desire to avoid letting bad actors off the hook shouldn't prevent us from doing the right thing, both morally and in economic terms, for borrowers who were victims of the bubble.

Most of the proposals I've seen for dealing with the problems of subprime borrowers are of the locking-the-barn-door-after-the-horse-is-gone variety: they would curb abusive lending practices - which would have been very useful three years ago - but they wouldn't help much now. What we need at this point is a policy to deal with the consequences of the housing bust.

Consider a borrower who can't meet his or her mortgage payments and is facing foreclosure. In the past, as Gretchen Morgenson recently pointed out in The Times, the bank that made the loan would often have been willing to offer a workout, modifying the loan's terms to make it affordable, because what the borrower was able to pay would be worth more to the bank than its incurring the costs of foreclosure and trying to resell the home. That would have been especially likely in the face of a depressed housing market.

Today, however, the mortgage broker who made the loan is usually, as Ms. Morgenson says, "the first link in a financial merry-go-round." The mortgage was bundled with others and sold to investment banks, who in turn sliced and diced the claims to produce artificial assets that Moody's or Standard & Poor's were willing to classify as AAA. And the result is that there's nobody to deal with.

This looks to me like a clear case for government intervention: there's a serious market failure, and fixing that failure could greatly help thousands, maybe hundreds of thousands, of Americans. The federal government shouldn't be providing bailouts, but it should be helping to arrange workouts.

And we've done this sort of thing before - for third-world countries, not for U.S. citizens. The Latin American debt crisis of the 1980s was brought to an end by so-called Brady deals, in which creditors were corralled into reducing the countries' debt burdens to manageable levels. Both the debtors, who escaped the shadow of default, and the creditors, who got most of their money, benefited.

The mechanics of a domestic version would need a lot of work, from lawyers as well as financial experts. My guess is that it would involve federal agencies buying mortgages - not the securities conjured up from these mortgages, but the original loans - at a steep discount, then renegotiating the terms. But I'm happy to listen to better ideas.

The point, however, is that doing nothing isn't the only alternative to letting the parties who got us into this mess off the hook. Say no to bailouts - but let's help borrowers work things out.

© 2007 Independent Media Institute. All rights reserved.
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Faux liberal NPR shows true colors

Action Alert

NPR Touts Pro-Nuke 'Environmentalists'
Network's own nuclear links undisclosed


An August 15 NPR Morning Edition segment touted the benefits of nuclear power, suggesting it was gaining popularity with many environmentalists who once opposed it.

The segment was an interview with Fortune magazine editor David Whitford, who has written a series of articles about the debate over nuclear power. The piece was introduced by NPR anchor John Ydstie, who asserted that "with fossil fuel carbon emissions in the environmental bull's-eye, nuclear power is starting to shake off its bad reputation." Whitford elaborated on the claim that nuclear power's image is improving: "There are many environmentalists now who began their careers opposed to nuclear power who are now reconsidering nuclear power in the face of global warming."

But Whitford cited just one such environmentalist, Stewart Brand, describing him simply as the creator of the 60s and 70's publication, the Whole Earth Catalogue, and calling him "sort of the original off-the-grid environmentalist." In fact, Brand is currently a businessman, a co-founder and leader of the corporate consulting group Global Business Network (GBN). GBN numbers, among the 192 clients named on its website, more than a dozen corporations and governmental agencies involved in the production or promotion of nuclear energy: General Electric, Bechtel, Duke Power, Siemens-Westinghouse, Fluor, Electric Power Research Institute, Pacific Gas & Electric, Southern California Edison, �lectricit� de France, Iberdrola, Vattenfall, Sydkraft (now E.ON Sweden) and Sandia National Labratories. Some of these, including GE, Bechtel, Duke Power and Westinghouse, are receiving government subsidies to develop the next generation of nuclear power plants, according to a Department of Energy report. Brand's financial links with the industry went unmentioned in the NPR segment.

Brand is one of a small number of former nuclear critics who have become prominent nuclear advocates (Alternet, 03/16/07). But it is a stretch to suggest, as Whitford does, that a handful of former nuclear foes with no current ties to leading environmental groups--and often with financial links to the nuclear industry--constitute "some division within the movement."

In fact, leading environmental groups including Greenpeace, the Sierra Club, the Natural Resources Defense Council all agree that nuclear power, with its huge safety, security and cost issues, is not the solution to climate change. A 2005 letter released by Public Citizen and signed by nearly 300 groups opposed congressional subsidies for the nuclear industry:

As national and local environmental, consumer and safe energy organizations, we have serious and substantive concerns about nuclear energy. While we are committed to tackling the challenge of global warming, we flatly reject the argument that increased investment in nuclear capacity is an acceptable or necessary solution.

Instead of a story about a growing fervor for nuclear power among some environmentalists, the story is really one about a growing fervor to resurrect nuclear power among corporate and political elites, aided by a handful of mainly environmentalists-for-hire.

This kind of one-sided coverage is characteristic of NPR's recent reporting on the nuclear industry. In the six stories NPR has broadcast over the past 90 days about the future of nuclear power production in the U.S., NPR's sources included only three opponents of nuclear power plants, versus eights sources touting the safety, environmental friendliness and financial benefits of nuclear energy. Moreover, only one of the three opponents was an expert on the topic, while NPR cast seven of the eight sources speaking in favor of nuclear power as authorities. This period saw an accident at the largest power plant in the world - in Japan (NPR's All Things Considered, 7/19/07) - which was the subject of three additional NPR stories. Yet, even in this coverage of the accident, no experts critical of nuclear power were cited.

One factor that is relevant to NPR's cheerleading for nuclear power is its own financial links to the industry. According to NPR's website, between 1993 and 2005, the public radio service received between $250,000 and $500,000 from Constellation Energy, which belongs to Nustart Energy, a 10-company consortium pushing for new nuclear power plant construction. During the same period, another nuclear operator, Sempra Energy, donated between $50,000 and $100,000 to NPR. This potential conflict of interest was not disclosed in the August 15 segment, or in any other of NPR's recent largely industry-friendly reports. (NPR has in the past insisted that the corporate "underwriting" money it receives has no bearing on its coverage--a defense that would seem to undercut the rationale for NPR's existence as a noncommercial broadcaster.)

In his interview with Whitford, NPR's Ydstie asked the Fortune editor, "What are the forces that are aligning that make the industry optimistic that there's going to be a revival?" Whitford didn't mention one-sided reporting that fails to disclose its financial ties to the industry as factors that help the industry "shake off its bad reputation" and clear the ground for a nuclear revival.

ACTION: Please contact NPR to suggest that future reports on nuclear power include the consensus view of the environmental movement, and that such reports disclose NPR's financial ties to the industry.

CONTACT: Assistant to the Ombudsman, Chantal de la Rionda, through NPR's website: