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Tuesday, May 28, 2013

The Silent Death of the American Left

Weekend Edition May 24-26, 2013   
Generation Leftover

The Silent Death of the American Left

Is there a Left in America today?

There is, of course, a Left ideology, a Left of the mind, a Left of theory and critique. But is there a Left movement?

Does the Left exist as an oppositional political, cultural or economic force? Is anyone intimidated or restrained by the Left? Is there a counterforce to the grinding machinery neoliberal capitalism and its political managers?

We can and do at CounterPunch and in similar publications, such as Monthly Review and the New Left Review, publish analyses of capitalism and its inherent vulnerabilities, catalogue its predations and wars of military conquest and imperial exploitation. But where is our capacity to confront the daily horrors of drone strikes, kill lists, mass layoffs, pension raids and the looming nightmare of climate change?

It is a bitter reality, brought into vivid focus by five years of Obama, that the Left is an immobilized and politically impotent force at the very moment when the economic inequalities engineered by our overlords at Goldman Sachs who manage the global economy, should have recharged a long-moribund resistance movement back to life.

Instead the Left seems powerless to coalesce, to translate critique into practice, to mobilize against wars, to resist incursions against basic civil liberties, powerless to confront rule by the bondholders and hedgefunders, unable to meaningfully obstruct the cutting edge of a parasitical economic system that glorifies greed while preying on the weakest and most destitute, and incapable of confronting the true legacy of the man they put their trust in.
This is the politics of exhaustion. We have become a generation of leftovers. We have reached a moment of historical failure that would make even Nietzsche shudder.

We stand on the margins, political exiles in our own country, in a kind of mute darkness, a political occlusion, increasingly obsessed, as the radical art historian Tim Clark put it a few years ago in a disturbing essay in New Left Review, with the tragedy of our own defeat.

Consider this. Two-thirds of the American electorate oppose the ongoing war in Afghanistan. An equal amount objected to intervention in Libya. Even more recoil at the grim prospect of entering the Syrian theater.

Yet there is no antiwar movement to translate that seething disillusionment into action. There are no mass demonstrations. No systematic efforts to obstruct military recruiting. No nationwide strikes. No campus walkouts. No serious divestment campaigns against companies involved in drone technology.

Similar popular disgust is evident regarding the imposition of stern austerity measures during a prolonged and enervating recession. But once again this smoldering outrage has no political outlet in the current political climate, where both parties have fully embraced the savage bottom line math of neoliberalism.
Homelessness, rampant across America, is a verboten topic, unmentioned in the press, absent from political discourse. Hunger, a deepening crisis in rural and urban America, is a taboo subject, something left to religious pray-to-eat charities or the fickle whims of corporate write-offs.

What do they offer us, instead? Pious homilies about the work ethic, the sanctity of the family unit, the self-correcting laxative of market forces.

The economic immiseration of black America, brutal and unrelenting, is simply elided, erased from the political dialogue, even at jam sessions of the Congressional Black Caucus. Instead, whenever


Obama mentions the plight of black Americans (about once every two years by my count), as he did in his patronizing commencement addresses this spring, it is to chide blacks about cleaning up their acts, admonishing them to stop complaining about their circumstances and work harder at adopting the flight plan of white corporate culture.

The self-evident need for large-scale public works projects to green the economy and put people to work goes unmentioned, while the press and the politicians engage in a faux debate over the minutia of sequestration and sharpen each others knives to begin slashing Social Security and Medicare. Where’s the collective outrage? Where are the marches on the Capitol? The sit-ins in congressional offices?

A few weeks ago I wrote an essay on the Obama administration’s infamous memo justifying drone strikes inside countries like Pakistan and Yemen that the US is not officially at war against. In one revealing paragraph, a Justice Department lawyer cited Richard Nixon’s illegal bombing of Cambodia during the Vietnam War as a precedent for Obama’s killer drone strikes. Let’s recall that the bombing of Cambodia prompted several high-ranking officials in the Nixon cabinet to resign, including CounterPunch writer Roger Morris. It also sparked the student uprising at Kent State, which lead the Ohio Governor Jim Rhodes to declare a state of emergency, ordering the National Guard to rush the campus. The Guard troops promptly began firing at the protesters, killing four and wounding nine. The war had come home.

Where are those protests today?

The environment is unraveling, thread by thread, right before our eyes. Each day brings more dire news. Amphibians are in stark decline across North America. Storms of unimaginable ferocity are strafing the Great Plains week after week. The Arctic will soon be ice-free. The water table is plummeting in the world’s greatest aquifer. The air is carcinogenic in dozens of California cities. The spotted owl is still going extinct. Wolves are beginning gunned down by the hundreds across the Rocky Mountains. Bees, the great pollinators, are disappearing coast-to-coast, wiped out by chemical agriculture. Hurricane season now lasts from May to December. And about all the environmental movement can offer in resistance are a few designer protests against a pipeline which is already a fait accompli.

Our politics has gone sociopathic and liberals in America have been pliant to every abuse, marinated in the toxic silt of Obama’s mordant rhetoric. They eagerly swallow every placebo policy Obama serves them, dutifully defending every incursion against fundamental rights. And each betrayal only serves to make his adoring retinue crave his smile; his occasional glance and nod all the more urgently. Still others on the dogmatic Left circle endlessly, like characters consigned to their eternal roles by Dante, in the ideological cul-de-sac of identity politics.

How much will we stomach before rising up? A fabricated war, a looted economy, a scalded atmosphere, a despoiled gulf, the loss of habeas corpus, the assassination of American citizens…

One looks in vain across this vast landscape of despair for even the dimmest flickers of real rebellion and popular mutiny, as if surveying a nation of somnambulists.

We remain strangely impassive in the face of our own extinction.

Jeffrey St. Clair is the editor of CounterPunch. His most recent book (with Joshua Frank) is Hopeless: Barack Obama and the Politics of Illusion (AK Press).
This is a condensed version of a talk delivered at the University of Oregon.

Congress Still Puts Out for Wall Street

What does it take to make a Wall Street banker squirm with shame? Not content with having swindled tens of millions of Americans out of their homes and life savings, the very bankers who caused the biggest economic catastrophe since the Great Depression are now subverting government regulations designed to prevent comparable disasters in the future.

(Image: AP)

Top of the list of those responsible are the hustlers at Citigroup, once the world’s largest financial conglomerate, and a leading practitioner of the sordid behavior that caused the housing meltdown. Indeed, Citigroup was allowed to form as a merger of the investment banking of Travelers and the federal insured commercial banking of Citicorp only because lobbyists for those institutions successfully engineered the reversal of the Depression-era Glass-Steagall law that had banned such combinations.

Then when the new monster banks moved to exploit the subprime housing market with all sorts of financial gimmicks, their lobbyists succeeded in freeing all such trading in so called derivatives from any significant regulation.
The banks were so successful in marketing those often toxic assets that the federal government had to step in when the bubble burst and save Citigroup from bankruptcy, with a direct infusion of $45 billion in taxpayer funds and a guarantee of more than $300 billion of Citigroup’s bad paper.

You would think that the consequence of such destructive behavior would be a profound erosion of the ability of Citigroup and other banking lobbyists to write the nation’s laws governing financial activity. But just the opposite has occurred as the company’s influence has only grown in direct proportion to the harm it has bestowed. As The New York Times reported last week:

“Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.
“One bill that sailed through the House Financial Services Committee this month—over the objections of the Treasury Department—was essentially Citigroup’s, according to emails reviewed by the New York Times.

“In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word.”

Of course they were faithfully copied by the staffs of Congress members from both political parties, who might as well be on the payroll of Citigroup and the other mega banks. The Republicans, with the exception of a few die-hard libertarians, always do the bidding of the banks that finance them, but the Democrats are just as eager to pig out at the bankers’ trough. Wall Street lobbyists were only too happy to hold a fundraising dinner last week for Democratic Rep. Sean Patrick Maloney of New York, who co-sponsored the Citigroup bill, one of several such events banking groups have organized for lawmakers who support their legislation.

What is at issue here is an attempt to gut the already tepid effort of the Dodd-Frank Act to control the runaway $700 trillion derivatives trading market. One source of alarm is the extensive in-house trading in these derivatives between affiliates of the too-big-to-fail banks. As an example of the profound corruption of our legislative process, congressional staffers turned to top corporate lawyers to draft the wording pretending to rein in their activity.
For example, as the emails reviewed by the Times revealed, House committee staffers consulted Michael Bopp, a partner at the elite law firm Gibson, Dunn who represents corporations involved in derivative trading, as to the verbiage he would prefer in the legislation. His language was well received, as the Times reported: “Ultimately, the committee inserted every word of Mr. Bopp’s suggestion into a 2012 version of the bill that passed the House, save for a slight change in phrasing.”

That last sentence, conveying the essence of America’s crony capitalist system, should stand as the defining epitaph for the death of representative democracy.
“I won’t dispute for one second the problems of a system that demands immense amount of fund-raisers by its legislators,” Jim Himes, a Democrat from Connecticut who supported the bankers’ recent bills and conveniently heads fundraising for House Democrats, conceded to the Times. Himes, who worked for Goldman Sachs before pretending to represent the people’s interest as an elected representative, is one of the top beneficiaries of Wall Street payoffs but claims to be distressed by the corruption that is his way of life. As he told the Times, “It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.”
No, buddy, it’s the world you guys make and wallow in. Other folks just lose their jobs and homes while you manage to slither out of the slime richer and more powerful than ever.

Robert Scheer
Robert Scheer is editor of Truthdig.com and a regular columnist for The San Francisco Chronicle.

TheTrans-PacificPartnership: What“FreeTrade”ActuallyMeans



Mon, 11/26/2012 - by Andrew Gavin Marshall

To discuss “free trade agreements” or the “free market,” we must first identify the theoretical versus the functional definitions of these terms – because theoretical definitions look at what those terms should mean, whereas functional definitions look at what the terms mean actually.

The theoretical definition of a “free market” is one in which every individual actor in the realm of exchange exists in a state of equality of opportunity; where all compete with one another to produce the best products at the cheapest prices for consumers, thus the most innovative and efficient producers succeed while others fail, unregulated - and unhelped - by the state. Within “free markets,” what we call “free trade agreements” are meant to reduce barriers such as tariffs, subsidies and regulations so that market "competitors" can freely move products and goods across borders and compete in an ever-expanding global “free market."

The functional, or technical, definition of a “free market” is one in which the state regulates the market – the realm of economic exchange and activity – for the benefit of large transnational corporations and banks.

Barriers to profits, such as environmental, labor, safety and financial regulations, are dismantled. Meanwhile, subsidies and legal rights and protections are granted to major corporations, undermining competition and supporting monopolization. So while the rhetoric of “free markets” tends to be all about reducing state interference in the economy, in actuality state interference increases - but only for the benefit of large corporations and banks.
At the same time, state “interference” decreases in sectors that benefit the actual population, such as welfare, social services, pensions, healthcare, education, labor protections and so on. In the actual "free market," these protections are dismantled, subjecting populations to “market discipline” quite unlike the large corporations and banks that receive direct protection against “market discipline.” The most obvious example of this is the post-2008 bank bailouts.
In a theoretical “free market,” all the banks that gambled badly would have failed and collapsed. But with the functional “free market” we have today, the banks went to the state and got bailed out with trillions of dollars of taxpayer money.

The same dichotomy exists for the term “free trade agreement,” which in theory is the opposite of “protectionism,” where states intervene in the market by establishing tariffs, regulations, subsidies and protections for various imports and exports, thus undermining the “free market.”

The technical definition, however, is one in which protectionism is rampant, with enormous subsidies and protective barriers, and very often includes thousands of pages of regulations and provisions. But because all of this is done to protect corporate and financial interests, it is called “free trade.” It is “protectionism” if the barriers, regulations and protections benefit the nation or population and prevent transnational corporations and banks from having unhindered access to the “market”?

Likewise, is it “free trade” if the barriers, regulations, and protections benefit corporations and banks at the expense of the nation and population? In actuality, so-called “free trade” is a drain on the economy, creates enormous national debts, undermines labor, creates poverty and exploitation, wastes natural resources and devastates the environment. However, it is very profitable for banks and corporations, so is endlessly repeated as something “good” and “necessary.”

In theory, “free trade” would enhance competition because it would allow all parties to compete on an even playing field internationally, thus companies would have to find ways to lower their costs of production while increasing their product standards, ultimately decreasing the final price to consumers. In this theoretical form of "free trade," the best and cheapest product, the company that made it, and the consumer and society as a whole would all benefit.

The reality is the exact opposite: the production cycle is broken up (this is commonly called “offshoring”), which increases the use of transportation, resources and the overall cost of production, making the final product more expensive to consumers. Case in point is the North American Free Trade Agreement (NAFTA), where competition between corporations is undermined while access to resources and markets is enhanced, subsidized and protected.

Corporate cooperation with each other and the state is enhanced while the poor, working and middle classes of Canada, the United States and Mexico are put in direct competition with each other. Corporations in Canada and the U.S. close their factories and move them to Mexico where labor is cheaper, increasing unemployment and poverty, destroying unions and labor protections, and forcing down wages while costs and corporate profits increase.

The role of the state is to regulate these markets and agreements for the benefit of the corporations and banks, and to force the populations to compete with each other in a race to the bottom: market monopolization for the elite, and market discipline for the population.

The break-up of the production cycle, especially from the late 1980s onward, has redefined what “trade” actually is. Typically, we think of trade as a system where countries export and import products or goods. With the era of “free trade,” the production cycle was no longer confined within national borders, and was broken up between several countries.

The result was that a large percentage of what we call “trade” is actually one corporation moving parts or goods to a subsidiary or another corporation in a different country, to continue the production cycle until it returns to the home country as a finished product for consumption.

This is referred to as “intra-industry trade” (transporting parts or goods between corporations) or “intra-firm trade” (transporting parts or goods between a corporation and its subsidiaries). When the parts move across borders, often several times before the final product is created, customs agents at borders register the cumulative value of those products as a “traded” good, and these numbers are then used to determine the “actual contribution” of that good to the economy.

For example, a product which has parts manufactured in Canada, assembled in Mexico, and sold in the United States, would have to cross borders several times before it becomes a final product. Each time the parts cross a border, the total value of those parts at that time of transport gets registered as an import/export, instead of differentiating between the value added at each part of the production cycle. Thus, the statistics of exports and imports become heavily skewed and inflated since they do not account for “value-added.” While the production cycle is broken up over several countries, the determination of “value” is not broken up to fit the actual trading system as it exists.

For a hypothetical comparison to reveal how absurd this process is, imagine a country that attempts to measure the total education of its population by including in its statistics the degrees and credentials of all the tourists who entered the country for short periods of time. The recorded education level of the country’s population would be enormously inflated, since the educated tourists entering the nation would not be staying and contributing their education to the benefit of the society. Something similar happens when parts move across borders several times before they become a finished product, yet have their total value registered each time they cross a border.

According to a report from a Canadian think tank, the Conference Board of Canada, if countries were to apply a “value-added” measurement of trade instead of using inflated numbers applied to the cumulative value of a good, the actual contribution of trade to a country would rapidly diminish. In conventional measurements, trade accounts for 35% of Canada’s economy, but with the value-added measurement, it drops to 24%. These manipulations are important because they serve as a basis for claiming that countries like Canada are “trade dependent” nations, which justify implementing more “free trade” agreements.
When a country imports more than it exports, it builds up a large amount of debt called a trade deficit. When a country exports more than it imports, it establishes a trade surplus. However, because the process of determining the value of imports and exports is enormously inflated and misleading, countries are saddled with inflated and inaccurate debts. They are then pressured into reducing those debts through austerity measures, which punish those countries' populations into poverty.

Apple is a great example of this process, often hailed as one of the great corporate success stories, being enormously profitable and therefore “good for the economy.” As the Asian Development Bank Institute in Tokyo reported in 2010, while Apple is a U.S.-based company, the iPhone is itself considered to be a Chinese export to the U.S. The iPhone is produced in many different pieces and parts through several Asian and European countries, which are then transported to China where they are assembled and shipped to the United States and elsewhere.

The estimated value of the Chinese laborers in assembling the iPhone was 3.6% (or $6.50) of the total value of the finished product, estimated at $178.96 in 2009. Yet, the wholesale cost of the shipped iPhone is credited to China as an export. China was merely the last stop in the production cycle, but China records the total value of the finished product as an export, while the United States records it as an import. Thus, the researchers at the Asian Development Bank Institute concluded that “even high-tech products invented by U.S. companies will not increase U.S. exports.”

Pascal Lamy, director-general of the World Trade Organization (WTO), commented, “What we call ‘Made in China’ is indeed assembled in China, but what makes up the commercial value of the product comes from the numerous countries... The concept of country of origin for manufactured goods has gradually become obsolete.”

If trade statistics were adjusted to reflect the actual value contributed to a given product by a country, the U.S. trade deficit with China (which in 2010 stood at $226.88 billion) would likely be cut in half. In 2009, the iPhone left the United States with a $1.9 billion trade deficit with China, but if the value-added approach to determining trade statistics were applied, the United States would have a $48 million trade surplus with China (in relation to the iPhone alone).
With the production cycle broken up and scattered around the globe, this adds enormous costs to transportation of equipment, machinery, goods and products between these nations, which in turn requires enormous quantities of oil and fuel to facilitate this transport system, and thus produces unnecessary amounts of pollution. Because of the high costs of transportation, fuel, and assembly, the value of the end product goes up, making it far more costly than if it were simply produced in one or two countries.

With countries determining their exports and imports based on inflated and inaccurate statistics, populations are saddled with enormous debts and thus the financial cost of breaking up the production cycle lands on the shoulders of the population, who were already subjected to increased competition between labor forces, reduced environmental and social protections, dismantled subsidies and regulations, increased personal debt and poverty.

So if “free trade agreements” are bad for people, bad for labor – at home and abroad – and bad for the environment and the nation as a whole, why are they pursued?

The answer is simple: they create enormous profits for banks and corporations, whose losses are subsidized by the state. In an actual “free market,” breaking up the production cycle would be far too costly to be a rational choice for a corporation, but because the state takes on the cost of doing so (largely through its trade deficit), the process continues.

When it comes to agreements like the Trans-Pacific Partnership, it is not difficult to see what the results will be: increased subsidies, protections and regulations for the benefit of large corporations and banks (notably the 600 corporations involved in secretly drafting the agreement over recent years) and decreased protections, subsidies and regulations that benefit the population, environment and society as a whole.

The TPP advances corporate monopolistic protections through intellectual property rights; undermines labor protections, putting the working class of 11 different nations in direct competition with one another; dismantles environmental protections and financial regulations; and expands corporate rights and privileges to allow undemocratic corporate institutions to challenge national laws through an unaccountable international tribunal of corporate lawyers who are given powers to overturn national laws or demand immense compensation from any nations that hinder those corporations' “potential profits,” thus further increasing the heavy cost of “free trade.”

The Occupy movement and other activists have a strong mandate to oppose the TPP and all related “free trade agreements.” Popular opinion is swinging against “free trade” as people seem instinctively to recognize – even without all the details – that such agreements undermine labor, increase debt and benefit only the rich.

But while public opinion may oppose the TPP in principle, the bigger problem is that "the public" does not know the TPP even exists. This is a challenge that the Occupy movement can step up to: promoting an educational campaign that crosses borders, organizing international protests and actions against the TPP, and establishing a “free market” of resistance based upon the “free trade” of information.

As corporate rights expand and democratic rights decrease, so must people demand an end to the TPP. Organized resistance, information and action have stopped “free trade agreements” in the past, and they can – and must – do so in the future. The coming corporate tyranny of the Trans-Pacific Partnership can only be defeated through a democratic movement of Transnational People Power.

Our already frail and dying democratic institutions lack the capacity to take up the challenge, so the challenge now rests with the people alone.

"Free" Trade-- Another Way For Conservatives To Undermine Democracy


Tuesday, April 16, 2013

"Free" Trade-- Another Way For Conservatives To Undermine Democracy

In the closing to his brilliant book, The Fifteen Biggest Lies About The Economy, Joshua Holland takes on the misleading notion of 'free trade' by pointing out that "Just because politicians say they believe in open markets and free trade between nations doesn’t make it true. In reality, they believe in 'free trade' until someone else gets a comparative advantage, and then their hypocrisy emerges and they become fierce protectionists."
Most people still believe that discussions of “free trade” are about ships full of bananas or ball bearings or whatever, crisscrossing the high seas. Understanding why that’s just a small part of the issue is key to grasping the difference between “free trade” and what these deals we’ve been signing for the last thirty years are really about: a corporate power grab.

Prior to World War II, trade wars were common, and they often led to shooting wars. In the mid-1940s, the General Agreement on Tariffs and Trade (GATT) was created to avoid those conflicts and foster world peace. Many of its authors were FDR liberals. They had high ideals.

Between 1944 and the mid-1990s, trade negotiations were conducted by dull, (mostly) white guys in business suits, and nobody really gave a damn. Poor countries griped about agricultural subsidies and the rich countries’ protectionism, but they were free to try various development strategies, including those that didn’t adhere to the dictates of “the market.”

During the first decades of the GATT, which governed trade between 1947 and 1995, the United States and “old” Europe had economies based heavily on manufacturing. Today, however, almost all advanced economies share a very similar distribution: about 1 to 2 percent in agriculture, maybe 20 or so percent in manufacturing, and around 80 percent in services.

For approximately the first forty years of the GATT’s existence, its members negotiated reductions in tariffs, quotas, and other traditional forms of market protectionism. They were the manufacturers, and those deals were for the most part negotiated on a level playing field between the world’s advanced economies-- what they call “North-North” negotiations in trade lingo.

People who brand opponents of today’s trade deals “protectionists” might ask themselves why nobody resisted the GATT during those years of slashing tariffs and quotas and the like. The reason is that reducing tariffs is what most people think of when they hear about “opening markets” and freeing up international trade. The controversy began only as “free trade” was gradually redefined to include all manner of domestic policies.

Beginning in the 1970s, two things happened-- or, I should say, two things aside from the oil shock of ’73. In 1979, during the Tokyo round of the GATT, negotiators began to look at “nontariff barriers.” These included onerous customs procedures, mountains of paperwork required to import goods, subsidies for domestic industry, and so on. That shift to “nontariff barriers” coincided with the emergence of the new conservative movement, with its think tanks and front-groups, and the elections of Reagan and Thatcher to head the Western world’s leading political and economic powers.

Now, once they started to look at nontariff barriers, it was inevitable that somewhere along the line, someone in those think tanks would say, “We can call all of those environmental laws and food-safety regulations nontariff barriers, too!”

With that mind-set, in 1994, after years of negotiations, the GATT culminated in the creation of the WTO, which had enforcement powers unlike any other multilateral organization. Its rules hadn’t been written by FDR liberals, but by the Reagan-Thatcher Big Business conservatives in the corporate jets circling Washington.

For too many of them, the new “free trade” framework provided a back door through which they could advance a broader agenda. They could push a set of treaties that pressured-- and, in many instances, legally compelled-- domestic legislatures to conform to the prevailing economic theories known as the “Washington Consensus” (whenever anyone calls something a “consensus,” it probably isn’t even close). And the definition of “nontariff barrier” continued to expand.

(In the meantime, since the early days of the GATT, dozens of countries, many of them newly liberated from the clutches of European colonialism, had been added-- and most were poor and had inadequate infrastructure and very different economic distributions. Many relied on agriculture not only for food, but also as a significant source of employment. Early on, the developed countries promised to start cutting agricultural subsidies and giving those developing countries a level playing field for agriculture, but so far they just haven’t gotten around to it yet.)

In addition, they began to look not only at the flow of goods across borders, but also at services. This brings us to a really key point: there’s a massive pile of cash just sitting out there in the functions that governments commonly perform: from education to sanitation and everything in between. According to Tony Clarke of the Polaris Institute, a Canadian NGO, the total estimated value of the world’s service sector, including public services, is between $15 trillion and $20 trillion. That’s a honeypot.

By the time we arrived at the “Singapore Round” in 1996, there was an aggressive push to (1) enact a broad set of “investor protections” that made a variety of laws-- some protecting the public interest-- subject to the WTO’s dispute-resolution process and (2) allow countries (or even private companies) to exert pressure on other governments to privatize their public services.

Organized labor, community activists, environmentalists, food security specialists, farmers, and many other groups started to see these rules as a significant threat to their work. They gathered to greet the ministers a few years later in Seattle-- the famous “teamsters and turtles” coalition-- which led to the infamous “Battle in Seattle” (actually a brutal police riot). Since that time, the fight has really been about how deep into the realm of domestic policy various trade agreements should reach.

Pressuring countries to adhere to the economic policies of the “Washington Consensus,” whether they’re popular or not, is job number one for the big multinationals, because a majority of governments on the planet today are, to varying degrees, democratic. And democracy is a huge challenge to many of the big multinationals’ interests. Workers’ movements, environmentalists, pesky public interest groups, and, above all, voters exert various degrees of influence on those elected representatives.

Trade treaties constrain legislatures to remain true to the prevailing orthodoxy. Most folks don’t know this, but when state lawmakers draw up new legislation, they often drop a line to the office of the U.S. Trade Representative to make sure their bills comply with our trade commitments.

Other countries acting on behalf of their biggest corporations can challenge laws that aren’t “WTO legal.” These aren’t about widgets being shipped from here to there; the range of what falls under the catchall “free trade” is astounding. A few of the more notorious decisions include:

A Massachusetts law preventing state and local governments from doing business with the brutal dictatorship in Burma was overturned by domestic courts after a WTO challenge.

An EU policy that gave preferential tariffs to small banana exporters in Europe’s former colonies was successfully challenged by the United States after lobbying by the Chiquita banana company.

Venezuela, backed by Brazil, successfully challenged provisions of the United States’ Clean Air Act that kept fuels with higher levels of pollutants out of the market.

The WTO has an enforceable arbitration process, but it isn’t always necessary to lodge a formal grievance. Because the vast majority of challenges to various domestic laws have been upheld, merely the threat of bringing a case is usually enough to make governments rethink their legislation. This is common when it comes to health, environmental, and food safety laws. In the first ten years of WTO arbitration panels’ operation, all but two such challenges brought before them prevailed.

In NAFTA and in regional deals such as CAFTA and the proposed Free Trade Area of the Americas (FTAA), the business community managed to get what it had tried and failed to achieve in the WTO: the ability of multinationals to cut out the middle man and sue governments directly for the loss of profits resulting from a regulation or a law they consider too “burdensome.” Under those rules, “signatory governments are required to provide extensive rights and privileges to foreign investors,” who are then “empowered to privately enforce these new rights by demanding cash payment from governments” that don’t give them what they want, according to a report by Public Citizen.

The cases are decided behind closed doors in “private tribunals operating outside the nations’ domestic court system”:
The track record of cases demonstrate[s] an array of attacks on public policies and normal governmental activity at all levels of government-- federal, state and local. Even though these NAFTA cases implicate commonplace public policies, the investor-state system is a closed and unaccountable one. Citizens whose policies are being attacked have no avenue of meaningful participation and neither do the state and local officials they elected to represent them. [Domestic] court decisions can be challenged and jury decisions undermined, yet no judge or jury has standing to participate in the private NAFTA tribunals.
These rules shift significant amounts of risk from investors to governments. At the same time, they sharply limit what governments can ask for in return.

The common response to this critique is pretty straightforward: most of the parties to international trade deals such as the WTO are democratic states. Their legislators are elected by the people, and when they enter into a treaty, they’re doing it on behalf of those who put them in office. Hence, democracy is safe, even if democratic governments don’t always have the freedom-- the “policy space”-- to advance their constituents’ interests.

But we have to remember those private jets stacked up over Washington during the run-up to the vote on CAFTA. That trade deal faced stiff public resistance-- one poll taken in the weeks before Congress voted found that three out of four Americans opposed trade agreements that resulted in job losses at home, even if they resulted in cheaper goods and services. And cheaper goods were a central selling point for the deal.

As the vote neared, it looked as if George Bush might have become the first president to fail to get a trade agreement through Congress in forty years. But all of the lobbying might of various business groups came to bear on members of Congress. As the Washington Post reported, “A prominent business leader recently laid it on the line: Business groups are prepared to cut off campaign contributions to House members who oppose the pact. ‘If you [lawmakers] are going to vote against it, it’s going to cost you,’ Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, warned recently during a meeting on Capitol Hill.” Several years later, months before the 2008 presidential elections, Donahue would announce a $60 million war chest dedicated to punishing those whom the Los Angeles Times described as “candidates who target business interests with their rhetoric or policy proposals, including congressional and state-level candidates.” “We plan to build a grass-roots business organization so strong that when it bites you in the butt, you bleed,” Donohue said.

On the eve of the vote, the Bush administration started to cut deals with members of its own party who were resisting the pact. The Los Angeles Times reported, “For more than an hour, lawmakers milled about the House floor and gazed at the electronic scoreboard displaying the vote tally, which showed CAFTA several votes short of the mark.” Nancy Pelosi, then the House minority leader, told the Times, “Right there in front of us, for the world to see, they were twisting arms, making deals, changing votes.” Finally, when the count reached 217 to 215, the vote was gaveled to a close, and the deal had scraped through by a hair.

Yet if the pressure on lawmakers here in the United States was great, it paled in comparison with that brought to bear on leaders of smaller, poorer states such as Costa Rica. Lori Wallach, the director of Public Citizen, noted that “The U.S. ambassador to Costa Rica, Mark Langdale, was slammed with a rare formal denunciation before Costa Rica’s Supreme Electoral Tribunal in August after he waged a lengthy campaign to influence the vote on CAFTA. As part of that [campaign], Langdale employed misleading threats and suggested there would be economic reprisals if CAFTA were rejected.” The Bush administration repeatedly threatened to remove Costa Rica’s trade preferences-- which waived some duties on products it exports to the United States-- if the Costa Rican people rejected CAFTA in a referendum.

This kind of geopolitical arm-twisting is par for the course in venues like the WTO. In 2001, immediately after the attacks of 9/11, U.S. trade representative Robert Zoellick made the case that advancing the Anglo-U.S. model of corporate “free” trade was key to winning the “War on Terror.” At the time, author Naomi Klein wrote, “Zoellick explained that ‘by promoting the WTO’s agenda, these 142 nations can counter the revulsive destructionism of terrorism.’ Open markets, he said, are ‘an antidote’ to the terrorists’ ‘violent rejectionism.’”

The United States has become infamous among trade observers for using that kind of rhetorical “linkage” to advance its agenda, but it’s far from unique in that regard. These kinds of power plays are especially evident in negotiations between wealthy states and the developing world, so-called North-South negotiations.

As Aileen Kwa, who analyzed the back-room deals in which trade agreements are formed in great detail, wrote, “In comparison to the United States, the EU is usually more sophisticated in the rhetoric it adopts... it promotes its agenda at the WTO as being ‘in the interests of developing countries.’ This is ironic since developing countries’ assessment[s] of their own interests are the complete opposite.”

The highly developed states use economic blackmail-- threatening poorer countries’ trade preferences and foreign aid accounts-- and blatantly undemocratic methods to overcome the developing world’s concerns about these deals and get them to sign on the bottom line.

In their seminal book Behind the Scenes at the WTO, Kwa and coauthor Fatoumata Jawara cast a bright light on the murky world of international trade negotiations. “Any country whose political system operated as the WTO... [does]-- where... rules were routinely ignored, and people or interested groups routinely used bribery and blackmail to achieve their political ends-- would not only be rightly condemned by the international community as undemocratic and corrupt, it would also face a real and constant threat of revolution,” they wrote.

Crucial meetings are held behind closed doors, excluding participants with critical interests at stake, with no formal record of the discussion. When delegates are, in principle, entitled to attend meetings, they are not informed when or where they are to be held. Meetings are held without translation into the languages of many participants, to discuss documents which are only available in English, and which have been issued only hours before, or even at the meeting itself. Those most familiar with issues (Ambassadors) are sometimes discouraged or prevented from speaking in discussions about them at Ministerial meetings. “Consultations” with Members on key decisions are held one-to-one, in private, with no written record, and the interpretation left to an individual who has a stake in the outcome. Protestations that inconvenient views have been ignored in this process fall on deaf ears. Chairs of committees and facilitators are selected by a small clique, and often have an interest in the issues for which the committee is responsible. The established principle of decision-making by consensus is routinely overridden, and the views of decision-makers are “interpreted” rather than a formal vote being taken... Rules are ignored when they are inconvenient, and a blind eye is turned to blackmail and inducements. The list is endless.

A free-market transaction, remember, has to be free of coercion. All parties have to have access to the same information. By these standards alone, “free trade” is anything but.
There have been plenty of "Free Trade" votes since then, but let's go back and look at the aforemented 217-215 vote on CAFTA in 2005. 27 Republicans just couldn't bring themselves, even with all the concentrated pressure, to vote against the United States. Twenty-seven was enough to have killed the bill. It only passed because 15 Democrats, almost all of them notorious corporate whores, crossed the aisle in the other direction and gave Bush the votes he needed to pass the bill and further wreck the U.S. ecconomy. Almost all of those traitorous Democrats have since been defeated. But here's the list of the ones still serving in Congress:
Jim Cooper (Blue Dog/New Dem-TN)
Henry Cuellar (Blue Dog-TX)
Rubén Hinojosa (D-TX)
Jim Matheson (Blue Dog-UT)
Gregory Meeks (New Dem-NY)
Jim Moran (New Dem-VA)
State Senator Daylin Leach is the Blue America-endorsed candidate for the open congressional seat in northeast Philadelphia/Montgomery County. He's focused like a laser on economic growth and job creation as the only way to lift America out of the economic morass that the ideologically-based conservative Austerity agenda has driven the country into. Leach is a proponent of FAIR Trade, rather than the misnamed coprorate jihad called "Free" Trade. This morning he told us, "'Free' trade is often one of those phrases which is cleverly used to conceal the fact that the opposite of what is being said is what is actually the result. It's like calling a bill gutting environmental regulations the Healthy Skies Initiative, or calling a bill antithetical to what our founders intended when they wrote the Constitution The Patriot Act. Too often 'free trade' takes away our freedom to protect our workers, our environment, and our economic well-being."

Monday, May 27, 2013

The Real Numbers: Half of America in Poverty -- and It's Creeping Upward



The Census Bureau has reported that one out of six Americans lives in poverty. A shocking figure. But it's actually much, much worse.

The Census Bureau has reported that 15% of Americans live in poverty. A shocking figure. But it's actually much worse. Inequality is spreading like a shadowy disease through our country, infecting more and more households, and leaving a shrinking number of financially secure families to maintain the charade of prosperity. 

1. Almost half of Americans had NO assets in 2009 

Analysis of  Economic Policy Institute data shows that Mitt Romney's famous  47 percent, the alleged 'takers,' have taken nothing. Their debt exceeded their assets in 2009. 

2. It's Even Worse 3 Years Later 

Since the recession, the disparities have continued to grow. An  OECD report states that "inequality has increased by more over the past three years to the end of 2010 than in the previous twelve," with the U.S. experiencing one of the widest gaps among OECD countries. The 30-year  decline in wages has worsened since the recession, as low-wage jobs have replaced formerly secure middle-income positions. 

3. Based on wage figures, half of Americans are in or near poverty. 

The IRS reports that the highest wage in the bottom half of earners is about $34,000. To be eligible for food assistance, a family can earn up to  130% of the federal  poverty line, or about $30,000 for a family of four. 

Even the Census Bureau recognizes that its own  figures under-represent the number of people in poverty. Its  Supplemental Poverty Measure increases, by 50%, the number of Americans who earn between one-half and two times the poverty threshold. 

4. Based on household expense totals, poverty is creeping into the top half of America. 

A family in the top half, making $60,000 per year, will have their income reduced by a total tax bill of about $15,000 ($3,000 for  federal income tax and $12,000 for  payroll, state, and local taxes. The  Bureau of Labor Statistics and the  Census Bureau agree that food, housing, and transportation expenses will deduct another $30,000, and that total household expenditures will be about $50,000. That leaves nothing. 

Nothing, that is, except debt. The median  debt level rose to $75,600 in 2009, while the median family  net worth, according to the Federal Reserve, dropped from $126,400 in 2007 to $77,300 in 2010. 

5. Putting it in Perspective 

Inequality is at its ugliest for the hungriest people. While food support was being targeted for  cuts, just  20 rich Americans made as much from their 2012 investments as the entire  2012 SNAP (food assistance) budget, which serves 47 million people. 

And as Congress continues to cut life-sustaining programs, its members should note that their 400 friends on the  Forbes list made more from their stock market gains last year than the total amount of the  foodhousing, and  education budgets combined.

Arguments about poverty won't end. Neither should our efforts to uncover the awful truth.

Note: This is an updated, corrected version of the original article, approved by the author. 

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Sunday, May 26, 2013

How America's Retirement Crisis Is Crushing the Hopes of a Generation of Young People

Hard Times USA  



We shouldn't just worry about older workers; their kids are hurting too.

Photo Credit: Shutterstock.com

The crucially important but largely missing context of today's debate over so-called “entitlement reform” (read: slashing Social Security benefits and shifting more healthcare costs onto seniors) is that we stand at the early stages of what's shaping up to be a massively painful retirement crisis.

And while there has been a longterm project among granny-bashing “entitlement reformers” to fuel a sort of intergenerational class warfare by accusing "greedy geezers" of hurting young people's prospects, the reality is that this growing retirement crisis is hurting not only older workers and retirees, but also the newest entrants into the workforce, a generation of young Americans whose prospects are far bleaker than those enjoyed by their parents.

If you're nearing retirement age – or have a parent or grandparent nearing retirement age – you're no doubt aware of how 40 years of stagnant middle-class wages and the disastrous shift from traditional pensions to 401(k)-type plans has made a dignified retirement all but impossible for all but the very well-to-do. According to the Bureau of Labor Statistics, the share of private sector workers responsible for their own retirement savings increased nearly four-fold between 1980 and 2008 (PDF).

This trend has been an integral part of what Yale political scientist Jacob Hacker called the “great risk-shift,” in which the burden of paying for education, healthcare and retirement has been increasingly shifted from corporations and the government onto the backs of individuals and families. This graphic from the Center for Budget and Policy Priorities tells the tale:

Wall Street, and its allies in Washington, swore that this transition to private accounts would harness the awesome power of the market to make us all wealthy in our golden years. In Forbes, Edward Seidle writes, “as a former mutual fund legal counsel, when I recall some of the outrageous sales materials the industry came up with to peddle funds to workers, particularly in the 1980s, it’s almost laughable—if the results weren’t so tragic.”
There was the “Dial Your Own Return” cardboard wheel of fortune that showed investors which mutual funds they should select for any given level of return. Looking for 12%? Load up on our government plus or option income funds! It was that easy to get the level of income needed in retirement, investors were told.
Like so many promises of the vaunted “new economy” popularized by Ronald Reagan and supported by both parties since, this was a scam with disastrous consequences. According to Teresa Ghilarducci, a professor of economics at the New School for Social Research, “seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts.” She adds: “The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.”

Today, two-thirds of retirees rely on Social Security for more than half of their retirement income, and for more than a third, those benefits make up at least 90 percent of their income. The average benefit in 2012 was just $14,760, and while talk of decreasing the cost-of-living adjustment has been all the rage in Washington, the reality, according to the Congressional Budget Office, is that the cost of living for seniors has increased faster than Social Security benefits, meaning that their real value has been falling even as people increasingly rely on them to get by.

How does this hurt younger workers? As it becomes more and more difficult to retire after busting one's ass in the American workforce for 40 years, an increasing number of older people have no choice but to remain in the workforce. Some work part-time; because of age discrimination, others take whatever jobs they can get, even if they're wildly overqualified. According to the Social Security Administration, “the labor force participation rates of men and women aged 62–79 have notably increased since the mid-1990s.”

Consider two pictures that are worth a thousand words; they show the share of the younger and older populations in the workforce, beginning about a decade after the transition to worker-owned retirement accounts began in earnest. As you can see, regardless of the ups and downs of the business cycle, the trend has been more workers aged 55 and over in the workforce and fewer working people under the age of 25 (The decline in labor force participation for 20- to 24-year-olds also correlates with an increasing share of young people getting a bachelor's degree, so this isn't a trend that can be attributed to a single cause.)
This shows the participation rate for workers over 55 (note that this can't be explained by more women entering the workforce; that shift was already largely baked into the cake by the time these data begin):

And this shows the participation rate for those aged 20 to 24:

Today, the unemployment rate stands at 7.5 percent, but almost 23 percent of 18- and 19 year-olds and more than 13 percent of 20- to 24-year-olds who want to work can't land a job. (The unemployment rate for those aged 55 and up is 5.5 percent.)

Again, this is the context that's largely missing from our endless debates about fiscal policy. It points to a rather obvious conclusion: we should be increasing Social Security benefits, decreasing the out-of-pocket healthcare costs seniors have to shoulder, and lowering the minimum age for retirement. In short, we should be focusing on policies that make it possible for older workers who have put in their time to kick back and let some younger workers find jobs. It wouldn't be a magic bullet for young people; it wouldn't deflate the student debt bubble or address our crushing level of income inequality, but it would be a darn good start.

Last month, the New America Foundation's Michael Lind, Joshua Freedman and Steven Hill offered a proposal that would go a long way toward achieving that goal. They envisioned an expanded Social Security program supplemented by a flat benefit that isn't tied to earnings or funded through payroll taxes, and argued that shifting a greater share of the costs of retirement onto Social Security would make tax-subsidized employer plans less crucial to Americans' retirement security. University of Texas economist James Galbraith has similarly argued for lowering the age of eligibility for Social Security and Medicare, at least until the employment picture improves.

But aren't these programs already costing too much? And aren't we already taxed to death, as the Tea Partiers claim? No: that's ideologically informed mythology. Prior to the Wall Street crash, we had the fourth lowest tax burden in the Organization for Economic Cooperation and Development (OECD). And while the average “replacement rate” for public pensions – the share of a workers' income covered by retirement benefits – is 57 percent, we cover just 39 percent, on average, in the United States (XLS). Americans have some of the stingiest retirement benefits in the developed world.

As for the politics, it almost goes without saying that at a time when it requires 60 votes in the Senate to name a post office after a war hero -- and when the House has essentially given up on legislating in the public interest – policies that help real people suffering real pain in this economy are nonstarters.

But one can be certain it won't remain that way. Because we're just at the beginning of this crisis, and with each cohort of Americans reaching retirement age, fewer will have pensions and more will have experienced the great middle-class squeeze than the cohort before it. So it will get worse before it gets better, but eventually our elites will have no choice but to finally recognize the severity of the crisis their neoliberal clap-trap has created.

Joshua Holland is a freelance writer and editor-at-large at AlterNet. He's the author of The 15 Biggest Lies About the Economy. Drop him an email or follow him on Twitter.

Saturday, May 18, 2013

Government Owes $2.7 Trillion to Social Security

Dissident Voice: a radical newsletter in the struggle for peace and social justice

Government Owes $2.7 Trillion to Social Security

The government has embezzled all surplus Social Security revenue, generated by the 1983 payroll tax hike, and spent the money on wars and other government programs. None of the money was saved or invested in anything. Social Security is not broken, but at the moment, it is broke. The cost of paying full benefits in 2010 was $49 billion more than Social Security tax revenue for the year. So the government had to borrow $49 billion (probably from China) in order to pay full benefits. And the gap between the cost of benefits and Social Security tax revenue will get bigger and bigger in the years ahead.

The only reason the government has been able to keep the public from finding out about “the great Social Security theft,” for all these years, is because the AARP and the NCPSSM have cooperated with the Social Security Administration in their official talking points about Social Security. The AARP has the following statement posted on its website: “Social Security will be able to pay 100 percent of benefits for the next 20 years.” The NCPSSM has this statement on its website: “Social Security is projected to deliver full guaranteed benefits until at least 2033.” But these statements are not even close to being true, and the leadership of these organizations know that they are deliberately misleading their members, and the public, with these false statements. 
 Social Security doesn’t even have enough money to pay this year’s benefits without borrowing. Its tax revenue for 2010 was $49 billion less than the cost of paying full benefits in 2010. And the gap between Social Security revenue and the cost of paying full benefits will become larger and larger in the years ahead.

The government IOUs in the trust fund are not like the marketable U.S. Treasury bonds held by China and America’s other creditors. Those marketable bonds can be converted into cash at any time by selling them in the open market. The IOUs in the trust fund are like a handwritten note that a bank robber might leave behind in the empty vault, stating how much money he has stolen. The note tells the bank how much money is missing, but it won’t help the bank get the money back. Similarly, the IOUs in the trust fund are a record of how much Social Security money was taken and spent on other programs. But the IOUs are not marketable, and they cannot be converted into cash. And the interest income, that the SSA claims the government is paying, is not cash interest. It is in the form of more of the same worthless IOUs that the trust fund already holds.

The harsh fact is that Social Security does not have any cash reserves. That is why President Obama said that he couldn’t guarantee that Social Security checks would go out on time without a budget agreement, because “There might not be enough money in the coffers to cover them.” The government owes Social Security $2.7 trillion, but the government is both unable and unwilling to repay the stolen money, at least in the short run.

The good news is that the Social Security System is not broken. It works well and has done so for the past 78 years. The problem is that the United States federal government is badly broken, and no “fix” is upon the horizon. The only problem is that,

Social Security does not have enough revenue to pay full benefits, and the government has stolen the cash reserves it is supposed to have in the trust fund. If the government would enact legislation requiring the repayment of the stolen money, perhaps in installments over the next 30 years, Social Security’s short-term problems would be fixed.

Forget about that old propaganda statement the enemies of Social Security have been repeating, over and over, since Social Security was first created. It goes like this: Social Security, in its present form, is unsustainable over the long run. That is just a big lie that the enemies use as a weapon in their war against Social Security. There is nothing basically wrong with the Social Security System, and it would not even be in the news today if crooked politicians hadn’t stolen $2.7 trillion of its money.

Dr. Allen W. Smith is a Professor of Economics, Emeritus, at Eastern Illinois University. He is the author of seven books and has been researching and writing about Social Security financing for the past ten years. His latest book is The Impending Social Security Crisis: The Government’s Big Dirty Secret. Read other articles by Allen, or visit Allen's website.

The Battle against Food Stamps: War on SNAP

Dissident Voice: a radical newsletter in the struggle for peace and social justice

The Battle against Food Stamps

War on SNAP

The United States might well be the most powerful nation on earth in terms of military muscle, and wield economic clout despite being severely humbled by the financial crisis. The country of business and capital is not bound to fall off the historical stage too soon. Its poor, however, might. Little is known about the huge swath of poverty that prevails in the country, other than an unhealthy sense that the existence of wealth presumes the existence of poverty. The United States remains transfixed by a gilded age, obsessed, as William Dean Howells suggested, by inequality. The Founding Fathers were less interested in the essence of a democratic impulse than a republican order, one of neat balance rather than levelling justice.

The politics of the belly remains a sensitive business, and political leaders have been concerned what the hungry stomach might do. What matters is wading off starvation, predicting what “nutrition levels” the poor require, and how they might manage the logistics of reaching grocery stores and food outlets. Much of this remains logistical fantasy but important. “We got a picture of a gorge, with farm surpluses on one cliff and under-nourished city folks with outstretched hands on the other,” claimed Milo Perkins, responsible for the first Food Stamp Program implemented in May 1939. Chronic unemployment existed alongside agricultural surpluses that threatened to go to waste.

Food stamp schemes have remained a feature of the U.S. republic since, a never-ending reminder of Perkins’ symbolic, and actual gorge of inequality. Their effectiveness has been praised for not being geographically restrictive, or periodical (such as school meals). The technical boffins evidently felt that a revision of the term was needed, coming up with the current term SNAP (Supplemental Nutrition Assistance Program) in 2008. Current numbers of recipients (or “participants” as policy analysts prefer) hover around 47 million.

The American Economic Recovery and Reinvestment Act of 2009 (ARRA) increased the SNAP benefit by 13.6 percent beginning April 2009. It was always something of a shock absorber, a measure to make sure the disaffected poor would be able to have something in their belly. But as human vulnerability is treated as weakness by the budget hawks of the GOP, the scheme was always going to come under criticism and eventual savaging.

As of late, the axe man in chief is Paul Ryan, who holds the reins of the House Budget Committee like a horseman of the apocalypse. Previous estimates had projected Ryan’s cuts at hitting families of three by about $20 to $25 a month, making it about $240 to $300 a year (Centre for Budget and Policy Priorities, May 1). The cuts, it seems, promise to be deeper than that – a staggering slash of $135 billion, or almost 18 percent over the next ten years. Chairman Ryan is evidently of the view that the growth of SNAP’s budget is a problem that needs to be rectified, even if it is not contributing to the nation’s long-term budgetary issues.

As senior policy analyst Dottie Rosenbaum points out, writing for the Centre on Budget and Policy Priorities (May 14), “The Congressional Budget Office projects that SNAP spending will fall to 1995 levels as a share of Gross Domestic Product by 2019.” Damn the state coffers, private charities and non-profits such as Feeding America can mop up the mess.

The way Ryan has proposed implementing the cuts will be accelerated, with an initial $125 billion slashed over a period of five years. This promises to involve a few standard tricks of the budgetary trade. One is to implement cuts by changing the criteria for people to receive them. Another might be to set the maximum SNAP benefit at 73 percent of the Thrifty Food Plan. This, as Stacy Dean notes in the Huffington Post (May 19), is the estimate arrived by the U.S. Agriculture Department in terms of assessing a family’s needs to afford a basic, adequate diet. What is promised is an unprecedented across the board reduction that will affect all recipients.

As most SNAP recipients – 80 percent or so – live below the poverty line, with 42 percent earning incomes half that of the poverty line, such cuts will be a vicious battering. In terms of numbers, we are talking about 22 million children, of which 10 million live in conditions deemed “deep poverty”. Keeping a populace fed might be the sacred cow of many states but in the United States, it is a governmental burden that requires lifting. The accountants promise to do violence to the poor – again.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne and can be reached at: bkampmark@gmail.com. Read other articles by Binoy.