Exclusive: Inside the White House's Egypt Scramble By John Barry

As protests erupted in Egypt, Washington struggled desperately to find the right response to the crisis. From officials' initial buoyant optimism and behind-the-scenes diplomatic maneuvers to the swift judgment call that Egyptian President Hosni Mubarak's speech required President Obama's response, John Barry reports on the administration's decision-making during the gathering storm.

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Inside the White House's Egypt Scramble

by John Barry Info

As protests erupted in Egypt, Washington struggled desperately to find the right response to the crisis. John Barry reports on the administration’s decision-making. Plus, full coverage of the Egypt revolt.

For three days straight, as the Cairo crisis gathered momentum, they had hardly left their desks. Now, huddled in the big office of their boss—one of the administration policy-makers trying to calibrate the U.S. response to the unfolding drama—the advisers watched Egyptian President Hosni Mubarak’s first statement. Two television sets were running, one showing CNN and the other a satellite feed from Al Jazeera. Someone had popped popcorn in a microwave. In the old days, their boss reflected, he would have ordered in pizza, but since 9/11 the ever-expanding security precautions had shut down deliveries of take-out.

Gallery: Demonstrations in Egypt

Victoria Hazou / AP Photo

The mood was buoyant, as revealed by interviews with several officials involved in the ongoing administration debate that provide at least a preliminary glimpse of their concerns as Egypt spiraled toward chaos.

Had there been an office pool, the boss thought, the favored bet would have been that Mubarak was about to “do an LBJ” and repeat what President Lyndon Johnson did in 1968 in the face of a wave of protests: announce he would not stand in the upcoming presidential election. Certainly, Mubarak’s departure would present the U.S. with a new set of daunting challenges, but at least it would quiet the Egyptian streets and buy some time for mediation.

But as the Egyptian president spoke—a couple of the Arabic speakers in the room providing translation—the optimism died. Mubarak announced he was dismissing his government; he talked of reforms. But he also made clear his determination to stay on. There were groans, shaking of heads. This wasn’t going to be enough to halt the tumult in half of Egypt’s cities, and, more disconcertingly, Mubarak’s assertion that the demonstrations were “part of a bigger plot to shake the stability” of Egypt sounded ominous. The Egyptian president had called out the Army on Friday; now his speech sounded as if he was preparing to use it. President Obama’s Middle East advisers believed that if Egyptian security forces opened fire on demonstrators, the country would likely explode. As Mubarak ended his address, someone in the room voiced the thought on everyone’s mind: “Well, what do we do now?”

In the White House, that judgment was swiftly made. Mubarak’s speech was a climactic moment: It was time for President Obama to act.

There were groans, shaking of heads. This wasn’t going to be enough to halt the tumult in half of Egypt’s cities, and, more disconcertingly, Mubarak’s assertion that the demonstrations were “part of a bigger plot to shake the stability” of Egypt sounded ominous.

Throughout the week, as the crisis gathered storm in Egypt, the administration had otherwise been slow to react, seemingly always one step behind events. This was partly because neither the U.S. intelligence community nor diplomats on the ground foresaw how swiftly the protests in Egypt would gather momentum—even if everyone realized that virtually the entire Arab world is a tinder box of pent-up frustration, with despotic regimes unable to meet the needs of, especially, their youth. As Secretary of State Hillary Clinton herself put it last month, in a speech in Doha that now seems uncannily prescient, Arab leaders would face growing unrest, extremism, and even rebellion unless they reformed “corrupt institutions and a stagnant political order.” It was the starkest warning ever delivered by a senior American official, and a message brought home a few days later when Tunisia erupted in revolt.

Yet, when it came to Egypt, the tone was different, and as the protests in Cairo gathered momentum, Clinton’s initial public comments were a mixture of fact and hopeful fiction. “Our assessment is that the Egyptian government is stable and is looking for ways to respond to the legitimate needs and interests of the Egyptian people,” she said, an assessment that didn’t take long to be overtaken by events.

Whether Mubarak indeed was committed to responding to “the legitimate needs and interests of the Egyptian people” remained an open question. Clinton’s statement, however, had been carefully calibrated, coming after the first round of what proved to be an exhausting week of discussions by President Obama and his top officials.

From the start, according to sources privy to the discussions, talks revolved around two objectives: how to cajole Mubarak to respond to the demonstrations, while, at the same time, not saying anything publicly that could be taken as American approval of the forcible overthrow of Arab regimes. But as the demonstrations grew in intensity, that balance became increasingly fraught. The demonstrators were, after all, demanding human and political rights to which the United States is committed, but which Mubarak showed no sign of granting.

After much discussion, it was decided that President Obama would not try to speak directly to Mubarak. According to an informed source, the assessment was that president-to-president intervention should be held in reserve as a last recourse. Besides, any exchange with Mubarak would require Obama to say whether he supported Mubarak’s continued rule. And the president was in a bind: He couldn’t bluntly say no. On the other hand, Egyptian authorities would instantly broadcast any expression of support as proof that Washington was backing Mubarak’s hold on power. (Shown this article for review, the White House said: "There's nothing we'd comment on here at the moment.")

So the administration tried to reach Mubarak by other means. The Cairo embassy reached out to his advisers. Other Arab leaders were enlisted. Across the region, the events in Cairo were viewed with mounting concern by other governments. The longer their television screens were filled with those scenes of protest, the likelier they were to trigger comparable uprisings in other capitals. The administration’s message was clear: for your own sake, persuade Mubarak he has to quell the revolt by offering concessions.

By Thursday, though, the Cairo embassy was reporting that Mubarak was mobilizing the Army. Everyone knew that Friday, the Muslim day of prayer, would see the biggest demonstrations yet. Mubarak’s mobilization of the military could only mean that he was set on suppression. There was a real risk of bloodshed—and the judgment both of analysts in Washington and of Arab leaders in other capitals was that killings on any scale could ignite a firestorm—not only in Egypt but across the region.

Taking advantage of a pre-arranged Q&A session on YouTube, Obama warned: “The government has to be careful about not resorting to violence.” Mubarak, he said, needed to be “moving ahead on reform—political reform, economic reform”.

Whether Obama’s warning influenced Mubarak’s actions is unclear. The Army did roll into the streets of Cairo and other cities on Friday. But it did not shoot; and, on Friday evening, Mubarak appeared on television for the first time in the crisis.

Meanwhile at the Pentagon, a high-powered delegation of Egyptian military leaders, including the armed forces Chief of Staff Lt. Gen. Sami Hafez Enan, cut short a scheduled week-long visit after only a few hours, departing instead for the airport. Their Pentagon hosts wished them well, with careful expressions of hope that a peaceful resolution of the crisis in Egypt would permit the continuation of the U.S. military’s long-standing relationship with Egypt’s armed forces. (Since the U.S. funds the Egyptian military to the tune of $1.3 billion a year, the message was clear.)

Administration officials suspect—or, at any rate, hope—that Obama’s blunt declaration forced Mubarak’s hand, prompting the Egyptian president to address his nation. What Mubarak offered in his televised speech, however, was “too little, too late,” as someone at that popcorn-eating gathering said. There was no prospect, Obama’s advisers believed, that Mubarak’s vague promises of reform would pacify the streets.

At a meeting on Friday afternoon, Obama and his top officials, including Clinton, Vice President Joe Biden, and National Security Adviser Tom Donilon among them, concluded that the time had come for Obama to talk directly to Mubarak. And Mubarak’s address to the Egyptian people had given Obama the opening he wanted. The White House organized the call.

It was an intervention that dramatically—and publicly—escalated the American involvement in the Egyptian crisis. In an address from the White House, Obama outlined what he had told Mubarak, putting the administration unequivocally behind the demonstrators’ demands. “The people of Egypt have rights that are universal,” Obama said in his speech. “And the United States will stand up for them everywhere.” The president also warned both sides against violence but his message was clear: “When President Mubarak addressed the Egyptian people tonight, he pledged a better democracy and greater economic opportunity. I just spoke to him after his speech, and I told him he has a responsibility to give meaning to those words, to take concrete steps and actions that deliver on that promise.” And, said Obama, “we are committed to working with the Egyptian government and the Egyptian people—all quarters—to achieve” those goals.

It was a breath-taking pledge, with Obama coming close to making the U.S. the guarantor that Mubarak will act. In Egypt, his reference to “all quarters” will be taken to suggest that the U.S. will even reach out to the Muslim Brotherhood, an unprecedented step.

In the last week, the administration has come a long way.

John Barry joined Newsweek's Washington bureau as national security correspondent in July 1985. He has reported extensively on American intervention in Afghanistan, Kosovo, Haiti, Bosnia, Iraq and Somalia and efforts for peace in the Middle East. In 2002, he co-wrote "The War Crimes of Afghanistan" (8/26/02 cover) which won a National Headliner Award and was a finalist in the ASME National Magazine Awards for public service and a finalist in the SPJ Deadline Club Award for investigative reporting.

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January 29, 2011 at 08:37:43

Where is America's Breaking Point?

By lila york (about the author)

opednews.com

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March against Iraq War by Lila York

"Unemployment is high. Average income is low and declining, making it impossible for a man to marry and support a family. Anger with rampant corruption in government is palpable and longstanding. One percent of the population lives in the lap of luxury that ordinary people can only dream of. The richest one percent is totally ignorant of the real problems of ordinary citizens. GDP is roughly 5% but the majority of the people have seen no benefit from that. When the president travels in his limousine the roads are cleared in front of him, so he has no notion of how bad the traffic problems are. Elections here are fixed and essentially a joke, as opposition parties cannot run in any effective sense. The people have been accused of lethargy and apathy, and a willingness to tolerate a loss of civil liberties. But everybody has a breaking point. The people are fed up. They have had enough."

That was Ben Wedeman, CNN's longtime Mid-East reporter speaking from Egypt last night. But that could have been Amy Goodman reporting from a march on Washington. As Hillary Clinton urged tolerance for protesters from the Egyptian government I wondered what she would say to the world if 200 million Americans took to the streets to protest government corruption, rigged elections, an absurd wealth distribution, and declining wages in America.

Where is America's breaking point? In a country where both parties in a two-party system are equally beholden to corporate money, where are the opposition leaders? When do Americans demand real elections - elections where there is no money involved and all potential candidates are funded by taxpayer dollars?

Americans are now placed in the absurd position of needing to organize a constitutional convention in order to overturn a politicized ruling by a corrupt supreme court; of needing to prove in every state that a corporation is not a human being. The apathy of Americans is equally palpable - as Congress and the courts behave as though they are enslaved by corporations and ignore the will of the American people most of the time. As Hank Paulsen was in the process of blackmailing Congress into a trillion dollar bailout for his banker cronies, every American adult with a pulse called his representative and screamed "NO". Congressmen reported on the floor of the House that calls and emails were 99% against a bailout. Congressional Democrats buckled to their banker masters and ignored us. And how did Americans protest being ignored? They turned control of the House of Representatives over to the Republicans - whose initial volley was to outlaw public funding for presidential elections. Next on their agenda: outlawing abortion and ending Social Security and Medicare.

Our progressive opposition groups are fragmented and issue-based, as could be expected in a nation so huge and diverse. What is needed is a mechanism for binding progressive groups together to fight - literally - for a new regime: For publicly-funded elections and an end to gerrymandering that would give us some hope of a representative government. What is needed is genuine progressive leadership.

Lila York is a choreographer and activist. She has traded the markets since 1990.

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

The State of the Union: Not a Time for Saccharin and Gimmicks

by Kevin Zeese / January 27th, 2011

Members of the corporate political duopoly switched seats and sat next to each other making it even harder to tell the corporate welfare party from the crony capitalist party. Sadly, the spokespersons for both failed to learn the lessons of history and as a result the American economy will continue to falter with U.S. militarism continuing to expand.

Listening to the saccharin rhetoric of President Obama one would think the nation’s economy was flourishing and the military was winning wars. The truth, that the economy is still in collapse and the military is stuck in war quagmires all piling up record debt, was hard to see through his veil of words.

Debt, the bi-partisan duopoly mistaken priority, was the problem the president acknowledged offering two McCain campaign promises – no more earmarks which make up less than 1% of the federal budget; and a partial budget freeze, excluding national security. When McCain proposed a freeze during the campaign Obama mocked it saying a “spending freeze is a hatchet, and we do need a scalpel.” Gimmicks, not solutions

In fact, the economy continues to be in crisis with high levels of unemployment, record foreclosures and record poverty. The best lesson for how to get out of the economic mess of today comes from the depression. It is important to look at the facts rather than the myths. The pre-WWII New Deal era from 1933-1940, even if you include the recession of 1937-38, saw the single biggest drop in the unemployment rate in U.S. history. According to the census, the unemployment rate in 1933 was 24.7% by 1940 unemployment had dropped to 14.5%. This was accomplished by massive federal spending focused on job creation.

Obama came into an economic crisis and wasted the opportunity by re-enforcing concentrated corporatism rather than challenging it, investing in Wall Street rather than creating jobs, re-enforcing insurance-dominated health care and failing to face up to uncontrolled spending for the military industrial complex. From last night’s speech, we can expect more of the same and a floundering economy as a result.

But the Republicans were even more out of touch with the lessons of history and the needs of the day. A second economic downturn officially began in May 1937 when FDR responded to deficit hawks and slashed spending programs to balance the budget. These premature spending cuts caused another severe recession. Cutting government spending brought unemployment back up to 19% in 1938 from 14% in 1937. The recession ended after 13 months in June 1938 when FDR reversed course restarting economic growth. By the time of the attack on Pearl Harbor in December 1941, the unemployment rate was down to 9.7%

Even more absurd are calls to cutback Social Security and Medicare. These areas of spending have their own lines of funding from payroll taxes and therefore do not affect the deficit. They need small changes to continue to make them self-supporting, but they have been self-supporting for decades prior to this recession. Breaking this contract with Americans, making the elderly poorer and unable to spend, is no way to stimulate the economy.

Neither the crony capitalist nor corporate welfare party are facing up to the cuts needed in the largest area of discretionary spending, the military. Obama has created record DoD budgets, record intelligence budgets and record arms sales. Those who profit from weapons and war have done well in the Obama economy. The cuts being talked about by outgoing Secretary Gates are a miniscule fraction of what is needed.

Unlike the era of FDR, war will not get the economy moving. The U.S. has been engaged in the longest war in our history in Afghanistan, still has tens of thousands of troops and mercenaries in Iraq and is expanding the war in Pakistan. Wars are not creating the kind of WW II war economy as the methods of war have changed. At a cost of $1 million borrowed dollars per troop per year in Afghanistan the war is a drain on the economy not a stimulus.

Spending on military certainly creates jobs, just not many compared to other spending or tax cuts. Spending $1 billion on the military creates 8,555 jobs while spending the same amount on mass transit would create 19,795 and on education 17,687. Even spending on tax cuts, not a great form of stimulus, is more efficient than the military, creating 10,779 jobs. Health care and infrastructure spending create about 12,800 jobs. The U.S. needs WWII in reverse, a rapid switch from a military-dominated economy to a civilian-dominated economy.

There are some signs of recovery finally, but there are also signs of frailty. At best the economy will recover hesitantly, but another collapse is also possible. The failure to heed the lessons of history increases the chances of the economy faltering rather than growing, and with that the debt will grow as well. This is not a time for sacchrin and gimmicks. It is time to face reality and institute paradigm shifting change. It is time for a democratized economy that benefits all of us and to end an economy designed for concentrated corporate interests that benefit few.

Kevin Zeese is executive director of Voters for Peace. Read other articles by Kevin, or visit Kevin's website.

This article was posted on Thursday, January 27th, 2011 at 8:00am and is filed under Afghanistan, Capitalism, Corporate Globalization, Democrats, Iraq, Military/Militarism, Pakistan.

Why Am I So Negative? (and Other FAQs)

Why Are You So Negative? (and Other FAQs)

by Mickey Z. / January 27th, 2011

FAQ: Why are you attacking me for my way of life?

MZ: That’s easy. Our way of life is really a “way of death” and is directly responsible for the current global crises I write about. We also might want to agree to save the word “attack” for, say, those living under the US taxpayer-funded predator drones, cruise missiles, and depleted uranium shells. Let’s save it for countless victims of child abuse. Let’s save “attack” to describe the reality of one rape every 46 seconds in America. Okay?

FAQ: Why don’t you offer any step-by-step solutions?

MZ: Way too many people imply that unless a critic expounds a specific strategy for change, his/her opinion is worthless. This remarkably unsophisticated reaction misses the essential role critical analysis plays in a society where problems—and their causes—are so cleverly disguised. When discussing the future, the first step is often an identification and demystification of the past and present.

Besides, what value would my “solutions” hold while we are still in the midst of myriad global crises? I like to imagine that if we began detaching ourselves from a system designed to destroy us (and all life) and began dismantling that system, we’d create a space in which we could recognize paths and options currently invisible to us.

FAQ: Why do you always focus on the negative?

MZ: Becoming an activist can be an incredibly positive experience: creating community, inspiring change, feeling empowered. While most humans choose instead to use their meager time chasing money, collecting possessions, and obsessing over pop culture, the activist sees a bigger picture, a longer view, a deeper connection. However, being an effective activist also requires us to tear off the blinders and become acutely aware of how our way of life has devastated the planet.

More importantly, what does the term “negative” mean in this context anyway?

If you went to a doctor, would you deem him/her negative for talking about how high your cholesterol levels are instead of, say, focusing on your excellent fingernail health? If you brought your car in for a tune-up, do you want the mechanic to compliment you for keeping your tire pressure at the right level but stay away from a negative topic like defective brakes? Of course not…

Why, then, do so many humans shut down when confronted with the realities of our current social, economic, and environmental crises? Why is analysis that presents a dose of reality smugly dismissed as “negative”? Don’t you want to know what’s going on and how you can help address it beyond minor lifestyle changes and the petty conflicts of party politics? Why not save your knee-jerk “negative” retort for those who directly or indirectly support the corporate-sponsored rape of our planet?

News Flash: It’s not “negativity” that’s the issue here, folks. It’s denial.

Antonio Gramsci wrote, “I’m a pessimist because of intelligence, but an optimist because of will.” I can think of no better mantra for activism. Don’t shy away from learning the ugly realities of industrial civilization but never let these brutal truths prevent you from taking urgent action and believing you can create change and save lives—human and non-human lives. It’s a delicate balance, but our ability to walk this fine line could literally make all the difference in the world. We need a planet brimming with pessimistic optimists…

FAQ: Why aren’t you marching in lockstep with me? You suck.

MZ: Of course, no one phrases this question quite so bluntly but it’s astonishing to me how often a fellow human can be virtually in synch with my perception/lifestyle/worldview but choose instead to angrily dwell upon the issues on which we differ. Purity is not a realistic or productive goal.

FAQ: Since you seem to think you have all the answers, exactly what should we do?

MZ: This is the most disingenuous FAQ of all. You know exactly what needs to be done. If you walked into a room and saw a man attacking someone you loved, would you ask an obscure writer like me what you should do? Would you write a letter to Congress, sign a petition, hold a candlelight vigil, vote for a Democrat… or would beat the attacker’s ass from one end of the room to the other?

And for the record, I definitely do not think I have all the answers, but I sometimes feel I have more questions than most.

Mickey Z. is probably the only person on the planet to have appeared in both a karate flick with Billy "Tae Bo" Blanks and a political book with Howard Zinn. He is the author of 9 books—most recently Self Defense for Radicals and his second novel, Dear Vito—and can be found on the Web. Read other articles by Mickey.

This article was posted on Thursday, January 27th, 2011 at 8:01am and is filed under Activism, Environment, Global Warming.

Published on Sunday, January 23, 2011 by The Guardian/UK

Food Speculation: 'People Die from Hunger While Banks Make a Killing on Food'

It's not just bad harvests and climate change – it's also speculators that are behind record prices. And it's the planet's poorest who pay

by John Vidal

Just under three years ago, people in the village of Gumbi in western Malawi went unexpectedly hungry. Not like Europeans do if they miss a meal or two, but that deep, gnawing hunger that prevents sleep and dulls the senses when there has been no food for weeks.

(Illustration: Katie Edwards)

Oddly, there had been no drought, the usual cause of malnutrition and hunger in southern Africa, and there was plenty of food in the markets. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months. Unusually, too, there was no evidence that the local merchants were hoarding food. It was the same story in 100 other developing countries. There were food riots in more than 20 countries and governments had to ban food exports and subsidise staples heavily.

The explanation offered by the UN and food experts was that a "perfect storm" of natural and human factors had combined to hyper-inflate prices. US farmers, UN agencies said, had taken millions of acres of land out of production to grow biofuels for vehicles, oil and fertiliser prices had risen steeply, the Chinese were shifting to meat-eating from a vegetarian diet, and climate-change linked droughts were affecting major crop-growing areas. The UN said that an extra 75m people became malnourished because of the price rises.

But a new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are thought to be causing food prices to yo-yo and inflate. The charge against them is that by taking advantage of the deregulation of global commodity markets they are making billions from speculating on food and causing misery around the world.

As food prices soar again to beyond 2008 levels, it becomes clear that everyone is now being affected. Food prices are now rising by up to 10% a year in Britain and Europe. What is more, says the UN, prices can be expected to rise at least 40% in the next decade.

There has always been modest, even welcome, speculation in food prices and it traditionally worked like this. Farmer X protected himself against climatic or other risks by "hedging", or agreeing to sell his crop in advance of the harvest to Trader Y. This guaranteed him a price, and allowed him to plan ahead and invest further, and it allowed Trader Y to profit, too. In a bad year, Farmer X got a good return but in a good year Trader Y did better.

When this process of "hedging" was tightly regulated, it worked well enough. The price of real food on the real world market was still set by the real forces of supply and demand.

But all that changed in the mid-1990s. Then, following heavy lobbying by banks, hedge funds and free market politicians in the US and Britain, the regulations on commodity markets were steadily abolished. Contracts to buy and sell foods were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. In effect a new, unreal market in "food speculation" was born. Cocoa, fruit juices, sugar, staples, meat and coffee are all now global commodities, along with oil, gold and metals. Then in 2006 came the US sub-prime disaster and banks and traders stampeded to move billions of dollars in pension funds and equities into safe commodities, and especially foods.

"We first became aware of this [food speculation] in 2006. It didn't seem like a big factor then. But in 2007/8 it really spiked up," said Mike Masters, fund manager at Masters Capital Management, who testified to the US Senate in 2008 that speculation was driving up global food prices. "When you looked at the flows there was strong evidence. I know a lot of traders and they confirmed what was happening. Most of the business is now speculation – I would say 70-80%."

Masters says the markets are now heavily distorted by investment banks: "Let's say news comes about bad crops and rain somewhere. Normally the price would rise about $1 [a bushel]. [But] when you have a 70-80% speculative market it goes up $2-3 to account for the extra costs. It adds to the volatility. It will end badly as all Wall Street fads do. It's going to blow up."

The speculative food market is truly vast, agrees Hilda Ochoa-Brillembourg, president of the Strategic Investment Group in New York. She estimates speculative demand for commodity futures has increased since 2008 by 40-80% in agricultural futures.

But the speculation is not just in staple foods. Last year, London hedge fund Armajaro bought 240,000 tonnes, or more than 7%, of the world's stocks of cocoa beans, helping to drive chocolate to its highest price in 33 years. Meanwhile, the price of coffee shot up 20% in just three days as a direct result of hedge funds betting on the price of coffee falling.

Olivier de Schutter, UN rapporteur on the right to food, is in no doubt that speculators are behind the surging prices. "Prices of wheat, maize and rice have increased very significantly but this is not linked to low stock levels or harvests, but rather to traders reacting to information and speculating on the markets," he says.

"People die from hunger while the banks make a killing from betting on food," says Deborah Doane, director of the World Development Movement in London.

The UN Food and Agriculture Organisation remains diplomatically non-committal,saying, in June, that: "Apart from actual changes in supply and demand of some commodities, the upward swing might also have been amplified by speculation in organised future markets."

The UN is backed by Ann Berg, one of the world's most experienced futures traders. She argues that differentiating between commodities futures markets and commodity-related investments in agriculture is impossible.

"There is no way of knowing exactly [what is happening]. We had the housing bubble and the credit default. The commodities market is another lucrative playing field [where] traders take a fee. It's a sensitive issue. [Some] countries buy direct from the markets. As a friend of mine says: 'What for a poor man is a crust, for a rich man is a securitised asset class.'"

© 2011 Guardian News and Media

AlterNet.org

ECONOMY

AlterNet / By David Rosen

Will Only Another Great Depression Save America?

The economic crisis is really a political struggle between the rich and the rest of us.

January 20, 2011

Americans are increasingly aware that the Great American Century is over. A November 2010 Rasmussen poll found that just over one-third (37 percent) of respondents believe America's best days are still ahead. Sadly, nearly half (47 percent) say the nation's best days are in the past. They wonder what will come next.

Officially, the Great Recession started in December 2007 and ended in June 2009. Unofficially, the living recession grinds on with millions of Americans remaining unemployed and underemployed, millions continuing to lose their homes due to foreclosure, and millions more joining the legion of the homeless, hungry and those without health care. The U.S. is today marked by second-rate health care, educational and telecommunication systems.

The question haunting America is simple: if the American Century is over, what comes next? Will only another Great Depression save America?

* * *

The American Century was, symbolically, predicated on the Ozzie and Harriet myth of suburban home ownership; the popping of the housing bubble precipitated the Great Recession. As the myth of home ownership evaporates, the American Century ends.

In their important new book, Winner-Take-All Politics: How Washington Made the Rich Richer -- and Turned Its Back on the Middle Class, Jacob Hacker and Paul Pierson paint a grim picture of the nation's present state of affairs.

The authors, political science professors from Yale and Berkeley, respectively, critically assess the current situation. "The Wall Street of well-heeled bankers are thriving," they note, "while the Main Street of ordinary workers struggled amid the worst economic downturn since the Great Depression." They detail how, since the early '80s, the U.S. has "drifted away from a mixed-economy cluster and traveled a considerable distance toward another: the capitalist oligarchies" of Latin America.

They provide four valuable insights.

First, the current crisis is the result of four decades of economic and social restructuring driven by the demands of the rich and super-rich, especially the financial services sector, to capture more of the nation's wealth.

Second, this capitalist class has effectively taken control of the political process, capturing the Republican party and, to a lesser extent, the leadership of the Democrats as well.

Third, they have built a well-financed operation of think-tanks, lobbyists, astroturf shills, co-opted consumer groups, obsequious religious leaders, media bloviators and regulatory bureaucrats to make their message America's shared, self-evident truth.

And fourth, as a result of the first three factors, ordinary Americans, who they identify as the middle class, have not only lost their economic shirts, but their political influence and interest in politics as well.

Corporate capitalism has, over the last three decades, transformed America. Finance capital has come to dominate and manufacturing has been relocated from America's heartland to the lowest-paid machilador zones scattered across the globe. Corporatist policies, facilitated through federal tax, subsidy, trade and other programs, have left Detroit and other once-proud urban centers sinkholes of 21st-century underdevelopment.

Hacker and Pierson argue that the current economic crisis is really a political struggle between the rich and the rest of us. They document the process by which social wealth has been systematically expropriated by the rich from the American multitude. Ever so tasteful, the authors refuse to call this process "class war." However, the wealth of information they muster and their careful analysis makes it impossible to draw any other conclusion. America is in the grips of a bitter class war and the American people are losing.

At the heart of this intensifying class war is growing income inequality.

One example the authors offer is most illuminating: "The share of [national] income earned by the top 1 percent of Americans has increased from around 8 percent in 1974 to more than 18 percent in 2007." Going further, they add, "the only time since 1913 … that this share has been higher was 1928." More alarming, they note that the average annual income of the nation's top 1/10th of 1 percent (some 10,000 households) jumped from $4 million in 1974 to $35 million in 2007.

Other analyses, like those at the Economic Policy Institute, push the statistical data even further. The EPI argues that in 2006, the top 1 percent controlled 23 percent of all income and that today's super-rich have regained the position they held just prior to the 1929 stock market crash when they controlled 24 percent of all income. As the Great Recession grinds on, few can anticipate that the share controlled by the top 1 percent has not increased.

The great post-WWII income normalizer was the progressive income tax and, in the intervening decades, is disappearing. Between 1963 and 2003, the top bracket saw their tax rate decline to 35 percent from 91 percent.

Reagan's counter-revolution cut the tax rate for the richest from 70 percent to 28 percent. Under George H.W. Bush, the rate nosed up to 31 percent and increased further to 39.6 percent under President Clinton; it decreased to 35 percent under George W. Bush, where it stands today and -- with the new "bipartisan" financial agreement -- for the immediate future.

* * *
In the wake of the 2010 elections, there is even less likelihood that the issues that caused the erosion of the American Century will be addressed. Rather, we are likely to see a deepening -- and increasingly vitriolic -- gridlock in Washington as the 2012 presidential election approaches. Unless there is a remarkable turnaround, Obama will likely fail in his reelection bid and the Democrats will suffer a further shellacking.

This could catapult a viciously right-wing corporatist clique into power, fueling ever-greater economic inequality, evangelical moral intolerance, neo-fascist and racist immigration policies, and a growing surveillance state. The worst tendencies in the American character will dominate and all will suffer.

In the short-term, over the coming two to five years, a meaningful, if modest, recovery may well take place. The jobless rate could decline to 6 to 7 percent, consumer-spending increase modestly, home purchases pick up and the stock market continue its upward tilt. However, the quality of life for the vast majority of Americans is likely to further deteriorate, with more people chasing minimum-wage jobs, unions further eviscerated and non-documented immigrants rounded up. Some are calling this possible short-term recovery the "new normal," a darker time marked by significantly lowered expectations signally the end to the American Century.

While relatively tolerable, the new normal gives us little faith in America's long-term prospects. There has been much blather from politicians and their paid talking-head pundits about a "new" or "green" economy. It sounds great and, in truth, it is the only way forward. Sadly, there has been little commitment to transform the national economy.

America's long-term future seems pretty bleak for the vast majority of the people. The legacy of a half-century of restructuring social wealth will likely buffer the baby-boomer generation and its children. But what happens to the following generation, the grandchildren of baby boomers, and their offspring? The nation's long-term prospects looks dismal.

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If the great American prosperity party is over and the new normal really becomes the new normal, what lies ahead? If, as can be realistically anticipated, America slowly devolves into a second-tier country, will it come to resemble France, Netherlands or Finland (which would not be bad) or is something far worse likely? In either case, what can be expected in terms of the quality of life for the average American?

The contours of America's future are visible. Prosperity is being replaced by a frayed social safety net; crime and incarceration rates are beginning to increase; and ceaseless and costly foreign military misadventures will continue in replace of a meaningful internationalist policy suited for the 21st century. Making matters worse, the extraction industries will continue to drive up carbon levels, thus upping the chances of a global environmental catastrophe.

Sadly, the American ruling elite will likely continue to pursue their single-minded objectives of gobbling up more of the social wealth and maintaining global imperial hegemony. One can only wonder if the forces of reaction have set the stage for another Depression? Is the recent banking crisis a precursor to what is just around the corner?

Does today's capitalist class share the same shortsighted, self-interested blindness that marked their forefathers, those who facilitated the 1929 stock market crash and cataclysmic Great Depression?

Unbeknownst to these class warriors, a second Great Depression might be the only way class tyranny can be broken. Is there another way by which the interests of the many can reassert themselves over the gluttony of the few?

Structural changes in capitalist development make this prognosis all the more disturbing. Walter Benjamin famously proclaimed Paris the capital of the 19th century. New York, embodying America's glory days, was surely the capital of the 20th century. Who doubts that Shanghai will be the capital of the 21st century?

Today, the U.S. economy is in free fall, returning to the worst of Gilded Age obscenities. America's post-WWII prosperity developed out of nearly two decades of Depression and world war. Luce's American Century took root when private corporations were weak, still vestigial organs of war-capitalism, ultimately rejuvenated through massive federal financing.

Is America poised to enter an era that can only be conceived as post-modern feudalism? Are we witnessing the nation state and the private corporation being replaced by a global oligarchy that rules as malevolently as the nobility of old?

David Rosen is the author of 'Sex Scandal America: Politics & the Ritual of Public Shaming' (Key, 2009). He can be reached at drosen@ix.netcom.com.

Mc CLATCHY

Study: Many college students not learning to think critically

By Sara Rimer, The Hechinger Report | The Hechinger Report

NEW YORK — An unprecedented study that followed several thousand undergraduates through four years of college found that large numbers didn't learn the critical thinking, complex reasoning and written communication skills that are widely assumed to be at the core of a college education.

Many of the students graduated without knowing how to sift fact from opinion, make a clear written argument or objectively review conflicting reports of a situation or event, according to New York University sociologist Richard Arum, lead author of the study. The students, for example, couldn't determine the cause of an increase in neighborhood crime or how best to respond without being swayed by emotional testimony and political spin.

Arum, whose book "Academically Adrift: Limited Learning on College Campuses" (University of Chicago Press) comes out this month, followed 2,322 traditional-age students from the fall of 2005 to the spring of 2009 and examined testing data and student surveys at a broad range of 24 U.S. colleges and universities, from the highly selective to the less selective.

Forty-five percent of students made no significant improvement in their critical thinking, reasoning or writing skills during the first two years of college, according to the study. After four years, 36 percent showed no significant gains in these so-called "higher order" thinking skills.

Combining the hours spent studying and in class, students devoted less than a fifth of their time each week to academic pursuits. By contrast, students spent 51 percent of their time — or 85 hours a week — socializing or in extracurricular activities.

The study also showed that students who studied alone made more significant gains in learning than those who studied in groups.

"I'm not surprised at the results," said Stephen G. Emerson, the president of Haverford College in Pennsylvania. "Our very best students don't study in groups. They might work in groups in lab projects. But when they study, they study by themselves."

The study marks one of the first times a cohort of undergraduates has been followed over four years to examine whether they're learning specific skills. It provides a portrait of the complex set of factors, from the quality of secondary school preparation to the academic demands on campus, which determine learning. It comes amid President Barack Obama's call for more college graduates by 2020 and is likely to shine a spotlight on the quality of the education they receive.

"These findings are extremely valuable for those of us deeply concerned about the state of undergraduate learning and student intellectual engagement," said Brian D. Casey, the president of DePauw University in Greencastle, Ind. "They will surely shape discussions about curriculum and campus life for years to come."

Some educators note that a weakened economy and a need to work while in school may be partly responsible for the reduced focus on academics, while others caution against using the study to blame students for not applying themselves.

Howard Gardner, a professor at Harvard's Graduate School of Education known for his theory of multiple intelligences, said the study underscores the need for higher education to push students harder.

"No one concerned with education can be pleased with the findings of this study," Gardner said. "I think that higher education in general is not demanding enough of students — academics are simply of less importance than they were a generation ago."

But the solution, in Gardner's view, shouldn't be to introduce high-stakes tests to measure learning in college because, "The cure is likely to be worse than the disease."

Arum concluded that while students at highly selective schools made more gains than those at less selective schools, there are even greater disparities within institutions.

"In all these 24 colleges and universities, you have pockets of kids that are working hard and learning at very high rates," Arum said. "There is this variation across colleges, but even greater variation within colleges in how much kids are applying themselves and learning."

For that reason, Arum added, he hopes his data will encourage colleges and universities to look within for ways to improve teaching and learning.

Arum co-authored the book with Josipa Roksa, an assistant professor of sociology at the University of Virginia. The study, conducted with Esther Cho, a researcher with the Social Science Research Council, showed that students learned more when asked to do more.

Students who majored in the traditional liberal arts — including the social sciences, humanities, natural sciences and mathematics — showed significantly greater gains over time than other students in critical thinking, complex reasoning and writing skills.

Students majoring in business, education, social work and communications showed the least gains in learning. However, the authors note that their findings don't preclude the possibility that such students "are developing subject-specific or occupationally relevant skills."

Greater gains in liberal arts subjects are at least partly the result of faculty requiring higher levels of reading and writing, as well as students spending more time studying, the study's authors found. Students who took courses heavy on both reading (more than 40 pages a week) and writing (more than 20 pages in a semester) showed higher rates of learning.

That's welcome news to liberal arts advocates.

"We do teach analytical reading and writing," said Ellen Fitzpatrick, a history professor at the University of New Hampshire.

The study used data from the Collegiate Learning Assessment, a 90-minute essay-type test that attempts to measure what liberal arts colleges teach and that more than 400 colleges and universities have used since 2002. The test is voluntary and includes real world problem-solving tasks, such as determining the cause of an airplane crash, that require reading and analyzing documents from newspaper articles to government reports.

The study's authors also found that large numbers of students didn't enroll in courses requiring substantial work. In a typical semester, a third of students took no courses with more than 40 pages of reading per week. Half didn't take a single course in which they wrote more than 20 pages over the semester.

The findings show that colleges need to be acutely aware of how instruction relates to the learning of critical-thinking and related skills, said Daniel J. Bradley, the president of Indiana State University and one of 71 college presidents who recently signed a pledge to improve student learning.

"We haven't spent enough time making sure we are indeed teaching — and students are learning — these skills," Bradley said.

Christine Walker, a senior at DePauw who's also student body president, said the study doesn't reflect her own experience: She studies upwards of 30 hours a week and is confident she's learning plenty. Walker said she and her classmates are juggling multiple non-academic demands, including jobs, to help pay for their education and that in today's economy, top grades aren't enough.

"If you don't have a good resume," Walker said, "the fact that you can say, 'I wrote this really good paper that helped my critical thinking' is going to be irrelevant."

(This article was produced by The Hechinger Report, a nonprofit, nonpartisan education-news outlet affiliated with Teachers College, Columbia University.)