These people make me sick, too

These people make me sick, too. As Paul Krugman said in his column today, there's no reason to believe our government cannot confront our various crises (healthcare, the economy, and the environment) and investigate and litigate Bush administration war crimes at the same time. Our representatives in the House and Senate, as well as Justice department officials, are big boys and girls. We shouldn't sell them short. Additionally, we are a nation of laws. If Bush administration officials violated American and/or international law, as they clearly did, our system of justice demands they be prosecuted.

Unfortunately, refusal to prosecute the Bushies has nothing to do with concerns about the capacity of our government to multi-task. Any thoroughgoing look into Bush administration crimes will make a lot of people uncomfortable, most especially journalists, democratic politicians and other supposed "progressives," who enabled and/or actively supported the illegal acts of our chief executive. Obama clearly doesn't want to get his hands dirty and many in the Senate likely don't want to revisit their own dispicable behavior. In a nation of laws, these things ought not to matter. On many occasions, enforcement of U.S law frankly ruins people's lives. For instance, when ICE deports undocumented immigrants, they frequently break up families and destroy communities. When local judges enforce mandatory minimums and throw young black men in jail for selling a vile of heroin, they often condmen these men to entire lives in and out of prison. Nonetheless, ICE officials and local judges do it anyway, because it's the law. Such is the justice system for the poor and marginalized in our society: small crimes, often committed out of despair, bring huge punishments. In the Washington bubble, however, the law takes a backseat to the reputations and careers of pompous journalists and hack politicians. By refusing to act, Reid, Obama and company are blatantly violating the law, not to mention areappeasing crimes against humanity.

Mr. President, once again I'm very dissapointed. The ugliness of our nation's elite, and the moral bankruptcy of our supposed "justice" system, are on full display today.

These people make me sick

Wow, these people are absolutely ridiculous. According to many of the leading lights in the GOP, our government would be behaving like a corrupt Latin American dictatorship if we prosecuted Bush administration officials for torture. Ignore the fact that many, if not most, leading Bush administration officials violated American and international law by authorizing torture. If we go down that dangerous path towards prosecuting people who break the law, America will become no better than a Banana Republic. Like I said, wow.

Let's be honest, these remarks reach new levels of Orwellian insanity, even for Karl Rove. Furthermore, it's especially offensive for folks like John McCain, who have long supported sunglasses-wearing dictators and subverted democracy in Latin America, to make statements about the US becoming a "Banana Republic". What's the matter John, strongman rule works for Haiti or Venezuela but not for the USA?

These people make me sick.

Two great pieces on Somalia

Most of the mainstream discourse on Somalia and the Somali pirates is disastrously misinformed. If you're interested in learning more about this tortured African nation, please check out these two great pieces that came out this week:

"Analysis: Somalia Piracy Began in Response to Illegal Fishing and Toxic Dumping by Western Ships off Somali Coast" from last Tuesday's Democracy Now

and

"Obama and Somalia," written by Bill Fletcher Jr., which appeared in Black Commentator and on Znet.

Ah, more wisdom from Tom Friedman

According to his most recent New York Times Op-Ed, columnist Tom Friedman is currently down here in Costa Rica on a little "eco-vacation". Welcome to the rich coast, Tom! To be honest though, I'm a little disappointed to learn that you're here via your newspaper column. You couldn't have a least sent an email or posted on my facebook wall to let me know you're down here? Well, I suppose you're a pretty busy man, so I'll give you pass on not getting in touch with me just this once. I better get an invite to your memorial day party this year though. That pad of yours in Bethesda is pretty sweet.

All kidding aside, the subject of Friedman's column is Costa Rican environmental policy, and the nation's much-vaunted commitment to sustainability. What most impresses Mr. Friedman about Costa Rica, in his own words, is the widespread belief among the nation's policymakers that "economic growth and environmentalism work together". Among Costa Rica's pro-growth and pro-environment policies touted by Friedman are its Carbon tax, which goes to a "national fund to pay indigenous communities for protecting their forests," its tax on water, "whereby major users [such as agribusiness]...have to pay villagers upstream to keep their rivers pristine," it's 5-year old ban on oil drilling, the government's aggressive promotion of renewable electricity, and its consolidation of energy, the environment, and mining under a single government ministry.

Some of Friedman's elaborate praise for Costa Rica is valid. The country's ban on oil drilling was indeed a very wise, far-sighted decision, as the country possesses little oil to begin with and drilling would merely pollute the country's beautiful Caribbean beaches. I find it hard to argue with compensating local communities for protecting their forests. It's a terrific idea, and ought to be expanded. Further, the decision of the state-owned power company, the Costa Rican Electricity Institute (ICE in Spanish), to continually expand renewable electricity production was great from an economic perspective. As Friedman mentions in his article, renewable electricity is the cheapest form of electricity, and Costa Ricans enjoy just about the lowest electric rates in all of Latin America (this also has a lot to do with the fact that electricity is publicly and not privately controlled, but we'll talk about that some other time).

Unfortunately, as you probably expected, Friedman is generally misguided in his assessment of Costa Rica's environmental record. This should not be a surprise to anyone, as Thomas Friedman is generally misguided about most things. What Friedman regards as the country's greatest strength--the view among its elite that growth and conservation go hand in hand--is I believe Costa Rica's greatest weakness. The fact of the matter is, often times the interests of industry and the pursuit of economic growth do not coincide with the goal of environmental preservation. When the interests of industry and the environment inevitably come into conflict, the Costa Rican government, like any other government, is faced with a choice: are we in favor of profits or the climate? Or just as often, are we in favor of profits or the people? Here in Costa Rica, the answer is almost always profits. Unfortunately, it's very much unlike the Costa Rican government to challenge the interests of powerful economic groups. As such, the reality behind the Costa Rican government's soaring environmentalist rhetoric is often rather ugly. For instance, Costa Rica has the highest deforestation rate in all of Latin America. Costa Rican farmers also use more gallons of pesticides per acre than farmers in any other nation in the hemisphere (see page 14 of linked article).

If my buddy Tom took some time to catch up on current events in Costa Rica, rather than relying exclusively on the testimony of a single government official, he would have likely come across an article or two about one of the myriad resource conflicts between industry and local communities which have taken place here over the past year. He wouldn't even have to learn Spanish to read about these struggles, as most of these cases have been extensively covered in the Tico Times, an English-language weekly oriented towards the sizeable North American expat community in Costa Rica. Had he done so, I hope he would have come to at least slightly different conclusions. Industries which have provoked conflicts with nearby communities include mining, tourism, and agribusiness/industrial fruit production and the federal government has taken the side of big business in every one of them. In my humble opinion, the most flagrant case of all of these is the government's treatment of the pineapple industry.

Anyone interested in learning more about Costa Rican pineapples can check out my blog post from last November about this issue. In a nutshell, the pineapple industry has grown rapidly in Costa Rica over the past ten years. From 2000 to 2007, land under pineapple cultivation grew over 200%, from 30,000 to 95,000 acres. From 2001 to 2008, the value of pineapple exports grew 294%, from $142 million to $560 million a year. As a result of this massive growth, Costa Rica is now the number 1 producer of fresh pineapples in the world and supplies more than 8 out of every 10 pineapples consumed in the United States. The primary beneficiaries of this explosive growth have been transnational fruit conglomerates Del Monte and Dole, which control most pineapple production, much of the processing of the fruit, and nearly all export operations. Unfortunately, however, the environmental impact of the industry has been utterly disastrous. Forests have been clear cut to make way for more pineapple plantations, soils have been depleted of their nutrients, and most importantly, rivers and aquifers which Costa Ricans rely on for drinking water have been contaminated with carcinogenic pesticides, including Bromacil and Terbufos.

How is it possible that the industry has done so much damage? The answer is that its growth has been almost entirely unregulated. Costa Rica has among the most progressive environmental legislation in the world. For instance, it is illegal for farmers to plant within 200 square meters of community water sources and companies must file environmental impact reports before comencing operations. However, when Costa Rican law comes into conflict with the desires of Dole and Del Monte, it has simply not been enforced. I have seen with my own eyes plantations located less than 10 meters from acquifers which supply water to thousands of Costa Ricans. Most plantations have not carried out environmental impact studies of any kind. In the rare occasion that studies are carried out, they're often done months after planting has begun and they are at times fradulent. The impact study for one plantation on the Caribbean coast, for instance, spoke of bird species that don't even exist in Costa Rica but was nonetheless approved by the government. Friedman's claim that Costa Rica's water tax ensures that rivers upstream from agribusiness operations remain "pristine" is simply laughable. Instead, they're often chock full of chemicals as well as extensive sedimentation caused by runoff from pineapple, banana, and other plantations.

Thankfully, the people of Costa Rica have not taken abuse from the pineapple industry sitting down. Rather, communities around the country have mobilized to oppose further expansion of the industry and demand that its growth be subject to public control. Last year, several community groups formed an umbrella organization called the National Front of Sectors Affected by Pineapple Expansion. You can check out their terrific website here. Sergio Porras, head of the pineapple program at the Costa Rican Ministry of Agriculture has dismissed these activists as senseless "radicals" bent on destroying an industry which employs thousands of people. Despite being looked down upon by the national government, they have gotten the attention of many throughout the country and have successfully forced two municipalities in the Caribbean province of Limon to impose moratoria on new plantations.

Anyways, what I'm trying to say is that the reality of environmental policy in Costa Rica is a lot less pretty than Tom Friedman makes it out to be. Development and the environment do come into conflict and the result is often ugly. Fortunately, though, there are many dedicated activists throughout the country looking to change that. Here's to hoping that the National Front of Sectors Affected by Pineapple Expansion and other community groups enjoy more and more victories in the future.

Cause for revolt

Change we can believe in? Though they'll try to convince us otherwise, the new Geithner/Obama bailout plan is just a more complicated version of the original Paulson/Bush TARP proposal released last September.

While the administration intends to formally announce the plan tomorrow, the details of the Geithner/Obama bailout plan were leaked to the New York Times last Friday. The plan is rather complicated and I won't pretend to understand all the details. Nonetheless, Yves Smith at Naked Capitalism has provided a more or less understandable analysis of the plan. From what I can tell from the Times article and the Smith analysis, the Geithner plan includes three main parts. Firstly, the FDIC will provide loans to private investors like hedge funds and private equity firms to encourage them to purchase "toxic" assets. The loans will be equal to 85% of the value of said assets and backed "only by the value of mortgage assets being bought," according to the Times. I believe these loans are basically, in the words of Paul Krugman, "heads I win, tails you lose" propositions. In other words, if the prices of these assets go up, private investors will reap profits. If they fall, the taxpayer will pick up the tab. In part two of the plan, the treasury department, drawing on the remaining $350 billion in taxpayer dollars allocated for TARP, in conjunction with private investors, will cover the remaining 15% of the value of these assets. According to the New York Times piece, treasury will likely contribute 80% of the remaining 15% share and private investors will contribute about 20%. All told, private investors will contribute about 3% of the cash under this plan and the taxpayer will be on the hook for the remaining 97%. In the third and final piece of the plan, the Treasury "plans to expand lending through the Term Asset-Backed Secure Lending Facility, a joint venture with the Federal Reserve". This program is intended to make it easier for consumers to get loans. The administration assures us that the taxpayer will be protected from overpaying for toxic assets because the banks will "bid in auctions against each other for the assets". As a result of this process, they contend that the government will pay far below the original market value for these assets.

Without a doubt, this plan is just plain awful. In proposing this plan, Obama and his economic team have revealed themselves to be one of two things: utterly incompetent or a bunch of duplicitous liars trying to pull a fast one on the American people. Unfortunately, most of the evidence points towards the latter, but let's start with the incompetence of the plan.

To begin with, the Obama economic team has fundamentally misdiagnosed the problems facing the financial system. According to Paul Krugman's most recent blog post, the administration remains captive to the idea that over the past year or so, we've been experiencing a run on basically sound banks. This bank run has drove down the price of assets and got the banks in trouble, but in the view of Obama's economic team, there's nothing fundamentally wrong with the bank's balance sheets. In the minds of Geithner, Summers, Bernake etc, "there are no bad assets. Only misunderstood ones". As such, intervening in the markets to stabilize and correct the price of the banks' "misunderstood assets" will solve the problem. Unfortunately, as ought to be evident to pretty much anyone, the banks are not fine and their troubled assets, which are largely mortgage-related securities, are not misunderstood, they're just plain bad. As Dean Baker frequently points out, we are and have been experiencing the collapse of an $8 trillion housing bubble. Due to the collapse of housing prices, the related rise in foreclosures, and the epidemic of negative equity facing millions of Americans, the market regards mortgage-backed securitites as basically worthless and of course, they're right. Further, housing prices in many areas of the country still need to fall an additional 20% or so to reach historic trend levels, so the actual value of these assets will inevitably continue to fall. As such, the FDIC and Treasury will end up overpaying for assets, the real value of which will continue to slide downwards, costing the taxpayer billions of dollars. Yet, even after we've propped up the banks with more subsidies, many of them will still be insolvent. They've just made too many bad bets.

As for the duplicitousness of this plan, the examples are myriad. Firstly, as Yves Smith points out, the billing of this plan as a public private partnership is maddeningly Orwellian. In her own words, "Since when is someone who puts 3% of total funds and gets 20% of the equity a "partner"?". There is very little private and very little partnership in this plan but there's an awful lot of public money and public risk.

The unnecessary complexity of this plan is also disturbing. By developing a Rube-Goldberg machine-like bailout plan with lots of moving parts, the administration seems to trying to hide an essential fact: that it's really just a repackaged version of the original Henry Paulson bailout plan proposed last September. The goals are the same: get the bad/toxic/troubled/misunderstood assets off the banks' balance sheets, as are the means: use public dollars to pay above market prices for these assets. The central component of the plan, the "heads you win, tails you lose" loans to hedge funds worth 85% of the value of these assets, is the functional equivalent of just buying the assets outright from the banks. Geithner et all are just adding another step to the process, by routing the money through private equity funds and hedge funds rather than just buying the assets outright. Although they totally missed the housing bubble and have demonstrated monumental incompetence elsewhere, we can be pretty sure that Geithner, Summers, and everyone else involved are well aware of this fact. These folks only tend to be incompetent when competence threatens the profits of America's bloated financial sector.

Finally, the administration's argument that competitive bidding will keep the taxpayer from overpaying for bad assets is probably the most despicable and bald-faced lie of all. According to Yves Smith, the reality of these auctions is the exact opposite. Banks simply won't agree to sell these assets unless they get what they think they are worth, which is by definition an above-market price (if this were not the case, they would've already been able to get ride of them). Thus,

the point of a competitive process (assuming enough parties show up to produce that result at any particular auction) is to elicit a high enough price that it might reach the bank's reserve, which would be the value on the bank's books now.

And notice the utter dishonesty: a competitive bidding process will protect taxpayers. Huh? A competitive bidding process will elicit a higher price which is BAD for taxpayers!

A plan which the administration claims will protect the taxpayer but in fact does the exact opposite! This sounds a lot like the Clear Skies Act and other Bush administration antics to me. Rational observers have long known that Obama is no radical and not even especially progressive, but I honestly never expected such open deceit would emanate from his office as president.

On top of revealing that the Obama economic team (which includes President Obama of course) is a midly incompetent and highly duplicitous bunch with a disturbingly low opinion of the American people, the new bailout plan also rewards all the wrong people and creates some pretty perverse incentives. Unlike nationalization, which is the only sensible solution to the financial crisis, this plan leaves the criminal management of the banks in place. Apparently, the Obama administration would like to continue rewarding the same folks who got us into this mess with even more cash. The "heads I win, tails you lose" loans to hedge funds also encourage them to make risky bets without bearing any of the consequences. And do we really want to funnel any more money into private equity firms and hedge funds, which, as Juan Gonzalez often points out on Democracy Now, are even less transparent and more dangerous than investment banks? I certainly don't think so.

More than anything, this plan reveals that the Obama administration cares more about the banks and their executives than the American people. We should all do everything we can to voice our opposition to it. In electing President Obama, the American people thought they were voting for change, not 4 more years of Bush-era, failed policies. Yet, when it comes to financial policy, team Obama has done absolutely nothing to distinguish itself from team Bush. In fact, in some ways the Obama administration has been worse. At least when Paulson released his plan for bailing out failed banks with taxpayer dollars back in September, he was basically upfront about it. Instead, the Obama team has developed an excessively complex plan to mask their true intentions. I know it's a little dramatic to say so, but this is a sad day for American democracy.

Cause for celebration

Yes!

"This is the defeat of Ronald Reagan, nothing less."
-Roberto Lavato, Salvadoran-American and Contributing Associate Editor with New America Media

One thing I forgot to mention

In my recent post about health care reform, I forgot to include one very important point. Not only is single payer the most efficient and equitable means of financing health care, it's also quite popular. Numerous polls have demonstrated that the majority of Americans support government-financed, universal health insurance. In general, polls conducted over the past two years show that approximately two thirds of Americans would prefer single payer over the current system. Surprisingly, this level of support holds true even if switching to single payer would require a tax increase. (In a May 2007 poll conducted by CNN, 64% of the survey population responded "yes" to the question: "Do you think the government should provide a national health insurance program for all Americans, even if this would require higher taxes?".) The majority of health care providers also support single payer. The largest union of Registered Nurses, the California Nurses Assocation-National Nurses Organizing Committee, strongly supports national health insurance. 59% of physicians, up from just 49% in 2002, support it as well.

Given that large majorities of both consumers and providers of health care support single payer national health insurance, a majority, or at least a large portion, of our representatives in Congress ought to support single payer as well. That is, of course, if you believe congressional representatives ought to represent the views of their constituents. Likewise, single payer health insurance should have been vigorously debated as a serious option for the United States at the recent Obama administration-sponsored health care summit, if in fact "all options are on the table," as the President claims. Furthermore, single payer ought to be widely discussed in the media and advocates of single payer should be given extensive time and space on television and newspaper op-ed pages to make the case for national health care. Unfortunately, this is not the case in any of these instances.

The bill to create a single payer health insurance system, HR 676, currently has 93 co-sponsors in the House. In other words, about 1/5 of the "people's house" supports a bill that about 2/3 of Americans support. There is no single payer legislation currently in the Senate at all, though Russ Feingold (at least at one point) and Bernie Sanders are supporters. Apparently it's difficult to stand with the people, rather than with the corporations, when you have to finance increasingly expensive state-wide elections every six years. At first, not a single advocate of single payer was invited to Obama's health care summit, but in response to intense grassroots presure, Obama relented and allowed John Conyers (D-MI), the congressional sponsor of HR 676, and Dr. Oliver Fein, the director of Physicians for a National Health Plan (PNHP), to attend. Nonetheless, according to The Nation's John Nichols, neither Conyers nor Fein were allowed to give speeches at the event, while representatives from the U.S. Chamber of Commerce, Blue Cross Blue Shield Association, and the Business Roundtable were. None of these organizations support single payer and none of the speakers at the event did either. Apparently the "we" in "Change We Can Believe In" excludes the American people.

Media coverage of single payer has been similarly representative. In a report released yesterday, the media watchdog group Fairness and Accuracy in Reporting (FAIR) argues that there has been a "media blackout on single payer". According to FAIR, there have been hundreds of stories in major national newspapers and on television over the past week on health care and health care reform, "yet all but 18 of these stories made no mention of "single-payer"(or synonyms commonly used by its proponents, such as "Medicare for all," or the proposed single-payer bill, H.R. 676)". In the rare event that single payer or its synonyms were even mentioned, it was often done so disapprovingly. Only 5 stories of the 18 stories which mention single payer included the views of single payer advocates, all of which appeared in print. Of the 10 op-ed pieces that appeared last week which mentioned single payer, 5 were a column written by Charles Krauthammer, originally published in the Washington Post and reprinted 4 times, which lampoons the concept of national health insurance. On the other hand, "socialized medicine," the misleading term preferred by opponents of single payer, appeared 7 times on television. (If medicine were truly socialized, both the financing and delivery of health care would be in the hands of the government, as in the case in the National Health Service (NHS) in Britain. In contrast, single payer, as envisioned in HR 676, would mean government financing but private delivery of health care, as is the case in Canada or in Medicare for elderly Americans. Basically no organization in the U.S., to my knowledge, advocates making doctors employees of the government). In fact, according to the FAIR study, "socialized medicine" is CNN chief medical correspondent Elizabeth Cohen's term of choice when describing basically any additional government involvement in health care, whether the example is Bill Clinton's attempted health care reform from 1994, the Canadian national health care system, or the British NHS. Thank you Dr Cohen (Ms. Cohen?) and the rest of the media for doing such a great job keeping us informed.

The disparity between widespread public approval of single payer and even more widespread disdain for single payer among our nation's political and opinion elite is a glaring case of what David Sirota aptly calls the rootsgap; sadly, on most important issues, public opinion and elite opinion are diametrically opposed. This gap will make overhauling our disastrous health care system particularly difficult. Nonetheless, grassroots activism has already achieved some victories. For instance, if it were not for pressure from PNHP, pro-single payer labor unions, and other activists, voices for single payer would not have been been included in President Obama's health care summit. We have to keep at it, and I'm confident that those same folks will continue doing everything they can to advance the cause of a just and efficient health care system. Hopefully the FAIR study will shame some of the media into changing their ways as well. In particular, I'd like Bill Moyers, Tavis Smiley, Rachel Maddow, and/or Keith Olberman to step up on this issue. Come one guys, let's see a panel discussion on health care on your shows which include single payer advocates! Let's see one of you bring the facts into this debate, like the CBO study on cost savings from shifting to single payer or any of the myriad public opinion polls. Jon Stewart of Steven Colbert could do a lot to ensure that all voices are heard in this debate as well. Please, invite David Himmelstein, Rose Ann Demoro, or John Conyers on your programs! Or why not my man Dennis Kucinich or America's favorte documentarist, Michael Moore! There's no shortage of smart, dedicated people on the right side of this issue. They just need to be given a chance to speak out. So please, just give single payer a chance!