Wednesday April 22, 2009

The cheerleaders for America's toxic boom want us to bail out US banks. They were wrong then - and are wrong now

by Dean Baker
It is often said that the there are few forces as destructive as the power of bad economics. Rarely has this been more clearly demonstrated than in the current crisis.
While the bankers' greed fed the housing bubble, the incompetence and corruption of the economics profession allowed the world's largest financial bubble to grow unchecked, until its inevitable collapse wrecked the economy. Remarkably, the economists who got everything wrong as the bubble was expanding [1], are still being given the opportunity to get everything wrong as we try to dig out from the wreckage.
Even though most of the "best" economists in the world did not see it [2], the story of the bubble and its collapse was in fact extremely simple. The recovery from the stock market crash in 2001 was driven by the growth of the housing bubble.
In the United States [3], the unprecedented run-up in house prices fueled the economy by causing a construction boom, and even more importantly, a consumption boom, as the saving rate fell to zero. While many prominent economists lectured the country on the need to save and to end spendthrift ways, those who knew economics pointed to the well-known housing wealth effect [4].
Households spend in part based on their housing wealth. The predictable result of the creation of $8tn in housing bubble wealth ($110,000 per homeowner) was a massive consumption boom on the order of $400bn to $600bn a year. The problem was not people's spendthrift ways; the problem was that economic policymakers allowed a huge bubble [5] to develop. People treated this bubble wealth as real wealth, and responded exactly as economic theory would predict: they spent like crazy.
With house prices falling rapidly back to earth, the housing construction boom is now a bust and saving rates are returning to normal. The economy is also experiencing a collapse in a non-residential real estate bubble that developed up in the wake of the housing bubble. There has been huge overbuilding in retail, office space, hotels, and most other categories of non-residential construction.
This backdrop in extremely important in assessing the "fix the banks" battle cry of the economists who did not see the housing bubble. The word from this distinguished group is that if we can get the banks lending again, then the economy will be on its way to recovery. Coincidentally, the central ingredient in their formula is throwing hundreds of billions, or even trillions, of taxpayer dollars at the banks. In other words, they want to impose huge taxes on ordinary workers to give more money to the people who were most directly responsible for the propelling the bubble.
The elite economists tell us that even if this idea might offend our sensibilities, it is the only way to get the economy going again. This is where a little basic economics would be useful again.
Suppose we snap out fingers and bring Citigroup, Bank of America and the rest of the zombies back to full solvency; what would happen? Is there any reason to believe that consumers will spend more? Remember the housing wealth effect? The bubble wealth is gone; people are spending less because they don't have the wealth to justify the spending. We are seeing the sort of consumer spending levels that we should expect to see in the absence of a housing bubble. What part of this story can't the elite economists understand?
Let's turn to construction. If we fix the banks, will we see more housing construction in a glutted housing market? Will we see further overbuilding of office space and retail space? Presumably the answer to these questions is no. Fixing the banks will have little effect on either residential or non-residential construction.
Maybe fixing the banks will revive investment in equipment and software? When considering this possibility, it is important to remember that large healthy companies such as Intel, Verizon and IBM are already able to borrow money both long-term and short-term at very low rates. Therefore, investment by these companies is not likely to be affected much by fixing the banks.
This leaves investment in equipment and software by smaller, less creditworthy companies. Undoubtedly many of these companies are experiencing difficulty getting access to capital right now. Part of the problem is due to the fact that these firms look like very bad credit risks in the middle of a steep recession, but part of the problem is due to the condition of the banks.
So, if we snap our fingers and the banks are now fixed, these smaller firms will suddenly be in a position to invest more. Equipment and software investment accounts for 7% of GDP. If we generously assume that the capital-starved small firms account for half of this investment, and that the bank fix will boost their investment by 50%, then throwing money at the banks will increase investment by an amount equal to 1.75% of GDP an amount that is approximately equal to half the falloff in housing construction, and less than a quarter the total drop in demand due to the collapse of the housing bubble.
In other words, the arithmetic shows that a bank fix, while desirable, cannot possibly be sufficient to offset the collapse of the housing bubble. If our priority is to save the bankers from suffering the consequences of their own mistakes, then it makes sense to throw all our money at them. But if the point is to fix the economy, then we have to look elsewhere.
Those of us who know economics recognise this fact. Those who insist on the bank-fix route should be asked one simple question: "When did you stop being wrong about the economy?"
Dean Baker [6] is the co-director of the Center for Economic and Policy Research [7] (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer [8] ( www.conservativenannystate.org [9]) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy [10]. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

Published on Tuesday, April 21, 2009 by The Nation
Fresh Food Revolution
by Mark Hertsgaard
When Michelle Obama began planting an organic garden [1] on the South Lawn of the White House recently, there was no doubt she was sending a message, but the message was more subversive and far-reaching than most American media coverage recognized. On March 20, joined by a class of local fifth graders, the first lady lifted the first shovels [2] of dirt onto a 1,100-square-foot plot that will feature fifty-five kinds of vegetables, including spinach, peppers, arugula, kale, collards and tomatoes (but no beets--the president reportedly does not like beets). Various herbs and berries will also be grown in the garden [3], which is fully visible to the thousands of tourists and other pedestrians that pass by the White House daily. (There will also be two boxes of bees for pollination.)
Michelle Obama's stated message was simple and was clearly aimed at her fellow Americans: fresh food tastes better and is better for you, so kids and grown-ups alike should eat lots more of it. "A real, delicious heirloom tomato is one of the sweetest things you'll ever eat," she told the 10-year-olds, adding that freshly picked vegetables were what prompted her daughters to try new kinds of foods.
What made Obama's message so subversive was something she left unsaid: the food most Americans eat nowadays is not fresh, tasty or healthy. The superiority of fresh ingredients may be obvious to Italians, but it is a truth most Americans long ago forgot, if they ever knew it in the first place. Over the past fifty years, the United States has been transformed into a fast food nation [4], in author Eric Schlosser's phrase. What the typical American eats is not so much food as it is highly processed food derivatives that have traveled thousands of miles since leaving the farm, losing along the way most of the flavor and nutritional value they once possessed. To disguise such losses, food manufacturers overload products with fats, salts and sweeteners, especially corn syrup--additives that, along with the massive portions typically served in the United States, help explain why nearly one in three Americans is obese [5].
Now, by publicly championing fresh local food, Michelle Obama clearly hopes to entice Americans away from their junk food past to a healthier, more delicious future. And that is what makes her message so far-reaching. Change America's eating habits and you can change the world.
Shifting to a greener diet would be good not only for the health of America's children and families but the health of the planet. The American diet, and the food production and distribution system that supports it, is one of the main drivers of global warming and a host of related hazards, from deforestation to air, soil and water pollution. Most people know by now that our civilization must fundamentally change the way it produces and consumes energy if we are to stop global warming. Far fewer people realize that it is equally important to change the way we produce and consume food.
As currently constituted, the global food system is a climate killer. Coal-fired power plants and gas-guzzling vehicles get more criticism, but farms, restaurants and supermarkets are bigger culprits. Globally, the agricultural sector releases more greenhouse gases than any activity on earth except for constructing, heating and cooling buildings. Agriculture's large greenhouse footprint is due mainly to its heavy reliance on fossil fuels to grow and transport food to market, as well as the increasing popularity of the meat-rich American diet. Meat production accounts for 18 percent of global emissions, according to the UN Food and Agricultural Organization, in part because livestock emit large amounts of methane, an exceptionally potent greenhouse gas.
Humanity cannot hope to halt global warming unless emissions from the food sector are cut dramatically. This suggests that food should be high on the agenda during the discussions leading up to the crucial meeting in December in Copenhagen, where the world's governments will negotiate the next round of emissions cuts. Yet so far food has gotten little attention, with one notable exception. In September, Rajendra Pachauri, the chair of the Intergovernmental Panel on Climate Change, attracted a brief spasm of media coverage when he urged people to consider eating less meat [6] as a way to combat climate change.
"Given that industrial agriculture is one of the major contributors of greenhouse gas emissions, it's astonishing that international climate negotiations overlook both its impact and its potential contribution toward mitigation, as well as adaptation," says Debi Barker, international program director of the Center for Food Safety, an NGO in Washington. Barker argues that many NGOs are also overlooking the links between agriculture and climate change, a shortcoming her organization is trying to rectify by launching a "Cool Food" campaign [7] to build a global food and climate network of NGOs.
What has gotten attention recently in some government circles is the other half of the food-climate change equation--that is, how climate change threatens food production. As global warming intensifies in the years ahead, scientists say, temperatures will rise, droughts will deepen and pests will become more pervasive. In China, recent studies [8] have concluded that yields of wheat, corn and rice could decrease by 37 percent in the latter half of the century if adaptation measures are not implemented. Since China is the world's leading producer of wheat and rice, such shortfalls could drive up prices on the world market, with the result that poor people worldwide, especially mothers and children, will be unable to afford enough to eat. The best response is a shift to more organic farming and so-called ecological agriculture, says a new report [9] issued by Greenpeace China and lead author Lin Erda, one of China's most eminent climate scientists. Reducing the use of chemical fertilizers, shifting to no- or low-till forms of cultivation and combing duck ponds with rice paddies not only reduces the greenhouse gas emissions associated with agriculture, the report points out, it also makes the agricultural system more resilient against drought, pests and other inevitable impacts of climate change. John Beddington, chief science adviser to the British government, warned in March that climate change and population growth together could produce a "perfect storm" [10] of devastating food, water and energy shortages by 2030. Days later, Nina Fedoroff, chief science adviser to Secretary of State Hillary Clinton, said [11] that if nothing were done, a billion people could face famine in the twenty-first century and even wealthy countries like the United States and Britain would struggle to feed their people.
But there are solutions, even for the poorest of places. Some of the most encouraging stories come from Africa, the continent climate change will hit hardest. In Niger, villagers have invested in rejuvenating [12] parched soils and ravaged forests with remarkable results: despite recurring drought, greenery has returned to the villages, bringing with it water supplies, food production and higher incomes. In China, the United States and other big producing nations, boosting the efficiency of notoriously wasteful irrigation systems could save more water than climate change threatens to disperse. Vaclav Smil, a professor at the University of Manitoba and a leading expert on China's environmental challenges, predicts the Chinese "will be able to feed themselves for many years to come," in part because their wastefulness offers so much scope for making technological improvements. 
And of course there is Michelle Obama's idea of planting a garden, which history shows can have powerful effects. During World War II, Eleanor Roosevelt urged Americans to join her in planting backyard "victory gardens" so that US farmers could concentrate on supplying food to allied forces. Despite initial opposition from the Department of Agriculture, her idea struck a chord with the public; by the end of the war, victory gardens were producing nearly half of the fruit and vegetables eaten by Americans. If Obama's organic garden proves equally inspiring, she could spark a new green revolution--and not a moment too soon.

On Earth Day, Forget About the Planet -- We're the Ones Who Are Screwed

By Joseph Romm, Climate Progress
Posted on April 22, 2009, Printed on April 22, 2009

Dumping Earth Day has been on my mind for a year now -- and all the more so today because the NYT magazine just published an interview with our Nobel-prize winning Energy Secretary, Steven Chu, in which he says:
I would say that from here on in, every day has to be Earth Day.
Well, duh!  Heck, we have a whole day just for the trees -- and we haven’t finished them off … yet.  So if every day is Earth Day, than April 22 definitely needs a new name. 
I don’t worry about the earth. I’m pretty certain the earth will survive the worst we can do to it. I’m very certain the earth doesn’t worry about us. I’m not alone. People got more riled up when scientists removed Pluto from the list of planets than they do when scientists warn that our greenhouse gas emissions are poised to turn the earth into a barely habitable planet.
Arguably, concern over the earth is elitist, something people can afford to spend their time on when every other need is met. But elitism is out these days. Only bitter environmentalists cling to Earth Day. We need a new way to make people care about the nasty things we’re doing with our cars and power plants. At the very least, we need a new name.
How about Nature Day or Environment Day? Personally, I am not an environmentalist. I don’t think I’m ever going to see the Arctic National Wildlife Refuge. I wouldn’t drill for oil there. But that’s not out of concern for the caribou but for my daughter and the planet’s next several billion people, who will need to see oil use cut sharply to avoid the worst of climate change.
I used to worry about the polar bear. But then some naturalists told me that once human-caused global warming has completely eliminated their feeding habitat -- the polar ice, probably by 2020, possibly sooner -- polar bears will just go about the business of coming inland and attacking humans and eating our food and maybe even us. That seems only fair, no?
I am a cat lover, but you can’t really worry about them. Cats are survivors. Remember the movie “Alien”? For better or worse, cats have hitched their future to humans, and while we seem poised to wipe out half the species on the planet, cats will do just fine.
Apparently there are some plankton that thrive on an acidic environment, so it doesn’t look like we’re going to wipe out all life in the ocean, just most of it. Sure, losing Pacific salmon is going to be a bummer, but I eat Pacific salmon several times a week, so I don’t see how I’m in a position to march on the nation’s capital to protest their extinction. I won’t eat farm-raised salmon, though, since my doctor says I get enough antibiotics from the tap water.
If thousands of inedible species can’t adapt to our monomaniacal quest to return every last bit of fossil carbon back into the atmosphere, why should we care? Other species will do just fine, like kudzu, cactus, cockroaches, rats, scorpions, the bark beetle, Anopheles mosquitoes and the malaria parasites they harbor. Who are we to pick favorites?
I didn’t hear any complaining after the dinosaurs and many other species were wiped out when an asteroid hit the earth and made room for mammals and, eventually, us. If God hadn’t wanted us to dominate all living creatures on the earth, he wouldn’t have sent that asteroid in the first place, and he wouldn’t have turned the dead plants and animals into fossil carbon that could power our Industrial Revolution, destroy the climate, and ultimately kill more plants and animals.
And speaking of God, Creation Care is also woefully misnamed. If humans are special, invested with a soul by our Creator, along with the right to life, liberty and the pursuit of happiness, then why should we sacrifice even a minute of that pursuit worrying about the inferior species? Sounds to me more like paganism than monotheism.
All of these phrases create the misleading perception that the cause so many of us are fighting for -- sharp cuts in greenhouse gases -- is based on the desire to preserve something inhuman or abstract or far away. But I have to say that all the environmentalists I know -- and I tend to hang out with the climate crowd -- care about stopping global warming because of its impact on humans, even if they aren’t so good at articulating that perspective. I’m with them.
The reason that many environmentalists fight to save the Arctic National Wildlife Refuge or the polar bears is not because they are sure that losing those things would cause the universe to become unhinged, but because they realize that humanity isn’t smart enough to know which things are linchpins for the entire ecosystem and which are not. What is the straw that breaks the camel’s back? The 100th species we wipe out? The 1,000th? For many, the safest and wisest thing to do is to try to avoid the risks entirely.
This is where I part company with many environmentalists. With 6.5 billion people going to 9 billion, much of the environment is unsavable. But if we warm significantly more than 2°C from pre-industrial levels -- and especially if we warm more than 4°C, as would be all but inevitable if we keep on our current emissions path for much longer -- then the environment and climate that made modern human civilization possible will be ruined, probably for hundreds of years.  And that means misery for many if not most of the next 10 to 20 billion people to walk the planet.
So I think the world should be more into conserving the stuff that we can’t live without. In that regard I am a conservative person. Unfortunately, Conservative Day would, I think, draw the wrong crowds.
The problem with Earth Day is it asks us to save too much ground. We need to focus. The two parts of the planet worth fighting to preserve are the soils and the glaciers.
Two years ago, Science magazine published research that “predicted a permanent drought by 2050 throughout the Southwest” -- levels of soil aridity comparable to the 1930s Dust Bowl would stretch from Kansas and Oklahoma to California. The Hadley Center, the U.K.’s official center for climate change research, found that “areas affected by severe drought could see a five-fold increase from 8% to 40%.”  On our current emissions path, most of the South and Southwest ultimately experience twice as much loss of soil moisture as was seen during the Dust Bowl.
Also, locked away in the frozen soil of the tundra or permafrost is more carbon than the atmosphere contains today.  On our current path, most of the top 10 feet of the permafrost will be lost this century -- so much for being “perma” -- and that amplifying carbon-cycle feedback will all but ensure that today’s worst-case scenarios for global warming become the best-case scenarios. We must save the tundra. Perhaps it should be small “e” earth Day, which is to say, Soil Day. On the other hand, most of the public enthusiasm in the 1980s for saving the rain forests fizzled, and they are almost as important as the soil, so maybe not Soil Day.
As for glaciers, when they disappear, sea levels rise, perhaps as much as two inches a year by century’s end. If we warm even 3°C from pre-industrial levels, we will return the planet to a time when sea levels were ultimately 80 feet higher. The first five feet of sea level rise, which seems increasingly to occur this century on our current emissions path, would displace more than 100 million people. That would be the equivalent of 200 Katrinas. Since my brother lost his home in Katrina, I don’t consider this to be an abstract issue.
Equally important, the inland glaciers provide fresh water sources for more than a billion people. But on our current path, they will be gone by century’s end.
So where is everyone going to live? Hundreds of millions will flee the new deserts, but they can’t go to the coasts; indeed, hundreds of millions of other people will be moving inland. But many of the world’s great rivers will be drying up at the same time, forcing massive conflict among yet another group of hundreds of millions of people. The word rival, after all, comes from “people who share the same river.” Sure, desalination is possible, but that’s expensive and uses a lot of energy, which means we’ll need even more carbon-free power.
Perhaps Earth Day should be Water Day, since the worst global warming impacts are going to be about water -- too much in some places, too little in other places, too acidified in the oceans for most life. But even soil and water are themselves only important because they sustain life. We could do Pro-Life Day, but that term is already taken, and again it would probably draw the wrong crowd.
We could call it Homo sapiens Day. Technically, we are the subspecies Homo sapiens sapiens. Isn’t it great being the only species that gets to name all the species, so we can call ourselves “wise” twice! But given how we have been destroying the planet’s livability, I think at the very least we should drop one of the sapiens. And, perhaps provisionally, we should put the other one in quotes, so we are Homo “sapiens,” at least until we see whether we are smart enough to save ourselves from self-destruction.
What the day -- indeed, the whole year -- should be about is not creating misery upon misery for our children and their children and their children, and on and on for generations.  Ultimately, stopping climate change is not about preserving the earth or creation but about preserving ourselves. Yes, we can’t preserve ourselves if we don’t preserve a livable climate, and we can’t preserve a livable climate if we don’t preserve the earth. But the focus needs to stay on the health and well-being of billions of humans because, ultimately, humans are the ones who will experience the most prolonged suffering. And if enough people come to see it that way, we have a chance of avoiding the worst.
We have fiddled like Nero for far too long to save the whole earth or all of its species. Now we need a World War II scale effort just to cut our losses and save what matters most. So let’s call it Triage Day. And if worse comes to worst -- yes, if worse comes to worst -- at least future generations won’t have to change the name again.

Fox News' Unhinged, Irrational Obama Attacks Stir up Violent Right-Wing Militants

By Eric Boehlert, Media Matters for America
Posted on April 22, 2009, Printed on April 22, 2009

Imagine if Fox News had been on the air back on February 28, 1993, just months into the new Democratic president's first term, when agents from the Bureau of Alcohol, Tobacco and Firearms attempted to serve warrants on David Koresh's Branch Davidian compound, located on the outskirts of Waco, Texas. Agents arrived because federal authorities got a tip that Koresh and the followers of the misguided messiah were stockpiling weapons.
The authorities were right. Outgunned, ATF agents quickly met resistance from the Davidians, who had a .50-caliber rifle, machine guns, and more than a million rounds of ammunition at their disposal. The shootout lasted hours and became the longest in American law-enforcement history. In the end, four ATF agents were killed, and 16 were wounded. Inside the compound, five Davidians were killed and scores more injured, including Koresh, who was shot in the hip and the wrist. The gunbattle signaled the start of a 51-day standoff between Koresh and federal authorities.
Rupert Murdoch's all-news channel didn't debut in America until October 1996, but it's chilling to consider the what-ifs of how today's Fox News lineup of doomsday, anti-government prophets would have reacted to controversial and defining news events in the early 1990s -- like Waco.
As news of the failed Waco raid broke, would Fox News' notoriously weepy and apocalyptic host Glenn Beck have broken down on the air and wept for the tyranny that he saw unfolding in the government's raid? While FBI negotiators tried to win the release of Koresh's followers, would Beck have warned viewers that the president would "take your gun away one way or another"?
Amidst the 51-day siege, would Beck have warned against the creeping "totalitarian state" inside America? Would the host have gravely announced that we'd "come to a very dangerous point in our country's long, storied history"?
Would Beck have routinely vilified President Clinton as a fascist? Would he have told viewers that he wanted to debunk the militia-movement conspiracy theory that the federal government was building prison camps, but that he just couldn't knock the story down -- and that, at first glance, it appeared to be "half true"?
And can you even imagine Beck's on-air reaction when the FBI's final, failed assault on the Waco compound unfolded on live TV on April 19, 1993? As the horrific images of the compound going up in flames and the grim realization spread that Koresh's followers were not coming out -- that they had staged a mass suicide (and in some cases, executions), rather than surrendering to federal officers -- would Beck have claimed that the scene of destruction reminded him of the "early days of Adolf Hitler"?
Would he have invited self-styled militiamen onto his show to game out how the pending civil war against the Clinton-led tyranny was likely to play out and to ponder whether members of the U.S. military would fire on American citizens when the blood began to flow in the streets? And setting aside all decency, would Beck -- post-Waco -- have pretended to douse a Fox News colleague in gasoline and, lamenting how the government was disenfranchising its citizens, then urged Clinton to just "set us on fire," or pleaded that it would be better if Clinton had just shot Beck "in the head"? (That's how Koresh died inside the Waco compound: from a bullet to the head.)
Based on the paranoid, anti-government rhetoric that Fox News has embraced since President Obama's inauguration, it's no leap to suspect that if Murdoch's outlet were broadcasting in the early 1990s -- and if it were broadcasting the same fringe message it's echoing today -- that the militia movement would have found a friend in Fox News during the Waco era and throughout Clinton's first term, when the conspiratorial patriot movements flourished.
And that's the chilling significance of what's now unfolding. Last week, I wrote about the inherent dangers and irresponsibility of Fox News consciously shaping itself into a kind of militia news outlet and how it's impossible to ignore the anti-government message some viewers such as Richard Poplawski, the man accused of shooting and killing three Pittsburgh police officers, might be taking from Fox News.
But let's take a step back and see just how extraordinary Fox News' latest lurch to the revolutionary right really is. And let's clearly understand how Fox News is actively trying to mainstream fringe allegations, how Murdoch's outlet functions as a crucial bridge -- a transmitter -- between the radical and the everyday.
What Fox News, and specifically Beck, is doing in early 2009 is giving a voice -- a national platform -- to the same deranged, hard-core haters who hounded the new, young Democratic president in the early 1990s in the wake of Waco (i.e. the Clinton Chronicles crowd). What Fox News is doing today is embracing the same kind of hate rhetoric and doomsday conspiratorial talk that flourished during the '90s, and Fox News is now dumping all that rancid stuff into the mainstream. It's legitimizing accusatory hate speech in a way no other television outlet in America ever has before.
Today's unhinged, militia-flavored attacks from the right against Obama are clearly reminiscent of 1993 and 1994 and the kind of tribal reaction conservatives had to the Democratic White House. What's different this time around is that that it's being adopted and broadcast nationally by Fox News, as it proudly mainstreams and validates the fringe.
Back in the early 1990s, marginal critics, militiamen, and so-called "Patriots" had to rely on somewhat crude methods of communications to spread their conspiratorial distrust of government. They used grassroots fax networks, the very early days of online bulletin boards, and even passed around copies of The Turner Diaries. At the top of their media pyramid were right-wing talk-radio hosts as well as the writers on The Washington Times' and The Wall Street Journal's editorial pages, who eagerly disseminated the culture of partisan paranoia.
But in terms of television, the most influential mass medium in America, nowhere on the TV landscape in the early 1990s were rabid government haters able to hear their message of fear amplified on a nightly or weekly basis the way Obama haters are able to today via Fox News. Even Rush Limbaugh, who from 1992 to 1996 hosted a syndicated television show, didn't go there. Limbaugh's purely partisan television program avoided describing the new Democratic administration with the same doomsday language that's now casually thrown out about Obama: that he's a Marxist or a fascist, or that totalitarian rule remains a real and imminent threat. Even Limbaugh (or his producers) thought that kind of rhetoric was too much for American television.
Fast-forward two administrations, and that kind of talk has become Fox News' signature.
To be accurate, there was one person with a national television audience back then who did regularly promote outlandish conspiratorial claims about Clinton: the Rev. Jerry Falwell. He actively pushed the now-infamous Clinton Chronicles documentary on his Old Time Gospel Hour television show. The Clinton Chronicles, which was produced by Citizens for Honest Government, which in turn paid off key Clinton critics who cooperated with the house-of-mirrors film, claimed that the new president had accumulated a long criminal record while governor of Arkansas and continued his lawbreaking ways as president, that the Clintons were associated with drug-running, prostitution, murder, adultery, money laundering, and obstruction of justice, just to name a few.
Playing that hypothetical card again today, is there anyone who doubts that if Beck were broadcasting on Fox News back in 1994 that Citizens for Honest Government reps would have been ushered onto his program to discuss Clinton's alleged depravities? I don't doubt it, simply because Beck has, at times, become the voice of the militia this year -- and the militia devoured The Clinton Chronicles. As author David Neiwert, an expert on the right wing, reported, "The militia movement provided most of the early audience for The Clinton Chronicles; large stacks of the books and videos sold well at Patriot gatherings."
What's so startling today is that the unhinged, irrational attacks being leveled against Obama sound so similar to the unhinged, irrational attacks leveled against Clinton more than a decade ago. For instance, here's a line from the introduction to The Clinton Chronicles: "The hijacking of America was under way, and its impact on future generations would be incalculable."
That claim would sound familiar to any casual viewer who has tuned into Fox News since Obama's inauguration.
Here's what Neiwert highlighted in 2003:
Had you gone to any militia gathering -- held usually in small town halls or county fairgrounds, sometimes under the guise of "preparedness expos," "patriotic meetings" or even gun shows -- you could always find a wealth of material aimed at proving Clinton the worst kind of treasonous villain imaginable. Bill and Hillary Clinton, after all, occupy a central position in Patriots' "New World Order" paranoiac fantasy.
You'll note that Obama today occupies the same central position in the Patriots' Fox News-fed paranoiac fantasies.
And media critics Jeff Cohen and Norman Solomon wrote this more than a decade ago:
"Patriots" rail against Bill Clinton and the plot toward global government known as the "New World Order"; they see gun control as a Big Brother conspiracy.
Again, that type of rhetoric has become synonymous with Beck, who recently claimed the Second Amendment is "under fire" and that the "Big Brother" government will soon dictate what its citizens can eat, what temperature their house can be, and what kind of cars they're allowed to drive.
Hearing the attacks on Obama, it's déjà vu all over again. The key difference this time around the right-wing hate track is that Fox News has signed on as a TV partner and has agreed to embrace -- and air to a national audience -- the militia-like allegations about Obama. Fox News has agreed to descend into the right-wing conspiracist subculture in order to portray the new president as the worst kind of villain imaginable: somebody who's plotting take away guns and who's not above employing fascism to obtain his goals.
On the two-year anniversary of the Waco inferno, militia admirer Timothy McVeigh, feeding off his hatred for the government, drove his rented 20-foot Ryder truck and parked it across the Alfred P. Murrah Federal Building in downtown Oklahoma City. At 9:02 a.m. on April 19, 1995, the truck's three-ton ammonium nitrate bomb detonated and sheared the north side off the Murrah Building, killing 168 people and injuring hundreds more.
McVeigh later wrote, "I reached the decision to go on the offensive -- to put a check on government abuse of power." McVeigh wanted to "send a message to a government" by "bombing a government building and the government employees within that building who represent that government."
The Oklahoma City bombing story broke 18 months before Fox News made its cable-news debut. But if Murdoch's team maintains its current course -- if Beck and company insist on irresponsibly fanning the militia-type flames of distrust -- there's the danger Fox News might soon have to cover other episodic gestures of anti-government payback.

Confirmed: Rep. Jane Harman Tried to Kill NSA Wiretapping Story -- May Have Swayed 2004 Election

By John Byrne, Raw Story
Posted on April 21, 2009, Printed on April 22, 2009

The New York Times confirmed late Monday that a top Democratic congresswoman called the paper in 2004 and tried to keep it from publishing an article exposing the Bush Administration’s warrantless wiretapping program -- possibly helping to sway the balance in the 2004 presidential election.
The New York Times exposed the warrantless wiretapping program in 2005, revealing that the National Security Agency had engaged in the interception of thousands of American and foreign calls without a warrant as part of a program intended to disrupt terrorist plots. Upon running the story, they also admitted that they had withheld the article for a year at the urging of Bush Administration officials.
But buried in a Times article published Tuesday is the revelation that the top Democratic congresswoman on the House Intelligence Committee, Jane Harman (D-CA), called the paper’s Washington, D.C. editor in “October or November” of 2004 in an effort to quash the story.
“Bill Keller, the executive editor of The Times, said in a statement Monday that Ms. Harman called Philip Taubman, then the Washington bureau chief of The Times, in October or November of 2004,” the Times writes. “Mr. Keller said she spoke to Mr. Taubman -- apparently at the request of Gen. Michael V. Hayden, then the N.S.A. director -- and urged that The Times not publish the article.”
“She did not speak to me,” Keller said in a statement, “and I don't remember her being a significant factor in my decision.”
In addition, “Shortly before the article was published more than a year later, in December 2005, Mr. Taubman met with a group of Congressional leaders familiar with the eavesdropping program, including Ms. Harman. They all argued that The Times should not publish,” they Times reporters added.
At the time of her calls in 2004, Harman was part of the Gang of 8 — one of eight powerful members of Congress who are briefed on heavily classified intelligence matters. She was the most senior Democrat in the House dealing with intelligence affairs, and was sidelined after the 2006 congressional elections.
“October or November” 2004 would have been the month before, or the month of, respectively, of the election that Sen. John Kerry (D-MA) lost to then-incumbent President George W. Bush.
The paper did not give the exact date of Harman’s call.
Harman’s role in the wiretapping scandal emerged after a story Sunday in Congressional Quarterly, which disclosed that the California Democrat had been caught on an NSA wiretap promising an Israeli agent that she’d lobby to get the charges for two Israeli lobbyists accused of espionage reduced. The Times expanded on the story today.
An “official with access to the transcripts said someone seeking help for the employees of the American Israel Public Affairs Committee, a prominent pro-Israel lobbying group, was recorded asking Ms. Harman, a longtime supporter of its efforts, to intervene with the Justice Department,” the paper wrote. “She responded, the official recounted, by saying she would have more influence with a White House official she did not identify.
“In return, the caller promised her that a wealthy California donor -- the media mogul Haim Saban -- would threaten to withhold campaign contributions to Representative Nancy Pelosi, the California Democrat who was expected to become House speaker after the 2006 election, if she did not select Ms. Harman for the intelligence post,” the paper added.
The full Times story is available here.
John Byrne is editor of Raw Story.

The Coming Demise of the Dollar Reflects the Rise of the Rest

Nathan Gardels

Editor, NPQ, Global Services of Los Angeles Times Syndicate/Tribune Media
Posted April 21, 2009 | 07:38 PM (EST)
One of the more momentous power shifts in the last 500 years is taking place as we sift through the debris of America's busted credit bubble. The dominance of the West built up across those centuries is now yielding to the East. The latest sign of this shift is that those nations with surplus savings earned through our over-consumption of imports -- in particular China -- are proposing a new global reserve currency to replace the waning dollar. In order to protect their accumulated assets and diversify their risk they want to store their wealth in a basket of currencies instead.
I spoke with former World Bank chief economist and Nobel Laureate Joseph Stiglitz to ferret out the key issues:
Gardels: Among Obama's many challenges, isn't the overarching one correcting the imbalance in savings and consumption between the U.S. and China?
Stiglitz: In a globally integrated economy, the biggest challenge is to make sure there is adequate global aggregate demand, achieved through spending, when countries like China feel they must save high levels of dollar reserves to protect against international currency volatility.
After all, China's accumulation of reserves is a result of the IMF's mismanagement of the Asian financial crisis a decade or so ago. If countries know they can't rely on the IMF to help them, their best defense is their own reserve cushion. In a time of spreading global recession, too much emphasis on savings in surplus countries like China can impede prospects for global growth.
Gardels: Getting worried over the value of their billion-plus holdings in dollars as U.S. deficits mount and inflation threatens down the road, the Chinese have proposed a new global reserve currency based on a basket of currencies instead of just the dollar.
Is such a new currency a good mechanism for undoing the imbalance with a soft landing instead of the crash of the dollar, which would hurt the Chinese as well as the U.S.?
Stiglitz: The proposal for a new global reserve currency -- or Special Drawing Rights (SDR) -- is a good idea for many reasons. Yes, for the Chinese it would cushion any fall in the value of the dollar per se because it would only be part of a basket of other currencies, including the yen and the euro. But, above all, a new basket reserve currency would stimulate global aggregate demand by vastly reducing the fear of currency volatility, which, as I said, is what has led countries like China to put away so much money in reserves instead of spend it.
There are other benefits. As a matter of sound economics, the well being of the world should not depend on the management of a single currency. Currency risk would be diversified through a basket reserve unit, creating stability and confidence all around. Finally, there is an equity issue. Because the dollar is the reserve currency of the world, especially in a downturn where investors flee to safety, the U.S. can suck up the savings of the rest of the world even though the interest rates it pays are near zero. That would not happen if there were a global basket reserve currency.
Gardels: What would it mean for the U.S. if the dollar were replaced by a new global currency?
Stiglitz: Actually, it would be very much in the long-term interest of the U.S. because it would help de-financialize the American economy. Of course, the U.S. gets a bit of a break by being able to borrow at low costs from the rest of the world. But that comes at a macroeconomic cost at home. One way of looking at it is that the U.S. has turned to exporting T-bills instead of automobiles or other commodities. Global demand for dollars has supplanted demand for manufactured goods and services, resulting in multilateral trade deficits and loss of jobs at home.
Gardels: At their summit in London recently, the G-20 leaders decided to create $250 billion in new SDR. Is that an important step on the way to creating a new global reserve currency?
Stiglitz: I think it is. The question is how quickly it happens. In my view, though, the IMF is not the best place from which to launch this currency unless it becomes a more fair and balanced institution that represents the real world economy instead of the post-World War II powers, dominated by the United States. The East Asian countries, Brazil and others need a much greater say.
For example, of the $250 billion in SDR committed, only $19 billion was allocated for developing countries. So, the idea of greater SDR is a good one. The institution is flawed.
Gardels: Even so, the fact that the Chinese have proposed a new global SDR currency and the G-20 has taken a step toward its creation surely marks a powershift in the world?
Stiglitz: Without question, it is a recognition of the reality of a genuinely multipolar world that requires moving to a genuinely multilateral system of governance. The powershift began already several years ago, under the Bush administration, when the dollar became very volatile and started declining. That is when China shifted from having almost 100 percent of its reserves in dollars to 75 percent. Some countries went completely out of the dollar. The dollar, for all intents and purposes, lost its special reserve status and people starting talking about a portfolio, or basket, approach as a store of wealth instead of the dollar.