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Economics 101: Republican Style August 15, 2014

Posted by rogerhollander in Economic Crisis, Republicans, Right Wing.
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Canadian Group Delivering Water to Detroit to Protest Shutoffs July 25, 2014

Posted by rogerhollander in Canada, Capitalism, Detroit, Economic Crisis, Human Rights, Poverty, Water.
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Roger’s note: there are trillions of dollars to support thirteen years of warfare in Afghanistan and hundreds of military bases around the world and a stockpile of nuclear weapons capable of destroying the planet a hundred times over; there is money for record profits for banks and financial institutions and millions to bail them out when their crimes lead to economic disaster; there is money to pay CEOs hundreds of millions of dollars in salaries; there are gazillions for war profiteering corporations such as Lockheed and Boeing;  there are three billion dollars a year to arm Israel’s slaughter of Palestinian civilians (I could go on and on) … BUT THERE IS NO MONEY TO PROVIDE WATER TO POOR PEOPLE IN DETROIT.

Some naively and  mistakenly believe that in a democracy you get the government you deserve.  Yes, just as Palestinian children deserve to be murdered because their parents voted for Hamas.  It is a perverse world we live in.  In CAPITALIST democracy, you do not get the government you deserve; rather you get war and poverty.  But, don’t listen to me, I am an unrepentant commie.

 

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Council of Canadians joins movement against city-wide water war

As Detroit activists and human rights groups continue to protest against widespread water shutoffs, the Council of Canadians mobilized on Thursday to deliver a  convoy of water in a show of international support to beleaguered city residents.

The Windsor chapter of the council will bring hundreds of gallons of water into Detroit to help those faced with long-term service shutoffs.

“In a region that holds 20% of the world’s freshwater, the water cut-offs are a source of growing international outrage,” said Maude Barlow, national chairperson for the Council of Canadians. “Water is a human right, and it is unacceptable in a country of plenty, surrounded by the Great Lakes, the largest source of fresh water in the world, that people should go without.”

The council plans to deliver their convoy to a rally Thursday afternoon at the St. Peter’s Episcopal Church of Detroit. Several organizers will also send a petition to City Hall, asking for water to be restored to elderly people, disabled people and families with children.

“The human suffering is that of a major disaster, one that grows every day,” Barlow stated, adding that the council asks President Barack Obama to “intervene and to declare a state of emergency. It is appalling that this has been allowed to happen, even more so to go on this long.”

The city, which has been fighting its way out of bankruptcy in part by cutting public services such as pensions and welfare, ceased its water supply three months ago to households that were behind on payments in order to collect about $118 million in outstanding bills. Council members recently agreed to a 15-day moratorium on the shutoffs to allow residents time to catch up on what they owe, but emphasized that it was temporary. The policy began to receive international attention as residents held rallies and mass protests and the United Nations declared the shutoffs a violation of human rights.

More than 14,000 households were disconnected between April and June, while the Detroit Water and Sewage Department (DWSD) announced plans to increase the shutoffs to up to 3,000 households a month. But according to Catarina de Albuquerque, UN expert on the human right to water and sanitation, disconnections for delinquent bills are only “permissible” if residents are simply choosing not to pay, which is not the case for the majority of the city’s low-income households.

“Disconnections due to non-payment are only permissible if it can be shown that the resident is able to pay but is not paying,” de Albuquerque said. “In other words, when there is genuine inability to pay, human rights simply forbids disconnections.”

Detroit’s cost of living is too high for many of its low-income residents, particularly as they take the brunt of service cuts decided on by their bankruptcy manager, Kevyn Orr. “Our water rates rise continuously,” Priscilla Dziubek, a spokesperson for the Detroit People’s Water Board, told Common Dreams. “More and more people are struggling with their water bills. We have a loss of democracy. [The city] should make decisions with the citizens of Detroit in mind.”

Water bills in Detroit have gone up by 119 percent in the past 10 years. In June, the city council approved an 8.7 percent increase in rates. At the same time, unemployment rates reached a record high and the poverty rate hit 40 percent. Orr ordered the shutoffs for anyone who owes more than $150 on their bill, while the DWSD said that the procedure is standard and enforced every year.

But as the Michigan Citizen pointed out in June, there is a notable discrepancy in who gets their water services turned off and who doesn’t: Low-income residents do while elite establishments — like the Palmer Park Golf Club, which owes $200,000; Ford Field, which owes $55,000; and the Joe Louis Arena, which owes $80,000,  — don’t.

“Why are they going after citizens?” Dziubek said. “They could collect from one of these large accounts and get a lot more money.”

The Detroit People’s Water Board and several other organizations, including Food & Water Watch, called on the city’s managers to implement a water affordability plan that would ease the burden on low-income residents. In a report (PDF) submitted to the special rapporteur on the human right to safe drinking water and sanitation, the Detroit People’s Water Board stated that “it would be more just and efficient for the DWSD to spend its resources collecting unpaid bills from commercial and industrial users than depriving households of basic services.”

Wenonah Hauter, executive director of Food & Water Watch, said in a press statement Monday that the DWSD should “fundamentally reconsider its use of draconian water shutoffs as a means of strong-arming residents who cannot afford to pay their water bills.”

It was unclear Thursday morning whether the council would be able to cross the border, as the U.S. government has to give approval on allowing in any amount of water that exceeds what is necessary for “personal use.”

Dziubek wasn’t worried. “I can’t see any reason why humanitarian water would be turned away,” she said.

 

 

Clintonians Flock With Vultures Over Argentina July 24, 2014

Posted by rogerhollander in Africa, Argentina, Congo, Economic Crisis, Latin America, Peru.
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Roger’s note: I confess to an intense dislike of the Clintons and their retinue.  Whereas right wing ideologues and bigots make no secret of where they stand, the Clinton crowd pose as progressives as they and their close friends and supporters become millionaires whilst enacting and promoting policies that are damaging to the constituencies they claim to represent.  From Bill the president we had drastic welfare reductions camouflaged as “reforms,” and the deregulation that led to the 2008 economic crisis that resulted in thousands losing their homes.  From Hillary the Secretary of State we had super hawk foreign policy, a continuation of the Monroe Doctrine in Latin America, and support for military coup d’etat in Honduras, Egypt and now the Ukraine —  all in the service of US corporate and geopolitical interests.  A pox on their house.

 

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By OpEdNews Op Eds 7/24/2014 at 15:16:53

It is no surprise that right-wing Republican and hedge fund billionaire Paul Singer should be trying to wring hundreds of millions of dollars out of Argentina for a debt that Buenos Aires doesn’t really owe him. He screwed tens of millions of dollars out of poverty-stricken Peru and the Republic of Congo using the same financial sleight of hand. What may surprise people, however, is that key leaders in the administration of former President Bill Clinton are helping him do it.

Singer, who owns Elliot Management, a $17 billion hedge fund, is the leading “vulture investor” — a financial speculator who buys up the bonds of debt strapped nations for pennies on the dollar and then demands payment in full. When Argentina defaulted on its foreign debt in 2001, Singer moved in and bought up $48 million in bonds. He is now demanding that those bonds be paid at full-face value — $1.5 billion — plus interest and fees. It is a move that could derail Argentina’s long climb back into solvency, as well as undermine debt settlements worldwide.

A recent decision by federal District Judge Thomas Griesa in Manhattan may not only force Argentina to pay the vultures, it could unravel a 2006 debt deal between Buenos Aires and other creditors. Under the highly controversial principle of “pari passu” (“equal ranking among creditors”), if the vultures are compensated, so must all the other creditors, even those who settled back in 2006. That bill could reach $15 billion. Given that Argentina has only about $28 billion in foreign reserves, the tab could send Buenos Aires into a recession or force the country into bankruptcy.

The “sleight of hand” involves the fact that the countries the vultures prey on are not really in debt to creditors such as Singer and Eric Hermann of FH International Asset Management LLC. The hedge funds look for distressed countries, then buy their debt at bargain basement prices and sit on it. In the meantime, other creditors cut a deal to take a reduced payment on their bonds, which in turn helps improve the debtor’s economy and allows it to emerge from default.

That’s when the vultures sue, threatening to shut down outside aid programs, seize assets and freeze debtor nations out of international finance if they don’t pay up. Recent examples involving Singer include the Republic of Congo being forced to pay him $90 million on a $10 million investment. Singer’s investment of $48 million in Argentina’s debt would net him a 1,608 percent profit if Buenos Aires pays in full. Peru was similarly plundered.

It is more than dollars and cents at stake in all this. As journalist Greg Palast points out, “In Congo-Brazzaville [the capital of the Republic of Congo] last year, one-fourth of all deaths of children under five were caused by malnutrition.” That $90 million might have made a difference.

Singer’s rap sheet is consistent with hard-nosed vulture tactics. He is a leading Republican fundraiser, and a member — along with former Vice President Dick Cheney and Iraq War designer Richard Perle — of the right-wing Jewish Institute for National Security Affairs. He helped bankroll Swift Boat Veterans for Truth and is a bitter critic of “unpayable” social welfare programs, including Social Security, Medicare and Medicaid.

But the people who head up the main lobbying organization behind Singer’s current campaign, the American Task Force Argentina (ATFA), sit on the high councils of the Democratic Party and would likely be part of any Hillary Clinton administration.

The task force is essentially a front for several vulture funds, conservative and libertarian business groups, and agricultural organizations, like the U.S. Cattlemen’s Association, which would like to damage Argentina’s cattle export business. And its executive director is Robert Raben, former counsel for liberal Congressman Barney Frank, Democratic counsel for the House Subcommittee on the Constitution and assistant attorney general in the Clinton administration.

ATFA’s two co-chairs are Clinton’s former undersecretary of commerce, Robert Shapiro, and Clinton appointee to the United Nations Nancy Soderberg. Shapiro was an adviser to Bill Clinton’s 1992 presidential campaign and a senior adviser to Al Gore’s 2000 run for the White House. Soderberg, who served as a senior foreign policy adviser to Sen. Edward Kennedy, was also a member of Clinton’s National Security Council and an alternative representative to the U.N. with the title of ambassador. She is currently a Democratic Party activist in Florida and a member of the Council on Foreign Relations.

Raben, Soderberg and Shapiro have written numerous opinion pieces on Argentina using their Clinton administration credentials and, depending on the publication, have not always disclosed their lobbying ties. The three snookered the progressive Huffington Post into running opinion pieces until journalists Christina Wilkie and Ryan Grim uncovered their ties to ATFA. HuffPo subsequently removed the articles from its website.

Because of the huge debt burdens borne by nations from Latin America to Europe, the Griesa decision has opened up a Pandora’s box of trouble. A number of financial institutions and countries — including the International Monetary Fund and organizations representing 133 nations — have condemned the vultures or filed amici curiae briefs on behalf of Argentina, fearing that the decision could chill future debt negotiations and threaten economies trying to work themselves out of the red.

Given the ongoing hangover from the 2007-08 international meltdown, there is a lot of vulture food out there.

The key role being played by important Democratic Party activists in this cruel business — for there is no other word to describe taking money from countries struggling to emerge from debt and recession — may seem contradictory. And yet it was the Clinton administration that deregulated national and international finance and fought so hard for policies that ended up impoverishing some of the countries the vultures are now preying on.

In the 1990s, the Clinton administration pushed Argentina to privatize its state-owned industries, tie its currency to the dollar and institute the “Washington Consensus” of combining tax cuts with austerity. The result was economic disaster. From 1998 to 2002 Argentina’s economy shrank 20 percent and half the population fell below the poverty line.

Buenos Aires defaulted on its $100 billion debt in order to staunch the hemorrhage and pull the country out of an economic death spiral. In 2006, it negotiated a deal with 92.4 percent of its debt holders to pay 30 and 50 cents on the dollar. It was that deal that drew the vultures, which swooped in, scooped up some of the debt and then refused to accept the settlement.

The 2001 default blocked Argentina from tapping into international finance to tide it over until the economy recovered, but policies to end austerity and increase government spending eventually did the job. The economy grew at an average rate of 6 percent from 2002 to 2012 and Argentina paid off the IMF in 2006 and the Paris Club countries (representing the world’s 20 largest economies) in 2014.

But the vultures now threaten to undo much of this.

The Obama administration has come down on the side of Argentina because it is worried that financial institutions will shift their business to London if “pari passu” is allowed to stand. Hillary Clinton, however, has been quiet on the subject of international debt and Argentina. Given that her husband’s administration helped push Argentina off the cliff, that is hardly a surprise.

What is disquieting is that Clinton and people such as Raben, Shapiro and Soderberg have an economic philosophy that many times marches in step with that of Wall Street.

According to The New York Times, the financial sector was the second largest contributor to Hillary Clinton’s 2008 run for the White House. She is also close to the center-right Third Way think tank that advocates cutting Social Security and tends to be allergic to financial regulations. It is hard to imagine a Hillary Clinton administration stacked with Wall Street insiders and hedge fund lobbyists coming down on the vultures.

Clinton’s most recent comment on the debt crisis was to complain that she and Bill were “dead broke” when they left the White House in 2001, rhetorically putting herself in the same boat as tens of millions of indebted people in the U.S. and around the world. “Dead broke” in Chappaqua, N.Y., is not quite the same as “dead broke” in Brazzaville, or in the growing number of homeless encampments around the U.S.

Argentina is currently negotiating a compromise with the vultures, who have Buenos Aires over a barrel. The country desperately needs outside financing to exploit its huge Vaca Muerta gas reserves and to underwrite agricultural exports. “These hedge funds are equipped with an instrument [the New York court decision] that forces struggling countries into submission,” saysEric LeCompte, executive director of the anti-poverty religious organization Jubilee USA Network.

Countries are wising up to the hedge funds. Many of them now require that a debt agreement include a collective action clause (CAC), in which a majority or two-thirds vote by creditors is binding on all and would block a handful of vultures from tying up agreements. Because they signal economic fragility however, the CACs will string out negotiations and may result in higher interest rates.

In the meantime, the vultures have backed Buenos Aires against the wall. At a minimum, Democratic candidates for the presidency should make it clear that they stand with Argentine President Cristina Fernandez de Kirchner. One way would be to endorse campaigns by organizations such as Oxfam and Jubilee to forgive foreign debt, and to make it clear they will also press for financial regulations to block vulture speculation.

In the world, vultures are estimable creatures. There is a “yuck” factor, but at least they wait until their prey are dead before making a meal of them, and they do clean up after themselves. The vultures of Wall Street prey on the living and leave behind an unspeakable mess.

Read more of independent journalist Conn Hallinan’s work at his blog, Dispatches from the Edge.

Conn M. Hallinan is a columnist for Foreign Policy In Focus, “A Think Tank Without Walls, and an independent journalist. He holds a PhD in Anthropology from the University of California, Berkeley. He oversaw the (more…)

The World Cup Exposes Brazil’s Injustices June 6, 2014

Posted by rogerhollander in Brazil, Economic Crisis, Latin America, Sports.
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Roger’s note: How wonderful it was to see Lula, the leader of the workers’ party win the Brazilian presidency, and now followed by Dilma, another lifetime labor leader in the presidency.  And is it a surprise, that despite a leftist government, the rule of Capital continues to dominate in Brazil?  Mining interests, lumber interests, big agriculture, and all the rest of the world of corporate capital, they know how to handle politicians of all stripes and have their way over the interests of poor and indigenous peoples, not to mention the environment.  Is it not once again obvious that something more that electing leftist politicians to high government office is going to be what it takes to ensure genuine social and political equality?

 

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On June 12th the World Cup kicks off in Brazil; the country has been beset by protest in the run up to the tournament.

Last year up to a million people demonstrated across Brazil: protesting the vast expense of the World Cup, calling for better public services and an end to corruption. On June 3rd, the police were accused of heavy handedness as protestors gathered outside the World Cup Stadium in Goiania, during a friendly football match between Brazil and Panama. The demonstrators condemn the 15 billion dollars spent on the tournament which could have gone towards social services and improving living standards for the poor of Brazil. It’s the latest in a long line of demonstrations.

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But now Brazil’s poor favela residents and the indigenous and tribal people have joined forces. On May 28th in Brasilia, 1,500 residents of the favelas, indigenous people, students and many other Brazilians from all walks of life took to the streets, gridlocking them for hours. Some occupied the roof of the Brazilian Congress, including members of the indigenous Guarani tribe who carried banners saying, ‘Guarani resiste, Demarcacao ja!’ ‘The Guarani are resisting. Yes to demarcation!’

Police fired tear gas and stun grenades into the crowd. One policeman was reportedly shot in the leg with an arrow.

2014-06-04-MEDIANINJAPROTESTSMOKEBOMBS27THMAY.jpgSmoke bombed protesters, Brasilia May 27th 2014. (Credit: MEDIANINJA)

At first glance the inhabitants of Brazil’s urban slums, the favelas, and the indigenous people of the Brazilian Amazon may not seem to have a common cause. But both groups face violence with impunity from police and the military, poverty, land insecurity, neglect by the authorities. The Brazilian government is brushing them under the carpet.

On June 9th the legendary Chief Raoni Metuktire and his nephew Chief Megaron Txucarramãe, members of the Mebengôkre Kayapó tribe in the Brazilian Amazon, will arrive in London to gather support for the Kayapó and for all the tribes across Brazil in their struggle to protect their ancestral lands and way of life. They are urging the Brazilian government to demarcate the region known as Kapôt-Nhinore, which is sacred to the Kayapó. They will be holding a press conference on June 9th – I will be there to speak in their support, as Founder and Chair of the Bianca Jagger Human Rights Foundation (BJHRF).

It is a critical time for indigenous rights in Brazil. The Kayapó, and all the indigenous peoples of the Amazon are threatened; by mega-dams, illegal mining, logging, occupation by settlers and ranchers, and by companies and large corporations, by proposed legal reform and constitutional amendments which if allowed to go ahead will strip the tribes of their territorial rights, and endanger their livelihoods and cultures.

Throughout my life I have campaigned on behalf of indigenous peoples all over the world: in South America, Asia and Africa. I have witnessed the suffering of many of these ancient tribes, murdered, threatened, abused, forced from their homes and deprived of their way of life. Millions of indigenous people have become refugees in their own land and we don’t know how many thousands have lost their lives.

2014-06-04-PROTESTERBEINGTREATED.jpgProtester being treated after gas exposure, May 27th. (Credit: MEDIANINJA)

The values of indigenous people have shaped my relationship to the earth, and our responsibilities towards her. During my thirty years of campaigning for human rights, social justice and environmental protection, I have campaigned on behalf of many indigenous tribes in Latin America: the Miskitos and Mayangna in Nicaragua, the Yanomami, the Guarani, and the Surui Paiter in Brazil, the Cofán, Siona, Secoya, Kichwa, and Huaorani tribes in Ecuador, and the Quechua in Peru. I learned from their wisdom, and also from their courage. Traditional indigenous cultures use natural resources sustainably: forests, grasslands, rivers and wildlife, and preserve biodiversity. Protecting the rights of indigenous peoples is essential to our survival and that of the planet. Over and over again, indigenous peoples have been proven to be the best custodians of biodiversity in their ancestral lands.

Brazil’s 1988 constitution recognises that the Indians have an ‘Original’ and inalienable right to occupy and use their traditional lands. If it can be shown that the tribe historically occupied and used that area of land, it is theirs by right – it should become demarcated land.

Kapôt-Nhinore has already been surveyed by the indigenous agency FUNAI for demarcation, but the process has been stalled by bureaucracy, and is threatened by proposed changes to Brazil’s demarcation laws and constitution.

In the past Brazil had an average of thirteen demarcations per year. Under President Dilma Rousseff this number has sunk to three a year. The demarcation process has been crippled by an unrelenting barrage of legislative proposals from Congressmen representing large agribusiness, mining corporations and the dam industry, designed to wrest the land from the indigenous tribes and open it to development. It is unconscionable. I urge President Rousseff to halt the Proposed Constitutional Amendment (PEC215) which would further delay the process for demarcations and claims: and would result in few, if any further demarcations being approved.

Brent Millikan of International Rivers states, ‘constitutional amendment PEC 215 would transfer authority for demarcation of indigenous lands from the Executive branch to the Congress.’ Demarcation would become a political decision; power of the Executive being transferred to the Legislature, an abuse of the separation of powers, a foundation stone of the Constitution. Since the Congress is today dominated by the Bancada Ruralista – the large landowners’ lobby – it is highly unlikely that any demarcation would be granted. Even if it were, finding time for Congress to debate each demarcation would mean even more delays introduced into the process. Because the change would effectively be retrospective, Congress would also acquire the power to reduce or reverse territories (TI’s) which have already been demarcated.

I urge President Rousseff to halt PEC 215 and the other proposed amendments to the Brazilian Constitution and laws which are eroding the indigenous peoples’ right to their ancestral lands. Some proposals would open up indigenous territories for mineral and oil extraction – mining companies have already begun to lodge claims to the territory. Some would not only permit, but effectively force the indigenous people to allow cattle ranching and agriculture on their land. If allowed to go ahead, these changes could destroy the forest and traditional lives of the Kayapó and many other tribes across Brazil.

I call on the Brazilian government to enforce the Kayapó’s rights to their land, which are enshrined in the 1988 Constitution. I appeal for protection for the hundreds of tribes in the Brazilian Amazon who are continually threatened by landowners, illegal mining, logging, occupation by settlers and ranchers, and by companies and large corporations which continue to trade in produce from illegally farmed crops on indigenous territory, by reckless development projects which threaten their lives and livelihoods. Otherwise indigenous people will continue to be murdered, abused and pushed off their ancestral land.

2014-06-04-PROTESTERSPEC215CREDITMAIRA.JPGProtesting PEC 215. (Credit: Maira Irigaray, Amazonwatch)

Among the most monstrous of these projects is the Belo Monte Dam, which is under construction on the Xingu River in the Brazilian state of Pará, in the heart of the Brazilian Amazon. Belo Monte will be more than a dam; it is a megadam, the third largest in the world, which will displace 20,000 people and change the Amazon basin forever. It is a grave human rights violation and an environmental crime

I have campaigned against Belo Monte for many years. In March 2012 I went on a fact finding mission to the Xingu. Construction on the dam had then just begun. I travelled down the Xingu River in a small boat. I was accompanied by my courageous friend Antonia Melo, co-ordinator of Xingu Vivo, a collective of local NGOs opposed to Belo Monte, and Ruy Marques Sposati. We saw the great red scarred coffer dams, the beginnings of Belo Monte, rearing out of the river. I met with indigenous leaders, with local communities, NGOs, government officials, extractavists – and the Bishop of the Xingu, Dr Erwin Krautler, whose concern and care for the people affected by Belo Monte was evident. I was distraught by the suffering I witnessed in the area. I published my findings in a report on the Huffington Post: The Belo Monte Dam, an Environmental Crime. I urge you to read it. The people of the Xingu need our support.

2014-06-04-SUECUNNINGHAMRIOPROTEST2012.jpgProtesters assemble on the beach in Rio de Janeiro during Rio+20, 2012, to protest the Belo Monte dam. (Credit: Sue Cunningham)

And Belo Monte is only part of the plan: on 25 April 2014 it was disclosed in Lima, Peru that 412 dams are planned across the Amazon. 256 of them are in Brazil, 77 in Peru, 55 in Ecuador, 14 in Bolivia, six in Venezuela, two in Guyana, and one each in Colombia, French Guyana and Surinam. Five of the six rivers which run through the world’s largest tropical forest will be dammed – and damned. All over Brazil, even now, the Amazon’s waterways are being blocked and diverted. The river system that provides a fifth of the world’s fresh water is being dammed, polluted and fouled up.

It is imperative that indigenous rights, including the right to free, prior and informed consent, be respected in places like the Tapajós basin, in the heart of the Amazon, where the Brazilian government plans to construct up to 29 large dams, following the same destructive model as Belo Monte.

To the Kayapó each river, the sky, the rocks, all plants, trees and animals have a spirit. The Xingu River is sacred. At least five dams are planned upstream of Belo Monte. If these dams are built, it will be a grave human rights violation and cause irreparable environmental destruction in the Kayapó lands. Already the Kayapó are seeing the impact of the influx of some of the 100,000 workers and migrants who are flooding into the area, bringing overcrowding, disease, alcoholism, violence and prostitution. Anthropologist Paul Little released a report in April 2014, ‘Mega-Development Projects in Amazonia: A geopolitical and socioenvironmental primer.

He writes:

The weight of these socio-environmental impacts is distributed in an extremely unequal manner. The majority of the benefits derived from the construction of mega-development projects accrue to… large multinational corporations, the administrative apparatus of national governments and financial institutions. The majority of negative impacts of these same mega-development projects are borne by indigenous peoples, who suffer from the invasion of their territories, and local communities, which suffer from the proliferation of serious social and health problems.’

In 2009 the Kayapó wrote a letter to Electrobras, the parastatal energy company that is partnering with huge construction companies such as Odebrecht, Andrade Gutierrez and Camargo Correa to build mega-dams in the Amazon and elsewhere in Latin America and Africa.

‘We do not accept Belo Monte or any other dam on the Xingu,’ they said. ‘Our river does not have a price, our fish that we eat does not have a price, and the happiness of our grandchildren does not have a price. We will never stop fighting: In Altamira, in Brasilia, or in the Supreme Court. The Xingu is our home and you are not welcome here.’

2014-06-04-horsies.jpgProtesters confront police. (Credit: MEDIANINJA)

The Brazilian Amazon is one of the wonders of the world. It is critical to survival of the people of Brazil, and people throughout the world. A quarter of all land animal species are found in the Amazon. The rainforest absorbs around 2 billion tons of carbon dioxide per year. It is vital in the race against climate change. I urge President Rousseff to save it, and put a stop to Belo Monte and the other dams.

The plight of the Kayapó illustrates the failure of governments all over the world to protect indigenous peoples and their ancient way of life. The Kayapó have a rich and ancient culture. Their name for themselves, Mebengôkre, means ‘people of the space between waters,’ but the name ‘Kayapó’ was given to them by outsiders. It means ‘those who look like monkeys,’ probably from the traditional ceremonial dance in which the men wear monkey masks. I appeal to the Brazilian government to affirm the Kayapó’s rights to their sacred land in Kapôt-Nhinore, and to do everything in its power to protect them.

President Dilma Rousseff has a choice. I urge her to seize this leadership opportunity, to halt PEC215 and the other unconscionable, unconstitutional amendments and changes to law which will threaten indigenous peoples’ rights to their land across Brazil. If these proposals go ahead, hundreds of tribal cultures may disappear and Brazil will lose an irreplaceable part of its heritage.

Why I Wouldn’t be Caught Dead Shopping in Wal-Mart May 29, 2014

Posted by rogerhollander in Capitalism, Economic Crisis.
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$16 billion
Walmart’s Profit

$144 billion
Wealth of Walmart Owners (the Waltons)
(as much as 42% of Americans combined!)

$7 billion
Subsidies and Tax Breaks that Benefited Walmart & the Waltons

< $25,000
Most Walmart Workers Annual Wage

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Chilean Artist Burns $500 Million of Student ‘Debt Papers’ in Attempt to Rid World of ‘Debtors’ May 22, 2014

Posted by rogerhollander in Chile, Economic Crisis, Education, Latin America.
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Roger’s note: This is civil disobedience, this is direct action, this is artful behavior.  How it will end in the long run is hard to say; but it is heartening to see a citizen taking the law into his own artful hands when those in authority stand by and watch the blatant exploitation of students.  I am reminded of the break-ins of draft centers during the Vietnam War where records were destroyed.

 

Neela Debnath, the Independent, May 18, 2014

An activist in Chile has burnt documents representing $500 million (£300 million) worth of student debt during a protest at Universidad del Mar.

Francisco Tapia, who is also known as “Papas Fritas”, claimed that he had “freed” the students by setting fire to the debt papers or “pagarés”.

Mr Tapia has justified his actions in a video he posted on YouTube on Monday 12 May, which has since gone viral and garnered over 55,000 views.

In the five-minute video the artist and activist, translated by the Chilean news site Santiago Times, he passionately says: “You don’t have to pay another peso [of your student loan debt]. We have to lose our fear, our fear of being thought of as criminals because we’re poor. I am just like you, living a s**tty life, and I live it day by day — this is my act of love for you.”

He confessed he destroyed the papers without the knowledge of the students during a takeover at the university demanding free higher education.

According to the video’s description, Mr Tapia was at the protests when he hatched the plan to wipe the student debt by stealing the papers. It goes on to say that he wanted to create a work of art to reflect the problem of student debt plaguing the nation.

While his act of defiance will have brought smile to those now debt-free students, it will be difficult for the university to recoup the losses and the higher institution may have to individually sue students to get the get the debt repaid.

There have been protests in Chile since 2011 calling for reform of the university system and for free high-quality education. It was hoped the newly-elected president, Michelle Bachelet, would be bring reform, after a campaign promising drastic change to the education system.

However, two months on, tens of thousands of students have taken again to the street calling again for changes promised.

Last week there were clashes on the street of the Chilean capital, Santiago, as demonstrations turned violent.

My personal Wal-Mart nightmare: You won’t believe what life is like working there May 9, 2014

Posted by rogerhollander in Barack Obama, Economic Crisis, Labor.
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Roger’s note: Barack Obama, soon to be if not already a millionaire, shows just how out of touch he is with reality by his visit to one of the most exploitative  enterprises on the face of the earth.

 

The president’s visiting my store Friday. He won’t see how I sleep on my son’s floor and eat potato chips for lunch

, , http://www.salon.com

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Pam Ramos

When I woke up to see the news, I could hardly believe it: President Obama is planning a visit to the Mountain View Wal-Mart where I work.

But the excitement quickly passed when I found out the store would be shutting down hours in advance of his visit. I wouldn’t be able to tell the president what it’s like to work at Wal-Mart and what it’s like to struggle on low wages, without the hours I need. I am living at the center of the income inequality that he speaks about so often, and I wanted to talk to him about how to change this problem.

My situation is not unlike that of many of the 825,000 Wal-Mart associates – and many other Americans – who are working hard, but just can’t keep up. Most of us aren’t even paid $25,000 a year even though we work at the largest employer in the country and one that makes $16 billion in profits.

I wanted to tell the president what it’s like working – and living – like this.

Things have always been tight. After four years working at Wal-Mart in Mountain View, I am bringing home about $400 every two weeks (I’d like to get more hours, but I’m lucky if I work 32 hours a week). That’s not enough to pay for bills, gas and food.  All I can afford to eat for lunch is a cup of coffee and a bag of potato chips. I’ve always done everything possible to stretch paychecks and scrape by. Sometimes it means not getting enough to eat.

But then I got some bad news that made stretching my budget impossible.

Two months ago, I started feeling ill. My doctor told me I needed to take a week off to have a series of medical tests. Every day for a week I went to the hospital and had to pay $30, $60 or $100 in co-pays for each appointment, test and X-ray.

With these additional expenses and without a paycheck for the week I was out, it pushed me over the edge. I didn’t have enough money to pay the rent.

Right now, I don’t have a place to call home.

I sleep on the floor of my son’s living room because I can’t afford my own place. All of my belongings are in my car. I don’t know where to send my mail.

I used to think, “At least I have my health and my family.” But my doctor thinks I may have colon cancer, and with all of the money I still owe the hospital, I’m not sure how to finish the tests and get treatment. Even though I do have insurance through Wal-Mart, the co-pays are more than I can afford with only $400 every two weeks.

I wanted to tell the president I am scared. I am scared for my health. I am scared for the future for my grandkids. And I am scared and sad about the direction that companies like Wal-Mart are taking our country.

I don’t wish the struggle I’m facing onto anyone. But sadly, my situation isn’t unique. I know that I am one of many living in the Wal-Mart economy who has no financial stability. We expect to work until our deaths because we don’t have any retirement savings and are concerned about the future in front of our children and grandchildren.

There are so many of us who have it so hard – trying to live paycheck to paycheck. While the president is here visiting my store, I want him to look inside at what is really happening at Wal-Mart.

I want the president to help us and tell Wal-Mart to pay us enough to cover the bills and take care of our families. That doesn’t seem like too much to ask from such a profitable company, a company that sets the standard for jobs in this country. And I hope it’s not too much to ask from a president who believes that income inequality is the defining challenge of our time.

Pam Ramos has worked for four years at the Walmart in Mountain View, California. President Obama is visiting this Walmart on Friday. Ramos is also a member of OUR Walmart, the worker organization calling on Walmart to publicly commit to paying workers $25,000 a year, providing full-time work and ending illegal retaliation.

Olympic Capitalism: Bread and Circuses Without the Bread May 1, 2014

Posted by rogerhollander in Brazil, Economic Crisis, Latin America, Sports, War.
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Roger’s note: When I was a member of Toronto’s Metropolitan City Council, I was an avid opponent of the city’s (failed) bid for the 1996 Olympics and a supporter of the citizen lead Bread Not Circuses Coalition.  I can verify from my experience and research at the time, that everything you read below is true.

OpEdNews Op Eds 5/1/2014 at 14:54:47

By (about the author)  

he author of Brazil’s Dance With the Devil, Dave Zirin, must love sports, as I do, as billions of us do, or he wouldn’t keep writing about where sports have gone wrong.  But, wow, have they gone wrong!

Brazil is set to host the World Cup this year and the Olympics in 2016.  In preparation Brazil is evicting 200,000 people from their homes, eliminating poor neighborhoods, defunding public services, investing in a militarized police and surveillance state, using slave and prison labor to build outrageous stadiums unlikely to be filled more than once, and “improving” a famous old stadium (the world’s largest for 50 years) by removing over half the capacity in favor of luxury seats.  Meanwhile, popular protests and graffiti carry the message: “We want ‘FIFA standard’ hospitals and schools!” not to mention this one:

 


FIFA Train
(image by http://warisacrime.org)

 

(FIFA = Fédération Internationale de Football Association, aka Soccer Profiteers International)

Brazil is just the latest in a string of nations that have chosen the glory of hosting mega sports events like the Olympics and World Cup despite the drawbacks.  And Zirin makes a case that nations’ governments don’t see the drawbacks as drawbacks at all, that in fact they are the actual motivation.  “Countries don’t want these mega-events in spite of the threats to public welfare, addled construction projects, and repression they bring, but because of them.”  Just as a storm or a war can be used as an excuse to strip away rights and concentrate wealth, so can the storm of sporting events that, coincidentally or not, have their origins in the preparation of nations for warmaking.

Zirin notes that the modern Olympics were launched by a group of European aristocrats and generals who favored nationalism and war — led by Pierre de Coubertin who believed sport was “an indirect preparation for war.” “In sports,” he said, “all the same qualities flourish which serve for warfare: indifference toward one’s well being, courage, readiness for the unforeseen.”  The trappings of the Olympic celebration as we know it, however — the opening ceremonies, marching athletes, Olympic torch run, etc., — were created by the Nazis’ propaganda office for the 1936 games.  The World Cup, on the other hand, began in 1934 in Mussolini’s Italy with a tournament rigged to guarantee an Italian win.

More worrisome than what sports prepare athletes for is what they may prepare fans for.  There are great similarities between rooting for a sports team, especially a national sports team, and rooting for a national military.  “As soon as the question of prestige arises,” wrote George Orwell, whom Zirin quotes, “as soon as you feel that you and some larger unit will be disgraced if you lose, the most savage combative instincts are aroused.”  And there is prestige not just in “your” team winning, but in “your” nation hosting the grand event.  Zirin spoke with people in Brazil who were of mixed minds, opposing the injustices the Olympics bring but still glad the Olympics was coming to Brazil.  Zirin also quotes Brazilian politicians who seem to share the goal of national prestige.

At some point the prestige and the profits and the corruption and the commercialism seem to take over the athletics.  “[T]he Olympics aren’t about  sport any more than the Iraq war was about democracy,” Zirin writes. “The Olympics are not about athletes.  And they’re definitely not about bringing together the ‘community of nations.’ They are a neoliberal Trojan horse aimed at bringing in business and rolling back the most basic civil liberties.”

And yet … And yet … the damn thing still is about sports, no matter what else it’s about, no matter what alternative venues for sports are possible or imaginable.  The fact remains that there are great athletes engaged in great sporting activities in the Olympics and the World Cup.  The attraction of the circus is still real, even when we know it’s at the expense of bread, rather than accompanying bread.  And dangerous as the circus may be for the patriotic and militarist minded — just as a sip of beer might be dangerous to an alcoholic — one has the darndest time trying to find anything wrong with one’s own appreciation for sports; at least I do.

The Olympics are also decidedly less militaristic — or at least overtly militaristic — than U.S. sports like football, baseball, and basketball, with their endless glorification of the U.S. military.  “Thank you to our service men and women watching in 175 countries and keeping us safe.” The Olympics is also one of the few times that people in the U.S. see people from other countries on their televisions without wars being involved.

Zirin’s portrait of Brazil leaves me with similarly mixed sentiments. His research is impressive. He describes a rich and complex history.  Despite all the corruption and cruelty, I can’t help being attracted to a nation that won its independence without a war, abolished slavery without a war, reduces poverty by giving poor people money, denounces U.S. drone murders at the U.N., joins with Turkey to propose an agreement between the United States and Iran, joins with Russia, India, and China to resist U.S. imperialism; and on the same day this year that the U.S. Federal Communications Commission proposed ending the open internet, Brazil created the world’s first internet bill of rights. For a deeply flawed place, there’s a lot to like.

It’s also hard to resist a group of people that pushes back against the outrages being imposed on it.  When a bunch of houses in a poor Brazilian neighborhood were slated for demolition, an artist took photos of the residents, blew them up, and pasted them on the walls of the houses, finally shaming the government into letting the houses stand.  That approach to injustice, much like the Pakistani artists’ recent placement of an enormous photo of a drone victim in a field for U.S. drone pilots to see, has huge potential.

Now, the question is how to display the Olympics’ victims to enough Olympics fans around the world so that no new nation will be able to accept this monster on the terms it has been imposing.

David Swanson is the author of “When the World Outlawed War,” “War Is A Lie” and “Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union.” He blogs at http://davidswanson.org and http://warisacrime.org and works for the online (more…)

Putin’ it to Putin: the Russian Oligarchy and the Primitive Accumulation of Capital May 1, 2014

Posted by rogerhollander in Capitalism, Economic Crisis, Labor, Marx and Marxism, Russia, Socialism.
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BjCHxNICMAAaVSj.jpg largeMeet the 11 Putin cronies and Ukrainian officials facing U.S. sanctions: http://t.co/0WOAuGtABa http://t.co/30T2yhxH4p

 

I don’t intend to go into the politics and economics of the situation in the Ukraine other than to point out the fact that the threats coming from the U.S. president against the Russian government seem to center on economic sanctions against the friends, associates, colleagues – well, let’s use the correct term: cronies – of the Russian president, Vladimir Putin. In other words, the Russian Mafia/Oligarchy. The New York Times reports that Obama’s spies are hard at work to discover Putin’s own fortune. What this circus amounts to then is the government of the nation with the world’s largest collection of parasitic crony capitalists attacking its rival nation’s crony capitalists. Russian Billionaires, take cover!

What his begs, however, is a question that no one seems to be asking: to wit, how did these billionaires come to be billionaires in the first place in Russia’s transition from Soviet “Communism” to Reaganite “Capitalism?” Or, more importantly, what this implies theoretically and philosophically about the very nature of capitalism itself. It indeed takes us to the heart of the origins of capitalism, what is referred to as “primitive accumulation” of capital, which is what this article is all about.

First we have to backtrack with a short discussion of economics. I assert that, despite popular opinion, economics is indeed a science in the sense that its elements can be measured and independently verified. The problem with Economic’s bad reputation is that the vast majority of economists are of the same ilk as biological “Creationists” and atmospheric climate change deniers. What they fail to take into account are the very dynamics that make capitalism what it is (usually in the form of ignoring obvious class divisions or making a fetish of the market place instead of focusing on what is fundamental in any economy, i.e. production).

Definitions are important. A simple but scientifically accurate definition of capital: vast accumulations of wealth (value) that today come in various forms, real estate, industrial and other corporate wealth, high finance, etc. Capital ISM then is the system of producing goods and services based upon the relationship between those who own and manage capital and the rest of us, who do the work that is responsible for the increase in value in the first place; that is, the relationship between capital and labor. It is a relationship that is hierarchic and despotic; that is, inherently undemocratic. A simple, yet accurate definition of socialism (the antithesis to capitalism), then, would be not state ownership of the means of production (as we saw in the former Soviet Union), but economic democracy, that is, direct ownership and control by those who produce the value. Note: it was not Karl Marx, but rather Adam Smith who demonstrated that new value added to land and natural resources can only come from living human labor.

Anyone who has ever had a job knows that the boss is the boss (be it the actual owner or his/her designates). You do not get to vote on what you do. You do what you are told, or you are shown the door (only union organization has mitigated this phenomenon to a degree). There are others waiting to take your place if you don’t like it. You do not get to decide what is produced (be it goods or services), how it is produced, or under what conditions (e.g. safety). But most importantly, you are paid for your creative effort as little as your owner/boss can get away with, and the rest of the value you create goes into his or her pocket (the pockets of heirs, stock holders, bankers, etc., i.e. capitalism’s parasites). This is what Karl Marx called surplus value (and what capitalists call profit), and it is the reason for the reality that we have always been aware of but are coming to see in greater relief more and more every day: the rich getting richer and the poor getting poorer. One example: the geometric increase in the proportion of CEO salary in relation to worker salary (according to the Washington Post, “The ratio of CEO pay to average worker pay is 273-1, down from a high of 383-1 in 2000, but up from 20-1 in 1965.” http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/26/congrats-ceos-youre-making-273-times-the-pay-of-the-average-worker/). In other words, the average worker has to put in about six weeks of eight hour days to earn what your typical CEO earns in one hour.

 
Forget all the crap that has been that has been shoved down your throat since you came off your mother’s breast (or the bottle) about the wonders of capitalism: the miracle of free enterprise, the invisible hand that makes everything just, the value of competition, capitalists taking all the risk, capitalists creating jobs – as if without capitalists we would all stop working to produce what we need to survive and thrive. Forget about free markets: there haven’t been free markets since Jesus threw the money changers out of the Temple. The deck (the economy) is stacked in favor of capital; capital essentially owns government and uses it to maintain its strangle hold on the rest of us – economically and militarily. And this was true long before the US Supreme Court made corporations into people.

So now let’s go back to “primitive accumulation.” How did there come to be such huge fortunes, such accumulated wealth in the first place; in other words, how did the feudal economy become a capitalist economy?

Here are the contrasting explanations from Adam Smith and Karl Marx:

“In the midst of all the exactions of government, capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their universal, continual, and uninterrupted effort to better their own condition. It is this effort, protected by law and allowed by liberty to exert itself in the manner that is most advantageous, which has maintained the progress of England towards opulence and improvement in almost all former times. …

“It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense. … They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.”

Adam Smith, Wealth of Nations, Book II, Chapter II
(cited in Toronto Globe and Mail, April 5, 2008)

 
“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s Anti-Jacobin War, and is still going on in the opium wars against China, &c. The different moments of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive in a systematic combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with the new one. It is itself an economic power.”

Karl Marx, Capital, Vol . I, Chapter 31

Karl Marx was a philosopher, whose primary concern was human freedom. In order to understand the un-freedom that was obvious to him in his age as well as it is to us in our own, he had to and did become a full-fledged historian and economist. He read, digested, analyzed and critiqued not only the famous economists like Adam Smith, Malthus and Ricardo, but the entire body of political economy of his day. Needless to say, with respect to the primitive accumulation of capital, he was aware and demonstrated how it was ongoing; and we see the unbelievably gigantic proportions it has taken in our own time.

The political economists like Adam Smith, showed us how only human labor can create value, then they proceeded to ignore human labor as they obsessed on the market placed and the distribution of goods and services. Karl Marx corrected the fundamental error by show us scientifically the inherent inequality and un-freedom of capitalist economy. It is ironic that Marxism is often criticized for ignoring the individual in favour of the community, whereas it was Marx who demonstrated how capitalist productive relationship created misery for individuals within their community. It was Marx, for example, who showed us that even if a nation’s economy may be thriving, suffering and injustice can abound for the majority of its citizens. It is the notion of the “economy” that is abstract and ignores the individual, not the notion of community. This is a fact that the vast majority of economists ignore completely.

And anyone who believes that “democratic” political institutions in the form of periodic elections can tame this insane and out of control Monster known as capitalism, is either naïve or uninformed (for which we can thank our bought and paid for mass media and institutions of higher learning).

Now we are ready to go back to Boris Yeltsin, Putin and the collapse of the Soviet Union. Under Stalin, the Soviet Union had become the opposite of its revolutionary class destroying origins. The Soviet State (brutally tyrannical under Stalin, then reformed and softened under Khrushchev) became the single owner of value, i.e. capital, in what is almost universally recognized theoretically as State Capitalism. With the collapse of the Soviet empire, which resulted from massive popular uprisings (aided and abetted by the democratic and progressive reforms of Gorbachev), things could have gone either one of two ways. All of Soviet capital, all that enormous wealth (value) could have been democratized, that is decentralized and put democratically into the hands of those who worked in the various industries (and who create the wealth in the first place). Any genuine Marxist left in Russia would have reminded the angry masses that the original soviets were democratic organizations made up respectively of industrial workers, peasant workers, and soldiers. With the theoretical and organizational backing of the Bolshevik Party, they were the impulse that overthrew the Tsar and established a union of soviets, which for a few years before the Stalin coup was striving for worker democracy at the same time as it was at war with the rest of the capitalist world, fighting for its very survival.

Alas, things didn’t go in that direction. They went instead in the direction of looting of the state’s enormous resources by those Adam Smith like industrious Communist apparatchiks cum Mafia. We see them everywhere today, as they have moved their newly gained capital around the world. We saw them at the Sochi Olympics and we see them as owners of American professional sports teams.

As with the Spanish Conquistadores and the slave traders of African skin, their wealth is stolen. That is what is meant by the slogan “property is theft.” Hegelian Marxism talks of continuing negations, ongoing revolution, if you will. The overthrow of the former Soviet Union was a first negation; the second one did not happen at the same time. We see the same phenomenon with the Ukraine’s “Orange Revolution,” Egypt’s “Arab Spring,” the Sandinistas in Nicaragua, etc.

But some day, if the capitalists do not destroy the earth first with nuclear or environmental catastrophe, it will happen. The capitalist way of creating and sharing wealth will come crumbling down simply because it is not sustainable. Capital will no longer exist, just working people producing and owning outright what they produce. When and how this will happen no one can say. But if it doesn’t, we are surely doomed.

One more theoretical point. It never ceases to amaze me how otherwise intelligent academics and pundits fail to understand the obvious contradiction between political democracy and capitalist economics. It is as if democratic institutions, however primitive, can somehow ensure freedom and justice, while at the same time working people are being systematically bilked by the capitalist Behemoth. Democracy, which is in fact the most highly advanced political notion, is just that, i.e. political. Capitalist economy is just that, i.e. economy. They are two entirely different animals, notwithstanding the fact that they are intimately entwined. Failing to understand this, leftists, progressives, liberals, etc., make a fetish out of the concept of democracy, ignore the economic implications of capital, and end up being entirely irrelevant. Note: capitalism cannot be reformed because it is inherently unjust and undemocratic.

For those who are interested in a truly scientific understanding of capitalist economic relations as outlined in Marx’s Capital, I recommend the first four chapters of Raya Dunayevskaya’s “Marxism and Freedom: from 1776 until Today,” Humanity Books, 2000. Of course, there is no substitute for reading Marx in the original, which I acknowledge is not an easy task. I recommend beginning with the so-called Early Writings or Economic Manuscripts.

 

One-Percent Jokes and Plutocrats in Drag: What I Saw When I Crashed a Wall Street Secret Society February 20, 2014

Posted by rogerhollander in Capitalism, Economic Crisis.
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Roger’s note: You know the phrase “how the other half lives,” well this is a peek at how the 1% live.  These are the heartless billionaires who pilot the capitalist death ship.  I guess it is only natural that in their character (or lack thereof) they would reflect the very heartless inhumanity of the system they own and operate. Enjoy.

By 

Recently, our nation’s financial chieftains have been feeling a little unloved. Venture capitalists are comparing the persecution of the rich to the plight ofJews at Kristallnacht, Wall Street titans are saying that they’re sick of being beaten up, and this week, a billionaire investor, Wilbur Ross, proclaimed that “the 1 percent is being picked on for political reasons.”

Ross’s statement seemed particularly odd, because two years ago, I met Ross at an event that might single-handedly explain why the rest of the country still hates financial tycoons – the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi.

Adapted
from Kevin Roose’s book Young Money, published today by Grand Central Publishing.

“Good evening, Exalted High Council, former Grand Swipes, Grand Swipes-in-waiting, fellow Wall Street Kappas, Kappas from the Spring Street and Montgomery Street chapters, and worthless neophytes!”

It was January 2012, and Ross, wearing a tuxedo and purple velvet moccasins embroidered with the fraternity’s Greek letters, was standing at the dais of the St. Regis Hotel ballroom, welcoming a crowd of two hundred wealthy and famous Wall Street figures to the Kappa Beta Phi dinner. Ross, the leader (or “Grand Swipe”) of the fraternity, was preparing to invite 21 new members — “neophytes,” as the group called them — to join its exclusive ranks.

Looking up at him from an elegant dinner of rack of lamb and foie gras were many of the most famous investors in the world, including executives from nearly every too-big-to-fail bank, private equity megafirm, and major hedge fund. AIG CEO Bob Benmosche was there, as were Wall Street superlawyer Marty Lipton and Alan “Ace” Greenberg, the former chairman of Bear Stearns. And those were just the returning members. Among the neophytes were hedge fund billionaire and major Obama donor Marc Lasry and Joe Reece, a high-ranking dealmaker at Credit Suisse. [To see the full Kappa Beta Phi member list, click here.] All told, enough wealth and power was concentrated in the St. Regis that night that if you had dropped a bomb on the roof, global finance as we know it might have ceased to exist.

During his introductory remarks, Ross spoke for several minutes about the legend of Kappa Beta Phi – how it had been started in 1929 by “four C+ William and Mary students”; how its crest, depicting a “macho right hand in a proper Savile Row suit and a Turnbull and Asser shirtsleeve,” was superior to that of its namesake Phi Beta Kappa (Ross called Phi Beta Kappa’s ruffled-sleeve logo a “tacit confession of homosexuality”); and how the fraternity’s motto, “Dum vivamus edimus et biberimus,” was Latin for “While we live, we eat and drink.”

On cue, the financiers shouted out in a thundering bellow: “DUM VIVAMUS EDIMUS ET BIBERIMUS.”

Click here to listen: https://soundcloud.com/daily-intelligencer/wilbur-ross/s-iFMBX
The only person not saying the chant along with Ross was me — a journalist who had sneaked into the event, and who was hiding out at a table in the back corner in a rented tuxedo.
Several Kappas at the table next to me, presumably discussing the coming plutocracy.

I’d heard whisperings about the existence of Kappa Beta Phi, whose members included both incredibly successful financiers (New York City’s Mayor Michael Bloomberg, former Goldman Sachs chairman John Whitehead, hedge-fund billionaire Paul Tudor Jones) and incredibly unsuccessful ones (Lehman Brothers CEO Dick Fuld, Bear Stearns CEO Jimmy Cayne, former New Jersey governor and MF Global flameout Jon Corzine). It was a secret fraternity, founded at the beginning of the Great Depression, that functioned as a sort of one-percenter’s Friars Club. Each year, the group’s dinner features comedy skits, musical acts in drag, and off-color jokes, and its group’s privacy mantra is “What happens at the St. Regis stays at the St. Regis.” For eight decades, it worked. No outsider in living memory had witnessed the entire proceedings firsthand.

A Kappa neophyte (left) chats up a vet.

I wanted to break the streak for several reasons. As part of my research for my book,Young Money, I’d been investigating the lives of young Wall Street bankers – the 22-year-olds toiling at the bottom of the financial sector’s food chain. I knew what made those people tick. But in my career as a financial journalist, one question that proved stubbornly elusive was what happened to Wall Streeters as they climbed the ladder to adulthood. Whenever I’d interviewed CEOs and chairmen at big Wall Street firms, they were always too guarded, too on-message and wrapped in media-relations armor to reveal anything interesting about the psychology of the ultra-wealthy. But if I could somehow see these barons in their natural environment, with their defenses down, I might be able to understand the world my young subjects were stepping into.

So when I learned when and where Kappa Beta Phi’s annual dinner was being held, I knew I needed to try to go.

Getting in was shockingly easy — a brisk walk past the sign-in desk, and I was inside cocktail hour. Immediately, I saw faces I recognized from the papers. I picked up an event program and saw that there were other boldface names on the Kappa Beta Phi membership roll — among them, then-Citigroup CEO Vikram Pandit, BlackRock CEO Larry Fink, Home Depot billionaire Ken Langone, Morgan Stanley bigwig Greg Fleming, and JPMorgan Chase vice chairman Jimmy Lee. Any way you count, this was one of the most powerful groups of business executives in the world. (Since I was a good 20 years younger than any other attendee, I suspect that anyone taking note of my presence assumed I was a waiter.)

I hadn’t counted on getting in to the Kappa Beta Phi dinner, and now that I had gotten past security, I wasn’t sure quite what to do. I wanted to avoid rousing suspicion, and I knew that talking to people would get me outed in short order. So I did the next best thing — slouched against a far wall of the room, and pretended to tap out emails on my phone.

The 2012 Kappa Beta Phi neophyte class.

After cocktail hour, the new inductees – all of whom were required to dress in leotards and gold-sequined skirts, with costume wigs – began their variety-show acts. Among the night’s lowlights:

• Paul Queally, a private-equity executive with Welsh, Carson, Anderson, & Stowe, told off-color jokes to Ted Virtue, another private-equity bigwig with MidOcean Partners. The jokes ranged from unfunny and sexist (Q: “What’s the biggest difference between Hillary Clinton and a catfish?” A: “One has whiskers and stinks, and the other is a fish”) to unfunny and homophobic (Q: “What’s the biggest difference between Barney Frank and a Fenway Frank?” A: “Barney Frank comes in different-size buns”).

Click here to listen: https://soundcloud.com/daily-intelligencer/queally-jokes/s-qxUq6

• Bill Mulrow, a top executive at the Blackstone Group (who was later appointed chairman of the New York State Housing Finance Agency), and Emil Henry, a hedge fund manager with Tiger Infrastructure Partners and former assistant secretary of the Treasury, performed a bizarre two-man comedy skit. Mulrow was dressed in raggedy, tie-dye clothes to play the part of a liberal radical, and Henry was playing the part of a wealthy baron. They exchanged lines as if staging a debate between the 99 percent and the 1 percent. (“Bill, look at you! You’re pathetic, you liberal! You need a bath!” Henry shouted. “My God, you callow, insensitive Republican! Don’t you know what we need to do? We need to create jobs,” Mulrow shot back.)

• David MooreMarc Lasry, and Keith Meister — respectively, a holding company CEO, a billionaire hedge-fund manager, and an activist investor — sang a few seconds of a finance-themed parody of “YMCA” before getting the hook.

• Warren Stephens, an investment banking CEO, took the stage in a Confederate flag hat and sang a song about the financial crisis, set to the tune of “Dixie.” (“In Wall Street land we’ll take our stand, said Morgan and Goldman. But first we better get some loans, so quick, get to the Fed, man.”)

Click here to listen: https://soundcloud.com/daily-intelligencer/dixie
A few more acts followed, during which the veteran Kappas continued to gorge themselves on racks of lamb, throw petits fours at the stage, and laugh uproariously. Michael Novogratz, a former Army helicopter pilot with a shaved head and a stocky build whose firm, Fortress Investment Group, had made him a billionaire, was sitting next to me, drinking liberally and annotating each performance with jokes and insults.

“Can you fuckin’ believe Lasry up there?” Novogratz asked me. I nodded. He added, “He just gave me a ride in his jet a month ago.”

The neophytes – who had changed from their drag outfits into Mormon missionary costumes — broke into their musical finale: a parody version of “I Believe,” the hit ballad from The Book of Mormon, with customized lyrics like “I believe that God has a plan for all of us. I believe my plan involves a seven-figure bonus.” Amused, I pulled out my phone, and began recording the proceedings on video. Wrong move.

The grand finale, a parody of “I Believe” from The Book of Mormon
Click here to listen: https://soundcloud.com/daily-intelligencer/i-believe/s-GmzF7
“Who the hell are you?” Novogratz demanded.

I felt my pulse spike. I was tempted to make a run for it, but – due to the ethics code of the New York Times, my then-employer – I had no choice but to out myself.

“I’m a reporter,” I said.

Novogratz stood up from the table.

“You’re not allowed to be here,” he said.

I, too, stood, and tried to excuse myself, but he grabbed my arm and wouldn’t let go.

“Give me that or I’ll fucking break it!” Novogratz yelled, grabbing for my phone, which was filled with damning evidence. His eyes were bloodshot, and his neck veins were bulging. The song onstage was now over, and a number of prominent Kappas had rushed over to our table. Before the situation could escalate dangerously, a bond investor and former Grand Swipe named Alexandra Lebenthal stepped in between us. Wilbur Ross quickly followed, and the two of them led me out into the lobby, past a throng of Wall Street tycoons, some of whom seemed to be hyperventilating.

Once we made it to the lobby, Ross and Lebenthal reassured me that what I’d just seen wasn’t really a group of wealthy and powerful financiers making homophobic jokes, making light of the financial crisis, and bragging about their business conquests at Main Street’s expense. No, it was just a group of friends who came together to roast each other in a benign and self-deprecating manner. Nothing to see here.

But the extent of their worry wasn’t made clear until Ross offered himself up as a source for future stories in exchange for my cooperation.

“I’ll pick up the phone anytime, get you any help you need,” he said.

“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”

I wasn’t going to be bribed off my story, but I understood their panic.  Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.

After several more minutes spent trying to do damage control, Ross and Lebenthal escorted me out of the St. Regis.

As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what I’d just seen.

The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sector’s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.

The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.

The last thought I had, and the saddest, was that many of these self-righteous Kappa Beta Phi members had surely been first-year bankers once. And in the 20, 30, or 40 years since, something fundamental about them had changed. Their pursuit of money and power had removed them from the larger world to the sad extent that, now, in the primes of their careers, the only people with whom they could be truly themselves were a handful of other prominent financiers.

Perhaps, I realized, this social isolation is why despite extraordinary evidence to the contrary, one-percenters like Ross keep saying how badly persecuted they are. When you’re a member of the fraternity of money, it can be hard to see past the foie gras to the real world.

Copyright 2014 by Kevin Roose. Reprinted by permission of Grand Central Publishing. All rights reserved.

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