Peru Suspends Decree That Fueled Amazon Violence

compiled from reports by Agence France Presse, Indymedia, and Democracy Now!
Peruvian lawmakers suspended one of several controversial laws that eased restrictions on lumber harvesting in the Amazon rain forest, days after it sparked clashes between police and indigenous protesters, killing dozens of people.

The legislature agreed by a 59 to 49 vote to suspend Decree 1090 -- dubbed the "Law of the Jungle" -- that covers forestry and fauna in Peru's northeastern Amazon rain forest, said Javier Velasquez, the head of Peru's single-chamber Congress.

Ten decrees opening indigenous lands to resource extraction are vehemently opposed by the approximately half-million Indians of 65 ethnic groups who live there. They see the development of the jungle as an assault on their way of life and have been holding protests since April across the region. The decrees were issued in 2007 and 2008 by Peruvian president Alan Garcia to bring Peruvian regulations in synch with conditions imposed by the US-Peruvian Free Trade Act.

The Amazon protest peaked Friday and Saturday when some 400 police officers moved in to clear protesters blocking a highway near the northern city of Bagua. Protesters fought back. According to Indymedia, a raid by police to free 38 police hostages taken by protesters resulted in the deaths of nine of the hostages. (AFP reports that the hostages were killed by the protestors). Subsequent reports on Indymedia say that as many as 84 protesters have been killed, with another 150 arrested.

The decrees were originally to be suspended for 90 days, but in the final vote legislators agreed on an indefinite suspension "to negotiate without pressure," said Aurelio Pastor, a legislator with
President Alan Garcia's APRA party.

Angry legislators with the opposition Nationalist Party (PNP) called for the decrees to be overturned, and waved signs as they held a protest in the chamber after the vote.

"No to transnational (corporations) in the Amazon," read one sign. "The land and water are not for sale," read another.

The vote suspending the decree is seen as a compromise allowing the government to resume talks with the protesting indigenous groups who have been blocking key regional highways, said spokesmen for legislators that voted for the measure.

The vote also comes on the eve of a strike called by the country's powerful leftist labor umbrella group, the General Confederation of Workers of Peru (CGTP). Other protest marches, including those held by indigenous protesters in Amazon cities and towns, are planned in Peru's main cities.

Internationally, groups supporting the protesters are calling for solidarity protests at Peruvian consulates and embassies and revocation of the Peru FTA. Amazon Watch asks individuals to send protest emails to key people in the Peruvian government through this link: http://amazonwatch.org/peru-action-alert.php

Meanwhile some 3,000 Indians from 25 ethnic groups continue to block a key Amazon highway linking the cities of Tarapoto and Yurimaguas, some 700 kilometers (435 miles) north of Lima.

"We want an immediate derogation of those laws," said Segundo Pizango, an apu -- indigenous leader -- at a roadblock near Yurimaguas.

The repercussions of the violence have rocked the government, with Women's Affairs Minister Carmen Vildoso resigning Monday in protest over the government's crackdown, and Prime Minister Yehude Simon planning to resign at a future date when protests ease.

The crisis even extended its reach to foreign affairs after Nicaragua granted political asylum to Alberto Pizango, the main indigenous protest leader, who earlier took refuge in Managua's
embassy in Lima. The Garcia administration has issued an arrest warrant for Pizango on charges of sedition, conspiracy and rebellion.

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The Real Boston Tea Party was an Anti-Corporate Revolt

by Thom Hartmann. Posted on Wednesday, April 15, 2009 at CommonDreams.org

CNBC Correspondent Rick Santelli called for a "Chicago Tea Party" on Feb 19th in protesting President Obama's plan to help homeowners in trouble. Santelli's call was answered by the right-wing group FreedomWorks, which funds campaigns promoting big business interests, and is the opposite of what the real Boston Tea Party was. FreedomWorks was funded in 2004 by Dick Armey (former Republican House Majority leader & lobbyist); consolidated Citizens for a Sound Economy, funded by the Koch family; and Empower America, a lobbying firm, that had fought against health care and minimum-wage efforts while hailing deregulation.

Anti-tax "tea party" organizers are delivering one million tea bags to a Washington, D.C., park Wednesday morning - to promote protests across the country by people they say are fed up with high taxes and excess spending.

The real Boston Tea Party was a protest against huge corporate tax cuts for the British East India Company, the largest trans-national corporation then in existence. This corporate tax cut threatened to decimate small Colonial businesses by helping the BEIC pull a Wal-Mart against small entrepreneurial tea shops, and individuals began a revolt that kicked-off a series of events that ended in the creation of The United States of America.

They covered their faces, massed in the streets, and destroyed the property of a giant global corporation. Declaring an end to global trade run by the East India Company that was destroying local economies, this small, masked minority started a revolution with an act of rebellion later called the Boston Tea Party.

On a cold November day in 1773, activists gathered in a coastal town. The corporation had gone too far, and the two thousand people who'd jammed into the meeting hall were torn as to what to do about it. Unemployment was exploding and the economic crisis was deepening; corporate crime, governmental corruption spawned by corporate cash, and an ethos of greed were blamed. "Why do we wait?" demanded one at the meeting, a fisherman named George Hewes. "The more we delay, the more strength is acquired" by the company and its puppets in the government. "Now is the time to prove our courage," he said. Soon, the moment came when the crowd decided for direct action and rushed into the streets.

That is how I tell the story of the Boston Tea Party, now that I have read a first-person account of it. While striving to understand my nation's struggles against corporations, in a rare book store I came upon a first edition of "Retrospect of the Boston Tea Party with a Memoir of George R.T. Hewes, a Survivor of the Little Band of Patriots Who Drowned the Tea in Boston Harbor in 1773," and I jumped at the chance to buy it. Because the identities of the Boston Tea Party participants were hidden (other than Samuel Adams) and all were sworn to secrecy for the next 50 years, this account is the only first-person account of the event by a participant that exists. As I read, I began to understand the true causes of the American Revolution.

I learned that the Boston Tea Party resembled in many ways the growing modern-day protests against transnational corporations and small-town efforts to protect themselves from chain-store retailers or factory farms. The Tea Party's participants thought of themselves as protesters against the actions of the multinational East India Company.

Although schoolchildren are usually taught that the American Revolution was a rebellion against "taxation without representation," akin to modern day conservative taxpayer revolts, in fact what led to the revolution was rage against a transnational corporation that, by the 1760s, dominated trade from China to India to the Caribbean, and controlled nearly all commerce to and from North America, with subsidies and special dispensation from the British crown.

Hewes notes: "The [East India] Company received permission to transport tea, free of all duty, from Great Britain to America..." allowing it to wipe out New England-based tea wholesalers and mom-and-pop stores and take over the tea business in all of America. "Hence," wrote, "it was no longer the small vessels of private merchants, who went to vend tea for their own account in the ports of the colonies, but, on the contrary, ships of an enormous burthen, that transported immense quantities of this commodity ... The colonies were now arrived at the decisive moment when they must cast the dye, and determine their course ... "

A pamphlet was circulated through the colonies called The Alarm and signed by an enigmatic "Rusticus." One issue made clear the feelings of colonial Americans about England's largest transnational corporation and its behavior around the world: "Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. They have levied War, excited Rebellions, dethroned lawful Princes, and sacrificed Millions for the Sake of Gain. The Revenues of Mighty Kingdoms have entered their Coffers. And these not being sufficient to glut their Avarice, they have, by the most unparalleled Barbarities, Extortions, and Monopolies, stripped the miserable Inhabitants of their Property, and reduced whole Provinces to Indigence and Ruin. Fifteen hundred Thousands, it is said, perished by Famine in one Year, not because the Earth denied its Fruits; but [because] this Company and their Servants engulfed all the Necessaries of Life, and set them at so high a Price that the poor could not purchase them."

After protesters had turned back the Company's ships in Philadelphia and New York, Hewes writes, "In Boston the general voice declared the time was come to face the storm."

The citizens of the colonies were preparing to throw off one of the corporations that for almost 200 years had determined nearly every aspect of their lives through its economic and political power. They were planning to destroy the goods of the world's largest multinational corporation, intimidate its employees, and face down the guns of the government that supported it.

The queen's corporation
The East India Company's influence had always been pervasive in the colonies. Indeed, it was not the Puritans but the East India Company that founded America. The Puritans traveled to America on ships owned by the East India Company, which had already established the first colony in North America, at Jamestown, in the Company-owned Commonwealth of Virginia, stretching from the Atlantic Ocean to the Mississippi. The commonwealth was named after the "Virgin Queen," Elizabeth, who had chartered the corporation.

Elizabeth was trying to make England a player in the new global trade sparked by the European "discovery" of the Americas. The wealth Spain began extracting from the New World caught the attention of the European powers. In many European countries, particularly Holland and France, consortiums were put together to finance ships to sail the seas. In 1580, Queen Elizabeth became the largest shareholder in The Golden Hind, a ship owned by Sir Francis Drake.

The investment worked out well for Queen Elizabeth. There's no record of exactly how much she made when Drake paid her share of the Hind's dividends to her, but it was undoubtedly vast, since Drake himself and the other minor shareholders all received a 5000 percent return on their investment. Plus, because the queen placed a maximum loss to the initial investors of their investment amount only, it was a low-risk investment (for the investors at least-creditors, such as suppliers of provisions for the voyages or wood for the ships, or employees, for example, would be left unpaid if the venture failed, just as in a modern-day corporation). She was endorsing an investment model that led to the modern limited-liability corporation.

After making a fortune on Drake's expeditions, Elizabeth started looking for a more permanent arrangement. She authorized a group of 218 London merchants and noblemen to form a corporation. The East India Company was born on December 31, 1600.

By the 1760s, the East India Company's power had grown massive and worldwide. However, this rapid expansion, trying to keep ahead of the Dutch trading companies, was a mixed blessing, as the company went deep in debt to support its growth, and by 1770 found itself nearly bankrupt.

The company turned to a strategy that multinational corporations follow to this day: They lobbied for laws that would make it easy for them to put their small-business competitors out of business.

Most of the members of the British government and royalty (including the king) were stockholders in the East India Company, so it was easy to get laws passed in its interests. Among the Company's biggest and most vexing problems were American colonial entrepreneurs, who ran their own small ships to bring tea and other goods directly into America without routing them through Britain or through the Company. Between 1681 and 1773, a series of laws were passed granting the Company monopoly on tea sold in the American colonies and exempting it from tea taxes. Thus, the Company was able to lower its tea prices to undercut the prices of the local importers and the small tea houses in every town in America. But the colonists were unappreciative of their colonies being used as a profit center for the multinational corporation.

Boston's million-dollar tea party
And so, Hewes says, on a cold November evening of 1773, the first of the East India Company's ships of tax-free tea arrived. The next morning, a pamphlet was widely circulated calling on patriots to meet at Faneuil Hall to discuss resistance to the East India Company and its tea. "Things thus appeared to be hastening to a disastrous issue. The people of the country arrived in great numbers, the inhabitants of the town assembled. This assembly, on the 16th of December 1773, was the most numerous ever known, there being more than 2000 from the country present," said Hewes.

The group called for a vote on whether to oppose the landing of the tea. The vote was unanimously affirmative, and it is related by one historian of that scene "that a person disguised after the manner of the Indians, who was in the gallery, shouted at this juncture, the cry of war; and that the meeting dissolved in the twinkling of an eye, and the multitude rushed in a mass to Griffin's wharf."

That night, Hewes dressed as an Indian, blackening his face with coal dust, and joined crowds of other men in hacking apart the chests of tea and throwing them into the harbor. In all, the 342 chests of tea-over 90,000 pounds-thrown overboard that night were enough to make 24 million cups of tea and were valued by the East India Company at 9,659 Pounds Sterling or, in today's currency, just over $1 million.

In response, the British Parliament immediately passed the Boston Port Act stating that the port of Boston would be closed until the citizens of Boston reimbursed the East India Company for the tea they had destroyed. The colonists refused. A year and a half later, the colonists would again state their defiance of the East India Company and Great Britain by taking on British troops in an armed conflict at Lexington and Concord (the "shots heard 'round the world") on April 19, 1775.

That war-finally triggered by a transnational corporation and its government patrons trying to deny American colonists a fair and competitive local marketplace-would end with independence for the colonies.

The revolutionaries had put the East India Company in its place with the Boston Tea Party, and that, they thought, was the end of that. Unfortunately, the Boston Tea Party was not the end; within 150 years, during the so-called Gilded Age, powerful rail, steel, and oil interests would rise up to begin a new form of oligarchy, capturing the newly-formed Republican Party in the 1880s, and have been working to establish a permanent wealthy and ruling class in this country ever since.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. His newest book is Threshold: The Crisis of Western Culture. Learn more at www.thomhartmann.com.

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Michael Parenti: Capitalism's Self-inflicted Apocalypse

Posted January 2009 at michaelparenti.org

After the overthrow of communist governments in Eastern Europe, capitalism was paraded as the indomitable system that brings prosperity and democracy, the system that would prevail unto the end of history.

The present economic crisis, however, has convinced even some prominent free-marketeers that something is gravely amiss. Truth be told, capitalism has yet to come to terms with several historical forces that cause it endless trouble: democracy, prosperity, and capitalism itself, the very entities that capitalist rulers claim to be fostering.

Plutocracy vs. Democracy
Let us consider democracy first. In the United States we hear that capitalism is wedded to democracy, hence the phrase, "capitalist democracies." In fact, throughout our history there has been a largely antagonistic relationship between democracy and capital concentration. Some eighty years ago Supreme Court Justice Louis Brandeis commented, "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both." Moneyed interests have been opponents not proponents of democracy.

The Constitution itself was fashioned by affluent gentlemen who gathered in Philadelphia in 1787 to repeatedly warn of the baneful and dangerous leveling effects of democracy. The document they cobbled together was far from democratic, being shackled with checks, vetoes, and requirements for artificial super majorities, a system designed to blunt the impact of popular demands.

In the early days of the Republic the rich and well-born imposed property qualifications for voting and officeholding. They opposed the direct election of candidates (note, their Electoral College is still with us). And for decades they resisted extending the franchise to less favored groups such as propertyless working men, immigrants, racial minorities, and women.

Today conservative forces continue to reject more equitable electoral features such as proportional representation, instant runoff, and publicly funded campaigns. They continue to create barriers to voting, be it through overly severe registration requirements, voter roll purges, inadequate polling accommodations, and electronic voting machines that consistently "malfunction" to the benefit of the more conservative candidates.

At times ruling interests have suppressed radical publications and public protests, resorting to police raids, arrests, and jailings—applied most recently with full force against demonstrators in St. Paul, Minnesota, during the 2008 Republican National Convention.

The conservative plutocracy also seeks to rollback democracy’s social gains, such as public education, affordable housing, health care, collective bargaining, a living wage, safe work conditions, a non-toxic sustainable environment; the right to privacy, the separation of church and state, freedom from compulsory pregnancy, and the right to marry any consenting adult of one’s own choosing.

About a century ago, US labor leader Eugene Victor Debs was thrown into jail during a strike. Sitting in his cell he could not escape the conclusion that in disputes between two private interests, capital and labor, the state was not a neutral arbiter. The force of the state--with its police, militia, courts, and laws—was unequivocally on the side of the company bosses. From this, Debs concluded that capitalism was not just an economic system but an entire social order, one that rigged the rules of democracy to favor the moneybags.

Capitalist rulers continue to pose as the progenitors of democracy even as they subvert it, not only at home but throughout Latin America, Africa, Asia, and the Middle East. Any nation that is not "investor friendly," that attempts to use its land, labor, capital, natural resources, and markets in a self-developing manner, outside the dominion of transnational corporate hegemony, runs the risk of being demonized and targeted as "a threat to U.S. national security."

Democracy becomes a problem for corporate America not when it fails to work but when it works too well, helping the populace move toward a more equitable and livable social order, narrowing the gap, however modestly, between the superrich and the rest of us. So democracy must be diluted and subverted, smothered with disinformation, media puffery, and mountains of campaign costs; with rigged electoral contests and partially disfranchised publics, bringing faux victories to more or less politically safe major-party candidates.

Capitalism vs. Prosperity
The corporate capitalists no more encourage prosperity than do they propagate democracy. Most of the world is capitalist, and most of the world is neither prosperous nor particularly democratic. One need only think of capitalist Nigeria, capitalist Indonesia, capitalist Thailand, capitalist Haiti, capitalist Colombia, capitalist Pakistan, capitalist South Africa, capitalist Latvia, and various other members of the Free World--more accurately, the Free Market World.

A prosperous, politically literate populace with high expectations about its standard of living and a keen sense of entitlement, pushing for continually better social conditions, is not the plutocracy’s notion of an ideal workforce and a properly pliant polity. Corporate investors prefer poor populations. The poorer you are, the harder you will work—for less. The poorer you are, the less equipped you are to defend yourself against the abuses of wealth.

In the corporate world of "free-trade," the number of billionaires is increasing faster than ever while the number of people living in poverty is growing at a faster rate than the world’s population. Poverty spreads as wealth accumulates.

Consider the United States. In the last eight years alone, while vast fortunes accrued at record rates, an additional six million Americans sank below the poverty level; median family income declined by over $2,000; consumer debt more than doubled; over seven million Americans lost their health insurance, and more than four million lost their pensions; meanwhile homelessness increased and housing foreclosures reached pandemic levels.

It is only in countries where capitalism has been reined in to some degree by social democracy that the populace has been able to secure a measure of prosperity; northern European nations such as Sweden, Norway, Finland, and Denmark come to mind. But even in these social democracies popular gains are always at risk of being rolled back.

It is ironic to credit capitalism with the genius of economic prosperity when most attempts at material betterment have been vehemently and sometimes violently resisted by the capitalist class. The history of labor struggle provides endless illustration of this.

To the extent that life is bearable under the present U.S. economic order, it is because millions of people have waged bitter class struggles to advance their living standards and their rights as citizens, bringing some measure of humanity to an otherwise heartless politico-economic order.

A Self-devouring Beast
The capitalist state has two roles long recognized by political thinkers. First, like any state it must provide services that cannot be reliably developed through private means, such as public safety and orderly traffic. Second, the capitalist state protects the haves from the have-nots, securing the process of capital accumulation to benefit the moneyed interests, while heavily circumscribing the demands of the working populace, as Debs observed from his jail cell.

There is a third function of the capitalist state seldom mentioned. It consists of preventing the capitalist system from devouring itself. Consider the core contradiction Karl Marx pointed to: the tendency toward overproduction and market crisis. An economy dedicated to speedups and wage cuts, to making workers produce more and more for less and less, is always in danger of a crash. To maximize profits, wages must be kept down. But someone has to buy the goods and services being produced. For that, wages must be kept up. There is a chronic tendency—as we are seeing today—toward overproduction of private sector goods and services and underconsumption of necessities by the working populace.

In addition, there is the frequently overlooked self-destruction created by the moneyed players themselves. If left completely unsupervised, the more active command component of the financial system begins to devour less organized sources of wealth.

Instead of trying to make money by the arduous task of producing and marketing goods and services, the marauders tap directly into the money streams of the economy itself. During the 1990s we witnessed the collapse of an entire economy in Argentina when unchecked free marketeers stripped enterprises, pocketed vast sums, and left the country’s productive capacity in shambles. The Argentine state, gorged on a heavy diet of free-market ideology, faltered in its function of saving capitalism from the capitalists.

Some years later, in the United States, came the multi-billion-dollar plunder perpetrated by corporate conspirators at Enron, WorldCom, Harkin, Adelphia, and a dozen other major companies. Inside players like Ken Lay turned successful corporate enterprises into sheer wreckage, wiping out the jobs and life savings of thousands of employees in order to pocket billions.

These thieves were caught and convicted. Does that not show capitalism’s self-correcting capacity? Not really. The prosecution of such malfeasance— in any case coming too late—was a product of democracy’s accountability and transparency, not capitalism's. Of itself the free market is an amoral system, with no strictures save caveat emptor.

In the meltdown of 2008-09 the mounting financial surplus created a problem for the moneyed class: there were not enough opportunities to invest. With more money than they knew what to do with, big investors poured immense sums into nonexistent housing markets and other dodgy ventures, a legerdemain of hedge funds, derivatives, high leveraging, credit default swaps, predatory lending, and whatever else.

Among the victims were other capitalists, small investors, and the many workers who lost billions of dollars in savings and pensions. Perhaps the premiere brigand was Bernard Madoff. Described as "a longstanding leader in the financial services industry," Madoff ran a fraudulent fund that raked in $50 billion from wealthy investors, paying them back "with money that wasn’t there," as he himself put it. The plutocracy devours its own children.

In the midst of the meltdown, at an October 2008 congressional hearing, former chair of the Federal Reserve and orthodox free-market devotee Alan Greenspan confessed that he had been mistaken to expect moneyed interests--groaning under an immense accumulation of capital that needs to be invested somewhere--to suddenly exercise self-restraint.

The classic laissez-faire theory is even more preposterous than Greenspan made it. In fact, the theory claims that everyone should pursue their own selfish interests without restraint. This unbridled competition supposedly will produce maximum benefits for all because the free market is governed by a miraculously benign “invisible hand” that optimizes collective outputs. (“Greed is good.”)

Is the crisis of 2008-09 caused by a chronic tendency toward overproduction and hyper-financial accumulation, as Marx would have it? Or is it the outcome of the personal avarice of people like Bernard Madoff? In other words, is the problem systemic or individual? In fact, the two are not mutually exclusive. Capitalism breeds the venal perpetrators, and rewards the most unscrupulous among them. The crimes and crises are not irrational departures from a rational system, but the converse: they are the rational outcomes of a basically irrational and amoral system.

Worse still, the ensuing multi-billion dollar government bailouts are themselves being turned into an opportunity for pillage. Not only does the state fail to regulate, it becomes itself a source of plunder, pulling vast sums from the federal money machine, leaving the taxpayers to bleed.

Those who scold us for "running to the government for a handout" are themselves running to the government for a handout. Corporate America has always enjoyed grants-in-aid, loan guarantees, and other state and federal subventions. But the 2008-09 "rescue operation" offered a record feed at the public trough. More than $350 billion was dished out by a right-wing lame-duck Secretary of the Treasury to the biggest banks and financial houses without oversight--not to mention the more than $4 trillion that has come from the Federal Reserve. Most of the banks, including JPMorgan Chase and Bank of New York Mellon, stated that they had no intention of letting anyone know where the money was going.

The big bankers used some of the bailout, we do know, to buy up smaller banks and prop up banks overseas. CEOs and other top banking executives are spending bailout funds on fabulous bonuses and lavish corporate spa retreats. Meanwhile, big bailout beneficiaries like Citigroup and Bank of America laid off tens of thousands of employees, inviting the question: why were they given all that money in the first place?

While hundreds of billions were being doled out to the very people who had caused the catastrophe, the housing market continued to wilt, credit remained paralyzed, unemployment worsened, and consumer spending sank to record lows.

In sum, free-market corporate capitalism is by its nature a disaster waiting to happen. Its essence is the transformation of living nature into mountains of commodities and commodities into heaps of dead capital. When left entirely to its own devices, capitalism foists its diseconomies and toxicity upon the general public and upon the natural environment--and eventually begins to devour itself.

The immense inequality in economic power that exists in our capitalist society translates into a formidable inequality of political power, which makes it all the more difficult to impose democratic regulations.

If the paladins of Corporate America want to know what really threatens "our way of life," it is their way of life, their boundless way of pilfering their own system, destroying the very foundation on which they stand, the very community on which they so lavishly feed.

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Melvin I. Urofsky: The Value of "Other People's Money"

Published January 7, 2009 in the New York Times.

Some things never change. When President Obama spoke last week of “shameful” bonuses for bankers and the financial community’s “irresponsibility,” he echoed charges leveled nearly a century ago by Louis D. Brandeis. Brandeis, a commercial lawyer, leading reformer and future Supreme Court justice, described a dangerous combination of avarice, lack of accountability and poor oversight in “Other People’s Money, and How the Bankers Use It,” one of the best-known exposés of the Progressive era.

Published in 1914, the book was based on the revelations of the House of Representatives’ Pujo Committee about the predatory practices of J. P. Morgan and other big bankers. “Other People’s Money” influenced both Woodrow Wilson’s New Freedom agenda and Franklin Roosevelt’s New Deal. It also offers valuable lessons for today.

Our current crisis, after all, was in part fueled by bankers making big gambles with other people’s cash. They bundled and sold sub-prime mortgages, took their profits, and then left others holding portfolios full of worthless, even toxic, paper. This was exactly the kind of behavior that Brandeis despised. He believed that it was one thing for an individual to put up capital in risky ventures, playing to win but prepared for failure. But he saw the bankers of his time dodging failure by manipulating the marketplace at the expense of smaller entrepreneurs and consumers.

As president, Wilson tried to put a stop to this. He read the book and called Brandeis in to help draft three bills crucial to the New Freedom agenda — the Federal Reserve Act, the Clayton Antitrust Act, and the law establishing the Federal Trade Commission. These measures allowed Congress to take away banks’ control over currency, banned interlocking directorates (in which banker representatives controlled other corporations), and established rules of fair competition.

Banks found it relatively easy to get around these rules in the 1920s, especially with Republican administrations that did not seem to believe in market regulation. Bankers promoted the purchase of stocks on low margins or down payments, often as little as 10 percent of the price, and then financed the difference by loans, while their brokerage divisions sold the stocks. Then the stock market collapsed in the fall of 1929, taking the banking system down with it.

During the Great Depression, people turned to Brandeis once again. “Other People’s Money” was reissued in an inexpensive edition, and many of those who came to Washington to work on Franklin Roosevelt’s New Deal read it. The New Deal laws, particularly the Glass-Steagall and the Securities Exchange Acts, imposed long overdue regulation of the banking system, required the separation of banking from stock brokerage, and established the Securities and Exchange Commission to regulate the stock markets.

For Brandeis, regulation was not supposed to be a restraint on innovation or the entrepreneurial spirit, but rather a check on unbridled greed. He believed in a free market, but one in which the government enforced rules of fair competition so that the most talented could succeed. Clear rules would help ensure that business was conducted fairly and openly.

“Other People’s Money” can help us navigate the new era of regulation that we are likely to enter. It would be wise for Mr. Obama to heed Brandeis’s advice before imposing stricter rules on banking and the stock market. For these plans to be effective, Brandeis would caution, they must be more than cosmetic. Government should oppose banks’ purchases of stock brokerages, for example, to avoid the problems that Brandeis exposed. Furthermore, new rules won’t accomplish much without effective watchdog agencies. The Securities and Exchange Commission, for example, seems to have abandoned its oversight responsibilities during the Bush years, and now, we are paying the price.

As we reel from the financial crisis, “Other People’s Money” and similar indictments of immoral banking behavior will likely find a new audience. Some of the trouble-making bankers will, perhaps, be temporarily chastened. But before we know it, they will once again be complaining about regulation’s “interference” with the market. Don’t listen to them. Good regulation will keep us from losing sight of the importance of those same principles that Brandeis emphasized so many years ago — honesty, openness and a fair playing field.

Melvin I. Urofsky is a professor at Virginia Commonwealth University and the author of the forthcoming “Louis D. Brandeis: A Life.”

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'Globalization From Below' Tackles the 'Great Recession'

The economic crisis makes it possible to put proposals on the table that have long been ruled inadmissible.

Can globalization from below really provide an alternative solution to the great recession?

by Jeremy Brecher, Brendan Smith, and Tim Costello, posted on Commondreams.org on January 26, 2009

[As tens of thousands of activists from around the world gather in Belem, Brazil for the World Social Forum, social movements everywhere are debating how to respond to the ever-deepening economic crisis. This article is excerpted from the longer Discussion Paper "GLOBALIZATION FROM BELOW" TACKLES THE "GREAT RECESSION" prepared by Global Labor Strategies.]

At the pit of the Great Depression in 1930, an American country music group named the Carter Family recorded a song called The Worried Man Blues. It began:

"I went down to the river and I lay down to sleep
When I woke up there were shackles on my feet."

Though many subsequent verses describe the horrific outcome, there is no explanation of what had happened or why – just an awakening to a seemingly endless catastrophe. The song immediately became an unprecedented national hit. It's hard to imagine that its success didn't have something to do with capturing the sense of being the helpless victim of incomprehensible disaster that so many felt in the face of the Great Depression.

The seemingly sudden collapse of the global economy in 2008 has similarly left millions, indeed billions of people all over the world a victims of a catastrophe that appears both inexplicable and unending.

But what's now being dubbed the "Great Recession" is neither incomprehensible nor irremediable. On the contrary, it can be understood as an expectable result of a capitalism that has been globalized and at the same time "freed" by neoliberalism of control in the public interest.

The economic globalization that transformed the world at the turn of the century promised, according to its advocates, a glorious vista of prosperity that would provide unprecedented economic growth and raise billions of people out of poverty. In practice it generated personal and national insecurity, growing inequality, and a race to the bottom in which every community, nation, and workgroup had to reduce its social, environmental, and labor conditions to that of its most impoverished competitor.

But economic globalization also gave birth to a new convergence of global social forces that opposed this kind of globalization. People all over the world fought back against this "globalization from above" with their own "globalization from below." They used asymmetrical strategies of linking across the borders of nations and constituencies to become a counter power to the advocates of globalization. They created a movement – variously known as the global justice movement, the anti-globalization movement, global civil society, or as we call it, "globalization from below" -- that some in the media even characterized as "the world's other superpower."

The anti-globalization/global justice/globalization-from-below movement developed in response to the expansive phase of globalization and neoliberalism. Now the global economy has entered the most severe financial crisis since the Great Depression. The financial crisis has turned out to be the start of a cascade of other economic crises that are reshaping the global economy as definitively as an earthquake reshapes a city. Current leaders of the world's nations have utterly failed to develop a solution. The likely impact of their failure on ordinary people around the world is incalculable.

The advocates of globalization from above propounded as an article of faith that markets are self-regulating and that all would be for the best in the best of all possible worlds if only governments, labor unions, citizens organizations, and the unruly mob let them alone to do their thing.

The times they are a-changing. US government officials long known as market fundamentalists seize banks, buy mortgage and insurance companies, and commit $7.7 trillion – half of the US annual product -- to government intervention in financial markets.

The Clintonite "moderates" who once gutted the social safety net and sacrificed commitments to jobs programs in order to build up budget surpluses now propose vast public works programs financed by budget deficits. The IMF, scourge of "irresponsible" countries that didn't balance their budgets, advocates a trillion-plus dollars in global government deficits and claims to have replaced "structural adjustment conditionalities" with condition-free loans.

These programs may well fail in halting the downward spiral of the global economy. But they open the door to new forms of more social and public economy. That's one reason conservatives normally oppose them – and one indicator of how serious the present crisis really is. The economic crisis makes it possible to put proposals on the table that have long been ruled inadmissible.

While economists have asserted with great confidence that one after another trillion dollar "solution" would save the global economy, one after another has failed, raising the specter that it cannot be saved in its present form. Peter Boon and Simon Johnson of the website baselinescenario.com recently raised that possibility in the Wall Street Journal. They note that economists generally believe even the Great Depression of the 1930s could have been stopped by proper monetary policy. But, Boon and Johnson argue, governments may simply not be able to prevent such huge deflationary spirals. "Perhaps the events of 1929 produced an unstoppable whirlwind of deleveraging which no set of policy measures would truly be able to prevent." Their implication seems evident: The same could be true today.

The multi-trillion dollar rescues and bail-outs so far just attempt – possibly futilely -- to save the status quo. But what can we do if the status quo can't be saved? Can globalization from below really provide an alternative solution to the great recession?

It has already started to do so. A landmark was the meeting of a group of social movements and NGOs in October, 2008 on the occasion of the Asia-Europe People's Forum in Beijing that developed a sketch for a "transitional program for radical economic transformation." The "Beijing Declaration" laid out alternatives that are "practical and immediately feasible" that put the "well-being of people and the planet at their center." This requires "democratic control over financial and economic institutions." It includes proposals for finance, taxation, public spending and investment, international trade and finance, environment, and agriculture and industry. It provides a brilliant first expression of a globalization-from-below alternative to the failures of globalization from above.

The basic vision of the Declaration is summed up in its title: "The global economic crisis: An historic opportunity for transformation." Its goal, in other words, is not to shore up the status quo and return to the destructive form of globalization that preceded the crisis. Its objective is almost the opposite of the eight-trillion-dollars-and-counting of bail-outs, rescues, and subsidies provided to business in recent months by the world's governments. It aims instead to provide "a transitional program for radical economic transformation" to a "different kind of political and economic order."

"Transitional program" may sound like antiquated socialist rhetoric – a call to take state power and nationalize industry. But both the goals and the methods are very different. Indeed, the Declaration points a path between merely reestablishing the status quo and assuming that actions must be "revolutionary or nothing."

No "maximalism" here. "To capture people's attention and support" the Declaration argues, proposals must be "practical and immediately feasible." That is possible because, even under the domination of globalization from above, people have been developing alternatives within the world's nooks and crannies. The unfolding economic crisis provides the opportunity "to put into the public domain some of the inspiring and feasible alternatives many of us have been working on for decades."

The goal linking these alternatives is "the well-being of people and the planet." And that requires a focus not primarily on restoring the financial system, but first and foremost on the great human and environmental crisis the world is facing in relation to food, climate, and energy.

Such common human interests are not the principal concerns of the people and institutions that now call the shots in national governments or the global economy. The "well-being of people and the planet" will not be achieved by economic jiggering. Instead, "democratic control over financial and economic institutions are required."

The vision of such democratic control, however, is not of either a centralized national or a centralized global economy. It is closer to what Walden Bello elsewhere described as the "co-existence" of a variety of "international organizations, agreements and regional groupings" that would allow "a more fluid, less structured, more pluralistic world with multiple checks and balances" in which nations and communities can "carve out the space to develop based on their values, their rhythms, and the strategies of their choice."

The current economic crisis creates opportunity for transformation, the Declaration argues, because it severely weakens the power of the US, the EU, and the IMF, World Bank, and WTO. It undermines the legitimacy of the neo-liberal paradigm. And, where global pseudo-consensus once asserted that "there is no alternative" to liberal capitalism, the future of capitalism is now becoming an open question.

Of course, this moment can also be seized by "fascist, right wing populist, xenophobic groups" who will try to "take advantage of people's fear and anger for reactionary ends."

What is the agency for pursuing constructive alternatives and resisting destructive ones? It starts with the "powerful movements against neo-liberalism" that have been built over past decades. These will grow along with public anger at the abuse of public funds for private subsidy, the crises of food, energy, and the environment, and the deepening recession.

As social movements from around the world converge in Belem, Brazil at the end of January for the World Social Forum, they will be in a position to take the next step toward realizing their potential as the world's "other superpower." Indeed, it is the convergence of the already existing networks and understandings of globalization from below with the new outrage at what neo-liberalism has done to the world that provides the opportunity to show that another world is indeed possible.

Tim Costello, Jeremy Brecher and Brendan Smith are the co-founders of Global Labor Strategies, a resource center providing research and analysis on globalization, trade and labor issues. GLS staff have published many previous reports on a variety of labor-related issues, including Outsource This! American Workers, the Jobs Deficit, and the Fair Globalization Solution, Contingent Workers Fight For Fairness, and Fight Where You Stand!: Why Globalization Matters in Your Community and Workplace. They have also written and produced the Emmy-nominated PBS documentary Global Village or Global Pillage? GLS has offices in New York, Boston, and Montevideo, Uruguay. For more on GLS visit: www.laborstrategies.blogs.com or email smithb28@gmail.com.

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Robert Scheer: Why the Rush on TARP 2?

First published on Truthdig, reposted January 14, at The Nation.

Why rush to throw another $350 billion of taxpayer money at the Wall Street bandits and their political cronies who created the biggest financial mess since the Great Depression? And why should we taxpayers be expected to double our debt exposure when the ten still-secret bailout contracts made in the first round are being kept from the public?

We don't have time, President-elect Barack Obama's key economic adviser, Lawrence Summers, insisted in a letter to Congress on Monday, promising that the new infusion would not be squandered as was the first installment. But given that Summers is personally as responsible for this meltdown as anyone, why should we trust him on this? Yes, it sounds wonderfully bipartisan that Obama is backing President Bush's request for spending the money now, short-circuiting congressional inquiry, but it was just that sort of bipartisan politics that created this nightmare.

How insulting that we must now accept Summers's assurance that the Obama administration will "move quickly to reform a weak and outdated regulatory system to better protect consumers, investors and businesses." This from the guy who, as President Bill Clinton's treasury secretary, pushed the deregulation legislation making the subsequent financial crimes of Wall Street legal. The "toxic derivatives" that we taxpayers are now forced to purchase from the Wall Street hustlers were deliberately shielded from all government regulation, thanks to the Commodity Futures Modernization Act, which Summers got Congress to pass in the closing days of the Clinton administration with the same urgency that he now pushes for the new Wall Street handout.

Back then, Summers was a disciple of Robert Rubin, who just last week resigned from his director's position at Citigroup, the financial conglomerate that grew to unmanageable and corrupt proportions thanks to the empowering legislation that Rubin initiated when he was Clinton's first treasury secretary. Rubin has been paid more than $115 million plus stock options at Citigroup, and despite his horrid record is a close Obama adviser. It is one of the great swindles of US financial history that Citigroup was bailed out with $45 billion in a deal that could eventually cost taxpayers an additional $269 billion to guarantee those toxic assets that would have been illegal if not for the legislation backed by Rubin and Summers.

How did Obama allow himself to become ensnared with the very same folks who are the most culpable? His treasury secretary nominee, Timothy Geithner, is another Rubin protégé, who, as head of the New York Fed, worked tirelessly with Rubin to concoct the Citigroup bailout. When candidate Obama gave his major economic address back on March 27, he couldn't have been clearer in condemning the deregulation that Rubin and Summers had engineered:

"Unfortunately, instead of establishing a twenty-first-century regulatory framework, we simply dismantled the old one--aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner-take-all, anything-goes environment that helped foster devastating dislocations in our economy."

He was referring to the deregulation legislation that Summers hailed on the day that Clinton signed it into law as "a major step forward to the twenty-first century." Now Obama is relying on Summers to reverse a disaster of his own creation. It's like returning to the same surgeon who almost killed the patient in the first operation to once again cut open the body to repair the damage.

What we need is a second opinion.

Where is the openness and accountability that Obama promised? Why not pause for a few weeks for congressional hearings on how to spend the new money? We don't even know where the last batch went. On Monday, the Treasury Department finally agreed, and only after a subpoena threat, to turn over to Sen. Carl Levin and his Permanent Subcommittee on Investigations the ten secret contracts that it signed with top Wall Street firms in the first round of the bailout. Unfortunately, the subcommittee has no plans to make those contracts public, according to a Levin aide quoted in the New York Times.

That is outrageous. This is our money we're talking about. Why don't we get to read the fine print in what will end up being trillions of dollars in taxpayer obligations? Because we are suckers, that's why, and the folks who swindled us into this disaster can count on it.

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Naomi Klein: "In Praise of a Rocky Transition"

From the December 1 print edition of The Nation, and available online here. Also check out Naomi's interview with Amy Goodman on Democracy Now, posted at Alternet. Talking with Goodman, Klein points out that "It's not the banks that have been partially nationalized; it's Treasury that has been partially privatized by the very banks that created the crisis in the first place."

The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bailout is not merely incompetent. It is borderline criminal.

In a moment of high panic in late September, the US Treasury unilaterally pushed through a radical change in how bank mergers are taxed--a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140 billion in tax revenue, lawmakers found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "Treasury had no authority to issue the [tax change] notice."

Of equally dubious legality are the equity deals Treasury has negotiated with many of the country's banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals, "Any use of these funds for any purpose other than lending--for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc.--is a violation of the act." Yet this is exactly how the funds are being used.

Then there is the nearly $2 trillion the Federal Reserve has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg News believes that this secrecy violates the law and has filed a federal suit demanding full disclosure.

Despite all of this potential lawlessness, the Democrats are either openly defending the administration or refusing to intervene. "There is only one president at a time," we hear from Barack Obama. That's true. But every sweetheart deal the lame-duck Bush administration makes threatens to hobble Obama's ability to make good on his promise of change. To cite just one example, that $140 billion in missing tax revenue is almost the same sum as Obama's renewable energy program. Obama owes it to the people who elected him to call this what it is: an attempt to undermine the electoral process by stealth.

Yes, there is only one president at a time, but that president needed the support of powerful Democrats, including Obama, to get the bailout passed. Now that it is clear that the Bush administration is violating the terms to which both parties agreed, the Democrats have not just the right but a grave responsibility to intervene forcefully.

I suspect that the real reason the Democrats are so far failing to act has less to do with presidential protocol than with fear: fear that the stock market, which has the temperament of an overindulged 2-year-old, will throw one of its world-shaking tantrums. Disclosing the truth about who is receiving federal loans, we are told, could cause the cranky market to bet against those banks. Question the legality of equity deals and the same thing will happen. Challenge the $140 billion tax giveaway and mergers could fall through. "None of us wants to be blamed for ruining these mergers and creating a new Great Depression," explained one unnamed Congressional aide.

More than that, the Democrats, including Obama, appear to believe that the need to soothe the market should govern all key economic decisions in the transition period. Which is why, just days after a euphoric victory for "change," the mantra abruptly shifted to "smooth transition" and "continuity."

Take Obama's pick for chief of staff. Despite the Republican braying about his partisanship, Rahm Emanuel, the House Democrat who received the most donations from the financial sector, sends an unmistakably reassuring message to Wall Street. When asked on This Week With George Stephanopoulos whether Obama would be moving quickly to increase taxes on the wealthy, as promised, Emanuel pointedly did not answer the question.

This same market-coddling logic should, we are told, guide Obama's selection of treasury secretary. Fox News's Stuart Varney explained that Larry Summers, who held the post under Clinton, and former Fed chair Paul Volcker would both "give great confidence to the market." We learned from MSNBC's Joe Scarborough that Summers is the man "the Street would like the most."

Let's be clear about why. "The Street" would cheer a Summers appointment for exactly the same reason the rest of us should fear it: because traders will assume that Summers, champion of financial deregulation under Clinton, will offer a transition from Henry Paulson so smooth we will barely know it happened. Someone like FDIC chair Sheila Bair, on the other hand, would spark fear on the Street--for all the right reasons.

One thing we know for certain is that the market will react violently to any signal that there is a new sheriff in town who will impose serious regulation, invest in people and cut off the free money for corporations. In short, the markets can be relied on to vote in precisely the opposite way that Americans have just voted. (A recent USA Today/Gallup poll found that 60 percent of Americans strongly favor "stricter regulations on financial institutions," while just 21 percent support aid to financial companies.)

There is no way to reconcile the public's vote for change with the market's foot-stomping for more of the same. Any and all moves to change course will be met with short-term market shocks. The good news is that once it is clear that the new rules will be applied across the board and with fairness, the market will stabilize and adjust. Furthermore, the timing for this turbulence has never been better. Over the past three months, we've been shocked so frequently that market stability would come as more of a surprise. That gives Obama a window to disregard the calls for a seamless transition and do the hard stuff first. Few will be able to blame him for a crisis that clearly predates him, or fault him for honoring the clearly expressed wishes of the electorate. The longer he waits, however, the more memories fade.

When transferring power from a functional, trustworthy regime, everyone favors a smooth transition. When exiting an era marked by criminality and bankrupt ideology, a little rockiness at the start would be a very good sign.

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Ted Nace: The demise of California's Measure T is bad news for the environment

Humboldt County's groundbreaking restrictions on out-of-county corporate campaign contributions to local elections, has been declared "null and void" through an agreement with the County Board of Supervisors and Pacific Legal Foundation, a pro-business legal group. We've posted a press release on the defeat, by Measure T sponsors Democracy Unlimited of Humboldt County, on our e-news blog here. Ted Nace wrote the following, which was posted to Grist on November 13.

"Market failure" is one cause of environmental problems, but "democracy failure" is even worse.

Russia and China aren't the only examples. It also happens closer to home, as illustrated by last week's decision by California's Humboldt County to abandon Measure T, a local law banning non-local corporate money from local elections.

For years Humboldt County, like many rural counties in lumber or mining areas, was dominated by a single corporation -- Pacific Lumber, a subsidiary of Texas-based Maxxam, Inc.

For local voters, the last straw came when Maxxam spent several hundred thousand dollars on a recall initiative against District Attorney Paul Gallegos after Gallegos prosecuted Maxxam for fraudulent timber harvest filings. In 2006, after Gallegos survived the recall, the grassroots campaign that had organized to support him pushed through Measure T on a 55-to-45 percent vote.

The drafters of Measure T were aware of the U.S. Supreme Court's Bellotti decision (1979), which established the precedent that corporations could enjoy First Amendment rights under the U.S. Constitution. In Bellotti, the Court invalidated a Massachusetts statute similar to Measure T that prohibited corporate spending on referendums. But the author of the Bellotti decision, Justice Lewis Powell, suggested that in situations where the "relative voice of corporations has been overwhelming" or where corporate influence has threatened "the confidence of the people in the democratic process and the integrity of government," limits on corporate political money would be acceptable.

Both exceptions seemed to fit the situation in Humboldt. For example, in 2004, research conducted by Humboldt State University indicated that four out of five local voters felt that heavy corporate contributions made political corruption more likely.

Not only was Measure T popular with local voters, it was seen as a template for anti-corporate activists across the country. That makes all the more stunning last week's capitulation by the Humboldt County board of supervisors in response to pressure by the Pacific Legal Foundation, a right-wing think tank. In a settlement signed on November 7 [PDF], the supervisors not only declared the ordinance null and void, but also promised to pay the Pacific Legal Foundation $44,000 within 60 days.

Why did Humboldt County cave on a matter that had passed by such a large majority and that had been crafted to meet the requirements of Supreme Court precedent? The probable answer is that the county simply couldn't afford the fight. In September, Federal District Court Judge Susan Illston, a Clinton appointee, had granted PLF's request for an injunction [PDF] against Measure T, agreeing that the measure was "underinclusive" (because it targeted only non-local corporations) and that it should have made an exception for ballot initiatives (ignoring Powell's statements in Bellotti). Faced with the likelihood of spending large legal fees on a case where the judge appeared to have made up her mind, the County decided to bow out of the fight.

What's sad about the demise of Measure T is that the principle that corporations don't belong in politics was actually a mainstream feature of American law for the first 200 years of the country's history. As late as 1970, for example, the state of Wisconsin had a statute that stated, "No corporation doing business in this state shall pay or contribute, or offer consent or agree to pay or contribute, directly or indirectly, any money, property, free service of its officers or employees or thing of value to any political party, organization, committee or individual for any political purpose whatsoever, or for the purpose of influencing legislation of any kind, or to promote or defeat the candidacy of any person for nomination, appointment or election to any political office" (Wis. Laws, Lection 4479a (Sec. I, ch 492, 1905).

It is only since the late 1970s that Supreme Court decisions have established new corporate First Amendment rights, extending the Fourteenth Amendment rights won by corporate attorneys in the 1880s. This sort of corporate hegemony is bad for public morale, bad for democracy, and ultimately bad for the environment.

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Wall Street Journal: How to Quench the World's Thirst

The Wall Street Journal interviews Maude Barlow, the U.N.'s new water adviser
by Alexandra Alter

Water has become a booming $500 billion industry, by some estimates. Economists and investors call it "the new oil" and "blue gold."

Texas oilman T. Boone Pickens, who has bought water rights for a chunk of the Ogallala aquifer in Texas and owns more water than any individual in the United States, has said the natural resource should be treated like any other commodity -- bought and sold for a profit.

In the U.S., companies such as Nestlé, which owns Poland Spring, extract hundreds of millions of gallons of groundwater a year. The companies often pay little to nothing for the water that they bottle and sell.

But where some see profits, others see peril. The world is running out of fresh H20, which accounts for just 3% of the earth's water. Recent moves by multinational corporations to privatize water sources could spell disaster for poor countries and residents with no means to pay.

In Bolivia, price spikes following water privatization led to riots in 2000; eventually, Bolivia expelled Bechtel, the engineering company that the government had contracted to take over management of the municipal water supply in the city of Cochabamba. Similar clashes over privatization and price hikes have broken out in Argentina, Uruguay, South Africa and Mali.

Geopolitical experts warn that water scarcity poses not just a public health risk, but a threat to global security. Currently, some 1.1 billion people, one-sixth of the world population, lack safe drinking water. Global water consumption is growing at unsustainable rates, doubling every 20 years, according to a March 2008 report by Goldman Sachs. A study by International Alert, a London-based conflict-resolution group, listed 46 countries with a combined population of 2.7 billion that have a "high risk" for violent conflict over water in the next two decades.

Maude Barlow, a Canadian water activist who has opposed privatization for more than 20 years, was recently appointed as the United Nation's first senior adviser on water issues. Her position, which is unpaid, was created by the Rev. Miguel d'Escoto Brockmann, president of the United Nations General Assembly. Here are highlights from her conversation with the Wall Street Journal.

WSJ: You've been an outspoken critic of the U.N.'s and the World Bank's water policies, saying that both have aided the "corporate takeover of the world's water." Were you surprised to be offered an advisory role at the U.N.?

Maude Barlow: I don't think I would have been offered a role there by anyone but someone like Father Miguel. He cares deeply about the poor. He's a liberation theology priest from Nicaragua.

I've been critical and will continue to be critical of the overly close relationship of the U.N. to big water corporations. At a time when the need was growing so much, they said, 'Well, the private companies will pay for it,' and they didn't. No one has the right to appropriate water for profit while other people are dying.

What will you try to change about the U.N.'s water policies?

I would like to see it shift from reliance on water companies and privatization, what I call the hard path, to the soft path -- watershed protection, rain harvesting and watershed restoration. You can't have the human right to water if there's no water. Studies show that as we remove water from aquifers, we dry up the land. The rain won't come if there's no vegetation.

Some economists argue that privatization will reduce water consumption and waste, the way oil prices have spurred efforts toward more efficient energy use. Wouldn't putting a price on water actually help to reduce waste?

To me, the issue isn't whether you price or not, it's the conditions. There are three important conditions to putting a price on water. The first is that no one should be denied access because they can't pay. The second is that water is maintained by the public sector, so it's like a tax, not a fee. The third is, you're paying for the service, you don't own the water. It's very important that we say water is not a commodity.

Do you see any role for the private sector?

In the building of infrastructure and pipes. There's an important place for the private sector in water cleanup technology. There's no place for the private sector in water delivery. It should be delivered by the public sector on a not-for-profit basis.

The U.N.'s Millennium Development Goals to reduce global poverty include the objective of cutting the number of people without access to clean water in half by 2015. You have said that at the rate they're going, it will take much longer. What steps will you recommend to speed things up?

The twin pillars of a water secure future for the world are on the one hand, conservation and protection, and on the other hand, the human right to water.

One of my criticisms of the U.N. Millennium Development Goals about water has been the disconnect between those who are working on the environmental side and those who are working on the human-rights side. I don't think there's been nearly enough attention paid to protecting source water. Seventy-five to 80% of surface water in India, China or Russia is too polluted to bathe in, drink or fish in.

The U.N. bought into the World Bank's solution, which is, bring in water companies and let them provide these huge projects, and if you're wealthy you can pay for water. They don't see it as their responsibility to provide water for the poor. I've been in communities with prepaid water meters. There's water, but they can't afford to turn the tap on, so they go to the river, where there are cholera warning signs.

In your latest book, "Blue Covenant," you write about virtual water -- the water that is used to produce commodities like cars and computer chips -- as a big source of water consumption.

I think we're going to hear a lot more about that in the next few years. The U.S. is exporting a third of its water in the form of virtual water exports through commodities. Britain and Japan import most of their virtual water.

Europe grows its roses in Africa around Lake Naivasha in Kenya. The lake is so damaged now that these companies are looking for new lakes in Uganda. It's not just looking at our water footprint in our own country and community and household. It's where your water footprint is coming from.

Has the financial crisis slowed the pace of global investments in water indexes?

What worries me is the opposite. It's the one area where people are still going to invest. It's not going to fluctuate the way other commodities do, because we're a species running out of clean water.

The other thing I'm worried about from the credit crisis is that cash-strapped municipalities and states may sell off water treatment plants to the private sector.

You've criticized the Bush administration for "gutting the Clean Water Act." and have noted that funding for water research in the U.S. has been stagnant for 30 years. Do you expect to see changes under an Obama administration?

I'm sure hoping. I think this is a much more environmentally conscious president coming in, as the issues around food, water and energy are becoming more prominent. I do think that we may have an opportunity with a more open administration and a more aware public to really start to move these issues forward. But if it doesn't happen, the U.S. is going to be one big Atlanta .

Which countries would you hold up as models in terms of sustainable water management?

None. Europe is way ahead in terms of how it cares for its water. However, Europe imports the bulk of its water footprint, so the way it protects its own water is to use and abuse other countries' water.

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David Sirota: Top 5 Reasons to Vote Against the Bailout

Analysis and lots of links to alternative viewpoints--first published on Blog for Our Future on September 28.

There's news this Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash (you can read the draft legislation here). Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation.

Now, the New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress - Democrat and Republican - should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now - let them hear your voice.
1. BAILOUT'S INHERENT FISCAL INSANITY COULD MAKE PROBLEM WORSE
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it's akin to check kiting, which is is illegal. Apparently, though, when the government does it, it's billed as Serious Public Policy. Because that's what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan's underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is "not based on any particular data point" - that is, they created it out of thin air because "We just wanted to choose a really large number." Slapping that amount of money onto the national credit card when our government can't even justify the amount is beyond absurd - it is insane.

It didn't have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to "submit a plan to Congress on how to recoup any losses," according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street's misbehavior.

2. EXPERTS ON BOTH THE LEFT AND RIGHT SAY THIS BAILOUT COULD MAKE THINGS WORSE

Primum non nocere is the latin phrase for "first do no harm" - the priority principle for any EMT working on a sick patient. It should be the same priority for Congress at this moment - and a growing group of esteemed experts on both the Right and Left are insisting that this bailout bill could make things worse. Here's a review:

The Washington Post reported on Friday, almost 200 academic economists "have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear."

NYU's Nouriel Roubini, the visionary who had been predicting this meltdown, says "The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan."

Harvard's Ken Rogoff, a Former Federal Rerserve and IMF official, insists that the prospect of this bailout is, unto itself, taking a manageable problem and making it into a more intense crisis. He says that credit is frozen primarily because banks want to avoid dealing with other banks that might drive a hard bargain, and instead would rather wait for free money from the government. Without the prospect of that free money, Rogoff suggests that credit would probably begin moving again, if slowly.

Dean Baker of the Center on Economic and Policy Research says that spending so much cash so quickly on such a poorly conceived plan could have the effect of making it impossible to fund economic stimulus that is the real way out of this mess. "Suppose the Paulson plan goes through," he writes. "It is virtually certain that the economy will weaken further and the number of foreclosures and people without jobs will continue to rise. This is the fallout from a collapsing housing bubble...When families respond to their loss of home equity by cutting back their consumption it will deepen the recession. In this context it might prove very important to have the resources needed to provide a substantial stimulus. [and] there is no doubt that this bailout will make further stimulus much more difficult to sell politically."

Meanwhile, it's not even close to clear that this is a problem that requires such an enormous response. As mentioned above, the Treasury Department admits it has absolutely no factual basis for requesting $700 billion - an amount equivalent to about 5 percent of our entire economy. Additionally, the Washington Post reports that "Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets." Indeed, "many smaller banks said they were actually benefiting from the problems on Wall Street" and "even some of the nation's largest banks, which have pushed hard for a federal bailout, deny that the current situation is forcing them to reduce lending."

The questions, then, are simple: In the face of this bipartisan opposition from objective experts, why should a lawmaker instead believe the same Bush officials who helped create this crisis with their deregulation, the same Bush officials who just months ago said everything was AOK? Shouldn't there be almost complete unanimity among both objective and partisan observers before spending 5 percent of our entire economy after just one harried week of White House demands? Fool me once shame on you, fool me twice, shame on me. It's time, as The Who said, that we "don't get fooled again."

3. THERE ARE CLEARLY BETTER AND SAFER ALTERNATIVES

The mantra throughout the week has been that America has "no choice" but to pass Treasury Secretary Henry Paulson's $700 billion giveaway - that, in effect, there are no alternatives. But that's an out-and-out lie - one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties' corporate campaign contributors.

The truth is, there are a number of alternatives. Here are just a few:

In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon's federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.

The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.

For those in the mindless, zombie-ish "someone has to do something, so we have to do what the White House says!" camp, consider the possibility that you are under the spell of the same kind of White House fear that led us to invade Iraq because of Saddam's supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with creating the political dynamic to pass a wasteful giveaway - one that couldn't be passed otherwise without a sense of emergency. And ask yourself why you would listen to this White House instead of listening to those experts who have been predicting this crisis and are now advising against this bailout - experts like CEPR's Baker. In two separate posts (here and here), he says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is "The Fed and Treasury will have to step in and take over the banks [which] is exactly what many economists argue should happen anyhow," Baker writes. "So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks."

Then there is the idea of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn't even been discussed but the thought experiment it involves is important to understanding why there is, indeed, an alternative to the Paulson plan. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks' mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down move helping only financial industry executives.
On this latter proposal, some may argue that giving any relief to homeowners is "unfair" in that those homeowners created their problems, so why should taxpayers have to help them? But then, is helping homeowners any less fair than simply giving all the money away to Wall Street, no strings attached? I'd say no - and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).

4. ANY INCUMBENT VOTING FOR THIS PUTS THEMSELVES AT RISK OF BEING THROWN OUT OF OFFICE
As a preface, let me state that I think we live in a country where politicians too often listen to their donors and to the Establishment rather than their constituents, not the other way around. America is a country where our leaders dishonestly invoke the concepts of "Statesmanship" and "Seriousness" and their supposed hatred of "pandering" to justify ignoring what the public wants (as if giving the public what it wants is somehow not the objective of a democratic republic). So, in short, I don't think there's anything wrong with this bill being "politicized" by coming down the pike right before an election - in fact, I think it's a good thing because the election - and the fear of being thrown out of office forces our politicians to at least consider what the public wants. I mean, really - would we rather have this decision made after the election, when the public can be completely ignored?

Polls overwhelmingly show a public that sees voting for this bill as an act of economic treason whereby the bipartisan Washington elite robs taxpayer cash to give their campaign contributors a trillion-dollar gift. As just two of many examples, Bloomberg News' poll shows "decisive" opposition to the bailout proposal, and Rasmussen reports that their surveys show "the more voters learn about the proposed $700 billion federal bailout plan for the U.S. economy, the more they don’t like it." Put another way, this bailout proposal has unified both the Right and Left sides of the populist uprising that I described in my new book and that is now even more angry than ever.

Any sitting officeholder that votes for this - whether a Democrat or a Republican - should expect to get crushed under a wave of populist-themed attacks from their opponents. We've already seen it start. In Oregon, Democratic challenger Jeff Merkley (D) is airing scathing television ads hammering Republican incumbent Gordon Smith for potentially supporting the deal. Similarly, this morning on Meet the Press, we saw Republican Senate challenger Bob Schaffer (CO) dishonestly papering over his own votes for deregulation and ripping into his opponent Rep. Mark Udall (D) for potentially supporting the deal. Incumbents, get ready for that kind of election-changing heat in your face if you vote "yes."
This, by the way, could play out in the presidential contest. Barack Obama has been taking the advice of the Wall Street insiders in his campaign in endorsing this bailout. McCain has endorsed the vague outline, but he may ultimately back off once he sees the details, allowing him to then run the last month of the campaign as the economic populist in the race. I'm not saying it would work, considering McCain's 26-year record of supporting the deregulatory agenda that created this crisis. But such a move could end up help him flank Obama on the defining economic issues of the race.

5. CORRUPTION AND SLEAZE ARE SWIRLING AROUND THESE BAILOUTS - AND AMERICA KNOWS IT
The amount of brazen corruption and conflicts of interest swirling around this deal is odious, even by Washington's standards - and polls suggest the public inherently understands that. Consider these choice nuggets:

Warren Buffett is simultaneously advising Obama to support the deal, while he himself is investing in the company that stands to make the most off the deal.

McCain's campaign is run by lobbyists from the companies that stand to make a killing off a no-strings government bailout.

The New York Times reports that the person advising Paulson and Bernanke on the AIG bailout was the CEO of Goldman Sachs - a company with a $20 billion stake in AIG.

The Obama campaign's top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously "advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc." - that is, who have a direct financial interest in the current iteration of the bailout.

Add to this the fact that the negotiations over this bill have been largely conducted in secret, and you have one of the most sleazy heists in American history.

If this bill passes, it will be a profound referendum on the dominance of money over democracy in America. That - and that alone - would be the only thing an objective observer could take away from the whole thing.

Money will have compelled politicians to not only vote for substantively dangerous policy, but vote for that policy even at their own clear electoral peril. Such a vote will confirm that the only people these politicians believe they are responsible for representing are are the fat-cat recipients of the $700 billion - the same fat cats who underwrite their political campaigns, the same fat-cats who engineered this crisis, and want to keep profiteering off it. Any lawmaker who takes that position is selling out the country, as is any issue-based political non-profit group - liberal or conservative - that uses its resources to defend a "yes" vote rather than demand a "no" vote. This is a bill that forces taxpayers to absorb all of the pain, and Wall Street executives to reap all of the gain. It doesn't even force the corporate executives (much less the government leaders) culpable in this free fall to step down - it lets them stay fat and happy in their corner office suites in Manhattan.

Even if they believe that something must be done right now, lawmakers should still vote no on this specific bill, and force one of the very prudent alternatives to the forefront. They shouldn't just vote no on Paulson's proposal - they should vote hell no. Our economy's future depends on it.

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Alternatives to the Bailout: Chris Hedges and Ralph Nader

On Wednesday we sent an alert to our members asking them to call Congress in support of an alternative bailout plan, featuring a $700 billion redevelopment bank to channel taxpayer money to the people who really need it and will make the best and most responsible, productive use of it: homeowners, small business owners, and the kind of economic sectors that grow our "common wealth," both socially and at the bottom line: including education, health care, and emerging energy technologies. (To see the alert and access the letter, follow this link.)

Here's Chris Hedges' take on the financial crisis, with Ralph Nader's alterantives throwing good money after bad. The article was first posted on Truthdig.org.

The lobbyists and corporate lawyers, the heads of financial firms and the crooks who control Wall Street, all those who spent the last three decades assuring us that government was part of the problem and should get out of the way, are now busy looting the U.S. treasury. They are also working feverishly inside the Democratic and Republican parties to blunt any effective regulatory reform as they pass on their distressed assets to us. The process is stunning in its hubris and mendacity, and two of the most potent enablers of this unprecedented act of corporate welfare are John McCain and Barack Obama.

The federal government, reeling backward from the meltdown of financial markets, is now considering taking responsibility for the bad assets of numerous financial companies. But if that intervention does not include robust new mechanisms of regulation, accountability and control we will see nothing more than a massive taxpayer-funded bailout of stockholders and the financial industry.

The rhetoric of the two presidential candidates about the crisis has been filled with pious outrage about the abuses of Wall Street and short on actual solutions. John McCain and Barack Obama know, after all, who funds their campaigns. The financial industry has given $22.5 million in the current election cycle to Obama and $19.6 million to McCain, according to the Center for Responsive Politics. And the financial industry has come around to collect. Two of the biggest financial groups in Washington, the Financial Services Roundtable and the Mortgage Bankers Association, have been holding meetings with McCain and Obama's economic advisers. They are working with the campaigns to protect the unregulated power of financial industries and at the same time to shift bad debt to taxpayers. The Wall Street Journal reported that the Financial Services Roundtable, made up of the very banks and firms that got us into this mess, has developed draft legislation. The Roundtable has called a meeting this week with the chief executives of more than 50 banks, brokerages and insurers. The three-day meeting includes private, closed-door sessions on Thursday with Obama economic adviser Ian Soloman and McCain adviser Ike Brannon. Those hovering around Obama-economists like Paul Volcker, Robert Rubin, Lawrence Summers and Laura Tyson-bear as much responsibility for the dismantling of government regulation as those advising McCain.

If the financial-services industry is able to suck us dry, our assets, from our homes to our retirement investments, will continue to tumble. Taxes will go up. Jobs will be lost. The grim economic indicators will get worse. The dollar, which has already lost about a third of its value against the euro, will continue to plummet. The rate of foreclosures, one in every 416 U.S. households in August, will skyrocket. Consumer spending, the engine of the U.S. economy, will continue to decline. Industrial production, which has fallen for three consecutive quarters, will fall further. Unemployment, which shot up to 6.1 percent in August from 5.7 percent in July, will get worse. These tremors presage an earthquake.

Ralph Nader, who has spent his adult life battling corporations, understands more about the rise of the corporate state and the steady fleecing of American citizens by corporations than anyone else in the country. The core of his message is that Republicans and Democrats are hostage to corporate power.

Nader warned in a letter to Congress on July 23 that the federal government's bank insurance fund may be insufficient to handle the developing crisis in the banking industry. The letter was, at the time, greeted with indifference and ridicule. Rep. Spencer Bachus, R-Ala., at a congressional hearing, mentioned the letter and assured those present that "Our banks are well capitalized, our deposit insurance fund is sound. There's absolutely no factual basis for saying that there's not money there to pay."

Two months later our federal bank insurance fund, which insures our bank deposits, is being swiftly emptied. The collapse of a huge commercial bank, such as Bank of America, which has assumed control of Merrill Lynch's losses with no real idea of how extensive these losses are, could see ordinary depositors wiped out.

Nader warned eight years ago that the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) were about to tank like the savings and loan industry of the 1980s and '90s. Because his warnings were ignored, taxpayers today face losing billions of dollars to cover these bad debts.

Nader, in a letter to Securities and Exchange Commission Chairman Christopher Cox in 2006, criticized the exorbitant salaries of government-sponsored enterprise executives Jamie Gorelick, Daniel Mudd, Robert J. Levin and Timothy Howard. He noted in his letter that their financial incentives were in direct conflict with consumer financial security. A grave moral hazard was created by the accounting manipulations they sanctioned, Nader said. These manipulations benefited their personal wealth, yet there was no penalty for being caught.

Nader has called for an immediate halt to the increase in the national debt. He demands an end to corporate subsidies and unconditional taxpayer bailouts of corporations. And he has called for aggressive prosecution of corporate criminals.
"Given the contrast between the ‘free market' ideology of the Republicans and the corporate or state socialism that is their increasing practice, the time is ripe for full Congressional hearings next year on the organized power, greed and lack of regulation that is shaking the foundations of Wall Street," Nader said in prepared remarks delivered to editors at The New York Times' Washington bureau.

Nader has come up with 10 market reforms that he says need to be implemented immediately along with any bailout. These reforms are:
1. No bailouts without conditions and reciprocity in the form of stock warrants.
2. No more lobbying for any company that is bailed out.
3. No golden parachutes or get-out-of-jail-free cards for guilty executives.
4. No bailouts without public hearings.
5. Reduce the moral hazard in U.S. mortgage markets by introducing covered bonds for the majority of mortgage products, as is done in Western Europe. That gives institutions that finance mortgages an incentive to be prudent, because they cannot just unload them and wipe their hands clean of the liability, but are instead on the hook if the homeowner defaults.
6. Maintain neighborhood stability and housing security by passing a law with a sunset clause allowing below-median-value homeowners facing foreclosure the right to "rent to own" their homes at fair market value rates.
7. Avoid future housing bubbles by removing implicit government guarantees for new mortgages that exceed thresholds of greater than 15 to 20 times the annual fair market rent value of the home.
8. Make the Federal Reserve a Cabinet position, so it is accountable to Congress, as well as make sure all Federal Reserve Bank presidents are appointed by the president and answerable to Congress.
9. Reduce conflicts of interest by taking away power for auditor and rating agency selection from companies and placing it in the hands of the SEC to be administered on random assignment.
10. Implement a securities speculation tax, starting with derivatives, to deter casino-style capitalism.

You can vote for Obama or, if you are really into self-delusion, you can support McCain. But you owe it to yourself, even if you erroneously blame Nader for the election of George W. Bush, to remember these Nader reforms. Hold them up against the proposed reforms that will soon be issued by the McCain and Obama camps. If the Nader reforms are not adopted, if we bail out our corporate masters with hundreds of billions of tax dollars without instituting draconian market reform and launching criminal prosecution, we will be left to bear the cross of corporate malfeasance. We will pay for corporate crime. We will leave those who robbed us free to plunder.

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