Day: September 17, 2008

Yet Another Bailout

Following emergency consultations between the Federal Reserve, the US Treasury and the Democratic leaders of both houses of Congress, the Federal Reserve on Tuesday night announced a bailout of the Wall Street insurance giant American International Group (AIG).

According to reports posted by the New York Times and the Wall Street Journal, under the emergency plan the Fed will provide the failing firm with an $85 billion loan in exchange for 80 percent of its assets.

The bailout is one more demonstration of the systemic crisis confronting American and world capitalism. It is unprecedented and, in some respects, goes even further than the government takeover of Fannie Mae and Freddie Mac barely a week before. Unlike the two mortgage finance giants, AIG is not a government-sponsored institution and is not even directly regulated by the federal government.

Pressure for a rescue of AIG grew after all three major rating agencies downgraded its credit Monday night, raising the prospect that lenders would recall their loans.

It was feared that the failure of AIG, with $1 trillion in paper assets, would have a domino effect, threatening banking and corporate failures throughout the world economy. AIG is one of the largest players in the global, unregulated market (estimated at $62 trillion) in credit default swaps, i.e., private contracts under which companies like AIG guarantee the debt, including mortgage-backed bonds, held by other companies.

The newspaper warned ominously, “More major bank failures are a certainty, including some very large ones.”

Its solution? The setting up of a new Resolution Trust Corporation, of the type created during the savings and loan crisis of the 1980s, which would “provide a buyer for securities for which there is no market.” In other words, the US Treasury’s vaults should be opened up to bail out major Wall Street investors and CEOs who made billions off of a speculative housing bubble that has now burst, precipitating the greatest financial crisis since the 1930s and threatening millions of working people with the loss of their jobs and homes.

Could Western Civilization Collapse?

“Train-wreck” doesn’t even begin to describe what is starting to happen to the U.S. today with the financial crisis, an onrushing depression, and the failure of George W. Bush’s war policy as he is faced down by Iran and the Russian bear.

But in an even broader sense, the West, as a civilization, after a century of world war and the utter failure of global finance capitalism, may have reached its limits.

Those with a vested interest in the status quo dismiss any suggestion that something is wrong. This includes Donald Luskin, author of an article in the Washington Post on Sunday, September 14, titled: “A Nation of Exaggerators: Quit Doling Out That Bad Economy Line.”

Luskin writes, “The relentless drumbeat of pessimism in the media and on the campaign trail” is “a virus.”

He continues: “Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression — or exaggerated Depression comparisons.”

All this is rationalized by various brands of racism, cultural superiority, social Darwinism, historical determinism, “dominion of the Elect,” “God’s chosen people,” etc. Or, simply, “might makes right.”

Some call it “The New World Order.”

So today, we Americans, denizens of the “land of the free and the home of the brave,” victors in two world wars, bearers of “democracy” to Afghanistan and Iraq, allies of the brave Israelis who hold high the banner of Judeo-Christian values among the ungrateful Palestinians—well, we Americans owe our own bankers almost $70 trillion at most recent count. With the government takeover of Fannie Mae and Freddie Mac, we owe holders of bad housing loans, including the governments of China, Korea, and Japan, another few trillion.


Our system would have to change, because finance capitalism is far too unstable to coexist with other nations as equals. It must either grow or die, because it always needs new victims to pay the interest on its usury practices and to finance its speculative balloons. As a last resort, it needs the kind of financial institution bailouts being engineered by Secretary of the Treasury Henry Paulson, where the only remaining stopgap is borrowing from public funds and adding to the national debt.

Once economic growth stops, as has now happened, and all the bubbles to restart it have blown up, as has also happened, the end really is nigh. Especially if the host—the U.S.—is bankrupt.

What is coming at us today isn’t just another downturn. If people like McCain adviser Donald Luskin doubt it, maybe, instead of writing campaign propaganda, they should ask the fired CEOs of Fannie Mae and Freddie Mac, the stockholders of Lehman Brothers, whose shares have dropped ninety percent in less than a year, and the millions who are losing their homes.

Presidential candidates Barack Obama and John McCain are calling for “change.” Well, if I were standing on a beach with a 100-foot tsunami roaring in my direction, I would call for change too. Except I would not be standing around arguing about the meaning of the words “lipstick on a pig.”

Politics Of Distraction

Without a doubt the McCain campaign has sunk the presidential elections this year to a new low, with misleading ads, mudslinging, and attack ads focused on personalities rather than issues. Americans have heard more about pigs in lipstick than what the candidates will do to fix the economy. And the corporate media has been far too willing to follow its lead.

A new ad campaign launched this week by the Institute for America’s Future seeks to reverse that negative trend.

The campaign challenges the candidates and the media to “give us a debate worthy of a great nation in trouble.” The campaign will call on Americans to demand a political discussion focused on several main points that need immediate attention.

The ads will raise the issues of the economic recession, rising global debt and financial crisis, the failing health care system, collapsing public infrastructure, corporate corruption, and the endless occupation of Iraq.

The ad calls for a “new deal” that ensures working families see the benefits of rising productivity, have guaranteed health care coverage, and get a “fair share of prosperity.”

The ads will run in the New York Times, and readers will be encouraged to bring them to public forums with candidates, and to take other steps to demand the candidates and the media focus on real issues that impact working families. Learn more at www.ourfuture.org

Today In Labor History

17 September

75 workers die in explosion at Allegheny Arsenal, Pittsburgh, Penn. – 1862

At a New York convention of the National Labor Congress, Susan B. Anthony calls for the formation of a Working Women’s Association. As a delegate to the Congress, she persuaded the committee on female labor to call for votes for women and equal pay for equal work. But male delegates deleted the reference to the vote – 1868

One hundred thousand Pennsylvania anthracite coal miners go on strike. Their average annual wage is $250. They are paid by the ton, defined by Pennsylvania as 2,400 pounds but which mine operators have increased to as much as 4,000 pounds – 1900

National Federation of Federal Employees (NFFE) formed at a convention in Washington, D.C. – 1917

Southern employers meeting in Greenville, N.C. ready their big counter-offensive to break the textile labor strikes that have hit the Eastern seaboard. Ultimately they deploy 10,000 national guardsmen and 15,000 deputies, but fail to drive hundreds of thousands of strikers back to work – 1934

A Southern Pacific train loaded with sugar beets strikes a makeshift bus filled with 60 migrant workers near Salinas, Calif., killing 32. The driver said the bus was so crowded he couldn’t see the train coming – 1963

Ninety-eight United Mine Workers of America members and a minister occupy the Pittston Coal Company’s Moss 3 preparation plant in Carbon, Va., beginning a year-long strike. Among other issues: management demands for drastic limitations in health and pension benefits for retired and disabled miners and their dependents and beneficiaries – 1989

Off Shore Drilling A Reality

Election-year jitters over high gasoline prices prompted House Democrats on Tuesday to push through a broad energy plan that for the first time in more than a quarter of a century would allow oil and gas drilling off the East and West coasts.

The fate of the legislation, which Republican members contended would produce little new domestic oil, remains uncertain. The politically sensitive issue of offshore drilling may only be resolved as part of a budget bill that Congress must approve before it adjourns at month’s end.

The measure, which was approved 236-189, would allow states to authorize drilling 50 to 100 miles from their coasts. The federal government would be allowed to approve drilling 100 to 200 miles from shore.

But rising voter concern over high prices at the pump, relentless Republican criticism and pressure from vulnerable oil patch Democrats forced Pelosi to reconsider her position. She fashioned a package that included more drilling as well as $19 billion in tax incentives for alternative energy.

The measure now goes to the Senate, where a bipartisan group of 20 lawmakers has been working on a compromise that would lift a drilling ban in the eastern Gulf near Florida, and allow Georgia, North Carolina, South Carolina and Virginia to approve offshore drilling.

It is not clear that House Republicans will go along with such a Senate compromise or whether President Bush would sign such legislation.

Green Collar Jobs

If Obama is elected he has promised to create upwards of 5 million green collar jobs.  A noble endeavor, but in case one is interested there are places to go for them now.

So where do you start your green job search? We’ve collected some of the best websites for job listings and other resources for a new earth-focused career.

  • Grist Job Board: Environmental groups from around the country post their jobs here. Also, Grist’s Kevin Doyle has a series of articles about the green job market.
  • TreeHugger Job Board: Dozens of green business and organizations list their openings here. Subscribe to the RSS feed for the latest updates.
  • Jobs With the National Park Service: Love the great outdoors? You could work anywhere from Hawaii’s volcanoes to Yellowstone’s geysers. The park service has 16,000 permanent employees and another 10,000 seasonal employees each year.
  • World Wide Opportunities on Organic Farms: If you’re interested in the fast-growing field of organic food (no pun intended), you could volunteer on a farm to get experience. This site connects volunteers with farms around the planet.

Another green tip: Many companies encourage applying online these days, so you can email your resume. But if you have to print it, look for high-quality paper made with recycled fibers. No point killing trees when you’re applying for an earth-friendly job!

Absurd News: Bare-Breasted Virgins

Portly and beaming in a leopardskin loincloth, King Mswati III of Swaziland basked in the adoration of 50,000 topless virgins who paraded before him, vying to become his new queen.

Legions of half-naked teenage girls danced, twirled and pounded the earth outside the royal kraal on Monday, proclaiming their willingness to become the next bride of the last absolute monarch in sub-Saharan Africa. He already has 12 wives and a fiancee.

This annual Umhlanga, or Reed Dance, is the highlight of Swaziland’s traditional calendar. Every chief in the country of a million people sends a group of teenage virgins to the royal kraal in Ludzidzini. Every year the ceremony expands. Monday’s occasion attracted more than twice as many girls as last year.

Yet in a country where 42.6 per cent of the adult population is infected with HIV or AIDS – the highest rate in the world – critics say Mswati sets a bad example.

Last year, the 37-year-old monarch chose 16-year-old Miss Teen Swaziland, Nothando Dube. His eldest daughter, Princess Sikhanyiso, is 17.

The king will study a video of the festivities before choosing a fiancee. She will become a fully fledged queen when impregnated.

It is good to be the king, huh?

New Trend To Bar Voters

Democrats and Republicans battled in the media and the courts Tuesday over hotly disputed claims that the GOP could use lists of foreclosed homes to bar voters from the polls in November.

The fight — started by an online publication that reported Macomb County’s GOP chief had discussed such a plan — is just the latest in a decadeslong battle between Democrats, who accuse Republicans of trying to suppress Democratic votes, and Republicans, who accuse their opponents of vote fraud.

The issue arose last week, when the online Michigan Messenger quoted James Carabelli, the Macomb County GOP chairman, as saying, “We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses.” Carabelli denies making the statement, and says the county party has never had such a plan.

State officials, and Democrats, said it’s not clear any such plan could legally challenge voters’ right to cast a ballot. Even if voters have been foreclosed, state law allows a grace period of 30 days after moving to vote in their old jurisdiction, or 60 days if they move within the same city or township.

In their lawsuit, the Obama campaign and the DNC sought to tie the allegation to Republican practices dating to the 1980s. Bauer compared the idea to the practice of “caging,” the subject of legal battles as recently as 2004, when Republicans challenged 35,000 Ohio voter registrations after voters at registered addresses failed to return postcards mailed by the GOP.

Another One Bites The Dust

Carly Fiorino may have just shot herself in the butt and may be the next person thrown under the political bus.

Carly Fiorina, the former Hewlett-Packard CEO turned top John McCain aide, said she doesn’t think Sarah Palin is qualified to run a major corporation. For that matter, Fiorina said, McCain, Obama and Biden aren’t capable of that kind of job either.

Fiorina was president of Hewlett-Packard until her high-profile ousting in 2006 after the company’s unfavorable performance.

“If John McCain’s top economic adviser doesn’t think he can run a corporation, how on Earth can he run the largest economy in the world in the midst of a financial crisis?” said Obama spokesman Tommy Vietor. “Apparently, even the people who run his campaign agree that the economy is an issue John McCain doesn’t understand as well as he should.” Video Watch Fiorina says Palin isn’t ready for big business »

Fiorina made similar comments earlier Thursday to a St. Louis, Missouri, radio station. She was asked if she thinks Palin is qualified to run a company like Hewlett-Packard.

“No, I don’t,” Fiorina answered. “But that’s not what she’s running for. Running a corporation is a different set of things.”