This Can't Be Happening!

What’s wrong with the Obama administration’s proposal to change the way Social Security checks are adjusted for inflation from using the Consumer Price Index (CPI) to instead using something called a “chained” CPI?

Let’s start with the fundamental problem: Social Security is not a cause of the federal budget deficit, and will not be for years, even if nothing is done to raise more revenue for the program.

Sure the US will eventually have to come up with more money to pay the benefits earned by retirees in the Baby Boom generation, but that problem of an eventual shortfall in Social Security tax revenues can be easily solved by simply eliminating the cap — currently $113,000 in annual income — that is subject to the FICA tax. If the cap were completely eliminated, so that all income was subject to the tax, as is the case with the Medicare tax, the shortfall would be nearly eliminated. Any remaining shortfall could be erased too, by extending some kind of FICA tax to unearned income from investments. My favorite is one that is common in Europe: a small — say 0.25% — tax on short-term stock and bond trades.

But there is a bigger problem with this Obama proposal to cut both Social Security benefits and Medicare funding: Adopting a long-time Republican proposal, it only looks at those programs in isolation, and concludes that they need to be cut. Our Nobel Peace Prize-winning president does not look at the biggest and most wasteful spending in the entire federal budget, which is the military. That bloated white elephant, which this year is sucking up close to $800 billion, not counting the interest on money borrowed to pay for past wars and armaments, could be cut in half or even by three-quarters, and it would still leave the US military budget larger than any other nation’s in the world. The US would be no less safe in that case. In fact, it would be a hell of a lot safer because we would no longer have US troops stationed expensively and provocatively in 1000 foreign locations.

Nobody in Congress is talking about slashing military spending and spending the savings on medical care, Social Security, education and other pressing needs. The public needs to demand this.

Obama on his campaign pledge not to cut Social Security: 'Hey, that was just a campaign promise…

Lindorff on Iran, Korea and the US:

On Iran: “The Iranians have enough money to buy a bomb if they wanted one, on the black market, so I think all of this has been hugely overblown in US propaganda, and Israeli propaganda.”

“If Iran got the bomb, I don’t think they’d use it. I think they’re not crazy. Israel has about 200 nuclear bombs and very high quality delivery systems and Iran would be toast if they used it and they know that. So what you’d actually have if Iran had the bomb would be a similar situation — only probably more stable — than the one you have in India and Pakistan, two countries that really hate each other having nuclear countries, with the difference being that those two countries have borders that are flash points. There are no borders that are flash points between Iran and Israel. So actually I think if Iran had the bomb it would make Israeli diplomacy more difficult, but it might in the end have a salutory effect on the two having to reach a kind of modus vivendi.”

On Korea: “You have the equivalent of a medieval absolute monarchy and so what’s going on in Korea is palace politics, and … I think the US would be wise to let what is happening in that close-to-failed state play out without irritating it to the point of a war.”

On the US: “I would argue that when it comes to adhering to international norms, that probably the biggest outlier state right now is the United States itself. The US has assumed for itself the authority to do whatever it wants regardless of international norms. And I would look at the invasion of Iraq, the threatened war against Iran–which does not pose an imminent threat to the US certainly, and probably to anybody–and the use of a place like Guantanamo that defies all international norms, and the use of drone attacks in any country we want to attack. These are all the actions of what would qualify as a rogue state.”

Lindorff on RT-TV's 'Cross-Talk' Program with the Hudson Institute’s Richard Weitz and Zachary Keck, editor of ‘Diplomat’ magazine (click on image to play program on YouTube)

Last week the governments of France, Germany, Italy, the Netherlands, Spain, and the United Kingdom fired a warning shot at Google and it appears they’re reloading the gun with real ammunition.

This past December, about a year after the Internet behemoth announced a new privacy policy, a working group of representatives from these countries called the policy grossly abusive of people’s privacy and said Google had four months to bring itself into compliance with European law. Google dismissed the ultimatum: “Our privacy policy,” it said, “respects European law and allows us to create simpler, more effective services.” The European countries response was that they will take actions, based on their national laws and in coodination with each other, by the Fall.

These government/corporation tiffs are frequent and their rhetorical fire normally turns into quickly dissipated smoke. This one could be different. It comes at a time when the world’s powerful are trying to decide how much privacy we people will have and what the term privacy actually means, and this squabble’s outcome will affect that and, of course, our freedom. That alone makes it worth watching.

But there’s something deeper here that transcends this conflict. Privacy is, in fact, a core component of democracy and any infringement on complete privacy is an obscene attack on the possibility of having a free and democratic society. As important as the outcome of this show-down might be, the most important and frightening development is that it’s taking place at all.

Google Maps and Eric Schmidt

The political shoot-out began a year ago when Google announced that it was unifying about 60 privacy policy agreements, covering its myriad services, into one big one. The company explained that lumping together these “agreements” (the things you’re asked to read before pressing the “I Accept” button on a website) was a matter of efficiency and transparency. There’s a logic to that: how many privacy policies have you read on the Internet? One would assume that if you don’t read one, you can hardly be expected to read 60.

That, however, is a corporate shell game. Google made this move not to make our reading easier but to make gathering information about us more efficient. Google is a marketing company and nothing makes a marketing company more powerful and valuable to advertisers than having pertinent information on hundreds of millions of people all over the world. Its privacy policy is fitted to that purpose. It says that, once you sign up and begin using these services as an identified user, you give up that right of refusal. So, because people don’t read that privacy policy, they don’t realize that it effectively eliminates their privacy.

Note from TCBH: Manhattan island hosts the headquarters of four of the nation’s five biggest “too-big-to-fail” banks: Goldman Sachs, Morgan Stanley Smith Barney, JP MorganChase, and Citi Group. US Attorney General Eric Holder has stated publicly in Congress that he has no intention of seeking criminal indictments of these banks or their top executives — or even their middle-ranking executives for that matter — despite the myriad frauds, scams and schemes they’ve all engaged in, like robo-signing mortgage documents and touting derivatives that they were privately calling “sh*t,” all of which led to the crashing of the US and global economies.

Holder may be feeling pressure from the White House not to prosecute the big banks, but what about District Attorney Cyrus Vance, Jr.? As Manhattan DA, he has at his disposal New York state’s powerful banking laws, as well as the state’s anti-fraud and conspiracy statutes. But incredibly, he has not filed a single criminal case against the giant mega-banks under his jurisdiction. Instead, as I write in a cover story in the current edition of the New York city business publication Crain’s New York Business, he has brought the full power of his office down on one of the tiniest banks in the Big Apple: Chinatown’s Abacus Bank.

The thing is, Abacus is a bank that has made no sub-prime loans, doesn’t trade in derivatives, and has a default rate on its loans that is close to zero. At 0.5%, in fact, its default rate is less than one-tenth of the national average default rate of 6.0% for the nation’s banks! Unlike the powerful, predatory “too-big-to-indict” banks located just a few blocks further downtown, Abacus is also a bank that actually reported to federal regulators on its own the problem that led to Vance’s indictment. It was even commended by the Office of Thrift Supervision for being so forthcoming. In contrast, reporting fraud by their own executives is not something that the biggest banks have been particularly known for. No matter, Vance, a politically ambitious politician, went after not the big banks, but Abacus. Go figure. To read this incredible tale of misplaced prosecutorial priorities and epic political gutlessness, go to: Crain’s New York Business (Warning: reading the article is free, but you will have to register to access it.)
 

Manhattan DA Cyrus Vance, Jr.: no prosecutions of biggest banks based in his Manhattan district

Hold everything!

I mean it. Stop talking about cutting school budgets, Social Security benefits, Medicare, Veteran’s pensions. Stop cutting subsidies to transit systems, to foreign aid. Stop cutting unemployment benefits. Stop it all. There can not be any justification for budget cutting while wealthy criminals, corrupt politicians and business executives are hiding what reportedly totals between $29 trillion and $32 trillion in offshore tax havens.

A massive data dump by the Washington-based International Consortium of Investigative Journalists (ICIJ), working in conjunction with dozens of news organizations around the globe, has exposed the secret files of over 120,000 dummy offshore companies that have been used for years to hide the wealth — much of it ill-gotten, all of it tax-dodged — of the world’s rich and mega-rich.

Before we go further, let’s think about those numbers, which are really mind-boggling.

The US annual federal budget for 2012 was $3.7 trillion. The total US economy, largest in the world by far, was $15.8 trillion in 2012. That federal budget deficit that we hear so much about, which is growing by $1 trillion a year, totals about $16 trillion.

Now by comparison, the Philadelphia school system — fifth-largest in the country — is in crisis, with 27 schools being closed down because of a budget shortfall of $304 million. That shortfall (the direct result of tax breaks given to wealthy corporations in the city), is approximately one ten-millionth of a percent of the amount of money criminal politicians and business leaders — many and probably the vast majority of them, Americans — are reportedly squirreling away abroad in hidden accounts each year!

The British Virgin Islands: Where the super rich are hiding our money

in time no more will be I’ll see and quiet mind see out as always back to push back assume preserve status quo of instances of loss and scribbled lists little births and karmic asides I’m about to scream catch-phrases silver gold brass and the wall paper is peeling and the toilet is Swedish sorry about the mess never home we’re friends now she hates me the water doesn’t taste good and the trees are crying again go see what they want if they come again let me know we have to put a stop to all this bad music all of us are leaving are you coming or are we just waiting for a sign the milk is sour the cat thin what’s that? Who said? Look what I bought what did you want? What kind of color is peach? Laugh laugh I hate when we can’t tell if he’s angry the way they look it takes my breath away but I’ll be there at 6:00 I said there I said it I thought you were I made an offer I said they wouldn’t but you knew better didn’t we North Korean missiles pointing and I thought everything was Billy Boy Billy Boy what do you want from me but here’s a thought change your name get a splinter etcetera etcetera
 

— Gary Lindorff

(Photo by Gary Lindorff)

The history of third parties in America is pretty dismal. The system is rigged against them, for one thing. But equally problematic is the lack of focus that leads to infighting and splits whenever a third party is created.

A great answer to this would be to create a third party that has a laser-like focus on a single huge issue, where there is little or no room for debate over what the party stands for.

As it happens, there is such an issue, and it has the potential to decimate the two major parties by pulling support from both their bases.

I’m talking about Social Security and its more recent offspring, Medicare, both under threat by the Democratic/Republican duopoly in Washington, with the Democratic president now proposing a budget that would cut Social Security benefits and Medicare funding.

Social Security is without a doubt the most popular program ever created in Washington. Virtually every American pays into it and expects to rely on it in old age, or if he or she becomes disabled. There are currently 54 million people who are receiving Social Security benefits ( 39 million are 65 or older, and 8 million are disabled). And there are some 74 million Baby Boomers — people born between the years of 1946 and 1964, representing one-in-four of all Americans — who will be receiving it over the next several decades. Add to that number the many younger people who are ardent advocates of the program, not just because they expect to also depend upon it, but because they know it is providing already for their parents and grandparents, and you have a bloc of voters and potential voters the likes of which this nation has never seen.

The key to getting them all together is establishing a political party whose raison d’être is preserving, improving and expanding Social Security benefits.

“The vast majority of 401(k) funds are at risk of lawsuits over excessive fees.”
— James Holland, fiduciary consultant
 

Short-sellers and the plaintiff’s bar have a lot in common. Short-sellers attack companies they consider over-valued. Plaintiff’s attorneys file class-action suits on contingency against firms they think are committing fraud. Both can win big or lose big. Both are widely hated by corporate America.

Enter Jerry Schlichter, a plaintiff’s attorney whose St. Louis worker injury law firm Schlichter Bogard & Denton last year won a big judgment in federal district court against technology firm ABB and its 401(k) provider, Fidelity Management Trust, a leading provider of 401(k) investment plans.

In a March 2012 ruling that has roiled the retirement world, the court awarded plan participants at ABB $36.9 million, plus court costs and legal fees of $50 million. It was a big victory for Schlichter, who since 2006 has filed a raft of lawsuits over allegedly excessive fees charged to employees for their 401(k) plans.
Although Schlichter and other attorneys have also lost their share of excessive fee class action suits, the ABB verdict, now on appeal in the 8th Circuit, as well as hefty settlements with Caterpillar and General Dynamics, is nonetheless a shot across the bow of the 401(k) industry.

It warns plan sponsors large and small that they need to analyze the plans they offer their employees better and to accept their ERISA-mandated fiduciary responsibility to provide retirement plans with reasonable recordkeeping, administrative and investment fees. And it alerts employees that their plans may be ripping them off, or at least serving them poorly.

In a late but happy surprise, ThisCantBeHappening! has learned that two of its founding members, Dave Lindorff and Linn Washington, Jr., were winners of a pair of this year’s Project Censored awards.

Dave Lindorff and Linn Washington: Maybe not 'ones for the book,' but making waves just the same

Each year Project Censored’s judges select the 25 issues that they believe were most censored or poorly reported on by the corporate media. More than one news organization or writer can win an award in any particular story category. For some reason, both Dave’s and Linn’s stories, though selected by the judges, were left out of the group of winners listed in the organization’s annual book, Censored 2013, but today Project Censored Director Mickey Huff discovered the oversight and corrected it, listing and linking both articles by the two journalists on the organization’s website.

Linn’s winnng piece reported on how Wachovia Bank had knowingly laundered millions of dollars of cartel drug money, but when caught by federal regulators, was only hit with a fine, and no criminal charges, with its executives skating free. He made the key point that at the same time, thousands of people caught with a small quantity of drugs for their own use are languishing in the nation’s prison. The article was titled Too Big to Do Time?: Fed Wrist-slap for Wachovia Bank Makes a Farce of the Drug War. It ran in this publication last May 27.

Dave’s award was for an article that appeared first in the online edition of The Nation magazine. Titled Colleges Withhold Transcripts from Grads in Loan Default, it ran on March 30, 2012.

To view the Project Censored award pages for these articles, you can go here and here.

ThisCantBeHappening! now can claim four Project Censored awards, which is not bad for a little news organization that has no budget, can’t pay its writers, depends upon donations from its readers, and has been banned by Truthout!. (Earlier awards, both won by Dave, were for an article about government planning preparations for restoring the draft and an article exposing US military use of depleted uranium munitions in the 2011 air attacks on Gaddafy troops in Libya.)

The Project Censored Awards are honors, but don’t come with any cash. We’d like to suggest that our readers help us celebrate by sending us some financial support, which is badly needed here at TCBH!. You can use the Paypal button on the right of the masthead, or send a check made out to “Dave Lindorff/TCBH” at POB 846, Ambler, PA 19002. (We’ll probably blow the first donation on a bottle of champaign or a few bottles of beer to celebrate, but the rest will go straight into subsidizing our journalism work at TCBH!)

 
“The elite always has a Plan B, while people have no escape.”
– Ahmad Saadawi
 

Last month when the tenth anniversary of the invasion of Iraq was the big buzz in the mainstream press I was overcome with the urge to write a we-told-you-so essay in which “we” would be the peace movement. You know, those tens of millions of people who took to the street on February 15, 2003 to tell our government not to invade Iraq because it was a wrong-headed and stupid idea.

That would be the same peace movement that’s now barely on life support while the war movement that so dishonestly brought you the Iraq War — and the Vietnam War before that — is doing just fine, thank you. In fact, it’s looking toward a bright and shining future when human troops will meld with technology. Lethal remotely-controlled drones are only a primitive beginning. Futurists like Ray Kurzweil see us approaching a condition when the rate of technological change will exponentially become a line on a chart going up like a rocket. And we can be sure our military will be on the darkest edge of this change.

Plan B: War meets the Singularity Moment

Kurzweil is an evangelist for such a future. In his book The Singularity Is Near: When Humans Transcend Biology, he writes adoringly about “the law of accelerating returns” and “the singularity” that will be achieved at the top of the rocketing curve of accelerating technological change. We’re now in the “knee” of that curve that, he predicts, will soon turn vertical, as technological change “explodes with unexpected fury.”

Tragically, in this kind of mad rush to the future, history becomes a bummer for losers.