The DISH

Unbossed and unbought news and information you can use

Vol. 13 No. 32…Dedicated to the Dialogue on Race…August 8, 2010

Bit of History

Gunnar Myrdal (1898 - 1987)

The big majority of Americans, who are comparatively well off, have developed an ability to have enclaves of people living in the greatest misery without almost noticing them. The study of women's intelligence and personality has had broadly the same history as the one we record for Negroes ... in drawing a parallel between the positions of and feeling toward women and Negroes, we are uncovering a fundamental basis of our culture. White prejudice and discrimination keep the Negro low in standards of living, health, education, manners and morals. This, in its turn, gives support to white prejudice. White prejudice and Negro standards thus mutually 'cause' each other...... Gunner Myrdal (An American Dilemma)

Karl Gunnar Myrdal was born on December 6, 1898 in Skattungbyn, Sweden. He graduated from the Law School of Stockholm University in 1923 and began practicing law while continuing his studies at the university. After receiving a juris doctor degree in economics (1927), Myrdal was appointed docent in political economy. His doctoral dissertation on the role of expectations in price formation strongly influenced the Stockholm school (1933-1947). Myrdal was at first fascinated by the abstract mathematical models that were fashionable in the 1920s. He helped found the Econometric Society, based in London.

He studied in Germany and Britain from 1925 to 1929 before traveling to the United States (1929-1930) as a Rockefeller Fellow. During this period, he published his first books, including The Political Element in the Development of Economic Theory. After marrying Alva Reimer (1924), who went on to hold high posts in the United Nations and UNESCO, as well as becoming Swedish Ambassador to India and Minister of Disarmament and of Church, the couple coauthored Crisis in the Population Question (1934). Their basic premise was finding what social reforms are needed to allow for individual liberty (especially for women) while promoting child-bearing. Not only did it herald many positive social reforms for Sweden, the book incorporated some of the zeitgeist of the 1930s by promoting the idea of eugenics and compulsory sterilization, which were actually practiced in Sweden until 1975.

Myrdal returned to Europe in 1931 to serve one year as Associate Professor in the Post Graduate Institute of International Studies, Geneva, Switzerland. He was appointed to the Lars Hierta Chair of Political Economy and Public Finance at the University of Stockholm (1933). Professor Myrdal became active in Swedish politics and was elected to the Senate in 1934 as member of the Social Democratic Party.

Myrdal returned to the US in 1938 to conduct one of the most important studies of his career -- An American Dilemma: The Negro Problem and Modern Democracy, which was commissioned by the Carnegie Corporation of New York. The material he collected and interpreted on the American Negro problem was published in 1944; it had a profound effect on race relations in the US. It served as source material in the landmark Brown v Board of Education of Topeka (1954) Supreme Court decision, which outlawed US segregation. Myrdal was a signatory of the 1950 UNESCO declaration The Race Question, which also influenced the Brown v. Board of Education decision.

By 1942, Myrdal was back in Europe, where he was re-elected to the Swedish Senate. He served as member of the Board of the Bank of Sweden and was Chairman of the Post-War Planning Commission. He was Sweden's Minister of Commerce from 1945-1947. Myrdal joined the international political circle in 1948 with the birth of the United Nations. He accepted an appointment as UN Executive Secretary of the Economic Commission for Europe. Serving as Executive Secretary from 1947 to 1957, Myrdal guided UNECE through the difficult early years of the "Cold War" and ensured that it became truly a pan-European organization.

Although, a founding member of the "Stockholm school" early on in his career, he became disenchanted with the movement and later charged that it was "ignoring the problem of distribution of wealth in its obsession with economic growth, of using faulty statistics and substituting Greek letters for missing data in its formulas and of flouting logic." Similar to John Maynard Keynes, Myrdal was an early supporter of the theses of adjusting national budgets to slow or speed an economy, even stating that the idea was first developed in Sweden by him and the Stockholm school.

Myrdal became Trade Minister from 1945 to 1947. Afterwards, his research centered on Asia and the causes of Third World poverty. He published the very influential study "Asian Drama: An Inquiry into the Poverty of Nations" (1968) renamed "The Beam in our Eyes" (a biblical reference; cf. Matthew 7:1-2). In it, he introduced "scientific relativism of values," which is built on the idea that the logical gulf between "is" and "ought" is more sophisticated than just dividing premises into categories.

Professor of international economics at Stockholm University between 1960 and 1967, Myrdal founded the Institute for International Economic Studies at the university in 1961. He shared the Bank of Sweden Prize in Economic Sciences (otherwise known as the Nobel Memorial Prize in Economics) with Friedrich Hayek in 1974, but argued for its abolition because it had been given to such "reactionaries" as Hayek and Milton Friedman.

Gunnar and Alva Myrdal had three children, two daughters, Sissela and Kaj, and one son, Jan. He authored many books and other publications, as well as receiving numerous awards and degrees throughout his career. Gunner Myrdal died in Danderyd, near Stockholm, on May 17, 1987. (Sources: Nobel Lectures, Economics 1969-1980, Editor Assar Lindbeck, World Scientific Publishing Co., Singapore, 1992, http://nobelprize.org and http://en.wikipedia.org)

Venue for an Artist

The Rationale for State-Owned Banks

By Lorenzo A. Canizares

Michigan has an unemployment rate of 14 percent, and has been particularly hard hit by the economic downturn. Verg Bernero, Mayor of Lansing, the state's capital, and a leading democratic candidate for governor, proposes to relieve the state's economic ills by opening a state-owned bank. He says the bank could protect consumers by making low-interest loans to those most in need, including students and small-businesses; it could also help community banks by buying mortgages off their books and working with them to fund development projects.

Bernero's proposal should be seriously considered given the political state of the nation right now since Republicans and Wall Street have combined forces to impede any possibility of the Obama administration fixing the economic problem created by their recklessness. Their strategy is to dictate by stalemate, the Party of "NO," using that filibuster! Consequently, Bernero's words ring even louder "Hundreds of jobs-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs."

Ellen Brown, a litigation Attorney from Los Angeles turned researcher who has done superb work letting the nation know about the state of North Dakota's thriving economy, says "Bernero joins a growing list of candidates proposing this sensible solution to their state's fiscal ills. Local economies have collapsed because of the Wall Street credit freeze. To reinvigorate local business, Main Street needs a heavy infusion of credit, and publicly-owned banks could fill that need."

Where are we now? We have a severely depressed economy - and that depressed economy is inflicting long-term damage. The national unemployment rate is 9.5% as of 7/2/10, or 15 million people. The rate jumps up to 16.6% if we count part-time workers that need full-time jobs and those who stopped looking. Plus 6.8 million have been out of work longer than six months. Nobel Prize economist Paul Krugman says "Every year that goes by with extremely high unemployment increases the chance that many of the long-term unemployed will never come back to the work force, and become a permanent underclass. Every year that there are five times as many people seeking work as there is job openings means that hundreds of thousands of Americans graduating from school are denied the chance to get started on their working lives."

The time is ripe for state-owned banks. The American people, the vast majority of them, have identified Wall Street as the main enemy. Many Americans that poll against Obama are doing so on the belief that he is too chummy with Wall Street. According to a Gallup poll released in mid-June the number of Americans that see themselves as conservatives rose to 42%. This poll has to be put in the context that many Americans view the Wall Street "feast" as a result of liberal policies that have allowed this kind of economic behavior. The American people realize that Wall Street has us in a barrel. Obama and the Democrats are paying dearly for prevailing political misconceptions that Obama's policies have produced record deficits while not providing jobs. Somehow the nation has been allowed to forget that Republicans cut taxes twice while starting two wars. It's in the Democrats self-interest to find ways to energize the economy without having to beg cooperation with those that want them to fail.

Back to Ellen Brown, in an article published 3/18/10 for Yes! Magazine she states she had been tracking candidates in five states running on a state bank platform and one state (Massachusetts) has a bill pending. One month later, there are three more bills on the rolls - in Washington State, Illinois and Michigan - and joining Bernero as a candidate of proponents is Gaelan Brown of Vermont, who is running for the State Senate. That brings the total to seven candidates in as many states (Florida, Oregon, Illinois, California, Washington State, Vermont and Idaho) campaigning for state-owned banks, including three Democrats, two Greens, one Republican (yes, Virginia there are still a few decent Republicans left), and one Independent.

Gaelan Brown says on his website, "Vermont should explore creating a state-owned bank that would work with private VT-based banks, to insulate VT from Wall Street corruption, and to increase investment capital for VT businesses, modeled after the very successful state-owned bank of North Dakota."

The time has come to undress the crown prince, the Bank of North Dakota. This is how Ellen Brown describes it: "The Bank of North Dakota, currently the nation's only state-owned bank, is the model (with variations) for all the other proposals on the table. The Bank of North Dakota acts as a "banker's bank," partnering with other banks in "participation loans" which allow them to compete with larger banks. In a participation loan, the community bank originates the loan and takes responsibility for it, while the participating banks contributes funds and shares in the risk and profits. The Bank of North Dakota also makes low-interest loans to students, farmers and businesses; underwrites municipal bonds and provides liquidity for more than 100 banks around the state."

It is important to add for naysayers' sake that the Bank of North Dakota was founded in 1919. Last year North Dakota had the largest surplus it ever had. It was the only state adding jobs when others were losing them. In March 2009, when 46 of 50 states were in fiscal crisis, the Council of State Governments noted that North Dakota was in the enviable position of discussing tax cuts and looking for ways to spend its surplus. North Dakota's riches have been attributed to oil, but many states with oil are floundering. The sole truly distinguishing feature of North Dakota seems to be that it has managed to avoid the Wall Street credit freeze by owning and operating its own bank.

Other states are crying uncle. They need to find ways to help their own people. They need to liberate themselves from the economic limitations imposed by Wall Street financial recklessness. There is a MAJOR difference between seeking profits and unbridled greed. Our nation developed the world's largest middle class because we created the regulations to keep unbridled greed under control. We need to find our way again or all hell might break loose.

Intuit's Vibe

"Taking Advantage of Low Labor Costs Abroad"

By David Sirota

In recent months, President Obama reversed his campaign promises on trade issues - first by dropping his pledge to renegotiate NAFTA and then by pushing to pass NAFTA-style trade agreements with South Korea, Panama and Colombia. Now, with the unemployment crisis persisting, the key jobs question is once again front- and -center in American politics. Specifically: How do we create jobs here at home and build our most valuable 21st century industries?

The first and foremost answer is that our government should stop doing stuff like the program described in this stunning new report from Information Week: U.S. To Train 3,000 Offshore IT Workers Despite President Obama's pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $22 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia.

Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs.

The outsourcing program is sure to draw the most fire from critics. While Obama acknowledged that occupations such as garment making don't add much value to the U.S. economy, he argued relentlessly during his presidential run that lawmakers needed to do more to keep hi-tech jobs in IT, biological sciences, and green energy in the country.

Now look, I'm all for a robust foreign aid budget - we don't do nearly enough to help the developing world. However, using foreign aid money to specifically help private corporations "take advantage of low labor costs" in the developing world - that's not "aid," that's rank taxpayer subsidization of for-profit exploitation.

Right now, even if we do not reform our atrocious trade policies that incentivize the ongoing wage-cutting race to the bottom, the least we should be doing is investing every single available dollar we have in job training and job creation here at home. Doing the opposite - actually using public dollars to intensify that wage-cutting race to the bottom - is grotesque.

George W. Bush's administration was rightly criticized by progressives for publicly endorsing job outsourcing, and Obama's administration should be similarly taken to task for now putting taxpayer funds behind the previous administration's endorsement.

News You Use

Stop Stealth Social Security Assault

The National Commission on Fiscal Responsibility and Reform was created by President Barack Obama to develop a plan to address the federal budget deficit and the government's long-term debt problem. Despite the fact that Social Security has nothing to do with the federal budget deficit, Mr. Obama gave the Commission a green light to fold Social Security, Medicare and Medicaid into its deliberations.

Unfortunately, the commission is stacked with people hostile to Social Security and/or indifferent to the devastating effect cuts will have on millions of lower- and middle-income families. Former Wyoming Republican Sen. Alan Simpson, a long-time foe of Social Security, co-chairs the Fiscal Commission along with Democrat Erskin Bowles, who advocated for privatization in the 1990s. There are 18 members of the Commission altogether -- six appointed by the White House, six by the Senate and six by the House (three Republicans and three Democrats from each chamber).

Repeated requests for openness and transparency of the commission's deliberations have gone unheeded. As the commission members meet behind closed doors, it is impossible to say exactly what they are up to. But, Simpson and Bowles have made no bones about the fact that they view Social Security cuts as a potential way to fix the federal deficit.

The idea that Social Security caused or could fix the budget deficit is a flat falsehood pushed by ideologues on the right who oppose New Deal programs like Social Security and by Wall Street moguls who want to convert Social Security into a privatized profit-maker for themselves. Cutting Social Security will not put a dent in the deficit. What it will do is quickly push millions of people into poverty, while destroying the integrity of the system for future generations.

The federal budget deficit was caused primarily by three things: 1) unfunded wars in Iraq and Afghanistan, 2) Bush-era tax cuts for the wealthiest, and 3) a Swiss cheese financial regulatory system that tanked our economy, losing millions of jobs and the income tax revenues that went with them.

Social Security, with a separate funding source and a separate fiscal system, is completely detached from the federal operating budget. Social Security is funded by a payroll tax. Some of our payroll taxes are used to pay current retirees; the remainder is invested in U.S. Treasury Bonds. Currently, the Social Security system has more than a $2 trillion surplus. It was set up that way in the 1980s to account for the baby boomers' retirement years. There is no Social Security crisis -- the program is solvent for at least the next 27 years, and with moderate tweaking, it would be solvent even further into the future.

Polls show huge majorities of Republicans, Independents, even self-styled Tea Partiers, as well as Democrats, are opposed to cuts in Social Security. Every representative who is not retiring is up for re-election this year, as are 37 senators. Congress can stop this assault on Social Security, but only if there is the political will to do it. During this August break, concerned citizens need to demand promises from every member of the House and Senate that they will do whatever it takes to prevent any cuts to Social Security -- including raising the retirement age and privatization.

Let your representatives know they need to stand with the people of this country and against the secretive Fiscal Commission's assault on Social Security. Call, email and/or visit your representative and both senators during the August recess and demand that they do everything in their power to prevent cuts to Social Security -- no direct benefit cuts, no raising the retirement age and no privatization that will only enrich the fat cats on Wall Street.

Politics Y2K10

America's Incredible Shrinking Safety Net

By Arthur Delaney

President Obama's 2009 stimulus bill expanded federal aid for people affected by the worst recession since the Great Depression, but congressional heartburn over deficit spending has prompted a campaign to reduce the deficit impact of further spending almost entirely through slashing the safety net.

Senate Democrats hope to pass a bill that, to offset the cost of $16 billion in Medicaid assistance for states and $10 billion to prevent teacher layoffs, will cut $6.7 billion in future food stamp funding. The cut is the latest in a series of drop-in-the-bucket efforts to avoid adding to a federal budget deficit expected to top $1.4 trillion this year.

The first cuts came in May, when Democratic leaders hoping to move a broad domestic aid package in the House of Representatives, bowed to deficit demands and dropped $24 billion in state Medicaid assistance and $7.7 billion in subsidies for laid-off workers to maintain their health insurance via the COBRA program. 'It's obscene,' said Rep. David Obey (D-Wisc.).

House Democrats also shortened the extension of unemployment benefits for the long-term jobless by one month, saving roughly $6 billion.

When the scaled-down bill landed in the Senate, Democratic leaders discovered they'd need to make further cuts to win the support of conservative Democrats and moderate Republicans. A handful of senators fought to replace the COBRA subsidy and the state Medicaid assistance (known as FMAP), but the amendment that prevailed instead cut $25 per week from unemployment benefits, saving $5.8 billion.

Another program that fell by the wayside was the TANF Emergency Fund, a welfare-to-work program that has subsidized more than 240,000 jobs. Extending the program through next year would have cost $2.4 billion.

Each of the programs cut was put in place by the stimulus bill, formally known as the American Recovery and Reinvestment Act, enacted in February 2009 when the unemployment rate stood at 8.2 percent. The rate is now 9.5 percent and few economists expect it to drop much further down anytime soon, but compassion for the unemployed has been replaced in Washington with the suspicion that extended jobless aid discourages people from looking for work.

After a 50 day delay, Senate Democrats finally passed a reauthorization of unemployment benefits with a $33 billion deficit impact at the end of July.

Democrats have attempted to pay for their domestic aid packages by closing tax loopholes exploited by investment fund managers and companies that ship jobs overseas, but those measures have failed. The bill coming up for a vote in the Senate on Wednesday would revive one of them and raise $9 billion by eliminating foreign tax credit loopholes, but Democrats have apparently lost their appetite for trying to drum up support for hiking taxes on hedge fund managers.

Before it went away, that provision was weakened every time a different piece of jobless aid disappeared, deficit reduction needs notwithstanding. At first, closing the loophole would have raised $18.685 billion. In the next draft of the domestic aid bill, it raised $14.157 billion. Then $13.905 billion, and then $13.594 billion. (In Obama's budget, raising taxes on "carried interest" would have raised $23.89 billion.)

The Obama administration has encouraged Congress to reauthorize the programs, but the pressure hasn't been overwhelming.

Meanwhile, Republicans have done everything they can to stand in the way of reauthorizing jobless and state aid, a strategy that will continue this week. "The $1 trillion stimulus bill was supposed to be timely, targeted and temporary," said Senate Republican leader Mitch McConnell on Tuesday. "Yet here we are, a year and a half later, and they're already coming back for more." (Source: www.huffingtonpost.com )

Disgruntled feels: Typical! Forced to either resign his position as driver for a Connecticut beverage distributor or be fired for stealing, Omar Thornton decided to kill eight of his fellow employees before committing suicide. According to statements made by Thornton in a telephone conversation with a 9-11 dispatcher immediately following the carnage, his workplace is "a racist place." His allegations were reinforced by cell phone photos he had taken and shared with his girlfriend of racist graffiti and an overhead conversation in which a white employee declared he "wanted that "n****r out of there." Thornton, according to company officials and the labor union representing its employees, never filed a racial discrimination complaint. He probably knew doing so would be counterproductive, because a formal complaint becomes a declaration of war; the racial harassment would increase and, in the end, he would have simply lost his job sooner. As is typical in such situations, company officials, friends and family members of the victims disavow claims that the company or its employees engaged in acts of racial discrimination against the disgruntled employee or other blacks. Despite the claims of innocence by the company and victims' family and friends, something happened to make Thornton go postal.

Disgruntled wants to know: During the housing boom, predatory lenders targeted the poor, blacks and Hispanics. In urban areas, such as South DeKalb County, Georgia, which is predominantly black, predatory lenders were allowed to peddle their toxic wares unimpeded by any state, federal or local law. They made a killing! Today, the areas hardest hit by foreclosures are those in which the predators were allowed free reign. Many of their victims were first-time home buyers that were steered into cheaply-built over-priced homes they could not afford. Others had good credit and jobs; they could afford the homes, but were given sub-prime loans. Victims of discriminatory lending practices, these are the people we should be helping. Just as these people were targeted by predatory lenders during the housing bubble, why are we not targeting them with funds to remedy the housing crisis?

Disgruntled says: It is time for the shady statistics to be shelved. The July employment situation released by the U.S. Bureau of Labor Statistics on Friday is another fairy tale. Even though the economy hemorrhaged more jobs in July on top of the revised upward number lost in June, the unemployment rate remained unchanged at 9.5 percent. This number is totally bogus. The economy is losing jobs, while it is common knowledge that just for the unemployment rate to remain constant at least a couple hundred thousand new jobs must be created monthly to absorb new entrants into the labor force. Nobody can remember when this number of jobs was last created, probably during the Clinton administration. So, who are we fooling with these obviously doctored data? Nobody! Moreover, even though we know the data are bogus because they understate the severity of the unemployment situation, they paint dire economic conditions for black America. This is a bad situation made worse because we have the first black president sitting in the Oval Office unwilling to recognize that this economic crisis, just as those in the past, is not impacting everyone equally. Sadly, while blacks excuse his lack of action or presidential jawboning about our situation and say to ourselves and others we understand that he is president of the entire country, black America is in the throes of an economic depression.

Mailbox: E-Mails, Faxes and Telephone Calls

Email www.nytimes.com ...Sin and a Shame...By Bob Herbert...The treatment of workers by American corporations has been worse -- far more treacherous -- than most of the population realizes. There was no need for so many men and women to be forced out of their jobs in the downturn known as the great recession. Many of those workers were cashiered for no reason other than outright greed by corporate managers. And that cruel, irresponsible, shortsighted policy has resulted in widespread human suffering and is doing great harm to the economy. "I've never seen anything like this," said Andrew Sum, an economics professor and director of the Center for Labor Market Studies at Northeastern University in Boston. "Not only did they throw all these people off the payrolls, they also cut back on the hours of the people who stayed on the job." As Professor Sum studied the data coming in from the recession, he realized that the carnage that occurred in the workplace was out of proportion to the economic hit that corporations were taking. While no one questions the severity of the downturn -- the worst of the entire post-World War II period -- the economic data show that workers to a great extent were shamefully exploited.

Email www.huffingtonpost.com ...Dwindling Retirement Savings 'Undiscussed Explosive Bomb' of Recession...By Laura Bassett...Many Americans seem to be losing hope. Only 16 percent of respondents to the EBRI survey expressed confidence in their ability to retire comfortably, the second lowest point in the 20-year history of the survey. Marguerite DiGaetano, 58, says she is confident that after two years of solid unemployment, despite having worked her whole life, she will never be able to retire. "I think the person who invents the cubicle where you can discreetly hang your walker where it doesn't trip anybody, that person will be very popular with the baby boomers," she said. "Who's gonna be able to retire at 65? That's only seven years away. Not me. I'll be working until I die."

Email www.alternet.org...Deficit Scare Talk Is a Big Scam by Corporations and Right-Wingers; The Problem Is Not Enough Good-Paying Jobs...By Joshua Holland...We have to drive the debate about our economic priorities and not get distracted by the opposition. The Great Recession doesn't exist in Washington, DC. Six of the 10 wealthiest counties in the U.S. are in the DC metropolitan area, and according to Gallup's Economic Confidence Index, citizens of the nation's capitol are the most optimistic in the country, far more positive about the economy than the rest of America. It's understandable -- the private sector simply isn't hiring; public spending has averted a second Great Depression, and the spigot is located in the District. The immense economic pain the majority of working Americans are suffering is seemingly unimportant to our political and media elites. It's the best explanation for their callous and incomprehensible focus on a distinctly long-term deficit problem, while they shamefully abdicate the duty they owe their constituents to do whatever must be done to address a profound crisis in our labor market -- the worst jobs picture since the Great Depression. While Democrats and Republicans dither over the budget and argue over extending the Bush tax cuts, economist Paul Krugman wrote that "the real danger" we face is that "those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is 'structural,' a permanent part of the economic landscape -- and that by condemning large numbers of Americans to long-term joblessness, they'll turn that excuse into dismal reality."