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And HERES THE GOOD NEWS Epic T-shirt fail: "I'm too pretty to do my homework so my brother has to do it for me"
Lylah M. Alphonse, Senior Editor, Manage Your Life Wed Aug 31, 2011 11:31am PDT http://shine.yahoo.com/channel/parenting/epic-t-shirt-fail-quot-im-too-pretty-to-do-my-homework-so-mybrother-has-to-do-it-for-me-quot-2537106/
A few months ago, the Internet was up in arms over a white David & Goliath T-Shirt that read, in pink bubble letters, "I'm too pretty to do math." Then there was the one with "Future Trophy Wife" written on it. But many parents think this one is worse. The long-sleeve T-shirt that J.C. Penney pulled off its website today amid plenty of parental outrage read: "I'm too pretty to do my homework so my brother has to do it for me." And, judging by the description of the shirt on the J.C. Penney website "Who has time for homework when theres a new Justin Bieber album out? Shell love this tee thats just as cute and sassy as she is"it seems like the company didn't have a problem with the shirt until customers started to complain. Thanks, major clothing retailers. We struggle to teach our girls that beauty isn't everything, that they don't have to play dumb in order to be popular, that women can be both smart and pretty. But, even though studies show that girls are as good at math as boys, even with beautiful movie stars earning Ivy League degrees in between blockbuster hits, the stereotypes persistthanks in large part to messages like the one on that "cute and sassy" Tshirt marketed to girls age 7 to 16. The controversy started late Tuesday night, when clothing designer Melissa Wardy saw a tweet about the T-shirt and then shared the link on her Facebook page. "I advocate for girls and against this kind of gender stereotyping in the marketplace," she said in an interview with Yahoo! Shine. "My little girl starts kindergarten tomorrow... I don't want her to see a shirt like that on her classmate, something saying that pretty is cute and right and the academics should be left to the boys." "It incorporates all of the wrong messages for girls," she adds. "Why are we conditioning kids to wear something that degrades their self-worth?" Tired of girls' clothing that focused on "looks, shopping, or hyper-hypergirliness," Wardy launched her own line of apparel, called Pigtail Pals, in 2009. She spent Wednesday designing a T-shirt of her own in response to the "I'm too pretty to do homework" message. "Girls deserve better products in the marketplace," Wardy says. Her new shirt, adorned with stars and swirls in a rainbow of colors reads, "Pretty's got nothing to do with it" on the front and "Redefine girly" on the back. "There's nothing wrong with being girly," Wardy says. "I'm not anti-pink. I'm not anti-princess. I'm anti-limitations." J.C. Penney removed the T-shirt on Wednesday and issued this statement: "J.C. Penney is committed to being America's destination for great style and great value for the whole family. We agree that the 'Too pretty' t-shirt does not deliver an appropriate message, and we have immediately discontinued its sale. Our merchandise is intended to appeal to a broad customer base, not to offend them. We would like to apologize to our customers and are taking action to ensure that we continue to uphold the integrity of our merchandise that they have come to expect." Anyone remember Teen Talk Barbie, who complained "Math class is tough!" when you pressed a button on her back?

URLs Jimmy Carters: Energy and National Goals http://www.eoearth.org/article/Jimmy_Carter%27s_%22malaise_speech%22# Background Briefings: Alan Lichtman http://ianmasters.com/content/january-13-2011-obamas-speech-andamerican-politics-lebanon-and-hezbollah Class War Battlefields: Introduction & Episode 1 (The Ten exclusive) http://jumbofiles.com/j5y0njqpm0el http://jumbofiles.com/2lh81x5075dm Comments can be sent to Classwarbattlefield@yahoo.com This Just In! Youtube Clip! The Big Picture: The Latest Slap in the Face to 9/11 Responders According to Mayor Bloomberg, first responders are not invited to this Sundays 9/11 tribute. Thanks to Wendy for sending me this clip! http://www.youtube.com/watch?v=4-plvBPBOkY&feature=channel_video_title

Op-Ed: Why It's Time to Nationalize the US Defense Industry

John Stanton (Source: History News Network; published July 24, 2006) http://www.defense-aerospace.com/article-view/feature/71678/op_ed%3A-is-it-time-to-nationalize-the-usdefense-industry%3F.html
In 1969 John Kenneth Galbraith penned a piece for the New York Times titled The Big Defense Firms Are Really Public Firms and Should be Nationalized arguing, among other things, that it was folly for defense contractors to claim that they were private corporations. Such claims made a mockery of free enterprise. Nearly 40 years hence, Charlie Cray and Lee Drutman have resurrected and energized Galbraiths argument in their work titled Corporations and the Public Purpose: Restoring the Balance (Seattle Journal for Social Justice, Winter 2005). They make an exceptionally compelling case for putting the defense industrial base (DIB) into the direct service of the American public through a form of nationalization: federal chartering. Converting the companies to publiclycontrolled, nonprofit status would introduce a key change: it would reduce the entities impetus for aggressive lobbying and campaign contributions. Chartering the defense contractors at the federal level would in effect allow Congress to ban such activities outright, thereby controlling an industry that is now a driving force rather than a servant of foreign policy objectives. As public firms, they would certainly continue to participate in the policy for a designed to determine the nations national security and defense technology needs, but the profit-driven impetus to control the process in order to best serve corporate shareholders would be eliminated. Thus, by turning defense and security firms into full public corporations, we would replace the criteria by which their performance is judged from quarterly earnings targets to criteria that is more consistent with the national interest. If Cray and Drutmans notion seems radical, its only thanks to a fanciful story telling by those who move back and forth through the revolving, and always open, doors of the national security apparatus that link the Department of Defense, the US Congress, and the players who dot the DIB landscape. Apologists for the DIB have always distorted the importance of the defense industry to the nation's security, particularly after the demise of the Soviet Union. They really believe that their industry should get special recognition for producing the goods and services used to wage war. To sell that concept, they've made sure that the difference between contractor and uniformed government employee is completely blurred. With that, it's impossible to know who is protecting the balance sheet and who is protecting the US Constitution. In short, they've sold the public good. There's a lot of evidence to show that the DIB is not functioning in the nation's best interest. Two interesting studies stand out. An April 2005 report by the Government Accounting Office titled Defense Logistics took a hard look at the system that supplies US troops in Iraq and concluded that it needed repair. The pipeline failed to deliver basic supplies, such as MRE rations, in a timely manner. Another from the National Defense University (see below) indicated that defense isnt reaping broad benefits from information technology. That does not bode well for the push to network-centric warfare. The inability of the Pentagon to account for billions in missing funds here at home and in Iraq, ongoing criminal investigations spread across the entire national security landscape, and sensational resignations, arrests and convictions are unprecedented in US history. There is more here than just a few bad apples. It is a systemic problem made worse by the absence of leadership

at the highest levels. There is self-interest, to be sure, but that is different from leadership. The American public is rapidly discovering that those running the show in the national security machinery aren't necessarily interested in what's best for them or the USA. Fierce Competition? Show Me the Data! According to a formula that measures market concentration, the HerfindahlHirschman Index, the DIB is not a competitive industry. At a recent Center for Strategic and International Studies panel discussion on the DIB (csis.org), one participant warned that the myth of competition in the DIB might be exposed. Some federal agencies use this index [Herfindahl-Hirschman Index] to establish guidelines for when you have to start worrying about the absence of competition. Competition is supposed to be a hallmark of the acquisition system that weve had since the end of World War II, but with only two big firms--which is the case for some categories of military equipment provided by our industrial base--there is little competition in the traditional sense. In fact, this situationtwo firms that divide market sharehas a name: duopoly. Not monopoly, but duopoly and its pretty tough to brand duopoly circumstances fierce competition. The American public is led to believe that the DIB is unmatched in the broad applications of information technology. Not quite. An astonishing report by the National Defense University titled Bringing Defense into the Information Economy (David Gompert and Paul Bracken--March 2006) indicates that the Pentagon and its minions are still trying to figure out how to get into the information age. One thing is clear [that] the phenomenon of increasing capability at declining cost now common in retail, financial services, telecommunications and other sectors remains uncommon in defense. To that, DIB apologists retort that the defense industry is different. But Gompert and Bracken will not buy into the party line. Defense is different is a self-fulfilling excuse that perpetuates poor priceperformance and deprives national defense of the benefits of larger, faster, more dynamic, and more inventive IT markets.

It condones expensive adaptation and integration services. Moreover, by exaggerating the difficulty of applying IT to defense, this hypothesis legitimizes the ceding of government responsibility. It implies that the challenge of managing, adapting, and integrating IT into military capabilities is so daunting for DOD that it must be left to defense contractors Profiles in Protecting the Status Quo: The Voice of the DIB Misconceptions About the Defense Industry (National DefenseJuly 2006, ndia.org), authored by Larry Farrell, president of the National Defense Industrial Association, is representative of defense industry's world-view. Farrell, a retired USAF Lieutenant General, doesnt believe the American people understand the importance of his industry to national security. He thinks that the defense industry needs to get out there and tell its story because it will be critically important with the coming resource crunch, when the Defense Department will have to justify acquisitions and force structure costs against calls for reallocation of resources to other national needs. OK, fair enough. But what kind of story will the American public get? He divines that the first thoughts that come to the public mind when asked about the DIB are $600 toilet seats, $400 hammers (actually they were $450 a piece), war profiteering, Eisenhowers oft cited military-industrial complex thesis, scandals, and reports critical of the DIB. Naturally, Farrell blames the media for faulty reporting on the $600 toilet seat part and $450 hammers. The NDIA president takes the reader back to World War I and proclaims that the only things we took to war [WWI] that were truly American made were the Springfield rifles and our fighting spirits. Huh? It is true that US artillery pieces appeared late in the conflict and that the US had to buy aircraft and other weaponry from the British and French. The US Navy fought in WWI, at least according to the US Army and Navy historical offices. In 1916, American-made Navy destroyers, six of them, were escorting British cargo ships to protect the Brits from German submarine attacks. A US Navy Admiral, William Sims, convinced the British Admiralty to

change its ship formations to a convoy pattern. In the end, 37 US destroyers participated in the effort significantly reducing cargo losses to the German UBoats. American made ships--one produced by Newport News Shipbuilding, the USS Fanning (DD 37)and the the other by William Cramp & Sons, the USS Nicholson (DD 52), sunk a U-Boat in 1917. And, in quite a feat of industrial production, 1200 American-made M1917 Browning machine guns were used late in WWI. Its worth noting an event of those days that was putting some strain on the US Army in 1916. The US Army had its attention focused on the Mexican border. The American public was more concerned about securing the Mexican border from the likes of Pancho Villa (attack on Columbus, NM killed 25 Americans) than war in Europe. At the height of the Mexican Campaign, some 150,000 national guard troops were deployed along the US and Mexico border with another 8,000 US Army infantry led by General John Pershing. In the editorial, Farrell attempts mightily to challenge the stigma of war profiteer, but his argument about the tough allocation of resources ends in language that is precisely that of a war profiteer hunting for profits in the midst of resource scarcity. This argumentfocused as it is on the corporate interest, ignores the lifetime-care costs for the some 18,356 wounded in Afghanistan and Iraq (and, one supposes, hundreds more wounded during Special Operations and intelligence activities all over the globe). The pay raises, increases in housing allowances and medical benefits over the past few years, for those in the military that matter most, are paltry compared with the bonuses, stock options and salary increases received by DIB leaders, and their partners throughout the national security machinery. Finally, the American public doesn't hear too much about the Lockheed Martin contracts to upgrade Chinese air traffic control systems. We Never Forget Who We Work For, says Lockheed. Boeing recently deployed the Sea Based X-Band radar system that's floating off the coast of Hawaii. The platform for that technological marvel was built by Vyborg

Shipping, a Russian firm. Is it really North Korea the Missile Defense people are interested in, or is it the Russian arsenal? Will the story defense industry provides be the complete or redacted version? Full Spectrum Corruption According to Cray and Drutman, the growth of private military firms and corporate intelligence contractors in the past decade has created additional profitmaking pressures on national security policymaking processes. Interlocking relationships exist between the largest defense contractors and the Pentagon including corporate representation on key defense planning boards, and the regular passage of Pentagon and industry personnel through the proverbial revolving door; that is, to the private sector companies that they formerly oversaw. The result is a steady stream of abusive contracting practices and a potentially dangerous distortion of American national security objectives. Another result of defense contractors influence over Congress and defense policy boards is a long-term commitment to the development of high-tech weapons systems that only specific contractors are able to produce. These weapons systems arguably have little to do with preventing acts of terrorismone of the nations current greatest security concerns. The interlocking relationships referred to by Cray and Lutman have led to spectacular levels of corruption. Convictions, resignations, investigations and ethically challenged actions plague the national security machinery. More bad news from the expanding Randy Duke Cunningham investigation is likely to further rock the decrepit system. Some of the more troubling public cases include: --William H. Swanson, Chairman and CEO of Raytheon, who lifted major portions of his book Unwritten Rules from another author. He was censured and had his paycheck cut by the Raytheon Board of Directors. --Randy Duke Cunningham, former US Congressman and Chair of the US House Intelligence Subcommittee, is serving an 8.4 year sentence in federal prison for fraud and taking bribes.

--Jerry Lewis, the Chair of the US House Appropriation Committee, is under investigation by the FBI. --Porter Goss, former US Congressman and CIA Director is also the subject of an FBI investigation. --In May 2006, Reuters reported that the FBI was investigating allegations that four star USAF Generals Michael Moseley and John Jumper helped to steer a Thunderbird contract (the USAF equivalent of the US Navy's Blue Angels stunt flying team) to a friend, retired USAF General Hal Hornburg, who once commanded the Thunderbirds. Corporate Watch (corpwatch.org) is an invaluable tool for tracking the activities of the players in the DIB. The group reported on what, perhaps, is more frightening than the explosion of corruption in the US national security arena: the commercialization of the uniformed military services to the point where distinguishing between corporate operative and uniformed government employee is impossible. One of Raytheon's more secretive subsidiaries is E-Systems, whose major clients have historically been the CIA and other spy agencies like the National Security Agency and the National Reconnaissance Office. An unnamed Congressional aide told the Washington Post once that the company was 'virtually indistinguishable' from the agencies it serves. Congress will ask for a briefing from E- Systems and the (CIA) program manager shows up, the aide is quoted as saying. 'Sometimes he gives the briefing. They're interchangeable.'' What is the US Military? What is being Defended? Ultimately, the entire national security apparatus is going to have to make some decisions. Is it country before agency? Is it profit before country? Is it the US Congress saying No to campaign contributions? P.W. Singer, who monitors the DIB for the Brookings Institution, put the issue into perspective. The final dilemma raised by the extensive use of private contractors involves the future of the military itself. The armed services have long seen themselves as engaged in a unique profession, set apart from the rest of civilian society, which they are entrusted with securing. The

introduction of private military firms, and their recruiting from within the military itself, challenges that uniqueness and the military professional identity. Its monopoly on certain activities is being encroached on by the regular civilian marketplace. On Singer's latter point, the civilian and active duty US military leadership is aggressively encouraging the commercial marketplace to take on more military functions. That tactic is being pursued not just for cost savings (dubious as those might be), but also to avoid public oversight and the fallout that would come from being accountable for improprieties ranging from over-billing to the developing of torture techniques. And what about the status of the USA, its people and its infrastructure, that the national security apparatus is supposed to be defending? A day may come when there is not much worth fighting for. The FBI reports that violent crime increased in 2005 to its highest rate in 15 years. The American Society of Civil Engineers says it'll take almost $2 trillion to repair water systems, roads, schools and electrical grids. Nobel Laureate Joe Stiglitz says the total costs of the current Iraq War will cost another $2 trillion. The Catholic Conference for Human Development indicates that 37 million Americans live in poverty. The US Census Bureau reports that 45 million Americans can't afford health insurance. On top of that, add a trillion dollars to fully repair hurricane-damaged New Orleans, Louisiana, and cover the costs of neighboring state governments as they absorb hundreds of thousands of displaced Americans from New Orleans. Federal debt, and personal debt is at record levels. The home front is decaying. Public good, and the ideals it is based on, must trump private greed. If not, what's the point of this Republic? (Mr. Stanton is a Virginia-based writer specializing in political and national security matters. His last book is titled A Power But Not Super. Reach him at cioran123@yahoo.com.)

Raising Medicares Eligibility Age Would Increase Overall Health Spending and Shift Costs to Seniors, States, and Employers
By Paul N. Van de Water August 23, 2011 http://www.cbpp.org/cms/index.cfm?fa=view&id=3564
Raising Medicare's eligibility age from 65 to 67, which the new Joint Select Committee will likely consider this fall as a deficit-reduction measure, would not only fail to constrain health care costs across the economy; it would increase them. While this proposal would save the federal government money, it would do so by shifting costs to most of the 65- and 66year-olds who would lose Medicare coverage, to employers that provide health coverage for their retirees, to Medicare beneficiaries, to younger people who buy insurance through the new health insurance exchanges, and to states. The principal study of the effects of raising the Medicare eligibility age, by the Kaiser Family Foundation, estimates that its increased state and private-sector costs would be twice as large as the net federal savings. If the proposal were fully in effect in 2014, Kaiser estimates, it would generate $5.7 billion in net federal savings but $11.4 billion in higher health care costs to individuals, employers, and states. The fundamental purpose of deficit reduction is to strengthen the economy over the long term. The relentless rise in health care costs is the key driver of projected long-term deficits that policymakers must address. But reducing federal health care costs by raising state and private-sector health care costs even more makes little sense, as it only increases the burden that health care costs place on the economy as a whole. The goal should be to slow the growth of health care costs system-wide, while extending coverage to all Americans. This proposal does just the opposite on both fronts raising costs system-wide and increasing the ranks of the uninsured. The Kaiser report found that if policymakers raised the Medicare eligibility age to 67: 65- and 66-year-olds would face higher out-of-pocket health care costs, on average. Two-thirds of this group 3.3 million people would face an average of $2,200 more each year in premiums and cost-sharing charges. State Medicaid costs would rise as some of those who lost Medicare coverage (those with the lowest incomes) would obtain coverage through Medicaid instead. Scheduled Increase in Social Security's Full Retirement Age Is Not a Sound Reason to Raise Medicare Eligibility Age Some people contend that policymakers should raise Medicare's eligibility age to 67 to match the scheduled increase in Social Security's "full retirement age" to 67. This argument may seem plausible at first blush. But in reality, it reflects a misunderstanding of how Social Security works. Most Social Security beneficiaries do not begin drawing benefits at Social Security's "full retirement age." To the contrary, about half of Social Security retirement beneficiaries begin to draw benefits at age 62, and two-thirds begin to draw benefits before 65.a If a beneficiary does not claim benefits at 62, his or her monthly benefit is increased on an actuarial basis for each month that the beneficiary delays claiming, up through age 70, so that the expected lifetime value of benefits remains about the

same. Indeed, Social Security's "full retirement age" (sometimes called the "normal retirement age"), now 66 and scheduled to increase to 67, has become a misnomer. It is not the age at which most retired workers claim benefits, nor is it the age of claiming that produces the highest monthly benefit. Raising the age of eligibility for Medicare thus would not better align Medicare and Social Security. The programs are not currently aligned, since there is a lag of up to three years between when most people claim Social Security and when they become eligible for Medicare. And raising the Medicare eligibility age would push the two programs further out of alignment, rather than bringing them closer together.
a

affording, prompting some to become uninsured and others to forgo needed care. It also would raise health care costs overall. Policymakers could take some steps, outlined below, to limit but not eliminate these harmful impacts. Moreover, if Congress repealed health reform, as the House has voted to do, large numbers of 65- and 66-year-olds who lost Medicare coverage would likely wind up uninsured. Change Would Produce Net Federal Savings The Congressional Budget Office (CBO) has examined an option that would raise Medicare's eligibility age by two months every year starting with people born in 1949 (who will turn 65 in 2014) until it reaches 67 for people born in 1960 (who will turn 67 in 2027), remaining at 67 thereafter. [1] Under this option, CBO assumes that Congress would make 65and 66-year-olds with incomes below 138 percent of the poverty level eligible for Medicaid, to match the new Medicaid income limit for other adults that the Affordable Care Act establishes starting in 2014. CBO estimates that this option would reduce federal spending by $125 billion over the ten-year period from 2012 through 2021. Medicare spending would drop by $162 billion, while other federal spending primarily Medicaid and subsidies to purchase health insurance in the new health insurance exchanges would increase by a net of $38 billion. By 2035, according to CBO, this option would reduce projected Medicare spending by about 7 percent, from 5.9 percent to 5.5 percent of gross domestic product. (Note: The option that CBO examined does not include the costs of several steps that should be taken to reduce some of the proposal's adverse impacts; these steps, which are outlined below and should be regarded as essential aspects of the proposal if policymakers decide to pursue it, would reduce the federal savings.) Cost Increases for Individuals, Employers, and States Would Far Exceed Federal Savings Raising the age of eligibility for Medicare would have ramifications far beyond the federal budget. People who lost Medicare would have to seek health coverage from other sources. This would affect not only

their own personal budgets but also employers' costs, state budgets, and the premiums paid by Medicare beneficiaries and participants in the new health insurance exchanges. A recent Kaiser Family Foundation study analyzed the key effects of raising Medicare's eligibility age to 67. [2] Unlike the CBO cost estimate, which assumes gradual implementation, the Kaiser analysis illustrates the effects of the proposal when it is completely phased in by assuming that the proposal is fully implemented in 2014. Kaiser estimates that raising the eligibility age would save the federal government $5.7 billion in 2014. The savings reflect $24 billion in lower Medicare spending net of beneficiaries' premiums, largely offset by $18 billion in higher spending for Medicaid and subsidies for low-income participants in the health insurance exchanges. The estimated increase in costs to seniors, employers, states, and others, however, would total $11.4 billion twice the net savings to the federal government. (See figure.) Many Who Lost Medicare Coverage Would End Up Uninsured The Kaiser study assumes for the sake of simplicity that everyone who would lose Medicare coverage would obtain health insurance coverage elsewhere. Under this assumption, Kaiser estimates that 42 percent of 65- and 66-year-olds would obtain coverage from employer-sponsored plans (either as retirees or active workers), 38 percent would enroll in the new health insurance exchanges, and 20 percent would become covered under Medicaid. In reality, however, many of these 65- and 66-year-olds are likely to end up uninsured. Some of those eligible for premium credits in the exchanges would not enroll because they would regard the required premium contribution as too high; people with incomes between 300 and 400 percent of the poverty level (about $34,500 to $46,000 for an individual in 2014) will have to pay 9.5 percent of their income $3,300 to $4,400 for exchange coverage. Even some of those eligible for more generous premium credits or for Medicaid would likely fail to obtain coverage; participation in meanstested programs like Medicaid falls far short of that in social insurance programs

Owen Haaga and Richard W. Johnson, "Social Security Claiming and the Business Cycle," paper prepared for the annual conference of the Retirement Research Consortium, August 4, 2011. Employer costs would rise as more 65- and 66-year-olds whose employers offered coverage to their retirees received primary coverage through their employer rather than Medicare. All Medicare beneficiaries would pay higher premiums because the removal of 65- and 66-year-olds, who are typically healthier than the overall Medicare beneficiary population, would leave the Medicare beneficiary population costlier, on average, to cover. People under age 65 who buy coverage through the new health insurance exchanges would face higher premiums to help cover the cost of insuring the many 65and 66-year-olds who would enter the exchanges; the 65- and 66-year-olds would be less healthy, and more costly to cover, on average, than other people who bought coverage through the exchanges. Under the health reform law (the Affordable Care Act, or ACA), seniors no longer eligible for Medicare could obtain coverage through Medicaid or the exchanges. But raising the age of eligibility for Medicare would substantially boost out-of-pocket costs for 65- and 66-year-olds, which many of them with modest incomes could have difficulty

like Medicare, in part because of the difficulties navigating the application process. In addition, many 65- and 66-year-olds who would be ineligible for Medicaid or premium credits because their incomes exceeded $46,000 would find unsubsidized coverage in the exchange to be out of reach. According to Kaiser, half of 65- and 66-year-olds who would have to rely on the exchange would have incomes too high for premium credits. Because exchange plans could charge the oldest workers three times as much as the youngest, unsubsidized premiums could reach $10,000 to $12,000 (in 2014 terms) for 65- and 66-year-old individuals and twice that for couples. [3] Out-of-Pocket Costs Would Rise for 65and 66-Year-Olds Two-thirds of 65- and 66-year-olds 3.3 million people would incur an average of $2,200 more in out-of-pocket health spending for premiums and cost-sharing if Medicare's eligibility age were raised, according to Kaiser. The remaining onethird 1.6 million people with incomes below 300 percent of the poverty level, who would be eligible for Medicaid (if everyone up to 138 percent of poverty was covered) or larger premium subsidies would pay $2,300 less, on average. Overall, 65- and 66-year-olds would pay an average of $700 a year more, or $3.7 billion more in total in 2014. In some states, 65- and 66-year-olds could receive less adequate coverage in Medicaid and the exchanges than they would have from Medicare. While Medicaid generally offers a more comprehensive benefits package than private insurance and Medicare, with only nominal cost-sharing, state Medicaid programs can limit both the number of prescriptions covered per month and the number of physician visits covered each year. For some individuals made newly eligible for Medicaid by the health reform law a group that would encompass many 65- and 66-year-olds under this proposal states can opt to provide a much less generous benefit package than the regular Medicaid package, so long as they provide the "essential benefits" available through the exchanges. The Department of Health and Human Services has yet to specify the

essential benefits package; depending on the flexibility it gives states in this area, 65- and 66-year-olds may lose coverage of some benefits or have them covered to a lesser degree than they would under Medicare. Finally, because of Medicaid's low reimbursement rates to health care providers, some Medicaid beneficiaries are likely to have more difficulty obtaining physician services, particularly from specialists, than they would have under Medicare. Costs Would Shift to States, Employers, and People in Medicare and the Exchanges As well as increasing out-of-pocket health costs for 65- and 66-year-olds, raising Medicare's eligibility age would shift costs to states, employers, Medicare beneficiaries, and participants in the health insurance exchanges. State spending would increase by $0.7 billion in 2014, Kaiser estimates, because Medicaid would cover all health care expenses for 65- and 66-year-olds who would otherwise have been fully eligible for both Medicaid and Medicare and for whom Medicare would have been the primary payer. State spending would increase by significantly larger amounts in later years as states gradually assume a portion of the costs of 65- and 66-yearolds who would not become fully eligible for Medicaid until health reform's Medicaid expansion is in effect. The federal government will pay the entire cost of these individuals in 2014, but states must pay 10 percent of their costs by 2020. States would have to pay an even larger share of the cost of covering 65- and 66-year-olds newly eligible for Medicaid something like 40 percent or more under a proposal for a "blended" Medicaid matching rate. The proposal, floated in vague terms by the Administration this spring but never formally issued, would replace the various matching rates at which the federal government reimburses states for their Medicaid costs with a single "blended" rate for each state.[4]

A state's blended rate would be set at a level that provides the state with less federal funding overall than under current law. Because states would have to pay a much greater share of the cost of insuring individuals who are newly eligible for Medicaid as a result of the health reform law, states would have much less incentive to assure that eligible people enroll. As a result, the number of 65- and 66-year-olds who became uninsured would be higher. Employers' costs would increase by an estimated $4.5 billion in 2014 as more 65- and 66-year-old retired workers whose employers offered coverage to their retirees received primary coverage through their employer rather than Medicare. Medicare beneficiaries would pay a total of $1.8 billion in higher premiums because relatively healthy 65- and 66-year-old beneficiaries would be removed from Medicare's insurance risk pool. At present, these younger Medicare beneficiaries cost less than older beneficiaries but pay the same premiums, thereby holding down premiums for everyone else. The Kaiser study estimates that premiums for other Medicare beneficiaries would rise by about 3 percent if 65- and 66year-olds could no longer participate in the program. Adding 65- and 66-year-olds to the health insurance exchanges would raise premiums for everyone else in the exchanges by about 3 percent, or $700 million in 2014. The reason is that under the ACA, insurers may not charge the oldest enrollees more than three times as much as the youngest, but the average cost of covering the oldest enrollees is over five times that of the youngest, so insurers would raise premiums for enrollees under age 65 to cover the difference. As premiums for everyone in the exchange rose because of the influx of 65- and 66-year olds, some of the healthiest unsubsidized participants likely would drop coverage, further

pushing up premiums for everyone else. According to Kaiser's estimates, the additional costs to 65- and 66-year-olds, state governments, employers, Medicare beneficiaries, and exchange participants would total $11.4 billion twice the net savings to the federal budget. Thus, like the House Republican budget fashioned by Rep. Paul Ryan, raising the age of eligibility for Medicare would increase not reduce economy-wide health care spending. [5] Finally, by shrinking Medicare's share of the health insurance market, the proposal would reduce Medicare's market power and weaken its ability to serve as a leader in controlling health care costs. Modifications to Proposal Could Ameliorate But Not Solve Its Core Problems Most of the problems discussed above would occur under any proposal to raise Medicare's eligibility age to 67. Total health care costs would rise, some seniors would end up uninsured, and many would face unaffordable out-of-pocket costs. Should the Joint Committee nevertheless choose to recommend this proposal, it should include certain modifications that would limit but not eliminate the adverse effects on many beneficiaries and on the states: Raise the age cutoff for health reform's Medicaid expansion to 67 . Under the Affordable Care Act, the Medicaid expansion for people with incomes below 138 percent of poverty extends only to age 65. If Congress fails to raise that age limit to 67, some 65- and 66-year-olds with incomes below 100 percent of poverty who lost Medicare eligibility would be eligible for neither Medicaid nor premium credits. Both the CBO and Kaiser analyses assume that policymakers would make this essential change as part of raising the Medicare eligibility age. Require states to provide the regular comprehensive Medicaid benefits package to 65- and 66-

year-olds. This would ensure that states provide benefits that are at least as comprehensive as under Medicare to 65- and 66-year-olds with incomes below 138 percent of the poverty line. However, it would not address gaps in Medicaid coverage that exist today. Nor would it deal with the problems that some Medicaid beneficiaries have with access to health care providers. It also would not address potential differences in benefits between those available under Medicare and those that will be available through the exchanges. Hold states harmless for all of the additional cost of covering 65and 66-year-olds through Medicaid . As noted, states would see higher Medicaid costs for 65- and 66-year-olds under this proposal. States should permanently receive a 100percent federal match for this population to ensure that the federal government does not shift a large share of the costs to the states. If Congress adopts the proposal for a blended Medicaid matching rate, it should either exclude 65- and 66-year-olds from the blended rate and provide a full 100-percent match or increase the blended rate to take into account the phase-in of the higher eligibility age. [6] Make all 65-and 66-year-olds who qualify for premium credits eligible for cost-sharing subsidies as well . Under the ACA, costsharing subsidies are available only to individuals with incomes below 250 percent of the poverty line, and the subsidies for those between 200 and 250 percent of poverty are very modest. People aged 65 or 66 require more health care, on average, and hence incur greater cost-sharing expenses than younger people. Some 65and 66-year-olds especially those who are in poor health could face significantly higher cost-sharing charges in the exchange than under Medicare. Therefore, if Congress raises the Medicare eligibility age, it should

increase the cost-sharing subsidies for 65- and 66-year-olds between 200 and 250 percent of poverty and extend the subsidies to income levels somewhat above 250 percent of poverty, which is now only $27,225 for an individual living alone. End Notes: [1] Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, March 2011, pp. 45-6. [2] Tricia Neuman, Juliette Cubanski, and others, Raising the Age of Medicare Eligibility: A Fresh Look Following the Implementation of Health Reform, Kaiser Family Foundation, July 2011, http://www.kff.org/medicare/8169.cfm. [3] Kaiser Family Foundation, Health Reform Subsidy Calculator, http://healthreform.kff.org/subsidycalculat or.aspx. [4] Edwin Park and Judith Solomon, Proposal to Establish Federal Medicaid "Blended Rate" Would Shift Significant Costs to States, Center on Budget and Policy Priorities, June 24, 2011, http://www.cbpp.org/files/6-2411health.pdf. [5] Paul N. Van de Water, "Ryan Budget Would Increase Health Care Spending for Medicare Beneficiaries," Off the Charts blog, April 8, 2011, http://www.offthechartsblog.org/ryanbudget-would-increase-health-carespending-for-medicare-beneficiaries/ . [6] For an analysis of the problems with the blended rate proposal, see Park and Solomon, http://www.cbpp.org/files/6-2411health.pdf.

Conversion Then and Now Throwing swords into plowshares requires a plan.
David Casagrande September 1, 1992 http://prospect.org/cs/articles?article=conversion_then_and_now
WORKS DISCUSSED IN THIS ESSAY John A. Alic, Lewis Branscomb, Harvey Brooks, Ashton B. Carter, and Gerald L. Epstein, Beyond Spinoff: Military and Commercial Technologies in a Changing World (Harvard Business School Press, 1992). Maryellen R. Kelley and Todd A. Watkins, The Defense-Industrial Network, Carnegie-Mellon University, 1992. (Forthcoming as a report for the Office of Technology Assessment.) Ann Markusen and Joel Yudken, Dismantling the Cold War Economy (Basic Books, 1992). Ann Markusen, Peter Hall, Scott Campbell, and Sabina Deitrick, The Rise of the Gunbelt: The Military Remapping of America (Oxford University Press, 1991). Seymour Melman, Our Depleted Society (Holt, Reinhart and Winston, 1965). Seymour Melman, Pentagon Capitalism: The Political Economy of War (McGraw-Hill, 1970). Seymour Melman, The Permanent War Economy: American Capitalism in Decline (Simon and Schuster, 1974). Nine trillion dollars later the Cold War is over, and the prospect of converting industries to peacetime objectives seems at once inevitable, improbable, and replete with momentous opportunities. We have been here before, of course. America went through a very deliberate conversion process beginning in 1939, which gave way to full mobilization in 1942, and a somewhat hectic though still planned reconversion in 1945-46. What is astonishing about the current transition is the general obliviousness to how heavily the Cold War economy has used military spending as both a spur and a crutch. Nor is there any organized effort to maximize the conversion opportunity, much less to minimize the pain. In part, the absence of a coherent conversion plan reflects wide disagreement about the effect of military spending on the economy. To the extent that mainstream political and economic opinion has focused on this question at all, observers have divided into two camps. In general, those politically hostile to the Cold War found economic reasons to dislike it as well, while those who supported its strategic purposes emphasized the positive spinoffs of military technology. Planning for an economy less reliant on military outlay requires an accurate assessment of how the Cold War interacted with non-military economic life. For the critics, the military economy is mostly a parasite on civilian needs, diverting resources, creating, in Mary Kaldors phrase, a baroque arsenal, that channels scientific resources, technologies, and corporate cultures onto narrow paths dictated by the parochial needs of the Pentagon. Ann Markusen works broadly in this tradition, both in her new book with Joel Yudken, Dismantling the Cold War Economy, and in her earlier The Rise of the Gunbelt, written with three colleagues. A far more complex and qualified critique is offered in Beyond Spinoff, which holds that defense spending has been a positive stimulus to the American economy, at least some of the time, notably by leading and diffusing technological advance. The authors include four scholars from Harvards Kennedy School of Government, Lewis Branscomb, former chief scientist of IBM; Harvey Brooks, former Harvard Dean of Engineering; Ashton Carter, director of Harvards Center for Science and International Affairs, and Gerald L. Epstein, director of Harvards research project on dual-use technologies. They are joined by John Alic, a senior associate at the Office of Technology Assessment. Where the two works emphatically agree is their common conclusion that, with the Cold War over and military outlays declining, the nation needs a civilian technology policy to replace what was either partly beneficial (Alic et al.) or mostly malign (Markusen et al.), but which is, in any case, rapidly dwindling. This debate is as old and complex as the Cold War itself, and the literature on conversion is vast. Seymour Melman, perhaps the most prolific writer on the subject, is widely known for his depletion thesis first put forth during the 1960s. He has argued consistently that

defense spending fails to generate economic growth, diverts intellectual, financial, and material resources away from civilian industries, militarizes society, retards research and development, and preempts a significant share of the nations capital stock. In Our Depleted Society, he maintained that a depletion process in American industrial life followed from the diversion of capital and technology to the military in the 1960s. In Pentagon Capitalism, Melman described the subsequent formation of a Pentagonbased management over the military economy, which made the Defense Department a de facto planning ministry with enormous power over a substantial portion of Americas resources, as well as exploitive power over American society and foreign countries. Finally, in The Permanent War Economy, he outlined the workings of a new economy generated by the military system, which resembles a type of state capitalism. This new regime, he argued, contributed to a loss of individual liberty and the erosion of industrial productivity. Though the Cold War did lead to a substantial militarization of American technical and scientific capital, it had positive effects as well. As it turns out, the sapping effect of defense spending on the civilian economy is not quite as enfeebling as Melman (and others who write in this tradition such as Lloyd Dumas, John E. Ullman, Mary Kaldor, and Paul Kennedy) would frame it. Even Melman concedes that, as a matter of macroeconomics, Pentagon spending played an unintended Keynesian role. Markusen and her colleagues extend the depletionist thesis in a more subtle and appropriately complex fashion. In Dismantling the Cold War Economy, Markusen, a professor of urban planning and policy development and director of the Project on Regional and Industrial Economics at Rutgers, along with Joel Yudken, also at Rutgers, emphasize the sectoral and regional effects of Pentagon procurement. The two argue that the military needs of the Cold War fostered a new industrial sector comprised of aerospace, communications, and electronics industries, ACE for short. While this seems a positive contribution by the Pentagon, the authors contend that these key industries grew behind a wall of separation, dictated by the peculiar needs of the military and largely isolated

from civilian markets. As whole communities and industries became dependent upon the Department of Defense for their survival, a quiet industrial policy aimed narrowly at the newly emerging ACE industries evolved. Meanwhile, in the absence of a counterpart civilian industrial or technology policy, traditionally strong American industries such as steel, automobiles, and machinery were left to languish, while the comparative advantage of the United States is increasingly confined to weapons systems and their high tech spinoffs. In The Rise of the Gunbelt, Markusen and her colleagues describe how the militaryindustrial complex redrew the economic map of the United States. During the Cold War, defense spending and its oscillations became a major determinant of regional economic prosperity or decay. The West, South, and East coast reaped enormous gains from the distribution of Pentagon money, while much of the Midwest became a commercial rustbelt. Pentagon procurement policies raised income and productivity within regions but also increased the disparity between them. Two prime examples are California and Massachusetts, once the darlings of military technology, now in economic free-fall. As Michael Dukakis discovered when the Massachusetts miracle fell apart during his 1988 campaign, what the Pentagon in the early 1980s gave, defense cuts could take away. Markusen warns that the diminished role of defense spending will deprive the ACE industries of a longstanding engine, and leave them vulnerable to the caprices of market forces, or to companies supported by foreign governments. A centerpiece of Markusens argument is her analysis of postmodern, military technologies--missiles, electronic warfare and satellites--which produce few commercial spillovers because the Pentagons agenda tends to narrow the array of available technology. Not entirely true, say the collective authors of Beyond Spinoff. They have written a truly groundbreaking book that calls into question Markusens and Yudkens conclusions about the narrowing effect of military spending on the creation and diffusion of technology in the American political economy. Where the Rutgers authors emphasize a wall of separation, the Harvard group argues that most advanced

technology is not only dual use, but multiuse. Microchips are used in missile guiding systems, childrens toys, automobiles, and in the machines that manufacture the chips themselves. Furthermore, much of what we call innovation is a continuous process of incorporating small refinements over many years. As the Harvard authors point out, Companies compete on the basis of existing products, not those yet to be created. For these products, companies engage in a very different process of innovation in which they seek constant, incremental improvements. It is upon these very rapid incremental improvements that competitiveness depends, not the once-in-a-while revolutionary developments in high technologies and science. According to Alic, Branscomb, and colleagues, the Pentagon has been more nurturing of generic technology than some of its critics contend. The Defense technology establishment has been shrewd enough to appreciate that its own narrow interests in military technologies often depended on broader technical advances, of which the microprocessor is a signal example. Often pursuing broad technologies with no immediate military relevance, the Pentagon typically financed rapid movement down the learning curve until commercial markets took over. Far from being serendipitous spin-off, the Pentagons strategy of sponsoring more generic R&D was often deliberate, though accidential spin-offs sometimes occurred, too. According to the authors, Very few technologies proceeded effortlessly from defense conception to commercial application. Rather, this transfer of technology from defense to civilian applications reflected a complex Pentagon-led technology policy, quite at odds with Americas general pretensions to laissez-faire. In short, the technological relationship between defense and commerce was much richer and more complex than the spin-off model implies. Many of our most dynamic postwar industries, such as semiconductors, computers, jet aircraft, and communication satellites would have developed commercial applications much more slowly without the involvement of the Department of Defense. Indeed, defense spending was not just helpful to

these sectors, but thoroughly dominated them during their formative years through the sheer volume of Pentagon spending. Notwithstanding the Pentagons often parochial interests and its concern to bottle up some very sensitive technologies such as missile propulsion, encryption, and nuclear weaponry, technological innovation has a way of spreading. Beyond its R&D role, the Pentagon has also been an important source of technical diffusion, particularly in the application of advanced manufacturing techniques. Here again, the Cold War has substituted for a civilian policy of what some have termed industrial extension. This diffusionary role played by the Pentagon has been emphasized in a recent report, The Defense-Industrial Network, prepared for the congressional Office of Technology Assessment. The authors, Maryellen R. Kelly and Todd A. Watkins, argue that the bulk of Pentagon procurement goes to dual use firms that, unlike purely civilian American firms, are collaborative in their relationship with customers, technology vendors, subcontractors, and competing plants. This network was created by Pentagon technology policies mandating the sharing of expertise and information. The result is a highlyintegrated, often efficient network of defense industries--our only equivalent to Japans keiretsu system. In that system, large companies support enormous networks of suppliers, to which they diffuse advanced manufacturing techniques and quality controls; they also provide long-term markets, which allows small subcontractors to invest in advanced capital equipment. Although some commercially-oriented American firms, such as auto makers, do have supplier networks, they provide neither the diffusion nor the permanent partnership of the keiretsu system. According to the OTA report, however, the industries constituting the defense supply network include some of the most advanced and vital sectors of our economy with respect to capacity and efficiency. This is particularly true of the plants producing manufacturing technology and equipment, such as the incorporation of computer-aided design into advanced industrial machinery. To waste this developed capacity during the process of conversion would be devastating.

On balance, the depletionists have a strong case that the Cold War put regional gunbelt economies at the mercy of defense spending, and that a defense industrial policy developed at the expense of a civilian one. But they have overstated the association between the military-industrial complex and economic decline. The preemption of resources by the Department of Defense, though a contributory factor, was only a part of the problem. Moreover, in its day, a Pentagon-led technology policy was probably the best we could have managed. It is doubtful that the American political culture would have tolerated a civilian industrial policy during the Cold War. Perhaps it was only possible to have an industrial policy which was cloaked by urgent concerns of national security. Further, some of the skewing of resources had less to do with the size of the defense economy than with other effects of Americas hegemonic role. For example, the federal government has placed controls on the export of technologies thought vital to national security. These export controls have prevented American industries from capitalizing on defense-produced technologies in global commercial markets, while our competitors emphasized commercial sales and burdened their producers with fewer controls. The several critics agree, however, that a new era requires new technology policies. The authors of Beyond Spinoff agree that the Pentagons dominant role in high-tech R&D has had constraining, as well as facilitating, effects. The former include arcane contracting requirements, a costplus approach to procurement, security restrictions on technical data, and some relationships with producers of esoteric products that are virtually wards of the military. However, rather than proposing to scrap the Pentagon role entirely, the Harvard authors offer a variety of recommendations to take advantage of the dual-use potential of military procurement and R&D support, to lower the wall cited by Markusen. Their title, Beyond Spinoff, is intended as both a call for a more sophisticated understanding of how the Pentagon has influenced technology, as well as a plea for us to recognize that, however beneficial Pentagon patronage of technology may have been in the past, it is no longer sufficient. During the post-war years we could afford to overlook the

inadequacies of an indirect technology policy since international competition posed little economic threat. The new era is characterized by two key differences: increased global competition and a diminished presence of the Pentagon as a covert source of industrial policy. Both sets of authors call for a new national technology policy. Where the Harvard group still sees a major role for dual-use, Pentagon-led R&D, Markusen and colleagues want the whole shooting match to be civilianized. They call for a set of regional economic development policies not dependent on the Pentagon at all, as well as a comprehensive conversion policy for both industries and workers. THE OTHER CONVERSION How may our own past inform conversion planning now? As America prepared for World War II, officials carefully studied the recent history of their own era, and were determined not to repeat the mistakes of World War I. We can similarly profit by examining the conversion and reconversion experience of World War II. The debate surrounding the conversion to a wartime economy began in 1939, when the architects of war mobilization were busy designing and building what would become known around the world as the Arsenal of Democracy. The public, industrial leaders, and politicians understood that this mobilization would be reversed at wars end. The Second World War marked Americas introduction to large-scale national economic planning, and the militarys potent influence on investment in technology and innovation. At wars end, the American public and its politicians believed that the future prosperity of America depended upon a smooth transition to peace, and that reconversion was an opportunity to change the direction of the nation. Though our future is as foreboding at the end of the Cold War, no such agreement exists in the 1990s. The robust macroeconomic performance of the U.S. economy during the postWorld War II reconversion was unprecedented. The conclusion of past wars had brought economic dislocation-inflation, unemployment, or both. But in 1945-46, high employment prevailed and only a short rise in the general price level occurred, thanks to newfound purchasing

power and the increased productive capacity of American industry--both legacies of the mobilization. This happy result reflected both fortuitous circumstances and deliberate planning. War bonds provided the savings for consumers to indulge their pent-up demand for consumer goods. The GI Bill functioned both as an income-support and a retraining policy. The release of controls on the production of consumer goods, particularly consumer durables, allowed supply to meet demand without unacceptable inflation. This enormous pent-up demand for badly needed refrigerators, cars, and washing machines fueled the reconversion of production to former peacetime production schedules. Investment in war production had recapitalized American industry, and led to a profusion of new technologies. Finally, the government did have a policy, albeit a truncated one, to lubricate the transition from military to commerical production. By contrast, no such backlog of demand exists in 1992. Nor has the American industrial plant been recapitalized; on the contrary, its capital is substantially depleted. There is no counterpart to the GI Bill as a retraining or income-support policy. Indeed, the unemployment level is high, wages are low, and Americans are not in the mood to spend money. The governments reconversion role at the end of World War II was cut short by Roosevelts death and the headlong rush to decontrol that followed. But there was far more conversion planning than there is today, in part because there was a much greater acceptance of economic planning during the war. The federal government had mapped out the countrys industrial transition long before the ending of hostilities. To start with, the government negotiated the cancellation of over 300,000 contracts, which involved a potentially devastating financial commitment of $63.5 billion. The Office of Contract Settlement, legislated into existence in 1944, began its work early; by 1945, it had settled of five out of six of these contracts through advance payments and loans, an appeals boards, and extensive training programs.

Furthermore, the Surplus Property Act of 1944 authorized the sale of governmentbuilt warplants to private business. These facilities were often sold to firms at 20% of their market value. They amounted to well over one-half of the value of all manufacturing plants in existence in 1940. Despite the continuation of abnormally large profits accruing to business after the war, the Revenue Act of 1945 called for an immediate repeal of the excess profits tax. This law also repealed the capital stock tax and lowered corporate taxes, placing the business community in a strong postwar financial position. A Tax Adjustment Act, passed in July of 1945, raised exemptions and sped up refunds and credits, again ensuring the postwar financial strength of American business. Despite its broad success, the reconversion process was far from perfectly smooth at the local level. After V-J Day, the overnight cancellation of some $24 billion in war contracts triggered strikes, massive layoffs, and job-downgrading throughout industry. Unemployment reached almost two million by October 1,1945, and isolated pools of unemployed workers dotted the country. The Brewster Aeronautical Corporation, for example, was given only a moments notice that its contract for Navy fighter planes was terminated. The corporations 9,000 workers staged a stay-in strike, demanding permission from the government to begin the manufacture of household appliances. In the end, Brewsters Long Island City plant was closed, its tools equipment and parts were auctioned off, and its workers took to the streets. Still, the problems during the reconversion of 1945-46 remained largely local and contained; without the federal governments guidance, they might have exploded into a national trend. And by 1948, as the Cold War dawned, a more protracted form of military stimulus reshaped our political economy. What remained of the arsenal of democracy was slowly transformed into a semi-perpetual Cold War machine which provided enough technology and growth for our economy to rule world markets.

Today, the lack of an identifiable enemy, coupled with the rise of foreign competition, increases the urgency of a coherent conversion policy. The Cold War economy has become a way of life for many industries having no memory of competing in the market. To date, only piecemeal attempts at conversion policy have been made. The funding set aside in the Defense Authorization Act of 1992 for retraining, community adjustment, and dual-use technology is but a small lever facing a mountain of structural problems. Without a clear policy from the federal and state governments, contractors will continue to diversify, lobby for cutback restraint, lay off workers, and wait for another war. A high-profile agency outside the cabinet and directly responsible to the president may be the solution. Such agencies were successful during the World War II because they could operate freely, and were regulated mainly by public opinion. Markusen has argued for a Temporary Office of Economic Conversion that would develop conversion programs, work to get cooperation from local and state governments, and generate data on conversion, and endeavor to reconstitute the networks of diffusion. It could advise on the size and composition of future budget cuts and coordinate the departments of Labor, Commerce, and Defense. It would also have an advisory board made up of representatives from defense, labor, unions, professional science and engineering associations, and state and local development offices. It would remain small, achieving its goals through technical and financial assistance. After more than four decades of reliance on the Cold War as the organizing principle for the American economy, we need a different path. Only a concerted effort at conversion, easing the adjustment of communities, conserving the manufacturing capabilities of the defense industries, and launching a technology policy aimed at diffusion, will suffice.

The Psychology Of America's Debt Problem: Denial, Anger, Bargaining, Depression, Then Acceptance
Charles Hugh Smith, Of Two Minds | Jan. 25, 2011, 11:12 AM Today we offer a guest essay by correspondent Eric A. which applies the Kubler-Ross model to America's current state of denial and wishful thinking.
Reading Charles Hugh Smiths Cry in the Wilderness for Individual Solutions (As Public Policy Fixes Are Impossible, Focus on Individual Solutions) to our present crisis, Im struck by the Kubler-Ross model. You know the one: 1.Denial 2.Anger 3.Bargaining 4.Depression 5.Acceptance She doesnt say how long each stage takes, but in a body the size of a nation, it must take a very long time indeed. Is there anybody out there who doesnt know the financial system is broken? That home prices need to fall at least 30%--if not 50%--more? That Social Security is already in deficit? That they wont be retiring in the manner in which theyve desired? And the solutions, Oh, the solutions! 1.More borrowing 2.More lending 3.More spending 4.More lying, cheating, and stealing 5.More government orders 6.More expansion More of everything weve done that got us here. Is there anyone who doesnt know you cant solve a debt-and-spending problem with debt-and-spending? So why is it still going on? This is the wonder of Denial, of lying to ourselves, or in the American parlance, of Bullshit.Bullshit is different from lying in that it isnt technically untrue, but its effectively untrue. Second requirement is that its invariably selling something, getting you to do something for the bullshitterpower or money. Third is that everyone knows that its bullshit. They know its a lie, but theyre willing to be complicit in the lie anyway, for their own reasons. Like all Cons, Bullshit can never work without the complicit help of the socalled victim. The only reason all these things can still go on is Denial. Why? I was at a Tea Party meeting (I know, Ive already admitted it) where one of the participants asked, Are you willing to give up Social Security? What? I asked stupidly. If you cut these taxes and reduce government, itll end Social Security. I want to know who here is willing to have their own check cut.

I stared, staggered at the obviousness of this simple statement. Sir, I stuttered, Its already gone. There IS no Social Security. Youd be lucky to get checks for even two more years. My words did not compute so I let it slide, turning to other subjects. The unsustainable nature of the numbers surrounding Social Security and Medicaid have been obvious since the Baby Boom generation was done being born in 1966. The scam was fully apparent by at least the (non)re-structuring of withholdings with the Greenspan-Boskin Commission in 1983and at least by 1984, as even the increased revenues were spent, with nothing saved. It would be self-evident that it wouldnt matter in any case, since an entire nation cannot buy special pixie dust through its whole life without driving the price up not Stocks, not Bonds, not even goldand then sell it through their whole retirement without driving the price of that asset back down to zero again. That is, you cant all put $10 into a hat, and have everyone pull $20 back out. Thats what Social Security, 401k privatization, the Stock Market, Investors, all propose to do. Since 1983, there have been commissions every few years, headlines in every major newspaper, including most recently G.W. Bushs front-page quote, There Is No Trust Fund.

and default in history from Weimar to France, the close examples of Russia in 1997 and Argentina in 2001, that in 1776 Adam Smith had already declared No government ever pays off their debts, or any of the other second-level study that is easily found. Now thats denial. Denial kills. So whats my point with this? Would you rather, as with NJ Governor Christie, be told that there is no money in the known universe to pay what is owed in pensions, on bonds, in stocks, or in real goods, and thereby be able to adjust your life accordingly? Or would you rather, like GM Union workers and Enron employees, wake up one day and find that you have no pension whatsoever, but since you didnt expect it, lose both house and pension at 70 because hadnt saved on your own either? Heres some help: one way youll have a retirement, however modest, and the other way youll be eating dog food under a bridge in East L.A. Thats what lying does. Lying to others or yourself. Thats why there is a thing called morality, and thats why its wrong. But this is the bullshit we still tell ourselves, 5, 10, 30 years after the truth is obvious, and this the bullshit theyll continue to sell youwith your own stolen moneyuntil you stop buying it. Which leads me to Part Two.

jury of their peers. Theres plenty of room for that. But what does that do? They only committed the crimes we allowed them to with our own sloth and indifference, with the same immorality weve let spring up in ourselves. Were to blame. And being responsible, now were the ones who are about to take the inevitable consequences of our own immoral and irresponsible actions. There dont need to be any trials for us: our punishment is already certain. But in the midst of that Anger and Blame, history says there will be wrenching in-fighting between groups, violence, and often even insurrections and war. Whats next on historys Kubler-Ross model? Bargaining. This is what we could have done in the first place, if we hadnt been so dedicated to what Basiat called, The Fiction of the State, that august body through which everybody endeavors to live at the expense of everybody else. How could each of us live at the expense of everybody else? Who are we going to get it from? Heres a newsflash: Guess where wealth comes from? A: We make it. It doesn't come from Government. It doesn't come from money, or a magic fairy called the economy. All wealth comes from our own hard work, with each of us working to our abilities, cooperating, using the resources we have. So if we do that, how are we going to get richer or poorer than what we ourselves do? Get money right out of your head: money is nothing but recording system for reality, not reality itself. Creating money is useless. If you want a hammer, you need to make a hammer. Money does not make a hammer: a hammer factory does. Likewise, if you want a retirement, then you need to build a real condo, train a real nurse, clear a real field, hatch a real chicken for a real dinner, and dont expect anybody else to do it if you wont. We cant do anything that we ourselves dont do. We cant have anything we ourselves dont make. QED. Adding money makes

I mean, exactly what kind of warning were you looking for? Do they have to come to your house and shake you by the ankles? Moving into the new decade, we find ourselves with a $1,600,000 Million deficit --per year--and the now-common knowledge that Social Security doesnt existits just a budget item that is paid like any other: through borrowing. Borrowing on top of that $1.6 Trillion. Per Year. And you STILL think that you have something to lose? That theres the slightest chance Social Security will be paid? And Im not following the arcana of the way governments reliably o ver-promise

What comes after Denial? Thats right, Anger, and this country will rip itself apart with recriminations and blame. Blame the Left, Blame the Right; Blame the rich, Blame the poor; blame the insiders, blame the outsiders; blame the government, blame the anti-government; blame the old people who set it up, blame the young who wont pay for it. Blame, acrimony, angerand violence. In these still-rosy times perhaps you might have seen what Im talking about. Whos really to blame? Well, people who broke the lawespecially that highest law, the Constitutionneed to be tried and punished, and in keeping with that law, with real charges, real evidence and by a

no difference at all. Billions, Trillions, Quadrillions in bailouts--doesnt matter. So what is Bargaining? Its where people are so tired of the uselessness of fighting each other, ordering each other around, making each other pay for each others mistakes that we stop wasting our time on this useless activity. This is the first lesson of slavery, of tyranny, and why they fail: it's actually easier to DO the work than to force someone else to do it. We start saying to ourselves: We have X in resources, and Y in needs. How do we get substance X to person Y in a fair and efficient way? We used to use the old ways but the old ways didnt work anymore. We say, How much are you contributing to the overall good, the overall wealth, happiness, and security of everyone, and therefore what is fair to receive out of the overall wealth we have? We used to use the monetary system to allocate this, but the monetary system was kidnapped, taken out back, and shot. We can make a new onein the worst of Weimars inflation it took only a week but we will still face the choice to either have a fair one, or an unfair one. The fair one people will work with and prosper. The unfair one people will reject and will collapse into poverty for as long as it takes. 70 years in the case of the USSR, 1,500 years in the case of Feudalism. It doesn't have to end. The only way the system works, the only way wealth is created is one way: through free, voluntary cooperation. Fighting only makes us poorer every minute we indulge in it. Guess what also happens with Bargaining? We do a real accounting of our real assets, NOT according to the ginned-up, mark-to-fantasy authorized by the now-irrelevant FASB. We are weighed, measured, and we come up wanting. We discover we are as poor as we actually are. Everybody knows this, of course. Weve been lying to ourselves for decades. We no longer have manufacturing, no longer head R&D, are decades behind in energy, no longer have businesses, no longer place in education, in work, we no longer have a middle class, we don't even make our own shoes. Were a gutted shell, financially,

economically, morally, socially, intellectually, militarily. Were a 3rd world nation, on par with Brazil. Why do we lie to ourselves about this? Why do we write pretty numbers in a pretty book that pretends we have real money we can cash in and spend? Is it so bad to have to do real work to create real things in the real world honest men can be proud of themselves for? We used to. For 100 years, from 1789 to 1914 we did. And now? ...The realization that were poor, we wasted it all, and have nothing before us but hard work leads to Kubler-Ross #4: Depression. We are already IN an economic Depression, and we have been since 2001. According to no less a source than Alan Greenspan, ALL the prosperity since 2001 was nothing more than debt; homeequity withdrawals that must be repaid. I mean, a 1% growth rate? All the prosperity was debt, which must be repaid with interest, or else defaulted on in bankruptcy--a bankruptcy that will ruin BOTH the borrower AND the lender. They are a single item on the AssetLiability ledger book and must live and die as one. You cannot bail out the lender without the borrower, and vice-versa. There is no solution except either total slavery or near-total repudiation of debt. And when we go bankrupt, no one will lend to us anymore; we will have to live within our means. But waityoure saying we will a) not have a ruined economy struggling for decades to re-pay what cannot be paid? Well just be free with a new un-indebted economy overnight? And that b) that we wont be able to borrow, thus fixing the national debt, budget deficit, and insider payoffs all in one fell stroke? And we get PAID to do this? Tell me again why we shouldnt go bankrupt as fast as possible? What are lenders going to do, repossess and occupy the whole country? History reliably says if you want to survive, you should default as soon as possible. So we admit we are poor as we already are, that we have nothing but our own hard work, and that this will continue for decades. But as the initial shock wears off, we find something interesting: It was

always that way. Even in the past, we never got anything we didnt work for, all that paper, all that supposed wealth, was only us lying to ourselves. For what do you lose when you stop lying to yourself? Only our illusions. We give up something we never had anyway, and with it, our chains. And as we work we get wealthier, happier, safer as our real savings: food, shelter, ability--not moneystabilize and we discover This working for a living isnt so bad. Why were we afraid of a little truth, a little change? This leads to Kubler-Ross #5: Acceptance Thats self-explanatory. However, some of you long-wave people may recognize this process by another name: The Kondratieff Cycle: We started this trip with Winter, the down slope of the 70-year human cycle recently popularized by historians Strauss and Howe as The 4th Turning. After the decline into winterusually punctuated with war, and twice in our history with Civil Warthe seasons turn to Spring: hard work, caution, and thrift. Then Summer, the blossoming times of ease and exploration. Which leads to Autumn, with complacency, abuse, corruption, selfdeception, and overreach. And it all happens again, showing that the one thing we learn from history is that nobody learns anything from history. --Hegel Other than being an interesting walk through financial and social history, whats the point here? Easy. The old world as you knew it is gone. Poof. Zip. Nada. Gone. All those promises that were made? It doesnt matter what they were because there is not enough real substance on the entire planet to deliver on them. You were lied to, you lied to yourself, and youre going to get nothing. Nothing but what you do for yourself right now. So what are youwhat are WEgoing to do about it? Yell and march and blame and shoot each other? Let the liars, con men, and bullshitters walk away free and wealthy men from the scam that bankrupted a nation, a world? Are we going to agitate, recriminate, and get ours first?

This is the Who are you test. These are the times that try mens souls. --Paine Whats in your soul? Who are you, America? Because, as a shadow that passeth away, so this old way passes despite every attempt to stop it. You have this one chance in 70 years to make this nation into the America youd like it to be. Do we want a thin and false prosperity by war, theft, the wealth of lies? Or do we care more about justice, fair and moral behavior, and the responsibility of hard work? Next question: if you believe in hard work and Justice, are you going to make the OTHER guy work, the OTHER guy pay, or will the work start with you, and the morality, the truth start with you? Your choice America. For me, I know theres nothing. Ive paid into the entire system all my life and will get nothing out of it, ever. I never expected to. However, I want the privilegein fact, the inalienable rightto keep my own property, my own hard work, and use it or waste it as I think best. That means I have to work for it, to do something truly useful in life, and not take it from somebody else who does work, not sit in a cube farm and shuffle meaningless chits for goods that dont exist. Look around you, America. Everything needs to be done. The barns are falling down: the cities, the schools, the houses. The railways have been pulled up, the factories and mills are closed, the silos knocked over, the fields paved, the ports silted in and ruined. The children have run away; your poor and the old are abandoned. Who did this to you? You did it to yourself, and if you want a nation that functions, one that can feed and

clothe you, one that has decency and prosperity and goodness, youre going to have to go make one. That means grabbing the shovel thats closest to you and starting there. That means if you see a need, some failure, some ugliness, you are the only one whos going to change it into beauty and success. That means helping, sharing, teaching useful skills to everyone whos willing to do the least workfor we must each do all we can. That means displacing the corrupt everywhere theyre found, everywhere theyre protecting each other, methodically, legally, one by one, starting in every Town, State, and National body, in corporations, public groups, government hall, and in your living room. And they wont go easily, they wont want audits, investigations, or prosecutions for fraud, theft, and public abuses, but thats what happens when you let them in, and there is now no other way to keep your country. If not, well, maybe a just, moral, and functional country is not for you. Then maybe well get the nation we deserve, the one we created for ourselves: one filled with surveillance, snitches, orders and rules as may suit a nation of slaves and prisoners. That may seem too big a task, but its only doing our jobs as adult men and women. To work for ourselves, to organize ourselves, to regulate ourselves, and not ask anyone else to do it for us. For who would that somebody be? Napoleon? Caesar? There IS no one else. Thats what Republic means. And as theres only us, theres no reason to look to anyone else, or give our attention, our power, our money to anybody else. Government cant save us; government IS us. We can't all put $10 in a hat, pull out $20, and give government their cut to boot. Simply use your $10 on the task you find most worthy.

This is how the world is going to change: its going to be under your control and become what YOU make it. Nobody anywhere else is going to save you. Right now the much-vaunted all-powerful government can barely hold off its own collapse: it's not going to save you. Youre on your own. Now that weve got that out of the way, heres what we have planned at my house: The Maid dOrleans* Mutual Aid Society will be meeting January 27th and every 4th Thursday thereafter at Elsewhere Caf, in the near-ruins of once-majestic Victorian downtown of Albion, NY. We will be giving presentations on the things one needs to know to work in life: growing and preserving food, cooking cheaply and well, and the tools and techniques that make living well easy, possible, and most importantly, enjoyable. That is, how to do all the things you need do after you discover that no ones coming to save you. As a poor starving man once said, You must be the change you wish to see in the world. Is anyone out there ready to work? Email maiddorleans ( at ) g mail ( dot ) com *The Maid of Orleans is of course Joan of Arc, a young farm girl who, merely by standing up, forever changed the course of human history. Thank you, Eric, for sharing your essay with us

Libya's next fight: Foiling Western designs NATO's victory is certain to ignite the imagination of the neoconservative ideas of regime change
By RAMZY BAROUD Aug 30, 2011 22:12 Ramzy Baroud (www.ramzybaroud.net) is an internationally-syndicated columnist and the editor of PalestineChronicle.com. His latest book is My Father Was a Freedom Fighter: Gaza's Untold Story (Pluto Press, London), available on Amazon.com. http://arabnews.com/opinion/columns/article495848.ece
AT a press conference in Tripoli on Aug. 26, a statement read aloud by top Libyan rebel commander Abdel Hakim Belhadj was reassuring. Just a few months ago, disorganized and leaderless rebel fighters seemed to have little chance at ousting Libyan dictator Muammar Qaddafi and his unruly sons. But despite vague references to pockets of resistance throughout Tripoli, and stiffer battles elsewhere, Libya's National Transitional Council (NTC) is moving forward to extend its rule as the caretaker of Libyan affairs. In his conference, Belhadj declared full control over Tripoli, and the unification of all rebel fighter groups under the command of the military council. Listening to upbeat statements by rebel military commanders, and optimistic assessments of NTC members, one gets the impression that the future of Libya is being entirely formulated by the new Libyan leadership. Arab media, led by Al Jazeera, seemed at times to entirely neglect that there was a third and most powerful party involved in the battle between freedom-seeking Libyans and the obstinate dictator. It is NATO, whose decisive and financially costly military intervention was not charitable, nor was it a moral act. It was a politically and strategically calculated endeavor, with multifaceted objectives that simply cannot be scrutinized in one article. However, one needs to follow the intense discussion under way in Western media (mainstream or otherwise) to realize the nature of NATO's true intentions, their expectations and the bleak possibilities awaiting Libya if the new leadership doesn't quickly remove itself from this most dangerous NATO alliance. While Libyans fought against brutality, guided by a once distant hope of freedom, democracy and liberation from the grip of a clownish and delusional dictator, NATO calculations, expectedly, had nothing but a self-serving agenda in mind. In his brilliant and newly released book, Postmodern Imperialism: Geopolitics and the Great Game, Eric Walberg astutely charts NATO's role following the end of the Cold War. NATO has become the centerpiece of the (US) empire's military presence around the world, moving quickly to respond to US needs to intervene where the UN won't as in Yugoslavia, Afghanistan, Iraq and now Libya.

The massive NATO expansion in the last two decades, to include new members, to enter into new Partnerships for Peace, and to carry out various Dialogue with entities outside its immediate geographic sphere required the constant reinvention of NATO and the redefinition of its role around the globe. NATO's victory in Libya a regime change from the air as described by some is certain to ignite the imagination of the relatively dormant neoconservative ideas of regime change at any cost. Indeed, it might not be long before NATO's intervention in Libya becomes a political-military doctrine in its own right. US President Barack Obama, and other Western leaders are already offering clues regarding the nature of that doctrine. In a statement issued on Aug. 22 from Martha's Vineyard, where Obama was vacationing, the US president said: NATO has once more proven that it is the most capable alliance in the world and that its strength comes from both its firepower and the power of our democratic ideals. It's difficult to underline with any certainty how this gung-ho mentality coupled with democracy rhetoric is any different from George W. Bush's justification of his country's invasion of Afghanistan and Iraq. Many commentators in the US and other NATO countries are already treating Libya as another military conquest, similar to that of Afghanistan and Iraq, a claim that Libyans would find most objectionable. Such ideas are not forged haphazardly, however, since the language used by NATO leaders and their treatment of postQaddafi Libya seem largely consistent

with their attitude toward other invaded Muslim countries. In a written statement cited widely in the media, US Secretary of State Hillary Clinton began laying down the rules, by which the new Libya will be judged before the international community (meaning the US, NATO and their allies.) We will look to them to ensure that Libya fulfills its treaty responsibilities, that it ensures that its weapons stockpiles do not threaten its neighbors or fall into the wrong hands, and that it takes a firm stand against violent extremism. Worse, the Al-Qaeda card had already been placed into NATO's new game. The centrality of that card will be determined based on the political attitude of the new Libyan leadership. The insinuation of AlQaeda's involvement in the Libyan uprising is not new of course; it dates back to March, when top NATO commander and US Adm. James Stavridis said he had seen 'flickers' of an Al-Qaeda presence among the rebels, reported the British Telegraph (Aug. 26). Now, Algeria, a USally in the so-called war on terror is waving that very card to justify its refusal to recognize the NTC. Injecting fighting extremism as a precondition for further US and NATO support, and the possible withholding of tens of billions of dollars of Libyan funds in Western bank accounts, could prove the biggest challenge to the new Libyan leadership, one that is greater than Qaddafi's audio rants or any other. NATO understands well that a failure in its new Libya project could spoil a whole array of interests in the Arab region, and could hinder future use of Obama's blend of

firepower and democracy ideals. Mainstream intellectuals are busy drawing parallels between Libya and other NATO adventures. John F. Burns, writing in the New York Times (Aug. 22), discussed some of the seemingly eerie similarities between postQaddafi Libya and post-Saddam Iraq. In an article entitled: Parallels Between Qaddafi and Hussein Raise Anxiety for Western Leaders, Burns wrote: The list (of parallels between both experiences) sounded like a rule book built on the mistakes critics have identified as central to the American experience in Iraq. Burn's line of logic is consistent with a whole new media discourse that is building momentum by the day. Tuning back to Arabic media, however, one is confronted with almost an entirely different discourse, one that refers to NATO as friends, to whom the Libyan people are grateful and indebted. Some pan-Arab TV channels have been more instrumental than others in introducing that faulty line of logic, that could ultimately bode terrible consequences for Syria, and eventually turn the Arab Spring into an infinite winter. The Libya that inspired the world is capable of overcoming NATO's stratagems, but that depends on the level of awareness of NATO's true intentions in Libya and the desperate attempt at thwarting or hijacking Arab revolts.

Global Carbon Market's Dirty Secret

By Will Evans (Global Post) On May 21, 2011 http://centerforinvestigativereporting.org/articles/global-carbon-market039s-dirty-secret-4848
METTUR, India The hot and humid South Indian community of Mettur in Tamil Nadu is a tangle of industry and nature. Palm trees and factory chimneys tower over small farms. A giant dam cuts across a sacred river. The main manufacturer in town, Chemplast Sanmar, has been here for decades, producing refrigerant gases, industrial solvents and polyvinyl chloride for making plastics. The company also churns out something more intangible: carbon credits. Carbon credits, which serve as a cornerstone of the world's response to global warming, are a means by which a company can offset its carbon emissions. Under a United Nations program created by the Kyoto Protocol, they are awarded to companies in the developing world that reduce their greenhouse gases. They can then be sold to companies that face emissions restrictions in Europe, with each credit offsetting a metric ton of carbon dioxide. The international carbon market has proven a financial success, generating hundreds of billions of dollars in transactions. Europe's trading system forecasts an environmental benefit, too: 21 percent lower emissions in 2020 compared to 2005. But some advocacy groups accuse the system of being too friendly to polluters and not doing enough for the environment. Chemplast receives lucrative carbon credits for halting its release of an especially potent greenhouse gas. Chemplast has earned $10 million a year selling the credits to American and European companies, which in turn can use them to offset their own pollution. Sounds like good news for Chemplast, but not to many of the villagers that live in Mettur. They blame Chemplast for a slew of health problems. They say Chemplast's water and air pollution causes their breathing problems, rashes and stillbirths, and leaves their crops stunted and bitter. They were outraged to learn that the company earns millions from the global effort to fight climate change. Chemplast, which now claims a clean record, dumped wastewater into the river in Mettur for years and was previously cited for pollution violations. Chemplast's carbon credit project highlights the conflict between the lofty environmental goals of the global carbon market and the sometimes-dirty reality on the ground. Should companies that have contaminated their local communities benefit from a system designed to reduce pollution? It's a tricky question, said Michael Wara, a climate policy researcher at Stanford University. Wara points out that the U.N. system was created to help developing countries achieve sustainable development. You can certainly see that providing a lot of money to a facility that is polluting the neighborhood isn't sustainable development, he said. Others argue that the goal is reducing greenhouse gas emissions and that other pollution is beside the point. But it's hardly irrelevant to 36-year-old Suseela, who like many South Indians uses only one name. Speaking in Tamil through a translator last summer, she took issue with Chemplast's carbon credits. I don't think the company deserves it. It's the people who actually need the support, she said. They are actually not controlling their pollution because here we have evidence that we are getting affected. Like many in Mettur, Suseela attributes all of her family's respiratory and reproductive problems to Chemplast. She said gas leaks from the company have sent her to the hospital and that the well water isn't drinkable. The oil from coconuts grown by her family can't be used for traditional hair treatments; it causes baldness. Chemplast strongly denies polluting the area or causing any health problems. There are some groups who over the years have been continuously making false and motivated allegations against Chemplast, the company stated in a written response to questions. We can say with confidence that Chemplast adheres to the highest standards in managing the environment. Chemplast commissioned a health study by a local government medical college that lavished praise on the company and determined that it hadn't caused any health

effects. The company also says it provides clean drinking water to the community as a Corporate Social Responsibility initiative. And the company points to a series of expensive improvements to decrease pollution, including a sophisticated treatment plant that eliminates all of Chemplast's liquid waste. Not one drop of wastewater, the company stated, has been discharged since September 2009. Some of Chemplast's main improvements, however, were mandated years ago by the state pollution control board, according to records obtained through India's right-toinformation law by activists. Since at least 2004, the state board repeatedly ordered Chemplast to stop pumping waste into the river, according to a GlobalPost review of hundreds of documents. The company finally stopped in Fall 2009, according to board documents. Among other problems, board investigators had found hazardous chemicals like cancer-causing vinyl chloride in wastewater that Chemplast released into the river as recently as August 2009. The board also had found vinyl chloride in two village wells at levels far above U.S. drinking water standards. The pollution board cited Chemplast for a chlorine gas leak in 2004 that sent numerous villagers to the hospital, and another leak in 2007. In 2008, the board ordered Chemplast to stop even minor releases, stating, it is unfair on the part of the unit to discharge such quantity of Chlorine, as chlorine is toxic. Chemplast is responsible for unsafe levels of mercury, chloroform and vinyl chloride in the area, according to Mark Chernaik, staff scientist at Oregon-based Environmental Law Alliance Worldwide. Chernaik analyzed data from soil and water samples taken by activists in Mettur. Vinyl chloride does not occur naturally, he said. Theres no other plausible explanation for vinyl chloride in a water quality sample in Mettur other than that it has been released by Chemplast. But none of that technically matters for Chemplast's carbon credit project. Since 2007, it has earned credits for incinerating HFC-23, a byproduct from its production of refrigerant gas. HFC-23 is 11,700 times

more potent than carbon dioxide in causing global warming. Without the incentive of carbon credits, the logic goes, Chemplast would release HFC-23 into the atmosphere. Chemplast says the incinerator cost $2.2 million. Chemplast now earns twice as much from carbon credits as from selling the refrigerant gas, according to its annual report. Indeed, HFC-23 carbon credits are controversial because they could provide a financial incentive to produce more of the refrigerant gas, which itself is bad for the atmosphere. Because of the criticisms, Europe recently banned HFC-23 credits from its cap-and-trade system, starting May 2013. In 2008, Chemplast agreed to sell 3.2 million carbon credits over five years to a commodities trading company now owned by J.P. Morgan. Those credits were then re-sold to Western manufacturers like Boston-based Cabot Corporation. Cabot is one of the world's biggest producers of the carbon powder that makes printer toner black and strengthens car tires. Goodyear is its top client. Cabot's European factories, which are bound to carbon caps, have used hundreds of thousands of Chemplast's carbon credits. Chemplast and Cabot operate a joint venture in Mettur, but a Cabot spokesperson said Cabot didn't specifically intend to buy Chemplast credits. It appears Cabot didn't need the credits to comply with emission caps instead, the company made a profit by selling its own emission allowances at one price and buying the carbon credits for less. In the international carbon market, everyone was making money. But what about the villagers of Mettur? Back in 2005, Chemplast had to consult local stakeholders as part of the U.N. process to certify its carbon credit project. The company convened a community meeting and reported that the invitees unanimously supported the project and expressed full confidence and faith in the Companys assurances. The international auditor reviewing the project didn't note any community

opposition either. Yet earlier that year, a self-styled people's tribunal had conducted public hearings and issued a report accusing Chemplast of irreparable damage to humans and the environment. The local farmers' group that has agitated against Chemplast for years took this reporter on a tour of alleged pollution victims last summer. S. Mannadhan, a farmer wearing a white turban, showed off the smelly water from his well and said his corn and bananas are no longer edible. Bhagyalakshmi, a sariclad woman whose husband works for Chemplast, says the company's nearby coal yard blows so much dust they all have breathing problems. A. Marimuthu, a village councilman wearing a traditional white sheet around his waist, displayed a rash on his arms. He and another village leader described a meeting last year where they said Chemplast officials offered bribes to silence their criticism. Chemplast shoots down these allegations as false and malicious. The company accused some critics of attempting extortion, offering silence for lucrative contracts. It says groundwater analyses by and large do not show any issues -there are one or two supposedly contaminated wells but the source of pollution is unclear. The company said it controls its coal dust and that hundreds of families live next to Chemplast without any health problems. As for the gas leaks, Chemplast said a minor 2004 leak was blown out of proportion and that disgruntled elements in Mettur continue to make similar unfounded allegations at regular intervals. This would all be a local dispute if it weren't for the carbon credits connecting Chemplast to the global emissions trade. On the market, carbon credits are neatly packaged interchangeable units. But as the case of Chemplast shows, they come from real, sometimes complicated, places. This story was supported in part by the Dick Goldensohn Fund for International Investigative Reporting at the Center for Investigative Reporting.

Killing Clean Energy Laws Tar Sands Lobby Does Washington

By Geoff Dembicki, Special to CorpWatch May 5th, 2011 http://www.corpwatch.org/article.php?id=15645
Tom Corcoran watched incredulously late last February as political turmoil in Libya shot global oil prices skyward. The situation was intolerable, he said at the time, sipping coffee at a member's only club for Republican legislators and their supporters in Washington, DC. Corcoran, a former Congressman from Illinois turned oil industry lobbyist, refused to accept that the lifeblood of the U.S. could be so vulnerable - that panicked international investors, speculating on civil war in North Africa, were driving up the cost of crude oil. I think that's a dangerous situation and one which the United States should address, the 71-year-old Corcoran explained in a slow, gentlemanly drawl. The multinational oil companies he helps represent on Capitol Hill include descendants of the most powerful corporations in global history. Over the past few decades they, too, have been forced to reckon with events far beyond their control including depleting oil fields and state-led power grabs that now push them ever deeper into the frigid petroleum reserves of the Canadian province of Alberta. Oil sands - or tar sands - from this western province have enabled Canada to become the largest supplier of crude oil to the U.S., shipping roughly one million more barrels per day than Saudi Arabia. Yet even as concern mounts that fossil fuels are damaging the climate, this rapidly growing industry is producing some of the most emissions-heavy gasoline, diesel, and jet fuel on the planet. Significantly higher than ... conventional fuels, is how a recent European Unioncommissioned study explained oil sands' carbon footprint. Corcoran, head of a lobbying and legal services firm, insists that the U.S. economy simply couldn't function without rapid development of oil sands and other high-carbon fuel sources. But some policymakers, worried about a rapidly warming planet, find that an alarming proposition. The development and expanded use of these fuels could significantly exacerbate global warming, with highly dangerous effects, Henry Waxman, a Democratic congressman from California, wrote in 2008. He and others in Congress have supported major clean energy laws that target Alberta's oil sands industry. Corcoran's job is to kill those laws, and he is financed by all the major oil and pipeline companies, he says. They are willing to spend tens of millions of dollars each year lobbying Capitol Hill alongside their high-ranking allies in the Canadian and Alberta governments. With many clean energy laws now blocked, deleted, or delayed, Corcoran radiates a cool confidence. We've been successful, he says, leaning far back in his chair at one of the most exclusive Republican social clubs in the U.S. Thick as Thieves Barely a decade ago, most industry experts considered Alberta's oil sands a promising but marginal energy source. It was too costly to be developed on any major scale, and profits were too low to draw many of the big oil companies. Now, rapidly rising oil prices are causing the industry to explode virtually overnight, hurling Alberta into the upper ranks of global petroleum suppliers. The crude oil produced from the sands is not the smooth-flowing kind that bursts from the ground with the hit of a pick-axe. It comes instead in the form of bitumen, a sludgy mixture of clay, sand, water and oil. Some producers bulldoze miles and miles of boreal forest, mining the substance with industrial-scale shovels and dump-trucks the size of small buildings. Others melt it out of place by pumping high-pressure steam and toxic chemicals deep underground. Even then the hockey puck-like gunk won't flow through pipelines until it's been heated to extremely high temperatures or diluted with natural gas condensate, a volatile hydrocarbon that contains cancercausing benzene. There is high heat, too, in the debate about the environmental impact of tar sands extraction. The total picture, University of Alberta water ecologist David Schindler wrote in 2008, reveals that we have the Guinness World Record for environmental disaster on our hands. Greenpeace Canada's website agrees: Rapid development of the tar sands could tip the scales toward dangerous and uncontrollable climate change. While oil sands supporters admit that bitumen requires more energy to extract than higher quality crude oil from places like Texas or Saudi Arabia, they disagree about the numbers. The Alberta government claims that a recent European Union study concluding that greenhouse gas emissions are a full 23 percent more per barrel used out-of-date figures. Alberta puts bitumen's carbon footprint at only 5 to 15 percent higher than conventional oil. Frankly, we just feel on the surface it's just unfair, Alberta energy minister Ron Liepert told Canadian media. For the U.S., with its notoriously fossil fuel-dependent economy, this brand new source of energy has created a complex dilemma. Environmentalists fear that cranking open the taps could wash away any chance of meaningful action against climate change. Some politicians, however, counter by pointing to the political and military risk of relying on oil from the Middle East and other prickly or unstable areas. They see salvation in privileged access to the planet's second biggest oil reserves -- in friendly Canada.

Deep Inside Republican Territory With a large painted portrait of George W. Bush hanging in the lobby and two woodcarved elephants flanking the entrance, there was no mistaking Washington's Capitol Hill Club for anything other than a Republican stronghold. (The Republican party mascot is an elephant) Fresh from last December's midterm election gains, two key architects of the Tea Party movement -- Koch Industries' David Koch and Americans for Prosperity's Tim Phillips -- invited new Republican legislators to a welcome party here. A few months later, on a crisp, bright morning late last February, Corcoran and I took the elevator downstairs to the Auchincloss Grill: Imagine a cross between a sports bar, Royal Canadian Legion hall, and a rich friend's dad's basement. During a lengthy interview over coffee at this members-only enclave, Corcoran outlined victories and defeats spanning years of lobbying campaigns, explaining in precise detail his role as catalyst in ensuring that the U.S. stays reliant on Albertan oil. The oil industry lobbyist, who heads a fossil fuel advocacy firm funded by such energy heavyweights as Exxon Mobil and ConocoPhillips, is a little-known but key player in this debate. Born in 1939 in the rural community of Ottawa, Illinois, he rode a yellow school bus each day past farmers' fields. As he tells it, there's little distinction between U.S. national security, personal freedom, and an abundance of fossil fuels. Oil helped people do what they want. Corcoran hasn't served in politics since 1984, the year he resigned after four terms as Illinois congressman, but his Republican allegiances still run deep. It was under President Bush after all, that the U.S. enacted the 2005 Energy Policy Act, a piece of legislation designed to reduce the growing dependence of the United States on politically and economically unstable sources of foreign oil imports. With the nation's conventional oil fields running closer to dry each year, the act contained a directive encouraging the fullbore development of oil sands, oil shale, and heavy oil reserves. These unconventional resources lie in vast quantities across North America, yet

are largely untouched owing to cost, complexity, and environmental impact. For Corcoran, a true believer in the legislation, here was the answer to U.S. energy needs, a clear alternative to dangerous Middle Eastern oil. Frustrated by years of political inaction, Corcoran joined forces with the American Petroleum Institute - the nation's most powerful fossil fuel lobby group - and other oil industry players in 2007 to form the Center for Unconventional Fuels, renamed more blandly the next year as the Center for North American Energy Security (CNAES). Three years later, the group's website has yet to be activated. Nothing against the internet, it just didn't fit our needs, Corcoran explained. We're not doing public outreach, we leave that to others. Instead CNAES concentrates on its mandate: keeping the goals of the Energy Policy Act alive, said Corcoran. And its goal, according to a CNAES document under Corcoran's email address, was to create a single organization to coalesce unconventional fuels advocates in all of the affected private and governmental sectors around a unified program to advance the development and use of Heavy Oil, Tar Sands, Shale Oil, Coal-toLiquids and Enhanced Oil Recovery. It ought to be a matter of national policy to develop these fuel sources, he said. By early 2008, the center would declare war on the first clean energy law standing in its way. But before that happened, Corcoran would make an important realization: fossil fuel deliverance for the U.S. lay just 620 miles north of the Montana border. Battle of the Bitumen Alberta's oil sands are an experiment in motion: the largest unconventional oil development in human history. The industry pumps roughly one million barrels of crude a day through trans-border pipelines to the U.S., an amount which could more than quadruple in the next 20 years. All that energy security comes at a cost. The strip-mined panoramas and duckkilling toxic lakes north of Fort McMurray

were compared by one United Nations official to the grim devastation of Tolkien's Mordor. Despite some advances in energy efficiency, the industry is still Canada's fastest growing source of greenhouse gas emissions. By 2020, estimated the Calgary-based Pembina Institute, it could be emitting double the carbon now released by New York City. But if emissions are large, so too are investment opportunities. An industry report, released last January by Peters & Co., projected roughly $180 billion in new investments during that same period. That kind of rapid expansion can be explained by several factors: depleting conventional oil fields, insatiable U.S. demand, relatively low royalty rates. Yet a less obvious geopolitical revolution is also driving investment. For much of the 20th century, the global oil market was dominated by an informal oligopoly of energy firms known as the Seven Sisters. Until the 1970s, these private corporations - with headquarters in the U.S. and Europe - controlled 85 percent of global oil reserves. They grew to be some of the wealthiest and most powerful companies ever created, all but dictating their terms to foreign governments. Until the early 1960s, when, led by Venezuela and Iran, oil producing countries began seizing control of their energy resources - and kicking out the Western corporations. Current Sisters-descendants Exxon Mobil, Shell, BP and Chevron - alongside fellow heavyweights ConocoPhillips and Total now have unrestricted access to only 7 percent of the world's remaining oil fields. Though still among the richest companies on the planet, they've grappled for years with stagnating shareholder returns, an indication their growth has plateaued. These companies are now shovelling billions of dollars into Alberta's oil sands, one of the few major deposits where they are still welcome. [They] just don't have all that many options, said Alexandros Petersen, research director for the London-based Henry Jackson Society, a global studies think tank. "And so if you get boxed out of places like Venezuela -- or Angola by the Chinese -- you go after whatever you can get. The oil sands are one of those

'whatever-you-can-get' places. So when Democratic members of Congress, worried about the growing reliance of the U.S. on climate-damaging fuel sources, began targeting the industry in December 2007, they met a fierce opposition. One of the first attacks on the oil sands came from Waxman. Working in conjunction with the Natural Resources Defense Council - a major U.S. environmental group - the Democrat inserted a contentious clean energy provision into the 2007 Energy Security and Independence Act. Known simply as Section 526, it forbade the U.S. government from buying fuel with high carbon footprints. This provision ensures that federal agencies are not spending taxpayer dollars on new fuel sources that will exacerbate global warming, Waxman wrote in May 2008, making clear mention of the oil sands. Since Canada has an enormous stake in the success of Alberta's energy resources, its U.S. embassy sounded a warning call in early 2008, flagging Section 526 to the American Petroleum Institute, Exxon Mobil, BP, Chevron and others, according to internal government emails. As yours is a company involved in the production of oil sands in Canada, thenenergy counselor Paul Connors wrote to an Exxon Mobil lobbyist, I wanted to bring this issue to your attention. It wasn't long before Corcoran, too, learned of the threat to unhindered oil sands exploitation. Now, the lobby group he'd help found the year before - the Center for North American Energy Security - had a clear mandate: Kill Section 526. With the support of members such as Exxon Mobil - spender of $29 million in 2008 to lobby Capitol Hill - Corcoran's group soon launched an intensive lobbying campaign, working closely alongside the American Petroleum Institute and Canadian embassy. The former Republican congress member identified key policymakers, committees and congressional staffers potentially unsympathetic to Section 526. Then we talked to those people to a) alert them it exists; b) explain why it was a

mistake; c) try to get support to repeal it, Corcoran tells me. That was the process we embarked on in 2008. He began to see results. That spring, two Republican congress members from Texas proposed a repeal of the law. [Section 526] has powerful and harmful implications and needs to be repealed immediately, wrote Jeb Hensarling and Mike Conaway. Identical legislation appeared the next month in the Senate, courtesy of Republican James Inhofe. Despite non-stop attacks ever since including a current repeal attempt introduced by Republican congressman Devin Nunes - Section 526 still stands. (Though an ongoing lawsuit launched by the Sierra Club and the Southern Alliance for Clean Energy may yet decide its fate). Corcoran had better luck defeating another clean energy law proposed in 2009. For years, Washington policymakers had attempted to enact something called a low carbon fuel standard. First adopted by California in 2007, the law discourages suppliers from selling fuel with high carbon footprints, a clear incentive, proponents hope, for broad clean energy investments. If ever enacted on a national level, it could be equivalent to taking 30 million cars off the road by 2020, according to research cited by thenSenator Barack Obama in 2007. And it might also wipe out the market for Alberta's high-carbon road fuels, dealing the industry a huge financial blow. In 2009, as House legislators considered including a low-carbon standard in a major climate change package, the WaxmanMarkey bill, Corcoran's lobby group issued briefing notes targeting legislators from oil-rich states such as Texas and Oklahoma. In them, the Center for North American Energy Security warned that the standard would be a severe self-inflicted wound to our national security and economic recovery. CNAES also talked to local constituents and got them to add to the pressure. Soon enough, proponents of the WaxmanMarkey bill realized their legislation wouldn't have enough votes to make it past the committee stage. So they deleted the low-carbon fuel standard, Corcoran

explained, and then the legislation moved out of committee. The Senate, too, dropped a proposed low-carbon fuel standard after comparable pressure. All the while, Corcoran noted, the Canadian and Alberta governments were following the process closely. They were aware of what we were doing and supportive of it, he said, adding: I'm not suggesting it was only the Center for North American Energy Security [that killed both fuel standards]. But I would say that we were a big part of it. Pipeline Standoff Rages For all its victories, the oil sands industry still faces what may be its biggest hurdle yet. Anticipating the massive growth rates projected by oil sands producers, Calgarybased TransCanada is pressuring the U.S. State Department to approve Keystone XL, a proposed pipeline stretching 1,980 miles south to Gulf Coast refineries. Environmentalists and sympathetic members of congress - including Waxman - tout a lengthy list of concerns. Some fear a pipeline rupture could contaminate the Ogalalla aquifer, source of drinking water for millions in the midwestern states of the U.S. At an ongoing 45-day public comment period ending in early June, expect green observers to argue against increasing U.S. reliance on high-carbon Alberta crude. Expect also to see Corcoran's group downplaying those concerns, framing the pipeline as a vital piece of U.S. energy security. Whether or not Keystone is approved, there are already enough trans-border pipelines to satisfy growing U.S. demand for oil sands until at least 2020, according to a recent Department of Energy report. But the not-so-hidden subtext is that Keystone XL represents a proxy war over the oil sands industry itself. If the U.S. government says 'yes' to Keystone XL, they're basically saying 'sure' to continued industry expansions, said Danielle Droistch, U.S. representative for the Calgary-based Pembina Institute, a Canadian environmental group. Whatever Secretary of State Hillary Clinton decides by the end of 2011 --

when her decision is due -- the oil sands industry still has plenty to celebrate. The collapse of the U.S. Senate's climate change legislation last summer lessened pressure on the Canadian government to impose its own greenhouse gas restrictions. Then the US midterm elections in December installed a wave of Republican legislators arguably more sympathetic to Albertan oil. Current instability in the Middle East and North Africa (added to BP's Deepwater drilling disaster and the Fukushima nuclear debacle) have only made the extraction of Canadian energy more attractive.

But Corcoran's work is far from done. His group is currently suing the California government to repeal its low carbon fuel standard. And the Center for North American Energy Security continues to intervene in the U.S. northeast, where 11 states are considering similar legislation. Unlike the civil war rocking Libya thousands of miles away, these are battles Corcoran can hope to influence, and even win. Of course, success often depends on how you define it. It's wrong to think of this in war metaphors as though you have different sides, said Susan Casey-Lefkowitz,

international director for the Natural Resources Defense Council. If we can't fight climate change, we all lose. Corcoran loses too. Geoff Dembicki reports extensively on the growing political influence of Alberta's oil sands industry and other climate changerelated issues for TheTyee.ca, an awardwinning online newspaper based in Vancouver, Canada.

There Is No Business Like Show Business and No History Like the History of It
By Bruce Chadwick Bruce Chadwick lectures on history and film at Rutgers University in New Jersey. He also teaches writing at New Jersey City University. He holds his PhD from Rutgers and was a former editor for the New York Daily News. http://hnn.us/articles/8-29-11/no-business-like-show-business.html
There is an immortal song in the play Annie Get Your Gun called Theres No Business Like Show Business. This year, the theater world seems intent on proving that with a long stream of plays and musicals about iconic figures in the history of entertainment. Whether you like to dance to the music of 60s rock group the Shirelles, love the classic operatic singing of Maria Callas, want racial history, sexual history or any kind of history of entertainment and its stars, it is all on stage somewhere in America. In early July, Master Class, the story of 1970s European opera superstar Maria Callas, probably better known for her romantic affair with the wealthy Aristotle Onassis, opened to strong reviews at the Samuel Freidman Theater on Broadway. Later, the Theater at St. Clements in New York premiered a new musical about 1920s blues singing great Bessie Smith. The Second Stage Theater had By the Way, Vera Stark, about the racial history of movies in the 1930s. The 2010 Tony winner, Memphis, getting ready for a national tour, is about the history of country music and race in Tennessee in the early 1950s. The New Jersey Repertory Theater, in Long Branch, N.J. debuted a play about 1930s and 40s actress Marlene Dietrich last winter and staged one about actress Judy Holliday this summer. Lucky Guy, about the history of music in Nashville, opened last month. Baby Its You is the 1960s story of the Shirelles singing group. The long running hit musical Jersey Boys focuses on the life of 60s singing icon Frankie Valli and the Four Seasons. The Shaggs, which also just opened, is the 1970s story of a dads efforts to turn his talentless daughters into music superstars. Million Dollar Quartet, about the early days of rock and roll, was very successful on Broadway. Rain was a Broadway tribute to the Beatles. The Goodspeed Opera House, in East Haddam, Connecticut, just opened a revival of the classic Showboat, the story of music and race on a Mississippi showboat in the middle of the nineteenth century that debuted in the 1920s. The off-Broadway Vineyard Theater had Picked about contemporary Hollywood. Reefer Madness, about the 1936 cult marijuana movie, is at the Roy Arias Theater in Times Square, Talking Pictures, about the transfer from silent to sound movies, is at St. Jeans Playhouse. One of the Fringe Festival plays in New York this month was about John Lennon, another was about Bette Davis and another about TVs Kojak star Telly Savalas (Who loves ya, baby?). All of that is not enough for you on the history of show business? It was just announced that a new musical on the history of Motown, focused on the life of its founder, Berry Gordy, is in the works. Still not enough? In January, End of the Rainbow, the story of the last years of Judy Garlands life, opens at the Guthrie Theater in Minneapolis, and then moves to Broadway in April. There are trends in the theater, as there are in films and on television. Why, all of a sudden, are there so many cop shows on television? Boxing pictures in the movies? We can ask, too, why so many plays, nearly a dozen, about the history of show business? Escapism. Americans have always taken refuge in legitimate theaters and movie houses in economic hard times. We did so during the Great Depression and are doing so once again in our current economic downturn. We leave our tough lives for a few hours and revel in the fantasy world of Hollywood, its films and its stars on stage. We must go back to the real world, but

that short trip gave us the lift we needed. The show biz history plays not only take us to another world, but back in time to another world, Hollywood in the past, for a double escape. Fascination with the lives of the stars. Pick any show biz star: Mary Pickford, Clark Gable, Humphrey Bogart, Lauren Bacall, Marilyn Monroe, Madonna, Elvis Presley. Millions loved them and still do. Americans have always been entranced with the lives of stars of the silver screen, stage and, later, television. We need to know everything about them, good and bad. Hollywood history plays take us behind the scenes to do just that. One producer chuckled. Nothing sells tickets like dead celebrities, she said. Music nostalgia. Never in history has any one generation, the baby boomers, retained such a yearning for the music of their youth. The baby boomer generation today is the single largest generation in U.S. history. It scoffs at Lady Gaga and Kanye West and reminisces fondly about the Four Seasons, Elvis, Jerry Lee Lewis, Johnny Cash, the Shirelles, the Supremes, the Beatles and Rolling Stones. Never was a combination of Hollywood history musicals and the boomers made so perfectly for each other.

The never ending screening of old movies on television. I have 76 movie channels on my television set. It seems like there is an episode of I Love Lucy and an Elvis movie playing on one of them every minute of the day. The movies are a reminder to us all of the history of Hollywood and today plays are serving that love of the past in show business. There are many producers who shake their heads from left to right in disagreement. They see show business history plays as just a fluke and nothing more. Evans Haile is one. He is the artistic director of the Cape Playhouse, on Cape Cod, Massachusetts, one of the countrys historic old theaters. Haile is not terribly interested in show business history plays. There are a lot of one-person plays about celebrities, but they dont work. Most full plays dont work, either. To be successful, an entertainment history show has to be really well-written. Many show biz history plays have failed. You cant succeed with just a lot of good music. You need a good story. He thinks, too, that the escapist value of show biz plays is exaggerated today. Escapism entertainment worked in the Depression because there was no television. Today people can stay home

and watch television for free. They dont have to go out to a theater or movie house. Today things are very different than in the 1930s, so you cant say show biz history is successful because of a desire for escapism. Even so, Haile opened his season with An Evening with Lucille Ball, a tribute to the show biz legend put together by her daughter, Luci Arnaz. It did well, and I enjoyed it, but we only did it because Luci Arnaz has performed here often. If she was not the driving force behind it, we would not have staged it, he said. Still, show biz history plays continue to debut. Next week in New York, it is Follies, the musical about the women of an old Ziegfeld Follies type vaudeville show. This winter is the premier of February House, a play about Gypsy Rose Lee. Its seems that, for now, on stage, there really is no business like show business.

Can taxpayers count on a "peace dividend"?

http://www.thefreelibrary.com/Can+taxpayers+count+on+a+%22peace+dividend%22%3F-a015594492
If the cold war is over, why aren't factories, military bases, and laboratories converting to civilian work? What's going on is a permanent war economy in which military activity is large and continuous, and the military output is treated as an ordinary economic product. How did a national consensus that favored defense, as during World War II, get transformed into a permanent war economy? A good place to start is with NSC-68, "The Report by the Secretaries of State and Defense on United States Objectives and Programs for National Security," April 7, 1950. In its economic conclusions, this policy paper - often attributed to Paul Nitze - concluded that ". . . one of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living. After allowing for price changes, personal consumption expenditures rose by about one-fifth between 1939 and 1949, even though the economy had in the meantime increased the amount of resources going into government use by $60-65,000,000,000 (in 1939 prices)." This memorandum showed that, during World War II, the U.S. had guns and butter. It also drew the unwarranted inference that the American five-year experience with World War II could be a generalized relationship - that the economy could deliver both guns and butter continuously. Thereafter, an ongoing process of militarytechnical expansion was set in motion. Entire new industries were established to manufacture large aircraft, nuclearpowered submarines, short- and intercontinental-range missiles, electronic laboratories and factories to multiply the lethality of available and projected weapons, and, finally, a network of laboratories and connections that reaches into every major university. Dwight D. Eisenhower implemented the major recommendations of NSC-68 and so participated in the enlargement of military budgets and the construction of a vast military-industrial network. By the completion of his two terms as president, however, he was wary of the declared goals of his successor, John F. Kennedy, to eliminate a "missile gap" vis a vis the Soviets that Eisenhower knew to be nonexistent. At the same time, he was indignant at the implications of Kennedy's election campaign that Eisenhower, the old general, was not looking after the U.S.'s military security properly. Eisenhower intimates have indicated that he was wary of the unlimited ambitions of his "brother officers" and used the plea of fiscal responsibility to hold their ambitions in check. All that is crucial background for understanding his famous Farewell Address, delivered from the White House on the evening of Feb. 6, 1961, just before the Kennedy inauguration. It was, in effect, a warning to the nation about the policies of his successor. In this address, Eisenhower noted the following: ". . . We annually spend on military security more than the net income of all United States corporations. "This conjunction of an immense military Establishment and a large arms industry is new in the American experience. The total influence - economic, political, even spiritual - is felt in every city, every statehouse, every office of the Federal Government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved; so is the very structure of our society. "In the councils of govemment we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. "We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. . . . ". . . [We] must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow. Kennedy did exactly what Eisenhower wamed against, greatly expanding the

military and its allied industrial and research establishment. With Robert McNamara in charge, die Department of Defense was reorganized after the fashion of a multi-division industrial corporation. A central administrative office, of unprecedented size, was established in the Pentagon to govern the affairs of tens of thousands of contracting industrial establishments, as well as hundreds of military bases and laboratories at home and abroad. The full effect of the rapid military buildup became the heritage of Pres. Lyndon Johnson and his successors. Ten days after Lyndon Johnson was swom in, I visited the White House in the company of James Farmer, the president of the Congress of Racial Equality. Johnson wanted a memorandum defining what should be done by way of major economic development and compensatory spending for black Americans and a statement of where the money could come from. I delivered such a memorandum a few days later. It now is known that the Great Society program, launched by Johnson with much fanfare, accounted for a mere eight percent of the government's combined expenditures for its war in Vietnam and its war" on poverty. Johnson and his associates shared the core political myth of American society: * The U.S. has indefinitely large resources and therefore can afford both guns and butter. * Money is wealth. * The money value of what is bought and sold is the proper measure of growth, independently of the absence of use-values for consumption or further production. * Concentration of income among the very wealthy is a spur to productive investment and therefore to increased employment and production of new wealth. This conventional wisdom failed to take into account one of the points in Eisenhower's Farewell Address - that the military budget had become the largest capital fund in the American economy, each year exceeding the net profits of all U.S. corporations. However, this capital fund was used to create money-valued goods and services (hence "growth") that lacked usevalue for consumption or further production. The core system of bipartisan conventional economic wisdom began to collapse like a house of cards as economic, and particularly industrial, depletion showed up with increasing intensity during the successive regimes of Presidents

Richard Nixon, Gerald Ford, Jimmy Carter, Ronald Reagan, George Bush, and now Bill Clinton. The consequences of the assumptions made by Kennedy's "best and brightest," the architects of Johnson's Great Society, and the succession of Republican and Democratic strategists haunt and severely restrict Clinton's political-economic capabilities. Robbing the civilian economy By 1990, the value of the weapons, allied machinery, equipment, and buildings held by the Department of Defense was 83% as great as the money value of all the plants and equipment of America's manufacturing industry. From 1947 to 1990, the combined U.S. military budgets amounted to 8.7 trillion dollars. By contrast, the combined value of plants and equipment of U.S. industry plus that of the civilian infrastructure amounted to 7.3 trillion dollars. This reflects a dense, longenduring concentration of capital-type resources on products and services without either consumption or production values. Hence, it is no mystery why cities, streets, highways, schools, and dwellings crumble; why water supplies become poisoned; and why entire civilian industries decay and disappear. Many economists have maintained that lumping together all money-valued activity (without regard to use-value) creates the illusion of rendering the effects of military economy invisible. Notwithstanding the dominance of the government's military arm - which transformed the U.S. economy into a military form of state capitalism - the proper basis for understanding the economy, and for prescribing macroeconomic policy, is the theory of a perfectly competitive market. The President functions almost as a chief executive officer presiding over a central administrative office in the Pentagon, which runs the affairs of 32,000 prime contracting establishments and employs 2,700,000 people in military industry. At the same time, owing to the guns-andbutter and allied assumptions that had prevailed so long, the Federal government is in severe financial straits. Finally, the sheer scale of the Federal managerial establishment has not been understood properly. Thus, in a report to Pres. Bush in

1989, Secretary of Defense Richard Cheney noted that the combined military and civilian staffs concerned with acquisition for the Department of Defense added up to 583,000 people. That is a centralized control organization that makes the former Soviet Gosplan program look like a mom-and-pop store. The long duration of America's war economy led to the creation of a militaryspecialized corps of managers, engineers, and technicians. The managers are expert at negotiating with the Pentagon and operating industrial, base, and laboratory facilities in keeping with the cost-plus tradition. Engineers with long experience at serving the military's requirements typically have a trained incapacity for designing and producing to civilian requirements. Thus, the military often have required and accepted product complexity and limited reliability that would be unacceptable in civilian products that must meet tests of salability, durability, and economy. While people can be retrained to new occupational skills, that is not a welcomed experience, especially among men and women who have spent all or most of their working lives in the service of the Pentagon. Indeed, the prospect of having to reconstruct a part of their identity is resisted - even if unaccompanied by any draconian economic pressures. The main resistance, even to conversion planninglocal or national - comes from the top managers of the military economy and the main contractor firms. Top managers of major enterprises, regardless of whether the head office is in a private corporation or a government department, strive to maintain and enlarge their decision-making power. Accordingly, the top managers of America's permanent military economy have been on a collision course with proposals for conversion planning and for a major "peace dividend" appropriate for the end of the Cold War. In their zeal to justify the scale of their organizations and proposed military budgets, U.S. military chiefs point to the variety of security "threats" for which military methods are appropriate. This reasoning often omits reference to the role that U.S. weapons sales and military training of foreign officers plays in creating security threats in the first place. The U.S. government played a major role

in the arming of Iraq, and the military disarray in Somalia was made possible by American and Soviet competitive arming of Somali factions to purchase political allies. To convert the work at factories, laboratories, and bases, specialists on economic conversion have identified three core requirements. First, the planning for a changeover to civilian work must be done well in advance of physical execution. Second, the conversion planning must be done locally in each case, as it is out of the question for any centralized agency to master the myriad details of conversion planning in thousands of factories, laboratories, and bases. Third, the detailed planning process at each factory, base, and laboratory is carried out best by a joint management/ labor committee that would represent the full array of knowledge and commitment for establishing a viable economic entity. All this must be accompanied by occupation retraining, especially for managers and engineers, since their work is influenced heavily by the long habituation to the cost-plus style of operation characteristic of the Pentagon's operations. Competence in cost maximizing is precisely the obverse of the cost minimizing requirement for civilian products and services. Instead of such conversion operations, Bush and Clinton have preferred a strategy termed "diversification," with the main tasks of reorientation "adjustment" being left to each individual. Diversification of any particular firm can include a new military /civilian investment mix achieved by buying into civilian operations rather than actually altering any of the militaryserving work. Adjustment has very doubtful feasibility, when made the responsibility of each individual. Thus, in the characteristically high-density areas of military industry work, individual occupational retraining has severely limited prospects. "Retraining for what?" is the hard question where the main activity of the region has been work on behalf of the Pentagon. To all this, Bush and Clinton have added a major recommendation for "dual-use" technology, suggesting that the military industry firms strive to diversify toward technologies that have both military and civilian application. The limitations of this

idea are quite severe because it is unfeasible to design something with an eye to both minimizing and maximizing cost. Dual-use research and investments would constitute a sort of halfway house for military contracting factories and laboratories, with the military component necessarily dominating the field, as that is the source of the familiar and large finance-capital support. The Clinton Administration has added a major factor of centralization of control by putting a Pentagon agency - the Advanced Research Project Agency - in charge of the largest block of research and grant funds for new technology (mainly dual-use) and community impact studies. The executive branch has undertaken yet another approach in response to obviously reduced requirements for Cold War weapons. Foreign military sales promotion activity has been given a fresh impetus via the large military assistance and sales staffs at U.S. embassies. Congress' role At the side of the military industry managers in the executive branch, there is the crucial role of Congress acting as treasurer and marketing manager. The former function involves the formal voting of funds for military budgets. The latter entails continuing work by members of Congress and their staffs to channel Pentagon contracts, military bases, and laboratories to their communities. In these ways, individual Congressmen have taken on major responsibilities for employment and income in their respective districts and states, thereby having developed a major managerial stake in the size, composition, and allocation of the national military budgets. Since economic conversion would interfere with these arrangements, most Congressmen have refused to set in motion the advanced planning required for competent conversion operations. Even though Clinton's first military budget totaled $264,000,000,000, this is rather different from the magnitude that would have prevailed had the Reagan/Bush Cold War planning operations continued. In those terms, the military budget would have been far greater than 400,000,000,000 by 1994. As the Department of Defense has cut back on the Reagan/Bush military extravaganza, reductions in military

industry firms and their employment have become a striking feature of the country's main military industry concentrations. The largest military aerospace contractors (General Dynamics, Lockheed, Martin Marietta, Rockwell, Northrop) - all with major concentrations in Pentagon workhave tended to follow the lead set forth by Stanley C. Pace, CEO of General Dynamics. In testimony to the U.S. Senate Armed Services Committee (May 4, 1990), he stated basic company policy as follows: "As individuals are laid off, assist them in transferring individually into the commercial culture world, or into govemment, or into academia. I believe money spent on trying to convert a tank plant, or a missile plant, or a submarine plant to commercial products will be wasted." There is an altogether different perspective among many of the smaller contracting firms and subcontractors. Among the managers of these units, there has been a certain amount of self-starting activity for seeking out alternative products and markets. Obviously, the chiefs of these smaller enterprises are not in the position of the top managers of major firms who obtain vast salaries and are cushioned for retirement by notably generous arrangements. General Dynamics management showed its hand when it shut down its Navy A-12 manufacturing facility in Fort Worth, Tex., in 1991. Upon hearing from the Department of Defense that the contract was to be canceled, management announced on the public address system of the plant that everyone working on the A12 was laid off as of five p.m. that day and that medical benefits would terminate as of midnight. Unlike the top managers of major military industry firms, workers, middle managers, and engineers have little to hope for except the opportunity to participate in an economically viable enterprise. Therefore, without initiative by management for competent economic conversion planning, the trade unions of several plants have negotiated for the formation of joint management/labor conversion committees to examine the resources available and possible alternative products and their markets. This has been done at the Unysis Company in Wisconsin and at the Pratt & Whitney aircraft engine factory in

Connecticut. This idea as a strategy for trade unions also was given prominent attention at a 1993 meeting on economic conversion sponsored by the Industrial Union Department of the AFL-CIO. What could converted factories produce? For a start, $165,000,000,000 a year could be spent on needed public works, as recommended by the National Commission for Economic Conversion and Disarmament. These outlays include $30,000,000,000 each for housing and the Department of Education; $26,000,000,000 for repair of roads, bridges, water, and sewer systems; $23,000,000,000 for preschool programs, facilities repairs, and other education needs; $17,500,000,000 for radioactive waste cleanup; $16,000,000,000 for toxic waste cleanup; $12,500,000,000 for miscellaneous health costs; and $10,000,000,000 for electrification of the U.S. rail system. Taking the last item as a case in point, if the government were to organize capital investment for electrifying a national rail system, this would require an investment of not less than $10,000,000,000 a year over a period of at least 10 years. Such a program probably would be modeled after the $100,000,000,000 investment now under way for setting up fast electrified train service linking the main cities of Western Europe. Since the U.S. does not

possess the industrial facilities and the workforce needed to design, construct, and manage such a high-speed electric rail system, construction of an entire set of new industries would be required. All calculations about the employment effects of such a project should take into account a considerable multiplier effect that can be expected. Studies on multiplier effects from employment in manufacturing production indicate that, for every 1,000 new jobs in manufacturing, 4,100 additional ones are expected in supporting and servicing the core industrial operations. Finally, it is important to understand an essential difference between the conversion problem at the close of World War II and the one that confronts the U.S. in the 1990s. By the end of 1945, the U.S. economy had been on a high-level military concentration for five years. Virtually all the workers, engineers, and managers at the factories doing the war work had prior civilian industry experience. These plants proceeded to convert back to civilian operations, almost all of which were familiar. Within the Federal government, the War Production Board (WPB) that had centrally managed the enormous military program gave way to the Civilian Production Administration. John D. Small,

chief of CPA, sent Pres. Franklin D. Roosevelt a report on Dec. 6, 1946, From War to Peace: Civilian Production Achievements in Transition." The national apparatus for governing the U.S. World War II economy was turned about: ". . . As it was the primary job of WPB to mobilize the nation's industry to win the war as quickly as possible, so it was CPA's chief function to demobilize controls and speed transition to a normal peacetime economy. . . ." Since the end of the Cold War, the government and the corporate managers of America's permanent war economy have been holding on, with great tenacity, to their positions of power and privilege and have stonewalled all major proposals for economic conversion planning and operations. Pres. Clinton is fully empowered by the Constitution to set in motion conversion planning operations. On his decision alone, he can order the establishment of management/labor alternative use committees to undertake planning for the contingency of conversion in every Defense and Energy Departmentserving factory, base, and laboratory. The fear that now envelops the prospect of military budget reduction thus could be replaced by the anticipation of launching civilian-useful jobs with blue-print-ready plans in hand.

Chomsky On Adam Smith "What we would call capitalism he despised"

Excerpted from Class Warfare - 1995 By Noam Chomsky http://www.informationclearinghouse.info/article22546.htm
May 04, 2009 "Information Clearing House" -- David Barsamian: One of the heroes of the current right-wing revival... is Adam Smith. You've done some pretty impressive research on Smith that has excavated... a lot of information that's not coming out. You've often quoted him describing the "vile maxim of the masters of mankind: all for ourselves and nothing for other people." Noam Chomsky: I didn't do any research at all on Smith. I just read him. There's no research. Just read it. He's pre-capitalist, a figure of the Enlightenment. What we would call capitalism he despised. People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits. He did give an argument for markets, but the argument was that under conditions of perfect liberty, markets will lead to perfect equality. That's the argument for them, because he thought that equality of condition (not just opportunity) is what you should be aiming at. It goes on and on. He gave a devastating critique of what we would call North-South policies. He was talking about England and India. He bitterly condemned the British experiments they were carrying out which were devastating India. He also made remarks which ought to be truisms about the way states work. He pointed out that its totally senseless to talk about a nation and what we would nowadays call "national interests." He simply observed in passing, because it's so obvious, that in England, which is what he's discussing -- and it was the most democratic society of the day -- the principal architects of policy are the "merchants and manufacturers," and they make certain that their own interests are, in his words, "most peculiarly attended to," no matter what the effect on others, including the people of England who, he argued, suffered from their policies. He didn't have the data to prove it at the time, but he was probably right. This truism was, a century later, called class analysis, but you don't have to go to Marx to find it. It's very explicit in Adam Smith. It's so obvious that any ten-year-old can see it. So he didn't make a big point of it. He just mentioned it. But that's correct. If you read through his work, he's intelligent. He's a person who was from the Enlightenment. His driving motives were the assumption that people were guided by sympathy and feelings of solidarity and the need for control of their own work, much like other Enlightenment and early Romantic thinkers. He's part of that period, the Scottish Enlightenment. The version of him that's given today is just ridiculous. But I didn't have to any research to find this out. All you have to do is read. If you're literate, you'll find it out. I did do a little research in the way it's treated, and that's interesting. For example, the University of Chicago, the great

bastion of free market economics, etc., etc., published a bicentennial edition of the hero, a scholarly edition with all the footnotes and the introduction by a Nobel Prize winner, George Stigler, a huge index, a real scholarly edition. That's the one I used. It's the best edition. The scholarly framework was very interesting, including Stigler's introduction. It's likely he never opened The Wealth of Nations. Just about everything he said about the book was completely false. I went through a bunch of examples in writing about it, in Year 501 and elsewhere. But even more interesting in some ways was the index. Adam Smith is very well known for his advocacy of division of labor. Take a look at "division of labor" in the index and there are lots and lots of things listed. But there's one missing, namely his denunciation of division of labor, the one I just cited. That's somehow missing from the index. It goes on like this. I wouldn't call this research because it's ten minutes' work, but if you look at the scholarship, then it's interesting. I want to be clear about this. There is good Smith scholarship. If you look at the serious Smith scholarship, nothing I'm saying is any surprise to anyone. How could it be? You open the book and you read it and it's staring you right in the face. On the other hand if you look at the myth of Adam Smith, which is the only one we get, the discrepancy between that and the reality is enormous. This is true of classical liberalism in general. The founders of classical liberalism, people like Adam Smith and Wilhelm von Humboldt, who is one of the great exponents of classical liberalism, and who inspired John Stuart Mill -- they were what we would call libertarian socialists, at least that s the way I read them. For example, Humboldt, like Smith, says, Consider a craftsman who builds some beautiful thing. Humboldt says if he does it under external coercion, like pay, for wages, we may admire what he does but we despise what he is. On the other hand, if he does it out of his own free, creative expression of himself, under free will, not under external coercion of wage labor, then we also admire what he is because he's a human being. He said any decent socioeconomic system will be based on the assumption that people have the freedom to inquire and create -- since that's the fundamental nature of humans -- in free

association with others, but certainly not under the kinds of external constraints that came to be called capitalism. It's the same when you read Jefferson. He lived a half century later, so he saw state capitalism developing, and he despised it, of course. He said it's going to lead to a form of absolutism worse than the one we defended ourselves against. In fact, if you run through this whole period you see a very clear, sharp critique of what we would later call capitalism and certainly of the twentieth century version of it, which is designed to destroy individual, even entrepreneurial capitalism. There's a side current here which is rarely looked at but which is also quite fascinating. That's the working class literature of the nineteenth century. They didn't read Adam Smith and Wilhelm von Humboldt, but they're saying the same things. Read journals put out by the people called the "factory girls of Lowell," young women in the factories, mechanics, and other working people who were running their own newspapers. It's the same kind of critique. There was a real battle fought by working people in England and the U.S. to defend themselves against what they called the degradation and oppression and violence of the industrial capitalist system, which was not only dehumanizing them but was even radically reducing their intellectual level. So, you go back to the mid-nineteenth century and these so-called "factory girls," young girls working in the Lowell [Massachusetts] mills, were reading serious contemporary literature. They recognized that the point of the system was to turn them into tools who would be manipulated, degraded, kicked around, and so on. And they fought against it bitterly for a long period. That's the history of the rise of capitalism. The other part of the story is the development of corporations, which is an interesting story in itself. Adam Smith didn't say much about them, but he did criticize the early stages of them. Jefferson lived long enough to see the beginnings, and he was very strongly opposed to them. But the development of corporations really took place in the early twentieth century and very late in the nineteenth century. Originally, corporations existed as a public service. People would get together to build a bridge and they would be incorporated for that purpose by the state. They built the bridge and that's it. They were supposed to

have a public interest function. Well into the 1870s, states were removing corporate charters. They were granted by the state. They didn't have any other authority. They were fictions. They were removing corporate charters because they weren't serving a public function. But then you get into the period of the trusts and various efforts to consolidate power that were beginning to be made in the late nineteenth century. It's interesting to look at the literature. The courts didn't really accept it. There were some hints about it. It wasn't until the early twentieth century that courts and lawyers designed a new socioeconomic system. It was never done by legislation. It was done mostly by courts and lawyers and the power they could exercise over individual states. New Jersey was the first state to offer corporations any right they wanted. Of course, all the capital in the country suddenly started to flow to New Jersey, for obvious reasons. Then the other states had to do the same thing just to defend themselves or be wiped out. It's kind of a small-scale globalization. Then the courts and the corporate lawyers came along and created a whole new body of doctrine which gave corporations authority and power that they never had before. If you look at the background of it, it's the same background that led to fascism and Bolshevism. A lot of it was supported by people called progressives, for these reasons: They said, individual rights are gone. We are in a period of corporatization of power, consolidation of power, centralization. That's supposed to be good if you're a progressive, like a MarxistLeninist. Out of that same background came three major things: fascism, Bolshevism, and corporate tyranny. They all grew out of the same more or less Hegelian roots. It's fairly recent. We think of corporations as immutable, but they were designed. It was a conscious design which worked as Adam Smith said: the principal architects of policy consolidate state power and use it for their interests. It was certainly not popular will. It's basically court decisions and lawyers' decisions, which created a form of private tyranny which is now more massive in many ways than even state tyranny was. These are major parts of modern twentieth century history. The classical liberals would be horrified. They didn't even imagine this. But the smaller things that they saw, they were already horrified about. This would have totally scandalized Adam Smith or Jefferson or anyone like

that.... David Barsamian: ....You're very patient with people, particularly people who ask the most inane kinds of questions. Is this something you've cultivated? Noam Chomsky: First of all, I'm usually fuming inside, so what you see on the outside isn't necessarily what's inside. But as far as questions, the only thing I ever get irritated about is elite intellectuals, the stuff they do I do find irritating. I shouldn't. I should expect it. But I do find it irritating. But on the other hand, what you're describing as inane questions usually strike me as perfectly honest questions. People have no reason to believe anything other than what they're saying. If you think about where the questioner is coming from, what the person has been exposed to, that's a very rational and intelligent question. It may sound inane from some other point of view, but it's not at all inane from within the framework in which it's being raised. It's usually quite reasonable. So there's nothing to be irritated about. You may be sorry about the conditions in which the questions arise. The thing to do is to try to help them get out of their intellectual confinement, which is not just accidental, as I mentioned. There are huge efforts that do go into making people, to borrow Adam Smith's phrase, "as stupid and ignorant as it is possible for a human being to be." A lot of the educational system is designed for that, if you think about it, it's designed for obedience and passivity. From childhood, a lot of it is designed to prevent people from being independent and creative. If you're independent-minded in school, you're probably going to get into trouble very early on. That's not the trait that's being preferred or cultivated. When people live through all this stuff, plus corporate propaganda, plus television, plus the press and the whole mass, the deluge of ideological distortion that goes on, they ask questions that from another point of view are completely reasonable.... David Barsamian: At the Mellon lecture that you gave in Chicago... you focused primarily on the ideas of John Dewey and Bertrand Russell [regarding education]... Noam Chomsky: ... These were highly libertarian ideas. Dewey himself comes straight from the American mainstream.

People who read what he actually said would now consider him some far-out anti-American lunatic or something. He was expressing mainstream thinking before the ideological system had so grotesquely distorted the tradition. By now, it's unrecognizable. For example, not only did he agree with the whole Enlightenment tradition that, as he put it, "the goal of production is to produce free people," -- "free men," he said, but that's many years ago. That's the goal of production, not to produce commodities. He was a major theorist of democracy. There were many different, conflicting strands of democratic theory, but the one I'm talking about held that democracy requires dissolution of private power. He said as long as there is private control over the economic system, talk about democracy is a joke. Repeating basically Adam Smith, Dewey said, Politics is the shadow that big business casts over society. He said attenuating the shadow doesn't do much. Reforms are still going to leave it tyrannical. Basically, a classical liberal view. His main point was that you can't even talk about democracy until you have democratic control of industry, commerce, banking, everything. That means control by the people who work in the institutions, and the communities. These are standard libertarian socialist and anarchist ideas which go straight back to the Enlightenment, an outgrowth of the views of the kind that we were talking about before from classical liberalism. Dewey represented these in the modern period, as did Bertrand Russell, from another tradition, but again with roots in the Enlightenment. These were two of the major, if not the two major thinkers, of the twentieth century, whose ideas are about as well known as the real Adam Smith. Which is a sign of how efficient the educational system has been, and the propaganda system, in simply destroying even our awareness of our own immediate intellectual background. David Barsamian: In that same Mellon lecture, you paraphrased Russell on education. You said that he promoted the idea that education is not to be viewed as something like filling a vessel with water, but rather assisting a flower to grow in its own way... Noam Chomsky: That's an eighteenth century idea. I don't know if Russell knew about it or reinvented it, but you read that

as standard in early Enlightenment literature. That's the image that was used... Humboldt, the founder of classical liberalism, his view was that education is a matter of laying out a string along which the child will develop, but in its own way. You may do some guiding. That's what serious education would be from kindergarten up through graduate school. You do get it in advanced science, because there's no other way to do it. But most of the educational system is quite different. Mass education was designed to turn independent farmers into docile, passive tools of production. That was its primary purpose. And don't think people didn't know it. They knew it and they fought against it. There was a lot of resistance to mass education for exactly that reason. It was also understood by the elites. Emerson once said something about how we're educating them to keep them from our throats. If you don't educate them, what we call "education," they're going to take control -- "they" being what Alexander Hamilton called the "great beast," namely the people. The antidemocratic thrust of opinion in what are called democratic societies is really ferocious. And for good reason. Because the freer the society gets, the more dangerous the great beast becomes and the more you have to be careful to cage it somehow. On the other hand, there are exceptions, and Dewey and Russell are among those exceptions. But they are completely marginalized and unknown, although everybody sings praises to them, as they do to Adam Smith. What they actually said would be considered intolerable in the autocratic climate of dominant opinion. The totalitarian element of it is quite striking. The very fact that the concept "anti-American" can exist -- forget the way it's used -- exhibits a totalitarian streak that's pretty dramatic. That concept, anti-Americanism -- the only real counterpart to it in the modern world is anti-Sovietism. In the Soviet Union, the worst crime was to be anti-Soviet. That's the hallmark of a totalitarian society, to have concepts like anti-Sovietism or antiAmericanism. Here it's considered quite natural. Books on anti-Americanism, by people who are basically Stalinist clones, are highly respected. That's true of AngloAmerican societies, which are strikingly the more democratic societies. I think there's a correlation there...As freedom

grows, the need to coerce and control opinion also grows if you want to prevent the great beast from doing something with its freedom.... ... Sam Bowles and Herb Gintis, two economists, in their work on the American educational system some years back... pointed out that the educational system is divided into fragments. The part that's directed toward working people and the general population is indeed designed to impose obedience. But the education for elites can't quite do that. It has to allow creativity and independence. Otherwise they won't be able to do their job of making money. You find the same thing in

the press. That's why I read the Wall Street Journal and the Financial Times and Business Week. They just have to tell the truth. That's a contradiction in the mainstream press, too. Take, say, the New York Times or the Washington Post. They have dual functions and they're contradictory. One function is to subdue the great beast. But another function is to let their audience, which is an elite audience, gain a tolerably realistic picture of what's going on in the world. Otherwise, they won't be able to satisfy their own needs. That's a contradiction that runs right through the educational system as well. It's totally independent of another factor, namely just professional integrity,

which a lot of people have: honesty, no matter what the external constraints are. That leads to various complexities. If you really look at the details of how the newspapers work, you find these contradictions and problems playing themselves out in complicated ways.... This interview was excerpted from Class Warfare, 1995.