And to think this author lives in a country where libel is easily (and frequently) prosecuted...
US embassy cables: The job of the media is not to protect the powerful from embarrassment. It is for governments – not journalists – to guard public secrets, and there is no national jeopardy in WikiLeaks' revelations
by Simon Jenkins
guardian.co.uk, Sunday 28 November 2010 18.30 GMT
published @ http://www.guardian.co.uk/commentisfree/2010/nov/28/us-embassy-cables-wikileaks
Is it justified? Should a newspaper disclose virtually all a nation's secret diplomatic communication, illegally downloaded by one of its citizens? The reporting in the Guardian of the first of a selection of 250,000 US state department cables marks a recasting of modern diplomacy. Clearly, there is no longer such a thing as a safe electronic archive, whatever computing's snake-oil salesmen claim. No organisation can treat digitised communication as confidential. An electronic secret is a contradiction in terms.
Anything said or done in the name of a democracy is, prima facie, of public interest. When that democracy purports to be "world policeman" – an assumption that runs ghostlike through these cables – that interest is global. Nonetheless, the Guardian had to consider two things in abetting disclosure, irrespective of what is anyway published by WikiLeaks. It could not be party to putting the lives of individuals or sources at risk, nor reveal material that might compromise ongoing military operations or the location of special forces.
In this light, two backup checks were applied. The US government was told in advance the areas or themes covered, and "representations" were invited in return. These were considered. Details of "redactions" were then shared with the other four media recipients of the material and sent to WikiLeaks itself, to establish, albeit voluntarily, some common standard.
The state department knew of the leak several months ago and had ample time to alert staff in sensitive locations. Its pre-emptive scaremongering over the weekend stupidly contrived to hint at material not in fact being published. Nor is the material classified top secret, being at a level that more than 3 million US government employees are cleared to see, and available on the defence department's internal Siprnet. Such dissemination of "secrets" might be thought reckless, suggesting a diplomatic outreach that makes the British empire seem minuscule.
The revelations do not have the startling, coldblooded immediacy of the WikiLeaks war logs from Iraq and Afghanistan, with their astonishing insight into the minds of fighting men seemingly detached from the ethics of war. These disclosures are largely of analysis and high-grade gossip. Insofar as they are sensational, it is in showing the corruption and mendacity of those in power, and the mismatch between what they claim and what they do.
Few will be surprised to know that Vladimir Putin runs the world's most sensational kleptocracy, that the Saudis wanted the Americans to bomb Iran, or that Pakistan's ISI is hopelessly involved with Taliban groups of fiendish complexity. We now know that Washington knows too. The full extent of American dealings with Yemen might upset that country's government, but is hardly surprising. If it is true that the Pentagon targeted refugee camps for bombing, it should be of general concern. American congressmen might also be interested in the sums of money given to certain foreign generals supposedly to pay for military equipment.
The job of the media is not to protect power from embarrassment. If American spies are breaking United Nations rules by seeking the DNA biometrics of the UN director general, he is entitled to hear of it. British voters should know what Afghan leaders thought of British troops. American (and British) taxpayers might question, too, how most of the billions of dollars going in aid to Afghanistan simply exits the country at Kabul airport.
No harm is done by high-class chatter about President Nicolas Sarkozy's vulgarity and lack of house-training, or about the British royal family. What the American embassy in London thinks about the coalition suggests not an alliance at risk but an embassy with a talent problem.
Some stars shine through the banality such as the heroic envoy in Islamabad, Anne Patterson. She pleads that Washington's whole policy is counterproductive: it "risks destabilising the Pakistani state, alienating both the civilian government and the military leadership, and provoking a broader governance crisis without finally achieving the goal". Nor is any amount of money going to bribe the Taliban to our side. Patterson's cables are like missives from the Titanic as it already heads for the bottom.
The money‑wasting is staggering. Aid payments are never followed, never audited, never evaluated. The impression is of the world's superpower roaming helpless in a world in which nobody behaves as bidden. Iran, Russia, Pakistan, Afghanistan, Yemen, the United Nations, are all perpetually off script. Washington reacts like a wounded bear, its instincts imperial but its power projection unproductive.
America's foreign policy is revealed as a slave to rightwing drift, terrified of a bomb exploding abroad or of a pro-Israeli congressman at home. If the cables tell of the progress to war over Iran or Pakistan or Gaza or Yemen, their revelation might help debate the inanity of policies which, as Patterson says, seem to be leading in just that direction. Perhaps we can now see how catastrophe unfolds when there is time to avert it, rather than having to await a Chilcot report after the event. If that is not in the public's interest, I fail to see what is.
Clearly, it is for governments, not journalists, to protect public secrets. Were there some overriding national jeopardy in revealing them, greater restraint might be in order. There is no such overriding jeopardy, except from the policies themselves as revealed. Where it is doing the right thing, a great power should be robust against embarrassment.
What this saga must do is alter the basis of diplomatic reporting. If WikiLeaks can gain access to secret material, by whatever means, so presumably can a foreign power. Words on paper can be made secure, electronic archives not. The leaks have blown a hole in the framework by which states guard their secrets. The Guardian material must be a breach of the official secrets acts. But coupled with the penetration already allowed under freedom of information, the walls round policy formation and documentation are all but gone. All barriers are permeable. In future the only secrets will be spoken ones. Whether that is a good thing should be a topic for public debate.
Tuesday, December 21, 2010
A New Brand of Austerity
Alternatives to Austerity
by Joseph E. Stiglitz
published @ http://www.neurope.eu/articles/Alternatives-to-Austerity/103854.php
NEW YORK – In the aftermath of the Great Recession, countries have been left with unprecedented peacetime deficits and increasing anxieties about their growing national debts. In many countries, this is leading to a new round of austerity – policies that will almost surely lead to weaker national and global economies and a marked slowdown in the pace of recovery. Those hoping for large deficit reductions will be sorely disappointed, as the economic slowdown will push down tax revenues and increase demands for unemployment insurance and other social benefits.
The attempt to restrain the growth of debt does serve to concentrate the mind – it forces countries to focus on priorities and assess values. The United States is unlikely in the short term to embrace massive budget cuts, à la the United Kingdom. But the long-term prognosis – made especially dire by health-care reform’s inability to make much of a dent in rising medical costs – is sufficiently bleak that there is increasing bipartisan momentum to do something. President Barack Obama has appointed a bipartisan deficit-reduction commission, whose chairmen recently provided a glimpse of what their report might look like. Technically, reducing a deficit is a straightforward matter: one must either cut expenditures or raise taxes. It is already clear, however, that the deficit-reduction agenda, at least in the US, goes further: it is an attempt to weaken social protections, reduce the progressivity of the tax system, and shrink the role and size of government – all while leaving established interests, like the military-industrial complex, as little affected as possible.
In the US (and some other advanced industrial countries), any deficit-reduction agenda has to be set in the context of what happened over the last decade:
• a massive increase in defense expenditures, fueled by two fruitless wars, but going well beyond that;
• growth in inequality, with the top 1% garnering more than 20% of the country’s income, accompanied by a weakening of the middle class – median US household income has fallen by more than 5% over the past decade, and was in decline even before the recession;
• underinvestment in the public sector, including in infrastructure, evidenced so dramatically by the collapse of New Orleans’ levies; and
• growth in corporate welfare, from bank bailouts to ethanol subsidies to a continuation of agricultural subsidies, even when those subsidies have been ruled illegal by the World Trade Organization.
As a result, it is relatively easy to formulate a deficit-reduction package that boosts efficiency, bolsters growth, and reduces inequality. Five core ingredients are required. First, spending on high-return public investments should be increased. Even if this widens the deficit in the short run, it will reduce the national debt in the long run. What business wouldn’t jump at investment opportunities yielding returns in excess of 10% if it could borrow capital – as the US government can – for less than 3% interest?
Second, military expenditures must be cut – not just funding for the fruitless wars, but also for the weapons that don’t work against enemies that don’t exist. We’ve continued as if the Cold War never came to an end, spending as much on defense as the rest of the world combined. Following this is the need to eliminate corporate welfare. Even as America has stripped away its safety net for people, it has strengthened the safety net for firms, evidenced so clearly in the Great Recession with the bailouts of AIG, Goldman Sachs, and other banks. Corporate welfare accounts for nearly one-half of total income in some parts of US agro-business, with billions of dollars in cotton subsidies, for example, going to a few rich farmers – while lowering prices and increasing poverty among competitors in the developing world. An especially egregious form of corporate special treatment is that afforded to the drug companies. Even though the government is the largest buyer of their products, it is not allowed to negotiate prices, thereby fueling an estimated increase in corporate revenues – and costs to the government – approaching $1 trillion dollars over a decade.
Another example is the smorgasbord of special benefits provided to the energy sector, especially oil and gas, thereby simultaneously robbing the treasury, distorting resource allocation, and destroying the environment. Then there are the seemingly endless giveaways of national resources – from the free spectrum provided to broadcasters to the low royalties levied on mining companies to the subsidies to lumber companies. Creating a fairer and more efficient tax system, by eliminating the special treatment of capital gains and dividends, is also needed. Why should those who work for a living be subject to higher tax rates than those who reap their livelihood from speculation (often at the expense of others)?
Finally, with more than 20% of all income going to the top 1%, a slight increase, say 5%, in taxes actually paid would bring in more than $1 trillion over the course of a decade.
A deficit-reduction package crafted along these lines would more than meet even the most ardent deficit hawk’s demands. It would increase efficiency, promote growth, improve the environment, and benefit workers and the middle class. There’s only one problem: it wouldn’t benefit those at the top, or the corporate and other special interests that have come to dominate America’s policymaking. Its compelling logic is precisely why there is little chance that such a reasonable proposal would ever be adopted.
by Joseph E. Stiglitz
published @ http://www.neurope.eu/articles/Alternatives-to-Austerity/103854.php
NEW YORK – In the aftermath of the Great Recession, countries have been left with unprecedented peacetime deficits and increasing anxieties about their growing national debts. In many countries, this is leading to a new round of austerity – policies that will almost surely lead to weaker national and global economies and a marked slowdown in the pace of recovery. Those hoping for large deficit reductions will be sorely disappointed, as the economic slowdown will push down tax revenues and increase demands for unemployment insurance and other social benefits.
The attempt to restrain the growth of debt does serve to concentrate the mind – it forces countries to focus on priorities and assess values. The United States is unlikely in the short term to embrace massive budget cuts, à la the United Kingdom. But the long-term prognosis – made especially dire by health-care reform’s inability to make much of a dent in rising medical costs – is sufficiently bleak that there is increasing bipartisan momentum to do something. President Barack Obama has appointed a bipartisan deficit-reduction commission, whose chairmen recently provided a glimpse of what their report might look like. Technically, reducing a deficit is a straightforward matter: one must either cut expenditures or raise taxes. It is already clear, however, that the deficit-reduction agenda, at least in the US, goes further: it is an attempt to weaken social protections, reduce the progressivity of the tax system, and shrink the role and size of government – all while leaving established interests, like the military-industrial complex, as little affected as possible.
In the US (and some other advanced industrial countries), any deficit-reduction agenda has to be set in the context of what happened over the last decade:
• a massive increase in defense expenditures, fueled by two fruitless wars, but going well beyond that;
• growth in inequality, with the top 1% garnering more than 20% of the country’s income, accompanied by a weakening of the middle class – median US household income has fallen by more than 5% over the past decade, and was in decline even before the recession;
• underinvestment in the public sector, including in infrastructure, evidenced so dramatically by the collapse of New Orleans’ levies; and
• growth in corporate welfare, from bank bailouts to ethanol subsidies to a continuation of agricultural subsidies, even when those subsidies have been ruled illegal by the World Trade Organization.
As a result, it is relatively easy to formulate a deficit-reduction package that boosts efficiency, bolsters growth, and reduces inequality. Five core ingredients are required. First, spending on high-return public investments should be increased. Even if this widens the deficit in the short run, it will reduce the national debt in the long run. What business wouldn’t jump at investment opportunities yielding returns in excess of 10% if it could borrow capital – as the US government can – for less than 3% interest?
Second, military expenditures must be cut – not just funding for the fruitless wars, but also for the weapons that don’t work against enemies that don’t exist. We’ve continued as if the Cold War never came to an end, spending as much on defense as the rest of the world combined. Following this is the need to eliminate corporate welfare. Even as America has stripped away its safety net for people, it has strengthened the safety net for firms, evidenced so clearly in the Great Recession with the bailouts of AIG, Goldman Sachs, and other banks. Corporate welfare accounts for nearly one-half of total income in some parts of US agro-business, with billions of dollars in cotton subsidies, for example, going to a few rich farmers – while lowering prices and increasing poverty among competitors in the developing world. An especially egregious form of corporate special treatment is that afforded to the drug companies. Even though the government is the largest buyer of their products, it is not allowed to negotiate prices, thereby fueling an estimated increase in corporate revenues – and costs to the government – approaching $1 trillion dollars over a decade.
Another example is the smorgasbord of special benefits provided to the energy sector, especially oil and gas, thereby simultaneously robbing the treasury, distorting resource allocation, and destroying the environment. Then there are the seemingly endless giveaways of national resources – from the free spectrum provided to broadcasters to the low royalties levied on mining companies to the subsidies to lumber companies. Creating a fairer and more efficient tax system, by eliminating the special treatment of capital gains and dividends, is also needed. Why should those who work for a living be subject to higher tax rates than those who reap their livelihood from speculation (often at the expense of others)?
Finally, with more than 20% of all income going to the top 1%, a slight increase, say 5%, in taxes actually paid would bring in more than $1 trillion over the course of a decade.
A deficit-reduction package crafted along these lines would more than meet even the most ardent deficit hawk’s demands. It would increase efficiency, promote growth, improve the environment, and benefit workers and the middle class. There’s only one problem: it wouldn’t benefit those at the top, or the corporate and other special interests that have come to dominate America’s policymaking. Its compelling logic is precisely why there is little chance that such a reasonable proposal would ever be adopted.
Sunday, December 19, 2010
Lies in Faith and Faith in Lies
A Holiday Message from Ricky Gervais: Why I’m An Atheist
published @ http://blogs.wsj.com/speakeasy/2010/12/19/a-holiday-message-from-ricky-gervais-why-im-an-atheist/
Why don’t you believe in God? I get that question all the time. I always try to give a sensitive, reasoned answer. This is usually awkward, time consuming and pointless. People who believe in God don’t need proof of his existence, and they certainly don’t want evidence to the contrary. They are happy with their belief. They even say things like “it’s true to me” and “it’s faith”. I still give my logical answer because I feel that not being honest would be patronizing and impolite. It is ironic therefore that “I don’t believe in God because there is absolutely no scientific evidence for his existence and from what I’ve heard the very definition is a logical impossibility in this known universe”, comes across as both patronizing and impolite.
Arrogance is another accusation. Which seems particularly unfair. Science seeks the truth. And it does not discriminate. For better or worse it finds things out. Science is humble. It knows what it knows and it knows what it doesn’t know. It bases its conclusions and beliefs on hard evidence -‐ evidence that is constantly updated and upgraded. It doesn’t get offended when new facts come along. It embraces the body of knowledge. It doesn’t hold on to medieval practices because they are tradition. If it did, you wouldn’t get a shot of penicillin, you’d pop a leach down your trousers and pray. Whatever you “believe”, this is not as effective as medicine. Again you can say, “It works for me”, but so do placebos. My point being, I’m saying God doesn’t exist. I’m not saying faith doesn’t exist. I know faith exists. I see it all the time. But believing in something doesn’t make it true. Hoping that something is true doesn’t make it true. The existence of God is not subjective. He either exists or he doesn’t. It’s not a matter of opinion. You can have your own opinions. But you can’t have your own facts.
Why don’t I believe in God? No, no no, why do YOU believe in God? Surely the burden of proof is on the believer. You started all this. If I came up to you and said, “Why don’t you believe I can fly?” You’d say, “Why would I?” I’d reply, “Because it’s a matter of faith”. If I then said, “Prove I can’t fly. Prove I can’t fly see, see, you can’t prove it can you?” You’d probably either walk away, call security or throw me out of the window and shout, ‘’F—ing fly then you lunatic.”
This, is of course a spirituality issue, religion is a different matter. As an atheist, I see nothing “wrong” in believing in a god. I don’t think there is a god, but belief in him does no harm. If it helps you in any way, then that’s fine with me. It’s when belief starts infringing on other people’s rights when it worries me. I would never deny your right to believe in a god. I would just rather you didn’t kill people who believe in a different god, say. Or stone someone to death because your rulebook says their sexuality is immoral. It’s strange that anyone who believes that an all-‐powerful all knowing, omniscient power responsible for everything that happens, would also want to judge and punish people for what they are. From what I can gather, pretty much the worst type of person you can be is an atheist. The first four commandments hammer this point home. There is a god”, I’m him, no one else is, you’re not as good and don’t forget it. (Don’t murder anyone, doesn’t get a mention till number 6.)
When confronted with anyone who holds my lack of religious faith in such contempt, I say, “It’s the way God made me.”
But what are atheists really being accused of?
The dictionary definition of God is “a supernatural creator and overseer of the universe”. Included in this definition are all deities, goddesses and supernatural beings. Since the beginning of recorded history, which is defined by the invention of writing by the Sumerians around 6000 years ago, historians have cataloged over 3700 supernatural beings, of which 2870 can be considered deities.
So next time someone tells me they believe in God, I’ll say “Oh which one? Zeus? Hades? Jupiter? Mars? Odin? Thor? Krishna? Vishnu? Ra?…” If they say “Just God. I only believe in the one God”, I’ll point out that they are nearly as atheistic as me. I don’t believe in 2,870 gods, and they don’t believe in 2,869.
I used to believe in God. The Christian one that is.
I loved Jesus. He was my hero. More than pop stars. More than footballers. More than God. God was by definition omnipotent and perfect. Jesus was a man. He had to work at it. He had temptation but defeated sin. He had integrity and courage. But He was my hero because He was kind. And He was kind to everyone. He didn’t bow to peer pressure or tyranny or cruelty. He didn’t care who you were. He loved you. What a guy. I wanted to be just like Him.
One day when I was about 8 years old, I was drawing the crucifixion as part of my Bible-‐studies homework. I loved art too. And nature. I loved how God made all the animals. They were also perfect. Unconditionally beautiful. It was an amazing world.
I lived in a very poor, working-‐class estate in an urban sprawl called Reading, about 40 miles west of London. My father was a laborer and my mother was a housewife. I was never ashamed of poverty. It was almost noble. Also, everyone I knew was in the same situation, and I had everything I needed. School was free. My clothes were cheap and always clean and ironed. And mum was always cooking. She was cooking the day I was drawing on the cross.
I was sitting at the kitchen table when my brother came home. He was 11 years older than me, so he would have been 19. He was as smart as anyone I knew, but he was too cheeky. He would answer back and get into trouble. I was a good boy. I went to church and believed in God – what a relief for a working-‐class mother. You see, growing up where I did, mums didn’t hope as high as their kids growing up to be doctors; they just hoped their kids didn’t go to jail. So bring them up believing in God and they’ll be good and law abiding. It’s a perfect system. Well, nearly. 75 percent of Americans are God-‐fearing Christians; 75 percent of prisoners are God-‐fearing Christians. 10 percent of Americans are atheists; 0.2 percent of prisoners are atheists.
But anyway, there I was happily drawing my hero when my big brother Bob asked, “Why do you believe in God?” Just a simple question. But my mum panicked. “Bob” she said in a tone that I knew meant, “Shut up.” Why was that a bad thing to ask? If there was a God and my faith was strong it didn’t matter what people said.
Oh … hang on. There is no God. He knows it, and she knows it deep down. It was as simple as that. I started thinking about it and asking more questions, and within an hour, I was an atheist.
Wow. No God. If mum had lied to me about God, had she also lied to me about Santa? Yes, of course, but who cares? The gifts kept coming. And so did the gifts of my new found atheism. The gifts of truth, science, nature. The real beauty of this world. I learned of evolution – a theory so simple that only England’s greatest genius could have come up with it. Evolution of plants, animals and us – with imagination, free will, love, humor. I no longer needed a reason for my existence, just a reason to live. And imagination, free will, love, humor, fun, music, sports, beer and pizza are all good enough reasons for living.
But living an honest life – for that you need the truth. That’s the other thing I learned that day, that the truth, however shocking or uncomfortable, in the end leads to liberation and dignity.
So what does the question “Why don’t you believe in God?” really mean. I think when someone asks that; they are really questioning their own belief. In a way they are asking “what makes you so special? “How come you weren’t brainwashed with the rest of us?” “How dare you say I’m a fool and I’m not going to heaven, f— you!” Let’s be honest, if one person believed in God he would be considered pretty strange. But because it’s a very popular view it’s accepted. And why is it such a popular view? That’s obvious. It’s an attractive proposition. Believe in me and live forever. Again if it was just a case of spirituality this would be fine. “Do unto others…” is a good rule of thumb. I live by that. Forgiveness is probably the greatest virtue there is. Buts that’s exactly what it is -‐ a virtue. Not just a Christian virtue. No one owns being good. I’m good. I just don’t believe I’ll be rewarded for it in heaven. My reward is here and now. It’s knowing that I try to do the right thing. That I lived a good life. And that’s where spirituality really lost its way. When it became a stick to beat people with. “Do this or you’ll burn in hell.”
You won’t burn in hell. But be nice anyway.
published @ http://blogs.wsj.com/speakeasy/2010/12/19/a-holiday-message-from-ricky-gervais-why-im-an-atheist/
Why don’t you believe in God? I get that question all the time. I always try to give a sensitive, reasoned answer. This is usually awkward, time consuming and pointless. People who believe in God don’t need proof of his existence, and they certainly don’t want evidence to the contrary. They are happy with their belief. They even say things like “it’s true to me” and “it’s faith”. I still give my logical answer because I feel that not being honest would be patronizing and impolite. It is ironic therefore that “I don’t believe in God because there is absolutely no scientific evidence for his existence and from what I’ve heard the very definition is a logical impossibility in this known universe”, comes across as both patronizing and impolite.
Arrogance is another accusation. Which seems particularly unfair. Science seeks the truth. And it does not discriminate. For better or worse it finds things out. Science is humble. It knows what it knows and it knows what it doesn’t know. It bases its conclusions and beliefs on hard evidence -‐ evidence that is constantly updated and upgraded. It doesn’t get offended when new facts come along. It embraces the body of knowledge. It doesn’t hold on to medieval practices because they are tradition. If it did, you wouldn’t get a shot of penicillin, you’d pop a leach down your trousers and pray. Whatever you “believe”, this is not as effective as medicine. Again you can say, “It works for me”, but so do placebos. My point being, I’m saying God doesn’t exist. I’m not saying faith doesn’t exist. I know faith exists. I see it all the time. But believing in something doesn’t make it true. Hoping that something is true doesn’t make it true. The existence of God is not subjective. He either exists or he doesn’t. It’s not a matter of opinion. You can have your own opinions. But you can’t have your own facts.
Why don’t I believe in God? No, no no, why do YOU believe in God? Surely the burden of proof is on the believer. You started all this. If I came up to you and said, “Why don’t you believe I can fly?” You’d say, “Why would I?” I’d reply, “Because it’s a matter of faith”. If I then said, “Prove I can’t fly. Prove I can’t fly see, see, you can’t prove it can you?” You’d probably either walk away, call security or throw me out of the window and shout, ‘’F—ing fly then you lunatic.”
This, is of course a spirituality issue, religion is a different matter. As an atheist, I see nothing “wrong” in believing in a god. I don’t think there is a god, but belief in him does no harm. If it helps you in any way, then that’s fine with me. It’s when belief starts infringing on other people’s rights when it worries me. I would never deny your right to believe in a god. I would just rather you didn’t kill people who believe in a different god, say. Or stone someone to death because your rulebook says their sexuality is immoral. It’s strange that anyone who believes that an all-‐powerful all knowing, omniscient power responsible for everything that happens, would also want to judge and punish people for what they are. From what I can gather, pretty much the worst type of person you can be is an atheist. The first four commandments hammer this point home. There is a god”, I’m him, no one else is, you’re not as good and don’t forget it. (Don’t murder anyone, doesn’t get a mention till number 6.)
When confronted with anyone who holds my lack of religious faith in such contempt, I say, “It’s the way God made me.”
But what are atheists really being accused of?
The dictionary definition of God is “a supernatural creator and overseer of the universe”. Included in this definition are all deities, goddesses and supernatural beings. Since the beginning of recorded history, which is defined by the invention of writing by the Sumerians around 6000 years ago, historians have cataloged over 3700 supernatural beings, of which 2870 can be considered deities.
So next time someone tells me they believe in God, I’ll say “Oh which one? Zeus? Hades? Jupiter? Mars? Odin? Thor? Krishna? Vishnu? Ra?…” If they say “Just God. I only believe in the one God”, I’ll point out that they are nearly as atheistic as me. I don’t believe in 2,870 gods, and they don’t believe in 2,869.
I used to believe in God. The Christian one that is.
I loved Jesus. He was my hero. More than pop stars. More than footballers. More than God. God was by definition omnipotent and perfect. Jesus was a man. He had to work at it. He had temptation but defeated sin. He had integrity and courage. But He was my hero because He was kind. And He was kind to everyone. He didn’t bow to peer pressure or tyranny or cruelty. He didn’t care who you were. He loved you. What a guy. I wanted to be just like Him.
One day when I was about 8 years old, I was drawing the crucifixion as part of my Bible-‐studies homework. I loved art too. And nature. I loved how God made all the animals. They were also perfect. Unconditionally beautiful. It was an amazing world.
I lived in a very poor, working-‐class estate in an urban sprawl called Reading, about 40 miles west of London. My father was a laborer and my mother was a housewife. I was never ashamed of poverty. It was almost noble. Also, everyone I knew was in the same situation, and I had everything I needed. School was free. My clothes were cheap and always clean and ironed. And mum was always cooking. She was cooking the day I was drawing on the cross.
I was sitting at the kitchen table when my brother came home. He was 11 years older than me, so he would have been 19. He was as smart as anyone I knew, but he was too cheeky. He would answer back and get into trouble. I was a good boy. I went to church and believed in God – what a relief for a working-‐class mother. You see, growing up where I did, mums didn’t hope as high as their kids growing up to be doctors; they just hoped their kids didn’t go to jail. So bring them up believing in God and they’ll be good and law abiding. It’s a perfect system. Well, nearly. 75 percent of Americans are God-‐fearing Christians; 75 percent of prisoners are God-‐fearing Christians. 10 percent of Americans are atheists; 0.2 percent of prisoners are atheists.
But anyway, there I was happily drawing my hero when my big brother Bob asked, “Why do you believe in God?” Just a simple question. But my mum panicked. “Bob” she said in a tone that I knew meant, “Shut up.” Why was that a bad thing to ask? If there was a God and my faith was strong it didn’t matter what people said.
Oh … hang on. There is no God. He knows it, and she knows it deep down. It was as simple as that. I started thinking about it and asking more questions, and within an hour, I was an atheist.
Wow. No God. If mum had lied to me about God, had she also lied to me about Santa? Yes, of course, but who cares? The gifts kept coming. And so did the gifts of my new found atheism. The gifts of truth, science, nature. The real beauty of this world. I learned of evolution – a theory so simple that only England’s greatest genius could have come up with it. Evolution of plants, animals and us – with imagination, free will, love, humor. I no longer needed a reason for my existence, just a reason to live. And imagination, free will, love, humor, fun, music, sports, beer and pizza are all good enough reasons for living.
But living an honest life – for that you need the truth. That’s the other thing I learned that day, that the truth, however shocking or uncomfortable, in the end leads to liberation and dignity.
So what does the question “Why don’t you believe in God?” really mean. I think when someone asks that; they are really questioning their own belief. In a way they are asking “what makes you so special? “How come you weren’t brainwashed with the rest of us?” “How dare you say I’m a fool and I’m not going to heaven, f— you!” Let’s be honest, if one person believed in God he would be considered pretty strange. But because it’s a very popular view it’s accepted. And why is it such a popular view? That’s obvious. It’s an attractive proposition. Believe in me and live forever. Again if it was just a case of spirituality this would be fine. “Do unto others…” is a good rule of thumb. I live by that. Forgiveness is probably the greatest virtue there is. Buts that’s exactly what it is -‐ a virtue. Not just a Christian virtue. No one owns being good. I’m good. I just don’t believe I’ll be rewarded for it in heaven. My reward is here and now. It’s knowing that I try to do the right thing. That I lived a good life. And that’s where spirituality really lost its way. When it became a stick to beat people with. “Do this or you’ll burn in hell.”
You won’t burn in hell. But be nice anyway.
Wednesday, December 15, 2010
An Interview with Chalmers Johnson
The piece below is from tomdispatch.com, an invaluable source for intriguing opinions on foreign policy and American Empire. In the interview, celebrated author Chalmers Johnson (now deceased) provided incredible insight into consequences of the American Empire. Enjoy reading this, and then go find copies of his other work!
Tomdispatch Interview: Chalmers Johnson on Our Fading Republic
By Tom Engelhardt
Posted on March 22, 2006, Printed on December 16, 2010
http://www.tomdispatch.com/blog/70576/
In Part 1 of his interview, Chalmers Johnson suggested what that fall-of-the-Berlin-Wall, end-of-the-Cold-War moment meant to him; explored how deeply empire and militarism have entered the American bloodstream; and began to consider what it means to live in an unacknowledged state of military Keynesianism, garrisoning the planet, and with an imperial budget -- a real yearly Pentagon budget -- of perhaps three-quarters of a trillion dollars. Tom
What Ever Happened to Congress? A Tomdispatch Interview with Chalmers Johnson (Part 2)
Tomdispatch: You were discussing the lunacy of the 2007 Pentagon budget
Chalmers Johnson:What I don't understand is that the current defense budget and the recent Quadrennial Defense Review (which has no strategy in it at all) are just continuations of everything we did before. Make sure that the couple of hundred military golf courses around the world are well groomed, that the Lear jets are ready to fly the admirals and generals to the Armed Forces ski resort in Garmisch in the Bavarian Alps or the military's two luxury hotels in downtown Seoul and Tokyo.
What I can't explain is what has happened to Congress. Is it just that they're corrupt? That's certainly part of it. I'm sitting here in California's 50th district. This past December, our congressman Randy Cunningham confessed to the largest single bribery case in the history of the U.S. Congress: $2.4 million in trinkets -- a Rolls Royce, some French antiques -- went to him, thanks to his ability as a member of the military subcommittee of the House Appropriations Committee to add things secretly to the budget. He was doing this for pals of his running small companies. He was adding things even the Department of Defense said it didn't want.
This is bribery and, as somebody said the other day, Congress comes extremely cheap. For $2.4 million, these guys got about $175 million in contracts. It was an easy deal.
The military is out of control. As part of the executive branch, it's expanded under cover of the national security state. Back when I was a kid, the Pentagon was called the Department of War. Now, it's the Department of Defense, though it palpably has nothing to do with defense. Hasn't for a long time. We even have another department of the government today that's concerned with "homeland security." You wonder what on Earth do we have that for -- and a Dept of Defense, too!
The government isn't working right. There's no proper supervision. The founders, the authors of the Constitution, regarded the supreme organ to be Congress. The mystery to me -- more than the huge expansion of executive branch powers we've seen since the neoconservatives and George Bush came to power -- is: Why has Congress failed us so completely? Why are they no longer interested in the way the money is spent? Why does a Pentagon budget like this one produce so little interest? Is it that people have a vested interest in it, that it's going to produce more jobs for them?
I wrote an article well before Cunningham confessed called The Military-Industrial Man in which I identified a lot of what he was doing, but said unfortunately I didn't know how to get rid of him in such a safe district. After it appeared on the Los Angeles Times op-ed page, the paper got a couple of letters to the editor from the 34th district in downtown LA saying, I wish he was my congressman. If he'd bring good jobs here, I wouldn't mind making something that just gets blown up or sunk in the ground like missile defense in Alaska. I mean, we've already spent $100 billion on what amounts to a massive high-tech scarecrow. It couldn't hit a thing. The aiming devices aren't there. The tests fail. It doesn't work. It's certainly a cover for something much more ominous -- the expansion of the Air Force into outer space or "full spectrum dominance," as they like to put it.
We need to concentrate on this, and not from a partisan point of view either. There's no reason to believe the Democrats would do a better job. They never have. They've expanded the armed forces just as fast as the Republicans.
This is the beast we're trying to analyze, to understand, and it seems to me today unstoppable. Put it this way: James Madison, the author of our Constitution, said the right that controls all other rights is the right to get information. If you don't have this, the others don't matter. The Bill of Rights doesn't work if you can't find out what's going on. Secrecy has been going crazy in this country for a long time, but it's become worse by orders of magnitude under the present administration. When John Ashcroft became attorney general, he issued orders that access to the Freedom of Information Act should be made as difficult as possible.
The size of the black budget in the Pentagon has been growing ever larger during this administration. These are projects no one gets to see. To me, one of the most interesting spectacles in our society is watching uniformed military officers like General Michael Hayden, former head of the National Security Agency, sitting in front of Congress, testifying. It happened the other day. Hillary Clinton asked him: Tell us at least approximately how many [NSA warrantless spying] interventions have you made? "I'm not going to tell you" was his answer. Admiral Jacoby, head of the Defense Intelligence Agency, was asked directly about a year ago, are we still paying Ahmed Chalabi $340,000 a month? And his reply was, "I'm not going to say."
At this point, should the senator stand up and say: "I want the U.S. Marshall to arrest that man." I mean, this is contempt of Congress.
TD: You're also saying, of course, that there's a reason to have contempt for Congress.
Johnson: There is indeed. You can understand why these guys do it. Richard Helms, the Director of the CIA back in 1977, was convicted of a felony for lying to Congress. He said, no, we had nothing to do with the overthrow of [Chilean President] Salvador Allende when we had everything to do with it. He gets a suspended sentence, pays a small fine, walks into the CIA building at Langley, Virginia and is met by a cheering crowd. Our hero! He's proudly maintained the principles of the secret intelligence service, which is the private army of the president and we have no idea what he's doing with it. Everything they do is secret. Every item in their budget is secret.
TD: And the military, too, has become something of a private army
Johnson: Exactly. I dislike conscription because it's so easily manipulated, but I do believe in the principle of the obligation of citizens to defend the country in times of crisis. Now, how we do that is still an open question, but at least the citizens' army was a check on militarism. People in the armed forces knew they were there involuntarily. They were extremely interested in whether their officers were competent, whether the strategy made sense, whether the war they might have to fight was justified, and if they began to believe that they were being deeply lied to, as in Vietnam, the American military would start to come apart. The troops then were fragging their officers so seriously that General Creighton Abrams said, we've got to get them out of there. And call it Vietnamization or anything else, that's what they did.
I fear that we're heading that way in Iraq. You open the morning paper and discover that they're now going to start recruiting down to level four, people with serious mental handicaps. The terrible thing is that they'll just be cannon fodder.
It's not rocket science to say that we're talking about a tragedy in the works here. Americans aren't that rich. We had a trade deficit in 2005 of $725.8 billion. That's a record. It went up almost 25% in just over a year. You can't go on not making things, fighting these kinds of wars, and building weapons that are useless. Herb Stein, when he was chairman of the council of economic advisers in a Republican administration very famously said, "Things that can't go on forever don't."
TD:: So put our problems in a nutshell.
Johnson: From George Bush's point of view, his administration has achieved everything ideologically that he wanted to achieve. Militarism has been advanced powerfully. In the minds of a great many people, the military is now the only American institution that appears to work. He's enriched the ruling classes. He's destroyed the separation of powers as thoroughly as was possible. These are the problems that face us right now. The only way you could begin to rebuild the separation of powers would be to reinvigorate the Congress and I don't know what could shock the American public into doing that. They're the only ones who could do it. The courts can't. The President obviously won't.
The only thing I can think of that might do it would be bankruptcy. Like what happened to Argentina in 2001. The richest country in Latin America became one of the poorest. It collapsed. It lost the ability to borrow money and lost control of its affairs, but a great many Argentines did think about what corrupt presidents had listened to what corrupt advice and done what stupid things during the 1990s. And right now, the country is on its way back.
TD: But superpower bankruptcy? It's a concept nobody's really explored. When the British empire finally went, we were behind them. Is there somebody behind us?
Johnson: No.
TD: So what would it mean for us to go bankrupt?. After all, we're not Argentina.
Johnson: It would mean losing control over things. All of a sudden, we would be dependent on the kindness of strangers. looking for handouts. We already have a $725 billion trade deficit; the largest fiscal deficit in our history, now well over 6% of GDP. The defense budgets are off the charts and don't make any sense, and don't forget that $500 billion we've already spent on the Iraq war -- every nickel of it borrowed from people in China and Japan who saved and invested because they would like to have access to this market. Any time they decide they don't want to lend to us, interest rates will go crazy and the stock exchange will collapse.
We pour about $2 billion a day just into servicing the amounts we borrow. The moment people quit lending us that money, we have to get it out of domestic savings and right now we have a negative savings rate in this country. To get Americans to save 20% of their income, you'd have to pay them at least a 20% interest rate and that would produce a truly howling recession. We'd be back to the state of things in the 1930s that my mother used to describe to me -- we lived in the Arizona countryside then -- when someone would tap on the rear door and say, "Have you got any work? I don't want to be paid, I just want to eat." And she'd say, "Sure, we'll find something for you to do and give you eggs and potatoes."
A depression like that would go on in this country for quite a while. The rest of the world would also have a severe recession, but would probably get over it a lot faster.
TD: So you can imagine the Chinese, Japanese, and European economies going on without us, not going down with us.
Johnson: Absolutely. I think they could.
TD: Don't you imagine, for example, that the Chinese bubble economy, the part that's based on export to the United States might collapse, setting off chaos there too?
Johnson: It might, but the Chinese would not blame their government for it. And there is no reason the Chinese economy shouldn't, in the end, run off domestic consumption. When you've got that many people interested in having better lives, they needn't depend forever on selling sweaters and pajamas in North America. The American economy is big, but there's no reason to believe it's so big the rest of the world couldn't do without us. Moreover, we're kidding ourselves because we already manufacture so little today -- except for weapons.
We could pay a terrible price for not having been more prudent. To have been stupid enough to give up on infrastructure, health care, and education in order to put 8 missiles in the ground at Fort Greeley, Alaska that can't hit anything. In fact, when tested, sometimes they don't even get out of their silos.
TD: How long do you see the dollar remaining the international currency? I noticed recently that Iran was threatening to switch to Euros.
Johnson: Yes, they're trying to create an oil bourse based on the Euro. Any number of countries might do that. Econ 1A as taught in any American university is going to tell you that a country that runs the biggest trade deficits in economic history must pay a penalty if the global system is to be brought back into equilibrium. What this would mean is a currency so depreciated no American could afford a Lexus automobile. A vacation in Italy would cost Americans a wheelbarrow full of dollars.
TD: At least it might stop the CIA from kidnapping people off the streets of Italy in the style to which they've grown accustomed.
Johnson: [Laughs.] Their kidnappers would no longer be staying in the Principe di Savoia [a five-star hotel] in Milano, that's for sure.
The high-growth economies of East Asia now hold huge amounts in American treasury certificates. If the dollar loses its value, the last person to get out of dollars loses everything, so you naturally want to be first. But the person first making the move causes everyone else to panic. So it's a very cautious, yet edgy situation.
A year ago, the head of the Korean Central Bank, which has a couple of hundred billion of our dollars, came out and said: I think we're a little heavily invested in dollars, suggesting that maybe Dubai's currency would be better right now, not to mention the Euro. Instantaneous panic. People started to sell; presidents got on the telephone asking: What in the world are you people up to? And the Koreans backed down -- and so it continues.
There are smart young American PhDs in economics today inventing theories about why this will go on forever. One is that there's a global savings glut. People have too much money and nothing to do with it, so they loan it to us. Even so, as the very considerable economics correspondent for the Nation magazine, William Greider, has written several times, it's extremely unwise for the world's largest debtor to go around insulting his bankers. We're going to send four aircraft-carrier task forces to the Pacific this summer to intimidate the Chinese, sail around, fly our airplanes, shoot off a few cruise missiles. Why shouldn't the Chinese say, let's get out of dollars. Okay, they don't want a domestic panic of their own, so the truth is they would do it as subtly as they could, causing as little fuss as possible.
What does this administration think it's doing, reducing taxes when it needs to be reducing huge deficits? As far as I can see, its policies have nothing to do with Republican or Democratic ideology, except that its opposite would be traditional, old Republican conservatism, in the sense of being fiscally responsible, not wasting our money on aircraft carriers or other nonproductive things.
But the officials of this administration are radicals. They're crazies. We all speculate on why they do it. Why has the President broken the Constitution, let the military spin virtually out of control, making it the only institution he would turn to for anything -- another Katrina disaster, a bird flu epidemic? The whole thing seems farcical, but what it does remind you of is ancient Rome.
If a bankruptcy situation doesn't shake us up, then I fear we will, as an author I admire wrote the other day, be "crying for the coup." We could end the way the Roman Republic ended. When the chaos, the instability become too great, you turn it over to a single man. After about the same length of time our republic has been in existence, the Roman Republic got itself in that hole by inadvertently, thoughtlessly acquiring an empire they didn't need and weren't able to administer, that kept them at war all the time. Ultimately, it caught up with them. I can't see how we would be immune to a Julius Caesar, to a militarist who acts the populist.
TD: Do you think that our all-volunteer military will turn out to be the janissaries of our failed empire?
Johnson: They might very well be. I'm already amazed at the degree to which they tolerate this incompetent government. I mean the officers know that their precious army, which they worked so hard to rebuild after the Vietnam War, is coming apart again, that it's going to be ever harder to get people to enlist, that even the military academies are in trouble. I don't know how long they'll take it. Tommy Franks, the general in charge of the attack on Baghdad, did say that if there were another terrorist attack in the United States comparable to 9/11, the military might have no choice but to take over. In other words: If we're going to do the work, why listen to incompetents like George Bush? Why take orders from an outdated character like Donald Rumsfeld? Why listen to a Congress in which, other than John McCain, virtually no Republican has served in the armed forces?
I don't see the obvious way out of our problems. The political system has failed. You could elect the opposition party, but it can't bring the CIA under control; it can't bring the military-industrial complex under control; it can't reinvigorate the Congress. It would be just another holding operation as conditions got worse.
Now, I'll grant you, I could be wrong. If I am, you're going to be so glad, you'll forgive me. [He laughs.] In the past, we've had clear excesses of executive power. There was Lincoln and the suspension of habeas corpus. Theodore Roosevelt virtually invented the executive order. Until then, most presidents didn't issue executive orders. Roosevelt issued well over a thousand. It was the equivalent of today's presidential signing statement. Then you go on to the mad Presbyterian Woodrow Wilson, whom the neocons are now so in love with, and Franklin Roosevelt and his pogrom against Americans of Japanese ancestry. But there was always a tendency afterwards for the pendulum to swing back, for the American public to become concerned about what had been done in its name and correct it. What's worrying me is: Can we expect a pendulum swing back this time?
TD: Maybe there is no pendulum.
Johnson: Today, Cheney tells us that presidential powers have been curtailed by the War Powers Act [of 1973], congressional oversight of the intelligence agencies, and so on. This strikes me as absurd, since these modest reforms were made to deal with the grossest violations of the Constitution in the Nixon administration. Moreover, most of them were stillborn. There's not a president yet who has acknowledged the War Powers Act as legitimate. They regard themselves as not bound by it, even though it was an act of Congress and, by our theory of government, unless openly unconstitutional, that's the bottom line. A nation of laws? No, we are not. Not anymore.
TD: Usually we believe that the Cold War ended with the Soviet Union's collapse and, in essence, our victory. A friend of mine put it another way. The United States, he suggested, was so much more powerful than the USSR that we had a greater capacity to shift our debts elsewhere. The Soviets didn't and so imploded. My question is this: Are we now seeing the delayed end of the Cold War? Perhaps both superpowers were headed for the proverbial trash bin of history, simply at different rates of speed?
Johnson: I've always believed that they went first because they were poorer and that the terrible, hubristic conclusion we drew -- that we were victorious, that we won -- was off the mark. I always felt that we both lost the Cold War for the same reasons -- imperial overstretch, excessive militarism, things that have been identified by students of empires since Babylonia. We've never given Mikhail Gorbachev credit. Most historians would say that no empire ever gave up voluntarily. The only one I can think of that tried was the Soviet Union under him.
TD: Any last words?
Johnson: I'm still working on them. My first effort was Blowback. That was well before I anticipated anything like massive terrorist attacks in the United States. It was a statement that the foreign-policy problems -- I still just saw them as that -- of the first part of the 21st century were going to be left over from the previous century, from our rapacious activities in Latin America, from our failure to truly learn the lessons of Vietnam. The Sorrows of Empire was an attempt to come to grips with our militarism. Now, I'm considering how we've managed to alienate so many rich, smart allies -- every one of them, in fact. How we've come to be so truly hated. This, in a Talleyrand sense, is the sort of mistake from which you can't recover. That's why I'm planning on calling the third volume of what I now think of as "The Blowback Trilogy," Nemesis. Nemesis was the Greek goddess of vengeance. She also went after people who became too arrogant, who were so taken with themselves that they lost all prudence. She was always portrayed as a fierce figure with a scale in one hand -- think, Judgment Day -- and a whip in the other
TD: And you believe she's coming after us?
Johnson: Oh, I believe she's arrived. I think she's sitting around waiting for her moment, the one we're coming up on right now.
Copyright 2006 Tomdispatch
Tomdispatch Interview: Chalmers Johnson on Our Fading Republic
By Tom Engelhardt
Posted on March 22, 2006, Printed on December 16, 2010
http://www.tomdispatch.com/blog/70576/
In Part 1 of his interview, Chalmers Johnson suggested what that fall-of-the-Berlin-Wall, end-of-the-Cold-War moment meant to him; explored how deeply empire and militarism have entered the American bloodstream; and began to consider what it means to live in an unacknowledged state of military Keynesianism, garrisoning the planet, and with an imperial budget -- a real yearly Pentagon budget -- of perhaps three-quarters of a trillion dollars. Tom
What Ever Happened to Congress? A Tomdispatch Interview with Chalmers Johnson (Part 2)
Tomdispatch: You were discussing the lunacy of the 2007 Pentagon budget
Chalmers Johnson:What I don't understand is that the current defense budget and the recent Quadrennial Defense Review (which has no strategy in it at all) are just continuations of everything we did before. Make sure that the couple of hundred military golf courses around the world are well groomed, that the Lear jets are ready to fly the admirals and generals to the Armed Forces ski resort in Garmisch in the Bavarian Alps or the military's two luxury hotels in downtown Seoul and Tokyo.
What I can't explain is what has happened to Congress. Is it just that they're corrupt? That's certainly part of it. I'm sitting here in California's 50th district. This past December, our congressman Randy Cunningham confessed to the largest single bribery case in the history of the U.S. Congress: $2.4 million in trinkets -- a Rolls Royce, some French antiques -- went to him, thanks to his ability as a member of the military subcommittee of the House Appropriations Committee to add things secretly to the budget. He was doing this for pals of his running small companies. He was adding things even the Department of Defense said it didn't want.
This is bribery and, as somebody said the other day, Congress comes extremely cheap. For $2.4 million, these guys got about $175 million in contracts. It was an easy deal.
The military is out of control. As part of the executive branch, it's expanded under cover of the national security state. Back when I was a kid, the Pentagon was called the Department of War. Now, it's the Department of Defense, though it palpably has nothing to do with defense. Hasn't for a long time. We even have another department of the government today that's concerned with "homeland security." You wonder what on Earth do we have that for -- and a Dept of Defense, too!
The government isn't working right. There's no proper supervision. The founders, the authors of the Constitution, regarded the supreme organ to be Congress. The mystery to me -- more than the huge expansion of executive branch powers we've seen since the neoconservatives and George Bush came to power -- is: Why has Congress failed us so completely? Why are they no longer interested in the way the money is spent? Why does a Pentagon budget like this one produce so little interest? Is it that people have a vested interest in it, that it's going to produce more jobs for them?
I wrote an article well before Cunningham confessed called The Military-Industrial Man in which I identified a lot of what he was doing, but said unfortunately I didn't know how to get rid of him in such a safe district. After it appeared on the Los Angeles Times op-ed page, the paper got a couple of letters to the editor from the 34th district in downtown LA saying, I wish he was my congressman. If he'd bring good jobs here, I wouldn't mind making something that just gets blown up or sunk in the ground like missile defense in Alaska. I mean, we've already spent $100 billion on what amounts to a massive high-tech scarecrow. It couldn't hit a thing. The aiming devices aren't there. The tests fail. It doesn't work. It's certainly a cover for something much more ominous -- the expansion of the Air Force into outer space or "full spectrum dominance," as they like to put it.
We need to concentrate on this, and not from a partisan point of view either. There's no reason to believe the Democrats would do a better job. They never have. They've expanded the armed forces just as fast as the Republicans.
This is the beast we're trying to analyze, to understand, and it seems to me today unstoppable. Put it this way: James Madison, the author of our Constitution, said the right that controls all other rights is the right to get information. If you don't have this, the others don't matter. The Bill of Rights doesn't work if you can't find out what's going on. Secrecy has been going crazy in this country for a long time, but it's become worse by orders of magnitude under the present administration. When John Ashcroft became attorney general, he issued orders that access to the Freedom of Information Act should be made as difficult as possible.
The size of the black budget in the Pentagon has been growing ever larger during this administration. These are projects no one gets to see. To me, one of the most interesting spectacles in our society is watching uniformed military officers like General Michael Hayden, former head of the National Security Agency, sitting in front of Congress, testifying. It happened the other day. Hillary Clinton asked him: Tell us at least approximately how many [NSA warrantless spying] interventions have you made? "I'm not going to tell you" was his answer. Admiral Jacoby, head of the Defense Intelligence Agency, was asked directly about a year ago, are we still paying Ahmed Chalabi $340,000 a month? And his reply was, "I'm not going to say."
At this point, should the senator stand up and say: "I want the U.S. Marshall to arrest that man." I mean, this is contempt of Congress.
TD: You're also saying, of course, that there's a reason to have contempt for Congress.
Johnson: There is indeed. You can understand why these guys do it. Richard Helms, the Director of the CIA back in 1977, was convicted of a felony for lying to Congress. He said, no, we had nothing to do with the overthrow of [Chilean President] Salvador Allende when we had everything to do with it. He gets a suspended sentence, pays a small fine, walks into the CIA building at Langley, Virginia and is met by a cheering crowd. Our hero! He's proudly maintained the principles of the secret intelligence service, which is the private army of the president and we have no idea what he's doing with it. Everything they do is secret. Every item in their budget is secret.
TD: And the military, too, has become something of a private army
Johnson: Exactly. I dislike conscription because it's so easily manipulated, but I do believe in the principle of the obligation of citizens to defend the country in times of crisis. Now, how we do that is still an open question, but at least the citizens' army was a check on militarism. People in the armed forces knew they were there involuntarily. They were extremely interested in whether their officers were competent, whether the strategy made sense, whether the war they might have to fight was justified, and if they began to believe that they were being deeply lied to, as in Vietnam, the American military would start to come apart. The troops then were fragging their officers so seriously that General Creighton Abrams said, we've got to get them out of there. And call it Vietnamization or anything else, that's what they did.
I fear that we're heading that way in Iraq. You open the morning paper and discover that they're now going to start recruiting down to level four, people with serious mental handicaps. The terrible thing is that they'll just be cannon fodder.
It's not rocket science to say that we're talking about a tragedy in the works here. Americans aren't that rich. We had a trade deficit in 2005 of $725.8 billion. That's a record. It went up almost 25% in just over a year. You can't go on not making things, fighting these kinds of wars, and building weapons that are useless. Herb Stein, when he was chairman of the council of economic advisers in a Republican administration very famously said, "Things that can't go on forever don't."
TD:: So put our problems in a nutshell.
Johnson: From George Bush's point of view, his administration has achieved everything ideologically that he wanted to achieve. Militarism has been advanced powerfully. In the minds of a great many people, the military is now the only American institution that appears to work. He's enriched the ruling classes. He's destroyed the separation of powers as thoroughly as was possible. These are the problems that face us right now. The only way you could begin to rebuild the separation of powers would be to reinvigorate the Congress and I don't know what could shock the American public into doing that. They're the only ones who could do it. The courts can't. The President obviously won't.
The only thing I can think of that might do it would be bankruptcy. Like what happened to Argentina in 2001. The richest country in Latin America became one of the poorest. It collapsed. It lost the ability to borrow money and lost control of its affairs, but a great many Argentines did think about what corrupt presidents had listened to what corrupt advice and done what stupid things during the 1990s. And right now, the country is on its way back.
TD: But superpower bankruptcy? It's a concept nobody's really explored. When the British empire finally went, we were behind them. Is there somebody behind us?
Johnson: No.
TD: So what would it mean for us to go bankrupt?. After all, we're not Argentina.
Johnson: It would mean losing control over things. All of a sudden, we would be dependent on the kindness of strangers. looking for handouts. We already have a $725 billion trade deficit; the largest fiscal deficit in our history, now well over 6% of GDP. The defense budgets are off the charts and don't make any sense, and don't forget that $500 billion we've already spent on the Iraq war -- every nickel of it borrowed from people in China and Japan who saved and invested because they would like to have access to this market. Any time they decide they don't want to lend to us, interest rates will go crazy and the stock exchange will collapse.
We pour about $2 billion a day just into servicing the amounts we borrow. The moment people quit lending us that money, we have to get it out of domestic savings and right now we have a negative savings rate in this country. To get Americans to save 20% of their income, you'd have to pay them at least a 20% interest rate and that would produce a truly howling recession. We'd be back to the state of things in the 1930s that my mother used to describe to me -- we lived in the Arizona countryside then -- when someone would tap on the rear door and say, "Have you got any work? I don't want to be paid, I just want to eat." And she'd say, "Sure, we'll find something for you to do and give you eggs and potatoes."
A depression like that would go on in this country for quite a while. The rest of the world would also have a severe recession, but would probably get over it a lot faster.
TD: So you can imagine the Chinese, Japanese, and European economies going on without us, not going down with us.
Johnson: Absolutely. I think they could.
TD: Don't you imagine, for example, that the Chinese bubble economy, the part that's based on export to the United States might collapse, setting off chaos there too?
Johnson: It might, but the Chinese would not blame their government for it. And there is no reason the Chinese economy shouldn't, in the end, run off domestic consumption. When you've got that many people interested in having better lives, they needn't depend forever on selling sweaters and pajamas in North America. The American economy is big, but there's no reason to believe it's so big the rest of the world couldn't do without us. Moreover, we're kidding ourselves because we already manufacture so little today -- except for weapons.
We could pay a terrible price for not having been more prudent. To have been stupid enough to give up on infrastructure, health care, and education in order to put 8 missiles in the ground at Fort Greeley, Alaska that can't hit anything. In fact, when tested, sometimes they don't even get out of their silos.
TD: How long do you see the dollar remaining the international currency? I noticed recently that Iran was threatening to switch to Euros.
Johnson: Yes, they're trying to create an oil bourse based on the Euro. Any number of countries might do that. Econ 1A as taught in any American university is going to tell you that a country that runs the biggest trade deficits in economic history must pay a penalty if the global system is to be brought back into equilibrium. What this would mean is a currency so depreciated no American could afford a Lexus automobile. A vacation in Italy would cost Americans a wheelbarrow full of dollars.
TD: At least it might stop the CIA from kidnapping people off the streets of Italy in the style to which they've grown accustomed.
Johnson: [Laughs.] Their kidnappers would no longer be staying in the Principe di Savoia [a five-star hotel] in Milano, that's for sure.
The high-growth economies of East Asia now hold huge amounts in American treasury certificates. If the dollar loses its value, the last person to get out of dollars loses everything, so you naturally want to be first. But the person first making the move causes everyone else to panic. So it's a very cautious, yet edgy situation.
A year ago, the head of the Korean Central Bank, which has a couple of hundred billion of our dollars, came out and said: I think we're a little heavily invested in dollars, suggesting that maybe Dubai's currency would be better right now, not to mention the Euro. Instantaneous panic. People started to sell; presidents got on the telephone asking: What in the world are you people up to? And the Koreans backed down -- and so it continues.
There are smart young American PhDs in economics today inventing theories about why this will go on forever. One is that there's a global savings glut. People have too much money and nothing to do with it, so they loan it to us. Even so, as the very considerable economics correspondent for the Nation magazine, William Greider, has written several times, it's extremely unwise for the world's largest debtor to go around insulting his bankers. We're going to send four aircraft-carrier task forces to the Pacific this summer to intimidate the Chinese, sail around, fly our airplanes, shoot off a few cruise missiles. Why shouldn't the Chinese say, let's get out of dollars. Okay, they don't want a domestic panic of their own, so the truth is they would do it as subtly as they could, causing as little fuss as possible.
What does this administration think it's doing, reducing taxes when it needs to be reducing huge deficits? As far as I can see, its policies have nothing to do with Republican or Democratic ideology, except that its opposite would be traditional, old Republican conservatism, in the sense of being fiscally responsible, not wasting our money on aircraft carriers or other nonproductive things.
But the officials of this administration are radicals. They're crazies. We all speculate on why they do it. Why has the President broken the Constitution, let the military spin virtually out of control, making it the only institution he would turn to for anything -- another Katrina disaster, a bird flu epidemic? The whole thing seems farcical, but what it does remind you of is ancient Rome.
If a bankruptcy situation doesn't shake us up, then I fear we will, as an author I admire wrote the other day, be "crying for the coup." We could end the way the Roman Republic ended. When the chaos, the instability become too great, you turn it over to a single man. After about the same length of time our republic has been in existence, the Roman Republic got itself in that hole by inadvertently, thoughtlessly acquiring an empire they didn't need and weren't able to administer, that kept them at war all the time. Ultimately, it caught up with them. I can't see how we would be immune to a Julius Caesar, to a militarist who acts the populist.
TD: Do you think that our all-volunteer military will turn out to be the janissaries of our failed empire?
Johnson: They might very well be. I'm already amazed at the degree to which they tolerate this incompetent government. I mean the officers know that their precious army, which they worked so hard to rebuild after the Vietnam War, is coming apart again, that it's going to be ever harder to get people to enlist, that even the military academies are in trouble. I don't know how long they'll take it. Tommy Franks, the general in charge of the attack on Baghdad, did say that if there were another terrorist attack in the United States comparable to 9/11, the military might have no choice but to take over. In other words: If we're going to do the work, why listen to incompetents like George Bush? Why take orders from an outdated character like Donald Rumsfeld? Why listen to a Congress in which, other than John McCain, virtually no Republican has served in the armed forces?
I don't see the obvious way out of our problems. The political system has failed. You could elect the opposition party, but it can't bring the CIA under control; it can't bring the military-industrial complex under control; it can't reinvigorate the Congress. It would be just another holding operation as conditions got worse.
Now, I'll grant you, I could be wrong. If I am, you're going to be so glad, you'll forgive me. [He laughs.] In the past, we've had clear excesses of executive power. There was Lincoln and the suspension of habeas corpus. Theodore Roosevelt virtually invented the executive order. Until then, most presidents didn't issue executive orders. Roosevelt issued well over a thousand. It was the equivalent of today's presidential signing statement. Then you go on to the mad Presbyterian Woodrow Wilson, whom the neocons are now so in love with, and Franklin Roosevelt and his pogrom against Americans of Japanese ancestry. But there was always a tendency afterwards for the pendulum to swing back, for the American public to become concerned about what had been done in its name and correct it. What's worrying me is: Can we expect a pendulum swing back this time?
TD: Maybe there is no pendulum.
Johnson: Today, Cheney tells us that presidential powers have been curtailed by the War Powers Act [of 1973], congressional oversight of the intelligence agencies, and so on. This strikes me as absurd, since these modest reforms were made to deal with the grossest violations of the Constitution in the Nixon administration. Moreover, most of them were stillborn. There's not a president yet who has acknowledged the War Powers Act as legitimate. They regard themselves as not bound by it, even though it was an act of Congress and, by our theory of government, unless openly unconstitutional, that's the bottom line. A nation of laws? No, we are not. Not anymore.
TD: Usually we believe that the Cold War ended with the Soviet Union's collapse and, in essence, our victory. A friend of mine put it another way. The United States, he suggested, was so much more powerful than the USSR that we had a greater capacity to shift our debts elsewhere. The Soviets didn't and so imploded. My question is this: Are we now seeing the delayed end of the Cold War? Perhaps both superpowers were headed for the proverbial trash bin of history, simply at different rates of speed?
Johnson: I've always believed that they went first because they were poorer and that the terrible, hubristic conclusion we drew -- that we were victorious, that we won -- was off the mark. I always felt that we both lost the Cold War for the same reasons -- imperial overstretch, excessive militarism, things that have been identified by students of empires since Babylonia. We've never given Mikhail Gorbachev credit. Most historians would say that no empire ever gave up voluntarily. The only one I can think of that tried was the Soviet Union under him.
TD: Any last words?
Johnson: I'm still working on them. My first effort was Blowback. That was well before I anticipated anything like massive terrorist attacks in the United States. It was a statement that the foreign-policy problems -- I still just saw them as that -- of the first part of the 21st century were going to be left over from the previous century, from our rapacious activities in Latin America, from our failure to truly learn the lessons of Vietnam. The Sorrows of Empire was an attempt to come to grips with our militarism. Now, I'm considering how we've managed to alienate so many rich, smart allies -- every one of them, in fact. How we've come to be so truly hated. This, in a Talleyrand sense, is the sort of mistake from which you can't recover. That's why I'm planning on calling the third volume of what I now think of as "The Blowback Trilogy," Nemesis. Nemesis was the Greek goddess of vengeance. She also went after people who became too arrogant, who were so taken with themselves that they lost all prudence. She was always portrayed as a fierce figure with a scale in one hand -- think, Judgment Day -- and a whip in the other
TD: And you believe she's coming after us?
Johnson: Oh, I believe she's arrived. I think she's sitting around waiting for her moment, the one we're coming up on right now.
Copyright 2006 Tomdispatch
Tuesday, October 26, 2010
Oregon Public Employee Pay & the Recession
Oregonian 10/24/2010
Imagine for a moment the owners of a business sitting down to hash out an emergency bailout for their firm.
Income has plummeted, and lines of credit are tapped out. Customers clamor for more services, but the cost of employees' health and retirement benefits is growing faster than the company can raise prices.
What do they do?
Many employers already have made those tough calls. But the grim scenario still awaits Oregon's next governor and the 2011 Legislature. Tax revenues are down, demand for services is up and total compensation for the average state employee is slated to grow by 15 percent over the next two years.
Raising taxes isn't on the table. Services already have been cut, and further reductions to schools, prisons and the poor will spark great debates and surgical strikes.
What hasn't been permanently cut is state employee compensation. Yes, workers sustained pay freezes and furlough days that amounted to pay cuts. All were effectively temporary measures.
As the Nov. 2 election nears, public employee pay is the elephant in the room.
Discussing the subject in detail is tough for Democrats, who derive much of their financial support from public employee unions. And while Republicans have been more forthcoming on the subject, it's not clear yet how much influence they'll wield in the process.
While a projected "decade of deficits" seems to call for fundamental changes, that prospect raises basic questions about what's fair for public employees, whether the state can continue to attract and retain good employees, and what services state government needs to provide to residents.
Gov. Ted Kulongoski's so-called Reset Cabinet report recommended limiting the increase in state employee compensation to the same level as the private sector -- about 6.5 percent over the two-year budget cycle. But that would leave the state far short of its ultimate cost cutting goal.
Compounding the problem: The state has no seat at the table when schools bargain with teacher unions, meaning its own negotiations will cover only one-third of the general fund dollars that go toward labor costs.
At a minimum, observers say budget realities should force a change in the way labor negotiators and lawmakers approach collective bargaining, which begins for state employees in December.
"The problem has been that, over the long term, management has been too timid," said Mike Greenfield, who served as Oregon Department of Administrative Services director for the last 18 months of John Kitzhaber's second term. "The union has done a very good job of representing employees. The management ... has been a weenie."
For their part, unions acknowledge that the labor cost dilemma is daunting and real. But they want to focus on fairness: The current economic crisis was largely a Wall Street creation, and their members are being scapegoated for a revenue problem that is a product of an unbalanced state tax system.
Focusing on pay cuts, the unions say, is a race to the bottom of the pay barrel. Now that private sector workers have been stripped of reasonable retirement and medical benefits, the next corporate effort is to privatize the public sector, they say.
Unlike most private sector employees, most state union workers can strike. That hasn't happened in Oregon since 1995, but union leaders say their members are willing if pushed too far.
"In the past, we have heard the benefits are a strike issue," said Heather Conroy, incoming executive director of the Service Employees International Union Local 503, which represents 18,000 state-agency employees and 4,500 university workers.
Here's a menu of potential costs cuts and some of the potential challenges:
1. Freeze cost-of-living increases. State workers usually receive increases to reflect inflation, or annual increases in prices of consumer goods. Since 1992, they've ranged from 2 to 3 percent a year, though state workers gave up such increases in eight of those years, including the past two. Freezing so-called COLAs again for two years would save the state $114 million.
State employees' base pay is already low compared to the private sector, though it still exceeds neighboring states except California. A long string of pay freezes could exacerbate the public-private imbalance, making Oregon's pay rates less competitive.
2. Freeze step increases indefinitely. Step increases are like credits for experience. Each step represents a 4.75 percent raise, and most state jobs grant nine over time, for a total salary increase of more than 40 percent from the bottom to top step. State workers view them as boosts on a salary scale promised them as part of their job offer. Critics see them as automatic raises in addition to cost-of-living adjustments.
Unions point out they've agreed to no step increases in three of the past eight years, mostly to preserve health benefits. Freezing them again would save the state about $53 million through 2013, Kulongoski's office estimates. But it would also set about two-thirds of state employees back compared to private-sector pay rates.
Even eliminating all pay increases -- steps and COLAs -- for two years would address less than half the projected 15 percent growth in labor costs, state officials say.
3. Reduce or eliminate the state's 6 percent retirement contribution. In 1979, with the state mired in a recession and double-digit inflation wreaking havoc on family budgets, state workers agreed to give up a pay increase. In return, the state agreed to pick up its employees' required 6 percent contribution to the Public Employees Retirement System.
That 6 percent contribution, called the pickup, remains today, though the contribution is now directed into an individual member account that supplements the state's regular defined benefit retirement program. It's a benefit rarely seen in the private sector -- an employer contributing 6 percent of pay to a 401(k) plan, with no matching contribution demanded from workers.
At the time, "it wasn't an easy thing to get the workers to agree to" said Ken Allen, executive director of the American Federation of State, County and Municipal Employees Council 75, which represents 6,650 state workers. "We had to really explain this was a good thing."
That pickup looms as an easy target for the next governor to extract concessions. It's not a legally required payment, and some school districts have cut it. Altering it wouldn't change the health of the pension fund, as the pickup goes into supplemental accounts. But it would be a substantial savings.
This summer, Kulongoski talked about cutting half the pickup, which would save state agencies some $134 million over two years. Lately, his office has taken a harder line.
"We're saying that should go away," said Tim Nesbitt, chief of staff for Kulongoski, who was the service employee union's lead negotiator with the state during the 1995 strike. Such a reduction would save about $260 million for state agencies and schools.
"We can't afford to have two pension plans," Nesbitt said.
4. Require workers to help pay the premiums for their medical insurance. Oregon is the only state that doesn't ask full-time workers to pay part of the health insurance premiums or deductibles for themselves or family members. Most school employees in the state do. Private-sector workers chip in 20 to 30 percent of their pay, on average, toward premiums for single and family coverage respectively, according to a 2010 U.S. Department of Labor survey. Government workers elsewhere chip in 11 to 27 percent.
Oregon public employee unions say fully paid health benefits are so important, they've taken repeated pay freezes to maintain them. AFSCME's Allen notes those benefits equate to tax-free pay.
Yet health benefits now represent one-fifth of the average state employee's compensation. Those costs are expected to increase 9 percent a year.
So far, examples put forth by Kulongoski's office call for modest employee contributions -- only 1.5 percent of salary, with offsets for healthy behaviors and employees making less than $60,000 a year. The estimated savings: only $8 million.
Union leaders and Nesbitt say other savings can be made by improving healthy behaviors, increasing costs for nonessential procedures and other tweaks to the plan. But estimates on those savings aren't clear.
5. Extend pay cuts to schools. State and university employees only account for one-third of the $7.3 billion general fund money expended on payroll. The rest goes for pay and benefits at K-12 school and community colleges around the state.
But the state doesn't control how that money is spent or have any role in the collective bargaining process.
Lawmakers will have to rely on school districts to make a chunk of their general fund cuts. One recommendation from the governor's reset report is to ensure any compensation reductions negotiated with state workers carry over to school employees, perhaps by placing conditions on the release of general fund dollars.
The problem with that scenario is that school employees have significantly different pay and benefits. Becca Uherbelau, spokeswoman for the Oregon Education Association, which represents 47,000 school employees around the state, said the majority of school employees pay out-of-pocket costs for health insurance. Moreover, employees in at least 80 districts pay their own 6 percent retirement contribution.
Oregon's average teacher salary ranks 17th nationally, according to the National Education Association. At $55,000, it sits just above the national average.
Uherbelau cited national studies concluding that teachers are underpaid relative to other workers with comparable education and experience levels. Meanwhile, she said, Oregon's teachers have consistently made concessions to help the state balance past budgets.
One-size-fits-all mandates to deal with compensation issues that differ widely by location simply won't work, she said.
"We are realistic. We recognize there's more to do, sacrifices will have to be made and shared," she said. "But we want to ensure that local school districts, leaders and teachers can make the choices that are best for their schools and their communities.
Where John Kitzhaber stands on public pay
Kitzhaber -- the union-Democratic endorsed candidate -- presided over the service employee union's last strike, a weeklong event in 1995 that shuttered DMV and other services. It came after voter-approved Measure 8 eliminated the 6 percent contribution to worker retirement accounts. State workers wanted a 6.5 percent pay hikes in its place.
It's not clear what role the strike played in resolving the dispute. The union ended the walkout a week before both sides reached an initial agreement on a phased-in 7 percent pay increase. Weeks later, a state judge ruled Measure 8 unconstitutional, and Kitzhaber and Republican legislators demanded the union renegotiate for lower pay increases.
Kitzhaber has said he'll get tough at the bargaining table this time around.
He frequently notes that the two largest employee unions supported his opponent in the primary.
"Quite frankly I think they understand this is coming," Kitzhaber said in a talk this month to the Oregon Medical Association. But he's not offered specifics on what concessions he'll seek. Kitzhaber has said the state's 6 percent retirement contribution, salary step increases, cost of living adjustments and health benefit costs will all be on the table.
His plan calls for "value-base cost sharing" of health benefits, but is not clear on whether that means state workers must contribute toward premiums. "That conversation happens around the negotiating table," spokeswoman Jillian Schoene said. Kitzhaber declined, through Schoene, to be interviewed for this story.
Where Chris Dudley stands on public pay
The Republican candidate for governor has accused Kitzhaber of being too close to unions to make hard, specific recommendations on compensation cuts. Dudley says he doesn't want to demonize state employees, or take away from their hard work, but the state faces a simple reality at the bargaining table.
"It's a tradeoff," Dudley said in an interview Friday. "Either you're keeping more employees at a lower amount, or you have fewer employees through some form of layoff. My preference is to have a shared sacrifice and keep more employees in their jobs, especially in this economic climate." That's not the way unions have typically reacted to budget cuts, preferring layoffs, which are temporary, to big pay or benefit cuts, which can be permanent.
Dudley says he'd be looking for state employees to share in paying their health insurance premiums. He has mentioned a 16 percent figure in the past, but said Friday that whatever the amount ends up being, it could kick in progressively, with higher-paid employees paying more. He also wants to explore a "cafeteria plan," where employees can choose among a variety of options, and participate in managing their own costs through a health spending account.
On PERS, he wants to eliminate some or all of the 6 percent pickup. For PERS beneficiaries who live out of state, he wants to eliminate extra benefits meant to offset the impact of state taxation. He also likes the idea of changing the system's service crediting rules so employees who work part time for years, such as legislators, can't suddenly qualify for a gold-plated pension by serving a three-year stint in a fulltime job at the end of a career.
While his experience as a labor negotiator for the NBA players union doesn't directly translate to the state's collective bargaining process, Dudley says all negotiations come down to trust, and establishing the notion that everyone is looking for a sustainable package going forward. In that light, he wants the state to put everything on the table, and keep the focus on total compensation.
"We have to get away from the idea that we're going to negotiate salary, but allow medical and retirement to run off on their own," Dudley said. "We have to bring it all under the same umbrella and try to craft the best win-win solution possible."
Imagine for a moment the owners of a business sitting down to hash out an emergency bailout for their firm.
Income has plummeted, and lines of credit are tapped out. Customers clamor for more services, but the cost of employees' health and retirement benefits is growing faster than the company can raise prices.
What do they do?
Many employers already have made those tough calls. But the grim scenario still awaits Oregon's next governor and the 2011 Legislature. Tax revenues are down, demand for services is up and total compensation for the average state employee is slated to grow by 15 percent over the next two years.
Raising taxes isn't on the table. Services already have been cut, and further reductions to schools, prisons and the poor will spark great debates and surgical strikes.
What hasn't been permanently cut is state employee compensation. Yes, workers sustained pay freezes and furlough days that amounted to pay cuts. All were effectively temporary measures.
As the Nov. 2 election nears, public employee pay is the elephant in the room.
Discussing the subject in detail is tough for Democrats, who derive much of their financial support from public employee unions. And while Republicans have been more forthcoming on the subject, it's not clear yet how much influence they'll wield in the process.
While a projected "decade of deficits" seems to call for fundamental changes, that prospect raises basic questions about what's fair for public employees, whether the state can continue to attract and retain good employees, and what services state government needs to provide to residents.
Gov. Ted Kulongoski's so-called Reset Cabinet report recommended limiting the increase in state employee compensation to the same level as the private sector -- about 6.5 percent over the two-year budget cycle. But that would leave the state far short of its ultimate cost cutting goal.
Compounding the problem: The state has no seat at the table when schools bargain with teacher unions, meaning its own negotiations will cover only one-third of the general fund dollars that go toward labor costs.
At a minimum, observers say budget realities should force a change in the way labor negotiators and lawmakers approach collective bargaining, which begins for state employees in December.
"The problem has been that, over the long term, management has been too timid," said Mike Greenfield, who served as Oregon Department of Administrative Services director for the last 18 months of John Kitzhaber's second term. "The union has done a very good job of representing employees. The management ... has been a weenie."
For their part, unions acknowledge that the labor cost dilemma is daunting and real. But they want to focus on fairness: The current economic crisis was largely a Wall Street creation, and their members are being scapegoated for a revenue problem that is a product of an unbalanced state tax system.
Focusing on pay cuts, the unions say, is a race to the bottom of the pay barrel. Now that private sector workers have been stripped of reasonable retirement and medical benefits, the next corporate effort is to privatize the public sector, they say.
Unlike most private sector employees, most state union workers can strike. That hasn't happened in Oregon since 1995, but union leaders say their members are willing if pushed too far.
"In the past, we have heard the benefits are a strike issue," said Heather Conroy, incoming executive director of the Service Employees International Union Local 503, which represents 18,000 state-agency employees and 4,500 university workers.
Here's a menu of potential costs cuts and some of the potential challenges:
1. Freeze cost-of-living increases. State workers usually receive increases to reflect inflation, or annual increases in prices of consumer goods. Since 1992, they've ranged from 2 to 3 percent a year, though state workers gave up such increases in eight of those years, including the past two. Freezing so-called COLAs again for two years would save the state $114 million.
State employees' base pay is already low compared to the private sector, though it still exceeds neighboring states except California. A long string of pay freezes could exacerbate the public-private imbalance, making Oregon's pay rates less competitive.
2. Freeze step increases indefinitely. Step increases are like credits for experience. Each step represents a 4.75 percent raise, and most state jobs grant nine over time, for a total salary increase of more than 40 percent from the bottom to top step. State workers view them as boosts on a salary scale promised them as part of their job offer. Critics see them as automatic raises in addition to cost-of-living adjustments.
Unions point out they've agreed to no step increases in three of the past eight years, mostly to preserve health benefits. Freezing them again would save the state about $53 million through 2013, Kulongoski's office estimates. But it would also set about two-thirds of state employees back compared to private-sector pay rates.
Even eliminating all pay increases -- steps and COLAs -- for two years would address less than half the projected 15 percent growth in labor costs, state officials say.
3. Reduce or eliminate the state's 6 percent retirement contribution. In 1979, with the state mired in a recession and double-digit inflation wreaking havoc on family budgets, state workers agreed to give up a pay increase. In return, the state agreed to pick up its employees' required 6 percent contribution to the Public Employees Retirement System.
That 6 percent contribution, called the pickup, remains today, though the contribution is now directed into an individual member account that supplements the state's regular defined benefit retirement program. It's a benefit rarely seen in the private sector -- an employer contributing 6 percent of pay to a 401(k) plan, with no matching contribution demanded from workers.
At the time, "it wasn't an easy thing to get the workers to agree to" said Ken Allen, executive director of the American Federation of State, County and Municipal Employees Council 75, which represents 6,650 state workers. "We had to really explain this was a good thing."
That pickup looms as an easy target for the next governor to extract concessions. It's not a legally required payment, and some school districts have cut it. Altering it wouldn't change the health of the pension fund, as the pickup goes into supplemental accounts. But it would be a substantial savings.
This summer, Kulongoski talked about cutting half the pickup, which would save state agencies some $134 million over two years. Lately, his office has taken a harder line.
"We're saying that should go away," said Tim Nesbitt, chief of staff for Kulongoski, who was the service employee union's lead negotiator with the state during the 1995 strike. Such a reduction would save about $260 million for state agencies and schools.
"We can't afford to have two pension plans," Nesbitt said.
4. Require workers to help pay the premiums for their medical insurance. Oregon is the only state that doesn't ask full-time workers to pay part of the health insurance premiums or deductibles for themselves or family members. Most school employees in the state do. Private-sector workers chip in 20 to 30 percent of their pay, on average, toward premiums for single and family coverage respectively, according to a 2010 U.S. Department of Labor survey. Government workers elsewhere chip in 11 to 27 percent.
Oregon public employee unions say fully paid health benefits are so important, they've taken repeated pay freezes to maintain them. AFSCME's Allen notes those benefits equate to tax-free pay.
Yet health benefits now represent one-fifth of the average state employee's compensation. Those costs are expected to increase 9 percent a year.
So far, examples put forth by Kulongoski's office call for modest employee contributions -- only 1.5 percent of salary, with offsets for healthy behaviors and employees making less than $60,000 a year. The estimated savings: only $8 million.
Union leaders and Nesbitt say other savings can be made by improving healthy behaviors, increasing costs for nonessential procedures and other tweaks to the plan. But estimates on those savings aren't clear.
5. Extend pay cuts to schools. State and university employees only account for one-third of the $7.3 billion general fund money expended on payroll. The rest goes for pay and benefits at K-12 school and community colleges around the state.
But the state doesn't control how that money is spent or have any role in the collective bargaining process.
Lawmakers will have to rely on school districts to make a chunk of their general fund cuts. One recommendation from the governor's reset report is to ensure any compensation reductions negotiated with state workers carry over to school employees, perhaps by placing conditions on the release of general fund dollars.
The problem with that scenario is that school employees have significantly different pay and benefits. Becca Uherbelau, spokeswoman for the Oregon Education Association, which represents 47,000 school employees around the state, said the majority of school employees pay out-of-pocket costs for health insurance. Moreover, employees in at least 80 districts pay their own 6 percent retirement contribution.
Oregon's average teacher salary ranks 17th nationally, according to the National Education Association. At $55,000, it sits just above the national average.
Uherbelau cited national studies concluding that teachers are underpaid relative to other workers with comparable education and experience levels. Meanwhile, she said, Oregon's teachers have consistently made concessions to help the state balance past budgets.
One-size-fits-all mandates to deal with compensation issues that differ widely by location simply won't work, she said.
"We are realistic. We recognize there's more to do, sacrifices will have to be made and shared," she said. "But we want to ensure that local school districts, leaders and teachers can make the choices that are best for their schools and their communities.
Where John Kitzhaber stands on public pay
Kitzhaber -- the union-Democratic endorsed candidate -- presided over the service employee union's last strike, a weeklong event in 1995 that shuttered DMV and other services. It came after voter-approved Measure 8 eliminated the 6 percent contribution to worker retirement accounts. State workers wanted a 6.5 percent pay hikes in its place.
It's not clear what role the strike played in resolving the dispute. The union ended the walkout a week before both sides reached an initial agreement on a phased-in 7 percent pay increase. Weeks later, a state judge ruled Measure 8 unconstitutional, and Kitzhaber and Republican legislators demanded the union renegotiate for lower pay increases.
Kitzhaber has said he'll get tough at the bargaining table this time around.
He frequently notes that the two largest employee unions supported his opponent in the primary.
"Quite frankly I think they understand this is coming," Kitzhaber said in a talk this month to the Oregon Medical Association. But he's not offered specifics on what concessions he'll seek. Kitzhaber has said the state's 6 percent retirement contribution, salary step increases, cost of living adjustments and health benefit costs will all be on the table.
His plan calls for "value-base cost sharing" of health benefits, but is not clear on whether that means state workers must contribute toward premiums. "That conversation happens around the negotiating table," spokeswoman Jillian Schoene said. Kitzhaber declined, through Schoene, to be interviewed for this story.
Where Chris Dudley stands on public pay
The Republican candidate for governor has accused Kitzhaber of being too close to unions to make hard, specific recommendations on compensation cuts. Dudley says he doesn't want to demonize state employees, or take away from their hard work, but the state faces a simple reality at the bargaining table.
"It's a tradeoff," Dudley said in an interview Friday. "Either you're keeping more employees at a lower amount, or you have fewer employees through some form of layoff. My preference is to have a shared sacrifice and keep more employees in their jobs, especially in this economic climate." That's not the way unions have typically reacted to budget cuts, preferring layoffs, which are temporary, to big pay or benefit cuts, which can be permanent.
Dudley says he'd be looking for state employees to share in paying their health insurance premiums. He has mentioned a 16 percent figure in the past, but said Friday that whatever the amount ends up being, it could kick in progressively, with higher-paid employees paying more. He also wants to explore a "cafeteria plan," where employees can choose among a variety of options, and participate in managing their own costs through a health spending account.
On PERS, he wants to eliminate some or all of the 6 percent pickup. For PERS beneficiaries who live out of state, he wants to eliminate extra benefits meant to offset the impact of state taxation. He also likes the idea of changing the system's service crediting rules so employees who work part time for years, such as legislators, can't suddenly qualify for a gold-plated pension by serving a three-year stint in a fulltime job at the end of a career.
While his experience as a labor negotiator for the NBA players union doesn't directly translate to the state's collective bargaining process, Dudley says all negotiations come down to trust, and establishing the notion that everyone is looking for a sustainable package going forward. In that light, he wants the state to put everything on the table, and keep the focus on total compensation.
"We have to get away from the idea that we're going to negotiate salary, but allow medical and retirement to run off on their own," Dudley said. "We have to bring it all under the same umbrella and try to craft the best win-win solution possible."
Saturday, August 21, 2010
Below is an excellent article by Bob Adelmann in The New American on the next financial crisis: state and municipal spending and pension obligations. While every politician running for office this year will declare that state spending must be "controlled," few (if any) will address the true scope problem, and even fewer will actually do something about it once in office. Whether it is the stranglehold that public employee unions have over our politicians, or the simple greed of protecting their own pet projects or livelihood, it is highly unlikely that the coming crisis will be averted. Instead, expect states to plead for increased federal assistance while concurrently cutting programs that benefit the least powerful constituents, whose complaints will be muffled by speeches decrying the overall economic despair while ignoring the disproportionate impact of the few cuts made by government. No, the most likely result won't be the difficult or responsible choice. The federal government will instead kick the can further down the road by printing additional dollars to support continued profligate spending, eventually spurring the inflationary crisis that will ultimately destroy the domestic economy.
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The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”
Marci Fritz, vice president of the California Foundation for Fiscal Responsibility, blamed the action on promises made earlier by the council to the city’s employees concerning salaries and retirement benefits that the city no longer can afford. According to Fritz, these were promises made during economically flush times, and were due to the city council’s unrealistic expectations that those times would continue indefinitely. She said, “It’s a nightmare for city governments because they have to continue to pay these benefits that were granted when they had extra money from real estate and sales tax[es].”
Vallejo, a city of 120,000 across the bay from San Francisco, faced a $9 million budget shortfall at the time, owing to soaring payroll costs for its firefighters and police officers whose pay and pension costs make up almost 80 percent of the city’s budget. Those pay packages were negotiated with the unions representing those workers, and were necessary, according to spokesmen for the city, to be competitive with surrounding towns.
In May of 2008, the council voted 7-0 to declare Chapter 9 bankruptcy to “reorganize its finances,” which meant attempting to break the promises it had made earlier to the unions through the bankruptcy court. By this time, the budget shortfall had increased from $9 million to $15 million, despite efforts to cut expenses for museums, public works, senior centers, and libraries. The bankruptcy process allows the judge to void the union contracts, which essentially forces the city workers to accept a pay package that the city can afford, in light of declining tax revenues. But city employees weren’t the only ones at risk: The city had sold tax-exempt general obligation bonds whose interest payments would also be reduced or even eliminated. With an annual budget of $80 million, the city owed $53 million to those bondholders, and another $220 million in unfunded pension and retirement health benefits, totaling more than three times the city’s annual revenues.
When Judge Michael McManus determined that labor contracts can be broken in the Chapter 9 bankruptcy, union spokesmen said this set a dangerous precedent for other cities and townships in similar trouble to “do a Vallejo.” However, because of a binding arbitration clause inserted into the city charter in 1970, unions were able to renegotiate another contract with the city and, starting in July, 2010, police officers are getting a seven-percent pay raise. New Vallejo Councilwoman Marti Brown was appalled: “No one is getting a 7 percent increase, even in cities not in bankruptcy.” This raise takes place when the city’s budget has decreased from over $80 million in 2008 to just over $63 million in 2010.
The city of Maywood, California, took a different approach to its fiscal difficulties. On July 1, 2010, everyone on the payroll was fired. The Los Angeles Times said that by laying off an estimated 100 workers and contracting the remaining essential services such as finance, rec-ords management, parks and recreation, and street maintenance to a nearby town, Maywood would save the city $165,000 a year. On July 1, “We will become a 100 percent contracted city,” said interim City Manager Angela Spaccia.
San Diego is considering bankruptcy as a result of a report by the San Diego Grand Jury that “such a step could help the city cut its onerous retirement and health benefits.” At present the city has an unfunded pension obligation of $2.2 billion and another unfunded retiree healthcare liability of $1.3 billion. And MoneyNews said that San Diego is the fifth major city in the state to consider such a move, along with Los Angeles.
The recent exposure by the Los Angeles Times of the outrageous salary and retirement benefits being provided by Bell City to its City Manager and Chief of Police confirms the attitude of entitlement and disregard for fiscal responsibility that appears to be rampant in cities across the state and the country.
Papering Over Problems
All of this is putting the state of California on the “verge of system failure,” warns Jean Ross, executive director of the California Budget Project. With an annual budget of about $125 billion, California faces a $19 billion shortfall this year, and an expected $37 billion gap next year. But that’s just the tip of the iceberg. A recent Stanford University study concluded that the state’s pension fund is short by roughly $500 billion. The study urged Governor Schwarzenegger “to inject $360 billion into its public benefit systems … [just to] have an 80 percent chance of meeting 80 percent of [the state’s] obligations over the next 16 years.”
As Agora Financial put it,
The problem, just like with the subprime [meltdown], is an irrational form of leverage. In essence, municipalities borrow current earnings of public employees in exchange for some of the most favorable retirement plans in the world. That borrowed money is invested aggressively, just like a private-sector employee would in his 401(k).
Except if the fund loses money, which they all have over the last 10 years, pension funds don’t adjust payouts. The social and political pressure to maintain the status quo — keeping our public employees comfortably retired — is just too strong. So municipalities kick the can down the road. New employees buy into the funds. Fund managers maintain their projections of endless 8 percent annual returns. Retirees keep taking out the funds they were promised … and no one pays the tab.
And it’s not just California. Orin Kramer of New Jersey’s pension program estimates a national funding gap among all the states of around $2 trillion. The Center on Budget and Policy Priorities, a Washington research institution, announced that “finances in Arizona, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June [2011].” The May/June issue of Chief Executive magazine published its annual “Best and Worst States for Business 2010” and gave its “booby” prize for worst state to California, with New York, Michigan, New Jersey, and Massachusetts rounding out the bottom five.
Hugo Tassone, a retired Yonkers, New York, policeman, recently received a lot of unwanted attention when it was revealed that when he retired three years ago, at age 44, his pension was $74,000 a year. Now 47, his pension is $101,333 a year. He is just one of over 100 retired Yonkers police officers and firefighters who are collecting more in retirement than they did while they were working. Statewide, more than 3,700 retired public workers are getting pensions of more than $100,000 a year. The problem, according to David Simpson, a spokesman for the Mayor of Yonkers, is that “once you give something, you can’t take it away.”
This fades into relative insignificance in light of Bell City, California’s problems. When City Manager Robert Rizzo’s pension kicks in, he will receive “at least $600,000 a year for the rest of his life,” according to the Los Angeles Times. This would make him the highest-paid retiree in the California Public Employees Retirement System (CalPERS). Third on that list would be Bell City’s Police Chief Randy Adams, who will receive more than $400,000 annually.
Bell City’s misfortunes will be shared with 140 other cities and districts such as Norco, La Canada, Flintridge, and Goleta because they are in the same pension “liability pool” as Bell. And there appears to be no way out. As the Times put it, “Public pensions are difficult to rescind. Courts have repeatedly upheld the [pension benefits] in favor of employees.” A slight glimmer of hope was offered by Stephen Silver, a Santa Monica attorney specializing in pension law, who said that “investigators [would have to] show that Bell’s high salaries were an unlawful expenditure of public funds.”
In June, New York’s cash crunch was so severe that Governor David Paterson said the state might have to start paying its bills with I.O.U.s, much like California did last year. The very next day, however, the New York State legislature came up with an ingenious way to kick the can: borrow from itself. By borrowing from the state’s own pension fund, the state could help close its current $9 billion budget gap, in exchange for a promise to pay back the loan starting three years from now. But don’t call it borrowing. Robert Megna, New York’s budget director, said, “We’re not borrowing. We would view it more as an extended-payment plan.” Lt. Governor Richard Ravitch challenged that characterization: “Call it what you will, it’s taking money from future budgets to help solve this year’s budget.”
Legislators in other states have promoted similar budgetary sleight of hand. One way to “fix” the pension shortfalls has been to take more risks with the invested funds in the hopes of getting higher returns. A New York Times article quoted Frederick Rose, former chairman of the Texas Pension Review Board, “In effect, they’re going to Las Vegas [to play] ‘double up to catch up.’” Naturally, the money managers disagree, saying that such strategies are merely aimed at “diversification,” which now includes investing in commodity futures, junk bonds, foreign stocks, and deeply discounted mortgage-backed securities, as well as investing on margin. In addition, some managers are betting on hedge funds to help enhance their returns. According to the Times: “The problem now is that bond rates have been low for years, and stocks have been prone to such wild swings that [the usual] 60-40 mixture of stocks and bonds is not paying 8 percent. Many public pension funds have been averaging a little more than 3 percent a year for the last decade, so they have fallen behind where their planning models say they should be.” Some states, like New Jersey, “have fallen so far behind they may never catch up again.”
Any attempt to lower the estimated or projected rate of return, however, would only exacerbate the problem because it would increase the contributions required to be made by the states. In Colorado, for instance, its $30 billion pension fund requires that the fund earn no less than 8 ½ percent annually. At present, because of much lower real returns, the plan is underfunded by nearly $18 billion. But if that projected return were adjusted downward by just one-half of one percent, the plan’s shortfall would jump to more than $21 billion, requiring the state to increase its contribution. But Colorado cannot even make the contribution currently required and has fallen several billion dollars behind, despite reducing current retirees’ cost-of-living adjustment down to 2 percent from the previous 3 ½ percent. And employees’ unions are threatening to sue to have that downward adjustment reversed.
Exacerbating the Problems
California’s problem isn’t just fiscal. Chief Executive magazine’s recent survey quoted one CEO: “Texas is pro-business with reasonable regulations, while California is anti-business with anti-business regulations.” Another respondent agreed: “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.” A third complained, “The leadership of California has done everything in its power to kill manufacturing jobs in this state. As I stated at our annual meeting, if we could grow our crops in Reno, we’d move our plants [there] tomorrow.”
Texas, on the other hand, is where 70 percent of all new U.S. jobs have been created since 2008, and has gained nearly a million new residents over the last 10 years. By comparison, California lost 1½ million residents, and New York lost even more than California. New Jersey lost so many residents that it has dropped from 10th to 11th place in population. Part of the attractiveness of the top states in the Chief Executive survey is that their budgets are relatively under control. For example, Montana Governor Brian Schweitzer said recently, “It gives us a great deal of pride that when 48 states zigged, we zagged. We were certainly not visionaries, but when times were good, we put money aside to get through the current downturn. Do we have enough money set aside to get us through this? I don’t know. I think so. I hope so, but I know this: We did a better job than 48 other states.”
Forbes magazine did a “Political Litmus Test” and discovered that the states in the worst financial condition were also heavily Democratic. Said Forbes: “The five states in the worst financial condition — Illinois, New York, Connecticut, California and New Jersey — are all among the bluest of blue states [while three of] the five most fiscally fit states — Utah, Nebraska and Texas — boast Republican majorities.” Kent Redfield, former professor at the University of Illinois, concluded that the difference “comes down to stronger unions and a larger appetite for public programs. Unions in general have more influence in Democratic-controlled states. This isn’t to say that unions are bad, but where they’re strong you have bigger demands for social services and coalitions with construction companies, road builders and others that push up debt.” Utah, according to Forbes, is the most fiscally responsible state in the union, with just $442 of debt per resident and unfunded pension obligations of $7,272 per resident. It is also the reddest state in the Union, with a 21 percentage point advantage for Republicans. And it boasts a triple-A credit rating from Moody’s. By contrast, Illinois, a blue state, has a per resident debt of $1,877 and unfunded pension liabilities of $17,230. Moody’s rates its general obligation debt second lowest in the country, just ahead of California.
Added together, 46 states face budget shortfalls this year of more than $110 billion. Dean Banker of the Center for Economic and Policy Research concludes that the states have few options: “States are going to have to cut back spending and raise taxes, the same way Greece and Spain are.” Former New Jersey Governor Christine Todd Whitman was more direct: “States don’t have a choice anymore. These problems are going to require major surgery.”
Not if the politicians themselves can avoid facing the music, however. Illinois Governor Pat Quinn recently signed legislation that would slash retirement benefits for state workers, saying, “We can’t afford to deny reality or delay action any longer.” But the New York Times exposed Quinn’s deceit: “That vaunted $300 million in immediate savings? [Quinn] produced it by giving [Illinois] credit [today] for the much smaller checks it will send to retirees many years in the future — people who must first be hired and then, for full benefits, work until age 67.” (Emphasis added.) In other words, through the magic of accounting and obfuscation, Quinn’s savings are coming from workers who haven’t even been hired yet!
Not Saying No to Constituents
The creativity of politicians trying to stay in office and avoid making hard decisions is something to behold. The city of Wichita, Kansas, will soon begin imposing a “false alarm fee” that applies to residents whose security alarms go off by accident. San Francisco has decided to charge a euthanasia tax of $25 per pet, and another $20 if residents want the city to dispose of the newly deceased pet. Residents in Washington, D.C., are now charged $51 a month to keep the streetlights on at night. Las Vegas will start taxing amateur sports, and fees will double for all youth and adult sports leagues and summer camps. Smokers in New York get to pay an additional $1.60 per pack of cigarettes, while Baltimore just passed a “beverage tax” of 2 cents per bottle, which includes water as well as soda. Probably the most notorious was New York State’s “borrowing from itself” but not calling it borrowing, just “smoothing” out the revenue stream. New Hampshire was recently ordered by the courts to “put back $110 million that it took from a medical malpractice pool [in order to] balance its budget,” according to the New York Times. Connecticut tried to revise its accounting rules to reduce the impact of its budget shortfall. Hawaii has already initiated a four-day school week. California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by April 15. And many states have attempted to balance their budgets using federal healthcare dollars that Congress has not yet even appropriated. Colorado tried unsuccessfully to raid that state’s worker’s compensation program in the amount of $500 million.
The audacity is breathtaking. According to MoneyNews, seven states that are in financial trouble continue to hire new workers. Joshua Rauh, a finance professor at Northwestern University, released a study showing that Illinois, Connecticut, Indiana, New Jersey, Hawaii, Louisiana, and Oklahoma have hired 9,700 new workers during the Great Recession. Says Bloomberg columnist Joe Mysak, “Politicians have talked a lot about layoffs during this recession. In most cases, that talk is … empty.” Politicians have an “attitude of entitlement and arrogance,” he adds.
Pension Fairies
Some despair that politicians and pensioners will continue to believe in “the pension fairy,” as Gary North put it recently. He says that “voters are poorly informed but [they are] not stupid. They know that some future group of voters will simply stop funding the pension program[s]. They know that when things get tough there will be a new Legislature, and there will be a new Governor, and these faithful politicians will do whatever is necessary to get themselves re-elected.” North compares the states’ situations to that of General Motors before the government takeover. The company’s debt was restructured [read: defaulted] which “stiffed all of the pensioners [and] stiffed all of the bondholders.... What happened to General Motors is going to happen to most pension funds in most municipal governments and most state governments … one by one, they are going to go belly up.”
Others are making “zero-sum” recommendations, such as selling digital ads on state-issued license plates; selling off state-owned properties, as was proposed in Minnesota when they suggested selling the Minneapolis-St. Paul International Airport to private businesses; or offering statewide, private vouchers for education, as was recently tried in the District of Columbia, generating some savings. Writing for the Los Angeles Times, columnist Michael Hiltzik complained about all the “corporate welfare” in which California engages. He referred to the “Hollywood” subsidy, currently $100 million annually in tax credits and “enterprise zones,” which costs the state upwards of $500 million. He further complains that “California is the only major oil-producing state that doesn’t levy a severance tax on oil taken from the ground, even though such a tax could yield billions of dollars a year.”
But all of these “raids” and “adjustments” and sleight-of-hand accounting tricks are simply nibbling at the edges of the problem. Joshua Rauh, quoted earlier, recently recalculated the pension obligations of all the states using the rules followed by bond issuers. The states’ unfunded liability is $3.23 trillion (with a T).
The reality is that with politicians’ interest in kicking the can down the road, the vested “entitlement” interests of the retirees, and belief in the “pension fairy,” bankruptcies will continue to claim victims. States are already looking to the federal government for “assistance.” If General Motors is too big to fail, what about California? And if California, why not New York? If New York, why not Illinois? The irony is, as always, the federal government has no money of its own. It’s already past the “tipping point,” and is taking on water faster every day. The future appears to many to be grim indeed.
Article originally published @ http://www.thenewamerican.com/index.php/economy/sectors-mainmenu-46/4323-conjuring-magic-to-cover-states-debts-fiscal-reality-sets-in
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The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”
Marci Fritz, vice president of the California Foundation for Fiscal Responsibility, blamed the action on promises made earlier by the council to the city’s employees concerning salaries and retirement benefits that the city no longer can afford. According to Fritz, these were promises made during economically flush times, and were due to the city council’s unrealistic expectations that those times would continue indefinitely. She said, “It’s a nightmare for city governments because they have to continue to pay these benefits that were granted when they had extra money from real estate and sales tax[es].”
Vallejo, a city of 120,000 across the bay from San Francisco, faced a $9 million budget shortfall at the time, owing to soaring payroll costs for its firefighters and police officers whose pay and pension costs make up almost 80 percent of the city’s budget. Those pay packages were negotiated with the unions representing those workers, and were necessary, according to spokesmen for the city, to be competitive with surrounding towns.
In May of 2008, the council voted 7-0 to declare Chapter 9 bankruptcy to “reorganize its finances,” which meant attempting to break the promises it had made earlier to the unions through the bankruptcy court. By this time, the budget shortfall had increased from $9 million to $15 million, despite efforts to cut expenses for museums, public works, senior centers, and libraries. The bankruptcy process allows the judge to void the union contracts, which essentially forces the city workers to accept a pay package that the city can afford, in light of declining tax revenues. But city employees weren’t the only ones at risk: The city had sold tax-exempt general obligation bonds whose interest payments would also be reduced or even eliminated. With an annual budget of $80 million, the city owed $53 million to those bondholders, and another $220 million in unfunded pension and retirement health benefits, totaling more than three times the city’s annual revenues.
When Judge Michael McManus determined that labor contracts can be broken in the Chapter 9 bankruptcy, union spokesmen said this set a dangerous precedent for other cities and townships in similar trouble to “do a Vallejo.” However, because of a binding arbitration clause inserted into the city charter in 1970, unions were able to renegotiate another contract with the city and, starting in July, 2010, police officers are getting a seven-percent pay raise. New Vallejo Councilwoman Marti Brown was appalled: “No one is getting a 7 percent increase, even in cities not in bankruptcy.” This raise takes place when the city’s budget has decreased from over $80 million in 2008 to just over $63 million in 2010.
The city of Maywood, California, took a different approach to its fiscal difficulties. On July 1, 2010, everyone on the payroll was fired. The Los Angeles Times said that by laying off an estimated 100 workers and contracting the remaining essential services such as finance, rec-ords management, parks and recreation, and street maintenance to a nearby town, Maywood would save the city $165,000 a year. On July 1, “We will become a 100 percent contracted city,” said interim City Manager Angela Spaccia.
San Diego is considering bankruptcy as a result of a report by the San Diego Grand Jury that “such a step could help the city cut its onerous retirement and health benefits.” At present the city has an unfunded pension obligation of $2.2 billion and another unfunded retiree healthcare liability of $1.3 billion. And MoneyNews said that San Diego is the fifth major city in the state to consider such a move, along with Los Angeles.
The recent exposure by the Los Angeles Times of the outrageous salary and retirement benefits being provided by Bell City to its City Manager and Chief of Police confirms the attitude of entitlement and disregard for fiscal responsibility that appears to be rampant in cities across the state and the country.
Papering Over Problems
All of this is putting the state of California on the “verge of system failure,” warns Jean Ross, executive director of the California Budget Project. With an annual budget of about $125 billion, California faces a $19 billion shortfall this year, and an expected $37 billion gap next year. But that’s just the tip of the iceberg. A recent Stanford University study concluded that the state’s pension fund is short by roughly $500 billion. The study urged Governor Schwarzenegger “to inject $360 billion into its public benefit systems … [just to] have an 80 percent chance of meeting 80 percent of [the state’s] obligations over the next 16 years.”
As Agora Financial put it,
The problem, just like with the subprime [meltdown], is an irrational form of leverage. In essence, municipalities borrow current earnings of public employees in exchange for some of the most favorable retirement plans in the world. That borrowed money is invested aggressively, just like a private-sector employee would in his 401(k).
Except if the fund loses money, which they all have over the last 10 years, pension funds don’t adjust payouts. The social and political pressure to maintain the status quo — keeping our public employees comfortably retired — is just too strong. So municipalities kick the can down the road. New employees buy into the funds. Fund managers maintain their projections of endless 8 percent annual returns. Retirees keep taking out the funds they were promised … and no one pays the tab.
And it’s not just California. Orin Kramer of New Jersey’s pension program estimates a national funding gap among all the states of around $2 trillion. The Center on Budget and Policy Priorities, a Washington research institution, announced that “finances in Arizona, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June [2011].” The May/June issue of Chief Executive magazine published its annual “Best and Worst States for Business 2010” and gave its “booby” prize for worst state to California, with New York, Michigan, New Jersey, and Massachusetts rounding out the bottom five.
Hugo Tassone, a retired Yonkers, New York, policeman, recently received a lot of unwanted attention when it was revealed that when he retired three years ago, at age 44, his pension was $74,000 a year. Now 47, his pension is $101,333 a year. He is just one of over 100 retired Yonkers police officers and firefighters who are collecting more in retirement than they did while they were working. Statewide, more than 3,700 retired public workers are getting pensions of more than $100,000 a year. The problem, according to David Simpson, a spokesman for the Mayor of Yonkers, is that “once you give something, you can’t take it away.”
This fades into relative insignificance in light of Bell City, California’s problems. When City Manager Robert Rizzo’s pension kicks in, he will receive “at least $600,000 a year for the rest of his life,” according to the Los Angeles Times. This would make him the highest-paid retiree in the California Public Employees Retirement System (CalPERS). Third on that list would be Bell City’s Police Chief Randy Adams, who will receive more than $400,000 annually.
Bell City’s misfortunes will be shared with 140 other cities and districts such as Norco, La Canada, Flintridge, and Goleta because they are in the same pension “liability pool” as Bell. And there appears to be no way out. As the Times put it, “Public pensions are difficult to rescind. Courts have repeatedly upheld the [pension benefits] in favor of employees.” A slight glimmer of hope was offered by Stephen Silver, a Santa Monica attorney specializing in pension law, who said that “investigators [would have to] show that Bell’s high salaries were an unlawful expenditure of public funds.”
In June, New York’s cash crunch was so severe that Governor David Paterson said the state might have to start paying its bills with I.O.U.s, much like California did last year. The very next day, however, the New York State legislature came up with an ingenious way to kick the can: borrow from itself. By borrowing from the state’s own pension fund, the state could help close its current $9 billion budget gap, in exchange for a promise to pay back the loan starting three years from now. But don’t call it borrowing. Robert Megna, New York’s budget director, said, “We’re not borrowing. We would view it more as an extended-payment plan.” Lt. Governor Richard Ravitch challenged that characterization: “Call it what you will, it’s taking money from future budgets to help solve this year’s budget.”
Legislators in other states have promoted similar budgetary sleight of hand. One way to “fix” the pension shortfalls has been to take more risks with the invested funds in the hopes of getting higher returns. A New York Times article quoted Frederick Rose, former chairman of the Texas Pension Review Board, “In effect, they’re going to Las Vegas [to play] ‘double up to catch up.’” Naturally, the money managers disagree, saying that such strategies are merely aimed at “diversification,” which now includes investing in commodity futures, junk bonds, foreign stocks, and deeply discounted mortgage-backed securities, as well as investing on margin. In addition, some managers are betting on hedge funds to help enhance their returns. According to the Times: “The problem now is that bond rates have been low for years, and stocks have been prone to such wild swings that [the usual] 60-40 mixture of stocks and bonds is not paying 8 percent. Many public pension funds have been averaging a little more than 3 percent a year for the last decade, so they have fallen behind where their planning models say they should be.” Some states, like New Jersey, “have fallen so far behind they may never catch up again.”
Any attempt to lower the estimated or projected rate of return, however, would only exacerbate the problem because it would increase the contributions required to be made by the states. In Colorado, for instance, its $30 billion pension fund requires that the fund earn no less than 8 ½ percent annually. At present, because of much lower real returns, the plan is underfunded by nearly $18 billion. But if that projected return were adjusted downward by just one-half of one percent, the plan’s shortfall would jump to more than $21 billion, requiring the state to increase its contribution. But Colorado cannot even make the contribution currently required and has fallen several billion dollars behind, despite reducing current retirees’ cost-of-living adjustment down to 2 percent from the previous 3 ½ percent. And employees’ unions are threatening to sue to have that downward adjustment reversed.
Exacerbating the Problems
California’s problem isn’t just fiscal. Chief Executive magazine’s recent survey quoted one CEO: “Texas is pro-business with reasonable regulations, while California is anti-business with anti-business regulations.” Another respondent agreed: “California is terrible. Even when we’ve paid their high taxes in full, they still treat every conversation as adversarial. It’s the most difficult state in the nation. We have actually walked away from business rather than deal with the government in Sacramento.” A third complained, “The leadership of California has done everything in its power to kill manufacturing jobs in this state. As I stated at our annual meeting, if we could grow our crops in Reno, we’d move our plants [there] tomorrow.”
Texas, on the other hand, is where 70 percent of all new U.S. jobs have been created since 2008, and has gained nearly a million new residents over the last 10 years. By comparison, California lost 1½ million residents, and New York lost even more than California. New Jersey lost so many residents that it has dropped from 10th to 11th place in population. Part of the attractiveness of the top states in the Chief Executive survey is that their budgets are relatively under control. For example, Montana Governor Brian Schweitzer said recently, “It gives us a great deal of pride that when 48 states zigged, we zagged. We were certainly not visionaries, but when times were good, we put money aside to get through the current downturn. Do we have enough money set aside to get us through this? I don’t know. I think so. I hope so, but I know this: We did a better job than 48 other states.”
Forbes magazine did a “Political Litmus Test” and discovered that the states in the worst financial condition were also heavily Democratic. Said Forbes: “The five states in the worst financial condition — Illinois, New York, Connecticut, California and New Jersey — are all among the bluest of blue states [while three of] the five most fiscally fit states — Utah, Nebraska and Texas — boast Republican majorities.” Kent Redfield, former professor at the University of Illinois, concluded that the difference “comes down to stronger unions and a larger appetite for public programs. Unions in general have more influence in Democratic-controlled states. This isn’t to say that unions are bad, but where they’re strong you have bigger demands for social services and coalitions with construction companies, road builders and others that push up debt.” Utah, according to Forbes, is the most fiscally responsible state in the union, with just $442 of debt per resident and unfunded pension obligations of $7,272 per resident. It is also the reddest state in the Union, with a 21 percentage point advantage for Republicans. And it boasts a triple-A credit rating from Moody’s. By contrast, Illinois, a blue state, has a per resident debt of $1,877 and unfunded pension liabilities of $17,230. Moody’s rates its general obligation debt second lowest in the country, just ahead of California.
Added together, 46 states face budget shortfalls this year of more than $110 billion. Dean Banker of the Center for Economic and Policy Research concludes that the states have few options: “States are going to have to cut back spending and raise taxes, the same way Greece and Spain are.” Former New Jersey Governor Christine Todd Whitman was more direct: “States don’t have a choice anymore. These problems are going to require major surgery.”
Not if the politicians themselves can avoid facing the music, however. Illinois Governor Pat Quinn recently signed legislation that would slash retirement benefits for state workers, saying, “We can’t afford to deny reality or delay action any longer.” But the New York Times exposed Quinn’s deceit: “That vaunted $300 million in immediate savings? [Quinn] produced it by giving [Illinois] credit [today] for the much smaller checks it will send to retirees many years in the future — people who must first be hired and then, for full benefits, work until age 67.” (Emphasis added.) In other words, through the magic of accounting and obfuscation, Quinn’s savings are coming from workers who haven’t even been hired yet!
Not Saying No to Constituents
The creativity of politicians trying to stay in office and avoid making hard decisions is something to behold. The city of Wichita, Kansas, will soon begin imposing a “false alarm fee” that applies to residents whose security alarms go off by accident. San Francisco has decided to charge a euthanasia tax of $25 per pet, and another $20 if residents want the city to dispose of the newly deceased pet. Residents in Washington, D.C., are now charged $51 a month to keep the streetlights on at night. Las Vegas will start taxing amateur sports, and fees will double for all youth and adult sports leagues and summer camps. Smokers in New York get to pay an additional $1.60 per pack of cigarettes, while Baltimore just passed a “beverage tax” of 2 cents per bottle, which includes water as well as soda. Probably the most notorious was New York State’s “borrowing from itself” but not calling it borrowing, just “smoothing” out the revenue stream. New Hampshire was recently ordered by the courts to “put back $110 million that it took from a medical malpractice pool [in order to] balance its budget,” according to the New York Times. Connecticut tried to revise its accounting rules to reduce the impact of its budget shortfall. Hawaii has already initiated a four-day school week. California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by April 15. And many states have attempted to balance their budgets using federal healthcare dollars that Congress has not yet even appropriated. Colorado tried unsuccessfully to raid that state’s worker’s compensation program in the amount of $500 million.
The audacity is breathtaking. According to MoneyNews, seven states that are in financial trouble continue to hire new workers. Joshua Rauh, a finance professor at Northwestern University, released a study showing that Illinois, Connecticut, Indiana, New Jersey, Hawaii, Louisiana, and Oklahoma have hired 9,700 new workers during the Great Recession. Says Bloomberg columnist Joe Mysak, “Politicians have talked a lot about layoffs during this recession. In most cases, that talk is … empty.” Politicians have an “attitude of entitlement and arrogance,” he adds.
Pension Fairies
Some despair that politicians and pensioners will continue to believe in “the pension fairy,” as Gary North put it recently. He says that “voters are poorly informed but [they are] not stupid. They know that some future group of voters will simply stop funding the pension program[s]. They know that when things get tough there will be a new Legislature, and there will be a new Governor, and these faithful politicians will do whatever is necessary to get themselves re-elected.” North compares the states’ situations to that of General Motors before the government takeover. The company’s debt was restructured [read: defaulted] which “stiffed all of the pensioners [and] stiffed all of the bondholders.... What happened to General Motors is going to happen to most pension funds in most municipal governments and most state governments … one by one, they are going to go belly up.”
Others are making “zero-sum” recommendations, such as selling digital ads on state-issued license plates; selling off state-owned properties, as was proposed in Minnesota when they suggested selling the Minneapolis-St. Paul International Airport to private businesses; or offering statewide, private vouchers for education, as was recently tried in the District of Columbia, generating some savings. Writing for the Los Angeles Times, columnist Michael Hiltzik complained about all the “corporate welfare” in which California engages. He referred to the “Hollywood” subsidy, currently $100 million annually in tax credits and “enterprise zones,” which costs the state upwards of $500 million. He further complains that “California is the only major oil-producing state that doesn’t levy a severance tax on oil taken from the ground, even though such a tax could yield billions of dollars a year.”
But all of these “raids” and “adjustments” and sleight-of-hand accounting tricks are simply nibbling at the edges of the problem. Joshua Rauh, quoted earlier, recently recalculated the pension obligations of all the states using the rules followed by bond issuers. The states’ unfunded liability is $3.23 trillion (with a T).
The reality is that with politicians’ interest in kicking the can down the road, the vested “entitlement” interests of the retirees, and belief in the “pension fairy,” bankruptcies will continue to claim victims. States are already looking to the federal government for “assistance.” If General Motors is too big to fail, what about California? And if California, why not New York? If New York, why not Illinois? The irony is, as always, the federal government has no money of its own. It’s already past the “tipping point,” and is taking on water faster every day. The future appears to many to be grim indeed.
Article originally published @ http://www.thenewamerican.com/index.php/economy/sectors-mainmenu-46/4323-conjuring-magic-to-cover-states-debts-fiscal-reality-sets-in
Friday, July 30, 2010
Tip of the Iceberg
The Opposites Game
All the Strangeness of Our American World in One Article
By Tom Engelhardt
Have you ever thought about just how strange this country’s version of normal truly is? Let me make my point with a single, hardly noticed Washington Post news story that’s been on my mind for a while. It represents the sort of reporting that, in our world, zips by with next to no reaction, despite the true weirdness buried in it.
The piece by Craig Whitlock appeared on June 19th and was headlined, “U.S. military criticized for purchase of Russian copters for Afghan air corps.” Maybe that’s strange enough for you right there. Russian copters? Of course, we all know, at least vaguely, that by year's end U.S. spending on its protracted Afghan war and nation-building project will be heading for $350 billion dollars. And, of course, those dollars do have to go somewhere.
Admittedly, these days in parts of the U.S., state and city governments are having a hard time finding the money just to pay teachers or the police. The Pentagon, on the other hand, hasn’t hesitated to use at least $25-27 billion to “train” and “mentor” the Afghan military and police -- and after each round of training failed to produce the expected results, to ask for even more money, and train them again. That includes the Afghan National Army Air Corps which, in the Soviet era of the 1980s, had nearly 500 aircraft and a raft of trained pilots. The last of that air force -- little used in the Taliban era -- was destroyed in the U.S. air assault and invasion of 2001. As a result, the "Afghan air force” (with about 50 helicopters and transport planes) is now something of a misnomer, since it is, in fact, the U.S. Air Force.
Still, there are a few Afghan pilots, mostly in their forties, trained long ago on Russian Mi-17 transport helicopters, and it’s on a refurbished version of these copters, Whitlock tells us, that the Pentagon has already spent $648 million. The Mi-17 was specially built for Afghanistan’s difficult flying environment back when various Islamic jihadists, some of whom we’re now fighting under the rubric of “the Taliban,” were allied with us against the Russians.
Here’s the first paragraph of Whitlock’s article: “The U.S. government is snapping up Russian-made helicopters to form the core of Afghanistan's fledgling air force, a strategy that is drawing flak from members of Congress who want to force the Afghans to fly American choppers instead.”
So, various congressional representatives are upset over the lack of a buy-American plan when it comes to the Afghan air force. That’s the story Whitlock sets out to tell, because the Pentagon has been planning to purchase dozens more of the Mi-17s over the next decade, and that, it seems, is what’s worth being upset about when perfectly good American arms manufacturers aren’t getting the contracts.
But let’s consider three aspects of Whitlock’s article that no one is likely to spend an extra moment on, even if they do capture the surpassing strangeness of the American way of war in distant lands -- and in Washington.
1. The Little Training Program That Couldn’t: There are at present an impressive 450 U.S. personnel in Afghanistan training the Afghan air force. Unfortunately, there’s a problem. There may be no “buy American” program for that air force, but there is a “speak American” one. To be an Afghan air force pilot, you must know English -- “the official language of the cockpit,” Whitlock assures us (even if to fly Russian helicopters). As he points out, however, the trainees, mostly illiterate, take two to five years simply to learn the language. (Imagine a U.S. Air Force in which, just to take off, every pilot needed to know Dari!)
Thanks to this language barrier, the U.S. can train endlessly and next to nothing is guaranteed to happen. “So far,” reports Whitlock, “only one Afghan pilot has graduated from flight school in the United States, although dozens are in the pipeline. That has forced the air corps to rely on pilots who learned to fly Mi-17s during the days of Soviet and Taliban rule.” In other words, despite the impressive Soviet performance in the 1980s, the training of the Afghan Air Force has been re-imagined by Americans as a Sisyphean undertaking.
And this offers but a hint of how bizarre U.S. training programs for the Afghan military and police have proven to be. In fact, sometimes it seems as if exactly the same scathing report, detailing the same training problems and setbacks, has been recycled yearly without anyone who mattered finding it particularly odd -- or being surprised that the response to each successive piece of bad news is to decide to pour yet more money and trainers into the project.
For example, in 2005, at a time when Washington had already spent $3.3 billion training and mentoring the Afghan army and police, the U.S. Government Accounting Office (GAO) issued a report indicating that “efforts to fully equip the increasing number of [Afghan] combat troops have fallen behind, and efforts to establish sustaining institutions, such as a logistics command, needed to support these troops have not kept pace.” Worse yet, the report fretted, it might take “up to $7.2 billion to complete [the training project] and about $600 million annually to sustain [it].”
In 2006, according to the New York Times, “a joint report by the Pentagon and the State Department... found that the American-trained police force in Afghanistan is largely incapable of carrying out routine law enforcement work, and that managers of the $1.1 billion training program cannot say how many officers are actually on duty or where thousands of trucks and other equipment issued to police units have gone.” At best, stated the report, fewer than half of the officially announced number of police were “trained and equipped to carry out their police functions.”
In 2008, by which time $16.5 billion had been spent on Army and police training programs, the GAO chimed in again, indicating that only two of 105 army units were "assessed as being fully capable of conducting their primary mission," while "no police unit is fully capable." In 2009, the U.S. Special Inspector General for Afghan Reconstruction reported that “only 24 of 559 Afghan police units are considered ready to operate without international help.” Such reports, as well as repeated (and repetitive) news investigations and stories on the subject, invariably are accompanied by a litany of complaints about corruption, indiscipline, illiteracy, drug taking, staggering desertion rates, Taliban infiltration, ghost soldiers, and a host of other problems. In 2009, however, the solution remained as expectable as the problems: “The report called for more U.S. trainers and more money.”
This June, a U.S. government audit, again from the Special Inspector General, contradicted the latest upbeat American and NATO training assessments, reporting that “the standards used to appraise the Afghan forces since 2005 were woefully inadequate, inflating their abilities.” The usual litany of training woes followed. Yet, according to Reuters, President Obama wants another $14.2 billion for the training project “for this year and next.” And just last week, the Wall Street Journal’s Julian Barnes reported that new Afghan war commander General David Petraeus is planning to “retool” U.S. strategy to include “a greater focus on how Afghanistan’s security forces are being trained.”
When it comes to U.S. training programs then, you might conclude that Afghanistan has proved to be Catch-22-ville, the land where time stood still -- and so, evidently, has the Washington national security establishment’s collective brain. For Washington, there seems to be no learning curve in Afghanistan, not when it comes to “training” Afghans anyway.
And here is the oddest thing of all, though no one even bothers to mention it in this context: the Taliban haven’t had tens of billions of dollars in foreign training funds; they haven’t had years of advice from the best U.S. and NATO advisors that money can buy; they haven’t had private contractors like DynCorp teaching them how to fight and police, and strangely enough, they seem to have no problem fighting. They are not undermanned, infiltrated by followers of Hamid Karzai, or particularly corrupt. They may be illiterate and may not be fluent in English, but they are ready, in up-to platoon-sized units, to attack heavily fortified U.S. military bases, Afghan prisons, a police headquarters, and the like with hardly a foreign mentor in sight.
Consider it, then, a modern miracle in reverse that the U.S. has proven incapable of training a competent Afghan force in a country where arms are the norm, fighting has for decades seldom stopped, and the locals are known for their war-fighting traditions. Similarly, it’s abidingly curious that the U.S. has so far failed to train a modest-sized air force, even flying refurbished Italian light transport planes from the 1980s and those Russian helicopters, when the Soviet Union, the last imperial power to try this, proved up to creating an Afghan force able to pilot aircraft ranging from helicopters to fighter planes.
2. Non-Exit strategies: Now, let’s wade a little deeper into the strangeness of what Whitlock reported by taking up the question of when we’re actually planning to leave Afghanistan. Consider this passage from the Whitlock piece: “U.S. military officials have estimated that the Afghan air force won't be able to operate independently until 2016, five years after President Obama has said he intends to start withdrawing U.S. troops from Afghanistan. But [U.S. Air Force Brig. Gen. Michael R.] Boera said that date could slip by at least two years if Congress forces the Afghans to fly U.S. choppers.”
In other words, while Americans argue over what the president’s July 2011 drawdown date really means, and while Afghan President Hamid Karzai suggests that Afghan forces will take over the country’s security duties by 2014, Whitlock’s anonymous “U.S. military officials” are clearly operating on a different clock, on, in fact, Pentagon time, and so are planning for a 2016-2018 target date for that force simply to “operate independently” (which by no means indicates “without U.S. support.”)
If you were of a conspiratorial mind, you might almost think that the Pentagon preferred not to create an effective Afghan air force and instead -- as has also been the case in Iraq, a country that once had the world’s sixth largest air force and now, after years of U.S. mentoring, has next to nothing -- remain the substitute Afghan air force forever and a day.
3. Who Are the Russians Now?: Okay, let’s move even deeper into American strangeness with a passage that makes up most of the 20th and 21st paragraphs of Whitlock’s 25-paragraph piece: “In addition,” he reports, “the U.S. Special Operations Command would like to buy a few Mi-17s of its own, so that special forces carrying out clandestine missions could cloak the fact that they are American. ‘We would like to have some to blend in and do things,’ said a senior U.S. military official, speaking on condition of anonymity to discuss the clandestine program.”
No explanation follows on just how -- or where -- those Russian helicopters will help “cloak” American Special Operations missions, or what they are to “blend” into, or the “things” they are to do. There’s no further discussion of the subject at all.
In other words, the special op urge to Russianize its air transport has officially been reported, and a month later, as far as I know, not a single congressional representative has made a fuss over it; no mainstream pundit has written a curious, questioning, or angry editorial questioning its appropriateness; and no reporter has, as yet, followed up.
As just another little factoid of no great import buried deep in an article focused on other matters, undoubtedly no one has given it a thought. But it’s worth stopping a moment and considering just how odd this tiny bit of news-that-won’t-ever-rise-to-the-level-of-news actually is. One way to do this is to play the sort of opposites game that never quite works on this still one-way planet of ours.
Just imagine a similar news item coming out of another country.
*Hot off the wires from Tehran: Iranian special forces teams are scouring the planet for old American Chinook helicopters so they can be well “cloaked” in planned future forays into Afghanistan and Pakistan’s Baluchistan Province.
*The People’s Daily reports: Chinese special forces operatives are buying relatively late model American helicopters so that... Well, here’s one problem in the opposites game, and a clue to the genuine strangeness of American activities globally: why would the Chinese need to do such a thing (and, in fact, why would we)? Where might they want to venture militarily without being mistaken for Chinese military personnel?
That might be a little hard to imagine right now, but I guarantee you one thing: had some foreign news source reported such a plan, or had Craig Whitlock somehow uncovered it and included it in a piece -- no matter how obscurely nestled -- there would have been pandemonium in Washington. Congress would have held hearings. Pundits would have opined on the infamy of Iranian or Chinese operatives masking themselves in our choppers. The company or companies that sold the helicopters would have been investigated. And you can imagine what Fox News commentators would have had to say.
When we do such things, however, and a country like Pakistan reacts with what’s usually described as “anti-Americanism,” we wonder at the nationalistic hair-trigger they’re on; we comment on their over-emotionalism; we highlight their touchy “sensibilities”; and our reporters and pundits then write empathetically about the difficulties American military and civilian officials have dealing with such edgy natives.
Just the other day, for instance, the Wall Street Journal’s Barnes reported that U.S. Special Operations Forces are expanding their role in the Pakistani tribal borderlands by more regularly “venturing out with Pakistani forces on aid projects, deepening the American role in the effort to defeat Islamist militants in Pakistani territory that has been off limits to U.S. ground troops.” The Pakistani government has not been eager to have American boots visibly on the ground in these areas, and so Barnes writes: “Because of Pakistan’s sensitivities, the U.S. role has developed slowly.”
Imagine how sensitive they might prove to be if those same forces began to land Russian helicopters in Pakistan as a way to “cloak” their operations and blend in? Or imagine just what sort of hair-trigger the natives of Montana might be on if Pakistani special operations types were roaming Glacier National Park and landing old American helicopters outside Butte.
Then consider the sensitivities of Pakistanis on learning that the just appointed head of the CIA’s National Clandestine Service turns out to be a man of “impeccable credentials” (so says CIA Director Leon Panetta). Among those credentials are his stint as the CIA station chief in Pakistan until sometime in 2009, his involvement in the exceedingly unpopular drone war in that country’s tribal borderlands, and the way, as the Director put it a tad vaguely, he “guided complex operations under some of the most difficult circumstances imaginable."
Here’s the truth of the matter, as Whitlock’s piece makes clear: we carry on in the most bizarre ways in far-off lands and think nothing of it. Historically, it has undoubtedly been the nature of imperial powers to consider every strange thing they do more or less the norm. For a waning imperial power, however, such an attitude has its own dangers. If we can’t imagine the surpassing strangeness of our arrangements for making war in lands thousands of miles from the U.S., then we can’t begin to imagine how the world sees us, which means that we’re blind to our own madness. Russian helicopters, that’s nuthin’ by comparison.
Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute's TomDispatch.com. His latest book, The American Way of War: How Bush’s Wars Became Obama’s (Haymarket Books), has just been published. You can catch him discussing it on a TomCast video by clicking here.
[Note for readers: On the folly of American training programs for the Afghanistan Army, TomDispatch had an on-the-spot report that still shouldn’t be missed, Ann Jones’s September 20, 2009, piece “Meet the Afghan Army, Is It a Figment of Washington’s Imagination?”]
All the Strangeness of Our American World in One Article
By Tom Engelhardt
Have you ever thought about just how strange this country’s version of normal truly is? Let me make my point with a single, hardly noticed Washington Post news story that’s been on my mind for a while. It represents the sort of reporting that, in our world, zips by with next to no reaction, despite the true weirdness buried in it.
The piece by Craig Whitlock appeared on June 19th and was headlined, “U.S. military criticized for purchase of Russian copters for Afghan air corps.” Maybe that’s strange enough for you right there. Russian copters? Of course, we all know, at least vaguely, that by year's end U.S. spending on its protracted Afghan war and nation-building project will be heading for $350 billion dollars. And, of course, those dollars do have to go somewhere.
Admittedly, these days in parts of the U.S., state and city governments are having a hard time finding the money just to pay teachers or the police. The Pentagon, on the other hand, hasn’t hesitated to use at least $25-27 billion to “train” and “mentor” the Afghan military and police -- and after each round of training failed to produce the expected results, to ask for even more money, and train them again. That includes the Afghan National Army Air Corps which, in the Soviet era of the 1980s, had nearly 500 aircraft and a raft of trained pilots. The last of that air force -- little used in the Taliban era -- was destroyed in the U.S. air assault and invasion of 2001. As a result, the "Afghan air force” (with about 50 helicopters and transport planes) is now something of a misnomer, since it is, in fact, the U.S. Air Force.
Still, there are a few Afghan pilots, mostly in their forties, trained long ago on Russian Mi-17 transport helicopters, and it’s on a refurbished version of these copters, Whitlock tells us, that the Pentagon has already spent $648 million. The Mi-17 was specially built for Afghanistan’s difficult flying environment back when various Islamic jihadists, some of whom we’re now fighting under the rubric of “the Taliban,” were allied with us against the Russians.
Here’s the first paragraph of Whitlock’s article: “The U.S. government is snapping up Russian-made helicopters to form the core of Afghanistan's fledgling air force, a strategy that is drawing flak from members of Congress who want to force the Afghans to fly American choppers instead.”
So, various congressional representatives are upset over the lack of a buy-American plan when it comes to the Afghan air force. That’s the story Whitlock sets out to tell, because the Pentagon has been planning to purchase dozens more of the Mi-17s over the next decade, and that, it seems, is what’s worth being upset about when perfectly good American arms manufacturers aren’t getting the contracts.
But let’s consider three aspects of Whitlock’s article that no one is likely to spend an extra moment on, even if they do capture the surpassing strangeness of the American way of war in distant lands -- and in Washington.
1. The Little Training Program That Couldn’t: There are at present an impressive 450 U.S. personnel in Afghanistan training the Afghan air force. Unfortunately, there’s a problem. There may be no “buy American” program for that air force, but there is a “speak American” one. To be an Afghan air force pilot, you must know English -- “the official language of the cockpit,” Whitlock assures us (even if to fly Russian helicopters). As he points out, however, the trainees, mostly illiterate, take two to five years simply to learn the language. (Imagine a U.S. Air Force in which, just to take off, every pilot needed to know Dari!)
Thanks to this language barrier, the U.S. can train endlessly and next to nothing is guaranteed to happen. “So far,” reports Whitlock, “only one Afghan pilot has graduated from flight school in the United States, although dozens are in the pipeline. That has forced the air corps to rely on pilots who learned to fly Mi-17s during the days of Soviet and Taliban rule.” In other words, despite the impressive Soviet performance in the 1980s, the training of the Afghan Air Force has been re-imagined by Americans as a Sisyphean undertaking.
And this offers but a hint of how bizarre U.S. training programs for the Afghan military and police have proven to be. In fact, sometimes it seems as if exactly the same scathing report, detailing the same training problems and setbacks, has been recycled yearly without anyone who mattered finding it particularly odd -- or being surprised that the response to each successive piece of bad news is to decide to pour yet more money and trainers into the project.
For example, in 2005, at a time when Washington had already spent $3.3 billion training and mentoring the Afghan army and police, the U.S. Government Accounting Office (GAO) issued a report indicating that “efforts to fully equip the increasing number of [Afghan] combat troops have fallen behind, and efforts to establish sustaining institutions, such as a logistics command, needed to support these troops have not kept pace.” Worse yet, the report fretted, it might take “up to $7.2 billion to complete [the training project] and about $600 million annually to sustain [it].”
In 2006, according to the New York Times, “a joint report by the Pentagon and the State Department... found that the American-trained police force in Afghanistan is largely incapable of carrying out routine law enforcement work, and that managers of the $1.1 billion training program cannot say how many officers are actually on duty or where thousands of trucks and other equipment issued to police units have gone.” At best, stated the report, fewer than half of the officially announced number of police were “trained and equipped to carry out their police functions.”
In 2008, by which time $16.5 billion had been spent on Army and police training programs, the GAO chimed in again, indicating that only two of 105 army units were "assessed as being fully capable of conducting their primary mission," while "no police unit is fully capable." In 2009, the U.S. Special Inspector General for Afghan Reconstruction reported that “only 24 of 559 Afghan police units are considered ready to operate without international help.” Such reports, as well as repeated (and repetitive) news investigations and stories on the subject, invariably are accompanied by a litany of complaints about corruption, indiscipline, illiteracy, drug taking, staggering desertion rates, Taliban infiltration, ghost soldiers, and a host of other problems. In 2009, however, the solution remained as expectable as the problems: “The report called for more U.S. trainers and more money.”
This June, a U.S. government audit, again from the Special Inspector General, contradicted the latest upbeat American and NATO training assessments, reporting that “the standards used to appraise the Afghan forces since 2005 were woefully inadequate, inflating their abilities.” The usual litany of training woes followed. Yet, according to Reuters, President Obama wants another $14.2 billion for the training project “for this year and next.” And just last week, the Wall Street Journal’s Julian Barnes reported that new Afghan war commander General David Petraeus is planning to “retool” U.S. strategy to include “a greater focus on how Afghanistan’s security forces are being trained.”
When it comes to U.S. training programs then, you might conclude that Afghanistan has proved to be Catch-22-ville, the land where time stood still -- and so, evidently, has the Washington national security establishment’s collective brain. For Washington, there seems to be no learning curve in Afghanistan, not when it comes to “training” Afghans anyway.
And here is the oddest thing of all, though no one even bothers to mention it in this context: the Taliban haven’t had tens of billions of dollars in foreign training funds; they haven’t had years of advice from the best U.S. and NATO advisors that money can buy; they haven’t had private contractors like DynCorp teaching them how to fight and police, and strangely enough, they seem to have no problem fighting. They are not undermanned, infiltrated by followers of Hamid Karzai, or particularly corrupt. They may be illiterate and may not be fluent in English, but they are ready, in up-to platoon-sized units, to attack heavily fortified U.S. military bases, Afghan prisons, a police headquarters, and the like with hardly a foreign mentor in sight.
Consider it, then, a modern miracle in reverse that the U.S. has proven incapable of training a competent Afghan force in a country where arms are the norm, fighting has for decades seldom stopped, and the locals are known for their war-fighting traditions. Similarly, it’s abidingly curious that the U.S. has so far failed to train a modest-sized air force, even flying refurbished Italian light transport planes from the 1980s and those Russian helicopters, when the Soviet Union, the last imperial power to try this, proved up to creating an Afghan force able to pilot aircraft ranging from helicopters to fighter planes.
2. Non-Exit strategies: Now, let’s wade a little deeper into the strangeness of what Whitlock reported by taking up the question of when we’re actually planning to leave Afghanistan. Consider this passage from the Whitlock piece: “U.S. military officials have estimated that the Afghan air force won't be able to operate independently until 2016, five years after President Obama has said he intends to start withdrawing U.S. troops from Afghanistan. But [U.S. Air Force Brig. Gen. Michael R.] Boera said that date could slip by at least two years if Congress forces the Afghans to fly U.S. choppers.”
In other words, while Americans argue over what the president’s July 2011 drawdown date really means, and while Afghan President Hamid Karzai suggests that Afghan forces will take over the country’s security duties by 2014, Whitlock’s anonymous “U.S. military officials” are clearly operating on a different clock, on, in fact, Pentagon time, and so are planning for a 2016-2018 target date for that force simply to “operate independently” (which by no means indicates “without U.S. support.”)
If you were of a conspiratorial mind, you might almost think that the Pentagon preferred not to create an effective Afghan air force and instead -- as has also been the case in Iraq, a country that once had the world’s sixth largest air force and now, after years of U.S. mentoring, has next to nothing -- remain the substitute Afghan air force forever and a day.
3. Who Are the Russians Now?: Okay, let’s move even deeper into American strangeness with a passage that makes up most of the 20th and 21st paragraphs of Whitlock’s 25-paragraph piece: “In addition,” he reports, “the U.S. Special Operations Command would like to buy a few Mi-17s of its own, so that special forces carrying out clandestine missions could cloak the fact that they are American. ‘We would like to have some to blend in and do things,’ said a senior U.S. military official, speaking on condition of anonymity to discuss the clandestine program.”
No explanation follows on just how -- or where -- those Russian helicopters will help “cloak” American Special Operations missions, or what they are to “blend” into, or the “things” they are to do. There’s no further discussion of the subject at all.
In other words, the special op urge to Russianize its air transport has officially been reported, and a month later, as far as I know, not a single congressional representative has made a fuss over it; no mainstream pundit has written a curious, questioning, or angry editorial questioning its appropriateness; and no reporter has, as yet, followed up.
As just another little factoid of no great import buried deep in an article focused on other matters, undoubtedly no one has given it a thought. But it’s worth stopping a moment and considering just how odd this tiny bit of news-that-won’t-ever-rise-to-the-level-of-news actually is. One way to do this is to play the sort of opposites game that never quite works on this still one-way planet of ours.
Just imagine a similar news item coming out of another country.
*Hot off the wires from Tehran: Iranian special forces teams are scouring the planet for old American Chinook helicopters so they can be well “cloaked” in planned future forays into Afghanistan and Pakistan’s Baluchistan Province.
*The People’s Daily reports: Chinese special forces operatives are buying relatively late model American helicopters so that... Well, here’s one problem in the opposites game, and a clue to the genuine strangeness of American activities globally: why would the Chinese need to do such a thing (and, in fact, why would we)? Where might they want to venture militarily without being mistaken for Chinese military personnel?
That might be a little hard to imagine right now, but I guarantee you one thing: had some foreign news source reported such a plan, or had Craig Whitlock somehow uncovered it and included it in a piece -- no matter how obscurely nestled -- there would have been pandemonium in Washington. Congress would have held hearings. Pundits would have opined on the infamy of Iranian or Chinese operatives masking themselves in our choppers. The company or companies that sold the helicopters would have been investigated. And you can imagine what Fox News commentators would have had to say.
When we do such things, however, and a country like Pakistan reacts with what’s usually described as “anti-Americanism,” we wonder at the nationalistic hair-trigger they’re on; we comment on their over-emotionalism; we highlight their touchy “sensibilities”; and our reporters and pundits then write empathetically about the difficulties American military and civilian officials have dealing with such edgy natives.
Just the other day, for instance, the Wall Street Journal’s Barnes reported that U.S. Special Operations Forces are expanding their role in the Pakistani tribal borderlands by more regularly “venturing out with Pakistani forces on aid projects, deepening the American role in the effort to defeat Islamist militants in Pakistani territory that has been off limits to U.S. ground troops.” The Pakistani government has not been eager to have American boots visibly on the ground in these areas, and so Barnes writes: “Because of Pakistan’s sensitivities, the U.S. role has developed slowly.”
Imagine how sensitive they might prove to be if those same forces began to land Russian helicopters in Pakistan as a way to “cloak” their operations and blend in? Or imagine just what sort of hair-trigger the natives of Montana might be on if Pakistani special operations types were roaming Glacier National Park and landing old American helicopters outside Butte.
Then consider the sensitivities of Pakistanis on learning that the just appointed head of the CIA’s National Clandestine Service turns out to be a man of “impeccable credentials” (so says CIA Director Leon Panetta). Among those credentials are his stint as the CIA station chief in Pakistan until sometime in 2009, his involvement in the exceedingly unpopular drone war in that country’s tribal borderlands, and the way, as the Director put it a tad vaguely, he “guided complex operations under some of the most difficult circumstances imaginable."
Here’s the truth of the matter, as Whitlock’s piece makes clear: we carry on in the most bizarre ways in far-off lands and think nothing of it. Historically, it has undoubtedly been the nature of imperial powers to consider every strange thing they do more or less the norm. For a waning imperial power, however, such an attitude has its own dangers. If we can’t imagine the surpassing strangeness of our arrangements for making war in lands thousands of miles from the U.S., then we can’t begin to imagine how the world sees us, which means that we’re blind to our own madness. Russian helicopters, that’s nuthin’ by comparison.
Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute's TomDispatch.com. His latest book, The American Way of War: How Bush’s Wars Became Obama’s (Haymarket Books), has just been published. You can catch him discussing it on a TomCast video by clicking here.
[Note for readers: On the folly of American training programs for the Afghanistan Army, TomDispatch had an on-the-spot report that still shouldn’t be missed, Ann Jones’s September 20, 2009, piece “Meet the Afghan Army, Is It a Figment of Washington’s Imagination?”]
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