01/23/2014 archive

The alleged recovery from the recession that began in 2008 has done wonders for the wealthiest of the world.

The Rich Get Richer Through the Recovery

By Annie Lowry, The New York Times

The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.

High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the most affluent Americans, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers. [..]

More generally, richer households have disproportionately benefited from the boom in the stock market during the recovery, with the Dow Jones industrial average more than doubling in value since it bottomed out early in 2009. About half of households hold stock, directly or through vehicles like pension accounts. But the richest 10 percent of households own about 90 percent of the stock, expanding both their net worth and their incomes when they cash out or receive dividends.

The economy remains depressed for most wage-earning families. With sustained, relatively high rates of unemployment, businesses are under no pressure to raise their employees’ incomes because both workers and employers know that many people without jobs would be willing to work for less. The share of Americans working or looking for work is at its lowest in 35 years.

Three years ago during the height of the Occupy Wall Street movement, the Congressional Budget Office issued a report based on information from the IRS and US Census Bureau that over the last forty years the top 1% has nearly quadrupled:

– The top 1 percent made $165,000 or more in 1979; that jumped to $347,000 or more in 2007, the study said.  [..]

– The top 20 percent of the population earned 53 percent of after-tax income in 2007, as opposed to 43 percent in 1979.

– The top 1 percent reaped a 17 percent share of all income, up from 8 percent in 1979.

– The bottom 20 percent reaped just 5 percent of after-tax income, versus 7 percent in 1979.

This is exacerbated by the fact that hourly wages have stagnated while the biggest banks are even bigger than they were before the collapse thanks to policies of the government and the Federal Reserve.

The wealth gap is not an isolated problem, according to a report by the NGO, Oxfam, it’s global with just 85 people possessing owning half the world’s wealth

Almost half of the world’s wealth is now owned by just one percent of the population, and seven out of ten people live in countries where economic inequality has increased in the last 30 years. The World Economic Forum has identified economic inequality as a major risk to human progress, impacting social stability within countries and threatening security on a global scale.

This massive concentration of economic resources in the hands of fewer people presents a real threat to inclusive political and economic systems, and compounds other inequalities – such as those between women and men. Left unchecked, political institutions are undermined and governments overwhelmingly serve the interests of economic elites – to the detriment of ordinary people.

Eighty of the those billionaires are meeting this week in Davos, Switzerland for the World Economic Forum, where the wealth disparity has finally become a concern:

As billionaires bet on accelerating growth and rising asset prices, income inequality is emerging as a key theme for this week’s annual meeting. A study released last week by the forum identified the income gap as the most probable menace to the global economy during the next decade. Wealth disparity — driven by globalization and the recent financial crisis — threatens to breed poverty and social disorder, it said.

Next Tuesday, President Barack Obama will give his State of the Union Address where he will outline the ideas he has for closing this gap that has gotten bigger since he was elected. Perhaps, as Huffungton Post’s Howard Fineman suggests, that the president find governing role models other than Ronald Reagan whose policies have brought the US economy into its New Gilded Age.

Shell’s Arctic drilling set back by US court ruling

Terry Macalister, The Guardian

Thursday 23 January 2014 07.34 EST

Shell’s hopes of drilling in Arctic waters off Alaska this summer faced a serious setback when a US federal court ruled that the full range of environmental risks had not been assessed by the government.

The 9th circuit court of appeals ruled in favour of green groups and Native Alaskan tribes which want Shell and its partners to call off their exploration programme for fear of an oil spill.

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Greenpeace said the court case was a “massive blow to Shell’s Arctic ambitions” and capped a miserable first few weeks in office for Shell’s new boss.

John Sauven, executive director of Greenpeace UK, added: “The court decision means the USA interior department has to go back to the drawing board before it can reissue any new licence to Shell. This is a massive blow to Shell’s Arctic ambitions. Shell had already lost the case for Arctic drilling in the court of public opinion – today they have lost the case in a court of law as well.”

Judges say Arctic offshore lease sale was flawed

By Dan Joling, Associated Press

January 22, 2014

A federal appeals court Wednesday ruled in favor of environmental groups that claimed the federal government conducted a flawed environmental review before selling $2.7 billion in petroleum leases off Alaska’s northwest coast in 2008.

A three-member panel of the 9th Circuit Court of Appeals ruled in a split decision that the Minerals Management Service, now the Bureau of Ocean Energy Management, prepared an environmental assessment for a sale in the Chukchi Sea based on minimal development – just 1 billion barrels of oil.

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“President Obama now has the chance to do right by the Arctic and the planet by keeping oil drilling out of the Chukchi Sea,” said Earthjustice attorney Eric Grafe, who represented the groups, in a prepared statement. “It makes no sense to open up the fragile, irreplaceable, and already melting Arctic Ocean to risky drilling for dirty oil that will only exacerbate climate change already wreaking havoc on the Arctic and elsewhere.

Federal court deals latest blow to Arctic oil drilling

By Joel Connelly, Seattle Post Intelligencer

Posted on January 22, 2014

The case was remanded back to U.S. District Judge Ralph Bestline in Alaska.  Bestline has already once before, in 2010, held up Arctic exploration because of flaws and inadequate evaluations of environmental risks.

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Shell launched its Chukchi drilling in the summer of 2012.  Just about everything that could go wrong DID go wrong.

Drilling ships were late in arriving from the “lower 48.”  The spill-containment barge, being prepared in Bellingham, failed its tests.  The drilling ship Noble Discoverer lost its moorings and nearly went ashore on Unalaska Island in the Aleutians.

Last but not least, the conical drilling ship Kulluk – which had been re-equipped at great cost – broke loose from its moorings and ran aground on New Year’s Eve on an island in the Gulf of Alaska.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Dean Baker: The Damage From the Housing Bubble: How Much Did the Greenspan-Rubin Gang Cost Us?

Eduardo Porter asks how much the housing bubble and its collapse cost us in his column today. (He actually asks about the financial crisis, but this was secondary. The damage was caused by the loss of demand driven by bubble wealth in a context where we had nothing to replace it.) Porter throws out some estimates from different sources, but there are some fairly straightforward ways to get some numbers from authoritative sources. [..]

If we really want to have fun, we can sum the shortfall over the infinite horizon, an accounting technique that is gaining popularity among those advocating cuts to Social Security and Medicare. The loss over the infinite horizon due to the Greenspan-Rubin bubble would be over $140 trillion, or more than $400,000 for every man, woman, and child in the country.

Obviously these numbers are very speculative but the basic story is very simple. If you want to have a big political battle in Washington, start yelling about people freeloading on food stamps, but if you actually care about where the real money is, look at the massive wreckage being done by the Wall Street boys and incompetent policy makers in Washington.

Juan Cole: Bill Gates Worries Pakistan Violence Blocks Polio Eradication, but Is CIA Partly to Blame?

The Bill and Melinda Gates Foundation has done an amazing job in targeting diseases for eradication, and the world is very close to getting rid of polio altogether, in part because the Gateses in recent years have given their support to the effort, which began in 1988. Cases have fallen 99% since then.

Bill Gates worried yesterday in an interview with AFP, however, that violence in Pakistan and Nigeria would interfere with the goal of wiping the disease out by 2018. [..]

Unfortunately, as the Scientific American explains, the problem of Taliban violence against vaccination workers in Pakistan was exacerbated by the US Central Intelligence Agency, which in its search for Usama Bin Laden in the northern Pakistani city of Abbotabad used agents falsely pretending to be vaccinating against Hepatitis B. The ploy failed, but news of it reached the Taliban. [..]

At a time when the US is grappling with all the dirty tricks played by the National Security Agency with regard to electronic surveillance, it is important to remember that unethical operatives have sometimes acted in rash and foolhardy ways that have produced more harm than good.

Bill Gates is perfectly correct that Taliban violence in Pakistan, which often targets non-combatants, is evil. But the evil has been compounded by unwise false flag tradecraft on the part of out of control operatives who were working for the executive branch of the US government.

Watchdog Report Says N.S.A. Program Is Illegal and Should End

By CHARLIE SAVAGE, The New York Times

JAN. 23, 2014

The program “lacks a viable legal foundation under Section 215, implicates constitutional concerns under the First and Fourth Amendments, raises serious threats to privacy and civil liberties as a policy matter, and has shown only limited value,” the report said. “As a result, the board recommends that the government end the program.”

While a majority of the five-member board embraced that conclusion, two members dissented from the view that the program was illegal. But the panel was united in 10 other recommendations, including deleting raw phone records after three years instead of five and tightening access to search results.

The report also sheds light on the history of the once-secret bulk collection program. It contains the first official acknowledgment that the Foreign Intelligence Surveillance Court produced no judicial opinion detailing its legal rationale for the program until last August, even though it had been issuing orders to phone companies for the records and to the N.S.A. for how it could handle them since May 2006.

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“It may have been a laudable goal for the executive branch to bring this program under the supervision” of the court, the report says. “Ultimately, however, that effort represents an unsustainable attempt to shoehorn a pre-existing surveillance program into the text of a statute with which it is not compatible.”

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The report also scrutinizes in detail a handful of investigations in which the program was used, finding “no instance in which the program directly contributed to the discovery of a previously unknown terrorist plot or the disruption of a terrorist attack.”

Still, in her dissent, Ms. Cook criticized judging the program’s worth based only on whether it had stopped an attack to date. It also has value as a tool that can allow investigators to “triage” threats and provide “peace of mind” if it uncovers no domestic links to a newly discovered terrorism suspect, she wrote.

NSA’s mass phone data collection is illegal, says government privacy board

Spencer Ackerman, The Guardian

Thursday 23 January 2014 08.35 EST

The US government’s privacy board has sharply rebuked President Barack Obama over the National Security Agency’s mass collection of American phone data, saying the program defended by Obama last week was illegal and ought to be shut down.

The Privacy and Civil Liberties Oversight Board (PCLOB), an independent and long-troubled liberties advocate in the executive branch, is to issue a report on Thursday afternoon that concludes the NSA’s collection of every US phone record on a daily basis violates the legal restrictions of the statute cited to authorize it, section 215 of the Patriot Act.

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The PCLOB, which briefed Obama on its findings before his speech last week, reportedly recommends instead that the bulk collection ought to be ended outright, owing to its assessed lack of necessity and dubious legality.

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Two of the board members, Rachel L Brand and Elisebeth Collins Cook, both lawyers in the George W Bush-era Justice Department, dissented on the finding that the bulk phone data collection was illegal.

The three other members – chairman David Medine, retired federal judge Patricia Wald, and civil liberties advocate James X. Dempsey – rejected the government’s argument, reaffirmed for years by a secret surveillance court, that the mass phone records collection was justified under a section of the Patriot Act that permits the government to amass records “relevant” to a terrorism inquiry.

“The approach boils down to the proposition that essentially all telephone records are relevant to essentially all international terrorism investigations,” the three-member majority is reported to have found.

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The PCLOB is not finished with its assessment of NSA surveillance. It plans in the coming weeks to issue another report evaluating the NSA’s collection of bulk foreign Internet communications, which have included those with Americans “incidentally” collected.

Independent review board says NSA phone data program is illegal and should end

By Ellen Nakashima, Washington Post

Thursday, January 23, 8:29 AM

“We have not identified a single instance involving a threat to the United States in which the telephone records program made a concrete difference in the outcome of a counterterrorism investigation,” said the report, a copy of which was obtained by The Washington Post. “Moreover, we are aware of no instance in which the program directly contributed to the discovery of a previously unknown terrorist plot or the disruption of a terrorist attack.”

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(T)he board found that it is impossible that all the records collected – billions daily – could be relevant to a single investigation “without redefining that word in a manner that is circular, unlimited in scope.” Moreover, instead of compelling phone companies to turn over records already in their possession, the program requires them to furnish newly generated call data on a daily basis. “This is an approach lacking foundation in the statute,” the report said.

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The report concluded that the NSA collection raises “constitutional concerns” with regard to U.S. citizens’ rights of speech, association and privacy. “The connections revealed by the extensive database of telephone records gathered under the program will necessarily include relationships established among individuals and groups for political, religious, and other expressive purposes,” it said. “Compelled disclosure to the government of information revealing these associations can have a chilling effect on the exercise of First Amendment rights.”

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In its assessment of the program’s value, the board scrutinized 12 terrorism cases cited by the intelligence community that involved information obtained through the Section 215 program. Even in cases where the data related to contacts of a known terrorism suspect, in nearly all of them the benefits were minimal–“generally limited to corroborating information that was obtained independently by the FBI,” the report said.

The board rejected the contention made by officials from Obama on down that the program was necessary to address a gap arising from a failure to detect an al Qaeda terrorist in the United States, Khalid al-Mihdhar, prior to the 2001 attacks. Mihdhar was in phone contact with a safehouse in Yemen, and though the NSA had intercepted the calls, it did not realize at the time that Mihdhar was calling from San Diego.

“The failure to identify Mihdhar’s presence in the United States stemmed primarily from a lack of information sharing among federal agencies, not of a lack of surveillance capabilities,” the report said, noting that in early 2000 the CIA knew Mihdhar had a visa enabling him to enter the United States but did not advise the FBI or watchlist him. “…This was a failure to connect the dots, not a failure to connect enough dots.”

Second, the report said, the government need not have collected the entire nation’s calling records to identify the San Diego number from which Mihdhar made his calls. It asserted that the government could have used existing legal authorities to request from U.S. phone companies the records of any calls made to or from the Yemen number. “Doing so could have identified the San Diego number on the other end of the calls,” though, it noted, the speed of the carriers’ responses likely would vary.

The board also stated that the program played no role in disrupting the 2009 plot to bomb the New York City subway. That case is often cited in discussions of the program’s utility.

“The Board believes that the Section 215 program has contributed only minimal value in combating terrorism beyond what the government already achieves through these and other alternative means,” the report said. “Cessation of the program would eliminate the privacy and civil liberties concerns associated with bulk collection without unduly hampering the government’s efforts, while ensuring that any governmental requests for telephone calling records are tailored to the needs of specific investigations.”

NSA’s Spying on Phone Calls Illegal: U.S. Privacy Board

By Margaret Talev and Chris Strohm, Bloomberg News

2014-01-23 13:55:31

The bombshell nature of the report’s central conclusion may explain why Obama, after meeting with the board on its planned recommendations weeks ago, decided to announce his proposals on Jan. 17. Obama defended U.S. electronic spying as a bulwark against terrorism. He proposed changing aspects of the phone metadata program, which may require Congress to sort out details such as whether the government, the phone companies or an unidentified third party should retain the data.

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Obama had deferred decisions regarding the NSA’s Internet data collection to Congress and a new panel expected to be appointed.

Members of the privacy board briefed Obama on their planned recommendations ahead of his Jan. 17 announcement. The recommendations from the bipartisan, independent agency housed in the executive branch also follows a December report by a separate, independent review panel appointed by the president.

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Obama said he would require judicial review of requests to query phone call databases and ordered the Justice Department and intelligence officials to devise a way to take storage of that data out of the government’s hands.

He left other steps to limit surveillance up to a divided Congress, meaning that other changes may be months away if they are adopted at all.

Obama gave Attorney General Eric Holder and intelligence officials 60 days to develop a plan for storing bulk telephone records outside of government custody, one of the most contentious issues arising from Snowden’s disclosures.

Phone companies, such as Verizon and AT&T, have resisted being required to retain telephone metadata for the government because of the potential cost and legal exposure. An entity to take on that role doesn’t yet exist. The administration plans to deliver a proposal on data storage to Congress by the end of March.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 23 is the 23rd day of the year in the Gregorian calendar. There are 342 days remaining until the end of the year (343 in leap years).

On this day in 1849, Elizabeth Blackwell is granted a medical degree from Geneva College in New York, becoming the first female to be officially recognized as a physician in U.S. history.

Blackwell, born in Bristol, England, came to the United States in her youth and attended the medical faculty of Geneva College, now known as Hobart College. In 1849, she graduated with the highest grades in her class and was granted an M.D.

Banned from practice in most hospitals, she was advised to go to Paris, France and train at La Maternite, but had to continue her training as a student midwife, not a physician. While she was there, her training was cut short when in November, 1849 she caught a serious right eye infection, purulent ophthalmia, from a baby she was treating. She had to have her right eye removed and replaced with a glass eye. This loss brought to an end her hopes to become a surgeon.

In 1853 Blackwell along with her sister Emily and Dr. Marie Zakrzewska, founded their own infirmary, the New York Infirmary for Indigent Women and Children, in a single room dispensary near Tompkins Square in Manhattan. During the American Civil War, Blackwell trained many women to be nurses and sent them to the Union Army. Many women were interested and received training at this time. After the war, Blackwell had time, in 1868, to establish a Women’s Medical College at the Infirmary to train women, physicians, and doctors.

In 1857, Blackwell returned to England where she attended Bedford College for Women for one year. In 1858, under a clause in the 1858 Medical Act that recognized doctors with foreign degrees practising in Britain before 1858, she was able to become the first woman to have her name entered on the General Medical Council’s medical register (1 January 1859).

In 1869, she left her sister Emily in charge of the college and returned to England. There, with Florence Nightingale, she opened the Women’s Medical College. Blackwell taught at London School of Medicine for Women, which she had co-founded, and accepted a chair in gynecology. She retired a year later.

During her retirement, Blackwell still maintained her interest in the women’s rights movement by writing lectures on the importance of education. Blackwell is credited with opening the first training school for nurses in the United States in 1873. She also published books about diseases and proper hygiene.

She was an early outspoken opponent of circumcision and in 1894 said that “Parents, should be warned that this ugly mutilation of their children involves serious danger, both to their physical and moral health.” She was a proponent of women’s rights and pro-life.

February 11 is The Day We Fight Back Against Mass Surveillance

DEAR USERS OF THE INTERNET,

In January 2012 we defeated the SOPA and PIPA censorship legislation with the largest Internet protest in history. A year ago this month one of that movement’s leaders, Aaron Swartz, tragically passed away.

Today we face a different threat, one that undermines the Internet, and the notion that any of us live in a genuinely free society: mass surveillance.

If Aaron were alive, he’d be on the front lines, fighting against a world in which governments observe, collect, and analyze our every digital action.

Now, on the anniversary of Aaron’s passing, and in celebration of the win against SOPA and PIPA that he helped make possible, we are planning a day of protest against mass surveillance, to take place this February 11th.

One year ago this month, the young Internet freedom activist and groundbreaking programmer Aaron Swartz took his own life. Swartz died shortly before he was set to go to trial for downloading millions of academic articles from servers at the Massachusetts Institute of Technology based on the belief that the articles should be freely available online. At the time he committed suicide, Swartz was facing 35 years in prison, a penalty supporters called excessively harsh. Today we spend the hour looking at the new documentary, “The Internet’s Own Boy: The Story of Aaron Swartz.” We play excerpts of the film and speak with Swartz’s father Robert, his brother Noah, his lawyer Elliot Peters, and filmmaker Brian Knappenberger.

Aaron Swartz: The Life We Lost and the Day We Fight Back

Amy Goodman, Truthdig

A year after Internet freedom activist Aaron Swartz’s suicide at the age of 26, a film about this remarkable young man has premiered at the Sundance Film Festival. The film, titled “The Internet’s Own Boy: The Story of Aaron Swartz,” directed by Brian Knappenberger, follows the sadly short arc of Aaron’s life. He committed suicide while under the crushing weight of unbending, zealous federal prosecutors, who had Aaron snatched off the street near the Massachusetts Institute of Technology, accusing him of computer crimes.

At the age of 14, Aaron helped develop RSS, “Really Simple Syndication,” which changed how people get online content. He co-founded one of the Internet’s most popular websites, Reddit. In the year before his death, he helped defeat a notorious bill before Congress, the Stop Online Piracy Act (SOPA), which would have granted corporations sweeping powers of censorship over the Internet. Now, another fight for the freedom of the Internet has begun. This one will have to be waged without Aaron.

A coalition of Internet activists, technologists and policy experts are joining together on Feb. 11 for “The Day We Fight Back.” As they say on their website, reflecting on the victory against SOPA, “Today we face a different threat, one that undermines the Internet, and the notion that any of us live in a genuinely free society: mass surveillance. If Aaron were alive, he’d be on the front lines, fighting against a world in which governments observe, collect, and analyze our every digital action.” Before Edward Snowden made “NSA” and “mass surveillance” household terms, Aaron was speaking out against the National Security Agency’s bulk collection programs. His brother, Noah Swartz, told me, “I think Aaron’s message that we can all take with us is that … we can see the change we want to see in the world by participating, rather than feeling helpless and useless.”