Thursday, January 22, 2015

Capitalism and the global plutocracy

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The international charity Oxfam has issued a new report on social inequality showing that the gap between the super-rich and the majority of society is not only not shrinking—it is growing at an ever-faster pace.
In 2013, according to updated figures, the 92 richest multi-billionaires had as much wealth as the bottom 50 percent of society. In 2014, this figure dropped to 80 billionaires. In other words, a group of people who can fit into a double-decker bus control more wealth than 3.5 billion people, equivalent to the combined populations of China, India, the United States and the European Union.
Inequality is growing at such a rapid pace that the richest 1 percent will control more wealth than the bottom 99 percent of society by next year. It is in fact quite possible that, on a global scale, society has never been so unequal through thousands of years of human history as it is today.
Oxfam timed the release of its report to coincide with the opening of the World Economic Forum in Davos, Switzerland, which will be attended by some 2,500 billionaires, corporate executives, heads of state and their various hangers-on.
Oxfam Director Winnie Byanyima has been invited to co-chair the event, and the organization said in a statement that she will “use her position to call for urgent action to stem the rising tide of inequality.”
Byanyima will be directing her appeal, ironically enough, to the largest annual gathering of the global plutocracy whose enrichment the report decries. Many of the hundred or so billionaires—and countless hundreds of multi-millionaires—in attendance, have seen their wealth double over the past five years. Meanwhile, as the report demonstrates, the wealth of the poorest half of the world’s population was lower in 2014 than it was in 2009.
Over the past year, a series of public figures, from US Treasury Secretary turned multi-millionaire Hedge Fund manager Lawrence Summers, to International Monetary Fund Managing Director Christine Lagarde, to US President Barack Obama and Bill Gates, the world’s richest man, have publicly voiced their concerns over the growth of inequality.
The enormous chasm between the super-rich and the vast majority of the population, the working class, is the undeniable defining feature of life throughout the world. There is a concern among some of those responsible for this state of affairs that capitalism is, as Marx and Engels put it, producing its own gravediggers in the form of an increasingly restive and hostile working class.
Yet conspicuously absent from any of these statements is any consideration of the class and political dynamics that gave rise to the growing gap between the rich and the majority of society. These commentators all proceed as though the growth of social inequality were merely the product of impartial processes, outside of the actions of governments and social classes.
In fact, the unending accumulation of wealth by the super-rich is the product of the single-minded policy of the ruling class since the 2008 financial crisis, itself resulting from the criminal activities of the financial elite. The US government alone has funneled nearly $7 trillion into the financial system, which was used to prop up over $30 trillion in financial assets. Central banks throughout the world followed suit.
Global corporations used the mass unemployment arising from the economic downturn to slash wages and impose speedups on their workers, while governments around the world used the economic crisis as an opportunity to impose deep austerity measures.
Nearly seven years after the collapse of Lehman Brothers, the policies undertaken in the aftermath of the crash are leading to a new stage in the global crisis. The Chinese stock market bubble, which minted dozens of new billionaires this year, appears to be collapsing, having suffered its biggest loss since 2008 on Monday. Europe is in deflation, and analysts predict the Russian economy will shrink five percent this year.
On Monday, the International Monetary Fund downgraded its estimate for economic growth this year. And yet the only response the ruling class has to the crisis of its system is to funnel even more cash into the coffers of the rich. “Monetary policy must… stay accommodative,” it declared, “including through other means if policy rates cannot be reduced further,” a veiled reference to quantitative easing programs.
Parasitism is the social cloth from which the global plutocracy is cut. It makes its wealth not through production, but through cheating, speculation and plunder. They use their immense resources to dominate political life, and pursue policies aimed at their own enrichment and aggrandizement at the expense of the great mass of mankind.
The global plutocracy is a cancer on the human race. In the relentless defense of its own wealth and the capitalist profit system upon which this wealth rests, the ruling classes of the world have brought humanity to the brink of ruin. The major imperialist powers are engaged in a re-division of the world. Over the past year, the danger of world war, one hundred years after the First World War, emerged as a clear and present danger.
The response of the plutocracy to the growth of social tensions is not reform, but repression. Massive intelligence, police and military apparatuses have been erected, directed ever more openly at the population at home. The noxious political ideologies of the last century—fascism, chauvinism, authoritarianism—are being resurrected again, to be turned against any challenge to the domination of wealth.
It is hopelessly naive to believe that any of the great problems confronting society can be resolved without breaking the stranglehold of the financial oligarchy. Their ill-begotten wealth must be expropriated; the corporations they control must be nationalized under the democratic control of the working class, to be run in the interest of social needs, not private gain.

Obama’s State of Delusion

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The delusional character of Obama’s State of the Union address on Tuesday—presenting an America of rising living standards and a booming economy, capped by his declaration that the “shadow of crisis has passed”—is perhaps matched only in its presentation by the media and supporters of the Democratic Party.
The general tone was set by the New York Times in its lead editorial on Wednesday, which described the speech as a “simple, dramatic message about economic fairness, about the fact that the well-off—the top earners, the big banks, Silicon Valley—have done just great, while middle and working classes remain dead in the water.”
The attempt to present Obama’s remarks as a clarion call to combat social inequality runs first of all into the inconvenient fact that the individual supposedly making this call has been the head of state for the past six years. The Times writes as if the policies of the Obama administration—the multitrillion-dollar bailout for the banks, the coordinated assault on wages, relentless cuts to social programs and the social counterrevolution in health care known as Obamacare—have nothing to do with the record levels of social inequality that prevail in the United States.
The Times quotes Obama’s question delivered toward the beginning of the speech: “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes an effort?”
Anyone listening to the speech with even a passing knowledge of the record of his presidency would immediately respond that, for Obama and for the entire political establishment that he heads, the answer is clearly the former.
As for the proposals themselves—including tuition assistance for community colleges, tax credits for child care and college education, an increase in the minimum wage and paid maternity leave—they consist of insincere and paltry measures, tailored to the interests of big business, that no one, least of all Obama, expects will pass.
The Times itself acknowledges, “Mr. Obama knows his prospects of getting Congress to agree are less than zero.” White House officials freely admitted ahead of the State of the Union that Obama had no expectations that the measures he proposed would be taken up on Capitol Hill. “We will not be limited by what will pass this Congress, because that would be a very boring two years,” White House senior adviser Dan Pfeiffer told the press before the speech.
Previous State of the Union speeches have produced similar wish lists aimed at generating illusions that Obama sought to advance a “progressive” agenda, proposals dropped as soon as the president completed the obligatory tour of photo-ops and speeches at college campuses.
In his 2014 State of the Union, Obama called for ending tax loopholes for corporations that ship jobs overseas, investing tens of billions in infrastructure projects to create jobs, making pre-kindergarten available to every four-year-old child, regardless of family income, and enacting equal pay for women. Instead, one million people were cut off food stamps, long-term unemployment remained stubbornly high, poverty increased, and wages stagnated.
On the other hand, every major initiative by Obama in domestic policy—the 2009 stimulus program, the 2010 health care reform legislation, the 2010 financial regulatory overhaul, countless budget deals with the congressional Republicans, right up to the executive order on immigration issued a month ago—was dictated by the needs of corporate America, and, in many cases, drafted by corporate lobbyists.
The consequences for working people—record long-term unemployment, a tidal wave of home foreclosures, the slashing of wages in basic industry, the steady decline in living standards over all—were not accidental. They were the deliberate goal of government policy, for both Democrats and Republicans, because mass suffering by the working class was required to obtain the resources needed to bail out the financial aristocracy.
The main purpose of Obama’s remarks was to give the various publications and organizations that orbit the Democratic Party—the Times, the Nationmagazine (whose columnist John Nichols described the spech as a “serious effort to address income inequality”), the trade unions, and the network of pseudo-left organizations that present themselves as “socialist”—fodder for promoting the Democrats in the 2016 elections.
Thus, Obama’s speech was peppered with references aimed at the upper-middle class practitioners of various forms of identity politics (Time magazine, for example, enthused that Obama “made history Tuesday night” by the inclusion in his speech of one word: “transgender”).
Here is how to paint the Democratic Party in progressive colors, he was telling them. Here is how the Democratic Party will seek to fool the American people as it collaborates with the Republicans in enacting ever more right-wing policies over the next two years, combined with endless war abroad and the assault on democratic rights.
The delusions, self-delusions and lies of Obama and his supporters cannot, however, alter the underlying reality of American political life: the unbridgeable gulf between the entire state apparatus and the vast majority of the population. It is notable that Obama’s speech, delivered less than three months after the midterm elections, made no reference to the debacle that the Democratic Party suffered at the polls—due primarily to the collapse in voter turnout produced by six years of right-wing policies from the “candidate of change.”
Perhaps the most striking delusion of all is the belief by the ruling class and its representatives that it can, through a few honeyed and lying phrases, forestall the tidal wave of social opposition that is on the horizon.

Here's why Standard & Poor's mortgage bond fraud is so shocking

SEC: S&P lied about mortgage bond ratings

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The charges being leveled against Standard & Poor’s ratings criteria for commercial-mortgage backed securities this morning brings to mind memories of the false comforts during the latest housing boom.

That’s right, those cozy moments in 2005 when bond investors thought everything was going great — after all, they had these triple-A ratings telling them so.

We know how that story ended, or rather unfolded, as we still feel the sting of those poor decisions made by the credit ratings agency, even today.

And so enters the Securities and Exchange Commission with this gem:

"SEC announces charges against Standard & Poor’s for fraudulent ratings misconduct"
Ladies and gentlemen, it’s been some time since the mortgage bond world felt shaken to the core. But shaken, right now, it feels, according to several conversations I’ve had on the subject this morning.

“They lied,” one source told me about the SEC charge that S&P “published a false and misleading article purporting to show that its new credit enhancement levels [for CMBS ratings] could withstand Great Depression-era levels of economic stress."

As a result, the SEC banned S&P from rating similar deals for a year. S&P agreed to pay more than $58 million to settle the SEC’s charges, plus an additional fines to three attorneys general. The fines cover the false ratings of six conduit fusion CMBS transactions in 2011.

“The question remains, did they also do this for residential mortgage bonds?” the source asked.

The answer, sadly, is probably yes. 

And, these residential mortgage bond deals fit squarely in the bailiwick of HousingWire:
"A third SEC order issued in this case involved internal controls failures in S&P’s surveillance of residential mortgage-backed securities ratings. The order finds that S&P allowed breakdowns in the way it conducted ratings surveillance of previously-rated RMBS from October 2012 to June 2014. 
S&P changed an important assumption in a way that made S&P’s ratings less conservative, and was inconsistent with the specific assumptions set forth in S&P’s published criteria describing its ratings methodology. 
S&P did not follow its internal policies for making changes to its surveillance criteria and instead applied ad hoc workarounds that were not fully disclosed to investors."
S&P claims the inaccurate descriptions are being corrected and publicly retracted the false and misleading information.

S&P neither admits nor denies the claims, of course, and for once I think that is a bad call.
My reporters covered these deals, and also trusted in S&P’s ratings criteria.

It may be awhile before that trust gets restored.

So what’s the impact on the market? It’s good and bad.
This is from a Barclays note to clients this morning:
"In the conduit space, S&P only rated 5.6% of the market in 2014, and all of these bonds were also rated by either Fitch or Moody’s. With the small market share, the new issue market is likely to be unaffected by the loss of S&P in 2015."
Whew. The impact on the market is thankfully muted.

Wait. The bonds were also rated by Fitch and Moody’s. If those two credit ratings agencies also awarded the bonds similar ratings, then what does that say about the ratings criteria of all Nationally Recognized Statistical Rating Organizations?

Presumably, the ratings were similar and did not raise any alarm bells. It wasn't until the author of the S&P CMBS report complained to the SEC that the work was being used as a "sales pitch" to drum up more CMBS business for S&P that anyone stopped to take note.
That's what is completly and utterly shocking about this morning's announcement.

Today's news highlights that we must continue to take ratings for what they are: a supplemental risk-measurement tool — not a replacement for internal investor due diligence.

How Propaganda Conquers Democracy

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Do we live in a country where citizens are critically informed on the issues of the day by media that operate independently of the government? Or do our political leaders deliberately plant a false view of events and issues in the mind of the public that complicit media then broadcast and amplify to generate public consent for government policy?

This is a basic test of democracy for the citizens of any country. But the very nature of modern propaganda systems is that they masquerade as independent while functioning as the opposite, so the question is not as straightforward as it seems.

In Democracy Incorporated; Managed Democracy and the Specter of Inverted Totalitarianism, political scientist Sheldon Wolin examined how America’s “managed democracy” has devolved into “inverted totalitarianism,” concentrating power and wealth in the hands of a small ruling class more efficiently and sustainably than 20th Century “classical totalitarianism” ever succeeded in doing.

Instead of sweeping away the structures of constitutional government like the Fascists, Nazis or Soviets, this “political coming-of-age of corporate power” has more cleverly preserved and co-opted nominally democratic institutions and adapted them to its own purposes.

Self-serving politicians and parties compete for funding in election campaigns run by the advertising industry, to give political investors the most corrupt President, administration and Congress that money can buy, while courts uphold new corporate and plutocratic political rights to ward off challenges to the closed circle of wealth and political power.

Oligarchic corporate control of the media is a critical element in this dystopian system. Under the genius of inverted totalitarianism, a confluence of corrupt interests has built a more effective and durable propaganda system than direct government control has ever achieved.

The editor or media executive who amplifies government and corporate propaganda and suppresses alternative narratives is not generally doing so on orders from the government, but in the interest of his own career, his company’s success in the corporate oligarchy or “marketplace,” and his responsibility not to provide a platform for radical or “irrelevant” ideas.

In this context, a common pattern in five recent cases illustrates how the U.S. government and media systematically deceive the public on critical foreign policy issues, to generate public hostility toward foreign governments and to suppress domestic opposition to economic sanctions and to the threat and use of military force.

1. Non-Existent WMDs in Iraq. This is the case we all know about. U.S. officials made claims they knew were false when they made them, and the media faithfully and uncritically amplified them to make the case for war. The result was the destruction of Iraq in a war based on lies. At meetings in 2001, according to Treasury Secretary Paul O’Neill, CIA Director George Tenet consistently told the National Security Council (NSC) that that the CIA had no “confirming intelligence” that Iraq possessed nuclear, chemical or biological weapons.

When Defense Secretary Donald Rumsfeld laid out the Pentagon’s plans to invade Iraq, Tenet reiterated that it was still only speculation that Iraq possessed weapons of mass destruction. Eying the junior staffers in the room, Rumsfeld replied, “I’m not sure everyone here has clearance to hear this.”

Senior officials knew their case for war was weak and unsubstantiated, but they treated the weakness of their case as a closely guarded state secret to be kept from the public, up to and including staffers at NSC meetings. They set up the Office of Special Plans at the Pentagon to “stovepipe” unvetted intelligence directly to senior officials to bolster the case for war, bypassing the review process that is supposed to filter intelligence for accuracy and reliability.

As the head of MI6 told the British cabinet in July 2002, “the intelligence and the facts were being fixed around the policy.” Chief UN weapons inspector Scott Ritter revealed how MI6 planted unsubstantiated stories in newspapers around the world to make the case for war. In June 2002, the CIA-backed Iraqi National Congress revealed that its “Information Collection Program” was the primary source for 108 media reports on Iraq’s WMDs and links to terrorism over the past eight months.

In July 2002, Ritter told CNN, “No one has substantiated the allegations that Iraq possesses weapons of mass destruction,” but CNN enthusiastically – and profitably – joined the rush to war.

When Congress debated the 2002 Iraq war resolution, the administration gave members a 25-page document it advertised as a summary of a new National Intelligence Estimate (NIE) on Iraq. The document was pure propaganda, produced months before the NIE, and included false claims that were nowhere to be found in the NIE, such as that the CIA knew the location of 550 sites in Iraq where chemical and biological agents were stored.

Sen. Bob Graham, D-Florida, chair of the Senate Intelligence Committee, begged his colleagues to instead read the classified NIE, dramatically warning them, “Blood is going to be on your hands.” Only six Senators and a handful of Representatives did so, but the media clung to the propaganda narrative that the White House and Congress had seen “the same intelligence.”

In his 2003 State of the Union speech, President George W. Bush cited gaps in Iraq’s accounting for weapons it destroyed in 1991 as a continuing threat, from 25,000 liters of anthrax to 500 tons of Sarin, VX nerve agent and mustard gas. Of all these, only mustard gas would have still been potent 12 years later – if it had existed.

Bush pretended that 81-mm aluminum rocket casings were tubes for centrifuges, a claim already dismissed by the International Atomic Energy Agency, and that Iraq was buying uranium in Nigerbased on a forgery that the IAEA spotted within hours. But Bush’s deceptive fear-mongering was uncritically embraced and amplified by the U.S. media.

Secretary of State Colin Powell’s presentation to the UN Security Council in February 2003 contained at least a dozen categorical but false statements about Iraqi weapons, based on recordings and photographs deliberately misinterpreted by the Iraqi National Congress and CIA agents. Security Council members were unconvinced, but the U.S. media uniformly andenthusiastically endorsed Powell’s “slam-dunk” case for war.

Fairness and Accuracy in Reporting (FAIR) found that U.S. media coverage was unashamedly pro-war during the critical weeks leading up to the invasion, with only three anti-war voices among 393 “expert” interviews on major TV networks. A total of 76 percent of interviewees were present or former government officials, of whom only 6 percent were critical of the case for war, even as a CBS poll found that 61 percent of the public wanted to “wait and give the United Nations and weapons inspectors more time.”

The election of President Barack Obama was a chance for the U.S. to make a clean break from the destructive and deceptive policies of the Bush administration. But the U.S. propaganda system has instead evolved to embrace even more sophisticated techniques of branding and image-making, not least to build a deep sense of trust into the iconic image of a hip celebrity-in-chief with roots in African-American and modern urban culture.

The contrast between image and reality, so essential to Obama’s role, represents a new achievement in managed democracy, enabling him to maintain and expand policies that are the polar opposite of the change his supporters thought they were voting for.

2. Non-Existent WMDs in Iran. Incredibly, after their exposure and embarrassment over Iraq, the U.S. government and media didn’t skip a beat but immediately recycled their WMD narrative to justify a similar campaign of sanctions and threats against Iran.

We are finally on a more promising diplomatic trajectory, but it is still taboo for U.S. politicians or media to admit that Iran has almost certainly never had a nuclear weapons program, and the U.S. propaganda narrative still insists that a decade of brutal economic warfare has played a constructive role to “bring Iran to the table.” Nothing could be farther from the truth.

A 2012 study by the International Crisis Group found that ever-tightening sanctions had “almost no chance of producing an Iranian climb-down any time soon,” and could end up leading to war, not offering an alternative to it – just as in Iraq.

As Iranian Foreign Minister Mohammad Zarif remarked in November 2014, “The effect of sanctions can be seen in how many centrifuges are spinning in Iran. When we began the sanctions process, Iran had less than 200 centrifuges. Today it has over 20,000.” Zarif also reiterated Iran’s long-standing position that, “Nuclear weapons don’t serve our strategic interests and are against the core principles of our faith.”

Trita Parsi (president of the National Iranian American Council), Mohammed ElBaradei (former IAEA director-general), and Gareth Porter (an award-winning investigative reporter/historian) have each written enlightening books that demolish critical elements of the U.S. propaganda campaign against Iran:

In A Single Roll of the Dice: Obama’s Diplomacy With Iran, Trita Parsi explained that Obama’s “dual-track approach”, combining negotiations with sanctions, was a political compromise to appease doves and hawks in Washington. But this was a prescription for failure in the real world, because the two tracks were incompatible and the sanctions track gave the hardliners on both sides the upper hand.

After Brazil and Turkey persuaded Iran to agree to a comprehensive proposal offered by the U.S. only months earlier, the U.S. rejected its own plan because it would undermine its efforts to pass new sanctions in the UN Security Council. A senior State Department official told Parsi that the main obstacle to resolving the crisis was the U.S. inability to take “Yes” for an answer.

In The Age of Deception: Nuclear Diplomacy in Treacherous Times, ElBaradei recounted how the CIA and other Western intelligence agencies kept providing the IAEA with supposed “evidence” of an Iranian nuclear weapons program, but, just as in Iraq, there was nothing there to find.

Despite the “Key Lessons” of UNMOVIC’s final report on Iraq that UN inspection agencies should not be used “to support other agendas or to keep the inspected party in a permanent state of weakness,” nor be given the impossible political task of “proving the negative,” ElBaradei found himself back in exactly that position, even as the IAEA was already fulfilling its legitimate task of monitoring all Iran’s nuclear material and facilities.

Gareth Porter has maybe done more than anyone to expose the bankruptcy of the U.S. propaganda narrative on Iran. In Manufactured Crisis: the Untold Story of the Iran Nuclear Scare, he explained how this entire campaign has been based on falsehoods and fabrications for two decades.

There is no real evidence that Iran has ever taken the first step toward weaponizing its civilian nuclear program, and each suggestion that it has is based on sloppy analysis poisoned by mistrust and false assumptions, or in some cases on evidence actually fabricated by Iran’s enemies, like the infamous “laptop documents” that were most likely supplied by the Mujahedeen-e-Kalq (MEK).

And yet mainstream media reports in the U.S. still parrot the false premises of an unjust campaign of economic warfare that has devastated Iran’s economy and the lives of its people, to say nothing of cyber-warfare, the assassinations of four innocent Iranian scientists, and threats of war.

In the U.S. media narrative, we are still the “good guys,” and the Iranians are still the “bad guys” who can’t be trusted. But, of course, that’s the whole point. The underlying purpose of campaigns like this is to frame U.S. disputes with other countries in Manichean terms to justify brutally unfair and dangerous policies.

3. Sarin Attack at Ghouta in Syria. Hundreds of Syrian civilians were killed by a missile filled with about 60 kg of the nerve agent Sarin on Aug. 21, 2013. U.S. officials immediately blamed the Syrian Army and President Bashar Al-Assad.  President Obama was soon ready to launch a massive assault on Syria’s air defenses and other targets, a major escalation of the covert, proxy war he had beenwaging since 2011.

Three weeks after the Sarin attack, Obama declared in a televised speech, “Assad’s government gassed to death over a thousand people… we know the Assad regime was responsible.” Following reports by UN investigators and investigative journalists with good access to U.S. military and intelligence sources, it now seems almost certain that the chemical attack was conducted by Jabhat Al-Nusra (al-Qaeda’s affiliate in Syria) or other rebel forces, with help from either Turkish or Qatari military intelligence.

The missile was fired from a rebel-held area 2 km from its point of impact, only a fraction of the distance to the Syrian military base from where U.S. officials claimed it was fired, and the chemical impurities in the Sarin suggest that it was improvised, not military-grade.

The question of motive suggests that this was a rebel “false-flag” attack that almost succeeded in drawing the U.S. deeper into the war, acting as the air force of Al-Nusra and its allies. On the other side, there is no plausible reason why the Syrian government could have expected to gain by conducting such an attack (especially since UN inspectors had just arrived in Damascus to begin a study of another chemical attack that had been blamed on the rebels).

The “Who Attacked Ghouta?” web site is a good effort to bring together and analyze all the evidence, and both Seymour Hersh and Robert Parry have written good articles based on U.S. intelligence sources. But U.S. officials and media pundits still talk as if their dangerous and irresponsible charges are beyond question.

Their assertions are so well established in the U.S. media that they have effectively become part of American popular culture. When Americans think of President Assad, they think “gassed his own people.”

When we examine the words and actions of President Obama, Secretary Kerry and other U.S. officials, only one thing is certain: that their expressions of certainty regarding responsibility for the chemical attack were false, both then and now. Like Bush, Cheney, Rumsfeld and Powell, they simply lied when they told the world that the intelligence pointed only in one direction.

As in other cases, this was a deliberate propaganda strategy to so strongly establish a false narrative in the mind of the public that it would be hard to dislodge, even once evidence emerged that it was probably just plain wrong.

As we watch this strategy play out in each of these cases, we can see that Iraq was the exception that proved the rule, the case where U.S. propagandists were caught out and embarrassed before the American public and the whole world. But this has not stopped them or their successors from doubling down on the same propaganda strategy, nor has its exposure in Iraq rendered it ineffective as a means of misleading the public in other cases.

4. Who shot down Malaysian Airlines MH17? President Vladimir Putin is the latest foreign leader to be targeted by a classic U.S. vilification campaign.

Since the State Department and CIA engineered a violent coup in Ukraine that literally tore that country apart, U.S. politicians and media have marched in lockstep to pretend that the crisis was caused, not by the U.S.-backed overthrow of the elected government, but by Russia’s subsequent reintegration of the Crimea based on a popular referendum.

Almost 5,000 people (with some estimates even higher) have been killed as the Western-backed government that seized power in Kiev has dispatched its Army and new National Guard units to attack cities in Eastern Ukraine. It recruited some of them, like the Azov Brigade, from the neo-NaziSvoboda and Right Sektor militias who provided the muscle for the coup in February.

The Russian-speaking people in the eastern Ukraine expect no mercy or justice from these anti-Russian Ukrainian nationalists, so they fight on despite heavy losses and dire conditions, with limited support from Russia. Like the chemical weapons attack in Syria, U.S. officials and mediaimmediately blamed the shoot-down of Malaysia Airlines MH-17 on U.S. enemies and claimed once again that the evidence pointed only in one direction. But once again, the only thing that is sure is that they can’t be sure of that.

A Dutch team is leading an investigation, as each side accuses the other of responsibility. Concerns about the impartiality of the investigation have led to calls for a fully independent investigation, including a public online petition. U.S. officials and media claim that the airliner was shot down by a Russian surface-to-air missile fired by Ukrainian rebels.

An alternative narrative is that it was shot down by one of two Ukrainian fighter planes that were reported to be tailing it. The cockpit appears to be riddled with bullet-holes, but these might have been caused by shrapnel from an exploding missile.  But the only forces known to have deployed such missiles in the area were Ukrainian government forces, so the Western narrative remains doubtful at best.

Even if the rebels captured and fired a Ukrainian missile, there is no evidence of Russian involvement. Yet the U.S. used Russia’s presumed guilt to trigger new U.S. and European Union sanctions against Russia, taking the world ever closer to the “new Cold War” that Mikhail Gorbachev warned of recently in Berlin.

The petition for an independent inquiry reads, “With the U.S. and Russia in possession of 15,000 of the world’s 16,400 nuclear weapons, humanity can ill-afford to stand by and permit these conflicting views of history and opposing assessments of the facts on the ground to lead to a 21st century military confrontation between the great powers and their allies.”

But by engineering a coup in Ukraine and rejecting reasonable Russian proposals to resolve the crisis, U.S. leaders have deliberately provoked such a confrontation. The U.S. media have provided political cover, blaming everything on Russia and President Putin, to give U.S. leaders the political space to play the most dangerous game known to mankind: nuclear brinksmanship.

5. North Korea vs. Sony? Now the U.S. is imposing new sanctions on North Korea based on claims that it is behind a cyber-attack on the Sony Corporation. Once again, U.S. officials claim to be sure of their accusations. And once again, the only sure thing is that they’re only pretending to be sure, in this case risking a new conflict with a government whose actions they’ve consistently failed to accurately predict or understand for decades.

Cyber-security experts are already challenging the U.S. narrative. Marc Rogers of Cloudflare, who manages cyber-security at hacker conferences, thinks the attack on Sony was probably the work of a vengeful ex-employee. He wrote in an article for Daily Beast, “I am no fan of the North Korean regime. However I believe that calling out a foreign nation over a cyber-crime of this magnitude should never have been undertaken on such weak evidence.”

But calling out foreign nations on weak evidence is an essential core element of U.S. propaganda strategy. U.S. officials quickly and loudly establish the narrative they want the public to believe, and leave it to the echo chamber of the complicit U.S. media system to do the rest. The media’s roles are then to “work the story” through rote repetition and supporting analysis, and to suppress and ridicule alternative narratives.

U.S. officials believe they can win a global propaganda war, much as they think they won the Cold War. But they seem to be losing the global struggle for hearts and minds. The Obama charm offensive is wearing thin and worldwide opinion polls consistently identify the U.S. as the greatest threat to peace.

On the domestic front, as the lies that clothe our emperor and our empire become ever more transparent, Americans are inevitably growing more skeptical than ever of politicians and the media. Skepticism in the face of propaganda is vital, but the post-WW II record low turnout in the November 2014 election (36.4 percent) suggests that more Americans are reacting to the corruption of our political and media environment with disengagement than with the kind of activism that could awaken the sleeping giant of democracy.

But this is only one stage of a long and complex history. Growing democratic activism and independent media are the green shoots of a grassroots renewal of democratic politics that offers real solutions to our country’s problems, not least to rein in its dangerous and destabilizing foreign policy and the web of lies that sustains it.

One thing we can do, in the words of Bob Dylan, is to let the masters of war and their media hacks know we can see through their masks.

The Prison State of America

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Prisons employ and exploit the ideal worker. Prisoners do not receive benefits or pensions. They are not paid overtime. They are forbidden to organize and strike. They must show up on time. They are not paid for sick days or granted vacations. They cannot formally complain about working conditions or safety hazards. If they are disobedient, or attempt to protest their pitiful wages, they lose their jobs and can be sent to isolation cells. The roughly 1 million prisoners who work for corporations and government industries in the American prison system are models for what the corporate state expects us all to become. And corporations have no intention of permitting prison reforms that would reduce the size of their bonded workforce. In fact, they are seeking to replicate these conditions throughout the society.

States, in the name of austerity, have stopped providing prisoners with essential items including shoes, extra blankets and even toilet paper, while starting to charge them for electricity and room and board. Most prisoners and the families that struggle to support them are chronically short of money. Prisons are company towns. Scrip, rather than money, was once paid to coal miners, and it could be used only at the company store. Prisoners are in a similar condition. When they go broke—and being broke is a frequent occurrence in prison—prisoners must take out prison loans to pay for medications, legal and medical fees and basic commissary items such as soap and deodorant. Debt peonage inside prison is as prevalent as it is outside prison.

States impose an array of fees on prisoners. For example, there is a 10 percent charge imposed by New Jersey on every commissary purchase. Stamps have a 10 percent surcharge. Prisoners must pay the state for a 15-minute deathbed visit to an immediate family member or a 15-minute visit to a funeral home to view the deceased. New Jersey, like most other states, forces a prisoner to reimburse the system for overtime wages paid to the two guards who accompany him or her, plus mileage cost. The charge can be as high as $945.04. It can take years to pay off a visit with a dying father or mother.

Fines, often in the thousands of dollars, are assessed against many prisoners when they are sentenced. There are 22 fines that can be imposed in New Jersey, including the Violent Crime Compensation Assessment (VCCB), the Law Enforcement Officers Training & Equipment Fund (LEOT) and Extradition Costs (EXTRA). The state takes a percentage each month out of prison pay to pay down the fines, a process that can take decades. If a prisoner who is fined $10,000 at sentencing must rely solely on a prison salary he or she will owe about $4,000 after making payments for 25 years. Prisoners can leave prison in debt to the state. And if they cannot continue to make regular payments—difficult because of high unemployment—they are sent back to prison. High recidivism is part of the design.

Corporations have privatized most of the prison functions once handled by governments. They run prison commissaries and, since the prisoners have nowhere else to shop, often jack up prices by as much as 100 percent. Corporations have taken over the phone systems and charge exorbitant fees to prisoners and their families. They grossly overcharge for money transfers from families to prisoners. And these corporations, some of the nation’s largest, pay little more than a dollar a day to prison laborers who work in for-profit prison industries. Food and merchandise vendors, construction companies, laundry services, uniforms companies, prison equipment vendors, cafeteria services, manufacturers of pepper spray, body armor and the array of medieval instruments used for the physical control of prisoners, and a host of other contractors feed like jackals off prisons. Prisons, in America, are a hugely profitable business. Our prison-industrial complex, which holds 2.3 million prisoners, or 25 percent of the world’s prison population, makes money by keeping prisons full. It demands bodies, regardless of color, gender or ethnicity. As the system drains the pool of black bodies, it has begun to incarcerate others. Women—the fastest-growing segment of the prison population—are swelling prisons, as are poor whites in general, Hispanics and immigrants. Prisons are no longer a black-white issue. Prisons are a grotesque manifestation of corporate capitalism. Slavery is legal in prisons under the 13th Amendment of the U.S. Constitution. It reads: “Neither slavery nor involuntary servitude, except as punishment for crime whereof the party shall have been duly convicted, shall exist within the United States. …” And the massive U.S. prison industry functions like the forced labor camps that have existed in all totalitarian states. 

Corporate investors, who have poured billions into the business of mass incarceration, expect long-term returns. And they will get them. It is their lobbyists who write the draconian laws that demand absurdly long sentences, deny paroles, determine immigrant detention laws and impose minimum-sentence and three-strikes-out laws (mandating life sentences after three felony convictions). The politicians and the courts, subservient to corporate power, can be counted on to protect corporate interests.

Corrections Corporation of America (CCA), the largest owner of for-profit prisons and immigration detention facilities in the country, had revenues of $1.7 billion in 2013 and profits of $300 million. CCA holds an average of 81,384 inmates in its facilities on any one day. Aramark Holdings Corp., a Philadelphia-based company that contracts through Aramark Correctional Services to provide food to 600 correctional institutions across the United States, was acquired in 2007 for $8.3 billion by investors that included Goldman Sachs.

The three top for-profit prison corporations spent an estimated $45 million over a recent 10-year period for lobbying that is keeping the prison business flush. The resource center In the Public Interest documented in its report “Criminal: How Lockup Quotas and ‘Low-Crime Taxes’ Guarantee Profits for Private Prison Corporations” that private prison companies often sign state contracts that guarantee prison occupancy rates of 90 percent. If states fail to meet the quota they have to pay the corporations for the empty beds. 

CCA in 2011 gave $710,300 in political contributions to candidates for federal or state office, political parties and so-called 527 groups (PACs and super PACs), the American Civil Liberties Union reported. The corporation also spent $1.07 million lobbying federal officials plus undisclosed sums to lobby state officials, according to the ACLU.

The United States, from 1970 to 2005, increased its prison population by about 700 percent, according to statistics gathered by the ACLU. The federal Bureau of Justice Statistics, the ACLU report notes, says for-profit companies presently control about 18 percent of federal prisoners and 6.7 percent of all state prisoners. Private prisons account for nearly all newly built prisons. And nearly half of all immigrants detained by the federal government are shipped to for-profit prisons, according to Detention Watch Network.

But corporate profit is not limited to building and administering prisons. Whole industries now rely almost exclusively on prison labor. Federal prisoners, who are among the highest paid in the U.S. system, making as much as $1.25 an hour, produce the military’s helmets, uniforms, pants, shirts, ammunition belts, ID tags and tents. Prisoners work, often through subcontractors, for major corporations such as Chevron, Bank of America, IBM, Motorola, Microsoft, AT&T, Starbucks, Nintendo, Victoria’s Secret, J.C. Penney, Sears, Wal-Mart, Kmart, Eddie Bauer, Wendy’s, Procter & Gamble, Johnson & Johnson, Fruit of the Loom, Motorola, Caterpillar, Sara Lee, Quaker Oats, Mary Kay, Microsoft, Texas Instruments, Dell, Honeywell, Hewlett-Packard, Nortel, Nordstrom’s, Revlon, Macy’s, Pierre Cardin and Target. Prisoners in some states run dairy farms, staff call centers, take hotel reservations or work in slaughterhouses. And prisoners are used to carry out public services such as collecting highway trash in states such as Ohio. 

States, with shrinking budgets, share in the corporate exploitation. They get kickbacks of as much as 40 percent from corporations that prey on prisoners. This kickback money is often supposed to go into “inmate welfare funds,” but prisoners say they rarely see any purchases made by the funds to improve life inside prison. The wages paid to prisoners for labor inside prisons have remained stagnant and in real terms have declined over the past three decades. In New Jersey a prisoner made $1.20 for eight hours of work—yes, eight hours of work—in 1980 and today makes $1.30 for a day’s labor. Prisoners earn, on average, $28 a month. Those incarcerated in for-profit prisons earn as little as 17 cents an hour.

However, items for sale in prison commissaries have risen in price over the past two decades by as much as 100 percent. And new rules in some prisons, including those in New Jersey, prohibit families to send packages to prisoners, forcing prisoners to rely exclusively on prison vendors. This is as much a psychological blow as a material one; it leaves families feeling powerless to help loved ones trapped in the system.

A bar of Dove soap in 1996 cost New Jersey prisoners 97 cents. Today it costs $1.95, an increase of 101 percent. A tube of Crest toothpaste cost $2.35 in 1996 and today costs $3.49, an increase of 48 percent. AA batteries have risen by 184 percent, and a stick of deodorant has risen by 95 percent. The only two items I found that remained the same in price from 1996 were frosted flake cereal and cups of noodles, but these items in prisons have been switched from recognizable brand names to generic products. The white Reebok shoes that most prisoners wear, shoes that lasts about six months, costs about $45 a pair. Those who cannot afford the Reebok brand must buy, for $20, shoddy shoes with soles that shred easily. In addition, prisoners are charged for visits to the infirmary and the dentist and for medications.

Keefe Supply Co., which runs commissaries for an estimated half a million prisoners in states including Florida and Maryland, is notorious for price gouging. It sells a single No. 10 white envelope for 15 cents—$15 per 100 envelopes. The typical retail cost outside prison for a box of 100 of these envelopes is $7. The company marks up a 3-ounce packet of noodle soup, one of the most popular commissary items, to 45 cents from 26 cents.

Global Tel Link, a private phone company, jacks up phone rates in New Jersey to 15 cents a minute, although some states, such as New York, have relieved the economic load on families by reducing the charge to 4 cents a minute. The Federal Communications Commission has determined that a fair rate for a 15-minute interstate call by a prisoner is $1.80 for debit and $2.10 for collect. The high phone rates imposed on prisoners, who do not have a choice of carriers and must call either collect or by using debit accounts that hold prepaid deposits made by them or their families, are especially damaging to the 2 million children with a parent behind bars. The phone is a lifeline for the children of the incarcerated.

Monopolistic telephone contracts give to the states kickbacks amounting, on average, to 42 percent of gross revenues from prisoner phone calls, according to Prison Legal News. The companies with exclusive prison phone contracts not only charge higher phone rates but add to the phone charges the cost of the kickbacks, called “commissions” by state agencies, according to research conducted in 2011 by John E. Dannenberg for Prison Legal News. Dannenberg found that the phone market in state prison systems generates an estimated $362 million annually in gross revenues for the states and costs prisoners’ families, who put money into phone accounts, some $143 million a year.

When strong family ties are retained, there are lower rates of recidivism and fewer parole violations. But that is not what the corporate architects of prisons want: High recidivism, now at over 60 percent, keeps the cages full. This is one reason, I suspect, why prisons make visitations humiliating and difficult. It is not uncommon for prisoners to tell their families—especially those that include small children traumatized by the security screening, long waits, body searches, clanging metal doors and verbal abuse by guards—not to visit. Prisoners with life sentences frequently urge loved ones to sever all ties with them and consider them as dead.

The rise of what Marie Gottschalk, the author of “Caught: The Prison State and the Lockdown of American Politics,” calls “the carceral state” is ominous. It will not be reformed through elections or by appealing to political elites or the courts. Prisons are not, finally, about race, although poor people of color suffer the most. They are not even about being poor. They are prototypes for the future. They are emblematic of the disempowerment and exploitation that corporations seek to inflict on all workers. If corporate power continues to disembowel the country, if it is not impeded by mass protests and revolt, life outside prison will soon resemble life in prison.