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Glenn Greenwald: Why the Obama Administration's Persecution of Bradley Manning Should Terrify Us All

March 5, 2013 in Blogs

By Amy Goodman, Glenn Greenwald, Democracy Now!

The following is a Democracy Now! interview with Glenn Greenwald on the terrifying persecution of Bradley Manning. 

As we broadcast from the Freedom to Connect conference, we look at one whistleblower who used the Internet to reveal the horrors of war: U.S. Army Private Bradley Manning. Military prosecutors have decided to bring the maximum charges against Manning after he admitted during a pretrial hearing last week to the largest leak of state secrets in U.S. history. In a bid to secure a reduced sentence, Manning acknowledged on the stand that he gave classified documents to WikiLeaks in order to show the American public the “true costs of war” and “spark a debate about foreign policy.” Manning pleaded guilty to reduced charges on 10 counts, which carry a maximum sentence of 20 years in prison. But instead of accepting that plea, military prosecutors announced Friday they will seek to imprison Manning for life without parole on charges that include aiding the enemy. Manning’s court-martial is scheduled to begin in June. We speak with Guardian columnist Glenn Greenwald, who has long covered the case, about what this means for Manning and its broader implications for whistleblowers and the journalists they often approach.

Glenn, welcome Democracy Now!

GLENN GREENWALD: Great to be here.

AMY GOODMAN: Talk about the significance of what the military prosecutors are pushing for now, life without parole for Bradley Manning, and what he said in court last week, not far from here, just down the road at Fort Meade.

GLENN GREENWALD: There are several levels of significance, the first of which is the most obvious, which is that this is a case of extraordinary prosecutorial overkill. The government has never been able to identify any substantial harm that has come from any of the leaks that Bradley Manning is accused of and now admits to being responsible for. Certainly nobody has died as a result of these leaks, even though the government originally said that WikiLeaks and the leaker has blood on their hands. Journalists investigated and found that there was no evidence for that. So, just the very idea that he should spend decades in prison, let alone be faced with life on parole, given what it is that he …read more

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Whence the Housing Bubble?

March 5, 2013 in Economics

By Joseph Salerno

Average Home Price To Household Income Ratio 02-13-1

I have recently written that there are certain key indexes and ratios derived from Austrian business cycle theory that help us discern the development of bubbles in various sectors. As Mises wrote: “Only theory, business cycle theory, permits us to detect the wavy outline of a cycle in the tangled confusion of events.”

Jeff Peshut, an institutional real estate investment manager, has been kind enough to share with me a chart that he has developed that is useful in detecting a bubble in the housing market. His chart below shows the ratio of the average existing home sales price to average household income. The long term average (LTA) of this ratio has been slightly above 3.0. At the beginning of 2001, however, it began to rise rapidly, reaching a peak 33 percent higher than the LTA during 2005, and then declining precipitously back to its LTA during 2008.

Peshut’s chart also shows that, as of the beginning of 2012, Fed monetary policy had been unable to restart a bubble in the housing market unlike it had done in financial asset, farmland, and commodities markets. In fact housing prices were still falling both absolutely and in relation to household income. This is apparently beginning to change as it has recently been reported that the S&P/Case-Schiller Home Price Indices “showed that all three headline composites ended the year with strong gains. The national composite posted an increase of 7.3% for 2012. The 10- and 20-City Composites reported annual returns of 5.9% and 6.8% in 2012.” In contrast, national income rose by 4 percent and disposable personal income by about 2 percent year over year in 2012.

…read more

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America’s Great Depression Quote of the Week: A Visit with ‘Dr. Hoover’

March 5, 2013 in Economics

By John P. Cochran

Robert Higgs advises us Don’t Rely on a Quack Doctor  as a parable about government intervention in the economy.

Rothbard in AGD documents the effects of a visits with Dr. Hoover on the economy. This week‘s quote is from the conclusion of AGD (pp. 336-37):

Mr. Hoover met the challenge of the Great Depression by acting quickly and decisively, indeed almost continuously throughout his term of office, putting into effect “the greatest program of offense and defense” against depression ever attempted in America. Bravely he used every modern economic “tool,” every device of progressive and “enlightened” economics, every facet of government planning, to combat the depression. For the first time, laissez-faire was boldly thrown overboard and every governmental weapon thrown into the breach. America had awakened, and was now ready to use the State to the hilt, unhampered by the supposed shibboleths of laissez-faire. President Hoover was a bold and audacious leader in this awakening. By every “progressive” tenet of our day, he should have ended his term a conquering hero; instead he left America in utter and complete ruin—a ruin unprecedented in length and intensity [emphasis mine].

Rothbard continues:

What was the trouble? Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflationist and other interventionary measures. In contrast to the myth of laissez-faire, we have shown in this book how government intervention generated the unsound boom of the 1920s, and how Hoover’s new departure aggravated the Great Depression by massive measures of interference. The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free-market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of “enlightened” economists. And in any other depression, past or future, the story will be the same.

The recovery in the early 1920s, which Richard Vedder has referred to as a “stroke of luck” (Wilson, a progressive interventionist was president when the crisis began but was incapacitated by a stroke and his administration was unable to do damage before passing the reins to Harding) is an example of an economy rapidly recovering as government spending and taxes were cut. Another example is  “The Austerity of 1946” (see also Vedder and Gallaway ”The Great Depression of 1946”),  which despite Keynesian economists’ predictions of doom and gloom, was in fact was …read more

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Guest Workers Key to Reform

March 5, 2013 in Economics

By Alex Nowrasteh

Alex Nowrasteh

The U.S. Chamber of Commerce and AFL-CIO reached a tentative agreement to support increasing lawful migration through a guest-worker program for lower-skilled migrants. The details are obscure, but this agreement is an essential first step for successful immigration reform — a step so far ignored by the Obama administration.

Without a guest-worker program, quite simply, immigration reform will fail.

Overwhelmingly, immigrants come to the United States because they want jobs, and American businesses have jobs to give. Legalizing the unauthorized migrants already here is a sound policy, but without a legal channel for workers to come, others will continue to enter the country illegally.

Policymakers seem to forget that there is recent evidence to this effect. Ronald Reagan instituted an amnesty in 1986, but unauthorized immigration continued unabated. Increased border and immigration enforcement — and it did increase — couldn’t stem the tide.

It is foolish to expect legalization and enforcement alone to stop unauthorized immigration. The demand is too strong on both sides of the labor equation. We need reforms that adapt to that reality.

Why is President Obama ignoring a guest-worker visa program? Because unions — one of the president’s most valued constituencies — have historically opposed guest workers.

It is foolish to expect legalization and enforcement alone to stop unauthorized immigration.”

A 2007 immigration reform effort largely failed because of union efforts to kill it. Late in the game, Senate Democrats amended the bill to end its guest-worker program after five years. The amendment passed 49-48 — with then-Sen. Obama, ominously, voting in favor. As a result, Republicans and business interests that supported increased lawful immigration withdrew their support, and the reform effort collapsed.

At the time, the leaders of the AFL-CIO, the Teamsters, and other unions all wrote letters opposing the guest-worker program. James P. Hoffa of the Teamsters opposed a guest-worker program because it would “[force] workers to toil in a truly temporary status with a high risk of exploitation and abuse by those seeking cheap labor.”

But the employer abuse issue is a straw man. There is a rather simple remedy: visa portability, which would allow guest workers to easily switch jobs. The ability to quit a job without the legal risk of deportation would give guest workers the ability to effectively enforce their own labor standards: They could depart an abusive employer without fear of deportation.

Instead of more migrant freedom, labor leaders are supporting more regulations for …read more
Source: OP-EDS

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D.C. Is Capital of the Absurd

March 5, 2013 in Economics

By Gene Healy

Gene Healy

Like most of this company town, I’m addicted to Netflix’s Beltway “telenovela,” “House of Cards,” starring Kevin Spacey as a conspiratorial House majority whip. But the show unwittingly flatters D.C., depicting a city of ruthless, steely competence. The real thing is a clown show consumed by trivialities.

For example, on his way into work Friday, a friend heard the Senate chaplain’s cry for help, broadcast over WTOP: “As we anticipate across-the-board budget cuts across our land, we still expect to see your goodness prevail,” Pastor Barry Black pleaded from the Senate floor, “O God, and save us from ourselves.”

To the biblical plagues of locusts, pestilence and the culling of the firstborn, add a 2.3 percent cut in federal government spending for fiscal 2013? What’s really worth some wailing and gnashing of teeth is that, faced with a $900 billion deficit and $16 trillion-plus federal debt, Congress and the president only managed those meager cuts by accident — through a “poison pill” gimmick that nobody believed would be triggered.

This town is a clown show consumed by trivialities.”

Or take last week’s silly controversy over whether the administration “threatened” Watergate scribe Bob Woodward for reporting that the sequester was the Obama team’s idea. Woodward’s tall tale of intimidation should have vanished when Politico released the relevant emails, a decorous exchange between economic adviser Gene Sperling and Woodward. Sperling: “I apologize for raising my voice … [but] as a friend, I think you will regret staking out that claim … ” Woodward: “You do not ever have to apologize to me … “

Yet “Woodwardgate” dominated the Sunday talk shows. If you wanted some substance, you had to tune into ABC’s “This Week,” where George Stephanopoulos was interviewing Dennis “the Worm” Rodman about North Korea.

Last Thursday, National Journal’s Ron Fournier echoed Woodward’s claim that the Obamaites are “abusive.” The next day, Fournier was so upset that there’d been no deal to avert the sequester cuts, he tweeted, “bin Laden didn’t compromise. [Obama] handled him pretty well.” So, a Seal Team Six “double tap” for Speaker Boehner?

Woodward, too, oscillates between power-worship and whining that the White House is mean. He told MSNBC: “Under the Constitution, the president is commander in chief and employs the force. … [W]e now have the president going out because of this piece of paper and this agreement, ‘I can’t do what I need to do …read more
Source: OP-EDS

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Fewer Taxpayers, More Spending

March 5, 2013 in Economics

By Doug Bandow

Doug Bandow

Under economic pressure, the Obama administration has pursued an increasingly vigorous class war strategy. At the same time people continue to be dropped from the income tax rolls. This likely expands government and increases what the rest of us will have to pay.

Throughout its early history the federal government didn’t have an income tax. But a century ago the states ratified the 16th Amendment. Even then, in its early years the income tax affected few people. Only during World War II, when up to three-quarters of the national GDP was consumed by the military, did the income levy become broad-based.

However, the U.S. is now moving in the opposite direction. A recent study by William Freeland, William McBride, and Ed Gerrish for the Tax Foundation reported that 58 million people, 41 percent of all tax filers, had no tax liability; indeed, many of them are receiving money back from the government. Explained the Foundation: “There are currently more Americans off the tax rolls than at any time since 1940, when the income tax became a ‘mass tax’.”

Nonpayment results from the expansion of deductions and credits, including those which are refundable, that is, which generate a federal check for those who owe nothing. Under 2011 law, noted the Tax Foundation, a family with an income of $45,000 could end up receiving $274 after taking the standard deduction, personal exemption, two child credits, and the Earned Income Tax Credit. The family also might be eligible for credits for child care, education, and hybrid vehicles.

The underlying problem is that government spends too much, not that it collects too little.”

In 1950, 28 percent of filers were “nonpayers.” That reflected a relatively high value of the personal exemption compared to average incomes. The nonpayers’ share dropped to 16 percent by 1969. It rose again to 26 percent in 1975, and then dropped until the 1986 Reagan tax reform. Reported Freeland, McBride, and Gerrish, “Since then, the percentage of tax filers with no income tax liability has grown dramatically. Indeed, in the twenty years between 1990 and 2010, the percentage of nonpayers nearly doubled, from 21 percent to 41 percent.”

Related to nonpayers are nonfilers. Millions of people earn something, but not enough to require them to file a tax form. “By some estimates, when these nonfilers are added to the number of nonpayers, the total number of Americans outside the income tax system jumps to roughly …read more
Source: OP-EDS

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Locking in the Homeowner

March 5, 2013 in Economics

By Richard W. Rahn

Richard W. Rahn

It is estimated that up to a quarter of all American households still owe more on their mortgages than their homes are worth. Many of these people have been able to refinance their home loans with much lower interest rates, but that does not solve the problem because they have a balance sheet problem rather than a cash-flow problem.

Those who owe more on their homes than they can sell them for, and who have little other savings or assets, are “locked in” to their existing homes. Even if they have a better job offer in a location too distant to commute, they may not be able to take the job because they cannot afford the mortgage payments on their existing homes, cannot sell for a price higher than their mortgage, or cannot afford rent or house payments in the new location.

The Obama administration and the Federal Reserve are largely responsible for the problem. The Fed printed too much money to feed the housing bubble of the past decade. Even though homes have generally dropped in price an average of 30 percent from their highs at the top of the bubble, this price decline in many markets has been insufficient to “clear the market.” The administration and the Fed took actions to try to reduce the size of the necessary market-clearing price drop, with the result that more than a half-decade later, many people are still “underwater” in their homes.

Low interest rates enrich the government and starve the economy.”

The father of experimental economics and Nobel laureate Vernon L. Smith has been arguing that policies to reduce interest rates for homeowners, rather than allowing prices to fall to clear markets, are going to lead to worse problems. At the moment, the Fed is buying tens of billions of mortgage-backed securities from the two large government-sponsored mortgage companies, Fannie Mae and Freddie Mac. This enables the Fed to buy mortgages from banks and others to keep a good supply of mortgage funds available at low interest rates. The problem is that this may be causing another housing bubble in some markets, which the Fed is, at some point, going to have to pop by raising interest rates, causing another drop in housing prices everywhere.

Those who have low-interest mortgages might well be able to afford the payments, but they cannot sell their houses for a price sufficiently high to pay off the debt — again, they are locked in. At the same time, all of us who have refinanced our mortgages to obtain the lower rates …read more
Source: OP-EDS