Tax Breaks

alt.sex.column: The old triangle

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By Andrea Nemerson. Email your questions to andrea@mail.altsexcolumn.com. Read more of Andrea’s columns here.

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Dear Andrea:

I seem to find myself being one-third of a long-term, stable threesome. Or is there no such thing?

I was dating “Jill,” who is bi but was only dating me. We decided to try a threesome just for fun and invited her friend “Jen.” It turned out not to be one-time thing. Jen came back, and came back again, and she and Jill started to fall in love, and so did we (Jen and me), and before you knew it, we had this thing that looks weird from the outside but feels very normal and even simple to us. Only a few close friends know, and we are worried about what parents and others would say if they knew. Jill and I were planning on getting married and having a kid, and we still want to, but now Jen would be part of our family too. And we’d like to get a house together, but wouldn’t people know then?

I know “one guy, two girls” sounds like a porno fantasy, but it isn’t like that really. We all have jobs and lives, and it’s not like we hang around the pool having crazy three-way sex all the time. But we do want to stay together. What do you think? Is such a thing possible?

Love,

Equilateral

Dear Equ:

Clearly so, since you are doing it. As for the future, who can tell?

 

An equilateral triangle is about as stable a shape as you can find, but even triangles suffer stresses. You are still in the two-honeysmoon phase and everyone is, I am sure, on his or her best behavior. This is certain not to last. Sooner or later someone will feel neglected or insufficiently supported and will not repress the urge to make that snappish comment, and somebody else will come back with a “Yeah? If you’re so ____ing _____ why don’t you ______instead of ______ing?” and somebody else will roll his or her eyes and somebody will yell at the eye-roller for eye-rolling. It is inevitable. And soothing three egos and salving three sets of hurt feelings is exponentially more complicated.

I would also not discount the lack of societal support for nontraditional unions as a source of yet more stress. I hesitate to draw a direct parallel to gay couples, but not having people beam at you when you announce your intentions and not having all the aunts tear up at the sight of the lovely bride (groom) and not having the chair dance and the “mazel tov and siman tov” can be a real loss. It isn’t all about the health insurance and the tax breaks or even about commitment — marriage is also about societal support and approval, and that support and approval does help solidify a union. As I said, not exactly the same thing, though. Your situation is worse.

What? No. I don’t disapprove. But other people will, so strenuously that you will feel obligated to keep it a secret. And while secrets can be sexy and sharing them can be bonding, living in hiding (or in a situation generally misunderstood or despised) is ultimately pretty destructive. Which is certainly no reason not to do it.

The complications of a multiple marriage (equivalent) go far beyond potential threats to peace on the home front like jealousy, possessiveness, and schedule difficulties. (Have you never watched Big Love? Even if you’re not planning on founding your own splinter sect, you might want to.) Spouses are family, but what are second spouses? What happens if Jen has a family emergency, is ill herself, or otherwise in need of immediate succor? Your boss understands “My wife’s mother died, I’ll be out this week.” She doesn’t give a damn about your wife’s girlfriend’s mother. What if Jen wants to have a baby too? The three of you may fall easily into a family pattern that works for you, with one mommy and one mama, or whatever — children never seem to find unusual arrangements the least bit troublesome, since they have no idea what “usual” is and what’s normal is what’s normal for them. Schools and soccer coaches and other authorities, however, will have Opinions.

In other, fewer words, sure, you can do this. Jill can do it. Jen can do it. But living a life that sounds like somebody else’s dirty joke is not going to be easy. If I’m sick of hearing “You’ve really got your hands full!” when I walk by with my twins — imagine how tired of it you’re going to get. You might want to get in practice now: “How do you figure out which one to do first?” sniggers the office wit when you let slip that you’re finding your home life complicated, “I wish I had your problems.”

“Dude,” you’ll sigh, as you attempt to side-step him to get to the copier, “You have noidea.” And he won’t.

Love,

Andrea

 

Who will fight corporate America?

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By Steven T. Jones
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This morning’s U.S. Supreme Court landmark decision overturning a 103-year-old law limiting corporate spending on elections is a huge setback for the people’s ability to counter the power of Wall Street and multi-national corporations, a development exacerbated by signals that the Democratic Party is retreating from even its nominally left-of-center initiatives in the wake of Tuesday’s loss of its Massachusetts seat in the U.S. Senate.

If this morning’s front page San Francisco Chronicle story is to be believed, Democratic congressional leaders are essentially abandoning health care reform and climate change legislation, shifting instead to focus on “creating jobs and cutting the enormous federal deficit.”

And if Mayor Gavin Newsom’s recent initiatives here are any indication, job creation is synonymous with corporate tax breaks, while deficit reduction probably means the elimination of even more government jobs, further enabling private sector excesses. Yes, the political climate in this country is turning as bleak and stormy as the California weather this week.

But at least downpours provide needed water. With progressive institutions from the anti-war movement to minor political parties at their weakest point in many years, it’s unclear who will unite and lead a public that is growing increasingly frustrated with this country’s political dysfunction and uneven economic recovery (that is, corporations are recovering but most people aren’t).

There are a few faint glimmers of hope. The Chron reports on an alliance between UC students and administrators to push for a reversal of deep cuts to education spending. And spending by labor unions was also unshackled by today’s court decision, which could be helpful if that movement wasn’t in such disarray right now and was willing and able to help lead a broad people’s movement.

But the question facing the country right now is this: who can effectively fight corporate America, and who is willing to do so?

Restoring majority rule

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Gov. Arnold Schwarzenegger’s lame duck response to California’s projected $20 billion state deficit has given supporters of more than 30 budget and revenue-related state initiatives now in circulation a renewed sense of urgency as they scramble to gather signatures and qualify proposed solutions to the state’s ongoing financial emergency for the November ballot.

But while this plethora of initiatives reflects widespread frustration over the state’s broken system of governance, disagreement rages over how to fix it and how best to restore majority rule to California.

“These are the hardest decisions a government must make, yet there is simply no conceivable way to avoid more cuts and more pain,” the governor told reporters Jan. 8 as he released a new budget proposal calling for $8.5 billion in cuts to state workers’ wages, health and human services, and prisons; a legally questionable $4.5 billion shift in other funds; and $6.9 billion in federal reimbursements that have yet to be approved.

Even steeper social services cuts are in the works, Schwarzenegger warned, if the feds don’t comply with this request for a bailout. But he refused to target corporations and millionaires as revenue sources, clinging instead to the standard Republican pledge not to raise taxes.

“We didn’t hear him say, ‘We are going to pinch the wealthy and the corporate,'<0x2009>” State Sen. Mark Leno observed. “He is definitely setting his sights on the social safety net.”

Recent revolts within the public university system, including the November takeover of UC Berkeley’s Wheeler Hall, suggest that tuition hikes, layoffs, and reduced study options have brought students to the tipping point.

But UC Berkeley linguistics professor George Lakoff fears that without restoring majority rule to the state’s budget and revenue-related measures, such revolts only address symptoms, not causes, of the impasse.

So Lakoff decided to author the California Democracy Act, an initiative that would replace the state’s two-thirds requirement on budget and revenue bills with a simple majority vote, after Sen. Loni Hancock invited him to meet with a group of Democratic state senators last spring.

“She said the Democrats were having problems getting anything done, and I went away saying, ‘this is ridiculous,'<0x2009>” Lakoff said. “It occurred to me that since the problem came by way of the initiative process, then it was possible to rectify it that way.”

Proposition 13, approved by voters in 1978, limited property tax increases and required a two-thirds supermajority in the Legislature to approve most new tax increase, measures that contributed mightily to the state’s bleak financial situation.

California also requires a two-thirds vote for the Legislature to approve the annual budget, along with only Arkansas and Delaware. On Jan. 5, Sonoma State philosophy professor Teed Rockwell told the Potrero Hill Democratic Club to endorse Lakoff’s initiative, noting that California is the only state to require two-thirds vote on budget and revenue bills.

“I have learned that essentially everything that is uniquely wrong with California results from this one fact,” Rockwell said.

California has the largest number of millionaires in the U.S., but as Rockwell observed, thanks to the fiscal stranglehold of the Republican minority, “We do not have enough money to keep our parks open or maintain affordable tuition at our public colleges. And the extremists in Sacramento want to solve this problem by decreasing taxes on millionaires and increasing taxes on the middle class.”

Rockwell noted that of the 22 states that produce oil in the U.S., all have oil severance taxes, including Sarah Palin’s Alaska and George W. Bush’s Texas — except California.

But while the California Democracy Act simply resolves that “all legislative actions on revenue and budget must be determined by a majority vote,” neither the state Democratic Party nor the major unions are willing to support Lakoff’s measure, citing its bad results in the polls.

Instead, veteran legislator and California Democratic Party Chair John Burton is backing a Hancock proposal that seeks to reduce to a simple majority the Legislature’s voting requirement on budget bills.

Lakoff warns that budget bills merely determine how to slice the pie, while revenue bills determine the size of the pie. This means that if Democrats succeed in only reforming the state’s budget voting requirements, they’ll still be stuck with having to make painful cuts.

But Hancock, who has been living with the results of this fiscal gridlock since she was elected to the state Assembly six years ago and helped sponsor the failed oil severance tax initiative in 2006, believes decisions to cut prison or education spending are not trivial.

“Last year Democrats gave $2 billion in tax breaks just to get one desperately needed Republican vote on the budget,” Hancock told the Guardian. “And now the Republicans are asking for takeaways on environmental and labor protections that they otherwise wouldn’t have any power to negotiate.”

“I am a realistic idealist,” Hancock continued. “I believe we are better off to get the majority vote to pass the budget. That way, the minority might begin to negotiate and have a more rational conversation. I’m very pleased that throughout the state, folks are recognizing that state governance is broken.”

California Tax Reform Association executive director Lenny Goldberg told us it’s hard to choose between the Lakoff and Hancock initiatives.

“It’s a question of what’s achievable, of how to focus energy,” Goldberg said. “Lowering the vote requirement for the budget would eliminate some of the hostage-taking and help reverse the corporate loopholes that the Democrats were forced to accept to get a budget passed. So at least it would make the budget process better.”

But he agrees that budget reform only makes the Democrats solely responsible for the budget, while preventing them from raising revenue.

“So there is some disagreement whether it’s better to do one, if you can’t do tax reform,” he said. “In the end, it’s a strategic, not substantive, question. Is it better to do budget alone, or not at all? Personally, I think we’re better off doing budget reform than nothing — but it’s a close call.”

Hancock and Lakoff both believe that a competing initiative, endorsed by Schwarzenegger and funded by the group California Forward, is the poison pill in the upcoming fiscal equation.

“Unfortunately, it’ll make it harder to raise fees,” Hancock said.

“It should be renamed California Backward,” Lakoff quipped, noting that while the California Forward initiative supports a simple majority on budget bills, it seeks to raise to two-thirds the voting threshold on new fees.

California Forward executive director Jim Mayer said his organization supported Prop. 11, the redistricting measure that passed in November 2008, “as a start to melt the political gridlock.

“And our two initiatives will help legislators do a better job of spending the pie,” Mayer added, noting that his group is talking to Democrats and Republicans as well as counties, cities, and branches of the Chamber of Commerce.

One of California Forward’s initiatives seeks to change the budget vote requirement to a simple majority and create a two-year budget cycle. It also forces the Legislature to use one-time revenues for one-time expenditures — and requires a two-thirds vote on fee increases, raising Democrat hackles.

“When the Legislature attempts to replace what’s currently a tax on utilities with a fee, currently they can do that with a simple majority. But people on the right tend to worry that if you eliminate a tax and call it a fee, it’s illegal,” California Forward spokesperson Ryan Rauzon explained.

The other initiative would allow county governments to identify priorities and raise revenue with a simple majority vote, Mayer said, a plan he claims is about “empowering local governments.”

Newsom’s corporate giveaway

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By Steven T. Jones
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After going through a ridiculous security check (I waited 15 minutes for an “escort,” but they never even inspected my bag) to get into Mayor Gavin Newsom’s invite-only State of the City speech last night in the Asian Art Museum, I chatted with my colleague Melissa Griffin, the blogger and Examiner columnist, as Newsom worked the room.

The mayor eventually wound his way over to me, and when I turned to greet him, he gave me a playful shove, knocking me off balance and telling me, “Be nice!” Just minutes into his speech, in which he promoted corporate tax breaks and a discredited “local economic stimulus package,” I understood what he meant.

When he introduced this trickle-down economics initiative almost a year ago, we cited studies showing that it was a political gimmick that didn’t work and shot down Newsom’s claim that the city’s economist supported this giveaway of public funds to the private sector.

But last night, Newsom chided the Board of Supervisors for not scheduling hearings on his proposal to waive payroll taxes for new businesses and new jobs, create tax credits for health insurance costs, and extend current tax breaks for biotech companies, seemingly oblivious to the fact that such actions will add to the massive budget deficit that he barely mentioned.

The Chronicle today quoted gleeful Chamber of Commerce head Steve Falk and the chilly reaction that this strange initiative got from supervisors, but San Francisco Democratic Party chair Aaron Peskin went even further, this morning telling us, “I am so disappointed that the mayor of San Francisco is taking a page from the playbook of the Republican Party. This sounds like Ronald Reagan’s trickle down economics. In an era when some of the richest corporations have made zillions of dollars and the U.S. government just gave them zillions more, now we’re going to close hospitals and say we can’t pave our streets.”

Lessons from New London debacle

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By Tim Redmond

New London, Connecticut, became famous a few years back for seizing the homes of dozens of families to make way for a commercial development by the pharma giant Pfizer. Now, a major Supreme Court case later, the project has gone forward, the houses have been demolished — and now Pfizer, after years of tax breaks and tens of millions of dollars in public subsidies, is bailing on the whole thing.

It was on odd Supreme Court case, with Justice Clarence Thomas, of all people, making the case against a private company getting tax benefits. But it’s hard to argue with the results — this was a major disaster. And there’s a lesson here: If governments put too much faith and hope in the promises of big business to save their economies, they’re going to be badly disappointed.

Lennar Corp. isn’t demolishing any houses in Bayview/Hunters Point, but the construction giant will completely transform that area — and then what? Suppose Lennar goes broke halfway through? San Francisco’s handing over a lot of its future to one company that can’t be trusted. Not so smart, I think

The price of normal

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news@sfbg.com

With a 2010 state proposition on gay marriage in the works and a national gay rally on the Washington Mall being planned for October 10-11 of that year, it’s obvious that more and more of the LGBT community’s resources are being funneled into the battle for marriage equality, while other causes go begging.

Already gay marriage has become a black hole that is sucking untold amounts of money, time, and energy out of our community. In the 2008 election alone, gay marriage supporters raised $43.3 million to defeat Proposition 8, the anti-gay marriage initiative that California voters passed by 52 percent. It may be the biggest chunk of change the community has ever spent for a single fight.

A QUESTION OF PRIORITIES


I’m not against gay marriage. If queer couples want to be as miserable as straight ones, that’s their choice. Marriage is a failed institution. With a 54.8 percent divorce rate nationally and a 60 percent rate here in California, there’s no doubt in my mind that heterosexual "wedded bliss" is more of an oxymoron than a reality.

What’s troubling to me as a queer activist of almost 40 years (much of that time spent on economic justice work) is that, with the tremendous amount of homelessness, poverty, and unemployment in our community, we are spending so much dough on the fight to give a minority of folks — those who opt for tying the knot — rights and privileges that straight married folks have.

Sure, it’s unfair that married straights get tax breaks, not to mention the status of next-of-kin for hospital visits and medical decisions when one partner is ill, and queers don’t. Altogether, married couples have 1,400 benefits, both state and federal, that domestic partners and single people don’t enjoy. It’s a matter of simple justice that the playing field be leveled. Only a right-wing idiot could disagree with that. Now, if only we could fight to give everyone (including singles) those 1,400 benefits.

For me it’s a question of priorities. We are living in scary times. Unemployment is sky-high; millions are without healthcare, including children; foreclosures are robbing homeowners and tenants alike of their housing; and business collapses are leaving a lot of people out in the cold and unable to pay the rent or the mortgage.

DINKS NO MORE


The queer community is no better off.

It’s a popular misconception that queers have a lot of disposable income. The "double income, no kids" (DINK) myth was promoted in the 1980s by gay publishers who wanted to expand their advertising base and their profits. These days, to read many gay publications, you’d think that all queers are going on fabulous vacations and buying expensive clothes, jewelry, and electronic gizmos.

That myth was easily dispelled by a recent study, "Poverty in the Lesbian, Gay and Bisexual Community," published this March by the Williams Institute at UCLA. Like "Income Inflation: the myth of affluence among gay, lesbian, and bisexual Americans," the groundbreaking 1998 study by M.V. Lee Badgett of the Department of Economics at the University of Massachusetts at Amherst, the Williams report found that many members of our community aren’t shopping ’til they drop. They can barely afford to put food on the table.

Nationally, 24 percent of lesbians and bisexual women are poor compared to 19 percent of heterosexual women; 15 percent of gay and bisexual men are poor compared to 13 percent of heterosexual men.

Queers aren’t just low on cash — we’re homeless, too. A 2006 report, "Lesbian, Gay, Bisexual and Transgender Youth: An Epidemic of Homelessness" from the National Lesbian and Gay Task Force and the National Coalition on Homelessness, showed that 20 percent to 40 percent of the 1.6 million homeless youth in America identify as LGBT. In San Francisco, the number of queers in the homeless youth population (estimated at 4,000 by the Mayor’s Office) is "roughly 44 percent," according to Dr. Mike Toohey of the Homeless Youth Alliance in the Haight.

Brian Basinger of the AIDS Housing Alliance says that 40 percent of people with HIV/AIDS, in the city once acclaimed for its care of those with the disease, are either "unstably housed or are homeless." In the Castro, Basinger said, there are only "12 dedicated HOPWA beds" for people with the disease. HOPWA (Housing Opportunities for People with AIDS) is a federal voucher program for low-income people with AIDS that is similar to federal housing assistance program Section 8.

Certain members of our community don’t fare much better in the area of employment. A 2006 survey by the Guardian and the Transgender Law Center reported that 75 percent of transgender people are not employed full-time, and 59 percent make less than $15,299 a year. A mere 4 percent of respondents earned more than $61,200, the then-median income average for San Francisco.

Fifty-seven percent of trangendered people said they suffered employment discrimination, demonstrating the need for the inclusion of "gender identity" in the federal Employment Non-discrimination Act. Human Rights Campaign, a national gay organization, and out Congress member Barney Frank (D-Mass.) cut transgenders out of that legislation the last time it was up before Congress.

It could all get a whole lot worse.

AXING THE FUTURE


Gov. Arnold Schwarzenegger wants to lop at least $81 million from California’s AIDS budget, including money for AIDS drugs, leaving low-income people stranded without their medication. Senior services are also on his cutting block, including $230.8 million from in-home services and $117 million from adult health-care programs. (As we go to press, the state Legislature is working to restore the AIDS money to the budget.)

Mayor Gavin Newsom, in his proposed city budget cuts, is axing $128.4 million from public health and $15.9 million from human services. There’s no doubt these cuts in health and human services will severely affect people with AIDS, seniors, youth, the homeless, and others in our community who can least afford to pay for the city’s budget shortfall.

The millions spent on gay marriage in the past few years could have gone a long way in these lean times. It could have helped make the proposed queer senior housing project, Open House, a reality. With 88 units in the works at 55 Laguna St., the site of the old UC extension, it will be the only such housing for LGBT seniors in San Francisco.

The money also could have funded housing in the Castro for homeless queer youth or people with AIDS. It could have been used as seed money for a much-needed war against poverty in the LGBT community.

A DIFFERENT KIND OF LIBERATION


The queer movement hasn’t always been this obsessed about getting hitched. Forty years ago this week, drag queens and others fought back against the cops who were raiding a gay bar called the Stonewall Inn in New York City’s West Village. Three days of protests led to the creation of the Gay Liberation Front (GLF), a revolutionary group dedicated to the sexual liberation of all people. GLFers weren’t looking to walk down the aisle or form binary couples. In a desire to "abolish existing social institutions," as the NYC branch of GLF said in its statement of purpose, some GLFers explored polyamory (more than one relationship at a time).

That’s why I edited Smash the Church, Smash the State! The Early Years of Gay Liberation, just published by City Lights Books, a collection of writings by former GLF members and other gay liberationists. I wanted to commemorate the 40th anniversary of Stonewall and the birth of GLF with a reminder of who we were and what we did. After all these years, I still don’t want to head to the chapel to get married.

When it really comes down to it, gay marriage is a conservative issue. It’s about wanting to fit in, to be like everyone else. Beyond the important issues of tax breaks and next-of-kin status — and the fact that if any institution exists, it shouldn’t discriminate against queers — marriage is ultimately a means of normalizing binary queer relationships, especially for gay men who have always enjoyed the freedom to be promiscuous. It’s a way to try and rein in our libidos, though the prevalence of extramarital sex among straight couples — 50 percent for women, 60 percent for men, according to a recent issue of Journal of Couple and Relationship Therapy — shows that marriage doesn’t come with a chastity belt.

It also doesn’t come with any guarantees, as researchers discovered in Sweden, where queers were able to contract for same-sex partnerships from 1995 until recently, when full same-sex marriage was instituted. According to a study by the Institute for Marriage and Public Policy, Swedish queers have been divorcing in high numbers, like their straight counterparts, who have a divorce rate that’s just a little higher than the United States.

For queers in Sweden, that’s the price of being normal.

Tommi Avicolli Mecca, who has been a queer activist since he was involved with the Gay Liberation Front at Temple University in Philadelphia in the early 1970s, is editor of Smash the Church, Smash the State! The Early Years of Gay Liberation (City Lights Books).

Sacramento insanity

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By Tim Redmond

Now the non-tough-guy gov says he’s going to veto the state budget if it includes any new taxes.

The new taxes, of course, include the repeal of a couple of big tax breaks that essentially hand state money to a tiny number of giant businesses.

But Schwarzenegger doesn’t care — he’s going to keep threatening the Legislature and putting forward random deadlines and trying to get an all-cuts budget.

Remember: It’s going to be hard to get to the two-thirds requirement for any new taxes anyway. (BTW, Sen. Mark Leno points out (and Assemblymember Tom Ammiano agrees) that in fact, due to some complicated legal stuff, it will indeed take two thirds to repeal the tax breaks. So already we’re looking at a budget that will need GOP support.

And the taxes are about $2 billion, matched with more than $11 billion in cuts.

And while the governor, and the major news media, keep talking about a budget deadline as if this were a typical summer, Leno points out that the Legislature has already passed a budget. This is all about revisions.

But I’m starting to think that ol’ Arnold really wants to shut down the state. There’s no other way to explain his behavior.

Will the Assembly repeal the corporate tax breaks?

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By Tim Redmond

I talked to Assemblymember Tom Ammiano today, and he’s upbeat about the role his house may play in the budget process. He thinks the governor’s threat to shut down the state is just “scare tactics to make the Legislature look bad” and that the Assembly isn’t prepared to accept a “cuts only” budget. “We’re not going to roll over,” he said.

Among other things, he said, the $2.5 billion in tax giveaways to big corporations cpuld be repealed with a simply majority. So the Democratic leadership ought to be making that a priority, and talking it up in the media — would people rather see their state parks close and teachers be fired — or see a tiny number of giant businesses get more tax breaks?

Calitics points out that the CalTaxReform folks have identified $10 billion in new revenue measure that all appear to have majority support in the polls.

So let’s hope the top Democrats call Arnold’s bluff, and offer some real alterntives.

State budget secrets: $2.5 billion in tax giveaways

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By Megan Rawlins

There’s no building-sized rock in Sacramento hiding 264 tons of cash – the approximate weight of the state’s budget deficit measured in $100 bills. But groups like the California Budget Project and the American Federation of State, County and Municipal Employees have published reports arguing there are smaller rocks, $100-million rocks, $1-billion rocks that can save services for some of the state’s most vulnerable populations.

In fact, according to a report CPB released June 3, the state Legislature quietly added three new corporate tax breaks in the last round of budget cuts — and just closing those loopholes could save the state up to $2.5 billion a year. The tax-law changes provide multi-million dollar tax breaks to a small nadful of the state’s largest corporations.

“Why,” Jean Ross, executive director of CBP, asked, “is the state giving away money?”

The rich don’t use public services

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By Tim Redmond

That’s what Gov. Schwarzenegger’s finance director told the New York Times:

Nearly all of the billions of dollars in cuts the administration has proposed would affect programs for poor Californians, although prisons and schools would take hits, as well.

“Government doesn’t provide services to rich people,” Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. “It doesn’t even really provide services to the middle class.” He added: “You have to cut where the money is.”

But that’s just wrong.

California spends a ton of money protecting rich people’s homes from fires. California spends billions on law-enforcement and prisons, much of that money going to ensure that poor prople can’t take money from rich people. Who do you think state highways serve? (Mostly the middle-class.) Who gets to live safer, more secure lives because desperatly mentally ill people aren’t wandering the streets?

Does the public school system and the state college and university system not train workers for the state’s wealthiest corporations?

And what about all of the excessive tax breaks that go to big businesses? Tax breaks are money that comes out of the government’s pocket. Tax breaks are handouts, just like welfare payments are handouts. Except that the tax breaks tend to be much bigger.

When you add up all the benefits that state government provides for the wealthy — and you look at how modest the tax payments from the wealthy are in this state — you get a sense of why we’re in this budget mess.

The solar project heads for a vote

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By Tim Redmond

Lots of talk about the Sunset reservoir Solar proposal over the weekend; the Chron weighed in with a fairly weak story that just did the he-says-she-says without getting into any of the real issues. And Julian Davis has a pretty detailed analysis here, at Fog City Journal.

The simple point is that the contract the supes are about to sign off on isn’t a great deal for the city. We’re going to be paying a lot of money to a private company to do something the city ought to be able to do itself.

I had conversations last week with a number of supervisors, and it’s looking like some of the progressives — John Avalos and Eric Mar, for example — are leaning toward supporting the project. Mar told me he’s been listening to the Sierra Club, which is often a good thing to do when it comes to alternative energy, but in this case I think the traditional enviros are so thrilled that there’s actual a viable solar project on the horizon that they’re not spending enough time on the details.

In fact, I spoke with John Rizzo, the Sierra Club’s point person on the project, and he told me that “The Sierra Club doesn’t care about the details of the contract. We’re not contract experts. We just want to see this happen.”

He agreed that it’s infuriating that so much of the federal alternative-energy money is going to the private sector, and said he’d support legislation that would give public agencies access to the same sort of money private companies get in tax breaks. “But global warming isn’t waiting,” he said. “Let’s build this one with this kind of a deal, and try the have the city build the next one.”

I with Rizzo in spirt, but the truth is, we’re going to regret this deal.

The only reason it makes sense to pay Recurrent Energy to do this is that Recurrent gets a $12 million tax break, and the city, as a public agency, doesn’t qualify for that money.

Let me make a humble suggestion. Rep. Nancy Pelosi is, I believe, still the speaker of the House. She’s managed to get San Francisco something like a billion dollars for the Chinatown subway. I’m willing to bet a case of Bud Light (and I don’t make bets that valuable easily) that if the mayor of San Francisco called Rep. Pelosi and told her that the difference between building a five-megawatt solar project and not building it was $12 million in federal money — so little in terms of federal spending that it’s what Mirkarimi calls “decimal dust” — San Francisco would have a promise of that cash so fast that Newsom couldn’t even find a shovel to break ground before the check arrived.

And the thing that frustrates me is that nobody’s even trying.

The supes ought to send this deal back to committee and take a real look at ways the city can do the same project, and own it, for less money. I refuse to believe that’s not possible.

And if Gavin Newsom wants to say he can’t make this work, then he’s going to have a hell of a time convincing any of us that he has the ability to run the State of California.

Slow down the solar project

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EDITORIAL The concept is so good it’s hard to imagine why anyone would criticize it: the San Francisco Public Utilities Commission wants to cover the Sunset Reservoir with solar panels, creating the largest municipal solar generating project in the country. The money would come from existing SFPUC revenue — no new taxpayer dollars. The Sierra Club loves the idea, and Mayor Gavin Newsom is pushing it.

We agree that the reservoir is a perfect place for a solar project, and that the city ought to be pursuing this.

But the structure of the deal makes us uncomfortable — and the financing shows a serious flaw in how federal money for renewable energy is allocated.

Under the terms of the proposal, a private company, Recurrent Energy, would finance and build the plant at a cost of perhaps $40 million. The facility would have the capacity to generate 5 MW of electricity, enough to power 2,500 houses. The city, in turn, would agree to buy that power for the next 25 years, at about 23.5 cents per kilowatt hour — far more than the current market rate for electricity but less than what other cities have agreed to pay for long-term solar contracts.

The city would have an option to buy the plant from Recurrent after seven years for $33 million.

The good news is that this would be a public-power project — the city would own the electricity and could use it to power public buildings and eventually, once the community choice aggregation (CCA) system is running, could sell it as retail power to residents and businesses.

But Sups. Ross Mirkarimi and David Campos have asked the obvious question: Why is a private company even involved? Why can’t the city build the solar generating station itself? The CPUC’s answer: It’s cheaper to let Recurrent do the work — because the private outfit will get a $12 million tax break from the federal government.

That’s a serious problem — why is the Obama administration giving tax breaks for private projects that aren’t available to cities? "What we should be looking at is why San Francisco, with all its clout in Washington, can’t get that same sort of subsidy for a public project," Campos told us.

Or as Mirkarimi put it: "This only makes sense to me if there’s some guarantee that the city will actually buy the plant in seven years. Otherwise we’re going to look back at this in year 15 and realize it’s not such a good deal."

The city’s energy future is very much up in the air right now — CCA is on the cusp of viability, there’s still an active public-power movement, and it’s very hard to say what the city’s needs will be (or what the price of solar energy will be) 10 years from now, much less 25. So we’re very nervous about signing a contract of that length with a private company.

Yes, the Recurrent deal offers solar now — and that’s important. But the supervisors shouldn’t rush this through. At the very least, they should pass a resolution asking House Speaker Nancy Pelosi to seek to direct the same subsidies that private companies can get to public solar projects — and to delay a final vote on this until there’s a better analysis of why a private company should be given a long-term contract for what ought to be a public project. *

Editorial: Slow down the Sunset solar project

2

Why is the Obama administration giving tax breaks for private projects that aren’t available to cities?

EDITORIAL
The concept is so good it’s hard to imagine why anyone would criticize it: the San Francisco Public Utilities Commission wants to cover the Sunset Reservoir with solar panels, creating the largest municipal solar generating project in the country. The money would come from existing SFPUC revenue — no new taxpayer dollars. The Sierra Club loves the idea, and Mayor Gavin Newsom is pushing it.

We agree that the reservoir is a perfect place for a solar project, and that the city ought to be pursuing this.
But the structure of the deal makes us uncomfortable — and the financing shows a serious flaw in how federal money for renewable energy is allocated.

Back to Bush

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McCain’s new economic plan is all about getting the government out of the financial industry:

“When that is accomplished,” McCain said, “government will relinquish its interest in these private companies. We’re going to get the government out of the business of bailouts and equity stakes and back in the business of responsible regulation.”

Oh, and he’s going to give tax breaks on capital gains. That will help most of us.

$850 billion reasons to vote for Sheehan

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My brother called me this morning a bit upset. He runs a small construction firm in upstate New York and he’s bummed about the bailout bill.

“I think I’m the only company in the United States that isn’t getting something out of this,” he said. “I should be making wooden arrows or importing rum.”

And, indeed, as MSNBC reports, there are lotsa goodies in the bill:

Tucked into pages 262 and 263 of the bill, for example, are provisions that will aid the manufacturers of “certain wooden arrows designed for use by children.” The bill will exempt the arrows from an excise tax of 39 cents. There are also tax breaks for race-track owners, for rum imported from Puerto Rico, for worsted wool makers, Hollywood film and television production companies and on and on.

Cindy Sheehan is having fun with this; she and her pals took to the Hyatt hotel across from the federal reserve with a message:

bailout08a.jpg

Sarah Palin, Smith Barney, and Barney Smith

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Sarah Palin’s Portfolio Managed by Smith Barney, Her Policies Would Fail Smith Barney

By Bruce B. Brugmann

Let me admit that I had never really heard of Alaska Governor Sarah Palin. I knew that every congressperson from Alaska was either under indictment or under criminal investigation but I didn’t know that much about the governor. I found out this morning from the Tom Hartman radio show on Air America that she herself is under an ethics investigation for interfering as governor with an investigation of her ex-brother-in-law in Alaska.

So I was fascinated to see the material gushing forth as breaking news from the Center for American Progress Action Fund. The one that caught my eye first outlined the Barney Smith angle. Its lead on a nifty political point: “Last night at the Democratic convention, a former Republican named Barney Smith spoke of the need for economic policies that “Help Barney Smith, not Smith Barney.

“Ironically, according to Saray Lskow at the Center for Public Integrity who analyzed Palin’s disclosure forms, Sarah Palin’s financial portfolio is managed by none other than Soloman Smith Barney.

“Furthermore, by joining McCain on the tdicket, Palin is now endorsing a radical $300 billion in tax breaks for corporations and the wealthy that would leave out mllions of American families while delivering $45 billion in tax breaks for America’s 200 largest corporations and at leasdt $6.3 billion for American’s largest financial firms.”

Click here to read B. Furnas’ blog, Sarah Palin’s Portfolio Managed By Smith Barney, Her Policies Would Fail Barney Smith, from the Center for American Progress Action Fund’s blog, The Wonk Room.

Check the following link for more telling bio information on Palin from The Wonk Room

The heads and stories in order make the point: “What Does Sarah Palin Thionk Of McCain’s Opposition to Equal Pay? Would Palin Still Carry a Pitchfork for Pat? Sarah Palin’s Portfolio Managed by Smith Barney, Her Policies Would Fail Smtih Barney. Sarah Palin: a Champion For Big Oil. On His Key Issue: McCain VP Pick Rolls The Dice. McCain And Palin: Promoting Failed Consumer-Driven Health Care.

41st Anniversary Special: The perils of privatization

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Click here for Amanda Witherell’s exclusive interview with Columbia professor Elliott Sclar

› amanda@sfbg.com

Over the past few weeks almost every major news outlet in the country has reported on Blackwater, a private company the US government hired to do work in Iraq that was once the exclusive province of soldiers.

The deal hasn’t gone so well: on Sept. 16, Blackwater guards opened fire and, according to the Iraqi government, shot 25 civilians. The incident set off an international furor and has brought into focus the breadth of the company’s work for the US government. It’s prompted an investigation by the House Committee on Oversight and Government Reform, which showed that since 2001, Blackwater’s federal contracts have increased 80,000 percent. It’s revealed the massive pay inequalities between private security guards and US soldiers — the cost of one private guard could pay the salaries of six soldiers.

And it’s raised a question that’s critical to understanding how government increasingly works in the United States: should a private company be doing the work of the military?

Privatization of public services is all the rage in this country now, at all levels of government, from Washington DC to San Francisco. Supporters say the private sector can often work better and more efficiently than the old, bureaucratic, much-maligned government.

But Blackwater is a great example of the perils of privatization. And there are many more.

STARVE THE BEAST


Over the past few decades governments at all levels in this country have been in a near-perpetual state of deficit. Taxes are way down from their historic post–World War II levels, and except for a brief period during the tech boom, there is rarely enough money for even basic social services.

"It’s been a strategy since the ’70s to, as Grover Norquist calls it, ‘starve the beast,’<0x2009>" Robert Haaland, an organizer with Service Employees International Union Local 1021, told us.

And because politicians, even Democrats, are terrified of tax hikes, they’ve been looking for more efficient ways to use the money they have. The magic bullet goes by many names — privatization, public-private partnerships, competitive outsourcing, creative financing solutions — but the basic idea is to allow the power of competition, set free in an unregulated market, to provide the public with the best services at the lowest cost.

"To do or to buy is the question that all governments face," says Ken Jacobs, director of UC Berkeley’s Labor Center.

We’ve been buying. Since 2000, outsourcing of federal dollars has increased 100 percent, to $422 billion in taxpayer funds in 2006, according to a September study by the Washington DC US Public Interest Research Group. The US government is now the private sector’s largest customer.

San Francisco may be known as one of the most progressive cities in the country, but this town has also been wooed by public-private partnerships with promises of improvements to the golf courses, construction of a new power plant, and funding for the many civic needs we have.

PRIVATIZE MUNI?


Cheerleaders for privatization look at someone like Nathaniel Ford, executive director of San Francisco’s Metropolitan Transit Authority, and see everything that’s wrong with the public sector. Ford’s salary is nearly $300,000, plenty high enough to attract a talented leader. But the Muni system he runs keeps the average San Franciscan waiting on the corner in the morning, delivers that person to work at an unpredictable hour, and lurches them homeward every night aboard a standing-room-only bus. Nobody thinks Muni is performing well.

That makes the case for privatization seem almost appealing.

"The public has been schooled to think that government is the problem, not the solution," Elliott Sclar, professor of economics at Columbia University, told us. In his 2000 book on privatization, You Don’t Always Get What You Pay For: The Economics of Privatization (Cornell University), he writes, "American folk wisdom holds that, by and large, public service is uncaring, unbending, bureaucratic, and expensive, whereas competitively supplied private services such as FedEx are efficient and responsive."

Competition, the privatizers say, drives innovation. Less red tape means more efficiency. A lack of unions and collective bargaining agreements translates to lower labor costs. Large-scale multinational operations can reduce redundancy and streamline their processes — all of which adds up to a lean-running machine.

But this country has a lot of experience with privatization, and the record isn’t good.

One hundred years ago private companies did a lot of what we now call government work. "Contracting out was the way American cities carried out their governmental business ever since they grew beyond their small village beginnings," writes Moshe Adler, a Columbia professor of economics, in his 1999 paper The Origins of Governmental Production: Cleaning the Streets of New York by Contract During the 19th Century. At one time private companies provided firefighting, trash collection, and water supplies, to name just a few essential services.

But according to Adler, "By the end of the 19th century contracting out was a mature system that was already as good as it could possibly be. And it was precisely then that governmental production came to America. The realization that every possible improvement to contracting out had been tried led city after city to declare its failure."

For example, the 1906 earthquake and subsequent fires in San Francisco were what prodded the city to municipalize water service after the company charged with the task, Spring Valley Water, failed to deliver while the fires raged.

In Philadelphia as well as San Francisco, the business of firefighting was once very lucrative — for both the firefighting companies and the arsonists who were paid to set fires for the former to fight. And corruption was rampant. "Large amounts of public contracting out historically created lots of opportunities for fraud and nepotism," Jacobs said.

So public agencies stepped in to provide basic services as cheaply and uniformly as possible. Towns and cities took on the tasks of security with police and firefighting, education with schools and libraries, and sanitation with trash collection and wastewater treatment. Nationally, the federal government improved roads and transit, enacted Social Security benefits, and established a National Park System, among many other things.

And then, about 30 years ago, the pendulum started to swing the other way. Driven by University of Chicago economist Milton Friedman, enacted in a massive policy shift by Ronald Reagan, proliferated by Grover Norquist and the neocon agenda, and fully appreciated by corporations and private companies, privatization came back.

In Reagan’s first term, he cut taxes 25 percent overall; the rich got a 40 percent cut. Domestic spending fell by half a trillion dollars in the 1980s, although any savings were countered by a rise in the defense budget.

Harvard economist Lawrence Summers, quoted in Looking Back on the Reagan Presidency (Johns Hopkins University), put it this way: "The Reagan budgets will influence the government for the rest of this century. Just as the Great Society left an imprint of Federal commitment to help the indigent and equality of opportunity, the Reagan budget deficits will leave an imprint of non-involvement."

Such a massive realignment of money coupled with tax breaks too politically painful to reinstate led to a boom in the outsourcing of public services. Private companies began doing more municipal work, while nonprofit organizations tried to fill the gaps in funding for social services, welfare, housing, health care, and the environment.

The George W. Bush era has seen even more overt outsourcing. These days no-bid contracts are preferred, and at times government services are completely turned over to the private sector in "direct conversions," and the public agency that once did the job is not allowed to compete to keep it. The Washington Post recently reported that no-bid government contracts have tripled in the past six years.

This doesn’t really sound like the competitive free market espoused by the theory of privatization.

FLUNKING THE TEST


To field-test the primacy of privatization, the Reagan administration sponsored a transportation experiment in the early ’80s: Miami’s Metro-Dade Transit Agency got to compete against Greyhound. The two providers were each given five comparable transit routes to manage over three years, and 80 new buses were bought with a $7.5 million grant from the federal government.

After 18 months 30 of the Greyhound buses were so badly damaged that they had to be permanently pulled from service. Passenger complaints on the Greyhound line were up 100 percent, and ridership was down 31 percent over the course of a year.

Why? There was no incentive in Greyhound’s contract to maintain the equipment or retain riders. The company’s only goal was to deliver the cheapest service possible.

The Miami transit contract could have contained clauses calling for regular inspections or guaranteed ridership, but that would have significantly increased the cost of the work — perhaps to the point where it would have been competitive with what the city provided.

That’s an important lesson in privatization politics: when you add the cost of adequately protecting the public’s interest and monitoring contract compliance, the private sector doesn’t look so efficient.

Which is why many say privatization only succeeds as a theory — and why, for all the problems with Muni, no private company is likely to be able to do a better job.

"Market fundamentalists present an idealized, simpleminded notion of competitive markets in which buyers and sellers have equal knowledge," Sclar told us. "Anyone can be a buyer, anyone can be a seller, everyone can evaluate the quality of the good. In this never-never land, that’s often the way the case is made for privatization by this particular group of economists."

In the real world a number of issues arise when a service goes private. "Accountability gets to be a really big problem," Ellen Dannin, professor of law at Penn State University, said in an interview. "There are predictions about how much money will get saved through privatization, but no one ever goes back to check."

The September study by the US Public Interest Research Group profiled several companies that do government work, including Bank of America, LexisNexis, ChoicePoint, KBR (formerly Kellogg, Brown, and Root), General Electric, and Raytheon, and found instances of illegal behavior in all cases. There were often massive errors in the companies’ work.

Bank of America and LexisNexis had security breaches compromising the data of at least 1.5 million customers they were handling for the government. ChoicePoint allowed identity-theft scams amounting to more than $1 million in fraud. KBR overcharged the government millions of dollars for work in Iraq and Kuwait. GE made defective helicopter blades for the US military. Raytheon failed to fully test the systems of new aircraft. These companies are all still employed by the government.

When companies take over services that aren’t typically part of a competitive market, all sorts of unexpected problems occur. Jacobs points to the rash of contracting for busing services in cash-strapped school districts. Not only did costs eventually rise in many places, but when schools tried to go back to providing their own service, the skilled drivers who knew the routes, knew the kids, and were able to do much more than drive a bus were gone.

Sclar and Dannin agree that any service that lacks competition should be public. Sclar presented the example of electricity. "It’s a natural monopoly," he said. "Essentially it’s either going to be a well-regulated industry or it’s got to be done publicly."

Corporations exist to make money. And although graft, mismanagement, and scandal have always been present in City Halls around the country, in the end the legislative, judicial, and executive branches were not designed to generate profits. That alone means contracting out is financially dubious.

Hiring mercenaries is a classic example. "It costs the US government a lot more to hire contract employees as security guards in Iraq than to use American troops," Walter Pincus wrote in an Oct. 1 article in the Washington Post. "It comes down to the simple business equation of every transaction requiring a profit."

As Pincus details one of the many contracts between the security firm and the US, "Blackwater was a subcontractor to Regency, which was a subcontractor to another company, ESS, which was a subcontractor to Halliburton’s KBR subsidiary, the prime contractor for the Pentagon — and each company along the way was in the business to make a profit."

Blackwater charged Regency between $815 and $1,075 per day per security operative. Regency turned around and charged ESS a slightly higher average of $1,100. After that, the costs dissolve into the enormous bill that KBR regularly hands the federal government.

When the US Army is paying the bill the costs are far lower. An unmarried sergeant earns less than $100 a day. If you’re married, it’s less than $200. If you’re Gen. David H. Petraeus, it’s about $500 — less than Blackwater’s lowest-paid workers.

Very little about the Blackwater contracts would be known by anyone outside the company if it weren’t for the federal investigation, since private businesses are not subject to the same public-records laws as the federal government. They don’t have to open their books or publicize the details of their bids and contracts, and they often fiercely lobby against any regulations requiring this, which leaves the door wide open for corruption — which is what brought sunshine laws to government in the first place.

Sclar said that when it’s a good call to contract out, corporations, private companies, and nonprofits should be required to abide by public-records laws in addition to adhering to a five-year wait for employees departing the public sector for the private. "I think transparency should always be the goal," he said. "As much information as possible." If a company doesn’t want to make its records public, he told us, "[it shouldn’t] go after public work."

THE AIDS LESSON


Privatization comes in many forms and emerges for what often seem like good reasons.

In the early 1980s gay men in San Francisco were starting to get sick and die in large numbers — and the federal government didn’t care. There was no government agency addressing the AIDS crisis and almost no government funding. So the community came together and created a network of nonprofits that funded services, education, and research.

"The AIDS Foundation was founded in response to the epidemic at a time when there wasn’t a response from the federal government," Jeff Sheehy of the AIDS Research Center at UC San Francisco told us.

At first, activists all over the country praised the San Francisco model of AIDS services. Over time the nonprofits began to get government grants and contracts. But by the 1990s some realized that the nonprofit network was utterly lacking in public accountability. The same activists who had helped create the network had to struggle to get the organizations to hold public meetings, make records public, and answer community concerns.

That, Sheehy said, shouldn’t have come as a surprise.

"There isn’t that same degree of accountability that you would have" with the public sector, he told us. "SF General is not going to turn you away at the emergency room, but nonprofit hospitals are less and less interested in running ERs."

Sheehy said he’s seen cases where difficult clients have been banned from accessing help from nonprofits. Unlike at public institutions, "the burden is not on the agency to provide the service. It is with the client to get along with the agency," he said.

Sheehy outlines other issues: nonprofits run lean and are more apt to make cuts and resist unionization, which means workers are often paid less, there can be higher turnover, and upper management is often tasked with fundraising and grant writing and distanced from the fundamental work of the group. There’s no access to records or board meetings. "If service takes a sudden downward shift, what can you do?" Sheehy asks. "You can’t go to board meetings. You can’t access records. What’s your redress?"

And that perpetuates the problem of government not stepping up to the plate. More than half of the social services in San Francisco are run by nonprofits, a trend that isn’t abating.

"When the services are shifted from the public sector to the nonprofit sector," Sheehy said, "that capacity is lost forever from government."

THE LOTTERY TICKET


When Dannin teaches her students about privatization, she uses the analogy of personal finance. "If I find my income does not meet my expenses, I can cut my expenses, but there are certain things I have to have," she said. To meet those needs a person can get a second job. In the case of the government, it can raise taxes.

But "that is not an option governments see anymore," she told us. "So the third option is to buy a lottery ticket — and that’s what privatization is."

When a publicly owned road is leased for 99 years to a private company, the politician who cut the deal gets a huge chunk of cash up front to balance the local budget or meet another need. When the new owner of the road puts in a tollbooth to recoup costs, that’s the tax the politician, who may be long gone, refused to impose. What option does the voting driver have now?

Public goods, from which everyone presumably benefits, are frequently and easily falling out of the hands of government and into the hands of profit-driven companies. In New Orleans, charter schools have replaced all but four public schools. In about 15 municipalities public libraries are now managed by the privately owned Library Systems and Services. (In Jackson County, Ore., it’s being done for half the cost, but with half the staff and open half the hours.) At least 21 states are considering public-private partnerships to finance massive improvements to aging roads and bridges. User fees have increased in the national parks as rangers have been laid off and some of the work of park interpretation is picked up by private companies, as is the case with Alcatraz Island.

Dannin also asks her students to consider who really owns a job. The easy answer is the employer. "But there is another claimant of ownership of that job," she says. "That is the public. Employers depend on roads for their employees to drive to work, a public education system to train their workers. They depend on housing, police, the court system, the system of laws. That is a huge amount of infrastructure we tend not to think about.

"We live within an ecosystem. We’re having a hard time seeing that ecosystem, that infrastructure that we’re all in. That’s what your taxes pay for."

Fast, cheap, and out of control

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tredmond@sfbg.com

Click here for the Guardian‘s interview with Robert Reich.

The fall of the Berlin Wall in 1989 led a lot of pundits to talk about “the end of History.” The big battle of our lives, the defining philosophical and political conflict of the century, was over. Communism lost. Capitalism won.

But in the United States, the real war was just getting under way, a conflict between two visions of society: in one, the public sector, operating under a democratic system, dominated economic and political life; in the other, the central players in the game of life were private corporations. This war, which drags on today, poses a profound question: does the capitalist economy work for us — or are we slaves to its whims? The answer continues to transform almost every aspect of American life.

Clinton-era labor secretary Robert Reich, now a professor at UC Berkeley’s Goldman School of Public Policy, takes on a big piece of this epic struggle in his new book, Supercapitalism: The Transformation of Business, Democracy and Everyday Life. The cogent, well-documented, and critically important argument he makes is that the American people have prospered as consumers and investors at the expense of their role as citizens.

And in the end, we’ve been hurting ourselves.
This is the essential paradox of modern global capitalism: you can buy high-end electronics cheap, get amazing bargains at Wal-Mart, enjoy the growth of your 401(k) plan — and in the process, become poorer. Because the race to the bottom of the price chain and the top of the market has costs, and in the end, we’re all paying them. The only solution, Reich says, is a more aggressive government: more regulation, higher taxes, and, quite possibly, some consumer and investor sacrifices.

Reich goes back to what he calls the “Not Quite Golden Age,” the roughly 25 years after the end of World War II that were marked by continuous economic growth, relative prosperity, and remarkable (compared with today) economic equality. The top tax rate, for the very rich, was 91 percent (compared with 35 percent today). American industry was controlled by an oligopoly, in which a handful of businesses held the reins — and because they faced little competition, they were able to share their profits with labor. Back then, companies didn’t distribute their wealth to investors; it went to the employees.

For all the denunciation of socialism and idolization of the free market that goes on in American politics today, Reich points out that cold war America was defined by centralized economic planning. It just wasn’t the government doing that job; it was private industry.

He doesn’t contend that the model in operation back then was perfect — and anyone who has followed the postwar transformation of San Francisco, driven by secret private-sector planning, knows the painful impacts of such policies. But public resources were adequate to pay for massive infrastructure advances (the interstate highway system), gigantic educational benefits (the GI bill), and phenomenal tax breaks for home ownership. Labor unions, dealing with domestic companies that didn’t face competitors with cheaper offshore labor, were able to negotiate a division of the wealth that helped create the modern American middle class.

The gap between rich and poor was much, much smaller during that period than it is today; as Reich notes, “the potent incentive of great wealth was often absent,” so the economy was far more equitable and stable. High taxes on the rich didn’t slow a period of remarkable economic growth. And in 1964, 75 percent of the American public thought the government could be trusted to do the right thing most of the time — a statistic that seems inconceivable today.

That was, of course, before Vietnam, before Watergate, before the (first) energy crisis, stagflation, the California tax revolt, and cultural disillusion with the public sector, factors Reich doesn’t discuss in great detail.

But he does point to the changes that came in the 1980s and later: Deregulation, which transformed the banking industry, turning savers into investors. Globalization, which created a cutthroat type of capitalism promoting low prices and high returns at any cost. And government policies — such as the creation of private retirement plans and the promotion of the stock market as the central tool of investment — that encouraged Americans to focus on their own bottom line and ignore the larger issues facing society.

The result today, Reich says, is a supercapitalist world, in which you can fill your house with amazing piles of cheap stuff — but in the end those bargains wind up hurting you. “Consumers get great deals because workers get shafted,” he notes. “Ironically, they’re often the same people.”

Unlike a lot of people on the left, Reich doesn’t go around bashing big corporations and blaming them for society’s ills. In today’s ultracompetitive world, he says, corporations are simply doing what they have to do to survive: cutting costs, fighting for the bottom line, striving for the best possible returns for investors. There is no such thing as corporate social responsibility, he argues; under supercapitalism, it’s all about making money.
Instead of complaining about corporate greed, he says, we need to think as citizens and demand new rules, new laws and regulations, that force companies to do what we want them to do. We have to take back control of the American economy — and to do that, we have to reclaim democracy.

Reich places a large part of the blame on the role money has assumed in politics. He suggests that corporations, which are in reality just paper constructs, should be stripped of any rights to legal standing, any rights to participate in the public process — any rights to act as anything but pieces of paper. Campaign contributions should all be put into blind trusts: anyone could give money to a candidate, but that candidate would never be allowed to know who gave what.

Those reforms would be tough, and they might not happen anytime soon. But the value of this book isn’t in promoting any specific policy prescription. It’s about waking up and educating several generations of Americans who can’t seem to understand that you can’t have it all for free: that a decent society with universal health care, good public education, safe cities, and a commitment to protecting the environment requires some sacrifice; that the very rich (and even the run-of-the-mill well-off) among us have to pay taxes and accept responsibility for a decent nation and a decent world. That means creating a public sector we can trust — and not dismissing out of hand the notion that government has a positive role to play.

It’s the most important message anyone can impart today to the deluded, selfish population that makes up so much of modern America.

READING
Oct. 16, 7:30 p.m., free
Moe’s Books
2476 Telegraph, Berk.
(510) 849-2087, www.moesbooks.com

SUPERCAPITALISM: THE TRANSFORMATION OF BUSINESS, DEMOCRACY AND EVERYDAY LIFE
By Robert Reich
Knopf
272 pages
$25

Sutter bleeds St. Luke’s

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› gwschulz@sfbg.com

Dr. Bonita Palmer has worked at the embattled St. Luke’s Hospital on the southwest corner of César Chávez and Valencia for 17 years.

Before a packed room of union organizers and religious leaders Sept. 12 at St. Mary’s Cathedral near Japantown, she gave a brief speech about her experiences at the beloved but financially troubled hospital.

"St. Luke’s has been struggling to stay afloat for many years," Palmer told the audience. "Under managed care, reimbursements are down, the numbers of uninsured patients are up, and the growing gap between income and cost of care stresses the health of working people."

Money woes at St. Luke’s are no secret. Its parent company, California Pacific Medical Center, an otherwise lucrative group of San Francisco hospitals owned by Sacramento’s Sutter Health, describes the losses at St. Luke’s as anywhere from $20 million to $30 million annually.

Patient advocates and unions representing St. Luke’s workers have long feared closure of the hospital and its badly needed acute-care services, which thousands of residents — the city’s poorest among them, living nearby in the SoMa, Mission, and Bayview–Hunters Point neighborhoods — often visit when they can’t get expensive medical treatment elsewhere.

The hospital continually faces cuts executed by the CPMC, from its downgraded neonatal nursery to the subacute unit, where, Palmer says, patients who require nonemergency but highly specialized care from professionals are being turned away. "Sutter scrapped its plan for a much-needed upgrade to our emergency room even as we continue to receive the overflow of patients from" San Francisco General Hospital, she said.

Staffers learned most recently that outpatient physical therapy, which had already been trimmed, will be done away with completely, while the hospital’s 36-bed inpatient psychiatric unit and outpatient clinic have already been closed. A woman in the audience confessed afterward that she was nearly brought to tears by Palmer’s tale.

The decisions only worsened Sutter’s reputation across Northern California for dwelling on its bottom line and further enraged the United Healthcare Workers–West union, which represents thousands of Sutter workers and with which the company has regularly battled for a decade.

St. Luke’s contains one of the most active emergency rooms in the city, and aside from General Hospital a mile or so away on Potrero Avenue, it serves more patients benefiting from Medi-Cal and Sutter’s version of charity care services than just about any other facility.

The CPMC, which fully merged with St. Luke’s in January, promises the hospital will be a part of the company’s future. But the CPMC also comes closer every day to beginning construction of a new $1.7 billion hospital on Cathedral Hill, closer to the city’s wealthiest neighborhoods. And critics worry that CPMC’s new bid proves not only where its priorities are but also that once-independent St. Luke’s — opened in 1871 by an Episcopal minister — will suffer death by a thousand cuts.

Sup. Tom Ammiano, who’s closely observed the fate of St. Luke’s for years, says the CPMC is slowly amputating one of the few hospitals left in the southern portion of San Francisco while paying lip service to nonprofit health outreach.

"They lie without guile," he said. "Waterboarding would be more enjoyable than dealing with these people."

Sutter initially took over St. Luke’s in 2001 as part of a settlement agreement after the hospital sued Sutter in 1999, alleging state antitrust violations in Sutter’s brokering of an exclusive contract with the Bay Area’s largest network of doctors. St. Luke’s officials claimed the contract stripped wealthier patients away from the hospital, which hurt its bottom line.

The settlement required Sutter to bankroll St. Luke’s with a series of subsidies — and included a promise of up to $20 million for needed retrofit work that doesn’t appear to have been done — while allowing the hospital to remain somewhat independent. The terms expired last year, and St. Luke’s has since been completely folded into the family of San Francisco hospitals known as the CPMC, which includes the Davies Campus, nestled between the Castro neighborhood and the Lower Haight, the Pacific Campus on Buchanan Street, and the California Campus in the opulent Pacific Heights area.

While St. Luke’s can’t complete a fiscal-year cycle without coming up short of cash, the CPMC as a subsidiary of Sutter Health earns tens of millions of dollars in net income annually, much of which is sent to Sutter’s home office in Sacramento. In 2003, for instance, the CPMC transferred $118 million in net income — the money remaining after expenses are covered, which any other business would call profit — out of the city. Other ailing Sutter-owned hospitals around the state receive inflows of money from Sacramento, such as a Santa Rosa medical center that got $16 million in 2003, according to documents Sutter must provide to the state.

"In good times, affiliates share a portion of their revenue in excess of their expenses to help strengthen the network through this shared balance-sheet approach," Sutter spokesperson Karen Garner told us. "And in times of need, our affiliates can count on the network to help ensure that those services can continue to be available to their local communities."

But Sutter has announced that it plans to close part of the money-losing Sutter Medical Center of Santa Rosa, which faces high seismic retrofit costs, fueling concerns that something similar will happen at St. Luke’s. Sutter also last year moved to sever ties with Marin General Hospital and wash its hands of a costly needed retrofit there. An acute-care facility in San Leandro that loses money may soon be closed as well, as locals there learned just this month when a Sutter employee leaked the news to the San Leandro Times.

"CPMC plans to stop serving unprofitable areas, ignoring their obligation to the community," Helen York Jones, a union steward of CPMC employees, said at a July rally outside St. Luke’s. "How can they be entrusted with a large share of the area’s health care system?"

For a supposedly nonprofit chain of hospitals, Sutter Health is very profitable, having one of its best years in 2006. Its net income from operations amounted to more than $500 million, an increase of 33 percent from the previous year, which its execs attributed to the company’s outsize investments. Sutter controls more than two dozen medical centers throughout California and one located in Hawaii.

The company’s mammoth $2 billion investment portfolio brought the company $159 million in returns last year. Sutter’s CPMC subsidiary also benefited from more than $50 million in local, state, and federal tax breaks during 2005, according to figures maintained by the San Francisco Department of Public Health.

Meanwhile, Sutter has announced plans to spend $1.1 billion fully replacing facilities in Sacramento and San Mateo. In fact, the company broke records in June when it acquired state-backed bond financing of $958 million — which essentially amounts to a low-interest, tax-free loan — which it intends to use for seismic retrofit projects at several of its hospitals across the state.

But according to state records, the company doesn’t intend to use any of the loan money for retrofitting the St. Luke’s campus, part of which the state has concluded poses "a significant risk of collapse and a danger to the public after a strong earthquake," according to state structural ratings. State law gives hospitals until 2013 to meet strict seismic standards or shut down.

"Sutter wants to use money to fuel their corporate expenses in markets that are making money or have the potential to make money," Sal Roselli, president of the United Healthcare Workers–<\d>West, said.

Roselli believes the CPMC wants to close the emergency room at St. Luke’s and more or less turn the hospital into a clinic, perhaps once the Cathedral Hill location is completed; Sutter, he said, promises to maintain community services during its hospital takeovers but often backslides on those promises within months.

CPMC spokesperson Kevin McCormack doesn’t outright deny the possibility that St. Luke’s will someday see vastly fewer ER patients.

"St. Luke’s is still going to be a vital part of anything we do in terms of providing health care in San Francisco," McCormack said. "We intend to strengthen its role — not just to keep it going, but to make it better. Because right now what happens is that a lot of people don’t have access to preventative care, so they end up using the emergency room when they have a problem with, say, diabetes or asthma."

But Ammiano remains skeptical.

"If we allow this to happen and if we can’t find alternatives," he said of the cuts at St. Luke’s, "it’s really going to not just tear a hole in the fabric of that neighborhood but also the whole southeast section."

Censored!

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>>Project Censored’s 15 missed-story runners up

>>Big local stories that never made mainstream headlines

>>The story behind a censored story that was killed by The Nation

amanda@sfbg.com

There are a handful of freedoms that have almost always been a part of American democracy. Even when they didn’t exactly apply to everyone or weren’t always protected by the people in charge, a few simple but significant rights have been patently clear in the Constitution: You can’t be nabbed by the cops and tossed behind bars without a reason. If you are imprisoned, you can’t be incarcerated indefinitely; you have the right to a speedy trial with a judge and jury. When that court date rolls around, you’ll be able to see the evidence against you.

The president can’t suspend elections, spy without warrants, or dispatch federal troops to trump local cops or quell protests. Nor can the commander in chief commence a witch hunt, deem individuals "enemy combatants," or shunt them into special tribunals outside the purview of our 218-year-old judicial system.

Until now. This year’s Project Censored presents a chilling portrait of a newly empowered executive branch signing away civil liberties for the sake of an endless and amorphous war on terror. And for the most part, the major news media weren’t paying attention.

"This year it seemed like civil rights just rose to the top," said Peter Phillips, the director of Project Censored, the annual media survey conducted by Sonoma State University researchers and students who spend the year patrolling obscure publications, national and international Web sites, and mainstream news outlets to compile the 25 most significant stories that were inadequately reported or essentially ignored.

While the project usually turns up a range of underreported issues, this year’s stories all fall somewhat neatly into two categories — the increase of privatization and the decrease of human rights. Some of the stories qualify as both.

"I think they indicate a very real concern about where our democracy is heading," writer and veteran judge Michael Parenti said.

For 31 years Project Censored has been compiling a list of the major stories that the nation’s news media have ignored, misreported, or poorly covered.

The Oxford American Dictionary defines censorship as "the practice of officially examining books, movies, etc., and suppressing unacceptable parts," which Phillips said is also a fine description of what happens under a dictatorship. When it comes to democracy, the black marker is a bit more nuanced. "We need to broaden our understanding of censorship," he said. After 11 years at the helm of Project Censored, Phillips thinks the most bowdlerizing force is the fourth estate itself: "The corporate media is complicit. There’s no excuse for the major media giants to be missing major news stories like this."

As the stories cited in this year’s Project Censored selections point out, the federal government continues to provide major news networks with stock footage, which is dutifully broadcast as news. The George W. Bush administration has spent more federal money than any other presidency on public relations. Without a doubt, Parenti said, the government invests in shaping our beliefs. "Every day they’re checking out what we think," he said. "The erosion of civil liberties is not happening in one fell swoop but in increments. Very consciously, this administration has been heading toward a general autocracy."

Carl Jensen, who founded Project Censored in 1976 after witnessing the landslide reelection of Richard Nixon in 1972 in spite of mounting evidence of the Watergate scandal, agreed that this year’s censored stories amount to an accumulated threat to democracy. "I’m waiting for one of our great liberal writers to put together the big picture of what’s going on here," he said.

1. GOOD-BYE, HABEAS CORPUS


The Military Commissions Act, passed in September 2006 as a last gasp of the Republican-controlled Congress and signed into law by Bush that Oct. 17, made significant changes to the nation’s judicial system.

The law allows the president to designate any person an "alien unlawful enemy combatant," shunting that individual into an alternative court system in which the writ of habeas corpus no longer applies, the right to a speedy trial is gone, and justice is meted out by a military tribunal that can admit evidence obtained through coercion and presented without the accused in the courtroom, all under the guise of preserving national security.

Habeas corpus, a constitutional right cribbed from the Magna Carta, protects against arbitrary imprisonment. Alexander Hamilton, writing in the Federalist Papers, called it the greatest defense against "the favorite and most formidable instruments of tyranny."

The Military Commissions Act has been seen mostly as a method for dealing with Guantánamo Bay detainees, and most journalists have reported that it doesn’t have any impact on Americans. On Oct. 19, 2006, editors at the New York Times wrote, in quite definitive language, "this law does not apply to American citizens."

Investigative journalist Robert Parry disagrees. The right of habeas corpus no longer exists for any of us, he wrote in the online journal Consortium. Deep down in the lower sections of the act, the language shifts from the very specific "alien unlawful enemy combatant" to the vague "any person subject to this chapter."

"Why does it contain language referring to ‘any person’ and then adding in an adjacent context a reference to people acting ‘in breach of allegiance or duty to the United States’?" Parry wrote. "Who has ‘an allegiance or duty to the United States’ if not an American citizen?"

Reached by phone, Parry told the Guardian that "this loose phraseology could be interpreted very narrowly or very broadly." He said he’s consulted with lawyers who are experienced in drafting federal security legislation, and they agreed that the "any person" terminology is troubling. "It could be fixed very simply, but the Bush administration put through this very vaguely worded law, and now there are a lot of differences of opinion on how it could be interpreted," Parry said.

Though US Sens. Patrick Leahy (D-Vt.) and Arlen Specter (R-Pa.) moved quickly to remedy the situation with the Habeas Corpus Restoration Act, that legislation has yet to pass Congress, which some suspect is because too many Democrats don’t want to seem soft on terrorism. Until tested by time, exactly how much the language of the Military Commissions Act may be manipulated will remain to be seen.

Sources: "Repeal the Military Commissions Act and Restore the Most American Human Right," Thom Hartmann, Common Dreams Web site, www.commondreams.org/views07/0212-24.htm, Feb. 12, 2007; "Still No Habeas Rights for You," Robert Parry, Consortium (online journal of investigative reporting), consortiumnews.com/2007/020307.html, Feb. 3, 2007; "Who Is ‘Any Person’ in Tribunal Law?" Robert Parry, Consortium, consortiumnews.com/2006/101906.html, Oct. 19, 2006

2. MARTIAL LAW: COMING TO A TOWN NEAR YOU


The Military Commissions Act was part of a one-two punch to civil liberties. While the first blow to habeas corpus received some attention, there was almost no media coverage of a private Oval Office ceremony held the same day the military act was signed at which Bush signed the John Warner Defense Authorization Act, a $532 billion catchall bill for defense spending.

Tucked away in the deeper recesses of that act, section 1076 allows the president to declare a public emergency and dispatch federal troops to take over National Guard units and local police if he determines them unfit for maintaining order. This is essentially a revival of the Insurrection Act, which was repealed by Congress in 1878, when it passed the Posse Comitatus Act in response to Northern troops overstaying their welcome in the reconstructed South. That act wiped out a potentially tyrannical amount of power by reinforcing the idea that the federal government should patrol the nation’s borders and let the states take care of their own territories.

The Warner act defines a public emergency as a "natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any state or possession of the United States" and extends its provisions to any place where "the president determines that domestic violence has occurred to such an extent that the constituted authorities of the state or possession are incapable of maintaining public order." On top of that, federal troops can be dispatched to "suppress, in a state, any insurrection, domestic violence, unlawful combination, or conspiracy."

So everything from a West Nile virus outbreak to a political protest could fall into the president’s personal definition of mayhem. That’s right — put your picket signs away.

The Warner act passed with 90 percent of the votes in the House and cleared the Senate unanimously. Months after its passage, Leahy was the only elected official to have publicly expressed concern about section 1076, warning his peers Sept. 19, 2006, that "we certainly do not need to make it easier for presidents to declare martial law. Invoking the Insurrection Act and using the military for law enforcement activities goes against some of the central tenets of our democracy. One can easily envision governors and mayors in charge of an emergency having to constantly look over their shoulders while someone who has never visited their communities gives the orders." In February, Leahy introduced Senate Bill 513 to repeal section 1076. It’s currently in the Armed Services Committee.

Sources: "Two Acts of Tyranny on the Same Day!" Daneen G. Peterson, Stop the North America Union Web site, www.stopthenorthamericanunion.com/articles/Fear.html, Jan. 20, 2007; "Bush Moves toward Martial Law," Frank Morales, Uruknet.info (Web site that publishes "information from occupied Iraq"), www.uruknet.info/?p=27769, Oct. 26, 2006

3. AFRICOM


President Jimmy Carter was the first to draw a clear line between America’s foreign policy and its concurrent "vital interest" in oil. During his 1980 State of the Union address, he said, "An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force."

Under what became the Carter Doctrine, an outpost of the Pentagon, called the United States Central Command, or CENTCOM, was established to ensure the uninterrupted flow of that slick "vital interest."

The United States is now constructing a similar permanent base in Africa, an area traditionally patrolled by more remote commands in Europe and the Pacific. No details have been released about exactly what AFRICOM’s operations and responsibilities will be or where troops will be located, though government spokespeople have vaguely stated that the mission is to establish order and keep peace for volatile governments — that just happen to be in oil-rich areas.

Though the official objective may be peace, some say the real desire is crude. "A new cold war is under way in Africa, and AFRICOM will be at the dark heart of it," Bryan Hunt wrote on the Moon of Alabama blog, which covers politics, economics, and philosophy. Most US oil imports come from African countries — in particular, Nigeria. According to the 2007 Congressional Budget Justification for Foreign Operations, "disruption of supply from Nigeria would represent a major blow to US oil-security strategy."

Though details of the AFRICOM strategy remain secret, Hunt has surveyed past governmental statements and reports by other independent journalists to draw parallels between AFRICOM and CENTCOM, making the case that the United States sees Africa as another "vital interest."

Source: "Understanding AFRICOM," parts 1–3, b real, Moon of Alabama, www.moonofalabama.org/2007/02/understanding_a_1.html, Feb. 21, 2007

4. SECRET TRADE AGREEMENTS


As disappointing as the World Trade Organization has been, it has provided something of an open forum in which smaller countries can work together to demand concessions from larger, developed nations when brokering multilateral agreements.

At least in theory. The 2006 negotiations crumbled when the United States, the European Union, and Australia refused to heed India’s and Brazil’s demands for fair farm tariffs.

In the wake of that disaster, bilateral agreements have become the tactic of choice. These one-on-one negotiations, designed by the US and the EU, are cut like backroom deals, with the larger country bullying the smaller into agreements that couldn’t be reached through the WTO.

Bush administration officials, always quick with a charming moniker, are calling these free-trade agreements "competitive liberalization," and the EU considers them essential to negotiating future multilateral agreements.

But critics see them as fast tracks to increased foreign control of local resources in poor communities. "The overall effect of these changes in the rules is to progressively undermine economic governance, transferring power from governments to largely unaccountable multinational firms, robbing developing countries of the tools they need to develop their economies and gain a favorable foothold in global markets," states a report by Oxfam International, the antipoverty activist group.

Sources: "Free Trade Enslaving Poor Countries" Sanjay Suri, Inter Press Service (global news service), ipsnews.org/news.asp?idnews=37008, March 20, 2007; "Signing Away the Future" Emily Jones, Oxfam Web site, www.oxfam.org/en/policy/briefingpapers/bp101_regional_trade_agreements_0703, March 2007

5. SHANGHAIED SLAVES CONSTRUCT US EMBASSY IN IRAQ


Part of the permanent infrastructure the United States is erecting in Iraq includes the world’s largest embassy, built on Green Zone acreage equal to that of Vatican City. The $592 million job was awarded in 2005 to First Kuwaiti Trading and Contracting. Though much of the project’s management is staffed by Americans, most of the workers are from small or developing countries like the Philippines, India, and Pakistan and, according to David Phinney of CorpWatch — a Bay Area organization that investigates and exposes corporate environmental crimes, fraud, corruption, and violations of human rights — are recruited under false pretenses. At the airport, their boarding passes read Dubai. Their passports are stamped Dubai. But when they get off the plane, they’re in Baghdad.

Once on site, they’re often beaten and paid as little as $10 to $30 a day, CorpWatch concludes. Injured workers are dosed with heavy-duty painkillers and sent back on the job. Lodging is crowded, and food is substandard. One ex-foreman, who’s worked on five other US embassies around the world, said, "I’ve never seen a project more fucked up. Every US labor law was broken."

These workers have often been banned by their home countries from working in Baghdad because of unsafe conditions and flagging support for the war, but once they’re on Iraqi soil, protections are few. First, Kuwaiti managers take their passports, which is a violation of US labor laws. "If you don’t have a passport or an embassy to go to, what do you do to get out of a bad situation?" asked Rory Mayberry, a former medic for one of First Kuwaiti’s subcontractors, who blew the whistle on the squalid living conditions, medical malpractice, and general abuse he witnessed at the site.

The Pentagon has been investigating the slavelike conditions but has not released the names of any vioutf8g contractors or announced penalties. In the meantime, billions of dollars in contracts continue to be awarded to First Kuwaiti and other companies at which little accountability exists. As Phinney reported, "No journalist has ever been allowed access to the sprawling 104-acre site."

Source: "A U.S. Fortress Rises in Baghdad: Asian Workers Trafficked to Build World’s Largest Embassy," David Phinney, CorpWatch Web site, www.corpwatch.org/article.php?id=14173, Oct. 17, 2006

6. FALCON’S TALONS


Operation FALCON, or Federal and Local Cops Organized Nationally, is, in many ways, the manifestation of martial law forewarned by Frank Morales (see story 2). In an unprecedented partnership, more than 960 federal, state, and local police agencies teamed up in 2005 and 2006 to conduct the largest dragnet raids in US history. Armed with fistfuls of arrest warrants, they ran three separate raids around the country that netted 30,110 criminal arrests.

The Justice Department claimed the agents were targeting the "worst of the worst" criminals, and Attorney General Alberto Gonzales said, "Operation FALCON is an excellent example of President Bush’s direction and the Justice Department’s dedication to deal both with the terrorist threat and traditional violent crime."

However, as writer Mike Whitney points out on Uruknet.info, none of the suspects has been charged with anything related to terrorism. Additionally, while 30,110 individuals were arrested, only 586 firearms were found. That doesn’t sound very violent either.

Though the US Marshals Service has been quick to tally the offenses, Whitney says the numbers just don’t add up. For example, FALCON in 2006 captured 462 violent sex-crime suspects, 1,094 registered sex offenders, and 9,037 fugitives.

What about the other 7,481 people? "Who are they, and have they been charged with a crime?" Whitney asked.

The Marshals Service remains silent about these arrests. Whitney suggests those detainees may have been illegal immigrants and may be bound for border prisons currently being constructed by Halliburton (see last year’s Project Censored).

As an added bonus of complicity, the Justice Department supplied local news outlets with stock footage of the raids, which some TV stations ran accompanied by stories sourced from the Department of Justice’s news releases without any critical coverage of who exactly was swept up in the dragnets and where they are now.

Sources: "Operation Falcon and the Looming Police State," Mike Whitney, Uruknet.info, uruknet.info/?p=m30971&s1=h1, Feb. 26, 2007; "Operation Falcon," SourceWatch (project of the Center for Media and Democracy), www.sourcewatch.org/index.php?title=Operation_FALCON, Nov. 18, 2006

7. BLACKWATER


The outsourcing of war has served two purposes for the Bush administration, which has given powerful corporations and private companies lucrative contracts supplying goods and services to American military operations overseas and quietly achieved an escalation of troops beyond what the public has been told or understands. Without actually deploying more military forces, the federal government instead contracts with private security firms like Blackwater to provide heavily armed details for US diplomats in Iraq, Afghanistan, and other countries where the nation is currently engaged in conflicts.

Blackwater is one of the more successful and well connected of the private companies profiting from the business of war. Started in 1996 by an ex–Navy Seal named Erik Prince, the North Carolina company employs 20,000 hired guns, training them on the world’s largest private military base.

"It’s become nothing short of the Praetorian Guard for the Bush administration’s so-called global war on terror," author Jeremy Scahill said on the Jan. 26 broadcast of the TV and radio news program Democracy Now! Scahill’s Blackwater: The Rise of the World’s Most Powerful Mercenary Army was published this year by Nation Books.

Source: "Our Mercenaries in Iraq," Jeremy Scahill, Democracy Now!, www.democracynow.org/article.pl?sid=07/01/26/1559232, Jan. 26, 2007

8. KIA: THE NEOLIBERAL INVASION OF INDIA


A March 2006 pact under which the United States agreed to supply nuclear fuel to India for the production of electric power also included a less-publicized corollary — the Knowledge Initiative on Agriculture. While it’s purportedly a deal to assist Indian farmers and liberalize trade (see story 4), critics say the initiative is destroying India’s local agrarian economy by encouraging the use of genetically modified seeds, which in turn is creating a new market for pesticides and driving up the overall cost of producing crops.

The deal provides a captive customer base for genetically modified seed maker Monsanto and a market for cheap goods to supply Wal-Mart, whose plans for 500 stores in the country could wipe out the livelihoods of 14 million small vendors.

Monsanto’s hybrid Bt cotton has already edged out local strains, and India is currently suffering an infestation of mealy bugs, which have proven immune to the pesticides the chemical companies have made available. Additionally, the sowing of crops has shifted from the traditional to the trade friendly. Farmers accustomed to cultivating mustard, a sacred local crop, are now producing soy, a plant foreign to India.

Though many farmers are seeing the folly of these deals, it’s often too late. Suicide has become a popular final act of opposition to what’s occurring in their country.

Vandana Shiva, who for 10 years has been studying the effects of bad trade deals on India, has published a report titled Seeds of Suicide, which recounts the deaths of more than 28,000 farmers who killed themselves in despair over the debts brought on them by binding agreements ultimately favoring corporations.

Hope comes in the form of a growing cadre of farmers hip to the flawed deals. They’ve organized into local sanghams, 72 of which now exist as small community networks that save and share seeds, skills, and assistance during the good times of harvest and the hard times of crop failure.

Sources: "Vandana Shiva on Farmer Suicides, the U.S.-India Nuclear Deal, Wal-Mart in India," Democracy Now!, www.democracynow.org/article.pl?sid=06/12/13/1451229, Dec. 13, 2006; "Genetically Modified Seeds: Women in India take on Monsanto," Arun Shrivastava, Global Research (Web site of Montreal’s Center for Global Research), www.globalresearch.ca/index.php?context=viewArticle&code=ARU20061009&articleId=3427, Oct. 9, 2006

9. THE PRIVATIZATION OF AMERICA’S INFRASTRUCTURE


In 1956, President Dwight D. Eisenhower ushered through legislation for the greatest public works project in human history — the interstate highway system, 41,000 miles of roads funded almost entirely by the federal government.

Fifty years later many of those roads are in need of repair or replacement, but the federal government has not exactly risen to the challenge. Instead, more than 20 states have set up financial deals leasing the roads to private companies in exchange for repairs. These public-private partnerships are being lauded by politicians as the only credible financial solution to providing the public with improved services.

But opponents of all political stripes are criticizing the deals as theft of public property. They point out that the bulk of benefits is actually going to the private side of the equation — in many cases, to foreign companies with considerable experience building private roads in developing countries. In the United States these companies are entering into long-term leases of infrastructure like roads and bridges, for a low amount. They work out tax breaks to finance the repairs, raise tolls to cover the costs, and start realizing profits for their shareholders in as little as 10 years.

As Daniel Schulman and James Ridgeway reported in Mother Jones, "the Federal Highway Administration estimates that it will cost $50 billion a year above current levels of federal, state, and local highway funding to rehab existing bridges and roads over the next 16 years. Where to get that money, without raising taxes? Privatization promises a quick fix — and a way to outsource difficult decisions, like raising tolls, to entities that don’t have to worry about getting reelected."

The Indiana Toll Road, the Chicago Skyway, Virginia’s Pocahontas Parkway, and many other stretches of the nation’s public pavement have succumbed to these private deals.

Cheerleaders for privatization are deeply embedded in the Bush administration (see story 7), where they’ve been secretly fostering plans for a North American Free Trade Agreement superhighway, a 10-lane route set to run through the heart of the country and connect the Mexican and Canadian borders. It’s specifically designed to plug into the Mexican port of Lázaro Cárdenas, taking advantage of cheap labor by avoiding the International Longshore and Warehouse Union, whose members are traditionally tasked with unloading cargo, and the International Brotherhood of Teamsters, whose members transport that cargo that around the country.

Sources: "The Highwaymen" Daniel Schulman with James Ridgeway, Mother Jones, www.motherjones.com/news/feature/2007/01/highwaymen.html, Feb. 2007; "Bush Administration Quietly Plans NAFTA Super Highway," Jerome R. Corsi, Human Events, www.humanevents.com/article.php?id=15497, June 12, 2006

10. VULTURE FUNDS: DEVOURING THE DESPERATE


Named for a bird that picks offal from a carcass, this financial scheme couldn’t be more aptly described. Well-endowed companies swoop in and purchase the debt owed by a third world country, then turn around and sue the country for the full amount — plus interest. In most courts, they win. Recently, Donegal International spent $3 million for $40 million worth of debt Zambia owed Romania, then sued for $55 million. In February an English court ruled that Zambia had to pay $15 million.

Often these countries are on the brink of having their debt relieved by the lenders in exchange for putting the owed money toward necessary goods and services for their citizens. But the vultures effectively initiate another round of deprivation for the impoverished countries by demanding full payment, and a loophole makes it legal.

Investigative reporter Greg Palast broke the story for the BBC’s Newsnight, saying that "the vultures have already sucked up about $1 billion in aid meant for the poorest nations, according to the World Bank in Washington."

With the exception of the BBC and Democracy Now!, no major news source has touched the story, though it’s incensed several members of Britain’s Parliament as well as the new prime minister, Gordon Brown. US Reps. John Conyers (D-Mich.) and Donald Payne (D-N.J.) lobbied Bush to take action as well, but political will may be elsewhere. Debt Advisory International, an investment consulting firm that’s been involved in several vulture funds that have generated millions in profits, is run by Paul Singer — the largest fundraiser for the Republican Party in the state of New York. He’s donated $1.7 million to Bush’s campaigns.

Source: "Vulture Fund Threat to Third World," Newsnight, www.gregpalast.com/vulture-fund-threat-to-third-world, Feb. 14, 2007

>>More: The story of U.S. Senator Diane Feinstein’s conflict of interest

The State of the Union is ….

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By Tim Redmond

Pathetic.

It’s as if nothing that has happened over the past four years has made any difference to the president. He started off by saying that the private sector, and tax breaks, were going to solve the health-insurance crisis, which is demonstrably wrong. Then he went on — and on — talking about the war on terror, and trying, yet again, as he has done over and over with no success, to tie the war in Iraq to Osama Bin Laden and the 9/11 attacks.

My favorite line: “This is not the fight we entered, but it’s the fight we are in.” Excuse me: A lot of us pointed out out from the start that this was exactly the fight we were entering. The mess that is Iraq is no surprise — it’s exactly what everyone with any sanity predicted would happen.

49ers aren’t worth public money

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EDITORIAL The prospect of the San Francisco 49ers moving to Santa Clara — and taking with them any hope of a 2016 Olympic bid for San Francisco — caught the Newsom administration off guard and has much of City Hall scrambling to figure out a way to keep the fabled sports franchise in San Francisco. It’s not a futile effort by any means: the deal to build a new stadium in Santa Clara still has a long way to go, and there are some very real issues (including the phenomenal parking and traffic problems and the utter lack of accessible transit).
But city officials need to keep a sense of perspective here: the loss of the Olympics was almost certainly a good thing, and the loss of the 49ers wouldn’t be the end of the world. So there’s no reason to even start to talk about handing out promises of more public money, tax breaks, or favorable land deals to keep the Niners in town.
We’ve never been terribly hot on the idea of hosting the Olympics. The last time the issue came up, with a possible bid for the 2012 games, we noted that cities hosting the Olympics tend to wind up with huge public debt and that the costs (typically including gentrification and displacement) aren’t worth the gains. Our articles infuriated local sports leaders, but we’re not the only ones raising questions these days. San Francisco Chronicle columnist Gwen Knapp, in an insightful Nov. 16 piece, suggested that the city might want to thank 49ers owner John York: “He might have saved San Francisco from a vanity project that often leaves ugly blemishes on a community’s bottom line.”
San Francisco is one of the world’s great cities, an international tourist destination, a place that’s already on everyone’s map. We don’t need the Olympics.
We may not need the 49ers either. That’s what Glenn Dickey, Examiner sports columnist, argued Nov. 14. Football teams, with a limited number of home games, bring very little to a local economy — and this is hardly a city that needs the name recognition of a National Football League franchise. “Mayor Gavin Newsom should spend his time on more critical priorities,” Dickey noted.
Of course, if the 49ers leave, something has to be done with the park formerly known as Candlestick — a white elephant that cost the city tens of millions of dollars in bonds. But almost any sort of new development there would do more for the neighborhood than a stadium filled by people who drive in, bring their own food, drive away, and spend almost no money at local businesses.
The San Francisco Giants managed to build a new stadium almost entirely with private money, and it’s been a huge financial success. The city shouldn’t be tempted to throw big chunks of public money at keeping the 49ers from moving. SFBG

Cutting taxes the right way

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EDITORIAL Finally the Democratic Party in California is starting to talk seriously about tax policy. It’s an important change in the political winds, and if state treasurer Phil Angelides can get beyond the tepid-to-hostile press and use his promise of a middle-class tax cut to gain ground on Gov. Arnold Schwarzenegger, it may signal the end of decades of regressive and deeply harmful economic policy.
Schwarzenegger, who knows he’s in a tough race, has been trying to smear Angelides by saying that the Democratic candidate is pushing for tax hikes. Yes, he is — tax hikes on the likes of Arnold Schwarzenegger (and Phil Angelides), people with incomes of more than $500,000 a year. For the record, these are people who have seen their taxes drop dramatically under the Bush administration and are the direct beneficiaries of an alarming national trend of wealth concentration among the richest Americans.
Angelides isn’t talking about radical tax hikes; all he wants to do is restore the top state income tax rate to the level it was under Republican governors like Ronald Reagan and Pete Wilson. Still, raising taxes never plays well in the polls, so Angelides is now doing what he needed to do from the start of his campaign: he’s proposing to cut taxes on middle-class working families.
It’s a risky strategy: pundits on the right will accuse him of “class warfare,” and the details of his plans will get obscured by negative political ads and lousy media coverage. But it’s the right approach: he’s actually talking about shifting the tax burden upward, about changing the national trend in tax policy, about giving the majority of the voters tax breaks and paying for it by making a few wealthy people pay more.
But if it’s going to work, he needs to be a lot clearer on exactly how the dollars pencil out — and he needs to offer more than what seems like a relatively modest tax cut. Right now, his plan calls for $788 million in tax reductions for families earning less than $100,000 a year and $5 billion in tax hikes for the wealthy. He’s also offering to find $1 billion in state waste.
For a family living on $46,000 a year, the program would amount to $660 a year in tax relief.
We understand that the tax cuts have to be lower than the tax hikes — the state is deeply in debt, and there are all sorts of badly needed social programs that ought to be funded. But in the end, his plan sounds pretty mild: there’s a lot more than $1 billion in waste, corporate tax loopholes, and uncollected revenue out there, and a California family earning $46,000 a year, facing the insane housing market and rapidly rising energy costs, could use a lot more than $50 a month in extra cash.
Let’s remember: the transfer of wealth from the middle class to the rich (and especially the very rich) that’s taken place in the past two decades is unprecedented in the postwar era and quite possibly unprecedented in American history. A few bucks here and there aren’t really going to make that much difference. If Angelides is serious, he should revise his plan to at least double the tax cuts for the middle class, hike the tax credits for low-income families — and pay for it by creating another tax bracket altogether, for Californians who earn more than $1 million a year.
But this is an excellent start — and Angelides deserves tremendous credit for opening a discussion that should have taken place years ago. SFBG

20 questions for Fiona Ma

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Sup. Fiona Ma, who is running for state Assembly, last week decided to skip an endorsement interview that she scheduled with the Guardian – making herself unavailable to answer questions important to Guardian readers – so we’ve decided to put some of our questions out the publicly.

We encourage voters to press her for answers before the June primary, and if you have any luck, please let us know by e-mailing City Editor Steven T. Jones at steve@sfbg.com.

1.   What kind of health care system do you support for California? Ma’s opponent, Janet Reilly, has made single-payer health care her top campaign priority and issued a detailed plan for what that would entail. Health care is one of just five issues that Ma discusses on her website (the others being Housing, Education, Budget/Jobs, and Transportation), vaguely indicating she support universal coverage and stating, “I support state measures to provide incentives for business owners to cover their workers and other such efforts, but we need the political will on the national level to be successful.”  The first part sounds as if she’s advocating tax breaks to businesses that offer private insurance health plans to their employees. The caveat at the end sounds like she doesn’t intend to do much of anything until the feds do. But then, during the only debate that she’d agreed to have with Reilly, Ma said that she support a single-payer health care system, without offering any other details. This is arguably the most important issue the Legislature will face in the next few years and we have a right to know whose side Ma would be on.

2.   What will you do to protect renters and rental units in San Francisco? Again, it was the sole debate and its aftermath that yielded much confusion about where Ma stands regarding renters. She has made no secret of her strong support for increasing homeownership opportunities and her record is one of opposing local efforts to slow the number of Ellis Act evictions. But at the debate, she went further by declaring, “The Ellis Act is sometimes the only way for some people to become homeowners and I support it.” After being criticized for the statement, she defended herself in a piece on BeyondChron.org that only seemed to dig a deeper hole, arguing that she supports “ownership units [that] are affordable to San Franciscans of all income levels.” And how exactly is that going to happen?

3. What’s up with the $20 million?    In that same Beyondchron.org column, to defend her bad record on renters, Ma cited an effort that she made earlier this month to amend the city’s $20 million housing subsidy program to prioritize those who have been evicted under the Ellis Act. City officials said it would have had little practical effect and the gesture seemed to contradict you statements of support for Ellis Act evictions. Why should we see this as anything but a crass political deception?

4.      Why have you been unwilling to provide details about your policy positions even on the five issues you raised on your website – so voters would know how you intend to vote?

5.      How do you intend to increase revenues coming into the state, which you will need for even the broad goals you cited in education, transportation, and business “incentives”? We’re particularly interested in this answer after watching Ma chair the city’s Revenue Advisory Panel two years ago. That body was charged by the mayor’s office with recommending new revenue sources, and ended up recommending none.

6. Are you just a pawn of downtown business?At luncheon speeches that she gave to SFSOS and the San Francisco Chamber of Commerce over the last couple years, Ma you blasted and belittled her colleagues on the board while fawning over the business community. What is she willing to do to show her independence from downtown?

7.      Why do most of your colleagues on the Board of Supervisors support Janet Reilly —  and why shouldn’t voters see that as an indictment of your tenure as a supervisor?

8.      Is there anything new that you would require of the business community, such as improved labor or environmental standards, greater corporate accountability and transparency, regulation of greenhouse gas emissions, health care benefits for employees or their same sex partners?

9.      Your record is one of consistent opposition to requiring developers to pay more or offer more public benefits, such as open space or affordable housing. Why shouldn’t rich developers making obscene profits pay a little more? Has your position been influenced by the financial support of people like Oz Erickson, Joe Cassidy, Warren Hellman, Don Fisher, and Bob McCarthy?

10.     Why did you oppose legislation that would have limited the number of parking spaces that could be built in conjunction with the nearly 10,000 housing units slated for the downtown core, legislation that Planning Director Dean Macris called critical to good planning? Did your support from the downtown developers who opposed it have anything to do with your position?

11.     You supported a deal that extended Comcast’s cable contract without requiring any new public programming requirements, even though other comparable cities have better plans. Do you think that’s why Comcast is supporting your campaign?

12.     You’ve been a big advocate of tax breaks for corporations, including the biotech and film industries in San Francisco. How would you make up for these lost revenues and are you concerned that having cities compete with tax breaks creates a race to the bottom that starve public coffers? And on the biotech tax credit, given that such companies often lose money for years before reaping high windfall profits, how would be insure those companies eventually pay taxes to the city rather than just moving somewhere where they won’t be taxed?

13.     You were a longtime supporter of Julie Lee, continuing to support her even after it was revealed that she illegally laundered public funds into political campaigns. Why, and do you continue to support her?

14.     In a recent letter to supporters, you warned that Janet Reilly was trying to buy the campaign so people needed to give more. At the time, she had raised about $600,000 to your $700,000. How do you justify what appears to be a deceptive statement to your own supporters?

15.     We understand you support the death penalty, but many studies have shown that those on death row have been represented by inexperienced and ineffective lawyers, that they are disproportionately poor and minorities, and that based on detailed studies conducted in other states, it is likely that at least a few are not guilty of their crimes. Given all of that, are there any reforms that you’d like to see in how executions are carried out?
16.     In the debate, you said that the state is not required to balance its budget and that the federal government may simply print money to cover its budget deficits. Would you like to clarify or amend either statement?

 17.     What is your position on drug prohibition? Are there any current illegal drugs that you would decriminalize or are there any other changes you would make to the war on drugs?

18.    
The statement you issued on your website dealing with “Transportation” – one of just five issues you addressed – is only 48 words long. Is there anything that you’d like to add? And are there any other issues facing the state that you think are important?

19.    
  The Reilly campaign has warned of a possibly illegal effort to attack her by a group called “Leaders for an Effective Government,” using money laundered by Comcast and your old boss, John Burton. Are you aware of this effort and have you taken any steps to stop or repudiate it?

20. Why do you think it’s okay to avoid tough questions from the press?