Today's Stories

September 15, 2009

Marshall Auerback
Government Spending is the Solution--Not the Problem

Karen Korenoski /
Michael Yates
Up in Wood Smoke: Boulder's Dirty Little Secret

September 14, 2009

Paul Craig Roberts
The Health Care Deceit

M. G. Piety
The Danes Do It (Health Care) Better

Shamus Cooke
Wall Street Under Obama: Bigger and Riskier

Bouthaina Shaaban
Three Faces and a Homeland

Alvaro Huerta
In Defense of the Undocumented: Immigrants and Health Care

John Ross
Mexico Loses Its History

Harvey Wasserman
The Supreme Court and Corporate Money

Adam Federman
The Plight of the Bumblebee

Stephen Fleischman
The Federal Twist

Robert Jensen
Can Journalism Schools be Relevant in a World on the Brink?

Website of the Day
The Origin of Sex Offender Registries

September 11-13, 2009

Alexander Cockburn
Obama's Big Speech: Math Trumps Rhetoric

JoAnn Wypijewski
Trumka Takes Over AFL-CIO

Carl Ginsburg
The Patient as Profit Center

Leonard Peltier
I am Barack Obama's Political Prisoner Now

Franklin Lamb
Ted Kennedy's Changing Take on Israel

Benjamin Dangl
Throwing Bullets at Failed Policies

Mike Whitney
How to Fight Deflation

John Berger
In Search of Antonello

Saul Landau
Watergate and Modern Scandals

Russell Mokhiber
Disgraceful Democrats

Ricardo Alarcón de Quesada
Pryor's Judgment

Felice Pace
NPR's Linda Gradstein Has Done It Again on Gaza

Jordan Flaherty
The Battle Over Discriminatory Housing Laws in New Orleans

Ron Jacobs
It's Time to be Impolite About Afghanistan

David Macaray
The Utility of Boycotts

David Correia
Welcome to the Business-Friendly Carpenter's Union

Robert Bryce
Wind Turbines and Bird Kills

Christopher Brauchli
Defenders of the Classroom

Paul Krassner
Aha! A Few Words About the 9/11 Truth Movement

Charles R. Larson
Deracination

Kim Nicolini
"Extract:" An Exercise in Economic Realism

David Yearsley
Tall Buildings: the Sound and the Silence

Lorenzo Wolff
In Defense of the One Hit Wonder

Poets' Basement
McEnteer and Corseri

Website of the Weekend
Pizarchik: the Wrong Choice

September 10, 2009

Joshua Frank
Inside Hanford's B Reactor: a Tour of the World's Most Toxic Nuclear Site

Dean Baker
Bernanke's Bad Money

Brian M. Downing
The State of U.S. National Security

Franklin C. Spinney
Portrait of an Afghan Firefight: Up Close and Personal

Andy Worthington
No Escape From Guantánamo

Chase Madar
Samantha Power and the Weaponization of Human Rights

Farzana Versey
A Tale of Two Slums

Ronnie Cummins
Whole Foods, Fair Trade and Organics

Binoy Kampmark
Health Care, Obama and the System

Timothy Lebrón
The Conservative Case for Health Care Reform

Charles R. Larson
A Solution to the Health Care Dilemma

Website of the Day
The Debtor's Revolt Begins!

September 9, 2009

Richard Neville
Trigger-Happy in Afghanistan

Melissa Checker
Double Jeopardy: Carbon Offsets and Human Rights Abuses

Nadia Hijab
Settling for ... Settlements?

Robert Weissman
The Stakes at the Supreme Court

Jonathan Cook
Israeli Arabs Call for General Strike

Russell Mokhiber
Pollan, Mackey, Whole Foods and Single Payer

James Ridgeway
The Dotty Factor: Will Demented Geezers Wreck the Economy?

Richard W. Behan
Obama's Imperative in Afghanistan

James McEnteer
The Photo and the Secretary: How to Appall Robert Gates

Martha Rosenberg
Hatchery Horrors

Website of the Day
Belmondo Verité

September 8, 2009

Henry A. Giroux
The Corporate Stranglehold on Education

Stephen Soldz
Psychologist Accused of War Crimes Opposes Investigations

John Ross
Rituals of the Absurd

Jeff Leys
Health Care vs. Warfare: the Future of the Afghan War

Mike Whitney Ashcroft: Repugnant to the Constitution

Shamus Cooke
Obama's Empty Labor Day Speech

Ellen Brown
Did Lehman Brothers Fall or Was It Pushed?

Norman Solomon Men With Guns: In Kabul and Washington

Deepak Tripathi
The Axis of Evil and the Great Satan

Laray Polk
Personality Cults, Indoctrination and Inculcation

Charles R. Larson
Just Who Does He Think He Is?

Website of the Day
The President is Not a Guidance Counselor

September 7, 2009

Vicente Navarro
Obama's Mistakes in Health Care Reform

Bouthaina Shaaban
In Praise of Admiral Mullen

David Macaray
Obama's Labor Day Report Card

Paul Craig Roberts
Indefensible Nation

Jonathan Cook
Israeli Ads Warn Against Marrying Non-Jews

Conn Hallinan
Brazil Flexes Its Muscles

Walter Brasch
The Origins of Labor Day, the Unknown Holiday

Mark Weisbrot
IMF Gives Honduran Government $175 Million

Carl Finamore
China's Birthday Stimulation

C. G. Estabrook
Advance Text of Obama's Big Speech

Website of the Day
One Down, 20,000 to Go

September 4-6, 2009

Alexander Cockburn
Deeper Into the Tunnel

Carl Ginsburg
Saving New Orleans' Charity Hospital

Jonathan Cook
The Missing Link in Israeli Organ Theft?

George Wuerthner
The Unintended Consequences of Wolf Hunting

Marc Levy
The Bling They Curse and Carry

Ray McGovern
Holbrooke's Afghan Benchmark

Ricardo Alarcón de Quesada
It Happened in Miami

Joe Paff
Organizing the Mission

Gareth Porter
Taliban's Tank-Killing Bombs Came From CIA, Not Iran

Devin Beaulieu
Scaremongering About Bolivia and Islam

Anthony Papa
Why Leslie Crocker Snyder Should Not Become New York City's New DA

David Ker Thomson
Love and Dekes in Utopia

Don Fitz
The Case of the Biodevastation 7: What the Police Won't Apologize For

Lee Sustar /
S. Sepehri
The Fallout From Iran's Elections

Jim Goodman
Why Honor Organized Labor?

Wajahat Ali
Domestic Crusaders: Making Muslim American Theater

Ron Jacobs
Agitator Journalism: Remembering Ramparts

Helen Redmond
The Lion Sleeps Tonight: the Crimes and Misdemeanors of Teddy Kennedy

John V. Walsh
Obama to Cindy Sheehan: Get Lost

Charles R. Larson
Mandanipour's Masterpiece: Censoring an Iranian Love Story

Mark Scaramella
Ho-Bleeping-Hum: a Few Well-Chosen Words About Valerie Plame's Book

David Yearsley
Cameron Carpenter's Amazing Organ Transplants

Ben Sonnenberg
Hooking, Breaking Friendships, Cross-Dressing and, Above All, Delphine Seyrig

Poets' Basement
Davies, Orloski and Bready

Website of the Weekend
Architectural Semiotics with Glenn Beck

September 3, 2009

Marcus Rediker
Inside Auburn Prison

Ron Jacobs
Embedded With the Taliban

Mike Whitney
How Bad Will It Get?

Ricardo Alarcón de Quesada
Untold Story of the Cuban Five: Indictment À La Carte

Saul Landau
Moby Dick and Asian Typhoons

Anat Matar
Israeli Academics Must Pay a Price to End Occupation

Tanya Golash-Boza
How Immigration Enforcement is Weakening National Security

Dave Lindorff
Which Side Are You On?

Andy Worthington
The Story of Gitmo's Two Syrians

Website of the Day
Plundering Appalachia

September 2, 2009

John Ross
Mexico's Plagues

Vijay Prashad
Hey Ram, the Things the Financial Times Group Does!

Rev. Jim Rigby
Why is Universal Health Care "Un-American"?

Joanne Mariner
What the Inspector General Found

Missy Beattie
Hejira: At Martha's Vineyard with Cindy Sheehan

Soren Ambrose
Multilateral Money

Diane Farsetta
Water: the Newest Wave of Corporate "Social Responsibility"

Nadia Hijab
Mulling Mullen's Message

Shamus Cooke
How to Lower the Deficit Without Killing Social Security

Charles R. Larson
Is Dick Cheney Running Scared?

Website of the Day
Inside the Egg Hatchery

September 1, 2009

Jeffrey St. Clair
The Wolf at Trout Creek

Paul Craig Roberts
Why Not Sanctions for Israel?

Mark T. Harris
The Whole Foods Boycott: It's About More Than CEO Hypocrisy

Dean Baker
Bank Profits Are Up: Did You Hear Anyone Say, "Thank You"?

Jeffrey Buchanan
Ending the Human Rights Crisis in KatrinaRitaVille

Robin Mittenthal
A Sea of Monocrops: Old MacDonald Never Had a Farm Like This

Ellen Brown
Mercury Mischief

Martha Rosenberg
Vytorin Marketing is Back

Website of the Day
Crazy Town Hall Protester Interviews

August 31, 2009

Pam Martens
Madoff and the SEC's Revolving Door

Anthony DiMaggio
What Obama Isn't Telling You About Afghanistan

Bouthaina Shaaban
Israeli Bodysnatchers

Ray McGovern
The Press and Torture: Covering for Cheney?

Joseph Shansky
Scenes of Resistance in Honduras

Greg Moses
The Dying Dillos of Austin

Brian McKenna
Pig Sacrifice and Swine Flu Panic

David Macaray
The Tender Trap

Brenda Norrell
Uranium Mining in the Grand Canyon

Paul Craig Roberts
The Environment Loses a Champion

Beth Sherouse
Why I'm Going to the Big Gay March in Washington

Website of the Day
The Failure of the Left Antiwar Movement

August 28-30, 2009

Alexander Cockburn
Teddy Kennedy the Hollow Champion

Joshua Frank /
Jeffrey St. Clair
From the Ledge to the Edge: How Tre Arrow Became America's Most Wanted Environmental "Terrorist"

Steve Early
Kennedy's Sins Against Labor

Michael Hudson
Learning About Financialization the Hard Way

Carl Ginsburg
Bernanke in Obamatime

Saul Landau
The Nuclear Gang Rides Again

Dave Marsh
Trapped Again: Michael Jackson's Crossover Dream

Mike Whitney
Band-Aids for the Recession

Dave Lindorff
Obama's War

José Pertierra
A Decision in the Posada Case

Joe Bageant
Obama's Fake Fight for Reform

Ricardo Alarcón de Quesada
Spies Without Espionage

Lee Sustar
On Strike for Health Care Justice

David Ker Thomson
Life in the 'Shed

David Rosen
The Silent Slaughter: Sex Wars and Nation-Building in Iraq

Alison Weir
Israeli Organ Harvesting

Ron Jacobs
Will There be Free Speech in Pittsburgh?

David Swanson
Bush Tortured

Udi Aloni
An Appeal to Israeli Filmmakers

Charles R. Larson
Children During Wartime

Kim Nicolini
District 9: Science Fiction of the Now

David Yearsley
The Wagner Cult in Seattle

Lorenzo Wolff
Riding the Rails with King Curtis

Poets' Basement
Three Poems by Marc Beaudin

Website of the Weekend
The Hidden History of Katrina

August 27, 2009

Andrea Peacock
Bearly Making It: How Many Biologists Does It Take to Count a Dead Grizzly?

Ricardo Alarcón de Quesada
Incapacitating the Cuban Five

Ray McGovern
Closing in on the Torturers

Gideon Levy
The Last Refuge: Neve Gordon and the Boycott of Israel

Shamus Cook
World Bankers Agree: the Recession is Over ... Maybe

Norman Solomon
The Afghanistan Gap

Marshall Auerbach
We Already Have a Public Option

Benjamin Dangl
Reclaiming a Continent

Kathryn Gray
The Water Privateers

David Macaray
Please Buy Our Beer (And Join Our Union)

Website of the Day
Stop the Privatization of Ocean Fisheries

August 26, 2009

Gareth Porter
The Leaking Game: Planted News Stories About Iran and Nuclear Weapons

Dave Lindorff
Getting Away With Torture: Holder's Limited, Modified Hangout

Dean Baker
The Reappointment of Bernanke

Laura Carlsen
The Coup and Honduran Women

Paul Craig Roberts
When the Government Comes First

Laura Raymond /
Bill Quigley
Haiti One Year After the Hurricane

Jordan Flaherty
Still Homeless, Still Struggling in New Orleans

Jonathan Cook
The Long Struggle to Reclaim Beersheva's Great Mosque

Robert Bryce
Bamboozled About Energy

Danny Weil
The Future of Charter Schools

Cindy Sheehan
Farewell, Senator Kennedy

John V. Walsh
Cindy Sheehan's Lonely Vigil in Obamaland

Website of the Day
The President's Laugh Line

August 25, 2009

Gabriel Kolko
Israel: A Stalemated Action of History

Danny Weil
The Charter School Hype and How It's Managed

Martine Bulard
China's Wild West

Ricardo Alarcón de Quesada
The Cuban Five: The Face of Impunity

Bélen Fernández
Why Didn't the Leopard Eat Tom Friedman?

August 24, 2009

Danny Weil
Obama and Duncan's Education Policy: Like Bush's, Only Worse

Neve Gordon
Stopping the Apartheid State
Boycott Israel

John Ross
Mexico's Supreme Court Tosses a Bombshell into Chiapas

Open Letter to Kenneth Roth
Why Has Human Rights Watch Fallen Silent on Honduras?

Dan Bacher
A Burston-Marsteller Greenwash:
Westlands Hoards Surplus Water While Farmers Suffer

August 21-23, 2009

Alexander Cockburn
The Right Wing's Prince of Gonzo

Patrick Cockburn
The Truth About Afghan Election

Ray McGovern
Unwritten CIA Death Contract Awarded to Blackwater

Carl Ginsburg
Paycheck President

Dave Lindorff
American Justice is Not Blind, But it is Truly Sick

M. Shahid Alam
An "Abnormal" Nationalism

Ron Jacobs
The Continuing Story of Camp Ashraf

Eric Walberg
Russia/Georgia/U.S. One Year Later
Who Came Out Ahead

No War on the Moon!
In Defense of the Dark Side of the Moon

Gilad Atzmon
The Hostage Dream: Loving Oneself at the Expense of Another

Crawdad Nelson
What It's Like to Die

David Yearsley
Why I Chose to Play Scarlatti on Bainbridge Island

Justin Frew
Grim Times for Irish Travelers

Website of the Day
Picket Whole Foods Friday!

August 20, 2009

Eugenia Tsao
Inside the DSM:
The Drug Barons' Campaign to Make Us All Crazy

Dave Lindorff
The Worst and the Best Thing to Happen to the Democratic Party in Years

Yonatan Preminger
The Strategy Behind Israel's Migrant Labor Policies

Wajahat Ali
The Detention of Shah Rukh Kahn

Website of the Day
How to cope with flu pandemics

August 19, 2009

David Michael Green
Guess What? He's a Terrible President

Paul Craig Roberts
Americans: Serfs Ruled by Oligarchs

Marshall Auerback
Debt Revolt? Tax Strike? There are a Lot of Angry People Out There

Franklin Lamb
AIPAC Sends in the Clowns

John Ross
Three Amigos Summit

Marjorie Cohn
Legendary Lawyer Doris Brin Walker Dies; Represented Angela Davis, Smith Act Defendants

August 18, 2009

Michael Hudson
The Specter of Debt Revolt Is Haunting Europe?

Mary Lynn Cramer
Obama-Fraud: Don't Confuse Medicare with Single-Payer

Jonathan Cook
U.S. Turns Blind Eye to Israel's New Separation Policy

Uri Avnery
Whose Acre?

Ralph Nader
Block Obama's Abject Surrender to Insurance and Drug Companies

Bill Quigley & Davida Finger
Katrina Pain Index - 2009

August 17, 2009

Ray McGovern
Can the Washington Post Save Dick Cheney?

Andy Worthington
Bagram Isn't the New Guantánamo, It's the Old Guantánamo

Patrick Cockburn
Life and Death in Baghdad as Americans Leave

Don Fitz
The True Story of Fox's Hero, Kenneth Gladney

P. Sainath
Drought of Justice, Flood of Funds

Helena Cobban
Zionist Pioneer Renounces Zionism

August 14-16, 2009

Alexander Cockburn
Health Plans and Death Plans

Jeffrey St. Clair
The Fall of the House of Stanford

Peter Linebaugh
The Commons, the Castle, the Witch and the Lynx

Esam Al-Amin
What Actually Happened in Fatah's Elections?

Marshall Auerback
Why a Debtor's Revolt Would Work

Mike Whitney
Bulletins From Clunkerville

Paul Krassner
Woodstock at Forty

Saul Landau
Health Care and the Seeds of Disunity

Nikolas Kozloff
Colombian Elites Fear Bolivaran Revolution

Henry A. Giroux
Politics After Hope

John Ross
Sleepwalking Through the Minefield

Jonathan Cook
Israeli Land Sale

Isabella Kenfield
Monsanto's Man in the Obama Administration

David Rosen
Sexual Torture, Yet Again

Ron Jacobs
Unconditional Negotiations, Now!

Wajahat Ali
Obama's Immigration Reforms: Neither Humane Nor Thoughtful

David Macaray
Prison Games

Greg Moses
Down in South Texas: the Geometries of Bob Dylan

Charles R. Larson
Egyptian Economics 101

David Yearsley
Stalked by Bill Evans' Ghost: Kind of Blue at Fifty

Lorenzo Wolff
There Ain't Much to Country Livin': the Drive-By Truckers and the Fine Print

Kim Nicolini
Class, Race and Clint

Poets' Basement
Reiss, Ford and Moser

Website of the Weekend
Timidity and Transparency

August 13, 2009

Eduardo Galeano
I Hate to Bother You

Joanne Mariner
Letting Cheney Off the Hook

Michael Donnelly
Burning Forests for Electricity

Norman Solomon
When the Dead Have No Say

Russell Mokhiber
Boycott Whole Foods

Tim Wise
Sick Heil! The Hitlerizing of Obama

Brian M. Downing
Succession and the Pakistani Taliban

Dave Lindorff
Single-Payer and Medicare

David Manning / Miriam Cotton:
Iran Versus Honduras: a Subtle Difference

Martha Rosenberg
John Hughes, Gone With Only 59 Candles

Website of the Day
Congress Can't Find Their As-teroids

August 12, 2009

Michael J. Watts
Nigeria on the Brink

Bouthaina Shaaban
Where are the Arabs to Stand Up for the Hanoun and Ghawi Families?

Ricardo Alarcón
The Cuban Five: Justice in Wonderland

Binoy Kampmark
Terror Australis

Paul Craig Roberts
Concocting the Appearance of Recovery

Alan Farago
Going Down Absurd: the Future of Florida Bay

James Ridgeway
Ghostwriting Your Meds

Dave Lindorff
10 Questions to Ask If You Find Yourself at an ObamaCare Town Hall Meeting

David Macaray
Labor and the Conventional Wisdom

Niranjan Ramakrishnan
The Assimilation of Niranjan Ramakrishnan

Website of the Day
A Petition in Support of Janice Harper

August 11, 2009

Ricardo Alarcón
Forbidden Heroes

Marshall Auerback
America's Biggest Economic Problem?

Reza Yavari
Inside Iran's Most Infamous Prison

Winslow T. Wheeler
How Congress Pays For Its Pork

Tim Wise
Red-Baiting and Racism

Uri Avnery
A Moral Person

Deepak Tripathi
Getting Away With Torture

Greg Moses
Time to Plan for the Worst

Benjamin Dangl
Boycotting Big Beer

Dave Lindorff
Hecklers Unite! Why Aren't Progressives Disrupting ObamaCare Town Halls?

Website of the Day
What Bush Told Chirac About the Iraq War

August 10, 2009

David Price
Trial by FBI Investigation

Mike Whitney
There is No Recession; It's a Planned Demolition

Alan Farago
Seeds of Destruction: How the National Economy was Wrecked by the Politics of Deregulation in Florida

Conn Hallinan
The Honduran Coup: a U.S. Connection

Russell Mokhiber
Health Care: In Defense of Disruption

Paul Krassner
The Mystery Behind the Manson Murders

Sousan Hammad
Orgy of the Dead: the 2009 Fatah Conference

Jonathan Cook
Israeli School Apartheid

Ira Glunts
Netanyahu's Sister-in-Law Detained by Israeli Police; Calls Evictions an Unjustified Folly

George Wuerthner
Dead Tree Hysteria

Website of the Day
Conyers: ObamaCare is Crap

August 7 - 9, 2009

Alexander Cockburn
It Pays to Have a Nuke

Mike Whitney
Economy on a Scaffold

Elaine C. Hagopian
Obama's Israel Albatross

Carl Ginsburg
RX For Healthcare

Miguel Tinker Salas
Honduras is Only Part of the Story: the Conservative Counter-Attack in Latin America

Saul Landau
The Kidney Broker and the Money Laundering Rabbis

John Ross
The Mexican Genome: Big Science in the Service of Indian Genocide?

Anthony DiMaggio Obama and the Israel Lobby: Origins of Power

John Stanton
Expanding Human Terrain Systems?

Christopher Brauchli Legal Absurdities: Outing Three Strikes

Wajahat Ali
A Muslim American Hero: an Interview with Dave Eggers on "Zeitoun"

Ron Jacobs
As Long as the Wars Continue, We Must Resist Them

Franklin Lamb
Sunday Morning on the Dunes: Cleaning "Free Gaza Beach"

Bruce E. Levine
Protect Us From Our Friends

Michael Winship
Neighborhood Watch for Planet Earth

David Macaray
Glimmers of Hope for Labor?

Stephen Fleischman
Suicide Squad

Robert Bryce
Unplugging the Next Big Thing: the Hype Over Electric Cars

Robert Dodge, MD: Hiroshima and Nagasaki Remembered

Mark Seth Lender
The Message of the Glossy Ibis

David Yearsley
Vaucanson's Faun and the Duck in the Attic

Ben Sonnenberg
Chris Fuller's Brilliant Debut

Lorenzo Wolff
When Music's the Character

Poets' Basement
Dominguez and Corseri

Website of the Weekend
Warren Buffett's Betrayal

August 6, 2009

Ishmael Reed
Let's All Have a Beer

Paul Craig Roberts
The Expiring Economy

William Blum Assassinations and Coups: Keeping Track of the Empire's Crimes

Michael Donnelly
Rod Coronado: the Hardest Working Man in Animal Rights "Terrorism"

Jonathan Cook
Rabbis Ban Marriage for Israeli "Untouchables"

Dave Lindorff
The Health Care Reform Sell-Out

Ellen Brown
The Public Option in Banking

Website of the Day
Ellsberg on Hiroshima

August 5, 2009

Dedrick Muhammad /
Barbara Ehrenreich
The Destruction of the Black Middle Class

Norman Solomon
The Incredible, Shrinking Health Care Plan

William Blum
The Myths of Afghanistan: Past and Present

Gareth Porter
The ISI and the Taliban: US Officials Are Protecting Pakistani Aid to Taliban

Mary Lynn Cramer
The Myth of Medicare for All

Jim Goodman
Obama Needs to Take a Stand on Trade

Nadia Hijab
Playing From Strength in the Middle East

Gretchen Kroth
Guatemala's Garbage Dump Education System

Steve Macek /
Scott Sanders
Privatizing the Airwaves

Sarah Lazare
Inside G.I. Resistance

Website of the Day
The Locavore Myth

August 4, 2009

Mike Whitney
Bernanke's Shell Game

Dave Lindorff
The Recession Isn't Over, By a Long Shot

Patrick Cockburn
Did British Bomb Attacks in Iran Provoke Hostage Crisis?

Jonathan Cook
Israel's Campaign to Silence Human Rights Groups

Jeff Sher
Making a Mess of Health Care Reform

Dean Baker
Why Don't We Globalize Health Care?

Andy Worthington
Gitmo as Hotel California

Uri Avnery
A Jeremiad

Mark Weisbrot
U.S.-Brokered Mediation in Honduras Has Failed

Alvaro Huerta
Hold That Dustbin! So Much for the "End of Racism"

Website of the Day
Pentagon to Ban Facebook and Twitter?

September 15, 2009

All Debt is Not Created Equally

Government Spending is the Solution--Not the Problem

By MARSHALL AUERBACK

Tens of thousands of people marched to the U.S. Capitol on Sunday, carrying signs with slogans such as "Obamacare makes me sick" as they protested the president's health care plan and our so-called “out-of-control spending”. The marchers were chanting "enough, enough" and "We the People." Others, channeling their inner Joe Wilson, screamed "You lie, you lie!" while waving U.S. flags and the now omnipresent images of Obama as Hitler, Obama as the Joker, along with the usual placards decrying the “march to socialism”. 

And the reaction against the expansion of the state is by no means restricted to America.  According to the London Sunday Times, voters are overwhelmingly in favor of cutting public spending rather than tax rises to close the budget “black hole”. Sixty per cent want to shrink the size of the state to curb the £175 billion deficit amid mounting government disarray over the public finances.  Naturally, there is also growing support for this line of thinking in the financial community, despite having successfully received tens of trillions of dollars, even for deeply insolvent financial institutions.  The large banks and brokers lobbied for special treatment and got it.

To the extent that government spending is being used to prop up these economic zombies, I sympathize with the prevailing orthodoxy about wastage of our money.  However, the fasct remains  that the principle opposition to increased government spending is predicated on the simplistic notions about  fiscal activism. We need to get past the deficit myths and wrongheaded notions of “national solvency” so that we can move forward in other areas.  In the words of economist Bill Mitchell of the University of Newcastle, Australia: 

“Within a modern monetary economy, as a matter of national accounting, the sovereign government deficit (surplus) equals the non-government surplus (deficit)…In aggregate, there can be no net savings of financial assets of the non-government sector without cumulative government deficit spending.  The sovereign government via net spending (deficits) is the only entity that can provide the non-government sector with financial assets (net savings) and thereby simultaneously accommodate any net desire to save and hence eliminate unemployment.”

A seemingly growing populist drive toward a return to fiscal orthodoxy follows a stream of similar pronouncements from Wall Street, the Fed, the European Central Bank, the OECD, all of whom are legitimizing a campaign against further public spending and mobilizing support for “exit strategies” as they confidently pronounce the end of the recession. Implicit is the view that somewhere along the line ongoing government involvement in the “free market” reaches a tipping point where fiscal “intrusions” no longer act as a stabilizing force, but serve to impede the natural tendency of the market to equilibrate to recovery. The major hypothesis is that anytime the government is involved in the economy, eventually things go bad.  But markets do not self-regulate in ways that avoid major financial upheavals and activist government is required as a counterbalancing force.

President Obama himself has legitimized this line of thinking himself, committing himself to the goal of “fiscal sustainability” (whatever that means) as a medium term policy objective.  He said as much last Wednesday again during his speech on health care.  Having failed to understand what got us into the crisis, and equally having failed to appreciate the extent to which government spending actually prevented an economic catastrophe along the lines of the Great Depression, our policy makers who are championing this move toward neo-liberal fiscal orthodoxy are almost certain to drive us into the next recession if they take these demands to shrink government too aggressively.

Deficit hawks fail to understand that not all debt is created equally. As James Galbraith, L. Randall Wray and Warren Mosler have argued, there is no legitimate analogy to be drawn about the budgets of the government, which issues the currency, and the budgets of the non-government sector (households, firms etc) which uses that currency. The former does not have a financial constraint and can spend freely whereas the latter has to “finance” all spending either through earning income, drawing down savings or liquidating assets.

Although the global debt problem is very serious, the focus on growing government deficits and the need to rein in fiscal expenditures is profoundly misplaced, particularly in the U.S., where (relative to Europe and Japan), the government debt is low, relative to the size of the economy.  Additionally, as a matter of national accounting, deleveraging in the private sector cannot happen without an increase in the government’s deficit (the government’s deficit equals by identity the non-government’s surplus.  Consequently, if the US private sector is to rebuild its balance sheet by spending less than its income, the government will have to spend more than its tax revenue; the only other possibility is that the rest of the world begins to dis-save massively—letting the US run a current account surplus—but that is highly implausible). In addition, if the government deficit does not grow fast enough to meet the saving needs of the private domestic sector, national income will decline, and, given the size of the private sector’s debt problem, a full-blown debt-deflation process will emerge.

Yet today we are still overwhelmed with a chorus of criticism against fiscal activism:  we hear constantly that governments are an impediment to the operation of a genuinely “free market” which alone can generate sustained growth and prosperity.  The reality is very different on a number of levels.  Based on current account and fiscal balance results through Q2, it appears the private sector as a whole is running a net saving position rivaled only once before in the 1973-5 deep recession. At 8 per cent of GDP, the private sector net saving position is probably very near its peak given the rebound in equity prices, stabilizing home prices, and a labor market limping its way back from the abyss. What most commentators fail to acknowledge (Paul Krugman being a conspicuous exception), is that without the automatic stabilizers of fiscal policy, and the turn in the trade balance, the attempt by businesses and households to spend less than they earn would have otherwise been thwarted by a depression sized drop in private income.

Even though private individual and firms face external constraints as they accumulate debt, “household budget” analogies do not hold true for government, as Galbraith, Wray and Mosler argue:

“[I]f we take households or firms as a whole, the situation is different. The private sector’s ability to spend more than its income depends on the willingness of another sector to spend less than its income. For one sector to run a deficit, another must run a surplus (saving). In principle, there is no reason why one sector cannot run perpetual deficits, so long as at least one other sector wants to run surpluses.

“In the real world, we observe that the federal government tends to run persistent deficits. This is matched by a persistent tendency of the nongovernment sector, which includes the foreign sector, to save. Its ‘net saving’ is equal (by identity) to the government’s deficits, and its net accumulation of financial assets (or ‘net financial wealth’) equals, exactly, the government’s total net issue of debt—from the inception of the nation. Debt issued between private parties cancels out, but that between the government and the private sector remains, with the private sector’s net financial wealth consisting of the government’s net debt.”

The reality is – and it is a tyranny of accounting, not a theoretical impediment, since the financial balances of the three sectors must sum to zero – the only way to return to a fiscal surplus, or even a fiscal balance, without taking the private sector back into a deficit spending position, is if the trade balance can be heroically improved. The failure to recognize this relationship is the major oversight of neo-liberal analysis.

Beyond the benign neglect of the dollar depreciation, it is hard to see much in the way of policy measures to achieve either import replacement or export extension in the years ahead. If the fiscal balance is to return to surplus by 2013 – a more aggressive reversal than the CBO depicted in its August Outlook, but consistent with the political tone of returning to fiscal orthodoxy - one can trace out the implications for the private sector financial balance given various assumptions about the trajectory of the trade balance. To get both the fiscal and private sector financial balances to converge at a net saving position of 2 per cent of GDP, the trade balance will have to migrate to a 4 per cent of GDP surplus – something we have never seen before in the US during the post WWII period.

That leaves the emergence of a foreign middle class, and the shift toward domestic demand -led growth abroad as the key elements that could support a better US trade trajectory, which are largely elements outside the control of US policy makers. All of this likely means the path of US fiscal deficit as a share of GDP is probably a better route to full employment and prosperity than the misguided sentiment to cut government expenditures precipitously in a return to financial orthodoxy.

In aggregate, there can be no net savings of financial assets of the non-government sector without cumulative government deficit spending. The sovereign government via net spending (deficits) is the only entity that can provide the non-government sector with net financial assets (net savings) and thereby simultaneously accommodate any net desire to save and hence eliminate unemployment.

By the same token, the US is no more a “free market” today than the Soviet Union was during the heyday of its empire. The United States is now a species of State Capitalism. The top federal government executives are a partnership of top political and corporate managers who operate a war economy to enlarge their power as their main continuing goal. Less Adam Smith, more Mussolini style corporatism. Today’s unemployment levels that are the hallmark of deep depression are now visible as additional millions "leave" the labor force and are not counted as unemployed by the Federal government even though they are actually jobless. Hence, an 9.7 per cent "unemployment" rate as counted by the Federal government actually refers to a number almost twice as high if we incorporate underemployed and those who classify themselves as independent consultants but who are loathe to describe themselves as genuinely unemployed.  Meanwhile, the infrastructure of American society shows decay that can no longer be concealed despite the practiced showmanship of leading public officials.

By the same token, the emphasis on "sound fiscal management”, which allegedly created the platform for vigorous, low inflationary growth, generating jobs and higher incomes is false. Similarly, it is clear that the current reliance on monetary policy (accompanied by the budget deficit phobia) will always fail to deliver full employment and relies on the impoverishment of the disadvantaged for its ability to achieve low inflation.

In the “market fundamentalist” era, prior to the current economic crisis, governments began to rely on monetary policy for counter-stabilization. According to the logic, this rendered fiscal policy a passive player. Under the misguided inflation-targeting regimes that emerged in the early 1990s, central banks adjusted short-term interest rates to control inflation and therefore saw the unemployment rate as a policy tool rather than a legitimate target in its own right. Given the erroneous belief that expansionary fiscal policy was inflationary and its use would compromise the primacy of monetary policy, governments began to pursue surpluses and put in place frameworks to punish deficits and penalize workers who obtained high wage settlements, on the grounds that this was inherently inflationary (though this logic is never extended to CEO executive compensation or Wall Street bonuses).

The results have been clear. They indicate that this way of managing the economy cannot possibly be a sustainable long-term strategy. The emphasis we have placed on "financial responsibility" on the government side has actually introduced a deflationary bias that has slowed output and employment growth (keeping unemployment at unnecessarily high levels) and has forced the non-government sector into relying on increasing debt to sustain consumption.  The complaints about “private sector debt fuelled” consumption miss the mark:  the debt accumulation is a direct consequence of our failure to use fiscal policy in a manner which supports aggregate incomes and job growth.  Targeting wages and the use of a buffer stock of unemployed labor have been the preferred methods of controlling inflation, but minimizing economic output below full potential.

This was not, however, the model which gave the US its greatest period of prosperity.  In fact, until the mid-1970s, the U.S. consistently paid the highest industrial wages in the world. According to the late Seymour Melman (a professor of industrial engineering at Columbia University), this fact actually helped the U.S. maintain its economic supremacy.

Melman’s concept that explained this unconventional wisdom he called “alternative cost”. The basic idea is this: faced with high labor costs, firm managers will be more willing to mechanize, that is, use more machinery, and more sophisticated machinery, instead of using labor. By using more, better machinery, they increase labor productivity, which leads to higher wages, and they also stay at the cutting edge of technology. Melman compared factories in England and the U.S. after World War II, and found that the English, who paid lower wages, were using more primitive equipment than the Americans.   More recently, his theory has been echoed in Suzanne Berger’s new book, How We Compete, in which she argues that employing cheap labor is not the most effective way of responding to global competition.  The activities that succeed over time are those that involve conditions – such as long-term working relationships with customers and suppliers and specialized skills – which companies whose main asset is cheap labor cannot match.  A company policy of forcing down wages is not a recipe for long-term economic success.

Economic growth has never been strong enough to fully employ the willing workforce and inequalities are rising throughout the Western world not falling. Further, the disparities between wealthy and poor countries have widened.  By curbing the role of government and fiscal policy, we risk reverting to an approach which not only established the pre-conditions for the current crisis including the massive build-up of non-government debt and persistently high labor underutilization, but will almost certainly ensure a return to intense recessionary pressures (at a time when we are still experiencing double digit unemployment).  To be clear: I am not advocating unlimited government deficits or spending. Rather, the size of the deficit (surplus) should be market determined by the desired net saving of the non-government sector. This may not coincide with full employment and so it is the responsibility of the government to ensure that its taxation/spending are at the right level to ensure that this equality occurs at full employment.

Accordingly, if the goals are full employment AND price stability then the task is to make sure that government spending is exactly at the level that is neither inflationary, nor deflationary but sufficient to create full employment.  This is the true “Goldilocks” scenario, much beloved by Wall Street.  It can be better achieved through fiscal policy, rather than the preferred approach of the majority, which suggests that the same outcome is engineered via a monetary manipulation of short term rates by the central bank.  Fiscal policy is relatively direct – that is, the dollars go into aggregate demand – immediately they are spent. The standard view that government budget deficits lead to future tax burdens is problematic it assumes a financial constraint which in reality is non-existent.  The idea that unless policies are adjusted now (that is, governments start running surpluses or that we experience a "deflationary recession") is a recipe for social turmoil and revolution.  The sooner our policy makers understand that, the more likely we avoid repeating the mistakes that got us into this mess in the first place.

Marshall Auerback is a market analyst and commentator. He is a brainstruster for the Franklin and Eleanor Roosevelt Intitute. He can be reached at MAuer1959@aol.com

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