Two Americas

August 25, 2011 by · Leave a Comment 

By Azher Quader

Executive Director, Community Builders Chicago www.mycommunitybuilders.com azherquader@yahoo.com

The preamble to the US Constitution reads:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense,  promote the general  Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Some 223 years later America is still searching for that perfect union as it struggles to find unity within its ever expanding diversity.

Senator John Edwards during his presidential campaign of 2004 alluded to this growing division in these words:

Today there are two Americas, not one: One America that does the work, another America that reaps the reward. One America that pays the taxes, another America that gets the tax breaks. One America that will do anything to leave its children a better life, another America that never has to do a thing because its children are already set for life.

One America — middle-class America – whose needs Washington has long forgotten, another America – narrow-interest America – whose every wish is Washington’s command. One America that is struggling to get by, another America that can buy anything it wants, even a Congress and a President.

We see the two faces of America frowning at each other more and more these days. Be it the fight to raise the nation’s debt ceiling, or to repeal the Affordable Health Care Act enacted recently, or to change the immigration law to accommodate the undocumented. The divide in the country is sadly much deeper than what might appear to be on the basis of partisan politics.

What started as a friendly encounter between the pilgrims and the natives when they first landed at Plymouth ended up a few years later in the horrific tragedy that came to be recorded in American history as the trail of tears. When slave owners in the south refused to give up their white privilege, we fought a bloody civil war that pitted family against family and neighbor against neighbor. Subsequently laws were passed against slavery. Civil rights for Afro Americans were later restored. Yet years later the racial divide still continues to haunt us. When nineteen terrorists brought down the twin towers in Manhattan killing over three thousand innocent Americans we went to war again, this time against terror. Although Muslim Americans had nothing to do with the attacks, a decade later over half the nation eyes them with suspicion, doubting their loyalty.

This goal for a more perfect union is obviously not so easy to reach.

In over two hundred years we have not learnt to let go our prejudices, overcome our phobias, and subdue our bigotry.

We clearly live in two Americas.

In one the Muslims are respected, in the other they are hated.

In one live the rich and powerful steeped in privilege. In the other are the poor and powerless living from paycheck to paycheck.

In one are the hardworking. In the other those that hardly work.

In one are the passionate whose passion is big business. In the other are the committed, whose commitment is big government.

In one are those who believe in the power of self. In the other are those who believe in the strength of the state.

In one are those who believe in the compassion of owners. In the other are those who believe in the bargaining rights of the workers.

In one are those who believe charity corrupts the soul, stunts its growth. In the other are those who believe charity elevates the spirit and renews hope.

In one live those who understand the power of Wall Street. In the other are those only familiar with the ways of Main Street.

One America believes in marriage. The other America believes in civil union.

One asks for condoms in schools. The other says let there be abstinence.

One wants abortion on demand. The other says stop the killings.

One wants drugs legalized. The other wants drugs outlawed.

One claims health care is a right. The other says no it is a privilege.

One believes Medicare is a mistake and needs to be ended. The other knows it is a blessing, needs preserved.

One seeks solutions for the 12 million undocumented. The other says no deal, deport all.

One asks for gun laws that save lives and curbs violence. The other quotes the constitution and refuses to budge.

One seeks energy options that are cleaner and greener for the future.

The other refuses to let go the polluting ways of the past.

How then can we bridge these many divides?  Whence will come about that more perfect union?

Perhaps our scriptures hold the secret. Where reason fails to show the way, why not give revelation a chance.

Revelation tells us to be humble not arrogant, to provide for the welfare of others, not remaining absorbed with the concerns of our self interests, that people are to be judged by the nobility of their deeds, that compassion freedom and justice are to be practiced as a lifestyle,  not transcribed on paper and  hung on a wall, that anger, hate and fear can be overcome by the power of belief, that compromise is not a sign of weakness or failure but a means to heal many a wounds of dissent and mistrust.

Our constitution bars the state from imposing any one religion on the people, but does not deny us the right to practice the guidance of our revealed truths. If our understanding of worship ever travels beyond the narrow confines of the rituals that bind it, then some day we can yet rise as a people of faith to bridge our divides. That more perfect union which eludes us can perhaps come within our grasp only through a life of faith. Not faith defined by dogmas and traditions, but faith inspired by reason and revelations anchored in universal principles that transcend our ideological divides.

For Muslim Americans in the midst of yet another blessed month of Ramadan, what better time than this, to go beyond the punishing schedule of praying and fasting each day, to practice their faith as it is meant to be. Letting go of arrogance to embrace humility, embracing love in place of hate, promoting justice in place of prejudice, showing courage in place of fear, adopting patience in times of adversity, demonstrating integrity in the face of temptations.

As a community of faith, maybe we can do our part in bringing the two Americas together. To do that would mean not only working on our inner dimension, but also on our outer. Our spiritual journey cannot take us to a mountain top where we find peace and tranquility away from the turmoil in the valley. Our faith is incomplete without engagement in the problems of the world we live in. It is not enough to write a check and go to sleep when we can do much more. For from those who are given much, much is expected. Our busy social calendars cannot excuse us from the demands of political engagement Our alluring love for travel to distant exotic destinations cannot exempt us from serving the needy within our backyards. There is much for us to do. The two Americas we live in are waiting for our involvement.

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Gold, Silver Shine as US Falters

July 28, 2011 by · Leave a Comment 

By Alix Steel

NEW YORK (TheStreet) — Gold prices were soaring to record highs Wednesday as investors rushed to the safe haven after House Speaker John Boehner’s debt plan hit a brick wall.

Gold for August delivery was adding $9.20 to $1,626 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,626.80 and as low as $1,617 while the spot gold price was rising $7.10 according to Kitco’s gold index. Silver prices were climbing steadily higher as well, up 70 cents to $41.40 an ounce. The U.S. dollar index was adding 0.18% at $73.65 while the euro was shedding 0.22% vs. the dollar.

The House of Representatives had been gearing up to vote on Speaker Boehner’s debt plan in which the debt ceiling would be raised in two tranches based on spending cuts, but the plan hit a snag. The Congressional Budget Office said that his plan to cut $1.2 trillion over 10 years fell almost $400 billion short. This puts the Senate Democrat plan front and center, which also must face Budget Office scrutiny.

Although most experts think that a high gold price does not reflect a U.S. default, uncertainty over an agreement is a green light for investors to buy gold.

David Banister, chief investment strategist at ActiveTradingPartners.com, thinks that gold will hit $1,730 in a few weeks and maybe even soar to $1,800 an ounce. Banister doesn’t think the U.S. will default, however, but that global fiscal issues and negative real interest rates — the interest rate minus inflation — will continue to support high gold prices.

“Any reaction to the downside on gold will be temporary,” argues Banister. “Traders might be unwilling to make a commitment until they see the short term reaction,” explaining why gold hasn’t skyrocketed, “but I would say any short term pullback in gold on successful debt talks I would be a buyer.”

Stan Dash, vice president of applied technical analysis at TradeStation, also sees prices at $1,730. Dash, in measuring rallies since gold’s low in October of 2008, says that gold can typically move 20% in a leg of a bull market. A move to the $1,730 level would be a 17% rise from the May support level of $1,480 an ounce. “You can’t argue with price,” says Dash. “It’s making new highs. It’s still a bull market”

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The Enemy is Washington: An Economy Destroyed

July 28, 2011 by · Leave a Comment 

By Paul Craig Roberts

Recently, the bond rating agencies that gave junk derivatives triple-A ratings threatened to downgrade US Treasury bonds if the White House and Congress did not reach a deficit reduction deal and debt ceiling increase.  The downgrade threat is not credible, and neither is the default threat.  Both are make-believe crises that are being hyped in order to force cutbacks in Medicare, Medicaid, and Social Security.

If the rating agencies downgraded Treasuries, the company executives would be arrested for the fraudulent ratings that they gave to the junk that Wall Street peddled to the rest of the world. The companies would be destroyed and their ratings discredited. The US government will never default on its bonds, because the bonds, unlike those of Greece, Spain, and Ireland, are payable in its own currency. Regardless of whether the debt ceiling is raised, the Federal Reserve will continue to purchase the Treasury’s debt.  If Goldman Sachs is too big to fail, then so is the US government.

There is no budget focus on the illegal wars and military occupations that the US government has underway in at least six countries or the 66-year old US occupations of Japan and Germany and the ring of military bases being constructed around Russia.

The total military/security budget is in the vicinity of $1.1-$1.2 trillion, or 70 per cent -75 per cent of the federal budget deficit.

In contrast, Social Security is solvent.  Medicare expenditures are coming close to exceeding the 2.3 per cent payroll tax that funds Medicare, but it is dishonest for politicians and pundits to blame the US budget deficit on “entitlement programs.”

Entitlements are funded with a payroll tax.  Wars are not funded. The criminal Bush regime lied to Americans and claimed that the Iraq war would only cost $70 billion at the most and would be paid for with Iraq oil revenues. When Bush’s chief economic advisor, Larry Lindsay, said the Iraq invasion would cost $200 billion, Bush fired him. In fact, Lindsay was off by a factor of 20. Economic and budget experts have calculated that the Iraq and Afghanistan wars have consumed $4,000 billion in out-of-pocket and already incurred future costs.  In other words, the ongoing wars and occupations have already eaten up the $4 trillion by which Obama hopes to cut federal spending over the next ten years. Bomb now, pay later.

As taxing the rich is not part of the political solution, the focus is on rewarding the insurance companies by privatizing Medicare at some future date with government subsidized insurance premiums, by capping Medicaid, and by loading the diminishing middle class with additional Social Security tax.

Washington’s priorities and those of its presstitutes could not be clearer. President Obama, like George W. Bush before him, both parties in Congress, the print and TV media, and National Public Radio have made it clear that war is a far more important priority than health care and old age pensions for Americans.

The American people and their wants and needs are not represented in Washington. Washington serves powerful interest groups, such as the military/security complex, Wall Street and the banksters, agribusiness, the oil companies, the insurance companies, pharmaceuticals, and the mining and timber industries. 

Washington endows these interests with excess profits by committing war crimes and terrorizing foreign populations with bombs, drones, and invasions, by deregulating the financial sector and bailing it out of its greed-driven mistakes after it has stolen Americans’ pensions, homes, and jobs, by refusing to protect the land, air, water, oceans and wildlife from polluters and despoilers, and by constructing a health care system with the highest costs and highest profits in the world.

The way to reduce health care costs is to take out gobs of costs and profits with a single payer system.  A private health care system can continue to operate alongside for those who can afford it.
The way to get the budget under control is to stop the gratuitous hegemonic wars, wars that will end in a nuclear confrontation.

The US economy is in a deepening recession from which recovery is not possible, because American middle class jobs in manufacturing and professional services have been offshored and given to foreigners.  US GDP, consumer purchasing power, and tax base have been handed over to China, India, and Indonesia in order that Wall Street, shareholders, and corporate CEOs can earn more.
When the goods and services produced offshore come back into America, they arrive as imports. The trade balance worsens, the US dollar declines further in exchange value, and prices rise for Americans, whose incomes are stagnant or falling.

This is economic destruction. It always occurs when an oligarchy seizes control of a government. The short-run profits of the powerful are maximized at the expense of the viability of the economy.
The US economy is driven by consumer demand, but with 22.3 per cent unemployment, stagnant and declining wages and salaries, and consumer debt burdens so high that consumers cannot borrow to spend, there is nothing to drive the economy.

Washington’s response to this dilemma is to increase the austerity! 

Cutting back Medicare, Medicaid, and Social Security, forcing down wages by destroying unions and offshoring jobs (which results in a labor surplus and lower wages), and driving up the prices of food and energy by depreciating the dollar further erodes consumer purchasing power.  The Federal Reserve can print money to rescue the crooked financial institutions, but it cannot rescue the American consumer.

As a final point, confront the fact that you are even lied to about “deficit reduction.”  Even if Obama gets his $4 trillion “deficit reduction” over the next decade, it does not mean that the current national debt will be $4 trillion less than it currently is.  The “reduction” merely means that the growth in the national debt will be $4 trillion less than otherwise.  Regardless of any “deficit reduction,” the national debt ten years from now will be much higher than it presently is.

Paul Craig Roberts was Assistant Secretary of the US Treasury, Associate Editor of the Wall Street Journal, and professor of economics in six universities. His latest book, HOW THE ECONOMY WAS LOST, was published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com/Counter punch.

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Playing With Default

June 9, 2011 by · Leave a Comment 

By Joe Conason

The current puppet play in Congress—where Republicans sponsored a bill to raise the nation’s debt ceiling only because they wanted to vote it down—would be funny, if only they weren’t risking economic disaster. Unfortunately they’re not joking, as they push the country closer and closer to a potentially ruinous default.

If the showdown over debt and spending between the House majority and the White House isn’t resolved before the first week of August, the federal government will no longer be able to send out Social Security checks, run Veterans Administration hospitals, pay Medicare costs or operate the national park system, to mention just a few significant items. Hundreds of thousands of federal workers would be furloughed without pay, and millions of seniors would stop spending money, slamming an economy that already seems stalled.

But the consequences of that unprecedented situation would reverberate around the world, as nearly every expert—from the top bond trader, Mohamed El-Rian, to former Fed Chair Alan Greenspan—has warned.

Because both the U.S. dollar and U.S. Treasury notes are so important to world trade and investment, a default on U.S. debt could drive the global economy into a recession worse than that from which we have been slowly emerging. The same experts have warned against the Republicans’ insistence on forcing more budget cuts before they will pass a higher debt ceiling.

Indeed, Greenspan is so concerned with the prospect of a debt default, either now or in the future, that he had advocated increasing taxes to the same level as before the George W. Bush tax cuts. Congress must approve a higher debt ceiling, said the conservative fiscal guru—or risk catastrophe if the United States does not meet its obligations. The brinksmanship that had led to the current impasse in Washington, he told CNBC, is “an extraordinarily dangerous problem for this country.”

Why is it so perilous for Republicans and their tea party backers to push toward default? The rating firm Moody’s, following a similar warning weeks ago from Standard & Poor’s, is threatening to downgrade U.S. Treasury securities if an agreement isn’t reached within the coming month. Such a historic event would be much worse than embarrassing—and the Moody’s analysts now believe that a default is increasingly likely.

“Although we fully expected political wrangling prior to an increase in the statutory debt limit,” said a statement issued by the ratings firm, “the degree of entrenchment into conflicting positions has exceeded expectations.”

Political polarization over the debt limit “has increased the odds of a short-lived default,” it said, meaning that Moody’s doesn’t believe even the Republicans would permit the default to continue. But the nasty reverberations of even a brief default could last far longer, with sharply rising interest rates, crashing stock prices, a plunging dollar, and yet another blow to America’s prestige and power.

Most economists also believe that the Republican insistence on cutting spending in a slowing recovery is simply wrong because it will reduce demand and cost jobs. The party’s congressional leaders have yet to explain how they will boost the economy by throwing yet more people off federal and contractor payrolls, which will further depress the housing market, as well.

Remember that these are the same geniuses who opposed the auto bailout two years ago—which has now proved not only to have saved hundreds of thousands and perhaps millions of jobs, but at a very low cost. Somehow they seemed to believe that Europe and China should build cars while we let our auto industry wither.

While cutting spending and restraining the debt sound appealing, they must be done with great care. The Republican claim that there will be no harm in approaching default, or actually defaulting, is ridiculous to anyone who actually understands how markets work—and the damage they can sometimes wreak.

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