Wednesday, July 14, 2010

Review: Sound Truth & Corporate Myth$ by Riki Ott

561 pp. Produced for Dragonfly Sisters Press by Lorenzo Press – Jan. 2005. $24.95.

At just before 10 p.m. on Tuesday, April 20, 2010, the Transocean Ltd.-owned and BP Plc.-operated floating oil rig Deepwater Horizon was boring an exploratory well in the Macondo Prospect—about 40 miles southeast of the Louisiana coast and nearly a mile underwater—when it exploded without warning following a well blowout. For more than a day the inferno raged without respite, killing 11 crew members and injuring 17 others, sending the rig's remains plunging to the bottom of the ocean and leaving the broken seafloor well to spew millions of gallons of crude oil a day into the Gulf of Mexico. BP has tried repeatedly to stop the flow, to no avail. (As of this writing on Tuesday evening, July 13, it remains to be seen whether the well cap installed last night, a Band-Aid pending completion of the long-awaited relief wells next month, will actually work.) The spill's magnitude has beggared description or belief. By mid-June it was four to eight times the size of Exxon Valdez and had earned the title of worst environmental disaster in U.S. history. By the beginning of the current month it held the record for biggest offshore spill in world history, according to high-end government estimates.*

And as dire as the Deepwater Horizon spill is already, its harm could be magnified still further by a bungled or ill-considered cleanup response. That's exactly what happened with Exxon Valdez, argues marine biologist and oil spill activist Riki Ott, who has been aptly called the Erin Brockovich of that earlier disaster. Ott has written two books showing how gross misconduct on the part of Exxon (now Exxon Mobil Corp.) in the wake of Valdez created a secondary disaster that was just as damaging as the first one. These books, titled Not One Drop and Sound Truth & Corporate Myth$, exhaustively document how Exxon's actions compounded the oil's harm and destroyed the health of thousands of cleanup workers, in many cases permanently. In the interest of helping current spill victims, both books have now been made available online for free as ebooks. Ott is presently in the Gulf Coast area, sharing her expertise and prior experience with Valdez to try to make sure that BP doesn't get away with the same shenanigans as Exxon did.**

Ott holds a Ph.D. in fisheries and marine toxicology, and even long before Valdez was a prominent public figure and salmon “fisherma’am” in the spill's epicenter of Cordova, Alaska. The Valdez spill was a calling for Ott. She decided to make it her life's work to expose the truth behind the corporate line that Exxon was toeing (and that most people still believe, she feels) regarding the spill and its aftereffects. To that end, she has conducted extensive scientific research, testified at hearings, drafted legislation aimed at preventing future spills—and incorporated all of this research and activism into her two books, which are nothing short of heroic. Written with as much feeling as rigor and investigative enterprise, these books are required reading for anyone affected by either Valdez or the current Gulf spill. I reviewed the more recent of the two, Not One Drop (Chelsea Green Publishing, 2008), last year for Energy Bulletin. Here I review the earlier but equally important Sound Truth, a pioneering piece of scholarship that forces us to rethink our notions about how toxic oil and the chemicals used to clean it up really are.

Oil is much more toxic than scientists used to think—that is Ott's consistent refrain throughout the book. According to the old understanding of oil toxicity, impacts from oil spills should be entirely short-term. Since for the most part oil is non-water-soluble, scientists reasoned that it must not be that harmful to aquatic life and that whatever harm it does cause happens early on as the oil is shedding its highly volatile compounds. Thus, the old thinking goes, any oil that doesn't weather away completely after a certain amount of time is harmless, even if it remains visible in the environment for years after a spill. But studies done in the years since Valdez have shown these notions to be sadly mistaken. Oil actually becomes more, not less, harmful the longer it remains in the environment, because the weathering process exposes increasingly toxic polycyclic aromatic hydrocarbons (PAHs)—which Ott says "may well be the DDT of the 21st century."

And it's clear that Exxon had much more of an inkling about oil's true toxicity than it was willing to admit, even long before the findings discussed above had come to light. Ott proves this using some of Exxon's own documents, serendipitously obtained when company lawyers weren't quick enough at the draw to have them barred from scrutiny. Ott's other sources include medical records, court depositions, unpublished government reviews, academic journal articles and workers' ledgers and travel logs. The portrait that emerges from this mosaic is sordid indeed. Ott shows how Exxon abused the legal system by exercising constitutional rights originally intended for people; covered up the devastation caused by its disaster with skewed scientific studies and a skillful propaganda campaign; and went ahead with a PR-driven cleanup that it knew was fouling the environment with additional toxins, eradicating beach life spared by the initial oiling and poisoning workers by exposing them to dangerous levels of hazardous chemicals. The phrase "corporate greed" may be a tired cliché, but it couldn't be more fitting than in this case—and so, trite and unscientific though it may be, Ott is entirely forgiven for using it herself.

To begin with the impacts on wildlife, Sound Truth documents the huge losses that fish, birds and marine mammals endured as a result of the spill. The populations of numerous species crashed precipitously, and some animals began having trouble producing viable offspring or evading predators in their own native habitat. And this harm was all occurring at far lower PAH concentrations than those that scientists had long deemed to be safe, and that were permissible under existing state and federal laws. One study found significant effects in young salmon exposed to PAH concentrations that were 60 times lower than those permitted by federal law. In light of this evidence, Ott concludes that current regulatory standards for PAHs in water "are grossly under-protective of aquatic life."

These findings couldn't have been more at odds with those reported by Exxon-funded scientists. Exxon's scientists detected far lower PAH levels and harm to wildlife than did government-funded scientists. A subsequent report by the National Institute for Occupational Safety and Health (NIOSH) concluded that this is because Exxon scientists used analytical procedures that were 10 to 100 times less likely to pick up PAHs than the procedures used by their government counterparts. Exxon's scientists also did studies purporting to assess the recovery of numerous animal species. Among the tricks that they used to make it look like beaches had recovered, Ott relates, was the use of inappropriate control beaches. Instead of choosing unoiled beaches that hosted a similar wildlife makeup to that of the oiled beaches, Exxon's scientists chose beaches that were naturally barren due to their harsh, glacial conditions. Compared to these glacial beaches, even heavily oiled beaches looked like they had fully recovered and were flourishing once more.

Indeed, Ott dissects in great detail many cases of Exxon scientists skewing their studies so that they "tuned out" inconvenient findings. In support of her assessment, she cites Darrell Huff's seminal book How to Lie with Statistics, as well as a journal article identifying 18 differences in study design between government-funded studies and Exxon-funded studies that dramatically biased the latter's results. And she laments that government scientists were unable to counter these boisterous claims by Exxon with findings of their own, due to a gag order imposed on account of pending litigation. Ott contends that by the time this gag order had expired and public-trust scientists could finally publicize their findings, it was too late: Exxon's version had become the popular understanding of the spill and its environmental effects.

Besides the discovery of crude oil's extreme, persistent toxicity, the other half of Exxon Valdez's legacy, believes Ott, is the terrible saga of thousands of people cut down in their primes by exposure to noxious cleaning agents that should not have been used. (The warnings on numerous chemicals stated that they shouldn't be permitted to drain into watercourses, which obviously meant that they shouldn't have been allowed to drain into Prince William Sound.) In an ominous omen for cleanup workers, Exxon's primary cleanup contractor had been cited by the Environmental Protection Agency (EPA) only a year earlier for failing to maintain proper records related to hazardous wastes or adequately train personnel working around these wastes. In another ominous omen, Exxon paid workers to sign a waiver stating that they would not sue the company for any health-related problems that they might subsequently develop. Further, several cleaning solutions used during the cleanup contained an organic solvent called 2-butoxyethanol, which was on the EPA's list of "janitorial products to avoid." Prolonged exposure to these chemicals along with oil mists led to 6,722 recorded cases of upper respiratory infection among spill response workers. Exxon's trick for not reporting these health claims to the government was to lump them under the heading of cold-and-flu-like "infections," which don't need to be reported, as opposed to occupational illnesses, which do.

As this book poignantly reveals, the Valdez tragedy also shed light on a previously little-known disease called chemical sensitivity. People with this sickness are extremely sensitive to everyday chemicals that never used to give them problems in the past (for example, cosmetics or gas fumes) because of some past exposure to dangerous levels of hazardous chemicals. Chemically sensitive people can have life-threatening reactions to even trace levels of common chemicals. From court documents, personal journals and other sources, Ott pieces together the stories of some former Valdez cleanup workers who went on to develop chemical sensitivity. Because the illness was such a recently recognized phenomenon, many people faced tremendous challenges in trying to obtain diagnosis and treatment. To their immeasurable frustration, they often wound up being diagnosed as hypochondriacs or prescribed antidepressants because their doctors thought that it was all in their heads.

One of Sound Truth's greatest strengths is that it goes way beyond merely uncovering the scandal of Exxon's corporate myths. It also provides clear, well-informed suggestions aimed at reducing the likelihood of future spills and better handling the spills that still will inevitably occur. Ott recommends, among other things, the enactment of federal legislation requiring spillers to pay for their cleanups but prohibiting them from being in charge of cleanups. She points out that this policy of "federalizing" spill responses has been tried in other countries and has worked well. Because those in charge of such cleanups are beholden to the public interest rather than shareholders, they have no incentive to cut corners and merely sweep the problem under the rug while doing further environmental damage.

And that brings us back to BP and its spill in the Gulf. Some commentators have taken heart from BP's prompt admission of responsibility, its pledge to clean up the oil and its agreeing to set up a $20 billion damage claims fund. But stacked against these seemingly altruistic gestures are hints of Exxon-style negligence and secrecy, including security guards barring journalists from beaches, animal carcasses and other potential crime scene evidence mysteriously disappearing and spill response workers going without protective respirators.† Regardless of which reports reflect BP's true colors, there's one PR move on the part of BP chiefs that couldn't go wrong: putting a copy of Sound Truth into the hands of every cleanup worker, and taking care to read it long and hard themselves. It would be an honorable gesture, ensuring that workers are properly informed and outfitted—and giving us BP's word that it intends to succeed where Exxon failed on the social/environmental responsibility front. Fortunately, however, we don't have to wait for BP to disseminate this vital information. Anyone can access Ott's books online for free.

* Background on Deepwater Horizon gathered from the following sources: "New Oil Estimates Show Spill Rate Much Higher," Morning Edition, NPR, Jun. 11, 2010, (accessed Jun. 27, 2010); Ken Hoffman, “Despite spill, a few birds get a chance to live,” Houston Chronicle, Jul. 4, 2010, (accessed Jul. 5, 2010); "What do we know about the Deepwater Horizon disaster?, BBC News, Jun. 22, 2010, (accessed Jun. 27, 2010); NPR Staff and Wires, "Transocean Seeks To Limit Liability For Oil Rig Blast," NPR, May 13, 2010, (accessed Jun. 21, 2010); “Anadarko Refuses to Pay Costs of Deepwater Horizon Oil Spill,” Environment News Service, Jun. 18, 2010, (accessed Jun. 21, 2010); Tommy Dickey, “A Brief Introduction to Ocean Oil Spills,” University of California, Santa Barbara, (accessed Jul. 12, 2010); Associated Press and Miami Herald, "BP spill hits a somber record as Gulf's biggest," Seattle Times, Jul. 1, 2010, (accessed Jul. 13, 2010).
** The Erin Brockovich comparison comes from: “Chelsea Green Bookstore: Nature & Environment: Not One Drop,” Chelsea Green, (accessed Jun. 28, 2010). Not One Drop's release as a free ebook was reported in: "Chelsea Green Partners with Scribd on Oil Spill Book," Publishers Weekly, May 18, 2010, (accessed Jun. 21, 2010). Sound Truth's free ecopy is at:
† Riki Ott, interview with Keith Olbermann, "Countdown," MSNBC, New York, Jun. 14, 2010, (accessed Jun. 21, 2010); "Has BP been attempting to erase evidence? Shocking video of security guard confrontation," World News Network, Jun. 16, 2010, (accessed Jun. 21, 2010).

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Links to ecopies of Sound Truth and Not One Drop.

Frank Kaminski is a member of Seattle Peak Oil Awareness (SPOA), a connoisseur of post-oil novels and a regular book reviewer for Energy Bulletin. He can be reached at frank.kaminski AT

Original article available here

Who repealed the Glass-Steagall Act?

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It's Done: Oakland Fires 80 Police Officers...

Because of budget problems.

Below are the list of "small" crimes the police will now officially not respond to in person. Victims will instead be asked to fill out forms over the internet. The crimes include:

  • burglary
  • theft
  • embezzlement
  • grand theft
  • grand theft:dog
  • identity theft
  • false information to peace officer
  • required to register as sex or arson offender
  • dump waste or offensive matter
  • discard appliance with lock
  • loud music
  • possess forged notes
  • pass fictitious check
  • obtain money by false voucher
  • fraudulent use of access cards
  • stolen license plate
  • embezzlement by an employee (over $ 400)
  • extortion
  • attempted extortion
  • false personification of other
  • injure telephone/ power line
  • interfere with power line
  • unauthorized cable tv connection
  • vandalism
  • administer/expose poison to another's

Obviously, it's time protection be privatized away from government.

Tarpley: 'Obama, the Wall St. puppet'

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Chinese rating agency strips Western nations of AAA status

China's leading credit rating agency has stripped America, Britain, Germany and France of their AAA ratings, accusing Anglo-Saxon competitors of ideological bias in favour of the West.

By Ambrose Evans-Pritchard, International Business Editor
Published: 9:17PM BST 12 Jul 2010

Dagong Global Credit Rating Co used its first foray into sovereign debt to paint a revolutionary picture of creditworthiness around the world, giving much greater weight to "wealth creating capacity" and foreign reserves than Fitch, Standard & Poor's, or Moody's.

The US falls to AA, while Britain and France slither down to AA-. Belgium, Spain, Italy are ranked at A- along with Malaysia.

Meanwhile, China rises to AA+ with Germany, the Netherlands and Canada, reflecting its €2.4 trillion (£2 trillion) reserves and a blistering growth rate of 8pc to 10pc a year.

Dominique Strauss-Kahn, chief of the International Monetary Fund, agreed on Monday that the rising East is a transforming global force. "Asia's time has come," he said.

The IMF expects Asia to grow by 7.7pc in 2010, vastly outpacing the eurozone at 1pc and the US at 3.3pc. Emerging nations hold 75pc of the world's $8.4 trillion (£5.6 trillion) of reserves.

Dagong rates Norway, Denmark, Switzerland, and Singapore at AAA, along with the commodity twins Australia and New Zealand.

Chinese president Hu Jintao said in April that the world needs "an objective, fair, and reasonable standard" for rating sovereign debt. Dagong appears to have stepped into the role, saying its objective was to assess countries using methods that would "not be affected by ideology".

"The reason for the global financial crisis and debt crisis in Europe is that the current international credit rating system does not correctly reveal the debtor's repayment ability," said Guan Jianzhong, Dagong's chairman.

The agency, known in China for rating companies, said its goal is to "correct the defects" of the existing system and offer a counter-weight to Western agencies.

Dagong appears to base growth potential on past performance but this can be misleading, especially in states enjoying technology catch-up. Japan was a high-flyer in 1970s and 1980s before stalling when the Nikkei bubble burst. It has been trapped in near perma-slump ever since.

China may start to face some of Japan's demographic problems by the middle of this decade when the working age population peaks.

The Western rating agencies put a high value on a long-established rule of law and government institutions that have proved resilient over many decades, or even centuries. China's political system may appear strong – as did the Soviet Union's – but only time will tell whether its foundations are brittle. The violent upheavals of the Cultural Revolution are still a very fresh memory.


How Brokers Became Bookies: The Insidious Transformation of Markets Into Casinos

"You all are the house, you're the bookie. [Your clients] are booking their bets with you. I don't know why we need to dress it up. It's a bet." - Sen. Claire McCaskill, Senate Subcommittee investigating Goldman Sachs (Washington Post, April 27, 2010)

Ever since December 2008, the Federal Reserve has held short-term interest rates near zero. This was not only to try to stimulate the housing and credit markets, but also to allow the federal government to increase its debt levels without increasing the interest tab picked up by the taxpayers. The total public US debt increased by nearly 50 percent from 2006 to the end of 2009 (from about $8.5 trillion to $12.3 trillion), but the interest bill on the debt actually dropped (from $406 billion to $383 billion), because of this reduction in interest rates.

One of the dire unintended consequences of that maneuver, however, was that municipal governments across the country have been saddled with very costly bad derivatives bets. They were persuaded by their Wall Street advisers to buy credit default swaps to protect their loans against interest rates shooting up. Instead, rates proceeded to drop through the floor, a wholly unforeseeable and unnatural market condition caused by rate manipulations by the Fed. Instead of the banks bearing the losses in return for premiums paid by municipal governments, the governments have had to pay massive sums to the banks - to the point of pushing at least one county to the brink of bankruptcy (Jefferson County, Alabama).

Another unintended consequence of the plunge in interest rates has been that "savers" have been forced to become "speculators" or gamblers. When interest rates on safe corporate bonds were around 8 percent, a couple could aim for saving half a million dollars in their working careers and count on reaping $40,000 yearly in investment income, a sum that, along with Social Security, could make for a comfortable retirement. But very low interest rates on bonds have forced these once-prudent savers into the riskier and less predictable stock market, and the collapse of the stock market has forced them into even more speculative ventures in the form of derivatives, a glorified form of gambling. Pension funds, which have binding pension contracts entered into when interest was at much higher levels, need an 8 percent investment return to meet their commitments. In today's market, they cannot make that sort of return without taking on higher risk, which means taking major losses when the risks materialize.

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Derivatives are basically just bets. Like at a racetrack, you don't need to own the thing you're betting on in order to play. Derivative casinos have opened up on virtually anything that can go up or down or have a variable future outcome. You can bet on the price of tea in China, the success or failure of a movie, whether a country will default on its debt, or whether a particular piece of legislation will pass. The global market in derivative trades is now well over a quadrillion dollars - that's a thousand trillion - and it is eating up resources that were at one time invested in productive enterprises. Why risk lending money to a corporation or buying its stock, when you can reap a better return betting on whether the stock will rise or fall?

The shift from investing to gambling means that not only are investors making very little of their money available to companies to produce goods and services, but the parties on one side of every speculative trade now have an interest in seeing the object of the bet fail, whether a company, a movie, a politician or a country. Worse, high-speed program traders can actually manipulate the market so that the thing bet on is more likely to fail. Not only has the market become a casino, but the casino is rigged.

High frequency traders - a field led by Goldman Sachs - use computer algorithms to automatically bet huge sums of money on minor shifts in price. These bets send signals to the market that can themselves cause the price of assets to shoot up or tumble down. By placing high-volume trades, the largest speculative traders can, thus, intentionally "fix" prices in any direction they want.

"Prediction" Markets

Casinos for betting on what something will do in the future have been elevated to the status of "prediction" markets, and they can cover a broad range of issues. MIT's Technology Review launched a futures market for technological innovations, in order to bet on upcoming developments. The NewsFutures and TradeSports Exchanges enable people to wager on matters such as whether Tiger Woods will take another lover, or whether bin Laden will be found in Afghanistan.

A 2008 conference of sports leaders in Auckland, New Zealand, featured Mark Davies, head of a sport betting exchange called Betfair. Davies observed that these betting exchanges, while clearly gambling forums, are little different from the trading done by financial firms such as JPMorgan. He said:

"I used to trade bonds at JPMorgan, and I can tell you that what our customers do is exactly the same as what I used to do in my previous life, with the single exception that where I had to pour over balance sheets and income statements, they pour over form and team-sheets."

The online news outlet Slate monitors various prediction markets to provide readers with up-to-date information on the potential outcomes of political races. Two of the markets covered are the Iowa Electronic Markets and Intrade. Slate claims that these political casinos are consistently better at forecasting winners than pre-election polls. Participants bet real money 24 hours a day on the outcomes of a range of issues, including political races. Newsfutures and Casualobserver are similar, smaller exchanges.

Besides shifting the emphasis to gambling ("Why Vote When You Can Bet?" says Slate's "Guide to All Political Markets"), prediction markets, like the stock market, can be rigged so that they actually affect outcomes. This became evident, for example, in 2008, when the John McCain campaign used the Intrade market to shift perception of his chances of winning. A supporter was able to single-handedly manipulate the price of McCain's contract, causing it to move up in the market and prompting some mainstream media to report it as evidence that McCain was gaining in popularity.

Betting on Terrorism

The destructive potential of prediction markets became particularly apparent in one sponsored by the Pentagon, called the "policy analysis market" (PAM) or "terror futures market." PAM was an attempt to use the predictive power of markets to forecast political events tied to the Middle East, including terrorist attacks. According to The New York Times, the PAM would have allowed trading of futures on political developments including terrorist attacks, coups d'état and assassinations. The exchange was shut down a day after it launched, after commentators pointed out that the system made it far too easy to make money with terror attacks.

At a July 28, 2003, press conference, Sens. Byron L. Dorgan (D-North Dakota) and Ron Wyden (D-Oregon) spoke out against the exchange. Wyden stated, "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque," while Dorgan called it "useless, offensive and unbelievably stupid."

"This appears to encourage terrorists to participate, either to profit from their terrorist activities or to bet against them in order to mislead US intelligence authorities," they said in a letter to Adm. John Poindexter, the director of the Terrorism Information Awareness Office, which developed the idea. A week after the exchange closed, Poindexter offered his resignation.

Carbon Credit Trading

A massive new derivatives market that could be highly destructive economically is the trading platform called Carbon Credit Trading, which is on its way to dwarfing world oil trade. The program would allow trading in "carbon allowances" (permitting companies to emit greenhouse gases) and in "carbon offsets" (allowing companies to emit beyond their allowance if they invest in emission-reducing projects elsewhere). It would also allow trading in carbon derivatives, for example, futures contracts to deliver a certain number of allowances at an agreed price and time.

Robert Shapiro, former undersecretary of commerce in the Clinton administration and a co-founder of the US Climate Task Force, has warned, "We are on the verge of creating a new trillion-dollar market in financial assets that will be securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market."

Eoin O'Carroll cautioned in The Christian Science Monitor:

"Many critics are pointing out that this new market for carbon derivatives could, without effective oversight, usher in another Wall Street free-for-all just like the one that precipitated the implosion of the global economy.... Just as the inability of homeowners to make good on their subprime mortgages ended up pulling the rug out from under the credit market, carbon offsets that are based on shaky greenhouse-gas mitigation projects could cause the carbon market to tank, with implications for the broader economy."

The proposed form of cap and trade has not yet been passed in the US, but a new market in which traders can speculate on the future of allowances and offsets has already been launched. The largest players in the carbon credit trading market include firms such as Morgan Stanley, Barclays Capital, Fortis, Deutsche Bank, Rabobank, BNP Paribas, Sumitomo, Kommunalkredit, Credit Suisse, Merrill Lynch and Cantor Fitzgerald. Last year, the financial services industry had 130 lobbyists working on climate issues, compared to almost none in 2003. The lobbyists represented companies such as Goldman Sachs and JPMorgan Chase.

Billionaire financier George Soros says cap and trade will be easy for speculators to rig. "The system can be gamed," he said last July at a London School of Economics seminar. "That's why financial types like me like it - because there are financial opportunities."

Time to Board Up the Casinos and Rethink Our Social Safety Net?

Our forebears considered gambling to be immoral and made it a crime. As the Industrial Revolution and the ascendance of capital changed religious mores, gambling gradually gained acceptance, but even within that permissive paradigm, derivative trading was originally considered an illegal form of gambling. Perhaps, it is time to reinstate the gambling laws, board up the derivatives casinos and return the stock market to what it was designed to be: a means of funneling the capital of investors into productive businesses.

Short of banning derivatives altogether, the derivatives business could be slowed up considerably by imposing a Tobin tax, a small tax on every financial trade. "Financial products" are virtually the only products left on the planet that are not currently subject to a sales tax; and at over a quadrillion dollars in trades annually, the market is huge.

A larger issue is how to ensure adequate retirement income for the population without forcing people into gambling with their life savings to supplement their meager Social Security checks. It may be time to rethink not only our banking and financial structure, but the entire social umbrella that our founding fathers called the Common Wealth. The genius of Social Security was its recognition of the basic economic truth that real "security" rests on the ability of a society to provide for and take care of those who, because of age, health or economic conditions, cannot take care of themselves.

Deficit hawks cry that we cannot afford more spending; but according to Richard Cook, a former US Treasury Department official, the government could print and spend several trillion new dollars into the money supply without causing price inflation. Writing in Global Research in April 2007, he noted that the US gross domestic product in 2006 came to $12.98 trillion, while the total national income came to only $10.23 trillion; and at least 10 percent of that income was reinvested rather than spent on goods and services. Total available purchasing power was, thus, only about $9.21 trillion, or $3.77 trillion less than the collective price of goods and services sold. Where did consumers get the extra $3.77 trillion? They had to borrow it, and they borrowed it from banks that created it with accounting entries on their books. If the government had replaced this bank-created money with debt-free government-created money, the total money supply would have remained unchanged. That means a whopping $3.77 trillion in new government-issued money could have been fed into the economy in 2006 without inflating prices. Different proposals have been made concerning how this money should be distributed, but at least some of it could be used to provide adequate Social Security checks, relieving the pressure to gamble with our savings.

The Federal Reserve has funneled $4.6 trillion to Wall Street in bailout money, most of it generated via "quantitative easing" (in effect, printing money); yet, hyperinflation has not resulted. To the contrary, what we have today is Depression-style deflation. The M3 money supply shrank in the last year by 5.5 percent, and the rate at which it is shrinking is accelerating. The explanation for this anomaly is that the Fed's $4.6 trillion added by quantitative easing fell far short of the estimated $10 trillion needed to "reflate" the money supply after the "shadow lenders" disappeared. When these investors discovered that the "triple-A" mortgage-backed securities they had been purchasing from Wall Street were actually very risky investments, they exited the market, credit dried up and the money supply (which today consists almost entirely of credit or debt) collapsed.

The only viable way to reflate a collapsed money supply is to put more money into it; and creating the national money supply is the sovereign right of governments, not of banks. If the government wants to remain sovereign, it needs to reassert that right.

Niko Kyriakou contributed to this article.

Empty Store Shelves Coming to America

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3rd D.C. lawmaker faces debt problems

A D.C. Council member who serves on a powerful finance committee is facing a federal lien seeking more than $50,000 in unpaid income taxes — the third city lawmaker to face scrutiny over personal or tax debts in recent months.

The Internal Revenue Service filed the lien against Michael A. Brown, at-large independent, in April citing debts on four years of income taxes dating back to 2004.

Though the IRS does not comment on individual tax cases, the lien filed against Mr. Brown states, "We have made a demand for payment of this liability, but it remains unpaid."

Mr. Brown, a lawyer who won citywide office in 2008, is a member of the council's Committee on Finance and Revenue, which oversees the D.C. Office of the Chief Financial Officer. That city agency is charged with collecting, budgeting and accounting for more than $7 billion each year.

A copy of the lien filed against Mr. Brown at the D.C. Office of the Recorder of Deeds shows tax debts of $7,128.22 for 2004, $28,625.11 for 2005, $5,176.17 for 2007 and $11,951.18 for 2008.

Mr. Brown said he is close to paying off the tax debts. He said he has been on a scheduled installment plan with the IRS for about two years and that he's never missed a payment. He said his last payment is scheduled for August.

"Nothing has been done wrong, zero," he said, adding that his situation is no different from those of millions of Americans working to pay off taxes through installment plans with the IRS.

Mr. Brown said the tax issue surfaced after he took a deduction that the IRS later challenged as taxable income. He said he didn't challenge the agency when it said that the money should have been taxed. He declined to identify the deduction he sought.

He said that his tax debt was recalculated after the IRS notified him that he couldn't take the deduction at issue. He said his payments to close out the debt are "totally under control."

Mr. Brown is the second council member to face a federal tax lien in recent months. In February, the IRS filed a lien against former Mayor Marion Barry, Ward 8 Democrat, citing more than $15,000 in unpaid income taxes from 2005 to 2008.

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Historian warns of sudden collapse of American ‘empire’

Brent Gardner-Smith

Harvard professor and prolific author Niall Ferguson opened the 2010 Aspen Ideas Festival Monday with a stark warning about the increasing prospect of the American “empire” suddenly collapsing due to the country’s rising debt level.

“I think this is a problem that is going to go live really soon,” Ferguson said. “In that sense, I mean within the next two years. Because the whole thing, fiscally and other ways, is very near the edge of chaos. And we’ve seen already in Greece what happens when the bond market loses faith in your fiscal policy.”

Ferguson said empires — such as the former Soviet Union and the Roman empire — can collapse quite quickly and the tipping point is often when the cost of servicing an empire’s debt is larger than the cost of its defense budget.

“That has not been the case I think at any point in U.S. history,” Ferguson said. “It will be the case in the next five years.”

Ferguson was conscious of opening the Ideas Festival on such a stark note.

“Walter Isaacson, the leader of this great institution said, ‘Don’t be too dark!,’” Ferguson said.

The affable British scholar tried to keep it light. He used a stage whisper to tell the Aspen Institute audience, “I know you’re not comfortable with the word ‘empire,’ especially just after the Fourth of July, but you are the Redcoats now.”

He said the U.S. is now deeply in the red as a country because of a combination of the Great Recession, the resulting federal stimulus and financial bailout programs, two wars, the Bush tax cuts, and a growth in social entitlement programs.

And economic debt can lead to a sudden loss of military power and global respect, Ferguson said.

“By combating our crisis of private debt with an extraordinary expansion of public debt, we inevitably are going to reduce the resources available for national security in the years ahead,” Ferguson said. “Because as a debt grows, so the interest payments you have to make on it grow, even if interest rates stay low. And on current projections, the federal debt is going to be absorbing around 20 percent — a fifth of all the taxes you pay — within just a few years.

“The item of discretionary federal expenditure most likely to be squeezed is of course defense. And there are lots of historic precedents for that,” said Ferguson, who is the author of “Empire: The Rise and Demise of the British World Order and the Lessons for Global Power.”

Ferguson said the financial crisis that started in 2007 has “has accelerated a fundamental shift in the balance of power,” with the U.S. shedding power and China absorbing it.

“I’ve just come back from China — a two-week trip there — and the thing I heard most often was, ‘You can’t lecture us about the superiority of your system anymore. We don’t need to learn anything from you about financial institutions and forget about democracy. We see where it has got you.’”

David Gergen of CNN, who moderated the discussion, which also included billionaire Mortimer Zuckerman, asked Ferguson whether it made a difference if the U.S. declined as a world power.

“Having grown up in a declining empire, I do not recommend it,” Ferguson said. “It’s not a lot of fun, actually, decline. To be more serious, a world in which the United States is no longer predominate is not likely to be a better world, actually.”

In what he called his “light moment,” Ferguson said, “I think there is a way out for the United States. I don’t think its over. But it all hinges on whether you can re-energize the real mainsprings of American power. And those two things are technological innovation and entrepreneurship.

“Those are the things that made the United States the greatest economy in the world and the critical question is, ‘Are we going to get it right?’ Can we revive those things in such a way that in the end we grow our way out of this hole the way the United States grew its way out of the 1970s and of course out of the 1930s?”

The Aspen Ideas Festival continues through July 11 at the Aspen Institute. Such notables as U.S. Attorney General Eric Holder, Microsoft billionaire Bill Gates, U.S. Senator Dianne Feinstein, and former Federal Reserve chairman Alan Greenspan are scheduled to appear.

A number of events are open to the public, but tickets were going fast on Monday through the website Aspen Show Tickets. Aspen Public Radio also plans on broadcasting a number of festival events live, including on Tuesday at 10:30 a.m. and at 1 and 5 p.m.

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Photo Caption:
Harvard professor and author Niall Ferguson speaks about the financial crisis during an opening session of the Aspen Ideas Festival on Monday afternoon.

There is No Plan For Permanently Housing the 1.9 Million Haitians Who Lost Their Homes in the Quake

"People are living in ravines, they are living on sidewalks, jammed up against other houses," says Beverly Bell, of the group Other Worlds. "They are creating structures out of any temporary material they can find, a lot of them no more than four sticks and bed sheets." Bell also talks about how the international reconstruction plan for Haiti revolves around the creation of four new free enterprise zones which will expand the number of sweatshop factories in Haiti.[includes rush transcript]


Beverly Bell, associate fellow at the Institute for Policy Studies and runs the economic justice group Other Worlds. She is the author of "Walking on Fire: Haitian Women’s Stories of Survival and Resistance."

Related stories

Rush Transcript

AMY GOODMAN: We’re here in Haiti, on the six month anniversary of the January 12th earthquake. It’s July 12th and we’ve gone out about 7 miles from Port-au-Prince, between Morne Cabrit and Titayene. These are two famous dumping grounds, killing grounds, that through the Duvalier years and then again during the first coup against President Aristide, 1991 to 1994, people’s bodies would be dumped, between the mountains and a ways down the road. I am joined by Beverly Bell, she’s taken us here. She’s with "Another World" and she is a fellow with the Institute for Policy Studies. Beverly, tell us about where we are right now.

BEVERLY BELL: We are in one of the hottest parts of this whole side of Haiti. I was here today at high noon and the crushed white gravel that is underfoot in this camp is just blinding and the heat is shocking. And this is where about 10,000 people have been relocated after they were sent away from another camp in Port-au-Prince. About one in seven has been left homeless and displaced from the January 12th earthquake, and most of them have created temporary housing. Now, six months later, in the middle of earthquake season, the government’s response, that is, the Haitian government and the U.S. government as well as the United Nations, has been this—has been to move people from one set of temporary housing, plastic tarps that are damaged in the wind and the rains, to another set of temporary housing. And there is absolutely no plan anywhere in the country for permanent housing for the 1.9 million people who are left victims.

AMY GOODMAN: Can you talk about where the camps are? We just passed, well, the palace that’s crumbling. They haven’t brought it down in six months, the earthquake started the process. But there are thousands of people in the plaza outside the palace.

BEVERLY BELL: People are living in almost every nook in a country that is densely populated and that has very little open space. People are living in ravines, they are living on sidewalks jammed up against other houses. They are creating structures out of any temporary material they can find. A lot of them, no more than four sticks and bedsheets. And they have set themselves up in impromptu camps as well, such as the one that you mentioned, down in the National Park, they’re called shomas. They are all over the country looking for any lodging they can find, including out in the countryside, many have gone to the countryside and have been taken in through the kindness of strangers, small farmers. But this is the solution. These people now are two hours away from the center of town, where schools are, where health care is, where jobs are, where their family and communities are. It costs about a quarter for them to go round trip and it takes four hours round-trip. No one is providing transportation. A quarter for these folks is huge.

And no one has informed them of any plan of permanent relocation. President Preval has said that a Korean assembly shop is going to come in here as part of the U.S. and U.N. plan to expand the sweatshop industry. But this is all that people have been told about their future. If you ask them where they’re going or what their future will be, they will make the Haitian sign a resignation with their hands and say we have no idea, no one’s told us anything.

AMY GOODMAN: What about the free enterprise zones?

BEVERLY BELL: Four new free enterprise zones have been created since the earthquake. Both Bill Clinton, who is the special envoy to Haiti from the U.N., and Hillary Clinton, of course in her role as Secretary of State, have said that the assembly industry is the linchpin of the reconstruction plan. And yet the sweat shop workers earn $3.09 a day, which is not a livable wage, work in often terrible conditions, and are forced to live in terrible conditions as well. Many of the people who died in the earthquake were sweatshop workers who could not afford better housing than temporary makeshift structures that were on top of each other, that were on the sides of hills, that were completely unstable, which is why up to 300,000 people died during this earthquake. So, to base a reconstruction plan on the expansion of an economic sector that already has failed the people, and which is based on transient capital that can and will pick up at any given moment to move to where jobs are cheaper, is not a good solution for Haiti.

AMY GOODMAN: How many enterprise zones are there?

BEVERLY BELL: Right now there is one large one in Port-au-Prince and there is another smaller one out by the Dominican border. But there has been an effort to expand them, including, as I mentioned, putting individual sweatshops in different refugee camps.

AMY GOODMAN: The huge refugee camp in front of the palace that just grew by thousands after the earthquake, what are the plans for it?

BEVERLY BELL: I have many friends who live there and they will tell me whatever they have heard that day. But they say, you know, we don’t have so much as a radio, so we don’t really know. No one is communicating with them. They’ve been told on numerous occasions that they were going to be thrown out and moved to one location or the next. To date they remain there, but there have been other camps that have been forcibly evicted. People who lost almost everything in the earthquake worked very, very hard to find their own tents because most have not been provided to people, unlike here. Finally found tents, set themselves up in refugee camps and then the Haitian police, the anti-riot squads, sometimes accompanied by MINUSTAH, the U.N. so-called peacekeeping forces, went in and destroyed the camps and evicted people. So people have no idea where they’re supposed to go or what they’re supposed to do, and for the most part, they’re not getting any aid. In fact, they’re no longer even receiving food aid and now they have been told that even free water is going to be cut off since the Haitian businessmen who control the water have complained that their profits are being undercut.

AMY GOODMAN: Beverly Bell, what about the issue of rape in the camps?

BEVERLY BELL: The issue of rape has been horrible. There have been no good numbers kept, but there are some grass roots groups who have made an effort to compile statistics based on their residence in the camps, because these are all women who have lost their own homes. In Shoumas alone, they have said that 250 women have been raped. And that is just one camp out of hundreds.

There’s only one solution, one short term solution to the rape, and that is permanent housing for people. Anyone should be free of rape at any place, but as long as women are sleeping without any walls, often without any men, or any man who wishes, any would be perpetrator, can look in and see them there, their vulnerability is tremendous. Little girls have been raped, old women have been raped. It’s just an ever spiraling phenomenon as poverty and alienation continues and no solution is in sight. The international community has done very little about it. The U.N. has talked a lot, but has responded in a very paltry way. But really the only solution is housing for these people, where they can go in at night and lock their doors and feel secure within their own home.

AMY GOODMAN: What are your observations on this sixth anniversary of the earthquake?

BEVERLY BELL: One piece that is largely left out of the story is that there really is an alternative. Haitians here use the term "another Haiti is possible." And in fact, literally beginning the week of the earthquake, peasant movements, women movements, democracy movements, grass-roots movements of all sorts began meeting together and planning what they view as an alternative development plan that would be based on equity and justice and participation, democratically by all, both in the construction of the plan as well as who develops from it.

Right now they have been completely excluded from the process, but they are asking both for power, to have a say in their own future, as well as the space to build a future country that is not based on being a source of cheap labor for U.S. goods that are purchased, you know, at low cost from abroad. But to have an economy that is based on the re-valurization of peasant agriculture. Remember that 60 to 80 percent of Haitians are still farmers, unlike any other country in the Americas, Haiti still has a majority population that still wants to grow. They are asking that social needs be met for all. They are asking for rights and security for women and children. They are asking for their voices to be a critical part of any process. And if they are given the power to allow this to come forth, there is a whole nation of people waiting to reconstruct a country that looks nothing like the country that was destroyed, because the country that was destroyed largely on January 12th served very few and only a very few have an interest in seeing that coming back.

Americans’ credit scores at new lows

NEW YORK — The credit scores of millions more Americans are sinking to new lows.

Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.

Because consumers relied so heavily on debt to fuel their spending in recent years, their restricted access to credit is one reason for the slow economic recovery.

"I don't get paid for loan applications, I get paid for closings," said Ritch Workman, a Melbourne, Fla., mortgage broker. "I have plenty of business, but I'm struggling to stay open."

FICO's latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO's 300-to-850 scale weren't as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on

More are likely to join their ranks. It can take several months before payment missteps actually drive down a credit score. The Labor Department says about 26 million people are out of work or underemployed, and millions more face foreclosure, which alone can chop 150 points off an individual's score. Once the damage is done, it could be years before this group can restore their scores, even if they had strong credit histories in the past.

On the positive side, the number of consumers who have a top score of 800 or above has increased in recent years. At least in part, this reflects that more individuals have cut spending and paid down debt in response to the recession. Their ranks now stand at 17.9 percent, which is notably above the historical average of 13 percent, though down from 18.7 percent in April 2008 before the market meltdown.

WLI Growth Falls Further

(Reuters) - A measure of future U.S. economic growth fell to the lowest since July 2009, indicating that the economy will continue to slow, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 121.5 for the week ended July 2, down from 122.3 in the prior week. That was the lowest level since July 24, 2009 when it stood at 120.3. The index's annualized growth rate fell to -8.3 percent after a -7.6 percent growth rate a week earlier.

Monthly Trade Gap Is Biggest Since '08


The U.S. trade deficit hit its widest level in a year and a half, as increased imports from China more than offset growth in exports, an imbalance that is weighing on the tepid economic recovery.

The U.S. trade deficit, the difference between exports and imports, increased 4.8% to $42.3 billion in May, the Commerce Department said Tuesday. That was the widest since November 2008. April's trade gap was revised upward from earlier estimates.

U.S. exports grew 2.4% to a 20-month high of $152.3 billion. Imports grew faster, expanding 2.9% to $194.5 billion. The U.S. trade deficit with China expanded to $22.3 billion in May, the widest level since October and 15% larger than the previous month. Imports expanded by $3.1 billion, far outpacing a $162 million gain in exports.

Oil imports declined in the month, but that was more than offset by increased shipments of cars, computers and apparel. U.S. producers exported more cars, industrial machines and household goods.

The wider-than-anticipated trade deficit for May prompted several economists to downgrade their estimates for second-quarter economic growth. Economists at J.P. Morgan Chase & Co. lowered their forecast to 2.5% from 3.2%. St. Louis forecasters Macroeconomic Advisers lowered theirs by 0.8 percentage point to 2.4%.

Still, import growth is a sign of stronger demand from U.S. consumers and companies. If that demand holds up, it could translate to better economic growth down the line. "The demand is there, we just need to shift that demand to domestic producers," said Ben Herzon, senior economist at Macroeconomic Advisers.

Separately, the National Federation of Independent Business said its small business optimism index fell 3.2 points to a seasonally adjusted 89 in June. The index has gained ground since its recession low of 81 recorded in March 2009, but in the past several months has stalled around 90, still weak by historical standards.

Owners expect poorer business conditions and lackluster sales in the six months ahead. Amid the darker outlook, 9% said they had unfilled job openings, flat from May. A net 1% of respondents said they planned to hire over the next few months, also flat.

Another report Tuesday, from the Labor Department, showed there are scant jobs for the nation's 15 million unemployed. The Job Openings and Labor Turnover survey showed 4.67 unemployed people for each job opening in May, up slightly from a month earlier. The May reading was much better than May 2009, when there were 5.84 unemployed for each job, but was still indicative of a very weak job market.

With so many people vying for a small number of jobs, salaries remain tight for workers who are still employed. A Conference Board survey released Tuesday said U.S. companies expected to increase salaries moderately in 2011. The median U.S. salary budget increase is projected at 3% in 2011, the Conference Board said, from 2.5% the past two years.

25 Warning Signs of HARD Economic Times Ahead

Consumer confidence is plummeting, big banks are hoarding cash, top financial experts are issuing recession warnings and it seems like almost everyone is trying to accumulate as much gold as possible. Now that the G20 nations have all pledged to dramatically cut government spending in an effort to get debt under control, worries about a double-dip recession have reached a fever pitch.

Lorimer Wilson, editor of, provides below further reformatted and edited [..] excerpts from Michael T. Snyder’s ( original article* for the sake of clarity and brevity to ensure a fast and easy read. He goes on to say:

At times like these, it is hardly going out on a limb to say that we are headed for hard economic times. In fact, it seems like almost everyone in the financial world is either declaring that a recession is coming or is busy preparing for one. The truth is that bad economic signs are everywhere. The following are 25 such signs:

#1) The Conference Board’s Consumer Confidence Index declined sharply to 52.9 in June. Most economists had expected that the figure for June would be somewhere around 62. To get an idea of how bad this is, the index was at 100 back during the baseline year of 1985.

#2) Major banks are being instructed to hoard cash in preparation for the next financial crisis.

#3) French bank Societe Generale is forecasting that gold could reach $1,430 an ounce in the third quarter of this year due to fears of a double-dip recession.

#4) Paul Krugman of the New York Times declared in a recent column that we are about to enter “the third depression”.

#5) According to one recent poll, about eight out of every 10 Americans expect the Gulf of Mexico oil spill to damage the U.S. economy and drive up the cost of gas and food.

#6) Mark Zandi, chief economist of Moody’s Analytics, is not optimistic about the chances of avoiding another recession.

#7) The U.S. Department of Agriculture is forecasting that the number of Americans on food stamps will increase to 43 million in 2011.

#8) George Soros claims that a European recession in the coming months is “almost inevitable”.

#9) Kevin Giddis, the Managing Director of Fixed Income at Morgan Keegan, says that a lot of people are making some really large financial bets that a recession is on the way.

#10) The Center on Budget and Policy Priorities recently said that U.S. states in fiscal 2011 could be facing the worst budget situation that they have experienced since the economic downturn began in 2007.

#11) Federal Reserve Chairman Ben Bernanke is publicly saying that the U.S. unemployment rate is quite likely to remain “high for a while”.

#12) The National League of Cities is warning that large numbers of cities across the U.S. will be facing horrible economic conditions over the next couple of years.

#13) According to the Wall Street Journal, debates have already begun inside the Federal Reserve about what to do in the event of a “double-dip” recession.

#14) In May, sales of new homes in the United States dropped to the lowest level ever recorded. The truth is that the American people know economic hard times are coming and so they aren’t running out and buying expensive new homes that they can’t afford.

#15) Mike Whitney says that without more “stimulus” from the federal government a recession by the end of 2010 is extremely likely.

#16) One recent poll found that 76 percent of Americans believe that the U.S. economy is still in a recession.

#17) Richard Russell, the famous author of the Dow Theory Letters, is not mincing words about what he believes is headed our way….
“Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the stock market told him.”

#18) The Bank of International Settlements said in its annual report that major banks on both sides of the Atlantic Ocean continue to remain “highly leveraged and still appear to be on life support”.

#19) Mish Shedlock recently raised eyebrows by openly proclaiming that “an economic depression is here”.

#20) Bob Chapman of the International Forecaster is very pessimistic about the state of the world economy maintaining that “the US and UK will follow…and go down, perhaps before the end of the year.”

#21) An article on Bloomberg’s website says that 46 U.S. states are facing a “Greek style” financial crisis.

#22) Charles Cooper at Oriel Securities says that worries about the global economy right now are actually very good for the price of gold.

#23) Richard Suttmeier recently wrote an article for Forbes magazine in which he predicted that “home prices will decline again with risk of another 50% down to get house prices back to levels of 1999 / 2000.”

#24) University of Maryland professor Peter Morici is warning that the decision by European governments to slash their budgets makes the prospect of another recession much more likely.

#25) John P. Hussman, fund manager of Hussman Strategic Total Return and Hussman Strategic Growth, has issued a full-fledged recession warning: “Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.”

H-1 homeless camp being cleared again

State workers are again cleaning up a homeless campsite under the airport viaduct of the H-1 freeway near Nimitz Highway.

The cleanup near Keehi Lagoon began at 8:30 a.m. yesterday and is expected to last through tomorrow because of the tons of material at the homeless camp, said state Department of Transportation spokeswoman Tammy Mori.

About a month ago, state sheriffs warned the 30 to 40 people living there illegally that the area was being cleaned up, Mori said.

Last week, those who remained were given written eviction notices, she added.

No arrests were made yesterday, Mori said.

About 40 state workers and 40 inmates from the Oahu Community Correctional Center were involved in the cleanup, she said.

In January 2009 the state Transportation Department hauled away 108 truckloads of trash; 12 loads of metal; one load of batteries; 16 gallons of hazardous materials such as paint, propane and paint thinner; and 38 tires during an operation that took a week and a half.

The state even tried to keep out the illegal campers by unsuccessfully trying to fence off the area.

Two years earlier, police recovered in the area an abandoned car with several coils of copper wiring believed to have been stolen from Campbell High School's football field.

Another Gigantic Undersea Volcano Found Off Coast of Indonesia [IMAGE]

(July 12) -- U.S. and Indonesian researchers reported a startling discovery today: A volcano rising 10,000 feet from the ocean floor off the coast of Indonesia, far below the surface of the Pacific Ocean, according to The Associated Press.

Jim Holden, the chief U.S. scientist for the first leg of the joint expedition, told AP that the underwater volcano -- designated "Kawio Barat," for the region in which it was discovered -- is "taller than all but three or four mountains in Indonesia."

It's given height would also place it among the largest undersea, or "submarine," volcanoes yet discovered. (But because more are being mapped all the time, it is difficult to estimate with certainty which is presently the tallest. Last year, scientists discovered a 15,000-foot-tall one also off the coast of Indonesia, The Guardian reported.) It is not thought to be active.

The Kawio Barat was found by the crew of the Okeanos Explorer, "the only U.S. ship assigned to systematically explore our largely unknown ocean for the purpose of discovery and the advancement of knowledge." The crew used a multibeam sonar scanner and a remote-operated vehicle to snap precise, high-def images and video of the feature, explains the National Oceanic and Atmospheric Administration.

Check out the stunning images and video the crew captured, via NOAA.

Approximate location of the finding:

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Filed under: Science, Surge Desk

U.S. States Show First Tax Revenue Jump Since 2008, Report Says

July 13 (Bloomberg) -- California and New York helped push U.S. states’ tax revenue to the first quarterly gain since 2008, the Nelson A. Rockefeller Institute of Government said.

Overall tax receipts increased 2.5 percent to $164.5 billion during the January-to-March period, compared with the same three months in 2009, the Albany, New York-based institute said in a report today. It was the first year-over-year jump since the third quarter of 2008. Thirty-three states recorded a decline in collections, down from 40 states in the fourth quarter of 2009.

“Recent data show an unmistakable improvement in the economy and a slight firming in state tax-revenue collections,” wrote the co-authors of the report, Lucy Dadayan, a senior policy analyst, and senior fellow Donald Boyd.

Still, the growth in overall revenue is modest and “not an indication of broad state fiscal recovery,” the report said. States’ financial conditions remain “quite fragile” after record declines in 2009, Dadayan and Boyd wrote.

Personal-income and sales-tax increases in California, the most-populous state, and New York, the third-biggest, were the primary drivers of the gain and lifted net revenue by about $5.8 billion. Excluding those states, collections fell 1.5 percent.

Local tax collections declined 1.1 percent, hurt by a 1.7 percent drop in local property taxes, the first decrease since the start of the recession, and a 0.5 percent slump in local sales taxes. Local individual income taxes grew 5.1 percent, the first jump after five consecutive quarterly losses. Overall, personal-income-tax revenue increased by 2.5 percent and sales- tax revenue by 0.4 percent.

Still Lagging

State revenue trails pre-recession levels and fell 9.3 percent compared with the same period two years earlier. Preliminary data for April and May from 42 states signal the second quarter will be weaker than the first, with revenue rising by 0.9 percent, according to the institute.

“Even if overall economic conditions continue to improve throughout 2010, fiscal recovery for the states historically lags behind a national economic turnaround and can be expected to do so in the aftermath of the recent recession,” Dadayan and Boyd wrote. “Analyses of some of the numbers in terms of longer-term perspective indicate that states will face a long and bumpy road to fiscal recovery.”

--Editors: Mark Schoifet, Walid El-Gabry

The Attack of the Real Black Helicopter Gang: The IMF Is Coming for Your Social Security

(Image: Jared Rodriguez / t r u t h o u t;
Adapted: Lovecon, takomabibelot)

A few years back, there was a fear in some parts about black UN helicopters that were supposedly taking part in the planning of an invasion of the United States. While there was no foundation for this fear, there is basis for concern about the attack of another international organization, the International Monetary Fund (IMF).

Last week, the IMF told the United States that it needs to start getting its budget deficit down. It put cutting Social Security at the top of the steps that the country should take to achieve deficit reduction. This one is more than a bit outrageous for two reasons.

First, the IMF deserves a substantial share of the blame for the economic crisis that gave us big deficits in the first place. The IMF is supposed to oversee the operations of the international financial system. According to standard economic theory, capital is supposed to flow from rich countries like the United States to poor countries to finance their development. In other words, the United States should be having a trade surplus, which would correspond to the money that we are investing in poor countries to finance their development.

However, the IMF messed up its management of financial crises so badly in the last 15 years that poor countries decided that they had to accumulate huge amounts of currency reserves in order to avoid ever being forced to deal with the IMF. This meant that capital was flowing in huge amounts in the wrong direction. One result of this reverse flow was that the United States ran a huge trade deficit instead of a trade surplus.

The trade deficit in the United States was a big part of the story of the housing bubble. The trade deficit cost millions of workers their jobs. This was one of the main reasons that economy was so weak coming out of the 2001 recession. This weakness led the Fed to keep interest rates at 50-year lows, until the growth of the housing bubble eventually began to generate jobs in the fall of 2003.

The IMF both bears much of the blame for the imbalances in the world economy and then for failing to clearly sound the alarms about the dangers of the bubble. While the IMF has no problem warning about retired workers getting too much in Social Security benefits, it apparently could not find its voice when the issue was the junk securities from Goldman Sachs or Citigroup that helped to fuel the housing bubble.

The collapse of this bubble has not only sank the world economy, it also destroyed most of the savings of the near retirees for whom the IMF wants to cut Social Security. The vast majority of middle-income retirees have most of their wealth in their home equity. This home equity largely disappeared when the bubble burst. Maybe the IMF doesn't have access to house price series and data on wealth, because if they did, it's hard to believe that they would advocate further harm to some of the main victims of their policy failure.

The other reason that the IMF's call for cutting Social Security benefits is infuriating is the incredible hypocrisy involved. The average Social Security benefit is just under $1,200 a month. No one can collect benefits until they reach the age of 62. By contrast, many IMF economists first qualify for benefits in their early 50s. They can begin drawing pensions at age 51 or 52 of more than $100,000 a year.

This means that we have IMF economists, who failed disastrously at their jobs, who can draw six-figure pensions at age 52, telling ordinary workers that they have to take a cut in their $14,000 a year Social Security benefits that they can't start getting until age 62. Now that is real black helicopter material.

Dr. Dean Baker is a macroeconomist and Co-Director of the Center for Economic and Policy Research in Washington, D.C. He previously worked as a senior economist at the Economic Policy Institute and an assistant (more...)

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

Suffer These Crimes in Oakland? Don't Call the Cops

Dozens of layoffs effective at midnight, barring last minute deal

Oakland's police chief is making some dire claims about what his force will and will not respond to if layoffs go as planned.

Chief Anthony Batts listed exactly 44 situations that his officers will no longer respond to and they include grand theft, burglary, car wrecks, identity theft and vandalism. He says if you live and Oakland and one of the above happens to you, you need to let police know on-line.

Some 80 officers were to be let go at midnight last night if a last-minute deal was not reached. That's about ten percent of the work force.

"I came her e to build an organization, not downsize one," said Batts, who was given the top job in October.

That deadline has been extended to 5 p.m. Tuesday.

Here's a partial list:

  • burglary
  • theft
  • embezzlement
  • grand theft
  • grand theft:dog
  • identity theft
  • false information to peace officer
  • required to register as sex or arson offender
  • dump waste or offensive matter
  • discard appliance with lock
  • loud music
  • possess forged notes
  • pass fictitious check
  • obtain money by false voucher
  • fraudulent use of access cards
  • stolen license plate
  • embezzlement by an employee (over $ 400)
  • extortion
  • attempted extortion
  • false personification of other
  • injure telephone/ power line
  • interfere with power line
  • unauthorized cable tv connection
  • vandalism
  • administer/expose poison to another's

Negotiations are going on at Oakland City Hall in the mayor's office.

Batts said the 80 officers slated to be laid off - mostly new officers - are "pretty sad and pretty depressed," and those feelings are shared by the Police Department as a whole.

The Oakland City Council voted June 25 to eliminate the positions to help close the city's $32.5 million funding gap. According to the city of Oakland, each of the 776 police officers currently employed at OPD costs around $188,000 per year. Most of the officers who will be affected by the layoffs were on the streets of Oakland when Johannes Mehserle's involuntary manslaughter conviction caused riots last Thursday.

The sticking point in negotiations appears to be job security. The city council asked OPD officers to pay nine percent of their salary toward their pensions, which would save the city about $7.8 million toward a multi-million dollar deficit. The police union agreed, as long as the city could promise no layoffs for three years. No dice, says city council president Jane Brunner.

"We wish we could offer them a three-year no layoff protection we just can't financially. It would be irresponsible of us," Brunner said. The city agreed to a one-year moratorium on layoffs, but it is not enough for the union.

The problem is money. In the last five years, the police budget -- along with the fire department budget -- have amount to 75 percent of the general fund. After years of largely sparing those departments the budget ax, now it appears there are few other places to cut.

These are the last hours of negotiation and Brunner is hopeful that the city and police will find some sort middle ground.

"It's been very good conversation and not a whole lot of grandstanding." Brunner said. "There's actually real conversations. Each side understands the problem," she said.

Vitamin D promotes memory and cognitive function in seniors

(NaturalNews) A lack of vitamin D has already been linked in several studies to depression. Now it appears a deficiency of this crucial nutrient could also play a role in robbing the brain of the ability to process information correctly and clearly.

Defined as a person's ability to process thoughts, cognitive function includes memory and the ability to learn new information, as well as speaking and reading comprehension. Aging is known to affect cognitive function in many people, resulting in memory loss and difficulty thinking of the right words while speaking or writing. But what if a lack of vitamin D could be the culprit that is causing or contributing to cognitive impairment in many elders -- and not simply aging by itself? If that's the case, it offers hope that adequate vitamin D could help keep minds agile and memory sharp.

Research headed by epidemiologist Katherine Tucker with the Jean Mayer USDA Human Nutrition Research Center on Aging (HNRCA) at Tufts University in Boston, Massachusetts, and published in Journals of Gerontology raises that possibility. Metabolic pathways for vitamin D have been found in the hippocampus and cerebellum -- areas of the brain involved in planning, processing, and forming new memories. So it appears a lack of vitamin D could disrupt these cognitive processes.

Dr. Tucker and her colleagues studied more than 1,000 elders receiving home care. The research team investigated associations between measured levels of vitamin D in the blood of these people, who were all between the ages of 65 and 99, and compared them to results of neuropsychological tests. The participants were then grouped by their vitamin D status, which was categorized as deficient, insufficient, or sufficient.

The researchers noted in a statement to the media that older people needing home care have an elevated risk of not getting enough vitamin D because of their exposure to sunlight is often limited. And, in fact, only 35 percent of the research subjects had sufficient vitamin D levels in their blood for health. Those elders who did have adequate vitamin D scored far better on cognitive tests than those in the deficient and insufficient vitamin D categories, particularly on measures of executive performance, which included cognitive flexibility, perceptual complexity, and reasoning. The associations persisted after taking into consideration other variables that could also have influenced performance on the cognitive ability tests.

Another new study just presented at the Endocrine Society's 92nd Annual Meeting held in San Diego provides more disturbing evidence that older adults commonly have low vitamin D levels. Researchers from the VU University Medical Center in Amsterdam investigated approximately 1,300 Dutch men and women age 65 and older and found almost 50 percent were deficit in vitamin D.

Pharmacists give themselves cancer from dispensing toxic chemotherapy chemicals

(NaturalNews) One of the side effects of chemotherapy is, ironically, cancer. The cancer doctors don't say much about it, but it's printed right on the chemo drug warning labels (in small print, of course). If you go into a cancer treatment clinic with one type of cancer, and you allow yourself to be injected with chemotherapy chemicals, you will often develop a second type of cancer as a result. Your oncologist will often claim to have successfully treated your first cancer even while you develop a second or third cancer directly caused by the chemo used to treat the original cancer.

There's nothing like cancer-causing chemotherapy to boost repeat business, huh?

During all this, the pharmacists are peddling these toxic chemotherapy chemicals to their customers as if they were medicine (which they aren't). While preparing these toxic chemical prescriptions, it turns out that pharmacists are exposing themselves to cancer-causing chemotherapy agents in the process. And because of that, pharmacists are giving themselves cancer... and they're dying from it.

Why pharmacists are dying of cancer

People who live in glass houses should never throw stones, they say. And you might similarly say that pharmacists who deal in poison shouldn't be surprised to one day discover they are killing themselves with it.

Chemotherapy drugs are extremely toxic to the human body, and they are readily absorbed through the skin. The very idea that they are even used in modern medicine is almost laughable if it weren't so downright disturbing and sad that hundreds of thousands of people are killed each year around the world by chemotherapy drugs.

Now you can add pharmacists to that statistic. For decades, they simply looked the other way, pretending they were playing a valuable role in our system of "modern" medicine, not admitting they were actually doling out chemicals that killed people. Now, the sobering truth has struck them hard: They are in the business of death, and it is killing them off, one by one.

The Seattle Times now reports the story of Sue Crump, a veteran pharmacist of two decades who spent much of her time dispensing chemotherapy drugs. Sue died last September of pancreatic cancer, and one of her dying wishes was that the truth would be told about how her on-the-job exposure to chemotherapy chemicals contributed to her own cancer.

Secondhand chemo

The Occupational Safety and Health Association (OSHA), it turns out, does not regulate workplace exposure to toxic, cancer-causing chemotherapy chemicals. At first glance, that seems surprising, since OSHA regulates workplace exposure to far less harmful chemicals. Why not chemo?

The answer is because the toxicity of chemotherapy has long been ignored by virtually everyone in medicine and the federal government. It has always been assumed harmless or even "safe" just because it's used as a kind of far-fetched "medicine" to treat cancer. This, despite the fact that chemotherapy is a derivative of the mustard gas used against enemy soldiers in World War I. Truthfully, chemotherapy has more in common with chemicals weapons than any legitimate medicine.

So today, while workers are protected from secondhand smoke in offices across the country, pharmacists are still being exposed every single day to toxic, cancer-causing chemicals that OSHA seems to just ignore. The agency has only issued one citation in the last decade to a hospital for inadequate safety handling of toxic chemotherapy drugs.

As the Seattle Times reports, "A just-completed study from the U.S. Centers for Disease Control (CDC) -- 10 years in the making and the largest to date -- confirms that chemo continues to contaminate the work spaces where it's used and in some cases is still being found in the urine of those who handle it..."

That same article goes on to report more pharmacists, veterinarians and nurses who are dead or dying from chemotherapy exposure:

• Bruce Harrison of St. Louis (cancer in his 50's, now dead)
• Karen Lewis of Baltimore (cancer in her 50's, still living)
• Brett Cordes of Scottsdale, Arizona (cancer at age 35, still living)
• Sally Giles of Vancouver, B.C. (cancer in her 40's, now dead)

The great contradiction in cancer treatments

As the Seattle Times reports:

"Danish epidemiologists used cancer-registry data from the 1940s through the late 1980s to first report a significantly increased risk of leukemia among oncology nurses and, later, physicians. Last year, another Danish study of more than 92,000 nurses found an elevated risk for breast, thyroid, nervous-system and brain cancers."

The story goes on to report how new safety rules are being put in place across the industry to protect pharmacists, veterinarians, nurses and doctors from toxic chemotherapy chemicals. But even the Seattle Times, which deserves credit for running this story, misses the bigger point:

If these chemicals are so dangerous to the doctors, nurses and pharmacists dispensing them, how can they be considered "safe enough" to inject into patients who are already dying from cancer?

It's a serious question. After all, if nurses can become violently ill after merely spilling chemotherapy chemicals on themselves (it's true), then what effect do you suppose these chemicals have when injected into patients?

The cancer industry, though, has never stopped injecting patients long enough to ask the commonsense question: Why are we in the business of dispensing poison in the first place? Poison, after all, isn't medicine. Not when dispensed in its full potency, anyway.

The whole idea of "safety" in the cancer industry is to find new ways to protect the health care workers from the extremely dangerous chemicals they're still injecting into the bodies of patients. Something is clearly wrong with this picture... if health care workers need to be protected from this stuff, why not protect the patients from it, too?

Nobody ever died from handling herbs

In contrast to all this, consider the truthful observation that no naturopath ever died from handling medicinal herb, homeopathy remedies or nutritional supplements. These natural therapies are good for patients, and as a bonus, you don't have to wear a chemical suit to handle them.

Furthermore, medicinal herbs, supplements and natural remedies don't cause cancer. They support and protect the immune system rather than destroying it. So they make patients healthier and more resilient rather than weaker and fragile.

But herbs, supplements and natural remedies don't earn much money for the cancer industry. Only the highly-toxic patented chemotherapy drugs bring in the big bucks. So that's what they deal in -- poison for the patients. And when you deal in poison, some of it always splashes back onto you.

Chemotherapy doesn't work

Beyond this whole issue of pharmacists and health care workers dying from exposure to secondhand chemotherapy, there's the issue of whether chemotherapy actually works in the first place. Scientifically speaking, if you take a good, hard look at what the published studies actually say, chemotherapy is only effective at treating less than two percent of the cancers that exist. And that two percent does not include breast cancer or prostate cancer.

Yet chemotherapy is routinely used to "treat" breast cancer even though it offers no benefit to breast cancer patients. In effect, the cancer industry is engaged in a criminal treatment hoax that promises to make you healthier but actually gives you even more cancer -- which is great for repeat business, but terrible for the cancer patients who suffer under it.

The level of quackery at work right now in the cancer industry is simply astonishing. You would think that if doctors and pharmacists were dishing out these chemicals to patients, they would make sure there was some sort of legitimate science to back them up. But they haven't. The science doesn't exist. Chemotherapy doesn't work at anything other than causing cancer -- and it accomplishes that indiscriminately, damaging any person it comes into contact with. Merely touching chemotherapy chemicals is dangerous for your health.

So if you're considering chemotherapy for yourself, think about this long and hard: If chemotherapy is so dangerous that it's giving the pharmacists cancer just from touching it, why on earth would you want to inject it into your body?

This is not an idle question. It is perhaps the most important question of all for someone considering conventional cancer treatment using chemotherapy. The question is essentially this: If chemotherapy causes cancer, how can it treat cancer?

Treating cancer with chemotherapy is like treating alcoholism with vodka. It's like treating heart disease with cheese, or like treating diabetes with high-fructose corn syrup. Cancer cannot be cured by the very thing that causes it.

And to those who deal in poison, watch out for the cause-and-effect laws of biology. If you deal in chemotherapy chemicals, don't be surprised if you get cancer one day. If you deal in chemical pesticides, don't be surprised if you get Alzheimer's. If you're a dentist installing mercury fillings in the mouths of clients, don't be surprised if one day you just go stark raving mad (because mercury causes insanity, and dentists breathe in mercury vapor thrown into the air from their drills).

If you work around chemicals, they will eventually impact your health, and never in a good way. There's a karmic element in all this, too: If you spend your life dishing out chemotherapy drugs as a pharmacist, you have a lot to answer for. You have been an enabler of a very real chemical holocaust against the people. Don't be surprised if that holocaust turns against you one day. Karma tends to work that way. Cause and effect is a universal law that cannot be escaped.

And if you're a cancer patient, I urge you to think twice about the toxicity of anything you might allow in your body. If you are trying to HEAL your body, why would you allow yourself to be poisoned with a chemical that causes cancer?

Don't let some cancer doctor talk you into chemotherapy using his fear tactics. They're good at that. So next time he insists that you take some chemotherapy, ask him to drink some first. If your oncologist isn't willing to drink chemotherapy in front of you to prove it's safe, why on earth would you agree to have it injected in your body?

Be sure to see my related CounterThink cartoon: "Chemotherapy Stickup" at:

See all CounterThink cartoons at

Sources for this story include:
Investigate West

Seattle Times