The Obfuscation Report

Income-Inequality Gap Widens

The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.

The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.

The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.

The IRS data, based on a large sample of tax returns, are for "adjusted gross income," which is income after some deductions, such as for alimony and contributions to individual retirement accounts. While dated, many scholars prefer it to timelier data from other agencies because it provides details of the very richest -- for example, the top 0.1% and the top 1%, not just the top 10% -- and includes capital gains, an important, though volatile, source of income for the affluent.

The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.

Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to "superstar" performers whether in business, sports or entertainment.

In an interview yesterday with The Wall Street Journal, President Bush said, "First of all, our society has had income inequality for a long time. Secondly, skills gaps yield income gaps. And what needs to be done about the inequality of income is to make sure people have got good education, starting with young kids. That's why No Child Left Behind is such an important component of making sure that America is competitive in the 21st century." (See article.)

Jason Furman, a scholar at the Brookings Institution and an adviser to Democratic politicians, said: "We've had a 30-year trend of increasing inequality. There was an artificial reduction in that trend following the bursting of the stock-market bubble in 2000."

The IRS data don't identify the source of increased income for the affluent, but the boom on Wall Street has likely played a part, just as the last stock boom fueled the late-1990s surge. Until this summer, soaring stock prices and buoyant credit markets had produced spectacular payouts for private-equity and hedge-fund managers, and investment bankers.

One study by University of Chicago academics Steven Kaplan and Joshua Rauh concludes that in 2004 there were more than twice as many such Wall Street professionals in the top 0.5% of all earners as there are executives from nonfinancial companies.

Mr. Rauh said "it's hard to escape the notion" that the rising share of income going to the very richest is, in part, "a Wall Street, financial industry-based story." The study shows that the highest-earning hedge-fund manager earned double in 2005 what the top earner made in 2003, and top 25 hedge-fund managers earned more in 2004 than the chief executives of all the companies in the Standard & Poor's 500-stock index, combined. It also shows profits per equity partner at the top 100 law firms doubling between 1994 and 2004, to over $1 million in 2004 dollars.

The data highlight the political challenge facing Mr. Bush and the Republican contenders for president. They have sought to play up the strength of the economy since 2003 and low unemployment, and the role of Mr. Bush's tax cuts in both. But many Americans think the economy is in or near a recession. The IRS data show that the median tax filer's income -- half earn less than the median, half earn more -- fell 2% between 2000 and 2005 when adjusted for inflation, to $30,881. At the same time, the income level for the tax filer just inside the top 1% grew 3%, to $364,657.

Democrats, on the other hand, have sought to exploit angst about stagnant middle-class wages and eroding benefits in showdowns with Mr. Bush over issues such as health insurance and trade.

E-mail Reveals That McConnell Staffer Propagated Smear Campaign Against Graeme Frost

Yesterday, ThinkProgress reported that there was mounting evidence that a staffer for Senate Minority Leader Mitch McConnell (R-KY) may have been involved in the right-wing campaign to smear Graeme Frost and his family.

ABC News reported earlier in the week that an e-mail sent to reporters by “a Senate Republican leadership aide” in McConnell’s office suggested that “GOP aides were complicit in spreading disparaging information about the Frosts.” A McConnell spokesman refused to deny the office’s involvement in the affair.

ThinkProgress has obtained an email that congressional sources tell us was sent to reporters by Sen. McConnell’s communications director Don Stewart.

On Monday morning, Don Stewart sent an email with the following text to reporters:

Seen the latest blogswarm? Apparently, there’s more to the story on the kid (Graeme Frost) that did the Dems’ radio response on SCHIP. Bloggers have done a little digging and turned up that the Dad owns his own business (and the building it’s in), seems to have some commercial rental income and Graeme and a sister go to a private school that, according to its website, costs about $20k a year ‹for each kid‹ despite the news profiles reporting a family income of only $45k for the Frosts. Could the Dems really have done that bad of a job vetting this family?

In the email, Stewart attacks Democrats for allegedly doing a bad job “vetting this family.” That effort to blame Democrats for the smear campaign seems to have swayed some reporters, as CNN this morning claimed that the real story is that “the Democrats didn’t do as much of a vetting as they could have done.”

The New York Times reported yesterday that “an aide” to Sen. McConnell “expressed relief that his office had not issued a press release criticizing the Frosts.” No, what the McConnell staffer did was worse — he used the power and privilege of the Senate office to secretly propagate a baseless smear campaign against a 12-year old boy and his family simply because they disagreed on policy.

UPDATE: Yesterday, right-wing pundit Michelle Malkin took us to task for suggesting McConnell’s office was involved:

Snort-worthy conspiracy theory of the day…The tinfoil hatters at ThinkProgress actually believes conservative bloggers were in cahoots with Mitch McConnell, whom I lambasted below. The unreality-based community really does live in a different galaxy.

We await her response.

UPDATE II: Malkin responds. Unsurprisingly, the McConnell staffer doesn’t meet Malkin’s standard of being “involved” in the campaign.

"The skirmishes in the occupied land are part of a war of destiny. The outcome of hundreds of years of war will be defined in Palestinian land. As the Imam said, Israel must be wiped off the map." - Iranian President Mahmoud Ahmadinejad

"We should all be Christians. We just want Jews Perfected. - Ann Coulter.

"I was going to have a few comments on the other Democratic presidential candidate John Edwards, but it turns out you have to go into rehab if you use the word "faggot", so I — so kind of an impasse, can't really talk about Edwards."

• Speech at the annual Conservative Political Action Conference, Washington, DC, March 2, 2007

"In Iran we don't have homosexuals like in your country."

- Mahmoud Ahmadinejad

On resettling the Jews from Israel to Canada or Alaska:
"...you cannot tolerate the presence of Zionists in Europe but want to inflict them on the people of our region? You have so much land in your possession. This vast land of Canada and Alaska can be used to resettle the Jews. Save yourselves."

Mahmoud Ahmadinejad (Al-Quds Day speech)

Canadians] better hope the United States does not roll over one night and crush them. They are lucky we allow them to exist on the same continent.

• Ann Coulter on Fox News; Hannity & Colmes, November 30, 2004

"Are they human beings?... They (Zionists) are a group of blood-thirsty savages putting all other criminals to shame."

- Mahmoud Ahmadinejad (as quoted by Iranian TV)

When we were fighting communism, OK, they had mass murderers and gulags, but they were white men and they were sane. Now we're up against absolutely insane savages.

• Anne Coulter August 16, 2004

We are confident that the Islamic logic, culture, and discourse can prove their superiority in all fields over all schools of thought and theories.

- Mahmoud Ahmadinejad

Liberals creation myth is Charles Darwin's theory of evolution, which is about one notch above Scientology in scientific rigor. It's a make-believe story, based on a theory that is a tautology, with no proof in the scientist's laboratory or the fossil record - and that's after 150 years of very determined looking. We wouldn't still be talking about it but for the fact that liberals think evolution disproves God.

– Ann Coulter

Western media only intensified the climate of fear and insecurity.

- Mahmoud Ahmadinejad

Would that it were so! ... That the American military were targeting journalists.

• Ann Coulter CNBC; Kudlow & Cramer; February 7, 2005

We thank God that our enemies are idiots. (6 February 2006) [14]

- Mahmoud Ahmadinejad

If liberals are not traitors, their only fallback argument at this point is that they’re really stupid.”

– Ann Coulter

Rush’s listeners flood VoteVets with hate mail.

In the past two weeks, as the controversy over Rush Limbaugh’s “phony soldiers” comments unfolded, VoteVets.org has been at the forefront of pushing to hold Limbaugh accountable for disparaging pro-withdrawal soldiers. On MSNBC’s Countdown last Friday, VoteVets.org Vice President Brandon Friedman read aloud some of the hate mail the organization has received from Limbaugh’s listeners:

- “Do us all a favor and shoot yourself. You are a waste of human flesh.”

- “Tell the truth about Rush. You phony piece of [expletive].”

- “You traitorous bunch of [expletive] cowards.”

- “Rush Limbaugh is a great American, and you are a phony.”

Watch it:

Friedman has posted more hate mail from Rush’s listeners here.

Hale "Bonddad" Stewart
Posted October 11, 2007

From Time:

It turns out, however, that not everything about the Frosts' life pops up on a Google search. While Graeme does attend a private school, he does so on scholarship. Halsey Frost is a self-employed woodworker; he and his wife say they earn between $45,000 and $50,000 a year to provide for their family of six. Their 1936 rowhouse was purchased in 1990 for $55,000. It was vacant and in a run-down neighborhood that has improved since then, in part because of people like themselves who took a chance. It is now assessed at $263,140, though under state law the value of that asset is not taken into account in determining their eligibility for SCHIP. And while they are still uninsured, they claim it is most certainly not by choice. Bonnie Frost says the last time she priced health coverage, she learned it would cost them $1,200 a month.

The above snippet from Time perfectly illustrate why single-payer health care is really the answer to the health care problem in the US.

1.) Notice the Frost's already priced insurance. At $1200/month, the Frosts would be looking at $14,000/year in payments. That's 32% of their income. That assumes those are all the medical costs the Frosts would pay which simply isn't true. My guess is the $1200/month policy would have some type of deductible, co-pay structure etc.... Considering the Frosts overall situation of two children needing expensive medical care, medical costs could easily become 40%-50% of their annual expenses.

2.) Malkin has argued that assets should be included in the eligibility computation for SCHIP. This is a really stupid idea. According to the article, the Frost's home is $263,000. According to Malkini's argument, the Frosts should either take out a home loan (home equity loan) or sell their home. If the Frost's sell their home, they will take out their equity (assuming they have some). But they'll eventually spend that. In addition, this assumes the Frosts can sell their home right now -- in the worst housing market in the last 20 years. In other words, this argument makes a lot of assumptions that probably won't play out in reality. When they're done spending the loan proceeds, they'll be poorer. In taking out a home equity loan, the Frost's are simply delaying he inevitable -- bankruptcy. The Frosts would then have a note which would provide a drain on their finances until the loan proceeds ran out. At that time, the Frosts would have an additional payment in their monthly nut in addition to medical costs. I'm not sure if Malkin realizes the debt issue in America, but it is pretty severe. For example, foreclosures doubled this month.

Here's the basic problem. The Frosts aren't rich and they have children. That means medical expenses are their biggest problem. Under the Malkin theory, either poor people shouldn't have children because insurance is too expensive, or the poor should go into debt to pay for insurance which under the new bankruptcy laws is tantamount to indentured servitude.

Anyway -- now that I've weighed in on the Frost debate, I want to bring back the central arguments I have always made (and will continue to make) about single-payer health care.

While I will almost always advocate for a market based economic approach to allocating resources, health care is not an area where the profit motive should dominate decision making. Simply put, the end product is a patient's health. Private health insurance has a conflict of interest between the insurance company and the insured which will be resolved in favor of the insurance company a majority of the time.

Let me paint a hypothetical picture to illustrate this point. Insured makes a claim with the insurance company, which is a publicly traded company. Because the insurance company is publicly traded they must turn a profit and increase their profits to maintain their share price. In order to make a profit they have every incentive to either

1. Deny the insured's claim, or
2. Delay payment to increase the possibility the insured will drop his claim

There are numerous stories about an insured making a routine claim only to be inundated with paperwork, or being told the policy doesn't cover that procedure, or being told the insurance company has to look into the claim to see if the insurance company can make a payment. In any of these situations the central idea of insurance -- to provide some safety for the insured at a specific cost -- is compromised.

In addition, insurance companies will seek to minimize the amount of money they would have to pay to the insured. Again, remember the product here is the patient's health. Supposed the insured has a disease where the cure is expensive but a cheaper alternative exists. However, the cheaper alternative would moderately or seriously compromise the insured's quality of life. Because the insurance company is profit-driven, it will probably opt for the cheaper treatment that compromises the insured's quality of life.

Here is what the Frost's ran into in the private health care market:

In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions. "We stood up in the first place because S-chip really helped our family and we wanted to help other families," Mrs. Frost said.

The profit motive worked to the Frost's extreme disadvantage. Because covering the Frost's was expensive, the insurance companies simply denied them coverage.

Secondly, private health care is more expensive the public health care. Here are three charts compiled from the Organization for Economic Cooperation and Development. The figures are from 2004.

First, the US spends the least amount of public money on health care.

However, the US spends the most on health care as a percentage of GDP

and on a per capita basis.

Notice the partially inverse relationship between public expenditures and total amount spent on health care. In short, publicly available health care is cheaper.

Finally there is the issue of competitiveness. I'll let General Motors of Canada make the argument for me.

"The Canadian plan has been a significant advantage for investing in Canada," says GM Canada spokesman David Patterson, noting that in the United States, GM spends $1,400 per car on health benefits. Indeed, with the provinces sharing 75 percent of the cost of Canadian healthcare, it's no surprise that GM, Ford and Chrysler have all been shifting car production across the border at such a rate that the name "Motor City" should belong to Windsor, not Detroit.

Just two years ago, GM Canada's CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada's 35-year-old national health program that said, "The public healthcare system significantly reduces total labour costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers." That letter also said it was "vitally important that the publicly funded healthcare system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration," and went on to call not just for preservation but for an "updated range of services." CEOs of the Canadian units of Ford and DaimlerChrysler wrote similar encomiums endorsing the national health system.

Health care costs are killing American business. Our international competitors don't have to deal with these costs. As a result, private health care is making US business less competitive.

So, public health eliminates a conflict of interest that compromises individual health, is cheaper and makes the US more competitive. And we don't have a public health system because?

Digby makes the point far more eloquently than I:

Setting aside the total dishonesty of that --- surely Steyn has been informed by now that the Frost kids go to private school on scholarship and the house was bought for 55,000 in 1990 --- what has become crystal clear in this debate is one that I think needs to be discussed. The Republicans believe that people should be completely destitute, living in a one room shack and working two jobs before they "deserve" subsidized health insurance. The middle class who are one car accident or one cancer diagnosis away from losing their jobs, being unable to afford either the cadillac COBRA plans from their employers (my last one here in California was $1700.00 a month and I'm healthy) must not be allowed to keep ANY assets.They must be, as Steyn's pal wrote, "dying on the streets with sores on their bodies" before they qualify for aid.

.....

If the free-wheeling capitalists of the right wing believe that you can keep an economy dynamic, growing and flexible in a twisted system like this, they are even more blindly ideological than I thought. This is not just a moral crisis, it's an economic crisis and if these people are determined to continue down this path then I suggest the rest of us start buying land in Costa Rica because this country is going to fail. Hugely. The numbers do not add up.

Labels: Anybody Seen Sicko?

John Cusack
Posted October 10, 2007
The Real Blackwater Scandal: Build a Frontier, You Get Cowboys, Part II

Read Part I of this conversation here.

For the past couple of weeks, I've been posting pieces of my ongoing conversation with Naomi Klein, about her new book, The Shock Doctrine: The Rise of Disaster Capitalism. You can watch our first encounter here, and read our earlier conversations here and here. You can also learn more about the book and read excerpts here.

Yesterday we talked about the Blackwater scandal, setting it in the larger context of what Naomi calls the new economy of the Disaster Capitalism Complex. We also talked about cowboys, frontiers and the perennial power of John Wayne. Here's the rest of that discussion:

Cusack: So apart from getting obscenely rich, what are these private security and other contractor companies doing with this tsunami of public money that is being thrown at them?

Klein: Well, unlike the government, which has allowed the public infrastructure to erode so that we now have collapsing bridges and levees, these guys are making serious and sturdy capital investments. They're planning for the future, building infrastructure -- in Blackwater's case, paramilitary infrastructure. Founded in 1996, the company has used the steady stream of contracts during the Bush years to build up a private army of twenty thousand on-call mercenary soldiers and a massive military base in North Carolina worth between $40 and $50 million. They have armored vehicles, helicopter gunships, manmade lakes, a Boeing 767, a Zeppelin.

Cusack: Like the Hindenburg -- Eric Prince has a lot of toys. The Zeppelin -- that one had to be the fulfillment of a boyhood dream.

Klein: You hear people complain about how Hezbollah is a "state-within-a-state" in Lebanon -- what about Blackwater in the USA? And that's just one company of hundreds, and a relatively small player compared to Lockheed and GE and Booz Allen. But once again, we can't keep being surprised by this shadow world -- it is an inevitable consequence of Rumsfeld's vision of an outsourced and contracted-out state. A right-wing journal in the U.S. called Blackwater "al Qaeda for the good guys" and it's a striking analogy. Wherever the disaster capitalism complex has landed, it has produced a proliferation of armed groupings outside the state. No surprise, really -- when countries are rebuilt by people who don't believe in government, the states they build are invariably weak, creating a market for alternative security forces, whether Hezbollah, Blackwater, the Mahdi Army or the gang down the street in New Orleans.

Cusack: You've written a lot about what you call "the moveable green zone", which has extended the reach of these companies way beyond the war...

Klein: Well the first place where we all saw this happen was in New Orleans after the flood. Within weeks, the Gulf Coast became a domestic laboratory for the same kind of government-run-by-contractors that was pioneered in Iraq. And the whole Green Zone gang was there: Halliburton, Blackwater, Parsons, Fluor, Shaw, Bechtel, CH2M Hill.

But again, this is way more than just a story about shoddy work by contractors. These private companies were actually taking over state functions instead of rebuilding the public sphere. And in New Orleans, the supreme irony was that it was the very frail public sphere that caused the disaster in the first place when the levees broke and the public transit system couldn't handle the evacuation and FEMA was nowhere to be found.

This is the opposite of the New Deal, when public works created good jobs and strengthened society. In today's disasters, public money floods into corporate coffers and those corporations replace the public sphere. Look at New Orleans today: public schools have been converted into charter schools, public housing remains boarded up as condo developers circle, the levee system remains inadequate, and the city's largest public hospital -- Charity Hospital -- is still closed. Meanwhile, contractors are driving down wages and working conditions, with African-Americans virtually locked out of reconstruction jobs, and migrant Latino workers locked in, telling horror stories of modern day indentured servitude. This is what I mean when I say that disasters are dress rehearsals for a sci-fi vision of corporate rule -- it's not just that disaster response is being privatized, it's that in places like Baghdad and New Orleans, the public sphere is disappearing completely and there is no plan to bring it back. This is the warfare state you send up so brilliantly in War Inc [see the trailer here and a preview clip here] -- with the same company selling the bombs and the prosthetic limbs for the victims of those bombs. It's crazy, but we are really not that far off from your twisted imagination!

Cusack: Some things are so vicious, you have to look at them through a different lens or you could never get out of bed. It's hard, even in absurdist satire, to stay one step ahead of this crew. Of course, the business will keep coming for these companies. Even if a momentary peace breaks out, natural disasters will ensure that the market will expand for the Disaster Capitalism Complex as a whole. They'll just diversify. A perfect flexibility built into the design.

Klein: Put it this way: after the recent earthquake in Peru, a private U.S. company called Aramark got a contract to manage evacuee camps and they had mini-McDonald's franchises in them.

That was a first -- McRelief.

Cusack: It fills one with pride.

Klein: It's time to face the fact that climate change has created a major new market. And I'm not talking about a new market for sustainable energy, which would be positive, but a market to profit from the disasters caused in large part by our fossil fuel addiction. Responding to the increasing numbers of emergencies is seen as simply too hot an emerging market to be left to the non-profits -- why should UNICEF rebuild schools when Bechtel can do it? Why put displaced people from Mississippi in subsidized empty apartments when they can be housed on Carnival cruise ships? Why deploy a major international peacekeeping force to Darfur when Blackwater has been lobbying for months to go in and get the job done? Why let the CIA read our email when there are hundreds of security "start ups" that want the gig?

This is a transformation of profound consequence. Eisenhower warned of the military-industrial complex, but it was economically insignificant compared to today's disaster capitalism complex. Before 2001, wars and disasters only provided opportunities for a narrow sector of the economy -- the makers of fighter jets, for instance, or the construction companies that rebuilt bombed-out bridges. The primary economic role of wars was as a means to open new markets that had been sealed off and to generate postwar peacetime booms. Now wars and disaster responses are so fully privatized that they are themselves the new market; there is no need to wait until after the war for the boom -- the medium is the message.

And the scariest part of it is the disappearance of any line whatsoever between these private players and the government, as we discussed earlier.

Cusack: Right, you have a quote in the book: "It's impossible to tell where the government ends and Lockheed begins." And the most unbelievable thing about it besides the carnage and the hubris and the insanity of it all is how blatantly they lie about their dedication to strict economic Darwinist rules. It's the mother of all con jobs -- free market rhetoric is being used as the cover story for crony capitalism... They are the biggest welfare freaks on the planet.

On Democracy Now recently, you recited Alan Greenspan's definition of crony capitalism to his face and asked him if the U.S. fits the bill:

"When a government's leaders or businesses routinely seek out private-sector individuals or businesses, and, in exchange for political support, bestow favors on them, the society is said to be in the grip of 'crony capitalism'. The favors generally take the form of monopoly access to certain markets, preferred access to sales of government assets, and special access to those in power."

He dodged the question, of course, but that seems to be a precise description of the Bush administration and its relationship to its favorite corporations. Not exactly the free-market propaganda they've been selling around the world, is it?

Klein: No, and it's most outrageous in Iraq. When I was in Baghdad, it was clear that this was one of the things that most enraged Iraqis -- watching the non-stop conveyor belt of corporate welfare going to western companies while having to listen to patronizing lectures about the free market. My favorite was from Michael Fleischer -- former White House press secretary Ari Fleischer's brother. In the kind of nepotism rampant in the Green Zone, Michael was put in charge of Iraq's "private sector development" during the first year of the occupation. At one point he told a group of Iraqi business leaders that they would have to lose all their subsidies and trade protections because "protected businesses never, never become competitive."

Cusack: He said this with a straight face?

Klein: Yes -- he seemed entirely unconcerned by the irony that Halliburton, Bechtel, Parsons, KPMG, Blackwater et al were in Iraq, madly gorging off this vast protectionist racket in which the U.S. government had created their markets with war, barred their competitors from even entering the race (remember, French companies weren't invited...), then paid them to do the work on "cost-plus" contracts, which guaranteed them profits -- all at taxpayer expense.

In fact, the Disaster Capitalism industry has been built almost exclusively with public resources: 90 percent of Blackwater's revenues come from state contracts and virtually its entire staff is made up of former soldiers, which means that the training also came at public expense. Yet this vast infrastructure is all privately owned and controlled. The citizens who have funded it have absolutely no claim to this shadow state or its resources.

So I've become quite cynical about the claim that the architects of this new system are free-market ideologues. They are in fact corporate supremacists. The proof is that they will betray their supposed libertarian beliefs at the slightest opportunity if that betrayal will turn a profit for a crony company. You see the hypocrisy most shamelessly in the mega-contracts handed out so private companies can help the Bush administration read our emails and data-mine our lives. It's a kind of triple whammy of hypocrisy: these are people who purportedly believe in restrained government spending, individual liberties, and getting government off our backs, yet without hesitation they will expand the reach of the state, gobble up public money, and violate individual privacy, so long as there is profit in it. Calling the Bush gang "ideologues" gives them way too much credit.

Cusack: You've said that in the future the ultimate luxury will be your own survival...do you really think this is where we're headed?

Klein: Well, the disaster bubble is going to burst, like all bubbles do. And when it does, firms like Bechtel, Fluor and Blackwater are going to lose much of their primary revenue stream. They will still have all the high-tech gear and equipment bought at taxpayer expense, but they will need to find a new business model, a new way to cover their high costs. The next phase of the disaster capitalism complex is staring us in the face: with the state in decay, the parallel corporate state will rent back its disaster infrastructure to whoever can afford it, at whatever price the market will bear.

So imagine that after the next hurricane, Blackwater might not just be working for FEMA, as it was after Katrina -- it could sell its security and evacuation capacity to other corporations, or directly to the public, the very same public that funded its entire start-up phase. Want a helicopter ride off a roof? A bed in a shelter? Bottled water? We'll bill you later. Meanwhile, everyone who can't pay will be out of luck, since evacuation is no longer a "core competency" of the state, and besides, the state shouldn't interfere with the free market. The people who can't pay will either be abandoned -- like the people left on their roofs in New Orleans -- or sucked into the privatized prison surveillance apparatus, to be profited from in another way.

Companies like Blackwater and Halliburton are already roaming the world looking for new markets in other frail states - new governments to guard, new war zones to privatize.

Cusack: Here's what I'm thinking. If these people want to create their own privatized countries, they should practice what they preach, and "take their chances on the open market." Secede from the union and stop bankrolling the whole thing with our tax dollars. I'd love to hear someone make a legal argument that the constitution allows for corporations to build private armies at taxpayer expense. I mean, publicly funded mercenaries are totally outside the boundaries of any conceivably acceptable legal version of the constitutional checks and balances we all learned in civics class. But Blackwater is a symptom of a larger problem which is also more terrifying: basically what the Bush administration has done is use its time in office to fund and create a dangerous counter-power to the very government it is leading.

Klein: That's exactly right. And once you understand this - that a parallel, privatized state has been built for the elites with public money -- it makes Bush's so-called bungling look a lot more sinister. Maybe the construction of this parallel state, and the starving of the public one, is the real "mission accomplished." When the Blackwaters and the Halliburtons and the Lockheeds are looked at as a whole, what you see is a fully articulated state-within-a-state that is as muscular and capable as the actual state is frail and feeble. And of course, as creatures of the new economy, these companies are weightless and stateless. If Blackwater wanted to make like Halliburton and move to Dubai, there would be nothing to stop it.

We need to understand that what we glimpse in these contractor scandals goes well beyond corruption. It's another model of government. War and disasters are being used to advance a radical agenda of corporate rule where the idea of universally accessible public services goes extinct. That's why I wrote The Shock Doctrine -- this thing is way bigger than Bush. Bush isn't an aberration, he's the natural culmination of a 25-year campaign to hollow out and privatize the state. He is the perfect mascot of this movement: if government is unnecessary as anything other than an ATM, who better than Bush to lead it? What is more fitting than having a hollow president to head a hollowed-out state?

Cusack: Yeah -- he's the perfect president to have opened this latest frontier for modern pillage. And we sat by while this lawless corporate frontier was opened up. Maybe because we are still in the cultural thrall of the frontiersman/cowboy -- the far right sample John Wayne on a daily basis. And this has been a huge part of Bush's success. He has been consciously drawing on the Wayne iconography for his whole career; it's what allows him to barrel ahead despite his plummeting popularity. Like Wayne's cowboy, they define themselves through the prism of their will. We make our own way through this Darwinist world. The benevolence and altruism of their spirit and will is a given, a reality not to be debated by facts...

The push back on Eric Prince will fall safely inside the aesthetic...he's just a religious libertarian, etc etc... and so we ride on... This iconography may be the ultimate enabler of the disaster economy. We all know the drill.

We've had Poppa Wayne (Reagan) and Baby Wayne (Bush). Ronald Reagan was the old John Wayne...when kindness comes. But the key to the old Wayne is that he was once a killer; you can see it in his eyes... beneath the kindness lingers that hard truth: he was once a killer. He tames the natural world, but he does it with a veneer of benevolence.

Bush is the young John Wayne -- Ethan from The Searchers. Obsessive. Merciless. Ethan is a deranged person. He will fight the battle no one has the guts to fight...do whatever it takes...kill whoever violates the natural law of the frontier (jungle). This cowboy is the great righter of wrongs. He is wrath incarnate. Part of the mythology is that he's wrong a lot and pig headed and stubborn, it's part of the package. But he is a force of nature and you can argue about it all you want, but you must respect a force of nature.

The protector, the son of anger is coming, with god on his side, to protect the ones he has chosen to love. In Bush's case you can substitute the damsel being raped by natives with the US corporation denied 100 percent ownership of a privatized state company.

Klein: This is actually scarily true. Remember that the occupation took its bloodiest turn when U.S. forces laid siege to Fallujah for the first time, in April 2004. An estimated 900 people were killed, many of them civilians, and the country has been spiraling and disintegrating and surging ever since. That siege was in direct retaliation for the killing of the four Blackwater mercenaries who were strung up on that bridge in Fallujah. One of the code names for the siege was "Operation Angry Ghost". The U.S. army played the role of avenging angel for Blackwater... John Wayne in the desert.

Cusack: This mythology always provides cover for the ideology. The Disaster Capitalism complex was built in the realm of archetype, that frontier realm of the Wild West. Bush, being a terrific political operative knows all this is actual political currency in the modern world.

Now I fear we've entered the kamikaze cowboy phase. Though Bush is effectively already heading into the sunset, like Wayne's great Ethan he will see his battle through to the end no matter what. So maybe he will bomb Iran...

I believe that all the players and people involved in these scandals, armed robberies, murders and corruption should go to prison. But that's not going to happen, and even if it did, the ideology behind them would still be in place. As Milton Friedman said, "our basic function is to keep them [ideas] alive and available until the politically impossible becomes politically inevitable." And it's the ideology that is inherently unjust, corrupt and in general a global menace. We need an opposition movement willing and ready to stand on principal. And someone, a leader -- strong and committed, who will leave them choking on their own bile.

We need people to acknowledge and discuss this new Disaster Capitalism economy, Black water being a striking example of its mission. We need Democrats, Republicans, Independents, Libertarians, Greens and anyone else with a shred of meaningful patriotism in their bones band together to expose and disgrace and disengage from this apocalyptic ideology.

Klein: And we really don't need any more shocks to wake us up. In Iraq, New Orleans and the other disaster zones, we are getting a crystal clear vision of the world that will be created if they continue to get their way. It's a world of cowboys and robber barons. They showed their hand with Blackwater, now it's time for the rest of us to put forward a different vision of the world -- and we can't do it timidly or apologetically.

Cusack: Jimmy Breslin calls media enablers the "Pekingese of the press." I always thought that apt as you watch the latest PR rollout for Iran go unquestioned by mainstream media.

And the Democrats just pretend to take action on civil liberties. After extending the domestic surveillance program, they complain in public about it, pretending to be, I guess, unaware that they extended a program that is defined as a federal crime under the laws that the Senate passed. I mean, these are not particularly subtle facts. Following the pattern, they are objecting to the latest secret memos supporting torture without mentioning that their own so-called torture bill approved tactics like water boarding.

In the meantime, the president keeps repeating the same mantra that "we don't torture" without mentioning that he defines torture as excluding anything short of death.

John Wayne was a towering figure -- a great film star. But the era of his exploitation has to end. The Democrats can't stand up to his iconography -- the Shadow Wayne that has been so co-opted. We need a new paradigm. How about Atticus Finch? Watch Jim Webb -- I think he may be able to lead us into an era of post-Wayne politics.

Labels: American Corporate Republic

By: Christy Hardin Smith

What’s with the non-denial from Sen. Mitch McConnell’s office? Is one of his aides indeed coordinating with wingnuttia for the attacks on a 12-year-old boy and his sister and their family? From ABC News, via Digby:

“This is a perverse distraction from the issue at hand,” said Jim Manley, a spokesman for Reid, D-Nev. “Instead of debating the merits of providing health care to children, some in GOP leadership and their right-wing friends would rather attack a 12-year-old boy and his sister who were in a horrific car accident.”

Manley cited an e-mail sent to reporters by a Senate Republican leadership aide, summing up recent blog traffic about the boy’s family. A spokesman for Senate Minority Leader Mitch McConnell, R-Ky., declined to comment on Manley’s charge that GOP aides were complicit in spreading disparaging information about Frosts. (emphasis mine)

In my experience, if you are not participating in something, you deny it outright to kill the story.

Mitch McConnell is the Republican Minority Leader in the Senate and sponsor of the Orwellian-named “Families First” legislation which would actually decrease the number of kids covered for benefits. Classy. Is someone in his office coordinating a dirty tricks PR advance against a 12 year old child? Have they been helping the story along, doing oppo on this child and his family and feeding it out through the wurlitzer to their corporate media buddies so their hands appear publicly clean while the wingnuts launder their slime tactics for them? As Digby asks, has the Senate Republican Minority leaders office frequently been used as a laundering point of contact for wayward freepers and random wingnuttery at large? Yes or no.

The NYTimes parses the disgusting all-out spitefest against this family, and coughs up another quote from a “an aide to Sen. Mitch McConnell” — gee, they sure do get around, don’t they?

Ms. Pelosi on Tuesday said, “I think it’s really a sad statement about how bankrupt some of these people are in their arguments against S-chip that they would attack a 12-year-old boy.”…

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off, glad to let bloggers take the heat for attacking a family with injured children.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

But Michelle Malkin, one of the bloggers who have strongly criticized the Frosts, insisted Republicans should hold their ground and not pull punches. (emphasis mine)

Smells like a political bait and switch maneuver to me, with the GOP leadership leaving the skeezy tactical bag holding to the more than happy to hold it foaming at the mouth wingnuttia denizens. News flash to Sen. McConnell: if you had anything to do with this, the slime stops at your door as well. Attacking minor children for political gain is craven and wrong. Period. Was this coordination on attacks against a 12 year old done with Sen. McConnell’s approval — or is his control over his staff so lax that he had no idea this was being done? And, either way, how does this qualify as “leadership?”

Is anyone in the media going to actually dig into this and find out how involved the McConnell oppo shop has been in all of this? Because I would love to hear a yes or no answer on any of the above questions.

UPDATE: The Baltimore Sun has a piece on how all of this nastiness is impacting the Frost family. (H/T to Marie Roget for the link.) This from a RedState commenter is particularly appalling:

“Hang ‘em. Publically,” the contributor wrote. “Let ‘em twist in the wind and be eaten by ravens. Then maybe the bunch of socialist patsies will think twice.”

They left this up in their public comments section?!? Vile.

Labels: Frost Family, Mitch McConnell, R-Ky.

Seriously.

I'm sick of this bitch. Sick to fucking death of the politics these people represent. Malkin, Limbaugh, Coulter, O'Reilly, the whole whiney bunch of millionaire mouthpieces of hate.

They are the Brittany Spears of Politics. They'll do and say anything to stay in the spotlight.

I'm sick of them. I'm sick of "journalists" pandering to them and I'm sick of corporate radio stations and newspapers carrying them.

Malkin's current crusade is just another in a long line of attention-grabbing fact-free-spin say-whatever-you-need-to-draw-attention-to-yourself-and-sell-books kind of bullshit that has come to represent "debate" from the right wing.

The right has degenerated into a snarling pit of hate lead by people like Coulter, Malkin, Limbaugh, O'Reilly, Savage, Beck, Horowitz and the entire band of vicious selfish slobs they represent.

I'm sick of them. Seriously.

Hugs and Kisses,

The Punisher

The wingnutosphere's politics of hate laid bare

by kos

Labels: bands of flying monkeys, Frost Family, Republicans

"Douchebags Like Michelle "I Love Internment" Malkin attack 12 year olds and Working Families for Seeking Assistance with Medical Bills. Jesus these people's priorities are fucked." - The Punisher

_______________________________
Capitol Feud: A 12-Year-Old Is the Fodder

WASHINGTON, Oct. 9 — There have been moments when the fight between Congressional Democrats and President Bush over the State Children’s Health Insurance Program seemed to devolve into a shouting match about who loves children more.

So when Democrats enlisted 12-year-old Graeme Frost, who along with a younger sister relied on the program for treatment of severe brain injuries suffered in a car crash, to give the response to Mr. Bush’s weekly radio address on Sept. 29, Republican opponents quickly accused them of exploiting the boy to score political points.

Then, they wasted little time in going after him to score their own.

In recent days, Graeme and his family have been attacked by conservative bloggers and other critics of the Democrats’ plan to expand the insurance program, known as S-chip. They scrutinized the family’s income and assets — even alleged the counters in their kitchen to be granite — and declared that the Frosts did not seem needy enough for government benefits.

But what on the surface appears to be yet another partisan feud, all the nastier because a child is at the center of it, actually cuts to the most substantive debate around S-chip. Democrats say it is crucially needed to help the working poor — Medicaid already helps the impoverished — but many Republicans say it now helps too many people with the means to help themselves.

The feud also illustrates what can happen when politicians showcase real people to make a point, a popular but often perilous technique. And in this case, the discourse has been anything but polite.

The critics accused Graeme’s father, Halsey, a self-employed woodworker, of choosing not to provide insurance for his family of six, even though he owned his own business. They pointed out that Graeme attends an expensive private school. And they asserted that the family’s home had undergone extensive remodeling, and that its market value could exceed $400,000.

One critic, in an e-mail message to Graeme’s mother, Bonnie, warned: “Lie down with dogs, and expect to get fleas.” As it turns out, the Frosts say, Graeme attends the private school on scholarship. The business that the critics said Mr. Frost owned was dissolved in 1999. The family’s home, in the modest Butchers Hill neighborhood of Baltimore, was bought for $55,000 in 1990 and is now worth about $260,000, according to public records. And, for the record, the Frosts say, their kitchen counters are concrete.

Certainly the Frosts are not destitute. They also own a commercial property, valued at about $160,000, that provides rental income. Mr. Frost works intermittently in woodworking and as a welder, while Mrs. Frost has a part-time job at a firm that provides services to publishers of medical journals. Her job does not provide health coverage.

Under the Maryland child health program, a family of six must earn less than $55,220 a year for children to qualify. The program does not require applicants to list their assets, which do not affect eligibility.

In a telephone interview, the Frosts said they had recently been rejected by three private insurance companies because of pre-existing medical conditions. “We stood up in the first place because S-chip really helped our family and we wanted to help other families,” Mrs. Frost said.

“We work hard, we’re honest, we pay our taxes,” Mr. Frost said, adding, “There are hard-working families that really need affordable health insurance.”

Democrats, including the House speaker, Nancy Pelosi, have risen to the Frosts’ defense, saying they earn about $45,000 a year and are precisely the type of working-poor Americans that the program was intended to help.

Ms. Pelosi on Tuesday said, “I think it’s really a sad statement about how bankrupt some of these people are in their arguments against S-chip that they would attack a 12-year-old boy.”

The House and Senate approved legislation to expand the child health program by $35 billion over five years. President Bush, who proposed a lower increase, vetoed the bill last week. Mr. Bush said the Democrats’ plan was fiscally unsound and would raise taxes; the Democrats say he is willing to spend billions on the Iraq war but not on health care for American children.

Mr. Bush’s plan could force states to tighten eligibility limits, but it seemed likely that the Frost children would still be covered.

Republicans on Capitol Hill, who were gearing up to use Graeme as evidence that Democrats have overexpanded the health program to include families wealthy enough to afford private insurance, have backed off.

An aide to Senator Mitch McConnell of Kentucky, the Republican leader, expressed relief that his office had not issued a press release criticizing the Frosts.

But Michelle Malkin, one of the bloggers who have strongly criticized the Frosts, insisted Republicans should hold their ground and not pull punches.

“The bottom line here is that this family has considerable assets,” Ms. Malkin wrote in an e-mail message. “Maryland’s S-chip program does not means-test. The refusal to do assets tests on federal health insurance programs is why federal entitlements are exploding and government keeps expanding. If Republicans don’t have the guts to hold the line, they deserve to lose their seats.”

As for accusations that bloggers were unfairly attacking a 12-year-old, Ms. Malkin wrote on her blog, “If you don’t want questions, don’t foist these children onto the public stage.”

Mr. and Mrs. Frost said they were bothered by the assertion that they lacked health coverage by their own choice.

“That is not true at all,” Mrs. Frost said. “Basically all these naysayers need to lay the facts out on the page, and say, ‘How could a family be able to do this?’ S-chip is a stopgap.”

Labels: Corporate Republic, Douchebag, Michelle Malkin