Flesh and Stone

The Pennsylvania Sexual Assault Scandal, the Second Mile Foundation, and Penn State

Fri, 11 Nov 2011 03:08:00 -0700

By Michael Collins

The current focus on Pennsylvania State University, its football program, and former coach Joe Paterno will be replaced by a more pervasive sexual assault scandal in the coming days and weeks. At-risk children and their often disadvantaged single parents were delivered up to a relentless sexual predator with exhibitionist tendencies as described in the findings of a special Commonwealth of Pennsylvania grand jury.

The relentless deviate, former PSU defensive coordinator, Jerry Sandusky, is accused of sexually assaulting children for years. According to the grand jury, he gained easy access to children and early adolescents through the Second Mile Foundation which he founded in 1977 as a group home for "troubled boys." He continued the assaults at his home and in the PSU showers on at least one occasion. Since hiring Jack Raykovitz, PhD, a licensed psychologist, as president, the foundation has grown into a multimillion enterprise serving over 100,000 at-risk children throughout the state.

A picture of alleged serial abuser Sandusky came into clear focus in the Pennsylvania Statewide Investigating Grand Jury release of findings about victims 1 through 8. Sandusky selected the eight boys from the population of those served by the Second Mile Foundation, it is alleged. He would start with mentoring, move onto hosting the boys for overnights in a bedroom at his home, and initiate oral copulation and anal sex, according to the grand jury report.

A critical fact listed in by the grand jury concerns the legal counsel for both the foundation and PSU. Wendell Courtney was the legal counsel for both PSU and the Second Mile Foundation during the period covering 1998 through the end of 2009. Courtney served as PSU's primary legal counsel as a member of the law firm of McQuaide-Blasko. In January 2010, PSU hired a full time, in house counsel. During Courtney's service to the organizations, Second Mile founder, PSU coach (in 1998), and PSU coach emeritus (in 2002) Sandusky was twice investigated on charges of sexual assault. Neither investigation resulted in either organization terminating Sandusky's employment or access to facilities.

Where is the Sexual Assault Scandal Headed?

Penn State Scandal: Jerry Sandusky Rumored To Have 'Pimped' Boys To Donors: REPORT Huffington Post headline, November 10

This is a remarkable headline since it features rumors of incomplete investigations by unidentified reporters. The story that HuffPost says should break soon concerns Sandusky's Second Mile Foundation and its donors. There were other reports concerning this new direction of the story.

The foundation raises millions of dollars a year from corporate and individual donors in Pennsylvania for the most part. Funds support educational and "leadership" programs and retreats for at-risk youth throughout the state.

The 2010 foundation annual report features a county map of Pennsylvania with total individuals serviced by county. For some reason, the totals are about even for individuals served in Allegheny County, population 1.2 million, and Centre County, population, 153,000 (and home of PSU).

Was Jerry Sandusky procuring at-risk youth for foundation donors as suggested in the headline? If so which donors? Where and when did this happen?

PSU summarily fired the university president, senior executives, and Joe Paterno this week. As of today, long time Second Mile president, Jack Raykovitz, PhD, retains his position as foundation president. The members of the Honorary Board of Trustees, a list of Pennsylvania notables, are in the uncomfortable position of endorsing a tarnished foundation. Major donors listed in the annual report are seen as offering public financial support for a foundation that remains passive despite the clear need for organizational change.

Link

What about Victims 1 through 8 (and more)?

We have no way of knowing the level of help received by the reported Sandusky victims reviewed by the statewide grand jury. Any delays to much needed evaluation and treatment is a true shame.

There is a wealth of data concerning the mid and long term impact of adult sexual assaults on children. In summary, victims of childhood sexual abuse have a much higher incidence of depression (major depression, dysthymia), anxiety disorders, including posttraumatic stress syndrome, and substance related disorders. Bipolar youth are more likely to have their first mood episode earlier as a result of sexual assault as are youth with schizophrenia.

Long term problems trusting any authority (Judith Herman, MD) are common if the assailant is a trusted individual, as Sandusky was at the start of his alleged abusive relationships.

Sexual assaults victims are also more likely to be victimized again (revictimization) than are those without this history.

The full impact of adult sexual assault of children is inherently limited by the reluctance of victims to report the crimes.

At the very least, the reported Sandusky victims deserve immediate assistance with medical and psychotherapeutic care, without any strings attached by the organizations who so thoroughly neglected to identify, report, and stop the abuse. Victims should not be asked to wave future compensation to receive this care.

Any victims associated with programs of Second Mile Foundation, Sandusky, or PSU should have free court guardians appointed to assure that they're not victimized again by the wealthy and powerful through coercive legal tactics. The Commonwealth of Pennsylvania should establish a fund immediately and a master of the fund who from out of state. Trials and settlements must be handled by competent courts outside of Pennsylvania.

The focus needs to shift to immediate identification and help for all victims and prompt investigation and prosecution of perpetrators.

END

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Michael Collins: Gaddafi Jihadist Rehab Program Spawns Rebel Military Leaders

Wed, 31 Aug 2011 20:48:00 -0600

Monday was the day we heard that the "US believes al-Qa'ida is on the verge of defeat after deputy leader's death" as The Independent headlined the story. It stood out as a sequel to the recent United States action in Pakistan, which brought us the news (but not the body) of a dead Osama bin Laden. It appears that a US operated drone killed Al Qaeda's top deputy, one Atiyah Abd al-Rahman, a Libyan citizen. After decades as a jihadist, Rahman is no more. But is that the end of al Qaeda?

On Tuesday, foreign affairs columnist for the Asia Times, Pepe Escobar, published a remarkable column outlining the command structure of the victorious NATO backed military leaders. Abdelhakim Belhaj, the lead commander of the rebels, and the two top regional commanders were once affiliated with the Libyan Islamic Fighting Group (LGIF). In fact, commander Belhaj was once the subject of a US led extraordinary rendition (aka torture) in Thailand. About the time the US planned to send Belhaj to Guantanamo Bay, the Gaddafi's government requested his return to Libya.

Terrorist Rehab, Libyan Style

At this point, you may be thinking, "Good grief, that's when the real torture started!" Au contraire! The request for repatriation came from none other than Saif Al-Islam Gaddafi, son of Libya's former dictator Muammar Gaddafi.

Saif, and others in the Gaddafi government, began a bold program of repatriating and rehabilitating individuals belonging to LGIF and other jihadist groups. Many fled Libya for Afghanistan where they fought with al Qaeda against the Soviet Union and then the United States Afghan effort. The LGIF had engaged in violent resistance to the Gaddafi regime. A large contingent of the LGIF fought the US in Iraq. According to reports, they "officially joined al Qaeda" in November 2007.

Saif Al Islam Gaddafi had a better idea:

"Saif Gaddafi worked hard to get individuals from the Muslim Brotherhood out of jail and paved the way for increase cooperation between the LIFG and the security services. This helped boost the level of mutual confidence between them." Combating Terrorism in Libya through Dialog and Reintegration, March 2010 p, 6

The gathering of terrorists in Libya served a purpose - terrorist rehabilitation or deradicalization, as the program termed it. Efforts focused on intensive dialog and debate between those employed by the Gaddafi regime and the terrorists. The main goals were a renunciation of violence and surrender of their weapons. From there, a holistic approach was applied to lay the foundations for a reintegration into Libya society. Psychological and social factors were included to reorient those detained as they adapted to a peaceful existence.

On graduation day in March, 2010, Saif Al-Islam presided over a formal press conference. As he freed 214 former members of LGIF, the Muslim Brotherhood, and other groups hostile to his regime, he said:

"Today is an important day because 214 prisoners are released. However, its greatest importance lies in the release of the group’s leaders, and therefore, today, we have reached the crest of the reconciliation and dialogue program. Thanks to the efforts of our brothers and the Gaddafi Foundation, 705 people were released including of course this group. Saif Al-Islam Gaddafi, Press Conference in Tripoli, March 23, 2010 p, 13

It was less than a year later that the February 17, 2011 days of rage marked the start of the Libyan rebellion led by the graduates of the deradicalization program. This was the same program initiated by Gaddafi's son and sponsored by the Gaddafi International Foundation for Charitable Associations.

The rehabilitation failed.

The Bush Administrations Gaddafi Rehab Program

Before Muammar Gaddafi and his son started their terrorist rehabilitation program, the Bush Administration conducted its own deradicalization effort with Gaddafi. On May 15, 2006, the US restored diplomatic relations with Libya. Then Secretary of State, Condoleezza Rice said, "We are taking these actions in recognition of Libya's continued commitment to its renunciation of terrorism."

Time Magazine heralded the Gaddafi's conversion with a headline; Why Gaddafi is now a Good Guy. It noted that, "Even though Gaddafi has done little to loosen his dictatorship, British Prime Minister Tony Blair and French President Jacques Chirac, among other statesmen, have already visited Libya to signal the West's pleasure. President Bush, or his successor, could be next to visit the leader in his tent."

The diplomatic contacts went hand in hand with weapons and energy contracts and it was all good until those rehabilitated al Qaeda allies, the LGIF, began stirring the pot.

Now things have turned upside down again. The military leadership of the Libyan rebellion is wall to wall LGIF with their links to al Qaeda. The NATO military machine may have taken some advice from its deradicalized allies. There have been reports of NATO bombings in urban areas with a range of civilian casualties. Unfortunately, on May 10, the United Nations Office for the Coordination of Human Affairs stopped its tally of civilian casualties. That was our only chance to know how many Libyans had to be killed in the name of freedom.

So what about the end of al Qaeda announced Monday? What about a Libyan revolutionary military command infested by al Qaeda sympathizers? It doesn't really matter, it appears. The Libyan effort is about something more important - oil (Libya to honor all legal oil deals, August 24)

Just a few years after pronouncing Gaddafi civilized, the US now demands that he leave Libya. Instead of selling him billions in weapons, NATO forms an alliance with a revolutionary military command dominated by members of an organization with strong historical ties to al Qaeda. It is all about oil. Whoever has it is our friend. Those who had but could not hold the oil concession are forgotten.

The United States and Europe have no permanent friends or enemies, to borrow a phrase, just a permanent lust for oil. That can justify any sequence of events. Just bet on the winner and get the goods.

END

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The War on You

Sun, 31 Jul 2011 04:22:00 -0600

Let the word go forth from Washington! The corporate rulers occupying our nation's capital have declared war on just about every citizen.

Have no doubt: those in the upper ranges of the top 1% of wealth in this country (aka The Money Party) want to kick you to the curb.

They want to reduce your social security and make you go broke paying for medical care.

They want to lower your wages and trash your retirement.

They ignore the clear facts that we've had negative job growth since 2000 and the situation is just getting worse.

They want to ship jobs, factories, and entire businesses overseas and give companies that do that a big fat tax credit for doing so.

They've been given so much for nothing for so long. Now, they're ready to take it all. It's their time!
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The most recent assault is the ridiculous debate about raising the debt ceiling. There should be no debate. Failing to raise the ceiling right now means deliberate default on debts, refusing to pay bills the government can pay. It's called fraud.

The pressing need to fix the budget is a separate issue. Reduced spending and increased revenues should come through broad public involvement and open debate. It mandates that the rulers behave like adults.

But this crisis isn't about putting together a real budget. It's about creating a budget that punishes you, your family, and friends. It's about taking your attention away from your vital interests to maximize income and control by The Money Party.

Were the leaders on either side of the debate serious, the Bush era tax cuts would be rescinded. These cuts on the top 1% were temporary. Guess what? Congress lied. When the temporary tax breaks ran out a few months ago, they were revived and renewed just when we had the greatest need for revenues.

The Money Party won't give up its wars either. Iraq and Afghanistan have added $4 trillion to the national debt of $14 trillion. Why not stop the wars? How hard is that to figure that out?

Getting rid of Bush tax cuts for the super-rich, ending the wars, and moving out of the recession/depression would be huge steps toward balancing the budget. But that won't happen with this Congress and this president. Why? That would cost the financial elite money for taxes and lost income for all those weapons they sell to support the wars.

The Attack on You Began in Earnest Just Years Ago

Congress repealed Depression era banking regulation that kept your banks from risky investments in 1999.

Congress enacted legislation in 2000 that allowed extremely risky investments in real estate and other derivatives, illegal for nearly a century.

In 2001, the big banks and Wall Street celebrated its newly purchased freedoms with a decade-long binge of fraud and risky investments. Like a greedy con artist, they took everything they could from people here and around the world until there was no more to take. We have now hit the wall thanks to them.

The outrageous expenses of wars based on lies caught up with us and shoved the deficit to new heights. The tax cuts for the top 1% took away revenues needed to balance the budget.

The money they steal from the Social Security surplus is no longer enough. They want to keep the tax in place for us and take an even bigger rake-off.

This crisis is manufactured by the ongoing greed of The Money Party. It is funded by the US Treasury. You pay for it, all of it.

End

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Congressional Criminal Conspiracy! Defaulting when you don't need to is a crime

Wed, 27 Jul 2011 19:51:00 -0600

If we defaulted on our debt when we were perfectly capable of paying it, we would be be prosecuted for fraud. But when Congress does it, they call it politics.

The crazies in the United States House of Representatives would have you believe it were so. They say fix that budget before we'll raise the debt ceiling. If we don't get our fix, they announce, there's no deal. We'll just default until things get straightened out. (Image: George Romero)

Let's see what would happen to you or me. We are unable to pay our bills, unless we tap a special line of credit that we've used in the past, one that has never failed us. We'll have to raise some money and cut some expenses too.

We're tired of paying bills and just want to stop for a while. We file for bankruptcy following all of the required procedures. The minute we file, we're granted an automatic stay on our debt. We are now protected, no bills to pay.

Then we get a few visits from creditors. They let us know that they know we can pay. Other people owed money show up also and ask, what is your problem? You owe us the money. You can pay and you will. The combination of angry creditors and recipients of our funds forces us to do what we could have done in the first place.

We tap the line of credit, cut expenses, and increase income. We make the payments we could have made all along. Once again, we have the choice of fixing things long term or repeating the process yet again.

What would happen to us? We would certainly hear from federal attorneys and the bankruptcy court. We lied to gain the stay. That's more than just inaccurate representations. It's fraud, a prosecutable offense. We would also hear from the creditors and recipients of our funds. They would demand restitution for damages based on any demonstrable harm from our fraudulent default.

In addition to criminal and civil consequences, we would be regarded as shady characters and real fools by our peers.

If Congress refuses to raise the debt ceiling, something it has done nearly seventy-four times since 1962, we will face similar consequences.

We have been accumulating significant debt since the Reagan administration, the claimed inspiration for many of the new members of Congress. Democrats and Republicans have participated in the annual tradeoffs of political benefits today versus neglected long term fiscal responsibilities. Robert Oak's article shows new expenditures contributing to the current debt. The main offenders are the wars in Afghanistan and Iraq and the Bush era tax cuts. This represents 3.2 trillion in new debt.

What happens if the United States defaults on its debt?

The US dollar is the world's reserve currency. People all over the world rely on the stability of the dollar. Since the dollar is tied to the government, if the government defaults, so much for the dollar. It plunges in value. There will be a world reserve currency to follow and it won't be the dollar. This will translate into immediate hardship here and abroad.

The cost of everything will go up as a result of default. Why? The credit rating for the United States will be downgraded and cost of borrowing will increase substantially for governments - federal, state, local - and for business.

The cost of credit and the general disruption will have an immediate impact on unemployment. Remember 2009? It will be much worse.

Since the United States has no need to default, the act will tarnish our image even more than it has been tarnished by dysfunctional government, military aggression, and financial fraud perpetrated by Wall Street (see Numerian's article). We're not the only game in town. There are alternatives. Imagine a marginalized nation seen as the world's leading grifter.

The default is not necessary. When you can't pay your bills, you cut expenses that don't generate revenue, war and defense spending. You increase available revenues. The Bush era tax cuts were to expire by now. Put them back in force. Those in the top 1% of the income bracket have had a nice run (see graph rebelcapitalist.com). Let them pay their fair share.

Offer the public input through an open debate based on honest information. What is the impact of cutting spending in a time of recession? What should be cut? What should be increased? What does a serious budget look like, one that benefits the people and nation in the mid and long term?

If default takes place, it will be predicated on a conspicuous fraud, just like our example of the fraudulent default by the individual who had no need to default.

The debt ceiling and a balanced budget are entirely separate issues.

Anyone who behaves as though this is not the case is simply lying. Worse, they're the enemy of the vast majority of citizens.

END

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Running Rupert to Ground – Vox Populi, Vox Dei

Mon, 18 Jul 2011 16:41:00 -0600

By Michael Collins

How will they get rid of Rupert Murdoch and his toxic enterprises?

July 4, 2011 may turn into the people's Independence Day. On that day, stellar journalist Nick Davies of the Guardian released his story; Missing Milly Dowler's voicemail was hacked by News of the World. Twelve year old Milly Dowler had been kidnapped with foul play feared. The Murdoch tabloid couldn't resist. News of the World (the News) hired a private detective to hack Milly's voicemail. Finding the mail box full, the News or its hired dick deleted existing messages to make room for new ones, all to fuel their ongoing coverage. The deleted messages raised hopes by Milly's parents that she was still alive and using her voicemail. (Image)

The Davies story elicited a reaction of near universal shock, outrage, and revulsion. Milly had already been murdered by the time the Murdoch paper began its illegal tapping.

The public revulsion resulted in immediate and fervent popular demands for justice. Those demands were compounded by follow-up stories on other Murdoch media hacking. As it turned out, the News also broke into the voicemails of war widows to capture their most intimate exchanges on the loss of fallen soldiers in Afghanistan and Iraq. All in all, at least 4,000 citizens had their voicemails hacked to boost the Murdoch publication's circulation and profits.

Driven by broad public ire, Murdoch's empire began unraveling immediately. He became a target for those he'd tormented, particularly in politics. In just a few days, he became anathema for those he'd placed in power, indicating the focused intensity and force of public outrage. Conservative Prime Minister David Cameron fell in line with Labour Party Leader Ed Milliband's call to stop Murdoch's critical acquisition of pay TV network BSkyB. The Independent spoke of Murdoch having to abandon his United Kingdom media properties.

The crisis spread across the Atlantic when Senator John D. (Jay) Rockefeller demanded that law enforcement look into possible voicemail and other electronic surveillance of 9/11 survivors in the United States by Murdoch's News Corporation.

"I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans. If they did, the consequences will be severe." Senator John D. Rockefeller IV, July 12

The very next day the FBI announced an investigation. Ominously for Murdoch, Rep Peter King (R-NY), endorsed the effort immediately. King has been a friend of Fox for some time and a frequent guest on the network's news programs.

Ignored in all of this well justified outrage is the ultimate sin of the Murdoch media empire, enabling and encouraging the lethal invasion of Iraq by supporting the insane plans of former President George W. Bush and his collaborator, former Prime Minister Tony Blair. The war took a terrible toll in injuries and deaths of US forces. The anticipated civil strife that followed the invasion resulted in a million dead Iraqi civilians, several million refugees, and, at one point, five million orphans.

Forced Exist Strategies for Murdoch

The legal options in the United Kingdom are fairly straight forward. Two former News editors have already been arrested, Andy Coulson and Rebekah Brooks. Those devastating blows followed proposals in Parliament block Murdoch's acquisition, a near certainty now, and to break up his media empire. Murdoch beneficiary, PM Cameron, supported the former and may be forced to support the latter.

The public outrage in the UK shows no signs of waning. The pressure to do something dramatic will reach a fever pitch after Tuesday's hearings by the Culture, Media, and Sport Select Committee. Murdoch and others News Corporation luminaries will face a robust interrogation.

Murdoch has already withdrawn his bid for total control of the lucrative BSkyB cable network. He may lose the ability to keep his current 39% if he's found an "unfit person" for media ownership.

In addition, the UK has anti-bribery legislation that may apply, the Prevention of Corruption Act 1906. News Corporation and executives are vulnerable to charges under the act. A "corrupt transaction" [bribe] is defined as occurring when "any person corruptly gives or agrees to give or offers any gift or consideration to any agent as an inducement or reward" in return for a favor of some kind. Former chief executive of News International, Rebekah Brooks, already admitted "corrupt transactions" in 2003 (see below).

Beyond the specific admission by Brooks, there are a number of allegations that the London Metropolitan Police were bribed to limit and impede the investigations into the News phone hacking.

A combination of phone hacking plus violations of the Prevention of Corruption Act await Murdoch. This would go beyond what the The Independent suggested when it wrote of Murdoch, "abandoning his British media interests."

The rapidly unfolding catastrophe in the UK does something to Murdoch that he can ill afford. It shows that he is vulnerable.

Who shows any sympathy to a vulgar, amoral bully when his time is up?

Rockefeller's Broadside

Senator Rockefeller's demand for an investigation of News Corporation is a work of political art. How could a 20 year member of the Senate intelligence Committee raise a question about harassing victim families of the 9/11 attack without knowing the answer in advance? Was the 9/11 question raised to open the door for a broad based attack on Murdoch in the US?

Murdoch is clearly a toxic force in politics and a menace to rational governance even by the standards of oligarchs. His propaganda for the Iraq invasion left dead and injured, a shattered reputation for the nation, diminished effectiveness overseas, and added four trillion dollars in debt. The Tea Party movement with its cast of borderline politicos is out of control. Sarah Palin's targeting rhetoric was closely associated with the assassination attempt on Rep. Gabrielle Giffords, (D-AZ).

Most recently, the fruit of the Fox fueled Tea Party juggernaut, the Republican majority in the House of Representatives, showed a willingness to take the nation and the world into a devastating economic depression with their impossible requirement for a balanced budget before raising the US debt ceiling. This indicates a massive disconnect with reality.

Murdoch's News Corporation has the power to create all of this havoc and more. It is autonomous and subject only to the profoundly distorted political whims of its tottering leader. Murdoch mischief amounts to very real threats that are unacceptable for those with the ability to put Murdoch out of business.

Running Murdoch Out of the US

If Murdoch's time has come, a variation of this scenario is available as you read these words.

The Foreign Corrupt Practices Act (FCPA) is used to prosecute bribes of foreign officials. Created in the late 1990s, the act was signed by thirty-four nations, including the US and the UK. The Justice Department has used the act frequently in recent years.

News Corporation's Rebekah Brooks has already admitted giving cash to the London Metropolitan Police at a 2003 public hearing. Brooks was editor of the News at the time.

Federal prosecutors have combined the FCPA with The Travel Act of 1961 to increase the penalties and convictions for foreign bribery. Brooks is a citizen of the UK. However, her acts are the ultimate responsibility of Murdoch's News Corporation, incorporated in Delaware and headquartered in New York City. The act outlaws travel and communications from one state or country to another country with the intent of violating the law. Federal prosecutors can indict perpetrators using applicable state law. New York State law classifies bribing a public official as a felony as is interfering with the administration of justice.. Therefore, News Corporation could be charged with felonies under The Travel Act, FCPA, and New York criminal code.

Here is the Brooks testimony admitting cash payments to the London police. Also at the inquiry was Andy Coulson, News of the World Editors, 2003-2007. Brooks was editor of the News form 2000-2003.

Culture, Media, and Sport Select Committee, March 2003 Video-Guardian.co.uk

Committee: And I might just ask have they [the News] ever paid the police? Just the one element of whether you ever pay the police.

Brooks: We have paid the police for information in the past and it's been …

Committee: And will you do it in the future.

Brooks: It depends on…

Committee: Will you operate within the code and within the law.

Andy Coulson: We operate within the code and within the law and if there's a clear public interest and the same holds for private detectives, for subterfuge, for video bags, whatever you want to talk about…

Committee: It's illegal for police officers to receive payment

Coulson: No, no, no, we don't, I just said, ‘within the law.'

This testimony fits in neatly with the accusations that the News paid off London police to slow-roll the phone hacking investigation.

If they want Murdoch, they've got him. Wide spread speculation that Murdoch is subject to indictment will drive down News Corporation shares, costing Murdoch billions, and threaten the viability or even profitable sale of his US properties. The picture may turn grim very soon for the once but not future grand master of media manipulation.

The Voice of the People

Public reaction in the UK has put the entirety of Rupert Murdoch;s British holdings at risk. Since July 4, the public reduced the press overlord who made and controlled British politics to the status of a flight risk. Can Murdoch relax for a moment in his London mansion knowing that if he ever faces a trial, he will surely have a jury that would do everything it could to make sure he served the rest of his life in a British prison.

These rapid and dramatic shifts have much more to do with the outrage of citizens than with the popular proposals of Labour Leader Ed Miliband that would break up News Corporation's UK operations. This leader is following the people.

The prospect of a similar public outrage in the US is currently a function of the FBI investigation. Confirmation of the shameless act of spying on the families of 9/11 victims would cause an eruption of anger that would spread across the nation at warp speed. Murdoch would be finished here, one way or another.

Powerful forces will work against this, challenging Rockefeller and others who are, without much doubt, intent on sending Murdoch away. Questioning News Corporation exploitation of 9/11 families is a charge, a deep mark, that will firmly attach to the Fox news outlets, cable, broadcast, and print properties for decades.

The people of the United Kingdom found their voice and demonstrated that they cannot be stopped when they act in unison. The precedent is set. For decades, the citizens of the United States have not had a moment where their unified will caused a rapid policy change. If the opportunity arises, manufactured or not, the precedent may be set here and generalize to broader interests. It is time to stop the extraction of nearly all of the nation's wealth and power by the very few at the expense of the overwhelming majority.

END

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Is News Corp Finished - Senator Rockefeller Tells Feds to Investigate Fox Hacking of 9/11 Victims

Wed, 13 Jul 2011 08:09:00 -0600

There are some crimes so universally offensive that even mentioning the suspected crime has devastating effects. Senator Jay Rockefeller (D-WV) raised just such a question yesterday. In a brief press statement, the Senator said:

"The reported hacking by News Corporation newspapers against a range of individuals - including children - is offensive and a serious breach of journalistic ethics. This raises serious questions about whether the company has broken U.S. law, and I encourage the appropriate agencies to investigate to ensure that Americans have not had their privacy violated. I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans. If they did, the consequences will be severe." Senator John D. Rockefeller IV, July 12 (Image: NASA)

Rupert Murdoch's News Corporation has used voicemail hacking and other forms of privacy intrusion in the United Kingdom as far back as 2002. The goal is to get the most intimate insider information, stay ahead of the news cycle, and beat the competition. Where better to get information than the voicemails and other electronic data belonging to those in the news. The News of the World, Murdoch's flagship paper, hacked the voicemails of a kidnapped 12 year old, the widows of fallen soldiers, and even the powerful. In 2006, the Murdoch papers invaded the private medical records of former Labour Party leader Gordon Brown.

A July 4 article by Nick Davies of the Guardian ignited the most recent focus on illegal actions by the Murdoch papers with the revelation about the phone hack of the 12 year old kidnapping-murder victim, Milly Fowler. The outrage and subsequent revelations have laid waste to News Corporations plans for the total acquisition of a highly successful pay per view entertainment network, BSkyB.

Rockefeller’s statement comes just five days after reports by London’s Daily Mirror claiming that a Murdoch UK paper sought hacking services targeting the phone traffic and voicemails of 9/11 victims. Davida Collins of the Mirror wrote:

“This investigator is used by a lot of journalists in America and he recently told me that he was asked to hack into the 9/11 victims’ private phone data. He said that the journalists asked him to access records showing the calls that had been made to and from the mobile phones belonging to the victims and their relatives.” Daily Mirror, July 7

The yet to be verified source said that the investigator making the inquires was particularly interested in the phone data on British 9/11 victims.

John Del Signore of The Gothamist said this of the Mirror’s reporting: “Of course, this has only been reported in The Mirror, which is reveling in its rival's downfall, and eager to see Murdoch's bid for full control of British Sky Broadcasting go down in flames.”

Senator Rockefeller is a long standing member of the Senate Select Intelligence Committee and was its chairman from 2007 through 2009. It’s not likely that he relied on the Daily Mirror newspaper to form the basis for his concerns. It is highly unlikely that Rockefeller issued this brief but potent release without some evidence that the charges have merit. At this point, the Senator is just asking questions, in a public and very pointed way.

Rockefeller is not known for grandstanding or histrionics, although he can be very forthright at times. He chaired the Senate intelligence committee when it released a report on intelligence before the Iraq invasion, Rockefeller said:

“In making the case for war, the Administration repeatedly presented intelligence as fact when in reality it was unsubstantiated, contradicted, or even non-existent. As a result, the American people were led to believe that the threat from Iraq was much greater than actually existed.” Senate Intelligence Committee Unveils Final Phase II Reports on Prewar Iraq Intelligence June 5, 2008

A horse, a horse, my kingdom for a horse! Richard III

Murdoch will need more than a horse to retreat from the bloody battlefield that he created of his own free will. During the just ten days following the explosive Guardian report on phone hacking by Murdoch’s News of the World, he has sustained repeated attacks on his UK media properties, pending deals, and his personal integrity. Now a senior, well connected US Senator is questioning his integrity.

Last week, the man Murdoch helped elect Prime Minister, David Cameron, indirectly defended Murdoch, then abandon him yesterday. PM Cameron took just two days to agree with the July 7 motion in Parliament to oppose Murdoch’s “must have” acquisition of pay cable giant BSkyB. The PM’s surrender is all the more significant since it was put forward by his harshest critic, Labour Party leader Ed Miliband.

All the while, the evidence of sleazy and scandalous behavior of the Murdoch papers has expanded geometrically.

Rockefeller’s statement is the harbinger of corporate death. Every time a real reporter is within shouting distance of Murdoch, the questions will be asked

"Mr. Murdoch, sir:"

Did you hack the phones or other media of 9/11 victims?

How many?

What possessed you to do that?

How many other invasions of privacy have the foot soldiers for your media empire conducted?

Is anyone safe from the spying of News Corporation?

Murdoch’s answers matter less than the fact that Senator Rockefeller's statement opens the door to devastating inquiries. Increasingly, Murdoch will be seen as a toxic entity, someone requiring great distance, a Uriah Heep of the corporate elite. He’s simply not bankable anymore or fit for civil company.

But at long last, Murdoch has no shame. That requires a moral center, a set of beliefs consistent with the importance and integrity of civil discourse and governance.

Murdoch has inflicted great pain on the world and never flinched, never apologized. He is, after all, the owner of Fox News. Murdoch worked hand in hand with former President George W. Bush to justify the invasion of Iraq. Many who believe Saddam Hussein was behind the 9/11 attacks got that information from the drumbeat of misinformation provided by Murdoch’s US media outlets.

The war cost lives, caused suffering, and has a lot to do with bankrupting the nation. It also cost the lives of a million Iraqi civilians who died in the civil strife directly caused by the war.

Murdoch never apologized for his central role of supporting the Iraq invasion or for the needless death and carnage that followed. Why would he apologize for hacking phones to invade the lives of innocent citizens caught in a big news story or those at the top of society and politics. His character is now his destiny.

END

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Michael Collins: The Wisdom of the People - the Populist Rationale

Mon, 04 Jul 2011 03:56:00 -0600

The citizens of the United States have excellent judgment. They have shown it consistently over time. When that judgment shifts briefly allowing a failed policy, it is a result of the vilest forms of propaganda by a small clique of liars. (Image: PS-OV-ART)

The people were right about the invasion of Iraq

We know that the plan to invade Iraq began just days after Inauguration Day, 2001. The opportunity to launch the most disastrous and costly military effort in our history came on 9/11. The destruction of the World Trade Center towers and attack on the Pentagon became the pretext for war. The manipulators launched their fraudulent storyline in earnest with confidence that they would get their war.

But in December of 2002, the public wasn't buying it. The people didn't have access to all of the information. They knew one thing for sure -- the invasion was a very bad idea unless Iraq posed an imminent threat to the country with weapons of mass destruction. An in depth Los Angeles Times public opinion poll asked this question:

The rulers needed to pull out all the stops to get their war. They sent a national icon, General Colin Powell, to lie to the world as he waved a vile of supposed chemical weapons at the United Nations. Then President Bush lied in his 2003 state of the union address to Congress about Iraq's nuclear potential. This shameless manipulation of our worst fears came as a direct result of the wisdom of the people rejecting a contrived invasion. When the public fails to cooperate, extraordinary measures are implemented.

The people were right about the bailout

Another instance of the people's wisdom came in the days leading up to the first bailout vote following the 2008 Wall Street-big bank collapse. Then Secretary of the Treasury Henry Paulson put together a generous bailout for the most favored banks and investment houses. The goasl were to keep them in business, to preserve their bonuses, and to cover up the various schemes that caused the crisis in the first place.

The people knew better. The spontaneous outpouring of public demands that Congress reject the bailout came at a rate never seen before. The first bailout was defeated 228 to 205, with only two members failing to show up for the vote. The anti-bailout coalition included arch liberals Dennis Kucinich (D-OH) and Bobby Scott (D-VA), the very right wing Dana Rohrabacher (R-CA), and libertarian Ron Paul (R-TX).

The financial elite were shocked by this outcome. They marshaled their forces, calling back both presidential candidates to endorse the bailout. Financial pressure was applied. More ominously, Secretary Paulson claimed that the financial chaos absent a bailout would be the equivalent of a massive heart attack. The bailouts passed on the next vote propping up the perpetrators of the crash and guaranteeing their fat-cat bonuses.

The pubic was right again.

Who pays attention to the public? Not our leaders. There was a time when ordinary people rose up and offered a declaration based on the people's wisdom.

A Populist Manifesto

One of the earliest populist declarations applies directly to the challenges we face right now. It represented a bold assertion from those denied the benefits of their labor. These were not experts. They were, by and large, farmers. They were not Ivy League graduates. But their education was sufficient to generate a revolutionary statement addressing the massive inequalities of their time.

The decades following the Civil War were challenging to both urban and rural citizens. By 1892, a Populist Party emerged with a manifesto that is highly relevant to our times. The movement had some successes and then unraveled when some leaders diverted the movement from its core economic principals and openness to divisive politics including racism and religious bigotry. This diversion has been the undoing of populist candidates and movements since that time.

The original Populist principles, however, are of great interest. Note the remarkable unity shown by the mostly rural based Populist Party members with labor unions and urban workers: "The interests of rural and civil labor are the same; their enemies are identical."

The 1892 Populists argued that a small group of individuals and entities within society controlled the majority of wealth and power. This cabal of the very few manipulated the system to serve their will leaving the people with varying degrees of nothing. The 1892 platform of the Populist Party crystallized this argument:

"The conditions which surround us best justify our cooperation; we meet in the midst of a nation brought to the verge of moral, political, and material ruin. Corruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench."

How did this happen. The populists had an answer:

"The newspapers are largely subsidized or muzzled, public opinion silenced, business prostrated, homes covered with mortgages, labor impoverished, and the land concentrating in the hands of capitalists." 1892 platform

And they knew the ultimate goal behind the hijacking of the government:

"The fruits of the toil of millions are badly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the Republic and endanger liberty." 1892 platform

The populists were compelled to meet and take action because the political parties offered no resource or remedy:

"We have witnessed for more than a quarter of a century the struggles of the two great political parties for power and plunder, while grievous wrongs have been inflicted upon the suffering people. We charge that the controlling influences dominating both these parties have permitted the existing dreadful conditions to develop without serious effort to prevent or restrain them." 1892 platform

The populists aimed to take power and demanded the implementation of fundamental change. Their program included a strong stand in favor of unions: "…the union of the labor forces of the United States this day consummated shall be permanent and perpetual." They asserted that, "Wealth belongs to him who creates it, and every dollar taken from industry [work] without an equivalent is robbery." Profits up the line were exploitation. They demanded nationalization of the railroads, the dominant and oppressive monopoly of the time. The 1892 manifesto called for a progressive income tax, a legally mandated eight hour workday, an end to corporate subsidies, election reform ("a free ballot and a fair count"), and a civil service independent of political meddling and influence.

It is time to look back to the populists of the late 19th century, as well as the industrial labor movements and their initial principles. Our societies look very different on the surface but the underlying challenges presented by great concentrations of wealth are the same.

Almost all citizens are faced with troubles from big money, rapacious power, and the exploitation visited on us daily.

It is time for the people to apply their considerable wisdom, as evidenced over the past decade, in a systematic fashion that recognizes core interests, principles, and threats. It's always a good thing to be right. It is quite another to be both right and successful in taking power to achieve vital interests and principles.

END

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The Edwards Prosecution - They have better things to do

Tue, 07 Jun 2011 02:43:00 -0600

Michael Collins

We can draw several clear conclusions from the indictment of John Edwards.

The case is a joke, quite literally. It mocks justice.

The cast of characters consists of people who should have recused themselves, rather than bringing a prosecution. This strange case has the faint odor of the nonstop assault on former Alabama governor, Don Siegelman.

Apparently the Department of Justice has a lot of time on its hands. How else could it pursue this transparent nonsense while failing to prosecute the perpetrators of the financial collapse?

Finally, the prosecution shows that those in control are not even pretending to acknowledge a rule of law.

The Indictment has No Basis in Law

Prosecutors redefine and distort the definition of campaign contributions and activities to fit the Edwards case. They ignore the clearly stated language negating their claim. As a result, this prosecution is so flawed it can only be judged as a personal or political prosecution.

The third sentence of the Edwards indictment states: "A centerpiece of Edwards' candidacy was his public image as a devoted family man." Having made that assertion, the US Attorney sprung his trap. The Election Act’s contribution limit applied "to anything of value provided for the purpose of influencing the presidential election…" That’s the entire case. John Edwards took money to cover up a personal problem that would have hurt his campaign. Taking the money isn’t the main problem. Edwards would have been guilty had he used his own money. The alleged crime is using money in excess of the maximum limit for anything that influences the election.

There has never been a campaign finance prosecution using this broad theory. Here’s why. You have candidates who take salaries, cash in investments, undergo plastic surgery, and even receive mortgages and other loans during their candidacy. These acts all contribute to a candidate’s positive image in some way. But, they are not considered campaign expenditures under the campaign finance law used to charge Edwards. The law specifically excludes personal funds in Sections 431, 441 and elsewhere makes clear.

There’s no specific language in the law about paying off a mistress. But that’s clearly personal, an outcome of personal behavior. It’s no different than a candidate using money in excess of the $2,500 contribution limit to polish up his or her image with a loan for an electorate friendly ranch, a new "tuck," or even a vacation. Whether these are paid for with loans from others or with personal funds, these acts are never the cause of legal problems for the elected officials or their challengers.

What is campaign expenditure? Is it "anything of value provided for the purpose of influencing the presidential election"? The US Attorney would have us think so. But he knows better. That is language right out of federal election law. The indictment neglects language in the very same section, 431, Definitions (20), (A) that tells us what constitutes "Federal election activity" in the following subparagraphs: (i) voter registration; (ii) voter identification; (iii) public communication; and, (iv) services.

The specifics in (20) (A) make it perfectly clear what constitutes "election activity." It’s the nuts and bolts of getting the vote out, advertising, and the logistics of moving candidates and people around. There is no basis to expand and distort the definition as the Department of Justice prosecution does. The neglect of obvious clauses in the law that exculpate Edwards or anyone else similarly charged speaks to the transparent weakness of the indictment.

A Stacked Deck at the Department of Justice

Who had the gall to bring this indictment in the first place? It comes from the Department of Justice, via the US Attorney’s office, North Carolina, Eastern District. President George W. Bush appointed the US Attorney behind this effort in 2006, George E.B. Holding. He comes from the same family that owns the holding company that controls Citizens Bank, one of the largest regional banks in the Southeast. The family had strong ties to the late Senator Jesse Helms (R-NC). Holding’s three high profile indictments of politicians were all prominent Democrats.

Senator Richard Burr (R-NC) put a hold on the Obama administration’s nominee to replace Holding. Burr got the silent assent of the Democratic Senator from that State, Kay Hagen. Was this delay designed to get Edwards? We may never know. Burr is the fall guy for this awful prosecution, according to Obama administration apologists. In fact, if Obama wanted his own US Attorney, he would have had the appointment. It has been two and a half years since he took office.

Odd cases make strange bed fellows. The case would never have been brought were it not approved by the Department of Justice. The chief of the department’s section on public integrity, Jack Smith, co-signed the complaint. Andrew Kreig, Executive Director of the Justice Integrity Project, chronicled the unraveling of the section’s last big case, the prosecution of the late Senator Ted Stevens of Alaska. The judge who dismissed the case said he’d never seen anything like the "mishandling and misconduct" in that prosecution in 25 years on the Federal bench. "

Lanny A. Breuer, President Obama’s choice to head the criminal division at main justice came to government from one of Washington’s true power firms, Covington and Burling, the same firm that Attorney General Eric Holder left when he became Attorney General. The indictment would not have occurred without their approval. At the law firm, Breuer headed up a division that represented targets of congressional probes: "Moody’s Investor Service in the wake of Enron’s collapse, and Halliburton/KBR in a hearing conducted by the House Committee on Oversight and Government Reform." The fox now guards the hen house.

Where is the justice and equity in a baseless prosecution by a political enemy of John Edwards, supervised by a public integrity section that shocks judges by its misconduct, all under the banner of a Justice Department where the two senior officials are from a high powered DC law firm specializing in defending big money corporations accused of major crimes?

Where are the critically important financial fraud indictments?

The Great Recession of 2008 laid waste to the assets of the middle and working classes. By 2009, the top 1% of the country had incomes 255 times greater than the bottom four fifths of the population. The top 20% controlled 80% of the nation’s wealth, with 20% for the rest of the country. About 25% of citizens have a negative net worth

The value of home equity went from 13.5 trillion before the Great Recession to 5.3 trillion in the first quarter of 2009, a loss of $8.2 trillion for the most valuable asset most citizens own.

The likely perpetrators of the Great recession are among top 1% of the population. Many sources have documented the unmitigated greed and recklessness of Wall Street and the big banks, greed that precipitated the recession. A comprehensive report by a bipartisan Senate committee documents much of it, in detail, with extensive evidence.

What has the Department of Justice been up to during this time? When what many agree are true financial crimes, many involving mortgage fraud, we have every reason to expect indictments and prosecutions of those whose actions cost so much and caused such suffering?

The perpetrators of the 2008 financial crisis and Great recession caused losses 8.2 trillion in home equity values and the DOJ fraud task force recovered only $204 million (see chart). Yet, this same Justice Department has time to initiate a costly, trivial, absurd prosecution of a political figure who will never run for office again.

Talking up the administration’s Financial Fraud Task Force, Lanny A. Breuer, head of the justice criminal division said, "As you know, in the wake of the economic crisis, pursuing financial fraud is one of the Department’s top priorities."

A more familiar figure spoke out in support: "Through the Financial Fraud Task Force, we are making clear that the Obama Administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud," said Treasury Secretary Geithner. November 17, 2009

What are they waiting for? Better yet, we should ask, why are they waiting? And, why is the US Attorney’s office that covers a major banking center, Charlotte, North Carolina, wasting his time prosecuting John Edwards?

We Live in a Lawless Nation

When great crimes go uninvestigated, let alone unpunished, and petty acts are construed to be crimes for political reasons, it is fair to conclude that we life in a lawless nation. That doesn’t mean all participants in the legal system are lawless, far from it. It means that those in the seats of great power use that power to protect the very wealthy no matter what the crimes, at the expense of the rest of us. For them, the law is a tool for control and settling scores.

The Bush administration mounted a systematic assault on what remained of the Constitution’s protections for individuals against unjust prosecution and mistreatment by the system. They provided tools for their successors in the Obama administration to carry on with abuses of power. Unfounded and petty prosecutions like the Edwards’s case and failure to prosecute the perpetrators of the financial collapse are just two examples.

END

(Image: John Edwards 2008)

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Beyond ForeclosureGate - It Gets Uglier

Thu, 21 Apr 2011 01:10:00 -0600

by Michael Collins

The ForeclosureGate scandal poses a threat to Wall Street, the big banks, and the political establishment. If the public ever gets a complete picture of the personal, financial, and legal assault on citizens at their most vulnerable, the outrage will be endless. (Image)

Foreclosure practices lift the veil on a broader set of interlocking efforts to exploit those hardest hit by the endless economic hard times, citizens who become financially desperate due medical conditions. A 2007 study found that medical expenses or income losses related to medical crises among bankruptcy filers or family members triggered 62% of bankruptcies. There is no underground conspiracy. The facts are in plain sight.

ForeclosureGate represents the sum total illegal and unethical lending and collections activities during the real estate bubble. It continues today. Law professor and law school dean Christopher L. Peterson describes the contractual language for the sixty million contracts between borrowers and lenders as fictional since the boilerplate language names a universal surrogate as creditor (Mortgage Electronic Registration System), not the actual creditor. Other aspects of ForeclosureGate harmed homeowners but the contractual problems that the lenders created on their own pose the greatest threats.

When the Massachusetts Supreme Court upheld a lower court ruling that the actual creditor must named in the mortgage agreement (a legal requirement that the banks forgot to meet in their contracts), there was consternation on Wall Street. What would happen if a class action lawsuit challenged these flawed mortgages? Isn't the Massachusetts decision the latest of many attacking the legal basis of the shoddy business practices and boilerplate industry contracts? What if homeowners started walking away from their underwater mortgages based on the legally flawed contracts? If there were a viable prospect of a class action suit against financial institutions threatening to invalidate these contracts, wouldn't that crash the stock values of the big banks and some Wall Street firms?

The big banks and their partners on Wall Street need a preemptive strike to derail the legal process that threatens their existence. They may get a temporary reprieve through pending consent decrees from the United States Department of Justice and consortia of state attorney's general. If that protection fails, big money will make every effort to buy a bill from Congress that absolves them retroactively, en masse. The consent decree might cost them a few billion dollars. That's much better than owing the trillions in lost home values due to their contrived real estate bubble and stock market crash.

As bad as this is, it gets worse.

Beyond ForeclosureGate

The surface scandal is about fraudulent business practices and a systematic assault on homeowners by lenders, servicers, and the legal system. A much broader picture must be viewed in order to understand the utter contempt that the ruling elite has toward citizens and the depraved tactics used to express that contempt, all to serve endless desire to accumulate more money and power.

The set up began when we heard about the ownership society in the 2004 presidential election. President Bush defined ownership as taking the government out of our lives so more people could own homes and control their destinies. The foundation was home ownership. As Bush said on the campaign trail, "We're creating a home -- an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property" October 2, 2004.

Then Federal Reserve Chairman Alan Greenspan was uncharacteristically coherent when he laid the foundation for the swindle earlier that year. Greenspan told the Credit Union National Association that the fixed rate mortgage was "an expensive way of financing a home." He was clear when he advised lenders that, "consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage." February 2, 2004. Home equity through exotic mortgage products fueled consumption and became the new "margin account."

The Chairman of the Federal Reserve and the president ratified the real estate bubble, already underway at the time, as political and financial doctrine. The advice was clear. Get an ARM, own your piece of the American Dream and spend that equity. Housing prices never go down, right? (Image)

Freddie Mack, Fannie Mae, Wall Street and the big banks provided the back room. Mortgage Backed Securities (MBS) derivatives were vastly expanded. This made it easy for more homebuyers to qualify for mortgages they might not otherwise get, credit standards dropped. Those with good credit saw an array of tantalizing zero interest loans and other mortgage products to maximize available cash and feed the stock market.

It was all good until it wasn't.

The real scandal is the unfathomable loss of wealth and opportunities by the vast majority of citizens and the vicious attack on the most vulnerable citizens as a part that process. The attack continues and is worthy of review.

Foreclosure and Bankruptcy

Foreclosure is the down side of the ownership society. When you're sold a bill of goods, a property that you were told you were qualified to buy, and you lose it, you are evicted from ownership island.

Before Congress passed the 2005 bankruptcy reform act, homeowners could avert foreclosure in many states by filing for bankruptcy. Not just anyone could qualify. The process of qualifying was difficult and, oftentimes humiliating. But homes were saved and families were preserved with a chance to start over.

A myth emerged of the bankruptcy abuser, a high-class sort of welfare cheat. These reckless people worked the system to rack up large debts that were subsequently wiped clean through bankruptcy. The alleged abuse of the system became the excuse for a major overhaul of bankruptcy law. The legislation passed the Senate with 74 yes votes and soon became law.

The changes since the 2005 legislation provide substantial benefits to creditors. Morgan et al summarized the direct benefits to creditors in a forthcoming publication in the New York Fed's Economic Policy Review. Before bankruptcy reform, the filer of a bankruptcy claim used to determine Chapter 7 or 13 filing status. That makes a difference in the amount and type of debt relief. The legislation imposes means test that determines precisely which chapter (7 or 13) filers must use. Significantly, chanter 13 filers retain more debt from medical and other unsecured credit.

Legal costs ranged from $600 to $1500 before bankruptcy reform. Legal fees now range between $2800 and $3700. Previously, there was no requirement for credit counseling prior to filing.

Filers must now document approved credit counseling six months before filing or face dismissal of their case (Morgan et al.). This counseling requirement can lead to unwarranted dismissals or inordinate delays in filing at a time when filers need relief.

Under the old law, only bankruptcy trustees appointed by the federal court could file claims of abuse by the filer. Under the new legislation, anyone can file a claim of bankruptcy abuse, which can lead to a dismissal of the cause. This is a huge benefit to lenders who wanted to keep citizens from realizing debt relief.

The Real Benefit for Big Money - Delayed Bankruptcy Filings

The new law makes it harder to file a claim, doubles costs, and gives the creditors a say in claiming fraud on the part of those who file claims. Significant delays in filing for bankruptcy became the norm.

From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

Time is money for loan servicers. A long delay before a bankruptcy filing, allows servicers the opportunity to add on special fees, many of which the borrower can't comprehend. One thorough study showed that many of these fees were questionable. The longer it takes, the greater the revenue opportunities. Delay benefits creditors since loan payments continue at their original level.

What happened to those big spending, reckless bankruptcy abusers that were the rationale for the 2005 reforms? The following graph from the Consumer Bankruptcy Project shows that there is virtually no difference between the incomes of filers before and after bankruptcy reform. The majority of filers made between ten and forty thousand dollars a year before reform. That has remained virtually unchanged. The big spending abusers were and remain a mythical construct; the centerpiece of a diversion strategy to keep attention away from this never-ending gift to creditors.

From Did Bankruptcy Reform Fail? An Empirical Study of Consumer Debtors, Lawless et al., American Bankruptcy Law Journal, Vol 82, 2008

These newly empowered creditors were the same creditors who hired debt collectors to try and frighten people out of their filings. A major study found that 24% of filers reported that debt collectors told deliberate lies to avoid bankruptcy. They herd that filing for bankruptcy would lead to jail, job loss, or an IRS audit. Some were told that it was illegal to file for bankruptcy. Lawless, et al. Did the Bankruptcy Reform Fail? An Empirical Study, October 2008

The deck was stacked early against citizens and protection from creditors disappeared under the new law. The creditors, who so recklessly precipitated the economic collapse, came out on top. They were free to profit in any way they could from their new market,

What Causes Bankruptcy - Financial Shocks from Medical Expenses

Prior to the new law, the major cause of bankruptcy stemmed from medical care expenses and the resulting disruptions to families. Rather than the mythical big spender contrived by Congress, for nearly half of filers, major medical expenses, family tragedies, were the tipping point to a loss of financial viability.

The Consumer Bankruptcy Project audited a representative sample of bankruptcy filers in 2001. The audit found that 46% cited a "major medical cause" for bankruptcy. This includes the direct cost of uncovered medical bills for major illness or injury, lost work due to the same, and the need to mortgage the family home to cover medical costs.

Did Congress review this data? Were they intent on making it harder to file bankruptcy as a result of illness? When bankruptcy is delayed or simply not attainable, less money is available for needed medical care. Were the members supporting bankruptcy reform indifferent to the suffering compounded by their thoughtless legislation?

The situation is worse now. A comprehensive survey of those who filed bankruptcy in 2007 showed the increasing desperation of those faced with medical problems. When individuals or family members are in dire need of medical care, do they just sit home and suffer?

From Medical Bankruptcy in the United States, 2007: Results of a National Study, Himmelstein et al., American Journal of Medicine, 2009:04

The results of this survey show that two thirds of bankruptcies result from medical care that they can't afford or losses in income from medically required leave. Where are the big spending cheats?

Nihilists at the Helm

The big banks, Wall Street, the politicians they own, and the Federal Reserve Board created the real estate bubble in bad faith.

They knew or should have known:

that the real estate bubble was unsustainable;
when the bubble deflated, many homeowners would hit a financial wall; and, that
when homeowners hit the wall, to maintain viability for their families, they would need relief of some sort.

What did the nihilists of the financial elite and their hit men walking the halls of power do with all this knowledge? They went ahead with the real estate bubble, fostered it, deregulated meaningful controls on the financial industry, and crafted a new bankruptcy law to stick it to filers. They knew or should have know that data from 2001 showed a very high rate of filings due to the financial stress of medical care and crises. Did they care? Do they care now? Has anything been done to correct this injustice?

While citizens suffer in financial distress, often due to illness, at the behest of influential bankers and investors, the Department of Justice crafts a settlement with lenders and their representatives to relieve them of the stern justice due for their specific crimes and the larger horrors they visit upon citizens, all in the name of short term profit.

We are most emphatically not a nation of laws. We are a nation where the law is used by a very few for their own purposes, without regard for the well being of the nation or its citizens. We are a lawless nation.

END

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In Economic Populist, also see:

ForeclosureGate Deal - The Mandatory Cover Up by Michael Collins
The Arc of Justice - The Ibanez Case Ruling by Numerian
An Update on the Foreclosure Mill by Robert Oak
Is Residential Real Estate a Ticking Time Bomb? By Robert Oak

Killing Us Quickly - Ryan's Medicare Proposal

Fri, 15 Apr 2011 03:49:00 -0600

Michael Collins

House Budget Committee Chairman Paul Ryan (R-WI) proposed a Medicare plan that combines Social Darwinism and a bailout for health insurance carriers, even larger than the one provided by the president's health care reform legislation.

The specific features of the program are less important than the overall effect. In summary, Ryan proposes a plan that will starve most of those sixty-five and older of health care. Here are the numbers, based on Congressional Budget Office projections and elaborated by Dean Baker and David Rosnick (in 2011 dollars) (Center for Economic and Policy Research, April 2011)

The Republican plan privatizes Medicare by 2022. Seniors will choose their health insurance from corporate health insurance companies. The government will make a lump sum payment ($6,097) for this purchase. Seniors will then make a beneficiary payment on their own and take responsibility for other provider payments. The beneficiary payment will represent an increasing portion of median income from 2022 through 2050. In addition, there are other provider payments estimated, like co-pays. I added a fifth column, total senior payments, beneficiary plus other payments.

Are They Kidding?

Seniors struggle now to meet their expenses, trading off essentials like medicine, winter heating costs, and other fundamentals. Where are they going to come up with the total senior payments? Many won't have the money.

Here's another look at the numbers, the beneficiary payments (not including other provider payments) as a percent of income by income status within the overall universe of those entering the system at 65. Almost half of income goes to those at the 40th percentile on the income over a third for those in the middle. Where will they get the money? They don't have it now. Are we looking at a resurgence of the economy? Will seniors continue working to make these payments, slaves to corporate health insurance providers? Where will they find the jobs to make these payments?

Fixin' to Die Blues

What happens when you can't afford health insurance? You can't afford health care. What happens when you can't afford health care and you get sick? It seems Chairman Ryan has taken a page or two from Søren Kierkegaard's nineteenth century classic, The Sickness Unto Death. There will be more illnesses among seniors. These illnesses will not be treated and compound suffering until the uncared for seniors will die.

Wasn't Ryan among the group that worried about death panels in the Obama health care reform package? It doesn't matter to the Fox News constituency. Whatever works at the time. Now Ryan needs to balance the budget, he thinks. How would you do that? Let's see. Deny health care to the most vulnerable sector of the population, make them sick, and when they die, you've got further savings.

The Plan has no Credibility on its Face

There is so much wrong with the Ryan plan, there should be a law against it. Here are just a few points:

The plan trades one centralized plan administrator, Medicare, into as many bureaucratic administrators as there are health insurance companies. Medicare's administrative costs are below 3% of total expenditures. Health insurance companies have three times the administrative costs plus profits. That means even deeper cuts to health care since corporate health insurance administrative costs approach 21% total expenditures.

The Ryan plan relies on hallucinogenic numbers. Take the CBO projections for government, beneficiary costs, and beneficiary other expenses for 2022 and 2030. They are $20,017 and $24,587 respectively. Now call up your insurance company and see what the health insurance cost is for a sixty-five year old? These are fully loaded costs which include premiums, deductibles, and out of pocket expenses. Congratulations if you find one today for the 2030 figure of $24,587. The numbers in the Ryan plan come straight from Fantasy Island.

The Perfecta

Ryan's Medicare plan is the perfecta for the ruling class.

It enshrines the long ago discredited Social Darwinism theory. Popular among the elite of the late 19th century, the theory argues that, "the strongest or fittest should survive and flourish in society, while the weak and unfit should be allowed to die." That's exactly the way the world looks to Paul Ryan and his patrons. Economic outcome determines existential reality. If you can't cut it, you're left behind to die. But first you have to suffer a while.

The second winner for the ruling elite comes in the form of a further bailout for health insurance carriers. These are the folks who Just Say No on a regular basis and have trouble processing a simple claim. President Obama's health care plan bailed out these companies by ignoring the compelling rationale for a single payer system. That wasn't enough for the elite. The Ryan plan puts them back in business with full membership in the ultimate death panel, privatized Medicare. Their profits will be endless.

A Rational Approach

A solution to the rising costs of health care is available. It requires a change in behavior on the part of all members of Congress and a rational look at helping citizens take care of their health care problems.

The behavior change is straightforward. Members of Congress and the executive branch have to actually think then translate those thoughts into words. The thinking process starts with intellectual honesty. You don't take one part of the budget, Medicare, and beat the program senseless in order to address a much larger budget.

Just a shred of intellectual honesty would move those in charge to all areas of the budget. How about a military budget that assures the nation's defense without the requirement for world domination? Let's end the current wars overseas and pledge no future preemptive invasions like Iraq.

Stop balancing the budget by forcing seniors to suffer and die needlessly.

That eruption of rational behavior and discussion would lead to some useful analysis of the soaring costs of health care.

One area not examined or discussed concerns the concentration of health care costs. The research is already there from the Agency for Healthcare Research and Policy. Nearly fifty percent of health care costs occur within just 5% of the population. The higher the age, through the 65-79 year old group (see graph below), the higher the concentration of expenditures on health care for this group.

The incumbent geniuses look at this data and produce a plan that eliminates the offending age group with extreme prejudice. Their opponents, just six degrees away on the political spectrum, are silent on the very real cost savings opportunity.

A rational approach dictates that we look at the health conditions of the 5% who use 50% of health care dollars with the goal of ameliorating or eliminating them. Diabetes, asthma, heart disease represent a large share of this 5% groups health care costs. Why not target preventative and research efforts to substantially reduce the health problems of these citizens and, as a result, reduce the costs. Cutting the 50% costs for 5% of the population to 5% is a reasonable target to start.

Putting citizens first is a foreign concept to our rulers, all of them. Taking care of people first to achieve a budget benefit, a huge budget benefit, is apparently beyond their pay grade. That makes sense when you consider who is paying them, the unreformed Social Darwinists who forget that they win every game because they write the rules, select the umpires, and control the news.

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