“Iran War Resolution II”–Text of H.R. 2194: Iran Refined Petroleum Sanctions Act of 2009

This version: Introduced in House. This is the original text of the bill as it was written by its sponsor and submitted to the House for consideration. This is the latest version of the bill available on this website.

HR 2194 IH


1st Session

H. R. 2194

To amend the Iran Sanctions Act of 1996 to enhance United States diplomatic efforts with respect to Iran by expanding economic sanctions against Iran.


April 30, 2009

Mr. BERMAN (for himself, Ms. ROS-LEHTINEN, Mr. ACKERMAN, Mr. BURTON of Indiana, Mr. SHERMAN, Mr. ROYCE, Mr. ANDREWS, and Mr. KIRK) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committees on Financial Services, Oversight and Government Reform, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


To amend the Iran Sanctions Act of 1996 to enhance United States diplomatic efforts with respect to Iran by expanding economic sanctions against Iran.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the ‘Iran Refined Petroleum Sanctions Act of 2009’.


(a) Findings- Congress finds the following:

(1) The illicit nuclear activities of the Government of Iran–combined with its development of unconventional weapons and ballistic missiles, and support for international terrorism–represent a serious threat to the security of the United States and U.S. allies in Europe, the Middle East, and around the world.

(2) The United States and other responsible nations have a vital interest in working together to prevent the Government of Iran from acquiring a nuclear weapons capability.

(3) The International Atomic Energy Agency has repeatedly called attention to Iran’s unlawful nuclear activities, and, as a result, the United Nations Security Council has adopted a range of sanctions designed to encourage the Government of Iran to cease those activities and comply with its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (commonly known as the ‘Nuclear Non-Proliferation Treaty’).

(4) As a presidential candidate, then-Senator Obama stated that additional sanctions, especially those targeting Iran’s dependence on imported refined petroleum, may help to persuade the Government of Iran to abandon its illicit nuclear activities.

(5) On October 7, 2008, then-Senator Obama stated, ‘Iran right now imports gasoline, even though it’s an oil producer, because its oil infrastructure has broken down. If we can prevent them from importing the gasoline that they need and the refined petroleum products, that starts changing their cost-benefit analysis. That starts putting the squeeze on them.’.

(6) On June 4, 2008, then-Senator Obama stated, ‘We should work with Europe, Japan, and the Gulf states to find every avenue outside the U.N. to isolate the Iranian regime–from cutting off loan guarantees and expanding financial sanctions, to banning the export of refined petroleum to Iran.’.

(7) Major European allies, including the United Kingdom, France, and Germany, have advocated that sanctions be significantly toughened should international diplomatic efforts fail to achieve verifiable suspension of Iran’s uranium enrichment program and an end to its nuclear weapons program and other illicit nuclear activities.

(8) The serious and urgent nature of the threat from Iran demands that the United States work together with U.S. allies to do everything possible–diplomatically, politically, and economically–to prevent Iran from acquiring a nuclear weapons capability.

(b) Sense of Congress- It is the sense of the Congress that–

(1) international diplomatic efforts to address Iran’s illicit nuclear efforts, unconventional and ballistic missile development programs, and support for international terrorism are more likely to be effective if the President is empowered with the explicit authority to impose additional sanctions on the Government of Iran;

(2) the concerns of the United States regarding Iran are strictly the result of the actions of the Government of Iran; and

(3) the people of the United States–

(A) have feelings of friendship for the people of Iran;

(B) regret that developments in recent decades have created impediments to that friendship; and

(C) hold the people of Iran, their culture, and their ancient and rich history in the highest esteem.

(c) Statement of Policy- It should be the policy of the United States to–

(1) support international diplomatic efforts to end Iran’s uranium enrichment program and its nuclear weapons program;

(2) encourage foreign governments to direct state-owned entities to cease all investment in, and support of, Iran’s energy sector and all exports of refined petroleum products to Iran;

(3) encourage foreign governments to require private entities based in their territories to cease all investment in, and support of, Iran’s energy sector and all exports of refined petroleum products to Iran;

(4) impose sanctions on the Central Bank of Iran and any other Iranian bank or financial institution engaged in proliferation activities or support of terrorist groups; and

(5) work with the allies of the United States to take appropriate measures to protect the international financial system from deceptive and illicit practices by Iranian banks and financial institutions involved in proliferation activities or support of terrorist groups.


(a) Expansion of Sanctions- Section 5(a) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended to read as follows:

‘(a) Sanctions With Respect to the Development of Petroleum Resources of Iran and Exportation of Refined Petroleum to Iran-


‘(A) INVESTMENT- Except as provided in subsection (f), the President shall impose 2 or more of the sanctions described in paragraphs (1) through (6) of section 6(a) if the President determines that a person has, with actual knowledge, on or after the date of the enactment of this Act, made an investment of $20,000,000 or more (or any combination of investments of at least $5,000,000 each, which in the aggregate equals or exceeds $20,000,000 in any 12-month period), that directly and significantly contributed to the enhancement of Iran’s ability to develop petroleum resources of Iran.

‘(B) PRODUCTION OF REFINED PETROLEUM RESOURCES- Except as provided in subsection (f), the President shall impose the sanctions described in section 6(b) (in addition to any sanctions imposed under subparagraph (A)) if the President determines that a person has, with actual knowledge, on or after the date of the enactment of the Iran Refined Petroleum Sanctions Act of 2009, sold, leased, or provided to Iran any goods, services, technology, information, or support that would allow Iran to maintain or expand its domestic production of refined petroleum resources, including any assistance in refinery construction, modernization, or repair.

‘(2) EXPORTATION OF REFINED PETROLEUM RESOURCES TO IRAN- Except as provided in subsection (f), the President shall impose the sanctions described in section 6(b) if the President determines that a person has, with actual knowledge, on or after the date of the enactment of the Iran Refined Petroleum Sanctions Act of 2009, provided Iran with refined petroleum resources or engaged in any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources, including–

‘(A) providing ships or shipping services to deliver refined petroleum resources to Iran;

‘(B) underwriting or otherwise providing insurance or reinsurance for such activity; or

‘(C) financing or brokering such activity.’.

(b) Description of Sanctions- Section 6 of such Act is amended–

(1) by striking ‘The sanctions to be imposed on a sanctioned person under section 5 are as follows:’ and inserting the following:

‘(a) In General- The sanctions to be imposed on a sanctioned person under subsections (a)(1)(A) and (b) of section 5 are as follows:’; and

(2) by adding at the end the following:

‘(b) Additional Sanctions- The sanctions to be imposed on a sanctioned person under paragraphs (1)(B) and (2) of section 5(a) are as follows:

‘(1) FOREIGN EXCHANGE- The President shall, under such regulations as the President may prescribe, prohibit any transactions in foreign exchange by the sanctioned person.

‘(2) BANKING TRANSACTIONS- The President shall, under such regulations as the President may prescribe, prohibit any transfers of credit or payments between, by, through, or to any financial institution, to the extent that such transfers or payments involve any interest of the sanctioned person.

‘(3) PROPERTY TRANSACTIONS- The President shall, under such regulations as the President may prescribe, prohibit any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation, or exportation of, dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which the sanctioned person has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.’.

(c) Presidential Waiver- Section 9(c)(2) of such Act is amended by amending subparagraph (C) to read as follows:

‘(C) an estimate of the significance of the provision of the items described in paragraph (1) or (2) of section 5(a) or section 5(b) to Iran’s ability to develop its petroleum resources, to maintain or expand its domestic production of refined petroleum resources, to import refined petroleum resources, or to develop its weapons of mass destruction or other military capabilities (as the case may be); and’.

(d) Strengthening of Waiver Authority and Sanctions Implementation-

(1) INVESTIGATIONS- Section 4(f) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended–

(A) in paragraph (1)–

(i) by striking ‘should initiate’ and inserting ‘shall immediately initiate’;

(ii) by inserting ‘or 5(b)’ after ‘section 5(a)’; and

(iii) by striking ‘as described in such section’ and inserting ‘as described in section 5(a)(1) or other activity described in section 5(a)(2) or 5(b) (as the case may be)’;

(B) in paragraph (2), by striking ‘, pursuant to section 5(a), if a person has engaged in investment activity in Iran as described in such section’ and inserting ‘, pursuant to section 5(a) or (b) (as the case may be), if a person has engaged in investment activity in Iran as described in section 5(a)(1) or other activity described in section 5(a)(2) or 5(b) (as the case may be)’; and

(C) by adding at the end the following new paragraph:

‘(3) DEFINITION OF CREDIBLE INFORMATION- For the purposes of this subsection, the term ‘credible information’ means public or classified information or reporting supported by other substantiating evidence.’.

(2) EXCEPTION FOR PROLIFERATION SECURITY INITIATIVE- Section 5(f) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended–

(A) in paragraph (6), by striking ‘or’ at the end;

(B) in paragraph (7), by striking the period at the end and inserting ‘; or’; and

(C) by adding at the end the following new paragraph:

‘(8) if the President determines in writing that the person to which the sanctions would otherwise be applied is–

‘(A) a citizen or resident of a country that is a participant in the Proliferation Security Initiative; or

‘(B) a foreign person that is organized under the laws of a country described in subparagraph (A) and is a subsidiary of a United States person.’.

(3) GENERAL WAIVER AUTHORITY- Section 9(c)(1) of the Iran Sanctions Act of 1996 (50 U.S.C. 1701 note) is amended by striking ‘important to the national interest of the United States’ and inserting ‘vital to the national security interest of the United States’.

(4) RULE OF CONSTRUCTION- The amendments made by this subsection shall not be construed to affect any exercise of the authority of section 4(f) or section 9(c) of the Iran Sanctions Act of 1996 as in effect on the day before the date of the enactment of this Act.

(e) Reports on United States Efforts To Curtail Certain Business Transactions Relating to Iran- Section 10 of such Act is amended by adding at the end the following:

‘(d) Reports on Certain Business Transactions Relating to Iran-

‘(1) IN GENERAL- Not later than 90 days after the date of the enactment of the Iran Refined Petroleum Sanctions Act of 2009, and every 6 months thereafter, the President shall submit a report to the appropriate congressional committees regarding any person who has–

‘(A) provided Iran with refined petroleum resources;

‘(B) sold, leased, or provided to Iran any goods, services, or technology that would allow Iran to maintain or expand its domestic production of refined petroleum resources; or

‘(C) engaged in any activity that could contribute to the enhancement of Iran’s ability to import refined petroleum resources.

‘(2) DESCRIPTION- For each activity set forth in subparagraphs (A) through (C) of paragraph (1), the President shall provide a complete and detailed description of such activity, including–

‘(A) the date or dates of such activity;

‘(B) the name of any persons who participated or invested in or facilitated such activity;

‘(C) the United States domiciliary of the persons referred to in subparagraph (B);

‘(D) any Federal Government contracts to which the persons referred to in subparagraph (B) are parties; and

‘(E) the steps taken by the United States to respond to such activity.

‘(3) FORM OF REPORTS; PUBLICATION- The reports required under this subsection shall be–

‘(A) submitted in unclassified form, but may contain a classified annex; and

‘(B) published in the Federal Register.’.

(f) Clarification and Expansion of Definitions- Section 14 of such Act is amended–

(1) in paragraph (13)(B)–

(A) by inserting ‘financial institution, insurer, underwriter, guarantor, any other business organization, including any foreign subsidiary, parent, or affiliate of such a business organization,’ after ‘trust,’; and

(B) by inserting ‘, such as an export credit agency’ before the semicolon at the end; and

(2) by amending paragraph (14) to read as follows:


‘(A) IN GENERAL- The term ‘petroleum resources’ includes petroleum, petroleum by-products, oil or liquefied natural gas, oil or liquefied natural gas tankers, and products used to construct or maintain pipelines used to transport oil or compressed or liquefied natural gas.

‘(B) PETROLEUM BY-PRODUCTS- The term ‘petroleum by-products’ means gasoline, kerosene, distillates, propane or butane gas, diesel fuel, residual fuel oil, and other goods classified in headings 2709 and 2710 of the Harmonized Tariff Schedule of the United States.’.

(g) Conforming Amendments-

(1) MULTILATERAL REGIME- Section 4 of such Act is amended–

(A) in subsection (b)(2), by striking ‘(in addition to that provided in subsection (d))’; and

(B) by striking subsection (d) and redesignating subsections (e) and (f) as subsections (d) and (e), respectively.

(2) IMPOSITIONS OF SANCTIONS- Section 5(b) of such Act is amended by striking ‘section 6’ and inserting ‘section 6(a)’.

Shebaa Farms key to Levant hydro-diplomacy

Analysis: Shebaa Farms key to Levant hydro-diplomacy

IRIN news

Goats drink from a pond on the edge of the disputed Shebaa Farms area claimed by Lebanon August 25, 2008.

Photo: Hugh Macleod/IRIN
Farmers in Lebanon’s eastern Bekaa Valley, where outdated irrigation systems causes water shortages despite the country’s above-average rainfall

BEIRUT, 10 September 2009 (IRIN) – The politics of the Israeli-occupied Shebaa Farms, a rugged sliver of mountainside wedged between Lebanon, Israel and Syria, have long overshadowed what some Lebanese environmentalists call “the real issue” of the disputed area: its water resources.

Now activists are calling for hydro-diplomacy to take precedence over political manoeuvring as the most effective solution to one of the key stumbling blocks to Middle East peace.

Rising Temperatures Rising Tensions, a report published in June by the International Institute for Sustainable Development (IISD), funded by the Danish Ministry of Foreign Affairs, considers water to be a major trigger for conflict in the Middle East, the world’s most water scarce region.

''There will not be enough water for our generation or the next. We will see social, economic, political and military conflicts – and in that order – within the next 20 years''

Lebanon and Syria say the Shebaa Farms, measuring just 22sqkm, is Lebanese territory, though the UN has ruled it part of the Syrian Golan Heights, which lie just to the east, across water-rich Mount Hermon.

Both the Golan and Shebaa were occupied by Israel during the Six-Day War of 1967 and the Israelis say disengagement from Shebaa can only come under a peace deal with Syria and withdrawal from the Golan.

However, Fadi Comair, director-general of Hydraulic and Electric Resources at the Lebanese Ministry of Energy and Water, argues there is more to Israel’s occupation of Shebaa than military-strategic concerns: “Israel’s occupation of the Shebaa Farms has to do with control of its water.”

Hezbollah, the Lebanese militant group that fought Israel to a bloody stalemate in 2006, has the liberation of Shebaa as one of its strategic objectives.

Photo: Hugh Macleod/IRIN
UN peacekeepers patrol the Blue Line, the boundary between Lebanon and Israel, near the water-rich Shebaa Farms

Water scarcity

Meeting the water needs of their rapidly growing populations has long been an existential challenge for the governments of the arid Middle East. Climate change is making that challenge more urgent and acute.

Israel, Jordan and the Occupied Palestinian Territories (OPT) all fall well below the internationally accepted threshold of 1,000 cubic metres of water per person per year (cmwpy). According to the IISD, Israel has natural renewable water resources of 265 cmwpy, Jordan 169, and OPT just 90. Only Lebanon and Syria have water surpluses, with Lebanon having a potential of 1,220 cmwpy and Syria 1,541.

Yet supply is dwindling rapidly. By 2025 water use in Israel is estimated to fall to 310 cmwpy, while the country’s own Environment Ministry has warned that water supply may fall by 60 percent of 2000 levels by 2100.

River Jordan

The IISD report goes even further, warning that the River Jordan, which is the key supplier of water to Israel, Jordan and OPT, could shrink as much as 80 percent by the end of the century.

Such drastic scarcity makes securing water supplies vital. The River Jordan rises in Mount Hermon, fed by tributaries in the Golan Heights and Shebaa Farms, and flows into the Sea of Galilee, also known as Lake Tiberius, before continuing south where it forms the boundary between Jordan, to the east, and the West Bank. After 320km it empties into the Dead Sea.

Major tributaries of the river include the Hasbani, which flows into Israel from Lebanon, and the Banias, which flows from Syria. The River Dan, which also supplies the River Jordan, is the only river originating in Israel.

Photo: Hugh Macleod/IRIN
Women in the Shebaa Farms village of Kafr Shouba mourn the death of their son, a shepherd shot by Israeli soldiers in March 2006 after straying into the Blue Line area

Water wars

The absence of hydro-diplomacy reflects conflict in the region. In 1965, Syria and Lebanon began the construction of channels to divert the Banias and Hasbani, preventing the rivers flowing into Israel. The Israelis attacked the diversion works, the first in a series of moves that led to a regional war two years later.

In 2002, when the Lebanese constructed a pipeline on the River Wazzani intended to supply households in southern Lebanon with water, Israeli Prime Minister Ariel Sharon declared the action a causus belli. In the July War of 2006, Israeli warplanes targeted southern Lebanon’s water network.

Bassam Jaber, a water expert at Lebanon’s Ministry of Energy and Water, argues the Shebaa is critical to Israel’s water needs, “especially because fresh water is critical when all sources within Israel are salty. The flows from the area help to regulate the saltiness of Lake Tiberius”.

And it is not just the direct overland flow that the Shebaa provides Israel. According to the Lebanese Water Ministry’s Comair, 30-40 percent of the River Dan’s water flows into it through underground supplies originating in the Shebaa. “Israel is worried that if Lebanon gains control of the Shebaa, it can then control the flow to the Dan river,” said Comair.


As one of only eight states to have ratified the 1997 UN Convention on the Law of Non-Navigational Uses of International Watercourses, Lebanon is calling on Israel to do the same.

“Israel is not a signatory to the relevant conventions on water, which is a big problem since they are at the centre of the issue of equitable use of water and reasonable sharing,” said Comair.

Israel has already shown that water can play a role in peacemaking. Its 1994 peace agreement with Jordan included a commitment to transfer 75 million cubic metres of water per year to Jordan in return for secure borders to the east.

Lebanon’s Ministry of Energy and Water is now calling for a regional water basin authority for the River Jordan, which would include Lebanon, Syria, Jordan, Israel and OPT. “How can you reach any agreements on the equitable sharing of international watercourses if there is no cooperation?” asked Comair.

Photo: Annasofie Flamand/IRIN
A view from southern Lebanon across the Israeli-occupied Syrian Golan Heights, from where the Jordan River rises

Water solutions for all?

Not all are convinced Israel’s occupation of Shebaa is primarily about securing water.

“Water is no doubt one aspect of the socio-political conflict, but it is not the main driver,” said Mutasem el-Fadel, director of the Water Resources Center at the American University of Beirut.

He points to several projects currently being studied that could solve Israel’s water needs, without requiring continued occupation of the Shebaa, such as the Red Sea-Dead Sea Canal Project, the Mini-Peace pipeline from Turkey, wastewater reclamation plans and desalination projects.

“All combined they can be the water solution for all five countries in the area,” said el-Fadel.

But in the absence of hydro-diplomacy between Israel and Lebanon, the continued Israeli occupation of the Shebaa Farms will remain a key trigger to renewed conflict between the two countries.

“There will not be enough water for our generation or the next,” said Comair. “We will see social, economic, political and military conflicts – and in that order – within the next 20 years.”

Billionaire club in bid to curb overpopulation

Billionaire club in bid to curb overpopulation

America’s richest people meet to discuss ways of tackling a ‘disastrous’ environmental, social and industrial threat

John Harlow

SOME of America’s leading billionaires have met secretly to consider how their wealth could be used to slow the growth of the world’s population and speed up improvements in health and education.

The philanthropists who attended a summit convened on the initiative of Bill Gates, the Microsoft co-founder, discussed joining forces to overcome political and religious obstacles to change.

Described as the Good Club by one insider it included David Rockefeller Jr, the patriarch of America’s wealthiest dynasty, Warren Buffett and George Soros, the financiers, Michael Bloomberg, the mayor of New York, and the media moguls Ted Turner and Oprah Winfrey.

These members, along with Gates, have given away more than £45 billion since 1996 to causes ranging from health programmes in developing countries to ghetto schools nearer to home.

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They gathered at the home of Sir Paul Nurse, a British Nobel prize biochemist and president of the private Rockefeller University, in Manhattan on May 5. The informal afternoon session was so discreet that some of the billionaires’ aides were told they were at “security briefings”.

Stacy Palmer, editor of the Chronicle of Philanthropy, said the summit was unprecedented. “We only learnt about it afterwards, by accident. Normally these people are happy to talk good causes, but this is different – maybe because they don’t want to be seen as a global cabal,” he said.

Some details were emerging this weekend, however. The billionaires were each given 15 minutes to present their favourite cause. Over dinner they discussed how they might settle on an “umbrella cause” that could harness their interests.

The issues debated included reforming the supervision of overseas aid spending to setting up rural schools and water systems in developing countries. Taking their cue from Gates they agreed that overpopulation was a priority.

This could result in a challenge to some Third World politicians who believe contraception and female education weaken traditional values.

Gates, 53, who is giving away most of his fortune, argued that healthier families, freed from malaria and extreme poverty, would change their habits and have fewer children within half a generation.

At a conference in Long Beach, California, last February, he had made similar points. “Official projections say the world’s population will peak at 9.3 billion [up from 6.6 billion today] but with charitable initiatives, such as better reproductive healthcare, we think we can cap that at 8.3 billion,” Gates said then.

Patricia Stonesifer, former chief executive of the Bill and Melinda Gates Foundation, which gives more than £2 billion a year to good causes, attended the Rockefeller summit. She said the billionaires met to “discuss how to increase giving” and they intended to “continue the dialogue” over the next few months.

Another guest said there was “nothing as crude as a vote” but a consensus emerged that they would back a strategy in which population growth would be tackled as a potentially disastrous environmental, social and industrial threat.

“This is something so nightmarish that everyone in this group agreed it needs big-brain answers,” said the guest. “They need to be independent of government agencies, which are unable to head off the disaster we all see looming.”

Why all the secrecy? “They wanted to speak rich to rich without worrying anything they said would end up in the newspapers, painting them as an alternative world government,” he said.

In Wal-Mart’s Image

In Wal-Mart’s Image

The “values” of the largest private-sector employer in the U.S. are shaping our national economy — and that’s a very bad thing.
Harold Meyerson | September 11, 2009
In Wal-Mart's Image
(AP Photo)

The Retail Revolution: How Wal-Mart Created a Brave New World of Business by Nelson Lichtenstein, Metropolitan Books, 311 pages, $25.00

Buying Power: A History of Consumer Activism in America by Lawrence B. Glickman, University of Chicago Press, 403 pages, $45.00

The story isn’t part of the official Wal-Mart creation epic, but it tells us almost all we need to know about the company’s approach to the interests of its employees and the laws of the nation. Around the time that the young Sam Walton opened his first stores, John Kennedy redeemed a presidential campaign promise by persuading Congress to extend the minimum wage to retail workers, who had until then not been covered by the law. Congress granted an exclusion, however, to small businesses with annual sales beneath $1 million — a figure that in 1965 it lowered to $250,000.

Walton was furious. The mechanization of agriculture had finally reached the backwaters of the Ozark Plateau, where he was opening one store after another. The men and women who had formerly worked on small farms suddenly found themselves redundant, and he could scoop them up for a song, as little as 50 cents an hour. Now the goddamn federal government was telling him he had to pay his workers the $1.15 hourly minimum. Walton’s response was to divide up his stores into individual companies whose revenues didn’t exceed the $250,000 threshold. Eventually, though, a federal court ruled that this was simply a scheme to avoid paying the minimum wage, and he was ordered to pay his workers the accumulated sums he owed them, plus a double-time penalty thrown in for good measure.

Wal-Mart cut the checks, but Walton also summoned the employees at a major cluster of his stores to a meeting. “I’ll fire anyone who cashes the check,” he told them.

Besides its Dickensian shock value, this story — told by Nelson Lichtenstein in his new book about Wal-Mart — points to a phenomenon of wider significance. The company that was willing to break the law to avoid paying the minimum wage is now the largest private-sector employer in the nation and the world, with 1.4 million employees in the United States and 2 million overall, more than 6,000 stores, and revenues that exceed those of Target, Home Depot, Sears, Kmart, Safeway, and Kroger — combined. By virtue of its size and its mastery of logistics, Wal-Mart is able to demand low prices from its thousands of suppliers and thus inflict low wages on their employees. Its low prices have also forced reductions in wages and benefits at the unionized supermarkets with which it threatens to compete.

As the unionized General Motors was big enough to set the pattern for the employment of nonprofessional Americans in the three decades following World War II, Wal-Mart is now so big it is setting the pattern today. Each created a distinct national buying public for its goods that was far larger than its immediate work force: in GM’s case, workers who could afford to buy new cars; in Wal-Mart’s, workers who could afford to shop nowhere except Wal-Mart. With Wal-Mart’s rise, the same traditional values that underpinned Sam Walton’s cheating and threatening of his workers — contempt for Yankee laws and regulations, and a preference for the authoritarian, low-wage labor system of the South — have become more the norm than the exception in America’s economic life.

For the past year, Americans have focused, and understandably so, on the ways in which Wall Street has misshaped the American economy, how finance has grown large over the past 20 years as manufacturing has shrunk. But the rise of finance is just half the story; it takes the rise of retail to complete the tale. Both Wall Street and Wal-Mart played a central role in the deindustrialization of the United States: 40,000 U.S factories were closed between 2001, when China was admitted to the World Trade Organization, and 2007, during which years Wal-Mart’s Chinese imports tripled in value from $9 billion to $27 billion.

The rise of Wal-Mart, and the national economy it has shaped in its image, is a story that Lichtenstein, a professor of history at the University of California, Santa Barbara, is eminently suited to tell. He’s also the author of The Most Dangerous Man in Detroit, a biography of United Auto Workers President Walter Reuther that is one of the definitive accounts of the rise of the unionized, high-wage, mid-20th-century economy that Wal-Mart has done so much to destroy. The Retail Revolution now tells the story of how Walton, strongly abetted by Ronald Reagan, pulled down the world that Reuther, strongly abetted by Franklin Roosevelt, created. It is not the definitive scholarly history that Lichtenstein’s Reuther biography is, but it is surely the best account we have of Wal-Mart’s metamorphosis from a backwater chain to the nation’s dominant corporation, and it contains more direct reporting than is normally found in the works of historians. The story of Walton’s minimum-wage evasion came from Lichtenstein’s interviews with former Wal-Mart executives.

Lichtenstein’s account of Wal-Mart’s rise isn’t uniformly negative. Walton and his top lieutenants, following in the footsteps of such American economic icons as Henry Ford, can point to hugely important business innovations that stand alongside their social primitivism. As Ford revolutionized production, so Walton revolutionized distribution and logistics — the business of getting the product from the plant to the store in the fastest, cheapest, most efficient way possible. Well before other retailers, he understood the potential of the barcode for tracking the supply and demand for products. He changed warehouses from giant storage rooms to distribution centers where products arriving from ports or plants were turned around and delivered to stores within a day. He invested in more computer technology and communications satellites than his rivals, and developed better data on which goods moved and how best to sell them than their manufacturers (even venerable firms like Proctor & Gamble) possessed. Once Wal-Mart became America’s retail giant, he compelled suppliers like P&G to seek Wal-Mart’s approval for new products and its help in crafting them. The data also enabled Wal-Mart to manage its stores from its corporate headquarters in Bentonville, Arkansas, reducing store managers to foremen under constant pressure to sell more and spend less.

But Wal-Mart’s distinctive identity came from fusing its brilliant use of new technology with its rigorous adherence to the old exploitative Southern labor practices. The Southern traditionalism of Walton and his lieutenants dictated that the stores’ managers would be men and its salesclerks women, and no federal statute or class-action lawsuit has been able to dethrone that tradition yet. Wal-Mart is also famously, pathologically anti-union, but its antipathy toward its nonunion work force is no less remarkable. The firm prohibits overtime pay (even before the current recession, the average Wal-Mart employee worked 34 hours a week), offers health-insurance plans that fewer than 50 percent of its U.S. workers opt to purchase (the most common plan contains a $3,000 annual family deductible, a great deal of money for workers making a little more than the minimum wage), and keeps its labor costs down to 10 percent of sales, in contrast to levels of 11 percent to 13 percent for its discount retail competitors.

Annual turnover among employees is huge — 40 percent in most recent years, though in the late 1990s, when unemployment was low, it reached a staggering 70 percent. Wal-Mart seldom discharges employees, an act that would require it to pay penalties if the government found a pattern of excessive firings. Rather, it simply gives its workers such unwieldy schedules and such impossible work loads that quitting, like low prices, is an everyday constant. So, as Lichtenstein documents, is employee theft — a problem that Wal-Mart addressed by locking in its night shifts until public exposure brought that practice to an end.

Wal-Mart has succeeded brilliantly throughout the NAFTA nations. It has become the biggest retailer in both Canada and Mexico (and it staved off unionization of its Canadian stores by closing down the one whose workers voted to go union). But it had to withdraw from Germany, where the laws regulating hours and wages made its normal business practices impossible, and has also fared poorly in Japan. As Lichtenstein notes, in nations such as Germany and Japan, where high disposable incomes are “shared relatively equally throughout the population, Wal-Mart’s EDLP [Every Day Low Prices] policy is not so much of a trump card.” Wal-Mart’s efforts in Germany were not helped by the fact that its policy of encouraging workers to call in anonymously to report on misdeeds (including union sentiments) of their fellow workers reminded Germans of the late, unlamented Stasi.

Wal-Mart’s more serious failure of market penetration remains its inability to break into America’s major coastal cities or Chicago. There, the specter of its superstores — stores that include supermarkets, whose success has already given Wal-Mart 30 percent of the U.S. retail food market — poses a direct threat to unionized supermarket workers. In 2003, Southern California supermarkets, after decades of mutually profitable labor relations, told the United Food and Commercial Workers that they would have to reduce wages and benefits to compete with Wal-Mart, and, after breaking the union’s strike, imposed a contract in which new hires were offered not the traditional health insurance package but one modeled on Wal-Mart’s. At the time, the proportion of Southern California grocery workers with health insurance stood at 94 percent; by 2007, it had declined to 54 percent.

After that defeat, the unions and its allies fought back, convincing city councils and governmental agencies in big East Coast and California cities to use zoning ordinances and bans on big-box stores to keep Wal-Mart out of town. Public indignation over the company’s labor practices has also contributed to its inability to enter blue-state markets.

With its stock price stagnant for nearly a decade due in part to its failure to expand to blue-state America, and with Democrats now in control in Washington, Wal-Mart is currently undergoing a great cosmetic makeover. It has announced it will develop a green profile for all the products it sells and has even proclaimed its support for an employer mandate in any emerging health-reform package. What it is not willing to relinquish is its die-hard opposition to unions and labor-law reform, its existential commitment to the Southern model of labor relations. Wal-Mart cannot thrive in a nation where prosperity is broadly shared, and it will do all it can to keep that from happening.

That wal-mart has been waylaid in part by the political expression of indignant consumers should come as no surprise to readers of Lawrence Glickman’s Buying Power: A History of Consumer Activism in America. As Glickman, a history professor at the University of South Carolina, makes clear, Americans have a long, if largely forgotten, history of supporting political causes by withdrawing their patronage from certain stores or products — including efforts by abolitionists to establish stores that sold clothing free from the taint of plantation cotton, and by Southern slavers to boycott products made in the North. Of particular interest are the efforts that Glickman has uncovered of urban Southern blacks to resist the coming of Jim Crow by boycotting newly segregated municipal streetcar lines at the turn of the century — including a Montgomery, Alabama, streetcar boycott 55 years before Rosa Parks sat down in one of the front seats of a Montgomery bus.

But it is one thing for Glickman to rescue these campaigns from history’s dustbin and quite another for him to give them an importance that most of them do not deserve. In the battles for the abolition of slavery, for worker rights and for civil rights, the actions of sympathetic consumers seldom amounted to more than a sideshow. Glickman sometimes makes too much of them, and when he turns his attention to the battle for consumer rights during the 1960s and 1970s, he accords it a centrality that other historians of the time might have trouble recognizing. Ignoring the pivotal role that the politics of race played in the demise of the mid-20th-century Democratic majority, he writes that “Great Society liberalism was defeated in large measure because of its association with consumerism.” What we learn from this assessment is that Glickman may have been immersed in this topic for too many years.

The Recession’s Human and Environmental Impacts

The Recession’s Human and Environmental Impacts

by Emily Spence

Too often news coverage focuses on discreet current events at the expense of a more synthetic approach to notable happenings. While it is important that the public learns of major incidents in the world as they take place, sometimes this can lead to some observers “not seeing the forest for the trees.”

On account, it might be easy to miss the connection between the global recession (and possible future depression) with the ongoing decline of environmental well-being and increase in human population. All the same, these three areas are deeply intertwined. Here are a few details concerning the relationship.

Let’s start with the present economic decline: Part of the reasons that there are global jitters involving the weakening of the $ USD is that it provides a means to assess worth of other holdings. In short, many countries and individuals, directly and indirectly, assign their own fiscal strength based on the dollar’s standard. This is especially the case when they are carrying the US public debt, which is currently well over $9 Trillion dollars.

In addition, practically all of the US national debt owned by foreigners is held by private investors except for central banks, which hold 64%. Further, the size of the foreign-owned portion of this amount owed is practically three times the total amount of currency in circulation! Indeed, the numbers given by the Federal Reserve for June 2007 put its amount at US $755 billion.

In tandem, the average US family’s credit card balance is now almost 5 % of its annual income (with a median U.S. household income presently at $43,200), more that 40 % of American families spend more than they earn, personal bankruptcies in US have doubled in the last decade and the overall consumer debt has reached $2.46 Trillion as of June 2007 (excluding the $440 billion of revolving home equity loans, $600 Billion owed for second mortgages and an overall $9 Trillion in mortgage debt). As such, the total US consumer revolving debt grew to $904 Billion last summer.

Why has this happened? In part, it is because real wages of most workers languished or declined since 1975. So, many Americans reacted by taking on loans to maintain or raise their living standards.

As Polonius, Shakespeare character in Hamlet cautioned, “neither a borrower, nor a lender be” and, certainly, there is trouble with being either. However, everyone, even an individual with neither role, can be in trouble when the value of the currency that he maintains plummets.

So, why is the American money losing clout? The answer is partly dependent upon the way that it gained worth in the first place and, indeed, its relative merit is created by any number of factors. These include the country issuing it having a robust economy (a trade surplus rather than being a debtor nation), having something of universal worth tied to it for which it stands, such as precious metal from which the $ USD was effectively severed in 1971 when the US government refused to exchange a relative small sum of dollars held by several other governments for gold, or some other coveted resource for which the currency alone must be traded, something like OPEC petroleum. (The latter contingency is the reason that some dollar holders find the Iran Bourse, with its plans to reject the $ USD as payment for oil, threatening and suspect that the recent cable failures were a deliberate attempt to postpone its arrangements being set in place.) In short, without a monetary standard having it’s worth assigned by being attached to something deemed of unquestionable worth, it tends to have uncertain value.

Meanwhile, the US economy, itself, can’t grow. Partly, this is due to globalization of industry, which has created jobs in second and third world countries by taking many of them away from Americans, who cannot continue their high rates of consumption of products due to the increasing deficit of employment opportunities, diminished fiscal returns, raising prices for goods (including staples) and advancing inflation.  So, it is no wonder that, while oil and food prices are rising, so are the number of home foreclosures while home worth, in general, is depreciating across the board.

Simultaneously, it is no surprise that US wages are kept depressed by the existence of a proliferation of out-of-work laborers relative to the smaller amount of jobs in existence. At the same time, the already huge homeless population, as would be expected, is skyrocketing. In fact, the number of persistently homeless Americans, ones with repeated episodes or who have been homeless for long periods, involves between 847,000 to 3,470,000 individuals, many of whom are children and unemployed veterans. Posed another way, close to 3.5 million people, of whom roughly 1.35 million are minors, are likely to experience homelessness in any given year in the US (National Law Center on Homelessness and Poverty, 2007).

At the same time, further outsourcing of labor guarantees that more jobs will be cut with the outcome that US citizens will possess even less money to buy either locally manufactured or imported goods. In relation, economic growth in other countries is, also, due to slow down, as exports are no longer quickly snapped up in the US. However, this consequence was long set to develop, given that, since 2000, a total of 3.2 million — one in six factory jobs — have disappeared from the American shores and the lowest rate of US job growth in four years occurred as recently as December 2007 when, simultaneously, the unemployment rate shot up 0.3 percentage points to almost 5 %. By factoring in huge losses in other work positions — such as the ones related to construction, fiscal services and retail sales — it is easy to see that American spending, even for relatively inexpensive foreign made goods, was bound to take a nosedive. How could it not do so when adequate job provision and reasonable salaries have, in effect, largely disappeared?

All the same, this overall arrangement has not been bad for those in the top economic tier as their capacity to pay meager second and third world wages, coupled with receipt of high income from finished products acquired by first world customers, has created an economic boon. Indeed, by mechanisms such as these, the ranks of millionaires and billionaires, during the past few years, has greatly expanded. (The number of millionaires in the world swelled to 8.7 million and the number of billionaires around the world rose to a record 793, the latter of which hold $2.6 trillion in assets and personally garner an extraordinary amount of resources.) So have the overall profit margins of many transnational companies, such as the pharmaceutical, oil and other industrial giants.

All considered, there is no way that many Americans, even with the minimum wage set at a measly $5.85/ hour, can compete with overseas $1/ day wages, nor subsume the fundamental costs associated with their rents, mortgages, the increase in food and oil prices, rising medical insurance payments and other basic expenses. On account, an overall decline in purchases has, recently, taken place in the US and, while this is not good for suppliers, it does give the environment a break.

The reason that it does is that the slow down in business, while ominous from an economic standpoint, is good for the environment, that cannot continue to be assaulted at an ever higher level in order to make an ever higher financial gain off of its largely finite resources. As it is, ecologists anticipate that, if present rates of deforestation continue, rainforests will disappear from the planet within this century, which would kill off an inordinate amount of the world’s animal and plant species while effecting global climate in unpredictable ways. (Presently, the global annual rate of deforestation is .8 percent.)

The outlook for the ocean life is just as grim with currently 71-78 % of it being ‘fully exploited’, ‘over exploited’ or ‘significantly depleted’ according to the United Nations. In addition, many types of aquatic plants and animals are on the verge of total extermination and 90 % of all big fish are already gone.

Add to this that, according to recent UN studies, arid lands prone to desertification cover more than one third of the planet’s landmass, which supports more than twenty percent of the human population. While requirements from these delicate environments grow, they increasingly become incapable of supporting life. As such, the global rate of desertification is rapidly escalating, although the actual rates vary by locality.

All of this in mind, we cannot keep expecting ever greater economic growth, nor an ever enlarging human population. Instead, we collectively need to drastically cut back on personal resource use, curtail manufacturing (due to stresses on the environment caused by global warming and other industrial impingements) and face a world that is likely to provide a dwindling supply of jobs.

In actuality, we cannot even endure a 5.5 to 7 degree F. (3 to four degree C.) rise in temperature due to carbon loading from industry and transportation of goods. This is because our doing so would all but ensure that human life would be unsupportable over much of the globe and likely prevent pollination for many major crops. Along with the resultant changed rainfall patterns, the lack of pollination would prompt a tremendous decrease in food production.

Regardless of whether this extreme heat occurs or not, the global population, according to the International Data Base, is expected to increase from 6 billion in 1999 to 9 billion by 2042, an increase of 50 percent that will require a mere 43 years. This, of course, has alarming implications for the maxed out natural world (including its water supplies), the labor market, food availability, product price and ever higher global warming.

So, just how are we to cope with these assorted dismal factors? First, we need to recognize the absolute need to stymie growth of GDP in every country, proactively delimit population and reduce general consumption. Put another way, we cannot have any positive outcomes from expecting myriad environments to yield up an unlimited cornucopia of goods, especially as our very lives depend on our severely lowering greenhouse gases and maintaining a large diversity of healthy intact natural environments. Second, we must, quickly, develop a wide array of “green jobs” to make up for the scarcity of ones that will come to pass on account of policies mandating deliberate curtailment of energy intensive manufacturing. Third, we need to quickly create business capable of providing, on an extensive basis, electricity derived from benign alternatives to fossil fuels.

Further, it would be helpful for people to form into small scale, self-sustaining communities to ride through the recession. Indeed, their establishment would, without doubt, help with the transition away from transnational sweatshops, provide regional employment and curb reliance on oil as less goods, including necessities, would require extensive transportation if produced locally.

The coalescence of a recession, mounting population, peak oil, mass extinction, urgent water shortages, climate change and other disastrous environmental impacts challenge us to take immediate action. Our doing so need not be disastrous if we collectively begin to make the essential changes on the scale needed. If we do not, the results could likely be catastrophic on a scope barely imagined by any of us. With firm resolve, let us all begin to undertake the critical modifications at once.

Emily Spence is an environmental and human rights advocate living in central Massachusetts.

The Widening Gap In America’s Two Tiered Society

The Widening Gap In America’s Two Tiered Society

Posted by thomaspainescorner on September 6, 2009


Artwork by David Dees

By Emily Spence


Americans, particularly ones from the middle class, need to realize that there are no core entitlements imparted by their government representatives, nor any other sources. They have none and should adjust their expectations accordingly.

If the U.S. populace somehow imagines that its members are viewed any differently than any other populations across the world that are used to produce maximal profits for the top economic class, there’s a rude awakening in store ahead. Further, most legislators simply do not care whether middle and lower class interests are or aren’t well served as long as they, themselves, can somehow make out well in the times ahead.

Besides, why should any Americans feel that they deserve to be treated more favorably by the transnational moneyed elites and their government backers than their counterparts across the rest of the world? As A. H. Bill reminds: “The richest 225 people in the world today control more wealth than the poorest 2.5 billion people. And… the three richest people in the world control more wealth than the poorest 48 nations.”

Occasionally someone making a staggering amount of money in a crooked sort of way might raise a few officials’ eyebrows or induce a mild reprimand. In addition, he might, occasionally, be singled out as the token fall guy so as to be made into a warning example as was Bernie Madoff. Most of the time, though, no action is usually undertaken to correct the situation when directors of major companies carry out activities that are, obviously, right on or over the edge of fraudulent practices.

As Barack Obama, perhaps hypocritically, chastened, “Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productive and sound business practices. We let the special interests put their thumbs on the economic scales.”

Yet, he, himself, showed no hesitation during his election campaign over collecting $40,925 from the bailout fund recipient and nearly bankrupt investment house Bear Stearns, $161,850 from the bailout fund recipient and mortgage underwriter Morgan Stanley, as well as benefits from countless other institutions that have received government favors at taxpayers’ expense. As such, it’s hard in actuality to deliver more than just a mild verbal rebuke about these organizations’ modus operandi if one picks up a personal windfall from not meddling. Thus, the financial corruption continues at all levels of government.

A case in point is the self-serving oil trader Andrew Hall. His relationship with Citigroup’s (C.N) Phibro energy-trading unit brought him approximately $100 million in 2008 despite that his parent company registered a net deficit of $18.7 billion for the same year and received $45 billion in TARP funds.

However, it’s been pointed out that he could moderately adjust his current level of gain and continue to maintain the same procurement pattern if he manages to stay out of the limelight. If he follows this plan in the near future, his earnings and bonuses won’t likely duplicate the $250 million personal compensation that he’d received in the past five years. Yet, he could still make out quite well all the same!

In any event, one has to question such lavish rewards considering that Citigroup suffered a 95% loss of its share value since 2007 in relation to which Phibro “occasionally accounts for a disproportionate chunk of Citigroup income.” At the same time, the U.S. government will shortly be the owner of 34% of this company. Put more bluntly, is Andrew Hall’s personal prosperity and propensity to add to his private art collection the best use of taxpayers’ funds?

As long as he’s a lavish beneficiary, would he care if they weren’t? As the economist John Kenneth Galbraith once suggested: “The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.” Naturally, Andrew Hall aims to keep such a cozy arrangement intact.

Besides, his personal take is relatively inconsequential. It’s a mere pittance contrasted to the almost two and a quarter billion dollars grand total — roughly $2,217,800,000 — that the top ten U.S. business moguls collectively grossed as their own recompense in 2008. [1]

At the same time, it cannot not be expected, in a market based economy, that political influence is not also a purchased commodity. Clearly, opinions are bought and sold just as easily as are any other products and services with payment being campaign funds, such as Obama’s, from big industry; offers of high paying future jobs and other lavish advantages dangled as bait.

On account of this kind of shady deal, tax subsidies connected to executive pay amounted to $20 billion in 2008 according to United for a Fair Economy (UFE) and Institute for Policy Studies. (Imagine if this money, instead, were allocated towards improvements in public education, provision of a universal heath-care plan or any number of other programs that could uplift the American public as a whole.)

During the same period, average CEO pay, at $10.54 million, was 344 times higher than typical worker pay. This disparity, also, is generally indicative of a trend that increasingly funnels wealth upward rather than having it more equitably distributed across class lines.

Another sign of this ascendant drift can be found in the change between the first Forbes 400 report (1982) and its 2008 version. In 1982, an entrepreneur only needed slightly more than $100 million dollars to get on the list. By 2008, he wouldn’t be in the top 400 unless he’d garnered at least $1.3 billion. In other words, so much more wealth shot upward in the last twenty years that $100 million now is almost viewed as chump change in comparison to the new top gains.

In addition, Congressional reports have indicated that widespread tax avoidance tricks, like use of overseas banks that do not report amounts to the IRS, have cost taxpayers more than $2 billion annually. Certainly, these lost moneys could well be used to help people less fortunate. For example, the hidden $2 billion could be used to create job training programs for any of the one in nine Americans currently forced to rely on food stamps as an alternative to starvation.

To be eligible for such aid, a family of four, for example, has to have no more than $2,389 as its gross monthly income or 130% of the official poverty level and no more than $1,838 net monthly income or 100% of the poverty level. (There are few deductions and exceptions to the requirements allowed, along with limits for owned property value imposed, that further determine whether one meets qualifications.)

In other words, a typical household of four cannot receive this help if the gross income for the foursome exceeds $28,668 annually and, for an individual, the gross not to be surpassed is $14,088. Additionally, recipients cannot have a great deal of assets with a clearly defined, too high level of worth.

As such, they have to be nearly broke across the board. Meanwhile, it’s clearly disgraceful that more than 27,651,388 Americans are so extremely poor they require food assistance to try to make ends meet.

Even that help, though, is often not enough to prevent further poverty and many folks are unable to avoid outright destitution across the so-called wealthy U.S.A. So next, they lose their homes… and they lose them in droves.

The huge portion of Americans who do so are staggering: While the number of U.S. foreclosure filings climbed by more than 81% in 2008, the total is still sharply rising in 2009. In relation, 300,000 homes foreclosed per month from March to May in 2009 and 1.8 million homes represented the anticipated total for the first half of the year. With such a backdrop, one out of every 398 homes received a filing in April and a whopping 6.4 million homes are anticipated to be in foreclosure by mid-2011. Simultaneously, a record number of individuals, also, applied for bankruptcy.

In a similar vein, the jobless rate, despite some minor dips downward, is still seemingly on the rise. Therefore, the current number of out of work adults could well exceed 20% if all of the hopeless ones, who are no longer collecting unemployment benefits and who gave up looking for opportunities, are added into the mix.

Moreover, they will not be able to jumpstart the economy so long as they cannot find work, and especially work at a living wage. After all, how can anyone make lots of purchases or take out bank loans if he has no reasonable income? So it follows that even more retail and wholesale stores, along with banks, will go belly up.

At the same time, the supply side of the market, itself, has created labor troubles. This is because goods have been overproduced. Consequently, there is overstock piled high in warehouses and shipping containers across the world ready to resume its path to the market once the spending reinitializes. However, spending cannot resume as long as the money has largely flowed to the top economic tier and away from average former and low wage workers, who can not expect to have decent paying jobs to create more goods until the current product glut diminishes.

In other words, consumers can’t buy much when money’s tight and work won’t be provided when there’s an oversupply of merchandise largely produced in second world sweatshops whose workers are paid so little that they hardly can put food on their own tables let alone make many more extravagant purchases — ones like toothpaste, soap and shampoo. Besides, they, too, face employment opportunities diminishing because worldwide sales are down for many of the products that, previously, their companies too copiously produced.

Concurrently, the bailouts, oriented towards fixing the credit side of the equation, are not addressing these sorts of supply side problems. Therefore, they will not keep the financial collapse from worsening.

Alternately put, TARP and other payoffs to the self-serving, unconscionable banksters and Wall Street high rollers largely responsible for the downturn will not produce an abundance of jobs. So the reasonable salaries, ultimately needed to buy the wares to cause industrial output to resume, won’t materialize any time soon.

It’s rather simple to understand, really. So why don’t Ben Bernanke and his colleagues seem to notice that massive job loss, itself, needs to be addressed posthaste? Why hasn’t a public works program been initiated? Why don’t they grasp that the act of offshoring all kinds of American jobs to maximize profits at the top tier does not ensure that products will be avidly snapped up by a greatly unemployed and underemployed public?

Since they, apparently, don’t understand, the downturn, with a few small upward twists, will remain in its plunging slide, which in turn will create further layoffs. All the while, the über-wealthy and their corporate supporters, such as most members of Congress, will continue to pamper themselves with capital largely derived from struggling taxpayers and massive loans that raise the federal deficit.

More to the point, how could the slump not last when the affluent elites gamble away huge fortunes comprising of their own and others’ money while manufacturing bubbles and Ponzi schemes in the process? How could anything change when they keep amassing more and more assets for themselves while indifferent to their impact on society as a whole?

Such practices as theirs, obviously, cannot sustain the American middle and under classes and it cannot buoy up the utmost bottom rung either. On account, scores of individuals of all ages continue to wind up in tent cities or ensconced on public park benches. (Supposedly, families with children represent the fastest growing subset of the homeless population in the U.S.A. at present and the average age of a homeless person is nine years old.)

When the upper-crust keeps getting richer by taking an ever greater portion of the overall wealth and government schemes assure that the process continues, nearly everyone else becomes increasingly cash poor. When every now and then big investors suffer hefty losses, the government steps in to shore them up again and again. However, this practice, clearly, does not help the populace in general. The evidence that it does not can be seen everywhere across the American landscape and the entire world.

It follows, then, that, “in the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.2%…”, according to G. William Domhoff, a sociology professor at University of California at Santa Cruz. [2]

Another way to measure the shift in wealth is by noting some of the corporate trends, themselves. As Sarah Anderson and John Cavanagh, at the Institute for Policy Studies, point out:

Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs).

The Top 200 corporations’ sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP.

The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10.

The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in ‘’severe” poverty.

While the sales of the Top 200 are the equivalent of 27.5 percent of world economic activity, they employ only 0.78 percent of the world’s workforce. [3]

Especially exemplifying this type of corporate immensity is the Wal Mart company. For example, the Walton heirs have a collective worth of around $65 billion and over 1.7 billion shares, or 43%, of Wal Mart stock in addition to earning $29 billion off the stock price rise alone from November 2007 to June 2008.

Meanwhile, the Waltons pay their jean laborers in Nicaragua approximately $1.50/ day. Simultaneously, their average U.S. workers are given wages of about $12,000/ annum causing a full one half of Wal Mart’s 720,000 employees to qualify for food stamps.

At the same time, the clearly exploitive Wal Mart business model is considered an unqualified success — one that should be more often duplicated across the board. After all, it shows the capitalistic free market with its best possible outcome — profits beyond imagination and the American Dream come true (for the few who manage to take unfair advantage of the actual wealth producers)!

Perhaps, though, the best way to look at the new arrangement between citizens, State and the rising corporate structures is through this superlative summation by Benito Mussolini:

The corporate State considers that private enterprise in the sphere of production is the most effective and useful instrument in the interest of the nation. In view of the fact that private organisation of production is a function of national concern, the organiser of the enterprise is responsible to the State for the direction given to production.

State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved. This intervention may take the form of control, assistance or direct management. [4]

Even if Benito Mussolini’s position has an alarmingly familiar ring to it, no one still should expect U.S. legislators to create laws any time soon that would enact tax code changes in order to remove subsidies that encourage overpayment to executives and that cost taxpayers $20 billion a year. Indeed, nobody should expect any major changes at all that would level the financial playing field, remove a sense of economic injustice or bring back jobs and reasonable wages to the American people.

As Joel H. Rassman, Toll Bros. CFO in 2006, explained about CEO Robert I. Toll’s $20 million compensation while shareholders were suffering a 22% loss: “I have yet to meet the person who has enough money.”

Like Toll, a majority of Congressional representatives, of whom many are multi-millionaires, apparently imagine that they never have quite enough for themselves and justify their dodgy choices accordingly. They, also, know who butters their bread and it surely is not the increasingly impoverished average U.S. citizens, who continue to be the indirect victims of corporate rapacity and pathetic corporate oversight by executives and Congressmen alike.

In relation, one wonders when a significant number of Americans will, finally, recognize that they’ve been had. Put another way by Andrew Greeley: “It should be no surprise that when rich men take control of the government, they pass laws that are favorable to themselves. The surprise is that those who are not rich vote for such people, even though they should know from bitter experience that the rich will continue to rip off the rest of us. Perhaps the reason is that rich men are very clever at covering up what they do.”

This explanation in mind, we need not worry as much about the terrorists from abroad as the terrorists from above and the duped voters who repeatedly fall for political candidates pandering to this broadly malignant upper class. The latter bunch and their sycophantic legislative admirers, more than any foreign guerrillas, are leading the world’s wealthiest nation into ever deeper ruin.

Emily Spence is an author living in Massachusetts. She has spent many years involved in human rights, environmental and social services efforts.


[1] Top CEO collected $702 mln in 2008: US survey – Yahoo! News

[2] Who Rules America: Wealth, Income, and Power (http://sociology.ucsc.edu/whorulesamerica/power/wealth.html).

[3] CorpWatch : Top 200: The Rise of Corporate Global Power (www.corpwatch.org/article. php?id=377).

[4] Benito Mussolini, 1935, Fascism: Doctrine and Institutions, Rome, ‘Ardita’ Publishers. pp. 133-135.

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Anti-War Protest to Shut Down Army Experience Center at Philadelphia Mall

Anti-War Protest to Shut Down Army Experience Center at Philadelphia Mall

When: 1:00 pm Saturday, September 12, 2009

Where: Franklin Mills Mall, Knights Road & Woodhaven Road, Philadelphia PA

Franklin Mills Mall, Philadelphia, PA – Protesters will gather at the site of a pilot project where the U.S. Army uses violent video games and simulated war exercises to attract youth into military service.The Pentagon is committed to establishing Experience Centers in malls across the country. The $13 million, 14,500 square foot facility at Franklin Mills Mall boasts dozens of PCs and X-Boxes with various interactive, military-style shooting games as well as Apache helicopter and Humvee simulators that allow teens to simulate the killing of “Hajis” and “Ragheads,” as local youth refer to “the enemy.”

At 1:00 pm, Pulitzer prize-winning war correspondent Chris Hedges, author of Empire of Illusion: The End of Literacy and the Triumph of Spectaclewill address the crowd outside the mall on Knights and Woodhaven Roads. The renowned war correspondent released this statement, “War is not a game. Weapons are not toys. The essence of war is death. The purpose of war is to extinguish all opposing living systems from theeconomicto thepolitical, social, cultural and finally, familial. Those who entice children to play with mock weapons of war will never allow these children to see what these weapons do to human bodies. They hide from them the fundamental truth about violence and in this way socialize them to kill.”

Organizers of this Saturday’s confrontation are calling on protesters to begin congregating at 11:00 am at the parking lot of St. Luke’s United Church of Christ, 11080 Knights Rd in Philadelphia, less than a mile from the mall. After the 1:00 gathering, a large rally is planned for 2:00 pm at the Army Experience Center (AEC), inside the mall.More than 30 groups have joined forces for this demonstration. Protesters are expected to arrive from states ranging from Virginia to Connecticut.

Throughout the day, protesters will be holding a vigil at the intersection of Knights Road and Woodhaven Road, located between the church and the military arcade.

Elaine Brower, whose son was deployed three times to Afghanistan and Iraq, said, “The AEC is giving guns to 13 year olds, drawing them in with violent video games.As more and more Afghani civilians and US military are being killed in the US occupation of Afghanistan, we’re saying no to these wars.We’ve got to stop the flow of youth into the military where they’re being used to commit war crimes in our name.”

For more information: worldcantwait.net and


And also check out the “official” site of the Army Experience Center.