lunedì 16 dicembre 2013

Meditation on the World Crisis

Meditation on the World Crisis
October 11, 2013
Humanity is in the midst of a cosmic transformation. We are in the End Times. Simultaneously we are experiencing the gestation of the New Earth. Established structures are using modern technology to erect the most pervasive web of totalitarian control in history. Yet this technology is also facilitating the creation of the global village where spiritually awakening souls can find each other instantaneously.
As of this writing, 7,183,840,474 human beings have convened on the planet to witness and participate in the great change, a number that increases by 215,000 daily. The amount of resources and level of effort needed to keep such a number alive and functioning is staggering. In many locations the system of extraction and production has faltered. The gulf between the haves and have-nots seems to be growing. The number of people falling through the cracks can be seen through statistics on growing poverty, malnutrition, competition for food and water, even human slavery and genocide. The suffering is exacerbated by the breakdown of traditional religions and their ability to invoke what may seem to be outmoded systems of beliefs to address unprecedented opportunities and problems. The incredible power of technology also tempts elites, institutions, and nations to use it to exploit their fellow humans for wealth, power, and ego-gratification.
What is going on here, and will spiritual awakening lead humanity to enlightenment before the forces of darkness destroy it? We have to admit that we don’t know. Optimists believe it will; pessimists that it won’t. Neither can prove themselves right. But each of the 7.1 billion clearly has a choice of which way to lean: on the side of altruism and service or that of selfishness and greed. Of course many others postpone the choice and simply go along to get along, losing themselves in the many available distractions along the way.
How long can the present rising tensions continue until something finally has to give? How many people are too many? How much demand on resources is too much? How many small-scale wars can be fought until a big one breaks out? How many earthquakes, tsunami, hurricanes and cyclones can there be before the Earth, Sun, comets, asteroids, and comet dust clouds erupt with such force as to create global havoc?
Something has to give. It can’t go on this way forever. Science has breached the barriers to infinity at both the levels of quantum physics and trans-galactic astronomy. Yet science cannot predict the future of the planet or its inhabitants. It cannot say if Armageddon or a Golden Age lie ahead or both. It cannot predict new discoveries of consciousness or new economic crises. All it can forecast is the constancy of change.
So what can individuals do in the face of such uncertainty? The one thing we know for certain is that the animal body that each of us inhabits while living on this planet will sooner or later perish. Death at the individual level is the constant that awaits each and every one. So beyond the minimum required to keep the body alive and reasonably healthy, what else should we strive for? Why not strive for what really makes us happy at the deepest emotional and spiritual levels, for what really and truly brings a sigh of relaxation and smiles to our faces? Why not strive to know, help, and love ourselves and one another as best we can each and every day of our lives?

Richard C. Cook is a former federal analyst who now teaches meditation at the Lifestream Center in Roanoke, VA, USA. His latest book is “Return of the Aeons: The Planetary Spiritual Ascension.” His websites are www.richardccook.com and www.meditatehealascend.org.

Russian regulator shuts down 3 more banks

Bank housekeeping: Russian regulator shuts down 3 more lenders

Published time: December 13, 2013 11:06
Edited time: December 13, 2013 12:51
The Investbank building on Leninsky Avenue in Kaliningrad (RIA Novosti / Igor Zarembo)
The Investbank building on Leninsky Avenue in Kaliningrad (RIA Novosti / Igor Zarembo)
Russia’s Central Bank (CBR) has revoked the licenses of three mid-sized banks on Friday, which brings the total to 30 lenders that have been closed down under the CBR crusade against dubious lenders since the start of the year.
Licenses were withdrawn from Investbank, Smolensky Bank, Russia’s 125th largest, and Project Finance Bank, the country’s 129th biggest bank. Individual deposits total $2.2 billion (70 billion rubles), according to the Deposit Insurance Agency (DIA).
Elderly clients broke through the door of Investbank, office windows were smashed, and hundreds of people rushed to enter the bank, only be refused in Kaliningrad.
The regulator blamed the lenders for distorting their financials, as well as poor financial standing.
“Any license withdrawal is a shock for us. It’s clear that it’s the measure of last resort, used only when all other measures are exhausted,” said the First Deputy Head of the CBR Aleksey Simanovsky.
While the banks’ assets will be frozen, the DIA has promised to reimburse customers before the New Year.
Head of Central Bank Elvira Nabiullina at a State Duma meeting (RIA Novosti / Vladimir Fedorenko)
Head of Central Bank Elvira Nabiullina at a State Duma meeting (RIA Novosti / Vladimir Fedorenko)

Under DIA rules, each customer is insured up to $21,800 by the state. The DIA has an estimated $5.5 million bill (180 billion rubles) to pay out to customers, and if the agency runs out of money, it can borrow from the Central Bank of Russia (CBR), according to Vesti 24.
Nearly 30 Russian banks have lost their licenses this year, with 27 of them being revoked under the new Central bank Chair Elvira Nabiullina, who took office in June. Tighter controls over financial institutions led to 43 banks losing their licenses in 2009, followed by 17 banks in 2010, 18 in 2011, and 16 in 2012.
The license withdrawals have not come as a surprise, after the Central Bank revoked the license of Master Bank, which was suspected of illegally cashing $61 million (2 billion rubles) on November 20.
After the Master Bank fallout, Nabiullina spooked investors and markets when she said it “isn’t the only one”, causing nervous speculation in the banking community on which was next.
Before the decision was taken and the order to revoke the licenses was made official, the president of VTB 24, Mikhail Zadornov said many of the top-50 Russian banks are on “the verge of bankruptcy.”
Continuing closures have highlighted counter-party risks among Russia's 900 banks, adding to negative sentiment on the financial markets. The ruble fell to four-year lows following the latest closures.
Separately, the CBR will take a decision on Friday on its interest rate, which will likely remain unchanged at 5.5 percent, as the ruble remains weak and inflation high, nearing 6.5 percent.

Putin's pledge

The crackdown came a day after President Vladimir Putin called for stricter penalties on companies that register outside Russia which leaks $111 billion offshore.
President Vladimir Putin’s fight to ‘de-offshore’ Russia’s economy is an internal measure to boost budget revenues, by keeping capital inside Russia and taxable.
Worldwide, Russia tops the list in illegal capital flight, second only to China, according to a study by Washington-based Global Financial Integrity data. Between 2002-11, Russia lost a cumulative $881 billion in illicit financial flows out of the country.

domenica 15 dicembre 2013

Microeconomics for All

 5

Microeconomics for All

http://www.project-syndicate.org/commentary/paul-seabright-criticizes-the-poverty-of-the-undergraduate-microeconomics-curriculum


TOULOUSE – For the last half-century, the world’s leading universities have taught microeconomics through the lens of the Arrow-Debreu model of general competitive equilibrium. The model, formalizing a central insight of Adam Smith’s The Wealth of Nations, embodies the beauty, simplicity, and lack of realism of the two fundamental theorems of competitive equilibrium, in contrast to the messiness and complexity of modifications made by economists in an effort to capture better the way the world actually functions. In other words, while researchers attempt to grasp complex, real-world situations, students are pondering unrealistic hypotheticals.

This educational approach stems largely from the sensible idea that a framework for thinking about economic problems is more useful to students than a ragbag of models. But it has become burdened with another, more pernicious notion: as departures from the Arrow-Debreu model become more realistic, and thus more complex, they become less suitable for the classroom. In other words, “real” microeconomic thinking should be left to the experts.
To be sure, basic models – for example, theories of monopoly and simple oligopoly, the theory of public goods, or simple asymmetric-information theory – have some educational value. But few researchers actually work with them. The bread-and-butter theories for microeconomics research – incomplete contracts, two-sided markets, risk analysis, inter-temporal choice, market signaling, financial-market microstructure, optimal taxation, and mechanism design – are far more complicated, and require exceptional finesse to avoid inelegance. Given this, they are largely excluded from textbooks.
In fact, microeconomics textbooks have remained practically unchanged for at least two decades. As a result, undergraduate students struggle to understand even the abstracts of papers on the complex representations of microeconomic reality that fill research journals. And, in many areas – such as antitrust analysis, auction design, taxation, environmental policy, and industrial and financial regulation – policy applications have come to be considered the domain of specialists.
This does not have to be the case. While it is true that realistic microeconomic models are more complex than their idealized textbook counterparts, grasping them does not necessarily require years of research experience.
A case in point is the economics of two-sided markets, which involve competition between platforms whose principal “product” consists in connecting two categories of users, who then offer each other network benefits. When markets are two-sided, many of the standard assumptions of antitrust analysis no longer hold: market entry can be bad for consumers, exclusive contracts can increase the number of firms in a market, and pricing below cost may not be predatory.
survey by David Evans and Richard Schmalensee describes numerous situations in which applying old assumptions could lead to mistakes by, say, an anti-trust regulator with only an undergraduate degree. The unmistakable message is, “Don’t try this at home.”
But every behavioral divergence between two-sided and traditional markets can be understood using simple tools of elementary microeconomics, such as the distinction between substitute and complementary products. When producers of substitutes collude, they usually raise prices; producers of complements, by contrast, collaborate to lower them.
So, if two platforms that appear to be performing similar services are complementary – for example, because one platform connects consumers with a set of users that helps them to value another set of users more highly – market entry can be bad for consumers. In fact, two platforms can even be complementary for one set of users and substitutes for another. The different stages of a televised soccer (football) tournament, for example, are complementary for viewers and substitutes for advertisers.
Moreover, exclusive dealing can increase competition by allowing two platforms to occupy distinct market niches, with the alternative being that one drives out the other. In short, with a solid understanding of the difference between complements and substitutes, one can do almost everything the fancy models do – without hiring a single expensive expert.
Undergraduate-level microeconomics should empower students, not alienate them. While the Arrow-Debreu model has its value – namely, it explains why an unplanned economy can produce order – it is discouraging for students to find that what they are deemed capable of comprehending offers little insight into real-life situations.
Restructuring the microeconomics syllabus would send a far more inspiring – and accurate – message: even complex ideas developed by experts can be understood and applied by educated laypeople.

Read more at http://www.project-syndicate.org/commentary/paul-seabright-criticizes-the-poverty-of-the-undergraduate-microeconomics-curriculum#AUJrRv54IYfji4oc.99

Europe to ease Ukraine’s financial crunch by threats or bribes

EDITORIAL

A Dangerously Divided Ukraine

Ukraine’s president, Viktor Yanukovich, took a tentative step toward defusing his country’s political turmoil earlier this week by convening a “round table” with former Ukrainian presidents to discuss possible responses to the protests engulfing the capital, Kiev. But he promptly negated any value in that gesture by ordering security police to clear the demonstrators’ encampment in Independence Square early Wednesday morning. Though the police appeared to pull back by midday, the confrontation plunges Ukraine deeper into crisis.

Secretary of State John Kerry, expressing the United States’ “disgust” with the use of force, said in a statement, “This response is neither acceptable nor does it befit a democracy.” Even Mr. Yanukovich’s allies in the Kremlin have said that they cannot offer Ukraine economic help until this political turmoil is resolved.
Mr. Yanukovich is a democratically elected president, but he undermined his legitimacy two weeks ago when his security forces used truncheons and tear gas against thousands of protesters enraged by his rejection of an economic deal with the European Union that could have opened the way to a brighter economic future.
Mr. Yanukovich bowed to Russia’s threats of retaliation against Ukrainian imports if Ukraine were to have reached an agreement with Europe. Russia, Ukraine’s largest trading partner, has also hinted at a possible $9 billion discount on Russian gas prices for Ukraine if it spurned Europe and joined a Russian-led regional economic bloc.
The European Union should not sit by while Russia offers payouts to get a stake in Ukraine’s political future. Meanwhile, China seeks to increase its own leverage on Ukraine by reportedly offering to invest $7 billion or more in that nation’s struggling economy. Europe should look for ways to ease Ukraine’s financial crunch, not by threats or bribes but by reasonable offers of economic relief.
At this point, only a negotiated political compromise between the government and the opposition — coupled with renewed trade talks with Europe that Mr. Yanukovich promises — might begin to resolve the conflict.
For months, the International Monetary Fund has refused to sign off on a nearly $15 billion bailout loan that Ukraine needs by March to refinance its external debt. The I.M.F. wants Ukraine to accept harsh conditions, including raising domestic gas prices and imposing strict budgetary austerity. Those conditions could also lead to more political upheaval.
Eventually, Ukraine will need help from one of its neighbors, Russia in the east or Europe in the west. With so much at stake, the European Union should be asking itself why not Europe and why not now?

sabato 14 dicembre 2013

Criminal Action Is Expected for JPMorgan

Criminal Action Is Expected for JPMorgan in Madoff Case

Bernard L. Madoff, right, at Federal District Court in Manhattan in 2009. He is serving a 150-year sentence in a federal prison.Stephen Chernin/Getty ImagesBernard L. Madoff, right, at Federal District Court in Manhattan in 2009. He is serving a 150-year sentence in a federal prison.
JPMorgan Chase and federal authorities are nearing settlements over the bank’s ties to Bernard L. Madoff, striking tentative deals that would involve roughly $2 billion in penalties and a rare criminal action. The government will use a sizable portion of the money to compensate Mr. Madoff’s victims.
The settlements, which are coming together on the anniversary of Mr. Madoff’s arrest at his Manhattan penthouse five years ago on Wednesday, would fault the bank for turning a blind eye to his huge Ponzi scheme, according to people briefed on the case who were not authorized to speak publicly.
A settlement with federal prosecutors in Manhattan, the people said, would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case. The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank’s money-laundering safeguards.

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The agreement to defer prosecution would also list the bank’s criminal violations in a court filing but stop short of an indictment as long as JPMorgan pays the penalties and acknowledges the facts of the government’s case. In the negotiations, the prosecutors discussed the idea of extracting a guilty plea from JPMorgan, the people said, but ultimately chose the steep fine and deferred-prosecution agreement, which could come by the end of the year.
Until now, no big Wall Street bank has ever been subjected to such an agreement, which is typically deployed only when misconduct is severe. JPMorgan, the authorities suspect, continued to serve as Mr. Madoff’s primary bank even as questions mounted about his operation, with one bank executive acknowledging before the arrest that Mr. Madoff’s “Oz-like signals” were “too difficult to ignore,” according to a private lawsuit.
JPMorgan, which declined to comment for this article, has repeatedly said that “all personnel acted in good faith” in the Madoff matter. No one at JPMorgan has been accused of wrongdoing and the bank was not the only one to miss Mr. Madoff’s fraud, which duped regulators and clients for decades.
In recent months, the bank has emphasized that it is scaling back businesses that could be vulnerable to money laundering and cutting ties to certain clients.
Jamie Dimon, the bank’s chief executive, made a reference to the settlement talks at an industry conference on Wednesday, saying: “You read about Madoff in the paper the other day. We have to get some of these things behind us so we can do our job.”
The looming settlements would come on the heels of JPMorgan’s reaching a record $13 billion settlement over its sale of troubled mortgage securities before the financial crisis.
The scrutiny has taken a toll on JPMorgan, undercutting its leverage in negotiations and casting the bank as a symbol of Wall Street risk-taking. That stigma also sapped the influence that JPMorgan once used to shape policy in Washington, people briefed on the matter said, where regulators are increasingly skeptical of the bank’s lobbying.
Although JPMorgan still wields some sway in Washington — it held more meetings with regulators on the so-called Volcker Rule than any other bank, according to the Sunlight Foundation — the bank’s $6 billion trading loss in London last year became a flash point in the process and inspired regulators to strengthen the rule, a restriction on risky trading that was approved this week.
Facing the scrutiny, JPMorgan and its top executives directed billions of dollars to new compliance measures and vowed to adopt a conciliatory tack with federal authorities. The bank also embarked on a tour of contrition that featured Mr. Dimon holding town-hall-style meetings with regulators.
Of all its legal problems, the Madoff case appears to be among the biggest threats because of the criminal element. The deferred-prosecution agreement, the people said, is expected to fault JPMorgan for a “programmatic violation” of the Bank Secrecy Act, which requires banks to maintain internal controls against money laundering and to report suspicious transactions to the authorities.
The bank is also planning to settle with the federal Comptroller of the Currencyand a unit of the Treasury Department, which are scrutinizing broader breakdowns in JPMorgan’s detection of suspicious transactions routed through the bank. In addition to focusing on JPMorgan’s ties to Mr. Madoff, regulators from the comptroller’s office have also examined the safeguards at JPMorgan’s private banking unit in Asia and within the so-called correspondent banking business, in which it relies on foreign institutions to process transactions overseas.
The comptroller’s office, the Treasury and the United States attorney’s office in Manhattan all declined to comment.
The Madoff case could have turned out worse for JPMorgan. In recent weeks, the federal prosecutors in Manhattan debated whether to demand that JPMorgan plead guilty to a criminal violation of the Bank Secrecy Act, the people briefed on the matter said.
The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron’s accounting firm, Arthur Andersen, which went out of businesses after its 2002 conviction, taking 28,000 jobs with it. Ever since, prosecutors have increasingly relied on deferred-prosecution agreements, which rebuke companies without threatening their health. Although a Wall Street bank has never faced a deferred-prosecution agreement, according to a University of Virginia Law School database, Wachovia and the banking arm of American Express have entered into such deals.
The agreements, however, have fueled concern that some banks, having grown so large and interconnected, are too big to indict.
Preet Bharara, the United States attorney in Manhattan whose office is handling the JPMorgan case, has raised similar concerns. “I don’t think anyone is too big to indict — no one is too big to jail,” he said in a recent speech.
In the case of JPMorgan, the nation’s biggest bank, his office discussed the potential ramifications of criminal charges with the comptroller’s office, which is required to monitor the bank’s stability, the people said. The comptroller’s office assured the prosecutors that it would not stand in the way of the charges. And Mr. Bharara’s office concluded that the bank could withstand a criminal charge.
But ultimately, prosecutors decided that a deferred-prosecution agreement was more fitting to a case that began as a civil investigation. Criminal authorities have a higher burden of proof than their civil regulatory counterparts, having to show a legal violation “beyond a reasonable doubt” rather than just a “preponderance of the evidence” standard in civil cases.
The government’s case against JPMorgan would most likely center on its failure to file a so-called suspicious activity report about Mr. Madoff. While the bank alerted the authorities in Britain to concern about Mr. Madoff, it did not sound the alarms with American regulators.
A statement of facts that would underpin the deferred-prosecution agreement will most likely cite a series of internal JPMorgan emails suggesting that employees had concerns that never made it to Washington. Some of the emails surfaced in a separate lawsuit that Irving H. Picard — the trustee trying to recoup money on behalf of Mr. Madoff’s victims — filed against JPMorgan in 2010. Mr. Picard, who has recovered $9.5 billion for victims, sued the bank for $6.4 billion, accusing it of “aiding and abetting” Mr. Madoff.
JPMorgan has denied Mr. Picard’s accusations. A federal appeals court tossed out his lawsuits against JPMorgan and other banks.
JPMorgan’s relationship with Mr. Madoff spanned more than two decades, from 1986 to the time of his arrest in 2008. JPMorgan served as his primary bank, Mr. Picard said, collecting fees from Mr. Madoff’s brokerage firm, which moved billions of dollars through an account at the bank.
By 2006, concerns began to mount within the bank. “I do have a few concerns and questions,” one JPMorgan employee wrote in February 2006 after studying some of Mr. Madoff’s trading records, according to an email cited in the lawsuit. “All trades are generated by Madoff’s black box.”
Mr. Madoff is serving a 150-year sentence after pleading guilty to operating the scheme.
A version of this article appears in print on 12/12/2013, on page A1 of the NewYork edition with the headline: Criminal Action Is Expected For JPMorgan in Madoff Case.

Plutocracy Versus Democracy

Bill Moyers
Bill Moyers has received 35 Emmy awards, nine Peabody Awards, the National Academy of Television’s Lifetime Achievement Award, and an honorary doctor of fine arts from the American Film Institute over his 40 years in broadcast journalism. He is currently host of the weekly public television series Moyers & Company and president of the Schumann Media Center.
December 13th, 2013 1:23 PM

The Great American Class War: Plutocracy Versus Democracy

Crossposted from TomDispatch

I met Supreme Court Justice William Brennan in 1987 when I was creating a series for public television called In Search of the Constitution, celebrating the bicentennial of our founding document.  By then, he had served on the court longer than any of his colleagues and had written close to 500 majority opinions, many of them addressing fundamental questions of equality, voting rights, school segregation, and -- in New York Times v. Sullivan in particular -- the defense of a free press.
Those decisions brought a storm of protest from across the country.  He claimed that he never took personally the resentment and anger directed at him.  He did, however, subsequently reveal that his own mother told him she had always liked his opinions when he was on the New Jersey court, but wondered now that he was on the Supreme Court, “Why can’t you do it the same way?” His answer: “We have to discharge our responsibility to enforce the rights in favor of minorities, whatever the majority reaction may be.”  
Although a liberal, he worried about the looming size of government. When he mentioned that modern science might be creating “a Frankenstein,” I asked, “How so?”  He looked around his chambers and replied, “The very conversation we’re now having can be overheard. Science has done things that, as I understand it, makes it possible through these drapes and those windows to get something in here that takes down what we’re talking about.” 
That was long before the era of cyberspace and the maximum surveillance state that grows topsy-turvy with every administration.  How I wish he were here now -- and still on the Court!

My interview with him was one of 12 episodes in that series on the Constitution.  Another concerned a case he had heard back in 1967.  It involved a teacher named Harry Keyishian who had been fired because he would not sign a New York State loyalty oath.  Justice Brennan ruled that the loyalty oath and other anti-subversive state statutes of that era violated First Amendment protections of academic freedom. 
I tracked Keyishian down and interviewed him.  Justice Brennan watched that program and was fascinated to see the actual person behind the name on his decision.  The journalist Nat Hentoff, who followed Brennan’s work closely, wrote, “He may have seen hardly any of the litigants before him, but he searched for a sense of them in the cases that reached him.”  Watching the interview with Keyishian, he said, “It was the first time I had seen him.  Until then, I had no idea that he and the other teachers would have lost everything if the case had gone the other way.” 
Toward the end of his tenure, when he was writing an increasing number of dissents on the Rehnquist Court, Brennan was asked if he was getting discouraged. He smiled and said, “Look, pal, we’ve always known -- the Framers knew -- that liberty is a fragile thing.  You can’t give up.”  And he didn’t.
The Donor Class and Streams of Dark Money
The historian Plutarch warned us long ago of what happens when there is no brake on the power of great wealth to subvert the electorate.  “The abuse of buying and selling votes,” he wrote of Rome, “crept in and money began to play an important part in determining elections.  Later on, this process of corruption spread in the law courts and to the army, and finally, when even the sword became enslaved by the power of gold, the republic was subjected to the rule of emperors.”
We don’t have emperors yet, but we do have the Roberts Court that consistently privileges the donor class.  
We don’t have emperors yet, but we do have a Senate in which, as a study by the political scientist Larry Bartels reveals, “Senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes.”
We don’t have emperors yet, but we have a House of Representatives controlled by the far right that is now nourished by streams of “dark money” unleashed thanks to the gift bestowed on the rich by the Supreme Court in the Citizens United case. 
We don’t have emperors yet, but one of our two major parties is now dominated by radicals engaged in a crusade of voter suppression aimed at the elderly, the young, minorities, and the poor; while the other party, once the champion of everyday working people, has been so enfeebled by its own collaboration with the donor class that it offers only token resistance to the forces that have demoralized everyday Americans.
Writing in the Guardian recently, the social critic George Monbiot commented,
“So I don’t blame people for giving up on politics... When a state-corporate nexus of power has bypassed democracy and made a mockery of the voting process, when an unreformed political system ensures that parties can be bought and sold, when politicians [of the main parties] stand and watch as public services are divvied up by a grubby cabal of privateers, what is left of this system that inspires us to participate?”
Why are record numbers of Americans on food stamps? Because record numbers of Americans are in poverty. Why are people falling through the cracks? Because there are cracks to fall through. It is simply astonishing that in this rich nation more than 21 million Americans are still in need of full-time work, many of them running out of jobless benefits, while our financial class pockets record profits, spends lavishly on campaigns to secure a political order that serves its own interests, and demands that our political class push for further austerity. Meanwhile, roughly 46 million Americans live at or below the poverty line and, with the exception of Romania, no developed country has a higher percent of kids in poverty than we do.  Yet a study by scholars at Northwestern University and Vanderbilt finds little support among the wealthiest Americans for policy reforms to reduce income inequality.
Class Prerogatives
Listen!  That sound you hear is the shredding of the social contract.
Ten years ago the Economist magazine -- no friend of Marxism -- warned: “The United States risks calcifying into a European-style class-based society.”  And as a recent headline in the Columbia Journalism Review put it“The line between democracy and a darker social order is thinner than you think.”
We are this close -- this close! -- to losing our democracy to the mercenary class. So close it’s as if we’re leaning way over the rim of the Grand Canyon waiting for a swift kick in the pants.
When Justice Brennan and I talked privately in his chambers before that interview almost 20 years ago, I asked him how he had come to his liberal sentiments.  “It was my neighborhood,” he said.  Born to Irish immigrants in 1906, as the harsh indignities of the Gilded Age brought hardship and deprivation to his kinfolk and neighbors, he saw “all kinds of suffering -- people had to struggle.”  He never forgot those people or their struggles, and he believed it to be our collective responsibility to create a country where they would have a fair chance to a decent life.  “If you doubt it,” he said, “read the Preamble [to the Constitution].”
He then asked me how I had come to my philosophy about government (knowing that I had been in both the Kennedy and Johnson administrations).  I don’t remember my exact words, but I reminded him that I had been born in the midst of the Great Depression to parents, one of whom had to drop out of school in the fourth grade, the other in the eighth, because they were needed in the fields to pick cotton to help support their families. 
Franklin Roosevelt, I recalled, had been president during the first 11 years of my life.  My father had listened to his radio “fireside chats” as if they were gospel; my brother went to college on the G.I. Bill; and I had been the beneficiary of public schools, public libraries, public parks, public roads, and two public universities.  How could I not think that what had been so good for me would be good for others, too? 
That was the essence of what I told Justice Brennan.  Now, I wish that I could talk to him again, because I failed to mention perhaps the most important lesson about democracy I ever learned. 
On my 16th birthday in 1950, I went to work for the daily newspaper in the small East Texas town where I grew up.  It was a racially divided town -- about 20,000 people, half of them white, half of them black -- a place where you could grow up well-loved, well-taught, and well-churched, and still be unaware of the lives of others merely blocks away.  It was nonetheless a good place to be a cub reporter: small enough to navigate but big enough to keep me busy and learning something new every day.  I soon had a stroke of luck.  Some of the old-timers in the newsroom were on vacation or out sick, and I got assigned to report on what came to be known as the “Housewives’ Rebellion.”  Fifteen women in town (all white) decided not to pay the Social Security withholding tax for their domestic workers (all black). 
They argued that Social Security was unconstitutional, that imposing it was taxation without representation, and that -- here’s my favorite part -- “requiring us to collect [the tax] is no different from requiring us to collect the garbage.”  They hired themselves a lawyer -- none other than Martin Dies, Jr., the former congressman best known, or worst known, for his work as head of the House Committee on Un-American Activities in the witch-hunting days of the 1930s and 1940s.  They went to court -- and lost.  Social Security was constitutional, after all.  They held their noses and paid the tax.
The stories I helped report were picked up by the Associated Press and circulated nationwide.  One day, the managing editor, Spencer Jones, called me over and pointed to the AP ticker beside his desk.  Moving across the wire was a notice citing the reporters on our paper for the reporting we had done on the “rebellion.”  I spotted my name and was hooked.  In one way or another, after a detour through seminary and then into politics and government, I’ve been covering the class war ever since.
Those women in Marshall, Texas, were among its advance guard.  Not bad people, they were regulars at church, their children were my classmates, many of them were active in community affairs, and their husbands were pillars of the business and professional class in town.  They were respectable and upstanding citizens all, so it took me a while to figure out what had brought on that spasm of reactionary defiance.  It came to me one day, much later: they simply couldn’t see beyond their own prerogatives.  
Fiercely loyal to their families, to their clubs, charities, and congregations -- fiercely loyal, in other words, to their own kind -- they narrowly defined membership in democracy to include only people like themselves.  The black women who washed and ironed their laundry, cooked their families’ meals,  cleaned their bathrooms, wiped their children’s bottoms, and made their husbands’ beds, these women, too, would grow old and frail, sick and decrepit, lose their husbands and face the ravages of time alone, with nothing to show for their years of labor but the creases on their brows and the knots on their knuckles.  There would be nothing for them to live on but the modest return on their toil secured by the collaborative guarantee of a safety net.
The Unfinished Work of America
In one way or another, this is the oldest story in America: the struggle to determine whether “we, the people” is a moral compact embedded in a political contract or merely a charade masquerading as piety and manipulated by the powerful and privileged to sustain their own way of life at the expense of others.
I should make it clear that I don’t harbor any idealized notion of politics and democracy.  Remember, I worked for Lyndon Johnson.  Nor do I romanticize “the people.” You should read my mail and posts on right-wing websites.  I understand the politician in Texas who said of the state legislature, “If you think these guys are bad, you should see their constituents.”
But there is nothing idealized or romantic about the difference between a society whose arrangements roughly serve all its citizens (something otherwise known as social justice) and one whose institutions have been converted into a stupendous fraud.  That can be the difference between democracy and plutocracy.
Toward the end of Justice Brennan’s tenure on the Supreme Court, he made a speech that went to the heart of the matter.  He said:
“We do not yet have justice, equal and practical, for the poor, for the members of minority groups, for the criminally accused, for the displaced persons of the technological revolution, for alienated youth, for the urban masses... Ugly inequities continue to mar the face of the nation. We are surely nearer the beginning than the end of the struggle.”
And so we are. One hundred and fifty years ago, Abraham Lincoln stood on the blood-soaked battlefield of Gettysburg and called Americans to “the great task remaining.”  That “unfinished work,” as he named it, remained the same then as it was when America’s founding generation began it. And it remains the same today: to breathe new life into the promise of the Declaration of Independence and to assure that the Union so many have sacrificed to save is a union worth saving.
Bill Moyers has received 35 Emmy awards, nine Peabody Awards, the National Academy of Television’s Lifetime Achievement Award, and an honorary doctor of fine arts from the American Film Institute over his 40 years in broadcast journalism.  He is currently host of the weekly public television series Moyers & Company and president of the Schumann Media Center, a non-profit organization which supports independent journalism.  He delivered these remarks (slightly adapted here) at the annual Legacy Awards dinner of the Brennan Center for Justice, a non-partisan public policy institute in New York City that focuses on voting rights, money in politics, equal justice, and other seminal issues of democracy. This is his first TomDispatch piece. 

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