The American Bear

Sunshine/Lollipops

Is the End of Marijuana Prohibition the End of the War On Drugs? Probably Not. | Bruce Dixon

The forty years of so-called “war on drugs” has been the rhetorical excuse for a nationwide policy of punitive overpolicing in black and brown communities. Although black and white rates of drug use have been virtually identical, law enforcement strategies focused police resources almost exclusively upon communities of color. Prosecutors and judges did their bit as well, charging and convicting whites significantly less often, and to less severe sentences than blacks.

The forty years war on drugs has been the front door of what can only be described as the prison state, in which African Americans are 13% of the population but more than 40% of the prisoners, and the chief interactions of government with young black males is policing, the courts and imprisonment. Given all that, the beginning of the end of marijuana prohibition, first in Colorado and soon to be followed by other states ought to be great good news. But not necessarily.

Ask yourself, what would it look like if policymakers wanted to end the prohibition of marijuana, but not necessarily the the war on drugs. What if they desired to lock down the potential economic opportunities opened up by legalizing weed to themselves and their class, to a handful of their wealthy and well-connected friends and campaign contributors? What if they wanted to make the legal marijuana market safe for predatory agribusiness, which would like to claim lucrative patents on all the genetic varieties of marijuana which can be legally grown, as they already try to do with other crops?

If they wanted to do those things, the system in place in Colorado today would be a good start. In Denver today, low income property owners can’t just plant pot in the back yard or on the roof in hopes of making one mortgage payment a year out of twelve, it doesn’t work that way. Ordinary households are limited to 3 plants per adult, and for reference only the female plants are good for smoking, and prohibited from selling the weed or the seed. To participate in the marijuana economy as anything but a consumer requires background checks, hefty license fees, a minimum of hundreds of thousands to invest, and the right connections. All this currently drives the price of legal weed in Colorado to over $600 per ounce, including a 25% state tax, roughly double the reported street price of illegal weed.

So to enable the state to collect that tax money, and the bankers, growers and investors to collect their profits from marijuana taxed by the state and regulated in the corporate interest, cops and judges and jailers in near future, in Colorado and in your state as well, figure to be just as busy as they always have been the last forty years, doing pretty much what they’ve always done… conducting a war on illegal drugs, chiefly in the poorer and blacker sections of town, with predictable results.

The end of marijuana prohibition is not designed to create jobs in our communities, nor is it intended to shrink the prison state. Our ruling class simply does not allow economic growth that they can’t monopolize, and the modern prison state has never been about protecting the public from drugs or crime. Prisons and our lifelong persecution of former prisoners serve to single out, brand and stigmatize the economic losers in modern capitalist society, so that those hanging on from paycheck to paycheck can have someone to look down upon and so that they might imagine that this vast edifice of inequality is, if not just, inevitable.

Detroit on the Auction Block | Glen Ford

The corporate plan to abolish the last vestiges of urban democracy in the United States is proceeding on a “hyper fast track” with this week’s court ruling that Detroit is eligible for bankruptcy “protection.” Judge Steven Rhodes quickly made clear that the only parties to be protected in his venue are the bankers that will get first crack at the Black metropolis’s remaining assets. Public workers’ pensions, he ruled, are not entitled “to any extraordinary attention” under federal bankruptcy law, despite the Michigan state constitution’s prohibitions against tampering with or diminishing pension benefits. The stage is now set for Kevyn Orr, the state-imposed Emergency Financial Manager, to put Detroit in hock to Britain’s Barclays Bank for $350 million, in order to pay off Bank of America and UBS for a 2005 derivatives deal with the city. Barclay’s would then become Detroit’s “super-priority” creditor – King Predator – with first dibs on all city incomes and assets over $10 million.

The trial on Detroit’s “restructuring” begins December 17 in Rhodes’ court but, based on his conduct since assuming jurisdiction, there is little doubt of the outcome. The judge is an empathetic hangman who listens patiently to the pleas of the people – and then swiftly condemns them. He agreed with the pensioners that Orr had failed to negotiate in “good faith” with the unions, but then ruled that the petition for bankruptcy had been filed in good faith – which somehow negated Orr’s bad faith negotiations.

Municipal bankruptcies are very rare, and tend to be long and tortuous legal ordeals, but Rhodes has greased the skids for the banksters to gulp down the city like fast food. He is on an accelerated Wall Street schedule, and there is no time to waste. Detroit is the golden opportunity to shape anti-democratic legal precedents that can be applied, nationwide, with the least resistance from the white American public. The city is guilty of excessive Blackness (82%) and must be punished. In a racist society, Detroit’s bankruptcy fits perfectly the legal maxim that “hard cases” or “great cases” make “bad law.” Whites can be expected to applaud a negative judgment on a Black city, with little thought to the ramifications for their own situations. Michigan voters, who rejected the idea of state emergency managers in a referendum, nevertheless favored Orr’s filing of bankruptcy for Detroit. Whites have always made exceptions to common notions of justice when it comes to African Americans, resulting in grotesquely bad laws.

Wall Street is counting on reflexive racism to smooth the path to a new legal and social order, where capital is unencumbered by democratic constraints. Having already succeeded in disenfranchising a majority of the Black population of Michigan, there are now fewer legal impediments to doing the same thing to whites. After all, thanks to the Black Freedom Movement of the Sixties, the law is race-neutral.

Kevyn Orr, Judge Rhodes and Michigan’s Republican Governor Rick Snyder work for the banking cartel – as does President Obama and the leaders of the Democratic Party, who have done nothing to interfere with the urban doomsday process that is unfolding in Detroit. (Barclays Bank and UBS, the prime beneficiaries of Orr’s restructuring plan, were just this week cited for taking part in a massive conspiracy to rig global LIBOR interest rates, in what has been called the greatest financial collusion of the century.) Finance capital, which creates nothing, is confiscating the wealth of the world. In the U.S., a thin veneer of democratic structures stands in the way. Therefore, restructuring is in order. What better place to start than in Detroit, a city filled with people who can be made exceptions to democratic norms.

Soon, the exception will become the rule.

Austerity does not involve the withdrawal of the state from the economy, as per the ‘free market’ myth, but rather the further penetration of capital into the state, and the re-organisation of state apparatuses to better accommodate the accumulation imperatives of specific sectors of capital, above all finance. In general, the state supplies not just the social reproduction necessary for capitalist growth, but also, as Mariana Mazzucato has demonstrated, the primary investments that make capitalist enterprise work from start-up capital to research and development. The state is integral to the production process and will continue to be so. But its current reorganisation is about bringing capital more and more into the material spaces of the state itself, on terms which leave capital’s autonomy intact.

Richard Seymour | Theses on austerity and how to fight it

About that - Wealth of world’s billionaires doubles since 2009:

Even as workers in the US and other countries have seen their incomes plummet, the combined net worth of the world’s billionaires has doubled since 2009, according to a report published Tuesday by UBS and Wealth-X, a consultancy that tracks super-rich individuals.

The collective wealth of the world’s billionaires hit $6.5 trillion, a figure that is nearly as large as the gross domestic product of China, the world’s second-largest economy. The number of billionaires has grown to 2,170 in 2013, up from 1,360 in 2009, according to the report.

The vast enrichment of this social layer has been driven by surging stock markets, fueled by the “easy money” and money-printing operations of the US Federal Reserve and other central banks. This process is intensifying. Last week the European Central Bank, responding to a deterioration of economic conditions in Europe, cut its benchmark interest rate in half, from 0.5 to 0.25 percent, sending a new wave of cash into financial markets.

… The wealth report reflects the parasitic growth of the financial sector throughout the world economy. Seventeen percent of billionaires got their wealth from the finance, banking, and investment sectors, more than any other, while only eight percent are associated with manufacturing.

The vast expansion in the incomes of the super-rich comes even as social services are being slashed in the US, Europe and throughout the world. Earlier this month, food stamp benefits were reduced for the first time in US history, and extended unemployment benefits are scheduled to expire entirely at the end of the year.

The budget for the SNAP food stamp program is currently $74.6 billion a year, and funding the extended unemployment benefit extension, scheduled to expire in January, for one year would cost $25.2 billion. The combined net worth of the 515 billionaires in the US would pay for the food stamp and extended unemployment benefit program for an entire century.

The tendency of we in ‘the West’ has been to draw a circle around the visible political-economic relations—those close at hand, and to exclude from our realm of concern the broader impact of Western policies. However, neo-liberalism as both ideology and imposed political economy is now fact in the West. With quiet acceptance any pretense of ‘democracy’ has been replaced with the admonition that if we behave ourselves we can remain on the ‘winning’ side of political economic restructuring according to neo-liberal dogma. Left unsaid is that rapidly declining circumstance, in terms of both the increasing economic marginalization of most citizens and the imposition of the technologies of totalitarianism, is wholly the product of four decades of near-silent neo-liberal coup. What Mr. Obama’s insistence on continuing to push neo-liberal policies indicates is that no economic debacle will cause neo-liberalism to be re-thought by its proponents. What historical trajectory suggests is that the imposed political economies and failed policies of neo-liberalism will only result in their greater imposition until the world says ‘no more.’ Rob Urie

Mr. Obama’s unconditional bailout of Wall Street, with upwards of $25 trillion of public funds made available to ‘save’ the banks, is the single greatest gift from working people to the forces of their own demise in world history. Rob Urie

President Barack Obama spoke at length on the economy on Wednesday in the first of what is reported to be a series of speeches he will give around the country to push his economic ‘agenda.’ A question for his supporters is why Mr. Obama is now purporting to promote the interests of the middle class and working poor when he has remained silent for the last five years during the worst economic downturn since the Great Depression? If he cared one whit about these people the time to promote economic policies to help them was five years ago. And conversely, the economic policies he has pursued have decimated the very people he now claims to want to help.

Mr. Obama’s analysis of economic travails—globalization and its effects on an under-educated workforce, are the same neo-liberal pabulum the ‘Washington consensus’ has been serving up since Jimmy Carter was in office. And his economic prescriptions—public-private ‘partnerships’ to boost investment in technology, bringing corporate executives in to assess what is wrong with the educational system, building out lower cost ‘online’ education and community colleges to ‘boost American competitiveness,’ increased infrastructure spending and the creation of tax advantaged savings accounts for middle class families, are straight from the neo-liberal playbook as well. To ask the obvious question: if neo-liberal policies worked, why then the laundry list of economic travails?

Rob Urie

How Goldman Made $5 Billion By Manipulating Aluminum Inventories (and Copper is Up Next) | naked capitalism

What sexual favors were exchanged so that the New York Times blunted the impact of an important, detailed investigative story on Goldman profiteering, this time in the aluminum market, by releasing it on a heat-addled summer Saturday?

On a high level, the story sets forth a simple and damning case. Not all that long ago, banks were prohibited from being in operating businesses. But the Federal Reserve and Congress have loosened those rules and big financial players have gone full bore backward integrating from commodities trading into owning major components of the delivery and inventorying systems. This doesn’t just give them a big information advantage by having better access to underlying buying and selling activity. It allows them to manipulate inventories, and thus, prices. And Goldman’s aluminum henanigans increased prices all across the market, not just for the customers who chose to use them for warehousing and delivery.

The article A Shuffle of Aluminum, but to Banks, Pure Gold by David Kocieniewski, tells us that the newly-permissive rules allowed Goldman to buy Metro International Trade Services, a concern in Detroit with 27 warehouses that handles a bit over 25% of the aluminum available for delivery. And here’s where the fun and games begin:

Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.

This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back–and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country…

Before Goldman bought Metro International three years ago, warehouse customers used to wait an average of six weeks for their purchases to be located, retrieved by forklift and delivered to factories. But now that Goldman owns the company, the wait has grown more than 20-fold — to more than 16 months, according to industry records.

Longer waits might be written off as an aggravation, but they also make aluminum more expensive nearly everywhere in the country because of the arcane formula used to determine the cost of the metal on the spot market. The delays are so acute that Coca-Cola and many other manufacturers avoid buying aluminum stored here. Nonetheless, they still pay the higher price.

The Times’s sources estimate the price impact across the market at 6 cents per pound, which adds $12 to the price of a typical car. Goldman piously claims it obey all the rules, but obeying the rules is far from operating in a fair or pro-customer manner. Metro’s inventories ballooned from 50,000 tons in 2008 to 850,000 tons in 2010. By 2011, Coca Cola complained to the London Metals Exchange, which attempted to address the situation by increasing the amount that warehouses must ship daily from 1,500 tons to 3,000 tons. But all that appears to have taken place is that Goldman simply shuffles more inventory among the 27 Metro warehouses while thumbing its nose at the LME (its inventories have almost doubled again from the 2010 levels, standing at 1.5 million tons).

The article goes into considerable detail as to how Goldman and its speculator allies manipulate prices (remember that holding inventories off the market results in higher prices, this is supply-demand 101):

Industry analysts and company insiders say that the vast majority of the aluminum being moved around Metro’s warehouses is owned not by manufacturers or wholesalers, but by banks, hedge funds and traders. They buy caches of aluminum in financing deals. Once those deals end and their metal makes it through the queue, the owners can choose to renew them, a process known as rewarranting.

To encourage aluminum speculators to renew their leases, Metro offers some clients incentives of up to $230 a ton, and usually moves their metal from one warehouse to another, according to industry analysts and current and former company employees.

To metal owners, the incentives mean cash upfront and the chance to make more profit if the premiums increase…metal analysts, like Mr. Vazquez at Harbor Aluminum Intelligence, estimate that 90 percent or more of the metal moved at Metro each day goes to another warehouse to play the same game. That figure was confirmed by current and former employees familiar with Metro’s books, who spoke on condition of anonymity because of company policy…

Despite the persistent backlogs, many Metro warehouses operate only one shift and usually sit idle 12 or more hours a day. In a town like Detroit, where factories routinely operate round the clock when necessary, warehouse workers say that low-key pace is uncommon.

When they do work, forklift drivers say, there is much more urgency moving aluminum into, and among, the warehouses than shipping it out. Mr. Clay, the forklift driver, who worked at the Mount Clemens warehouse until February, said that while aluminum was delivered in huge loads by rail car, it left in a relative trickle by truck.

“They’d keep loading up the warehouses and every now and then, when one was totally full they’d shut it down and send the drivers over here to try and fill another one up,” said Mr. Clay, 23.

Because much of the aluminum is simply moved from one Metro facility to another, warehouse workers said they routinely saw the same truck drivers making three or more round trips each day.

There is plenty more damning material in this excellent and important piece, which I strongly urge you to read in full. This is simply another form of looting. And the Times highlights, as we warned, that JP Morgan is running the same trick in copper, and Goldman will join the party. [++]

Obama Administration, Congress Intensify Opposition To Global Generic Drug Industry

WASHINGTON — The Obama administration and members of Congress are pressing India to curb its generic medication industry. The move comes at the behest of U.S. pharmaceutical companies, which have drowned out warnings from public health experts that inexpensive drugs from India are essential to providing life-saving treatments around the world.

Low-cost generics from India have dramatically lowered medical costs in developing countries and proved critical to global AIDS relief programs; about 98 percent of the drugs purchased by President George W. Bush’s landmark PEPFAR AIDS relief program are generics from India. Before Indian companies rolled out generic versions priced at $1 a day, AIDS medication cost about $10,000 per person per year.

But India’s generic industry has also cut into profits for Pfizer and other U.S. and European drug companies. In response, these companies have sought to impose aggressive patenting and intellectual property standards in India, measures that would grant the firms monopoly pricing power over new drugs and lock out generics producers. [continue]

Capitalism is nothing but class war. Requiring the permanent revolutionizing of the means of production, it demands and receives an ever-expanding arsenal for subjugation - the militarization of the police, enclavement of the ruling class, extension of the apparatus of surveillance, growth of the penal system. Police protect banks. Law serves creditors. Championing of the “right to work,” governors demolish unions. The immiserated, indebted, and precarious are necessary components of our present capitalism, the contemporary reserve army of the un- and underemployed, the service sector, service class, servants and serfs in becoming. Someone’s got to do that work. The indebted are doubly exploited as their futures belong to someone else. To the extent that their debts are packaged into asset backed securities (such as collateralized debt obligations), they become themselves the spoils of war, virtual serfs owned by one bank or another. Periscope: No War but Class War (via azspot)

(via azspot)

Things Fall Apart | Rob Urie

[…] So far [the] framing [of the motivations behind the surveillance state] posits the single direction of government subsidizing tech for its own nefarious intent—paying for the privilege, but extracting its due in blood. But what commercial genius lay behind convincing several generations of children, the dependents whose psychologies aren’t yet developed by history and experience to beware the intentions of cynical technocrats bearing toys, that delivering their life-secrets to self-serving capitalists would leave them safe? Apple Computer’s Steve Jobs thought nothing of using the advantages of history and strategies of planned destitution to squeeze those making ‘his’ computers for everything he could take. The major Internet companies span the globe to find captive workforces to labor in slave conditions to program their technologies of global domination, or more likely, the latest moronic ‘app’ that notifies one of the need to use the toilet. These are the capitalists and capitalist enterprises bravely standing between ‘the government’ and totalitarian intrusion? And who, exactly, do they run to to protect their privilege?

Were ‘the government’ in control, why would all of ‘its’ power and resources be dedicated to making the lives and bank accounts of this technerati, public largess dependent financiers, and the sociopathic tools occupying executive suites, so remunerative and comfortable? There is tension, no doubt, between the self-interest of plutocrat tools in government and their plutocrat masters—the largest neighborhood of the largest houses I ever saw being built was in suburban Washington, DC at the very height of the most recent economic calamity. But given the theorized power of government, why don’t self-interested bureaucrats take what the plutocrats have for themselves? This question is for my friends with anarchist and libertarian tendencies. As Lenin had it, and the late Hugo Chavez understood, the way to restrain totalitarian government is to restrain capitalist imperialism. The NSA and CIA are but tools, aspects, of imperialist capitalism.

Framed differently, it requires improbably separating method from purpose to argue ‘private’ and government data mining and statistical analysis developed from the symbiosis of government and business serve fundamentally different purposes. ‘Private’ data collection and use, e.g. stores that use ‘store cards’ to track and analyze customer purchases, is intended to provide economic advantage. Given the NSA can only give implausible and absurd explanations for why it tracks and uses similar data from the citizenry, what possible explanation, aside from mindlessly squandering public resources, is possible than to gain political advantage from it? Again, if the claim they’ve interrupted terrorist plots is demonstrably bullshit and bluster, what use value does the data they’re collecting have?

If giving self-interested sociopaths—the definition of successful capitalists, everything they wanted the roaring twenties and debt-fueled 2000s would have led to self-sustaining economic outcomes. But they led instead to financial and economic crashes. The move to consolidate political-economic power through the technocratic corporate state is likewise leading to increasing political dysfunction. One of the only political leaders in the U.S. with retained credibility, Barack Obama, appears to be losing his ability to serve as front for plutocrat interests. And technocratic overreach is leading to increasing skepticism of the corporate state nexus. The right-wing revolution started in the 1970s worked by demonizing government to the benefit of global capital. With both government and capital losing credibility, technocratic control and police repression are the tools remaining to sustain corporate state power.

Krugman Discovers Intellectual Property: The 1 Percent are the Takers | Dean Baker

While meandering the streets of Paris, Paul Krugman apparently awakened to the fact that the assignment of claims to wealth through patents, copyrights, and other forms of intellectual property is a really big deal. This is good news for those who have been jumping up and down yelling about this issue for the last 15 years or so.

There is really big money in this area. Just to take my favorite one, we spend $340 billion a year on drugs, more than 2 percent of GDP ($295 billion on prescription drugs, $45 billion on non-prescription drugs). We would probably spend about one-tenth this amount in the absence of patent protection. The difference is equal to about 20 percent of after-tax corporate profits.

And this huge gap between price and marginal cost gives drug companies enormous incentive to push their drugs as much as possible. This means concealing evidence that they are ineffective or even harmful. We routinely see stories about the drug companies responding exactly as economic theory predicts.

Of course the huge gap between price and marginal cost leads to all the predicted distortions on the consumer side as well. People have to struggle to find the money to pay for drugs that cost hundreds or even thousands of dollars a prescription when the price would be largely a non-issue if they sold for the generic price.

In the case of the tech sector, Google, Apple, Microsoft, and Samsung compete at least as much in their legal departments as in the quality of the products they develop. Patents are more often used to harass competitors than to protect innovation — and that is what the business press says.

In the realm of copyright, we have the efforts by the entertainment industry to turn us all into junior copyright cops through measures like SOPA or PIPA.

So intellectual property is a really big deal in the modern economy. And what is neat about it is that these property relations are almost infinitely malleable. (Okay, all property relations are malleable, but IP seems to offer much more room.) That’s the key point that we all have to understand because the bad guys want to convince us that patents and copyrights came to us from on high and that it is our obligation to enforce them in their current or strengthened form, otherwise we are dirty communists.

It’s great to see that Krugman may now be on the case. Perhaps he will be able to teach the economists a bit of economics. (Hint: an intro textbook goes far here. Large gaps between price and marginal cost are bad in trade, much larger gaps between price and marginal cost are really bad when it comes to intellectual property.)

The Structural Genocide That Is Capitalism

… With his antepenultimate chapter [of his book Capitalism: A Structural Genocide], “Legitimizing the Illegitimate,” [author Garry] Leech follows Gramsci in seeking explanations for the means by which such a brutal system as capitalism has reproduced itself over time. He observes plainly that “most people’s world views currently reflect the values of capital,” at least within more affluent northern societies, and that capitalism proceeds with its genocidal proclivities while enjoying “the apparent consent of a significant portion of the world’s population.” Like Gramsci, Leech largely faults the hegemonic cultural processes that obtain within core-imperial societies - formal education, the media, work arrangements, etc. - for normalizing the prevailing state of affairs, in part by excluding the barbarous proceedings of capital from consideration - in contradistinction to his own volume. Channeling Theodor Adorno, Max Horkheimer and other theorists with similar concerns, Leech notes that Western consumers remain largely ignorant of the extreme violence that is required as the very basis for the relative privileges they enjoy in global terms; worse, perhaps, most Northerners - a majority of whom, claims Leech, enjoy “middle-class lifestyle[s]” - have the capacity to escape the alienation driven by capital precisely by engaging in mindless consumerism, thus perpetuating the vicious cycle. [must read]

Current ‘globalization’ is historically related to the epics of imperialism that preceded World Wars One and Two. In contrast to the theories of economists, existing ‘global’ relations retain strong ties to earlier imperial relations. The ‘state capitalism’ of modern China has roots in the mercantilist strategies of imperial England of which China was colonial subject. European ‘corporate’ relations in Africa strongly follow historical imperial relations. And these earlier imperial relations were clearly developed as modes of exploitation and extraction—the dependencies that developed were conceived to force cooperation with imperial imperatives. The results—vast wealth extraction, imperial tensions that led to the most destructive wars in human history, the temporary evictions of imperial powers from their colonies (only to return as ‘free trade’ relations) and new and ‘improved’ strategies of forced dependence. The relevant points are: current circumstance has precedence in prior history; engineered dependence is a colonial strategy of expropriation, and other than a few hundred rich families in the West, we are all colonial subjects under the ‘new’ globalization now. Rob Urie, The Corporate State and Manufactured Dependence

The Corporate State and Manufactured Dependence | Rob Urie

An argument often heard in the 1980s and ‘90s by those favoring lower taxes on the rich was the rich could avoid paying taxes because they had the resources to do so, so why not be pragmatic and set tax rates low enough the rich would actually pay them? The people making this argument overlapped substantially with those arguing poor, and particularly black and brown, drug law ‘offenders’ should face mandatory sentences of decades in prison for drug convictions to ‘send a message’ drug laws will be enforced. The obvious question back is —why would harsh prison sentences dissuade people from using drugs but not from avoiding paying taxes?

This disconnect has elements of racism and class bias, but there is also a deeper precept that economic crimes are ‘victimless.’ With respect to taxes, there are two dimensions here—the premise economic resources are in the first place legitimately distributed and that tax avoidance garners no adverse social consequences. The sources of wealth accumulation in recent decades are inherited (unearned) wealth, corporate executives using monopoly power to extract economic rents, and finance dependent on public backstops and guarantees. None of these sources is supported by the economic theories of capitalism. And the social costs of tax avoidance are evident in poor schools, a dysfunctional healthcare system, deteriorating infrastructure, widespread poverty and under-funded retirement accounts. Economic crimes do have consequences. [++]