The American Bear


Chicago Teachers Build a Movement | Glen Ford

… [T]his is not about costs; that’s just a cover story. It’s about further privatizing the public schools, destroying the union, and destabilizing neighborhoods full of people that the mayor and his big business cronies would, ultimately, like to expel from the city, entirely. The teachers know it, and so does a growing portion of the community, who have joined in common cause.

The teachers have filed two class action suits against the closings, and the mayor’s school board appointees were set to take a pro-forma vote on the matter, on Wednesday. However, the teachers union fully understands that they are engaged in a political battle royalwith forces that are bigger than the mayor’s office. Philadelphia and cities across the country face near-identical assaults on their public schools, part of a full-fledged austerity offensive by corporate America. The Lords of Capital are privatizing, financializing, monetizing and de-unionizing everything.

American racism makes inner city public schools an easier target, and the privatizers have a great ally in President Barack Obama. Mayor Rahm Emanuel is best known as Obama’s former chief of staff, but he also made millions as an investment banker. Wall Street hedge funders and other speculators are betting heavily on school privatization as the next great investment frontier. Chicago’s teachers are attempting to build a community fight-back coalition that can break the stranglehold of corporate rule, and serve as an example to teachers unions and Black and brown communities across the nation. In the fight against austerity, and for community control of schools, the Chicago Teachers Union is on front line.

Obama Honors Thatcher with TVA “Privitization” Plan, Kicks Ordinary People in the Stomach Again | naked capitalism

President Obama adopted a reflective tone to mark the passing of Maggie Thatcher. Commenting on her death, he stated “the world has lost one of the great champions of freedom and liberty.” In Obama’s proposed budget, we found out what the terms “freedom” and “liberty” mean: the freedom for the old to go hungry and the freedom of the poor to go cold.

The headline issue, cutting Social Security benefits by changing the measurement of inflation (the “chained CPI”), is something that writers on Naked Capitalism have been predicting for a long time. What has come as a shocking (but not surprising) twist is a bombshell buried in Obama’s budget: the proposed privatization of the Tennessee Valley Association. At this point I think it’s important to quote a part of this section of the budget at length:

TVA is a self-financing Government corporation, funding operations through electricity sales and bond financing. In order to meet its future capacity needs, fulfill its environmental responsibilities, and modernize its aging generation system, TVA’s current capital investment plan includes more than $25 billion of expenditures over the next 10 years. However, TVA’s anticipated capital needs are likely to quickly exceed the agency’s $30 billion statutory cap on indebtedness. Reducing or eliminating the Federal Government’s role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path. Given TVA’s debt constraints and the impact to the Federal deficit of its increasing capital expenditures, the Administration intends to undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.

Notice how nonsensical the justification for the “divestiture of TVA” is. The authors clearly acknowledge that the Tennessee Valley Authority is a “self-financing Government corporation”. The TVA issues its own debt and also has income from electricity sales. Yet because its capital expenditures are counted as part of the federal deficit for accounting purposes, privatizing the TVA supposedly counts as a “spending cut”. This is the willful blindness of orthodox thought taken to extreme levels. Privatizing the TVA doesn’t shrink the amount of debt in the economy one cent; all it does is bring that debt onto private balance sheets. In fact, private investors will buy the Authority on mainly on credit, increasing the amount of private debt.

Additionally, these capital expenditures are being made to modernize the TVA, or in other words, increase the amount and value of government assets. Even from an orthodox perspective, what’s important isn’t just the liabilities of the federal government, but also its assets. Businesses account for capital expenditures, transfers and expenditures very differently, but since “the deficit” is the headline number Washington is obsessed with, Obama and congress are obsessed with shrinking that headline number rather then doing things that make sense economically for the federal government.

What this will change is the lives of over nine million people across seven states. It is impossible to underestimate the explosive impact of this policy. Approximately one out of every thirty-five people in the United States get their utilities from the Tennessee Valley Authority. If the past is any guide, an Obama success in privatizing the Authority will lead to explosive price increases that will increase the cost of living all across these states. The devastating effect of this can’t be underestimated. Take Tennessee for example: according to the Census, Tennessee median household income is nearly $9000 below the national median. One of the things that partially offsets this is that the cost of living in Tennessee is 14% below the national average according to the ACCRA cost of living index. Utilities are a major part of that both by directly lowering the cost of utilities for consumers and lowering costs for the businesses they purchase from.

What’s possibly even more frightening is the environmental implications. The Authority is responsible for all sorts of land management, river management and other environmental responsibilities in the region. A complete privatization of the TVA could conceivably eradicate environmental management in the area. Even in a better scenario, another agency would still have to take over those responsibilities, which would involve enormous investment and cost to set up such a large operation. This area has already had to deal with Mountain top removal for many years; it is unclear whether or not it could take another environmental disaster of this sort.

[Unelected ‘financial manager’ Kevyn Orr’s former law firm] Jones Day also represents many of the banks that were primarily responsible for rendering Detroit’s tax base untenable, through devastating home foreclosures. One of them is Bank of America, the parent company of Merrill Lynch, which is a counter party to Detroit’s derivative interest rate swaps. As Tom Stephens explains, that means Merrill Lynch ‘is one of the city’s key creditors.’ So, financial dictator Kevyn Orr will be making decisions on how Detroit will deal with creditors that include his former firm’s Wall Street client, Merrill Lynch. What Kevyn Orr calls his job description would be grounds for an indictment for criminal conspiracy in any society under the rule of law. But, that’s the point: the corporate rulers of America have discarded the rule of law. Glen Ford, The Lords of Capital Seize Detroit

Chicago is ground zero for disastrous 'free market' reforms of education | Micah Uetricht

If you want a glimpse of what slash-and-burn free market education reform does in cities throughout the US, look no further than Chicago. Last week, Chicago Public Schools announced its plan to close 54 public elementary schools in the city by next year – about 8% of all public schools in the city. Almost all are located on the city’s south and west sides in predominantly black neighborhoods.

In a city where the majority of black children live in poverty, in communities long plagued by hyper-segregation,unemployment, youth violence, and disinvestment, these neighborhoods will likely be thrown into further chaos, as students (91% of whom are students of color) are forced to cross into rival gang territories. Public schools, which served as one of the few remaining community anchors, will be shuttered.

Chicago Public Schools claims the move will save $43m annually, and is necessary to close a budget deficit of $1bn over the next three years. The district has a history of using questionable math, issuing loud proclamations of deficits to justify austerity measures like closures, then quietly discovering budget surpluses months later. Even if CPS is telling the truth about the size of its deficit, the numbers on closures don’t quite add up. They would only shrink the district’s deficit by a small percentage and only in the long term, at least according to thedistrict’s statements. Independent analyses also show that past closures have produced minimal or nonexistent savings for the district.

So if budget shortfalls aren’t the real issue, why, in neighborhoods desperately in need of strong public institutions like neighborhood schools, would a district shutter 54 schools and “turn around” or consolidate 17 others? And if the deficit is the issue but savings wouldn’t be seen for several years, why would CPS propose the largest number of school closures in American history, in one fell swoop, rather than proceed cautiously with a few each year for several years?

Perhaps because some within the district are looking to dismantle education as a public good by handing schooling over to free market forces, and they know the only way to accomplish this is through “shock doctrine“-style policies, ramming the closures down the throats of a citizenry that would never freely choose them. [continue]

Our country has already had more than enough experience with separate and unequal school systems. The counterfeit claim that charter privatization is part of a new “civil rights movement” addressing the deep and historic inequality that surrounds our schools is belied by the real impact of rapid charter growth in cities across the country. At the level of state and federal education policy, charters are providing a reform cover for eroding the public school system and an investment opportunity for those who see education as a business rather than a fundamental institution of democratic civic life. Charter Schools and the Future of Public Education (via azspot)

(via azspot)

You know how it goes: the pervasive media mythology tells us that the fight over the schoolhouse is supposedly a battle between greedy self-interested teachers who don’t care about children and benevolent billionaire ‘reformers’ whose political activism is solely focused on the welfare of kids. Epitomizing the media narrative, the Wall Street Journal casts the latter in sanitized terms, re-imagining the billionaires as philanthropic altruists ‘pushing for big changes they say will improve public schools.’ The first reason to scoff at this mythology should be obvious: it simply strains credulity to insist that pedagogues who get paid middling wages but nonetheless devote their lives to educating kids care less about those kids than do the Wall Street hedge funders and billionaire CEOs who finance the so-called ‘reform’ movement. Getting rich off of schoolchildren | (via rachelfershleiser)

(via randomactsofchaos)

On every level, the advocates of educational privatization strive to avoid using the p-word. They deliberately mislabel charter schools, just as unaccountable as every other private business in the land as ‘public charter schools,’ because after all, they use public money. So do Boeing, Lockheed, General Dynamics, Bank of America and Goldman Sachs, but nobody calls these ‘public aerospace companies,’ ‘public military contractors,’ or ‘public banks.’ For the same reason, corporate media refuse to cover the extent of the school closing epidemic, or local opposition to it, for fear of feeding the development of a popular movement against privatization, and Race To The Top, the Obama administration’s signature public education initiative, and the sharp edge of the privatizers, literally driving the wave of school closings, teacher firings, and the adoption of ‘run-the-school-like-a-business’ methods everywhere. On Education, Barack Obama is the President of Privatization. Can We Stop Him? Will We? (via azspot)

(via azspot)

Get Corporations Out of Education: An Open Letter to Arne Duncan | Common Dreams

Dear Mr. Duncan,

As primary, secondary, and university educators who are passionate about the importance of a liberal arts education in building and maintaining a democratic society, we are very concerned with the impact of standardized testing on humanities curricula. The widespread trend of teaching to the test is undermining primary and secondary education. Social studies, history, the fine arts, the study of literatures and languages, drama and music; these and other subjects not assessed in the standardized tests of “No Child Left Behind” are subjects that are themselves being left behind as administrators pressure teachers to raise narrowly conceived test scores in a few core areas.

We seek to build respect for the democratic process, critical thinking skills, writing skills, and understanding that is not accurately measured in multiple-choice tests. (see the Fair Test website for a review of the literature: While we see the Common Core Curriculum as a step in the right direction, we steadfastly reject attempts pushed by testing companies to devise standardized assessments to measure progress in reading, writing, and speaking. Nor do we believe that computer programs currently being developed by major assessment corporations, or any form of outsourcing of essay assessments, are viable solutions.

Put your faith in teachers rather than corporate interests to assess reading, writing, and speaking. Do not allow corporations to control American education.

Instead of relying on standardized tests, we believe that the best way to pursue higher standards in reading, writing, and speaking skills is to develop standardized and widely accepted rubrics for assessment and allow teachers to assess their students with these rubrics.

We are very concerned with the extent to which current educational policies have embraced what John Dewey would call “instrumental rationality” in seeking solutions that can be statistically measured. We are currently seeing a national backlash against such measurements from parents, teachers, and administrators. These statistical measures merely confirm the very real social gaps between the haves and the have-nots in American education. (For a review of the literature see here).


[H]uman beings matter little in the corporate state. We myopically serve the rapacious appetites of those dedicated to exploitation and maximizing profit. And our corporate masters view prisons—as they do education, health care and war—as a business. The 320-bed Elizabeth Detention Center, which houses only men, is run by one of the largest operators and owners of for-profit prisons in the country, Corrections Corporation of America. CCA, traded on the New York Stock Exchange, has annual revenues in excess of $1.7 billion. An average of 81,384 inmates are in its facilities on any one day. This is a greater number, the American Civil Liberties Union points out in a 2011 report, ‘Banking on Bondage: Private Prisons and Mass Incarceration,’ than that held by the states of New York and New Jersey combined. The for-profit prisons and their lobbyists in Washington and state capitals have successfully blocked immigration reform, have prevented a challenge to our draconian drug laws and are pushing through tougher detention policies. Locking up more and more human beings is the bedrock of the industry’s profits. These corporations are the engines behind the explosion of our prison system. They are the reason we have spent $300 billion on new prisons since 1980. They are also the reason serious reform is impossible. Chris Hedges, Profiting From Human Misery

One Tiny State’s Movement to Ban Private Prisons | Jonathan Leavitt

Vermont, the most progressive state in America, spent over $14 million last year to lock up Vermonters in for-profit prisons like Lee Adjustment Center, located in Kentucky’s Daniel Boone National Forest. Private prisons like Corrections Corporation of America (CCA)’s Lee Adjustment Center offer no mental health, educational or rehabilitational services, but they do post massive corporate profits; CCA showed profits of $1.7 billion in 2011 alone. As best-selling author Michelle Alexander notes in her seminal book The New Jim Crow, more black men are under correctional control now than were enslaved in 1850. A recent New Yorker think piece noted more Americans are now incarcerated than there were imprisoned in Stalin’s gulags. Clearly a dialogue about the intersection of mass incarceration, budget crises, and privatization is unfolding. A group of Vermonters working out of Church basements and living rooms, is attempting to build a movement to push this conversation forward by passing a historic law banning Vermont’s use of for-profit prisons. [READ]

Health Care and Pursuit of Profit Make a Poor Mix | NY Times

"Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly."

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state.

Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making “proprietary” institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues’ research in his 1988 book “The Nonprofit Economy,” the economist Burton Weisbrod provided a straightforward explanation: “differences in the pursuit of profit.” Sedatives are cheap, Mr. Weisbrod noted. “Less expensive than, say, giving special attention to more active patients who need to be kept busy.”

This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.

A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system — patients, for instance. One study found that patients’ mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined.

These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs?

Read on

See also: John Galt Kills Americans by Jim White


Spaniards protest against healthcare privatization
January 7, 2013

Thousands of Spanish medical workers marched through downtown Madrid on Monday to protest against budget cuts and plans to partly privatize their cherished national health service.

The march is part of a series of such demonstrations, described as a “white tide” because of the color of the medical scrubs many protesters wear. Participants on Monday walked behind a large banner saying, “Health care is not to be sold, it’s to be defended.”

Monica Garcia, spokeswoman for the Association of Medical Specialists of Madrid, which initiated the march, said her organization would continue to protest “the loss of our public health care, a national heritage that belongs to us and not to the government.”

She said the regional government was trying “to obtain economic benefit” from a system it had not invested in.

Health care and education are currently administered by Spain’s 17 semi-autonomous regions rather than the central government.

Many regions are struggling financially as Spain’s economy has fallen back into recession, having never recovered from a real estate crash in 2008. Some regions overspent in the good times but are now unable to borrow on financial markets to repay their huge debts, forcing them to make savings and even request rescue aid from the central government.

The region of Madrid proposes selling the management of six of 20 large public hospitals in its territory and 27 of 268 health centers. It argues that’s needed to fix the region’s finances and secure health services.

Doctor Agustin Reverte, 31, said privatizations would lead to less diagnostic tests on patients who will be attended by fewer medical staff, reducing the overall quality of the service.

“Those in government have money, so they don’t care if they have to pay for health care,” said Aurora Rojas, a 55-year-old nurse. “But the rest of us who just have a regular salary will not be able to afford decent treatment,” she said.


(Source: thepeoplesrecord)

America’s Deceptive 2012 Fiscal Cliff, Part III – Why Today’s Fiscal Squeeze Imposes Needless Austerity | Michael Hudson

The Federal Reserve’s three waves of Quantitative Easing since 2008 show how easy it is to create free money. Yet this has been provided only to the largest banks, not to strapped homeowners or industry. An immediate $2 trillion in “cash for trash” took the form of the Fed creating new bank-reserve credit in exchange for mortgage-backed securities valued far above market prices. QE2 provided another $800 billion in 2011-12. The banks used this injection of credit for interest rate arbitrage and exchange rate speculation on the currencies of Brazil, Australia and other high-interest-rate economies. So nearly all the Fed’s new money went abroad rather than being lent out for investment or employment at home.

U.S. Government debt was run up mainly to re-inflate prices for packaged bank mortgages, and hence real estate prices. Instead of alleviating private-sector debt by writing down mortgages in line with the homeowners’ ability to pay, the Federal Reserve and Treasury created money to support property prices – to push the banking system’s balance sheets back above negative net worth. The Fed’s QE3 program in 2012-13 created money to buy mortgage-backed securities each month, to provide banks with money to lend to new property buyers.

For the economy at large, the debts were left in place. Yet commentators focused only on government debt. In a double standard, they accused budget deficits of inflating wages and consumer prices, yet the explicit aim of quantitative easing was to support asset prices. Inflating asset prices on credit is deemed to be good for the economy, despite loading it down with debt. But public spending into the “real” economy, raising employment levels and sustaining consumer spending, is deemed bad – except when this is financed by personal borrowing from the banks. So in each case, increasing bank profits is the standard by which fiscal policy is to be judged!

[…] So despite the fact that the financial system is broken, it has gained control over public policy to sustain and even obtain tax favoritism for a dysfunctional overgrowth of bank credit. Unlike the progress of science and technology, this debt is not part of nature. It is a social construct. The financial sector has politicized it by pressing to privatize economic rent rather than collect it as the tax base. This financialization of rent-extracting opportunities does not reflect a natural or inevitable evolution of “the market.” It is a capture of market structures and fiscal policy. Bank lobbyists have campaigned to shift the economic arena to the political sphere of lawmaking and tax policy, with side battlegrounds in the mass media and universities to capture the hearts and minds of voters to believe that the quickest and most efficient way to build up wealth is by bank credit and debt leverage.

Throwing Supporters Under The Bus – It’s Easy If You’re A D.C. Insider | Steve Hynd

You really should click on over to AmericaBlog to read Gaius Publius on what the DC insiderers have decided is a great deal for everyone they care about: Obama’s fiscal cliff frame: “Let’s each kill one of our own”.

Politico discusses the Klein-described deal, and in the process, confirms that this is where the discussion is being had. Politico’s first sentence (my emphasis):

The script for a fiscal cliff deal was always supposed to be simple: Democrats would win on taxes. Republicans would win on entitlements.

It’s that simple. Politico is DC insider-central on this stuff, especially when they offer throw-away assumptions like the one above. The rest of the article details how small a deal Republicans are getting — the knife cut Obama delivers to Medicare may be mainly symbolic. Fair enough. On the taxes side, the compromise tax-cut agreement may also be symbolic. …

Again, the skeleton of the Obama-Boehner bargain is a mutually-agreed betrayal — “You kill one of yours, and I’ll kill one of mine.” It’s a mutual “Et tu, brute?” moment.

GP also reminds readers that  ”Obamacare is privatized medical care. It forces citizens to buy medical insurance from private insurers — like United Health Care, for example — instead of offering single payer government insurance, or even a public option to compete with private insurers.” So anyone from the DC insiderer set that tells you not to worry, the less affluent affected by any cuts to Medicare will get folded into the ACA, is advocating privatizing a public healthcare plan. Don’t be fooled by their three card monte spin, it’s just more of the same old.

In essence, it is a class war of the global rich against the rest of humanity. Its purpose is to destroy the gains made by working people since 1945, to increase the rate of exploitation and profit, and to redistribute wealth from labour to capital. The initial impulse to do this was intensified competition between capitalists during the Long Recession. Shrinking markets meant that bosses needed to cut costs by sacking workers and driving down wages. But once begun, the global ‘race to the bottom’ became a permanent feature of a new economic order emerging from the crisis. A Marxist History of the World part 102: What is neoliberalism? | Counterfire