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Archive for November, 2010

AZ Senators playing games and promoting international conflicts

Monday, November 29th, 2010

“John McCain never met a war he didn’t like.”

This phrase was repeated several times during the recent election. Stories on The Hill blog and today’s Arizona Daily Star prove that slogan to be right. From The Hill:

Sen. John McCain (R-Ariz.) argued in an interview Sunday that the U.S. has not exacted enough pressure on North Korea and that the current tensions in the region may present an opportunity for regime change.

“I think it’s time we talked about regime change in North Korea,” he said, quickly adding that he did not mean “military action.”

Yeah, right, he’s not talking about “military action”. How else do you accomplish “regime change?” McCain goes on to chide China– a diplomat, he’s not.

“We’ve got to understand that China is not what we want it to be, but is not playing a responsible role on the world stage, much less on the Korean Peninsula,” McCain said. “They [China] could bring the North Korean economy to its knees if they wanted to. And I cannot believe that the Chinese should, in a mature fashion, not find it in their interest to restrain North Korea. So far, they are not.”

“We have to make adjustments to our policies,” he said of China, calling it the “key” to keeping peace.

China has called for the renewal of the six-party talks, which would involve the U.S., Japan, Russia, and North and South Korea.

Not to be outdone in the saber-rattling category, Arizona’s other senator, Jon Kyl, has been delaying the ratification of the New Start treaty with Russia– saying the Senate has “higher priorities” in this lame duck session than nuclear treaty.

What could be a higher priority than national security and the control of nuclear proliferation? Tax cuts for the rich, of course. From the Arizona Daily Star:

Kyl denied there was any partisanship behind his calls for a delay. He said the Senate has more urgent business to attend to in the weeks before it breaks for Christmas, including dealing with potential tax increases and funding the government through the rest of the budget year…

Without [ratification of the treat], as of next week the U.S. will have had no weapons inspectors in Russia to verify cuts in its nuclear arsenal since the last treaty expired in 2009.

This is politics as usual from Arizona’s 2 Senators. They’re not taking care of business; they’re grandstanding in the media to pump up the importance of their largest patron– the military industrial complex. When the Congress starts talking about budget cuts next year– if they can make the case for an evil scary world– they can protect the Pentagon budget.

I got an idea, Jon and John, if you really want to deal with the countries budget problems: 1) let the tax cuts sunset; 2) don’t start any new wars; 3) end the ongoing wars; 4) wage peace; 5) invest in the country’s future– rather than investing in destruction.

We’ve forgotten the true meaning of ‘Black Friday’

Thursday, November 25th, 2010

Black Friday started as a protest against rampant consumerism.

Thanks to the tradition of giving salaried workers the Friday after Thanksgiving as a vacation day + the availability of cheap credit + big sales and heavy retail promotions– the last Friday in November became the biggest shopping day of the year decades ago.

As a protest against rabid consumerism and the commercialization of Thanksgiving and Christmas– economic protesters created the concept of Black Friday several years ago. As such, it was promoted as a day to stay home from the stores and not “shop ’til you drop”.

The buy local movement first tried to co-opt Black Friday and turn it into a protest against shopping at multi-national chain stores a few years ago.

More recently, the multi-national chain stores have successfully buried the shopping protest movement and adopted the Black Friday label as their own. The 700+ pages of advertisements that were included with today’s Arizona Daily Star plus 2! front page stories in the Star about shopping (and they call themselves journalists?) are evidence that rabid consumerism is alive and well in the US. There are even Black Friday coupon websites that promote shopping at Target, Kohl’s, Sears, and others.

Sigh.

I agree with the buy local movement’s spin on Black Friday. If you really want to shop on the Friday after Thanksgiving, buy local. Don’t support the multi-national chains who exploit workers in other countries– and consumers at home.

Let’s recapture the true meaning of Black Friday– a day of protest against over-the-top consumerism and the nationwide chain stores who push cheap imports upon us.

2011 UPDATE: Occupy Movement encourages citizens to shop Mom and Pop stores on Black Friday.

Paulo Freire: Huppenthal/Horne’s worst nightmare

Wednesday, November 24th, 2010

Two of the most depressing outcomes of the 2010 election were John “I-love-charter-schools” Huppenthal’s defeat of Penny Kotterman for Superintendent of Public Instruction and Tom “what SEC violation?” Horne’s defeat of Felicia Rotellini for state Attorney General.

Why are these outcomes particularly disturbing? Because of the damage these 2 right-wing ideologues can (and most likely will) do to public education in Arizona. The Three Sonorans blog has kept us well-informed about Horne’s assault on Raza Studies at Tucson High School, but the campaign against public education is nationwide, and it goes well beyond what is happening in our own backyards.

Yesterday, Truthout, a left-wing political publication, published an well-thought-out article about educator and social justice advocate Paulo Freire.

Of Freire, Truthout writes (emphasis added)…

[Freire is] one of the most important educators of the 20th century and is considered one of the most important theorists of “critical pedagogy” – the educational movement guided by both passion and principle to help students develop a consciousness of freedom, recognize authoritarian tendencies, empower the imagination, connect knowledge and truth to power and learn to read both the word and the world as part of a broader struggle for agency, justice and democracy.

They go on to say…

with institutions of public and higher education increasingly under siege by a host of neoliberal and conservative forces, it is imperative for educators to acknowledge Freire’s understanding of the empowering and democratic potential of education. Critical pedagogy currently offers the very best, perhaps the only, chance for young people to develop and assert a sense of their rights and responsibilities to participate in governing, and not simply being governed by prevailing ideological and material forces.

This is why Freire is Huppenthal/ Horne’s worst enemy. Freire encourages educators to teach students to think critically– not simply to memorize facts or preform for standardized tests. The Huppenthal/Horne attack on Raza Studies is just the tip of the iceberg. It is one tiny piece of the nationwide conservative movement to change public education — or eliminate it.

Public education is the great leveler. Public education has the power to empower– and that’s what the conservative puppets are afraid of.

Here is an excerpt from Truthout article (again with emphasis added). Click on the title for the whole article.

Lessons to Be Learned From Paulo Freire as Education Is Being Taken Over by the Mega Rich

At a time when memory is being erased and the political relevance of education is dismissed in the language of measurement and quantification, it is all the more important to remember the legacy and work of Paulo Freire. Freire is one of the most important educators of the 20th century and is considered one of the most important theorists of “critical pedagogy” – the educational movement guided by both passion and principle to help students develop a consciousness of freedom, recognize authoritarian tendencies, empower the imagination, connect knowledge and truth to power and learn to read both the word and the world as part of a broader struggle for agency, justice and democracy. His groundbreaking book, “Pedagogy of the Oppressed,” has sold more than a million copies and is deservedly being commemorated this year – the 40th anniversary of its appearance in English translation – after having exerted its influence over generations of teachers and intellectuals in the Americas and abroad.

Since the 1980s, there have been too few intellectuals on the North American educational scene who have matched Freire’s theoretical rigor, civic courage and sense of moral responsibility. And his example is more important now than ever before: with institutions of public and higher education increasingly under siege by a host of neoliberal and conservative forces, it is imperative for educators to acknowledge Freire’s understanding of the empowering and democratic potential of education. Critical pedagogy currently offers the very best, perhaps the only, chance for young people to develop and assert a sense of their rights and responsibilities to participate in governing, and not simply being governed by prevailing ideological and material forces.

When we survey the current state of education in the United States, we see that most universities are now dominated by instrumentalist and conservative ideologies, hooked on methods, slavishly wedded to accountability measures and run by administrators who often lack a broader vision of education as a force for strengthening civic imagination and expanding democratic public life. One consequence is that a concern with excellence has been removed from matters of equity, while higher education – once conceptualized as a fundamental public good – has been reduced to a private good, now available almost exclusively to those with the financial means. Universities are increasingly defined through the corporate demand to provide the skills, knowledge and credentials in building a workforce that will enable the United States to compete against blockbuster growth in China and other southeast Asian markets, while maintaining its role as the major global economic and military power. There is little interest in understanding the pedagogical foundation of higher education as a deeply civic and political project that provides the conditions for individual autonomy and takes liberation and the practice of freedom as a collective goal.

Public education fares even worse. Dominated by pedagogies that are utterly instrumental, geared toward memorization, conformity and high-stakes test taking, public schools have become intellectual dead zones and punishment centers as far removed from teaching civic values and expanding the imaginations of students as one can imagine. The profound disdain for public education is evident not only in Obama’s test-driven, privatized and charter school reform movement, but also in the hostile takeover of public education now taking place among the ultra-rich and hedge fund zombies, who get massive tax breaks from gaining control of charter schools. The public in education has now become the enemy of educational reform. How else can one explain the shameful appointment by Mayor Michael Bloomberg of Cathleen Black, the president of Hearst Magazine, as the next chancellor of the New York City public school system? Not only does she not have any experience in education and is totally unqualified for the job, but her background mimics the worst of elite arrogance and unaccountable power. Surely, one has to take note of the background of someone who should be a model for young people when such a background includes, as reported in The New York Times: “riding horses at a country club where blacks and Jews were not allowed …. lending a $47,000 bracelet to a Manhattan museum … and [refusing] interviews since her appointment.”(1) With friends like Rupert Murduch, it should come as no surprise that she once worked as a chief lobbyist for the newspaper industry in the 1990s “fighting a ban on tobacco advertising,”(2) which is often targeted toward the young. It seems that, when it comes to the elite of business culture, ignorance about education now ranks as a virtue. Then, of course, there is the sticky question of whether such a candidate qualifies as a model of civic integrity and courage for the many teachers and children under her leadership. Public values and public education surely take a nose dive in this appointment, but this is also symptomatic of what is happening to public education throughout the country.

Against the regime of “banking education,” stripped of all critical elements of teaching and learning, Freire believed that education, in the broadest sense, was eminently political because it offered students the conditions for self-reflection, a self-managed life and critical agency. For Freire, pedagogy was central to a formative culture that makes both critical consciousness and social action possible. Pedagogy in this sense connected learning to social change; it was a project and provocation that challenged students to critically engage with the world so they could act on it. As the sociologist Stanley Aronowitz has noted, Freire’s pedagogy helped learners “become aware of the forces that have hitherto ruled their lives and especially shaped their consciousness.”(3) What Freire made clear is that pedagogy at its best is not about training in techniques and methods, nor does it involve coercion or political indoctrination. Indeed, far from a mere method or an a priori technique to be imposed on all students, education is a political and moral practice that provides the knowledge, skills and social relations that enable students to explore for themselves the possibilities of what it means to be engaged citizens, while expanding and deepening their participation in the promise of a substantive democracy. According to Freire, critical pedagogy afforded students the opportunity to read, write and learn from a position of agency – to engage in a culture of questioning that demands far more than competency in rote learning and the application of acquired skills. For Freire, pedagogy had to be meaningful in order to be critical and transformative. This meant that personal experience became a valuable resource that gave students the opportunity to relate their own narratives, social relations and histories to what was being taught. It also signified a resource to help students locate themselves in the concrete conditions of their daily lives, while furthering their understanding of the limits often imposed by such conditions. Under such circumstances, experience became a starting point, an object of inquiry that could be affirmed, critically interrogated and used as resource to engage broader modes of knowledge and understanding. Rather than taking the place of theory, experience worked in tandem with theory in order to dispel the notion that experience provided some form of unambiguous truth or political guarantee. Experience was crucial, but it had to take a detour through theory, self-reflection and critique to become a meaningful pedagogical resource.

Critical pedagogy, for Freire, meant imagining literacy as not simply the mastering of specific skills, but also as a mode of intervention, a way of learning about and reading the word as a basis for intervening in the world. Critical thinking was not reducible to an object lesson in test taking. It was not about the task of memorizing so-called facts, decontextualized and unrelated to present conditions. To the contrary, it was about offering a way of thinking beyond the seeming naturalness or inevitability of the current state of things, challenging assumptions validated by “common sense,” soaring beyond the immediate confines of one’s experiences, entering into a dialogue with history and imagining a future that would not merely reproduce the present.

By way of illustration, Freirean pedagogy might stage the dynamic interplay of audio, visual and print texts as part of a broader examination of history itself as a site of struggle, one that might offer some insights into students’ own experiences and lives in the contemporary moment. For example, a history class might involve reading and watching films about school desegregation in the 1950s and ’60s as part of a broader pedagogical engagement with the civil rights movement and the massive protests that developed over educational access and student rights to literacy. It would also open up opportunities to talk about why these struggles are still part of the experience of many North American youth today, particularly poor black and brown youth who are denied equality of opportunity by virtue of market-based rather than legal segregation. Students could be asked to write short papers that speculate on the meaning and the power of literacy and why it was so central to the civil rights movement. These may be read by the entire class, with each student elaborating his or her position and offering commentary as a way of entering into a critical discussion of the history of racial exclusion, reflecting on how its ideologies and formations still haunt American society in spite of the triumphal dawn of an allegedly post-racial Obama era. In this pedagogical context, students learn how to expand their own sense of agency, while recognizing that to be voiceless is to be powerless. Central to such a pedagogy is shifting the emphasis from teachers to students, and making visible the relationships among knowledge, authority and power. Giving students the opportunity to be problem posers and engage in a culture of questioning in the classroom foregrounds the crucial issue of who has control over the conditions of learning, and how specific modes of knowledge, identities and authority are constructed within particular sets of classroom relations. Under such circumstances, knowledge is not simply received by students, but actively transformed, open to be challenged and related to the self as an essential step toward agency, self-representation and learning how to govern rather than simply be governed. At the same time, students also learn how to engage others in critical dialogue and be held accountable for their views.

Thus, critical pedagogy insists that one of the fundamental tasks of educators is to make sure that the future points the way to a more socially just world, a world in which critique and possibility – in conjunction with the values of reason, freedom and equality – function to alter the grounds upon which life is lived. Though it rejects a notion of literacy as the transmission of facts or skills tied to the latest market trends, critical pedagogy is hardly a prescription for political indoctrination as the advocates of standardization and testing often insist. It offers students new ways to think and act creatively and independently, while making clear that the educator’s task, as Aronowitz points out, “is to encourage human agency, not mold it in the manner of Pygmalion.”(4) What critical pedagogy does insist upon is that education cannot be neutral. It is always directive in its attempt to enable students to understand the larger world and their role in it. Moreover, it is inevitably a deliberate attempt to influence how and what knowledge, values, desires and identities are produced within particular sets of class and social relations. For Freire, pedagogy always presupposes some notion of a more equal and just future; and as such, it should always function in part as a provocation that takes students beyond the world they know in order to expand the range of human possibilities and democratic values. Central to critical pedagogy is the recognition that the way we educate our youth is related to the future that we hope for and that such a future should offer students a life that leads to the deepening of freedom and social justice. Even within the privileged precincts of higher education, Freire said that educators should nourish those pedagogical practices that promote “a concern with keeping the forever unexhausted and unfulfilled human potential open, fighting back all attempts to foreclose and pre-empt the further unraveling of human possibilities, prodding human society to go on questioning itself and preventing that questioning from ever stalling or being declared finished.”(5) The notion of the unfinished human being resonated with Zygmunt Bauman notion that society never reached the limits of justice, thus, rejecting any notion of the end of history, ideology or how we imagine the future. This language of critique and educated hope was his legacy, one that is increasingly absent from many liberal and conservative discourses about current educational problems and appropriate avenues of reform.

When I began teaching, Freire became an essential influence in helping me to understand the broad contours of my ethical responsibilities as a teacher. Later, his work would help me come to terms with the complexities of my relationship to universities as powerful and privileged institutions that seemed far removed from the daily life of the working-class communities in which I had grown up. I first met Paulo in the early 1980s, just after my tenure as a professor at Boston University had been opposed by its President John Silber. Paulo was giving a talk at the University of Massachusetts at Amherst, and he came to my house in Boston for dinner. Given Paulo’s reputation as a powerful intellectual, I recall initially being astounded by his profound humility. I remember being greeted with such warmth and sincerity that I felt completely at ease with him. We talked for a long time that night about his exile, how I had been attacked by a right-wing university administration, what it meant to be a working-class intellectual and the risks one had to take to make a difference. I was in a very bad place after being denied tenure and had no idea what the future would hold. On that night, a friendship was forged that would last until Paulo’s death. I am convinced that had it not been for Paulo and Donaldo Macedo – a linguist, translator and a friend of Paulo’s and mine – I might not have stayed in the field of education. Their passion for education and their profound humanity convinced me that teaching was not a job like any other, but a crucial site of struggle, and that, ultimately, whatever risks had to be taken were well worth it.

I have encountered many intellectuals throughout my career in academe, but Paulo was exceptionally generous, eager to help younger intellectuals publish their work, willing to write letters of support and always giving as much as possible of himself in the service of others. The early 1980s were exciting years in education studies in the United States, and Paulo was really at the center of it. Paulo and I together started a Critical Education and Culture series with Bergin & Garvey Publishers, which brought out the work of more than 60 young authors, many of whom went on to have a significant influence in the university. Jim Bergin became Paulo’s patron as his American publisher; Donaldo became his translator and co-author; Ira Shor also played a important role in spreading Paulo’s work and wrote a number of brilliant books integrating both theory and practice as part of Paulo’s notion of critical pedagogy. Together, we worked tirelessly to circulate Paulo’s work, always with the hope of inviting him back to America so we could meet, talk, drink good wine and deepen a commitment to critical education that had all marked us in different ways.

Paulo, occupying the often difficult space between existing politics and the as yet possible, spent his life guided by the beliefs that the radical elements of democracy were worth struggling for, that critical education was a basic element of progressive social change and that how we think about politics was inseparable from how we come to understand the world, power and the moral life we aspire to lead. In many ways, Paulo embodied the important but often problematic relationship between the personal and the political. His own life was a testimony not only to his belief in democratic principles, but also to the notion that one’s life had to come as close as possible to modeling the social relations and experiences that spoke to a more humane and democratic future. At the same time, Paulo never moralized about politics; he never evoked shame or collapsed the political into the personal when talking about social issues. Private problems were always to be understood in relation to larger public issues. For example, Paulo never reduced an understanding of homelessness, poverty and unemployment to the failing of individual character, laziness, indifference or a lack of personal responsibility, but instead viewed such issues as complex systemic problems generated by economic and political structures that produced massive amounts of inequality, suffering and despair – and social problems far beyond the reach of limited individual capacities to cause or redress. His belief in a substantive democracy, as well as his deep and abiding faith in the ability of people to resist the weight of oppressive institutions and ideologies, was forged in a spirit of struggle tempered by both the grim realities of his own imprisonment and exile and the belief that education and hope are the conditions of social action and political change. Acutely aware that many contemporary versions of hope occupied their own corner in Disneyland, Paulo was passionate about recovering and rearticulating hope through, in his words, an “understanding of history as opportunity and not determinism.”(6) Hope was an act of moral imagination that enabled educators and others to think otherwise in order to act otherwise.

Paulo offered no recipes for those in need of instant theoretical and political fixes. I was often amazed at how patient he always was in dealing with people who wanted him to provide menu-like answers to the problems they raised about education, people who did not realize that their demands undermined his own insistence that critical pedagogy is defined by its context and must be approached as a project of individual and social transformation – that it could never be reduced to a mere method. Contexts indeed mattered to Paulo. He was concerned how contexts mapped in distinctive ways the relationships among knowledge, language, everyday life and the machineries of power. Any pedagogy that calls itself Freirean must acknowledge this key principle that our current knowledge is contingent on particular historical contexts and political forces. For example, each classroom will be affected by the different experiences students bring to the class, the resources made available for classroom use, the relations of governance bearing down on teacher-student relations, the authority exercised by administrations regarding the boundaries of teacher autonomy and the theoretical and political discourses used by teachers to read and frame their responses to the diverse historical, economic and cultural forces informing classroom dialogue. Any understanding of the project and practices that inform critical pedagogy has to begin with recognizing the forces at work in such contexts, and which must be confronted by educators and schools everyday. Pedagogy, in this instance, looked for answers to what it meant to connect learning to fulfilling the capacities for self and social determination not outside, but within the institutions and social relations in which desires, agency and identities were shaped and struggled over. The role that education played in connecting truth to reason, learning to social justice and knowledge to modes of self and social understanding were complex and demanded a refusal on the part of teachers, students and parents to divorce education from both politics and matters of social responsibility. Responsibility was not a retreat from politics, but a serious embrace of what it meant to both think and act politics as part of a democratic project in which pedagogy becomes a primary consideration for enabling the formative culture and agents that make democratization possible.

Paulo also acknowledged the importance of understanding these particular and local contexts in relation to larger global and transnational forces. Making the pedagogical more political meant moving beyond the celebration of tribal mentalities and developing a praxis that foregrounded “power, history, memory, relational analysis, justice (not just representation) and ethics as the issues central to transnational democratic struggles.”(7) Culture and politics mutually informed each other in ways that spoke to histories, whose presences and absences had to be narrated as part of a larger struggle over democratic values, relations and modes of agency. Freire recognized that it was through the complex production of experience within multilayered registers of power and culture that people recognized, narrated and transformed their place in the world. Paulo challenged the separation of cultural experiences from politics, pedagogy and power itself, but he did not make the mistake of many of his contemporaries by conflating cultural experience with a limited notion of identity politics. While he had a profound faith in the ability of ordinary people to shape history and their own destinies, he refused to romanticize individuals and cultures that experienced oppressive social conditions. Of course, he recognized that power privileged certain forms of cultural capital – certain modes of speaking, living, being and acting in the world – but he did not believe that subordinate or oppressed cultures were free of the contaminating effects of oppressive ideological and institutional relations of power. Consequently, culture – as a crucial educational force influencing larger social structures as well as in the most intimate spheres of identity formation – could be viewed as nothing less than an ongoing site of struggle and power in contemporary society.

‘The Warning’: Before the 2008 crash, one valiant regulator fought for sanity

Wednesday, November 24th, 2010

Brooksley Born (Photo from American Bar Association website)

How did the world get into such a financial mess? A few years ago, “too-big-to-fail” financial institutions started failing. Now countries are starting to fail.

“The Warning,” a 2009 Frontline story, reveals the roots of the 2008 economic crash. ”The Warning” traces the 2008 crash directly back to the free-wheeling, let-the-market-decide policies of Alan Greenspan, head of the Federal Reserve Bank from 1987 – 2006. To say that Greenspan was a deregulation champion is a gross understatement.

The Frontline documentary highlights Greenspan’s decisions during the boom years of the Clinton Administration. Greenspan worked closely with former Treasury Secretary Robert Rubin, and Assistant Treasury Secretary Larry Summers to promote self-correction of the market and strongly resisted calls for financial regulation. In fact during his tenure, the Glass-Steagall Act was repealed by Congress.

Following the Great Depression, the Glass-Steagall Act was passed in an attempt to provide financial regulations that would forestall another Great Depression. Among other things, the Glass-Steagall Act prevented banks, insurance companies, and investment firms from forming multi-functioning financial conglomerates. In 1999, The Gramm–Leach–Bliley Act– named for 3 Republican sponsors Sen. Phil Gramm (RTexas), Rep. Jim Leach (RIowa), and Rep.Thomas J. Bliley, Jr. (RVirginia)– repealed the Glass-Steagall Act and allowed the creation of  the “too-big-to-fail” institutions. (Yes, Republican-backed legislation created the types of institutions Republicans are now complaining about bailing out. They also created the need for bailouts by eliminating regulations.)

The full-on deregulation, Republican-controlled Congress not only passed the Financial Services Modernization Act of 1999 (an alternate name for The Gramm–Leach–Bliley Act)  but also ignored the deregulation warnings of one lone Clinton appointee– Brooksley Born. Ignoring her warnings about the out-of-control derivatives market and moving full-speed-ahead on deregulation– both at Greenspan’s urging– Congress unwittingly contributed to the 2008 crash.

As head of the Commodity Futures Trading Commission, Born was in charge of regulating certain financial sectors– including the derivatives market, which had been allowed to grow uncontrollably under Greenspan, Ruben, and Summers. Born fought valiantly for regulation and transparency in the derivatives market, but her efforts at regulation were squashed by the deregulation good ole boys club– Greenspan, Ruben, Summers, and the Republican-controlled Congress.

Born feared that with lack of transparency, financial institutions wouldn’t know how much risky debt other institutions had. This multi-trillion-dollar risk + repeal of the Glass-Steagall Act led to a domino effect when “too-big-to-fail” institutions started failing in 2008. Born’s worst nightmare– which she warned Congress about 10 years earlier– came true.

By the time it came tumbling down in 2008, the over-the-counter derivatives market had grown to $596 trillion (yes, with a T) — almost 3 times the world’s financial assets—including all stock, bonds, and bank deposits (an estimated $167 trillion in 2007).

In October 2008– in the midst of the first wave of the market crash– Greenspan sort of admitted that his staunch support of deregulation may have been misguided. Below is an article from the NY Times.

So, why am I bringing up all of this seemingly old news regarding the crash? Because Congressional Republicans– including several who were in the Congress when the Gramm-Leach-Bliley Act was passed– are again pushing for deregulation and repeal of the Restoring American Stability Act of 2010, financial reform legislation that passed last summer.

We should all take a lesson from Greenspan, Ruben, Gram, Leach, Bliley– and particularly from Born, Glass and Steagall.

“It’ll happen again if we don’t take the appropriate steps,” Born warns. “There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.”

Deregulation of financial institutions doesn’t work. In fact, instead of marching backward to the deregulation of the 1990s, we should march backward to the sanity of Glass-Steagall and fully restore it.

Greenspan Concedes Error on Regulation

WASHINGTON — For years, a Congressional hearing with Alan Greenspan was a marquee event. Lawmakers doted on him as an economic sage. Markets jumped up or down depending on what he said. Politicians in both parties wanted the maestro on their side.

But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform.

Now 82, Mr. Greenspan came in for one of the harshest grillings of his life, as Democratic lawmakers asked him time and again whether he had been wrong, why he had been wrong and whether he was sorry.

Critics, including many economists, now blame the former Fed chairman for the financial crisis that is tipping the economy into a potentially deep recession. Mr. Greenspan’s critics say that he encouraged the bubble in housing prices by keeping interest rates too low for too long and that he failed to rein in the explosive growth of risky and often fraudulent mortgage lending.

“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”

Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”

On a day that brought more bad news about rising home foreclosures and slumping employment, Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.

He noted that the immense and largely unregulated business of spreading financial risk widely, through the use of exotic financial instruments called derivatives, had gotten out of control and had added to the havoc of today’s crisis. As far back as 1994, Mr. Greenspan staunchly and successfully opposed tougher regulation on derivatives.

But on Thursday, he agreed that the multitrillion-dollar market for credit default swaps, instruments originally created to insure bond investors against the risk of default, needed to be restrained.

“This modern risk-management paradigm held sway for decades,” he said. “The whole intellectual edifice, however, collapsed in the summer of last year.”

Mr. Waxman noted that the Fed chairman had been one of the nation’s leading voices for deregulation, displaying past statements in which Mr. Greenspan had argued that government regulators were no better than markets at imposing discipline.

“Were you wrong?” Mr. Waxman asked.

“Partially,” the former Fed chairman reluctantly answered, before trying to parse his concession as thinly as possible.

Mr. Greenspan, celebrated as the “Maestro” in a book about him by Bob Woodward, presided over the Fed for 18 years before he stepped down in January 2006. He steered the economy through one of the longest booms in history, while also presiding over a period of declining inflation.

But as the Fed slashed interest rates to nearly record lows from 2001 until mid-2004, housing prices climbed far faster than inflation or household income year after year. By 2004, a growing number of economists were warning that a speculative bubble in home prices and home construction was under way, which posed the risk of a housing bust.

Mr. Greenspan brushed aside worries about a potential bubble, arguing that housing prices had never endured a nationwide decline and that a bust was highly unlikely.

Mr. Greenspan, along with most other banking regulators in Washington, also resisted calls for tighter regulation of subprime mortgages and other high-risk exotic mortgages that allowed people to borrow far more than they could afford.

The Federal Reserve had broad authority to prohibit deceptive lending practices under a 1994 law called the Home Owner Equity Protection Act . But it took little action during the long housing boom, and fewer than 1 percent of all mortgages were subjected to restrictions under that law.

This year, the Fed greatly tightened its restrictions. But by that time, the subprime market as well as the market for other kinds of exotic mortgages had already been wiped out.

Mr. Greenspan said that he had publicly warned about the “underpricing of risk” in 2005 but that he had never expected the crisis that began to sweep the entire financial system in 2007.

“This crisis,” he told lawmakers, “has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.”

Many Republican lawmakers on the oversight committee tried to blame the mortgage meltdown on the unchecked growth of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage-finance companies that were placed in a government conservatorship last month. Republicans have argued that Democratic lawmakers blocked measures to reform the companies.

But Mr. Greenspan, who was first appointed by President Ronald Reagan, placed far more blame on the Wall Street companies that bundled subprime mortgages into pools and sold them as mortgage-backed securities. Global demand for the securities was so high, he said, that Wall Street companies pressured lenders to lower their standards and produce more “paper.”

“The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of the crisis) would have been far smaller and defaults accordingly far lower,” he said.

Despite his chagrin over the mortgage mess, the former Fed chairman proposed only one specific regulation: that companies selling mortgage-backed securities be required to hold a significant number themselves.

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”

I must be channeling Carolyn Classen this morning. Today Carolyn wrote about the premier of the Inside Job at The Loft cinema.

How to eliminate the US budget deficit in a few easy steps

Thursday, November 18th, 2010

Fiscal responsibility and a balanced budget were two right wing rallying cries in the recent election.

Repeatedly, Sarah Palin, Ruth McClung and other Mama Grizzlies offered the schmaltzy recommendation that we “sit around the kitchen table like a family” and work together to balance the US budget. Unfortunately, the right wing Mama Grizzlies were just as bad at math as Papa Grizzlies like John Boehner (R-Ohio) and Mitch McConnell (R-Kentucky). While preaching fiscal responsibility, they promoted big ticket spending– like continuing all of the Bush era tax cuts.

Basically, the plan that the Republican touted in the Pledge to America back in Septenber just doesn’t add up. They want to repeal healthcare reform and make all of the Bush II’s tax cuts (especially those for the ultra rich) permanent PLUS cut government and cut the deficit. On the NPR’s Diane Rehm Show, one commentator said that even if the Republicans take government spending back to Reagan era levels + cut more, we would still be no where near a balanced budget.

So, that Mom and Pop Grizzly talk was just smoke and mirrors to get elected. Now what do we do to eliminate the US budget deficit?

Recently, two big stories in the news lately have been: what to do (if anything) with the Bush era tax cuts that will sunset at the end of 2010 and the release of the Bowles-Simpson bipartisan budget committee’s recommendations to cut the federal deficit.

There has been quite a bit of outcry against the Cat Food Commission (as Bowles-Simpson has been dubed). They recommend eliminating the mortgage interest deduction, child tax credit, and the earned income tax credit– which benefit the middle class– plus they want to lower tax rates, tinker with Social Security, and eliminate social safety nets.

In my opinion, the commission lacks credibility since it left big ticket items– like the Bush Era tax cuts and military spending– untouched.

So, here we are around the kitchen table with politicians who are afraid to make the tough choices– as usual! Now what’s a person to do? Our elected officials– on both sides of the aisle– can’t figure this out. Well, the New York Times has come to the rescue. Last Saturday, they posted an interactive budget-balancing tool: Budget Puzzle: You Fix the Budget. Check it out. It took me about 3 minutes to come up with a budget surplus by 2015 (and I let the middle class keep its Bush Era tax cuts).

So, what’s the big deal? The big deal, of course, is all of those corporate strings attached to our lawmakers.

Intuitively, to balance the budget the way a family would you would start with luxury items or things you don’t need (like the wars). Since Bush II and the Republicans (Yes, McConnell and Boehner plus our own John McCain, Jon Kyl and the rest of the right wing drunken sailors) took a few key fiscally irresponsible steps to create the budget deficit, let’s start by rolling those unfunded pet projects back to the Clinton Era (when we had a budget surplus). Here are my recommendations:

Let all of the Bush Era tax cuts sunset. Ed Schultz has been touting this idea on his radio show, and I agree with him. I was seriously disappointed when President Obama hinted that he may cave on his original suggestion (which he has been pushing for months)– continue the middle class tax cuts but let the tax cuts for the rich sunset. Schultz’s point is that the lame duck Democrats don’t have to do anything. Let the Republicans continue to fight for the ultra-rich while pretending to be fiscally responsible. (Their recent pledge to eliminate earmarks for a year would save a tiny fraction compared to Bush II’s tax cuts, and earmarks bring jobs to rural America.) I’m with Ed. If we truly want to bring down the deficit, then let all of the tax cuts end. This would provide a $226 billion savings by 2015 ($54 billion in savings from eliminating tax cuts for the wealthy + $172 billion in savings from eliminating tax cuts for the rest of us), according to the NY Times. (Personally, if the richest 1% of Americans, the big corporations, and the US Chamber of Commerce can secretly donate billions to elect lawmakers to protect their interests, they can afford higher taxes.)

Stop both wars. The Times interactive tool doesn’t give this option, but it does allow you to pick and choose ways to reduce military spending.

Allow the US to negotiate prescription drug prices for Medicare and Medicaid and eliminate Medicare Advantage. These are both HUGE corporate giveaways that Bush II and the Republicans built into the unfunded Medicare Part D prescription bill several years ago. Up until “Obamacare” eliminated these corporate giveaways, the US is the only country that did not get a quantity price break on prescription drugs. The Republicans and Tea Partiers– puppets of the corporatists– campaigned on repeal of healthcare reform. Among other parts of healthcare reform, these 2 initiatives save money.

The NY Times also provides several other spending cuts and tax increases that can help balance the budget– items that have been proposed in the past but didn’t fly for one reason or another– but I think if we started with these unfunded Bush Era initiatives we would be well on our way to getting our fiscal house in order– as it was under President Clinton.

Once and for all, as a nation, we should:

  • Give up on trickle down economics;
  • Stop the corporate welfare;
  • Tax corporations that send jobs overseas;
  • Invest in our future by fully funding education and early childhood development;
  • Hold elected officials accountable and reward those who make tough choices that benefit the people– not big corporations.

Pot smokers ‘edgy’: Prop 203 still undecided

Friday, November 12th, 2010

If Prop 203 eventually passes, people with a medical marijuana card will be able to purchase pot in multiple forms, and new businesses will spring up like weeds across the state.

Today– Nov. 12– is the deadline for county election officials to finalize the election that was held 10 days ago. Some races– like the governorship– were decided on Nov. 2.

But others remained close for days, due to mailed paper ballots that were delivered to a poling place on election day; provisional ballots (ie, those with a problem such as an address that didn’t match a person’s identification); and ballots that can’t be read by the optical scanner because they have write-in names or stray marks.

All of the candidate races have been called. Most notably, Southern Arizona Congressional Representatives Raul Grijalva (CD7) and Gabrielle Giffords (CD8), whose races were tight, were declared winners last week.

The three initiatives that remain undecided are Prop 112 which would change the deadlines for citizen initiative petitions, Prop 110 which would change the rules for state land swaps, and Prop 203 which would legalize medical marijuana in Arizona.

On Nov. 3, 350,000 votes were yet to be counted– mostly in Maricopa County. Today, Maricopa is the only hold-out, according to the Arizona Daily Star.

With tens of thousands of ballots to count in Maricopa County, Props 110 and 203 are losing by about 3000 votes, while Prop 112 is winning by less than 2000 votes, according to the Star. All three propositions have gained ground in the past week.

Arizona’s pot smokers will just have to find a way to de-stress while they wait until next week for a decision. Maybe some of them shouldn’t write in Micky Mouse for governor next time.

‘Macy’s CEO makes local push for holidays’ NOT

Wednesday, November 10th, 2010

Vuela Conmigo (Fly with Me) by Pamela Powers

I read that headline this morning in the local paper– Macy’s CEO makes local push for holidays– and thought, “Cool. A national department store is working with local artisans and artists.”

Well, not really. Sigh.

Basically, all Macy’s CEO Terry J. Lundgren is doing is following smart marketing principles and tailoring store content to the geographic area in which it is located. For example, the other day I went to Target to buy baby car seat as a shower gift. It was sunny and 90 degrees outside, but the store had sweaters and snow boots for sale. Wintry signage that was appropriate for Ohio but not Tucson decorated the store.

So, what has the NY-based Macy’s chosen for Tucson? According to the Arizona Daily Star, Macy’s thinks Men’s Lacoste polo shirts and watches, Armani Exchange fine watches, and earthtone bedding and towels with Southwestern patterns (like the Kokopelli) are just perfect for us. Hmmm…

What do I suggest for Tucson shoppers this holiday season? Forsake the Chinese children, forget about WalMart, Target, Macy’s and the rest of the multi-national chains and buy local!

When you buy local, you boost the local economy because a larger percentage of the purchase price stays here in town, and you are helping to grow local businesses. Here is a list of Tucson businesses on the Local First Arizona website.

Also, in Southern Arizona this fall there are several arts and crafts fairs where you can buy unique handmade local gifts–the Tucson Museum of Art Holiday Craft Fair (Nov. 19-20), the 30th Annual Cascabel Christmas Fair (Dec. 4-5), the 4th Avenue Street Fair (Dec. 10-12)– and his weekend Tucson Pima Arts Council Open Studio Tour (Nov. 13-14)

For the Open Studio Tour, more than 200 local artists (located all around Tucson) are inviting the public to their studios to chat, snack, watch demonstrations, and hopefully buy art and crafts. Buying directly from artists is very affordable because you don’t pay the gallery or gift shop consignment fees (which can be 50 percent) — or shipping from China. The catch is that many artists can’t afford the fees to accept credit cards, so bring cash, checks, or your Pay Pal log-on information.

The list of participating artists and maps can be found at this link and in the November issue of Zocalo Magazine.

How many times will Humberto Lopez offer his aging hotel to the city?

Tuesday, November 9th, 2010

Well, one thing you can say about Humberto Lopez is the guy is persistent.

But, Lordy, how many times is he going to offer his fleebag hotel to the city? And… how many times is the Arizona Daily Star going to cover it as if it were front page news????

According to the Star, Lopez wants the city to sell bonds to renovate his hotel, lease it for 99 years, and build a new parking garage. How stupid does he think the City Council is? (Don’t answer that.) At least Councilman Steve Kozachik said the deal doesn’t make sense.

Humberto, buddy, if the Gem Show thought your hotel was adequate, there would be no push for a new hotel downtown. Duh…

Here is the Star story…

The demise of the $190 million downtown convention center hotel has resurrected a proposal for taxpayer backing by Humberto Lopez, owner of Hotel Arizona.

Lopez needs the city to sell bonds and enter into a complicated transaction that would allow him to lease the Hotel Arizona to the city for 99 years so it could be converted into a Doubletree and so that an Embassy Suites could be built next door, according to the plan he’s presenting to the city and Rio Nuevo.

Like the recently rejected proposal, Tucson taxpayers would be on the hook for the losses if the hotel plan did not meet projections.

The proposal is being resubmitted because Lopez wants to use Build America Bonds, a type of bond that carries a lower interest rate because a portion of the interest is rebated by the federal government, said Roger Karber, a consultant involved with Hotel Arizona. The federal rebate would drop after Dec. 31, so the transaction should occur this year, Karber said.

“It’s the right time for the city of Tucson and Rio Nuevo to look at a hotel project,” Karber said.

Lopez needs the city to sell $17 million in bonds to upgrade his hotel into a 274-room Doubletree. In addition, a new 428-space parking garage needs to be built by the city, or Tucson needs to lease property to him so he can build the garage.

The city would then lease the Hotel Arizona from Lopez for $1.6 million a year for 99 years. The annual lease payments would allow Lopez to pay down the more than $20 million in debt he has on the Hotel Arizona property without having to pay taxes on the sale of the property.

Lopez has said he wouldn’t simply sell the hotel to the city rather than lease it, because the sale would trigger a large tax bill, even though all the proceeds of the sale would go to pay his debt on the hotel.

He said the cash flow from the Doubletree would pay back the city’s bond money and, even with the lease payments, the city still would make a profit of $1.4 million annually.

Karber said Lopez wants the additional sales taxes and the Rio Nuevo tax-increment-financing money from the site to be used to help backstop the bonds.

There seems to be little immediate interest from either the Rio Nuevo Board or the city to jump in feet-first.

Lopez would have to meet the same standards that hotel developer Garfield Traub was required to meet, Councilman Steve Kozachik said. The 99-year lease made no sense to him, Kozachik added.

“Any proposal no matter who it comes from is going to have to meet same standards we were holding Garfield Traub to,” Kozachik said. “He is no different than anyone else.”

The Rio Nuevo Board can’t consider Lopez’s proposal until it terminates the contract with Garfield Traub, board member Rick Grinnell said.

The contract is still in effect because there are still a few outstanding issues, mainly involving the new east entrance to the Tucson Convention Center, Grinnell said.

Arizona’s 2010 election: Counties still counting…

Friday, November 5th, 2010

The Associated Press and other national media outlets have declared Congressman Raul Grijalva the winner in Arizona’s Congressional District 7 race. Although Congresswoman Gabrielle Gifford has increased her lead over Tea Party challenger Jesse Kelly, the CD8 race is still too close to call.

Three propositions– 110, 112, and 203– also are still too close to call. Prop 110 would make it easier to sell or lease state lands. Prop 112 would shorten the length of time for citizens to file petitions. Prop 203 would make medical marijuana legal in Arizona.

Prop 203 gained some ground, but there are still thousands of ballots to count. According to Arizona Public Media this morning, counting will continue through the weekend. Counties have until November 12 to finalize their election tallies.

For up-to-date results on the propositions, check out this link at the Arizona Daily Star.

Republican voters: The job cuts and smaller guv’ment you voted for are coming…soon

Thursday, November 4th, 2010

“Cut waste first,” said the pre-election signs around Tucson.

“Cut taxes and reduce government,” was the Tea Party rallying cry around the country.

In cash-strapped Arizona, that small guv’ment you voted for is coming quickly– 2 days after the election. Smaller government means fewer government jobs, less or no economic stimulus money from the feds, and higher unemployment– at least in the short-term.

With smaller government, you can expect more of this…
City could lay off up to 400 workers. City Manager Mike Letcher had warned that if the city didn’t raise revenue (with the core sales tax), core services would be cut. Cutting services means cutting jobs.

Propositions’ defeat pokes hole in budget Gosh, the state is $449 million more in the hole than they anticipated because the voters defeated Props 301 and 302, according to the Arizona Daily Star. Yes, “No Plan” Jan didn’t balance the budget as she claimed in her campaign ads. Since the Republican-controlled Arizona Legislature continues to cling to failed trickle-down economic policies and wants to give more tax breaks to the rich, expect more job cuts. Balancing the budget on the backs of children and workers has been their standard procedure. Since Republicans will have an even stronger position in state government after Tuesday, expect more of the same. There will be job losses at all levels–except maybe the upper echelon of government. (Oh, I can hear the whining now!) The only way Governor Jan Brewer created any jobs was with economic stimulus funds from the feds. Heck, even Jesse Kelly– who campaigned against stimulus funds and for smaller government– benefited from the $30 million in stimulus funds that his family business received.

Oct. county foreclosures up vs. 2009 level October 2010 foreclosures in Pima County are up 7.5 percent over October 2009 and are more than 4 times the foreclosures October 2006, according to the Arizona Daily Star. More than 1,000 people received foreclosure notices in Pima County in one month.

No clear path for GOP on health care repeal Oops. It’s time to make good on the soundbites. For the federal job cuts, we’ll have to wait until after the new Republican majority is sworn into Congress. Since they campaigned on giving tax cuts to the rich (with account for 1/3 of the federal budget deficit) + repealing “Obamacare”, which saves money + reducing the size of government, it will be fascinating to see how they work that fuzzy math and how many job losses are attached to it.

And less of this…
Ariz. firms awarded drug-discovery grants, credits Funding research? That’s “elitist”!

PPEP gets funding for rural micro-loans Loans for small rural businesses? Do rural Arizonans need jobs? They can always pick lettuce or work in the Circle K.

Home for vets taking shape A home for Arizona veterans funded by economic stimulus funds? That headline from the Arizona Daily Star must be a lie. Everyone knows the economic stimulus didn’t do anything for Arizona– Ruth and Jesse told us so.

State fund for jobless owes US millions Arizona’s unemployment is one of the worst in the country, and the state government is so poorly run that we don’t have enough money to pay unemployment– so while the governor and Arizona Legislature shake their angry fists at the feds they are taking federal funds with the other hand.

But– those days will soon be gone. No more federal money to create short-term jobs, and no more handouts to the states (like Arizona) that are poorly managed and bankrupt. After January, we will be waiting in the bread lines for economic prosperity to trickle down upon us from the wealthiest 1 percent.

The Tucson Progressive

Pamela Powers Hannley writes the Tucson Progressive blog on the TucsonCitizen.com and contributes articles to the Huffington Post and Salon.com. She has had more than 30 years of experience in written, visual, and electronic communication—including freelance writing, photography, graphic design, and consulting. In addition to blogging for the Citizen, she is the Managing Editor of an international medical research journal.

Hannley has authored medical research articles, print magazine and newspaper stories, and numerous cancer prevention and self-help publications.

She has been a blogger since 2006, joined the ranks of Tucson Citizen bloggers in October 2010, and started contributing to the Huffington Post in 2011 and to Salon.com in 2012.

Hannley holds a masters’ degree in public health from The University of Arizona and a bachelors’ degree in journalism from The Ohio State University. She is a native of Amherst, Ohio but has lived in Tucson since 1981.