Tuesday, November 16, 2004

Barbara Ehrenreich....Act Like Christians

Act Like Christians
By Barbara Ehrenreich, The Nation
Posted on November 16, 2004, Printed on November 16, 2004
Of all the loathsome spectacles we've endured since Nov. 2 – the vampire-like gloating of CNN commentator Robert Novak, Bush embracing his "mandate" – none are more repulsive than that of Democrats conceding the "moral values" edge to the party that brought us Abu Ghraib. The cries for Democrats to overcome their "out-of-touch-ness" and embrace the predominant faith all dodge the full horror of the situation: A criminal has been enabled to continue his bloody work with the help, in no small part, of self-identified Christians.

With their craven, breast-beating response to Bush's electoral triumph, leading Democrats only demonstrate how out of touch they really are with the religious transformation of America. Where secular-type liberals and centrists go wrong is in categorizing religion as a form of "irrationality," akin to spirituality, sports mania and emotion generally. They fail to see that the current "Christianization" of red-state America bears no resemblance to the Great Revival of the early 19th century, an ecstatic movement that filled the fields of Virginia with the rolling, shrieking and jerking bodies of the revived. In contrast, today's right-leaning Christian churches represent a coldly Calvinist tradition in which even speaking in tongues, if it occurs at all, has been increasingly routinized and restricted to the pastor. What these churches have to offer, in addition to intangibles like eternal salvation, is concrete, material assistance. They have become an alternative welfare state, whose support rests not only on "faith" but also on the loyalty of the grateful recipients.

Drive out from Washington to the Virginia suburbs, for example, and you'll find the McLean Bible Church, spiritual home of Sen. James Inhofe and other prominent right-wingers, still hopping on a weekday night. Dozens of families and teenagers enjoy a low-priced dinner in the cafeteria; a hundred unemployed people meet for prayer and job tips at the "Career Ministry"; divorced and abused women gather in support groups. Among its many services, MBC distributes free clothing to 10,000 poor people a year, helped start an inner-city ministry for at-risk youth in D.C. and operates a "special needs" ministry for disabled children.

MBC is a mega-church with a parking garage that could serve a medium-sized airport, but many smaller evangelical churches offer a similar array of services – childcare, after-school programs, ESL lessons, help in finding a job, not to mention the occasional cash handout. A woman I met in Minneapolis gave me her strategy for surviving bouts of destitution: "First, you find a church." A trailer park dweller in Grand Rapids told me that he often turned to his church for help with the rent. Got a drinking problem, a vicious spouse, a wayward child, a bill due? Find a church. The closest analogy to America's bureaucratized evangelical movement is Hamas, which draws in poverty-stricken Palestinians through its own miniature welfare state.

Nor is the local business elite neglected by the evangelicals. Throughout the red states – and increasingly the blue ones too – evangelical churches are vital centers of "networking," where the carwash owner can schmooze with the bank's loan officer. Some churches offer regular Christian businessmen's "fellowship lunches," where religious testimonies are given and business cards traded, along with jokes aimed at Democrats and gays.

Mainstream, even liberal, churches also provide a range of services, from soup kitchens to support groups. What makes the typical evangelicals' social welfare efforts sinister is their implicit – and sometimes not so implicit – linkage to a program for the destruction of public and secular services. This year the connecting code words were "abortion" and "gay marriage": To vote for the candidate who opposed these supposed moral atrocities, as the Christian Coalition and so many churches strongly advised, was to vote against public housing subsidies, childcare and expanded public forms of health insurance. While Hamas operates in a nonexistent welfare state, the Christian right advances by attacking the existing one.

Of course, Bush's faith-based social welfare strategy only accelerates the downward spiral toward theocracy. Not only do the right-leaning evangelical churches offer their own, shamelessly proselytizing social services; not only do they attack candidates who favor expanded public services – but they stand to gain public money by doing so. It is this dangerous positive feedback loop, and not any new spiritual or moral dimension of American life, that the Democrats have failed to comprehend: The evangelical church-based welfare system is being fed by the deliberate destruction of the secular welfare state.

In the aftermath of election 2004, centrist Democrats should not be flirting with faith but re-examining their affinity for candidates too mumble-mouthed and compromised to articulate poverty and war as the urgent moral issues they are. Jesus is on our side here, and secular liberals should not be afraid to invoke him. Policies of pre-emptive war and the upward redistribution of wealth are inversions of the Judeo-Christian ethic, which is for the most part silent, or mysteriously cryptic, on gays and abortion. At the very least, we need a firm commitment to public forms of childcare, healthcare, housing and education – for people of all faiths and no faith at all. Secondly, progressives should perhaps rethink their own disdain for service-based outreach programs. Once it was the left that provided "alternative services" in the form of free clinics, women's health centers, food co-ops and inner-city multi-service storefronts. Enterprises like these are not substitutes for an adequate public welfare state, but they can become the springboards from which to demand one.

One last lesson from the Christians – the ancient, original ones, that is. Theirs is the story of how a steadfast and heroic moral minority undermined the world's greatest empire and eventually came to power. Faced with relentless and spectacular forms of repression, they kept on meeting over their potluck dinners (the origins of later communion rituals), proselytizing and bearing witness wherever they could. For the next four years and well beyond, liberals and progressives will need to emulate these original Christians, who stood against imperial Rome with their bodies, their hearts and their souls.

© 2004 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/20507/

Powell's Soul...Lost to Bush

November 16, 2004
Good Soldier Powell

s Secretary of State Colin Powell resigned yesterday, reportedly to be succeeded by the national security adviser Condoleezza Rice, it was hard to avoid the feeling that this imposing figure - who once personified the dignity, integrity and promise of government service and was the first African-American considered to have a shot at the White House - will be remembered for one picture and three sentences.

On Feb. 5, 2003, in an appearance before the United Nations Security Council, Mr. Powell, the retired four-star general and former national security adviser, held up a vial of white powder as a symbol of what he claimed - falsely, as it turned out - were Iraq's huge stockpiles of anthrax. He offered a scathing indictment of Saddam Hussein. "My colleagues, every statement I make today is backed up by sources, solid sources,'' he said. "These are not assertions. What we're giving you are facts and conclusions based on solid intelligence."

As an increasingly angry world soon learned, Mr. Powell in fact offered half-truths, poorly analyzed intelligence and outright fantasies, from a nuclear weapons program in Baghdad that didn't exist to wildly exaggerated estimates of Iraq's chemical and biological weapons stockpiles and its ties to Al Qaeda.

But at the time, Mr. Powell's performance convinced many Americans skeptical about the war that the Iraqi government was a clear and present danger to the rest of the world. His enormous stature and his image as a moderating force within the administration - valued especially by America's European allies - were squandered in defending a unilateral decision he did not agree with to launch a war in which he did not really seem to believe.

From the start of his tenure as secretary of state, there was a question about which Colin Powell had moved into Foggy Bottom. Was it the decisive, charismatic general who coined a military doctrine that called for waging war only after the establishment of a political consensus behind achievable goals and then the commitment of overwhelming force to reach those ends? Or was it the faithful soldier who prized loyalty above all else?

Mr. Powell began with promise, forcing the long-neglected issues of Africa to the forefront of the administration's agenda. Even after 9/11, when those issues naturally took the back seat, the über-Powell was forever being rumored to be on the cusp of emerging and asserting himself over Defense Secretary Donald Rumsfeld and even Vice President Dick Cheney.

But it's now clear that Mr. Powell long ago chose loyalty over leadership and was not a major figure in the biggest foreign policy decisions of the Bush administration. Most accounts of the rush to war in Iraq show that Mr. Powell was deeply troubled about the planning for the war, its timing and the intense opposition of most of Washington's European allies. But he was unwilling or unable to exert much influence over the president in that critical time, and it's not clear whether Mr. Bush even consulted him before making his decision to go to war.

There were moments in his tenure when Mr. Powell could have resigned over principle. But he soldiered on, leaving when it was safe and convenient for his boss. Yesterday, he told the world that he'd long ago given up any ambition of sticking around for a second term. In the end, his legacy may simply be that the administration that bungled the handling of a war because the president failed to heed the Powell Doctrine was the one in which Mr. Powell himself served.

Copyright 2004 The New York Times Company

Retirees Be Aware!

November 16, 2004
Debt Doubles at Agency that Insures Pension Plans

he federal agency that insures pension plans said yesterday that its deficit, already at the highest in its history, had doubled in its last fiscal year, to $23.3 billion.

Over a 12-month period, the agency, the Pension Benefit Guaranty Corporation, incurred losses of $12.1 billion, according to the agency's audited annual report for fiscal 2004. Much of the loss was a result of pension fund failures in the airline industry.

The agency, created in 1974 to be the federal safety net when pensions fail, has now lost an average of $10 billion a year for the last three years, according to one estimate. The mounting losses come at a time when the agency is responsible for paying the pensions for more than one million people covered by pension plans that failed.

The agency's executive director, Bradley D. Belt, called on Congress yesterday to address the situation quickly, "so the problem doesn't spiral out of control." He said that the Bush administration was preparing a plan for a comprehensive overhaul of the pension system, which it would propose early next year.

The Pension Benefit Guaranty Corporation is paid premiums by companies that offer traditional pension plans. But it does not have the legal authority to raise those premiums or take other fundamental steps to bring its finances back into balance. Such measures would have to be enacted by Congress.

Congress, however, has not addressed the problems of America's pension system in a comprehensive way since the late 1980's, when a number of large steel companies with traditional pension plans defaulted. Since then, lawmakers have made some lesser amendments to the system, but even those have been made with great difficulty. The issues involved are complicated, and any true pension reform will be costly to someone - either companies, workers or the federal government.

Experts warn that waiting will not make the troubles go away. The system of regulating and insuring traditional pensions called defined-benefit pensions is increasingly resembling the system that did the same for the savings and loan industry two decades ago.

Congress had difficulty correcting that system's structural problems as well. As a result, there were delays and missteps, and the problems had years to grow and deepen. In the end, the entire system collapsed in 1989 and Congress had to authorize a federal bailout that cost about $200 billion.

"The Pension Benefit Guaranty Corporation is living on borrowed time," said Representative George Miller, a California Democrat who has followed the troubles in the pension system closely. He issued a statement yesterday saying the possibility of "an S.& L.-style taxpayer bailout of the agency to the tune of billions of dollars has increased."

In announcing the pension agency's latest financial results, Mr. Belt, the executive director, said that it was not running out of cash. With reserves of $39 billion, he said, it should be able to keep sending retirees their pension checks "for a number of years," even if Congress does nothing.

The problem is that the pensions the agency must pay retirees are much larger than the reserves, Mr. Belt said. The pensions owed retirees measure $62.3 billion in today's dollars.

Unless the agency finds a way to close the gap between the $39 billion that it has and the $62 billion that it owes, it will run out of money at some point. In that case, either retirees will be denied their benefits, or else Congress will have to appropriate money for a bailout.

Mr. Belt also noted that the agency's problems were worsening at a time when the general economic environment has been improving. He said the agency now faced $96 billion worth of risk from companies that are "reasonably possible" to default on their pension promises. The comparable number a year ago was just $82 billion.

The pension agency identifies such companies by looking at their corporate credit ratings, together with the weakness of their pension funds.

The agency does not identify the companies whose pension plans it expects to take over. Still, it is clear that the airline industry was responsible for much of the agency's loss for the fiscal year.

US Airways three pension funds are expected to cost the agency $2.1 billion. And United Airlines, a unit of UAL, recently announced that it would terminate all four of its pension plans as part of its efforts to emerge from bankruptcy. Taking over United's pensions alone will cost the agency an estimated $6.3 billion, by far the biggest pension insurance claim ever made by a single company. Accounting rules require the agency to book that loss in its fiscal 2004, even though it has not yet taken over United's plans.

Even before yesterday's announcement, analysts were warning that the pension agency needed help. Douglas J. Elliott, president of the Center on Federal Financial Institutions, said that if Congress took corrective action quickly, the cost would be small relative to the cost of a bailout some time in the future. The center is a nonpartisan research institute that examines the federal government's various lending and insurance programs.

Mr. Elliott said that the agency's new numbers brought its average losses to more than $10 billion a year for three years.

"This is a trend," he said. "This isn't something where you can just say, 'Well, that was a bad year, thank goodness we're over it.' "

In addition, the agency's fiscal 2004 was a year of general improvement in overall economic and financial conditions, Mr. Elliott said. Had interest rates not changed slightly in the agency's favor, its losses would have been even larger.

Congress is not expected to address the pension agency's problems in the current lame duck session because it already has a full workload. But some members said yesterday that they were concerned about the strength of the nation's pension system and hoped to introduce legislation early in 2005.

"This issue has wide-ranging implications on retirees, employers, workers, taxpayers and the government," said Representative John A. Boehner, the Ohio Republican who is the chairman of the House Committee on Education and the Workforce. Mr. Boehner said in a statement that he planned to introduce a bill in 2005 that would address what he called "systemic pension underfunding problems."

The Education and Workforce Committee has already held hearings on the problems of the pension system and possible remedies. Mr. Boehner said that in addition to making sure companies set aside enough money for their pensions, the bill would require companies to disclose clear information about their pension plans and pay adequate insurance premiums for their coverage.

In addition to the premiums it collects from companies, the pension insurance program receives the assets from the failed pension funds it takes over and invests them. It does not currently receive money from income tax receipts.

The insurance premiums have not been increased since 1994 and are thought to be inadequate relative to the amount of insurance coverage companies receive. United Airlines, for instance, has paid about $50 million in insurance premiums over the years, for coverage of its $6.3 billion claim.

Pension specialists also point out that the premiums do not have anything to do with the amount of risk companies bring to the pension insurance program. Companies with pension plans that do not have adequate funds do pay higher premiums than companies with strong plans. But that way of operating does not account for one of the most important signs of whether the plan will collapse or not: the company's own health.

A strong company with an unhealthy pension plan poses nowhere near the risk of a weak company with an unhealthy pension plan.

Mr. Boehner has suggested finding a way to distinguish between weak and strong companies, and charge higher premiums to the companies that pose greater risk.

Copyright 2004 The New York Times Company |

Economic Roller-Coaster In Sight

November 16, 2004
The Dollar Is Down, but Should Anyone Care?

ASHINGTON, Nov. 15 - It sounds eerily like the worst economic nightmare for President Bush's second term.

Bogged down in a costly war that shows no sign of ending, the United States faces a gaping budget deficit and ballooning foreign indebtedness. The dollar plunges against other major currencies, while turmoil in the Middle East sends oil prices soaring. The rest of the decade is plagued by rising inflation, increased joblessness and sky-high interest rates.

But the president under fire was Richard M. Nixon - not George W. Bush. The war was in Vietnam, not Iraq. And the dollar crash was in 1973 rather than 2005.

Could it happen again? With the dollar down more than 40 percent against the euro since 2002, and hitting new lows since Mr. Bush's re-election, economists are debating whether America's foreign indebtedness could lead to a collapse in the dollar and a global financial crisis.

The United States is spending nearly $600 billion more a year than it produces, almost 6 percent of its annual gross domestic product. Much of that spending has been financed by Asian governments, which bought more than $1 trillion in Treasury securities and other dollar assets in the last two years to help keep the dollar strong against Asian currencies.

Many analysts expect the financing gap to widen and the dollar to decline further. But there are at least three schools of thought on whether a dollar collapse is likely and, if it happens, what it would mean.

One group, which includes the Federal Reserve chairman, Alan Greenspan, contends that global financial markets are awash in so much money that the United States can borrow much more than seemed possible 20 years ago.

The dollar may well decline in value, according to this view, but the decline would be gradual and would help reduce American trade imbalances by making exports cheaper and imports more expensive.

The Bush administration goes one step further, arguing that America's huge foreign debt simply reflects the eagerness of others to invest here.

"Productivity has been remarkably high in the last few years," John Taylor, deputy secretary of the Treasury, said at a recent conference. "Foreigners want to invest in the United States. That's what that gap illustrates."

A second school of thought holds that foreign governments like China and Japan will continue to finance American borrowing and keep the dollar strong because they are determined to sustain their exports and create jobs.

But a third school, which includes officials at the International Monetary Fund, worries about a collapse in the dollar that would send shock waves through the global economy.

That group argues that the dollar needs to depreciate another 20 percent against the other major currencies but warns about a run on the dollar that could reduce its value by 40 percent.

A collapse of that size would severely affect Europe and Asia, which have relied heavily on exports to the United States for their growth.

A steep drop in the dollar could lead to higher interest rates for the federal government and American private borrowers, as foreign investors demanded higher returns to compensate for higher risk. And it could expose hidden weaknesses among financial institutions and hedge funds caught unprepared.

"There is a school of thought that the U.S. can keep borrowing forever," said Kenneth S. Rogoff, professor of economics at Harvard University and a former chief economist at the I.M.F. "But if you add up all the excess saving being thrown out by the surplus countries, from China to Germany, the United States is soaking up three-quarters of it right now."

For Mr. Rogoff and several other economists, the question is not whether the dollar declines - but how fast and how far the fall turns out to be.

The United States current account deficit, which encompasses annual trade as well as the balance of financial flows, has gone from zero in 1990 to nearly $600 billion this year. The United States' accumulated debt to foreign investors is $2.6 trillion, or 23 percent of the annual output of the economy.

But where foreign investors in the 1990's poured trillions of dollars into American stocks and corporate acquisitions, investment from abroad now comes mostly from foreign central banks and goes heavily to buying Treasury securities that finance the federal deficit.

Catherine Mann, a senior economist at the Institute for International Economics in Washington, said today's financing gap could be expected to widen. Part of the problem lies with Europe and Japan, which grow more slowly than the United States and import less than they export.

Higher costs of imported oil will aggravate the trade deficit even more, Ms. Mann said, and the federal government will be paying foreigners higher interest rates on its rapidly growing debt.

"You have a dynamic that links government deficits to current accounts deficits more than has been the case before," Ms. Mann said. "We are going to have a lot of government securities out there, and a very high share of those Treasuries are owned by foreign investors."

But where Mr. Rogoff predicts that the dollar will slide sharply over the next two years, Ms. Mann predicts that Asian countries will continue to subsidize American imbalances to keep their economies growing. A decline in the dollar may be likely, but not a panicky flight by foreign investors.

The American dollar has been through several ups and downs in recent decades. In 1973, it fell sharply against Japanese and European currencies - the major industrialized countries had already abandoned the system of fixed exchange rates adopted at Bretton Woods after World War II.

The dollar rebounded strongly in the early and mid-1980's in response to higher American interest rates, but then plunged 40 percent after leaders from the United States, Japan and Europe reached the so-called Plaza Accord in 1986 to nudge the dollar back down. The plunge after the Plaza Accord caused few disruptions for Americans, and foreign investors did not demand higher interest rates on securities.

"One theory is that investors were simply irrational," said J. Bradford DeLong, a professor of economics at the University of California, Berkeley. "Others said it was the result of what Charles DeGaulle called the 'exorbitant privilege' of being able to repay your debts in your own currency."

Some economists contend that the United States can postpone its day of reckoning for years. Richard N. Cooper, a professor of economics at Harvard, said the global pool of savings was about 10 times the United States' appetite for foreign capital last year and growing fast enough to easily finance $500 billion a year.

The wild card is that most of the money is coming not from private investors but from foreign governments, led by Japan and China. Rather than profits, their goal has been to stabilize exchange rates and keep their exports from becoming more expensive.

Many economists contend that the Asian central banks have created an informal version of the Bretton Woods system of fixed exchange rates that lasted from shortly after World War II until the early 1970's.

The system collapsed after the imbalances between Europe and the United States became impossible to reconcile. Rapid growth is putting similar pressure on China, which has kept its currency, the yuan, pegged at a fixed rate to the dollar.

The growing imbalances, in both China and the United States, is one reason Mr. Rogoff is bracing for a jolt to the dollar and the American economy similar to the one that occurred in the early 1970's.

Then, as now, the United States was running large budget and trade deficits. Then, as now, the United States was bogged down in a war costing billions of dollars a year. And in 1974, a few months after the dollar plunged against the German mark and Japanese yen, oil prices soared.

"It's striking how many parallels there are between today and the early 1970's," Mr. Rogoff said. "The loss of the anchor of the dollar and fixed exchange rates contributed to the inflation we saw in the 70's. It was the worst period in growth we have had since World War II."

Copyright 2004 The New York Times Company