LBO News from Doug Henwood

Wikileaks: a CIA-Mossad project

My god, there is just no end to lunacy.

I just learned from contested terrain (which cited my comment that the Wikileaks affair proved the conspiracy theory of history to be wrong) that Wayne Madsen thinks (“CIA, Mossad and Soros behind Wikileaks”) that Julian Assange is a CIA agent in the pay of George Soros, with some help from the Mossad. So all that chat about how the woman who accused Assange of some variety of sexual assault is herself a CIA agent—well, forget that. Because Langley is pulling Assange’s strings. And why would Langley want to do that? “To play into fears” of something or other.

No wonder James J. Angleton liked that Eliot quote about the “wilderness of mirrors” so much. Except he really was a CIA agent.

Bill Gates, business genius?

Reading Diane Ravtich’s excellent takedown of (private school grad and college dropout) Bill Gates for his interventions in public education reminded me that the only reason people listen to him is that he’s thought to be some sort of business genius (as if business genius were translatable to pedagogy or anything else). If he’s that rich, he must be smart, eh? But he’s really not such a business genius.

Well, he’s a business genius of a sort, but not of the sort of heroic entrepreneur that’s usually lionized. His first foray into code-writing was a version of BASIC for some early hobbyist machines (written with fellow future megabillionaire Paul Allen). BASIC was originally developed at Dartmouth, a nonprofit educational institution, but Gates was learning how to take the work of others and turn it into his own property.

What really made him rich was having been in the right place at the right time in 1981 when IBM needed an operating system for its new PC. Gates (with Allen) borrowed heavily, to put it gently, from an existing operating system, Digital Research’s CP/M. (For DR’s version of this history—“Microsoft paid Seattle Software Works for an unauthorized clone of CP/M, and Microsoft licensed this clone to IBM”—see here. A less biased, though still damning, look is here.) In other words, another instance of adopting someone else’s work and taking credit for it—this time with the innovation of litigating aggressively and manipulating markets to defend a monopoly position. Because once it secured that monopoly, Microsoft did everything it could to crush competition.

Having secured that early market dominance with MS-DOS, Microsoft became a money machine. It earned monopoly profits with almost no cost of production. But after that, aside from Office, Microsoft has been unable to launch a truly successful product on its own creative juices. Windows—at first, a gussied up version of MS-DOS—was basically lifted from the Mac OS (which Apple itself had lifted from Xerox) and it took years before they got it right. Many Windows releases have been extremely buggy and bloated. Explorer is a crummy browser. Microsoft’s efforts on the web, Hotmail and Bing and the rest, have been disappointing. Their attempt to imitate the iPod, Zune, is a joke. Microsoft has lost money on videogames, despite the enormous growth in that market.

(Some numbers to back that up, from Microsoft’s latest annual report. The profit margin—operating profits as a percentage of sales—on Windows is around 70%. On Office, it’s 63%. Then the numbers fall hard. Entertainment, mainly the Xbox and Zune, has an 8% margin. And the online division, mainly Bing and MSN, lost more money than it took in in revenue.)

So it’s pretty rich for Gates to criticize monopoly and stodginess in public education, given this business history. His father was, among other things, an intellectual property lawyer, which did teach him something about gaining advantage in a world where the innovation of others can threaten monopoly profits. (The University of Washington law school’s Center for Advanced Study & Research on Intellectual Property is headquartered in a building named after Gates Sr.) But there’s nothing terribly admirable about using litigation and market power to become a billionaire. And that sort of personal and business history certainly doesn’t give you the credential to hold forth on education policy.

Clarification on anti-Semitism

I asked here (An apology) why the evil financiers are almost always Jews. This prompted an email from someone saying that it sounded like anti-Semitism. It was most certainly not. It was an ironic (and apparently not successfully so) question about how conspiracy types so often flirt (or worse) with anti-Semitism. Also, a lot of populist critiques of finance traffic in covert or overt anti-Semitism. I should resurrect an old polemic on that topic and post it here soon. Sorry if there was any misunderstanding.

Yanis Varoufakis on austerity

Not only is he an economist, he’s now master of his own domain! Yanis Varoufakis on austerity: Cutting our noses to spite our faces.

An apology

I am so sorry that I did not know earlier, when I made a little joke about Wikileaks and 9/11, that Julian Assange had professed himself “annoyed” by the Truthers, causing them to denounce Assange as a tool of the CIA, the Rothschilds, Goldman Sachs, and George Soros. (Why are the evil financiers almost always Jews?) More here: 9/11 skeptics say Julian Assange being manipulated by the CIA.

Me on Russia Today TV

Here I am, debating the right again—this time two of them: another Schiff and “investor” Jim Rogers, who somehow gets all the headline credit. Lots of shouting and crosstalk, in line with the show’s name. CrossTalk: Socialism for the Rich (ft. Jim Rogers).

WikiLeaks: so much in the open

Looking over this latest batch of WikiLeaks, I’m struck by how few surprises there are, and by how much of importance goes on pretty much in the open. An attentive reader of the news with a decent knowledge of history basically knows most of this stuff already.

I don’t mean this in the sense in which the bourgeois press is using it—by using the epithet “old news” to dismiss the significance of the revelations. What they want to dismiss is the truth that the U.S. (like most other nation–states, though they’re not as globally consequential) kills, cheats, and lies. It’s always useful to have documentary evidence of that truth. And it’s satisfying to get the juicy details of how Hillary Clinton signed an order to get Ban-Ki Moon’s credit card numbers.

But revelations like these are further proof that the conspiracist view of history, in which a secret cabal plans everything and everyone else is just an ignorant dupe, is wrong. Follow the news, and you’re pretty much aware of the major goings-on. Though no doubt the faithful 9/11 Truthers have a great explanation of why none of these leaks reveal how Dick Cheney wired the WTC to explode.

Radio commentary, November 27, 2010

Eurocrisis: bondholders need a haircut • how Ireland helps Google pay almost no taxes • Germany must screw periphery because it’s screwed its own workers

All Eurocrisis today. I never thought I’d be saying this, but it must be conceded that Angela Merkel has a point or two. Not the way the German chancellor and many of her fellow Germans want to drive Greece, Ireland, and the other troubled countries on the periphery of Europe through the austerity wringer. Not that. But this: Merkel thinks that bondholders should take a hit. And they should. Budgets are being savaged and millions thrown out of work on the outer edges of Europe so that bondholders can remain unscathed. Ireland is pouring enormous resources into saving its busted banks. An economy can’t survive the demise of its banking system, but pouring every euro into the effort and starving everything else to fund it is insane and cruel.

cut their damn hair

So far, bank investors have taken some “haircuts,” as they say in the trade, but not enough. Germany wants to see them take more, and why not? Whenever the subject comes up, investors panic, and dump bonds of risky countries, which causes worrywarts to predict doom. But austerity also causes investors to panic, because when economies implode, tax revenues wither, and budget deficits get wider. Austerity is a credit risk too.

coddling MNCs

Another point the Germans and other European countries have: the Irish corporate tax regime is a scandal. Taxes on corporations are very low, which has prompted a number of multinationals to set up shop there. That gives them access to an educated, English-speaking workforce inside the European Union, with a tax rate of 12.5%; most other First World countries have rates above 20%.

But Ireland isn’t just a great place for a multinational to set up a branch office: it can also be a very useful place to route money through. For (egregious) example, as Bloomberg reported the other day, Google (with the permission of our IRS) has assigned much of its intellectual property rights to its Bermuda subsidiary, to which it pays license fees—fees that it can deduct from its income in high-tax countries. That Bermuda subsidiary is officially set up as an Irish company—but since it claims that the company’s management is in Bermuda, it’s largely exempt from Irish taxes. Google also routes almost all its sales outside the U.S. through its Irish subsidirary, but thanks to that Bermuda trick, claims that the Irish subsidiary makes almost no profit. And it routes those payments through a Dutch subsidiary (with no employees), allowing it to avoid some Irish taxes.

As a result of all this trickery, Google reduced its foreign tax rate to 2.4%—meaning that just about everyone listening to this pays a higher share of his or her income in taxes than Google does. This probably adds about $100 to Google’s stock price, now around $600 a share. Many other tech companies, like Microsoft and Apple, perform similar maneuvers to reduce their taxes to a fraction of the rates that are on the U.S. law books.

Nice for the companies, but what does this do for Ireland? The multinationals do provide employment in Ireland, but it’s of a very shallow sort. (Listen to this interview with Michael Taft for more.) There’s little research and development done in Ireland, or procurement of goods and services, meaning that there are no spillover effects from the multinationals’ investment. So the boom Ireland saw in the late 1990s and early 2000s was of a very superficial sort—and one that was turbocharged with a crazy housing bubble. When that burst, there was little of substance beneath the froth.

It is true that the multinationals have Ireland over a barrel. If the country does raise corporate taxes, some of them will leave, costing the country jobs and revenues when it can little afford to lose either. So it’s almost certainly going to leave the corporate tax rate untouched, while the masses suffer budget cuts and tax increases. But for longer-term health, it’s got to get off this economic crack. You can read this is Ireland’s particular case of the pickle that many countries find themselves in: the neoliberal strategy of coddling capital has hit a wall, but no one has the imagination or political nerve to come up with a new strategy.

German motives

Concerning the austerity wringer, I should bring forward a point made by the Greek economist Yanis Varoufakis in our interview on last week’s show. Over the last decade, Germany has really put the squeeze to its working class. Over the last decade, prodcutivity is up almost twice as much as pay. (So too in the U.S., actually.) But that’s not true of a lot of the countries on the periphery of Europe: Italy, Portugal, and Spain have all seen wages outstrip productivity. So too Greece, probably, but there are no good statistics coming out of that country to confirm the impression. So it would be politically difficult for the German government to be seen as indulging the peripheral countries when it’s been so hard on its own population.

This sure has been a great era for the capitalists of the world.

New radio product

Now up on my radio archives (explanatory links at original):

November 27, 2010 Paul Street on the Tea Party, the dismalness of the Dems, and Obama’s elegant personal fit with that dismalness • Cordelia Fine, author of the excellent Delusions of Gender, on how all those claims of biological roots to differences between men & women are nonsense

November 20, 2010 Monica Potts, author of this article, on (the lack of) green jobs • Yanis Varoufakis, author of this article, on a better way to do a eurozone bailout

Pacifica hires anti-union law firm

Pacifica laid off the Morning Show staff at KPFA allegedly because of a budget crisis—and they hire an expensive corporate law firm to deal with the consequences. How community broadcasting of them!

Read all about it here.

Demented press release of the day

This just in. Gosh, sometimes I wish I lived in their fantasy world…

Plenty to be Thankful for… if you’re Big Labor

Doug,

Who has more for which to be thankful this year, small businesses or Big Labor? The failure of Big Labor to move it’s job-killing Employee ‘Forced’ Choice Act through Congress despite naming it a top agenda item is certainly on businesses’ list.

Still, small businesses and workers are struggling to make ends meet as labor bosses continue to work to force unionization on workers to pocket union dues and spend frivolously on political campaigns that will ensure their bottom line.

So, Big Labor is thankful for things like Craig Becker’s appointment to the National Labor Relations Board and the strings they can pull at the National Mediation Board, all while leaving their workers’ pensions grossly underfunded.

Would you like to speak with Katie Gage or another representative of the Workforce Fairness Institute about what this year has meant for Big Labor and what these union bosses are thankful for this year?

Thanks,

Mike

Mike Mamassian

CRC Public Relations
703-683-xxxx ext. 104

Gary Null nearly killed by own product

Someone posted this news to the comments, so I had to find out if it was true. Yes, it is true—Gary Null nearly died from consuming one of his products.

Null is suing the manufacturer for negligence, specifically for allegedly including 1,000 times the recommended dosage of vitamin D. When Null first got sick, he consumed more of the stuff, hoping it would make him better. While he was suffering, his phone was ringing off the hook with complaints from irate consumers.

At first, Null’s website denied anything was wrong. When a Los Angeles Times blog noted that this claim contradicted his own lawsuit, he modified his condition report to say he was feeling better. More here.

I suppose a manufacturing error like this could happen to anyone. But that’s just the point—these natural guys are just like everyone else, except more opaque.

Daily News: Gary Null suit vs. supplement manufacturer claims Gary Null’s Ultimate Power Meal nearly killed him

ABC News: Alternative Health Guru Sues Company Over His Own Product, Claiming It Nearly Killed Him

Health lunacy: Adorno helps out

[This was originally part of this radio commentary, but I’ve posted it separately here.]

And now a bit more Pacifica arcana, though that’s only the taking-off point. WBAI, the New York station where this program ran for 15 years until the interim program director decided to cut its frequency, has brought back health guru Gary Null to do a daily noontime show. Null was fired several years ago because of a personality conflict with an earlier program director. He really made the phones ring at pledging time, and his departure was financially damaging to WBAI. So presumably bringing him back will make the phones ring again, since they’ve been pretty quiet lately. Maybe, but at a considerable price to reputation and decency.

WBAI helped make Gary Null both famous and rich. He is much admired by many, though he strikes me as a classic snake-oil salesman, with an unctuous manner and a selfless self-presentation that is actually a mask for a raging egomania. But, that aside, Null, like many health freaks, is an HIV denialist. That is, he denies that HIV is a cause of AIDS, and that AIDS is a contagious disease. He said recently on another radio show that “Everything about AIDS is a lie, it’s a fraud being perpetrated….” That sort of talk really excites the credulous, for sure. He also counsels against the use of modern antiviral therapies, without which legions of AIDS patients would be dead. So no matter what you think of the rest of the naturalist’s armamentarium, this sort of advice can kill people. That may be a rude thing to say, but it’s true. Telling people that AIDS is not a communicable disease and that antiviral therapies do more harm than good can kill people.

I’ve got personal experience of two of the “healers” he had on his show. One was the late Dr Emanuel Revici (who died in 1998). My uncle, who was dying of advanced prostate cancer, was brought to Revici by his wife (my mother’s sister). Revici saw him for five minutes, handed him three unlabeled vials of fluid, and billed him for $500. My uncle took the stuff, and died a short while later. The other: my father, who was then about 80, consulted another of Null”s “healers” because of some arthritis-like pains he felt in his knee. The healer diagnosed my father with “cytomegalovirus infection” and prescribed a round of intravenous vitamin C infusions at $100 a pop. CMV infections are ubiquitous—over 90% of Americans aged 80 and over carry the virus. And vitamin C is very cheap—the markup must have been on the order of 50 times. These two characters are nothing but quacks in a very profitable line of business.

But I promised this wouldn’t be another inside-Pacifica story, so now onto the larger point. I don’t doubt that there are all kinds of therapies and practices in the “alternative” realm that are useful and less toxic than the orthodox kind. But these need to be tested rigorously, with full disclosure of the contents of the elixirs and the results of their application. Now, Null & Co. circulate their propaganda through self-reported testimony with no outside check on their veracity. Those who died, like my uncle, aren’t called upon to be guests. And this gang of alterna-health types tap into the suspicions of the dominant discourse so prevalent on today’s left—a reflexive skepticism that’s as anti-intellectual as the reflexive credulity of so many in the mainstream.

Why is this sort of thing so popular? As I was thinking about this, the phrase “modern big-time irrationality” popped into my head. It comes from a great essay by the German philosopher T.W. Adorno on astrology—specifically the astrology column in the Los Angeles Times that Adorno read when he was in exile there during World War II. And it turns out that something in Adorno’s analysis of mass-produced occultism that bears on the popularity of quackery.

Adorno pointed out that mass consumption of an astrology column is a lot different from classical astrology, which emerged before astronomy was codified as a science, and even today lives on in the form of custom readings done by professionals. But it also co-exists with a world in which astronomy is a science, and so requires a serious degree of intellectual retrogression among the faithful. People should, in other words, know better. But one reason they don’t is because so much of what goes on in the name of rationality is actually opaque and irrational—the worlds of technology and money which leave most people dazed and confused. So in some sense, the fascination with astrology and other forms of occultism are an escape from the world of well-compensated expertise from which most people are excluded. But the escape reproduces the patterns of the larger society—even more irrationally. People accept the declarations of the astrology column (insofar as they accept them—there’s often a note of irony and self-teasing as one cites the day’s capsule summary) as a form of abstract authority. The syndicated astrologer becomes just another kind of disembodied expertise.

I think something similar is going on with the appeal of alterna-health gurus. People are confused by actual science and repelled by its debasement by the pursuit of money. Everyone knows how drug companies taint research and medical practice is distorted by fee maximization. So to escape that unpleasant reality, connoisseurs of quackery embrace the critique offered by the likes of Null, who confidently declare that the official line on AIDS is just a fraud. (In that, they can sound like climate change denialists, who think the whole story of warming is a fraud perpetrated by academics.) But the appeal of Null & Co. is one of pure authority: the word of the guru takes the place of rigorous evidence. Because for all the corruptions of science, it does depend on the disclosure of techniques, the reproducibility of results, and the scrutiny of peers. Yes, there’s a lot of authority behind the scientist in the white lab coat, but there’s also a lot of rigor. There’s none in the alterna-world.

Still, there’s plenty of money-making going on—but the adherents never look into that.

Radio commentary, November 20, 2010

Stumbling recovery continues • bourgeois theories of unemployment • who gets UI? • how the StimPak helped • models for budget-cutting

[The commentary also included an analysis of health lunacy, which I’ve posted separately.]

stumbling along

The U.S. economy continues its stumbling recovery. On Thursday, we learned that first-time applications for unemployment insurance, filed by people who’d just lost their jobs, rose slightly last week after falling decently the previous week—a fall that exactly reversed the rise of the previous week. The four-week moving average, which smoothes out the weekly volatility in this series, fell by 4,000, but is only slightly below where it was almost two months ago. In other words, it looks like the trend of modestly declining rates of job loss is continuing. But job loss, as measured by these initial claims, is still pretty high by historical standards—and there’s not much evidence that employers are picking up the sluggish pace of hiring.

Meanwhile, it looks like millions of people are going to lose their unemployment benefits (which, by the way, are a joint program of the federal government and the states). Normally, a jobless person can draw benefits for 26 weeks, but Congress often extends that period in times of high unemployment, like this one. There have been a number of extensions of that 26-week limit since the recession hit, but no longer. House Republicans blocked attempts to extend emergency benefits, so nearly a million recipients are going to lose their benefits at the end of the year, and another million a month will suffer the same fate in early 2011.

elites theorize joblessness, conveniently

There’s a ludicrous theory (prime example: here) circulating among elites—meaning right-wing economists and some, though far from all, Federal Reserve officials—that our near-10% unemployment rate is not a reflection of a sick economy, but something called job skills mismatch—that is, there are jobs out there, but our unemployed workers are just too dumb or unqualified to do them. There’s almost no evidence for this proposition—why did the number of mismatched roughly double over the last three years, anyway?—but orthodox types find it a comforting explanation.

Another popular theory among elites is that unemployment benefits are too generous, encouraging the jobless to sit back and live large on $307 a week (the size of the average check). So if we cut benefits, they’ll scurry back to work. This is vicious nonsense—I faced it in my Real News debate with Peter Schiff—but orthodox types find this one, too, a comforting explanation.

UI: who benefits?

The Congressional Budget Office is just out with a study of who gets what from unemployment benefits. They found, among other things, that just under half the unemployed drew benefits in 2009. Of those that did, the average recipient collected $6,000, accounting for 11% of their family’s income last year. That is not living largely, but that 11% translates into about a month and a half’s worth of income over the full year, which is not nothing. Without unemployment benefits, the CBO estimates, the poverty rate last year would have been 15.4% rather than 14.3%. So you can say that unemployment insurance kept well over three million Americans out of official poverty last year. Not next year, though.

Speaking of which, I was just looking at some personal income numbers. Most people don’t know this—and I didn’t know the extent of it until I looked at the figures—but tax cuts and government assistance have offered enormous support to personal incomes during the recession and weak recovery. For example, the tax share of personal income fell by three percentage points over the last several years—for that, you can thank last year’s stimulus bill. (Funny how most Americans think that Obama raised their taxes.) And what economists call government transfer payments—benefits like Social Security and unemployment insurance—rose from 14% of income before the recession to 18% now. Add that four point rise to the three point decline in taxes and you see that household incomes would be about 7% below where they are today without government action, much of it from the maligned stimulus bill. That 7% is nearly a full month’s income. Fiscal policy certainly hasn’t turned bust to boom, and it could have been a lot more potent if it’d been bigger and better designed, but still, without it, we’d be wearing barrels.

budget cuts: take food from the disabled

Meanwhile, the increasingly Murdochized Wall Street Journal had a piece the other day pointing to the states as a model for Washington on how to do budget cutting. The news pages of that paper move further rightward by the day, which is a very sad thing, because the Journal used to be a real treasure. States are taking tough measures because they have to—most are required to balance their budgets. And these measures are mean and ugly. Over the last three years, 29 states have raised fees on or cut benefits for the elderly and disabled. States have also been cutting aid to local governments, which means they in turn have to cut benefits and services. A model is Indiana, whose governor Mitch Daniels is a likely Republican presidential candidate. He’s balanced his state’s budget by ending collective bargaining rights for state employees, cutting $150 million from aid to colleges and universities, and hacking away at assistance to foster parents and the developmentally disabled. But since this is the USA, where meanness is often admired as strength of character, Daniels is a popular figure in his state. What a country.

Letter on Null’s denialism: please read and act!

Since comments on this “blog” don’t get Tweeted and such, I wanted to point out two comments from George Carter of The Foundation for Integrative AIDS Research, and organization that sponsors clinical trials of alternative therapies for HIV/AIDS. Unlike Null’s ludicrous and dangerous HIV denialism, FIAR supports conventional therapies, but also sees great supplementary value in more “natural” approaches. This seems like an eminently sensible position, but apparently not sensationalist enough to appeal to the loons in the Null set.

Carter’s first post outlines his position, and makes the point that HIV denialists, who claim that antiretroviral therapies are either useless or harmful, are outright murdering people. This should be said bluntly: as Carter puts it, Null’s ideas can kill people. And his second post lists the impressive and growing number of signers, individual and institutional, of the letter to WBAI.

There’s no direct link to his posts, so visit the comments and scroll down or search for “Carter.” And a few more emails to the authorities wouldn’t hurt:

Tony Bates, interim program director, WBAI
Berthold Reimers, interim general manager, WBAI
Pacifica national board, goes to entire Pacifica board