Interviews of Pat Buchanan and Cynthia McKinney on Al Jazeera

Great stuff indeed; Pat Buchanan and Cynthia McKinney interviewed by Riz Khan:

Part 1



Part 2:



Small note: I had no idea Buchanan liked Palin. The thought struck me as so obscenely stupid that I almost decided not to post the first part of the interview with him. But then I still decided to post it. For all his wrongs, Buchanan is at least a real old style conservative, not the Neocon breed now running the GOP. And then, I don't like censorship anyway - so I left both parts.

Iraqi cleric issues decree against SOFA

Press TV reports:

A senior Shia cleric has issued a religious decree prohibiting Iraqis from signing a controversial security agreement with the US.

Grand Ayatollah Seyyed Kazem al-Husseini al-Haeri issued a fatwa (decree) against the US-proposed Status of Forces Agreement (SOFA).

The cleric said that the agreement was in violation of the Islamic law, calling it a humiliating pact that would undermine Iraq's sovereignty.

The US Joint Chiefs of Staff, Admiral Michael Mullen warned that Iraq risked security losses of 'significant consequence' unless it approved the deal, AFP reported.

The deal which would determine a legal framework for the presence of US forces in the country after their UN mandate expires in December 2008 would provide Washington with permanent military bases in Iraq.

The deal has so far met fierce opposition by a majority of lawmakers, whose approval is necessary for a final agreement.

The Iraqi cabinet and the Presidency Council must also approve the deal.

In a Tuesday cabinet meeting, Iraqi ministers refused to support the deal's latest draft and called for amendments to the proposal.

The agreement is also opposed by the Iraqi people who have been staging rallies across the country to protest US military presence in the country.

Alan Dershowitz endorses Obama as a Trojan Horse for Israel

I just came across an interesting read on Uruknet (via Palestinian Pundit). Turns out that the foam-at-his-mouth Israel supporter Alan Dershowitz endorses Obama. Dershowitz' for reasons which are very telling:

I think it is better for Israel to have a liberal supporter in the White House than to have a conservative supporter in the oval office. Obama's views on Israel will have greater impact on young people, on Europe, on the media and on others who tend to identify with the liberal perspective. Although I believe that centrists liberals in general tend to support Israel, I acknowledge that support from the left seems to be weakening as support from the right strengthens. The election of Barack Obama -- a liberal supporter of Israel -- will enhance Israel's position among wavering liberals. As I travel around university campuses both in the United States and abroad, I see radical academics trying to present Israel as the darling of the right and anathema to the left. As a liberal supporter of Israel, I try to combat that false image. Nothing could help more in this important effort to shore up liberal support for Israel than the election of a liberal president who strongly supports Israel and who is admired by liberals throughout the world.

You follow the logic? Since Obama is popular among "liberals" and since Obama is totally devoted to Israel, an Obama Presidency will place the Left (which is otherwise rather critical of Israel) in the position to have to support Israel (or condemn their darling Obama).

Not bad eh?!

Dershowitz is acutely aware that Isarel's image has gone down the tubes among the so-called Left far more than among "conservatives" and thus he wants Obama to serve as kind of "political Trojan Horse" to shove his darling "Jewish state" down the throats of the otherwise rather disgusted Left "liberals".

And he will probably get his way too.

Tractatus Logico Palestinicus

by Gilad Atzmon for Palestine Think Tank

Atzmon tries to lift the Palestinian Discourse where Wittgenstein left it…

1 “What can be said at all can be said clearly, and what we cannot talk about, we must pass over in silence.” (Ludwig Wittgenstein 1918)

1.1 Humanism and ethics are ends worth fighting for.

1.2 Western politics and political discourse (on the other hand) are concerned with power and hegemony.

1.3 Hence, humanism and ethics are foreign to the Western political discourse and vice versa.

2 The Palestinian liberation struggle is grounded on humanist and ethical arguments since it is based on moral rights, namely ‘the right of return’ and ‘liberation’.

2.1 Since the Palestinian liberation struggle is a humanist cause, Western politicians and political discourse are foreign to the Palestinian struggle.

2.11 As a result Western politics left, right and centre were not able to provide for the Palestinian people and their struggle over the period of decades of Zionist abuse.

2.12 This is unfortunately a true reading of the colossal failure of the left in helping the Palestinian people. Being a political discourse, the left is concerned with power and hegemony. Consequently it had been exploiting the Palestinian discourse in order to maintain its own political relevance (or rather irrelevance) within its imaginary universe.

2.121 Palestinians have learned their lesson. Their liberation movement has matured and abandoned the utopian dream that was misleading and foreign to their national cause.

2.1211 Since the Palestinian struggle is a geographically orientated, ethnic and national struggle, proletarian, cosmopolitan ideologies better revise accordingly.

2.122 However, truth must be said. Western leftist campaigners were very effective in producing solidarity culture, whether these are badges, scarves and placards, which they circulated among themselves and to close family members.

2.123 And yet, badges, placards and flyers didn’t save a single Palestinian kid from being shelled by an Israeli tank.

2.2 The Palestinian people will have to liberate themselves.

2.21 And the solidarity activists had better learn to listen.

3 Since ‘humanism and ethics are worth fighting for’ (1.1),

3.1 And the Palestinian struggle is a human cause (2.1),

3.2 We must support the Palestinians for what they are and their (democratic) choice.

4 There is an inherent difficulty within the heart of the Palestinian solidarity discourse that must be addressed:

Zionism (ideology), Judaism (religion), Jewishness (identity) and the Jews (people) are closely related, confusing terms. Consequently, any form of pro-Palestinian activism is curtailed by the fear of accusations of sustaining ideas that may be considered by some as racism.

4.01 At the same time, the vast majority of the Palestinians and solidarity activists realise that Israel, Jewish lobbies, Jewish pressure groups and any other form of Jewish tribal activism are often indistinguishable.

4.1 The question that comes to mind is: how can we say what we believe to be the truth and still regard ourselves as humanists?

4.12 How can we talk openly about the Jewish state, Jewish lobbying, Judaism and Jewishness and still maintain an anti-racist humanist and ethical stand?

4.2 The answer is simple. We can do so only if we manage to categorically dismantle the traces of any racial argument. We must refrain from talking about the people yet attacking any form of Zionism, Jewish political tribalism and Jewishness. We must attack it as an ideology and as a dogmatic credo.

4.3 We are entitled to do so as humanists due to the simple reason that every form of Jewish tribal politics is racially orientated and exclusivist. We are entitled to refer to Jewish political tribalism as a non-humanist and anti-universalist worldview.

4.4 Consequently, dismantling Jewish ideology and political tribalism is a humanist task.

4.5 Fighting Jewish tribal politics is a humanist and ethical act because it aims toward peace, universalism and inclusiveness (as opposed to war, tribalism and exclusiveness).

5 “What can be said at all can be said clearly, and what we cannot talk about, we must pass over in silence.”

Colin Powell takes the prize for the lamest endorsment ever

I just came across the transcript of Colin Powell's endorsement of Barak Obama. Take a look:

“So when I look at all of this and I think back to my Army career, we’ve got two individuals, either one of them could be a good president, but which is the president that we need now? Which is the individual that serves the needs of the nation for the next period of time? And I come to the conclusion that, because of his ability to inspire, because of the inclusive nature of his campaign, because he is reaching out all across America, because of who he is and his rhetorical abilities, and we have to take that into account, as well as his substance—he has both style and substance—he has met the standard of being a successful president, being an exceptional president. I think he is a transformational figure, he is a new generation coming into the world—onto the world stage, onto the American stage, and for that reason I’ll be voting for Senator Barack Obama.”

(source: Democracy Now!)

Is there any substance here? Am I missing something?!

First, Powell says that *either* candidate could make a good president. Bad, bad start for an endorsement, in particular one made by a former Dubya cabinet member dumping his own Party and Party candidate. But then it gets worse.

• Ability to inspire?
• The inclusive nature of his campaign?
• Reaching out across America?
• Rhetorical abilities?
• Style and substance?

What kind of nonsense is this? Hitler had a terrific ability in inspire, did he not? How about some *substance* here? Inspire for what?!

What about the 'inclusive' and 'reaching out across America'? Is there anything to this nonsense other than Barak is Black and he wants Whites to vote for him?

Rhetoric, style and substance? Back to Hitler again? No seriously, what kind of substance is Colin Powell talking about?

Turns out it does not matter in the least. You know why? Because,

"he has met the standard of being a successful president, being an exceptional president"

Really? Even before being elected Obama has ALREADY met the standard of being an exceptional President? Doing what? Just running for the Presidency?!

Colin Powell's endorsement of Barak Obama should displace his disgraceful speech at the UNSC about Iraq (imaginary) weapons of mass destruction as the single dumbest and most inadequate public statement he has ever made.

The fact that Obama immediately reciprocated by offering Powell a position in his cabinet is not even funny. It's scary.

Guys, lets' face it: Obama or McCain - we are screwed.

The Saker

The Wall of Hate - a must see video for every American home

There are, alas, many examples of grotesque violations of international law, human rights and basic norms of civilized behavior in our times. But the arrogant, brazen and cynical one is probably also the one which the least number of people have had the courage to condemn even after the International Court of Justice in the Hague did so: the "Wall of Hate" built by the racist Zionist state of Israel.

Frankly, the Wall is not the problem here - it is just a manifestation, a symptom, of the fundamentally racist character of the self-proclaimed "Jewish state", the last country on the planet to openly declare itself ethnically pure. But it would be grossly unfair to only blame the racist Israelis for this Wall. At least, the Israelis have largely given up any pretense of trying to resolve the "Palestinian question" (why is it called "Palestinian question" and not a "Jewish question" anyway?! Nobody spoke of the "Black question" in South Africa...) by civilized means. But what about the rest of the presumably civilized, democratic and law-abiding world? What about the rest of the Arab world? What about the Islamic states?

The rest of the world deal with Israel in a business as usual manner, and most politicians try to outcompete each other in expressions of the most devoted pro-Israeli and pro-Zionist feelings (think of Biden here claiming he is a "non-Jewish Zionist"). Only very few states, such as Iran, have had the courage to openly and fully reject any kind of "business as usual" with the last racist state on the planet.

The Wall of Hate is a disgrace for all of mankind, for all of us.

I urge you to pass on this short video to all your friends and contacts.

Only our silence makes this Wall possible.

The Saker

Iraqi Shias organize a massive demonstration against the proposed US SOFA

Al-Manar reports:

Muslim Shiite cleric Moqtada al-Sadr urged Iraqi lawmakers on Saturday to reject a planned US-Iraqi security deal as tens of thousands of his followers poured on to the streets of Baghdad in a massive anti-American protest.

"When the agreement is in your hands, the destiny of Iraq and its people is also in your hands," Sadr said in a statement, speaking to MPs, whose approval is necessary once the deal is signed by leaders of the two countries.

"Do not vote for the agreement. If they tell you the agreement ends the occupation ... no, the occupier will still remain. If you are told that it would give sovereignty to Iraq, it is a lie."

Sadr, who is reputed to be living in Iran, is a strong opponent of the US presence in Iraq, and has consistently opposed the deal since it was proposed last year. US and Iraqi negotiators have reached agreement on a draft deal that would govern the status of American forces in Iraq after the present UN mandate ends in December. The pact must be approved by leaders of both countries as well as the Iraqi parliament.

Details have not been made public but officials have said agreement was reached on a timeline for withdrawing all US combat troops from Iraq by the end of 2011. A key point of contention in the months-long negotiations has been whether US occupation troops would fall exclusively under US jurisdiction if accused of serious crimes in Iraq.

Iraqi Foreign Minister Hoshyar Zebari said on Saturday it was "time to take decisions" regarding the security deal. "It is difficult to reopen the text. The parliament either ratifies or rejects it," he said, adding that the deal does not allow Washington to have a permanent military presence in Iraq. "There is no hidden agenda ... the next few days are very crucial for Iraqi leaders to decide," he said.

Meanwhile, tens of thousands of Sadr supporters spat anger at US occupation and the proposed deal as they marched through the dusty streets of Baghdad. Effigies of US President George W. Bush -- with bandaged head and fractured right arm -- and of Secretary of State Condoleezza Rice were set ablaze along with American flags.

Sadrist MP Nasser Al-Saadi said that more than one million people took part in the demonstrations, which could not be independently confirmed. The march began in the cleric's Sadr City bastion in east Baghdad and ended at nearby Mustansiriyah Square, where the effigies were torched.

"No, No, to America! No, No to the devil!" shouted crowds of men, women and children as they walked the three kilometre (two mile) route. Carrying Iraqi flags and banners of the Sadr movement, the demonstrators demanded an end to the US occupation. "Get out occupier! We demand an end to the occupation!" they shouted.

Karim Kadhim, a demonstrator from the holy city of Najaf, said "we are marching to reject the occupation. "Would America like to be occupied by any other country? Would America like its sons to be attacked? Why are they occupying our country?" he asked. "They have been lying for the past five years. They told us they are coming to free us and go. But they are still lying."

Demonstrators also chanted slogans praising Sadr's Mahdi Army. "The Mahdi Army is still powerful and Sadr is still powerful," they chanted, referring to the cleric's 60,000-strong militia. The protest was originally to be held on April 9 -- the anniversary of the fall of Saddam Hussein's regime. It was postponed due to clashes between Sadr's Mahdi Army and US occupation forces.

Press TV reports:

Iraqi demonstrators have staged massive anti-US rallies in Baghdad to protest the controversial US-proposed security deal.

The rallies were held as the security pact nears its final stages. Nearly a million demonstrators from different cities of the war-torn country participated in the rallies.

Denouncing the American occupation of Iraq, the crowds shouted anti-US slogans and called for ending the US presence in the oil-rich country.

"Get out occupier! We demand an end to the occupation!" shouted protesters.

The move comes a day after Iraqi Prime Minister Nouri al-Maliki sent the draft of the security deal to the parliament for final approval.

Last week Iraqi clerics including the anti-American cleric Moqtada al-Sadr called for a nationwide demonstration on October 18.

On Friday, several Sunni and Shia clerics spoke out against the deal, as opposition, among Iraqis from all walks of life, was growing against it. The clerics argued that the Iraqi public knew little about the terms of the deal which could change the future of the nation.

Meanwhile, Sadr Eddin al-Qzbangi, a confidant of Iraq's most revered Shia cleric, Grand Ayatollah al-Sistani said Friday that the Ayatollah has “expressed concerns about the secret provisions of the agreement."

Al-Sistani has also said any accord must have national consensus.

Al-Qzbangi said that although al-Sistani has repeatedly called for clarification of the deal, the details have not been released.

Al-Qzbangi urged the Iraqi parliament to study all the terms of the agreement very carefully.

The draft accord includes a timeline for US withdrawal by the end of 2011 and gives Baghdad limited authority to try US contractors and soldiers for major crimes committed off-duty and off-base.

RAW VIDEO FOOTAGE OF THE DEMONSTRATIONS:

Parsing Mr. Paulson’s Bailout Speech: The Unprecedented Giveaway of Financial Wealth Story

by Michael Hudson for Global Research

Mr. Paulson’s bailout speech on Monday, October 13 poses some fundamental economic questions: What is the impact on the economy at large of this autumn’s unprecedented creation and giveaway of financial wealth to the wealthiest layer of the population? How long can the Treasury’s bailout of Wall Street (but not the rest of the economy!) sustain a debt overhead that is growing exponentially? Is there any limit to the amount of U.S. Treasury debt that the government can create and turn over to its major political campaign contributors? And is it too much to say that we are seeing the end of economic democracy and the emergence of a financial oligarchy – a self-serving class whose actions threaten to polarize society and, in the process, stifle economic growth and lead to the very bankruptcy that the bailout was supposed to prevent?

Everything that I have read in economic history leads me to believe that we are entering a nightmare transition era. The business cycle is essentially a financial cycle. Upswings tend to become economy-wide Ponzi schemes as banks and other creditors, savers and investors receive interest and plow it back into new loans, accruing yet more interest as debt levels rise. This is the “magic of compound interest” in a nutshell. No “real” economy in history has grown at a rate able to keep up with this financial dynamic. Indeed, payment of this interest by households and businesses leaves less to spend on goods and services, causing markets to shrink and investment and employment to be cut back.

Wearing blinders to avoid confronting any reality that would suggest that banks cannot make money ad infinitum by selling more and more credit – that is, indebting the non-financial economy more and more – government officials such as Treasury Secretary Paulson or Federal Reserve Chairman Bernanke are professionally unable to acknowledge this problem, and it does not appear in most neoclassical or monetarist textbooks. But the underlying mathematics of compound interest are rediscovered in each generation, often prompted by the force majeur of financial crisis.

A generation ago, for instance, Hyman Minsky gained a following by describing what he aptly called the Ponzi stage of the business cycle. It was the phase in which debtors no longer were able to pay off their loans out of current income (as in Stage #1, where they earned enough to cover their interest and amortization charges), and indeed did not even earn enough to pay the interest charges (as in Stage #2), but had to borrow the money to pay the interest owed to their bankers and other creditors. In this Stage #3 the interest was simply added onto the debt, growing at a compound rate. It ends in a crash.

This was the flip side of the magic of compound interest – the belief that people can get rich by “putting money to work.” Money doesn’t really work, of course. When lent out, it extracts interest from the “real” production and consumption economy, that is, from the labor and industry that actually do the work. It is much like a tax, a monopoly rent levied by the financial sector. Yet this quasi-tax, this extractive financial rent (as Alfred Marshall explained over a century ago) is the dynamic that is supposed to enable corporate, state and local pension funds to pay for retirement simply out of stock market gains and bond investments – purely financially and hence at the expense of the economy at large whose employees are supposed to be gainers. This is the essence of “pension-fund capitalism,” a Ponzi-scheme variant of finance capitalism. Unfortunately, it is grounded in purely mathematical relationships that have little grounding in the “real” economy in which families and companies produce and consume.

Mr. Paulson’s bailout plan reflects a state of denial with regard to this dynamic. The debt overhead is self-aggravating, becoming less and less “solvable” and hence more of a quandary, that is, a problem with no visible solution. At least, no solution acceptable to Wall Street, and hence to Mr. Paulson and the Democratic and Republican congressional leaders. The banks and large swaths of the financial sector are broke from having made bad gambles in the belief that money could be made to “work” under conditions that shrink the underlying industrial economy and stifle wage gains, eroding the market for consumer goods. Debt deflation reduces sales and business activity in general, and hence corporate earnings. This depresses stock market and real estate prices, and hence the value of collateral pledged to back the economy’s debt overhead. Negative equity leads to bankruptcy and foreclosures.

By increasing America’s national debt from $5 trillion earlier this year to $13 trillion in almost a single swoop by taking on junk loans and other bad investments rather than letting them to under as traditionally has occurred in the “cleansing” culmination of business crashes (“cleansing” in the sense of clean slates for debts that cannot reasonably be paid), Mr. Paulson’s bailout actions increase the interest payments that the government must pay out of taxes or by borrowing (ore printing) yet more money. Someone must pay for bad debts and junk loans that are not wiped off the books. The government is now to take on the roll of debt collector to “make a profit for taxpayers” by going around and kneecapping the economy – which of course is comprised primarily of the “taxpayers” ostensibly being helped.

It is a con game. Financial gains have soared since 1980, but banks and institutional investors have not used them to finance tangible capital formation. They simply have recycled their receipt of interest (and credit-card fees and penalties that often amount to as much as interest) into yet new loans, extracting yet more interest and so on. This financial extraction leaves less personal and business income to spend on consumer goods, capital goods and services. Sales shrink, causing defaults as the economy is less able to pay its stipulated interest charges.

This phenomenon of debt deflation has occurred throughout history, not only over the modern business cycle but for centuries at a time. The most self-destructive example of financial short-termism is the decline and fall of the Roman Empire into debt bondage and ultimately into a Dark Age. The political turning point was the violent takeover of the Senate by oligarchic creditors who murdered the debtor-oriented reformers led by the Gracchi brothers in 133 BC, picking up benches and using them as rams to push the reformers over the cliff on which the political assembly was located. A similar violent overthrow occurred in Sparta a century earlier when its kings Agis and Cleomenes sought to annul debts so as to reverse the city-state’s economic polarization. The creditor oligarchy exiled and killed the kings, as Plutarch described in his Parallel Lives of the Illustrious Greeks and Romans. This used to be basic reading among educated people, but today these events have all but disappeared from most people’s historical memory. A knowledge of the evolution of economic structures has been replaced by a mere series political personalities and military conquests.

The moral of ancient and modern history alike is that a critical point inevitably arrives at which economies either adopt hard creditor-oriented laws that impoverish the population and plunge downward socially and militarily, or save themselves by alleviating the debt burden. What is remarkable today is the almost total failure of political leaders to provide an alternative to Mr. Paulson’s bailout of Wall Street from the Bear Stearns bankruptcy down through the government takeover of Fannie Mae and Freddie Mac to last week’s giveaway to the banks. Nobody is even warning where this destructive decision is leading. Governments ostensibly representing “free market” philosophy are acting as the lender of last resort – not to households and business non-financial debtors, and not to wipe out the debt overhang in a Clean Slate, but to subsidize the excess of financial claims over and above the economy’s ability to pay and the market value of assets pledged as collateral.

This attempt is necessarily in vain. No amount of money can sustain the exponential growth of debt, not to mention the freely created credit and mutual gambles on derivatives and other financial claims whose volume has exploded in recent years. The government is committed to “bailing out” banks and other creditors whose loans and swaps have gone bad. It remains in denial with regard to the debt deflation that must be imposed on the rest of the economy to “make good” on these financial trends.

Here’s why the plan for the government to recover the money is whistling in the dark: It calls for banks to “earn their way out of debt” by selling more of their product – credit, that is, debt. Homeowners and other consumers, students and car buyers, credit card users and their employers – the “taxpayers” supposed to be helped – are to pay the repayment money to the banks, instead of using it to purchase goods and services. If they charge only 6% per year, they will extract $93 billion in interest charges – $42 billion to pay the Treasury for its $700 billion, and another $51 billion for the Federal Reserve’s $850 billion in “cash for trash” loans.

If you are going to rob the government, I suppose the best strategy is simply to brazen it out. To listen to the mass media, there seemed no alternative but for Congress to ram the plan through just as Wall Street lobbyists had written i, to “save the market from imminent meltdown,” refusing to hold hearings or take testimony from critics or listen to the hundreds of economists who have denounced the giveaway.

Hubris has reached a level of deception hardly seen since the 19th century’s giveaways to the railroad barons. “We didn’t want to be punitive,” Mr. Paulson explained in a Financial Times interview,[1] as if the only alternative was an enormous gift. Europe did not engage in any such giveaway, yet he claimed that England and other European countries forced his hand by bailing out their banks, and that the Treasury simply wanted to keep U.S. banks competitive. Wringing his hands melodramatically, he assured the public on Monday that “We regret having to take these actions.” Banks went along with the pretense that the bailout was a worrisome socialist intrusion into the “free market,” not a giveaway to Wall Street in the plan drawn up by their own industry lobbyists. “Today’s actions are not what we ever wanted to do,” Mr. Paulson went on, “but today’s actions are what we must do to restore confidence to our financial system.” The confidence in question was a classic exercise in disinformation – a well-crafted con game.

Mr. Paulson depicted the government’s purchase of special non-voting stock as a European-style nationalization. But government’s appointed public representatives to the boards of European banks being bailed out. This has not happened in America. Bank lobbyists are reported to have approached Treasury to express their worry that their shareholdings might be diluted. But the Treasury-Democratic Party plan invests $250 billion in government credit in non-voting shares. If a recipient of this credit goes broke, the government is left the end of the line behind other creditors. Its “shares” are not real loans, but “preferred stock.” As Mr. Paulson explained on Monday: “Government owning a stake in any private U.S. company is objectionable to most Americans – me included.” So the government’s shares are not even real stock, but a special “non-voting” issue. The public stock investment will not even have voting power! So the government gets the worst of both worlds: Its “preferred stock” issue lacks the voting power that common stock has, while also lacking the standing for repayment in case of bankruptcy that bondholders enjoy. Instead of leading to more public oversight and regulation, the crisis thus has the opposite effect here: a capitulation to Wall Street, along lines that pave the ground for a much deeper debt crisis to come as the banks “earn their way out of debt” at the expense of the rest of the economy, which is receiving no debt relief!

Mr. Paulson shed the appropriate crocodile tears on behalf of homeowners and the middle class, whose interest he depicted as lying in ever-rising housing and stock market prices. “In recent weeks, the American people have felt the effects of a frozen financial system,” he explained. “They have seen reduced values in their retirement and investment accounts. They have worried about meeting payrolls and they have worried about losing their jobs.” He almost seemed about to use the timeworn widows and orphans cover story and beg Americans please not to unplug Granny from her life support system in the nursing home. We need to preserve the value of her stocks, and help everyone retire happily by restoring normal Wall Street financial engineering to make voters rich again.

European executives who steered their banks into the debt iceberg have been fired. England wiped out shareholders in Northern Rock last summer, and more recently Bradford and Bingley. But in America the culprits get to stay on. No bank stockholders are being wiped out here, despite the negative equity into which the worst risk-taking banks have fallen or the prosecutions brought against them for predatory lending, consumer fraud and related wrongdoing.

Government aid will be used to pay exorbitant salaries to the executives who drove these banks into insolvency. “Institutions that sell shares to the government will accept restrictions on executive compensation, including a clawback provision and a ban on golden parachutes,” Mr. Paulson pretended – only to qualify it by saying that the rule would apply only “during the period that Treasury holds equity issued through this program.” The executives can stay on and give themselves the usual retirement gifts after all, prompting Democratic Congressman Barney Frank complained about how weak the Treasury restrictions are. “Compensation experts say that the provisions, though politically prudent to appease public anger, will probably have little real impact on how financial executives are paid in coming years. They predict banks will simply pay higher taxes and will find other creative ways of paying their executives as they see fit. Some say there could even be a sudden surge in compensation as soon as the government program ends, in a few years, leading to eye-popping numbers down the road. … When Congress limited the tax deductibility of cash salaries to $1 million, for example, it simply led to an explosion in stock options used as compensation and even higher total payouts.”[2]

And speaking of stock options, the government shortchanged itself here too, despite its promises to ensure that it will shares in the gains when banks recover. Senator Schumer went so far as to assure voters that “under any capital injection plan that Treasury pursues, dividends must be eliminated, executive compensation must be constrained, and normal banking activities must be emphasized.”[3] This was mostly hot air. England and other countries have insisted that banks not pay dividends until the government is reimbursed. The idea is to avoid using public money to pay dividends to existing shareholders and continued exorbitant salaries to their mismanagers! But the terms of the U.S. bailout is made simply call for banks not increase their dividend payouts – a policy they most likely would follow in any case in view of their earnings crunch.

Mr. Schumer verged on the ridiculous when he proclaimed: “We must operate in the same way any significant investor operates in these situations – when Warren Buffett invested in Goldman Sachs and General Electric in recent weeks, he demanded strict, but not onerous terms. The government must be similarly protective of taxpayer interests.” But Mr. Buffett obtained a much better deal for his $5 billion investment in Goldman Sachs, including warrants to buy its stock at a price below the going price when he helped rescue the company. Likewise in England, the government took stock ownership at low prices before the bailout, not at higher prices after it! But instead of exercising its warrants at the depressed prices where bank stocks stood at the time Mr. Paulson detailed the bailout terms, the U.S. Treasury would be able to exercise its warrants (equal to 15 percent of its investment) only at prices that were to be set after the banks had time to recover with the Treasury’s aid. Existing stockholders thus will benefit more than the government – which is why bank stocks soared on news of the bailout’s terms. So the government does not appear to be a good bargainer in the public interest. In fact, Mr. Paulson may be guilty of deliberate scuttling of the public interest that, as Treasury Secretary, he is supposed to defend.

Given his financial experience, Mr. Paulson had to know how deceptive his promise was in placing such emphasis on the government’s stock options, the sweetener that has made so many executives fabulously wealthy: “taxpayers will not only own shares that should be paid back with a reasonable return, but also will receive warrants for common shares in participating institutions,” he explained. But the “reasonable return” is only 5% annually, just above what the government typically has to pay, not a rate reflecting anything like what the “free market” now charges Wall Street firms with negative equity. The government’s $250 billion in preferred stock will carry a dividend that rises to 9% after five years, with no limit on how long the loan may be outstanding.[4]

All I can say is, Wow! If only homeowners could get a similar break: a reduction in their interest rate to just 5%, rising to a penalty rate of just 9% – without the heavy penalties and late fees that Countrywide/Bank of America charges! By contrast, German banks that receive a public rescue will pay “a fee of at least 2% annually of the amount guaranteed. The U.K. will charge 0.50% plus the cost of default insurance on a bank's debt.”[5] A British banker wrote to me that “the government offers 12% preference shares, and ordinary shares at an absolutely huge discount to asset value to provide the cash.” But the U.S. Government agreed to exercise its stock options at the post-bailout price, not the price prior to rescue. It even gives up most of these options if the banks do repay the Treasury’s loan. On the excuse of encouraging private Wall Street investors to replace government “ownership” and “intrusion” into the marketplace, banks can “cut in half the number of common shares the government will eventually be able to purchase. That can be done if a bank sells stock by the end of 2009, and raises at least as much cash as the government is investing.”[6]

These bailout terms suggest that what Wall Street wants is pretty much what colonialist Britain achieved for so many years in India and Africa: puppet leaders with an imperial political advisor, in America’s case a Secretary of the Treasury and a vice-regent as head of the Federal Reserve System. But what the rest of the economy needs is a genuinely free leader able to impose better and more equitable laws to write down debt, not build it up and bail out more bad loans. Within the present administration itself, Sheila Bair, head of the Federal Deposit Insurance Corporation, complained in a Wall Street Journal interview that she didn’t understand “Why there’s been such a political focus on making sure we’re not unduly helping borrowers but then we’re providing all this massive assistance at the institutional level.” She “described painstaking efforts made by lawmakers in crafting the federal Hope for Homeowners program to make sure it limited resale profits for borrowers who received affordable home loans,”[7] by giving the government a share of the rising sales price.

The imbalance between creditor demands and debtors’ ability to pay is indeed the problem! Mr. Paulson claimed in his Monday address that he needed to get to the root of the economic problem. But in his view it is simply that the banks “are not positioned to lend as widely as is necessary to support our economy. Our goal is to see … that they can make more loans to businesses and consumers across the nation.” As he explained in his Financial Times interview (cited above), “for the first time you have seen an action that is systematic, that is getting at the root causes” of the financial crisis. But his perspective is remarkably narrow-minded. It denies that the problem is debt above and beyond the ability of the economy at large to pay, and higher than the market price of property and assets pledged as collateral.

Creating a system for the banks to “earn their way out of debt” means creating yet more interest-bearing debt for the economy at large. Mortgage loans are what is supposed to restore high housing prices and office costs – precisely what caused the debt meltdown in the first place! Despite Mr. Paulson’s and Ms. Bair’s characterization of the present crisis as merely a liquidity problem, it is really a debt problem. The volume of real estate debt, auto debt, student loans, bank debt, pension debts by municipalities and states as well as private companies exceed their ability to pay.

Shortly after Mr. Paulson’s Monday speech a Dutch economics professor, Dirk Bezemer, wrote me that: “In my thinking I liken it to a Ponzi game where in the final stages the only way to keep things going a bit longer is to pump in more liquidity. That is a solution in the sense that it restores calm, but only in the short run. This is what we now see happening and – despite the 10% stock market rally today – I am still bracing myself for the inevitable end of the Ponzi game – suddenly or as a long drawn out debt deflation.” He went on to explain what he and other associates of mine have been saying for many years now: “The actual solution is to separate the Ponzi from the non-Ponzi economy and let the pain be suffered in the first part so as to salvage what we can from the second. This means bailing out homeowners but not investment banks, etc. The qualification to this general approach is that those Ponzi game players whose demise is a real ‘system threat’ need support, but only with punitive conditionalities attached. And just like Third World countries, they won’t have a choice.”

Neither the Treasury nor Congress is helping to resolve this problem. The working assumption is that giving newly created government debt to the banks and Wall Street will lead to more lending to re-inflate the real estate and stock markets. But who will lend more to the one-sixth of U.S. homes already said to have fallen into negative equity territory? As debt deflation eats into the domestic market for goods and services, corporate sales and earnings will shrink, dragging down stock prices. Wall Street is in control, but its policies are so shortsighted that they are eroding the underlying economy – which is passing from democracy to oligarchy, and indeed it seems to a bipartisan financial kleptocracy.

Michael Hudson is a former Wall Street economist specializing in the balance of payments and real estate at the Chase Manhattan Bank (now JPMorgan Chase & Co.), Arthur Anderson, and later at the Hudson Institute (no relation). In 1990 he helped established the world’s first sovereign debt fund for Scudder Stevens & Clark. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) He can be reached via his website, mh@michael-hudson.com

[1] Krishna Guha, “Action to address ‘root causes’” Financial Times, October 15, 2008.
[2] Reed Abelson, “Banks’ Bailout Unlikely to Crimp Executive Pay,” The New York Times, October 14, 2008.
[3] Charles Schumer, “How to Rescue the Banks,” Wall Street Journal, October 14, 2008.
[4] Deborah Solomon, Damian Paletta, Jon Hilsenrath and Aaron Lucchetti, “Bush Announces Plan to Buy Stakes in Largest Banks,” Wall Street Journal, October 14, 2008.
[5] Marcus Walker, Sara Schaefer Munoz and David Gauthier-Villars, “Next Move in European Bailouts: Paying for Them,” Wall Street Journal, October 14, 2008.
[6] Floyd Norris, “A Winner for Treasury? Time Will Tell,” The New York Times, October 14, 2008. He points out that the government’s “exercise price for the warrants will be the average common share price for the 20 days before the government makes its investment. That means that the price will reflect investor knowledge of the plan. If it continues to be favorably received by investors, that could mean the banks get higher prices for their shares than they would if the price were fixed today.”
[7] Damian Paletta, “FDIC Chief Raps Rescue for Helping Banks Over Homeowners,” Wall Street Journal, October 16, 2008.

Obama will not win. Why? Rednecks.

I don't like Obama. Not one bit. And I *want* to believe that most Americans are not Rednecks. But my friend, American Goy, thinks otherwise. I think he point of view should be heard. Here is what he thinks:
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The real America

Do you think that America is what you see in the big cities, with educated, centrist elite who are smart, erudite and surf the web for news?

Who read the blogs and sneer at FOX "news"?

Who can tell bullshit from the propaganda from the truth?

No, my friends.

America, the MAJORITY of America, is 'Married... with Children' land.

Observe.



Look, it's one of them foreign reporting crews actually showing the REAL America.

Ignorant and proud of it.

Patriotic, which translated means lets bomb the shit out of them Arabs and gooks and hajis (the word should be jingoistic, come to think of it).

Feeling the holy spirit, which translated means that they are brainwashed morons.

Against murdering unborn children, which means that they want those children to grow up to become soldiers and kill Arabs and hajis and gooks... or come home in a casket, or without a leg... an arm... an eye.

And because the American democracy is decided by a few swing states (remember - in our version of - haha - "democracy" - a 51% vote in a state means that ALL of the state's candidates vote for the winner).

Here's the breakdown, from FEC.gov - look up the electoral count - how much each state is worth in a presidential race.

So, while some of the big ones, like Illinois, will vote Obama, the race will be decided in places like Pennsylvania, Ohio (where this video was filmed), Virginia (which WILL vote for McCain).

You see - due to the quirk of the American election system - it is not the educated population who decide who the leader of the world (no, really, this is de facto true) should be.

It is the rednecks - as profiled by the BBC:

During this US election cycle we are hearing a lot from the pundits and candidates about "heartland voters," and "white working class voters."

On the other hand, I can quite imagine their concern, given what's at stake in the upcoming election. We represent at least a third of all voters and no US president has ever been elected without our support.

"We represent at least a third of all voters".

No, he is not exaggerating.

Contrary to the stereotype, we are not all tobacco chewing, guffawing Southerners, but are scattered from coast to coast. Over 50% of us live in the "cultural south", which is to say places with white Southern Scots-Irish values - redneck values.

They include western Pennsylvania, central Missouri and southern Illinois, upstate Michigan and Minnesota, eastern Connecticut, northern New Hampshire…

So when you look at what pundits call the red state heartland, you are looking at the Republic of Redneckia.

We come in one size: extra large. We are sometimes insolent and often quick to fight. We love competitive spectacle such as NASCAR and paintball, and believe gun ownership is the eleventh commandment.

We fry things nobody ever considered friable - things like cupcakes, banana sandwiches and batter dipped artificial cheese…even pickles.

I can confirm the extra large part. I live in a small town now, and the rednecks here are ALL, without fail, men and women, sporting triplets pregnancy bellies.

No, I am not exaggerating.

These people are huge.

They are triple the weight of an average European (UK fatsos excluded, as they admire America so much they adopted the junk food culture totally).

And most of all we are defiant and suspicious of authority, and people who are "uppity" (sophisticated) and "slick" (people who use words with more than three syllables). Two should be enough for anybody.

This is a key quote from the article.

This is why Palin's homely speech (American moron speech) is a hit with these guys and gals - they can't stand somebody who is edumacated and too smarty, too uppity.

Smart kids were beat up at school for being different and fake and fags.

Intelligence, erudition, manners - that is anathema to these... people.

A college educated person is someone to be suspicious of. After all, surely they are godless and want to kill babies. Librul elite! is a warning cry for the rest of the herd to close ranks.

If you have not seen the movie Idiocracy, I heartily recommend you buy it, rent it, steal it - and watch it.

You will understand when you see it, that America is doomed (seriously, you HAVE to see that movie).

And that is one of the reasons that, mystifying as it is to the outside world, John McCain's choice of the moose-shooting Alaskan woman with the pregnant unmarried teen daughter appeals to many redneck and working class Americans.

You might think that this is a joke, but it is not.

I talked to a bartender girl (who is below 21, by the way) some time ago.

The local scoop is, half of the local high school graduating class was knocked up and spitting babies like no tomorrow.

Half of all the senior graduating girls.

Of the WHOLE local high school class.

Pregnant.

We all understand that there is a political class which dominates in America, and that Sarah Palin for damned sure is not one of them. And the more she is attacked by liberal Democratic elements (translation: elite highly-educated big city people) the more America's working mooks will come to her defence.

Again, being stupid is OK - that is why Palin is "one of us".

Calling somebody stupid, as in "My god, you cannot be this moronic, this much of an idiot, and seriously think you are qualified for the position of the vice fucking president of the Yoo Ess Ey?!" is bad.

After all, in a crowd of inbred retards, you cannot call someone "an inbred retard".

Because the crowd around you at a bar might take an umbrage.

Her daughter had a baby out of wedlock? Big deal. What family has not?

Mine has not, bud.

My family, the atheist, non god believing, not church going, has never had an abortion (we use condoms, you see), and has never had a baby out of wedlock (those condoms again).

Meanwhile, you fill your women with more than the holy spirit it seems, when you people get drunk and out of your mind Friday night and howl at the moon (yes, I have seen that too - there is not much to do in a small town on a weekend night, except drink and fuck).

She is a Christian fundamentalist who believes God spat on his beefy paws and made the world in seven days? So do at least 150 million other Americans.

This is another key quote.

You see, 150 million Americans are certifiably INSANE.

Bat shit crazy.

Living in a delusion.

And yes, they really believe that dinosaurs walked the Earth with humans, as it was written in the bible and as it is shown in the Creation Museum - aka crazy land (you HAVE TO click this link).

Finally, the BBC article concludes with this:

Ultimately, the Scots Irish have had more of an effect on the American ethos than any other immigrant group. Here are a few you will recognize:

Belief that no law is above God's law, not even the US Constitution.

Hyper patriotism. A fighting defence of native land, home and heart, even when it is not actually threatened: ie, Iraq, Panama, Grenada, Somalia, Cuba, Nicaragua, Vietnam, Haiti and dozens more with righteous operations titles such as Enduring Freedom, Restore Hope, and Just Cause.

A love of guns and tremendous respect for the warrior ideal. Along with this comes a strong sense of fealty and loyalty. Fealty to wartime leaders, whether it be FDR or George Bush.

Personal pride in equality. No man, however rich or powerful, is better than me.

Perseverance and belief in hard work. If a man or a family is poor, it is because they did not work hard enough. God rewards those who work hard enough. So does the American system.

The only free country in the world is the United States, and the only reason we ever go to war is to protect that freedom.

I buy that.

I think that he nailed it.

The last two reasons though are such complete and utter bullshit but... that is what redneckians believe.

Add to that a Diebold "miracle" in several key states, mix with some voter purging which is going on...

Ohio
NYTimes: Ruling May Impede Thousands of Ohio Voters

More than 200,000 registered Ohio voters may be blocked from casting regular ballots on Election Day because of a federal appeals court decision on Tuesday requiring the disclosure of lists of voters whose names did not match those on government databases, state election officials and voting experts said.

200,000 voters purged in Ohio, the land of the holy spirit who hates them negro eyerab terrarists.

Pennsylvania
standardspeaker.com

Pennsylvania is among the states where voters’ named are purged for lists for no other reason than not voting for several consecutive elections.

Did you catch that?

Let me repeat - in Pennsylvania, voters are purged because they have not voted in previous elections.

So much for the get out and vote campaigns, eh?

Michigan

DETROIT, Michigan, Oct 14 (IPS) - A federal judge ruled Monday that the current practices to purge the voter rolls in Michigan are illegal and ordered Republican Secretary of State Terry Lynn Land to immediately stop the cancellation of registered voters whose voter identification cards are returned as undeliverable in the mail.

The purging of registered voters, many of whom lost their homes to bank foreclosure, in the state of Michigan prompted the federal lawsuit by the American Civil Liberties Union (ACLU), United States Student Association Foundation and the Advancement Project, and resulted in calls in Congress for a Justice Department investigation.

In Michigan, if you have had your home foreclosed, and your mail is being returned to sender, you were denied the right to vote (were, thank you the great spaghetti monster!).


See the pattern?

These are all important swing states, all states that both candidates MUST win to have a chance at becoming a president.

Rednecks.

They have this country by the balls.

Sigh.

Am not a big fan of Obama - but if we must (and we will) have someone who will send more aid to Israel, prostrate himself before AIPAC functionaries and ask what more we can do for their true country, bomb Iran and further destroy the country - I want that president to at least be intelligent enough to hold a conversation with.

On various topics.

Politics.

International situation.

Whether Sarkozy is a neocon (he is).

Why Canada's 60% population voted for liberal parties and yet Conservatives won the election (Canada's election process is even more fucked up than ours).

Discuss the "bailout" of the stockmarket and what it means, and how it is going to play out.


But these are not topics that rednecks are comfortable with.

NASCAR, baseball, football, "Palin is hot!", "Obama is a terrorist moslem!" are hot topics of conversation right now.

Who would have thought that after 8 years of bush, after 4 of bush sr, after reagan... I now fear for the future of my country more than ever.
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I still think Obama will win. I *refuse* to believe that Americans are capable of electing McCain. Not after 8 years of Dubya. And if I am naive, please don't tell me otherwise. Leave me that illusion until Election Day...

The Saker

What would Malcolm X say about Barak Obama?

So what do you think? Is Obama a threat to the system (a "field negro") or the obedient slave of the system (a "house negro")?

Is Obama a force for "change"?

Tips for New Paupers (a must read for non-Americans)

Unemployment. I thought I would never - ever- experience that. I had great Ivy League degrees, five languages, plenty of connections with the high and mighty and I was darn good at what I was doing. And then, one day, I got fired. Not for not doing my job, but for doing it. Doing it too well in fact.

That story still cannot be told, but I will sum it up like this: I was asked to analyze something by my boss, and analyze it I did. I even got it right, in fact. I warned the guys I was working for that they were in major and imminent danger of bad stuff happening to them. My boss passed my analysis to the higher ups and they absolutely *hated* it.

See, by its very nature my warning implied something which they really did not like: that I had seen something which they missed. And since their sacro-saint egos were just about the most important thing in the universe (at least to them), they got very angry at my boss who, as the spineless sniveling bitch that he was, immediately distanced himself from the analysis he had commissioned and signed and let me be the fall guy for the wrath of the folks at the top. They immediately fired me.

Things got a lot worse when within a short time my predictions fully materialized and some good people got killed in a very embarrassing event which got plenty of media coverage. Now my former bosses hated me even more: not only had I predicted something they totally denied, but I now knew that their incompetence had cost the lives of several good and innocent people and that the commission of inquiry they set up was bogus, little more than a deliberate cover-up.

I became a marked man once and forever. After several otherwise inexplicable events it became clear to me that I had been blacklisted (something two courageous friends actually confirmed to me later). I would never, ever find a job anywhere in Europe again. And from the social heights I had been used to I drop down to the bottomless abyss of unemployment. But unemployment "European style", not the obscene human rights violation which unemployment is in the USA.

My family was guaranteed a minimal income, enough to modestly make ends meet, I could keep our apartment, we were given free public transportation (which in Europe actually works rather well), our family was given free and *high quality* medical care (better than what most Americans *with* insurance get) and while we were not rich, we were not really poor either, at least not in a "destitute" sense.

But unemployment was still hell. Psychologically. This is something that I do not wish on my worst enemy. In fact, unemployment is *dangerous* as a lot of unemployed people end up sick, depressed, dependent on substances and many commit suicide. To escape this hell my family and I left Europe and moved to the USA were at least I could be a 'nobody' and disappear once and forever from the ever watchful eyes of my former bosses (who were more than happy to get rid of me).

My wife and I switched jobs. She works and I am now a full time homeschooling father of three (great) kids. We live close to the wonderful nature of Florida and my past has become mostly something which I only see in nightmares from time to time. I can live with that. We barely make ends meet, but at least we are far far away from the powerful of this world. Hopefully they will forget about us.

But this is not about me. This is about all the millions of Americans who have lost their jobs. Not only do they have to go through the hell which unemployment always is (and that is something which only a person who lived through it can fully understand), but they risk everything which we, in Europe, never risk loosing: healthcare, hygene, a decent place to live, etc. Add to this the social stigma of "living of government handouts" (how f**cking stupid that idea is: unemployment benefits are nothing more than a form of insurance which you pay for with your taxes) while being expected to "pull themselves up by their bootstraps" (another idea only worthy of a Neanderthal). I have seen many Americans who lost their jobs and my heart goes out to them as they experience a tragedy which nobody else in the developed world ever has to face: the loss of a job entails the loss of basic human rights.

I just read this piece by John Dolan on the Exiled website and I want to share it, in particular with my non-American readers who probably cannot imagine what unemployment and poverty means in the USA.

Oscar Wilde once remarked that "America is the only country that went from barbarism to decadence without civilization in between". From a social point of view this is absolutely true. The way the USA treats its poor, its sick, its unemployed and its prisoners is fundamentally un-civilized. The USA is the only developed country in the world which basically treats the poor, sick, unemployed as as people undeserving of respect, protection, care and support. The way the USA treats its prisoners makes the Taliban look outright progressive and civilized.

Anyway, let me get off my soapbox here and share with you the piece by John Dolan. Having lived in the USA for a total of 11 years now and having seen how the poor are treated here I can confirm the veracity of everything he writes here.

The Saker
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Little did I know that when I lost everything last year, I was doing research. At the time I thought it was just stupidity or bad luck or both. But now that the economy’s crashing, it turns out I’ve been out there gathering valuable tips for millions of new paupers.

And let me clarify, I’m talking real poverty.

My wife and I fell through many layers of poverty in a few months. First we revisited the genteel poverty known to grad students, the sort of poverty where you have scary dreams about the rent and eat a simple, wholesome diet towards the end of the month. But we fell right through that into the sort of Dickensian privation spoiled first-worlders like me never expected to experience. That’s the kind of poverty a lot of people are going to be experiencing soon—because I’m here to tell you, it can happen here and it can happen to you. And it’s remarkably unpleasant. You may be saying “Duh!” here but you’re probably not imagining the proper sort of unpleasantness. So I’ll try to lay out what to watch for, how to hunker down when it’s not just a matter of cutting back or selling your second car but having no car at all, having no money for heat or food.

All the things we learned are going to seem pretty obvious, but remember that it’s very hard to think clearly when your life has collapsed. These are what they call the old verities, the truths of life before the middle class was (briefly) in session:

Warmth. Above all you need to have a dry warm place to sleep. We had only an unheated boat, and that was not enough. We woke up to the thump of sea ice banging against the hull and realized that the old world was still very much in session. When we finally fled to stay with family, we stayed in our blankets up against their gas fireplace for weeks. You won’t even want food much after a while. You’ll want heat itself, not the chemical middle man. You are going to realize that cold is the most frightening thing in the world. In older English dialects, “to starve” meant “to freeze.” You will see why.

Car. Got one? Maybe you should sell it. Cars drain the last dollars out of you. And there’s something worse: cops can smell desperation, and they hate the poor. I didn’t use to hate cops much, except drug cops, but God, I hate them now. The real purpose of cops is to keep poor people off the roads. That’s their only real goal. On my way to an interview for a job that could have gotten us out of the gutter, a cop stopped me because my insurance was two weeks overdue—for the simple reason we didn’t have money to pay it. She gave me a $600 ticket for that, plus $120 for not having an updated address on my driver’s license. Then she called for a tow truck and told me, “So, a lesson learned here today!” as I watched my car towed away and trudged off with our terrified dog down a typical Western suburban road: four lanes of fast traffic with no sidewalks. Are you poor? The cops are your enemy now. Accept it. The car is how they’ll try to get you. Sell it if you can—which is to say, if there’s any decent public transportation—hah!—where you live.

Shame. As in, forget about it. Shame is an affectation. I don’t even need to say this, really. Once you’ve experienced actual cold and hunger, your good old Ouldivai Gorge mammal body and brain will take over, and believe me, shame won’t be a problem.

You’ll also find that most of the social stuff is easier than you’d expect. These people are in show biz in a way; they have to be, just to survive. Makes them lively. And though I suppose it all depends on where you are when you lose out, in my experience they’re not especially violent. They talk about it a lot, but so do all the white jocks I ever met, and in neither case does anything actually happen. They’re flinchy people, mainly, who spend a lot of time waiting for things. When you’re waiting, you get very frustrated but you don’t want to shake things up. So they’re tense, bitter, sociable, gossipy and treacherous—a fine cross-section of the population. After waiting around with them in line at the local food bank, sharing “how I ended up here” stories and hanging out with them around a propane heater trying to stay warm, I relaxed a lot. They’re not going to mug you. They are going to try to get any cash you have, and God did they get a huge chunk of our last resources, but it was friendly, schmooze-based extortion, just like in the middle-class world. All that was missing was the deodorant.

Food Banks. These places, usually in the basement of a church (because churches are the only public institutions in the new suburbs of western North America) hand out baskets of groceries every week or, more often, two weeks. You have to wait a long time, so learn your refugee skills. Come early, get a number first, and be nice-but-pushy. It’s a delicate operation being nice-but-pushy, but you’ll learn it. The “nice” part is because you need to ask people for help and advice; you’re not rich enough to be solitary any more. The pushy part is simple: it’s to prevent you from being ignored. So always talk to people, but never show money or mention it, if you have any.

Antidepressants. Get on them right away, if you’re not already. If you are, up your dose. Because it’s going to hurt. Doesn’t matter how much Marxist theory you’ve absorbed, doesn’t matter that you can put your fall into global context; it’s happening to YOU now, and it’s going to hurt like you wouldn’t believe. You’re an American, and you share that culture’s values whether you like it or not. So you define yourself by your job, car and house. When they go, you’re going to hate yourself. Don’t even bother arguing about it. It’s going to happen. Just take the damn Prozac. Would you refuse a coat in Siberia? Refusing Prozac after falling into poverty makes about as much sense. Tom Cruise can go fuck himself. Prozac saved our lives. I won’t go into the sordid details but really, I don’t think we’d be here now if Saint Prozac hadn’t extended a sacred hand to us.

So the second you slip beneath genteel poverty toward the street, find the nearest Free Clinic, and don’t be deterred by the smell of the crowd in the waiting room. Smell is going to be a problem for you at first but after a few weeks you won’t mind, because you smell too and so does everyone around you. If you want a break from the relentless olfactory fact of being around unwashed large mammals, sidle up to somebody who smokes. That’s the one good thing about cigarettes, and it may be why losers all smoke. Don’t smoke just for that, though. Cigarettes are insanely expensive and turn lots of poor people into cringing beggars.
How do you tell your story? That’s going to matter, because you’ll be brooding about what went wrong 24/7.whether you want to or not. And you’ll find that explaining one’s great fall is a vital skill among the fallen, as well as a deeply satisfying pastime. This raises the issue of denial, a vital and deeply misunderstood mechanism. Denial, like Kurtz said about Terror, is your friend…or it is an enemy to be feared. You need some denial to keep your ego from being crushed completely. Your ego is going to get very sick, now that you’re nobody. It’s easy to be polite and self-deprecating when you’re winning. I used to be like that. You can’t afford that when you’re being crushed. Like the Cable Guy says, it’s prison rules. You have to demand respect if you expect to get it. The alternative is to dwindle away and disappear. Those antidepressants will help you deny the facts, but don’t be shy about doing ego-exercises, boasting practice, to reawaken that playground ego that so many of us polite middleclass types allowed to atrophy. You’re going to need it.

On a practical level, the question is what to jettison. And I’m not just talking about things. If you have kids…well, God help you; I can’t give advice here, because luckily we didn’t. But we did, unfortunately, have a dog, a big clumsy puppy we got just before everything fell apart. We probably should have given her up. Growing up in an atmosphere of terror and cold and self-hatred, she turned out to be a very weird, unhappy dog. I’ve had lots of dogs before this, back when I was comfy, and they were all nice suburban dogs, Frisbee-catching pals. This one’s a feral freak. Now that we have a warm place to live it’s almost fun watching her reactions, the way she flinches and sniffs at every noise, smell or flash of color, but I know she’d have been happier getting adopted by some family that complains about what a pain it is having just four bedrooms.

Besides, if you have a dog you’re cutting down on your chances of getting a job. This one howls when she’s left alone, another legacy of her traumatic puppyhood, so one of us had to stay with her most of the time. It was like being handcuffed to the wretched unheated ex-fishing boat we were living on.

The boat was another contributor to our debacle; it was something else we should have sold off right away, even at a 90% loss. The idea behind that damn boat was that instead of paying the insanely high west-coast rents, we’d live on the boat for free. This is a very bad idea. Any idea you have of retreating to some simple, free habitation should be regarded with deep doubt. The thing is, you can’t get back to the comfortable, heated world from a place like that boat. No internet. You need the net if you’re ever going to claw your way back. You need a working shower, which that boat lacked. Otherwise you develop that look, that smell you first encountered in the Free Clinic waiting room. It’s not a good look, job-wise. Maybe if we’d gotten rid of the dog I’d have had a chance.

But you lose more than that. You change completely, more than you realize, to the point that even if you get a break you can’t grab it. After months of applying for teaching jobs without even getting answers, the perfect job opened up for me at a local college. It was half creative writing, half teaching literature and composition, all my specialties. But when the interview started I realized I was no longer someone who could talk the quiet, polite, oblique version of self-promotion demanded by academic hiring committees. I was too deeply, permanently spooked by our condition. I was just plain wrong, unhireably wrong in every way. No hot water on the boat, and I needed to shave the graying wisps of hair on my big bald head, so I’d shaved in the McDonald’s men’s room on the way to the interview, with a cheap Bic shaver. You can guess the results: it looked like a bobcat had tried to roost on my scalp, and been evicted after a violent struggle. The used sport coat we’d spent our last $20 of Visa credit on at Value Village didn’t seem to fit nearly so well, once I was inside that humming, immaculate classroom where the interview was held. And I had become a louder, more desperate, excessive person. When I tried to sound positive, it came out furious. When they asked me, as I’d known they would, why someone who’d taught at bigger universities wanted to come to this small rural campus, I said truthfully, “I’d rather teach here in the forest than at Stanford.” It didn’t come out enthusiastic, it came out strident. After months of being a bum, I was the wrong volume, the wrong temperature. I could feel the job slipping away, and in fact they hired a local guy who was friends with the director, even though my cv kicked his cv’s ass.

You’ll find that if you want to get back into that quiet, odor-free, polite world, you’re going to have to decompress for a few months. What happened to us is that we fled, found a basement apartment on borrowed money, and stayed there, keeping the heat on high for months. Then we were ready to try again for a job.

It took that long to calm down, quiet down, lose a little of the bitterness. Yes, you’re going to be very bitter. You can’t hate yourself all the time; you have to switch off now and then and blame somebody else. In fact, somebody else may damn well be to blame. Just make sure the bitterness doesn’t keep you awake. To enable yourself to sleep, take long walks. Shout curses at the world if you need to, just keep walking. And no matter what, don’t sell your sleeping bag. I had a North Face down bag, and learned to love it way, way more than I loved myself.

Sleep is an antidepressant almost as good as Prozac. And it’s free. The time to worry is when you wake up after a couple of hours screaming. That happened to me after five months, and that’s when I broke down and asked my brother for a loan. That’s where this story diverges from a real street story: I had an out. And believe me, I took it. Should have taken it sooner, in fact.

If you have an out—a relative or friend who can lend you money to find a place to live—take it now. And as soon as you get an offer—some old friend has a ski cabin nobody’s using, or a small unit behind their house—take it, as long as it’s heated.

The old world is very much alive, and has it in for you. Do anything to keep it from killing you. The only reason I haven’t endorsed crime here is that from what I saw, paupers are not in a good position to try it. Like so much else, crime is for the big people.

This article first appeared in AlterNet.

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