May 10, 2010
On April 20, BP’s Deepwater Horizon oil rig exploded in the Gulf of Mexico. Eleven workers were killed. A 396-foot ultra-sophisticated deepwater drilling rig burned and sank. None of the safety mechanisms worked. A gusher of crude oil erupted and, unchecked, began to pollute tens of thousands of square miles of ocean.
After 15 days, BP managed one partial emergency measure: a hastily constructed box which, even if totally successful, would have trapped only 80% of the gusher. But it seems to have failed.
Stopping the gusher at its source will take at least three months by anyone’s estimate. Maybe much more.
BP says it will pay for damages. This is as believable as any other oil company’s promise! BP did not rack up its billions of dollars of profits per quarter, year after year, by spending money on cleaning up the environment!
Will they willingly provide enough money to compensate for all the livelihoods that will be lost, more or less permanently – the livelihoods of everyone along the Gulf Coast whose jobs depend on the ocean, its resources and the shorelines? As of May 7, a polluted area the size of Massachusetts was already closed to fishing.
Don’t even talk about putting the entire food chain, from plankton to shrimp to sea turtles and tuna, back the way it was.
Will the government require BP and Transocean and Halliburton to use the full resources of their wealth to clean up every last bit of oil and dispersants on the surface, and then to mount a permanent guard until the very last of the vast scum of oil is gone from the sea floor?
No, BP’s pollution will be around a long, long time. The Exxon Valdez dumped 11 million gallons of crude in Prince William Sound, Alaska, in 1989. Still today, 21 years later, the fishing industry there is dead, and oil coats the undersea rocks.
Every major industry in this capitalist system abuses the environment in its rush for profitability. Capitalism pollutes the planet.
The air is polluted – so much so that more than half the U.S. population lives in counties with heavy air pollution and its attendant lung diseases. This is according to the American Lung Association.
Uncontrolled chemical residues are everywhere. The President’s Cancer Panel, citing the fact that 41% of Americans will be diagnosed with cancer at some point, notes that more than 80,000 potentially dangerous chemicals are used in the U.S. but only a few hundred are regulated. Babies in the U.S. are “born pre-polluted” through the mothers’ umbilical cords.
Industry kills 5,000 workers in this country every year, and 60,000 more die from industry- caused disease.
The forces polluting the planet and destroying human life are not mysterious. The limitless greed of the world’s capitalist class pushes these billionaires to relentlessly exploit natural resources, wherever and however they might be extracted, regardless of the consequences. Profits are the capitalists’ only measure.
Protecting the environment cuts into profits – so the capitalists won’t pay. They leave the world’s populations to live in the pollution and bear all the costs, while they race off to the next profit gusher.
There is no way to protect the planet and restore the environment except to sweep the capitalist system itself, with its destructive race for profit, into the landfill.
May 10, 2010
The Illinois State legislature just passed a law cutting pension benefits for newly hired state workers and public school teachers – with a 92 to 24 margin in the House and by 48 to 9 in the Senate, that is, with the support of both Democrats and Republicans. The bill was pushed through both the House and Senate in one day. They didn’t want to give the unions a chance to campaign against the bill, as they did to keep a similar bill from going through last fall.
Under the law, new teachers and state employees will not be able to draw a full pension until age 67 – up from 62 now. And the amount of their pension will be cut. This hits particularly hard, because about half of these workers are not in the Social Security system. The pension will be their only income after they retire.
For years, politicians had ignored their obligation to put in money every year to meet the needs of future retirees. Instead they diverted money that should have gone to pensions for their pet projects and corporate giveaways. In the case of Chicago, it meant diverting money from teachers’ pensions to numerous charter schools led by Mayor Daley’s cronies.
The result is that today the state’s pension funds combined are 54 billion dollars short of the money they need to pay retirees. The state worker pension fund has less than half the money it needs!
Having created a massive shortfall in the funds, the politicians now use that as the excuse to openly cut pensions.
The Commercial Club of Chicago, a club of the big capitalists, has been pushing these state pension reductions for years. Of course! The less state money is spent on pensions, the more money is available for handouts to big business.
May 10, 2010
Last month, UPS workers demonstrated in Chicago after 280 UPS workers were fired for failure to comply with the government’s “E-Verify” requirements.
E-Verify, the government’s computerized system for checking employees for “identity fraud,” is 13 years old. It requires workers to supply documents which the system then matches against Social Security records.
Until recently, employer participation in the system was voluntary, though more than 200,000 companies use it. But last fall, the Obama administration began to require all companies doing business with the federal government to use the system.
The system is notorious for being riddled with errors – immigrants with green cards as well as citizens have been fired, along with documented workers. One woman, who had worked for UPS since 1985, had to show her birth certificate, passport and marriage license daily – all because she married someone with an Hispanic last name.
And what about undocumented workers? Why should they be fired? They do their job, day in and day out, support their families, and are workers like any others. But they are being used by employers and the government as scapegoats for the high unemployment – a high unemployment caused by the bosses’ own economy, which has gone into a deep crisis. In this economic crisis, the government and employers hope to pit workers against workers in all sorts of ways, including the flack over “illegal” immigration. The Obama administration, for example, has declared its intention to increase deportations to 400,000 a year; last year’s deportations already reached 387,000, the highest number in U.S. history, including throughout the Bush years.
E-Verify is just another way to scapegoat some workers, while creating hassles and uncertainty for all workers.
May 10, 2010
The Supreme Court ruled that Francisco Casta eda’s survivors are not entitled to damages from individual government officials, even though the government itself has admitted medical negligence.
Casta eda, an undocumented immigrant, became severely ill when he was in an immigrant detention facility in 2006. Doctors refused to treat his illness, which turned out to be cancer of the penis. Nearly a year later, when Casta eda was released, the cancer had already spread to his groin. He died in February 2008, at age 36.
A federal judge said that Casta eda’s case “should be taught to every law student as conduct for which the moniker ‘cruel’ is inadequate.” He allowed the lawsuit, taken up by Casta eda’s family after his death, to go forward. The U.S. Court of Appeals of the Ninth Circuit agreed.
But the Supreme Court justices disagreed – all nine of them. They said that, instead of suing officials, Casta eda’s family should sue the federal government in State courts. But that kind of lawsuit doesn’t allow a jury trial, and caps damages at only $250,000!
These “supreme” justices agree with the bosses that an immigrant’s life doesn’t count for much, except as a source of cheap labor.
May 10, 2010
The U.S. Securities and Exchange Commission (SEC) is taking Goldman Sachs to court. Attorney General Eric Holder says he might issue some criminal indictments. U.S. senators are having their photos taken chastising Wall Street execs. And the Obama administration promises another financial reform some time soon.
This follows a well-worn pattern. When the market for high risk junk bonds tanked after the stock market crash of 1987, Michael Milken, “the junk bond king,” was found guilty of fraud, sentenced to six years in prison and fined 600 million dollars. His employer, Drexel, Burnham, Lambert, was forced out of business.
During the savings and loan crisis in the late 1980s, after 2,000 banks failed, the government indicted hundreds of people for fraud, money laundering, bribery, etc. A big bank operator, Charles Keating, was sent to prison. Five important senators, who had accepted big contributions (bribes), “The Keating Five,” were sanctioned for ethics violations. New laws and regulations for the banks were enacted.
In 2002, in the wake of the crash of the high tech and stock market bubbles, Enron, WorldCom, Tyco, and Adelphia were brought down. Arthur Andersen, a top accounting firm, was forced out of business. A few executives were sentenced to prison, including Ken Lay, Jeffrey Skilling, Bernie Ebbers, and Dennis Kozlowski. Even Martha Stewart was put in the slammer. A new law, Sarbanes-Oxley, was enacted with the promise that company reports would be more honest.
None of these government actions stopped a damn thing – and much worse crises developed. Those laws enacted and those few executives convicted were nothing but window dressing – a justification for the huge amounts of taxpayer money that the government handed over, crisis after crisis, to big business.
Each time the Federal Reserve opened the flood gates and provided free money... money that helped fuel the next speculative bubble, and even bigger crash.
Today, after the worst crisis yet, the government pretends to bring the banks and Wall Street under control. It pretends to regulate the banks... as it hands over trillions of dollars in taxpayer money to the very same bankers and other capitalists.
No, the government does not regulate business. Big business “regulates” the government. It uses the government to help fuel its profits and wealth, no matter what the cost to the rest of society.
May 10, 2010
On Saturday, May 1, an SUV containing propane, gasoline and perhaps some fertilizer was left in New York’s Times Square at about 6:30 p.m. – a very busy place and time. Smoke was seen, but it didn’t explode.
Two days later FBI agents arrested a suspect, Faisal Shahzad, on an airplane about to take off from New York’s JFK airport.
Shahzad had practically left behind a trail for the FBI to follow. The vehicle ID number on the SUV’s engine, which was not changed, identified the car’s previous owner – to whom Shahzad had given his own e-mail address and cell phone number. And Shahzad had left his keys, including the one to his apartment in Connecticut, in the SUV.
When agents picked him up on the airplane, Shahzad asked: “What took you so long? I was expecting this. Are you FBI or NYPD?” He not only confessed to the bombing attempt right away but, according to the FBI, gave “valuable information” about contacts and bomb-making training in Pakistan.
If Shahzad is a terrorist, he certainly is an amateur. Not to mention talkative.
All this was also true for Umar Farouk Abdulmuttalab, who was caught on an international flight bound for Detroit on Christmas Day with explosives in his underwear.
Abdulmuttalab, a Nigerian, confessed to being trained in Yemen – which was convenient for the U.S. government at a time when the U.S. was bombing Yemen. Shahzad’s failed attack comes at a time when another U.S. bombing campaign, the one in Pakistan, has been in the news because of the high number of civilian casualties it has produced.
Maybe Abdulmuttalab and Shahzad were amateurs acting alone. Maybe they were part of terrorist networks. Or maybe they were lured into a terrorist act by government agents who made sure their bombs were useless. If so, it wouldn’t be the first time the U.S. government has set up people.
We may never know for sure. But there is something we do know: the U.S. wars in Afghanistan and Iraq, and the U.S. bombing of these countries as well as Yemen and Pakistan, have been causing enormous suffering for the populations of these areas – and almost certainly pushing an increasing number of people to react.
May 10, 2010
The Detroit Medical Center recently announced it was selling itself to Vanguard Health Systems. The deal represents the largest takeover in the country of a non-profit hospital system by a for-profit company.
Vanguard receives a complex of nine hospitals in and around the Detroit area, six of them located on the DMC’s main campus in the heart of Detroit.
In an area of just a dozen or so city blocks, DMC owns a children’s hospital, a women’s hospital, a general hospital, the city’s most important trauma care center, an eye institute, and a rehabilitation institute. The overall medical complex also includes the Wayne State University medical school, a veterans’ hospital, and a prominent cancer center. DMC also benefits from other institutions put together with public money.
Vanguard gets a diversified hospital system put together with a huge amount of government money.
DMC was established in 1985 as a non-profit organization, with 25 years of tax exemption from all federal, state, and local taxes. Those tax breaks have been worth about 20 million dollars per year, for a total savings of 500 million for DMC.
In exchange for getting all these hospitals and years of tax breaks, Vanguard is paying ... nothing. It says only that it will invest 850 million dollars in future improvements, and assume 500 million of DMC’s current debt and pension obligations. It’s only a promise – which can be broken. But even if Vanguard does pay, it will not be with its own money. It will be money taken from the income DMC continues to generate.
Vanguard says it is “buying” DMC. The fact is it is paying nothing. It’s being given a huge gift, funded in the past and future by city, county, state and federal tax dollars.
May 10, 2010
The land where the Detroit Medical Center (DMC) now sits was not always vacant. It became vacant through government destruction of the most important black communities then existing in Detroit: Black Bottom and Paradise Valley.
Black Bottom was where most of the black population first settled when they came north for jobs in the auto industry, during the Great Migration from the South in the first half of the twentieth century. The black population then expanded into what became Paradise Valley and then from there into the North End. The Detroit Plan Commission put the black population of Black Bottom alone at 140,000 by 1950.
Black people were concentrated in these three areas, especially due to exclusion from other areas – by realtors and by attacks carried out by white people in areas when someone black tried to move in. Black Bottom and Paradise Valley may have been slums, due to the lack of available housing and the overcrowding that produced. But they also were an intensely solid community of the people who lived there.
By the 1930s, Black Bottom had a vibrant social and political life. The Communist Party was active there, the Nation of Islam’s first mosque was located there, and many black churches were community centers. It was a thriving community. Contrary to the usual image that is given of black neighborhoods, Black Bottom had the highest proportion of home ownership of any area in the city.
Paradise Valley, in part of which the DMC now stands, was just to the north of Black Bottom. It was Detroit’s center for jazz in its heyday, with dozens of jazz clubs showcasing jazz greats from around the country and from Detroit.
Black Bottom and Paradise Valley were the heart of the black community. Their destruction began with so-called “urban renewal” programs that took the land under the guise of “slum clearance” and better housing for the residents. In fact, Detroit broke all its promises to construct or find housing for the poorer people who had lived in the area. The main housing built was for the wealthier middle class, not for the people who had been pushed out. Most of the displaced were forced to find their own housing in other parts of the city. With housing at a premium, it meant they were forced to double up in already densely crowded areas.
The final blow to Black Bottom and Paradise Valley was the state’s decision to use federal funds to tear out Hastings Street to build the I-75 freeway. Hastings Street had been the heart of the black community – its commercial center and its gathering place. In ripping out the center of the community, the city left behind a few blocks of houses divided on either side by a six-lane expressway, spelling the end of Black Bottom. Tens of thousands of people were pushed out rapidly.
Another casualty of this “urban renewal” were the black hospitals that existed there. Those hospitals existed precisely because the hospitals that became the DMC had traditionally refused to accept black patients and black physicians.
The destruction of Black Bottom and Paradise Valley was a tragedy, and one of the major crimes of the politicians of that time.
May 10, 2010
In 1946, the city of Detroit began what became known as the “Detroit Plan.” It was sold as a plan for clearing the city of slums, promising that residents from the area would find places in public housing projects to be constructed.
The real aim, however, was to clear the land – not for public housing, but to hand it over to businesses and private developers.
The Detroit Medical Center (DMC) was one of the eventual beneficiaries of the Detroit Plan. Starting in 1954, administrators of four privately-run hospitals, Grace, Harper, Women’s and Children’s, offered a proposal for a “fully self-contained” medical center complex complete with a medical school and residential housing, businesses and parks. They formed the Detroit Medical Center Citizens Committee and brought in the dean of the Wayne State School of Medicine, which would soon become part of the DMC.
The Detroit Plan Commission readily took up the Medical Center proposal, which covered a square mile area in the vicinity of the four hospitals. By 1971, most of the area that became the DMC had been cleared.
Money for the project came from both the federal government and the city; the city contributed one-third and the federal government two-thirds of the money needed. The city then sold the land to DMC for less than a quarter of what the city had paid to buy the area and clear it. The total given this way to the Detroit Medical Center was 300 million dollars – what would amount to almost 1.5 billion dollars in today’s money.
From 1971 to 1981, DMC moved a number of hospitals to the newly cleared area, either by expanding older hospitals or building new ones from scratch.
In 1981, the city of Detroit transferred ownership of its only public general hospital, Detroit Receiving, to DMC, which moved Receiving from its downtown location into the DMC campus. The city also gave DMC 200 million dollars to put up the new building. The transfer of the public Detroit Receiving Hospital to the private DMC meant that Receiving was no longer required to accept all patients. Yes, DMC promised to provide a certain amount of “indigent care,” but all hospitals do that.
DMC incorporated as a non-profit in 1985, which made it exempt from all federal, state, and local taxes.
In 1995, DMC began operating a cancer program at Harper Hospital. In 2005, it sold the cancer center to the Karmanos Foundation, named after the wealthy owner of Compuware, selling it at one-fourth its market value, the only requirement being that it stay on DMC’s campus.
Despite its promises to provide “indigent” care, DMC eliminated inpatient services at Receiving Hospital in 2003 and laid off 1,000 workers, and threatened to drastically reduce the number of deliveries performed at Hutzel Women’s hospital.
The state of Michigan gave DMC another 50 million dollars and DMC backed off on the threat.
The for-profit Vanguard Health Systems thus receives a DMC that remains consolidated, built with a great deal of public money – more than two billion dollars when you add up the government money spent clearing the land, the money the city gave DMC when it handed over Receiving Hospital, and the tax breaks DMC has received over the years. Hundreds of millions of dollars also went to real estate developers and construction companies to put the deal together, all coming from the people of Detroit, including from the ones whose homes had been stolen from them.
May 10, 2010
Vanguard Health Systems, the company taking over the Detroit Medical Center (DMC), is a privately owned, profit-making company. It already owns 15 hospitals in five states and a number of health plans. Vanguard has been aggressively buying up hospitals since 1998. It has used the money it drained out of those hospitals to pay off the debts it took on to “buy” those hospitals.
Its own annual report from 2009 shows it is 1.75 billion dollars in debt, almost as much as all the hospitals it owns are worth. That debt load is four to five times higher than that of other health systems, according to Angela Bryan, a senior high-yield bond analyst for Gimme Credit.
Vanguard is majority-owned by the private equity firm, the Blackstone Group. Blackstone is one of the largest private equity firms in the U.S., specializing in such deals – which are deals called “leveraged buy-outs” by Wall Street, meaning the buyer puts up little or none of its own money.
Vanguard has been losing money at the hospitals it owns, yet posted a profit overall last year. In other words, it takes the income from the hospitals for its own profit, while it puts the debts onto the hospitals.
It’s a lot like what the auto companies did, putting the profits into the accounts of their financial arms while putting the losses and debt into their production companies.
Vanguard has already been the subject of federal lawsuits by nurses who say it conspired to lower their wages. It spelled out its attitude toward its workers when it cited the presence of unions in its hospitals as a “risk” factor in its latest filing with the SEC.
These “private equity” companies are not buying up productive companies like Chrysler or useful entities like hospitals to make them run more effectively. They are grabbing them to rip them off, then dump them – what’s called “strip and flip” by Wall Street.
One more step in the DMC rip-off of Detroit.
May 10, 2010
A lunchtime rally of State of Michigan workers was spirited and full of laughter despite damp weather.
More than 150 workers from different departments demonstrated – together – in front of the main State of Michigan office building in Detroit on May 7, 2010.
The need for more workers and a chance to say NO! to attacks on pay and benefits were what brought people out on this rainy day.
Michigan lawmakers have proposed taking away three% of workers’ pay – starting in October – allegedly to pay for retirement-related expenses. Lawmakers keep vaguely mentioning a new retiree healthcare fund.
The ink was barely dry on concessions shoved down union members’ throats a few months ago – a loss in pay through “banked leave time” and a new two-tier healthcare system for new hires. Already the state is back for more!
Both parties – the Democrats AND the Republicans – propose to “cut costs” by shoving high seniority workers out the door with flimsy retirement packages.
Management hopes 50% of those eligible will retire. Then, to “save money,” only a fraction of those retiring would be replaced.
In reality, DOUBLE the number of workers retiring needs to be hired!
“They keep attacking us because we keep taking it. That’s why I’m here,” said one state employee.
Chants at the rally reverberated out into the street. Passing motorists honked in support. Popular chants were: “DHS – IT’S A HOT MESS!” “We are the front line, not the bottom line!” and “Hands off My Pockets!”
For some younger workers, it was their first protest and they are looking forward to the next one.
One state worker summed it up: “You can’t just go by the number of people here today. Everyone at my office feels the same way as the people speaking out at this demonstration.”
May 10, 2010
Hardly had the plan to supposedly save Greece been put in place, when the “financial markets” seemed to throw themselves onto their next prey, Spain.
In fact, instead of speaking of “financial markets,” it’s better to call them by their real name: speculators. And these speculators are the main international banks, which control considerable capital they move from one stock exchange to another, from one financial product to another, always with the aim of grabbing the biggest immediate gains with these moves.
It only took a rumor, launched by someone unknown, for the European stock markets to plunge lower in a dangerous fashion – and for the U.S. markets to do the same, just two days later.
After Greece, the speculators are in search of new targets. They talked about Portugal, but finally, on May 4th, Spain was the country in their sights. In a system whose driving force is the lure of gain, the big banks and other holders of capital are perpetually on the prowl.
These predators aren’t necessary for the economy to function. They lead the entire society and with it all working people toward catastrophe. Expropriating these speculators to put the banks in the service of the whole community is a necessary emergency measure.
May 10, 2010
The economic crisis is hitting Greece especially hard. A few years ago the biggest Wall Street banks convinced the Greek government to buy exotic financial products, which allowed it to hide the amount of debt they took on. At first the government seemed to come out ahead, but when the worldwide economic crisis hit, most of these exotic financial instruments not only proved worthless, they ended up costing the Greek government many times more than what Greece had borrowed, thanks to tricky bankers’ language. Not much different from the famous sub-prime mortgage scam run in this country – except this time, run on whole countries.
When Goldman Sachs, the architect of these deals, spread false rumors about Greece, other speculators drove up the interest rate on Greek government bonds. Future Greek borrowing from the “markets” will be at loan-shark rates.
In the face of this outrage, squeezed by the International Monetary Fund (IMF) and bankers threatening to push Greece into bankruptcy, Greek Prime Minister George Papandreou told “his fellow citizens” the choice was “great sacrifices or catastrophe.” He announced a three-year plan of new austerity measures. This will mean a real catastrophe for the entire population, in particular active workers and retirees.
Taxes and prices are going up again. The national sales tax goes up to 23% on many goods, and up to 11% on others. There will be a 10% increase in the price of gasoline, tobacco and drinks. There will be taxes on luxury goods, but also on real estate and on “illegal construction,” which hits the developers a lot less than the many small property owners, who knowingly or unknowingly “illegally” construct a modest house and then have to pay to regularize their situation.
Some government workers will suffer a 14% pay cut, while the lowest paid will suffer a smaller one. Those receiving Social Security retirement payments will have their benefits cut. Wages and pensions are frozen for three years. A Greek newspaper To Vima (The Tribune) estimates that every year a million public employees will lose from $2,100 to $4,000 each. The government will replace only one out of every five public workers who leave the job.
Workers will have to retire at an older age. By 2015 they will need 40 years of service rather than 37. Future pensions will be limited. Women in the public sector who now can get a full pension at age 60 will next year have to wait until age 65, like men. The government is grouping together numerous public pension plans into three, reducing the pensions for workers who labored in difficult and unhealthy occupations.
The Minister of Finance announced that there will be more layoffs and that severance pay will be reduced.
This plan set off a wave of protests and demonstrations, even on the part of small shopkeepers and artisans. But the richest are reassured: the Minister of Finance renewed his support to the banks.
May 10, 2010
Bankruptcy is very good news for certain kinds of lawyers and professionals. Since Lehman Brothers went bankrupt last year, one legal firm has racked up 730 million dollars in fees. And the case isn’t finished.
The current record for court-awarded fees and expenses belongs to all those lawyers and accountants and specialists who took apart Enron Corporation, earning 757 million dollars to do it. Enron employees, of course, lost their jobs and pensions.
General Motors’ bankruptcy has cost 90 million dollars so far since bankruptcy was declared on June 1, 2009. One firm, AP Services, has billed GM more than 36 million dollars in four months. The GM bankruptcy even has a consultant, hired at $495 per hour, to overlook all the other lawyers and consultants.
Just another one of those bills taxpayers are paying!