Do the Chicago School Fundamentalists Own the Mess?or they come in handy for the plutocrats

Barbara Reader

New York

The truth is that the guts started being ripped out of the financial regulatory system so long ago, (late 1970s) that few people still on Wall Street remember when this system operated. I was at the Federal Reserve Bank of New York when Chicago School of Economics PhDs declared war on any regulation that restricted banks in any way. It didn't matter how carefully the method of enforcement had been proven, or how weak the evidence was it was wrong, they fought the regulation. In one case, we ran over 150 regressions, all but two supported the proposition that smaller banks were more efficient and served their customers better than larger banks. Those two included one that was flat, and one that favored larger banks. Both dealt with very large corporate customers.

The right-wing economists, following what has since become the mantra of the right, 'facts are stupid things' wrote up their paper on those two regressions, throwing out more than 150. They pushed through interstate banking, they pushed through rules which made it almost impossible to block proposed bank mergers, and they did it despite the history and statistic which showed them doing harm to the United States. I'm sure they got great jobs at big banks when they left the Federal Reserve.

Similarly, people who invested with Madoff thought themselves smart and cool and in the know. I was threatened with lawsuits by some of them for not matching his results on some funds.

President Obama has shown absolutely no guts in trying to clean out corruption of any system. The Republicans want to just end the system. The US experienced crash after crash from it's founding until the 1930s, when tight regulations were put in place. With regulations in place, from 1930 until 1986, for 56 years, the market has no serious financially lead crashes. This system was taken apart, and in 1987 we had the first crash in over half a century. Instead of learning our lessons, Washington deregulated Wall Street even more, and we had a more damaging crash in 2008. Until we put regulations back on the banking system, we can expect another, as the fat cats move our jobs overseas and destroy the nation.
It's sad and it's scary.

Llord Aig

New York

Since Buffett first referred to derivatives as "financial weapons of mass destruction" in reference to derivatives, the potential derivatives bubble has grown from an estimated $100 trillion to $576 trillion dollars in 2009, according to the most recent survey by the Bank of International Settlements.
Financial Trickery Easy To Do
Buffett references the dangers of derivative reporting on and off the balance sheet. Mark-to-market accounting is a legal form of accounting for a venture involved in buying and selling securities in accordance with U.S. Internal Revenue Code Section 475.Under mark-to-market accounting, an asset's entire present and future discounted streams of net cash flows are considered a credit on the balance sheet. This accounting method was one of the many things that contributed to the Enron scandal.

Many people attribute the Enron scandal entirely to cooking the books or accounting fraud. In fact, marking to the market or "marking to the myth", as Buffett so aptly christened it, also plays an important role in the Enron story. Mark-to-market accounting is not illegal, but it can be dangerous. (To gain an understanding of this particular weapon, put aside a few hours to watch "The Smartest Guys In The Room", a movie about the Enron scandal.)

Buffett suggests that many types of derivatives can generate reported earnings that are frequently outrageously overstated. This occurs because their future values are based on estimates; this is problematic because it is human nature to be optimistic about future events. In addition, error may also lie in the fact that someone's compensation might be based on those rosy projections, which brings issues of motives and greed into play.

Karen Garcia

New Paltz, NY

Bernie Madoff went to jail because he stole from a lot of other rich people who joined what they thought was an exclusive club. Too many important people lost money with Madoff for prosecutors to ignore him. Had he been a big bank, had his victims been struggling homeowners facing balloon payments on fraudulent mortgages, he’d probably still be living it up in Palm Beach.

Meanwhile, there has been no real financial reform because it is not in the best interests of Wall Street to be regulated. The only shining star in the government at the moment, the only official interested in working for people instead of corporations. is Elizabeth Warren. Her new Consumer Financial Protection Bureau just started its own website, where citizens can register complaints and comments.

And what about our president? He just reached out to the U.S. Chamber of Commerce and pretended to wheedle them into developing some patriotism and actually using some of their record profits to hire people. That will not happen, and Obama knows it. This is a man who is still trying to establish some Republican street cred by slashing funding to the home heating assistance program, right smack dab in the middle in one of the worst winters in history. The temperature reached minus-31 in Nowata,Oklahoma Friday night, but I bet the Chamber "folks" are staying plenty warm. Nice timing, Mr. President.

We have long been disabused of the notion that we were getting another FDR. The Roosevelt Justice Department actually prosecuted one former treasury secretary. Bankster and Great Depression architect Andrew W. Mellon was charged with tax fraud, but never went to jail. He settled with the government by relinquishing his massive, priceless, ill-gotten art collection. That collection turned into the National Gallery of Washington, D.C. All we have seen from Obama is a Gallery of Appeasement and Capitulation to the oligarchy which now owns and operates the United States of America in all but name.

FDR told the wealthy corporations he welcomed their hatred, and was elected four times. Obama has told them he craves their approval. Unless he miraculously changes course and starts putting people first, his fate as a one-term wonder is all be sealed. The tragedy is that any Republican alternative will be even worse.

http://kmgarcia2000.blogspot.com/

Marie Burns

Fort Myers, Florida

There's a good reason Bernie Madoff is the only financier doing time. Sen. Dick Durbin explained it back in April 2009 when he tried unsuccessfully, at the height of the financial crisis, to get mild bankruptcy reform through the Senate: "And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."

It is hardly surprising that the Congress is underfunding the S.E.C. -- they don't want the S.E.C. catching any big-time crooks. Those crooks are Congress's bread and butter.

But the Congress needn’t have worried. Just as in the days when "No One Would Listen" to Harry Markopolos, the S.E.C. is still pretty much sitting on its hands. Every once in a while, they nab some small-time (by Wall Street standards) crook in a $2,000 suit, but they keep their hands off the big boys. After all, the S.E.C. – in fact, ALL the so-called "regulatory agencies" – are beholden to the crooks, too. Most of the high-ranking regulators come from Wall Street, and after they do their "public service" stint, they'll be right back on the Street, raking in the big bucks. Just yesterday, Eric Dash of the Times reported that "Joseph Jiampietro, one of the government's top deal makers during the financial crisis, has joined Goldman Sachs as a senior investment banker covering the financial services industry...." Dash describes Jiampietro as the FDIC's "main liason to hedge funds and broader Wall Street community," and he adds, "Mr. Jiampietro is the latest in a parade of top federal official to leave Washington for Wall Street." Prior to "his stint in Washington," Jiampietro was an investment banker. Do you really think Mr. Jiampietro's "stint in Washington" had anything to do with public service?

The chair of the S.E.C. – Mary Schapiro – has a long history as a regulator, beginning way back in the days when Ronald Reagan appointed her to sit on the S.E.C. You might think that would make her a tough cookie. Not really. Like the rest of her regulator colleagues, she's in it for the dough. Back in 2008, her last year as head of the Financial Industry Regulatory Authority, Wall Street's (ha ha ha) self-policing arm, Schapiro hauled in compensation of $3.3 million. According to Wikipedia, "on departure from FINRA, she received additional lump sum retirement benefit payments that brought her total package in 2008 to $8,985,334 (about the same as Goldman Sachs CEO Lloyd Blankfein made in that year."

You might suppose that kind of payout would alarm the Senate, which had to “advise & consent” to Schapiro's appointment to head the S.E.C. After all, the Senate regularly puts on hold for months or even years confirmation votes for minor appointments. But, no, in the wake of her big payoff and again during the height of the financial crisis, the Senate cleared Schapiro with a voice vote. The Senate in its wisdom Dr. Schapiro would follow that part of the Hippocratic Oath that reads "first, do not harm." Just think of the great job Schapiro will get with all those marketable "on-the-job" training she's acquired at the S.E.C.

Which, to follow Frank's structure, brings us back to Bernie Madoff. It is hardly surprising that Irving Picard is the prime mover in connecting the dots between Madoff and his enablers at JPMorgan Chase. Despite Mr. Markopolos' many pleas to the S.E.C. and the extensive documentation he sent them, it wasn't the S.E.C. that brought down Madoff. It was Madoff's own sons who told the F.B.I. that their father was running a Ponzi scheme. Where was the S.E.C.? They had previously "investigated" Bernie Madoff. They didn't find a thing. They wouldn’t, would they?

The Constant Weader at www.RealityChex.com

 

Gemli

Boston

I don’t think any Picard or Pecora or anyone else is going to change the system. The system has been so corrupted and co-opted by people with enormous wealth and power that it is likely beyond changing. Individuals may try to rise up, or blow whistles, or point fingers, but those impotent actions will get them where they got Markopolos, which is nowhere. How is it possible that billions were extracted from the taxpayers’ pockets to cover the sins of the big financial players, and no one can be held accountable? Why are we stumbling around with empty pockets, wondering where to find justice?

When half the Congress of the United States is tied to big money and are little more than shills for the filthy rich, the idea that justice will prevail is quaint. The Supreme Court’s ruling in favor of Citizens United tells you all you need to know about justice.

It’s said that behind every great fortune is a great crime. This time, the crime is that the criminals are influencing how laws are made. Madoff was foolish to run an illegal Ponzi scheme. He should have used his huge financial resources to buy a few congressmen, or run for office himself. Once in power, he could have worked with his like-minded brethren and simply made Ponzi schemes legal. That’s the American way.

Where is the American activism?Perspectives

Bob Herbert, the distinguished NYTimes editorialist, looks at the crowds in Cairo and asks where is the American equivalent (When Democracy Weakens: While Egyptians celebrate, we should look at the American democracy...)

RT Koenig

Memphis TN

Maybe it's time the American people took a lesson from the people of Egypt and take to the streets. Maybe it's time that the poor and middle class working people of America staged their own Day of Rage. Maybe it's time for a million unemployed workers or the millions who have lost their homes to a recession sparked by corporate greed to march on Wall Street.
Just this week we learn that JPMorgan Chase, one of the banks responsible for the recession and the recipient of millions in bailout money, defrauded thousands of American servicemen and their families. In some cases, the second largest bank in the US illegally foreclosed on U.S. servicemen and their families. If this latest outrage doesn't spark protests, then perhaps we are no longer capable of outrage.
A Day of Rage cannot overlook Washington, where as Herbert has noted so eloquently, neither party is representing the interests of the poor, the unemployed and the underemployed. Americans fortunate enough to still have jobs need to stand together in protest lest they be next.
It's time to get off the couch and take to the streets. As the people of Egypt have shown us, even the powerful cannot afford to ignore millions united for change, freedom and fairness.

Mel Presley

Roskilde, Denmark

There are only two factions that stand in the way of a second American revolution, a true political revolt to end rule by the corporate dollar and restore democracy.

One is partisan cheerleaders for the Republican political cause.

The other is partisan cheerleaders for the Democrat political cause.

The Times' readership seems to divide itself about 10 percent to 90 percent, respectively, in favor of these two opposing camps. There's virtually nobody at all with enough common sense to see that we'll never find our way out of the woods, and away from plutocracy, until we all reject BOTH.

Street protests won't work in America as they have in Cairo, because we face a far more entrenched enemy than the Egyptians. But there's one thing that would. We need to form a temporary, single party of national unity with the sole purpose of having it write a Constitutional amendment to mandate modern, multiparty voting and an end to private funding of campaigns. If we all elect its candidates, and boycott all those of our fraudulent two-party system, we'll have the mother and father of confrontations on our hands, and if the sitting powers attempt to annul the election results, we might even start a civil war. But I can't see any other way to restore rule by the people - which is what democracy is supposed to be in the first place.

Greg Shimkaveg

Oviedo, Florida

Mr. Herbert, I don't disagree with you. But consider this: where were the disadvantaged and disenfranchised last November? I am a local Democratic Party offficer down here in Florida. I worked for and financially supported a lot of candidates, hundreds of hours and over a thousand dollars. On November 2nd, 2010 I worked the polls. Who showed up? Angry white guys in pickup trucks. Literally scowling as they drove in. Who didn't show up, despite being phoned and visited and mailed? Young people, union people, women, ethnic and racial minorities. I stood in front of a polling place in a middle-class and let's say unpretentious part of the county. The registration breakdown was evenly split between Democrats and Republicans. There were lots of diverse people on the rolls. And who bothered to make a difference? Mostly white, mostly male, and overwhelmingly Republican voters.

So we reap what we sew. A decennial election, as you know, controls who decides redistricting. Our Legislature is now filibuster-proof Republican and we have a 2-to-1 Republican Congressional delegation, in a state with a 300,000 Democratic registration plurality. Despite two Constitutional Amendments that did pass requiring fair districts, the Legislature is busy Gerrymandering to keep themselves and their party in solid control until at least 2020.

So, thanks to all those who sat on their hands in November. And as you point out, Mr. Herbert, they'll be the ones most likely to suffer all the more. But they are not just blameless victims. 

joseph parmetler

austria

The USA is not a democracy any more. Or is there anyone int he US government who represents the 40 million poor in the country? Is there anyone who represents the unemployed?
Is there anyone who represents the fading middle classes who are fighting for their economic survival?
Look at the cabinet of the president? They all represent big money.
Look at the Republicans in Congress: the poor, the unemployed do not even exist for them; if they keep on as they do now, Republicans will advance Egyptian conditions in the USA.
This is a corporatocracy or plutocracy.

LAS

Redmond, WA

The executive class holds American workers hostage by threatening to move jobs out of state or out of the country if their demands aren't met. Politicians, in fear of more job losses, then try to weaken the labor unions and accommodate the corporations' desires. Local TV stations are quick to publicize mass layoffs or plant shutdowns and blame them on public officials and labor unions.

States governments are set in competition with each other for the lowest tax rates. In Washington State the unemployment insurance tax rate was tied to the unemployment tax rate. With the increase in unemployment, the tax rate went up and a 36% increase was mandated, 36% above the current rate of slightly more than 1%. Business interests fought this and we all heard that 36% figure, even though the public did not hear that it was 36% of 1%. The unemployment tax fund was solvent, so the legislature canceled the tax increase. However, no one, not even the labor unions, even mentioned using the state's surplus to create a Tier V extension for the 99ers. As a result, the unemployment tax was reduced while there were 38,000 99ers in January, with 4000 more people per month reaching the end of their unemployment compensation with no job opportunities. The prevention of the tax increase was given away without any conditions requiring the hiring of the unemployed. Whatever slight power the state held, it threw away. This tax reduction was tacked onto the bill authorizing the continuation of the federal unemployment benefits extensions just as, in the other Washington, tax cut extensions were attached to the continuation of the federal unemployment extensions.

The corporations holler "Jump!" and public officials ask, "How high?" but it appears to be a lose-lose proposition for workers affected by mass layoffs.

SC

Indiana, PA

Even though it's hard to recall now, Americans did recently show the world that democracy works in this country--with the amazing 2008 grassroots campaign to elect Barack Obama. During the campaign, massive numbers of new voters came to the polls, and the country witnessed a groundswell of democratic participation.

BUT President Obama has betrayed that democratic movement. He has betrayed all of us who supported him in an effort to take this country back from the corporate, financial and military elite. It's sickening and grotesque to watch as Obama continually caves into their demands--the latest being his administration's proposal to drastically cut (by half) home heating assistance to the poor. Instead of pushing back, Obama has revealed himself to be a push-over. Obama has given up so much ground to the right-wing fanatics, that it will take another massive democratic movement to regain that ground. Let's hope the Egyptian people find better leadership, one who truly advocates for democratic and economic transformation that benefits ALL people, not just the wealthy and powerful. The Egyptians are leading the way now.

lure1

O'ahu

Oh cry me a river. I was on line the other day at the supermarket. A woman was using food stamps while yapping on her iPhone.

46% of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three bedroom house with one and a half baths, a garage, and a porch or patio
.
76% of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.

Only 6% of poor households are overcrowded. More than two thirds have more than two rooms per person.
The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

Nearly three quarters of poor households own a car; 30 percent own two or more cars.

97% of poor households have a color television; over half own two or more color televisions.

78% have a DVD player; 62% have cable or satellite TV reception.

73% own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

As a group, America's poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher income children and have average protein intakes 100 percent above recommended levels. Most poor children today are, in fact, supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II.

While the poor are generally wellnourished, some poor families do experience hunger, meaning a temporary discomfort due to food shortages. According to the U.S. Department of Agriculture (USDA), 13% of poor families and 2.6% of poor children experience hunger at some point during the year. In most cases, their hunger is shortterm. 89% of the poor report their families have "enough" food to eat, while only 2 percent say they "often" do not have enough to eat.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, DVD player, and a stereo.

His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, liberal activists, and politicians.

Of course, the living conditions of the average poor American should not be taken as representing all the poor. There is actually a wide range in living conditions among the poor. For example, over a quarter of poor households have cell phones and telephone answering machines, but, at the other extreme, approximately one tenth have no phone at all. While the majority of poor households do not experience significant material problems, roughly a third do experience at least one problem such as overcrowding, temporary hunger, or difficulty getting medical care.

The best news is that remaining poverty can readily be reduced further, particularly among children. There are two main reasons that American children are poor: Their parents don't work much, and fathers are absent from the home.

In good economic times or bad, the typical poor family with children is supported by only 800 hours of work during a year: That amounts to 16 hours of work per week. If work in each family were raised to 2,000 hours per year the equivalent of one adult working 40 hours per week throughout the year nearly 75% of poor children would be lifted out of official poverty.

Father absence is another major cause of child poverty. Nearly two thirds of poor children reside in single parent homes; each year, an additional 1.3 million children are born out of wedlock. If poor mothers married the fathers of their children, almost three quarters would immediately be lifted out of poverty.

What bothers Herbert and his fellow travelers is that America doesn't satisfy his infantile delusions of a what perfect society should be. I hate to break it to you Mr. Herbert but in every society there have always been poor people. And there always will be. There have also always have been rich people who enjoy privileges. That's not gonna change either. But by all means, keep banging you spoon on the table of your high chair crying "poverty, tax cuts for the rich etc". It's futile but hilarious. Hope and change!

dc lambert

nj

As jobs are continually shipped overseas and we work ourselves to the bone, too scared that we will be next, too exhausted to think about it, the only thing that holds our entire economy together is fear: Fear that our credit scores will plummet and we won't be able to borrow money to survive. Fear that we will be next, that there but for the grace of God and bankers go I. What happens when the worst happens and our fear is realized, and our credit rating IS destroyed and we cannot borrow money anymore?

My good friend is in this situation and finds it liberating. She will be losing her house and has filed for bankruptcy. She cannot borrow money but, as she says, her 'credit score was already shot.' Suddenly she's 'rich.' She isn't paying for her mortgage as she forecloses. She is an educated lawyer but went under when her credit card companies jacked up the interest rates to over 30% when they thought she was late one month. (She had actually paid a month in advance since she was going away for a month, but they'd misapplied her payments and it took too long to straighten out.) Soon her interest rates were unsustainable and she slipped behind. She stopped paying, they refused to work something out, they harassed her and tried to get her to be afraid instead --but eventually, after years, she just stopped paying, and filed for bankruptcy.

People talk of a 'revolution' against the plutocracy, and imply pitchforks and torches. What if our revolution instead is to upend our entire economic system, which is based on usurious loans the banks strongarm us into having to take? I myself have always considered myself frugal but I simply could not function without borrowing. My children could not go to college, I could not drive myself to work or own a home or maintain it, or even a washer/dryer without borrowing.

Banks use our credit scores as giant sticks, but what if people stopped caring about the sticks? What if everyone altogether went into foreclosure? Or didn't care about their credit card scores--just as it is meaningless for the committee to declare everyone culpable in the banking disaster, so it's meaningless if everyone has a rotten credit score.

I don't think people would do this on purpose, because the risks are too great for most. But as jobs continue to be shipped overseas, and our Republican legislature continues to propose slashes to education, basic services, infrastructure, and so on, it seems that it would only take a very little for a tipping point ot be reached, and for the bulk of people to slip and fall into the quicksand of 'bad credit' and foreclosure.

Once that happens, our entire economy, based on borrowing - 'getting and spending' - will be pulled into the wake as more and more houses foreclose and more and more people go bankrupt and can't borrow. Since the chances of this happening are very high, and since the Republicans want to nudge it into being even more likely, one has to ask: Who is pulling the strings here? In whose interest is it that the American economy go under? My motto is to always follow the money. Here we see not only naked plutocracy, not only a plutocracy that cares nothing at all for the economy on which its based, but a plutocracy that, by its OWN decisions (joined with right wing politicians) is actively working to destroy the American economy on all levels, infrastructure, jobs, and debt. Why? This is the larger question.

not understood by a fearful and proudly ignorant population

Wallflowers at the Revolution
By FRANK RICH

A month ago most Americans could not have picked Hosni Mubarak out of a police lineup. American foreign policy, even in Afghanistan, was all but invisible throughout the 2010 election season. Foreign aid is the only federal budget line that a clear-cut majority of Americans says should be cut. And so now — as the world’s most unstable neighborhood explodes before our eyes — does anyone seriously believe that most Americans are up to speed? Our government may be scrambling, but that’s nothing compared to its constituents. After a near-decade of fighting wars in the Arab world, we can still barely distinguish Sunni from Shia.

The live feed from Egypt is riveting. We can’t get enough of revolution video — even if, some nights, Middle West blizzards take precedence over Middle East battles on the networks’ evening news. But more often than not we have little or no context for what we’re watching. That’s the legacy of years of self-censored, superficial, provincial and at times Islamophobic coverage of the Arab world in a large swath of American news media. Even now we’re more likely to hear speculation about how many cents per gallon the day’s events might cost at the pump than to get an intimate look at the demonstrators’ lives.

Perhaps the most revealing window into America’s media-fed isolation from this crisis — small an example as it may seem — is the default assumption that the Egyptian uprising, like every other paroxysm in the region since the Green Revolution in Iran 18 months ago, must be powered by the twin American-born phenomena of Twitter and Facebook. Television news — at once threatened by the power of the Internet and fearful of appearing unhip — can’t get enough of this cliché.

Three days after riot police first used tear gas and water hoses to chase away crowds in Tahrir Square, CNN’s new prime-time headliner, Piers Morgan, declared that “the use of social media” was “the most fascinating aspect of this whole revolution.” On MSNBC that same night, Lawrence O’Donnell interviewed a teacher who had spent a year at the American school in Cairo. “They are all on Facebook,” she said of her former fifth-grade students. The fact that a sampling of fifth graders in the American school might be unrepresentative of, and wholly irrelevant to, the events unfolding in the streets of Cairo never entered the equation.

The social networking hype eventually had to subside for a simple reason: The Egyptian government pulled the plug on its four main Internet providers and yet the revolution only got stronger. “Let’s get a reality check here,” said Jim Clancy, a CNN International anchor, who broke through the bloviation on Jan. 29 by noting that the biggest demonstrations to date occurred on a day when the Internet was down. “There wasn’t any Twitter. There wasn’t any Facebook,” he said. No less exasperated was another knowledgeable on-the-scene journalist, Richard Engel, who set the record straight on MSNBC in a satellite hook-up with Rachel Maddow. “This didn’t have anything to do with Twitter and Facebook,” he said. “This had to do with people’s dignity, people’s pride. People are not able to feed their families.”

No one would deny that social media do play a role in organizing, publicizing and empowering participants in political movements in the Middle East and elsewhere. But as Malcolm Gladwell wrote on The New Yorker’s Web site last week, “surely the least interesting fact” about the Egyptian protesters is that some of them “may (or may not) have at one point or another employed some of the tools of the new media to communicate with one another.” What’s important is “why they were driven to do it in the first place” — starting with the issues of human dignity and crushing poverty that Engel was trying to shove back to center stage.

Among cyber-intellectuals in America, a fascinating debate has broken out about whether social media can do as much harm as good in totalitarian states like Egypt. In his fiercely argued new book, “The Net Delusion,” Evgeny Morozov, a young scholar who was born in Belarus, challenges the conventional wisdom of what he calls “cyber-utopianism.” Among other mischievous facts, he reports that there were only 19,235 registered Twitter accounts in Iran (0.027 percent of the population) on the eve of what many American pundits rebranded its “Twitter Revolution.” More damning, Morozov also demonstrates how the digital tools so useful to citizens in a free society can be co-opted by tech-savvy dictators, police states and garden-variety autocrats to spread propaganda and to track (and arrest) conveniently networked dissidents, from Iran to Venezuela. Hugo Chávez first vilified Twitter as a “conspiracy,” but now has 1.2 million followers imbibing his self-sanctifying Tweets.

This provocative debate isn’t even being acknowledged in most American coverage of the Internet’s role in the current uprisings. The talking-head invocations of Twitter and Facebook instead take the form of implicit, simplistic Western chauvinism. How fabulous that two great American digital innovations can rescue the downtrodden, unwashed masses. That is indeed impressive if no one points out that, even in the case of the young and relatively wired populace of Egypt, only some 20 percent of those masses have Internet access.

That we often don’t know as much about the people in these countries as we do about their Tweets is a testament to the cutbacks in foreign coverage at many news organizations — and perhaps also to our own desire to escape a war zone that has for so long sapped American energy, resources and patience. We see the Middle East on television only when it flares up and then generally in medium or long shot. But there actually is an English-language cable channel — Al Jazeera English — that blankets the region with bureaus and that could have been illuminating Arab life and politics for American audiences since 2006, when it was established as an editorially separate sister channel to its Qatar-based namesake.

Al Jazeera English, run by a 35-year veteran of the Canadian Broadcasting Company, is routinely available in Israel and Canada. It provided coverage of the 2009 Gaza war and this year’s Tunisian revolt when no other television networks would or could. Yet in America, it can be found only in Washington, D.C., and on small cable systems in Ohio and Vermont. None of the biggest American cable and satellite companies — Comcast, DirecTV and Time Warner — offer it.

The noxious domestic political atmosphere fostering this near-blackout is obvious to all. It was made vivid last week when Bill O’Reilly of Fox News went on a tear about how Al Jazeera English is “anti-American.” This is the same “We report, you decide” Fox News that last week broke away from Cairo just as the confrontations turned violent so that viewers could watch Rupert Murdoch promote his new tablet news product at a publicity event at the Guggenheim Museum in New York.

Unable to watch Al Jazeera English, and ravenous for comprehensive and sophisticated 24/7 television coverage of the Middle East otherwise unavailable on television, millions of Americans last week tracked down the network’s Internet stream on their computers. Such was the work-around required by the censorship practiced by America’s corporate gatekeepers. You’d almost think these news-starved Americans were Iron Curtain citizens clandestinely trying to pull in the jammed Voice of America signal in the 1950s — or Egyptians desperately seeking Al Jazeera after Mubarak disrupted its signal last week.

The consequence of a decade’s worth of indiscriminate demonization of Arabs in America — and of the low quotient of comprehensive adult news coverage that might have helped counter it — is the steady rise in Islamophobia. The “Ground Zero” mosque melee has given way to battles over mosques as far removed from Lower Manhattan as California. Soon to come is a national witch hunt — Congressional hearings called by Representative Peter King of New York — into the “radicalization of the American Muslim community.” Given the disconnect between America and the Arab world, it’s no wonder that Americans are invested in the fights for freedom in Egypt and its neighboring dictatorships only up to a point. We’ve been inculcated to assume that whoever comes out on top is ipso facto a jihadist.

This week brings the release of Donald Rumsfeld’s memoir. The eighth anniversary of the invasion of Iraq is to follow. As we took in last week’s fiery video from Cairo — mesmerizing and yet populated by mostly anonymous extras we don’t understand and don’t know — it was hard not to flash back to those glory days of “Shock and Awe.” Those bombardments too were spectacular to watch from a safe distance — no Iraqi faces, voices or bodies cluttered up the shots. We lulled ourselves into believing that democracy and other good things were soon to come. It took months, even years, for us to learn the hard way that in truth we really had no idea what was going on.

Marie Burns

Fort Myers, Florida

In another New Yorker article, Malcolm Gladwell makes a strong case that social media do not a revolution make. He cites as a prime example the 1960 Greensboro lunch counter demonstration that grew exponentially within days, even though the only "social medium" in those days was the telephone. Gladwell explains that "high risk social activism" like the Greensboro sit-in (and the Egyptian uprising) "requires deep roots and strong ties." Reading a stranger's tweet that such-and-such is an atrocity -- even if it is -- doesn't make you want to risk your life for somebody else's problem. People show up at these high-risk events because the issues have deep meaning to them AND they have friends who share their beliefs and are participating in the demonstrations.

One of the minor upsides to the Egyptian uprising has to be all the Americans who suddenly discovered Al Jazeera was a news organization that knocked itself out to get the news on the air, even in English, despite the best efforts of our friend and dictator Hosni Mubarak. As Liz Sly wrote in the Washington Post, since the uprising began, Al Jazeera's "phone lines have been cut, nine of its staffers have been detained at various times, its satellite signal has been repeatedly blocked and on Friday, al-Jazeera said..., a 'gang of thugs' stormed its bureau, smashing equipment and setting it ablaze."

Sly added, "... in what represents perhaps an ultimate act of defiance to the effort to shut the network down, demonstrators in the square have rigged up a giant screen so that even those protesting can follow al-Jazeera's supposedly banned coverage."

I have no doubt the international media, including Al Jazeera, are responsible for saving many Egyptian lives. Mubarak's Plan B, demonstrated most forcefully on Wednesday & Thursday, was to take out the media so the government could proceed with more brutal measures against its own people. The media's success, which required incredible bravery on the parts of reporters, photojournalists & crews, exposed Mubarak & Co., and caused them to back off in the face of international condemnation. If ordinary Egyptian people are the heroes of Tahrir Square, the media are a darned close second.

So thank you again to Nicholas Kristof, Nicholas Kulish, Souad Mekhennet, and all the other Times reporters & other media personnel who risked their own lives to report the news and, in so doing, saved Egyptian lives.

The Constant Weader at www.RealityChex.com

Karen Garcia

New Paltz, NY

It is indeed laughable that our clueless mass media attributed the Egyptian uprising to Twitter and Facebook, when 40 percent of that country's people live on $2 a day and must spend 40 percent of their incomes on food. I can just envision the poor hungry hordes clutching their Blackberries and i-Phones as they plan their next insurrectional step.

Al-Jazeera may not be carried by the corporate American media, but that hasn't stopped millions of Americans tuning in via their laptops and PCs. As a matter of fact, most Americans get their news from the Internet these days, where a whole new world of unbiased, uncompromised-by-the-government sources of information are available. There is Truth-Out, Pro-Publica, Alternet, as well as countless other blogs and links throughout global cyberspace. We don't have to watch millionaire TV anchor Brian Williams hover helplessly in the background, as Richard Engel and Rachel Maddow tell it like it is. From the establishment side of things, Nicholas Kristof's daily New York Times dispatches have put a human face on the revolution through his heartbreaking interviews with ordinary Egyptians.

Tweets are for twits who don't have the attention spans to care about the difference between Sunni and Shia. Leave Facebook and Twitter to the likes of the Sarah Palins of the world who have nothing substantive to say. In her case, though, crow-like cackles would be a more apt description than innocuous little tweets.

Meanwhile, the USA, after more than a week of its "delicate tightrope" balancing act of not wanting to side with the Mubarak government, is siding with the Mubarak government in its obvious status-quo seeking "transition to Democracy." Hillary Clinton, the Goldwater Girl of yesteryear, has even resorted to repeating a Fox News rumor of an assassination attempt on torturer and dictator-in-waiting Suleiman. When all else fails, the Policeman of the World will use the fear factor (Islamophobia) to hasten the transfer of puppet strings from one USA-bribed despot to the next. Keeping the Suez Canal open for all that oil bound for our shores trumps the human rights of the Egyptian people. And even without benefit of American social media, the people in the square are aware of what's going on. Word of mouth and human-to-human contact still rule. Contrary to popular belief, the world can go on without with Facebook.

http://kmgarcia2000.blogspot.com/

 

 

geek

MA

Frank, excellent summarizing of last week's events. I see the problem in the US as two-fold, one being the prism of Israel through which everyone views all that goes on in the Middle East and North Africa part of the world. This distorted view reflects in out foreign policy as well.

The second point is that we are so used to the US being an active interferer/player in everybody's affairs that we expect immediate and instant reaction, by our diplomats, by our administration, and by our journalists and media. All these past 11 days, the media has been blaming Obama administration for being "tardy", for not doing enough, OMG what will happen to Israel? Without realizing that Egypt is an ancient civilization and a very mature and sophisticated one at that. The Egyptians are totally capable of creating their own revolution in their own terms. They are energized, they need time, we as observers can voice our support, but we should not interfere in their affairs. If they need help, let them ask. Let us not make another Iraq mistake. Lord, so much bloodshed, when the Iraqis are so capable to do their own revolution, they too are an ancient civilization, wisdom runs in their veins. Why did we have to cause so much pain?

 

 

Gemli

Boston

I suppose Americans in general suffer from the conservative disease of assuming that nations in turmoil probably deserve it. Those folks over there shouldn’t have let themselves be manipulated or exploited by their government. If the wealth of their country has been stolen by a few powerful individuals, and if jobs and resources are meted out by a handful of well-connected corporations, well, they asked for it. If religion is used as a force to interfere in citizens’ private lives, they should refuse to accept it. If they get their information from news media that have ties to the government, or that make outrageous, inflammatory partisan pontifications, or knowingly spread false information, they should change the channel and look for alternative sources. When Twitter and Facebook reduce information to short blurbs, or embed so much advertising in the content that the content is lost, they should know enough to unplug themselves and start communicating in full sentences again.

And when other nations look at us and shake their heads, we should forgive them for assuming that we deserve what we get, too.

20 spruce

MA

Our American civilization currently is more docile than Egypt's. We have lots to protest against, but remain uncharacteristically subdued.

The N.S.A. is enabled to spy into our private communications without warrant and in conflict with the Fourth Amendment. I didn't go out and protest. Did you?

The President campaigns against "stupid" wars, but he continues to wage an abysmal and stupid war in Afghanistan. No substantial demonstrations have followed.

Wall Street continues to bonus its nasty double-dealing crooks while the rest of us try to cough up enough money to keep our schools running with class sizes under 30. No protests in my town.

The Supremes mock the Constitution in Bush v Gore, followed ten years later by Citizens United. Which is more unbelievable, the decisions or the lack of protest?

Mr. Obama does Bush and Cheney one better by proclaiming he can keep Guantanimo prisoners jailed, even if found innocent in an American court of law! Again, no protests. (But then, these people are "the other," so of course we needn't worry about them.)

I have enormous respect for the Egyptians' courage. We, too, have been a courageous people in the past hundreds of years. May we find our way again, even if it finds us in the streets contending for what is right and honorable and undeniably American.

Maani

New York, N.Y.

I agree with Rich on his second point, but not on his first.

There is no question that the U.S. MSM has a very "1984" quality to it: "Who controls the past controls the future; Who controls the present controls the past." By not permitting access to Al Jazeera English (and other alternative media sites), the U.S. MSM has, as Rich points out, created a kind of "media blackout" of anything that is not U.S.-based (with the notable exception of the BBC).

However, I vehemently disagree with Rich's cavalier dismissal of social media as a crucial element in the events occuring in North Africa and the Middle East. It may be true that only 20% of Egyptians have Facebook or Twitter. But I would bet that among those in Tahrir Square and other gathering sites in Egypt, a wildly disproportionate number are among those 20 percent. As well, there is absolutely no argument that the very first protest in Tunisia - the one that effectively began the ENTIRE upheaval throughout the region, the protest tied to the self-immolation of a frustrated vendor - was set up via social networking; that non-connected citizens also participated is almost certainly the result of the "connected" spreading plans of the protest by word of mouth.

However, Rich's biggest faux pas is his central claim that social media could not have been a major underlying factor in Egypt because when the Egyptian government shut down the Internet (and access to social networking), the crowds only got bigger. It apparently doesn't occur to Rich that he has it exactly backward: it was BECAUSE people who had formerly had access to social media no longer DID that they were even ANGRIER, and, again, used word of mouth to increase their numbers.

Ultimately, Rich is wrong about social media's impact on the upheaval in the region. But he is correct that Americans have become "dumbed down" - particularly re foreign policy and foreign affairs - by a tightly controlled media that wants to "control the present."

Sandy Lewis

Lewis Family Farm, Essex, New York

Outrage and a Facebook Page That Gave It a Voice, Jennifer Preston, page A10, February 6th, 2011, The New York Times: If there is a face to the revolt that has sprouted in Egypt, it may be the face of Khaled Said.

That 28-year-old Egyptian businessman was pulled from an Internet cafe in Alexandria last June by two plainclothes police officers who beat him to death in the lobby of a residential building after they learned that he had posted a video on his personal blog showing them with illegal drugs.

The Egyptian police and security services have a well-earned reputation for brutality and snuffing out political opposition. But in Mr. Said, they unwittingly chose the wrong target.

Within five days of his death, an anonymous human rights activist created a Facebook page — We Are All Khaled Said — that posted cellphone photos from the morgue of his battered and bloodied face, the video of the corrupt police officers and other YouTube videos contrasting his corpse with pictures of his bright and smiling face from happier days. By mid-June, 130,000 people joined the page to get and share updates about the case.

It became and remains the biggest dissident Facebook page in Egypt, even as protests continue to sweep the country, with more than 473,000 users, and it has helped spread the word about the demonstrations in Egypt, which were ignited after a revolt in neighboring Tunisia toppled the government there.

“There were many catalysts of the uprising,” said Ahmed Zidan, an online political activist marching toward Tahrir Square for a protest last week. “The first was the brutal murder of Khalid Said.”

The Tunisian rebellion was set off after a fruit vendor, Mohamed Bouazizi, burned himself to death after being humiliated by the police. His desperate act led to protests, which were recorded on mobile phones, posted on the Internet, shared on Facebook and eventually broadcast by Al Jazeera.

But Mr. Said’s death may be the starkest example yet of the special power of social networking tools like Facebook even — or especially — in a police state. The Facebook page set up around his death offered Egyptians a rare forum to bond over their outrage about government abuses.

“Prior to the murder of Khaled Said, there were blogs and YouTube videos that existed about police torture, but there wasn’t a strong community around them,” said Jillian C. York, the project coordinator for the OpenNet Initiative of the Berkman Center for the Internet and Society at Harvard University. “This case changed that.”

While it is almost impossible to isolate the impact of social media tools from the general swirl of events that set off the popular uprisings across the Middle East, there is little doubt that they provided a new means for ordinary people to connect with human rights advocates trying to amass support against police abuse, torture and the Mubarak government’s permanent emergency laws allowing people to be jailed without charges.

Facebook and YouTube also offered a way for the discontented to organize and mobilize — and allowed secular-minded young people to seize the momentum from Egypt’s relatively neutered, organized opposition.

Far more decentralized than political parties, the strength and agility of the networks clearly caught Egyptian authorities — and American intelligence analysts — by surprise, even as the Egytian government quickly attempted to shut them down.

Mr. Said, who was from a middle-class family and worked in the import-export business, was not an activist or involved in politics: he was simply offended by the corruption he saw. After police officials lied to his family, saying he was involved in drugs and died of asphyxiation from swallowing a package of marijuana while in police custody, witnesses went public, telling their stories in YouTube videos. Cellphone photos of Mr. Said’s shattered and broken face began to circulate online and provided evidence that eventually authorities could not ignore.

“What made this case different is that Khaled Said was just an ordinary person,” said Gamal Eid, 47, a lawyer and executive director of the Arabic Network for Human Rights Information in Cairo. “He was just a guy who found evidence of corruption and he published it. Then when people learned what happened to him, when people saw pictures of his face, people got very angry.”

Mr. Eid said that Facebook, YouTube, Twitter and mobile phones made it easy for human rights advocates to get out the news and for ordinary people to spread and discuss their outrage about his death in a country where freedom of speech and the right to assemble are limited and the government monitors newspapers and state television.

“He is a big part of our revolution,” said Hudaifa Nabawi, a 20-year-old student in Tahrir Square on Saturday.“ Khalid Said was a special case. He didn’t belong to any faction, and he didn’t do anything wrong. He became the way to focus our perceptions around the oppression that all the youth all face

N. Ray

North Carolina

I was among the many tuned in for hours via laptop to Al Jazeera English for something of a real look at Egypt. As I watched I was impressed by the bravery of the AJE crews and the professionalism of their production. I also marveled that such a fresh window on the world was available in America only to those with both the equipment and curiosity to find and open it on the internet. And this in a "free" country, with a sizable Muslim population.

It is a measure of the pinched imperialism afflicting many Americans that we believe that a desperately poor Arab population is capable of revolt only because the white man has provided new and wonderful communication tools. Over the years, dictators much worse than Moubaric have been dumped by populations without any access to so much as a telephone.

However, the unavailability here of news outlets such as AJE, and the active hostility to them by the Fox News faction of our population, is yet more indicative of how deeply Americans have adopted an imperial outlook on the world. While AJE zeroed in on the drama in the streets, most of our domestic commentary centered on what sort of government would replace that currently running Egypt, and whether the new bosses would be friendly to the US, or to our extension in the Middle East, Israel, as usual, as though it were the 51st state. The running subtext was a near hysteria that some sort of jihadist regime would come to power. Beck offered that a caliphate would soon engulf the entire Middle East and North Africa, and maybe even Europe. American narcissism was on display in full color. It was all about us. A few words were spared for the poor in Egypt who have finally decided they have taken enough. But for the most part, the folks forcing the changing with their blood and courage were treated as little more than the chorus, occupying the streets while the stars of the show within the Egyptian and American governments got a "transition" all worked out and maintained stability. Heaven forbid that those Egyptian protesters should somehow derail our economic recovery.

Our narrative seemed to ask just who needs worry much over facts ordering the lives of little people in a poor part of the world that seems to cause us nothing but trouble, when we have so many interests to attend to world wide. Many Americans don't know and don't want to know about the problems of these foreigners. After all, the sun never sets on a real empire and the work at the acquisition of the resources necessary to sustain it. Most Americans seem to have accepted the difficulties of running their own, but they've also lost patience with and sympathy for the predictable efforts by the oppressed out there to improve their lives. Our own revolutionary ideals of freedom and liberty seem to have become little more than words spoken but not understood by a fearful and proudly ignorant population.

...is a Prague Spring in the Middle East, are the U.S., Britain and the EU now going to play the role of the old Soviet Union?

Ike Solem

CA

"As the United States and leading European nations threw their weight behind the Egyptian vice president’s attempt to defuse a popular uprising..."

Try replacing "defuse" with "violently crack down on" maybe?

Isn't this the also same General Omar Suleiman who was deeply involved in the 'secret' CIA proxy rendition-torture program of the past decade? The person closest to Mubarak? How is that not like removing Stalin and installing Beria in his place?

Suleiman and Mubarak should both be encouraged to leave the country immediately, and a rapid election schedule should be implemented, with the Egyptian military serving a temporary peacekeeping role.

From PBS, 2007:

CIA’s Confirmed Proxy Dentention Facility Prisons in Egypt:

1. Tora Prison , South of Cairo

". . . Infamous for decades, the prison has held thousands of the country’s security detainees. . . . Most prisoners are transferred to Tora after their interrogations have been completed, and it is only at this point that a detainee becomes an officially recognized prisoner. Generally, after any injuries from torture have healed, detainees may receive visits from their family or lawyer. . ."

2. State Security Investigations Stations, Lazoghly

". . .Located behind black-painted walls and defended by machine-gun nests on each corner, Lazoghly Square is one of the country’s most notorious addresses. Rounded up in early morning raids, political dissidents and Islamists are often taken here first for processing and, according to consistent accounts from former inmates, for torture. . . [which] involves prisoners being beaten, suspended over the edge of doors by arms tied behind their backs, subjected to cigarette burns and electric shocks, sexually harassed, deprived of sleep and food, and forced to watch relatives being tortured."

3. Mukhabarat al-Aama Headquarters, Cairo

"Situated in the Abdeen area of Cairo, Mukhabarat al-Aama is the headquarters of the General Intelligence and Security Services, headed by General Omar Suleiman. The Mukhabarat usually receives rendered detainees for initial interrogation. . . "

4. State Security Investigations National Headquarters, Nasr City

". . . a torture room is also allegedly close to the [50] cells so that detainees, even when not being tortured themselves, were privy to the constant screams of others."

It's now obvious that the U.S. "plan to bring democracy to Middle East" (endorsed by the G8, no less) was just window dressing to justify the war for oil in Iraq (where police just fired on protesters, another Tunisia-inspired situation being ignored by U.S. media).

Apparently, the last thing our Washington-Wall Street nexus wants is democratic outbreak upsetting their corrupt kickback-based economic relations in countries like Egypt and Saudi Arabia - and the center of that corruption appears to lie in the U.S. State Department, the ones pushing this ludicrous plan. Obama and Mubarak are looking more and more Carter and the Shah of Iran - and that's not a very good sign.

Of course, their larger concern is probably the spread of democratic uprisings to other countries across the region - the "domino effect."

Curiously, the last time the "domino effect" was mentioned in U.S. foreign policy circles was with respect to the spread of communism across Southeast Asia - so is democracy the new communism? Likewise, if this is a Prague Spring in the Middle East, are the U.S., Britain and the EU now going to play the role of the old Soviet Union?