By the numbers: a 2013 money-in-politics index

Center for Public Integrity highlights key stories and trends

By Michael Beckelemail

Number of bills passed by Congress this year that have been signed into law: 58
Number of bills passed in 1948, the year President Harry Truman* assailed the “Do-Nothing Congress”: 511

Number of minutes Sen. Ted Cruz, R-Texas, spent reading Dr. Seuss's "Green Eggs and Ham" during a 21-hour talk-a-thon in September: 5 ½

Number of hours per day the Democratic Congressional Campaign Committee recommends embattled freshmen spend fundraising: 4

Amount of campaign cash all members of Congress have reported raising so far in 2013: $403,952,012

Number of seats Republicans need to pick up next year to win control of the U.S. Senate: 6

Number of currently Democratic-controlled Senate seats up in states carried in 2012 by Mitt Romney: 7

Minimum number of super PACs and hybrid super PACs that registered with the Federal Election Commission since January: 210

Number that explicitly mention Hillary Clinton in their own names: 8

Rank of New Yorkers and Californians, respectively, among donors who gave at least $200 to the main pro-Clinton super PAC between January and June: 1, 2

Amount a previously little-known California vintner poured into a pro-GOP super PAC ahead of the special Massachusetts U.S. Senate race in June: $1,700,000

Number of federal candidates to whom you may currently donate the per-cycle legal maximum of $5,200 without violating the law: 9

Number of U.S. Supreme Court justices it would take to throw out this aggregate contribution limit in a case before them: 5

Amount by which Democratic mega-donor Fred Eychaner exceeded the aggregate giving limit in 2012 after an “inadvertent error”: $1,000

Number of Fortune 100 companies that list on their websites a politician’s leadership role or committee assignments as reason to provide them financial support: 34

Number that mention a candidate's "integrity," “ethics” or “character”: 10

Estimated cost of the special U.S. Senate race in New Jersey conducted three weeks before the scheduled general election: $24,000,000

New Jersey GOP Gov. Chris Christie's margin of victory in November over his Democratic challenger: 22 percentage points

Number of days the federal government was partially shutdown in October: 16

Number of seats Democrats need to pick up next year to win control of the U.S. House of Representatives: 17

Ratio by which Democratic-aligned super PACs out-raised their Republican counterparts from January through June: 2:1

Amount of money donated by hamburger chain White Castle to a super PAC aligned with Speaker of the House John Boehner, R-Ohio: $25,000

Amount of money doled out to conservative groups by the Koch brothers-connected Center to Protect Patient Rights in 2012: $112,158,149

Date on which California campaign finance regulators announced an unusually large $1 million fine against two conservative groups in the state that failed to fully reveal their funders: Oct. 24

Date on which Internal Revenue Service official Lois Lerner resigned amid allegations that the agency had improperly targeted conservative nonprofits for scrutiny: Sept. 23
Date on which President Barack Obama’s two new nominees for the Federal Election Commission were confirmed: Sept. 23

Number of FEC commissioners who are still serving on the six-member commission despite their terms having expired: 4

Number of campaign bundlers Obama has nominated to serve as ambassadors since January: 23

Chance the U.S. ambassador to Ireland since 1960 has been a political appointee and not a career diplomat: 100 percent

Minimum number of incumbent GOP senators facing primary challenges next year: 7
Number of Senate and House candidates the anti-tax Club for Growth has already endorsed: 5

Number of votes Rep. Justin Amash, R-Mich., received to be House Speaker in January: 1

Percentage of House Republicans who voted for Amash’s amendment to limit the National Security Agency's surveillance ability: 40

Percentage of House Democrats who did the same: 56

Ratio of senators that voluntarily e-file their campaign finance reports: 1/6

Number of Twitter followers of Sen. Cory Booker, D-N.J.: 1,445,268

Number of campaign finance reports Booker has e-filed this year: 0

The Pope delivers first Christmas homily (Video)

Source: CNN

Edward Snowden warns about loss of privacy in Christmas message (video)

Source: The Guardian

Merry Christmas and Happy New Year

May you find Peace, Love
And Happiness
With all good wishes
to you and your family
for health and happiness
throughout the coming year.
Merry Christmas!
Frohe Weihnachten!
¡Feliz Navidad!
Joyeux Noël!
聖誕快樂

Obamacare: yes, there's plenty in it for you

Commentary: polling shows public has been swayed by opponents' misinformation campaign

By Wendell Potter

The White House did not receive much holiday cheer about Obamacare last week from public opinion pollsters, even though millions of Americans already are benefiting from the law. The numbers show just how big the disconnect is between the reality of what’s occurred in health care since Congress passed the Affordable Care Act in 2010 and the perception that people have of the law resulting from the relentless campaign of misinformation from the president’s opponents.

According to an Associated Press online survey, more people had unfavorable opinions of the law than favorable ones, with many people who have insurance through their employers blaming the law for the hike in premiums and deductibles they’ve been told to expect for next year.

The one thing that was clear from the survey is that most Americans have not yet heard about how the law already is helping them. Many of the respondents also appear to have short-term memory problems. They seem to have forgotten that  premiums and deductibles have been going up, often by double digits, every year for at least a couple of decades.  The reality is that the rate of premium increases since Obama signed the Affordable Care Act has been lower than in many previous years.

The Kaiser Family Foundation reported a couple of years ago, for example, that between 2001 and 2011, average premiums for family coverage increased 113 percent. Not only did premiums increase steadily in the years before the law was passed, but employers also shifted more of the cost of the premiums to their workers and increased deductibles every year.

The average annual increase for employer-sponsored family coverage last year was just four percent, the foundation said, much lower than the average increase in the decade before ACA became law.
“We are in a prolonged period of moderation in premiums, which should create some breathing room for the private sector to try to reduce costs without cutting back benefits for workers,” Kaiser President and CEO Drew Altman said in August when his organization released the most recent health insurance numbers.
Chances are you missed that news. Here are some other numbers you might also have missed:

• An estimated 3.1 million young adults have been added to the insurance rolls since the provision of the law allowing young people to stay on their parent’s policy until age 26 went into effect in 2010.
• Policyholders received $1.2 billion in rebates in 2011 and $2.1 billion in 2012 as a result of a provision in the law that requires insurers to spend at least 80 percent of our premium dollars on actual medical care, rather than overhead. If they don’t, they have to issue rebate checks.
• Medicare beneficiaries have saved an estimated $7 billion on prescription drugs as a result of the provision of the law that closes the gap — known as the “doughnut hole” — in the Medicare Part D drug program. That number will increase substantially in years to come as the doughnut hole closes a bit more. It will be closed completely in 2020.
• More than 25.4 million people covered by the original Medicare program received at least one preventive service at no cost to them during just the first eleven months of 2013, according to the Centers for Medicare and Medicaid Services. Before the Affordable Care Act was passed, people in the original Medicare program had to pay for preventive services. As a consequence, many did not get the care they needed.
• Millions of Americans who have not been able to afford coverage will finally have it in just a few days. Although signup for health coverage was slow during October and much of November because of problems associated with the federally operated health insurance market place (www.Healthcare.gov), enrollment has surged since most of the problems were fixed.

By the end of November, an estimated 1.2 million people had enrolled in new health plans. The numbers increased dramatically this month as the Dec. 23 deadline for signing up for coverage approached. In California, for example, 53,510 enrolled in coverage during the first three days of last week, including 20,000 in one day. And President Obama said Friday that another 1 million had signed up for coverage nationwide during the first three weeks of December.

Many of the newly insured have not been able to purchase insurance at any price in the past because insurers refused to sell coverage to millions of Americans with preexisting conditions. Insurers can no longer do that, nor can they charge people more than others simply because of a current or previous illness.

Source: The Center for Public Integrity

Feeding the Bubble: Is the Next Crash Brewing?

By Martin Hesse and Anne Seith
 Source: Der Spiegel

Central banks around the world are pumping trillions into the economy. The goal is to stimulate growth, but their actions are also driving up prices in the real estate and equities markets. The question is no longer whether there will be a crash, but when.

When 42-year-old hedge fund manager Mark Spitznagel wants to forget about his high-stakes business for a while, he heads to the goat farm he and his wife Amy purchased in the bucolic hills of Michigan. There, he produces cheese according to environmentally sustainable methods, because he views modern agriculture, with its large-scale pesticide use and automated factory farms, as degenerate. In fact, he says, factory farming is "an ideal metaphor" for the economy.

In Spitznagel's view, the world's financial and equities markets are also dysfunctional, and what happens there is unhealthy and anything but sustainable. As a money manager, he has also opted for an alternative business model of sorts: He's betting on a crash.

For his customers, Spitznagel's multi-billion-dollar fund acts as an insurance policy against the next meltdown in the financial system. When the market is doing well, they lose modest amounts of money. But they cash in as soon as prices take a nosedive, even when all other investments are going up in smoke.

The hedge fund manager has made a lot of money in the past with his prognoses, and he is convinced that substantial turbulence is on the cards for the near future. "The setup is there for it," says Spitznagel.

'It Might Go Badly'
 
Since the last crisis, central banks around the world have pumped trillions into the economic cycle, both by lowering interest rates and buying up securities in the markets. For central bankers like United States Federal Reserve Chairman Ben Bernanke, the aim of the policy was to stimulate the economy and rescue banks that could no longer raise capital elsewhere. But this "grand monetary experiment," as Spitznagel calls it, has side effects. Because it makes borrowing cheaper than even before and saving all but pointless, it encourages investors to pursue reckless deals. Share prices are exploding on stock exchanges around the world, while real estate prices are rising at an alarmingly fast pace. And many US companies are now in as much debt as they were before the financial crisis.

To take Spitznagel's metaphor a step further, the flood of money coming from central bankers acts like a highly aggressive, artificial fertilizer. It generates enormous yields in the short term, but eventually leads to potential devastation.




For this reason, the ongoing party in the stock and real estate markets is beginning to feel uncanny to a growing number of observers. "It might go badly," Nobel laureate Robert Shiller told SPIEGEL. Some economists are even convinced that the question is no longer whether the next crash is coming, but when.


For brokers on the venerable trading floor at the New York Stock Exchange, such predictions are hugely exaggerated. "This is not a bubble," says Peter Tuchman, who has worked on Wall Street for almost 30 years and, with his white, Einstein-like hairstyle, half a dozen bracelets and well-worn running shoes, is a legend on the floor. He taps his smartphone a few times and pulls up a graph depicting the S&P 500 index of stock prices for 500 large companies, which has gone up by 166 percent since it hit rock-bottom in 2009. "This is a stable development," says Tuchman, pointing to the graph, which is directed uniformly upward. In his view, these are simply good times following on the heels of years of crisis. "There are new company listings every day," he says. "That is a good sign to me."

It's the first Thursday in November, the day of the Twitter IPO, and the jocular trader is completely in his element when a nine-year-old girl in a tulle dress and actor Patrick Stewart, who played Captain Jean-Luc Picard on the "Star Trek: The Next Generation" series, ring the traditional opening bell.

At 9:45 a.m., during the initial pricing phase, the Twitter share price jumps from $26 (€19) to more than $40. At 9:54 a.m., Twitter is trading at about $42 a share, and at 10:49 it's at $45.10. "If you bought the stock yesterday evening and sell it today, you'll have earned a return on investment of more than 70 percent," says one of Tuchman's fellow traders, with a note of awe in his voice.

Twitter hasn't made any money yet, nor does it have a convincing idea of how it will do so.

Other tech stocks are also doing extremely well, just as they were in the heyday of the New Economy. Amazon's share price has almost doubled in two years, while electric car manufacturer Tesla has gained 300 percent in market value in the same period.

"It is a complete joke," says hedge fund manager Spitznagel. He explains that the market is driven by investors' confidence that prices will continue to rise in the future. He says it is "a self-reinforcing process entirely disconnected from economic reality."

A Hunger for German Stocks
 
For many people, what Spitznagel is describing is typically American. In the heartland of capitalism, the crash has been to economic life what the Colt gun was to the Wild West. In Germany, on the other hand, centuries-old family businesses operating in brick-and-mortar factories make sophisticated tools, machines and systems, with which real, palpable, everyday products are made in the rest of the world. One would think that prices would be more down-to-earth in such a grounded environment.

Dürr AG, which makes machine tools in Germany's southwestern Swabia region, is one of those traditional companies. In business since 1895, Dürr is a supplier to automakers, as well as the chemical and aviation industry, and it manufactures production and environment technology systems -- a thoroughly solid product line.
But Dürr's share price has doubled within a year and increased fourfold in the last two years. A share of Dürr stock costs €66 today, whereas it could be had for less than €4 in 2009.

That's because international investors are hungry for securities like Dürr shares, which embody the successful model of Germany's export economy. It's also because companies like Dürr benefit from growth in emerging economies, and because their operations are in Germany and not in one of the crisis-ridden countries of the euro zone.

This demand has driven the MDAX, a German stock index for mid-sized companies, from 11,400 to 16,300 points within a year. The index is currently almost four times as high as it was during the stock market boom in 2000, far outperforming the DAX itself, an index of Germany's 30 largest companies -- although the DAX is also breaking one record after the next.

Germany is a hot commodity among investors, in both the equities and real estate markets. Prices for single-family homes and condominiums in major cities like Munich, Hamburg, Frankfurt and Cologne are rising faster than rents, a sign that speculators are pushing their way into the market. Buyers are from Germany, Italy, Eastern Europe and Asia, and they are buying German real estate because they believe that by investing in "concrete gold," they can protect themselves against the dangers of inflation.

This buying frenzy creates potential trouble spots around the world. Real estate prices in major Chinese cities have increased by more than 20 percent in only a year, wealthy foreigners are snapping up luxury property in Istanbul, and in the United Kingdom the government is giving an additional boost to the economy by offering a special loan program for homebuyers.

In the last 12 months, real estate prices in the United States have gone up more than they have since 2006. Some cities, like San Francisco and Las Vegas, have even seen price increases of 24 to 27 percent. Ironically, the last crisis began in the overheated US housing market.

Part 2: 'Ignoring the Risks'

Some economists seek to allay fears by noting that the real estate market still has a long way to go before it reaches the levels that triggered the last crash, and that prices are still averaging 50 percent lower than they were then. But who says that you have to reach the most inflated point in the last crisis before a dramatic downturn sets in? And at what point does a solid growth trend turn into unhealthy hype?

"There are two types of bubble," says economic historian Werner Abelshauser, "the classic and the modern type." The mother of all classic bubbles was the market euphoria that took hold in the United States in the 1920s and came to an abrupt end on Oct. 24, 1929, known as Black Thursday. "From maids to taxi drivers, people were intoxicated with the idea that an age of never-ending prosperity had begun. They bought refrigerators and cars, as well as stocks, frequently on credit," says Abelshauser.
Black Thursday was followed by a Black Monday and a Black Tuesday. Within a few days, the benchmark Dow Jones index had lost a third of its value.

In the late 1990s, with the advent of the Internet age, investors believed once again that new economic laws applied and that growth rates would continue to rise. The term "New Economy" was coined. Once again, people who barely knew what a share was began trading in the market, even scrambling to buy shares in companies with nothing more than a vague prospect of ever turning a profit.

The New Economy bubble burst when the first of these companies were unable to fulfill overinflated expectations, and when several cases of fraud came to light.

A Blind Eye to Excessive Hype
 
Even Abelshauser, a prudent man with gray hair and a somewhat skeptical look in his eyes, lost money in the stock market at the time. What fascinates Abelshauser even more than the phenomenon of a bull market propelled by milkmaids and dentists is the second type of speculative bubble: one based on the new methods of financial mathematics, and the mad belief that risks can be largely overcome with sophisticated financial products.

The first such crash occurred in 1987, as a result of misguided speculation in financial derivatives, followed by a second crash in 2008. This time the culprits were banks, which had sugarcoated the numbers on subprime mortgage loans and sold them in large numbers.

Instead of eliminating investment risk, the modern mathematical models only increased investors' willingness to take risks, causing them to turn a blind eye to excessive hype.
Another phenomenon has also been around since the 1970s: debt management policy. After the oil shocks and the economic crisis they triggered, governments tried to jump-start their economies by borrowing and spending more. "The more money that is injected into the economic cycle, the more room there is for speculative bubbles," says Abelshauser.

Today central banks, especially, have encouraged the flow of capital with their extremely low benchmark interest rates and financial bailouts for banks and governments.
But the situation becomes dangerous when even the massive sums central banks are pumping in the economy don't lead to a rise in consumption and corporate investment. Economists like Carl Christian von Weizsäcker of the Max Planck Institute for Research on Collective Goods in Bonn, Germany see evidence of a global investment bottleneck, noting that too few factories are being built and not enough new products developed. This is offset by the growing mountain of savings aging Western societies are accumulating as a safeguard for the future.

Exacerbating a Problem
 
It's a misguided approach, though. The consequence of a high savings rate and a low investment is a decline in interest rates. Insurance companies and pension funds come under great pressure to invest their customers' assets in ways that are at least somewhat profitable. The flood of money coming from central banks only exacerbates the problem.

Central bankers claim they will be able to use the tools of monetary policy to extract the money from the global economy once again -- at just the right time and in the right amounts. At times, it almost sounds as if they were the ones who were trying to use numbers to obscure the risks.

But the danger is real, and the only question is how far prices on financial markets have already strayed from fundamental values.

The problem is that every expert comes up with a different answer. "It is a bit tricky," Nathan Sheets, global head of international economics for US-based Citigroup, says of the situation in bond markets. Low interest rates make borrowing cheaper than ever. US companies alone, by issuing bonds to willing investors, have borrowed money at a faster pace this year than ever before. If central banks decided to stem the flow of money, painful corrections could ensue.

Sheets is less concerned about prices on US stock markets. "There are a large number of firms that are extremely profitable and internationally competitive, with strong balance sheets," he says.

Concerns over the Bull Market
 
Hedge fund manager Spitznagel, for his part, cites a simple indicator to substantiate his concerns over the bull market: Tobin's Q, named after its inventor, Nobel laureate James Tobin. Roughly speaking, Tobin's Q indicates how high a company's market value is in comparison to all of its assets.

Instances when this ratio has been high in the past have always been followed by a crash at some point, says Spitznagel. Tobin's Q is now extremely high in the United States.

In many places, it has become difficult to cite corporate profits as justification for rapidly rising share prices. This doesn't just apply in the glamorous world of US technology stocks, but also in the rock-solid Mittelstand, the term used to describe Germany's small and medium-sized companies. On the MDAX, for example, the average ratio of share prices to corporate profits is at an all-time high. It would take almost 27 years for the companies to earn what investors are paying for their stock. And even though analysts are predicting declining profits, share prices continue to rise.

Still, market psychologist Joachim Goldberg does not see a bubble forming in the German stock market. He too believes that a rise in the market only becomes dangerous when large numbers of people get caught up in the hype.

But there can be no question of that today. "This is perhaps the most-hated bull market I've ever experienced," says Goldberg, who used to work for Deutsche Bank and now runs his own firm in Frankfurt, where he studies what influences investors in making their decisions.

People noted that prices were rising, but at the same time they heard economists warning against the risks, says Goldberg, including the euro crisis, the interest rate turnaround or whatever the admonishers felt was the greatest threat at a given moment. For that reason, he explains, many private investors tend to be skeptical.

Plenty of Potential Problem Spots
 
But even Goldberg is concerned. "People prefer to invest in things with which they haven't had any negative experiences, such as the real estate market in Germany," he says.

Germans are also avidly investing in Bitcoin, the virtual currency that rose above $1,000 for the first time last week. In early October, one Bitcoin was still worth less than €200. The volume of the currency is limited by a complex algorithm, which also drives up the price.

"The same prophets who were advocating investing in gold until recently are now pushing the Bitcoin," says Goldberg. The behavioral scientist almost succumbed to the temptation himself recently. "I wanted to invest, but I hesitated for a day, and the price almost doubled the next day," Goldberg says with a chuckle.

The irritation he felt afterwards is what typically leads to speculative bubbles, says Goldberg. "When people see how their neighbors are getting rich with apparently no effort at all, and the psychological strain resulting from lost profits becomes too great, they begin ignoring the risks and jump on the bandwagon."

Will the next conflagration erupt online, with the collapse of an artificial currency that most people still see as a gimmick dreamed up by a few Internet nerds? Or perhaps in the art market, which has attracted speculators who fancy themselves art aficionados?
These niche markets are probably still too small to set off a global quake. Still, there are plenty of potential trouble spots.

Hedge fund manager Spitznagel, at any rate, is convinced that the next crash isn't far off. "We don't know where it is going to start," he says, "It won't be pretty."

Translated from the German by Christopher Sulta

President Obama’s lost year

By Zachary Roth and Benjy Sarlin

 

Running for re-election last year, President Obama predicted that the knee-jerk Republican opposition to his agenda that marred his first term would subside in his second.

“I believe that if we’re successful in this election—when we’re successful in this election—that the fever may break,” Obama told a Minneapolis crowd in June 2012. “My expectation is that after the election … we can start getting some cooperation again.”
On immigration, on the budget, on infrastructure spending, and on energy, Obama said, chastened Republicans would surely be willing to work constructively with him once he’d been approved by voters a second time.

Not even close.

Gun reform, immigration, job creation: the president’s top legislative goals have been stymied by Republicans in Congress, who have gone to almost unprecedented lengths to hobble him. The upshot: 2013 has seen frustratingly little progress on the issues that Obama promised would be central to his second term, as his approval ratings have sunk to record lows. That’s left him increasingly reliant on strategies for sidelining the GOP, as he urgently tries to revive his flagging presidency.

“A lot of our legislative initiatives in Congress have not moved forward as rapidly as I’d like,” Obama acknowledged in a December 20 press conference. “I completely understand that.” 

Beyond failed legislation, the White House has been on the defensive time and time again this year, bogged down by GOP-driven crises and pseudo-scandals like the IRS and Benghazi. Obama spent much of the fall forced to fend off quixotic efforts by extremist Republicans to defund the Affordable Care Act by shutting down the government, as well as to use the debt ceiling to hold the economy hostage. Since then, Obama has been scrambling to rescue his key first-term accomplishment in the face of a botched rollout and deliberate conservative sabotage.

Republicans bear most of the blame for the lack of action. Still, it’s hard to argue with the assessment of Peter Wehner, who had an up-close view of a president’s second-term struggles as a top policy adviser to President George W. Bush, that Obama hasn’t come close to meeting the goals he set for himself.

“I think it was an awful year,” Wehner said. “A detached view measuring what he said he wanted to accomplish versus what he’s actually accomplished shows that he’s fallen woefully short.”

There have been achievements along the way. The bipartisan budget deal may have been modest and left many of the harmful sequester cuts intact, but it will at least stop the GOP from threatening to shut down the government again any time soon. It likely wouldn’t have happened without Obama’s staunch refusal to negotiate on that issue back in September. November’s landmark nuclear pact with Iran is a significant step for international security. And the agreement, brokered by Russia, to remove Syria’s chemical weapons may have spared the U.S. from getting mired in another Mideast conflict.

Of course, those foreign deals didn’t require approval from lawmakers. Much more common has been the sight of Obama’s top priorities dying with a whimper on Capitol Hill. What happened on guns offered the first warning.

After last December’s school shooting in Newtown, Conn., Obama pushed hard for new laws to reduce gun violence. Polls showed overwhelming backing for common-sense gun control steps, and even conservative pro-gun lawmakers sounded supportive.

But after a fierce lobbying campaign by gun groups, a measure requiring background checks for gun show purchases was blocked by a Republican filibuster in April. And an amendment to ban assault weapons wasn’t even brought to a vote. Two relatively minor executive orders aside, Obama has little to show for the gun reform effort a year after Newtown. Today, the battle over the issue has largely shifted to the states.

“There were some on my side who did not want to be seen helping the president do something he wanted to get done, just because the president wanted to do it,” Sen. Pat Toomey, the Pennsylvania Republican who co-sponsored the background checks measure, explained to reporters after it died.

“I think he got a dose of the cold water of hard reality fairly early, with the gun vote,” said Norm Ornstein, a scholar at the conservative American Enterprise Institute who lately has emerged as an outspoken critic of Republican obstructionism. ”They stripped it down to the most inoffensive component–expanded background checks, 95% of Americans supporting them….And they get 55 votes and it’s filibustered to its death.”
Still, it was on immigration that hopes for major congressional action were highest. Top Republicans, afraid of alienating the growing Latino population, were openly calling on their party to pass comprehensive reform immediately after the election. With the RNC’s blessing, senators like John McCain and Marco Rubio, who had swung right on immigration in recent years, endorsed a path to citizenship and crafted a bipartisan bill that easily passed the Senate in June.

But House Republican leaders, fearing a backlash from conservatives, quickly declared the Senate bill dead on arrival. They pledged to produce their own piecemeal solution. Six months later, they’ve offered just a handful of mostly uncontroversial bills and held no floor votes on even those. Pro-immigration lawmakers worry the window to pass meaningful legislation is closing. Many conservatives have soured on the idea of courting Latino voters, arguing instead that victory lies in boosting white support.

Obama’s hopes for a Grand Bargain that would cut the long-term deficit and reform the tax code also lie in ruins. Democrats were able to use the Bush tax cuts’ expiration date at the start of the year as leverage for a deal raising taxes on the super-rich. But without another deadline to strengthen their hand, they’ve struggled to convince Republicans to even fund the government at all, leading to the 16-day shutdown in October. And there’s little sign that Republicans are any more willing to work out a larger deal trading tax increases for entitlement cuts than they were last year—as the Dec. 18 modest budget deal confirmed.

Even one relative recent bright spot—the economy’s somewhat improved performance—has come mostly despite, not because of, Washington. In his State of the Union address, Obama laid out an ambitious plan to boost employment and strengthen the middle class—including infrastructure spending, help for homeowners looking to refinance, and tying the minimum wage to the cost of living. Congress has acted on none of those ideas.

“He’s tried to implement things that would help, but has been blocked at every step by a very challenging Congress,” said Jared Bernstein, a former economic adviser to the Obama White House and an msnbc contributor. “They can barely keep the lights on.”

It’s been the same story on a host of other agenda items, from passing legislation to curb climate change, closing Guantanamo, and ensuring equal pay for women. Even Obama’s election night pledge to “do something” about eight-hour wait times at the polls may end up having little impact. A bipartisan panel is set to release non-binding recommendations soon, but it’s far from clear they’ll be acted upon. Indeed, his Justice Department suffered a major defeat on voting rights when the Supreme Court struck down a key part of the Voting Rights Act in June. 

With crucial midterms approaching, things could get worse before they get better. Ornstein noted that the top two Republicans in the Senate will have to fend off tea party challengers, giving them even less reason to deal with Obama.

“The more you get away from that [2012] election, and the more you move towards the 2014 primary contests, now with both Senate Republican leaders facing challenges from the right, any hopes that were there have been, I think, pretty well dashed,” Ornstein said.

None of this means Obama’s out of options. Lately, there have been signs that he at last understands the need to work around, not with, the GOP. First, he offered crucial backing for the successful push by Senate Democrats to end the filibuster for executive branch and judicial nominees, making it easier for him to staff his administration and the courts. Then last week, he brought in John Podesta, a veteran of the Clinton White House, to spearhead an effort to make better use of the president’s executive power, especially on climate change. Already, Obama has directed the EPA to regulate global warming emissions, trying to do what he can to combat climate change through executive action.

“I think he came to realize that not even a sweeping re-election victory was going to have any significant impact” on the attitude of Republicans, Ornstein said.

So Obama can’t be counted out. “You can’t write his obituary at this point,” Wehner said. “Politics in general is not linear, it’s dynamic and fluid. People can be written off one month, and come back another month.” 

In fact, the president ended 2013 by striking the same optimistic tone he showed while running for re-election. Citing the improved economy, the recent budget deal, and renewed hopes for immigration reform in 2014, he declared at his year-end press conference:

“When I look at the landscape for next year, what I say to myself is: We’re poised to do really good things.

President Barack Obama Weekly Address December21, 2013 (Video/Trascript )

Weekly Address
The White House
December 21^st, 2013

Hi, everybody.  This week, Congress finished up some important work before heading home for the holidays.

For the first time in years, both parties came together in the spirit of compromise to pass a budget – one that helps chart our economic course for the next two years.  This budget will unwind some of the damaging cuts that have threatened students and seniors and held back our businesses.  It clears the path for critical investments in the things that grow our economy and strengthen our middle class, like education and research.  And it will keep reducing our deficits – at a time when we’ve seen four years of the fastest deficit reduction since the end of World War II. 

Members of Congress also voted to finally allow several dedicated and well-qualified public servants to do their jobs for the American people – many of whom waited months for a simple yes-or-no vote.  These are judges, cabinet secretaries and military leaders.  They’re men and women charged with growing our economy, keeping our homeland secure, and making sure our housing system and financial system work for ordinary Americans. 

So after a year of showdowns and obstruction that only held back our economy, we’ve been able to break the logjam a bit over the last few weeks.  It’s a hopeful sign that we can end the cycle of short-sighted, crisis-driven decision-making and actually work together to get things done. 

And that’s important.  Because there’s plenty of work to do.

Right now, because Congress failed to act before leaving on vacation, more than one million Americans are poised to lose a vital source of income just a few days after Christmas.  For many people who are still looking for work, unemployment insurance is a lifeline that can make the difference between temporary hardship or lasting catastrophe.  Instead of punishing these families who can least afford it – especially now – Congress should first restore that lifeline immediately, then put their entire focus on creating more good jobs that pay good wages. 

That’s what I’ll be focused on next year, and every day I have the privilege of being your President.  Growing the economy.  Expanding opportunity.  Building an America that offers everyone who works hard the chance to get ahead, and every child a fair shot at success. 

And if Congress continues to act in the spirit of cooperation we’ve seen in recent weeks, I’m confident we can make much more progress together in the year to come.

Thank you.  Have a great weekend and a very Merry Christmas.

New leak shows US, UK spying on heads of state, international orgs

Reports document intelligence monitoring of an Israeli PM, a top EU official and organizations like UNICEF.
Source: Al Jazeera America

Newspaper reports say the latest documents leaked by National Security Agency (NSA) contractor turned whistle-blower Edward Snowden show that British and American intelligence agencies monitored the communications of an Israeli prime minister and European officials, among hundreds of other targets in some 60 countries.

Reports from The Guardian, The New York Times and Der Spiegel broke the new revelations Friday, documenting the surveillance of more than 1,000 targets from 2008 to 2011.

Speaking at a press conference Friday, President Barack Obama answered questions about the NSA leaks and spying program, and implicitly addressed the newest revelations without going into specifics or suggesting if changes might be down the line.
"We've had less legal constraint in terms of what we're doing internationally (than domestically)," Obama said. "Just because we can do something doesn't mean we necessarily should."

The newest leaks show how the NSA and Britain's General Communications Headquarters (GCHQ) spied on the communications of foreign leaders, including targeting an email address belonging to Israel's then-Prime Minister Ehud Olmert. The vice president of the European Commission, Joaquin Almunia of Spain, who has authority over antitrust issues, also appears on a list of surveillance targets, according to the reports.

Almunia has clashed with the U.S. tech giant Google over how it operates its search engine, and when contacted by The New York Times, he said he was "strongly upset" by the revelations of eavesdropping.

The NSA did not confirm or deny the reports but insisted it does not spy to assist American corporations.

"As we have previously said, we do not use our foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of — or give intelligence we collect to — U.S. companies to enhance their international competitiveness or increase their bottom line," NSA spokeswoman Vanee Vines said.

But she said intelligence agencies seek "to understand economic systems and policies, and monitor anomalous economic activities" that are "critical to providing policymakers with the information they need to make informed decisions that are in the best interest of our national security."

GCHQ said it was aware of the reports, but it did not comment on intelligence matters. A spokesman said, "Our work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorized, necessary and proportionate."

Germany has been especially angered after it was reported that the NSA had tapped Chancellor Angela Merkel's cellphone.

The Guardian said the disclosure that GCHQ had targeted German government buildings in Berlin was embarrassing for British Prime Minister David Cameron, since he had signed an EU statement condemning the NSA's spying on Merkel.

U.S. and British eavesdroppers also spied on several U.N. missions in Geneva, including the United Nations Children's Fund (UNICEF), the U.N. Institute for Disarmament Research and a medical relief agency, Medecins du Monde, according to the reports.
Snowden has set off a firestorm over the past six months with bombshell leaks revealing the vast scale of NSA electronic spying.

He faces espionage charges in the U.S. and has been granted asylum in Russia, where he has defended his disclosures as an attempt to spark debate about U.S. government surveillance.

Few U.S. citizens appear to be mentioned in the documents, but the intercepted communications either started or ended in the U.S., the reports said.
Some of the surveillance appears to have been carried out from Sugar Grove, Va., a listening post run by the NSA under the code name Timberline.

Americans abroad denounce offshore tax law’s unintended consequences

By Margot Williams

 

Last week’s “Global Muckraker” post on “The mystery of the fleeing Americans” produced heated reactions from readers.

 In the post, I noted the skyrocketing numbers of Americans renouncing their citizenship or US residency and invited readers to help figure out what was driving the trend. The post described recent changes in US tax law, including the approval of the Foreign Account Tax Compliance Act (FATCA), and examined the reasons that Americans abroad might want to cut their ties – including tax avoidance by the wealthy.

I quickly got an earful from readers, more than two dozen of whom responded via email and on our Facebook page. Most of these readers told me that they were working and middle-class Americans abroad caught up in a byzantine and unfair tax system – far from the FATCA fat cats they felt they were being portrayed as.

At ICIJ, we’ve encountered FATCA as one of the most powerful laws against offshore tax avoidance that is currently on the books. For example, a recent survey of the offshore industry found that FATCA was far and away the most pressing regulation from any nation in the eyes of tax haven professionals. The Government Accountability Office has estimated that American taxpayers who use offshore accounts to illegally reduce their tax liabilities have cost the Treasury billions of dollars.

But we recently learned about other consequences of the law from our American readers abroad.

The U.S. taxes its citizens no matter where they live, and counts as its citizens all persons born in the U.S. or born to citizens of the U.S., and requires that citizens living abroad file annual tax returns. According to the State Department in May 2013, 7.6 million U.S. citizens live abroad. This includes people who were born in the U.S. to non-citizen parents and people born overseas to U.S. citizens living abroad, even if they have not lived in the U.S. for decades, or ever. Many people did not know of their tax filing obligations to the U.S. until recently, when enforcement of the regulations was strengthened in response to efforts to clamp down on offshore evasion by U.S. taxpayers.
One reader wrote:

I am a "dual" citizen who is impacted by FATCA. If I could renounce or relinquish my U.S citizenship I would in a heartbeat, but I cannot afford to. I am in the middle class with a total family income of about $80,000 a year with 2 kids in post-secondary.

I moved to Canada when I was six, and at 18 became a Canadian citizen in 1980. I lived back for eight years in the states for school and work and then moved back to Canada full time in 1989.

I have zero ties to the U.S... except for my citizenship. However, if I were to renounce and have to [follow the rules requiring me to] be tax compliant for five years, according to my accountant it would cost me about $30,000 in penalties and $15,000 for his services. 

 Another wrote:

I moved to Canada to be close to my family, for better healthcare, and for a better job.  I am a teacher by profession, so you know I am not a fat cat…  I pay higher taxes now than I did in the US.

I am expatriating because of the compliance nightmare.  I can't afford a cross-border specialist, and I am fearful of what the IRS would do to me if I made a mistake.  The FBARs (Foreign Bank Account Reporting) are particularly taxing and intrusive.  

Imagine if you had to disclose every account you had over $10,000.  Oh, and I feel so safe handing over all of my banking information to the IRS...

Also, because certain things are not covered by that current US/Canada tax treaty, I can't properly save for retirement or my son's education.

I shall give you an example. In the US, I could open a 529B account to save for college.  Canada has a similar tax-deferred savings plan, called an RESP.  However, the US wants to tax any gains this account makes because it is considered a foreign investment account…. 

It is not foreign to me.  I live, work, and pay taxes in Canada, and I ought to be able to save for my son's college education. Being American makes me a second-class citizen in Canada.

 Ruth Anne Freeborn, a Canadian who has relinquished her U.S. citizenship, wrote:

It makes sense to have some way to catch those living in the U.S. and hiding money in the Cayman Islands. It makes sense to go after money launderers and drug lords. It does not make sense to lump in every expat family with the above sorts of people. That's what FATCA does. FATCA uses a sledgehammer to crack a nut.

The same penalties that apply to UBS and criminal drug lords have no business being applied to innocent expats, low and middle income who are not "off shoring" Our local banks down the street are not "offshore" to us. Off whose shore? We bank where we live the same as anyone else.

Most of the comments I received came from Canada, where the Isaac Brock Society web site provides data on relinquishment and renunciation of U.S. citizenship and advocates protest against the FATCA requirements. But comments posted on ICIJ’s blog also came from European residents.

From France, where Victoria Marie Ferauge blogs at The Franco-American Flophouse:

It's not the taxes, folks. Nor is it about being rich and wanting to get away with something. Middle-class Americans abroad are groaning under the weight of all those reporting requirements, our foreign spouses are not amused because their information has to go to the IRS along with ours and because our local banks (foreign to the US) are treating us like pariahs. For info I'm an unemployed IT professional living in France. I and others have been writing about this since 2011. I call it The American Diaspora Tax War of 2012-2013.

Another issue brought up by a fellow journalist in Canada is a discrepancy in the statistics on expatriations from the U.S. government agencies. Patrick Cain has covered this in the Global News and points out that the list in the Federal Register conflicts with statistics kept by the FBI.

I intend to follow up on this inquiry in upcoming postings.

 

European Parliament: Snowden Will Make Video Appearance

By Gregor Peter Schmitz

Leaders in the European Parliament have agreed to allow NSA whistleblower Edward Snowden to answer questions by video, despite efforts by some conservative parliamentarians to block the testimony out of fear it could further harm trans-Atlantic relations.

Parliamentary leaders of the European Parliament voted Thursday to allow the planned video appearance of the NSA whistleblower Edward Snowden to take place despite an attempt by conservative members of the European People's Party (EPP) to block it.

The American former intelligence contractor will answer questions that had been submitted by members of the parliament in a pre-recorded video message that will be shown at a sitting of the interior and justice committees.

"We now have a clear mandate to send written questions to Snowden, and I hope that he can answer this with a video message by mid-January," said Jan Philipp Albrecht, who, as a representative of the German Green Party in the European Parliament, is coordinating the body's NSA investigation. Snowden's video message was originally planned for Dec. 18, but the dispute over his questioning necessitated a postponement.
Snowden is expected to answer the questions on pre-recorded video because he would risk arrest by US authorities if he were to leave Russia, where he is living under temporary asylum. A live video feed could also enable the Americans to pinpoint his whereabouts.

Different Take
 
Axel Voss, a European Parliament representative from Germany's Christian Democratic Union (CDU), who has maintained that such a questioning could damage trans-Atlantic relations, sees the decision differently.

"The parliamentary group leaders and the president decided that an appearance by Edward Snowden should be live or interactive," he said. "The responsible representatives from the parliamentary groups will decide on the details in January."
The parliamentary groups have been tasked with checking to see if direct or interactive testimony would be possible. But Albrecht, the Green Party representative, says: "Both options have long been rejected for being impractical. Therefore, this will be quickly resolved and we can move on."

Representatives from different groups in the European Parliament have already compiled more than 20 questions for Snowden. These range from "How are you?" and "Can we help you?" to a detailed exploration of whether and how European intelligence agencies also collect private data.

Snowden already addressed the European Parliament once in September, but only in writing, and his statement was read aloud by a confidante. "These are not decisions that should be made for the people, but only by the people after full informed and fearless debate," the statement read, referring to discussions over civil rights within a democracy.

Washington, too, has been closely following the ongoing debate. Influential US Senator Dianne Feinstein of California wrote a letter to European Parliament representatives Elmar Brok and Claude Moraes, assuring them that the US is taking Europe's data-protection concerns seriously. It has been announced that a delegation of members of the US Congress will go to Brussels on Dec. 17 to discuss how to restore trust after the revelations of NSA surveillance of EU citizens.

President Barack Obama Weekly Address December 14, 2013 (Video/Trascript )

Weekly Address
The White House
December 14, 2013

One year ago today, a quiet, peaceful town was shattered by unspeakable violence.
Six dedicated school workers and 20 beautiful children were taken from our lives forever.

As parents, as Americans, the news filled us with grief.  Newtown is a town like so many of our hometowns.  The victims were educators and kids that could have been any of our own.  And our hearts were broken for the families that lost a piece of their heart; for the communities changed forever; for the survivors, so young, whose innocence was torn away far too soon.

But beneath the sadness, we also felt a sense of resolve – that these tragedies must end, and that to end them, we must change.

From the very beginning, our efforts were led by the parents of Newtown – men and women, impossibly brave, who stepped forward in the hopes that they might spare others their heartbreak.  And they were joined by millions of Americans – mothers and fathers; sisters and brothers – who refused to accept these acts of violence as somehow inevitable.

Over the past year, their voices have sustained us.  And their example has inspired us – to be better parents and better neighbors; to give our children everything they need to face the world without fear; to meet our responsibilities not just to our own families, but to our communities.  More than the tragedy itself, that’s how Newtown will be remembered.

And on this anniversary of a day we will never forget, that’s the example we should continue to follow.  Because we haven’t yet done enough to make our communities and our country safer.  We have to do more to keep dangerous people from getting their hands on a gun so easily.  We have to do more to heal troubled minds.  We have to do everything we can to protect our children from harm and make them feel loved, and valued, and cared for.

And as we do, we can’t lose sight of the fact that real change won’t come from Washington.  It will come the way it’s always come – from you.  From the American people.

As a nation, we can’t stop every act of violence.  We can’t heal every troubled mind.  But if we want to live in a country where we can go to work, send our kids to school, and walk our streets free from fear, we have to keep trying.  We have to keep caring.  We have to treat every child like they’re our child.  Like those in Sandy Hook, we must choose love.  And together, we must make a change.  Thank you

Identity and Exile (Video)

Al Jazeera's Matthew Cassel examines why so many American Jews defend Israeli policies regardless of the issue or cost.

 

Part One

Source: Al Jazeera

In the 19th and 20th centuries, millions of Jews migrated from Europe, Eastern Europe and Russia to the US, settling across the country's big cities including New York, Los Angeles and Chicago where they found opportunity and established strong communities. Those communities continued to grow in the subsequent decades as more Jews fled anti-Semitism across Europe.

A growing number of Jews also migrated to Palestine at the turn of the century, part of a nascent Zionist movement. Migration to Palestine increased after World War I. At the end of World War II, following the horrors of the holocaust, the state of Israel was created in what had previously been British-controlled Palestine. In the process, hundreds of thousands of Palestinians were forced to flee their homes, exiled into neighbouring countries and refugee camps.

The Israeli-Palestinian conflict over the land continues to this day. How does this contentious issue affect Judaism in the US? Why is there such strong support for Israel in the US irrespective of the issue or cost?

Al Jazeera's Matthew Cassel travels back to his native Chicago where he was raised Jewish. He talks to local rabbis, friends and family about why so many in the Jewish-American community believe it is important to maintain support for Israel … no matter what.

And he travels back to Palestine to retrace his steps as a young man. At that time, during the second Intifada, he was shocked to discover the impact Israeli policies were having on Palestinians.

He tries to understand how Jewish religious beliefs have turned into a political cause that he does not agree with - but that the US actively accepts and supports.

Part Two

Edward Snowden: MEPs vote to invite ex-NSA contractor to testify

Opposition from conservatives fails to derail vote on inviting Snowden to hearing, which could take place as early as January

 Source: The Guardian 

The European parliament has voted to formally invite Edward Snowden to give testimony on NSA spying, despite opposition from conservative MEPs. If the US whistleblower provides answers to the questions compiled by parliamentarians in time, a hearing via video link could take place in early January.

It had looked on Wednesday as if European conservatives were trying to kick the hearing into the long grass. The European People's party (EPP), the alliance of centre-right parties, had raised a number of concerns about inviting Snowden for a hearing, noting that it could endanger the transatlantic trade agreement with the US.

But on Thursday morning, the leaders of the main political groupings in the European parliament voted to invite Snowden. In the coming weeks, questions will be compiled and then forwarded to the former NSA contractor's lawyer, with roughly two questions coming from each political group.

Labour MEP Claude Moraes, the lead rapporteur for the European parliament inquiry on the mass surveillance of EU citizens, welcomed the outcome of the vote and promised that questioning would be "rigorous and fair".

"Amongst the questions I will ask Mr Snowden," Moraes said, "will be why he decided to reveal the information and the consequences and implications of his actions; questions around his current situation in Russia; questions around his opinion on the impact of his revelations on security, the intelligence services, and 'the right to know'; questions around his opinions of where his revelations and allegations take the area of mass surveillance in the future."

The European parliament hopes to create an interactive situation for the hearing, where MEPs can interview Snowden in real time. However, as there are some concerns that a live linkup might allow the NSA to pinpoint Snowden's location, answers may end up having to be pre-recorded.

The British Conservative party, which is not part of the EPP, had clearly stated its opposition to inviting Snowden at the end of last week.

Conservative MEP Timothy Kirkhope had described the invitation as "a provocative act" which would "endanger public security around Europe and beyond".

Budget deal leaves out the jobless

By Suzy Khimm

Democrats are making an eleventh-hour push to attach an extension of federal jobless benefits to the budget agreement, hoping to keep 1.3 million Americans from losing their unemployment checks at the end of the year.

House Republicans are planning to vote Thursday on the budget framework proposed by Rep. Paul Ryan and Sen. Patty Murray, which does not include jobless aid. Democrats will make a last-ditch attempt to attach an extension to the budget agreement when the House Rules Committee meets Wednesday afternoon to prepare the budget bill for Thursday’s vote, according to a Democratic aide.

The effort is unlikely to succeed, given the Republicans’ control of the committee, but Democrats say they’ll consider every possible avenue to extend the aid and pressure GOP members for a one-year extension, which would cost an estimated $25 billion. Currently, the only mention of jobless aid in the Ryan-Murray deal is a provision to recover overpayments “because of fraud or failure to report earnings.”

“Pressure from Democrats, local media and millions of families throughout the country is only going to intensify. This would have a very harmful, tangible impact in communities all throughout the country. We will only continue to make that clear moving forward,” says Josh Drobnyk, Democratic spokesman for the House Ways and Means Committee. Democratic aides point out that the expiring jobless aid has made the front page of local papers across the country, including in Ryan’s home district in Wisconsin.

Democrats says they’d welcome a stand-alone bill to extend unemployment, but that would require the House GOP leadership to bring the legislation up for a vote. But Senate Majority Leader Harry Reid seems resigned to the fact that an extension won’t happen before 2014. “Extension of unemployment insurance should have been a part of the deal. I’ll push for an extension when Senate convenes after the New Year,” Reid tweeted.

Aside from a few outliers like Rep. Joe Heck (R-NV) and Rep. Chris Gibson (R-NY), most Republicans stand firmly opposed to an extension.  ”You’re causing them to become part of this perpetual unemployed group in our economy,” Sen. Rand Paul said on Sunday.
Speaker John Boehner says he is open to proposals for more jobless aid, but he says that Democratic offers haven’t been acceptable so far. “When the White House finally called me last Friday about extending unemployment benefits, I said that we would clearly consider it as long as it’s paid for and as long as there are other efforts that’ll help get our economy moving once again,” he told reporters on Wednesday. “I have not seen a plan from the White House that meets those standards.”

Advocates for the unemployed say they’re not surprised by the difficulties they’re facing on Capitol Hill. “We’ve known from the beginning this was going to be an uphill battle,” says Judy Conti, federal advocacy coordinator for the National Employment Law Project.
And there is one fallback solution for Democrats if Congress doesn’t act before the end of the year: Unemployment benefits can be restored retroactively, as they were in 2010.

Are the poor getting poorer?

Source: The Guardian
Robert Joyce

Are the poor better or worse off than they used to be? It's a divisive question for the public and an even clearer fault line for British politicians. We take a look at three sets of numbers to find out

Whether they're saying the economy is coming out of recession or going into recovery, British politicians know how important it is to show that the benefits are getting spread around. That's why 'the poor' often come up in policy, finger pointing and the press.
There are basically two camps. In the (metaphorical) red corner, are those that claim the poor are getting poorer either because income is increasingly concentrated in the hands of the few or because standards of living are getting worse for those with the least money - or both.

In total contradiction, there are those that say the poor are getting richer because we live in a country where income doesn't just go to the richest. One reader, Ed Woods, got in touch with Reality Check and asked "can you tell us who is telling fibs?"
Is there a right or wrong answer here or is the data just open to interpretation? We look at three different indicators of poverty to see what we find.

Chart 1: Real incomes
Most people have seen their incomes rise. But not everyone - some of the poorest people have seen them fall. This chart is a bit tricky to understand at first but use these quick tips and you should be able to see the trends for yourself.

First, imagine taking everyone in the UK, finding out how much they earn and then splitting them up into one hundred different groups. The group with the lowest income would be but in the first 'percentile', the group with the second lowest incomes would be in the second percentile and so on all the way up to the 99^th percentile - they're the group that earns the most.

This chart shows how income for each of those 100 groups changed between 1980 and 2012. So, at the far left, you can see what has happened to incomes for the poorest 1% of the UK population (their incomes have fallen by about 1%) and at the far right, you can see that incomes for the richest 1% of the UK population have risen by about 3%.
But you can also see how circumstances matter. Even the poorest pensioners have seen their real incomes rise since 1978 - but the same isn't true for others who have seen the biggest drop in their incomes. Since pensioners as a group make up a far smaller fraction of the population than families or childless individuals, that drop in income for the poor is particularly important.

Graph: The Institute for Fiscal Studies

Conclusion 1: The poorest have got poorer

Chart 2: Standards of living

There is more to poverty than just income. But the UK is a developed country so it doesn't make sense to use things like hunger as a measure of how the lives of the poorest are changing.
The UK government (along with most others in the EU) monitors something called 'severe material deprivation' which is when someone can't afford at least four of the basics shown in the chart below - and as the chart shows, more people are unable to afford things like heating and mortgage payments.


Conclusion 2: Fewer poor people can afford the basics

Chart 3: Policy change

If this article is supposed to say anything about the impact of the coalition, it doesn't say much since some of the data stretches far back and it ends around 2011. So how are the changes to tax and benefit reforms likely to affect the poor?
Remember those one hundred groups mentioned above? Now put them back together again and split up the population into ten groups instead. Now you'll see that the poorest 10% of the UK stand to lose around 4.3% of their income as a direct consequence of the direct tax and benefit reforms either already introduced or planned between April 2012 and April 2015. The richest 20% of the UK will see their incomes rise by 1%.

Graph: The Institute for Fiscal Studies 

Conclusion 3: The poor are likely to get poorer

An inconvenient truth?

When Charlie Elphicke MP wrote a passionate article in the Telegraph titled 'An inconvenient truth for Ed: the poor are getting richer' he used data too. And his evidence does point to the poorest individuals in society receiving the largest boost in income. Does that mean that our conclusions so far are wrong?

Hidden disaster in new budget: Demonic plot to raid pensions

What you won't hear about this new deal: Public workers will get eviscerated, to achieve "deficit reduction"

David Dayen

2013 has not been a pleasant year if you work for the federal government. You’ve been subject to pay freezes, furloughs and shutdowns. One of you got yelled at by a Tea Party Republican at the World War II memorial. And if Congress passes the budget deal announced Tuesday night by Rep. Paul Ryan and Sen. Patty Murray – a big if – you will get a final Christmas present: You’ll have to pay more into your pension, an effective wage cut that just adds to the $114 billion, with a “B,” federal employees have already given back to the government in the name of deficit reduction.

The deal between House and Senate negotiators Ryan and Murray would reverse part of sequestration for 2014 and 2015, itself a major source of pain for federal workers. But negotiators want to pay for that relief in future years, with the overall package cutting the deficit by an additional $23 billion. And one of the major “pay-fors” is an increase in federal employee pension contributions. President Obama’s 2014 budget included such a proposal, which would have raised the employee contribution in three stages, from 0.8 percent of salary to 2 percent. Congress had already made this shift for new hires; the Obama proposal would affect all workers hired before 2012.

That proposed increased contribution translated to a 1.2 percent pay cut, and a total of around $20 billion in givebacks over 10 years. Negotiators were pressured by the powerful Maryland Democratic delegation, including Minority Leader Steny Hoyer, House Budget Committee ranking member Chris Van Hollen and Senate Appropriations Committee chairwoman Barbara Mikulski, into softening the blow on federal employees, many of whom live in their districts. According to Sen. Murray, the increase in contributions now equals about $6 billion over 10 years. But negotiators traded some of the cuts to federal employee pensions with different cuts to military pensions, also totaling $6 billion. So whatever the occupation, people who work for the government will bear the brunt of the pain.

A small pay cut doesn’t sound like much. But you have to add that to the pile of hits federal workers have taken over the past several years. Government pay has been frozen since January 2010. The only way you’ve gotten a raise over the last four years if you work for the government is if you received a promotion or a similar advance. The Congressional Budget Office estimates that this has reduced the purchasing power of a government salary by over 7 percent since 2010. The deal to avoid the government shutdown in October finally broke this fever with a 1 percent pay raise starting in January. This budget deal would wipe much of that out.

Pay freezes are just the beginning. In February, hundreds of thousands of federal workers were forced into unpaid furloughs in accordance with sequestration’s across-the-board budget cuts. In virtually every federal agency, workers had to take as many as 15 unpaid days off during the last fiscal year. Then, when the government shutdown occurred, workers were again sent home without knowing if they would ever get paid for the missed time. The lack of cash flow stressed workers and made it difficult to pay bills on time. Fortunately, Congress did provide back pay for the 6.6 million work days missed during the shutdown. However, that comes out of agency budgets, and workers have to still complete their tasks without the ability to hire additional personnel to make up the time.

The Federal Workers Alliance, a coalition of unions representing federal employees, estimated in a message to the budget negotiators that between the pay freeze and furloughs, federal employees have sacrificed $114 billion in pay cuts over the past three years, an average of over $50,000 per employee. Yet somehow, budget negotiators are going to the well again.

It’s notable that this attack targets public pensions, which have been under assault all over the country. Last week, a federal bankruptcy judge allowed Detroit to enter bankruptcy and impair pensions for city workers and retirees, and Illinois passed a sweeping law that would cut pensions significantly. Both of those states have constitutional protections preventing cuts to pensions, but no matter. Now, under the proposed budget deal, federal pensions would be subject to higher employee contributions. The Federal Workers Alliance notes that the average annual pension benefit for federal employees is just $12,800 per year. The proposed increased costs amount to close to hundreds of dollars a year in lost take-home pay without any increase to that meager benefit. Moreover, they represent a weakening of public pensions generally, at a time when the loss of pensions in the private sector, in favor of shaky 401(k)-style plans, has contributed to a retirement crisis. The threat to a dignified end of life is now coming to government workers, who explicitly forgo wages in exchange for the promise of a modest retirement benefit.

Sequestration in 2014 was scheduled to squeeze agency budgets even more. The budget cuts are larger, particularly on the military side. Cuts from 2013 sequestration have not been fully implemented, and agencies were able to shuffle around money to lessen the pain in ways that would not be available to them next year. All this means that a full sequestration in 2014 would have, in all likelihood, lead to layoffs. Now, just as Congress closes in on limited relief from sequestration, workers are told they’ll have to pay for some of that relief themselves.

You could probably find some federal workers to blame for the economic predicament in which we find ourselves, but those would be members of Congress. By contrast, federal employees, who inspect our food, work in veterans hospitals, investigate crimes at the FBI and generally ensure the smooth functioning of essential government services, have been blasted over and over again, as if their pay and benefits packages are a cookie jar to be repeatedly raided by Congress. This has led to terrible morale for federal workers, and a difficulty in finding and recruiting new talent. Federal retirements have risen as workers cash out rather than subject themselves to more stings. If you wanted to devalue the role of government from the inside out, what we’ve done to federal employees over the past few years would be the perfect blueprint.

President Obama just gave a speech highlighting inequality as “the defining challenge of our time.” If he signs a budget deal that knocks federal employees once again, he will have contributed to the continued hollowing out of the middle class, which after all is one of the biggest causes of inequality. If you cannot secure the promise of a decent living and an honest retirement even by working for the government, then there’s little hope that we can arrest this growing split between the ultra-rich and everybody else.

Fourteen Propaganda Techniques Fox "News" Uses to Brainwash Americans

By Dr Cynthia Boaz, Truthout | News Analysis 

There is nothing more sacred to the maintenance of democracy than a free press. Access to comprehensive, accurate and quality information is essential to the manifestation of Socratic citizenship - the society characterized by a civically engaged, well-informed and socially invested populace. Thus, to the degree that access to quality information is willfully or unintentionally obstructed, democracy itself is degraded.

It is ironic that in the era of 24-hour cable news networks and "reality" programming, the news-to-fluff ratio and overall veracity of information has declined precipitously. Take the fact Americans now spend on average about 50 hours a week using various forms of media, while at the same time cultural literacy levels hover just above the gutter. Not only does mainstream media now tolerate gross misrepresentations of fact and history by public figures (highlighted most recently by Sarah Palin's ludicrous depiction of Paul Revere's ride), but many media actually legitimize these displays. Pause for a moment and ask yourself what it means that the world's largest, most profitable and most popular news channel passes off as fact every whim, impulse and outrageously incompetent analysis of its so-called reporters. How did we get here? Take the enormous amount of misinformation that is taken for truth by Fox audiences: the belief that Saddam Hussein had weapons of mass destruction (WMD) and that he was in on 9/11, the belief that climate change isn't real and/or man-made, the belief that Barack Obama is Muslim and wasn't born in the United States, the insistence that all Arabs are Muslim and all Muslims are terrorists, the inexplicable perceptions that immigrants are both too lazy to work and are about to steal your job. All of these claims are demonstrably false, yet Fox News viewers will maintain their veracity with incredible zeal. Why? Is it simply that we have lost our respect for knowledge?

My curiosity about this question compelled me to sit down and document the most oft-used methods by which willful ignorance has been turned into dogma by Fox News and other propagandists disguised as media. The techniques I identify here also help to explain the simultaneously powerful identification the Fox media audience has with the network, as well as their ardent, reflexive defenses of it.

The good news is that the more conscious you are of these techniques, the less likely they are to work on you. The bad news is that those reading this article are probably the least in need in of it.

1. Panic Mongering. This goes one step beyond simple fear mongering. With panic mongering, there is never a break from the fear. The idea is to terrify and terrorize the audience during every waking moment. From Muslims to swine flu to recession to homosexuals to immigrants to the rapture itself, the belief over at Fox seems to be that if your fight-or-flight reflexes aren't activated, you aren't alive. This of course raises the question: why terrorize your own audience? Because it is the fastest way to bypasses the rational brain. In other words, when people are afraid, they don't think rationally. And when they can't think rationally, they'll believe anything.

2. Character Assassination/Ad Hominem. Fox does not like to waste time debating the idea. Instead, they prefer a quicker route to dispensing with their opponents: go after the person's credibility, motives, intelligence, character, or, if necessary, sanity. No category of character assassination is off the table and no offense is beneath them. Fox and like-minded media figures also use ad hominem attacks not just against individuals, but entire categories of people in an effort to discredit the ideas of every person who is seen to fall into that category, e.g. "liberals," "hippies," "progressives" etc. This form of argument - if it can be called that - leaves no room for genuine debate over ideas, so by definition, it is undemocratic. Not to mention just plain crass.

3. Projection/Flipping. This one is frustrating for the viewer who is trying to actually follow the argument. It involves taking whatever underhanded tactic you're using and then accusing your opponent of doing it to you first. We see this frequently in the immigration discussion, where anti-racists are accused of racism, or in the climate change debate, where those who argue for human causes of the phenomenon are accused of not having science or facts on their side. It's often called upon when the media host finds themselves on the ropes in the debate.

4. Rewriting History. This is another way of saying that propagandists make the facts fit their worldview. The Downing Street Memos on the Iraq war were a classic example of this on a massive scale, but it happens daily and over smaller issues as well. A recent case in point is Palin's mangling of the Paul Revere ride, which Fox reporters have bent over backward to validate. Why lie about the historical facts, even when they can be demonstrated to be false? Well, because dogmatic minds actually find it easier to reject reality than to update their viewpoints. They will literally rewrite history if it serves their interests. And they'll often speak with such authority that the casual viewer will be tempted to question what they knew as fact.

5. Scapegoating/Othering. This works best when people feel insecure or scared. It's technically a form of both fear mongering and diversion, but it is so pervasive that it deserves its own category. The simple idea is that if you can find a group to blame for social or economic problems, you can then go on to a) justify violence/dehumanization of them, and b) subvert responsibility for any harm that may befall them as a result.

6. Conflating Violence With Power and Opposition to Violence With Weakness. This is more of what I'd call a "meta-frame" (a deeply held belief) than a media technique, but it is manifested in the ways news is reported constantly. For example, terms like "show of strength" are often used to describe acts of repression, such as those by the Iranian regime against the protesters in the summer of 2009. There are several concerning consequences of this form of conflation. First, it has the potential to make people feel falsely emboldened by shows of force - it can turn wars into sporting events. Secondly, especially in the context of American politics, displays of violence - whether manifested in war or debates about the Second Amendment - are seen as noble and (in an especially surreal irony) moral. Violence become synonymous with power, patriotism and piety.

7. Bullying. This is a favorite technique of several Fox commentators. That it continues to be employed demonstrates that it seems to have some efficacy. Bullying and yelling works best on people who come to the conversation with a lack of confidence, either in themselves or their grasp of the subject being discussed. The bully exploits this lack of confidence by berating the guest into submission or compliance. Often, less self-possessed people will feel shame and anxiety when being berated and the quickest way to end the immediate discomfort is to cede authority to the bully. The bully is then able to interpret that as a "win."

8. Confusion. As with the preceding technique, this one works best on an audience that is less confident and self-possessed. The idea is to deliberately confuse the argument, but insist that the logic is airtight and imply that anyone who disagrees is either too dumb or too fanatical to follow along. Less independent minds will interpret the confusion technique as a form of sophisticated thinking, thereby giving the user's claims veracity in the viewer's mind.

9. Populism. This is especially popular in election years. The speakers identifies themselves as one of "the people" and the target of their ire as an enemy of the people. The opponent is always "elitist" or a "bureaucrat" or a "government insider" or some other category that is not the people. The idea is to make the opponent harder to relate to and harder to empathize with. It often goes hand in hand with scapegoating. A common logical fallacy with populism bias when used by the right is that accused "elitists" are almost always liberals - a category of political actors who, by definition, advocate for non-elite groups.

10. Invoking the Christian God. This is similar to othering and populism. With morality politics, the idea is to declare yourself and your allies as patriots, Christians and "real Americans" (those are inseparable categories in this line of thinking) and anyone who challenges them as not. Basically, God loves Fox and Republicans and America. And hates taxes and anyone who doesn't love those other three things. Because the speaker has been benedicted by God to speak on behalf of all Americans, any challenge is perceived as immoral. It's a cheap and easy technique used by all totalitarian entities from states to cults.

11. Saturation. There are three components to effective saturation: being repetitive, being ubiquitous and being consistent. The message must be repeated cover and over, it must be everywhere and it must be shared across commentators: e.g. "Saddam has WMD." Veracity and hard data have no relationship to the efficacy of saturation. There is a psychological effect of being exposed to the same message over and over, regardless of whether it's true or if it even makes sense, e.g., "Barack Obama wasn't born in the United States." If something is said enough times, by enough people, many will come to accept it as truth. Another example is Fox's own slogan of "Fair and Balanced."

12. Disparaging Education. There is an emerging and disturbing lack of reverence for education and intellectualism in many mainstream media discourses. In fact, in some circles (e.g. Fox), higher education is often disparaged as elitist. Having a university credential is perceived by these folks as not a sign of credibility, but of a lack of it. In fact, among some commentators, evidence of intellectual prowess is treated snidely and as anti-American. Education and other evidence of being trained in critical thinking are direct threats to a hive-mind mentality, which is why they are so viscerally demeaned.

13. Guilt by Association. This is a favorite of Glenn Beck and Andrew Breitbart, both of whom have used it to decimate the careers and lives of many good people. Here's how it works: if your cousin's college roommate's uncle's ex-wife attended a dinner party back in 1984 with Gorbachev's niece's ex-boyfriend's sister, then you, by extension are a communist set on destroying America. Period.

14. Diversion. This is where, when on the ropes, the media commentator suddenly takes the debate in a weird but predictable direction to avoid accountability. This is the point in the discussion where most Fox anchors start comparing the opponent to Saul Alinsky or invoking ACORN or Media Matters, in a desperate attempt to win through guilt by association. Or they'll talk about wanting to focus on "moving forward," as though by analyzing the current state of things or God forbid, how we got to this state of things, you have no regard for the future. Any attempt to bring the discussion back to the issue at hand will likely be called deflection, an ironic use of the technique of projection/flipping.

In debating some of these tactics with colleagues and friends, I have also noticed that the Fox viewership seems to be marked by a sort of collective personality disorder whereby the viewer feels almost as though they've been let into a secret society. Something about their affiliation with the network makes them feel privileged and this affinity is likely what drives the viewers to defend the network so vehemently. They seem to identify with it at a core level, because it tells them they are special and privy to something the rest of us don't have. It's akin to the loyalty one feels by being let into a private club or a gang. That effect is also likely to make the propaganda more powerful, because it goes mostly unquestioned.

In considering these tactics and their possible effects on American public discourse, it is important to note that historically, those who've genuinely accessed truth have never berated those who did not. You don't get honored by history when you beat up your opponent: look at Martin Luther King Jr., Robert Kennedy, Abraham Lincoln. These men did not find the need to engage in othering, ad homeinum attacks, guilt by association or bullying. This is because when a person has accessed a truth, they are not threatened by the opposing views of others. This reality reveals the righteous indignation of people like Glenn Beck, Bill O'Reilly and Sean Hannity as a symptom of untruth. These individuals are hostile and angry precisely because they don't feel confident in their own veracity. And in general, the more someone is losing their temper in a debate and the more intolerant they are of listening to others, the more you can be certain they do not know what they're talking about.

One final observation. Fox audiences, birthers and Tea Partiers often defend their arguments by pointing to the fact that a lot of people share the same perceptions. This is a reasonable point to the extent that Murdoch's News Corporation reaches a far larger audience than any other single media outlet. But, the fact that a lot of people believe something is not necessarily a sign that it's true; it's just a sign that it's been effectively marketed.

As honest, fair and truly intellectual debate degrades before the eyes of the global media audience, the quality of American democracy degrades along with it.