Constitution in Crisis, Candidates in Denial

by John Nichols

Constitution Day has arrived without major statements from Democrat Barack Obama or Republican John McCain on the need to restore this country's commitment to the rule of law.

In contrast, independent presidential candidate Ralph Nader's campaign produced a video statement detailing his commitment to constitutional renewal.

Here's Nader's video, in which he says, "You and I cannot turn our backs on the Constitution, as the two parties have done."

Even more powerful is the statement made by Senator Russ Feingold, the Wisconsin Democrat who chairs the Senate Judiciary Committee's Constitution subcommittee, at the opening of Tuesday's hearing -- which Obama and McCain should have attended -- on how to repair the damage done by the Bush-Cheney administration to the system of checks and balances and our fundamental liberties.

Decrying the administration's record as a "shameful legacy that will haunt our country for years to come," Feingold declared that America needs to "get started right away on this immense and extremely important job of restoring the rule of law."

The Wisconsinite pondered seeking the Democratic nomination for the presidency this year but instead backed Barack Obama.

Would that Obama was speaking up as Feingold is on the Constitution.

Here's the Constitution subcommittee chair said in his call to action:

 
Tomorrow, September 17, is the 221st anniversary of the day in 1787 when 39 members of the Constitutional Convention signed the Constitution in Philadelphia. It is a sad fact as we approach that anniversary that for the past seven and a half years, and especially since 9/11, the Bush Administration has treated the Constitution and the rule of law with a disrespect never before seen in the history of this country. By now, the public can be excused for being almost numb to new revelations of government wrongdoing and overreaching. The catalogue is breathtaking, even when immensely complicated and far reaching programs and events are reduced to simple catch phrases: torture, Guantanamo, ignoring the Geneva Conventions, warrantless wiretapping, data mining, destruction of emails, U.S. Attorney firings, stonewalling of congressional oversight, abuse of the state secrets doctrine and executive privilege, secret abrogation of executive orders, signing statements. This is a shameful legacy that will haunt our country for years to come.

There can be no dispute that the rule of law is central to our democracy and our system of government. But what does ‘the rule of law' really mean? Well, as Thomas Paine said in 1776: ‘In America, the law is king.' That, of course, was a truly revolutionary concept at a time when the King, quite literally, was the law.

Over 200 years later, we still must struggle to fulfill Paine's simply stated vision. It is not always easy, nor is it something that once done need not be carefully maintained. Justice Frankfurter wrote that law:

is an enveloping and permeating habituation of behavior, reflecting the counsels of reason on the part of those entrusted with power in reconciling the pressures of conflicting interests. Once we conceive ‘the rule of law' as embracing the whole range of presuppositions on which government is conducted . . ., the relevant question is not, has it been achieved, but, is it conscientiously and systematically pursued.

The post-September 11th period is not, of course, the first time that events have caused great stress for the checks and balances of our system of government. As Berkeley law professors Daniel Farber and Anne Joseph O'Connell write in testimony submitted for this hearing: ‘The greatest constitutional crisis in our history came with the Civil War, which tested the nature of the Union, the scope of presidential power, and the extent of liberty that can survive in war time.' But as legal scholar Louis Fisher of the Library of Congress describes in his testimony, President Lincoln pursued a much different approach than our current President when he believed he needed to act in an extra-constitutional manner to save the Union. He acted openly, and sought Congress's participation and ultimately approval of his actions. According to Dr. Fisher:

[Lincoln] took actions we are all familiar with, including withdrawing funds from the Treasury without an appropriation, calling up the troops, placing a blockade on the South, and suspending the writ of habeas corpus. In ordering those actions, Lincoln never claimed to be acting legally or constitutionally and never argued that Article II somehow allowed him to do what he did. Instead, Lincoln admitted to exceeding the constitutional boundaries of his office and therefore needed the sanction of Congress.... He recognized that the superior lawmaking body was Congress, not the President.

Each era brings its own challenges to the conscientious and systematic pursuit of the rule of law. How the leaders of our government respond to those challenges at the time they occur is, of course, critical. But recognizing that leaders do not always perform perfectly, that not every President is an Abraham Lincoln, the years that follow a crisis are perhaps even more important. And soon, this Administration will be over. So the obvious question is: ‘Where do we go from here?' I believe that one of the most important things that the next President must do, whoever he may be, is take immediate and concrete steps to restore the rule of law in this country. He must make sure that the excesses of this Administration don't become so ingrained in our system that they change the very notion of what the law is.

That, of course, is much easier said than done. It's not simply a matter of a new President saying, ‘Ok, I won't do that anymore.' This President's transgressions are so deep and the damage to our system of government so extensive that a concerted effort from the executive and legislative branches will be needed. And that means the new President will, in some respects, have to go against his institutional interests.

That is why I called this hearing - to hear from legal and historical experts on how the next President should go about tackling the wreckage that this President will leave. I've asked our two panels of experts who will testify to be forward-looking - to not only review what has gone wrong in the past seven or eight years, but to address very specifically what needs to be set right starting next year and how to go about doing it.

In addition to the testimony of the witnesses here today, I solicited written testimony from advocates, law professors, historians and other experts. So far we have received nearly two dozen submissions from a host of national groups and distinguished individuals. I want to thank each and every person who made the effort to prepare testimony for this hearing. You have done the country a real service.

All of this testimony will be included in the written record of the hearing, which I plan to present to the incoming Administration. The submissions we have received so far can be seen on my website at feingold.senate.gov. I hope that many of these recommendations, along with the testimony we will hear today, will serve as a blueprint for the new President so that he can get started right away on this immense and extremely important job of restoring the rule of law.

http://www.thenation.com/blogs/thebeat/361506/constitution_in_crisis_candidates_in_denial

Hope for a Constitution Under Siege

by Nancy Hopkins

Americans celebrate Constitution Day today. Although it's not an occasion marked by a day off work or self-induced food comas, it quite literally defines us as Americans.

On Sept. 17, 1787, statesmen such as George Washington, James Madison and Benjamin Franklin signed the document that forms the basis of our government. But Constitution Day is not about those men or that day. It is about the rights and freedoms we enjoy every day we go to work, play with our kids, or complain about the government.

Most Americans know about the steaming hot summer of 1787 in Philadelphia and about the raging debates among the statesmen assembled there. But this is where memory fades and the story ends for most Americans.

The founders, however, recognized that the Constitution did not represent an end. To them, that summer in Philadelphia symbolized a beginning.

Over the last two centuries, activism, dissent and dedication have gradually but inexorably expanded the scope and depth of our liberty. We are without a doubt more free than our forebears.

But for the last seven years, the principles this day celebrates and the freedoms our Constitution enshrines and protects have been under siege. The government has grown more powerful, secretive and threatening.

During the course of his time in office, President Bush has, among other things:

Spied on American citizens without the approval of Congress or the courts.

Allowed the CIA to torture and abuse hundreds of people, including Americans, in secret prisons throughout the world.

Insisted that he, and he alone, has the power to declare people to be "enemy combatants" and hold them indefinitely, without charges.

Added millions of Americans to the "no-fly" list without an explanation or a meaningful opportunity to appeal.

Prevented doctors from offering patients comprehensive and accurate information about their reproductive health.

Constitution Day, unlike other holidays, looks to the future - to what our country can be. It challenges us to continually push forward the limits of liberty and freedom.

With a new presidential administration beginning just four short months from now, we have an opportunity to undo the sustained damage inflicted upon our Constitution by the current one.

And this week, 221 years after Washington, Madison and Franklin did, we have an obligation to look to the future and envision what the United States of America should be.

http://www.philly.com/inquirer/opinion/20080917_Hope_for_a_Constitution_under_siege.html

ACLU Launches Constitution Voter Campaign To Restore Lost Liberties In ‘08

- September 17 - The American Civil Liberties Union launched a new campaign asking Americans to pledge to be Constitution Voters. The "I'm a Constitution Voter" campaign is a nonpartisan initiative to encourage activists to let candidates - including those running for president - know that the Constitution will be the first thing on their minds when they step into the polling booth this November. In addition to asking voters to sign a pledge to help make the Constitution a central issue in this campaign season, ACLU affiliates from coast to coast are holding events to commemorate Constitution Day and educate people about the rights and freedoms the Constitution protects.

"The next president will have the power to piece back together our Constitution after eight years in which it has been torn apart. Whoever is elected president must act with energy and conviction to restore our lost liberties, end torture and hold accountable those who have broken the law," said Anthony D. Romero, Executive Director of the ACLU. "By pledging to be a Constitution Voter, you can make sure that the next president will be committed to restoring the Constitution and the fundamental freedoms it protects. When we step into the ballot box this November, our leaders need to know that we care about our liberty. We want the next president to uphold the law - not try to subvert it." 

The pledges will be delivered to the presidential candidates. The pledge, to be signed by Constitution Voters, includes the following statements:
I believe that no one - not even the president - is above the law.
I oppose all forms of torture, and I support closing the Guantánamo Bay prison, shutting down the military commissions, and ending indefinite detention.
I oppose warrantless spying.
I believe that government officials, no matter how high-ranking, should be held accountable for breaking the law and violating the Constitution.
I believe that the Constitution protects every person's rights equally - no matter what they believe, how they live, where or if they worship, and whom they love.
I reject the notion that we have to tolerate violations of our most fundamental rights in the name of fighting terrorism.
I am deeply committed to the Constitution and expect our country's leaders to act on that commitment - every day, without fail.

Day One: Stop Torture, Close Guantánamo, End Extraordinary Renditions

"The next president will have an historic opportunity to restore the Constitution and the rule of law," said Caroline Fredrickson, director of the ACLU Washington Legislative Office "Every executive order issued by President Bush can be reversed by the executive orders of our next president - with the stroke of a pen, on day one."

On his first day in office, the next president should:
Ban the use of torture by the government, without exception.
Close the Guantánamo Bay prison, shut down the military commissions and either try the detainees in criminal court or under the Uniform Code of Military Justice. If they can't be tried in established American courts, they should be sent to countries where they won't be tortured or held without charge.
End the practice of extraordinary rendition - kidnapping people and sending them to countries where they are likely to be tortured.

The First 100 Days

"The first 100 days of any new administration is crucial," said Fredrickson. "The new president needs to hit the ground running."

The following are the things the next president should do within his first 100 days in office:

End warrantless spying Restore critical constitutional checks and balances when our government wants to spy on Americans.

Review watch lists Order the government's watch lists to be completely reviewed within three months, and the names on the lists be limited to those who would do us harm.

Encourage the freedom of information Rescind the "Ashcroft Doctrine," which encourages agencies to withhold records requested under the Freedom of Information Act.

Stop monitoring of activists Direct the attorney general and other relevant agency heads to end government monitoring of political activists.

Enforce civil rights laws Order the Department of Justice's Civil Rights Division to enforce civil rights laws.

Suspend Real ID Act Direct the secretary of homeland security to suspend the regulations for the Real ID Act pending a congressional review.

Ban sexual orientation discrimination Prohibit discrimination against LGBT workers employed by the federal government.

Halt the death penalty Implement a federal death penalty moratorium until its inherent racial disparities are addressed.

Monitor "faith-based initiatives" Ensure that no one endures religious discrimination when applying for a job or receiving services funded by the government.

These changes will happen only if we elect a president who is committed to restoring the Constitution and the rule of law.

Go to www.aclu.org/constitutionvoter to sign our pledge and let the candidates running for office know that in this election, you are voting for the Constitution.

Visit www.aclu.org for more information on Constitutional issues, to sign the pledge and to find organizing resources and toolkits.

Visit http://www.youtube.com/watch?v=Kh-SaU8DzoY for a new ACLU video celebrating Constitution Day.

http://www.commondreams.org/newswire/2008/09/17-2

BORDC Issues the 'War on Terror' and the Constitution

NORTHAMPTON, Mass. - September 17 - "The ‘War on Terror' and The Constitution," a new booklet by the Bill of Rights Defense Committee (BORDC), is a concise summary of how key anti-terrorism laws and policies enacted since September 11, 2001, affect Americans' constitutional rights.  The new laws are organized into chapters corresponding to sections of the U.S. Constitution and articles of the Bill of Rights.  Stories in each chapter show how the lives of innocent Americans and foreign detainees have been affected.  BORDC is issuing the 24-page booklet on Constitution Day, the 220th anniversary of the U.S. Constitution.

Nancy Talanian, BORDC's director and the booklet's author, sees the booklet as a roadmap to show Americans the current status of their rights and liberties compared to where they should be according to the Constitution.  "Armed with that knowledge," she said, "they can work with one another and with their legislators to restore the essential rights they have come to expect."

Nat Hentoff, a nationally recognized authority on the Bill of Rights, agrees.  "No matter who the next president is or what the composition of the next Congress is," he said, "the extent and the depth of what the Bush administration has done to the Constitution and to our standing in the world will remain unless and until enough Americans know how much remains to be done-and this booklet by the Bill of Rights Defense Committee provides the basic tools with which the citizenry can begin to act to make this America again."

According to Talanian, "We now have substantial proof that human failures within our government, not the laws and policies in place prior to September 11, 2001, contributed to the terrorist attacks on that day.  Furthermore, no proof has been offered to substantiate executive branch claims that new laws and policies such as the USA PATRIOT Act have made this country safer.  One could argue that the government is wasting resources prying into the lives of innocent people and storing millions of their private records in databases and treating potentially all of us as terrorism suspects."

"The ‘War on Terror' and the Constitution" (24 pages, $3.00) is available from the Bill of Rights Defense Committee at http://www.bordc.org/store.php.  Download the booklet (PDF, 6.7 MB) at http://www.bordc.org/resources/war_on_terror.pdf.

In 2002, BORDC spearheaded a nationwide campaign that put city, county, and state governments on record for upholding their residents' constitutional rights. The passage of eight statewide resolutions and more than 400 local resolutions and ordinances led Congress to strengthen its oversight when it reauthorized the PATRIOT Act in 2006.  BORDC's current focus is on the People's Campaign for the Constitution, a grassroots effort to hold members of Congress accountable to their oaths to uphold the Constitution.

http://www.commondreams.org/newswire/2008/09/17-12

It's Housing, Stupid

by Chris Isidore
Thursday, September 18, 2008

The Wall Street crisis has been caused by plunging housing prices. So despite the billions of dollars being thrown at the problem, experts say more trouble lies ahead.

The nation's financial system is in the midst of a massive shakeup and many on Wall Street and in Washington are pointing fingers and looking for someone to blame.

But in the end, it all comes back to one issue - housing.

Earlier this decade, it was much easier to get a mortgage. Home prices soared about 85% from 1996 through 2006 in inflation-adjusted dollars, creating a bubble.

Then the bubble popped. And the fallout isn't over yet, experts say.

In the past two weeks, the government took over Fannie Mae and Freddie Mac, Lehman Brothers filed for bankruptcy and Merrill Lynch sold itself to Bank of America.

If all that weren't enough, the Federal Reserve announced late Tuesday night that it was loaning $85 billion to insurer American International Group.

None of this would have happened if the housing market had not imploded, leaving all these firms with staggering losses from their investments tied to mortgages.

"These institutions, which weathered all kinds of calamities before, including depressions, are being knocked out," said Lakshman Achuthan, the managing director of the Economic Cycle Research Institute. "It's a testament to the significance of the problem we have here."

Thus, experts agree that there are likely to be future shocks to the financial system until the housing market finally hits bottom.

Even Treasury Secretary Henry Paulson, the administration's point man in the many rescue discussions of the past month, admits this.

"The housing correction poses the biggest risk to our economy," Paulson said the day he announced the Fannie and Freddie seizure. "Our economy and our markets will not recover until the bulk of this housing correction is behind us."

The Problem of Falling Home Prices

But because of the depth of the housing problems, it may take a long time before real estate prices head higher again. Here's why.

Home prices, while sharply off from the 2006 peaks, are still high in comparison to long-term gains in income, rents or overall prices, suggesting that they still have a way to fall, according to experts.

The reason housing is wreaking havoc even on insurers like AIG and big investment banks, who do not make mortgage loans, is that during the boom, trillions of dollars of mortgages were packaged together into securities that promised to pay investors with the proceeds of those loan payments.

Those securities paid better rates than other types of assets during the boom years. So many investors from around the globe poured as much money as they could into those securities.

Faced with this demand, lenders starting making more loans to riskier borrowers, including people who might not be able to afford their mortgage payments in the future and even many with no proof of income.

When prices were rising, this wasn't a problem. The risk of loan foreclosure or default was limited because many homeowners were able to sell their house for more than they owed and make a profit.

But once prices topped out and began falling, loan defaults and foreclosures started shooting higher as homeowners found it more difficult to sell their house. This created problems not just for subprime borrowers but even for those with good credit and income.

When foreclosures rose, the value of the various types of securities tied to mortgages started to fall, causing huge losses up and down Wall Street. It also made banks less eager to extend credit because of the risks involved.

A Downward Spiral

This credit crunch in of itself slowed the economy, leading to job losses and more defaults, feeding a downward spiral that has been difficult to stop.

"A really bad situation -- a home price bubble bursting -- was made significantly worse when the recession began," said Achuthan. "Now we have to let this thing play out."

Some experts even argue that the steps being taken to rescue firms like AIG could make a recovery in housing and the broader economy more difficult, as financial firms and investors become more reluctant to lend money.

"We are certainly taking credit and squeezing it tighter and tighter," said Kevin Giddis, managing director of investment bank Morgan Keegan. "Housing needs buyers. Buyers need credit."

Achuthan said that even though rates for mortgages and other types of loans have fallen in the last two weeks, those loans are becoming more difficult for many consumers and businesses to get because banks are severely tightening their lending standards.

And if housing prices do fall further, that will only cause more losses in the financial sector and perhaps more failures of banks, insurers and securities firms.

"I would hesitate to say the worst is behind us," Achuthan said.

So even with perhaps hundreds of billions of tax dollars going to AIG, Fannie and Freddie, one expert said the only real solution to the housing problem is for the correction in housing to finish running its course.

"We want home prices to return to normal," said Barry Ritholtz, CEO of Fusion IQ and author of the upcoming book "Bailout Nation."

"Until that happens, you can throw as much money at the market as you want at the situation....and it ain't going to make any difference," Ritholtz said.

CNNMoney.

http://finance.yahoo.com/banking-budgeting/article/105782/How-We-Got-Here-It-Is-Housing-Stupid

Crash Course in Economics

by Larry Beinhart

The first time I was in a car crash, I was six or seven years old.

That's a long time ago. But there are certain things about it that I remember quite vividly.

My father was driving. The road was icy. We began to slide. This was in the days before seat belts and cars had bench seats, upholstered, but not shaped for each individual bottom. My father shot out his right arm and pressed me against the seat back to keep me from flying forward if, indeed, we ended up in hitting something.

The thing that was most extraordinary was how long it seemed to take. How time slowed while we slid forward and sideways, heading onto the shoulder, then past it .... it seemed as if we had all the time in the world, yet there was nothing we could do to get off the ice, alter the trajectory, slow down ... nothing ... until we crashed.

As I read the economics news, I'm having that exact same sensation, that we're in a slow motion crash.

Each week, sometimes daily, we slide by a new warning sign, by another wreck that's already off the road.

The new one is Lehman Brothers.

Before that Fannie Mae and Freddie Mac. Before that Bear Stearns.

In August, "one in every 416 U.S. households entered the foreclosure process." In spite of a 2005 law that made personal bankruptcies more difficult and that allows creditors to squeeze money out of people even after they've gone bankrupt, personal bankruptcy rates are soaring. General Motors stock has been trading at 1950s prices. Like GM, Ford is laying off thousands of workers. Both of them are asking for federal assistance to survive. Pension funds are routinely failing.

Then there are my personal experiences.

Like when I go to the gas station and watch the ticker on the pump go up over fifty, sixty, and then seventy dollars to fill the tank. Or when I go to the supermarket and lay down a hundred and forty dollars for what cost me a ninety a year or so back.

From time to time I run into rich people or their handlers. Last February I was traveling with a lawyer from one of New York's leading law firms. He does the legal work on IPO's. He told me their January, 2008 business was down 90% from January, 2007. A couple of days ago a hedge fund guy dropped in on our regular tennis doubles game. Between sets he mentioned how hard it was to get credit these days. "On a secured loan," which means 40% backed by assets, mostly commercial real estate, he was talking about $120 million and up, "the banks want 20% interest."

Every analyst that I see or hear blames it on the "housing bubble" and the "sub-prime mess."

That doesn't seem right.

It doesn't explain why the dollar has lost about a third of its value against the Canadian Looney and the Euro, among others. Or why gold is bouncing up against the $1,000 ceiling. Both of which happened before the bubble sprung a leak.

It doesn't explain why the stock market - as measured by the Dow Jones average - is down (adjusted for inflation) about 15% from 2001. Moreover, at its peak during the Bush years, it was only 14% (adjusted) over the 2001 mark.

It doesn't explain why median income is down - depending on who's reporting it - $700, $1,000, $1,200 per person, over that same time period. Even median family income, with more people working per family, is down.

It doesn't explain why, during the so-called Bush boom, corporate profits were at an all time high, but corporations were starved for places to invest the money.

Let us presume that government policy has an effect on the economy.

What are the policies that have produced this economy?

The one that's on an icy road, sliding, in slow motion, toward the cliff. Or, if we're lucky, maybe just into a ditch.

The core, the very heart of Bushonomics, is cutting taxes. Especially for the wealthy.

I find it impossible to figure out what George Bush's motivations for anything are. He may have that impulse because he himself, his family, and his friends are all very rich and they'll save themselves millions of dollars over the years. Maybe it's political. As he once said, the super rich are his "base." It may be a class thing - the belief that rich people are rich because they're better and will do better things with the money. It may be theological, the mystical belief that "the market" makes everything better.

Whatever the truth is, the tax cuts were sold as economic stimulus and jobs packages with the promise that they would not create deficits. This last was based on a romantic Ayn Rand vision of millionaires racing into the backwoods to build, build, build new businesses which would create jobs, "good jobs," and new taxes would be paid by the businesses and the workers, making up for the initial deficits.

Alas, none of that ever happened.

Deficits were created.

Bush went on a war spending spree. That made them bigger. Whatever boom there was did not create sufficient revenue to the government to make up for deficits.

That triggered the next event in our saga.

Deficits normally lead to inflation.

Bankers hate inflation. So do politicians.

So Allen Greenspan, everyone's favorite economic hero, stepped in. He cut the rates that the Federal Reserve charged banks to borrow from the government.

The intent was to keep inflation low.

It sort of worked for about five years. The official, and actual, rates of inflation were pretty low.

The reason I say it only sort of worked was that, in reality, it suppressed inflation. It made the dollar worth less. As we now know, at least one third less. Oil, as it happens, is priced in dollars. Overseas suppliers of oil began to see their incomes decline. By about a third. So they did what any sensible person with the power to do it would do. They began to raise their prices.

That does not account for the full rise in the price of oil, but it triggered it, and it's a large segment of it. Since everything in America moves on oil, it's raised the cost of everything else. It doesn't account for all the cost increases we're seeing now, but it propels a significant portion of them.

This was combined with several other impulses.

Free trade has to be number one on the list.

Free trade brought cheap consumer goods into the United States from overseas. That made shoppers very happy. It kept inflation down.

It was tough on workers. It not only put a lot people out of work directly, it put downward pressure on wages all across the board. That too, helped keep inflation down.

It was also very tough on businesses that actually make things here, in the United States. The making of things, and then the support services, were outsourced, though the companies remained here, as corporate and marketing entities.

Other factors include de-regulation, non-enforcement of regulations, appointing industry representatives to regulatory agencies, and union busting.

With out-sourcing and domestic wages going down, corporations did, indeed, make record profits.

Three things came together to produce a great deal of loose cash.

First, the government cut taxes while it increased spending.

Second, the Federal Reserve made it cheap, artificially cheap, to borrow money.

Third, corporations made money - largely by pushing wages and salaries down - but had no place to put it.

But, what was there to do with all that money?

There was no place nothing being produced with the right kind of growth potential to pay back the loans. Working people were not making more money that could be used to create more consumption.

So the great ocean of money went, ultimately, to two places, from which it was supposed to be paid back - real estate and to consumers (who were making less income) for personal spending on credit.

There was growth. About a 37% increase in the GDP in actual dollars across seven years. That's about 17% in inflation adjusted dollars.

Let's go back and look at two other numbers, median income and the stock market.

They're both down.

Where was the growth?

It was in borrowing. In credit. In debt.

There's one bubble, the housing bubble, which is inside of - or a symptom of - a much larger bubble, the credit bubble. That bubble is so big that it represents almost the entire growth in the US economy for the last seven years.

At the core of it, the seed from which the poison fruit has grown, are the tax cuts.

Do tax cuts actually stimulate the economy?

Vast sums of money have gone into creating that myth. Major intellectual industries have been created and sustained to sell that story.

At the center of that claim is the Legend Of Saint Ronald Retro Reagan.

Reagan cut income taxes, big time. But raised social security and medicare taxes. That meant that rich people paid less and working people paid more. The immediate result was that economy faltered.

Then Reagan raised taxes (though not by as much as he cut them). At about the same time, oil dropped from forty dollars a barrel to twenty. The economy did grow. That is until the stock market crash of '87.

There is vastly more evidence the other way. Tax increases stimulate the economy.

It may not make sense, it may be counter intuitive, but here are the facts.

What if taxes went up to over 90%?

According to the Reaganauts and Bushwackers the world would collapse! Business would grind to a halt. Investors would flee. Workers would lay down their tools.

Back in World War II, taxes did go up that high.

Americans who earned as little as $500 per year paid income tax at a 23 percent rate, while those who earned more than $1 million per year paid a 94 percent rate

The result:

The American economy expanded at an unprecedented (and unduplicated) rate between 1941 and 1945. The gross national product of the U.S., as measured in constant dollars, grew from $88.6 billion in 1939 - while the country was still suffering from the depression - to $135 billion in 1944.
EH.net (from Economic History Services)

From 1946 to 1963 the top rate fluctuated from 86% to 91%.

Average economic growth was 3.5% per year.

The current top income tax rate is 35%.

Economic growth has been, at best, 2.5%. That is if you stop counting in 2007. And don't consider the type of growth, which consisted primarily of increased debt and pyramids of borrowing.

In 1992 the top tax rate was 31%.

Bill Clinton increased it to 39.1%.

The Dow Jones average went up 360%. The number of jobs went up 237,000 per month (under Bush, as of 2007, it was just 72,000 per month.). Median household income went up (instead of down). The budget was balanced.

Both candidates are talking about tax cuts to fix the economy.

Does that make sense?

Here, in NY State, we are facing a budget crises due to the collapse in the financial markets which is where a lot of our tax revenue comes from.

The governor has a choice between raising taxes and cutting expenditures. He's a good, fairly liberal Democrat. But he polled the people and the legislature, and everyone wanted to cut spending.

That means cutting the state work force.

That means that people who had jobs and were spending money will be unemployed and spending a lot less. That means less revenue for the state and for the places that they did business with. Which means the economic crises will grow worse.

States are in a difficult position because they compete with each other for "friendly business environments," which always means, in the short term, low taxes.

This administration, and most economists, at least as they appear in the media, want us to "consume" our way out of trouble.

But the model should be the other way. We should be producing our way out of trouble.

Is that possible in a "free trade" world?

The answer is yes. Through government spending. Through the kinds of things that the market cannot, or will not, supply.

The market will not protect our coastlines. How many Katrina's and Ike's do we have to have before we understand that it is in the common good - and good for business and good for the economy - that we do so.

Most of the costs of doing so cannot be outsourced. They have to, by their nature, stay here.

The same is true for wind and solar power and rebuilding our electrical grid to make such power sources work.

The market will not produce sensible, affordable health care. The market, in fact, has produced the worst cost-to-benefit ratio in the civilized world. The market has produced more bureaucracy in health care than any government agency ever could.

An affordable, national health care system will make American business more competitive.

For those of us who pay for our own health care, it will leave more money in our pockets than most of the tax cut proposals.

The market cannot and will not produce clean air and water. It will not produce an educated population.

Why did we have so much growth - so much business growth - when we had high taxes and when the taxes on corporate profits were actually collected?

If taxes on income (personal or corporate) are high, the impulse is not to take them. Especially if they're as high as 90%. Though there's no need to go that high to start making a meaningful adjustment.

What do companies and people do when they're making money in a high tax environment? They reinvest. In producing something. Cashing out is difficult, but the value of what they own continues to grow as the reinvestments pay off. We then have to "make money the old fashioned way ... earn it."

There is a difference between my business and "business," the wealth of the nation.

In my business, I hate regulations, unions, and high taxes.

In my country, I appreciate regulations, unions, and what high taxes, if intelligently spent, do for me. Then I live in a country in which business in general does better, my investments in the stock market do better, my retirement is protected, my children's health care is affordable, and I have more hope for their future.

Larry Beinhart is the author of Wag the Dog, The Librarian, and Fog Facts: Searching for Truth in the Land of Spin. All available at http://www.larrybeinhart.com.  His new novel: SALVATION BOULEVARD will be published on September 16, 2008, by Nation Books.  All available at http://www.larrybeinhart.com.  Responses can be posted or sent to beinhart@earthlink.net

Published on Monday, September 15, 2008 by CommonDreams.org

http://www.commondreams.org/view/2008/09/15-6

Opponents of U.S. Radar Base March in Prague Centre

Leading US Jewish Rabbi Calls on the Pope to Convene Religious Leaders in New York to Oppose Abortion

Rabbi Yehuda Levin with Pope

John Paul II

By John-Henry Westen

WASHINGTON, DC, January 25, 2008 (LifeSiteNews.com) - One of the most riveting and energetic speakers at the March for Life Tuesday was Rabbi Yehuda Levin. No stranger to pro-life Americans, Rabbi Levin has represented more than 1000 Rabbis calling for moral laws. At the March, he made an unusual appeal - asking Pope Benedict XVI to lead religious leaders on the streets of New York in a declaration forbidding faithful to vote for politicians who support abortion.

Rabbi Yehuda Levin, the Special Emissary to Israel for The Union of Orthodox Rabbis of the United States and Canada and The Rabbinical Alliance of America, addressed the hundreds of thousands of pro-life marchers with this message:

"I'm asking the Pope today. Call the Evangelicals, call the Jews and everyone else and declare in the streets of New York in these extraordinary times when babies are being murdered . . . when some are redefining marriage and perverting our youth in society.

"Pope Benedict we need extraordinary measures.

"If the religious leaders will gather in the city of New York at the invitation of the Pope and declare in the streets it is forbidden to vote for any pro-abortion pro-deviance candidate.

"My dear friends, 20 to 25 per cent of America will surely applaud this, and for the glory of God this would stop another huge amount of baby killing and perversion.

"Please Pope Benedict you have the ability as the largest denominational leader. You who lived through the Holocaust, answer the appeal of this Jew whose mother-in-law bears the brand of Auschwitz, hear our plea. Help stop the American Holocaust of abortion. The Holocaust of a world society losing its respect for life. Prohibit voting for the pro-death and deviance politicians."

LifeSiteNews.com spoke with Rabbi Levin about the proposal during the march. Rabbi Levin said that he had spoken about his proposal with Boston Cardinal Sean O'Malley, with St. Louis Archbishop Raymond Burke and also with Senator Sam Brownback.

Rabbi Levin told LifeSiteNews.com that should Pope Benedict undertake the proposal it would be an ecumenical event like none other. "There's almost nothing he can do which would be more ecumenical in the true sense of the word - interreligious inspiring and helping the peoples of this world than to reassert the rightful supremacy of religious leadership over political leadership," he said. "And with one statement in New York supported by the Rabbis and Evangelical leaders and other denominational leaders we can change the balance and start to shift respect for religious leadership back to its rightful place."

Rabbi Levin has asked that all pro-lifers join in his appeal to the pope.

The pope's email as rendered by the Vatican Information Service:
benedictxvi@vatican.va

Friday Five: Pro-Life Hero Wesley J. Smith

by Devon Williams, associate editor

'Science needs ethical boundaries beyond which it should not go.'