How Germany got it Right on the Economy ANS

Here's an article from None So Blind, originally from

Harold Meyerson in the Washington Post.

It's about Germany doing things differently from us and being better off because of it. I've included the comments. 
Find it here:  http://www.nonesoblind.org/blog/?p=8852&cpage=1#comment-450361  
--Kim

How Germany got it Right on the Economy: Harold Meyerson in the Washington Post

How Germany got it right on the economy

by Harold Meyerson
Washington Post, November 24, 2010

BERLIN

It may be turkey week in America, but it's goose month in Germany. In many restaurants, you can get goose in your salad and goose in your soup to go with your goose entrée. Diners fairly honk their way through November.

But then, Germans have something to honk about. Germany's economy is the strongest in the world. Its trade balance – the value of its exports over its imports – is second only to China's, which is all the more remarkable since Germany is home to just 82 million people. Its 7.5 percent unemployment rate – two percentage points below ours – is lower than at any time since right after reunification. Growth is robust, and real wages are rising.

It's quite a turnabout for an economy that American and British bankers and economists derided for years as the sick man of Europe. German banks, they insisted, were too cautious and locally focused, while the German economy needed to slim down its manufacturing sector and beef up finance.

Wisely, the Germans declined the advice. Manufacturing still accounts for nearly a quarter of the German economy; it is just 11 percent of the British and U.S. economies (one reason the United States and Britain are struggling to boost their exports). Nor have German firms been slashing wages and off-shoring – the American way of keeping competitive – to maintain profits.

One key to Germany's miracle is the mittelstand, as the family-owned small and mid-size manufacturing firms that dominate the economy are known. Last week, I visited AWS Achslagerwerk, a factory of one such firm, in the farmlands of Saxony-Anhalt, about two hours west of Berlin. As in many such companies, this factory turns out specialized products: axle-box housings for Chinese and German high-speed trains, machine tools requiring climate-controlled precision measurement. With annual revenue of 24 million euros, the factory has won a significant share of the world market, though it employs only 175 production workers.

The workers at AWS Achslagerwerk are highly skilled, and most stay with the firm for decades. When the downturn hit Germany in late 2008, manufacturing firms' business declined the most, but subsidies from a government program called kurzarbeit allowed firms to keep their workers part time rather than lay them off. "Fifteen to 20 percent of our workers were on kurzarbeit," Klaas Hubner, a former member of the German parliament and owner of the mittelstand company that includes AWS Achslagerwerk, told me. By keeping their skilled workers, companies like Hubner's were able to rev up production quickly when China's stimulus boosted the market for their products in 2009.

In America, alas, firms like Hubner's are increasingly hard to find. The mittelstand remains blissfully immune to many pressures that share-price-oriented financial markets inflict on their American counterparts. "We don't have short-term strategies, only long-term strategies," says Hubner. Mittelstand companies are not publicly traded, and they benefit from an extensive system of vocational education and a sector of municipally owned savings banks that work solely with local businesses. Roughly two-thirds of German small and mid-size businesses get their loans from these banks. "Over the past decade, banking largely became a self-fulfilling activity," says Patrick Steinpass, chief economist for the national organization of savings banks. "But our banks are restricted to doing business in their regions; they have to concentrate on the real economy." Through such radical notions has Germany thrived.

Germany's large manufacturers – Volkswagen, Siemens, BMW – surely feel market pressures, but they, unlike a growing number of their American counterparts, still invest quite profitably at home. In large part, that's due to Germany's system of co-determination, which places an equal number of union and management members on corporate boards. The German metal workers union, IG Metall, has been working with automakers to train workers, for instance, to mass-produce electric cars. "Our goal is to really retain high-value-added manufacturing in Germany," says Martin Allespach, the union's policy director. It's hard to identify any group with real input into corporate conduct that's pursuing such a goal in the United States.

Mixing social democratic values with Jimmy Stewart localism, Germany's economy is running rings around America's. "What we have here is stakeholder capitalism, not shareholder capitalism," says Hubner. And like most mittelstand owners, he adds: "I live where my company is located. I want a good image in the town I live in."

They know how to goose an economy, those Germans. Ours, by contrast, seems more and more a turkey.

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11 Responses to "How Germany got it Right on the Economy: Harold Meyerson in the Washington Post"

1. David Landau Says:
2. November 24th, 2010 at 7:54 pm
   
3. It's a very good, thought-provoking piece. I must say, though, that it's oddly timed; Germany today is going through some hell as a result of the crisis in the eurozone, a crisis that Merkel's government helped bring on itself. As all the serious economic news from Europe takes stock of Germany's awkward position in the crisis, the writer should probably have acknowledged the euro's problems and Germany's place in them. As it stands, the article showcases a "micro" that's being undone by a two-thousand-pound gorilla named Mr. Macro. In any case, this "micro" perspective (which is micro only in relative terms) is good to have.
4. Larry Says:
5. November 24th, 2010 at 8:21 pm
   
6. Perhaps from watching that movie, The Secret of Oz,* I think it may have been–whatever, something recent and seemingly authoritative anyway–I have the impression that the U.S. banking structure has, for one reason or another, grown far past any easy return to the much more localized regional banking system that Germany has–intertwined with local manufacturing and local politics–and that that's an important part of our problem. So I guess probably we get to eat our hearts out as far as that's concerned, very sorry to have to say. Larry
   * See http://www.nonesoblind.org/blog/?p=8365#comment-447110 (November 12th, 2010 at 7:50 pm)
7. Andrew Bard Schmookler Says:
8. November 24th, 2010 at 10:31 pm
   the crisis in the eurozone, a crisis that Merkel's government helped bring on itself.
   
   
   I thought I knew the basic lineaments of the Eurozone crisis, but I don't know about Merkel's government helping to bring it on. I know they dragged their feet about coming up with a solution to Greece's sovereign debt crisis. But what did Germany do to CREATE this crisis. They didn't have a housing bubble, that I'm aware of. I'm not aware of German banks getting into the credit default swap mess. So what was their role?
9. Richard H. Randall Says:
10. November 25th, 2010 at 4:25 pm
    
11. Just about a year ago, I posted here a note about 'kurtzarbeit' which a fellow from the Economic brance at the GErman embassy explained to me. It literealy means 'short work' and comes down to full time employees also sharing work for theose who would be unemployed. The gentleman explained that this idea was brought over during the Marshall plan from America.
12. As we have so thoroughly embraced savage capitalism as the only God, we would do well to reflect on this. As for Merkel, it was not long after she took office dthat she claimed Germany had tdo embrace dthe American way of business. I dthink older and wiser heads have kept that from happening. Funny how a person who grew up in East Germany, now wants to adopt a far-right ideology. Pretty sick.
13. Steve Says:
14. November 25th, 2010 at 7:37 pm
    
15. "Funny how a person who grew up in East Germany, now wants to adopt a far-right ideology. Pretty sick." Well before Merkel assumed office Germans were undoubtedly willing to embrace American Clintonian capitalism. As you might know Germany has rebounded fairly well following its 10 year economic crisis. Bottom line is if Merkel is described as "far-right" then so too must a major part of Bill Clinton's presidency be recognized as such.
16. David Landau Says:
17. November 26th, 2010 at 12:22 am
    
18. To Andy's point: In a fundamental way, perhaps, the Germans did not contribute to the euro crisis as the peripheral countries (or the U.S.) did. But by accepting the terms of the common currency in the name of a united Europe, and by being lax in enforcing the rules, again in the name of unity, they cooked their own goose. By the time Ireland's emergency was manifest, Merkel swang to the other extreme and proposed a settlement that threw the bond market into a panic, which had the effect of bringing on the very crisis that she had wanted to avoid. So Germany's and Merkel's mistakes were primarily political; but those mistakes helped bring on the problem just the same.
19. Andrew Bard Schmookler Says:
20. November 26th, 2010 at 8:00 am
    and by being lax in enforcing the rules
    
    
    What rules were the Germans lax in enforcing. The only thing that came to my mind is that the Greek policies about debt were, if I understand, beyond what was permitted, but that this was hidden by dishonest accounting practices. (I'm not sure I'm accurate there.) But I really don't know what you might be alluding to about lax enforcement.
21. Richard H. Randall Says:
22. November 26th, 2010 at 10:41 am
    
23. To Steve: Clinton aided and abetted by signing the repeal of the Glass-Stegal reforms from 1935 which kept the mistakes of 1929 from occurring until 2008, whn "the laws all being flat" and the speculation and greed and shenanigans could occur again.
24. I agree that he was wrong and did us all a disservice, as did Senator Phil Gramm and his buddies from the banking industry who wrote the repeal of Glass-Stegal.
25. Neverthless, Merkel was willing to throw away the better society for the great majority of German citizens to enrich the few: in effect the same thing Clinton and the politicians, left and right did here. Sick-and anti-democratic.
26. ToddR Says:
27. November 26th, 2010 at 11:15 am
    
28. And what rules could Germans unilaterally enforce in the first place? Sure, Germany is probably the weightiest individual EU member. But they're still EU rules, right? So how can "Germany" enforce EU rules? Or did I misunderstand ­ is the claim that Germany was lax in enforcing, within German jurisdiction so to speak, EU rules?
29. David Landau Says:
30. November 26th, 2010 at 3:52 pm
    
31. For Andy & ToddR: The main eurozone powers, as a matter of policy, have mandated that automatic enforcement of protocols regarding debt-to-GDP ratios (I think it's GDP) would not take place. The recent talks between Merkel and Sarkozy touched on this point. Merkel is now insisting on rigorous enforcement, while others (including Sarkozy, it appears) want to keep enforcement as a political choice rather than a bureaucratic matter. To ToddR, you've got a good point. Germany doesn't unilaterally enforce the rules. That was a rhetorical excess on my part.
32. Steve Says:
33. November 26th, 2010 at 4:12 pm
    
34. Hi Richard Randall, I agree. Well said here, "Merkel was willing to throw away the better society for the great majority of German citizens to enrich the few: in effect the same thing Clinton and the politicians, left and right did here. Sick-and anti-democratic." Bill Clinton and Merkel chose to embrce anti-Keynesianism and deregulation yet remain identified in the public as Liberals. Quite sickening, indeed.
35. kim Says: Your comment is awaiting moderation.
36. November 27th, 2010 at 1:26 pm
    
37. In all fairness, Clinton had Republican majorities in both houses most of the time he was Pres. But, yes, he embraced right wing economics. He's a Baptist: what did you expect? Americans are so impressed with wealth that they keep thinking that wealthy people must understand economics so they listen to them. It's a fallacy that both Clinton and Obama are subject to.

Divine Justice Human Injustice ANS

It's a ten minute film, with music but no speaking.  Very interesting graphs.  Called

Divine Justice Human Injustice

--Kim



http://www.youtube.com/watch?v=rxuy04Pt_1A   

Fwd: Mayor of London warns GWB not to visit

Hi everyone: This was sent to me by one of our readers. What do you think?
--Kim

>The original news item about the Mayor of London's remarks was on BBC
>news two or three days ago. I am unable to find it on the net today
>-why???? I have copied the text of the following web entry for fear it
>may also disappear.
> Francesca
>
>http://blog.reidreport.com/2010/11/book-tours-for-war-criminals-or-what-the-london-mayor-told-dubya/
>
>Jay Leno and the folks over at Fox “News” may find George W. Bush’s tale
>of waterboardin’ and fetus-in-a-jar hijinx to be just the greatest of
>fun, but in most of the world, the first of those two things is a war
>crime.
>
>Case in point: England, where the conservative mayor of London has some
>keen advice for the former U.S. president:
>
> It is not yet clear whether George W Bush is planning to cross
> the Atlantic to flog us his memoirs, but if I were his PR people
> I would urge caution. As book tours go, this one would be an
> absolute corker. It is not just that every European capital
> would be brought to a standstill, as book-signings turned into
> anti-war riots. The real trouble — from the Bush point of view —
>"
> is that he might never see Texas again.
>
> One moment he might be holding forth to a great perspiring tent
> at Hay-on-Wye. The next moment, click, some embarrassed member
> of the Welsh constabulary could walk on stage, place some
> handcuffs on the former leader of the Free World, and take him
> away to be charged. Of course, we are told this scenario is
> unlikely. Dubya is the former leader of a friendly power, with
> whom this country is determined to have good relations. But that
> is what torture-authorising Augusto Pinochet thought. And unlike
> Pinochet, Mr Bush is making no bones about what he has done.
>
>
>See, whereas to the American media Mr. Bush is little more than a
>delightful bumbler, ambling through interviews about his absolutely
>crackers new book, “Decision Points,” his “damn right!” admission to
>authorizing waterboarding makes him pretty much a criminal in Europe,
>where they take the convention against torture seriously (unlike in the
>U.S., where we don’t “relitigate the past.”) To put it plainly, as Mayor
>Boris Johnson did:
>
> “Waterboarding” is a disgusting practice by which the victim is
> deliberately made to think that he is drowning. It is not some
> cunning new psych-ops technique conceived by the CIA. It has
> been used in the dungeons of dictators for centuries. It is not
> compatible either with the US constitution or the UN convention
> against torture. It is deemed to be torture in this country, and
> above all there is no evidence whatever that it has ever
> succeeded in doing what Mr Bush claimed. It does not work.
>
>
>Even as Dick Cheney and his spawn and followers call it: “enhanced
>interrogation” that includes stuff Pol Pot did is a war crime, and as
>Jonathan Turley points out:
>
> The controversy may only be the first international reaction to
> the book. While our media has discussed the book rather
> matter-of-factly as acknowledging his order to waterboard
> suspects, other nations take international treaties seriously
> and view this as an admission of a war crime.
>
> Previously, Cheney and others were the subject of international
> calls for arrest after they admitted to roles in the torture
> program. The United States has a clear obligation to prosecute
> those responsible for our torture program. However, President
> Obama has promised to block any investigation of torturers and
> has stopped any investigation of those who ordered the war
> crime. In the absence of nations enforcing their international
> obligations, other nations will often set forward to enforce the
> rule of law.
>
>
>Oh, and…
> In addition, since we tortured foreign citizens, those countries
> would have grounds to issue a warrant as was the case in the
> arrest of former dictator of Chile Augusto Pinochet. Pinochet
> was arrested in London in 1998 on an order from Spanish Judge
> Baltazar Garzon who cited Spanish victims in Chile. Regardless
> of the grounds, any warrant for Bush would put Obama in an even
> more ignoble position on torture (if that is possible). He would
> have to fight an effort to enforce human rights law while
> blocking such enforcement at home. We would be in the same
> position as Serbia in both protecting accused war criminals and
> resisting efforts of other countries in seeking to prosecute
> them.
>
> In the meantime, Bush’s book tour schedulers may want to avoid
> those countries which care about human rights and focus on such
> natural allies as China, Iran, Syria, and Saudi Arabia. He might
> want to avoid Italy, Spain, and much of Western Europe.
>
> Cheney and Bush have now virtually dared anyone to come after
> them. They know that Obama has chosen politics over principle.
> The question is whether the shunning in London will become an
> actual effort in another country to issue an arrest warrant.
>
>
>And that goes for Don Rumsfeld, Alberto Gonzales, John Yoo, Judge Bybee,
>Doug Feith and David Addington, too…
>And while Andrew Sullivan focuses on the impact of Bush’s London
>shunning on the long view of him:
>
> It’s good to be reminded of real conservative values, which
> include abhorrence of torture and a dedication to the rule of
> law. By those standards, George W. Bush is not now a
> conservative, merely a thug, twisting the law to engage in
> something utterly alien to Anglo-American ideals. And a smug
> thug at that. Watching his interview on Hannity ­ yes, I managed
> to get through most of it ­ I was reminded of this man’s utter
> shallowness and moral unseriousness. Glib doesn’t begin to
> describe his solipsistic denial of his own barbarism.
>
>
>The short view might not be so good either — since Bush will likely have
>to do much of his traveling within the United States for awhile. … or
>maybe he could flee to Argentina or to Jedda, Saudi Arabia, like Idi
>Amin did…
>This is more than just schadenfreude from a staunch Bush opponent. We
>now face the very real possibility of having a former president of the
>United States who is limited in his personal travel, along with former
>senior members of his administration, because they have to actually fear
>arrest — arrest — in foreign capitals due to their own admission of war
>r
>crimes.
>
>That is the extent to which George W. Bush sullied the presidency, and
>the reputation of this country, by authorizing torture.
>
>Heckuva job, George.

Self-Made American Myth #2: Who Makes $250K? ANS

Ever wonder why poor people vote for parties that protect rich people?  Here's one answer.  It's another article by Sara Robinson. 
Find it here: http://www.ourfuture.org/blog-entry/2010114723/self-made-american-myth-2-who-makes-250k   
--Kim

«« Progressive Breakfast  | Blog Home |  One Week Until Deficit Commission Conclu...  »»

Self-Made American Myth #2: Who Makes $250K?

By Sara Robinson

November 23, 2010 - 2:17am ET

more» 

Progressives have suspected for years that working- and middle-class Americans vote for the GOP because they have a deeply unrealistic idea about their real chances of becoming wealthy. We've joked that working stiffs vote for tax cuts and other goodies for the rich because they seriously believe that they're going to be rich themselves someday, and want to make sure those advantages will be there for them, come the day.

To date, this has been just a guess on our part -- but a recent study now proves that this guess was right on the money. The Myth of the Self-Made American is being bolstered by a delusionally optimistic view of just how many people actually make it to the top 3% income level. It's a delusion that affects almost everyone, but particularly those who vote Republican.

Ryan Enos at yougov.com explains the results of a YouGov/Polimetrix poll conducted a few weeks before the recent election. As he explains their findings:

The hot button issue with the tax cuts is whether to renew the cuts for families earning more than $250,000 a year. The wrangling among politicians over this issue seems to mostly involve whether or not earning that amount of money qualifies somebody as wealthy.

What's amazing about the magic number of $250,000 is that, based on responses to a recent YouGov/Polimetrix poll, by and large, Americans have a very distorted view of how many people make that much money.

Any idea what proportion of American families make more than $250,000 a year? Or, to potentially make it easier, any idea what proportion of families in your state make more than $250,000 a year?

Don't feel bad if you don't know­most people don't. The actual number, nationwide is somewhere less than 3% of families earn more than $250,000 a year. What did the survey respondents say when asked this question? The average response was close to 17%!­meaning your typical survey respondent thinks that almost 1 in 5 families in America earn that kind of money, when the answer is closer to 1 in 50!

Enos goes on to point out that there are only a few states where the actual number of $250K earners even cracks 8% -- Maryland, Massachusetts, New Jersey, New York, and Virginia. But when the question was put to people in those states, they weren't even half right, because their answers tilted upward, to about 21%.

Furthermore: the more money you make, and the more education you have, the more accurate your guess becomes. People making over $150K guessed an average of about 11%; those making under $30K thought it was more like 21%. College graduates guessed 12%; people with graduate degrees were closer, but not by much.

And only 15% of the survey participants answered 3% or under --though one-third of those answered "zero," meaning they thought nobody in the country makes more than $250K a year. Deduct this disconnected 5%, and you're left with just 10% of Americans who have a realistic sense of just how rare a $250K income is in this country.

While Republicans and Democrats gave about the same answers, the study also found that the more distorted peoples' views were, the lower their opinion of President Obama was, and the more likely they were to vote Republican last November 2. The bottom line, says Enos is this: "A person that says 20% of people make $250,000 is more likely to vote Republican than a person that says 5% of people make $250,000."

The irony, writes Enos, is that "people making less money actually believe that there are more wealthy people out there than wealthy people do."

This distortion explains a good deal about why middle- and working-class people vote for the GOP. A quarter of a million dollars sounds like an attainable income to most people -- they know at least a few people around town whom they imagine have already made it -- and they honestly think that with the right break or a little work, they might get there someday, too. It could happen.

Combine this with the common misunderstanding about how marginal tax rates work (hint: it's only the income over $250K that's taxed at the higher rate, not the whole year's take), and it's not hard to see why so many people making the average household income of $53K are incensed by the idea of increasing the marginal tax rate on the top 3% -- and why they think Obama is attacking them personally by suggesting such a horrible thing. They've bought into a myth about their chances of moving up the economic ladder that's at vast odds with the actual facts.

Some critics think Obama picked the wrong number, and that proposing at top tax rate that kicks in at $500K or a cool million would have avoided this problem. The average voter might have had a harder time imagining these numbers as being attainable. Maybe so. But maybe not: given how strong the myth of the self-made American is, and how many falsehoods you have to take on faith to believe it, we may be dealing with a level of delusion that's impervious to even really huge numbers, the kind that define only the top 0.5% of Americans.

We are living in a fact-free world now. Stories are all that matter. And in hard times, people tend to cling harder to their dreams -- especially the dream that no matter how bad things are now, someday they're going to rise above all this and triumph. Telling them the truth under these conditions is hard, and perhaps even cruel.

But one of the hallmarks of countries that are falling into chaos is that people come to believe more and more absurd things. Truth gives way to truthiness; facts aren't given the same weight as feelings. The huge disconnect between people's perceived prospects and their actual prospects shows just what a masterful job conservatives have done. They've convinced people to believe that their potential for mobility is as good or better than it ever was -- even as they've stolen the usual routes to a better life (education, home ownership, public investment, and so on) right out from under them.

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Who makes $250k?

By Dale Marshall | November 23, 2010 - 3:07pm GMT

Let's not decide who should or shouldn't be taxed by counting how many heads there are in any particular group - that smacks of the tyranny of the majority.

Instead, we should consider that those who earn more have benefited more from our system, and thus "charging" them a higher tax rate is justified.

Let's also not deceive ourselves into thinking either that those who earn a great deal of money in any particular year are necessarily wealthy, or that the wealthy have any significant income to be taxed.

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who makes $250

By Louis Bradbury | November 23, 2010 - 4:47pm GMT

What many commentators fail to mention is that the $250 threshold is not how much a taxpayer makes, but rather refers to his taxable income, which is the amount any income tax is levied on after all allowable tax deductions. Most taxpayer swho would have $250,000 of taxable income will havesignificantly higher gross incomes. IRS statistics will show the average amount of home mortgage, real estate tax, charitable and other deductions claimed by income level. It is most likely that a taxpayer subject to the $250 level would have a gross income exceeding $350, 000 or more. This only helps confirm your points. I wish more bloggers and reporters would actually ask tax attorneys for more real info as opposed to the shorthand summaries supplied in press releases. Unfortunately even Obama personally does not realize this because he could pount out how an even fewer number of taxpayers are in this category.

Finalkly the REP.Myth that this will hit small business owners is absurd. The SBA and other government agencies (IRS too) publish satistics on the incomes of small business owners. Most such owners can only wish they have taxable income of $250,000

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the false bait for tea partiers

By Bob Pomeroy | November 24, 2010 - 2:42pm GMT

This article is dead on. The tps have been deluged by the flattery that they can compete with anyone or anything if greater freedom were institutionally enacted for all. The motive is greed, and the impetous is ego. They also believe that almost anyone can govern (and have W as an example) and that government officials are elected to impose their will on the governed rather than to represent the interests of the governed. It's a different world filled with magic but meaningless word icons. Many times they manifest exactly what they mean to oppose. Flattery is the main vehicle of this warped world view.

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Area stunts growth by feeding on itself ANS

There's something wrong with this picture....   Not sure exactly what, but it's part of the "race to the bottom" championed by the "cheap labor Republicans".  If "capitalism" worked, it wouldn't need all these subsidies.  So it's not working.  Can we fix it? Can we replace it with something that does work?  Are we smart enough?  Do we have the will to fix our society?
This article is about how communities subsidize businesses.  Corporate welfare it's called....
The article is from the St. Louis Post-Dispatch.
Find it here:  http://www.stltoday.com/business/local/article_644ee8ee-d6da-57fc-9714-a7fb95619fa1.html   
--Kim


Home / Business / Local

Area stunts growth by feeding on itself

Area stunts growth by feeding on itself

BY TIM LOGAN • tlogan@post-dispatch.com > 314-340-8291 and David Nicklaus • dnicklaus@post-dispatch.com > 314-340-8213 www.STLtoday.com | Loading… | Posted: Monday, November 15, 2010 4:00 am

 

 LAURIE SKRIVAN NOVEMBER 4 2010, -- The former home of Wal-Mart in a Town and Country Mall strip mall. Wal-Mart opened the store in the 1980s, but chose to reopen a larger store about a mile westward in the new Manchester Shopping Center due to the tax increment financing incentives (TIF) offered by the City of Manchester. (Laurie Skrivan | lskrivan@post-dispatch.com)
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When Wal-Mart moves two miles west to a new store in Bridgeton, the once-thriving Cypress Village shopping center will shrivel into just another dying strip mall.

The anchor tenant now occupies more than half of the space, and leasing agent Jeff Eisenberg fears that the remaining stores won't survive without the traffic Walmart brings. "That space could be dark for the next four to 10 years," he worries.

It's a familiar pattern across metropolitan St. Louis, where the inventory of retail space has grown more than twice as fast as the population over the last decade. The difference shows up in "for lease" signs dotting corridors like St. Charles Rock Road, where Cypress Village straddles the border between Bridgeton and St. Ann.

This isn't merely a case of capitalism at work, with dowdy old stores closing to make way for glitzy new ones. The free market's invisible hand is being guided by local governments, which compete with one another to dole out tax incentives to companies dangling the prospect of jobs and ­ more important to local politicians ­ sales tax revenue. Like Bridgeton, most area municipalities eagerly hand taxpayer money to private businesses through a tool called tax increment financing, or TIF, which allows developers to use new tax revenue the stores generate to help finance their construction. Another increasingly popular tactic: special taxing districts, which allow the shopping centers to charge an extra sales tax to finance infrastructure such as roads or decorative fountains.

In a slow-growth region like St. Louis, these government giveaways amount to a zero-sum game. Dozens of municipalities pilfer business from one another ­ mostly retail outlets, with their low-wage jobs ­ while the metropolitan area at large gains little in the way of employment or wealth. Rather than luring new investment, the economic ecosystem essentially feeds on itself.

"For the most part, it's just stealing from the next guy," says Kenneth Thomas, an associate professor of political science at the University of Missouri-St. Louis.

On St. Charles Rock Road, the new Walmart is getting $7.2 million in incentives from Bridgeton to move up the street. In the long run, both Wal-Mart and Bridgeton will emerge winners in the deal. Wal-Mart wins for obvious reasons ­ the company spends far less on real estate, thanks to taxpayer money. Bridgeton benefits from increased sales tax revenue, even considering the sizable cut it must hand over to the Walmart developer.

Yet for every winner in the incentive game, there's a loser, in this case St. Ann, which will lose an estimated $100,000 a year in revenue. Eisenberg's client, an investor from Chicago, also will suffer a big financial loss.

Eisenberg understands why Wal-Mart wants to move. Its new site is larger and closer to Interstates 70 and 270. "Wal-Mart's job is to generate sales and generate profits for the stockholders," Eisenberg said. "It's not Wal-Mart's job to improve the community."

ADDING IT UP

The big picture on tax incentives can be elusive, emerging from hundreds of separate local decisions, each focused narrowly on a certain neighborhood or strip mall. But it adds up.

Since 2000, according to state records, local governments in our region have authorized $1.7 billion in tax increment financing. Of that, $1.3 billion has been in Missouri, and nearly half of that has paid for suburban shopping centers. Through transportation development districts, local governments also have approved $340 million in new sales taxes to pay for roads and parking, mostly at retail centers.

That's the biggest chunk of the $3.5 billion in public money the region has spent to fuel private real estate projects in the last decade. It's also a prime example, critics say, of how development incentives have run amok in St. Louis, gobbling up money we could have used to help the region compete in an increasingly complex and knowledge-based global economy.

"We're subsidizing consumption. We don't subsidize production," said Todd Swanstrom, a professor of public policy at the University of Missouri-St. Louis.

TIF and similar incentives can be used to build office buildings and factories, which arguably would bring new and better jobs to the community. Academic research, Thomas said, has found that 90 percent to 95 percent of jobs in TIF-financed retail centers are not new to the metro area, but moved from somewhere nearby.

"The whole idea of subsidized retail is nuts," says Greg LeRoy, executive director of Good Jobs First, a research and advocacy group in Washington. "Retail is what happens when people have disposable income. It's not an economic-development strategy."

SPRAWLING DEFINITION

TIF has drifted from its original intent, critics say. When the Missouri Legislature authorized it in 1982, the point was to draw investment to so-called "blighted" areas: rundown urban neighborhoods; struggling shopping districts; places the free market won't fix. It lets a developer borrow or issue bonds against a project's future tax revenue, then use a portion of that tax money to pay down the debt.

In some cases, TIF has helped to draw investment to vacant office buildings downtown, tired inner suburban malls and industrial parks around the region. But the definition of "blighted" has steadily sprawled ­ it has been used to describe the West County Center in affluent Des Peres, open fields in St. Peters and prime land by highway intersections. All so those sites would qualify for TIF and other incentives.

Such programs invariably start small and grow as special interests find special ways to tap them, said David Stokes, policy analyst at the Show-Me Institute, a St. Louis-based libertarian think tank. "When you have lobbyists and accountants and lawyers who can help you interpret the rules, of course they'll do that," Stokes said.

Attributes of the program here contribute to TIFs' popularity in St. Louis. While the tax incentive tool exists nationwide, Missouri is one of just 14 states that allow TIF districts to capture sales taxes, according to the Community Development Finance Agency. And that, experts say, is what drives its use to build so many shopping centers.

Factor in the hunger of the 91 municipalities in St. Louis County for revenue ­ and the reality that every politician loves a ribbon-cutting ­ and you have an environment where developers and retailers can play one city off against another. And cities don't have much leverage.

"Once TIF starts, every developer feels he needs it," said longtime Maplewood City Manager Marty Corcoran. "If (we) say no, they'll just go down the street and use it somewhere else."

SELLING OUT CHEAP

In his 25 years running Maplewood's affairs, Corcoran has seen the good and the bad of TIF. In 1992, the city lost a Kmart, its second-biggest sales taxpayer, to a TIF-financed shopping center in St. Louis. Seven years later, Maplewood filled the hole that Kmart left behind, with a Shop 'N Save paid for in part by TIF.

The municipality saw growth as unsubsidized restaurants and the Schlafly Bottleworks moved in along its main drag of Manchester Road. It finally healed a long-ailing city budget with a controversial Walmart project on Hanley Road ­ which didn't use TIF but did claim 153 homes through eminent domain and required a $16.3 million, city-financed transportation development district.

The costly series of events stemmed almost entirely from the need for sales tax revenue to finance city services but did little to boost the health of the regional economy or to provide well-paying jobs. "Retail is not a place where the majority of jobs pay a livable wage," Corcoran said.

That's the trouble with TIF: It includes no incentive to create good jobs. Think about it from a municipality's perspective, said Bob Lewis, president of Development Strategies, a local economic development consulting firm. To most municipalities, economic development means growing the tax base to provide services to residents ­ the bread and butter of local politics. Aside from the city of St. Louis, local municipalities cannot tax earnings, so creating high-paying jobs has no direct impact on their tax base.

"So they focus on retail," Lewis said. "Mayors and city managers know this. And they know it's semi-wrong. But they don't have a choice."

GAP FINANCING

Developers say they don't have a choice, either. Their tenants ­ national retailers like Wal-Mart and Home Depot and Best Buy ­ operate on tight margins, and they won't pay a penny more for land than they have to. But once landowners hear a national retailer is interested in their property, they demand top dollar.

TIF bridges the gap between what the tenant will pay and what the property owner will accept, said Mark Sedgewick, managing director of Pace Properties, a leading retail developer in the region. It makes the site attractive to the retailer and satisfies property owner's demands.

Most big projects wouldn't have worked without TIF, Sedgewick said. The developer's "cost structure is too high," he said, "and the retailer's cost structure is too high. It just won't happen."

Increasingly, local governments are layering TIF and other subsidies on top of one another, sweetening the pot further. Chief among the enticements are transportation development districts and community improvement districts, which levy an additional sales tax on shoppers in a given area to finance roadwork, parking lots or other improvements. In Rock Hill, for instance, the new $38 million Market at McKnight shopping plaza, developed by Novus, has both an $11.6 million TIF and a $2.2 million transportation development district Manchester Highlands, developed by Pace Properties at Highway 141 and Manchester, tapped both programs to the tune of $55 million combined.

As TIF has grown more controversial, local officials have turned to the special districts. A decade ago, the St. Louis region had one transportation development district; today it has 75. Community improvement districts have proliferated, too. Five years ago, the region had just a handful. By last year, there were 44.

Supporters say these programs are a fairer way to finance development. The taxes, after all, are only paid by people who shop there, and who presumably benefit from the project. They don't rob funds from school districts or other local governments that rely on property taxes.

But critics say transportation development districts and community improvement districts effectively raise the price of everything sold at those stores, with little public accountability. The boards that run them are elected by property owners in the district ­ often the developers themselves. Besides a line on a receipt, consumers often get no notice they are shopping in one of these districts.

"In many cases, people are unknowingly paying higher taxes," said Tom Duda, a Show-Me Institute researcher who tracks these districts.

All this money to finance retail saps other efforts to grow our economy, said St. Charles County Executive Steve Ehlmann. He's been a vocal critic of this system for years, and says we need to focus more on regional efforts to create real jobs.

"You can't just call anything economic development and justify it," he said. "This is just one city at the expense of another, or St. Charles County at the expense of St. Louis County."

THE BLUFF

But that's the way our system works, TIFs defenders say.

Railing against TIF misses the point, said Greg Smith, a lawyer with Husch Blackwell in Clayton who has represented cities and developers in incentive deals. It's not designed to create jobs but rather to help St. Louis-area cities patch holes in their budget.

"The real issue is why don't we plan or deliver services regionally," Smith said. "That's the crux of it, not which tools we use."

Still, the high costs of TIF are clear, and all the sales tax money it attracts is just shifting around.

Consider Gravois Bluffs in Fenton, which got incentives totaling $80 million. Its success helped empty out Crestwood Plaza, just six miles away. St. Louis Mills, built in Hazelwood with a $18.5 million TIF and a $34 million transportation development district, helped finish off St. Ann's Northwest Plaza.

If incentives are available, said LeRoy, from Good Jobs First, they should be focused on older, low-income areas, where residents lack access to basic amenities.

"Start where people otherwise would have to take a long bus ride to buy dinner," he said.

But pouring public money into shopping plazas in places where the average household income tops $110,000 a year ­ as it does in the West County neighborhoods around Manchester Highlands ­ makes little sense. Wal-Mart, Target and Best Buy will find a way to tap the spending power of 2.8 million St. Louisans, said Les Sterman, a vocal TIF critic in the years he led the East-West Gateway Council of Governments. And maybe they won't leave so many empty shells ­ and dying strip malls like Cypress Village ­ behind.

"There's no reason you should ever subsidize a Walmart," he said. "Their customers are here. They have to serve their customers."

Copyright 2010 www.STLtoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Posted in Local, Metro, Compete on Monday, November 15, 2010 4:00 am Updated: 8:56 pm. | Tags: Can St. Louis Compete?, Real Estate, Development, Economy, Retail, Tax Increment Financing, Incentives, Tim Logan, David Nicklaus, Transportation Development District, Tax Credits,

Thanksgiving/Thanksgrieving ANS

Here is a little message for Thanksgiving, bittersweet though it is....
Find it here:  http://www.facebook.com/home.php?sk=lf#!/note.php?note_id=461675776511&id=748440090   
--Kim

Thanksgiving/Thanksgrieving

by Sean Dennison on Wednesday, November 24, 2010 at 6:00pm

Each year this day comes around and I am torn. I believe in gratitude, I really do. I have so much to be thankful for: great kids, family, partner, puppies, friends; a job I love in a congregation full of great people; hand-knit rainbow socks keeping my feet warm; a new massage chair given by generous people I barely know; a house with great light and a view that soothes my soul; satisfying service to my beloved seminary; a world that keeps me astounded and grounded with its beauty and need; people that challenge me and help me grow into the person I yearn to be; good health that I have not earned; sacred connections with so many and so much that I would call G-d. Gratitude abounds.

 

And yet, this day is also a day of stories created to obscure the truth and replace it with a fairy tale. The Thanksgiving story of Pilgrims and Indians is not true, friends. It is a fiction. It exists to make us proud of accomplishments we have not made--we have not yet befriended the Indian, have not welcomed the gifts of the people of this land. We have yet to sit down in peace with any of the people we used to build this nation: the Indian, the slave, the poor, the immigrant. The stories of peace are false prophecies--the worst kind of blasphemy.

 

As a nation, we have never repented of our desire to own land, things and people that are not ours. We have not even begun to turn away from these crimes and the deeper theft of dignity from ourselves and each other. We have not changed our desire to acquire or the way our armies march to the beat of "more More MORE." We still measure our success by what we have, not what we give.  The story exists to make it seem as if the work is already done. But it is not so.

 

On Thanksgiving, most of us will watch a parade that subtly (and not so subtly) directs us to continue to consume, to desire, even to demand more things.  It will not entreat us to go gently on the earth or to ask "How much is enough? What is fair and sufficient?"  It will not teach us that to be happy we need not have more, we only need to value what we have. Many of us will then watch football and never be reminded to care for the widow, the orphan, the poor, the weak, the "least of these." We will sit down at a feast and give thanks, but most of us will not turn that gratitude into action. We will not feed the hungry. We will not clothe the naked. We will not shelter the homeless.  We will not visit the imprisoned. We will not bind the wounds of the broken. How could we? We will never see them.

 

The stories we tell at this time of year make us feel good. Native Americans show the Pilgrims how to survive the winter. A tree grows in Brooklyn. Ebeneezer Scrooge learns to give. Clarence gets his wings and Bedford Falls is saved. A red-nosed reindeer finds out that what makes him outcast also makes him special. But while we tell these stories, reality is obscured. Native Americans often do not survive the poverty, addiction, racism and violence that our society perpetuates.  Trees grow in fewer and fewer places--and rarely in neighborhoods where they might shelter or inspire the poorest and most vulnerable.  The generosity that overtakes Ebeneezer Scrooge is as unlikely as ever. Instead, Scrooge's hard-heartedness and greed  run rampant through our culture. Angels like Clarence seem nowhere to be found as our children jump from bridges, hang and shoot themselves.  Outcasts in our world are not allowed to lead, nor held up as heroes, and are not shown how to find the beauty of being themselves.

 

And so, I continue to call this day Thanksgiving/Thanksgrieving. While I wish with my whole heart that the stories were true, I will not forget that they are fiction--fiction meant to make me feel good, to lull me back to sleep, to invite me only to complacency and complicity. I will do my best to resist the way they obscure my vision of what I know to be true:that gratitude is made real by our actions and that this season will only be holy in proportion to our ability to embody its true values: compassion, equality, acceptance, generosity, peace--and most of all Love. Not sticky-sweet fairy tale love, but the Love that demands, the Love that pushes, the Love that knows the cold loneliness of a world with no room at the Inn and will not stop until every soul--every single soul--is redeemed.  

 

And so I grieve and reserve some part of my gratitude, some part of my thanks-giving until that time may come. And in the meantime, I will continue to tell as much truth as I can and do as much as I can to be part of making the new story come true.

 

May it be so. May we be the ones that make it so. Amen. Ashe'. And Blessed Be.

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• Scott McIsaac and 2 others like this.
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  • Karen Eng thank you for saying this so eloquently. i was thinking today about saying a blessing before tomorrow's meal, and i wandered off into this very message - we have much to be grateful for and we should have a time to reflect on that and what this is has little to do with pilgrims (or puritans) and native people.
  • 2 hours ago

Boundary Issues ANS

This is a little article by Maggie Jochild of Group News Blog.  I just re-read it and it hit me how significant it was.  It's about the government snooping and Facebook facilitating it.  Interesting....
Find it here:  http://www.groupnewsblog.net/2010/08/boundary-issues.html 
--Kim

Sunday, August 29, 2010

Boundary Issues

(Cover of the Portland Mercury the week Reagan died.)

During the early 1980s, as Reagan launched our current Hate Society, the back windshield of my Honda Civic was smashed one night and my car ransacked. But the only item taken was my address book in the glovebox -- not my tapedeck nor my case of tapes. not my tools or the stack of games visible in the back hatch, Just my address book.

I of course called the Lesbian Rights Project to report it because they were monitoring the reprisals against us, those of us in the group Lesbians Against Police Violence. I didn't call the cops because it was them, and/or their friends, who were doing this shit. One of my friends in the group had similarly had her house broken into and the only thing stolen was her dayrunner. Another friend had her truck towed despite it being legally parked, and when she got it back two days later, missing from it were her checkbook and journals.

Not long after my break-in, two group members lost their jobs after visits to their boss's office by men in suits, and a third friend, a mechanic in LAPV, had the old Volvo she had lovingly restored firebombed overnight. She quit the group amid tearful apologies, saying she was just too frightened.

It cost me $150 to replace my rear windshield at a time when I was living on $380 a month. After that, for several years I kept my address book in code, combining it with my datebook in a tiny leather clasp that never left my back pocket.

They still want that information about law-abiding citizens just as badly, only now they can buy it from Facebook. You can tell how eagerly FB wants this treasure trove of yours by how persistently they beseech those of us who have NOT given them access to our address files by trotting out the names of our friends who used the FB "Friend Finder" to locate that loser from 20 years ago you don't want to be in touch with anyhow.

Every time someone is gullible and lazy enough to allow FB to "access" your email list elsewhere, make no mistake about it, they are copying your data instantly and selling it. As a researcher, I know what kind of gold it contains, a veritable biography of your existence. My guess is that this revenue is FB's prmary moneymaker, given how assiduously they push it.

All to individually "save you the trouble" of typing in the names of the folks you actually do want to friend.

Do you REALLY believe the police state after eight years of Bush is less dangerous that that of the early 80s?

Pass . It . On .


Maggie Jochild 10:41 AM Comments (7)
 

Hiding From Reality ANS

Here's an opinion piece from the New York Times saying that we are in denial about how far we as a nation have dropped into the pit.
Find it here: http://www.nytimes.com/2010/11/20/opinion/20herbert.html?_r=2&hp
--Kim

Op-Ed Columnist

Hiding From Reality

By BOB HERBERT


Published: November 19, 2010

However you want to define the American dream, there is not much of it that's left anymore.
 

Damon Winter/The New York Times

Bob Herbert

Go to Columnist Page »

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Wherever you choose to look ­ at the economy and jobs, the public schools, the budget deficits, the nonstop warfare overseas ­ you'll see a country in sad shape. Standards of living are declining, and American parents increasingly believe that their children will inherit a very bad deal.

We're in denial about the extent of the rot in the system, and the effort that would be required to turn things around. It will likely take many years, perhaps a decade or more, to get employment back to a level at which one could fairly say the economy is thriving.

Consider this startling information from the Pew Hispanic Center: in the year following the official end of the Great Recession in June 2009, foreign-born workers in the U.S. gained 656,000 jobs while native-born workers lost 1.2 million. But even as the hiring of immigrants picked up during that period, those same workers "experienced a sharp decline in earnings."

What this shows is not that we should discriminate against foreign-born workers, but that the U.S. needs to develop a full-employment economy that provides jobs for all who want to work at pay that enables the workers and their families to enjoy a decent standard of living. In other words, a resurrection of the American dream.

Right now, nothing close to that is happening.

The human suffering in the years required to recover from the recession will continue to be immense. And that suffering will only be made worse if the nation embarks on a misguided crash program of deficit reduction that in the short term will undermine any recovery, and in the long term will make true deficit reduction that much harder to achieve.

The wreckage from the recession and the nation's mindlessly destructive policies in the years leading up to the recession is all around us. We still don't have the money to pay for the wars that we insist on fighting year after year. We have neither the will nor the common sense to either raise taxes to pay for the wars, or stop fighting them.

State and local governments, faced with fiscal nightmares, are reducing services, cutting their work forces, hacking away at health and pension benefits, and raising taxes and fees. So far it hasn't been enough, so there is more carnage to come. In many cases, the austerity measures are punishing some of the most vulnerable people, including children, the sick and the disabled.

For all the talk about the need to improve the public schools and get rid of incompetent teachers, school systems around the country are being hammered with dreadful cutbacks and teachers are being let go in droves, not because they are incompetent, but strictly for budget reasons. There was a time when the United States understood the importance of educating its young people and led the way in compulsory public schooling. It also built the finest higher education system in the world. Now, although no one will admit it publicly, we've decided to go in another direction.

In New York City, for example, Mayor Michael Bloomberg's choice to run the public school system is Cathleen Black, a wealthy corporate executive with no background in education whose children attended expensive private schools. Mr. Bloomberg has asserted that Ms. Black's management expertise will be a boon to the city's public school children. But the truth is that Ms. Black, if she gets a necessary waiver for her new job, will be presiding over budget cuts that can only hurt the schools. As part of a proposed austerity budget, the mayor is planning to eliminate the jobs of thousands of public school teachers over the next two years. Take that, kids.

We've become a hapless, can't-do society, and it's, frankly, embarrassing. Public figures talk endlessly about "transformative changes" in public education, but the years go by and we see no such thing. Politicians across the spectrum insist that they are all about job creation while the employment situation in the real world remains beyond pathetic.

All we are good at is bulldozing money to the very wealthy. No wonder the country is in such a deep slide.

We don't even seem to realize how deep a hole we're in. If student test scores jumped a couple of points or the jobless rate fell by a point and half, the politicians and the news media would crow as if something great had been achieved. That's how people behave when they're in denial.

America will never get its act together until we recognize how much trouble we're really in, and how much effort and shared sacrifice is needed to stop the decline. Only then will we be able to begin resuscitating the dream.

A version of this op-ed appeared in print on November 20, 2010, on page A19 of the New York edition

The Top 10 Lies Entrepreneurs Tell VCs ANS

Here's an interesting article -- and short too.  It's supposed to be amusing, but it's really just the plain truth.... About venture capital. 
Find it here:  http://blogs.wsj.com/venturecapital/2010/11/17/the-top-10-lies-entrepreneurs-tell-vcs/  
--Kim

The Top 10 Lies Entrepreneurs Tell VCs

By Venture Capital Dispatch

The following dispatch comes from Ben Rooney, the technology editor of The Wall Street Journal Europe:

The Dublin SmartCamp 2010 final is a grand affair. The main sessions are housed in the same building in which the first Dáil Éireann sat ­ and was apparently built in eight weeks which is a lot faster than a lot of start-ups.  

Everett Collection

Sitting in on a very funny presentation by Bill Reichert, managing director of Garage Technology Ventures, gave the entrepreneurs advice on how to raise funds, and more importantly how to talk to VCs.

His best slide of all ­ the top 10 lies entrepreneurs tell VCs:

1. Our projections are conservative
2. Our target market is $56 billion
3. We have a world class team
4. Our average sales cycle is 90 days
5. We have no direct competitor
6. No one else can do what we do
7. All we need is 2% of the market
8. Well be cash positive in 12 months
9. Our contract with [Big Company] will be signed in two weeks
10. I'll be happy to hand over the reins to a new CEO

He did admit the top three lies that VCs tell entrepreneurs:

1. I love your company, I just can't get it through our partners
2. We are really interested in investing in you, we just need to see a bit more traction
3. … and the one that got the biggest laugh ­ We really add value

He also confessed the real reason why VCs invest in start-ups. "VCs do not invest with their brains. They invest with companies that they fall in love with. Then they use their brains to rationalize their decision.

"What causes a VC to fall in love with a company. Most VCs fall in love with the entrepreneur."

They Said They Would Push Me "Off a Cliff" ANS

Here's an interesting article by Michael Moore.  Did you see Sicko?  The big health insurance companies tried to stop you from seeing it.  Did they succeed?
Find the article here:  http://www.michaelmoore.com/words/mike-friends-blog/they-said-they-would
--Kim


November 17th, 2010 11:16 AM

They Said They Would Push Me "Off a Cliff"

 

 1 of 1

By Michael Moore

Yesterday, on the TV and radio show "Democracy Now" hosted by Amy Goodman, the former Vice President of CIGNA, one of the nation's largest health insurance companies, revealed that CIGNA met with the other big health insurers to hatch a plan to "push" yours truly "off a cliff."

The interview contains new revelations about just how frightened the health industry was that "Sicko" might ignite a public wave of support for "socialized medicine." So the large health insurance companies came together over a common cause: Stop the American people from going to see "Sicko" -- and the way to do that was to cause some form of harm to me (either personally, professionally or...physically?).

Take a look at this stunning section of the interview with Wendell Potter:

WENDELL POTTER [former executive, CIGNA]: ...We were concerned that the movie ["Sicko"] would be as successful as "Fahrenheit 9/11" had been. And we knew that if it were, it really would change public opinion about our health care system in ways that would be harmful to the profits of health insurers. So, it was very important for this [attack] campaign to succeed. At one point during a strategy meeting, one of the people from [the insurance companies' public relations firm] APCO said that if our efforts, our initial efforts, were not successful, then we'd have to move to an element of the campaign to push Michael Moore off a cliff. And not meaning to do that literally, but to­

AMY GOODMAN: Are you sure?

WENDELL POTTER: Well, I'm not sure. To tell you the truth, when I started doing what I'm doing [as a whistleblower], I was concerned about my own health and well-being, maybe just from paranoia. But these companies play to win. And we're talking about some big bucks at stake here­billions and billions and billions of dollars.

AMY GOODMAN: So what were they talking about when they said, "If this doesn't work, we're going to push him off the cliff"?

WENDELL POTTER: Well, it would be just an incredibly intense PR effort, if necessary, to spend more premium dollars to defame Michael Moore, to discredit him even more as a filmmaker.

AMY GOODMAN: So, were you doing research on him?

WENDELL POTTER: Oh, yeah. Oh, yeah.

AMY GOODMAN: You were going­personally?

WENDELL POTTER: Well, I was a part of the effort. I didn't­that was part of the reason for hiring APCO and to work with a trade association, is that it relieved me of the responsibility of doing that kind of work. You paid for it to be done by people who were experts in doing that kind of research.

AMY GOODMAN: But they were doing an investigation into him personally?

WENDELL POTTER: Well, absolutely. We knew as much about him probably as he knows about himself.

AMY GOODMAN: About his wife, about his kid, about­

WENDELL POTTER: Oh, yeah. You know, it's important to know everything that you might be able to use in some kind of a campaign against someone, to discredit them professionally and often personally.

AMY GOODMAN: And did you use that?

WENDELL POTTER: You use it if necessary.

The interview goes on as Potter reveals how his front group was able to get its talking points and smears into stories in the New York Times and CNN. It is a chilling look inside how easy it is to manipulate our mainstream media -- and just how worried the health insurance companies were that the American people might demand a true universal health care system.

In particular, Potter talks about how they may have succeeded in influencing CNN to run a factually untrue story about "Sicko" by its reporter, Sanjay Gupta (which led to my infamous encounter with Wolf Blitzer and later, an apology from CNN for getting their facts wrong).

Potter believes his work to defame "Sicko" succeeded, as the film didn't end up posting "Fahrenheit 9/11" grosses. To be clear, "Sicko" went on to become the 3rd largest grossing documentary of all time at that point. And as the release of "Sicko" in June of 2007 was the first time since the defeat of Hillary Clinton's healthcare bill in 1994 that the issue of health insurance was brought to the forefront of the national media, I believe it helped to reignite the issue during the 2008 election year by exposing millions of Americans to the truth about the health insurance industry. More than one person on Capitol Hill will admit that "Sicko" was a big help in rallying public support for the compromise bill that eventually passed earlier this year. But I agree, their smear campaign was effective and did create the dent they were hoping for -- single payer and the public option never even made it into the real discussion on the floor of Congress.

(There was really only one reason "Sicko" didn't sell as many tickets as "Fahrenheit" and that was because of a felony that was committed -- a felony that I will discuss for the first time on this site in the coming weeks or months ahead. Stay tuned.)

Please read or watch the entire interview with Wendell Potter. It's a fascinating peek behind the curtain of how corporate America really runs this country. And how if any of us get in their way, then those people must be stopped. It begs the question: Seeing how there's more of us than there are of them, how long will we let their takeover of our democracy continue?

God Bless the Ruling Class,
Michael Moore

P.S. Over the next few days I will continue this examination of the Wendell Potter revelations on "Democracy Now" and in his new book. Please check in here on MichaelMoore.com.

The 'Israelification' of airports: High security, little bother ANS

Here's an interesting article about airport security -- and how they do it in Israel, where they know how to do it.  Ours is just security theater, in Israel they are serious --  both about catching the bad guys and about not delaying travelers much. 
Find it here:  http://www.thestar.com/news/world/article/744199---israelification-high-security-little-bother  
--Kim

The 'Israelification' of airports: High security, little bother

Published On Wed Dec 30 2009

Cathal Kelly Staff Reporter


While North America's airports groan under the weight of another sea-change in security protocols, one word keeps popping out of the mouths of experts: Israelification.

That is, how can we make our airports more like Israel's, which deal with far greater terror threat with far less inconvenience.

"It is mindboggling for us Israelis to look at what happens in North America, because we went through this 50 years ago," said Rafi Sela, the president of AR Challenges, a global transportation security consultancy. He's worked with the RCMP, the U.S. Navy Seals and airports around the world.

"Israelis, unlike Canadians and Americans, don't take s--- from anybody. When the security agency in Israel (the ISA) started to tighten security and we had to wait in line for ­ not for hours ­ but 30 or 40 minutes, all hell broke loose here. We said, 'We're not going to do this. You're going to find a way that will take care of security without touching the efficiency of the airport."

That, in a nutshell is "Israelification" - a system that protects life and limb without annoying you to death.

Despite facing dozens of potential threats each day, the security set-up at Israel's largest hub, Tel Aviv's Ben Gurion Airport, has not been breached since 2002, when a passenger mistakenly carried a handgun onto a flight. How do they manage that?

"The first thing you do is to look at who is coming into your airport," said Sela.

The first layer of actual security that greets travellers at Tel Aviv's Ben Gurion International Airport is a roadside check. All drivers are stopped and asked two questions: How are you? Where are you coming from?

"Two benign questions. The questions aren't important. The way people act when they answer them is," Sela said.

Officers are looking for nervousness or other signs of "distress" ­ behavioural profiling. Sela rejects the argument that profiling is discriminatory.

"The word 'profiling' is a political invention by people who don't want to do security," he said. "To us, it doesn't matter if he's black, white, young or old. It's just his behaviour. So what kind of privacy am I really stepping on when I'm doing this?"

Once you've parked your car or gotten off your bus, you pass through the second and third security perimeters.

Armed guards outside the terminal are trained to observe passengers as they move toward the doors, again looking for odd behaviour. At Ben Gurion's half-dozen entrances, another layer of security are watching. At this point, some travellers will be randomly taken aside, and their person and their luggage run through a magnometer.

"This is to see that you don't have heavy metals on you or something that looks suspicious," said Sela.

You are now in the terminal. As you approach your airline check-in desk, a trained interviewer takes your passport and ticket. They ask a series of questions: Who packed your luggage? Has it left your side?

"The whole time, they are looking into your eyes ­ which is very embarrassing. But this is one of the ways they figure out if you are suspicious or not. It takes 20, 25 seconds," said Sela.

Lines are staggered. People are not allowed to bunch up into inviting targets for a bomber who has gotten this far.

At the check-in desk, your luggage is scanned immediately in a purpose-built area. Sela plays devil's advocate ­ what if you have escaped the attention of the first four layers of security, and now try to pass a bag with a bomb in it?

"I once put this question to Jacques Duchesneau (the former head of the Canadian Air Transport Security Authority): say there is a bag with play-doh in it and two pens stuck in the play-doh. That is 'Bombs 101' to a screener. I asked Ducheneau, 'What would you do?' And he said, 'Evacuate the terminal.' And I said, 'Oh. My. God.'

"Take Pearson. Do you know how many people are in the terminal at all times? Many thousands. Let's say I'm (doing an evacuation) without panic ­ which will never happen. But let's say this is the case. How long will it take? Nobody thought about it. I said, 'Two days.'"

A screener at Ben-Gurion has a pair of better options.

First, the screening area is surrounded by contoured, blast-proof glass that can contain the detonation of up to 100 kilos of plastic explosive. Only the few dozen people within the screening area need be removed, and only to a point a few metres away.

Second, all the screening areas contain 'bomb boxes'. If a screener spots a suspect bag, he/she is trained to pick it up and place it in the box, which is blast proof. A bomb squad arrives shortly and wheels the box away for further investigation.

"This is a very small simple example of how we can simply stop a problem that would cripple one of your airports," Sela said.

Five security layers down: you now finally arrive at the only one which Ben-Gurion Airport shares with Pearson ­ the body and hand-luggage check.

"But here it is done completely, absolutely 180 degrees differently than it is done in North America," Sela said.

"First, it's fast ­ there's almost no line. That's because they're not looking for liquids, they're not looking at your shoes. They're not looking for everything they look for in North America. They just look at you," said Sela. "Even today with the heightened security in North America, they will check your items to death. But they will never look at you, at how you behave. They will never look into your eyes ... and that's how you figure out the bad guys from the good guys."

That's the process ­ six layers, four hard, two soft. The goal at Ben-Gurion is to move fliers from the parking lot to the airport lounge in a maximum of 25 minutes.

This doesn't begin to cover the off-site security net that failed so spectacularly in targeting would-be Flight 253 bomber Umar Farouk Abdulmutallab ­ intelligence. In Israel, Sela said, a coordinated intelligence gathering operation produces a constantly evolving series of threat analyses and vulnerability studies.

"There is absolutely no intelligence and threat analysis done in Canada or the United States," Sela said. "Absolutely none."

But even without the intelligence, Sela maintains, Abdulmutallab would not have gotten past Ben Gurion Airport's behavioural profilers.

So. Eight years after 9/11, why are we still so reactive, so un-Israelified?

Working hard to dampen his outrage, Sela first blames our leaders, and then ourselves.

"We have a saying in Hebrew that it's much easier to look for a lost key under the light, than to look for the key where you actually lost it, because it's dark over there. That's exactly how (North American airport security officials) act," Sela said. "You can easily do what we do. You don't have to replace anything. You have to add just a little bit ­ technology, training. But you have to completely change the way you go about doing airport security. And that is something that the bureaucrats have a problem with. They are very well enclosed in their own concept."

And rather than fear, he suggests that outrage would be a far more powerful spur to provoking that change.

"Do you know why Israelis are so calm? We have brutal terror attacks on our civilians and still, life in Israel is pretty good. The reason is that people trust their defence forces, their police, their response teams and the security agencies. They know they're doing a good job. You can't say the same thing about Americans and Canadians. They don't trust anybody," Sela said. "But they say, 'So far, so good'. Then if something happens, all hell breaks loose and you've spent eight hours in an airport. Which is ridiculous. Not justifiable

"But, what can you do? Americans and Canadians are nice people and they will do anything because they were told to do so and because they don't know any different."