Thursday, January 31, 2008

My call-in debut on the "Diane Rhem Show"

I couldn't help but call into Monday's show on Michael Reid's new book "Forgotten Continent: The Battle for Latin America's Soul." After I heard Mr. Reid's amnesiac reference to US intervention "not being decisive" in the wave of free-market dictatorships that displaced leftist governments in Latin America I almost swore off The Economist for good (where Reid works). Of course, The Economist's evaluation of Pinochet was that he "rescued Chile from communism and went to turn it into the fastest-growing economy in Latin America by applying free market policies." The Economist also called Pinochet's rise to power a "counterrevolution." Even an undergrad who sleeps through Poli Sci 101 knows the difference between widespread popular support for a counterrevolution and A COUP! One involves people protesting the government, holding referendums, etc. The other involves tanks storming government office buildings.

This miraculous turnaround The Economist attributes to Pinochet included a 15% drop in national output, an increase in unemployment to 20%, and 15% average wage reduction. Chile’s GDP in 1986 had only regained the 1970 level (under Allende), real wages were still depressed, per capita consumption was 15% lower. Between 1985 and 1990 the income of the top 10% increased by 90% while the share of wealth for the poorest 25% declined from 11% to 7%. The share of national income for labor fell from 47.7% in 1970 to 19% in 1990.

Would that Latin America did become the "Forgotten Continent" - they'd be a hell of a lot better off.

Monday, January 21, 2008

Another Reason Why President Bush . . . . . Ranks Rather Low On My Top 10 List

I'm doing research for a paper and I came across a trade newsletter published by CCH (A Tax and Accounting Firm) on the new changes to tax law encompassed in the 2004 American Jobs Creation Act (which is, ironically, a huge subsidy to multinational corporations, agribusiness and energy companies in addition to US manufacturers). Although the bill did have some good aspects (like capping the SUV deduction at $25,000 - the deduction for a vehicle under 6,000 pounds is still capped at $2,960, the lesson here being: go buy a house on wheels and you can deduct $25,000 of its cost on your taxes -nice) most of it was NEW tax breaks for corporations. The CCH newsletter (by no means a mouthpiece for a progressive or liberal institution) estimated that the majority of companies claiming the new tax deductions had never qualified for these deductions before. And the cost - just about $175 billion. But wait, it gets better.

Here's how it all began. This was the culmination of decades of back and forth between the US and EU at the GATT/WTO dispute settlement courts. It began in 1971 when the US enacted the Domestic International Sales Corporation (DISC) export tax benefit (a benefit to exporters to counter the increasing incentive for US corporations to move their operations abroad). The EU countries responded by filing a complaint that DISC was a prohibited export subsidy. A GATT panel ruled in favor of the EU countries, and the US replaced DISC in 1984 with the Foreign Sales Corporation (FSC) provisions, with the goal of achieving GATT legality. U.S. companies have routinely set up Foreign Sales Corporations—often only offshore shell companies—through which they have been able to export their wares without paying US tax on the profits.

The EU filed a complaint against this as well, and in response the US enacted the ETI (Extraterritorial Income) provisions in 2000 (you can guess how that turned out). So, in October 2002 Congress passed PL 108-357 (aka the American Jobs Creation Act) which repealed the ETI while providing tax cuts for the overseas operations of US firms.

So - more supply-side economics. But, the best part is this CCH newsletter (and remember, this is language coming from tax attorneys - the people who get PAID to find tax shelters. Their evaluation of the bill is as follows:

"Until this past week, Washington insiders believed that the FSC/ETI bill would contain many new and tough anti-tax shelter provisions. The same measures, such as new curbs on corporate inversions and foreign leasing deals and codifying the economic substance doctrine, had been dropped from earlier bills. The FSC/ETI bill was seen as the last, best hope for these measures. Instead, Congress voted not to include the majority of them in the final bill. They also left out language requiring corporate CEOs to verify the accuracy of their business income tax returns or protecting whistleblowers."


Last, but not least, the fine employees at CCH want you to know that taxpayer-friendly incentives were approved for the following:
(1) manufacturers and importers of bows and arrows
(2) manufacturers of tackle boxes and sonar fish finders
(3) Independent film and video producers (including I'm assuming, pornographers)
(4) Wholesale distributors of distilled spirits
(5) Native Alaskan whalers
(6) Nascar track owners
(7) farmers cooperatives

So now you can get drunk, show your friends your impression of Tom Cruise in "Born on the 4th of July," whack off, shoot your companion in the foot with an arrow and harpoon yourself an endangered narwhale with the aid of your new tacklebox all for a lot less money. You can send your thank you notes to the White House care of the NRA/Nascar Political Action Committee.

Sunday, January 20, 2008

Op-Ed in Washington Post on Surge's Failure

Here's a great article in today's Washington Post by Andrew Bacevich "Surge to Nowhere." Juan Cole's commentary is equally interesting. I've reproduced it below - from his blog 'Informed Comment.'

Iraq is Still a Bad Bargain
by Juan Cole

Andrew Bacevich eviscerates the Iraq War party with this passionate and clear-sighted essay on 'the Surge to Nowhere' in WaPo. He points out that the real motivation behind last year's troop escalation was to avoid popular outrage building in the US electorate to the point where the troops were pulled out. He observes that the argument for the 'success' of the 'surge' is purely a tactical one. When viewed from the vantage point of grand strategy, the Iraq War is as much a failure as it has always been.

If someone came to you six years ago and said that for only $2 trillion, you could have for your colony a burned out country, a failed state, and a semi-permanent incubator of terrorism and hatred against the US, would you have ponied up the money? That's what you've got, and that is what it cost you. Detroit could have used some of that money. New Orleans could have used some of that money. Appalachia has lots of schools that need to be painted.

The argument could be made that Israel is safer with Saddam Hussein out of power. But that argument does not hold water. Current Iraqi leaders such as Muqtada al-Sadr and Adnan Dulaimi are not less anti-Israel than Saddam, and it turns out he did not have WMD with which to attack Israel anyway. The Shiites of Iraq will certainly side with Hizbullah against Israel, which may actually mean that Israel is less secure now than before. Moreover, to have substantial turmoil on their doorstep just cannot be good for the Israelis.

You could argue that US petroleum corporations are now well placed to bid on Iraqi oil development. But what with doomsday cults planning a takeover of the petroleum facilities, it will be some time before it is safe for US corporations to operate in Iraq. China and Holland (Shell) are being looked upon favorably by the Iraqi government as investors.

And anyway, if the US government had thrown the $2 trillion and more that Iraq will end up costing at green energy development, both we and the earth would have been far better off. At a time when the US military is paying 60,000 Sunni Arab Iraqis $300 a month each not to fight us, it is pretty hard to justify letting the US working class sink, without any government help, into penury and homelessness in the face of the mortgage crisis and the recession. The Iraq War may or may not be good for Houston. It is certainly bad for Iraq and for everyone else.

The current round of optimism about Iraq in the Washington press corps will eventually falter against the country's hard realities, just as have previous such rounds. Or maybe worrying about Iraq and continued US troop deaths there is so yesterday for the punditocracy in DC.

The optimism is a planted story, a sleight of hand produced by looking at tactics rather than at strategy, or by making comparative statements (Iraq has less violence today than it did in the volcanic period a year ago) which obscure absolute reality (Iraq is very unstable and dangerous).

What the snake oil merchants like Fred Kagan and Bill Kristol (both of them hard right Zionists) are really saying is that if you just give them $2 trillion more, and are willing to expend another 12,000 killed and wounded American young people, boy do they have a deal on a neo-colony for you.

Fool me once, shame on you. Fool me twice-- can't get fooled again.

Friday, January 18, 2008

Some Truth on the US-Iranian "Showdown" in the Persian Gulf

The Institute for Policy Studies (IPS) has a nice comprehensive piece on the Bush Administration's effort to mischaracterize the recent encounter between US Naval ships and Iranian speed boats in the Persian Gulf. As usual, there was some 'creative' editing and interpretation of the audio tapes and video taken during the encounter. It reminds me of the incident when members of the British navy were taken hostage by the Iranian military for being on the wrong side of the line that separates the Iranian coast from international waters. A few days after the incident I attended a presentation on Iraqi military organization at the University of Maryland and I spoke with a US officer who said the British boat probably was in Iranian waters and that such incursions probably happen "all the time."

Thursday, January 17, 2008

Another Hole in the Free Trade Ideology

A recent article in the Economist pokes yet another hole in the increasingly fragile ideology of free trade (and it has become an ideology - accepted as unbiased science, when it is anything but). The highlight of the article is that China's astronomical economic growth rates are not as driven by exports as numbers suggest (that's because exports are measured as gross revenue; while GDP is measured in value-added terms - that means the value of foreign inputs used in exports isn't subtracted - so it makes exports seem greater than they actually are). This contradicts the free-market mantra that export-led growth is the best way to realize an increase in national wealth. The numbers for China suggest that investment is more responsible for China's economic miracle than exports. Add this to the debunked myth of the Asian "Tiger" economies achieving growth following the "Washington Consensus" policies (we now know there was significant government intervention in their economies). Neoliberal economics may be a beautiful parsimonious theory - but so was Ptolemy's model of the universe.

Wednesday, January 16, 2008

Chavez vs King Abdullah: The Perfect Example of US Hypocrisy

The Bush Administration has went to great pains to paint Venezuela's Hugo Chavez as an extremist; and in Bush's words a "killer" and a "madman." At the same time Bush is meeting with Saudi King Abdullah - the leader of one of the world's most repressive regimes, and handing over $20 billion in military aid to the Gulf countries. Desperate to ensure that the members of the Gulf Cooperation Council continue to tow the US line in its hostility against Iran, no amount of sophisticated weaponry is too small. Although, like the US is losing its imperialist grip on Latin America (the IMF, the World Bank and the Free Trade Area of the Americas are being replaced by indigenous institutions), the GCC states are also rejecting US demands for a regional boycott of Iran - it's no coincidence that Bush visited Saudi Arabia - just months after Ahmadinijad made his third visit.

It's troubling how transparent and philosophically bankrupt the Bush Administration's foreign policy has become. Any government advocating for policies that don't allow the market free-reign are automatically labeled extremist threats. But it seems BUsh and his cronies are increasingly alone in their estimations. Chavez, on his platform of "21st Century Socialism" was re-elected in 2006 with 63% of the vote. A 2006 poll reported that 57% of Venezuelans were happy with the state of their democracy. An Associated Press poll of US citizens at the same time found less than 30% of respondents happy with the direction of their country.

Regardless of its PR value, Venezuela's donation of oil to low-income families in the Northeast US to heat their homes throughout the cold winter is the type of policy the Bush Administration should be pursuing - rather than shipping billions of dollars of subsidized weapons to the Middle East.

Chavez respects election results - in Saudi Arabia the only elections are municipal ones - so you can choose your local auditor and dog-catcher.

Chavez (along with the leaders of Costa Rica, Argentina and Uruguay) has also pledged never to send students from his country to the notorious School of the Americas (re-named the Western Hemisphere Institute for Security Cooperation) that trained Latin American military and policemen in torture techniques to maintain the free-market regimes of Pinochet, Argentina's military junta and Uruguay's right-wing government during the 60s and 70s.

Here's why Chavez may be such a threat to the US: the Venezuelan government's efforts to protect against the ravages of an unadulterated free-market are reversing the policies that made Latin America a US-corporate fiefdom under Pinochet and his ilk. Perhaps US citizens will one day realize that their own government is failing to implement some of the basic regulations that would prevent corporations from exploiting them:

"In Venezuela, Chavez has made co-ops a top political priority, giving them first refusal on government contracts and offering them economic incentives to trade with one another. By 2006 there were roughly 100,000 co-operatives in the country employing more than 700,000 workers. Chavez's many critics have derided these initiatives as handouts and unfair subsidies, of course. Yet in an era when Haliburton treats the US government as its personal ATM for six years, withdraws upwards of $20 billion in Iraq contracts alone, refuses to hire local workers either on the US Gulf Coast or in Iraq, then expresses its gratitude to US taxpayers by moving its corporate headquarters to Dubai (with all the attendant tax and legal benefits), Chavez's direct subsidies to regular people look significantly less radical." (Naomi Klein, The Shock Doctrine, pg 455).

Tuesday, January 15, 2008

Nevada Supreme Court Rules in Favor of NBC; Against Kucinich

Not that I ever watch NBC (or its affiliates) for genuine news - but if all sources of legitimate information suddenly went off the air except for NBC, I STILL wouldn't watch it. The fact that a privately-owned for-profit media outlet can determine who participates in the debates (rather than some disinterested third party) is downright criminal. And it turns out - so is NBC's corporate owner - General Electric. Below is an article (old, but good) from media watchdog FAIR (Fairness in Accuracy and Reporting)

Extra! November/December 1994

Felons On The Air: Does GE's Ownership of NBC Violate the Law?
NBC Brings Good Things to GE

By Sam Husseini

General Electric's ownership of the NBC TV network has been in the news in recent months. As Extra! went to press, companies like Time Warner, Disney, ITT and Turner Broadcasting have reportedly been negotiating to either buy NBC outright or enter into some kind of partnership with GE. But a little-noted aspect of communications law raises questions about GE'sownership of NBC's broadcast licenses -- and its ability to sell those licenses to another company.

Shady Characters

The Federal Communications Act of 1934 created the Federal Communications Commission to regulate the airwaves, which are considered public property. The act states that the FCC should assess the "character...of the applicant to operate the station," and ensure that the "public interest...would be served by the granting" of a license.

Despite a general decline in the FCC's enforcement of the public interest aspect of this law, there is at least one factor that the FCC still considers before granting a license: whether the applicant has committed a felony.

In 1989, Rep. John Dingell (D-Mich.), who chairs the House Energy and Commerce Committee, complained of FCC laxness in examining felons (Broadcasting, 1/1/90); his office said the policy "represents one of the excesses of the last eight years." This apparently led the FCC to issue a statement saying it would "consider all felony convictions," as well as "misdemeanors in certain circumstances," as factors in granting or renewing broadcast licenses. This announcement toughened a policy that had been weakened in 1985.

Shortly thereafter, the FCC revoked the broadcast license of WFXL-TV in Georgia because the license-holder was an individual convicted of laundering drug money. The FCC also denied the licensee's appeals to be able to sell the station, forcing him to forfeit his investment (Broadcasting, 8/12/91).

Not all felons have been treated so harshly. Alan Gottlieb, an anti-environmental, pro-gun activist who helped raise money for the 1988 Bush/Quayle campaign, was convicted of tax evasion in the mid-'80s. Though he was denied a gun permit for a time, he was granted the license for KBNP in Portland, Ore. in 1989.

Gottlieb, who also owns a chunk of the Talk America radio network, told Extra! that he disclosed his felony conviction to the FCC, but they still allowed him to purchase the station; apparently he convinced the FCC that his felony was due to a record-keeping mistake. To Gottlieb's knowledge, no one has contested his license.

A corporation, like an individual, can also lose its license on character grounds. "If you're going to permit corporate licenses in the first place -- which is questionable -- you've got to apply the same standard" to corporations and individuals, former FCC commissioner Nicholas Johnson told Extra!.

Broadcasting reported in 1991 (3/25/91) that "the FCC was considering holding license revocation hearings" for WNCN-FM in New York after its parent company, GAF, was convicted of securities fraud. The FCC dropped the matter after the conviction was overturned on appeal.

Even without a felony conviction, a corporate entity can lose its license because of character questions. In a prolonged case, the FCC decided not to renew the licenses of 14 of the TV and radio stations owned by RKO General ,a subsidiary of General Tire (now GenCorp). "The FCC decision was not based on the quality of broadcast service...but on the question of RKO's corporate integrity," Fortune noted (4/21/80). "General Tire was maintaining slush funds for such uses as improper overseas payments and questionable campaign contributions," Time later reported (8/24/87), and "allegedly filed false and misleading financial statements." Of particular concern was RKO's lack of candor in reporting these wrongdoings to the FCC.

RKO was stripped of one station (Boston's WNAC-TV) without compensation, and was forced to sell other stations for less than full market value, resulting in major financial losses.

Citizen GE

These cases would pale in significance if the FCC applied the "character question" to NBC's parent. As the owner of the network, GE controls the licenses for NBC's six owned-and-operated TV affiliates. These stations, located in key markets, are worth an estimated $2.5 billion.

But these assets could be threatened if the FCC ruled that GE's criminal record -- including a host of fraud, environmental, financial and employment violations -- made the corporation unfit to hold broadcasting licenses. (See Extra!, 6/92.) As William Greider writes (Rolling Stone, 4/16/92), "Citizen GE practices its everyday politics unhindered by its status as a convicted felon."

When GE acquired NBC's licenses, the rules were somewhat looser. On Dec.10, 1985, the FCC relaxed the policy on character qualifications, declaring that a large corporation could be held responsible for felonies only if the heads of the corporation or those directly involved in the broadcasting aspect were the wrongdoers. The very next day, GE announced it would buy NBC's parent, RCA, for $6.2 billion. (The timing, of course, was completely coincidental -- as was the fact that GE chair Jack Welch was an old friend of then-President Ronald Reagan, who had gotten his start in politics largely thanks to GE.)

GE was a direct beneficiary of the new FCC policy, as an AP report noted the following year (6/5/86): "Acting for the first time under a new policy on judging the 'character' of broadcast licensees, the commission determined there was no reason to deny the license transfers because GE had rehabilitated itself [since pleading guilty to fraud charges in 1985] and convinced the government it had taken steps to insure that similar violations would not happen again."

GE's Rap Sheet

But despite the FCC's faith in GE's redemption, the corporation has returned to its criminal ways repeatedly since it took over NBC. A partial sampling of its rap sheet since then:

In 1990, GE was "convicted of defrauding the Defense Department by overcharging the Army for a battlefield computer system." (Fortune, 9/5/94) GE paid $30 million in criminal and civil fines.

In 1992, GE "pleaded guilty to charges of fraud, money laundering and corrupt business practices in connection with its sale of military jet engines to Israel," the Washington Post reported (7/23/92). "Bob Pettit, general counsel to the FCC, said today that such convictions are 'relevant' for the commission to consider, but do not result in automatic loss of license," the paper noted.

GE currently faces anti-trust charges "of a scheme by GE executives to rig prices with DeBeers Consolidated Mines, the secretive South African cartel that controls much of the world's diamond production." (Fairfield County Business Journal, 5/25/92)

Most recently have come revelations of illegal reporting at Kidder Peabody, GE's investment subsidiary, which resulted in the dismissal of Kidder CEO Michael Carpenter -- who was brought in from another GE division by Welch in 1989 to put Kidder in order. "Like it or not, the scandals at Kidder Peabody were brought on by GE's management," Fortune asserted (9/5/94).

A February 1994 report of the Project on Government Oversight found that GE had 16 instances of fraudulent activity against the government since 1990 -- the most of any company listed (Daily Citizen, 3/14/94). Such revelations led Russell Mokhiber, editor of Corporate Crime Reporter, to note, "If the law were 15 strikes and you're out, GE would be banned."

The FCC is particularly concerned with questionable activity before other government agencies, since this might indicate a willingness to deceive the FCC. Despite GE's unsavory record, formal challenges have rarely been made to its ownership of the NBC licenses. Such cases were to be raised in a hearing against NBC by National Capital Communications Inc., which was filing a competing application for WRC-TV, NBC's D.C. affiliate. But NBC and NCCI made a deal whereby NBC would pay $295,000 (ostensibly for legal costs) to NCCI, in return for NCCI dropping its challenge Television Digest, 5/24/93).

"The Price They Ought to Pay"

In the past, the FCC has ruled that non-broadcast legal cases against GE "raise no substantial and material question" as to NBC's qualifications to own its licenses. (See Communications Daily, 3/5/92). But this was under an FCC with a more conservative cast, and preceded the somewhat toughened 1990 character policy. As things stand, "the FCC's rules on the subject are vague about what impact wrongdoing by one corporate subsidiary has on another," Electronic Media reports (7/27/92).

Any sale of NBC's licenses has to be approved by the FCC. This may give the agency (and anyone seeking to challenge NBC's licenses) an additional opportunity to review GE's fitness to own the outlets in the first place. Any action by the FCC against GE would likely result in a prolonged court battle, but could prove disastrous for GE should it lose.

GE maintains that it should not be held responsible for the actions of rogue employees. But Greider, in his book Who Will Tell the People, writes that this argument is disingenuous, given GE's "high-pressure management culture": "GE first turns up the heat on its line managers by creating a climate of purposeful insecurity -- everyone's job is at risk if his or her division's profit performance lags. Then, when division managers in the field are caught in false billings and other forms of profiteering, GE piously disavows them as 'miscreant employees.'"

The Washington Post (7/23/92) noted that "some disaffected former employees contended that GE's relentless competitive drive to dominate markets and increase profits fostered a climate in which some managers decided to cut corners to preserve their careers."

Says retired FCC commissioner Nicholas Johnson of the culpability of parent corporations like GE for illegal activity by subsidiaries: "If you're going to allow conglomerate licenses -- something that was prevented in the case of ITT [which tried to buy ABC] in 1967 -- this ought to be part of the price these guys ought to pay."

"Bozos and Thieves"

GE/NBC's potential vulnerability on this question has apparently been used for less than principled reasons. In 1989, Broadcasting Magazine (4/3/89) announced that "NBC will soon have a competitor for Ted Turner's CNN with CNBC," a cable channel that was originally conceived as carrying round-the-clock news. Shortly thereafter, Ted Turner attacked GE as "the most corrupt corporation in America," It was run by "bozos" and "thieves" who have been "indicted and admitted to stealing from the Pentagon."(Electronic Media, 4/13/89) Turner declared: "These crooks, these convicted felons, should be behind bars."

After hearing this implicit threat -- and after getting a cold shoulder from TCI, the nation's largest cable systems operator, which owns part of CNN -- GE decided that CNBC would become merely a financial and talk outlet rather than an all-news channel, thus preserving CNN's monopoly.

Curiously, one of the few outlets to have noted what it called GE's "Litany of Sins" was Fortune, which ran a cover story (9/5/94) about trading scandals at GE's Kidder Peabody division. This issue was on the newsstands when information that Time Warner (which owns Fortune) was considering buying NBC was first reported.

The complicated politics of broadcast ownership make it questionable whether Time Warner was trying to leverage GE in the Ted Turner fashion. Time Warner has reportedly proposed that GE would keep a majority stake in NBC's affiliates in any deal, since the FCC would (for now) frown on Time Warner, a major cable operator, acquiring broadcast outlets.

Still, it's odd to see Time Warner's Fortune complaining about corporate synergy: "When the Kidder scandal came to a head in June, GE went on CNBC, which it owns, to respond," the September 5 cover story noted.

Vulnerable Media

GE is not the only media company vulnerable to the "character" issue. Rupert Murdoch's News Corp. has been charged by the FCC with "either carelessness or recklessness" for failing to disclose a fraud settlement. (See sidebar.)

Turner ally TCI, which benefited from GE's backing down on CNBC, faces similar license problems; although its cable systems are not licensed by the FCC, TCI relies on FCC-regulated licenses to maintain its national system. A TCI anti-trust conviction led to a license challenge from the non-profit Media Access Project; TCI managed to hold on to its broadcast licenses, but had to pay the Media Access Project $50,000 in attorneys' fees (Multichannel News, 6/10/91).

And after the Wall Street Journal (1/27/92) ran an article headlined "Cable Cabal", which tracked a series of insider stock transactions by TCI Chair Robert Magness and CEO John Malone, Broadcasting (2/24/92) noted that "If TCI were ever convicted of a wrongdoing, its microwave licenses (and its current attempts to get a DBS [Direct Broadcast Satellite] license)could be jeopardized. Any conviction could disqualify TCI under the FCC's character-qualification policy, which is primarily concerned with felony convictions that suggest a willingness to deceive a federal agency or the public."

In the past, the government's potential to abuse the FCC's power to stripthe licenses of felons has chilled news media. In 1971, the Washington Post was concerned that if it was ruled to have violated the law when it published information from the "Pentagon Papers" -- classified documents about the Vietnam War -- the Post's broadcast holdings might be jeopardized. Publisher Katharine Graham "was really risking the television stations, all of them," by its reporting, editor Ben Bradlee noted (AP5/13/91).

What's needed are clear, tough and consistent FCC standards regarding the character of licensees. This would better ensure that the airwaves are used in the public interest in a vibrant manner without fear of political manipulation.

Sam Husseini is FAIR's activist coordinator.

NBC Brings Good Things to GE

While a licensee's deception of any government agency is always problematic, the FCC is particularly concerned when the commission is itself lied to. The FCC allowed GE to take over NBC in part because it accepted "GE's assurance that NBC News will operate autonomously, without interference by the new bosses." (Advertising Age, 6/16/86) But there is considerable evidence this has not been the case.

"Don't bend over backwards to go after us just because we own you," former NBC News president Lawrence Grossman said GE chair Jack Welch told him. The GE boss was worried, Grossman reported, "that in the news division, we might be off the reservation and might want to demonstrate our independence."

Grossman also reported that Welch gave him specific criticism, like telling him that "NBC's reporters should stay away from using depressing phrases like 'Black Monday'" to refer to the 1987 stock market crash. Welch even insisted that Today Show weather forecaster Willard Scott continue to mention GE light bulbs on the air. "It was one of the perks of owning a network," Grossman said. "You get your light bulbs mentioned on the air....People want to please the owners."

Grossman, who was fired in 1988, says he also got pressure from NBC head Robert Wright (who had come from GE Financial Services) when NBC News aired reports critical of MCA/Universal, whose TV arm supplied fare to NBC. "The vibrations or message that was being communicated [by Wright] was 'We're losing money and you guys are risking even more when you put on these reports,'" Grossman told Electronic Media (11/11/91).

Grossman's revelations were shrugged off by the FCC. William Johnson, deputy chief of the Mass Media Bureau, said: "If the owner has an opinion, he's entitled to say that to his employees. It's hard for me to see what's wrong with that." (Electronic Media, 11/11/91)

NBC News as also edited out or excluded negative reporting on GE, from GE's use of defective bolts in airplane engines to references to the INFACT-led boycott against GE. NBC News has also plugged subjects dear to its corporate parent's heart, as with a 14-minute series on a GE-manufactured breast cancer detector. (See Extra!, 1-2/91.)

Murdoch's Maneuvers

FCC regulatory decisions generally receive scant press coverage. The 1993FCC waiver that allowed Rupert Murdoch to control a TV station (New York's WNYW) and a daily newspaper (the New York Post) in the same market was an exception.

But some media accounts were bewildered as to why Murdoch would want the money-losing Post. One obvious reason, which indicates why such cross-ownership is prohibited in the first place, is that the Post could promote Murdoch's Fox TV network.

This would hardly be a new thing for Murdoch. As James Ledbetter pointed out in the Village Voice (4/13/93): "In 1989, Fox privately settled a $21million federal fraud suit charging it with, among other things, unlawfully padding its pockets by using Fox TV stations to advertise Fox films. Disregarding FCC reporting requirements, Fox didn't disclose that settlement when applying to renew the license of its Los Angeles station, KTTV."

The FCC review board said that omission, along with other Fox misconduct, "shows either carelessness or arrogance, depending on how the Fox compliance record is interpreted and we cannot sweep them aside lest we condone such conduct on the part of all FCC licensees." However, wrote Ledbetter, "Like good little deregulators, the board then promptly renewed KTTV's license, effectively sweeping the misconduct aside."

Just as troubling were some reports of how Murdoch obtained the cross-ownership waiver. In the mid-'80s, Murdoch had obtained a temporary waiver that allowed him to control the Boston Herald, Boston Fox affiliate WFXT, the New York Post and the New York Fox affiliate. However, he was forced to sell the Post and WFXT after Sen. Edward Kennedy (D.-Mass.) – a frequent target in the Herald and other Murdoch outlets -- got a prohibition on waivers inserted into an appropriations bill in 1987.

Though a court overturned the 1987 prohibition, Kennedy could still have caused problems for Murdoch. Instead, he backed Murdoch's 1993 repurchase of the New York Post. Daily Variety (4/12/93) noted that shortly after Murdoch received Kennedy's backing, Fox put on hiatus a hard-hitting documentary on alleged ties between John F. Kennedy and the Mafia. "It appears from the timing of the decision to suspend production on the JFK/Mafia project that Murdoch doesn't want to do anything that might anger his longtime adversary, Sen. Edward Kennedy," Daily Variety reported.

Allan Sloan noted in New York Newsday (10/24/93) that on the same day that Murdoch's News Corp. re-acquired the New York Post (with Kennedy's backing), it announced an option to buy back WFXT, saying that it would give up the Kennedy-bashing Boston Herald. "Could that be the sound of two backs being scratched?" Sloan wondered.

In early 1994, Murdoch announced the sale of the Boston Herald – on favorable terms -- to his close associate Patrick Purcell, who was to step down from several positions in Murdoch's operations (Boston Globe, 2/5/94).

As if David Horowitz and CampusWatch weren't enough

No longer content to use tear gas against students at Berkeley, the establishment weapons of choice now seem to be the taser and closed-circuitry cameras aimed at the offices of suspicious academics. Here's a really interesting article from The Nation about the increasing monitoring (and occasional violent repression) going on at US universities. It mentions the START Centers (for the Study of Terrorism and Responses to Terrorism), one of which is housed at my University (University of Maryland). More disturbing than the tasing and surveillance is how homeland security is invading the campus curriculum (it's far cheaper and more effective to scare and brainwash people into supporting your cause than yanking out their toenails). Scary shit.

Kucinich Makes it into Debate

I love Dennis Kucinich. He seems to be the only candidate with enough stones to get up and say that this country has a lot of problems - and abortion and gay marriage aren't at the root of any of them. NBC was trying to block him from the debates in Nevada - but a judge ruled against them. So much needs to be changed, but mainstream Democrats don't have the courage to go against the major players that finance them (to the tune of $5 billion for this election). Here's the story.

EPA Blocks Tougher Emission Standards

This is a disgusting example of how politicized federal bureaucracies have become under this administration. Agencies like the EPA (Environmental Protection Agency) are supposed to be apolitical - pursuing policies based on existing science and fighting industry on behalf of the American people. In what has become an all-too-familiar twist the agency is protecting vehicle manufacturers, not the environment. A few years ago something like this would have been unimaginable to me - but the Bush Administration has created a climate of political surrealism that makes Salvador Dali paintings seem ordinary. Here's the story.

Sunday, January 13, 2008

Fraud in Defense Contracts

Not that it comes as any surprise, but the dollar amount of fraud in the Iraq War is nearing $800 billion. The House Committee on Oversight and Reform released a report putting the figure at $792 billion. A BBC article lays out some of the most egregious characters involved. Of course every penny spent in Iraq could be included in the overall estimate, since the war itself was a fraud perpetrated against the American taxpayer and the Iraqi people. Stiglitz estimates the overall cost of the Iraq War at about $2 trillion (yes, trillion). This estimate includes some costs that don't make it into the Bush Administrations official figures (like the cost to rehabilitate soldiers suffering from PTSD). It's a far cry from the Administration's original estimate for the cost of the war: $50 billion. Just for perspective that's about 1/16 of the total that's been fraudulently spent in Iraq.

Thursday, January 10, 2008

More on US trumping up fears of Iran

Marc Lynch has a great article in the Christian Science Monitor that echoes my previous blog entry: "Fomenting Fears of a Shiite Crescent" and shows that leaders in the Gulf countries are turning away from the Bush Administration's campaign to demonize Iran - mending their own fences and pursuing a much more rational and moderate foreign policy than anything coming out of the US. It's a sad day when the Saudis make our government look like a bunch of crazy zealots . . . .