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OUR WORLD BALANCES ON A SEA OF DEBT

March 11, 2010 – 11:43 am

The banks that control the world’s supply of money are no better than counterfeiters - and their system of juggling debt has left the global economy teetering on the brink of ruin. Convicted fraudster Darius Guppy offers a provocative personal view.

In 1994, there resided in the cell next to mine a certain “Tommy”. He had been imprisoned for counterfeiting Dutch Guilders to such a high standard that he had fooled the banks themselves.

As was customary among prisoners who became friends, Tommy allowed me to read his legal papers and I became fascinated by the judge’s sentencing speech, the gist of which was that his activities had been parasitical. By creating money out of thin air he had reduced the purchasing power of more deserving members of society. What would happen if everyone behaved like him?

I thought of arguments used, in a different context, regarding inflation. Like counterfeiting, it dilutes the value of the community’s wealth and constitutes a social evil. Creating too much money - “real” or “fake” - can wreck an economy. Such was the Nazis’ reasoning when they planned to ruin Britain’s economy by flooding the country with near-perfect counterfeit bills.

A lot of nonsense has been written about the world’s current economic woes - about how the crash is the fault solely of the banks and, by implication, governments are blameless; and how it could all have been avoided, and can be put right, by greater financial regulation.

It is a classic example of what the philosopher Alasdair MacIntyre terms “the fallacy of managerial expertise”: an attempt by “experts” to blind us with science to justify their overpaid existences and mask their confusion. After all, not one of them was able to predict the current debacle.

These “experts” will tell you that the present difficulties are simply the result of abuses and excesses in a system that is basically sound. All that is required is for some faults to be corrected. Do not believe them. The reality is that the problem is systemic and a little tinkering here or there will achieve nothing in the long term.

What is needed is a root-and-branch re-evaluation of that most curious of cultural inventions, money: how it is created, how it circulates, and how it can best be used to serve the interests of the community.

To begin, the experts must explain in the simplest terms how money actually works. Were one to ask the man on the street - or, indeed, most politicians and bankers - who creates the money that rules our lives they would reply “the State”. They would be wrong. It is true that governments create legal tender - the physical notes and coins that circulate in an economy - but that represents, at its highest, only 3 per cent of the total money in circulation in the global economy. It is the commercial banks, largely unaccountable and privately owned, that create the world’s money.

Indeed, even if Tommy were responsible for printing every note in circulation throughout the world his power to dilute the rest of our wealth would amount to only a tiny fraction of that of the real manufacturers of money. His activities and the activities of the bankers are, in essence, identical: the creation of money out of nothing.

Without knowing it, therefore, Tommy’s judge punished him for usurping not so much the role of the State as the role of the banks. The same mistake - the mis-identification of where money truly originates - has been made by virtually all of our politicians, economists and financial commentators.

Consider the contradiction at the heart of neo-liberal, monetarist economics that has constituted the Western orthodoxy for the past few decades: to emphasise on the one hand that the money supply should be brought under control while simultaneously allowing banking - where the money is actually manufactured - to run riot.

To grasp how the global fraud works we need to step back in time and imagine ourselves next to the original goldsmith-banker.

In his vault, 10 of his customers each deposits a bar of gold weighing 1 kilogram - for safekeeping and in the hope of a return. Our banker lends the 10 gold bars to other customers, who embark on profitable ventures that generate a surplus. The vault now contains 11 gold bars, out of which our banker can pay his depositors and himself a reasonable return.

There is a name for this - “usury” - and our predecessors from the ancient and medieval worlds appear to have appreciated much better than us its ultimate destination: ruin.

Our banker soon questions the wisdom of keeping all the gold bars in his vault. He creates a token that will represent a given quantity of the gold either in his own vault or held to his account at some giant, more secure vault. Such a token can then be exchanged within the economy. Historians credit one of the first examples of such an instrument - the cheque - to the Knights Templar, allowing a pilgrim to cash a cheque drawn on a European preceptory at a Templar branch in the Holy Land.

So far, so good - as long as, for the face value of each of the pieces of paper in circulation, there exists a corresponding amount of gold sitting in a vault somewhere in the real world.

However, it is at this point that something wondrous and diabolical occurs. For experience has taught our banker that the bearers of the pieces of paper that they have created rarely attempt en masse to claim the gold their paper represents.

Our banker reasons: “So long as the pieces of paper that my friends and I have put into circulation are not encashed simultaneously then it is academic how many we create.”

The crucial part of the scheme is to create a culture of confidence. The bearers of our pieces of paper must feel secure about our ability to convert their paper back into gold, or real wealth.

The beauty of the scheme is that instead of earning interest on a single piece of paper our banker can earn interest on 10 such pieces of paper. Moreover, while charging interest on these 10 pieces of paper, he has only to pay out a reduced rate of interest on the single gold bar that has been deposited with him.

And this is exactly what happens.

Currently, the average fractional reserve requirements for banks amount to under 10 per cent, which means that for every dollar the banks have on deposit they can lend out at least 10 such dollars - virtual dollars summoned from nowhere - on which they charge interest.

Yet this fact - the key to understanding how the international financial system operates and why the world is in such a mess - is discussed virtually nowhere in mainstream circles.

Governments do not control the single most important mechanism when it comes to their economies: the production and distribution of money. That role has been diverted to the banks, which manufacture money out of nothing and charge interest on that conjured-up money. Beyond an interest rate cut or a token change in VAT rates our politicians have no real power to direct their country’s economy.

The picture has become a great deal more complicated. Soon pieces of paper are no longer required and instead entries on a bank’s ledger will suffice. Eventually, a further layer of virtuality is added when computers emerge and with them credits in cyberspace. Likewise all sorts of financial instruments and “products” are devised by the experts - collateralised mortgage obligations, put and call options, floating rate notes, preference shares, convertible bonds, semi-convertible bonds and endless other “derivatives” - but in essence they are mere variations of the same basic three-card trick.

Moreover, the illusion becomes self-reinforcing. Those involved in the process, sitting behind their computer screens, no longer control the beast they have created.

Now, it may be argued that while it is true that money is manufactured in the manner I have described - in other words by creating loans to the banks’ clients - surely just as much money is destroyed every time a loan is repaid? This is true to an extent. However, the point to be grasped is that while money is indeed created and destroyed in vast amounts every second of the day, the interest on that money remains un-destroyed and accumulates within the system - and at a compounded rate, moreover.

The process is far more inflationary and parasitical than the activities of all the Tommys in the world put together. For while that money, which by now has mutated into a vast monster of mutual indebtedness, grows exponentially, the wealth it is supposed to represent cannot grow at the same pace for very long. While there is no limit to the number of zeros we can create on a computer, there is a limit to the amount of oil in the ground, the wheat in the fields and the livestock in our farms.

The banks never really want their loans to be repaid. So long as the interest is funded it is to their benefit for the capital to remain outstanding on their books as “assets” and for the debts to be rolled over. Every time the IMF or World Bank extends a line of credit to some impoverished nation, are they being “charitable” or simply perpetuating the enslavement?

Capitalism, banking and growth become inseparable, but logic dictates that the virtual economy must eventually peel away from the real one and sooner or later the day of reckoning arrives - when the gulf separating these two economies is too large to be sustained - for no power on earth can match the power of compound interest in the ether.

Consider the tale of the Chinese emperor and his chess opponent. The emperor asks what reward would satisfy him if he wins; the opponent replies that a single grain of wheat, doubled for each of the 64 squares on the chess board, would suffice. The emperor, imagining that he has a good deal, loses, only to learn that he now owes his adversary the equivalent of 2,000 times the current annual worldwide production of wheat.

Such are the miracles of compound growth; and the reason why financiers have been able to award themselves astronomical sums. For their virtual printing presses are calibrated to an exponential production while no such calibration applies to Mother Earth.

Frederick Soddy, the 1921 winner of a Nobel Prize for chemistry (not economics), was among the first to articulate the mechanism by which money is created by the banks and how it mutates into debt. His arguments have been developed by thinkers such as Herman Daly and Richard Douthwaite.

The reasoning can be extended to cover the financial sector as a whole. A company makes a certain profit; a multiple of many times can be applied to that figure to arrive at a “value” for the company - based on the assumption of future growth. That value can then be leveraged yet further for it to raise debt against its share price and so on.

Such super-ovulation can mean that a single company with nothing more than an idea to be applied to the internet can create yet more tokens - share certificates - worth several times the entire annual production of diamonds for the continent of Africa, a process known, retrospectively, as the dotcom bubble.

It constitutes a redistribution mechanism from the poor to the rich - which is precisely why the banks and Western governments are so desperate to ensure its survival.

Money breeds more money. Indeed, the banks never really want their loans to be repaid. So long as the interest is funded it is to their benefit for the capital to remain outstanding on their books as “assets” and for the debts to be rolled over. Every time the IMF or World Bank extends a line of credit to some impoverished nation, are they being “charitable” or simply perpetuating the enslavement?

But the system relies entirely, as do all Ponzi schemes, on the assumption of continued growth, hence its inherent instability. Once that growth is threatened the edifice collapses. Householders in Britain will appreciate such a phenomenon only too well: put up 10 per cent for a property and borrow the rest from the bank. That property’s value need rise by only 10 per cent and you have doubled your equity; if it falls by only 10 per cent you are wiped out.

This explains why a contraction of a mere 2 or 3 per cent in the global economy leads not to a correspondingly minute fall on international stock markets, but to financial Armageddon.

Likewise with the banks - lend 10 times more money than you possess and when the economy grows, or at least pretends to grow, it’s Porsches galore, but when the lack of growth is exposed it requires only 11 per cent of the loans on your books (in value terms) to be bad and you are bust. The truth is not that these institutions have suddenly become insolvent but that they were never really solvent in the first place. By rolling over their debts they have been able to keep them on their books as “assets” rather than losses and forestall the evil hour.

There is a name for this - “usury” - and our predecessors from the ancient and medieval worlds appear to have appreciated much better than us its ultimate destination: ruin.

It is a simple and devastatingly effective swindle, but largely invisible because it has become so deeply embedded in our culture. The consequences of that swindle - the desperate need for economic growth; the environmental and cultural despoliation it engenders - require some radical thinking one encounters nowhere in any of today’s political parties.

Note: Darius ‘Darry’ Guppy (born 1964) is a British expatriate who, together with Benedict Marsh, was convicted of fraud, theft and false accounting in February 1993. Guppy was jailed for staging a faked jewel robbery and claiming £1.8 million from the insurers, part of London’s Lloyd’s insurance market. (Wikipedia) The above article was posted at Information Clearing House.

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WINNER TAKES ALL

March 9, 2010 – 4:00 am

If anyone thought Gran Torino was going to be director Clint Eastwood’s swan song, well, here he is again, with Invictus where he doesn’t wow the audience with lots of razzle-dazzle but, as Critic After Dark Noel Vera says, you will still find yourself cheering anyway.

Always felt Clint Eastwood, possibly one of the oldest, longest-working, most respected American directors still around, was too problematical. Always thought he never got out of the shadow of his true masters, Don Seigel and Sergio Leone (yep, Eastwood’s star shines brighter than Leone’s now - who knew then, when he directed his first feature, Play Misty for Me (1971)?).

Always thought he was afflicted with that most fatal of diseases, good taste. Always thought his most awarded work was flawed, in one way or another (felt Mystic River (2003) didn’t have a hard enough edge; Million Dollar Baby (2004) was too sentimental; Letter From Iwo Jima  (2006) presented a too-soft picture of the Japanese warrior).

That said, he’s a prolific, consistent filmmaker and, out of his large output, there’s bound to be something that pleases. Felt Unforgiven (1992) was lean and modestly moving. Felt Gran Torino (2008) to be an amusing, largely unassuming, poignant final statement (not his final as it turns out, but poignant nevertheless). Think  A Perfect World (1993) was his best work - about half of a great film, with maybe one indisputably great scene (if you’ve seen it, you know what I’m talking about).

With Invictus (2009), his thirty-fourth film, one wonders - will Eastwood glide gracefully under the radar or will he (like I feel happens when he makes his biggest ’statements’) sink under the weight of his own earnestness? Thankfully the film takes its cue from Morgan Freeman’s sly performance as Nelson Mandela - fresh out of prison, and freshly elected into office, he takes his morning jog and confronts the morning edition headline on a newspaper: “He can win elections, but can he govern?” “It’s a fair question,” Mandela tells an angry reader.

It’s not a complicated story to tell; what makes it challenging is keeping a sense of proportion around Mandela (active in politics since 1948; sent to prison for about twenty-seven years; freed, won the Nobel Prize, and became the first black president of South Africa), one of the most outsized heroes in recent world history, and keeping a sense of clarity about what he was trying to do.

Eastwood has Freeman depict Mandela not as a starry-eyed idealist but as a weary pragmatist who understands how people think and feel and is willing to take risky, even unpopular measures for the long-term goal.

Hence his treatment of the problem: what to do with the white Afrikaaners? They have lost the election, but they still hold considerable power (much of the country’s economy and military). A policy of retribution would alienate them, perhaps even spark a civil war; a policy of appeasement would alienate his own political base. Mandela opts for a sideways move, looking to the somewhat apolitical arena of sports for an answer: the Springboks, the South African rugby team, as a sign of unity and of South Africa’s new identity in the world arena.

Not that easy to do; for one thing, politics has a tendency to contaminate all areas of life, even sports - the Springboks were thought of as a symbol of white supremacy, and the game of rugby a sport only white South Africans played. Mandela steered against popular sentiment to embrace the sport and team, and Eastwood records this painstaking process as only a careful carpenter, a builder of straightforward narratives, can do - little by little, detail by detail, with a deliberately determined pace.

Perhaps one way Eastwood has managed to maintain consistency throughout his career is by carefully picking his material. He does take risks - not all his films work (I’m thinking of his recent Changeling (2008) with its ham-handed treatment of female oppression); but even the failures teach him something and strengthen his skills as a director, so when one comes along that seems tailor-made (like I believe this one is), he has enough game to swat it out of the ball park.

That’s half the story told, the to my mind more interesting part (I love how Eastwood peppers Mandela’s storyline with suggestions that he’s had a complicated private life); Eastwood also tells the other half, the sports half, led by Matt Damon playing Francois Pienaar, captain of the Springboks.

Much publicity has been spent on marveling how Damon mastered the Afrikaaner accent, considered one of the most difficult in the world (sounds okay to these inexpert ears, but then so did Leonardo DiCaprio in Blood Diamond (2006); I did like the accents in John Boorman’s In My Country (2004), and while Brendan Gleeson’s accent slipped in and out, it didn’t stop him from giving a powerful performance), but when all is said and done, Pienaar’s is the supporting role, in a story of secondary interest.

Eastwood seems to recognize it too - he sketches Pienaar’s character, and uses rugby sequences sparingly, saving the most coherently shot and most detailed depiction of the game for last, the climactic battle between the underdog Springboks and the mighty New Zealanders in 1995. The victor is a matter of public record of course, and of course in sports movies you know who’s going to win (the only picture to actually surprise me with its conclusion was Michael Ritchie’s The Bad News Bears (1976)).

Eastwood doesn’t entirely wipe away this handicap with the razzle-dazzle of his filmmaking (he pretty much shoots everything with a handheld camera, cuts to build tension, so on and so forth) but hopefully by this time you’ve been so caught up in the film’s larger narrative - that of Mandela trying to bridge the gap between two political powers, two races, a divided nation (of course this is Eastwood’s open letter to Obama) - that you find yourself cheering anyway.

Note: First published in Businessworld, February 18, 2010. You can also email Noel Vera at noelbotevera@hotmail.com.

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BLEAK HAVENS

March 6, 2010 – 4:18 am

Or as columnist George Monbiot says, how the ultra rich enslave themselves in order to avoid paying taxes.

It’s a bitter blow. When the UK government proposed a windfall tax on bonuses and a 50p top rate of income tax, thousands of bankers and corporate executives promised to leave the country and move to Switzerland. Now we discover that the policy has failed: the number of financiers applying for a Swiss work permit fell by 7 per cent last year. The government must try harder to rid this country of its antisocial elements.

Executive flight is the corporate world’s only effective form of self-regulation: those who are too selfish to pay what they owe to society send themselves into voluntary exile. It’s an act of self-sacrifice for which we should all be grateful. It’s hard on the Swiss, but there’s a kind of mortal justice here too: if you sustain a crooked system of banking secrecy and tax avoidance, you end up with a country full of crooks and tax avoiders.

Sadly, most promises of self-imposed exile are empty. They seem to be intended, like Boris Johnson’s warning last year that the City of London would be reduced to a ghost town by the new taxes, to dissuade the government from taking action. The universal public response, as Tracey Emin found when she announced that she couldn’t possibly survive here on her scanty millions, is “Go on then, jump.”

But self-awareness is yet to become the bankers’ dominant trait. Last week the president of Barclays insisted that Britain should be “immensely proud” of the bank’s enormous profits, while the Royal Bank of Scotland announced that it would give its staff bonuses of £1.3bn - 84 per cent of which belongs to taxpayers - despite making another massive loss. The new taxes are being imposed because of the crisis caused by bankers’ greed. Yet the bankers seem to believe that we’ll agree that they are the last people who should have to pay them.

There’s something else that the threats tell us: some people appear willing to do almost anything for money. In court papers made public at the beginning of this month, Guy Hands, the owner of the private equity company Terra Firma and the record label EMI, sought to explain why the case he is fighting against Citigroup should not be heard in London.

He moved to Guernsey last April to avoid UK taxes. Since then, he says, he has “never visited” his wife and children, who still live in his former home in Kent, for fear of compromising his tax status. For the same reason, “I do not visit my parents in the United Kingdom and would not do so except in an emergency.”

Hands, according to the Sunday Times rich list, is worth £100m. Were he to allow the Exchequer to reclaim a few of his unnecessary millions, he would face neither ruin nor starvation. He’s reported to work 18 hours a day, which means he is unlikely to find much time to enjoy his wealth. It’s hard to see how the fraction he has saved through becoming an economic refugee could bring him any discernible benefit, let alone happiness that could compensate for the life he has lost.

Extreme wealth invariably leads to captivity. Its victims live in an open prison. In Mexico and Colombia, they and their families face the constant threat of kidnap: they must scurry around, screened and shrouded, as if they were coppers’ narks. In Russia they can never be free from the fear of assassination. Everywhere on earth they live behind walls and razor wire, guarded by cameras, dogs, watch towers and sensors. The walls that shut the world out also shut them in.

They must, if they wish to maintain their place on the rich lists, also live in fear of their rivals. Despite their lobbying power, they cannot permanently shake off the authorities, not least because of the irregular tax and accounting methods which helped many of them to become so rich: the remark attributed to Balzac (”behind every great fortune lies a great crime”) is at least half right. Who in his right mind would volunteer for this life?

Extreme wealth invariably leads to captivity. Its victims live in an open prison. Everywhere on earth they live behind walls and razor wire, guarded by cameras, dogs, watch towers and sensors. The walls that shut the world out also shut them in.

The Conservative Party’s most persistent embarassment is the hazy tax status of its deputy chairman, Lord Ashcroft. Ashcroft received his peerage in 2000 after promising that he would become a UK taxpayer. Since then a succession of senior Tories has been quizzed by the media about whether he has redeemed this promise or is still registered in Belize, and they have writhed like hooked eels.

Though this issue could explode as the election approaches, neither Ashcroft nor the party have yet produced an answer. This gives us a pretty good idea of what it must be, and of where the party’s priorities lie.

For some of the ultra-wealthy, tax avoidance seems to be a matter of principle: they’ll be damned if they give a penny to the people, whether they would miss it or not. On the few occasions on which I’ve met members of this class, I’ve been struck by their dissidence: they appear to see themselves as lonely rebels engaged in a perpetual fight against authority, even as they strive to get so rich that their own authority becomes impregnable.

In fighting the taxman, they draw on a heroic tradition of resistance. In the New Testament, or to the Sons of Liberty seeking American independence, taxation was an instrument of colonial oppression. The context has changed: today the tax avoiders are the oppressors. But they still regard themselves as insurrectionaries.

Now, at last, the net is starting to close. Far too late, the British government has begun to abandon its mystifying tolerance of the loss of its funds. Last year HM Revenue and Customs retrieved three times as much unpaid tax from the very rich as it did five years before. In December the government announced that it would impose 200 per cent penalties on people who fail to declare their bank accounts in uncooperative tax havens.

Last week the appeal court ruled that the British multimillionaire Robert Gaines-Cooper must pay £30 million in back tax, as he retains too many interests in this country to qualify as a resident of the Seychelles. The government is considering a new law on British residency, which it will introduce next year, in the unlikely event that it wins the election. Why has it left this so long?

These efforts scarcely scratch the problem. International attempts to close down tax havens remain half-hearted. But if by some miracle these measures were to succeed, one haven - let’s say St Helena - should be kept open.

It should be furnished only with rudimentary homes. All who chose to could live there in peace. Every penny they possessed would remain safe from the taxman, as long as they never set foot in another land. They could sit in their cells and count their money for the rest of their lives. Parties of schoolchildren would be brought to the island to goggle at these hermits, and learn some lessons about the follies of wealth.

Note: George Monbiot is the author of the best selling books Heat: how to stop the planet burning; The Age of Consent: a manifesto for a new world order and Captive State: the corporate takeover of Britain; as well as the investigative travel books Poisoned Arrows, Amazon Watershed and No Man’s Land. He writes a weekly column for the Guardian newspaper. The above article was posted on his website, www.monbiot.com (with full footnotes), and at at londonprogressivejournal.com.

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GILAD ATZMON: WANDERING JAZZ PLAYER

March 4, 2010 – 11:27 am

Jazz musician Gilad Atzmon may write articles such as IsraHell and Holocaust Exploited but as Theo Panayides of the Cyprus Mail discovers, there is also a deep intertwining between Atzmon’s musical persona (involving fluidity, fearlessness and perfectionism) and his life in general.

“It’s very easy to regard me as a charming, entertaining and witty boy,” says Gilad Atzmon, putting an ironic twinkle on the word ‘boy’ (he’s almost 47, after all). “But if you get on the wrong side of me, it can be a devastating experience!”

On paper, that might read slightly arrogant; in the flesh, Gilad gets away with it, partly because he is very charming, entertaining and witty. Still, there’s clearly a darker side. At one point, he describes himself as a “radical”.

Cyprus - which he loves and visits often - is “as close as I can get to my homeland without being arrested” (Gilad is Israeli-born, though he’s lived in Britain for the past eight years). Though his novels have been published in 22 languages, he’s been accused of anti-Semitism and branded a ’self-hating Jew’. In 2007, according to Wikipedia, the Swedish Committee Against Anti-Semitism censured a local party for inviting Gilad to speak, claiming he’d worked to “legitimise the hatred of Jews”.

Have I missed anything? Well, maybe one thing - the most important thing of all. You might think we spoke on the barricades, maybe on the sidelines of some demo outside the Israeli Embassy - but in fact we speak in Layali Cafe, down the road from New Division in Nicosia where Gilad is due to play a gig in about half an hour. (Not that you’d know it from his languid demeanour.)

Gilad is a jazz musician, and a very successful one, hugely in demand as a saxophonist - he tours all the time - and record producer. He’s played as a session musician with the likes of Robbie Williams and Paul McCartney, and he’s just produced two albums, one for up-and-coming songbird Sarah Gillespie and another for the legendary Robert Wyatt of ‘Shipbuilding’ fame. All this in addition to writing essays and maintaining a website (www.gilad.co.uk) where he posts every day with titles like “IsraHell” and “Holocaust Exploited”.

Looks like his passions for music and politics run parallel, I point out.

“I don’t have any passion for politics,” he demurs. “I despise politics, and I despise politicians - of all sorts, even the most wonderful ones. I don’t like people who think they know better than others. I don’t trust them”.

What about his writings, then?

“I don’t write about politics, I write about ethics,” he replies. “I write about Identity. I write a lot about the Jewish Question - because I was born in the Jew-land, and my whole process in maturing into an adult was involved with the realisation that my people are living on stolen land.”

Isn’t that something he should’ve figured out even as a child? I mean, it’s not exactly a secret. “I agree with you,” he instantly replies - but “we didn’t know as Israelis that the Palestinians were ethnically cleansed”. He pauses, taking a sip of water. “We as Israelis were brought up to believe that the Palestinians just left, because they were advised to leave by the Arab countries,” he explains.

“We didn’t know about legislation to stop them from coming back, we didn’t even know that every Palestinian village had been wiped out… We were indoctrinated into a denial of the Palestinian Cause. We were not aware of it”. He literally didn’t know about Palestinian refugees in Lebanon - till he went there as a soldier, aged 19, and wondered where these people had come from.

By that time he was “already in transformation,” he adds - and music had a great deal to do with it. When he wonders why he’s so “lonely” in his views, says Gilad, “one of my answers is music, because until I was 17 I was a real proper Zionist”. (His family were deep in the heart of the System; his dad actually worked for the military.) Then he had a serious mountain-climbing accident that left him incapacitated for almost a year - and that’s when he picked up a saxophone and started playing in earnest, meanwhile discovering the wonders of bebop.

The work of Charlie Parker and Dizzy Gillespie was exciting enough - but even more surprising for the young Gilad was to learn that they were black. “Till that point we thought everything good came from the Jews!” he laughs, his fleshy face crinkling in a wolfish grin. “And the more I loved black music, the less I wanted to die for the Israeli idiotic ideology…”

Music is a thread, binding the life together. I watch him later on the makeshift stage at New Division, a stocky figure in a white jacket, rocking back and forth with his eyes closed, sometimes striding forward to underline a passage when the saxophone’s profusion of notes threatens to soar out of his control altogether - and I start to realise how his musical persona intertwines with his life in general, how the two reflect each other in (at least) three different ways. The first is their fluidity. The second, fearlessness. And the third is perfectionism.

Jazz is fluid, especially the improvisational kind played by Gilad. “For me, jazz is a celebration of the moment. What you may call the here-and-now,” he explains - and his lifestyle is equally fluid, just like his identity. Is he British? In a way. (He has British citizenship.)

“I don’t write about politics, I write about ethics. I write about Identity. I write a lot about the Jewish Question - because I was born in the Jew-land, and my whole process in maturing into an adult was involved with the realisation that my people are living on stolen land.” - Gilad Atzmon

One of the few times he ever got stage-fright, he recalls, was when he played the Queen Elizabeth Hall in London, and that’s when he knew he’d become a Brit - because he realised then that he thought of London as his home, and it made him self-conscious. When we first meet, on the other hand, we talk about sitting outside, and I mention that he probably doesn’t mind the cold, being from London - but Gilad shakes his head: “I come from Palestine”.

He lives mostly on the road (though he has two children back in London), and isn’t even sure where he’s going after Cyprus - like a Wandering Jew, he adds with a chuckle. Does he also live his life ‘in the moment’? “I try to,” he shrugs. How exactly does one do that? “You try to walk along with your feelings,” he explains rather cryptically, “make ethical judgments, not believe anything anyone tells you”.

Does he mean ‘anything’ or ‘everything’? “I don’t believe anything,” he smiles. “If I’m interested in something, I learn it myself and come up with my own judgment. This applies to History, politics, and obviously to music.”

Then there’s the fearlessness. Jazz, for him, is a form of creative detachment: “I like to close my eyes and let it happen”. Sometimes it doesn’t. Musicians fail to bond, playing styles clash instead of meshing - and the reason is fear, people’s fear of failure, which frustrates their creativity. “In the process of improvisation,” explains Gilad, “insecurity plays a major destructive role”.

Again, though, music reflects something larger - because fear is also what drives the cause of Zionism, the obvious fear that comes from being surrounded by enemies as well as a deeper fear borne of centuries of oppression: it’s a painful fact, says Gilad, that “You can’t understand the history of Jewish suffering without looking at Israeli barbarism”. Maybe fear is also what fuels the denial (as he sees it) of the obvious, that “every piece of land in Israel is actually Palestine” - the fear he himself has tried to banish from his own life.

You have to be fearless, he insists - in music, in politics, in life itself. “For me, the meaning of Life is to live. Is to live! To enjoy your symptoms, to celebrate your symptoms.” Symptoms? He shrugs, as if to say ‘whatever you want to call them’. “To love the soul,” he goes on, getting animated, “to make love to the people around you, to communicate - and to communicate not like a f***ing Western politically-correct lefty that’s saying the right thing. Say the wrong thing! Bounce back! Hit back, you know? To feel Life! To challenge yourself every f***ing second. This is what Life is for me.”

Above all, however, is perfectionism - or perhaps persistence, “pushing people to the wall” as he calls it. It’s a little hard to imagine, watching him sit in Layali next to Kyriacos - his “best friend in Cyprus” - talking about this and that, but Gilad is apparently something of a martinet in the studio (he also teaches with the Global Music Foundation, and admits to “giving [students] hell” when he feels they’re not taking it seriously).

He quotes Philip Bagenal, a sound engineer he’s worked with for the past decade - a good friend, and the best sound engineer he’s ever worked with - who nonetheless said to him one night, as the hours dragged on and Gilad still pushed for more: “Gilad, you are the most exhausting human being who’s ever been in a studio. You just don’t let it go.”

Once again, the music reflects his personality. His hero, he confides, the man he most admires is a Russian-Jewish music teacher he had as a teenager “who was f***ing horrible with me” - yet “he turned me into an adult”. Once, when teenage Gilad came to a lesson unprepared, this teacher “wiped me out, like a cloth on the floor” - a harsh lesson but a valuable one, because it taught him not to leave things half-baked: he goes all the way, whether as musician or activist.

When he’s writing something, “I won’t leave a single stone unturned” (“and when I turn the stones,” he adds wryly, “I find a lot of cockroaches”). When he’s playing, he doesn’t suffer fools gladly. “To a certain extent I’m very easy to connect with,” he repeats, “because I’m funny and I am - inverted commas - ‘charming’.

“But some people would find me intimidating and obnoxious, and hard to deal with. I don’t play the usual politically-correct game. If I’m playing with someone and he doesn’t listen, I may take my sax out and shout at them, and this person would hate me for the rest of their life.” Does he get nasty? “Apparently. I don’t want to be nasty, but…”

He doesn’t seem very nasty, but I’ll take his word for it; despite his charm - indeed, because of it - Gilad Atzmon radiates a kind of forceful energy, and it’s easy to see how it might turn explosive. Besides, he adds, it works both ways: he pushes people and expects - indeed, wants - people to push him back. Must make for some fiery personal relationships, I point out, but he won’t be drawn: “I’m in a relationship with me for 47 years,” he smiles. “It’s exhausting”.

Sounds like the self-hating Jew again. What does he say to that little slur? Gilad smiles: “I’m not a self-hating Jew,” he replies, “I’m a proud self-hating Jew! It’s a big difference… I celebrate my hatred towards everything I represent - or better to say [everything] I’m associated with.

“My ethical duty is to say the things that I know and feel,” he goes on. “I’m an artist. Do you know -” he brightens, having just recalled the perfect aphorism - “this is something I learned from Otto Weininger, the Austrian philosopher. He was a clever boy, killed himself when he was 21!” Gilad laughs delightedly: “He was definitely a proud self-hating Jew!”

But that’s not the point. What Weininger wrote, says Gilad, is that “Scientists look at the world and tell us what they see. But artists look at themselves, and tell us something about the world!” It’s the same, it’s all connected: Life and Art, and all that jazz.

Note: The above article is also posted at Gilad Atzmon’s website. Gilad Atzmon was born in Israel and served in the Israeli military. He lives in London, and is the author of two novels: A Guide to the Perplexed and the recently released My One and Only Love. Atzmon is also one of the most accomplished jazz saxophonists in Europe. His latest CD is In Loving Memory of America. Visit Gilad Atzmon at http://www.gilad.co.uk/.

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THE HOUSE THAT DRIPPED BLOOD

March 2, 2010 – 3:56 am

What if Dario Argento had directed Beetlejuice? That’s what fans are saying about Nobuhiko Obayashi’s classic 1977 avant-horror, Hausu (House), where, to keep the evil alive, an aunt posseses her niece and sucks the life out of her friends. Stephen Tan reviews.

It’s the beginning of the school holidays and Oshare (Kimiko Ikegami) is looking forward to joining her composer father on a holiday. But her father brings home a woman who may become Oshare’s new stepmother. Angry with her father, Oshare refuses to go on the holiday and instead arranges a trip with her friends to visit her aunt in the countryside. A teacher is supposed to join them on the train but because of an accident, he will drive out to meet them. After the girls leave, Stepmother decides to go after Oshare in order to win her over.

In a scene reminiscent of Jonathan Harker asking for directions to Dracula’s castle, the girls arrive at a water melon stall seeking a way to the Aunt’s house, only to meet with a mysterious and cryptic melon seller. Arriving at the house, the girls find the frail-looking Aunt in a wheelchair. As the girls are looking around the house, one of the girls, Mac, who had bought a melon, puts the fruit in a well to cool it down.

Mac later goes to retrieve the melon for dinner but does not return. Fanta (Kumiko Ohba) goes out to check and pulls out Mac’s head from the well. She makes it back to the dining room but when the other girls go to the well to check, they find only the melon. During dinner the Aunt indicates to Fanta that she is eating parts of Mac. The meal is so nourishing that the Aunt is soon able to move around without her wheelchair.

One of the girls is “devoured” when mattresses fall upon her and, during the night, Oshare is possessed by her Aunt’s spirit. Melody (Eriko Tanaka) is eaten alive by the piano she is playing and Kung Fu (Miki Jinbo) is eaten up when she losses in the battle with the house. Her fight unleashes a torrent of blood in the house and a worn-out Fanta cuddles up to who she thinks is her best friend, Oshare. In the morning, Stepmother arrives but she is also consumed by the evil spirit.

Within the context of Japanese cinema, Nobuhiko Obayashi’s Hausu (House, 1977) is a major piece of work. [It is such a guilty pleasure that Eureka! even took a full-page ad in Britain’s Sight And Sound magazine for this DVD reissue.] As experimental filmmaker Obayashi explained in an interview, the horror movie came about because of the success of Jaws, and it was the first time an “outsider” directed a feature film within the maintream Japanese studio system. In the Japanese studios, one becomes a director only after years serving as an apprentice.

Given the chance, Obayashi, who had developed a portfolio shooting commercials, made what would be seen as an avant-garde horror movie employing all the camera tricks or techniques he had mastered. Equally daring is the wide range of music used in the film - from ’60s-sounding psychedelia pop to carnival-like-tunes to jazz, the music is like the head candy that accompany the studio shots that are filled with eye-popping colours. Obayashi would later helm cult favourites such as The Girl Who Leapt Through Time (1983) and The Drifting Classroom (1987).

But for a horror movie, instead of shocks, Obayashi used strong and outrageous visuals to tell his tale. Fanta, one of the girls, pulling a decapitated head out of a well instead of a water melon is not a shocking moment. It is even a playful moment as the head grins at the girl. A nice horrific moment is when the Aunt shows Fanta she has an eyeball in her mouth and the scene where the Aunt slips into the fridge only to appear elsewhere is deftly handled.

If the idea of the ghost in the mirror is an old one, mattresses smouldering one of the girls and turning her into a naked doll is quite novel (until Wes Craven turned a mattress into a bloody deathbed for Johnny Depp in Nightmare On Elm Street) but the most outrageous is the piano that not only chomped up the piano player, leaving behind the player’s fingers tinkling on the piano keys. The film would have engaged the viewer more had the girls expressed more surprise at what’s happening and that one of the girls is a kung fu exponent almost stops the film dead in its tracks when she’s battling the evil house with flying kicks and karate chops.

Tales such as the Little Red Riding Hood and even Lewis Carroll’s Alice In Wonderland carry a subtext involving the sexual awakening of a young girl, a theme which is prominent in Bram Stoker’s Dracula and which bubbles over in Peter Weir’s Picnic At Hanging Rock.

But in Obayashi’s Hausu, sexuality is overwhelmed by the more basic instinct of anger and hate. Towards the end, a voiceover explains that because of a promise made, a young woman waits (in vain) for the return of her loved one. Couched in lyrical words, the reality is the opposite, that love actually turned into anger; which turned into hate and now into a lingering evil spirit that devours anyone it comes into contact with.

Perhaps the most subversive element of Hausu is that love does not triumph in the end; and that one’s trust is never returned - the Aunt who loved and waited in vain; an Aunt who is supposed to care for her niece but does not - instead she sucks the life out of young girls; friends who should look out for one another but do not and even authoritarian figures such as teachers are ineffectual and never show up when expected.

In contrast to Japan’s economic progress in the ’70s which promised a better tomorrow, Hausu’s nihilism makes it a somewhat distant relative of George Romero’s Night Of The Living Dead. In the mid-’70s, when cinema goers were dancing to Saturday Night Fever, here’s a movie that was daring, offbeat, made a bloody mess of things and nearly succeeded.

Note: The Hausu DVD (Eureka!) is banned in $ingapore.

Click here for more reviews.

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CHALLENGING HISTORY: WHY THE OPPRESSED MUST TELL THEIR OWN STORY

March 1, 2010 – 3:58 am

History, as it is generally known, is the story of the victors, written by the victors. For a fuller picture, as columnist and editor Ramzy Baroud points out, history from the view of the “vanquished” and the oppressed is equally important because it is the people’s history that also puts a human face to all the statistics, maps and figures.

When American historian Howard Zinn passed away recently, he left behind a legacy that redefined our relationship to history altogether.

Professor Zinn dared to challenge the way history was told and written. In fact he went as far as to defy the conventional construction of historical discourses through the pen of victor or of elites who earned the right of narration though their might, power and affluence.

This kind of history might be considered accurate insofar as it reflects a self-seeking and self-righteous interpretation of the world by a very small number of people. But it is also highly inaccurate when taking into account the vast majority of peoples everywhere.

The oppressor is the one who often articulates his relationship to the oppressed, the colonialist to the colonized, and the slave-master to the slave. The readings of such relationships are fairly predictable.

Even valiant histories that most of us embrace and welcome, such as those celebrating the legacy of human rights, equality and freedom left behind by Martin Luther King, Malcolm X and Nelson Mandela still tend to be selective at times.

Martin Luther King’s vision might have prevailed, but some tend to limit their admiration to his ‘I have a dream’ speech. The civil rights hero was an ardent anti-war champion as well, but that is often relegated as non-essential history. Malcolm X is often dismissed altogether, despite the fact that his self-assertive words have reached the hearts and minds of millions of black people throughout the United States, and many more millions around the world. His speech was in fact so radical that it could not be ’sanitized’ or reinterpreted in any controllable way.

Mandela, the freedom fighter, is celebrated with endless accolades by the very foes that branded him a terrorist. Of course, his insistence on his people’s rights to armed struggle is not to be discussed. It is too flammable a subject to even mention at a time when anyone who dares wield a gun against the self-designated champions of ‘democracy’ gets automatically classified a terrorist.

Therefore, Zinn’s peoples’ histories of the United States and of the world have represented a milestone in historical narration.

As a Palestinian writer who is fond with such luminaries, I too felt the need to provide an alternative reading of history, in this case, Palestinian history. I envisioned, with much hesitation, a book that serves as a people’s history of Palestine. I felt that I have earned the right to present such a possible version of history, being the son of Palestinian refugees, who lost everything and were exiled to live dismal lives in a Gaza refugee camp. I am the descendant of ‘peasants’ - Fellahin - whose odyssey of pain, struggle, but also heroic resistance is constantly misrepresented, distorted, and at times overlooked altogether.

Perhaps one of the worse aspects of today’s detached and alienating media is its production of history - and thus characterization of the present - as based on simple terminology. This gives the illusion of being informative, but actually manages to contribute very little to our understanding of the world at large.

It was the death of my father (while under siege in Gaza) that finally compelled me to translate my yearning into a book. My Father was a Freedom Fighter, Gaza’s Untold Story offered a version of Palestinian history was not told by an Israeli narrator - sympathetic or otherwise - and neither was it an elitist account, as often presented by Palestinian writers. The idea was to give a human face to all the statistics, maps and figures.

History cannot be classified by good vs. bad, heroes vs. villains, moderates vs. extremists. No matter how wicked, bloody or despicable, history also tends to follow rational patterns, predictable courses. By understanding the rationale behind historical dialectics, one can achieve more than a simple understanding of what took place in the past; it also becomes possible to chart fairly reasonable understanding of what lies ahead.

Perhaps one of the worse aspects of today’s detached and alienating media is its production of history - and thus characterization of the present - as based on simple terminology. This gives the illusion of being informative, but actually manages to contribute very little to our understanding of the world at large.

Such oversimplifications are dangerous because they produce an erroneous understanding of the world, which in turn compels misguided actions.

For these reasons, it is incumbent upon us to try to discover alternative meanings and readings of history. To start, we could try offering historical perspectives which try to see the world from the viewpoint of the oppressed - the refugees, the fellahin who have been denied, amongst many rights, the right to tell their own story.

This view is not a sentimental one. Far from it. An elitist historical narrative is maybe the dominant one, but it is not always the elites who influence the course of history. History is also shaped by collective movements, actions and popular struggles. By denying this fact, one denies the ability of the collective to affect change.

In the case of Palestinians, they are often presented as hapless multitudes, passive victims without a will of their own. This is of course a mistaken perception; the Palestinians’ conflict with Israel has lasted this long only because of their unwillingness to accept injustice, and their refusal to submit to oppression. Israel’s lethal weapons might have changed the landscape of Gaza and Palestine, but the will of Gazans and Palestinians are what have shaped the landscape of Palestine’s history.

Touring with My Father was a Freedom Fighter in South Africa, in a recent visit, was a most intense experience. It was in this country that freedom fighters once rose to fight oppression, challenging and eventually defeating Apartheid. My father, the refugee of Gaza, has suddenly been accepted unconditionally by a people of a land thousands of miles away.

The notion of ‘people’s history’ can be powerful because it extends beyond boundaries, and expands beyond ideologies and prejudices. In that narrative, Palestinians, South Africans, Native Americans and many others find themselves the sons and daughters of one collective history, one oppressive legacy, but also part of an active community of numerous freedom fighters, who dared to challenge and sometimes even change the face of history.

South Africa has; Palestine will.

Note: Ramzy Baroud (www.ramzybaroud.net) is an internationally-syndicated columnist and the editor of PalestineChronicle.com. His latest book is “My Father Was a Freedom Fighter: Gaza’s Untold Story” (Pluto Press, London), now available on Amazon.com.

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SPORTSMANSHIP: THE GREAT OLYMPIC FRAUD

February 28, 2010 – 3:58 am

The range of ugliness - from the catty to the racist to the fatal - is significant because it exposes the reality of what the recent Winter Olympics are all about. As sports commentator Dave Zirin points out, “Going for the gold” is no longer about winning races but beating American Idol’s Simon Cowell in the ratings.

It was called the “Own the Podium” campaign, Canada’s efforts to win enough gold medals to make Ron Paul defect. Its zeal for gold meant such sporting practices as locking athletes from other countries out of the practice facilities. Anything for an edge. This lockout included the luge sliders at the whip-fast run in Whistler. As a result, a Georgian luger by the name of Nodar Kumaritashvili had only one-tenth the practice runs as his Canadian opponents when he lost control and sped to his death.

Poor sportsmanship doesn’t always kill. But it has been evident at every corner of the games, and not just from our neighbors from the North. There was Russian skater Evgeny Plushenko, who, after earning the silver medal, first climbed up to the gold medal spot. “I stepped on the gold medal position because I forgot that I came second,” he said. “To be fair, I felt that I’d stepped on to my position. It wasn’t planned, of course. It’s just that in my brain, I’d won.”

He also decided to go “figure skating macho” by criticizing gold medal winner Evan Lysacek’s gold medal, saying, “If [the] Olympic champion doesn’t know how to jump quad… I don’t know. Now it’s not men’s skating. Now it’s dancing.”

Then there’s the Russian ice pair, Maxim Shabalin and Oksana Domnina, who performed a dance they called a “tribute” to Australian Aboriginal culture. It was a tribute only if you consider Amos & Andy to be a tribute, as well.

Stephen Page, the artistic director of the Bangarra Dance Company, told the AFP news service that their accompanying music was more African or Indian than Aboriginal Australian and their body paint seemed as though “a three-year-old child had drawn it on.” “It looks more like they were trying to emulate the token savage cave man,” he said.

At least Shabalin and Domnina didn’t use their “brown-face” makeup, which they had used in previous routines.

Lest anyone think I’m picking on just the Canadians and the Russians, we also had U.S. skater Johnny Weir say, after coming in sixth, that he lost “not because I wasn’t good enough, just that politically, no one was thinking of me [as a medalist].”

For athletes, the costs of training for the Olympics means that losing are not an option. As a result, we have petulance. We have spectacle. And we have death. We also have something that is no longer the Olympics but reality television.

Then there was South Korean gold medalist Lee Jung-Su, who slammed the U.S. speed skater Apollo Ohno as “too aggressive” in a post-race news conference. Even though Lee won the gold and Ohno the silver, Lee said, “Ohno didn’t deserve to stand on the same medal platform as me. I was so enraged that it was hard for me to contain myself during the victory ceremony.” In South Korea, you can buy toilet paper with Ohno’s face on it.

This range of ugliness - from the catty to the racist to the fatal - is significant because it exposes the reality of what the Winter Olympics are all about. The International Olympic Committee - that sewing circle of monarchists, extortionists, and absolved fascists - likes to hide behind the pretense of nobility.

It claims to care not for profit or personal gain. Just the glory of “Olympism” as represented in its Magna Carta: “the Olympic Charter.” That charter states: “The mission of the IOC is to promote Olympism throughout the world and to lead the Olympic Movement. This includes upholding ethics in sports.”

On the IOC’s website, there is a quiz: “The Ultimate goal of Olympism is to a) Organize the Olympic Games, b) encourage new world records, c) build a peaceful and better world through sport. It’s perfectly understandable if you needed three tries to answer that correctly. The answer is, of course, c - although that would certainly be news to the family of Nodar Kumaritashvili.

What trumps these grand “ethics” is the reality of what makes the IOC go ’round: television and corporate dollars. And if corporations can’t come up with the money, then cities and host countries pay through the nose.

This is why - despite the death of Kumaritashvili, despite the terrible sportsmanship on display, despite the protests by Vancouver residents and, at times, violent confrontations with the police - these games are being regarded as a profound success.

The IOC is claiming that more people will have watched the games across the globe than any Winter Olympics in history with a 47 per cent jump from the Torino Games. In the United States, even American Idol is eating the dust of Olympic fever. “Going for the gold” is no longer about winning races but beating Simon Cowell.

For athletes, the costs of training for the Olympics means that losing are not an option. As a result, we have petulance. We have spectacle. And we have death. We also have something that is no longer the Olympics but reality television, where as many titillations take place off the field of play as on.

An international sporting competition could be something to treasure. In particular, having female athletes and a variety of different events leading off sports coverage is very welcome. But in the hands of the IOC, it’s all a gigantic fraud.

Note: Dave Zirin is the author of the forthcoming “Bad Sports: How Owners are Ruining the Games we Love” (Scribner). Receive his column every week by emailing dave@edgeofsports.com. Contact him at edgeofsports@gmail.com.

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U.S. SUPER-RICH GET FIVE TIMES MORE INCOME THAN IN 1995

February 25, 2010 – 2:05 pm

Recently uncovered IRS statistics show that it is the rich who have bankrupted the state, with the full assistance of the two pro-business parties. Social programs and the proportion of social resources allocated to the general population have nothing to do with driving the state to the poor house, reports Andre Damon.

The incomes of the very rich in the US grew phenomenally between 1992 and 2007, while their tax rates plummeted, according to recently uncovered IRS statistics.

The figures were published on the IRS web site in December of 2009, but received little notice because they were not announced. The report only became widely known when Tax Analysts, a news outlet for tax information, discovered the document and wrote about it on its web site, tax.com, on Thursday.The report shows that the average income for the top-earning 400 families, denominated in 1990 dollars, grew from US$17 million to $87 million, representing a five-fold increase in real terms. During this time, the percentage of the total national income that went to the top 400 families tripled, from .52 per cent in 1992 to 1.59 in 2007.

The data shows that these families saw their incomes increase by 31 per cent between 2006 and 2007 alone, while the average income of each family reached $345 million.

The amount of money earned by the group more than doubled from 2001, when its members earned on average $131.1 million. In 1993, the top 400 tax return filings amounted on average to $46 million. This means that there was an eight-fold nominal increase in the average earnings for this group between 1993 and 2007.

Meanwhile, the effective tax rate on this group - the amount actually paid in taxes - fell to 16.6 percent, the lowest figure on IRS records dating to 1992.

Congressional Democrats have sought to place blame for falling taxes on the wealthy solely on the Bush administration’s tax cuts. But the IRS figures show that the effective tax rate on the top 400 income earners actually fell faster under the last part of the Clinton administration than at any later time.

The effective tax rate hit a high point of nearly 29 per cent in 1995. By the end of the Clinton administration, the rate had fallen to 22 per cent. The trend continued under Bush, with the effective tax rate falling another 6 percentage points between 2001 and 2007.

The Bush administration lowered the capital gains tax by 5 percentage points, to 15 per cent, in 2003. But Bush’s policies were only a continuation of laws passed under the Clinton administration, when the capital gains tax was lowered from 28 per cent to 20 per cent for the top income brackets.

The top income earners received a total income of $138 billion in 2007. This figure is larger than the yearly output of most of the world’s countries, and is nearly as large as the GDP of Chile. Out of this amount, the group paid only $23 billion in taxes.

If the top 400 earners had been taxed in 2007 at the 1995 rate, they would have paid an additional $18.4 billion in taxes, enough to cover the entire 2010 budget shortfall of the state of California.
About three quarters of income for earners in this tax bracket came from capital gains, which were taxed at 15 per cent, as opposed to income, which is taxed at a rate of 35 per cent for the top bracket.

The top 400 families actually paid lower taxes compared to other high-income earners. In 2005, the Congressional Budget Office found that the top 1 per cent as a whole paid a tax rate of 19.7 per cent. The median 20 per cent of income earners paid a tax rate of 12.5 percent, including Social Security payments, which are negligible for the very rich.

The IRS report on the top 400 families was first regularly published by the Clinton administration, but the Bush administration shut down its release, according to the tax.com article by Cay Johnston, a tax law professor at Syracuse University. The Obama administration resumed publication of the figures, with the 2006 figures published about a year ago.

Johnston also noted: “At least three hedge fund managers made $3 billion in 2007.” He added, “Only 33 of the top 400 paid an effective tax rate of 30 per cent to 35 per cent, which is the maximum federal tax rate.”

The data further substantiates the highly publicized conclusions of economists Thomas Piketty and Emmanuel Saez, who found that two thirds of income increases between 2002 and 2007 went to the wealthiest 1 per cent of society and that income for the top 1 per cent grew 10 times faster than that of the bottom 90 per cent. Piketty and Saez found that the top 1 per cent of earners got a higher share of income in 2007 than at any time since 1928.

The latest figures come amid constant calls by the White House and Congress to cut social programs in order to balance the budget. The federal government, we are told, has been bankrupted by the “profligacy” of social programs and the proportion of social resources allocated to the general population.

But the latest figures show that the opposite is true. It is the rich who have bankrupted the state, with the full assistance of the two big-business parties.

Note: The above article was posted at the World Socialist Web Site (wsws.org) and was circulated by Information Clearing House.

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MILD THING

February 23, 2010 – 4:06 am

As an adaptation of a book, Spike Jonze’s Where the Wild Things Are is a failure. You simply cannot adapt perfection, says Critic After Dark Noel Vera. But as a boy’s dream (or rather, Jonze’s dream of a boy’s dream) of his inner demons confronting then sitting down to sadly acknowledge the presence of the other, perhaps even learn to care for the other, the picture is worth seeing.

The best parts of Spike Jonze’s Where the Wild Things Are (2009) are possibly the scenes depicting Max’s home life - Jonze takes camera in hand and follows Max (Max Records) up and down stairs, through hallways, into an improvised snow fort to capture the casual lyricism of everyday life (Jonze set it in wintertime presumably because he needed the added melancholic touch, to cut through whatever sticky pathos might be found in the script).

When adolescent youths unthinkingly destroy the fort, trapping Max inside and subjecting him to a vividly realized moment of claustrophobia (Edgar Allan Poe would appreciate this) Max finds himself weeping angry tears. When his mother (the lovely if - for this production - more domesticated Catherine Keener) pays more attention to her new boyfriend (Mark Ruffalo) than him he finally turns wild, screaming and biting his mother, who yells at him - a startling moment reflected in Max’s startled expression, and in his even more startling response: to run out of the house into the snowy winter night, board a sailboat, and set off to unknown realms.

All well and good for a preteen angst picture. But this is an altered Max, a thoroughly re-tinkered Max, considerably less funny and with less of a crack comic timing than Maurice Sendak’s creation. In the book, Sendak’s Max was a truly terrible thing, no less so for the fact that his wildness was sui generis - unexplored and unexplained.

He chased the poor family dog with a dinner fork (anticipating his fellow Things’ famous catchphrase “I’M GOING TO EAT YOU UP!”) and “got up to” one bit of mischief after another till his mother called him “Wild Thing!” and sent him to bed without supper. The punchline - Max throws the door (you can imagine it slamming shut just seconds before), a hurt expression, as if he had expected praise, not punishment, for his behavior.

And then the most magical moment in the book - there’s no near equivalent in the movie, and Jonze unwisely (or is it wisely?) does not even make an attempt - huge leaves and giant jungle blooms sprout in Max’s bedroom; the four posts of his bed turn into trees, the carpet into tall grasses, the ceiling into a thick woven canopy.

Every time I read this - at four, fourteen, even at forty - I read with wide eyes, wondering if, should I close my eyes, my room might undergo a similar transformation (it never does, but I never tire of wondering).

Max arrives at some strange island/strange land, washing ashore in an elaborate (if somewhat unnecessary) landing sequence; he climbs up a cliff, enters a forest. When Max and the Things meet, it’s a fairly unconvincing encounter: the Things surround him (silent, expectant, threatening) and Max looks up (wet, shivering) to claim in a tremulous voice that he’s “a great king, with magical powers.”

All the Things stare at Max doubtfully; they seem to be expecting him to throw them a line, as if they had all lost their places in the script. Sendak’s Max betrayed no such weakness; he had charisma to spare and solved the problem easily by staring at them without blinking until they capitulated and declared him the Wildest Thing of All.

At this point Jonze’s movie departs from Sendak’s book to weave a tale of estranged friendships, growing mistrust, painful regrets. Just in time, too - the book simply (and confidently) relied on Sendak’s inimitable artwork to depict the Wild Rumpus that follows, images of unbridled joy and ferocity (Max at one memorable point in the revelry giggles as if it were all some private joke) that go on and on until Max grows tired, boards his boat and sails back home, the last line in the book bringing the entire story to a full circle.

Jonze gives the Wild Things names - K.W. (voiced by Lauren Ambrose), she with the stringy hair; Ira (Forest Whittaker), with the faintly anthropoid body; Judith (Catherine O’Hara), with the horned nose; Carol (James Gandolfini, aptly cast) with the fiery temper, striped chest, fish-scaled legs (my favorite Thing, though I suppose he was everyone’s favorite - he’s given the most substantial role). Not sure I’m happy with the names; I’ve known them as nameless all my life, and have always imagined that if we met, we would never bother with talk - just roar, charge at each other and either roll playfully on the ground wrestling or eat the other up.

Carol (as mentioned) has anger issues; he is both the warmest and most dangerous of the Things. Max sees him as a good friend, and - implicitly - the missing father figure in his life (Can a father act childishly and throw tantrums? Absolutely). K.W. is more of a mother figure who comforts Max and, at one point, hides him in her womb (need to see it to believe it - works, too) when an angry Carol comes looking for him.

The story comes to a crisis, Max again boards a boat to sail home, trailing behind him Wild Things that want to eat him up, only this time the emotions - as is typical in a Jonze film - are sadder, more complex. Not necessarily better - Sendak’s narrative flows in a clear, swiftly flowing stream, which serves to hide undercurrents of anger, fear, frustration; what Sendak buries in a furiously paced avalanche of verbal and visual delights Jonze makes explicit, somewhat plodding, less intensely flavored.

Jonze’s film works best when it departs completely from Sendak and, like Max, strikes out on its own. He paints an altogether moodier world, populated by creatures with wide (if toothy) smiles and bulging eyes that imply (Carol in particular) soulful depth behind them.

But while critics talk of the Wild Things with their puppet limbs and digitally crafted faces, I was more fascinated by the sets designed by K.K. Barrett: seemingly woven out of sticks and vines and branches (inspired, Barrett says in an interview, by Sendak’s crosshatching style), the Things’ homes take shape as either egglike shelters that you can pick up and toss about (just imagine - mobile homes!), or as a fort that resembles a gigantic snail with a pair of eyestalks soaring into the sky.

Then there’s the miniature city carved by Carol, complete with an elaborate canal system; Carol pours a bucket of water into the city’s channels and drops in a tiny boat with two people riding inside - they wander the waterways like Huck Finn and friend, out to see the world on a little canoe.

As an adaptation of Sendak, I think the movie is a failure - you simply cannot adapt perfection - but as a boy’s dream (or rather, Jonze’s dream of a boy’s dream) of his inner demons confronting then sitting down to sadly acknowledge the presence of the other, perhaps even learn to care for the other, the picture is worth seeing.

Note: First published in Businessworld, February 4, 2010. You can also email Noel Vera at noelbotevera@hotmail.com.

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WALL STREET MOVES IN FOR THE KILL

February 20, 2010 – 4:51 am

In a recent commentary, former Treasury Secretary Hank Paulson hit out against regulating Wall Street. But as economist Michael Hudson points out, although Wall Street has extracted US$13 trillion in bailouts just since October 2008, the thought of raising taxes on wealth to pay just $1 trillion over an entire decade for Social Security or health insurance is deemed a crisis that would lead Wall Street to shut down the economy.

Former Treasury Secretary Hank Paulson wrote an op-ed in The New York Times, February 16 outlining how to put the U.S. economy on rations. Not in those words, of course. Just the opposite: If the government hadn’t bailed out Wall Street’s bad loans, he claims, “unemployment could have exceeded the 25 per cent level of the Great Depression.” Without wealth at the top, there would be nothing to trickle down.

The reality, of course, is that bailing out casino capitalist speculators on the winning side of A.I.G.’s debt swaps and CDO derivatives didn’t save a single job. It certainly hasn’t lowered the economy’s debt overhead. But matters will soon improve, if Congress will dispel the present cloud of “uncertainty” as to whether any agency less friendly than the Federal Reserve might regulate the banks.

Paulson spelled out in step-by-step detail the strategy of “doing God’s work,” as his Goldman Sachs colleague Larry Blankfein sanctimoniously explained Adam Smith’s invisible hand. Now that pro-financial free-market doctrine is achieving the status of religion, I wonder whether this proposal violates the separation of church and state. Neoliberal economics may be a travesty of religion, but it is the closest thing to a Church that Americans have these days, replete with its Inquisition operating out of the universities of Chicago, Harvard and Columbia.

If the salvation is to give Wall Street a free hand, anathema is the proposed Consumer Financial Protection Agency intended to deter predatory behavior by mortgage lenders and credit-card issuers. The same day that  Paulson’s op-ed appeared, the Financial Times published a report explaining that “Republicans say they are unconvinced that any regulator can even define systemic risk… the whole concept is too vague for an immediate introduction of sweeping powers…” Republican Senator Bob Corker from Tennessee was willing to join with the Democrats “to ensure ‘there is not some new roaming regulator out there… putting companies unbeknownst to them under its regime.”

Having created the crisis, Wall Street wants to use its momentum to knock out any potential checks to its power. “No systemic risk regulator, no matter how powerful, can be relied on to see everything and prevent future problems,” former Treasury Secretary Hank Paulson explained. “That’s why our regulatory system must reinforce the responsibility of lenders, investors, borrowers and all market participants to analyze risk and make informed decisions,” In other words, blame the victims!

Paulson uses the same argument: Because the instability extends not just to the banks but also to Fannie Mae and Freddie Mac, Lehman Brothers, A.I.G. and Wall Street underwriters, it would be folly to try to regulate the banks alone! And because the financial sector is so far-flung and complex, it is best to leave everything deregulated.

Indeed, there simply is no time to discuss what kind of regulation is appropriate, except for the Fed’s familiar protective hand: “delays are creating uncertainty, undermining the ability of financial institutions to increase lending to businesses of all sizes that want to invest and fuel our recovery.” So  Paulson’s crocodile tears are all for the people. (Except that the banks are not lending at home, but are shoveling money out of the U.S. economy as fast as they can.)

As Obama’s chief of staff Rahm Emanuel put it, a crisis is too good a thing to waste. Having created the crisis, Wall Street wants to use its momentum to knock out any potential checks to its power. “No systemic risk regulator, no matter how powerful, can be relied on to see everything and prevent future problems,” Paulson explained. “That’s why our regulatory system must reinforce the responsibility of lenders, investors, borrowers and all market participants to analyze risk and make informed decisions.”

In other words, blame the victims! The way to protect victims of predatory bank lending (and crooked sales of junk securities) is not new regulations but just the opposite: “to simplify the patchwork quilt of regulatory agencies and improve transparency so that consumers and investors can punish excesses through their own informed investing decisions.” Simplification means the Fed, not a Consumer Financial Protection Agency.

“We must also tackle what is by far our greatest economic challenge - the reduction of budget deficits - a big part of which will involve reforming our major entitlement programs: Medicare, Medicaid and Social Security.” The economy thus is to be sacrificed to Wall Street rather than reforming finance so that it serves the economy more productively.

Moving in for the kill, Paulson explains that the Treasury is bare, having used US$13 trillion to bail out high finance in 2008-09. So he warns the government not to run a Keynesian-type budget deficit. The federal budget should move into balance or even surplus, even if this accelerates the rise in unemployment and decline in wage levels as the economy moves deeper into recession and debt deflation.

“We must also tackle what is by far our greatest economic challenge - the reduction of budget deficits - a big part of which will involve reforming our major entitlement programs: Medicare, Medicaid and Social Security.” The economy thus is to be sacrificed to Wall Street rather than reforming finance so that it serves the economy more productively. It is simple mathematics to see that if the government cannot raise taxes, it must scale back Social Security, other social welfare spending and infrastructure spending.

What is remarkably left out of account is that today’s financial crisis, centered on public debts, is largely a fiscal crisis in character. It is caused by replacing progressive taxation with regressive taxes and, above all, by untaxing finance and real estate. Take the case of California, where tears are being shed over the dismantling of the once elite University of California system.

Since American independence, education has been financed by the property tax. But Proposition 13 has “freed” property from taxation - so that its rental value can be borrowed against and turned into interest payments to banks. California’s real estate costs are just as high with its property taxes frozen, but the rising rental value of land has been paid to the banks - forcing the state to slash its fiscal budget or else raise taxes on labor and consumers.

Throughout the world, scaling back the 20th century’s legacy of progressive taxation and untaxing real estate and finance has led to a public debt crisis. Property income hitherto paid to governments is now paid to the banks.

The link between financial and fiscal crisis - and hence the need for a symbiotic fiscal-financial reform - is just as clear in Europe. The Greek government has pre-sold its tax revenues from roads and other infrastructure to Wall Street, leaving less future revenue to pay its public debt. To cap matters, paying income tax is almost voluntary for wealthy Greeks. Tax evasion is hardly necessary in the post-Soviet states, where property is hardly taxed at all. (The flat tax falls almost entirely on labor.)

Throughout the world, scaling back the 20th century’s legacy of progressive taxation and untaxing real estate and finance has led to a public debt crisis. Property income hitherto paid to governments is now paid to the banks. And although Wall Street has extracted $13 trillion in bailouts just since October 2008, the thought of raising taxes on wealth to pay just $1 trillion over an entire decade for Social Security or health insurance is deemed a crisis that would lead Wall Street to shut down the economy.

It is telling governments to shift to a regressive tax system to make up the fiscal shortfall by raising taxes on labor and cutting back public spending on the economy at large. This is what is plunging economies from California to Greece and the Baltics into fiscal and financial crisis. Wall Street’s solution - to balance the budget by cutting back the government’s social contract and deregulating finance all the more - will shrink the economy and make the budget deficits even more severe.

Financial speculators no doubt will clean up on the turmoil.

Note: Michael Hudson is a former Wall Street economist and now a Distinguished Research Professor at University of Missouri, Kansas City (UMKC), and president of the Institute for the Study of Long-Term Economic Trends (ISLET). He is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy. He can be reached via his website, mh@michael-hudson.com. The above article was posted at Counterpunch.

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