Conservatives Target Greenlining
Pedophiles & Popes
Hungry By The Numbers
Living in District 9
keith harmon snow
2006 BP Probe
NAFTA & Immigration
The Past & Democracy
Herbert P. Bix
Media, Culture, Reviews
UGC & Media
Klare's Rising Powers
Zaps - 07-08/10
NOTE: Z Magazine subscribers and sustainers have access to all Z Magazine articles here and in the archive. The latest Z Magazine articles available to everyone are listed in the Free Articles box at the top of the table of contents, and are starred in the list below. Questions? e-mail Z Magazine Online.
Regulation in Devolution
Regulation in the United States reached its high point in the 1930s, with the collapse of the old order of capitalism, the deep and long depression, the successes of unionization, the spread of leftist and reformist thought, the creation of new regulatory agencies like the Securities and Exchange Commission (SEC), and activation of old ones like the Department of Justice's antitrust division. Very important in the relative success of the new and renewed regulation was the discrediting of the old regime, with some of the leading financiers really excoriated in the Pecora hearings and a number, including a former head of the New York Stock Exchange, actually hauled off to jail. Orthodox thought about the ability of "free" markets to take care of everything was prostrate; interventionist thought surged with theories of imperfect competition and of business cycles and macro-instability, culminating in J.M. Keynes's General Theory of Employment, Interest and Money in 1936, that called for systematic government fiscal offsets to keep the unstable capitalist ship afloat. In this intellectual and political environment, the new and revived regulatory agencies were treated with considerable respect. Although subjected to abuse and obstruction by the old establishment, they not only had the power to act, they also attracted quality staff and strong leaders—notably, later Supreme Court Justice William Douglas as SEC chair and Thurman Arnold as head of the antitrust division.
Regulation went into a slow decline in prestige and power after World War II and took a sharper downturn in the Reagan era and through the Bush-Cheney years. Regulation in the United States has always suffered from the influence of the regulated in personnel selection, including an active revolving door between regulators and industry and via legislative constraints and budgetary blackmail or rewards—cuts if aggressive and uncooperative; rewards if responsive to industry wants.
Scandals get the media's and public's attention, but only briefly, whereas the regulated industries maintain continuous attention to the regulatory process and work steadily, and with substantial resources, to limit its effectiveness in the public interest. It was long recognized that during its lifetime the now-defunct Interstate Commerce Commission was the most generously funded regulatory agency, based on its feeble public service direction and virtual industry capture (by railroad and, later, trucking interests).
As regards regulatory law, there have always been friendly legislators who would help make the law loophole-ridden or with ambiguities that would permit delays, litigation, and resolutions of conflict satisfactory to the interests of the regulated.
Regulation has suffered more severely under Republican than Democratic rule, with especially savage setbacks under Reagan and George W. Bush. But the Democrats have failed to compensate for prior Republican damage, so the regulatory ship has slowly foundered. Carter deregulated the airlines and trucking industry while Clinton not only failed to resuscitate the damaged FCC, he reappointed Ayn Rand disciple and financial bubble-facilitator Alan Greenspan to the Fed's chair. With the conflict-of-interest-laden advice of Robert Rubin and Larry Summers, Clinton did nothing to contain the growing derivatives menace and engineered the repeal of the Glass-Steagall Act. Self-regulation was the watchword, aided of course by the supposed discipline of competition.
Very important in the process of weakening regulation was the changing ideological environment, with the rise of the Chicago School of Economics, the decline of liberal Keynesianism and its partial displacement by Military Keynesianism, and the associated triumph of markets-can-do-it-all neoliberalism. The Chicago School was (and remains) aggressively hostile to regulation, with Milton Friedman, George Stigler, Sam Peltzman, Ronald Coase, George Benston, Gary Becker, and others arguing vigorously for the great efficiency of uncontrolled securities and merger markets and the desirability of their deregulation (see "The Politicized Science" in Herman, Triumph of the Market, South End Press, 1995). In a much-cited article in 1964, George Stigler attempted to prove quantitatively that SEC regulation had not made security markets less volatile and otherwise more efficient than in the years prior to the creation of the SEC ("Public Regulation of the Securities Markets," Journal of Business, April 1964). It was one of my more pleasurable academic experiences to have been able to demonstrate statistically that Stigler had massaged the data: 24 of his 25 data errors served to support his preferred conclusion, which when corrected supported the opposite conclusion—that SEC regulation had improved market performance (Irwin Friend and Edward Herman, "The SEC Through a Glass Darkly," Journal of Business, July 1964). This was the year Stigler served as president of the American Economics Association.
The Chicago School and its ideology has suffered heavy blows over the past several decades: the failure of monetarism as a policy guide; the failure of freed exchange rates to stabilize international exchanges; the collapse of the Pinochet dictatorship in Chile; the recent stock market and housing bubbles and their bursting; and the associated decline and discrediting of more fundamental free market theorizing like "rational expectations" and the "efficient markets" hypothesis. This ideological collapse was epitomized in Greenspan's belated pathetic admission that he had not only been wrong, but still didn't understand what happened and why: "Those of us who have looked to the self-interest of lending institutions to protect shareholders equity, myself included, are in a state of shocked disbelief" (Edmund L. Andrews, "Greenspan Concedes Flaws in Deregulatory Approach," NYT, October 24, 2008).
One thing the Chicago School got right was their theory of regulatory capture. But they never linked their idea that regulators were likely to be captured by the regulated to their analyses of why regulation might not be very effective. We may be sure that they never urged an enhanced democracy that would be alert to the capture threat, prevent it, and assure that public-spirited people were put into regulatory office. Actually, one of the founders of the Chicago School, Henry Simon, in a booklet published in 1932 entitled "A Positive Program for Laissez-Faire," did argue that if efficiency required firms to be too big to sustain competition, they should be nationalized rather than regulated or left as a private monopoly. But that was an early and more honest Chicago School. The Friedman-Stigler version of the post-World War II years, that would eventually love the Pinochet military dictatorship of Chile, could never support nationalization—they would prefer private monopoly.
We are now in an age of attempted re-regulation, with widespread recognition that the regulatory system had been under-nourished and dismantled at great cost. But it is not likely that a new regulatory apparatus will be constructed that will be able to cope with contemporary problems. One reason for this is the greater complexity of the financial world, with the executives of the financial institutions sometimes admittedly unable to keep up with the rapidly evolving new instruments and tricks of the trade produced by their technical whizzes and their global scope making them still harder to follow and regulate. Regulators do not have the resources and expertise to cope with these challenges. This is a result in part of the fact that regulatory service is neither honorific nor well-paid and, of course, is still hardly free from being compromised or undermined by industry-friendly legislators, executive politicians, and courts now well-packed with right-wingers. The revolving door, which reached a high level under Reagan and the Bushes, is hardly gone and the number of former legislators and legislative staffers now serving as industry lobbyists is at a very high level. (In a recent study, 243 just for the 6 largest banks and their trade associations.) All of this erodes the morale of public-spirited regulators and leads to a further exodus, positively desired in a Reagan/Bush regulatory environment.
The problems, including the revolving door, have not been resolved by the election of Barack Obama. Timothy Geithner and Lawrence Summers, key appointees in the financial regulation field, had records of closeness to the leaders of the financial sector that did not promise well for any reform with bite, and we have not gotten any. Recent attention has focused on Ken Salazar, a right-leaning Democrat and rancher selected by Obama as Secretary of the Interior, to the dismay of environmentalists and gratification of business. Salazar failed to move quickly, or at all, in cleaning up what a 2008 internal review by the Interior department of its Minerals Management Services Unit (MMS) called a "a dysfunctional organization that has been riddled with conflicts of interest." Salazar was hardly the person to end what Obama called a "cozy relationship" between MMS and the oil industry. In fact, Salazar hired as deputy administrator for land and minerals management former British Petroleum (BP) executive Sylvia B. Vaca. And under Obama and Salazar, MMS continued to give BP a steady stream of exemptions from required environmental impact studies.
The decline of regulation and the difficulty of resuscitating it rests heavily on the structural changes that have strongly impacted politics and the media as well as regulation. Greater inequality of wealth and the enhanced importance of finance have fed into politics, paralyzing the Democrats as the erstwhile reformist party and making it virtually impossible to engage in serious structural or regulatory change. The changes required run into previously mentioned complexity and globalization problems. Adrian Blundell-Wignall, a special adviser to the Organisation for Economic Co-operation and Development, said recently that the "most basic lesson of the crisis" was that "we need to separate capital market banking from standard commercial banking" in order to make incentives and regulation manageable. And we need to control leverage on a global basis to prevent the circumvention of the regulation of risk-taking. But Blundell-Wignall suggests that these essential reforms seem to be blocked by the "institutional capture" of policy-makers by the leading global financial institutions (Larry Elliott, "Banking split, essential to avoid new financial crisis, warns OECD adviser," Guardian, May 27, 2010).
The current financial regulation bills in the United States do not split the capital market from commercial banking, which would entail a return to Glass-Steagall; they do not reduce the size of financial institutions; they provide no fixed limits on leveraging; and they do not deal with the problems that will arise from the absence of such limits abroad. They are what Joe Nocera calls "oh-so-reasonable" bills, "as if Congress...would—heaven forbid!—upset the banking industry" ("Dubious Way To Prevent Fiscal Crisis," NYT, June 5, 2010).
Edward S. Herman is a professor emeritus of finance at the Wharton School, University of Pennsylvania. He has written extensively on political economy, foreign policy, and media analysis. Among his books are The Political Economy of Human Rights (with Noam Chomsky, South End Press, 1979); Corporate Control, Corporate Power (Cambridge University Press, 1981); The "Terrorism" Industry (with Gerry O'Sullivan, Pantheon, 1990); The Myth of the Liberal Media: An Edward Herman Reader(Peter Lang, 1999); and Manufacturing Consent (with Noam Chomsky, Pantheon, 1988 and 2002).
Z Magazine Archive
AnnouncementsLABOR - May 1 is May Day. Workers of the world will celebrate the 124th anniversary of International Worker’s Day. Born out of a call for an 8-hour workday in the United States, this day is an opportunity for all workers to show their solidarity with one another, as well as to renew the call for labor rights.
FARM CONFERENCE - The Farm Conference on Community and Sustainability will be held May 24-26 in Summertown, TN, in partnership with the Fellowship of Intentional Communities. Tour green homes, see sustainable food production, learn about solar installations, alternative education, midwifery, and more.
Contact: Douglas@thefarmcommunity.com; http://www.thefarmcommunity.com/.
PALESTINE - The Conference of the Palestinian Shatat in North American will be held June 3-5 in Vancouver. The conference will examine the future of the Palestinian liberation movement.
Contact: firstname.lastname@example.org; http://www.palestinianconference.org/.
LABOR - The Pacific Northwest Labor History Association’s 45th annual conference will be held May 3-5, in Portland, OR. This year’s theme is Labor Under Attack: Learning from the Past and Preparing for the Future. A call for presentations, workshops and papers is currently underway.
Contact: PNLHA, 27920 68th Ave. East, Graham, WA 98338; 206-406-2604; PNLHA1@aol.com; http://www3.telus.net.
MARIJUANA - On the first Saturday of May marijuana legalization activists will hold informational and educational events, rallies and marches in over 300 cities around the world.
ECONOMICS - The Union For Radical Political Economics will hold its 39th annual conference May 9-11 in New York City.
RECLAIM THE DREAM - The 2013 Poor People’s Campaign & March from Baltimore to Washington D.C. will be May 11. Communities, schools and unions interested in participating are encouraged to contact the Baltimore People’s Assembly.
Contact: 410-500-2168; 410-218-4835; BaltimorePeoplesAssembly@gmail.com; Southern Christian Leadership Conference of Baltimore and the Baltimore Peoples Power Assembly, 2011 N. Charles St., Baltimore, MD 21218.
MOTHER’S DAY - The 17th Annual Mother’s Day Walk For Peace will be May 12th, in Dorchester, MA. The walk began in 1996 for families who had lost children to violence. The day has become a way for thousands of people to financially support the work of the Louis Brown Peace Institute.
Contact: http://www.ldbpeaceinstitute.org/; http://mothersdaywalk4peace.org/.
NATO 5 - An International Week of Solidarity with the NATO 5 has been called for May 16-21. Supports call on supporters to raise awareness of the NATO 5 and support funds for the defendants on the one-year anniversary of their preemptive arrests.
Contact: email@example.com; https://nato5support.wordpress.com.
MOUNTAINTOP - The 2013 Mountain Justice Summer Activist Training Camp will be held May 19-27 in Damascus, VA. It will be a week of workshops, field trips to view Mountain Top Removal coal mines, direct actions, and service project.
FEMINIST SCI-FI - The feminist science fiction convention WisCon 37 is scheduled for May 24-27 in Madison, WI.
Contact: WisCon, ? SF3, PO Box 1624, Madison, WI 53701; firstname.lastname@example.org; http://www.wiscon.info/.
ANARCHY FEST - A month-long Festival of Anarchy is scheduled for May in Montreal. The festival includes The Montreal Anarchist Bookfair (May 19-20).
Contact: http://www.anarchistbookfair.ca/; http://www.radicalmontreal.com/.
LABOR - The International Labor Rights Forum will present: Down the Supply Chain, Driving Corporate Accountability, on May 22 in Washington, DC. The Labor Rights Awards Ceremony and Reception will honor pioneers in supply chain worker organizing, working solidarity and international labor rights policy.
MULTICULTURE - The 26th annual National Conference on Race & Ethnicity in American Higher Education (NCORE) will take place May 28-June 1, in New Orleans.
Contact: SWCHRS, 3200 Marshall Avenue, Suite 290, Norman, OK 73072; 405-325-3694; email@example.com; www.ncore.ou.edu.
MEDIA - The 2013 Alliance for Community Media Annual Conference will be held May 29-31, in San Francisco, CA. Participants will include educators, community leaders, media professionals, journalists, nonprofit leaders, policymakers and students.
RADIO - The 38th Annual Community Radio Conference is schedule for May 29-June 1, in San Francisco, CA, with discussions and workshops.
Contact: 1101 Pennsylvania Ave. NW, Suite 600, Washington, DC 20004; 202-756-2268; firstname.lastname@example.org; http://www.nfcb.org/.
BRADLEY MANNING - On June 1, a rally will be held at Fort Meade in support of Bradley Manning.
BIKES - Bikes Not Bombs is holding its 24th annual Bike-A-Thon and Green Roots Festival in Boston, MA on June 3, with several bike rides scheduled, music, exhibitors and more.
Contact: Bikes Not Bombs, 284 Amory St., Jamaica Plain, MA 02130; 617-522-0222; email@example.com; www.bikesnotbombs.org.
LEFT FORUM - The 2013 Left Forum will be held June 7-9, at Pace University in New York City.
Contact: 365 Fifth Avenue, CUNY Graduated Center, ? Sociology Dept., New York, NY 10016; http://www.leftforum.org/.
VEGAN FEST - Mad City Vegan Fest will be held in Madison, WI, June 8. The annual event features food, speakers, and exhibitors.
Contact: 122 State Street, Suite 405 B, Madison, WI 53701; firstname.lastname@example.org; http://veganfest.org/.
ADC CONFERENCE - The American-Arab Anti-Discrimination Committee (ADC) holds its annual conference June 13-16, in Washington, DC, with panel discussions and workshops on civil rights, media and other topics.
Contact: 1990 M Street, Suite 610, Washington, DC, 20036; 202-244-2990; email@example.com http://convention.adc.org/.
CUBA/SOCIALISM - A Cuban-North American Dialog on Socialist Renewal and Global Capitalist Crisis will be held in Havana, Cuba, June 16-30. There will be a 5 day Seminar at University of Havana, plus visits to a cooperative, urban garden, community development project, social research centers, and educational & medical institutions.
Contact: firstname.lastname@example.org; http://www.globaljusticecenter.org/.
NETROOTS - The 8th Annual Netroots Nation conference will take place June 20-23 in San Jose, CA. The event features panels, trainings, networking, screenings, and keynotes.
Contact: 164 Robles Way, #276, Vallejo, CA 94591; email@example.com; http://www.netrootsnation.org/.
MEDIA - The 15th annual Allied Media Conference will be held June 20-23, in Detroit.
Contact: 4126 Third Street, Detroit, MI 48201; http://alliedmedia.org/.
GRASSROOTS - The United We Stand Festival will be hosted by Free & Equal, June 22 in Little Rock, Arkansas. The festival aims to reform the electoral process throughout the U.S.
SOCIALISM - The Socialism 2013 Conference is scheduled for June 27-30 in Chicago, featuring talks and panel discussions.
Contact: firstname.lastname@example.org; http://www.socialismconference.org.
LITERACY - The National Association for Media Literacy Education (NAMLE) will hold its conference July 12-13 in Los Angeles under the heading, Intersections: Teaching and Learning Across Media.
Contact: 10 Laurel Hill Drive, Cherry Hill, NJ 08003; http://namle.net/conference/.
IWW - The North American Work People’s College will take place July 12-16 at Mesaba Co-op Park in northern Minnesota. The event will bring together Wobblies from branches across the continent to learn new skills and build One Big Union.
PEACESTOCK - On July 13th, the 11th Annual Peacestock: A Gathering for Peace, will take place at Windbeam Farm in Hager City, WI. The event is a mixture of music, speakers and community for peace. Sponsored by Veterans for Peace.
Contact: Bill Habedank, 1913 Grandview Ave., Red Wing, MN 55066; 651-388-7733; email@example.com; http://www.peacestockvfp.org.
CHILDREN’S DEFENSE - July 15-19, join clergy, seminarians, Christian educators, young adult leaders and other faith-based advocates for children at CDF Haley Farm in Clinton, Tennessee, for five days of spiritual renewal, networking, movement building workshops, and continuing education about the urgent needs of children at the 19th annual Proctor Institute for Child Advocacy Ministry.
Contact: firstname.lastname@example.org; http://www.childrensdefense.org.
ACTIVIST CAMP - Youth Empowered Action (YEA) Camp will have sessions in July and August in Ben Lomond, CA; Portland, OR; Charlton, MA. YEA Camp is designed for activists 12-17 years old who want to make a difference in the world.
Contact: email@example.com; http://yeacamp.org/.
LA RAZA - The annual National Council of La Raza (NCLR) Conference is scheduled for July 18-19 in New Orleans, with workshops, presentations and panel discussions.
Contact: NCLR Headquarters Office, Raul Yzaguirre Building, 1126 16th Street, NW, Washington, DC 20036; 202-785-1670; www.nclr.org.
LABOR - The Eastern Conference For Workplace Democracy: Growing Our Cooperatives, Growing Our Communities, will be held at Drexel University in Philadelphia, PA, July 26-28.
Contact: firstname.lastname@example.org; http://east.usworker.coop/.
WOMEN/LYNNE STEWART- Radical Women is asking for support letters and cards to be sent to Lynne Stewart. Stewart is a civil rights attorney and political prisoner who is currently in jail. She has breast cancer and authorities have denied her request for transfer from her Texas prison to the New York City hospital where she received medical attention during a prior bout of breast cancer. Send messages and cards to: Lynne Stewart 53504-054, Federal Medical Center Carswell, P.O. Box 27137, Fort Worth, TX 76127.
Contact: 747 Polk Street, San Francisco, CA 94109; 415-864-1278; RadicalWomenUS@gmail.com; http://lynnestewart.org/; http://www.radicalwomen.org/.
HAITI/WOMEN - Haiti’s government is considering a legal reform measure that would prohibit and punish all sexual assault, including marital rape. MADRE and the International Campaign to Stop Rape & Gender Violence in Conflict are launching a petition to raise international support for this push to address violence against women in Haiti.
Contact: 121 West 27th Street, #301, New York, NY 10001; 212-627-0444; email@example.com; http://www.madre.org.
SYRIA/MIDDLE EAST - The Middle East Children’s Alliance (MECA) is currently seeking funds to assist more than 200,000 refugees fleeing violence in Syria.
FOLK FESTIVAL - The Falcon Ridge Folk Festival will be held August 2-4, in the Berkshires, NY.
Contact: http://www.falconridgefolk.com/; firstname.lastname@example.org.
WAR RESISTERS - The War Resisters League will hold its 90th anniversary conference, Revolutionary Nonviolence: Building Bridges Across Generations and Communities, August 1-4, at Georgetown University. The event will focus on the U.S.’ long history of antimilitarism.
Contact: 339 Lafayette Street, New York, NY 10012; 212-228-0450; email@example.com; http://www.warresisters.org.
POPULAR ECONOMICS - The Center for Popular Economics is holding its 2013 Summer Institute August 4-9 at Hampshire College in Amherst, MA. No background in economics is needed for this intensive training. This year’s theme is, The Care Economy: Building a Just Economy with a Heart.
Contact: Center for Popular Economics, PO Box 785 Amherst, MA 01004; 413-545-0743; firstname.lastname@example.org; www.populareconomics.org.
VETERANS - Veterans for Peace is holding the 28th annual convention August 6-11 in Madison, WI. This year’s theme is, Power To The Peaceful.
DEMOCRACY - The Democracy Convention will take place August 7-11 in Madison, WI. The convention brings together nine conferences including topics such as media, education, defense, race, environment and others.
MEN - The 38th National Conference on Men & Masculinity: Forging Justice: Creating Safe, Equal and Accountable Communities, presented in partnership with HAVEN, will be held in Detroit, MI, August 8-10.
Contact: email@example.com; http://www.nomas.org/.
OCCUPY - An Occupy National Gathering will be held in Kalamazoo, MI, August 21-25.
Contact: firstname.lastname@example.org; http://occupynationalgathering.net/.
COMMUNITIES - The Communities Conference is a networking and learning opportunity for co-operative or communal lifestyles, with workshops, events and entertainment; scheduled for August 30-September 2 at the Twin Oaks Community in Louisa, Virginia.
LABOR DAY - The 29th annual Bread and Roses Festival, a celebration of the ethnic diversity and labor history of Lawrence, MA, will be held September 2, in honor of the 1912 Bread and Roses Strike. There will be music, dance, poetry, drama, ethnic food, historical demonstrations, walking & trolley tours.
Contact: PO Box 1137, Lawrence, MA 01842; 978-794-1655; http://www.breadandrosesheritage.org/.
OCCUPY WALL STREET - September 17 is the two-year anniversary of the Occupy Wall Street movement. Events are planned in New York City and worldwide.
TEACHERS - The 13th Annual Conference, “Teaching for Social Justice: The Politics of Pedagogy,” will be held October 12 in San Francisco, CA. The free event features workshops, resources, and free childcare.
Contact: 415-676-7844; email@example.com; http://www.t4sj.org/.
HAITI - International Action, which brings clean water and chlorinators to Haiti, seeks office space capable of housing up to six people and their office equipment.
Contact: Zach Bremer, Zbrehmer@haitiwater.org; 202-488-0735; http://www.haitiwater.org/.
MEDIA - The Union for Democratic Communications and Project Censored are sponsoring a joint conference on media democracy, media activism and social justice to be held November 1-3 at the University of San Francisco. Proposals for presentations, workshops and panels from activists and critical scholars are invited.