Federal Government

Open Letter #2 to UC Merced Chancellor Steve Kang

Submitted: Oct 22, 2007

Badlands Journal editorial board replies to Chancellor Kang's October 5 Message to Faculty and Staff

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Kuttner: 1929 and 2007

Submitted: Oct 15, 2007

Testimony of Robert Kuttner
Before the Committee on Financial Services
Rep. Barney Frank, Chairman
U.S. House of Representatives
Washington, D.C.
October 2, 2007
Mr. Chairman and members of the Committee:

Thank you for this opportunity. My name is Robert Kuttner. I am an economics and financial journalist, author of several books about the economy, co-editor of The American Prospect, and former investigator for the Senate Banking Committee. I have a book appearing in a few weeks that addresses the systemic risks of financial innovation coupled with deregulation and the moral hazard of periodic bailouts.

In researching the book, I devoted a lot of effort to reviewing the abuses of the 1920s, the effort in the 1930s to create a financial system that would prevent repetition of those abuses, and the steady dismantling of the safeguards over the last three decades in the name of free markets and financial innovation.

Your predecessors on the Senate Banking Committee, in the celebrated Pecora Hearings of 1933 and 1934, laid the groundwork for the modern edifice of financial regulation. I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.

Although the particulars are different, my reading of financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials -- excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.

The most basic and alarming parallel is the creation of asset bubbles, in which the purveyors of securities use very high leverage; the securities are sold to the public or to specialized funds with underlying collateral of uncertain value; and financial middlemen extract exorbitant returns at the expense of the real economy. This was the essence of the abuse of public utilities stock pyramids in the 1920s, where multi-layered holding companies allowed securities to be watered down, to the point where the real collateral was worth just a few cents on the dollar, and returns were diverted from operating companies and ratepayers. This only became exposed when the bubble burst. As Warren Buffett famously put it, you never know who is swimming naked until the tide goes out.

There is good evidence -- and I will add to the record a paper on this subject by the Federal Reserve staff economists Dean Maki and Michael Palumbo -- that even much of the boom of the late 1990s was built substantially on asset bubbles. ["Disentangling the Wealth Effect: a Cohort Analysis of Household Savings in the 1990s"]

A second parallel is what today we would call securitization of credit. Some people think this is a recent innovation, but in fact it was the core technique that made possible the dangerous practices of the 1920. Banks would originate and repackage highly speculative loans, market them as securities through their retail networks, using the prestigious brand name of the bank -- e.g. Morgan or Chase -- as a proxy for the soundness of the security. It was this practice, and the ensuing collapse when so much of the paper went bad, that led Congress to enact the Glass-Steagall Act, requiring bankers to decide either to be commercial banks -- part of the monetary system, closely supervised and subject to reserve requirements, given deposit insurance, and access to the Fed's discount window; or investment banks that were not government guaranteed, but that were soon subjected to an extensive disclosure regime under the SEC.

Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s -- lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn't paper at all, and the whole process is supercharged by computers and automated formulas. An independent source of instability is that while these credit derivatives are said to increase liquidity and serve as shock absorbers, in fact their bets are often in the same direction -- assuming perpetually rising asset prices -- so in a credit crisis they can act as net de-stabilizers.

A third parallel is the excessive use of leverage. In the 1920s, not only were there pervasive stock-watering schemes, but there was no limit on margin. If you thought the market was just going up forever, you could borrow most of the cost of your investment, via loans conveniently provided by your stockbroker. It worked well on the upside. When it didn't work so well on the downside, Congress subsequently imposed margin limits. But anybody who knows anything about derivatives or hedge funds knows that margin limits are for little people. High rollers, with credit derivatives, can use leverage at ratios of ten to one, or a hundred to one, limited only by their self confidence and taste for risk. Private equity, which might be better named private debt, gets its astronomically high rate of return on equity capital, through the use of borrowed money. The equity is fairly small. As in the 1920s, the game continues only as long as asset prices continue to inflate; and all the leverage contributes to the asset inflation, conveniently creating higher priced collateral against which to borrow even more money.

The fourth parallel is the corruption of the gatekeepers. In the 1920s, the corrupted insiders were brokers running stock pools and bankers as purveyors of watered stock. 1990s, it was accountants, auditors and stock analysts, who were supposedly agents of investors, but who turned out to be confederates of corporate executives. You can give this an antiseptic academic term and call it a failure of agency, but a better phrase is conflicts of interest. In this decade, it remains to be seen whether the bond rating agencies were corrupted by conflicts of interest, or merely incompetent. The core structural conflict is that the rating agencies are paid by the firms that issue the bonds. Who gets the business -- the rating agencies with tough standards or generous ones? Are ratings for sale? And what, really, is the technical basis for their ratings? All of this is opaque, and unregulated, and only now being investigated by Congress and the SEC.

Yet another parallel is the failure of regulation to keep up with financial innovation that is either far too risky to justify the benefit to the real economy, or just plain corrupt, or both. In the 1920s, many of these securities were utterly opaque. Ferdinand Pecora, in his 1939 memoirs describing the pyramid schemes of public utility holding companies, the most notorious of which was controlled by the Insull family, opined that the pyramid structure was not even fully understood by Mr. Insull. The same could be said of many of today's derivatives on which technical traders make their fortunes.

By contrast, in the traditional banking system a bank examiner could look at a bank's loan portfolio, see that loans were backed by collateral and verify that they were performing. If they were not, the bank was made to increase its reserves. Today's examiner is not able to value a lot of the paper held by banks, and must rely on the banks' own models, which clearly failed to predict what happened in the case of sub-prime. The largest banking conglomerates are subjected to consolidated regulation, but the jurisdiction is fragmented, and at best the regulatory agencies can only make educated guesses about whether balance sheets are strong enough to withstand pressures when novel and exotic instruments create market conditions that cannot be anticipated by models.

A last parallel is ideological -- the nearly universal conviction, 80 years ago and today, that markets are so perfectly self-regulating that government's main job is to protect property rights, and otherwise just get out of the way.

We all know the history. The regulatory reforms of the New Deal saved capitalism from its own self-cannibalizing instincts, and a reliable, transparent and regulated financial economy went on to anchor an unprecedented boom in the real economy. Financial markets were restored to their appropriate role as servants of the real economy, rather than masters. Financial regulation was pro-efficiency. I want to repeat that, because it is so utterly unfashionable, but it is well documented by economic history. Financial regulation was pro-efficiency. America's squeaky clean, transparent, reliable financial markets were the envy of the world. They undergirded the entrepreneurship and dynamism in the rest of the economy.

Beginning in the late 1970s, the beneficial effect of financial regulations has either been deliberately weakened by public policy, or has been overwhelmed by innovations not anticipated by the New Deal regulatory schema. New-Deal-era has become a term of abuse. Who needs New Deal protections in an Internet age?

Of course, there are some important differences between the economy of the 1920s, and the one that began in the deregulatory era that dates to the late 1970s. The economy did not crash in 1987 with the stock market, or in 2000-01. Among the reasons are the existence of federal breakwaters such as deposit insurance, and the stabilizing influence of public spending, now nearly one dollar in three counting federal, state, and local public outlay, which limits collapses of private demand.

But I will focus on just one difference -- the most important one. In the 1920s and early 1930s, the Federal Reserve had neither the tools, nor the experience, nor the self-confidence to act decisively in a credit crisis. But today, whenever the speculative excesses lead to a crash, the Fed races to the rescue. No, it doesn't bail our every single speculator (though it did a pretty good job in the two Mexican rescues) but it bails out the speculative system, so that the next round of excess can proceed. And somehow, this is scored as trusting free markets, overlooking the plain fact that the Fed is part of the U.S. government.

When big banks lost many tens of billions on third world loans in the 1980s, the Fed and the Treasury collaborated on workouts, and desisted from requiring that the loans be marked to market, lest several money center banks be declared insolvent. When Citibank was under water in 1990, the president of the Federal Reserve Bank of New York personally undertook a secret mission to Riyadh to persuade a Saudi prince to pump in billions in capital and to agree to be a passive investor.

In 1998, the Fed convened a meeting of the big banks and all but ordered a bailout of Long Term Capital Management, an uninsured and unregulated hedge fund whose collapse was nonetheless putting the broad capital markets at risk. And even though Chairman Greenspan had expressed worry two years (and several thousand points) earlier that "irrational exuberance" was creating a stock market bubble, big losses in currency speculation in East Asia and Russia led Greenspan to keep cutting rates, despite his foreboding that cheaper money would just pump up markets and invite still more speculation.

And finally in the dot-com crash of 2000-01, the speculative abuses and insider conflicts of interest that fueled the stock bubble were very reminiscent of 1929. But a general depression was not triggered by the market collapse, because the Fed again came to the rescue with very cheap money.

So when things are booming, the financial engineers can advise government not to spoil the party. But when things go bust, they can count on the Fed to rescue them with emergency infusions of cash and cheaper interest rates.

I just read Chairman Greenspan's fascinating memoir, which confirms this rescue role. His memoir also confirms Mr. Greenspan's strong support for free markets and his deep antipathy to regulation. But I don't see how you can have it both ways. If you are a complete believer in the proposition that free markets are self-regulating and self- correcting, then you logically should let markets live with the consequences. On the other hand, if you are going to rescue markets from their excesses, on the very reasonable ground that a crash threatens the entire system, then you have an obligation to act pre-emptively, prophylactically, to head off highly risky speculative behavior. Otherwise, the Fed just invites moral hazards and more rounds of wildly irresponsible actions.

While the Fed and the European Central Bank were flooding markets with liquidity to prevent a deeper crash in August and September, the Bank of England decided on a sterner course. It would not reward speculators. The result was an old fashioned run on a large bank, and the Bank of England changed its tune.

So the point is not that the Fed should let the whole economy collapse in order to teach speculators a lesson. The point is that the Fed needs to remember its other role -- as regulator.

One of the odd things about the press commentary about what the Fed should do is that it has been entirely along one dimension: a Hobson's choice: -- either loosen money and invite more risky behavior, or refuse to enable asset bubbles and risk a more serious credit crunch -- as if these were the only options and monetary policy were the only policy lever. But the other lever, one that has fallen into disrepair and disrepute, is preventive regulation.

Mr. Chairman, you have had a series of hearings on the sub-prime collapse, which has now been revealed as a textbook case of regulatory failure. About half of these loans were originated by non-federally regulated mortgage companies. However even those sub-prime loans should have had their underwriting standards policed by the Federal Reserve or its designee under the authority of the 1994 Home Equity and Ownership Protection Act. And by the same token, the SEC should have more closely monitored the so called counterparties -- the investment and commercial banks -- that were supplying the credit. However, the Fed and the SEC essentially concluded that since the paper was being sold off to investors who presumably were cognizant of the risks, they did not need to pay attention to the deplorable underwriting standards.

In the 1994 legislation, Congress not only gave the Fed the authority, but directed the Fed to clamp down on dangerous and predatory lending practices, including on otherwise unregulated entities such as sub-prime mortgage originators. However, for 13 years the Fed stonewalled and declined to use the authority that Congress gave it to police sub-prime lending. Even as recently as last spring, when you could not pick up a newspaper's financial pages without reading about the worsening sub-prime disaster, the Fed did not act -- until this Committee made an issue of it.

Financial markets have responded to the 50 basis-point rate-cut, by bidding up stock prices, as if this crisis were over. Indeed, the financial pages have reported that as the softness in housing markets is expected to worsen, traders on Wall Street have inferred that the Fed will need to cut rates again, which has to be good for stock prices.

Mr. Chairman, we are living on borrowed time. And the vulnerability goes far beyond the spillover effects of the sub-prime debacle.

We need to step back and consider the purpose of regulation. Financial regulation is too often understood as merely protecting consumers and investors. The New Deal model is actually a relatively indirect one, since it relies more on mandated disclosures, and less on prohibited practices. The enormous loopholes in financial regulation -- the hedge fund loophole, the private equity loophole, are justified on the premise that consenting adults of substantial means do not need the help of the nanny state, thank you very much. But of course investor protection is only one purpose of regulation. The other purpose is to protect the system from moral hazard and catastrophic risk of financial collapse. It is this latter function that has been seriously compromised.

HOEPA was understood mainly as consumer protection legislation, but it was also systemic risk legislation.

Sarbanes-Oxley has been attacked in some quarters as harmful to the efficiency of financial markets. One good thing about the sub-prime calamity is that we haven't heard a lot of that argument lately. Yet there is still a general bias in the administration and the financial community against regulation.

Mr. Chairman, I commend you and this committee for looking beyond the immediate problem of the sub-prime collapse. I would urge every member of the committee to spend some time reading the Pecora hearings, and you will be startled by the sense of déjà vu.

I'd like to close with an observation and a recommendation.

My perception as a financial journalist is that regulation is so out of fashion these days that it narrows the legislative imagination, since politics necessarily is the art of the possible and your immediate task is to find remedies that actually stand a chance of enactment. There is a vicious circle -- a self-fulfilling prophecy -- in which remedies that currently are legislatively unthinkable are not given serious thought. Mr. Chairman, you are performing an immense public service by broadening the scope of inquiry beyond the immediate crisis and immediate legislation.

Three decades ago, a group of economists inspired by the work of the late Milton Friedman created a shadow Federal Open Market Committee, to develop and recommend contrarian policies in the spirit of Professor Friedman's recommendation that monetary policy essentially be put on automatic pilot. The committee had great intellectual and political influence, and its very existence helped people think through dissenting ideas. In the same way, the national security agencies often create Team B exercises to challenge the dominant thinking on a defense issue.

In the coming months, I hope the committee hears from a wide circle of experts -- academics, former state and federal regulators, financial historians, people who spent time on Wall Street -- who are willing to look beyond today's intellectual premises and legislative limitations, and have ideas about what needs to be re-regulated. Here are some of the questions that require further exploration:

First, which kinds innovations of financial engineering actually enhance economic efficiency, and which ones mainly enrich middlemen, strip assets, appropriate wealth, and increase systemic risk? It no longer works to assert that all innovations, by definition, are good for markets or markets wouldn't invent them. We just tested that proposition in the sub-prime crisis, and it failed. But which forms of credit derivatives, for example, truly make markets more liquid and better able to withstand shocks, and which add to the system's vulnerability. We can't just settle that question by the all purpose assumption that market forces invariably enhance efficiency. We have to get down to cases.

The story of the economic growth in the 1990s and in this decade is mainly a story of technology, increased productivity growth, macro-economic stimulation, and occasionally of asset bubbles. There is little evidence that the growth rates of the past decade and a half -- better than the 1970s and ‘80s, worse than the 40's, 50's and ‘60s -- required or benefited from new techniques of financial engineering.

I once did some calculations on what benefits securitization of mortgage credit had actually had. By the time you net out the fee income taken out by all of the middlemen -- the mortgage broker, the mortgage banker, the investment banker, the bond-rating agency -- it's not clear that the borrower benefits at all. What does increase, however, are the fees and the systemic risks. More research on this question would be useful. What would be the result of the secondary mortgage market were far more tightly subjected to standards? It is telling that the mortgages that best survived the meltdown were those that met the underwriting criteria of the GSE's.

Second, what techniques and strategies of regulation are appropriate to damp down the systemic risks produced by the financial innovation? As I observed, when you strip it all down, at the heart of the recent financial crises are three basic abuses: lack of transparency; excessive leverage; and conflicts of interest. Those in turn suggest remedies: greater disclosure either to regulators or to the public. Requirement of increased reserves in direct proportion to how opaque and difficult to value are the assets held by banks. Some restoration of the walls against conflicts of interest once provided by Glass Steagall. Tax policies to discourage dangerously high leverage ratios, in whatever form.

Maybe we should just close the loophole in the 1940 Act and require of hedge funds and private equity firms the same kinds of disclosures required of others who sell shares to the public, which in effect is what hedge funds and private equity increasingly do. The industry will say that this kind of disclosure impinges on trade secrets. To the extent that this concern is valid, the disclosure of positions and strategies can be to the SEC. This is what is required of large hedge funds by the Financial Services Authority in the UK, not a nation noted for hostility to hedge funds. Indeed, Warren Buffet's Berkshire Hathaway, which might have chosen to operate as private equity, makes the same disclosures as any other publicly listed firm. It doesn't seem to hurt Buffett at all.

To the extent that some private equity firms and strategies strip assets, while others add capital and improve management, maybe we need a windfall profits tax on short term extraction of assets and on excess transaction fees. If private equity has a constructive role to play -- and I think it can -- we need public policies to reward good practices and discourage bad ones. Industry codes, of the sort being organized by the administration and the industry itself, are far too weak.

Why not have tighter regulation both of derivatives that are publicly traded and those that are currently regulated -- rather weakly -- by the CFTC: more disclosure, limits on leverage and on positions. And why not make OTC and special purpose derivatives that are not ordinarily traded (and that are black holes in terms of asset valuation), also subject to the CFTC?

A third big question to be addressed is the relationship of financial engineering to problems of corporate governance. Ever since the classic insight of A.A. Berle and Gardiner Means in 1933, it has been conventional to point out that corporate management is not adequately responsible to shareholders, and by extension to society, because of the separation of ownership from effective control. The problem, if anything, is more serious today than when Berle and Means wrote in 1933, because of the increased access of insiders to financial engineering. We have seen the fruits of that access in management buyouts, at the expense of both other shareholders, workers, and other stakeholders. This is pure conflict of interest.

Since the first leveraged buyout boom, advocates of hostile takeovers have proposed a radically libertarian solution to the Berle-Means problem. Let a market for corporate control hold managers accountable by buying, selling, and recombining entire companies via LBOs that tax deductible money collateralized by the target's own assets. It is astonishing that this is even legal, let alone rewarded by tax preferences, even more so when managers with a fiduciary responsibility to shareholders are on both sides of the bargain.

The first boom in hostile takeovers crashed and burned. The second boom ended with the stock market collapse of 2000-01. The latest one is rife with conflicts of interest, it depends heavily on the perception that stock prices are going to continue to rise at multiples that far outstrip the rate of economic growth, and on the borrowed money to finance these deals that puts banks increasingly at risk.

So we need a careful examination of better ways of holding managers accountable -- through more power for shareholders and other stakeholders such as employees, proxy rules not tilted to incumbent management, and rules that reward mutual funds for serving as the agents of shareholders, and not just of the profit maximization of the fund sponsor. John Bogle, a pioneer in the modern mutual fund industry, has written eloquently on this.

Interestingly, the intellectual fathers of the leveraged buyout movement as a supposed source of better corporate governance, have lately been having serious second thoughts.

Michael Jensen, one of the original theorists of efficient market theory and the so called market for corporate control and an advocate of compensation incentives for corporate CEOs has now written a book calling for greater control of CEOs and less cronyism on corporate boards. That cronyism, however, is in part a reflection of Jensen's earlier conception of the ideal corporation.

I don't have all the answers on regulatory remedies, but people smarter than I need to systematically ask these questions, even if they are beyond the pale legislatively for now. And there are scholars of financial markets, former state and federal regulators, economic historians, and even people who did time on Wall Street, who all have the same concerns that I do as well as more technical expertise, and who I am sure would be happy to find company and to serve.

One last parallel: I am chilled, as I'm sure you are, every time I hear a high public official or a Wall Street eminence utter the reassuring words, "The economic fundamentals are sound." Those same words were used by President Hoover and the captains of finance, in the deepening chill of the winter of 1929-1930. They didn't restore confidence, or revive the asset bubbles.

The fact is that the economic fundamentals are sound -- if you look at the real economy of factories and farms, and internet entrepreneurs, and retailing innovation and scientific research laboratories. It is the financial economy that is dangerously unsound. And as every student of economic history knows, depressions, ever since the South Sea bubble, originate in excesses in the financial economy, and go on to ruin the real economy.

It remains to be seen whether we have dodged the bullet for now. If markets do calm down, and lower interest bail out excesses once again, then we have bought precious time. The worst thing of all would be to conclude that markets self corrected once again, and let the bubble economy continue to fester. Congress has a window in which restore prudential regulation, and we should use that window before the next crisis turns out to be a mortal one.

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CESHA Comments on Proposed New UC Merced Footprint

Submitted: Oct 05, 2007

Press release: For Immediate Use !! ******* Press release: For Immediate Use !!

California Endangered Species and Habitat Alliance

Butte Environmental Council * California Native Plant Society * Defenders of Wildlife * Protect Our Water * San Joaquin Raptor and Wildlife Rescue Center * San Joaquin Valley Conservancy * VernalPools.Org

October 5, 2007 Contacts:

(916) 452-5440 Carol Witham, VernalPools.Org

(916) 201-8277 Kim Delfino, Defenders of Wildlife

(530) 295-8210 Sue Britting, California Native Plant

(530) 891-6424 Barbara Vlamis, Butte Environmental Council

(209) 723-9283 Lydia Miller, San Joaquin Raptor/Wildlife Rescue Center

CESHA COMMENTS ON PROPOSED NEW UC MERCED FOOTPRINT

MERCED, CA (Oct. 5, 2007) –

The California Endangered Species and Habitat Alliance (CESHA) is a coalition of national, statewide, and local groups working to protect endangered species and habitat in California. We are committed to effectively and strategically advocating for and educating towards changes in California’s policy, politics, and public awareness that will enable protection of California’s endangered species and threatened habitats.

Members of CESHA, including Butte Environmental Council, Defenders of Wildlife, California Native Plant Society, Protect Our Water, San Joaquin Raptor/Wildlife Rescue Center, San Joaquin Valley Conservancy, and VernalPools.Org, have been meeting with UC Merced officials, plus federal and state resource agency officials for more than two years in a dialogue about the Merced campus impacts on the habitat for endangered species.

“VernalPool.org supports the UC’s announcement today regarding the reduced footprint” said Carol Witham of VernalPools.org, “because it is environmentally more balanced than the original proposal and reduces impacts to vernal pools and endangered species.”

“We look forward to seeing new plans and participating in the public review process on the new campus,” said Lydia Miller, president of the San Joaquin Raptor/Wildlife Rescue Center.

“CESHA’s open discussions with UC may prove beneficial for the species, habitat, and the Merced campus, which has been a collaborative opportunity too good to miss,” stated Barbara Vlamis of Butte Environmental Council.

CESHA has been in continual dialogue with federal and state resource agencies concerning the impacts to and disappearance of endangered species habitat, most notably in the eastern Central Valley. Among CESHA achievements is the California Rangeland Conservation Coalition, a group of environmental organizations and cattle-ranching groups that work together for the preservation of working cattle ranches and endangered species habitat in California.

UC Merced’s announcement may be found at
http://www.ucmerced.edu/news_articles/10052007_uc_merced_modifies_plans.asp.

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Antidote to Petraeus Week

Submitted: Sep 16, 2007
“From the moment a soldier enlists, we inculcate loyalty, duty, honor, integrity, and selfless service,” Taguba said. “And yet when we get to the senior-officer level we forget those values. I know that my peers in the Army will be mad at me for speaking out, but the fact is that we violated the laws of land warfare in Abu Ghraib. We violated the tenets of the Geneva Convention. We violated our own principles and we violated the core of our military values. The stress of combat is not an excuse, and I believe, even today, that those civilian and military leaders responsible should be held accountable.” -- New Yorker, Seymour Hirsh, June 25, 2007

The Bush administration, with the help of its pet general, have put on quite a show this week. It reminds us of some of the worst propaganda since the months before the invasion and occupation of Iraq or the propaganda campaigns about the Vietnam War 40 years ago.

However, there are signs that reality is still an option, even in some military circles. Admiral William Fallon, chief of the Central Command (CENTCOM), is widely reported to have

“derided Petraeus as a sycophant during their first meeting in Baghdad last March, according to Pentagon sources familiar with reports of the meeting. Fallon told Petraeus that he considered him to be ‘an ass-kissing little chickenshit’ and added, ‘I hate people like that’, the sources say.”

Petraeus is reported to have told an Iraqi official that he planned to run for president one day, which fits with his triumphal march on the national Capitol. He will be running on the Roman Party ticket in 2012, one presumes.

Meanwhile, even Alan Greenspan, former chairman of the Federal Reserve, has admitted in print, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."

If there is an antidote to General Petraeus' triumphal march on Washington, it is to reread the story of General Antonio Taguba, who investigated the Abu Ghraib scandal, as reported (see below) by Seymour Hirsh, in the New Yorker last June. Hersh, who at times has publicly said he finds himself writing an alternative history of the Iraq War, provides us with a sober alternative to Petraeus in his portrait of military honor, bravery and honesty in "The General's Report."

Bill Hatch
----------------------------

9-16-07
CommonDreams.org (The Observer/UK)
http://www.commondreams.org/archive/2007/09/16/3879/
Greenspan Admits Iraq was About Oil, As Deaths Put at 1.2 Million
by Peter Beaumont and Joanna Walters in New York

The man once regarded as the world’s most powerful banker has bluntly declared that the Iraq war was ‘largely’ about oil.Appointed by Ronald Reagan in 1987 and retired last year after serving four presidents, Alan Greenspan has been the leading Republican economist for a generation and his utterings instantly moved world markets. In his long-awaited memoir — out tomorrow in the US — Greenspan, 81, who served as chairman of the US Federal Reserve for almost two decades, writes: ‘I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.’...

9-15-07
CounterPunch
The General Came to Washington
By ALEXANDER COCKBURN
www.counterpunch.com

Blend a war and a presidential campaign and you have a recipe for 200 proof mendacity, as the Petraeus hearings at the start of the week triumphantly proved...

9-14-07
Asia Times Petraeus out of step with US top brass
By Gareth Porter
http://www.atimes.com/atimes/Middle_East/II14Ak02.html

WASHINGTON - In sharp contrast to the lionization of General David Petraeus by members of the US Congress during his testimony this week, Petraeus's superior, Admiral William Fallon, chief of the Central Command (Centcom), derided Petraeus as a sycophant during their first meeting in Baghdad in March, according to Pentagon sources familiar with reports of the meeting. Fallon told Petraeus that he considered him to be "an ass-kissing little chickenshit" and added, "I hate people like that," the sources say. That remark reportedly came after Petraeus began the meeting by making remarks that Fallon interpreted as trying to ingratiate himself with a superior...

9-11-07
CommonDreams
Swear Him In!
by Ray McGovern
http://www.commondreams.org/archive/2007/09/11/3755/

That’s all I said in the unusual silence on Monday afternoon as first aid was being administered to Gen. David Petraeus’ microphone before he spoke before the House Armed Services and Foreign Affairs Committees.It had dawned on me that when House Armed Services Committee Chairman Ike Skelton (D-Missouri) invited Gen. Petraeus to make his presentation, Skelton forgot to ask him to take the customary oath to tell the truth, the whole truth, and nothing but the truth. I had no idea that my suggestion would be enough to get me thrown out of he hearing...

6-25-07
New Yorker
Annals of National Security
The General’s Report
How Antonio Taguba, who investigated the Abu Ghraib scandal, became one of its casualties.
by Seymour M. Hersh
http://www.newyorker.com/reporting/2007/06/25/070625fa_fact_hersh

On the afternoon of May 6, 2004, Army Major General Antonio M. Taguba was summoned to meet, for the first time, with Secretary of Defense Donald Rumsfeld in his Pentagon conference room. Rumsfeld and his senior staff were to testify the next day, in televised hearings before the Senate and the House Armed Services Committees, about abuses at Abu Ghraib prison, in Iraq. The previous week, revelations about Abu Ghraib, including photographs showing prisoners stripped, abused, and sexually humiliated, had
appeared on CBS and in The New Yorker. In response, Administration officials had insisted that only a few low-ranking soldiers were involved and that America did not torture prisoners. They emphasized that the Army itself had uncovered the scandal.
If there was a redeeming aspect to the affair, it was in the thoroughness and the passion of the Army’s initial investigation. The inquiry had begun in January, and was led by General Taguba, who was stationed in Kuwait at the time. Taguba filed his report in March. In it he found: Numerous incidents of sadistic, blatant, and wanton criminal abuses were inflicted on several detainees . . . systemic and illegal abuse.
Taguba was met at the door of the conference room by an old friend, Lieutenant General Bantz J. Craddock, who was Rumsfeld’s senior military assistant. Craddock’s daughter had been a babysitter for Taguba’s two children when the officers served together years earlier at Fort Stewart, Georgia. But that afternoon, Taguba recalled, “Craddock just said, very coldly, ‘Wait here.’ ” In a series of interviews early this year, the first he
has given, Taguba told me that he understood when he began the inquiry that it could damage his career; early on, a senior general in Iraq had pointed out to him that the abused detainees were “only Iraqis.” Even so, he was not prepared for the greeting he received when he was finally ushered in.
“Here . . . comes . . . that famous General Taguba—of the Taguba report!” Rumsfeld declared, in a mocking voice. The meeting was attended by Paul Wolfowitz, Rumsfeld’s deputy; Stephen Cambone, the Under-Secretary of Defense for Intelligence; General Richard Myers, chairman of the Joint Chiefs of Staff (J.C.S.); and General Peter Schoomaker, the Army chief of staff, along with Craddock and other officials. Taguba, describing the moment nearly three years later, said, sadly, “I thought they wanted to know. I assumed they wanted to know. I was ignorant of the setting.”
In the meeting, the officials professed ignorance about Abu Ghraib. “Could you tell us what happened?” Wolfowitz asked. Someone else asked, “Is it abuse or torture?” At that point, Taguba recalled, “I described a naked detainee lying on the wet floor, handcuffed, with an interrogator shoving things up his rectum, and said, ‘That’s not abuse. That’s torture.’ There was quiet.”
Rumsfeld was particularly concerned about how the classified report had become public. “General,” he asked, “who do you think leaked the report?” Taguba responded that perhaps a senior military leader who knew about the investigation had done so. “It was just my speculation,” he recalled. “Rumsfeld didn’t say anything.” (I did not meet Taguba until mid-2006 and obtained his report elsewhere.) Rumsfeld also complained about not being given the information he needed. “Here I am,” Taguba recalled Rumsfeld saying, “just a Secretary of Defense, and we have not seen a copy of your report. I have not seen the
photographs, and I have to testify to Congress tomorrow and talk about this.” As Rumsfeld spoke, Taguba said, “He’s looking at me. It was a statement.”
At best, Taguba said, “Rumsfeld was in denial.” Taguba had submitted more than a dozen copies of his report through several channels at the Pentagon and to the Central Command headquarters, in Tampa, Florida, which ran the war in Iraq. By the time he walked into Rumsfeld’s conference room, he had spent weeks briefing senior military leaders on the report, but he received no indication that any of them, with the exception of General Schoomaker, had actually read it. (Schoomaker later sent Taguba a note praising his
honesty and leadership.) When Taguba urged one lieutenant general to look at the photographs, he rebuffed him, saying, “I don’t want to get involved by looking, because what do you do with that information, once you know what they show?”
Taguba also knew that senior officials in Rumsfeld’s office and elsewhere in the Pentagon had been given a graphic account of the pictures from Abu Ghraib, and told of their potential strategic significance, within days of the first complaint. On January 13, 2004, a military policeman named Joseph Darby gave the Army’s Criminal Investigation Division (C.I.D.) a CD full of images of abuse. Two days later, General Craddock and
Vice-Admiral Timothy Keating, the director of the Joint Staff of the J.C.S., were e-mailed a summary of the abuses depicted on the CD. It said that approximately ten soldiers were shown, involved in acts that included:
Having male detainees pose nude while female guards pointed at their genitals; having female detainees exposing themselves to the guards; having detainees perform indecent acts with each other; and guards physically assaulting detainees by beating and dragging them with choker chains.
Taguba said, “You didn’t need to ‘see’ anything—just take the secure e-mail traffic at face value.”
I learned from Taguba that the first wave of materials included descriptions of the sexual humiliation of a father with his son, who were both detainees. Several of these images, including one of an Iraqi woman detainee baring her breasts, have since surfaced; others have not. (Taguba’s report noted that photographs and videos were being held by the C.I.D. because of ongoing criminal investigations and their “extremely sensitive nature.”) Taguba said that he saw “a video of a male American soldier in uniform sodomizing a female detainee.” The video was not made public in any of the subsequent court proceedings, nor has there been any public government mention of it. Such images would have added an even more inflammatory element to the outcry over Abu Ghraib. “It’s bad enough that there were photographs of Arab men wearing women’s panties,” Taguba said...
Rumsfeld was vague, in his appearances before Congress, about when he had informed the President about Abu Ghraib, saying that it could have been late January or early February. He explained that he routinely met with the President “once or twice a week . . . and I don’t keep notes about what I do.” He did remember that in mid-March he and General Myers were “meeting with the President and discussed the reports that we had obviously heard” about Abu Ghraib.
Whether the President was told about Abu Ghraib in January (when e-mails informed the Pentagon of the seriousness of the abuses and of the existence of photographs) or in March (when Taguba filed his report), Bush made no known effort to forcefully address the treatment of prisoners before the scandal became public, or to reëvaluate the training of military police and interrogators, or the practices of the task forces that he had authorized. Instead, Bush acquiesced in the prosecution of a few lower-level soldiers.
The President’s failure to act decisively resonated through the military chain of command: aggressive prosecution of crimes against detainees was not conducive to a successful career.
In January of 2006, Taguba received a telephone call from General Richard Cody, the Army’s Vice-Chief of Staff. “This is your Vice,” he told Taguba. “I need you to retire by January of 2007.” No pleasantries were exchanged, although the two generals had known each other for years, and, Taguba said, “He offered no reason.” (A spokesperson for Cody said, “Conversations regarding general officer management are considered private personnel discussions. General Cody has great respect for Major General Taguba as an officer, leader, and American patriot.”)
“They always shoot the messenger,” Taguba told me. “To be accused of being overzealous and disloyal—that cuts deep into me. I was being ostracized for doing what I was asked to do.”
Taguba went on, “There was no doubt in my mind that this stuff”—the explicit images—“was
gravitating upward. It was standard operating procedure to assume that this had to go higher. The President had to be aware of this.” He said that Rumsfeld, his senior aides, and the high-ranking generals and admirals who stood with him as he misrepresented what he knew about Abu Ghraib had failed the nation.
“From the moment a soldier enlists, we inculcate loyalty, duty, honor, integrity, and selfless service,” Taguba said. “And yet when we get to the senior-officer level we forget those values. I know that my peers in the Army will be mad at me for speaking out, but the fact is that we violated the laws of land warfare in Abu Ghraib. We violated the tenets of the Geneva Convention. We violated our own principles and we violated the core of our military values. The stress of combat is not an excuse, and I believe, even today, that those civilian and military leaders responsible should be held accountable.”

5-10-04
New Yorker
Annals of National Security
Torture at Abu Ghraib
American soldiers brutalized Iraqis. How far up does the responsibility go?
by Seymour M. Hersh
http://www.newyorker.com/archive/2004/05/10/040510fa_fact

...A fifty-three-page report, obtained by The New Yorker, written by Major General Antonio M. Taguba and not meant for public release, was completed in late February. Its conclusions about the institutional failures of the Army prison system were devastating. Specifically, Taguba found that between October and December of 2003 there were numerous instances of “sadistic, blatant, and wanton criminal abuses” at Abu Ghraib. This systematic and illegal abuse of detainees, Taguba reported, was perpetrated by soldiers of the 372nd Military Police Company, and also by members of the American intelligence community. (The 372nd was attached to the 320th M.P. Battalion, which reported to Karpinski’s brigade headquarters.) Taguba’s report listed some of the wrongdoing:
Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape; allowing a military police guard to stitch the wound of a detainee who was injured after being slammed against the wall in his cell; sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.
There was stunning evidence to support the allegations, Taguba added—“detailed witness statements and the discovery of extremely graphic photographic evidence.” Photographs and videos taken by the soldiers as the abuses were happening were not included in his report, Taguba said, because of their “extremely sensitive nature.”
The photographs—several of which were broadcast on CBS’s “60 Minutes 2” last week—show leering G.I.s taunting naked Iraqi prisoners who are forced to assume humiliating poses. Six suspects—Staff Sergeant Ivan L. Frederick II, known as Chip, who was the senior enlisted man; Specialist Charles A. Graner; Sergeant Javal Davis; Specialist Megan Ambuhl; Specialist Sabrina Harman; and Private Jeremy Sivits—are now facing prosecution in Iraq, on charges that include conspiracy, dereliction of duty, cruelty toward prisoners, maltreatment, assault, and indecent acts. A seventh suspect, Private Lynndie England, was reassigned to Fort Bragg, North Carolina, after becoming pregnant.
The photographs tell it all. In one, Private England, a cigarette dangling from her mouth, is giving a jaunty thumbs-up sign and pointing at the genitals of a young Iraqi, who is naked except for a sandbag over his head, as he masturbates. Three other hooded and naked Iraqi prisoners are shown, hands reflexively crossed over their genitals. A fifth prisoner has his hands at his sides. In another, England stands arm in arm with Specialist Graner; both are grinning and giving the thumbs-up behind a cluster of perhaps seven naked Iraqis, knees bent, piled clumsily on top of each other in a pyramid. There is another photograph of a cluster of naked prisoners, again piled in a pyramid. Near them stands Graner, smiling, his arms crossed; a woman soldier stands in front of him, bending over, and she, too, is smiling. Then, there is another cluster of hooded bodies, with a female soldier standing in front, taking photographs. Yet another photograph shows a kneeling, naked, unhooded male prisoner, head momentarily turned away from the camera, posed to make it appear that he is performing oral sex on another male prisoner, who is naked and hooded.
Such dehumanization is unacceptable in any culture, but it is especially so in the Arab world. Homosexual acts are against Islamic law and it is humiliating for men to be naked in front of other men, Bernard Haykel, a professor of Middle Eastern studies at New York University, explained. “Being put on top of each other and forced to masturbate, being naked in front of each other—it’s all a form of torture,” Haykel said...

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The Pomboza, now an Agency

Submitted: Aug 26, 2007

They're still at it! The inseparable couple of wannabe Endangered Species Act
extirpators, Rep. Dennis Cardoza, Shrimp Slayer-Merced, and former Rep. RichPAC Pombo, Buffalo Slayer-Tracy (reborn as a lobbyist) have teamed up on a scheme to defeat an evil plot by the federal government to make San Joaquin County homeowners living in flood plains pay flood insurance. The Pomboza has so far obstructed updates of FEMA flood-plain maps but time in running out. It is very hard to tell from the stingy reports on this plan what the deal really is, but it seems to be something like this: municipalities
along the river and developers will put up funding for levee work and hope the feds will generously match the money.

On August 3, the Stockton Record editorialized that, although as chairman of the House Resources Committee, Pombo did exactly nothing for Delta levees after the Jones Island break and after Katrina, as a lobbyist, he is proposing a win-win, public-private partnership called Central Valley Resources Agency to lobby for federal flood funds and, one imagines, gut the FEMA flood plain maps, at least in San Joaquin County. Pombo has already signed lobbying contracts with Stockton and Manteca but was rebuffed recently by his hometown city council in Tracy.

It seems like a strange way to run a government in the face of a potential problem that could endanger the drinking water supplies for 23 million people, but levees, as has been noted, are strange jurisdictional creatures, mostly private, so perhaps it is the only way the Pomboza can proceed. The state has expressed itself as tired of the idea that it must pay for flood damage along the Delta as the result of legislation brought to life by the artful state Capitol management of developer lobbyists.

The area we call Pombozastan is but a province -- including all its local governments -- of a larger win-win, public-private partnership designated in 2005 by the Hun, our governor, as the Partnership for the San Joaquin Valley. Stretching through interlocking watersheds from the San Joaquin Delta to the Kern River, encompassing subdivisions on flood plains in Stockton to the immense prison/megadairy complex of Kings and Kern counties, it ain't no ecotopia. It's got the worst air quality in the nation and it is the Number One target in California for urban growth. It remains the most productive farming valley in the US, probably in the world, but agriculture's days are numbered in the San Joaquin Valley. We are calling it today the dual monarchy of GrupeSpanopolis and the Fresno Catastrophe, an internal empire of developers who control all levels of its government. the Pomboza is merely its northern-most province.

The Record reports today, Congressman Cardoza is calling for a "regional group to tackle levee problems." Cardoza was sworn into his seat in the state Assembly when a levee break had put about half his district under water in early 1997.

Now let brave souls make wild surmises: this Central Valley Resources Agency will find its way into the Partnership for the San Joaquin Valley plan because its co-chairman is Fritz Grupe, Stockton's largest developer. Due to the essentially private nature of this "agency," the public probably won't see much of the Pomboza Plan before it is sprung as part of the Valley partnership. We'd probably have to bribe a little bird to monitor the Hun's famous Cigar Porch to get an accurate report of the doings of the Central Valley Resources Agency.

The remorselessly consistent Pombo, has left the "Natural" out of his agency's title. But's he's happy he's chairman of a new Resource Agency. Now an employee of a powerful Western lobbying group, Portland-based Pac/West, flaks for our beloved Northwest timber interests, in alliance with the cutting edge of modern agribusiness thinking on private property rights, Sacramento-based Pacific Legal Foundation, and funded by developers, the Pomboza agency would appear to be omnipotent. The people who actually live here now would appear to have about the same chance for decent quality of life as a Chinook salmon smolt or a Delta smelt.

Pombo was defeated for reelection to his eighth term by the present Rep. Jerry McNerney, D-Pleasanton. McNerney, the soul of political ambition and yet as timid as a "cautious twerp" of the sort manufactured en masse by the state and national environmental groups that defeated Pombo, is absent from debate on the formation of the Central Valley Resources Agency, although he represents at least as much Valley flood plain as Cardoza does. One imagines the conversation:

"But Dennis, I need some press on water issues in my own district."
To which Cardoza replies with one name: "Andal," McNerney's probable opponent in 2008, a former state Assemblyman, state Franchise Tax Board member and developer in Cardoza's district.

McNerney sneaks off over the Altamont to his stronghold in Bay Area suburbia, far from those tacky Delta water wars. Perhaps he is being advised to do so by House Speaker Nancy Pelosi, D-SF, and Sen. Dianne Feinstein, D-CA (SF). Who knows what their developer husbands are invested in around here? Too bad, because the people need a voice, which they ain't going to get with either end of the win-win, public-private beast we call The Pomboza Agency and its owners and trainers.

We hope to be surprised by sudden lurches of political evolution not yet in evidence. Meanwhile,the public is in a theological pickle: to pray for rain for drinking and irrigation water, or to pray for continued drought so the levees don't break -- that is the question.

Badlands Journal editorial board
------------------------

8-24-07
Dozens hash out levee accreditation...The Record

http://recordnet.com/apps/pbcs.dll/article?AID=/20070824/A_NEWS/70823013
Dozens of local, state and federal officials met Thursday to hash out a levee
accreditation process that could end with thousands of residents forced to pay flood insurance as soon as 2009. San Joaquin County officials say they're being required by the federal government to make levee improvements that have not been defined and that they haven't been given enough direction from FEMA or the U.S. Army Corps of Engineers. Rep. Dennis Cardoza, D-Atwater, asked cities and counties if they'd like to form a regional group to tackle levee problems. Cardoza recently visited New Orleans and called Thursday's meeting to give all the parties a better understanding of the remapping
process.

8-3-07
The voice of Pombo...Editorial

http://recordnet.com/apps/pbcs.dll/article?AID=/20070803/A_OPINION01/708030308/-1/A_OPINION
Finding a common voice among San Joaquin County officials and residents regarding flood protection is common sense. Even if they're a decade or more behind Sacramento County, Stockton officials have done the right thing by pledging $100,000 in startup funding for just such an endeavor. It's very ironic they would hire former Rep. Richard Pombo, the Republican from Tracy, to help. Pombo spent 14 years as a member of the U.S. House of Representatives, where he had an ideal platform from which to encourage and support that kind of unity. He couldn't formally lead it, but he had every opportunity to help persuade county and city leaders to establish a public-private collaboration. Pombo - who had become chairman of the House Resources Committee - had other priorities. Now he works for Pac/West Communications, an Oregon-based business that has been commissioned to set up a mechanism for lobbying state and federal officials for flood-protection funds. Now, uniting the county's leaders is a priority in Pombo's new job. This public-private partnership, to be known as the Central Valley Resources Agency, still is in the formative stages. Pombo will know who the key decision-makers are in Washington, D.C. He probably will prove to be an effective advocate.

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More on subsidized farmers no longer alive

Submitted: Aug 16, 2007

Letters to the Editor
Fresno Bee
July 27, 2007

Dear Sir or Madam,

The U.S. Department of Agriculture gets my inept federal bureaucracy of the month award for writing subsidy checks to 172,801 dead farmers totaling $1.1 billion dollars during the period from 1999 to 2005. This gives new meaning to the term "buying the farm."
All the sordid details are available in a report from the Government Accountability Office located at http://www.gao.gov/new.items/d071137t.pdf.
Nineteen percent of the deceased subsidy recipients had been dead for seven years or more, while a whopping 40 percent had been dead for three years or more. Even more troubling, someone undoubtedly alive signed and cashed those checks given the considerable difficulty the dead have in signing checks.
There must be plenty of dead San Joaquin Valley farmers on the list given that we are the farming capitol of the nation. They must be chuckling somewhere in the Great Pasture in the Sky that they couldn't make any money while living but managed to generate some green after they were gone.

Lloyd Carter

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Work in progress

Submitted: Aug 12, 2007

I was recently asked to produce a bibliography of "essential books" on the San Joaquin Valley.

Argh!

A dozen favorites leapt to mind; a few days later a dozen more; and the pleasant task began to turn into a real project destined for certain failure and remorse. It turns out not to be so easy to remember the books of a lifetime and each dive into the Internet provides more that look very useful but I haven't had time to read yet.

When one gets to a certain age it becomes difficult to remember the heroes because they are all gone and it is harder to recall that I met some of them a time or two, here and there -- for example, Fred Ross, a slim, serious man, perpetually moving purposefully around the Delano headquarters of the UFWOC; the wise, friendly Larry Itliong; or Wilma Elizabeth McDaniel on the phone correcting the spelling of her name in an article I'd written; or the voice of Art Coelho, poet and publisher of our Valley voices, from Montana, talking about burning up cowboy boots on big cats disking the west side and years wandering the West as an itinerant poet composing the best list of country poets in the West.

I remembered a call about a great farm labor leader in farmworkers rest home in Delano leading a seminar on Lenin to fellow octogenarians from the fields. We dreamed of that moment when those workers would confront St. Peter and demand to know: "What is to be done?"

I remember the face of the great, betrayed C. Al Green, director of the multi-racial AFL-CIO Agricultural Workers Organizing Committee, a victim, like Chavez, of liberal perfidity that has resulted in indebted servitude in the fields today. All the political thieves of San Francisco have ever wanted from the Valley was agribusiness campaign cash, any way they could get it. "Migrants don't vote," they said. These days, it's "Illegal immigrants don't vote."

The longer I worked on it, the more holes I saw in the vista of written material on the San Joaquin Valley that stretched out before me like a vast battlefield of a war that has been going on since before the great Yojuts leader Estanislao defeated the young Lt. Mariano Vallejo. Looking at water rights issues today, sometimes it seems as if the ghosts of heroes and villains rising off the battlefield are pulling the strings of the living in a never-ending feud we call our "Valley way of life." Another way to look at it is that bioregions matter.

Every reader will find something missing in this bibliography. For example, I am frantically digging in book boxes for a good one on the Chinese in California I know I have somewhere but cannot remember the title of. Can't find it, have nothing on their enormous contribution except in various general histories like Bean's superb California: An Interpretive History.

Everyone I have talked to has added a book I've forgotten or never knew about.

So, this is a work in progress and I invite anyone to write us at billhatch@hotmail.com, gleefully to announce what a knucklehead I was to forget their favorite, indispensible books about the Valley.

Meanwhile, apologies to the people who originally requested the bibliography -- we'll let you know when it's done.

Bill Hatch, for the Badlands Journal editorial board

Non-fiction:

Garden of the Sun, Wallace Smith (the only history to date strictly about the SJV)
Handbook of the Yokuts Indians, Frank Latta
The Stanislaus Indian Wars, Thorne P. Gray
The Destruction of the California Indians, Robert F. Heizer
Saints or Oppressors: The Franciscan Missionaries of California; In The Missions of California: A Legacy of Genocide, Rupert and Jeannette Costa
Flooding the Courtrooms: Law and Water in the Far West, by Mary Catherine Miller (a legal biography of the Miller&Lux cattle company)
Empires in the Sun, Peter Wiley, Robert Gottlieb (development of power utilities in the West)
Silent Spring, Rachel Carson (DDT)
Cadillac Desert, Marc Reisner
Death in the Marsh, Tom Harris (the Kesterson Wildlife Refuge ecological disaster caused by agricultural drainage containing heavy metals)
Fruits of Natural Advantage, Steven Stoll (the self-destructive economics of agribusiness)
The New California, Dan Walters
Works of Paul Taylor and Dorothea Lange: Taylor was one of the first academics (UC Berkeley economist) to study farm labor, both Mexican and Dust Bowl immigrants; Lange's photographs of migrants stand alongside Walker Evans' work with James Agee as testimony to the destruction and poverty of the Depression
Factories in the Fields, Carey McWilliams
Farm workers and agri-business in California, 1947-1960, Ernesto Galarza
Cesar Chavez: Autobiography of La Causa, Jacques E. Levy
United Farm Workers website, history section http://www.ufw.org/_page.php?menu=research&inc=research_history.html
Philip Vera Cruz: A Personal History of Filipino Immigrants and the Farmworkers Movement, Craig Scharlin
Articles on 160-acre limitation by E. Phillip Leveen (have to do Google search for them, Leveen was the top spokesman for the 160-acre limitation for federal water during the last great war over it in the late 70s; an agricultural economist at the time, he was trained as an historian and gives the history of the whole federal water/land fraud in the Valley)
Articles by Don Villarejo, founder of the California Institute for Rural Studies, list available at http://donvillarejo.com/ (nearly 50 years of thought and research on the Valley balancing social, economic and environmental justice claims)
California Institute of Rural Studies publication catalogue http://www.cirsinc.org/pub/pubcat.htm
Isao Fujimoto, UC Davis emeritus, has published a number of studies on different aspects of the Central Valley -- from farm labor to environmental issues
The King Of California: JG Boswell and the Making of a Secret American Empire, by Mark Arax,Rick Wartzman
Epitaph for a Peach: Four Seasons on My Family Farm, by David Mas Masumoto
BORDER CORRESPONDENT, Selected Writings, 1955-1970, Ruben Salazar
Mean Justice, by Ed Hume
California: An Interpretive History, Walton Bean
Coalition of Immokalee Workers (CIW), www.ciw-online.org/ (the Florida front line of current farm-labor organizing)

Legal and administrative decisions and discussion: The San Joaquin Valley has produced major legal contests on an array of natural resource issues; these sources will lead the reader into essential topics in Valley history; others are dealt with in the non-fiction section

Public Trust Doctrine
Migratory Bird Treaty Act
Mono Lake Decision
San Joaquin Raptor Wildlife Rescue Center
Monterery Accord decision: PCL v. DWR
Kesterson Wildlife Refuge
San Joaquin River Settlement
Rapanos Decision
CEQA decisions (law firm blogs like Abbott and Kinderman Land Use Law blog offer reviews of recent decisions: San Joaquin Raptor v. County of Merced, Woodward Park Homeowners Association, Inc. v. City of Fresno, Vineyard Area Citizens for Responsible Growth Inc. v City of Rancho Cordova, Hayward Area Planning Association v. City of Hayward, City of Marina v. Board of Trustees of California State University, etc.
Badlandsjournal.com provides current news on lawsuits, administrative decisions, essays and articles on resource law

Fiction, Poetry, Drama

Poetry of Wilma Elizabeth McDaniel (the greatest Dust Bowl poet, still writing about her people until shortly before she died this April)
Grapes of Wrath, In Dubious Battle, by John Steinbeck
The Octopus, Frank Norris
The Ford, Mary Austin
Art Coehlo (Cuelho) and Seven Buffaloes Press
Gerald Haslam's works, short stories and Workin' Man's Blues (memoirs of youth in Oildale and the development of "Nashville West," Bakersfield.
Plays of Luis Valdez ("Zoot Suit," "La Bamba"). http://store.elteatrocampesino.com/books.html
Luis is the farmworkers' Bertold Brecht.
Highway 99: A Literary Journey through California's Great Central Valley, edited by Stan Yogi, Gayle Mak, and Patricia Wakida
Fat City, Leonard Gardner
--------

Additions since posting:

New Roots for Agriculture, Wes Jackson
Topsoil and Civilization, Vernon Gill Carter and Tom Dale
The Origin of the Species, Charles Darwin

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Pombusho

Submitted: Aug 01, 2007
The National Park Service's top scientist says politics drove the decision...Deputy Assistant Secretary of the Interior Todd Willens was the leader of the U.S. delegation who made the motion to take the Everglades off the list. Until last fall, Willens was a top aide to former Rep. Richard Pombo, R-Calif., a frequent critic of environmental laws and environmental groups. -- St. Petersburg Times, Craig Pittman, July 31, 2007

The president's brother, Jeb, as readers may recall from the Florida 2000 election, is governor of Florida, site of the Everglades and of developers as voracious as those in the former region of Pombozastan, now suffering the highest per capita rate of mortgage foreclosure in the nation. Even as top political appointees to the Department of Interior were toppling in investigations, the Bush administration appointed the defeated Pombo's top aide to a top role in Interior.

This sort of fin de regime move smacks of Al Gore's sale of the Elk Hills Naval Oil Reserve (south San Joaquin Valley) to Occidental Petroleum in the days of stained blue dresses, impeachment and bombs over Kosovo.

Another late Bush-regime move to be alert for would be the sale of the San Luis Reservoir to Westlands Water Districts. Investigations by representatives Nick Rahall (chairman of the Natural Resources Committee) and George Miller into the activities of Jason Peltier, a high Department of Interior official until he announced he was leaving government to become a high official with Westlands, may turn up the trail leading to this outrageous gift to agribusiness and its imperial water agency.

We are grateful to the Frog for catching the relationship between the UN decision on the Everglades and former Pombo staffer, Willens.

Badlands editorial staff
-------------------------------

7-31-07
St. Petersburg Times
Imperiled Glades cut from watch list
A U.N. committee downgrades the park, despite concerns ...CRAIG PITTMAN
Published July 31, 2007
www.sptimes.com/2007/07/31/Worldandnation/Imperiled_Glades_cut_.shtml

Last month, the U.N. World Heritage Committee made headlines when it took Everglades National Park off its list of endangered sites.
The committee, charged with protecting irreplaceable landmarks of outstanding universal significance, hailed the progress the United States had made toward Everglades restoration. This, even though a report released a week later showed that the billion-dollar restoration project already had fallen years behind schedule.
The committee's decision went against the National Park Service's own recommendation and the U.N. committee's science advisers.
"We said it should stay on the danger list because further work needed to be done," said David Sheppard, who heads the Programme on Protected Areas for the Switzerland-based Union for the Conservation of Nature and Natural Resources, which goes by the initials IUCN.
However, Sheppard said, "the head of the U.S. delegation made the comment that it should come off (the list) because of the progress they had made," and the committee went along with that.
The National Park Service's top scientist says politics drove the decision.
"There's always been a kind of pressure from the Washington level to say, 'Okay, we've got a plan, now take us off the list,' " said Robert Johnson, director of the South Florida Natural Resources Center at Everglades National Park since 1995. "I think for the Bush administration, it was seen as a black eye to be on that list."
Being taken off the list "gives people the impression that things are going well," when the restoration is actually decades away from achieving its goals, he said.
For the past four years it has been the only American site listed as being in danger. Being on the list "focuses more international attention on what we do," Johnson said.
Deputy Assistant Secretary of the Interior Todd Willens was the leader of the U.S. delegation who made the motion to take the Everglades off the list. Until last fall, Willens was a top aide to former Rep. Richard Pombo, R-Calif., a frequent critic of environmental laws and environmental groups.
Willens said that making the change was not the result of some political agenda. In fact, it wasn't even his idea, he said. Instead, he said, before the meeting, representatives from some of the 21 other countries on the committee told him they wanted the Everglades off the list because of the 7-year-old restoration project.
So even though the National Park Service's own report recommended keeping the Everglades on the danger list, "I changed the last sentence of our report and said we wanted to be taken off," Willens said.
He said he made the motion before any other country could jump in, because "the U.S. should be fully in charge of its own sites."
The committee is the governing body of the 176-nation World Heritage Convention, set up under a treaty initiated by President Richard Nixon. In 1973, the United States became the first nation to ratify it.
The committee takes inventory of all major world landmarks. It compiled a list of 380 World Heritage sites, including Stonehenge and China's Great Wall. In 1996, when a Polish company proposed building a shopping center near Auschwitz, its World Heritage Site status helped spur international opposition.
Twenty U.S. sites are on the overall list, including the Grand Canyon and Yellowstone National Park. Everglades National Park has been listed as a World Heritage site since 1979.
When the committee puts a site on its danger list, the goal is to call attention to the threats facing the site. For instance, the Galapagos Islands are being invaded by exotic species, and Jerusalem's Old City is imperiled by Mideast unrest.
The committee put Everglades National Park on the danger list in 1993 when it was beset with threats from encroaching development, water pollution and damage from Hurricane Andrew.
In 2000, Congress and the state Legislature approved a complex plan to restore the River of Grass. Some of its crucial elements are six years behind schedule and the cost has ballooned to nearly $20-billion, according to a Government Accountability Office report made public this month.
Last year, on behalf of the U.N. committee, Sheppard of the IUCN visited Everglades National Park to check on progress.
"I thought the site, although there had been significant progress, still faced significant threats," he said. That's why the IUCN recommended the committee keep the Everglades on the danger list for at least two more years.
Meanwhile, Johnson said, the park staff "put a lot of work into" creating a list of benchmarks that could be used to gauge their progress on dealing with the threats, such as curtailing the phosphorous pollution flowing into the park.
But the committee's own staff noted this month that there are still concerns about water pollution in the park and urban development creeping closer to the park boundaries.
"Various sources have emphasized that restoration is progressing very slowly," the committee's staff wrote in a recommendation to keep the Everglades on the list.
But when the committee heard Willens' motion, it went along with it. There was no formal vote, Willens and Sheppard said, and no dissent. Willens said that's because other sites on the list are in far worse shape than the Everglades, such as one in Iraq.
"Some of the other sites are in war zones," he said. "This way the Everglades doesn't take a lot of attention away from them."
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8-1-07
Sacramento Bee
Talks continue grinding forward to reach water deal
The proposed transfer to Westlands still faces major obstacles ...Michael Doyle, Bee Washington Bureau and Dennis Pollock, Fresno Bee
http://www.sacbee.com/111/story/302589.html

WASHINGTON -- Negotiators are pressing forward today on what some are calling the biggest water transfer in the nation's history, hoping to end a Central Valley irrigation dispute that's defied solution for several decades.
The sprawling Westlands Water District would gain control of the water stored in San Luis Reservoir, under the revised proposal expected on Capitol Hill. Westlands could be free of the federal acreage limits meant to preserve small family farms, and would stop repaying the government for building the reservoir and associated canals.
In return, the Rhode Island-sized water district and several others would assume responsibility for cleaning up a multibillion-dollar irrigation drainage mess. So far, the districts haven't specified exactly how they might solve the drainage problem...
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8-1-07
Farmers ready to take big drink; CALIFORNIA: May get huge water grant while cities conserve -- Garance Burke (AP)

FRESNO, Calif. -- The U.S. government appears poised to turn over the rights to billions of gallons of water to a politically connected group of farmers in California, where most people are being asked to conserve.
Landowners in the Westlands Water District would gain the rights to 1 million acre feet of water under a proposed settlement federal regulators are likely to present today. An acre foot translates to the amount needed to cover one acre with a foot of water.
That's 15 percent of the federally controlled water in California -- the largest grant to irrigators since 1903. ..

10-27-2000
The Center for Public Integrity
Did Taxpayers Lose on Deal For Oil Field?
Elk Hills Timeline -- Josey Ballenger, Nathaniel Heller and Knut Royce
http://www.publicintegrity.net/report.aspx?aid=457

WASHINGTON, October 27, 2000 — 1912: Out of concern for the long-term availability of oil supplies for naval ships, President Taft establishes Naval Petroleum Reserve No. 1 near Bakersfield, Calif. Over the next few years, his administration adds two more oil and three oil shale reserves in the West to the program. They remain essentially undeveloped until 1976.

1922: NPR-1, informally known as Elk Hills, is part of the "Teapot Dome Scandal" in which oil barons bribed Secretary of the Interior Albert Fall for secret oil drilling leases during the Harding administration.

1976: During President Carter's term, the Arab oil embargo of 1973-1974 leads Congress to pass the Naval Petroleum Reserves Production Act to open NPR-1 and 3 for production on July 3. The law required that the reserves be operated at maximum efficient rates. From 1976 to its transfer to Occidental in February 1998, Elk Hills alone generated $17.1 billion in revenue for the U.S. Treasury, against expenses of $3.3 billion.

1985-1994: In every year but one, the White House's Office of Management and Budget proposes the sale or lease of Elk Hills under the Reagan, Bush and Clinton administrations, but each time, the Democrat-controlled Congress shoots the proposal down.

July 1993: The Senate Armed Services Committee requests that the Department of Energy utilize the National Academy of Public Administration to study management alternatives for the Naval Petroleum and Oil Shale Reserves, including the concept of corporatization, or turning the property over to a government corporation.

May 1994: The NAPA report recommends turning Elk Hills and the other Reserve properties into a wholly owned, for-profit government corporation.

Nov. 23, 1994: A memo appears on the desk of Energy Secretary Hazel O'Leary asking her concurrence to have Elk Hills, by far the most lucrative Naval Reserve, run by a public corporation. All assistant secretaries have signed off on the proposal.

Dec. 2, 1994: Assistant Secretary for Fossil Energy Patricia Godley meets with Deputy Secretary Bill White, Deputy Assistant Secretary for the Reserves Captain Ernest Hunter and OMB Associate Director T.J. Glauthier to discuss corporatization. DOE memos indicate that "OMB continues to favor immediate privatization of the Reserves as the preferred option."

Dec. 19, 1994: At a news conference with President Clinton and Vice President Gore on the "Middle Class Bill of Rights" and "Reinventing Government," Deputy Energy Secretary White announces the administration's intent to sell Elk Hills.

Sept. 7, 1995: On the second anniversary of "Reinventing Government," Vice President Al Gore presents a report by the National Performance Review, an interagency task force that made recommendations for more than 180 specific cuts in government. President Clinton says these cuts will save more than $70 billion in the next five years. One of the recommendations is to sell Elk Hills.

Feb. 10, 1996: The Defense Authorization Act of 1996, which spells out the procedure for selling Elk Hills within two years, is signed into law.

Oct. 1, 1997: The deadline for all bids on Elk Hills to be submitted, at noon in Houston.

Oct. 6, 1997: DOE announces Occidental Petroleum Corp. is the high bidder on Elk Hills, at $3.65 billion. DOE does not divulge, to this day, the other bidders' names or offer amounts.

Feb. 10, 1998: Occidental takes over control of Elk Hills from the U.S. government.
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July 2000
The Nation
Al Gore's Teapot Dome....by COCKBURN, ALEXANDER
www.questia.com/library/encyclopedia/101273888

Al Gore succeeded where the Administration of Warren Harding failed. He privatized Elk Hills, the huge oilfield outside Bakersfield, California, set aside long ago as a strategic reserve for the Navy. Back in the Harding days, Interior Secretary Albert Fall went to jail for taking a $100,000 bribe to approve lease of the field to Edward Doheny. For seventy years, lingering recollections of Teapot Dome remained strong enough to stymie attempted raids on the military's largest strategic fuel reserve. Nixon tried to sell it, and so did Reagan; each time Congress beat them back...
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8-29-00
Al Gore: The Other Oil Candidate ...Bill Mesler, Special to CorpWatch
www.corpwatch.org/article.php?id=468

For thousands of years, the Kitanemuk Indians made their home in the Elk Hills of central California. Come February 2001, the last of the 100 burial grounds, holy places and other archaeological sites of the Kitanemuks will be obliterated by the oil drilling of Occidental Petroleum Company. Oxy's plans will "destroy forever the evidence that we once existed on this land," according to Dee Dominguez, a Kitanemuk whose great grandfather was a signatory to the 1851 treaty that surrendered the Elk Hills.
Occidental's planned drilling of the Elk Hills doesn't only threaten the memory of the Kitanemuk. Environmentalists say a rare species of fox, lizard and the kangaroo rat would also be threatened by Oxy's plans. A lawsuit has been filed under the Endangered Species Act. But none of that has given pause to Occidental or the politician who helped engineer the sale of the drilling rights to the federally-owned Elk Hills. That politician is Al Gore.
Gore recommended that the Elk Hills be sold as part of his 1995 "Reinventing Government" National Performance Review program. Gore-confidant (and former campaign manager) Tony Cohelo served on the board of directors of the private company hired to assess the sale's environmental consequences. The sale was a windfall for Oxy. Within weeks of the announced purchase Occidental stock rose ten percent.
That was good news for Gore. Despite controversy over Dick Cheney's plans to keep stock options if elected, most Americans don't know that we already have a vice president with oil company stocks. Before the Elk Hills sale, Al Gore controlled between $250,000-$500,000 of Occidental stock (he is executor of a trust that he says goes only to his mother, but will revert to him upon her death). After the sale, Gore began disclosing between $500,000 and $1 million of his significantly more valuable stock.
Nowhere is Al Gore's environmental hypocrisy more glaring than when it comes to his relationship with Occidental. While on the one hand talking tough about his "big oil" opponents and waxing poetic about indigenous peoples in his 1992 book "Earth in the Balance," the Elk Hills sale and other deals show that money has always been more important to Al Gore than ideals...

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Ol' Marse Mixed Metaphor, D-Merced

Submitted: Jul 27, 2007
"We're going to keep an eye on them," said Rep. Dennis Cardoza, D-Merced. "The administration was in a total meltdown over this, and they were putting on a full-court press to be given a second chance."

Returning agricultural border inspectors from Department of Homeland Security to Department of Agriculture jurisdiction seemed like one of the better reforms in this year's Farm Bill, at least for the purposes of crop protection, the supposed mission of agricultural inspectors.

Cardoza, minister of propaganda for the Blue Dog Democrats, has shown in the above quote that he has mastered the nuances of Dixiecrat muddled metaphor.

Beneficiaries from exotic infestations of crop-destroying pests include chemical companies, public research higher education institutions like the University of California and finance, insurance and real estate special interests interested in cheap farm land sold by pest-distressed, bee-disadvantaged farmers.

The wannabe king toys with the majority party. The Democrats don't have the courage to govern in this grave Constitutional crisis. Before they impeach, none of their acts make sense. Every day, Nancy and her corrupt little Boys and Girls fall farther behind the American people. Instead of leading them, they hide from them, weighed down by the money. The less they lead, the richer they get.

Bill Hatch
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7-27-07
Merced Sun-Star
Border inspectors stay with homeland ...MICHAEL DOYLE
http://www.mercedsunstar.com/local/story/13830873p-14405774c.html

WASHINGTON — Agricultural border inspectors will remain Department of Homeland Security employees after all, following an intense White House lobbying effort to rewrite a $286 billion farm bill.

Maneuvering behind the scenes, the Bush administration on Thursday buried House plans to transfer the plant and animal inspectors back to the Agriculture Department. The bureaucratic victory frustrates California growers and others who fear agricultural inspections are getting shortchanged.

"It's extremely disappointing," said Joel Nelsen, president of the Exeter-based California Citrus Mutual. "This program has continued to be a stepchild in the whole homeland security system."

Bush won the border battle without even needing a vote, as the House began debating the farm bill. Instead, House Democrats removed from the 744-page bill language shifting inspectors back to the Agriculture Department. Lawmakers agreed they would continue monitoring the inspectors' work, possibly reviving the issue later...

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Show time

Submitted: Jul 26, 2007

At the financial market level, it is of course assumed that all local land-use authorities would automatically have to approve subdivisions funded by subprime loans, now in default, because, naturally, no local land-use officials could possibly behave with any kind of economic caution or care. In fact, elected officials in this area -- from Rep. Dennis Cardoza, Shrimp Slayer-Merced, down to three county boards of supervisors and many city councils, promoted an orgy of greed that has ended in the northern San Joaquin Valley counties leading the nation in per capita mortgage foreclosures.

These days, not only have they been proven corrupt, the arrogance of these elected officials has increased and they are even more willing to try to intimidate the public by calling them "socialists" and whatnot.

But, looking at it from their point of view, what else can they do but try to slander their critics? What they did is out in front of God and Everyone. The obvious political play is to bring up the Socialist Menace. Let's forget about subsidized federal water for subsidized cotton and all the rest of Supervisor Jerry O'Banion's friends and interests. O'Banion would never be dumb enough to call anyone a socialist, given the political situation on the west side. But, would he above goading Supervisor Mike Nelson to do it?

The socialists in Merced County are rich, subsidized farmers, public employees (teachers, city and county employees, etc.) and UC Merced. We have bureaucratic oppression on the east side and the same-old feudalism on the west side.

But, don't tell the focos grupitos participating in the county general plan update process that! Perish those critical thoughts! We will reach a grand consensus (led by the adroit triple-speak of county planning staff). Don't count on Agriculture. Those people are in acute political schizophrenia: landowner v. farmer. To preserve or to sell, that is the question. It's Hamlet time.

If we are not to be guided lovingly over the cliff to San Fernando Valley by our triple-speaking public employees, it would be wise to talk among ourselves, not coagulating into some phony group, but in caucus among those we trust and who share common interests. The way the flak is drifting at the moment, people cannot find their allies because they are buying into political agendas against their self-interests, in the name of vast, utterly illusory, consensuses defined by our common grave diggers.

But, Hey, it's the California Way. Right?

Wrong.

Groups must develop now that can identify their own self interests and can seek and find coalitions with other groups with allied self interests against a bureaucracy in the east, which cares for nothing but more jurisdictional revenue, and the feudalism in the west, living off subsidies and cheap labor.

Bill Hatch
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San Francisco Chronicle

Wall Street Plunges, Dow Falls 400 ... JOE BEL BRUNO, AP Business Writer
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/07/26/financial/f112916D39.DTL&hw=environment&sn=002&sc=891

Wall Street suffered its second-biggest plunge of the year Thursday, leading global markets lower as investors fled stocks amid increasing uneasiness about the mortgage and corporate lending markets. The Dow Jones industrials fell more than 400 points, while Treasury yields plunged as investors moved money into bonds.
Investors who had been able to shrug off discomfort about subprime mortgage problems and a more difficult environment for corporate borrowing appeared to finally succumb to those concerns. The Dow's drop is the biggest since it plummeted 416 points on Feb. 27 after a nearly 10 percent decline in Chinese stock markets.
Feeding the selling were concerns that higher corporate borrowing costs will curb the rapid pace of takeovers that have driven major indexes this year. Investors also feared the sluggish environment for home sales and continued defaults in subprime loans would spur debt defaults and weigh on corporate earnings.
"Worries that have been out there for the past couple of years are coming to a head right now," said investment strategist Edward Yardeni, president of Yardeni Research Inc. "It's show time" ...

Huge Farm Bill Offers More of Same for Agribusiness ...Carolyn Lochhead
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/07/26/MNG9AR6V6S1.DTL

WASHINGTON - A prominent San Francisco patron of the arts, Constance Bowles — heiress of an early California cattle baron, widow of a former director of UC Berkeley’s Bancroft library and a resident of Pacific Heights — was the largest recipient of federal cotton subsidies in the state of California between 2003 and 2005, collecting more than $1.2 million, according to the latest available data.
That is the way U.S. farm programs are designed to work. Five crops — cotton, corn, wheat, rice and soybeans — received 92 percent of the $21 billion in federal farm payments last year. The biggest payments go to the biggest farms.
That also is pretty much the way farm programs will continue to work for the next five years under mammoth legislation scheduled today for a House vote.
House Speaker Nancy Pelosi of San Francisco has endorsed the new farm bill, produced by the House Agriculture Committee to run programs for the next five years, as a major reform because it limits annual payments to farmers who earn $1 million a year.
The income limit for a couple would actually be $2 million, because a husband and wife each could collect.
If the bill becomes law, the U.S. Department of Agriculture says the cap will affect just 3,100 farmers, assuming they do not use accounting tactics to reduce their taxable income. Actual payments to farmers would rise over the five years authorized by the bill. The bill is over budget, so Democratic leaders propose a $4 billion tax increase on U.S. subsidiaries of foreign companies to pay for it...Pelosi is pushing for a quick House vote this week on the Agriculture Committee’s bill to give rural Democrats — especially those who won seats in GOP-dominated districts last year — something to tout when they return home for the August congressional recess...But most California farmers — and most U.S. farmers — do not grow the five subsidized crops and do not receive direct payments from the federal government. California fruit, nut and vegetable growers, who would get research and marketing aid under the new bill, mostly oppose crop subsidies and did not seek them.
Economists say the subsidies harm most farmers. That’s because they lower crop prices, raise land prices and rents, and give subsidized farmers a financial advantage that has helped drive their neighbors out of business and keep young farmers from getting started.
Many farmers, and farm state politicians of both parties, oppose large payments. Rep. Ron Kind, D-Wis., Sen. Byron Dorgan, D-N.D., and Sen. Chuck Grassley, R-Iowa, all want to limit payments to one-quarter the size Pelosi has endorsed in the House bill.
“When you say to the biggest farms in the country, ‘The bigger you get, the more money you get from the government,’ then the farm program effectively subsidizes the destruction of family farming,” said Chuck Hassebrook, executive director of the Center for Rural Affairs in Nebraska. “Most people in rural America think that is bad policy.”
The big payments would continue while prices of subsidized crops are at or near record highs, fueled by the ethanol boom. The value of this year’s giant corn crop — which would almost cover the state of California in acreage — is expected to reach $40 billion.
California’s top subsidy recipient from 2003 to 2005, Bowles, 88, of San Francisco, collected the $1.2 million in mostly cotton payments through her family’s 6,000-acre farm, the Bowles Farming Co., in Los Banos (Merced County). She could not be reached for comment.
Another family member, George “Corky” Bowles, who died in 2005, collected $1.19 million over the same period. George Bowles once ran the farm but lived on Telegraph Hill. A collector of rare books and 18th century English porcelain, he served as a director of the San Francisco Opera and a trustee of the Fine Arts Museums.
The farm is run by Phillip Bowles in San Francisco. Phillip Bowles was on vacation Tuesday and could not be reached. He told KGO television last week that he’s no fan of subsidies, but if big cotton growers in Texas get them, so should he.
“Many of these businesses are getting 20 to 30 to sometimes 40 percent of their gross revenues directly from the government,” Phillip Bowles told KGO. “I don’t have a good explanation for that. Somebody else might, but it beats me.”
Economists say they can find no rationale for the subsidies, which started in 1933 as temporary aid for small farmers devastated by the Dust Bowl and the Great Depression. Then, a quarter of Americans lived on farms. Today, less than 1 percent do — so few that the Census Bureau quit counting.
“The programs are just outdated,” said Daniel Sumner, director of the UC Agricultural Issues Center and a leading farm economist. “No one can think of a legitimate reason why we have these farm programs for a handful of crops in the United States.
“If the best the committee could do is say these payments are to help people in need, and we’re going to define for farm legislation that somebody’s in need if the family makes $2 million a year — a million for the husband and a million for the wife — that’s a little strange. If these are really welfare programs for the needy, we don’t normally cut those off at $1 million. It’s more like $20,000.”
Cotton ranks as the No. 1 subsidized crop in California. Federal data compiled by Environmental Working Group, an advocacy organization, shows that the state’s cotton, rice and dairy farmers received more than $1 billion in federal support from 2003 to 2005. During the same period, about $62 million went to farm conservation and environmental projects in California...Farm environmental programs now total $4 billion a year, far outstripping any other federal funding for private conservation. Environmentalists would like to see the crop subsidies also go to “green payments” to induce environmental protection for wildlife habitat, watersheds and the like.

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