Dear Governor Herbert,

I read your State of the Union address and thought it was well done. Utah is truly a great place to live and do business, and also for golf, a sport we both enjoy. With the USGA Public Links Championship at Soldier Hollow this year perhaps we can find some time to golf together as part of the occasion.

Your speech was almost entirely positive and I was in agreement almost one hundred percent — except in one glaring way—your expressed antagonism to the federal government. I suppose that was red meat for the GOP, a part of a ritual of being elected in Utah.  It’s the safe, almost required thing to do. It assures an applause line.

However, it is my contention that it is unhealthy for us to continually demean our national government and promote disrespect for it and not give credit where credit is due.

You say government doesn’t create jobs, and that all the credit for a good economy in Utah rests snugly in the trophy case of free enterprise, but that is so obviously and patently untrue that it surprises me that Republican politicians continue to repeat that nonsense without fear of contradiction. I would think that just for the sake of a clear conscience that an occasional Republican would have the personal integrity to refrain from making that absurd statement. Is it part of some secret anti-government Republican oath that requires repeating?

As CEO of the Great State of Utah how many jobs are you supervising? Are these not jobs? Do these people not pay taxes? Are they not providing goods and services? Is there any other CEO in the state supervising more jobs than you? The jobs in Utah’s Higher Education System are some of the most important and esteemed jobs in the state, and surely those government jobs lead to the creation of thousands of free enterprise jobs. Our public school teachers all across this state are preparing our children for college and future employment, not to mention thousands of other state and local employees keeping our important government agencies operating smoothly, services that are absolutely necessary in order for free enterprise to thrive and grow. How are all these government jobs not contributing to a vibrant economy? How would free enterprise survive without them?

How many free enterprise jobs did government create this year with the expansion of I-15 in Utah County? How much did that government project contribute to our economic prosperity?

I drive by Camp Williams quite often and I have been amazed at the number of employee cars parked at the site. One would think there was a BYU or Utah football game being played there. Outside of the LDS City Creek Project the federal government’s National Security Agency project at Camp Williams is probably the originating source of more private enterprise jobs than any other single source this past year. The future high paid government employment figures at NSA will remain high for years to come and will surely enable future governors to take credit for job creation while demeaning the feds for being in the way.

I wonder how our new job report would look without all the jobs made possible this past year by the feds—jobs that were 100% opposed by our Utah congressional delegation. Yes, even our token Democrat has to vote like a Republican to stay in office.

Perhaps a tip of the hat to the feds for all those jobs would have been appropriate instead of a snarly stay out of the way attitude.

Then there was the help the feds sent us so that we could keep our balance sheet in A1 shape and still provide funds for teachers and other state employees who otherwise would have been given pink slips. Perhaps a tip of the hat to the feds would have been appropriate.

Then there was your zeal for clean air, and I personally appreciate your expressed commitment to that goal, but again a tip of the hat to the feds would have been nice. Without them we would be in a dark cloud every day, and our stiff-necked opposition to their regulations ought to be an embarrassment, and our brazen corporate polluters remain criticism free in your remarks.

What single issue unifies Utahns more than any other? When jobs at Hill Air Force Base are at risk! Suddenly everyone comes together! And why?  Because government jobs are our bread and butter. The feds are damned if they cut the budget and damned if they don’t.

And, yes, your congratulatory remarks about our armed forces were appropriate, and that was another place where you could have given a tip of the hat to the feds, and you could have even gone the extra mile and thanked the feds for taking out Osama bin Laden for helping to clear the way for our young men to come home.

Oh, yes, it would be nice if we could truly put aside politics and be forever honest with one another and appreciative of one another, for we are all in this together. Remember, we are part of the United States of America, that great country that some refer to disrespectfully when it suits their purpose, as ‘The Feds,’ as if the feds are not part of the United States of America.

And yes, I am grateful that we have not yet declared our intent to secede.

Best wishes for continued success. I admire your lifetime of unselfish public service and think you are doing a good job, and I realize, sadly, that the party base must have some red meat from time to time and there are certain rituals to which a politician must pay homage. I don’t hold that against you.

Respectfully,

Joe Watts

A Strong Economy Fosters Healthy Communities and Prosperous Families

Lt. Governor and Mrs. Bell; President Waddoups; Speaker Lockhart; members of the Utah Legislature; members of my Cabinet; Justices of the Utah Supreme Court; Utah’s First Lady, my beautiful wife, Jeanette; and my fellow Utahns:

It is an honor and a privilege to address you this evening. As we assemble in this beautiful and historic chamber, let us take time to acknowledge those who protect our freedoms and keep our homeland safe. This past August, I traveled to Iraq and Afghanistan to meet with some of our deployed Utah servicemen and women. It was a humbling experience. Our liberty – the free exercise of our God-given rights – is preserved by the men and women of our Armed Forces who willingly put themselves in harm’s way for God, family and country. This past year, in the span of just over a month, we lost six Utah soldiers, sailors and marines in Afghanistan. These brave servicemen made the ultimate sacrifice in defense of this nation and the ideals which make it great. We also acknowledge the loss of Agent Jared Francom, tragically killed in the Ogden shooting incident just a few short weeks ago.

Tonight, we have as honored guests in the gallery, family members of those we have lost at home and abroad. As they stand, please join with me to acknowledge them, and thank them for their loved one’s service and sacrifice.

As Governor of the great State of Utah, I am pleased to report that the state of our State is strong – and growing stronger. I want you to know I am very optimistic about Utah’s future. While our national economy continues to struggle, the economy in Utah surges ahead. Our unemployment rate continues to steadily fall. We currently have the second-fastest rate of job creation in the nation. Every sector in our economy is growing again, except one. And I’m proud to say the sector that is not growing is state government.

Utah’s success is not only consistently recognized, it is increasingly praised by those outside our borders. Now, some people have said I talk about our rankings a little too much – and it may be a fair observation. But I hope you are as proud of Utah as I am. We have a great state, we have a great message and we are making great progress. I believe Utah’s Governor should be the State’s chief advocate and champion, and I am simply not going to stop touting Utah’s accomplishments.

I should point out that our accolades have less to do with “me” and everything to do with “we.” Indeed, they reflect the efforts of individuals here in this room and many others across the state. Some of our recent recognitions include being named the state with the best economic outlook and the most dynamic economy. And, for the second consecutive year, Utah has been named the best state for business by Forbes Magazine. These rankings speak to Utah’s economic strength. But this is not just about rankings; it is about economic recovery for the people of Utah. My focus is on growing the economy because I know a strong economy fosters healthy communities and prosperous families.

While recognition is nice, the underlying reasons for that recognition are what are most important. Forbes wrote: “No state can match the consistent performance of Utah. It is the only state that ranks among the top 15 states in each of the six main categories [on which] we rate the states.” Those six categories are economic climate, growth prospects, labor supply, business costs, regulatory environment and quality of life. Tonight, I will use the criteria of those economic experts to highlight Utah’s progress and our prospects. Let’s start with our current economic climate. In 2011, we added more than 36,000 jobs to our economy. Our unemployment rate has dropped from 7.5% to 6.0% today – a full 2.5% lower than the national average. Gross domestic product, personal income and business income continue to steadily rise. Utah still leads the nation in export growth. You might remember in last year’s State of the State, I challenged our business community to further increase our export growth – and they have responded with vigor. In 2011, we saw a 41% increase in exports, breaking records we set in 2009 and 2010.

Utah’s economic climate is healthy, but we must not relent in our efforts to improve. I recognize there are many people who are still hurting financially. I have met with many of you throughout the state. I want you to know, I am committed to working for all of you. There are, in fact, approximately 80,000 Utahns who are looking for work, and I will not rest – and I know that you in the Legislature will not rest – until every Utahn who wants a job can find a job.

My goal is to accelerate private sector job creation of 100,000 jobs in 1,000 days (www.utahjobsplan.com). I emphasize private sector, because it is the private sector – not government – that creates wealth, creates jobs and creates opportunities for Utah’s citizens. Government must create an environment where free enterprise can succeed and then get out of the way.

Let me give just one of many examples where business is thriving in Utah’s fertile field. Started 25 years ago in a garage, Lifetime Products now employs more than 1,300 people in Utah and was recently courted by many other domestic and international locations for a planned expansion. Ultimately, Lifetime determined that its home state of Utah was the best place to invest. This story is repeating itself hundreds of times across our state.

Utah’s steady job growth reaches far beyond the Wasatch Front. Last year, I visited 28 of Utah’s 29 counties – and don’t worry, Daggett County, I am headed your way soon! In my travels, I have been amazed at the creativity and ingenuity of our rural employers. For example, in the tiny town of Grouse Creek, I met Heather Warr, who is here with her family tonight. To supplement her family’s ranching income, Heather started an e-commerce business, selling western apparel and footwear online. Her company, standupranchers.com, now employs seven people – making Heather a major employer in a community of 100 residents. From fiber optic communications providers, to hay exporters, to composite manufacturers, to online retailers – people are finding unique opportunities and advantages in rural Utah. And Heather Warr exemplifies the innovation and initiative inherent in Utah’s people.

The second criterion is growth prospects. Utah is a fertile field in which to grow a new company, or to relocate or expand an existing company. This past September, I went to New York to meet with executives from L-3 Communications – a $16 billion high-technology company with locations in 30 states and 20 countries. The purpose of my visit was to convince them to expand their Utah operations. And, I’ve got to admit, it wasn’t much of a “hard sell.” L-3 told me they love doing business in Utah. In fact, their Salt Lake City unit is one of their most successful and fastest-growing divisions. Not by coincidence, last month, L-3 announced it would be concentrating its growth here in Utah, building new office space and hiring hundreds of new employees. In the past year, expansions and new jobs have been announced not only by L-3, but by other international companies like eBay, Boeing, Morgan Stanley, IM Flash, and Pepperidge Farms, just to name a few.

I’m delighted to say something that not many Governors can say: Our state is growing now, and as we look to the horizon, Utah’s growth prospects are truly bright. Anyone who understands the free market knows that there are few things that hinder growth more than onerous taxation. As I did last year, and the year before that, in order to sustain our successful economic recovery, I say to you today and to the people of Utah – no new taxes!

And, in fact, I want to go one step further. Due to our wise trust fund management – and our nation-leading record of helping people move from unemployment back into the workforce – Utah is in a position to reduce our unemployment insurance tax rates. I call upon you, the Legislature, to support Senate Bill 129, sponsored by Senator Curt Bramble and Representative Jeremy Peterson, to provide this timely tax cut to all of Utah’s 85,000 employers, and allow them to create more jobs and hire more people.

The third criterion is labor supply, or, more aptly put, a skilled and educated workforce. I have said before – Utah is the best state for business because we have the best people for business. Utah has natural advantages with our young, fast-growing, tech-savvy, highly-educated, bilingual and industrious workforce. Utah is also a proud right-to-work state, and we are going to keep it that way. In today’s global marketplace, educating and graduating job-ready students is an economic imperative.

With the help of Representative Mel Brown and Senator Lyle Hillyard, we have expanded early intervention programs for our at-risk students, programs empirically proven to help reach our critical goal of reading proficiency by the end of the third grade. We will soon introduce additional online college courses, providing another avenue for high school students to earn college credit before graduation. We are also expanding utahfutures.org, which provides students with online career counseling to ensure the education they receive today will get them a job tomorrow. My message to students is simple: “If you want a good job, get a good education.” Now, it is up to us – assembled here – to make sure they can!

My top legislative priority is to fund the growth and continued innovation in our education system. My budget calls for maintaining base funding and for $111 million in NEW money for our public schools, including a modest, but well-deserved, pay increase for our teachers. Post-secondary education is also increasingly becoming a necessity in today’s global marketplace, so I have set a goal that 66% of Utah adults will have a degree or professional certification by the year 2020. This is an ambitious goal, but an essential one – remember 66 by 2020! And working together, we will reach it!

The fourth criterion the economic experts considered is the cost of doing business, particularly the cost of energy. Because Utah’s electricity costs are an impressive 31 percent below the national average, we have a major competitive advantage over other states. In order to protect that advantage for the future, we must secure Utah’s supply of stable, low-cost energy, and we must do it now.

With Utah’s first 10-Year Strategic Energy Plan that I put in place last year, we are creating the framework to secure our energy independence. My administration is aggressively promoting responsible energy development in Utah. We have demonstrated, in the Uintah Basin and elsewhere, that developing our energy resources and being good stewrds of the environment are not mutually exclusive propositions. One of the major challenges for energy development is that many of Utah’s natural resources must be extracted from federally-managed public lands. While we have made progress in persuading the federal government to site and permit oil and gas wells, there remain great challenges ahead. We cannot – and we will not – let the federal government halt responsible energy development in Utah.

And because we owe it to our children and their children, we must also innovate safer and cleaner ways to extract natural resources and utilize energy. As Governor, I am calling on the private sector and our major universities to lead out! Our goal is to create an “energy research triangle” that launches Utah into a new era of energy technology innovation! I firmly believe that all solutions and all opportunities must be based upon principles of free markets and free enterprise.

Therefore, we will partner with industry and caring citizens to tackle one of the greatest challenges we have with energy development in our state – the issue of air quality. We cannot control the weather, but neither can we ignore the human and economic consequences of poor air quality. I am taking the lead on this issue by building partnerships with Utah industries and households to set achievable and vital air quality goals. I will be announcing the details of my plan in the coming weeks. I can promise you this: The solutions to our unique Utah challenges with air quality will come from Utah. Together, we can all do something to improve Utah’s air.

The fifth category is state regulatory environment. Before they invest precious capital, entrepreneurs want a stable and predictable environment, and a responsible government. Utah boasts a long history of fiscally prudent governance. In contrast to the federal government, Utah has made the tough decisions to keep our fiscal house in order. We balance our budget and we save taxpayers millions every year by protecting our AAA credit rating. In addition, my budget proposal eliminates our remaining structural imbalance and calls for no additional borrowing. Those decisions provide the stable and steady environment the marketplace seeks and needs in order to thrive.

In my travels around the state, one of the most common concerns business owners share with me is the cost, complexity and uncertainty created by excessive government regulation. In last year’s State of the State address, you will remember I ordered a review of all of Utah’s business rules and regulations. It resulted in 368 proposed rule changes to improve Utah’s already laudable regulatory environment – and we will work with you, the Legislature, to modify or repeal those rules that no longer serve a compelling public interest. Now, frankly, the vast majority of regulations causing the most harm to Utah business come from Washington, D.C. – part of the regulatory colossus created by an overreaching, out-of-control, and out-of-touch federal government. I am firmly resolved to work with our Congressional delegation and my fellow Governors to tell the Washington bureaucrats to get out of the way of Utah’s economic recovery, and stop the senseless flow of onerous and misguided regulation from our nation’s capitol.

The last category by which Forbes judged Utah the best state for business is our quality of life. We are truly blessed to live in the Beehive State. Not only are we surrounded by unsurpassed natural beauty, we also enjoy the beauty of strong communities, strong families, and a culture of caring and service. Two months ago, a devastating wind storm tore through Davis and Weber counties leaving tons of debris and millions of dollars of damage in its wake. With a second storm threatening, local leaders were concerned debris could become airborne and cause even further damage. Tens of thousands of citizens sprang into action and fanned out across neighborhoods to assist in clean-up efforts. Volunteer crews accomplished in days what would have taken city and county crews months to do. It was a stunning and moving example of the spirit of volunteerism and love of neighbor which permeates Utah, and which contributes so greatly to Utah’s outstanding quality of life.

It is also an impressive example of another Utah trait – our self-sufficiency. In Utah, we do not expect others to solve our problems. As a sovereign state, we not only have an obligation to find Utah solutions to Utah problems, we have a right to do so. We will not capitulate to a federal government that refuses to be constrained by its proper and Constitutionally-limited role.

Whether fighting the federal government on ownership and control of our RS 2477 roads, restoring our mule deer population, defending multiple use of our public lands, ending the budget-busting drain of Medicaid, or challenging the constitutionality of mandatory nationalized healthcare in the Supreme Court, be assured that this Governor is firmly resolved to fortify our state as a bulwark against federal overreach. Last October, in a one-room schoolhouse in Grouse Creek, Utah, I met a young boy named Heston. He told me that he had been taking piano lessons for one year and two months, and that he was going to play something for me after we had lunch.

I asked Heston if he was named after Charlton Heston, the actor.

One of his classmates helpfully piped up and said, “No, he was named after the tractor.”

After lunch, Heston made his way to the piano. Frankly, I was expecting a simple diddy like “Chopsticks.” Instead, I got Beethoven-dynamic and intricate music emanating from an old upright piano in a town two hours from the nearest stop light.

After young Heston finished his piece, I asked one of his classmates, “Are you sure he’s only been playing for one year and two months?”

She assured me that was the case, adding, “He’s what they call a prodigy.”

And, by the way, this young prodigy will be playing for us in the Rotunda after my address.

Utah is a state full of gems like Heston. Gems that, when polished and made to sparkle through hard work and the desire to succeed, add brilliance to our landscape. In every corner of our state, Utah’s source of richness and strength is its people. I am optimistic about Utah’s future because I believe in Utah’s people. Utah’s best days still lie ahead because Utahns are willing to work hard to be the architects of our own destiny. Utah is leading the way and setting the example for the rest of the nation to follow. In the darkest days of the economic crisis, Utah stood true to the founding principles of our great nation, and we now see the fruits of our determination.

I have spoken tonight of some of my goals and plans for the state. Having these goals and plans is important, but frankly writing things down on paper is the easy part. Making it work – the implementation and the execution – is what counts. Hard work demands dedication, determination, and discipline. Everything I do as Governor is examined through the lens of whether it helps grow the economy and create opportunity for Utah’s citizens.

That continues to be my commitment to you. I will keep my eye on the ball, and I will fight for sound and correct principles of fiscal prudence, limited government, and individual liberty, coupled with personal responsibility. Whether preparing a household budget or a state budget, whether you are the Governor or a small business owner – and I have been both – the principles are the same. By adhering to sound principles now, we will build a bright future for tomorrow. Not only will Utah be the best state for business, we will continue to be a place where communities and families will thrive and prosper.

The State of our State is strong. I am committed to making it stronger. I am honored to serve as your Governor.

May God continue to bless you, our great nation, and the Great State of Utah.

As Prepared for Delivery –

Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:

Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought — and several thousand gave their lives.

We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.

These achievements are a testament to the courage, selflessness, and teamwork of America’s Armed Forces. At a time when too many of our institutions have let us down, they exceed all expectations. They’re not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand. They work together.

Imagine what we could accomplish if we followed their example. Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.

We can do this. I know we can, because we’ve done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. My grandfather, a veteran of Patton’s Army, got the chance to go to college on the GI Bill. My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.

The two of them shared the optimism of a Nation that had triumphed over a depression and fascism. They understood they were part of something larger; that they were contributing to a story of success that every American had a chance to share — the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.

The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What’s at stake are not Democratic values or Republican values, but American values. We have to reclaim them.

Let’s remember how we got here. Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren’t, and personal debt that kept piling up.

In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn’t afford or understand them. Banks had made huge bets and bonuses with other people’s money. Regulators had looked the other way, or didn’t have the authority to stop the bad behavior.

It was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work, saddled us with more debt, and left innocent, hard-working Americans holding the bag. In the six months before I took office, we lost nearly four million jobs. And we lost another four million before our policies were in full effect.

Those are the facts. But so are these. In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s. Together, we’ve agreed to cut the deficit by more than $2 trillion. And we’ve put in place new rules to hold Wall Street accountable, so a crisis like that never happens again.

The state of our Union is getting stronger. And we’ve come too far to turn back now. As long as I’m President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.

No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.

This blueprint begins with American manufacturing.

On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs.

We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.

What’s happening in Detroit can happen in other industries. It can happen in Cleveland and Pittsburgh and Raleigh. We can’t bring back every job that’s left our shores. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive. A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in fifteen years, Master Lock’s unionized plant in Milwaukee is running at full capacity.

So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.

We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.

So let’s change it. First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.

Third, if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.

My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.

We’re also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements I signed into law, we are on track to meet that goal — ahead of schedule. Soon, there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon, there will be new cars on the streets of Seoul imported from Detroit, and Toledo, and Chicago.

I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration — and it’s made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It’s not right when another country lets our movies, music, and software be pirated. It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized.

Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia. Our workers are the most productive on Earth, and if the playing field is level, I promise you — America will always win.

I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that — openings at a time when millions of Americans are looking for work.

That’s inexcusable. And we know how to fix it.

Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant.

I want every American looking for work to have the same opportunity as Jackie did. Join me in a national commitment to train two million Americans with skills that will lead directly to a job. My Administration has already lined up more companies that want to help. Model partnerships between businesses like Siemens and community colleges in places like Charlotte, Orlando, and Louisville are up and running. Now you need to give more community colleges the resources they need to become community career centers — places that teach people skills that local businesses are looking for right now, from data management to high-tech manufacturing.

And I want to cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help they need. It’s time to turn our unemployment system into a reemployment system that puts people to work.

These reforms will help people get jobs that are open today. But to prepare for the jobs of tomorrow, our commitment to skills and education has to start earlier.

For less than one percent of what our Nation spends on education each year, we’ve convinced nearly every State in the country to raise their standards for teaching and learning — the first time that’s happened in a generation.

But challenges remain. And we know how to solve them.

At a time when other countries are doubling down on education, tight budgets have forced States to lay off thousands of teachers. We know a good teacher can increase the lifetime income of a classroom by over $250,000. A great teacher can offer an escape from poverty to the child who dreams beyond his circumstance. Every person in this chamber can point to a teacher who changed the trajectory of their lives. Most teachers work tirelessly, with modest pay, sometimes digging into their own pocket for school supplies — just to make a difference.

Teachers matter. So instead of bashing them, or defending the status quo, let’s offer schools a deal. Give them the resources to keep good teachers on the job, and reward the best ones. In return, grant schools flexibility: To teach with creativity and passion; to stop teaching to the test; and to replace teachers who just aren’t helping kids learn.

We also know that when students aren’t allowed to walk away from their education, more of them walk the stage to get their diploma. So tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen.

When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July. Extend the tuition tax credit we started that saves middle-class families thousands of dollars. And give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.

Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down. Recently, I spoke with a group of college presidents who’ve done just that. Some schools re-design courses to help students finish more quickly. Some use better technology. The point is, it’s possible. So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury — it’s an economic imperative that every family in America should be able to afford.

Let’s also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: The fact that they aren’t yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else.

That doesn’t make sense.

I believe as strongly as ever that we should take on illegal immigration. That’s why my Administration has put more boots on the border than ever before. That’s why there are fewer illegal crossings than when I took office.

The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan, let’s at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.

You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. That means women should earn equal pay for equal work. It means we should support everyone who’s willing to work; and every risk-taker and entrepreneur who aspires to become the next Steve Jobs.

After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. Both parties agree on these ideas. So put them in a bill, and get it on my desk this year.

Innovation also demands basic research. Today, the discoveries taking place in our federally-financed labs and universities could lead to new treatments that kill cancer cells but leave healthy ones untouched. New lightweight vests for cops and soldiers that can stop any bullet. Don’t gut these investments in our budget. Don’t let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.

Nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my Administration to open more than 75 percent of our potential offshore oil and gas resources. Right now, American oil production is the highest that it’s been in eight years. That’s right — eight years. Not only that — last year, we relied less on foreign oil than in any of the past sixteen years.

But with only 2 percent of the world’s oil reserves, oil isn’t enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy — a strategy that’s cleaner, cheaper, and full of new jobs.

We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.

The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy. And by the way, it was public research dollars, over the course of thirty years, that helped develop the technologies to extract all this natural gas out of shale rock — reminding us that Government support is critical in helping businesses get new energy ideas off the ground.

What’s true for natural gas is true for clean energy. In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries. Because of federal investments, renewable energy use has nearly doubled. And thousands of Americans have jobs because of it.

When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance. But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts. Today, it’s hiring workers like Bryan, who said, “I’m proud to be working in the industry of the future.”

Our experience with shale gas shows us that the payoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy. I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.

We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation. So far, you haven’t acted. Well tonight, I will. I’m directing my Administration to allow the development of clean energy on enough public land to power three million homes. And I’m proud to announce that the Department of Defense, the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history — with the Navy purchasing enough capacity to power a quarter of a million homes a year.

Of course, the easiest way to save money is to waste less energy. So here’s another proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, and more jobs for construction workers who need them. Send me a bill that creates these jobs.

Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt. We’ve got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.

During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.

In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

There’s never been a better time to build, especially since the construction industry was one of the hardest-hit when the housing bubble burst. Of course, construction workers weren’t the only ones hurt. So were millions of innocent Americans who’ve seen their home values decline. And while Government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.

That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.

Let’s never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.

We’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them, and buyers who knew they couldn’t afford them. That’s why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, don’t destroy the free market. They make the free market work better.

There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. I’ve ordered every federal agency to eliminate rules that don’t make sense. We’ve already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill — because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk.

I’m confident a farmer can contain a milk spill without a federal agency looking over his shoulder. But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago. I will not back down from protecting our kids from mercury pollution, or making sure that our food is safe and our water is clean. I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny you coverage, or charge women differently from men.

And I will not go back to the days when Wall Street was allowed to play by its own set of rules. The new rules we passed restore what should be any financial system’s core purpose: Getting funding to entrepreneurs with the best ideas, and getting loans to responsible families who want to buy a home, start a business, or send a kid to college.

So if you’re a big bank or financial institution, you are no longer allowed to make risky bets with your customers’ deposits. You’re required to write out a “living will” that details exactly how you’ll pay the bills if you fail — because the rest of us aren’t bailing you out ever again. And if you’re a mortgage lender or a payday lender or a credit card company, the days of signing people up for products they can’t afford with confusing forms and deceptive practices are over. Today, American consumers finally have a watchdog in Richard Cordray with one job: To look out for them.

We will also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments. Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender. That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.

And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.
A return to the American values of fair play and shared responsibility will help us protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.

Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.

When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.

Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else – like education and medical research; a strong military and care for our veterans? Because if we’re serious about paying down our debt, we can’t do both.

The American people know what the right choice is. So do I. As I told the Speaker this summer, I’m prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.

But in return, we need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes. Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up. You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.

Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.

We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference — like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to their country’s future, and they know our way of life will only endure if we feel that same sense of shared responsibility. That’s how we’ll reduce our deficit. That’s an America built to last.

I recognize that people watching tonight have differing views about taxes and debt; energy and health care. But no matter what party they belong to, I bet most Americans are thinking the same thing right now: Nothing will get done this year, or next year, or maybe even the year after that, because Washington is broken.

Can you blame them for feeling a little cynical?

The greatest blow to confidence in our economy last year didn’t come from events beyond our control. It came from a debate in Washington over whether the United States would pay its bills or not. Who benefited from that fiasco?

I’ve talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad — and it seems to get worse every year.

Some of this has to do with the corrosive influence of money in politics. So together, let’s take some steps to fix that. Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact. Let’s make sure people who bundle campaign contributions for Congress can’t lobby Congress, and vice versa — an idea that has bipartisan support, at least outside of Washington.

Some of what’s broken has to do with the way Congress does its business these days. A simple majority is no longer enough to get anything — even routine business — passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a rule that all judicial and public service nominations receive a simple up or down vote within 90 days.

The executive branch also needs to change. Too often, it’s inefficient, outdated and remote. That’s why I’ve asked this Congress to grant me the authority to consolidate the federal bureaucracy so that our Government is leaner, quicker, and more responsive to the needs of the American people.

Finally, none of these reforms can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas.

I’m a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more. That’s why my education reform offers more competition, and more control for schools and States. That’s why we’re getting rid of regulations that don’t work. That’s why our health care law relies on a reformed private market, not a Government program.

On the other hand, even my Republican friends who complain the most about Government spending have supported federally-financed roads, and clean energy projects, and federal offices for the folks back home.

The point is, we should all want a smarter, more effective Government. And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress. With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help. Because when we act together, there is nothing the United States of America can’t achieve.

That is the lesson we’ve learned from our actions abroad over the last few years.

Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the al Qaeda operatives who remain are scrambling, knowing that they can’t escape the reach of the United States of America.

From this position of strength, we’ve begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan, so that it is never again a source of attacks against America.

As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo; from Sana’a to Tripoli. A year ago, Qadhafi was one of the world’s longest-serving dictators — a murderer with American blood on his hands. Today, he is gone. And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can’t be reversed, and that human dignity can’t be denied.

How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome. And while it is ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings – men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.

And we will safeguard America’s own security against those who threaten our citizens, our friends, and our interests. Look at Iran. Through the power of our diplomacy, a world that was once divided about how to deal with Iran’s nuclear program now stands as one. The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent. Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.

The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our iron-clad commitment to Israel’s security has meant the closest military cooperation between our two countries in history. We’ve made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we’ve built to secure nuclear materials, to the missions we’ve led against hunger and disease; from the blows we’ve dealt to our enemies; to the enduring power of our moral example, America is back.

Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about. That’s not the message we get from leaders around the world, all of whom are eager to work with us. That’s not how people feel from Tokyo to Berlin; from Cape Town to Rio; where opinions of America are higher than they’ve been in years. Yes, the world is changing; no, we can’t control every event. But America remains the one indispensable nation in world affairs — and as long as I’m President, I intend to keep it that way.

That’s why, working with our military leaders, I have proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. To stay one step ahead of our adversaries, I have already sent this Congress legislation that will secure our country from the growing danger of cyber-threats.

Above all, our freedom endures because of the men and women in uniform who defend it. As they come home, we must serve them as well as they served us. That includes giving them the care and benefits they have earned — which is why we’ve increased annual VA spending every year I’ve been President. And it means enlisting our veterans in the work of rebuilding our Nation.

With the bipartisan support of this Congress, we are providing new tax credits to companies that hire vets. Michelle and Jill Biden have worked with American businesses to secure a pledge of 135,000 jobs for veterans and their families. And tonight, I’m proposing a Veterans Job Corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.

Which brings me back to where I began. Those of us who’ve been sent here to serve can learn from the service of our troops. When you put on that uniform, it doesn’t matter if you’re black or white; Asian or Latino; conservative or liberal; rich or poor; gay or straight. When you’re marching into battle, you look out for the person next to you, or the mission fails. When you’re in the thick of the fight, you rise or fall as one unit, serving one Nation, leaving no one behind.

One of my proudest possessions is the flag that the SEAL Team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats. Some may be Republicans. But that doesn’t matter. Just like it didn’t matter that day in the Situation Room, when I sat next to Bob Gates – a man who was George Bush’s defense secretary; and Hillary Clinton, a woman who ran against me for president.

All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn’t deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job — the pilot who landed the helicopter that spun out of control; the translator who kept others from entering the compound; the troops who separated the women and children from the fight; the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other – because you can’t charge up those stairs, into darkness and danger, unless you know that there’s someone behind you, watching your back.

So it is with America. Each time I look at that flag, I’m reminded that our destiny is stitched together like those fifty stars and those thirteen stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other’s backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we’re joined in common purpose, as long as we maintain our common resolve, our journey moves forward, our future is hopeful, and the state of our Union will always be strong.

Thank you, God bless you, and may God bless the United States of America.

This was his acceptance speech at the nominating convention:

Ross C. “Rocky” Anderson Accepting Justice Party Nomination for Candidacy for President of the United States (website)

I am proud to accept the nomination of the Justice Party to run as its candidate for President of the United States.

This is not my campaign.  This is a campaign of, for, and by the people.  We join together in this endeavor for the sake of justice – social justice, environmental justice, and economic justice.   We pledge to organize and act, tenaciously and over the long haul, for the sake of the public interest, to enhance and protect freedom for all, and to vindicate the sacred promise of justice for all.

Those who understand that our great nation and its people have been harmed severely, and are at tremendous risk for even greater damage in the future, can be powerful agents of positive change.  We need not settle for governance by the Republican and Democratic parties, which thrive on the corrupt money machine, nor do we have to confine ourselves to voting for the lesser of two evils, if indeed there is a lesser evil among the common choices.

If we have the vision, the courage, and the will, we can, together, forge a very different way – a way that will lead to a future of fiscal responsibility and respectful regard for the economic burdens we leave for later generations; secure jobs and fair compensation; decency and rationality in our cruel, self-destructive criminal justice system that is largely based on an irrational rage to punish; an investment in our nation’s infrastructure, education, and innovation that is as substantial as our need to re-gain our global competitive edge; compassionate and rational immigration reform; respect for fundamental human and civil rights; victory over the stranglehold of the military-industrial-congressional complex; protection of our air, water, and wild lands; essential health care for all, as in every other nation in the industrialized world; protection against and condemnation of illegal wars of aggression, pursuant to the United Nations Charter and the Kellogg-Briand Pact; international leadership on the urgent challenge of climate change; and restoration of the rule of law, including full accountability for crimes, regardless of the wealth or status of the perpetrators.

Men, women, and children across the United States, and throughout the world, are suffering horrendously because of the corruption of our government, the timidity of much of the public, and criminality that is rewarded rather than rectified.  Lives have been taken, lifetime injuries inflicted, life savings decimated, essential health care rendered more elusive for millions of people, jobs lost, and the damage inflicted by our nation’s debt increased exponentially — all because of crimes committed with impunity, public policy guided by bribery, and a crooked two-tiered economic and justice system that rewards a narrow class of rich and powerful people while devastating the rest.

The root of this disaster is systemic corruption fed by money from the few who have benefited.  The public’s interest in catching up with the rest of the industrialized world and providing essential health care to every man, woman, and child has been undermined by the corrupting influence of money flowing from the medical and insurance industries.

The public’s interest in reducing the outrageous cost of prescription drugs has been frustrated by the corrupting influence of money flowing from the pharmaceutical industry.

The public’s interest in reducing our deficits and the crushing burden of our accumulated debt, as well as reprioritizing the ways in which our government spends our money, has been frustrated by the corrupting influence of money flowing from military contractors, the beneficiaries of the military-industrial complex about which President Eisenhower warned our nation in his last presidential address.

Perhaps most outrageous and tragic over the long-term, the public’s interest in energy independence and the avoidance of the most catastrophic impacts of climate disruption has been frustrated by the corrupting influence of money flowing from the fossil fuel industry – the coal, oil, and gas companies.

Whether these calamities continue is our choice. Bringing integrity and competence to our government is within our power. That’s why people across the nation are supporting our campaign, which limits contributions to $100 per person and engages in grassroots strategies rather than billion dollar television campaigns financed by the wealthy.

The American people can ensure that the public interest, not simply the interests of politicians and campaign contributors, is protected. We the people are powerful enough to end the perverse government-to-the-highest-bidder system sustaining, and sustained by, the two dominant parties.

With the complicity of Republicans and Democrats in Congress, the Bush administration marched our nation off a cliff — morally, legally, and economically — by perpetrating a disastrous war of aggression against Iraq.  President Obama, for his political advantage, simply shrugged off war crimes committed in conjunction with that war, with the excuse that we “need to look forward not backward.”  It is a trademark reminder — in the spirit of President Ford’s ignominious pardon of Richard M. Nixon — that, in our two-tiered system of injustice, the rich and powerful are above the law, which is applied, often with a crushing vengeance, against the rest of us.

Wall Street criminals have raked in billions of dollars while eviscerating the U.S economy through their fraudulent schemes.  Goldman Sachs sold clients on perverse investments while secretly betting billions of dollars against them.  Several Wall Street firms bundled toxic mortgages and fraudulently sold them as top-rated investments, ultimately devastating the U.S. economy, including the housing market and the retirement plans of millions of men and women throughout the U.S. This was all aided and abetted by occupants of the White House and by a de-regulating Congress that have acted as if they are on retainer by Wall Street banks. Just recently, President Obama appointed a new Chief of Staff who was COO at CitiGroup and who oversaw investments in a hedge fund that bet on the housing market collapse.  We need a president who will surround himself not by the Goldman Sachs crowd, but by those who have a record of caring about, and acting to protect, the public interest.

Remarkably, some pundits are still puzzled about what the nation’s Occupiers – and now the international Occupiers – are angry about. The appropriate inquiry is “Why have we put up with this for so long?”

Most Americans are far less financially secure – some are wiped out and many have lost their homes – because of these crimes.  The plutocracy is now fully exposed.  While drug offenders are being incarcerated for decades under contemptible minimum-mandatory sentences, not one day has been served in prison by the perpetrators, who, along with their Wall Street colleagues, gave unprecedented contributions to President Obama’s last campaign. Goldman Sachs’s political action committee and individual contributors employed by Goldman Sachs donated over $1 million to Obama’s last election. They’ve enjoyed an enormous return on their investment, to the enormous detriment of the rest of us.

Please thoughtfully consider this fact, then be appropriately outraged:  22% of children are now living in poverty in the United States. The skids toward the economic disaster, including the resulting loss of jobs and skyrocketing poverty, were greased by the unconscionable deregulation of the financial industry, made possible through the collusion of Republicans and Democrats.  Again, that deregulation came about not because of the promotion of the public interest, but because of the corrupting influence of multi-national corporations that took us to the cleaners, then received bail-outs because they were considered by our economic policy-makers – themselves part of the corrupt financial class – as “too big to fail.”  The Republican Party pursues deregulation as a priority in its increasingly bizarre ideology, even when it puts most Americans at tremendous risk, while President Obama and most of Congress gorge themselves at the trough of special interest money, then act accordingly.

We will fight to make certain that, in the future, no banks will be “too large to fail” and that the only thing we will consider to be “too large to fail” is the interests of the American people.

We must set aside our fear-based notion that a candidate other than a Republican or Democrat can be a “spoiler” for the lesser of two evils and, instead, help make real change happen, for our good, for the good of our country, and for the good of our children and later generations.  We can be responsible, ethical stewards for the future by drawing the line now and committing to “no more” of what the two dominant parties have done to our nation.

Win or lose, we can, through this campaign, make a tremendous positive difference in our nation and our world.

Thomas Friedman and Michael Mandelbaum, in their remarkable book That Used to Be Us, make the argument about the vast difference a third party or independent candidacy can make for our nation.  Here is what they say:

Now [the Democrats] have become the most conservative force in American politics. . . .Now the [Republicans] are the party of fiscal radicalism and recklessness, cutting taxes without reducing spending and thereby pushing the United States ever deeper into debt.  The two parties are, however, united on two things – unfortunately.  Neither has the courage to take the necessary serious steps to address the dangerously high budget deficit . . . : And neither has the courage to reduce America’s, and therefore the world’s, ruinous dependence on oil by raising the price of gasoline. . . .

Business as usual in American politics is a recipe for national decline. . .

The American political system does not need blowing up, but it does need shaking up. . . . It needs political shock therapy. . . .

We hope that [such a shock] will come from within – from a combination of grassroots and high politics.  We mean by this a serious independent presidential candidate. . . .

The only way around all these ideological and structural obstacles is a third-party or independent candidate, who can not only articulate a hybrid politics that addresses our major challenges and restores our formula for success but . . . does this in a way that enough Americans find so compelling that they are willing to leave their respective Democratic and Republican camps . . . Only that could change a political system that rewards our politicians for postponing hard decisions and blaming the other party rather than making those decisions.

Because third parties do not win elections, voters expect them not to win and thus do not vote for them so as not to waste their votes.  This calculation, a major reason for the weakness of third parties (and thus the strength of the Republicans and Democrats), can, however, be seriously mistaken.  A vote for a third-party presidential candidate can be an effective way to change the direction of American national policy – and that is the strategy we are advocating.[1]

Friedman and Mandelbaum then describe recent polls, reflecting that people in the United States will support a third-party candidate:  A Pew poll finding that more voters identify themselves as independents than as Democrats or Republicans; another Pew survey finding that 72 percent of respondents are dissatisfied with the condition of our country; a Washington Post-ABC News poll reporting in 2010 that only 34 percent of the respondents believed that Democratic candidates deserved reelection, and only 31 percent believed that Republicans deserved reelection; and an Ipsos Public Affairs 2010 poll in which 71 percent of respondents said they would like to see more than just the Democratic and Republican Parties on the presidential ballot.[2]

Friedman and Mandelbaum continue as follows:

An independent presidential candidate who did all these things – describing, more vividly and accurately than the two major parties have yet done, the world in which its citizens are living and are destined to live in this century; prescribing the policies that will make it possible for Americans to thrive in that world and for America to exercise global influence in this century, as they did in the last one; and galvanizing the country to adopt these policies – could provide the shock therapy we need.

[I]t’s the best shot we have.  Sticking with the status quo, by contrast, is a sure thing – a sure pathway to decline.[3]

As Friedman and Mandelbaum conclude, win or lose, “an independent presidential candidacy can change America – and therefore the world – for the better. . . [O]ver the long term it would probably have a greater impact on the course of American history than the person who [won the election].”[4]

Let us embrace this historic opportunity.  For an end to the corruption and impunity for the privileged elite, and a fair shake for all Americans, we can reject the Republican/Democratic duopoly that has brought our nation to its current sad state.  We now have the choice to support a party and a candidate offering genuine hope for a safer, healthier, more just world.

[1] Friedman and Mandelbaum, That Used to Be Us, pp. 329, 330, 331, 334, 335.

[2] Id. at 340.

[3] Id. at 346.

[4] Id. at 347.

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by Dan Froomkin

Barack Obama is heading back onto the campaign trail, running as a champion of the middle class and even hoping to harness the Occupy movement’s public anger at Wall Street.

But the higher he soars with his populist rhetoric, the more he calls attention to the enormous gap between the promise of hope and change that he campaigned on in 2008 and the actions he has taken as president — especially regarding the economy, which is still stagnating, and Wall Street, which remains unpunished and unbowed even after causing the biggest financial crisis since the Great Depression.

As a result, voters will inevitably be asking themselves: Who is this guy, really? Does he mean what he says? Will he do what he says? And would a second-term Obama be different?

One answer to why Obama underperformed is laid out in searing detail in Pulitzer Prize-winning reporter Ron Suskind’s latest book, Confidence Men: Wall Street, Washington, and the Education of a President.

In the book, Suskind describes how Obama made the conscious choice to staff his economic team with former Clinton appointees whose sympathies were with Wall Street — and that those men were unable to see how drastically out of whack the country’s financial system had gotten both because they helped create it and because it had served them so well.

This is an in depth review of Suskind’s hard hitting and penetrating observations of the dilemma that Obama faced when he took office. It shows that the tentacles of Wall Street are everywhere.

Obama’s populist viewpoints were compromised by the timing of the financial mess he inherited, which proscribed him from taking actions that he otherwise may have been able to implement.

Given the magnitude of the crisis, Obama opted to choose Wall Street veterans to help steer the ship through the icebergs. Hiring inexperience, non-Wall Street advisors would have left him open for wide criticism and may have exacerbated the problem. He was between a rock and a hard spot and it’s difficult, even in hindsight, to determine whether a different set of advisors would have made things better. Opting for seasoned leadership seemed the rational choice.

As it turned out the Wall Street insiders co-opted Obama’s vision, and Obama’s populist rhetoric of ‘hope’ was turned into ‘nope.’

Then, rather than forcefully impose his campaign’s populist vision on these men, Obama again consciously chose to defer to them repeatedly — and tolerated it even when they slow-walked, pushed back against, or simply ignored his instructions.

The White House launched an aggressive counterattack when the book came out in September, initially centered around nitpicking over a few minor factual errors.

In perhaps the broadest on-the-record denial from the White House, National Economic Council Director Gene Sperling told CNN: “The notion that this president was not leading and making the tough choices all along is just dead wrong, and I say that as somebody who’s been here every moment… This president has been focused and tough and decisive in leading us in this economic team and I think that is the story, and anything else really does a disservice to this administration and the real record that has been established.”

The White House pushback was followed by brickbats from some mainstream journalists — particularly Slate’s Jacob Weisberg.

But the attacks on the book only glanced off Suskind’s central theme — which is more subtle than his critics have made it out to be — because that theme was derived directly from on-the-record interviews with key players, internal documents that Suskind brought to light, and the outcomes we’ve all seen with our own eyes.

And though the book focuses on the first two years of Obama’s presidency, and a group of “confidence men” that is mostly gone now, the leadership style Suskind describes, and the strikingly similar makeup of Obama’s new economic team, suggest that Obama is still incapable of — or, alas, uninterested in — acting on his own words.

“You do have to start asking yourself a pretty tough set of questions about what his fundamental views actually are on so many of these issues,” says Suskind. “Did he ever believe that he was going to be doing many of those things that he inspired people with in the campaign?”

Mind The Gap

During his 2008 presidential campaign, Obama spoke eloquently and strikingly about the excesses of Wall Street.

In his September 2007 speech at the NASDAQ, Obama invoked FDR. “Amid a crisis of confidence Roosevelt called for a ‘re-appraisal of values,’ ” Obama said. FDR made clear “that in order for us to prosper as one nation, ‘…the responsible heads of finance and industry, instead of acting each for himself, must work together to achieve the common end.’”

This, he concluded, was “another moment that requires, in FDR’s words, a re-appraisal of our values as a nation.”

In the midst of the U.S. government’s September 2008 bank bailout, Obama told a Nevada audience: “Let me be perfectly clear. The fact that we are in this mess is an outrage. It’s an outrage because we did not get here by accident. This was not a normal part of the business cycle. This was not the actions of a few bad apples.

“This financial crisis is a direct result of the greed and irresponsibility that has dominated Washington and Wall Street for years.”

And although he said it wasn’t time yet, he promised: “There will be time to punish those who set this fire.”

In October 2008, he promise to “take on the corruption in Washington and on Wall Street to make sure a crisis like this can never, ever happen again.”

And one day before he was elected president, he told a Florida audience: “Tomorrow, you can turn the page on policies that have put the greed and irresponsibility of Wall Street before the hard work and sacrifice of folks on Main Street.”

Obama’s most seminal speech on the crisis was his March 2008 address at Cooper Union. There, he laid part of the blame for the disaster on Clinton-era financial deregulation, including the 1999 repeal of the 1933 Glass-Steagall Act. That repeal, which broke down barriers between commercial and investment banking, led to the growth of financial behemoths that were able to take enormous risks with impunity because they were “too big to fail.”

“[I]nstead of establishing a 21st century regulatory framework, we simply dismantled the old one, aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight,” Obama said. “In doing so we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy.”

Among the foremost champions of that deregulatory regime were the key members of President Clinton’s economic team, including Robert Rubin, who was Clinton’s treasury secretary, Larry Summers, who succeeded Rubin, and Timothy Geithner, who worked directly under both of them.

But once Obama was elected, and was staring into the maw of staggeringly large financial crisis, he made a fateful decision: He left most of his progressive economic advisers behind — including such liberal luminaries as Robert Reich and Joseph Stiglitz — and chose to go with name brand Clinton officials instead. Summers became his chief economic adviser, Geithner became his Treasury secretary, and fellow Rubin protégé Peter Orszag became his budget director. (According to Suskind, Obama even offered Rubin himself an office in the White House.)

The “bold visions of the campaign season… resolved into the serious, often risk-averse business of actually governing,” Suskind writes. “In the midst of a battering economic storm, it no longer seemed like the right time to be making waves.”

While the appointments of these men and a slew of similarly pedigreed subordinates reassured the financial markets, their leadership undermined Obama’s populist promises.

Many of them had already spent their interregnum feeding at the Wall Street trough.

Summers was paid $5.2 million for his part-time work for a massive hedge fund in 2008 alone, according to financial disclosure forms that were released on a Friday night several months after his appointment. That same year, he also raked in more than $2.7 million in fees for speaking engagements at such places as Citigroup, Lehman Brothers, Merrill Lynch and Goldman Sachs. For one speech alone, Goldman Sachs paid him a cool $135,000.

Rubin, whose influence remained enormous among the new Obama appointees, left Treasury to join Citigroup, a mega-bank that took on ever-riskier, life-threatening stances during his tenure while he managed to snare $126 million in cash and stock.

(How could all this money not be corrupting? Why did Obama trust these guys? Those were questions I was asking from my perch at the Washington Post at the time, and they were never answered.)

Although Geithner didn’t work directly for the banks, he regulated such firms as Citigroup and, as head of the New York Fed, helped engineer bailouts in the fall of 2008 that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.

Rather than give this team clear marching orders, Obama asked them what he should do, according to Suskind’s account. Not surprisingly, they were loath to suggest anything that would harm Wall Street, or, as they put it, spook the market.

Instead of “tough love”, the Obama White House showered the banks in cash and federal guarantees to make sure they could “earn their way back to health”. There was no “haircut”, no restructuring of the banks or the system that had done so much harm. Even the bankers were surprised, according to Suskind.

Former Federal Reserve chairman Paul Volcker — a relative progressive when compared to the advisers Obama chose to heed — told Suskind what his advice to Obama had been: “Well, right now, when you have your chance, and their breasts are bared, you need to put a spear through the heart of all these guys on Wall Street that for years have been mostly debt merchants.”

By late March 2009, public sentiment against the banks, which had been growing since the bailouts of the previous fall, had reached a fever pitch. But when the CEOs of the 13 largest banking institutions in the United States came to the White House, Obama’s own tone was conciliatory.

“I want to help,” he told them. “I’m not out there to go after you. I’m protecting you. But if I’m going to shield you from public and congressional anger, you have to give me something to work with on these issues of compensation.”

The bankers offered a few empty promises about voluntary compensation limits and went on to book two of the most profitable years in Wall Street’s history

There were things Obama and his staff could have pushed for much more aggressively. That list included breaking up the big banks or forcing banks to come to terms with the toxic assets still lurking in their portfolios. The White House team could have listened to the people who saw the crisis coming or had a history of taking on Wall Street. They could have replaced Ben Bernanke at the Federal Reserve, rather than renominating him.

Instead, as Suskind describes, bold action was consistently thwarted by one means or another.

Obama’s management style made that easy. “He feels like he needs consensus to have the confidence of action,” Suskind told HuffPost.

Without the guiding star of Obama’s campaign promises, his economic team settled on what they called a “Hippocratic” motto: First, do no harm. Suskind writes that Volcker saw that as a formula for small, modest actions:

The “do no harm” school, he said, “always sounds reasonable” in that it calls for delay, until matters worsen to the point, “where they’ll be consensus that we need to act in a forceful way. But you never get that consensus, because many of the actors, the institutions and so forth, will follow their self-interest right off the cliff.” Every policy of consequence, meanwhile, is going to “do some harm, something government, mind you, can and should cushion.” But there’s no other way “to create the larger good, something you look back on with pride.”

For a young, new president “with a powerful intellect but little experience, this stance was always available as a sensible course,” Suskind writes. Over time, it “increasingly felt like a prudential path, rather than a backing away from history’s call to arms.”

Sometimes, despite all this, Obama seemed to be opting for more decisive action. That, Suskind writes, is when the staff became insubordinate, “relitigating” matters that had been settled, “slow-walking” decisions that had been made — and in at least one case, outright ignoring what they were told.

The most graphic of many illustrations of this is Suskind’s recounting of a March 15, 2009, meeting at which Obama expressed a desire to draw up plans to break up the banks, which he said would “strike a blow for prudence” and would “begin to change the reckless behavior of Wall Street and show that accountability flows in both directions.”

Instead, his team (led in this case by chief of staff Rahm Emanuel, who from 1999 to 2002 made more than $18 million working for a financial services firm) wore down his request to a simpler directive: Draw up a plan for restructuring Citibank.

“Well, okay, so we do Citibank and we do it thoroughly and well,” Obama said, according to the book. “That would show everybody that they can trust those guys in government to do a hard job, and do it right. And then we go back to Congress and get the money to do the wider job that really needs to be done.”

Yet even that wouldn’t happen. Geithner simply never went ahead with it, according to the book, opting instead for his preferred strategy of applying “stress tests” to the banks — to find out how much capital they needed from the government and other sources to stay afloat.

That, in essence, is what Japan did for its two decades of stagnation, and we’re now three years along on that same path.

Liberals like Paul Krugman were aghast as the details began to leak. “It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street,” Krugman wrote in late March. “And by the time Mr. Obama realizes that he needs to change course, his political capital may be gone.”

The Citibank incident and others like it, Suskind writes, reflected a “pernicious and personal dilemma emerging from inside the administration: that the young president’s authority was being systematically undermined or hedged by his seasoned advisers.”

“The president had lost control of his White House; he had almost no process to translate his will into policy on the occasions when he could decide on a coherent path,” Suskind writes. “But such decisions were rare.”

Back in March 2010, I wrote for HuffPost that “people looking for the reasons why the Obama presidency has not lived up to its promise won’t find the answer amid the minor rifts between key players….. The fact is that after a campaign that appealed so successfully to idealism, Obama hired a bunch of saboteurs of hope and change.”

I was thinking of Emanuel in particular. But when it comes to the economy, Suskind describes Summers as the guy who really tied Obama up in knots.

Here’s Suskind quoting Orszag — on the record, by name: “Larry just didn’t think the president knew what he was deciding,” Orszag said. “The question is why didn’t [Obama] stop it,” he told Suskind. “People realized the process wasn’t working, and they kept saying it…. but the president didn’t say, Goddammit!… He didn’t demand that it be changed . . . and that can’t be healthy.”

A few days after the book came out, Geithner publicly denied slow-walking any orders from Obama.

“I would never do that,” he said. “I have spent my life in public service. It’s my great privilege to serve this President, and I would never contemplate doing that. But, again, I lived the original, and the reality I lived, we all lived together, bears no relation to the sad little stories I heard reported from that book.”

Summers, who has never said publicly whether he actually read the book, issued a statement saying that the “the hearsay attributed to me is a combination of fiction, distortion and words taken out of context.”

Still, we don’t have to take Suskind’s word for it. Simply read the White House’s own extraordinary February 2010 “annual review” memo, which top Obama adviser Pete Rouse prepared for the president. Suskind excerpts it in the book and the White House has not challenged its authenticity:

First there is deep dissatisfaction within the economic team with what is perceived to be Larry’s imperious and heavy-handed direction of the economic policy process.
Second, when the economic team does not like a decision by the President, they have on occasion worked to re-litigate the overall policy.

Third, when the policy direction is firmly decided, there can be consideration/reconsideration of the details until to the very last moments.

Fourth, once a decision is made, implementation by the Department of the Treasury has at times been slow and uneven. These factors all adversely affect execution of the policy process.

Meet the New Team

Most of the members of Obama’s initial economic team — including Summers, Orszag and Emanuel — are gone, now.

Geithner, notably, remains.

And in the end, three white, male Clinton appointees with close ties to Wall Street were replaced by — you guessed it — three other white male Clinton appointees with ties to Wall Street.

Chief of Staff Bill Daley, formerly Clinton’s secretary of commerce, came back to the White House fresh off an $8.7 million-a-year job at JPMorgan Chase. His appointment, particularly delighted Wall Street.

National Economic Council Director Gene Sperling, who held the exact same job under Clinton, made $2.2 million in 2008 alone, including $887,727 from Goldman Sachs for a part-time job advising it on its charitable giving and $158,000 for speeches mostly to financial companies.

New budget chief Jack Lew, who also had the exact same job under Clinton, made millions in between his White House stints at Citigroup, including a $950,000 bonus in 2009not long after the bank received billions of taxpayer dollars. (Lew told a Senate panel last year that deregulation didn’t lead to the financial crisis.)

By all accounts, they’re a nicer bunch than the men they replaced. None of them is anywhere near as “imperious and heavy handed” as Summers, who Suskind actually caught musing that “One of the challenges in our society is that the truth is kind of a disequalizer.” According to Summers, “One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they’re supposed to be treated.”

(Summers recently wrote an op-ed for the Washington Post describing ways the government should mitigate rising inequality. It was greeted skeptically by some progressives.)

But are the new guys really philosophically different? Do they similarly defer to Wall Street? And block bold action? Were they hired to do so?

Because not much seemed to change after the old team left. In fact, many progressives felt that White House economic policy in the months-long debt ceiling debate actually hit a new low.

Part of that may have been political necessity. But even after the 2010 Republican House takeover, there were a lot of ways Obama could have successfully pursued his campaign-era agenda, and there are still even now several things he could do to goose the economy without Congress. But the White House doesn’t act.

Edward Luce, the fearless Washington bureau chief of the Financial Times, recently wrote that the management problems continue.

Obama “remains unable to create a properly functioning White House,” he wrote. “Much of governing is about managing. No one, so far, has been given the authority to restrain Mr Obama’s inner circle. The effects have been sorely in evidence over the past 12 months.” And, Luce concluded: “The plain fact is that Mr Obama prefers to campaign than govern.”

The Bush White House famously had no real policymaking process at all — something Suskind first exposed in a prescient January 2003 article in Esquire. But once the decision was made (perhaps inexplicably, probably by Dick Cheney) there was no second-guessing. Stuff happened.

When it comes to economic policy, at least, the Obama White House would appear to be the exact opposite: A lot of process, a few timid decisions, and almost no action.

The early-November de facto demotion of Daley, with most of his duties going to Rouse — the writer of that memo, a veteran Obama aide with an unassuming demeanor and vast experience on the Hill — could mean some changes ahead. But it’s too soon to say, and Rouse is hardly considered the enforcer type.

The Suskind Factor

Like all of Suskind’s recent books, Confidence Men doesn’t just expose the secret goings-on that explain so much about how our government works. It also makes so much of the mainstream press coverage look shallow and credulous by comparison. That may go a long way toward explaining why his work sometimes gets a hostile reception in major media outlets.

Suskind’s 2004 book, The Price of Loyalty: George W. Bush, the White House and the Education of Paul O’Neill, for instance, was the first truly damning expose of George W. Bush’s White House, putting its author years ahead of most of his media colleagues in recognizing the depths of its dysfunction and deceit in the Bush/Cheney administration.

Time and again, Suskind’s revelations have initially been pooh-poohed by reporters who couldn’t recreate his reporting — and then much later were recognized as being utterly correct.

In his 2006 book, The One Percent Doctrine: Deep Inside America’s Pursuit of Its Enemies Since 9/11, for instance, Suskind reported that terror suspect Abu Zubaida was a mentally disturbed minor al Qaeda functionary who, when tortured, made up plots against imaginary targets — and that, as a result “thousands of uniformed men and women” were sent on wild goose chases.

It took the Washington Post three years to finally catch up with his reporting — but in the meantime, the mainstream media had allowed Bush to routinely cite Zubaida as his Exhibit A that torture worked, unhampered by reality.

Now, the same press corps that Suskind showed up so many times seems to delight in pointing out minor errors in his nearly 500-page tome.

Leading the recent charge against Suskind was Jacob Weisberg, the editor in chief of the Washington Post Company’s Slate Group. In a column entitled Don’t Believe Ron Suskind, Weisberg repeated White House talking points and accused Suskind of fabrication.

But Weisberg’s stance is less surprising when one considers that Suskind’s book is basically one long evisceration of all things Rubin, and Weisberg is close to Rubin — having actually co-authored Rubin’s 2003 autobiography.

(Weisberg, in an e-mail, insisted he had no ulterior motive. “I’ve long mistrusted Suskind’s journalism. I picked up his new book and got even more suspicious,” he wrote. “I think the guy is a lousy reporter and decided to say so with evidence. It’s got nothing at all to do with Rubin or the White House. I did my own homework. I think you’ll find that most of the errors I found in the book weren’t caught by the White House or anyone else before me.” As for whether it was a mistake not to disclose his ties to Rubin in his article, Weisberg wrote that “it had nothing to do with my story. But obviously isn’t any kind of secret.”)

Meanwhile, in a more rigorous critique, Washington Post columnist Ezra Klein, writing in the New York Review of Books, accused the book of “incoherence” largely based on what he called a contradiction between Suskind’s description of Summers as all-powerful — and Suskind’s own reporting about the several times Summers’ more progressive ideas were rejected as too radical.

But in the book, Suskind never suggested that Summers or Geithner won all their battles; what he described was an environment in which Summers or Geithner — or Emanuel — all won some and lost some; an environment in which any one of the old Clinton hands could shoot down a bold idea as untested, too radical, unsellable, or too likely to spook the markets.

The only consistent theme, especially when it came to dealing with Wall Street or job creation, was that whoever was most cautious tended to emerge the victor, either outright, by winning over the president, or because they could block the execution.

Klein also argued that, while Obama clearly underestimated the severity of the financial crisis, the insufficient response was largely the fault of Congress. “The president is but one actor in the drama of American politics, and he is quite constrained in his capacity to make — or remake — American policy,” Klein wrote.

But Suskind documents case after case in which the White House didn’t even try — and certainly never came even close to twisting arms the way, say, Lyndon Johnson might have.

Words And Deeds

Politically, Obama’s economic policy has been a disaster. There was enormous political will to make the banks pay for their mistakes back in 2009 — and judging by the Occupy movement, it’s still there. It remains unsatisfied.

Bolder action — especially when it comes to reducing the principal on underwater mortgages — would have hugely stimulated the economy. A larger stimulus, or a second one, would have created jobs.

Perhaps more than anything else, not living up to his word has hurt the president across the board.

“It’s about the connection between word and deed,” says Suskind. “At day’s end, what got George W. Bush re-elected was straight-shooter credit.”

Consider what progressive hero Elizabeth Warren told Suskind in a September 2009 interview:

“You can’t run a policy based on a misdirection, on a fiction,” she said. “I don’t know what the president is thinking. I don’t see the president. He meets with bankers. He doesn’t meet with me. But if he’s involved in this at all, he’s got to know that his angry words at Wall Street, at their recklessness and dangerous incentives in compensation, about how they do their business in ways utterly divorced from what’s actually good for the economy — that he can’t just say that sort of thing, and then dump money in their laps and be credible.”

So what does Obama need to do to persuade people that he means what he says? “Words are not enough,” says Suskind.

“Right now, after the record that has expressed itself across four years, the only thing that will be proof of change is deeds — meaning he takes on the assembled power of the financial capital in an ‘either them or me’ way.”

He could also level with the public about the errors he made, and what he’s learned from them.

He could fire Geithner — like some people have been suggesting for nearly three years. (Although the New York Times recently wrote, in a gushing profile, that “Mr. Geithner’s departure could signal additional instability to financial markets.”)

Ultimately, the biggest question for voters who are troubled by Obama’s failure to confront Wall Street despite his words is whether it reflects a weakness of character, a weakness of will, or a weakness in management style. Presumably the latter would be easier to correct in a second term.

But Suskind has no opinion — and wonders if there’s really much of a difference. Either way, it’s a reflection of how Obama wields power. And until something dramatic happens, there’s no reason to think it’s going to change. “This White House,” Suskind says, “is the one he constructed and presides over.”

© 2011 Dan Froomkin

Dan Froomkin is Washington Bureau Chief for the Huffington Post. Previously, he wrote the White House Watch column for the Washington Post’s website.

The Birth of the People’s Party?

by Robert Reich

Look at the outrage in Madison, Wisconsin. Look at the crowds in DesMoines, Iowa. Look at the demonstrations in Indiana and Ohio and elsewhere around America.

Hear what they’re saying: Stop attacking unions. Stop making scapegoats out of public employees. Stop protecting the super-rich from paying their fair share of the taxes needed to keep our schools running.

Stop gutting the working middle class.

Are we finally seeing average Americans stand up and demand a fair shake in an economy now grotesquely tilted toward the wealthy and the privileged? Are Americans beginning to awake to the fact that our economy now delivers a larger share of total income to the very top than at any time in living memory? That big corporations are making more money and creating more jobs abroad than in the United States?

That this concentration of income and wealth has so corrupted politics that corporations can extort whatever they want from the government — tax breaks, loan guarantees, subsidies — while the super-rich can take most of their income as capital gains (taxed at 15 percent), and the rest at the lowest top rate in 25 years? And that because of this our kids are crowded into classrooms, our streets and highways and bridges are falling apart, and our healthcare bills are out of control?

The Tea Party grew out of indignation over the Wall Street bailout — an indignation shared by the vast majority of Americans. But the Tea Party ended up directing its ire at government rather than at big business and Wall Street. Was this because billionaires Charles and David Koch and their like funneled money to the Tea Party through front organizations like Dick Armey’s Freedom Works, and thereby co-opted it?

Now we may be seeing the birth of a genuine populist movement. Call it the People’s Party. Like the Tea Party, the People’s Party doesn’t have a clear organization or hierarchy or single address. It doesn’t have lobbyists in Washington. It’s not even yet recognized by the mainstream media.

But the People’s Party seems to be growing in numbers and in intensity. And it’s starting to push elected officials — first at the state level — to listen and respond.

© 2011 Robert Reich

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His “Marketplace” commentaries can be found on publicradio.com and iTunes.

The following letter written by Dave Coupal of Cottonwood Heights was published in The Salt Lake Tribune Public Forum Section, March 2, 2011.

by Dave Coupal, Cottonwood Heights

Those who engage in civil disobedience must be willing to pay the price and serve their time in jail (“Jury is set for DeChristopher trial,” Tribune, Feb 28). If convicted, perhaps Tim DeChristopher can share a cell with that other Utah agitator who disobeyed a law: state Rep. Mike Noel, R-Kanab. They both would surely benefit from a little time hearing from someone on the opposite side of the environmental issue.

I assume Noel will have a longer stay, since his illegal protest stunt of driving his all-terrain-vehicle up the restricted Wilderness Study Area of the Paria River did permanent damage to our publicly owned lands; whereas, DeChristopher just annoyed some energy producers.

By the way, when will the jury be set for the Noel trial?

Dave Coupal

How Bad Is It?

by Robert Freeman
This must be what it’s like when a country goes insane, when it falls down a rabbit hole and tries to pretend that everything is normal.

It can’t tell truths from lies. Hucksters pose as upright men, and people imagine they are Solons, avatars of insight come down from the ages. Sleazy operators pass themselves off as statesmen, as thinkers of deep gravitas, and the crowds, unable to distinguish sanctimony from sincerity, bravado from bullshit, lap it up.

Let’s be clear. It was the Republicans who wrecked the economy. Both their people and their policies drove the economy into the ditch. They wrecked the economy not once, but twice in the last eighty years.

So Republicans condescending to instruct Americans about how to fix the economy is like the captain of the Titanic lecturing shipping operators about safe procedures for navigating the north Atlantic. No sane society would tolerate it. But this one does.

How bad is it this time?

Six million people have lost their jobs. Twenty five million are underemployed. Many will never work again. Eight trillion dollars of middle class wealth has been destroyed in the housing collapse. One out of four mortgage holders are under water, owing more on their home than it’s worth. Fifty million people are living in poverty. One out of eight Americans are on food stamps. One of every two children will be on food stamps at some point in their lives.

How much worse can it get?

And the rich? Corporate profits are at an all-time high. But corporate taxes — not the imaginary “nominal” rates they whine so bitterly about, but the taxes actually paid — are among the lowest in the industrial world. Income inequality is at its highest level since 1917. Between 2000 and 2006, two thirds of all the growth in the entire economy went to the top 1%. And the “too big to fail” banks, those that wrecked the economy and extorted trillions of dollars from the government to rescue them? They are now even bigger.

How much better can it get?

And the Republicans’ response? The working and middle class need to pay. Never mind that it was Reagan and Bush I who quadrupled the national debt in only 12 years, and Bush II who doubled it again in only eight, all to grease the pockets of their wealthy base. It’s the working and middle class who need to be bled. They still have assets that can be milked from them. They can still be made more subservient, more docile.

They need to give up the union protections that have afforded them the slightest bargaining power against the largest organizations on earth. They need to give up environmental protections, even though every one of them have rocket fuel in their bodies from water contamination. They need to give up the mortgage interest deductions that allowed them to buy and own their own homes.

They need to give up government help with college loans that allowed their children to get the education they could never have. They need to give up any expectation of extended unemployment insurance, even though there are five people looking for every job available. They need to give up the retirement protections that Social Security has promised them for the past 75 years.

In other words, they need to give up any expectation of security, or dignity. They need to give up any childish illusions that they have any say in the government, that it is operated for any such quaint Madisonian ends as “the general welfare.” They need to put on their kneepads and accustom themselves to being grateful servants to their new feudal masters, assuming their masters will have them. It’s sickening.

Even though it was trillions of dollars of government bail-outs that saved the banks and their shareholders from bankruptcy… Even though it was government stimulus that reversed the 750,000 monthly job losses that were savaging the economy when Obama took office… Even though it was government FDIC insurance that protected millions of savers from being wiped out, and unemployment insurance that mitigated the collapse of aggregate demand, staving off another Great Depression…

It’s the poor, the working, and the middle classes that must be made to pay, for in the Republicans’ psychotic world government is existentially bad because it is through government that democracy tries to modulate the worst excesses of capitalism, which is existentially good.

It’s almost surrealistic. But decades of relentless Republican hate-mongering against the government has done its job.

Never mind that it was government that pulled off the greatest feat of social engineering in history. In 1900, only 4% of Americans graduated from high school. By 2000, more than 80% did. It was this mass educated public that made possible the most technically sophisticated economy in the history of the world.

It was government that won both World War I and World War II, leaving the U.S. economy astride the world like a colossus, able to harvest the fruits for decades. It was the government GI Bill program that educated a generation of young people to ultimately defeat the Soviet Union.

It was the government that wired every house in the country for electricity during the Great Depression, setting up the largest household consumer-goods market in the world in the 1950s: home appliances. And it was government guarantees for home loans that set off the greatest building boom in the history of the world: suburbia.

It was government that paved more than 3 million miles of road between 1930 and 1960, making possible the massive economic boom associated with automobiles, mass mobility, and more. It was government research that invented the graphical user interface and the Internet.

None of that matters.

Hate is stronger than logic and more than anything else, Republicans love their hate. It’s the only thing that gives them power. The more vicious, the more loony they are, the more they are treated like savants, like prophets channeling some higher wisdom, come though it may from the self-loathing gutter of political prostitution. They pull stuff out of their ass and brazenly pass it off as stone tablets. And people swoon.

Of course, you can understand why. The media genuflect before gibberish and idolize idiocy. They are the media-tors of a Gresham’s Law of public discourse where bad information drives out good. For their own slick whoring they become “players,” while everybody else is left with a debauched civic currency, a crushed economy, and a collective impotence that makes true democracy and true prosperity impossible.

Alice in Wonderland would be amazed, even repulsed, that such cultural pathology passes for intelligence, even civilization. At least she stood up to the inanities of the Mad Hatter, the insanities of the Queen of Hearts, the arrogant deceits of Humpty Dumpty. But she didn’t live in today’s America.

Robert Freeman writes on economics, history and education. He teaches history and economics at Los Altos High School in Los Altos, CA. and is the founder of One Dollar For Life, a national non-profit that helps American students build schools in the developing world through contributions of one dollar. He can reached at robertfreeman10@yahoo.com.

The Salt Lake Tribune

Published: February 18, 2011 07:13PM (Part of series on MLM)

Washington • For federal regulators, the idea seemed like a no-brainer.

People thinking of selling Avon, Utah-based Nu Skin or some other multilevel marketing (MLM) products should know how likely they are to make a profit. They should know about any lawsuits against the company and the number of independent sellers who ended up demanding a refund.

After years of study, the Federal Trade Commission in 2006 formally proposed a “business opportunity rule” to protect people from fraud by requiring such disclosures of MLMs, also known as direct sellers, along with companies pitching vending machine routes and letter-stuffing campaigns.

Then regulators asked the public to comment. And they did. First by the hundreds, then by the thousands, almost all of which were sent by direct selling companies or their distributors clamoring that the rule would hurt their home-to-home business, if not kill it all together.

Two years later the FTC dropped any reference to MLMs and forged ahead with its proposal. The commission expects to finalize the business opportunity rule sometime later this year.

So what happened? That depends on your vantage point.

The direct selling industry says it demonstrated that the proposal was unnecessarily onerous and persuaded federal regulators to back off.

The FTC’s staff say they decided the rule wouldn’t help consumers determine if a MLM was a good bet.

And then there’s a small group of critics who believes the FTC caved to political pressure from a questionable industry.

“It defies reason and the experience of millions of people to take the most common form of business-opportunity solicitation and exclude it,” said Robert FitzPatrick, president of Pyramid Scheme Alert, based in Charlotte, N.C. “This rule was snuffed out with a political lobbying campaign.”

That campaign was waged largely by the Direct Selling Association (DSA), which counts 16 Utah businesses as members. And the group doesn’t hide that it helped direct most of the 17,000 comments the FTC received.

“We certainly facilitated those communications. I’m not abashed about that at all,” said Joseph Mariano, the incoming president of the DSA. “We felt that the regulatory burdens they were going to place on legitimate businesses in an effort to weed out the scams were just too high.”

The drawn-out debate over the business opportunity rule shows how aggressive direct sellers respond to regulations they find threatening, but also how the government has struggled to fashion rules for an industry that regulators regard skeptically.

Such regulatory dust-ups are of particular interest for Utah, which has more MLM companies per capita than anywhere else in the nation. Companies like Nu Skin, USANA and XanGo employ thousands and rack up annual revenues of $4 billion. They also enjoy the support of Utah’s political elite. Sen. Orrin Hatch, Reps. Jim Matheson and Rob Bishop and former Rep. Chris Cannon sent letters to the FTC questioning the business opportunity rule and how it applies to direct sellers.

The thousands of comments, including those from Utah political leaders, almost exclusively focused on three areas: a seven-day waiting period to sign up, the financial and legal disclosures and a required list of references.

The companies felt a weeklong waiting period would zap the excitement of potential distributors, making it harder to recruit new people into their sales force. They also felt the earnings and lawsuit disclosures would make it look like the company was sketchy.

“There is sort of a feeling like ‘Why do you have to do this? Have you done something wrong?’” said James Bramble, general counsel for USANA Health Sciences, based in Salt Lake City.

As for the list of references, their complaints covered both privacy concerns and issues unique to the MLM world.

Distributors get more money when they add new distributors to their “downline,” so encouraging someone to call independent sellers to check on the validity of the business could start a recruitment war.

“We were ultimately able to persuade the FTC that the direct sellers should not be covered,” said Nu Skin General Counsel Rich Hartvigsen. “There are several million independent direct sellers in the United States. When they get involved in an issue that impacts their business, they have a fairly loud voice.”

Monica Vaca of the FTC’s Bureau of Consumer Protection said the 17,000 comments were far more than the commission normally receives on a proposed rule, but she didn’t believe the industry arguments resulted in the policy change.

“At its core what the business opportunity rule does is provide prospective purchasers with disclosures. Things we think are important for people to know before they invest money,” said Vaca. “Some of those disclosures are going to be more difficult to apply in the MLM context.”

She said the big one is the earnings disclosure. According to Vaca, MLM companies and even their distributors have an incentive to exaggerate annual earnings, making it easier to recruit others into the business.

“If they are engaged in some kind of collusion to inflate these earnings, then the earnings disclosure is not going to be really that useful,” she said.

Vaca did agree that providing references to other MLM distributors could be counterproductive.

“If they have an incentive to recruit you into their downline, then you don’t have somebody who is necessarily giving you the full, honest picture,” she said.

Beyond the details of the regulation, Vaca said the commission had a change in heart through the rule-making process.

“Initially, we felt like there was really quite a lot of evidence there, that there are some bad practices in this industry. However, identifying bad practices of 14 companies is a little bit different than identifying that as a prevalent problem affecting the entire industry,” she said, referring to past FTC lawsuits against 14 direct selling companies, none of which was from Utah.

The FTC decided that it would continue its case-by-case approach to rooting out the bad companies from the legitimate ones, focusing on how much of the money is made by recruiting others rather than selling products.

FitzPatrick, the vocal MLM critic, called that “absurd.”

“The original rule was not to prove that each scheme was a fraud,” he said. “The point of the rule was to provide disclosure so the consumer could know if it was a viable business opportunity.”

He said the biggest need is for more information on potential earnings, because he said people envision making big money selling the products and recruiting other distributors, but the overwhelming majority makes little or no money at all. He thinks the FTC should have tried to tweak the disclosure, not jettison it entirely.

FitzPatrick also lamented the political involvement in the rule making, including a direct selling company in Georgia that hired past FTC Chairman Timothy Muris and former Consumer Protection Bureau Director Howard Beales to argue on its behalf.

Vaca rebuffed the claim that the FTC caved to industry pressure, saying: “I think our report really stands on its own. We talk about all the reasons why it was not a good fit.”

But she also promised that the FTC would keep a vigilant eye on direct sellers.

“We are going to be active in the MLM world for a long time,” she said. “The two main issues are the potential for a possible pyramid scheme, and the making of false or unsubstantiated earnings claims.”

mcanham@sltrib.com

Business opportunities

The FTC’s proposal was a play off the already established franchise rule, which requires chains to provide lengthy disclosures to a prospective buyer. This time, the FTC wanted to target much less expensive ventures such as at-home work companies and multilevel marketing.

Disclosures required

Any earnings claim made by the company

A list of lawsuits concerning fraud or deceptive practices

Description of any refund policy

The number of purchasers in the past two years and the number who sought a refund

A list of references, usually the 10 geographically closest to the new recruit

—————————————————-

The Salt Lake Tribune

Published: February 21, 2011 10:02AM

Companies such as Tahitian Noni International, headliners of Utah’s booming nutritional supplement industry, built fortunes extolling the healing powers of juices made from exotic, tropical “super fruits.” Tahitian Noni champions the noni, XanGo touts the mangosteen, and MonaVie boasts the once-obscure, now wildly popular açai (AH-sigh-EE).

But after nutritionists questioned some of their health claims, manufacturers rejected the “super fruit” label.

They’re now rebranding their products as medicinal and pumping millions into research — not just test tube analyses of key ingredients, but randomized, placebo-controlled human trials on whole formulas.

“We don’t rely on third-party research. We study our own finished product. We want to know that it has benefits as consumed,” said Brett West, research director at Tahitian Noni in Orem.

In one company-funded study, the juice reduced biomarkers that indicate cancer risk in 120 heavy smokers. Another study suggested the juice can reduce high blood pressure in adults. Both were published in professional, peer-reviewed journals.

In 2009, XanGo in Lehi tested its juice on 122 overweight and obese adults. At a dose of 18 ounces per day — far higher than its label recommends — the juice reduced indicators of inflammation, which may contribute to heart disease and diabetes, the study’s authors found.

But experts say they’re a long way from scientific proof. And without more independent research, there’s a void for thirsty shoppers.

“Just claiming a fruit has antioxidants or bioindicators of inflammation doesn’t mean it has lasting effects,” said Wayne Askew, chairman of the University of Utah’s nutrition department.

Scientific rigor demands that the studies be replicated many times.

“But how many researchers are interested in exploring noni? It’s not like an anti-cancer drug with several investigators working on it,” said Askew. “These studies may benefit [juice makers] without advancing science much.”

—

Antioxidant ability • The Food and Drug Administration bars manufacturers from claiming foods cure disease.

Noni, a lumpy yellowish-green fruit from a plant used in traditional healing throughout Polynesia, is instead promoted for improving endurance, boosting immune function and supporting healthy hearts, skin and joints. Similar boasts have been made for mangosteen, a fruit with a thick purple rind and sweet white pulp grown primarily in Southeast Asia. Açai, a purple berry from Brazilian forests, reportedly helps reduce inflammation and has found its way into weight-loss drinks and anti-aging creams.

Juice makers built these claims on the promise that their products are packed with antioxidants, which neutralize the free radicals (oxidizing molecules in cells) that cause aging and age-related disease.

Some studies support that. But in 2008, researchers at the University of California, Los Angeles, found açai to be a middling source of antioxidants, ranking behind red wine, pomegranate and store-bought grape, blueberry and black-cherry juices.

And in 2007, Choice, a publication by the Australian Consumers Association, found a common apple beat the antioxidant potency of juices containing açai, mangosteen, noni and the goji berry.

“It makes more sense, it’s more economical, to buy an orange or apple than to spend a lot of money on an exotic new fruit that may or may not be better for you,” said David Schardt, senior nutritionist at the Center for Science in the Public Interest in Washington, D.C.

A 25-ounce bottle of MonaVie Essential retails for more than $30, or $4.60 per the daily recommended 4 ounces. Since it’s a proprietary juice blend, there’s no telling how much açai you’re paying for.

POM Wonderful in California spent months and lots of money developing a chemical analysis of pomegranate juice, so their product could be compared to rip-offs.

No such test exists for açai, which is now found in mainstream drinks by Pepsi and Anheuser-Busch. MonaVie has patented its freeze-dried açai powder.

“Unlike with many herbs and vitamins, there’s no defined quality standard for açai. You can’t say one product is more authentic than the other,” said Todd Cooperman, president of ConsumerLab.com, which tests supplements for manufacturers seeking its seal of approval.

—

‘One more thing you can do’ • Nutritionists, meanwhile, have grown skeptical of dueling antioxidant claims, saying the recommended daily intake is easily met by eating fruits and nuts and cautioning that too much may be counterproductive.

Antioxidants are complicated, explains Alexander Schauss, senior director at Aibmr Life Sciences, a nutraceutical research firm in Puyallup, Wash. The oxidation of free radicals has important benefits, such as helping the body convert fat to energy, attack bacteria and recover from exercise and injury.

Some antioxidants are absorbed well; others not at all. Their relative importance and their interactions are issues scientists struggle to understand — and juice makers are working to add to the literature.

Schauss, a member of MonaVie’s scientific advisory board, found in a 2008 study that the juice demonstrated “significant antioxidant protection” in 12 healthy adults. It protected against the oxidation of low-density lipoproteins, LDL or bad cholesterol, which contributes to the development of the fatty buildup in the arteries and heart disease.

But Schauss looked at the immediate effects of consuming MonaVie — not on whether it has any health outcomes.

Açai is still a virtual unknown in the scientific world. Schauss’ study in the Journal of Agricultural and Food Chemistry is one of about 72 published on the berry, compared with more than 45,000 on vitamin C and 32,000 on vitamin E. Far more is known about these supplements, and even they have yet to be embraced by groups like the American Heart Association, which recommends a healthy diet instead.

But supplement makers point out that many Americans don’t eat enough fruits and vegetables.

“XanGo is not better or worse than taking vitamin C or E. It’s yet one more thing you can do,” said Shawn Talbott, the company’s scientific adviser.

The industry is now promoting other compounds found in their products, such as phytochemicals, which some lab studies have suggested may help prevent cancer.

“Most super fruits are no better for you than apples, oranges and bananas. They just cost you a lot more,” admits a promotional video on Tahitian Noni’s website. “But noni is different because it’s teeming with what researchers call bioactives, chemical compounds that can actually improve your health.”

Jeff Graham, a senior vice president at MonaVie, acknowledged research on exotic fruits is not fully developed.

But, he notes, MonaVie has funded 11 peer-reviewed studies since its founding in 2005. “You have to have capital to do that. Five or six years ago we couldn’t pronounce açai. Now 50-plus food and drink products leverage its power.”

kstewart@sltrib.com

The truth behind noni

The National Institute of Health is funding a clinical study of dried noni fruit extract in cancer patients at the Cancer Research Center of Hawaii. The first phase, published in abstract form only, found noni to be safe and well-tolerated by patients. Later phases will seek to ascertain any benefits.

XanGo Juice by XanGo Corp

Ingredients

Each 1 fl oz serving contains (32 g) of garcinia mangostana (reconstituted juice from whole fruit) and apple, pear, grape, blueberry, raspberry, strawberry, cranberry and cherry juice concentrates.

Price

$37 per bottle, or $100 for four bottles.

How it works

Marketers claim that the juice, made from the tropical fruit mangosteen, reduces inflammation and supports healthy respiratory and intestinal systems and joints. The mangosteen bark, leaf, root and rind traditionally have been used as remedies for diarrhea, dysentery, fever and skin conditions. Studies have shown the fruit to have some antioxidant, anti-histamine, anti-serotonin, anti-inflammatory and neuroprotective properties. But there is not enough reliable scientific evidence to support the juice’s purported therapeutic benefits.

Sources: Consumer Reports and ConsumerLab.com

MonaVie Essential by MonaVie LLC

Ingredients

Each 2 fl oz serving contains patented, freeze-dried açai powder and puree and a blend of 18 reconstituted fruit juices, including, grape, apple and pear.

Price

4 bottles for $120

How it works

People use acai, the fruit of the acai palm, for osteoarthritis, high cholesterol, erectile dysfunction (ED), weight loss and obesity, “detoxification,” and for improving general health. It exploded in popularity after being promoted as a “Superfood for Age-Defying Beauty” on the Oprah Winfrey show. Some studies suggest acai to be high in antioxidants, especially in products that contain the fruit pulp. Others show the fruit be a middling source. But there is not enough reliable scientific evidence to support the juice’s long-term therapeutic benefits.

Sources: Consumer Reports and ConsumerLab.com

Tahitian Noni Original by Tahitian Noni International

Ingredients

Each 1 fl oz serving contains (29.9 ml) of morinda citrifolia fruit nectar from pure noni puree and undisclosed amounts of grape and blueberry juice concentrate.

Price

4 bottles for $120 to $130

How it works

Traditionally, it was the leaves, and not the fruit, of the noni that were used medicinally as a poultice for wounds, skin infections and to promote lactation. Some distributors claim the juice stimulates the immune system and has proven effective in fighting AIDS, Epstein-Barr virus, cancer, lupus and kidney problems. It has also been promoted for increasing energy levels and promoting heart health. There is currently little scientific evidence to support these claims. But the National Institute of Health is funding a clinical study of dried noni fruit extract in cancer patients.

Sources: Consumer Reports and ConsumerLab.com

——————————————————————————–
©

By Steven Oberbeck

The Salt Lake Tribune

Published: February 21, 2011 08:16PM (3rd in series)

Lured by the promise of wealth, thousands of Utahns every year become “distributors” of the pills, potions and lotions multilevel marketing companies in the state make.

Nearly all will fail, with their money flowing into the pockets of an elite few top-level distributors — men and women who typically get into the game early and make a fortune off those who try but fail to duplicate their successes.

“You hear of people making a fortune in multilevel marketing. You also hear of people who made a fortune playing the lottery. Neither one is a good way to try to make a living,” said Jon Taylor of Kaysville, an industry critic and author of The Network Marketing Game.

Multilevel marketing companies, also known as network marketing companies, operate pyramid-like sales structures made up of multiple levels of independent distributors who earn commissions by selling products. The problem is, the products usually are expensive — $30 or more wholesale for less than a quart of fruit juice, for example. Marking them up even more for sale to the public doesn’t produce a lot of retail sales.

Instead, the distributors are the customers. They rely on getting a piece of the sales from new distributors they recruit — and on down the line. For the thousands at the bottom, though, it is nearly impossible to break even. But for those near the top, usually just a handful to several dozen people at each company, the money rolls in.

The top seven MonaVie distributors earn an average of $3.4 million a year. The top three distributors at XanGo earn an average of $1.3 million a year. Top-of-the-pyramid distributors at Usana earn an average of $857,865 annually, while Nu Skin’s top 115 or so “Blue Diamond” executives in the U.S. earn $535,276 a year on average.

Would-be entrepreneurs often can’t resist the lure of that kind of money. No matter how elusive the promise, they see an opportunity to work their way up to the elite earning level achieved by people such as Justin Prince.

Dressed in a neatly tailored suit and standing in front of a white board at XanGo’s headquarters last month in Lehi, Prince, a “premier” distributor, explained to a small group of new and potential distributors how they, too, could duplicate his success.

Premier XanGo distributors — who in terms of earnings are among the top one-quarter of 1 percent of the company’s sales force — make an average of $10,000 a month, although Prince said he makes more.

“You’ll want to use at least $200 of XanGo products a month, and in your first month connect three people, who also will buy $200 worth of product,” Prince said, writing those figures on the board. “At the end of your first month, you’ll make $180.”

The next month, he said, do the same thing while helping the three people initially connected bring in three more people each. “Your second month you’ll make $480. At that point you’re cash-flow positive.”

Do it for a third month. “At that point you have built a $9,480 a year business,” Prince said, explaining by duplicating that effort for another three months someone can make $14,000 a month, or $168,000 a year.

But Prince, who joined XanGo three years ago, also tempered his remarks.

“Let’s say for the sake of argument this is way optimistic,” he said, gesturing toward the board. “Let’s say it is 75 percent unrealistic and three out of four people don’t do what they say they’re going to do. At the end of six months, you’ll still be making $40,000 a year.”

Such talk reveals an underlying truth about multilevel marketing companies, said Robert FitzPatrick, founder of the website, PyramidSchemeAlert.org. “They are just product-based pyramid schemes built upon an endless chain of recruitment.”

To support his argument, he pointed to the turnover rate of distributors.

The Direct Selling Association, the Washington, D.C.-based trade group that represents many of the nation’s network marketing concerns, estimates the annual turnover among distributors is 56 percent. So statistically, at least, there’s a whole new corps of distributors every two years.

Rather than interpreting that as evidence companies are churning low-level distributors in order to keep the money flowing to top-level earners, the DSA offers a different explanation.

“People get involved in direct selling for many reasons,” said Amy Robinson, the DSA’s chief marketing officer. “Very often it is to fulfill a short-term goal, say buying a new refrigerator. They’ll get involved for a few months, reach their goal and drop out.”

Yet information from Utah’s top companies suggests even such a modest goal will be difficult for most to achieve.

Of MonaVie’s active distributors, 85 percent earned commission checks in 2009 averaging $35 a week or less. Of Nu Skin’s 76,246 distributors in the U.S. in 2009, 11,360 earned a commission check, and for a little more than half that number the average was $65 a month.

Distributors on XanGo’s two lowest earning levels, or nearly 73 percent of its active distributors, bring in an average of $122 a month or less. Usana reported that of its 165,710 associates, including those just starting out, the average yearly income was $617.

What isn’t disclosed are the often thousands of dollars in expenses distributors can incur trying to generate a commission, which might include time and the cost of purchasing promotional and sales-development materials from the companies or top distributors. “None of that comes without cost. These aren’t just pyramids based upon products, they’re also pyramids based upon time and effort,” Taylor said.

But Brian Douglas, a top level Usana “diamond director,” believes those who are committed can build a successful multilevel sales organization, just as he did after joining up with the company 14 years ago.

He offered his own explanation of why so few succeed.

“There is a high failure rate in any business,” he said. “The big problem we have is there is a very low cost to get involved. It is easy in, easy out. With low cost of entry, it is easy if things aren’t going great to throw up your hands and walk away. If you had a million bucks invested in a franchise, you would do everything you could.”

For FitzPatrick and Taylor, though, the deck is stacked against new distributors no matter how much time, effort and sincerity they bring to the table.

“If you have a company with 100,000 distributors and half leave every year, that means over five years 250,000 people who would have come and gone,” leaving their money behind, FitzPatrick said.

He conceded that the lure of direct marketing for many can be irresistible, especially during tough economic times.

“In one sense, network marketing companies do have a product that is in growing demand — the promise of a steady income. But at the end of the day, 99 percent of those involved lose money. It is an enormous flimflam on an almost incalculable scale.”

steve@sltrib.com

—

What top distributors earn

MonaVie • The top seven earn an average of $3.4 million a year.

Nu Skin • The top 115 or so “Blue Diamond” executives in the U.S. earn $535,276 a year on average.

Xango • The top three distributors earn an average of $1.3 million a year.

Usana • Top-of-the-pyramid distributors at earn an average of $857,865 annually.

—

What most distributors earn

Monavie • Of active distributors, 85 percent received commission checks in 2009 averaging $35 a week or less.

Nu Skin • Of 76,246 distributors in the U.S. in 2009, 11,360 people, or fewer than 15 percent, received a commission check, and for a little more than half that number, the average was $65 a month.

XanGo • Distributors on the two lowest earning levels, or nearly 73 percent of active distributors, bring in an average of $122 a month or less.

Usana • Of its 165,710 associates, the average yearly income was $617.

Source • Company disclosure statements.

What top distributors earn

MonaVie • The top seven earn an average of $3.4 million a year.

Nu Skin• The top 115 or so “Blue Diamond” executives in the U.S. earn $535,276 a year on average.

Xango • The top three distributors earn an average of $1.3 million a year.

Usana • Top-of-the-pyramid distributors earn an average of $857,865 annually.

What most distributors earn

Monavie • Of active distributors, 85 percent received commission checks in 2009 averaging $35 a week or less.

Nu Skin • Of 76,246 distributors in the U.S. in 2009, 11,357 people, or fewer than 15 percent, received a commission check, and for a little more than half that number, the average was $65 a month.

XanGo • Distributors on the two lowest earning levels, or nearly 73 percent of active distributors, bring in an average of $122 a month or less.

Usana • Of its 165,710 associates, the average yearly income was $617.

Source • Company disclosure statements.

—————

Waking Up in Wisconsin

by David Michael Green

Whodathunkit, eh?

Insignificant, backwater, third world banana republics like Tunisia and Egypt pioneering the way for the greatest superpower and richest country on the planet.

That’s not supposed to happen.

I mean, we pay for a military that costs as much as every other one in the world, combined, even though it can’t win endless wars against insignificant, backwater, third world banana republics.  They can’t say that about their militaries!  We’ve got annual deficits that are bigger than their entire economies.  The size of our economy is half-again bigger than the number two in the world (with one-fourth the population), and we’ve managed to produce a health care system that ranks 39th globally.  Who else can claim that badge of honor?  No doubt that ranking partially explains why our life expectancy figures are lower than just about every country in the developed world.  Our education system, once the envy of the world, is crumbling, along with the size of our college enrollments.  Ditto our infrastructure, much of which hasn’t been maintained in decades.  Who can touch that?  We have the highest polarization of wealth in the entire developed world, and more than any country in the Arab world too.  Sweet!  Another cool thing is our incarceration rate.  It’s 743 per hundred thousand people.  The next highest country has less than half that figure.  Our use of torture and rendition and the remote-controlled aerial bombings of civilians has earned us the scorn and hatred of the world, while our political leaders, unmatched in their capacity for hypocrisy and buffoonery, have made us a laughingstock that few puffy-chested, medal-covered third world dictators can match.  You got Mugabe?  We got Palin.  You got Charles Taylor?  We got George W. Bush, in a democracy no less.

So, with a record like that, who in the world are these punky backwater countries to teach high and mighty America anything about anything?!?!

Darned if it hasn’t happened, though.  I mean, you can say it’s a coincidence if you want, and you may even be right.  But I can’t help thinking that the people of Wisconsin have been inspired by the people of Egypt.  Who were themselves inspired by the people of Tunisia.  Both of whom have inspired the people of Bahrain, Jordan, Iran, Libya, Yemen, Iraq and beyond.  Meanwhile, Wisconsin seems to be inspiring Americans in other states finally to fight back.

It would seem that people power is in the air in early 2011, and that it’s quite contagious.

Whatever is the explanation for the Cheesehead version of Tahrir Square, it is unbelievably welcome, and just barely in time.

It’s crucial to understand what the regressive initiative that our brothers and sisters in Wisconsin are right now fighting is really all about, and how that fits into the context of our era.  This is just the latest, and nearly the last, in a succession of efforts in America over the last three decades to move money from the hands of non-elites to those of oligarchs. Make no mistake, that program constitutes essentially the sum total of American politics at its core over the last generation.  All else is a sideshow or, more likely and more ominously, an intentional diversion, just as a skilled magician is careful to give your eye something else to focus on as he moves the ball from under the cup.

That money-shifting effort has been relentless, and it has been fantastically successful.  We have witnessed the greatest transfer of wealth in human history over this period of time.  More astonishing, here in the twentieth and twenty-first centuries, is that it went the wrong way – from ordinary folk who need the money to wealthy elites, many of whom actually couldn’t even find ways to spend those enormous quantities flooding their accounts if they wanted to.  Most astonishing of all is that this happened in a functioning democracy, where the votes of rip-offees vastly outnumber the votes of rip-offers.  If anyone you meet ever doubts the capacity of human stupidity, tell them this tale.  It’s an amazing story.  It’s also the most significant single fact of American politics in our time. And we don’t even talk about it.

That’s because of the stunning success of the thieves in executing their heist.  As oft-noted, the perfect crime is one that is not even detected.  Welcome to America.

You gotta hand it to these guys.  They have been smart, thorough, ruthless, tenacious, patient and ruthless.  Did I mention ruthless?  They have attacked New Deal America – the set of policies that created a vast middle class for the first time and dramatically improved people’s quality of life en masse – in every way possible, and have managed to beat it into near submission.

They’ve been very clever about it, too.  They fabricated think tanks whose product at any other time would have seemed absurdly laughable.  They created a whole new media for themselves, and intimidated the parts they didn’t outright own.  They dumbed down education, making sure that any knowledge of history or civics or – god forbid – comparative politics was eliminated from the curriculum, thus producing nice, docile worker bees who know just enough to do their ill-paid jobs, but not enough to even know that they’re ill-paid.  They allied with regressive forces like religious institutions, the military and the Republican Party.  Then they bought the Democrats too, not least of which including Bill Clinton and Barack Obama, whose economic policies are fundamentally indistinguishable from the GOP’s.  They infiltrated the courts with corporate hacks so corrupt that they steal elections and sit on cases even when they’ve received contributions from litigants in the matter.  They smashed labor unions at every opportunity.  They drove the country deep into debt with the express purpose of making it then seem that any further social spending was no longer sustainable.  They tore down even the thin veneer of campaign finance reform from the prior era.  They shredded the Constitution and the Bill of Rights, and have bullied any opponents with thuggish acts of verbal and other forms of personal assault.  They made voting more difficult, wrongly purged masses of voters from the rolls, and used rigged machines to steal elections.  They have poisoned the minds of Americans with diversionary bogeymen ranging from Saddam Hussein to marrying gays to the War on Christmas.

And so on.  The complete list is extensive enough to fill the pages of this essay and several more.  The upshot of the story is that there has been a concerted, multipronged attack on a system of political economy that was, when they began, already just about the least fair to working people of any in the developed world, but nevertheless a whole lot more fair than it ever had been previously.  Or is now.

The purpose of all these efforts, however, was always the same, and typically had little to do with culture conflicts, endless Middle Eastern wars, or televised Hannity and Colmes style pissing matches.  It was always about the money.  Always.  It remains about the money today.

That’s why the malignant disease better known as Wisconsin’s Republican Governor Scott Walker is now doing what he is doing.  He claims that the state is broke and that he has no choice but to roll back public sector salaries and benefits.  Everything about that claim is a lie. The state is not nearly as far in the red as other states that are not doing what he is doing.  The state could increase taxes if it wanted to solve its problem, rather than exploiting workers. In fact, the state just got done creating the very deficit Walker claims to be the problem by slashing $177 million from its tax rolls. State employees are underpaid compared to equivalent private sector workers, not overpaid as he claims.  And despite all this, the unions have nevertheless publicly agreed to negotiate givebacks with the Governor.  And so on.

But, of course, the biggest lie of all is the biggest lie of all.  That is that the premise for what he is doing is the pursuit of fiscal rectitude.  Let’s leave aside for the moment the fact that, nationally, the same party that claims to be the party of fiscal responsibility is precisely the gang of folks who got us into the mess we’re in. Of the fourteen trillion dollars or so of current national debt, almost all of it was created under Republican presidents, including the saintly Ronald of Nazareth, who tripled the national debt and started the process of dismantling America’s middle class (with a jaunty smile, of course, so it felt better and was less noticeable). It is true that borrowing has gone up under Barack Obama (who, anyhow, is one of them, not one of us), but how much would that have been the case had he not inherited Bush’s wars, Bush’s ‘defense’ budget, Bush’s non-defense discretionary spending increases, Bush’s unfunded prescription drug bill, Bush’s decimation of incoming federal revenue in the form of tax cuts for the wealthy, Bush’s TARP, and Bush’s recession, the biggest since the Great Depression and therefore requiring massive stimulus spending? To answer that question, just look at what spending looked like on the day Bush was inaugurated.  In fact, he inherited the greatest budget surplus in all of history.

These are the folks who bill themselves as the grownups in the room, the ones who are being responsible, the ones who are slashing social spending because we absolutely have to do so, even while further fattening a military already bloated on useless spending, even while continuing completely unabated lavish corporate welfare programs for Big Oil, Big Ag, Big Pharma and the rest, and even while slashing taxes on the wealthy down to nearly zero, transferring those liabilities to the rest of us.  That’s what the Scott Walkers of this country have been doing in Washington for three decades now.

But even if Governor Walker is not responsible for the lies and destruction of his party at the national level, he is practicing precisely the same behavior in Wisconsin (while, no doubt, licking his chops at his prospects for a subsequent presidential bid, based on making this name for himself at the state level).  This is not about balancing the state budget, anymore than Republicans can be the party of fiscal responsibility anywhere other than in the Alice’s-Wonderland-on-steroid-laced-irradiated-hyper-concentrated-LSD that calls itself America. This is about completing the piracy mission, knocking down one of the last remaining barriers preventing the wholesale transfer of middle class wealth to the oligarchy.  This initiative is entirely about breaking public sector unions.

You can tell that’s true because those provisions in the bill have absolutely zero impact on the state’s budget.  Whether unions have to be recertified every year, whether their dues are collected from paychecks, and whether they can bargain over non-salary issues – none of these factors alter Wisconsin’s fiscal condition by a single penny.  You can tell that’s true because the unions are willing to talk with the governor about givebacks – and thus address the problem he claims the legislation is meant to solve – if he’ll strip out the union-busting language.  And you can tell that’s true because he’s not even slightly interested in their offer.  By refusing to take yes for an answer from the unions on the question that he offers as a pretext for the legislation, he reveals the pretext to be just that.  This is entirely about breaking public sector unions.

It is, once again, clever in its staging.  Having driven the American people to the wall through the use of job-exporting trade policy, unfair taxation policy, wage-undermining private sector union-busting, and budget-busting deficit spending, the Klepto-Plutocracy has now positioned itself quite handsomely for purposes of presenting the next and near-final act in its multi-decade play.  First they put economic pressure on all Americans by shipping jobs overseas.  Then they enact policies that bring on massive levels of state and federal debt.  Then they give us a devastating recession to ratchet up economic insecurity.  Then they make sure the Democratic alternative to the Republican recession-makers is in fact no alternative at all, bringing no relief to workers whatsoever.  This then clears the way, a mere two years later, for a Lazarus-like resuscitation of the nearly-dead recession-creating Republican Party.  But an even worse version this time, sending tea party social spending slasher freaks to Congress and producing aggressive predatory monsters like Chris Christie and Scott Walker at the state level.  Then they argue to a bunch of politically illiterate American voters the all these fat gubmint workers have got it too goddam good, what with their wages that people can sorta actually live off of an’ all.  Worse, these lazy bums are not only living high on the hog, but they’re living high on your nickel, Mr. Taxpayer Moron!  As storms go, that recipe is good for producing a near perfect one in order to crush public sector unions.

We’ll see if it works.  There are reasons not to be hopeful.  Right now, as of this writing, success for the predators requires just one of fourteen Democrats in the state Senate to come in from hiding out-of-state, giving Republicans a quorum, and sealing the deal.  Moreover, Wisconsin – a state that pioneered unemployment insurance, workers’ compensation, the eight hour work week, the weekend, and other triumphs of actual humane treatment for humans, appears to have taken a big deep dive into Lake Stupidity of late.  Once a bastion of progressivism, more lately a purple state, in 2010 it went overwhelmingly Republican, not least by producing the nation’s single most shameful act of that election cycle, the purging of Russ Feingold from the US Senate.

But there are also reasons to be hopeful, too.  It seems that this may just be the Basta! moment for middle class Wisconsinites sick of being ground into poverty.  Every day, the crowds of demonstrators grow larger, at last count up to 70,000.  They seem really pissed off.  When was the last time we saw this?

And maybe this is the Basta! moment for the country, too.  Maybe people have finally had Enough! not just in Wisconsin, but elsewhere too.  Already there are similar reactions in other states, as other Republicans attempt the same fiscal coup strategy.

Altogether, it may not be hyperbolic to say that Wisconsin’s fate is the country’s fate.  If the thieves win, it will empower and encourage thieves nationally.  If the people win, that victory may produce a Tunisia effect, getting folks to realize, as Egyptians did, that you’re really only captive to the power of thugs for precisely as long as you believe yourself to be captive to the power of thugs.

This could be the first step of an American awakening.  But even if it does occur, it will only be the first step.  There is so much more to be done.  Most of the initial work is purely in the domain of framing.  People need to understand what Warren Buffett understands, that there has been a class war going on for three decades now, and that his team is winning.  People need to understand that all the other nonsense that forms the content of American politics is diversionary bullshit.  People need to understand that, yes, American exceptionalism is alive and well in 2011, only it is alive and well in how poorly the country does on almost every measure of quality of life.  Especially compared to those horrid socialists in Europe and elsewhere, who suffer every day under the crushing burdens of better health, longer life, higher quality education, more equal distribution of wealth, better working conditions, less crime, less stress, less war and more happiness.

From there, once the Zeitgeist is changed, the policy changes can fall like dominos.  It’s not that hard to figure what to do.  We had it mostly right before the Reagan Era began.  2011 is not 1981, so some things will have to change, but most will not.  You either provide Social Security or you don’t.  You either protect worker safety or you don’t.  You either respect unions and the environment or not.  You either protect people’s civil rights or you don’t.

Things can also get better than they were thirty years ago.  We never had a national health care system, and we still don’t.  The one we’re slated to get in 2014 is lame, brought to us by our fake-progressive DINO corporate shill of a president.  We can do lots better.  Ditto on taxation, spending, industrial policy, workers rights and benefits, foreign policy and so on.  The great news about the multi-headed, cataclysmic, across-the-board disaster of policymaking in the United States today is that it leaves you plenty of room for improvement.  It will be a long time before we run out of ideas for how to make things better here in Ronald Reagan’s America.

I don’t know if this is finally the moment when America wakes up and turns the corner to emerge from this long national nightmare.  That’s probably too much to ask when tea party Republicans dominate the Congress, a faux Democratic president, just like the last one, does the bidding of the national oligarchy, and not a single prominent political figure is out there pitching the narrative that would help Americans to understand who their real enemies are.

On the other hand, who could have imagined a month or two ago that the thirty year-old Mubarak dictatorship would be swept away over the period of a couple of weeks, and with minimal bloodshed to boot?

If that can happen, anything can happen.

Wake up, America!

On, Wisconsin.

David Michael Green is a professor of political science at Hofstra University in New York. He is delighted to receive readers’ reactions to his articles (mailto:dmg@regressiveantidote.net), but regrets that time constraints do not always allow him to respond. More of his work can be found at his website, www.regressiveantidote.net.

The New York Post

Likely Republican presidential candidate Mitt Romney has been out on the pre-campaign trail this month saying he is the man to get Americans back to work, despite a spotty jobs record while on Wall Street.

However, the former private equity firm chief’s fortune — which has funded his political ambitions from the Massachusetts statehouse to his unsuccessful run for the White House in 2008 — was made on the backs of companies that ultimately collapsed, putting thousands of ordinary Americans out on the street. That truth if it becomes widely known could become costly to Romney, who, while making the media rounds recently, told CNN’s Piers Morgan that “People in America want to know who can get 15 million people back to work,” implying he was that person.

Romney’s private equity firm, Bain Capital, bought companies and often increased short-term earnings so those businesses could then borrow enormous amounts of money. That borrowed money was used to pay Bain dividends. Then those businesses needed to maintain that high level of earnings to pay their debts.

Romney in 2007 told the New York Times he had nothing to do with taking dividends from two companies that later went bankrupt, and that one should not take a distribution from a business that put the company at risk.

Yet Geoffrey Rehnert, who helped start Bain Capital and is now co-CEO of the private equity firm The Audax Group, told me for my Penguin book, “The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy,” that Romney owned a controlling stake in Bain Capital between approximately 1992 and 2001. The firm under his watch took such risks, time and time again.

Bain and Goldman Sachs, for example, put $85 million down in a $415 million 1994 leveraged buyout of Baxter International’s medical testing division (renamed Dade Behring), which sold machines and reagents to labs.

Former Dade CEO Scott Garrett, who managed the business for the first few years after the takeover, said Romney “was far more in tune with what was going on throughout his firm, and even the portfolio companies, than you might expect.”

Bain reduced Dade’s research and development spending to 6 to 7 percent of sales, while its peers allocated between 10 and 15 percent. Dade in June 1999 used the savings as part of the basis to borrow $421 million. Dade then turned around and used $365 million from the loan to buy shares from its owners, giving them a 4.3 times return on their investment.

A Dade executive, who requested anonymity, said he confronted new CEO Steven Barnes after a boardroom meeting within a week of the distribution.

“You really think it’s a good idea to borrow, you know, one times sales?” he asked.

“Oh. Yeah. Yeah. You know, that’s fine,” Barnes responded. “You know companies do that all the time.”

The executive then told Barnes, “Well, that’d be like me going out and borrowing the amount of money I make in a year and then trying to pay it off and pay for my house and feed myself and everything else. That doesn’t make sense.” The executive said he let it drop after that.

In August 2002, Dade filed for bankruptcy.

This was not an isolated case.

* Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-’90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.

* Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.

* Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.

* Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.

Romney’s Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.

While I have not investigated all of Romney’s Bain investments and there may be cases where he made money and improved businesses, there’s little question he made a fortune from businesses he helped destroy.

Mitt Romney, through his spokesman, did not return calls. Bain declined comment.

Bain of his existence

Romney said:

He was not involved in decisions to take distributions from two Bain Capital businesses that later failed. New York Times, June 3, 2007

“People in America want to know who can get 15 million people back to work.”

Romney did:

Owned a controlling interest in Bain Capital when it took payments from five companies that later failed.

Made fortunes by bankrupting five profitable businesses that ended up firing thousands of workers.

Read more: http://www.nypost.com/p/news/business/ad_mitt_mistakes_jRmd2LHaPIb0bbNn1ZkgaJ#ixzz1EeDPm38F

The Utah Legislature has a history of starving public schools and then criticizing them for failures. Bills in the current session would label struggling schools with D or F grades but offer no resources to help them improve and would funnel scarce public funds to private online schools.

Thus, legislators continue to encourage parents to abandon traditional public schools for private or charter schools. Obviously, despite the resounding defeat in 2007 of a voucher law that would have sent public money to private schools, the Legislature has not given up that battle.

In Senate Bill 65, Sen. Howard Stephenson would set up a statewide online education program that would direct taxpayer money to private providers of online courses. It has passed the Senate.

Sen. Wayne L. Niederhauser and Rep. Greg Hughes are sponsoring a bill to have public schools graded, based on statewide assessments, and for high schools, the graduation rate. They are modeling this legislation on a similar program in Florida. It would provide parents with information to justify abandoning those schools.

That is the Republican agenda–do away with government! And the biggest part of local government is public education! And it has been systematically dismantled by the Republican legislature for the past two decades. If we keep electing them the demise of public education is inevitable. The for-profit scavengers are already groveling up the pieces, hawking their wares and wiles without any regulation. They make glorious offers and promises and leave their innocent, gullible students drowning in debt.

This might be useful, provided that, once these struggling schools are identified, they at least can plead their case for funding to implement remedial courses or in other ways improve. Florida, after all, offers financial incentives to schools. Florida also has a constitutional amendment limiting class sizes. In Utah teachers must deal with the largest class sizes in the nation.

Florida also spends nearly twice as much per student on education as Utah, which sits dead last in that category. If we’re looking at Florida as a model, let’s start with financial commitment.

Legislators know that Utahns are devoted to their neighborhood public schools, and so, during election campaigns, candidates proclaim they are pro-education. But what many of them mean is that they support education only as long as educators and school officials do as the Legislature demands.

Thus we get a proposed constitutional amendment to take the election of Utah State Board of Education members away from voters and put the board under control of the governor and state Senate. Then there are bills that dictate the smallest details of school curriculum, such as mandating that schools teach that the United States is a republic, not a democracy, and requiring “civic and character” education.

Legislators’ penchant for micro-managing education and undermining public schools is not the way to help Utah’s youth prepare for jobs and help Utah prepare for the future.

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© 2011 The Salt Lake Tribune

The Salt Lake Tribune

Published: February 19, 2011 10:53PM

Harris Simmons doesn’t want to express an opinion about the $8 million civil fine federal regulators recently levied against Zions Bank for serious deficiencies in its Bank Secrecy Act and anti-money laundering controls.

But there are a few things that Simmons, chairman of parent company Zions Bancorp, wants shareholders and customers of the biggest home-grown financial institution in Utah to know.

Zions takes its obligation to comply with federal banking laws seriously, Simmons said in an interview.

He also wants to say that the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network didn’t find evidence of any illegal money transfers, only that there were lapses in Zion’s compliance.

“We spend millions a year, [and] we have at last count 90 people working full time on this kind of compliance. They are monitoring about half a billion transactions year worth about $8 trillion,” he said.

Like other financial institutions, Zions is required to report suspicious money transactions to the government within 30 days. The Financial Crimes Enforcement Network, a Treasury Department agency that fights money laundering, said Zions failed to file on time 132 reports representing $12.3 billion in suspicious activity during 2006 and 2007.

The implication of FinCEN’s claim surely annoys the banking company. It thinks the allegation unfairly implies that Zions transferred $12.3 billion in ill-gotten funds into the foreign accounts of shady characters.

“The billions of dollars reported, from our point of view, constitute the haystack, and not the needles that might be in it. If it was illegal activity, it wasn’t $12 billion. It would have been in the context of that volume of business,” Harris said.

It isn’t clear how egregious Zions lapses were. Officials from the OCC and FinCEN refused to talk in detail beyond the documents their agencies released earlier this month.

“Frankly, we are not in the business of beating people over their heads. We are here to help financial institutions identify where there is money laundering, or possible fraud,” FinCEN spokesman Bill Grassano said.

Even so, cases such as Zions’ aren’t common, he said. The largest fine FinCEN ever levied was against Wachovia Bank. In March 2010, the Wells Fargo subsidiary was ordered to pay $110 million after investigations by the Internal Revenue Service, the Drug Enforcement Agency, FinCEN and the OCC.

The allegations against Zions appear to be an aberration, even though two other smaller fines were levied against units of the bank last August. The Financial Industry Regulatory Authority fined Zions Direct $225,000 for failing to disclose to customers that an affiliate, Liquid Asset Management, participated in bidding during CD auctions. FINRA found that some auctions could have yielded higher rates of interest if the affiliate hadn’t taken part.

A week earlier, the affiliate was fined $50,000 by the Utah Securities Division for conducting business without proper licenses.

Despite those improprieties, Zions has been praised by federal law enforcement officials for the bank’s role in stopping criminal financial activity.

In 2005, a federal grand jury handed up indictments against 15 people in Utah and Colombia, charging them with a money-laundering scheme to convert U.S. dollars made through drug sales in Colombia to pesos.

The defendants allegedly laundered $1.45 million through three banks in Florida and Utah. One of the banks was Zions, which was singled out for praise by Paul Warner, then U.S. attorney, who brought the charges. Zions was “extremely cooperative,” he said, adding the bank brought the alleged conduct to the attention of law enforcement.

So far, the allegations and fine announced earlier this month haven’t had any discernible effect on Zions. Gary Tenner, a securities analyst at D.A. Davidson and Co. in Portland, said the fine amounts to an $8 million slap on the wrist.

“These things happen. They aren’t the first bank to have a violation of the Bank Secrecy Act.”

“For investors, the bigger issue is, would this have an impact on their business going forward, and because it probably won’t, I don’t think investors are too concerned.”

Shareholder reactions to events such as a fine tend to unfold over time, experts say. That’s because investor options are limited. They can dump shares, sue the company and its officers, or vote for change at the company’s annual meeting.

There may be some discussion at the next Zions meeting with shareholders this spring. “It’s another wake-up call to a sleepy board of directors that needs to be kept awake, with the problems and challenges facing Zions,” said Gerald Armstrong, an activist who owns 896 Zions shares.

Armstrong wasn’t aware of the fine until told by a reporter. Although he is often dismissed as a nuisance by officers of the public companies in which he invests, Armstrong is often sought for comment by the media.

A Zions shareholder since 1971, he is no Johnny-come-lately. Armstrong regularly attends Zions meetings, and intends to bring up the fine at the next gathering.

“I recommend a ‘claw-back’ of the $8 million fine from the officers, directors and auditors,” Armstrong said, asserting that the fine is not tax-deductible, and therefore hurts shareholders who have already been hurt by nine consecutive quarterly losses.

Claw-back is a term that became popular during the financial crisis. It was used as a threat by which the government would take the bonuses paid to Wall Street executives before the meltdown.

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© 2011 The Salt Lake Tribune

The Salt Lake Tribune

Published: February 20, 2011 12:05AM

(First in a three-part series on multi-level marketing firms in Utah. Once again we can count on the Tribune to tackle the important issues of the day. This will be a great service to Utahns who are quite conflicted about the business models of multi-level companies.)

MonaVie CEO Dallin Larsen took the stage in Orlando, Fla., last month and got to work.

He extolled riches to be earned. He shed tears over a little girl’s cancer. He evangelized about his company’s exotic fruit juice.

MonaVie, Larsen said, is building toward $20 billion in annual sales of its products based on a berry from the Amazon jungle.

His audience of independent distributors responded with episodes of wild cheers.

Attending conferences such as the Orlando event in January and one coming in June in Salt Lake City is like “going to church, going to temple,” Larsen said. He exhorted the distributors to put in 10,000 hours building their own independent businesses by recruiting others into their networks, saying, “No longer can you make an excuse. It’s up to you.”

“We’re locked and loaded,” he told the crowd. “We’re ready for the next 100 millionaires.”

To outsiders, events such as this have all the feel of a cult, the true believers cheering as men and women dangle promises of wealth, spiritual well-being, personal health, family togetherness and happiness through the medium of fruit juice.

Cultish though it may seem, the marketing of nutritional products through networks of independent distributors is big business, and perhaps nowhere more so than in Utah, notwithstanding fervent criticism of some of its practices.

“This is the hub of direct selling in America,” said Aaron Garrity, CEO of XanGo, the colorful Lehi company that, like MonaVie, sells a juice through a multilevel marketing plan, also known as direct selling or network marketing.

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Sons of the profits • Utah has at least nine major multilevel marketing (MLM) companies selling nutritional and body-care products that have more than $100 million in annual sales, according to Direct Selling News, a trade publication. The annual revenue of those nine add up to at least $4.49 billion, but Utah also has a number of smaller companies that are part of its nutritional supplements industry, which in total are a key component of the state’s economy.

The industry as a whole sees about $6.2 billion to $6.5 billion in annual sales, according to Loren Israelsen, executive director of the United Natural Products Alliance, a national industry trade group based in Salt Lake City. But he said the economic impact to the state is much broader if you include all of the providers of products and services, plus events such as the companies’ annual conventions.

“If you really throw everything in and just ballpark it for the economic impact on the state, I think it gets pretty close to $10 billion,” Israelsen said. “As best we can tell, behind tourism we’re the biggest industry.”

It’s the juice segment, though, that attracts the most attention lately, with flashy marketing and legions of independent distributors who earn commissions by recruiting others into their networks.

Critics say multilevel marketing and the companies’ controversial products by their very nature raise troubling questions. Are they creating a voodoo economy built on a veneer of science that makes spurious claims about the health benefits of fruit juices and about the riches that supposedly can be earned by distributors?

“Not only does it hurt our reputation as a state, it continues to perpetuate the problem because the younger generation sees too many people who make a quick buck from what turns out to be houses of cards,” said Josh James, the co-founder and former CEO of Omniture, one of the state’s most successful technology companies.

“The perception of get-rich-quick hurts their careers, prevents some people from being willing to put in a hard day of work to develop experience, and in many cases dramatically alters a family’s financial condition negatively.”

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The lure of ‘healthful living’ • In mid-2010, Utah’s pharmaceutical and medicine manufacturing industry encompassed 4,737 jobs and 79 businesses. That economic statistical area is a “fairly accurate proxy” for the nutritional supplements industry, according to the Utah Department of Workforce Services.

Israelsen said the industry employs about 15,000 people in 150 to 160 companies when related businesses and services are included.

He traces the start of the industry in Utah to John Christopher of Springville, who wrote and lectured on the healing properties of herbs in the mid-20th century. His specific ideas about healthy diets fit nicely with the Mormon Word of Wisdom, which promotes the use of herbs in healthful living.

Christopher extolled “a style of healthful living that was quite resonant with Mormon culture,” Israelsen said.

The Utah nutritional industry got going in the late 1950s and early ’60s with four companies — Nature’s Way of Springville; Nature’s Sunshine Products in Spanish Fork; Nature’s Herbs, which is now part of IdeaSphere of American Fork; and Solaray, which is now part of Nutraceutical Corp. of Park City.

Those four started with what Israelsen calls the “classic story,” a family member with an illness who finds an herb or other natural product that helps alleviate the condition and then goes on to create a product to help others.

Nature’s Sunshine Products was Utah’s first MLM, following in the steps of Amway, the New York company that started in 1959.

MLMs recruit networks of independent distributors, sometimes called networkers, to buy their products. Distributors are told they are independent business operators who can build their enterprises by recruiting other distributors who are placed in their downlines, with commissions from sales to distributors moving up through various levels.

From a business standpoint, the use of multilevel marketing instead of selling products through established retail outlets has certain advantages. Start-up costs are low and marketing expenses minimal.

“We chose network marketing rather than a traditional way because there was a story to be told and that story needed more than a 30-second spot,” said John Wadsworth, co-founder and president of Tahitian Noni, the first MLM with a nutritional juice product. He also said that in founding the company in 1996, he and partners went the MLM route because they ran out of money.

The growth of such companies in Utah also came from two other factors, emulation of a successful enterprise and the presence of former LDS missionaries, said Clint McKinlay, a former executive turned distributorwho is now an industry consultant.

“One answer to why Utah is simply Nu Skin,” he said, referring to one of the oldest and most successful companies. “They were big, they were successful and a lot people work there.”

Network marketing companies also do well in other countries, creating a need for foreign language speakers, and Utah has a concentration of former missionaries sent around the world by The Church of Jesus Christ of Latter-day Saints, which has its headquarters in Salt Lake City.

Plus, McKinlay said, MLM companies rely on intricate charts of distributors related through downlines, a task Mormons understand because of the faith’s emphasis on charting ancestors through genealogy and creating communities of believers.

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A cutthroat industry • Tahitian Noni invented the nutritional “super fruit” juice drink and had the first wild success that spawned a number of imitators.

Wadsworth said while working as a scientist for other food companies, he discovered possible medicinal properties in the noni fruit from Tahiti, and that he and others created the product and the company.

The MLM was highly successful. One employee was Garrity, who left to help form XanGo, whose juice is based on the mangosteen fruit from Southeast Asia.

Morinda, Tahitian Noni’s parent company, sued Garrity and the other five XanGo founders in 2003, claiming they stole the concept for a juice based on mangosteen. The case was settled out of court in 2006 and its contents sealed.

XanGo, with its name, flashy logos, use of technology and hip marketing, brought multilevel marketing some respectability, McKinlay said.

“They made network marketing cool.”

Larsen, a former vice president at Usana Health Sciences, one of the state’s top MLMs, launched MonaVie in 2005 along with other co-founders, their juice based on the açai berry found in the Amazon jungle of Brazil. The company claims $2 billion in sales since its launch, though it is privately held and the number can’t be verified.

What’s clear from court records, though, is that MonaVie was built by using million-dollar payments to woo top distributors away from other companies, including Tahitian Noni, XanGo and Amway. The practice has spawned lawsuits against MonaVie and distributors who have left other companies.

“MonaVie does have a reputation out there that they’ve tried to build their business by trying to steal downlines from other businesses,” said Andre Peterson, Tahitian Noni director of public relations.

In an interview last year, Larsen defended the company’s practices.

“I believe when a distributor believes his or hers dreams and goals are going to be better served going to this company or that company they ought to have a right,” he said.

While not naming other companies, Tahitian Noni’s Wadsworth also complained that those who entered the business after his company have done so not on the quality of their products.

“They are very good at marketing, they just don’t have the science we have,” he said.

For his part, Garrity, a recognized marketing innovator in the industry, said in an interview last year the industry had become moribund by the time he helped found XanGo.

“I found in the industry the companies would actually spend more on the actual contents of the products and pay less attention to the brand,” he said.

—

Outsized profits • Garrity and others in the business have made themselves quite wealthy.

Court documents in a lawsuit by several original investors showed that for tax purposes in 2006 alone, Garrity’s share of XanGo’s profits was $6.3 million, with the company showing taxable income of $36.7 million.

Although MonaVie won’t disclose its profits, co-founder Henry Marsh, a former Olympic steeplechase runner, said they are similar throughout the industry with those of publicly traded companies that must report their financial data to the Securities and Exchange Commission. Nu Skin said in its annual report for 2010 it had $1.5 billion in revenue and a net income of $136 million. Usana Health Sciences reported $436 million in sales revenue in 2009, with $33.5 million in net income.

If MonaVie had $2 billion in sales since its founding, then, according to those industry numbers, its profits might be somewhere around $160 million.

—

A healthy skepticism • Whatever the numbers, the MLM juice industry is controversial among critics and skeptics because:

• Distributors provide almost all the revenue to the companies, not retail sales from consumers.

• The companies hold out images of riches to be had if the distributors work hard and build their own businesses. But only a tiny fraction make millions and more than 90 percent in some companies make little or no return on their investments in products, time, training materials and other expenditures needed to recruit downlines. Average turnover is 56 percent annually, according to the Direct Selling Association.

• The companies clothe their products in the veneer of science, citing studies that show their ingredients or juices have qualities that make them potent health-promoting foods. Yet their health benefits remain largely unproven. There is no way to definitively judge whether one product is more authentic than another, let alone more effective, food scientists and nutritionists say.

• The products are expensive ­— $30 or more wholesale for less than a quart of their fruit juice — that may not in some cases be better for you than fruit juice from a retail outlet at a fraction of the price.

—

Good for Utah? • All of that has led some in Utah to question whether the state is well served by having such a concentration of high-profile MLMs.

To measure the social worth of an enterprise, Greg Warnock, a co-founder of Mercato Partners, points to “value engineering,” in which a product or service meets a need or solves an important problem. His company provides capital primarily in the technology sector.

“Some companies generate short-term profits through sales tactics and complex and recursive incentive plans,” Warnock said in an e-mail. “Utahns should be concerned about businesses that use extraordinarily high-pressure sales strategies, that approach those less able to protect themselves from aggressive or manipulative ‘get rich quick’ sales conversations in the home.”

Although James, the Omniture co-founder, pointed to companies such as Nu Skin that he believes sell legitimate products, he added: “Selling a product that doesn’t deliver or that has too much hand waving by paid PhDs and MDs purporting to have some previously undiscovered beneficial effects isn’t right. Making money off of signing up people for MLM companies that don’t have any real products to sell or that make big commissions off of forced product purchases, even though there is a low historical success rate of reselling those back into the market, is not right.”

—

A growing ‘juice fatigue’ • According to industry insiders, juice MLM revenue has fallen — quite sharply in some cases — from its tremendous highs a few years ago. MonaVie reported $855 million in revenue in 2008, which landed it third in total revenue on Inc. magazine’s list of 500 of the nation’s fastest-growing private companies. It did not make the 2010 list.

Devin Thorpe, chief financial officer, said the company started to grow again in the second half of 2010 but that it would not disclose its 2009 or 2010 revenues.

McKinlay, the consultant, said there’s a bit of “juice fatigue” in the marketplace because of the proliferation of those companies and their products, a notion MonaVie President Dell Brown pooh-poohed as “akin to a top cola company worrying about ‘soda pop fatigue.’ ’’

XanGo said that although it had not been immune to the effects of the recession, its international business was offsetting a slow domestic market and that it remained “strong and profitable.” The number of its distributors was expanding and it had signed “several big names in network marketing” without using signing bonuses, the company said.

The companies and their officers remain true believers, in themselves and their products.

In Orlando last month, Larsen closed the meeting by urging the distributors to buy their tickets for the MonaVie convention in June in Salt Lake City.

“Three to five years from now, there’s not a person in this room who can’t have worldwide MonaVie business,” he said.

—

tharvey@sltrib.com

—

The big nine: Utah’s top multilevel marketing companies

Multilevel marketing companies in Utah that have at least $100 million in revenue in 2009 are:

Nu Skin Enterprises Inc.

Annual revenue • $1.5 billion

Distributors • More than 794,000

Employees • 3,400

Headquarters • Provo

MonaVie LLC

Annual revenue • $785 million

Distributors • 1 million

Employees • 80 (2010)

Headquarters • South Jordan

Tahitian Noni International Inc.

Annual revenue • $450 million

Distributors • 500,000

Employees • 1,200

Headquarters • Provo

Usana Health Sciences

Annual revenue • $437 million

Distributors • 198,000

Employees • 930

Headquarters •West Valley City

Neways Inc.

Annual Revenue • $400 million

Distributors • 500,000

Employees • 1,000

Headquarters • Springville

Nature’s Sunshine

Annual Revenue • $343 million

Distributors • 697,000

Employees • 1,191

Headquarters • Provo

XanGo LLC

Annual Revenue • $250 million

Distributors • 1.4 million

Employees • 450

Headquarters • Lehi

Figures are for 2009

Agel Enterprises LLC

Annual Revenue • $175 million

Distributors • 554,000

Employees • 250

Headquarters • Lehi

4Life Research

Annual Revenue • $150 million

Distributors • Not available

Employees • 300

Headquarters •Sandy

—

Source: Direct Selling News, SEC reports

The big nine: Utah’s top multilevel marketing companies

Multilevel marketing companies in Utah that had at least $100 million in revenue in 2009 were:

Nu Skin Enterprises Inc.

Annual revenue • $1.5 billion

Distributors • More than 794,000

Employees • 3,400

Headquarters • Provo

MonaVie LLC

Annual revenue • $785 million

Distributors • 1 million

Employees • 380 (2010)

Headquarters • South Jordan

Tahitian Noni International Inc.

Annual revenue • $450 million

Distributors • 500,000

Employees • 1,200

Headquarters •  Provo

Usana Health Sciences

Annual revenue •$437 million

Distributors • 198,000

Employees • 930

Headquarters •  West Valley City

Neways Inc.

Annual Revenue •$400 million

Distributors • 500,000

Employees • 1,000

Headquarters • Springville

Nature’s Sunshine

Annual Revenue •$343 million

Distributors • 697,000

Employees • 1,191

Headquarters • Provo

XanGo LLC

Annual Revenue • $250 million

Distributors • 1.4 million

Employees • 450

Headquarters •Lehi

Figures are for 2009

Agel Enterprises LLC

Annual Revenue •$175 million

Distributors • 554,000

Employees • 250

Headquarters • Lehi

4Life Research

Annual Revenue •$150 million

Distributors • Not available

Employees • 300

Headquarters • Sandy

Source • Direct Selling News, SEC reports

——————————————————————————–
© 2011 The Salt Lake T

Below is the pathetic offering provided as a supposed news story by The Deseret News regarding the charges and fines of $8 million against Zions Bank for ‘money laundering.’ The story came two days after the public announcement of the fines by two government agencies and a front page major headline and detailed story in the Salt Lake Tribune.

The close ties to Zions Bank by both the LDS Church and The Deseret News are well known, and for the sake of journalistic integrity one would think that the Deseret News would have made a better effort to cover the issue objectively. But NO, it tried to hide it and tried to downplay it, and in the process showed that the new ‘corporatized’ de-journalized Deseret News is apparently going to rely on ‘faith-based’ reporting out of the same mold the church deals with its own history.

(The extensive reporting of the case by the Salt Lake Tribune is posted elsewhere on this blog.)

The Deseret News Headline

Zions Bank fined $8M in lax wire transfers case
By Chi-chi Zhang
Associated Press

Published: Monday, Feb. 14, 2011 3:57 p.m. MST
SALT LAKE CITY — Utah-based Zions Bank has agreed to pay $8 million to settle allegations it failed to monitor billions of dollars’ worth of illegal wire transfers.

The federal Office of the Comptroller of the Currency said Monday the violations occurred in 2006 and 2007, when the bank opened a new wire transfer business but failed to meet anti-money laundering regulations.

The Financial Crimes Enforcement Network cooperated in the investigation. It says Zions failed to report 132 cases of suspicious activity worth about $12.3 billion in transactions that it says may have involved drug trafficking accounts.

Zions hasn’t acknowledged or denied the allegations.

The bank has offices in 10 Western U.S. states. It closed its foreign correspondent banking business in 2008 and has agreed to pay an $8 million lump sum penalty fee.

That’s all folks. We got five paragraphs from the Deseret News downplaying the potential laundering of $12.3 billion dollars. Because of rules and regulations regarding banking and because a couple of federal agencies actually performed their public duty we now know that Zions Bank was involved in at least 132 transactions (potential money laundering) in amounts that totalled $12.3 billion dollars.

What the public still doesn’t know, and good journalism should pursue it, is who sent what to whom and for what purpose? These numbers are so big that most of us don’t take the time to do the math. We just know it’s a helluva lot of money. Also, the public may be able to put together the pieces a lot better than a few regulators who don’t understand the connections between names and entities. Names please! Who are these guys?

Let’s do the math—132 transactions totalling $12.3 billion amounts to nearly $100,000,000 each transaction. Now, this isn’t small potatoes. Who is transferring that kind of money to whom and for what purpose? Why was the Deseret News so slow to announce the story? Why did it choose to make it appear like just another two-bit fine? If all this money was legitimate church business then fine, we would at least know that it was baptized instead of laundered.

Why were these rules and regulations put in place? To help track possible drug money, and to reduce the possibility of enormous amounts of tax evasion, and possibly to get around campaign finance laws!

The Salt Lake Tribune

Published: February 12, 2011 09:15AM

Two federal agencies have slapped Zions Bank with multimillion-dollar civil penalties for failing to monitor suspicious wire transfers of billions of dollars related to transactions that may have involved drug trafficking and other crimes.

The Office of the Comptroller of the Currency on Friday said it imposed an $8 million penalty against Zions for shortcomings in its anti-money laundering controls — violations of the Bank Secrecy Act and the USA Patriot Act.

Oh these damnable regulations! They are such a nuisance. How can we hide money laundering if we have to be regulated? Well, maybe the regulators will be asleep at the switch. Maybe the regulators will be understaffed and not get around to us. Maybe our political contributions will keep us out of jail! Maybe our white shirts and ties and memberships in all the right clubs and churches will throw them off the track! This is our business and it is none of their business. Why do we have to put up with these intrusions of government? Don’t they know our God is Laissez Faire and we don’t want anyone messin’ around with our religion.

We’ve got to get rid of Obama! This wouldn’t have happened under Bush. We could have whitewashed it easy with a call to Hatch. Hell, even Matheson has no influence with Obama. Here in Utah we are defenseless because we’ve put all our eggs in the Republican basket. That money we gave to them has gone right down a rat hole.

Oh well, we will just have to increase our fees and bounce more checks that will cause other checks to bounce and we can bounce that merry-go round back to profitability. We can recover this in a matter of weeks, but damn, we’re going to have to be careful not to bounce the wrong checks. We wouldn’t want to bounce our next TARP check.

It’s too damn bad we’ve got the Tribune in town or we could cover this up in a minute. We thought we had that covered when we arranged for Singleton to buy the Trib, but damn, he couldn’t control his staff. This free press stuff is sure a nuisance. We need to do something about that, but this internet stuff is getting pretty scary. Look what it did in Egypt. We don’t have a chance. Perhaps the jig is up!

The Financial Crimes Enforcement Network — a Treasury Department agency involved in fighting money laundering — also fined Salt Lake City-based Zions $8 million but said the government would be satisfied by a single payment of $8 million.

“The bank is supposed to file suspicious activity reports if they find suspicious activity, and the bank failed to file those on a timely basis,” OCC spokesman Dick DeBuck said.

“The regulations also require the bank to monitor this wire activity, and the bank did not do that, either.”

Zions did not admit or deny the allegations spelled out in separate documents issued by the OCC and the Financial Crimes Network.

In a statement, CEO Scott Anderson said the bank takes “very seriously our obligations to comply with federal laws and regulations, including the Bank Secrecy Act.”

Anderson said Zions has closed down the business unit handling the money transfers and has been cooperating fully with regulators.

“Over the past three years, we have employed considerable resources bankwide to significantly enhance our systems designed to detect and report potentially suspicious activities,” Anderson said in the statement.

The OCC said Zions had developed a “remote deposit capture product” that allowed customers to deposit imaged financial documents such as checks into accounts in Mexico and other countries from “remote” locations, ostensibly in the United States.

The product was marketed to “high-risk customers” in 2006 and 2007 “without sufficient regard to (Bank Secrecy and Patriot Act) compliance implications,” the OCC said.

The Financial Crimes Network said Zions failed to report 132 cases of suspicious activity that represented more than $12.3 billion.

“These suspicious activities involved, among other things, sequentially numbered travelers checks, possible black market peso exchange, transactions involving entities and accounts alleged to have been involved in drug trafficking activities and unusual wire transfers,” the Financial Crimes Network said in a document released Thursday.

The agency said Zions processed money transfers that indicated patterns commonly associated with money-laundering, such as the nature of the business, originators and beneficiaries in “high-risk” locations and lacked any apparent business or legal purpose.

This article that you are reading now appeared in the Salt Lake Tribune on February 12th. The Deseret News did not report on the violations although the two government agencies made a public announcement of the fines.

Now, two days later, the Deseret News published the following report which is astonishing in its downplay of the violations and fines. There is no detail offered, and infers that Zions Bank didn’t agree with the fines. It was as if Zions made a clerical error and it has been corrected. It was a bizarre take on the situation.

DeBuck said the OCC discovered the violations during examinations of the bank. But an OCC statement said the bank later conducted a voluntary assessment of its “foreign correspondent business” after shutting down the unit. Zions then reported suspicious activity to the agency.

According to the Financial Crimes Network, Zions filed 20 reports of suspicious activity after the review. The transactions involved in the activity totaled $11.5 billion, according to the network.

“With these actions, we are sending another strong message that banks need to be vigilant and ensure that they have effective anti-money laundering programs in place,” John Walsh, the OCC’s acting director, said.

pbeebe@sltrib.com

© 2011 The Salt Lake Tribune

A killer agency: The invisible victims of the FDA’s slow processes

Published: Friday, Feb. 11, 2011 12:00 a.m. MST

Sam Kazman’s “Drug Approvals and Deadly Delays” article in the Journal of American Physicians and Surgeons (Winter 2010), tells a story about how the U.S. Food and Drug Administration’s policies have led to the deaths of tens of thousands of Americans. Let’s look at how it happens.

During the FDA’s drug approval process, it confronts the possibility of two errors. If the FDA approves a drug that turns out to have unanticipated, dangerous side effects, people will suffer. Similarly, if the FDA denies or delays the marketing of a perfectly safe and beneficial drug, people will also suffer. Both errors cause medical harm.

This column by very conservative columnist Walter Williams provides a good example of the continual tug-of-war between the values of regulation and deregulation. It is always a constant battle between the rigid regulationists and the extremist deregulationists. The ultimate goal should be to arrive at the perfect center, where there is not too much regulation that destroys initiative and yet there is enough regulation to protect the public.

It is a challenge not only within the Food and Drug Administration, but that tug-and-pull exists in every regulatory agency.

There are extremes on both sides of the regulation philosophy and generally speaking we have arrived at the sensible middle in most cases. The agencies go through swings when extremely conservative presidents like George W. Bush stacked all the agencies with ultra-deregulationists and opened the floodgates of laissez faire philosophy in all aspects of government.

Forming an opinion of this column by Williams will give you a hint about where you stand on the political spectrum.

Watts Cookin’ stands firmly on the side of protecting the public from the crass profit motive that puts the public at serious risk.The profit motive must have checks and balances. There are simply too many charlatans that the prey on the public for profit, and many of them hide behind the protection of public and private corporations that seem to be immune from criminal prosecution.

Kazman argues that from a political point of view, there’s a huge difference between the errors. People who are injured by incorrectly approved drugs will know that they are victims of FDA mistakes. Their suffering makes headlines. FDA officials face unfavorable publicity and perhaps congressional hearings.

It’s an entirely different story for victims of incorrect FDA drug delays or denials. These victims are people who are prevented access to drugs that could have helped them. Their suffering or death is seen as reflecting the state of medicine rather than the status of an FDA drug application. Their doctor simply tells them there’s nothing more that can be done to help them.

Beta-blockers reduce the risks of secondary heart attacks and were widely used in Europe during the mid-’70s. The FDA imposed a moratorium on beta-blocker approvals in the U.S. because of the drug’s carcinogenicity in animals. Finally, in 1981, FDA approved the first such drug, boasting that it might save up to 17,000 lives per year. That meant as many as 100,000 people might have died from secondary heart attacks waiting for FDA approval.

In the early 1990s, it took the FDA more than three years to approve interleukin-2 as the first therapy for advanced kidney cancer. By the time the FDA approved the drug, it was available in nine European countries. The FDA was worried about the drug’s toxicity that resulted in the death of 5 percent of those who took it during testing trials. This concern obscures the fact that metastatic kidney cancer has the effect of killing 100 percent of its victims.

Kazman says that if we estimate that interleukin-2 would have helped 10 percent of those who would otherwise die of kidney cancer, then the FDA’s delay might have contributed to the premature deaths of 3,000 people. Kazman asks whether we’ve seen any photos or news stories of the 3,000 victims of the FDA’s interleukin-2 delay or the 100,000 victims of the FDA’s beta-blocker delay.

These are the invisible victims of FDA policy. In the 1974 words of FDA commissioner Alexander M. Schmidt: “In all of FDA’s history, I am unable to find a single instance where a congressional committee investigated the failure of FDA to approve a new drug. But, the times when hearings have been held to criticize our approval of new drugs have been so frequent that we aren’t able to count them. … The message to FDA staff could not be clearer.”

That message is to always err on the side of overcaution where FDA’s victims are invisible and the agency is held blameless.

Kazman’s day job is general counsel for the Washington, D.C.-based Competitive Enterprise Institute that’s done surveys of physicians and their views of the FDA. On approval speed, 61 to 77 percent of physicians surveyed say the FDA approval process is too slow. Seventy-eight percent believe the FDA has hurt their ability to give patients the best care.

But so what? Physicians carry far less weight with the FDA than “public interest” advocates and politicians.

When the FDA announces its approval of a new drug or device, the question that needs to be asked is: If this drug will start saving lives tomorrow, how many people died yesterday waiting for the FDA to act?

Walter E. Williams is a professor of economics at George Mason University.