Who are exaggerating the inflationary pressure?
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Current Economic and Social Issues View Comments
Current Economic and Social Issues View Comments
Current Economic and Social Issues View Comments
Current Economic and Social Issues View Comments
Last month, as thousands of students walked out of their schools to protest pending immigration bills in Congress, 17-year-old Julio Beltre stood in front of New York’s Federal Plaza to tell the story of his father, Juan Beltre: On a morning in April 2005, before the sun rose six agents from the Department of Homeland Security had woken up his father and dragged him away from their Bronx home. His wife and four children – all U.S. citizens – watched in horror.
Why was he being seized? Juan Beltre had committed a single drug-possession offense dating back to 1995. But in those 10 long years, Beltre had completed probation, was a long-term green card holder – and was now suffering from a brain tumor.
“Now my mom has to raise us alone,” his son recounted at the demonstration. His father was deported back to the Dominican Republic.
Which Way Will The Pendulum Swing?
The debate is as complex as it is heated. Before it recessed, the Senate Judiciary Committee was debating an immigration bill that would, if passed into law:
• expand the grounds of deportation;
• use domestic military bases for immigration detention;
• legalize the indefinite detention of non-citizens;
• authorize New York City police and other local officers to enforce federal immigration laws;
• erect a border fence;
• enable Homeland Security agents to expel suspected foreigners indiscriminately; and
• create a national identification system for all workers.
Yet many are hailing this as success. The front page of New York’s largest Spanish language paper, El Diario, exclaimed “TRIUMFAMOS.” Meanwhile, restrictionist commentator Lou Dobbs campaigned against the bill on television and in Mexico.
This ironic role reversal stems from one section of the proposed bill, the guestworker legalization provisions. Under the leadership of Sen. Arlen Specter (R-Penn.), the Judiciary Committee voted 12-6 to approve a new visa program, devised by Sen. Edward Kennedy (D-Mass.) and Sen. John McCain (R-Ariz.), under which undocumented workers would have to register with the government, maintain continuous employment for six years, pay back and future taxes, and pass civics and English lessons in order to apply for a green card. Some claim the Senate bill as a victory because undocumented workers would have a potential pathway to work and live lawfully in the United States.
Fighting To Keep The Legalization Provisions
Advocates are fighting to prevent the “earned legalization” provisions from being watered down. The main variable is whether or not the visa granted to undocumented workers will lead to a green card and eventual citizenship.
We are now at a crossroads. While the nation’s attention is focused on the legalization question, lawmakers have guaranteed only one thing: there will be no legalization-only bill. If the Senate ultimately approves anything, it will go to a closed-door conference committee to be resolved with the House bill passed in Dec. 2005. The House bill concedes no green cards. Its only common ground with the Senate is provisions to expand detentions, deportations and border police.
A shared history underlies the consensus. September 11 transformed immigration into a national security debate with Democrats and Republicans both convinced that any immigration reform must come with tighter controls. But as the Beltre family illustrates, the New York congressional delegation has to resolve the national security agenda with a powerful reality: non-citizens are not the only affected population.
Ten Years Of Deportations
It’s not the act of terror we remember best. In April 1995, a white veteran of the first Gulf War blew up the Oklahoma City federal building. One year later, to memorialize that tragedy then-President Bill Clinton signed a sweeping immigration enforcement measure: the Anti-Terrorism and Effective Death Penalty Act. A sister bill, the Illegal Immigration Reform and Immigrant Responsibility Act, passed just months later.
Together, the 1996 laws transformed the meaning of membership in America and substantially ramped up policing based on citizenship. There was no legalization or guestworker program. Instead, there were sweeping deportation measures that empowered the executive branch to more easily expel people already within our borders.
Prior to the 1996 laws, a New Yorker placed in deportation proceedings could typically go before an immigration judge and seek a pardon if she could demonstrate that she was no threat to society and had significant ties to her U.S. community. But the new laws instituted a system of mandatory deportation and detention whereby the vast majority of New Yorkers facing deportation are held in immigrant prisons without bail and have no opportunity to plead their case before an immigration judge.
More than 1.3 million people have been expelled from the United States in the last 10 years, and immigrants have become the fastest-growing segment of our prison population. Taxpayers are footing the bill for the ever-growing deportation budget. American veterans, breadwinners and people who have lived here since infancy have been deported through this process.
Plea Bargains Lead To Deportations
In New York, as in other cities, the criminal justice system is a cornerstone of the immigration policing strategy. Defense attorneys advise clients to plea to lesser charges in order to secure a deal with little or no jail time. Every week, hundreds of immigrant New Yorkers arrested for garden-variety crimes plead guilty under this plea-bargain system. However, a second punishment may follow: detention and deportation. As the federal immigration authorities’ reliance on local criminal institutions grows, there is no countervailing process to ensure that the rights of immigrants are observed.
Connecting Past & Present Policy
The New York congressional delegation has been nearly mute on how America’s immigration are harming families – with one recent exception. On March 28, 2006, Congressman Jose Serrano of the Bronx introduced the Child Citizen Protection Act, a bill to restore partial discretion to immigration judges in cases where removal of an immigrant is clearly against the best interests of a U.S. citizen child. But the other members of Congress from New York are largely silent despite the New York families who flood their district offices – families already devastated by deportation.
“Our leaders need to change the laws,” Julio Beltre concluded his speech during the demonstration at Federal Plaza, “before more young people like me get hurt.” On April 24, the 10- year anniversary of the 1996 laws, he and other New Yorkers will converge in Washington, D.C., with families from other cities whose lives have changed because of deportation.
Aarti Shahani is a co-founder of Families for Freedom, a Brooklyn-based defense network for immigrant families facing deportation. This is an edited version of an article originally published by the Gotham Gazette, www.gothamgazette.com.
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NEW ORLEANS—Every morning in New Orleans, a group of Latino men line up by the side of a traffic circle named for Robert E. Lee, under a large banner reading: “Remember Those Suffering from Katrina and Rita.” These men, whose faces change every day, have come to New Orleans over the past seven months following rumors of high-paying demolition and construction work. Few speak English, and many do not have visas to work in the United States. Adrift in a city with few resources for Latinos, they rely heavily on their employers, sometimes sleeping in the same hurricane-damaged buildings they work on all day. Caught between financial necessity and immigration law, they are unlikely to challenge the often unsafe work conditions they encounter as they do the dirty work of rebuilding New Orleans.
“Right now there are more ICE (Immigration and Customs Enforcement) agents on the ground than Department of Labor agents,” says Jennifer Whitney, cofounder and co-coordinator of the Latino Health Outreach Program, a weekly clinic offering free vaccinations and safety equipment to migrant laborers. “No one knows for sure how many migrant workers have passed through here, but tens of thousands is a reasonable estimate – doing really dangerous work without training or proper equipment.”
On a typical Wednesday at Lee traffic circle, Whitney and a group of other activists from the Common Ground Health Clinic arrive at six in the morning to transform a gas station parking lot into the only Spanish-language clinic in greater New Orleans. Their vaccination program runs out of a few small coolers and focuses on tetanus and Hepatitis A, two pathogens common to flood-damaged buildings. On one side of the lot, an enthusiastic volunteer gives a flight attendant-style demonstration in Spanish on how to use a dual-cartridge respirator. In a more secluded space behind a station wagon, Whitney and other volunteers consult with patients who will need to arrange for a translator’s help to visit a specialist. A shy, dark-skinned man with a large neck wound wanders up from the street and is escorted back to this area.
A Honduran man named Reyes waits while his friends receive their vaccinations. He tells me that he has lived in Houston and Baton Rouge before coming to New Orleans, and that New Orleans is more daunting for a Latino worker than those other cities. “The city here has not seen many Hispanics,” he says. “The police are much tougher here.”
Before Katrina, Latinos made up only 3 percent of the population of New Orleans, far below the norm for an American city of its size. While Latino immigration nationwide had peaked in recent decades, New Orleans’s economy had lagged behind that of the rest of the country, and a large black underclass had served to fill the least desirable jobs.
The exodus of poor blacks in the aftermath of Katrina cleared the way for migrant workers like Reyes to seek dangerous work cleaning out buildings that had festered for weeks in dirty water. President Bush’s decision to waive requirements for employment eligibility documents opened up a great migration of day laborers from across Central and North America. Some now estimate that New Orleans is up to 30 percent Latino, though reliable data is unavailable.
On March 17 at Lee traffic circle, forty workers were arrested while waiting to be picked up for construction jobs. This was the largest of many immigration raids in New Orleans since last fall. Police have implied that migrant workers have ties to Central American gangs, and now sometimes strip detainees to their underwear to search for tattoos.
The Advancement Project, a legal activist group working in New Orleans, tries to arrange support for detained migrant workers. However, according to Whitney, lawyers sometimes do not receive access to detainees for four days or more.
Spanish-speaking migrants are often perceived as an economic threat by both black and white populations in New Orleans, and as a result they have difficulty finding political sympathy or logistical support.
Whitney points to interracial worker associations in Los Angeles and other American cities as examples of what could be done right in the future. With her peers from the Common Ground Health Clinic, she hopes to help found a New Orleans Worker Justice Coalition, which would include a permanent health clinic for Latino laborers as well as some training and advocacy. “We expect that the numbers [of Latinos in New Orleans] will continue to go up,” says Whitney. “We’re not looking to be a disaster relief organization. We’re going to stay.”
For now, workers like Reyes are happy just to have the chance to pick up a muchneeded vaccination and some functional safety equipment on the way to work. “The Latinos here don’t know the city well,” he says. “Without this, we’d have to go to a private clinic where the service would be very expensive. Many wouldn’t do it.”
For more info, see www.cghc.org, Common Ground Health Clinic.
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On Jan. 1. 1994, the North American Free Trade Agreement (NAFTA) went into effect, liberalizing trade, investment and capital flows across Mexico, Canada and the United States. One of the effects of NAFTA has been to increase Mexican immigration into the United States as many small farmers have lost their lands, unable to compete against heavily subsidized U.S. agribusinesses.
One of NAFTA’s main provisions was the reduction of price supports by the Mexican government for agricultural products. The treaty permitted the United States to continue agricultural subsidies, however, allowing farmers to sell their agricultural products on the Mexican market at rock-bottom prices – in the case of corn, about 35 percent below the cost of production. From 1995 to 2004, U.S. corn farmers received $41.9 billion in government subsidies.
A study published in 2004 by the nonprofit policy group Americas Program found that while the price of domestic corn in Mexico has fallen since 1994 the price of corn-based tortillas has increased by 279 percent. While some 3 million farmers in Mexico continue to grow corn, Mexico has now switched from a corn-exporting country to a corn-importing country.
The cultivation of corn first began in Mexico some 5,000 years ago, and thousands of varieties abound through the country. As a consequence of the low prices, many small farmers and their families have had to leave their homes and their land to survive. For those farmers who choose to stay, the only crops they can still make a living from are usually marijuana and poppies.
“Since the passage of NAFTA in 1994, more than three million campesinos have been forced to abandon agricultural production and look for jobs in maquiladoras [export-only factories] or as undocumented workers in the U.S.,” said Tom Hansen, National Coordinator for the Mexico Solidarity Network.
In 2000, Mexican president Vicente Fox raised the idea of free flow of people across the U.S.-Mexico border as a second phase of NAFTA. The events of Sept. 11 derailed this plan, however.
“Immigration morphed from a largely temporary, circular phenomena pre-1994 that involved perhaps 100,000 Mexicans annually, to a more permanent trend that involves almost halfa- million Mexicans annually, representing about one percent of the entire Mexican workforce,” Hansen stated.
Current Economic and Social Issues View Comments
Current Economic and Social Issues View Comments
Economics
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The most fundamental and singular result of corporate policies of the past 25 years has been a massive shift in relative income from the roughly 105 million workers to the wealthiest 10 percent non-working class households in the U.S. This enormous income transfer grew in scope and magnitude annually throughout the 1980s and Reagan years, continued to expand steadily during the Clinton years, accelerated during the first term of George W. Bush, and now promises to exceed more than $1 trillion per year during the rest of Bush’s second term.
Few groups within the ranks of the U.S. corporate elite have gained more from this historic income shift than the CEOs and senior managers of corporate America. In 1978, according to the Wall Street Journal, typical U.S. CEOs earned approximately 35 times the pay of the average paid worker in their company. In recent years CEO total compensation has risen to more than 500 times the average worker’s pay, according to the conservative global business source, Reuters.
Defining Executive Pay
The typical worker in the U.S. receives about 90 percent of their earned income from their paycheck whether earned as an hourly wage or weekly salary. Not so for the typical CEO and senior manager. Historically only 7-10 percent of their income is earned from a salary as such. Focusing only on CEO salaries, therefore, totally misses the point and statistics quoting CEO salaries as the sole indication of executive pay levels should be especially suspect. At times the term “direct compensation” is used as an alternative measurement of executive pay. But that too underestimates such pay, as it excludes hidden indirect forms of compensation.
A slightly better term is “total compensation.” It includes direct and indirect forms of executive pay. CEO total compensation may include salaries, bonuses (cash or other forms), stock options, stock grants and awards, long term incentive pay, deferred pay of various kinds, regular and supplemental management pensions, below market rate mortgage loans to managers by the company, write offs of personal loans by corporate boards, innumerable forms of perks with direct dollar value, prepaid charitable donations, lifetime use of corporate jets, company payment of CEO tax obligations (called “gross up” compensation), and so on in a long list of forms of creative and hidden pay. These and other non-salary forms of executive pay account for 90 percent or more of CEO and senior managers’ total compensation.
But even “total compensation” is an inadequate indicator of executive pay. With hearings on executive pay by the U.S. Securities and Exchange Commission (SEC) to begin this spring, it is clear that many other forms of executive compensation remain hidden by opaque corporate accounting and reporting practices, are not counted as part of “total compensation,” and are never communicated to the IRS.
During the Reagan years average CEO pay rose from just over $1 million a year to roughly $2.5 million by 1989. By 1992, at the close of the George Bush senior administration, it nearly doubled again to $4.5 million—despite the recession of 1990-91 and falling corporate profit performance. It more than doubled again under Clinton to $11.1 million by 2000, for a 342 percent gain over two decades. Some estimates placed the pay of the average U.S. CEO as high as $14.4 million by 2001.
According to a just released study by professors Lucian Bebchuk of Harvard Law School and Yaniv Grinstein of Cornell University, based on interviews of CEOs and top managers at the 1,500 largest publicly traded corporations in the U.S., the group of 5 top managers at the corporations received collectively $122 billion in compensation between 1999-2003 compared to $68 billion for the same group during 1993-1997. On top of these 1999-2003 gains, the Harvard-Cornell study estimates another 39 percent increase in average executive compensation in 2004 for the surveyed group of the largest corporations.
But even the Harvard-Cornell figures are underestimations as they exclude the lucrative and fast-growing supplemental pensions for executives, called Supplemental Executive Retirement Plans (SERPS). Some sources estimate SERPs constitute as much as an additional one-third of total executive compensation. Were SERPS and other supplemental retirement plans included in the Harvard-Cornell study estimates, the nearly doubling of executive pay that was estimated between 1999-2003 would have been even higher.
As corporations over the past decade have been busy reducing pension benefits for workers, under-funding and even abandoning their pension plans for workers, SERPs were being added across the board by corporations in the U.S. Changes in the tax laws in 1994 provided a strong incentive for creating SERPs for senior executives as a way to shelter more of their total compensation from taxation. Less than half of senior executives had supplemental pension plans prior to 1995; today more than 90 percent have such plans. Thus billions more have been squirreled away for CEOs and senior managers of the largest public companies over the past decade.
For CEOs of the largest corporations that means at least another $60 billion in addition to the $122 billion of the Harvard-Cornell study. But that additional $60 billion still does not include the rest of the 90 percent of corporations—apart from the 1,522 surveyed by Harvard-Cornell—that have also established SERPs today for CEOs and senior managers.
One of the great scandals at Enron when it went bankrupt was that Enron executives froze workers’ pensions and did not allow them to take their money out as the company began to default, while those same executives were cashing out their pensions in a separate, supplemental management pension plan.
Other measures of growth in executive compensation corroborate the above trends and figures for executive pay. The non-partisan research group the Corporate Library recently surveyed “median” as opposed to average CEO pay. It estimated that median CEO compensation for 2003 rose 15 percent in 2003, followed by another increase in median executive compensation of 30 percent in 2004. No doubt results for 2005 will show a continuing accelerating trend.
Trading Jobs for Executive Pay
CEOs who have been doing especially well under George W. Bush are those companies that have been involved in aggressive offshoring of jobs. Approximately eight million quality, high paying jobs have been lost due to “free” trade policies and offshoring since the 1980s and the number continues to rise rapidly. Free trade policies and offshoring reflect the radical restructuring of trade relations and foreign direct investment strategies implemented by corporate America since Ronald Reagan. More than a million jobs have been lost due to NAFTA in the last decade alone and another 2.5 million have resulted from the granting of special terms of trade with China in 2000.
For dismantling of a good part of the U.S. manufacturing base, CEOs and senior managers of U.S. corporations involved in offshoring of jobs have been generously compensated compared to their already well-paid corporate peers. For example, a Business Week survey in 2003 of CEOs at the 50 largest U.S. companies that outsource the most showed that their CEOs enjoyed an average increase in compensation of 46 percent between 2001-03, earning as a group a reported $2.2 billion while sending an estimated 200,000 jobs offshore.
CEOs and managers are now compensated at record levels, not for their contribution to the corporate bottom line anymore, but for selling off the company, for leaving quietly, or for gross performance failure. Thus Carly Fiorina, ex-CEO of Hewlett-Packard, departed last year with a package of more than $40 million. David Pottruck of Schwab left with around $50 million, and Craig Conway of Peoplesoft exited with a total package of more than $60 million. Among the biggest winners of CEO departees, however, were Phillip Purcell of the investment bank, Morgan Stanley, who left with a reported $113 million, and James Kilts of Gillette who walked out the corporate door with $165 million. Even more amazing was Steven Crawford, recent co-president of Morgan Stanley, who left after only three months of employment with $32 million—or a rate of pay of more than $10 million a month. Crawford’s gain was more than matched in terms of the bizarre, though, by Daniel Carp, still CEO of Blockbuster Video Corp., who in 2004 received more than $50 million in compensation even though the company recorded a loss of $1.25 billion that year.
Comparing Pay
As previously noted, executive pay between 1980 and 2000 climbed an astounding 342 percent, outpacing the rate of inflation over the period by at least 4 to 1. In contrast, the average hourly wage for more than 100 million workers, when measured in 2003 dollars, rose from $14.86 at the start of 1980 to only $14.95 at the end of 2000. That’s a 9 cents an hour gain after 20 years.
Furthermore, the average hourly wage today for 105 million workers after adjustment for inflation is exactly the same at year end 2005 as it was in 2001, according to the U.S. Department of Labor’s statistics. In 2004-2005 it has fallen steadily as inflation has begun to accelerate. For the 60 million at the medium wage level or below, inflation the past two years has been rising at twice the rate of their hourly wage.
To compensate for stagnant and declining real hourly wages and earnings, U.S. workers have had to resort to alternative means to try to maintain income levels and spending. These alternatives to wage gains fall into three categories.
First, more U.S. families have been having other family members enter the workforce to supplement family incomes and/or have had to take on second part time jobs in addition to their normal job. U.S. families have increased the number of hours worked by more than 500 a year since 1980. Americans now work by far the greatest number of hours per year than workers in any of the other industrialized countries—approximately 1,970 hours each per year out of 2,040, based on a normal 40 hour work week. The next closest is Canada where workers average about 1,800 hours. Workers in industrialized economies of Europe average fewer hours worked, 1,600-1,800 hours per year.
Second, they have had to take on record levels of consumer and installment debt, levels that have doubled from $4 trillion to more than $9 trillion since Bush II took office.
Third, workers fortunate enough to own their homes have been refinancing those homes and using the proceeds as discretionary income to pay for major purchases such as medical expenses, education, and large ticket items—in effect living off their assets.
All three solutions to the stagnation and decline of real wages over the past quarter century, however, have their finite limits and cannot continue long term as safety valve alternatives to declining real wages, earnings, and incomes for the 105 million.
Reforming Executive Pay Abuse
Growing executive pay abuses and excesses have in recent months provoked a response from several quarters. Stockholder complaints that CEOs and executives have doubled their take from roughly 5 percent to more than 10 percent of total profits, have focused attention on the impact of accelerating levels of executive pay on shareholder dividends and stock returns. Thus, even some capitalists have now begun focusing on the issue and splits and differences about what to do have arisen within their ranks. As a result, several bills and legislative proposals have been entered into Congress addressing executive pay.
This development has forced the Bush administration to issue a response and proposals of its own. The SEC, this past January 2006, issued preliminary draft rules for revising corporate executive pay practices and reporting. These rules were open for a 60-day period in February-March for public discussion and comment, following which the SEC would issue final rules for revising executive pay to take effect in 2007.
However, in issuing initial draft proposals the SEC made it clear that it would not impose limits on executive pay, as the objective of the SEC is only to require more accurate reporting by corporations of their pay to executives. The solution, according to the SEC, is to let the market regulate the excesses and abuses in executive pay practices—the same market that has been allowing those abuses and excesses in the first place. As SEC chair Christopher Cox put it this past January, “Our purpose here is to help investors keep an eye on how much money is being paid to the top execs.” Apparently this means allowing them to see better the full scope and magnitude of the executive pay theft, even though there will be little they can do about it once they know the full extent of the abuse.
Executives are awarded their excessive compensation by their corporate boards. By law board members cannot be removed by shareholders. That’s how the system is set up. Furthermore, shareholders have no power to veto or approve executives’ salaries pensions, severance, personal loan subsidies, perks, and so forth. As one of the authors of the Harvard-Cornell study put it, “Shareholders have very limited power to do anything about it.”
The SEC’s tepid main proposal in its draft rules is to consolidate the reporting of executive pay for the top five managers in a corporation into a single figure in a corporate proxy statement. Currently, elements of executive pay are distributed all over the proxy statement and many are hidden in accounting rat holes in the document that never see the light of day.
Elsewhere the SEC’s draft rules merely tweak the system. For example, currently perks awarded to execs valued at less than $50,000 a year need not be reported. This limit would be reduced to $10,000. On the other hand, the SEC’s draft rules say nothing about closing some very large loopholes, such as requiring the valuation of stock options given to executives and not just reporting the number of shares of stock. Or requiring the reporting on dividends paid to executives on restricted stock—which is currently not required at all. Or allowing corporations to deduct executive pay from their corporate taxes, which is also now permitted. Or backdating stock strike prices for stock options, which allow executives to reap huge stock windfalls.
In fact, the SEC is proposing to widen the reporting loophole for personal transactions between executives and the corporation (i.e., personal loans, gross ups, etc.). The SEC has suggested the cut off level for reporting such transactions be raised from $60,000 to $120,000, meaning that more compensation will actually be hidden rather than revealed. The Wall Street Journal responded to the SEC’s initial draft rules by declaring, “This is a case of admirable regulatory restraint.” And as that business source further noted, after all “who knows what is exorbitant pay anyway.”
Despite the SEC’s cautious approach to reforming executive pay now running rampant, business has criticized the SEC draft by arguing that more transparent reporting is just the first step to establishing limits on executive pay, that revealing more detail about executive pay will lead to more competition for pay packages between executives and thus higher pay, and that more transparency will result in other creative ways to raise or defer executive pay. In other words, don’t fix a broken system because you may break it even more.
In the middle of the political spectrum, more liberal Democratic elements in the House have called for legislation requiring shareholder approval of additional executive compensation where the sale or purchase of corporate assets are involved (e.g., mergers or acquisitions). The AFL-CIO is calling for a law that provides for shareholder approval, not just transparent reporting, of general changes in executive pay.
But like so much on the U.S. political scene today, the debate is conducted between various factions of the corporate elite. The 105 million workers in the U.S. and their direct interests in any debate of economic significance or import are left out of the picture. Thus little will likely come out of the SEC’s hearings or efforts in Congress to rein in accelerating executive pay in the U.S. The coming months of debate on the subject will provide much smoke, little fire, and a lot of mirrors. Meanwhile, the real hourly pay and earnings of more than 100 million workers will continue to stagnate and decline as gas prices, medical costs, housing, and general inflation rises—forcing tens of millions to work more hours, take on extra jobs, assume an ever-rising burden of credit, and spend down the assets in their homes in order to maintain consumption levels and standards of living. Executive pay may be the ongoing obscenity; but worker pay in the U.S. is the true continuing tragedy.
Source http://zmagsite.zmag.org/Apr2006/rasmus0406.html
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Ex-C.I.A. Official Says
By SCOTT SHANE
The views of Paul R. Pillar, who retired in October as national intelligence officer for the Near East and South Asia, echoed previous criticism from Democrats and from some administration officials, including Richard A. Clarke, the former White House counterterrorism adviser, and Paul H. O'Neill, the former treasury secretary.
But Mr. Pillar is the first high-level C.I.A. insider to speak out by name on the use of prewar intelligence. His article for the March-April issue of Foreign Affairs, which charges the administration with the selective use of intelligence about
"If the entire body of official intelligence on
In an interview on Friday, Mr. Pillar said he recognized that his views would become part of the highly partisan, three-year-old battle over the administration's reasons for going to war. But he said his goal in speaking publicly was to help repair what he called a "broken" relationship between the intelligence produced by the nation's spies and the way it is used by its leaders.
"There is ground to be replowed on
President Bush and his aides have denied that the
Reports by the Senate Intelligence Committee and the presidential commission on weapons intelligence headed by Laurence H. Silberman, a senior federal judge, and Charles S. Robb, the former
Mr. Pillar alleged that the earlier studies had considered only "the crudest attempts at politicization" and that the real pressures were far more subtle. "Intelligence was misused publicly to justify decisions that had already been made," chiefly to topple Mr. Hussein in order to "shake up the sclerotic power structures of the
According to Mr. Pillar's account, the administration shaped the answers it got in part by repeatedly asking the same questions, about the threat posed by Iraqi weapons and about ties between Mr. Hussein and Al Qaeda. When intelligence analysts resisted, he wrote, some of the administration's allies accused Mr. Pillar and others of "trying to sabotage the president's policies."
In light of such accusations, he wrote, analysts began to "sugarcoat" their conclusions.
Mr. Pillar called for a formal declaration by Congress and the White House that intelligence should be clearly separated from policy. He proposed the creation of an independent office, modeled on the Government Accountability Office and the Congressional Budget Office, to assess the use of intelligence at the request of members of Congress.
Mr. Pillar suggested that the root of the problem might be that top intelligence officials serve at the pleasure of the president.
A C.I.A. spokeswoman, Jennifer Millerwise Dyck, said the agency had no comment.
Danielle Pletka, vice president for foreign and defense policy studies at the conservative American Enterprise Institute, said that the C.I.A. had long resisted intervention in Iraq, and that internal pressure on analysts to resist war was greater than any external pressure.
"If the C.I.A. had spent less time leaking its opinions, throughout the 1990's, opposed to any conflict with Iraq, and more time developing assets inside Iraq, the agency would have more credibility and better intelligence," said Ms. Pletka, who served for a decade, until 2002, as a Republican staff member on the Senate Foreign Relations Committee.
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By VIKAS BAJAJ
The
Hitting its fourth consecutive annual record, the gap between exports and imports reached almost twice the level of 2001. It was driven by strong consumer demand for foreign goods and soaring energy prices that added tens of billions of dollars to the nation's bill for imported oil. The nation last had a trade surplus, of $12.4 billion, in 1975.
The continued growth in the trade deficit, particularly with
But as long as the American economy is growing faster than most of its trading partners and energy prices stay at elevated levels, economists expect little improvement, and perhaps even a slight widening, in the trade imbalance this year.
"You would need a dramatic slowdown in domestic
That means the nation will go deeper into debt with the rest of the world as Americans continue to rely on the strong flow of foreign money, particularly from central banks in
As a result, American consumers are able to spend more and save less.
Many economists say this situation is unsustainable over the long run, arguing that the
"There are certainly going to be inflows, the question is at what price?" said James O'Sullivan, an economist at UBS, an investment house. "As time goes on, it will become a little more difficult to attract foreign funds. That's another way of saying the dollar will fall."
But other economists argue that the huge trade gap mostly reflects stronger American growth and that money is flowing into the country at relatively low rates because of the attractiveness of the
"As long as foreigners are willing to put their capital in the United States, we can sustain a trade deficit of 6 percent or more" of overall economic activity, said Phillip L. Swagel, a resident scholar at the American Enterprise Institute in Washington who served as a staff economist for President Bush's Council of Economic Advisers.
"It would be better that we saved more on our own," Mr. Swagel added, "but given that we aren't, I would rather have investment go on by foreign capital."
For its part, the Bush administration urged caution on the deficit.
Commerce Secretary Carlos M. Gutierrez, touring an I.B.M. operation in
As a share of the gross domestic product, the trade gap increased to 5.8 percent, from 5.3 percent in 2004 and 4.5 percent in 2003.
While most economists dismiss the importance of bilateral trade imbalances, it is the deficit with
Following increased pressure from the White House, the Chinese government allowed the yuan to rise by about 2 percent in July and allowed its currency to float in a narrow band. Since then the yuan, also known as the renminbi, has risen by an additional 0.7 percent. One dollar buys about 8.0505 yuan.
A stronger Chinese currency would make imports to the
In the Senate, Charles E. Schumer, Democrat of New York, and Lindsey Graham, Republican of South Carolina, have proposed imposing a 27.5 percent tariff on Chinese imports if the country does not allow its currency to appreciate further against the dollar. Late last year, the senators agreed to hold off on the measure after the Senate voted against stopping a floor vote on it.
Mr. Schumer said "there is a very strong likelihood that we will move our bill in March should the Chinese not show further movements."
"If you believe in free trade, you play by the rules," he said when asked if a protectionist tariff would hurt the American economy. "The long-term damage of the Chinese pegging their currency far exceeds any immediate benefits and almost every economist would agree with that. They might not agree with our methodology."
Experts note that a large portion of the deficit with
Bush administration officials have said they, too, would like to see the yuan appreciate further, but have contended that sanctions like a tariff would be counterproductive and would hurt consumers. This month, the Treasury Department urged the International Monetary Fund to improve its policing of currency manipulations by governments, without directly referring to China.
Treasury Secretary John W. Snow is expected to bring up the issue of exchange rates at a meeting of the Group of 8 finance ministers in
But even some longstanding advocates of free trade are growing increasingly frustrated with
"The administration," said C. Fred Bergsten of the Institute for International Economics in
While
Over all, the deficit jumped nearly 18 percent in 2005 compared with the previous year. Excluding oil and other petroleum products, the trade gap grew by 10 percent.
After
The deficit with members of the Organization of the Petroleum Exporting Countries increased by 29 percent, to $92.7 billion. For December, the trade deficit grew by 1.5 percent over the previous month, to $65.7 billion, as imports of computers, cars and airplanes rose and exports of planes, which had risen sharply in November, dropped. It was the third-largest monthly trade gap on record.
And with oil prices rising again, said Ashraf Laidi, chief currency analyst for the MG Financial Group in
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