Nation Topics - Economy | The Nation

Citigroup proclaims that its "private bankers act as financial architects,
designing and coordinating insightful solutions for individual client needs,
with an emphasis on personalized, confidential service." That is so colorless.
It might better boast, "We set up shell companies, secret trusts and bank
accounts, and we dispatch anonymous wire transfers so you can launder drug
money, hide stolen assets, embezzle, defraud, cheat on your taxes, avoid court
judgments, pay and receive bribes, and loot your country." It could solicit
testimonials from former clients, including sons of late Nigerian dictator Sani
Abacha; Asif Ali Zardari, husband of Benazir Bhutto, former prime minister of
Pakistan; El Hadj Omar Bongo, the corrupt president of Gabon; deposed
Paraguayan dictator Alfredo Stroessner; and Raul Salinas, jailed brother of the
ex-president of Mexico. All stole and laundered millions using Citibank
(Citigroup's previous incarnation) private accounts.

One lesser-known client, Carlos Hank Rhon of Mexico, has been the object of
a suit by the Federal Reserve to ban him from the US banking business. Hank
belongs to a powerful Mexican clan whose holdings include banks, investment
firms, transportation companies and real estate. Hank bought an interest in
Laredo National Bank in Texas in 1990. Six years later, when he wanted to merge
Laredo with Brownsville's Mercantile Bank, the Fed found that Citibank had
helped him use offshore shell companies in the British Virgin Islands to gain
control of his bank by hiding secret partners and engaging in self-dealing, in
violation of US law. One of the offshore companies was managed by shell
companies that were subsidiaries of Cititrust, owned by Citibank.

The Fed says that in 1993, Hank's father, Carlos Hank González, met
with his Citibank private banker, Amy Elliott, and said he wanted to buy a $20
million share of the bank with payment from Citibank accounts of his offshore
companies, done in a way that hid his involvement. Citibank granted him $20
million in loans and sent the money to his son Hank Rhon's personal account at
Citibank New York and to an investment account in Citibank London in the name
of another offshore company.

Citigroup spokesman Richard Howe said, "We always cooperate fully with
authorities in investigations, but we do not discuss the details of any
individual's account."

At press time, there were reports that Hank had negotiated a settlement
with the Fed, which the parties declined to confirm.

As Teamster/turtle ties fray, Hoffa faces Tom Leedham in his re-election bid.

The last time Oklahomans voted on a "right to work" law, in 1964, the
Rev. Martin Luther King Jr.

Bush lied. About
the cost of his tax cut. About who benefits. About his budget. He
lied when he claimed he could throw money at the military, fund a
prescription drug benefit, pass his tax cut and still not touch the
Social Security surplus. And he's lying now as his budget office
cooks the books to mask the fact that he's already dipping
into the Social Security surplus--without counting the full cost of
his military fantasies, or a decent drug benefit, or the inevitable
tax and spending adjustments yet to come.

Democrats have
every reason to rail about Bush's lies and to condemn his
irresponsible tax cut--about a third of which will go to the
wealthiest 1 percent (and for which, it should be noted, twelve
Democratic senators voted). But Democrats are about to lock
themselves in their own box with their posturing about the "raid on
the Social Security trust fund."

There is no lockbox and no
raid. The Social Security and Medicare trust funds are credited with
bonds for every dollar of surplus whether the money is spent, given
away in tax cuts or used to pay down the debt. Those bonds--the most
secure investment in the world--can be redeemed when Social Security
payments start to exceed payroll taxes. When the surpluses first
showed up, Clinton invented the notion that paying down the debt
would "save Social Security first" as a clever tactical ploy to fend
off Republican tax cuts. With the economy growing and unemployment
low, debt reduction had a threadbare rationale. But even then,
Clinton was forfeiting a historic opportunity to argue for meeting
vital needs: healthcare, housing, more classrooms and teachers,
preschool for all. Now Democrats have turned Clinton's tactics into
perverse principle. The trust fund surplus is "raided" if it doesn't
go toward debt reduction. House minority leader Dick Gephardt argues
that Bush should present a new budget--one with either less spending
or more taxes.

But the world economy is teetering on the
verge of a global recession. Japan is sinking. Europe is slowing.
Latin America is a basket case. The US stock market has tanked.
Corporations are slashing investment and laying off workers.
Consumers are starting to tighten their belts. State and local
governments are cutting programs. This is hardly the moment for the
federal government to run the second-largest surplus in history. And
Bush already has his tax cut for the wealthy. So all the Democratic
posturing about the lockbox puts pressure on spending. Already White
House flack Ari Fleischer says the squeeze "will prevent the
politicians from busting the budget and spending more pork." Worse,
Democratic talk about "raiding the trust fund" adds to the myth that
Social Security is at risk--a big lie that Bush is pushing to sell
private accounts and cuts in guaranteed benefits.

Democrats
should be indicting Bush for turning his back on working families by
enforcing austerity in a time of need. They should be making the case
for extending unemployment insurance, aiding poor mothers (the first
to be laid off), making investments in housing, schools and mass
transit that can help jump-start the economy. And they should be
taking credit for the tax rebate that people are getting--that was a
Democratic idea that wasn't even in the Bush plan. Instead, Democrats
are whistling Calvin Coolidge and ceding the growth argument to Bush.
Bush says his tax cuts are needed to help the economy revive; that's
right--only he's lying about his tax cut. Most of it doesn't kick in
for years and goes to the already rich. Those cuts should be
reversed, particularly the ones in the estate tax, which is paid only
by the wealthiest families. Democrats should reclaim the money for
investment in making America better.

Now we have a
dishonest debate: Bush lies, and Democrats defend austerity in a time
of need. It's time for progressives inside and outside Congress to
find their voice and break with austerity politics.

Courtney Love's plea to fellow recording artists
to join her in the creation of a new musicians' guild, printed below,
is the latest blow to the beleaguered "Big Five

Finally, President Bush is "deeply worried" about the economy. Yep, in remarks last week, he even went so far as to observe that "the recovery is very slow in coming."

Nothing in modern times has symbolized the scourge of racism--and the potential for overcoming it--more than South Africa's recent history.

John Sweeney sees the AFL-CIO through some growing pains.

Unions know what has to be done. Now they have to do it.

When The Red Queen boasts in Through the Looking-Glass that in her country, "it takes all the running you can do, to keep in the same place," she could have been talking about today's labor movement. To turn their long slide into a winning streak, unions need to add millions of new members each year. The terrain seems only to get more treacherous, with a White House in thrall to business assaulting labor at every turn, a worldwide economic slowdown, increasing layoffs and plant closings, growing economic inequality.

But hold the sympathy cards. As various reports in this special Labor Day issue attest, unions have been organizing more boldly and effectively in recent years, making inroads into new constituencies, like immigrants, and opening up the once-scorned service sector. Election 2000 aside, more adept political organizing has boosted the union-household share of the electorate from 19 percent in 1992 to 26 percent in 2000. Unions have forged promising new alliances with students, religious communities, anti-WTO activists and environmentalists. There have been tactical stumbles--and most unions have yet to shake old bureaucratic habits--but the stepped-up investment in organizing by the AFL-CIO and its aggressive affiliates has begun to show the way forward.

The challenge now is for all unions to wield their resources and power more strategically, to engage their members as organizers and campaigners, and to articulate a social vision that will inspire hard daily slogging but also elevate eyes to long-range goals beyond paycheck issues, important as those are. Such a vision can impart unity and strength to the progressive movement. Teamsters can't be expected to hug a sea turtle daily, but their embrace of drilling in the Arctic National Wildlife Refuge was destructive, as was the United Auto Workers' endorsement of the weaker fuel-efficiency standards in the Bush Administration's energy plan.

The "blue green" coalition is currently facing another important test in George W. Bush's demand for fast-track trade promotion authority. Big business will spend $20 million lobbying for fast track, which would grease the way for the Free Trade Agreement of the Americas through Congress. The crucial fight is in the House, where the Administration will dangle all sorts of phony "side agreements" before Democrats and moderate Republicans. Public Citizen's Global Trade Watch is on the road, fanning out into home districts of key representatives. Labor is ready to jump into the fray, guns blazing. Recent ruptures notwithstanding, progressives have formed a united front to block fast track twice before, under Clinton, and they can do it again.

But labor's political success will be short-lived unless it is driven by an energized rank and file and animated by a morally compelling mission that resonates with workers at home and abroad. Labor will thrive to the extent that it acts not as a "special interest" but as a new civil rights movement--rallying union and nonunion workers alike around their rights to dignity and democracy in the workplace, to economic justice and a living wage, and to the voice and power that union representation can bring. The rest of us can't stand on the sidelines. Despite its frustrations, the labor movement remains the backbone of progressive politics in this country.