This clip by Al Franken and and Wes Ball is hilarious. It goes back to see what Jesus would be like if he was a supply sider, the economic theory that says giving to the rich helps money “trickle down” to the poor through their purchases of products and pedicures.
Check out Larry Lessig’s TED talk about American problems and a solution. One such example is obesity, and one of it’s main causes: the artist formerly known as high fructose corn syrup. He talks about how corruption and the flood of money in politics have directly led to the corn abundance in America. Prices of vegetables between 1997 and 2000, went up 17%, while a coke has gone down 35%! He then moves into the financial collapse and the BP oil disaster. He goes on to explain how, why, and what we can do about all of it.
A video used to be embedded here but the service that it was hosted on has shut down.He includes a quote from President Abraham Lincoln in 1864:
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
Yesterday, September 7, the French had a general strike and shutdown large parts of the French system. The result is the French President is now willing to concede to some of their demands and start to negotiate. Ironically, this occurred one day after America’s “Labor Day.” However, American labor is at the end of a 50 year decline and is in such a weak state that Wall Street can take all our private and public money and very little has been done. Although that one sit down strike at Republic Windows and Doors in Chicago was a shining moment during the 2008 crash. Labor has been beaten down in America for a long time, perhaps getting its biggest defeat when the Taft-Hartley Act was passed in 1947 over Harry Truman’s veto, making among other things, general strikes like yesterday’s French one, illegal. The only way I see to balance the power in America is for workers to organize and coordinate. Workers have been thrown under the bus for 50+ years and today’s terrible wealth gap, shrinking middle class, and no power to stop it, is the result.
Check out this discussion on the American system and comments on the French strike. The segment is about 20 minutes.
Letters to Washington
September 8, 2010 at 10:00am
Click to listen or download
Here is one photo of the strike. From my brief research, size estimates of the protests range from a low of 800,000 (from police) to 2,500,000 (from organizers). This of course is on top of all those that participated in the general strike.
Mike Burry is a doctor who decided to become a hedge fund manager in 2000. He is one of the highlighted characters in Michael Lewis’ new book, The Big Short, who called the housing crash well before it started in June 2007. He recently wrote an article that was published in the NY Times back in April of 2010. For those that say “no one saw this coming,” he proves that not only was this not true, but he was trying to tell anyone who would listen that it was happening. He also lays out Alan Greenspan’s complicity, such as when he said in February 2004, just when the Fed was going to stop lowering interest rates and start RAISING them: “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.” Wow!
I Saw the Crisis Coming. Why Didn’t the Fed?
By MICHAEL J. BURRY
Published: April 3, 2010ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.”
But that is not how I remember it. Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, Scion Capital, that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy. My prediction was based on my research into the residential mortgage market and mortgage-backed securities. After studying the regulatory filings related to those securities, I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble; it would mean that prices had risen — with the expansion of easy mortgage lending — as high as they could go.
First thanks to Congressman Markey for getting the video feed up (on May 12, 3 weeks after the leak started!) so we can all see with our own eyes the horrible leak.
Second, this leak is believed to have started April 22, 2010, which is Earth Day, and two days after the oil rig exploded killing 11 workers.
Third, BP claimed it has been leaking 1,000 barrels per day (then upped to 5,000), while independent scientists are saying its between 70,000 and 90,000 barrels per day. The US govt has now upped their estimate to the most conservative of the independent scientists: 12,000 to 19,000 barrels per day. Note that 1 barrel = 42 gallons. So if we take the conservative estimate of 19,000 bpd, that means 29.52 million gallons of oil have leaked into the ocean, so far, minimum!
Lots of pictures and info can be found at Markey’s site.
When will Americans stop using money as the only way to value things? There are costs to what people do, that aren’t ever (let alone immediately) costly. One easy example to explain is when you buy a TV. You pay for the materials and labor for that item, but what about disposal of this toxic junk 10 years later when it breaks or becomes obsolete? In California, there is now a $16 recycling fee charged to the consumer for this problem of hidden costs of TV’s. Good job California, but this is not applied in numerous other cases. For example, freakin oil! Oil is barely taxed, and in fact is subsidized greatly by giving oil companies huge tax breaks and for building up the worlds largest military force to make sure oil flows cheaply and quickly to America and their allies. Consumers are not charged for oil spills, for climate change due to burning oil, for the wars and military buildup, or for blowback for such wars, such as 9/11 or the USS Cole bombing. I started with a question, so I’ll end with one…If you were offered $1 million dollars, but your child would have to live with crippling Asthma, what would you do?
As for the Bush-Katrina, Oil Spill-Obama comparison. I have no special allegiance to Obama, and this site should prove that. But this comparison is utter madness. Katrina was a NATURAL DISASTER, which the government does and should evacuate and do emergency management. This oil spill is a CORPORATE DISASTER, perpetrated by a company in their greedy pursuit of ever more profit. This is their problem and their horrific mistake. If you want to complain about govt for this one, it’s terribly weak regulations, allowing deep water oil drilling in the first place, corruption, etc. Now the damage is done, and BP is screwing up the cleanup royally, so I can see why the entire US should help fix this, but a hurricane and this couldn’t be more different.
The only minor justice to come of this is if BP is forced into bankruptcy and all their assets liquidated to pay for the cleanup and job losses due to this disaster.
Rant out.
And this is one view of a hidden cost of oil…don’t forget about the illnesses suffered by the people trying to clean up this mess, similar to the World Trade Center workers and volunteers after 9/11. That dispersant stuff is horribly toxic.
Knowing inflation helps to understand whether a CD rate, wage raise, or mortgage rate is good or not. After deflation in 2008, inflation is back.
2009 Consumer Price Index: 2.7%
http://www.bls.gov/news.release/archives/cpi_01152010.htm
2009 Producer Price Index: 4.4%
http://www.bls.gov/news.release/archives/ppi_01202010.htm
I have an account with them, and I will be closing it ASAP. I never use it, and so I don’t check the monthly statements often. I just checked them and they had been charging me $20 per month for the past 3 months! I haven’t made a single transaction with this account in almost a year. I called twice, and finally was told it was a glitch. They thought my account had gone under the minimum amount, but of course this was a mistake.
I had strong words for them, and they did fix the “glitch,” or so they told me. If I had stolen $60 from Bank of America, they would put me in jail. But they can steal from me and get away with it by saying its a glitch. How am I supposed to know it won’t happen again. I know one way, closing the account and moving my money to a credit union in my neighborhood!
A common sense idea is gaining steam to get your money out of those Wall Street, “too big to fail” banks, such as BofA, Citigroup, Wells Fargo and JP Morgan Chase, and move them to your local bank. They are all FDIC insured up to $250k. Credit Unions are also a great thing to use and usually have higher interest rates for your cash savings. It’s a way of both punishing the banksters and making more money from whatever savings you may have.
Find a credit union near you here:
http://www.creditunion.coop/cu_locator/quickfind.php
The “Move Your Money” website with all the info:
http://moveyourmoney.info/
From the Inauguration, to Newspapers crumbling, to the Peace Prize, to Democrats. 2010 really is the Year of the Tiger!
Goodbye to 2009, Hello to 2010: Year of the Tiger
By ALEXANDER COCKBURN of Counter Punch
Once again hands are raised in stupefaction. How could they have missed him – meaning in this case Umar Abdulmutallab the Nigerian bomber on that flight from Amsterdam to Detroit. Why, his own father – one of the most powerful bankers in Africa – gave the US embassy in Lagos a warning! He was on the US master computer list of potential terrorists but never made it on to the watch list.
The Truthers reject the obvious answers – caution, bureaucratic inertia, buck-passing, turf fights – and say it was a plot. Obama joins Bush and Cheney in the big conspiracy. It won’t be long before David Griffin rushes out a book on the affair.
Personally, I’m not at all dismayed at evidence that intelligence gathering networks are flawed, that bureaucrats pass the buck. Hyper-efficiency in these matters indicates we have arrived at the perfect police state.
Of course there is room for common sense and elementary vigilance. In the case of the Virginia Tech killer there was plenty of evidence that Cho Seung-hui was a time bomb waiting to explode. Students talked about him as a possible shooter and refused to take classes with him. His essays so disturbed one of his teachers with their violent ravings that she arranged a secret signal in case she needed security during her tutorials.
And then was there was proof positive that the time bomb had exploded and the mass murder session began in the engineering building, the police state proved all too human in actual performance. The police cowered behind their cruisers until Cho Seung-hui finished off the last batch of his 32 victims, then killed himself. Then the police bravely rushed in and started sticking their guns in the faces of the traumatised students, screaming at them to freeze or be shot.
The new season of the PBS show “Frontline” began and check out the 2nd episode. It goes into the economic debacle, started on Wall Street and built on the idea that the economy should not be regulated or subject to democratic principles – leave “the market” alone. Sort of a religious view, of blind faith, oddly enough. All must bow at the altar of the free market! The first few minutes is very interesting showing how Alan Greenspan ran the economy for so long and his very close relationship as a disciple of Ayn Rand.
Pres. Ford, Greenspan, and Rand in the White House
I hope the US news companies all air this speech in its entirety today. If you don’t painfully remember, the basic theme of the speech: give money to me so I can keep the powerful from losing all their money, otherwise we are taking you all down with us. Quotes below, in chronological order, are doozies:
“Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets”
“These are not normal circumstances, the market is not functioning properly”
“…irresponsible actions of some, to undermine the financial security of all”
“…the government’s top economic experts warn…America could slip into a financial panic, and a distressing scenario would unfold…”
“[the bailout plan will] remove risks posed by ‘troubled assets'”
“we expect that much, if not all, of the tax dollars we invest, will be paid back”
“Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st century global economy remains regulated largely by outdated 20th century laws. Recently we have seen how one company can grow so large, that its failure jeopardizes the entire financial system.”
“democratic capitalism is the best system ever devised” (Did anyone ever get to vote for/against capitalism?!?! If not, how is it democratic exactly?)
“good luck losers, I’m retiring in two months!” (Okay, this last one was added by me)
I admit it, we regular folks lost the battle when that uber bailout of $800 billion was given to Wall St. banks. When Bush, Paulson, Geithner, Bernanke, Frank, Dodd, Reid and Pelosi gave all our money to bailout Wall Street corporations, aided and abetted by then-candidate Obama and McCain. The writing was on the wall and now Washington has ruled out a bailout for California, the 8th largest economy in the world, which has a $24.3 billion budget gap. Check out this excellent 30 minute report on California, called “Fault Lines – California: Failed State.” Hint: Milton Freidman would love the solutions being put at the front of the table…sell off all our parks and other public assets to private companies while any tax increases are out of the question. It sucks to lose, and we are just now starting to pay for it.
EXCERPTS:
“The US dollar will inevitably bear the full and ferocious brunt of the decidedly hyper-inflationary policies of Washington, notwithstanding the Federal Reserve’s empty promises to reverse such policies swiftly to protect the currency when inflation inevitably rears its ugly head again.”
“All the while, the strongest evidence indicates that when economic recovery finally arrives, it will be feeble at best for years to come. So the financial and economic sectors won’t be able to withstand any promised rapid reversal of Washington’s hyper-inflationary policies. But nor will the dollar be able to withstand the option of leaving such policies in place. Washington is therefore setting up the most colossal catch-22 imaginable for the dollar and for the US economy. The dollar cannot survive such a scenario intact.”
“China and its Eastern partners in Asia and the Middle East, have soured on the dollar’s future beyond the short to medium term. They’ve entirely lost faith in the ability of the US to really get its monetary, financial and economic houses in order before the repercussions of shortsighted policy come home to roost with a vengeance. They’re preparing new solutions that will take two or three more years to fully enact but which will shove the dollar aside toward the margins of international finance and international monetary policy. The handwriting is therefore on the wall for dollar-denominated financial assets.”
“When the catch-22 alluded to above soon becomes fully set in place and irreversible, say in the next few months when sufficient new sovereign debt is actually racked up, and then a short distance farther down the road when Washington, the Fed and the Treasury try to withdraw the present hyper-inflationary policies and find themselves fully trapped in that catch-22 bind, with no viable way out – say within the next 12 to 24 months – then Washington may have no choice but to let the Treasury default on some flavors of sovereign debt, while simultaneously inflating away some other flavors.”
“Unless the most rosy and unrealistic scenario comes about wherein vibrant US economic growth returns very soon, unless the government toxic asset and bailout plans become renowned successes, unless securitization gets a new lease on life and America is able to quickly get its house in order in the next three to four years, the dire forecasts here for US sovereign debt defaults and a dollar crisis, with all their colossal implications and repercussions, are unavoidable in the next 24 to 36 months at most. The UK and Japan face a similar outcome.”
http://www.atimes.com/atimes/Global_Economy/KE07Dj02.html
-Thanks G for the excerpts and link!
Where are the US news media and leaders? Simple economics 101 teaches that massive deficits and debt will lead to inflation or default or both. People should be warned so they can take measures to protect themselves!
Check out this short interview of the former chief economist of the IMF and current Economics professor at Harvard, Kenneth Rogoff. I don’t know of this person, but his analysis is pretty clear and easy to understand, and seems plausible. Check it out, but basically he’s saying that if we do everything correctly (big “if”), we should see about four years of recession, and start to see better days around the end of 2011. But at that time, we will have spent $8-9 trillion to get us out of the recession and banking crisis. He seems pretty sure that at that time, the plan is to use inflation to deal with the giant accumulated debt. So those folks who were smart enough to hold cash and avoid the stock market and housing bubbles will eventually get screwed too I guess!
If you don’t already watch the weekly show Now on PBS yet, we highly recommend it.
Check out this clip from the film “The American Ruling Class” made in 1998. It’s one thing to have “full employment” as economists say, but if it includes jobs that pay less than people can live on, those jobs shouldn’t count. On some level, it is true that as long as people don’t accept a job for less than they can live on, then we will be A-OK! But desperate people do dumb things, that’s just the way life is. This is where unions come into play. They require their members to only work for so much money and for the businesses that want their members to only hire folks from their union – thus making sure nobody is able to do the desperate thing. DON’T BE FOOLED, AND DON’T BE NICKEL AND DIMED!!!
The dialogue is a little corny, but the best part of the clip is the song at the end, sing along!
This article is in reference to the $450 million in bonuses going to AIG executives and other employees even though the US govt owns 80% of the company.
Published on Monday, March 16, 2009 by Salon.com
The Sanctity of AIG’s Contracts
by Glenn Greenwald
Larry Summers, March 15, 2009, on AIG’s payment of executive bonuses:
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.
Associated Press, February 18, 2009:
The United Auto Workers’ deal with Detroit’s three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies’ labor costs, people briefed on the agreement said today. The UAW announced Tuesday that it reached the tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive. CONCESSIONS WITH THE UNION ARE A CONDITION OF THE $17.4 BILLION IN GOVERNMENT LOANS that the automakers have received so far.
Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others….
http://www.commondreams.org/view/2009/03/16-6
Good job Larry Summers appointed by Obama. Looks like campaign contributions to Obama by Wall Street, Investment Banks, and Hedge Funds was money well spent. Did you know that former investment banker and current white house chief of staff Rahm Emanuel was the “top House recipient in the 2008 election cycle of contributions from hedge funds, private equity firms and the larger securities/investment industry?” If we don’t keep their feet to the fire, these jerks will keep getting away with applying one rule to the rich and well connected, and another rule to the rest of us!
http://www.opensecrets.org/news/2008/11/obamas-pick-for-chief-of-staff.html
So as of today in the United States, foreclosure is a major issue. One article says that there were 2 million foreclosures in 2008 and could be up to 10 million in “the coming years.” While this article says that “19 million homes and apartments across the country – one in seven – are now sitting vacant as the foreclosure crisis takes its toll.” And 1.5 million foreclosures a year are due to medical costs (can we get single-payer instituted TODAY please!).
So a woman in Florida is one of many homeowners who have figured out a way to fight back — force the bank to prove that they own your mortgage and show you their paperwork. A huge part of this whole mortgage meltdown is due to the fact that banks could sell away your loan to others. This previously non-existent commodity would be known as “mortgage backed securities.” This insane idea was concocted in the 1980’s at the firm Salomon Brothers (now a part of the also infamous Citigroup) and is detailed in Michael Lewis’ great book “Liars Poker.”
Check out this article explaining the story and how it may work for you.
We really are a country to envy, right?
So Christian at heart.
Man who froze over $1K in unpaid bills had $600K
BAY CITY, Mich – An attorney says a 93-year-old Michigan man who froze to death after a power company restricted electricity to his home over roughly $1,000 in unpaid bills left an estimated $600,000 to a hospital.
Marvin Schur’s attorney, Cathy Reder, told the Detroit Free Press the World War II veteran bequeathed his entire fortune to Bay Medical Center.
Schur’s frozen body was found Jan. 17, four days after Bay City Electric Light & Power installed a device on his electric meter that cuts power after a predetermined level is reached.
State regulators on Wednesday issued emergency rules designed to protect more people against electricity or heat shutoffs in the winter.
-Thanks A for the link
The view of serious observers:
The US and the UK are bankrupt and the defaults of the financial system and government will appear in the first half of this year. Many believe that the dollar will drop at least 20-30% (~ 1.75 to the euro), inflation will eventually increase a lot, official unemployment will remain above 10%. With a weak productive base and inefficient institutions in pensions, education, medicine, and transportation, the problems will continue for about a decade. East Asia and Eurozone will emerge first and slowly in 2010.
…
It shall be finished neither in spring 2009, nor in summer 2009, nor at the beginning of 2010. It is only towards the end of 2010 that the situation will start stabilizing again and improving a little in some regions of the world, i.e. Asia and the Eurozone, as well as in countries producing energy, mineral and food commodities (2). Elsewhere, it will continue; in particular in the US and UK, and in all the countries depending on their economy, where the duration could approximate a decade. In fact these countries should not expect any real return to growth before 2018.
…
I’ve found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers,” Roubini said at a conference in Dubai today. “If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS0yBnMR3USk
…
It’s no wonder that so many Icelanders are angry. They live in a country bankrupted by the excesses of their bankers, who took on liabilities 10 times the nation’s GDP, betting billions in Britain’s property bubble. Bailed out only by a jumbo IMF loan, inflation and interest rates are now 18% and rising. Many are considering emigration. Only membership of the euro, if it can be secured, offers a lifeline.
We too have a banking system that is huge in relation to our GDP, but, like Iceland, we are not in the euro. Unless we act quickly, decisively and cleverly, the difficulties of our banks could overwhelm us, triggering an enormous run on the pound. Britain, in short, risks bankruptcy.
http://www.guardian.co.uk/commentisfree/2009/jan/18/recession-banking
…
The Obama stimulus package is a good place to start, but it skirts the core issues of wages and debt relief.
http://www.informationclearinghouse.info/article21792.htm
…
I don’t believe the US has either the external credibility or the goodwill capital any longer to ask, Oliver Twist-like, for a little more leeway, a little more latitude. I believe that markets – both the private players and the large public players managing the foreign exchange reserves of the PRC, Hong Kong, Taiwan, Singapore, the Gulf states, Japan and other nations – will make this clear.
There will, before long (my best guess is between 2 and 5 years from now) be a global dumping of US dollar assets, including US government assets. Old habits die hard. The US dollar and US Treasury Bills and Bonds are still viewed as a safe haven by many. But learning takes place.
The US Federal government has taken on massive additional contingent liabilities through its bail out/underwriting of the US financial system (and possibly other bits of the US economic system that are too politically connected to fail). Together will the foreseeable increase in actual Federal government liabilities because of vastly increased future Federal deficits, this implies the need for a future private to public sector resource transfer that is most unlikely to be politically feasible without recourse to inflation. The only alternative is default on the Federal debt. There is little doubt, in my view, that the Federal authorities will choose the inflation and currency depreciation route over the default route.
If I can figure this out, so can anyone in the US or abroad who follows recent economic developments. The dawning of the realisation will lead to the dumping of the assets….
Given the bad fiscal position of the US Federal government and given the vulnerability of the external position of the US and its growing reliance on foreign funding, the scope for expansionary fiscal policy in the US is much more limited than president-elect Obama’s advisers appear to realise. Underneath the effective demand problem is a deep structural rot, especially in household sector and financial sector balance sheets.
http://blogs.ft.com/maverecon/2009/01/can-the-us-economy-afford-a-keynesian-stimulus/
-Thanks G for the links!
Capitalism, sometimes called Wall Street, works thusly, from this hilarious article by Joel Stein. For the record, I think kiva is a good idea, so long as the lender remains a SILENT partner!
Cupcake Kings Go Global, With a Little Help From Joel
By Joel Stein Wednesday, Nov. 26, 2008
Anyone can lend money; I am able to lend genius. So when I started making small loans to Third World entrepreneurs through the nonprofit website kiva.org I felt as though I wasn’t doing enough. That’s why a few weeks after I sent $25 to a baker in Nicaragua, I decided I needed to stop being a silent partner and start calling him all the time with my ideas.
Unfortunately, Freddy Antonio Castillo Luna doesn’t have e-mail or a phone in his bakery-home outside Managua. So I had to get a Kiva volunteer to go there with a cell phone and translate. My first suggestion was to change the name of the place from the Little Mango Bakery to the far more compelling Joel and Freddy’s Extreme Cupcakery. I thought the bakery should switch its focus from empanadas and breadsticks to extreme cupcakes, for which we would charge $4 apiece. I would have my loan repaid in five cupcakes, assuming generous tipping.
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