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The Real Crisis Is Not The Government Shutdown The inability of the media and politicians to focus on the real issues never ceases to amaze.
The real crisis is not the “debt ceiling crisis.” The government shutdown is merely a result of the Republicans using the debt limit ceiling to attempt to block the implementation of Obamacare. If the shutdown persists and becomes a problem, Obama has enough power under the various “war on terror” rulings to declare a national emergency and raise the debt ceiling by executive order. An executive branch that has the power to inter citizens indefinitely and to murder them without due process of law, can certainly set aside a ceiling on debt that jeopardizes the government.
The real crisis is that jobs offshoring by US corporations has permanently lowered US tax revenues by shifting what would have been consumer income, US GDP, and tax base to China, India, and other countries where wages and the cost of living are relatively low. On the spending side, twelve years of wars have inflated annual expenditures. The consequence is a wide deficit gap between revenues and expenditures.
Under the present circumstances, the deficit is too large to be closed. The Federal Reserve covers the deficit by printing $1,000 billion annually with which to purchase Treasury debt and mortgage-backed financial instruments. The use of the printing press on such a large scale undermines the US dollar’s role as reserve currency, the basis for US power. Raising the debt limit simply allows the real crisis to continue. More money will be printed with which to purchase more new debt issues needed to close the gap between revenues and expenditures. (Paul Craig Roberts)
THE FUTURE OF EMPLOYMENT: HOW SUSCEPTIBLE ARE JOBS TO COMPUTERISATION? Abstract: We examine how susceptible jobs are to computerisation. To as-sess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a
Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerisation on US labour market outcomes, with the primary objective of analysing the number of jobs at risk and the relationship between an occupation’s probability of computerisation, wages and educational attainment. According to our estimates, about 47 percent of total US employment is at risk. We further provide evidence that wages and educational attainment exhibit a strong negative relation-
ship with an occupation’s probability of computerisation. Keywords:Occupational Choice, Technological Change, Wage Inequality, Employment, Skill Demand (Oxford University)
Peaceful Protester Tasered Outside DOJ While Demanding Wall Street Prosecutions (VIDEO) Carmen Pittman had no intention of becoming an activist, but her bank, the Department of Justice and Occupy Atlanta turned her into one. Shortly before her grandmother died in 2011, the family realized that JPMorgan Chase was preparing to foreclose. HuffPost interviewed her late that year for a story on Occupy Atlanta and found a bewildered and desperate 21-year-old, talking about her childhood home in the past tense.
"My every Christmas, my every Thanksgiving, my every birthday, my every dinner was in this house," Pittman said then of a home that had been in her family since 1953. "This was the base home. We could not stay away from this home. This home is my every memory."
A year later, she won the house back from Chase. During the course of her fight, she was arrested for sitting on the floor of a local Chase branch and refusing to leave until the bank turned over the deed.
On Tuesday, she was camped out in front of the Department of Justice in Washington, having been fully transformed into an activist by her experience, asking why more Pittmans have been arrested related to the foreclosure fraud crisis than top Wall Street executives. She was answered with a stun gun.
The video above shows three large men surrounding Pittman as she tries to cover her face. Abruptly, an officer tasers her, and she crumples to the ground before being hauled off and arrested. (Huffington Post)
World Unites Against the Illuminati: Professor Griff on Fire! Infowars.com presents our groundbreaking interview with rap artist Professor Griff of Public Enemy.
Professor Griff lists Obama's lies, describes why hip hop stars are in the White House and breaks down some of the world's deadliest corporations.
Griff has always been an outspoken voice in the hip hop community and by combining forces with Alex Jones and Infowars, he attempts to break the public's mass-media induced coma. (Prison Planet)
Goldman Closes Gold Short It appears Goldman (together with virtually everyone else focused on physical not paper gold) has bought enough gold from its clients. Now, there is only upside.
Goldie on gold:
We closed our short trading recommendation on gold
We have closed our recommendation to short COMEX Gold, as prices moved above the stop at $1,400/toz. We have exited the trade significantly below our original target of $1,450/toz, for a potential gain of 10.4%. The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels. (Zero Hedge)
Flights are delayed at major East Coast airports as sequester-related furloughs begin After months of inside-the-Beltway drama, the impact of sequestration cutbacks moved to center stage America on Monday as the aviation system was slowed by the furlough of 1,500 air traffic controllers.
With about 10 percent of the controllers who direct 23,000 planes a day scheduled to be off daily until October, both industry and government officials forecast that the effect would snowball as the nation enters peak travel season.
Short on staff and besieged by brisk winds at the three big New York area airports, controllers fell behind by mid-morning Monday and never caught up. The Newark, LaGuardia and John F. Kennedy airports reported delays of one to three hours. (Washington Post)
What Happened The Last Time We Saw Gold Drop Like This? The rapidity of gold's drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly 'hurried' selling in the last five years. In July 2008, gold quickly dropped 21% - seemingly pre-empting the Lehman debacle and the collapse of the western banking system. In September 2011, gold fell 20% in a short period - as Europe's risks exploded and stocks slumped prompting a globally co-ordinated central bank intervention the likes of which we have not seen before. Given the almost-record-breaking drop in gold in the last few days, we wonder what is coming? (Zero Hedge)
Living With Less. A Lot Less. I LIVE in a 420-square-foot studio. I sleep in a bed that folds down from the wall. I have six dress shirts. I have 10 shallow bowls that I use for salads and main dishes. When people come over for dinner, I pull out my extendable dining room table. I don’t have a single CD or DVD and I have 10 percent of the books I once did.
I have come a long way from the life I had in the late ’90s, when, flush with cash from an Internet start-up sale, I had a giant house crammed with stuff — electronics and cars and appliances and gadgets.
Somehow this stuff ended up running my life, or a lot of it; the things I consumed ended up consuming me. My circumstances are unusual (not everyone gets an Internet windfall before turning 30), but my relationship with material things isn’t.
We live in a world of surfeit stuff, of big-box stores and 24-hour online shopping opportunities. Members of every socioeconomic bracket can and do deluge themselves with products.
There isn’t any indication that any of these things makes anyone any happier; in fact it seems the reverse may be true.
For me, it took 15 years, a great love and a lot of travel to get rid of all the inessential things I had collected and live a bigger, better, richer life with less. (New York Times)
End The Fed, Or Celebrate Its Existence? Reflections On Our Central Bank's 100th Anniversary (Op/Ed) This year marks the 100th anniversary of the Federal Reserve System. There will be many events commemorating the signing of the Federal Reserve Act in December 1913. Many of those events will be occasions for celebrations by Fed officials and staff, but should the public celebrate a century of central banking?
At the annual meeting of the American Economic Association in San Diego earlier this month, Harvard economist Kenneth Rogoff told a large audience that the Fed has been a "remarkably successful institution." During Q & A, Mark Skousen, author of The Making of Modern Economics, asked why the Fed failed to predict the financial crisis and the Great Recession—but Rogoff failed to answer. Later in that session, Donald Kohn, former vice chairman of the Fed, acknowledged that the Fed had made mistakes and should exercise humility. Yet, he is a firm believer in discretion rather than rules.
In another session, Allan H. Meltzer, the world's leading authority on the Federal Reserve, and a long-time proponent of a rules-based approach to monetary policy, was highly critical of the Fed's expansion of its power since 2007 under Ben Bernanke. "No group," said Meltzer, "should have unrestrained power that the Fed has taken for itself." (Forbes)
'Gates of Hell': France upping military presence in Mali conflict France is sending more troops to Mali to fight against al-Qaeda-linked militants. Paris claims the move is short-term, but delays to the deployment of an African security force have raised fears the conflict could spill over into neighboring nations.
The French government issued a statement that it would send 2,500 troops to support Malian government soldiers in the conflict against Islamist rebels. France has already deployed around 750 troops to Mali, and French carriers arrived in Bamako on Tuesday morning .
French president Francois Hollande hailed the latest overnight airstrikes on rebel targets as “achieving their goal,” but said that assembling an African force to reinforce French troops could take a “good week.” (Russia Today)
Global Risks 2013, Eighth Edition The World Economic Forum's Global Risks 2013 report is developed from an annual survey of over 1,000 experts from industry, government, academia and civil society who were asked to review a landscape of 50 global risks. - Rogue Deployment of Geoengineering.
In response to growing concerns about climate change, scientists are exploring ways in which they could, with international agreement, manipulate the earth’s climate. But what if this technology were to be hijacked by a rogue state or individual? (World Economic Forum)
Euros discarded as impoverished Greeks resort to bartering ~ Communities set up local currencies and exchange networks in attempt to beat the economic crisis It's been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.
But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.
"It's all about exchange and solidarity, helping one another out in these very hard times," enthused Ioanitou, her hair tucked under a floppy felt cap. "You could say a lot of us have dreams of a utopia without the euro."
In this bustling port city at the foot of Mount Pelion, in the heart of Greece's most fertile plain, locals have come up with a novel way of dealing with austerity – adopting their own alternative currency, known as the Tem. As the country struggles with its worst crisis in modern times, with Greeks losing up to 40% of their disposable income as a result of policies imposed in exchange for international aid, the system has been a huge success. Organisers say some 1,300 people have signed up to the informal bartering network. (London Guardian)
Paying with 'kisses' as Brazil’s social currencies spread Shopkeeper Heraldo Rodrigues da Silva, 55, owns a small store in Sao Benedito, one of the poorest neighbourhoods in Vitoria, the capital of the Brazilian state of Espirito Santo.
On the wall behind his counter, a sign announces that besides the real - Brazil's legal tender - he accepts the "bem", an alternative currency from a local community development bank, Banco Bem.
The goal of...a social currency is to encourage people to use that money within their community and contribute to the development of the local economy” (BBC)
How Corruption Is Strangling U.S. Innovation If there's been one topic that has entirely dominated the post-election landscape, it's the fiscal cliff. Will taxes be raised? Which programs will be cut? Who will blink first in negotiations? For all the talk of the fiscal cliff, however, I believe the US is facing a much more serious problem, one that has simply not been talked about at all: corruption. But this isn't the overt, "bartering of government favors in return for private kickbacks" corruption. Instead, this type of corruption has actually been legalized. And it is strangling both US competitiveness, and the ability for US firms to innovate.
The corruption to which I am referring is the phenomenon of money in politics.
Lawrence Lessig's Republic, Lost, details many of the distortions that occur as a result of all the money sloshing around in the political system: how elected representatives are being forced to spend an ever-increasing amount of their time chasing donors for funds, for example, as opposed to chasing citizens for votes. Former congressman and CIA director Leon Panetta described it as "legalized bribery"; something which has just "become part of the culture of how this place operates." (Harvard Business Review)
How A Former Big Bank Lawyer Taught His Old Bosses A $25 Billion Lesson Tom Cox is a lawyer who used to represent major banks. Now he's working to help Maine residents facing foreclosure keep their homes, and recently uncovered a massive fraud by five major mortgage lenders that led to a $25 billion dollar settlement to assist people driven into debt by shady business practices. Guess which job he found more satisfying?
CEO Council Demands Cuts To Poor, Elderly While Reaping Billions In Government Contracts, Tax Breaks The corporate CEOs who have made a high-profile foray into deficit negotiations have themselves been substantially responsible for the size of the deficit they now want closed.
The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies' tax bills.
The CEOs are part of a campaign run by the Peter Peterson-backed Center for a Responsible Federal Budget, which plans to spend at least $30 million pushing for a deficit reduction deal in the lame-duck session and beyond.
During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council -- most visibly, Goldman Sachs' Lloyd Blankfein and Honeywell's David Cote -- have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs -- Medicare, Medicaid, and Social Security -- which would disproportionately impact the poor and the elderly. (The Huffington Post)
Spain suspends house evictions for two years -- Spanish banks are suspending evictions for the next two years for the most vulnerable people. An estimated 350,000 families have been evicted from their homes since Spain's property market crashed in 2008.
It comes three days after Amaia Egana, who was 53, died after jumping from her fourth floor apartment in northern Spain, just before she was due to be evicted.
Her death has inflamed public anger at banks, accused of being heartless.
Another man in the city of Granada, whose house was also due to be repossessed, apparently committed suicide last month.
Spain's Finance Minister, Luis De Guindos, said it was important to find a bipartisan solution to the problem. (BBC)
Dow Jones Industrial Average Celebrates "Four More Years" With Biggest Drop In A Year It seems like only last night everyone was celebrating more hope, if not much change. Now comes the hangover. The Dow Jones intraday drop is now 2.23% (and rising), greater than the biggest drop so far in 2012 record on June 1. The last time the market plunged as much: literally one year ago, or November 9, 2011. Sadly, it appears that one can't have their Dow Jones Industrial Average and redistribute it too.
And if the surge in vol the last time we had moves of this magnitude is any indication, we can solmenly say that the world's most overrated job for the next 2 months (and 4 years) will be the Chief Redemption Officer, at any hedge fund.
and the S&P futures are at a critical level...below Draghi's Elbow... (Zero Hedge)
Obama May Levy Carbon Tax to Cut U.S. Deficit, HSBC Says Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.
A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.
Hurricane Sandy sparked discussion on climate protection in the election after presidential candidates focused on other debates, HSBC said. A continued Republican majority in the U.S. House of Representatives means Obama’s scope for action will be limited, Robins said. Cap-and-trade legislation stalled in the U.S. Senate after narrowly passing the house in 2009. (Bloomberg)
Gary Johnson Talks Nwo, Bilderberg & Bohemian Grove Gary Johnson has been an outspoken advocate for efficient government, balanced budgets, rational drug policy reform, protection of civil liberties, comprehensive tax reform, and personal freedom. As Governor of New Mexico, Johnson was known for his common sense business approach to governing. He eliminated New Mexico's budget deficit, cut the rate of growth in state government in half, and privatized half of the state prisons. (Prison Planet)
Global warming stopped 16 years ago, reveals Met Office report quietly released... and here is the chart to prove it The figures reveal that from the beginning of 1997 until August 2012 there was no discernible rise in aggregate global temperatures
This means that the ‘pause’ in global warming has now lasted for about the same time as the previous period when temperatures rose, 1980 to 1996 - The new data, compiled from more than 3,000 measuring points on land and sea, was issued quietly on the internet, without any media fanfare, and, until today, it has not been reported.
This stands in sharp contrast to the release of the previous figures six months ago, which went only to the end of 2010 – a very warm year.
Ending the data then means it is possible to show a slight warming trend since 1997, but 2011 and the first eight months of 2012 were much cooler, and thus this trend is erased. (UK Daily Mail)
£13tn hoard hidden from taxman by global elite Study estimates staggering size of offshore economy; Private banks help wealthiest to move cash into havens - A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore -- as much as the American and Japanese GDPs put together -- according to research commissioned by the campaign group Tax Justice Network.
James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.
He shows that at least £13tn -- perhaps up to £20tn -- has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier. (London Guardian)
Is This the End of Market Democracy? The 2012 election will offer voters a stark choice between right and left alternatives.
President Obama is calling for:
investing in things like education that gives everybody a chance to succeed. A tax code that makes sure everybody pays their fair share. And laws that make sure everybody follows the rules. That’s what will transform our economy. That’s what will grow our middle class again.
Republicans, in turn, are denouncing the expansion of a Democratic “entitlement society” and what they see as a trend toward European social democracy. They are calling for sharply reduced taxes, regulation and government spending to free market forces and revive private sector economic growth.
While Americans are going to be able to choose between two contrasting ideologies, what if both choices are off the mark? What if the legitimacy of free market capitalism in America is facing fundamental challenges that the candidates and their parties are not addressing?
Here are some of the issues that are making some politicians and political thinkers uneasy:
Are large segments of the American workforce — millions of people — at a structural disadvantage in the face of global competition, technological advance and ever more sophisticated forms of automation? Is this situation permanent?
Will the share of profits from improving corporate productivity flowing to capital and to high-earning C.E.O.s continue to grow, while the income of wage earners stagnates and their share of profits declines?
Has the surging wealth and income of the top one percent and of the top 0.1 percent reached a tipping point at which the political leverage of the very affluent decisively outweighs the influence of the electorate at large?
Is it possible that in the United States and Europe, democratic free market capitalism is no longer capable of providing broadly shared benefits to a solid majority of workers? (New York Times)
Robots will steal your job, but that's okay: How to Survive the Coming Economic Collapse You are about to become obsolete. You think that you are special, unique, and that whatever it is that you are doing is impossible to replace. You are wrong.
As we speak, millions of algorithms created by computer scientists are frantically running on servers all over the world with one sole purpose: do whatever we used to do, but better. These algorithms are intelligent computer programs, permeating the substrateof our society. They make financial decisions, they predict the weather, they suggest which countries will wage war next. Soon, there will be little left for us to do: machines will take over.
Does that sound like a futuristic fantasy? Maybe so. This argument is proposed by a growing, yet still fringe, community of thinkers, scientists and academics, who see the advancement of technology as a disruptive force which will soon transform our entire socio-economic system, forever. According to them, the displacement of labour by machines and computer intelligence will increase dramatically over the next decades. Such changes will be so drastic and quick that the market will not be able to abide in creating new opportunities for workers who lost their job, making unemployment not just part of a cycle, but structural in nature and chronically irreversible. It will be the end of work as we now it. (io9)
The Top Twelve Reasons Why You Should Hate the Mortgage Settlement As readers may know by now, 49 of 50 states have agreed to join the so-called mortgage settlement, with Oklahoma the lone refusenik. Although the fine points are still being hammered out, various news outlets (New York Times, Financial Times, Wall Street Journal) have details, with Dave Dayen’s overview at Firedoglake the best thus far.
The Wall Street Journal is also reporting that the SEC is about to launch some securities litigation against major banks. Since the statue of limitations has already run out on securities filings more than five years old, this means they’ll clip the banks for some of the very last (and dreckiest) deals they shoved out the door before the subprime market gave up the ghost.
The various news services are touting this pact at the biggest multi-state settlement since the tobacco deal in 1998. While narrowly accurate, this deal is bush league by comparison even though the underlying abuses in both cases have had devastating consequences.
The tobacco agreement was pegged as being worth nearly $250 billion over the first 25 years. Adjust that for inflation, and the disparity is even bigger. That shows you the difference in outcomes between a case where the prosecutors have solid evidence backing their charges, versus one where everyone know a lot of bad stuff happened, but no one has come close to marshaling the evidence. (Naked Capitalism)
49-State Foreclosure Fraud Settlement Will Be Finalized Thursday Forty-nine states, every one but Oklahoma, as well as federal regulators will participate in a foreclosure fraud settlement that will release the five biggest banks (Wells Fargo, Citi, Ally/GMAC, JPMorgan Chase and Bank of America) and their mortgage servicing units from liability for robo-signing and other forms of servicer abuse, in exchange for $25 billion in funding for legal aid, refinancing, short sales, restitution for wrongful foreclosures and principal reduction for underwater borrowers. The announcement will be made on Thursday.
This settlement arises from multiple abuses found in the servicing of loans and the foreclosure process over the past several years. At the height of the housing bubble, banks sliced and diced mortgages and traded them with little regard for the rules following land recording or securitization to such a sloppy extent that they lost track of the true owner on potentially millions of homes. To cover up for this massive failure, banks and their servicing units have been found to have routinely forged, back-dated and fabricated documents at county recorder offices and state courts across the country. Furthermore, they employed “robo-signers,” who signed hundreds of thousands (if not millions) of documents and affidavits without any knowledge of the underlying mortgages. In addition, investigations uncovered massive servicing abuses, including illegal fees charged to borrowers, putting borrowers into foreclosure at the same time as they were working out loan modifications, failing to honor previous settlements where promises were made on modifications, and countless other errors that maximized servicer profits and gouged homeowners. There are also cases of wrongful foreclosures where homeowners have been turned out of their homes without just cause, and servicer-driven foreclosures, where servicers illegally added late fees and applied payments inaccurately, pushing the homeowner into foreclosure. This is but a smattering of the examples of foreclosure fraud and servicer abuse found in a series of interlocking investigations, court depositions, reviews of documents in registers of deeds offices, and homeowner testimonials. (Fire Dog Lake)
Sacramento's Utilities Rates Advisory Commission approves water rate hikes Sacramento's Utilities Rates Advisory Commission voted 5-2 to raise water rates in the city by $19 a month over the next three years. The reason for the rate hike? It is to gain a loan from Goldman Sachs to renovate an aging water system. But that loan is going to raise water and sewer bills from $57 monthly to $350 a month in just 15 years.
The city council still must give its approval before the rate cuts are final. But officials seem more and more in support of this measure. City Council members must hear from their constituents that these rate hikes are unsustainable. In a city with near 11 percent unemployment, raising water and sewer bills will only put more financial strain upon the city's residents.
Also residents should be aware that this loan comes with a $10.8 million underwriting fee for Goldman Sachs. The loan itself would total $1.8 billion, and Goldman Sachs would also be making profit off that through interest. Sacramento is a city that is already struggling with painful budget cuts. Sacramento has had to lay off police and firefighters, as well as hundreds of teachers and other city employees. The city has closed libraries, and discontinued other public services. Can the city afford this loan? (Examiner)
America's Most Miserable Cities 1-10: Miami, Detroit, Flint, West Palm Beach, Sacramento, Chicago, Fort Lauderdale, Toledo, Rockford, Warren
Miami is a playground for the rich and famous. Celebrities flock to parties at South Beach clubs and then return to their $10 million mansions in Miami Beach and Key Biscayne. It’s a leading city in culture, finance and international trade. But away from the glitz and glamor, many ordinary Miamians are struggling.
A crippling housing crisis has cost multitudes of residents their homes and jobs. The metro area has one of the highest violent crime rates in the country and workers face lengthy daily commutes. Add it all up and Miami takes the top spot in our ranking of America’s Most Miserable Cities.
The most famous way to gauge misery is the Misery Index developed by economist Arthur Okun in the 1960s, which combines unemployment and inflation. Our take on misery is based on the things that people complain about on a regular basis.
We looked at 10 factors for the 200 largest metro areas and divisions in the U.S. Some are serious, like violent crime, unemployment rates, foreclosures, taxes (income and property), home prices and political corruption. Other factors we included are less weighty, like commute times, weather and how the area’s pro sports teams did. While sports, commuting and weather can be considered trivial by many, they can be the determining factor in the level of misery for a significant number of people. One tweak to this year’s list: we swapped out sales tax rates for property tax rates. Miami would have finished No. 1 under the old methodology as well (click here for more details about the criteria for the list). (Forbes)
How I woke up to the untruths of Barack Obama: The President's State of the Union address was as weaselly as any politician's could be.
When I happened to wake up in the middle of the night last Wednesday and caught the BBC World Service’s live relay of President Obama’s State of the Union address to Congress, two passages had me rubbing my eyes in disbelief.
The first came when, to applause, the President spoke about the banking crash which coincided with his barnstorming 2008 election campaign. “The house of cards collapsed,” he recalled. “We learned that mortgages had been sold to people who couldn’t afford or understand them.” He excoriated the banks which had “made huge bets and bonuses with other people’s money”, while “regulators looked the other way and didn’t have the authority to stop the bad behaviour”. This, said Obama, “was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work.”
I recalled a piece I wrote in this column on January 29, 2009, just after Obama took office. It was headlined: “This is the sub-prime house that Barack Obama built”. As a rising young Chicago politician in 1995, no one campaigned more actively than Mr Obama for an amendment to the US Community Reinvestment Act, legally requiring banks to lend huge sums to millions of poor, mainly black Americans, guaranteed by the two giant mortgage associations, Fannie Mae and Freddie Mac.
It was this Act, above all, which let the US housing bubble blow up, far beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. Yet, in 2005, no one more actively opposed moves to halt these reckless guarantees than Senator Obama, who received more donations from Fannie Mae than any other US politician (although Senator Hillary Clinton ran him close). (London Telegraph)
Sacramento's City Manager is demanding city employees pay more for pensions Sacramento's City Manager, John Shirey, threatened that 100 city employees would be laid off, unless all city employees paid more money towards their pensions. Currently, most city employees pay four percent of their paycheck to their pension; Shirey wants that raised to seven percent. If Shirey's proposal is enacted it would save the city $14.2 million. Seems like a simple enough solution right?
But what Shirey is leaving out of the story is that raising pension contributions is another word for pay cuts. Years ago the city bargained with its employees to cover a portion of employee's pension contributions in exchange for receiving no pay increase. In essence, a pay raise would result from the city covering a portion of the employee's pension contribution. So to now go back on that promise, to force city employees to pay the full employee contribution, would be to reverse those pay raises. Reversing pay raises means city employee's pay will be cut. (Examiner)
Awakening to Ron Paul’s Crony Capitalism Ron Paul believes in the feudalism of the land barons and gold bankers of King George. Ron Paul believes land and money are capital. Land and money are not capital. They are the common wealth. To declare any free market currency to be legal tender is state intervention and a corruption of free markets. Title to land is state intervention and corruption of free markets. The Bible and the classical liberals understand this distinction. Ron Paul does not understand this distinction. Ron Paul wants government to allow the banks and land barons to steal the common wealth. Ron Paul does not distinguish between earned wealth and wealth stolen through economic rent and monetary interest.
My article exposing Ron Paul as a globalist seeking the old world’s one world currency is getting a lot of traffic. Unfortunately, it seems a lot of people on forums discussing the article still have not awakened to the importance of the Endgame Ron Paul represents on the Grand Chessboard of the Red Symphony.
The awakening to the crimes of the New World Order is being misdirected into the worship of one man, Ron Paul, and into a blind faith of a false economic paradigm of crony capitalism and corruption of free markets of the worst kind by government, the Austrian School of Economics, funded by the same people, the Rockefeller Foundation, who take an active part in the funding and control of the New World Order. What is really dangerous is that it is sold as the opposition to the New World Order and as the opposition to crony capitalism and corruption of free markets by the government when it was funded by the New World Order and when it is crony capitalism and corruption of free markets by the government. (Liberty Revival)
Secret Fed Loans Gave Banks $13 Billion Banks worldwide earned an estimated $13 billion by taking advantage of below-market rates on emergency U.S. Federal Reserve loans from August 2007 through April 2010. Roll over the bars below to explore details for each. To compare results with banks' net income or losses for the same timeframes, click the corresponding button. Worldwide total is the sum for 190 firms with available data; those banks lost a combined $21.6 billion.
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue. (Bloomberg)
The shocking truth about the crackdown on Occupy: The violent police assaults across the US are no coincidence. Occupy has touched the third rail of our political class's venality US citizens of all political persuasions are still reeling from images of unparallelled police brutality in a coordinated crackdown against peaceful OWS protesters in cities across the nation this past week. An elderly woman was pepper-sprayed in the face; the scene of unresisting, supine students at UC Davis being pepper-sprayed by phalanxes of riot police went viral online; images proliferated of young women – targeted seemingly for their gender – screaming, dragged by the hair by police in riot gear; and the pictures of a young man, stunned and bleeding profusely from the head, emerged in the record of the middle-of-the-night clearing of Zuccotti Park.
But just when Americans thought we had the picture – was this crazy police and mayoral overkill, on a municipal level, in many different cities? – the picture darkened. The National Union of Journalists issued a Freedom of Information Act request to investigate possible federal involvement with law enforcement practices that appeared to target journalists. The New York Times reported that "New York cops have arrested, punched, whacked, shoved to the ground and tossed a barrier at reporters and photographers" covering protests. Reporters were asked by NYPD to raise their hands to prove they had credentials: when many dutifully did so, they were taken, upon threat of arrest, away from the story they were covering, and penned far from the site in which the news was unfolding. Other reporters wearing press passes were arrested and roughed up by cops, after being – falsely – informed by police that "It is illegal to take pictures on the sidewalk." (London Guardian)
UC Davis Chancellor Katehi walks to car amidst protesters After an hours-long impasse, UC Davis Chancellor Linda Katehi leaves the Surge II building on the UC Davis campus, accompanied by her husband Spyros Tseregounis and campus minister Kristin Stoneking. Video by Anna Sturla, HUB reporter. For photos and continuing coverage, go to http://bluedevilhub.com/
Occupy UC Davis Pepper Spray Incident, Four Perspectives I was stunned and appalled by the UC Davis Police spraying protestors, and struck by how many brave, curious people recorded the events. I took the four clearest videos and synchronized them. Citizen journalism FTW. Sources below.
New Book: Insider Trading Rampant in Congress: Members reap benefits of policy knowledge on Wall Street In Congress, it’s easy to do the kind of stock trading that “would send the rest of us to prison,” writes Peter Schweizer in a new book on the Hill’s upside-down ethics. Members of Congress are, of course, equipped with insider knowledge about upcoming policy, and they’re able to play the market based on that knowledge, Schweizer asserts. In Throw Them All Out, the author probes the trading activities of a handful of congressional leaders of both parties, and finds evidence of questionable dealings. (Newser)
Top 1% Nabs $30B a Year in Federal 'Welfare': Sen. Coburn investigates massive handouts They’re already in the top 1%, yet they’re getting government handouts worth more than NASA’s budget. American millionaires rake in $30 billion a year from the feds, Republican Sen. Tom Coburn finds in a new report. That’s three times the EPA’s yearly allotment, yet it’s going to people like Jon Bon Jovi, who got US cash to raise bees, and Scottie Pippen, who received hundreds of thousands in agriculture subsidies while he was a Chicago Bull. Even billionaires like Ted Turner are cashing in, Newsweek reports. (Newser)
The New Progressive Movement (Opinion) OCCUPY WALL STREET and its allied movements around the country are more than a walk in the park. They are most likely the start of a new era in America. Historians have noted that American politics moves in long swings. We are at the end of the 30-year Reagan era, a period that has culminated in soaring income for the top 1 percent and crushing unemployment or income stagnation for much of the rest. The overarching challenge of the coming years is to restore prosperity and power for the 99 percent.
Thirty years ago, a newly elected Ronald Reagan made a fateful judgment: “Government is not the solution to our problem. Government is the problem.” Taxes for the rich were slashed, as were outlays on public services and investments as a share of national income. Only the military and a few big transfer programs like Social Security, Medicare, Medicaid and veterans’ benefits were exempted from the squeeze.
Reagan’s was a fateful misdiagnosis. He completely overlooked the real issue — the rise of global competition in the information age — and fought a bogeyman, the government. Decades on, America pays the price of that misdiagnosis, with a nation singularly unprepared to face the global economic, energy and environmental challenges of our time. (New York Times)
The Inequality Map Foreign tourists are coming up to me on the streets and asking, “David, you have so many different kinds of inequality in your country. How can I tell which are socially acceptable and which are not?”
Foreign tourists are coming up to me on the streets and asking, “David, you have so many different kinds of inequality in your country. How can I tell which are socially acceptable and which are not?”
This is an excellent question. I will provide you with a guide to the American inequality map to help you avoid embarrassment.
Academic inequality is socially acceptable. It is perfectly fine to demonstrate that you are in the academic top 1 percent by wearing a Princeton, Harvard or Stanford sweatshirt.
Ancestor inequality is not socially acceptable. It is not permissible to go around bragging that your family came over on the Mayflower and that you are descended from generations of Throgmorton-Winthrops who bequeathed a legacy of good breeding and fine manners. (New York Times)
Occupy Oakland Deposits $20K at ... Wells Fargo: But don't worry, it's only for a little while! So much for Bank Transfer Day and, you know, railing against Wall Street: Occupy Oakland took its $20,000 straight to Wells Fargo, the fourth-largest bank holding company in the US. The group’s general assembly agreed—just about unanimously—to temporarily put the large donation from Occupy Wall Street into the big bank Monday, the San Francisco Examiner reports. Not surprisingly, the 162-8 vote (16 abstained) led to outrage on Twitter.
The Road Ahead for Occupy Wall Street To the Editor: Bill Keller misses the point of the Occupy Wall Street movement. An amalgam of issues motivates the millions of people throughout the country who have identified with the effort.
Their number includes students in debt for educations that do not lead to employment, homeowners whose property is underwater, individuals whose retirement savings are suddenly at risk, voters who see that those they elect tend to the needs of a constituency of which they are not a part, and people who see that the financial “experts” whose machinations brought down the economy are not held accountable.
These are Americans who deserve better than to be piously mocked for their lack of leadership and a constrained agenda. The incestuous liaison between financial power and elected politicians is the issue. Those who are a part of that partnership should take note that if elections don’t count and demonstrations are ignored, the Occupy movement may include civil disobedience or worse. (New York Times)
DA won't prosecute Occupy Sacramento protesters Occupy Sacramento protesters' push to continue their amorphous yet spirited around-the-clock campaign against economic inequalities got a powerful assist Monday from an unexpected source.
District Attorney Jan Scully announced Monday afternoon that her office would not file state charges against protesters arrested for refusing to disperse from an unlawful assembly after being ordered to do so by law enforcement.
Scully's position – that no unlawful assembly occurred – has her office ostensibly siding with the protesters and in direct conflict with the Sacramento Police Department.
"They are still in violation and we will continue to make the arrests," said Laura Peck, a police spokeswoman, in response to questions about continued arrests under the state law. (Sacramento Bee)
Reckless Endangerment: Totally Corrupt America Last March I reviewed Matt Taibbi’s important book Griftopia, an entertaining account of the through-going financial fraud that gave us the financial crisis. http://www.vdare.com/print/13156 Taibbi shows that the US “superpower” can match any third world backwater in the magnitude of greed and fraud that is endemic in business and government. I would not be surprised if Taibbi’s book motivated the more aware participants of Occupy Wall Street.
Taibbi’s Griftopia was published last year. This year Henry Holt publishers have provided us with Gretchen Morgenson and Joshur Rosner’s Reckless Endangerment.
Morgenson and Rosner tell the story again, but with less drama and provocation. Possibly, it might be more acceptable to those gullible Americans who wrap themselves in the flag and refuse to believe that their country could ever knowingly do anything that is wrong.
I am not suggesting that Morgenson and Rosner pull their punches. To the contrary, the authors deliver enough knockouts to be contenders with Taibbi as world champions in exposing the reckless fraud that the US financial sector and its regulators now epitomize. (Paul Craig Roberts)
New York cops defy order to arrest hundreds of 'Occupy Albany' protesters Occupy Albany protesters in New York’s capital city received an unexpected ally over the week: The state and local authorities.
According to the Albany Times Union, New York state troopers and Albany police did not adhere to a curfew crackdown on protesters urged by Gov. Andrew Cuomo (D) and Albany mayor Gerald Jennings.
Mass arrests seemed to be in the cards once Jennings directed officers to enforce the curfew on roughly 700 protesters occupying the city owned park. But as state police joined the local cops, protesters moved past the property line dividing city and state land. (The Raw Story)
Occupy Sacramento sues the city over First Amendment violations Occupy Sacramento is filing a lawsuit against the city of Sacramento for violating occupier's First Amendment rights. At a news conference this morning at 10:30 am, lawyers helping Occupy Sacramento announced that they were filing a lawsuit alleging that the city of Sacramento's anti-camping ordinance is violating the First Amendment right to peacefully assemble.
Today is day 19 of the occupation that began on October 6th, and so far there have been 75 arrests made simply for remaining in the public park after 11 pm. There have been no arrests for violence, and police have even stated in city council sessions that the occupiers are overwhelmingly peaceful. Thus, it stands to reason that if the occupiers are assembling peacefully, then they have constitutional protections over that assembly. No other law should infringe on this right to assemble. (Examiner.com)
Occupy-apalooza Strikes a Chord Thursday night I spoke to a young woman in Brooklyn who was having dinner and planning the next day. Between a morning boot camp workout at the local Y.M.C.A. and an evening meeting with friends for drinks, she was planning her first trek to Zuccotti Park to take part in the Occupy Wall Street protests.
“Why?” I asked. “What specifically are you protesting?” I was curious. I hoped that she’d respond with some variation of the umbrella arguments about income inequality, the evils of corporate greed and corruption or removing corporate money from politics.
She didn’t. “I don’t know. It’s just cool,” she said. She went on to tell me about how she felt that this was a movement of people with whom she felt some kinship, banding together and making history, and that she wanted to be a part of that in the same way that people from previous generations were part of the civil rights, women’s liberation and antiwar movements. (New York Times)
Why Occupy Wall Street Is Bigger Than Left vs. Right (Matt Taibbi) I was surprised, amused and annoyed all at once when I found out yesterday that some moron-provocateur linked to notorious right-wing cybergoon Andrew Breitbart had infiltrated
a series of private e-mail lists – including one that I have been participating in – and was using them to run an exposé on the supposed behind-the-scenes marionetting of the OWS movement by the liberal media.
According to various web reports, what happened was that a private "cyber-security researcher" named Thomas Ryan somehow accessed a series of email threads between various individuals and dumped them all on BigGovernment.com, Breitbart's site. Gawker is also reporting that Ryan forwarded some of these emails to the FBI and the NYPD.
I have no idea whether those email exchanges are the same as the ones I was involved with. But what is clear is that some private email exchanges between myself and a number of other people – mostly financial journalists and activists who know each other from having covered the crisis from the same angle in the last three years, people like Barry Ritholz, Dylan Ratigan, former regulator William Black, Glenn Greenwald and myself – ended up being made public. (Rolling Stone)
How politicians can kick the Wall Street habit So, protesters are occupying Wall Street and downtown banking districts in scores of other cities. Many Democratic politicos have endorsed the movement’s spirit and goals.
The pols are in no position to enact any further left-populist reforms — laws that create, say, a financial transaction tax, or that make it easier for employees to form unions — so long as Republicans control the House and have veto power in the Senate. For that matter, the Democrats couldn’t even get those bills enacted when they controlled both houses of Congress. So what, besides affirming their solidarity with the demonstrators, can they do? (Washington Post)
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