Thank You Mr. Feckless President

Part of the Dodd-Frank financial reform bill - at best a very tepid attempt to reign in the excesses of the financial industry – was the creation of the Consumer Finance Protection Bureau. The CFPB, a brainchild of Elizabeth Warren, now a senator from Massachusetts, was one of the only good things to come out of the act. Dodd-Frank’s already weak improvements in regulating the financial industry are currently being further watered down by a massive bankster lobbying effort. No matter how low the thieving banksters get, there always seems to be another moral nadir for them to plumb.

Warren was naturally slated to be nominated for the head of the CFPB, but since she’d certainly have faced stiff opposition from the Repugs, Obama was too chickenshit to nominate her. His fecklessness, in this case at least, was a great gift to the people, since Warren was then free to contest a senate seat which she won. Obama went on to nominate Richard Cordray, also a good pick for the post, but since the Repugs hate the idea of financial regulation as a matter of principle, they’re doing everything they can to block his appointment unless or until they can weaken the commission’s mandate into worthlessness.

Had Obama nominated Warren she’d be stuck in limbo, rather than be the strongest voice for banking and finance reform in the Senate. Lately she’s been pushing the idea of pegging student loan interest at the same level as what the big banks are paying. Student loan rates are soon to rise from 3.4% to 6.8% if new legislation isn’t passed. This is part of the cockamamie way politics is made in Washington, with temporary fixes to long-term problems that only require the same shit sausage to be recycled again later. Meanwhile the banks are paying 0.75% so she’s been asking why students should be paying 9 times as much interest as the banksters.

It gets worse: The US government earned a cool $51 billion from the student loan program last year. So the US is making a lot of money off of the backs of struggling students at the same time it is paying the banks to take its money. When you charge less than the rate of inflation, you are essentially giving the money away. One of the ways the banksters have been using that free money is to turn around and buy US treasuries - which are now paying about 2%. This free money is one of the reasons why the banks just posted their best profits ever.

Senator Warren will hold their feet to the fire. They’ll get away with their shenanigans for now because they own the government, but Warren will be relentless in changing the paradigm and I dare say, if she chose to run for president in 2016 she’d give Hillary a run for her money.

So thank you Mr. Feckless President for giving us Senator Elizabeth Warren.

Student loan debt, at $1.1 trillion, now exceeds credit card debt, with the average student owing about $27,000 at graduation. What’s more, student loan debt cannot be written off in bankruptcy, except in very rare circumstances. A lot of that debt has been taken on because government is no longer willing to support higher education to the extent it once was or should be. After all, an educated citizenry is one of the primary goals of society, so it makes no sense to punish people who seek a higher education who don’t happen to have rich parents. Anytime anyone who could benefit from higher education is denied the opportunity, the whole society loses.

In some European countries, students who qualify for public universities not only do not pay tuition but also receive a stipend to allow them to concentrate on their studies. I graduated from City College (now University) of New York, while working 30 hours a week and single parenting. It was very tough, but it would have been impossible if I’d had to pay tuition. At the time, back in the sixties, tuition was free, I only had to pay a small student fee and buy textbooks. Today there are no (that I know of) free public institutions of higher learning in America, and many of them are not just charging tuition but charging a lot.

Charging high tuition at public colleges and gouging of student borrowers is part of the trend in the last 30 years of the 1% not being willing to pay their fair share of the cost of a healthy and educated society. Personal responsibility, they scream, while they pad their own deep pockets with tax breaks and corporate welfare. They bankrupt their banks by making casino bets with the people’s money, knowing Joe Schmo, the US taxpayer, will bail them out, while they rail against the 47% who only want government handouts for inconsequential things like food, health care, shelter, education. Congress wants to cut back on the food stamp program, literally taking food out of the mouths of children, to save a few billion dollars, while refusing to consider a very small stock transaction tax - 0.5% - that would yield $350 billion a year.

One Repug congressman working hard to cut slothful unworthy takers off of food stamps, is himself a very big benefactor of farmer’s welfare programs, the biggest receiver of farm aid in his state. But, of course, that’s somehow different.

In fact, the Repugs only control the House of Representatives by a wide margin because of efficient gerrymandering, since Dumbo candidates for the house received more votes in total than the Repugs. That disconnect doesn’t happen only in the US: in the recent Malaysian election the ruling party won 60% of the seats even though the opposition won the popular vote. Democracy is sloppy, but that’s unfortunately all we have to work with.

Meanwhile there are individuals like Elizabeth Warren who rise up to make great changes in spite of the built-in disadvantages of the political systems they are forced to work with.

Elite Cluelessness - Cyprus & Singapore

 

Cyprus

The recent economic turmoil in Cyprus once again displays how clueless and disconnected the ruling elite are from the reality of people’s lives; once again provides a striking example of their desire, nay obsession, to minimize impacts on the wealthy by taking from the poor.

Cyprus has gained a lot economically by being a haven for offshore banking – their banks’ assets are several times the economy - and so it was easy for the Troika – IMF, European Central Bank and European Commission – to look for bailout money from account holders. A large percentage are owned by Russians and a good percentage of that is shady money being laundered, so to penalize the country they devised a scheme that would levy a one-time tax of 6.7% on accounts of less than €100,000 and 9.9% on accounts over €100,000.

That was a bald-faced attempt to steal from the poor, while concurrently minimizing losses for the rich. Before that proposal was made, it was believed by all depositors in all European banks that all accounts under €100,000 were insured, guaranteed, rock solid. Up until that point, all felt safe that nothing less than a total breakdown of society would jeopardize their savings.

Instead, people with €1000 in the bank were expected to do their share, to the tune of  €67, to save their incompetent banksters. After all, if the little people weren’t taxed than the rich would have to pay a lot more. That made it an easy step to propose reneging on their previous hard-wired guarantee. Not only did all hell break loose in Cyprus, and all legislators in parliament either voted against the proposal or abstained, but now, regardless of the Troika’s insistence that that was a one-off and only applied to Cyprus and no other average people would be forced to assist in bailing out banks in the other Eurozone countries experiencing financial difficulties, nobody will be able to trust that €100,000 guarantee. It’s finished, nobody with money in the bank will feel completely safe again.

They then tried to float basically the same idea but exempt the first €20,000, but that was only marginally more acceptable than the first rip-off plan. The latest proposal is that only deposits above €100,000 would get hit, which is they way it should’ve been from the start.
A guarantee is a guarantee. If you had €100,001 in the bank, you knew the first €100,000 was protected, but that you were taking a chance on the last €1. Especially if you were putting your money in a notorious offshore banking center, unless you are a complete idiot, you had to know there was a good chance, however remote, that you could lose out. That’s what capitalism is supposed to be all about; You invest, you speculate, you take your chances; you win some, you lose some. Instead the elite seek to protect banksters and their investors and wealthy depositors at all costs and the little people are left to foot the bill and then fend for themselves.

The elite have gotten so isolated from masses they live in their own personal bubble and can no longer relate to the real world of the 99%. Like when Romney was asked what a person could do when they couldn’t find a job in a very tough market for job-seekers, he said, Ask your parents for money to start a business. Yes, very simple, ask your parents.

Personally, I prefer in all the chaos afoot that Cyprus is ‘forced out of the Eurozone’. As mentioned in a previous post, leaving the Euro and having their own currency will not stop most transactions in the country being in Euro. Having their own currency used alongside the Euro, as happens in Cambodia where about 80 to 90% of all transactions are in US Dollars, will give them some flexibility. What Cyprus ‘leaving’ the Euro would do is begin a two-tiered currency system in many European countries in which Euro and local money are used side-by-side. It would also be two-tiered in the sense that the Euro would be a master currency backed by and used exclusively in the strongest northern countries – Germany, France, Netherlands, Belgium, Austria - with the remainder of individual states issuing their own currencies for local transactions; for instance, all government salaries and payments to government offices would be in local money. Once the local money finds its proper value - it would be volatile at first - the individual states would try to maintain it within a narrow range compared to the Euro. Cambodia, for instance, has kept its currency within a 5% range of value compared to the USD for the 11 years I’ve lived in the country, so it’s accepted along with dollars with little or no discounting and there’s no need to recalculate every day.

Regardless of how the bailout evolves, Cypriots are in for serious hard times with massive unemployment and punishing austerity for as much as a decade. They got rich off of being an offshore banking haven, now they will pay the price. Once again, the lure of big bucks casts aside all doubts, restraints and reason and it’s full speed ahead until the ship hits an iceberg.

Singapore

In February, Singapore experienced its largest ever demonstration; 4000 people turned up to protest against the government’s push for increased immigration. People tend not to protest there since they are wealthy and relatively content in the world’s number one nanny state, not to mention the government oppressively and forcefully frowns upon such activity.

The demonstration, along with the loss of a seat in the legislature to the opposition in a by-election, quite stunned the ruling elite. The Lee family, which has ruled the city-state since independence in the sixties, now has to contend with the largest opposition ever – they now have 7 seats in the 87 seat body. Until recently, the largest opposition contingent was four. That is not because 95% of the population has always solidly backed the government, rather the government has devised a painless (for them) and bloodless means of eliminating all official dissent.

The first time an opposition member of parliament makes a statement deemed to hurt the feelings of the ruling family, he/she is sued for defamation for everything they’ve got and is subsequently bankrupted – the government never looses such a case – and once bankrupt is no longer eligible to sit in the legislature.

But this is the 21^st century and people over the world are finding their voices and are less able to remain pliant and docile when they feel impacted by social changes that are not to their liking.

Singapore’s population of 5.2 million is now 40% foreign born, up from 22% about twenty years ago. The protest was in response to a government white paper which seeks to add another million and a half immigrants to the city by 2030. The government insists that the country needs more people to continue its industrial and economic growth, but their citizens, like wealthy populations everywhere, are not much interested in making babies. The birthrate there is even low by wealthy country standards. They’ve tried everything including special benefits for having kids and even a government dating service, to no avail.

As almost everywhere the government is locked into endless growth, growth as the be-all and end-all of society, as its guiding philosophy. Bhutan, which is promoting a Gross Happiness Index in place of Gross Domestic Product, is probably the world’s only exception. If Singapore has more people and more wealth, that must be a good thing, no?

However, while the government sees immigration as a  path to increased wealth, the protesters, as the majority of the people at large, see higher property prices, competition for jobs which lowers wages, more crowded public transportation and strains on public services.

The question is; Growth for who? It certainly isn’t the commoners who benefit, it’s strictly the elite who benefit from growth in a mature economy. Growth can be justifiable in a developing country which has large numbers of desperately poor people. In developed countries, small places can be improved by expansion if that growth adds intellectual and financial opportunity, but once a location reaches a certain size, it’s mostly downhill, at least in terms of livability. Sure there’s lots of money to be made in megalopolises, but if you’re in a place like LA and have to spend two to four hours a day commuting, the money no longer has the same value.

Some countries with large geographic areas but small populations, such as Canada and Australia, can benefit from immigration, but Singapore with an area the size of New York City and a projected 7 million people – about the same as NYC - will be just as crowded and difficult to live in, especially for the lower classes. The wealthy have no concerns about housing prices or overburdened public transportation. The country’s legislators earn more than a million dollars a year, so would have little concept for what their constituents deal with on a daily basis.

Singapore’s rulers have never had to consider the people’s wishes before and I’m sure they’ll continue to use their defamation magic to try to quash their token opposition, but the tide is turning and they will be forced to listen to the people.

Personally I’m a fan of immigration, at least in theory. I’m one myself, though few would refer to me that way, but after 11 years in Cambodia, what else could I be? One could even consider me an economic migrant, since I could not make it in my native land without abject penury and bemoaning my fate 24/7. Cambodia’s lax immigration policy has brought hundreds of thousands of relatively wealthy expats to live here. My lowly pension is still several times Cambodia’s per capita income so I’m making a positive contribution in spite of it all.  

Immigration would also be a good idea for countries like Korea, which has the world’s most homogeneous population and Japan with the second most, even though both countries are relatively crowded, because they desperately need lessons in and experience with relating to diverse peoples.

As a long time expat estranged from my own country, it’s unsurprising that I believe that one of the best movements for the world is immigration that mixes people up and gets us closer to understanding each other. That isn’t to say it isn’t extremely important that immigration happen at a slow measured pace otherwise backlashes that have destabilizing impacts are possible.

Welcome to the world.

QE3 - Not for You and Me

QE 1 and 2 worked so well the US Fed has figured it’d be great to go for another round. QE stands for Quantitative Easing, which is a lot like printing money in common terms. The first two involved printing a half-trillion dollars each, which was used to buy near worthless mortgage backed securities from the banks at face value. As a result of those QEs and lots of other money lent to the banks at near zero interest - which, since those super-low interest rates are less than the rate of inflation, is akin to paying the banks to take that money - the stock markets are near all-time highs, corporate profits are soaring to the point that American corporations are sitting on nearly $2 trillion dollars of cash reserves and the 1% are seeing massive gains in their wealth. So it’s worked out fabulously.

Well now, that was a joke, that’s not really why they did it, or why they said they did it. As it happens, the 1% already have a greater share of national income than at any time since 1929. No it’s because they’re worried about unemployment continuing to be stubbornly high and the economy being in the doldrums for a large number of Americans. Which brings up Einstein’s definition of insanity; that is, repeatedly doing the same thing while expecting a different outcome. But feeding the banksters is the only thing they know how to do, it’s the only trick in their bag, so they have to keep plugging away at it.

With all that extra money to play with the banks - or so the theory goes - will be eager to lend it out to businesses who actually need it to do real, productive work in the economy and finally some of it will trickle down to the masses. But that involves risk, it’s much easier to take that new-found free money and buy US treasuries at 2% interest. When they do indulge in risk they speculate on commodities, which inevitably raises the cost of basic foodstuffs and other necessities of life, but hey, that’s the magic of the free market – goods and services are allocated where they can create the most benefit for those capable of paying for them.

QE 3 will mean a mere $40 billion per month, with no end date, of new printed money. It’s free money, figmentary money, conjured up out of thin air, which means, at least in theory, it should cause inflation – if you’ve got an increased amount of money relative to economic size and capacity, then each dollar should be worth less. That’s actually not happening today since in spite of the inherent weakness in the American economy and its massive public debt and budget deficits, there’s such economic turmoil in the world, the dollar still constitutes a safe bet in the minds of many people and so world investors sitting on huge piles of cash have been flocking to US Treasuries. That cheap money that’s easy to print while still maintaining value cannot last indefinitely without drastic belt-tightening changes which are extremely unlikely to happen. If/when the dollar crashes it’ll come suddenly with almost no warning.

Meanwhile as long as it’s so cheap and easy to create money with no ties to anything real, anything of value, why not use it to actually create value? Why not use it in a way that actually makes a difference for somebody besides the bankster 1%? I realize it’s an immense stretch for America’s political and financial leaders - not to mention those of the UK and EU and others who are also indulging in printing money to feed the banksters - to imagine using that imaginary money for the public good, but just in case they’re struck by lightning and come within an inch of death, or close enough anyway, to have a change of heart, here are some thoughts how that free money could be used.

Forty billion dollars would buy a new extensive light rail system for eight to ten American cities. In a few months every city large enough to be able to take advantage of efficient, clean light rail would have one. Roads, bridges, sewage systems, electrical grids, alternate energy applications… whatever, $40b per month is not small change.

The anti-poverty programs of the sixties and seventies (not to mention the programs of the Great Depression) could be resurrected. In the late seventies at the end of Lyndon Johnson’s War on Poverty, before the Reagan revolution changed the US government’s focus to a war on poor people, I participated twice in the make-work, CETA – Comprehensive Employment Training Act – program. Anyone who was out of work for more than a year was eligible.

The first time I helped build a play structure in a small church-owned but publicly accessible park. CETA provided our wages and a small amount of money for administering the contract. The artist/sculptor who they wanted to do the job wasn’t eligible so I agreed to take the job but then work half time and share the pay with him. It was a six month contract which paid $833 month - $10,000 on an annual basis. Not a lot of money even back then, but enough to keep from begging or depending on other people for housing and food. CETA jobs lasted a maximum of one year and weren’t intended to be comfortable jobs but only tide you over until you could find a ‘real’ job and hopefully learn something in the process.

Just after that contract ended another CETA job opened up in a community recycling program. The business in question had been picking up food waste but didn’t have a good method for processing it. It’s great stuff when composted but super grody and a bear to deal with. That was a year’s contract for four staff. We learned a lot about composting that year and produced a decent report, but frankly the subject matter didn’t really warrant four people working full-time for a year. The occasional boondoggle aspect was one of the reasons conservatives hated the program so much. Still it kept us (me anyway) off the streets and provided a survivable income.

It also introduced me to a group of people doing a recycling program where I eventually spent 13 years and it became the major focus of my working life. And I was able buy a house on contract because I had a steady income for a year and a half which gave the seller confidence that I could make the payments. Today it’s tough love for the people, welfare for the banksters.

As long as QE money is ‘free’, not costing anybody anything (aside from the future possibility of inflation), not connected in any way to productive endeavor, now only going to line the pockets of the country’s wealthiest citizens, why not spread some of that largesse around? Why not get people working, provide a little hope for the future and a little pocket change for the present? Never. Cannot happen. The poor barely exist in the American political lexicon, now only the middle class matters and according to both candidates that includes people earning up to $250,000 per year, a figure which puts them in the top 3%.

Now the so-called fiscal cliff is approaching. According to agreements made in the past, if the Congress was unable to come up with a reasonable deficit reduction plan, there will be automatic cuts in spending and a return to pre-Bush taxes. In other words, the economy will head downhill, just as many of Europe’s economies are. It’s obvious if you increase taxes and cut public spending, then you will increase unemployment and generally hurt the economy. So now even the Repugs are turning into (back-door) Keynesians.

The only way to increase government revenue without harming the economy is by taxing the wealthy and their special breaks (taxing capital gains at less than working income, exempting inheritance from taxation and giving them a free ride on their stock transactions) since their excessive wealth does nothing good for the economy while their excessive speculation and high-speed trading are truly destructive.

Needless to say that can’t happen since they own the government.

In other news, Hurricane Sandy, a storm of unprecedented size, helped along by ocean temperatures 5º F above normal, wreaked havoc in the eastern US. Global warming, which unquestionably had an impact on the size and severity of the storm, was never mentioned in the debates for good reason: Both candidates were allowed to vet every question, neither wished to broach that uncomfortable topic. However, unprecedented storms, droughts and heat waves have a way of intruding on preordained debate questions. Without drastic changes, starting yesterday, in the way energy is produced and used in the world, and especially the US, then the worst, not to mention the unthinkable, is yet to come.

Meanwhile, after nearly two years of campaigning, the election is finally upon us. Mr. Pain Capital, who earned his money bankrupting healthy companies or sending their jobs to China is neck and neck in the national polls with Mr. Hopelessly Compromised. Still, in American elections the popular vote doesn’t mean much, it’s the votes of the individual states that matter. In that case Obama is ahead, though, as in the case of Ohio, not enough to insure against fraud and theft. He only won last time because his margin was too great to allow for Repugs to steal the election.

The reason why election theft is still a realistic possibility in spite of Bush’s boys stealing two elections in a row is that the Dumbos never thought it was important enough to pursue, uncover and root out the causes of the theft. They never thought it was important enough to hold hearings, do research, fight to have voting machines count honestly. Most of you will be amazed to learn that, according to Jimmy Carter, foremost authority on honest elections, Venezuela has the cleanest elections he’s ever monitored. Simply put, they have machines which in addition to electronic counts also produce a receipt which allows the voter to double check to make sure their vote is counted correctly. Incredibly simple.

Not in America where voting machines are owned and operated by private companies which are allowed to hide their software under the guise that it’s proprietary information. And if many voting machines in Ohio are owned by companies connected to Romney’s son or his partners at Pain Capital, where he still is reaping large returns, well, what the hell. According to the Dumbos, or so it would seem, if you’re smart enough to steal an election, then you must deserve it. Otherwise they would’ve fought like hell against the brazen thievery that put Bush into office twice.

It's the Paradigm

Bankia, one of Spain’s largest banks, is needing a €23 billion bailout, to compensate for their over-zealous investments in the country’s late real estate boom gone bust. Throw in a few other teetering banks and the price tag rises to €50. The only way to thrive or even survive in a scenario of irrationally exuberant lending is to borrow more to keep the growth paradigm going. In other words, as long as the value of property is expanding, it’s not necessary to be rational in your investments. But then, as always happens with bubbles, they burst - it is a part of their nature, after all.

There are two ways that happens, though they’re often intertwined. One is inflated prices. At a certain point, prices have to reflect reality. The other is larger economic movements. The general economic malaise that pervades the country depresses optimism and growth. Either way, the loan is defaulted and somebody is going to have to pay.

Spain wants the European Central Bank to bailout the banks directly. That makes sense, since it’s the system, the paradigm, which encourages, almost demands imprudent lending. Used to be you had to put 20% down to buy a house. A buyer who’s accumulated that much cash will generally be a low level risk. However that would also constrict the market and slow down construction so we can’t have any of that. Instead the establishment wisdom is to push the economy to the limit, go for broke, the more growth the better.

The country is also at fault since it could’ve established rules and policies designed more for stability and prudence than growth at any cost. That would not be an easy task in today’s financial environment. There are only so many Hugo Chavez’s in the world who could ignore the dictates of the establishment view.

The borrower, of course, must take a substantial portion of the blame for the broken contract, but ultimately is has to rest with the bank to assume responsibility and take the loss. Banking is about risk; banksters know the level of risk they are undertaking. If you aren’t smart about lending your money, who else is supposed to compensate for your inadequacy?

Actually it’s the taxpayer who coughs up since some type of deposit insurance is essential to a functioning banking system. (But not in Cambodia, here you’re on your own.) There should be no question or hesitation when a bank gets into trouble; it should be shut down and small depositors paid off. There’s no good reason to keep a stupidly or irresponsibly run bank alive. Also as long as the taxpayer is on the hook to insure depositors the government has responsibility to properly regulate to prevent speculation that has the potential to get the bank into trouble. However, since the banksters own the government, at least in the US, we know there can be no changes on that front.

In Europe it may be different, since they have a more socialist, egalitarian political outlook and the people are hopping mad. Still, there’s a very powerful push on the part of the financial establishment for European countries to ‘take their medicine’, that is, to strip any benefits that might aid the 99% so that they’d have the money to feed the banksters.

Still, can you imagine, Spain coughs up €50 to protect the banks at the same time they’re slashing safety net funds in an economy with 25% unemployment? In fact, latest news is that the Spanish government has accepted a $125 billion loan to bailout its banks… anything to protect the banksters.

The European establishment may be forced to change the paradigm but Americans will never get it together if the recent recall result in Wisconsin is any indicator. Governor Scott Walker, who was elected in a Tea Party surge in 2010, started off giving $180 million in tax breaks to business and then discovered there wasn’t enough money to pay public employees. His ultimate goal, unstated in the campaign, was to break the public unions, which he proceeded to do by virtue of Repug control of both houses of state government.

This didn’t sit well with the unions or the progressive community so they fought back with a signature gathering campaign to recall the governor. The got the necessary signatures, all right, but lost badly in the election with Walker sustained in office by a 53% to 46% vote. There are two immediate reasons why the Repug won. The most important was the flood of money from right-wing billionaire assholes. According to the US Supreme Court - which today garners the support of only 44% of the people - money has the right of free speech. The other reason was that Obama gave the campaign neither financial or moral support. The feckless wonder did not stand by the people. The Dem running against Walker had $4 million and was outspent 8 to 1. Obama made $3.5 million in one fundraising event but couldn’t see his way to helping a fellow Dem.

The fundamental reason for the Dem’s defeat is that Americans, at least a lot of them, are political morons. It’s called the Fox News effect: A recent study showed people who watched Fox were less informed than people who watched no news at all. It’s people who rail against socialism at the same time they love their Medicare, that socialist program that would save the country $400 billion a year if it applied to everyone. It isn’t just the average low IQ wingnut dolt that doesn’t know their ass from a hole in the ground. You’ve got Romney and the Repugs insisting on programs of slashing public services to pay for tax cuts for the wealthy as a path to economic recovery when that’s been an abject failure since Reagan.

Once again Americans face a disheartening lack of choice this November, though the country will slide downhill a little slower with Obama at the helm. In the end result, the people get the politics they deserve… unfortunately.

  

ECB Showers Banksters with Money

The European Central Bank recently announced that it was going to provide European banks with an additional €500 billion - $700 billion - in loans at a rate of 1%, which is below the rate of inflation. This came on top of another tranche of the same amount given to them only last December. By loaning money at less than inflation the ECB is literally paying the banks to take their money. Money which, by the way, was conjured up out of thin air. Technically, it’s referred to as quantitative easing; basically printing money so there’s lots of it sloshing around the system.

It is said one benefit of throwing money at the banks is that they’ve been willing to lend to sovereign governments like Italy and Spain at lower interest rates than previously, accepting 5% instead of an unsustainable 7% as before. So borrow at 1%, turn around and lend at 5% and make a tidy profit. Meanwhile, those countries get to borrow at a close to unsustainable 5% instead of a totally unsustainable 7%.

But now you’re thinking that this is all very strange. Why not loan the money directly to Greece, Italy, Spain at 1%, avoid the bankster middlemen and make the additional sovereign debt not only sustainable but light as a feather. No, no, it can’t work that way. While the banks are silver-spoon-fed the people have to sacrifice and suffer, that’s the only way to teach them a lesson and get them on the road to fiscal rectitude.

As a result, one of the austerity measures required by the multinational-institution troika - the ECB, IMF and European Commission - for Greece to get its latest bailout at about 3 or 4% interest (Greece fought to have its debt reconfigured down to that level) is that the minimum wage be lowered from about $1000 to less than $800 per month for people over 25 and down to less than $600 for under 25’s.

Now Greece isn’t rich like Germany or Sweden, but it’s not a developing country. Six hundred dollars a month is doable in Cambodia, though nothing like high-living, where one can rent a city apartment or single family house and yard in a small town for less than $150 per month and everything produced locally is very cheap, but the same amount in Greece or even $800 per month is a life of hardship and privation.

Besides, you’re wondering again, how does lowering people’s wages lead to reducing the country’s debt? What’s the connection? Supposedly, if people work for subsistence wages, businesses will eventually come and employ them and the economy will start rolling again. The flaw in that thinking is that people who earn such low wages don’t pay much in taxes and are so poor they still need safety net assistance. They also don’t have the money to be consumers. And like in America, businesses don’t pay much in taxes in any circumstances because that’s what the corporate conservatism that’s taken hold of the developed world in the last thirty years demands. So even if businesses do come because of the low wages, they’re still not contributing much to the tax base.

Instead of relegating large numbers of Greeks to lives of poverty in order to please and serve the banksters, why not use some of that $1.4 trillion dollars to put the people to work at living wages doing things designed to bring the country forward to the future, like building trains and infrastructure and installing windmills and solar electric systems? That way they’d be paying taxes and be able to consume and get the economy moving. It’s free money after all, nobody paid for it, all it costs the ECB is the paper to print it on and the labor to keep the presses rolling. Why is it so easy to feed corrupt and/or incompetent banksters with cheap money, so hard to find the cash to put the masses to work?

At some point printing money will cause inflation so it’s not a step I would take lightly, nonetheless as long as the presses are running freely, why not do something of value with the money besides propping up banks destined to fail anyway, or at minimum that don’t deserve to live?

Yes, but the banksters will answer, if we go broke there’ll be catastrophe. Well, the banksters themselves would suffer for sure, but the people at large are getting nothing from these constant bank bailouts. Far better to close the banks down and take some of that vast amount of free money to cover losses by retail depositors. Then with a few additional spare hundreds of billions new banks can be funded that are designed to serve the people rather than indulge in casino banking and commodity speculation. Historically about 30% of crude oil futures contracts were purchased by speculators rather than end users, today that number is about 65%. Once again, the problem is there’s too much money in the hands of the wealthy who don’t know what else to do with it besides speculation that causes hardship for the rest of us.

The US Fed has been far more generous with American banks than the ECB with their banks, lending trillions of dollars at 0.1%. So borrow one million dollars, pay back one thousand. Sweet deal. Ah, but these bailouts are paying off, we’re told, the recession was over two years ago, the American economy is now growing at 3% and  unemployment is going down. Evenly distributed, 3% growth would be great, but a recent study showed that 93% of America’s income growth in the last two years went to the top 1%. At the same time, the new jobs created are paying less than the old jobs lost. For the vast majority at the bottom of the economic pyramid, it’s all a downward spiral.

All of which is a cause for demonstration, protest and occupy, which is why the US House of Representatives recently passed a bill (HR347) by a nearly unanimous bi-partisan 388 to 3 that would criminalize a large part of what the occupy movement is doing with long prison sentences and heavy fines. The 1% (income over $400,000) which includes almost all of Congress, are scared shitless of the power of the 99% so are intent to crush dissent and turn the country into a police state.

Legislation has just recently passed that gives the president the right to kill Americans, as well as anyone else in the world, who he considers dangerous, without any judicial review. If he says you’re dead meat, his word is law. The US is already infamous for assassinating many political leaders over the years, including ones who were democratically elected, who were deemed bad for American economic interests. Moreover, as little regard as I have for Obama, there is the possibility of truly evil people gaining of the office of president, who might take the right to decide life and death to grotesque levels. Besides being a terrible example to the world.

Have I depressed you enough? Sorry that’s all I can manage today.

Repuglican Circus

Former Supreme Court Justice Sandra Day O’Connor reportedly made a joke recently about the two front runners in the Repug primary… One of the candidates is a polygamist and he’s not the Mormon. Gingrich, the serial philanderer, who was forced out of congress for ethics violations is the darling of the conservatives… they really believe he’s into their small government, family values shit. He swears he’s not a lobbyist, but nonetheless received $25,000 per month from Fanny Mae and Freddie Mac, government mortgage insurers, for his services - not to lobby, mind you, but as a historian.

They also like Santorum, a true conservative who equated being gay to fucking dogs and children, who lost the last contest he fought for US Senate from Pennsylvania by a deluge of eighteen percentage points… real popular guy, that. However, lately he’s on the up and up, winning three contests in a row and shaming Romney, the putative frontrunner.

Then there’s Ron Paul, who, true to his libertarian principles, wants to eliminate Social Security, Medicare and any other part of government that might, incidentally, do anything good for average Americans, who is also noted for putting out a little racist mag.

And what about the turkeys who fell by the wayside (but not before offering a few laughs to the peanut gallery)? Like the pizza guy who regularly pays hush money to keep sexual abuse incidents quiet, who didn’t know that China has had nukes since the early sixties. Or how about the dim bulb from Texas who couldn’t remember which three government departments he wanted to eliminate?

The grand prize will likely go to “Corporations are people” Romney. People own them and work for them, don’t they? Yes, but when’s the last time Texas executed one? That’s how you know what a person is. Dumbocrats will also gleefully take his comment that he doesn’t care about very poor people out of context, though even in context it shows how far out of touch he his. He went on to say that they are taken care of by the country’s safety net… except it’s the worst safety net in the developed world and leaves millions of people in desperate straits. But give him credit, he’s the first major politician who’s uttered the words poor people since Lyndon Johnson… except, that is, to berate them for being poor because they’re lazy. Newt would solve that problem by having them work their way through middle school as janitors. Not only would they learn the value of hard work, schools wouldn’t have to soak downtrodden and long suffering middle class taxpayers (who, in the world of America today, have incomes up to $250,000) for the cost of a low end but livable wage for school janitors.

Let me recount a story about laziness and opportunity amongst poor kids. Some twenty or thirty years ago a wealthy New Yorker found himself teaching a ghetto class of teenagers. I don’t remember what brought him there, whether it was purely voluntary or he was required to be there for some reason. He wound up liking the kids so much he offered, on impulse, to pay all costs of higher education for any kid who did well in school. Almost all the kids in that class went on to college compared to almost none in other classes in the same school. Community colleges used to be free. City College of New York where I got my B.A. used to be free. Otherwise I couldn’t have gone since I was a single parent working for peanuts driving a cab. Society should first provide opportunity then talk about lazy poor people who don’t take advantage of it.

Anyway, forget about Newt, he hasn’t got a chance in a million of being the nominee. Though they may love him in their hearts, even dumb as doorknob Repugs know he can’t win against Obama. Though after Santorum’s recent wins, the Repugs might actually rather go down in flames rather than have a chance at the presidency.

So back to Romney. His other glib great-to-take-out-of-context remark was the one about liking to fire people. In context he added; who provide services to me I don’t like. He was referring to medical insurance and, having hundreds of millions in the bank, he does have a few choices. And no matter how big the co-pays he’s not likely to be forced to declare bankruptcy because of them. Seventy percent of Americans are forced into bankruptcy because of medical bills, sixty percent of those had insurance but couldn’t cover the co-pays, a situation which hasn’t changed a bit with Obamneycare.

In spite of the obvious heartlessness and cluelessness of his statements, his sleaziest attribute by far is the way he made his fortune as a vulture capitalist. Putting it in simplest terms, you look for a healthy going concern to buy. You use a small amount of your own money and borrow the rest using the assets of the company as collateral. Once you’ve got it in your clutches you load it down with debt to pay your creditors or you strip it of its assets to pay those debts, either way the company is toast. You don’t care what happens to the company because you’ve made your money by charging exorbitant fees in the process of destroying it. In that way he bought a Florida company employing 700 people with $30 million of his own money and then earned more than $500 million while bankrupting it and destroying 700 jobs.

            Meanwhile he might well be the next president. If the vote is close the Repugs will steal the election and the Dumbos will figure, as they did in the cases of both Gore and Kerry, that if the Repugs are smart enough to steal it they must deserve it so it’s a waste of time trying to fight for an honest vote count.

Anyway, it won’t make much difference to the American people since he’d be governing from almost the same position as Obama minus a few details. The banksters love Romney, but they’re doing really well under Obama, who’s doing his best to burnish his creds with them. Obama’s new chief of staff, Jack Lew, came right out of Citigroup. William Daley, the previous one, came directly from one of the other megabastard banks into the most important position in the white house. Do you think it’s possible that Obama, if he looked really hard, could find one person in the whole US of A to run his staff who wasn’t a sleazoid, scumbag bankster? Evidently not.

            Obama’s justice department is pushing hard for the states to accept a settlement with the banks over mortgage fraud. It’s a total sell-out, free pass, get-out-of-jail-free card. The banks get to pay $25 billion where the damage is up around $700 billion. They get to do that without admitting any wrongdoing or anybody going to prison for malfeasance. The $25 billion is nothing especially since the banks can borrow it from the Fed at close to 0% interest.

As it stands now Obama will have the advantage of saying the economy is improving since it’s been growing at about 2% and unemployment is going down. But when you look more closely at the numbers you see a completely different picture since some 90% of the growth in the economy has gone to the top 10% in the form of rising stock values and the new jobs created pay a lot less than the ones that have been lost. New manufacturing jobs pay only half what they paid just a few years ago. Once again income is being transferred from the poor to the rich.

So where are we then? Well, Americans will have a choice this November between a cool guy who’s a center right conservative and a doltish megamillionare who’s a center right conservative. And the banksters will be shitting their pants with glee either way.

It’s About Time

After getting mercilessly butt reamed over the past few years after getting royally shafted since Reagan’s time, the people are finally standing up and fighting. What began with a couple hundred hardy souls camping out near Wall Street mushroomed last weekend into 950 demonstrations in 80 countries.

However, just to try to make sure the demonstrators in the US understand that their quest for equity and fairness and a healthy economy for all is futile, the Congress, at the behest of President Obama, passed free trade legislation with Korea, Columbia and Panama. They wanted the people to know that it didn’t matter which party they voted for, they were going to get shafted nonetheless. While free trade areas do create certain types of jobs for Americans, many more are lost, that’s why a large majority of Americans are opposed to FTAs.

In addition, the worst, most egregious aspects of the pacts were left unchanged from NAFTA; that is, the rights given to corporations to sue for damages when environmental legislation, for instance, cuts into their profits. The most famous example was the Metalclad Company’s attempt to build a toxic waste dump in Mexico near the US border. When the local authorities refused a permit, the company sued and forced Mexican authorities to pay $25 million in compensation. What’s more, the trade courts that adjudicate those issues are made up totally of corporate hacks and their deliberations are in secret. While they do lately occasionally judge in favor of the environment, the first 48 cases were all in favor of the corporations and against the people.

Obama campaigned on the promise to renegotiate NAFTA to eliminate its worst aspects, instead, at the behest of corporations who own him and who have no interest in anything but their own profits, he’s carried them forward to taint the new pacts.

Or take the example of Greece. While it was the conservatives who were in power when the world economy started to meltdown, who used the deceitful and charlatanesque talents of Goldman Sachs to hide the true deficit, it’s the ‘Socialists’ who are now in power who are trying to ram austerity down the throats of the people. All mainstream political parties in the Western world, regardless of whether they call themselves conservative or liberal or socialist, have bought into the feed-the-rich, save-the-banks-at-all-costs, economic paradigm.

They say not feeding the banksters will result in catastrophe, but it’s already catastrophe for large numbers of people. In fact, the only people to really suffer in a banking meltdown would be the 1%, those who’ve been sucking on the government’s corporate welfare tit. The trillions of dollars spent to save the banks only went to protect the obscene salaries and bonuses of the banksters, the gifts to the banks did nothing for the economy or the citizenry in need. Much better to let the banks fail, pay off the small depositors, and use the vast sums now being spent to save bloodsucking monster banks to instead create new smaller community oriented banks. One trillion dollars would capitalize 1000 banks at $1 billion each, 10,000 banks at $100 million each, 100,000 banks at $10 mil each.

It would be good for the banks to fail and the 1% to take a big hit to their deep pockets because they are too rich and powerful, they need to be brought down. Those resources held by the few are not good for anyone or anything but themselves. Until they take a real hit, the world’s economy and politics can never be righted.

It’s not going to happen because the banks and the 1% own the government. With the exception of about 70 Democrats who call themselves progressives, there’s no movement in Congress to correct the wrongs of today’s economy and turn it into the right direction. 75% of the American people, including 55% of Republicans want taxes raised on the wealthy to bring down the deficit, but there isn’t a Republican in Congress who would vote for that, and not all that many Democrats either, and only a few Dems who would really fight for it.

We’ve been through this all before, I feel like I’m just repeating myself. I see no light at the end of the tunnel, no dawn on the horizon, no rainbow in a heavy, steely gray, overcast sky.

However, futile or otherwise, I’d love to be out there demonstrating. It’s cool, it’s fun, it’s solidarity, it’s comradeship, it’s a little bit of hope. And it’s about time.

It’s the Bank’s Problem

There’s a saying about banks and borrowing: If I borrow $10,000 from the bank and subsequently default, it’s my problem. If I borrow $10 billion from the ban, and default, it’s the bank’s problem.


Greece is on the edge of default. All the money thrown at the country in recent times has been expended in the fervent hope that some miracle will happen to make the country’s debt sustainable. European and international financial institutions are in denial of the inevitable default so are merely delaying the day of reckoning.


They are deathly afraid that Greece’s default will drag several large European banks down with them, because that’ll mean ‘recapitalization’, in other words, another bailout. If they can stave off default by loaning the country lots of money (which it’s very unlikely to ever be able to pay back under any circumstances) then they won’t have to give away lots of money to their too-big-to-fail banks. Either way a lot of good money will be thrown after bad and the citizens of the more frugal northern countries called upon to bail Greece out will be just as irate as the Greeks who are being called on to make sacrifices.


There are three basic reasons why default is inevitable. First is that the country’s debt level is just too high. All of the austerity measures taken and demanded so far by the international financial institutions and Eurozone countries who are loaning the money are only reducing the annual deficit, not balancing the budget, so under the most optimistic scenario, Greece’s debt will continue to rise to even more stratospheric and unsustainable levels. Secondly, many, if not most of the measures undertaken to reduce the deficit are slowing the economy, thus raising unemployment, which then increases social costs and reduces revenue and so turns out to be counterproductive; the more austerity that’s enforced or attempted, the closer the country comes to default.


Finally, the people won’t stand for additional austerity regardless of any consequences that might befall the country. Maybe they truly do not understand the seriousness of the situation or maybe they do, but either way they are fighting back to the point where the government will be powerless to act. Maybe the Greek people think default will be better than trying to meet the country’s crushing debt obligations or maybe not, but either way it won’t be pretty. At least under default the slate will be wiped clean, or at least reduced to a manageable level.


Greece’s economic problems, along with those of Ireland, Portugal, Spain, Italy, UK, US and many more countries, goes back to the fundamental ethos of neo-liberal economics that’s held sway in the financial world since Reagan and Thatcher.


Neo-liberalism has three basic tenets. First is the obsession with growth in all situations regardless of the existential circumstances of each country. Second is the insistence on low taxes on corporations and the wealthy. Third is the demand that the actions of the economic establishment be unregulated.


Japan provides the best example of the absurdity and idiocy of the all-growth-all-the-time paradigm. Economists the world over have lamented Japan’s ‘lost decades’ of stagnant economic growth. But Japan is already a wealthy country and it not only has a declining population but also an aging one. If population as a whole is declining and the proportion of the elderly, who typically have less need or desire to consume, is growing then the economy should be declining, not growing. Moreover, if the economy is ‘stagnant’(I prefer the word, stable) in a declining population then its per capita income is actually growing: shouldn’t that be enough? And yet, in a frantic and ultimately futile attempt to adhere to neo-liberal economics the country has amassed the world’s highest debt to GDP ratio - 220% - building lots of bridges to nowhere. If they hadn’t accepted the obsessive growth paradigm they could’ve shared the available work and taken lots of vacations instead of continuing to work the longest hours of any industrial society. They could’ve rested on their laurels, been content with their already wealthy status and started to enjoy life.


The insistence on low taxes for corporations and the wealthy has two major impacts. One is the excessive and destructive speculation that arises from the wealthy having too much money on their hands. The other is the debt that governments accumulate because tax receipts are insufficient when the fat cats are lightly taxed.


Finally, the demand that the activities of society’s economic controllers be unregulated combined with them having more money than they know what to do with brings wild economic swings with inevitable and debilitating busts coming after giddy and unsustainable booms. It doesn’t have to be that disastrous for an economy or a people. Germany experienced a downturn equal to America’s but its unemployment rate grew only minimally. They accomplished that by setting up a program that encouraged companies to put people on short hours with the government making up the difference.


If we were going for sustainability, the good life, spiritual growth instead of blind, mindless consumerism, there’d be neither booms, nor busts. There’d be neither high unemployment, nor widespread poverty. It wouldn’t take much in the way of income redistribution to insure that no American needed to be hungry or homeless. Meanwhile, the poor and middle classes are called upon to sacrifice so that the wealthy can have more tax breaks. And the Repuglicans call it class warfare when the masses object.


Every tax law is a political statement; one way or another somebody is going to have to pay. Since nobody likes taxes and governments are therefore reluctant to levy them, they’ve relied on huge levels of borrowing to make up the difference in the fervent hope that economies will grow enough to make the additional debt payments tolerable. That works until the burdens get too large for governments to sustain and/or inevitable downturns happen because of deregulation and speculation. Either way you’re in a pickle.


Now Obama, our very own Manchurian candidate, is starting to talk tough about raising taxes on the wealthy. Ah, yes, the campaign is beginning and since raising taxes on the wealthy is supported by more than 70% of the American people, it sure won’t hurt his chances for reelection to throw a little red meat to the angry electorate. However, he also made sure to keep his overseers happy by agreeing to cuts in Medicare and Medicaid, saying he wouldn’t accept cuts in those programs without (minimal) tax rises for the wealthy. In other words, slash away wingnut congress, your dream of starting the evisceration hated social programs has been answered.


The world is slouching towards economic disaster because nothing has changed since the 2008 blowout to rein in out-of-control banksters. Witness a ‘rogue’ trader at Swiss bank UBS losing the bank more than $2 billion. You’d think they’d be watching a little more closely or investing a little more conservatively. The certainty of another crash is also indicated by a recent news announcement from the UK that retail banks, where people have their checking accounts, etc., were going to be separated from investment banking, which is no more or less than speculation, a.k.a., gambling. Separation is an absolutely essential change if future bailouts are to be avoided. The problem is that the UK’s new rule is not programmed to take effect until 2019, giving the banksters all the time they need to create another, even multiple, banking meltdowns. Why 2019? Why not 2050? Sure wouldn’t want to unnecessarily rush the banks, would we?


Anyway, there’s always more money in the coffers for bankster welfare… until there isn’t. There will be until the people rise up and say, No more!, regardless of the consequences.

Ireland Again

Ireland Again

An Irish friend on my email list commented on my last post saying he agreed with everything I said except for my position on Ireland’s very low corporate tax rate, saying companies will leave if it is raised.


Shane can correct me if I’m off base but this is how I see the evolution of Ireland’s current economic problems. Ireland’s great boom before the recent crash was based on a combination of the mentioned low corporate tax bringing an influx of industry, an educated English speaking population and being part of the European Union so it’s products had access to a very large market. The country’s 10% tax, which some countries consider to be predatory, created an industrial boom and turned Ireland, which historically was an exporter of people, into an importer of labor.


Lots of new people needing homes and high economic growth – the Celtic Tiger - brought about the housing boom, in which, as I’ve read recently, a small house in Dublin was worth the same as a chateau in northern France. Like in America, speculation ran wild, leading to the inevitable bust.


With a more average tax rate, growth would’ve been slower providing jobs for the Irish but not creating a magnet for immigration and engendering the outsized economic boom. Ireland’s English speaking population was always going to give it an advantage in attracting American investment regardless of its tax rates. In an economic paradigm in which the highest growth is always the primary goal there will always be boom and bust. Moreover, low corporate taxes make balanced budgets impossible without placing heavy burdens on the workers.


Now we have the European Central Bank and IMF saying maybe investors in failing banks and bankrupt countries should take a loss. MAYBE! MAYBE! What a radical thought. Germany and other nations are keen for Ireland to institute severe austerity measures to get its finances together and take big loans to pay its bank’s debts. If Ireland defaults, Germany’s banks will suffer and that country will feel obligated to subsidize its banks directly instead of loaning the money to Ireland, so it’s easy to understand why it wants Ireland’s taxpayers to suffer.


Another facet of the world’s rotten banking system which is intimately aligned with mendacious government complicity has come to light in the past few days. Bernie Sanders, Independent senator from Vermont, who unabashedly refers to himself as a socialist, was instrumental in having a clause inserted into America’s recent banking reform which requires the Fed to disclose where it’s been spending its money. Ben Bernanke, Obama’s appointee to the Fed; sorry, Bush and Obama’s Fed choice, had been fiercely resisting that disclosure.


It’s not hard to understand why. The Fed printed up more than a trillion dollars ($1,000,000,000,000) to buy toxic assets from foreign banks. A German bank got nearly $300 billion, a Swiss bank around $270 billion. When it comes to saving them from their stupid decisions, the Fed will, evidently, go to the ends of the earth to find craven banksters in need.


Another couple trillion of printing press money went to American banks, Goldman Sachs by itself got $600 billion. This of course is all aside from the TARP bailout you all heard about. At the height of the banking crisis in 2008, Goldman was changed overnight from an investment bank to a retail bank (though, of course it really isn’t) in order to get free money from the US government and to protect the wealthy from their own malfeasance and greed. They’ve done so well with all that government money thrown at them, they’re making record profits and giving themselves record bonuses. Well, why not. If you’re conniving and smart enough to finagle vast sums of public money with the collusion of your government, you must deserve it. To the victor go the spoils.


To the rest go the dregs.

Ireland Et All

Ireland Et All

Now it’s Ireland’s turn to seek a bailout from Europe and the IMF.
Actually it’s not the government that has the problem - though for sure
the country has a very large budget deficit and public debt - but it’s big
banks. Gotta save those big banks and the big money people who are
invested in them. If we just give them all the money they need to be
solvent, then they’ll start lending again and all’s right with the world.
They’ve already gotten $178 billion from the European Central Bank and $48
billion from the Irish government; about $5000 for every person in the
country. But that was not enough so there must be no end to feeding the
banksters. The Irish government is now about to get another $130 million
to help out banksters in need. Considering all the ‘financial instruments
of mass destruction’ - in the words of Warren Buffet, one of the world’s
richest men - floating around the system there will never be enough money
to make them right.

Why not just let them go broke, pay off depositors, the people who had no
role in their recklessness, avarice and malfeasance, and screw the rest.
If you invest in a bank, you are gambling on its value rising. If the bank
is worthless then you lose: It’s very simple, it’s called the free market;
or unfettered capitalism, you know, the kind that makes everybody rich,
except when it doesn’t. In that case, pure capitalism requires that you
make sure nobody on top loses money, otherwise the whole financial edifice
comes crumbling down. And where would we be then?

Well, why not let the greedy bastards go bust and then start some new
untainted banks. The world would still be awash in investment cash, what
with the great transfer of wealth in the past thirty years from the lower
classes to the upper, so there’d still be plenty of money to start new
banks.

Ah, but the greedy bastards own the governments, so that can’t be allowed
to happen. If a little guy runs into a string of bad luck, maybe loses his
job in a market where there is no replacement work, or has his house
foreclosed and winds up on the dole in Europe or on the street in America,
then that’s the breaks; government can’t be responsible for the comfort
and happiness of every citizen, besides, if you help the little guy too
much he’ll lose his incentive to work.
For the fat cats, on the other hand, it doesn’t matter how much you give
them: since they’re already rich, it doesn’t impact their desire to have
more.

We heard the term moral hazard quite a bit back in 2008 when governments
in much of the developed world rushed to the rescue of the banksters. If
you bail out banks that have taken excessive risks, then they’re likely to
do it again. Makes perfect sense. There’re lots of profits when things are
going well and free money from the state when your speculations go awry.

Back in 2008 when Lehman Brothers investment bank went bust without
government help, the media characterized the result as chaotic even
catastrophic for the markets. Chaotic for who? Well, the people who
gambled on the bank and lost and further, there was a loss of confidence
in the markets which caused a lot of stocks to go down and people to lose
money. The magic of the free market again. Is it the responsibility of
government to protect investor money? Evidently yes. So now, to avoid the
turmoil of its big banks failing and causing hardship for their owners,
Ireland is going to borrow tens of billions more to shore them up.
Meanwhile the people are seething with contempt for the banksters and
their government.

Ireland levies very low corporate taxes, which along with property
speculation caused the bubble that has since burst, but is refusing to
consider raising those rates in spite of the country’s terrible financial
straits. However, if you don’t levy taxes where the money is, you’ll never
have sufficient revenues to pay your bills except in extreme bubbles.
Those low taxes have been a problem for other European countries right
along who are now expected to put up the money to rescue Ireland’s banks.
They are demanding changes before they hand over the cash. When you are
out there hat in hand seeking a bailout, you don’t get to keep all your
prerogatives, so it’ll soon be faced with a hard choice.

America’s financial situation; huge budget deficit and national debt, is
equivalent to Ireland’s and its solutions quite similar. Obama’s Deficit
Reduction Commission, aka Catfood Commission – let them eat catfood – is
recommending large cuts in Social Security, Medicare and every program
that helps the people at large, while also recommending tax cuts for
corporations and the wealthy. After nine years of Bush tax cuts not
reviving the economy and not resulting in a balanced budget, it seems pure
insanity to imagine further cuts will now reduce the deficit.

But that’s where the US is at. The American people have just elected a
House of Representatives that has as it’s top priority screwing the
commoners so the wealthy can have more. And the country still has a
president who’s will to fight for you and I is as resolute as a wet
noodle.

Sometimes I look back at what I’ve written in the past and wonder why I
keep doing it. I sound like a broken record and expect maybe you are bored
by now. Over the years I’ve written a succession of times that the
American people won’t smell the shit – that stuff that’s just been
liberally spread around after hitting the fan - until it’s right in their
faces, and yet it still keeps coming and they still can’t smell it. I keep
writing that things won’t change until the situation gets really bad and
yet things keep getting progressively worse and the only real response is
the Tea Party which is proactively dedicated to making things even much
worse. Meanwhile, no matter how bad it gets, I can’t even imagine a
scenario in which the people will rise up to demand real changes.

Moreover, in contrast to Ireland which has instituted severe austerity
measures and raised taxes for many, the US is working on a tax cut. It’s
as if the two countries were not on the same planet. Forty percent of the
US budget now comes from borrowing. Imagine where you as an individual
would be if you earned $60,000 a year but borrowed so you could spend
$100,000. How long would it be before you had to make painful adjustments
and started paying that debt off.

As a government, you have another option, you can print money, though that
too is fraught with peril. If you go too far, your money becomes worthless
and that is especially problematical for a country that’s dependent on the
wealthy and other countries to buy your debt.

Some leftist economists downplay the deficit problem saying it’s most
important to get the economy moving because that brings in additional
revenue and thus brings the deficit down. But without adequate taxation
the deficit can never be brought under control. The other problem with
giving tax breaks to the wealthy, and personally I consider someone making
$200,000 per year to be wealthy, is that they will speculate with part of
it - something which has no redeeming value for society – and since they
already have everything they need, what extra they do spend will
unnecessarily tax the world’s resources and environment.

We need to encourage people who are already wallowing in plenty to work
less, earn less and spend less. This of course is impossible for the
leadership to contemplate since they are locked into endless growth as the
be-all and end-all of civilization. The fact that endless growth is a
theoretical impossibility doesn’t seem to register.

It’s all ass-backwards. You rescue the big banks so they can go on the
business of foreclosing people’s homes and charging outrageously usurious
interest on credit cards even though they are now able to borrow money
from the Fed at zero percent interest. You save them from their own
disastrous and dishonest actions and thus keep them from bankruptcy by
plying them with public money so they can pay themselves record bonuses.

It’s all bass-ackwards and it sounds like I keep repeating myself just to
have something to say. You’ve heard it all before. Why aren’t you on the
streets like the French protesting against sacrificing benefits for
commoners so the opulent class can have more? Why aren’t you all seething
with vitriol at the great bankster ripoff? Or if you are, what are you
doing about it? Why is it that only imbecilic Tea Partiers care enough to
take a stand?

I have no idea: well, maybe I do but hardly anything about American
politics seems to make any sense anymore. The only things that would make
a difference for the American people; single payer health care, true
banking reform, a solid effort to tackle climate change and approaching
resource depletion with a carbon tax and a massive program to convert the
US to sustainable energy are nowhere on the horizon; truly inconceivable,
truly unimaginable. A truly fucked up state of affairs. So be it.